The S.C. Department of Labor, Licensing, and Regulation (LLR) will be sending out the following notice to all building officials in SC.
***
Dear Code Officials:
Many local codes departments in South Carolina require a Residential Specialty Contractor license/registration in Electrical, Plumbing, or HVAC before issuing a permit for this type of work. In the past, the Commission has issued such licenses/registrations to licensed Residential Builders. Please note, however, that S.C. Code Ann. § 40-59-20(7) specifically states that a residential specialty contractor may not be a licensed residential builder. Therefore, in accordance with the law, the Commission will no longer issue Residential Specialty Contactor licenses/registrations to Residential Builders.
The S.C. Residential Builders exam tests builder applicants on the three mechanical trades of Electrical, Plumbing, and HVAC. Therefore, a Residential Builder who received his or her license by exam is qualified to perform work in these trades and will have the designation "RBB" on his or her license and will have as the "Home Builders" as the license type on LLR licensee lookup.
The Commission also licenses Residential Builders without exam in three instances: (1) a passing score on the NASCLA exam; (2) a license issued by the SC Contractors Board; or (3) a license from a state with whom the Commission has an exam waiver agreement. A Residential Builder who received his or her license without exam is not qualified to perform work in the mechanical trades and will have the designation "RB" on his or her license as well as license type on LLR licensee lookup. RB Exam Waiver licensees must subcontract with an appropriately licensed person or company to perform any of the mechanical trades on a project.
I hope this clarifies any questions you may have. Please feel free to contact the Commission with any issues that may arise.
***
This is not a new policy and does not change any licensing requirements. This issue has been brought up several times in the last few months (either a local municipality trying to exact additional business license fees, or builders who have had their license suspended trying to usurp the suspension).
The Home Builders Association of Greenville are your neighbors and community leaders providing education and support for building industry professionals. We create jobs, encourage homeownership, and promote responsible growth throughout the upstate of South Carolina.
Showing posts with label licensing. Show all posts
Showing posts with label licensing. Show all posts
Friday, March 24, 2017
Thursday, October 15, 2015
Emergency License Information Regarding Out-of-State Contractors
Thanks to the South Carolina Department of Labor, Licensing and Regulation (LLR) for sending this important information out. For LLR's tips on how to prevent contractor scams, click here.As a result of the flooding across the State, many out-of-state builders and specialty contractors are seeking employment to perform repairs, construction work, or other services to residential structures. Please be advised that when issuing building permits to any such builders or contractors applying to do work in this State, they must be appropriately licensed or registered by the South Carolina Residential Builders Commission (“Commission”).The Commission anticipates issuing emergency licenses to qualified, out-of-state residential builders and residential specialty contractors in the classifications of electrician, plumber, and heating and air conditioner installer/repairer pursuant to S.C. Code Reg. 106-5. A copy of this regulation is below for your review. Under these emergency licenses, builders will be limited to a total valuation of $100,000.00 for any single project and electricians, plumbers, and heating and air conditioning installers/repairers will be limited to a total valuation of $35,000.00 for any single project. These emergency licenses are valid only for repairs/work related to heavy rain and flash flooding for which Governor Haley declared a State of Emergency on October 1, 2015, and will expire on April 1, 2016, such that any builder, plumber, electrician, or heating and air conditioner installer/repairer who plans to work in the affected counties beyond that time period is encouraged to apply for a regular license in the interim.Residential builders licensed in Alabama, Georgia, Louisiana, North Carolina, and Utah qualify for reciprocity and have the option of applying for an emergency license or a regular residential builders license.All other specialty contractors, including vinyl and aluminum siding installers, insulation installers, roofers, floor covering installers, masons, dry wall installers, carpenters, stucco installers, and painters/wall paperers, must apply to the Commission for a regular South Carolina residential specialty contractor registration before they can perform work in this State in excess of $200. There are no emergency registrations for these specialty registrants.Attached are copies of the Emergency License Registration Application, and Residential Specialty Registration Application, which may be disseminated to any out-of-state builders or specialty contractors seeking licensure or registration in this State.The Commission intends to expedite and process the emergency applications as quickly as possible during this time of need. For those applicants seeking a regular license that requires examination, the Commission is prepared to schedule additional testing times and sites.The emergency license is only for residential repairs.A. In the instance of an event declared to be an emergency by the governor, the department, as defined by S.C. Code Ann. Section 40-59-20(2), is authorized to issue emergency licenses and registrations for out-of-state builders and specialty contractors.106-5 Emergency License and Registration
B. To qualify for an emergency license or registration, an individual, at the time of application, must submit a verification letter issued by the state in which the applicant's principal place of business is located (home state) as proof that his or her license is in good standing. The emergency license or registration may be issued only to the individual shown on the home-state license. The home-state license must have been issued by examination; a "grandfathered" license or registration will not be accepted as proof of licensure.
C. In addition to proof of home state licensure, an applicant must also provide:
1. An emergency license application;
2. A national criminal background report current within fourteen (14) days of the date of application. A criminal background report showing misdemeanors listed for twenty-four (24) months or felonies listed for fifteen (15) years prior to the application date will not qualify for licensure;
3. A current bond for home builders of at least Fifteen Thousand Dollars ($15,000.00) and current bond for specialty contractors of at least Five Thousand Dollars ($5,000.00); and,
4. A fee of One Hundred Dollars ($100.00).
D. An emergency license or registration will be:
1. Issued for one (1) specific event;
2. Limited to a total valuation of One Hundred Thousand Dollars ($100,000.00) for any single project for home builders, and a total valuation of Thirty-five Thousand Dollars ($35,000.00) for any single project for specialty contractors;
3. Valid only for the scope of work permitted by the applicant's home-state license;
4. Valid only within the area of the declared emergency; and,
5. Valid only for the duration of the emergency declaration, or as extended at the board's discretion.
HISTORY: Added by State Register Volume 36, Issue No. 6, eff June 22, 2012.
