| We had a great time at the HBA of Greater Des Moines “Ferris Bueller’s Day Off” last Monday – meeting at Mullet’s for breakfast and then going to a double header Iowa Cubs game. The rain held off and it was a great time with great people!
Woot Woot – NAHB Association Award Winners Announced
The winners of the 2017 Association Excellence Awards were announced this week. These recipients were selected from a pool of over 120 applicants and will serve as a valuable resource for other HBAs interested in pursuing similar programs. Among them:
- Best Publication – HBA of Greater Des Moines (Blueprint Newsletter)
- Best HBA Partnership/Coalition – HBA of Greater Des Moines (Iowa Skilled Trades)
- Best Membership Event – HBA of Greater Des Moines (Iowa Skilled Trades Event Featuring Mike Rowe)
“The Association Excellence Awards recognize the outstanding effort, commitment and achievement an executive officer and an association’s membership have made,” said Eric Person, EOC President and Chief Executive Officer of the Home Builders & Remodelers Association of Central Connecticut. “The awards showcase the innovative programs and resources that local HBAs across the country are developing for their members. In most cases, these programs are only available to members of the local HBA.”
The 2017 winning entries will be added to NAHB’s searchable directory of AEA winning entries, so that other executives and associations across the country can access and learn from them in order to provide better service to their own members and community. The winners will be awarded their respective titles at the Association Management Conference in Long Beach, CA, August 11-14. Congratulations!
Rep. Steve King Stands Alongside NAHB in the Fight to Protect Property Rights
On June 5, the National Association of Home Builders (NAHB) filed an amicus brief in the U.S. Supreme Court supporting a Pennsylvania woman in a case that could have far-reaching implications for property owners. U.S. Representatives Steve King (IA) and Kevin Cramer (ND) also filed an amicus brief in the case, joining NAHB in support of the appellant.
The case, Knick v. Scott Township, Pennsylvania, involves Rose Mary Knick, a property owner with 90 acres of rural land in eastern Pennsylvania who is challenging a local ordinance that would force her to allow public access to her property. In considering the case, the nation’s high court will have an opportunity to revisit a 1985 decision that prevents property owners from having prompt and direct access to the courts when their property is taken without compensation.
The U.S. Supreme Court agreed to review the case in March. Oral arguments will take place this fall or early next year.
June is National Safety Month – Here are Some Great Resources
June is National Safety Month, and helps to raise awareness of common safety issues in the workplace, at the jobsite and at home. And it’s the perfect time to review your company’s safety policies and procedures. National Safety Month falls right in the middle of NAHB’s yearlong Safety 365 campaign, a joint effort of the NAHB Construction Safety Committee and Builders Mutual Insurance Co. The campaign highlights a different aspect of construction workplace safety each month. It also promotes safety off the job by offering materials to help keep home owners safe when they’re working on DIY projects.
NAHB is taking this opportunity to help builders create an overall culture of safety. The new Safety & Health Program toolkit provides home builders, developers and remodelers with a guide to comply with OSHA’s new recommended practices for safety and health programs. Be sure to check out the Safety 365 page for valuable resources for NAHB members, including more than a dozen toolkits, videos and other important safety information.
HBAI Board of Directors to Meet
The HBA of Iowa Board of Directors will meet next week for the Summer Meeting. There are many topics on the agenda and we only meet three times per year, so we try to be as efficient as possible. Overall things are very positive all around, so that always helps with the discussion. We will be talking about some new workforce development initiatives, our 2019 legislative agenda, code and regulatory issues, and many other topics of concern. The Summer meeting is always the day before the Annual Doug Mayo Memorial Golf outing.
Fed Raises Target Range Yesterday
As was widely expected, the Federal Open Markets Committee (FOMC), the monetary policy making arm of the Federal Reserve, raised the target federal funds rate to a range of 1.75 percent to 2.00 percent from a range of 1.5 percent to 1.75 percent. Going forward, the median projection of the federal funds rate at the end of this year rose, but the median expectation for the number of rate hikes in 2020 was offsetting, so that, by the end of 2020, the median expectation for the federal funds rate was unchanged.
Today’s decision to raise the range of the target federal funds rate largely reflects strengthening in the labor market, both the increase in jobs and the falling unemployment rate. Household spending has picked up and business fixed investment continues to grow strongly. At the same time, the FOMC noted that inflation, both overall and core inflation, have moved close to two percent.
Despite the decision to increase the target rate today, the FOMC still believes that the stance of monetary policy remains accommodative. Labor market conditions should continue to strengthen, and inflation should return to two percent on a sustainable basis.
