SIERRA STRATEGIES, LLC
Nevada Housing Alliance
June, 2009
2009 Legislative Session Review
The 75th Session of the Nevada Legislature ended on time on June 2, 2009. As was anticipated, the big news of the session was the budget crisis and the resultant tax package passed by the Legislature and subsequently vetoed by the Governor. The gubernatorial veto was easily overridden in the Assembly and the Senate. The record $781 million tax increase was accomplished without increasing gaming, mining, fuel (except for a Washoe County voter-authorized gas-tax to pay for regional transportation projects), tobacco or liquor taxes. The package includes the Modified Business Tax (payroll tax), which was tiered with a reduction in the first tier and an increase in the second tier; an increase of the statewide sales tax by .35%; a doubling of the annual Business License Tax of $100 per annum per entity to $200 per year; and the depreciation of vehicles for registration purposes is frozen for next year.
The Modified Business Tax, sales tax and Business License Tax increases will become effective on July 1, 2009 and will sunset on July 1, 2011. On the first $62,500 of eligible payroll per calendar quarter, the rate is reduced to .5% from .63%; for eligible payroll over $62,500 per quarter the rate was increased to 1.17%. The balance of the revenue package is comprised of a county property tax diversion of 4 cents per $100 of assessed value from Washoe and Clark counties as well as a diversion from local governments of 5 cents from Capital Improvement Project budgets. State employees received a 4% per year pay decrease by requiring all but essential service employees to take one unpaid furlough day per month. The Public employees Retirement System and the Public Employees Benefit System were reformed, but current employees were not affected. The reforms apply to those who begin employment with the State on or after January 1, 2010.
MANUFACTURED HOUSING INDUSTRY
Of the two legislative proposals sought by the industry, one passed, SB89, and one died, AB 539. SB 89 was supported by the Department of Business & Industry, and NHA. The key components of this bill supported by NHA include the following: permits escrow accounts to be used in sales transactions as an alternative to trust accounts; authorizes audits by the Division of financial accounts of dealers and distributors; creates regulations for education of dealers/distributors and revises procedures for determining fair market value of manufactured homes under certain circumstances. AB 539, which provided for the merger of the Manufactured Housing Division with the Housing Division, did not receive a hearing due to Speaker Buckley’s strong and continuing opposition to the merger. Although the Department of Business and Industry reached out to the Tenants’ Association, the tenants remained opposed to such a merger.
The Department of Business and Industry has posted a job opening for a new Administrator of the Manufactured Housing Division. The job posting will be open until July 13, 2009. The job will be moved to Carson City from Las Vegas. Any industry representatives who are interested in the position are encouraged to apply. Other notable bills tracked by Sierra Strategies included AB 454 and AB 523. AB 454 attempted to require park owners to pay tenants $5,000 for the removal of a mobile home. The bill also proposed to allow tenants an additional day to stay in a home before eviction upon a judicial order to leave the property. The bill died on the Senate floor on the last day of the session. AB 523 implements the federal SAFE Act – Secure and Fair Enforcement of Mortgage Licensing Act. This legislation establishes provisions for the licensing and registration with the nationwide mortgage licensing system and registry of residential mortgage loan originators to comply with federal law. The bill was also amended to revise provisions relating to grounds of termination for certain rental or lease agreements affecting certain tenants in a manufactured home park and providing for a 4 year term instead of a 2 year term for board of directors or trustees of a mobile home park owned or leased by a nonprofit organization. Specifically, section 84.1 restates that a rental agreement may only be terminated on one or more of the grounds already in law. Lastly, AB 423 attempted to change the law to provide for rent control in mobile home parks but was defeated.
There are rumors a special session will be called if the economy continues to decline. The tax package was based on Economic Forum numbers which might need to be revised if gaming revenues continue to decline and/or if the Modified Business Tax increases do not meet projections due to further increases in unemployment and layoffs. We will be monitoring these events for your industry.
Elections
Elections | NMHA Board of Directors
Nevada Housing Alliance
527 Lander St., Ste 102
Reno, NV 89509
Dear NMHA Member:
As required by the NMHA bylaws, elections of the NMHA Board of Directors shall take place at the Annual Membership Meeting. The 2008 Annual Meeting and Board of Directors election will be Wednesday, April 29 via conference call at 10:00 AM. Call information is as follows (866) 866-2244 the put in participant code 1937217. The nominating committee submits the following list of candidates for the board positions. All are members in good standing and all have agreed to serve to the best of their ability.
Two Year Terms
President – Leo Poggine, Craftsman Homes
Vice-President – Deanna Paynter, BofA Home Loans
Past-President – Jeff Carter, GE Capital
Retailer – Jim Blackwell, Easy Living Homes
Lender – Brad Waite, Land Home Financial
Community Rep. – Jerry Govan, Global Alliance Foundation
Developer – Dick Hersey, Sierra Estates
Retailer - Leo Poggione, Craftsman Homes
Installer/Supplier – J. C. McKendrick, J&P Enterprises
Retailer - Keith Bantz, Sierra Homes
Retailer – Albert Johnson, Country Homes
Retailer – Kim Davis, Sage Homes
Manufacturer – Jessie Davis, Skyline
Manufacturer – Alan Lemley, Karsten
ANNOUNCEMENT -NEW NV CONTACTS
ANNOUNCEMENT —- NEW NEVADA CONTACTS
Starting March 2009 all Nevada Housing Alliance correspondence, calls, inquiries, emails, faxes, and accountings shall be addressed to:
Nevada Housing Alliance
c/o Lesley Pittman, Sierra Strategies
527 Lander Street, Suite 102
Reno, Nevada 89509
Office: 775-787-8436
Fax: 775-787-8536
Email:
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MHI National in Reno April 14-16
MHI National Congress and Expo
April 14-16 2009
Paris Hotel, Las Vegas, Nevada
We know it is tough out there. Major players in our economy – many of whom were considered recession- proof – are suffering. But we are here to tell you good times will be here again, and for our industry, they may be here sooner than you think! The National Congress & Expo is the largest annual national tradeshow for the manufactured housing and modular housing industry sectors. Register by March 18 at www.congressandexpo.com to take advantage of the early bird registration. The Congress & Expo is well known for its series of highly regarded educational sessions and programs presented each year. It is also draws a crowd, including hundreds of community owners and operators, builders and developers, and manufacturers.
