MARYLAND MD
The following topics are priority issues for MBIA as we start the 2018 Maryland Legislative Session.

Accounting for New Growth and Maryland's Watershed Implementation Plan
As Maryland prepares for phase 111 of the Watershed Implementation Plan, our actions must include science based methods and must be analyzed for cost effectiveness, prioritized and implemented as revenues are available. An offset policy must accurately deter mine net impacts and provide cost effective opportunities to offset those new loads.

Forest Conservation
The Forest Conservation Act should be used as one of many too ls to maintain Maryland's 40% forest canopy coverage.
Currently, Maryland's coverage exceeds the 40% threshold. This is a result of enforcement of the existing FCA and other policies throughout the state.  This provides evidence that Maryland's tree canopy policies are working as intended and do not need to change at this time.

Light Frame Combustible Construction
Wood framing is a cost effective, safe and environmentally sustainable material that is recognized as such by the  International Construction Code, International Residential Code, the National Fire Prevention Code and the International Green Code. There is no scientific or life safety reason to make housing less affordable by forcing the industry to use concrete and steel framing on all structures more than three stories high.

Business Climate
Maryland must look for opportunities to assist businesses in navigating regulatory compliance and coordinating the complicated development approval process.

Drainage Defects
The definition of "Drainage Defects" fails to understand the complexity of stormwater management. Environmental Site Design and Storm Water Management are complex and proven methods to help the environment. Prior to building a home the developer, builders and engineer s go through a complex process to ensure that all regulations are followed.

Adequate Public Facilities Ordinances
APFOs have emerged as a popular planning technique however local jurisdictions' attempts to reduce A PF capacities artificially constrain development and negatively impacts jobs growth and economic development.

Inclusionary Zoning
While the policy offers a solution for the growing need f or affordable housing across the state, we must ensure there are appropriate offsets and incentives to compensate f or the economic impact to builders and developers.
   ANNE ARUNDELaa
Charter Amendments
Councilman Trumbauer's Resolution 48-17 passed creating an amendment to the County Charter requiring certain late filed amendments to the comprehensive zoning ordinance publicly post the property to be re-zoned. This resolution will now be on the 2018 ballot for the citizens of Anne Arundel County to vote on since it is an amendment to the County Charter. The MBIA testified in opposition to this resolution.
 
APF Threshold
Councilman Grasso has introduced, for the third time, legislation lowering the APF school capacity threshold to 95 percent. This bill, Council Bill 92-17, would shut down development in roughly 75 percent of the County. One positive amendment has been added that will "sunset" or terminate this bill at the first of either the adoption of a new General Development Plan or January 1, 2020. The MBIA remains opposed to this legislation, which is likely to pass in mid to late January.
   BALTIMORE CITYcity
Affordable Housing Taskforce
On December 7th, the City Council adopted a resolution to create a new task force to study affordable housing in Baltimore City. The task force is expected to be named shortly and will contain multiple development industry professionals representing MBIA.
 
Tax Increases
Councilman Bill Henry introduced legislation to raise the transfer tax from 1.5 percent to 1.75 percent of the taxable base and the recordation tax from $5 to $6 of every $500 of consideration paid to fund affordable housing. The MBIA is opposed to creating a new tax burden on investment and home ownership although the Councilman's goal is laudable. No hearing is set on this legislation at this time.
 
