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DMV FEE BILL SURVIVES FINAL DAY LEGISLATIVE RUSH

 

The first session of the 80th Legislature of West Virginia concluded work at midnight on Saturday, March 12.  A number of bills that were still in play up to the last minute did not pass when House and Senate conferees could not reach agreement.  A bill that almost did not pass in the final hours of the session was S.B. 608, the bill which increases Division of Motor Vehicle fees that will generate an additional $42 million for secondary road and bridge maintenance projects.  The bill passed 59-39-2 in the House Friday evening with all but two Republicans voting against the bill (Amanda Pasdon, R-Monongalia, and Erikka Storch, R-Ohio, voted yes.  Seven Democrats voted no.)

 

The reason the bill was almost lost is an amendment offered in the House Finance Committee which caps a fee for “auto insurers domiciled in the state of West Virginia” at ten dollars.  After the bill passed the House, there was speculation that giving a preferred rate to West Virginia firms would violate the Interstate Commerce Clause of the Constitution.  A plan was developed that called for the Senate on Saturday to amend the bill by striking this proviso and sending it back to the House for concurrence.  The Senate made the change and the House was expected to concur in the amendment.  Saturday evening the CAWV got word that the House was no longer going to accept bills that were amended in the Senate and there had to be a conference committee appointed to work out the differences between the two versions.  Given the late hour, it was determined there was not enough time to appoint conferees, get them to meet and report back before the midnight deadline.  Instead, the Senate agreed to recall the bill from the House, reinsert the House language, and send the bill to the House. The House concurred with the bill and S.B. 608 concluded legislative action Saturday night.

 

There is now speculation on whether the Governor will be forced to veto the bill due to the proviso being included in the bill.  Lawyers who are looking into the issue believe the severability clause that covers most all legislation would allow the Governor to sign the bill even though this provision is in the bill. The association is meeting with the Governor’s counsel to explore options.  It is hoped the Governor will sign the bill given the condition of the state’s secondary roads.

 

A number of other high profile bills did die in the last hours of the session.  Lawmakers worked all session on a bill proposed toward limiting public retiree health care costs, which have created an estimated $8 billion funding shortfall. The House proposed transferring money from the Rainy Day Fund for the OPEB (other post-employment benefits) liability.  The Senate opposed that, as did the Governor.  A bill to regulate natural gas drilling in the Marcellus Shale field also died on the last day.  While it was the topic of public hearings and committee meetings throughout the 60-day session, the two chambers could not reach a compromise because of industry and environmental concerns. 

 

One Marcellus-related bill that did pass was S.B. 465 that clears the way to build a plant in the Northern Panhandle that would process the gas tapped from the Marcellus Shale deposit.  Called a “cracker” facility, the bill provides incentives for companies to develop and process gas here in West Virginia rather than pipe gas out of state.  An earlier House version contained a section that required companies seeking oil and gas permits to only hire contractors that had bona fide apprenticeship programs approved by the U.S. Bureau of Labor. The bill deletes this section and requires companies to meet the provisions of the West Virginia Jobs Act.

 

Lawmakers also approved a one-percent reduction in the state food tax, going from 3 percent down to 2 percent, and a $67 million one-time, non-base building, supplemental salary increase for all eligible state employees.  Legislators who voted against S.B. 608 argued against giving a tax reduction for food and then increasing DMV fees.

 

CAWV PRESIDENT THANKS MEMBERS FOR THEIR PARTICIPATION

 

“I want to thank all members who contacted their legislators during the session to discuss the industry’s position on key legislation affecting contractors,” said CAWV President John Strickland.  “Many members were active this year in our legislative activities and we are successful because of this,” the president stated.  “Most bills we wanted, except for a few, passed this session.  Equally important, many of the bills were defeated that adversely affected our members’ ability to operate their companies in a prudent and profitable manner.  I thank everyone who helped make this a successful legislative session.”

 

BILLS OF INTEREST TO CAWV

 

The following are bills the CAWV tracked closely during the 60-day session.  A bill tracking list, which includes all of the bills that the CAWV watched during the session is available on the legislative section of the association’s website, www.cawv.org/legislative.html. For more information on a particular piece of legislation, contact Mike Clowser at (304) 342-1166 or email mclowser@cawv.org.  For a listing of all bills passed this session, visit http://www.legis.state.wv.us/  and click on Completed Legislation under the 2011 Session.

