Illinois Governor Pat Quinn recently signed into law Senate Bill 3023 (Public Act 98-764, amending the Illinois Mechanics Lien Act, 770 ILCS 60/ et seq., to provide protection against subordination of mechanics liens on Illinois construction projects. S.B. 3023 makes an express or implied agreement to subordinate a mechanic’s lien, where the agreement is in anticipation of and in consideration for the awarding of a contract or subcontract to perform work or supply materials for an improvement upon real property against public policy and unenforceable, except where the agreement to subordinate a mechanic’s lien to a mortgage lien that secures a construction loan if that agreement is made after more than 50% of the loan has been disbursed to fund improvements to the property. The new law was effective July 16, 2014. This new law represents the culmination of the Illinois legislative efforts over the past few legislative sessions to provide further protection to mechanics lien claimants.
Quick Reference Lien Charts
Clients call from time to time with questions about liens that have been filed on their property, or about liens that they want to file. The questions follow a pattern. What is the deadline to file a lien? What about foreclosing? Can a lower tier subcontractor file a lien? Does the lien claimant have to file a preclaim notice? I got one of these questions recently and sent the in house attorney a card stock printout of our quick lien reference chart for the three jurisdictions closest to my office: Virginia, DC, and Maryland. She found it so useful that she put it on her bulletin board in her office.
Given how useful most clients find this information, we decided to post it. You can see it to the right under the “Resources/Links” tab. Our California construction lawyers prepared a similar chart a couple of years ago when California revamped its lien laws. They are going to convert that into a format that looks like the VA/DC/MD one. And then we’ll also prepare one for the northeast, where our New York area construction lawyers frequently answer similar questions.
So, check back for these quick reference charts. We think you’ll find them useful.
Badge of Honor ~ NJ Requires Contractors’ Employees to Wear Photo ID Badge
Effective August 19, 2014, New Jersey Senate Bill 2363 went into effect, requiring contractors required to register under the Contractors’ Registration Act, N.J.S.A. §§ 56:8-136, et seq. — home improvement contractors — to wear a state-issued identification badge “on the upper left corner of his torso when the contractor is performing, or engaging, or attempting to engage in the business of selling home improvements” at all times on the job. The badge includes a color photograph of the employee’s face along with his/her name, and the contractor’s registration number and business name. A new badge is required every six years. Governor Chris Christie signed into law S.B. 2363 on August 19, 2013. The bill was reportedly prompted by fears of potential scams on Superstorm Sandy victims. It is believed that requiring contractors’ employees to wear these badges will add another layer of protection against fraud.
New Jersey isn’t the only state that requires certain contractors’ employees to wear badges. The Washington State Department of Labor & Industries October 2014 Electrical Currents newsletter reminds all electricians and trainees that they are required to possess, wear and visibly display their certificates. Washington’s Administrative Code WAC §§ 296-46B-940 and 296-46B-942 require all electricians and trainees to “possess, wear, and visibly display on the front of the upper body, a current valid [certificate].” WAC 296-46B-940(3) further provides that “[t]he certificate may be worn inside the outer layer of clothing when outer protective clothing (e.g., rain gear when outside in the rain, arc flash, welding gear, etc.) is required. The certificate must be worn inside the protective clothing so that when the protective clothing is removed, the certificate is visible. A cold weather jacket or similar apparel is not protective clothing. The certificate may be worn inside the outer layer of clothing when working in an attic or crawl space or when operating equipment (e.g., drill motor, conduit threading machine, etc.) where wearing the certificate may pose an unsafe condition for the individual.” “The certificate must be immediately available for examination at all times.” It is believed that requiring the visible display of the certificates while performing work “allows the public, customers, and other workers to have the knowledge that properly certified persons are the ones doing the work.” In its newsletter, electricians and trainees are encouraged to “Wear your certificate with pride – you earned it!”
In California, the Contractors State License Board issues a “pocket license” and encourages consumers to not only confirm that the contractor is properly licensed but to review the contractor’s pocket license to confirm that the name on the pocket license is the same as the name the contractor originally provided. Like New Jersey, California and other states are acutely aware that homeowners are most vulnerable to fraud by unlicensed contractors after a natural disaster. In California, these illegal operators face serious prison time if caught working or trying to get contracting work over $500 in a state-declared emergency area. California Business & Professions Code § 7028.16 provides that: “A person who engages in the business or acts in the capacity of a contractor, without having a license therefor, in connection with the offer or performance of repairs to a residential or nonresidential structure for damage caused by a natural disaster for which a state of emergency is proclaimed by the Governor pursuant to [California Government Code § 8625], or for which an emergency or major disaster is declared by the President of the United States, shall be punished by a fine up to [$10,000], or by imprisonment … for 16 months, or for two or three years, or by both that fine and imprisonment, or by a fine up to [$1,000], or by imprisonment in a county jail not exceeding one year, or by both that fine and imprisonment.”
