Weekly Update: February 16, 2017

homebuilders of iowa legislation

HBAI Legislative Report 2/10/17

We had a great HBAI legislative day yesterday – thanks to everyone who participated.  There were many more participants than in these photos, just tough to gather us all together at once.  We were very encouraged by the dialogue with our key issues.  Here is a copy of the brochure that we worked off from.

 

Updates:

Hair and Private Sector Drug Testing –  SF 32 passed the Iowa Senate which would add hair specimens to the list of allowable samples for private sector drug testing.  The bill passed by a vote of 35 to 15.  The bill is now eligible for consideration in the Iowa House.  HBAI registered in favor of the bill.  As a side note, the bill was supported by six Democrats.  These Senators who voted in favor of the bill all come from districts in which President Trump did very well during the last election.  They are:  Chaz Allen (D-Newton); Tod Bowman (D-Maquoketa); Rita Hart (D-Wheatland); Kevin Kinney (D-Oxford); Liz Mathis (D-Cedar Rapids); and Amanda Ragan (D-Mason City)

HF231Economic Development Authority Powers with Apprenticeship Training Program – passed out of House.  (Monitor)

Newly Discussed:

Water Quality – The first round with the water quality debate was made by the Governor’s office, with the introduction of his recommended bill – SSB 1034.  This bill diverts 2018 through 2030 funds from the Rebuild Iowa Infrastructure Fund (RIIF).  These funds would be used for edge of field erosion practice cost-share and other similar water quality practices.  Monitor

E-Verify Bill Introduced – SF 172 and HF205 would require the use of E-Verify when hiring.  Also, the bill would set up penalties if an employer knowingly hired an unauthorized alien.  Monitor

HF229Licensing Qualifications of Residential Master Electrician(If you’re an electrican and reading this, email Jay Iverson with your thoughts on it)  The bill provides qualifications necessary for a person to be licensed as a residential master electrician by the board. To be licensed as a residential master electrician, an applicant must file an application and pay the application fee as established by the board, pass a residential master electrician examination approved by the board, and provide the board with evidence of having completed at least four years of practical experience performing residential electrical work.  Undecided

HSB62 & SSB1092Mechanics’ Liens and Public Construction Liens – Under current law, when a mechanic’s lien is for material furnished or labor performed in the construction, repair, or equipment of any railroad, canal, viaduct, or other similar improvement, the lien does not attach to an easement or right-of-way. The bill provides that such a mechanic’s lien does attach to an easement or right-of-way.  Against

HSB86Electrician Licensing – modifying licensing provisions applicable to electricians and electrical contractors.  The bill removes reference to farm property from Code section 103., subsection 7, which provides an exemption from Code chapter 103 for performing electrical work on an owner’s principal residence under specified circumstances.  Undecided

SSB1055Geothermal tax credit – property tax exemption for the value added by certain geothermal heating or cooling systems and including applicability provisions.  This bill authorizes the exemption for the refitted construction or installation of a geothermal heating or cooling system on or after July 1, 2017, on property classified as multi-residential, commercial, industrial, or agricultural property. The bill also removes the 10-year limitation on the duration of the exemption.  Monitor

SF201Common Interest Community Reinstatement of Lapsed Use Restrictions – This bill relates to the ability of a common interest community to reinstate lapsed use restrictions.  The bill references the definition of “use restriction” in Code section 614.24, which is a limitation or prohibition on the rights of a landowner to make use of the landowner’s real estate, including limitations or prohibitions on commercial uses, rental use, parking and storage of recreational vehicles and their attachments, ownership of pets, outdoor domestic uses, construction and use of accessory structures, building dimensions and colors, building construction materials, and landscaping.  Against

homebuilders of iowa on the hill
Your HBAI Board of Directors met yesterday after our annual hill visit day.  We only meet three times per year, so we covered a great deal of ground in a fairly short amount of time.

homebuilders of iowa walleye

HBAI Team a go for Lake Erie Walleye Tournament – May 5-7

We’ve tried to put this together for the past few years, with lots of interest but little commitment.  This is different – we’re half full right now for the 2017 Wall-Iowa Tournament.  We will have a team of six people.  There is nowhere in the world with as good of a chance to catch 30″+ walleyes consistently.  The cost for each of us is $610, which includes three days of guided fishing, lodging in condos, a prime rib dinner at the awards banquet, and tons of prizes and awards.  We need to put it together ASAP since the condo fills up and four teams have to live off site, which is a pain.

This is Jay Iverson writing this and I participated for about six years in it (many years ago) placing in the top three each time.  There is enough prize money to pay for the entire trip and more.  I usually walked away money ahead and with quality items like St. Croix rods from door prize drawings.

Once we have our six, we’ll figure out transportation and there are inexpensive options for that. Friday May 5 is a pre-fishing day, Saturday May 6 and Sunday May 7 are tournament days.  Email me if you’re interested as soon as possible – Jay Iverson.

