Bill Ward, Executive Vice President, HBAI
State Legislature Quick to Kill Bills
Every Illinois General Assembly has its own personality, something that makes it unique from other legislative sessions. The 99th Illinois G.A. (2015-16) seems to have been a heavy weight boxing match. Not much happened in the early or even middle rounds, as the contestants saved their strength for the big ending. We’ve now gone beyond regulation and everyone in the ring is still standing, ready to fight more rounds this summer.
The Home Builders Association of Illinois stayed off the ropes in its matches and scored some points against further state regulation. Fortunately for us, there were no late-round cheap shots and we are still in the ring.
The 2015 Illinois Energy Conservation Code moved down a weight class over the 2012 edition; so did the Employees Classification Act where contractors will now have until April 30th of each year to report independent contractors to the Illinois Dept. of Labor; a bill to mandate Green Building Standards is out cold; a bill to allow law enforcement to seize your vehicle without warrant received a technical knockout; and the licensure of interior designers was laid to rest.
Builders will find the 2015 Energy Conservation Code to be similar to the 2012 code. The International Code Council put the brakes on the number of changes made in the code which resulted in the amount of money needed to upgrade to those levels. The 2009 and 2012 code combined, added about $16,000 to the cost of a new home built in Illinois. The 2015 code may result in no further cost increases over 2012.
After a tough fight with state agency consultants and administrators, HBAI won two big changes to the 2015 code. With approval from the Joint Committee on Administrative Rules (JCAR), builders will be allowed to use a third option for testing homes in 2016. The Home Energy Rating System (HERS) rating system provides an Energy Rating Index to be used as a compliance standard. The rating system is helpful to home buyers as it gives a rating number like those found on home appliances. It is the only rating system that does so.
Home builders will have two options to insulate basement walls. After a hard battle with officials from the Dept. of Commerce and Economic Opportunity over a method that was easier to construct but more expensive, and one that was considered the opposite; HBAI offered the idea of placing both methods in the code which would then be chosen by the builder. DCEO opposed the option but the Ill. Energy Conservation Advisory Council (IECAC) went with HBAI on the matter.
JCAR should address the rulemaking this summer, and the new code will be in place on January 1, 2016. A big Home Builder tip of the hat goes to Jason Huelsman and Allen Drewes, both representatives for HBAI on the IECAC. Jason is a builder from Greater Southwest Illinois HBA, and is on the HBAI Board of Directors. Allen is a member of Northern Illinois HBA, and is Treasurer for HBAI.
ECA Reporting Changes
HBAI initiated changes to the Employee Classification Act that will help builders with the Employee Classification Act. SB993, sponsored by State Senator Kyle McCarter (R-Vandalia) and Representative Dwight Kay (R-Edwardsville), changes the deadline for reporting independent contractors, from January 31, to April 30th of each year. The bill also requires all reports to be made electronically using the template provided by the Dept. of Labor or by sending written reports by pdf. SB993 passed both houses and will be sent to the Governor later this month.
AFL-CIO opposed language requested by HBAI that would create one set of standards for determining employee status; and would also clarify that limited liability companies are independent contractors. House and Senate Democratic majorities sided with labor, not surprisingly.
Vehicle Seizure Home Repair Fraud
HBAI opposed legislation allowing law enforcement officials to unilaterally seize a vehicle belonging to someone they believe has committed home repair fraud. Senator Jason Barickman (R-Bloomington) held his own bill from consideration on the Senate floor after conferring with HBAI members on our Lobby Day in April.
SB1322 would allow individual police officers to make judgement calls that are currently reserved for judges to issue. A police officer seizing a repair truck could impound that vehicle for over a month while the State’s Attorney and local judge determine the justification for seizure. Current law allows this type of seizure for manslaughter, human trafficking, and about 60 other extremely serious felonies.
HBAI and Senator Barickman will discuss in the coming months, legislation allowing this law enforcement tool during times of natural disasters, such as a tornado. We thank him for reconsidering this initiative at this time.