Although the median expectation for the federal funds rate increased in 2018 and filtered to a higher median rate in 2019, it remains the same in 2020 at a mid-point of 3.375 percent. Assuming all the hikes are 25 basis points, then FOMC projections communicate one more rate hike in 2018, but one less in 2020 so that the total number of rate hikes by the end of 2020, the longer path of the federal funds rate, remains unchanged. However, the figure above indicates that one fewer respondent expects the mid-point to be 3.375 in 2020 and an additional respondent expects it to be higher by the end of that year. While the median expectation for the federal funds rate in 2020 remains unchanged, there appears to be upward pressure on the median expectation for the federal funds rate in 2020.
Cedar Valley Habitat for Humanity, in partnership with the Greater Cedar Rapids Housing & Building Association, built three homes in five days June 4-8, 2018. This completed a two-year, six-home transformation of the 900 block of 12th Street NE in Cedar Rapids. Check out more photos and the story by clicking here.
Legislative Session Review from Jodie McDougal
Although we’ve discussed each of these initiatives in prior editions of this newsletter, Jodie McDougal – an attorney with the Davis Brown Law Firm, just released this recap of legislation relating to the construction industry. It’s a good reminder too for the major successes that we’ve had over the past two sessions with the composition of the House, Senate, and Governorship – something to keep in mind for this coming November.
Anti-Collateral Provision in Lien Law Repealed
The passage of SF2229 was a great victory for the Iowa construction industry. This bill repealed the so-called “anti-collateral” provision in Iowa’s Mechanic’s Lien Law, which had negatively impacted the construction industry by disallowing mechanic’s liens in instances where material suppliers and other companies utilized personal guarantees and other forms of collateral. This repeal is most impactful to material suppliers, from cabinet and flooring suppliers to lumberyards and larger building material suppliers, in both the residential and commercial construction industry. Construction attorney Jodie McDougal led the charge to pass this bill, by providing education to industry associations and legislators (see white paper) on this law, while the HBA of Iowa (Jay Iverson) and HBA of Greater Des Moines (Dan Knoup) provided crucial industry support and lobbying for this initiative. Further information on this law can be found here.
Multi-Prong Mechanic’s Lien and Public Projects Law
HF2233 consists of the following three amendments to Iowa Code Chapter 572 regarding mechanic’s liens on private projects and Iowa Code Chapter 573 regarding claims on public projects.
Private Projects: Easier Reduction of Lien Amounts. The new law permits the amount of a mechanic’s lien to be amended downwards without the need for court approval/leave of court and without losing priority, which is advantageous to lien claimants.
- Public Projects: New Notice Requirement for All Lower-Tiered Subcontractors. The new law requires, on public projects, a one-time written notification to the principal/general contractor from all lower-tiered subcontractors within 30 days of such subcontractor first commencing work on the project, in order for such subcontractors to later assert Chapter 573 Claims for materials and labor on such project. The prior version of the law only applied to lower-tiered material suppliers on public projects. The new law contains an exception for highway, bridge, and culvert projects as referred to in section 573.28.
- The new notice requirement law goes into effect on July 1, 2018, meaning that as of that date, all lower-tiered subcontractors on public projects must timely provide the aforementioned pre-lien/pre-claim notice to the general contractor in order to preserve their Chapter 573 claim rights. Per statute, the notice must contain the name, mailing address, and number of the lower-tiered subcontractor and the name of the applicable higher-tiered subcontractor, and must be sent within 30 days of first performing labor or materials on the project.
- Public Projects: Early Release of Retained Funds. The law incorporates into Chapter 573 certain provisions regarding a principal contractor’s ability to request an early release of retained funds.
Competitive Bidding Requirements for Certain Lease-Purchase Projects
HF2253 was signed into law over objections from most construction associations. The law makes amendments to various Chapters of the Iowa Code regarding competitive bidding requirements for certain lease-purchase construction projects. Further details can be found here.
Future Ready Iowa
The Future Ready Iowa Act was a top priority for the Governor and various industry associations this year. Among other things, the Act strengthens the development of the construction workforce in Iowa by establishing a registered apprenticeship development program, a volunteer mentoring program, a summer youth intern program, an employer innovation fund, and various scholarship and grant programs.
Manufacturing Equipment Sales Tax
HF2478 amends the sales tax imposed on certain manufacturing equipment, including certain machinery and equipment used in construction. Please let me know if you have questions about this new law, and one of our tax attorneys will be in touch to further discuss this law with you.
The first overhaul of Iowa’s state tax system in several decades was passed into law this session as SF2417. A detailed summary of the tax reform created by the Fiscal Services Division can be read here. Although the tax reform bill mainly deals with changes to individual tax rates, there are some implications for businesses. If you have questions about what Iowa or Federal tax reform means for your business, please let me know and one of our tax attorneys will assist you.
HF2304 relates to motor vehicles approaching stationary construction vehicles and providing more severe penalties. Advocates for this law believe it will make job sites safer.
Right to Repair Act Failed
The Right to Repair Act, HSB575, which exists in various forms in several other states to protect the rights of the construction industry, failed to garner the necessary support to pass this year, but this issue will likely be on the agenda for various trade groups next year.