HUD has proposed new floodplain development rules that threaten access to FHA financing for single- and multifamily builders and rely on floodplain maps that haven’t been drawn yet.
For nearly 40 years, federal floodplain requirements have been tied to the 100-year floodplain. A 2015 executive order greatly expanded the Federal Flood Risk Management Standard, offering three new options to meet it:
- The best available climate-informed science
- The freeboard value approach (adding elevation above the 100-year floodplain)
- The 500-year floodplain
HUD has proposed to expand the definition of the 2015 executive order, which applies to federally funded projects, by imposing costly requirements on the FHA multifamily and single-family mortgage insurance programs.
Specifically, HUD seeks to expand its oversight using the freeboard value approach (see illustration below), corresponding both vertically and horizontally with an additional two feet of elevation above the 100-year base flood elevation for new and “substantially improved” single-family homes and multifamily properties financed using FHA-insured mortgages.
Single-family homes using FHA financing would trigger the elevation requirements only when they are built within the 100-year floodplain.
Multifamily builders would face the added burden of HUD’s elevation requirements (or flood proofing, in the case of “substantially improved” structures) both within the 100-year floodplain and in the expanded horizontal floodplain.
HUD’s new flood risk measures would also apply to projects that use federal grants, such as the HOME and Community Development Block Grant programs.
“HUD’s proposal will severely disrupt the housing market and harm affordability for millions of Americans living in areas designated under the expanded floodplain definition, where in many cases the odds of facing a flood event are extremely remote,” said NAHB Chairman Ed Brady.
In addition to the project design and structural elevation costs that will result if the proposal is implemented, HUD acknowledges that maps of the expanded floodplain don’t exist. This uncertainty will only add to project delays and costs.
HUD’s proposed rule is open for public comment until Dec. 27.
INTERNATIONAL BUILDERS SHOW
JANUARY 19-21, 2016 in Las Vegas, NV
The International Builders Show offers great education and networking opportunities. Registration is now open and in September, spouse registrations are free and they receive the same access to IBS as the primary registrant.
The NMHBA Block of rooms are in Hotel Paris and the Westgate. Rooms are approximately $111-113 per night.
There are only three weeks left in the Legislative Session, and bills need to get moving if they’re to have any hope of passage before time runs out. Below is the listing of bills introduced of the most interest to NMHBA members.
Workers’ Compensation Workers’ Compensation premium costs are increasing faster in New Mexico than most other states. A coalition of business groups tried (without success) to get a package of reforms through the last three sessions. This year an assortment of labor representatives and public entity representatives support all of the bills endorsed by the Work Comp Advisory Committee, which NMHBA Past President Kevin McGinley chairs.
We SUPPORT HB238/SB553 Workers’ Comp Benefits and Intoxication (Roch/Cervantes) – These twin bills would allow the work comp judge to reduce work comp payments to a worker whose illegal drug or alcohol use contributed (to any degree) to the work injury. Medical expenses would be covered 100%, and death benefits for the spouse and dependents would be paid regardless of intoxication. HB238 PASSED the House; waiting for assignment in Senate. SB553 waits for its first Committee hearing.
We SUPPORT HB250 Workers’ Comp Return to Work and Benefits (Crowder) – Clarifies that if a worker on either temporary total or permanent partial disability is offered employment by his current employer at or above his pre-injury pay rate and refuses to return to work, or is offered employment by a different employer at or above his pre-injury pay rate, or if the worker is terminated for misconduct connected with the employment, then the worker is not eligible for disability benefits. This bill solves the issues brought by the Supreme Court’s ruling in Hawkins v. McDonald’s. HB250 PASSED both House Committees; waiting to be scheduled on the House Floor.
