Legislative Update 4/27/2017

It’s been a busy week at the legislature this week! Two bills supported by TAA have passed the House – HB 406 Repeal of Orange County Impact Fees and HB 706 Landlord/Tenant-Alias & Pluries Summary Ejectment (Private Process Server). Both of these bills have major impacts on the apartment industry in the Triangle.

• HB 406 repeals a controversial school impact fee that was granted to Orange County in 1987. Last year, the County voted to increase these fees over 500% from $1,286/unit to over $8,000/unit for some apartments. The fees are set to increase annually over the next 4 years with a staff evaluation at the end of that period. The increase was decided upon by County Commissioners without any justification or data-driven solutions. TAA fought with other partners against such steep increases and provided data that proved apartments had little to no impact on school enrollment. The fee actually decreased for single-family units, but increased for all multifamily units. HB 406 will save apartment developers who are building in Orange County millions of dollars!

The bill was introduced by Rep. Sarah Stevens (R-Surry, Wilkes) who also introduced another bill dealing with impact fees – HB 436 Local Government/Regulatory Fees. Initially, this bill would have eliminated ALL impact fees throughout North Carolina. The bill eventually transformed into a study bill that, if passed, would freeze all impact fees at their levels as of June 30, 2016, for one year as the General Assembly studies how impact fees should be implemented throughout the state. The discussions have been to create a formula-based solution that municipalities can use.

In NC, municipalities must be granted authority from the General Assembly to collect impact fees. Only a few actually have the ability, while many others are collecting fees without the authority. This could be dangerous for many municipalities and open them up to multiple lawsuits. Most municipalities are aware of the recent Quality Built Homes vs. Town of Carthage case, in which the North Carolina Supreme Court generally found that cities, counties, and towns do not have broad legal authority to charge up-front water and sewer fees to developers to fund future system improvements. The General Assembly will be addressing this issue further to ensure municipalities are within compliance of the law and not overreaching.

HB 406 and 436 have passed the House, sent to the Senate, and has now been referred to the Committee on Rules and Operations of the Senate. Please continue to contact Senators and encourage them to support HB 406!

• HB 706 is a bill in which AANC has pursued for the last three years. This bill gives the landlord a choice in who serves their eviction papers and allows the landlord to control the speed and quality of the service. It will allow private process servers to serve evictions in addition to the local Sherriff’s Department in counties with a population over 200,000.

This has been a hot issue over the last several years and has met strong opposition from the Sherriff’s Association. Initially, it was a state-wide bill, but in an effort to address the Sherriffs Association’s concerns, the bill will only affect counties with a population over 200,000. These counties include Buncombe, Cumberland, Durham, Forsyth, Gaston, Guilford, Mecklenburg, New Hanover, Union, and Wake. The Sherriffs’ concerns are that it will negatively affect their revenue, especially in rural counties. The Sherriff is required to serve the summons within five calendar days, but the failure rate for Wake and Durham counties is 30% and 20.6% respectively. With the heavy workload of the Sherriff, HB 706 addresses our issue of time and effectiveness.

HB 706 passed the House (92-26) and is now headed for the Senate. Please contact your Senators and encourage them to support HB 706!

We appreciate your calls and emails to House Representatives urging them to support these bills! Your help and involvement are key to the passage of legislation that has a positive impact on you and your business. If there are any questions or if you would like more information, please contact Jacob Rogers, TAA Government Affairs Director.

And remember, “If we’re not at the table, we’re on the menu.”