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LeagueLINC Bulletin: May 17, 2013




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Crossover Week Is Behind Us -- Many City Issues Fixed

Following two solid weeks of committee meetings with loaded calendars to approve bills before Thursday's Crossover Deadline (the date by which all bills which do not involve finance or appropriation must pass one chamber, or die), the General Assembly now shifts its attention to the state budget. The Senate is scheduled to pass its budget by Thursday of next week, and then send it to the House for consideration. We have been told the Senate has no intention of transferring the state's fiscal problems to city governments, which is very encouraging. In the meantime, we will continue to lobby on the wide range of bills and issues impacting cities of all sizes. The expansive Bulletin below captures the highlights of the issues we have been actively lobbying on this week, but know we are always available to fill in details on items we don't list, or answer any questions you may have!  
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House Tax Reform Plan Released

House Finance Committee co-chair David Lewis released the House plan for tax reform this week. While less sweeping than what is expected to come from the Senate, the House plan would still make significant changes to municipal revenues. The plan would eliminate the franchise taxes on electricity and natural gas and thereby the city distribution of such taxes. The local sales tax would be applied to sales of electricity and natural gas with all of the proceeds of the local tax paid for a county distributed only to cities and towns in that county on a per capita basis. The House plan would expand the state and local sales tax base to include alteration, repair, maintenance, and installation of tangible personal property subject to sales tax, as well as such services for automobiles. The purchase of service contracts for such services also would be taxed. Admission charges for most live entertainment, movies, and museums or cultural attractions would be subject to state and local sales tax. The Article 40 1/2-cent sales tax would be reduced to 0.4 cents. All changes would take effect on July 1, 2014, except the tax on admissions charges, which would take effect October 1, 2013. The plan does not eliminate the municipal privilege license tax. The plan also does not include a hold harmless provision, so it is possible that the net effect of the changes on any municipality could be a loss of revenue. League staff will prepare an analysis of the effect of the plan on individual cities and towns as soon as sufficient information is available from the legislative staff to make such estimates. Contact: Karl Knapp
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Senate Budget Coming Sunday

Senate Appropriations Committee Co-Chair Pete Brunstetter announced this week that the Senate budget bill would be available on Sunday, May 19, on the General Assembly website. The bill will be considered by the Senate during the week of May 20th, with floor votes planned for next Wednesday and Thursday. Brunstetter indicated that the funding availability in the budget would reflect reduced revenue due to tax reform, but he did not state that tax reform proposals would be included as part of the budget bill. On Monday, the League will provide details about the effect of the Senate budget on cities and towns. Contact: Karl Knapp
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Work on Transportation Reform Continues -- Plan Analysis Below

While the legislation to institute State transportation funding reform awaits a hearing in the Senate, work continues on the legislation. The League has released its analysis of the most current version of the transportation reform legislation and what it means for the transportation regions around the state. That analysis can be accessed by clicking here or on the picture below. League staff are serving on an N.C. Department of Transportation work group that is working on how this legislation will be implemented upon its passage. The League has convened an informal group of its members to provide feedback to the staff representative to that work group. The NCDOT group's schedule calls for near-weekly meetings through the month of June in advance of anticipated reporting deadlines in July and August. The League will continue to be a part of this process throughout. Contact: Chris Nida


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Electronic Notice Bills Removed From House Calendar, Not Voted On

Three bills allowing for legally required public notices to be published on government websites and by other means instead of in purchased advertising space in print newspapers were removed from the House calendar this week after originally being scheduled for a vote. SB 287 Notice Publication by Some Local Govs and HB 504 Local Electronic Notice both extend electronic notice provisions to certain counties and cities, but were not debated on the House floor. HB 755 DENR Electronic Notice extends similar provisions to the Department of Environment and Natural Resources and was debated on the House floor. During that debate, House members approved on a split vote an amendment that would substitute for the original version of the bill language pushed by the N.C. Press Association that would largely preserve newspaper revenue streams from local governments, and do little to streamline government notification processes. Following the 68-41 approval of that newspaper-backed language, HB 755 was temporarily displaced and was later re-referred to the House Rules Committee along with SB 287 and HB 504. Having not passed the House by the Thursday crossover deadline, HB 504 and HB 755 are not eligible for consideration for the remainder of the 2013-14 biennium. SB 287 has already passed the Senate and remains eligible for a future vote in the House, though none is scheduled at this time. Electronic notice was chosen as an advocacy goal by League members who wish to modernize and streamline their notification efforts and save taxpayers the burden of being required to spend money subsidizing the operations of newspapers across the state. Contact: Paul Meyer
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Slightly Amended Rental Registration Bill Passes House

