LB 2009 - 6
March 23, 2009
With a little over three weeks left in the 2009 regular session of the West Virginia Legislature, legislators are working to get bills out of committees and to the floor for debate. Today is the last day to introduce bills in both houses. There will be a lot of activity this week since bills must conclude committee action by Sunday, March 29, to ensure that the bills can be read three separate days. Bills that don’t meet the deadline will require the rules to be suspended which calls for a four-fifths vote of the members present. Bills that are contentious usually don’t get enough votes to have the rules suspended so lawmakers will be pushing to get bills through the committee process and to the floor for a vote. April 1 is the last day for a bill to pass in its house of origin in order to be considered in the final weeks of the session.
Governor Joe Manchin gave lawmakers a wake-up call Thursday on the state’s economy when he upped his budget cuts to nearly $200 million. The governor had warned lawmakers earlier this session that they would have to shave about 2 percent from the budget proposed last month. The reduced estimate he sent the legislature’s top leaders Thursday show that they must pare down general revenue and lottery-supported spending by about 4.6 percent to ensure a balanced budget.
The down economy is having a negative effect on the state’s unemployment compensation fund. The Senate Judiciary Committee is considering altering the governor’s unemployment tax bill that would temporarily increase the wage base from $8,000 to $12,000, effective July 1, 2009, which would equate to about $100 million increase on employers over a year’s time. Included with this bulletin is information supplied by the West Virginia Chamber of Commerce on last week’s unemployment comp discussions and the impact on the employer community.
S.B. 680 FREEZES WHOLESALE TAX FOR 2010
The wholesale gas tax was frozen twice – in 2006 and again in 2009. The governor suspended the increase in 2006 because gas prices hiked considerably due to Hurricanes Rita and Katrina. The State Road Fund lost about $63 million in 2006 due to the freeze. When gas went over $4 a gallon, the governor in June 2008 proposed another freeze for 2009. The wholesale tax would have increased 3.7 cents a gallon, raising the wholesale tax from 11.7 cents to 15.4 cents a gallon. That freeze cost the State Road Fund nearly $52 million.
With the drop in the price of gasoline, there is a good chance that the 11.7 cents per gallon wholesale tax will decline in 2010. Calculated from average wholesale prices posted from July through October, the variable component takes effect each January 1 for the following year. It is anticipated the tax could drop three to five cents. The wholesale tax generates approximately $14 million per penny, so the freeze could cost the Division of Highways between $40 million and $70 million.
The governor has decided not to introduce legislation to freeze the wholesale tax at 11.7 cents for 2010. Senator Bob Plymale, D- Wayne, has introduced S.B. 680. It is referred to the Senate Finance Committee. A number of legislators have indicated they would support the freeze if the governor proposed it. The question is whether they will support it absent the governor’s sponsorship.
HOUSE JUDICIARY PASSES DRUG TESTING MODIFICATIONS
The House Judiciary Committee Thursday passed H.B. 2771, a bill to amend the state’s drug and alcohol testing program for contractors working on public works construction projects. The bill expands the drug and alcohol testing program to projects performed by a political subdivision of the state – cities, counties, public service districts and other governmental entities. The bill addresses a number of issues sought by the CAWV, including requiring contractors to have two programs, one for CDL purposes and another for all other employees. It also allows contractors to accept an employee’s drug test if it has been performed in the previous twelve months and gives employers the ability to hire people on a temporary basis. As the bill currently stands, employers who have three violations could be barred from bidding work for one year, even though the third violation may be twenty years after the second violation. H.B. 2771 also wipes an employer’s record clean if there are no violations within the preceding five years.
The bill also requires contractors to report to the awarding agency at the end of the project the following:
Indication employees have received training on how to detecting drug and alcohol abuse, the name of the testing laboratory, average number of employees on the particular project, number of positive and negative tests, and random tests performed.
CRANE OPERATOR CERTIFICATION BILL BEING REDRAFTED
H.B. 3076 modifies the current crane operators certification requirements. After much discussions last week, the bill is being redrafted to add tower cranes to the list of operators that must be certified. Other portions that were included in the bill will probably be deleted from the committee substitute that will be on the House Judiciary Committee’s agenda this week.
