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2012 NORTH CAROLINA GENERAL ASSEMBLY SHORT SESSION WRAP-UP

The 2012 North Carolina General Assembly short session ended on Tuesday, July 3, with the Senate wrapping up its session at approximately 3 a.m. and the House completing its work around 3 p.m.  It was a very trying legislative session for North Carolina cities and towns, certainly the most damaging one in recent history.  It is clear that NC cities and towns, and our supportive citizens and business leaders, must make a renewed effort not only to more directly and routinely discuss issues and build understanding with our legislators, but also to show significant leadership in engaging municipal citizens in grassroots outreach about the issues affecting their communities and quality of life. 

M is for MEMO!

An M beside a bill summary indicates that a League memo is being prepared on this subject to provide detailed explanation about the application of the new law. These memos will be emailed to managers, attorneys, and clerks, and will also be available on our website - NCLM.org.

If you have any questions about a legislative issue, please contact a member of the Government Affairs or Legal teams. We are always happy to help!

Guide to Bill Status: For each bill in the report, we have included the bill number, title, sponsor, and, if applicable, a session law (S.L.) number and effective date.


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ANNEXATION

M HB 925 - Annexation 2 (Moffitt)


Eff. July 1, 2012

As you are well aware, HB 925 (S.L. 2012-11), which requires all city-initiated annexations to face a vote of only the registered voters living in the proposed annexation area, passed the Senate on May 21, 2012 by a vote of 30-14 and passed in the House on May 29, 2012 by a vote of 72-45. The bill was ratified and sent to the Governor, who refused to sign the bill, which means it became law without her signature.  After much assessment regarding the ability to sustain a veto long-term, the NCLM Executive Committee decided against asking the Governor to veto the bill.  We appreciate Governor Perdue issuing a strong statement of concern about the legislation. 

Two items of particular note changed from the legislation passed in 2011: 1. Law now requires a referendum (at the next municipal general election) allowing only the registered voters in the proposed annexation area to vote, once the municipality has adopted a resolution of intent and a resolution setting the date for the referendum.  If LESS than a majority of the votes cast are FOR the annexation (in other words, if a simple majority vote against it), the area cannot be annexed via city-initiated annexation for 3 years. After 3 years, the referendum process would again be required.  2.  A municipality's ability to involuntarily annex 'donut holes' (areas completely surrounded by the municipality) has also been affected, as the bill requires a vote of the registered voters in that area as well. 

Obviously this law is very damaging to balanced growth and economic development in our North Carolina communities.  It is also unfair to city residents. Our cities and towns had hoped to reach a more reasonable outcome.  We are obligated to continue our pleas for working in partnership with the General Assembly toward better decisions for ALL of our citizens. 

Contact:  Kelli Kukura, 919.889.9040

 


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DEANNEXATIONS & LOCAL ANNEXATION ISSUES

HB 5 Local Deannexations

(LaRoque)
S.L. 2012-3

The cities that brought a lawsuit after having a retroactive veto petition process applied to previously lawfully annexed areas won in court, but the General Assembly moved swiftly in HB 5 Local Deannexations (LaRoque) to deannex those areas and punitively place a 12-year ban on further annexation attempts of them.  We saw a number of other local, hostile de-annexation/anti-annexation bills, including  HB 1050 (S.L. 2012-103) Elizabethtown Industrial Park Deannexation (Brisson) and HB 1051 (S.L. 2012-104) Hayfields Deannexation (Brisson), which both passed and are now law.  

Another precedent-setting bill, now law, came in HB 943 (SL 2012-54) Davidson County Annexations (R. Brown, Dockham), which was requested by the Davidson County Commissioners.  The bill requires the city of High Point (or any other city not primarily located in Davidson County) to have approval from the Davidson County Commissioners before annexing into the county. 

