State House Passes Road Maintenance Bond Legislation

The North Carolina House last week passed legislation to establish a new performance guarantee process for subdivision roads, while also requiring the state Department of Transportation (NCDOT) to develop a comprehensive roads database and improve the process by which roads are accepted into the state system for maintenance.

HB 457, ‘Performance Guarantees/Subdivision Streets’  would authorize counties to be able to require “residual performance guarantees” from developers, but, in return, requires NCDOT to expedite the acceptance of county subdivision roads.  Despite the fact that these roads are constructed to DOT standards and are given to the state at no cost, the NCDOT has historically been slow to accept them into its system.

The legislation also requires the state to accept subdivision roads approved on or after October 1, 2010, which meet DOT standards and which have been open to public travel for the last 6 years.

Finally, the legislation would direct NCDOT to work with counties to create a database that would convey the status of roads within each county (i.e., “public” or “private”).  This database would provide Realtors® and property owners much-needed information about the maintenance responsibilities associated with many of the state’s orphan roads, as well as establish a greater understanding for road ownership for properties across the state.

HB 457 passed the House by a unanimous vote of 112-0, and now moves on to the Senate. It is supported by both the North Carolina Association of Realtors® (NCAR) and the North Carolina Home Builders Association (NCHBA)

Source: NCAR & NCHBA

Click here to view the original post on REBIC’s In the Loop blog.

Governor Signs Regulatory Reform Bill into Law

Governor Roy Cooper has signed into law a 44-page Regulatory Reform bill that contains several critical provisions for residential and commercial developers.

SB 131, ‘Regulatory Reform Act of 2016-2017’, contains two reforms that are of particular interest to developers:

Energy Efficiency Code Exemptions – Section 1.4 of the bill excludes from state Energy Efficiency Code requirements any buildings with the following use classifications:

  • Factory Group F
  • Storage Group S
  • Utility & Miscellaneous Group U

Furthermore, an amendment suggested by REBIC and introduced by Representative Bill Brawley ensures that the energy code exclusion ‘shall apply to the entire floor area of any structure’ included in the provision. This language was intended to prevent the office or showroom portion of a warehouse, industrial or manufacturing building from having to meet energy efficiency code requirements, when the majority of the structure does not.

This provision must be codified by the North Carolina Building Code Council, which next meets on June 13th in Raleigh. An effective date will likely be set for sometime this fall.

Stream Mitigation Requirements – Section 3.13 of the bill amends stream mitigation requirements to allow developers to disturb up to 300′ of stream bed before mitigation is required, unless otherwise prohibited by federal law. Current law requires mitigation whenever 150′ or more is disturbed. This provision would bring North Carolina in line with stream mitigation requirements in neighboring states.

This provision must be approved by the U.S. Corps of Engineers before it can take effect. A timeline for that adoption has not yet been determined, but REBIC will keep you posted as we learn more details.

Other key provisions in the law include:

  • An update of the general contractors licensing law which contains language clarifying that the determination of project cost for intermediate or limited license excludes the cost of land and any ancillary costs to improve the land.
  • A 5-year statute of limitations and a 7-year statute of repose on local governments to pursue an alleged violation of a land-use statute, ordinance or permit against a landowner. Current law does not contain any statute of limitations.

Click here to view the original post on REBIC’s In the Loop blog.

White House Unveils Tax Reform Plan

The Trump administration released an outline of its tax reform proposal last week, laying out core principles and goals for its negotiations with Congress. As proposed, the Trump tax plan would reduce the corporate tax rate to 15 percent (from the current 35 percent rate), tax the business income of partnerships and other pass-through entities at 15 percent, and create three individual income tax brackets with rates of 10, 15 and 35 percent. The administration’s plan would also eliminate the alternative minimum tax and the estate tax.

The White House proposes to eliminate certain preferences in the tax code, although little detail was provided. Notably, the deduction for state and local taxes, which is important to residents of states such as New York and California, would be eliminated. During the presidential campaign, candidate Trump also vowed to end the capital gains treatment of “carried interest,” which he identified as a “Wall Street loophole” benefiting the hedge fund industry. Chief of Staff Reince Priebus reiterated this goal during an appearance on ABC’s This Week on Sunday.

Watch the Legislative Update Members-only Webinar

By Brielle Scott

NAIOP’s second Advantage Series webinar took place this week, providing a legislative update to members on key priorities for the association and the industry in 2017: tax reform, infrastructure, and the availability of capital and credit.

Aquiles Suarez, NAIOP’s vice president for government affairs, who led the webinar, started the discussion with a look at tax reform. Suarez explained that the overarching goal of the House GOP Blueprint for Tax Reform is to “broaden the base” by collecting taxes from more sources, which means getting rid of credits and deductions, and to “lower tax rates, particularly the corporate tax rate,” with the argument that our corporations are at a disadvantage when competing internationally. However, roadblocks to passing the plan include the recent failure to pass the Affordable Care Act repeal (which means that an additional $1 trillion in offsets must be identified to ensure the tax plan is “revenue neutral”) and pushback on the Border Adjustment Tax.

Read the full article here.

NAIOP members can hear Suarez’ responses to these questions and more insights into legislative issues affecting CRE by viewing the archived version of the full webinar online.

