Building Code Regulatory Reform Bill Passes House

Legislators took Monday off in observance of Memorial Day but were back at work on Tuesday and they hit the ground running in a week that included a rare Friday session.  The Senate concluded the final of the two required votes on the conference report on adjustments to the state budget on Thursday and subsequently the House concluded their second vote on the report this morning.

This conference report included several changes which your legislative team worked with the legislative leadership on both sides to include:

  • Final fix to the sales tax on labor regarding repair, maintenance and repair (RMI) projects which will allow contractors who pay sales tax on materials for an RMI project to pay the sales tax at the retail level and receive credit on the sales tax remitted to the Department of Revenue. Those who perform RMI projects will continue to charge customers sales tax on the entire project (i.e., materials, labor and profit) but will deduct the sales tax paid on materials from the sales tax paid to the state. Builders and subcontractors across the state had ask NCHBA staff to seek this important change. These changes were included in SB 715 (Various Change to Revenue Laws) which was incorporated into this conference report
  • At the request of several legislative leaders, NCHBA helped create a new penalty structure for employers who fail to obtain required workers’ compensation coverage by establishing an alternative penalty for first-time offenders.
  • An annual NCHBA priority, the Housing Trust Fund, administered by the NC Housing Finance Agency was continued at the same level as was authorized in last year’s budget.

One of NCHBA’s top legislative priorities for this session cleared several hurdles this week in record time. HB 948 (Building Code Regulatory Reform) arose from the work of the House Select Committee on Implementation of Building Code Regulatory Reform and which NCHBA played a key role in creating. This bill, principally sponsored by Representatives Mark Brody (R-Union), Dennis Riddell (R-Alamance), Carla Cunningham (D-Mecklenburg), and Larry Potts (R-Davidson) passed the House on Friday with a resounding vote of 98-1.  However, that was not before stops in two important House committees. The House Regulatory Reform Committee was the first to address the bill on Wednesday. Rep. Brody educated the committee on the merits of the legislation. Several speakers including Mike Carpenter spoke in favor of the bill and addressed concerns raised by others. The committee unanimously approved the bill and it was then referred the House Finance Committee which heard and approved the bill on Thursday.  After that vote, the Speaker of the House directed that the bill be place on today’s calendar.

Among other provisions, the bill:

  • Clarifying the law which allows a licensed engineer/licensed architect to certify a component or element of a building. It also defines the terms element or component and makes changes designed to expedite this process.
  • Further establishes a statutory basis for the existing “inspector marketplace pool” composed of retired Code enforcement officials which is currently available to cities and towns. It would allow a builder to request an inspector from this inspector pool whenever the builder demonstrates that a requested inspection has not been conducted within two business days. The builder would pay the Department of Insurance for the services provided by the marketplace pool inspector; however, the builder would recoup the portion of the permit fees that applied to the inspections the local governments failed to provide.
  • Allows greater flexibility in granting provisional licenses to Code-enforcement officials who are certified and in good standing in other states or with ICC designations; to
  • Authorize cities and counties to enter into mutual aid contractors for code enforcement and administration; and
  • Requires reports to demonstrate compliance with the law that inspection department receipts must be spent to benefit the inspection departments.

Representative Brody, along with the other principal bill sponsors Reps. Riddell, Cunningham, and Potts did a masterful job of steering this bill through the House.  We greatly appreciate them for their leadership and support for our industry.

Senator Jay Chaudhuri (D-Wake) introduced SB 784 Affordable Housing Act this week. The bill would appropriate additional funds to the Housing Workforce Loan Program and the North Carolina Housing Trust Fund and directs the Legislative Research Commission to study the issue of housing affordability. However, it was what was not included in the bill that was just as important what was contained in the legislation.  Initially, Senator Chaudhuri had planned to include language that would authorize local governments across the state to impose inclusionary zoning requirements on builders. Inclusionary zoning, which requires that a builder set aside a percentage of units below market rates, has been touted as a “solution” to the affordable housing crisis. After meeting with Executive Vice President Mike Carpenter, Senator Chaudhuri understood that this “solution” merely drives up the cost up of the remaining units while actually exacerbating the very affordable housing problem that it is purporting to solve. We are grateful to Senator Chaudhuri for allowing us to educate him on this important topic. This is but one example how persuading a legislator not to introduce harmful legislation is just as important as passing proactive bills.

Leaders of both chambers have indicated a strong preference to adjourn this session within the next few weeks. This means your legislative team has a lot more work to do in the short time remaining in this session.

Bills On The Move

Legislator Of The Week

Representative Mark Brody (R-Union, Anson) was a key player in the passage of HB 948 Building Code Regulatory Reform. He is the first lawmaker to twice be named NCHBA’s Legislator Of The Week. The North Carolina Home Builders Association thanks Representative Brody for all of his hard work to keep housing affordable in NC.