AGC Honors and the 2024 Minnesota Construction Summit

It's been a big week at AGC! On Tuesday we recognized individuals and companies at AGC Honors 2024 for their impressive accomplishments over the past year and throughout their careers, and enjoyed the music of Mick Sterling and his 12-piece band!

On Wednesday and Thursday we hosted the 2024 Minnesota Construction Summit at the Saint Paul RiverCentre. Thank you to the hundreds of attendees, presenters, exhibitors and sponsors who made the Summit an amazing two days of education, inspiration, and networking!

Click below to view images from both events.

1% Metro Sales and Use Tax Increases:

Guidance for Contracts from MnDOT

This information was distributed in October, and has been updated with the final segment “Purchases Beyond the Exemption.” We are re-distributing as a reminder to all contractors who work with MnDOT.

On May 24, 2023 Governor Walz signed a bill that included a 1% increase in sales tax in the 7-county metro area. The increase is comprised of 0.75% Transportation tax and a 0.25% Housing tax. The bill was signed into law on May 25, 2023, and the sales tax increase became effective on October 1, 2023.

What this means for MnDOT Contracts:

How Sales Taxes Affect MnDOT Projects

1.      Contractors do not directly charge MnDOT sales tax on contracts.

2.      Contractors pay sales tax on inputs (such as construction materials) and include applicable taxes in the contract unit prices.

Transitional Period

1. The Minnesota Department of Revenue has established a 6 month “Transitional Period” in which existing contracts (contracts executed before October 1) are exempt from the 1% increase.
2. Effective October 1, 2023, and terminating April 1, 2024, the exemption is administered between the buyer (Contractor) and seller (supplier), and it starts with the buyer submitting documentation proving a pre-existing contract to the seller and providing the appropriate forms.
3. Buyer must submit Minnesota Department of Revenue Form ST3, “Certificate of Exemption” to the seller.
4. Contracts let after October 1, 2023, are not eligible for the exemption.

Purchases beyond the Exemption

1. Beyond April 1st, 2024, Contractors are no longer exempt from paying, and Suppliers are no longer exempt from collecting, the 1% sales tax increase.
2. In rare cases, contractors may be entitled to receive reimbursement from the department for the tax increase as a “constructive change” (post-award change in law not otherwise allocated by contract). This scenario exists only in the case that the contract was let prior the active date of the law (May 25, 2023) and the project continues to take delivery of materials beyond April 1, 2024. This scenario would only apply to larger, multi-year projects and any reimbursement would only apply to purchases after the exemption termination date of April 1, 2024. Contractors should contact project staff for this request.

Independent Contractor Rule

The US Department of Labor has completed its review and published a new final rule how to analyze whether someone is an employee or independent contractor. The new rule is not an “abc” test but weighs the following six ‘economic reality’ factors to determine if the person truly acts independently as its own business: 1) the opportunity for profit or loss depending on managerial skills, 2) an investment by worker and potential employer, 3) the degree of permanence of work relationship, 4) the nature and degree of control, 5) the extent that work is an integral part of potential employer’s business, and 6) the skill and initiative. The new rule takes effect March 11, 2024. More information can be found at the DOL Website.

Note that this analysis ripples into wage theft concerns: misclassifying an employee as an independent contractor can be a form of wage theft under Minnesota law, exposing employers and upstream contractors to new liabilities. We discussed at the Construction Summit this week ways to manage these risks.

Cameras: New Program with Operating Engineers

AGC and Operating Engineers Local #49 reached an agreement on the use of outward and inward facing cameras under the Highway Heavy Agreement, bridging the potentially divisive positions about the competing rights of management versus the rights of the employees, and forging a program that accomplishes the primary goals of contractors and redresses the primary concerns of the employees. A copy of the agreement is posted on our website under Union Documents. Please contact Renee if you need login credentials.

Last Chance for STP Classes starting Next Week!

Was your curiosity about Supervisory Training Program (STP) classes for your employees piqued at the Construction Summit?

Registration for in-person attendance only is open for two classes beginning next week (online participation is closed for the two January classes, but still available for Unit 2 in March):

• Unit 1: Leadership & Motivation (January 23-March 5)
• Unit 3: Planning & Scheduling (January 24-March 6)
• Unit 2: Communication (March 12-April 9)

Winter Load Increases Begin Central, South, Southeast and Metro Frost Zones

The Minnesota Department of Transportation will begin winter load increases on unrestricted highways in the Metro and Southeast frost zones at 12:01 a.m. on Monday, Jan. 22.

Winter load increases on unrestricted highways in the Central and South frost zones began today, Jan. 19.

Seasonal load limit zones and restricted routes can be found on the MnDOT load limits map. Start and end dates and other load limit information are shown here.

Thank You to our 2024 Annual Partners!

(there's still time to join them!)

Elevate your brand with AGC!

Interested in how partnering with AGC could benefit your firm?

Take a look at AGC's Media Kit, and contact Heather to learn more.

Don't Miss These Events!

Save the Date for these upcoming AGC events:

• AGC Golf Tournament: August 2 (Keller Golf Course)
• AGC/MBEX Saints Game: August 7 (CHS Field)
• Sporting Clays Fundraiser: September 11 (MN Horse & Hunt Club)