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Local Sales Tax Legislation Moves Through Senate

Legislation that would scale back local-option sales tax authority for a handful of large counties moved through the Senate this week, despite opposition from public and private-sector groups. Opposition included concerns raised by League staff that HB 1224 Local Sales Tax for Education/Economic Development could limit the availability of future revenue options for all of local government. Erin Wynia, the League's Legislative and Regulatory Issues Manager, told members of the Senate Finance Committee that the legislation takes into account only one half of local government when it comes to who funds economic development, failing to consider the role that municipalities play in job creation.

The bill would cap local sales taxes at 2.5 percent, while expanding how the revenue could be used for many counties. As originally constructed, it would have permitted counties not currently at the cap to choose between raising taxes for either educational, transportation or mass transit purposes, requiring them to select just one of the uses. The Senate reworked the bill to allow the taxing authority to be used for general purposes, public education or mass transit, allowing more flexibility for most counties. Besides the local sales tax changes, the legislation provides money for industrial recruitment incentives for the Department of Commerce. 

The Senate voted 32-16 for the legislation, over the objections of urban legislators, who argued that it remained too restrictive and that the cap would leave large counties with less revenue options. Four counties -- Wake, Forsyth, Guilford and Mecklenburg -- would lose the authority to tax themselves up to 2.75 percent. Mecklenburg, which is now at the proposed cap of 2.5 percent, had planned an advisory referendum this fall to consider another quarter cent tax to fund education. The legislation would not allow that. Before the final vote, senators narrowly rejected an amendment that would have pushed the cap for all counties to 2.75 percent.  

The changes softened opposition from the N.C. Association of County Commissioners, which referred to the bill as "greatly improved" but still expressed concerns that the cap would limit counties' options in the future. As the bill moves to the House, League staff will continue to press legislators over concerns that the bill, as currently constructed, has the potential to hurt municipalities' future revenue options and does not represent a comprehensive approach to local funding needs. Your engagement with legislators regarding this bill is having an effect and will continue to do so now that it is before the House. Thank you for your help on this vital issue. You can read media coverage about the bill here and here. Contact: Paul Meyer

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McCrory Tries to Move Budget Talks

The General Assembly appeared to move closer to a budget agreement and adjournment this week, as legislators toned down the rhetoric about competing budget plans and legislative leaders held several meetings to try to move negotiations forward. Governor Pat McCrory and Senate leaders met privately on Tuesday, and the Governor took the unusual step of dropping by the Legislative Building on Thursday. Senate Majority Leader Harry Brown called the dialogue "good" even while saying that the meeting with McCrory had produced no agreement.

Legislative leaders also decided to hold floor sessions on Friday, a sign that they were trying to wrap up the session. The biggest sticking points in budget negotiations remained how much to raise teacher pay and whether to lay off teaching assistants in order to acheive any pay hike. Contact: Scott Mooneyham

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Senate Passes League Sponsored Government Purchasing Bill

The Senate gave its approval yesterday to a piece of omnibus legislation that would solve an administrative burden that cities and counties have been struggling with since the passage of last year's HB786 RECLAIM NC Act. HB369 Criminal Law Changes would remove the requirement that cities and counties determine whether their contractors and vendors are compliant with the state's E-Verify laws before making any purchase or contract, regardless of size or type. Instead, local governments would only have to make sure that their contractors are complying with the E-Verify laws that govern public contracts in the formal bidding range.

