Constitutional amendment on eminent domain discussed

The House Judiciary III Committee has begun discussion of a bill to amend the state constitution with regard to eminent domain. HB 2213 - Eminent Domain, sponsored by Rep. Paul Stam, would amend the constitution to prohibit the taking of private property except for a public use and to specify that “public use” does not include ownership of the property by a private entity for economic development, unless the property is blighted as defined by general law. It would require “prompt payment” of just compensation with a right of jury trial in condemnation cases.

The committee did not take a vote, and the chair indicated that HB 1965 – Eminent Domain Restrictions will be discussed at its next meeting. HB 1965 makes statutory rather than constitutional changes, providing that the uses listed in GS 40A-3 are the exclusive uses for which property can be condemned. Local acts granting eminent domain authority for a purpose other than one listed in 40A-3 are repealed. The bill also prohibits the use of eminent domain for certain economic development projects financed with revenue bonds.

Bills would return local money withheld in 2002

Bipartisan bills have been introduced in the House and Senate to pay to municipalities and counties some or all of the $209 million in local money that was withheld in 2002 during the state budget crisis. SB 1768 – Local Government Reimbursements was introduced by Sen. Janet Cowell and HB 2619 - Local Government Reimbursements by Reps. Lucy Allen and Louis Pate. Many of the co-sponsors are former local elected officials and we appreciate their efforts.

Of the total $209 million that the Governor withheld in February of 2002, $130 million belonged to municipalities. The money was a combination of municipal utility franchise tax, beer and wine tax, and reimbursements for previously repealed taxes. None of this money for FY 2001-02 was ever repaid. We did get bills enacted to substitute a local sales tax for the reimbursements and to prevent a governor from ever again withholding the tax revenues.

It will be difficult to get the monies returned this session, since payment of these local funds is not included in the proposed budget submitted by the Governor or the budget bill the Senate passed this week. Nevertheless, local officials should contact their House members in support of paying some or all of this money.

Proposal would eliminate sovereign immunity for building inspections

A subcommittee of House Judiciary III reported to the full committee this week on a proposal that would waive governmental or sovereign immunity in lawsuits resulting from building inspections. The legislation in question is a proposed substitute for SB 1143 – Liability/Local Code Enforcement Officials, which passed the Senate in a different form last year.

The original intent of the bill was to restore the protection of the public duty doctrine to local building inspections. The doctrine is a principle in negligence law recognizing that, in some circumstances, a government has a duty to protect the general public, but not a particular individual. Several years ago, court decisions greatly limited the use of the public duty doctrine to protect local governments from liability. Once applied to building inspections and fire suppression, North Carolina courts effectively limited its use to law enforcement actions.

In attempting to fix this problem, the House subcommittee’s rewrite has created new problems. Local governments would give up their governmental immunity in situations where negligence in building inspections is alleged. In addition, they would be required to indemnify building inspectors--both municipal employees and independent contractors--against liability in any civil lawsuits resulting from actions within the scope of official duties. This means the local government would be responsible for paying any damages awarded in lawsuits involving building inspections. A local government would also have to purchase insurance to cover independent contractors performing building inspections.

While we understand that building inspectors are seeking protection against lawsuits and personal liability for their official actions, the subcommittee’s proposal is not the answer.

Please call members of the House Judiciary III Committee to express your opposition to any version of this legislation that would take away your sovereign immunity. Members of this committee are Rep. Sutton, chair; Reps. Haire, Jones and Sherrill, co-chairs; and Reps. Dollar, Faison, Holmes, Jeffus, Johnson and Warren.

Senate proposes and votes on budget

In short order, Senate leaders rolled out their plan to spend $18.8 billion in FY 2006-2007, the Senate Appropriations Committee recommended approval of the bill, and the full Senate took the two votes necessary to pass the legislation.

SB 1741 – Modify Appropriations Act of 2005 reduces the state sales tax from 4.5 percent to 4.25 percent effective January 1, 2007 and to 4.0 percent effective July 1, 2007. It lowers the current 8.25 percent income tax rate for high-income individuals to 8.0 percent, effective January 1, 2007 and to 7.75 percent effective January 1, 2008. These reductions would phase out the temporary increases in these taxes put in place in 2001 when the state faced a major budget gap. The Senate also proposes to cap the state’s gasoline tax at the current rate of 29.9 cents per gallon.

A provision of the budget would raise the state’s minimum wage from $5.15 an hour to $6.15 per hour. Most state employees would receive 5 percent raises; teachers would receive 8 percent; and university employees and community college faculty would receive 6 percent.

