Hold on to your hard hats: Construction issues
figure prominently in upcoming session

Design/build, apprenticeship tax credit
bills are among those to watch

By Chris Thompson
Editor at Large

The upcoming 2001-2002 session of the state Legislature will arrive packed with fledgling bills that could impact nearly every facet of the construction industry.

The bills will follow various paths once the session kicks into gear. Some authors will push for stand-alone legislation, while others opt for inclusion in the upcoming biennial budget. Still others, such as those seeking adoption of a proposed apprenticeship tax credit, plan to take any and all avenues available for approval.

The Daily Reporter set the stage for the next session by investigating many of the bills on the legislative horizon and speaking with the legislators behind the proposals that hold the greatest potential influence on the state's construction industry.

The bills to keep an eye on include:

Apprenticeship tax credit

The apprenticeship tax credit proposal is a plan to give tax credits to employers whose employees are apprentices or involved in apprenticeship programs, said state Sen. Richard Grobschmidt, D-South Milwaukee. He said the idea is to provide incentives to contractors and to expand apprenticeship programs by providing credits based on apprentice salaries.

"It's a sliding scale where the longer an apprentice is in the program, the greater the credit," Grobschmidt said.

Grobschmidt and Rep. Daniel Vrakas, R-Hartland, said they plan to spearhead legislation for the tax credit on a variety of fronts in the next session.

Grobschmidt said he would introduce stand-alone legislation in January or February, and he plans to write a letter to Gov. Tommy G. Thompson seeking inclusion of the measure in the state budget. Grobschmidt said he also would present the tax credit to the state Council on Workforce Investment.

"We're actually trying to cover all the bases with separate legislation," he said. "I hope that with the support of the business community and with organized labor, we have a good chance if it's brought to the Legislature by a cooperative effort."

Vrakas, who is a member of the Joint Legislative Council special committee on labor shortage, said the proposal could also pass through the committee.

"I think that's as good a vehicle as any," he said.

Grobschmidt said the nature of the upcoming state budget represents the biggest hurdle for the proposal.

"The difficult part will be that a tax credit is a cost, and we do have a tight budget coming up so it would be an area of concern to some people," he said.

Private prisons

The debate over whether the state should adopt legislation to lease the privately built Stanley Prison will heat up once again in the upcoming session, said Rep. Scott Suder, R-Abbotsford. He said the Assembly in the last session adopted Stanley Prison legislation twice on the floor and once in the state budget only to have each attempt stymied in the Senate.

"If I were a betting man, I would say the Legislature is not unwilling but more cautious because of the Senate majority leader's opposition," Suder said. "I think the chances with regard to the Stanley Prison are very good, and I'm hoping Sen. Chuck Chvala (Senate majority leader) will be more willing to work on this matter. He never allowed it for a vote in committee or on the Senate floor, and I'm convinced we had enough votes for it to pass."

Suder said he would vote for legislation allowing the lease of privately built prisons throughout the state, but he will focus his efforts this session on the Stanley Prison.

"The only immediate possibility that we are drafting is for the authority to lease the Stanley Prison," he said. "I know other legislators might like to see prisons in their districts, but it's unlikely individuals would speculate on it because it's such a risk to invest millions and millions into what has taken the state two years to work on. It's unlikely we will see private facilities being built in the next two years."

Suder introduced a draft of Stanley Prison legislation earlier this month. He said he also has prepared a budget amendment.

Mandatory electrical licensing and inspections

State Rep. Al Ott, R-Forest Junction, said he is considering legislation for the next session that would require statewide electrical inspections. The idea stems from a stray voltage problem that has plagued rural areas for years, he said.

"There are two different issues here," Ott said. "We could have mandatory electrical certification or licensing, or we could be trying to require inspections after installations on farms, for example, because they are hit hardest by stray voltage."

The state currently offers electrical certification exams, and if electricians pass the exams, local governments that require electrical licenses must accept the state certification, said Mike Corry, state Department of Commerce Buildings Division administrator. Some local governments perform electrical inspections, but it's not a statewide program.

"Our view is that inspection programs are more important than certification programs because who puts it in isn't as important as whether or not it's put in right," Corry said.

Ott agreed, but he said he wouldn't commit to any proposal until he pulls all the interested parties together to get their take on the issue.

"We want accurate, professional wiring on farms and in rural areas, and if we get the inspections, we will be less likely to go after the licensing," he said. "I know other legislators have dealt with stray voltage, and it's a very difficult issue. It's premature to say we'll bounce anything out there without support because we're not here to drive anything down anybody's throat."

Material tax exemptions for nonprofit entities

State Rep. Glenn Grothman, R-West Bend, said he would once again propose legislation to change state law regarding tax exemptions on materials purchased for construction projects of nonprofit facilities.

"We'll bring back legislation as we always have, and hopefully we'll get something in the budget this time," he said. "It has been our opinion that the Department of Revenue has exaggerated the impact of this and delayed it."

