American Subcontractors Association

	Legislative/PAC ASA of North Texas Wine Tasting & PAC Fundraiser Click here for the Flyer & Registration Form! Date: Thursday, January 31, 2008 Time: 5:30-6:30 p.m. VIP Reception 6:30-9:00 p.m. Wine Tasting & Dinner Program Location: Frontiers of Flight Museum Address: 6911 Lemmon Avenue, Dallas, TX 75209 Cost: $45/per person Reservation Deadline: January 18, 2008 Sponsors: ASA of Texas & Texas Construction Association CONGRATULATIONS!!! Texas Governor Rick Perry signed the Contingent Payment Bill (SB324). Thanks to all ASA Members that got involved over the many sessions it took to get this valuable piece of Legislation turned into law. We’ve attached a summary of the Bill & what it means for YOU. Bill Summary!! Joint TCA/AGC Press Release on Contingent Payment TCA Fall Newsletter 2006 (pdf format) TCA Legislative News - May 18, 2007 (pdf format) TCA Legislative News - May 25, 2007 (pdf format) Texas Construction Association - Texas Legislative News – April 20, 2007 INDEMNIFICATION BILL PASSES THE SENATE ON THURSDAY. By a vote of 23 to 6, the Senate passed SB 346, authored by Sen. Robert Duncan. The bill passed essentially as filed and prohibits the use of broad form indemnification clauses, additional insured provisions and waivers of subrogation involving workers compensation. No amendments were placed on the bill when it was heard by the full Senate. Only a minor amendment was placed on the bill when it was heard in Committee. The measure now goes to the House of Representatives for consideration. SENATE CONTINGENT PAYMENT BILL PASSES HOUSE COMMITTEE. On Tuesday, SB 324, sponsored in the House by Rep. Warren Chisum, was voted out of the House Business and Industry Committee. It now goes to the Calendars Committee for consideration to be placed on the House Floor Calendar for debate of the full House. CONSOLIDATED INSURANCE PROGRAM BILL PASSES OUT OF HOUSE INSURANCE COMMITTEE. A Committee Substitute for HB 2014, authored by Rep. John Smithee, was voted out of Committee on Wednesday. It now goes to the Calendars Committee. The bill included several changes that were a result of numerous meetings and communications with the various stakeholders. The measure establishes standards and procedures when OCIPs and CCIPs are used on construction projects. The Senate companion bill, SB 354, is awaiting hearing in the Senate State Affairs Committee and may be heard next week. OTHER BILLS OR ISSUES Public Construction Alternate Delivery Bill-HB 447 by Callegari. This bill sets standards and establishes procedures dealing with public construction works and is similar to legislation passed in 2005 that was vetoed by the Governor. This measure has been reported as passing the House yesterday. After the House, it will go to the Senate for consideration. Business Tax Clean-up Bill. HB 3928 by Keffer is the measure filed to make technical corrections to the new “Business Margins Tax” measure that was passed last year. This bill passed out of the House Committee this week. As expected, it made few changes as the Legislature is still trying to assess how much revenue the tax will actually raise and will not make substantive changes until that is determined. Immigration Bills Heard in House State Affairs. Most of the immigration bills filed in the House were heard in Committee on Monday. The bills were left pending and most are not expected to move out of the Committee. LEGISLATIVE ALERTS Legislative Alerts will be sent to TCA Members at the appropriate time to contact their State Representatives and urging their support. It is very important that this contact be made. More Information on the TCA Website. If you want to look at the TCA bills that have been filed, find out who represents you or want to know more about TCA, our website address is www.texcon.org If you have specific questions, you can call TCA at 512/473-3773. Texas Construction Association - Legislative Issues for 2007 HIGH PRIORITY Limiting Use of Contingent Payment Clauses. Most contracts presented to subcontractors provide that the General Contractor does not have to pay the Subcontractor if the owner does not pay, even though the Subcontractor performs the work perfectly. A serious problem that must be corrected! A Subcontractor should be paid for properly performed work. Prohibiting Broad Form Indemnification Clauses. Another clause found in construction contracts provides that the Subcontractor indemnifies the general contractor or owner for its wrongdoing even though the Sub may have done nothing improper. These clauses should be made void. They are in direct conflict with the concept that a company should be responsible for its negligent acts. Additional Insurance/Waiver of Subrogation. Additional insured endorsements and waivers of subrogation should be restricted in their application. Additional insured endorsements effectively give the Owner the coverages of the Subcontractors policy. These endorsements should not be used only to protect the additional insured for the subcontractor's