2021 Session Crossover Update

General Assembly Updates,

We are at the 2021 Crossover point. Bills that have survived passage in the House or Senate, now move to the other body for adoption, amendments or rejection. This session has seen an unprecedented attack on businesses and how they operate in Virginia: accusations of wage theft and unsafe practices on construction sites, studying the mandating of registered apprenticeships, and environmental justice needs seem to be part of everyday discussions. We are defending the reputable firms that have built and maintained Virginia’s roads each day.

Yet, the message legislators hear is one of unsafe, unscrupulous contractors, wage theft on 90% of all job sites in Virginia – and the solution is to make prime contractors liable for all employees and subcontractors’ employees, by providing additional paperwork and curtailing flexibility on construction projects.

While we are heavily outspent with campaign contributions, our message of honest and sound business practices with good paying jobs and excellent benefits is starting to gain some traction. But we have not gone as far as we need to go.

We have done an excellent job defeating or watering down several bills designed to put the responsibility of policing wage theft on contractors and/or give an advantage to large out-of-state union subcontractors, there are still a few bills we need to address:

HB 5002 – NEW: Exercising his prerogative to introduce legislation at any time during the session, the Governor’s new Bill, released late last week, aims to set new SWaM enhancement goals in Virginia– SWaM goals of 42% and WaM (Women & Minority firms) goals to 23.1%. We have significant questions with the bill as drafted and how it conflicts with other bills passed by the legislature. While the bill does not change the definition of small business (less than 250 employees or $10M in gross revenue), it does:

  1. Codify the 42% SWaM goal that each Governor for the past 8 years has utilized – but never reached in procurement.
  2. Sets a goal of 23.1% specifically for women and minority businesses.
  3. Sets a subcontractor SWaM goal of 50% on capital outlay projects.
  4. Allows the state and localities to procure professional services and construction with $200,000 (has been $80,000 and $25,000) or less without using competitive bidding or competitive negotiation – which has been the traditional method.

We are still reviewing the SWaM bill to understand its impact.

Below is the list of other bills we are tracking. Also attached is an update on the current PLA status and a list of all the bills we are tracking.

Public Procurement

Project Labor Agreement Guidelines SB 1419/HB 2237. Establish guidelines prior to engaging with a PLA. Failed in the House & held over in the Senate for 2022.

VDOT self-perform work raised from $600,000 to $800,000 HB 1813. Reduced increase to $700,000. Passed House & moved to Senate.

Wage Theft Issues have received excessive attention from the majority party in 2021. While there have been many allegations, there are few, if any, proven accounts on transportation construction projects. Last year’s legislation makes prime contractors liable for all wages of subcontractor’s employees. This year, there are several bills attempting to address this concern. Several bills were introduced that would have required prime contractors to certify payments to and list all subcontractors’ employees as either full-time employees or independent contractors. With VTCA’s urging, the House leadership have moved many of these bills into a workgroup to report recommended actions for the 2022 Session.

The following bills are still alive:

10% threshold for subs to farm out work – SB 1305. Certifies that subs will farm out no more than 10% of the agreed upon work. Subs can farm out more, if a written request is approved by the contractor & public body. Passed Senate & moved to House.

Eliminate pre-qualification as criteria on local projects – HB 1996. Allows localities to include in the Invitation to Bid criteria that may be used in determining whether any bidder is a responsible bidder. Under current law, a locality may only include such criteria for bidders who are not prequalified by the Virginia Department of Transportation. Passed House and moved to Senate.

Require contractors to list all subcontractors they intend to use – HB 2288. Requires bidders or offerors on contracts for construction of $250,000 or more to submit along with their bid or proposal a list of all subcontractors and certification that they are in good standing – reenactment clause for 2022. Amended in the House to be presented again in the 2022 Session and moved to Senate.

Specifically calls out transportation construction projects must pay the prevailing wage on public projects – HB 2327. Follows last year’s prevailing wage on public projects and adds transportation infrastructure. Passed House and moved to Senate.

Environment

Gold – Study impacts of gold mining & prohibition on 10 acres or more – HB 2213. Passed House; the Senate eliminated the prohibition on gold mining. The bill now only studies the impact of gold mining.

Funding purchase of electric school buses – users of dyed diesel fuel – HB 2118. Added a .05 cent tax per gallon. Changed to a study where transportation construction will be part of the work group.

Environmental Justice – HB 2221/SB 1373 Mandates every resident within a 3-mile radius must be notified when an individual permit is pulled. There must be a public meeting for those residents to know about what is happening. House version passed while Senate version failed to report out.

Environmental Justice Study Commission – HB 2074. Establishes the Interagency Environmental Justice Working Group as an advisory council in the executive branch of state government to further environmental justice in the Commonwealth and directs each of the Governor’s secretaries to designate at least one environmental justice coordinator to represent the secretariat as a member of the Working Group.

Workforce

Mandate apprenticeship for all construction projects over $250,000 for each trade on the job – HB 1849. Amended to study a mandate of apprenticeships on construction; members of the study will be from AFL-CIO, educators, labor force and small business. Passed the House and moved to the Senate.

State Budget

A few budget amendments are worth noting. Some have potential for good and others for more mischief in the future. These budget items will be negotiated through the budget conferees (representatives from the House & Senate money committees).

Budget Amendment – $500,000 for a 3-week, pre-construction boot camps as a pilot project at two community colleges.

Item: 82#1h – DGS will convene and lead an annual work group on Public Procurement Agencies (VDOT, VITA, SBSD) to study all legislation proposed on procurement and SWaM and their state budget impact and procurement processes.

Item: 111#h – Governor’s Workforce Officers/Secretary of Labor (if created in 2021) will set up a workgroup (including 2 representatives from construction and 2 representatives from labor) to examine: worker misclassification, worker protection and wage theft. Among other tasks, the workgroup will establish a state labor laws training program and study ways to debar contractors who violate labor laws.