H.B 2923 REQUIRES SUBMITTING SUB LIST WITHIN TWO HOURS
H.B. 2923 requires contractors to submit a list of their subcontractors within two hours of the bid opening to the contracting agency or risk being declared irregular. While the bill only pertains to the low bidder, all bidders may be required to submit their subs list. On projects where there are alternates, the low bidder may not be apparent, based on which alternates are selected. In order for contractors’ bids to be responsive, all bidders who may ultimately be declared the low, responsive bidder will have to submit their sub list within two hours. Currently, the School Building Authority of WV is the only agency that has such a policy. H.B. 2923 would require all public agencies to mandate this policy. The CAWV has sent a letter to all members of the House Energy, Industry and Labor, Economic Development and Small Business Committee opposing the bill. The CAWV wrote, “Political subdivisions and other agencies will find this unworkable and burdensome. The WV Division of Highways, during the construction season, could bid anywhere between 25 and 50 jobs in one highway letting. It would be nearly impossible for agencies and contractors to administer this burdensome regulation.” The bill has yet to be placed on the committee’s agenda.
BILL PROVIDES FOR LEASE-PURCHASE OF SCHOOL FACILITIES
Under S.B. 274, county boards of education could have a private developer build a school and the county would lease it on an annual basis for twenty years. Counties see this as a way to preclude getting money up front to build a facility. Voters in Preston County and other counties have voted down recent school bond issues. The Board of the School Building Authority met March 16 and heard proposals from developers on what they can provide to a county board of education. SBA board members had a number of questions on how the financing would be handled. CAWV Building Division officers attended the meeting to determine how projects would be designed and constructed. The CAWV has met with Senators David Sypolt, R-Preston, and Bob Williams, D-Taylor, sponsors of the bill, to try to get a better understanding of how the lease-purchase would be administered. The bill is referred to the Senate Government Organization Committee with a second reference to Finance.
MANDATORY HEALTH BILL IN HOUSE JUDICIARY
H.B. 2478 has passed the House Health and Human Resources Committee and is now in House Judiciary. The bill requires contractors working on public improvement projects to show at least 80 percent of the employees working on the project are covered by a health insurance policy. The CAWV has opposed this legislation for a number of years. The CAWV task force on health insurance met numerous times on the proposed legislation to see how it could be implemented by contractors. The bill is unconstitutional because it preempts federal ERISA laws. It is also unworkable. Members who object to this bill should contact members of the House Judiciary Committee plus their individual delegates.
UPDATE ON UC PROPOSAL
(Below is a reprint of the March 20, 2009 WV Chamber of Commerce Legislative Report)
The Senate Judiciary Committee met Thursday, March 19, and considered a new version of an unemployment compensation “solvency” bill. While the new version aims to provide added funds to shore up the state’s jobless benefit program, its tax increase implications on employers are high during these tough economic times, and the latest bill contains many, but not all, of the needed reforms. Based on calculations done by the Chamber, the latest version would increase taxes on private-sector employers $100 million or more a year and would equate to an added cost of roughly $200 more per year for each worker. According to an overview provided by the committee’s counsel, here are the provisions in the new version:
• Imposition of a temporary wage base increase to $12,000 (effective July 1, 2009), which is a 50 percent increase over the current taxable wage base of $8,000. This equates to roughly a $70 million to $75 million increase on employers over a year’s time;
• This temporary wage base increase would remain in effect until the state’s UC fund balance is $220 million;
• Additional temporary assessments would be imposed if the UC fund balance drops below $180 million:
Assessment Rates: 0.075 percent on employee’s gross wages
0.25 percent on an employer’s gross wages
• Once it is determined that the state’s UC fund balance has returned to $220 million or higher, the permanent unemployment compensation taxable wage base would be set at $10,000. This scenario would impose a huge tax increase on employers and it will likely cause some employers to actually cut back on employment, according to employers who have contacted the Chamber. The version does contain several of the needed reforms that have been advocated by the West Virginia Chamber of Commerce, but one key reform item is missing—eliminating jobless benefits to those individuals who voluntarily go out on strike.
The bill was subject to extensive discussion during Thursday’s meeting of the Senate Judiciary Committee, and, as a result, the committee delayed further action on the bill until its next meeting.
Employers are strongly encouraged to share their views and concerns with their local legislators. Now is the time to tell your elected officials whether or not you support or oppose this tax increase.
