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-114300-365597003611880-381000714 N. 5th St. Baton Rouge, LA derrell@225-921-9233020000714 N. 5th St. Baton Rouge, LA derrell@225-921-92332020 LAGC Regular and Special Session ReportINFRASTRUCTURE FUNDING?HB 2, Bishop: The state’s annual appropriating of funds for?capital outlay construction projects?that are in progress, in design, or are placed on the list of projects in the construction program for the state and “sometimes” for local projects, did not make it all the way through the process during the regular session. ?Chairman Bishop surprised the Legislature by announcing that he would recommend withholding $200 million in surplus dollars from projects and place the savings in the Rainy Day Fund, should there be a shortfall in next year’s general fund.?It not only caused a lot of consternation in the legislature but also in the construction industry, as well as: DOTD, Facility Planning & Control, and Coastal Restoration.?These agencies had projects already in the pipeline that would be jeopardized without the surplus dollar funding. LAGC worked hard to explain to the House and Senate membership that the recommendation could not come at a worse time.?In the meantime, the Senate had approved its own version of the Capital Outlay Bill (without the Bishop shift of the $200 million), which was sent it back to the House. The House ended up not bringing HB 2 up for a vote before the session ended.?Any subject area that is italicized and with red-lettering is about actions taken during the special session that began at 6:01 pm, on June 1 and ended on June 30.?HB2, Rep. Bishop re-introduced the state’s capital outlay bill. A list of House agreed upon projects was put together, passed by the House, and sent to the Senate. The Senate reviewed the package, made changes, as always, and sent the revised bill back to the House for concurrence. At the end of the day the Senate and House agreed to a bill that will fund state, and some local projects, for FY2020-21.?Some 250 Priority 1 projects were approved amounting to $685 million.?Priority 2 projects were also funded, totaling $170 million. Passed and signed by Governor.Chairman Bishop also succeeded in passing his HB 35 that creates the Capital Outlay Savings Fund to be used for capital outlay projects and to allocate or appropriate funds into the Budget Stabilization Fund. The state treasurer will invest funds, and all unexpended and unencumbered funds and interest, remain in the fund. Included in monies that go into the fund initially are $110 million of nonrecurring revenues from FY18-19 surplus as recognized by the Revenue Estimating Conference. If a project included in the capital budget that has a State General Fund, direct non-recurring revenue appropriation is deemed null by DOA or is vetoed by the governor, the State Treasurer is directed to deposit those funds into the COS fund.?Passed and signed by Governor.HIGHWAY INFRASTRUCTURE FUNDING ISSUESSince the onslaught of COVID-19, sales taxes and gas taxes plummeting, and the crash in the price of oil, the legislature has been wrestling with just how bad the state’s budget can get.?Needless to say, legislation to increase the gas tax, or even shift some DOTD operations budget into construction, has been a “non-starter”. The bills below reflect that, although there was a lot of energy in some segments of the legislature to address the need for more infrastructure funding; timing wasn’t good in this session.HB 128, Wright: Limits monies deposited into the Transportation Trust Fund from being used to pay for certain DOTD operations expenses. Assigned to House Appropriations, did not advance. LAGC support.HB 276, Mack:?Limits monies deposited into the Transportation Trust Fund from being used to pay for certain DOTD operations expenses, staged over five years.?Assigned to House Appropriations, did not advance.?LAGC support.HB 440, Stefanski:?Constitutional amendment prohibiting DOTD from using TTF monies for current employee salaries.?Assigned to House Appropriations, voluntarily deferred. LAGC support.HB 446, Stefanski: Constitutional amendment prohibiting DOTD from using TTF monies for retirement benefits for retired employees.?Assigned to House Appropriations, voluntarily deferred. LAGC support.HB 487, Stefanski: Prohibits DOTD from using TTF monies for salary costs, staged over five years. Assigned to House Appropriation, did not advance.?LAGC support.HB 493, Stefanski: Prohibits DOTD from using TTF monies for benefits for retired employees, staged over five years. Assigned to House Appropriations and was not heard.?LAGC suppot.These bills will be re-introduced in the next Regular Session.HB 694, Glover: Would provide funding for a Jimmie Davis Bridge (LA 511) out of BP?settlement funds AND SB 323, Morris & Cathey: dedicated BP settlement funds to shift funds from the On-System Bridge Program into several bridges in the northeast part of the state. Passed the House and assigned to Senate Finance, no action was taken.?SB 89, Peacock: Phases in the dedication of the temporary state sales tax levy to the TTF in a graduated phase-in over five years.?Assigned to Senate Finance, did not advance.?LAGC support.SB 141, Ward: Constitutional amendment to reallocate severance tax to parishes for Parish Transportation Funds. Assigned to Senate Revenue & Fiscal Affairs, did not advance. LAGC support.SB 217, Carter: Exempted tolls on the Bell Chasse Bridge. Assigned to Senate Transportation Committee, did not advance. Tolls on this project became very contentious as Louisiana’s first Public Private Partnership highway project. Much opposition to the toll project was expressed by local citizenry.SB 285, McMath: Changed present law regarding deposit of certain sales tax dollars into TTF. Subdivided TTF into categories like capacity projects, port construction, and development priority program projects. Assigned to Senate Finance, did not advance.?LAGC opposed.CONSTRUCTION