Weekly Update: April 6, 2017

   The Des Moines HBA Engagement Committee put together a legal advice breakfast with attorneys Chuck Becker and Jodie McDougal a few weeks ago.  It was well attended and great information was shared.

 

Another New Member Benefit – LegalShield

We are pleased to offer yet another member benefit – substantial discounts on subscriptions to LegalShield/IDShield.  Everyone deserves affordable legal and identity theft protection, including you. No matter how traumatic or trivial your situation, we are here to help. Unexpected legal and identity theft issues arise every day. With LegalShield on your side, you have the power to access legal and identity theft advice and services when you need them, all for one low monthly fee.  Here is a link to our HBAI plan, check it out.

Thanks to Everyone who Contacted Legislators on Mechanic’s Lien Bill

Our call to action last week on HF586 ended up being a fairly meaningless exercise – it made it through both chambers without a single dissenting vote.  As of this past Tuesday, it’s now on the Governor’s desk.  We spent time in meetings explaining why we didn’t think it was a good bill, with good conversation, but that train was rolling down the tracks with no stopping it.  It was changed because of the Standard Water vs. Jones case and attorney Jodie McDougal is planning to provide a synopsis of what it might mean to you.

Congress Rolls Back Volks Recordkeeping Rule

In a victory for our members and the small business community, Congress passed legislation in March that will force the Occupational Safety and Health Administration (OSHA) to reverse a recent recordkeeping rule that would harm small employers. President Trump is expected to sign the bill into law.

Tell Your Story for NAHB’s 75th Anniversary

2017 marks NAHB’s 75th anniversary, and it’s also a perfect opportunity to celebrate your contributions to the home building industry. Complete this simple form to tell us how your company or local home builders association has made history within the last 75 years. From epic achievements to smaller-scale accomplishments, make sure your story is part of NAHB’s anniversary.

Trump Signs Executive Order on Clean Power Plan

 NAHB applauded President Trump’s recent executive order directing the Environmental Protection Agency to rework the controversial Clean Power Plan rule. The executive order seeks to roll back regulations that could have resulted in the adoption of rigorous new building energy codes that would harm housing affordability while doing little to reduce carbon dioxide emissions.

Make Plans Now for the 2017 NAHB Legislative Conference

Builders looking to send a message to Congress that it needs to take action to keep housing and the economy moving forward should mark their calendar for the most important grassroots event of the year – the 2017 NAHB Legislative Conference. The day-long conference is on Wednesday, June 14, and coincides with the NAHB Midyear Board of Directors Meeting in Washington, D.C.
   Our largest student chapter, Iowa State, is now sporting new decals on the sides of their work trailer.  It looks great and will be seen by lots of people with their adventures.  It’s a great group.

National Green Building Standard Certifies 100,000th Home

The National Green Building Standard Green (NGBS) Certification Program has reached a major milestone with certification of the 100,000th home to meet its requirements. Located in the Peyton Stakes rental apartment community in Nashville, the home was built and developed by the Profitt Dixon partners and verified by Rachel Della Valle, an NGBS Green Master Verifier from Southern Energy Management.

Trump Budget Proposes Cuts to Energy Star Program

President Trump has released a proposed budget that includes cuts to a number of programs run by the Environmental Protection Agency – including the popular Energy Star certification program for new and remodeled homes and many home appliances.

4th Annual Doug Mayo Memorial Golf Tourney Registration Nearly Sold Out

We are within a few golfers of being sold out, so make plans to join us for the 4th Annual Doug Mayo Memorial Golf Tournament on Friday June 30th, 2017. Click here to register.  We still are in need of hole sponsors.

