COMMITTEE SUBSTITUTE

FOR

H. B. 2497

(By Delegates Harrison, Williams, Staton, Miller,
Azinger, Michael and J. Martin)

(Originating in the House Committee on the Judiciary)


[March 2, 1995]


A BILL to amend and reenact section thirty-seven, article three, chapter five-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended; and to amend chapter twenty- one of said code by adding thereto a new article, designated article one-c, all relating generally to granting a preference to West Virginia resident vendors and employees who are residents of local labor markets; establishing a preference for resident vendors who bid on contracts for construction services for the construction, repair or improvement of any buildings or portions thereof; establishing a preference for resident vendors who bid on contracts for commodities, printing, equipment or services; creating the "West Virginia Jobs Act"; providing definitions; setting forth legislative policy; establishing a preference for the hiring of employees from a local labor market on all public improvements; requiring public improvement contracts to contain certain provisions conforming to the jobs act; defining a misdemeanor offense for violations of the jobs act, and establishing criminal penalties therefor; defining a cause of action for potential employees not employed because of a violation of the jobs act; and creating an exception for existing contracts.

Be it enacted by the Legislature of West Virginia:
That section thirty-seven, article three, chapter five-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted; and that chapter twenty-one of the said code be amended by adding thereto a new article, designated article one-c, all to read as follows:
CHAPTER 5A. DEPARTMENT OF ADMINISTRATION.

ARTICLE 3. PURCHASING DIVISION.

§5A-3-37. Preference for resident vendors; preference for vendors employing state residents; exceptions.

