2013 Legislative Session Wrap Up

April 18, 2013

 

 

The first session of the 81^th Legislature of West Virginia concluded at midnight on Saturday, April 13. A number of bills followed by the Contractors Association of West Virginia were deliberated on the last day of the 60-day session while others completed action earlier in the week.  A bill that generated a lot of concern among CAWV contractor, subcontractor and supplier members was S.B. 574, the West Virginia Buy American Act.  The bill, which passed the House of Delegates last year, was put into a Senate subcommittee and did not advance in this session. The bill would have required each construction contract made by a public agency to contain a provision that the iron, steel, manufactured goods, coal and timber used or supplied as construction materials be manufactured or produced in the United States.  The bill was patterned after the Buy American Provision that was included with American Recovery and Reinvestment Act (ARRA) projects.  H.B. 2354, mandating employees working on a public works project complete the OSHA 10-Hour course, passed the House Energy, Industry and Labor, Economic Development and Small Business Committee and the Senate Labor Committee.  The bill was defeated 11-12 in the House Government Organization Committee. 

 

Bills that did not pass this year include S.B. 191, Governor Tomblin’s bill to increase the balance in the Rainy Day Fund from 13 percent to 15 percent and then dedicate any additional revenues to the newly created WV Infrastructure Modernization and Development Special Revenue Fund.  These additional proceeds would have been dedicated to water, sewer and highway projects.  S.B. 167 would have created the West Virginia Futures Fund with any increased revenue received by the state from Marcellus Shale natural gas severances taxes which are 25 percent above the established baseline.  The principal and interest of the Future Fund could not have been used for 20 years in order to allow the fund to reach maximum accumulation.  The lead sponsor of the bill, Senate President Jeff Kessler, views this bill as a way to pay for needed infrastructure in the years to come.  The governor’s revisions to the state purchasing procedures did not pass.  Instead, the House proposed a resolution to study state purchasing laws.

 

The Legislature passed a total of 215 bills.  Two bills that died in the final minutes of the session required Gov. Earl Ray Tomblin to convene a special session April 17.  S.B. 125, permitting the Monongalia County Commission to levy a special district excise tax, was expected to pass but got bogged down in the political process in the last hours of the session.  The bill would have created the University Town Center District, a 1400-acre site for retail, Class A office space and light manufacturing.  The Tax Increment Financing (TIF) district is expected to house a new baseball field for WVU and will require a $25 million interchange off of I-79. The bill got bogged down when it was coupled with a magistrate pay bill that did not advance in the Senate. After meeting with House and Senate leadership a compromise was reached on both bills. The governor called a special session of the Legislature on Wednesday to review these and other bills.  The TIF bill and magistrate bill both completed legislation today.  The special session is expected to end Friday.

 

Legislators remain in town this week to work on a new state budget.  Both houses Wednesday passed the budget, which includes just more than $4 billion in general tax revenue. The governor ordered state agencies to submit proposed budgets last fall that included a 7.5 percent reduction in spending due to shrinking revenues because of decreases in coal production and the low price of natural gas.

 

Below is a synopsis of a few of the bills of interest to the contracting industry.  A complete list of bills passed in this session is available by clicking here.

 

CAWV PRESIDENT THANKS MEMBERS FOR THEIR PARTICIPATION

 

“Many members spent much time contacting and working with their legislators on issues that directly affected our industry,” said CAWV President Lee Snyder. “Members were active in the OSHA-10 Hour bill, Buy American bill, funding bills and other bills that were important to our association,” he said.  “I thank everyone who helped during this session.”

 

CAWV LEGISLATIVE NETWORK EFFECTIVE TOOL FOR CONTACTING LEGISLATORS

 

New this year, members were asked to send letters through the CAWV’s Legislative Action Center, powered by BIPAC. The system allowed the CAWV to streamline requests for members’ to contact their elected representatives on specific issues. The CAWV provided a letter template, and with just a few clicks, members were able to send a personalized letter or email.  BIPAC also provides a “Find Your Legislator” feature, election information and a refresher on government.

