Montana Home Experts - Fall 2017

FA L L 2 017

MONTANA HOME

Experts A MAGAZINE FOR MBIA MEMBERS

STEVE KEASTER:

Craftsman.

Perfectionist.

Watchdog.

INDUSTRY NEWS

+ Water Rights Permitting 101 + Innovative Products + Navigating Compliance Paths in Montana’s Energy Codes + Legislative Wrapup MEMBER NEWS

+ Executive Director Message + Nancy Rae Retires as MBIA Business Manager + Association Standouts

2

FALL 2017

MONTANA HOME

Experts

| FALL 2017

“ I feel fortunate to be able to give back to the industry that has been so good to me.

I just thank the good Lord that he gave me the opportunity to do this.”

STEVE KEASTER / KEASTER CONSTRUCTION

04 From the President

Welcome from 2017-2018 MBIA President Greg McCall as we bring you the Fall 2017 issue of Montana Home Experts magazine.

07 Q&A: Water Rights Permitting 101

Millie Heffner, DNRC Water Rights Bureau Chief, provides a comprehensive guide to getting a permitted well.

10 Steve Keaster

Success has come to the owner of Keaster Construction through hard work, passion, and a commitment to his clients, as well as to this industry that he loves.

14 Innovative Building Products

20 Nancy Rae Retires

16 From the Executive Director: Steve Snezek

22 Association Standouts

Check out the latest and greatest products that will make your home stunning, your life simpler, or both!

MBIA’s ED reflects on the past year and discusses the unique challenges of 2017-18.

18 Navigating Compliance Paths in Montana’s Energy Codes One challenge that awaits builders is choosing the appropriate compliance path.

We reflect as she gracefully exits her role as business manager for the association after nearly 20 years of service.

Our members make us proud. See who we’re highlighting this issue.

25 Legislative Wrapup

MBIA’S largely successful session included work on water, subdivisions, storm damage, works compensation, gas tax, and TIFs.

30 The Value of NAHB See some of 2016’s advocacy victories.

“No modernization of technology can accomplish what we do collectively as an industry. To be responsible, in any small way, for creating a place we can call home, is a noble calling, one that I am glad to be a part of.”

GREG McCALL / MBIA PRESIDENT MONTANA HOME EXPERTS

3

WELCOME |

FROM THE PRESIDENT A PUBLICATION OF

1717 11th Ave / Helena, Montana 406.442.4479 www.montanabia.com

ON THE COVER

Steve Keaster Keaster Construction

Photo by Wandering Albatross Photography

DESIGN BY

1131 Poplar St / Helena, Montana www.edgemarketingdesign.com

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FALL 2017

MBIA Continues Empowering and Building Community I would like to thank our current state board of directors for giving me the opportunity to serve this year as the president of the Montana Building Industry Association.

I look forward to the many meetings we will have this year, and the opportunities to serve together to improve the current conditions of our state and local building industry. Thank you also to past president Spencer Woith. Spencer, I’m glad it was your turn at the helm during the legislative session.

First, I would be remiss if I did not begin this letter by expressing my sincere appreciation for Nancy Rae, and all of the years she has worked to support our state building community. Further, I would like to thank her for her personal friendship, which I know she has offered to so many of our members. There are few people I have met who have so tirelessly worked behind the scenes, sometimes without the praise that is deserved, and who can always bring a smile to a meeting, or a laugh to lighten the mood. Nancy you will always be a friend to the MBIA, and we will all miss you.

Second, I would like to welcome Phoebe Williams, who I recently met at our summer board meeting in Missoula (which was outstanding, thank you Missoula and Katie for those great Pig Races). It would appear that Steve has made an excellent hire in Phoebe, who has hit the ground running and does not seem to have missed a beat...including reminding me no less than three times to get this letter written. Welcome aboard Phoebe.

Last year was an interesting year filled with trials and successes. The 2017 Legislative Session presented many of those successes and of course, most everyone is aware, our one big loss in the veto of House Bill 339, sponsored by Representative Carl Glimm, our immediate past president. Thank you Carl for serving in our legislature and for your tireless efforts to support our industry and the members of this association. Your leadership and steadfast work ethic is invaluable to this association. Lastly, we need to thank our new Executive Officer, Steve Snezek and our lobbyist, Abby St. Lawrence. This dynamic duo gave this legislative session all of their combined efforts on this industry’s behalf. Thank you both for your fine service.

As we look forward to the fall of 2017, and the beginning of a new year in 2018, I am reminded of the fundamental, grass roots importance of what this industry does. I hope that most of us would agree that our work is more than just a paycheck. As I often share with our team at McCall Homes, we get to be a part of something so much bigger. We provide jobs, we provide dignity and shelter in the homes we build. Most all of us work in some way to create something of meaning, whether that is providing a service to this industry, building a countertop, plumbing a bathroom, or putting a roof over a family’s head. Truly we are, each one of us, trying to make this world a little better place everyday by empowering one another and building community. I’d like to invite each one of you, you who took the time to read this letter, to remember that simple reality.

No modernization of technology can accomplish what we do collectively as an industry. To be responsible, in any small way, for creating a place we can call home, is a noble calling, one that I am glad to be a part of. I wish each of you a wonderful year.

Thank you,

GREG McCALL, MBIA PRESIDENT

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EXPERT ADVICE |

Q&A

What is the process for getting a permitted well? What are the steps?

How long will it take, how much will it cost, and who can help me? –Derrick, Great Falls MILLIE HEFFNER

DEPARTMENT OF NATURAL RESOURCES Water Rights Bureau Chief

Many Montanans use exempt wells for small, discrete uses of water such as domestic, lawn and garden, and watering stock.

An exempt well is a well that is exempt from the permitting process. It is a well that uses 35 gallons per minute or less up to 10 acre-feet (AF) per year.

When the use of water out of a single well or a combination of multiple wells within a project exceeds 10 AF per year, a Beneficial Water Use Permit is required. If a Permit is required, it must be issued by DNRC prior to commencing any diversion or use of water.

What is the process for getting a permitted well? What are the steps?

The Department of Natural Resources and Conservation authorizes Beneficial Water Use Permits. The first step the department strongly recommends is that you meet with us to talk about your proposed project. We want your application as good as it can be when you submit it to us.

During this meeting we will talk about your project, walk through the application process, and answer any questions about the requirements. This is what the department refers to as a preapplication meeting. The more comprehensive and direct an application is, the smoother the process will be.

After you have become familiar with the requirements and gathered any information that is needed, you can start to prepare your Beneficial Water Use Permit application. All the forms you need are available on DNRC’s website at http://dnrc. mt.gov/divisions/water/waterrights along with a number of helpful resources.

As part of the application, you will need to provide information on whether the water is physically available. For surface water applications, this could include flow measurements of the source. For groundwater applications, this includes aquifer test results. The aquifer test is used to determine whether your well is capable of pumping at the rate that is requested in the application throughout the period of diversion. It is also used to determine the properties of the aquifer which is required for the department to determine if water is legally available in the aquifer.

You will also need to provide a detailed description of your plan to ensure that existing water rights will be satisfied during times of water shortage.

This plan could be as simple as stopping your use or it may need to be more complex. If your proposed project is in a closed basin, your plan will most likely need to include mitigation. For example, if pumping the well will deplete a surface water source to the detriment of an existing surface water right, your plan will need to replace that water

so that the surface water right remains whole. You could do this by retiring historic irrigated acres and putting that water into an infiltration gallery so that the water goes back to the surface water source at the same location and during the same time as your depletions.