Counties currently declared by FEMA to be in the disaster area due to the October SC flood event are: Bamberg, Berkeley, Calhoun, Charleston, Clarendon, Colleton, Darlington, Dorchester, Florence, Georgetown, Greenwood, Horry, Kershaw, Lee, Lexington, Orangeburg, Richland, Sumter and Williamsburg.If you are applying for an initial license with the South Carolina Residential Builders Commission, you may now apply online by clicking on the link below:
Tuesday, August 4, 2015
Sting Nets 73 Cases of Unlicensed Builders/Contractors in State
Investigators for the S.C. Residential Builders Commission (RBC) and S.C. Contractor’s Licensing Board (CLB) found 73 cases of unlicensed activity when they participated in a national sting operation during the week of June 16, 2015. The sting was in coordination with the National Association of State Contractors Licensing Agencies (NASCLA).
Of the 33 cases that have resulted in public orders so far, three were for companies with Greater Greenville addresses.
Six investigators from the S.C. Department of Labor, Licensing and Regulation’s (LLR) Office of Investigations and Enforcement and three staff members reviewed internet listings and physically monitored home improvement store parking lots across the state to look for people who were advertising plumbing, electrical, carpentry, HVAC, roofing, home inspecting and other building services requiring licensure by LLR.
“The goal of the sting was to work together with NASCLA and other boards across the country to protect consumers and deter illegal construction activity,” RBC Administrator Janet Baumberger said. “This is the second time we have participated in the sting, and each time we have discovered at least 70 cases. We look forward to participating again to further protect consumers.”
In addition to South Carolina, eight states participated in the sting: Arizona, California, Florida, Nevada, Rhode Island, Texas, Utah and Washington.
“LLR is committed to its mission of protecting the health and safety of South Carolina citizens,” LLR Director Richele Taylor said. “Operations like these help us educate the public on how to protect themselves from unlicensed contractors and highlights the steps individuals must take to become licensed.”
RBC and CLB encourage consumers to check to see if a builder is licensed by going to llronline.com and clicking on Licensee Lookup. RBC licenses all residential builders and home inspectors and licenses/registers all specialty contractors in the state. RBC investigates complaints from homeowners having problems with builders or licensed/registered specialty contractors and, if necessary, takes disciplinary action against them.
Most builders who do home improvement projects will fall under the RBC. However, a contractor might be licensed by the CLB, which regulates the practice of general and mechanical contracting, burglar and fire alarm system businesses and fire protection sprinkler contractors.
“Persons holding themselves out to be a general or mechanical contractor while not licensed presents a threat to the general public,” CLB Administrator Roger Lowe said. “By participating in this operation, it is clear that unlicensed practice presents a very real problem in South Carolina. If a property owner discovers that a potential contractor is unlicensed, we would encourage them to pass that information along to our Office of Investigations and Enforcement. By law, offering to perform regulated work without a license is the same as actually doing the work.”
In addition to making sure a builder is licensed, the RBC and CLB offer the following tips when hiring someone to do work on your home:
For copies of Cease and Desist orders issued as a result of the sting, click here. Orders are posted to this site as the Boards receive notice the orders have been served on the individuals.
Of the 33 cases that have resulted in public orders so far, three were for companies with Greater Greenville addresses.
Six investigators from the S.C. Department of Labor, Licensing and Regulation’s (LLR) Office of Investigations and Enforcement and three staff members reviewed internet listings and physically monitored home improvement store parking lots across the state to look for people who were advertising plumbing, electrical, carpentry, HVAC, roofing, home inspecting and other building services requiring licensure by LLR.
“The goal of the sting was to work together with NASCLA and other boards across the country to protect consumers and deter illegal construction activity,” RBC Administrator Janet Baumberger said. “This is the second time we have participated in the sting, and each time we have discovered at least 70 cases. We look forward to participating again to further protect consumers.”
In addition to South Carolina, eight states participated in the sting: Arizona, California, Florida, Nevada, Rhode Island, Texas, Utah and Washington.
“LLR is committed to its mission of protecting the health and safety of South Carolina citizens,” LLR Director Richele Taylor said. “Operations like these help us educate the public on how to protect themselves from unlicensed contractors and highlights the steps individuals must take to become licensed.”
RBC and CLB encourage consumers to check to see if a builder is licensed by going to llronline.com and clicking on Licensee Lookup. RBC licenses all residential builders and home inspectors and licenses/registers all specialty contractors in the state. RBC investigates complaints from homeowners having problems with builders or licensed/registered specialty contractors and, if necessary, takes disciplinary action against them.
Most builders who do home improvement projects will fall under the RBC. However, a contractor might be licensed by the CLB, which regulates the practice of general and mechanical contracting, burglar and fire alarm system businesses and fire protection sprinkler contractors.
