Legislative Update

After 101 days, the Arizona State Senate and House of Representatives concluded the

2014 legislative session yesterday at 1:46 AM.

In early April, legislators successfully passed a budget proposal for Fiscal Year 2015 that ultimately received the Governor’s approval.  Typically, the successful passage of the budget signals the end of the legislative session.  This year, however, there were still over 250 bills in the Senate, and 150 bills in the House remaining to be processed.

In the remaining days of the 51st Legislature, 2nd Regular Session, there was a flurry of legislative activity on these bills that kept lawmakers working well into the night.

Proposals that saw last-minute legislative action included legislation that would have helped the City of Glendale cover public safety costs during next year’s Super Bowl.  This bill died in the Senate after concerns were voiced regarding Glendale’s “fiscal mismanagement.”

Lawmakers had a lengthy debate over legislation aimed at defining popular ride-sharing services, like Uber and Lyft.  Those in support of the measure said it establishes a regulatory framework for innovative entrepreneurs, while opponents said it gives these services an unfair advantage over traditional taxi and limo companies.  The legislation ultimately passed the House by the necessary 31 votes.

Other measures approved late last night include legislation that prohibits anyone from aiming a laser pointer at an aircraft, a bill regulating trampoline courts, and a measure making it a crime to distribute naked photos of a person without his or her consent.

Both chambers also approved a number of pro-gun bills, although some have already been met with the Governor’s veto stamp.

In all, lawmakers approved nearly 300 of the 1,205 bills introduced during this year’s legislative session.  The Governor, so far, has signed 215 and vetoed 14 of the measures that reached her desk.

Now that the Arizona Legislature has officially adjourned “sine die,” Brewer has until May 6th to sign, veto or allow the remaining measures to become law without her signature.

Legislation that includes an “emergency clause” will become law immediately upon receiving her signature, while bills with a “general effective date” will become operational on July 24th.

It’s worth noting that lawmakers expect the Governor to call a special session as early as May 1st to tackle the creation of a new child welfare agency.  Earlier this year, authorities discovered over 6,600 uninvestigated child abuse and neglect cases, and creation and funding of the new agency will require legislative approval.

Below, your government relations team has outlined the final legislative activity on bills that were of particular interest in the waning days of session.

SB 1160 (ROC; discipline grounds) – Signed by Governor

Final version of bill: http://www.azleg.gov/legtext/51leg/2r/bills/sb1160h.pdf

SB 1307 (residential construction; fall protection) – Signed by Governor

Final version of bill: http://www.azleg.gov/legtext/51leg/2r/bills/sb1307h.pdf

HB 2487 (insurance carriers; subcontractor audits) – DEAD

Representative Steve Smith has requested that stakeholders work with him over the interim on this issue.  We have made it clear that the ASCC would like a seat at the table.  It’s worth noting that Smith is running for the Senate seat being vacated by Senator Al Melvin.

If you are interested in how ASA plans to address these concerns,  please reach out to a member of the Government Relations-Advocacy Committee. You may reach Matthew Meaker, Sacks Tierney P.A. via email Meaker@SacksTierney.com or at (480) 425-2627, or contact Committee Chairmen Richard Usher, Hill & Usher Insurance and Surety via email rbu@hillusher.com or at his office at (602)956-4220.

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ASA Residential Construction Forum Meeting

ASA Residential Construction Forum Meeting

Tuesday, April 22, 2014 / 7:00 AM
ASA of Arizona Office
This meeting will focus on an important industry safety briefing: 
SB1307 – “Conditional Repeal” Passes, Impact on Fall Protection Requirements
As you all know, there has been much activity this legislative session focused on the fall protection statute revisions passed last year. This week SB1307 providing for “Conditional Repeal” of SB1441 (revisions to ARS 23.492), passed as amended through both the State House of Representatives (4/15/14) and Senate (4/16/14), and was transmitted to the Governor Brewer’s office today (4/17/14).
The RCF meeting on Tuesday will provide a special industry safety briefing presented by Julie Pace (The Cavanagh Law Firm) and Richard Usher (Hill & Usher Insurance and Surety) that will address the intricacies of SB1307 as it relates to the legislative process, what “Conditional Repeal” means and how it will be implemented, impact on the construction industry, and what to expect form OSHA and ADOSH.
Along with the committee, an invitation is being extended to all ASA members to attend. To assist with planning for seating and meeting materials, it is important that you reply to this message with your RSVP if you are planning to attend. I hope to see you all on Tuesday.
Regards,

