Troubling State Legislation from Virginia and Utah in December
We normally see and expect a relatively quiet month for legislative upheaval as most state legislatures wind down for the holidays. Maybe it is just a portend of what we can expect in 2020, but some significant legislation impacting the electronic security industry was introduced in December that warrants our collective attention.
Virginia Introduced Legislation
You may recall the highly destructive legislation that passed in New Jersey about a year ago that requires all public contracts be awarded to contractors with employees who have gone through or are going through an approved apprenticeship program (primarily union-based). This bill was passed to favor public unions in public works contracts and push merit-based contractors out of business or force them to go through unions for their skilled workforce.
Virginia introduced a pair of troubling bills that would result in essentially the same situation. These bills would significantly harm merit-based contractors who do not use union labor for their public works projects. SB 182 was filed on December 24, 2019 and would repeal current public law that protects merit-based contractors who wish to engage in public works contracts with state agencies. The bill would repeal the code that prohibits a state agency from requiring all bidders enter into project labor agreements with unions on behalf of contractors’ employees.
Another bill filed in the Virginia House (HB 358) on January 1, 2020 would authorize any local or state agency seeking bids for public works projects to require all bidders to adhere to union-based project labor agreements and would force any contractor seeking public works projects to enter into collective bargaining contracts with unions for all employees engaged in the contract.
In tandem, these bills (SB 182 and HB 358) would remove all government neutrality for public works contracts and make the Virginia government an advocate for union-only bidders of government contracts.
Utah Passed Legislation
The State of Utah recently enacted a major tax restructure/reform bill (SB 2001) that reduces personal and corporate income taxes but subjects numerous new services to sales tax. Included in this expansion of sales tax was “security system monitoring.”
How is it that we are just now hearing about this? Well, the bill was introduced on December 11, 2019. We captured the language that subjected security monitoring to sales taxes and included this bill in our weekly legislative update that is sent to members who subscribe to this report on December 16th. Then, in a matter of one week, the bill went through the Senate and House and was signed by the Governor on December 18, 2019.
It is unheard of for a tax bill of this magnitude to get through the legislative process in this timeline, but every state is different and what happens behind closed doors is not often subject to public scrutiny or input. We assume the fundamentals of this legislation were agreed to by legislative leaders and the governor before it was introduced.
Businesses with monitoring services in Utah will need to make arrangements in anticipation of the effective date, which we believe is April 1, 2020 for this segment of the bill.
