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BUILDING INSIGHT//WWW.BIAW.COM

CONTENTS //

Who We Are

The Building Industry Association of Washington is the state’s largest trade association and represents over 8,000 member companies in the home building industry. Known as the “Champions of Affordable Housing,” BIAW is dedicated to ensuring and enhancing the vitality of the building Industry for the benefit of its members and the housing needs of citizens.

2014 Senior Officers President Bob Johnson, CAPS, CGP Skagit/Island Counties Builders Association // LOCAL PRESIDENT INSTALLATIONS 5

// IT’S A WRAP! D&C WEEK CONCLUDES 7

First Vice President Monty Smith, CAPS BIA of Whatcom County Skagit/Island Counties Builders Association Second Vice President Kevin Kartak MBA of King & Snohomish Counties Skagit/Island Counties Builders Association Master Builders Association Pierce

// SESSION UPDATE 8-9

// BIAW LEGISLATIVE RECEPTION 9

Treasurer Dave Main MBA of King & Snohomish Counties Skagit/Island Counties Builders Association Secretary Patrick Hayes Skagit/Island Counties Builders Association MBA of King & Snohomish Counties Immediate Past President Audrey Borders BIA of Whatcom County Skagit/Island Counties Builders Association

// 2012 WSEC CLARIFICATIONS 10

PRESIDENT’S PERSPECTIVE

// MARKET DATA 14-15

EDUCATION PROGRAM POST

F.T.A. — Fun, Travel and Adventure

Value of designations

EVP VIEWPOINT

HEALTH CARE REFORM

Resources, Peak lawsuits nearing resolution

Affordable Care Act — Implementation considerations

PETITION FILED WITH ECOLOGY

Group seeks to amend WRIA 18 Rule

BIAW Staff Executive Vice President Art Castle Administrative Services Director Jan Rohila Director of Insurance Programs Frank Romero Government Affairs Director Jan Himebaugh Building Insight questions/comments Communications and PR Director FaLeana Wech, CGP faleanaw@biaw.com Building Industry Association of WA 111 21st Avenue SW Olympia, WA 98501 360-352-7800 • 800-228-4229 www.BIAW.com

FEBRUARY ‘14 VOL. 24, ISSUE 2

PRESIDENT’S PERSPECTIVE

F. T. A .

FUN, TRAVEL AND ADVENTURE

4 I’ve been asked by many, how my first month has been going and my top two answers are, I hope the rest of the year doesn’t go as fast as this past month and the second is F.T.A. from my early Army days. Some of you may wonder what exactly does that mean and others may recall that F.T.A., at one time, had a very negative meaning; it’s not hard if to figure out if you think about it. If you ask my wife, she says maybe it stands for the “Future Teachers of America,” or if you’d // BOB JOHNSON, of asked me a few years ago, I could have said, “Flying Tiger Airlines.” CAPS, CGP I was actually deployed twice on an aircraft that had F.T.A. on the tail which stood for “Flying Tiger Airlines,” a contract carrier for the PRESIDENT military. If you were to ask me now, I would say it stands for “Fun, Travel and Adventure.” Local Association President Installations As with past presidents before me, I am striving to visit all of the local home building associations across the state this year. So far, I have had the privilege of being invited to two installation dinners and installing the board of directors at four other associations. Being from Skagit/Island County Builders Association, I recently traveled from border to border; visiting BIA of Whatcom County to the north and the BIA of Clark County to the south. I then attended Kitsap’s installation dinner on the Peninsula to the west, and then flew east to Spokane. This certainly covers the travel part and it’s been a heck of a lot of fun. As you can tell, my travel schedule has been very hectic and unfortunately, due to a scheduling error I missed an installation I had planned to attend—my apologies to the HBA of Tri-Cities and President Lott for this oversight. In each case, I had an opportunity to have conversations with many members who may not usually have the chance to go to a state board of directors meeting. I have been able to put my finger on the pulse of the association through these visits and it’s been very gratifying to see the attendance and enthusiasm at each event I’ve had the opportunity to attend. The feedback I’ve received indicates we are on the right track and seeing a positive trend in growing our local associations and maintaining BIAW’s position as the third largest state association in the NAHB Federation. Legislative Session Now that the legislature is in session, the F.T.A. continues. By the time you read this, I will have been to Olympia several times and it seems like every day “on the hill” is an adventure. During my visits, I’ve been able to sit in on a hearing about State Building Code issues; attend a dinner with our advocacy team and a group of State Senators; and attend an Association of Washington Business’s (AWB) weekly lobbyist lunch. It was at the AWB event where Governor Inslee’s Chief of Staff, Joby Shimomura spoke about extending a hand and trying to come together on issues to work in a more nonpartisan manner. I was introduced to Ms. Shimomura after the meeting and extended my hand, now we will wait and see. Our advocacy team is working on priority issues as directed by the Legislative Policy Committee (LPC), some of the key pieces include: Impact Fee Deferrals, SEPA Traffic Mitigation/Interlocal Agreements and Energy Code Climate Zones, to name a few. You can read more about these topics in the session update on pages 8-9. I’d also like to take a moment to encourage you to participate in BIAW’s weekly legislative conference call—all members and staff are invited. Please contact BIAW’s Government Affairs Director, Jan Himebaugh at janh@biaw.com if you’d like more information on how to phone in.

please see FTA on page 5

BUILDING INSIGHT www.BIAW.com

5 FTA from page 4 NAHB Winter Board Meeting and International Builders Show As the month has drawn to a close and a new one begins, I sit finishing this article from Las Vegas while attending NAHB’s winter board meeting and the International Builders Show (IBS). I was fortunate to have been able to attend the Associates’ Appreciation Awards breakfast on one of the mornings and it was special because our own, Linda Mosier-Vaudt, BIAW Associate National Director from the Olympia Master Builders was nominated for an award in two categories. Congratulations, Linda for your generous support of the industry and our associations! Of particular interest, was the Builders Engage Associate Members or BEAM Award. Too often we speak of members doing business with members but only give lip-service to the action. The contractor from South Dakota who received the award talked about the solid performance of his subs and suppliers, and the long-lasting relationships they have built and what they do as a team of member companies to support their local homebuilding association. Remember always to try to “do business with a member” but if you choose to use a non-member company on your project, invite them to join and at least try to sign them up as members in order to do your part to help grow and energize your local homebuilders association and BIAW.

