Stakeholders urge fixes to A3994 after committee expands prevailing‑wage definitions

A3994, a bill amended in committee to extend state prevailing‑wage requirements beyond public higher education projects, drew broad testimony Wednesday from business groups, builders and municipal associations who said recent changes could unintentionally expand the law to projects receiving public subsidies.

Elyssa Frank, vice president of government affairs for NJBIA, told the Assembly Labor Committee that a late amendment left inconsistent language in the bill and warned the expansion could apply to projects that receive tax abatements or exemptions. "This expansion is problematic ... prevailing wage typically increases the cost of construction by 30 to 50%," she said, arguing the added costs could prevent redevelopment in distressed areas.

Anthony Pizzottillo, representing NAIOP, said a senate amendment on Feb. 9 broadened the bill’s reach to include public subsidies such as tax abatements and incentives on private projects. "That is a major problem ... it takes the discretion of completing a deal in an urban area," Pizzottillo said, warning towns could lose the flexibility they rely on to attract development.

Speakers including Jeff Kolakowski of the New Jersey Builders Association and Frank Marshall of the New Jersey State League of Municipalities described drafting inconsistencies and practical impacts. Kolakowski highlighted two contradictory definitions of "public works" in the bill and raised hypotheticals about common government assistance triggering prevailing‑wage coverage: "If that hot water heater has their energy star rebate, guess what? That construction project has a government assistance in it." Marshall said pilots and payment‑in‑lieu‑of‑taxes are "the single most powerful tool" municipalities have to spur projects and warned higher construction costs could reduce municipal revenue and derail projects.

Supporters in the record included labor organizations that favor prevailing‑wage coverage; several business and municipal groups sought clarifying amendments. Committee members said they had received fresh feedback in the preceding days and that the bill’s sponsor, Assemblyman Benezia, was open to additional amendments.

On a motion to amend and release the bill, the committee approved a version that retained the committee’s changes: the bill requires prevailing wage when a public institution of higher education uses the work, extends coverage to certain contracts with entities acting on behalf of a public body, alters the definition of prevailing wage on residential buildings to the lesser of 65% of locally bargained wages or the Davis‑Bacon residential rates, and removed an exclusion tied to projects receiving financing from the New Jersey Housing and Mortgage Finance Agency. Several members recorded "No" votes, citing ongoing concerns about scope and drafting. The bill was released from committee for further consideration.

The committee’s action leaves open whether additional clarifications will be drafted to limit prevailing‑wage obligations to the sponsors’ intended scope. Next steps include revision by the sponsor and potential re‑presentation to the committee for final wording.