 

TRANSPORTATION FUNDING HOT TOPIC THROUGHOUT SESSION – ANTICIPATION GROWING FOR BRC RECOMMENDATIONS, SPECIAL SESSION

 

The 2013 legislative session began on a transportation theme as over 200 CAWV members and 40 West Virginians for Better Transportation coalition partners flooded the State Capitol and both the House of Delegate and Senate chambers on Thursday, February 14. The group wore reflective vests and carried signs with the message of “Roads = Jobs.” The event featured a press conference, attendance the House and Senate floor sessions, legislator meetings and a joint meeting of the House and Senate transportation committees.

 

Senate President Jeff Kessler (D-Marion), Senator Bob Beach (D-Monongalia) who chairs the Senate Transportation and Infrastructure Committee, Delegate Margaret Staggers (D-Fayette) who chairs the House Roads and Transportation Committee, AFL-CIO President Kenny Perdue and WV Chamber of Commerce Vice President Brenda Nichols Harper spoke to the crowd and media, kicking off the event. They were joined by Governor Earl Ray Tomblin’s Legislative Liason Jason Pizzatella, who is chairing the Blue Ribbon Commission on Highways, Senator Bob Plymale (D-Wayne) who also serves as director and CEO of the Rahall Transportation Institute, WVDOT Secretary Paul Mattox and past CAWV President Gene Thompson for the joint transportation committee meeting.

 

“We don’t gather together very often,” said CAWV President Gene Thompson. “But we are here to show that there is united support within the business community for a long-term solution for funding our roads, bridges and highways … and for a secure transportation funding source not only for maintenance of the existing infrastructure but also for new construction and expansion.”

 

The event was covered by a variety of news outlets, educating the public on the issue and laying the groundwork for legislators to explore funding options. The Governor’s Blue Ribbon Commission on Highways has spent the year developing and studying funding recommendations to make up a $1.3 billion shortfall in highway funding: $750 million to maintain the state’s existing transportation system and another $380 million to expand the system.  The Commission’s report, which is to contain specific legislative and funding proposals, is due to Governor Tomblin on May 1. The Governor has indicated that highway issues will be handled in a yet-to-be-announced special session expected later this year.

 

Legislators showed great interest in the Blue Ribbon Commission on Highways and its forthcoming recommendations throughout the session. Bills dealing with highway funding were repeatedly blocked based on legislator’s anticipation of the Commission’s report and  recommendations. H.B. 3163 would have eliminated tolls on the WV Turnpike in 2019, about a year after the bonds for it are paid off, and turned the road over to the Division of Highways in 2020.  S.B. 354, would have allowed study of a vehicle mile tax and GPS systems in vehicles as a means to increase highway funding. Both bills were defeated as they mirror the efforts of the Blue Ribbon Commission.

 

Bills that did pass which deal with highways include S.B. 158 – the Complete Streets Act, S.B. 185 – Relating to Tax Credits for Alternative-Fuel Vehicle Refueling Infrastructure, S.B. 190 – the Governor’s Public-Private Partnership rule change, S.B. 454 – Relating to Taxation of Alternative Motor Fuels, S.B. 524 – Supplementing, Amending, Decreasing and Increasing Appropriations From State Road Fund to DOT, and S.B. 553 – Relating to Highway Design-Build Program. Additional details on each can be found below. A number of bills that reduced the current gas tax never received consideration.

 

S.B. 158 – Complete Streets Act

The introduced version of the bill mandated WVDOH to design and build as part of a highway project accommodations for pedestrians, bicyclists and public transit.  The passed bill removes the mandates and encourages the division to consider these issues when constructing highways. 

 

S.B. 190 – The Public-Private Transportation Facilities Act

Introduced by Governor Tomblin, this bill modifies the statute on creating Public Private Partnerships (PPP) for transportation projects.  It changes the code to read that any PPP agreement proposed by the Secretary of Transportation must be approved “at least 30 days prior to execution” by the Legislature’s Joint Committee on Government and Finance. It removes the requirement that the full Legislature approve a PPP, which many believed hindered private investment in a PPP in West Virginia. 