“Persons holding themselves out to be a general or mechanical contractor while not licensed presents a threat to the general public,” CLB Administrator Roger Lowe said. “By participating in this operation, it is clear that unlicensed practice presents a very real problem in South Carolina. If a property owner discovers that a potential contractor is unlicensed, we would encourage them to pass that information along to our Office of Investigations and Enforcement. By law, offering to perform regulated work without a license is the same as actually doing the work.”
In addition to making sure a builder is licensed, the RBC and CLB offer the following tips when hiring someone to do work on your home:
- Ask the builder to provide you with the names and contact information of people he or she worked for in the past.
- Check with the Better Business Bureau to see if there have been complaints filed against the builder.
- Don’t rely on verbal promises. Ask the builder to provide you with a contract, and read it thoroughly to make sure everything you agreed on is in the document.
- Don’t pay all the money upfront.
- Beware of any builder or contractor who solicits business saying he or she “has material left over from another job in the area and can give you a real good price.” This is a sign you may be dealing with an unlicensed contractor or scam artist.
- Ask the builder, contractor or specialty contractor to provide you with a copy of his or her license or registration.
- Click here to verify the individual is currently licensed with the RBC.
- Click here to verify the individual is currently licensed with the CLB.
- Click here to search for any possible disciplinary actions with the RBC.
- Click here to search for any possible disciplinary actions with the CLB.
- Call the RBC at 803-896-4696 or the CLB at 803-896- 4686 for assistance in locating an individual.
For copies of Cease and Desist orders issued as a result of the sting, click here. Orders are posted to this site as the Boards receive notice the orders have been served on the individuals.
Thursday, September 27, 2012
LLR sting results in 70 cases against unlicensed contractors
The S.C. Residential Builders Commission recently participated in a national sting operation in which investigators found 70 cases of unlicensed activity in just an eight-hour period.
Six investigators from LLR’s Office of Investigations and Enforcement worked with the commission to review more than 200 Internet listings and patrol home improvement store parking lots across the state to find people who were advertising plumbing, electrical, carpentry, HVAC, roofing and other building services requiring licensure by LLR.
“What we found in just one day further emphasizes our message that consumers need to be on alert any time they hire someone to do work to their homes: Make sure they are licensed, and never pay the full cost of the work upfront,” Administrator Janet Baumberger said. “Our investigators and staff will continue their diligent efforts to find and shut down unlicensed builders.”
The sting on September 10, 2012, was coordinated by the National Association of State Contractors Licensing Agencies (NASCLA), and the goal was for states to work together to protect consumers and deter illegal construction activity. The sting resulted in 16 open cases in the Upstate alone.
In addition to South Carolina, six states participated in the sting: Arizona, California, Nevada, Oregon, Rhode Island, and Utah. “This was not a one-time occurrence,” Baumberger said. “We routinely search the Internet for unlicensed people who are offering building services in our state. And our investigators always have their eyes open for unlicensed activity.”
Consumers can check to see if a builder is licensed by going to www.llronline.com and clicking on Licensee Lookup. All Builder members of the Home Builders Association of Greenville maintain either a residential or commercial builders license with LLR as a condition of their membership.
The RBC licenses all residential builders and home inspectors and registers all specialty contractors in the state. The commission investigates complaints from homeowners having problems with builders or registered specialty contractors and, if necessary, takes disciplinary action against them.
Most builders who do home improvement projects will fall under the Residential Builders Commission. However, a contractor might be licensed by LLR's Contractors' Licensing Board, which regulates the practice of general and mechanical contracting, burglar and fire alarm system businesses and fire protection sprinkler contractors.
In addition to making sure a builder is licensed, the Home Builders Association of Greenville offers the following tips when hiring someone to do work on your home:
Six investigators from LLR’s Office of Investigations and Enforcement worked with the commission to review more than 200 Internet listings and patrol home improvement store parking lots across the state to find people who were advertising plumbing, electrical, carpentry, HVAC, roofing and other building services requiring licensure by LLR.
“What we found in just one day further emphasizes our message that consumers need to be on alert any time they hire someone to do work to their homes: Make sure they are licensed, and never pay the full cost of the work upfront,” Administrator Janet Baumberger said. “Our investigators and staff will continue their diligent efforts to find and shut down unlicensed builders.”
The sting on September 10, 2012, was coordinated by the National Association of State Contractors Licensing Agencies (NASCLA), and the goal was for states to work together to protect consumers and deter illegal construction activity. The sting resulted in 16 open cases in the Upstate alone.
In addition to South Carolina, six states participated in the sting: Arizona, California, Nevada, Oregon, Rhode Island, and Utah. “This was not a one-time occurrence,” Baumberger said. “We routinely search the Internet for unlicensed people who are offering building services in our state. And our investigators always have their eyes open for unlicensed activity.”
Consumers can check to see if a builder is licensed by going to www.llronline.com and clicking on Licensee Lookup. All Builder members of the Home Builders Association of Greenville maintain either a residential or commercial builders license with LLR as a condition of their membership.
The RBC licenses all residential builders and home inspectors and registers all specialty contractors in the state. The commission investigates complaints from homeowners having problems with builders or registered specialty contractors and, if necessary, takes disciplinary action against them.
Most builders who do home improvement projects will fall under the Residential Builders Commission. However, a contractor might be licensed by LLR's Contractors' Licensing Board, which regulates the practice of general and mechanical contracting, burglar and fire alarm system businesses and fire protection sprinkler contractors.
