Vol. 7, No. 8 – April 14, 2008

 

RESTRICTIONS ON SALE OF

SPRAY PAINT?

 

A member-dealer called last week to inquire about possible restrictions on the sale of spray paint and/or paint thinners to minors in Missouri. Given the fact that Wal-Mart has such restrictions in place, we thought we might have missed the enacting of a local or statewide ban. Turning the matter over to legal counsel, we received the following article. As a practical matter, if your community is experiencing an unusually high incidence of graffiti, you might want to restrict sales to minors. If you have additional questions, please let us know at mail@themla.com.

 

Spray Paint/Graffiti Control

 

Spray or aerosol paints are paints formulated for spraying from a hand-held pressurized can for the finishing and touch-up of cars, machinery, metal furniture, appliances, and other unlimited items. Approximately 80 percent of aerosol paints are sold to consumers for “do-it-yourself” paint jobs with the remainder sold for industrial or construction applications. Additional applications include construction-related markings, parking lots, and athletic fields, as well as arts and crafts.

 

The variety of surfaces to which spray paint can be applied and its diversity of users points to its singular ability to accomplish a professional finish unachievable with brush paints. Its unique capacity to cover hard-to-reach or irregular surfaces, coupled with its convenient portability, and long shelf life, make it a user-friendly and irreplaceable product. In addition to its engineering for both discreet and large areas, spray paint is also environmentally favorable in that it is storable until completely used, and aerosol cans are completely recyclable when emptied. However, the specialized nature of spray paint makes it the subject of troubling questions that may have adverse consequences for the product design and commercial value of this corner of the paint and coatings industry.

 

Such focus revolves around the problems of graffiti vandalism, changing chemical technology to meet more stringent environmental standards and the recent incidences of inhalant abuse.

 

Graffiti Vandalism

 

In recent years, a number of American communities have become targets of graffiti vandalism, much of it carried out with aerosol paint. For the industry, this criminal misuse of legitimate products is a disturbing problem and the focus of a substantial effort to support and strengthen local anti-graffiti initiatives across the country.

 

For example, when the city of Philadelphia committed to a massive campaign to clean up graffiti and prosecute vandals, the industry was involved from the beginning. Through the National Council to Prevent Delinquency’s Anti-Graffiti Project, the industry provided resources for developing school curriculum materials; retailer loss prevention training support; paint and supplies for neighborhood, school and playground cleanups; and staffing grants for mobile graffiti abatement units.

 

As states and municipalities cope with the cost and irritation of cleaning up after graffiti vandals, they often seek new powers to help them solve the problem. In some cases, such legislative initiatives take the form of “supply side” controls, the most common of which is restricting the display and sale of spray paint.

 

Banning the Sale of Spray Paint

 

Obviously, the exercise of government power most threatening to the paint industry is a product ban law, such as that enacted in Chicago in early 1992. Once in force, the law banned spray paint sales to private citizens, permitting sales only to government agencies, public utilities, schools, contractors and other businesses.

 

An analysis of Chicago graffiti one-year after the ban showed a modest reduction in spray paint graffiti, with an offsetting increase in glass etching and marker graffiti. Although contemplated or introduced in a number of cities, there are no other ban laws in the United States. However, there are a number of supply-side controls in place ranging from bans on sale of spray paint to minors, to retail registration of spray paint purchasers, to spray paint “lockup” laws.

 

“Lockup” Ordinances

 

While “lockup” ordinances have never been shown to reduce graffiti vandalism, they have made substantial inroads into legitimate sales of spray paint and related items, sometimes reducing them by more than one-third. Under “lockup,” retailers are required to keep spray paint displays in locked cases or cages or otherwise inaccessible to customers without employee assistance. By taking the product off open shelves and requiring floor personnel to assist in the selection, these laws add time and inconvenience to the consumer purchase decision, thus dramatically cutting sales.

 

The principal flaw in applying supply-side controls to the graffiti problem is that they attempt to change a criminal behavior by regulating a legitimate product. Also, because graffiti vandals have alternative sources of paint and are quite willing to use alternative tools such as markers, paint sticks and etching tools, supply-side controls simply cannot control supply.