 

The bill also amends language on how state roads funds can be used in a PPP. Current State Code limits the amount of money the WVDOH can put into a PPP to “four percent of the immediate preceding fiscal years’ average of the division’s construction contracts awarded under the competitive bid process.” This language, at the current percentage dollar amount, caps the amount the WVDOH can put into a private project at around $20 million annually. S.B. 190 eliminates the cap and the WVDOH will determine the amount of state dollars that would be dedicated to a PPP venture.

The current statute sunsets June 30, 2013. It is now June 30, 2017.

 

S.B. 553 – Relating to Highway Design-Build Program

S.B. 553 makes the pilot program for design-build for WV Division of Highways projects permanent.  It pretty much mirrors the existing statute on design-build. The amount of dollars available for design-build projects annually is $50 million and the dollars, if not spent, could be rolled over for three years, not to exceed $150 million. The bill allows projects receiving special funding above the regular federal core funding to use design-build but not be included in the expenditure limit.

 

COURTHOUSE FACILITIES IMPROVEMENT AUTHORITY BONDING BILL PASSES

 

S.B. 331 gives the Courthouse Facilities Improvement Authority bonding authority. This bill allows them to use their roughly $2 million in annual funding as debt service on bonds. It is expected that this bill will generate dollars for building improvements at courthouses throughout West Virginia.

 

72-HOUR FINAL WAGE PAYMENT TO DISCHARGED EMPLOYEES NOW NEXT PAY DAY

 

S.B. 355, introduced by Governor Tomblin, revises the state’s wage payment law. It did state that employers were required to pay a discharged employee’s wages in full within 72 hours of termination.  Due to the short time period, employers who violated the law – even by a few hours – had to pay liquidated damages equal to three times the amount of wages due, plus attorney’s fees.  Under the Governor’s bill, employers are now required to pay the wages due in full no later than the next regular pay day, or four business days, whichever comes first.

 

BILL SPEEDS UP GRANT AWARDS TO CHESAPEAKE BAY WATERSHED PROJECTS

 

In 2011, the WV Legislature added $6 million in lottery revenues 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 $246 million.  The state revenues cover about $180 million of the total costs.  S.B. 596, which was introduced by Governor Tomblin and passed the Legislature, allows the WV Water Development Authority to prorate the grants to the eligible projects in order to get the projects to construction quicker.  The bonds could not be sold until all the projects had been designed and bid so the state would know the exact costs of the projects.  This bill changes that process and projects could start construction sooner.  The projects funded as part of the Chesapeake Bay initiative are 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.

 

 

DESIGN-BUILD RULES FOR STATE PROJECTS ALTERED

 

H.B. 2652 revises the design-build rules for public building construction. The rule change was initiated by the West Virginia Design Build Board. The board stated that on a few design-build projects, the project owner, through its representative, opened the proposals in advance, giving the perception to the design-build teams that the Technical Review Committee had an opportunity to pre-decide which team’s design they liked best so they could score the teams accordingly. The bill now sets the requirement that the qualitative proposals remain sealed until the Technical Review Committee formed to review the proposals is assembled and ready to review and score the proposals.

 

SUBCONTRACTORS LIST DUE WITHIN ONE BUSINESS DAY FOR STATE BUILDING PROJECTS

 

H.B. 2716, makes permanent a pilot project started last year that requires contractors on state building contracts to submit a list of subcontractors within one business day. This bill applies to state projects – not county, municipal or other political subdivisions, or highway, water and sewer projects --- over $250,000. It requires the apparent low bidder to submit a list of all subcontractors who perform more than $25,000 within one business day of the opening of the bids for review prior to the awarding of a construction contract.  Failure to submit the list of subs within one business day shall result in disqualification of the bid.

 

The State Purchasing Division conducted the pilot project for the past year.  The CAWV Joint Architects Committee reviewed the program and CAWV members saw no problems with the requirement.  The School Building Authority has had a requirement for a number of years that the apparent low bidder on school projects submit a list of subs with two hours.  The Purchasing Division and industry believe the one day provision in H.B. 2716 has worked well. 

