ASSOCIATED BLDRS. AND CONTR. v. Ventura

• Decision Date: 31 March 2000
• Docket Number: No. C8-98-1383, No. C4-98-1428., No. C1-98-1385
• Citation: 610 N.W.2d 293
• Parties: ASSOCIATED BUILDERS AND CONTRACTORS, et al., Respondents, v. The Honorable Jesse VENTURA, et al., petitioners, Appellants, Defendants, Granite City Electric, Inc., et al., International Brotherhood of Electrical Workers, Local 292, petitioners, Appellants, Intervenors.
• Court: Minnesota Supreme Court

610 N.W.2d 293

ASSOCIATED BUILDERS AND CONTRACTORS, et al., Respondents, v. The Honorable Jesse VENTURA, et al., petitioners, Appellants, Defendants, Granite City Electric, Inc., et al., International Brotherhood of Electrical Workers, Local 292, petitioners, Appellants, Intervenors.

Nos. C8-98-1383, C1-98-1385, C4-98-1428.

Supreme Court of Minnesota.

March 31, 2000.

Felhaber, Larson, Fenlon & Vogt, Paul J. Zech, Minneapolis, Miller, O'Brien, Bloom, Richard A. Miller, Brendan D. Cummins, Minneapolis, Mike Hatch, Attorney General, Kenneth E. Raschke, Jr., Assistant Attorney General, St. Paul, for Appellants.

Burk & Seaton, Douglas P. Seaton, Robin N. Kelleher, Edina, for Respondents.

Knutson, Flynn, Deans & Olsen, P.A., Joseph E. Flynn, St. Paul, for Amicus Curiae Minnesota School Boards Association.

Hammargern & Meyer, P.A., David D. Hammargren, Edina, for Amicus Curiae Minnesota State Senators.

Moss & Barnett, P.A., Vincent J. Fahnlander, Minneapolis, for Amicus Curiae Employer's Association, Inc.

Heard, considered and decided by the court en banc.

OPINION

STRINGER, Justice.

An amendment to the prevailing wage law providing that prevailing wages must be paid in all construction or remodeling projects of educational facilities exceeding $100,000 was enacted as part of a 1997 omnibus tax bill relating to tax relief and reform. Respondents Associated Builders and Contractors (Associated Builders), Independent School District No. 882 (ISD 882) and Wright Electric, Inc. (Wright Electric) challenge the constitutionality of the amendment claiming it violates the Single Subject and Title Clause of the Minnesota Constitution, Article IV, Section 17, which states "No law shall embrace more than one subject, which shall be expressed in its title."¹ The district court granted respondents' motion for summary judgment ruling that the amendment violates both clauses of Section 17. The court of appeals affirmed, holding that the prevailing wage amendment was "not remotely related [to the bill's subject of] tax reform and relief," and that the title provision was violated because the title made no reference to topics such as "prevailing wage," "school districts" or "labor." Associated Builders and Contractors v. Carlson, 590 N.W.2d 130, 136 (Minn.App.1999). The court of appeals then severed the amendment pursuant to Minn.Stat. § 645.20 (1998) permitting severance of an unconstitutional provision where it is unconnected to the remaining provisions of the law. See Associated Builders and Contractors, 590 N.W.2d. at 137. We affirm the court of appeals.

The appropriate context for our analysis begins with a brief history of the prevailing wage law and passage of the challenged amendment.² The prevailing wage law-a law requiring the payment of wages on projects financed with state funds to be comparable to wages paid for similar work in the community as a whole-was first introduced as House File 134 on January 11, 1973 and was the subject of hearings both in the House Labor-Management Relations Committee and Senate Committee on Labor and Commerce.³ It was passed by a house vote of 84-39, by the senate 56-0 and was enacted as chapter 724 on May 24, 1973.⁴ The purpose of the prevailing wage law is explained in the statute's preface:

It is in the public interest that public buildings and other public works be constructed and maintained by the best means and highest quality of labor reasonably available and that persons working on public works be compensated according to the real value of the services they perform. It is therefore the policy of this state that wages of laborers, workers, and mechanics on projects financed in whole or part by state funds should be comparable to wages paid for similar work in the community as a whole.

Minn.Stat. § 177.41 (1998). The statutory scheme requires that employees working on certain state funded construction projects be paid an hourly wage based on prevailing wages in the area. See id. A project is defined as the "erection, construction, remodeling, or repairing of a public building or other public work financed in whole or in part by state funds." Minn.Stat. § 177.42, subd. 2 (1998).