INDUSTRY LABOR/MANAGEMENT ISSUESHB 163, Carpenter; HB?196, Riser; HB 199, Carpenter; HB 205, Riser; SB 250, Carter; and HB 251, Carter: Required employers on publicly bid, state projects to designate no less than two percent of man-hours to registered apprentices.?All were assigned to their respective House or Senate Labor & Industrial Relations Committees. None advanced. LAGC opposed.HB 397, Landry: Increased administrative penalties assessed for willful or knowingly misclassification of employees from the current, $250 per employee to $5,000, for second offenses; then $10,000 plus penalties, interest, contributions, and $25,00 for the fourth offense. Assigned to House Labor, killed in committee. LAGC opposed.SB 475, Womack: Essential workers and their dependents?with COVID would have exclusive remedy under workers compensation, caused a real stir in the business community and particularly the construction industry. When the Senator caught the drafting language problem, he pulled the legislation. LAGC opposed. PUBLIC, PRIVATE FUNDING FOR PUBLIC PROJECTSHB 285, DeVillier:?Requires projects funded through the issuance of debt to be included in the Capital Outlay Act,?and eliminates the needs-based exemption from the local match requirement for non-state entity projects. It cleans up several provisions in current law as they relate to the process for determining how projects are included and deletes projects that have already received funding. More importantly, the bill specifies that economic development projects, improvements on public or government-owned property for attracting or retaining a new or existing manufacturing or business operation, must benefit Louisiana and generate new, permanent employment or help retain existing employment. Assigned to House Ways & Means, did not advance.SB 16, Abraham: Allows for local agreements between public bodies and private entitles for payments in lieu of taxes. Passed and signed by Governor.SB 18, Fesi: Creates an Unclaimed Property Permanent Trust Fund. These monies have been used to fund State capital improvement projects. It was sponsored by the State Treasurer. Passed and signed by Governor.PUBLIC BID LAW LIMITS AND RELATED ISSUESSB 118, Ward: Increases the “contract limit” for?all public entities?to $250,000 per project, and will remain so until February 2025. The CPI adjustment will begin again on February 2025.?Since 2015 Public entities were limited to $150,000 plus a CPI annual adjustment. The contract limit is the value of work that a public entity may undertake with their own forces, including costs for labor, materials, equipment and overhead and the value of a publicly advertised project. Two years ago, a special commission of public entities, AGC, ABC, State agencies and Legislators was created that would make recommendations to the legislature regarding the contract limit. Passed and signed by Governor.HB 758, Zeringue and SB 390, Peterson:?Originally, HB 758 repealed legislation passed two years ago by LAGC, which allows for interest on late payments by public entities. HB 758 was brought by two Levee Districts in south Louisiana to address a Louisiana 4th?Circuit Court of Appeals decision.?As finally passed, the law only relates to flood control projects or integrated coastal protection projects. “Liquidated Damages” for the first time is defined in the public bid law and allows only flood control projects or integrated coastal protection projects to withhold “liquidated damages” from any payments or monies otherwise due to the contractor, taking into consideration all granted time extensions, after the expiration of the forty-five-day period for recordation of acceptance. This language was inserted to protect the rights of claimants against contractors and subcontractors.?LAGC worked tirelessly on the legislation to protect the interest on late payment law. Passed and signed by Governor.SB 265, Peterson: Repealed the prompt payment legislation LAGC passed two years ago,?Introduced on behalf of the City of New Orleans. Never heard.LICENSING OF LANDSCAPING CONTRACTORS AND EXEMPTIONS FOR CERTAIN CONTRACTORSSB 163, Cathey and Rep. McFarland: Allowed contractors licensed by the Licensing Board for Contractors performing sod repair work on rights-of way not be required to obtain licenses by the Horticulture Commission under certain circumstances. The legislation originally pertained to work less than 5% of the total value of a construction contract. Repair work is defined as “the restoration or replacement of sod disrupted during the course of performing work in the scope of the construction contract or permit.”?The Senate Agriculture Committee amended the bill to further define the work as less than $10,000 and deleted the language tied a percentage of the total contract. The House further changed the bill to delete the $10,000 and changed to work less than 5,000 sq. ft.?A compromise had been worked out between the proponents and the landscaping contractors. Passed and signed by Governor.PUBLIC WORKS FUNDING ISSUESSB 157, Womack and Riser: Relative to audit requirements for recipients of state funds by the Legislative Auditor, and public bodies who fail to, or refuse to, comply with and are deemed?non-compliant. No funds appropriated by the legislature shall be released to a public entity so long as the public entity fails or refuses to comply with the requirement for a State audit.The construction industry has experienced situations where they entered into a public contract in good faith prior with a public entity, but could not be paid for work performed when appropriated funds are withheld by the Legislative Auditor.?SB 157 allows for payments to be made to a contractor, subcontractors, suppliers, and others due payment by the public entity, when the public contract was entered into prior to the public entity becoming non-compliant.?The Legislative Auditor must grant the public entity an extension of time to comply.?LAGC worked with