Vol. 8, No. 5 – March 2, 2009

The U.S. Small Business Administration issued a scam alert last week to small businesses, warning them not to respond to letters falsely claiming to have been sent by the SBA asking for bank account information in order to qualify them for federal tax rebates. The fraudulent letters were sent out with what appears to be an SBA letterhead to small businesses across the country, advising recipients that they may be eligible for a tax rebate under the Economic Stimulus Act, and that SBA is assessing their eligibility for such a rebate. The letter asks the small business to provide the name of its bank and account number.

These letters have not been sent by or authorized by the SBA, and all small businesses are strongly advised not to respond to them. The scheme is similar in many ways to e-mail scams often referred to as “phishing” that seek personal data and financial account information that enables another party to access an individual’s bank accounts or to engage in identity theft.

The SBA is working with the SBA Office of Inspector General to investigate this matter. The Office of Inspector General asks that anyone who receives such a letter report it to the OIG Fraud Line at 1 (800) 767-0385, or e-mail at OIGHotline@sba.gov.

Addendum: Several Federated Association Executives from around the U.S. have cited scam attempts similar to this one, in the name of the Department of Transportation and others. It seems the Economic Stimulus Act has opened up a new way for scammers to ply their “trade.” Our thanks to all of them for sharing this timely information.

Passage of the Economic Stimulus Legislation

The National Lumber and Building Material Dealers Association President and CEO Michael O’Brien issued the following statement in response to passage of the American Recovery and Reinvestment Act by Congress on February 13:

“NLBMDA recognizes the difficult negotiations that resulted in the compromise stimulus legislation that passed both chambers of Congress on Friday. We are pleased that NLBMDA-supported tax provisions which extend bonus depreciation, Section 179 direct expensing and energy efficient tax credits, among others, were adopted in the final conference report. However, we are disappointed that Congress did not adopt the more robust $15,000 homebuyer tax credit, limited the application of the net operating loss carryback provision, and rejected an amendment to provide four percent mortgage financing under certain circumstances.

As we have stated from the beginning of the discussion on the stimulus, the nation needs an effective plan to address housing to initiate an economic recovery. Each month that goes by without one will only lead to more job losses, more businesses closing and more homes heading into foreclosure.”

NLBMDA Chairman Paul Hylbert added, “We will continue to work with Congress, the Administration, our housing industry allies and our members to achieve an effective housing recovery plan as soon as possible so that we can develop, once again, a robust and vibrant housing market as a critical element of a strong economy.”

Source: NLBMDA, February 16, 2009

Economic Recovery Law Passed – What It Does

The much-discussed and awaited American Recovery & Reinvestment Act will, according to its proponents, quickly begin putting 787.2 billion federal dollars into the American economy. Those dollars are spread in many directions – business and individual tax breaks, federal assistance programs for unemployed workers and incentives to create jobs.

The following paragraphs describe major tax breaks designed to encourage business investment and to put money in consumers’ pockets.

Business Tax Breaks

Companies with less than $15 million in gross receipts can opt for a five-year carry back period for net operating losses for a tax year beginning or ending in 2008. Most forms of businesses – including corporations, partnerships and sole proprietorships – can qualify.

Current levels of direct expensing for business equipment and machinery under Section 179 are extended through 2009. The amount that can be expensed is $250,000. The threshold at which direct expensing begins to phase out is $800,000.

The depreciation bonus for purchase of new equipment is extended for property purchased and placed into service before Jan. 1, 2010. This first-year depreciation deduction equals 50 percent of the cost of qualified property.

The work opportunity tax credit is expanded to include hiring of unemployed veterans and disadvantaged youth (ages 16-25) who have been out of work and out of school for six months.

Taxable income from the discharge of certain business debts can be deferred for up to five years; taxes would then be paid at a rate of one-fifth per year for the next five years.

The holding period for built-in gains from the conversion of a C corporation to an S corporation is reduced to seven years from 10 years.

Estimated tax payments for certain small businesses are changed to 90 percent of the previous year’s tax liability for tax years beginning in 2009. To qualify, an individual must have previous year’s adjusted gross income of less than $250,000 (individual filing) or $500,000 (joint filing) and 50 percent of that income must come from a small trade or business.

Individual Tax Provisions

The Making Work Pay tax credit is available for tax years beginning in 2009 and 2010. Maximum amount is $400 for single filers and $800 for joint filers. Withholding tax rates will be adjusted to reflect the credit.

First-time homebuyers can receive a refundable tax credit of up to $8,000 on the purchase of a home between Jan. 1, 2009, and Dec. 1, 2009.

Taxpayers can deduct state and local sales and excise taxes paid on new cars, light trucks, recreational vehicles and motorcycles purchased in 2009.

The 2009 exemption from the Alternative Minimum Tax is set at $46,700 for single filers and $70,950 for joint filers.

