LB 2011 - 02
January 24, 2011
LEGISLATIVE COMMITTEES START DEBATING BILLS
House and Senate committees will begin discussing bills this week after spending last week getting organized. The House Finance Committee has started budget hearings for state agencies. S. B. 297, which passed in the 2008 Legislative Session, has provided millions for school construction projects over the last three years, School Building Authority Executive Director Dr. Mark Manchin told House Finance Committee members Tuesday, January 18. In giving his budget presentation, Dr. Manchin said S.B. 297 authorized the SBA to utilize $19 million from their annual Excess Lottery Funds to leverage the sale of school construction bonds. The bill also extended the terms of the bonds from 10 years to 20 years. The $19 million yearly allotment has leveraged $260 million in construction over the past three years. The CAWV supported S.B. 297.
From January 2008 through 2010, the bonds have resulted in 11 new elementary/primary schools, seven new middle schools and three new high schools. The SBA has also performed a number of major and minor renovation projects. These include 42 roof repair or replacement projects, 26 HVAC replacement or renovation projects, and 48 projects involving school renovations or additions. Dr. Manchin also told legislators that the American Recovery and Reinvestment Act of 2009 included language which provided an opportunity for each state to sell tax-credit bonds called Qualified School Construction Bonds (QSCB). West Virginia was allocated $78.2 million in QSCBs in 2009 and again in 2010. This allowed the state to borrow funds for construction at a considerably lower rate than traditional bonds.
For more of Dr. Manchin’s presentation to the House Finance Committee, see the January 21 CAWV Building Bulletin by clicking here.
WVDOT SECRETARY SAYS ADDITIONAL $700 MILLION ANNUALLY NEEDED TO ELIMINATE FUNDING DEFICIT
Transportation Secretary Paul Mattox told Senate Transportation and Infrastructure Committee members Friday that highway revenues are stagnant and that the same dollars buy 30 percent less than they did ten years ago. He also briefed members on the federal-aid highway bill that is 16 months past due. “There have been six continuing resolutions to keep highway funding flowing to states,” said Secretary Mattox. “The current continuing resolution expires March 4.” He also said that if Congress reduces federal highway funding, the DOH stands to lose $79 million – about 20 percent of its yearly federal-aid construction budget. “West Virginia in the 1991 highway bill got $2.11 for every $1 collected,” Mr. Mattox stated. “In the 1997 bill, the ratio dropped to $1.78. Under the current highway bill that expired October 2009, we receive $1.58. The trend is going against us.” Overall, the secretary noted, state Road Fund revenues have increased by less that $13 million in the past decade – from $656.9 million in 1999 to $669.2 million in 2008.
Legislators complained that secondary roads are getting in bad condition and asked the secretary for a status of the paving program. He said the current paving cycle is 31 years. To return the ideal 12-year rotation, the DOH would need and additional $700 million on average per year, he stated. At $14 million collected for every penny, this equates to an additional 50 cents gas tax to the current 32.2 cents a gallon. “If we look at the paving program, we’re not blameless,” said Sen. Robert Plymale, D-Wayne. The senator was referencing the Legislature’s decision to freeze the wholesale gas tax in 2005 and again in 2009 which cost the highway fund about $120 million. “We’re going to have to raise the gas tax to get us back on a 12-year cycle,” he said. He also criticized the action last week taken by U.S. House Republicans to repeal a section of the highway bill that preserves the linkage between incoming trust fund revenues and future federal investments. “The Highway Trust Fund is no longer sacred and the action taken in the House is terrible,” Senator Plymale said.
The secretary noted the WVDOH has averaged more than $500 million annually in construction during the past six years. This is due to various actions taken by the division, including engineering projects only when dollars are available for construction, bringing more efficiency into the process and reducing right-of-way acquisition and other soft costs.
CONTRACTOR-FINANCED CONSTRUCTION PRESENTED AS FUNDING OPTION
Secretary Mattox during the Senate Transportation and Infrastructure Committee meeting did not give specific funding proposals but he did mention that the WVDOH is looking at alternative funding mechanisms. The secretary listed design-build, toll roads, public-private partnerships and deferred payments to contractors. The WVDOH considered having contractors finance the 6.2 mile section of Corridor H between Bismark and Davis bid November 16, 2010. Under this scenerio, the contractor would be paid over a four or five year period beginning upon completion of the project. After concern expressed by the CAWV and other groups, the WVDOH chose to move forward on the $82.4 million contract using a traditional design-bid-build contract.
