With flood of bills, concentrate on priorities

This 2007 legislative session already stands out, if just for the volume of bills that have been introduced. The General Assembly's bill drafting section reported, at one point, that requests for bills was up 36 percent from the previous year. The League is following nearly 1,000 bills that affect municipal operations, authority or revenues.

With a crossover deadline of May 17, many of these bills must pass either the House or the Senate in the next six weeks in order to remain eligible. The legislative pace will become hectic in the next few weeks leading up to the deadline.

The League membership adopted an advocacy agenda last year to focus on priority goals, and we suggest that your hometown lobbying efforts between now and the crossover deadline be focused on key goals, as well as a few issues with significant impact on your authority and revenues.

Here are summaries of developments in these key areas.

Infrastructure Funding

Issue: Critical water, sewer, stormwater and transportation needs that cannot be met solely at the local level (counties also have school construction needs).

Solutions: Dedicated, permanent revenue source such as real estate transfer tax; bond issue to meet short term needs.

Bills : Number of bills to provide local option transfer taxes; local option sales taxes, or a local option menu – some provide revenues only to counties. (See Local Revenues section also.) Several proposals for water and sewer and school bonds.

What you need to do: Our message is simple: Don't let North Carolina crumble. Talk with your legislators about your city or town's infrastructure needs – be specific. Tell them you need a permanent revenue source and bonds. We support a real estate transfer tax – a tax that the General Assembly previously has authorized for seven counties. We believe that a revenue source based on growth is reasonable. The costs of city and county infrastructure must come from somewhere--would your citizens rather pay increased property taxes on an annual basis, or a small percentage upon sale of property? There may be other possibilities, but the need is real and and new revenues must be found.

Local Revenues

Issue: A number of bills would provide authority for individual counties to levy an additional sales tax, and several provide that authority statewide. Many of these bills, however, do not provide a share of the proceeds from the additional taxes for municipalities. This week, Rep. Edith Warren introduced HB 1317 – One-Cent Local Option Sales Tax, which would give counties authority for an additional one-cent sales tax and repeal the prohibition against county funding of roads. The proceeds could be used for capital purposes, including roads, but counties are not required to share proceeds with municipalities.

On a related note, legislation ( SB 1484 – Sales Tax Medicaid Swap ) has been introduced that would involve a “sales tax swap.” The state would assume the counties' Medicaid financial burden, and counties would give up half of the first one-cent local option sales tax (Article 39) and all of the first half-cent local option sales tax (Article 40). These would become state sales taxes. Counties would be required to hold cities and towns harmless for lost sales tax revenue based on 2006-07 levels with a reimbursement. Counties would have the authority to levy a new, additional one-cent local option sales tax but would not have to share proceeds of this new tax with municipalities. The League's preliminary analysis of this bill reveals several major concerns, including the fact that cities and towns would lose hundreds of millions of dollars in sales tax revenue because reimbursements would be frozen at 2006-07 levels. Municipalities also know from bitter experience that dependence on reimbursements is not desirable.

What you can do : Please talk with your legislators to let them know that if they are going to provide authority for any new local revenues, cities and towns must have an equitable share. We are working with our counterparts at the Association of County Commissioners to craft a balanced legislative package that will address critical needs and provide an equitable share of revenue between cities and counties. The counties are focusing on Medicaid relief as well as infrastructure funding.

Annexation

Issue: Nearly 20 bills, some local and some statewide, have been introduced that would either limit or eliminate municipal authority for city-initiated annexations. Those opposed to annexation are saying that the League is keeping this issue bottled up and that the annexation issue (proposed restrictions on annexations, that is) should be heard and debated in the General Assembly.

What you can do: Contact your legislator and ask him or her to support your municipal residents by protecting municipal annexation authority. Annexation authority allows the cost of providing services to be shared more equitably by all those who benefit from those services. Ask your legislators to support North Carolina 's annexation statutes, which have allowed municipalities to grow and remain strong.

Municipal Authority

There are too many bills to mention that would preempt or impede municipal authority or impose unfunded mandates on local government. We'll highlight a few of these in the remainder of the Bulletin below.

