Construction Law Blog
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This article follows up on an article from earlier this year about proposed legislation in Olympia that addressed venue for lawsuits against counties.
That legislation, House Bill 1601, was drafted to address a common problem in public works contracting with Washington State counties. Washington State counties have been including provisions in their construction contracts that require all disputes between the contractor and the county to be resolved in the home county that issued the contract. These venue clauses present a problem for contractors because of the appearance of impropriety and associated challenges of litigating with counties in their home court.
Recently, the largest changes in more than 30 years were made in federal mortgage disclosure requirements. On August 1, 2015, the forms that have become second nature for generations of loan originators, attorneys, and borrowers—including the Good Faith Estimate (GFE), HUD-1, and Truth-in-Lending—are no longer used for new real estate transactions. In their place are two completely new forms and a new set of requirements for how and when they are provided to borrowers.
Readers of this blog are aware that we have been tracking and ranting about the poor condition of our national infrastructure since the blog’s inception. In May 2013, a truck carrying an oversize load collided with the “fracture/critical” I-5 bridge over the Skagit River near Mount Vernon and brought home to everyone the dismal condition of bridges, highways, power, water, and sewer infrastructure.
In federal government contracting, as in most public works contracts, contractors are required to comply with Contracting Officers' decisions. Contract clauses mandate that pending resolution of disputes, the contractor must proceed with the performance of the contract, the dispute notwithstanding.[i] Thus, even if a contractor suspects that the Contracting Officer directing the extra work does not have appropriate funds to pay for the changed work, the contractor has little choice but to perform the extra work. This is a trap for unwary contractors that expend their own funds only to find out that there is no appropriation to pay for the extra work. The Federal Anti-Deficiency Act was passed to prevent this very issue from occurring, but as contractors have learned, this Act has not precluded government employees from directing extra work for which they have no funds.[ii]
In the 2007 legislative session, the Washington State Legislature significantly expanded the definition of what constitutes a “Contractor” in Washington State, such that for the past 8 years a broad reading of the contractor’s registration statute, RCW Ch. 18.27, would require just about any person or entity, other than a residential homeowner, who is involved at any level in improving real property to be registered as a “Contractor,” irrespective if that person or entity hired a licensed contractor to perform work on real property that they own. This has imposed a burden to register as a contractor on persons or entities not performing any actual construction work, such as “house flippers” or developers, who retain general contractors to perform work for them, and do not so much as lift a shovel of dirt to improve the property that they own.
Public Private Partnerships (“P3”) generally involve a performance-based contract between a public sector (any level of government) and a private sector (usually a consortium of private sector companies working together) to arrange financing, delivery, and typically long-term operations and maintenance (O&M) of public infrastructure projects. P3 contracts referred to as Project Agreements are typically awarded through the competitive bidding process. The private partner is contractually obligated to fulfill the Project Agreement (at the risk of losing its investments), which binds its obligations as defined by the State.
The Washington Limited Liability Company Act (the “Current Act”) was first adopted in 1994. It has been revised several times in order to address specific issues, most recently in the 2014 Regular Session of the Legislature. The Current Act has not been the subject of comprehensive review and revision since its original enactment. The experiences of other states, and the experiences of business attorneys in Washington, have shown that the Current Act should be updated and modernized. The bill pending in the current legislative session was developed under the auspices of the Washington State Bar Association Business Law Section and is intended to make the Limited Liability Company Act more flexible and user-friendly, and to eliminate or modify provisions that create unnecessary problems for business people forming and operating LLCs.
The basic features of the proposed legislation are summarized in a memorandum from the Business Law Section and Partnership and LLC Law Committee, which is available here. The legislative history and the entire proposed bill is available here.
State and local infrastructure banks are again in the spotlight with the State Transportation and Infrastructure Financing Innovation Act (“STIFIA”), which Representatives Richard Hanna (R-NY) and Janice Hahn (D-Calif.) recently introduced into Congress. The concept of state infrastructure banks has been around for many years. These banks work to provide loans, construction debt financing, or lines of credit for infrastructure projects in various local areas. STIFIA is designed to amend a federal highway bill already in effect: the Moving Ahead for Progress in the Twenty-First Century Act (known as “MAP-21”). STIFIA would put the projects and their financing in the hands of state and local governments, which are more familiar with the needs and priorities in those areas than the federal government.
Late night host of Last Week Tonight, John Oliver, took us on a tour of the Nation’s infrastructure on Monday night. The deplorable state of U.S. infrastructure has been the subject of a number of Ahlers & Cressman posts (It’s Time to Rebuild America’s Infrastructure – A Prospective Presidential Candidate Has an Idea!; Public-Private Partnerships: Completing Infrastructure Projects Without Public Funds; More Washington Infrastructure Projects On The Horizon – Yakima River Basin Integrated Water Resource Management Plan; Hurricane Sandy A Wake Up Call To Strengthen U.S. Infrastructure – A Topic Lost In The Recent Presidential Campaign; Private Investors Testify that the US Infrastructure Bank is Key to Attracting Private Capitol for Public Works; New ASCE Report: Old U.S. Infrastructure is Costing the Public Billions; China’s Road-Building Pace Leaves U.S. In The Dust; Now That The Republicans Have Taken Over the House – What Does That Spell For Infrastructure Investment?; Infrastructure Investment Gets Boost From The Daily Show with John Stewart; Call For Boost to Infrastructure Investment; $4 Billion National Infrastructure Bank Proposed by President Obama; Water Main Break Highlights Need for Infrastructure Investment; Chelan Washington’s wooden pipes emphasize the need for radical infrastructure upgrades; Pew Research Gives Washington State An “A” For Infrastructure Government Performance). Oliver in 30 minutes gave viewers the comedic side of the sorry state of the U.S. infrastructure and convinces us that infrastructure is worth talking about. One of his memorable lines was: The average U.S. dam is 52 years old and has “something deeply broken inside” – “like Botox users and clog dancers.”
Home field advantage matters in sports, and it also matters in litigation. In litigation, many battles are fought over the location where a dispute is to be decided and who is tasked with deciding the outcome of the dispute.