Federal Benefits

The lengthened period for unemployment benefits is extended through the end of 2009 and the weekly amount is increased by $25. Federal income tax on the first $2,400 of benefits is suspended during 2009.

The federal government will subsidize 65 percent of COBRA health insurance premiums for nine months for workers terminated between Sept. 1, 2008, and Dec. 31, 2009. This provision applies to employers with 20 or more employees who are subject to COBRA health benefit provisions of the Consolidated Omnibus Budget Reconciliation Act of 1986 or to those in states with similar health insurance programs with lower coverage requirements. According to the law, workers would pay 35 percent of the COBRA premium to their former employers and employers would take a credit against payroll taxes for the subsidy.

The law also appropriates new or increased funding for programs such as home weatherization grants to low- and middle-income families, energy efficiency upgrades to public housing, infrastructure projects, health care information technology, a state fiscal stabilization fund and renewable energy production.

Check with Professionals

As with all federal tax laws, this one contains complex qualifications, restrictions and requirements. If you want to take advantage of any of these tax incentives, it would be advisable to consult with tax or accounting professionals about how the details of the law would apply to your specific situation.

Source: North American Retail Hardware Association, February 16, 2009

SAVE THE DATE

March 3-4 – Blueprint Reading & Material Take-Off Seminar – Kansas City

March 16-18 - NLBMDA Legislative Conference - Washington, D.C.

April 30-May 1 – MLA Swing-into-Spring Event – Lake of the Ozarks, Mo.

June 12 – Kansas Sunflower Shootout – Salina, Kan.

Nov. 5-6 – MLA Fall Fling – Kansas City, Mo.

Call the MLA Office – 800-747-6529 – for additional information or email: mail@themla.com

LUMBER NEWS – QUICK GLIMPSES

BlueLinx Posts $25 Million Loss… BlueLinx Holdings, a leading distributor of building products, announced a $25.1 million net loss for its fourth fiscal quarter, which ended on Jan. 3, 2009. This compares with a net loss of $34.1 million for the same period a year ago. Revenues for the fourth quarter decreased 35.6 percent to $501.5 million from $778.9 million for the corresponding period last year.

The Atlanta-based company cited “the historic slump in the housing industry” for its losses, along with $3.7 million in restructuring charges associated with facility consolidations and severance-related costs.

BlueLinx operates sales centers in Atlanta and Denver, distributing products through a network of more than 70 warehouses in North America.

Source: ProDealer Digest, Home Channel News, February 18, 2009

Weyerhaeuser Posts Record Loss… Battered by continued low demand for lumber and wood panels, Weyerhaeuser reported a net loss of $1.21 billion for its fourth fiscal quarter, compared to a $63 million net loss in the same quarter of 2008. It was the worst quarter ever for the Federal Way, Wash. wood products firm.

Sales for the fourth quarter fell to $1.8 billion, down from $2.5 billion in the fourth quarter a year ago.

Source: ProDealer Digest, Home Channel News, February 18, 2009

ProSales 100 Survey Now Online; Yards Over $20M in 2008 Targeted… Survey forms for the ProSales 100, the industry’s key report on America's biggest LBM operations, are now online. If you’re a past survey participant, you should have received by now an e-mail containing a special Web address for your company to enter its 2008 information. If your company wants to take part for the first time now – particularly if your sales topped $20 million last year – please contact senior editor Andy Carlo at acarlo@hanleywood.com or at 845-337-4347.

The marketplace turmoil this past year makes the ProSales 100 even more vital as the industry's yardstick measuring the nation's premier building materials suppliers. Your participation will help assure that your industry gets the clearest possible benchmark of the state of things.

Source: ProSales Business Update, February 18, 2009

Time Magazine Names 25 to Blame for Current Financial Crisis… View and vote on the 25 to blame:

http://www.time.com/time/specials/packages/article/0,28804,1877351_1877350,00.html

MLA thanks Jon Davis for sharing this article from Time Magazine On-Line

National Green Building Standard™ (ICC 700-2008), by NAHB and the International Code Council (ICC)… A collaborative effort between the ICC and NAHB, the Standard provides the “green” practices that can be incorporated into new homes, including high-rise multifamily buildings, home remodeling and additions, hotels and motels, and the site upon which the green homes are located.

The green practices include lot design, preparation and development; resource, energy, and water efficiency; indoor environmental quality; and operation, maintenance, and building owner education. The four threshold levels, Bronze, Silver, Gold, and Emerald, provide builders with a means to achieve basic, entry-level green building, or achieve the highest level of sustainable “green” building that incorporates energy savings of 60 percent or higher. The Standard can be used by any builder for their individual projects, or be the basis for a local community or state green-building program.