LOCAL PRESIDENTS TAKE OATH

(A) 2014 MBA of King and Snohomish Counties President Martha Rose receives the oath of office from her son, Silas Maddox. (B) 2014 HBA of Tri-Cities President Brett Lott raises his right hand as former HBATC President Don Pratt reads the oath. (C) BIAW President Bob Johnson reads the oath to 2014 BIA of Clark County President Ott Gaither. (D) 2014 Spokane HBA President Jason Lawrence proudly takes the oath from BIAW President Bob Johnson.

FEBRUARY ‘14 VOL. 24, ISSUE 2

EVP VIEWPOINT

RESOURCES, PEAK LAWSUITS

NEARING RESOLUTION

6 On January 24, the initial court documents were filed for the settlement agreement of the Resources and Peak lawsuits. There will be the initial court hearing February 21. We anticipate the judge to allow the settlement process to continue.

// ART CASTLE EXECUTIVE VICE PRESIDENT

This means that all the BIAW members who participated in the 1994 thru 2013 R.O.I.I.® plan years will receive a notice in late February or March notifying them formally of the proposed settlement and setting a hearing date where the judge will hear testimony. After that hearing, the judge will decide whether the settlement agreement will be completed.

If so, $1.2 million will be paid to the more than 13,000 R.O.I.I.® program participants based on how much premium each paid during the years they were enrolled. Any returned or uncashed checks after six months from this settlement distribution will be returned to the Washington Builders Benefits Trust (WBBT) to be added to refunds distributed to current participants during 2015. You may recall on Wednesday, October 30, 2013 Audrey Borders and Ted Clifton along with Art Castle and our attorneys Rob Maguire and Harry Korrell were in mediation with attorneys for the Resources and Peak lawsuits for more than 12 hours. The settlement agreement was approved by both the BIAW and BIAW-MSC Boards of Directors at the BIAW meetings in November. $3.3 million will go to the petitioners ($105,000 of which will go to the plaintiffs in the cases) the rest to the attorneys. The settlement will be paid out of BIAW and BIAW-MSC funds. BIAW, BIAW-MSC, WBBT, Trustees, and others are released from any claims relating to the lawsuits. There is no admission or concession of liability or wrongdoing whatsoever or breach of any duty on the part of the released parties. There are stipulated statements that BIAW, BIAW-MSC and WBBT have made changes to the R.O.I.I.® program as a result of the lawsuit. There is no restriction on the ability to modify future enrollment agreements or to modify the structure of the program. The settlement agreement also has language that precludes so-called “copy-cat” lawsuits from other program participants and the plaintiffs agree to destroy all documents obtained in discovery. Robert Utter and Faith Ireland v. BIAW Early this year we will also find out whether the state Supreme Court will review the plaintiffs appeal on the “Utter” case. This is the case where two former Supreme Court Justices accused BIAW of violating election laws during the 2008 Governor’s race. BIAW won a summary judgment at trial court on the facts. It was then appealed to the Court of Appeals that first issued an unpublished opinion reversing the trial court, then reversed themselves and issued an opinion that upheld the trial court decision. The plaintiffs then appealed. We should know in the next few months whether this case is over or will continue to be in litigation. North Central HBA’s Charter Revoked This past summer, BIAW asked NAHB to have North Central HBA either comply with the NAHB bylaws or revoke their charter. North Central HBA leaders created a parallel association that collects dues from their members but doesn’t pay the state or national dues as required under the NAHB bylaws. North Central HBA was unwilling to comply with the NAHB bylaws and at the NAHB Board of Directors meeting at the International Builders Show, the Board voted to revoke the North Central HBA charter and reassign the three counties to Central Washington HBA.

BUILDING INSIGHT www.BIAW.com

IT’S A WRAP!

DESIGN & CONSTRUCTION WEEK CONCLUDES

More than 75,000 builders, remodelers and suppliers packed the aisles during Design & Construction Week at the Las Vegas Convention Center. The show opened Feb. 4 with General Stan McChrystal, a four-star general and the former commander of the U.S. and international forces in Afghanistan, headlining the Opening Ceremonies with a moving keynote address. For the first time, NAHB’s International Builders’ Show, the Kitchen and Bath Industry Show (KBIS) and the International Window Coverings Expo co-located to offer an unparalleled exhibition and education program for all facets of the residential construction industry.

