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NC House panel pushes back on impact fee law repeals but clears Orange County repeal

Efforts by a House Republican to repeal laws granting certain local North Carolina governments authority to charge fees on new residential construction to help pay for anticipated schools and infrastructure have been partially pushed back, the Associated Press has reported.

Speaker Pro Tempore Sarah Stevens introduced two measures that passed a committee last week but faced stiff opposition Thursday in the House Finance Committee.

The panel voted to remove provisions from one bill that would have canceled laws for two dozen local governments to issue “impact fees,” and instead directed a study on them. Stevens says recent state Supreme Court rulings warranted voiding current fees while a new statewide fee formula is considered.

However, the finance panel also narrowly approved Stevens’ separate measure to repeal impact fees for Orange County, which she argues abused its authority.

The North Carolina Home Builders’ Association (NCHBA) has long opposed impact fees.

Stevens introduced the two bills in March regarding impact fees which were authorized by the General Assembly more than 30 years ago. The first, HB 406 Repeal Orange County Impact Fee, would strip Orange County of its ability to impose impact fees. Stevens noted that Orange County recently modified its impact fee structure causing the fee for a multi-family project to increase from $302,000 to $1,593,000. Impact fees for single family residences built in Orange County have been in excess of $10,000 per house.

The second bill, HB 436 Local Government/Regulatory Fees, would prohibit the future imposition of impact fees by cities and counties, and would repeal all existing authority for the 20 municipalities and three counties who were granted this authority pursuant to local acts passed primarily between 1985 and 1989, the NCHBA reported.

Despite opposition from local governments and their advocates, both bills were approved in committee, mainly along party lines. Stevens explained that impact fees were unfair since they singled out our industry to pay for infrastructure that benefits the community as a whole.

The impact fee issue is receiving legislative attention largely as a result of the recent decision of the Supreme Court of North Carolina finding that water and sewer impact fees imposed for “future capacity” are not authorized and must be refunded. That case, Quality Built Homes v. Town of Carthage, was brought by a builder member with the support of the NCHBA, which filed an amicus brief in the Supreme Court.

Similar fees have been collected by many other jurisdictions across the state and, as a result of this decision, are now subject to being refunded with interest. Local governments have turned to the General Assembly for relief. NCHBA has been in discussions with interested parties and this issue will remain a top priority for NCHBA’s team in the weeks

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