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Florida A.G.C. Council, Inc. LEGISLATIVE REPORT 2013

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2013 Regular Session of the Florida Legislature
Prepared by Metz, Husband & Daughton, P.A.
March 8, 2013

 

As the actual effects of the reduction in federal spending resulting from the “sequester” begin to be sorted out here in Florida, the 2013 Regular Session of the Florida Legislature convened in Tallahassee on March 5. With one week down and eight to go in this annual 60-day lawmaking sprint, the 2013 Florida Legislature will face difficult challenges ahead, including a decision on the state’s expansion of Medicaid eligibility under the federal Patient Protection and Affordable Care Act. At this point, despite the popular “less regulation” mantra that is often repeated at the state level, literally thousands of bills have been filed for consideration by the 2013 Florida Legislature. At present, we are tracking 149 bills that would have some impact on the construction industry. Beyond the bills that AGC is actively trying to pass, AGC must also determine the impact of dozens of other bills and decide to support, oppose, or amend them as warranted.

Outlined below is an ever-expanding list of major bills and issues on which AGC is pursuing the interests of Florida’s general contractors during the 2013 Session here in Tallahassee.

PUBLIC-PRIVATE PARTNERSHIPS STATUS: PENDING
SB 84 - Sen. Miguel Diaz de la Portilla (R - Miami) AGC POSITION: SUPPORT
HB 85 - Rep. Greg Steube (R - Sarasota)

Public-private partnerships (PPPs) are contractual arrangements formed between a public agency and a private sector entity that allow for more significant private sector participation in the delivery and financing of public buildings and infrastructure projects. In addition to the sharing of resources, each party shares in the potential risks and rewards in the delivery of the service or facility. The most common form of PPP is a Design-Build-Finance-Operate (DBFO) transaction, where the government contracts with a private vendor, granting the private vendor the right to develop a new piece of public infrastructure. The vendor takes on full responsibility and risk for the delivery and operation of the public project in accordance with the terms of the partnership. The vendor is paid through the revenue stream generated by the project, which could take the form of a user charge (such as a highway toll) or, in some cases, an annual government payment for performance (often called a “shadow toll” or “availability charge”).

While PPPs often result from a more “conventional” procurement process in which the government issues a request for proposals and then receives competing responses from private vendors, PPPs may also be initiated by the government’s receipt of an unsolicited proposal from a private entity. Generally, the government requires a processing fee to cover the cost of its technical and legal review of the unsolicited proposal. If the government is interested in pursuing the project, the government issues public notice and solicits competing proposals before entering into any partnership for the facility in question.

Expanding upon the current PPP program operated by the Florida Department of Transportation, this bill creates a PPP procurement process for use by counties, cities, school boards, universities, and regional entities. The bill specifies the requirements for such partnerships, which include provisions that require public entities to provide notice of unsolicited proposals, conduct independent analyses of proposed partnerships, notify other affected local jurisdictions, and enter into comprehensive agreements for qualifying projects. The bill provides that public entities may approve a qualifying project if there is a need for or benefit derived from the project, the estimated cost of the project is reasonable, and the private entity’s plans will result in the timely acquisition, design, construction, improvement renovation, expansion, equipping, maintenance, or operation of the qualifying project.

UPDATE: As of the end of this first week of the 2013 Session, both SB 84 and HB 85 have progressed through one legislative committee on each side of the Capitol. Each bill must pass through several more committees before consideration by the full Senate and House. With government budgets and bonding capacity stretched thin, there is considerable support for encouraging innovative solutions to the delivery of public facilities and infrastructure. At the same time, there are lingering doubts about the ability of local governments to responsibly enter into and implement PPPs over the long term.

ATTORNEY’S FEES ON LIEN & BOND CLAIMS STATUS: PENDING
Possible Amendment AGC POSITION: OPPOSE

Since 2010, material suppliers have been pushing for a change in the law that would fundamentally alter how “prevailing party” attorney’s fees are awarded in suits over liens and payment bond claims. Rather than relying on long-established precedent which requires a court to look at the case as whole to determine which party “prevailed” on the significant issues in a payment dispute, the change sought by material suppliers would have awarded attorney’s fees to the supplier or subcontractor if they recovered any amount at all in the litigation, even $1.

UPDATE: AGC has been the only construction group vocally opposed to this proposed change in the law. During the run-up to the 2013 Session, material suppliers again initiated a discussion on this topic. While AGC offered a possible compromise on one of the issues raised in the material suppliers’ proposal, no agreement could be reached on their broader agenda. AGC will have to remain vigilant throughout the Session to ensure that this very bad attorney’s fee provision does not get amended onto a construction-related bill.

