Legislators Return To Raleigh For Short Session

Legislators returned to Raleigh this week for the start of the short session and wasted little time getting down to business. The primary business of the short session is to make adjustments in the two-year State budget adopted last year. Appropriations committee chairs from both the House and Senate have been meeting for several weeks prior to the session and the timetable for this year’s budget adjustments is ahead of schedule. The biggest news this week came from the leadership’s announcement that the overall spending target has been reached. This $23.92 billion-dollar target exceeds last year’s budget by $886 million. Once both chambers agree and enact a spending plan, the bill will be sent to the Governor.

Leaders in both chambers have indicated that they expect this short session to wrap-up no later than the July 4th holiday. NCHBA’s legislative team will seek to pass an aggressive agenda in that short time frame including HB 507 (Land Use Regulatory Changes), further reform of the building code process, clarifying changes to the capacity fee law which passed last year, and the final “fix” to the sales tax on labor for repairs, maintenance and installation.

House Bill 507 will to be a top priority during the short session. The legislation passed the House 115-0 last April, and currently is assigned to the Senate Rules Committee. The bill seeks to ease many regulatory burdens on land development, including provisions that integrate permit choice with vesting protections for landowners. Further provisions would allow landowners to bypass the Board of Adjustment for certain claims and clarifies the award of attorneys’ fees to landowners in actions against local governments who exceed their authority and make refinements to NCHBA’s performance guarantee reforms enacted in 2015.

Another short session priority is legislation that is the product of a House Select Committee on the Implementation of Building Code Regulatory Reform Legislation.  House Bill (948 Building Code Regulatory Reform) was introduced on Wednesday. Its principal sponsors are Representatives Mark Brody (R Union), Dennis Riddell (R-Alamance), Carla Cunningham (D-Mecklenburg), and Larry Potts (R-Davidson). The bill continues the efforts of the past several sessions to make improvements and reforms in the code inspection process. The first section of the legislation clarifies 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.

It 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.

Other provisions of the bill are designed to allow 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 requiring reports to demonstrate compliance with the law that inspection department receipts must be spent to benefit the inspection departments.

Senate Finance chairs introduced SB 715 (Various Change to Revenue Laws) on Wednesday and subsequently heard the bill in the Senate Finance Committee on Thursday. The omnibus legislation contains numerous amendments to the current tax policy of the state. One of those provisions will allow members (called retailers under the law) who pay sales tax on materials as part of a repair, maintenance or installation (RMI) to receive credit for the sales taxes paid on those materials. Those engaged in RMI projects will continue to charge sales tax on the entire sales price of the repair, maintenance or installation. The credit will be deducted from the sales tax receipts that the retailer collects from the homeowner at the time they are remitted to the state of North Carolina. The deduction can occur the month that the sales tax has been collected on the entire sales price of the project. NCHBA members have asked for this legislative fix to help them further comply with the recently enacted law. In addition, NCHBA successfully advocated for an additional grace period of 1 year, to help members fully comply with the law.

Finally, NCHBA will seek changes to last year’s capacity fee legislation that will allow a developer to pay the capacity fee at the time of plat recordation or when sewer and water services are allocated, whichever date is later in the process. This will help ensure that developers will not lose capital if the project fails to proceed as planned. The second provision would require the Department of Environmental Quality to update rules that have failed to keep up with new technologies with concern to water consumption per household.

The agenda during this short session remains long although time is at a premium. Over the next several weeks, NCHBA’s team will proactively work to accomplish this ambitious agenda which will seek to ease the regulatory burden, improve the housing market, and increase the opportunities for home ownership.

Bills On The Move

  • HB 948 (Building Code Regulatory Reform): Introduced in the House, referred to the House Regulatory Reform Committee and the House Finance Committee
  • SB 715 (Various Changes to Revenue Laws): Introduced in Senate/favorably reported by the Senate Finance Committee.

Legislator Of The Week

Representative Dennis Riddell (R-Alamance)

Rep. Riddell is the Chair of the House Regulatory Reform Committee. He is the primary sponsor of one of our top legislative priorities, HB 948 Building Code Regulatory Reform. The North Carolina Home Builders Association thanks Rep. Riddell for all of his work to keep housing affordable in NC.