General Assembly Begins to Address Local Impact Fee Authority

The North Carolina General Assembly is starting to take a close — and skeptical — look at the development Impact Fees charged by local governments across the state, and some big changes could be on the way in the months ahead.

Last week, the House State and Local Government I Committee heard two bills dealing with impact fees.  Representative Sarah Stevens (R-Surry) introduced two bills in March regarding impact fees which were authorized by the General Assembly more than 30 years ago.  The first, HB 406 Repeal Orange County Impact Fee, would strip Orange County of its ability to impose impact fees. Stevens noted that Orange County recently modified its impact fee structure causing the fee for a multi-family project to increase from $302,000 to $1,593,000. Impact fees for single family residences built in Orange County have been in excess of $10,000 per house.

The second bill, HB 436 Local Government/Regulatory Fees, would prohibit the future imposition of impact fees by cities and counties, and would repeal all existing authority for the twenty municipalities and three counties who were granted this authority pursuant to local acts passed primarily between 1985 and 1989.

Despite opposition from local governments and their advocates, both bills were approved in committee, mainly along party lines. Representative Stevens explained that impact fees were unfair since they singled out our industry to pay for infrastructure that benefits the community as a whole.  The bills will now move to the House Finance Committee for further consideration.

The impact fee issue is receiving legislative attention largely as a result of the recent decision of the Supreme Court of North Carolina finding that water and sewer impact fees imposed for “future capacity” are not authorized and must be refunded. That case, Quality Built Homes v. Town of Carthage, was brought by a builder member with the support of the North Carolina Home Builders Association (NCHBA), which filed an amicus brief in the Supreme Court.

Similar fees have been collected by many other jurisdictions across the state and, as a result of this decision, are now subject to being refunded with interest. Local governments have turned to the General Assembly for relief. NCHBA has been in discussions with interested parties and this issue will remain a top priority for NCHBA’s team in the weeks ahead.

Source: NCHBA
Click here to view original post by REBIC.

State House Passes Regulatory Reform Bill

The NC House of Representatives today gave final approval to a 44-page Regulatory Reform bill that contains several critical provisions for residential and commercial developers.

SB 131, ‘Regulatory Reform Act of 2016-2017’, was approved by the House on Thursday by a vote of 84-27, and now heads back to the Senate for a concurrence vote. Among the dozens of reforms it contains, two are of particular interest to developers:

Energy Efficiency Code Exemptions – Section 1.4 of the bill excludes from state Energy Efficiency Code requirements any buildings with the following use classifications:

  • Factory Group F
  • Storage Group S
  • Utility & Miscellaneous Group U

Furthermore, an amendment suggested by REBIC and introduced by Representative Bill Brawley ensures that the energy code exclusion ‘shall apply to the entire floor area of any structure’ included in the provision. This language was intended to prevent the office or showroom portion of a warehouse, industrial or manufacturing building from having to meet energy efficiency code requirements, when the majority of the structure does not.

Stream Mitigation Requirements – Section 3.13 of the bill amends stream mitigation requirements to allow developers to disturb up to 300′ of stream bed before mitigation is required, unless otherwise prohibited by federal law. Current law requires mitigation whenever 150′ or more is disturbed. This provision would bring North Carolina in line with stream mitigation requirements in neighboring states.

REBIC is continuing to review additional provisions in the Regulatory Reform bill, and will provide additional updates in the coming weeks on how this important piece of legislation affects your business.

General Assembly Begins to Address Local Impact Fee Authority

The North Carolina General Assembly is starting to take a close — and skeptical — look at the development Impact Fees charged by local governments across the state, and some big changes could be on the way in the months ahead.

Last week, the House State and Local Government I Committee heard two bills dealing with impact fees.  Representative Sarah Stevens (R-Surry) introduced two bills in March regarding impact fees which were authorized by the General Assembly more than 30 years ago.  The first, HB 406 Repeal Orange County Impact Fee, would strip Orange County of its ability to impose impact fees. Stevens noted that Orange County recently modified its impact fee structure causing the fee for a multi-family project to increase from $302,000 to $1,593,000. Impact fees for single family residences built in Orange County have been in excess of $10,000 per house.

The second bill, HB 436 Local Government/Regulatory Fees, would prohibit the future imposition of impact fees by cities and counties, and would repeal all existing authority for the twenty municipalities and three counties who were granted this authority pursuant to local acts passed primarily between 1985 and 1989.

Despite opposition from local governments and their advocates, both bills were approved in committee, mainly along party lines. Representative Stevens explained that impact fees were unfair since they singled out our industry to pay for infrastructure that benefits the community as a whole.  The bills will now move to the House Finance Committee for further consideration.

The impact fee issue is receiving legislative attention largely as a result of the recent decision of the Supreme Court of North Carolina finding that water and sewer impact fees imposed for “future capacity” are not authorized and must be refunded. That case, Quality Built Homes v. Town of Carthage, was brought by a builder member with the support of the North Carolina Home Builders Association (NCHBA), which filed an amicus brief in the Supreme Court.

Similar fees have been collected by many other jurisdictions across the state and, as a result of this decision, are now subject to being refunded with interest. Local governments have turned to the General Assembly for relief. NCHBA has been in discussions with interested parties and this issue will remain a top priority for NCHBA’s team in the weeks ahead.

Source: NCHBA