Union bill to be heard - contact your House member

We understand that a bill to allow collective bargaining by public employee labor unions will be heard in the House Appropriations Committee next Wednesday, July 18. As we previously reported, HB 1583 – Restore Contract Rights To State/Local was unexpectedly given a favorable report by the House Judiciary II Committee last week. This bill would eliminate the current statutory prohibition on collective bargaining by public employee organizations that has been in place since 1959. A money provision was added to keep it eligible, which accounts for it going to Appropriations.

Please contact your House members this weekend, especially those on the Appropriations Committee (listed below), in opposition to this bill. Our members support equitable treatment of municipal employees but we oppose bills that would, in effect, force collective bargaining on municipal governments.

House Appropriations Committee
Rep. Michaux, Senior Chair; Reps. Adams, Alexander, Crawford, Haire, Jeffus, Tolson, and Yongue, Chairs; Reps. Allen, Allred, Avila, Barnhart, Bell, Blue, Bordsen, Boylan, Braxton, Brisson, Brown, Bryant, Church, Clary, Cleveland, Coates, Cole, Coleman, Cunningham, Current, Daughtry, Dickson, Dockham, Dollar, Earle, England, Fisher, Frye, Gillespie, Glazier, Goforth, Goodwin, Grady, Gulley, T. Harrell, Harrison, Hilton, Holliman, Holloway, Holmes, Hurley, Insko, Johnson, Justice, Justus, Killian, Kiser, Langdon, Love, Lucas, Martin, McAllister, McElraft, McLawhorn, Mobley, Moore, Neumann, Owens, Parmon, Pate, Pierce, Rapp, Ray, Samuelson, Saunders, Spear, Steen, Stiller, Sutton, Tarleton, Thomas, Tucker, Underhill, Wainwright, Walker, E. Warren, R. Warren, West, Wiley, Wilkins, Williams, Womble, Wray, Wright.

Medicaid tax swap advances in Senate
The Senate has rolled a new proposal to provide Medicaid relief to counties into a House bill. The Senate’s substitute for HB 1016 - State Medicaid Swap got a favorable report from Senate Finance on Tuesday of this week. It passed second reading on the Senate floor on Thursday and is expected to pass third reading on Monday evening.

Most news accounts have not addressed the proposal’s effect on municipal revenues, and we wanted to let you know that this latest version does hold cities and towns harmless and provides an adequate growth factor for the future, according to our preliminary analysis. There are some details we are still questioning, but here is the latest plan as we understand it so far.

The state would assume the counties’ share of Medicaid costs on a phased-in basis, ultimately assuming 100 percent of costs effective October 1, 2009. The state would take over the third one-half cent local option sales tax (Article 44) on a phased-in basis. The one-quarter cent of that tax that is distributed on a per capita basis would, in effect, become a state sales tax on October 1, 2008. The remaining one-quarter cent that is distributed on point of delivery would become a state tax effective October 1, 2009.

Cities and towns would be held harmless as follows: the N.C. Secretary of Revenue would reduce each county’s sales tax revenues by the hold harmless amount for each municipality of that county. The hold harmless for the first one-quarter cent tax repealed would be equal to 50 percent of the revenues from Article 40 sales tax revenues minus the tax on food. [Article 40 is a one-half cent sales tax distributed per capita.] When the second one-quarter cent is repealed, the hold harmless will be equal to 25 percent of Article 39 sales tax revenues minus the tax on food. [Article 39 is a one-cent tax distributed on point of delivery.]

Because both Article 40 and Article 39 sales tax revenues grow as sales increase, the hold harmless distributions will have a growth factor. The bill maintains the transitional hold harmless funds that were promised in 2002 when the last half-cent local option sales tax was authorized.

This may sound complicated, but this latest plan actually is much simpler than earlier ones, and reimbursement methods have growth based on the natural growth of remaining sales taxes.

The bill also proposes to change the method of distribution for the Article 42 one-half cent local option sales tax from per capita to point of delivery. This obviously would change the amount of revenues some county areas would receive and would affect municipal shares. We are checking to ensure that the hold harmless monies that will be distributed for the loss of the Article 44 one-half cent local tax are adjusted to compensate for the change in the distribution method for the Article 42 tax. We have some information to indicate that cities and towns would not lose any revenues from this change in distribution, but we are checking further.

If the distribution method changes for Article 42 sales tax revenues, the dispersal of the so-called “County 101” sales tax revenues would be affected. These are sales tax funds--some $268 million annually--that mostly come from catalog and Internet sales, for which the state cannot identify a “point of delivery.” We are working to ensure that cities and towns do not suffer losses as a result of any changes in distribution methods of these revenues.