IBS exhibitors filled 440,000 square feet of exhibit space with everything from millwork to marketing services, a significant leap from last year’s total of 355,000 square feet. In all, Design & Construction Week offered attendees more than 650,000 square feet of exhibit space and with more than 1700 exhibitors to visit. During the show, thousands of building professionals attended more than 100 education sessions. In fact, BIAW members were among the presenters at Building Knowledge sessions during the show; Joseph Irons, CAPS,CGR, CGP, GMB, GMR, Irons Brothers Construction shared remodeling best practices during a panel discussion and Ted Clifton, CGP,CGV, MCGP, CVH, Inc. outlined 12 steps to building Net-Zero. BIAW EVP Art Castle also participated on a panel which covered how builders and developers can effectively use Low Impact Development techniques in their projects to address environmental regulations. There was so much to do and see at the show, many attendees commented they wished they had more time to take it all in. But, since all good things must come to an end, by late Thursday afternoon exhibits were starting to be dismantled and suitcases packed. That night there was still time for a last bit of fun. To close out the show, Spikes and guests were treated to a rockin’ performance by four-time Grammy winner Pat Benatar during Thursday evening’s IBS Spike Concert! Plans are already underway to incorporate more residential construction suppliers and their trade shows into next year’s Design & Construction week, which is set for January 20-22, 2015, again in Las Vegas, so save the date and make plans to attend!

Three BIAW members were honored and recognized for their outstanding achievements during a variety of award ceremonies at the show this year: (A) MBA of K-S Professional Woman in Building (PWB) Council Chair Juli Bacon, JB Consulting Systems receives the NAHB PWB’s Woman of the Year Award. Additionally, the MBA K-S PWB Council was awarded first place, Large Council Community Outreach for their Rampathon® project. (B) BIAW Associate National Director and OMB member Linda Mosier-Vaudt, ProBuild was nominated for 2013 Associate of the Year and the Bill Polley BUILD-PAC awards. (C) MBA K-S President Martha Rose, Martha Rose Construction, receives the NAHBGreen Advocate of the Year, Builder Award. Congratulations to each of you and thank you for your dedication to the industry!

FEBRUARY ‘14 VOL. 24, ISSUE 2

GOVERNOR’S TAX INCREASE PLAN $200 MILLION JUST TO START

Governor Jay Inslee (D) released a $200 million tax increase plan at the end of January, raising $614.2 million over the next three years. The funds would be dedicated toward public education including COLAs for teachers. The proposal is seen as Gov. Inslee’s response to the state Supreme Court’s McCleary education funding decision. Governor Inslee’s proposal would eliminate several tax exemptions including: • Repealing the sales tax exemption on vehicle trade-in difference valued over $10,000; • Repealing the Public Utility Tax exemption for the instate portion of interstate transportation; • Repealing the use tax exemption for extracted fuel (oil refineries); • Repealing refunds of sales tax to out-of-state residents; • Repealing the sales tax exemption on bottled water; • Repealing the sales tax exemption on janitorial services; and • Eliminating the preferential B&O tax rate for resellers of prescription drugs. It is highly unlikely that the 2014 legislature will pass any tax increases. More likely, lawmakers will wait until 2015 to address McCleary, which is likely to require an additional $2 billion in additional spending in the 2015-2017 budget.

BUILDING INSIGHT www.BIAW.com

SESSION UPDATE

BILL RUNDOWN // JAN HIMEBAUGH GOVERNMENT AFFAIRS DIRECTOR

LABOR RETREADS BIG BAD BILLS The usual series of troubling bills promoted by organized labor have made their annual appearance ESHB 1313 // Passed out of the house and requires all businesses with five or more employees to provide sick and safe leave. OPPOSE HB 2230// Requires employers to reimburse employees for an undefined “necessary business expenses,” including cell phones and chargers. This bill is so large and broad that necessary business expenses could be anything. OPPOSE HB 2672// Increases the state minimum wage, which is already the highest in the country, to $12/hr. OPPOSE HB 2332// Provides treble damages (vs the current double damages) plus attorney’s fees for wage violations by employers. OPPOSE HB 2333// Applies anti-retaliation language to the Minimum Wage Act, Industrial Welfare Act, Wage Payment Act, Prevailing Wage and Wage Deductions Act. If an employee files a complaint under any of these laws a presumption of retaliation has occurred if hours are reduced, employee is terminated for any reason, or the employee is not rehired. OPPOSE HB 2334// Assumes independent contractors are employees and forces employers to show proof that an independent contractor is not an employee by lengthy list of factors and tests. OPPOSE HB 2501// Requires all new contractors attend a pre-registration training class or face a $200 penalty for failure to attend. In addition, all contractors, even those with no employees, would be mandated to establish industrial insurance accounts with L&I and unemployment insurance accounts with Employment Security. This would require filing quarterly reports with both agencies, even if a business has no employees. OPPOSE There are two bills on the Labor & Workforce Development Committee agenda that BIAW does support HB 2258// Largely eliminates the cumbersome and difficult to enforce “7-part test” for independent contractor status, replacing it with a much simpler one that general contractors and government agencies can enforce. SUPPORT HB 2147// Creates an independent contractor certificate, whereby contractors that can show proof they are registered, have accounts with the necessary agencies, etc. can pay a fee of no more than $125 in order to receive a certificate that can be used as proof of independent contractor status to general contractors or government compliance officials. SUPPORT

