IMSCA Update February 16, 2018

Posted on: February 21st, 2018 by MCA

The Illinois General Assembly convened in Springfield this week and the highlight of the week was Governor Rauner’s budget address. The budget address received reaction from legislators along partisan lines. Senate President John Cullerton stated the budget plan is “intentionally deceptive” while Senate Republican Leader Bill Brady described it as a “fair and balanced” plan.

The framework of the FY 2019 budget plan outlined this week is focused on shifting some pension costs to local school districts and health insurance costs to state workers to achieve savings. These ideas aren’t new, and have previously been met with opposition from members of the Illinois General Assembly. The budget also proposed a pension reform plan that would require state workers to choose between having their pay raises count toward their pensions or receiving annual increases in the pension benefits after retirement. Governor Rauner stated that if his proposed pension reform plan is approved by legislators, it will be coupled with a reduction in the state’s personal income tax rate from 4.95% to 4.7%. Governor Rauner’s pension reform plan has also been floated before, but has never passed the legislature. Many legislators believe if it were to pass, it would likely be challenged in court.

The budget plan also proposed $7.8 billion on a new capital construction plan. These funds include $50 million for capital improvements to the Quincy Veterans home in an effort to address the Legionella outbreak, and $30 million to repair the Coliseum building at the Illinois State Fairgrounds. The capital budget allocates nearly $2 billion to the Illinois Department of Transportation and $1 billion to the Capital Development Board. However, it was unclear in Governor Rauner’s budget address how the construction plan will be paid for. The proposed budget plan requires legislation to be passed, and IMSCA staff will monitor the budget bills as session progresses this spring.

IMSCA’s legislative initiative seeking retainage reform was introduced this week. SB 3052 is sponsored by Senator John Mulroe. Our bill amends the Contractor Prompt Payment Act, and seeks to cap retainage on private, commercial projects at 5%. Please be on the lookout for Calls to Action on our bill as it moves through the legislative process.

Other bills of interest to our industry that have been identified include:

HB 4234 (Rep. Welch) – This bill has been around for a couple of years and was previously sponsored by Leader Currie. HB 4234 creates a lien right for unpaid wages in the real and personal property of employers and those acting in interest of the employer. As proposed, the lien can be equal to the amount of unpaid wages to an employee. This bill continues to generate heavy opposition from the business community.

HB 4268 (Rep. Thapedi) – Amends the Home Repair and Remodeling Act by modifying language in the mandatory consumer brochure to inform consumers of their right to obtain a sworn statement from their contractor listing subcontractors and amounts due to them. This is an initiative of the IL State Bar Association, and has received opposition from the Home Builders Association of IL. Interested parties, including IMSCA, are engaged on this issue and an amendment to the original filed bill will likely be introduced. Rep. Thapedi has said he will not move the bill forward if there is continued opposition from the construction industry.

SB 2621 (Sen. Mulroe) – This is an initiative of ICIC and amends Section 24 of the Mechanics Lien Act which requires subcontractors to serve a notice of lien on the owner of the property and others. Currently,the notice must be served within 90 days of a subcontractors’ last date of furnishing labor or materials. SB 2621 would permit the notice to be served within 90 days of the completion of the contractor’s contract with the owner. This change is intended to give more time for filing liens for subcontractors who work earlier in the project cycle. IMSCA supports this legislation.

HB 4363 (Rep. Wojcicki Jimenez) – Would require certain reporting requirements by any contractor awarded a contract under the Business Enterprise for Minorities, Females and Persons with Disabilities Act. This bill also allows for the contracting state agency to have access to a contractors’ books and records for compliance purposes.

SB 2279 (Sen. Murphy) – provides the state must not enter into any contracts unless the money to pay for it has been appropriated.

HB 4513 (Rep. Conyears-Ervin) – Rep. Conyears-Ervin proposed this bill last year and it stalled in the Senate. HB 4513 amends the procurement code to provide any project under a construction contract, at least 10% of man-hours performing construction services be performed by individuals who reside in areas of poverty. This bill would require the Department of Central Management Services to annually release a list of areas of poverty that meet the requirements.
Today (Feb. 16) is the bill introduction deadline.

If you have any questions about this information, please don’t hesitate to contact Jessica Newbold by calling 217.523.4361 or jnewbold@boldnewstrat.com.