The budget includes funding for 90 additional assistant district attorneys, 75 deputy clerks, 6 magistrates and 16 additional district court judges. It funds 100 more literacy coaches for middle schools. It eliminates $44.3 million in annual cuts (since 2003) to schools, but does not fund Governor Easley’s request for $42 million in appropriations for low-wealth school districts. There is $105 million in new spending for mental health services, including community crisis centers, and more psychiatrists and treatment facilities for alcohol abusers and developmentally disabled persons. The state would borrow to build new psychiatric hospitals in Morganton and Goldsboro. The Senate also set aside $253 million for several university construction projects, a new state emergency operations center in Raleigh and a state data recovery center in Rutherford County. Some $570 million is set aside in reserve funds for disasters, economic downturns and government building repairs.

The budget maintains the annual appropriation of $100 million for the Clean Water Management Trust Fund. A special provision would place a moratorium on new landfills in the state until January 1, 2008 so that the state can study solid waste disposal.

The budget reduces the money for public transportation new starts by $23 million. It increases operations assistance for transit systems by $2 million in recurring funds and increases funds for bus systems’ federal match by $2 million that is nonrecurring. The budget adds $28 million recurring for economic development, spot safety, and transportation improvement projects, and $10 million nonrecurring for development of the VIPER network. There is a $40 million increase for urban loops and an $8 million increase in Powell Bill funds, both nonrecurring. A special provision allows DOT to enter into agreements with local governments to expedite transportation projects that are currently programmed in the TIP. The local government must fund one hundred percent of the project and is to be reimbursed in future years when the project is funded from state and federal sources.

Make contacts on video programming bills

Please continue contacting your House and Senate members on HB 2047 – Video Service Competition Act and identical companion bill, SB 1559 – Video Service Competition Act. These bills would replace local franchising of cable/video programming with a state franchise system. See last week’s Legislative Bulletin for more details on provisions regarding local government revenues, control over public rights-of-way, customer service standards, build-out, and PEG channels. The bills still need considerable work before they are acceptable.

Another round on stormwater

House and Senate bills have been introduced to disapprove the proposed rules adopted by the Environmental Management Commission and to sunset the stormwater management legislation that was enacted in 2004 before the EMC adopted final rules. SB 1566 – Stormwater Management 2006 is sponsored by Sen. Dan Clodfelter, and identical companion bill HB 2166 – Stormwater Management 2006 is sponsored by Reps. Pryor Gibson, Lucy Allen, Pricey Harrison and Jennifer Weiss. The legislation is intended to resolve differences between the 2004 session law and the EMC’s final rules.

As introduced, the legislation would expand the areas subject to Phase II requirements to include the entire unincorporated area of a number of counties. It will also result in the addition of more municipalities within those counties to Phase II coverage. (These would be in addition to the 123 cities previously designated.) The N.C. Department of Environment and Natural Resources would be responsible for administering the program for the new areas covered.

The coverage area, and several other matters, are still under negotiation and we expect to see significant changes from the introduced version. The League has been participating in a series of stakeholders’ meetings on these and other stormwater issues and will seek amendments to the bill as proposed. We will provide more details as the substitute bill takes shape.

Reduced number of mailed copies of bulletin

Beginning with this issue of the Legislative Bulletin, the League will be mailing one copy of each issue to each member municipality (addressed to the manager, administrator or clerk); to each affiliate NCLM member; and to any official requesting a mailed copy. The copy mailed to each municipality is intended as a file copy and is addressed to the chief administrative official. If other officials want to continue receiving the bulletin by U.S. mail, please call the League office at 919 715-4000 or write us at P.O. Box 3069, Raleigh, NC 27602.

We are sending an electronic version of the bulletin to all elected and key appointed officials for whom we have an email address. We will be happy to add individuals to this electronic list. Please send the name, municipality, and email address to league.bulletin@nclm.org.

Following are some of the bills that were introduced or acted upon since the session convened. If you need a copy of these or any other bills, please contact the Legislative Printed Bills Office at 919-733-5648 or the League office. Remember that bills and legislative calendars are now available on the Internet at http://www.ncleg.net. Please contact the League staff if you have any particular interest or concern regarding any piece of legislation.