Squeal Award: Taxpayer Funded Portraits

Senator Ernst does a good job exposing bloated government in her Squeal Award.  This one is interesting – did you know that when a head of federal agency leaves their post, that agency typically has an oil painting portrait made in their honor? Did you also know that each of these portraits can cost taxpayers tens of thousands of dollars?  According to reports, since 2010, federal agencies have spent nearly half a million dollars on portraits that are displayed in parts of federal agency buildings that may not even be accessible to the public.
Recently, federal agencies have okayed excessive spending on portraits that cost anywhere from $19,000 to $50,000 per painting, such as:
  • The cost of the portrait for former Environmental Protection Agency Administrator Lisa Jackson came to $38,350.
  • Did you know the cost for the portraits of Department of Agriculture Secretary Tom Vilsack and Department of Commerce Secretary John Bryson (who served just 8 months) came to $22,500 a piece?
  • And, the former Air Force Secretary, Michael B. Donley’s portrait rang up at $41,200.
At a time when we are nearly $20 trillion in debt, this costly use of taxpayer dollars is absurd and is why I am a co-sponsor of the Eliminating Government-funded Oil-painting Act, or the EGO Act.  This bill would prohibit the use of taxpayers’ dollars to pay for an oil-painted portrait of an officer or employee of the federal government.
Parting gifts like these only frustrate Iowans who are the ones left footing the bill. Because of this wasteful and unnecessary giveaway, I hereby present this month’s Squeal Award to taxpayer funded oil-painted portraits of members of the federal government.

Parody of NIMBY People

This is funnier if you’re trying to develop something in the highly populated left-leaning cities, but it’s still humorous wherever we are:

Weekly Update: March 30, 2017

Iowa Mechanics Lien Vote No

Call to Action:  HF586 Mechanic’s Liens – Vote NO!

Ready to File a COW Notice as a Supplier or Self Performer?  If Not, Act Fast

With this change, all general contractors/direct contractors will have to post the commencement of work notice, notifying owners of subcontractor rights, within 10 days or otherwise their lien rights are forever lost. This makes no sense for those of you who supply direct or other contractors who self-perform with no subcontractors to file these notices.

This is on the fast track – voted unanimously yesterday by the Senate Commerce Committee to move forward.  It’s very substantive – it’s not a clean up the language sort of bill at all.  It changes everything.  We need for you to reach out and encourage them to vote no.

To find out which senators from your district that you need to reach out to, click here.  This is a new burden on you, far beyond the “it’s only five minutes online and $7” – the main argument in favor of it.  Here is more background – contact your respective senator and personalize it with any of the following information:

 

Explanation:

The Iowa House unanimously passed HF586 regarding “financial matters” on March 22 – section 4 of the bill covers mechanic’s liens.  We’re good with everything else in the bill, just none of Section 4, and would like to see Section 4 stricken in its entirety.  It reads:

Either a general contractor, or an owner-builder who has contracted or will contract with a subcontractor to provide labor or furnish material for the property , shall post a notice of commencement of work to the mechanics’ notice and lien registry internet site no later than ten days after the commencement of work on the property. A notice of commencement of work is effective only as to any labor, service, equipment, or material furnished to the property subsequent to the posting of the notice of commencement of work.

The proposed amendment contained within the bill appears to be a benign punctuation change involving a few additional commas. Presumably, this is why this bill quietly passed, 99-0, through the House File — either no one noticed this last sentence that was added in or the people who did notice the sentence believed it was a benign punctuation change to fix a typographical error.

However, the proposed amendment to Iowa Code section 572.13A, contained within the last sentence of HF586, is anything but benign.  Iowa’s updated Mechanic’s Lien Statute, effective 1/2013, was written to require only general contractors with subcontractors to file a Commencement of Work Notice on the MNLR registry, within 10 days of the start of the project, to preserve its lien rights on residential projects. This type of Commencement of Work Notice provides notice to a homeowner that subcontractors are being used on the project/property. Since the original owner notice concept was enacted within Iowa Code Chapter 572 decades ago, only general contractors with subcontractors were required to provide an owner notice. The aforementioned concept, which has been around for decades, could all change with the inclusion of two commas.

