Estate Tax Vote Coming Soon

An update on the estate tax situation in the Senate: Estate tax repeal will be the third item on the Senate’s agenda when they return from recess this week. The good news is that there are a handful of Democrats who are interested in supporting a compromise approach. The bad news is that, as is becoming the routine in the Senate, we will be forced to get cloture (60 votes) on a motion to proceed first. Minority Leader Reid is heavily pressuring Democrats to vote no, which would prevent the Senate from even getting to debate on the issue. If that first vote passes, the current plan is to debate and vote on full repeal (which will fail) and then to debate and vote on the NLBMDA-endorsed Kyl compromise. 

Contacts are needed to Senators by Thursday, June 8; the first vote will likely occur that day or the following Tuesday.

NLBMDA Applauds Introduction of Innocent Sellers Fairness Act in Congress

Legislation Targets Unfair and Unfounded Lawsuits Against Product Retailers

[Washington, DC] — The National Lumber and Building Material Dealers Association (NLBMDA) thanks U.S. Representatives Ric Keller (R-FL) and Dan Boren (D-OK) who yesterday introduced the Innocent Sellers Fairness Act – H.R. 5500. This product liability reform legislation is aimed at putting a stop to frivolous and unjust lawsuits that penalize innocent retailers who merely sell legal products to their customers.

“Current law imposes liability without wrongdoing on sellers,” said Keller. “This legislation would ensure that retailers would only be liable for damage or injury for which their company was directly responsible.”

The “mistake” may have been in the manufacture or design of the product, or in a customer’s improper use of the product, however the seller is oftentimes faced with some or all of the liability.  No amount of care can free a seller from disproportionate product liability. Knowing this, plaintiffs’ lawyers routinely sue anyone in the chain of distribution of a product, often forcing settlements out of otherwise innocent merchants.   

According to Rep. Boren, “This bipartisan legislation would restore basic fairness and common sense to the legal system.”

A winter 2005 survey of NLBMDA members found that more than 1 in 4 retailers has been the subject of product liability lawsuits within the past 5 years; 65 percent of those have been involved in more than one. The high costs of defending such lawsuits typically force building material dealers to settle, regardless of the merits of the case.

“As a dealer, I have seen first-hand what abusive product liability cases can do to our nation’s small businesses,” states Sam Dunn, President of Dunn Lumber, Daytona Beach, FL, and NLBMDA past chair. “Retailers like myself do not have the time or resources to defend ourselves and need this legislation to ensure our businesses are not jeopardized as a result of unfounded lawsuits. I commend Congressman Keller for his leadership on this issue.”

According to a 2003 study by the U.S. Chamber Institute for Legal Reform, small businesses bear 68 percent of business tort liability costs.  The high price of liability insurance forces many small businesses to pay over $15 billion a year in out of pocket tort liability costs because they cannot afford insurance. For a typical building material supplier with $1 million a year in revenue, the average tort liability cost is $17,000 per year. These costs drive up the price of building materials, ultimately increasing the cost of a new home.

“NLBMDA is thrilled that Congressmen Keller and Boren have stepped forward to safeguard dealers and their companies from these crippling lawsuits,” said Shawn Conrad, President of NLBMDA. “In addition we would like to thank Representatives Marilyn Musgrave, Jeb Hensarling, Wally Herger, Randy Kuhl, Nancy Johnson, Michael McCaul, Bob Ney and Lincoln Davis for cosponsoring this bill and helping to protect dealer rights.”

Since 1986 a handful of states have passed product liability laws that include limits to liability for product sellers, including Iowa, Georgia, Indiana, New Jersey, Delaware, North Dakota, Texas, Mississippi and Michigan. While these state reforms are positive steps, a federal solution is important to ensure uniformity for building material dealers who often operate in multiple states.

SECOND ANNUAL SAFETY AWARDS NOW OPEN

NLBMDA invites all dealers to apply for the second annual national safety awards. Two types of awards recognize dealers for their safety records and achievements during the past year. Please contact MLA to obtain applications.

The National Achievement in Safety Award will be given to all dealer applicants that meet a high standard of safety based on specific criteria. Winners will receive a recognition certificate, acknowledgement in national industry publications and customized press releases to announce their achievements to local media.

The National Industry Leader in Safety Award will be presented to two dealers at the annual Industry Summit: One with fewer than 50 employees and one with more than 50 employees. Winners will be selected by an awards committee based on specific safety criteria and how well the company demonstrates their outstanding leadership and commitment to safety by “going above and beyond” basic safety practices. Winners will also be profiled in ProSales magazine and receive customized press releases for use with local media.

Eligibility for both awards is on a per location basis to allow individual lumberyards to be recognized for their excellence in safety. The deadline for applications is June 30, 2006. 