 

S.B. 245 ADDRESSES CHESAPEAKE BAY WATERSHED REQUIREMENTS

 

S.B. 245  adds $6 million in lottery revenues to the WV Infrastructure and Jobs Development Council’s annual appropriation of $40 million.  The additional funds would be dedicated to a bond issue that would pay for improvements, upgrades and new construction of wastewater treatment plants in West Virginia’s eight-county Eastern Panhandle.  The improvements are needed to meet new, stringent pollution limits imposed by the U.S. Environmental Protection Agency for the Chesapeake Bay Restoration program.  The estimated cost to make the improvements to 13 sewer plants across the Panhandle is about $225 million.  S.B. 245 covers about $180 million of the total costs, or about 44 percent.  A list of the projects that would be funded now that S.B. 245 passed the full legislature is as follows:

 

Facility

Description

Grant Eligible Project Cost

Berkeley County PSSD - Opequon/Hedgesville

Upgrade

$17,670,818

Berkeley County PSSD - Inwood

Upgrade and Expansion

$11,309,822

Berkeley County PSSD - Baker Heights

Upgrade

$7,139,311

Berkeley County PSSD - North End

Upgrade and Expansion

$8,159,580

Charles Town

Upgrade and Expansion

$22,800,000

Jefferson County PSD - Flowing Springs

New Construction

$26,453,934

Keyser

New Construction

$21,250,000

Martinsburg

New Construction

$45,000,000

Moorefield**

New Construction and Expansion

$3,506,627

Petersburg

Upgrade

$2,892,291

Romney

Upgrade and Expansion

$13,700,000

Shepherdstown

Upgrade and Expansion

$9,102,000

Warm Springs PSD - Berkeley Springs (003)

Upgrade

$1,600,000

TOTAL

 

$190,584,383

 

**The Moorefield project cost is expected to be $37,743,513. The Grant Eligible Project Cost is based on the total public/private cost of $23,377,475. The total public/private cost is the total cost of the project, 37,743,513 minus the WVDEA grant, minus the STAG grants, minus the IJDC grant. Multiplying the total public/private by 15% (because 15% of the flow is from public sources) produces the grant eligible flow.

 

ENERGY-SAVING CONTRACT BILL COMPLETES LEGISLATIVE ACTION

 

H.B. 2709 is a bill to allow county boards of education to enter into energy-saving contracts. All energy-saving contracts entered into with the state of West Virginia and institutions of higher education are up to 15 years in duration. The purpose of H.B. 2709 is to put county boards of education on an equal basis with other public entities. The bill completed its legislative action on March 1 and Governor Tomblin has already signed the bill into law.  It is effective from passage so boards of education can look at entering contracts for this construction season.

 

CRANE RULES MODIFIED

 

Every regulation or policy developed by state 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.  The Senate Labor Committee  reviewed rule changes to the Crane Operator Certification Act.  Last year, the definition for cranes was expanded to include tower cranes. The rules presented by the West Virginia Division of Labor make this change as well as delete the obsolete section which grandfathered crane operators when the bill first passed in 1999.  The rules also add references to American Society of Mechanical Engineers standards.  The full legislature approved the modifications.

 

BILLS THAT DID NOT PASS THIS LEGISLATIVE SESSION

 

The following bills either never made it onto a committee’s agenda or were not advanced by one house or the other:

 

ROUTE 35 PROPOSAL DEFEATED ON SENATE FLOOR

 

S.B. 606, a bill to help build the final 14 miles of Route 35 in Putnam and Mason counties, was defeated.  The bill provided a guarantee of $8 million from the WV Infrastructure and Jobs Development Council should toll revenues not be sufficient to repay the debt service on the bonds sold to finance the project.  The bill cleared the Senate Finance Committee just in time to be considered by the full Senate on Wednesday, the final day for a bill to pass in its house of origin. The bill’s passage seemed assured until a few senators spoke against charging tolls on the new four-lane road.  As debate continued, other senators questioned why they wanted to vote for a bill that didn’t have support from the senators who represent Mason and Putnam counties.  After about 40 minutes of debate, the bill was defeated by a margin of 21-12.

 

S.B. 510 WOULD HAVE ESTABLISHED 2009 INTERNATIONAL ENERGY CONSERVATION CODE

 

S.B. 510 would have required new public facilities to be designed and constructed in compliance with the International Energy Conservation Code and the ANSI / ASHREA / IESNA Standard 90.1 - 2007.  The current IECC version is 2003.  CAWV members provided input on what impact the 2009 version will have on construction costs, on contractors preparing bids, and on contractors performing the construction contract.  CAWV contractor and architect members stated it appears that contractors would not see much change in bidding a project.  The architect and/or engineer would prepare plans and documents based on the 2009 code and contractors would price their bid accordingly. It also appeared there would be no additional administrative or hidden costs in constructing the project.

 

S.B. 510 was developed in lieu of  legislation advanced this year that would have required public buildings over 50,000 square feet to meet U.S. Green Building Council’s LEED Silver Certification. The bill will return next session.

