NCHBA Ends Session Strong As Legislators Wrap Up Business

The House and the Senate adjourned early last Friday morning at 3:40 a.m. with Tim Minton among the few lobbyists there to witness it. While the session has not officially adjourned for the year (a procedural move to shorten the time for the Governor to decide whether to veto or sign legislation), the primary business of the short session is done.

The General Assembly will reconvene on September 2 for the limited purposes of final disposition of federal funds received for COVID-19 relief and potential action on legislative confirmations. Last week capped another in a long line of successful sessions for NCHBA.

However, before discussing legislative issues, it is important to remind all of an executive action important to our industry. Last Wednesday, Governor Cooper issued Executive Order 147 which mandates face coverings at various businesses where workers are within six feet of another. This order became effective on Friday, June 26 at 5:00 pm and construction sites are specifically included. For a comprehensive summary of the Order, click here.

We are pleased to report that Governor Cooper signed Senate Bill 720 (GSC Confirming Amends/Land-Use Regulatory Changes) into law on Friday, June 19. The enactment of this bill is one of NCHBA’s top session priorities. It was designed to preserve NCHBA’s victory last year in enacting significant and beneficial changes to local planning and land use laws and was the result of a five-year journey.

SB 355 (Land Use Regulatory Changes), which was comprised of two parts, was enacted last year with strong bipartisan support and became effective upon the Governor’s signature on July 11, 2019 (Session Law 2019-111). Part 1 contained our series of major land use changes which became law on that date and are in effect today.

Part 2 of the bill was the result of a five-year effort by the Planning, Zoning, and Land Use Section of the NC Bar Association to consolidate and modernize the planning and land use provisions of Chapter 160A (cities) and Chapter 153A (counties) into a single new Chapter 160D. That bill provided that Part 2 would become effective on 01/01/21.

Since the version of Chapter 160, which was enacted by Part 2 did not contain the provisions of Part 1 (as well as two of our other NCHBA 2019 enactments which amended provisions of the city and county planning and land laws), SB 355 directed the General Statutes Commission (GSC) to integrate these enactments into an updated version of Chapter 160D.

The GSC accomplished this task over several months earlier this year with the cooperation of interested parties and SB 720 was the result. For the most part, SB 720 is a technical correction bill which integrates existing law into this updated version of Chapter 160D. While the bill does contain several substantive language changes, they were the result of consensus. Two of the primary sponsors of last session’s bill, Senators Paul Newton (R-Cabarrus) and Sam Searcy (D-Wake) signed on as co-sponsors of SB 720. The amended Chapter 160D became effective upon the Governor’s signature.

Another of our top session priorities, HB 873 (System Development Fee/ADU Sewer Permit), sponsored by Representatives Dean Arp (R-Union), Jamie Boles (R-Moore) and Alan McNeill (R-Randolph), was approved unanimously by the Senate and the House and sent to the Governor.

HB 873 amends the law to move the time for the payment of system development fees for subdivisions from plat recordation to the later of building permit application or when the water and sewer service is committed. The current requirement for payment at plat recordation requires significant working capital to pay for the fees for all of the lots in the subdivision despite the fact that the water/sewer availability may not be provided for years in the future. This positive change will help keep housing affordable by reducing upfront major costs and appropriately moves those payment of those fees to when the service is provided.

This section requires that proof must be provided of payment of these fees if the local government that collects the fees is different than the local government that issues the building permit. Furthermore, it makes it clear that the system development fee cannot be collected if previously paid at plat recordation unless the amount of capacity needed for that property has increased.

A second provision allows a property owner the same option to connect a sewer line to a detached accessory dwelling unit (ADU) as is the case for an attached ADU’s on the same lot. Currently, a special permit and engineer’s seal are required in order to pursue this option for detached ADU’s which is not required if the ADU is attached. Making these requirements the same will significantly reduce cost and thereby provide more affordable housing across the state. Steven Webb worked with Senator Mike Woodard (D-Durham) on this important provision. It will provide cost savings which will spur the demand for more ADUs in other jurisdictions across the state.

The bill cleared the Senate last Monday night 48-0 and on Tuesday passed the House 114-0. Assistant Executive Vice President Tim Minton reached out to the governor’s office with an explanation of the bill and the need for this legislation. The Governor is expected to sign the bill into law.

