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 July 10 

This week's development

Eminent domain returned to committee

On a close vote earlier this week, the House sent HB 1268 – Eminent Domain back to the House Judiciary II Committee. The bill proposes a constitutional amendment to prohibit condemnation of property for economic development. The statutes were amended several years ago to clarify this and we believe a constitutional amendment is unnecessary.

Deferred property taxes for homebuilders enacted

Both the Senate and the House have now approved HB 852 - Defer Tax on Builder's Inventory . The legislation creates a property tax deferral for up to three years on newly constructed homes that are for sale. The deferral applies only to the house--not to land, additions, renovations or remodeling. Taxes become payable when the house is sold. Legislators enacted the bill to provide relief to builders during the current recession and it now goes to Gov. Perdue for her signature. The legislation was scaled back significantly from bills introduced in previous sessions. We were successful in obtaining a sunset on the bill and in removing the impact for the 2009-2010 fiscal year.

Meeting notice changes pass Senate

Legislation amending the notice provisions of the open meetings law passed the Senate this week and will be returned to the House for concurrence. Effective for meetings noticed on or after October 1, 2009, HB 81 – Notice of Special/Emergency Meetings clarifies that special and emergency meeting notices may be sent by email and that no fee may be charged for the email notice. It also specifies that special meeting notice required to be posted on the principal bulletin board or at the door of the meeting room must be posted on the door of the building or in an area accessible to the public if the building is closed to the public continuously for 48 hours before the time of the meeting. If a public body has a website, it must post its schedule of regular meetings on the site. Special meetings and recessed meetings must also be posted on the website, if the site is maintained by one or more of the public body's employees.

Local ethics requirements advance

Cities will be required to adopt a code of ethics by resolution or policy under the provisions of HB 1452 – Local Government Code of Ethics , which passed second reading in the Senate this week. Following third reading next week, it must be returned to the House for concurrence. We support the bill in its current form. The legislation requires that all elected municipal officials complete a minimum of two hours of ethics education within 12 months of election or appointment (each time elected). The requirements also apply to county commissioners, local school board members, and elected officials of unified governments and sanitary districts. The League is working with the UNC School of Government and others to develop suitable training to meet the requirement.

Utility billing provisions ratified

The House concurred in Senate changes to HB 1330 – Utilities/Collectors/Debt Collection and it has been sent to the Governor for her signature. The legislation prohibits utilities, including cities, from certain practices that could make a customer responsible for the delinquent account of another person. The city may not terminate a customer's service because of an unpaid balance incurred by another person who lives with the customer, unless they were members of the same household at a different location when the balance was incurred, the person was a member of the customer's current household when the service was established and the person had an unpaid balance for service at that time, or the person is or becomes responsible for the bill for the service to the customer. Similar provisions limit the ability to require a customer to agree to be liable for another person's delinquent account in order to continue the service. Thanks to Rep. Angela Bryant for working with us to clarify the language.

Conservation easements compromise reached

The stakeholders involved with SB 600 – Condemnation of Conservation Easements reached agreement on provisions of the bill, and the House Environment Committee approved it last week. It has been re-referred to House Appropriations. As introduced it would have created new standards and procedures for condemnation of properties encumbered by conservation easements that could have effectively eliminated local government ability to condemn such properties for road or utility projects. The League successfully negotiated numerous provisions – most importantly an exemption for municipal utility projects (including electric, gas, water, sewer, stormwater systems and greenway trails). For road projects, if the easement holder contests the condemnation, the court is to consider whether a prudent and feasible alternative exists and, if it does, must dismiss the action and award costs and expenses (but not attorneys' fees) to the easement holder.

Our thanks to Senator Dan Clodfelter, bill sponsor, for his leadership on this issue and to Rep. Ruth Samuelson for her diligence in working with interested parties to reach this agreement. We anticipate the House will move the compromise forward and that the Senate will concur.


Federal Stimulus Spotlight

List of ARRA funding opportunities

The N.C. Office of Economic Recovery & Investment has created a new feature on its ARRA website listing the available ARRA grant opportunities. The page provides links to the funding announcement, application deadlines, and eligible applicants. View the list at:

Broadband funding guidance announced

The U.S. Department of Commerce and U.S. Department of Agriculture have given notice of application requirements for the two ARRA-funded broadband programs. Application downloads are expected soon, and details about each of the two programs is available at:

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


Annexation bill to be heard in House Appropriations
Request removal of referendum provision

By a 60-59 vote, the House re-referred HB 524-Annexation-Omnibus Changes to the Appropriations Committee. The bill, as previously amended in the Finance Committee, now includes a referendum provision. The referral was made to determine the cost to the state of the Local Government Commission administering some provisions of the legislation. Rep. Mickey Michaux made the motion to send the bill to Appropriations. When the vote tied at 59-59, House Speaker Joe Hackney broke the tie, voting to send it to the committee.

