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MKD Electric Opposes Illinois SB 1407


As active merit shop members of the Illinois construction industry, MKD Electric strongly opposes Illinois Senate Bill 1407, which will essentially have the effect of requiring all construction and maintenance work at privately owned petroleum refineries and petrochemical facilities within the state to be exclusively performed by members of certain trade unions.

We are urging opposition to SB 1407 (Sen. Mike Hastings). The legislation targets certain privately-owned petroleum refineries and petrochemical facilities, with the unfair precedent that within the state they will be required to pay government-mandated prevailing wages on construction work done on their own facilities. It also will have the effect of requiring all construction and maintenance work to be exclusively performed by members of certain trade unions. SB 1407 mandates these privately-owned businesses to have a certain percentage of all workers to have successfully completed apprenticeship training even if they live out of state.  It further requires undefined, advanced safety training regulated by the State.

The refining and petrochemical industry is highly specialized and is continually learning new safety techniques and experiences. The Illinois EPA and or community colleges currently have no curriculum or experience whatsoever in this type of specialized training. The facilities targeted by the legislation and contractors working at these facilities share those best practices in real time, far more efficiently and effectively than any program run by the government. There is no data or examples indicating a lack of training or safety being performed. Typically, a worker that SB 1407 seeks to cover already receives about 40 hours per year of safety training. This is a legislative solution in search of a problem that doesn’t exist.

Contractors and facility owners take training & safety seriously and for multiple decades require their employees and contractors working in their facilities to participate in advanced safety training and rigorous safety programs. All contractors regardless of union affiliation are held to the highest of standards for both training, implementation, accountability, and record keeping. A contractor’s safety record and safety program is the first priority and most important factor when the industry evaluates the contractors to do the work. The safety record of the plants and contractors in Illinois is the envy of the industry. According to the Three Rivers Manufacturing Association (TRMA), contractors worked more than six million hours in 2017 at TRMA member companies and recorded an OSHA incidence rate of 0.31. The 2016 US Chemical Manufacturing rate was 2.0.

SB 1407 requires the use of the “prevailing wage rate” for private work. This is a monumental change that sets a dangerous precedent as there is no state or local government nexus of financial support to the work being performed. It creates an artificial wage rate that eliminates competitive market forces for private companies affected by this legislation. Adding to Illinois’ reputation as a high-cost state to do business in. Also, this mandate would be counter to what other Midwestern states are doing regarding prevailing wage laws. In recent years, both Michigan and Indiana have repealed their prevailing wage laws not expanded them.

Relative to other parts of the country (Louisiana, Texas), Illinois has a handful of petrochemical facilities and this highly specialized work is typically limited in time and scope. Consequently, the pool of trained, Illinois workers is very limited. Facility owners are using contractors that specialize in the type of services required and who are performing such services at their operations across the country.

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