9 Other bills we’re tracking HB 2161// Would require inter-local agreements before SEPA traffic mitigation impact fees can be collected by jurisdictions outside of where the development is located. Requiring jurisdictions to enter into these agreements before fees can be assessed provides certainty and predictability for project proponents. BIAW members, Kurt Wilson and Hans Korve offered the House Environment Committee testimony and shared on-the-ground experience. SUPPORT SHB 2414// Requires all toilets sold in Washington exceed federal toilet standards and only use 1.28 gallons per flush. The amended bill was expanded to include all fixtures and fittings with very limited exceptions. OPPOSE HB 2214 - SB 6018// Proposed by the Washington Association of Building Officials adds $2 all building permits to fund a code official’s training and apprenticeshp program. While BIAW members would benefit from properly and consistently trained code officials, there are concerns about the amount added onto the permit. Builders are hesitant to signal that the building permit is a prime place to fund programs. Building permits are for the public safety, not to serve as a place to tack on extra fees. OPPOSE HB 2249// Codifies the recently adopted rule of the SBCC to create only two climate zones for the Energy Code in Washington State. The model International Energy Conservation Code splits Washington’s four Northeast counties into different climate zones. This is good for BIAW members in Stevens, Ferry, Pend Oreille, and Okanogan counties. SUPPORT 2ESSB 5127// Would expand L&I’s structured settlement program for injured workers by removing the age limits of those eligible. SUPPORT SB 6307// Preempts local governments from setting minimum wage and benefits. SUPPORT SB 5275// Allows business to pay a temporary training wage. SUPPORT HB 2677 - HB 6461 // Would require jurisdictions to defer all impact fees to closing/certificate of occupancy for a builder’s first 30 building permits annually. This bill addresses concerns raised by Gov. Inslee in his veto message on similar legislation last year. BIAW has broad, bipartisan support—as in the past — and remains hopeful with the concerns addressed that the Governor will sign the bill this year. SUPPORT HB 2234 (DEAD) - HB 2245// Takes direct aim at WA’s vesting law. HB 2234 states that “no rights vest in the part or parts of a plan or regulation determined to be invalid.” Equally disturbing is HB 2245 which holds that development or land use applications for projects in areas recently added to urban growth areas would not vest until sixty days after publication of notice of the modified urban growth area or a final decision by the Growth Management Hearings Board that the added territory is in compliance which ever date is latest. These troubling bills would remove all regulatory certainty for land use applicants and would eliminate the ability for projects to estimate cost before deciding to begin a project. OPPOSE

HOUSE REPUBLICAN LEADER KRISTIANSEN TO DELIVER LUNCHEON KEYNOTE Representative Dan Kristiansen, R-39th District, Snohomish, will address BIAW Board of Directors and guests during the General Membership Luncheon on March 4. Kristiansen has served in the House of Representatives since 2003 and was elected leader of the House Republican Caucus in 2013. As a former small business owner and manager in the construction and building material fields, Kristiansen has extensive private sector experience which includes: budgeting, fiscal planning, employee management and hands-on experience dealing with state agencies. He is a strong advocate for small business and his top priorities as an elected official include improving Washington’s economy and encouraging job growth. Plan to attend this luncheon at the Red Lion in Olympia on Tuesday, March 4 at 11:30 am to hear what is happening in the House during this short session. $20 per person. RSVP your local association.

YOU’RE INVITED TO BIAW’S LEGISLATIVE RECEPTION WHERE: Red Lion Hotel WHEN: Tuesday, March 4 — 7 PM This event is open to all BIAW members statewide and we hope to see you there. Invited guests include all legislators and statewide elected officials, along with local government office holders. Come meet and greet your lawmakers, converse with them one-on-one and let them know how their votes and policy decisions impact you, your employees and your business.

FEBRUARY ‘14 VOL. 24, ISSUE 2

2012 WSEC

CLARIFICATIONS AND CORRECTIONS TO NEW CODE

// JAN ROHILA ADMINISTRATIVE SERVICES DIRECTOR

The Washington State Energy Code (WSEC), an amended version of the 2012 International Energy Efficiency Code, as well as the 2012 International Residential Code and others were adopted effective July 1, 2013. However, the review process is ongoing as builders and code officials began the process of actually using the code. As has happened in the past, there were questions, concerns and requests for interpretations and emergency rules by the State Building Code Council (SBCC) to clarify or correct the newly adopted code. If you took one of BIAW’s Code Update classes, read any articles in Building Insight or viewed the information posted on the BIAW website, here are some relevant changes or interpretations that have occurred since BIAW’s training program and/or the new codes took effect. The full interpretation or amendment for each can be found at BIAW.com under Online Resources and by selecting Building Code Updates. If you are interested in additional information, contact me at 800-228-4229, ext. 101 or janr@biaw.com.

CLIMATE ZONES // An emergency rule eliminated Climate Zone 6 in Ferry, Okanogan, Pend Oreille and Stevens counties and merged them into Climate Zone 5, alleviating any negative economic impact on these counties which were previously included in the same Climate Zone as the other counties in the eastern part of the state and by this rule merged into one zone.

VENTILATION // During the transition from the 2009 to the 2012 codes, the requirement to install a polyethylene ground cover in crawl spaces was not incorporated in the sections covering crawl space ventilation. An amendment to return vapor retarder (six mil black poly) requirements was approved as an emergency rule.

FOOTINGS // By Interpretation 13-02 the SBCC answered a question regarding underground footings, noting that underground footings do not make multiple buildings a one building structure. Further, factors defining a “building” include the fire separation, exterior walls and type of fire-resistance-rated wall assemblies used in the design and construction of the buildings. The Interpretation further clarifies the definition of duplex and townhouse and deciding factors in using the IRC or the IBC for construction.

HOT WATER PIPE INSULATION // By Interpretation 13-15 the SBCC noted it is allowable for R-3 insulation to be discontinuous where it passes through wall studs, floor joist or other structural members and where the pipes pass other piping, conduit. Additionally, where the piping is in an exterior wall cavity or other insulated space, no additional pipe insulation is needed if the insulation provides at least R-3 coverage around the piping.

LEAD CONTENT // An Emergency Rule will take effect April 1, 2014 limiting the maximum allowable lead content to not more than 0.25 percent in pipes, pipe fittings, plumbing fittings and fixtures intended to convey or dispense water for human consumption.