The League and cities with rental registration and inspections programs worked with the sponsor of HB 773 Local Gov'ts/Bldgs/Structures/Inspections, Rep. Bill Brawley, to suggest changes to the bill before it was voted on, but few of the suggestions were incorporated into the version of the bill that passed the House this week. HB 773 prevents cities from running universal rental registration programs, eliminates the ability to assess fees associated with these programs, and limits the reach of program enforcement measures. Cities use these programs to protect the property values of areas surrounding rental properties and protect the safety and quality of life for city residents, by making landlords accountable for excessive housing violations and tenant-created nuisance and criminal activities. The primary change made to the bill on the floor increases the size of the area cities may target for inspections from 1 square mile to the greater of 1 square mile or 5 percent of the total area within the municipality. HB 773 now awaits Senate consideration. Contact: Paul Meyer
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Roll-Back of Local Smoking Regulations Dies; Local Contacts Key

A Senate committee gave its approval Tuesday to a bill prohibiting municipalities from regulating outdoor smoking on their properties, but the legislation received no further consideration this week, meaning it did not make the crossover deadline and is not eligible for consideration for the remainder of the 2013-14 biennium. SB 703 Limit Local Regulation of Outdoor Smoking would have prevented municipalities from banning smoking on their properties -- including public parks, beaches, and recreation areas -- and prevented the designation of smoking and non-smoking areas on those properties. City officials across the state responded to a League Action Alert and contacted their Senators to let them know of the many reasons they wish to maintain this authority, and these calls were key in the bill not advancing. Thank you to all of our members who contacted their Senators about this bill, and thank you to the many other groups who worked in opposition to the bill as well. Contact: Paul Meyer
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Cell Tower Regulation Bill Modified Before Passage

A modified version of HB 664 Cell Tower Deployment Act passed the House this week after the League worked with bill sponsors and the telecommunications industry on the legislative language. Though the stated intent of the bill was to conform N.C. law with federal law, the original version of the bill went beyond what the federal government requires. The League worked with the bill sponsor and other stakeholders to ease the impact of the bill on municipalities and was successful in doing so before the House voted in favor of the bill. HB 664 now moves to the Senate. Contact: Paul Meyer
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911 Bill Delays Standards, Directs Study of 911 Board

A League-supported bill related to the 911 system was given final approval by the House on Wednesday. HB 345 Increase Penalties for Misuse of 911 System does increase the penalties for those who call 911 when they are not in need of emergency service, but it also contains two additional provisions of importance to municipalities. The bill delays the imposition of operating standards by the 911 Board for an additional year, until January 1, 2015, and it directs a study of several issues related to the state 911 system, including the composition of the 911 Board and the development of operating standards for Public Safety Answering Points. HB 345 will next be considered by the Senate. Contact: Paul Meyer
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'Property Owners Protection Act' Converted to Study

The Property Owners Protection Act (or POPA) was converted to a study bill, HB 632 Property Owners Protection Act/Study, before being approved by the House this week. Among other provisions, the original version of the bill would have put into statute a "Free use of land policy" that would have stated that all "statutes, ordinances, rules, and regulations that affect the free use of land shall be strictly construed against the government and liberally construed in favor of the free use of land." The League had concerns about the practical application of this statute to its municipal members and worked with the bill sponsor, Rep. Tim Moffitt, to have the bill converted to a study. The League thanks Rep. Moffitt for doing so. HB 632 now awaits consideration by the Senate. Contact: Paul Meyer
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Senate Votes to Repeal Jordan Lake Rules

A bill that originally would have provided municipalities with additional flexibility in implementing the Jordan Lake Rules was changed this week to a bill to repeal the rules in their entirety. That bill, SB 515 Jordan Lake Water Quality Act, was subsequently approved by the Senate. Proponents of the bill cited on the floor the lack of improvement in the lake's water quality since the rules were implemented by the legislature in 2009. SB 515 now goes to the House for consideration by that chamber. Contact: Erin Wynia
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House Approves Close Examination of Existing Rules

Following limited debate, the House gave its final approval this week to HB 74 Periodic Review and Expiration of Rules. The bill would give the state Rules Review Commission and the General Assembly itself wider authority to determine whether individual rules -- which have already been approved in accordance with the state's administrative procedures -- must undergo reapproval through rulemaking or expiration. The likely effect of this bill would be a second rulemaking for nearly every environmental rule in the N.C. Administrative Code, which would be time-intensive for the state environmental rulemaking boards and the agencies that support them. HB 74 was sent to the Senate and is awaiting a hearing there. Contact: Erin Wynia
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Fast-Track Stormwater Permitting Bill Approved