City of Shasta Lake (CA) Issues Notice re Contractor Qualifications for Potable Water Projects
Effective January 1, 2015, all contractors bidding on or performing work within the City of Shasta Lake, California involving connects to or modifications of the City of Shasta Lake’s potable (fit or suitable for drinking) water distribution system will be required to have and to maintain a Water Distribution Operator, Grade 2 certification. This requirement applies to both work performed on the City of Shasta’s system under contract with the City of Shasta and to work for a private developer or property owner. If you have questions, contact Jeff Tedder, City Engineer, 530-275-7423.
Examples of work that require a certification include, but are not limited to:
- Water distribution or transmission main installation, extension, or replacement
- Water main fitting, valve, or fire hydrant installation or replacement
- Miscellaneous work involving depressurizing existing water mains for any reason
Under the regulations adopted in January 2001, becoming certified is a two-step process. The applicant submits an initial application and filing fee to take the required examination. This application will be evaluated to determine if the applicant meets the educational requirement. Once that initial application has been approved, the applicant will be permitted to take the examination. If the applicant passes the examination, he/she will have 3 years (from the date of the exam) to submit the second application and filing fee, and to obtain the certification. The second application is evaluated for the experience portion of the certification requirement. If the applicant has fulfilled the experience requirement, he/she will be issued a certificate; if the applicant has not fulfilled the experience requirement, he/she will have 1 year (from the date the second application was submitted) to obtain the required experience.
Contractors are cautioned that the certification process takes several months due to exam scheduling requirements. Distribution exams are offered twice a year in March and September and the final filing date for the March exam is January 1 and the final filing date for the September exam is July 1; and treatment exams are offered twice a year in May and November and the final filing date for the May exam is March 1 and the final filing date for the November exam is September 1.
For additional information on the certification process, check out the California State Water Resources Control Board’s Drinking Water Treatment & Distribution System Operators resource webpage, which includes information on continuing education, training and guidance, exam information, operator certification information (including the regulations), and the treatment exam application and distribution exam application.
The Drinking Water Treatment and Distribution System Operator Certification Program is located at 1001 I Street, 17th Floor, Sacramento, California, 95814. For general information or inquiries, contact the Operator Certification Program at:
Operator Certification Program – Drinking Water (OpCert)
State Water Resources Control Board P.O. Box 944212 Sacramento, CA 94244-2120 Telephone: (916) 449-5611 Fax: (916) 449-5654
Additional Resource: City of Shasta Lake, California
Ruling Reinforces EPA’s Broad Discretionary Powers in Reviewing Corps of Engineers 404 Permitting Decisions
The celebrated case of Mingo Logan Coal Co. v. EPA was returned to the U.S. District Court of the District of Columbia after the Court of Appeals reversed the District Court’s ruling that EPA had illegally invalidated a Army Corps of Engineers (“Corps”) 404 permit issued to Mingo Logan’s proposed coal mining operations in West Virginia. On March 14, 2014, the Supreme Court rejected any appeal of the DC Circuit’s opinion, which is reported at 714 F. 3d 608. The District Court completed its review of the remaining APA issues and on September 30, 2014, ruled that EPA had broad authority under the law to veto a Corps permitting decision.
Mingo Logan requires Clean Water Act (CWA) National Pollutant Discharge Elimination System (NPDES) permits to conduct coal mining operations at the Spruce No. 1 Mine in West Virginia. The permit application process was initiated by Mingo Logan’s predecessor in 1998, and the State of West Virginia issued an NPDES permit to Mingo Logan pursuant to its delegated CWA Section 402 authority, and the Corps issued a CWA 404 permit in 2007. The operations triggered opposition because of the perceived consequences of “mountain fills” in West Virginia and their impact on navigable waters and wildlife in the area. Two years later, EPA asked the Corps to revoke or modify its permitting action, but the Corp refused to do so. EPA accordingly invoked its authority under CWA Section 404(c) to withdraw the disposal sites that were designated in the Corps permit. In 2011, EPA completed its action to withdraw theses designated disposal sites. Mingo Logan sued EPA, and the District Court agreed with its argument that EPA acted too late, a ruling the Court of Appeals reversed in view of the plain language of the statute.
