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Local Government Committee Explores Local Debt

The Joint Legislative Committee on Local Government met this week to hear presentations related to local debt issuance in North Carolina. Committee members present heard from a representative of the Local Government Commission about the unique role the Commission plays in the approval of debt issued by North Carolina's local governments. Perry James, Chief Financial Officer for the City of Raleigh, also spoke to the committee regarding Raleigh's debt program, including the many steps and opportunities for public input there are before debt issuances are brought to the LGC for approval. The committee also heard from the North Carolina Association of County Commissioners, attorneys involved in the bond process, and lenders, among others. They did not take any action or consider any legislation related to these issues. All of the presentations heard by the committee on Monday can be found here.
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Reps. Jordan, Moffitt, Malone Draw Challengers

Another week, another set of candidates announcing plans to run for the General Assembly in 2014. In the Asheville area, small business owner and former Assistant Vice Chancellor of UNC-Asheville Brian Turner declared his intention to run for the seat currently held by Rep. Tim Moffitt. On his website, Turner said, "To build a stronger community we need elected officials who understand the winner-take-all mindset that has infected Raleigh is not sustainable, and we need to be willing to work together, regardless of party, to achieve positive solutions to the challenges we face." In the Triangle, Knightdale businessman Brian Mountcastle announced that he would run for the State House seat now held by Rep. Chris Malone. According to the Raleigh News & Observer, in announcing his campaign, Mountcastle said, in part, "We need leadership in Raleigh who will focus on governing the state -- not a radical conservative agenda." In Boone, Sue Counts announced that she would challenge current Rep. Jonathan Jordan for the House seat in District 93.
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Local Governments Recommend Different Process for Sales Tax Refund Allocation Reviews

The legislature's Revenue Laws Committee heard concerns Tuesday about the current audit process for sales tax refund allocations between various local government jurisdictions. In his presentation, David Baker, Local Government Division Director in the Department of Revenue (DOR), described the complexity of verifying sales tax refund requests by eligible entities such as non-profits. Currently, local governments utilize private contingency fee-based auditors to perform this work, while DOR then reviews the work of the auditors. To minimize the costs to local governments, both county and municipal representatives on a DOR work group have recommended that DOR perform this service in exchange for a small percentage of local governments' sales tax revenue. However, legislators did not make a recommendation for any statutory changes at Tuesday's meeting.
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Efforts to Delay Flood Insurance Increases Stall in Congress

Members of both the U.S. House and Senate attempted to bring forward bills this week that would delay significant increases in property owners' flood insurance rates, but neither effort was successful. Property owners across the country either have been or soon will be subjected to higher flood insurance rates as a result of the Biggert-Waters Flood Insurance Reform Act of 2012. That act was passed to ensure the solvency of the National Flood Insurance Program, but as a result flood insurance rates are quickly increasing for many around the country. Legislators have introduced bills that would delay those increases and allow the Federal Emergency Management Agency to complete an affordability study before the increases take effect. However, an effort to bring such a bill to a vote in the Senate was blocked, and the sponsor of a similar but less controversial bill in the House withdrew his bill before it could receive a vote. That means that Congress will not take any action on this issue until at least after the holidays. The League is in support of NLC policy advocating for Representatives and Senators to pass legislation that would delay the flood insurance increases.
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Subcommittee Digs Deeper into Water, Wastewater Services

On the heels of an introductory water and wastewater service session last month, legislative members of a subcommittee studying the topic dug in deeper Tuesday. Hearing again from faculty members at the Environmental Finance Center, legislators continued their examination of water and wastewater systems' organization and fiscal conditions. As in the previous discussion, legislators' questions often centered on rates charged by systems and their corresponding fiscal health. Meanwhile, presenters counseled the subcommittee members against a one-size-fits-all method of delivering these services across the state, arguing that the different models of service delivery allow for tailoring to local circumstances. The subcommittee may make recommendations to the legislative Environmental Review Commission, an interim committee that may draft legislation for the 2014 Short Session that begins May 14. This particular study topic, included in last session's omnibus regulatory reform bill, was originally introduced by Rep. Tim Moffitt, the primary driver behind the law that forcibly transferred Asheville's water system to a regional wastewater system.
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League Stormwater Managers Provide a Perspective on Gravel

