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Bulletin: July 1, 2010 


***See Important Update on Collective Bargaining in Federal Section***

State Budget Passes On Time---Happy 4th, Everyone!

SB 897, the state budget for fiscal year 2010-11, was given final approval by the House and Senate Wednesday and was signed by Governor Perdue Wednesday evening.  The budget does not adversely impact municipal revenues. 

Cities and towns across the state extend their appreciation to all Senate and House members for their dedication, hard work and difficult decisions. 

The budget creates the N.C. Mobility Fund for transportation projects, but it does not include the additional Powell Bill funding in the Governor’s original proposal.  The budget also includes $1.6 million and 39 positions to re-establish inmate work crews that aid municipalities.  Further, it creates a joint broadband task force to study last-mile deployment and public-private partnerships. 

Click here for more details, including a summary of all provisions affecting cities and towns.

ACTION:  Please call or see your legislators over the weekend to thank them for their hard work on this budget.  It involved tough decisions and long hours.

ABC Reform Bill Makes Progress; Work Continues on ABC Permitting Needs

HB 1717—Modernization of the State ABC System passed the Senate Judiciary II committee and is now in Senate Finance.  The League supports the bill – it successfully addresses ethics reform and salary concerns, provides both local governments and the State ABC Commission clarified authority, and leaves local government revenues intact. 

Unfortunately, it does not address the very serious needs for more local government input into ABC permitting of local establishments and local law enforcement support of ABC officers.  An effort by League staff to include these items failed this week.  However, we remain committed to working with legislators and stakeholders to address these problems for our citizens. A special thanks to the many Police Chiefs and municipal leaders assisting the League in this effort.

Ethics Bills Move Forward

Although not identical bills, SB 716 and HB 961 provide this year’s ethics and lobbying reform proposals. While it is uncertain what the final bill will contain, we expect a conference committee to resolve the difference between the bills sometime next week. 

It is quite likely that the agreement will include these items affecting local governments:  expansion of disclosure of personnel moves due to a disciplinary action, including date of each change within the unit; prohibition of local elected officials and employees from receipt of favors, services or promises of employment; and requirement that a party “substantially prevail” in a court case related to public records in order that the party may recover attorneys’ fees.  Also, League staff is working to amend a portion of SB 716 which would require local government employees who lobby at the General Assembly to register with and be regulated by the Secretary of State’s Office.

No Change to Municipal Broadband Status

SB 1209—Study Competing Systems/Interim Debt remains in the House Ways and Means/Broadband Connectivity committee, which is chaired by Rep. Bill Faison.  The bill, which sets up a study and a moratorium, with exceptions, was negotiated in the Senate in lieu of the bill’s original intent to limit municipal broadband to use of General Obligation bond financing only.  

League staff has participated in meetings called by Chairman Faison to discuss the bill.  Members of the House leadership do not support various aspects of the bill that would hamper the advancement of broadband to North Carolina citizens.  The bill is not expected to move next week.  Thanks to the broad coalition of businesses, associations, and citizens working to ensure our NC citizens receive the broadband needed for the future.

Click here for more information on municipal broadband.

Eminent Domain Bill Passes House

HB 1659—Eminent Domain, which requires a referendum to change the North Carolina constitution to prohibit condemnation of private property for an economic development reason,  passed the House this week and has been assigned to the Senate Rules committee.  The League does not support the bill because it is unnecessary, as current law clearly states that eminent domain can only be used when the property is needed for a public purpose, such as a road, fire station, etc.  A constitutional amendment leads to unintended complications in court decisions.  The bill is not expected to move in the Senate next week. 

Extending Permit Extensions?

HB 683 (originally the “Adopt NC Hot Sauce Day” bill) was converted into a bill that extends the building permit extension bill passed last session, from a December 31, 2010 sunset, to a December 31, 2012 sunset. 

The League reluctantly agreed to the changes last year and opposes any additional changes to the original compromise.  We have received numerous reports of problems created by last year’s legislation, such as solvent developers opting to vacate partially completed job sites and projects due to the extension of their permits, harming innocent purchasers and communities.  We are working with House leadership on the issue. The bill has been referred to the House Rules committee.

E-Recycle Bill Headed to Governor

SB 887—Amend Electronics Recycling Law, which establishes consumer electronic equipment recycling programs for consumers and also establishes a fund for local governments to use in providing e-recycling programs, has passed the General Assembly.  It now goes to the Governor for her signature.  Once signed, a municipality will be able to receive funding from the N.C. Department of Environment and Natural Resources (DENR) if the county Solid Waste Plan details a municipality’s intention to provide an e-recycling program (or if the city develops its own Solid Waste Plan).

Water Bills on the Move

The new HB 1746—Water Infrastructure Information Needs, which creates a task force to consider a statewide water database, and HB 1744—Modify Water Funding Priorities, which gives funding priority points for water supply projects, regionalization, and asset management plans, have both passed the Senate and are in the House for concurrence.

HB 1743—Improve River Basin Modeling (formerly SB 1170), which directs N.C. DENR to develop hydrological models for each river basin in N.C., passed the Senate this week with modifications requested by the League to ensure there would be no impact on regulatory or permitting decisions.

Also, HB 1765—Amend IBT Enforcement and Notice, which would shift costs for notice and public hearings for Inter-basin Transfers (IBTs) from the state to the local water systems, has passed the House.  League staff is asking for provisions to be inserted in the bill in the Senate that would make an IBT less costly and onerous by eliminating a portion of the newspaper ad requirements for certain notices later in the process.  Initial newspaper notice and several other communications vehicles would continue.