ANNEXATION

SB 1372 Property Tax Due Date Change

Provides that a governing body of a taxing unit may collect property taxes over a three year period for certain newly annexed property and delay the accrual of interest accordingly. The property must have been annexed between January 1, 2003 and January 1, 2006, and the date of the annexation must have been set by judicial order. Applies to taxes for the partial fiscal year October 1, 2005 through June 30, 2006. Sen Rand S ref to Finance

ENVIRONMENT

HB 2169 Limit Nutrient Offset Payments

Provides that the per pound factor used by the Environmental Management Commission to establish a nutrient offset payment is $35.00 per pound of nitrogen and per tenth of a pound of phosphorous. Effective July 1, 2006 and applies to all nutrient offset payments under rules adopted by the EMC on January 12, 2006. Rep Gibson H ref to Envr

SB 1561 Amend Interbasin Transfer Laws

Requires applicant for interbasin transfer to include in its petition a letter of support from each downstream public water supplier that withdraws from the source water body (including in downstream states) stating that the proposed transfer will not negatively affect existing water users. Requires petition to include report detailing the source, volume, and maximum permitted capacity of all existing water withdrawals and interbasin transfers from the source river basin, a determination of whether the proposed transfer and other withdrawals are within the safe yield of the source water body, and the most recent information from the Wildlife Resources Commission concerning aquatic habitat for rare, threatened and endangered species in the source basin and the receiving basin. In determining whether to authorize the transfer, requires the EMC to determine whether the proposed transfer will have a detrimental impact on the future water supplies of local governments that make withdrawals from the source water body. Requires additional information in environmental assessment or impact statement. Sen Clodfelter S ref to Ag & Envr

FINANCE & TAX

HB 2170 Bill Lee Changes

Creates new state economic development tax incentives to replace the Bill Lee Act for most affected taxpayers. Repeals the Bill Lee Act effective January 1, 2007. The new provisions change the method of determining county tier designations, expand the types of businesses qualified to receive tax credits, replace state development zones with urban progress zones, and provide for studies of the equity implications and impact of tax incentive programs. Requires the Department of Commerce to annually assign a tier designation one, two or three to each of the counties based on the following factors: unemployment, median household income, percentage in population growth, and per capita adjusted assessed property value. The 40 counties with the highest ranking would be tier one, the next highest 40 counties would be tier two, and the remaining counties would be tier three. Provides certain exceptions. Defines an "urban progress zone" as an area comprised of one or more contiguous census tracts, block groups or both that meets all the following conditions: (1) is in an area completely within the corporate limits of a municipality with a population of at least 10,000; (2) every census tract and block group that composes part of the zone meets at least one of the following conditions: more than 20% of its population is below the poverty level, or at least 75% of its area is zoned as commercial and industrial and it is adjacent to a census tract or block of which at least 20% of the population is below the poverty level; (3) the area of the zoned as commercial and industrial does not exceed 35% of the total area of the zone; (4) the combined area of all zones in the municipality less the smallest census tract included in the zones does not exceed 10% of the total area of the municipality; (5) no census tract or block group may be in more than one zone. Establishes a list of eligible businesses providing that a taxpayer is eligible for a credit only with respect to activities occurring at an establishment whose primary activity is listed. Provides that a taxpayer is eligible for a credit with respect to a company headquarters only if the taxpayer creates at least 75 new jobs at the headquarters within a 12 month period. Provides that a taxpayer is eligible for a credit in a tier two or three area only if the taxpayer satisfies a wage standard as specified. Provides that the credits are allowed against the franchise tax, the income tax or the gross premiums tax, or a combination of the three. Sets forth the credits for creating jobs allowed eligible taxpayers based on the development tier designation of the county in which the job is located. Sets forth the credits for investing in business property and for investing in real property also based on the tier designations. Identical to SB 1553 (Sen. Hoyle). Rep Owens H ref to Finance

GENERAL GOVERNMENT

HB 2168 Exempt Certain Greenhouses from Bldg. Code

Amends G.S. 143-138(b) to classify greenhouses as “farm buildings” and provide that greenhouses located within the building-rules jurisdiction of any municipality are not subject to any building rules if they are built in accordance with the National Greenhouse Manufacturers Association Structural Design Manual and are not used for retail sales. Identical to SB 1599 (Sen. Albertson). Rep Gibson H ref to Insurance

SB 1356 Offer Condemned Land to Condemnee

Requires that when condemned land is no longer needed, it shall first be offered to the owner from whom it was purchased. Provides that the property shall be offered for a reasonable time, to the prior owner or his heirs, successors or assigns, provided not more than 10 years have lapsed since the purchase, at the price paid for the property whether arrived at through negotiation or judgment, including the reasonable value of any improvements. If the owner refuses the offer, then the property may be sold or disposed of in a manner prescribed by law. Sen Hartsell S ref to Rules

LOCAL BILLS

HB 1820 Stem Satellite Annexations

HB 1823/SB 1267 Roanoke Rapids Annexation

HB 1989 Princeton Satellite Annexations

HB 2126 Clayton Satellite Annexations

SB 1428 Burgaw Satellite Annexations

Adds these towns to the list of those exempted from the 10 percent area cap for satellite annexations.

