Vol. 4, No. 5 – February 28, 2005

 AHP Companion Bill Introduced in Senate

U.S. Senators Jim Talent (R-MO) and Olympia Snowe (R-ME) reintroduced legislation in the Senate February 16 that would establish association health plans (AHPs).  In addition, it received a big boost when Senator Mike Enzi (R-WY), chairman of the Senate Health, Education, Labor and Pensions Committee, vowed to “help resolve differences” that have slowed the progress of this legislation in years past.

The “Small Business Health Fairness Act” (S. 406) is the companion bill to H.R. 525, introduced in the House February 2. Both bills are aimed at expanding access to quality health care for the uninsured by allowing small businesses to pull together and purchase insurance through their trade associations at a lower cost for their workers. The legislation is strongly endorsed by President Bush and a broad coalition of more than 160 organizations, including the U.S. Chamber of Commerce and the National Federation of Independent Business.

The House passed AHP legislation last year by a vote of 252-162, but it did not reach the Senate floor for consideration. Opposition to AHPs continues to come from the Blue Cross and Blue Shield Association (BCBSA), which claims AHPs would not solve the uninsured problem in America and would raise premiums for many small employers.

 

Secretary of Transportation Norman Mineta to Speak at 2005 Legislative Conference

On February 2nd, President Bush delivered his State of the Union address to Congress and the American People. The fact that he gave the speech was in itself not symbolic, because every President since George Washington has addressed both houses of Congress in this fashion. What President Bush said during this speech, however, made me sit up and take notice. It was wonderful to hear President Bush's agenda mirror our industry legislative priorities.

During President Bush's speech, he stated that Congress should protect businesses from “needless regulation and protect honest job creators from junk lawsuits.” In the 109th Congress, the President seeks passage for legislation creating association health plans, class action reform, protection from frivolous asbestos claims, an end to the Death Tax, and restructuring the immigration system. Even with President Bush's increase in ‘capital’ that he achieved with his re-election, his agenda is going to take some heavy lifting to succeed.

You can do your part to further President Bush's, NLBMDA's and the LBM industry’s legislative priorities. On March 15 -16, upward of 200 dealers, along with their families, will converge on Washington, D.C. to be briefed on industry issues by NLBMDA and visit their representatives. Our members share their concerns, building relationships and seek their legislators’ assistance and support during their visits to the Hill.

As an added bonus, Secretary of Transportation Norman Mineta is scheduled to speak at this year's Legislative Conference. NLBMDA and our State Association partners are excited to make those representing our industry’s time here productive, educational and fun.

If you’d like to experience the nation’s capital in a way that benefits your company and our entire industry - please call NLBMDA at 800-634-8645 or visit www.dealer.org for more information on the Legislative Conference. I'm sure President Bush and your fellow dealers would be grateful to have you join our effort!

 Best Wishes,

Shawn Conrad
NLBMDA President 

MLA EDUCATION PROGRAMS  

MLA has provided training for dozens of members’ employees so far this year. One more Basic Materials Estimating School is slated for March 10-11 in Tulsa, Okla. This two-day school is designed to teach participants the basic piece-by-piece estimating of building products usually sold in a full-service lumberyard/home center. Students learn the basics of blueprint reading, how to use the LT1 Guidebook for estimating that contains tables, checklists, construction illustrations and estimating reminders; and finally how to estimate a simple house plan piece-by-piece. 

Complete information and registration forms are available upon request from MLA at 800-747-6529. Or, simply reply to this email and we’ll send complete information today! 

TRAINING WITHOUT TRAVEL 

NLBMDA will hold their Training without Travel Teleconference on “How to Handle an OSHA Inspection” on March 10. Information on complying with OSHA requirements will be presented by Ron Koons, a well-known OSHA and safety consultant. The OSHA training teleconference provides a 45-minute presentation, 30-minute question-and-answer session and written materials. The member price, per site, is just $95. For more information and registration forms contact NLBMDA at 800-634-8645 or go to http://www.dealer.org/html/education.html#training.   

How much are you paying for regulatory posters? 

From time to time, you might receive mailings from “compliance services” offering required posters at inflated prices. You Association has available the 5-in-1 federal fair employment poster for the low price of $6 including postage. 

State compliance posters are available on the Internet at no charge. Or, if you order the federal poster from MLA, we’ll include your state poster in the package – no additional charge. Don’t buy unnecessary items. 

High School Education Important For Economic Growth

New Study Uses Robust Data Set To Test Economic Models 

WASHINGTON, D.C. – Regional high school graduation rates have a tremendous impact on economic growth, according to a new study (http://www.sba.gov/advo/research/rs248tot.pdf) released today by the Office of Advocacy of the U.S. Small Business Administration.  The study,

Using Census BITS To Explore Entrepreneurship, Geography, and Economic Growth, used the robust Business Information Tracking Series (BITS) dataset to test economic models, including reasons for economic growth. 