In addition to making sure a builder is licensed, the Home Builders Association of Greenville offers the following tips when hiring someone to do work on your home:
- Ask the builder to provide you with the names and contact information of people he worked for in the past.
- Check with the Home Builders Association of Greenville and Better Business Bureau of the Upstate to see if there have been complaints filed against the builder.
- Don’t rely on verbal promises. Ask the builder to provide you with a contract, and read it thoroughly to make sure everything you agreed on is in the document.
- Don’t pay all the money upfront.
- Beware of any contractor who solicits business saying he "has material left over from another job in the area and can give you a real good price." This is a sign you may be dealing with an unlicensed contractor or scam artist.
Friday, September 16, 2011
LLR: New requirement for performance bond
LLR has announced a new requirement that must be contained by the license bond purchased by many Licensed Residential Builders. The requirement of the license bond is as follows:
“SC law allows home owners who desire to claim against the required Residential Builder licensing bond to use means other than LLR.”
According to LLR, license bonds purchased after October 31, 2011, or upon expiration of an existing bond, must contain the above language. Historically, license bonds have not contained this provision, even though South Carolina case law requires it.
“SC law allows home owners who desire to claim against the required Residential Builder licensing bond to use means other than LLR.”
According to LLR, license bonds purchased after October 31, 2011, or upon expiration of an existing bond, must contain the above language. Historically, license bonds have not contained this provision, even though South Carolina case law requires it.
South Carolina law requires that Licensed Residential Builders post a $15,000 bond as a condition of their license, or submit an audited financial statement in lieu of the bond.
Monday, August 2, 2010
Immigration Law Lunch and Learn
Melissa Azallion, Esq., an immigration law expert with the law firm Nexsen Pruett in Hilton Head, will teach a lunch and learn workshop on the new state immigration law, enforcement techniques by Federal and State agencies, and how you can comply with these laws.
August 23, 11:30 a.m.
Hubbell Lighting Headquarters
Immigration has become a significant political issue and a new state law took effect for all employers on July 1. In addition, ICE, or the Federal Immigration Control and Enforcement, recently visited the Greenville area and took enforcement action against several businesses, including contractors. Complying with immigration laws, both State and Federal, can mean the difference between survival and failure of your company.
This workshop is 90 minutes you need to set aside to make sure that your business is in compliance with these important laws.
Click here to register for the Immigration Law Lunch and Learn.
2010 Legislative Report from HBASC
The annual South Carolina legislative session has ended. Julian Barton, Director of Government Affairs for the Home Builders Association of South Carolina, has provided this report on the results for Home Builders of the legislative session.
Fire Sprinkler Bill – Choice Prevails: One of most contentious issues of the year was a bill to stop the mandate by the SC Building Code Council that would have required the installation of residential fire sprinklers in all new homes built effective January 1, 2011. The impetus for the change in policy was the inclusion of the sprinkler mandate in the IRC 2009, which is pending implementation in 2011. The HBA was unsuccessful in getting the Building Codes Council to accept a state modification to delete the residential sprinkler mandate from the new code.
Despite a full frontal assault on the bill by the well-financed national fire sprinkler industry and their legions of high-priced lobbyist, common sense prevailed and the General Assembly overwhelmingly passed the fire sprinkler choice bill (H. 4663). The bill received an overwhelmingly affirmative vote in the SC Senate (38-0) and the SC House voted to concur with the Senate (100-1). The bill was signed by Governor Sanford on June 16. There was no appetite in the General Assembly for the state government mandating residential sprinklers. Interestingly, over 25 other states have now removed the sprinkler mandate requirement from their state building code.
Permit Extension – Time Out Granted: Due to the crisis in the real estate/finance sector of our state and national economy, real estate developers, including residential developers and commercial developers have experienced an industry-wide decline, including reduced demand, canceled or delayed orders, declining sales and rentals, price reductions, increased inventory, layoffs, and delayed construction plans. Many permits issued during the recession are now near expiration, or they have already expired.
A bill (H. 4445) to address the permit extension problem was introduced this past session by Rep. Dwight Loftis (Greenville) and Senator Ray Cleary (Myrtle Beach). The bill passed the General Assembly and was signed by Governor Sanford on May 19, 2010. The purpose of this bill is to prevent the wholesale abandonment of already-approved projects by tolling the term of these permits for a finite period of time as the economy improves.
The bill has two major provisions: First, it resurrects development and building permits by state and local government agencies that were valid on January 1, 2008, but have since expired. It allows the resurrected permits to remain valid through December 31, 2012. For example, if a development permit expired on December 31, 2009, it is now renewed on May 19 and is valid through December 31, 2012 (3 additional years).
Second, for permits that were still valid on May 19, 2010 (the effective date of the law), the law provides a “tolling period”, which stops the clock on the permit through December 31, 2012. For example, if a DHEC permit had three months left on it on May 19, the permit now remains valid through December 31, 2012, plus three months. The permit will now expire March 31, 2013. The additional time provided by the bill insures that the permit doesn’t expire and that a new permit does not have to be purchased.
Permits included in this “pause” period include land disturbance, storm water, coastal zone consistency certificates, water/waste water permits, 401 water quality certification, OCRM critical area permits, DHEC air quality, site specific development plans, building permits, etc.
In the case of building permits that have expired for one year or more during the applicable period, the local government must extend the building permit at no additional cost. However, the construction of the new building must comply with existing rules (building codes) and regulations at the time the building permit is reissued.