Under the statute, when a contractor self-performs all work without subcontractors, such contractor does not need to file a Commencement of Work Notice on the MNLR registry to preserve its lien rights and obviously the homeowner does not need to be notified about the use of subcontractors through the notice because there are none. Likewise, suppliers who supply directly to homeowners do not need to file a Commencement of Work Notice on the MNLR registry to preserve its lien rights. In HBA member and Davis Brown Construction Attorney Jodie McDougal’s 2015 trial in which she represented HBA member, Standard Water Control Systems (Standard Water Control Systems v. Jones), the trial court agreed that the Mechanic’s Lien statute only requires general contractors with subcontractors to file a Commencement of Work Notice (within 10 days of the start of the project) to preserve its lien rights. In 2016, the Iowa Court of Appeals confirmed the trial court decision in my Standard Water case and confirmed the above-noted principles. Thereafter, the Iowa Supreme Court opted not to hear the case when the homeowners tried to appeal for a second time, presumably because the Iowa Supreme Court agreed with the precedential Iowa Court of Appeals decision.

The bill, if passed, would require all Iowa contractors/suppliers to file this Commencement of Work Notice — a notice which notifies homeowners of subcontractors on the project — even for contractors who self-perform all work and suppliers who supply directly to the homeowner and thus have no subcontractors. That is, this notice of the use of subcontractors would be required even in situations where no subcontractors exist on a project. It makes no sense. This attempted change in the lien law is for the sole benefit of the financial-related industry (i.e., lenders, as well Iowa Title Guaranty/closing companies). There is no additional benefit to homeowners, and the benefit is purely to the lenders and title companies. Such benefit is at the expense of the hundreds of Iowa contractors who self-perform work and Iowa direct suppliers. Further, the bill is directly at odds with the intent and purpose of the Mechanic’s Lien Law set forth in Iowa Code Chapter 572 and is at odds with the decades-old principle regarding owner notice on residential projects.

Statute of Repose Applicability

Here are some notes on what the change to Iowa’s Statute of Repose mean to you – from HBAI member and Davis Brown Construction Attorney Jodie McDougal.

The new 8/10 year statute of repose law, contained within SF413, will take effect on July 1, 2017. The law has an express provision regarding applicability (which trumps the general rules regarding applicability of new laws).  First, there is no retroactive effect for the new statute of repose. Second, in terms of pending projects and general applicability, the law expressly provides as follows:

Sec. 2. APPLICABILITY. This Act does not apply to an improvement to real property in existence prior to the effective date of this Act or to an improvement to real property, whether construction has begun or not, that is the subject of a binding agreement as of the effective date of this Act.

Thus, per those express terms of the new law, if the construction project has not begun as of July 1, 2017 and if the construction agreement has not yet been entered into as of July 1, 2017, then the new, shorter statute of repose would apply to that project. Said slightly differently, the new, shorter statute of repose does not apply to (1) any construction project or other improvement to real property that is in existence prior to July 1, 2017 or (2) any construction project or other improvement to real property, whether construction has begun or not, that is the “subject of a binding agreement” as of July 1, 2017. Those projects still fall under the old, 15-year statute of repose.

Also, on certain forthcoming projects some contractors are only entering into letters of understanding and will not be signing the actual construction agreement until July 1st, as a way to have the construction project fall under the new, shorter statute of repose. This is a good course of action assuming the actual construction will not begin until July 1st. In other words, if parties start construction on a new project under only a letter of understanding and then sign the actual construction contract on July 1st, the old, 15-year statute.