The House gave its approval Tuesday to a bill that would create a fast-track permitting program for issuance of stormwater permits by the state and local governments. 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. Revisions made from the original version of the bill include the removal of a section that would have applied these guidelines to sedimentation and erosion control devices, and the addition of a provision to account for the extent to which a designer may be held liable for faulty designs. The League thanks bill sponsor Rep. Chris Millis for working with the League and making these requested changes to the bill to address concerns raised by League members. The bill now advances to the Senate for further consideration. Contact: Erin Wynia
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House Advances Study of Water/Sewer Districts

Without any debate, the House unanimously approved HB 814 Study Water and Sewer Service Districts. The bill directs the Environmental Review Commission to study the statutory models for water and sewer service provision in the state, specifically including Sanitary Districts, Water and Sewer Authorities, Metropolitan Water Districts, Metropolitan Sewerage Districts, and County Water and Sewer Districts. The bill asks the Commission to determine whether any of these statutory models should be reduced and consolidated, and what the impact of any reduction or consolidation would be. HB 814 now heads to the Senate. Contact: Erin Wynia
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Keep On Coming to Raleigh - District Days! Continues

District Days! are scheduled for Tuesday, May 21 for central N.C., and Tuesday, June 4 with western N.C. legislators. But even though these days will be focused on those particular regions, any League member should feel free to come and be part of the day. RSVP with your plans to participate today.

District Days! is a coordinated effort to have regional groups of mayors, managers and municipal leadership in Raleigh having meaningful discussions with legislative leadership and your hometown legislators. 

After seven successful District Days!, there are two more opportunities for you to get involved in affecting legislation for your hometown. These one-on-one visits with legislators are making a tremendous difference. Legislators asked to see you in Raleigh and you are answering the call.

There is no registration fee and we set the appointment schedule. Groups should arrive at the Coates building on the League's campus, then after a short briefing on the Top 3 Hot Issues proceed to the legislature for appointments.

District Days! Schedule
Tuesday, May 21 - Central NC NCLM Districts 6 and 7
Tuesday, June 4 - Western NC NCLM Districts 10, 11 & 12

Contact: Jennifer Webb; 919.715.1726


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League Advocacy Goal of Greenway Standards Moves On

The Senate voted in favor of SB 653 DOT/Oversight Standards for Greenways on Wednesday, advancing a League advocacy goal to the House for consideration. The bill requires the N.C. Department of Transportation to develop construction standards for greenways and similar projects and report on the implementation of the law before the 2014 session of the General Assembly. Cities chose this as an advocacy goal to help assist in the construction of greenways and ensure that they do not have to be built to the same specifications as roads. Contact: Paul Meyer
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House Approves MPO/RPO Study

The House this week unanimously approved HB 378 Study Oversight of MPOs, which creates a Study Committee on Metropolitan Planning Organizations and Rural Transportation Planning Organizations made up of members of the House and Senate. That committee is directed with studying the "organization, structure, and oversight" of MPOs and RPOs, along with the role the MPOs and RPOs play in transportation planning and whether any aspect of the organizations could be altered to better match their role in transportation planning while not running afoul of any federal requirements. HB 378 now moves on to the Senate. Contact: Paul Meyer
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Local Design-Build/P3 Legislation Approved

A bill that would give all local governments the ability to utilize the design-build construction method and public-private partnership financing earned approval from the House on Wednesday. The League supports HB 857 Public Contracts/Construction Methods/DB/P3, which sets out procedures for the solicitation of design-build requests for qualifications as well as the requirements for public-private partnership project financing. The bill would allow these innovative tools for all non-transportation government projects. The League thanks primary bill sponsor Rep. Dean Arp for leading an extensive stakeholder process that included the League, and for responding to stakeholder concerns. HB 857 now heads to the Senate for consideration. Contact: Erin Wynia
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Senate Votes In Favor of Special Assessment Authority Extension

The Senate this week approved SB 103 Critical Needs Assessments, which extends through June 30, 2015 the authority provided to municipalities under Article 10A of G.S. 160A to issue revenue bonds for certain construction projects and use revenue from special assessments to repay the bonds. This authority was set to sunset on June 30 of this year. The bill also makes it easier for the petition requirements of Article 10A to be met, by allowing each owner of a jointly-owned property to sign separately and represent a share of the property, rather than require all owners to sign in order for the property to be counted as approving of the assessment. In addition, the bill would allow the assessment for each property to account for the use to which the property is being put, and to adjust the amount of assessment if the use changes. SB 103 now awaits consideration from the House. Contact: Karl Knapp
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State Region Alignment Advances