TOWNHOUSES // Currently there is a proposed revision that may impact townhome projects built under the 2012 IRC. Revisions to R302.2 will require either: 1. a common, 1-hour fire-resistance-rated wall assembly and a fire sprinkler system; or 2. a common, 2-hour fire-resistance-rated wall assembly with no plumbing or mechanical equipment, ducts or vents contained in the common wall cavity; or 3. two, one-hour fire-resistance-rated wall assemblies meeting the requirements for exterior walls. The townhouse proposed revision is currently open for public comment and will be voted on for adoption at the SBCC meeting on March 7. Your comments can be made at sbcc.wa.gov.

BUILDING INSIGHT www.BIAW.com

UNEMPLOYMENT INSURANCE NO LONGER MANDATORY FOR CORPORATE OFFICERS Washington corporations will no longer pay state unemployment taxes on their corporate officers unless a corporation requests coverage for all its officers and the Employment Security Department approves the request. Previously, eligible corporate officers were automatically covered for unemployment benefits unless the corporation asked to be exempted. Corporations must apply by March 1, 2014, to continue uninterrupted coverage for all of 2014. In another change, corporate officers who are covered for unemployment benefits may be eligible for benefits under new circumstances, even when some wages used on the unemployment claim are from the corporation. Corporations that don’t pay state unemployment taxes on corporate officers still must pay the full amount of federal unemployment taxes to the Internal Revenue Service. For more information or to access a voluntary-election form, businesses may visit esd.wa.gov/uitax/corporateofficers/faq.php

PETITION FILED WITH ECOLOGY GROUP SEEKS TO AMEND WRIA 18 EAST WATER RULE Last year at the request of the North Peninsula Building Association, BIAW provided financial support to the Olympic Resource Protection Council (ORPC), a nonprofit working to address problems created in Clallam County due to the promulgation of the Dungeness Water Management Rule in WRIA 18 East in January of 2013. ORPC has been critical of the rule because of its significant and unnecessarily costly impacts on Clallam County residents seeking to develop or redevelop their properties consistent with established county land use designations and planning policies. Given the recent ruling by the WA Supreme Court in the Swinomish v. Ecology case, ORPC has further concerns regarding the lack of legal authority for the rule. On January 21, 2014, ORPC filed a petition with the Department of Ecology (DOE) to amend the Dungeness Water Management Rule. In summary, ORPC states that DOE’s

recent approach to instream flow rulemaking has caused widespread legal uncertainty. ORPC urges DOE to amend the rule and work with all stakeholders to craft a balanced, effective and lawful water management rule for the Dungeness Basin. The group has asked DOE to use its alternate, existing reservation authority to set aside a sufficient quantity of groundwater, as required under the Water Resources Act, to meet the demand for domestic water under the County’s long-range land use planning instead of utilizing “overriding considerations of the public interest” (OCPI) to create a reservation. Ecology’s current use of the OCPI exception was rejected by the Washington State Supreme Court in the Swinomish Indian Tribal Community v. Skagit County decision in October 2013. The petition process is afforded under RCW 34.05.330 and requires the agency to provide a written response within 60 days of receipt.

Your Partner in Health Care

Tip of the Month Are you getting enough Vitamin D? It can be difficult to get enough Vitamin D while living in Washington, especially during the gray, winter months, but it is vital to our overall health. Do the following to make sure you get an adequate amount of Vitamin D, even while the sun is hiding. Exercise regularly Physical activity helps with the body’s natural production of Vitamin D. Eat nutrient rich foods Although diet alone typically does not provide enough Vitamin D, eating Vitamin D rich foods such as eggs, liver and salmon can be helpful. Take a supplement Some people may benefit from a Vitamin D supplement, but should consult a physician before taking any new medications. Get outside When the sun is shining, being outside for a limited amount of sun exposure is a great, natural way to make sure you are getting enough Vitamin D.

Under this statute the agency must choose one of two alternatives: it can deny the petition or engage in rule-making. If they deny the petition, they must specify its reasons for the denial and specifically address concerns raised in the petition. Where appropriate, the agency must indicate alternative how the agency will address the concerns raised in the petition. For more information, visit www. OlympicResourcePC.org.

FEBRUARY ‘14 VOL. 24, ISSUE 2

VALUE OF DESIGNATIONS

CERTIFIED GRADUATE ASSOCIATE (CGA) //

The award-winning BIAW Education Program offers advanced degree programs to building industry professionals that enhance their business savvy, broaden their areas of expertise and increases their marketability. In today’s changing housing market, what better way to get ahead or maintain your edge on the competition than a // AMANDA FIELDS professional designation? Designations can lead to more earned income, credibility and prestige EDUCATION for members and their companies.

CERTIFIED GRADUATE BUILDER (CGB) //

LEADERSHIP, CREDIBILITY AND PRESTIGE

PROGRAM MANAGER

Professional designees stay up to speed on the latest developments in business, building methods, and technology while showing clients they have the know-how and dedication to earn a professional designation. Potential clients can use designations to help identify and select professionals with superior training, real-world experience and in-depth knowledge of their area of need. Designees are listed in the Professional Designation Directory on both BIAW.com and NAHB.org, making their contact info easily accessible to consumers. Access to real-world information and great leadership opportunities are benefits typically mentioned by designees. However, graduates also routinely express that the chance to network with expert instructors and their peers is a huge plus. BIAW course instructors are experienced practitioners in their respective areas of instruction and go above and beyond to guide and mentor students even after classes are complete—it is this commitment and dedication to the industry that has earned many of them top honors by NAHB, BIAW and their local associations for their commitment and contributions to education. Earning a designation from NAHB is hard work and the rigorous coursework is continually being elevated. Still, according to NAHB statistics, builders and remodelers are eager as ever to enroll. In many programs, there are twice as many people in the process of earning a designation as those currently holding one. “A designation requires us to study and learn more about our industry. It says to our clients, I am continually improving myself as an industry professional by studying the best practices of our national industry,” says BIAW President Bob Johnson, CAPS, CGP. “It also says that I am using that knowledge gained from the collective experience of our industry to give my clients a better end result in their project.” BIAW’s commitment to offering industry professionals the best, most-extensive continuing education program is evident in the diverse array of programs offered. Most designations cover industry basics such as marketing and business techniques, however, specialized coursework includes aging-in-place remodeling, property management, green building and more.

