Pace of introductions speeds up

More on sales tax proposals
Standards for nonresidential buildings
Help for post-employment benefits
Local sales tax for counties only
Local bills on local option revenues
Proposal on mandated interconnection
More anti-annexation bills
Additional committee leadership
House rules adopted

More property tax proposals
Legislation introduced this week would put a constitutional amendment before voters in November, limiting increases in valuation of residential property. HB 540 – Residential Property Tax Reduction, introduced by Reps. Robert Grady and Edgar Starnes, would limit the increase in valuation on a permanent residence during a countywide reappraisal to the increase in the federal Consumer Price Index since the last reappraisal. The residence can be valued at market value when it is sold (other than to immediate family members) or when there is a physical change in the land or improvements. The taxpayer must file for the reduced valuation.

Reps. Grady and Starnes are also sponsors of HB 539 – Homestead Exclusion Expansion, which would increase the base income eligibility limit for the homestead property tax exclusion from $19,000 to $49,000, resulting in more homeowners qualifying for the exemption.

Another property tax relief proposal makes changes to the existing exclusion for disabled veterans. Currently a disabled veteran who receives a federal grant for specially adapted housing is entitled to a $38,000 property tax exclusion. HB 486 – Property Tax Exclusion for Disabled Veterans, sponsored by Reps. Hugh Holliman, Bill McGee, Jim Harrell and Louis Pate, would allow an honorably discharged disabled veteran to qualify for the exclusion even if not receiving the grant for specially adapted housing. It would increase the amount of the exclusion to the greater of $48,000 or one-half the appraised value of the residence, and allow the exclusion to carry over to any surviving spouse until remarriage. The bill does provide for the state to reimburse cities and counties for the lost property tax revenues.

Standards for nonresidential buildings
Sen. John Kerr has introduced SB 556 – Nonresidential Building Code, which would permit cities to adopt and enforce ordinances relating to nonresidential buildings within city limits and the ETJ that fail to meet minimum standards of maintenance, sanitation, and safety established by the governing body. Procedures for investigation; notice; hearing; orders to repair, vacate or demolish; liens; and service of complaints and orders are similar to existing authority to enforce minimum housing codes.

One of the League’s priority items on the advocacy agenda is to seek additional municipal authority to regulate unsafe and dilapidated buildings. We appreciate Sen. Kerr introducing this bill and look forward to working on this issue.

Help for post-employment benefits
Companion bills to assist local governments in funding future benefits were introduced this week. Standards for local government accounting and financial reporting require that cities accrue the liability for post-employment benefits, such as health insurance and life insurance costs. Under GASB 45, cities must show the present value of these future benefits for current employees on their balance sheets. These accrued liabilities can be quite large, and local governments need additional options for investments if they choose to pre-fund the benefits. SB 580 – State Treasurer/Local OPEB Investments, sponsored by Sen. Dan Clodfelter, and HB 515 – State Treasurer/Local OPEB Investments, sponsored by Rep. Drew Saunders, will allow local governments to take advantage of the Treasurer’s more flexible investment power to get a higher rate of return. The bills establish the Local Government Other Post-Employment Benefits Fund as a trust fund in the Office of the State Treasurer for investments on behalf of participating local governments. The accumulated contributions are to be used to provide other post-employment benefits to former employees and beneficiaries of the participating units.

The League has been working with the Treasurer’s office and other groups on this issue. Our thanks to Treasurer Richard Moore and his staff and to Sen. Clodfelter and Rep. Saunders for their assistance.

Local sales tax for counties only
SB 563 – One-Cent Local Option Sales Tax has been introduced by Sen. Clark Jenkins. The bill authorizes counties to levy an additional one-cent local option tax, if voters approve by referendum. Proceeds could be used for public school capital expenditures, road construction, capital infrastructure needs or mental health programs. Counties would not be required to share the proceeds with municipalities.

The League’s advocacy agenda seeks legislation to create additional local option revenue sources that may be dedicated to infrastructure needs. We are partnering with the Association of County Commissioners on the issue of infrastructure funding, and we are in agreement that any revenue authorization must include a significant and equitable municipal share.

Local bills on local option revenues
Bills to grant additional local option sales tax authority to specified counties and to grant or amend occupancy tax authority continue to pour in. By our count, there are now 17 local sales tax bills and 10 on occupancy tax. This week we began to see bills on some of the other local option revenue sources, such as the land transfer tax and impact fees. SB 610 – Wake County Revenue Options would allow Wake County to levy an additional one-cent local option sales tax, a land transfer tax up to 1 percent, and a county impact fee, if approved be county voters.