We SUPPORT SB233 Temporary Disability Benefit Changes (Woods/C.Trujillo) – This bill clarifies the applicability of disability limits, which had not been clear in Statute. For years the practice of the Work Comp insurance industry has been to limit both Temporary Disability benefits and Permanent Partial Disability benefit payments to 700 weeks (approx. 13½ years). The Supreme Court ruling in Fowler v. Vista Care pointed out the inconsistency in Statute and altered industry practice by removing the limit. This uncertainty in how long a WC claim will be kept open means a huge potential for increased costs to employers and has sent a chill through work comp insurance companies. SB233 clarifies the Statute so that “temporary benefits” does NOT mean “lifetime benefits,” but limits a worker to the number of weeks stated in other sections of the Work Comp Act. Self-insured groups, such as state and municipal agencies, have joined business groups in stressing the importance of passage of this bill in order to keep Work Comp rates from getting out of control. PASSED both Senate Committees – has been on the Senate Agenda for a week, but they haven’t gotten to it. Construction Licensing
We SUPPORT HB367 Construction License Changes (Crowder) – This bill would fix three technical problems with the Construction Industries Licensing Act and add a requirement for a cost-benefit analysis to determine the economic development impact of code changes. The technical sections would 1.) Not leave the CID Director open to misdemeanor charges if a license approval denied by the Director were over-turned by the Commission; 2.) Make revocation of a contractor’s license permanent, instead of allowing a re-application after one year; and 3.) Clarify the Code Bond may only be “called” when RLD files a claim within two years after final inspection by the Authority Having Jurisdiction. This bill is also supported by RLD. Passed its first hearing.
February 27, 2015
We are monitoring SB549 Architecture Practice Without License (Griego) – This bill seeks to tighten up on those practicing architecture without a license. Construction projects for single-family homes and multi-family projects that are for four or fewer units are currently exempt from the Architectural Act. We are watching this bill so our exemptions remain. Passed its first hearing. Water Issues We are monitoring SB550 Regional Water Utility Authority Act (Griego) – This looks to be something of concern for developers. It would allow any two water companies who decide they want to merge to simply do so through a vote of their respective boards, following a public notice without a requirement that the proposal be put to a vote of the landowners within the water districts. A developer could find his land is suddenly within the service area of a water district that has a no-growth board. Scheduled for its first hearing on Monday.
We are monitoring SB647 Rules of Priority Administration of Water and SB648 State Engineer Powers & Duties (Cervantes) – These two bills contain the same concepts that have been introduced by Sen. Cervantes previously. Over the years NMHBA lobbyists have discussed the issue with former State Engineer, John D’Antonio, and supported his creation of the Active Water Resource Management (AWRM) rules that balanced the need for domestic water wells with the water rights of agricultural users. In November 2012 the NM Supreme Court issued an opinion that the State Engineer has the authority to administer water rights in areas where adjudications have not been completed, determine if domestic wells are appropriate, and in general supported the AWRM concept. SB647 would require rules adopted by the State Engineer to comply with Article 16 of NM Constitution concerning prior water rights; SB648 Attacks AWRM by removing authority for the State Engineer to administer water rights while those rights are waiting for adjudication, and not administering water rights if any one’s rights might be diminished by the State Engineer’s actions. Just introduced; both waiting for their first hearing.
We are monitoring SB665 Water Wells, Leases, Hearings & Abandonment (Griggs) – This bill is to broaden the water rights of municipalities, counties, school districts, state universities, member-owned community water systems, special water users’ associations, water and sanitation districts and public utilities supplying water to municipalities or counties. Current practice is for the State Engineer’s Office (SEO) to require a 40-year water plan, and any water rights purchased before the plan is approved by the SEO may be lost if not used. This bill would allow the use of a leased water right during the pendency of the hearing process for no more than 200 acre-feet of water for no longer than 3 years; allow the drilling of supplemental or replacement wells for the amount of water originally permitted to or declared by the water right owner providing that the non-use of water does not automatically result in the loss of water rights if unused for 40 years. Just introduced; waiting for its first hearing. Energy Credits It appears the following bills are waiting their fate to see if there’s money due to falling projections of state revenue:
We SUPPORT HB64 Home Energy & Water Efficiency Tax Credits (C. Trujillo) [Tabled].