Additionally, you will need to provide information about your diversion means and operation. You will need to describe how you will operate your system from the point of diversion to your place of use.

You will also need to provide a description and design plans for the proposed diversion and conveyance facilities. Your application will need to include information addressing why the requested flow rate and volume is needed for each purpose. You will need time to complete your project must include a proposed completion timeline.

Once you have all of the information completed as requested on the form, you will submit it to us so that we can begin processing your application. The department will review your application to make sure that it is correct and complete. Correct and complete means that the application has all the information requested and that the information provided is substantial and credible. Your application needs to be correct and complete before the department can begin analyzing it to determine if it meets the necessary criteria.

Ultimately, the department may grant your application only if it meets the required criteria by a preponderance of the evidence. The criteria we use are defined in statute (§ 85-2-311, MCA). These criteria are physical availability, legal availability, lack of adverse effect to existing water users, adequacy of diversion, beneficial use, and possessory interest.

The department will use the information you submitted with your application, along with additional information the department has within its knowledge, to make a determination about whether the criteria have been met.

The department will draft a Preliminary Determination Document that will include all of our findings and conclusions.

Your application may be granted, in modified form, or denied.

If the department determines to grant your application, it will proceed to public notice.

If the department determines to grant your application in a modified form (i.e. something less than what was applied for), we will send you a draft so you can see what we found. We can then discuss the findings and provide you with an opportunity to come forward with additional information if you wish.

CONTINUED ON PAGE 8

MONTANA HOME EXPERTS

7

| EXPERT ADVICE If your application is modified, you will be provided with an opportunity for a hearing to show why the department should grant your full requested amount. If you choose not to request a hearing, we will publicly notice your application.

If you choose to request a hearing, we will publicly notice your application based on the outcome of the hearing. We will also send you a draft of the document if your application is denied so that we can discuss the findings and provide you an opportunity to come forward with additional information. If after that the determination is still to deny, your application will proceed to a hearing so that you have an opportunity to show how the department erred in its determination. If the hearings examiner decides the application should be granted, it will proceed to public notice.

Public notice provides existing water right holders within the potentially affected area with the opportunity to see what you are planning.

If there are no objections, the department will issue a Beneficial Water Use Permit. If any existing water right holders or other interested parties think that the criteria have not been met, they can object to your application during the notice period. The department will review the objection(s) to see if the objector(s) has standing to object and whether they have provided facts on the specific criteria to which they are objecting. If the objection(s) is deemed valid, a hearing will be scheduled.

The hearing provides an opportunity to the objector to provide additional information on the specific criteria on which they had a valid objection.

The hearings examiner will weigh the evidence and determine whether to uphold the department’s decision or overturn it and deny the application.

Any decision made as a result of a hearing may be appealed.

The appeal may be made to the District Court, the First Judicial Court, or in some circumstances the Montana Water Court.

How long will it take to get the permit, and what will the cost be?

The department has specific statutory timelines that it must meet for processing 8

FALL 2017

PERMIT APPLICATION FLOW CHART

PRE-APPLICATION REVIEW • Meet with Applicant to discuss the proposed project • Complete Pre-Application Checklist

1. RECEIVE APPLICATION - Application Acceptance criteria within 5 days of app. receipt.

• Fee paid • Name/address of applicant, source of water supply, point of diversion, means of diversion, period of approp., place of use, purpose of use, place of storage, flow rate, volume, contact person, etc.

• GW apps: minimum info and ATR addendum, if applicable • Maps and signature

2. CORRECT & COMPLETE REVIEW Within 180 days review is to determine if all the information is adequate to begin evaluation

•

5. CORRECT & COMPLETE

3. NOT CORRECT & COMPLETE TO PROCESS • Send standard deficiency letter

4. NOT ADEQUATE DEFICIENCY RESPONSE - TERMINATE

8. PRELIMINARY DETERMINATION TO DENY/GRANT MODIFICATIONS – HEARING SCHEDULED

6. PREPARE DRAFT PRELIMINARY DETERMINATION (DPD) AND MEET WITH APPLICANT • Draft DPD to grant, deny or grant with modifications • Send DPD to deny or DPD to grant with modifications to Applicant

7. ISSUE PRELIMINARY DETERMINATION TO GRANT • Must be within 120 days of Correct & Complete

10. DENY 9. GRANT/GRANT WITH MODIFICATIONS 11. APPEAL TO DISTRICT, FIRST JUDICIAL, OR WATER COURT • If court reverses the Dept decision, then the application goes to public notice

12. PUBLIC NOTICE

13. NO VALID OBJECTIONS RECEIVED Issue Final Order • Issue permit •

applications. We have 180 days from submittal of the application to notify the applicant if there are any deficiencies in the application. If there are no deficiencies or once any deficiencies have been remedied, the department will deem the application correct and complete. Once it has been deemed correct and complete, the department has 120 days to complete a Preliminary Determination Document. If the application proceeds to public notice, the application is noticed for no less than 15 days but no more than 60 days. The department typically notices applications for 45 days.

On average, it takes about 10 months to issue a permit. This timeline may be shortened or extended based upon the quality and complexity of the application, staff availability, responsiveness of the applicant, and if a hearing is held on the application.

The cost to submit an application is $1000 if it is

14. VALID OBJECTIONS RECEIVED – HEARING SCHEDULED

inside a closed basin, controlled groundwater area, or compact closure. The cost to submit an application outside of a closed basin, controlled groundwater area, or compact closure is $800. If you participate in a preapplication meeting and submit your application within six months of the meeting, the filing fee is reduced by $200. Outside of the application fee, the costs are highly variable depending on whether you hire a consultant and/or an attorney.

Where can I go for help?

DNRC staff members are happy to help you at any stage of the permitting process. The best place to start is at your local regional office. There are eight offices located across the state.

Billings: (406) 247-4415 serving Big Horn, Carbon, Carter, Custer, Fallon, Powder River, Prairie, Rosebud, Stillwater, Sweet Grass, Treasure, and Yellowstone Counties

15. DENY/GRANT Issue Final Order • Either side can appeal •

Bozeman: (406) 586-3136 serving Gallatin, Madison, and Park Counties Glasgow: (406) 228-2561 serving Daniels, Dawson, Garfield, McCone, Phillips, Richland, Roosevelt, Sheridan, Valley, and Wibaux Counties Havre: (406) 265-5516 serving Blaine, Choteau, Glacier, Hill, Liberty, Pondera, Teton, and Toole Counties Helena: (406) 444-6999 serving Beaverhead, Broadwater, Deer Lodge, Jefferson, Lewis & Clark, Powell, and Silver Bow Counties Kalispell: (406) 752-2288 serving Flathead, Lake, Lincoln, and Sanders Counties Lewistown: (406) 538-7459 serving Cascade, Fergus, Golden Valley, Judith Basin, Meagher, Musselshell, Petroleum, and Wheatland Counties Missoula: (406) 721-4284 serving Granite, Mineral, Missoula, and Ravalli Counties

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9

C Perfe

MOVERS+SHAKERS |

STEVE KEASTER:

Craftsman. ectionist.

Watchdog.

By Lacey Middlestead Feature Photos by Wandering Albatross Photography

Rising up from the tall grass near the banks of the Missouri River is a castle style home that stands out boldly against the Montana landscape. With a dramatic turret-style entry, stone walls, and balconies, the house is a unique piece of craftsmanship. When Steve Keaster, owner of Keaster Construction, thinks back over his 41 years in the home building industry, the creation of this castle house is one of the projects that still makes him smile.