(a) Other provisions of this article notwithstanding, effective the first day of July, one thousand nine hundred ninety one thousand nine hundred ninety-five, through the thirtieth day of June, one thousand nine hundred ninety-four, in any instance involving the purchase of construction services for the construction, repair or improvement of any buildings or portions thereof, where the total aggregate cost thereof, whether one or a series of contracts are awarded in completing the project, is estimated by the director to exceed the sum of fifty thousand dollars ten thousand dollars and where the director or any state department is required under the provisions of this article to make the purchase, construction, repair or improvement upon competitive bids, the successful bid shall be determined as provided in this section. Effective beginning the first day of July, one thousand nine hundred ninety-two, one thousand nine hundred ninety-five in any instance that a purchase of commodities, or printing, equipment or services by the director or by a state department is required under the provisions of this article to be made upon competitive bids, the successful bid shall be determined as provided in this section. The secretary of the department of tax and revenue shall promulgate any rules and regulations necessary to: (i) Determine that vendors have met the residence requirements described in this section; (ii) establish the procedure for vendors to certify the residency requirements at the time of submitting their bids; (iii) establish a procedure to audit bids which make a claim for preference permitted by this section and to reject noncomplying bids; and (iv) otherwise accomplish the objectives of this section. In prescribing the rules and regulations, the secretary shall use a strict construction of the residence requirements set forth in this section. For purposes of this section, a successful bid shall be determined and accepted as follows:
(1) From an individual resident vendor or from a partnership, association a corporation resident vendor which has maintained its headquarters or principal place of business within West Virginia continuously for two years immediately preceding the date on which the bid is submitted, provided such vendor who has resided in West Virginia continuously for the four two years immediately preceding the date on which the bid is submitted, has paid personal property taxes pursuant to article five, chapter eleven of this code on equipment used in the regular course of supplying services of the general type offered, or has paid business taxes pursuant to section one, article one, chapter eleven of this code, and in the case of a vendor selling tangible personal property, a resident vendor is one who has a stock of materials held in West Virginia for sale in the ordinary course of business, which stock is of the general type offered, and which is reasonably sufficient in quantity to meet the ordinary requirements of customers. or from a partnership, association, corporation resident vendor or from a corporation nonresident vendor which has an affiliate or subsidiary which employs a minimum of one hundred state residents and which has maintained its headquarters or principal place of business within West Virginia continuously for four years immediately preceding the date on which the bid is submitted, If the vendor's bid does not exceed the lowest qualified bid from a nonresident vendor by more than two and one-half percent seven and one-half percent of the latter bid, and if the vendor has made written claim for the preference at the time the bid was submitted. Provided, That for purposes of this subdivision, any partnership, association or corporation resident vendor of this state, which does not meet the requirements of this subdivision solely because of the continuous four-year residence requirement, shall be considered to meet the requirement if at least eighty percent of the ownership interest of the resident vendor is held by another individual, partnership, association or corporation resident vendor who otherwise meets the requirements of this subdivision, including the continuous four-year residency requirement: Provided, however, That the secretary of the department of tax and revenue shall promulgate rules and regulations relating to attribution of ownership among several resident vendors for purposes of determining the eighty percent ownership requirement; or
(2) From a resident vendor, if, for purposes of producing or distributing the commodities or completing the project which is the subject of the vendor's bid and continuously over the entire term of the project, on average at least seventy-five percent of the vendor's employees are residents of West Virginia who have resided in the state continuously for the two immediately preceding years and the vendor's bid does not exceed the lowest qualified bid from a nonresident vendor by more than two and one-half percent of the latter bid, and if the vendor has certified the residency requirements of this subdivision and made written claim for the preference, at the time the bid was submitted; or
(3) From a nonresident vendor, which employs a minimum of one hundred state residents or a nonresident vendor which has an affiliate or subsidiary which maintains its headquarters or principle place of business within West Virginia and which employs a minimum of one hundred state residents, if, for purposes of producing or distributing the commodities or completing the project which is the subject of the vendor's bid and continuously over the entire term of the project, on average at least seventy-five percent of the vendor's employees or the vendor's affiliate's or subsidiary's employees are residents of West Virginia who have resided in the state continuously for the two immediately preceding years and the vendor's bid does not exceed the lowest qualified bid from a nonresident vendor by more than two and one-half percent of the latter bid, and if the vendor has certified the residency requirements of this subdivision and made written claim for the preference, at the time the bid was submitted; or
(4) From a vendor who meets either the requirements of both subdivisions (1) and (2) of this subsection or subdivisions (1) and (3) of this subsection, if the bid does not exceed the lowest qualified bid from a nonresident vendor by more than five percent of the latter bid, and if the vendor has certified the residency requirements above and made written claim for the preference at the time the bid was submitted.
(b) If the secretary of the department of tax and revenue determines under any audit procedure that a vendor who received a preference under this section fails to continue to meet the requirements for the preference at any time during the term of the project for which the preference was received the secretary may: (1) Reject the vendor's bid; or (2) assess a penalty against the vendor of not more than five percent ten percent of the vendor's bid on the project.
(c) Political subdivisions of the state including county boards of education may grant the same preferences to any vendor of this state who has made a written claim for the preference at the time a bid is submitted, but for the purposes of this subsection, in determining the lowest bid, any political subdivision shall exclude from the bid the amount of business occupation taxes which must be paid by a resident vendor to any municipality within the county comprising or located within the political subdivision as a result of being awarded the contract which is the object of the bid; in the case of a bid received by a municipality, the municipality shall exclude only the business and occupation taxes as will be paid to the municipality: Provided, That prior to soliciting any competitive bids, any political subdivision may, by majority vote of all its members in a public meeting where all the votes are recorded, elect not to exclude from the bid the amount of business and occupation taxes as provided in this subsection.
(d) If any of the requirements or provisions set forth in this section jeopardize the receipt of federal funds, then the requirement or provisions are void and of no force and effect for that specific project.
(e) If any provision or clause of this section or application thereof to any person or circumstance is held invalid, the invalidity shall not affect other provisions or applications of this section which can be given effect without the invalid provision or application, and to this end the provisions of this section are severable.
(f) This section may be cited as the "West Virginian Vendor's Preference Act of 1990 1995."
CHAPTER 21. LABOR.