In 1995, in NewMech Cos., Inc. v. Independent Sch. Dist. No. 206, 540 N.W.2d 801, 803 (Minn.1995), we held that the prevailing wage statute language "financed in whole or part by state funds" did not include state aid payments to school districts through Debt Service Equalization Aid (DSEA) or Homestead and Agricultural Credit Aid (HACA) because those payments were intended to provide property relief to taxpayers, not to subsidize construction costs. NewMech thus narrowed the prevailing wage law by limiting its application to direct state funding only. Id. at 805.⁵

In response to our decision in NewMech, and with the stated purpose of overturning it, an amendment to the prevailing wage law's definition of "project" was introduced in the House of Representatives on March 13, 1997 and was referred to the House Committee on Labor-Management Relations.⁶ There was no companion bill in the senate. House File 1512, now codified at Minn.Stat. § 123B.71, subd. 2 (1998),⁷ was described by Representative Thomas Bakk as a "pretty simple little bill, four lines * * * [stating that] on school construction here in Minnesota, it [should be] public policy that any school construction over $100,000 in cost be covered by Minnesota's prevailing wage rate law."⁸ The bill amends the previous definition of "project" by including all educational facilities where the estimated cost of building exceeds $100,000:

Minnesota Statutes, 1996, section [123B.71, subd. 2], is amended by adding a subdivision to read:

Subd. 1A. PROJECT. The construction, remodeling, or improvement of a building or site of an educational facility at an estimated cost exceeding $100,000 is a project under section 177.42, subdivision 2.⁹

Notably the bill did not amend the prevailing wage law directly-instead, it amended Minn.Stat. § 123B.71, subd. 2, relating to "review and comment for school district construction" by adding a new definition of "project" under the prevailing wage law. Thus, only by cross reference could the amendment be tracked to its substantive effect.

During the committee meeting Tom Deans, legal counsel for the Minnesota School Board Association, offered this comment about the bill:

This bill makes all school district projects, that are projects for purposes of the prevailing wage law, all of them over $100,000, that means whether or not there is a dime of state money that comes in * * * this would require [those districts] to pay prevailing wages as well * * *.

* * * *

* * * So what you're doing is, you're taking those higher costs [from paying the prevailing wage rather than a lower wage] and you're passing them onto property tax payers for 20 to 30 years * * *.¹⁰

At the close of the committee meeting Representative Bakk moved that the bill be passed and referred to the Committee on Taxes.¹¹ There was little discussion of the prevailing wage amendment in the tax committee and the bill was incorporated into the Omnibus Tax Bill.¹²

Four days later, on the house floor, Representative Dee Long, Chair of the House Tax Committee, gave an overview of the Omnibus Tax Bill. She described the bill as one that "achieves both property tax relief and long-term reform and does it without raising any other taxes * * *."¹³ Representative Long characterized the article in which the prevailing wage amendment was included as making "a number of miscellaneous and minor changes in tax laws."¹⁴ Legislators questioned why a bill pertaining to prevailing wages should be incorporated in a tax bill, but an amendment to delete the provision from the tax bill was defeated by a vote of 50-81.¹⁵

There was no discussion on the prevailing wage amendment in the senate and, other than brief references to it during Tax Conference Committee meetings on May 13 and 16, 1997, there was no substantive discussion on the merits of the amendment or how it was related to tax relief and reform.¹⁶ The Omnibus Tax Bill passed both legislative houses on May 19, 1997 by a vote of 127 to 6 in the house and 66 to 0 in the senate¹⁷ and was signed into law by Governor Arne H. Carlson on June 2, 1997.¹⁸

The Omnibus Tax Act, as the bill become known upon passage, is a prodigious work of legislation covering 247 pages with 16 articles and is entitled "An act relating to the financing and operation of state and local government; * * *."¹⁹ The first 15 articles pertain to a variety of subjects including property tax reform, income taxes and property tax refunds, special taxes, regional development commissions, waste management taxes and tax increment financing. Article 16, entitled "Miscellaneous," contains 31 separate sections. The prevailing wage amendment appears as section 4 of article 16 and now appears in the statutory structure as Minn.Stat. § 123B.71, subd. 2. It is included in the statutory chapter covering school district powers and duties. See Minn.Stat. ch. 123B (1998).

The underlying facts of the controversy now before the court are not in dispute. In the fall of 1997 ISD 882 began preparation for bids for the construction of a new Monticello High School in Wright County to be financed by funds received by the sale of ISD 882 bonds-the parties agreed that no state funding was provided. The bids were originally scheduled to be submitted in October of 1997 but to comply with the prevailing wage amendment, ISD 882 delayed the bid deadline until December, 1997. It then requested that contractors submit two bids, one based on the prevailing wage amendment and one without consideration of the prevailing wage amendment. The low bidder for the electrical subcontracting work was respondent Wright Electric at $2,217,187.00 on its bid submitted without consideration of the prevailing wage amendment. Appellant Granite City Electric was the low bidder for the electrical...