 

The National Council to Prevent Delinquency and Responsible Retailing™

 

In an effort to successfully address the criminal mishandling of spray paints and emerging legislation that unfairly punishes the spray paint market, the National Council to Prevent Delinquency (NCPD) was established in 1994. The council, launched by the paint industry and funded by members of the National Paint & Coatings Association's Spray Paint Manufacturing Committee, seeks effective and workable public policies to tackle the unlawful misuse of spray paint. As such, NCPD acts as an advocate in the interest of combating graffiti and an industry representative against potentially damaging legislation.

 

To that end, NPCA and NCPD, with industry support, enacted and implements the Responsible Retailing™ program in localities that have experienced significant graffiti vandalism. This program consists of identifying all spray paint retailers, preparing guides explaining the legal restrictions and practical theft prevention considerations for the sale and display of spray paint in plain view, producing in-store signage and offering theft prevention training education for retail sales staff.

Learn more at www.anti-graffiti.org.

 

Note: Under a bill to be considered by the OK Senate, minors under 18 wouldn't be allowed to buy certain kinds of cough syrup or spray paint, because kids are getting "high" with them and thereby putting themselves in danger.

 

  

Dealers Call on Congress to Support Housing and Innocent Sellers

 

The Legislative Conference 2008 could not have been better timed, as dealers had the opportunity to meet with their legislators while housing legislation was being debated on the Senate floor. Dealers’ effective lobbying visits also successfully garnered verbal commitments of support for the Innocent Sellers Fairness Act (H.R. 989) from at least a dozen Representatives, and made inroads in building support for a Senate companion.

 

See the attached Legislative Conference summary http://www.dealer.org/docs/LegConWrapUp.pdf for details and photos of the successful lobbying visits and other highlights of the Conference.

 

The Senate on April 10 passed housing stimulus legislation by a vote of 84-12, following two weeks of intense debate over the best way to prevent foreclosures and assist struggling homeowners as well as the housing industry. The plan was met with unexpected opposition from the White House, with concerns that certain provisions could actually spur further foreclosures and do more to benefit lenders than borrowers. The House is moving forward with a separate set of reforms and tax credits, and much work remains to be done to develop a comprehensive package that will win both Chambers’ and the Administration’s support. NLBMDA and our industry allies continue to advocate for language that reforms the Federal Housing Administration (FHA) and mortgage entities (Fannie Mae/Freddie Mac) and that includes new homebuyer tax credits to spur purchases.

 

NLBMDA also supports a net operating loss carry back extension from two years to four that was included in the Senate bill; unfortunately, that provision is opposed by House leadership.

 

Highlights of the proposed bills:

 

• Both House and Senate versions would modernize the Federal Housing Administration (FHA) and allow borrowers to refinance into FHA-backed loans.

• Both versions would expand tax-exempt mortgage revenue bonds.

• The Senate bill provides incentives and community development block grants for the purchase of foreclosed properties, and provides $150 million in funding for credit counseling for at-risk borrowers.

• The Senate included an extension of expiring tax credits for renewable energy and energy efficiency.

• House Ways & Means bill includes a $7,500 tax credit for first-time homebuyers, to be repaid over 15 years, and incentives for development of low-income housing.

 

A provision to allow judges to alter the terms of mortgages in bankruptcy proceedings, opposed by lenders and the building industry, was offered in an amendment by Sen. Chris Dodd (D-CT) and voted down by a vote of 58-36 (60 votes were required to amend the bill).

 

ACTION NEEDED: Visit www.BuildtheVote.org to urge your legislators to move forward quickly to support housing and the industries that depend upon a strong housing market.

 

Source: NLBMDA Advocate, April 11, 2008

 

 

2008 COST OF DOING BUSINESS SURVEY

 

You run a profitable business, but there is room to grow. See firsthand how you stack up against your competition and learn how to grow your business by participating in the NLBMDA Cost of Doing Business Survey.

 

The Cost of Doing Business Survey will provide you with forecasted financial statements and cash flow analysis for key profit variables such as projected sales change, gross margin, inventory turns, salary and other expense changes based on last year’s performance. Participate in the survey and receive your individualized report and industry analysis for only $150.

 

To complete the survey, please contact Jim Enter at jim@aaroundtables.com to receive a password and security code to complete the survey. Survey Deadline: May 2, 2008.

