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 April 24 

General Assembly loses a great leader

We note with sadness the passing of Senator Vernon Malone, who died Saturday. Senator Malone had represented Wake County in the General Assembly since 2002. A retired educator, he had served as chairman of the Wake County Board of Commissioners and the Wake County Board of Education. He was an advocate for municipal residents and urban issues.

We applaud his long and distinguished career of public service.


This week's development

Senate tax overhaul

The proposal released Wednesday by Senate Finance Committee leadership would make major changes in North Carolina's tax structure and affect municipal revenues. Under this proposal, the state sales tax rate would go down, but taxes would be charged to a broader base, including some services. The local sales tax rate also would go down from 2.0 to 1.9 percent and apply to a broader base. Services proposed to come under this new broader sales tax include repair work, movie tickets, other entertainment tickets, moving and storage services and other services.  The proposal would eliminate state and local privilege taxes and the local share of beer and wine taxes. Sales tax refunds for local governments (of state taxes) would be eliminated and capped for large nonprofit organizations. For more details on the proposal, see the letter sent April 22 to municipal officials (letter available at ).

The changes would increase both state and local revenues, according to estimates released with the proposal. League staff members are analyzing the details of the proposal to determine, as much as possible, the effects on individual cities and towns. We will send this information to municipal officials as soon as it is available.

The proposal is in the early stages, however, and likely to undergo revisions, according to Senate leaders. Both the Senate and the House must approve any revenue changes and then Governor Beverly Perdue must approve.  As you receive more details on how proposed changes might affect your individual city or town, please stay in close contact with your legislators about this issue. Your future revenues are at stake.

Intermodal passes House

HB 148 – Congestion Relief/Intermodal Transport Fund passed the House this week. League and Metropolitan Mayors' Coalition support this legislation to allow additional local option revenue sources for public transportation needs.

Scrap metal bill clears committee

HB 323 – Prevent the Theft of Scrap Metals got a favorable report from House Commerce this week. League supports this legislation that will help address problems local governments are experiencing with the theft of metals from public infrastructure.

Local ethics bill advances

HB 1452 – Local Government Code of Ethics got a favorable report from the House Ethics Committee and was re-referred to Judiciary I.  The bill requires cities, counties, school boards, and sanitary districts to adopt a local code of ethics for governing board members.  Governing board members would also be required to receive training on ethics and conflicts of interest.  Our thanks to the sponsors for working with us on this bill.  League supports in its current form.

Electronic notice bill stalls

HB 193 – Electronic Notice of Public Hearings was heard but not voted upon in House Judiciary I following strong opposition from the Press Association.  Bill would allow electronic notices for public hearings as a substitute for published notice.  League spoke in support and is working with the sponsor, Rep. Stam, to address concerns. 

Making Their Voices Heard

We thank Wilmington Mayor Bill Saffo and Concord city manager Brian Hiatt for bringing a group of officials and citizens to Raleigh this week to meet with legislators in support of fair municipal annexation. We also appreciate Jacksonville director of public works Grant Sparks for bringing a group to Raleigh in support of SB 472/HB 727.


Federal Stimulus Spotlight

N.C. stimulus statewide meetings

The N.C. Office of Economic Recovery & Investment, the state's federal stimulus oversight and coordinating agency, plans to hold the first of a series of statewide meetings on April 28 in Winston-Salem from 1:30-3:30 p.m. at Dillard Auditorium, Winston-Salem State University.  This meeting is rescheduled from the one previously announced for April 16.  Future workshops will be held in Asheville, Charlotte, Greenville, Raleigh, and Wilmington.  State agency representatives will discuss the current status of stimulus funds in their agencies, detail upcoming opportunities, and explain the mechanisms for participation in the process.

Water & sewer project awards

The League has learned that the N.C. Department of Environment and Natural Resources (DENR) intends to announce awards of stimulus funding in the next week.  The awards will likely comprise just over half of the total amount of stimulus funding available for both the wastewater and public drinking water supply programs.  Each program plans to award the remaining funds in a second round this summer.

