The Site Report - Construction Law Insights, Issue 8, August 2023

Issue 8, 2023

Welcome to our eighth issue of The Site Report for the year.

We hope you enjoy this issue and, as always, thank you for reading.

Stephanie U. Eaton - Co-Chair, Construction Group; Vice Chair of Southern Offices, Litigation Department; Editor, The Site Report


Julian E. Neiser - Co-Chair, Construction Group; Vice Chair of Northern Offices, Litigation Department

Bring on the Sun! Licensing and Permitting for Contractors Installing Solar Panel Systems in NC

By Stephanie U. Eaton

With the growing emphasis of the use of renewables to reduce the carbon footprint of homes and buildings and tax incentives, there has been a proliferation of solar companies to meet the ever-growing demand for solar energy. According to NC Solar Power Facts, (NC Solar Power Facts, 2023), more than 200 solar companies are operating in North Carolina now. With this in mind, we wanted to pause a moment to remind contractors entering this business (and those already working on solar panel installations) about North Carolina licensing and permitting requirements.  

Click here to read the entire article.

Construction Stormwater Permitting Changes in Virginia

By Alexander L. Turner and Nadean Carson, PE

With recent changes to stormwater permitting in Virginia, the legal and practical implications of those changes need to be examined. Alex Turner, a member of the Virginia Bar and Spilman Thomas & Battle, PLLC’s Construction Law Practice Group, examines the legal requirements of stormwater permitting in Virginia, both federal and state. Nadean Carson, PE, a construction stormwater specialist, and the owner of Oya Construction, LLC, will discuss the practical implications the changes in Virginia stormwater permitting has on the construction industry in Virginia. Together, they will give you greater insight into the requirements of stormwater permitting for the construction industry in Virginia.

Click here to read the entire article.

Final Ruling by Department of Labor Means Big Changes for Road Builders

“Aided by labor groups, advocates, and other industry stakeholders’ comments, the Davis-Bacon Act sees the most comprehensive updates in 40 years.”

Why this is important: Local governments and local government agencies that have historically never had federal grants of sufficient size or frequency to need to worry about federal grant requirements and crosscutting measures have had to adjust quickly to a new reality, and these new changes to Davis-Bacon and Related Laws (“DBRL”) are a big part of that. The American Rescue Plan Act (“ARPA”) State and Local Government Fiscal Recovery Funds (“SLFRF”) regulations imposed on local governments requirements to comply with many of the Uniform Guidance rules, including Uniform Single Audit and Buy America, and adopt policies under Title VI of the Civil Rights Act, for Limited English Proficiency (“LEP”), and conflicts of interests (and put in place processes for compliance) that many never had had to deal with before. But SLFRF, while it required labor reporting that was new to many local government entities, only required best efforts on wages and wage reporting, not full DBRL compliance.

This is changing with the Bipartisan Infrastructure Law and the Broadband Equity Access and Deployment (“BEAD”) Program. The Infrastructure Law will provide revenue streams to local government that many have never had to deal with before, including for infrastructure and roads, but it will apply full DBRL rules. DBRL requires that construction contractors pay “prevailing wages,” which are set by geographic area and trade by the U.S. Department of Labor. There are also anti-kickback provisions and paperwork provisions. While these are good for wage-earners and likely good for local economies, they introduce items of cost in contracts and internal administrative costs that local government, particularly smaller ones, is not used to.

BEAD, similarly, carries DBRL compliance requirements. BEAD will make billions of dollars available for broadband expansion across the country. Interestingly, however, BEAD grants will not be given to local governments to administer in partnership with private broadband providers, as has been the case with similar state-level programs such as the Virginia Telecommunications Initiative (“VATI”). Instead, the grants will be given directly to private companies, with a requirement to comply with DBRL. From the perspective of local governments hoping for broadband expansion, this will be important to follow. No one is sure whether private broadband companies, particularly large incumbent corporations, will be willing to bid on BEAD funding with as many strings attached as BEAD has in order to serve outlying, low-return areas.

All in all, while these new changes to DBRL are important, they are not as important to local government as adopting (and complying with) the full package of federal compliance requirements that come with these once-in-a-generation funding opportunities. Spilman’s Local Government & Public Entity team’s experience with these types of policies puts it in an excellent position to assist local governments facing new federal compliance challenges to put them into action. --- Michael W.S. Lockaby

America's Skilled Worker Shortage Impacting Construction, Manufacturing Industries

"The Bureau of Labor Statistics job openings report for June 2023 found that the construction industry had roughly 374,000 job openings while manufacturing had 582,000."

Why this is important: In The Site Report, we have highlighted a number of past articles about the skill labor shortage, its impact on construction businesses and projects, and the creative solutions some industry leaders are trying to use. Some of the solutions we have highlighted are increased recruiting to diverse workers and women, use of drones and technology to supplement the workforce, and use of apprenticeship programs. This article again highlights the positive impact apprenticeship programs can have on construction workforce development. Apprenticeship programs can be an excellent, lucrative path for both the business conducting the program and the workers engaged in the program, but they do come with unique employee-employer relationship needs and risks. Any business interested in setting up an apprenticeship program should consult with an experienced employment attorney to discuss benefits, risks, and the best ways to implement the program. --- Steven C. Hemric

Do Office Conversions Work?

“With a surplus of vacant office space, conversions seem to be the logical next step.”

Why this is important: As we all know the pandemic has changed how America views the need for brick and mortar office space. It is a well-known fact that there are millions of square footage of commercial office space that is now sitting empty and will most likely not be filled anytime soon. So what to do with all that space? One solution is to convert that commercial office space into residential housing or some other commercial use (for example, indoor pickle ball courts). A conversion of office space would require rezoning, upfitting, potential remediation of hazardous materials, tax incentives for historical buildings, and other construction considerations. This article dives into the potential challenges and opportunities that a conversion of office space would encounter, and the lawyers within the Construction Practice Group at Spilman Thomas and Battle can help you navigate those waters by advising on the need for rezoning, upfitting, tax incentives, and dealing with local municipalities to help breath the project into life. --- Matthew W. Georgitis

NC DOT to Deploy Remote Drone Operations at Construction Sites: The Path to Routine, BVLOS Inspections

“Now, the NC DOT announces an FAA waiver to remotely launch and fly drones beyond visual line of sight (BVLOS) to inspect the agency’s construction projects.”

Why this is important: Remote drone inspections are coming to North Carolina infrastructure projects! This is a major leap forward and promises to increase efficiency of inspections. As more and more AHJs, project owners, architects, and engineers obtain waivers to conduct remote inspections on jobsites, the industry has a chance to lower inspection costs and limit schedule impacts from delayed inspections caused by the need for inspectors to physically travel from jobsite to jobsite. Of course, using drones remotely also brings new risks to jobsites. Any AHJ or business interested in implementing drones on their projects (whether for remote/BVLOS inspections or for use within line of sight) should investigate those risks and account for them in their project contracts and insurance. An experienced construction attorney is a great resource for businesses and governmental entities seeking to implement drones, as an attorney can help assess risks, incorporate protective contract language, make insurance coverage recommendations, and assist with the FAA waiver process. --- Steven C. Hemric

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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