Although the bill passed second reading on the Senate floor last Thursday, it was referred back to the Senate Committee on Rules earlier this week, where three criminal related provisions were amended. The vote yesterday pushed the bill to the House, which will now consider whether to concur with Senate changes. The House has scheduled the bill for consideration on Monday. The League would like to thank Senator Thom Goolsby, Senator Floyd McKissick and Representative Harry Warren for working with us to resolve this issue this session. More information on the local government E-Verify requirement can be viewed here. Contact: Whitney Christensen

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Legislators Rewrite Stormwater Laws to Favor Company

In just one week, both the House and Senate approved a bill designed to relax state building code and stormwater regulations. While the provisions applied statewide, during debate on the bill yesterday, House members spoke about the advantages it would offer Ashley Furniture, a company currently redeveloping a manufacturing site in Davie County. Despite targeting the bill's provisions to this one project, the bill contained two distinct stormwater provisions, including one that only applied in the Jordan and Falls watersheds. The League did not support these provisions because they indirectly affected how cities implement stormwater programs pursuant to state and federal mandates. Because the bill would result in cities placing additional requirements on developers that the State would no longer make, it increased the prospect of cities being accused of "over-regulating." However, under their stormwater permits, cities bear a legal responsibility to clean up water bodies to a higher level not required of the State. In some cases, placing additional requirements on developers represents the most cost-effective means of achieving those water quality mandates.

Also this week, before giving its final approval to this bill, the Senate removed provisions it had added just a week earlier in another attempt to de-regulate gravel from stormwater control laws. The League supported this move, as it threatened to trump an agreement reached on the issue during an interim legislative study. The bill now heads to the Governor for his signature. Contact: Erin Wynia

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SolarBee Technology Deployed on Jordan Lake

The controversial two-year legislative pilot project to use nutrient-scrubbing technology in Jordan Lake was implemented this week. The SolarBee devices were deployed in the Haw River and the Morgan Creek arms of the lake. The SolarBee project, funded in last year's budget, grew from years of legislative frustration that the Jordan Lake Rules imposed significant compliance costs on local governments with little evidence of improvement in the lake's water quality. SolarBee is a specific technology that aerates water, scrubbing it of nutrients in the process. The state's project sought to determine whether the technology could work on a large enough scale to prevent the growth of harmful algae in the lake, which are encouraged by the presence of nutrients. In addition to municipalities in the Jordan Lake watershed, dozens of other cities and towns across the state must pay for programs to remove nutrients from wastewater and stormwater discharges into state waters, a costly undertaking for many of them. Read more coverage from the News and Observer. Contact: Sarah Collins

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House Votes in Favor of League Reclaimed Water Goal

House members voted in favor of one of the League's major water policy goals yesterday, approving a conference committee version of SB 163 Reclaimed Water as a Source Water. The bill now requires a similar vote by the Senate and the Governor's signature to become law. The League thanks Rep. Andy Wells for his leadership on this issue. The legislation expands the ability of municipalities to recycle reclaimed water to public water supplies. The water systems could then treat the combined water to drinking water standards. Reclaimed water is a highly treated wastewater and can be safely utilized to augment existing water supplies. The practices authorized by the bill would be unprecedented in North Carolina and would be subject to regulation by the N.C. Environmental Management Commission. Read more about this bill in this month's edition of EcoLINC. Contact: Erin Wynia
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Action Taken on City-Related Measures

Legislators continued to take action on several other city-related measures this week. Here is a recap of actions on those bills, along with links to previous League coverage of the issues.

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Pension Spiking Legislation Ratified and Sent to Governor

The Senate voted 34-15 on Tuesday to give final approval to  HB1195 Fiscal Integrity/Pension Spiking Prevention. Already unanimously passed by the House last month, the legislation has  been ratified and sent to the Governor for his signature. The legislation would achieve a 2013-14 League Municipal Advocacy Goal by mitigating the impact of significant, late-career salary spikes on the state and local government retirement systems. The bill also would change the employee vesting period for the Teachers and State Employees Retirement System from 10 years back to 5 years. The League was pleased to be able to work with Representative Jeff Collins, Representative Steve Ross, the Office of State Treasurer Janet Cowell and the N.C. Association of County Commissioners on this important legislation. Contact: Whitney Christensen
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NC Cities Rank High for Business and Jobs