Contact:  Kelli Kukura, 919.889.9040

 


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BUDGET REDUCES POWELL BILL & STATE INFRASTRUCTURE FUNDS

HB 950 - Modify 2011 Appropriations Act (Brubaker)

S.L. 2012-142
Effective July 1, 2012

The only budget provision that affects State-collected municipal revenues is the one-year cap on the gas tax rate, which will reduce FY 13-14 Powell Bill revenues by less than one percent.  Powell Bill funding for FY 12-13 is unaffected because it will be based on FY 11-12 collections.  Funding for public transportation and local infrastruture also was reduced.  The public transportation grant program was reduced by 3 percent, following a 6 percent cut made last year.  The Regional and New Start Capital Grant program for transit was eliminated, but funding for Charlotte's Blue Line was provided separately.  The Rural Center's $16 million local infrastructure program was cut by $1-3 million, depending upon if the center chooses to exercise flexibility it was granted in the budget modifications bill (SB 187, S.L. 2012-145).  The Clean Water Trust Fund, which was cut from $50 million to $11.25 million last year, was cut a further $500,000 this year and converted to non-recurring funding, making it more likely that the fund will be eliminated in the future. 

Contact: Karl Knapp, 919-715-9768

 


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CONTINGENCY FEE AUDITS

M HB 462 - Contingency Contracts for Audits/Assessments (McCormick) and
SB 847 - GSC Technical Corrections (Hartsell)

S.L. 2012-152
S.L. 2012-194
Effective July 1, 2013 to June 30, 2015

In response to a significant push from the NC Retail Merchants and NC Chamber, HB 462 in its original form was designed to eliminate the ability of local governments to use contingent fee based assessment contracts to complete tax compliance audits.  Lacking adequate staffing levels, cities and counties use these audits to identify property which is not being listed, or not being properly valued, by the taxpayer.  Most of these audits apply to business personal property and provide great value to local governments and taxpayers because these contracts only require payment to the audit firms once discovered taxes are paid.  Working as part of a coalition, the League was successful in preventing a complete elimination of the use of the audit tool. Instead, the League and the coalition it was a part of negotiated a delay in the effective date of a moratorium on the use of contingency fee based audit contracts to July 1, 2013, a study of the issues of tax audits, and a sunset on the prohibition of these contracts on July 1, 2015.  A study of the issues will likely be completed by the Legislative Research Commission, where all parties have agreed to work toward improved audit solutions and practices.

Contact:  Paul Meyer, 919.715.3930

 


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ENVIRONMENT (GENERAL)

M SB229 - Amend Environmental Laws 2012 (East) 

Ratified and Presented to Governor July 3, 2012

With SB 229 Amend Environmental Laws 2012 (East), the annual tradition of massing many environmental law rewrites into one omnibus bill, legislators made dozens of changes to the state's environmental laws. Measures of interest to municipalities touch on water quantity, water quality, stormwater, and solid waste permitting and programs. Highlights include, in bill order:

  • Compost permitting. Narrows permitting for municipal yard waste compost facilities. The League worked to limit permitting of Type I compost facilities to state and/or federal stormwater permitting actions (except industrial stormwater permits), but not wastewater permitting. Regulating these facilities came due to 2009 legislation, which passed in response to concerns of contaminated stormwater runoff from the facilities' piles of yard waste, windrows, and finished compost. This change does not modify the permitting requirements for Type II, III, and IV compost facilities, as negotiated in a 2010 stakeholder group.
  • Non-contiguous parcels. Mandates that local governments must treat two non-contiguous parcels as one single parcel if eight conditions are met, for purposes of water body protection. The conditions relate to buffers, stormwater controls, and terms of development within the non-contiguous parcels. This exception applies to local governments implementing a water supply watershed program rule and could possibly result in less stormwater protections for the affected properties.
  • Jordan Lake new development rule delay. At the request of Greensboro and Burlington, implementation of the new development rule portion of the Jordan Lake Rules moves (1) from August 2012 to August 10, 2014; (2) within three months after approval of a local program by the N.C. Environmental Management Commission; or (3) upon DENR's first renewal of a local government's NPDES stormwater permit, whichever occurs later.