HB 1881 Pink Hill Deannexation

HB 1913 Red Cross Deannexation

HB 2251/SB 1526 Reidsville Deannexation

SB 1376 Mt. Pleasant Deannexation

SB 1348 Dortches Deannexation

SB 1734 Harrisburg Deannexation

Removes described territory from the corporate limits of these towns.

HB 1990 Allow Benson to Regulate Golf Carts

HB 2027 Regulation of Golf Carts in Tabor City

SB 1328 Regulation of Golf Carts in Saluda

SB 1335 Regulation of Golf Carts in Tabor City

SB 1432 Caswell Beach to Regulate Golf Carts

Authorizes these towns to regulate the operation of electric golf carts on public roads and require them to be registered.

HB 2001 Matthews/Mint Hill Junked Vehicles

SB 1358 Ahoskie Junked Vehicles

SB 1391 LaGrange Junked Vehicles

For these towns, amends the definition of a junked motor vehicle to include one worth less than $500 (was $100).

HB 2026/SB 1310 Cramerton Use of ATV's

SB 1388 Highlands Law Enforce Use of ATVs

Allows police officers of these towns (and in some cases other municipal employees) to operate unregistered all-terrain vehicles on highways with speeds of thirty-five miles per hour or less.

HB 1863 Mebane Sidewalks

Amends the charter of the City of Mebane to allow the city to maintain sidewalks located in its ETJ. Rep Bordsen H ref to Loc. Gov. II

HB 2000 Mint Hill Public Nuisance Ordinance

Amends the charter of the Town of Mint Hill to allow the town to notify chronic violators of the public nuisance ordinance that, if the violator's property is found to be in violation of the ordinance, the town will without further notice in that calendar year take action to remedy the violation. Rep Gulley H ref to Local Gov. II

HB 2040 Fayetteville PWC Contracts

Exempts the Fayetteville Public Works Commission from certain public bidding requirements when designing, constructing, or renovating water and sewer lines. Rep Dickson H ref to Loc. Gov. II

HB 2093 Navassa Zoning Jurisdiction

Amends the charter of the Town of Navassa to provide that the town's planning and zoning authority does not apply to certain annexed property. Vests planning and zoning jurisdiction in the county. Identical to SB 1185 (Sen. Soles). Rep Stiller H ref to Rules

HB 2103 Jacksonville Inititative/Referendum

Amends the charter of the City of Jacksonville to provide for initiative and referendum. Identical to SB 1385 (Sen. Brown). Rep Grady H ref to Loc. Gov. I

HB 2124 Charlotte Area Transit System

Amends the charter of the City of Charlotte to make certain criminal statutes involving railroad systems applicable to rapid transit services in the city, including busways, commuter rail systems, light rail systems and streetcar systems. Also makes failure to provide proof of fare payment to an authorized official a Class 3 misdemeanor. Identical to SB 1774 (Sen. Graham). Rep Saunders H ref to Loc. Gov. 1

HB 2259 Elkin Occupancy Tax

Authorizes the Town of Elkin to levy a room occupancy tax of up to six percent. Rep Harrell H ref to Finance

HB 2289 Asheville Franchise Tax Amendment

Amends the charter of the City of Asheville relating to an agreement making full and final settlement of disputed matters relating to the amount of franchise tax due the city by Carolina Power & Light Company. Rep Sherrill H ref to Loc. Gov. II

HB 2324 Chapel Hill Charter Amendment

Amends the Charter of the Town of Chapel Hill to repeal the term limit for the office of mayor. Rep Insko H ref to Loc. Gov. II

SB 1199 Blowing Rock Parking Facility

Exempts the Town of Blowing Rock from certain public bidding requirements and allows use of the design-build method of construction for a specific public parking facility. Sen Garwood S ref to Approp

SB 1217 Kure Beach/Bldg. Height Limit

Provides that no building erected within the corporate limits of the Town of Kure Beach may have a height in excess of 35 feet above ground level unless it was erected before the effective date of the act, or the town adopts an exception to the limit that is approved by the voters. Sen Boseman S ref to State & Loc. Gov.