ARTICLE 1C. EMPLOYMENT OF RESIDENTS OF LABOR MARKET.
§21-1C-1. Short title.
This article may be cited as the "West Virginia Jobs Act."
§21-1C-2. Definitions.
As used in this article:
(a) The term "construction" means any construction, reconstruction, improvement, enlargement, painting, decorating or repair of any public improvement let to contract in an amount equal to or greater than twenty-five thousand dollars; further, the term "construction" means any construction, reconstruction, improvement, enlargement, painting, decorating or repair of any private improvement let to contract in an amount equal to or greater than twenty-five thousand dollars as a result of the issuance of economic development bonds issued by the state or any of its political subdivisions to finance any such construction project; further, the term "construction" means any construction, reconstruction, improvement, enlargement, painting, decorating or repair of any private improvement let to contract in an amount equal to or greater than twenty-five thousand dollars as a result of the granting of any tax incentives or tax credits to any person, corporation, partnership of other entity by the state or any of its subdivisions.
The term "construction" does not include temporary or emergency repairs.
(b) The term "employee" includes any person engaged or permitted to perform hourly work for wages by a person, firm or corporation in the construction industry. The term "employee" does not include: (1) Bona fide employees of a public authority or individuals engaged in making temporary or emergency repairs; (2) bona fide independent contractors; or (3) salaried supervisory personnel necessary to assure efficient execution of the employee's work.
(c) The term "employer" means any person, firm or corporation employing one or more employees on any public improvement.
(d) The term "labor market" includes all counties in the labor area wherein the construction work is situated as designated by the United States department of labor or in the metropolitan statistical area, including those from other states, as maintained and revised from time to time by the United States bureau of census. For counties which do not fall within a metropolitan statistical area, the term "labor market" includes all counties within a labor market area, as maintained and revised from time to time by the West Virginia bureau of employment programs. For border counties which are not part of a metropolitan statistical area, the term "labor market" includes the county in question and any additional counties contiguous thereto in adjacent states.
(e) The term "public authority" means any officer, board or commission or other agency of the state of West Virginia, or any political subdivision thereof, authorized by law to enter into a contract for the construction of a public improvement, including any institution supported, in whole or in part, by public funds of the state of West Virginia or its political subdivisions, or any economic development authority of the state or any of its political subdivisions authorized to issue economic development bonds as a means of financing private construction projects and this article shall apply to expenditures of such institutions made, in whole or in part, from such public funds; and, further, this article shall apply to every construction project, whether public or private funded, in whole or in part, by any bonds issued by any economic development board or agency authorized to issue economic development bonds for the construction of public or private projects; and, further, this article shall apply to any private construction project resulting, in whole or in part, from the issuance of tax incentives, tax credits, or other benefits granted by the state or any of its political subdivisions to induce or encourage the undertaking of any such construction project by any private person, corporation or any other entity.
(f) The term "public improvement" includes all buildings, roads, highways, bridges, streets, alleys, sewers, ditches, sewage disposal plants, waterworks, airports and all other structures or works on which construction may be let to contract by any public authority or any private person, corporation, partnership or any other business entity receiving the benefit of state tax incentives or credit, the benefit of economic development bonds authorized or issued by any public economic development authority or economic development boards in connection with construction projects in his state whether any such construction project is public or private.
§21-1C-3. Policy.
The Legislature hereby finds that unemployment is a chronic and serious problem in this state; that unemployment adversely impacts the health, and welfare of the populace, and the state's tax base and tax revenues; and that all necessary and lawful measures must be employed to guard against the menace to the state resulting from unemployment; and that from time to time, in an effort to combat unemployment the state and its political subdivisions subsidize construction projects through the issuance of economic development bonds, tax incentives, tax credits and other taxpayer guaranteed or funded benefits to private persons, corporations, partnerships and other entities. It hereby is declared to be the policy of the state of West Virginia that residents of local labor markets as defined herein should be employed in the construction of all public improvements and private construction projects which depend, in whole or in part, on taxpayer funding, economic development bonds, or other incentives for which West Virginia taxpayers are responsible either through taxes or guarantees.
§21-1C-4. Hiring of employees; contracts to contain
certain
provisions.


(a) On all public improvements, a minimum of ninety percent of every employer's employees shall be individuals who have resided in the relevant labor market for at least six months preceding their application for employment: Provided, That nonresidents of the relevant labor market may be employed on public improvements when labor market residents are not available or are not qualified to perform the work involved.
(b) Any employer not otherwise able to employ a minimum of ninety percent labor market residents as employees on a public improvement must inform the nearest office of the West Virginia division of employment security of his employment needs. If within one week following the placing of a job order, the division is unable to refer any qualified job applicants to the contractor, or less than the number requested, the division will award a certificate to the contractor indicating the unavailability of applicants. Such certificate shall be made a part of the contractor's permanent project records. Upon receipt of such certificate, the contractor may employ nonresidents of the labor market to fill any positions covered by the certificate.
(c) Every public improvement contract let shall contain a provision conforming to the requirements of this article. Every subcontract for a public improvement which is, or reasonably may be, done as on-site work shall contain a provision conforming to the requirements of this article.
§21-1C-5. Penalties for violation of article.
(a) Any employer who violates any provision of this article is guilty of a misdemeanor, and, upon conviction thereof, shall be fined not less than two hundred fifty nor more than one thousand dollars.
(b) Any potential employee who applied for work and, but for a violation of this article, would have been employed on a public improvement, may recover from such employer those wages and benefits which he or she would have received had he or she been hired in accordance with this article as well as reasonable attorney's fees and expenses. Any employer who engages in a knowing and willful violation of this article shall also be liable, as a penalty, for an additional amount equal to the individual's lost wages and benefits.
§21-1C-6. Existing contracts.
 This article shall apply only to contracts let after the effective date of this article.