Mandatory Green Building Standards
HB3541, sponsored by State Representative Emily McAsey (D-Romeoville), would have mandated the Green Building Standards for all new construction in Illinois. NAHB estimated the bill would raise construction costs in Illinois in the tens of thousands of dollars and Illinois would have been the first state to have a fully mandated Green Building Standards mandate. The bill was initiated by the American Institute of Architects, Illinois, and supported by several environmental groups. The Illinois Association of Realtors joined HBAI in opposing the bill.
The bill exempted single-family and two-family residential construction, but was being amended to current law that imposes the Energy Conservation Code onto all residential construction. Chances were 50/50 that the exemption would stick.
HBAI reminded legislators on Lobby Day that Illinois is still #50 in home starts per capita nationwide, a statistic seemingly lost on a majority of state legislators.
Fortunately for us and future home buyers, language in the bill pitted the International Laborers Union against the Plumbers & Pipefitters. Never one to make his caucus choose between labor unions, Speaker Madigan directed House Labor Chair, Jay Hoffman (D-Collinsville) to hold the bill until the labor dispute was resolved. That never occurred and the bill died for lack of consideration in committee.
Interior Design Practice Act
For the second time in four years, HBAI has opposed and defeated the licensure of Interior Designers in Illinois. Even though proponents attempted to exempt residential, we did not trust their language and believed the exemption would be short-lived.
HBAI Past President, Mike Nagel, lead the charge to oppose the bill. SB1270, sponsored by Senator Kim Lightford (D-Westchester), contained vague exemptions for remodeling and for multi-family housing. HBAI offered an all-out exemption for all residential work (new and remodeling, single family and multi-family) but that exemption was rejected in negotiations with the proponents; the Illinois Interior Design Coalition.
On Lobby Day, HBAI issued four bullet points of opposition to SB1270:
- There is no public outcry for this Act;
- 47 states do not currently require this level of certification for this trade;
- Fewer certified designers qualified to practice in Illinois will raise fees; and,
- The exemption offered is not acceptable nor will it last long.
The following groups joined HBAI in opposing the measure: Ill. Retail Merchants, American Institute of Architects, and the National Kitchen & Bath Association.
Senator Iris Martinez (D-Chicago), Chair of the Senate Committee on Licensed Activities, ruled that no bill would go forward without advanced agreement amongst the stakeholders. The bill was negotiated for several weeks. A hearing was held very late in session, but the bill was never called for a vote.
Bonding over Lien Rights
Legislation allowing property to be transferred, even though liens have been placed on the property, has passed in the House and Senate. HB2635, sponsored by Rep. Ron Sandack (R-Downers Grove) and Senator Don Harmon (D-Oak Park), will allow property owners to purchase a surety bond to insure payment of any qualified outstanding liens on the property. Every state but Illinois allows this practice in some form or another; HB2635 will make Illinois the last state to do so.
HBAI opposed the measure for most of the Spring Session, although a number of our members would benefit from the passage of HB2635. Thankfully, negotiations between us, the Illinois Land Title Association, and the Illinois Bar Association, proved fruitful and the proponents agreed to place additional protections in the bill for Illinois contractors and their employees.
These changes include:
- The bond must be A-rated and must insure the land and its improvements for 175% of the value of the project;
- If the owner pays off in the first five months, a dollar for dollar reduction will be made on the bond;
- A contractor receiving 75% or more of his/her claim will have attorney’s fees paid by the landowner;
- A landowner losing 25% or less of a claim will have his/her attorney’s fees paid by the claimant.
A special thank you goes to attorney John Cooney, a member of Northern Illinois HBA, for negotiating our position on the bill. HB2635 passed both Houses on the last day of session.
The above bills were all part of our HBAI Lobby Day initiative held on April 14, 2015. Members traveling to Springfield that day can all rightly claim that they and their association did well for their industry that day. Thank You for your help and understanding of these difficult matters.
I want to thank NAHB staff who provided expert and in-depth advice that no other source in the country can provide.
I also want to thank every HBAI Board Member and Local Executive who participated in our weekly Legislative Conference Calls. This report might be quite different without your guidance and advice.
Next week we will send you a bullet report of these bills and a dozen more that we worked on during this year’s spring session. Use this for inclusion in your local association newsletter, and for recruiting new members and retaining current ones.
Hope to see you later this week at the NAHB Spring Board Meetings being held in Washington, D.C.