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TN Home Builders Association 2012 Legislative Policy Agenda

Excerpted from the Home Builders Association of Tennessee‘s “Legislative Briefing,” Jan. 26, 2012:

2012 Legislative Agenda

The Home Builders Association of Tennessee Board of Directors approved the 2012 Legislative Agenda during the membership’s recent Fall Annual Meeting. We have worked diligently to craft the proper language of the proposed legislation and to secure outstanding sponsors who will carry the bills in both the Senate and the House…

Tennessee Home Construction Jobs Development Act

The legislation (SB1296-Johnson /HB0730 Casada) is more commonly referred to as the Building Homes – Building Jobs Act.

This legislation is a carry-over from 2011. Construction, especially homebuilding, is one of the state’s weakest sectors. From the employment peak in 2007 to the fall 2010, construction employment estimates indicate a loss of 36,300 jobs. The loss of 36,300 jobs resulted in a loss of $9.08 billion in output, $2.69 billion in earnings, 72,600 total jobs, and $168 million in state taxes. A substantial share of the shortfall of state taxes was associated with the decline in this industry. The positive effect of this proposal on the creation of approximately 4,900 new jobs across the state is borne out in a recent study by the Sparks Bureau of Business and Economic Research at the University of Memphis. This economic development legislation, which would grant $6,000 to approximately 1,666 new home buyers, would have a positive impact on every county and every community in Tennessee.

Legislation to Prevent Single Family Residential Fire Sprinkler Mandates

Simply put, proposed legislation (SB2492 Tracy/HB2639 Watson) would mimic several other states’ legislation that prevents any county, municipality, city or town from requiring the installation of fire sprinklers in single-family residential construction. Legislation would NOT prevent nor dissuade any home buyer or homebuilder from installing fire sprinklers. It just would prevent any mandates to require them. It is our belief that current building codes offer significant fire safety features, including the installation of hard-wired smoke detectors, in new construction. A recent University of Tennessee study underscores the fact that the majority of fire safety issues are in those homes built using pre-1998 building code construction.

Tennessee Public Improvement District Act

This legislation (SB1865 -Overbey / HB1643-Dennis) is also a carry-over from 2011. The legislation, based on similar current laws in Alabama, Mississippi, Arkansas, Florida, Georgia, Texas and Louisiana, would provide an alternative financing mechanism for municipalities and developers to pay for infrastructure needs. With the current state of the financial markets, which limit borrowing for these type projects, we see this as an option that will serve as an economic development tool for cities, counties and developers that will help stimulate new housing construction opportunities.

Property Tax Relief Legislation

As proposed, this would be enabling legislation that would allow counties to delay the reassessment of improved land until a time at which the property is sold to the first owner. Currently, the land is reassessed once a plat has been recorded to subdivide the land into lots and again when the builder improves the lot with constructing a new home. This legislation would defer the reassessment until the lot is sold to a builder and the lot would not be reassessed until a new home is sold to a homeowner. This deferral would significantly help our members during recessions to carry their real estate for longer periods of time by significantly reducing their annual carry costs.

Tax Assessor Legislation

Proposed legislation would require that the Tax Assessor’s office establish new parcel ID numbers immediately upon recording a subdivision plat after January 1 in a given year. As it stands now, the Assessor establishes a parcel ID number for each parcel of real estate on January 1 of each year. No matter what happens to that property throughout the year, even if it is subdivided and homes are constructed on it, when the tax bill comes out, it is billed under one number.

If a closing occurs prior to January 1 of the following year, then taxes must be paid on the entire property. But if it is still under the original parcel number, then the seller has to pay the entire tax bill, even on land that the seller doesn’t own. A closing cannot take place without the entire tax bill being paid.

The proposed legislation requires the Assessor to establish parcel identification numbers for subdivided lots effective at the time subdivision plat is recorded rather than waiting for the following January. The Assessor shall prorate the assessment on such real property for the year for the parent parcel from January 1 to the date of subdivision. And for resulting parcels, the assessment would cover the period from the date of the subdivision to the year-end. Any supplemental tax resulting from added value, shall be assigned exclusively to such resulting parcel to which the value was added.

As always, your assistance in helping educate your legislators on the importance of these issues will be most important in securing successful passage of these matters. As you look at the emphasis of our proposed legislation this year, you will see the one overriding powerful belief, and that is:


Business and Economy Education NewsTracker Tax and Budget

Lambuth Creditors Want Lawyer; Students Start at UM Campus

Students start to school this week at the University of Memphis Lambuth campus. The collapse of Lambuth University, a private, four-year school in Jackson — and its transition to public — hands has been well-documented by the Jackson Sun, which reports today that the piper is calling:

A group of unsecured creditors is seeking legal representation from Milan attorney Stephen L. Hughes in Lambuth University’s Chapter 11 bankruptcy protection case. …

According to court documents filed Aug. 3, Lambuth has more than $9 million in total debt.

Officials estimated 150 to 250 students had signed up for classes as of Aug. 10. The private school’s final spring semester started with around 400 students.

The hometown paper’s editorial board has put a positive spin on the transition to the University of Memphis, predicting it “will be a game changer” in terms of local economic development.

The city of Jackson, Madison County, West Tennessee Healthcare, and the Jackson Energy Authority agreed this summer to purchase the campus for $7.9 million, then turn the campus over to the state Board of Regents.

