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E2SSB 5116 - Clean Energy
Labor Standard Certification
Stakeholder meeting
October 30, 2019
2Washington State Department of Labor & Industries
Agenda Recap of sections 18 and 19 of E2SSB 5116 and timeline
Development of emergency rule language - review and discuss definitions and criteria
benchmarks:– Procurement from and contracts with women and minority owned businesses
– Procurement from and contracts with veteran-owned businesses
– Procurement from and contracts with businesses that utilize apprentices
– Preferred entry for local workers
– History of compliance with wage and hour laws
Development of emergency rule language - review and discuss good faith effort
benchmarks
Next steps– Continue discussions on definitions, criteria, and good faith if needed
– Discuss process and documentation requirements
– Other issues related to the emergency rule development
3Washington State Department of Labor & Industries
Overview
Sections 18 and 19 of E2SSB 5116, sales and use taxes remittances
are available for certain clean energy projects when the projects are
developed in compliance with specific labor standards and certified by
L&I.
Applies to the installation of machinery and equipment installed on or
after January 1, 2020 and completed by December 31, 2029.
4Washington State Department of Labor & Industries
Emergency and permanent rules
L&I is required to adopt emergency rules and permanent rules to:
– Define and set minimum requirements for all labor standards
associated with the certification for tax remittance;
– Set requirements for all good faith efforts; and
– Set other requirements to documentation and the certification
process.
The emergency rules must be adopted by December 1, 2019
Permanent rulemaking to follow
5Washington State Department of Labor & Industries
Eligible Projects - Category 1
Renewable energy systems capable of generating not less than1000
watts electricity using any of the following principle sources of power:
– Fuel cells;
– Wind;
– Biomass energy;
– Geothermal resource;
– Tidal or wave energy; or
– Technology that converts otherwise lost energy from exhaust.
Solar energy projects that generate more than 500 kW of electricity
6Washington State Department of Labor & Industries
Eligible Projects - Category 2
Solar energy projects that generate more than 100 kW but no more
than 500 kW of electricity
7Washington State Department of Labor & Industries
Category 1 projects – tax remittance tiers
50% tax remittance if certified by L&I that the project meets the
following requirements or demonstrates good faith efforts:
– procurement from and contracts with women, minority, or veteran-
owned businesses;
– procurement from and contracts with entities that have a history of
complying with federal and state wage and hour laws and
regulations;
– Apprenticeship utilization; and
– Preferred entry for workers living in the area where the project is
being constructed.
8Washington State Department of Labor & Industries
Category 1 projects – tax remittance tiers
75% tax remittance if certified by L&I that the project meets the
following requirements:
– Meets the 50% remittance standards or demonstrates good faith
efforts; and
– Compensates workers at prevailing wage rates.
100% tax remittance if certified by the L&I that is developed under a
community workforce agreement (CWA) or project labor agreement
(PLA) as defined in E2SSB 5116.
9Washington State Department of Labor & Industries
Category 2 projects – tax remittance
50% tax remittance if certified by L&I that the project meets the
following requirements or demonstrates good faith efforts:
– procurement from and contracts with women, minority, or veteran-owned
businesses;
– procurement from and contracts with entities that have a history of
complying with federal and state wage and hour laws and regulations;
– Apprenticeship utilization; and
– Preferred entry for workers living in the area where the project is being
constructed.
Provides DOR with documentation on the seller or installer
10Washington State Department of Labor & Industries
Category 2 projects – documentation to
DOR Copy of the contractors’ certificate of registration in compliance with
registration of contractors statutes;
The contractor’s current state UBI;
A copy of the contractor’s proof of industrial insurance for the
contractor’s employees working in WA, an Employment Security
Department number, and state excise tax registration number; and
Documentation of the contractor’s history of compliance with federal
and state wage and hour laws and regulation
– Contractor must have no findings of violations of federal or state wage and hours
laws and regulations in a final and binding order by an administrative agency or
court of competent jurisdiction in the past twenty-four months.
11Washington State Department of Labor & Industries
Next steps
Upcoming meetings
– November 15, 2019 at 10:00 am to 12:00 pmL&I Tumwater Headquarters, Room 118 and 119
7273 Linderson Way SW
Tumwater, WA
98501-5414
12Washington State Department of Labor & Industries
Contact:
Maggie Leland, L&I Policy Director
360-902-4504
Sign up for email notices:
Clean Energy Labor Certification email update list
Clean Energy Labor Standards Certification – Benchmarks for definitions and criteria October 30, 2019
Page 1 of 7
Procurement from and contracts with women and minority owned businesses
Definitions
State Certification
Certified by the WA Office of Minority and Women’s Business Enterprises (OMWBE)
Certification types: o WBE - Woman Business Enterprise o MBE - Minority Business Enterprise o MWBE - Minority Women Business Enterprise o CBE - Combination Business Enterprise o SEDBE - Socially and Economically Disadvantaged Business
Enterprise
Qualification o Business:
For profit. Able to perform the core services necessary to fulfill a
contract in the business’s eligible owner(s) area of specialty or expertise.