 

 

Legislation Co-Sponsors Needed To Help Retailers On Printed Receipt Rules

 

Representative Baron Hill (D-IN) has asked PMAA* to help secure cosponsors for H.R. 4008, the Credit and Debit Card Receipt Clarification Act of 2007. The bill would offer retailers increased protection from fines and litigation relating to printed credit card receipts issued during the regulatory transition period.

New Federal Trade Commission (FTC) credit/debit card receipt restrictions took effect December 1, 2006. Now merchants must display no more than the last five digits of a credit card number and must omit the card expiration date on all electronically processed receipts given to customers. The law does not apply to handwritten or imprinted receipts or copies of receipts retained by companies for their records. The receipt restrictions are designed to limit available financial information to prevent identity theft.

Specifically, H.R. 4008 amends the Fair Credit Reporting Act (FCRA) to declare that any person who printed an expiration date on a receipt provided to a consumer cardholder at a point of sale (POS) or transaction between December 4, 2004 and enactment of the Act, but otherwise complied with FCRA requirements for such receipt, shall not be in willful noncompliance of the rule. Representative Tim Mahoney (D-FL) originally sponsored the bill, which now has Representative Baron Hill (D-IN) and 45 additional cosponsors

According to the bill sponsors, Congress enacted as part of FCRA, a requirement that no person who accepts credit or debit cards for business transaction shall print more than the last five digits of the card number or the expiration date upon any receipt provided to the card holder at the POS or transaction. Many merchants understood that this requirement would be satisfied by truncating the account number down to the last five digits. After the compliance deadline passed, hundreds of lawsuits were filed alleging that the failure to remove the expiration date was a willful violation of the FCRA even where the account number was properly truncated. None of the lawsuits contained an allegation of harm to any consumer's identity. Experts in the field agree that proper truncation of the card number by itself, regardless of the inclusion of the expiration date, prevents a potential fraudster from perpetrating identity theft or credit card fraud. Despite repeatedly being denied class certification, the continued appealing and filing of these lawsuits represents a burden on hundreds of retailers.

Please encourage your Representatives to cosponsor H.R. 4008 today! You may reach your Representatives by calling the switchboard at 202-225-3121.

 

See http://www.ftc.gov/bcp/edu/pubs/business/alerts/alt007.pdf for more information.

 

*Petroleum Marketers Association of America

 

Source: Thanks to Northwestern Lumber Association for sharing this timely update.

 

 

 

 

SAVE THE DATE

 

May 1-2 - Missouri Swing-into-Spring Event

June 13 - Kansas Sunflower Shootout

August 21-22 – Plumbing and Electrical Seminars – St. Louis

August 25-26 – Plumbing and Electrical Seminars – Wichita

October 1-4 – NLBMDA Industry Summit – Chantilly, Va.

Nov. 6-7 – MLA Fall Fling

 

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

 

 

 

  

LUMBER NEWS – QUICK GLIMPSES

 

Postal Rates Go Up… On May 12, the U.S. Postal Service (USPS) will adjust prices for mailing services — First-Class Mail, Standard Mail, Periodicals, Package Services, and Special Services. The average increase by class of mail is at or below the rate of inflation as measured by the Consumer Price Index.

A First-Class Mail stamp will be 42¢. Customers can continue to use the Forever Stamps that they purchased prior to May 12 at 41¢, even after the price change. USPS will have 5 billion Forever Stamps in stock to meet increased demand before the price change.

 

Forever Stamps are widely available through Post Offices, Contract Postal Units, consignment locations, Automated Postage Centers, vending, and at The Postal Store®. USPS also will have a 62¢ stamp available shortly after May 12 for 1-ounce nonmachinable First-Class Mail letters, such as square greeting cards. Read more at: http://www.usps.com/prices/welcome.htm

 

Missouri Treated Wood Changes… Regulation/Agency:  2 CSR 70-40.015, 017, 025, 040/Department of Agriculture – Status:  Makes a number of changes to the Missouri Treated Wood Law, which includes the requirement that all treated hardwood products possess an end tag; establishes a minimum treating standard for hardwoods treated with copper azole; all wood preservatives must be registered with the EPA as well as sampling requirements for regulatory samples. Comments on the proposal must be submitted to Jimmy Williams at the Missouri Department of Agriculture, P.O. Box 630, Jefferson City, Mo 65102 by April 17, 2008. http://www.sos.mo.gov/adrules/moreg/current/2008/v33n6/v33n6a.pdf.  Scroll down to page 627.

