Legislative Update August 6, 2010 AGC representatives recently met with Congressman Robert Wittman to present a contribution from AGC of America’s Political Action Committee and to discuss a variety of issues impacting the construction industry at this time.  Pictured here are Ralph Johnson (Mason-Johnson, LLC) and Bryan Norsworthy (Hudgins Contracting Corp) with 1st District Congressman Robert Wittman.

Capitol Carousel

March 5 , 2010
Since our last legislative update, AGC continues its successes at the General Assembly in protecting the interest of AGC members.

Unemployment compensation extension – This Senate-approved measure, which would have added substantial unemployment costs for employers, has been defeated in the House as we had advocated.

Political contributions – This measure as initially introduced was both poor public policy and drafting. It would have prohibited most political contributions by contractors who work with public bodies. During the legislative process, we worked with the Governor’s Office to limit its scope to only contributions during procurements before the Executive Branch (not local governments), with the prohibition being against a contribution and against the Governor soliciting such contribution from a company having a pending proposal. Contributions during competitive sealed biddings are exempt. While we still question the “need” for such legislation, it was advanced by the Governor and is now very limited as described above, and only prohibits knowingly violating this law.

Cooperative procurement limitation to avoid FairfaxCounty-type situation of a cooperative procurement for construction being used in other jurisdictions - Current law permits local public bodies to utilize procurement agreements negotiated by other public bodies without allowing other firms to even compete for projects. This measure was approved by the House to restrict use of these cooperative agreements, limiting the geographic scope and project size in construction (within 75 miles and not more than $200,000). Both last year and earlier this year, the Senate defeated a comparable measure in committee. With Bill Axselle speaking on behalf of AGC as part of a coalition supporting the bill, the measure was reported by that same committee on a 8 – 7 vote. It now goes to the full Senate where approval is uncertain.

E-Verify– The only remaining issue is the Houseapproved legislation that would mandate use of EVerify. The measure will be heard on Monday by the Senate Commerce and Labor Committee that previously had defeated a Senate version of E-Verify. AGC continues to oppose this measure and is optimistic, but not certain, that this measure will be defeated on Monday.

Capitol Carousel

February 19, 2010

The 2010 Session of the Virginia General Assembly has now crossed the half way point in its deliberations. AGC has aggressively worked to protect the construction industry’s interests during this session --- working on its own on many issues, and forming and participating in coalitions as necessary to protect and advance industry interests.

But the fact remains that the major issue facing the Commonwealth, the tremendous budget deficit, has yet to truly be addressed. And make no mistake, the second half of the 2010 Session will be very contentious unless a major breakthough on the budget takes place soon. The issue is a deficit of approximately $4 billion which must be addressed as a balanced budget is required by law.

Difficult decisions are required, and serious discussion is needed. We as a state cannot “bury our heads in the sand”, postponing action like the General Assembly and the Administration did last year by using one-time stimulus money to delay the inevitable. But it will be a challenge.

We will try to keep you up to date on developments in this area.

AGC Successes

As noted in the headline to this article, AGC has been very effective in representing your needs this year. Among the successes:

Stormwater regulations - Delayed 280 days from the previously effective July 1, 2010 date or until December 1, 2011, whichever is the earliest, to allow EPA to complete its study and then Soil and Water Conservation Board to revisit issues.

"Worker Misclassification Act"; "Workplace Fraud Act" (Introduced at request of unions dealing with issue of classification as employees or independent contractors generally and specifically in the construction industry) - Carried over to 2011 session with an unspecified study of issue to be done for report to General Assembly at 2011 session.

Cooperative procurement limitation to avoid Fairfax County-type situation of a cooperative procurement for construction being used in other jurisdictions - Approved unanimously in the House with a substantial modification limiting the geographic scope of the use of such cooperative procurement in construction (75 miles); defeated in Senate on a 8-6- 1 vote. The problem with the current cooperative procurement rules is that a locality can use them to circumvent competition and ignore local contractors and subcontractors. House bill will go to Senate later; future is uncertain.