 “These findings show the importance of testing economic models with real world datasets,” said Dr. Chad Moutray, Chief Economist for the Office of Advocacy.  “Among other things, by using BITS we now know the significance of raising high school graduation rates to economic growth and entrepreneurship.” 

Written by Zoltan Acs and Catherine Armington with funding from the Office of Advocacy, the report set the stage for the March 7 conference “Putting It Together: The Role of Entrepreneurship in Economic Development.”  Held in Washington, the conference explored the key role that entrepreneurship and market-based solutions play in state, regional, and local economic development.   

The BITS dataset, developed by the U.S. Census Bureau with support from the Office of Advocacy, covers almost all private sector businesses and tracks their employment and firm ownership from 1988 through 2001. BITS represents all industries, identifies start-ups of both new firms and new locations of existing firms, and specifies the location, industry, and changing employment of each establishment over time. 

The Office of Advocacy, the “small business watchdog” of the government, examines the role and status of small business in the economy and independently represents the views of small business to federal agencies, Congress, and the President.  It is the source for small business statistics presented in user-friendly formats and it funds research into small business issues.

For more information and a copy of the report, visit www.sba.gov/advo. 

LUMBER NEWS – QUICK GLIMPSES 

National Sales Tax Proposal Returns…  Rep. John Linder (R-GA) wasted no time in again introducing his Fair Tax Act to replace the current system of individual and corporate income taxes and payroll taxes with a 30 percent national sales tax imposed on all new goods and services. 

In addition to concerns about what that might do to retail prices and consumer spending, a report by the Nelson A. Rockefeller Institute of Government said a national sales, consumption or value added tax could cause problems for state budgets in administering state income and sales taxes and raise the cost of state and local services and infrastructure if the deduction for state and local income and property taxes and the exemption for municipal bond interest were eliminated. 

Source: Washington Report, published by National Retail Hardware Association, February 2005.

 Tax Cuts End This Year…  Several business-related provisions expire in 2005 – the research and development, work opportunity and welfare-to-work tax credits; the 15-year straight-line cost recovery for qualified leasehold improvements and a higher deduction for corporate contributions of computer equipment for educational purposes.

 Legislation has been introduced to make permanent the current individual income tax rates, the lower tax rate on dividends and long-term capital gains, repeal of the estate tax, marriage tax relief, the increased child tax credit and the expansion of adoption and dependent care tax credits.  

Source: Washington Report, published by National Retail Hardware Association, February 2005.

Class Action – Victory! … The Class Action Fairness Act (S.5) passed the Senate without amendment Thursday, February 10. The vote, which required 60 to move forward, was 72-26. Democrats voting yes included freshmen Senators Barack Obama (IL) and Ken Salazar (CO). NLBMDA thanks Jeff Flora, Mid-America Lumbermens Association, and David Rosenmeier, Wisconsin Retail Lumber Association, for contacting Judiciary Committee Senators prior to the bill’s markup. NLBMDA encourages members to thank senators from their states for supporting this long overdue reform. The vote results may be viewed by using this link: http://www.congress.org/congressorg/issues/votes/?votenum=9&chamber=S&congress=1091  

Source: NLBMDA Advocate, published by National Lumber & Building Material Dealers Association, February 2005 

Bankruptcy – in committee… Sen. Charles Grassley (R-IA) introduced the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (S. 256), and a hearing was held Feb. 10. The Judiciary Committee is planning to mark up the bill Feb. 17. Several Democrats are planning to offer amendments, including measures by Sen. Ted Kennedy (D-MA) to exempt certain medical-related bankruptcies, and Sen. Chuck Schumer’s (D-NY) perennial amendment relating to abortion-clinic violence. However, Republicans are cautiously optimistic that they may have enough votes to defeat these proposed amendments and send the bill to the Senate floor immediately following the Presidents Day recess, Feb. 21-27. 

Source: NLBMDA Advocate, published by National Lumber & Building Material Dealers Association, February 2005 

Asbestos – in committee… Feb. 7, Senate Judiciary Chairman Arlen Specter (R-PA), introduced a draft asbestos bill containing newly negotiated compromises on several lingering sticking points. A hearing was held Feb. 2 to examine a proposed provision that would require claimants suing over injuries caused by exposure to silica and other airborne particles to prove in court that asbestos was not the cause of their illness. Committee action has been delayed due to taking up class action and bankruptcy, but Specter remains committed to continuing discussions. 

Source: NLBMDA Advocate, published by National Lumber & Building Material Dealers Association, February 2005 

Environmentalists Sue Bush Administration Over New Forestry Management Rules… Environmentalists sued the Bush administration on Thursday over new rules for managing the 192 million acres of national forests. The suit filed by San Francisco-based Earthjustice on behalf of a coalition of conservation groups said the rules fail to include important environmental protection measures mandated by Congress under a 1976 law, the National Forest Management Act.  

The rules issued in December give managers of the 155 national forests more discretion to approve logging and other commercial projects without lengthy environmental reviews. The rules were last updated in the 1970s. Officials long have complained that the analyses required under the law take up to seven years to complete. Under the new rules, forest plan revisions could be completed within two to three years, officials said.