 

Source: Jeff Miller, Treated Wood Council, State Regulatory Report, March 2008

 

Oklahoma Treated Wood Changes… Regulation/Agency:  OAC 35:30-17-73/Oklahoma Dept of Agriculture, Food, Forestry – Status:  The proposed rule modifies the requirements for pretreatment of structures by requiring notice to the Department of all pretreatments and setting standards for borate treatment.  To obtain a copy of the proposed rules or to submit comments contact Teena Gunter, Oklahoma Department of Agriculture, Food and Forestry at P.O. Box 528804, Oklahoma City, Oklahoma 73152-8804 or by telephone at (405) 522-4576.

 

Source: Jeff Miller, Treated Wood Council, State Regulatory Report, March 2008

 

Weyerhaeuser Announces Another Mill Closure… On Wednesday, timber giant Weyerhaeuser released the bad news that, as of July, its Hudson Bay, Saskatchewan mill will be shut down indefinitely. 170 workers are employed at the oriented strand board mill. “The continued challenges in the North American housing market require us to bring supply into balance with demand,” said Phil Dennett, Weyerhaeuser’s Vice President, Strand Technologies.

 

Source: LBM Daily, April 3, 2008

 

Oklahoma Immigration Legislation… Last year the business, agriculture, faith-based and education communities were asleep at the wheel when immigration reform (House Bill 1804) was passed and signed into law. Many believe that the bill had no enforcement dollars in it and all it did was mirror current federal law. Today, the agriculture community as well as the business community, many times the same people, along with those in the faith-based community to include the Southern Baptist Convention, Methodist church, and numerous other denominations, have realized that House Bill 1804 had unintended consequences: Thousands of Hispanics, both legal and illegal, have moved out of Oklahoma into other states. This movement of both legal immigrants, as well as illegal immigrants, has caused a tremendous work shortage in the construction, restaurant, landscaping and, possibly the hardest hit, agriculture businesses. They have guarantees from the legislative leadership that there will be no further immigration reform or burdens placed on businesses this legislative session. But on July 1, 2008, the penalties on businesses that knowingly or unknowingly have illegal immigrants on their payrolls will take effect. For the past year, the provisions of House Bill 1804 were really only applying to the public sector or state employees, schools and hospitals – those entities that took tax dollars. But, as previously stated, on July 1, 2008, the criminal penalties will also be placed on businesses. I know prior to that date if we have not been able to eliminate that provision of the bill or to move the date forward one year, while further study is implemented, the Association will be notifying members about the provisions of the original bill.  For the record, the Association is not supporting illegal immigration or the drain on your tax dollars for services to illegal aliens.  The Association is in favor of more reasonable approaches to this federal problem. (Editor’s note: Immigration legislation is now being considered in Kansas and Missouri – both are being closely monitored.)

 

Source: Pat Hall, Oklahoma Legislative Director, April 4, 2008

 

APA Warning… APA – the trade association for engineered wood products – has issued a product advisory warning about scaffolding planks from China. APA tests suggest these planks are 20% to 30% weaker than their labels ratings claim. While most of the planks are believed to be in South Central and Southwestern states, all dealers need to beware. Read more at: http://www.apawood.org/level_d.cfm?story=2812

 

Source: Ohio Construction Suppliers Association, April 4, 2008

 

More than 70 Organizations Honored by Energy Star… The Department of Energy and the EPA today released the "Profiles in Leadership, 2008 Energy Star Award Winners," including winners representing the home building and remodeling industries. A total of 74 organizations across many sectors of the U.S. economy, including schools, hospitals, real estate, manufacturing, and chemicals, were honored for their efforts to reduce greenhouse gas emissions. The winners were selected from more than 12,000 organizations that partner in the Energy Star program.