This article in EcoLINC, the League's monthly environmental newsletter, details other subjects addressed in this bill, including stormwater capture and reuse, Kerr Lake reallocation, airport stormwater control, treatment of lands in riparian buffers, development in Neuse/Tar-Pam buffers, wastewater facilities in waters classified as Nutrient Sensitive Waters (NSW), NSW goals, basinwide planning cycles, community water system definition, private drinking water well setbacks, leaking underground storage tank clean-up, and new septage pumper truck notification.

Contact: Erin Wynia, 919.715.4126.

 

M SB 810 - Regulatory Reform Act of 2012 (Rouzer)

S.L. 2012-187
Eff. July 16, 2012

Yet another omnibus bill, SB 810 Regulatory Reform Act of 2012 (Rouzer) makes miscellaneous changes to state law, mostly regarding environmental laws and procedures. The original bill came out of the Joint Committee on Regulatory Reform, which met periodically throughout the interim period between sessions. The law makes the following environmental changes of interest to municipalities:

  • Permit tracking. The law directs DENR to track permitting process times for those permits submitted under the following programs: One-Stop, Express Permit, and Certification Reviews. In doing so, DENR must measure (1) the total time from when initial permit application is received to decision on permit application, as well as (2) total time from when a complete permit application is received to decision on permit application. Further, before January 15, 2013, DENR must inventory all of its permits, licenses, and approvals, and report back to the legislative Environmental Review Commission which of them should be subject to the same tracking of permit times. 
  • Landfill and transfer station permitting. Offers operators of sanitary landfills or transfer stations the option of applying for either a five-year permit or a ten-year permit. For facilities pursuing a ten-year permitting option, DENR may conduct a limited review of the permit after the first five years, and may also review the permit five years after amendment to any permit that accommodates growth at the facility.

This article in EcoLINC, the League's monthly environmental newsletter, details other environmental measures addressed in this bill, including definition of "discharge" and wastewater permitting in Jordan/Falls watersheds.

Contact: Erin Wynia, 919.715.4126.

 

M HB953 - Amend Environmental Laws 2 (Gillespie)

Ratified and Presented to Governor July 3, 2012

HB 953 Amend Environmental Laws 2 (Gillespie) contains some technical changes to the state's environmental laws, but much of its content may be regarded as substantive policy changes. Measures of interest to municipalities include:

  • Landfill disposal waiver. Adds oyster shells to the list of recyclable materials from which a city or county may seek a waiver from rules prohibiting their disposal in landfills, if prohibiting disposal presents an economic hardship to the local government.
  • EEP preferences. Modifies changes made in 2011 to the laws governing the Ecosystem Enhancement Program (EEP), the state's mitigation banking program. Lists the order of preference in which EEP must use various mitigation programs.
  • Jordan Lake new development rule delay. Mirrors the same provision in SB 229 Amend Environmental Laws 2012 (East), described above.

Contact: Erin Wynia, 919.715.4126.

 

HB 819 - Coastal Management Policies (McElraft)

Ratified and Presented to Governor July 3, 2012

HB 819 Coastal Management Policies (McElraft) received national media attention for early versions that would limit the data used in calculations of sea level rise for the N.C. coast. Early drafts would have disallowed state and local government use of a sea-level rise scenario that included accelerated rates. Instead, early versions directed use of a state-developed rate of sea level rise, which in turn could only use historical data in determining the rate. This limitation would have affected local government decision-making related to protecting infrastructure projects such as water and wastewater treatment plants and underground pipe systems, stormwater control devices, roads, and bridges.

The final version of this bill removes local governments from the prohibition. Instead, it prohibits the development of sea level change rates for state-level regulatory purposes before July 1, 2016. Further, the bill allows only the Coastal Resources Commission to develop such a rate, which it must do following many directives listed in the bill.

The bill also includes other coastal environmental regulations addressing replacement of large residential structures within ocean hazard setbacks, areas of environmental concern, and inlet hazard areas of concern. 

Contact: Erin Wynia, 919.715.4126.

