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Draft Legislation Would Limit Local Privilege License to $100 Per Business

At its Tuesday meeting, the General Assembly's Revenue Laws Study Committee was presented draft legislation that would significantly reform the current local privilege license tax. Under the terms of the draft legislation -- titled the "Fair & Flat Local Business Tax" -- all current caps and exemptions related to the privilege license tax would be eliminated, but the tax would be limited to a flat fee of up to $100 per physical location of a business.

Along with the draft legislation, committee members were also presented with legislative staff's fiscal analysis of the bill's impact. A city-by-city analysis of the bill's impact can be found here, while the legislation's fiscal note can be found here. The legislative analysis indicates that this legislation would cost municipal governments anywhere from $19.3 million to $39.9 million, depending upon how many municipalities implement the tax and at what level. The League is continuing to work with legislative staff on these estimates.

Legislators raised questions regarding the legislation, but no votes were taken at this meeting. Questions included how the revenue loss from this bill compared to the revenue municipalities gained from last session's tax reform and Amazon's recent decision to collect sales taxes in North Carolina; how the $100 per business fee was determined; and a note that the bill impacted not only large cities but also rural communities as well. The League has been working with legislators on this issue on behalf of all of North Carolina's cities and towns for months and will continue to do so. If the Committee votes to recommend this legislation to the 2014 Short Session of the General Assembly, the bill will then be considered as would any other piece of legislation. The League will be involved with the issue throughout. If you have any questions regarding the local privilege license, please contact League Policy & Communication Specialist Chris Nida.

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Fourth Set of Nutrient Plan Comments Press for More Resources

In the fourth set of comments the League submitted on the state's Nutrient Criteria Development Plan (NCDP), the League recommended that the Department of Environment and Natural Resources (DENR) dedicate more resources to what is expected to be an intense nutrient management strategy effort. The NCDP, a roadmap for state regulators to use when developing water quality strategies such as the Jordan Lake Rules or Neuse Rules, is due to the U.S. Environmental Protection Agency at the end of the month. The latest draft of this plan included many features suggested by the League in previous comments, such as an emphasis on site-specific strategies rather than a one-size-fits-all solution. However, with this latest plan, the League pressed DENR to commit more cross-departmental staff time and expertise to support tasks listed in the plan, especially for a proposed Advisory Council. The League members selected the issue of nutrient management as their highest regulatory priority because municipalities assume a primary responsibility for implementing the requirements of the federal Clean Water Act. Read more about the evolution of the state's NCDP in this June 2013 EcoLINC article.
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League Urges Duke to Modernize Streetlight Rates

In a filing submitted Monday, the League urged Duke Energy Carolinas (Duke) to adopt a modernized streetlight rate schedule and work collaboratively with cities on details of a new tariff. The filing was made as part of Duke's ongoing efforts to comply with a component of the N.C. Utilities Commission (NCUC) order in last fall's rate case. In the Order, the NCUC required the company to develop a streetlight rate for that would make it financially feasible for municipalities to swap out old streetlight technologies like high-pressure sodium vapor or metal halide lights for more energy-efficient technologies such as LED. Duke proposed a new tariff in December, but the League objected, arguing that proposal did not serve as an incentive for cities to upgrade their streetlight technology. With its latest round of comments, the League requested that the NCUC order Duke to:

  • File a second LED streetlight rate schedule that would address replacement of high-pressure sodium vapor lights and metal halide lights
  • Model the tariff on an existing one for the Duke Energy Progress service area, which includes a customer ownership option for the light fixture as well as a variable rate component that allows customers to take advantage of decreasing technology costs
  • Provide to the NCUC Public Staff data and other information used by the company to develop the rates
  • Meet with municipal customers on a quarterly basis to continue collaborative efforts to modernize the company's streetlight rate schedules

Duke may comment on the League's filing before March 10. At the same time, the League and staff members from League member municipalities are planning meetings with Duke to discuss aspects of the utility's streetlight rate design. The League's continued involvement in this issue is support by the 100-plus members of the Municipal Energy Group.

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League Announces Hiring of Three Positions

The League is excited to announce three staff changes this week. First, Chris Nida has been named the League's Director of Research and Policy Analysis. Chris has been a part of the League's Governmental Affairs team for over five years, first as the League's Research Analyst and then as Policy & Communication Specialist. During that time he has compiled tremendous experience working with League members, analyzing legislative proposals, researching municipal issues, staffing the League's policy development process, writing communications for our members, and managing the League's surveys. He is a 2008 graduate of the Duke University Master of Public Policy program. His first day as Director of Research and Policy Analysis will be this Monday, Feb. 17.