For the first meeting of a legislative subcommittee tasked with studying how governments treat gravel surfaces in the context of stormwater management, legislators heard from several League stormwater experts. Municipal representatives from Morrisville, Wilmington, Durham, and Wilson all offered their perspectives on the unintended consequences of legislative action on the subject last session. The study grew out of last session's omnibus regulatory reform bill, which excluded gravel from the definition of "built-upon area." This legislative redefinition ignored scientific reality of how gravel surfaces easily become compacted with foot and vehicle travel. Once compacted, the surfaces do not allow full infiltration of water, thereby increasing runoff into the state's waters. Practically, then, most gravel surfaces function the same as "built-upon areas" with buildings and other impervious structures on them. League members, who are held accountable for water quality impacts of runoff coming from impervious surfaces, did not support this redefinition. Tuesday, subcommittee co-chair Rep. Ruth Samuelson explained that the re-definition intended to address concerns of some coastal homebuilders who could not install gravel driveways on certain lots due to the way state law used to treat gravel. The subcommittee, she said, would work with the N.C. Environmental Management Commission in its temporary rulemaking to more specifically define "gravel" in state law.
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Watt Confirmed for FHFA, Could Mean Special Election

Rep. Mel Watt was confirmed by the U.S. Senate this week to be the next head of the Federal Housing Finance Agency. He will likely soon resign his Congressional seat to assume that position, kicking off what is expected to be a hotly contested race for his seat. Already at least six Democrats have announced their intention to run, including former Charlotte City Councilman James "Smuggie" Mitchell, current N.C. Senator Malcolm Graham, and current N.C. Representatives Alma Adams and Marcus Brandon. Further complicating matters is that voters in the 12th Congressional District could be facing two separate elections that would overlap with each other: one to fill the remainder of Watt's current term, and one for the full two-year term beginning in 2015. Given the possibility of a primary, runoff, and general election for both the remainder of this term and the full next term, voters could be asked to vote as many as six times for this seat between now and next November. Regardless of the outcome of the Congressional election, Rep. Brandon told the Greensboro News & Record this week that he was unlikely to run again for the N.C. House seat he currently holds.
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Legislators to Study Fees Paid to License Plate Agencies

After receiving an update on implementation of the combined vehicle registration and property tax collection system, or "Tax and Tag Together," the chair of the interim Revenue Laws Committee appointed legislators to a study committee authorized last session. For the study, legislators will examine the level of fees private license plate agencies may charge local governments for collecting locally-levied vehicle property taxes. Both counties and municipalities may levy a property tax on vehicles, and under the Tax & Tag Together program, those taxes are now collected at the same time as vehicle registration payments. The League opposed the bill authorizing increased fees to be charged by private license plate agencies, arguing that the bill did not ensure the agencies actually provided additional customer services in return for the increases. Study committee members include Sen. Ben Clark (chair), Sen. Rick Gunn, Sen. Jerry Tillman (advisory member and bill sponsor), Rep. Becky Carney, Rep. David Lewis, Rep. Edgar Starnes (advisory), and Rep. Ken Waddell. The study committee will hold its first meeting January 14.
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Thank You to LAC Members; Appointment Letters Coming

The League's General Government and Tax & Finance Legislative Action Committees met in Raleigh this week, bringing to a close the LACs' work for 2013. With that, the terms of some of the LAC chairs and members are coming to an end, and we wish to thank all of those departing members for their time and hard work over the past two years. Your feedback and perspective on city issues has been invaluable. Those of you who applied to serve on a LAC beginning in 2014 should be receiving a letter letting you know of your committee appointment in the near future. Keep an eye on both your email and your snail mail for the appointment letter, and the date by which you will need to reply to the letter either accepting or declining your appointment. If you have any questions about the LAC process, please contact League Governmental Affairs Assistant Cara Bridges.