PUBLIC PROCUREMENT OF DESIGN &“CM” SERVICES STATUS: PENDING
SB 1002 - Sen. Darren Soto (D - Kissimmee) AGC POSITION: OPPOSE
HB 739 - Rep. Larry Metz (R - Groveland)

The “Consultants’ Competitive Negotiation Act” (s. 287.055) allows public entities to procure services within the practices of architecture, engineering, landscape architecture, and surveying and mapping, as well as construction management and project management services, through a competitive qualifications-based selection process.

Once firms are ranked based upon their qualifications, the public entity conducts negotiations with the top-ranked firm, during which fees are a negotiated item. If the public entity and the top-ranked firm cannot come to an agreement, then the public entity may terminate those negotiations and begin negotiations with the second-ranked firm (and so on) until an agreement satisfactory to the public entity is reached.

The CCNA process, adopted in Florida in the 1970’s, is used by federal agencies and by 47 of the 50 states. It is also the prevailing method for procuring similar services in the private sector. This process contrasts with the more traditional competitive bidding method in which bids end up primarily ranked based upon price.

The CCNA responds to a variety of concerns about applying a strict “low-bid” scenario to these types of design and construction services, e.g., stifling innovative design and construction solutions, the resulting loss of larger cost savings in both the construction and operation of public facilities, public safety concerns, and the practical inability of public owners to precisely define the scope of work early in the design process.

For the third year running, bills have now been filed to directly insert price back into the vendor selection process. The bills for 2013 would allow a public owner to use a two-stage “best value” selection process. In the first stage, the public entity would evaluate firms using the qualifications-based criteria established in current law and “short-list” several firms. In the second stage, the public entity would solicit cost proposals from the short-listed firms and select the firm representing the “best value,” with the cost factor comprising no more than 50% of the firm’s total score.

UPDATE: Historically, this bill has been opposed by AGC, as well as the architects and engineers. To date, the bill has not been heard in a legislative committee.

BACKGROUND CHECKS ON SCHOOL CONTRACTORS STATUS: PENDING
SB 318 - Sen. Denise Grimsley (R - Sebring) AGC POSITION: SUPPORT
HB 21 - Rep. Keith Perry (R - Gainesville)

Florida law requires individuals who work in, or provide services to, public schools and school districts to undergo a fingerprint-based state and federal criminal background check before being permitted access to school grounds. The background screening standards vary depending upon the individual’s duties, whether or not the individual is a school district employee, and the degree of contact the individual has with students. Currently, there is no required uniform, statewide identification badge that signifies that a non-instructional contractor has satisfied background screening requirements. This bill requires the Department of Education (DOE) to create a uniform, statewide identification badge signifying that a non-instructional contractor has satisfied the specified background screening requirements, which would be valid for 5 years. The badge must include a photograph of the contractor and be recognized by each Florida school district. School districts must issue the badge to a contractor if he or she is a U.S. resident and citizen or permanent resident alien; 18 years of age or older; and meets the specified background screening requirements. DOE would determine a uniform cost that a school district may charge for the badge, which would be borne by the recipient.

UPDATE: SB 318 passed successfully through the first of its three legislative committees this week. HB 21 has not yet been heard.

BAN ON LOCAL SICK LEAVE ORDINANCES STATUS: PENDING
SB 726 - Sen. David Simmons (R - Altamonte Springs) AGC POSITION: SUPPORT
HB 655 - Rep. Steve Precourt (R - Orlando)

In 2012, a petition drive in Orange County sought to place before local voters a proposed ordinance that would require all employers to offer prescribed sick leave benefits to their employees when they are sick or caring for a sick family member. Employers with 15 or more employees would be required to provide paid sick time, with employees accruing one hour of sick time for every 37 hours worked, capped at 56 hours in a calendar year. Employers with fewer than 15 employees would not have to offer paid sick time, but those employers could not retaliate against workers who take unpaid sick time. While procedural wrangling kept the proposed ordinance off the ballot in Orange County in the fall of 2012, court action has now forced the Orange County Commission to place the proposal before local voters in August 2014. In the wake of these events, state legislators are advancing different bills that would prohibit local governments from adopting ordinances requiring private employers to offer sick leave to their employees. UPDATE: Having advanced through the last of its legislative committees this week, HB 655 would broadly prohibit local governments from mandating all kinds of employee benefits, including health and disability benefits, sick leave and vacation time, and retirement benefits. On the other side of the Capitol, SB 726 is limited to prohibiting local regulation of sick leave, but the bill would adopt some new statewide requirements for sick leave for those employees working a minimum of 1,250 hours annually: five days of documented sick time per year; one extra day per year for a documented medical emergency; and employer accommodation of up to five doctor or dentist appointments per year. As of this date, SB 726 has not yet been heard in committee.

