Weekly Update: February 8, 2018

All eyes were on HBAI President Scott Webster last Tuesday as he discussed SSB3138, which is a proposal put forward to guide the adoption of the energy code. It was a very interesting meeting and the future of the bill is unknown at this time. There was an excellent home rule discussion.

Legislative Update February 2

Budgets will not be delivered officially until March reports, but you might check out SF2117, which are the proposed budget cuts on the Senate side.

We asked you to contact your senators and representatives regarding SSB3064 and HSB575. These are companion bills that allow for the opportunity to repair construction defects prior to litigation. It was a top priority, but now may be on the path to pushing it to next year. More info will follow after we make it past next week’s funnel. Here are a few other bills of interest:

SSB3065 – Partition of Property -The bill contains general provisions applicable to all property partitions. The current procedures related to an action for partition, partition pending probate or administration of an estate, a petition for partition and the parties to such, the answer to a partition petition, and the prohibition of a counterclaim or joinder of claims to a partition petition are not changed by the bill. The bill requires that personal property subject to a lien be partitioned by sale. Partition of real and personal property owned by the same person may be partitioned in the same partition action. HBAI Undecided.

SSB3087 & HSB602 – Workforce Development/Apprenticeship – This bill relates to workforce development by establishing a volunteer mentoring program, a registered apprenticeship development program, an employer innovation fund, a summer youth intern program, and future ready Iowa skilled workforce scholarship and grant programs and funds, and providing for shared postsecondary summer classes for high school students that are aligned with career pathways. The bill also makes conforming changes. HBAI in Support.

SSB3097 – Abandoned Structures – Read it, it’s sort of long, but The bill defines abandoned structures, requires a property to remain vacant for 135 days before a person may request the responsible building official to inspect a building to determine whether it is abandoned, and adds a section on the term “responsible building official.”. HBAI Undecided.

SSB3100 – Mechanics Lien Anti-Collateral – The bill removes the bar to obtaining a mechanic’s lien if a person takes collateral security, either at the time of making a contract or during progress of the work, on a contract for furnishing material or performing labor. HBAI in Support.

SSB3138 – Energy Conservation Requirements – This bill relates to energy conservation requirements contained within the state building code or adopted by governmental subdivisions. HBAI in Support.

HSB596 – Time of Sale Requirements for Real Property – This bill prohibits cities and counties from restricting a person’s ability to refinance, sell, or transfer title to property. Under the bill, a city or county cannot, by ordinance, motion, resolution, amendment, or other means, restrict the ability of an owner to refinance, sell, or otherwise transfer title to property by requiring an owner to take or show compliance with any action with respect to a property or pay any fee before, at the time of, or within a certain period of time after refinancing, selling, or transferring title to the property. HBAI in Support.

The Iowa Building Code Advisory Council met Tuesday to discuss the state energy code. It’s been a long struggle, but we’re looking out for housing affordability and the opportunity to make amendments that make the most business sense. There will be much more to talk about in the coming months.

2017 Federation Membership Saved $7,500 Per Housing Start

NAHB economists have put a dollar value on selected member benefits and advocacy victories achieved in 2017. Add it up, and you get an average of $7,500 per housing start for a typical builder. That figure demonstrates just how much value NAHB delivers for members: the value per housing start a typical builder will see in 2018 as a result of key NAHB advocacy victories in 2017. Some members will experience more of these benefits than others. Here are some of the advocacy victories that contributed to that number.

  1. OSHA Suspends Enforcement of Onerous Beryllium Rule. Estimated value: $2.03 billion ($1,600 per housing start). On Jan. 9, 2017, OSHA published its final rule on Occupational Exposure to Beryllium. Even though the proposed rule did not apply to the construction industry, the final rule did. NAHB filed a lawsuit challenging OSHA’s authority to issue such a rule under these circumstances. In response, OSHA announced that it would stop enforcing the rule in the construction industry.
  2. Preservation of Lower Cost Options in Building Codes. Estimated Value: $1.26 billion ($1,000 per housing start). NAHB was successful in keeping a number of costly provisions out of the 2015 versions of the International Residential Code and International Energy Conservation Code. Defeated proposals include: Fenestration-U-Factor in Climate Zones 5, 6, 7 and 8 increased to triple pane levels; a high-efficiency water heating equipment requirement; and requirements for new homes to facilitate future solar energy system installations.
  3. Tax Reform: Reductions in Builder Taxes. Estimated value: $1.51 billion ($1,200 per housing start). NAHB was involved from start to finish in the legislative debate over tax reform. On the business side, NAHB worked to reduce taxes on business, including reductions for pass-thru entities, which resulted in lower tax rates and a special pass-thru deduction intended to benefit small business.
  4. Tax Reform: Private Activity Bonds. Estimated value: $991 million ($800 per housing start). House-passed tax reform legislation followed early tax reform plans by eliminating the tax-exempt status of private activity bonds (PABs). NAHB worked hard to demonstrate the importance of PABs to the housing market, especially the Low-Income Housing Tax Credit, and the final bill preserved PABs.
  5. Tax Reform: Protection of Builder Interest Deduction. Estimated value: $884 million ($700 per housing start). The 2016 Better Way Tax Reform blueprint (published by the Ways and Means Committee as an initial draft of tax reform) proposed to eliminate any business deduction on interest paid on business loans, including acquisition, development and construction loans. Because of NAHB’s advocacy efforts, the final tax reform legislation includes a special exemption for real estate businesses from the interest deduction limits imposed on the rest of the economy.
  6. Elimination of Seriously Flawed Duct Proposal. Estimated value: $867.4 million ($700 per housing start). NAHB, along with HBA leaders in California and Nevada, strongly opposed a proposed change to the 2018 edition of the Uniform Mechanical Code (UMC) that would have limited the length of flex duct to five feet in residential applications. Recently, the International Association of Plumbing and Mechanical Officials announced that it has decided not to approve this change.

