Government Affairs Update 06/16/09

House Adopts Budget
After hours of meetings and legislative sessions, the House approved their version of a state budget this past week. The $18.6 billion spending plan deals with the state’s significant revenue decreases by pursuing a combination of cuts, taxes and federal stimulus money. The vote to approve the budget was largely along party lines, with only two Democrats voting against it. The final vote of the House’s budget occurred a little after midnight on Saturday morning.
The final House budget includes approximately $785 million in tax increases and $115 million in fee increases. Here are some of the specifics:

•Increase the statewide sales tax by a one-quarter of 1 cent.
•New income tax brackets for those with high incomes. The current rate for incomes more than $100,000 is 7.75 percent. The new income brackets would be 8.25 percent for incomes $200,000 to $500,000, and 8.5 percent for incomes greater than $500,000.
•Expand the franchise tax to limited liability companies.
•Impose the sales tax on warranties, installations and repairs (including maintenance).
•Impose the sales tax on digital downloads, such as music or ringtones.
•Impose sales tax on entertainment items, such as movie tickets.
•Increase liquor tax 1.5 percent.
•$5 increase in the fee to record a deed and a $10 increase in the recordation fee for mortgages.
The NC Association of REALTORS® worked hard to make sure that the new sales taxes do not apply to real estate services or to services and repairs related to real property.
The House is not the last stop for the state’s budget. Now the Senate and House will begin discussions and attempt to resolve the differences in their respective versions of the budget by the beginning of the fiscal year.
Home Inspector Legislation Passes Senate
Legislation to improve home inspection reporting and increase the professionalism of the home inspection industry was approved by the Senate this past week. SB 1007 (Amend Home Inspector Licensure Laws), http://www.ncleg.net/Sessions/2009/Bills/Senate/PDF/S1007v3.pdf, clarifies what information should be contained on the summary page of the home inspection report and requires all existing home inspectors to take 48 hours of instruction over the next three years on inspection techniques and reporting requirements. The bill also changes the licensing procedure from an apprentice-style approach to one that requires pre-licensing education. The legislation, which was introduced by Senators David Hoyle (D-Gaston) and Don Vaughan (D-Guilford), will now be heard in the House.
Beach Plan/Coastal Insurance
The NC Association of REALTORS® continues to push for improvements to the state sponsored coastal insurance pool, often referred to as the Beach Plan. And to this end, the Association’s Issues Mobilization Committee recently approved the funding of a research project on the state’s rate making system and the impact that recent rate, surcharge and deductible changes could have on the housing industry.
The NC Association of REALTORS® advocacy efforts also include seeking fairer surcharges and deductibles in the Beach Plan, opposing reduced maximum coverage for residential Beach Plan policies, prohibiting the distribution of Beach Plan surplus, redrawing rate territories to provide for more fairness, greater transparency in the ratemaking process and Beach Plan decisions, providing for mitigation credits and allowing Beach Plan premiums to be paid by installments.
Texting and Driving
A bill that will ban motorists from texting while driving was approved by the Senate this week and sent to the Governor for approval. HB 9 (No Texting While Driving), introduced by Reps. Garland Pierce (D-Scotland), Pricey Harrison (D-Guilford) and Larry Hall (D-Durham), will lead to fines of $100 plus court costs for motorists who are caught sending a text message on their cell phone while driving. A school bus driver could face a misdemeanor punishable by at least a $100 fine. Ten states and the District of Columbia currently have a text messaging ban for all drivers, according to the national Governors Highway Safety Association, which represents state highway safety agencies. The bill makes exceptions for emergency responders, as well as people who use voice-activated technology or access global navigation systems. This legislation will take effect on December 1, 2009.
Other Legislation
• Jordan Lake Rules – Legislation was approved by the Senate Agriculture, Environment and Natural Resources Committee this week that rewrites administrative rules that regulate various activities in the Jordan Lake watershed. HB 239 (Disapprove Jordan Lake Rules), introduced by Reps. Lucy Allen (D-Franklin) and Pryor Gibson (D-Anson), specifically repeals the rule that regulates existing development and replaces it with a much more sensible regulatory scheme. This is great news for property owners in the watershed, as the original rules had extremely high implementation costs and would have required environmental retrofits of existing development. The bill will be voted on in the Senate this week.
• Scrap Metal Theft Prevention – Legislation aimed at preventing the theft of scrap metals by restricting how it can be resold passed the Senate Judiciary I Committee this week. Introduced by Reps. Thom Tillis (R-Mecklenburg) and Jim Gulley (R-Mecklenburg), HB 323 (Prevent the Theft of Scrap Metals), http://www.ncga.state.nc.us/Sessions/2009/Bills/House/PDF/H323v3.pdf, will go to the full Senate for a vote this week. This REALTOR®-supported legislation is intended to reduce the theft of such items as air conditioner evaporator coils and copper pipes from residential and commercial properties.
• Vacation Rental Insurance – HB 780 (Building Code/Exempt Equestrian Arenas), http://www.ncga.state.nc.us/gascripts/BillLookUp/BillLookUp.pl?Session=2009&BillID=hb+780, introduced by Rep. Howard Brubaker (R-Randolph) was amended last week to include the provisions from HB 777 (Vacation Rentals/Mandatory Evacuations), http://www.ncga.state.nc.us/Sessions/2009/Bills/House/PDF/H777v1.pdf, introduced by Reps. Tim Spear (D-Washington) and Danny McComas (R-New Hanover). HB 777 requires vacation rental insurance policies to cover the return of the proportional share of the rent, fees and taxes for each night the travelers do not get to stay in their rental due to a mandatory evacuation of the area. Currently, the policies are only required to cover the return of the proportional share of the unused rent. HB 780 was passed by the Senate Commerce Committee this week and will be heard by the Senate this week.
• Plastic Bag Ban – SB 1018 (Ban Certain Single-Use Bags), introduced by Sen. Josh Stein (D-Wake), passed the Senate and is a pilot program backed by Senate President Pro Temp Marc Basnight (D-Dare) that would ban plastic bags in Dare, Currituck and Hyde counties, with some limited exceptions. This bill was passed by the House Environment and Natural Resources Committee this past week and will be heard by the House Commerce, Small Business and Entrepreneurship Committee this week.

U.S. Senate Committee Approves Legislation without Energy Labels
The Senate energy committee approved the building efficiency title of a broader energy and climate bill. Thanks to Realtor visits, heeded calls to action and continuing efforts, the committee reconsidered an initial proposal that would have established and implemented a real estate labeling program. Instead it adopted a bipartisan amendment by Sen. Lisa Murkowski (R-AK) in collaboration with Chairman Jeff Bingaman (D-NM) which concentrates on improving the long-standing existing Energy Star for commercial buildings program. Rather than simply expanding this program to additional building types, under the committee-approved bill the EPA will evaluate, in the form of pilot projects, whether the data that is currently used or other data is more appropriate for measuring building efficiency. Among study elements is how best to measure building efficiency and develop formats for displaying the results in a certificate for covered building types. These are considerable improvements over the draft bill and puts NAR in a stronger position going into a House floor debate over H.R. 2454 by Rep. Henry Waxman (D-CA) which includes prescriptive, transaction-based labeling provisions and was recently approved by the House energy committee.

The next step in the Senate is floor consideration although it is not clear whether and when this and other energy titles will be combined with provisions to "cap and trade" carbon emissions to be developed by the Senate's environment committee. House leadership is aiming for floor consideration of H.R. 2454 before the July 4th recess. NAR will continue to work with the members of Congress and make every effort to bring both the House and Senate bills more closely in line with NAR policy.