 

H.B. 3136 WOULD HAVE REQUIRED SEPARATE PRIME BID ON CONTRACTS OVER $500,000

 

H.B. 3136 was a bill that would have required all public building contracts over $500,000 to have multiple prime contracts.  In speaking with one of the sponsors he stated more West Virginia contractors would have an opportunity to bid on public projects.  He also noted the School Building Authority of West Virginia has used multiple prime contracts for years.  The CAWV responded by saying the SBA uses multiple prime contracts on large projects and that it is not mandated.  The process is used when it is prudent to do so.  The CAWV also noted the SBA has had much experience in managing multiple prime contracts but many state agencies, counties and cities don’t do many construction projects and don’t have much construction experience. 

 

SENATE T&I TRIED TO DEDICATE SURPLUSES TO STATE ROAD FUND

 

The Senate Transportation and Infrastructure Committee passed out S.B. 395.  The bill dedicated surplus general revenue funds to the State Road Fund.  Currently, when there is a surplus of funds at the end of the state’s fiscal year, fifty percent goes into the Rainy Day Fund.  The current statute says the Rainy Day Fund is fully funded when it exceeds ten percent of the total appropriations from the “state fund, general revenue, for the fiscal year just ended.”  It is estimated the Rainy Day Fund could be fully funded this year.  S.B. 395 provided that future surpluses go into the road fund. 

 

Sen. Robert Plymale, D-Wayne, told committee members he wouldn’t have a problem with a transfer on a short term basis but thinks there needs to be a comprehensive plan for the State Road Fund.   Sen. Bob Beach, chairman of Senate T & I Committee, said in committee that “I don’t see a comprehensive plan and people of West Virginia are tired of doing nothing.  We cannot respond in a do-nothing manner.”

 

H.B. 2144 WOULD HAVE SET MANDATORY LIQUIDATED DAMAGES

 

H.B. 2144  would have required a mandatory penalty for failure to complete a public works project by the stated completion date.  Under the bill, liquidated damages for these projects will not be less than $1,000 per day. The bill also precluded change orders that exceed 20 percent, either in an increase to the original contract price or to an extension of time.  Contractors could have received extensions only in the event of an unforeseeable emergency, for changes made by the public agency, or because of “fortuitous existence of extreme inclement weather conditions.”

 

RECYCLABLE MATERIALS MANDATE FOR USE IN ROAD WORK DOES NOT PASS

 

The WV Division of Highways “shall require the use of recycled material, such as old pavements, concrete and used tires in the construction, reconstruction, repair and maintenance of state road and highways when those materials are available.”  H.B. 2343 added this language to the current powers, duties and responsibilities of the WVDOH commissioner.  The bill did not stipulate how and when recyclable materials will be used or what penalties there are for not using them.

 

SCHOOL FACILITIES LEASE-PURCHASE BILL INTRODUCED AGAIN

 

H.B. 2139 allowed a county board of education to enter into a lease-purchase agreement for land, buildings and capital improvements and allowed the School Building Authority to provide one-time grants to a county board of education for these same purposes.  There has been a lease-purchase bill introduced the past two sessions of the legislature.  The CAWV has expressed concerns whether boards of education, when using public, taxpayer dollars, can enter into a lease agreement with a private developer without following competitive bidding construction requirements.

 

H.B. 2545 AND S.B. 204 REQUIRED WORKERS TO COMPLETE OSHA 10-HOUR COURSE PRIOR TO STARTING WORK

 

Bills that generated a lot of discussion were H.B. 2545 and S.B. 204, which would have required every worker on public works projects over $1,000 to complete the OSHA 10-hour safety program prior to starting work, and mandated that workers carry a card showing successful completion of the program. The bills would have also required 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 have assessed a civil penalty of up to $3,000, and, an employer would be assessed a civil penalty of $500 per employee for each day of noncompliance.  The House bill passed out of  the Committee on Energy, Industry and Labor, Economic Development and Small Business but was defeated in House Government Organization.

 

BILL TO ALLOW USE OF REVERSE AUCTION FOR COMMODITIES PURCHASED BY STATE DOES NOT PASS

 

S.B. 240 would have allowed the Director of Purchasing to conduct reverse auctions to purchase commodities.  This bill 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 prohibited the use of reverse auction for the procurement of construction and design services.  However, construction materials such as aggregates, asphalt, lumber, etc. which are bid annually and semi-annually through the Purchasing Division would have probably fallen under the purview of this bill. The bill passed the Senate Government Organization Committee but did not make it through Finance.

 

BILL REQUIRED SUBMITTING SUB LIST WITHIN TWO HOURS

 

S.B.203  required contractors to submit a list of their subcontractors within two hours of a bid opening to the contracting agency or risk being declared irregular.  Currently, the School Building Authority of WV is the only agency that has such a policy. The requirement is appearing on select projects bid through the state. S.B  203 would have required all public agencies to mandate this policy.  Building contractors are used to having the two-hour requirement in the bidding documents. Highway contractors have noted that, during the construction season, they could bid anywhere between 25 and 50 jobs in one highway letting, placing a hardship in getting in a sub list within the allotted time.