Rural Ruin

Since 1/1/10, total employment growth has been 14% in the 53 metro areas with a population exceeding one million. In metro areas between 250,000 and one million, employment growth has been 9%, and in smaller metro areas, it’s been just 4.5%. Worse, in non-metro areas, employment growth has totaled 2%! The 53 largest metro areas have generated 93.3% of all new jobs despite accounting for just 56% of the population. Elliot F. Eisenberg, Ph.D

SkillsUSA Partnership

SkillsUSA will be working with Iowa Skilled Trades to expand opportunities for all SkillsUSA students. The Iowa Skilled Trades group works with companies from all over the state who specialize in skilled trades including construction companies, cabinetry, plumbing, HVACR, and many other areas that we cover in their competitive events.

They are promoting the HBAI Educational Corporation scholarships for students pursuing a career in the home building industry and related trades. The deadline is March 31 and the scholarship details are available by clicking here.

Weekly Update: February 2, 2018

Would You Like to Remedy Defects First or Be Sued Right Away?
We need you to reach out ASAP to your respective legislators on both the House and Senate side, asking for their support for the Opportunity to Repair Construction Defects bills.  This is a common sense, good business practice effort.  Basically, it just says that the property owner needs to provide the opportunity for the builder/subs to repair issues prior to litigation.
Approximately 30 states have already passed similar language, attempting to be proactive on horrible class action lawsuits that have taken place in other states.  Florida and Colorado are the most egregious.  Attorneys in Florida are raking in millions of dollars in stucco related suits.  Colorado started it with some nasty condo/townhome suits.
There is a growing list of groups against it, including the Bar Association and the Iowa Attorney General – that’s where we need you to step up to the plate as soon as possible.
Reach out to your folks and let them know that this protects the consumer – they will have to disclose defects when they sell the property and it’s best that issues are dealt with as soon as possible.  Some of these lawsuits have been putting less than 60% back into the homeowner’s pockets and they still have to pay to have the mitigation.  It just makes good business sense.  If you do not know who represents you, find them by clicking here.
SSB3064 – Opportunity to Repair Construction Defects
Senate Judiciary Committee Members
HSB575 – Opportunity to Repair Construction Defects –
House Judiciary Committee Members
   The subcommittee meeting on HSB575 was interesting this week – that’s why we need you to reach out to any of the Judiciary Committee members that are in your area.  See the list above for both companion bills – reference HSB575 to your representatives and SSB3064 to your senators.
Legislative Update January 26
The session is rolling full steam ahead, there is so much going on.  The budget is the next big hurdle on the big punch list.  Here are a few more of the bills that we are following, as of January 26.
HSB 542 – Statute of Limitations for Rent Judgements (Baltimore) – This bill eliminates the five-year statute of limitation period that a person has to collect rent pursuant to a judgment in an action on a claim for rent, but retains the two-year statute of limitation period applicable when a person sells or assigns for value a judgment or right to collect rent to a third party other than a state or federally chartered bank or credit union.
HBAI Supports
HSB 513 – Public Bidding by Board of Regents (Highfill) – This bill modifies the contract bidding process conducted by the state board of regents. Currently, when the estimated cost of construction, repairs, or improvement of buildings or grounds under charge of the state board of regents exceeds $100,000, the board of regents must advertise for bids for the contemplated work and shall let the work to the lowest responsible bidder. However, if in the judgment of the state board of regents bids received are not acceptable, the state board of regents may reject all bids and proceed with the work by a method as the state board of regents may determine.
HBAI Undecided
HSB 568 – Competitive Bidding Requirements for Certain Government Entities (Highfill) – The bill makes a contract for construction by a private party of a property to be leased or lease-purchased by the state of Iowa, a community college, or a public school corporation a contract for public improvement under Code section 26.2. The state of Iowa, a community college, or a public school corporation must therefore take competitive bids for renovations, repairs, or new construction on a property to be leased or lease-purchased that exceeds the competitive bid threshold set in Code section 26.3.
HBAI Supports
HF 648 – Career and Technical Education Programs (Appropriations) – The bill authorizes an approved regional career and technical education planning partnership to receive state funds for purposes allowed under Code section 258.14(6). The bill amends Code section 258.14(6) to authorize a partnership to purchase career and technical education equipment and standard classroom consumable supplies other than consumable supplies that will be made into products to be sold or used personally by students, teachers, and other persons. Federal funds received as a reimbursement for allowable expenditures shall be received pursuant to the multiyear state plan the state board for career and technical education approves under Code section 258.3A(1).
