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Committee approves bill letting qualified outside contractors install utility infrastructure under utility inspection; passes with amendments
Summary
House Bill 542, as amended, requires utilities to allow qualified third-party contractors to construct infrastructure subject to utility inspection and testing. The committee approved the amended bill 7-2 and advanced it to full commerce after debate about fiscal impacts and inspection safeguards.
The House Commerce Committee voted to advance House Bill 542, as amended, which requires utilities to establish programs that allow qualified outside contractors to construct utility infrastructure under the direction of a third-party engineer and subject to inspection and testing by the owning utility.
Sponsor Chairman Vaughn said the measure is intended to introduce market competition, transparency in cost structures, and flexibility in utility staffing, arguing that utilities could shift toward maintenance and operations while outside contractors build new infrastructure. Vaughn told members the bill includes contractor approval, testing requirements, bonding and warranty provisions and that it reflects practices already common in some water and wastewater projects.
Opponents and questioning members expressed concern about potential fiscal impacts and the risk that utilities might pass increased costs to ratepayers. Representative Clemens and others pointed to the bill’s fiscal memorandum, which the committee described as showing potentially significant but unquantified impacts. Representative Barrett and other members raised the possibility of conflicts where a third-party engineer might also work for developers; Barrett also noted a $1,000 fee limit in the bill’s text that members said could be problematic because project complexity varies.
Chairman Vaughn and supporters said utilities retain the right to inspect and test work before accepting it, may require up to a one-year warranty, and may require performance and payment bonds. Representative Burkhart, a practitioner in the field, told the committee that private contractors already perform much of this work and that the bill would formalize an existing practice in ways that could reduce costs.
The committee adopted amendment drafting codes 4176 and 5790 during the hearing; the chair announced the vote to send the amended House Bill 542 to full commerce with a tally of 7 ayes and 2 nays.
Ending: Committee members asked the sponsor to continue working with utilities and local authorities on inspection, fee and conflict-of-interest language before the bill’s next stop in the full commerce committee.
