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OCR Page 1 of 14SENT BY:OFFICE OF SECRETARY
12-10-98
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39PM
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DOL-
202 456 2464 2/ 5
DRAFT 12/10/1998
Application of Prevailing Wage Requirements to School Construction
Application of DBA to School Construction Funded by the Department of
Education
Title 20 of the U.S. Code - the title under which the education statutes are codified - -
contains a Davis-Bacon labor standards provision that applies the Davis-Bacon
prevailing wage provisions to any construction assisted under any "applicable
program" under Title 20. An "applicable program" is essentially one for which an
administrative head of an education agency has responsibility provided by law or a
delegation of authority (20 U.S.C. 1221(b)). Therefore, many federally-assisted
school construction programs are subject to this Davis-Bacon labor standards
provision.
In addition, Title XII of the Elementary and Secondary Education Act of 1965
(ESEA), as amended in 1994, authorizes the Secretary of Education to award grants
to local educational agencies to ensure the health and safety of students through the
repair, renovation, alteration and construction of a public elementary or secondary
school, libraries, media centers, or facilities used for academic or vocational
instruction. The statute contains a Davis-Bacon labor standards provision which
would require the payment of Davis-Bacon rates to any construction work assisted in
whole or in part by grants authorized by Title XII. According to the Department of
Education, this program has never been funded.
Last Year's Tax Proposal to Finance School Construction
In FY 1998, the Administration proposed a tax credit to pay interest on almost $22 billion
in bonds to build and renovate public schools. When the question of Davis-Bacon
coverage under this proposed program was examined, it was evaluated on the narrow
ground of whether the tax credit concept would by itself require Davis-Bacon coverage
without separate, explicit coverage language. At that time, the Department concurred
with the following statement regarding Davis-Bacon coverage:
"The Davis-Bacon prevailing wage requirements apply to construction projects in two
ways: either specific statutory language requires Davis-Bacon prevailing wages, or
the Federal government is a direct party to a construction contract. Given that the
bond initiative would offer a tax incentive to schools (as opposed to a direct grant,
loan, or loan guarantee). and that the Federal government would not be a party to a
construction contract, the Administration has concluded that the Davis-Bacon Act
would not apply."
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