Keaster officially started his own company, Keaster Construction, in 1976. While he started out building smaller homes in the Belt and Great Falls area, he has gradually transitioned into the custom home business. By working hard, Keaster has earned himself the reputation as the guy to call when someone wants a large, quality home built. Keaster explained that most of his clients come to him already knowing what they want and often with plans already drawn up by an architect. His job is to then breathe life into those plans.

“The unique thing about building custom homes is that each house is different and you’re still always learning something new…there’s always something different,” said Keaster.

The castle-style home was a unique challenge for Keaster and certainly strayed from the more rustic style of homes he personally prefers with elements like recycled boards, plank siding and high cathedral ceilings. Regardless of the design, Keaster admits that he is a perfectionist and will put his all into every building project. >

MONTANA HOME EXPERTS

11

| MOVERS+SHAKERS

“As the saying goes ‘every job is a selfportrait of the person who did it…autograph your work with excellence,’” said Keaster.

With only about four or five other men working on the Keaster Construction crew, the group is close knit and always held to Keaster’s high standards. According to John Harding, a longtime friend, Keaster is “hard-nosed” when it comes to the details and quality of his homes and he heavily scrutinizes everything.

“He’s always been a craftsman at his trade,” said Harding. “He’s going to provide the best product that he possibly can.”

While Keaster takes pride in the creation of each of his homes, his greatest joy comes from giving his clients a memorable building experience.

“I really like to work with people,” said Keaster. “I want to make the experience a good one for them. You hear horror stories of other people’s experiences with builders but it shouldn’t be that way.”

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FALL 2017

Castle Photo: Amy Coe

Over the years, Keaster has learned just how critical good communication is in building and maintaining solid relationships with the people he works with.

“I’m always communicating with my clients,” said Keaster. “I make sure everything is right up front with them and that there are no secrets.”

And after you work with Keaster once, you’re a client forever. His clients know he won’t just disappear once the last nail is pounded or final bathroom tile laid. For instance, Keaster has been working with one particular family for the last 15 years on different building projects. Whether it’s roofing or siding, home additions or remodeling, Keaster is dedicated to the life of his houses as well as the families that turn them into homes.

“He has a lifelong commitment to clients and their homes,” said Katie Hanning, executive director of the Great Falls Home Builders Association.

Keaster’s commitment as a builder extends well beyond his homes and clients too. It also includes the building industry and all of the individuals involved. For the past 28 years, Keaster has been an active member in home building associations at local, state and national levels. In 2014 he was even awarded a lifetime director award

for his service to the National Association of Home Builders. His work in these associations is all about advocacy for the home building industry. From bankers, realtors, builders and beyond, Keaster works tirelessly to ensure that everyone is being treated fairly, prices are kept down and that bills being passed will be to the overall benefit of the industry.

“He’s been the driving force of local and state home building associations,” said Hanning. “He and the other association members have made sure the building industry remains a viable trade and is not overly regulated.”

A few weeks ago, Keaster traveled to Washington DC with several other members of the Montana Building Industry Association to discuss local issues with U.S. congressman.

“He gives so much of his own time to our industry and he’s not paid to do it,” said Hanning. “He makes sure everyone

is getting treated fairly. He’s a watchdog.

Without him and what he does, who knows what would happen to the industry.”

What motivates Keaster to be so involved? Harding explained that it is largely due to Keaster’s belief that everyone in the industry owes some time and effort into keeping it strong. Keaster himself shared that a lot of people that are not members yet with their local building association want to know what they will get out of the annual fee first.

“It’s not what you get back but what you give back to your own industry,” explained Keaster.

For Keaster, his involvement in multiple levels of home building associations has been a way to give back to his industry and network with others who share the same kind of passion and commitment for their industry.

“I feel fortunate to be able to give back to the industry that has been so good to me,” said Keaster. “I just thank the good Lord that he gave me the opportunity to do this.”

“ As the saying goes ‘every job is a self-portrait of the person who did it… autograph your work with excellence.”

STEVE KEASTER

MONTANA HOME EXPERTS

13

| TRENDING

INNOVATIVE BUILDING PRODUCTS

Check out the latest and greatest products that will make your home stunning, your life simpler, or both!

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AquaBoy® Pro II This luxury appliance draws in air through the HEPA air filter. Water vapor in the air makes contact with stainless steel coils and condensation occurs, generating water that then goes through the remainder of the 7-stage EZ-Filter™ process producing up to 2 to 5 gallons of “purified great tasting water™” per day with no chlorine, fluoride, lead, or other harmful ingredients.

SIDING Boral TruExterior® Siding’s Bevel Profile The Bevel Profile is the newest addition to Boral TruExterior® Siding – the first manmade siding profiles to genuinely replicate the natural aesthetic of real wood while maintaining a high level of dimensional stability.

Recreating the look and character of traditional clapboard or beveled lap siding, Boral TruExterior® Siding’s Bevel Profile offers the true taper and shadow line effect historically seen with cedar and redwood siding, without the moisture-related issues that commonly plague wood.

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FALL 2017

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Brinks Array™ Deadbolt Brink’s Home Security introduces the Array,™ a technologically advanced, cloud- and app-enabled digital door lock that can be installed without adding separate hubs or accessories, making it one of the most consumer-friendly Smart Home lock products available.

By including a highly efficient, proprietary power system, Array™ allows consumers to use their existing Wi-Fi routers to connect the deadbolt to the cloud, providing a “security simplified” solution for homeowners looking to upgrade from traditional deadbolts. Array™ allows the owner or authorized users to enter the home three ways: via smartphone, discretely hidden touch pad, or a traditional metal key.

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KITCHEN Thermador Built-in Fully Automatic Coffee Machine This completely programmable coffeehousestyle machine is the ultimate luxury to start or end the day, preparing up to 10 different beverages – from a single shot espresso, to tea, to extra-large venti cappuccinos. Home entertainers will appreciate storage of up to eight unique beverage creations, as well as dual spouts to brew two identical beverages at once.

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ecobee4 Smart WiFi Thermostat With a room sensor and built-in Amazon Alexa Voice Service, this is your answer to a smarter home. It can listen to your voice commands and respond. Have it set a timer, read you the news, adjust the temperature, and more. It also comes with a room sensor that helps manage hot and cold spots in your home, delivering comfort in the rooms that matter. And because they can detect occupancy, they can automatically enable the right mode on your ecobee4 for energy savings when it senses no one is home. Free energy reports show you how much energy you’ve conserved each month and provide insight into your heating and cooling equipment.

MONTANA HOME EXPERTS

15

| FROM THE EXECUTIVE DIRECTOR

EXCITING CHANGES & UNIQUE CHALLENGES AHEAD

By Steve Snezek MBIA Executive Director

It has been a great year serving as your Executive Director.

From the very successful Legislative Session, to the Governor’s Race last fall, the Special Election for Congress, our long-time and deeply appreciated Business Manager leaving (Nancy Rae), our hiring a new Business Manager and Communications Director (Phoebe Williams), and our establishing a new member feature of an attorney to serve the MBIA’s and your legal needs...it has been a fantastic first year.

As we move into our next fiscal year, membership looks to be holding steady at around 1550 active members. As you’ll recall, membership numbers were up in the several thousands prior to 2008, but dipped down to around 1200 during the slump. More recently, we have rebounded to a consistent 1550 members and appear to be on track to maintain that number.

2017-2018 will hold some unique challenges. The new building codes have been ratified at the national level, and the Montana Building Codes Department will be looking to implement these new codes in 2018. They have said that they will be holding a series of public meetings on the new codes starting in the fall. We will keep 16

FALL 2017

you updated on the status of these public hearings, and will be asking you to attend and voice your opinion on them when they come to your area.