Appropriating stimulus funds

League staff members are closely monitoring legislative committee hearings on the federal stimulus.  In these meetings, legislators have expressed concern that stimulus funds have not been appropriated through the state budget process.  Legislators also have expressed a desire to ensure the stimulus funds are spent effectively and efficiently.

Get updated stimulus information

The UNC-CH School of Government has established a listserv for elected and appointed officials to share federal stimulus information. To register for the listserv, please visit


Action Items

Contact your legislators in the next few days about these issues ...

Oppose HB 1252/SB 1004,  “Deny Broadband to N.C. Communities” bill
Update: The House Committee on Science and Technology did not vote on HB 1252 on Wednesday, April 22, but instead referred the bill to the House Public Utilities Committee. It was referred without prejudice, meaning the committee did not give a favorable or unfavorable recommendation. Our thanks to all those who are working to talk with legislators about the damaging effects of this legislation. The League continues to also discuss SB 1004, the Senate version of the bill, with the sponsor, Senator Hoyle, who has been very receptive to our concerns. 
What the bills would do: Set significant and unfair requirements that would prohibit cities and towns from providing needed high-speed Internet and other communication services to their residents, businesses, educational and other institutions. For a fact sheet and more information on this issue, go to the NCLM Legislative Action Center and click on "broadband."
Sponsors: Reps. Harrell, Jones, Avila, Tillis
Status: House Public Utilities Committee
Actions Needed : Contact members of the House Public Utilities Committee to ask them to oppose this bill. Members include the following: Chair, Rep. Coates; Vice Chairs, Reps. Brubaker, Cole, Faison, Tucker; Members, Reps. K. Alexander, Blackwell, Bryant, Carney, Earle, Goforth, Grady, Gulley, Harrison, Holliman, Howard, Johnson, Lucas, McComas, Moore, Neumann.


Oppose SB 117 – Clarifying Development Moratoria Authority
What it would do: Prohibits a city or county from adopting a temporary moratorium on development for the purpose of developing and adopting new or amended ordinances.
Sponsor : Sen. Hoyle
Status: Senate passed this week, moves to House for consideration; our thanks to Sen. Hoyle for agreeing to work with us on the bill on the House side
Action needed : Contact your representatives to let them know you oppose SB 117 in its current form.  The current statute requires a stringent process to assure balance and fairness, while ensuring an open, public input process.


Support HB 727/SB 472 — Annexation Changes – House Judiciary II begins discussion

What the bills would do:  Enact 20 changes to address legitimate concerns of citizens while retaining fairness of annexation for in-town residents and annexation as tool for managing growth. 
Sponsors: Reps. Love, Starnes, Allen, K. Alexander; Sens. Rand, Malone
Status:   House annexation bills, including HB 727, in House Judiciary II Committee.  The House Judiciary II Committee began discussion of the issue this week with a brief presentation by Dr. David Lawrence of the UNC School of Government. Committee members questioned Lawrence about annexation procedures and policy.
Senate annexation bills, including SB 472, are in Senate Finance Committee.

Actions Needed:   Contact House Speaker Joe Hackney (919-733-3451) and Rep. Hugh Holliman (919-715-0873), as well as members of the House Judiciary II Committee to ask them to support HB 727.  Explain why a vote by annexed residents is not right for North Carolina. 

Seek Changes to HB 1134 – Open Government Act

What the bill would do: Require awarding of attorneys' fees to anyone who “substantially prevails” in a public records case against a city, town, county or the state. Also creates an Open Government Unit in the Attorney General's Office to serve as a mediator in resolving public records and open meetings disputes.

Sponsors: Reps. Ross, Wainwright, Wilkins, Dickson

Actions needed: Please study this bill and let us know how it might affect your city or town. The League has some concerns about the language and is continuing to work with the sponsors. The bill is scheduled to be heard in House Judiciary I on Tuesday.


Bill Summaries