SB 551 – Granville Land Transfer Tax and SB 612 – Hoke County Land Transfer Tax would authorize a 1 percent land transfer tax for those counties. SB 636 – Granville County Impact Fees would authorize impact fees (until 2010) on new dwellings in Granville County, not to exceed $2,000 to defray public school capital costs. We expect to see more local bills along these lines.

Proposal on mandated interconnection
Sen. Fletcher Hartsell has introduced a bill on interconnection of water and wastewater systems, similar to proposals in past sessions. SB 541 – Interconnection of Public Water Systems authorizes the state to mandate that a public water or wastewater system be interconnected with a municipal, county, or regional system if necessary to promote the public health, protect the environment, or ensure compliance with drinking water or water quality rules. The bill also requires an analysis of reasonable alternatives before building or expanding a public water system and prohibits issuance of a permit for a new or expanded waste treatment system unless the applicant has adopted a plan to reduce stormwater and groundwater infiltration into collection lines, performed an analysis of reasonable alternatives, and demonstrated that the new or expanded waste treatment facility can accommodate eventual interconnection with adjoining or regional systems.

We have gathered information in previous sessions on the potential technical, financial, and contractual issues raised by this proposal. The League’s core principles state that municipalities need the autonomy to make appropriate management, financial, and operational decisions with regard to enterprise services. They must be free to determine appropriate rates and service areas, and free to determine when it is appropriate to enter into regional or multi-jurisdictional arrangements.

More anti-annexation bills
HB 549 – Polk Annexation Referendum, introduced by Rep. Trudi Walend, would require a referendum on a city-initiated annexation if 20 percent of the voters in the annexation area petition for a vote. A similar Senate bill, SB 650 - Polk Annexation Referendum (Sen. Tom Apodaca), includes the same referendum provision but also requires that when a city initiates annexation of a portion of a subdivision, the entire subdivision must be included in the annexation, except for parts of the subdivision within the boundaries of another municipality or another county. SB 647 - Buncombe Annexation Referendum, also sponsored by Sen. Apodaca, applies the same requirements regarding a referendum and the inclusion of entire subdivisions for city-initiated annexations in Buncombe County. This bill is companion to HB 86, previously reported.

SB 571 – Annexation Moratorium/Hampstead, introduced by Sen. R. C. Soles, would place a two-year moratorium on incorporation or city-initiated annexation of any portion of the Hampstead area in Pender County. SB 572 – Hoke County Moratorium, introduced by Sen. David Weinstein, would prohibit annexation into Hoke County by a municipality located outside the county. It also prohibits the extension of extraterritorial planning jurisdiction into Hoke County by any municipality located outside that county.

The League opposes these bills.

Additional committee leadership
Rep. Rick Glazier and Sen. Dan Clodfelter will co-chair the joint Legislative Ethics Committee. Reps. Bill Owens and Jennifer Weiss and Sens. Tony Foriest and David Hoyle will chair the joint Committee on Economic Development Incentives.

House rules adopted
This week the House approved its permanent rules, with several items of note. The rules prevent the inclusion of "special provisions" in the budget and eliminate the practice of allowing a small group of House members to vote on any committee. The new rules also include a ban on blank bills and a minimum one-day wait on floor votes after a bill emerges from committee.

Following are some of the bills that were introduced or acted upon this week. 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.

ENVIRONMENT

Bill: HB 275 - EXTEND MORATORIUM ON SWINE FARMS
Sponsors: Hill (D20)
Status: 03/07/2007 – House Committee On Environment and Natural Resources
Extends the moratorium on construction or expansion of swine farms and on lagoons and animal waste management systems for swine farms from September 1, 2007 until September 1, 2010.

FINANCE & TAX

Bill: HB 477 - TAX FREE SHOPPING WEEKEND POST-THANKSGIVING
Sponsors: Moore (R111)
Status: 03/05/2007 – House Committee On Finance
Establishes a second sales and use tax holiday on the weekend after Thanksgiving.

GENERAL GOVERNMENT

Bill: HB 469 - REDUCE NOTICE TIME/METHOD FOR STREET CLOSURES
Sponsors: Clary (R110); Current (R109); Neumann (R108)
Status: 03/05/2007 – House Committee On Local Government I
Changes notice for street and alley closures from publication for four weeks to publication once not less than ten days nor more than 25 days from the public hearing.

