Legislative Update WINTER 2022
Jessica Newbold Hoselton | jnewbold@boldnewstrat.com
In October, the Illinois General Assembly convened in Springfield for fall veto session when lawmakers approved many of their top legislative priorities. However, the most concerning issue to IMSCA was legislation seeking to amend the Wage Payment and Collection Act (HB 3293).
IMSCA, along with our design and construction industry partners, was surprised by an unexpected amendment filed to HB 3293 (Sen. Castro/Rep. Gong-Gershowitz). The amendment seeks to hold general contractors and subcontractors liable for wage claims at any tier on a private construction project. The legislation is an initiative of the Mid-American Carpenters Regional Council and is supported by the IL AFL-CIO. IMSCA and various other construction industry associations oppose HB 3293. The proponents of the legislation argue that it’s aimed at protecting workers from wage theft, but IMSCA contends HB 3293 will result in unintended consequences that will negatively impact the Illinois construction industry:
• General contractors may be incentivized to selfperform more work and not hire subcontractors, which will result in diminished project and employment opportunities for subcontractors.
• The amendment creates a barrier of entry for smaller and minority-owned businesses by encouraging general contractors to work with more financially established companies.
• Litigation between general contractors and subcontractors at various tiers over who has the liability of wage claimants will increase, ultimately leading to higher construction costs.
The bill awaits a concurrence vote in the Illinois House of Representatives and will likely pass when legislators return to Springfield in January.
Governor Pritzker unveiled a package of tax credits and incentives aimed at kickstarting the electric vehicle industry in Illinois. HB 1769 (Sen. Stadelman/ Rep. Vella), also known as the Reimagining Electric Vehicles in Illinois (REV) Act, provides tax credits for large business development and allows businesses to claim some income tax withholdings attributed to new employees. In addition, the legislation provides for construction job credits for building facilities, creates a streamlined permitting process and establishes a state government procurement price preference for electric vehicles built in Illinois.
In response to the continued debate and struggles over COVID-19 vaccine mandates, the Democratic majority also approved SB 1169 (Senate President Harmon/Assistant Majority Leader Gabel), which proponents argue clarifies the intent of the Health Care Right of Conscience Act (HCRCA). The language recently approved provides that it is not a violation of the HCRCA for any person or public official, or for any public or private association, agency, corporation, entity, institution or employer to take measures or impose requirements intended to prevent the transmission of the COVID-19 virus.
IMSCA’s top legislative priority in 2022 will be a continuation of our previous work on retainage reform. As members are aware, IMSCA worked hard for many years seeking a reduction in retainage on private, commercial construction projects, which became law in 2019. IMSCA will again pursue legislation aimed at eliminating retainage on some public construction projects. Retainage is still withheld at an unreasonably high rate of 10% for most local government construction projects, even though a payment and performance bond is also required to protect local governments from defects and delinquencies. The combination of the two is excessive and creates unnecessary cash flow burdens. To ease this financial burden, IMSCA will seek an amendment to the Public Construction Bond Act to provide that a local government entity may not require retainage when a contractor has furnished a surety bond or its equivalent. Our proposed legislation will be sponsored by Assistant Senate Majority Leader Linda Holmes.
Legislators will return to Springfield on January 4 to start the spring 2022 legislative session.
If you have any questions regarding this information, please do not hesitate to contact Jessica Newbold Hoselton by calling 217-523-4361 or emailing jnewbold@boldnewstrat.com.