News

1708, 2017

Real Estate Law Provides Unexpected Rewards

August 17th, 2017|

Written by:  Suzanne Cherot

Real estate law has been the focus of my practice for many years.  I have represented commercial real estate owners and developers of office buildings, medical buildings, hotels and retail stores, owners and developers of residential subdivisions, owners of mobile home parks, and nonprofit corporations that develop housing projects.  The legal work has covered the entire gamut of drafting and negotiating documents for purchases, sales, leases and financing of a variety of real estate projects throughout Alaska. The organization and closing of these transactions with clients, lenders, and title companies are always interesting and each transaction presents its own unique issues.

Early in this practice, I did not anticipate an unexpected reward of real estate practice – seeing the completed construction of projects in the community.

Over 30 years ago, we assisted a small group of visionary residents of Seward, Alaska during the inception and development of the Alaska SeaLife Center.  What was a dream of a small group of people became a reality.  The project involved agreements with the Exxon Valdez Trustee’s Council, the State of Alaska, and the City of Seward.  In spite of construction and early operational challenges, the SeaLife Center is now a wonderful and vibrant tourist destination and is renown for its environmental and scientific research of Alaska’s marine ecosystem and its species, and a learning center for children.  When I visit Seward and the SeaLife Center, I experience a great sense of  satisfaction knowing the role we played in making this happen.

I experience the same sense of satisfaction as I drive around Anchorage and see some of the commercial and real estate developments in which I played a small part but which have had a big impact on Anchorage families and businesses.

Low income tax credit housing projects are particularly rewarding. During the last ten years, I have had the opportunity to work with community-focused organizations such as Cook Inlet Housing Authority and RurAL CAP during the initial financing and investment stage through the closing of loan term financing.  All of these owners and developers are dedicated to improving the neighborhoods where the projects are located.  The projects help the elderly, disabled, and low income individuals who want to provide safe, clean, and well located housing for their families and children.  The projects have transformed neighborhoods and improved the quality of life for hundreds of Alaskans.

The legal representation for all real estate work, and particularly for low income tax credit projects is technical, complex and demanding.  However, the unexpected reward is seeing the tangible completed results.

 

 

 

1208, 2017

Changes in Regulations by the Federal Government Are the Real Impact on Procurement

August 12th, 2017|

Written by Jon M. DeVore

The Trump Administration just released its first Unified Regulatory Agenda.  This is one of the primary tools that the White House uses to control agency actions and has real impact on doing business with the government.  Most agency rules must be submitted to a White House office called Office of Information and Regulatory Affairs (OIRA) for review before they can be published.  OIRA’s primary role is to look at nonpartisan issues like a regulation’s costs and benefits.  But, because it is housed directly under the White House, it also allows the President to control the regulatory agenda.  Congress and the Administration are expected to push procurement reform for the Department of Defense (DoD) and other large agencies.  The SBA has been asked to be involved in many of these regulatory and policy reforms.

The Unified Agenda reports that federal agencies have withdrawn 469 proposed rules, reconsidered 391 active regulations, and reduced economically significant regulations by 50%.  As many commentators have noted, it is fairly easy and cost free for Pres. Trump to cancel rulemakings Pres. Obama was considering.  It is a useful reminder, however, to expect more deregulation than regulation from this White House.  That said, the Administration is not doing a complete about face on all rules that are near completion.  For example, the “Buy American, Hire American” is going to be a major policy push and will find itself in new regulations.

The Federal Acquisition Regulations (FARs) are on track to be amended to reflect several recent items that may impact the Federal Contracting.  The changes are expected to address the following issues:

