Texans Turn Out to Vote
Record numbers of voters were recorded for the Texas primary elections on March 4th for both Republican and Democrat candidates. QUOIN in conjunction with the Texas Building Branch AGC together supported several candidates who were victorious in the campaign for Texas House and Senate seats. Those who received support from QUOIN who won their primaries in North Texas were Rep. Byron Cook, Rep. Phil King, Rep. Jerry Madden, Rep. Charlie Geren, Senator Craig Estes. The only candidate that did not prevail that received support was former House member Bob Leonard in District 97 who lost in a close race. For detailed information on all the primary election results click here.

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President Bush Signs "Economic Stimulus Act of 2008"
On Wednesday, February 13, 2008, President Bush signed the "Economic Stimulus Act of 2008." The following brief summary of the key components:
Rebate. An eligible individual will receive a basic credit equal to the greater of: (1) his net income tax liability up to a maximum of $600 ($1,200 for a joint return); or (2) $300 ($600 for a joint return) if either (a) the taxpayer's qualifying income is at least $3,000; or (b) his net income tax liability is at least $1 and gross income is greater than the sum of the applicable basic standard deduction amount and one personal exemption (two personal exemptions for a joint return). Qualifying income is earned income generally, veterans' disability payments (including payments to survivors of disabled veterans), and social security benefits. There will be an additional $300 per-child credit amount.
The amount of the rebate (both the basic and the child's amount) phases out at a rate of 5% of adjusted gross income (AGI) above $75,000 ($150,000 for joint returns). The rebate won't be available if an individual's tax return does not include valid identification numbers. A valid identification number is a Social Security Number issued by the Social Security Administration, and does not include a Taxpayer Identification Number issued by the Internal Revenue Service.
Boosted Sec. 179 expensing. Under current law, taxpayers can expense up to $128,000 for 2008 (as indexed for inflation). This annual expensing limit is reduced (but not below zero) by the amount by which the cost of qualifying property placed in service during 2008 exceeds $510,000 (as indexed for inflation). The expensing rules are eased for qualifying empowerment zone property, renewal property, and GO Zone property. The amount of the expensing deduction is limited to the amount of taxable income from any of the taxpayer's active trades or businesses. For tax years beginning in 2008, the Stimulus Act will increase the $128,000 expensing limit to $250,000 and boosts the overall investment limit from $510,000 to $800,000.
Bonus first-year depreciation. Bonus first year depreciation was first allowed following the terrorist attacks of 2001 but under current law generally isn't available for property acquired after 2004 (there are some exceptions, such as for qualified GO Zone property generally placed in service before 2008). The Stimulus Act generally permits a bonus first-year depreciation deduction of 50% of the adjusted basis of qualified property acquired and placed in service after Dec. 31, 2007, and before Jan. 1, 2009. The otherwise applicable "luxury auto" cap on first year depreciation will be increased by $8,000 for vehicles that qualify. The types of property eligible for bonus depreciation will be the same as those eligible under earlier bonus depreciation packages: (1) tangible property with a recovery period not exceeding 20 years; (2) purchased computer software; (3) water utility property; and (4) qualified leasehold improvement property. Bonus depreciation will be allowed for alternative minimum tax (AMT) as well as for regular tax purposes.

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E-Verify Demonstrations in Chicago, IL, Santa Monica, CA, and Atlanta, GA
With continued talk at both the state and national level about the use of the E-Verify employment eligibility verification system, AGC thought that the attached briefings on the subject may be of interest to you.  AGC is a steering committee member of the Essential Worker Immigration Coalition (EWIC) and EWIC is hosting these briefings in Chicago,
Santa Monica and Atlanta to attempt to educate and inform employers on how the program works and see demonstrations of the E-Verify system.  
AGC is not advocating the use of the E-Verify program due to our concerns about the accuracy and reliability of the data from both the Department of Homeland Security and the Social Security Administration that is used in the system.  However, these briefings pose an opportunity to see how the system works. The briefings do not cover the accuracy of the data, just how to use the program and to see a demonstration.   Attending does not commit anyone to using E-Verify. 
The first briefing is on January 29, 2008, in Chicago, IL. The second in Santa Monica, CA on February 5th and the third in Atlanta, GA scheduled for February 25th. Click here to view the flyer for the Chicago briefing and click here for the Santa Monica briefing.
Please send your RSVP to Nancy Miller at MILLERNA@gtlaw.com.  Deadline is Friday, January 25, 2008 for the briefing in Chicago OR Friday, February 1, 2008 for the briefing in Santa Monica.

