By: Amy Madert
The Home Builder Registration bill, sponsored by Senator John Astle, will raise fees on a state level, also having a local impact.
The bill would increase specified fees that are related to home builders and home builder sales representative fees that go toward supporting the Home Builder Guaranty Fund.
The Consumer Protection Division established the Home Builder Guaranty Fund, to compensate consumers for the cost of repairs and protect them from inadequate home building, Astle said.
“The registration renewal fees haven’t been enough to support the cost of the units, which result in the fund not living up to what it’s set in place to do,” Astle said. “The bill will close that deficit problem with the increase in fees.”
During the first Senate hearing the only concern brought up was that the cost of the fees was too high, and that there was worry that there would be leftover money not needed in the fund.
Denise Jacoby, the executive officer at the Frederick County Building Industry Association (FCBIA), said it wasn’t that the fees were necessarily increasing by that much, but in certain markets, a small increase is a lot.
“The fee increase doesn’t have the same impact for someone building in Chevy Chase that it has for someone building in Emmitsburg,” Jacoby said. “We focus on affordable housing and one fee increase can lead to another and it all becomes expensive.”
The bill is scheduled to go into effect Oct. 1, 2016.
According to the fiscal and policy note, the special fund revenues for the Home Builder Registration fund will increase by $142,350 in the 2017 fiscal year. Annually, the special funds revenues are predicted to increase by $189,800.
The fees will increase differently depending on the number of homes a person or company is building.
Jacoby said that in the amendments, they proposed a change to the number of homes that were associated with each fee, in order to protect the smaller builders and keep the local level impact in mind.
The fee for 10 or fewer homes was not changed. It will see a $100 increase, from $300 to $400.
The original number of homes, 11 to 24 , was changed to 11 to 74 new homes, and will see a $200 increase from a $600 fee to an $800 fee.
For 25 or more new homes, the number increased to 75 or more new homes, and the feel will be $1,200.
The amendments were adopted.
“During negotiations every body gives a little and takes a little,” Jacoby said. “You have to pick your battles and we feel that compromise has been made.”
The fiscal and policy note also states that the bill does not affect local government finances or operations, and the small business effect is predicted to be minimal.
“The bill passed the third read in the senate as of last week,” Jacoby said. “I look for this to pass next week when we get back together.”