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2008 State Legislative Issues |
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On April 7th the Maryland General Assembly adjourned its 2008 regular session after considering nearly 300 bills affecting land use and construction. A table listing the bills and positions is attached to this briefing. Below are summaries of several of the most significant legislative issues affecting land use and construction that the General Assembly is considering.
Industry Working Group Secures Amendments to Critical Areas Bill Margaret McHale, former Chesapeake Bay Foundation attorney was recently appointed Executive Director of the Chesapeake and Atlantic Coastal Bays Critical Area Commission. Shortly after her appointment legislation tightening review and approval of critical area development activities was made a part of the Governor’s legislative agenda introduced to the General Assembly for consideration.
An industry working group on met weekly on the critical areas legislation during the session. HBAM members from Morris and Ritchie Associates, (MRA), Grayson Homes, Winchester Homes, Linowes and Blocher, Koren Development and others worked to amend provisions in the bill, particularly grandfathering and lot coverage limitations. The bill passed out of the House of Delegates with 32 pages of amendments that improved the bill enough to bring the Maryland Association of Counties and the building industry to support the bill with amendments.
The changes provide grandfathering protection for projects in the development review process, preserve local government administration of critical areas programs, make significant changes to how the bill as introduced would have changed the growth allocation process and remove portions of the lot coverage limitations that the legislature was originally asked to approve. The major provisions of the bill are:
1. The Critical Areas Commission is granted authority to adopt and amend regulations for the first time;
2. Current impervious surface limitations are changed to “lot coverage” limitations that count all man made materials. The bill was amended to removed roof overhangs, gapped decking and stormwater management facilities from the lot coverage calculation;
3. A proposed expansion of the buffer from 100 feet to 300 feet was amended to apply only in RCA and reduced to 200 feet. This RCA buffer may be reduced in accordance with local procedures approved by the Commission;
4. The bill changes growth allocation guidelines to “standards” and establishes a series of Smart Growth conditions that must be found by the Commission when considering a growth allocation request from a local government;
5. Critical area boundaries will be remapped using digital mapping techniques to reflect current conditions and;
6. Four types of grandfathering are written into the bill.
Changes as a result of remapping of the critical area boundary do not apply to projects that have received either growth allocation, final subdivision approval, final site plan approval, any other final approval, or is vested by December 31, 2008.
Enforcement provisions of the act apply to violations that originate after July 1, 2008.
Lot coverage limitations in the bill will not be applied to development projects and their subsequent permits that have applied for building or grading permits by October 1, 2008 and the permit is issued by January 1, 2010 or an initial application for development is submitted by October 1, 2008 and the development plan is approved by July 1, 2010. Lot coverage grandfathering must be maintained by submitting a lot coverage plan to be used to monitor and enforce coverage limits. Changes in lot coverage that increase the approved impervious surface will void this grandfathering provision.
New criteria for the award of allocation will not apply to applications approved by the commission before July 1, 2008.
7. Major changes to enforcement of activities on existing lots including additional penalties and requirements for consolidation, reconfiguration and retroactive compliance for older, substandard lots.
New Home Sales Agents Real Estate License Requirement Repealed – Builder Guarantee Fund Attached to the Bill – HBAM and the other home building associations were successful in a major effort to move regulation of builder sales agents from the Real Estate Commission into the Builder Registration Unit of the Attorney General’s Office. An industry working group negotiated a compromise bill with the Attorney General’s office that would create a sales agent certificate within builder registration. The Attorney General tied the corrective bill to passage of a builder guarantee fund that will reimburse consumers who suffer losses due to fraud, unfair trade practices or construction defects. An agreement on language was delayed by disagreements over the use of binding arbitration clauses in contracts. Final language preserved the use of binding arbitration in new home sales contracts. Major provisions of the bill include:
1. New home sales agents would pay a fee and be regulated by the builder registration unit of the Maryland Attorney General’s office. Real estate brokerage requirements and agency rules would not apply to new home sales;
2. A homebuilder guarantee fund would be established and funded by a $50.00 fee on each building permit;
3. A guarantee fund of $1,000,000 would be maintained by the builder registration unit;
4. Before accessing the fund a consumer would have to follow applicable new home warranty claim processes;
5. If there is no new home warranty, the dispute would be mediated through the builder registration unit before making a claim against the fund;
6. Binding arbitration clauses in contracts will be honored provided that the contract provides for mutual selection of the arbitrator. In cases where the two parties cannot agree on an arbitrator the Maryland Office of Administrative Hearings would conduct the arbitration using the Maryland Uniform Rules for Arbitration. An arbitration ruling would be dispositive. Without mutual selection the consumer would have the option of requesting a hearing before the attorney general and making an application for payment from the fund;
7. Payouts from the fund are capped at $50,000 per consumer and $300,000 per registrant. A registrant would be required to repay the fund for amounts paid to consumers due to their actions.
