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Legislative Limbo Becomes Status Quo

How the 2014 legislative session officially ends was still in question a week after House and Senate members were unable to reach agreement on an adjournment resolution. Both the House and Senate held "skeleton" sessions this week to comply with requirements of the state constitution while they are not officially adjourned. After Governor Pat McCrory signed the budget bill, the Senate appeared even less inclined to take up House calls to consider several pieces of legislation left hanging in the final days of the session. A spokeswoman for Senate leader Phil Berger said the Senate did not plan to take up any bills until November, which is when its adjournment resolution called for reconsideration of a coal ash clean-up plan. 

But Rep. Paul "Skip" Stam indicated that he believed legislators would do more than continue the skeleton sessions next Thursday. The House version of an adjournment resolution would have legislators, on Aug. 14, considering many of the bills that had been debated late last week without resolution. Meanwhile, Governor McCrory and Commerce Secretary Sharon Decker called on legislators to act on economic development-related provisions of HB 1224 Local Sales Tax Options/Econ. Devpt. Changes, saying they were crucial to job recruitment efforts. The lack of agreement between the House and the Senate over adjournment was dictated, in part, over disagreements about that bill, SB 729 Coal Ash Management Act of 2014, and SB 763 Revenue Law Tech. Changes and Other Changes, which includes the extension of historic preservation and film tax credits.

It is significant that the House did not choose to put local-option sales taxes into SB 763, which became its preferred vehicle for late-session moves regarding revenue, tax and tax credit legislation. It is also important that the House made multiple bids to extend historic preservation and film tax credits. Your efforts on these issues proved effective. Keep them up! For League members, the unfolding events mean that regulatory and other proposed policy changes affecting cities and towns are still possible. SB 734 Regulatory Reform Act of 2014, another bill where the House and Senate have yet to resolve their differences, would repeal municipal protest petitions and restrict zoning ordinances that call for aesthetic controls. 

League staff continues to monitor the fluid situation at the Legislature and will keep pressing for outcomes favorable to municipalities on all of these critical issues. We thank you all for your continuing engagement on these matters. Many of them may yet be resolved in our favor, so stay tuned, remain optimistic and keep letting your legislators know where you stand! Contact: Paul Meyer


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Wilson Seeks FCC Action on State Broadband Law

The Federal Communications Commission is seeking public comment regarding a petition filed by the City of Wilson asking that the federal agency pre-empt a state law that restricts expansion of the city's broadband network. Wilson and Chattanooga, Tenn., each filed separate petitions late last month asking the agency to use authority granted under the federal Telecommunications Act of 1996. The cities filed the petitions after FCC Chairman Tom Wheeler commented earlier this year that he believed pre-empting state laws that restrict municipal-owned broadband would promote competition and is in consumers' best interest.

North Carolina, in 2011, joined several other states in passing laws that restricted the expansion of government-owned broadband systems. "The city’s petition seeks to remove the significant operational barriers imposed by the state law so that Greenlight can continue to thrive and serve our community,” Wilson Mayor Bruce Rose told The Wilson Times. The initial phase of public comment runs through Aug. 29. Comments can be filed using the FCC's Electronic Comment Filing System. Media coverage regarding the petitions can be found here and here. Contact: Kim Hibbard


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Municipal Advocacy Goals Process Under Way

The League's process to establish advocacy goals for the 2015-16 biennium got underway in earnest this week with the meeting of three legislative action committees. At the Tax and Finance Legislative Action Committee meeting on Tuesday, committee members delved into the issue of sales tax sharing and distribution, including looking at how current law allows county commissioners to change distribution formulas -- based on either population or local ad valorem taxes -- in each and every year in April. The changes then go into effect July 1. 

At the Planning and Environment Legislative Action Committee meeting on Wednesday, members discussed goals associated with extraterritorial jurisdiction, and water and sewer control. Both committees agreed to pare down language in the League's Core Principles. There was also a discussion in each meeting about the potential of a state bond that would support city infrastructure needs. The General Government Legislative Action Committee began meeting this morning. Proposals for policy goals that the League should pursue can continue to be submitted here.

These proposals are a key part of determining the Municipal Advocacy Goals for next year's legislative session. Proposals may be submitted by elected officials and staff of member municipalities. Each proposal should indicate whether the municipality's governing body has voted to approve the submission. Goals are due no later than August 31. The League's policy development process will be finalized by the members at the Advocacy Goals Conference on December 11 in Raleigh. Contact: Cara Bridges


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Local Sales Tax Bill Takes Rollercoaster Ride

As legislators neared their almost-adjournment last weekend, a bill affecting local-option sales tax authority appeared as if it would be one of the last items approved. It didn't happen. Even though conferees from the House and Senate reached agreement, that version of HB 1224 Local Sales Tax Options/Economic Development Changes apparently gave enough House members heartburn that no vote was held on the House floor. The latest version of the bill would have appeased some of the opposition in urban counties by allowing four urban counties that had remaining local-option sales tax authority up to 2.75 percent to use that authority if they did so by the end of the year; an earlier version of the bill would have capped those counties' authority at 2.5 percent.

