February 2008 Position Statement

AHEAD, an organization of 30 construction-related associations, seeks to advance state public policy on items of general agreement within the construction industry. The principal advocacy goal of AHEAD for the 2008 legislative session is to defeat any new business taxes which would put Illinois’ construction industry at a competitive disadvantage. More generally, AHEAD presents the following position statements:

Capital Construction Program. The lack of a significant statewide capital program since 1999 has been a detriment to job growth and has been one factor in Illinois lagging the midwest and the nation in economic growth. Just as important, it has allowed Illinois’ infrastructure to deteriorate, in some cases to dangerous levels. AHEAD SUPPORTS a new statewide capital construction program that will leverage existing and new federal construction monies.

Collectively Bargained Workers’ Compensation. Collectively bargained workers compensation, or “bargained comp,” legislation is simply authority by the legislature for two entities to establish, through collective bargaining, an alternative dispute resolution system for workers’ compensation. Bargained comp neither increases nor decreases benefits to an employee and is not mandatory upon any employer or employee. Bargained comp is permissive authority for an employer and employee representatives to create a program that assists the employee and employer through quicker access to quality medical care, quicker dispute resolution, and a faster return to work for employees. AHEAD SUPPORTS establishment of permissive statutory authority for bargained comp in Illinois.

Contractor Licensure. While AHEAD agrees with many measures to eliminate bad actors from the marketplace, we OPPOSE legislation which creates a blanket state licensure requirement for construction contractors. Non-trade specific general state licensure is not a panacea to rid the State of the type of fly-by-night contractors such legislation seeks to eliminate. Such actors typically disappear at the hint of trouble, leaving the State little recourse regardless of whether a state license exists or does not. Strict enforcement of existing law which clamps down on illegitimate business practices is a more efficient tool. Many specialty contractors currently have effective licensure statutes and AHEAD takes NO POSITION on the variety of specific trade-centered licensure laws currently on the books, as well as those which may be proposed this year.

General Business Taxes. AHEAD OPPOSES the enactment, increase or expansion of general business taxes such as the gross receipts tax, the corporate alternative minimum tax, or other tax plans, which serve to decrease competition and job creation in the construction industry and provide a competitive disadvantage for the Illinois construction industry when compared to surrounding states.

Hours Paid vs. Hours Worked. Construction employers in Illinois pay workers’ compensation rates based upon their payroll rather than upon the amount of hours their employees work. This rate system, known as “dollars v. hours”, encourages lower wages for workers and punishes employers who choose to pay higher wages. It makes more sense to base workers compensation premium on the number of hours worked, a truer measure of potential risk than the wage of the worker. Why would a higher wage worker be more at risk for an accident than a lower wage worker? AHEAD SUPPORTS a modification of workers compensation premium computation from dollars paid to hours worked.

Joint & Several Liability. SB 1296 (Cullerton/Hamos) alters Illinois’ joint and several liability statute in a manner detrimental to construction contractors. Even the safest construction sites have accidents, which many times lead to lawsuits against contractors working on the same project who have little or nothing to do with the incident that occurred. SB 1296 would create situations in which a contractor, who may be found only 5% liable, could be held responsible to pay 95% of the financial award. Further, it would unfairly coerce contractors who did nothing wrong to settle a claim solely to avoid the possibility of paying out a large award. AHEAD is OPPOSED to SB 1296 or any similar legislation.

Payroll Tax. Illinois’ construction industry firmly believes in providing quality health insurance to our employees. Many, if not all, of our members provide substantial health benefits to their employees which far exceed the 4% standard of total cost of healthcare as compared to payroll in the Governor’s most recent plan. AHEAD is fundamentally OPPOSED to the payment of a payroll tax which would be held by the State and remitted back to contractors at a later date. Our industry tends to be a high volume, low margin business where such a holdback would create tremendous hardship, particularly on smaller firms.

Responsible Bidder. Responsible bidding is the idea that public construction projects paid for by taxpayer money should be awarded to the safest, most qualified company available to perform the work. Responsible bidding requirements include such things as: assuring that contractors have the proper business registrations; proof of past compliance with environmental, labor and safety laws; proof of relevant insurance coverage; compliance with prevailing wage statutes; and other criteria which indicate a greater degree of financial and structural success for capital projects. AHEAD SUPPORTS reasonable responsible bidder protections for entities bidding public works.

Structural Work Act. The 1995 repeal of Structural Work Act (“SWA”) eliminated the dual system of strict liability, and made Illinois like 48 other states that rely on Workers’ Compensation laws to provide a single, no-fault means of recovery for workplace injuries. The 1995 repeal kept in place the ability of injured workers, even while recovering under Workers’ Compensation, to pursue tort actions in court against any defendant based on fault. Re-instatement of SWA would have an immediate and dramatic detrimental impact on state construction work, without any corresponding public or employee benefit. AHEAD OPPOSES re-instatement of SWA or passage of any similar legislation.

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