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 June 19 

This week's developments

Budget update

The push to finalize a state budget continues to move ahead, with differing perspectives between the House and Senate as to how to raise additional state revenue in strong debate. Governor perdue began travels around the state this week to build support for more taxes to fund education. As you'll recall, the Senate is considering a $950 billion tax package while the House passed a $784 billion increase last week. The Governor wants to increase taxes by $1.5 billion. We are closely analyzing the impact of the various tax plans on municipalities, and will keep you informed as discussions develop. If the General Assembly is unable to pass a budget by June 30, it is faced with the prospect of adopting a continuation resolution to keep state government operating until a final budget agreement is reached.

SB 52 Various Localities Energy Development Incentives signed into law

Cities and towns now have authority to provide incentives for reductions in energy consumption. The General Assembly has enacted and Gov. Beverly Perdue has signed legislation (SB 52) authorizing cities, towns and counties to provide development incentives, such as density bonuses, to developers or builders who agree to complete new construction projects or reconstruction projections that will result in a significant reduction in energy consumption.

HB 239 Jordan Lake Rules approved by Senate

The Senate has passed its version of HB 239 – Restore Water Quality in Jordan Lake. Since this bill differs somewhat from the legislation passed by the House, the bill must go back to the House for confirmation. If the House does not agree to the Senate's changes, a conference committee will be appointed.

Senate bill to change conflict of interest standards heard

SB 653 – Excuse Governing Body from Voting (Rucho)- was heard in the House Local Government II Committee on Wednesday, but no vote was taken. The bill in its current form would allow city elected officials to be excused from voting when a conflict of interest exists (direct pecuniary interest) or on matters which the member believes he or she has a conflict of interest. The League has not taken a position on the bill, but would be interested in hearing perspectives from elected officials.


Federal Stimulus Spotlight

Technical assistance for ARRA grants

The UNC-CH Office of Economic Opportunity has funded nine summer intern positions to provide local governments technical assistance in securing ARRA funding. All interns are graduate students or recent graduates of graduate degree programs at UNC-CH.

One intern is working in the League offices, with the others placed in eight Councils of Government across the state: Land of Sky, Isothermal, Centralina, Piedmont Triad, Triangle J, Upper Coastal Plain, Mid-East, and Cape Fear. The interns are also available to help local governments not directly served by one of the eight COGs. Please contact them for help in identifying funding sources and grant writing. 

Get updated ARRA information

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


Regulatory Update

Groundwater quality standards proposed rules

The comment period for the proposed groundwater quality standards rules (15A NCAC 2L .0202) ends Monday, June 22 . Please submit comments if the proposed rules would adversely affect your operations.

These rules address the treatment processes of waste discharged by non-discharge permittees.  Affected operations could include land application, certain solid waste operations such as landfills, and underground storage tanks.   The proposed rules revise two groups of groundwater quality standards: (1) arsenic, reduced from 50 ppb to 0.02 ppb, and (2) triennial review of standards.

The proposed rules and accompanying fiscal note are available.  Please examine these materials and analyze the impacts of the proposed rules on your municipal operations.  Submit comments to Sandra Moore.

Water treatment standards and operations proposed rules

The N.C. Department of Environment and Natural Resources has proposed changes to the rules regulating public water systems (15A NCAC 18C). The comment period runs through Tuesday, June 30. Please submit comments if these proposed rules would adversely affect your operations.

The proposal would incorporate existing treatment standards for cryptosporidium and disinfectants and disinfection byproducts (.2002, .2004, .2006, .2007, .2008). Further, the proposal would increase testing requirements of some systems (.1300).

The proposed rules, pages 2059-2067 and the fiscal analysis.  Submit comments to Linda Raynor.


Action Items

Please come to Raleigh Tuesday to show support for reasonable annexation reform

House Judiciary II considers committee substitute for HB 524 – Annexation – Omnibus Changes – Sets tougher requirements, but likely best compromise

The House Judiciary II Committee is considering a committee substitute for HB 524– Annexation – Omnibus Changes that preserves the essential elements of annexation authority and does not include any requirement for a referendum on city-initiated annexations.

This bill will make major changes to the state's annexation laws and will make it significantly more difficult for cities and towns to undertake annexations. We have concerns about some provisions of the bill, particularly water and sewer requirements that will make it much more difficult to annex, especially for small cities and towns. However, we are faced with an extremely strong and well-organized effort to effectively eliminate city-initiated annexations. The League believes this is likely the best possible compromise to settle this issue for our cities and towns. The committee will meet again Tuesday and we anticipate a vote to be taken.

Please contact members of the House Judiciary II Committee before Tuesday and let them know that this will be a very difficult bill for cities and towns and it is as far as we can go. Ask that they approve the bill as currently written without any amendments. More than 20 amendments have been offered, and many seek to severely restrict or eliminate city-initiated annexation authority.
What the bill would do: The committee substitute includes most of the measures included in HB 727 – Annexation Changes (the bill supported by the League), along with other changes. Here is a summary of the most significant provisions: 

