Senate Finance approves video bill

The Senate Finance Committee gave a favorable report to a committee substitute for HB 2047 – Video Franchising on Thursday of this week.  Based on attempts in a previous meeting, we were concerned about amendments to divert the local governments' share of revenues to other uses.  One amendment was introduced to redirect funds from the growth in the state's portion of the sales tax on video programming services.  Although staff indicated that they expected no impact on local government revenues, no fiscal note had yet been prepared, so we will reserve judgment until that determination has been made.  The amendment was ultimately withdrawn but we believe the issue will be revisited, possibly as a committee substitute for a separate appropriations bill.

The version of HB 2047 passed by Senate Finance is likely to be the final version of the bill.  Barring unanticipated modifications, it contains the following provisions:

• Local governments will receive revenues from portions of three state sales taxes to replace existing cable franchise fees. 
• The state becomes the franchising authority for video services, effective January 1, 2007.
• There are no build-out requirements for state franchise holders.  
• Current cable franchise holders can opt out of their local franchises as soon as a state franchise holder offers service to a single household in that local area.
• Municipalities will retain their authority to regulate the public rights-of-way.
• The Attorney General's Office will handle customer service complaints.
• Cities with at least 50,000 residents will have a minimum of three initial PEG channels and those with under 50,000 a minimum of two, plus channels in excess of those minimums that are activated under the terms of an existing franchise agreement as of July 1, 2006.  A municipality without seven PEG channels is eligible for an additional channel if it meets specified programming requirements.

Local property tax revenues still in jeopardy

Please continue to contact your members of the House Finance Committee to express opposition to a provision of HB 1827 – Gen. Con. Lic. Except/Clearing/Vehicle Values that would require motor vehicles to be appraised at their wholesale value rather than the fair market value.  If this provision is enacted, counties and municipalities would lose $144 million in property tax revenues annually, with the municipal share being approximately $47 million.  There was no action on the bill this week – it remains in committee, and some legislators have told us they are hearing from municipal officials.  Your contacts are having an effect, so keep up the good work.  

Budget nearing completion

House and Senate conferees failed to reach agreement on a budget on Thursday, meaning the budget will not be adopted before the start of the new fiscal year and a continuing resolution to keep state government operating will be necessary.  However, conferees have reached agreement on most budget items, with only a few provisions remaining to be ironed out.  They are hopeful that the budget conference report can be read in sometime today and voted on next week.

Once the final budget is adopted, there will be a rush to adjournment.  As always, these are times when we must ask that you pay close attention to requests to contact legislators.  Often final actions are taken within a few hours, and an instant response may be required.

Eminent domain bill back in committee

HB 1965- Eminent Domain Restrictions was pulled from consideration on the Senate floor this week after an amendment was introduced concerning use of condemnation in blighted areas.  We believe the amendment would provide that eminent domain could only be used to acquire those properties in a redevelopment area that meet the definition of “blighted.”  After introduction of this amendment, HB 1965 was referred back to the Senate Judiciary I Committee so that the amendment could be more fully discussed.

The League did not oppose HB 1965 as written.  We believe it is a reasonable clarification of the intent of the existing statutes, which we have never interpreted as granting broad authority to condemn property for economic development purposes.  We are certainly willing to look at ways to clarify the definition of blighted areas but want to ensure that any changes do not unreasonably harm our authority in the redevelopment statutes to address blight.

Bonds doubtful this session

The leadership indicated this week that the General Assembly is unlikely to act on any of the infrastructure bond issues that were introduced this session.  In recent weeks there had been some discussion of developing a single bond package combining elements of the clean water, land acquisition, and affordable housing bills.  Concerns about debt affordability appear to have stalled any movement in that direction.