BAN ON WAGE PROTECTION ORDINANCES STATUS: PENDING
SB 1216 - Sen. Rob Bradley (R - Orange Park) AGC POSITION: SUPPORT
HB 1125 - Rep. Tom Goodson (R - Titusville)

A few years ago, Miami-Dade County passed a local ordinance to regulate “wage theft”-- the underpayment or nonpayment of wages earned. The ordinance sets up a local quasi-judicial process through which wage theft claims can be reported and processed. Backed by unions, the ordinance primarily targets industries that have a significant number of minimum wage, low-wage, or day labor workers, such as agriculture, restaurant/lodging, construction, and retail. Palm Beach County has considered a similar ordinance, and one was recently adopted in Broward County. Of course, numerous federal and state laws already address issues of wage protection and the unfair treatment of workers. Laying on top of this established legal framework a series of inconsistent local regulations and processes that vary from one city or county to the next will impose unnecessary additional burdens and expenses on Florida employers.

As in past years, bills have been filed in the 2013 Session to preempt local governments from passing these kinds of wage protection ordinances.

UPDATE: With its first hearing scheduled for next week, SB 1216 will likely be amended to create a statewide system for addressing wage theft complaints, granting exclusive jurisdiction of such claims to the county courts. The employee would be required to serve a pre-suit notice on the employer, identifying the amount owed and the relevant work dates and hours. The employer would then have 15 days to resolve the matter before the employee could bring a suit in county court. The aggrieved worker could recover only the compensation due and owing, with no addition for attorney’s fees or costs. Local governments would be prohibited from adopting any quasi-judicial processes for resolution of wage theft claims, but they could adopt programs to help workers pursue their claims in county court. The Miami-Dade ordinance would be saved from preemption and would remain in place, but it could apply only to an employer with gross sales of more than $500,000. HB 1125 has not yet been scheduled for a committee hearing.

BAN ON LOCAL BID PREFERENCES STATUS: PENDING
SB 684 - Sen. Alan Hays (R - Umatilla) AGC POSITION: SUPPORT
HB 307 - Rep. John Tobia (R - Melbourne Beach)

This bill would prohibit any local ordinance or regulation that grants a preference to a “local” bidder based upon the bidder maintaining a business office or principal place of business in the local jurisdiction, the bidder hiring personnel or subcontractors from within the jurisdiction, or the bidder paying local taxes, assessments, or duties. This prohibition would apply to any local public construction project for which payment is to be made in whole or in part from funds appropriated by the state.

In addition, the bill would require each state agency, university, college, school district, or other political subdivision of the state procuring construction services to award a bid preference to Florida-based businesses. If the low bidder on a Florida project is from a state that awards its own in-state preference, then the same degree of preference would be awarded to the Florida-based bidders. If the low bidder is from a state that does not award its own in-state preference, then Florida-based bidders would receive a 5% preference.

UPDATE: HB 307 passed successfully through its first legislative committee this week. SB 684 has not yet been heard. AGC’s experience has been that, while a legislator will often oppose local bid preferences in the abstract, that legislator often changes his or her position once they understand that: (a) one or more local governments in their legislative district have a local bid preference; and (b) the local contractors in that jurisdiction support the bid preference.

DESIGN PROFESSIONAL LIABILITY STATUS: PENDING
SB 286 - Sen. Joe Negron (R - Palm City) AGC POSITION: OPPOSE
HB 575 - Rep. Kathleen Passidomo (R - Naples)

As you may recall, the architects and engineers championed a bill in 2010 to limit their malpractice liability. Under current law, individual design professionals are personally subject to malpractice claims, regardless of what the contract between the employing design firm and the project owner or general contractor may provide regarding limitations on the design firm’s contractual liability, required insurance coverages, etc.

The 2010 bill would have granted immunity to individual design professionals and eliminated all malpractice claims with respect to damage to the project itself. A breach of contract action, subject to the liability limitations and insurance requirements of the contract, would control all questions of liability for such damages caused by faulty design work. For damages arising from personal injuries or from collateral property damage, a professional malpractice claim against a design professional would still exist. The 2010 bill passed the Senate (33-4) and the House (111-2). Ultimately, however, Governor Crist vetoed the bill.

The same bill was resurrected in the 2011 Session. After intense lobbying by a coalition comprised of AGC, other construction groups, condominium owners, and trial lawyers, the Senate version was voted down in its first legislative committee early in the Session and advanced no further in either chamber.

