CAPITOL CAROUSEL

March 14, 2008
Despite being scheduled to adjourn on Saturday, March 8th, the General Assembly remained in session until Thursday, March 13th due to difficulties in agreeing to a new two year budget. The budget and a capital project bond initiative were two of the biggest issues remaining to be handled by the General Assembly during this extended session. While a final budget was agreed to last night, the bond initiative will be taken up during a special session, scheduled for April 23rd. This year marks the fourth time in five years where the General Assembly has had to extend its session in order to reach agreement on budget issues.

Another issue that garnered the attention of legislators at this late date was transportation funding. In response to the Virginia Supreme Court’s decision earlier this month declaring a large part of the regional transportation funding package from last year unconstitutional, legislators are scrambling to either “fix” the plan or find new revenues elsewhere. Although the House wanted to amend last year’s plan during this session in order to fix its constitutional flaws immediately, the Senate and Governor are more inclined to have legislators come back to Richmond for another special session later in the year. At this time, it appears a special session for transportation will also take place in April. At the root of this issue is the House’s position that the Virginia Supreme Court found fault with how the funding plan was implemented and not with the funding streams of the plan. However, the Senate and Governor seem more interested in taking a different approach to generating new revenues for transportation.

While a more detailed report will follow next week, we did want to give a quick update on some of the major issues of importance to AGC.

As you are aware, the topic of employment and illegal immigration was a big one during this year’s session. AGC was able to defeat all bills that sought to place unreasonable additional burdens on employers who act in good faith in their hiring practices. Ultimately, the House and Senate passed two bills each that pertain to employment of illegal workers. Both bills are extremely narrow in scope and essentially require Virginia employers to comply with Federal immigration law. This approach helps to assure that an employer who acts in good faith to comply with the law will not be unjustly penalized for minor accidents or mistakes.

Also of note was the defeat of the Homestead Exemption constitutional amendment. As drafted, the bill amended the Virginia Constitution to grant the General Assembly the authority to allow localities to exempt from taxation up to 20 percent of a primary residential property’s value. Business groups, including AGC, opposed the measure out of concern that localities would increase their tax rates, thereby increasing taxes on commercial property, in order to make up for lost revenues from the exemption. The bill passed the House on a strong vote, but was defeated in the Senate when it was referred, by a very narrow margin, from the floor back to committee for further study. Given the closeness of the vote, this issue is likely to return in future years.

With the belated end to session, we will provide to you a more detailed legislative round up at the end of next week.

CAPITOL CAROUSEL

February 29, 2008
The General Assembly is scheduled to adjourn on March 8. As expected, it appears that the session may need to be extended due to budget difficulties between the Democratic controlled Senate and the Republican controlled House.

That issue aside, the session has generally been a reasonably positive one for the business community – please see the plusses and minuses below.

PLUSSES

The Homestead Exemption proposal appears to be dead. In case you are not aware of this issue, proponents were seeking a constitutional amendment to allow localities to reduce property taxes for homesteads and family farms. While this sounds good, the business community was extremely concerned that the localities would then need to make up this funding shortfall elsewhere, most likely with increased taxes on commercial properties.

The politics of this proposal were quite interesting. First off, both houses of the General Assembly passed it last year. But since it was a constitutional amendment, it had to be approved in two consecu- tive sessions by the General Assembly.

In the House, it was approved overwhelmingly again this year with both Democratic and Republican sup- port.

But the Senate dealt it a fatal vote following intense lobbying by the business community. The vote basi- cally followed party lines with the Democrats sup- porting and the Republicans opposing. Since the Senate has a Democratic majority it was only def- eated because two prominent Democrats, Charles Colgan and Phillip Puckett, joined with the Republi- cans in opposing it. Both Senators Colgan and Puckett are to be commended for their courageous votes.

Several proposals are advancing creating greater emphasis on technical education at the high school level.

A proposal which would have greatly weakened payment protection on public projects by allowing alternate forms of security was defeated.

Proposals that would have required employers to offer telecommuting to most employees, or to require employee time off for school activities, were defeated.

Numerous proposals which would have been extremely onerous on employers relating to immigration were defeated. As detailed in the last newsletter, the proposals advancing are basically requiring employers to comply with existing Federal immigration law.

A proposal to require the Department of General Services to insure that at least 15% of state procurement contracts are awarded to small, woman owned and minority firms located in HUB (Historically Underutilized Business) zones was defeated.