The Legal Issues Committee was established for the purpose of supporting or opposing legal issues that impact housing in Montana under Montana law. MBIA has an attorney on retainer who can provide 15 hours per month of legal opinions and support. MBIA understands that NAHB has attorney resources dedicated to helping with legal issues.

This Legal Issues Committee is to specifically help with issues pertinent to Montana law. In order to manage those 15 hours, a Legal Issues Committee has also been formed and consists of the MBIA President, 1st Vice President, 2nd Vice President, and Immediate Past President.

As mentioned earlier, we have created a program whereby MBIA, our local associations, and you as individual members have access to an attorney to obtain legal advice on issues related to our association and your business. To facilitate this, we have created a Legal Issues Committee to oversee requests made on legal issues.

When requests are made, by either an MBIA member or a local association, an application must be filled out and returned to the Executive Director (please contact us or your Local Association for the application form). The Legal Issues Committee will then make a determination as to whether or not they will ask the MBIA Attorney on retainer to spend a portion of their hours rendering an opinion on this issue or participating in a legal discussion and/or legal correspondence with governing bodies (e.g., county commission) regarding the issue. In order to

ensure that either the requesting individual or the requesting local association has a stake in the issue, the applicant will be charged $75/hour for the attorney’s time. MBIA’s retainer will subsidize the remainder of the attorney’s hourly fee, up to a total of 15 hours for all issues per month.

Potential issues could be related to specific Montana legal issues such as (but not limited to): contract law, business relationships, county commission decisions, city council decisions, etc. If a legal issue is brought forward in which a particular individual or business is involved, it is the intent of the Legal Issues Committee to remove the personal information before submitting the question to the MBIA attorney on retainer.

Legal opinions rendered by the MBIA attorney on retainer, will be archived and available to all MBIA members. It is

requested that before an application is submitted, that the applicant determine whether an opinion has been previously rendered on that issue, in order to save time and expense.

If the legal issue cannot be resolved through the rendering of opinions, and the requesting individual and/or association determines that litigation is the proper course of action, the Legal Issues Committee and the MBIA attorney on retainer may require a separate contract in order to work on the litigation.

The requesting individual and/ or association is under no obligation to use the services of the MBIA attorney on retainer.

We are excited about this new program, and look forward to your feedback on its effectiveness.

Thanks for a great year! We look forward to an exciting 20172018. As always, feel free to call or email me at 406-442-4479 or steve@montanabia.com

“ As we move into our next fiscal year, membership looks to be holding steady at around 1550 active members. As you’ll recall, prior to 2008 we were up in the several thousands, and during the slump we dipped down to around 1200, but we have rebounded to a consistent 1550 and appear to be on track to hold that number.”

STEVE SNEZEK

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17

| CODES

Navigating Compliance Paths in Montana’s Energy Codes

By Dale Horton NCAT

In Montana, the state decides the specific energy code language that will be applied throughout the state. Local government jurisdictions can choose whether to enforce the state code but may not modify the code language itself. The Montana state energy code is applicable to new residential buildings constructed in Montana, with the exception of garages and storage buildings. Homes located outside local code enforcement jurisdictions fall under the Montana contractor selfcertification program. Montana law requires, as an element of the self-certification program, that the builder provide a signed document to the building owner stating that the house complies with the state energy code The energy code applies to additions, alterations, renovations, and repairs, as well as to new construction. However, the energy code is not retroactive. Unaltered portions of the original building do not need to comply. A good rule of thumb is that if a structure is newly built, then it has to meet the energy code.

For some home designers and builders, an ideal energy code would tell them exactly what they need to do. For others, being told exactly what they need to do is limiting. The energy code attempts to satisfy both preferences by offering multiple compliance paths.

However, providing multiple compliance paths complicates the code language.

The Montana energy code is based on the 2012 International Energy Conservation Code (IECC) and includes mandatory requirements, a set of prescriptive paths, and a performance path. The envelope requirements in the prescriptive path include three options—R-value Path, U-factor Path, and Total UA Path. A few important terms are defined below.

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FALL 2017

Mandatory Requirements. These are requirements that must be met in every building design no matter which compliance path is chosen. An example of a mandatory requirement is the permanent energy certificate or label attached to the electrical distribution panel. Another example is the air leakage requirements for air barrier installation and testing.

Prescriptive Requirements. A prescriptive code requires that each component comply with a specific criteria. For example, windows must have a U-Factor of 0.32 or better and ceiling R-Value must be R-49 or better. If a requirement is not met, a tradeoff must be made to “make up” for not meeting that requirement.

Envelope Tradeoffs. Envelope tradeoffs allow trades to be made between various components of the building envelope. For example, a builder might choose to install more insulation in the ceiling to “make up” for putting in windows that do not comply with the prescriptive requirements.

An envelope tradeoff calculation is allowed by the energy code in the Total UA Path and included in REScheck™ software.

Performance Simulation.

Performance based compliance involves using computer software to compare the energy cost of the proposed building design to the energy cost of the same building, its “geometric twin,” that complies with the minimum energy code requirements.

How should builders and designers decide which path to choose?

That depends on how much time and effort they are willing to put into the compliance analysis and documentation. The complexity of building systems and components used in the building can also determine which compliance

option makes the most sense.

The R-Value Path is the simplest approach. The other paths are available if one or more envelope component fails to comply with the minimum value specified for the R-value path. Of these other paths, the Performance Path is the most flexible but requires the greatest documentation.

There are three alternative prescriptive paths in the code.

All must also comply with the mandatory requirements. Most builders are familiar with the commonly used R-Value Path.

The other two alternatives could come in handy if a building has unique characteristics.

The R-value Path is appropriate if standard envelope assemblies are being used. The table below summarizes the code requirements for this approach. To use this compliance path each of the applicable components must comply with the specified minimum. It should be noted that an area weighted U-factor may be used to show compliance for windows. The R-values used in this compliance approach are nominal. This means that only the insulation R-value is considered.

All other assembly components can be ignored.

The U-factor approach can be used for less common assemblies such as structural insulated panels (SIPs). It is

important to remember that when using the table associated with this compliance path the entire assembly must be considered. The assembly U-factor includes all components (i.e., sheet rock, plywood, framing, air films) and the relative area of each component.

The Total UA alternative can be used if the building design includes one or more envelope components that do not comply with the R-value prescriptive requirements. This compliance path allows a tradeoff between a non-complying component and a component that is better than the prescriptive minimum. For example, a designer may use better performing windows to make up for a poorer performing wall. Using REScheck software is the easiest way to show compliance using the Total UA compliance path.

REScheck software also may be used to show compliance with all mandatory requirements including the mechanical and lighting. REScheck software is available at no cost from the USDOE energy code web site. (https://www.energycodes.gov/) The Performance Path provides the greatest flexibility of all the compliance options. This compliance path would likely be used for only the most unique of building designs. While tradeoffs

ENERGY CODE COMPLIANCE PATHS Prescriptive R-Values + Mandatory Requirements U-Factors + Mandatory Requirements Total UA + Mandatory Requirements Performance Simulation + Mandatory Requirements

R-VALUE PRESCRIPTIVE PATHS Component

Requirement

Windows & Doors

U-0.32

Remarks

Skylights U-0.55 Ceiling

R-49

R-38 complies if uncompressed insulation extends over the top of exterior wall top plate

Wood Frame Wall

R-21 or R-13+5

First value is cavity insulation, value after “+” refers to continuous sheathing

Mass Wall

R-15/R-20

Second value applies if more than half of R-value is on interior of the mass wall

Floor

R-30

Insulation that fills cavity (R-19 minimum) also complies

Basement Wall

R-15/R-19

First value is continuous, second value is if installed in framing cavity

Slab

R-10, 4'

Insulation must extend down continuously from top of slab 4’ vertically or horizontally

Crawlspace Wall

R-15/R-19

First value is continuous inside or outside, second value is cavity insulation on inside

are possible between most building elements, this path does not allow a reduction in envelope efficiency from installation of a high performance heating and cooling system. This path requires the use of software, such as REMRate,TM that is used

by Home Energy Raters when performing ratings.