Carol Floco

American Subcontractors Association of Arizona, Inc.
4105 N. 20th Street, Suite 230
Phoenix, AZ 85016
(602)274-8979  Fax (602)277-4505
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ASA President’s Letter-February 2014

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ASA President’s Letter-February 2014

Dear ASA Member:

As you may have heard, ASA has renamed its annual convention to SUBExcel. The new name captures the essence that ASA helps subcontractors excel in their businesses. So much of SUBExcel 2014, which will take place March 6-8 in New Orleans, will focus on achieving excellence.

There is the opening general session on March 6 on “Developing a Culture of Leadership, Communication, Pride, Trust, Teamwork and Personal Responsibility” presented by keynote speaker Bruce Wilkinson. On March 6 and 7, FMI’s Gregg Schoppman will present education modules focusing on applying current trends to your business, making innovation part of your strategic plan, creating operational excellence, developing world-class talent, improving business development and sales, and creating a world-class strategic plan. Also on March 6, ASA Chief Advocacy Officer E. Colette Nelson will present “There Ought to Be a Law,” examining how to change a law to protect subcontractors’ rights to equitable risk and prompt payment. On March 8, EC Concrete’s owners, Greg and Stevan Schwartzenberger, will illustrate how they carry on the family business that their father, Greg Schwartzenberger Sr., founded in the workshop, “EC Concrete: A Family Business.” And finally on March 8, Gregory Caruso of Harvest Business Advisors will present “How to Complete a Successful Family Ownership Transition.” Even the new association management courses for chapter leaders focus on achieving excellence!

I’m very excited about this year’s education workshops and sessions. A lot of hard work has gone into finding fantastic speakers and planning this terrific education program. I’m also thrilled about the networking and social events that have been planned for New Orleans!

I’d like to personally invite you to the President’s Welcome Reception, which will begin at 5:30 p.m. on March 5. I’ll be hosting this reception in the Riverview Room at the top of the New Orleans Marriott with spectacular views of the Mississippi River and the city at night.

There will be many more networking and social breaks, of course, and each provides a great opportunity to visit with colleagues, start new business relationships and discuss important topics, such as the latest news about OSHA’s proposed silica rule, the recent Texas Supreme Court decision in the Ewing case preventing the erosion of CGL coverage and the U.S. Supreme Court ruling preserving state construction forum-selection laws — to name but a few!

I’d also like to take the opportunity to encourage you to register your spouse for this year’s convention. (Your spouse’s registration includes a city tour and cooking class in addition to admittance to all of the social functions, education sessions, and other meetings. If you plan to forgo registration for your spouse, individual tickets may be purchased separately for the city tour, cooking class and the banquet dinner.)

The annual business meeting will take place from 11:00 a.m. to 12:30 p.m. on March 8.

And finally, we’ll bring the event to a close with a festive Banquet Reception & Dinner at Arnaud’s Restaurant beginning at 7:00 p.m. on March 8.

Please note that the Feb. 11, 2014, early-bird deadline is less than two weeks away! Visit the convention Web site, SUBExcel 2014, for a complete schedule of activities and other information. On the site, you can register securely online — or complete a printable registration form and email it tomeetings@asa-hq.com — and reserve your hotel room. You can also read the convention brochure and watch a jazzy new video about the convention!

I’m looking forward to meeting you and your spouse in New Orleans!

Sincerely,

Jack Austhof
2013-14 ASA President

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2014 Government Relations Update

It is certainly shaping up to be an interesting 2014 when it comes to governmental issues that will be impacting construction.  It appears as though there will be legislation addressing the ability of the Registrar of Contractors (ROC) to conduct background checks and/or inquiries into contractors’ taxes.  We expect to see further activity from the Department of Labor (DOL) this year as it relates to misclassification of employees.