LEGISLATIVE RULES BILLS INTRODUCED
Last week saw the introduction of legislative rule bills. Every regulation or policy developed by agencies that affects the public must go before the Legislative Rule-Making Review Committee. Members of the committee must determine whether a state agency has exceeded the scope of its statutory authority, whether the proposed rule conforms to legislative intent and whether it conflicts with state code or another rule. The committee also looks to see if the proposed rule is necessary, reasonable or could be made less complex.
Any individual or group affected by a rule has an opportunity for comment before the Rule-Review Committee. Legislators can accept an agency’s proposal or modify it. The CAWV often comments on rules that are submitted. Some of the rules included with this bulletin affect construction.
H.B. 2545 AND S.B. 204 REQUIRE WORKERS TO COMPLETE OSHA 10-HOUR COURSE PRIOR TO STARTING WORK
Bills that have generated a lot of discussion are H.B. 2545 and S.B. 204, which will require every worker on public works projects over $1,000 to complete the OSHA 10-hour safety program prior to starting work, and mandate that workers carry a card showing successful completion of the program. The bills would also require contractors to submit a copy of each employee’s card with their first certified payroll submitted to the contracting agency. The Commissioner of Labor, under the rule, may assess a civil penalty of up to $3,000, and, an employer shall be assessed a civil penalty of $500 per employee for each day of noncompliance. The House bill is referred to the Committee on Energy, Industry and Labor, Economic Development and Small Business then Government Organization. The Senate bill is referred to Transportation and Infrastructure then Finance.
Many members have expressed concern over the bill for various reasons. These include: OSHA does not require completion of the 10-hour course; the course is not intended for highway, water and sewer construction; contractors have foremen and supervisory personnel who are fully trained in all aspects of safety; workers receive training specific to their aspect of construction; unemployed construction workers are looking to get back to work and putting this as a requirement could hinder their re-employment; Workers Compensation insurance premiums make safety a top priority for all contractors; and this bill applies to all subcontractors and DBE firms that may be doing only a small portion of the work yet their employees would have to have the 10-hour training before setting foot on the jobsite.
Members have noted that in these tough economic times, contractors are trying many innovative ideas just to keep their doors open and employees working. Safety still remains a top priority. However, adding another level of bureaucracy without a corresponding improvement in safety could prohibit calling qualified workers back on the job.
BILL ALLOWS USE OF REVERSE AUCTION FOR COMMODITIES PURCHASED BY STATE
S.B. 240, introduced today by Acting President Jeff Kessler and Minority Leader Mike Hall at the request of the Executive (Acting Governor Tomblin), allows the Director of Purchasing to conduct reverse auctions to purchase commodities. This is a bill that has been considered for a number of years. The CAWV has been adamantly opposed to the concept of reverse auction for the procurement of construction projects. The bill specifically prohibits the use of reverse auction for the procurement of services, which we are assuming includes construction. However, construction materials such as aggregates, asphalt, lumber, etc. which are bid annually and semi-annually through the Purchasing Division would probably fall under the purview of this bill. The CAWV will be meeting with administration officials to learn more about the bill and its intended purpose.
House and Senate bills can be accessed from the CAWV’s Legislative home page at www.cawv.org/legislative. Members can view status updates on bills of interest to the construction industry and see what legislation is introduced that affects the construction industry. A summary of each day’s activities will be uploaded each afternoon.
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 firstname.lastname@example.org.
HB 2545 Del. D. Poling, Butcher, Hamilton, D. Campbell, Ellem, Martin, Barker and Storch-Requiring onsite employees at certain public works construction projects to complete an Occupational Safety and Health Administration (OSHA) approved 10-hour construction safety program-To Energy, Industry and Labor, Economic Development and Small Business then Government Organization.
HB 2567 Del. Brown, D. Poling, Fleischauer and Talbott-WorkForce West Virginia, rule for employer violator system-To Judiciary.
HB 2655 Del. Armstead, Sobonya, Carmichael, Ireland, Andes, Sumner and C. Miller-Abolishing the business and franchise tax (FN)-To Finance.
HB 2658 Del. Williams, Shaver, Perry, Michael, Hartman and Sumner-reducing the wholesale tax on heating fuel, off road fuels, kerosene and propane used for home heating purposes or off road use (FN)-To Agriculture then Finance.