The Senate approved SB 127 Customer Srvc., Econ. Dev., and Transport'n this week. SB 127 would establish uniform geographical administrative divisions for the State and require the Departments of Transportation, Environment and Natural Resources, and Commerce to send an employee to work together in the same office in each of those eight divisions. The bill also eliminates funding for four regional economic development commissions and transfers their operations to the Department of Commerce. SB 127 will be considered next by the House committees on Commerce and Transportation. Similar legislation in the House, HB 356 Customer Srvc., Econ. Dev., and Transport'n, did not advance prior to the crossover deadline. Contact: Paul Meyer
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Some Local Deannexation Bills Gain Traction

Three local deannexation bills received final approval from their respective chambers this week. The two approved by the House -- HB 421 Marshville Deannexation and HB 567 Lumberton Deannexation -- were supported by the municipalities they affect. The Senate approved SB 269 Salisbury/Deannex Rowan Cty Airport Property, which deannexes certain Rowan County Airport property from the City of Salisbury and is not supported by the city. That bill now heads for consideration by the House, where legislation similar to SB 269, and several other local deannexation bills not supported by local governments, remain in the House Finance Subcommittee on Deannexation. Contact: Paul Meyer
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Workers' Comp Bill Could One Day Impact Municipal Budgets

Municipalities served by a volunteer fire district would be required to help make up any future shortfall in the workers' compensation fund for volunteer firefighters under the terms of a bill passed by the House this week. HB 27 Workers' Comp Fund/Safety Workers Allocation would place the responsibility for future shortfalls in this workers' comp fund on local governments, based on the number of citizens in their jurisdiction served by a volunteer fire department. The fund currently has no shortfall, so that provision of this bill is primarily a hedge against a future lack of funding. The bill now heads to the Senate. Contact: Paul Meyer
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Technical Changes Made to Unemployment Insurance System

HB 743 UI Laws Administrative Changes passed the House this week, making a series of technical changes to the unemployment insurance reform legislation that was passed and became law earlier this year. Among the changes is a clarification that if any reimbursable employer -- including municipalities -- contributes more money than is required to maintain a reserve fund of 1 percent of taxable wages, the additional money will be kept as a credit toward the fund and will not be refunded to the employer. The bill has been sent to the Senate for consideration there. Contact: Karl Knapp
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Wide-Ranging Environmental Bill Includes Provisions Impacting Cities

The Senate voted in favor of a broad environmental bill this week that includes several provisions affecting municipal operations. Perhaps most notably, SB 112 Amend Environmental Laws 2013 would require any municipality acquiring an ownership interest in property with known contamination to first receive approval from the Governor and Council of State. Typical sources of contamination on properties include old home heating oil tanks, gas stations, closed dry cleaners, and former industrial or manufacturing sites. Due to the prevalence of contaminated property in urban areas, this provision would give the Council of State a veto over most local government projects, including extensions of water and sewer lines, roads, and buildings. The League thanks bill sponsor Sen. Andrew Brock for committing to work out a solution that would not affect such a wide swath of local projects. SB 112 now moves to the House for consideration. Contact: Erin Wynia
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Omnibus County Legislation Not In Conflict With League Goal

One week after the Senate passed its version of Omnibus County Legislation, SB 372, the House approved its version of the bill, HB 458. Both versions allow county commissioners the opportunity for comment before the Environmental Management Commission acts on an application for the land application of biosolids in the county. Biosolids are the byproducts of wastewater treatment that are often used as fertilizer. League members chose as a regulatory advocacy goal keeping the State and Federal governments as the only governments than can regulate biosolid application, but the League determined that the opportunity for county commissioner input into the process is not in conflict with that goal. Both bills now proceed to the other chamber for further consideration. Contact: Erin Wynia
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Bill Allows Cities to Enforce Ordinances on State's Beaches

Cities and towns would be able to enforce their ordinances on adjacent State beaches if HB 300 Cities/Public Trust Rights becomes law. The bill was filed in response to litigation that determined that a coastal town could not condemn property that was on the public beach and creating a public safety hazard for visitors. HB 300 now heads to the Senate for consideration. Contact: Erin Wynia
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Senate Approves Bills Affecting Zoning, Construction Near Military Bases