 Source: LBM Daily, February 18, 2005 

Housing Starts Jump to Kick Off 2005… Housing starts increased almost 5 percent in January, from an upwardly revised December number, bringing the seasonal adjusted annual rate (SAASR) to a 30-year high of 2.16 million. The increase was led by the volatile multi-family sector, which was up 14 percent, although the single-family sector was also strong – up almost 3 percent to 1.76 million (SAAR), a new record. Regionally, winter weather negatively impacted activity in the Midwest and Northeast – they were down 12.5 percent and 24 percent respectively, while the South (which accounts for about 45 percent of the U.S. starts), was up almost 19 percent and the west was up 2 percent. Permits were up 1.7 percent indicating that the  near term outlook remains very positive. 

Source: USDA Forest Service, quoted in the NAWLA Bulletin , February 22, 2005

 U.S. Forests Growing… Despite a booming popular and urban sprawl, the United States has gained 10 million acres of forests since 1990. That’s enough trees to cover all the land in New Jersey twice. Growth is concentrated in the Northeast and Rocky Mountain states, while wooded acres dwindled in the South, Midwest and Pacific Coast. 

Over the past 50 years, according to the Forest Service, 24 states added woodland – seven of them more than a million acres each. New York, Ohio and Pennsylvania were the biggest gainers. Texas, Florida and California lost the most.  

The United States is a rare bright spot in a world that’s rapidly losing its forests. Worldwide, 235 million acres of trees vanished in the last decade, as much as all the land in California, Pennsylvania, Ohio, Minnesota and North Carolina combined.

Source: Knight-Ridder Newspapers, quote in the NAWLA Bulletin, February 22, 2005.

 Home Construction and Sales to Ease; Builders That Own Land in Multiple Markets Remain in Good Position… After a record-setting six-year run, home construction and sales are forecast to ease this year and next. The National Association of Home Builders says new home starts will decline 8 percent the next couple of years. New- and existing-home sales are expected to back off 7 percent over the same period. 

Large homebuilders should remain in a good position. “As a group, they are basically going to be able to grow at a good clip because they control land,” said Lawrence Horan, research director with Parker Hunter Inc. “That has been the difficulty for the small, (privately held) companies.”  

Source: LBM Daily, Feb. 24, 2005

 World Trade Organization Forms Two Panels On Softwood Lumber Dispute… The World Trade Organization (WTO) last week formed two panels to overhear and conclude the hotly disputed softwood timber tariffs controversy. The first panel is authorized to decide whether Canada will be able to retaliate against the U.S. with like sanctions. The second panel is charged with reviewing U.S. compliance with earlier WTO rulings. 

B.C. Forests Minister Mike de Jong explained that Canada would wait to implement retaliatory sanctions until both panels have reached their conclusions. “No one wants to get into a tit-for-tat trade war with your biggest customer, but everyone at the meeting agrees that the U.S. to this point is simply ignoring their obligations under these treaties,” he said. “We need to take steps to remind them that there are consequences for ignoring those obligations.” 

Source: LBM Daily, Feb. 28, 2005 

Will you pay for my insurance? 

If asked to pay for someone else’s insurance, the first question that most would ask is “Why would I want to do that?”  However, many business owners unintentionally do just that when they agree to name other entities as “additional insureds” on their business insurance policies. 

Entities, such as general contractors or subcontractors, may ask for additional insured status on your policy: 

·         To protect their own policy limits.

·         To have your coverage provide a defense and/or indemnify them.

·         To back up a potentially unenforceable indemnity or a “hold harmless” agreement found in the job contract, work order or bid letter.

·         To obtain coverage from you that may not be available or affordable under their own insurance coverage. 

Contracts can be filled with land mines. It is important to read contracts carefully before signing them and contact a qualified business attorney to assist you.  

Some basics to remember 

·         Recognize that your insurance policy is a separate contract between you and your insurer and may not respond to all of the promises that you make in another business contract.

·         Be cautious about honoring requests for additional insured status.

 Try to avoid contract provisions that ask you to assume obligations past the conclusion of a project. Some contracts may ask you to provide insurance protection to others for years to come. Your policy may not provide such coverage. 

·         If the provision cannot be avoided, try to limit the additional insured coverage to the shortest period possible. Some parties will ask for specific additional insured endorsements that include “completed operations” coverage. This type of endorsement entitles them to direct rights under your policy. Essentially, they are asking you to share your policy limits with them for years. Your policy limit could potentially be used entirely by others, with no remaining coverage for your business.

·         Confirm that your insurance carrier will even provide the type of additional insured endorsement requested before you sign the contract.

 Your association’s recommended insurance company, Federated Insurance, has some additional risk management materials that can assist you in this area.  Let Federated help you avoid paying for the other person’s insurance.  Contact your Federated Marketing Representative for more information. 

                                       MLA is proud to endorse….

 THOUGHT FOR THE DAY 

“ The only place where success comes before work is in the dictionary.” – Donald Kendall