Skip to Main Content



^ Back to Top

Budget and Tax Plan Soufflé

As the House of Representatives continues to digest the Senate's 414-page state budget proposal, policy bills continue to move through the chambers -- reducing the pressure we typically expect to move mounds of bills in the late, waning hours of the session. All this motion suggests that the body is positioning itself for a more orderly long session adjournment. We continue to work these bills, in addition to the budget and tax proposals. The House Appropriation subcommittees are meeting today (Friday), and the League will have full details of the provisions impacting cities soon after they are available (see below). Meanwhile, the revenue picture remains unclear as the House nears approval of its tax reform package (also discussed below). With all the pieces soon to be in the pot, it will be interesting to see how the leadership in both chambers mix very differing priorities together to craft a final budget/tax package during an impending conference committee, which will begin as soon as the House budget is adopted, and summarily rejected by the Senate.
^ Back to Top

House Committee Adjusts Tax Reform Provisions Affecting Cities

On Tuesday, the House Finance Committee adopted a committee substitute for the House tax reform package, HB 998 Tax Simplification and Reduction Act. The League’s chart comparing the three major tax reform bills has been updated to reflect the changes to HB 998.

The new version of HB 998 includes different provisions for how cities and towns would be reimbursed for the loss of revenue due to the elimination of the electricity and natural gas franchise taxes. The previous version of HB 998 provided that each city and town would receive distributions each year in the future equal to the amount it received in electricity and natural gas franchise tax distributions for FY 13-14. The new version of the bill will continue to keep city electricity and natural gas revenue at the FY 13-14 level or higher, but only if sales of gas and electricity do not decline below the FY 13-14 level. While such a decline in electricity sales is unlikely, the sensitivity of natural gas sales to winter temperatures makes a decline in these sales more possible. Even with the changes, HB 998 remains the tax reform bill that appears most likely to preserve municipal revenues.

When the bill was considered in committee, a group of Republican Representatives joined with Democrats to remove the bill's provisions limiting the income tax deductions for home mortgage interest and charitable contributions. This amendment, which was opposed by the bill sponsor, significantly increased the amount of State revenue that would be lost as a result of the bill. An attempt to remove the amendment in the House Appropriations Committee on Wednesday was unsuccessful. Following a meeting of the House Republican Caucus the amendment was removed at an Appropriations Committee meeting on Thursday, though the cap on deductions for charitable contributions is no longer in the bill. The House gave preliminary approval to the bill this afternoon (Friday). Contact: Karl Knapp


^ Back to Top

Budget Consideration in House Begins

The House Appropriations subcommittees began the budget process this morning (Friday) by hearing presentations about their proposed committee reports and considering amendments to the reports. House leaders have indicated that the full budget bill will be made available on the General Assembly website over the weekend, and that the bill will be debated in the full Appropriations Committee on Tuesday. WRAL has collected links to all of the budget subcommittee documents distributed Friday morning here. Initial reading of those proposed subcommittee reports discussed Friday morning indicate that, among other things, the House budget proposal will not include language related to transportation reform as the Senate's budget does; will include a requirement that local governments served by a volunteer fire department make up any shortfall in the Worker's Compensation Fund for Volunteer Safety Workers, effective in 2016; and fund the Clean Water Management Trust Fund through both recurring appropriations and 25 percent of deed stamp revenues. If the full budget bill is released this weekend as planned, a summary of the House budget provisions affecting cities and towns will be posted on the League website on Monday. Contact: Karl Knapp
^ Back to Top

Court of Appeals Issues Important Ruling for Cities

The North Carolina Court of Appeals ruled in favor of the Town of Chapel Hill in King v. Town of Chapel Hill earlier this week, upholding the legality of the town's towing ordinance and reaffirming the broad police power authority intended by the General Statute 160A-174. The Town of Chapel Hill defended themselves in the lawsuit, and the League joined the town's defense by filing an amicus brief in support of their position. A lower court's ruling threatened municipal towing ordinances across the state, and the League thanks the Town of Chapel Hill for their efforts on behalf of municipalities across the state. See here for the League's press release on the ruling. Contact: Paul Meyer
^ Back to Top