Three Reasons Why YOU Need to Be in Las Vegas in April: • With a new $8,000 tax credit for first-time homebuyers, changes and updates to FHA, and consumers looking for homes they can afford, our industry is ready to come BACK. You’ll need to learn the rules, and how to take advantage of the extraordinary opportunities the industry can offer. • Did you know manufactured and modular housing actually INCREASED market share of new homes in 2008? Did you know community owners and retailers are starting to report an increase in traffic? Now is the time to get in the game, not get out! • You can’t be an ostrich and be successful. Business may be slow now, but you still need to get out there, strut your stuff, and make sales.
The Congress & Expo offers you the BEST place to do business. AND- Las Vegas is easy to get to, with cheap airfare and discounted hotel rates, you can do Vegas for under $1000. We guarantee it is WORTH it! Nevada Housing Alliance members get a discount on Congress registration!
Nevada Housing Alliance members get a discount on Congress registration!
Entrepreneurs are generally an optimistic group. But given enough bad news, even they can turn negative. And lately, so much of the news on the front page has been bad, really bad. So how have successful business owners responded to the credit crisis, housing mess, Wall Street turmoil and other lousy news? They keep showing up. They open their doors every day. They call on prospective clients. They tighten their belts. They try new marketing. They do whatever it takes to keep their business going. And if that doesn’t work, they try something else. We can’t control the economy, but we can control how we, as an industry, respond to these difficult times.
At the Housing Alliance, we’re not immune to the bad economic news. But we are taking our own advice and we keep showing up. Everyone in this business wants it to prosper and grow. We produce top quality energy-efficient homes and provide safe, friendly, economical community lifestyles.
There is a demand for our products and services, and there are many manufacturers, retailers, developers, suppliers and community owners who would provide manufactured housing if the opportunities existed. This is the message we need to get through to the public, media and our lawmakers. You can’t preserve or grow an industry by choking it with regulatory interference and restrictions. I’m optimistic that we will make headway this year on regulatory and legislative issues that are critically important to the factory-built industry.
I am confident that even though the financial lending is slow, our members will find ways to keep their businesses profitable and successful. A soft economy is the perfect time to sharpen your skills and try new resources and techniques. Let’s focus on what we can control. We just have to keep showing up.
With all the challenging issues we have on the table this year, I encourage every member to help your state association. By now you should have received your annual membership renewal forms. Maintain your annual dues, contribute to the Housing Alliance Political Action Committee (PAC), attend annual convention and continuing education classes. We are only as strong as our membership, so please become involved and make this a positive year where we implement goals that will help us stay a strong association and help you grow as a vital component of the nation’s housing stock. Keep showing up!
Linda Lindholm
Governor's State of the State
GOVERNOR'S STATE OF THE STATE
By Tracey Woods
In a highly anticipated speech, Governor Gibbons announced his budget for the 2009-2011 biennium on January 15th in the Assembly Chambers in Carson City. Faced with the daunting task of submitting to the Legislature a constitutionally required balanced budget proposal during an economic crisis, the Governor outlined the major provisions before a packed room of legislators, guests and the press. The Republican governor’s proposed $6.17 billion budget for the next two years has $2.3 billion in cuts and revenue enhancements. True to his long held aversion to tax increases, the Governor’s proposal included no tax increases, instead focusing on cuts to education, a temporary 6% cut to state employee salaries, changes in state employee benefits, and the streamlining of government services through the merging of various departments within state government. In addition, the budget proposal diverts to the State 4 cents of every $100 in assessed valuation of property tax currently earmarked for Washoe and Clark Counties.
The Democratic response to the budget was predictable in its opposition to the proposed cuts, particularly in education. Speaker Barbara Buckley again reiterated her intent to overhaul the tax system’s structure to avoid future cuts to the state budget in times of fiscal crisis. She has yet to outline her proposals to the budget, but it is expected she will hit the ground running with her proposals on February 2nd, the first day of the 120 day legislative session. The Assembly has a veto -proof Democratic majority. The Senate Democrats need only 2 votes from the Republican side of the aisle to override the Governor’s veto. It will be an interesting political fight, no doubt.
Of special note to the manufactured housing industry, the Governor is proposing to merge the Housing Division with the Manufactured Housing Division. In his address, the Governor stated, “We are also going to reduce state government expenses through agency consolidations and by elimination of duplicate service providers. For example, we eliminate redundancy and provide better services for our citizens by bringing all the various Consumer Affairs offices into one agency and by combining government agencies, such as Tourism with Economic Development and the Division of Housing with the Division of Manufactured Housing.” The Governor’s office also cites the benefits of cross-training and tax credits as needed benefits to the manufactured housing industry which would result from the merger.
Nevada is expected to be one of the top recipients of federal economic assistance from the Stimulus Package. We all continue to await the actions of the new President as his first 100 days in office unfold. As the state with the dubious distinction of having the highest foreclosure rate in the nation, it is certain we will get additional federal assistance, but how much will remain to be seen. As gaming and sales tax revenues continue historic declines in Nevada, the Legislature is in the driver’s seat in terms of solutions to the crisis. We wish them well in their deliberations and decisions. We will keep you abreast as the Legislative session roles out.