TIF Possibility
Councilman Henry also introduced a resolution requiring the Finance Department, Housing and Community Development Department and Baltimore Development Corporation (BDC) to study how to create "community tax increment financing (TIF)" districts with the goal of spurring economic development in the City's less invested communities. MBIA is generally supportive of using creative economic development and financing tools to spur growth and create market rate and affordable housing opportunities. No hearing on this resolution has been scheduled at this time.
 CHARLES COUNTYcharles
Meeting and Production Schedules for the Board of Appeals for 2018
The Department of Planning Growth and Management has established new Meeting and Production schedules for 2018 Board of Appeals. PGM's purpose for establishing the schedules are as follows:
  • To ensure the complete projects can be processed for these boards members to review in a timely manner
  • To allow applicants to plan ahead in anticipation of completion dates of their projects.
  • To allow the county staff and board members to receive information and review projects in a uniform manner.
  • To eliminate changes after project information has been distributed to the board and disseminated to the public.
  • To comply with requirements for public notification and ensure the public has access to complete and accurate project information.
   HOWARD COUNTYhoward
APFO
Council Bill 1, a bill regarding the County's Adequate Public Facilities Ordinance (APFO), was formally introduced on January 2nd and will have a public hearing January 16th. This bill is identical to the bill the Council attempted but failed to pass in November when time elapsed before the bill could be voted upon. It creates a development moratorium in the County and is opposed by MBIA.

Green Neighborhoods
Council Resolution 112, to make the Green Neighborhoods program more flexible so that developers can take advantage of the green allocations that exist has been tabled for further consideration by the County Council in September. The County Council heard this resolution, which the MBIA supports on July 17th.
   MONTGOMERY COUNTYmontcoun
County Council's New Leadership
On December 5th, the Montgomery County Council unanimously elected Hans Riemer as president and Nancy Navarro as vice president of the Council. They will serve one-year terms as officers of the Council.  Council President Riemer, who begins his 8th year on the Council, previously served as Council vice president in 2017. Council President Riemer has focused on placing walkability, public transportation and sustainability at the center of planning goals. Councilmember Navarro was unanimously elected to serve as the vice president of the Council for the second time during her tenure on the Council.
 
Council President Riemer Testified Before U.S. House Subcommittee about Importance of Workplace Leave Laws
On Wednesday, December 6th, Council President Riemer testified before the United States House of Representatives' Subcommittee on Health, Employment, Labor, and Pensions on the importance of state and local governments, being able to establish protections that guarantee workers access to paid sick days and paid family leave. Testifying on behalf of the County, President Riemer discussed the importance of protecting the rights of state and local governments to set their own workplace policy standards above a federal floor. Riemer also stressed the need for strong federal policies. He highlighted Montgomery County's Earned Sick and Safe Leave Law, which was passed unanimously in 2015 and made the County one of a growing number of jurisdictions in the United States that guarantees workers the right to earn sick and safe leave.
 
Montgomery County Executive Recommends Fiscal Year 2018 Savings Plan 
Montgomery County's November income tax distribution for the state of Maryland was forecast to be short $64 million below expectations. County's Department of Finance projects a total revenue shortfall of $95 million in expected FY18 resources. Adding a $25 million revenue shortfall from the previous year, the total savings required are $120 million. According to the Maryland Comptroller's Office, other jurisdictions in the State also experienced similar reductions in their November reconciliation distributions.  On November 30th, the County Executive requested that all Executive Branch departments identify savings of 2 percent from their current FY18 tax-supported budgets. Decisions related to the FY19 Operating Budget and the FY19-24 Capital Improvements Program will also be made in relation to the current fiscal shortfall.
 
Montgomery County Begins Planning for Fiscal Year 2019 Operating Budget
County Executive Isiah Leggett will hold five budget forums to seek residents' input on upcoming budget priorities. The County Executive will announce his Recommended FY19 Operating Budget on March 15. The County Council approves the operating budget at the end of May.
Budget forums will be held:
  • Monday, January 8-7:00 p.m. at the Bethesda-Chevy Chase Regional Services Center (4805 Edgemoor Lane, Bethesda)
  • Wednesday, January 24 - 7:00 p.m. at the Mid-County Community Center (2004 Queensguard Road, Silver Spring)
  • Monday, January 29 - 7:00 p.m. at the BlackRock Center for the Arts (12901 Town Commons Drive, Germantown)
  • Tuesday, January 30 - 7:00 p.m. at the Silver  Spring Civic Building  (One Veterans Place, Silver Spring
  •  Wednesday, January 31 - 7:00 p.m. at the Eastern Montgomery Regional Services Center  (3300 Briggs Chaney Road, Silver Spring)
Model House Program Updated
As of January 3, 2018, the updated model house program is in effect. This program enables a site-specific building permit application process valid for an unlimited number of permits in the current building code cycle. 

