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Ramping Up Towards Crossover

As bill filing deadlines are nearing, numerous bills impacting cities are being introduced. The pace will quicken rapidly over the next few weeks as both chambers look towards the May 16 "Crossover" deadline - the date by which the vast majority of bills must have been approved by one chamber to be eligible for the remainder of the biennium. A bill will die for the duration of the 2013-14 session if by May 16 it has not "crossed over." Now is the time to contact the members of your delegation if you are concerned about the provisions of a given bill, as little deliberation will take place in committees as the dreaded deadline approaches.
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Legislators Respond To City Concerns, Improve Tax Reform Bill

Leading up to the filing of SB 394 Lower Tax Rates for a Stronger NC Economy, the most comprehensive tax reform legislation introduced in the General Assembly this session, city officials and League staff have been talking with legislators about the impact the bill would have on city revenues. The version of the bill discussed in the Senate Finance Committee Wednesday indicates that municipal concerns were heard, as two changes were made to the bill that would increase the revenue municipalities receive as part of the reform. Under the new version of the bill, cities would receive a distribution of a portion of the new State business privilege license tax, and the distribution formula for the local sales tax on electricity and natural gas would return those revenues to the county where they were collected and distribute 80 percent of that money to cities within the county. The bill still contains revenue reductions for municipalities, including a reduction in the local sales tax on food from 2 percent to 1 percent, elimination of the electricity franchise and beer and wine tax distributions, and elimination of local privilege license taxes. These reductions are compensated for in part by expanding the sales tax base to sectors currently untaxed. Based on this expansion and the changes made to the original version of the bill, fiscal analysis indicates that at full implementation the current version of the legislation would be revenue-neutral for municipalities in the aggregate. City-by-city estimates are not yet available, but bill sponsors have said they are working to develop these estimates and are trying to minimize losses for individual municipalities.

The bill was up for discussion only on Wednesday and was not voted on. When you talk to your legislators about SB 394, please let them know that the current version of the bill has been significantly improved, but that cities would still like to see a hold harmless, by jurisdiction, in the bill to ensure that no municipalities lose revenue as a result of changes to the State tax code. Our thanks go to the bill's sponsors -- Sen. Dan Clodfelter, Sen. Fletcher Hartsell, Sen. Clark Jenkins, and Sen. Wesley Meredith -- for listening to cities' concerns and working with League staff to improve this legislation for all municipalities across the state. Contact: Chris Nida


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Additional Tax Reform Bills Filed

Two additional bills aimed at reforming the State tax structure were filed this week. SB 669 Reduce the Individual Income Tax Rate (Rucho, Rabon, Berger) and SB 677 Corporate Income Tax Reduction & Reform (Rucho, Rabon) would phase in reductions in the State income tax rates over the coming years and, in the case of the personal income tax, reduce the number of income tax brackets so that all those paying the income tax paid the same rate. While both of these bills address the reduction in income tax rates that tax reform proponents have discussed, neither addresses the expansion of the sales tax base that would likely be used to make up for the revenue lost as a result of lower income tax rates. A spokeswoman for Senate President Pro Tempore Phil Berger told the News & Observer that SB 669 was a placeholder for a larger income tax plan that is forthcoming. The League will continue to work with legislators on the details of any tax reform plan and let you know how any proposed sales tax changes impact cities and towns. Contact: Chris Nida
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Legislators Want to See You - District Days!

We hear from legislators every day asking to see our municipal leadership at the General Assembly. They are asking for a constant presence at the buildings so they can hear directly from you how legislation affects N.C. hometowns. They've asked and we're answering with District Days!

District Days! is a coordinated effort to have regional groups of mayors, managers and municipal leadership in town visiting with legislators, attending committee meetings and the House & Senate sessions. We'll be setting the agendas for the day and providing talking points. 

District Days! Schedule

  • Tuesday, April 9 - Charlotte Regional Conference of Mayors / NCLM District 8
  • Wednesday, April 24 - NCLM District 9
  • Wednesday, May 1 - NCLM Districts 1, 2 and 3
  • Wednesday, May 15 - NCLM Districts 4 and 5
  • Tuesday, May 21 - NCLM Districts 6 and 7
  • Tuesday, June 4 - NCLM Districts 10, 11 and 12

Contact: Jennifer Webb


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Internet Sweepstakes Legislation Introduced

Following revelations of criminal activity in Florida, and the charitable donation of political contributions from the internet sweepstakes interests by Gov. McCrory and others, a bill has been filed in the N.C. House which legalizes the operation of internet sweepstakes cafes. HB 547 Tax and Regulate Video Sweepstakes would override the existing ban on sweepstakes operations and establish a state regulatory and tax structure for those businesses. As a local option, cities would be able to tax at $1,000 per establishment and $500 per machine -- far less than the taxes currently being levied by many cities. Counties would have identical authority, and the bill allows for combined taxation by cities and counties within the city limit. State taxes would also be authorized. The bill does not preempt local land use controls, which is in line with the League's advocacy goal on this topic. Contact: Paul Meyer
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Bill to Transfer Asheville Water System on the Fast Track