The District Court has now reviewed the remaining APA arguments, in particular whether EPA’s determination that discharges permitted under the 404 permit would cause unacceptable adverse environmental impacts was arbitrary and capricious. The District Court held that EPA’s determination was reasonable, supported by the record, and based on considerations within EPA’s purview. The District Court noted that EPA had continually expressed its concern about the impacts of the proposed discharge while the permit was under review by the Corps. It also held that an email by an EPA official to Mingo Logan that the agency had no interest in pursuing the matter any further after the Corps acted could be disregarded since this kind of statement could not bind the agency. The agency was always free to change its mind, and the email was not the product of a formal legal process requiring APA compliance to do so. While the District Court was critical of EPA’s argument that the proposed discharge would likely harm an endangered species that had never been seen in the area of the proposed coal mining operation, there were plenty of other species that could be harmed.
Finally, the District Court rejected the argument that EPA’s concerns about water quality somehow invaded the State’s regulatory sphere. Under the CWA, West Virginia is given the authority to make water quality rules and designations under CWA 401. EPA’s concerns about downstream water quality were authorized by other provisions of the CWA, and indeed, the agency is not required to consider West Virginia’s water quality determinations at all when it exercises its veto power under CWA Section 404(c). In the District Court’s view, in these circumstances, EPA can impose even stricter water quality standards than those required by the State.
District Court Rejects Challenge to Decision of Fish and Wildlife Service to Withdraw Proposed ESA Listing of the Dunes Sagebrush Lizard
On September 30, 2014, the U.S. District Court for the District of Columbia rejected a challenge to the decision of the U.S. Fish and Wildlife Service (FWS) to withdraw a proposed listing of the Dunes Sagebrush Lizard, a species found in many oil and gas producing areas, as an endangered species under the Endangered Species Act. The case is Defenders of Wildlife, et al. v. Jewell. The District Court held that the decision of the FWS was lawful, and comported with the requirements of the ESA and the FWS’ and National Marine Fisheries Service’s (NMFS) 2003 Policy for Evaluation of Conservation Efforts When Making Listing Decisions (PECE) for the Evaluation of Conservation Efforts When Making Listing Decisions. Of particular importance were three conservation mechanisms–the BLM’s Resource Management Plan Amendment, the “New Mexico Agreement”, and the “Texas Plan”. The New Mexico and Texas plans are Candidate Conservation Agreements that the Service approved.
The Texas Comptroller and several oil and gas associations intervened as defendants to support the Service and their own conservation plans. This decision is likely to be appealed, but it certainly seems to strengthen the case for the measures that are being proposed (and challenged) to protect the Lesser Prairie Chicken, a species that was listed as threatened earlier this year.
3rd Cir.: Natural Gas Pipeline Company Can Immediately Exercise Its Powers of Eminent Domain to Replace Deteriorating Pipeline
On September 26, 2014, a divided panel of the U.S. Court of Appeals for the Third Circuit reversed the U.S. District Court of the Middle District of Pennsylvania, holding that Columbia Gas Transmission Company, an interstate natural gas company regulated by FERC, has the right of eminent domain granted by 15 U.S.C. § 717f(h) to obtain easements over the land of objecting landowners, even when such new easements would be located outside of the existing right of way, in order to replace a deteriorating pipeline that is now located in a heavily populated area of Pennsylvania. The case is Columbia Gas Transmission, LLC v. 1.01 Acres, More or Less in Penn Township, York County, Pennsylvania, Located on Tax ID# 440002800150000000 Owned by Dwayne P. Brown and Ann M. Brown, et al.
To obtain these easements, Columbia filed Complaints of Condemnation in federal court against four landowners. The District Court denied Columbia’s request, holding that the implementing FERC regulation was ambiguous, and the court therefore “looked outside the regulations” and determined that the agency’s interpretation was not entitled to deference. Columbia had received a “blanket” certificate of convenience and necessity from FERC, which the majority of the Court of Appeals held provided the holder of the certificate with the authority to conduct a routine activity of replacement without further authorization by FERC. According to the Court of Appeals , the applicable FERC rule was not ambiguous, and must be enforced, although the Court of Appeals also noted that this right was subject to certain limitations including environmental compliance. Referring to the Supreme Court’s recent decision in Utility Air Regulatory Group v. E.P.A., 134 S. Ct. 2427, 2442 (2014), the court held that the statute as a whole must be reviewed before its parts could be considered to be ambiguous. Finally, the Court of Appeals granted Columbia’s request for preliminary injunctions, allowing it to take immediate possession of these easements.
