Posts Tagged ‘SB 6035’

Washington Wax Political: BIAW Proposals Include Killing Warranty Legislation

Rarely do we attempt to “wax political” on pressing legislative issues. So, again we will keep most of our opinion to ourselves and let the BIAW, the Building Association of Washington, do our reporting for us.

The Building Association of Washington is a Washington State Non-Profit Corporation formed back in 1966 to provide assistance to building industry companies who find difficulty uniting to fight government interests to regulate their trades. The BIAW provides more information about its services online and its mission statement is as follows:

The Building Industry Association of Washington is the voice of the housing industry in the state of Washington. The association is dedicated to ensuring and enhancing the vitality of the building industry for the benefit of its members and the housing needs of the citizens.

To accomplish this purpose, the association’s primary focus is to educate, influence and affect the legislative, regulatory, judicial and executive agencies of Washington’s government. The Building Industry Association of Washington will offer its membership those services which can best be provided on a state wide basis and will disseminate information concerning the building industry to all association members and the public.

Now that we have fully disclosed their interests – your business’s interests – it will be easy to see why they so staunchly oppose several pending initiatives before the Legislature.

In a recent newsletter, which you can receive with membership, the BIAW expresses special concern with two specific initiatives.

HB 1393 – Mandated Warranties

The first of these initiatives will hit most of you the hardest. On March 11, 2009, the WA House of Representatives passed Rep. Larry Springer’s (D-Kirkland) new home warranty bill, HB 1393. In short, the bill strives to mandate a new home warranty for all new residences, something that Washington state builders have been able to avoid in the past.

Unlike other states which follow the FHA model new home warranties, WA has stayed away from passing legislation in the past which would mandate such warranties.

The BIAW stresses several reasons why the bill is simply – a bad idea.

1) The warranties must be back backed by insurance which is not available -

Simply put, the bill mandates warranties which must be backed by an insurance policy. Unfortunately, the insurance “product” is not available, and when made available, the costs will render projects impracticable or severely costly. The fear is that many good subcontractors will go under as a result of such a mandate.

BIAW General Counsel, Timonthy Harris, states:

“Its not as simple as requiring builders to purchase an already-available warranty product”

“This isn’t a warranty bill as much as it is a new and easier way to sue builders.”

2) The bill prohibits waiving the implied warranty of habitability -

Similar to the above, the concern is that the bill merely seeks to make consumer-based litigation more simple and easy. BIAW believes that the effect will simply put businesses out of work, limit the pool of contractors, reduce competition, and force unprecedented costs on the homeowner.

The BIAW pledges to fight the bill as it goes before the Senate later this month.

SB 5895 – Mandated Inspections and Bonding Increase

Another bill seeks to impose harsher requirements on contractors. The bill was introduced in the Senate as SB 5895 by Sen. Rodney Tom. In short, the bill seeks to impose “condo-like” warranties on all new homes, mandating third-party inspections prior to closing.

One of the issues that might keep contractors on the fence is the provision to double the contractor bond from $12,000.00 to $24,000.00. Though this raise undoubtedly costs the general contractor additional bond premiums, other contractors – subcontractors and suppliers on jobs – would likely be willing to support such a proposal.

In a time where collecting against defunct general contractors has become difficult and costly, subcontractors have been left to fight over the measly $12,000.00 bond that general contractors must post with Labor & Industries. Mandating a larger bond would provide additional security to contractors who are reluctant to provide labor on larger jobs.

Regardless, the BIAW is more concerned with fighting the costs that are imposed upon contractors in general, and the fact that this proposal is lumped with additional warranty demands makes this bill a target of the BIAW.

SB 6035 – Reto-bution Bill

This bill has been discussed for quite some time. The lingering has provided enough time so that BIAW could put together its defense of this bill.

In short, SB 6035 has been termed “retro-bution’ because it seeks to force retrospective ratings programs – such as the one provided by BIAW – to disgorge refunds received from the State of Washington to employers. You can read more about how the retrospective programs work at the Northwest Progressive Institute, who provides a different perspective.

SB 6035 has been termed retrobution against BIAW and the Master Builder’s Association (MBA), who each supported Gov. candidate Dino Rossi during the past governor’s election.

The funds remaining after refunds are paid to employers are held by the program associations – like BIAW and MBA – to be used as they please. In the past, these funds were used by the organizations to support candidates like Rossi, in their election bids.

It is now alleged by both MBA and BIAW that this bill is simply a democratic party’s attempt to restrict the organization’s right to free speech, by limiting political contributions and political speech.

Stay tuned for more information and reporting on these battles in Olympia. The BIAW certainly does not intend to back down from protecting its ability to help contractors in Washington state.

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