LB 2008 - 2
January 21, 2008

Lawmakers last week started looking at the state's budget and the future outlook for West Virginia's economy, which has a direct impact on state tax revenues. "The budget is in pretty good shape," said Sen. Walt Helmick, chairman of the Senate Finance Committee. Speaking before the WV Business and Industry Council (BIC), the chairman said the state has enjoyed five straight years of a budget surplus and a $100 million budget surplus is expected this year. "However, we don't see revenues continuing to grow and we need to start looking at this now before it becomes a problem," he stated. The administration is proposing a $3.9 billion budget, but with federal appropriations, fees and other revenue, the budget is closer to $14 billion. The chairman noted that nearly 70 percent of the budget goes to secondary and higher education.

"We need to find another source of funding for the West Virginia Division of Highways," the Pocahontas County Democrat noted. "WVDOH tells us that they are $40 million short of what they need. I don't think we need to use the $100 million budget surplus because this is one time money. We need to find $40 million annually," he said. "We have to look at our road problems."

The chairman stated that the state's retirement systems are in better shape than they have ever been. With the $800 million tobacco settlement going to the teacher's retirement system, that program is funded at 58 percent, up from 31 percent. Had the state not put money into the teachers, judicial, state police and public employees retirement systems, the annual allocation would have jumped from $360 million this year to $728 million next year. The increase would have had to come from other parts of the budget or taxes would have to raised. Now, next year's allocation will drop to $282 million. One area the legislature needs to look at is the state's overall business ratings. "West Virginia is ranked last by Forbes magazine and Virginia is ranked first," Sen. Helmick noted. "There is only a line in the woods that separate the two states. We need to look at what the difference is and look at each area to determine how to make West Virginia better." The Finance chairman said his committee is reviewing six tax bills that should have a positive impact on business in the state.

The House and Senate Finance Committees are conducting budget hearings from all state agencies over the next few weeks. Once the hearings are completed, the committees will start developing a new fiscal year budget.

In an unrelated issue, the State Capitol has opened its new food court in the lower level of the capitol. The former cafeteria was closed in late 2006 when a number of violations were discovered. The cafeteria was gutted and a $3.7 million contract was awarded to Wiseman Construction, Charleston, to rebuild the food court. ZMM, Inc., Charleston, was the architect. It opened the first day of the session and it is a great improvement. CAWV members coming to the State Capitol during the legislative session are encouraged to see and eat in the new area.

House and Senate bills can be accessed from the CAWV's home page at www.cawv.org. Members can view each day's proceedings to see what legislation is introduced that affects the construction industry. A summary of each week's activities will be uploaded on Monday morning.

SBA PROPOSES BOND ISSUE FOR SCHOOL CONSTRUCTION

School Building Authority Director Mark Manchin and Governor Joe Manchin will propose legislation authorizing the SBA to issue bonds to fund future new school construction and renovation projects. The SBA would sell over $200 million in bonds and utilize the current $19 million it receives annually from excess lottery funds for a pay-as-you-go construction program to pay debt service on the bonds. The last SBA bonds series by lottery proceeds were issued in 2004 ($186 million) and will be paid off in 2014. The CAWV Joint Architects Committee has been working with SBA on the bonding proposal that would eliminate the boom-bust cycle of school construction in the state. Historically when school bonds are sold, projects are designed and constructed over three to four years and then very little construction dollars are available until the bonds are repaid or reissued. This proposal is unique in that the funding from the bonds would be spread out over a ten to twelve year period and provide a consistent funding level of $60 million to $70 million annually. Contractors and suppliers will know how much school construction in planned through 2012 and be able to plan their workload, personnel and equipment accordingly. Gov. Manchin is expected to introduce the bill as early as this week. Director Mark Manchin is presenting the proposal to the Senate Finance Committee at 3 p.m. today. Members attending the CAWV Midyear Meeting next week will get a full report on the proposed bond issue from Doug Meeks, chairman of the CAWV Joint Architects Committee.

CONTRACTOR RECOVERY FUND DISCUSSED

The CAWV was in discussions this week with legislators who are considering creating a Contractor Recovery Fund within the WV Division of Labor to compensate people who have been harmed by a contractor who has engaged in unsafe, defective or unscrupulous conduct. The proposal calls for licensed contractors to pay an annual fee into a fund that consumers could go against when wronged by a contractor. Virginia has such a fund. The CAWV noted that the vast majority of licensed contractors provide a good service and that many of the complaints that come before the Contractor Licensing Board are by consumers who hired an unlicensed contractor to perform the work. The CAWV is exploring other options to address legislators' concerns without making licensed contractors pay another fee.

ILLEGAL IMMIGRATION BILL INTRODUCED

The West Virginia Taxpayer and Citizen Protection Act of 2008, H.B. 4054, has been introduced and referred to the Committee on Industry and Labor, Economic Development and Small Business, then the Judiciary Committee. The bill purpose is stated as follows:

The State of West Virginia finds that illegal immigration is causing economic hardship and lawlessness in this state and that illegal immigration is encouraged when public agencies within this state provide public benefits without verifying immigration status. The State of West Virginia further funds that when illegal immigrants have been harbored and sheltered in this state and encouraged to reside in this state through the issuance of identification cards that are issued without verifying immigration status, these practices impede and obstruct the enforcement of federal immigration law, undermine the security of our borders, and impermissibly restrict the privileges and immunities of the citizens of West Virginia. Therefore, the people of the state of West Virginia declare that it is a compelling public interest of this state to discourage illegal immigration by requiring all agencies within this state to fully cooperate with federal immigration authorities in the enforcement of federal immigration laws. The State of West Virginia also finds that other measures are necessary to ensure the integrity of various governmental programs and services.