Chris Nida

League Director of Research and Policy Analysis Chris Nida

Additionally, Sarah Collins has been hired as the League's Regulatory Affairs Associate. Sarah is a 2013 graduate of the Campbell University School of Law and has experience in environmental regulatory policy issues through internships with the City of Raleigh, the N.C. Attorney General Office's Environment Division, and the League. She has also served as a legislative assistant in the N.C. General Assembly. Sarah will manage the regulatory advocacy program the League operates on behalf of all of North Carolina's municipalities. Said League Executive Director Paul Meyer, "We are excited to have Sarah joining our Governmental Affairs team. She brings significant prior experience with municipal government and the N.C. General Assembly, as well as detailed knowledge of the environmental regulatory issues that face our cities and towns. We are confident Sarah will be able to continue executing a robust regulatory advocacy program on behalf of all of our state's cities and towns." Sarah's first day at the League will be Friday, Feb. 21.

League Regulatory Affairs Associate Sarah Collins

League Regulatory Affairs Associate Sarah Collins

Finally, Jennifer Webb will be moving into a new role as the League's Executive Liaison. Working directly with Meyer, Jennifer will manage the day-to-day activities of the Executive Director's office while also working with departments across the League to ensure the cohesiveness of the League's service to its municipal members statewide. Jennifer has spent the past five years as the League's Grassroots Coordinator/Legislative Assistant, where she built the League's LeagueLINC grassroots program and assisted in the Governmental Affairs team's advocacy efforts. "Jennifer brings over five years of experience on our staff, and she has served in many cross-departmental roles during her prior work at DuPont and the American Lung Association," Meyer said. "She has been instrumental in elevating our governmental affairs efforts in the middle of very tough times, and she will be a valuable asset to the League's executive team."

League Executive Liaison Jennifer Webb

League Executive Liaison Jennifer Webb

We congratulate Chris, Sarah, and Jennifer on their new roles, and we know that all of you in the membership will enjoy working with them as much as we do.

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Revenue Laws Committee Hears About Additional Tax Changes

In addition to its privilege license tax discussion (see above), the Revenue Laws Study Committee of the General Assembly received information regarding several other changes to the state's tax structure at its Tuesday meeting. Among them was a presentation regarding the new distribution method for electricity and piped natural gas taxes and how returns amended by utilities would be handled under the new distribution system. The Committee did not have any discussion regarding the presentation or consider any proposed changes to address the issue at this meeting, but it may do so at a future meeting. The treatment of amended returns could impact future distributions to cities and towns, and the League will continue working on this issue with legislative and state agency staffers.

The Committee also received two pieces of proposed legislation related to the expansion of the state's sales tax base. One would further define what constitutes a service contract and who is responsible for collecting the sales tax on a service contract, while the other clarifies the sales tax's applicability to retailer-contractors. The Committee was also presented with a list of tax law changes going into effect July 1, including the elimination of sales tax holidays and the elimination of the sales tax exemption for bread, rolls, and buns sold at a bakery thrift store.

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Weather Leads to Rescheduling of League, NCGA Meetings

The winter weather that struck across North Carolina this week impacted meetings scheduled by the League and the General Assembly. Legislative Action Committee meetings scheduled for Wednesday, Thursday, and Friday of this week all had to be postponed. Members of those committees will receive word of a rescheduled date in the very near future. Meanwhile, at the General Assembly, meetings set to be held Wednesday and Thursday were all rescheduled. That includes a meeting of the Environmental Review Commission, which will now be held at 10:00 a.m. Monday. The agenda for that meeting includes a discussion of the release of untreated sewage from the City of Burlington's East Burlington Wastewater Treatment Plant into the Haw River. Also rescheduled was a study committee examining the restrictions on city and county environment ordinance-making authority that were passed as part of last session's regulatory reform bill. That meeting, where representatives from League member municipalities are expected to speak, will now be held at 3:30 p.m. Monday. In addition, a legislative study committee examining government purchasing and contracting issues was rescheduled from this week to Tuesday at 1:00 pm.

We hope you all stayed safe and warm during this week's weather. See here for a list of emergency management resources related to winter weather.