  • Requires extension of water and sewer lines to individual properties within three years after the effective date [apparent intent—needs clarification];
  • Makes development standards to qualify an area for annexation significantly more stringent;
  • Eliminates “shoestring” annexations;
  • Extends the time for filing suit to challenge validity of an annexation from 60 to 90 days;
  • Prohibits annexation of an area already served with water and sewer by another municipality;
  • Provides that all city-initiated annexations must be made effective on June 30;
  • Provides for Local Government Commission (LGC) review and certification of the “financial feasibility” of service plans;
  • Requires LGC to abate subsequent property taxes on properties upon petition and finding that after three years required water, sewer or other services have not been provided as required by law, plus rebate of previously paid property taxes in some cases;
  • Requires LGC to prohibit additional annexations until all required services have been provided in previous annexation areas;
  • Requires annexation of some underserved low-income areas upon receipt of a 75-percent petition;
  • Provides that a town must already be providing at least two specified “meaningful services” in order to be eligible to use the town-initiated annexation authority (intended to codify and clarify the requirements of the N.C. Supreme Court decision in Nolan v. Village of Marvin);
  • Authorizes annexation of surrounded "donut holes"; and
  • Changes the population number for the small town annexation statutes from 5,000 to 10,000

A copy of the proposed committee substitute is posted in the Legislative Action Center on the League's website.
Sponsors: Reps. Love, Starnes, Allen, K. Alexander/ Sen. Rand
Actions Needed:
1. Come to Raleigh on Tuesday, June 23 to attend House Judiciary II Committee meeting . The House Judiciary II Committee is scheduled to meet 15 minutes after session on Tuesday, June 23 in Room 544 of the Legislative Office Building. Plan to arrive by 2 pm. Check for last-minute schedule changes.

2. Contact members of the House Judiciary II Committee to ask them to support the proposed committee substitute for
HB 524 without amendments.
Vice Chairs: Reps. Glazier (919.733.5601, Love (919.715.3026; and Weiss (919.715.3010; Members: Reps. Blackwell (919.733.5805; Bordsen (919.733.5820; Burr (919.733.5908; Crawford (919.733.5824; Folwell (919.733.5787; Hurley (919.733.5865; Jackson (919.733.5974; Johnson (919.733.5861; Jones (919.733.5825; Moore (919.733.4838; Parmon (919.733.5829; Rhyne (919.733.5782; and Spear (919.715.3029

3. Contact members of the House Finance Committee to ask them to support the proposed committee substitute for HB 524 without amendments. A vote Tuesday means little time left for House Finance contacts. Please do not forget to call House Finance members as the HB 524 PCS could be in House Finance as early as Thursday, June 25!

Senior Chair: Luebke (919.733.7663, Chairmen: Gibson (919.715.3007, Wainwright (919.733.5995,Weiss (919.715.3010, Vice Chairs: Hill (919.733.5830, Holliman (919.715.0873, Howard (919.733.5904, McComas (919.733.5786, Womble (919.733.5777 Members: K. Alexander (919.733.5778, Blackwood (919.733.2406, Blust (919.733.5781,
Braxton (919.715.3017, Carney (919.733.5827, Cotham (919.715.0706, Faison (919.733.5749, Folwell (919.733.5787, Hall (919.733.5872, Hughes (919.733.5754, Jones (919.733.5825, Lewis (919.715.3015, McCormick (919.733.5654, McGee (919.733.5747, Owens (733.0010, Rhyne (919.733.5732, Ross (919.733.5773, Setzer (919.733.4948, Stam (919.733.2962, Starnes (919.733.5931, Tillis (919.733.5828

Our thanks to Creedmoor Mayor Daryl Moss and Charlotte City Attorney Mac McCarley for speaking at the Thursday afternoon House Judiciary II committee session. We appreciate the hard work of so many municipal officials and citizens who have visited and contacted their legislators. Please continue that effort . The opponents of annexation are out in numbers and still are pushing for amendments that would require a vote on city-initiated annexations.

And, remember, a Senate Finance subcommittee on annexation also is considering the issue. Keep up your contacts with your senators.


Oppose SB 600 – Condemnation of Conservation Easements
What the bill would do: Currently this bill places new procedures and standards for condemnation of properties encumbered by conservation easements that will effectively eliminate the ability of cities and towns to condemn such properties. The bill establishes modified procedures for the N.C. Department of Transportation that will enhance the protection of lands covered by conservation easements and we are asking that cities and towns be authorized to condemn property under the same standards as the DOT. The bill in its current form would likely complicate the extension of water and sewer utilities.
Sponsor : Sen. Clodfelter
Status: Passed Senate, bill heard in House Environment Committee 6/18, no vote.
Actions Needed: In its present form, this bill includes separate condemnation standards and procedures for these properties, including the award of attorneys' fees to holders of conservation easements. This later provision is inconsistent with existing law. Please ask the members of the House Environment Committee to work with the League on acceptable changes to this bill, especially elimination of attorneys' fees.
Contact members of the House Environment Committee to ask them to oppose SB 600 unless amended to authorize cities and towns to operate under the same standards and procedures as the DOT.

Chair: Allen (919.733.5860 Vice Chairs: Gillespie (919.733.5862, Harrison (919.733.5771, Justice (919.715.9664, Tarleton (919.733.7727, Underhill (919.733.5853 Members: K. Alexander (919.733.5778, Blackwood (919.733.2406, Floyd (919.733.5959, Gibson (919.715.3007, Haire (919.715.3005, Insko (919.733.7208, Killian (919.733.5886, Luebke (919.733.7663, Martin (919.733.5758, McComas (919.733.5786, McElraft (919.733.6275, Owens (919.733.0010, Samuelson (919.715.3009, Tucker (919.715.3021, West (919.733.5859, Womble (919.733.5777