negligence. Also, with these endorsements being revamped markedly by the insurance carriers, Subcontractors face new exposure. Similarly, waivers of subrogation on workers' compensation policies shift the burden away from the responsible party in an accident. Retainage. If retainage will continue to be withheld for properly completed work, then interest should be paid. Contractors should no longer be bankers for construction projects in Texas. Consolidated Insurance Programs. Known as Owner Controlled or Contractor Controlled Insurance programs, the use of these "Wrap-Up" programs are increasing in Texas. While possibly a money saver for the Owner, the CIPs are plagued by poor administration, gaps in coverage or lack of coverage, insufficient limits, questionable safety and back to work programs, auditing practices that cause subcontractor's retainage to be withheld even longer. In many cases the exposure a subcontractor faces working on a CIP is unknown. In the 2003 session, TCA helped defeat legislation that would have required the use of OCIP's on every public project. Standards should be set for CIPs in Texas. PRIORITY Limiting Use of Reverse Auctions. Reverse auctions are being used more often in construction contracts. Last Session a bill was considered to require reverse auctions to be used on at least 10% of Public Projects. Reverse auctions are a public bid shopping procedure that creates havoc in an already complicated bidding procedure. Reverse Auctions are not a good procurement method for construction projects. School Finance and Tax Reform. The Legislature will attempt to revamp the way we finance our schools. Ultimately the Legislature will have to change our tax systems and this could change positively or negatively the impact of State taxes on your business. Your interests must be protected. Workers' Compensation Reform. Workers' Compensation Insurance was drastically changed in the 2005 session. Tinkering with the changes will undoubtedly occur and TCA will be watchful of subcontractors' interests during the review. Additionally, a solution to the sole remedy/statutory employer issue on construction projects needs to occur. March 3, 2006 Dear Fellow Risk Taker, Recognize this? "...Subcontractor shall fully protect, indemnify, and defend Contractor, Owner,...and their employees and hold them harmless from and against any and all claims, demands, causes of action, damages, and liabilities...regardless of cause or fault or negligence of Contractor, Owner,...and their employees...including their sole, joint or concurrent negligence." Are you tired of unfair contracts? Are you ready to level the playing field? The time has long past for fair contracts solely through negotiations. We need legislative changes. Instead of arguing for fair terms in every contract, make fairness the law. AGC PAC letters are going out to Subcontractors and Suppliers, followed by phone calls asking for PAC donations. Don't be fooled, AGC will always represent the interests of General Contractors before the interests of Subcontractors. If you chose to give money to an AGC PAC, ask yourself, "How much will be used AGAINST my interests?" Other associations may look after some of your interests, but the American Subcontractors Association (ASA) looks after ALL of your interests. Contractual issues for the Subcontractor are unique and unlike those of our General Contractor partners. Their solutions will not be the same as ours, nor necessarily in our interest. For example, our views for the acceptance of risk and liability are very different. As Subcontractors and Suppliers, we are asked to assume the risk attributable to the Owner, as well as the General Contractor, even though we have no means of controlling that risk. Do you realize when you agree to indemnify the GC/Owner for their own negligence, you are responsible for a loss that is completely out of your control, and the GC/Owner can come after your company? ASA teamed with TCA has made substantial gains in electing candidates who supported our issues in the past. We must have PAC DOLLARS to get issues like "Broad Form Indemnification Reform." Only through your personal financial support to ASA of Texas, continuing in partnership with the Texas Construction Association (TCA), will our Subcontractor and Supplier rights be defended. ASA North Texas has established a goal to raise $50,000 in PAC FUNDS. We hope to accomplish this by asking every Subcontractor and Supplier in North Texas to contribute a minimum of $250. Corporate checks cannot be accepted. Send your personal check immediately. Help us reach our goal. We must have your support to establish fairness in contracts. Please do YOUR part. Make checks payable to: ASAT PAC Mail to: c/o ASA North Texas 2723 Avenue E East, #717 Arlington, TX 76011 "Why this is important to YOU"...Please contact Jim Hollis or Brian Chester if you have questions. Jim Hollis, Baker Drywall Brian Chester, United Mechanical ASA North Texas President 2005-06 ASA North Texas Legislative Chairman (972) 289-5534 Ext 340 (214) 803-5434