May 2012 Archives

Ex-Im Charter Awaits President Obama's Signature

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By Pillsbury Winthrop Shaw Pittman

Established in 1934 by an executive order and then made an independent agency in the Executive Branch by Congress in 1945, the Export-Import Bank is the official export credit agency of the United States whose mission is to assist in financing the export of U.S. goods and services to international markets. In 2011 alone, Ex-Im financed approximately $32 billion in U.S. exports, sustaining 290,000 American jobs. Because of the fees and interest it charges borrowers, Ex-Im is a self-sustaining entity which, since 2005, has returned a profit to the U.S. Treasury.

On May 15, 2012, Congress passed the Export-Import Bank Reauthorization Act of 2012 (H.R. 2072), which extends Ex-Im's authority for an additional three years and, by 2014, will raise the bank's credit exposure ceiling from $100 billion to $140 billion. President Obama is expected to sign the Act into law before May 31, 2012, when the bank's charter is scheduled to expire.

To learn more about this, click here to read the client alert that was written by Jessica R. Berenyi.

Significant Changes to California's Mechanics Lien Law Coming July 1, 2012

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By , , and

Effective July 1, 2012, all of the existing statutes governing mechanics liens, stop notices and payment bonds in California will be repealed and replaced by updated statutes. The law will also result in new statutes governing stop notices (on both public and private works), payment bonds and related claims. The law relocates and renumbers the Mechanics Lien Law, but many of the provisions are substantively the same. Pillsbury attorneys prepared a handy chart that will assist those of you familiar with the old statutory scheme to retool for the new layout. To learn more about this, click here to read the client alert and chart.

With or without you -- State and local governments aren't waiting for the feds; they're investing in infrastructure now.

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Maybe this is the ying to the yang of the American Society of Civil Engineers report that Paul Levin blogged about earlier this week. The Urban Land Institute and Ernst & Young just published Infrastructure 2012: Spotlight on Leadership, in which they detail how state and local governments have decided not to wait for funding from the federal government. It has become like Waiting for Godot (or perhaps Waiting for Guffman). In a Presidential election year the federal government is even more gridlocked than normal -- if you can believe that.

But that gridlock doesn't slow down the rate of decay of our infrastructure, so state and local governments are finding ways to get'r done. These range from old fashioned taxes and bonds to Public Private Partnerships. Of course, no one likes taxes and some object to public private partnerships as selling off our infrastructure. But remember, when a private company finances a road, they can't roll it up and take it home.

If you don't have time to read the 70 page report, you can see a condensed writeup about it here.

5 Tips for Avoiding Settlement Traps

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By Michael S. McNamara

A Bloomberg Law search reveals that more than 1,000 lawsuits have been brought in the past decade for breaches of settlement agreements. To craft a settlement that has staying power, and to avoid buyer's remorse, both clients and their counsel should learn how to avoid the most common settlement traps. Two of our litigators, Fred Brodie and Bruce Ericson, just wrote an article about five tips that everyone should keep in mind. The article can be found here.

America in the Dark

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The American Society of Civil Engineers (ASCE) just released a report titled "Failure to Act, the Economic Impact of Current Investment Trends in Electricity Infrastructure" and no, the results are not pretty. According to the report, the gap between the amount actually spent on infrastructure across America and the amount that needs to be spent to maintain the system will reach $107 billion by 2020 and $732 billion by 2040. The Southeast and the Western portions of the country are particularly vulnerable to infrastructure underinvestment, making up approximately half of the country's infrastructure deficit. Furthermore, don't forget about the 2003 blackout across large sections of the East Coast, including New York City, that showed the grid's vulnerability. This report comes on the heels of ASCE giving the United States a grade of "D+" in the Energy category in 2009. D+ seems pretty generous.

The ASCE report predicts that disruption and inconsistent service resulting from faulty electricity infrastructure will lead to a reduction in U.S. GDP of almost $500 billion and half a million fewer jobs in America by 2020. The calculations implicit in this report are simple: if we can spend $100 billion to address this problem over the next decade, the country on the whole will be half a trillion dollars better off. It seems so simple.
However, the crunch of budget deficits at both the federal and state levels means that these profitable long-term investments lose out to short-term cost cutting. President Obama, however, has championed doubling overall infrastructure spending that would also help spur job growth and make up for years of underinvestment, but it is not enough.

Public-Private Partnerships will play an important role in bridging this funding gap by leveraging private investment over the long-term. The private sectors sees this $500 billion in potential savings and the United States needs to think creatively to spur further infrastructure development.