Please see DESIGNATIONS on page 13

BUILDING INSIGHT www.BIAW.com

Developed specifically for NAHB associate members (including suppliers of materials and financial services), the CGA program offers participants an opportunity to enhance their knowledge of home building industry fundamentals.

An overview of key areas in today’s home building industry, the CGB curriculum covers business management, financial strategies, marketing techniques, construction technologies and more.

GRADUATE MASTER BUILDER (GMB) // The GMB program allows industry professionals who already have completed either the Certified Graduate Builder or the Certified Graduate Remodeler course to more fully develop their skills and provides in-depth instruction geared for experienced building professionals.

CERTIFIED GREEN PROFESSIONAL (CGP) // NAHBs’ Certified Green Professional™ Designation teaches builders, remodelers and other industry professionals techniques for incorporating green building principles into homes—without driving up the cost of construction GMB.

MASTER CERTIFIED GREEN PROFESSIONAL (MCGP) // The Master Certified Green Professional designation comprises a more in-depth study of green building science and methods. The courses required for the designation cover topics like building science techniques, the high-performance home and marketing strategies for selling green

CERTIFIED GRADUATE REMODELER (CGR) // An exclusive professional designation that emphasizes business management skills as the key to a professional remodeling operation, the CGR designation trains remodelers in project management, design estimating and job cost, along with other core skills relevant to the remodeling industry.

GRADUATE MASTER REMODELER (GMR) // The Graduate Master Remodeler (GMR) program includes advanced and updated courses geared toward experienced remodeling professionals.

CERTIFIED AGING-IN-PLACE SPECIALIST (CAPS) // An exclusive professional designation that emphasizes business management skills as the key to a professional remodeling operation, the CGR designation trains remodelers in project management, design estimating and job cost, along with other core skills relevant to the remodeling industry.

CERTIFIED NEW HOME SALES PROFESSIONAL (CSP) // The CSP program is designed to help specialists in new home sales to enhance their professional image, increase their marketability in the home building industry and sell more homes.

DESIGNATIONS from 12 Through the BIAW Education Program, industry pros can earn professional designations from NAHB. For more information about these designations and class schedules, click on Education from the BIAW Programs tab at www.BIAW.com. Join this elite group of hard-working and accomplished professionals by contacting me at amandaf@biaw.com or 360-352-7800, ext. 114.

AFFORDABLE CARE ACT

IMPLEMENTATION CONSIDERATIONS

Many new taxes connected with the Affordable Care Act (ACA) come in to effect in 2014 and some of them may come as a big surprise to many taxpayers. It is important to keep in mind how these new taxes may affect you and your company when making health insurance decisions for the coming year. While the BIAW always // WILL COMPTON recommends you consult a tax professional before making any decisions, below are a few things CAPITAL to consider given the many changes with regards BENEFIT SERVICES to the ongoing implementation of the ACA. Guest Columnist Thinking of dropping your group insurance plan? Make sure you and your employees know that plans purchased on the state-run “exchanges” are purchased with after tax dollars. Having a group health insurance plan allows for pretax dollars to be used to pay for health care premiums, which can add up to big savings. A new Medicare tax could reduce your paycheck. Individuals earning more than $200,000 (and joint-filers earning more than $250,000) are subject to a new 0.9 percent Medicare payroll tax on their income. Pay attention to new health care related contribution limits. In 2014, the limit on contributions to Flexible Spending Accounts has been reduced to $2,500 per person, per year. Not having insurance will cost you. As of Jan. 1, 2014, all Americans are required to have health insurance. The penalty for being uninsured will be assessed as part of an individual’s taxes and starts small. For 2014, it is the greater of $95 or 1 percent of taxable income and increases significantly in the following years; up to the greater of $695 or 2.5 percent of taxable income in 2016. The ACA undoubtedly affects each and every company in different ways. While some see the real benefits of the law’s implementation, some do not. Either way, it is incumbent upon you to understand the ramifications of the law and ensure that you and your employees are covered. Your partner in health care, the BIAW Health Insurance Trust, is committed to supporting members and helping them find employee benefits that are both affordable and provide certainty in an ever changing and uncertain health insurance environment. Get answers to your health insurance questions by contacting me at Capital Benefit Services. n 800-545-7011, ext. 1237 n wcompton@epkbenefits.com n CapitalBenefitServices.com

FEBRUARY ‘14 VOL. 24, ISSUE 2

BUILDING PERMITS US CENSUS BUREAU STATISTICS A

SINGLE MULTI FAM. FAM.