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California Judge Blocks “No-Match” Rule
Contractors urged to continue their efforts to comply with immigration rules and regulations and promptly to respond to “no-match” letters.
The AFL-CIO and the business community have won a major if less than final victory in their lawsuit against the “no-match” rule that the Department of Homeland Security (DHS) announced on August 15, 2007. The U.S. District Court for the Northern District of California has issued a preliminary injunction against that rule, blocking its implementation until the court can render a final decision on the merits of the case.
The judge issued the injunction primarily because the rule – which DHS has entitled “Safe-Harbor for Employers Who Receive a No-Match Letter” – carries a significant risk of irreparable harm to both employers and employees, while further delay in its implementation would carry little if any risk of harm to the government. The Judge also found that the plaintiffs had raised serious questions about the rationale for the rule, about the scope of the department’s authority, and about the department’s efforts to comply with the Regulatory Flexibility Act.
While AGC is encouraged by the ruling, the association continues to urge its members fully to comply with all immigration rules and regulations, and promptly to respond to any “no-match” letters that they receive from the Social Security Administration. It appears that DHS still has the discretion to take a harder look at any employer that ignores a no-match letter, and to use such a letter as at least one piece of evidence of what an employer knew about an individual’s right to work in the United States.
In meetings with AGC, DHS has made it clear that the department intends to step up enforcement of the law. An employer that ignores discrepancies in social security numbers may therefore continue to run a risk of closer scrutiny. How an employer has dealt with such discrepancies may continue to be at least one factor that DHS takes into account, as it assesses the totality of the circumstances surrounding an employer’s practices, and whether the circumstances justify finding that the employer has violated the law.
AGC will continue to monitor the situation carefully, and to encourage both the legislative and regulatory changes necessary to effect truly comprehensive immigration reform.
For additional information please contact Mike Kennedy at kennedym@agc.org.

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QUOIN Members Step Up to the Plate
On August 12th the QUOIN-PAC Leadership Team reached out to QUOIN members and requested they assist in funding the 2007 QUOIN-PAC. QUOIN wishes to THANK all of the members who contributed and have helped QUOIN to remain a viable political force within the State by gathering the resources needed to solidify our position.
It’s not to late to join this list of members who have contributed to QUOIN-PAC. To add your name to this growing list contact Jack Baxley or Pat Meadors at the QUOIN office 972-647-0697.

QUOIN-PAC Leadership Team Tom Kader, SEDALCO Construction Services Steve Baker, Baker/Triangle Preston McAfee, Rogers-O’Brien Construction Glenn Strother, AUI Contractors John Hinson, Marek Brothers Systems, Inc QUOIN-PAC Contributors Chuck Jahant, Alpha Insulation & Waterproofing Rabie Hashem, Alshall Construction Company Warren Andres, Andres Construction Johnny Barnes, Baker/Triangle Brad Baker, Baker/Triangle Jerry Smith, Baker/Triangle Michael Vickery, Baker/Triangle Robert Van Cleave, Balfour Beatty Construction Mike Moore, Bob Moore Construction, Inc. Phillip Bell, Bob Moore Construction, Inc. Larry Knox, Bob Moore Construction, Inc. Ed McGuire, Bob Moore Construction, Inc Sam Gioldasis, Brandt Engineering Charlie Henderson, C.D. Henderson Construction Wally Windom, Drywall Interiors, L.P. Randy Haefli, Component Construction King Cook, Fugro Consultants Jerry Gallagher, Gallagher Construction Steve Hatfield, Hatfield Acoustics William Wright, H.E. Wright & Company, Inc. Fritz McKinstry, Hill & Wilkinson, Ltd. Greg Wilkinson, Hill & Wilkinson, Ltd. Mark Reid, Idea Construction Darrin Weber, IMA of Texas Steve Luebbehusen, JBM Builders, Inc.

Kendall Jenkins, KMJ Contractors, Inc. Steve Whitcraft, Key Construction Kirk Kibler, W.B. Kibler Construction Co., Ltd. Jim Kingham, JE Kingham Construction Co. Gerald May, L.H. Land Painting Co, Inc. Jeff Thomas, Lasco Acoustics & Drywall Judy Lembke, Lemco Construction Bob Bowen, Manhattan Construction Company Jeff Haley, Matrix Interior Construction Mike McWay, McCarthy Building Companies Tim Hill, McCaslin-Hill Construction, Inc. Denward Freeman, Medco Construction Pete Durant, Pete Durant & Associates Dwayne Hodges, Ray F. Skiles Company, Inc. Jimmy Mays, Ray F. Skiles Company, Inc. Glenn Nihart, Ray F. Skiles Company, Inc. Clay Harrison, Ray F. Skiles Company, Inc. Richard Ringo, RBR Construction Mike Orr, Rogers-O’Brien Construction Vickie Walker, SEDALCO Construction Services David Ritz, SEDALCO Construction Services Robert Kriz, SEDALCO Construction Services TR Long, SEDALCO Construction Services Russ Garrison, SEDALCO Construction Service Doug Smith, Smith Interiors Gary Shelton, Southern Mechanical Plumbing, Inc. David Oxford, Southwest Assurance David Bloxom, Speed Fab-Crete Corp. Mike Freeman, Steele-Freeman, Inc. Harold MacDowell, TDIndustries, Ltd. Tracy Tucker, Tucker Agency Tobin Tucker, Tucker Agency Kirk Kibler, WB Kibler Construction