We are monitoring HB113 Energy Efficiency Homes Tax Credits (Egolf) [Tabled].
We SUPPORT SB279 Sustainable Building Tax Credit (Wirth) — This version will extend the time for eligibility for the SBTC, lowers the amount of each tax credit, and adds water conservation to the energy savings in order to qualify for the credit. The new version would increase the total expenditure so that more projects (of lesser credits each) would be eligible. All of the SBTC allocations under the current program have been used up through 2016. Passed two Senate Committees and waits in Finance. Miscellaneous
s Right to Work bill that would eliminate the requirement that employees pay union fees in order to be employed. Was merged with the increase of minimum wage to $8.00/hr. NMHBA still supports the amended bill,
We are monitoring HB114 No False Statements to NMED (Egolf) – This bill would set penalties for falsifying data on forms presented to the Environment Department. This concept has been introduced for the past three years. Passed its first hearing.
We are monitoring HB188 & HB190 Sand, Gravel & Quarries in the Mining Act — Penalties (Smith) – The sand and gravel industry has previously been exempted from regulation under the Mining Act. HB190 would eliminate this exclusion, and HB188 sets penalties up to $1,000/day for violations of the Mining Act. Committee substitute for HB188 limits penalties to violations of County Ordinances on sand & gravel mining in just the counties of Bernalillo, Sandoval, Dona Ana, San Juan & Santa Fe. HB188 (as amended) passed its first House Committee; scheduled for its second on Monday. HB190 has not been scheduled, and may be unnecessary after the amendment of HB188.
We SUPPORT HB299 Public-Private Partnership Act (Larrañaga) The PPPA or “P3”, as amended, would allow state and local governments to enter into long-term agreements with private sector partners to facilitate public projects such as schools, hospitals, recreational facilities, parking lots, roads, habitat restoration, dams, water treatment facilities, pipelines, transmission lines, recycling facilities, etc. Capital outlay funds appropriated each year are not enough to keep up with the growing demand for repairs and replacement of infrastructure, buildings and building systems. Design and build maintenance projects generally offer faster delivery of the end product and ensure maintenance is performed throughout the life cycle of a project. This kind of partnership is able to use private financing to accomplish public projects, stretching tax dollars further. P3 is heavily promoted by the Albuquerque Chamber of Commerce and Associated General Contractors. Passed its first House Committee.
We are monitoring HB380 Homeowner Association Disclosure & Fees (Youngblood) – This bill removes the requirement for lot sellers to provide many of the documents that seem to be a problem, and limits to $150 the amount an HOA can charge to provide the documents. Scheduled for its first hearing on Monday.
We are monitoring HB551 Home Inspector Licensing Act (Baldonado) – This bill has been introduced in prior years. The sponsor has included language promoted by NMHBA that requires a disclaimer that no inspection was performed to identify potential code violations of state or local codes. Scheduled for its first hearing tomorrow (Yes, on Saturday).
We are monitoring SB677 Private Right of Action (McSorley) – This “dangerous” bill language has been introduced in the previous two 60-day Sessions. This bill would allow just about anyone to file a civil lawsuit against their neighbor, his contractor, or state if they are “injured in fact, economically or otherwise, or who is imminently threatened with injury, economically or otherwise” by a violation or even a failure to take action against someone for a violation of a variety of environmental laws, including the Clean Water Act. It would also allow these folks to join in an action of NMED or EPA against the accused violator (such as a contractor who violates stormwater regulations). It retains the 2013 change to exempt action against political subdivisions of the state, such as counties, cities, towns or villages. Just introduced; waiting for its first hearing.
The actual text of any bill may be found online at http://www.nmlegis.gov/lcs/. Click on “Legislation”, then “Bill Finder” on left side, click on “Number”, enter the bill number, and scroll down to the file. Call Melanie with any questions or for other information.