HBAI Supports
HF 2098 – Job Training Tax Credit Program (Jacoby) – This bill creates a job training tax credit program (program) administered by the economic development authority (EDA) in consultation with the department of revenue (DOR) to provide tax credits to businesses that employ for pay qualified trainees in Iowa during the tax year. To qualify as a “qualified trainee” under the program, a person must be an apprentice or an intern, must be employed by a business in Iowa, and must satisfy the relevant minimum training standard.
HBAI Supports
SSB 3039 – Mechanics Lien Language Correction (Zaun) – The bill provides that a lien statement may only be amended by leave of court in furtherance of justice or to decrease the amount demanded. An amendment to decrease the amount demanded must be accomplished through the mechanics’ notice and lien registry. The bill provides that amending a lien statement to decrease the amount demanded does not affect the priority of the lien statement. The bill also provides that a lien statement shall not be amended to increase the amount demanded.
The bill repeals Code section 26.13 (public construction bidding — early release of retained funds), creates new Code section 573.28 with the same language except for corrected internal references, and provides that the Code section no longer applies to all competitive bidding done pursuant to Code section 26.3 or 314.1.
HBAI Supports
SSB 3063 – Rule Adoption W/O Explicit Statutory or Judicial Authorization (Zaun) – The bill provides that in an action contesting a rule, standard, requirement, or threshold, the burden of proof shall be on the agency to demonstrate that the rule, standard, requirement, or threshold is explicitly required or explicitly permitted by a state statute or federal statute or regulation or is necessary to address the requirements of a court ruling specifically relating to the subject of the rule, standard, requirement, or threshold.
HBAI Supports
SSB 3064 and HSB575 – Notice to Repair Construction Defects (Zaun) – The bill proposes a new Code chapter which provides a mandatory dispute resolution process for construction defects to new property or improvements to an existing property.
HBAI Supports
SSB 3066 – Common Interest Communities (Zaun) – 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.
The bill establishes requirements and procedures for common interest communities, unit owners associations, and executive boards.
HBIA Undecided
SF 2053 – Real Estate Disclosure Statement for Topsoil Removal (Chelgren) – This bill requires that the disclosure statement indicate whether topsoil, as defined in the bill, has been removed from the property in the last 20 years. The bill exempts disclosure statements prepared for the transfer of agricultural land from the requirement.
HBIA Against
SF 2070 – Home Modification Grant (Zaun) – The bill makes a one-time appropriation of $600,000 from the general fund for FY 2019 to the Iowa finance authority to provide grants and to administer the program. (Ramps, lifts, elevators, handrails, etc.)
Under the bill, a qualified person is a person who is at least 65 years of age, is living with a disability, or has a chronic condition the progression of which will require a permanent modification to the qualified person’s residence.
HBAI Undecided
SF 2071 – Property Owners Exemption from Electrical and Plumbing Licensure (Zaun) – The bill replaces “principal residence” with “real property” for both exemptions, allowing a real property owner to perform such work on the owner’s real property, if the property meets specified circumstances, without having to obtain licensure under Code chapter 103 or 105. The bill also removes the requirement for a residence to qualify for the homestead tax exemption to have either exemption be applicable to a real property owner.
HBAI Undecided
Proposed Rule Would Enable Small Business Health Plans
The Department of Labor recently issued a proposed rule intended to expand access to health coverage by allowing more employers to form Small Business Health Plans, also known as Association Health Plans. These plans give small businesses access to better and more affordable health care options.
Safety Awareness Campaign
To support building industry professionals in obtaining the information and resources they need to help keep residential construction workers safe, NAHB has created a new member and public awareness campaign called Safety 365. The campaign is a joint effort of the NAHB Construction Safety Committee and Builders Mutual Insurance Co.
Economic Panel Predicts Housing Gains in 2018
The newly enacted tax law will create a more favorable tax climate for the business community, which should spur job and economic growth and keep single-family housing production on a gradual upward trajectory in 2018, according to economists participating in a panel discussion during the International Builders’ Show in Orlando.
Amazon Business & Capital One Member Advantage Programs
At the 2018 International Builders’ Show, NAHB launched two new Member Advantage programs: Amazon Business and Capital One Spark Business. These new programs are a part of NAHB’s Revenue Share Program where your State and Local Associations can earn non-dues revenue from your members’ usage of these programs. To learn more about these programs and to sign up for revenue share, make sure to visit nahb.org/matoolkit and click on the Sign up Now link.