NOV. 2013

YTD 2013

NOV. 2012

YTD 2012

BENTON 54 20 74 1,045 102 1,294 CHELAN 10 0 10 162 8 130 CLALLAM 3 0 3 81 7 107 CLARK 104 17 121 2,591 137 1,343 COWLITZ 3 0 3 94 10 96 DOUGLAS 11 0 11 119 16 85 FRANKLIN 28 15 43 607 60 745 GARFIELD 0 0 0 0 0 2 GRAYS HARBOR 5 0 5 59 2 61 ISLAND 14 0 14 156 11 124 JEFFERSON 1 0 1 73 3 58 KING 370 912 1,282 11,210 762 3,747 KITSAP 15 18 33 420 45 433 KITTITAS 11 0 11 195 9 124 LEWIS 5 0 5 91 24 26 MASON 8 0 8 109 4 109 OKANOGAN 5 0 5 90 6 90 PEND OREILLE 0 0 0 1 0 3 PIERCE 153 23 176 2,711 129 2,156 SAN JUAN 4 0 4 79 12 89 SKAGIT 19 0 19 246 15 208 SKAMANIA 0 0 0 27 4 27 SNOHOMISH 100 66 166 4,025 172 3,295 SPOKANE 57 48 105 1,151 148 869 STEVENS 0 0 0 3 0 0 THURSTON 23 3 26 900 60 694 WALLA WALLA 4 0 4 122 4 42 WHATCOM 26 0 26 647 16 316 WHITMAN 1 0 1 345 13 261 YAKIMA 9 0 9 110 16 115 WA STATE 1,043 1,122 2,165 27,469 1,797 23,674

HOUSING MARKETS CONTINUE CLIMB BACK TO NORMAL Kennewick and Wenatchee continue on the list of the 58 markets out of the approximately 350 metro areas nationwide returned to or exceeding their last normal levels of economic and housing activity, according to the NAHB/First American Leading Markets Index (LMI), released on February 6. This represents a net gain of two from the previous month. The index’s nationwide score ticked up a

BUILDING INSIGHT www.BIAW.com

SINGLE MULTI FAM. FAM.

DEC. 2013

YTD 2013

DEC. 2012

YTD 2012

BENTON 31 40 71 1,116 125 1,419 CHELAN 6 0 6 168 4 134 CLALLAM 11 0 11 92 4 111 CLARK 112 5 117 2,822 160 1,503 COWLITZ 10 0 10 104 2 98 DOUGLAS 9 0 9 128 5 90 FRANKLIN 29 21 50 655 57 796 GARFIELD 0 0 0 0 0 2 GRAYS HARBOR 0 0 0 59 1 62 ISLAND 7 0 7 160 5 129 JEFFERSON 3 0 3 76 1 59 KING 319 765 1,084 12,295 698 4,128 KITSAP 28 0 28 448 28 461 KITTITAS 11 0 11 206 7 131 LEWIS 4 0 4 95 4 121 MASON 7 0 7 116 10 119 OKANOGAN 2 0 2 92 1 91 PEND OREILLE 0 0 0 1 0 3 PIERCE 149 10 159 2,859 167 327 SAN JUAN 14 0 14 93 3 92 SKAGIT 18 0 18 264 16 224 SKAMANIA 2 0 2 29 0 23 SNOHOMISH 121 213 334 4,359 175 3,618 SPOKANE 40 0 40 1,191 39 908 STEVENS 0 0 0 3 0 0 THURSTON 34 0 34 934 37 724 WALLA WALLA 1 0 1 123 56 98 WHATCOM 19 0 19 666 20 336 WHITMAN 4 0 4 350 20 336 YAKIMA 11 0 11 122 13 128 WA STATE 1,002 1,054 2,056 29,626 1,800 25,617

NAHB/FIRST AMERICAN LEADING MARKET INDEX - FEBRUARY 2014 Rank METRO AREA Overall Permits Prices Employment 41 53 77 94 112 158 172 180 185 250

Kennewick Wenatchee Spokane Seattle Bellingham Yakima Olympia Mt. Vernon Bremerton Longview

1.03 1.00 .97 .94 .91 .86 .85 .84 .84 .79

percentage point to .87. This means that based on current permits, prices and employment data, the nationwide average is running at 87 per-

.85 .63 .64 .58 .28 .40 .37 .40 .33 .30

1.29 1.44 1.36 1.30 1.55 1.26 1.29 1.21 1.29 1.14

.95 .94 .93 .93 .91 .93 .90 .91 .90 .92

cent of normal economic and housing activity. The Spokane, Bellingham and Longview markets each ticked up a point from January.

HOME SALES NORTHWEST MULTIPLE LISTING SERVICE B

NWMLS STATISTICAL SUMMARY BY COUNTIES MARKET ACTIVITY SUMMARY - JANUARY 2014

SF HOMES & CONDOS LISTINGS

A Only counties reported are represented in state totals. Permit data is most current available as of press time. For a complete listing of current and archived building permits, click Online Resources at BIAW.com. B The information provided is published by the Northwest Multiple Listing Service (NWMLS), it covers 21 counties in the state of Washington and is headquartered in Kirkland. Effective with January 2014 reports, NWMLS is calculating months of inventory using closed sales, rather than pending sales.

Clallam Clark Cowlitz Ferry Grant Grays Harbor Island Jefferson King Kitsap Kittitas Lewis Mason Okanogan Pacific Pierce San Juan Skagit Snohomish Thurston Whatcom Others MLS TOTAL

New Total Listings Active 73 300 61 183 117 392 1 53 86 416 132 641 140 554 61 339 2,605 4,110 384 1,170 56 303 104 593 104 554 31 340 39 328 1,246 3,070 28 298 202 646 1,085 2,155 374 1,093 300 1,102 113 555 7,342 19,195

PENDING SALES CLOSED SALES

Number Pending 54 41 91 4 60 108 122 41 2,629 348 51 85 78 30 31 1,234 16 159 1,195 341 239 87 7,044

Number Closings 42 31 62 3 43 61 87 30 1,674 225 35 49 58 19 18 709 22 78 615 240 148 57 4,306

Average Price $189,538 $269,806 $155,694 $213,333 $165,813 $122,909 $283,308 $249,646 $453,643 $257,655 $264,244 $152,740 $132,990 $171,261 $175,389 $235,038 $473,182 $240,596 $296,994 $220,262 $283,370 $264,749 $327,444