MINUSES

The General Assembly is continuing to neglect the Commonwealth’s transportation infrastructure. Despite immense, documented needs, a modest funding bill was defeated in the House, and, while the budget isn’t final yet, there have been some efforts to “borrow” transportation funds for other purposes.

Both the cities of Lynchburg and Richmond have major funding issues for required treatment facilities to meet combined sewer overflow requirements. A proposal was introduced to help both localities….at press time it appears that no action will be taken.

A proposal that would allow labor unions to be involved in workers comp disputes for construction contractors who hire union labor is still alive. Democrats in the Senate have strongly supported this proposal. In the House, it appears that it will be defeated on a straight party line vote with the Republicans opposing and the Democrats supporting.

Our proposal to clarify which employees can legally work on school projects when children may be present was in essence killed in the House after passing the Senate with a 99-0 vote.

CAPITOL CAROUSEL

February 18, 2008
“Crossover”, the midpoint of the Virginia General Assembly Session, occurred last week. AGC’s Legislative Counsel,

To date, the association has done very well this session.

Immigration
With all bills having to move from one house to the other last week, the field of immigration bills left to be considered was thinned considerably. We have defeated approximately 25 bills dealing with immigration that would have very negatively impacted AGC members.

In terms of bills affecting employers, there are 5 bills and one joint resolution being considered for passage. One set of bills, HB926 and SB782, allows the State Corporation Commission to terminate a business entity’s existence for a period of at least one year if the entity is convicted of a violation of 8 U.S.C. § 1324a(f), as amended, for actions of its officers and directors constituting a pattern or practice of employing unauthorized aliens in the Commonwealth.

A conviction for a pattern or practice of employing unauthorized aliens is one of the most egregious violations of federal immigration law. Those businesses convicted of such a violation have incorporated the hiring of unauthorized workers into their business model and essentially established such behavior as an accepted business practice. Not only must the violation have taken place knowingly, it must also take place repeatedly. Businesses convicted of this federal violation will most likely be shut down as a result of the criminal and civil punishments levied by the federal government.

Another set of bills, HB1298 and SB517, require public bodies to include in all contracts that the contractor shall comply with all applicable federal, state and local laws, rules and regulations during the performance of the contract, and (ii) that the contractor does not, and shall not during the performance of the contract, knowingly employ an unauthorized alien. SB517 (introduced at the request of the Attorney General) contains both provisions while HB1298 only contains (ii) due to its having been drafted to a different Code section initially and rules on germaneness preventing the inclusion of provision (i) as an amendment. SB517 is limited to contracts of over $10,000 while HB1298 applies to all contracts.

We anticipate that HB1298 will be conformed to SB517 when it is considered by the Senate. Between the two versions, we believe SB517 is the better bill.

The fifth bill, HB1472, provides that discharging or taking other employment-related action with regard to an employee on the basis of the employee's failure or refusal to comply with his employer's requirement that English be spoken or used while at work shall not be deemed to constitute discrimination on the basis of national origin. While the legislation actually provides additional protections to employers, VESIP members are troubled by the bills apparent attempt to legalize certain types of discrimination. Although the group has not taken a position on the bill, we will likely let it be known that this is not a piece of legislation that was developed in conjunction with VESIP.

Senate Joint Resolution 120 memorializes the United State Congress to develop a comprehensive immigration policy. VESIP members are supportive of this legislation.

Bills Defeated
Many bills of concern to AGC were NOT approved:

Changes in procurement laws to modify bid, payment and performance bonds to allow personal surety without protections for contractors and subcontractors.

Requiring state contractors to offer telecommuting or alternative work schedules to employees.

Requiring that at least 15% of state procurement contracts be awarded to small, women- and minority-owned businesses in HUB zones.

Requiring employers to permit parents or guardians of school-age children to take annual leave for education and volunteer programs at school.

A variety of procurement legislation.

Technical Education
Two measures enhancing technical education in public schools have passed their respective bodies and are now in the other body for review and hopefully favorable consideration; AGC is supporting these measures.

Contractors On School Property
In recent years, AGC has successfully spearheaded efforts to modify a previous blanket prohibition against contractors’ employees with certain convictions being on a public school site. It now only applies if the employee is in direct contact with students and if the employee has been convicted of certain offenses. AGC is promoting legislation narrowing the nature of such offenses, with that measure having been approved by the Senate and now gone to the House for its review.

Unfortunately, a Delegate in the House had a measure that was on the same subject matter, but with a different approach, that became very controversial and which was defeated in the House 30 – 65. Unfortunately, that development is going to make it more difficult for us to get our very reasonable measure through the House. We hope to convince the delegates that this is a different and much better approach. Time will tell.

