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Proposal to Impose Prevailing Wage Requirements Heard in House and Senate
The bill would impose prevailing wage requirements on certain tax increment financing projects.
On April 5, the Senate Labor Committee heard SF 5157 (Sen. Grant Hauschild, DFL-Hermantown), which would apply prevailing wage requirements to housing tax increment financing (TIF) projects. Prevailing wage is the minimum hourly wage employers must pay certain workers who work on construction projects where state dollars are used to fund the construction. The prevailing wage includes the employer’s cost of benefits, according to the Minnesota Department of Labor and Industry.
The proposal was laid over for possible inclusion in an omnibus bill. It has not yet been heard by the Senate Taxes Committee and would likely have to stop there prior to going to the Senate floor for consideration.
On April 4, the House Taxes Committee heard the House companion bill, HF 4994 (Rep. Nathan Coulter, DFL-Bloomington). It was laid over for possible inclusion in the omnibus tax bill, which will be released in the coming weeks.
What’s in the bill?
Both bills include prevailing wage requirements for all housing tax increment financing (TIF) development projects that are for multifamily housing developments of 25 or more units or any development receiving $100,000 or more in TIF assistance.
The House version also expands prevailing wage requirements to low-income housing credit allocations used for multifamily housing projects of more than 10 units. The House version would also apply prevailing wage requirements to construction projects that receive sales tax exemptions either through the general state exemption or special law. These requirements would apply to projects that receive financial assistance after Aug. 1, 2024.
Testimony
Testifiers in favor of the bill spoke about workplace violations that have taken place at projects that did not have prevailing wage requirements. The Associated Builders & Contractors said the bill would result in increased costs to consumers and taxpayers.
The League of Minnesota Cities does not have a policy position on prevailing wage requirements and did not testify on the proposal.