Landfill requirements and state tip fee

Companion bills HB 1233 (Reps. Pryor Gibson, Lucy Allen and Pricey Harrison) and SB 1492 – Solid Waste Management Act of 2007 (Sen. Dan Clodfelter) propose a number of changes to the regulation of solid waste disposal that may impact municipalities. The legislation would impose a $2 per ton state tip fee on the disposal of municipal solid waste in any landfill. It would implement very high new permit fees for municipal solid waste landfills, construction and demolition landfills, composting facilities, and others. The bills also specify a leachate collection standard and require double liners in municipal solid waste landfills and a liner system in construction and demolition landfills. We have not yet seen a fiscal note, but based on early estimates provided to us by several municipalities, this proposal could have serious fiscal impacts on local governments and solid waste customers. Please forward your comments to Anita Watkins or Kim Hibbard at the League office, awatkins@nclm.org or khibbard@nclm.org or fax to 919-733-9519.

Apartment owners' proposals

We are concerned about two proposals introduced at the urging of the Apartment Association and ask for your immediate feedback. Companion bills HB 1011 (Rep. Pryor Gibson) and SB 1507 - Housing Conditions/Inspections (Sen. Julia Boseman) amend the minimum housing and building inspection statutes to require probable cause before cities can inspect for unsafe, unsanitary or hazardous conditions in residential and nonresidential buildings. This constitutes a serious erosion of local governments' ability to investigate, address and eliminate, where appropriate, dangerous structures, dwellings unfit for human habitation, and abandoned buildings. Under current law, a public officer can inspect a building or structure when there is "reason to believe" that certain conditions exist. This could be based on external conditions which indicate, within reason, the existence of violations on the inside. The bills' imposition of a higher standard, requiring actual knowledge on the part of the inspector before inspection, will likely result in fewer inspections and substantial delay in a municipality's ability to protect the citizenry by addressing hazardous buildings and structures. The League's advocacy agenda seeks expanded authority to deal with dilapidated buildings, and this proposal would do just the opposite.

Companion bills HB 1229 (Reps. Pryor Gibson and Tim Moore) and SB 1133 – County/City Solid Waste Collection (Sen. Dan Clodfelter) require municipalities and counties to provide a “reasonably equitable” level of solid waste collection services to single-family and multi-family dwelling residents. This means that if collection is funded by the property tax, the municipality cannot charge the multi-family housing a fee that is not also charged to single-family dwellers. If collection services are an enterprise operation, the fee schedule must reflect the level of services provided. We have already heard from some of you as to how this proposal would affect your garbage collection operations, but we need more information. Do you now provide collection services at apartments and other multi-family dwellings? How much would it cost if you are required to provide the same service to apartment complexes that you now provide to single-family homes? Please forward your comments to Anita Watkins or Kim Hibbard at the League office, awatkins@nclm.org or khibbard@nclm.org or fax to 919-733-9519.

New face in the legislature

Welcome to Representative Tricia Ann Cotham, who fills the seat left vacant by the resignation of former House Speaker Jim Black. Rep. Cotham is a former school administrator and we look forward to working with her.

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.

INCORPORATIONS

HB 1147 -Incorporate Rougemont

Wilkins (D55)

03/29/07 – House Committee on Finance

Incorporates the Town of Rougemont in Durham County , subject to a referendum to be held 60 to 120 days after the bill becomes law.

HB 1191 Incorporate Eastover

Lucas, M. (D42); Dickson (D44); Glazier (D45); Brisson (D22)

03/29/07 – House Committee on Local Govt I

Incorporates the Town of Eastover in Cumberland County , effective when it becomes law.

HB 1199 Incorporate Hampstead/Moratorium

Justice (R16)

03/29/07 – House Committee on Local Govt I

Incorporates the Town of Hampstead in Pender County , subject to a referendum on November 4, 2008. Prohibits any other municipality from city-initiated annexation of any territory in Hampstead prior to the date of the incorporation referendum.