Combined Sewer Overflow
Delegate Shannon Valentine introduced HB689 to designate funds to be deposited in the Combined Sewer Overflow Fund for use by the Cities of Lynchburg and Richmond for the completion of their combined sewer overflow projects in certain years when direct general appropriations to the fund are less than $5 million. Due to the ongoing fiscal constraints faced by the Commonwealth, this bill was left in Appropriations after crossover and will not be considered by the Senate.

Delegate Valentine also introduced a budget amendment that requests Virginia Public Building Authority bonds totaling $40 million for combined sewer overflow projects in the cities of Richmond and Lynchburg . The success of this budget amendment will not be known for certain for a few days. However, as noted above, with the Commonwealth facing a $1.4 billion budget shortfall, it is unlikely that new spending for large projects will be approved by the General Assembly.

Eastern Virginia Medical School
Senator Ken Stolle introduced SB613 which requires that the Board of Visitors of the Eastern Virginia Medical School develop a plan by November 1, 2008, for the reorganization of the school, including provisions for appointments to the Board by the Governor, the Speaker, and the Senate Committee on Rules beginning July 1, 2009. The bill also provides for recognition of the school as a state agency, allowing it to receive appropriations of state revenues and state bond proceeds.

SB613 passed the Senate and has been referred to the House Committee on Education.

Alternative Dispute Resolution/Workers’ Compensation
The AFL-CIO and allegedly some union construction contractors in Northern Virginia/Maryland had legislation introduced stating that in a collective bargaining agreement the contractor and union may agree to have an alternative dispute resolution system for workers’ compensation. This measure was defeated the past two years in the Senate Committee. As a result of the election outcome and majority party control shift in the Senate, this measure was approved by the Senate on straight party line votes, with the Democrats favoring and the Republicans opposing. The measure now goes to the House where the House Republican majority has indicated that it will be defeated.

While the measure applies “only” to unions/companies in the construction industry, the measure is adamantly opposed by all business-related groups because of the precedent it sets for all businesses and our right-to-work law. We believe the measure will be defeated in the House. It is, however, an example of how party shifts and involvement in local campaigns (financial and otherwise) can influence public policy.

Homestead Exemption
Like most business groups, AGC has expressed concern and objection to a constitutional amendment that would allow local governing bodies to provide tax relief for properties used as a primary dwelling place for up to 20% of the value/real property tax of that property. The concern is that this will then force localities to make up for lost revenues by shifting the burden to commercial properties. The House version passed the House with widespread support from both Republicans and Democrats. The Senate version was defeated 8-8 in committee. Unfortunately, the House version has now been referred to a different committee in the Senate where its outcome is not yet known. This is one of those ideas that has great public/political appeal, but also long-term financial consequences for local governments and local businesses.

Commonwealth Capital Improvements
The Senate has approved general obligation bonds for construction of various capital improvement projects here in the Commonwealth. Others would be funded by the budget that will be released on Sunday. The House has passed alternative legislation creating the 21st Century Capital Improvement Program that puts in place a long-term program for planning and funding capital improvements at state agencies and institutions of higher education. Commencing this week there will be efforts to reconcile and accommodate the different approaches by the Senate and House. It does look like, however, there is strong consensus for fairly significant bond funding for state construction projects both because the projects in question are needed and to assist the economy.

Please call AGC if you have questions on any of these items. Additional information will be published in the near future.

CAPITOL CAROUSEL

February 7, 2008
Legislative Update…Lobbying at its Finest
One of the most pressing issues in this year’s General Assembly has been the strong outpouring of anti-immigrant legislation. Numerous proposals to address the problem with illegal immigrants were introduced this session, including more than twenty that directly impacted the business community.

It should probably be noted that AGC does not advocate or support the hiring of illegal aliens. Our lobbying on the subject has been to protect the industry from efforts to hold the industry responsible for the enforcement of federal immigration laws where the government has abdicated its enforcement responsibilities. In other words, efforts to make us the scapegoat.

Many in the business community, especially AGC, foresaw this possibility during last year’s General Assembly Session. The result was formation of the Virginia Employers for Sensible Immigration Policy (VESIP), a business coalition that conducted a great deal of research in preparation and planning for this session. AGC, represented by our legislative counsel of

This Coalition met with members of the General Assembly prior to the session, and is presenting a united business front during the session.

