Weekly Update: November 30, 2017

 
   The newly expanded Iowa Workforce Development Board met last week.  IWD Director Beth Townsend is shown explaining some of the future plans for the agency.  Governor Reynolds is to her right.

 

 
   As the IWD Board reorganizes, Senator Bill Dotzler (District 31, Waterloo) is shown at the left making a point that being a rubber-stamping group that meets twice per year is unacceptable.  The group was in agreement, so we will now meet quarterly and hopefully can make a difference.  HBAI Executive Officer Jay Iverson (third from left) was personally chosen and appointed by Governor Reynolds.  The time is certainly ripe to make some serious progress with our skilled trades initiatives.

HBAI Assists with Apprenticeship to Journeyman Ratio Increase

HBAI just sent a letter to the Division of Program Quality, Standards, and Policy issuing support for the Plumbing – Heating – Cooling Contractors (PHCC) of Iowa’s application request to amend their apprenticeship standards to allow a 2:1 apprentice to journeyman supervision ratio.

The message was as follows:  Our members depend upon general contractors and subcontractors, such as those that are members of the PHCC of Iowa, to meet the housing needs of Iowans. The demand for skilled labor has never been greater in Iowa and it will only continue to grow. The need to expand apprenticeships is particularly important within the plumbing, heating and cooling industry. The U.S. Bureau of Labor Statistics estimates that by 2022 that the PHC industry will need to add approximately 138,200 new workers. These numbers do not factor in the high number of current PHC professionals that will be retiring in the next five to ten years.

PHCC’s current 1:1 ratio of apprentice to journeyman limits the ability to expand apprenticeships to meet this growing demand, particularly for smaller companies seeking to grow their business. PHCC’s record of offering a high-quality program in Iowa, including its comprehensive safety training and strong completion rates, support the request to expand its supervision ratio to 2:1.

The HBA of Iowa fully supports the need to expand apprenticeship programs to meet the rapidly growing workforce demands and we ask for your approval of PHCC’s application, which will allow PHCC contractors to further the Administration’s goal of helping more Americans obtain necessary skills to meet the demand of our growing construction industry in Iowa.

November Update on Key Issues

Tax Reform

On November 16, the House passed The Tax Cuts and Jobs Act, tax reform legislation opposed by NAHB because of its detrimental effects on the housing market and middle-class families. Late that evening, the Senate Finance Committee advanced its version of tax reform legislation that NAHB believes is better for the housing sector.  A vote on the Senate’s bill is expected the week of November 27.

Like the House bill, the Senate tax plan fails to provide a meaningful incentive for homeownership for the middle class.  NAHB is working to advance a homeownership tax credit which would benefit the middle-class and create a housing incentive in the tax legislation.

The Senate tax plan does however contain positive elements for housing. It would protect important provisions to boost the production of affordable housing, including the Low-Income Housing Tax Credit and the tax-exempt bond program.

The Senate package would also provide sufficient tax reductions for small businesses to enable them to remain major drivers of job growth and maintain a level playing field with large corporations.

Flood Insurance

On November 14, the House approved legislation that would reauthorize the National Flood Insurance Program (NFIP) for five years and includes many NAHB-supported modifications to the program.

Currently, anyone who owns or is purchasing a property within the 100-year floodplain, and has a federally-backed mortgage, is required to carry flood insurance. Failure to reauthorize the NFIP before it expires on Dec. 8 will cause the delay or cancellation of home sales across the country.

The Senate has yet to move any piece of legislation related to the NFIP through committee. The House vote will put pressure on the Senate to act, and NAHB will continue to urge Congress to pass a long-term NFIP reauthorization before the Dec. 8 deadline.

Joint Employer

On November 17, the House passed the bipartisan Save Local Business Act, legislation that would amend the National Labor Relations Act and Fair Labor Standards Act to restore a common-sense joint employer standard for home building firms and other small businesses.

In 2015, the National Labor Relations Board (NLRB) overturned decades of precedence in the case of Browning-Ferris Industries of California Inc. by affirming that a company could be considered a joint employer if it has indirect control or the potential to determine the key terms of an employee’s employment, including hiring and firing, supervision, scheduling and the means and method of employment.

The NLRB left open-ended the question of what can be deemed indirect control and just how much of it could legally constitute joint employment, causing confusion and uncertainty for the housing and small business community.

This is especially problematic for the housing industry, given that most home building companies employ fewer than 10 workers and rely on an average of 22 subcontractors to complete a home.

The Save Local Business Act offers a common-sense solution to the uncertainty generated since the NLRB ruling by proclaiming that a company may be considered a joint employer of a worker only if it “directly, actually, and immediately” exercises significant control over the primary elements of employment.