 

The EPA launched Energy Star in 1992 as a voluntary market-based partnership to reduce greenhouse gas emissions through increased energy efficiency. To read the entire article, go to: http://www.builderonline.com/green-building/energy-star-awards.aspx

 

Source: Builder Business Online Update, April 5, 2008

 

Venezuela: Cemex Gets Nationalized… Venezuela's cement industry is the latest to be nationalized by President Hugo Chavez. In 2007, Chavez claimed that many private industry concerns, including energy, telecommunications, banking and cement, have utilized questionable business concerns. In particular, Chavez has accused private cement companies of exporting their production rather than selling it into Venezuela's domestic market to help ease a housing shortage that has drawn complaints from his supporters.

 

Cemex was not notified of the nationalization, instead hearing about it for the first time through published media reports. New York shares of Cemex stock fell 4.22 percent to $26.32 on Friday.

 

Source: LBM Daily, April 7, 2008

 

Is It or Isn't It? It's becoming a tired question at this point: Is the United States heading for a recession or is it currently suffering through one? No doubt, there is most likely a fairly equal number of people who are overly pessimistic of the U.S.'s economic situation, as well as those that are blindly hopeful. And with unemployment numbers hitting a two-year high in March and the country's growth stagnating, the debate isn't likely to end anytime soon.

 

"Although the situation has recently improved somewhat, financial markets remain under considerable stress," testified Federal Reserve Board Chairman Ben Bernanke before the Senate Committee on Banking, Housing and Urban Affairs. "Pressures in the short-term funding markets, which had abated somewhat beginning late last year, have increased once again." Read more: http://www.nacm.org/enews/2008-04-08/enews.html#6

 

Source: NACM E-News Weekly Update, April 8, 2008

Arkansas Dealer Stands Up for Suppliers… National Home Centers, a leading pro dealer with a dozen locations serving Northwest Arkansas, expects its sales this year to be down by more than 20 percent, to $150 million. “We don't have a lot of demand for our products right now,” says National's executive vice president and CFO, Brent Hanby, who notes that there are 2,300 unsold homes in his market, which is suffering through what he calls a "full-scale depression." It's gotten so bad in some markets that builders "can't even get financing to start a house," he says. More problematic is the acceleration of foreclosures that is leaving many of National's customers and suppliers unpaid for work they've completed on homes that end up on the auction block.

To call attention to this "silent and underlying issue," Hanby pleaded his case in a passionate letter he sent recently to Arkansas Gov. Mike Beebe, the state's two senators Mark Pryor and Blanche Lincoln, and his congressman John Boozman. One of the main points of that letter is that Arkansas's "weak" lien laws allow banks to buy foreclosed houses on courthouse steps, rendering liens filed against those homes or projects by contractors and suppliers "worthless and extinguished." Hanby told BUILDER he knows of two big developments – an $18 million condo project in Fayetteville, Ark., and a 300-unit project in Gulf Shores, Ark. – where suppliers with liens on those assets are claiming they should be ahead of banks as creditors.

 

Read more: http://www.builderonline.com/business/arkansas-pro-dealer-stands-up-for-suppliers.aspx

 

Source: Builder Business Update, April 8, 2008

 

Canfor Cuts Production, Results in Price Spike for U.S. Lumber… Following Canfor's announcement Tuesday that it would decrease its production by approximately 600 million board feet, the Chicago Mercantile Exchange witnessed rising lumber prices. Canfor's decision comes as a result of "falling demand and poor pricing for softwood lumber with no indications of a market recovery in the near future."

 

Source: LBM Daily, April 9, 2008

 

Swenson Resigns as NLBMDA President… Diane Swenson resigned Thursday, April 3, as president of the National Lumber and Building Material Dealers Association (NLBMDA), the association has informed its members. Russ Snyder, a senior vice president of SmithBucklin – the company that manages NLBMDA – will oversee NLBMDA until a new president is chosen. Click here to contact NLBMDA staffers.

Source: ProSales Business Update, April 9, 2008

 

Help on the Way for Homeowners? On Wednesday, the Federal Housing Administration (FHA) revealed that the Bush Administration is planning a measure to benefit struggling homeowners and that could have a positive impact on the housing crisis, in general: the plan would allow mortgagees to avoid foreclosure on their homes despite falling home values. Said Brian Montgomery, FHA's head, "We will permit and encourage lenders to voluntarily write down outstanding principal."