HB 2662 Del. Moye, Sumner, Stephens and Rodighiero-Exempting existing churches from paying tax to propane and other forms of heating oil (FN)-To Energy, Industry and Labor, Economic Development and Small Business then Finance.
HB 2664 Del. Moye, Barker, M. Poling, Campbell and D. Poling-Verifying legal employment status of workers-To Energy, Industry and Labor, Economic Development and Small Business then Judiciary.
HB 2665 Del. Moye, Staggers, Manchin, T. Campbell and Miley-Relating to annexation generally-To Political Subdivisions then Judiciary.
HB 2686 Del. Craig, Michael and Azinger-Relating to limitations for certain asbestos exposure claims-To Judiciary
HB 2691 By Mr. Speaker (Mr. Thompson) and Del. Armstead [By Request of the Executive] Maintaining solvency of the Unemployment Compensation Fund -To Finance.
HB 2692 By Mr. Speaker (Mr. Thompson) and Del. Armstead [By Request of the Executive]- Updating the meaning of federal adjusted gross income and certain other terms used in the West Virginia Personal Income Tax Act-To Finance.
HB 2700 Del. Morgan, Stephens and Givens-Relating to elevator safety-To Government Organization.
HB 2709 Del. Canterbury, Hamilton, Perry, Shaver, Walker and Hartman-Allowing county school boards to enter into energy-savings contracts-To Education then Judiciary.
HB 2711 Del. Ellem-relating to the adoption of the 2008 National Electric Code-To Government Organization.
HB 2717 Del. Walters and Paxton-The Economic Fairness Act of 2009 (FN)-To Energy, Industry and Labor, Economic Development and Small Business then Finance.
HB 2734 Del. Overington, Carmichael, Andes and J. Miller-Establishing prevailing hourly rates to be used in connection with the construction of public improvements (FN)-To Energy, Industry and Labor, Economic Development and Small Business then Judiciary.
HB 2736 Del. Overington, Cowles, J. Miller, Andes and Carmichael-Exempting construction performed on behalf of educational authorities from prevailing wage requirements-To Energy, Industry and Labor, Economic Development and Small Business then Judiciary.
HB 2741 Del. Manypenny, Doyle, Mahan, Guthrie, Canterbury, Barker, Hartman, Brown and Hatfield-Exempting the construction or addition of active solar energy systems from real and personal taxation (FN)-To Judiciary then Finance.
HB 2759 By Mr. Speaker (Mr. Thompson) and Del. Armstead [By Request of the Executive]-Relating to purchasing practices-To Judiciary then Finance.
HB 2762 By Mr. Speaker (Mr. Thompson) and Del. Armstead [By Request of the Executive]-Revising the County Economic Opportunity Development District Act (FN)-To Energy, Industry and Labor, Economic Development and Small Business, Judiciary then Finance.
HB 2770 Del. Caputo, Fragale, Hatfield, Martin and Moye-Flexible Leave Act (FN)-To Energy, Industry and Labor, Economic Development and Small Business then Finance.
HB 2772 Del. Cowles, Stowers, Rodighiero, J. Miller, C. Miller, Michael and Hall-Exempting special fuel and propane used for home heating purposes from the motor fuel excise tax (FN)-To Finance.
HB 2776 Del. Manypenny, Martin, Ferro and Hartman-Residential Renewable Energy Systems Tax Credit (FN)-To Energy, Industry and Labor, Economic Development and Small Business then Finance.
HB 2795 Del. Armstead-Jobs Impact Statement Act-To Energy, Industry and Labor, Economic Development and Small Business then Government Organization.
HB 2834 Del. Fleischauer, Manypenny, Marshall, Doyle, Martin, Longstreth and Hatfield-Relating to water pollution control-To Government Organization then Judiciary.
SB 117 Sen. Minard, Snyder, Prezioso, Unger, Boley and K. Facemyer-Authorizing DEP promulgate legislative rule relating to permits for construction and major modification of major stationary sources of air pollution which cause or contribute to nonattainment-To Energy, Industry and Mining then Judiciary.
SB 119 Sen. Minard, Snyder, Prezioso, Unger, Boley and K. Facemyer-Authorizing DEP promulgate legislative rule relating to emission standards for hazardous air pollutants-To Energy, Industry and Mining then Judiciary.
