Legislative Update – June 24, 2022

During the abbreviated spring 2022 legislative session, the Illinois General Assembly approved 410 bills that were sent to Governor Pritzker for his consideration. As of today, no vetoes have been issued and most bills have been decided upon by the Governor; including bills identified by ICIC that are important to the Illinois construction industry.

The issue that took up most of ICIC’s attention this spring was HB 5412 (Leader Evans, Jr./Sen. Cristina Castro). HB 5412 as amended was approved by Governor Pritzker on June 10th (P.A. 102-1076). This new law amends the Wage Payment & Collection Act and aims to hold general contractors liable for wage claims at any tier on a private construction project. ICIC strongly opposed this bill and maintained the position that there is no data to support that these wage claims stem in any significant way from union contractors. ICIC provided evidence that labor and management have long- standing remedies and processes in place to address non-payment of wages by union contractors.

As a result, ICIC successfully sought the inclusion of language exempting signatories of collective bargaining agreements from the requirements of HB 5412. We removed our opposition with the adoption of Amendment #3, which includes the following exemption language:

“Primary contractors who are parties to a collective bargaining agreement on the project where the work is being performed shall be exempt from this Section”.

This exemption will benefit union contractors by adding a layer of protection from increased and unknown liability that we anticipate will be an unintended consequence of

P.A. 101-1076. This new law is effective immediately and applies to contracts made on or after July 1, 2022.

Although ICIC and other construction industry associations representing union contractors removed their opposition to HB 5412, a long list of opponents remained. Negotiations with the remaining opponents continued, which led to a trailer bill, HB 4600 (Leader Evans, Jr./Sen. Cristina Castro). HB 4600 as amended was approved by Governor Pritzker on June 10th (P.A. 102-1065). An important provision included in this new law is the creation of the Bond Reform in the Construction Industry Task Force. The task force shall study innovative ways to reduce the cost of insurance in the private and public construction industry while protecting owners from risk of nonperformance. Administrative support will be provided by the Illinois Department of Transportation (IDOT) and recommendations shall be reported to the Illinois General Assembly no later than March 1, 2023. ICIC is actively pursuing the appointment of an ICIC member(s) to the Bond Reform in the Construction Industry Task Force.

HB 2770 as amended (Sen. Tony Munoz/Rep. Katie Stuart) was approved by Governor Pritzker on May 6, 2022 (P.A. 102-0721). This new law makes the following changes to the Illinois Procurement Code:

  • Requires the Capital Development Board (CDB) and the Illinois Department of Transportation (IDOT) to prepare quarterly reports on the status of change order requests that have not been acted upon within 45 days. The reports must be published on the CDB and IDOT websites. The first report is scheduled to be published on or before January 15, 2023.
    • Requires construction agencies procuring construction and construction- related professional services to make reasonable efforts to contract with Illinois businesses. Projects with a total construction cost of more than

$100,000 will be provided a bid preference to a responsible bidder that is an Illinois business.

  • Provides that it is the public policy of the State of Illinois for each purchasing agency to maximize the use of goods, products and materials that are produced in the United States. In addition, this new law provides that if there is a tie between two bidders or offerors who have certified that they will provide products manufactured in the United States, the bidder or offeror that certifies it will provide products manufactured in Illinois shall be given bid preference.
    • Creates the State Procurement Task Force and provides the task force shall survey State procurement processes and make recommendations to

(i) ensure that the process is equitable and efficient; (ii) provide departments with the flexibility needed to be successful; (iii) change the current structure of the procurement process; (iv) update the process to reflect modern procurement methods; (v) increase women-owned and minority-owned business participation;

(vi) increase participation by State vendors; and (vii) reduce costs and increase efficiency of State procurements. The Department of Central Management Services will provide administrative support to this Task Force. Initial findings shall be reported to the Governor and the Illinois General Assembly by November 1, 2022 and additional findings and recommendations by January 1, 2024.

  • Amends the Business Enterprise for Minorities, Women, and Persons with Disabilities Act. Provides that the Business Enterprise Council shall have the authority and responsibility to adopt a procedure to grant automatic certification to businesses holding a certification from specified entities and to develop and maintain a repository for specified non-certified vendors.

HB 5035 (Rep. Will Davis/Sen. Ram Villivalam) was approved by Governor Pritzker on May 27th (P.A. 102-0968). This new law amends the Public Construction Bond Act to provide that the Department of Transportation may implement a 5-year pilot program to allow a contractor to provide a non-diminishing irrevocable bank letter of credit in lieu of specified bond requirements on contracts under

$500,000. The projects selected by the Department of Transportation for this pilot program must be classified by the Department as low-risk scope of work contracts. P.A. 102-0968 becomes effective January 1, 2023.

HB 4772 as amended (Rep. McLaughlin/Senate Republican Leader Dan McConchie) was approved by Governor Pritzker on May 27th (P.A. 102-0954). This new law creates the County Design-Build Authorization Division in the Counties Code, thereby allowing county governments to utilize the design-build delivery method. This legislation includes scope and performance criteria for design build contracts, a two-phase procedure for selection of contracts, requirements for submission of proposals, procedures for awarding contracts, requirements of reports and evaluation of contracts and provides that nothing shall prevent a county from using a qualification-based selection process for design professionals or construction managers for design-build projects. P.A. 102-0954 becomes effective on January 1, 2023.

SB 3625 (Sen. Melinda Bush/Rep. Kathleen Willis) received Governor Pritzker’s approval on May 27th (P.A. 102-1016). This new law extends the sunset for the Capital Development Board’s statutory authority to use the design-build delivery method through 2027 and does not make any other changes to the current statute. P.A. 102- 1016 became effective immediately.

SB 2981 (Sen. Ram Villivalam/House Asst. Majority Leader Marcus Evans, Jr.) was approved by Governor Pritzker on June 15th (P.A. 102-1094). This new law allows the

Illinois Department of Transportation (IDOT) and the Tollway to utilize “Progressive Design Build” (PDB). Proponents of SB 2981 report that PDB facilitates involvement of the design-build team during the earliest stages of the owner’s project development, and PDB is becoming the preferred model for many states. P.A. 102-1094 became

effective upon receiving the Governor’s approval.

In response to the Supreme Court ruling overturning Roe v. Wade, ICIC expects

Governor Pritzker to call the Illinois General Assembly back to Springfield for a “Special Session for Reproductive Health Rights”; which is tentatively scheduled for July 6th and 7th. ICIC is monitoring the details of the Illinois General Assembly’s anticipated return to Springfield closely.

In addition, ICIC was recently made aware that the International Union of Operating Engineers (IUOE) Local 150 is circulating draft legislation aimed at expanding prevailing wage requirements to suppliers and carriers of materials for public works projects, which ICIC opposes. We are closely monitoring the possibility that the IUOE Local 150 will attempt to use the upcoming special session as an opportunity to pursue their proposed legislation.  This is a developing issue and as details continue to emerge, ICIC members will be updated accordingly. If you have any questions regarding this information, please do not hesitate to contact Jessica Newbold Hoselton by email at jnewbold@boldnewstrat.com

Previous End of Session Legislative Update – April 11, 2022

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