Making Sure the Industry’s Voice is Heard
Our Government Affairs program keeps current on issues affecting all members. It aims to advocate for the industry position on issues and maintain involvement in a proactive way.
Areas of Focus
Lobbyists at the local, state, and national levels are working every day to promote your business interests on industry-related issues, such as:
- Municipal Abuse
- Code Compliance
- Stormwater Management
- Regulatory Reform
- Business Taxes
- Federal & State Agencies
- NPDES Permitting
Find Your Legislator
From time to time, the Building Industry Association of Lancaster will ask our members to reach out to our State Legislative Delegation. For those instances, we have provided a link to help you determine which Legislator’s district you are in.
2021 Legislative Wins
SB 208 – now Act 97 of 2021:
On December 22, 2021, Governor Wolf signed PBA priority bill Senate Bill 208. Act 97 amends the Municipalities Planning Code to clarify Section 509 regarding final plat approval and the retention of posted financial security for improvements.
While the law’s intent was to ensure developers have sufficient funds to complete all required property improvements, the prior language was misinterpreted to withhold excess funds that greatly restricted a builder’s ability to get bonded for other on-going projects.
Instead of only retaining a bond of 110% of the value of remaining improvements, some municipalities have interpreted the law to retain 10% of the entire original project amount in addition to the cost of remaining improvements. Act 97 of 2021 clarifies that municipalities may only retain 110% of the value for the remaining improvements.
-Gov. Tom Wolf recently signed Senate Bill 1030 into law, expanding the use of alternate on-lot sewage systems for planning purposes.
-The PA Sewage Facilities Act, renamed Act 34 of 2020, streamlines the process innovative, effective, and better treatment technologies are used and made available to Pennsylvania residents and businesses. Alternate systems are being used in other states and are academically tested according to 25 PA Code Section 73.71.
-Sen. Gene Yaw (R-Bradford County), the bill’s main sponsor, says “Allowing for alternate on-lot systems in the planning process would widen the area to which development can take place and save valuable acreage that could otherwise be used for agriculture or other purposes. Undoubtedly, it will improve water quality in streams and rivers by using systems that have a proven performance record, and, in many cases, are superior to some conventional systems.” The bill was endorsed by PA Septage Management Association, PA Association of Sewage Enforcement Officers, PA Association of Professional Soil Scientists, PA State Association of Township Supervisors, Pennsylvania Society of Land Surveyors, Pennsylvania Association of Realtors, the Pennsylvania Builders Association, and the PA Grange.The law takes effect in August.
Builders and Developers Win Huge Legislative Victory for Affordable Housing
On July 2nd, Pennsylvania Governor Tom Wolf signed House Bill 751 (Act 53 of 2019) reforming the way private water and sewer utilities’ income tax liability is calculated. The tax change specifically relates to a federal tax provision affecting private water and sewer utilities when they extend service to a new area. With more than 3,800 member companies, Pennsylvania Builders Association Members annually. Invest millions of dollars in water and wastewater infrastructure that is donated to private water/sewer companies after development is complete. Act 53 becomes effective August 31, 2019.
Investor-owned water companies previously enjoyed a federal tax exemption for such infrastructure known as contributions In aid of construction (CIAC), but a little-advertised change in the Federal Tax Cut and Jobs Act (TOA) eliminated this exemption in 2018. Prior to the passage of Act 53 this tax Impacted developers, Increasing the cost of every new home by thousands of dollars.
PA Builders Association Fixes Federal Tax Issue in Extraordinary Four Month State Legislative Win
In 2018, PBA engaged in litigation before the Pennsylvania Public Utility Commission (PUC) to change private water company tariffs to mitigate the effect of the TOA. When the PUC ruled against PBA’s interests in a tariff rate change case, along a party line vote in February of 2019, attention immediately turned to Pennsylvania’s General Assembly to change the underlying Pennsylvania law relating to taxable contributions.
