all persons employed on said project have been paid the full weekly wages earned, that no rebates have been or will be made either directly or indirectly to or on behalf of said day of from the full (Contractor or subcontractor) weekly wages earned by any person and that no deductions have been made either directly or Indirectly from the full wages earned by any person, other than permissible deductions as defined in Regulations, Part 3 (29 CFR Subtitle A), issued by the Secretary of Labor under the Copeland Act, as amended (48 Stat 948,63 Stat. 108, 72 Stat 967; 76 Stat 357; 40 U.S.C. 276c), and described below: in the contract have been or will be made to appropriate programs for the benefit of such employees, except as noted in Section 4(c) below. (b) WHERE FRINGE BENEFITS ARE PAID IN CAS}] -Each laborer or mechanic listed in the above referenced payroll has been paid, as indicated on the payroll, an amount not less than the sum of the applicable basic hourly wage rate plus the amount of the required fringe benefits as listed in the contract, except as noted in Section 4(c) below. (2) That any payrolls otherwise under this contract required to be submitted for the above period are correct and complete, that the wage rates for laborers or mechanics contained therein are not less than the applicable wage rates contained in any wage determination incorporated into the contract; that the classifications set forth therein for each laborer or mechanic conform with the work he performed. (3) That any apprentices employed in the above period are duly registered in a bona fide apprenticeship program registered with a State apprenticeship agency recognized by the Bureau of Apprenticeship and Training, United States Department of Labor, or if no such recognized agency exists in a State, are registered with the Bureau of Apprenticeship and Training, United States Department of Labor. (4) That: (a) WHERE FRINGE BENEFITS ARE PAID TO APPROVED PLANS, FUNDS, OR PROGRAMS In addition to the basic hourly wage rates paid to each laborer or mechanic listed in the above referenced payroll, payments of fringe benefits as listed SPO THE WILFUL FALSIFICATION OF ANY OF THE ABOVE STATEMENTS MAY SUBJECT THE CONTRACTOR e48-16-$1117-1 417-100 Senator TOWER. Our next witness is Mr. Frank Bonadio, president of the Building and Construction Trades Department of the AFLCIO. We have your statement here, and it will be printed in full in the record. You can either read it in its entirety, or you can summarize it. You may proceed in any way you like. STATEMENT OF FRANK BONADIO, PRESIDENT, BUILDING AND CONSTRUCTION TRADES DEPARTMENT, AFL-CIO, ACCOMPANIED BY THOMAS X. DUNN, WALTER MASON, AND ROBERT BARTON Mr. BONADIO. Thank you. My name is Frank Bonadio, president of the Building and Construction Trades Department. Accompanying me are, to my left, Thomas X. Dunn, one of our general counsels, who specializes in Davis-Bacon predetermination wage rates; Walter Mason, our legislative representative; and Mr. Robert Barton, who is an associate of Mr. Dunn. We have a prepared statement, a rather lengthy statement, but out of respect for your time, and with your permission, I will submit it for the record and give a brief summary of our opposition to the two bills now being considered by your committee. Senator TOWER. Your statement will be printed in its entirety. We don't want to gag anybody. So, you can proceed at any length that you want to. Mr. BONADIO. We hope that the committee members will find time. to read the statement. It clarifies many erroneous allegations that we do not support (see p. 216). Mr. Chairman and members of the committee, thank you again for allowing me to appear before you to present the views of the Building and Construction Trades Department of the AFL-CIO, on behalf of its 17 affiliated international unions and their more than 3 million members, in regard to S. 3373 and S. 3654. I would like to first address myself to S. 3373, introduced by Senator Brock. Quite frankly, the Building and Construction Trades Department believes that this legislation is bad for the workingman, bad for the homeowner, and bad for our local communities throughout the Nation. This bill is founded upon the completely erroneous assumption that soaring labor costs are the main reason for high and ever-rising housing costs. In actual fact, labor costs, as a percentage of the cost of a house, have actually decreased during the last decade. According to statistics based on a survey by the Bureau of Labor Statistics, onsite labor has declined from 33 percent of the cost of a home in 1949 to 18 percent in 1969, while land and finance charges have doubled over the same period of time. An increase in finance charges can have a significant effect on the cost of a home. On a $20,000, 20-year FHA mortgage, a 1-percent increase in the mortgage rate will increase the average monthly payment of principal and interest by about 10 percent over the life of the mortgage. By contrast, a 20-percent increase in labor costs would only have a corresponding 4-percent increase in the monthly occupancy cost to the homeowner. Thus, at the same time that labor costs, reflected on a per centage basis, have been decreasing, housing costs have been rising due to soaring interest rates and land costs, problems which this bill makes no attempt to solve. As for the charge that the construction industry craft unions have obstructed progress and contributed to high costs by restrictive prac tices, the truth is that by means of the Tri-Trades Agreements and other voluntary pacts, the craft unions have cooperated with industry in promoting greater efficiency while at the same time maintaining high standards of quality and efficiency. Old stereotypes are hard to change, and I suppose that includes the stereotype of union resistance