 

SB141 - Law Enforcement/Various Other Changes (Apodaca)

S.L. 2012-168
Eff. September 1, 2012

SB 141 Law Enforcement/Various Other Changes (Apodaca) is an omnibus public safety bill containing one provision of interest to public water supply systems, regarding trespass to "any facility used or available for use in the collection, treatment, testing, storing, pumping, or distribution of water for a public water system." The bill heightens the class of a violation for individuals who trespass on those facilities from a Class 2 to a Class A1 misdemeanor. In addition, a trespass action is now a Class H felony if committed with the intent to disrupt normal business operations or if it places either the offender or others on the premises at the risk of serious bodily injury. These same provisions also apply to electric power facilities and liquefied natural gas or propane storage facilities.

Contact: Erin Wynia, 919.715.4126.

 


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REGULATORY REFORM

M SB810 - Regulatory Reform Act of 2012 (Rouzer)

S.L. 2012-187
Eff. July 16, 2012

After overhauling the state's regulatory process last session, legislative leaders advanced SB 810 Regulatory Reform Act of 2012 (Rouzer) to further tweak the overhaul of the rulemaking and contested case processes. The law makes clarifying adjustments to the N.C. Administrative Procedures Act (APA), which received a makeover last session in the Regulatory Reform Act of 2011. This session's adjustments include a clarification that prior to publication of a rule in the N.C. Register, a rulemaking body must "pre-clear" the rule with the Office of State Budget & Management for conformity with certain aspects of the APA. The adjustments also clarify that a rulemaking body must approve a fiscal note prior to submitting a rule for publication in the Register.

Finally, the law identifies the N.C. Office of Administrative Hearings (OAH) as an agency for the purposes of administering programs under the federal Clean Water Act (CWA), a change needed to ensure the state retains its ability to implement the law when OAH makes final decisions on contested cases arising under the CWA.

This law contains other provisions related to the environment and natural gas extraction, described elsewhere in this Bulletin. It also contains several provisions designed to ease regulation of certain business practices.

Contact: Erin Wynia, 919.715.4126

 

SB851 - Boards and Commissions Efficiency Act of 2012 (Brown) 

Not Passed

Legislators failed to pass another effort at large-scale reform of the state's regulatory process with SB 851 Boards and Commissions Efficiency Act of 2012 (Brown). The bill would have either eliminated or reduced representation on nearly 100 state boards and commissions. Affected boards of interest to municipalities would have included (in bill order): N.C. Child Fatality Task Force, Coastal Resources Advisory Council, N.C. Economic Development Board, N.C. Geographic Information Coordinating Council, Governor's Crime Commission, N.C. Advisory Commission on Military Affairs, N.C. Coastal Resources Commission, N.C. Commission on Workforce Development, and N.C. Environmental Management Commission.

Contact: Erin Wynia, 919.715.4126

 


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NATURAL GAS EXTRACTION

SB 820 -- Amend Environmental Laws 2012 (East)

S.L. 2012-143
Various Eff. Dates July 2, 2012-October 1, 2012

The General Assembly overrode Governor Perdue's veto of SB 820 Clean Energy and Economic Security Act (Rucho), which legalizes natural gas extraction. However, no extraction will take place without years of writing regulations and consulting with various groups, including cities and towns. The law puts in place a framework for creating the rules and regulations surrounding the practice, but they must gain legislative approval before going into effect. Thanks to the many League members who called legislators and testified during committee meetings throughout the debate, the League successfully fought back attempts to preempt all local government authority to set restrictions around this industrial activity, and gained a municipal seat on a newly-created Mining & Energy Commission. The Commission will write and oversee all natural gas extraction regulations.

In tandem with the rulemaking process, local governments, through the League and the N.C. Association of County Commissioners, will participate in three separate stakeholder groups. Two of these groups -- one studying the issue of local ordinances to regulate the industry, with the other studying industry funding of local impacts (road damage primarily) -- will make legislative recommendations to a new Joint Legislative Commission on Energy Policy. A third and larger stakeholder group would include the League in discussions that would lead to the rulemaking proposals for the Mining & Energy Commission, which may begin work August 1.
 