 

 

 

BILLS THAT DID NOT PASS

 

MEMBER INVOLVEMENT DEFEATED OSHA 10-HOUR COURSE REQUIREMENT

 

H.B. 2354 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. It would have 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 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 bill was referred to the Committee on Energy, Industry and Labor, Economic Development and Small Business then Government Organization. 

 

Many members 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 or 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 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.

 

The bill was defeated was defeated in the House Government Organization Committee by a vote of 11-12.

 

BILLS TO REQUIRE PAINTERS CERTIFICATION FOR HIGHWAY PROJECTS DO NOT PASS

 

H.B. 2601 and S.B. 332 would have required that all workers who paint state bridges have successfully completed The Society of Protective Coatings (SSPC) Coating Application Specialist (CAS) Program. 

 

BUY AMERICAN BILL INTRODUCED IN SENATE – DIES

 

S.B. 574 was introduced with 17 co-sponsors. It would have required the use of American manufactured goods in the construction, alteration or repair of publicly-financed construction projects.  The bill was altered from last year’s bill, but still contained much of the language that caused concern for the construction and design communities.  S.B. 574, as last year’s bill, would have required that manufactured goods used or supplied in the performance of the contract or subcontract to be manufactured in the United States.  The bill set the West Virginia Division of Labor as the agency in charge of implementing and administering the Buy American Provision (BAP), developing lists of products that meet the “made in America” guidelines, granting exemptions from the requirement, initiating debarment or suspension proceedings for persons who violate the BAP, and making recommendations in 2018 on how to revise the bill to increase the preference of domestically manufactured goods. 

 

A task force which studied the Buy American bill last year spent hours trying to determine how lists of approved products could be developed, and more importantly, updated, so that new products and materials could be included in government projects.  The task force was unable to develop a workable structure.   The bill contained a very expansive definition of manufactured goods.  All the manufacturing processes have to be done in this country, by itself hard to accomplish, but also a percentage of the components (and subcomponents) have to be made in America.  In the task force meetings, no one could agree on a minimum level domestic content should be based on - value or weight.  More leaned to dollar value but whether that value was 50 percent, 51 percent, 75 percent, 90 percent, or some other value, no one could determine.  S.B. 574 placed this responsibility on the WVDOL. 

 

A subcommittee of the Senate Government Organization Committee held a hearing on the bill. No action was taken to move the bill forward.

 

PURCHASING REFORM BILLS DO NOT PASS

 

S.B. 363 would have allowed the state Purchasing Division to utilize reverse auctions for the purchase of materials or supplies.  The bill originally used the term “commodities” which, under strict definition, could include construction.  The bill was amended to make it clear that reverse auctions cannot be used on a construction contract.  The bill, introduced by the Governor to address purchasing issues, did not pass. One bill that did pass is S.B. 564 which raises the amount from $10,000 to $25,000 before competitive bids are required.  The bill mostly deals with purchase of materials since most construction projects are above the $25,000 threshold. 

 

The House passed a resolution to create a task force that will study purchasing regulations throughout the year. The task force plans to analyze the American Bar Association's "Model Procurement Code" and may adopt purchasing reforms outlined in the document. The Governor has pledged to overhaul purchasing rules in West Virginia, despite defeat of the bills during this session. For more details, click here to read a WV Gazette article detailing purchasing issues and reform.

 

HOME BUILDER BONDING FAILS TO PASS

 

S.B. 588, introduced by Sen. Jack Yost, D-Brooke, and President Jeff Kessler, would have required home builders to provide a bond.  The bill also required a lender making a loan for residential construction service to issue joint payment and notice of payment to the contractor, property owner, any subcontractor who provides services, and any supplier of materials used in construction.   The home building industry noted the business model for home builders may not support obtaining bonds which would result in less competition or higher construction costs. 

 

PENDLETON COUNTY CASINO BILL DEFEATED

 

S.B. 492 would have allowed another casino in West Virginia. The casino would be in Pendleton County and the facility’s backers project a $60 million investment that would create 300 to 400 jobs. A land development company is working with a casino company, Full House, to develop a resort on Fisher Mountain near Franklin. The plans included housing, a resort and casino. The bill, had it passed, would have allowed residents in the county to vote for or against the casino.