In This Issue
Legislative Session Completed: Budget Passed
Farewell Tim Armstead
Many thanks to members involved with legislative process
Bills that did not pass
LB 2018–08 March 13, 2018
The West Virginia Legislative Website reports 260 bills completed the legislative process during the 2018 session which ended March 10. For the first time in many years, the CAWV did not have a lot of major pieces of legislation it was proposing. However, a number of bills were introduced or amended that have an impact on CAWV members or the construction industry.
There were 129 bills originating in the WV Senate and 131 in the WV House. Of those bills, 31 have been signed by Governor Jim Justice, while others await his signature. As of this point, no bills have been vetoed by the Governor. See the link at the bottom of this bulletin to view a complete list of bills passed this session.
For the first time in 36 years, the Legislature passed the budget bill Saturday before the end of the 60-day regular session, avoiding the traditional extended session to complete work on the state spending plan. For more than 30 years, the Legislature has had to go into an extended session in order to pass a budget, including last year when the session extended into June.
Early passage of the bill, which appropriates $4.38 billion of tax revenue for the 2018-19 budget year, is in sharp contrast to the lengthy budget impasses of the past two years. A combination of severe revenue shortfalls and reluctance of legislative leadership to raise taxes resulted in the Legislature failing to pass the 2016-17 and 2017-18 state budgets until mid-June each year. It wasn’t until June 2017 that legislators finally approved a $135 million highway funding package.
This year’s budget, which Gov. Jim Justice said in a tweet he would sign as soon as it hits his desk, goes into effect July 1. It includes $107 million to fund 5 percent pay raises for teachers, school service personnel and other state employees — resulting from a teacher strike that closed state schools for nine days — and $21 million to freeze Public Employees Insurance Agency premiums and benefits at current levels for the coming year. It balances the budget primarily by cutting out more than $80 million of funding increases sought by Justice to promote economic development and tourism and make repairs to state buildings — after legislative leaders refused to budget a revenue increase of $58 million Justice projected for the year. It also takes away the State Road Fund’s general fund transfer of $12.5 million. It also relies on about $150 million of one-time funds, including more than $100 million of unspent Medicaid funds carried over from the 2017-18 budget year.
TIM ARMSTEAD BIDS FAREWELL AS SPEAKER
House Speaker Tim Armstead will leave the House of Delegates at the end of the year, opening the door for a leadership race within the House Republican Caucus. Armstead made history in 2015 when he was elected as the first Republican to serve as Speaker of the House since 1930. Prior to being elected as Speaker, Armstead led the House Republican caucus for eight years, being chosen by his peers to serve as Minority Leader from 2007 - 2014. When the Republican Party won a majority of House seats following the 2014 Elections, his peers elevated him to the top post in the House of Delegates. The CAWV thanks the Speaker for his service and wishes him well in his future endeavors.
CAWV PRESIDENT THANKS MEMBERS FOR THEIR LEGISLATIVE INVOLVEMENT
Below are bills that were addressed by the CAWV during this year’s legislative session, both positively and negatively. “Many members spent much time contacting and working with their legislators on issues that directly affected our industry,” CAWV President Scott Pierson stated. “The association’s strength is through member involvement,” the president noted. “I thank everyone who helped during this session.”
BILLS OF INTEREST TO CAWV PASSED THIS SESSION OF THE WV LEGISLATURE
SB 282 EXEMPTS SCS FLOOD WORK FROM STATE PURCHASING OVERSIGHT
SB 282 removes the State Conservation Committee and the Conservation Agency from the oversight of the Purchasing Division for all contracts related to flood response and recovery contracts and to exempt all contracts with the United States Geological Survey. The 2016 floods that devastated many parts of West Virginia required contractors getting on site immediately to mitigate emergency situations and begin stream and other repairs.