Contact: Erin Wynia, 919.715.4126
 

M SB 810 -- Regulatory Reform Act of 2012 (Rouzer) 

S.L. 2012-187
Eff. July 16, 2012

SB 810 Regulatory Reform Act of 2012 (Rouzer) swaps two sets of qualifications for members of the newly-created N.C. Mining and Energy Commission between legislative and gubernatorial appointments. The legislature approved appointments to the Commission before adjourning; the one municipal seat on the Commission will be filled by City of Sanford Council Member Charles Taylor. The seat, an appointment by the Speaker of the House, expires June 30, 2016.

Contact: Erin Wynia, 919.715.4126

 

M HB 953 -- Amend Environmental Laws 2 (Gillespie)

Ratified and Presented to Governor Perdue July 3, 2012

Under changes to the deadlines included in HB 953 Amend Environmental Laws 2 (Gillespie), natural gas extraction workgroups that include the League (described above in SB 820) would have fourteen months instead of SB 820's original five to form legislative recommendations regarding:

  • Sources and distribution of funding between state and local entities impacted by development of the natural gas extraction industry
  • Local government regulation of the industry

Contact: Erin Wynia, 919.715.4126

 


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EXTRATERRITORIAL JURISDICTION (ETJ)

M HB 1043 ETJ Restriction (LaRoque)

Not Passed

Thanks to all who worked with us to stop HB 1043 ETJ Restriction (LaRoque) to virtually eliminate all ETJs in North Carolina.  Please work with your legislators to help build understanding and have open discussion about the current utility of ETJs and how we might improve citizen communications in those areas, while still ensuring proper zoning and protection of property values. 

Contact: Kelli Kukura, 919.889.9040

 

M SB 949 Town of Boone / ETJ (Soucek)

Not Passed

We were successful in stopping SB 949, which would have completely eliminated Boone's 1-mile ETJ and was being eyed as a vehicle to strip other towns of their ETJs as well.  ETJs were a significant item of discussion in the General Assembly this session.

Contact: Kelli Kukura, 919.889.9040 

 

HB 1227 Disapprove New River Basin Rule (Jordan)

Not Passed

We were successful in stopping a related bill to SB 949 that also attacked the Town of Boone.  This bill, HB 1227, would have eliminated a critical water project for the community. 

Contact: Kelli Kukura, 919.889.9040

 


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WATER & SEWER SERVICE EXTENSIONS

SB 382 - Amend Water Supply/Water Quality Laws (Moore)

Not Passed

In the last few days of session, we were successful in defeating SB 382, a bill aimed at the city of Durham and also impacting all other municipalities.  While it failed, we include it in this report as it is an important example of legislative concerns municipalities face at the General Assembly.  The bill language originally required that a city that extends water and sewer service anywhere in a "designated urban growth area" a term undefined in law MUST provide water and sewer service to a property owner/developer requesting it, regardless of any extenuating circumstances.  This bill was brought without warning by Rep. Tim Moore, House Rules Chair, in the last few days of the legislative session.  A bill that had already passed the Senate was stripped and replaced with this language in the House.  The bill then only had to return to the Senate for a concurrence vote.  Rep. Moore brought the bill for a friend, who is the attorney for the developer of a project south of Durham.  We fought the bill hard and the Senate did not concur, sending the bill to a conference committee of House and Senate members.  The bill was rewritten in the conference committee report to require that any property owner requesting voluntary annexation  under specific circumstances related to the Durham situation  must be provided water and sewer service by the city.  The bill continued to set a bad precedent and was an overreach into matters that should be resolved locally, by locally elected municipal officials. The conference committee bill was brought forward and failed in the Senate. Rep. Moore requested it be reconsidered, and it failed a second time in the Senate  a highly unusual series of events.  While we are very thankful to many House and Senate members who saw this as an intrusion into local municipal matters, including Rep. Luebke, Rep. Michaux, Rep. Hackney, Rep. Glazier, Senator McKissick, Senator Stein, Senator Brunstetter and several others, the fact that the General Assembly members are at all considering taking these matters out of the hands of local city councils is a concerning trend. 

