In This Report

• House and Senate moving apart on budget negotiations as the end of session seems imminent
• Building Code Regulatory Reform
• Important Changes to Water/Wastewater and CAMA permitting
• Confirmation of Todd Brown
• Confirmation of Jim Gillen

House and Senate Moving Apart on Budget Negotiations

After budget negotiations stalled last week, the House rolled out their spending plan in an effort to jumpstart talks. On Monday House Appropriation leaders unveiled a $31.8 billion dollar spending plan for the 2024-2025 fiscal year. Based on comments from the North Carolina Senate, it appears that the House plan was dead-on arrival in the Senate. However, the House proceeded to advance the spending plan on Wednesday, passing the legislation yesterday mostly along party lines. Of important note to the home building industry were three provisions, two dealing with workforce education and one dealing with a DEQ fee decrease.

The first recommendation deals with the Pre-Apprenticeship Certificate Training (PACT) program designed by the Home Builders Institute, an affiliate of the National Association of Home Builders. Last session, NCHBA was successful in advocating to allow North Carolina high schools to use the HBI program. This change also included $200,000 in grants to assist public school units with program costs associated with CTE programs. The House budget would increase the programs budget from $200,000 to $275,000 annually. This is a key piece in training the next generation of skilled workers that will be needed in our industry.

Another section would require the Department of Public Instruction to allocate financial resources to each school to provide one full time CTE coordinator to support students in the 6th and 7th grade with career development planning. 

The final industry related change would lower the NPDES Stormwater General Permit Fee from $120 to $100. The fee was mistakenly increase last year during negotiations with NCHBA and DEQ over increased efficiencies within the Department. This correction will lower the fee to the previously compromised amount.

At this point, it is unclear if the chambers can come together to reach a deal or if they will take some time off over the next two months and try at that point. One thing both chambers seem to agree on is that next week could be the last week of session for a while. 

Building Code Regulatory Reform

SB 166 (2024 Building Code Regulatory Reform) took a step forward this week. The annual building code legislation is NCHBA’s top legislative priority and contains nearly 30 substantive provisions intended to decrease the regulatory burden on the home building industry. On Thursday, the Senate Commerce and Insurance Committee heard the legislation for discussion only. The intent of the meeting was to allow Senate members to review the changes that were made in the House. When this legislation left the Senate last year, the bill only contained the first provision which deals with backflow preventers. Since the bill morphed into the vehicle for this year’s omnibus building code legislation, this committee hearing allowed Senate members and other interested stakeholders an opportunity to voice their support or concerns. NCHBA Lobbyist Steven Webb spoke in committee on the importance of affordability and how regulations at all levels increase the cost of housing by more than $93,000. This legislation has been calendared for Monday on the Senate floor.

Your lobbying team will continue to work with lawmakers and stress the importance of this legislation as we continue our effort to create a housing climate in North Carolina that allows potential buyers at every income level the opportunity at homeownership.

Important Changes to Water/Wastewater and CAMA Permitting Heard in Senate Judiciary

HB 385 (Various Energy/Env. Changes) was heard in the Senate Judiciary Committee on Wednesday. Senate Committee Chairs chose to hear the bill for discussion only. As previously reported, the bill contains an important provision for coastal builders dealing with rebuilding within the same footprint a previously permitted dock or pier without repeating the Coastal Area Management Act (CAMA) permitting process. It also includes a section that limits the ability of a local government unit to require an applicant for water and sewer service for residential development to agree to any condition that is “not authorized by law”. Furthermore, the bill prohibits any local government unit from accepting “any offer by the applicant to consent” to any condition not otherwise authorized by law.

Concerning the water and wastewater provision within H385, please note that on Wednesday the Senate modified this provision to clarify that a scoring system or preference system cannot include items not allowed under the law.

In addition to the CAMA dock and water and wastewater provision in H385, the legislation also included various statutory reforms (Section 11) to realign the Division of Coastal Management’s (DCM) current regulatory practices back to what we understand was the Legislature’s original intent when establishing CAMA. Please note that on Wednesday the Senate removed the previously proposed statutory realignment of DCM’s authority under CAMA and instead focused on an attempt to provide increased transparency and regulatory certainty involving the Office of State Archaeology’s disclosure of any known or suspected archaeological or historical significance of a property to current property owners and prospective purchasers.

Considering where the bill is in the legislative process and how the short session is developing, both the previous version of Section 11 and the current version will need further discussion before becoming law and this discussion will continue over the interim and into the next legislative long session in 2025. It is understood that the original language of Section 11 of HB 385 needs to be broader and more comprehensive than initially introduced earlier this month as it has been realized that the relationship between the Division of Coastal Management (DCM) and the Office of State Archaeology needs further examination relative to their impact to development within our state’s coastal counties.

We are sincerely grateful for the attention, time, and effort that lawmakers serving in the General Assembly, specifically for the leadership of Sen. Lazzara and Sen. Sanderson have demonstrated in an attempt to balance reasonable regulatory protections with property rights and how this balance directly affects the final purchase price of a home.

We look forward to the opportunity for more comprehensive discussions within this greatly needed area of regulatory reform in the upcoming long session.

The Senate is expected to move this bill to the floor next week, before sending it to the House.

NC Business Court Nominee Moves Through Senate

The nomination of Todd Brown, the Governor’s nominee for the NC Business Court which hears complex cases dealing with business issues, passed the Senate Judiciary Committee on Wednesday. Mike Carpenter, NCHBA Legal Counsel, led a business coalition in support of Brown’s nomination including introducing Brown to most of the Senators before the committee met.

All nominees for this court must be confirmed by the General Assembly. Currently there are five judges serving on this court and Todd would become the sixth. A strong and fair business court is critical to attract corporations to locate to our state and to keep the ones we currently have. The jobs these entities produce are critical to the future growth of our housing market.

Todd enjoys universal support from the business community as well as the plaintiffs’ bar. Todd, who manages the Charlotte office of Hunton, Andrews, Kurth LLP, also engages in an extensive litigation practice. As well, he serves this year’s President of the NC State Bar, which is the licensing and regulatory entity for the more than 33,000 licensed attorneys in our state.

His nomination will have one stop in the Senate Nominations Committee, before heading to the Senate floor. 

Industrial Commission Appointee Confirmed in House

On Wednesday, Jim Gillen was successfully confirmed for a second term on the Industrial Commission, after passing the House 104-0. Governor Cooper first nominated Jim Gillen to serve as a Commissioner in January 2019, and he was unanimously confirmed by the General Assembly in April 2019. Mr. Gillen began his career with the Industrial Commission in 1994, working as an Agency Legal Specialist under several Commissioners and as a Special Deputy Commissioner. Gillen then served as a Deputy Commissioner from 2005 until his confirmation as a commissioner.

One of the major provisions included in the workers’ compensation reform act of 2011 was to subject the six members of the NC Industrial Commission who are appointed by the Governor to legislative confirmation. This provision was proposed and included in the act at the request of NCHBA because of the extreme imbalance that then existed at the Commission. As we predicted, requiring legislative confirmation has produced the desired result – nominees who are highly qualified and who are committed to fairly interpreting the law and arriving at correct decisions. As with Todd Brown, NCHBA led a business coalition that supported his confirmation.

If you have any questions about this report, please reach out to Steven Webb at swebb@nchba.org.