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February 13, 2008

Opinion: Two bills contractors should know about

Special to the Journal

There are two measures being considered in Olympia that can have far reaching effects on the construction industry: HB 3349 and SB 6385.

Introduced by State Rep. Mark Ericks, D-Bothell, HB 3349 gives the legislature the opportunity to step back and take a reasoned, studied approach to any needed regulation of contractors. The bill would provide for a residential contractor licensing study to assess problems involved in the repair, alteration or construction of single-family homes.

HB 3349 is proactive and progressive, giving all parties the opportunity to be part of the solution, rather than being put on the defensive. Ericks' approach is the path to creating good public policy that balances the health of the state economy and the protection of consumers.

Last year, Ericks chaired an informal, bipartisan legislator work group that sought ways government can help to reduce shoddy workmanship in residential building projects. Ericks' analytical approach to industry problems is particularly welcome as the industry often finds itself the whipping boy of those more intent on expanding liability laws and creating new ways to file lawsuits than they are in solving problems and protecting the pocketbooks of homebuyers.

In marked contrast to HB 3349 is SB 6385, a particularly onerous bill that would allow negligence lawsuits against anyone involved in any way with the building, repair or alteration of a residence.

A sweeping departure from current law, this bill doesn't just target general contractors, but would allow lawsuits against architects, engineers, building designers, suppliers and all subcontractors. It also would allow a previous homeowner to be sued by a subsequent homeowner based on any design or cost-cutting decision made during their ownership.

If passed, SB 6385, which was introduced by Sen. Brian Weinstein, D-Mercer Island, will traumatize the residential liability insurance market for builders, dramatically increasing new housing costs. Insurance will be harder to get and some contractors may go underground. Weinstein's bill will be part of the problem, not part of the solution.

Curiously, this zeal to expand liability at every turn falls into the how-quickly-they-forget column. By law, to be a registered contractor requires liability insurance. Yet during the last contractor insurance crisis, most insurance carriers stopped writing policies and refused to renew existing builder policies as they expired. For builders lucky enough to find insurance, the rates went through the roof. The effect is to increase the overall cost of housing.

The construction industry plays an important role in our economy, both on the state and national level. If expanding liability on the construction industry is bad public policy in good economic times, it will prove disastrous at a time when the stability of the housing market is less than optimal. Industry professionals are not against change but we know that issues should be studied first before making sweeping statutory changes that may not be in the best interests of consumers.

Industry members must act now. Call or e-mail your local legislators and tell them to put SB 6385, on ice and to support Ericks' bill, HB 3349.

Bill Garrity is the executive director of the American Council of Engineering Companies of Washington and president of the Washington Construction Industry Council.

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