Contact: Kelli Kukura, 919.889.9040

 

SB 472 - Kinston Public Enterprises (Purcell, LaRoque)

Not Passed

This bill, SB 472, which we fought hard and which did not pass, required that water rates for non-city residents be the same as those for taxpaying residents in Kinston.  A plan to extend this to other towns was also rumored.  The bill was very damaging to Kinston and would have set a horrible statewide precedent.  We were successful in fighting the bill and getting it re-referred back to committee, where it died.  Again, another indication of a concerning trend. 

Contact: Kelli Kukura, 919.889.9040

 


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FINANCE & TAXATION

SB 426 Public Finance Laws/Municipal Service Districts (Clodfelter)

S.L. 2012-156
Effective June 28, 2012

Exempts from the pre-audit requirement any contract, agreement, or purchase order for an obligation (or related document) that has been approved by the Local Government Commission.  Allows adoption of a revenue bond order after an application to the LGC is submitted, rather than after it is accepted for submission.  Permits a resolution defining a municipal service district to be immediately effective if special revenue bonds may be used for the project (currently only for general obligation bonds).

Contact: Karl Knapp, (919) 715-9768

 

HB 457 Municipal Electric Utilities/Rate Hearings
(Farmer-Butterfield)

S.L. 2012-167
Effective October 1, 2012

Requires the NC Municipal Power Agency and its member cities to conduct a public hearing prior to changing rates and to provide two weeks newspaper notice of such hearings.

Contact: Karl Knapp, (919) 715-9768

 


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GOVERNMENT OPERATIONS / PERSONNEL

SB 94 - PSAPS Technical Standards (Pushed by Rep. Faircloth)

S.L. 2012-132

As part of the ongoing battle with the 911 Board over the creation of a fair and appropriate funding system for Public Safety Answering Points, SB 94 delays the implementation of onerous operating standards until January 1, 2014. Once effective, these standards will render a significant number of 911 facilities ineligible to receive 911 fees.  The bill does not alter the funding mechanisms currently being used by the 911 Board, or impose changes to the operations of the 911 Board.  The League supported and pushed for this legislation.

Contact: Paul Meyer, 919.715.3930

 

HB 843 - Modernize NC Emergency Management Act (Martin)

S.L. 2012-12

The General Assembly undertook a massive rewrite and reorganization of the state's emergency management statutes during the 2012 Short Session.  Although the bill is mostly technical, one portion of HB 843 is particularly relevant for municipal officials.  During locally declared states of emergency, municipalities can restrict the possession, transportation, sale, purchase, storage and use of gasoline, and "dangerous weapons and substances," but can no longer restrict or prohibit lawfully possessed firearms or ammunition.  This change is the result of a recently decided court case.

Contact: Paul Meyer, 919.715.3930

 

HB 111 - Amend Firearms Laws (Hilton, Barnhart, Steen, Hastings)

Did Not Pass

This bill attempted to amend new gun laws which were enacted during the 2011 Long Session, including more firmly defining the term "recreational facility."  Under changes made last session, cities were no longer able to restrict guns in parks, other than in areas described as "recreational facilities."  The final version of HB 111 greatly restricted the definition of a recreational facility, and also eliminated the ability of local governments to regulate guns in greenways and paths.  The League fought the bill, and ultimately the bill stalled in the Senate Finance Committee at the end of the session. 

Contact: Paul Meyer, 919.715.3930

 


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LAND USE / ZONING / PERMITTING

SB 731 - Zoning/Design and Aesthetic Controls (Clodfelter)

Did Not Pass

This bill passed the Senate during the 2011 Long Session. It was designed to greatly limit the ability of cities to protect existing neighborhoods from incompatible development by significantly restricting the use of design and aesthetic controls on residential development through conditional rezoning processes.  It is through this public process that individual communities can establish and protect a "sense of place" and a community look and feel.  Proponents of the legislation argued that design controls were driving up the cost of development unnecessarily.  Thanks to a robust grassroots effort by impacted cities and towns, the legislation stalled in the House of Representatives as the session ended.  The legislation was supported and promoted by the N.C. Homebuilders Association and opposed by the League.