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Court Rules CGL Policy includes Defective Work
Today, the Supreme Court of Texas, In Lamar Homes, Inc. v. Mid-Continent Casualty Company, ruled concerning whether defective work constitutes an "occurrence" or "property damage" as defined in the standard commercial general liability (CGL) insurance policy. This issue has been in front of the Supreme Court now for nearly two years, having been argued to the Court in February 2006. The case garnered not only considerable amicus curiae participation, but also national attention. The opinion is sure to serve as a lightning rod for other courts around the country that are facing similar issues.  A copy of the opinion will be on our website next week or view it now on the courts site by clicking here.
The Court held that defective work falls within the definition of an "occurrence" when it is unintentional and unexpected, stating further that the policy makes no distinction between damage to the insured's own work and damage to some third party's property. Further, the Court found that the damages to a home arising out of the defective work of a foundation subcontractor constitutes "physical injury to tangible property," and thus "property damage" as defined in the policy. Moreover, the Court dismissed the insurer's argument regarding the application of the economic loss rule to determine the existence of an occurrence and property damage, stating that the rule is not a useful tool for determining insurance coverage, and further that the CGL policy makes no distinction between tort and contract damages.
Lamar Homes v. Mid-Continent represents the attempts of certain insurers to scale back the coverage to insured contractors for defective workmanship arising out of their subcontractors' work by concentrating on the definitions of "occurrence" and "property damage." This opinion will redirect the focus of insurers and insureds back to the property damage exclusions where issues relating to coverage for the insured's own work are more properly addressed.
Pat Wielinski, with the firm of Cokinos, Bosien and Young, wrote the amicus curiae brief for AGC. If you have any questions regarding the implications or applicability of this ruling, please contact Pat Wielinski directly at 817-608-9534 or by email at pwielinski@cbylaw.com.

Premises Owner can Qualify for W/C Exclusive-Remedy
The Texas Supreme Court ruled on another case today that also has implications to the construction industry. In the case of Entergy Gulf States, Inc. v. John Summers the court reversed the appeals court judgment and held that a premises owner that "undertakes to procure" work falls within the statute's definition of a general contractor and thus qualifies for the exclusive-remedy defense.
Justice Willett delivered the opinion of the Court. In part, the ruling stated, "The Labor Code makes workers' compensation benefits an employee's "exclusive remedy" against an employer for covered work-related injuries. It defines "general contractor" as "a person who undertakes to procure the performance of work or a service, either separately or through the use of subcontractors. "A general contractor "may enter into a written agreement [with a subcontractor] under which the general contractor provides workers' compensation" coverage to the subcontractor and the subcontractor's employees, and such an agreement "makes the general contractor the employer of the subcontractor and the subcontractor's employees" for purposes of the workers' compensation laws." You can view this case here.

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Temporary Employment Agencies Given Mechanic's Lien Rights
The Texas Supreme Court has held that the temporary employment agency which furnished labor to a subcontractor on a construction site is entitled to a mechanic’s lien.
L & T, J.V. (“Lamar”) was the general contractor for the construction of a Corpus Christi apartment complex. Lamar contracted with Gonzalez Construction for framing, drywall and roofing. Gonzales did not have an adequate work force, therefore they sought additional workers from Advance'd Temporaries. These workers were identified as employees of Advance’d which was obligated to obtain workers’ compensation and general liability insurance for them. Advance’d paid the temporary workers and their payroll taxes, invoicing Gonzalez weekly for its services.
Lamar apparently paid Gonzalez all that was owed for its work, but Gonzalez failed to pay the full amount owed to Advance’d. Advance’d nevertheless took care of the temporary workers, paying them for the labor. Advance’d then gave notice of its claim under the mechanic’s lien statute, which Lamar disputed. Advance’d sued Gonzalez for the balance owed under its contract. After being unable to collect from Gonzalez, Advance’d then filed suit against the apartment project, Lamar and the surety.
The Legal Affairs committee of AGC Texas Building Branch reviewed the case and filed an amicus brief with the Supreme Court. In the brief AGC TBB pointed out that Advance’d did not “furnish labor for construction under a contract” as contemplated by §53.021 and therefore does not have the lien rights afforded by the statute.
Advance’d admittedly performed no actual “work” on the construction project.  To the contrary, Advance’d’s principal function was to be a lender to Gonzalez, the party that was the actual performing subcontractor.  (3 RR 113). Specifically, the record shows that Advance’d referred individuals to Gonzales to be considered for hire by Gonzalez for the prosecution of Gonzalez’s subcontract work; several of those individuals were previously employees of Gonzalez.  (4 RR 33-34). The final decision to actually hire an individual was left exclusively to Gonzales, as was the classification of the employee as laborer, carpenter, supervisor, etc.  (3 RR 44-45). All training, supervision and direction of employees on the job site as well as pay scale decisions of the individuals was also the sole responsibility of Gonzalez.  (4 RR 41). Most significantly, in the opinion of AGC, Advance’d had no authority to and did not direct, control, or take responsibility for the work of the individuals it referred to Gonzalez.  (3 RR 81-82). To the contrary, Advance’d expressly disavowed any responsibility for damages or improper work of the individuals it referred to Gonzalez.
This ruling makes it clear that general contractors now have additional exposure to a new “hidden lien.” It is suggested that you consult with your attorney or insurance provider, on the best way to protect your business from this additional risk.