Political contributions - These measures introduced in House and Senate that would have prohibited any type of political contribution by someone in the construction industry as long as any bid/proposal is pending at state and local level. The House measure was modified to limit the scope of the prohibition only to the state Executive Branch/Governor and not to local governments. This measure was overwhelmingly defeated in the House. The Senate has a comparable version, again applicable only to the Executive Branch/state agency/Governor and not applicable to contracts awarded as a result of competitive sealed bidding. It still has some deficiencies. The measure will pass the Senate, but we believe it will be defeated in the House Committee.

Contractors required to have 3-hour education regarding building code before license renewal - Killed

Creation of HUB Zones and preferences in procurement for businesses located in those zones - Modified from a percentage mandate to an aspirational goal with details to be determined by the Department of General Services. As this is a Governor McDonnell-generated approach sponsored in separate bills by a Republican and a Democratic Senator, these measures ultimately may pass the Senate. We are still hoping to defeat this measure in the House.

Procurement Act modification increasing the cost of construction for which state or local public body may use something other than Competitive Sealed Bidding/Design-Bid-Build - Increased from $1.0 million to $1.5 million, rather than the $10 million limit as introduced.

Unemployment compensation extension - Senate has approved an extension of benefits under certain specified circumstances; House has not approved any extension. Only one bill pending in House. House defeated the proposed extension of unemployment benefits as they did during the reconvened session last year. While the Senate version is fairly narrowly drawn, we do not believe it will pass the House.

E-verify - There were three measures mandating use of E-verify. (1) The Senate bill has been killed (the Senate has historically killed these measures); (2) the House bill was modified at our request to limit the scope of the mandated use of E-verify only to state and local governments which must use E-verify in hiring new employees…notably, this measure does NOT require companies that contract with state or local governments to use E-verify…a major win…the measure will pass the House in a very favorably modified fashion, but its future in the Senate is uncertain; (3) an introduced Budget amendment approach (broadest of them all) is not likely to be approved because of the fiscal impact on the Commonwealth at a time of tremendous fiscal stress for the Commonwealth and local governments. Bottom line, issue not fully resolved yet, but it is looking good.

Temporary business license - Sponsored by McDonnell Administration and two House Republicans. Only AGC opposed. As drafted, would allow an out of state firm to get temporary contractor’s license so they could start work immediately on a project in Virginia. We narrowed scope considerably, but bill likely to pass House. May not fare as well in Democratic-controlled Senate.

Capitol Carousel

"Crossover" the mid-point of the General Assembly session is February 17. By that time, we will know what action has been taken on various bills in the Senate and the House.

Stormwater regulations - Delayed 280 days from the previously effective July 1, 2010 date or until December 1, 2011, whichever is the earliest, to allow EPA to complete its study and then Soil and Water Conservation Board to revisit issues.

Indemnification between owners, general contractors, subcontractors - Carried over to the 2011 session and referred to the Small Business Commission for study during 2010.

"Worker Misclassification Act"; "Workplace Fraud Act" (Introduced at request of unions dealing with issue of classification as employees or independent contractors generally and specifically in the construction industry) - Carried over to 2011 session with an unspecified study of issue to be done for report to General Assembly at 2011 session.

Measures mandating percentages of procurement contracts for small, women-owned, minority-owned and service disabled veteran-owned businesses - Most have been killed in House General Laws with a letter to Department of General Services/Minority Business Agency to examine issues. A few remain.

Cooperative procurement limitation to avoid Fairfax County-type situation of a cooperative procurement for construction being used in other jurisdictions - Approved in the House with a substantial modification limiting the geographic scope of the use of such cooperative procurement in construction (75 miles); defeated in Senate. House bill will go to Senate later; future is uncertain.

Political contributions (prohibitions introduced in House and Senate that would have prohibited any type of political contribution by someone in the construction industry as long as any bid/proposal is pending at state and local level) - being modified to limit the scope of the prohibition only to the state Executive Branch and not to local governments. Details later.

Contractors required to have 3-hour education regarding building code before license renewal - Killed

Creation of HUB Zones and preferences in procurement for businesses located in those zones - Being modified from a percentage mandate to an aspirational goal with details to be determined by the Department of General Services. As this is a Governor McDonnell-generated approach sponsored by a Republican and a Democratic Senator. These measures ultimately may pass. Details to be determined by regulation.

Procurement Act modification increasing the cost of construction for which state or local public body may use something other than Competitive Sealed Bidding/Design-Bid-Build - Increased from $1.0 million to $1.5 million, rather than the $10 million limit as introduced.

