Indiana Legislative Report – Construction-Related Measures that Failed to Pass

By: Daniel M. Drewry

As the Indiana General Assembly adjourned last March, three relatively anonymous bills (at least in relation to some of their better publicized contemporaries – e.g. the unemployment insurance fix or local government reform) failed to pass that had the potential to impact the Indiana construction industry. First, House Bill 1111, House Bill 1121 and Senate Bill 369, which proposed a three percent price preference on state public works projects to service-disabled and/or veteran-owned small businesses failed. As we have previously commented in this Blog, the economic downturn has resulted in a glut of bidders on publicly bid contracts, with more bidders meaning lower prices and stiffer competition for the work. When some contractors are bidding jobs at a break-even mark, or even worse, at a loss, any preference has the potential to impact the playing field. A three percent price preference may have been a helpful boost to veteran-owned businesses, but also could have created further congestion in the market for area contractors dependent on public jobs.

Second, Senate Bill 213, which we were also following in this Blog last February, sought to carryover the federal E-Verify requirements to state public contracts. While its Federal counterpart has been in force since September 8, 2009, the legislature declined to impose the same certification rules to confirm the legal status of employees at the state level. Nevertheless, as the opportunities for federal jobs in the state increase, contractors may want to familiarize themselves with the E-Verify requirements and their employee I-9 Forms.

The third piece of legislation that would have impacted the Indiana construction industry was Senate Bill 35. This bill sought to increase the retainage threshold on public projects nearly seven-fold, from $150,000 to $1 million. This would have decreased the number of public projects subject to retainage requirements, effectively carving out of the retainage scheme smaller projects and contracts, and in the process would have benefitted the contractors on those smaller projects.

While none of these bills made it out of the General Assembly this spring, sometimes it is the bills that fail to pass that provide signals of what may come in future sessions.