Senator Womack on the legislation. Passed and signed by Governor.TORT REFORMMore actual instruments were introduced during the regular session addressing varied aspects of tort reform than in the history of the legislature and oftentimes were driven by a broad, massive coalition of business interests spearheaded by LABI and conservative Republican legislators who ran on doing something about high auto insurance rates in Louisiana. Most didn’t make through the process.SB 418, Sen. Talbot: The Omnibus Premium Reduction Act of 2020.?Lowered the jury trial threshold, eliminated collateral source, removed direct action against an insurer, eliminated the seatbelt gas rule, and extended the prescription period from one year to two years for vehicle accidents, and required a 10% rate reduction for personal auto insurance. Passed and vetoed by Governor.SB 395, Sen. Cloud: Stop deceptive advertisements about monetary results, by plaintiff attorneys. Passed and vetoed by Governor. ?Once the regular session ended and the Governor had vetoed SB 418, legislation was immediately introduced by tort reform proponents, bent on enacting some meaningful legislation.?This time it appeared that both sides wanted to work out something that would not be vetoed by the Governor. Neither side was sure that another veto could be sustained or overridden.?HB 57, by House Speaker Clay Schexnayder: THE TORT REFORM BILL OF THE SESSION soon became THE bill that could pass both the House and Senate. The legislation lowers the monetary amount the jury trial threshold to $10,000 (currently $50,000). It allows for defense counsel to introduce evidence of the plaintiff not utilizing a safety belt. It also allows for the introduction of medical damages in insurance claims to what was actually paid, not billed (however, the judge can adjust the award after the trial). And it maintained the current one-year prescriptive period. Passed and signed by Governor.HB 826, Pressley, et. al.: Limits civil liability during the COVID-19 public health emergency to businesses or juridical persons, the state or local governments, or political subdivisions and certain property owners for civil damages for injury or death resulting from, or related to, actual or alleged exposure to COVID-19, unless they failed to substantially comply with applicable COVID-19 procedures. Employees who have workers’ compensation coverage through their employer may not make a claim under tort unless the employer caused the act, by the intentional action. Passed and signed by Governor.TAX BREAKS FOR BUSINESSSB 6, Allain: Suspends the Corporate Franchise Tax for small businesses.?The law would be effective from July 2020 until July 2021. It was designed to spur the economy post-COVID-19 and help small Louisiana businesses. The legislature scaled back many tax breaks recommended by the special legislative task force created by the House and Senate leadership, with specific aims at addressing issues with COVID-19 and oil prices. Even so, new tax breaks enacted could cost the state $25 million in the new fiscal year or $230 million over the next five years. The hope is that the tax breaks would keep businesses in Louisiana alive and the economic improvement needed to keep the state solvent. Passed and signed by Governor.AGC SPONSORED LEGISLATIONLAGC had introduced HB 337, Miller and SB 333, Ward, relating to the enforcement of claims under public contracts. The issue would address a claimant’s rights and the time period for actions within one year from acceptance.?The section of law the bill amends has been in effect for more than thirty years, but was re-interpreted by a court decision over a lawsuit that opened up the notice of a lien period to an unlimited period of time.?The bill would clarify the law to ensure that the time period for filing actions is certain. The litigation only addressed the Public Works Act and the Private Works Act was not affected. Another issue pertaining to the Public Works Act had to do with another piece of litigation that impacts upon the surety industry and its liability. With the short time period for the legislature to address the matter, potential authors were already focused on COVID-19 and the state’s budget problems resulting from the pandemic.With all that the legislature was facing as COVID-19 embraced the House and Senate, the authors of the bills and LAGC made a decision that this wasn’t the appropriate time to address the issues and the bills did not advance. The legislature will be meeting again to address other COVID-19 and budget issues in October and we will be looking for an opportunity to get these, and other issues LAGC has, placed in the call.?Issues such as, addressing problems in the private sector on escrowing of retainage funds on behalf of contractors, and “pay if “or “when paid” issues. Failing in that, we’ll have yet another regular session in 2021 where our legislation may be addressed.THE FISCAL STATUS OF THE STATEHB 1, Zeringue: The state’s budget bill, was much debated with the concerns by many that there are so many unknowns regarding the “end-game” that is going to be played out by COVID-19 and price of oil with the state’s perilous revenue projections for the coming fiscal year and the fiscal status in the next year. For the near-term, thanks to billions of dollars in federal assistance, the budget for the 2020-21 year is balanced. The legislature also decided to not fund any state pay raises until there is a better idea of where the economy and tax revenues vibe with stability of the economy. However, the governor vetoed that provision from HB 1, thus approving pay raises. There is much uncertainly ahead, however, and concern for the budget next fiscal year. It is anticipated that the legislature will be back in session this Fall to address any issues with the state’s economy and of course, revenue projections for the state’s fiscal picture. ................
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