General Assembly Passes Regulatory Reform Bill

After failing to agree on a Regulatory Reform bill in late July, conferees from the North Carolina House and Senate managed to come together last week on a mostly noncontroversial package that lacked some notable provisions sought by the real estate industry.

Both chambers passed the conference report on S 734 without debate last Friday, and Governor McCrory is expected to sign it into law. While the bill includes some language that will be helpful to the real estate and development industries, Senate leadership refused to add a number of provisions that would have provided significant regulatory relief to home builders, landowners, and developers of office, retail and multifamily projects, including:

    Repeal of the Protest Provision statute;Clarification that local governments lack the authority to mandate the aesthetic design of single-family homes, townhomes and duplexes (the language from HB 150);A required study of Local Building Inspector authority;Clarification of what constitutes official misconduct for local building code officials;

The key real estate provisions that WERE included are:

    Permit Choice: If a rule or ordinance changes after a developer submits a permit application to a state or local agency, the applicant may now choose between complying with the original rule in place at the time they submitted or the newly adopted rule (Section 16). Many local governments, including the City of Charlotte, already have this policy in place.Isolated Wetlands: Allows developers to disturb up to 1 acre of isolated wetlands on property east of I-95, and up to 1/3 acre of isolated wetlands west of I-95. The mitigation ratio for any disturbance exceeding 1 acre shall be 1:1. The provision also excludes from the definition of isolated wetlands any isolated man-made ditch or pond, including stormwater management ponds (Section 54).Disclosure of Oil, Gas, and Mineral Rights: The conference report includes a provision supported by the North Carolina Association of Realtors® and the NC Real Estate Commission to improve the timeliness of property disclosure requirements regarding mineral, oil, and gas rights. Current law requires disclosure of oil and gas rights in the contract, but the new provision would require disclosure prior to an offer.A provision that ensures that the addition of a required centralized mailbox (CBU) in an approved single-family subdivision will not require any stormwater permit modification to address increased built-upon area (Section 46).A requirement that the Department of Environment and Natural Resources (DENR) report to the Environmental Review Commission by November 1, 2015, on any local ordinances that conflict with regulation promulgated by DENR (Section 32).

While we are disappointed that many of our key provisions were excluded from the conference report, we will continue to work with our partner associations to ensure their passage in the 2015 session of the General Assembly, which begins January 14th.

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