The Future.

The state of Montana will consider updating the family of building codes, including the energy code, later in 2017 or in early 2018. Both the 2015 and 2018 editions of the IECC include an alternative code compliance path titled Energy Rating Index (ERI). This compliance path

is largely based on the Home Energy Rating system created by the Residential Energy Services Network (RESNET).

In this compliance path a Home Energy Rater conducts a computer analysis based on the characteristics of the proposed building. If the building achieves a minimum rating score and

complies with the mandatory requirements of the code, then it is deemed to comply. The key difference between the performance approach and the ERI is that HVAC and envelope tradeoffs are possible with the ERI. No such tradeoffs are allowed with the performance approach.

REFERENCES: Choosing an Energy Code Compliance Path, USDOE Building Technologies Program Topic Brief, August 2012, https://www.energycodes.gov/sites/default/files/documents/compliance_paths_topic_brief.pdf; USDOE Energy Codes Web Site: https://www.energycodes.gov/; Montana Department of Environmental Quality Energy Codes Web Site: http://deq.mt.gov/Energy/EnergizeMT/EnergyCode; MTDEQ Energy Code Summary: http://deq.mt.gov/ Portals/112/Energy/EnergizeMT/Conservation/Energy%20Code/ENERGY%20NOTES_RESID_AUGUST%202016%20w%20NEEA%20logo.pdf; Montana Energy Code Handbook: https://www.ncat.org/residential-energy/

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| MBIA STAFF

Housing Market Rebound Continues MONTANA SINGLE FAMILY HOUSING STARTS YTD 2017*

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20

FALL 2017

GRACEFUL EXIT: NANCY RAE RETIRES AS MBIA BUSINESS MANAGER

By Lacey Middlestead

Mahatma Gandhi said, “There are no goodbyes for us.

Wherever you are, you will always be in my heart.”

The Montana Building Industry Association (MBIA) feels the same way about Nancy Rae, who gracefully exited her role as business manager for the association this past April after nearly 20 years of service.

According to Dustin Stewart, past executive director for MBIA, Rae was originally hired

by Bryon Roberts who served as the MBIA executive director from 1998-2008. Over the course of the next two decades, the association experienced periods of tremendous growth as well as several difficult housing crashes. The one element that remained a constant for the MBIA, however, was Rae. “She was key to helping the association succeed through the peaks and valleys of the building cycle,” said Stewart.

Steve Snezek, current executive director for the MBIA, echoed Stewart’s sentiment about Rae’s constant devotion to the association.

“Nancy was the glue that held the association together through the good and the bad,” said Snezek. “She did a phenomenal job of keeping the wheels going forward around here every day.”

Outside of perfecting her official duties as business manager, Rae also worked to build a strong MBIA culture.

“She was always the smiling face that greeted everyone,” said Snezek.

“From the fun and productive office environment to the family-like atmosphere of board meetings, people loved being

around her and the association really benefitted as a result,” said Stewart.

Stewart went on to share that a seemingly routine phone call to get new housing start data could end up taking 90 minutes because the clerk on the phone was about to have a new grandchild.

“At once, she was everyone’s therapist, best friend, and confidant,” said Stewart.

While Snezek admits that Rae’s replacement has big shoes to fill, he is happy that she now has the extra time she’s longed for to spend with her children and grandchildren.

“She really did make working there fun, regardless of the external circumstances. The members had tremendous respect for her,” said Stewart.

“ Nancy was the glue that held the association together, through the good and the bad. She did a phenomenal job of keeping the wheels going forward around here every day.”

STEVE SNEZEK MBIA EXECUTIVE DIRECTOR

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21

| MBIA MEMBERS

Montana Building Industry Association INNOVATORS

ASSOCIATION STANDOUTS VISIONARIES

TRAILBLAZERS

BMC OF MISSOULA GALLATIN VALLEY FURNITURE (OUR MEMBERS MAKE US PROUD) HAVE AN OUTSTANDING MEMBER TO NOMINATE? Contact Phoebe Williams, MBIA Business Manager/Communications Director (406) 442-4479 or phoebe@montanabia.com

22

FALL 2017

BMC OF MISSOULA

Throughout the 2016-2017 school year, BMC of Missoula made several sizable donations of building materials to Hellgate High School’s building trades classes.

Relief is what this donation delivered to instructor Chip Rinehart.

LOCATION

Missoula, Montana

WEBSITE

www.buildwithbmc.com

PHONE

(406) 728-4750

“BMC gave me some breathing room with the donations,” said Rinehart. “While I do have a budget, material is expensive. I believe the best way for students to learn is by making sawdust. They need to use the tools and make mistakes. That is how you get better. With their donation we were able to spend more time doing hands on projects and less time lecturing.”

According to Rinehart, his classes used the materials in building a few picnic tables and some chicken coops. He expects the donated materials to carry over into the

2017-2018 school year where his students will continue building tables and coops but also garden sheds and planter boxes.

The building trades classes teach students important life skills. Even if a student is not interested in a trade profession after school, Rinehart’s classes still benefit them by showing them how to operate basic homeowner power tools in a safe manner.

For students interested in trade work, BMC’s donations helped empower them and give further life to their long term goals.

“Any building trade is a learned skill,” said Rinehart. “I think of this class as say how a basketball team practices. In the end people only remember if a team wins or loses, they do not talk about how hard they practice. The classroom is like practice.

We talk about strategy, proper tool use,

investigate solutions, and practice working together. This way when the day comes for them to do a project on their own they will be better prepared. Mistakes help us grow as individuals.”

Partnerships, like the one between BMC of Missoula and Hellgate High School not only foster a sense of community but also provide unique and educational opportunities for young adults to explore. Rinehart and his students are grateful to BMC for their contributions and encouragement of their future career plans.

“Trade jobs are good paying jobs and there is a demand for them,” said Rinehart.

“Students that take an interest in a trade could be making very respectable money by the time they are in their early twenties. It is important that students know that this is an option as they explore their interests.”

GALLATIN VALLEY FURNITURE

Over the past year, Gallatin Valley Furniture in Bozeman has been undergoing a dramatic makeover in order to enhance curb appeal and better reflect the style and quality of products and services they offer.

LOCATION

Bozeman, Montana

WEBSITE

www.gvfc1.com

PHONE

(406) 587-5423

According to Brian Cattin, co-president of Gallatin Valley Furniture and Gallatin Valley Design Group, the decision was made two years ago to shift the focus of the business to furniture retail and interior design services.

To do this, they created an interior design division called Gallatin Valley Design Group.

They also sold the flooring side of the business, which has since been renamed and rebranded to Gallatin Valley Carpet One and will remain in the same building as a tenant.

In preparing for these changes, Cattin explained that consideration was briefly given to relocating the business to a new building and area of Bozeman. Ultimately, however, the decision was made to remain at their location off North 7th Avenue and

contribute to the revitalization of the area.

“When looking at the options of building or relocating, we ultimately felt it made sense to remain in a main corridor of Bozeman that will be revitalized over time,” said Cattin. “We have been here for a long time and believe North 7th was the place to invest.”