HB 488 Regionalization of Public Utilities (Moffitt, McGrady, Ramsey, Hager) is scheduled to be heard in the House Finance Committee next Tuesday. HB 488 is the long-expected legislation that would force the City of Asheville to transfer its water system to the Metropolitan Sewerage District of Buncombe County, without any compensation for the City. The bill has been described by the bill sponsors as local legislation, impacting only Asheville and its water system, but the bill that has been introduced is a statewide bill containing a handful of provisions to limit the bill's application. The League opposes the bill, as municipalities' control over their own utilities and assets was chosen by League members as a top advocacy goal for the 2013-14 biennium. Contact: Paul Meyer


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House Removes Asheville Water Enterprise Fund Expenditure Authority

The House approved HB 252 Asheville Transfers on a 74-40 vote Wednesday, sending it to the Senate for consideration. The bill eliminates the City’s ability to spend up to five percent of water utility revenues on street and sidewalk repairs done in conjunction with a water project. In a House Finance Committee discussion Tuesday, multiple legislators again questioned whether it was appropriate for the General Assembly to be passing legislation specifically targeting the powers of individual cities. Bill proponents cited concerns over a specific project in the City of Asheville where the associated streets improvements were more costly than the water project itself, and noted the unique history of the City of Asheville water system in explaining the need for the bill. Read the League's report of the Finance Committee discussion. Contact: Erin Wynia


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Two Bills Modify Asheville Territory

In two separate actions this week, House members moved to modify Asheville's jurisdiction. First, the House approved HB 224 Asheville Extraterritorial Jurisdiction and Annexation, which mandates that the City transfer its extraterritorial jurisdiction (ETJ) area to Buncombe County and prevents it from initiating any annexations in the future. This bill also maintains county appointments to the City’s planning board and board of adjustment, even in the absence of ETJ. The second bill, HB 568 Asheville Deannexation, was introduced Wednesday and would deannex certain properties currently within City limits, including the Asheville Airport. The City did not request this second bill. Contact: Erin Wynia


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Local "Carve-Outs" For Aesthetic Controls Introduced

As HB 150 Zoning/Design & Aesthetic Controls sits in the Senate Rules Committee, two local bills have been introduced to exempt individual towns from the impact of the bill. HB 564 Montreat & Biltmore Forest Land Use (co-sponsored, ironically, by Rep. Tim Moffitt, a primary sponsor of HB 150) would immunize the towns of Montreat and Biltmore Forest, and HB 575 Morrisville Zoning Ordinances (Rep. Tom Murry) would exclude a Morrisville downtown business district from the restrictions of HB 150. If your town would like to continue to apply aesthetics and design controls to new development, consider contacting members of your legislative delegation to be added to one of the proposed local bills. Contact: Paul Meyer
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Local Electronic Notice Bill to Receive Hearing

The Senate State & Local Government Committee has scheduled an initial hearing Tuesday for SB 287 Notice Publication by Some Local Governments, a local bill that would allow Greensboro, High Point, Morrisville, and Guilford County to publish legally required public notices online rather than paying for advertisement in a print publication. Municipalities spend upwards of $4 million in taxpayer money annually advertising public notices in newspapers, when most newspaper readers are not looking for public notice information and overall print readership is decreasing. This bill would streamline the process of public notification by letting cities and towns publish public notices on their government websites, as well as use other techniques to disseminate public information. Electronic publication of legally required notices was chosen by League members as one of their advocacy goals for the 2013-14 biennium. In addition, two other bills filed this session give local governments the same authority: SB 186 Notice Publication by Counties and Cities, a statewide bill, and HB 504 Local Electronic Notice, which applies to municipalities located in Buncombe, Guilford, Henderson, Mecklenburg, Mitchell, Perquimans, Stanly, Surry, and Wake counties. Contact: Erin Wynia
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Senators Introduce Skeleton Omnibus Reg Reform Bill

On the last day of bill filing for the Senate, legislators introduced SB 612 Regulatory Reform Act of 2013. The bill contains several unrelated measures and will likely serve as an omnibus regulatory reform bill that includes many environmental law revisions, similar to the conglomerate reg reform bills from the 2012 session. Importantly for cities and towns, this bill would prohibit them from enacting an ordinance that is more strict than any state or federal law when that state or federal law purports to "occupy the field" of regulation on that topic. The League has concerns about this provision and is analyzing any unintended side effects, and working with bill sponsors to address the concerns of cities and towns. Contact: Erin Wynia
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Deannexation Bills Introduced for Three Hometowns