SB 283 MAKES NUMEROUS CHANGES TO STATE PURCHASING PROCEDURES
SB 283, a governor’s bill, modifies the procurement by state agencies. It is the byproduct of a few years of review of the state Purchasing Division’s rules. The bill includes many items, including: Establishes open-ended repair and maintenance contracts instead of having to bid each project separately; modifies the use of alternates to five and requires that they be taken in order; modifying criteria to be considered in best value procurement awards; eliminating sole source procurement; establishing direct award procurement requirements; establishing prequalification agreements and their requirements and procedures; authorizing agency-delegated prequalification bidding and its procedure; increasing certain cost limits from $50,000 to $1 million; authorizing awarding contracts without competitive bidding if certain requirements are met; eliminating master contracts and direct ordering process; expanding the scope of those who may be debarred; eliminating preferences for resident vendors, vendors employing state residents, and veteran residents; permitting an architectural or engineering firm to be selected without bidding if certain conditions exist; increasing certain contract limits from $100,000 to $1 million for purposes of disclosure; modifying provisions requiring disclosure of interested parties; requiring certain reporting; removing preference requirements for higher education; and authorizing rulemaking.
On Saturday, an amendment was added to restore the resident vendor preference for purchases of motor vehicles, construction, maintenance, equipment and machinery used in highway and other infrastructure projects. The bill also states the Division of Highways may procure the services of architectural and engineering firms under the provisions of this section in an amount not to exceed $750,000 for the services per project.
Since this bill covers so many areas, the CAWV will publish a complete synopsis of the bill in future CAWV Newsletters.
SB 438 PROVIDES $80 MILLION FOR STATE PARK IMPROVEMENTS
SB 438 authorizes $5.9 million annually from excess lottery funds for the issuance of bonds to fund improvements at state parks. The bill directs the Economic Development Authority to issue up to $80 million in revenue bonds to pay for all or a portion of the cost of constructing, equipping, improving, or maintaining capital improvement projects at state parks around the state. This section is known as the State Parks Lottery Revenue Debt Service Fund.
SB 445 HELPS WVDOH ACCELERATE CONSTRUCTION THROUGH UTILITY RELOCATION ACCOMMODATION
Passage of the Roads to Prosperity bond amendment will accelerate highway construction projects. Relocating utilities along WVDOH right-of-way will be accelerated even though utility companies have not factored this into their operations. To help facilitate and advance projects, SB 445 was developed. The bill states: Whenever the Commissioner of Highways determines that any utility facility located upon, across, above, or under any portion of a state highway needs to be relocated in order to accommodate a highway project funded, in whole or in part, with proceeds of bonds or notes issued by the division, commissioner, West Virginia Parkways Authority, or the State of West Virginia on or after January 1, 2018, and on or before July 1, 2021, the commissioner shall notify the utility owning or operating the facility, which shall relocate the facility in accordance with this article and in accordance with the cost-sharing provisions of this section. The utility shall bear 85 percent of any such relocation costs, and the Division of Highways shall bear 15 percent of any such relocation costs. The division’s share shall be paid out of the State Road Fund or paid with other eligible funds, and shall be considered a cost of the highway project.
SB 506 DEREGULATES HVAC CERTIFICATION
The purpose of SB 506 is to deregulate persons who perform work on heating, ventilating and cooling systems and fire dampers. The bill provides for a residential HVAC license as well as allowing 2,000 hours of residential work in lieu of testing.
SB 561 INCREASES CONTRACT AMOUNT BEFORE BONDS REQUIRED ON SCHOOL REPAIR PROJECTS
SB 561 increases the minimum contract price that requires the execution of a bond with respect to the building or repairing of school property from $100 to $25,000. The CAWV sought the change when certain county boards of education were requiring performance bonds on any repair work over $100, which was current law prior to passage of SB 561. The paperwork and cost of the bond sometimes exceed the value of the work performed.