Cattin explained that businesses are starting to gain momentum in their revitalization efforts on North 7th. Universal Athletics and Midtown Tavern were the first to make significant enhancements to their businesses but others like Gallatin Valley Furniture are also joining the movement.

In undergoing the external overhaul on the building, Cattin stated that with guidance from Bechtle Architects, they utilized “classic finishes on the exterior’s new profile to draw attention to both the entrances of Gallatin Valley Furniture and Gallatin Valley Carpet One.” Significant work was also done to the interior of the store.

Regardless of their recent changes, Gallatin Valley Furniture remains focused on

their customers and helping turns houses into homes.

“The bones and architecture of any great house can be diminished if the design isn’t comprehensively thought through,” said Cattin. “We love creating an environment that translates from the exterior to the interior. To do so, we work with the contractor, architect and homeowner to help guide the selection of finishes and furnishings to achieve the desired look and functionality of the home. In the end, we help create spaces that people want to come home to.”

And despite competition from larger retailers in the area, Gallatin Valley Furniture continues to meet demands and expand their customer base.

“There are many reasons why we have continued to remain relevant and will continue to grow, but our commitment to great customer service and our offering of fashionable, quality furnishings have been the cornerstone of our success,” said Cattin.

MONTANA HOME EXPERTS

23

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2017 WRAPUP |

2017 Legislative Session OVERALL SUCCESS FOR MBIA BUT WORK STILL NEEDED ON WATER

The 2017 Montana Legislature adjourned on April 28th, and although there were certainly some disappointments, MBIA had a busy, productive, and successful session. MBIA took a position on 43 bills, provided testimony and worked the halls as appropriate, and monitored another 23 bills. All the while we worked on developing key alliances with other interest groups and good relationships with legislators across the board that will serve MBIA well in years to come. Of the 43 bills MBIA took a position on, we had an over 80 percent win record through defeating harmful bills and getting good bills signed into law.

Not a bad showing.

WATER One of MBIA’s big policy focuses was water, specifically exempt wells, which is an issue MBIA has worked on for nearly a decade.

Continued availability of affordable housing depends on, among other factors, viable solutions for domestic water supply. Small wells under 10 acre-feet annually and 35 gallons per minute that are exempt from the full-blown, expensive, and typically unwieldy permitting process have been part of that viable solution for decades.

Because the Montana Supreme Court invalidated the so-called “physically manifold” rule, we have been operating in a bit of a legal no-man’s land when it comes to exempt wells. The Montana Supreme Court declared the definition of “combined appropriation” in the Administrative Rules of Montana invalid, but the Department of Natural Resources and Conservation (DNRC) has not yet adopted new rules. Instead, water users have been operating under informal guidance issued by DNRC requiring that wells be spaced 1,320 feet apart or be considered combined appropriations subject to the full permitting process if the combination of the wells exceeds 35 gallons per minute and 10 acre-feet a year.

Recognizing that all water users stand to lose under potential rulemaking by DNRC, a group of water users consisting of MBIA, realtors, well drillers, agricultural groups, and the Montana Association of Counties started meeting this past fall to develop a bill that could work for all parties. The meetings started by discussing what the primary concern was that needed to be addressed.

Agricultural groups identified density of wells as their main concern so crafting legislation focused on that issue. HB 339 resulted from those discussions.

Sponsored by MBIA past president Rep. Carl Glimm, HB 339 codified the definition

of “combined appropriation” that included the “physically manifold” language, the purpose being to move the definition out of administrative rule and into code, thereby eliminating DNRC’s ability to set the definition through rulemaking. The meat of HB 339 established a spacing requirement for wells.

Within closed basins or stream depletion zones, wells must be spaced 660 feet apart within tracts of record, as those tracts of record existing as of October 2014. Outside closed basins and stream depletion zones, the spacing is 330 feet apart. The beauty of HB 339 was in its simplicity—no changes to volume or flow rate of exempt wells, no complex formulas for determining well location, and no delving into the subdivision code.

After finalizing the bill and securing a sponsor, MBIA and other members of the coalition took the bill to environmental groups and others like the Montana League of Cities and Towns to discuss the proposal ahead of the committee hearing. While the conversations were productive, those groups continued to oppose the bill in the legislature. Despite this opposition, HB 339 passed the House with some bipartisan support, but was a party line vote by the time it got to the Senate.

Early in the session, Sen. Blasdel put in a bill request for another bill to address exempt wells. MBIA and other members of the coalition that crafted HB 339 approached Sen. Blasdel to let him know about HB 339, at which point he put his draft request on hold.

However, after the introduction of HB 339 and without prior notice to any of the members of the coalition, Sen. Blasdel brought forward SB 248, billed by the sole proponent as a solution to allow for exempt wells in the limited situation of family transfers. SB 248 allowed for exempt wells on new tracts of land created by means of a family transfer and limits subsequent transfers of such new parcels to at least two years after the date of the division, absent a showing of financial, medical, or other hardship.

MBIA’s reason for supporting HB 339 is fairly simple—the current guidance in place for exempt wells is a severe limitation on their use and, consequently, a severe limitation on water supply options for new homes. MBIA opposed SB 248 along with the other coalition members, as it was a limited solution to a much larger problem of the use of exempt wells for one specific situation and would provide a convenient excuse for rejecting HB 339. In light of HB 339, SB 248 was unnecessary and could actually promote exploiting the family

transfer exemption, as SB 248 leaves exempt wells virtually useless in other subdivision situations.

Some messy and substantively unrelated politics surrounded SB 248 resulting in both SB 248 and HB 339 moving forward.

Both HB 339 and SB 248 were still in play towards the end of the session, with HB 339 being included in the final package of bills.

Republican leadership took to the governor in trying to reach a deal on infrastructure.

Governor Bullock vetoed both HB 339 and SB 248, stating that the bills did not provide sufficient protection for senior water users, an oft-repeated line when it comes to any discussion of exempt wells.

Subsequent to the session, Sen. Thomas convened a meeting of stakeholders to discuss the issue. The meeting did not reveal any new information, but was a chance to educate more legislative leadership on the issue. No study bills on exempt wells came out of this session, although the Water Policy Interim Committee will likely at least discuss the issue in crafting the committee work plan when they next meet.

In the meantime, DNRC has indicated it will proceed with rulemaking to define combined appropriation. MBIA will watch for the notice of rulemaking and provide appropriate comment.

MBIA also remains in communication with other members of the coalition that brought HB 339 forward, as the coalition was a big step towards building bridges towards permanent solutions. While we did not reach the finish line on exempt wells this session, we will still work towards a solution.

SUBDIVISIONS Thanks to some younger legislators with background in subdivision and planning, the 2017 Legislature saw improvements to the subdivision and review process. MBIA also worked with the Montana Association of Realtors to address issues in the subdivision review process arising from a recent court decision from Ravalli County. Finally, MBIA defeated several bills that would have slowed down subdivision review. Overall, 2017 was a good session for subdivision law.

Reps. Adam Hertz and Forrest Mandeville brought forward a series of bills designed to address gaps in subdivision law and improve the system overall. MBIA supported all of these bills, testifying in favor and working the halls. Not only did Reps. Hertz and Mandeville appreciate MBIA’s work, Gov. Bullock signed all the bills into law, resulting CONTINUED ON PAGE 26 MONTANA HOME EXPERTS

25

in a more workable review process.