Permits excluded from this “pause” period, include a number of federal permits and administrative consent orders. The law allows a government entity to revoke or modify a development approval as permitted by law, and it has no effect on Certificate of Need or Demonstration of Need certificates issued by DHEC.
The bill will give the development industry a much needed time out, and at the same time provide an incentive to get development projects restarted, and get the South Carolina economy rolling again.
Tort Reform – Down to the Wire: The opportunity for substantive tort reform (H. 3489) was alive until the dying moments of the 2010 legislative session. With time running out, the SC Civil Justice Coalition (HBA is a member) offered the SC Trial Lawyers Association a tort reform proposal. Senators McConnell and Martin urged the trial lawyers to come to the table and compromise on this issue this year.
After several hours of negotiation a compromise was reached. The compromise included the House language on punitive damages, appeal bonds, and tightening of the construction statute of repose; the Senate language on PARSA (state hiring lawyers), disclosure of insurance limits in personal auto cases; and the Senate’s threshold on the admissibility of non-use of seat belts in accident cases. However, Senator Gerald Malloy (Darlington) found out about the pending compromise and nixed it. With literally only 30 minutes left on the clock before the end of the 2010 session, there was no time to overcome his pending filibuster.
The good news is that we made considerable head way in reaching a compromise with the trial lawyers. The bad news is that we didn’t have enough time to seal the deal. As a result, tort reform will be back on the front burner in the 2011 legislative session. This issue is too important to the economic recovery of our state to let a last minute distraction stop this important and much needed reform!
Point-of-Sale Bill – No Sale: A bill (H. 3272) that would have changed the point-of-sale property tax assessment for existing real estate stalled in the General Assembly this year.
Real estate agents have complained that the immediate property tax reassessments from assessed value to point-of-sale price had caused “sticker shock” with real estate buyers. The actual sale/improvement price has often been far higher than the most recent property tax assessment on the books. This creates huge inequities and disincentives to buy new or remodeled real estate properties.
The roots of the point-of-sale controversy are found in the passage by the General Assembly of Act 388 – 2007 Property Tax Reform. Not only did the law shift property taxes from the faster appreciating to the slower appreciating real estate, it set in motion a growing inequity situation over time. The problem is that by exempting out additional property classifications, it shifts the tax burden further and makes the inequity of taxes increase.
The issue of property tax reform is an extremely complicated and politically charged issue, with no simple political solution. We would anticipate that this issue will resurface next session. The resolution of the point-of-sale issue is critical to keeping the rebound in the real estate industry on track!
DHEC Reorganization – Not This Year: The Senate Medical Affairs Committee took up a bill (S. 384) introduced to make DHEC a cabinet agency reportable to the Governor and to divide the DHEC board into two boards – a Board of Health and a Board of Environmental Control. However, several Senators raised concern over the magnitude of the change and the short amount of the time spent on exploring the ramifications of the bill. As a result, the bill died in committee.
DHEC is the fifth largest state agency in South Carolina, which is run by a full-time commissioner with an appointed (by the Governor) part-time board like most other state agencies. Given the magnitude of its mission, the limited resources it is given, and the regulations it is given by the General Assembly and the EPA, DHEC has done an admirable job. It never has and never will please everyone – it is a regulatory agency!
Home builders and the business community have had their share of issues with DHEC over the years. The debate has been about the interpretation of various regulations many of which came down from the federal level. However, the regulated community has never dealt with a DHEC regulatory agency that is on a mission with its own private agenda!
Fortunately, this bill died in the Senate Committee. Passage of this bill would have set back the economic development of our state for years. Promoting economic development in SC would no longer have been part of the DHEC agenda.
Private Transfer Fees – Prohibition Dies: Rep. Alan Clemmons’ bill (H. 4808) that would prohibit private third party transfer fees failed to pass this session. The bill contains an exemption for any transfer fees self-imposed by homeowner associations. The prohibition was only for “third party” transfer fees. Nine other states have already passed similar legislation banning third party transfer fees.
In recent months, developers around the county have been offered a creative financing program using transfer fees. Under this option, the developer takes third party money to help finance the development in return for paying the “loan” back through the use of transfer fees. A common option is to require a 1% transfer fee at closing every time a house in the subdivision is sold for up to 99 years. The transfer fee is then given to the third party/agent to pay back the up-front money. The more times the house is sold and the more the house appreciates, the larger the return for the third party. Some Wall Street investment brokers have started bundling these “transfer fee” properties and selling them to other investors.
Opponents of third party transfer fees are concerned about a proliferation of transfer fees, the undermining of the argument against government transfer fees, and the obstacle to real estate sales that is created. Proponents argue that these transfer fees can lower the initial cost of the home, make them competitive with non-transfer fee developments, provide another option for raising capital in a tight credit market, and help jumpstart new and delayed developments.
Water Withdrawal Bill – Finally Approved: After nearly four years of haggling over several bills to require water withdrawal permits from South Carolina’s streams and rivers, the General Assembly finally passed a water permit bill (S. 452). The bill requires new or expanding industries and utilities to get state permits for withdrawing water from South Carolina’s rivers.
New industrial and utility users would need state permits before they could take water from state rivers. A good example of a new user could be the proposed Duke Energy nuclear plant in Gaffney that would withdraw and return to the river more than 30 million gallons a day from the Broad River. The term of permit for a new user is 20 to 40 years and the term of permit for existing users is 30 to 40 years. Existing industries would be grandfathered in.