Contact: Paul Meyer, 919.715.3930

 

SB 428 - Selective Vegetation Amendments/W&S Study (Clodfelter)

Did Not Pass

During the 2011 session, the General Assembly greatly restricted the ability of local governments to regulate billboards in their communities through SB 183SB 428 attempted to return some of that authority to define the look and feel to local communities without reversing the expanded cut zones from SB 183, and it was supported by the League.  After being approved by the House Environment Committee, the bill stalled in the House of Representatives and never was calendared for a vote.  Reps. Carney, McGrady, and Samuelson all pushed for this important proposed legislation.

Contact: Paul Meyer, 919.715.3930

 

SB 231 - Incorporation/ETJ Study (Hartsell)

Did Not Pass

At the request of Sen. Hartsell and Rep. Larry Brown, the League worked to develop proposed legislation to modernize the incorporation statutes.  As the bill advanced and was debated, it ultimately became loaded up with issues beyond incorporation standards, was converted to a study, and eventually died under its own weight.  In light of changes in the annexation statutes, we expect additional efforts to tighten the requirements for incorporation in future sessions of the General Assembly. 

Contact: Paul Meyer, 919.715.3930

 


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PUBLIC SAFETY

HB 673 -- Street Gang Nuisance Abatement (Faircloth)

S.L. 2012-28
Eff. October 1, 2012

HB 673 Street Gang Nuisance Abatement provides that real property erected, established, maintained, owned, leased, or used by any criminal street gang for the purpose of conducting criminal street gang activity constitutes a public nuisance and is subject to the procedures for the abatement of public nuisances. It is modeled after a successful law in Texas that has been used to break up gang activity. Once property used to conduct street gang activity is subject to the state's public nuisance laws, a judge then has broad powers to work to break up the gang, including prohibiting members from associating with one another. The League thanks Rep. Faircloth for his support of this bill.

Contact: Kelli Kukura, 919.889.9040

 


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RETIREMENT ISSUES

A pair of bills attempted to clean up loopholes in the statutes, while a third took a hard look at fraud in the state and local retirement systems.

SB 803 - Retirement Administrative Changes (Stevens)

S.L. 2012-178

While this bill makes a number of changes, the most significant change is an alteration to the power of the Local Government Employees' Retirement System Board of Trustees to award cost of living adjustments to retirees.  The LGERS Board will now be able to award COLAs if there are sufficient investment gains available in the system, with a cap of 4%.  This change should prevent gains related to system experience and assumptions resulting in a COLA.

Contact: Paul Meyer, 919.715.3930

 

SB 804 - Retirement Technical Changes (Stevens)

S.L. 2012-130

This bill closes loopholes and makes a number of conforming changes to the retirement systems.

Contact: Paul Meyer, 919.715.3930

 

HB 1074 - Stop Fraud, Waste, and Abuse in Govt Act (Moffitt)

S.L. 2012-185

As part of ongoing efforts by the Office of State Treasurer to weed out pension fraud throughout all the NC retirement systems, HB 1074 provides new powers to a "Fraud Detection Unit" and makes other changes to facilitate fraud investigatinos.  These new powers include the ability to access documents, personnel files, and materials.  Additionally, the bill provides whistleblower protections in the Local Government Retirement System for individuals providing information on pension fraud.  A portion of the draft bill which created a presumption of guilt against individuals being investigated for fraud was eliminated as the bill moved forward.  The League was in support of HB 1074.

Contact: Paul Meyer, 919.715.3930


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SWEEPSTAKES

HB 1180 - Video Sweepstakes Entertainment Tax (Owens)

Not Passed

Late in the session, several members of the N.C. House of Representatives made a push to generate additional revenue for the State by legalizing and taxing video sweepstakes games. HB 1180 Video Sweepstakes Entertainment Tax was heard in the House Finance committee, but the bill was never brought to a vote after it was determined that there were too many questions surrounding the games and the outcome of a N.C. Supreme Court case expected to be decided this fall. Still, because this bill could be used as the framework for future sweepstakes legislation, the League worked extensively with the bill sponsor to ensure that municipal needs were considered. The final version of the legislation allowed municipalities to tax sweepstakes cafes at a rate of $1,500 per location and $750 per machine, and it returned 3 percent of the state tax on the games to municipalities for public safety needs. The League thanks bill sponsor Rep. Bill Owens for working with us and considering the needs of municipalities in this bill.