District Days! A Roaring Success

What a difference a (District) Days! made. More than 150 municipal officials over a four-month timeframe made the trip to Raleigh to meet with legislators about key municipal issues like tax reform, electronic notice, transitional hold harmless, regulatory reform, water and sewer, the budget and more. We know of formal appointments kept with close to 100 legislators AND there were additional impromptu conversations with legislators by hometown mayors, managers, council members, clerks, business leaders and more. Your engagement has made a noticeable difference in discussions and decisions at the General Assembly. Thank you for your overwhelming commitment to District Days! Contact: Jennifer Webb
^ Back to Top

House Approves Hydraulic Fracturing Bill

Two House committees swiftly considered a re-write of the Senate-approved version of SB 76 Domestic Energy Jobs Act this week, with the full House giving final approval today. The House version of this bill, which would change the process currently underway to approve rules regulating hydraulic fracturing, differed significantly from the Senate version approved earlier this session. While the Senate version would have allowed the issuance of permits for hydraulic fracturing regardless of whether the legislature had approved the rules currently being written, the House version would not allow those permits to be effective until the legislature had approved the rules. In addition, important to cities and towns, the House version of this bill specifically directed the State to recommend the appropriate level of funding to recover all costs incurred by local governments related to emergency response for any hydraulic fracturing-related emergencies. The bill now returns to the Senate for a concurrence vote. Contact: Erin Wynia


^ Back to Top

ACTION ALERT: Contact Senators Regarding DMV Contractor Fee Bill

A bill that would reduce the savings local governments experience from the new Tax & Tag Together program by increasing payments to tag agents who will collect local government property taxes under the program is likely to be heard in the Senate next week. SB 305 DMV Commission Contract Changes increases the per transaction fee these contractors can collect when they process vehicle registrations and collect property tax, with no requirement that the additional revenues are used to add positions to increase the efficiency of this process. Increasing the fee paid will reduce the savings local governments are expected to see once the new Tax & Tag Together program is fully implemented. Contact your Senators this weekend and let them know that this bill will impact local government revenues. Contact: Paul Meyer
^ Back to Top

Transfer of Charlotte Airport Ownership Advances in House

Ownership of the Charlotte airport would be transferred from the City of Charlotte to a newly-created regional authority under a bill advanced by the House Transportation Committee Wednesday. The version of SB 81 Charlotte Regional Airport Authority considered by the committee is largely similar to the version previously passed by the Senate, although the House bill reduces the size of the airport authority board and eliminates a provision that allowed for 90 days to transfer airport control. Charlotte city manager Ron Carlee addressed the committee and asked for additional time to study all modes of airport governance with members of the Mecklenburg County business community. Legislators opted to move forward with the bill. For more on the committee meeting see here. SB 81 will next be considered by the House Finance Committee. Contact: Paul Meyer
^ Back to Top

Deannexation Bills Move Forward

Legislators worked on a series of local deannexation bills this week, including two that were not requested by the municipality affected. On Monday the House gave its final approval to SB 269 Salisbury/Deannex Rowan Cty Airport Property, which became law upon passage and deannexed Rowan County Airport property from the City of Salisbury. Wednesday the House Finance Committee voted in favor of HB 568 Asheville Deannexation, which deannexes the Asheville Regional Airport from the City of Asheville. That bill will next be considered by the House Government Committee. The Senate State and Local Government Committee also passed several deannexation bills, all of which were said to be supported by the affected communities. They included Kannapolis (HB 261/HB 302), Shelby (HB 409), Marshville (HB 421), and Lumberton (HB 567). Contact: Paul Meyer
^ Back to Top

Bicycle and Pedestrian Prohibition in Transportation Reform Adjusted

The Senate Finance Committee approved a slightly modified version of HB 817 Strategic Transportation Investments this week. The new version of the bill makes changes to the prohibition of the use of Powell Bill funds for non-federally-funded bicycle and pedestrian projects. The League had asked that this prohibition be modified to apply only to projects not located in the right-of-way. The bill was changed so that the prohibition applies only to "independent" projects. League staff do not believe that this modification is clear enough to preserve existing municipal authority to use Powell Bill funds for bicycle and pedestrian projects, and staff will continue to seek a clearer change to the bill. The new version also exempts from the prohibition those projects for which funds are obligated by October 1, 2013 for construction in fiscal years 2012-13 though 2014-15.  Contact: Paul Meyer
^ Back to Top

