INC NEWS - 2 bad bills from the Senate

[pat carstensen]

One didn't pass, one right now only applies to one county (but is a REALLY 
bad precedent). Senator McKissick made good comments on these.   This 
summary is from the ConNet's weekly legislative review.  Probably more than 
you wanted to know.  Bottom line:  If we want growth to pay for itself, we 
are going to have to keep our eye on this kind of thing.  Regards, pat

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Senate Finance discussed, but did not vote on S1180, No Monetary Exaction 
for Development, Walter Dalton (Rutherford-D).  This bill prevents a local 
government from imposing a tax, fee or monetary contribution on developers 
as a condition of a development permit unless authorized specifically by 
law.  This essentially does two things: (1) codifies that local governments 
cannot impose an impact fee on development to pay for schools or other 
public services unless authorized by the state; and (2) prevents local 
governments from adopting  “adequate facilities ordinances” which require 
developers to pay for expansion of infrastructure to support the new 
development.

Audience members were given a chance to speak on the bill – the cities and 
counties spoke against it, and the realtors and homebuilders spoke for it. 
The cities’ concerns centered on whether regulatory fees they charge for 
services such as land use permits and zoning approvals, would be disallowed 
under the bill.  Dalton said the bill exempts over-the-counter services, 
though the League of Municipalities said they had a different reading of the 
bill. The counties echoed those concerns and also said it would impair the 
flexibility they currently have – presumably referring to ordinances 
requiring developers pay for infrastructure improvements stretched thin by 
growth.

The Realtor’s Association (representing 43,000 realtors, as they always 
point out), spoke for the bill, as did the Homebuilder’s Association 
(representing 17,200 firms). Paul Whelms with the Homebuilders, said the 
bill would “prohibit the levying of illegal fees” and the “coercion and 
extortion” that is currently going on. He asserted that often developers are 
told they can’t build their project because schools are inadequate, so they 
can either wait 5 years for a new school or pay the government $15,000 per 
house “at which time the schools magically become adequate.”

Sen. Goodall asked if developers would still be able to enter into voluntary 
agreements negotiated with local governments to pay a fee or donate land. 
Dalton: as far as I know.  Sen. McKissick urged caution, saying the bill 
would handcuff local governments who are ill equipped to finance needed 
infrastructure.  Sen. Hartsell raised the issue adequate facilities 
ordinances, which the courts have affirmed counties have the authority to 
adopt, and which this bill would seem to prohibit.  The bill was displaced 
for further discussion on another day.

Another bill, S373, Street Construction/Developer Responsibility, Tony Rand 
(Cumberland-D), in kindred spirit to S1180, limits the amount subdivision 
ordinances can require developers to pay for public street construction, 
tying it to the traffic increase attributable to the subdivision.

The bill emerged as a committee substitute in Senate Commerce on Wednesday, 
and on Thursday on the Senate floor, Sen. Harry Brown (Onslow-R) ran the 
bill, calling it a fairness issue for developers who are “having to pay more 
than their fair share” for road improvements. He indicated willingness to 
continue to work with stakeholders including the League of Municipalities. 
Sens. Dorsett, Doug Berger, Kinnaird and McKissick spoke against the bill, 
while Sen. Nesbit spoke for it (“the reason you can’t have affordable 
housing is all the burdens being put on developers.”).

As noted above, S373 began as a local bill and had this new language 
inserted into it through a committee substitute in Senate Commerce. On the 
Senate floor, Sen. Clodfelter, called a point of order, saying the bill ran 
afoul of Rule 39.1b which stipulates that a local bill can become a public 
bill only when it is a constitutional matter or when counties are added to a 
local bill.  After displacing the bill, Sen. Brown returned with an 
amendment to return the bill to a local bill by making it applicable only in 
Onslow County.  An amendment by Sen. Brock to add additional counties was 
withdrawn, though such amendments can be expected in the House. Brown’s 
amendment passed on a vote of 45-1 (Dorsett dissenting) and the bill passed 
on a vote of 38-8 (dissenting: D. Berger, Cowell, Dannelly, Dorsett, Graham, 
Kerr, Kinnaird, Shaw).

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