Wall Bracing Requirements for New Home Construction
The IRC requires that walls in residential construction be designed to withstand wind loads. This information is often missing from application submissions resulting in avoidable delay in the ability to approve submitted plans. As of January 3, 2018, DPS will require that construction documents for new homes and townhouses applications include wind bracing information for wood-framed walls. Applications missing the required information may be rejected. View the Checklist for Wood Framed Wall Bracing >>>  

New IgCC Green Building Code
The newly adopted International Green Construction Code (IgCC) 2012 is scheduled to go into effect on December 27, 2017. Details will be posted soon on the DPS webpage. Contact: Mark Nauman at [email protected] with any questions.  
  PRINCE GEORGE'S COUNTYprinceg
PG 412-18 - Sale of Residential Real Property- Community Amenities - Advertising
Delegate Susie Proctor has introduced a local bill requiring any advertising for the sale of residential real property in a community development in Prince George's County that will include a certain community amenity to include a certain disclosure statement. The bill applies only prospectively, however, if this passed it would now be the responsibility of the builder to provide a disclosure statement that identifies when the community amenity/amenities will be complete. The legislation also says that if a home builder that does not make the community amenity available as provided in the contract of sale may be liable for breach of contract. 

CB-97-2017 - Validity Period Extensions for DSP and SDP
The County Council enacted a bill that temporarily extends the validity period for all approved applications for Detailed Site Plans and Specific Design Plans with a valid status as of January 1, 2017.  CB-97-2017 temporarily extends the validity period until December 31, 2018.

CB-98-2017 - Validity Period Extension for Preliminary Plans
The County Council enacted a bill that temporarily extends the validity period for all approved applications for Preliminary Plans of Subdivision with a valid status as of January 1, 2017.  CB-98-2017 temporarily extends the validity period until December 31, 2018.

Comments on the Comprehensive Review Draft of the Prince George's County Zoning Ordinance
The Prince George's County Chapter has submitted it comments on the Comprehensive Review Draft of the Zoning Ordinance and Subdivision Regulations.  We have been advised that Park & Planning staff will be briefing the County Council on the comment that they have received from all interested parties.  Legislation is expected along with the amended Zoning Ordinance will be transmitted to the County Council by mid to late January 2018.

New Leadership on the County Council
Council Member Dannielle Glaros is the new Chair of the Prince George's County Council and Council Member Todd Turner is the new Vice-Chair.
  WICOMICO COUNTYwicomico
Lower Shore Economic Summit
Salisbury Area Chamber held their 30th Annual Lower Shore Economic Forecast.  Guest speakers included Chris Carroll, Policy & Legislative Director for Governor Hogan, County Economic Development Directors:  Meredith Mears-Worcester, Daniel Thompson-Somerset, Jeff Trice-Dorchester, and Dave Ryan-Wicomico.  Matt Drew, Lower Shore Wind and Liz Burdock, Business Network for Offshore Wind also made a presentation.  In addition, a short presentation on several topics was given by the following:
  • Manufacturing - New for Our Economy - Michele Garigliano, K & L Microwave
  • Airport - Our Economy Takes Off - Dawn Veatch, Salisbury-Ocean City-Wicomico Regional Airport
  • Tourism:  Converting Events to Economic Engines - Steve Miller, Wicomico County Recreation, Parks & Tourism
  • Giving Businesses a Place to Call Home - John McClellan, Senior Advisor SVN-Miller Commercial Real Estate
  • Poultry & Agriculture:  Our Key Economic Drivers - Holly Porter, Assistant Director Delmarva Poultry Industry, Inc.
  • The Ever-Changing Landscape of Healthcare - Mary Beth Waide, CEO Deer's Head Hospital Center
  • Education of the Next Generation - Donna Hanlin, Superintendent of Wicomico County Public Schools
  • Growing Profit for the Shore - Chris Perdue, Perdue Farms, Inc.
  • Higher Education Driver of Workforce & Economic Development - Dr. Ray Hoy, President Wor-Wic Community College
Dr. Memo Diriker, Director BEACON at Salisbury University reported the BEACON Shore Trends Survey Results to the group.  Dr. Diriker said that the economic forecast showed executives have more faith in local business conditions than in the national level.  He also reported that of the 600 executives in the nine-county Shore region he polled predicted:
  • Forty percent said wages will increase locally while 52 percent say they will go unchanged.
  • Forty-five percent say employment levels will increase while 50 percent don't see any movement.
  • Sixty-Five percent foresee better or much better conditions in the local construction sector.
After the summit a luncheon with the Eastern Shore Delegation was held.  A question and answer session was held with the legislators.  Issues discussed were Healthy Working Families Act (HB1), Wind Farms in Ocean City, Education-need for pre-school program and strong college programs, agriculture and manufacturing.  After the session MBIA was able to talk to several of the legislators about re-introducing the tax credit bill for sprinklers.