Contact: Kelli Kukura, 919.889.9040

 


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TRANSPORTATION

In addition to numerous budget changes, there were a number of policy changes made in the area of transportation.

HB 950 - Modify 2011 Appropriations Act (Brubaker) and
SB 187 - Modifications/2012 Appropriations Act (East)

S.L. 2012-142 and S.L. 2012-145

The state budget bill and its accompanying modification bill contain a number of provisions which impacted transportation:

1) Relief for Cities on Relocation of Utilities related to DOT projects A number of cities are having trouble paying for utility relocation costs as the result of DOT projects. The League pushed for and helped obtain relief for cities who are unable to reimburse the NCDOT during the first three interest-free years, by lowering the interest rate from 8% to prime plus 1% in out years. We will continue to work with the NCDOT on this important issue for city governments. 

2) Codify Mobility Fund Formula The Mobility Fund and funding criteria are now anchored in statute.

3) Paving of secondary roads will now be based on a statewide prioritization, rather than localized distribution formulas.

4) RPOs/MPOs are subject to requirements of the State Ethics Act, and the initial Statement of Economic Interest is due to the State Ethics Commission no later than April 15, 2013.  Presumably, these requirements will apply to anyone associated with MPOs/RPOs, including staff and advisory members.  The League attempted to exclude advisory members and staff, but the bill proponents were not interested in applying restrictions.

5) Ferry Tolling Following significant back and forth on whether to increase ferry tolls called for in the 2011 budget bill, the GA opted to delay all increases to the 2013-14 fiscal year, instead transferring $2M from the Mid-Currituck Bridge project to plug the budget gap created by not applying ferry toll increases (see SB 187).

6) Study Interstate 95 Tolling  Report back to the NC General Assembly due no later than March 1, 2013, and a restriction on the NCDOT to establish and collect tolls on I-95 prior to July 1, 2014.

HB 1077 - PPP Pilot Toll Project (Frye, Mills)

S.L. 2012-184

This bill establishes new powers for the NCDOT to enter into public private partnership arrangements for toll road projects, and it establishes a pilot project for PPP investments.  Bill proponents argued it is only through PPPs that the state will be able to deliver transportation infrastructure into the future, short of massive revenue infusions. 

Contact: Paul Meyer, 919.715.3930

 


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UTILITIES

HB 1114 - NCEMPA/Use of Rate Revenue (Brawley)

S.L. 2012-181
Effective July 1, 2014

This bill impacts the member cities of the NC Eastern Municipal Power Agency, and it restricts the ability of those cities to transfer funds from their electric fund to the general fund of the town.  Funds transferred cannot exceed the greater of 3% of the gross capital assets of the electric system at the end of the preceding year, or 5% of the gross annual revenue of the system for the preceding year.  Earlier versions of the bill imposed greater restrictions on the ability of NCEMPA cities to transfer revenues.  We expect a push for more restrictions on the operation of city enterprises in future years. Currently these restrictions apply only to Clayton, Selma and Smithfield.

Contact: Paul Meyer, 919.715.3930

 


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Thank You

Ellis Hankins, League Executive Director, thanks our Governmental Affairs team, under the leadership of Kelli Kukura, for their hard work, tenacious efforts and effective representation of our municipal membership during a very challenging legislative session.

He also thanks the President of the League Board of Directors, Latimer Alexander, the other officers and members of the League Board of Directors, and members of our legislative action committees for the sound policy direction and active involvement in our state legislative lobbying efforts. Thanks to your efforts, we entered the 2012 legislative session with very clear Municipal Advocacy Goals established by our members in 2011 and updated in 2012.

We thank you for your commitment to the citizens of North Carolina.

 

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