SB 1429 Navassa Boundary

Annexes described right-of-way to the corporate limits of the Town of Navassa. Sen Soles S ref to Finance

SB 1431 Burgaw Occupancy Tax

Authorizes the Town of Burgaw to levy a room occupancy tax of up to three percent. Sen Soles S ref to Finance

SB 1506 Additional St. Pauls Occupancy Tax

Authorizes the Town of St. Pauls to increase its room occupancy tax up to two percent. Rep Weinstein S ref to Finance

SB 1541 Tabor City Subdivisions

Exempts from definition of subdivision in Tabor City a division of a tract or parcel of land into only one lot, building site, or other division that does not include the dedication of a new street, or change in existing streets where adequate utilities are located. Sen Soles S ref to Finance

PERSONNEL

HB 1942 Verify Public Employee Legal Status/Funds

Requires each state agency, department, and institution, the University of North Carolina, the Community College System, and local political subdivisions of the state to verify, in accordance with the Basic Pilot Program administered by the U.S. Department of Homeland Security, every employee's legal status or authorization to work in the United States prior to hiring the employee. Provides that by August 1, 2006, the governmental entities named shall take all steps necessary to participate in the Basic Pilot Program. Rep Cleveland H ref to State Personnel

SB 1627 Security and Immigration Compliance

Requires all public employers to register and participate in the federal work authorization program to verify new employees. Any contractor or subcontractor that contracts with a public employer must also register and participate in the work authorization program. Effective date for public employers, contractors, or subcontractors with 500 or more employees is July 1, 2007; the effective date for those with 100 employees or more is July 1, 2008, and the effective date for all others is July 1, 2009. Identical to SB 1223 (Sen. Pittenger). Sen Forrester S ref to Rules

PUBLIC SAFETY

HB 458 Ban Video Poker/All But Reservations

Repeals G.S. 14-306.1 which banned only certain video poker machines. Enacts new G.S. 14-306.1A to ban possession or operation of all video gaming machines in the state except those on Indian lands held in trust by the U.S. for and on behalf of federally recognized Indian tribes if conducted in accordance with an approved Tribal-State Gaming Compact. Rep Hill Passed Senate; H ref to Rules

HB 2145 Secret Compartments in Motor Vehicles

Makes it a Class I felony to have a false or secret compartments in a motor vehicle. Includes any enclosure that is intended and designed to be used to conceal, hide, or prevent discovery by law enforcement officers of the false, hidden, or secret compartment, or its contents, and which is integrated into or attached to a vehicle. Intent can be inferred by presence of contraband or evidence of past contraband inside the compartment. A vehicle with a secret compartment is subject to seizure. Rep Moore H ref to Transp

HB 2194 Energy Emergencies Preparedness

Requires the State Energy Office to conduct a study of the state's ability to respond to an energy emergency or energy crisis and update the NC Energy Emergency Plan, consistent with the findings in the act. The Office must review and recommend revisions to existing energy emergency plans of State agencies and local governments or recommend development of a plan, and clarify the roles and responsibilities among state and federal agencies and units of local government in the event of an emergency petroleum shortage. The office must also, in conjunction with the Office of State Purchase and Contract, review the current contracts for fuel for state purchases and purchases by units of local government and determine whether they adequately assure that the governments would not experience any supply disruptions for their highest fuel needs during an emergency fuel shortage. Identical to SB 1489 (Sen. Nesbitt). Rep Cunningham H ref to Approp

HB 2206 Cell Phone Use By Drivers Under 18 Prohibited

Prohibits persons under the age of 18 from operating a motor vehicle on a public street while using a mobile telephone, hands-free mobile telephone technology, or any other additional technology associated with a mobile phone that would distract the driver while the vehicle is in motion. Rep Clary H ref to Judic. I

RETIREMENT

HB 1877 Purchase Military Service/Retirement

Amends TSERS and LGERS provisions allowing the purchase of service credit for active military duty under certain circumstances. Deletes the requirement that the person's membership in the system began on or prior to January 1, 1988. Rep Glazier H ref to Pens. & Ret.

TRANSPORTATION

HB 1925 NC/VA Interstate Toll Road Compact

Enacts the Virginia-North Carolina Interstate Toll Road Compact, under which the two states agree to impose tolls on I-95 within their respective boundaries. Tolls may not exceed $5 for a two-axle vehicle, and net proceeds are to be shared equally between the two states after deducting costs of collection and operation. Rep Owens H ref to Rules