The Eastern Shore Builders will hold a Chapter Meeting on Tuesday, January 30, 2018 from 4:30 pm to 6:30 pm at the Ocean Pines Library, 11107 Cathell Road, Berlin. Please contact Joan Strang at [email protected] or call 410-845-0132.
  WORCESTER COUNTYworchester
Small Business Loan Program
Worcester County Commissions agreed to enroll in a program proposed by the Tri-County Council to begin its own small business loan program in Worcester.  The Maryland Department of Commerce will fund $100,000 in seed money and Tri-County Council will add another $100,000.  There is no financial commitment from the county. 
 
Ocean City Tax Differential
Worcester County Commissioners have agreed to meet with the Town of Ocean City to discuss a tax differential for duplicated services.  The meeting must take place 90 days before the budget is adopted.  If granted, based on a county study, the Ocean City tax rate would decrease three cents per $100 assessed value, while the rates outside of the resort would increase 5.7 cents per $100 assessed value.
 
Property Values
The state has reported that Worcester County assessment base has grown from $14.8 billion to $15.2 billion from the same time period last year.  These numbers are used by the county to help determine property taxes, including the constant yield rate.  These numbers are an estimation and the state will deliver another report in March.
 
EDU Rejection
Worcester County Commissioners voted 4-3 to deny Frontier Town 71 EDUs (equivalent dwelling units) to expand their camp ground.  Those voting against the allocation sited an approved EDU policy that assigned the area's available EDUs to specific purposes and that Frontier Town was not included in the policy.
 
Sports Complex, Seasonal Housing Project
The Ocean City Baptist Church is exploring the potential of developing a sports complex and seasonal housing project on a 27 acre site they own behind the outlets in West Ocean City.  The first phase would include several fields and other indoor-outdoor amenities capable of hosting large regional tournaments.  The second phase would develop two dormitory-style housing facilities each two stories high capable of housing as many as 150 seasonal summer workers.  They are currently looking for funding for the project.
 
Worcester County Commissioners Election
The Worcester County Commissioners have elected Diana Purnell as President and Ted Elder as Vice President. 

2018 State Election
Wayne Hartman, Ocean City Councilman has filed to run for the Maryland House of Delegates, District 38C.  This is the seat currently held by Delegate Mary Beth Carozza who has filed to run for Senate against Senator Jim Mathias.
 
The Eastern Shore Builders will hold a Chapter Meeting on Tuesday, January 30, 2018 from 4:30 pm to 6:30 pm at the Ocean Pines Library, 11107 Cathell Road, Berlin. Please contact Joan Strang at [email protected] or call 410-845-0132.
  OTHER INDUSTRY NEWSother
WSSC Proposes Changes to Plumbing Code
WSSC is proposing to adopt the 2018 International Plumbing and Fuel Gas Codes as well as make technical and administrative modifications to WSSC's 2015 code document. View the proposed changes along with the current version (2015) of the WSSC Plumbing and Fuel Gas Code . View the  Public access to the 2018 International Code.
MBIA is reviewing these documents. Written comments will be accepted until February 5, 2018, addressed to the WSSC Regulatory Services Group 11th Floor, 14501 Sweitzer Lane, Laurel, MD 20707, or e-mail Thomas Buckley, [email protected] .
 