This is an evolving issue, but we want to provide you with the latest information. We will keep you updated as things change. This proposal, overall, seems to leave municipal revenues intact while providing county governments with much needed Medicaid relief. Your League staff appreciates your hard work and continued contacts with your legislators on this important issue. It’s far from over, but this is a positive development.

Will the House accept this? Perhaps, no, because it does not include some provisions previously proposed by the House, such as a local option sales tax or land transfer tax for public infrastructure, subject to a referendum. We are continuing to push hard for that.

Partnership highlights revenue needs
On Tuesday the Partnership for North Carolina’s Future held a press conference to issue a report and call for more local revenue options and state investment in infrastructure. The Partnership is a coalition representing cities, counties, schools, housing advocates, environmental groups, and others concerned about meeting infrastructure needs as North Carolina faces explosive growth. League President Robert Partin, Mayor of Scotland Neck, emphasized the need for local options and local solutions, while League Executive Director Ellis Hankins said "If we fail to act, we will see a North Carolina that is bigger, not better." The Partnership urged the General Assembly to act this session with both local revenue options, such as a real estate transfer tax, and a substantial bond package to pay for roads, schools, water and sewer, and open space preservation.

Interbasin transfer bill discussed
A committee substitute for SB 1421 – Amend Interbasin Transfer Laws was discussed twice in the Senate Agriculture and Environment Committee this week, but the committee did not vote on the proposal. The new version requires the applicant to provide additional information, including a description of every available, planned or potential source of water in the receiving river basin and a description of existing, planned or reasonably foreseeable water transfers and withdrawals from the source basin. The bill would require enhanced public notification and informational meetings, a comprehensive environmental impact statement (with public hearing on its adequacy), and participation in mediation among the interested parties. It requires the Environmental Management Commission to make a draft determination on the transfer petition and hold public hearings on it. The transfer would have to meet additional criteria for the EMC to approve it, including that there are no reasonable alternatives and that the applicant will not resell any of the transferred water. The bill expressly states that projected future water needs in a receiving river basin are subordinate to projected future water needs in the source basin. As currently written, the committee substitute would apply to any application for an interbasin transfer that has not received final approval as of the effective date, including all administrative and judicial review.

It is not clear when the committee will return to the bill. We have already heard concerns from several municipalities about this complex issue. The League adopted a position statement earlier this year supporting further study by the General Assembly.

Gang bill heard
A committee substitute for SB 1358 – Street Gang Prevention Act was discussed this week in Senate Appropriations. A fiscal note was released indicating the potential impact on the prison system and no vote was taken. Last week’s press events in Salisbury and Greensboro were successful in drawing attention to the need to pass gang legislation this year. Legislators are beginning to hear more from local officials about the importance of combating the growing gang problem, not just in big cities but also in small towns and rural areas. This is a priority issue on the League’s advocacy agenda and that of the Metropolitan Coalition.

Solid waste bill
We anticipate that a committee substitute for SB 1492 - Solid Waste Management Act of 2007 will be heard in the Senate Agriculture and Environment Committee on Tuesday, July 17. Following a series of meetings with a large working group (including representatives of cities, counties, the private sector solid waste industry, state agencies, and environmental groups), the substitute bill is likely to have significant differences from the original. Among the issues in contention are a $2.50 per ton state tax on solid waste disposal, increased technical standards such as double liners in sanitary landfills and single liners in construction and demolition landfills, permit fees, and tighter restrictions on location of landfills. The League continues to be concerned about the potential cost to municipalities and is working to craft an acceptable version of the bill.

No competition bill
Please keep up the good work in opposition to the “No Competition Bill,” also known as HB 1587 – Local Government Fair Competition Act. The bill would sharply limit local governments' ability to create their own telecommunications networks and would prevent them from partnering with private telecom providers to establish broadband service. The bill is heavily backed by the telecommunications industry and is intended to discourage competition from local government in the provision of communications services. However, it is clear that the industry does not intend to provide service in certain areas and will not commit to serve entire communities. Local governments should have the ability to provide citizens with access to high-speed broadband service for the future economic development of our state. Rural and distressed urban areas should not be left behind.

The bill is currently in House Finance. We have heard from a number of municipalities that have adopted resolutions in opposition to the bill.

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 1370 - CLEAN WATER GRANTS
Sponsors: Wainwright (D12); Underhill (D3)
Status: SL 2007-185
With regard to funds from the Clean Water Management Trust Fund, clarifies that a planning grant or a technical assistance grant for a regional wastewater collection system or a regional wastewater treatment works is not subject to the high unit cost threshold.