Bill supporters say a state permitting law is important in negotiations with other states over water rights to rivers that run through multiple states. South Carolina is one of only a few eastern states that do not permit water withdrawals. It was just a matter of time before a state water permitting program was initiated – now is a good time for it!
Home Builder Licensing Bill Dies: A bill (H. 3492) was introduced last year by Rep. Ken Kennedy to raise the costs of home repair/construction projects that an individual can do without being a licensed home builder. Currently projects below $5,000 are exempt. Under the bill this limit would have been increased to $15,000. The bill would have allowed more unlicensed builders to operate in the state, as if we didn’t already have enough problems with unlicensed, unregulated, and too often, untrained, “handyman” builders.
After a long and tumultuous journey through the legislative process, the bill died in the final days of the legislative session. The tenacity of Rep. Kennedy in trying to pass the bill has to be acknowledged. He was on a one-man mission to pass this bill. However, Rep. Kennedy has since announced his retirement from the SC House of Representatives.
Economic Development Bill – Step Forward: The General Assembly approved and the Governor signed into law (H. 4478), the "South Carolina Economic Development Competitiveness Act of 2010". The legislation implements numerous private sector recommendations for fostering an economic development climate in the state to attract global business and industry investment. It provides a variety of tax credit, fee-in-lieu options, and flexibility in funding for certain state agencies to encourage economic development in South Carolina and to keep our state competitive with other states in the southeast.
Affordable Housing Tax Credit Passes: A bill was passed this session (S. 728) that would expand the ability to use affordable housing tax credits in retrofitting old textile mills with residential units. The bill was signed by the Governor on May 28th. The bill will provide another option for communities to expand their affordable housing inventory.
Septic Tank Permit Bill Fails: A bill (H. 4500) was introduced this session that would require that before a parcel of land that had an onsite wastewater treatment system (septic tank) located on it could be sold that it would have to have a certified inspector inspect the septic system. The idea was to get a septic tank letter, like you get a termite letter before you close on a home. Unfortunately, the two inspections are like apples and oranges. A septic tank system is harder to evaluate, requires land disturbance, and there are already real estate laws that require disclosure by the seller, if they have inoperable waste disposal systems. The bill failed to make it out of the House Committee.
HBA Members – Special Thanks: To have a successful legislative year like the HBA had in 2010 it takes a real team effort. A very special thanks goes out to the individual HBA members who participated in the legislative process by contacting their legislators, attending statehouse rallies, and responding to the HBA “Call to Action” requests. Without your willingness to get involved, we could not have attained the level of success we did at the statehouse. You made a difference!
Thanks to your efforts we are now in the process of getting the residential home building industry back on the road to prosperity.
Fire Sprinkler Bill – Choice Prevails: One of most contentious issues of the year was a bill to stop the mandate by the SC Building Code Council that would have required the installation of residential fire sprinklers in all new homes built effective January 1, 2011. The impetus for the change in policy was the inclusion of the sprinkler mandate in the IRC 2009, which is pending implementation in 2011. The HBA was unsuccessful in getting the Building Codes Council to accept a state modification to delete the residential sprinkler mandate from the new code.
Despite a full frontal assault on the bill by the well-financed national fire sprinkler industry and their legions of high-priced lobbyist, common sense prevailed and the General Assembly overwhelmingly passed the fire sprinkler choice bill (H. 4663). The bill received an overwhelmingly affirmative vote in the SC Senate (38-0) and the SC House voted to concur with the Senate (100-1). The bill was signed by Governor Sanford on June 16. There was no appetite in the General Assembly for the state government mandating residential sprinklers. Interestingly, over 25 other states have now removed the sprinkler mandate requirement from their state building code.
Permit Extension – Time Out Granted: Due to the crisis in the real estate/finance sector of our state and national economy, real estate developers, including residential developers and commercial developers have experienced an industry-wide decline, including reduced demand, canceled or delayed orders, declining sales and rentals, price reductions, increased inventory, layoffs, and delayed construction plans. Many permits issued during the recession are now near expiration, or they have already expired.
A bill (H. 4445) to address the permit extension problem was introduced this past session by Rep. Dwight Loftis (Greenville) and Senator Ray Cleary (Myrtle Beach). The bill passed the General Assembly and was signed by Governor Sanford on May 19, 2010. The purpose of this bill is to prevent the wholesale abandonment of already-approved projects by tolling the term of these permits for a finite period of time as the economy improves.
The bill has two major provisions: First, it resurrects development and building permits by state and local government agencies that were valid on January 1, 2008, but have since expired. It allows the resurrected permits to remain valid through December 31, 2012. For example, if a development permit expired on December 31, 2009, it is now renewed on May 19 and is valid through December 31, 2012 (3 additional years).
Second, for permits that were still valid on May 19, 2010 (the effective date of the law), the law provides a “tolling period”, which stops the clock on the permit through December 31, 2012. For example, if a DHEC permit had three months left on it on May 19, the permit now remains valid through December 31, 2012, plus three months. The permit will now expire March 31, 2013. The additional time provided by the bill insures that the permit doesn’t expire and that a new permit does not have to be purchased.
Permits included in this “pause” period include land disturbance, storm water, coastal zone consistency certificates, water/waste water permits, 401 water quality certification, OCRM critical area permits, DHEC air quality, site specific development plans, building permits, etc.