Bill: SB 492 - POLITICAL SUBDIVISIONS/CONTRACTS EXEMPTION
Sponsors: Cowell (D16)
Status: 03/06/2007 – Senate Committee On Commerce, Small Business and Entrepreneurship
Exempts political subdivisions from the laws regulating public contracts when purchasing from contracts established by the United States or any federal agency.

LOCAL BILLS

Bill: HB 151 - HONOR ZEBULON'S 100TH
Sponsors: Coleman (D39)
Status: Resolution 2007-8
Honors the founders of the Town of Zebulon on the town's 100th anniversary.

Bill: HB 435 - INDIAN TRAIL'S 100TH ANNIVERSARY
Sponsors: Blackwood (R68)
Status: Resolution 2007-10
Honors the founders of the Town of Indian Trail on the town's 100th anniversary.

Bill: HB 472 - ROPER ELECTIONS
Sponsors: Spear (D2)
Status: 03/05/2007 – House Committee On Local Government I
Moves elections for the town to even-numbered years.

Bill: SB 491 - MORRISVILLE ANNEXATIONS
Sponsors: Cowell (D16)
Status: 03/06/2007 – Senate Committee On Finance
Authorizes the town to annex certain properties currently surrounded by the corporate limits.

Bill: SB 539 - CHAPEL HILL ENERGY EFFICIENCY INCENTIVES
Sponsors: Kinnaird (D23)
Status: 03/07/2007 – Senate Committee On Finance
Allows the town to provide development incentives in exchange for reduction in energy consumption.

Bill: SB 545 - CABARRUS QUICK TAKE
Sponsors: Hartsell (R36)
Status: 03/07/2007 – Senate Committee On Finance
Authorizes Cabarrus County and the municipalities located wholly or partly therein to use the procedure and authority in G.S. Chapter 136, Article 9 in exercising eminent domain for the acquisition of property interests within the county for (i) waterlines and treatment facilities, (ii) sewer lines and treatment facilities, and (iii) opening, widening, extending, or improving public streets, roads, and sidewalks.

Bill: SB 546 - MT. PLEASANT DEANNEXATION
Sponsors: Hartsell (R36)
Status: 03/07/2007 – Senate Committee On Finance
Repeals a 2004 legislative annexation. Upon the effective date of the act, the property removed from Mount Pleasant reverts to the classification it had under the Cabarrus County zoning ordinance at the time of the original annexation.

Bill: SB 579 - CHARLOTTE/ELECTRONIC BIDS
Sponsors: Clodfelter (D37)
Status: 03/07/2007 – Senate Committee On Commerce, Small Business and Entrepreneurship
Authorizes the city to receive bids electronically in addition to or instead of paper bids on public construction projects.

TRANSPORTATION
Bill: HB 511 - BIDS/COMPLY WITH FEDERAL TRANSIT LAW
Sponsors: Saunders (D99)
Status: 03/07/2007 – House Committee On Transportation
Provides that nothing in G.S. Article 87 prevents any political subdivision of the state from complying with any act of Congress and any rules, regulations, or other directives promulgated pursuant thereto for carrying out the provisions of the Federal Transit Act, or applies to any person, firm, or corporation proposing to submit a bid or enter into contract for any work to be financed in whole or in part with federal transit funds.

Bill: SB 549 - INCREASE LENGTH LIMITS FOR TRANSIT BUSES
Sponsors: Dannelly (D38)
Status: 03/07/2007 – Senate Committee On Commerce, Small Business and Entrepreneurship
Amends G.S. 20-116 to specify that it does not prevent the operation of passenger buses that are owned and operated by units of local government and have an overall length of 61 feet or less, including buses having two or three axels and operated either as a single vehicle or a combination of vehicles coupled together, on public streets or highways.

Bill: SB 577 - LOCAL GOVERNMENT FUNDING AGREEMENTS
Sponsors: Clodfelter (D37)
Status: 03/07/2007 – Senate Committee On Appropriations/Base Budget
:Amends GS 136-66.8 to authorize the Department of Transportation to enter into agreements with local governments to expedite projects on a street or highway that connects an interstate with another mode of transportation. DOT and the local government may determine the terms of the agreement, but the local government must fund 100% of the project at current prices and be reimbursed in future years when the project is funded by state or federal sources.