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OLR Bill Analysis
sHB 6851 (as amended by House "A")*
AN ACT IMPLEMENTING RECOMMENDATIONS OF THE
HYDROGEN TASK FORCE.
SUMMARY
This bill requires the Department of Energy and Environmental
Protection (DEEP) to develop and approve a hydrogen strategic plan,
extends certain wage and workforce requirements to hydrogen projects,
and requires DEEP to seek federal funding opportunities for projects
that advance hydrogen in the state.
Existing law requires renewable energy project developers to meet
certain wage and workforce requirements if their project meets certain
criteria (“covered projects”). Beginning January 1, 2025, the bill extends
these requirements to also apply to hydrogen projects, which are
projects producing, processing, transporting, storing, or using
hydrogen.
The bill requires the DEEP commissioner to seek opportunities for
federal funding for projects or activities that advance hydrogen in the
state. She must do this in consultation with the governor, the Office of
Policy and Management secretary, and the Department of Economic
and Community Development (DECD) commissioner. The bill requires
the DECD commissioner to identify the state’s share of projects or
activities needed to meet federal matching requirements.
*House Amendment “A” removes provisions in the underlying bill
(1) referencing “clean” hydrogen and requiring DEEP to adopt
regulations defining it and (2) authorizing the DECD commissioner to
transfer funds to DEEP for the state’s share of federally funded
hydrogen projects.
EFFECTIVE DATE: July 1, 2023, except a provision requiring DEEP 2023HB-06851-R01-BA.DOCX
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to seek federal funding is effective upon passage.
HYDROGEN STRATEGIC P LAN
The bill requires DEEP to develop and approve a hydrogen strategic
plan by December 31, 2024. The plan must recommend policies,
programs, and regulations to grow the state’s hydrogen economy. These
recommendations must be consistent with the:
1. state’s greenhouse gas reduction goals;
2. approved Integrated Resource Plan, which is a plan DEEP
develops every two years, in consultation with Eversource and
United Illuminating, by reviewing the state’s energy capacity and
needs and developing a plan to procure various energy resources
(CGS § 16-3a); and
3. Comprehensive Energy Strategy, which DEEP prepares every
four years to guide the state’s energy policy, among other things
(CGS § 16a-3d).
The bill additionally requires the hydrogen strategic plan to
encourage using hydrogen produced from renewable energy and
prioritize applications for this hydrogen to aviation, maritime shipping,
ferry transportation, heavy-duty trucking, and high-temperature
industrial processes. The plan must also describe the current and
projected cost differences between using hydrogen produced from
renewable energy to power these sectors and processes and using fossil
fuels to do it.
COVERED PROJECT REQU IREMENTS
Under the bill, hydrogen projects are “covered projects” subject to
labor and workforce requirements under CGS § 31-53d. Among other
things, these provisions require project developers to establish a
workforce development program, which is a program that gives newly
hired and existing employees the opportunity to develop skills that will
enable them to qualify for higher paying jobs on a covered project (e.g.,
apprenticeship programs). 2023HB-06851-R01-BA.DOCX
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Contractors and subcontractors on a covered project must pay each
construction employee on the project at least the wages and benefits that
the state’s prevailing wage law requires for the employee’s
corresponding job classification on a public works project. It subjects the
contractors and subcontractors to the prevailing wage law’s reporting
and compliance requirements and its penalties and sanctions for
violations (see BACKGROUND). Construction projects covered by a
project labor agreement (PLA) are exempt from this requirement if the
PLA meets certain other criteria.
Each operations, maintenance, and security employee employed in a
building or facility built in a covered project must be paid at least the
prevailing wage or the “standard wage” (see BACKGROUND),
including benefits for the employee’s corresponding job classification.
Developers must also submit sworn certifications to the labor
commissioner from each contractor and subcontractor that it meets
certain conditions, including, among other things, that it:
1. will not pay personnel employed on the project less than the
applicable wage and fringe benefit rates for the appropriate
classification,
2. will not misclassify employees as independent contractors, and
3. participates in apprenticeship training through certain state or
federal apprenticeship programs.
Contractors and subcontractors are subject to debarment under the
state’s debarment law if a certification contains false, misleading, or
materially inaccurate information. Developers who fail to take
reasonable steps to ensure certifications are accurate and truthful are
subject to other noncompliance penalties set in regulations.
For covered projects with a nameplate capacity of at least five
megawatts, covered project developers must take all reasonable actions
to ensure that a community benefits agreement is entered into with the
appropriate community organizations representing community 2023HB-06851-R01-BA.DOCX
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residents where the project will be located. (A nameplate capacity is
generally a measurement of an electricity generation or storage project’s
size. Certain hydrogen projects may not have nameplate capacities;
presumably, these projects would not be subject to this provision.) A
community benefits agreement details the project’s contribution to the
community and aspects that will mitigate the community’s adverse
conditions and create opportunities for local business, communities,
and workers.
BACKGROUND
Prevailing Wage
The state’s prevailing wage law requires employers on certain public
works projects to pay their construction workers wages and benefits
equal to those that are customary or prevailing for the same work, in the
same occupation, in the same town. The requirement applies to new
construction projects of $1 million or more and renovation projects of
$100,000 or more (CGS § 31-53).
Standard Wage
The state’s standard wage law generally requires private contractors
who do building and property maintenance, property management, or
food service work at state buildings to pay their employees wages and
benefits determined by the labor commissioner. In general, an
employee’s standard wage equals the hourly wage and benefits
received by the most employees doing the same type of work under a
union contract, as long as the contract covers at least 500 employees in
Hartford County. If there is no such contract, then the commissioner sets
the hourly rate based on the Federal Register of Wage Determinations,
plus a 30% surcharge for health and retirement benefits (CGS § 31-57f).
COMMITTEE ACTION
Energy and Technology Committee
Joint Favorable Substitute
Yea 20 Nay 0 (03/14/2023)