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Contact Your Senators Regarding Privilege License Reform

Please reach out to your Senators in the coming days regarding reform of the local privilege license tax. The House this week gave final approval to a wide-ranging tax bill that includes a $100 per business cap on the local privilege license. That 54-page bill, HB 1050 Omnibus Tax Law Changes, passed the House and was referred to the Senate Finance Committee, though it has not yet been scheduled for a hearing. Meanwhile, the League continues to work with legislative leadership on alternative proposals that achieve the goal of privilege license reform that League members chose as one of their top advocacy priorities for this General Assembly session. Please let your Senators and Representatives know that the League and its membership want a reformed system that:

  • Addresses concerns about the inequity and complexity of the current privilege license tax structure;
  • Minimizes revenue losses and provides sufficient replacement revenue so that the pressure to fund the services businesses and citizens desire does not fall solely on the local property tax; and
  • Provides sufficient time before going into effect so that cities and towns have an opportunity to make revenue projections and adjust their administration of a newly reformed tax. The current $100 cap proposal, for instance, would extend the privilege license tax to thousands of currently untaxed businesses, and cities will need time to accurately identify and bill all of these businesses.

League staff will continue to discuss with legislators multiple ways of addressing concerns about the privilege license tax. Please talk directly with your legislators as well about League members' desire to achieve reform of the current privilege license structure. More on the privilege license discussions can be found in the Charlotte Observer and Asheville Citizen-Times. Contact: Chris Nida

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Regulatory Reform Provision Jeopardizes Approved Water Supplies

A new regulatory reform provision introduced this week could undo approvals of previously-approved water supplies. Section 3.4 of SB 734 Regulatory Reform Act of 2014, tentatively approved by the Senate yesterday, creates uncertainty as to whether affected public water supply intakes would remain approved, jeopardizing economic development activities and leaving those local governments without the ability to guarantee a steady supply of clean drinking water to businesses and residents. The provision would allow any person to bring a rulemaking petition to repeal a water supply reclassification approved after January 1, 2012. In response, the provision would require the state's environmental regulatory body to downgrade necessary water body protections for those waters. In addition, the provision would require all affected local governments to repeal applicable water supply ordinances. At a minimum, the provision applies to projects in Boone, Roxboro, Greensboro, Maiden, Williamston, Martin County, Johnston County, and Polk County. After a final Senate vote, scheduled for Wednesday, the bill would move to the House for its consideration. Contact: Erin Wynia
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Property Tax Revenue Cap Removed from Fracking Bill

Senators approved an amended version of the Energy Modernization Act (SB 786) yesterday that removed a previously-proposed 8% property tax revenue cap and instead replaced it with new language calling for a study. During committee debate, Sen. Tommy Tucker expressed concern that the new language could still be construed as a property tax cap, but bill sponsor Sen. Bob Rucho defended the study, stating that the goal of the cap was to ensure that local governments shared the prosperity from oil and gas development with the community. Before voting to send the bill to the House, the Senate made no changes to another provision of the bill of interest to municipalities. That section would invalidate local ordinances that prohibited or had the effect of prohibiting hydraulic fracturing activities, though it contained language allowing ordinances that were generally applicable to all development. During the Senate floor debate, the body voted down a floor amendment offered by former Rockingham mayor Sen. Gene McLaurin to remove the section completely. Sen. McLaurin argued, "Many of us come from local government backgrounds, and we know how important it is to make good decisions about our communities. Local people need to have a voice in the process." Read more about the debate on this provision from WRAL. Contact: Erin Wynia

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Bill Eliminating City Tree Ordinances Filed; Language Expected to be Removed

Legislation was filed this week that includes language that would eliminate city and county tree ordinances statewide, but that language is expected to be changed if and when the bill is considered. HB 1191 Authority to Adopt Local Ordinances mirrors language previously recommended by the Agriculture and Forestry Awareness Study Commission. However, numerous legislators have repeatedly told League members and League staff that that provision would not pass as written. We thank the many legislators who have committed to not supporting this effort, and extend our thanks to all the League members who responded to our previous communications on this issue and reached out directly to their Representatives and Senators to express their concerns. Contact: Erin Wynia
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Reps. Collins and Ross File League-Supported Pension Spiking Bill

Legislation to protect the fiscal integrity of the Local Government Employees Retirement System (LGERS) by reducing the impacts of pension spiking has been filed by primary sponsors Representatives Jeff Collins and Stephen Ross. HB 1195 Fiscal Integrity/Pension-Spiking Prevention -- which the League has been working on for several months in conjunction with the bill's sponsors, the Treasurer's Office, and the Association of County Commissioners -- has been referred to the House Committee on State Personnel. The League's Board of Directors voted this spring to make addressing pension spiking a League Municipal Advocacy Goal for the 2014 session in order to help keep the state's local government retirement system among the best-funded and most well-managed systems in the country. This bill, and its responsible treatment of sizeable, late-career salary spikes, would achieve that goal. The League thanks the bill sponsors for championing this important issue. More on the legislation can be found in the News & Observer. League Contact: Whitney Christensen
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Environmental Ordinances Measure Carries Over to Reg Reform Bill

