This summer three legislative bills will become law.

Contractor Registration is now required for the entire state. Starting in July all contractors must register. Registration will be administered by the Department of Labor. Click here to go to the Department of Labor website to register.  You will need to complete an application form, provide proof of Worker's Compensation Insurance and mail the annual fee to the department. The annual fee was increased to $40.00 in the bill. 

If the contractor is self-employed and does not pay more than $3,000 annually to employ other persons an affidavit may be signed and the contractor does not have to pay the annual fee. 

The penalty for not registering is $500.00 for the first violation and $5,000.00 for each subsequent violation. First violations do have a 60-day window to comply with the act before the penalty is applied. Enforcement of the act will begin in March, 2009.

LB 1001, the Low-Income Home Energy Conservation Act, Section 9 creates a new 5% withholding requirement for any contractor making payments of more than $600.00 for construction services to a contractor or a person who is not an employee. The withholding requirement does not apply to payment made to a contractor when the contractor determines that the payee contractor is in the database set up by the Nebraska Department of Revenue. 

The Nebraska Department of Revenue is in the process of creating a database of contractors who are licensed, granted a permit, or registered in the state and in good standing with the Department. The data will be accessible on the website of the Department. Any contractor who determines that a contractor is in the database is relieved from liability for withholding under this bill, for any future payments on a contract in existence at the time the determination is made or made during the same calendar year as such determination is made. 

It appears that things are progressing as planned by the NDR in the development of the internet accessible data base. Those of us that worked with the NDR during the session will be meeting with Cathy Lang and Doug Ewald on July 1 to get an update and provide input on the role out of this new system.

The Political Subdivisions Construction Alternatives Act authorizes a political subdivision to enter into a design-build contract which is subject to qualification-based selection or a construction management at risk contract for a public project if the political subdivision adheres to procedures set forth in the act. Political subdivisions still have the option of using design-bid-build for construction project delivery. 

Political subdivision means a city, village, county, school district, community college, or state college. The governing body of the political subdivision must adopt a resolution by an affirmative two-thirds vote to use CM@R or design-build delivery method on a construction project. The bill also includes definitions of CM@R, design-build, construction manager, design-builder, letter of interest, performance-criteria developer, project performance criteria, proposal, letters of interest and RFP's. The process for implementing the alternative delivery systems are prescribed by LB 889 and are the same language as in the original Nebraska Schools Alternative Construction Act passed in 2002. 

Section 14 of the bill provides for one exemption to the act. A political subdivision cannot use design-build or CM@R contracts for road, street, highway, water, wastewater, utility, or sewer construction projects, except that a city of the metropolitan class may use a design-build contract or CM@R contract for the purpose of complying with state or federal requirements to control or minimize overflows from combined sewers. 

The AGC Building Chapter, AIA-Nebraska and ACEC-Nebraska are working together to develop and distribute educational resources about alternative delivery methods to the public entities covered by this act. The goal is to have the resources available for member use in the near future. 

This past weekend I attended the Nebraska Cattlemen’s Ball near Albion, Nebraska.  Although the emphasis was on Beef and raising money for cancer research at UN Medical Center, I did have an opportunity to discuss construction legislative issues with Congressman Smith and Republican Candidate for Senate Johanns. I also had an opportunity to say hello to Senator Nelson and several State Senators.

Jean and Mike Johanns with Jean's good friends Ray and Jolene Ward from Kearney.

Congressman Adrian Smith and Jean Petsch.

The White House released an Executive Order that would require contractors and anyone else doing business with the federal government to verify that their employees are eligible to work in the United States. Federal Contractors would be required to use the E-Verify system, formerly known as Basic Pilot, to check the status of new hires and others working on federal projects in the U.S.

Washington, D.C. — President Bush has just signed an executive order requiring federal contractors to use the “E-Verify” system to determine that all new hires are eligible for employment in the United States and to determine that all employees working on federal contracts – including current employees hired in accordance with pre-existing rules and standards -- are also eligible for such employment.

“While AGC supports the full enforcement of our immigration laws, AGC remains committed to their comprehensive reform, and the association questions whether this piecemeal measure will hasten or delay the day when we will see that kind of reform,” said Stephen E. Sandherr, chief executive office of the Associated General Contractors of America (AGC).   “Ironically, we also find ourselves questioning whether the executive order is itself in violation of our current laws,” he added.

The new requirement will take effect only after the relevant federal agencies revise the regulations that govern federal contracts. AGC will carefully examine the new executive order and the proposed revisions of the regulations to determine if the changes would cause problems for the contractors responsible for constructing and maintaining the federal infrastructure.  AGC also will investigate whether or not the changes conflict with the current immigrations laws, and if so, may contemplate even stronger action. 

Immediately, AGC will also begin seeking further guidance on a host of questions that the executive order raises, including:

• Who is a “contractor” for the purposes of the executive order?  Does it include a subcontractor?  Does it include a material supplier?  Does it include a vendor of commercial items?
• What – if any – are the procedures and deadlines for employers and/or employees to correct the many mistakes that even the E-Verify system will inevitably make?
• How should employers deal with individuals who can satisfy the pre-existing rules and standards – which Congress has written into the Immigration and Nationality Act – but not the E-Verify system that the President has mandated entirely on his own?  How do employers avoid getting caught in the middle?
• What are the penalties for non-compliance?  Should federal contractors anticipate debarment for even honest mistakes made in ignorance of technical requirements?

The Associated General Contractors of America (AGC) is the largest and oldest national construction trade association in the United States. AGC represents more than 33,000 firms, including 7,500 of America’s leading general contractors, and over 12,500 specialty-contracting firms. More than 13,000 service providers and suppliers are associated with AGC through a nationwide network of chapters.  Visit the AGC Web site at www.agc.org.

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