The “no gross up” method (also called the “utility finance” or “socialization” method) adopted In Act 53 requires the utility to pay the tax and then adds that amount to the utility’s rate base for all customers. Essentially, the utility finances the payment of the tax expense and the utility gets reimbursed from rates over the life of the depreciating CIAC asset. Eliminating the requirement that developers fund the utilities tax obligation up front.
Act 53 of 2019 provides significant savings for developers, homebuilders, and homebuyers. Pennsylvania Home Builders and Developers are the only advocates that consumers can trust to safeguard the integrity of affordable housing.
Effective January 1, 2018 the TCJA required that water companies include advances for construction and Contributions in Aid of Construction in taxable income. Private water companies in turn passed the tax burden on to developers thereby making their cost to install water and wastewater Infrastructure even higher.
Additionally, because Pennsylvania Corporate Net Income Tax is based on federal taxable income, CAC and CIAC are also state taxable income to water and wastewater utilities. Pennsylvania Developers were required to furnish either a cashier’s check or letter of credit In the amount of 40% of the total project cost (including engineering and inspections fees) to reflect the gross-up for the private water/sewer companies state and federal tax liability on the contributed property.
Uniform Condominium Act, the Uniform Planned Community Act, and the Real Estate Cooperative Act
House Bill 1499 (Rep. M. Keller R- Perry): HB 1499, Act 84 of 2018, approved 10/19/18, amends portions of Title 68 (Real and Personal Property, within the Uniform Condominium Act, the Uniform Planned Community Act, and the Real Estate Cooperative Act to:
- Clarify in stature the right of a board to suspend a units owner’s access to common elements, voting rights and the right to serve on the board if they are delinquent in assessments for violations of the governing documents of the community;
- Ensure that the existing requirement of declarant turnover of control to a board is satisfied without any undue delay or prejudice to the interests of the unit owners;
- Clarify that the procedures and voting requirements relating to the conveyance or encumbrance of common elements also apply in the case of tax sale or involuntary transfer, and that the interest in the common elements subject to the declaration prior to a conveyance or encumbrance are still subject to the declaration following the conveyance or encumbrance;
- Establish that a declarant’s obligation to release the real estate from liens before the conveyance the real estate to the association includes unpaid real estate taxes on that real estate; and
- Establish that an association’s right to pursue action under a declarant warranty against structural defects only begins at the time of termination of the declarant’s control.
HB 1499 also amends Title 68 (Real and Personal Property) regarding only planned communities to:
- Expand the definition of “common facilities” to include tenants frequently used in community governing documents such as “common area” or “open space”;
- Clarify that provisions in the Uniform Planned Community Act relating to the contents of a recorded declaration and the declarant’s special rights are in effect and enforceable even if not expressly stated in the community documents; and
- Clarify that the declarant’s right to designate portions of a planned community as a “common facility” must be disclosed within the declaration of the community.
Prior to Act 84, Title 68 set up a framework from which a condominium, planned community or cooperative may organize and create governing documents. Title 68 outlines requirements for the creation, alteration and management of these types of communities.
House Bill 1499 was amended with two PBA Amendments:
- First, to clarify that the stature of limitations will not begin (for commonly held elements only) until the commonly held property is transferred to the board elected by the unit owners. The original language allowed for the statute of limitations on warranty provisions for commonly held property to delay the start of the six year limitation period for as long as seven years until the board elected by the owners take over; and
- Second, codifies the “Notice of Termination” instructions into statute eliminating the confusion between the current regulation requirement for a “signature” and the NOT instructions stating notice in the Declaration fulfills the obligation when closing out an NPDES permit.
The BIA is working tirelessly to provide you with the best possible environment in which to do business!
2016 and Prior
House Bill 409 (Sponsored by Rep. Eli Evankovich (R-Westmorland)), amends the Uniform Construction Code Act (RAC Fix it.) Bill fixes the underlying problems with the Department’s interpretation of Act 1 of 2011, which required the RAC to only review the “latest triennial revisions” of the new ICC Model Codes – This change is absolutely necessary to allow the RAC to review and adopt ICC Model Code provisions in the future. Companion Senate Bill 269 pending.