After taking a year off in 2012, the architects and engineers have advanced a re-tooled bill in 2013. Instead of granting an outright statutory immunity to individual architects and engineers, the new bill is premised upon giving the project owner the “right” to waive in advance any malpractice claims against those parties. The bill allows an owner (or general contractor) entering into a contract with a design firm to waive any potential malpractice claims against the firm’s individual professionals if:

• The contract is made between the business entity and a claimant or another entity for the provision of services to the claimant;
• The contract does not name an individual employee or agent as a party to the contract;
• The contract prominently states that an individual employee or agent may not be held individually liable for negligence;
• The business entity maintains any professional liability insurance required under the contract; and
• Any damages are solely economic in nature and do not extent to persons or property not subject to the contract.

UPDATE: While AGC has repeatedly testified against this bill and is spearheading the same coalition that was able to defeat it in 2011, the re-tooled SB 286 has already successfully advanced through two of its three legislative committees. In part, the rapid progress of the bill may be a byproduct of the fact that the bill sponsor, Sen. Negron, is currently the powerful chair of the Senate Appropriations Committee and is likely to be a future Senate President. Sen. Negron was also the original sponsor of the earlier versions of the bill in 2010 and 2011. This week, HB 575 also moved through the first of its three legislative committees in the House.

ELECTRICAL JOURNEYMAN REQ’TS STATUS: PENDING
SB 346 - Sen. Darren Soto (D - Kissimmee) AGC POSITION: OPPOSE

Current law allows a county or city to adopt an ordinance requiring one electrical journeyman to be present on an industrial or commercial new construction site of 50,000 gross square feet or more when electrical work in excess of 77 volts is being performed.

The bill would remove this provision and replace it with a statewide requirement that one electrical journeyman must be present on any industrial or commercial new construction site of 5,000 gross square feet or more when electrical work in excess of 98 volts is being performed.

AGC opposes any such state mandate. The decision on how any particular job should be staffed should be left to the electrical contractor and should not be dictated by state law.

UPDATE: SB 346 has not been heard in any legislative committee. Because there is no companion bill in the House, this issue will likely not advance any further in the 2013 Session.

BAN ON “PROJECT LABOR AGREEMENTS” STATUS: PENDING
SB 1118 - Sen. Alan Hays (R - Umatilla) AGC POSITION: SUPPORT
HB 181 - Rep. Charles Van Zant (R - Palatka)

“Project labor agreements” (PLA’s) are sometimes imposed by government entities on public construction projects and typically require that the contractor hire all workers through union halls, that nonunion workers pay dues for the length of the project, and that the contractor follow union rules on pensions, work conditions and dispute resolution. In 2009, President Obama signed Executive Order 13502, which allows federal agencies to require contractors on large-scale government construction projects to enter into PLA’s as a condition of a contract award.

This bill prohibits government entities from requiring that a contractor, subcontractor, supplier or carrier on a public works project enter into an agreement with a labor union and prohibits government entities from restricting otherwise qualified/licensed/certified bidders from doing any of the work described in a bid document.

The bill also limits the ability of government entities to require a contractor, subcontractor, supplier or carrier on a public works project to: pay employees a predetermined amount of wages or wage rate; provide employees a specified type, amount, or rate of employee benefits; control or limit staffing; recruit, train, or hire employees from a designated or single source; designate any particular assignment of work for employees; participate in proprietary training programs; or enter into any type of project labor agreement.

UPDATE: Neither bill has yet been scheduled for a legislative committee hearing.

LIMITING LOCAL GOV’TS SELF-PERFORMING WORK STATUS: PENDING
SB 602 - Sen. Dorothy Hukill (R - Port Orange) AGC POSITION: SUPPORT
HB 687 - Rep. Charles McBurney (R - Jacksonville)

The long-standing policy of this state has been to require local governments to put public construction work out for competitive bid. This policy maximizes the efficient use of public funds, with fair and open competition among experienced private sector contractors delivering the best possible project to the community at the lowest possible price for taxpayers. Under current law, local governments must competitively award all construction work with a value in excess of $200,000 (as adjusted for inflation), unless a recognized statutory exception applies, e.g., repairing damage from natural disasters or where a dangerous condition exists, repairing public utilities, etc.

Some local governments, however, are abusing these exceptions to get around the state’s competitive bidding requirements. The most frequently abused statutory exception to competitive bidding is one that allows a local government to “self-perform” construction work with its own employees and equipment if the local government simply determines that it is “in the public’s best interest.”

The referenced bills would repeal this exception to competitive bidding. Both bills were strongly opposed by local governments.

UPDATE: Neither bill has yet been scheduled for a legislative committee hearing.

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