The state budget included $11 million over three years to “to help subsidize the University of Memphis’ operating expenses while developing the Lambuth campus,” the AP reported. If this Tennessean report is a clue, the bill is likely to grow:

The University of Memphis faces $3.5 million in “near-term” costs for safety repairs and access for the disabled, and $15 million in longer-term maintenance at the Lambuth University campus, a state report issued Thursday concludes.

That money is above and beyond funding already pledged by the state and other sources.

Education News NewsTracker

Haslam Asks For $5 Million For State Takeover of Lambuth

The state is moving closer to taking over Lambuth University, a troubled private college in Jackson whose finances have been in turmoil and recently announced it would close in June.

The Jackson Sun reports that Gov. Bill Haslam has asked the legislature to set aside $5 million to enable the University of Memphis to take over the Methodist school, which even the star power of Bill Cosby was unable to save.

Haslam’s request, presented to the Senate Finance Committee, is contingent on Jackson and Madison County officials and other community leaders raising $15 million to $19 million. The locally raised money would be used to pay off Lambuth’s debt — which is about $10 million — and to pay for campus repairs and maintenance needs.

Inside Higher Ed has one of the best Cliffs Notes versions of the school’s meltdown, from its failure to meet payroll, the loss of its accreditation, and various proposals which didn’t pan out to partner with for-profit groups.

The Jackson Sun has posted a timeline tracking the school’s history.

Education News

Haslam Praises Tech Centers for Efficiency, Putting Grads in Jobs

While the state’s four-year schools would reduce spending by the millions under Gov. Bill Haslam’s budget, public trade schools that turn out welders, cosmetologists and repairmen will face more modest cuts that average less than $50,000 per school.

The plan, which largely shields the state’s technology centers from a proposed 2.5 percent decrease in state spending next year, points to Haslam’s emphasis on applying tax dollars where he believes they are most cost-efficient. During a tour of the Tennessee Technology Center at Nashville on Wednesday, Haslam said the technology centers are on the front line of providing the sort of job training the state and companies here need.

“Our technology centers are doing great work, and they’re providing the real labor workforce training our employers need,” Haslam said. “When you have an 80 percent completion rate and about an 80 percent placement rate, that’s a really good track record.

“I’m a fan of what’s happening here. We want to see if we can do more of this.”

Haslam this week proposed cutting higher education by 2 percent, which translates into a $20.2 million reduction.

But the state’s new funding formula for higher education emphasizes outcomes rather than simply student enrollment, so the technology centers figure to stand up well in that system.

The technology centers are listed as a $1.3 million cut in Haslam’s budget proposal, but with 27 locations across the state that averages only $48,000 per school. The Nashville center Haslam toured has a budget of $2.3 million and 899 students, $2,600 per student.

“For most folks, I don’t think there is any drastic impact there in terms of this year’s budget on how it will affect the technology centers,” Haslam said. “We worked hard to where we’re providing direct services like this to try to minimize the impact.”

Haslam proposed a $30.2 billion budget, which includes a 1.6 percent raise for state workers but is down overall from last year’s spending plan.

The University of Tennessee system, which operates separately from the state board that oversees the technology centers, is facing $7 million in reductions in the governor’s proposal, including $3.4 million from the UT-Knoxville campus.

Haslam has proposed cuts of $1.9 million at the University of Memphis, $1.7 million at Middle Tennessee State University and just over $1 million at East Tennessee State University. Tennessee Tech is looking at a reduction of $825,000, and Tennessee State would see its budget reduced by $686,000 in the plan.

Technology center officials say their system provides a model that works well, with an emphasis on putting people in jobs without burdening them with a lot of debt. They point to the fact students can have a significant amount of their costs covered through Pell grants and the state’s Wilder-Naifeh technical skills grant, the technology centers’ version of the state’s lottery scholarship program.

The Wilder-Naifeh grant is named for two legislators behind it, the late Lt. Gov. John Wilder of Somerville and Speaker Emeritus Jimmy Naifeh, D-Covington, who is still a member of the General Assembly. The grant, introduced in 2004, provides up to $2,000 per year for students who meet attendance requirements and maintain a C average or better. The total financial aid available can cover about 70 percent of students’ costs, officials say.

The technology centers are largely trying to get away from the federal student loan program, said James King, vice chancellor of the Tennessee Board of Regents, which oversees them.

“I don’t want our students leaving here with debt if they don’t have to,” King said.

The technology center approach can result in more immediate employment than the traditional four-year model at a major university.

“We’re graduating folks on time. Our students come in, they get out, and they can get on with their lives,” King said.

Taxpayers can be assured the technology centers are motivated to place graduates in jobs because their accreditation depends on it. The centers are accredited by the Council on Occupational Education.

“It’s not just placement into some job. It’s placement into the field where they’re trained,” King said.

All but one of the state’s technology centers is a free-standing facility, one in Chattanooga being the exception. The programs cover more than 50 fields of study. Haslam’s tour on Wednesday exposed him to programs as diversified as nursing and welding.

Mark Lenz, director of the Nashville school, conducted Haslam’s tour.

Haslam was hardly the first dignitary to visit the Nashville campus. Bill Gates and his wife Melinda, who have made contributions to education in Tennessee from the Bill and Melinda Gates Foundation, visited the Nashville school last November.

The 27 technology centers help make the Board of Regents system the sixth largest system of public higher education in the nation. The Regents system includes six four-year universities — Austin Peay, Tennessee Tech, Middle Tennessee State, Tennessee State, East Tennessee State and the University of Memphis — and 13 community colleges.