The Senate carried over a League-supported provision to remove a de facto moratorium on enactment of local environment ordinances when it unveiled its first pass at an omnibus regulatory reform bill this week. SB 734 Regulatory Reform Act of 2014, tentatively approved by the full Senate yesterday, topped out at 62 pages that contained dozens of changes to existing state laws, many of them environmental. One provision of particular concern to cities and towns would undo previously-approved water supply approvals (read more in "Regulatory Reform Provision Jeopardizes Future Water Supplies"). However, the bill also included several provisions supported by the League, including one that would allow renewable energy project leases for a term of 25 years, and another that would switch responsibility for issuing going-out-of-business licenses from a municipal clerk to any officer of the city. Other topics of interest to municipalities included provisions regarding local regulation of fertilizers, interbasin transfer studies, environmental program self-audit procedures, and administrative procedure changes. The final Senate vote on the bill is scheduled for Wednesday. If approved then, the bill would move to the House for consideration. Contact: Erin Wynia
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Second Annual LAC Lobby Days a Success

This week, members of all three of the League's Legislative Action Committees (LACs) visited Raleigh to participate in the second annual LAC Lobby Days event. On Tuesday, the Planning & Environment LAC met with legislators, discussing concerns related to municipal tree ordinance authority and control over utility systems, among other items. On Wednesday, the Tax & Finance LAC and General Government LAC joined legislators to discuss issues including privilege license reform, the proposed property tax revenue cap, and aesthetics controls. The League would like to extend a special thank you to all LAC members who participated and to all legislators and legislative staff for joining the committee in discussing ideas about these critical issues that impact municipalities. Contact: Cara Bridges

From left: Assistant to the City Manager for Legislative Affairs Tony McEwen, Wilmington; Mayor Walt Eccard, Shallotte; Director of Financial Services John Frye, Pinehurst; and Town Manager Adam Mitchell, Fuquay-Varina

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Senate Sends Aesthetics Bill Back to Rules Committee

Rather than engaging in debate, Senate leaders referred HB 150 Zoning/Design & Aesthetic Controls back to the Senate Rules Committee Monday. The bill, which had been calendared for full Senate debate Monday night, had previously been in the Senate Rules Committee since April 2013. The measure would prevent municipalities from imposing design and aesthetic controls on most one- or two-family dwellings. The types of controls that would be prevented by this bill included requirements related to exterior building color, roof style, location of windows and doors, and the number and types of rooms in the house. Municipalities often use these types of requirements to preserve the character of existing neighborhoods and bolster the compatibility of new development, furthering economic development in their communities. Contact: Erin Wynia
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LGERS Contribution Percentage for LEOs Incorrect on Rates Notice

Cities and towns that participate in the Local Government Employees Retirement System (LGERS) recently received a notice of contribution rates from the Treasurer’s Office with misquoted employer contribution percentages for Law Enforcement Officers (LEOs). The correct rate, as originally reported by the League, is 7.41% for LEOs. The chart below shows the FY 2014-15 contribution rates for local governments. The numbers do not reflect a cost of living adjustment (COLA) for retirees, as the COLA was rescinded by the LGERS Board at their April meeting. Municipalities should expect to receive a corrected statement from the Treasurer’s Office within the next two weeks. Contact: Cara Bridges

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Local Deannexation Bill Not Supported by Town

The only local deannexation bill filed this week is not supported by the current board of the affected town. HB 1127 Maggie Valley Deannexation would remove a specific parcel from the Town of Maggie Valley's corporate limits. A majority of the town's current council members do not support the bill, and the town did not request that it be filed. The League opposes the bill, as it has in the past with other local deannexation bills not supported by the local communities involved. Another annexation bill filed this week, HB 1155 Pinehurst Annexation, was requested by the Village of Pinehurst. Contact: Chris Nida
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Legislation Would Extend Historic Rehabilitation, Film Tax Credits

Representatives Susi Hamilton, Frank Iler, Ted Davis and Becky Carney have introduced a bill that would extend the state's historic rehabilitation and film tax incentives, both of which are currently set to sunset at the end of this year. The League membership chose the extension of both credits in its Municipal Advocacy Goals, and League staff members are already working with the sponsors of HB 1142 Modify Film/Historic Rehab Tax Credits and other stakeholders on support for the legislation. Details of Gov. Pat McCrory's proposed changes to the historic rehabilitation and film tax credits became public when SB 842 Governor's Budget was filed late yesterday. The League will have more on the Governor's proposals as the budget makes its way through the legislative process. Contact: Whitney Christensen
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Judge Hears Asheville Water Case

Judge Howard Manning heard arguments today in the ongoing Asheville water litigation. The City filed the suit last year after Governor Pat McCrory allowed a bill forcing the transfer of the City's water system to a regional wastewater system to become law without his signature. The City sued the State to reverse the legislation; the water system transfer has been on hold pending the outcome of the case. Charlotte mayor and attorney Dan Clodfelter will argue on behalf of the City today along with Ron Payne. For details on this case within the context of the unique history of this decades-long water dispute, read "How politics, population shaped Asheville's water debate" (Citizen-Times). Contact: Kim Hibbard
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Moped Insurance and Registration Bill Filed in House

Representatives Phillip Shepard, Rayne Brown and Chris Millis have filed a bill that would require mopeds to be registered with the Division of Motor Vehicles, and for moped operators to obtain insurance policies. If passed, HB 1145 Insurance & Registration Required for Mopeds would achieve a 2013-14 League Municipal Advocacy Goal. League members chose increased moped regulation as one of their top advocacy priorities last year after hearing concerns from law enforcement officers that these unregistered vehicles were increasingly being used in the commission of crimes. The League thanks the bill sponsors for their leadership on this issue. Contact: Whitney Christensen.