Tax Legislation Signed into Law
According to NAHB Chairman Granger MacDonald, the landmark tax reform legislation, signed into law by President Trump, will provide tax relief for hard-working families and create a more favorable tax climate for small business making the economy more vibrant and competitive. In turn, this will boost the housing sector, which represents roughly one-sixth of the U.S. economy. Housing not only equals jobs, but jobs mean more demand for housing."
An overview of the Tax Cuts and Jobs Act, with all changes taking effect for the tax year starting Jan. 1, 2018:
  • Mortgage interest deduction. Retains the mortgage interest deduction and the deduction for second homes, but reduces the mortgage interest cap from $1 million to $750,000.
  • State and local property taxes. Allows taxpayers to deduct up to $10,000 of state and local taxes, including property taxes and the choice of income or sales taxes.
  • Capital gains exclusion. Maintains existing law that allows home owners to exclude up to $250,000 (or $500,000 for married couples) in capital gains on the profit from the sale of a home if they have lived in the house for two of the last five years.
  • HELOC. Eliminates the deduction for interest on home equity loans.
  • Private activity bonds. Retains private activity bonds (PABs), which will enable the Low Income Housing Tax Credit to maintain its effectiveness as the most indispensable tool for the production of affordable housing. Without PABs, we would face the loss of more than 788,000 affordable rental units over the next decade.
  • Alternative Minimum Tax. Eliminates the Alternative Minimum Tax (AMT) for corporations and increases the AMT exemption amounts and phase-out thresholds for individuals.
  • Individual tax brackets. Retains seven tax brackets, with rates ranging from 10% to 37%. This will provide tax relief for individuals and small businesses and represents a tax cut for most taxpayers.
  • Estate tax. Doubles the estate tax exemption.
  • Carried interest. Retains existing carried interest rules, but assets must be held for three years.
  • Pass-through deduction. Allows most taxpayers with pass-through income to deduct 20% of that income based on wages or on wages plus a capital element.
  • Business interest deduction. Provides the taxpayer a choice of making a one-time election for a deduction limited to 30% of adjusted gross income; or for real estate, a 100% deduction for business interest, but with certain tradeoffs.
  • Like-kind exchanges. Preserves the benefit for real estate investors to make tax-free exchanges of property, commonly referred to as "like-kind" exchanges.
  • Multifamily depreciation. Gives the taxpayer the choice of taking 27.5- or 30-year depreciation, depending on how they elect to treat their business interest.
  • Individual tax provision sunsets. Almost all individual tax elements - mortgage interest, state and local property taxes, individual brackets, etc. - expire at the end of 2025. Unless Congress acts, starting in 2026 these modifications will revert back to the tax code as it exists today in 2017.
Be sure to check with your tax professional regarding details on the new tax law. The above items are offered as general descriptions only and do not constitute tax or legal advice.
 
ITC Canadian Lumber Ruling
On December 7, the U nited States International Trade Commission (USITC) determined that a U.S. industry is materially injured by reason of imports of softwood lumber from Canada that the U.S. Department of Commerce (Commerce) has determined are subsidized and sold in the United States at less than fair value (LTFV). As a result of the USITC's affirmative determinations, Commerce will issue antidumping and countervailing duty orders on imports of this product from Canada. The Commission also made a negative finding concerning critical circumstances with regard to LTFV imports of this product.  As a result, imports of softwood lumber from Canada will not be subject to retroactive antidumping duties.
 
This decision means the tariffs imposed by the Commerce Department will remain in effect for Canadian lumber shipments into the United States. These tariffs are acting as a tax on American home buyers and lumber consumers. NAHB estimates that these tariffs will increase the price of an average single-family home built in 2018 by $1,360. Since the U.S. doesn't produce enough lumber to meet the nation's domestic needs, NAHB says that we need to take steps to boost domestic production. At the same time, the U.S. and Canada need to hammer out an equitable agreement to resolve this ongoing trade dispute that will provide American consumers a steady supply of lumber at a reasonable price."