The League continues to oppose the legislation because it does not represent a comprehensive approach to funding local infrastructure needs critical to economic development, and specifically does not take into account the role that municipalities play. The decision by the House, and the adjournment limbo of the General Assembly, does not mean that the legislation still may not be taken up this year. That bill and SB 763 Revenue Laws Tech. Changes and Other Changes, which contains extensions of re-worked versions of the film and historic preservation tax credits, are among the most likely pieces of legislation to be taken up if lawmakers consider a significant agenda prior to officially adjourning. With a study of historic preservation tax credits in the conference report of HB 1224, the provisions of either bill could end up in a final version of the other.

Extension of the tax credits is a League Advocacy Goal, and League staff has pushed for their passage and promoted them through media outreach. League staff will continue to monitor developments affecting these bills and make legislators aware of municipalities' concerns regarding them. You can read previous League coverage about the local sales tax legislation here. Contact: Chris Nida


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Wake County Commissioners Reject Sales Tax Referendum

Wake County commissioners this week decided against putting a ballot initiative before voters in November on whether to allow that county's sales tax to increase by a quarter cent. The decision came just after a heated debate in the Legislature over a bill that could cap urban counties' sales tax authority in the future, particularly if they do not use it this year. The additional revenue, had the measure gone forward, would have been used to increase public school employee salaries. At least one of the commissioners opposed to the proposal said school pay is a state, and not a county, responsibility. Read more coverage here.
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Americans Like Transportation Benefits, Don't Want More Costs

A new poll commissioned by the Associated Press shows that most Americans believe the benefits of a good roads and transportation system outweigh the costs. There's a catch though: A majority oppose increases in the federal gasoline tax to pay for transportation improvements, and most don't like having private companies build roads and then charge tolls to pay for them. Fifty-eight percent of respondents opposed raising federal gasoline taxes. Forty percent also oppose -- with 20 percent in favor -- creating a vehicle-miles-driven tax, according to the poll. The AP concluded from the results, "Small wonder then that Congress has kept federal highway and transit programs teetering on the edge of insolvency for years ..." For more  about the poll's results, read here.
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No Deal Leads to Coal Ash Recriminations

The Legislature may have left Raleigh without approving a coal ash clean-up bill, but the topic remained on policy-makers' minds through last weekend and into this week. House and Senate members cast blame on each other for failing to reach an agreement. Senator Tom Apodaca blamed a House-led effort that would have added a new clean-up provision to the bill; House members said the bill needed the provision to ensure that more of the coal ash sites would actually be cleaned up and not simply capped and left in place. Gov. Pat McCrory, meanwhile, announced an executive order that he said would ensure monitoring of the sites in the absence of legislation. Environmentalists said the order did nothing not already allowed under existing law.

Duke Energy took out ads in newspapers to get out a message that it would advance a plan to clean up the ash pits even without legislation. Outside of the broader implications for drinking water supplies, the coal ash legislation is important to municipalities because of language in the bill affecting groundwater compliance boundaries for municipal wastewater facilities and inactive hazardous waste sites. Senate leaders have said that it is their intention to reconvene the legislative session in November to address coal ash clean-up. House members have indicated that they would like to get back to working out a deal next week. More about the implications on groundwater compliance boundaries can be found in previous Bulletin coverage here. Contact: Erin Wynia


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Senator Goolsby Gives Up Seat Early

Senator Thom Goolsby resigned from his Senate seat on Monday after completing nearly two terms representing New Hanover County and Senate District 9. Senator Goolsby had already decided not to seek another term. In announcing his resignation, he said that he hoped his potential Republican successor, Michael Lee, would be appointed to the remaining five months of the current term. Lee faces Democrat Elizabeth Redenbaugh in the November election. The executive committee of the New Hanover County Republican Party will determine who finishes out Senator Goolsby's term. The League wishes Senator Goolsby well in his future endeavors.
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Pope Resigns Post as Budget Director

State Budget Director Art Pope has announced that he will be stepping down from the position in early September. Pope, who has served as CEO and board chairman of family-owned Variety Wholesalers, said he will return to the private sector. As a key funder of Republican causes and conservative think tanks, Pope became something of a lightning rod for critics on the left to attack the administration of Governor Pat McCrory. Pope, though, was  praised by many members of the staff at the Office of State Management and Budget for his diligence on state budget matters. Governor McCrory announced that Lee Roberts, managing director of Piedmont Community Bank Holdings and the son of longtime NPR and ABC commentator Cokie Roberts, will replace Pope. See more coverage here.