Scholarship Deadline

The HBAI Education Corporation annually awards scholarships to students entering the building trades.  If you know of a student, the deadline to apply is March 31.  Follow this link for more information and the application.

Travel Discounts

We recently announced a new member benefit – discounts on travel.  So far they have been significantly less expensive than any other travel site.  It’s a $99 value, but costs you nothing as a member.  Pass it on to family and friends too.

With your FREE Snazzy Traveler membership (valued at $99) you gain access to unlimited savings on thousands of hotels, cars, cruises, activities and more all year long.  Go to:

www.SnazzyTraveler.com/HBAIowa

Enter our exclusive promo code: HBAIowaTravel2017

When you enter in our code, you have to hit that “redeem” icon or else it acts like it wants credit card info and a $99 payment.

OSHA Requires Job-Related Injury and Illness Reporting

Just a reminder: Employers were required by Feb. 1 to post OSHA Form 300A, which summarizes the job-related injuries and illnesses that occurred in the previous year.  The form must be posted until April 30 per Occupational Safety and Health Administration (OSHA) recordkeeping mandates, and displayed in a common area where notices to employees are usually posted.

To assist in calculating incidence rates, information about the annual average number of employees and total hours worked during the calendar year is also required. If a company recorded no injuries or illnesses in 2016, the employer must enter “zero” on the total line. The form must be signed and certified by a company executive.

It’s also important to note that OSHA’s recent final rule on recordkeeping clarifies an employer’s continuing obligation to make and maintain an accurate record of each recordable injury and illness. The final rule became effective Jan. 18.

This rule was intended to clarify OSHA’s position that an employer’s duty to record an injury or illness continues for the full five-year record retention period. Meaning that, up-to-date and accurate injury and illness records should be maintained for five years after the end of the calendar year in which the incident occurred.

Additionally, OSHA’s new Electronic Recordkeeping/Reporting rule (Part 1904) requires employers with 20 or more employers to submit the same injury and illness data from Form 300 electronically by July 1, 2017.  (Employers with 10 or fewer employees and employers in certain industries are usually exempt from federal OSHA injury and illness recordkeeping and posting requirements.)  For more information, visit the OSHA Injury and Illness Recordkeeping and Reporting Requirements online or NAHB’s Recordkeeping Toolkit.

Weekly Update: February 9, 2017

HBA Iowa Judical Meeting

   There was a Senate Judicial subcommittee meeting set for this morning regarding SSB1010, but it was cancelled.  We took advantage of our great crew though and met with subcommittee Chair Senator Julian Garrett (R) District 13.  He had a bunch of tough questions, but it turned into an opportunity.  Thanks a bunch to those individuals who helped us out (left to right) Larry Heisler (Reynolds & Reynolds Insurance); Dan Knoup (DM HBA executive officer); Rachel Flint (VP at Hubbell Homes); Edward Origer (VP at McAninch Corp); David Adelman (Hubbell lobbyist); Senator Garrett; and HBAI 2nd Vice President Scott Webster (Premier Homes Quad Cities).  Not pictured are Iowa Association of Realtors Government Relations Director Jen Kingland and HBAI Executive Officer Jay Iverson.

It’s Time Now for Repose Reduction on Senate Side

We’ve been asking you for the past few weeks to contact your representatives in the Iowa House regarding HF3, reducing the state Statute-of-Repose from a mind boggling 15 years to eight.  Now it’s time to begin working on the Senate version SSB1010.  It’s in the Senate Judiciary Committee and we met for the first time earlier this morning.

If you are a constituent in any of these districts, your message will go a very long ways.  Here is the list of Senate Judiciary Committee members:

Republicans

Chairman Brad Zaun, Urbandale, Grimes, Johnston District 20

Dan Dawson, Council Bluffs, District 8

Jeff Edler, Marshalltown, Tama, Toledo, District 36

Julian Garrett, Winterset, Indianola, Des Moines District 13

Charles Schneider, Waukee, Clive, West Des Moines, Windsor Heights, District 22

Jason Schultz, IDA, Monona, Crawford, Harrison, Shelby counties District 9

Tom Shipley, Pottawattamie, Cass, Adams, Union counties District 11

Amy Sinclair, Jasper, Marion, Lucas, Clarke, Decatur, Wayne counties District 14

Democrats

Rich Taylor, Washington, Henry, Lee counties District 42

Tony Bisignano, Des Moines District 17

Nate Boulton, Des Moines, Pleasant Hill District 16

Kevin Kinney, Johnson, Keokuk counties District 39

Janet Petersen, Des Moines, District 18

The message is the same as it was for the House.  If you can add a personal story or way to express that this affects you directly, that would be better than copying and pasting the following talking points.  These are here to help you add to the argument:

Address them as “Senator (last name)”

  • Nationally 93% of all claims happen by month 96 and over 99% by 120 months.
  • Reducing the statute-of-repose will spur more development and support more jobs.
  • Surrounding states (MN, WI, SD, NE, IL, MO, KS) all have ten years of less.  We are at a disadvantage when competing with border cities.
  • From a small business standpoint, we believe that our members could see a 20% reduction in insurance premiums due to a competitive environment.  Nearly 70% of the insurance companies stopped offering builders risk insurance products during the recession and as a result of our 15 year Repose.
  • A large insurance company is called 2/10 Warranty group – two year limitations and ten years repose is the national standard.  They once had a five year extension, but it failed miserably.
  • It will help with housing affordability
  • Support HF3 as it is written, covering all real property.
  • Iowa is out of the mainstream for construction litigation claims.  We have a 15 year statute of repose for improvements to real property (i.e. buildings, highways, bridges, etc.), which is the longest in the nation.  Just compare us to neighboring states – all are at ten years or less, plus many other states have recently reduced theirs to as low as four.
  • Most claims occur within the first three years.  The reduction will have very little impact on the consumer.
  • Cases are difficult to manage at the end of that 15 years – people die, companies are sold or closed, documents are lost, memories fade, etc.
  • These laws encourage timely resolution of disputes and promote justice by disposing of old claims and shifting liability to those in control of the property.
  • Without these laws construction professionals could be liable for their work indefinitely.
  • A shorter statute of repose would be a significant benefit to construction professionals in Iowa. An eight-year statute of repose perhaps strikes a better balance between the need for the law to afford a redress for an injury and the need to limit liability for construction professionals after a certain amount of time has passed.
  • A reduction in the repose period would not impact construction project owners’ ability to assert breach of contract, breach of warranty, fraud or any other claims.
  • Studies have shown that bad building practices and deficiencies can reasonably be discovered within 5 years.  Certainly there are instances in which it takes longer, but the question remains as to what is a fair and reasonable timeline.  15 years in not fair and reasonable.

   HBAI President Tim Ruth, Executive Officer Jay Iverson, and past President Mike Farr spoke to over 70 members of the Dubuque HBA Tuesday evening.  It was a great meeting and we enjoyed getting together with the organization, which is not a part of our Federation.  We conveyed a myriad of reasons why they should be a part of our group.  A special shout out to long-time HBAI member Mark Gudenkauf (Mark Gudenkauf Construction in Dubuque) for sharing his reasons for belonging.

HBAI Legislative Committee February 3 Declarations

SF156Minimum Wage – This bill increases the state minimum hourly wage to $8.75 as of July 1, 2017, $9.75 as of January 1, 2018, and $10.75 as of January 1, 2019.  Monitor

SSB1009 & HF134Residential Occupancy – An Act relating to the authority of cities to regulate and restrict the occupancy of residential rental property.  This bill relates to the authority of cities to regulate and restrict the occupancy of residential rental property. The bill provides that a city shall not, after January 1, 2018, adopt or enforce any regulation or restriction related to the occupancy of residential rental property based upon the familial or nonfamilial relationships of the occupantsMonitor

SSB1013Updating IRS Code ReferencesDecoupling From Certain bonus depreciation – updating the Code references to the Internal Revenue Code and decoupling from certain federal bonus depreciation provisions, and including effective date and retroactive applicability provisions. For

SSB1014 Updating IRS Code ReferencesDecoupling From Certain bonus depreciation – Similar to SSB1013.  Monitor

SSB1026Economic Development Authority Powers including Apprenticeship Training Programs – This bill relates to the powers and programs of the economic development authority, including apprentice eligibility for purposes of calculating financial assistance awards under the apprenticeship training program.  Undecided.

SSB1034Water Quality/Wastewater Tax – This bill relates to water quality by modifying an existing wastewater treatment program, establishing new water quality programs, providing for appropriations from the rebuild Iowa infrastructure fund and making other appropriations, and creating a water service excise tax and related sales tax exemption.  Monitor

SSB1035 & HSB65Workforce Housing Tax Incentives – This bill relates to the workforce housing tax incentives program by increasing the maximum dollar amount that may be allocated to the program, by requiring that a certain dollar value of tax credits be allocated to housing projects in small cities, and by increasing the percentage for computing tax credits for such housing projects. The bill raises the annual allowable tax credits allocation under the program from $20 million to $30 million, but maintains the economic development authority’s (authority) $170 million aggregate tax credit limit. The bill requires the authority to allocate at least $10 million in tax credits to housing projects in small cities and to administer such reserved allocations separately.  Monitor