Three bills introduced this week call for deannexations not requested or supported by local officials. HB 500 Kannapolis Annexations would roll back a 2007 law lifting restrictions on satellite annexations and annul any annexations made under its provisions. Lumberton and Asheville also face unrequested deannexations under HB 567 and HB 568, respectively. As mentioned above, HB 568 would deannex property that includes the Asheville Regional Airport from Asheville's corporate limits. Contact: Cindy Plante
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Proposal Overhauls Underground Digging Act

Legislators introduced a comprehensive overhaul of the state's underground digging laws, also known as the "811" laws after the phone number excavators must dial to notify utilities of planned digging activities. HB 476 Rewrite Underground Damage Prevention Act represents the culmination of months of negotiations between representatives of the League, contractors and other excavators, and utilities with underground lines such as natural gas, electricity, and cable. The League supports this compromise legislation, which would require all cities and towns with underground utilities subject to the act to join the NC 811 notification center. However, the bill would exempt cities from the requirement to mark -- or provide a "locate" -- for all gravity-fed wastewater lines installed prior to the law's effective date, and all stormwater facilities. Contact: Erin Wynia
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Bill Would Eliminate Weaverville ETJ

Reps. Tim Moffitt and Nathan Ramsey introduced a bill this week to take away the Town of Weaverville’s extraterritorial jurisdiction (ETJ) powers. Similar to HB 224 Asheville Extraterritorial Jurisdiction and Annexation, HB 531 Weaverville ETJ would eliminate the Town of Weaverville’s ETJ powers as of July 1, 2013. The existing rules would remain in place until Buncombe County adopted regulations for the area or 120 days, whichever was sooner. Unlike the Asheville ETJ bill, this bill does not change Weaverville’s annexation powers. The League opposes this bill and other efforts to eliminate ETJ and is advocating for reasonable reforms to the current system. Read more about the issue here. Contact: Paul Meyer
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Greenway Standards Bill Would Accomplish League Advocacy Goal

SB 653 DOT/Oversight Standards for Greenways, introduced Tuesday, would require the N.C. Department of Transportation to adopt appropriate standards for greenway construction by the end of 2013. This bill would achieve a League Municipal Advocacy Goal, creating standards so that greenways, bikeways, and other pathways not designed to accommodate mechanized vehicles would no longer have to be built to the same standards as roads. The bill's scope is somewhat narrow in that the standards would, at a minimum, apply to projects undertaken by Metropolitan Planning Organization member jurisdictions using funds from the federal Surface Transportation Program. Contact: Jordan Smith
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Senate Bill Proposes Annual Fee for Electric Vehicles

SB 710 Fair Share Contribution for Electric Vehicles would require the N.C. Division of Motor Vehicles to collect a $100 fee on electric vehicles (not including hybrid vehicles) in addition to any other registration fees. This proposal would increase funds available for transportation projects statewide. Electric vehicles produce an equivalent amount of wear and tear on roads as similar-sized vehicles, but because they do not run on gas they pay no money in gas tax, which remains the primary source of transportation funding in North Carolina. The adoption of this fee would help mitigate that discrepancy. Contact: Jordan Smith
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Proposal Would Eliminate Three Turnpike Projects

SB 716 Repeal Certain Turnpike Projts. Auth'n/Funding would eliminate funding for the Garden Parkway (also known as the Gaston East-West Connector), the Cape Fear Skyway, and the Mid-Currituck Bridge, and would remove these projects from the N.C. Turnpike Authority's project list. Read more about this proposal in "Tata Endorses Senate Push to Deauthorize Three Turnpike Projects" (News & Observer Crosstown Traffic blog). Contact: Jordan Smith
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Bills Affect Zoning and Land Use Around Military Bases

Two bills moving in the House this week would affect zoning and land use practices around military bases. The first bill, HB 433 (SB 389) Land Use Surrounding Military Installations, was considered yesterday by the House Government Committee and would prohibit local governments from permitting the construction of any building or structure more than 200 feet high on land near a military installation without prior approval from the N.C. Building Code Council. The League and partners in the development community have raised concern about the Building Code Council approval requirement of this bill; authority for zoning and permitting construction is typically held by local governments and not a state-appointed board.

The second bill, HB 254 Zoning Changes/Notice to Military Bases, was considered Wednesday by the House Judiciary B Committee and would require city governing bodies to provide written notice to the commander of a military base if enacting or modifying an ordinance that would make certain changes to an area located five miles or less from the perimeter boundary of the military base. The changes that require notices are: changes to the zoning map, changes that affect the permitted uses of land, changes relating to telecommunications towers or windmills, changes to proposed new major subdivision preliminary plats, and an increase in the size of an approved subdivision by more than fifty percent of the subdivision's total land area. Contact: Sarah Collins