Government Affairs

NECA – Your Advocate

Among NECA’s legislative priorities are policies aimed at job creation, pension relief, reducing the estate tax, eliminating withholding on government projects, and closing a loophole that allows employers to misclassify employees as independent contractors. NECA will oppose legislation to reform our immigration system that could hold contractors liable for the hiring practices of subcontractors.

The National Scene

Big Win for NECA Contractors Nationally

President Obama signed into law legislation to repeal the 3% withholding tax that was scheduled to take effect in 2013. The repeal of this tax lifts a burden of uncertainty for NECA contractors and the entire the business community. NECA contractors nationwide played an important role in the repeal of the 3% withholding tax through efforts during constituent meetings with their elected official on the Hill, and continued communication with both the congress and the senate during the legislative conference where the issue had been a priority. Reps. Wally Herger (R-CA) and Earl Blumenauer (D-OR) and Sen. Scott Brown (R-MA) led the legislative effort to repeal this tax. ( Top Issues)

On the Local Front

NECA Sponsored  Legislation Becomes Law:  We are proud to announce that our NECA sponsored “Type 1 indemnification reform” bill (SB 474 ) and our “Retention Reform & Prompt Pay” bill  (SB 293)  were signed by Governor Brown.

“Type 1” Indemnification Reform Becomes Reality

SB 474 would protect subcontractors from bearing liability for the negligence, injuries or design defects of other parties on construction projects by making risk-shifting contract clauses unenforceable.  For this purpose, SB 474 would  provide that indemnity, additional insured and duty to defend clauses contained in all construction and insurance contracts would be  unenforceable to the extent that the clauses required the non-fault party to be responsible for claims arising from the active negligence or fault of another contracting party.

The new law will take effect January 1, 2013 and will apply to all contracts entered into after that date.

Retention Reform and Prompt Pay Legislation Passed into Law

In operation as of January 1, 2012. SB 293 caps retention on all public works at 5% and reduces the statutory payment times for progress payments on construction projects from general contractors to subcontractors from 10 days to 7 days. (Source Politico Group)