  • Changes in SBA Regulations on Status Determinations (To be proposed Sept. 2017 and open for comment until Dec.) – These clarifications are expected to relieve the burden on both industry and government by reducing the number of protests related to inappropriate elimination from competition of offers from 8(a) joint ventures and inappropriate awards to ineligible 8(a) joint ventures. This will reduce the risk for fraud by clarifying the role of SBA as the authority for making eligibility determination. The rule is also expected to facilitate competition by clarifying the circumstances under which a joint venture is eligible for award under the 8(a) program.
  • Clarify that Overseas Contracting Is Not Excluded from Agency Responsibilities to Foster Small Business Participation (to be proposed Oct 2017 and open for comment until Dec.) In its final rule, SBA has clarified that, as a general matter, its small business contracting regulations apply regardless of the place of performance. There is a need to amend the FAR both to bring its coverage into alignment with SBA’s regulation and to give agencies the tools they need, especially the ability to use set-asides to maximize opportunities for small businesses overseas.  SBA intends to include contracts performed outside of the US in agencies’ prime contracting goals beginning in FY 2016. Although inclusion for goaling purposes is not dependent on FAR changes, amending FAR part 19 will allow agencies to take advantage of the tools authorized for providing small business opportunities for contracts awarded outside of the US.  This will make it easier for small businesses to receive additional opportunities for contracts performed outside of the US.  The new FAR regulation has significant implications for opening more markets for small businesses.
  • Revise Limits on Subcontracting (to be proposed Aug 2017 and open for comment until Oct) This FAR change incorporates SBA final rule which implemented the statutory requirements of sec. 1651 of the National Defense Authorization Act (NDAA) for FY 2013. This action is necessary to meet the Congressional intent of clarifying the limitations on subcontracting with which small businesses must comply, as well as the ways in which they can comply.  Failure to implement sec. 1651 promptly will prevent small businesses from taking advantage of subcontracts with similarly situated entities.  This new FAR update is critical to the changes mandated by the NDAA and significantly changes the manner in which contract performance is measured.
  • Changes to Section 811 There will be new FAR regulations adding Controls on Sole Source 8(a) Contracts Exceeding $22 Million (final rule expected in Oct.) – This rule implements guidance from a Government Accountability Office report entitled “Federal Contracting: Slow Start to Implementation of Justifications for 8{a) Sole-Source Contracts” (GA0-13-118, December 2012). Sole-source contracting regulations are statutory and are found in sec. 811 of the NDAA for FY 2010 (Pub. L. 11184) (see 77 FR 23369).  These clarifications improve the contracting officer’s ability to comply with the sole source contracts and statutory requirements.  This rule provides such guidance, including when justification is necessary, how contracting officers should comply, and when a separate sole-source justification is necessary for out-of-scope modifications to 8(a) sole-source contracts.
  • Partial Set Asides, Reserves, and Multiple-Award Contracts (final rule expected in Sept.) This rule incorporates statutory requirements discussed at sec.1331 of the Small Business Jobs Act of 2010 (15 U.S.C. 644(r)) and the SBA’s final rule at 78 FR 61114, dated October 2, 2013. The rule increases small business participation in Federal prime contracts by ensuring that small businesses have greater access to multiple award contracts and clarifying the procedures for submitting proposals for partial set-asides, reserves, and orders placed under such contracts.
  • HUBZone Regulations (proposed rule expected in Sept) SBA has been reviewing its processes and procedures for implementing the HUBZone program and has determined that several of the regulations governing the program should be amended in order to resolve certain issues that have arisen. As a result, the proposed rule would constitute a comprehensive revision of part 126 of SBA’s regulations to clarify current HUBZone Program regulations, and implement various new procedures. The SBA will focus on the principles of Executive Orders 12866, 13771 and 13563 to determine whether portions of regulations should be modified, streamlined, expanded or repealed to make the HUBZone program more effective and/or less burdensome on small business concerns.
  • Updates to Reflect Last Year’s NDAA (proposed rule expected in Sept.) – Sec.1822 of the NDAA for FY 2017, Public Law 114-328, Dec. 23, 2016, establishes a pilot program for qualified subcontractors to obtain past performance ratings that can be used to compete for prime contracts. 1811 of the NDAA of 2017 also limits the scope of review of Procurement Center Representatives for certain DoD procurements performed outside of the U.S.  Sec. 1821 of the NDAA of 2017, establishes that failure to act in good faith in providing timely subcontracting reports shall be considered a material breach of the contract.  Sec. 863 of the NDAA for FY 2016, Public Law 114-92, Nov. 25, 2015, establishes procedures for the publication of acquisition strategies if the acquisition involves consolidation or substantial bundling. SBA also intends to request comment on various proposed changes requested by industry or other agencies, including those pertaining to exclusions from calculating compliance with the limitations on subcontracting, an agency’s ability to set aside orders under set-aside contracts, and a contracting officer’s authority to request reports on a prime contractor’s compliance with the limitations on subcontracting.

As is obvious by the list of anticipated regulations, the new Administration will not be hesitant to propose new regulations and policies.  What is less clear is how this administration will consider small business and minority, Alaska Native, NHO and Native American owned businesses in the complexity of the Federal Procurement System.  Monitoring these regulations is extremely critical and commenting on the new proposal is crucial.  We recommend working with the Congressional Delegations in assisting in crafting the FAR clarifications.

308, 2017

Jason Brandeis Gives Presentation on Alaska Marijuana Law At National Conference

August 3rd, 2017|

Written by:  Jason Brandeis

On July 28-29, I attended the Cannabis Law Institute (http://www.canbar.org/cli/), held at the University of Denver Sturm College of Law. This conference and continuing legal education event was put on by the National Cannabis Bar Association and the Sturm College of Law. This event provided an opportunity for all attendees (including practitioners, academics, and policy advocates) to engage with one another and learn more about developments in marijuana law and policy, best industry practices, and to identify and discuss emerging issues.