In an attempt to better inform members of ASA about these issues, the Government Relations-Advocacy Committee will be sending a bi-monthly email to the members.  This email is focused on an update on Transaction Privilege Tax (TPT).

As you may know, the 2013 Legislative Session produced major changes to Arizona’s Transaction Privilege Tax or TPT.

House Bill 2111 (effective January 1, 2015) exempts service contractors who work directly for a property owner from TPT under the prime contracting classification.  So, contractors who work directly for a property owner to repair, maintain, or replace existing property will now pay retail tax at the point of purchase for materials.  The bill also requires the Arizona Department of Revenue (DOR) to conduct all future audits and administer an online portal where taxpayers can pay all state, county, or municipal TPT and affiliated excise taxes online.

What does all of this mean?  Candidly, it does not sound like anyone, including the folks at DOR can answer this question yet.  The good news is that the Arizona State Contractors Coalition (ASCC), of which ASA is a member, has organized a “TPT Task Force” that will work closely with the DOR to ensure that any questions or concerns raised by the contracting community will be addressed in the implementation process through rule, or by law if necessary.  Ultimately, the goal is to make sure that we are involved in the process so that contractors’ concerns are hopefully addressed as this begins to roll out.

As the year progresses and have a better sense of how this will impact your business, there will be further updates.  In the meantime, if you have any questions or concerns you would like to raise, please send them on to either Richard Usher or Matthew Meaker, or attend an ASA GRA committee meeting on the first Thursday of the month at Hill and Usher.

 

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ASA President’s Letter-January 2014

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ASA President’s Letter-January 2014

Dear ASA Member:

ASA is the only national association focused on the issues unique to construction subcontractors, suppliers and specialty trade contractors, at all levels and before all branches of government and within the construction industry. At the federal level, ASA focuses on issues such as subcontractor bidding and payment on federal and federally-assisted construction, as well as the unique challenges to subcontractors posed by tax, safety and health and environmental issues. At the state level, ASA not only conducts direct advocacy, but produces model legislation and other materials to help ASA chapters and other subcontractor advocates in the states to pursue subcontractor-friendly legislation. In addition, ASA is the only construction association with a Subcontractors Legal Defense Fund that finances “friend of the court” briefs in precedent-setting cases in courts all over the country.

In 2014 and beyond, ASA will work to:

  • Extend subcontractor payment protections to projects financed through public-private partnerships in all 50 states and by the federal government.
  • Deter the erosion to subcontractor payment protections by those who would waive statutorily-required payment bonds.
  • Curb the use of individual surety bonds by federal agencies.
  • Eliminate the use of electronic reverse auctions by federal agencies.
  • Continue to seek opportunities to strengthen state laws dealing with subcontractor bidding, subcontractor payment and equitable risk allocation in construction.
  • Continue to educate public policymakers about the monoposonistic nature of the construction industry.
  • Continue to identify and intervene in precedent-setting court cases on subcontractor issues.
  • Continue to educate subcontractors about statutory protections and negotiating strategies.

To the naysayers who think that effecting change is impossible, look at what ASA accomplished in 2013:

  • Stopped the erosion of subcontractor payment rights on construction projects financed through public-private partnerships by convincing legislatures to require payment bonds on such projects with the passage of new laws in California, Florida, Illinois, Maryland, and North Carolina.
  • Preserved 24 state laws that restrict the use of forum selection clauses in a challenge before the U.S. Supreme Court.
  • Added to a growing number of states in which commercial general liability insurance policies insure property damage that unintentionally results from defective work with a ruling by the Connecticut Supreme Court.
  • Improved subcontractor payment on private work in the District of Columbia with the enactment of an ordinance that established minimum standards for such payment.
  • Preserved subcontractor mechanic’s lien rights in Georgia with the enactment of a new law that clarified that contractors/subcontractors have lien rights for the full amount of the contract work successfully completed that is owed and due.
  • Limited retainage on public work in Maryland with the enactment of law that limits retainage on public work to 5 percent and requires the public entity to release retainage within 120 days of “satisfactory completion” or, if there is a dispute, within 120 days after resolution of the dispute.
  • Limited subcontractor liability for the actions of others with important decision by the Supreme Court of Minnesota, which ruled that a general contractor cannot shift liability to a subcontractor for damage caused by a general contractor’s own direction of the subcontractor’s work. This ruling was subsequently strengthened by the enactment of a state law that prohibits contracts that require insurance coverage for the negligence or intentional acts or omissions of another.
  • Limited the use of individual sureties in New Mexico through the enactment of a new law that requires that all insurers, including individual sureties, must possess a certificate of authority to write surety bonds in the state.
  • Established an important precedent before the Ohio Supreme Court, which held that notice and claims provisions that place an “impossible burden” on a contractor are against public policy.
  • Curbed the misclassification of employees as independent contractors on public construction in Texas with the enactment of a law that establishes strict penalties for misclassification. Further curbed misclassification in Illinois with enactment of a law that makes it easier to pursue civil and legal penalties against employers who intentionally misclassify workers in an effort to avoid paying employment taxes and insurance, overtime and other benefits and another new law that requires all contractors to report to the Illinois Department of Labor all payments to individuals who are not classified as employees of the company.
  • Improved subcontractor protections on public work in Wisconsin with enactment of a new law that implements a form of bid filing, limits retainage to 5 percent, and assures prompt release of retainage upon completion of the project.

Indeed, during ASA’s nearly 50 years of advocacy work, our major achievement has been making subcontractor rights an issue before all branches and at all levels of government. Under ASA’s leadership, the federal government eliminated retainage on construction in 1983, and subsequently, many states also eliminated or reduced retainage on public work. In 1988, ASA successfully led the fight for prompt payment of subcontractors on federal construction. All 50 states now have established minimum standards of payment for construction subcontractors on public work, and many states have also enacted minimum payment standards on private work. In 1999, ASA led an effort to strengthen the federal Miller Act, which requires that prime construction contractors provide bonds to protect subcontractor payment on federal construction. Many states followed suit. At the state level, ASA has been active in strengthening mechanic’s lien laws and eliminating the use of contingent payment clauses. ASA has also led the effort in state legislatures and in the courts to equitably allocate risk on construction contracts, enacting numerous state laws to limit subcontractor liability for the actions of others through contracts and insurance.

Legislation is an inescapable fact of life. Laws impact virtually every segment of the U.S. economy, including the construction industry. Each year, more than 170,000 measures are introduced in the state legislatures; roughly 30,000 become law. ASA chapters have the challenge of determining which of the thousands of measures introduced will impact subcontractors and assuring that subcontractor interests are represented. The sheer volume of relevant legislative information is an initial barrier. An organization with limited resources, thus may focus on just a few issues. In ASA, that may include, for example, mechanic’s liens, Little Miller Acts, retainage, payment timing, indemnity, and bidding. Once your chapter identifies and limits the issues it wants to monitor, or even lobby, explore and learn how to navigate your state legislature’s Web site. (Access your state legislature via the ASA Web site.) Most such sites allow full-text searching to identify key words and phases. Most sites will allow you to link to a page(s) for each bill that you want to monitor, making it easier to routinely check their status. A few state legislatures’ sites even allow you to set up alerts, which will email you each time there is a change in status on the bill(s) of your choice.

The construction industry, along with virtually every other segment of the U.S. economy, is subject to government regulation. Thus, it is important for construction associations, like ASA, to stay abreast of regulations published by nearly 11,000 state and federal agencies. Of course, ASA monitors and actively provides input into the rulemaking process at the federal level. ASA chapters have the challenge of assuring that subcontractor interests are protected in the state and local regulatory processes. The first step is to determine which agencies regulate ASA members. For example, at the state level, subcontractors will be impacted by state agencies regulating government purchasing, workplace and employment, the environment and tax compliance, to name just a few. Most states publish a weekly register (e.g., California Regulatory Notice Register, Maryland Register, Virginia Register of Regulations), which include proposed and final changes to state regulations. These “registers” tell readers how and when they can comment on proposals.

Supreme Court Justice Thurgood Marshall said, “There is very little truth in the old refrain that one cannot legislate equality. Laws not only provide benefits, they can even change hearts of men — some men, anyhow — for good or evil.”