A small business based on U.S. Small Business Administration (SBA) size standards, which is measured in two ways:
An overall business size standard of $23.98 million in gross receipts over a three-year average.
Size standards according to your businesses’ North American Industry Classification System (NAICS) codes (as assigned by OMWBE). Each NAICS code has a size standard listed in the SBA’s size standard tables.
o Owner: Must be a minority or a woman. “Minority” is defined as
African American/Black, Hispanic/Latino, Asian American, Pacific Islander, Native Hawaiian, Alaska Native, or Native
Federal certification (USDOT)
Certified by the WA Office of Minority and Women’s Business Enterprises (OMWBE)
Certification types: o DBE – Disadvantaged Business Enterprise
Qualification o Business:
For profit. A small business based on both of the following size
standards:
Your business may not exceed $23.98 million in gross receipts over a three-year average.
Size standards according to your businesses’ North American Industry Classification System (NAICS) codes (as assigned by OMWBE). Each NAICS code has a size standard listed in the SBA’s size standard tables.
o Owner: Must be a minority or a women. “Minority” is defined as
Black American, Hispanic American, Native American, Asian-Pacific American, and Subcontinent Asian American. Other individuals may be found to be socially and economically disadvantaged on a case-by-case basis.
Own at least 51% of the business and show contribution of capital and expertise.
Control the managerial and day-to-day operations. Be a U.S. citizen or permanent U.S. resident. Be economically disadvantaged. “Economically
disadvantaged” is generally defined has having a personal net worth less than $1.32 million, not including a person's
Clean Energy Labor Standards Certification – Benchmarks for definitions and criteria October 30, 2019
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American. Other individuals may be found to be socially and economically disadvantaged on a case-by-case basis.
Own at least 51% of the business and show contribution of capital and expertise.
Control the managerial and day-to-day operations. Be economically disadvantaged. “Economically
disadvantaged” is generally defined has having a personal net worth less than $1.32 million, not including a person's primary residence or an applicant business, other guidelines in rule.
primary residence or an applicant business. There are other guidelines, please call our office for more information.
Benchmarks - criteria
Procurement from women owned businesses 2017 Results Washington goal for state contracts and procurement1 – 6% Procurement from minority owned businesses 2017 Results Washington goal for state contracts and procurement – 10% Procurement from minority and women owned businesses Enhabit/Clean Energy Works Oregon2 High Roads Standards and Benefits (January 11, 2012)3 – 20% of dollars to businesses owned by historically underrepresented or underutilized people
1 https://results.wa.gov/measuring-progress/archived-outcome-measures/goal-2-prosperous-economy-goal-map 2Clean Energy Works was launched in 2009 as a City of Portland pilot program funded by the U.S. Department of Energy through the American Recovery and Reinvestment Act. https://enhabit.org/programs/clean-energy-works/ 3 Enhabit/Clean Energy Works Oregon3 High Roads Standards and Benefits (January 11, 2012). https://enhabit.org/wp-content/uploads/2012/03/CEWO_HRS_1_12.pdf
Clean Energy Labor Standards Certification – Benchmarks for definitions and criteria October 30, 2019
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Clean Energy Labor Standards Certification – Benchmarks for definitions and criteria October 30, 2019
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Procurement from and contracts with veteran-owned businesses
Definitions
State Certification
Certified by Washington State Department of Veteran Affairs (WSDVA)
Certification types: o Veteran-Owned Business
Qualification o Business:
Must be a Washington State enterprise Must be at least 51% owned by a veteran who also
controls the managerial and day-to-day operations. o Owner:
Honorable Veteran Status; or An active or reserve member in any branch of the armed
forces of the US.
Federal certification
Certified by the US Department of Veterans Affairs (VA) Vets First Verification Program
Certification types: o SDVOSB – Service-Disabled Veteran-Owned Small Business o VOSB – Veteran-Owned Small Business
Qualification o Business:
Must be at least 51% owned by a veteran who also controls the managerial and day-to-day operations.
o Owners: Honorable Veteran Status.
