Tag Archives: legislation

Farm Bill Could Impact Construction Industry

This afternoon, President Trump is set to sign the Farm Bill, which could impact the construction industry with the included Timber Innovation Act.

The Timber Innovation Act, which was not without its detractors, was proposed “to create opportunities to use wood products, including mass timber, in the construction of tall wood buildings,” according to those who introduced the language to the legislation.

According to the American Wood Council, the act aims to:

  • Establish performance driven research and development program for advancing tall wood building construction in the United States.
  • Create federal grants to support state, local, university and private sector education, outreach, research and development, including education and assistance for architects and builders, that will accelerate the use of wood in tall buildings;
  • Authorize technical assistance for USDA, in cooperation with state foresters and state extension directors (or equivalent state officials), to implement a program of education and technical assistance for mass timber applications; and
  • Incentivize the retrofitting of existing facilities located in areas with high unemployment rates, to spur job creation in rural areas.

Read more about how the act’s proponents hope it creates jobs, expands markets, reduces construction’s environmental footprint, and more.

The legislation made it through to the final bill despite opposition from many organizations, including the National Stone, Sand and Gravel Association, which cited issues with marketplace fairness (using taxpayer money to promote one type of business over another), as well as a lack of research in the safety and structural viability of tall wooden buildings.

The Mason Contractors Association of America and National Ready Mixed Concrete Association were among other groups that voiced their opposition.

P3’s Bring Opportunity and Uncertainty

When Governor Phil Murphy signed a bill expanding the opportunities for Private-Public Partnerships (PPP or P3) projects, many expressed great hope that this opportunity—with the private companies assuming the financial risk and long-term maintenance of the project—can be the answer to the state’s infrastructure crisis, as well as a boon for construction jobs.

“We’ve seen many municipalities in New Jersey struggle to repair roads and bridges, build new borough facilities and redevelop their communities,” said Jack Kocsis, CEO of Associated Construction Contractors of New Jersey. “This new law now gives them the means to cost-effectively finance much-needed construction projects.”

With the new legislation, a state or local government agency, as well as school districts, can contract with a private company for a project.

“It could be a local library, highway construction, transit-related, the whole raft of infrastructure,” Murphy said when he signed the bill at The College of New Jersey’s Campus Town development, a project built collaboratively with private-sector partners.

Previously New Jersey only allowed P3s with public colleges and universities.

“Democrats and Republicans alike recognize the tremendous benefits that can arise when public officials and private sector partners work together,” Murphy said. “By doing so, we give state, county, and local officials the much-needed flexibility they need to improve their communities while creating good-paying new jobs – in most cases good, union jobs – while leveraging private capital to invest in public infrastructure.”

At its best, a P3 is a win for all, saving municipalities money, getting vitally needed infrastructure upgrades or important community projects done sooner and creating jobs in the construction industry. But it doesn’t always go so smoothly. Not all projects are eligible for P3s and the contracts are complicated. The results have not always been as hoped either.

At least 30 other states had legislation for use of P3s in widespread projects, but many have run into trouble. In Texas, the private company that operated a toll road went bankrupt forcing the state to step in and assist in financing. In Chicago, a deal required taxpayers to reimburse the private company when parking meters didn’t produce expected revenues.

There have also been concerns about a lack of oversight with everything from potential environmental issues to transparency to ensure fair competition in bidding–would large companies, perhaps from out-of-state come in and do all the work, or could the high risk taken on by the private companies keep some from bidding at all?  Another big concern was labor protections. Most of these issues, however, were addressed during the legislative process and are reflected in the law.

“During the legislative hearings, UTCA (Utility and Transportation Contractors Association of New Jersey) was successful in obtaining important amendments to protect the interests of our industry. The Association has been working with our partners for several years on P3 legislation and thanks to that successful effort, New Jersey has an important new tool for financing infrastructure,” UTCA said in a statement following the bill signing in August.

Kocsis agreed that the key protections are in place.

“In addition, the new law contains strong, time-tested contractor and labor protections ACCNJ has promoted for decades,” he said. “Equally important, this P3 legislation will not replace traditional project delivery, but rather supplement existing procurement and project financing methods.”

It will take time, various projects-and likely some failures-to know how to use P3s most effectively and to the benefit of the public and all parties involved and to decide if the optimism was warranted and this type of partnership is, in fact, the best long-term answer.

By Chris Colabella & Kara Yorio