General Assembly Delays Decision on Cash Proffer Reform

Nearing the end of the General Assembly session, the House Rules Committee voted to carry over SB 768, the cash proffer reform bill sponsored by the Home Builders Association of Virginia (HBAV). In the coming year, the home builders, local governments and other stakeholders will work on a compromise measure to be introduced in the 2009 General Assembly session.

Realtors® support the concept of proffer reform and will work with all parties to craft an appropriate solution that does not result in higher real estate transaction costs or taxes.

Earlier Stories:

 ****BREAKING NEWS****

Senate Committee Removes Grantor’s Tax from SB 768

In the last edition of NVAR Town Hall Notes, we reported that the Home Builders Association of Virginia (HBAV) had introduced SB 768, proposing a major overhaul of the current impact fee and cash proffer system. Included in that bill was a grantor’s tax increase of $.20 per $100 ($2 per $1000) for high growth localities outside of Northern Virginia and Hampton Roads.

We are pleased to report that as a result of state and local Realtor^® association lobbying efforts, the Senate Local Government committee voted this afternoon to remove the grantor’s tax increase from SB 768. The bill will now be referred to the Senate Finance Committee and then to the full Senate.

While this is an important step, it is in no means a guarantee that the grantor’s tax will not resurface in later drafts. Your Realtor^® lobbyists will continue working to improve the cash proffer and impact fee components of the bill while protecting our industry from higher transaction costs.

Home Builders Introduce Legislation on Impact Fees, Grantor’s Tax

Late Friday afternoon, the Home Builders Association of Virginia (HBAV) introduced legislation (SB 768) that would restructure the current impact fee and cash proffer system. Rather than being charged variable cash proffers on new development that sometimes run more than $40,000 per unit, localities would instead charge a set impact fee on all development, including by-right development applications. The new impact fees would apply in designated high-growth areas in Virginia, including those in our region. The proposed impact fees would be $8,000 for Northern Virginia and $5,000 for other parts of the state.

Also included in the bill is a grantor’s tax increase of $.20 per $100 (or $2 per $1000) in certain high-growth areas, excluding Northern Virginia and Hampton Roads localities that levied a grantor’s tax increase as a result of 2007 HB 3202. HBAV originally proposed an additional grantor’s tax increase in Northern Virginia. NVAR fiercely opposed any increase and HBAV removed it from consideration.

While Realtors® are supportive of proffer and impact fee reform, we have expressed opposition to the additional grantor’s tax increase. Your Realtor® associations are actively working with legislators to have the provision removed. NVAR will continue to keep you informed of future developments surrounding SB 768.