**The Standard is the first residential green building rating system to have undergone the full consensus process of the American National Standards Institute.**

Reserve your copy today. Download an order form here: http://www.dealer.org/files/NGBS%20Order%20Form.pdf

Source: NLBMDA, February 20, 2009

Handy Hardware Plans to Open Facility in Mississippi… Handy Hardware announced that it will open a distribution center in Meridian, Miss. The company plans to break ground on the distribution facility by mid-2009, and the facility will employ more than 150 people. Handy Hardware announced that it will invest between $15 million and $20 million in the facility, which will serve members in the southeastern United States.

Source: North American Retail Hardware Association, February 23, 2009

American Softwood Lumber Standard Up for Review… The American Softwood Lumber Standard (PS-20-05) is up for its five-year review. NLBMDA is seeking interested members that would be willing to review the standard and provide NLBMDA with input into the association’s comments to the American Lumber Standard Committee. If you are willing to provide input, please contact Frank Moore at frank@dealer.org.

Bobcat Resumes Production… The worldwide financial slowdown hit North Dakota late last year – when hundreds of workers at Bobcat plants in two cities in the state were laid off.

But now, those employees are clocking in again, reports KXMD.

Workers at Bobcat Company plants in Bismarck and Gwinner are back at work today for the first time since mid-December.

The workers have been laid off for about eight weeks because of slow sales. The West Fargo-based construction equipment manufacturer said the shutdown was due to the poor economy.

Source: AED News, Equipment Distribution Newsletter, February 23, 2009

Springfield Mill and Lumber to Close… After more than a century, a business near downtown will soon close its doors for good. Lloyd Wright, the owner of Springfield Mill and Lumber, announced the move on Monday. There is some good news, however. A little more than half of its employees have taken jobs with another building materials supply company.

Wright says declining sales over the past two years prompted his decision. The business will close in the next couple months.

Ten of the roughly 20 employees have been hired by Southern Supply Company, which also bought a lot of the inventory. The rest of the stock – lumber, tools, hardware, windows and doors – will be sold at discounts of 50 to 70 percent.

Source: KY3 News, Springfield, Mo. February 24, 2009

Down for the Count: The Weakest Housing Markets for 2009… Former ProSales editor Boyce Thompson, now executive editor of Builder magazine, has joined with Hanley Wood Market Intelligence to find the 15 weakest housing markets in the country. These are the places that are likely to be among the last to recover from the national housing downturn. Boyce's feature follows up on last week’s report on the 15 strongest markets. All were ranked based on population trends and job growth, perennial drivers of housing demand.
See 15 Weakest Markets
Also: the 15 Healthiest Markets

Source: ProSales Business Update, February 25, 2009

How Green Is America Getting? Contribute to ProSales’ Poll and Find Out…
Green construction is the most popular topic at regional LBM meetings this winter, and the economic stimulus bill’s provisions for energy retrofitting are likely to spur interest in the subject. But how green are America’s neighborhoods today? How are LBM operations responding? A new ProSales survey seeks to answer those questions. Take the survey and help us all get a sense of whether, and how, green construction is taking root in this country. We’ll announce the results in a couple of weeks. Click here to take the survey.

Source: ProSales Business Update, February 25, 2009

Round 1 Goes to the U.S. in Latest Fight Over 2006 Softwood Lumber Deal… In the latest round of rulings regarding the 2006 softwood lumber dispute between the U.S. and Canada, the U.S. has come out on top.

An international tribunal found Canada breached the agreement by inaccurately calculating quotas during early 2007.

Source: LBM Daily, February 27, 2009

State by State List of projects from the Stimulus Package

http://www.stimuluswatch.org/project/by_state

Find projects by state or territory

· Arkansas (199 projects)

· Kansas (139 projects)

· Missouri (403 projects)

· Oklahoma (223 projects)

Get What You Pay For

Just as you look for ways to control business expenses, insurance companies may look for ways to lower claims costs by limiting or eliminating specific benefits.

An insurance company may limit benefits by restricting coverage to specified procedures or by creating coverage sub-limits. For example, a separate sub-limit may be set at $50,000 for a kidney transplant, far less than the policy’s lifetime maximum limit of $2 million. Also, it’s possible some procedures may be excluded altogether.

When choosing a health carrier, you compare policy basics – deductibles, co-insurance levels, and co-pay amounts. But, are you digging deeper into the details of the policy to make sure you will “get what you pay for”?

Comparison shopping on price alone may not get you the coverage you expect. Do the policies also include:

§ Transplant sub-limits?

§ Therapy (speech, physical, occupational, or respiratory) limits?

§ Limitations on the providers and hospitals you can use?

§ Prescription drug limitations or will the policy cover any FDA-approved prescriptions?

§ Preventive care benefits, such as cancer screenings, inoculations, and an annual physical?

§ Coverage for dependents attending a post-secondary school?

This article provided courtesy of Federated Mutual Insurance Company, your association’s recommended insurer.

MLA is proud to endorse….