Softwood Lumber

In November, the Commerce Department made a final decision to impose countervailing and anti-dumping duties on Canadian Lumber Imports.  The Department moved to impose duties averaging 20.83% on Canadian lumber shipments into the U.S.  This move was particularly disappointing given that NAHB had recently met with Commerce Secretary Wilbur Ross to express our concerns on this issue.

Lumber is a major component in new home construction and one-third of the lumber used in the U.S. last year was imported. The bulk of the imported lumber – more than 95% – came from Canada. Canada and the U.S. need to work cooperatively to achieve a long-term, stable solution in lumber trade that provides for a consistent and fairly priced supply of lumber. On the domestic front, policymakers need to take steps that will help U.S. lumber firms meet domestic demand. Those efforts must include better and more active management of our federally owned forests to promote healthier forests which face imminent danger posed by insects, disease and catastrophic wildfire damage.

Association Health Plans

Virtually all associations have long dreamt of and worked hard on association health plans, which would empower small businesses to pool together to purchase health insurance plans for their employees.

President Trump has signed an executive order that would ease restrictions on association health plans and while we are very excited by Trump’s actions in signing the executive order, there are still a lot of unanswered questions moving forward.

Though the general intent is clear, the executive order itself does not change existing law. Rather, it directs federal agencies to determine the extent of the regulatory actions they can pursue to meet the President’s health care directives.

Those actions are likely limited compared to legislative steps like NAHB-supported bills passed by the House and pending in the Senate that could make more substantive and permanent changes to the law to expand the ability of businesses to form association health plans.

The executive order directs the Department of Labor to consider proposing regulations or guidance on association health plans within 60 days. As a result, it will be weeks if not months before we see a proposal take shape. NAHB will have a better idea of how plans would need to be structured and how state insurance regulators will respond once that becomes available.

Overtime

A federal judge struck down the Obama administration’s overtime rule that would have doubled the salary threshold for workers to be able to receive overtime pay. The Justice Department subsequently announced it would not appeal the ruling, effectively ending the Obama-era expansion of the overtime rule.

OSHA Injury Report Deadline Now December 15

The Occupational Safety and Health Administration (OSHA) has extended the date by which employers must electronically report injury and illness data through the Injury Tracking Application (ITA) to Dec. 15, 2017.

This further extension follows a decision by OSHA to extend the final rule’s original reporting date from July 1 to Dec. 1, 2017.

The rule requires certain employers to electronically submit injury and illness information they are already required to keep under existing OSHA regulations.

Specifically, businesses with 20-249 employees in certain high-risk industries, which includes the entire construction industry, as well as those with 250 or more employees in industries covered by the recordkeeping regulation must submit information from their 2016 Form 300A – Summary of Work-Related Injuries and Illnesses by the new deadline.

In January, NAHB, along with the U.S. Chamber of Commerce, Oklahoma State HBA, State Chamber of Oklahoma and three poultry associations filed a lawsuit challenging the legal authority of OSHA to issue the electronic reporting rule.

NAHB has argued from the start that such a requirement is onerous on businesses and employers while serving no clear benefit.

Fannie Mae and Freddie Mac Loan Limits Rise in 2018

The Federal Housing Finance Agency (FHFA) announced that the maximum baseline conforming loan limit for mortgage loans acquired by Fannie Mae and Freddie Mac in 2018 will increase to $453,100 from $424,100.

The loan limit will rise 6.8% in 2018 because FHFA has determined that the average U.S. home value increased 6.8% between the third quarters of 2016 and 2017.

Higher loan limits will be in effect in higher-cost areas as well. In areas where 115% of the local median home value exceeds the baseline loan limit, the maximum area loan limit will be higher. The new ceiling loan limit in high-cost markets will be $679,650, or 150% of the $453,100 for single-family properties. The previous ceiling was $636,150.

Special statutory provisions establish different loan limit calculations for Alaska, Hawaii, Guam and the U.S. Virgin Islands. In these areas, the baseline loan limit will be $679,650 for single-family properties, but actual loan limits may be higher in some specific locations. A list of the 2018 maximum conforming loan limits for all counties and county-equivalent areas in the country may be found here.

 
   This is the season for local HBA’s annual meetings – four of them in the past two weeks!  Here was a great Cedar Rapids group listening to building trades students talk about progress on two tiny houses.  The CR Housing and Building Association had a long list of accomplishments for this year.

 

 
   The Sioux City annual meeting was mostly a tribute to retiring Executive Officer Nancy Moos, having served the organization for the past 32 years.  Not a great photo, but NAHB Area 10 National Chairman Keith Butz (Des Moines) is shown presenting a plaque in her honor.  The gold star goes to HBAI President Tim Ruth, Legislative Chairman Glenn Siders, and Iowa City Executive Officer Karyl Bohnsack who all drove back to the Iowa City area after the 11:00 p.m. conclusion of the event.  It was a 4 a.m. arrival back home – that’s your leadership team hard at work!