HB 245 from Rep Mandeville, a planner in his life outside the legislature, specified that a final plat is received by the reviewing authority as of the date of delivery with the required review fee. The reviewing authority then has 20 working days from receipt to determine if the submitted final plat information is sufficient for approval as per Mont. Code Ann. § 76-3-611 (1) & (2) or what the defects are in the submission. Subsequent re-review of final plats is limited only to information previously identified as defective. Upon receipt of all information required for approval under Mont.

Code Ann. §76-3-611(1) & (2), the reviewing authority must approve or deny final plat within 20 working days. The time periods may be extended only upon mutual agreement of the reviewing authority and the developer or their agent.

MBIA supported HB 245 because of the clarity it brings to the subdivision review process. Having a firm timeline for review assists in not only moving the project along, but also in planning construction and financing. The limitation on what information can be re-reviewed after a notice of defects precludes contrary decisions on previously determined matters. HB 245 passed both chambers with strong support.

Rep. Mandeville also sponsored HB 456 and HB 507, both of which also passed with strong vote margins. HB 456 was a very simple change to Mont. Code Ann. § 76-4-125, clarifying that the deadlines for review, submission, and final determinations on subdivisions are calendar days. The simplicity of the bill in bringing certainty to the subdivision timeline was the basis for MBIA’s support.

HB 507 modified the subdivision preapplication and review process, allowing an applicant to request a pre-application meeting with the reviewing authority. If the subdivision includes onsite sewage disposal, HB 507 required the applicant to notify the designee of the local board of health and allows for that designee to conduct a preliminary site assessment. Section 1 also contained a detailed timeline for all aspects of subdivision review and final decisions. MBIA supported HB 507 as an additional piece of much-needed clarity in the subdivision review process.

Rep. Hertz, a new legislator from Missoula County and a Realtor/developer, sponsored three bills modifying the sanitation in subdivisions statutes. HB 407 amended Department of Environmental Quality (DEQ) rulemaking authority regarding individual water systems to require that applicable rules for mixing zones or well isolation zones that are a minimum of 50 feet inside a subdivision boundary allow for such zones to extend beyond the subdivision boundary onto land dedicated for road, railroad, or utility rights-of-way. MBIA supported HB 407 because of the flexibility it provided in planning water systems for new housing.

HB 407 passed both chambers with strong bipartisan support.

HB 510 clarified that exempt subdivisions are also exempt from the sanitation in subdivision review by DEQ if the reviewing

| 2017 SESSION

26

FALL 2017

authority issues certification that the subdivision is being provided with adequate storm water drainage and municipal facilities.

Prior to HB 510, because of a lack of clarity in the law, such minor land use changes such as boundary adjustments could be subject to a full blown COSA review and duplicitous review by the local reviewing authority and DEQ. MBIA’s support was premised on making the subdivision review process make sense and avoiding the cost of additional review that would add no further public benefit. Except for five votes, HB 510 passed through all committees and floor votes unanimously.

Finally, HB 300 exempted townhomes from the same sanitation in subdivision review from which condominiums are already exempted. Rep. Hertz came to MBIA early in the session before introducing HB 300 to request support, which MBIA did and also helped Rep. Hertz connect with other interested groups. HB 300 passed handily, and Gov. Bullock signed it into law early in the session.

MBIA also supported two bills sponsored

by Rep. Greef of Ravalli County to address the fallout of the Legacy Ranch case from Ravalli County—HB 416 and HB 445. The Montana Association of Realtors developed both bills and coordinated with MBIA to garner our support. Governor Bullock has signed both bills into law.

HB 416 was the so-called “hard look” bill, which set a standard for findings of facts issued by the reviewing authority in determining if subdivisions meet the requirements of Mont. Code Ann. Title 76, Chapter 3. The findings must be based on the record as a whole and must be sustained unless “arbitrary, capricious, or unlawful.”

MBIA supported the bill as it provided some resolution to the lack of clarity as to the basis for review of subdivision decisions created by the Legacy Ranch case, but pushed for maintaining in the bill further specification of what findings would be considered “arbitrary, capricious, or unlawful.” The Senate removed that language, and the sponsor, along with MAR, did not want to re-insert the language and risk a conference committee. While HB 416 would have been better with the statutory language defining “arbitrary, capricious, or unlawful,” the bill as finally signed into law is still an improvement over the results of Legacy Ranch.

The second part of the solution to the Legacy Ranch case, HB 445 was the socalled “phasing” bill providing explicit recognition in the subdivision code of phased subdivisions. HB 445, Sec. 2(10) defines a phased development as “a subdivision application and preliminary plat that at the time of submission consists of independently platted development phases that are scheduled for review on a schedule proposed by the subdivider.” Section 3 is new statutory language setting submission standards and review requirements for phased development and establishing a timeline of 20 years for all phases to be submitted for review and decided on by the reviewing authority.

HB 445 garnered MBIA’s support because absent this language in the statute, Montana does not recognize the reality of how large-scale subdivisions are developed.

HB 445 provides a clear path forward for phased development review, and this clarity is beneficial for developers. HB 445 passed both chambers by very wide margins.

In addition to some improvements in subdivision law, MBIA also kept some bad bills away from the governor’s desk. Most notable among these less-than-desirable bills, Rep. Walt Sales brought HB 317 at the request of Gallatin County, which felt that it was improperly limited in the public comment it could solicit on minor subdivisions. Under current law, minor subdivisions are not subject to the public hearing requirements of Mont. Code Ann. § 76-3-506. HB 317 would have granted reviewing authorities such as Gallatin County the ability to, at their discretion, hold a public hearing on minor subdivisions. If minor subdivisions were to be subject to public hearings, HB 317 required that such be stated in the applicable subdivision regulations.

MBIA premised its opposition to HB 317 on the fact that subjecting minor subdivisions to many of the same requirements as major subdivisions was an unnecessary complication and delay, not to mention an added cost for developers and reviewing authority. While current law does expressly prohibit a public hearing on minor subdivisions, the public is not precluded from otherwise submitting comment. Although HB 317 did make it out of House Local Government, it failed to pass second reading on a tie vote.

MBIA also opposed several other bills on subdivision statutes, stopping all of them in committee. HB 548 from Rep. Hamilton, a new representative from Bozeman, revised protest provisions for county zoning. House Local Government voted the bill down within several days of the hearing. SB 266, sponsored by Sen. Cohenour of Helena, would have limited extensions for subdivision approval to one three-year period and would have also allowed extensions only in areas with adopted growth policies. SB 269 from Sen. Caferro, also of Helena, would have required a determination of “sufficient information” in subdivision applications by the reviewing authority, but set no timeline for that determination, potentially leading to untold delays in application review.

Senate Local Government rejected both bills the next meeting after the hearings.

STORM DAMAGE After severe hail storms in Yellowstone County last summer, Billings saw a swarm of disreputable contractors offering storm damage repair. HBA of Billings made huge efforts to educate the public on how to hire reliable contractors, but some homeowners still fell victim to fly-by-night operations.

Rep. Lenz of Billings heard complaints about these bad apple contractors while he was campaigning and decided to present legislation to address the issue, which is not necessarily one requiring a legislative solution.

HB 160 was an initial, self-formulated attempt by Rep. Lenz to address concerns raised by his Billings-area constituents.

The bill required registered contractors to notify clients whether the contract will be performed under the contractor’s warranty CONTINUED ON PAGE 29

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and to supply clients with the written contact information and description of the warranty, process for accessing the warranty, and time limitations on the warranty. Only persons with written contracts had recourse for warranty work, including work done by any subcontractor.

MBIA opposed the bill because it was additional paperwork for reputable contractors, but didn’t even touch the “flyby-night” companies Rep. Lenz was trying to address, as it was applied only to registered contractors. Additionally, the bill actually limited remedies for homeowners. The bill was quickly and soundly defeated in House Business and Labor.