Separate Underground Digging Provision Advances in House

The House rewrote and approved a Senate proposal that would affect procedures followed by water and wastewater utilities pursuant to the state's underground digging laws this week. The proposal, SB 9 Utilities/Design/Location Services, originally circumvented a more comprehensive overhaul of the state's underground digging laws. These laws are also known as the "811" laws named after the "call before you dig" phone number excavators must dial to notify utilities -- including water and wastewater utilities -- of planned digging activities. SB 9 addresses requests for utility line location for design activities such as surveying, rather than planned digging activities. The League has participated in a broad stakeholder effort for the comprehensive overhaul, and the House-approved language in SB 9 now aligns with language being negotiated in the broader stakeholder effort. The League expects the language approved in SB 9 to appear in the overhaul bill, HB 476 Rewrite Underground Damage Prevention Act. Contact: Erin Wynia
^ Back to Top

Cell Tower Bill Advances in Senate

A further modified HB 664 Cell Tower Deployment Act received a favorable report in the Senate Finance Committee on Thursday. The bill gives cities the authority to block wireless facility collocations due to public safety and zoning considerations. The League has worked extensively with bill sponsors and the wireless industry on this bill, and though there were some modifications made in committee to conform the bill’s language, the League’s substantive negotiations were untouched. The modified bill will be heard by the full Senate on Tuesday. Contact: Paul Meyer
^ Back to Top

House Limits MPO/RPO Ethics Requirements to Voting Members

SB 411 Ethics Requirements for MPOs/RPOs passed the full House easily on Wednesday. The bill, which limits ethics requirements such as a statement of economic interest only to voting members of MPOs and RPOs, will correct an issue that arose out of legislation passed in the 2012 legislative session. That legislation expanded ethics requirements to MPO and RPO employees and members of advisory committees, a far wider scope than was intended. The League has been working on the issue since last year and thanks SB 411 sponsors Senators Bill Rabon and Kathy Harrington for their assistance. Because the House version of the bill differs somewhat from the version that passed the Senate, the Senate will vote to concur on the House version next week. Contact: Paul Meyer
^ Back to Top

Senate Poised to Consider League Reg Reform Goal

The Senate Appropriations Committee approved a House bill this week that would accomplish a regulatory goal chosen by League members to streamline the process for repealing unnecessary, unduly burdensome, or inconsistent rules. HB 892 No Fiscal Note for Rule Repeal, already approved by the House, would relieve state agencies proposing to repeal an existing rule from the responsibility to prepare a fiscal note on that repealed rule. The Senate had already approved the same language contained in HB 892 when it included the proposal in its omnibus regulatory reform bill, SB 612 Regulatory Reform Act of 2013, earlier this session. Accordingly, the committee made no changes to the House version of HB 892. The full Senate intends to hear the bill Tuesday. Contact: Erin Wynia


^ Back to Top

Fast-Track Permitting Bill Sent to Governor

The Senate quickly moved a bill that would create a fast-track permitting program for issuance of stormwater permits by the state and local governments through a committee and full Senate vote this week. HB 480 Fast-Track Environmental Permitting directs the N.C. Environmental Management Commission to place into rules a set of minimum design criteria for various stormwater devices. If a device designer seals the design as complying with that criteria, the design would bypass state or local technical review and receive automatic approval. The bill's provisions likely affect local governments implementing stormwater programs other than the Phase I or Phase II federal stormwater programs. The proposal now awaits action by Governor McCrory. Contact: Erin Wynia