The dissenting opinion concluded with this observation: “It is disturbing and encouraging that, by today’s ruling, the Majority endorses a view of delegated sovereign power so broad that a private gas company, with no agency oversight or other significant procedural restraint, can take the property of other citizens far removed from that company’s original right of way”.
Intergovernmental Immunity Protects Both the Federal Government and Its Contractor
On September 19, 2014, the U.S. Court of Appeals for the Ninth Circuit held that California Senate Bill 990 violates the Constitutional doctrine of “intergovernmental immunity” because it directly regulates the activities of the US Department of Energy in violation of the Supremacy Clause. S.B. 990 prescribes state radioactive cleanup standards at the Santa Susan Field Laboratory, a site which is undergoing extensive cleanup by the federal government. The case is The Boeing Company v. Movassaghi, Acting Director of the California Department of Toxic Substance Control, et al.
The federal government used the Santa Susan Field Laboratory site, located in Ventura County, to conduct nuclear research, operate nuclear reactors, build and test rockets, and conduct other defense-related work. According to the Ninth Circuit, all of these activities over the years “created a terrible environmental mess”, which the federal government and Boeing, as its contractor, are addressing. The soil, groundwater and bedrock were seriously contaminated.
California enacted S.B. 990, prescribes stringent cleanup standards, purporting to make the large site suitable for subsistence farming activities. However, the Ninth Circuit notes that the doctrine of intergovernmental immunity provides that the activities of the federal government are shielded by the Supremacy Clause from direct state regulation, and S.B. 990 violates this principle. It concluded that no provisions in the Atomic Energy Act, Resource Conservation and Recovery Act or Comprehensive Environmental Response, Compensation, and Liability Act indicate that Congress envisioned a role for the state as embodied in S.B. 990, and therefore the law is of no effect at this site.
$8 Billion Los Angeles Wind Power Project Would Be Engineering Marvel and Green Energy Landmark
Four energy companies – Pathfinder Renewable Wind Energy, Duke-American Transmission, Dresser-Rand, and Magnum Energy – have jointly proposed an $8 billion plan to supply Los Angeles with more than twice the amount of electricity generated by the Hoover Dam. According to Duke Energy, the proposal would require construction of “one of America’s largest wind farms in Wyoming, one of the world’s biggest energy storage facilities in Utah, and a 525-mile electric transmission line connecting the two sites.” The compressed air storage facility in Utah – consisting of four vertical chambers, each approaching the size of the Empire State Building, carved from an underground salt formation – would yield 1,200 megawatts of electricity, which is enough to serve 1.2 million homes in the Los Angeles area.
Renewable energy producers have long struggled with how to deliver electricity when times of high demand do not coincide with times of peak energy production. For example, solar power typically peaks during midday, when energy demand is lower. The wind power proposal for Los Angeles, however, boasts the desirable pairing of energy storage with renewable energy. Under the proposal, when power demand is low and wind is high, the storage facility would use the excess electricity from the wind farm to compress and inject high-pressure air into the chambers for storage. During times of high power demand, the facility would use the stored, compressed air, combined with a small amount of natural gas, to drive eight generators to produce electricity.
The proposal will be formally submitted to the Southern California Public Power Authority by early 2015 in response to the agency’s request for proposals to provide renewable energy and electricity storage for the Los Angeles area. With energy demand in the area predicted to rise by as much as 18 percent by 2024, this proposal, which has a target in-service date of 2023, could provide a desirable green solution to Los Angeles’s impending energy crisis. But this is hardly a done deal. The proposal must first be selected from the many expected to be submitted to the agency, and its sponsors must then be able to clear regulatory hurdles and secure financing by entering into agreements for the sale of power.
A video with more information about the proposal can be found here.
California Looking For Next Registrar of Contractors
UPDATE: Applications for the Position of the Registrar of Contractors must be received by 5:00 p.m. PST on November 17, 2014 and must include all required information.
The California Contractors State License Board invites applications for the position of Registrar of Contractors. The Registrar of Contractors is responsible for, among other things, carrying out the policies of the CSLB and for planning, organizing, and directing CSLB activities in the areas of administration, enforcement, information technology, and licensure. The position is located in Sacramento, California. All submissions must be received by 5:00p.m. on October 15, 2014, and must include both email and telephone contact information. For additional information review the invitation or contact Eileen Fuller at (916) 574-8385.
The current Registrar of Contractors, Steve Sands, announced on April 24, at the CSLB’s quarterly board meeting, that he planned to retire at the end of the year, after being “at the helm” of the CSLB since January 1, 2001.
Additional Resources: California CSLB Registrar of Contractors Announces Departure