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Candidate Filing Begins; Sen. Allran Won't Run Again

Candidates wishing to run for political office in November could begin filing on Monday, but the biggest news of the week may have been a candidate who decided not to file. Sen. Austin Allran, who has served in the General Assembly for 34 years, announced that he would not run for re-election. Sen. Allran, whose district currently includes Catawba and Alexander counties, served three terms in the N.C. House of Representatives before moving on to a 14-term career in the N.C. Senate. City of Hickory Mayor Rudy Wright, a member of the League's Board of Directors, told the Hickory Daily Record, "Somehow, I can't picture us not having Austin Allran as our senator." N.C. Representative Andy Wells, currently in his first term in the House, has already announced his intention to run for Sen. Allran's seat. In an email, Rep. Wells said, "Over the last year and a half, while serving the General Assembly, I have worked with my colleagues in the State House to cut taxes and cut spending. I have learned about the challenges our small towns and rural communities face to create jobs. And I have been blessed with many new friends. Now, I believe I can best continue to work for conservative values by seeking election to the State Senate."

The N.C. General Assembly website is maintaining an unofficial list of candidates who have filed to run for the state legislature. You can find the list of House candidates here, while the list of Senate candidates can be found here. The filing period for candidates closes at noon on Feb. 28.

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Attend One of Three Streetlight Forums

A group of League members has worked collaboratively with Duke Energy Progress/Duke Energy Carolinas (Duke) to develop a day-long Outdoor Lighting Forum. The first forum, intended for customers in the Duke Energy Progress service area, will be held February 27 in Cary (forum details and registration here). Details of the other two forums, intended for customers in the Duke Energy Carolinas service area, will be available soon. Those two meetings will be held March 6 (Hickory) and March 13 (Greensboro). The forums were organized so that Duke could comply with a N.C. Utilities Commission order that directed the company to discuss a modernized streetlight rate schedule with its N.C. municipal customers. The League has pushed for Duke to develop a modernized streetlight rate, most recently in a filing submitted earlier this week (read more details in "League Urges Duke to Modernize Streetlight Rates," above).
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NCDOT Unveils Proposed Statutory Changes in Transportation Committee

The Joint Legislative Oversight Committee on Transportation convened last Friday to discuss the North Carolina Rail System and to consider a list of proposed statutory changes from the N.C. Department of Transportation (NCDOT). After giving an update of NCDOT's progress on its current 25-year strategic plan, the Department's Chief Deputy Secretary Nick Tennyson distributed a list of proposed NCDOT statutory changes for the Committee's consideration. The suggested amendments include several DMV legislative reforms, two amendments to last session's transportation reform legislation, and a request to statutorily define "intersections" in order to mitigate confusion amongst law enforcement in issuing violations. The amendments to the transportation reform legislation involve the exclusion of certain federal funds from the funding formulas and should have minimal impact on the funds available for transportation projects. The Committee will vote on the package at its next meeting. To view the full list of proposed statutory changes, click here.
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NLC Announces 2014 Federal Action Priorities

The National League of Cities (NLC) this week announced its federal action priorities for 2014, as selected by the NLC leadership with input from NLC members across the country. The agenda, which is intended to guide NLC's advocacy efforts in Washington, D.C., includes support for the Marketplace Fairness Act, a call to invest in local transportation priorities, and urging for protection of municipal bonds, among other issues. A detailed full agenda can be found here. Said NLC President Chris Coleman, Mayor of Saint Paul, Minn., "Advancing this agenda will push economic opportunity into all corners of our cities. These federal actions will provide economic stability to residents of cities across the nation and provide a foundation for a generation of growth."
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Gov. McCrory Announces Appointments to State Boards, Commissions

On Tuesday of this week Gov. Pat McCrory announced appointments to several statewide boards and commissions that impact municipal governments, including the N.C. Environmental Management Commission (EMC) and the N.C. State Water Infrastructure Authority. The members appointed to the EMC, who were sworn in and have been serving since September, include Thomas Craven, who previously served on the City of Raleigh City Council. Gov. McCrory also announced the appointment of Stephen Waters II to the N.C. On-Site Wastewater Contractors & Inspectors Certification Board. Stephen is the water resources superintendent for the City of Washington, and he will serve a three-year term on the board. The League congratulates Thomas, Stephen, and all of the Governor's appointments on their new roles and thanks them for their willingness to serve the citizens of North Carolina.