AGCVA Quarterly Legislative Update: August 2022

AGCVA has another quarterly update to cover the latest legislative and regulatory developments in Virginia, including:

• The General Assembly reaches an agreement on a biennial budget
• Protections against wage theft are now extended to all contractors
• Legislative & regulatory workgroups
• Pay-if-paid legislation
• Board for Contractors
• Maximize AGCVA’s advocacy efforts by signing up for AGCVA Advocacy Alerts & donating to the AGCVA PAC

Lobbyist Insights

Kyler Hedrick, Policy Manager

A Budgetary Resolution

After months of debate that began earlier this winter, the General Assembly officially came to an agreement on a two-year budget. Upon Governor Youngkin’s signature, the new budget went into effect on July 1.

The biennial budget incorporated several of the Governor’s first-year priorities, including the elimination of the state grocery tax and a raise in the standard deduction for single and joint tax filers.

Among the Governor’s legislative priorities, a proposal to temporarily suspend the state gasoline tax was not included in the budget. Introduced amid rising fuel prices, the proposal drew concerns over cutting transportation funding originally allocated to improve Virginia’s roads.

While gas prices have dipped in recent weeks, inflation continues to be a major challenge for the commercial construction industry. AGC of America’s Construction Inflation Alert provides updates on material costs and supply chain issues, along with recommendations on how your business can navigate through these challenges. You can view the latest inflation alert here.

AGCVA’s Advocacy Efforts: The Road Ahead

While the General Assembly may have adjourned for the year, AGCVA’s advocacy efforts are in full swing, which include: a legislative victory that became law on wage theft, a legislative workgroup that is currently evaluating pay-if-paid legislation, and a regulatory workgroup that convenes next month to review regulations that directly impact the contractor community.

Wage Theft Protections Now in Effect

Two years ago, legislation passed the General Assembly that placed the burden of policing wage theft on general contractors, creating undue friction in the general contractor-subcontractor relationship while not specifically targeting where the infraction occurs. In 2021, limited protections against wage theft were provided to general contractors, but the statute still left subcontractors vulnerable.

This year, AGCVA supported legislation (SB 538/HB 889), sponsored by Senator Peake and Delegate Kilgore, to extend protections against wage theft to all contractors regardless of tier. The statute now allows all contractors to obtain written certifications ensuring proper payment by its subcontractors to all workers as a protection against accusations of wage theft. Despite some early pushback in a Senate subcommittee, the bill ultimately passed the General Assembly with overwhelming support and became law on July 1, solidifying a legislative victory for all contractors in Virginia.

The wage theft legislation joins many other bills that passed the General Assembly this year that have become law, but there are also several bills that AGCVA tracked that either have a delayed enactment clause or must be reenacted in 2023 to take effect. For example, legislation that prohibits pay-if-paid provisions from construction contracts will not go into effect until January 1, 2023 (read on for a more detailed update).

If you are interested in reading more about new laws in effect that go beyond the commercial construction industry, the Division of Legislative Services’ In Due Course has you covered. Click here to access the document.

Workgroups

Pay-if-Paid

This year, legislation (SB 550) was proposed that prohibits pay-if-paid provisions from construction contracts. AGCVA expressed concerns with the legislation as written because it would substantially undermine the freedom to contract and place the entire financial risk of a construction project on a general contractor.

While a compromise could not be reached within the limited timeframe of the legislative session, AGCVA promised to continue working toward an improved solution that addresses as many concerns as possible for both general contractors and specialty contractors.

Although the legislation passed, the General Assembly decided to delay the bill’s enactment and refer it to the Public Body Procurement Workgroup, managed by the Department of General Services, for further study. These moves afforded stakeholders additional time to offer input.

As a stakeholder invited to the workgroup, AGCVA convened its own member workgroup consisting of general contractors, specialty contractors, sureties, and legal counsel to reach a consensus on suggested improvements to the issue.

The group came up with three substantive recommendations:

1. Promote a contractor’s ability to fully vet an owner’s finances or provide mechanisms to guarantee financial solvency of owners.
2. Resolve inconsistencies with payment language in the bill language.
3. Streamline Virginia’s mechanic’s lien statute to become a more contractor-friendly recourse for payment.

The recommendations were then vetted by AGCVA’s Legislative Committee before being submitted to the DGS workgroup for consideration. You can view AGCVA’s full written comments here.

This month, AGCVA’s advocacy team attended the workgroup meeting to provide public comment. The workgroup has additional meetings scheduled for this summer to begin formulating recommendations to the General Assembly, which are due by December 1.

Board for Contractors

Under Governor Youngkin’s Executive Directive One, the Virginia Board for Contractors will convene a workgroup in mid-September to conduct a complete review of its regulations. This is the first comprehensive regulatory review for the Board for Contractors in over ten years, marking a significant opportunity for stakeholders to weigh in on important requirements related to contractors’ license requirements and standards of conduct.

AGCVA has been invited to the workgroup and looks forward to providing input that reduces unnecessary burdens on commercial contractors, streamlines compliance requirements, and preserves critical standards to protect all Virginians. 

More Ways to Leverage Your AGCVA Membership

Don’t forget to sign up for AGCVA Advocacy Alerts to get important updates related to legislative and regulatory changes in Virginia. These alerts will enable you to communicate with your elected officials easily and effectively and weigh in on important proposals that could impact your business. These action alerts are important on a year-round basis.

The AGCVA PAC is another critical component of AGCVA’s advocacy efforts that ensures the voice of Virginia’s commercial construction industry remains strong in Richmond. Donations can be personal or from your company.

If you have any questions or would like to know how you can further harness your membership to support AGCVA’s advocacy efforts, feel free to write Kyler Hedrick at kyler@agcva.org or call him at (804) 364-5504 x233.

AGCVA

Kyler Hedrick, Policy Manager

Email Kyler | 804-364-5504 x233