MONTHS SUPPLY

Median This Same Mth Price Month Year Ago $160,000 7.14 9.81 $225,000 5.9 7.0 $139,950 6.32 8.09 $190,000 17.67 74.0 $149,000 9.67 8.83 $100,500 10.51 15.43 $239,900 6.37 9.08 $191,250 11.3 11.28 $364,875 2.46 2.16 $213,000 5.2 6.56 $217,900 8.66 13.24 $142,000 12.1 11.56 $143,750 9.55 16.69 $155,000 17.89 12.31 $132,350 18.22 24.15 $212,500 4.33 4.06 $386,000 13.55 24.9 $218,000 8.28 7.73 $269,000 3.5 2.17 $208,250 4.55 5.43 $251,750 7.45 7.56 $183,000 9.74 10.23 $255,055 4.46 4.2

“Firming home prices NWMLS Four-County Puget Sound Region Pending Sales, SF and Condo are hastening the return King, Snohomish, Pierce and Kitsap Counties of normal economic and Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Yearly housing activity in an 2006 5275 6032 8174 7651 8411 8094 7121 7692 6216 6403 5292 4346 80707 increasing number of 2007 4869 6239 7192 6974 7311 6876 6371 5580 4153 4447 3896 2975 66883 markets,” said NAHB Chief 2008 3291 4167 4520 4624 4526 4765 4580 4584 4445 3346 2841 2432 48121 Economist David Crowe. 2009 3250 3407 4262 5372 5498 5963 5551 5764 5825 5702 3829 3440 57863 “The healthiest markets 2010 4381 5211 6821 7368 4058 4239 4306 4520 4350 4376 3938 3474 57042 2011 4272 4767 6049 5732 5963 5868 5657 5944 5299 5384 4814 4197 63946 continue to be centered in 2012 4921 6069 7386 7015 7295 6733 6489 6341 5871 6453 5188 4181 73942 smaller metros that boast 2013 5548 6095 7400 7462 7743 7374 7264 6916 5951 6222 5083 3957 77015 strong local economies, particularly in the oil and from the Bureau of Labor StatisBureau. gas producing states of Texas, North tics, house price appreciation data Visit NAHB’s EyeOnHousing.org for Dakota, Louisiana and Wyoming.” more discussion on economics and from Freddie Mac and single-family Editor’s Note: In calculating the housing policy. housing permits from the U.S. Census LMI, NAHB utilizes employment data

FEBRUARY ‘14 VOL. VOL.24, 21, ISSUE 2

CONGRATULATIONS to the following companies for maintaining a CLAIM FREE* record! ABENROTH BUILDERS ADVANCED INDUSTRIAL COATINGS ALL SEASON ROOFING CO. AURORA QUALITY BUILDING, INC. BECKEMEIR CONSTRUCTION BOISTFORT VALLEY BREAKING GROUND EXCAVATION CANYON VIEW EXCAVATING, INC. CASCADE DAMP PROOFING, LLC CATALYST CONSTRUCTION, INC. CENTRAL WASHINGTON EXCAVATING, INC. CHEHALIS MINI-STORAGE CRABREEE DRILLING CO. STEVE CRASS CONSTRUCTION CREEKSIDE CONTRACTING, LLC D & D TRI RIVERS EXCAVATING, INC. ENTERPRISE ELECTRIC, INC. EXCEL ELECTRIC, INC. GECHO CONSTRUCTION, INC. GREACEN CONSTRUCTION, INC. FINN HILL MASONRY INLAND CALIFORNIA INTERIOR RESOURCES J R APPLICATIONS, INC. JACOBSON & CO. JOHNNY’S SEPTIC SERVICE, WHATCOM KARVONEN ENTERPRISES, INC. KARVONEN SAND & GRAVEL, INC. KING KONCRETE, INC. KOHLER PLUMBING KRIS S. FORSGREN ROOFING L S E, INC. LENGCO CONSTRUCTION, INC. M C SQUARED, INC. M J W, INC. MONEY SAVER, ANACORTES II, LLC MONEY SAVER, ARLINGTON, LLC MONEY SAVER, LACEY ASSOC., LLC MONEY SAVER, MUKILTEO ASSOC., LLC MONEY SAVER, OLYMPIA, LLC MONEY SAVER, TUMWATER ASSOC., LLC MOWRY TILE, INC. NEWTON ENTERPRISES NW, LLC NUVISION ENGINEERING, INC. NYLUND HOMES, INC. OLIN HOMES, LLC ORCAS SEPTIC SERVICES P S S, LLC PERFECT PAVERS, INC. PRECISION PAVING & GRADING, INC. RAINS CONTRACTING, INC. RAVNIK & ASSOCIATES, INC. ROCK PLACING CO. ROSENBACH PLUMBIG, INC. SCHNEIDER AND SON SIERRA CONCRETE SILVERLAKE, LLC STONECREST BUILDERS, INC. DAN TAPANI EXCAVATING, LLC J D WALSH & ASSOC., PS WHIDBEY RESIDENTIAL RENTALS, INC. WINDWOOD LANDSCAPE, INC. WINSLOW MASONRY, INC.

*no claims within the past 10 years.

Building Industry Association of Washington 111 21st Avenue SW • Olympia, WA 98501 360-352-7800 • Fax: 360-352-7801 800-228-4229 • BIAW.com

Presorted Standard U.S. Postage PAID Olympia, WA Permit No. 692

Return On Industrial Insurance

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Make real change. Applications are now being accepted for the 2014-2015 R.O.I.I.® Select plan year. For more information, contact: R.O.I.I.® Select Marketing Manager Lara Hastings 800-228-4229, ext. 171 • larah@biaw.com