Benchmarks - criteria
Washington State Executive Order 13-01, Agency Procurement from Veteran Owned Businesses Goal = 5% of all procurement contracts 2017 Results Washington goal for state contracts and procurement = 5%
Clean Energy Labor Standards Certification – Benchmarks for definitions and criteria October 30, 2019
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Procurement from and contracts with businesses that utilize apprentices
Definitions
Limited to approved WA state apprenticeship programs
Benchmarks - criteria
Energy conservation and renewable energy targets for utilities (RCW 19.285.030 and WAC 296-05-207) = 15% of all labor performed by apprentices Certain public works (RCW 39.04.320) = 15% all labor performed by apprentices
Clean Energy Labor Standards Certification – Benchmarks for definitions and criteria October 30, 2019
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Preferred Entry for Local Workers
Definitions
Enhabit/Clean Energy Works Oregon High Roads Standards and Benefits (January 11, 2012) - “Local” is to be defined as within a 50-mile radius of the project, unless otherwise defined by the local community.
San Francisco Local Hiring Ordinance4 – A local resident is defined as an individual who is domiciled within the City and County of San Francisco at least 7 days prior to commencing work on the project. An individual may have only one domicile, which is their principal residence and where they intend to return when they are absent Question: how to define for rural areas?
Benchmarks - criteria
Enhabit/Clean Energy Works Oregon High Roads Standards and Benefits (January 11, 2012) = At least 80% of workers San Francisco Local Hiring Ordinance = current requirement is 30% of all project hours within each trade local residents and at least 50% of the project work hours performed by apprentices within each trade shall be performed by local residents. Other local ordinances = 50% local residents to 20% local residents
4Chapter 6.22(g) of the San Francisco Administrative Code https://oewd.org/modules/showdocument.aspx?documentid=125
Clean Energy Labor Standards Certification – Benchmarks for definitions and criteria October 30, 2019
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History of Compliance with Wage and Hour Laws
Definitions
Wage and hour laws - laws that govern wage rates and hours worked Final order - Final administrative order at state or federal level; Final civil judgement
Benchmarks - criteria
E2SSB 5116 solar projects generating up to 100 kW = No findings of violations of federal or state wage and hour laws and regulations in the past 24 months
Question: When does the 24 month period start – at bid/award date for each contract?
Clean Energy Labor Standards Certification – Benchmarks for Good Faith Efforts October 30, 2019
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Procurement from and contracts with women and minority owned businesses
Benchmarks – Good Faith Efforts
E2SSB 5116 - Good faith efforts: Show lack of availability of qualified businesses. Efforts to include:
– Proactive outreach to firms that are women, minority, and veteran-owned businesses; – Advertising in local community publications and publications appropriate to identified firms; – Participating in community job fairs, conferences, and trade shows; – Other measures?
USDOT 49 CFR § 26.53 (Guidance - 49 CFR Appendix A to Part 26)
Soliciting through all reasonable and available means (e.g. attendance at pre-bid meetings, advertising and/or written notices) the interest of all
certified DBEs who have the capability to perform the work of the contract. The bidder must solicit this interest within sufficient time to allow
the DBEs to respond to the solicitation. The bidder must determine with certainty if the DBEs are interested by taking appropriate steps to
follow up initial solicitations.
Selecting portions of the work to be performed by DBEs in order to increase the likelihood that the DBE goals will be achieved. This includes,
where appropriate, breaking out contract work items into economically feasible units to facilitate DBE participation, even when the prime
contractor might otherwise prefer to perform these work items with its own forces.
Providing interested DBEs with adequate information about the plans, specifications, and requirements of the contract in a timely manner to
assist them in responding to a solicitation.
Negotiating in good faith with interested DBEs. It is the bidder's responsibility to make a portion of the work available to DBE subcontractors
and suppliers and to select those portions of the work or material needs consistent with the available DBE subcontractors and suppliers, so as to
facilitate DBE participation. Evidence of such negotiation includes the names, addresses, and telephone numbers of DBEs that were considered;
a description of the information provided regarding the plans and specifications for the work selected for subcontracting; and evidence as to why
additional agreements could not be reached for DBEs to perform the work.
o (2) A bidder using good business judgment would consider a number of factors in negotiating with subcontractors, including DBE
subcontractors, and would take a firm's price and capabilities as well as contract goals into consideration. However, the fact that there
may be some additional costs involved in finding and using DBEs is not in itself sufficient reason for a bidder's failure to meet the
contract DBE goal, as long as such costs are reasonable. Also, the ability or desire of a prime contractor to perform the work of a
Clean Energy Labor Standards Certification – Benchmarks for Good Faith Efforts October 30, 2019
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contract with its own organization does not relieve the bidder of the responsibility to make good faith efforts. Prime contractors are not,
however, required to accept higher quotes from DBEs if the price difference is excessive or unreasonable.