All Three Bills Expanding Standing to Appeal Are Killed - Recent high profile examples of communities not qualifying to appeal such as the WCI condominium building in Columbia and persistent pressure from the Falls Road Community Association in Baltimore County has kept the issue of standing to appeal in front of the legislature.
The standard used to determine standing to appeal is not uniform throughout the state. Twenty counties and all municipalities allow, “any taxpayer” to appeal a zoning decision. Seven charter counties including Baltimore County, Howard, Harford and Anne Arundel counties require that “an aggrieved party” who faces harm as a result of the decision take an appeal to the circuit court and above. For decades the General Assembly has considered and defeated bills that would expand standing to appeal without fully exposing the differences between the, “any taxpayer” and the, “aggrieved party” standards.
This year several bills granting standing to non-profit associations and community groups were introduced. The most advanced of the bills applied the, “any taxpayer” language that already exists in Article 66B to the remaining counties that operate under the “aggrieved party” rule.
The House of Delegates passed legislation affirming An amended bill has been passed out of committee that makes the bill enabling legislation permitting counties to establish their own threshold for standing.
Excise and Transfer Tax Authority Bills Die - Aid to local governments has been reduced by $580 million over the last four years. As a result, municipal governments asked the General Assembly to grant blanket authorization for cities and towns to assess building excise taxes. HBAM and the other local associations opposed expansion of the transfer tax. Other legislation would have granted counties and towns that do not now have the authority to collect a transfer tax to impose a tax of .5% on real estate transfers. HBAM supported expansion of the transfer tax arguing that broad based taxes should be utilized to pay for broad based government services.
Abolition of Residential Special Taxing Districts Bills Receive Unfavorable Report – Disputes over notification of property owners about the existence of special taxing districts in at least one Prince George’s County subdivision resulted in legislation that would prohibit the formation of new taxing districts in residential areas and would invalidate existing taxing districts. Jack Orrick of Linowes and Blocher anchored the industry panels testifying against the bills emphasizing the importance of the financing mechanism and the disruption in services and other problems that would be caused by invalidating the district taxes and interrupting the flow of money dedicated to servicing debt instruments.
Mandatory Visitability to Summer Study – The House of Delegates considered and rejected legislation that would have required a no step entrance, wider interior doors and an accessible bathroom in all new single-family dwellings permitted after April, 2009. Randy Melvin of Winchester Homes provided testimony explaining the difficulties associated with the proposed mandate using examples from age restricted projects the company has built in recent years. The visitability issue will be the subject of a summer study by a legislative committee and DHCD.
Common Ownership Communities Bills Pushed to Summer Study – Several years of task force work on difficulties associated with Home Owner Association governance produced recommendations that the General Assembly has not yet passed into law. This session legislation sponsored by the Maryland Attorney General set rules for transition between a developer run HOA and homeowners, the requirement that a reserve study be completed, and a fidelity bond requirement for management companies and their employees. These bills were either withdrawn or sent to interim study.
No Net Loss of Forest Bills Die - 2009 Return Likely – Seventeen years after the Forest Conservation Act was passed by the General Assembly, forest conservation and protection was again taken up by the legislature. The Maryland Department of Natural Resources through Bay-Stat and the Chesapeake Bay Program are developing data on forest losses / conversion in advance of efforts to revise Maryland’s forest conservation laws with the goal of achieving, “no net loss” of forest. Legislation considered in the Maryland Senate instructing the Department of Natural Resources to present the legislature with legislation for the 2009 session that would achieve a no net loss of forest failed. A second bill introduced at the request of the Maryland Department of the Environment would set no-net-loss as the policy of the state and establish a task force to recommend methods to implement the policy was withdrawn. It is expected that the Maryland Department of the Environment will submit a departmental bill next year rewriting forest conservation.
Wetlands Fee Bill Passes - The legislature has authorized MDE to establish a fee schedule for wetlands and waterways permit applications. Fees begin at $750 for a general permit, $1,500 for a ¼ acre disturbance and top out at $7,500 per acre for disturbances over one acre in size. The number of permit reviewers and other staffers in the wetlands and waterways program has dropped 40% since 1991. MDE cannot revise the fee structure before 2012 but the rate of the fees will increase annually by an amount based on CPI. Revenue from the fee is dedicated in large part to program activities and staff positions.