SB 631 REVISES ONE-CALL SYSTEM
SB 631 updates West Virginia’s one-call system to bring it in compliance with federal pipeline safety requirements. Had the state not updated its one-call system, the federal agency could have assumed control and levied thousands of dollars in fines on operators of underground utilities and excavators. SB 631 creates a 10-member Underground Facilities Damage Prevention Board in which the CAWV will be able to appoint a construction representative. The board shall have the power and authority to investigate damage to underground facilities caused by an excavator. The board may consult with the Public Service Commission as needed regarding investigation of damages to underground facilities under its jurisdiction. The commission shall collect from the board any expenses incurred during the consultation. The board shall furnish to the commission at least annually electronic copies of all reports of investigations and enforcement activities conducted by or on behalf of the board.
Any person who violates this article by failure to notify the one-call system, or who violates the rules proposed or promulgated under this article, shall be subject to civil penalty as follows:
1. For a first violation, the violator shall complete a course of training concerning compliance with this article as determined by the board;
2. For a second violation occurring within a five-year period, the violator shall complete a course of training concerning compliance with this article as determined by the board or pay a civil penalty in an amount set by the board, not to exceed $500 per incident, or both;
3. For a third or subsequent violation occurring within a five-year period, the violator shall pay a civil penalty in an amount set by the board, not to exceed $2,500 per incident; and
4. Not with standing this section, if any violation was the result of gross negligence or willful or wanton misconduct as determined by the board, the board shall require the violator to complete a course of training concerning compliance with this article as determined by the board and pay a civil penalty not to exceed $5,000 per incident.
If the enforcement was taken over by the feds, the violations could have resulted in thousands of dollars in fines. Contractors who call before excavating will not be subject to fines or violations. Also, this bill does not change the current statute as it relates to who’s liable for damage to an underground facility. If underground lines are not marked properly, contractors are not responsible for damaging underground facilities.
HB 2890 ESTABLISHES LIBRARY FACILITIES IMPROVEMENT FUND
HB 2890 establishes a Library Facilities Improvement Fund that will serve to support library facilities construction, maintenance and improvement projects; and set forth general structure of fund and distribution of funds. Monies will come from:
1. All appropriations provided by the Legislature to support library facilities improvements;
2. Any moneys available from external sources;
3. Repayment of loans made by the West Virginia Library Commission pursuant to this section; and
4. All interest and other income earned from investment of moneys in the fund.
HB 2983 GIVES PRIORITY TO ROADWAYS PRONE TO FLOODING
HB 2983 requires the Division of Highways to grant priority to roadway construction, reconstruction and maintenance for roadways prone to recurring floods that hinder ingress and egress to and from residential areas, schools and downtown districts, and that hinder access by emergency response vehicles. This bill is in response to the 2016 flooding in West Virginia which wiped out numerous roads and bridges around the state.
HB 4157 ELIMINATES REFUNDABLE SALES TAX EXEMPTION FOR ROAD CONSTRUCTION PROJECTS
HB 4157 eliminates the refundable exemption for road construction contractors. The bill prohibits the transfer of revenues collected from the state’s consumers sales and service tax and the state’s use tax to the State Road Fund. Under the current law that the CAWV was successful in passing in 2006, contractors pay the state’s 6% CST on material included in a highway project. At the end of the fiscal year, the WVDOH and State Tax Department estimate how much CST was paid by contractors. This amount – usually between $10 and $12 million annually – is then transferred from the State’s General Fund to the State Road Fund. This was done to help shore up the WVDOH’s financial problems. There was discussion after last year’s highway funding bills being passed to eliminate the annual transfer.
Given the WVDOH’s continued need for funding, Governor Justice introduced legislation to make permanent a transfer of $12.5 million to the State Road Fund with any additional CST expected by the increase in additional highway and bridge work this year will go into the state’s general fund to help balance the state’s budget. To help pay for the teacher and public employee pay raise, HB 4157 eliminates the $12.5 million general fund transfer.
HB 4166 ESTABLISHES FACILITIES IMPROVEMENT FUND FOR AG COMMISSION
HB 4166 establishes a special revenue fund for the funding of capital improvements to the Department of Agriculture's facilities. Expenditures from the fund shall be used exclusively by the Commissioner of Agriculture for the purpose of funding construction and capital improvements to facilities owned or occupied by the Department of Agriculture.
