|Construction Industry is Seeing Lots of Trouble This Session
This Session we are seeing many Bills attacking the construction industry. Forget all of the industry’s contributions to the economy and jobs creation – we are seeing bills that treat us as an industry against whom the public apparently needs protection. The lone bright spot seems to be the Home Energy Efficiency Tax Credit (HEEC), which passed its first Committee this week.
NMHBA has quickly drafted a Bill to address the dramatic increase in construction defect litigation that has hit the Los Lunas-Albuquerque-Santa Fe areas in the past few years. The Bill will require every home to be covered by a third-party warranty that we have been told will cost custom builders just under 2% of the sales price and provide the builder and homeowner with the usual 1-yr. coverage for all claims; 2-yrs’ coverage for “distribution systems” (electrical, plumbing, mechanical); 10-yrs’ coverage for major structural defects. New builders with minimal experience or those who have had a poor claim history may be charged around 3% for the same coverage. For more on why this is important to the entire industry, see last week’s Update.
We thing we may have found a sponsor (Rep. Patricio Ruiloba) for this bill, and as soon as the Legislative Council Service gets to our draft in their stack, it will be introduced. This must be completed by noon on February 14th, which is the deadline for Bill introductions.
Rep. Matthew McQueen has introduced HB221 Home Energy Efficiency Income Tax Credit which modifies the Income Tax Act for taxpayers who make energy efficiency improvements to their NM home. Improvements must be certified by a qualified assessor, and the home must be the taxpayer’s primary residence that is 10 years or older. This Bill is important for all of our remodeling members, and our state as a whole. Click here to read the Bill in full. PASSED its first Committee and waits to be scheduled in House Tax & Rev.
Rep. Powdrell-Culbert (from Corrales) has introduced a Bill regarding Mechanic’s Liens. HB 343 Notice & Fees of Mechanics’ Liens, is a Bill that simply requires County Clerk to mail a copy of the lien to the owner of record and allows the Clerk to charge a $25 fee for this service. Click here to read the Bill in full. Scheduled for its first Committee hearing on Tuesday.
Construction Industry Licensing Act
The biggest problem for us this Session is SB105, named the Rename Construction Industries Licensing Act (Muñoz). Jack wrote about in his article in the January Housing Journal. We are very much opposed to this bill. It has been given three Committee assignments, which means it will have a hard time passing – although not impossible. The bill includes a Recovery Fund, and that alone caused the NMHBA Board to vote at their Farmington meeting to oppose the bill. You can read Jack’s analysis online at NMHBA January HJ. Click here to read the Bill in full. Jack met with the Sponsor this week, and the Bill has been sent back to CID for their re-drafting.
Another troublesome Bill, HB 344 Failure to Pay Subcontractors as a Felony (Powdrell-Culbert), is more problematic. HB 344 would amend the Construction Industries Licensing Act to set penalties for any contractor who did not pay a properly-licensed subcontractor for work performed. There is no mention to whether or not the work performed was satisfactory – just a reference to failure to pay as required in the contract. This Bill has also been given three Committee assignments, making it difficult to pass. Click here to read the Bill in full. Waiting for its first Committee hearing.
HB 206 Environmental Review Act (Chasey/Stewart) would require environmental assessments of all building over $1 million in value or developments over 5 acres. We are still reviewing the bill and it appears to add massive amounts of regulation (and with regulation comes delays and added costs) to the development process. It’s confusing if the sponsors intended to exempt single-family construction from the Bill, but if that was their intention, they didn’t make it clear. Just like the 2013 version of this Bill, any person interested in or affected by a project may bring a civil action in district court. This Bill has also been assigned to three Committees. Click here to read the Bill in full. Scheduled for its first Committee hearing on Saturday morning.
SB35 Market NN to Retirees (Padilla) makes a one-time appropriation to the Economic Development Department for a targeted marketing and research campaign to attract retirees to New Mexico. Click here to read the Bill in full. Waiting for its first Committee hearing.