HF121Employee leave for time off and vacation leave – The bill provides that if an employee is suspended or terminated, upon request the employer must pay all earned wages, now including paid time off, by the next regular payday.  This bill provides employee leave by providing for time off and vacation leave. The bill relates to payments for accrued vacation time and for accrued paid time off for all employees who are terminated or suspended. Current law requires an employer to pay accrued vacation pay to a terminated or suspended employee only if the employer has a policy, procedure, or contract that requires the employer to do so. The bill defines “paid time off” as a benefit allowing an employee to take time off from work with pay without regard to the reason the employee chooses to take the time off. “Paid time off” is also added to the definition of “wages”.  Monitor

HF122Geothermal Tax Credit – This bill creates a geothermal tax credit available against the corporate income tax equal to 10 percent of the expenditures made by a taxpayer for qualified geothermal energy system property if depreciation or amortization is allowable to the taxpayer under the Internal Revenue Code with respect to the property, and if the property is installed on or in connection with a structure located in Iowa.  Monitor

HF123Geothermal Tax Credit – This bill creates a geothermal tax credit available against the franchise tax equal to 10 percent of the expenditures made by a taxpayer for qualified geothermal energy system property if depreciation or amortization is allowable to the taxpayer under the Internal Revenue Code with respect to the property, and if the property is installed on or in connection with a structure located in Iowa.  Monitor

HF131Housing Assistance from Veterans Trust Fund – This bill provides that moneys in the veteran’s trust fund may be expended, upon a majority vote of the state commission of veteran’s affairs, for housing assistance for the benefit of veterans and the spouses and dependents of veterans.  This bill provides that moneys in the veterans trust fund may be expended, upon a majority vote of the state commission of veterans affairs, for housing assistance for the benefit of veterans and the spouses and dependents of veterans.  For

HF135Power of Attorney with Respect to Real Property – This bill provides that, unless a power of attorney otherwise provides and subject to certain restrictions contained in Code section 633B.201, an agent that has been granted general authority with respect to real property is authorized to relinquish any and all of the principal’s rights of dower, homestead, and elective share.  Monitor

HF158Common Interest Communities – The bill provides that it is the public policy of the state that the management and affairs of common interest communities be conducted openly and that the new Code chapter is to be construed to provide open access to the management of the common interest community for the unit owners.  This is really long and in-depth.  Against

HSB60City and County Development Rights – Under the bill, a city or county may, by ordinance or amendment, establish development rights arising from estates in land as a part of the political subdivision’s zoning regulations. Such development rights are declared to be severable and separately conveyable from the estate in fee simple from which the development rights are derived. Monitor

HSB62Mechanics’ Liens and Public Construction Liens – Under current law, when a mechanic’s lien is for material furnished or labor performed in the construction, repair, or equipment of any railroad, canal, viaduct, or other similar improvement, the lien does not attach to an easement or right-of-way. The bill provides that such a mechanic’s lien does attach to an easement or right-of-way.  Undecided

Scholarship Deadline

The HBAI Education Corporation annually awards scholarships to students entering the building trades.  If you know of a student, the deadline to apply is March 31.  Follow this link for more information and the application.

School Age Children Per Home Averages

Across the United States, builders are often charged impact fees by local governments to help pay for infrastructure associated with children in new residential developments entering the public education system. Therefore, builders have an interest in ensuring that the number of school age children in new developments is accurately estimated. Local governments also benefit from this data because it can help better reconcile education costs.

Using data from the US Census Bureau’s American Community Survey (2015), the National Association of Home Builders (NAHB) tabulated the average number of school age children (defined as children between the ages of 5 and 18) in housing units. The tabulations also include breakdowns by different types of residential units, such as single-family detached and multifamily. It also includes breakdowns by household characteristics such as mobility and tenure.

The most prominent finding from the report is that, on average, there is less than one school age child per housing unit in the US: approximately 41 children per 100 housing units (all occupied units and vacant units). Other important findings from the analysis include the following:

  • Owner-occupied units have fewer children than renter-occupied units: 45.6 children per 100 owner-occupied units compared to 49.6 children per 100 renter-occupied units.
  • For most residential types, there are fewer children among households moving into new construction compared to those moving into existing units. In newly constructed single-family attached units there is an average of only 30.2 children per 100 units, compared to 45.2 per 100 existing units. In newly constructed multifamily developments, there is an average of 21.9 children per 100 units, compared to 26.3 per 100 existing units (as seen in Figure 3).

Figure 3: Average Number of Children in New and Existing Construction by Residential Development Type

  • Multifamily units with 1 bedroom or less have the least amount of children compared to multifamily units with more bedrooms: 7.7 children per 100 one bedroom multifamily units, compared to 71.6 children per 100 three or more bedroom multifamily units.
  • A regional breakdown shows that, on average, many states in the Northeast region, including Vermont, Maine, and New Hampshire, have the fewest number of children living in housing units.

For the complete report, including detailed tabulations of the average number of school age children in the US and by state, please click here: NAHB 2017 February Special Study.