Following closely on the heels of HB 160, Rep. Lenz also introduced HB 222, this one at the request of the property and casualty insurers. HB 222 applied only to “exterior residential storm damage to residential buildings” (p. 1, ln. 15) and was entirely new code with no consideration for existing Montana law. Section 3 of the bill listed multiple limitations and requirements for any advertising or solicitation for exterior residential storm repair while Sections 4 and 5 required the contractor to prepare in writing a “detailed description and location” of all damage, an itemization of emergency repairs completed before the contract, specification of any excluded damaged areas and reason for exclusion, notice of the right to cancel, and disclosure of the consumer’s responsibility to pay for any work for which an insurer denies coverage. Section 6, perhaps the most problematic section, created a right of cancellation within five business days after the contract was entered into OR within five business days of the consumer receiving notice of claim denial from insurance. Section 7 provided that remedies against contractors covered by HB 222 were under the unfair trade practices and consumer protection provisions set forth in Mont. Code Ann. Title 30, Chapter 14.

MBIA’s opposition was based on a number of factors. The disclosures and repair proposals required under Section 4 were numerous and yet vague, opening up significant liability for contractors if the descriptions were not “detailed” enough.

(The bill provided no guidance on what constitutes sufficient detail.) Additionally, it is not uncommon for additional damage to be uncovered in the repair process, which damage cannot be known when the contracted work begins. However, the most problematic portion of the bill was Section 6, specifically Section 6(1)(b) allowing a consumer to cancel after being denied coverage by an insurer. Such denial could come well after the work is completed, leaving contractors holding the bag for materials, labor, and other costs. Legislators quickly recognized that HB 222 shifted the entire burden and risk of responding to storm damage onto contractors while not addressing what may be at least as big, if not bigger, of an issue than disreputable contractors—insurance companies not responding to such emergency events in a timely manner. HB 222 was tabled in House Business and Labor 18-1.

| 2017 SESSION

WORKERS COMPENSATION As is often the case, the 2017 Legislature saw a number of bills to address various aspects of workers compensation. While MBIA monitored most of the bills, we only took a position on a few, primary among them SB 298 introduced by Sen. Osmundson of Buffalo. SB 298 provided an exemption to workers compensation for religious groups whose established tenets oppose accepting benefits of public or private insurance, such as the Amish. In order to qualify for the exemption, the religious group performing services for public hire that would otherwise require workers compensation had to exclusively use the services of individuals whose religious beliefs met the standards set in the bill for opposing acceptance of insurance benefits. To attempt to preclude “convenient” development of religious beliefs opposing insurance, SB 298 required that the qualifying religious tenets be in place for at least 10 years and that the group and/or individual hold an IRS form 4029 exemption from Social Security.

SB 298 was introduced, heard in committee, and moved out to the Senate floor shortly before the transmittal deadline for general bills, so strong opposition did not coalesce until the bill moved to the House. MBIA primarily opposed the bill because it created an unfair advantage for direct competitors in the construction industry based on religious preferences.

Secondarily, the bill set a bad precedent for state inquiry into what would be considered bona fide religious beliefs and raised some fundamental constitutional questions.

Although SB 298 moved quickly through the Senate, House Business and Labor unanimously tabled the bill in committee.

MBIA also took successful positions on two other workers compensation bills—SB 275 from Sen. Buttrey of Great Falls and SB 371 sponsored by Sen. Moore of Miles City. MBIA supported SB 275 to define “construction industry” in the workers compensation premium credit program. Sen. Buttrey appreciated MBIA’s support for the bill, which Gov. Bullock signed into law before the end of the session. SB 371 would have eliminated the State Fund. MBIA opposed the bill, which Senate Business and Labor voted down the same day. State Fund was particularly grateful for MBIA’s action.

GAS TAX After much deliberation, MBIA decided to support HB 473, the gas tax bill, not only in solidarity with the Montana Contractors Association, but also because adequate roads and infrastructure are vital to housing development. HB 473 did not have an easy path to the governor’s desk and was in play right up until the final days of the session. HB 473 did pick up bipartisan support, but the final vote margins were narrow.

In its final form, HB 473 established restricted accounts for revenues generated under the bill for use on highway-related and specified infrastructure projects. It also created a matching funds program to provide assistance for local road projects. Section 4 required a performance audit of the Montana Department of Transportation. The meat of

the bill is, of course, the gas tax increase. The general fuel tax will increase from the current 27 cents per gallon to 31.5 cents in fiscal years 2018 and 2019, 32 cents in fiscal years 2020 and 2021, 32.5 cents in fiscal year 2022, and finally 33 cents for fiscal year 2023 and beyond.

TIFs Tax increment financing (TIF) was a subject of much discussion particularly in House Taxation. Most of the legislation was sponsored by Rep. Essmann of Billings and Rep. Adam Hertz of Missoula, primarily in response to perceived abuses of TIF districts by those city governments. MBIA worked with the Montana Taxpayers Association and the Montana League of Cities and Town to respond to the TIF bills, as TIF districts, when used properly, are an important way to revitalize blighted areas with both commercial and residential development.

MBIA monitored a number of the bills brought by Reps. Hertz and Essmann, but did take active positions on HB 250 from Rep. Grubbs, HB 359 by Rep. Burnett, and HB 413 from Rep. Essmann, opposing all three because of the significant limitations on the use of TIF options. All three bills failed. MBIA did support HJ 18, a resolution for the interim study of TIF laws sponsored

by Rep. Hertz. That study has been assigned to the Revenue and Transportation Interim Committee, and MBIA will be monitoring as that study proceeds.

MISC. BILLS MBIA was active on a number of other bills that fell into other categories. Key among those other bills were HB 308 (Rep. Schreiner, Great Falls) and HB 365 (Rep. Shaw, Sheridan), both of which MBIA supported and both of which were signed into law. HB 308 established an apprenticeship tax credit. You may have seen the news of this credit being promoted as a way to build the workforce, particularly with Montana facing a coming shortage of skilled labor. HB 365, the so-called “dig bill” resulted from much discussion among utilities, industry, and other stakeholders prior to the session to establish clear guidelines for responsibilities and liability regarding utility lines.

As a closing comment, I want to thank MBIA for allowing me to be your voice in the Capitol on a daily basis. It’s an honor that you trust me to represent you, your businesses, and your clients. Steve and I worked well together, communicating constantly and tag-teaming when multiple bills were up at the same time. And the membership was always there to back us up—providing technical information when needed, coming to Helena to testify when the committees needed to hear from the folks out in “the real world,” and always willing to make calls and send emails to your legislators when we needed to make a big push. Special thanks goes out to the MBIA legislative committee that took time from their Tuesday mornings to get on the calls and go over all the latest from Helena.

Without everyone’s participation, MBIA wouldn’t be the strong voice we are. Thank you everyone!

MONTANA HOME EXPERTS

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| THE BACK PAGE

NAHB IS WORKING TO BUILD YOUR FUTURE

$5,950

When you add up the dollar value of NAHB services and advocacy victories, you get an average of $5,950 per housing start for a typical home builder.

That number demonstrates just how much value NAHB delivers for members.

Below are selected advocacy wins achieved in 2016 that contribute to that number.

$1500

Delay of Silica Rule

$1200

$900

Health Reimbursement Arrangements

Building Codes

$1000

Higher Loan Limits

Together, we build communities These numbers represent the value per housing start a typical builder will see in 2017 as a result of Key NAHB advocacy victories achieved in 2018. Some members will experience more of these benefits than others.

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