HB 4268 CO-TENANCY BILL SIGNED BY GOVERNOR
HB 4268 creates the Co-tenancy Modernization and Majority Protection Act. It has already been signed by Governor Justice. The bill provides much-needed updates to the state's co-tenancy laws. HB 4268 will allow development of a piece of property if 75% of the property's ownership consents. Those who object or who cannot be located will be provided proper compensation. The legislation will move West Virginia's co-tenancy laws more in-line with other states.
HB 4628 Workers’ Comp Old Fund Debt Surcharge to terminate at Year-End
HB 4628 will provide employers relief in their workers’ comp premiums with the passage of this bill. It will terminate the nine percent (9%) surcharge on workers comp insurance premiums which are directed towards the Workers Compensation Old Fund Debt, which was created back in 2005 when the state’s workers comp system was privatized. Now that the Old Fund Debt is actuarily funded to pay all future claims, HB 4628 provides that this surcharge will be eliminated at year end (December 31, 2018).
BILLS THAT DID NOT PASS THIS LEGISLATIVE SESSION
A major initiative was elimination of the state’s inventory tax which developers, manufacturers, state and local chambers of commerce and the WV Commerce Department said is an impediment in attracting companies to locate facilities in West Virginia. Gov. Jim Justice introduced legislation that would have allowed West Virginians to vote on a constitutional amendment to eliminate the tax. The tax generates about $140 million annually with most of the revenue dedicated to counties and boards of education. The resolution would have phased out the tax over seven years by taking $20 million from the state’s general fund and given to counties and boards of education the first year, $40 million the second, $60 million the third, etc. When the teachers and public employee pay raise went from 2 percent to 5 percent, it became almost impossible to look at reducing state revenues by the $140 million required by eliminating the inventory tax. Discussions on the resolution came to a halt.
Other bills of interest to the CAWV that did not pass this session include the following:
SB 314 – 5G A/E SELECTION PROCESS
SB 314 was a bill was to modify the procedure certain public agencies must take in order to contract for certain architectural and engineering services. The bill required joint discussions with prospective architectural or engineering firms in certain situations. The bill permitted contract proposals with a fee for service from the firms. The bill replaced the single entity negotiations with a competitive low bid process. The bill allowed for the public agency to reject all proposed contracts and seek proposals from additional firms. SB 314 would have replaced 5G in WV Code and allowed a/e’s to be selected on a cost basis. The bill did not advance past the committee stage.
SB 474 – JOBS ACTS INFO PUBLIC RECORD
SB 474 stated, “Any document that includes records of actual wages paid to employees may not be disclosed by the Division of Labor or a public authority to any other entity or person. Any such document and any information contained therein shall be considered confidential and proprietary and may not be considered a public record.” The purpose of the bill was to provide that any document submitted or filed pursuant to the West Virginia Jobs Act that includes records of actual wages paid to employees or information contained therein shall be considered confidential and proprietary and may not be considered a public record. The West Virginia Press Association worked against the bill, saying the public had a right to this information to make sure out of state contractors coming to West Virginia to bid on highway projects due to the passage of the Roads to Prosperity bond amendment would be on a level playing field with West Virginia construction companies. The bill passed the Senate but not the House.
SB 558 – CHANGING WEST VIRGINIA CRANE OPERATOR STATUTE
SB 558 would have permitted crane operators be certified by additional nationally recognized accredited agencies. The bill changed the written exam requirements for Class A and Class B certifications. The bill passed the Senate but not the House.
HB 4228 – BUY AMERICAN ACT
HB 4228 would have required available materials, supplies, equipment and other items purchased by the state and its agencies to be made in the United States. “Buy American” legislation was debated heavily for a number of years but not recently. The bill was never brought up in committee.
A list of all bills passed this session is available by clicking this link. To see the final version of the bill, click on “Enrolled Version” or contact the CAWV and a copy will be sent to you.