Vol. 6, No. 11 – May 21, 2007

 

 

Chairman Steve Kelly Testifies before House Committee on Small Business

 

National Lumber and Building Material Dealers Association (NLBMDA) Chairman Steve Kelly testified before the House Committee on Small Business this morning to highlight the impact predatory lawsuits are having on the building supply industry. Kelly, also president of Kelly Bros. Lumber, Covington, Ky., called on the Committee to support bipartisan liability relief legislation to protect innocent retailers from liability without wrongdoing.

 

Our current liability system holds each party in the product supply chain liable for any defects or harm caused by the product without any finding of fault. While NLBMDA agrees that the consumer should be protected from harm or inconvenience caused by defective products, we do not believe the legal system assigns liability in a fair and consistent way. A building materials dealer who simply sells a product should not be burdened with 100 percent of the liability when that product fails.

 

“In my travels as chairman,” Kelly stated, “I have heard stories from dealers across the country who are spending much-needed resources defending themselves against unfair lawsuits. For example, in Texas, a lumber dealer sold a 2x10x24 board to a contractor who used it for scaffolding. While two people were standing on it, the board broke. One of the individuals was able to catch himself, but the other fell and was hurt. They are suing the lumber company for selling them a ‘defective’ board, even though it was never suitable for scaffolding purposes. The case is still pending and has already cost the lumber dealer thousands of dollars to defend.”

 

The Innocent Sellers Fairness Act, H.R. 989, introduced by Representatives Dan Boren (D-OK) and Steve Chabot (R-OH), would restore common sense to the legal system by establishing that a retailer who simply sells a legal product, with no role in the design, manufacture or installation, is not liable for damages related to the product’s failure or misuse. If a dealer acts negligently in their handling of the product, they would be liable in proportion to the damages caused by their actions.

 

“I thank Chairwoman Velazquez and Ranking Member Chabot for holding today’s hearing to consider the disproportionate impact abusive lawsuits have on our nation’s small businesses,” Kelly concluded. “NLBMDA looks forward to working with members of the Committee to pass needed reforms like the Innocent Sellers Fairness Act (H.R. 989).”

 

 

2007 Vancouver Mill Tour

 

Mark your calendar for September 9-14 and plan to participate in the Northwestern Lumber Association Vancouver Mill Tour. The Pacific Northwest offers an abundance of things to do and see in a spectacular, natural environment.

 

In addition to all the industry tours, they have some exciting excursions lined up, starting in Woodinville on the east side of Seattle, where we will be visiting one of the many wineries of the region.

 

Heading north, we will take the ferry from Vancouver to Victoria – an adventure in itself. While on Vancouver Island, we will visit the famous Butchart Gardens – four beautiful gardens on 55 spectacular acres, and Cathedral Grove, the old growth forest of Douglas firs.

 

In Vancouver, we will visit Capilano Suspension Bridge, where we will venture through Douglas firs on a series of elevated suspension bridges, some reaching as high as 100 feet above the forest floor (and one 230 feet above the Capilano River). We will also take a sky ride to the top of Grouse Mountain with breathtaking views of Vancouver, the sparkling Pacific Ocean, Gulf Islands and snowy peaks.

 

More details will be available next month. If you are interested in the Vancouver Mill Tour and would like to add your name to the mailing list, contact Sally Means at 763-595-4058/800-896-5134 or smeansnla@megapathdsl.net.

 

Postal regulation changes

 

As noted in the May 7 newsletter, postal rates went up May 14. Other changes were also put into play. The shape of the mail-piece now plays a larger role in the pricing of first-class mail. The emphasis is on making your mail “machinable.” And, if it isn’t compatible with the U.S. Postal Service’s technology, you’ll pay significantly more.

 

Here’s a recap of first-class mail, thanks to Pitney-Bowes:

 

?         Letters: A two-cent increase from 39 cents to 41 cents for a one-ounce letter. However, the cost for each additional ounce will be only 17 cents (seven cents less than today).

?         Flats:  A 28-cent increase from 52 cents to 80 cents for a one-ounce flat, and 17 cents for each additional ounce.

?         Parcels: A 61-cent increase from 52 cents to $1.13 for a one-ounce parcel, and 17 cents for each additional ounce.

?         Postcards: A two-cent increase from 24 cents to 26 cents.

?         Workshare Discounts: Significant discounts continue to be available for those who presort their mail.

?         Nonmachinable Formats: A four-cent increase in the nonmachinable surcharge, from 13 cents to 17 cents.

?         Address correction: A 25-cent decrease for Address Correction Service from 75 cents to 50 cents for paper-based notifications. The cost of electronic ACS^TM notification would be lowered to six cents (down from 21 cents today for first-class mail).

 

Complete details are available at www.usps.com/ratecase.

  

 

 

 

LUMBER NEWS – QUICK GLIMPSES

 

Kansas Governor Signs Legislation - Prompt Pay Requirement Applies to All Projects... Subcontractors in Kansas will be assured of payment on all projects following Gov. Kathleen Sebelius’s (D) signing of the Fairness in Public Construction Contract Act (S.B. 333), a comprehensive prompt payment law that requires public owners to pay contractors undisputed amounts due within 30 days of receiving a proper invoice and contractors to pay subcontractors within seven days of receiving payment from owners. The April 21 signing represents a major victory for ASA-Greater Kansas City (ASA-GKC), which helped secure the passage of similar legislation for private work two years ago. “Fairness is our goal — and was from the start,” said ASA-GKC Secretary/Treasurer Ken Keller, Western Extralite Co., Kansas City, Mo., regarding the new law’s seven-day requirement, which applies to all tiers of construction. The law addresses no-damage-for-delay and other critical issues as well. The advocacy effort was bolstered by a recent Subcontractor Advocacy Grant from ASA. For more information, contact ASA-GKC Executive Director Ron Cornelison at 816-942-1255 or kcasa@kc.rr.com.