HB 920 (Condominium Association Changes) passed the Senate last Monday night, the House concurred on Tuesday, 115-0, and the bill was sent to the Governor. This legislation was the product of a stakeholder group which included the bar association, title insurance companies, and other interested parties for the purpose of updating the condominium statutes. NCHBA identified a provision which needed to be eliminated and two others which needed to be amended. With the strong support of the bill’s sponsor, Representative Destin Hall (R-Caldwell), these actions were taken and NCHBA signed off on the bill.

Since the current GOP majority took control of the General Assembly, an annual regulatory reform bill has always been on the agenda. This year is no exception to the rule. HB 308 (Regulatory Reform Act of 2020) is an omnibus bill which contains several provisions of interest to NCHBA. Included is one that would clarify a NCHBA-inspired law passed several years ago which allows architects and engineers to inspect a component or element the construction of builders. The clarification states that the engineer’s or architects seal may only be required by a local jurisdiction if it is otherwise required by the North Carolina State Building Code.

Another provision supported by NCHBA would allow the North Carolina On-site Wastewater Contractors and Inspectors Board to purchase and hold real property and to authorize a fee to defray costs for its authorization of “on-site wastewater evaluators” (licensed soil scientists). 

A prior version of this bill included a provision which would have exempted local governments from paying system capacity fees. Exempting local governments from paying these fees would have increased the amount of fees paid by builders and developers. NCHBA worked with the provision’s sponsor to remove this provision which the sponsor graciously agreed to do.

This bill received unanimous support in both chambers and is not expected to receive any resistance from the Governor.

During the so-called “COVID-19 Session” which was held seven weeks ago, a provision very important to NCHBA was enacted. In Session Law 2020-3, the General Assembly provided time-limited civil immunity from lawsuits for injuries or death alleging that a customer or employee contracted COVID-19 from any business which the Governor had declared as “essential” (which includes the residential construction industry).

HB 118 (COVID Liability Safe Harbor) extends this civil immunity protections beyond just essential businesses to protect all businesses, non-profits, schools and universities, and individuals from unwarranted and excessive COVID-19 litigation. NCHBA has worked closely with a broad coalition of business associations, college and universities and others to move this legislation forward. The bill passed the House on Tuesday with overwhelming bipartisan support 109-6 and was sent to the Governor. Senator Paul Newton (R-Cabarrus) and Representative Harry Warren (R-Rowan) have been the champions of both of these legislative initiatives. 

HB 902 (P&C Changes/Global Transp./Prison Pilot), containing language which would limit the liability of owners and operators of community pools and their agents regarding the operation of these facilities during the pandemic, was sent to the Governor. Last week this language was housed in HB 806, however that bill was changed to allow gyms and restaurants to open at limited capacity. Since that bill is likely to face a Governor’s veto, this path is more likely to succeed. In light of COVID-19, many community pools have chosen to remain closed over concerns of liability over the spread of the virus.

The House leadership chose not to take up the Governor’s nomination of Wanda Taylor to the North Carolina Industrial Commission at this time. SB 862 (Confirm Wanda Taylor/Ind. Commission) was unanimously approved last week by the Senate Nominations Committee with NCHBA Executive Vice President Mike Carpenter testifying in her behalf. Subsequently, her nomination was approved by a floor vote of 48-0.

Wanda is highly qualified for this position having extensive experience over her career representing both employers and injured employees. She spent over twenty years with the commission as a deputy commissioner, the last six of which as Chief Deputy. We expect the House to take up this matter when it returns on September 2. 

Legislator of the Week

Representative Dean Arp (R-Union)

Representative Dean Arp is from Union County where he owns and operates an engineering firm. Currently serving in his fourth term, Representative Arp has been a steadfast ally of the home building industry. He is one of the principal Chairs of the House Appropriations Committee, which is responsible for the State budget. 

In his first term in 2013, he was one of the key sponsors of House Bill 120 (Building Codes/Local Consistency) which limited the types of inspections performed on single-family residential construction to only those required by the state building code. This year, Representative Arp was the lead sponsor on one of NCHBA’s top legislative priorities, HB 873 (System Development Fee/ADU Sewer Permit). Thank you, Representative Arp, for being a consistent champion for our industry!