LUMBER NEWS – QUICK GLIMPSES

Forestry Experts Use Katrina to Determine Tough Timber Species… Forestry experts on the gulf coast are examining the results of Katrina’s devastation and hoping to apply their findings to future timber management.

“We’ve been able to look at the three commercial species - slash, loblolly and longleaf pines - and see how much they each were damaged and the type of damage they sustained,” said Glenn Hughes, a forestry professor based at the Coastal Research and Extension Center in Biloxi. “We evaluated adjacent stands that were planted and thinned at the same time.”

“Katrina illustrated that no species is immune from hurricane damage,” he said.

Source: LBM Daily, May 23, 2006

In this con, someone calls pretending to be a court official who threateningly says a warrant has been issued for your arrest because you didn’t show up for jury duty. The caller claims to be a jury coordinator.

If you protest that you never received a summons for jury duty, the scammer asks you for your social security number and date of birth so he or she can verify the information and cancel the arrest warrant. Sometimes they even ask for credit card numbers. Give out any of this information and bingo! Your identity just got stolen.

The scam has been reported so far in 11 states, including Oklahoma, Illinois, Colorado, Texas and California.

This scam is particularly insidious because they use intimidation over the phone to try to bully people into giving information by pretending they’re with the court system. The FBI and the federal court system have issued nationwide alerts on their websites, warning about the fraud.

U.S. Should See Softwood Lumber Deal Draft This Week… The Canadian government hopes to submit a “legal draft” of the softwood lumber deal to the U.S. this week, according to lumber industry officials. Canadian industry executives have been reviewing a draft since Saturday night.

“We have worked over the last two days, took advantage of yesterday not being a holiday in the U.S. to work with our U.S. trade counsel to get some comments in,” said John Allan, president of the B.C. Lumber Trade Council.

The deal would have the U.S. end punitive lumber duties now and return all but approximately $1 billion collected in duties.

Housing… According to a report by the National Association of Home Builders (NAHB), sales of new single-family homes were up 4.9 percent in April to a seasonally adjusted annual rate of 1.198 million units. That’s better than analysts had predicted. Year-to-date, new home sales for the first four months of the year were down 11.2 percent from the same period last year. Said NAHB Chief Economist David Seiders, “We continue to believe that the housing market is cooling down in an orderly fashion from the record pace last year, largely because of a pullback by investors/speculators.”

Remodeling… A report by NAHB’s Remodeling Market Index (RMI) says remodeling activity grew moderately in the first quarter of 2006 from 46.6 to 48.1. The RMI measures remodeler perceptions of market demand for current and future residential remodeling projects, and any number over 50 indicates that most remodelers believe the market is expanding. Regionally, there was strong growth throughout the country except the West, though that area still remains within the positive range.

Another effect is that the closing of “mom and pop” stores following the appearance of a store leads to the closing of local businesses that previously supplied those stores including: wholesalers, transporters, logistics providers, accountants, lawyers and others. The authors state that, “by displacing the local class of entrepreneurs, the Wal-Mart chain also destroys local leadership capacity.” They encourage community leaders to think about programs and policies in anticipation of helping those displaced by the arrival of the chain.

Housing Sector Shows Resilience in April… Sales of new homes rose unexpectedly in April to the fastest pace this year as the housing sector showed resilience in the face of rising mortgage rates. But the price of homes sold last month edged up only slightly and the level of unsold homes rose to a record high.

The Commerce Department reported that sales of new single-family homes increased by 4.9 percent last month to a seasonally adjusted annual rate of 1.198 million units, the highest rate since last December.

The pace of activity caught economists by surprise. They had been expecting a decline in sales, reflecting the fact that mortgage rates have been climbing in recent weeks and now stand at the highest level in nearly four years.

Andersen to Purchase Silver Line… Leading window and door manufacturer Andersen Corp. announced May 24 it will acquire North Brunswick, N.J.-based vinyl window and patio door manufacturer Silver Line Building Products Corp.

The acquisition will allow Bayport, Minn.-based Andersen, which does not currently offer vinyl windows, to round out its product offerings and expand into new market segments. “Vinyl windows serve a segment of the market that is growing rapidly,” said Andersen president and CEO Jim Humphrey in a press release. “Adding this product line to the enterprise’s portfolio will enable an Andersen company to provide windows and doors for virtually any new-construction or home improvement project in any area of the country.”

Negotiators Optimistic of Joint Draft Softwood Tariff Agreement in Coming Month… In Washington, DC, Canadian and U.S. negotiators are currently hammering out a softwood lumber agreement that both countries can sign off on.

“Right now negotiators and lawyers are working on a merged text,” announced Steve Norton, spokesman for the U.S. Trade Representative. “They are targeting end of June to have that done.”

Once consensus is reached, the draft will assume a role in the final phase of the much contested trade battle.