^ Back to Top

Bill to Authorize LGC Control of Utilities in Certain Circumstances Advances

SB 207 Maintaining Water & Sewer Fiscal Health received a favorable report on Thursday in the House Government Committee. The bill would authorize the Local Government Commission (LGC) to take full control of a water or sewer enterprise system if a town or city’s financial viability is threatened and certain conditions are met for three consecutive years, based on the unit's audited financial statements. Previously, the LGC could intervene only if the water or sewer entity had defaulted or will default on its own debt. The League supports the bill and believes that the standards for LGC takeover are sufficiently stringent so as not to present an issue for the multitude of well-managed utility systems in the state. The bill will likely be on the House calendar next week. Contact: Karl Knapp
^ Back to Top

Committee Approves Taxpayer Debt Information Act

The Senate Finance Committee gave its approval this week to HB 248 Taxpayer Debt Information Act, which would require bond order information to include an estimate of the interest to be paid on the bond, and would require that any bond referendum include a statement that the bond repayment will include interest and that additional taxes may be required for repayment. The League opposed the original version of the bill because it required the estimate of the amount of interest be written into the referendum. Bond attorneys had indicated to the State Treasurer that this requirement could invalidate a debt issuance because interest rates at the time of the issuance are likely to be different than estimated rates submitted on the ballot. The current version of the bill avoids this problem. Contact: Karl Knapp
^ Back to Top

Senate Introduces Sweeping Solid Waste Landfill Statute Overhaul

The Senate Agriculture, Environment, and Natural Resources Committee approved a major overhaul of the state's solid waste landfill laws after a 45-minute discussion yesterday. The measure, introduced as substitute language in SB 328 Solid Waste Management Reform Act of 2013, would roll back many provisions regulating the siting and operation of municipal solid waste landfills that were passed into law in 2007. Highlights of this bill include: allowing cities and counties to levy a surcharge on existing fees for use of their landfills by other cities and counties, extending the length of permits to thirty-year terms, decreasing certain buffer requirements around landfill sites, allowing landfills to potentially be sited in floodplains, removing requirements for environmental studies prior to siting landfills, deleting current annual requirements for cleaning leachate collection lines, and redefining "leachate." Read a rundown on the committee discussion in this Greensboro News & Record article. Contact: Erin Wynia
^ Back to Top

Regular Mail Allowed for Vegetation/Nuisance Notices

The House Government Committee gave a favorable report on SB 211 Cities/Public Nuisance Notice and SB 209 Cities/Overgrown Vegetation Notice on Thursday without discussion. The two bills allow for notice of chronic violators of public nuisance and municipal overgrown vegetation ordinances, respectively, to be served by regular mail if notice sent by certified mail is unclaimed or refused. Service will be considered sufficient by regular mail if it is not returned by the post office within 10 days and a copy of the notice is conspicuously posted on the property. SB 209 now moves to the House Regulatory Reform Subcommittee on Local Government, while SB 211 will likely be on the House calendar next week. Contact: Paul Meyer
^ Back to Top

Bill Limiting Asheville Utility Transfers Becomes Law

The Senate gave its approval to HB 252 Asheville Transfers this week, meaning that local bill now becomes law. HB 252 rescinds the City of Asheville's authority to spend up to 5 percent of revenues from its water system on street and sidewalk improvements associated with utility projects. The bill goes into effect at the end of this month and does not affect revenues already dedicated to a project under this authority. The future ownership of the City of Asheville's water system is currently uncertain, as the City has filed a lawsuit over previously approved legislation that would transfer ownership of the system to a regional metropolitan sewerage district. If the City maintains control of its water system, HB 252 would eliminate Asheville's ability to spend water revenues on associated street and sidewalk projects. If control of the water system is transferred, HB 252 would remove an unnecessary law. Contact: Paul Meyer
^ Back to Top

Senate Opts Not to Go Along With House on Dix

The Senate voted on Monday not to concur with the version of SB 334 Dorothea Dix Lease passed by the House, sending the bill to a conference committee. While the version previously passed by the Senate immediately invalidated the City of Raleigh's lease with the State for the Dorothea Dix Property, the version passed in the House would not affect the lease until next year, giving the city and the State time to renegotiate the terms of the deal. The City of Raleigh supported the bill passed by the House. Senate and House members will now come together in conference committee to attempt to strike a deal that will satisfy members of both chambers. Contact: Paul Meyer