As a Florida General Contractor, What Would Your Business Look Like In a Florida Without AGC?
As a wise man once said, “No man’s life, liberty or property are safe while the Legislature is in session.” As a commercial general contractor, your state legislature in Tallahassee deals with a wide variety of issues year-in and year-out that can have a profound impact on your business – either positive or negative. On many of these issues, your interests as a general contractor will frequently differ from those of others involved in the construction process, e.g., owners, lenders, subcontractors, suppliers, architects, engineers, etc.
While there are over 25 organizations in Tallahassee actively representing these other construction participants, Florida’s Associated General Contractors is the only organization in Tallahassee dedicated to defending the interests of the state’s commercial general contractors.
Year after year, thanks to general contractors all over the state who dedicate their experience, expertise, time, and resources, AGC leads the charge in shaping important legislation that impacts the bottom line of every general contractor in Florida. Here are just a few examples:
The Construction Bonds Bill
HB 1247 was the AGC Florida Council’s priority bill in the 2019 legislative session. This bill, sponsored by Rep. Perez & Sen. Stargel, allows a general contractor to recover attorney’s fees if a surety refuses to perform under a subcontractor’s performance bond. It also creates a uniform”notice of nonpayment” letter, requires the notice to be submitted under oath and establishes penalties for fraud.
Preserving “Pay-When-Paid” Clauses
AGC has successfully fought off numerous attempts to abolish “pay-when-paid” clauses, which would ultimately require the contractor to guarantee the payment of all subs, suppliers, etc., regardless of whether the owner ever pays the contractor.
Reducing the “Statute of Repose”
In the recent past, contractors could be sued for up to 15 years after a Florida construction project was completed. AGC successfully passed legislation to reduce Florida’s 15-year liability period down to 10 years, and efforts are now underway to reduce this period even further.
AGC has repeatedly fended off efforts to place statutory caps on retainage or to force “line-item” release of retainage.
Facilitating the Resolution of Construction Defect Claims
In 2015, AGC passed legislation to modify the “notice-and-cure” process established in Chapter 558, Florida Statutes, to help speed the resolution of construction defect claims and reduce the need for litigation. These modifications include requiring the owner to identify the location of each alleged construction defect and expanding the exchange of relevant documents between the claimant and the contractor. This legislation also clarified that the Chapter 558 process and certain statutory warranties are triggered by the local government’s issuance of any certificate of occupancy that allows for occupancy or use of the entire building or improvement, regardless of what the local government might call that document, e.g., a “temporary certificate of occupancy.”
Improving the Lien Law
AGC has supported many improvements to the lien law to make it more workable for contractors. At the same time, AGC has opposed repeated efforts to make the law even more complex and costly to administer, e.g., making the contractor liable for sub/supplier attorney’s fees if they recover as little as $1, a “rolling” notice to owner/contractor that could be served at any time, etc.
Maintaining the Availability of Surety Bonds
Over the years, court decisions have unreasonably expanded the scope of bond claims, as well as the length of time for bringing claims. These developments threatened the ability of Florida contractors to obtain bonds and spurred AGC to repeatedly pass statutory changes to address these issues.
Keeping Workers’ Compensation Premiums Low
Bills are filed most every year to undo the AGC-backed workers’ compensation reforms passed in 2003 that finally brought some sanity to the state’s workers’ compensation system. The 2003 reforms resulted in premium savings of over 60% to general contractors. Adverse court decisions must also be reacted to, like one several years ago requiring the passage of legislation to reinstitute a cap on claimant attorney’s fees. Several new cases are making their way through Florida’s courts right now, any one of which may require swift legislative action to counter.
Avoiding Mandatory Lien/Bond Waiver Forms
AGC has successfully opposed attempts in recent years to mandate the use of statutorily-prescribed forms for the waiver of lien/bond claims by a subcontractor or supplier. This mandate would render any other terms unenforceable, eliminating a general contractor’s ability to require additional waiver terms or to “pass through” additional waiver terms insisted upon by the owner or lender.
Opposing Burdensome Local Regulation of Contractors
Faced with mounting budget pressures, local governments have launched repeated attempts in the Legislature to obtain the authority to fine and discipline state-licensed contractors – in effect becoming a second regulator. AGC has successfully opposed these efforts to impose duplicative regulation.
Opposing Locally-Mandated Employee Benefits
In 2013, AGC helped pass legislation that broadly prohibits local governments from requiring private businesses to provide most kinds of employee benefits, including health and disability benefits, sick leave and vacation time, and retirement benefits.
Minimizing Unemployment Compensation Taxes (“UC”)
Recognizing that higher UC taxes were inevitable after the Great Recession, AGC successfully passed comprehensive reforms in 2010 and 2011 to minimize the tax burden on employers, focus the system on getting the unemployed back to work, and ensure that available tax revenues are used to pay benefits only to workers who are unemployed through no fault of their own. This legislation resulted in a two-year tax savings to Florida businesses of over $1.8 billion. AGC also successfully opposed an increase in the maximum UC tax rate on employers, which would have disproportionately affected the construction industry.
Repealing “Joint and Several” Liability
AGC backed the successful repeal of “joint and several liability,” ensuring that a party can no longer be held responsible for paying damages that are the fault of another.
Limiting Local Business Taxes
In 2011, AGC helped pass legislation to limit the scope of local government business taxes, in response to an adverse Attorney General opinion.
Eliminating Sales Tax Liability for the General Contractor on Public Work
AGC passed legislation in 2010 eliminating the sales tax liability of a contractor where a governmental entity directly purchases building materials on a tax-exempt basis but fails to comply with Department of Revenue requirements.
Improving the Public Bid Process
In 2011, AGC passed legislation to ensure a fairer process in which bidders cannot “preview” their competitors’ proposals and bid presentations. In 2012, AGC passed legislation to require local governments to conduct bid openings in public meetings.
Expanding Procurement Opportunities for Construction Management
AGC successfully worked both to preserve and expand the ability of public entities to procure construction management services, including turning back efforts to make price a primary initial selection criterion.
Speeding Payment on Local Government Projects
In 2011 and 2012, AGC passed legislation to speed the often lengthy and cumbersome payment process on local government projects. Among these changes was eliminating the practice of many local governments that conditioned payment on the contractor securing unnecessary bond waivers and releases from all subcontractors and suppliers.
Expanding Opportunities for Public-Private Partnerships
AGC successfully backed legislation in 2013 authorizing counties, cities, school boards, and regional entities to use “public-private partnerships” in the delivery and financing of public buildings and infrastructure projects.
Authorizing Electronic Building Plans
AGC passed legislation in 2012 authorizing local building officials to accept electronic plans.
Expanding State Funding for Education Facilities
In 2014, AGC passed legislation to significantly enhance the state funding available for construction and maintenance of facilities for public schools and universities.
Authorizing Private Plans Review and Inspections
In the face of declines in the responsiveness of local building departments, AGC successfully passed an alternative system that allows owners to use private providers to perform plans review and inspection services, with numerous improvements made to that system over the years.
AGC passed legislation several years ago to put specific conditions on a public entity’s use of an owner-controlled insurance program (“OCIP”) in connection with a public construction project.