The bill states that any person violating the provisions of the act, upon conviction, is guilty of a felony and shall be imprisoned in a state correctional facility for not less than one year, or fined not less than one thousand dollars, or both such fine and imprisonment.

This is the second bill in two years dealing with illegal immigration. S.B. 70 was passed last year by the WV Legislature. The bill, which was a compromise by the business community and the WV Division of Labor, originally dealt strictly with contractors and their subcontractors who hire undocumented workers. The bill was expanded early in the session to address all employers. The West Virginia Chamber of Commerce did a good job in their analysis of the legislation, noting it contained potentially unconstitutional language and included the possibility that both the employer and the State of West Virginia could be held liable for denial of workers' civil rights in discrimination actions under federal law. The bill provides a penalty of $100 to $1,000 for the first offense, $500 to $5,000 for the second offense, and $1,000 to $10,000 plus jail from 30 days to 1 year for the third offense. After the third offense, the Commissioner of the Division of Labor could permanently revoke or suspend "any" license held by the employer.

The CAWV will be reviewing H.B. 4054 to determine how it correlates with existing law.

HOUSE PASSES ELEVATOR SAFETY ACT

The House passed H.B. 4038 which sets up a new section of WV State Code relating to the Elevator Safety Act. The bill requires, starting January 1, 2010, that no person may engage in the business of erecting, constructing, installing, altering, servicing, repairing or maintaining elevators or related conveyances unless he or she has a license issued by the Commissioner of Labor. Also, no person may serve as an inspector unless he or she completes the examination for Qualified Elevator Inspector (QEI) from an examination approved by the commissioner. The Division of Labor will develop rules for legislative approval for the implementation and enforcement of the bill. The bill has been referred to the Senate Government Organization Committee.

GREEN BUILDING LEGISLATION INTRODUCED

H.B. 4066, introduced by Delegates Fleischauer, Staggers, Marshall, Burdiss, Talbott, Hatfield, Guthrie, Canterbury, Wells, Brown and Mahan, would require adoption of green building standards for construction or renovation of public buildings and school projects over 5,000 square feet in size, and all major facility projects other than those by a public agency or school district that receives any state funding. The project must meet the LEED silver standards of the US Green Building Council Leadership. The WV Department of Administration would create a Green Building Advisory Committee composed of architects and contractors involved in public works contracting, personnel for the affected public agencies and school boards that oversee public works projects, and others at the department's discretion. The bill is referred to the Committee on Government Organization then Finance.

Below is a list of bills that have been introduced this week that have an impact on the construction industry or some CAWV members. Anyone needing further information can contact Mike Clowser at (304) 342-1166 or email mclowser@cawv.org.

HOUSE BILLS

HB 4049 Del. Michael-Asbestos Claims Transparency Act-To Judiciary then Finance

HB 4054 Del. Moye, Campbell, Crosier, Gall, Staggers, Canterbury, Barker, Stephens, Kessler, Argento and Varner-West Virginia Taxpayer and Citizen Protection Act of 2008-To Industry and Labor, Economic Development and Small Business then Judiciary

HB 4066 Del. Fleischauer, Staggers, Marshall, Burdiss, Talbott, Hatfield, Guthrie, Canterbury, Wells, Brown and Mahan-Green Buildings Act-To Government Organization then Finance.

HB 4072 Del. Morgan, Martin, Argento, Caputo, Eldridge, Hartman, Poling, D., Staggers, Swartzmiller, Canterbury and Porter-Clarifying that the Board of Registration for Professional Engineers is subject to a regulatory board review-To Government organization-{Interim Bill}

HB 4119 Del. Miller, J., Overington, Cowles, Blair, Duke, Wysong and Tabb-Relating to zoning ordinances-To Political Subdivisions then Judiciary

SENATE BILLS

SB 218 Sen. McCabe-Relating to nonpartisan election of Supreme Court justices and circuit court judges-To Judiciary

SB 219 Sen. Hunter-relating to county development fees-Economic Development then Finance

SB 220 Sen. Facemyer-Creating Asbestos Claims Transparency Act-To Judiciary then Finance

SB 233 Sen. Foster-Requiring notice of mechanic's lien before purchase-To Judiciary

SB 248 Sen. Barnes, Unger, Yoder, Hunter, McKenzie, Kessler, Prezioso, Foster, Sprouse, Boley, Edgell and Love-Providing state will not participate in Real ID Act of 2005- To Transportation and Infrastructure then Finance

SB 251 Sen. Sypolt and Bowman-Removing state employee exemption from land surveyor licensing provisions-To Government Organization then Finance

SB 253 Sen. Sypolt-Defining "survey foot"- To Interstate Cooperation

SB 280 Sen. McCabe and Bailey-Modifying Downtown Redevelopment Act-Economic Development then Finance

SB 281 Sen. Sypolt-Relating to land surveyors' liability upon entering railroad property-To Judiciary

SB 284 Sen. Sypolt-Relating to land surveyors' liability upon entering railroad property-To Judiciary