- Fixes the underlying problems with the PA UCC Act which required the RAC to only review the “latest triennial revisions” of the new codes – This change is absolutely necessary to allow the RAC to review and adopt ICC Model Code provisions in the future
- Allows for modifications of code provisions – Pennsylvania should not be required to simple adopt or reject code provisions. Allowing for modifications will enable the RAC to make sensible decisions on code updates while taking Pennsylvania’s unique circumstances into consideration. The ability to modify provisions will move Pennsylvania away from a “take it or leave it” approach to code adoption;
- Requires a 120-day public comment period on code provisions and gives the RAC two years to study and review new model codes prior to adoption. This change ensures the regulated community will be able to have significant input on new code adoptions; and
- Creates a Pennsylvania Specific UCC Book – Builders must stay up-to-date on all adopted code sections in Pennsylvania. Currently, achieving this compliance requires industry professionals to purchase and reference numerous different code books. Providing for the purchase of one single set of Pennsylvania-specific code books, and making all codes publicly available online, is a necessary step toward helping builders, contractors and consumers achieve building code compliance in a practical manner.
Senate Resolution 385
Directs the Joint State Government Commission to conduct a study to analyze and identify which environmental laws and regulations of this Commonwealth have more stringent standards than Federal law requires. Adopted 10/18/16 (27-21) – Report is due to the Senate in 18-months.
Senate Bill 1282 (Act 162 of 2016) Clarifies the manner in which a county Recorders of Deeds Office may charge fees for the recording of amendments to declarations of condominiums, cooperatives and planned communities. Counties throughout the state have been charging separate indexing fees for each lot when amendments to a community association governing documents are recorded. Many of our builders see fees totaling thousands of dollars of additional costs. This makes the passage of simple, but necessary, changes to governing documents cost-prohibitive for many planned communities. This legislation will prohibit per lot indexing fees, bringing fees to a reasonable and affordable level.
House Bill 1437 (Act 133 of 2016) Creates “Temporary Access” certificates that will allow a sale of property to move forward, but require that substantial code violations be corrected prior to the new owner inhabiting the property. It will also require that all other code violations be corrected within a certain time frame, with financial and other penalties left in place for failure to comply.
Act 31 – Permit Extension Clarification – Amended the Development Permit Extension Act to specifically included condominium and planned community Declarations within the tolling provisions. In addition, provisions suspending the expiration dates of certain approvals obtained by developers and property owners have been clarified as to how the period of suspension will be calculated when the extension period terminated.
Act 59 – Union Intimidation Act – Successfully closed loop holes in Pennsylvania’s criminal code to declare harassment, stalking, and deadly threats to be prohibited activities when perpetrated by a party engaged in a labor dispute. Act 59 ensures that Pennsylvania workers are safer and more secure at the workplace and in their communities.
Act 37 & Act 38 – Clarifies that that the creation of planned communities and condominium associations out of existing land or facilities will not require municipal approval unless and until new structures or buildings are constructed within the association or community.
Act 42 – Amended the Municipalities Planning Code to allow municipalities to appoint up to three residents of the municipality as alternate members of the municipality’s planning commission.
PA House Bill 635—Providing the RAC with flexibility to make appropriate decisions regarding PA Building Codes
Federal, House Bill 1732, the Regulatory Integrity Protection Act and Senate Bill, 1140, the Federal Water Quality Protection Act, preventing the EPA and U.S. Army Corps of Engineers from implementing a proposed expansion of the Clean Water Act that could result in millions of acres of private property to be regulated as wetlands.
We will continue to work with key members of the local, state and national government to promote our industry’s issues so that the quality housing and renovation construction we perform can continue to benefit our county.
Make a Contribution
We sincerely hope you will make a contribution to the BIA PAC and help to protect our industry’s interest, now and for the future. We invite you to become a BIA PAC Club Member by contributing; your contribution will serve the industry that serves you.