Legislative Committee Report for March 24

HF 518 – Workers Comp – It passed the House 55 to 38, with 7 absent or not voting.  It now heads to the Senate as SF435 and we have registered in favor of this bill.  On HF518 and after the amendments were added it will:

  • Intoxication Defense – Puts the burden on the employee who tests positive
  • No Private Cause of Action – Makes clear that employee cannot sue employer for work-related injury outside of work comp statute
  • Date of Injury – Defines date of injury as the date that employee knew or should have known that an injury was work related
  • Suitable Work – Spells out in law as to what should be considered “suitable work”, rather than leaving to court interpretation
  • Permanent Disabilities – Changes the commencement date for permanent disability benefits to the date the employee reaches maximal medical improvement.
  • Shoulder Scheduled Member – Puts shoulder on the list of scheduled member injuries
  • Body as a Whole Injuries – Provides that when an injured employee comes back to work, the employee is compensated for functional loss and not a speculative industrial disability award.
  • Functional Impairment – Clarifies that scheduled member injuries should be compensated pursuant to functional impairment under AMA Guidelines
  • Double Recover prohibited for permanent partial disability benefits and permanent total disability benefits
  • Permanent Total Disability – providing that an employee cannot be adjudicated to be permanently and totally disabled when they remain productively working
  • Credit for Overpayment – In the event of overpayment, employer can take deduct from future benefits for the amount
  • Successive Disabilities – Provides that employers are not liable for pre-existing disabilities, and are only liable for injuries incurred under current job
  • Examination of Injured Employees – If an employee refuses to attend doctor’s appointments, then future benefits could be forfeited
  • Commutations – Changes would provide that both parties must consent to full or partial commutation of weekly indemnity benefits
  • Allowing Commutations with Open Medical
  • Jurisdiction – Restricts those who can claim Iowa benefits to those who actually work in Iowa –
  • Attorney Fees – Provides that an attorney can only take a fee on benefits they secure for injured worker

SF 438 – Project Labor Agreements passed the Senate last week and then was passed by a House subcommittee, which will allow the bill now to be heard by the House Labor Committee.  Representatives Klein (R-Keota) and Highfill (R-Johnston) supported the bill, while Rep. Kirsten Running-Marquardt (D-Cedar Rapids) opposed the bill.

The bill prohibits a public owner from entering into a government mandated project labor agreement (PLA) and it prohibits a public owner from creating any sort of ordinance or rule that would require an interested bidder, as a condition of bidding, to submit a questionnaire that would divulge proprietary and / or confidential information. (For)

Shortfall on Revenues

You’ve probably seen this in the news, but the state’s panel charged with forecasting tax revenue conducted their spring meeting and announced results that lowered Iowa’s expected revenue growth.  The Revenue Estimating Conference reduced the level of state revenue expected to be generated in the current fiscal year (FY 2017) to $7.106 billion.  This is a reduction of $106 million from the panel’s last forecast in December, when they projected General Fund revenue to be $7.2119 billion.  The percent of revenue growth when compared to FY 2016 will be 2.7 percent.  Also, because the revenue figure is below the current expenditure number for FY 2017, the state will have to find $131.1 million for the budget to balance at the end of FY 2017.  In all likelihood, the shortfall will be covered by the state’s rainy day fund to avoid further cuts into state budgets prior to the end of the current fiscal year (June 30, 2017).

For FY 2018, the committee projected that the state will collect $7.3645 billion during the upcoming year, a figure equating to 3.6 percent growth.  The March number is $191.8 million lower than the forecast developed in December 2016, which served as the basis in the development of Governor Branstad’s FY18 budget recommendation.

HF533Unemployment Benefits – Disqualification from eligibility for unemployment benefits. – Passed the House on March 20.

HF603Eminent Domain – Last week we discussed HSB184 and decided to monitor it.  It has changed to HF603 now.  HF603 relates to eminent domain and condemnation, including the authority of acquiring agencies to use eminent domain, the procedures required for the use of eminent domain, and compensation paid to certain property owners

HSB190First Time Homebuyer – We have taken a favorable position on SF425 and HSB190.

4th Annual Doug Mayo Memorial Golf Tourney Registration Nearly Sold Out

We are within a few golfers of being sold out, so make plans to join us for the 4th Annual Doug Mayo Memorial Golf Tournament on Friday June 30th, 2017. Click here to register.  We still are in need of hole sponsors.