SB 121 Sen. Minard, Snyder, Prezioso, Unger, Boley and K. Facemyer-Authorizing DEP promulgate legislative rule relating to requirements governing groundwater standards-To Natural Resources then Judiciary.
SB 122 Sen. Minard, Snyder, Prezioso, Unger, Boley and K. Facemyer-Authorizing DEP promulgate legislative rule relating to requirements governing water quality standards-To Natural Resources then Judiciary.
SB 129 Sen. Minard, Snyder, Prezioso, Unger, Boley and K. Facemyer-Authorizing DHHR promulgate legislative rule relating to public water systems-To Health and Human resources then Judiciary.
SB 134 Sen. Minard, Snyder, Prezioso, Unger, Boley and K. Facemyer-Authorizing Commissioner of Highways promulgate legislative rule relating to Community Empowerment Transportation Act Program-To Transportation and Infrastructure then Judiciary.
SB 135 Sen. Minard, Snyder, Prezioso, Unger, Boley and K. Facemyer-Authorizing Commissioner of Highways promulgate legislative rule relating to use of state road rights-of-way and adjacent areas-To Transportation and Infrastructure then Judiciary.
SB 136 Sen. Minard, Snyder, Prezioso, Unger, Boley and K. Facemyer-Authorizing Commissioner of Highways promulgate legislative rule relating to transportation of hazardous wastes upon roads and highways-To Transportation and Infrastructure, then Judiciary.
SB 149 Sen. Minard, Snyder, Prezioso, Unger, Boley and K. Facemyer-Authorizing Division of Labor promulgate legislative rule relating to Elevator Safety Act-To Labor then Judiciary.
SB 150 Sen. Minard, Snyder, Prezioso, Unger, Boley and K. Facemyer-Authorizing Division of Labor promulgate legislative rule relating to supervision of elevator mechanics and apprentices-To Labor then Judiciary.
SB 151 Sen. Minard, Snyder, Prezioso, Unger, Boley and K. Facemyer-Authorizing Division of Labor promulgate legislative rule relating to Crane Operator Certification Act-To Labor then Judiciary.
SB 152 Sen. Minard, Snyder, Prezioso, Unger, Boley and K. Facemyer-Authorizing Division of Labor promulgate legislative rule relating to Crane Operator Certification Act–practical examination-To Labor then Judiciary.
SB 201 Sen. McCabe and Browning-Creating Energy Efficient Building Act (FN)-Economic Development then Finance.
SB 203 Sen. Klempa-Requiring disclosure of subcontractors within certain time for public construction contracts-To Judiciary.
SB 204 Sen. Klempa-Requiring employees at certain construction projects complete OSHA approved safety program-To Transportation and Infrastructure then Finance.
SB 205 Sen. Kessler (Acting President) and Hall [By Request of the Executive]-Updating certain terms in Corporation Net Income Tax Act-To Finance.
SB 208 Sen. Unger, Klempa, Jenkins and Plymale-Creating WV Transportation Finance Commission-To Transportation and Infrastructure then Finance.
SB 219 Sen. Kessler (Acting President) and Hall [By Request of the Executive]-Relating to maintaining solvency of Unemployment Compensation fund-To Finance.
SB 225 Sen. McCabe and Browning-Creating WV Innovation and Development Act-To Economic Development then Finance.
SB 227 Sen. Browning, Unger, Plymale, Kessler (Acting President), McCabe, Prezioso, Stollings and Klempa-Relating to Creative Communities Development Pilot Program (FN) (IB)-To Economic Development then Finance.
SB 231 Sen. Foster-Relating to elevator workers’ licensure exemptions-To Labor then Government Organization.
SB 234 Sen. Kessler (Acting President) and Hall [By Request of the Executive]-Revising Municipal Economic Opportunity Development District Act (FN)-To Energy, Industry and Mining then Finance.
SB 240 Sen. Kessler (Acting President) and Hall [By Request of the Executive]-Allowing Director of Purchasing Division conduct reverse auctions to purchase commodities-To Government Organization then Finance.
SB 245 Sen. Snyder, Kessler (Acting President), Browning, Foster, Laird, Yost, Stollings, Beach, Fanning, Unger, Wills, Barnes and Miller-Relating to protection of Chesapeake Bay Watershed (IB)-To Judiciary then Finance.