In the case of building permits that have expired for one year or more during the applicable period, the local government must extend the building permit at no additional cost. However, the construction of the new building must comply with existing rules (building codes) and regulations at the time the building permit is reissued.
Permits excluded from this “pause” period, include a number of federal permits and administrative consent orders. The law allows a government entity to revoke or modify a development approval as permitted by law, and it has no effect on Certificate of Need or Demonstration of Need certificates issued by DHEC.
The bill will give the development industry a much needed time out, and at the same time provide an incentive to get development projects restarted, and get the South Carolina economy rolling again.
Tort Reform – Down to the Wire: The opportunity for substantive tort reform (H. 3489) was alive until the dying moments of the 2010 legislative session. With time running out, the SC Civil Justice Coalition (HBA is a member) offered the SC Trial Lawyers Association a tort reform proposal. Senators McConnell and Martin urged the trial lawyers to come to the table and compromise on this issue this year.
After several hours of negotiation a compromise was reached. The compromise included the House language on punitive damages, appeal bonds, and tightening of the construction statute of repose; the Senate language on PARSA (state hiring lawyers), disclosure of insurance limits in personal auto cases; and the Senate’s threshold on the admissibility of non-use of seat belts in accident cases. However, Senator Gerald Malloy (Darlington) found out about the pending compromise and nixed it. With literally only 30 minutes left on the clock before the end of the 2010 session, there was no time to overcome his pending filibuster.
The good news is that we made considerable head way in reaching a compromise with the trial lawyers. The bad news is that we didn’t have enough time to seal the deal. As a result, tort reform will be back on the front burner in the 2011 legislative session. This issue is too important to the economic recovery of our state to let a last minute distraction stop this important and much needed reform!
Point-of-Sale Bill – No Sale: A bill (H. 3272) that would have changed the point-of-sale property tax assessment for existing real estate stalled in the General Assembly this year.
Real estate agents have complained that the immediate property tax reassessments from assessed value to point-of-sale price had caused “sticker shock” with real estate buyers. The actual sale/improvement price has often been far higher than the most recent property tax assessment on the books. This creates huge inequities and disincentives to buy new or remodeled real estate properties.
The roots of the point-of-sale controversy are found in the passage by the General Assembly of Act 388 – 2007 Property Tax Reform. Not only did the law shift property taxes from the faster appreciating to the slower appreciating real estate, it set in motion a growing inequity situation over time. The problem is that by exempting out additional property classifications, it shifts the tax burden further and makes the inequity of taxes increase.
The issue of property tax reform is an extremely complicated and politically charged issue, with no simple political solution. We would anticipate that this issue will resurface next session. The resolution of the point-of-sale issue is critical to keeping the rebound in the real estate industry on track!
DHEC Reorganization – Not This Year: The Senate Medical Affairs Committee took up a bill (S. 384) introduced to make DHEC a cabinet agency reportable to the Governor and to divide the DHEC board into two boards – a Board of Health and a Board of Environmental Control. However, several Senators raised concern over the magnitude of the change and the short amount of the time spent on exploring the ramifications of the bill. As a result, the bill died in committee.
DHEC is the fifth largest state agency in South Carolina, which is run by a full-time commissioner with an appointed (by the Governor) part-time board like most other state agencies. Given the magnitude of its mission, the limited resources it is given, and the regulations it is given by the General Assembly and the EPA, DHEC has done an admirable job. It never has and never will please everyone – it is a regulatory agency!
Home builders and the business community have had their share of issues with DHEC over the years. The debate has been about the interpretation of various regulations many of which came down from the federal level. However, the regulated community has never dealt with a DHEC regulatory agency that is on a mission with its own private agenda!
Fortunately, this bill died in the Senate Committee. Passage of this bill would have set back the economic development of our state for years. Promoting economic development in SC would no longer have been part of the DHEC agenda.
Private Transfer Fees – Prohibition Dies: Rep. Alan Clemmons’ bill (H. 4808) that would prohibit private third party transfer fees failed to pass this session. The bill contains an exemption for any transfer fees self-imposed by homeowner associations. The prohibition was only for “third party” transfer fees. Nine other states have already passed similar legislation banning third party transfer fees.
In recent months, developers around the county have been offered a creative financing program using transfer fees. Under this option, the developer takes third party money to help finance the development in return for paying the “loan” back through the use of transfer fees. A common option is to require a 1% transfer fee at closing every time a house in the subdivision is sold for up to 99 years. The transfer fee is then given to the third party/agent to pay back the up-front money. The more times the house is sold and the more the house appreciates, the larger the return for the third party. Some Wall Street investment brokers have started bundling these “transfer fee” properties and selling them to other investors.
Opponents of third party transfer fees are concerned about a proliferation of transfer fees, the undermining of the argument against government transfer fees, and the obstacle to real estate sales that is created. Proponents argue that these transfer fees can lower the initial cost of the home, make them competitive with non-transfer fee developments, provide another option for raising capital in a tight credit market, and help jumpstart new and delayed developments.
Water Withdrawal Bill – Finally Approved: After nearly four years of haggling over several bills to require water withdrawal permits from South Carolina’s streams and rivers, the General Assembly finally passed a water permit bill (S. 452). The bill requires new or expanding industries and utilities to get state permits for withdrawing water from South Carolina’s rivers.