ACTION: Please call your Senators and let them know you believe the newspaper notice provisions in the final steps detailed in  HB 1765—Amend IBT Enforcement and Notice are expensive and over-burdensome, with no additional benefit for citizens. Ask that only initial newspaper ads be required, while all other communications vehicles remain intact.

Local Energy Financing Passes Senate

In 2009, the General Assembly provided cities with the authority to implement Revolving Loan Funds designed to finance energy efficiency projects through the enactment of HB 1389—Revolving Loan Fund for Energy Improvements. Some of the statutory language is imprecise and limiting, and it sheds some doubt on the ability of cities to exercise this authority and pay for these programs, particularly by tapping into time-limited stimulus (ARRA – American Recovery and Reinvestment Act) funds.

League staff has worked to clarify this authority, request cities be able to use multiple sources of money to fund these programs, and to expand the types of financing programs authorized.  These changes are in HB 1829—Renewable Energy Incentives, which passed the Senate this week.

Public Campaign Finance Changes

SB 20—Public Financing Changes, having already passed the Senate, has cleared the House Election Law committee and awaits a hearing in the House Appropriations committee.  In addition to adding the State Treasurer to the state public campaign finance system (a check-off box on the N.C. income tax form), the bill authorizes the State Board of Elections to establish municipal public financing programs with the Town of Chapel Hill and one additional city with a population greater than 50,000.  The pilot program for municipal public finance programs sunsets July 1, 2016.

SEPA Fix Critical Prior to Session End

The League has been working to fix the problems created by a recent court decision that held that the State Environmental Policy Act (SEPA) applies to any economic development projects in North Carolina that receive local incentives. This is a significant deterrent to economic development since this could make a company wait as long as two years before starting construction on a project. The League and other stakeholders are working to insert the clarification that SEPA does not apply to private economic development projects simply because those projects receive incentives.

ACTION: Please contact your House and Senate delegations and let them know you want to have this fixed before the session ends next week! 

Additional Bills to Track: [Not all inclusive, listed alphabetically]:

  • Clayton / Electronic Notices (HB 710)
  • Energy Policy Council Green Energy Study (HB 1804)
  • Government Employees Port Benefits (SB 1386)
  • Government Entity Sales Tax Refund Modification (SB 1430)
  • Local Government Other Post Employment Benefits (SB 1212)
  • Modify Water Funding Priorities (HB 1744)
  • Pedestrian Safety Improvements (SB 595)
  • Remove Sunset/e-NC Authority (HB 1840)
  • Safe Artificial Slope Construction Act (HB 1870)
  • Special Retirement Allowances (HB 2066)
  • State Health Plan / Local Govt Retiree Contribution (HB 2055)
  • Wake Email Address Lists / Electronic Access (HB 1921)
  • Water Infrastructure Needs / Close Info Gaps (SB 1291)
  • Water Supply System Capacity Planning (SB 1292)

Federally Mandated Public Safety Collective Bargaining Passes U.S. House

In a series of very unusual procedural moves, the U.S. House of Representatives amended the mandatory collective bargaining provisions of H.R. 413, the so-called “Public Safety Employer-Employee Cooperation Act of 2009,” into a mammoth bill that contains supplemental appropriations for the wars in Afghanistan and Iraq and many domestic programs, and a host of unrelated provisions. 

Under a special rule designed to cobble together enough votes to pass the package, H.R. 4899, Emergency Supplemental Appropriations, was deemed to have passed the House without an up or down vote on the whole bill ever having occurred.  The legislation mandates that all municipalities, counties and states are required to collectively bargain with public safety employee labor unions over wages, benefits and working conditions, under one-size-fits-all federal rules to be developed later. 

The mandatory collective bargaining provisions, should they become law, would directly and completely override longstanding N.C. law that prohibits collective bargaining in the public sector.  This occurred in the U.S. House without any public deliberation about the merits of this unfunded mandate, the need for it, or its constitutionality.  There is reason to doubt whether the Senate will pass the House version of the bill.  The U.S. Senate is in recess for the July 4th holiday and will not return until July 12.

ACTION: Please call or email Senator Kay Hagan's office (202-224-6342; and Senator Richard Burr’s office (202-224-3154; or to thank them for their continued support in fighting mandatory collective bargaining.  Ask them to vote against H.R. 4899, unless these provisions are removed.  This proposed unfunded mandate preempts N.C. law, raises fundamental issues of federalism, and might well be unconstitutional.  Congress should not be dictating local personnel matters, especially without careful deliberation on the merits of the issue.

Upcoming Events

Looking for a Bill?

You can follow bills of interest, post comments to the Government Affairs team and access your legislator information this session by clicking here or, when visiting the NCLM website, by choosing “Bill Tracking” in the Legislative Advocacy section of Take a few minutes to browse and personalize your access by choosing “Log In” in the Grassroots tab.

Last Call!

Would you like to be “in the know?” July 8 just may be the last “LINC in Thursday” (LIT) conference call. Plan to participate to get up to the minute legislative information and learn what last-minute issues were addressed by the General Assembly. Calls are held every Thursday at 3 p.m. during the session. Twenty minute updates are quick and to the point and end by answering your legislative questions. Email to participate.


S. Ellis Hankins                 Kelli H. Kukura
Executive Director             Director of Governmental Affairs