to progress and technology. In fact, unions are generally far less resistant to change than other groups in our society. In this respect, a report prepared by the Purdue Research Foundation for the Manpower Administration of the U.S. Department of Labor indicated that, in measuring resistance by various groups to introduction of new materials, parts and equipment in construction, architects and engineers had the greatest resistance to change, and labor unions showed very little resistance. Mr. Chairman, it is obvious that this bill will not solve the problem of rising housing costs because it is aimed at the wrong target-labor costs rather than the real culprits-interest rates and land costs. Not only will this legislation fail to achieve its purported goal, but it could completely disrupt the housing market by encouraging interference with the local building codes and collective bargaining agreements. First, I would like to consider the text of the bill itself. One of the most unfortunate aspects of the bill is the vagueness of the language and the absence of any standards guiding those charged with enforcing it. The bill makes unlawful any contractual or building code provision that interferes with or restricts the use of new or improved techniques, methods or materials in connection with any development, construction, rehabilitation, or maintenance activity assisted under any program administered by the Secretary of Housing and Urban Development unless the provision is determined to be necessary to assure safe and healthful working or living conditions. The legislation further provides that regardless of the amount of money involved, any person aggrieved by a building code or collective bargaining provision, can sue in Federal or State court to have the provision declared unlawful. This bill thus encourages the institution of lawsuits for the purpose of harrassment by those who have little or no financial interest in the outcome of the litigation. Moreover, the language of the bill is vague and it fails to specify any criteria by which to determine what constitutes new or improved techniques, methods or materials, nor does it specify any standards by which to decide that a building code or contract is restricting their use. It gives complete authority for the interpretation and enforcement of these provisions to our already overburdened courts who do not have the expertise to deal with the highly complex questions of work practices and techniques in the housing industry. Although it purports to be a housing bill, S. 3373 is a backhanded attempt to amend the Taft-Hartley Act and change the tenor of American labor relations as it has evolved over the last half century. Ever since the National Labor Relations Act was passed, the entire thrust of Federal labor legislation has been to allow the parties to negotiate their working relationship by collective bargaining and to incorporate the results in a binding contract. S. 3373 empowers and encourages third parties to attack these collective bargaining agreements in court. Not only does this bill threaten the stability of collective bargaining agreements in the housing industry, it also interferes with a municipality's control of its own building code by delegating authority for building standards to HUD and certain private industry standards organizations. The legislation in effect establishes a presumption that any technique, method, material or product that conforms to standards adopted by a nationally recognized standard setting or testing organization approved by the Secretary of Housing and Urban Development is permissible. The practical effect of these provisions will be to require local authorities to adopt certain provisions of these private codes in order to maintain their eligibility for the federally assisted projects that are so vital to our cities today. HUD has already forced many communities, under questionable authority, to adopt provisions of the national codes as precondition to receiving Federal financial assistance for housing projects. If this legislation passes, it will empower HUD to totally override the local building codes which have higher standards of safety and quality than the national codes which HUD has been trying to force municipalities to adopt. Incidentally, these industry standard setting organizations are currently being investigated by a task force on industry self-regulation of the Federal Trade Commission. I would respectfully submit that until the investigation is completed, a bill sanctioning use of the private codes would be premature. I would also suggest that if the achievement of some national building code standards is considered desirable, it is worthy of note that the Senate has already passed such legislation. The Housing and Urban Development Act of 1972, S. 3248, has a provision for the establishment of a National Institute of Building Sciences. This institute is designed to achieve the voluntary cooperation of the groups needed to achieve better housing production in the United States. In our view, the plan for a national institute to develop national standards and promote their voluntary acceptance is far more desirable than the coercive scheme envisaged by the Brock bill. The use of a national institute will avoid any usurpation of local building codes, and will avoid any abdication to the self-serving private standard setting organizations. In sum, S. 3373 has several serious defects. It fails to specify what is meant by the terms "new or improved techniques, methods or materials." It allows anyone, no matter how munite his financial interest, to challenge in court the validity of local building codes and collective bargaining agreements. It delegates to the courts the power to decide what constitutes new and improved building techniques, methods and |