Not rejecting DBEs as being unqualified without sound reasons based on a thorough investigation of their capabilities. The contractor's standing
within its industry, membership in specific groups, organizations, or associations and political or social affiliations (for example union vs. non-
union employee status) are not legitimate causes for the rejection or non-solicitation of bids in the contractor's efforts to meet the project goal.
Making efforts to assist interested DBEs in obtaining bonding, lines of credit, or insurance as required by the recipient or contractor.
Making efforts to assist interested DBEs in obtaining necessary equipment, supplies, materials, or related assistance or services.
EPA’s DBE Six Good Faith Efforts1
1. Ensure DBEs are made aware of contracting opportunities to the fullest extent practicable through outreach and recruitment activities. For Indian
Tribal, State, and Local Government recipients, this will include placing DBEs on solicitation lists and soliciting them whenever they are potential
sources.
2. Make information on forthcoming opportunities available to DBEs, arrange time frames for contracts, and establish delivery schedules, where the
requirements permit, in a way that encourages and facilitates participation by DBEs in the competitive process. This includes, whenever possible,
posting solicitations for bids or proposals for a minimum of 30 calendar days before the bid or proposal closing date.
3. Consider in the contracting process whether firms competing for large contracts could subcontract with DBEs. For Indian Tribal, State, and Local
Government recipients, this will include dividing total requirements when economically feasible into smaller tasks or quantities to permit maximum
participation by DBEs in the competitive process.
4. Encourage contracting with a consortium of DBEs when a contract is too large for one of these firms to handle individually.
5. Use the services and assistance of the SBA and the Minority Business Development Agency of the Department of Commerce.
6. If the prime contractor awards subcontracts, require the prime contractor to take the steps in items 1 through 5.
Examples of documentation for the Six Good Faith Efforts:
Use of current bidders/solicitation list or databases that includes DBEs;
Use of trade journals/databases (local or national);
Date of last update to bidders/solicitation list or database;
1 https://www.epa.gov/grants/frequently-asked-questions-disadvantaged-business-enterprises
Clean Energy Labor Standards Certification – Benchmarks for Good Faith Efforts October 30, 2019
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How were DBEs made aware of the solicitation;
Where and when posted;
Sample of letters or records of communication with DBEs, SBA, Minority Business Development Agency;
Sample of advertisement/posting;
How long/frequency of advertisement/posting;
Document good faith efforts of contractors;
Identify type of outreach that was conducted;
Date of pre-bid conference;
Attendance list for pre-bid conference;
Participation date of last DBE procurement outreach conference;
Process used to determine if large requirement could be divided into smaller requirements,
Include unsuccessful bidders on database or list
Clean Energy Labor Standards Certification – Benchmarks for Good Faith Efforts October 30, 2019
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Procurement from and contracts with businesses that utilize apprentices
Benchmarks – good faith efforts
WSDOT Good Faith Effort 2 (What should the good faith effort turned in looked like?) Your Good Faith Effort (GFE) will need to describe in detail the efforts you made to utilize apprentices and will need to address one or more of the areas listed in the Apprentice Utilization specification for acceptable GFE topics. This documentation is necessary to demonstrate that you met the requirement through good faith. Submit GFEs to the Project Engineer in letter format by uploading it into the electronic Apprentice Utilization Reporting system. GFE letters shall include and address the following:
Contract No., title and the apprentice utilization requirements,
The amount of apprentice labor hours the contract did attain expressed as a percentage of labor hours,
Reason(s) for not obtaining apprentice labor hours, and depending on what good faith effort topic used and will need to address some or all of the following:
Names of any State-Approved Apprentice Training Programs contacted and provide the name of person(s) contacted and dates of contacts,
Reference contract specifications or documents that affected your ability to attain apprentice utilization,
Discuss efforts taken to require Subcontractors to solicit and employ apprentices,
Provide backup documentation to the letter. Backup documents to the letter can consist of the following:
Letters, emails, phone logs including names, dates and outcomes, posters, photos, payroll, time cards, schedules, copies or references to other contract specifications or documents such as Tribal Employment Rights Office (TERO), Disadvantaged Business Enterprise or Special Training.
2 https://www.wsdot.wa.gov/Business/Construction/ApprenticeshipProgram.htm
