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LINC'ed IN: January 18, 2013 

Out and About in North Carolina

Governor McCrory Attends Advocacy Goals Conference -  Join your municipal colleagues January 24 at the Raleigh Convention Center to determine the Top 25 NCLM legislative advocacy goals and the Top 5 regulatory advocacy goals, and to hear from Governor McCrory about the upcoming 2013-14 biennium.  The Advocacy Goals Conference gets started with a pre-game social networking reception the evening of January 23 with confirmed attendance of more than 35 members of the General Assembly. On-site registration is available.

Local Government Retirement System Board of Trustees Approves Employer Rate Increases for 2013-14 - On Thursday (Jan. 17), the Local Government Retirement System Board of Trustees approved local employer rate increases, effective July 1, 2013.  The employer contribution rate would increase from 6.74% to 7.07% for general employees, and up to 7.28% for law enforcement officers.  The total additional cost for local employers is $18.3 million, filling actuarial losses within the system resulting from reduced market returns during 2007-2011.  Retiree groups were pushing for 2% cost of living increases for local retirees that would cost local units an additional $24 million in 2013-14, but the Board denied those requests at the urging of the League and instead mandated the actuarial required contribution. Contact: Paul Meyer 

Senate Leader Lays Out Tax Reform Proposal: Local Sales and Privilege Taxes Potentially At Risk On Wednesday (Jan. 16), Senate President Pro Tem Phil Berger set forth the Senate Republicans' plan for reforming the State tax code to improve North Carolina’s “competitive posture.”  The Republican proposal would eliminate State personal and corporate income taxes and the State business franchise tax.  To replace the $12 billion of revenue lost from these changes, the sales tax rate and base both would be increased.  The State and local sales tax bases would be expanded to include nearly 200 services to consumers (but not businesses) that currently are not taxed in North Carolina, but are taxed in at least one other state.  All current sales tax exemptions would be eliminated, including the exemption for prescription drugs and the State exemption for food.  The State tax rate would increase from 4.75% to 6.55%, and the local rate would be reduced to 1.5%.  This lower local rate is expected to produce the same amount of revenue statewide as the current rate of 2%, but individual counties could see a revenue gain or loss.  Senator Berger did not indicate whether a hold harmless for individual counties will be part of the proposal.  In addition to the sales tax changes, additional revenue would be generated by replacing the Deed Stamp Tax (0.02% of the sale price of real property) with a Real Estate Conveyance Tax of 1.05%.  This proposal already has generated opposition from the real estate community.  Finally, Berger proposed establishing an annual Business License Fee equal to 1.05% of a business’s assets or gross receipts.  While no mention was made of the local privilege license tax, it is possible that the establishment of such a fee could lead to calls for the elimination of the local tax.  The proposals are being termed a concept rather than a plan, and they would be implemented over the course of several years.  House leaders have not indicated whether they will support the Senate plan or develop one of their own.  Contact:  Karl Knapp

Environment Commission Pushes Back on Impaired Waters Proposal - In their first opportunity to review changes to the method by which the state evaluates waters for impairment, state environmental regulators expressed disappointment at the lack of detail and directed staff members back to the drawing board last week. Members of the N.C. Environmental Management Commission (EMC) hoped a document the N.C. Division of Water Quality (DWQ) employed to evaluate stream conditions for impairment -- called the "use assessment methodology" -- would contain more detail and description than previous versions. In delaying a vote on the methodology until their March meeting, EMC members asked DWQ staff to, at the very least, respond to the public comments offered. This opportunity for public comment and EMC review of the methodology had been a top regulatory priority of the League, which had pressed for this change for over eighteen months. Read more in this month’s edition of EcoLINC, the League’s environmental electronic newsletter. Contact: Erin Wynia.

EPA Allows Electronic Distribution of Water Reports - The U.S. Environmental Protection Agency (EPA) released a final interpretive memo that details how water utilities may distribute the mandatory annual Consumer Confidence Report electronically. The League and the National League of Cities submitted comments in favor of electronic distribution of these reports, and NCLM Executive Director Ellis Hankins advocated for this change in a meeting with White House officials this summer about federal regulatory reform efforts. The report, required by the federal Safe Drinking Water Act, lists the regulated contaminants in drinking water as well as health effects information related to a system’s violations of drinking water standards. Previously, EPA had required a hard copy of the report to be mailed to each system customer every year. Read background in this EcoLINC article. Contact: Erin Wynia.

What's Up in DC?

Possible Gas Tax Increase - Finding revenues to eliminate the projected $147 billion shortfall in Federal transportation funding over the next 10 years is a priority for State and local governments, and their efforts now have the support of the head of the U.S. Chamber of Commerce. During a press conference following his annual State of American Business Address, Chamber President Thomas Donohue said that it was time for the federal government to “quit fooling around” with the Transportation Trust Fund and increase the federal gas tax.  A recent estimate indicates that a five cent federal gas tax increase would be sufficient to cover the shortfall.  Contact: Karl Knapp

Coming Soon

NCLM Advocacy Goals Conference
January 24, Raleigh Convention Center, Raleigh   
January 23, Pre-Game Networking Social,
DoubleTree by Hilton  


General Assembly - Full Legislative Calendar

Mining & Energy Commission committees, January 24, 9:00 am, Archdale Building Ground Floor Hearing Room, Raleigh

Mining & Energy Commission, January 25, 9:00 am, Archdale Building Ground Floor Hearing Room, Raleigh

N.C. General Assembly reconvenes, January 30, 12:00 pm, Legislative Building, Raleigh

Nutrient Scientific Advisory Board, February 1, 9:30 am, Triangle J Council of Governments Meeting Room, Durham

Buffer Mitigation Rules public hearing, February 6, 7:00 pm, Archdale Building Ground Floor Hearing Room, Raleigh 

Buffer Mitigation Rules public hearing, February 12, 7:00 pm, Pitt Community College, Goess Multipurpose Room #137-139, Winterville  

State Water Infrastructure Commission, February 15, 10:00 am, Green Square, Raleigh

Ecological Flows Science Advisory Board, February 19, 9:00 am, Stan Adams Training Center, Jordan Lake Educational Forest, 2832 Big Woods Road, Chapel Hill