Unemployment compensation extension- Senate has approved an extension of benefits under certain specified circumstances; House has not approved any extension. Only one bill pending in House. Outcome uncertain. May pass Senate, but not House.

E-verify - There are three measures mandating use of E-verify with a Senate bill having been killed (the Senate has historically killed these measures), with the House bill likely to be approved with modification and with a Budget amendment approach (broadest of them all) not likely to be approved because of the fiscal impact on the Commonwealth at a time of tremendous fiscal stress for the Commonwealth and local governments. Bottom line, issue not resolved yet.

Temporary business license - Sponsored by McDonnell Administration and two House Republicans. Only AGC opposed. We narrowed scope considerably, but bill likely to pass House. May not fare as well in Democratic-controlled Senate.

Capitol Carousel

Total, more than 2,500 bills and resolutions have been introduced for consideration before the General Assembly adjourns by March 13.

AGC’s lobbyists are currently actively working on/monitoring more than 50 proposals, some of which are detailed in this report.

Stormwater Regulations (HB155, HB1220, SB245, SB395)
AGC has been working closely with others in the business community to delay the implementation of the new stormwater regulations adopted last December by the Soil and Water Conservation Board. As adopted, the new regulations will impose very onerous and expensive standards on practically any ground disturbing/commercial development activities at the same time that the Federal government is studying the condition of the Chesapeake Bay, which might result in other regulations being adopted in the near future.

It appears that our efforts to delay implementation will succeed so that the results of the EPA study can be available before new standards are imposed.

SWAM (HB480, HB519, HB542, HB1228, HB1279, SB378)
Several proposals have been introduced that would impact SWAM (Small, Woman Owned and Minority) requirements on jobs, such as adding other categories of “disadvantaged individuals” to the classification, restricting subcontracting by SWAM firms, increasing the use of HUB zones (Historically Underutilized Business) in conjunction with SWAM requirements, requiring the Department of Minority Business Enterprise to enforce “remediation or enhancement” measures, and so on.

AGC is closely monitoring these proposals to ensure that the maximum degree of competition is preserved for the construction industry.

E-Verify (HB737, SB225)
Several measures have been introduced that would require contractors and subcontractors who work with public bodies to use E-Verify for all new hires. Since the Federal government already requires contractors to use the system for its projects, there is a strong likelihood that some measure will pass. AGC is working to ensure that no contractor or subcontractor would be responsible for the hiring practices of other businesses on the jobsite, and that, if the employer follows specified procedures, he would not be subject to an enforcement action if an employee is subsequently found to be illegal.

Unemployment Compensation (HB647, SB239, SB562)
Several measures have been introduced that would greatly liberalize Virginia’s unemployment compensation system, thus increasing costs substantially for employers. The measures would require that benefits be paid to more unemployed individuals, including part time workers, unemployed workers in “approved” training programs and for workers who quit their jobs for “compelling family reasons”.

AGC is working with a business coalition in opposing the liberalization of unemployment compensation benefits.

Worker Misclassification(SB34, SB377)
At the request of the unions, two measures were introduced that would penalize employers for misclassifying workers as independent contractors. As drafted, it appears that it would make it very difficult for a contractor to subcontract any work, and it could impact the entire project should any employer on the project violate this law.

It appears that these proposals will not be enacted. AGC has been very active in opposing them.

Political Contributions (HB768, SB506)
Two measures were introduced that would, in effect, restrict political contributions by public works contractors and their employees. It appears that both measures will be defeated.

Public Procurement (HB789, HB1032)
Proposals were introduced that would have exempted more projects from most of the competitive aspects of the Public Procurement Act. For example, currently localities are able to avoid competitive bidding procedures for any project under $1 million. A proposal was introduced that would have raised this threshold to $10 million. AGC has helped to amend it to $1.5 million.

AGC is working to protect the integrity of the public procurement process, as well as its competitive procedures.


There are obviously numerous other measures being addressed by AGC…more details on them later.

Please note that you can look up legislation by going to: http://leg1.state.va.us

It should also be noted that on most of these measures AGC is the only organization representing the commercial construction industry that is actively engaged in protecting your interests.