We thank Speaker Hackney for his leadership on and fair, reasoned consideration of this issue and our thanks to Rep. Michaux for making the motion. We also thank Rep. Rick Glazier for his work to support all stakeholders in a potential compromise.

Status: We expect the Appropriations Committee to take up HB 524 next week, and we must strongly advocate for removal of the referendum provision in the bill. We have made significant compromises in this bill and, while we still have specific concerns, we stand behind our good faith efforts to support a reasonable bill that will pass this session. As municipal officials, you have shown great leadership in your support for annexation reform and the sweeping changes to the annexation statutes proposed in HB 524 as recommended by the House Judiciary II Committee. Unfortunately, the referendum amendment added in House Finance would lead to the effective elimination of annexation as a tool to manage growth and provide services in an orderly and logical manner in urban areas.

Actions needed: Please contact members of the House Appropriations Committee immediately to ask them to remove the referendum amendment from HB 524. (For a complete list and contact information visit the League's Legislative Action Center at:

Discuss importance of privilege license tax with legislators

There is continuing disagreement between the House and Senate over how to raise approximately $1 billion in new revenue. Published reports indicate that the conferees do not expect to reach an agreement on the state budget before the continuing resolution now funding state government expires in mid-July. Gov. Beverly Perdue is advocati

Looking to 2010 . . . 

Municipal Legislative Policy Proposals


  Please Submit Your Ideas Now

The League Conference will be held October 25-27, 2009 in Greenville.  The annual business meeting will be held on October 27, and in that meeting the membership will consider any changes to the advocacy agenda or core principles for 2010.  In accordance with the League Bylaws, proposals from the membership must be submitted to the League at least 90 days in advance of the annual meeting.

Policy proposals should be sent to the League office as soon as possible , but no later than July 29, 2009.  This is your policy process — please give this thoughtful consideration and participate so the League speaks for you.  These proposals will be forwarded to one of the League legislative action committees.  Committee recommendations will be considered by the League Board of Directors at its August 18 meeting.  Copies of the advocacy agenda and core principles recommended by the Board will be sent to all member municipalities at least 60 days before the annual meeting.

Proposals that have not been approved by the Board can be considered by the policy committees later, but will not be considered at the annual meeting, except upon the favorable vote of 3/4 of the member municipalities present and voting, pursuant to the League Bylaws.  Following the annual meeting, we will inform the membership, legislators and other interested individuals and organizations about the  approved advocacy agenda and core principles.

ng a one-cent sales tax increase, with a sunset provision, so that cuts to education programs will not be as severe.

One item of significant concern is the apparent agreement to eliminate the privilege license tax, which raises approximately $50 million for municipalities statewide. We will continue to work with House & Senate budget leaders on a possible solution. Please contact House and Senate budget conferees to discuss how important the privilege tax is as a revenue source to your city or town. For a complete list of the conferees, check out last week's bulletin, which includes this list and contact information. Any legislator's office may be reached by calling 919.733.4111 and asking for the legislator by name.

Oppose SB 117 – Clarifying Development Moratoria Authority

SB117 prohibits a city or county from adopting a temporary moratorium on development for the purpose of developing and adopting new or amended ordinances.

Status: Passed the Senate; scheduled to be heard in House Commerce Wednesday.

Actions needed : Please contact members of the House Commerce Committee to ask them to oppose this bill. Planning statutes were revised a few years ago to set sufficient standards for moratoria, which are an important tool for addressing local growth and development issues.

Seek amendments to Open Government Act

HB 1134 – Open Government Act requires awarding of attorneys' fees to anyone who “substantially prevails” in a public records case against a city, county or the state. The government unit can avoid paying the attorneys' fees only if the court finds that it acted in reasonable reliance on a court order, a published appellate opinion, or a written opinion or letter of the Attorney General. It 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.

Update: The House this week gave preliminary approval to HB 1134 . Rep. Lucy Allen proposed an amendment to allow a local government to avoid paying attorneys' fees when acting on the written advice of its attorney. After lengthy and spirited debate, the amendment failed and the bill passed its second reading. It is expected to pass third reading early next week and be sent to the Senate. We thank Rep. Ross, bill sponsor, for her willingness to discuss this issue and listen to Local Government concerns. We thank Rep. Allen and the many legislators who spoke in support of her amendment--and in support of the integrity of local government attorneys-- on the floor. We also thank Rep. Bill Owens for offering an amendment in the Finance Committee.

Actions needed: Please talk to your Senators and request that language be added on the Senate side to prevent attorneys' fees from being awarded if a local government acts on the advice of its attorney.