EMPLOYMENT BILLS ABOUND
There are a number of bills affecting human resources. H.B. 2628 requires 20 consecutive minutes for meal breaks and 15 minute rest periods for employees during each four hours of work. This bill does not protect already negotiated labor agreements. H.B. 2272, the flexible leave act, would allow the use of earned leave with pay for an illness in an employee’s immediate family. H.B. 3032 would give all employees the right to review and copy their respective personnel file. H.B. 2411 would require that workplace fatalities be reported to the West Virginia Division of Labor. The bill would mandate that all injuries and fatalities be reported to the Commissioner of Labor. The bill does not define how severe an injury has to be before it is reported. Failure to report this information is a misdemeanor offense. The bill does not provide any confidentially protection for the information submitted, and all information would be available by Freedom of Information Act requests to the commission. State Labor Commissioner David Mullins said this information would assist in targeting inspections and compliance.
E-Verification, H.B. 2871, would require all employers in West Virginia to verify legal employment status of workers by requiring employers to register with and utilize the electronic verification of work authorization program of the Illegal Immigration Reform and Immigration Responsibility Act of 1996. Workers’ compensation Permanent Total Disability (PTD) benefits would be extended to claimants for life under H.B. 2854. Resolutions related to the Employee Free Choice Act (EFCA) have been introduced in both houses of the West Virginia Legislature. A pro-EFCA (S.R. 28) was introduced in the Senate and referred to the Senate Judiciary Committee. An anti-EFCA resolution (H.R. 26) was introduced in the House by 21 delegates.
WEST VIRGINIA LEGISLATURE BILL INFORMATION
House and Senate bills can be accessed from the CAWV s Legislative home page at www.cawv.org/legislative.html. 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 email@example.com.
NOTE: TODAY, MARCH 23, IS THE LAST DAY TO INTRODUCE BILLS. THE HOUSE AND SENATE WILL HOLD SPLIT SESSIONS TO GIVE LAWMAKERS ANOTHER OPPORTUNITY TO GET THEIR BILLS OUT OF LEGISLATIVE DRAFTING. THERE WILL BE ADDITIONAL BILLS INTRODUCED TODAY THAT ARE NOT INCLUDED WITH THIS LEGISLATIVE BULLETIN. ADDITIONAL BILLS OF INTEREST TO THE CAWV WILL BE FORWARDED TO MEMBERS.
HB 3178 Del. Michael, Hartman, Ross, Morgan, Armstead, Kominar, Varner, Williams and Azinger-Asbestos Claims Transparency Act (FN)-To Judiciary
HB 3243 Del. Duke-Relating to consumers sales and service tax on motor vehicles (FN)-To Finance
HB 3259 Del. Walter-Relating to compromise and settlement of workers’ compensation claims for permanent total disability-To Judiciary then Finance
HB 3276 Del. Boggs-Amending the professional surveyors act-To Government Organization
HB 3280 Del. M. Poling and Paxton-relating to higher education capital facilities-To Education then Finance-[Interim Bill]
HB 3287 Del. Fleischauer, Beach, Marshall and Shook-Requiring blasting contractors to notify the State Fire Marshal and local property owners before blasting-To Energy, Industry and Labor, Economic Development and Small Business then Judiciary
HB 3301 Del. Moye, Schoen, Campbell, Sumner, Caputo, D. Poling and Barker-Amending the Division of Labor rule verifying the legal employment status of workers-To Energy, Industry and Labor, Economic Development and Small Business then Judiciary
SB 388 Sen. Hall and White-Creating a new vehicle purchase tax credit-To Transportation and Infrastructure, then Finance
SB 620 Sen. McCabe. Palumbo, D. Facemire and Plymale-Revising Municipal Economic Opportunity Development District Act-To Economic Development then Finance
SB 622 Sen. Yost, Kessler, White, Laird and Edgell-Creating State Labor Relations Act-To Judiciary then Finance
SB 638 Sen. Plymale-Relating to higher education capital facilities (IB)-To Education then Finance
SB 663 Sen. Bowman-Authorizing Commissioner of Highways operate Market Street Bridge in Brooke County as toll bridge-To Transportation and Infrastructure then Finance
SB 666 Sen. McCabe and Guills-Relating to community enhancement districts-To Economic Opportunity Development District then Finance
SB 680 Sen. Plymale-Establishing 2010 calendar year average motor fuel wholesale price (FN)-To Finance
SB 698 Sen. McCabe and Browning-Authorizing certain regional water and wastewater authorities provide joint maintenance to participating agencies (FN)-To Government Organization then Finance
SB 699 Sen. Caruth-Relating to property apportioning percentage of fault in certain cases-To Judicial