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 July 31 

This week's development

N.C. cities and towns could lose some beer and wine taxes under state budget proposal

Our North Carolina cities and towns could potentially lose some of their local share of the beer and wine excise tax, according to information we've gathered at the General Assembly on a budget proposal now under consideration by House and Senate leaders. Under the latest revenue proposal to balance the state budget, the state would retain some of the local share of beer and wine excise taxes for one year. Statewide, this tax produces about $33 million in annual revenues with about $22 million going to towns and cities and $11 million going to counties. Negotiations are continuing and the proposal is not final.

Other, more significant, local revenue sources were under consideration for reduction or elimination but our understanding is no other revenues beyond the beer and wine excise tax are expected to be retained.  Cities, towns and counties receive their beer and wine tax proceeds annually from the state in May.

"We are disappointed that reducing or eliminating a local revenue source is necessary to balance the state budget. Our cities and towns, of course, are struggling as well. However, we do understand the importance of meeting the needs of citizens in these tough economic times," said NCLM President Jerry Jones, mayor of Morehead City. "It is particularly difficult because the loss is happening after the adoption of municipal budgets for this year. However, we want to try to work in partnership with the state in both the good and bad times. We are committed to that."

House and Senate leaders are continuing to work hard to reach final agreement on the overall budget package.  The leadership indicates they are near completion, meaning the General Assembly would be voting on the package next week, with adjournment close behind. The basics include: a penny sales tax, an income tax surcharge of 3 percent for married couples making $250,000 or more, and 2 percent for those making between $100,000 and $250,000, and excise tax increases on cigarettes, beer, wine and liquor.

Eminent Domain bill expected to be considered in House Judiciary II

HB 1268 - Eminent Domain would amend the state constitution to bar government from condemning private property for economic development.  The constitutional mendment would also provide the landowner the right to receive a jury trial to determine just compensation. The statutes were amended several years ago to clarify this and the League believes a constitutional amendment is unnecessary. The bill was earlier sent from the House floor to a Judiciary II subcommittee, which is expected to report to the full committee next week. 

Local government ethics bill ratified

The House has approved the Senate's amendments to HB 1452 – Local Government Ethics , and the bill will be sent to the Governor. It requires cities, towns, counties, boards of education, unified governments and sanitary district boards to adopt codes of ethics. All members of the governing boards must complete at least two hours of ethics education within 12 months of being elected to office and two hours of education after each subsequent election or appointment to the governing board.

The code of ethics must be adopted by January 1, 2011, and governing board members must receive their initial training by that date. Please note that the upcoming Essentials of Municipal Government, which will be offered at six locations beginning in December, will include ethics education to satisfy this requirement. Also, there will be a pre-conference workshop on ethics at the N.C. Association of County Commissioners Annual Conference. This five-hour workshop, sponsored by the Local Elected Leaders Academy, will be held August 27.

Condemnation of Conservation Easements bill approved

The Senate agreed to the House version of SB 600 – Condemnation of Conservation Easements and it will be sent to the Governor. The League thanks Sen. Dan Clodfelter and Rep. Ruth Samuelson for their efforts on this bill. We worked with legislators and other interested parties to obtain provisions to exempt municipal utility projects, including electric, gas, water, sewer, stormwater systems and greenways. The bill is to be effective October 1, 2009.

More electronic notice of proposed increase in fees

The Senate concurred in the House committee substitute for SB 698 – City/County/Sanitary District Fees/Internet and the bill now goes to the Governor for her signature. The legislation requires local governments, sanitary districts and water and sewer authorities that maintain their own websites to publish notices of new or increased development-related fees on the website. The notice must appear at least seven days before the first meeting at which the new or increased development fee will be discussed, and the governing board must provide a public comment period. If the fee is part of the annual budget, no special electronic notice is required. The provisions are to be effective September 1, 2009.

Moratorium on rules scaled back

HB 1335 – Moratorium on EMC Rule Making passed the Senate this week after its focus was narrowed. A Senate committee substitute replaced a House bill on another subject with a bill placing a two-year moratorium on rulemaking by the Environmental Management Commission.  The revised bill, which now only applies to rules regarding water quality testing by animal feeding operations, returns to the House for a vote on concurrence in the Senate changes.

Affordable housing bill advances

SB 810 – Affordable Housing/No Discrimination (McKissick) has passed the House, and was amended on the House Floor to accommodate the League's concerns over the legal standard to be applied in discrimination cases.  It now makes its way to the Senate for concurrence. 

Conflicts of interest bill moves

SB 653 – Cities – Do Not Automatically Count Vote (Rucho) was moved from the House Local Government II Committee without prejudice, to the House Judiciary I Committee.  The bill in its current form would eliminate the requirement that when a city council person fails to vote on an issue before the board, the vote is counted as “yes.”  The bill also requires NCLM, NC Association of County Commissioners, and UNC School of Government to study local government conflicts of interest, and report back to the 2010 Session of the General Assembly.

Permit extension advances

The House and Senate adopted a conference report for SB 831 – Extend Certain Development Approvals this week and the legislation will now be sent to the Governor. The bill extends the life of certain types of state and local development approvals if they were valid at any point during the period from January 1, 2008 through December 31, 2010. The conference committee removed a provision dealing with the allocation of water and sewer capacity due to bill sponsor concerns. We are working to have that provision included in another bill this session.

Golf carts regulation bill passes

HB 121 – Regulation of Golf Carts has been ratified.  The bill allows municipalities and counties to regulate the operation of golf carts on any public street, road, or highway where the speed limit is 35 mph or less.  It also allows local governments to require registration, specify who is authorized to operate golf carts and requires that no person under 16 years old may operate a golf cart on a public street.


Ask your Senators to oppose HB 524 as long as it includes a referendum

Status: The House passed HB 524 – Annexation Omnibus Changes with the referendum provision last week. A July 30 Asheville Citizen Times article quoted Rep. Goforth, bill sponsor, indicating he was told the bill would be heard in the Senate before session ends.
What the bill would do: The bill makes sweeping changes to the state's statutes governing city-initiated annexations. The referendum provision requires a referendum on the annexation if a petition is signed by 15 percent of the registered voters in the area to be annexed and the municipality. Those opposing the annexation have at least one year, beginning from the adoption of the resolution of consideration, to gather the signatures. This referendum provision makes the bill unworkable, and we cannot support the bill with it included.
What you need to do: Please contact your senators to ask them not to support HB 524 as long as it includes a referendum. Please ask your residents, civic, business and chamber leaders to contact your senators also.