I was invited to provide a perspective on Alaska marijuana law as part of a panel discussion titled The Laws and Regulatory Systems of the Western States. My presentation included a history of marijuana regulation in Alaska, an overview of Alaska’s current regulatory and licensing framework, and a discussion of the unique challenges and controversies the industry faces in Alaska, such as lack of access to banking services and transportation difficulties faced by marijuana businesses that are “off the road system.” In addition to giving a presentation, I was able to attend seminars that covered a variety of topics, including business law issues, legal ethics, constitutional implications of marijuana legalization, federal oversight of state marijuana industries, and updates on the marijuana laws of other states.

208, 2017

A Founding Partner’s Perspective: Ron Birch Takes A Look Back at the History of Birch Horton Bittner & Cherot

August 2nd, 2017|

Written by:  Ronald G. Birch

Birch Horton Bittner & Cherot (“BHBC”) is fast approaching its 50th anniversary.  At a time when many established firms in Anchorage are closing their doors, I can’t help but appreciate how far we have come, and that we are still hard at work for our clients.

Joining with Bill Jermain, “Birch and Jermain” first opened its doors above a sporting goods store on 4th & K Street on February 1, 1971, a second story walkup two-bedroom apartment converted into a small law office (the Keyboard Lounge was later located in the same building).  Within two years, Hal Horton, Bill Bittner, and Suzanne Cherot joined this great adventure, contributing to the firm’s success and rapid growth.  By 1975, the firm had offices in Anchorage, Fairbanks, Juneau and Washington D.C.  While Bill Jermain left to start his own firm in 1976, Hal, Suzanne, Bill and I opened our office building in Anchorage in 1978, where the firm remained for nearly 40 years until moving to its new location at 510 L Street.

The D.C. office was opened because virtually everything impacting Alaska at that time necessitated federal involvement, including the Alaska Native Claims Settlement Act, the D-2 provision amendments, the Alaska National Interest Land Conservation Act, and the development of the Trans-Alaska Pipeline, which is still crucial to Alaska’s economy today.  As a firm, we have been involved, either through litigation or negotiation, with every major issue in the State since 1971.

The influence this firm has had on the legal landscape for Alaska has been remarkable.  We have spawned trial and appellate judges, a U.S. Senator, and numerous excellent attorneys practicing in Alaska and beyond.  It is a point of great pride that the firm’s attorneys have worked together on behalf of Alaska and its residents for over 45 years.

Among our major cases, we were retained by the State of Alaska to litigate the D-2 battle; we appeared before the Court of Claims arguing that precluding export of Alaska’s oil constituted a taking; and challenging the validity of the export ban as being in derogation of the Commerce Clause found in the United States Constitution. Each of these issues was eventually legislatively resolved, and the firm played a major role in working with the Alaskan Congressional Delegation to implement the resolutions.

Equally important, we have worked with Alaskans and Alaska’s business community on their continuing evolution and success, including Alaska Native Corporations and the unique SBA 8(a) program, Teamsters members, injured Alaskans, municipal governments, and leaders in industry, big and small, including telecommunications, natural resources, construction, healthcare, commercial real estate and housing.   We truly have used our expertise to help the development and growth of Alaska.

Through the years our client base has expanded to the Lower 48, but we have never lost sight of the fact that Alaska is our base and our home.  Virtually every member of the D.C. office is a member of the Alaska bar.  The firm’s credo has always been to do justice, and as we enter our 47th year, the items I cherish most are the letters of thank you from people we have been able to help.

— Ron Birch

1807, 2017

Efficient Proximate Cause in Alaska: It’s Not Just (ahem) for the Birds

July 18th, 2017|

Written by:  Mara E. Michaletz

There is a horror scene in the Hitchcock movie “The Birds” which begins ominously in a restaurant in Bodega Bay, California. Tippi Hedren has driven up from San Francisco to bring a pair of lovebirds to a handsome stranger she met once in a pet store. (I have been told that this is how people “courted,” prior to the internet.) In the restaurant, locals are heatedly discussing the aggressive bird behavior that has been plaguing the town since Tippi’s arrival, but the debate ends when seagulls begin attacking people outside of the restaurant. A gas station attendant is knocked unconscious while filling a car; the gas spills into the street; a man not paying much attention (and you knew this was coming) attempts to light a cigar, and the pool of gas is ignited, ultimately causing the station to explode. The crowd ultimately blames Tippi for the disaster.