NLRB Overturns Browning-Ferris Decision; Reinstates Prior Joint Employer Standard
The National Labor Relations Board (NLRB) voted on Dec. 14 to overturn its 2015 ruling in the case of Browning-Ferris Industries. The Browning-Ferris decision made the standard for joint employment so broad and vague that an employer could be held liable for the labor and employment practices of independent contractors and subcontractors over which they have no direct control. The NLRB has restored the traditional definition of joint employment in which a company must exercise 'direct and immediate control' over a worker in a business-to-business relationship. Home building firms and other small businesses who work closely with subcontractors and third-party vendors will now have more certainty and clarity regarding their employment decisions.
 
FHA Loan Limits to Rise in More than 3,000 Counties in 2018
The Federal Housing Administration (FHA) announced Dec. 7th its loan limits for 2018 . The nationwide rise in median home prices indicates buyers in more than 3,000 counties will see increases. The new loan limits will apply to all loans assigned FHA case numbers on or after Jan. 1, 2018. The 2018 FHA loan limits by Metropolitan Statistical Area or county can be reviewed on FHA’s loan limits webpage .
 
Proposed Amendments to Critical Area Regulations
In the December 22, 2017 Maryland Register , the Critical Area Commission for the Chesapeake and Atlantic Coastal Bays proposes to incorporate nonwater-dependent projects provisions found in Environment Article, §16-104, Annotated Code of Maryland, and Natural Resources Article, §8-1808.4, Annotated Code of Maryland, so that local planners and the public can find the requirements in one place in the regulations. The nonwater dependent projects provisions provide for local program amendments to authorize a nonwater-dependent project and criteria for a commercial nonwater-dependent project and for a small-scale renewable energy system. In addition, the definition of "pier" is being incorporated into the regulations, one stylistic word change from "shall" to "may" is being proposed in 27.01.11 Directives for Updating Critical Area Maps, and one update to reflect a change in the statute concerning timing of notice from "next" to "fifth" business day is being proposed.
Comments may be sent through Jan. 22, 2018 to Lisa Hoerger, Policy Advisor, Critical Area Commission for the Chesapeake and Atlantic Coastal Bays, 1804 West Street, Suite 100, Annapolis, Maryland 21401, or email to [email protected], or fax to 410-974-5338. A public hearing has not been scheduled.
 
Maryland Updates Smoke Alarm Law in 2018
Maryland's new smoke alarm law requires the replacement of all BATTERY-ONLY operated smoke alarms with units powered by sealed-in 10-year long-life batteries . Homeowners have until January 1, 2018 to comply with the new law.
JANUARY 2018
IN THIS ISSUE
Maryland
Anne Arundel County
Use our Quick Sign Up link to become part of MBIA's strong advocacy program through Voter Voice and help us stop burdensome regulations against the industry. You have the unique ability to tell our officials exactly how a given policy affects you and others in the industry.
ACRONYM GLOSSARY
Acronyms are often used as time saving, shorthand ways to communicate lengthy titles or basic concepts. This glossary provides a quick reference to the terms, acronyms and abbreviations commonly used in this industry.
CONTACT US
Maryland Building 
Industry Association 
11825 West Market Place
Fulton, MD 20759
301-776-MBIA (6242)
STAFF LIST
 
BECOME A  KEY CONTACT
JOIN MBIA TODAY

Together We Can Do More
 
 
The Maryland Building Industry Association has a government affairs staff of  representing you and your interests in each county and at the state level from the Maryland State Builders Association and federally f rom the National Association of Home Builders.

Add up the dollar value of our advocacy victories and you're talking real money - from $6,882 up to $61,000 per housing start  depending on the jurisdiction. That's a big number, and a big step toward success. 
Look back through the monthly reports of issues impacting the home building industry.