Source: American Subcontractors Association in NACM E-news Weekly Update, May 8, 2007

 

Minimum Wage/Tax Relief Package Stalls… A House-Senate compromise on the minimum wage increase package, which included business tax relief provisions, was included in the Iraq War supplemental spending bill. Since Congress failed to override the President’s veto of the spending bill, it is unclear whether the tax relief/minimum wage package will be brought up again as a stand-alone bill in Congress.

 

Source: NLBMDA Legislative Update, May 9, 2007

 

Housing Forecast Changed Slightly Due to Impact From Tighter Lending… Housing activity this year will be somewhat lower than in earlier forecasts, with clearer analysis of the effects of stricter lending standards and a decline in subprime mortgage origination, according to the latest projections (PDF 136K) by the National Association of Realtors®.

 

Lawrence Yun, NAR senior economist, said one benefit for the market is the disappearance of speculative behavior, which contributed to abnormal price growth.  “Home buyers today are purchasing for the long-term, generally with a realistic expectation of modest gains over time,” Yun said. 

 

Source: National Association of Realtors, May 9, 2007

 

Estate Tax Repeal Introduced in Senate… On April 17, Senator Jon Kyl (R-AZ) introduced legislation, the Invest in America Act (S. 14), to repeal the alternative minimum tax and permanently extend the 2001 and 2003 tax cuts, including the estate tax repeal. It is not likely that this bill will reach a Senate vote in its current form, but it represents Sen. Kyl’s continued commitment to negotiating a solution to provide business owners critical tax relief, particularly from the estate tax which will return in full in 2010 if Congress fails to act.

 

Source: NLBMDA Legislative Update, May 9, 2007

 

House passes the RECOVER Act (H.R. 1361)… On April 18, the House passed the RECOVER Act (H.R. 1361), legislation designed to overhaul the Small Business Administration’s (SBA) disaster loan program, by a vote of 267-158.  The bill requires the agency to develop and implement a disaster response plan and to create a centralized application tracking system and revise repayment and disbursement timetables to treat borrowers more favorably.  The Bush Administration opposes the RECOVER Act, arguing that it would substantially raise the cost to taxpayers in providing disaster assistance and increase risks for default losses.

 

Source: NLBMDA Legislative Update, May 9, 2007

 

Softwood Lumber Agreement Heads to Arbitration…Just months after the Softwood Lumber Agreement with Canada went into effect, the U.S. has requested formal consultations over Canadian actions it feels violate the terms of the Agreement. The 40-day consultation period will likely be followed by arbitration. While the Canadian industry has largely disbanded their lobbying efforts, the American instigators of the trade dispute have remained active. Most recently, they announced the hiring of lobbyists to represent American timber interests in Ottawa.

 

Source: NLBMDA Legislative Update, May 9, 2007

 

House Panel Examines OSHA’s Response to Workplace Hazards… On April 24, the House Education and Labor Subcommittee on Workforce Protections held a hearing to determine whether Occupational Safety and Health Administration (OSHA) standards have kept up with workplace hazards.  The hearing reflects the Democrats’ pledge to subject federal agencies to higher scrutiny.  Panelist Edwin G. Foulke, Jr., Assistant Secretary of Labor for Occupational Safety and Health, countered criticisms, arguing that since 2006, OSHA has collected $750 million in penalties for health/safety violations.  He also stated that the injury/illness rate for workers has fallen by over 13% since 2002.

 

Source: NLBMDA Legislative Update, May 9, 2007

 

Tembec Shuts Down Mill; Blames Housing Slump… Tembec Inc. announced on Monday that they would shut down their Kirkland Lake, Ontario engineered wood products mill for at least two months. Tembec pointed to the decline in U.S. housing starts as the primary reason for the shutdown.

 

"Demand for lumber is down sharply, driven primarily by the dramatic decline in the level of housing starts in the United States," said Dennis Rounsville, president of Tembec's forest products group. "This decline in demand has resulted in both lower prices for lumber and reduced operating rates in sawmills across Eastern Canada."

 

Source: LBM Daily, May 15, 2007

 

U.S. Home Building Permits Drop… The U.S. Commerce Department announced on Wednesday that new building permits have dropped to the slowest pace since June 1997. Permits dropped 8.9% in April, down 28.1% from last year.

 

Source: LBM Daily, May 17, 2007

 

 

Get paid for risk management

 

In these competitive times, successful entrepreneurs look for every legitimate edge as they operate their businesses. Many Federated Insurance clients have indicated that they wish to be rewarded for the good results of their aggressive safety and risk management practices. Business owners have indicated they desire "up-front" premium savings in return for their willingness to assume more risk.

 

Federated's response is the Self-Insured Retention Plan (SIR), introduced more than eight years ago. Some clients, particularly larger businesses, have benefited from this innovative risk management strategy which more directly ties premium payments to claims payments. Changes in the plan since its introduction have made it more practical and appealing for medium-sized businesses as well.

 

The SIR plan allows your business to retain more of the insurance risks while offering the opportunity to receive significant up-front premium savings. If your proactive business practices are helping you prevent or reduce claims, you may be ready to take advantage of the SIR plan.

 

How it works

 

	You Pay	Federated Pays
Premium	√
Deductible	√
Losses	√ up to retention amount	√ over retention amount
Independent adjusters		√
Attorney fees & subrogation costs	√ up to retention amount	√ over