Thank you for allowing me the opportunity to comment on the proposed fee increases for contractor license issuance and renewal contained at 18VAC50-22-100 et al.  I am the 2009 president of the Home Builders Association of Virginia (HBAV) and would like to object to the proposed fee increases.  Our approximately 5000 residential and commercial businesses represent the development industry in Virginia, a large number of which are contractors.  Again, let me state the proposed fee increases will negatively impact these contractors at a time when they can least afford it.  

The Department suggests that the fee increases are small and represent an insignificant increase in cost to the contractor.  I could not disagree more strongly.  In these difficult economic times, seemingly small fee increases can be the difference between being open for business or closed.  Therefore, HBAV encourages the Board to reject the increases in licensure application and renewal fees. 

Over the last several years our industry has experienced a severe decline in business.  In Virginia, housing starts have drastically decreased from 49,000 in 2005 when the fees were last increased to just over 18,000 in 2008.  This same benchmark continues a distressing trend and is projected to decline further to 15,000 in 2009.  Many if not all contractors have made very difficult decisions in these troubling times to cut budgets and staff.  It is only appropriate that the agency responsible for regulating our industry should make the same responsible step of cutting their budget to mirror the downturn in the market.  In their supporting documents the Department notes that budget cuts were not considered for fear of a decrease in services.  Given the record low level of housing starts HBAV asserts that a reduction in services is appropriate. For that reason, HBAV believes the Board for Contractors should implement cost-cutting strategies prior to any increase in fees.

Beyond the ill-timed financial burden placed upon the contracting industry, HBAV believes that the Board for Contractors is enacting regulations beyond their statutory authority.  According to Code Section 54.1-1119 the Director must notify the Board whenever the Transaction Recovery Fund balance dips below $400,000.  The Board must then assess an appropriate amount on each contractor at the time of their license renewal.  Each contractor must then be notified by mail of the special assessment.  Once the fund rises above the $400,000 minimum balance the special assessments must cease.  Placing the requirement for a $50 assessment in the regulation is both unnecessary and violates section 54.1-1119 by making a special assessment a permanent regular assessment. HBAV encourages the Board to delete any reference to an assessment for the Transaction Recovery Fund from the license renewal sections.

HBAV believes that this proposed fee increase for contractor licensure is poorly timed and inappropriate given the difficult economic climate.  HBAV requests the Boards understanding and asks that you abandon this regulatory action.

Sincerely,

Rand Sompayrac

President, Home builders Association of Virginia