The results. While many proposals were introduced that would have required you to certify the legality of your employees, or require you to use e-verify, and many other requirements, it now appears that the only legislation that will be enacted on the subject directly impacting the business community is a requirement that you follow federal immigration law (which you are already required to do) and agree not to knowingly hire any illegal workers (SB 517), and a proposal that would allow the state to terminate the existence of a corporation if the firm is convicted of a “pattern and practice” of violating federal immigration law (HB 926). We understand that the “pattern and practice” test is a very serious standard.

While nothing is final until the General Assembly adjourns, it appears that these two measures will be the primary ones enacted which impact the business community.

Other issues of interest:

At this point it appears that efforts to weaken the protections of bonds on construction projects through use of alternative surety procedures will fail again this year (HB 187 & 426).

AGC continues to support efforts to enact legislation to provide funding to Richmond and Lynchburg for construction of facilities to address combined sewer overflow problems (HB 689) – has not been addressed by committee at this point.

A proposal to require increased emphasis on technical education in public schools is advancing (SB 326).

Our proposal to clarify which employees can work on school construction projects (SB 655) has passed the Senate and is now moving to the House. Under current law, anyone convicted of any felony is prohibited on these projects if any children are present on the premises. Our amendment narrows the felony conviction criteria to particular, serious felonies.

More details on these issues and others later. In the meantime, please remember that you can go to http://leg1.state.va.us to look up the status of various proposals.

CAPITOL CAROUSEL

January 14, 2008
This brief overview of the 2008 Session is being prepared primarily for attendees of AGC’s Annual Convention. More detailed reports will be provided throughout the session by AGC’s lobbyist, Bill Axselle of

Some basic parameters. The General Assembly convened on Wednesday, January 9. It will adjourn by March 8. At press time, the members had already introduced more than 2,400 proposals, broken down as follows:

House Bills – 1,421
House Resolutions – 218
Senate Bills – 672
Senate Resolutions - 114

The 2008 Session will be a very challenging session. As background, please keep in mind that:

In the last election, the Senate switched from Republican to Democratic control;
The Democrats in the House moved closer to taking control;
Both parties are looking at the 2009 elections as one of the most important elections facing the Commonwealth in years since redistricting will take place after the next election, and the party in control virtually assures itself of control until the next redistricting;
Thus political posturing by both sides is going to be a major factor in deliberations this year.

Beyond that, within each party there is competition between candidates who are interested in setting the stage for possible Gubernatorial campaigns in 2009.

And beyond all this, the campaign for the U. S. Senate seat being vacated by Senator John Warner will be heating up during the session, too.

At this stage, it is difficult to make predictions about what will happen during the session. There are a few things that are relatively certain though:

The abusive driver fees law will likely be repealed – whether a funding stream will be added to offset the loss of anticipated revenues is not certain;

There will be a lot of talk about the need to fix Virginia ’s transportation problem; There will be an extremely strong push to enact legislation to “fix” the problem with illegal immigration in Virginia . The problem is that most of the proposed fixes will require employers to certify, in effect, that all of their employees are legal (not that you’ve followed all the procedures required by the Federal government, but that they are legal).

AGC representatives have been participating in a coalition with many other business interests over the past several months developing a unified position on immigration. We are hopeful of success in educating legislators about the problem.

Some Key Issues

Senator Steve Newman (R-Lynchburg) has introduced legislation (SB 655) at AGC’s request that would further clarify restrictions on which employees are permitted to work on school projects if children are anywhere near present. Current law states that anyone who has ever been convicted of a felony can’t work on these projects…our clarification would restrict this limitation to those who have been convicted of a felony involving a “barrier” crime such as murder, abduction, assaults, sexual assault, taking indecent liberties with children, and so forth. We believe this clarification will make the law fairer and easier to comply with.

A proposal has been introduced by Delegate Shannon Valentine (D-Lynchburg) (HB 689) which would provide additional funding to fix combined sewer overflow problems in both Lynchburg and Richmond which AGC is supporting.

Senator Frank Wagner (R-Virginia Brach) has introduced legislation (SB 326) which would require the State Board of Education to place more emphasis on career and technical education, including establishing annual goals for each school division. With the lack of emphasis afforded to technical education in recent years, and the shortage of students seeking construction careers, AGC believes that this proposal is vital to the industry.

Future reports will provide more detail on these issues.

If you want to check the status of legislation, just go to: http://leg1.state.va.us, and then page through as appropriate.

Sincerely,
Steven C. Vermillion
Chief Executive Officer