 

Source: LBM Daily, April 10, 2008

 

Health Care Proposals Introduced… While conventional wisdom holds that Congress will not attempt to pass sweeping health care reforms until the next president takes office, Congressional Democrats are still feeling pressure to act on one of their major promises upon claiming the majority in 2006. Two proposals have recently been raised that could impact building material dealers. A bipartisan group of Senators have introduced health insurance pooling legislation aimed at reforming states’ small group markets. The Small Business Health Options Program (“SHOP” Act, S.2795), introduced by Senators Durbin (D-IL), Lincoln (D-AR), Snowe (R-ME) and Coleman (R-MN), would provide a tax credit to small businesses and self-employed individuals who join a state purchasing pool, if their state adopts specific small group market reforms. NFIB and other associations have endorsed this legislation. On a less positive front, tax changes to treatment of Health Savings Accounts (HSAs) are being considered in the House Ways & Means Committee as part of a tax simplification proposal, that could make offering HSAs costlier and more difficult for small businesses.

 

Source: NLBMDA, April 11, 2008

 

DHS Clarification on No-Match Letters… The U.S. Department of Homeland Security (DHS) has released a Supplemental Proposed Rulemaking for the No-Match Rule previously issued on August 15, 2007, which attempted to articulate how employers could avail themselves to a “Safe Harbor” if they received a No-Match letter from the Social Security Administration, or a “Notice of Suspect Documents” from the U.S. Immigration and Customs Enforcement (ICE). According to DHS, “If the business follows the guidance in the No-Match Rule, comprising various actions to rectify the no-match within 90 days of receiving the letter, they will have a safe harbor from the no-match letter being used against them in an enforcement action.” Specifically, the new proposal attempts to clarify two aspects of the rule: First, DHS proposes a new 5-day rule for responding to a No-Match letter. Second, DHS acknowledges existing “Grandfather Clause” for workers hired before November 6, 1986. Employers should bear in mind that the No-Match Rule was originally due to take effect on September 14, 2007, but is currently enjoined from becoming effective by the U.S. District Court. For more information, contact Frank Moore at fmoore@smithbucklin.com .

 

Source: NLBMDA, April 11, 2008

 

Timber Demand to Drop? The sharp decline in U.S. homebuilding has led industry leaders to predict that the demand for lumber will drop by 19 million in board feet in 2008. Prices are the lowest that they've been since the 1990s.

 

Source: LBM Daily, April 14, 2008

 

Help for Troubled Housing Market? A first order of business when Congress returned from spring break was legislation designed to help the troubled housing market. The Senate passed the Foreclosure Prevention Act, which includes a tax credit for the purchase of homes in foreclosure and a standard deduction for property taxes for taxpayers who do not itemize. It would allow businesses with losses in 2008 and 2009 carry back net operating losses for four years. It also extends energy tax credits including those for improvements to existing homes, construction of energy-efficient new homes, improvements to commercial buildings and the purchase of energy-efficient appliances.

 

Source: NRHA, Last Week in Washington, April 14, 2008

 

 

 

Federated Provides Safety Program on Distracted Driving

Distracted driving is a growing public safety issue that costs business owners millions of dollars each year. According to the National Highway Traffic Safety Administration (NHTSA), driver distraction is a factor in half of all vehicle crashes and is a cause in up to 30 percent of fatal crashes.

To raise awareness of the dangers of distracted driving, Federated Mutual Insurance Company developed a comprehensive safety program, which is available to all of its business clients.

 

The program includes a video DVD, “Distracted Driving—At What Cost” and a packet of material containing a brochure, questionnaire, sample driving policy, employee pledge form and more. It has everything you need to conduct an impressive employee safety meeting and to use for new employee orientations. Request forms are included to order additional copies of the video and materials.

 

You can help reduce claims and the associated costs of distracted driving at your business by setting high standards for driving company vehicles. You can also perform a valuable public service by increasing awareness of distracted driving among employees, family members, friends, and in the community.

Federated marketing representatives will provide a copy of the program to insured members by request. Your association encourages you to take advantage of this valuable risk management program.

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

MLA is proud to endorse….

 

 THOUGHT FOR THE DAY

“Content makes poor men rich; discontentment makes rich men poor.”

– Ben Franklin