General Government
Bill: HB 24 - SMOKING IN STATE GOVT. BUILDINGS/PROHIBITION
Sponsors: Weiss (D35); Glazier (D45)
Status: SL 2007-193
Prohibits smoking inside state government buildings. Enacts new G.S. 130A-498 authorizing local governments to restrict smoking in buildings owned, leased as lessor, or leased as lessee and occupied by the local government; and in any place on a public transportation vehicle owned or leased by the local government and used by the public.

Incorporations

Bill: HB 986 - BUTNER INCORPORATION
Sponsors: Crawford (D32)
Status: Passed House, referred to Senate Finance
Incorporates the Town of Butner in Granville County.

Bill: HB 1047 - INCORPORATE SNEADS FERRY
Sponsors: Grady (R15)
Status: Re-referred to House Finance
Incorporates the Village of Sneads Ferry in Onslow County, subject to a referendum.

Bill: HB 1191 - INCORPORATE EASTOVER
Sponsors: Lucas, M. (D42); Dickson (D44); Glazier (D45); Brisson (D22)
Status: Passed House, referred to Senate Finance
Incorporates the Town of Eastover in Cumberland County.

Local Bills

Bill: HB 279 - REGULATION OF GOLF CARTS/NORTH TOPSAIL BEACH
Sponsor: Grady (R15)
Status: SL 2007-204
Allows the town to adopt ordinances regulating golf carts and utility vehicles on public streets.

Bill: HB 513 - CHARLOTTE/TRANSIT PROCUREMENTS & CONTRACTS
Sponsor: Saunders (D99)
Status: SL 2007-205
Amends the city’s charter to allow the council to delegate to the manager the authority to determine whether the competitive proposal method is appropriate for public transit purchases. Allows city to let contracts for acquisition or maintenance of transit equipment or facilities in the manner prescribed by the federal government when the project is funded in whole or in part with federal funds.

Bill: SB 426 - VARIOUS CITIES AND TOWNS/JUNKED VEHICLES
Sponsor: Jenkins (D3)
Status: SL 2007-208
Increases maximum value in definition of junked motor vehicle to $500. Applicable to Ayden, Cornelius, Davidson, Eden, Greensboro, High Point, Huntersville, Reidsville and Spring Lake.

Bill: SB 427 - AYDEN AND BURGAW UNFIT DWELLINGS
Sponsor: Jenkins (D3)
Status: SL 2007-202
Authorizes the towns to order dwellings unfit for human habitation to be repaired or demolished after being closed for a period of six months.

Planning & Zoning
Bill: SB 490 – INDUSTRIAL MACHINERY - BUILDING CODE
Sponsor: Hoyle (D43)
Status: Re-referred to House Insurance
Provides that building code is not applicable to the regulation of the design, construction, location, installation, or operation of industrial machinery.

Bill: SB 670 - USE OF SOLAR COLLECTORS
Sponsor: Cowell (D16)
Status: Passed House
Preempts city or county ordinance that prohibits, or has the effect of prohibiting, the installation of a solar collector for water heating, active space heating and cooling, passive heating, or generating electricity for a detached single-family residence. Does not prohibit an ordinance regulating the location or screening of solar collectors provided it does not have the effect of preventing the reasonable use of a solar collector.

Retirement

Bill: HB 1025 - LOCAL GOVERN. RETIREMENT/PURCHASE OF SERVICE
Sponsor: Coleman (D39)
Status: Senate Calendar for 7/16
Amends provisions regarding purchase of credit in LGERS for periods of probationary employment. In the event an employer pays all or a part of the full actuarial cost, the employer may, at its option, pay such amount either in a lump sum or by increasing its "accrued liability contribution" for the remainder of its accrued liability period. In the event an employer has satisfied its accrued liability contribution, the employer may amortize its portion of the full actuarial cost over a period not to exceed 10 years.

Utilities

Bill: SB 3 - PROMOTE RENEWABLE ENERGY/BASELOAD GENERATION
Sponsor: Albertson (D10)
Status: Passed Senate, referred to House Energy
Makes each electric power supplier subject to a Renewable Energy and Energy Efficiency Portfolio Standard. For electric membership coops and municipalities, 3% of 2011 retail sales must be supplied by new renewable energy facilities or saved by implementation of energy efficiency measures. The percentage increases to 6% for 2014 sales and 10% for 2017 and thereafter.