New industrial and utility users would need state permits before they could take water from state rivers. A good example of a new user could be the proposed Duke Energy nuclear plant in Gaffney that would withdraw and return to the river more than 30 million gallons a day from the Broad River. The term of permit for a new user is 20 to 40 years and the term of permit for existing users is 30 to 40 years. Existing industries would be grandfathered in.
Bill supporters say a state permitting law is important in negotiations with other states over water rights to rivers that run through multiple states. South Carolina is one of only a few eastern states that do not permit water withdrawals. It was just a matter of time before a state water permitting program was initiated – now is a good time for it!
Home Builder Licensing Bill Dies: A bill (H. 3492) was introduced last year by Rep. Ken Kennedy to raise the costs of home repair/construction projects that an individual can do without being a licensed home builder. Currently projects below $5,000 are exempt. Under the bill this limit would have been increased to $15,000. The bill would have allowed more unlicensed builders to operate in the state, as if we didn’t already have enough problems with unlicensed, unregulated, and too often, untrained, “handyman” builders.
After a long and tumultuous journey through the legislative process, the bill died in the final days of the legislative session. The tenacity of Rep. Kennedy in trying to pass the bill has to be acknowledged. He was on a one-man mission to pass this bill. However, Rep. Kennedy has since announced his retirement from the SC House of Representatives.
Economic Development Bill – Step Forward: The General Assembly approved and the Governor signed into law (H. 4478), the "South Carolina Economic Development Competitiveness Act of 2010". The legislation implements numerous private sector recommendations for fostering an economic development climate in the state to attract global business and industry investment. It provides a variety of tax credit, fee-in-lieu options, and flexibility in funding for certain state agencies to encourage economic development in South Carolina and to keep our state competitive with other states in the southeast.
Affordable Housing Tax Credit Passes: A bill was passed this session (S. 728) that would expand the ability to use affordable housing tax credits in retrofitting old textile mills with residential units. The bill was signed by the Governor on May 28th. The bill will provide another option for communities to expand their affordable housing inventory.
Septic Tank Permit Bill Fails: A bill (H. 4500) was introduced this session that would require that before a parcel of land that had an onsite wastewater treatment system (septic tank) located on it could be sold that it would have to have a certified inspector inspect the septic system. The idea was to get a septic tank letter, like you get a termite letter before you close on a home. Unfortunately, the two inspections are like apples and oranges. A septic tank system is harder to evaluate, requires land disturbance, and there are already real estate laws that require disclosure by the seller, if they have inoperable waste disposal systems. The bill failed to make it out of the House Committee.
HBA Members – Special Thanks: To have a successful legislative year like the HBA had in 2010 it takes a real team effort. A very special thanks goes out to the individual HBA members who participated in the legislative process by contacting their legislators, attending statehouse rallies, and responding to the HBA “Call to Action” requests. Without your willingness to get involved, we could not have attained the level of success we did at the statehouse. You made a difference!
Thanks to your efforts we are now in the process of getting the residential home building industry back on the road to prosperity.
Monday, June 21, 2010
EPA delays enforcement of training and registration in Lead Paint Rule
Last Friday, NAHB scored a clear victory when EPA announced that it would delay enforcement of the worker training and firm certification requirements for the Lead-Based Paint (LBP) rule. Although the rule became effective April 22, this new directive effectively gives remodelers until Oct. 1, 2010 to file for firm certification, until Sept. 30 for workers to register and Dec. 31 for workers to take the required training course. However, they will still be required to use lead-safe work practices during this time. As you recall, NAHB has been urging EPA to delay the rule for a number of reasons, including the lack of training providers and training opportunities.
EPA’s action is in direct response to NAHB’s continued involvement in the LBP rule, NAHB’s petition to delay the rule, NAHB’s work with the HBA of Tennessee to provide relief in areas damaged by the recent flooding, NAHB’s strong support of Senator Collin’s amendment to the Supplemental Appropriations Act that would delay the rule’s effective date, and NAHB’s efforts to educate the Members of Congress on the rule and its ramifications. Indeed, EPA’s memo acknowledges that the delay was necessary because of concerns raised by the regulated community. Now that EPA has heard and acted on our concerns, it is incumbent on NAHB to continue to provide support to remodelers to increase their awareness of the rule and inform them of the opportunities to get the necessary training and certification.
It is very rare that we are able to claim clear victories in the regulatory arena, yet EPA’s delay of enforcement of the LBP rule is exactly that. Unfortunately, there are still a number of uphill battles ahead in the LBP arena related to clearance testing and removal of the “opt-out” provision – battles that staff and the members will continue to fight.
EPA’s action is in direct response to NAHB’s continued involvement in the LBP rule, NAHB’s petition to delay the rule, NAHB’s work with the HBA of Tennessee to provide relief in areas damaged by the recent flooding, NAHB’s strong support of Senator Collin’s amendment to the Supplemental Appropriations Act that would delay the rule’s effective date, and NAHB’s efforts to educate the Members of Congress on the rule and its ramifications. Indeed, EPA’s memo acknowledges that the delay was necessary because of concerns raised by the regulated community. Now that EPA has heard and acted on our concerns, it is incumbent on NAHB to continue to provide support to remodelers to increase their awareness of the rule and inform them of the opportunities to get the necessary training and certification.
It is very rare that we are able to claim clear victories in the regulatory arena, yet EPA’s delay of enforcement of the LBP rule is exactly that. Unfortunately, there are still a number of uphill battles ahead in the LBP arena related to clearance testing and removal of the “opt-out” provision – battles that staff and the members will continue to fight.
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