I encourage you to learn how ASA works to change laws — and how you can be a part of that process — by participating in the March 6 workshop, “There Ought to Be a Law,” during ASA’s annual convention, SUBExcel 2014, in New Orleans, La. This workshop, presented by ASA Chief Advocacy Officer E. Colette Nelson, features a panel of ASA members who have successfully changed laws to protect subcontractors’ rights to equitable risk and prompt payment. So the next time you think, “There ought to be a law,” you’ll know the steps you need to take to make it so. Register for SUBExcel 2014 atwww.SUBExcel.com.

Happy New Year!

Jack Austhof
2013-14 ASA President

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Happy New Year from the American Subcontractors Association of Arizona

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Merry Christmas from the American Subcontractors Association

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ASA of Arizona Legal Roundtable

Kim Lough Jan.15

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Members Supporting Members

Legal RoundTable Profecting and Documenting Claims
Wednesday January 15, 2014
7:30 AM to 9:00 AM

Member Price: $0
Non-Member Price: $0

Perfecting and Documenting Claims

Speaker: D. Kim Lough with Jennings, Haug & Cunningham, LLP

Perfecting and documenting your construction claim may be the difference between a profit and a loss on your job.

Join us for an early morning discussion of:

  • Contract/Subcontract Notice of Claim Compliance
  • Content and Timing of an Effective Notice
  • Proof of Costs and Documenting your damges
  • Collection of your claims
  • Dispute resolutions forum selection

 

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ASA President’s Letter-December 2013

Dear ASA Member:

It’s always such a pleasure to get everybody together in person during ASA’s annual convention. While it is an important time for us to focus on improving ourselves and our businesses through the planned professional education offerings, the annual convention is a fantastic time for us to get to know each other better, and build new friendships, through the various networking opportunities.

We are making a special effort to include spouses in the upcoming annual convention, SUBExcel 2014, March 6-8, in New Orleans. My wife, Nancy, and I will be there, and we encourage you to register your spouse for this event, too. Your spouse’s full registration fee includes two outings especially for spouses — a city tour on March 6 and a cooking class on March 7 — in addition to admittance to social functions, educational sessions and other meetings.

In the city tour, spouses will tour the historic and eclectic French Quarter and learn about history and architecture. The tour includes St. Charles Avenue and the Garden District, where all of the beautiful antebellum homes are located, as well as a 20-minute guided tour of St. Louis Cemetery #3. In the cooking class at the New Orleans School of Cooking, spouses will learn basic Cajun Creole cooking from experts who will teach New Orleans specialties such as Gumbo, Jambalaya and Pralines. If you choose to forgo spouse registration, tickets may be purchased separately for the spouses’ city tour and cooking class for $40 and $24, respectively.

And, we encourage you to arrive early in New Orleans to experience Mardi Gras 2014 on Tuesday, March 4, the last day of the carnival season. SUBExcel 2014 has been conveniently scheduled to kick off the next day with the President’s Welcome Reception at 5:30 p.m. on Wednesday, March 5. The site hotel, the New Orleans Marriott, will honor the special ASA rate of $177 per night (single/double) if you would like to arrive a few days early to enjoy the festivities — and that’s a steal! Many Mardi Gras visitors are planning to arrive by Saturday, March 1.

The education program will begin the morning of Thursday, March 6 with the opening general session, followed by workshops and association management classes especially for chapter executive directors. I’m excited to note that six education modules presented by FMI will anchor the education program. FMI normally offers these education sessions for thousands of dollars! The evening will conclude with a networking reception. There are more workshops and association management classes for executive directors on Friday, March 7, and we’ve built in free time beginning at 4:30 p.m. to give you and your spouse the evening to explore New Orleans on your own.

Another general session, a workshop, and the annual meeting will take place on Saturday, March 8, followed by a Banquet Reception & Dinner beginning at 7:00 p.m. at Arnaud’s Restaurant.

With all of the special activities planned for spouses and chapter executive directors, the education programming featuring FMI, and the festive receptions and networking events, not to mention a few added surprises, this coming annual convention feels special. I hope you agree.

Register soon! Early-bird discounts end Feb. 11, 2014!

Nancy and I are looking forward to seeing you in New Orleans!

Happy Holidays!

Jack Austhof
2013-14 ASA President

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