The Member Rebate Program, a free member benefit of our Local HBA, has a fantastic opportunity to recoup your HBA dues!
Do you supply or install any of the products from these Manufacturers in your addresses?
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The names have been drawn and this year there were eligible entrants from 7 Locals. Congratulations to the following winners of a free trip to the International Builders’ Show in Las Vegas in January 2015!
Central New Mexico – Paul Chavez (Valley Fence Company)
Eastern – Brian Baughman (Banister’s Air Conditioning)
Las Cruces – Lawrence Fierro (Fierro Enterprises, LLC)
Lincoln County – Joe Dan Ortiz (Live Wire Electric, LLC)
Otero County – Eugene Varbel (Wood Electric, Inc.)
San Juan – Ireke Cooper (Cooper Fire Protection Services Inc.)
Santa Fe Area – Rick Driscoll (Driscoll Construction Inc.)
Nancy Barron Office Manager New Mexico Home Builders Association 5931 Office Blvd NE, Ste. 1 Albuquerque, NM 87109 505-344-7072 505-344-3103 (fax)
Below is an editorial from this morning’s Albuquerque Journal concerning the status of the workers’ compensation system in New Mexico. This is an issue that affects all businesses in the state, and is one that NMHBA has been discussing with legislators around the state when delivering the political contributions from our political action fund.
— Melanie Lawton Government Affairs Director 5931 Office Blvd. NE #1 — Albuquerque, NM 87109 Ph. 505-344-7072 800-523-8421 www.nmhba.org
Editorial: NM Legislature needs to save workers’ comp, again
In September 1990, the Legislature convened for an important and productive special session to save the state’s workers’ compensation system by weaving together protections for employees and employers alike.
It only took 14 years for the courts to poke enough holes in the reform as to make it much less effective and ultimately unsustainable.
Albuquerque attorney Marshall Martin pointed out in his column, Marshall’s Law, published in Monday’s Business Outlook, that recent rulings from the New Mexico Supreme Court and Court of Appeals mean:
• There is no cap on “temporary total disability.”
• A temporarily disabled worker who is accommodated with a different job and then fired for cause can then resume temporary and later permanent benefits.
• An undocumented worker can get full benefits when he/she doesn’t return to work after recovering from an injury because his/her immigration status precludes working legally in the country.
• A retired union employee receiving a pension can get permanent benefits for not returning to work at his unionized employer because doing so would affect pension payments.
It gets worse. The system forces an employer to take full responsibility for disability benefits for workers whose drug or alcohol abuse contributed to their work-related accident and to pay benefits to convicted criminals while they are in prison. The growing problem of pain medication abuse has been ignored.
Meanwhile, a court ruling this May has an employer and its insurer paying for medical marijuana for a worker who suffered a job-related back injury and can no longer work due to a permanent partial disability.
It should come as no surprise that all this is showing up in higher costs at a time the employers are struggling to stay afloat.
Builders Trust of New Mexico – a self-insurance fund that provides workers’ compensation for the construction industry – points out that “workers’ compensation insurance premiums for New Mexico are increasing 4 percent for 2014. This is the sixth-highest increase in the nation. Premiums are decreasing for 19 states at the same time. The cost of insurance is driven by the cost of claims, and our claim frequency is 20 percent higher than the national average.”
To bottom line it: Higher payouts mean higher premiums, and higher premiums mean more businesses shut their doors, others decide not to locate here while others trim their payrolls.
It’s hard to believe this is what state lawmakers had in mind 14 years ago when they put their lives on hold and headed to the Roundhouse to fashion a better system to protect both injured workers and the employers paying their benefits.
New Mexico’s citizen legislators – folks who run businesses, work for businesses and have taken it upon themselves to do the public’s business – were able to find common ground on workers’ comp in September 1990. It’s important for them to do that again if we want more people working in a more vibrant economy.