The Senate took action this week on two bills that would impact city regulation of the building of structures near military bases. HB 433 Land Use Surrounding Military Installations would prevent local governments from authorizing the construction of any building more than 200 feet in height within five miles of a military base unless the N.C. Building Code Council has endorsed the construction. The League had worked with bill sponsors on a previous version of this bill so that the endorsement would come from State Construction Office, but the Senate version of the bill restored this authority to the Building Code Council. This creates a potential problem for military communities wishing to grant development permits, as the Building Code Council meets only quarterly. Because the Senate returned the endorsement authority to the Building Code Council, HB 433 will now return to the House for concurrence. HB 254 Zoning Changes/Notice to Military Bases requires cities to provide the commanders of military bases with notification and the opportunity to comment if certain zoning changes are made within 5 miles of the military base. HB 254 had previously passed the House, but since the version passed by the Senate was amended before passage, it will also now return to the House for concurrence. Contact: Paul Meyer
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Cities Could Be Allowed to Use Regular Mail to Notify Nuisance Violators

Under the terms of SB 211 Cities/Public Nuisance Notice, cities may notify chronic violators of the city's public nuisance ordinance of their intent to take action to remedy the violation via regular mail at the same time they send the notification via registered or certified mail. If the registered or certified mail is unclaimed or refused, but the regular mail notification is not returned within 10 days of the mailing, then the service shall be deemed sufficient. Cities opting to use regular mail must also post a copy of the notice in a "conspicuous place on the premises affected." The fiscal note on the bill indicates that this bill will have no financial effect on municipalities, under the assumption that any costs incurred will be placed as a lien on the property involved. SB 211 now moves to the House. Contact: Paul Meyer
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Temporary Health Care Structures Bill Moves On

A bill to require local governments to permit temporary family health care structures used by caregivers for the physically or mentally impaired passed the House unanimously this week. The League worked with bill sponsors of HB 625 Zoning/Health Care Structure, including Rep. Tim Moffitt, to include certain conditions for the permitting requirement of these structures and to ensure the bill did not have any unintended negative consequences for cities and towns. HB 625 now heads to the Senate. Contact: Paul Meyer
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Abortion Coverage Bill Limits What City Health Plans Can Provide

A contentious bill relating to the provision of abortion and funding for abortions by insurance plans was approved by the House on its final day of business this week. One provision of HB 730 Insurance & Health Care Conscience Protection prevents cities from providing health insurance to their employees that provides greater abortion coverage than the State Health Plan, which limits funding for abortions to instances where the life of the mother is endangered or the pregnancy is the result of rape or incest. A number of Representatives had indicated their intent to debate the bill before a procedural maneuver was used to end debate and call for a vote on the bill, which subsequently passed. HB 730 now moves to the Senate. Contact: Paul Meyer
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House Votes Down Bill to Allow Law Enforcement Officers Special Protections

The House on Wednesday defeated HB 643 Protect Officers from Retaliation, which would have given county and city law enforcement officers the same whistle-blower protections currently held by certain State employees. The bill was opposed by the N.C. Sheriffs' Association and the N.C. Association of Chiefs of Police. The Sheriffs' Association cautioned that the bill was a first step in removing the at-will status of law enforcement employees and would grant law enforcement officers certain rights not held by other county or city employees. HB 643 failed on a 54-56 vote. Contact: Paul Meyer
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Senate-Approved Bill Would Delay Council Votes

The Senate gave its approval to SB 85 Ordinance First Reading Vote this week. The bill would require municipal governing boards to wait 7 days after a public hearing before voting on the matter discussed during the public hearing for certain ordinances, and it would require that any ordinance not receiving a unanimous vote on the day of its introduction not be given final approval until the next regular meeting of the council. Current law allows for ordinances to be adopted on the date of their introduction if they receive approval from at least two-thirds of the council membership. Bill sponsors have worked with the League on changes to improve the bill, which we expect to see as the bill is considered by the House. Contact: Paul Meyer
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Liquor Sales at Distillery to Be Studied

A bill that would have allowed distilleries to sell liquor to individuals who had participated in a tour of the distillery was converted to a study before its passage by the House. HB 842 Study of Spirituous Liquor Sales-Distillery now provides for a study of the issue, along with "any other matters the Committee deems relevant to allowing this type of sale." The initial version of the bill was opposed by the League as a step towards privatization of the ABC system. HB 842 now heads to the Senate. Contact: Paul Meyer
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Bill Limits Employer Access to Employee Social Media Sites

North Carolina employers, including municipal governments, would be forbidden from requiring employees to provide access to the employee's personal social media sites under the terms of a bill passed by the House yesterday. HB 846 Job and Education Privacy Act would prevent employers from requesting an employee's password, requiring the employee to log on to the site in the employer's presence, or requiring the employee to add the employer to his or her social media site, among other provisions. Exceptions are granted in instances including when the employee is using an electronic communications device paid for by the employer and in the course of an investigation when there is specific information about activity on the employee's personal social media site. HB 846 will now move to the Senate. Contact: Paul Meyer