Poor Tippi. But imagine that you are the owner of the gas station, and you are trying to explain the sequence of events to your insurer. Does my insurance cover this loss? The answer will be dependent upon the cause of the loss. Was it fire? The inattentive cigar smoker? Or was it . . . the birds? (Alaskans know better than to discount frolicking animals as a source of damage, such as that time the damage was caused by a bear) (or that other time) (and that almost-other time).

The gas station’s insurer might respond that the station’s policy covers one cause, such as fire (a “covered peril”), but not another, such as aggressive bird behavior (an “excluded peril”). And this situation is not all that uncommon. For instance, in the aftermath of Hurricane Katrina, many Gulf Coast residents’ homes suffered damage caused by a combination of wind and water. When they turned to their insurance companies to provide compensation for their losses, some found their policies covered damage caused by wind but excluded damages caused by flooding or water. How is coverage determined in such cases?

Under the efficient proximate cause rule, if a loss is caused by several different perils, the loss will be covered if the efficient proximate cause was a covered peril. How to determine which peril is the efficient proximate cause? Over the course of the last century, courts have used three general tests:

  1. What was the cause “nearest the loss”? (in Tippi’s case, the fire);
  2. What was the cause that triggered the loss? (in Tippi’s case, the birds); and
  3. What was the cause most at fault? (what do you think?)

While states vary widely on which test they use to define the efficient proximate cause, Alaska follows this third test, called the “apportionment test,” to determine the efficient proximate cause of a loss. So, if a policy covers the main (or “predominant”) cause of a loss, then the policy will be deemed to cover the loss, even if another excluded cause is also a contributing factor.

Not every state follows this rule. In response to courts using efficient proximate cause to determine coverage, some insurance companies started incorporating “anti-concurrent clauses” in their policies. These clauses tried to work around efficient proximate cause by excluding coverage of an otherwise covered peril where an excluded peril was also at fault – regardless of which peril was the predominate one. But insureds in Alaska are protected from these anti-concurrent clauses through legislation. Alaska AS 21.36.096 (“Prohibited denial of claim for causation”) provides:

An insurer may not deny a claim if a risk, hazard, or contingency insured against is the dominant cause of a loss and the denial occurs because an excluded risk, hazard, or contingency is also in a chain of causes but operates on a secondary basis.

So, in Alaska, where there are concurrent causes of a loss, an insurance company is not allowed to deny coverage if the predominant cause is covered. More information about insurance coverage limitations and consumer protections for Alaskans can be found at the Department of Commerce, Community, and Economic Development’s Division of Insurance.

Insurance coverage issues can be complicated, particularly when a loss may be attributable to several different factors. But we like working on complicated coverage issues at Birch Horton. So whether you or your company has been affected by a loss attributable to birds, bears, or hurricanes, we are there to help you work through these issues and to achieve the best result for you.

And for more information on Alfred Hitchcock, Bodega Bay, and Hurricane Katrina, I suggest the following:

Truffaut/Hitchcock, by Francois Truffat (1967) (New Yorker review here)

Truffaut/Hitchcock documentary (HBO 2017) (New Yorker review here)

Sonoma Travel Guide: San Francisco Chronicle

A Road Trip Guide to Bodega Bay: 7×7

The Great Deluge: Hurricane Katrina, New Orleans, and the Mississippi Gulf Coast, by  Douglas Brinkley (2006)

2006, 2017

Senator Lisa Murkowski Meets with AK Child and Family to Discuss Benefits of Telehealth Service

June 20th, 2017|

Written By:  Elisabeth Ross

On Thursday, June 15, 2017, Senator Lisa Murkowski met with BHBC client Denis McCarville, Chief Executive Officer of AK Child and Family, and BHBC attorney Elisabeth Ross in Senator Murkowski’s Washington DC office.  The Senator has been a long-time supporter of AK Child’s mission and programs, which are designed to aid children and their families who have suffered challenging trauma.

AK Child has partnered with Alaska Communications to use telehealth technology creatively to reach youth in rural Alaska villages – to provide counseling before issues reach a crisis level where the child has to leave his/her home and community for residential treatment in Anchorage.  AK Child uses Alaska Communications’ telecommunications services as a means to  train foster parents and provide counseling for  families and youth remotely.   In this way, AK Child can reach more families and enable better outcomes for these children.    This is just one example of the many rural health care providers Alaska Communications supports, using, in part, the resources of the FCC’s universal service program.

 

Denis McCarville, President and CEO of AK Child & Family and the Alaska Association of Homes for Children, visited…

Posted by Lisa Murkowski on Friday, June 16, 2017