Philadelphia Construction Law Blog

The final version of the federal tax bill, which is expected to be passed by Congress this week, maintains for the most part the current tax status of private activity bonds which are important to the construction industry.   Private activity bonds provide tax credit incentives for investors for certain targeted developments such as affordable housing, economically distressed commercial development zones, historic building renovation, and infrastructure.    Earlier versions of the tax bill would have eliminated or sharply reduced funding for tax credit financing for affordable housing, which could have resulted in a reduction in building of up to 900,000 units over 10 years, according to some estimates. The current version restores funding for this tax credit financing, as well as funding for New Market Tax Credits, which allow private investors to secure tax credits for investment into economically disadvantaged areas.  However, because the tax bill cuts the federal corporate tax rate from 35% to 21%, there is some sentiment that the lower corporate tax rate could make tax credit investment less valuable and therefore dampen the volume of tax credit investment available from private industry. Some industry experts have estimated that this factor could result in a drop in production of affordable housing by as much as 15% annually.

On November 9, 2017,the Occupational Safety and Health Administration issued a rule delaying for one year, until November 10, 2018, the implementation of a Construction Crane Operator Certification requirement that was scheduled to go into effect on November 10, 2017.  The  crane operator certification requirement, based on an OSHA standard published in 2010, would require an independent third party certification of crane operators via testing and training.  Comments received by OSHA from the construction community questioned whether the independent testing certification standards and evaluation protocol proposed by the OSHA rule were superior to the testing, training, and crane operator certification currently being provided by crane employers. There were also comments made suggesting that the testing and certifications currently being used by crane employers would conflict with the proposed independent certification testing standards.  To study this issue further, OSHA has delayed the implementation of the independent testing standard for an additional year.  In the interim, OSHA has extended for one year its requirement that it is the crane employer’s duty to ensure that its crane operators are competent to operate a crane safely.  Andrew B. Cohn acohn@kaplaw.com 610.941.2549      

The Pittsburgh Post-Gazette reports that Pittsburgh International Airport will receive a $1.1 Billion facelift, ironically spurred by a downsizing of the airport facility. The consolidation of U.S. Airways, a major tenant at the airport, with American Airlines resulted in a substantial reduction in capacity at the airport over the last several years. A 600 person operation center at the airport was closed, as were other facilities. The plan recently unveiled is essentially a makeover for a terminal opened as a US Airways hub in 1992, but which now serves only ½ the traffic it once did. The project includes a new building for ticketing and security, a new parking garage and a streamlined boarding facility. Under the proposed modernization, the current landside building would be abandoned, the tram that hauls people from it to the X-shaped boarding facility, or airside, terminated, and the number of gates will be reduced to 51 from 75. Constructed in their place will be a $783.8 million landside building located between airside’s C and D concourses with new security and baggage facilities, a reconfigured international arrivals area, a 3,000-space parking garage, and other features designed focused on the needs of modern travelers. The Post-Gazette also reports that private developers have expressed interest in commercial development of vacant space at the airport for tenants interested in locating their businesses near the airport. The Federal Aviation Administration would likely have to approve any redevelopment of the vacant airport space. Andrew B. Cohn can be reached by email […]

In a recent opinion, the Third Circuit Court of Appeals held that the automatic stay of claims against a bankrupt contractor barred the filing of an electrical supplier’s NJ construction lien against the project real estate. The decision points out how differences between state lien statutes can affect the rights of lien claimants where a bankruptcy has been filed. In In Re Linear Electric Company, Inc., a prime electrical contractor filed a bankruptcy petition.  After the petition had been filed, two electrical suppliers to the bankrupt contractor filed New Jersey Construction Liens against real estate which had been improved with the electrical material supplied by the two lien claimants.  The bankrupt contractor moved to dismiss the liens as having been filed in violation of the automatic stay of claims imposed when a bankruptcy is filed, even though the lien claims were asserted against real property owned by the project owner, not directly against the bankrupt contractor. The Court held that the liens violated the automatic stay. It reasoned that even though the liens were asserted against real estate owned by a non-bankrupt party, under the New Jersey Lien statute, the liens functioned as a claim against the accounts receivable of the bankrupt electrical contractor in that if the liens were paid, the project owner would not have to pay the bankrupt contractor.  This would be to because, under the New Jersey Lien statute, construction liens are assessable only up to the amount of a “Lien Fund”, consisting of all unpaid […]