Grothman said state law allows the Department of Revenue to collect taxes on materials for nonprofit construction work if the project builder buys the supplies. He said the law runs contrary to the notion of tax exemptions for nonprofit construction.

"What happens now is a builder may buy the materials but doesn't get the exemption," he said. "On the other hand, to expect a church or something to buy the material is just horsing around. To avoid the horsing around, the builder just pays the tax."

There has been compromise in the debate as the Department of Revenue recently agreed to change the law as it applies to construction work on schools, Grothman said. He said the state currently pulls in $12 million from taxes on materials for nonprofits, and excluding schools from the law would drop the revenue to $7 million.

"I will try in the budget to up that to $12 million so all nonprofits are included," he said. "I'll introduce a bill, but, realistically, in the environment we're dealing with, it will be easier to get it in the budget. I think it's a better than 50-50 chance to at least get the schools."

Grothman said he would push hard to include all nonprofits because the law, as it stands, is simply wrong. "Any money the state takes in from contractors buying materials for building on nonprofits is ill-gotten gains," he said.

Lambeau Field transportation aid

State Rep. Phil Montgomery, R-Ashwaubenon, said he has drafted legislation to provide $9 million in state funds for transportation improvements related to the Lambeau Field renovation.

The bill authorizes the state Department of Transportation to make eight payments to the Lambeau stadium district for improvements to roads, highways, bridges and infrastructure at and around the stadium. At least some of the funding, Montgomery said, should help improve the Lombardi Avenue exit from Highway 41.

"That needs to be looked at because it's nothing to have a three- or four-mile backup during Milwaukee ticket-holder games," he said. "While the people of Brown County have stepped forward, this is a way for the people of the state to participate in the renovation."

Montgomery said he would introduce stand-alone legislation early in the next session to coincide with a similar bill introduced in the Senate by Sen. Robert Cowles, R-Green Bay. Montgomery said Gov. Tommy G. Thompson has indicated he would insert a related measure into the state budget.

"I think our chances are excellent," Montgomery said. "We're going to put it out there fairly early and get it taken care of fairly quickly."

Design/build

State representatives Antonio Riley, D-Milwaukee, and Steve Wieckert, R-Appleton, have expressed interest in taking a shot at design/build legislation that would garner industry consensus in the next session. The concept, which would change aspects of the public-bidding process, has passed through the Capitol in many forms over the past two years, only to fail in each attempt.

Riley said it's too early to say what shape design/build proposals would take in the next session, but he was optimistic about its chances.

"I couldn't say at this juncture where we're at," he said. "We haven't decided if it would be stand-alone or a budget measure, but whatever it is there would have to be consensus. I think there will be a big push in the next month, and I think we'll have a better understanding at that time."

Consensus, as always, remains the key word, and Wieckert said he isn't too hopeful about a design/build bill's chances in the next session.

"I'm dubious right now because I would like to develop consensus, and I think there is resistance in the industry to design/build," he said. "If I had to make a prediction, I don't see consensus forming. Things could change once the session starts, but I'd hate to see it go through the budget because it needs full discussion."

Tarps and mud flaps

State Rep. Marlin Schneider, D-Wisconsin Rapids, said he plans to reintroduce legislation in the next session that would require covers and mud flaps on trucks. He said he is still drafting the bill, so he doesn't know the specifics of the proposal.

"Everyone's insurance costs are rising because of damage done by a lack of little things like mud flaps or covers," Schneider said.

Schneider said the state doesn't have a law in place requiring covers or mud flaps, but he said it's necessary despite the additional costs to the construction industry.

He said he would push for stand-alone legislation before shooting for the state budget bill.

"It would be appropriate for the budget, but it's not likely to be there," he said. "I will introduce it in the beginning of the session if I have a draft."

Paycheck Protection Act

State Rep. Carol Owens, R-Oshkosh, said she is uncertain if she will reintroduce legislation governing how unions spend their members' dues. Even if she does try again, she said it's a long shot that any proposal would make it through the Legislature in the next session.

"Nothing is going to get done because we're at a gridlock, and the only chance is if the governor puts it in the budget," Owens said. "It's always going to be an issue, but I haven't made up my mind on it."

The issue revolves around unions, which collect dues to support bargaining for working conditions, health care and wages. Owens said the unions also use dues to "play games in the political arena."

"They're giving money to candidates, and the legislation I proposed said there is nothing wrong with contributing to campaigns as long as the members are willing to do it," she said. "We're saying keep them separate. I'll send my contributions to whom I choose, and you use the dues for what they're intended."

Owens said she doesn't believe the Senate would even consider paycheck protection legislation, especially after the scenario her Assembly caucus generated in the last session.

"It was a budget amendment my caucus chose to put in, and it was a good bargaining chip," she said. "They paid dearly to get rid of that."

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