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Session Priorities
Wage Theft (SB 538/HB 889, Sen. Peake/Del. Kilgore)
Two years ago, legislation passed in the General Assembly that placed the burden of policing wage theft entirely on general contractors, which created undue friction between general contractors and subcontractors. While the law was slightly improved last year, legislation (SB 538/HB 889) was filed this year at the request of AGCVA that would 1) strengthen and extend protections against wage theft to both general contractors and subcontractors by allowing them to obtain written certifications ensuring payment and 2) expedite the process of identifying the bad actor.
The original language included additional protections for contractors acting in good faith from costly and unnecessary litigation. Specifically, the written certifications would have been considered a valid defense in a court of law, thereby expediting the process via summary judgment.
While the bill was slightly diluted during the legislative process by removing the “valid defense” language, the bill still extended protections against wage theft to all subcontractors. Moreover, the requirement to obtain written certifications will hopefully speed up the process of identifying future infractions.
Overall, the passage of SB 538 and HB 889 represented significant improvement to the wage theft statute.
Pay-if-Paid (SB 550, Sen. Bell)
This year, legislation was filed that would substantially undermine the freedom to contract and place the entire financial risk of a construction project on a general contractor.
AGCVA opposed the legislation as written while stressing its preference to work together with subcontractors on a solution to the issue of not being paid for work completed. AGCVA consistently maintained that any solution must 1) preserve the freedom to contract, 2) protect general contractors, and 3) protect subcontractors. AGCVA met with stakeholders advocating for the bill in an effort to reach a compromise on amended language that would benefit all parties. Unfortunately, despite weeks of negotiation via in-person meetings, phone, and email, a consensus could not be reached within the limited timeframe of the legislative session.
Since then, the bill has undergone several iterations including several amendments that were just approved by the General Assembly during the Reconvened Session. The revisions, which included several requests from AGCVA, included an extension of the payment timeline from 45 days to 60 days and a delayed enactment clause set for January 1, 2023. Moreover, the legislation will only apply to contracts executed on or after that date.
While the bill’s language has moved in a positive direction, there is still much more work to be done in the interim. AGCVA looks forward to actively participating in the DGS workgroup that will be tasked with evaluating the pay-if-paid issue, crafting potential solutions, and reporting legislative recommendations to the General Assembly later this year.
Workforce Development (BYF Virginia Budget Amendment, Sen. Marsden/Del. Davis)
If there is one issue that is discussed the most among membership, it is the challenge of attracting a workforce that can meet the constant demands of the construction industry. Construction is one of the fastest-growing and most-essential sectors in Virginia, yet it currently faces over 246,000 unfilled industry-related positions.
Naturally, AGCVA sought legislative and budgetary avenues to support workforce development. For example, AGCVA supported legislation that would have allowed CTE coursework to be eligible for an advanced studies diploma in high school. The legislation passed the House but was defeated in the Senate.
AGCVA’s major budget priority this year was to secure state funding for Build Your Future Virginia (BYFV). BYFV is a joint effort between AGCVA and ABCVA to educate and promote career pathways in the commercial construction industry, especially among middle and high school students.
In the spirit of bipartisanship, Delegate Glenn Davis, a Republican, and Senator Dave Marsden, a Democrat, agreed to carry the budget amendment, which allocated $250,000 in 2022 and another $250,000 in 2023. AGCVA worked hard to lobby support for the budget amendments, which included several AGCVA members coming down to the General Assembly Building on Virginia Small Business Day to meet with their legislators and advocate for funding.
Unfortunately, the budget amendments were not included in the committee-approved budgets in the Senate and House. AGCVA is seeking other avenues to secure funding in the future.
Guardrails on PLAs (HB 1091, Del. Wilt)
Two years ago, the General Assembly approved legislation allowing state and local governments to mandate project labor agreements on public works construction projects. AGCVA opposed the legislation because mandated PLAs harm contactors’ ability to freely compete for projects and increase the costs of construction.
Even worse, Virginia is currently an outlier among states that authorize mandatory PLAs because there is no requirement to show proof as to how the PLA would provide a public benefit. This year, HB 1091 addressed this issue by simply placing guardrails on when and how PLAs can be used.
After initially being halted early in the legislative process, the legislation was reconsidered at the request of the Youngkin Administration and support from AGCVA. The bill made it out of the House of Delegates and moved on to the Senate, where prospects for passage were slim given the 12-3 Democratic majority in the Senate Commerce and Labor Committee. Despite AGCVA’s best efforts to transcend the partisan divide, the bill was defeated on a party-line vote.
AGCVA will continue to fight for commonsense limitations on project labor agreements so all contractors in Virginia can be at the table during the bidding process.
Gas Tax Suspension (SB 6001/HB 6001, Sen. Newman/Del. Durant)
The industry-wide impacts of rising gasoline prices have been a major burden on members, especially those with fleets of vehicles that must remain on the road. As you may be aware, there have been efforts nationwide to address the high costs of gasoline. In Virginia, the Governor called the General Assembly into a special session to consider suspending the state gasoline tax. Unfortunately, unlike other surrounding states, Virginia’s proposal would cut transportation funding by $437 million without any general fund dollars allocated to backfill the loss.
Moreover, the proposal nullifies a bipartisan agreement that was struck just a few years ago by cutting in half future increases of the gasoline tax from 4 percent to 2 percent. Since the transportation budget relies on gas tax revenues, the loss in funding would hamper improvements to Virginia’s transportation infrastructure for years to come.
While the House version of the legislation is currently awaiting consideration in the House Appropriations Committee, the Senate proposal was defeated. Given the fate of the Senate version, the likelihood that a bill makes it to the Governor’s desk is slim to none.
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