Raleigh, Charlotte, Durham and Asheville all ranked high in the latest Forbes rankings of the "Best Places for Business and Careers." In a look at the 200 largest metro areas in the country, Raleigh ranked No. 1 in the annual analysis. The list is compiled by examining jobs-related data, the cost of doing business, regulatory hurdles, income growth, the cost of living, educational attainment, and quality of life factors. Charlotte came in 12th in the ranking, Durham was 26th, and Asheville 34th. In analyzing Raleigh's ranking, Forbes cited the city's high number of high-tech workers, the number of start-up companies since the 1970s, and the high level of projected job growth through 2016.  
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Moped Bill Headed to Conference After House Votes Not to Concur

By a vote of 54-51, the House voted yesterday not to concur with the version of HB1145 Insurance & Registration for Mopeds passed by the Senate last week. The House appointed conferees who now presumably will work with Senate conferees to negotiate a compromise bill between the two chambers. If enacted, the legislation as written will achieve a 2013-14 Municipal Advocacy Goal by requiring North Carolina moped owners to register and insure their vehicles. However, the version originally passed by the House did not include the insurance requirement in the Senate version of the bill, and several House members objected to that provision's inclusion before the House voted not to concur. The League pursued this legislation after learning from League membership of the increased use of mopeds in the commission of crimes. We would like to thank Representative Phil Shepard, Representative Rayne Brown and Senator Tom Apodaca for their assistance in getting this important legislation through their respective chambers. Contact: Whitney Christensen
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Condolences to the Family of Rep. Jim Fulghum

The League extends condolences to the family of Representative Jim Fulghum, who died over the weekend after a brief battle with esophageal cancer. Following his diagnosis, Representative Fulghum, 70, had withdrawn from the race to replace retiring Wake County state Senator Neal Hunt. Representative Fulghum had won the Republican primary for the seat in May. A retired neurosurgeon and Gulf War veteran, he was serving his first term in the House. House members honored Fulghum on Thursday, approving a resolution taking note of his many accomplishments and remembering him as someone who cared deeply about helping others as a physician and legislator. "Jim was a good man, and this body is not as good a place with him gone," said Representative Andy Wells. More on the life of Representative Fulghum can be read here.      
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Cities Express Support of Updated Water Quality Standards

The  N.C. Environmental Management Commission (EMC) held two public hearings last week regarding the state's proposed changes to water quality standards, a rulemaking package known as the "triennial review." The League membership selected the triennial review as one of its top regulatory goals because of the impacts the standards have on wastewater treatment costs, as well as on the growth of business and industry in communities. The triennial review is a process mandated by the federal Clean Water Act. It directs states to review their surface water quality standards every three years. Municipalities were well represented at the hearings. Representatives from Cary, Fayetteville PWC, Goldsboro, Raleigh, and Winston-Salem spoke, expressing support of the proposed changes as representing a good balance of environmental protection but without putting unnecessary costs on the regulated community. Contact: Sarah Collins.

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Oil and Gas Rules Public Comment Period Open, Hearings Announced

Last week, public hearing dates and public comment period regarding the proposed rules to regulate oil and gas exploration and development were noticed in the NC Register. The N.C. Mining and Energy Commission (MEC) is seeking public comments from July 15 through September 15 and has distributed this document with information regarding the hearings and written comments. Public hearings were scheduled for:

  • Raleigh, NCSU McKimmon Center, August 20, 10-2
  • Sanford, Wicker Civic Center, August 22, 5-9
  • Reidsville, Rockingham County High School, August 25, 5-9

The MEC held an impromptu meeting yesterday to discuss the possibility of holding a fourth hearing in the western part of the state. This was in response to the many requests commissioners received from citizens requesting an opportunity to be heard closer to where they live. The MEC unanimously voted to hold an additional public hearing on September 12 at Western Carolina University (John W. Bardo Fine & Performing Arts Center). The League plans to submit comments regarding the effects of the proposed rules on municipalities. Contact: Sarah Collins.