Recently Passed State Laws Affect NC Construction Industry


A new statute that will make excavation safer is among several state laws that took effect Oct. 1 that impact design and building professionals, reports the Charlotte Business Journal.

Contractors must provide information about their property and go to dig sites to locate their lines before excavation can start.  The statute provides penalties absent in the previous law and improves accountability for excavators and utility owners, says Allen Gray, director of the utility division at Carolinas Associated General Contractors.

Fewer than half of all companies with underground assets had participated in the program, he says, including many municipal utilities. By calling 811, a property owner can call out inspectors to find buried lines.

“It’s a cost issue for a lot of communities,” says Justus Everett, president of ABE Utilities Inc. in Raleigh, who helped write the new law. “The city of Raleigh would locate their water and sewer lines, for example, but not (lines for) their underground traffic lights.”

Everett recalled a situation where his company was digging near a Raleigh municipal building when the excavator came across unmarked telephone lines. Phone lines are especially challenging, he says, because so many telecommunications companies are in operation and are constantly changing ownership.

Someone from the city identified the lines as communication feeders for all the traffic signals on the two main arteries into downtown Raleigh, he says. Before the dig, though, Everett’s company had no idea they were there.

The construction community had been trying to improve the law since 1999. Last year, N.C. Rep. Mike Hager (R-Rutherfordton) brought together construction, utility and telecom companies to hammer out details, Allen says. The group met in Raleigh until all parties agreed on what the law should accomplish and how. Hager introduced the bill this year in the General Assembly; it passed both houses unanimously.

Another new law, HB 857, lets public entities award design-build construction contracts without having to win approval from the General Assembly. Under design-build, architects and engineers work for the general contractor, which is responsible for keeping costs under control.   The law also allows developers to front government up to 50% of the authorized cost to build all but transportation projects. The public-private funding mechanism can advance projects when public financing is difficult to obtain.

“We were very pleased with the business-mindedness of the legislators,” says Dave Simpson, government relations and building director at Carolinas AGC.

The law also requires municipalities to consider the professional qualifications of firms making bids, not just the bid price, says Richard Alsop, a partner at Charette Architects.  In the past, architects typically had to design roughly 35% of a public project before making a bid, he says. That meant firms often had to pony up to $60,000 to $100,000 in labor with no guarantee of winning a contract. The requirement essentially prevented small firms from competing for government projects, Alsop says.

Another new law, HB 628, bans LEED environmental standards for state construction projects if they put in-state industries at a disadvantage. It also provided an out to a requirement that major projects be designed to consume 30% less energy compared with 2004 standards. As amended, Alsop says, the energy-reduction requirement goes into effect only if a 10-year payback can be shown.

“LEED is a comprehensive method for evaluating energy and sustainability parameters, and it is proven,” he says. “The bill will likely have an impact on professionals seeking the best value for dollars spent on state projects. In my opinion, practical solutions with regard to the use of material and labor resources require more comprehensive thinking than this bill provides.”

The state chapter of the American Institute of Architects was disappointed as well when legislators “tinkered” in HB 998 with tax rates for professional services rather than overhauling the tax code, Alsop adds. N.C. architects have been hindered when competing with architects from states not requiring the service fees, he says.

Other new laws affecting the design-build community include:

The Regulatory Reform Act, which the Carolinas AGC says will cut red tape for builders. It’s not as expansive as builders and developers had hoped, though. Late in the session, language preventing local governments from enacting environmental rules stricter than state or federal laws was stripped, pending further study. So was language that would have prohibited residents from filing protest petitions over rezonings. Read More.