Tuesday, June 21, 2005
Copyright © Las Vegas Review-Journal

Governor vetoes measure revamped by lawmakers

Guinn criticizes proposal as an extension of prevailing wage rule

CARSON CITY -- Gov. Kenny Guinn has vetoed a bill that started off as a plan to reduce the authority of the state fire marshal but ended up requiring the payment of higher wages for workers on a Carson City hospital project and similar projects.

Guinn said he vetoed Senate Bill 274 at the request of its sponsor, Sen. Mark Amodei, R-Carson City, because it "was changed so substantially during the last minutes of the legislative session" and could have led to higher costs for other projects in Nevada.

The bill was only the third vetoed by Guinn. That compares with more than 540 measures he signed into law during the Legislature, which adjourned June 7.

Because the Legislature meets only every other year, lawmakers will not have a chance to override or sustain the veto before the next session begins on Feb. 5, 2007.

In his veto message, Guinn said the bill began as a simple proposal to revise the duties of the state fire marshal and to conduct a study of the fire marshal's office.

But he said six sections were added to the bill late in the session that would have extended the prevailing wage law to apply to private economic development construction projects.

The prevailing wage is what is paid to construction workers on government public works projects. The state labor commissioner surveys construction project wages in a particular area and comes up with the wages that must be paid. Wages in Clark County would be higher than those paid in rural areas. Typically the prevailing wage is higher than what is paid construction workers on private projects.

Sources said the requirement in the bill was spawned by a dispute over wages paid carpenters working on the new Carson-Tahoe Hospital in Carson City. A projection of the additional costs it would have meant for that project could not be obtained Monday.

Amodei said another reason he sought a veto of his own bill was because it also contained changes that would have prevented the Clark County School District from using a single design for a number of schools. It's not clear who added that provision in the bill.

"It would have slowed down school construction in Clark County," Amodei added.

He said the amendments were added by Assemblywoman Chris Giunchigliani, D-Las Vegas.

Giunchigliani said Monday that she informed Amodei of the prevailing wage amendment. And she said she had nothing to do with the school design requirements.

"If you use public taxpayer money, bonds, you are subject to the prevailing wage," she said. "Carson-Tahoe came up with something that said they weren't. If we say in the statutes that public projects must pay prevailing wages, then the labor commissioner cannot make a ruling that flies in the face of the Legislature. But if you are using the public taxpayers as credit, then you ought to be paying the prevailing wage."

Some of the financing for the hospital project comes from tax-exempt industrial development revenue bonds issued by the state Department of Business and Industry for projects that benefit communities.

About $810 million in bonds have been issued statewide, contributing to jobs for 4,000 workers, according to the department.

The Las Vegas Monorail project was funded using a similar bonding method, with no requirement for prevailing wages.

Guinn was warned by the department in a March memo that enforcement of the prevailing wage law for the hospital project could set a negative precedent that would reduce requests for bonds and might generate lawsuits against past projects in the state.

In his veto message, Guinn maintained that requiring the prevailing wage on private projects would be a new step and should not be taken without full public debate.

"Extending the scope of prevailing wage provisions constitutes a significant policy change for Nevada, and that requires significant study and public debate," Guinn said. "This very well may be a policy that the Legislature wishes to establish for Nevada. But such a significant change should not be made without first providing developers, local government officials and other affected parties with the opportunity to educate legislators about the potential effect such a change could have on our state's economy."

He said attempts to add the prevailing wage language to two other bills debated at the 2005 Legislature had been rejected by legislators.