House And Senate Get Back To Work After Crossover Deadline
After the May 9th crossover deadline, legislators returned last week to an abbreviated schedule. The crossover deadline is a legislatively-created obstacle designed to significantly narrow the number of bills that remain eligible for consideration for the rest of the long session and next year’s short session. Any bill (except those with an appropriation or finance provision) must pass its body of origin and be read into the other body by the May 9th deadline. NCHBA’s key pro-active legislative priorities made crossover and several bills which NCHBA opposed did not.
The next step is to have our pro-active bills which “crossed over” referred to appropriate committees in the other chamber. Your NCHBA legislative team met with leadership and staff last week seeking to accomplish that goal.
Since gaining the majority in 2011, the GOP leadership has made tax reform a major priority. In furtherance of that effort, last Tuesday, the Senate Finance Committee approved SB 622 (Tax Reduction Act of 2019) which would reduce taxes on personal income and reform the state’s non-business friendly franchise tax. The bill would increase the standard deduction for personal income tax filers and reduce the rate of the franchise tax which is of particular interest to S and C corporation filers, including many of our members. Currently, the franchise tax is calculated at $1.50 per $1,000 of net worth. The bill would reduce that to $1.30 per $1,000 in the 2019 tax year and $1.00 per $1,000 in 2020.
The Finance Committee chairs explained that the ultimate goal was the total elimination of the franchise tax. This bill preserves an important 2017 NCHBA amendment which restored the ability of our members to deduct their real estate indebtedness when calculating the net worth of their business for franchise tax purposes.
The Senate approved the bill in a mostly partisan floor vote last Thursday with a final vote expected on Monday. The bill is expected to receive favorable consideration in the House but Governor Cooper has already threatened a veto.
The Senate continues to work on its version of the budget which is expected to be rolled out in the next two weeks. This year, the appropriations process started in the House and its plan was passed on May 3. After the Senate passes its plan, the House and Senate will create a conference committee to iron out differences in the two versions. The product of this negotiation will then be voted on by both chambers and sent to the Governor, who is expected to veto whatever is presented. This could make for a long summer in Raleigh!
Your legislative team is pleased to announce that this week’s NCHBA Legislator of the Week is Senator Andy Wells (R-Catawba). Senator Wells is in his third term in the Senate and previously served in the House. His long career in real estate, primarily developing and managing commercial properties in the Hickory area, makes Andy one of the most knowledgeable legislators about issues affecting our industry. He has been a steadfast friend to us and someone his colleagues look to for advice and guidance especially on real estate-related issues.
Consequently, we have called on him on many occasions over the years to handle legislation for us. The most recent example is this session’s SB 313 (Streamline Performance Guarantee of Affordable Housing) where he is the lead sponsor. This bill makes several refinements in our successful 2015 effort to reform the law with respect to performance guarantees which Andy then handled for us in the Senate. SB 313 passed the Senate 48-0 on May 6.
On Thursday of last week, the National Association of Home Builders named the NCHBA Legislative Report as its Best Publication (Print or Electronic) for 2018. The NAHB Association Excellence Award is an annual program designed to recognize the outstanding accomplishments of state and local home builders’ associations and executive officers in the field of association management. “We are delighted with this honor which recognizes the effort that we make each week to keep our members informed of key legislative developments and honor deserving legislators,” said Mike Carpenter, Executive Vice President of NCHBA.
This week, NCHBA members will convene in Raleigh for our annual NCHBA Legislative Reception and Legislative Day. The events start on Tuesday morning with the 2nd Quarter Meetings, before being capped off with a Legislative Reception at the North Carolina Museum of History. On Wednesday, members will meet with their legislators to discuss our key legislative priorities. It’s not too late to make plans to participate!
Legislator of the Week
Senator Andy Wells (R-Alexander, Catawba)
Senator Andy Wells understands the challenges home builders face. His background as a developer has made him a key ally for many of our legislative priorities over the years. This session, Senator Wells is a primary sponsor of SB 313 (Performance Guarantee To Streamline Affordable Housing). We thank Senator Wells for his leadership on this issue and for his many years of support for our industry.