MDE Releases Nutrient Trading Rules for Point Sources – As major tributaries of the Chesapeake Bay reach regulatory pollution limits conflicts are possible between growth policies that concentrate development in growth areas and environmental goals set to reduce bay pollution. In order to operate in this environment and reconcile potentially divergent policies MDE has released its rules a cap and trade system for point sources such a sewage treatment plants. Under the rules plants will be required to mitigate for new sources of pollution. MDE is now drafting regulations that would establish a non-point source cap and trade system. These regulations are expected to be released in the fourth quarter of 2008.
NPDES General Permit Standards Under Pressure from Environmental Groups – The Maryland Department of Environment (MDE) has issued a final determination to reissue the NPDES general permit for construction activity. The new permit will become effective on March 31, 2008 and remain in effect through December 31, 2008. MDE has scheduled a series of stakeholder meetings the 2nd Wednesday of each month commencing on April 9th to take public comment about reissuance of the permit and consider provisions of a replacement general permit to be issued in January of 2009. Environmental organizations oppose reissuance of the current permit conditions and are pushing hard to require effluent limitations and turbidity standards for individual sites. The industry’s stormwater working group is participating in the public meeting process and coordinating efforts with the Maryland Society of Professional Engineers.
Smart Growth Task Force – Jon Laria a development attorney with Ballard, Spahr in Baltimore has been appointed by Governor O’Malley to chair the Task Force on Growth and Development in Maryland. The task force is charged with studying a wide range of growth and land use issues as well as determining the parameters for a State development plan, transportation plan and State housing plan and how these plans would work together with local land use plans. The task force is required to submit its finding and recommendations by December 1, 2008 but its members will serve as an advisory board to the Governor’s Smart Growth Sub cabinet through 2010. The work of the task force is critical because it is evident that the O’Malley administration intends major growth related legislation in 2009 aimed a correcting functional problems with Smart Growth. Frank Hertch with Morris Ritchie Associates represents in the industry on the task force.
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HBAM’s Receives National Award for Government Relations Achievements
HBAM’s work with state and local government has been awarded a Smart Growth Achievement Award by the National Association of Home Builders at the 2006 International Builders Show.
The award recognizes HBAM’s achievement in land inventory and development capacity analysis. The project was developed by the association to address the severe shortage of land suitable for construction in the counties served by HBAM.
The land inventory program was designed to institutionalize the use of data about remaining development capacity and projections of future land needs into the local land use planning process; something that was not widely done prior to the initiative.
The initiative began with a demonstration land inventory and development capacity analysis in Baltimore County. Association members, staff and consultants worked with the county to estimate remaining development capacity within the water and sewer service area of Baltimore County. The process used GIS technology and simple calculations of the average yield of housing units per acre in various zoning classifications to determine the remaining development capacity.
The issue was the subject of state legislation written and sponsored by HBAM that would have mandated that local jurisdictions conduct development capacity analysis on a regular basis. The bill was fiercely opposed by the Maryland Association of Counties and the Maryland Municipal League but supported by environmental groups such as the Chesapeake Bay Foundation.
Local elected officials rightly saw the land inventory issue as a threat to the indiscriminant down zoning common in many suburban Maryland counties. County planners claimed the mandate would cost tens of millions of dollars to complete and that development capacity was not important even though most studied the technique extensively and some had conducted such studies for their own use. Bizarre legalistic arguments were effectively put forth claiming that the inventory estimates would be used by zoning attorneys to win vesting cases in court. No growthers of all kinds fought hard because they saw that suppressing growth would be more difficult if government data verified insufficient zoning to accommodate future growth.
The state legislation requiring inventories as part of the local planning process won a majority of committee votes but failed to get the supermajority required to pass out of committee. The bill served as a platform for the concept and was successful in that it convinced the governor, historic preservation groups and the Chesapeake Bay Foundation to continue to work in coalition with the building industry to achieve the goals of the legislation.
The industry proposed and was granted a gubernatorial task force to study the issue which set in motion a series of events that investigated and debunked the objections of opponents and institutionalized the practice of land inventory and development capacity analysis in Maryland.
First, the utility and importance of land inventory was acknowledged by the task force members including the counties and towns. Second, a methodology was created that met with the approval of the task force. Third, development capacity studies were completed in five counties and five towns. Fourth, a memorandum of agreement was signed by the parties stipulating that local comprehensive land use plans contain an inventory of land and development capacity analysis.
33 jurisdictions are now using development capacity as part of their land planning program and others have committed to follow as their land use plan updates come due. The full report of the Governor’s Development Capacity Task Force is available online at: http://www.mdp.state.md.us/pdf/dctf/DCTF-Final.pdf
HBAM was one of two associations in the country to receive a Smart Growth Achievement Award at the 2006 award ceremony.
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