Committee hears bill to require prevailing wages on large utility construction projects

CARSON CITY — The Assembly Committee on Government Affairs heard testimony May 5 on Senate Bill 443, which would require contractors and subcontractors awarded construction contracts for certain large electric-generation and natural gas infrastructure projects by public utilities to pay prevailing wages, sponsor Senate Majority Leader Nicole Cannizzaro said at a committee hearing.

Cannizzaro told the committee the bill adds a legislative declaration and definitions to the Nevada Revised Statutes to specify that prevailing-wage rules that apply to public works should also apply to "significant operational or capital requirement projects" awarded by public utilities. She and proponents said the policy is intended to support a skilled, local workforce, reduce rework, and enhance public safety; Cannizzaro also said the bill would not be applied retroactively. A proposed technical amendment available on NELIS adds language noting public-safety benefits and clarifies exemptions, she said.

The bill's core provisions, as explained in testimony, would: require prevailing wages for construction work on significant utility projects even when the work would not otherwise qualify as a public work; define "public utility" and "significant operational or capital requirement project" for the purposes of that requirement; exempt work performed under collective bargaining agreements, project labor agreements or worksite agreements; and make the statute nonretroactive. No final vote was taken at the hearing.

Proponents from labor and the building trades said prevailing wages preserve local jobs, apprenticeship pathways and construction quality. Vince Saavedra, executive secretary-treasurer of the Southern Nevada Building and Construction Trades, said the bill is meant "to ensure that workers on the majority of the utility projects are paid prevailing wage, which is ... essential for attracting and retaining skilled labor in the state." Several union representatives and local trade organizations testified in support and urged the committee to move the bill forward.

Union witnesses and supporters cited local examples they said showed out-of-state workers on Nevada jobs and offered an industry study and anecdotal accounts arguing prevailing wage does not raise costs. Greg Esposito of the Nevada State Pipe Trades said, "There have been many studies across the country that prevailing wage does not increase prices," and described an incident where out-of-state welds were rejected and replaced for safety and quality reasons.

Opponents representing open-shop contractors and construction-industry trade groups urged the committee to reject the bill or narrow it, calling it an unprecedented expansion of prevailing-wage law into the private sector. Warren Hardy of the Associated Builders and Contractors of Nevada said the proposal "would be an unprecedented expansion of prevailing wage into the private sector." Alexis Moderex of the Associated General Contractors warned the bill could create two classes of contractors and impose new payroll-reporting burdens that would change competitive dynamics.

Representatives of major utilities spoke in neutral, saying they worked with the sponsor to accept amendments and that the bill, as amended, could be acceptable. Ryan Bellows, vice president of government and external relations at NV Energy, said NV Energy has longstanding partnerships with the building trades and apprenticeships; Scott Lead of Southwest Gas said the gas utility expects the measure to apply to pipeline replacement projects approved under the resource-planning process and thanked proponents for working toward neutral language.

Committee members asked about rate impacts, the scope of covered projects and whether the bill would apply to affiliates or small maintenance work. Cannizzaro and witnesses said the bill targets large capital or operational projects (for example, transmission lines and pipeline replacement projects approved through utilities' planning processes), not routine maintenance, and that proponents believe greater use of trained, safety-certified workers can reduce rework and improve timelines. Opponents said the change would extend prevailing-wage obligations beyond traditional public-works projects and could increase costs passed to ratepayers or private customers.

The hearing record included a proposed technical amendment and multiple supporters and opponents on the record. No committee action or vote on SB 443 was recorded at the hearing; the committee closed the bill hearing and moved on to public comment. The committee announced its next meeting for Monday, May 12 at 8 a.m.