HB 173-PUBLIC CONSTRUCTION CONTRACTS WAGE RATES  3:10:32 PM CHAIR SHAW announced that the next order of business would be HOUSE BILL NO. 173, "An Act relating to public construction contracts; and providing for an effective date." 3:11:05 PM REPRESENTATIVE KEVIN MCCABE, as prime sponsor, presented HB 173. He paraphrased from the sponsor statement [included in the committee packet], which read as follows [original punctuation provided]: House Bill 173 seeks to modernize an outdated statute to better address the specific challenges of construction in Alaska. Specifically, it updates the Little Davis Bacon Act (LDBA) public construction contract thresholds in our state. The current threshold of $25,000 is deemed inefficient due to various Alaska-specific factors and inflationary pressures over the past 11 years. Many states have either eliminated thresholds altogether or raised them to $1 million. This bill proposes raising the threshold to $150,000 to better reflect inflation and current industry costs. This adjustment would streamline processes, reduce administrative burdens, and enhance efficiency in public construction projects statewide. Moreover, it would encourage smaller contractors to bid on contracts and help address the labor shortage in the construction industry in Alaska. Furthermore, the increased threshold would address unique challenges faced in Alaska, such as high transportation costs in rural areas. Currently, even minor projects, like repairing 20 potholes, may necessitate compliance with LDBA regulations due to exceeding the threshold. Support for House Bill 173 is crucial for adapting regulations, ensuring equitable participation for local contractors, and fostering economic development in the face of inflation and workforce shortages. Let's modernize our approach to public construction contracts and propel Alaska forward. Thank you for your attention to this important matter. REPRESENTATIVE MCCABE stated that HB 173 creates opportunities for smaller enterprises, which could lead to job creation and community development. The bill acknowledges the need for a more streamlined process for smaller public construction contracts. Projects under $150,000 would move projects forward more efficiently and facilitate timely improvements to local infrastructure without unnecessary bureaucratic hurdles. 3:12:43 PM JULIE MORRIS, Staff, Representative Kevin McCabe, Alaska State Legislature, on behalf of Representative Kevin McCabe, provided the sectional analysis for HB 173 [included in the committee packet], which read as follows [original punctuation provided]: Section 1: Amends §AS 36.05.005 to raise the minimum dollar threshold for which the requirements of Title 36 (Public Contracts) apply to public construction contracts from $25,000 to $150,000. 3:13:31 PM REPRESENTATIVE STORY asked about the limit of $150,000. 3:13:37 PM REPRESENTATIVE MCCABE answered that local contractors from his district informed him that they were struggling to complete simple projects like laying gravel on a mile of road under the $25,000 currently in statute. This meant that an engineering process needed to be completed, which costs construction projects a minimum of an additional $70,000. 3:15:06 PM REPRESENTATIVE CARRICK asked how many states have eliminated or raised thresholds to $1 million. 3:15:30 PM MS. MORRIS offered to follow up with specific information after the meeting. 3:16:48 PM CHAIR SHAW announced that HB 178 was held over.