Construction Law Today : Construction Lawyer & Attorney : Joshua Glazov : Design Build Contracts, Construction Bankruptcy

Chris Birk from SuretyBonds.com recently interviewed Green Building Law Update's Chris Cheatham about how green building affects performance bonds and the DC green building law.  The interview is informative and I enjoyed listening.  It's 15 minutes well spent.  Click here to tune-in.

 

 

 

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A bill (HB2356) was introduced last week in the Arizona State Legislature that, if enacted, will require certain building and construction projects to achieve at least a silver LEED certification.

Bill Summary

Projects that will need to achieve at least a Silver certification:

• Each Major Project of a state agency, including state universities and colleges
• Each Major Project of a school board that receives state funding
• Each private Major Project that receives at least 50% of its funding from the state
• All existing public buildings under energy efficiency retrofitting of at least a 35% share of the total value of the existing building, regardless of whether the retrofitting project qualifies as a Major Project

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A bill was introduced in the Washington State Legislature yesterday that will require LEED certification for sales and use tax deferral on select construction projects. If this bill (SB 6598) becomes law, projects will have to achieve a certain level of LEED certification to qualify for deferral of sales and use tax on materials and other components of the work. The higher the project's LEED certification, the greater the amount of sales and use tax that's deferred.

This chart identifies the percentage of sales and use tax each level of certification will deliver:

LEED Certification Level	Percentage of Sales and Use Tax Deferred
Platinum	100%
Gold	75%
Silver	50%
Less Than Silver	25%

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In this past post and this past post too I mentioned a bill (HB344) in the Illinois General Assembly to amend the Illinois Contractor Prompt Payment Act putting caps on retainage under private construction contract and subcontracts.   

This bill stalled in the spring.  But it's active again.  It's been assigned to the Senate's Assignments Committee and will then go for further action from there.

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In this past post I mentioned a bill (HB344) in the Illinois legislature to amend the Illinois Contractor Prompt Payment Act putting caps on retainage under private construction contract and subcontracts.  The legislative session has ended and the bill did not emerge from the Illinois's Senate Executive Committee and will not be enacted this spring.  We'll see if the bill returns later this year or in the next legislative session.  Stay tuned.

Interested in construction related bills that did pass the Illinois legislature this session?  Check out the Illinois Construction Law Blog's report on HB236 amending the Illinois Mechanics Lien Act.  Both houses passed the bill and it's now with Governor Quinn waiting for him to sign it.

If Governor Quinn signs this bill, prime contractors must give homeowners written notice within 10 days after recording a mechanics lien informing the homeowner that the contractor has recorded the lien.  Here's a legislative staff summary of  HB236:

Amends the Mechanics Lien Act to provide that:

• A contractor for improvements of an owner-occupied single-family residence must give the owner written notice within 10 days after recording a lien against any property of the owner.
  
• The notice is served when it is sent or personally delivered.
  
• If timely notice is not given and, as a result, the owner has suffered damages before notice is given, the lien is extinguished to the extent of the damages.
  
• The mere recording of the lien claim is not considered damages. These changes do not apply to subcontractors and only apply to contracts entered into after the effective date.

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Most British readers already know that Lord Justice Jackson and his panel of assessors issued an interim report earlier this month in their Review of Civil Litigation Costs. 

The interim report raises a lot of issues that should interest readers outside Great Britain too, especially in other countries with common judicial systems (e.g., the United States, Australia, Canada).  Sometimes stepping outside our own system here in the United States fosters new ideas for solving chronic problems.  The US Navy's adopting the Royal Navy's angled flight decks on its aircraft carriers for safer and more efficient operations comes to mind as a good example. 

In January 2009 British Lord Justice Jackson was appointed to lead a fundamental review of the rules and principles governing the costs of civil litigation. His goal is to identify recommendations for the United Kingdom's Ministry of Justice to promote access to justice at proportionate cost.  The final report is due at the end of 2009.

Lord Justice Jackson emphasizes that the preliminary report is to promote discussion during the consultation period before he and his assessors prepare their final report, So, the interim report focuses on areas where they seek comments from the lawyers and the public at large.  They urge people to submit comments by July 31, 2009.

The following are some of the principal areas of focus in the report:

• Court fees. The report expresses disagreement with the Ministry's policy of full-cost pricing - where litigants pay for the court service they receive. It suggests shifting more costs of the civil justice system from litigants to taxpayers.
• Cost shifting. The report requests comment on whether fee and cost shifting should be abolished in select areas, although it tentatively concludes that cost shifting must remain in some form for most litigation.
  

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In a post last week I mentioned that the the Minnesota legislature passed bill HF420 amending amendments to Minnesota's Notice and Opportunity to Repair Law and sent them for Governor Pawlenty to sign.  Kevin Duchschere of the Star Tribune reported in an article this afternoon that the governor vetoed HF420.  It's now back to the legislature to see if they can muster up enough votes to override the governor's veto.

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The Texas House passed a bill (HB1657) in a 73-71 vote and sent it to the Senate.  If enacted, HB1657 will expand the types of claims injured construction workers can recover from property owners under Texas law.   

Earlier this year the Texas Supreme Court decided Entergy v. Summers.  Under that case, property owners who buy workers compensation insurance covering injuries to the employees of construction contractors they hire, in addition to their own employees, are immune from claims outside of those allowed under the Texas Workers Compensation Act.

In 2001, plant owner Entergy Gulf States, Inc. hired a contractor to work on one of their facilities.  One of the contractor's workers was injured while repairing a leak on a hydrogen generator.  The plant owner's workers compensation insurance policy covered the worker's injuries. 

The worker sued the plant owner.  The plant owner countered, saying they were immune from the worker's lawsuit under the Workers Compensation Act.  The Texas Supreme Court agreed. Because the plant owner's workers compensation insurance covered the worker's injuries, the plant owner enjoyed immunity under the Workers Compensation Act against the worker's lawsuit.

For several years Texas legislators have taken initiatives to amend the Workers Compensation Act.  The recent vote is the latest installment in their initiative.

The Entergy decision provides a lot of protection to those property owners whose workers compensation insurance insures injuries to their contractors' workers in addition to injuries to their own employees.  That protection will soon be gone if HB1675 passes the Senate and Governor Perry signs it.  

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In the last post I mentioned that amendments to Nevada's Notice and Opportunity to Repair law (SB349) might not pass this year.  According to the Mercury News's Home Defect, Malpractice Bills Die article today, they won't.

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The Illinois Senate is considering a bill to amend the Illinois Contractor Prompt Payment Act (the "Act") affecting when and how (1) owners pay prime contractors and (2) prime contractors pay their subcontractors.

If enacted, this bill (HB 0344) will:

• Limit retainage on private construction projects to a maximum of 5 percent of payments to prime contractors and subcontractors.
• Limit retainage after 50 percent completion to a maximum of 2.5 percent.

This bill has already passed in the Illinois House. The Senate Assignments Committee is now considering this bill.

If enacted into law, this bill will limit how much retainage owners and prime contractors may hold and when they may withhold it. This bill will also affect (1) construction lenders' relationships with their borrowers and (2) sureties' relationships with the contractors and subcontractors they bond.

If you would like to comment on this bill:

• Contact your Illinois State Senator and the members of the Senate Assignments Committee; and
• Contact the government affairs staff of interested trade associations like these:
• Associated General Contractors of Illinois
• The Builders Association
• Illinois Construction Industry Committee
• Building Owners and Managers Association International
• International Council of Shopping Centers

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