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Legislature Finally Adjourns

It hardly went as planned, but state lawmakers finally adjourned the 2014 session of the General Assembly on Wednesday night as some key pieces of legislation failed while others received last-minute reprieves. Coal ash clean-up legislation and a stripped-down economic incentives bill were among the bills given approval on the final day, while legislation opposed by the League involving local sales tax legislation failed. The "sine die" adjournment means that legislators will not return to the capital for any full business sessions this year unless Governor Pat McCrory vetoes bills or calls legislators back for a special session. 

The session ends with the League having achieved a number of accomplishments this year. They include:

  • Repeal of a de facto moratorium on municipal environmental ordinances. (Read previous coverage here.)
  • An additional $9.4 million in Powell Bill funding, bringing total funding to $146.3 million.
  • Repeal of a burdensome E-Verify requirement on small purchases and contracts by local government. (See below.)
  • Adding $500,000 in grants provided under the Clean Water Management Trust Fund. 
  • Expanding uses of reclaimed water for public water supplies. (Read previous coverage here.)
  • Requiring primary 911 centers to have back-up capabilities, but without burdening municipal taxpayers with requirements that separate facilities be built. (Read previous coverage here.)
  • The continuation of film and TV incentives. (Read previous coverage here.)
  • Restrictions preventing pension spiking to strengthen the integrity of the state and local government retirement system. (Read previous coverage here.)
  • A requirement for registration of mopeds. (Read previous coverage here.)

Also, proposals capping property tax increases and restricting municipal tree ordinances fell by the wayside as the League led lobbying efforts against the measures. The adjournment came after the House rank-and-file again rejected HB 1224 Local Sales Tax Options/Econ. Devpt. Changes. (See below.) On the final day of the session, Legislators also approved SB 729 Coal Ash Management Plan of 2014, including a provision favorable to municipalities affecting groundwater compliance boundaries for wastewater systems. (See below.) The stripped-down incentives legislation -- originally included as a provision of HB 1224 and passed after its defeat -- was intended to help the Evergreen Packaging of Haywood County, with its 1,000 employees, comply with federal environmental regulations. Read media coverage of the adjournment here and here.

The League would like to thank all municipal officials who contacted legislators, came to Raleigh, or otherwise advocated for policy positions that benefited municipalities during this legislative session. Without your involvement, none of these successes would have been possible. The League is in a better place today and will be in a better place again tomorrow because of your involvement. Look for comprehensive coverage of the 2014 session in coming days in the League's End of Session Bulletin. Contact: Paul Meyer


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Sale Tax Bill Fails on House Floor

As the legislative session came to a close, House members again rejected an economic incentives and local sales tax bill even as legislative leaders conditioned the passage of other, more popular measures on its approval. HB 1224 Local Sales Tax Options/Econ. Devpt. Changes, opposed by the League, failed on the House floor on Tuesday in a 47-54 vote. The bill was defeated despite attempts by House Speaker Thom Tillis to shore up support for it. Commerce Secretary Sharon Decker also made an appeal for the legislation, saying the incentives were needed to land businesses considering locating in the state.

A number of House members, though, rejected the plan based on the incentives, contending that the state should not be engaged in providing more cash inducements targeted at specific businesses. The bill also failed despite legislative leaders linking it to measures giving local school boards more flexibility to keep teaching assistants and increasing film incentive limits. Some legislators suggested after the vote that Governor Pat McCrory might be able to use his budget authority to give school systems more flexibility with teaching assistant hires. Legislators ultimately decided to pass a separate, cleaner economic incentives bill primarily aimed at helping Evergreen Packaging in Haywood County, with over 1,000 employees, meet new federal environmental requirements.  

The League opposed HB 1224 because the local option sales tax provisions did not represent a comprehensive approach to local funding needs and included only one-half of the local government equation when it comes to economic development. The League was one of the very first groups to publicly oppose the bill, and League staff continued to work quietly with key lawmakers in opposition. As it was resurrected this week, the legislation became more about the battle between those lawmakers for and against business recruiting incentives. Even the electoral politics surrounding Tillis' U.S. Senate bid played into the debate. League staff correctly judged that the bill was likely to fail by more than a few votes, and believed that calling on further engagement of League members regarding the legislation might do more harm than than good. The League thanks Representatives Paul Stam, Becky Carney and Mike Hager for their efforts regarding the outcome. Read more coverage about the battle over the legislation here. Contact: Paul Meyer


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Lawmakers Leave Town With Coal Ash Deal

Legislators began the 2014 legislative session with coal ash clean-up at the top of their to-do list. Until this week, it looked as if it might not be checked off, despite the urgency in the wake of a massive spill on the Dan River. But this week, legislators left town having passed a bill setting out a framework to begin the clean-up as its last major action of the session.

During House floor debate, critics said SB 729 Coal Ash Management Act of 2014 -- which requires complete removal of the coal ash only at four of 14 sites -- does not go far enough. They also complained that the final agreement between the House and Senate fails to address how costs will be allocated between ratepayers and Duke Energy shareholders. Representative Chuck McGrady, a key sponsor, said the legislation is a good start. He said legislators and the public need to understand that the issues raised by the spill and the existing ash ponds will have to be addressed over several years in several pieces of legislation.

Besides the broad issue of protecting public waters and water supplies, the legislation addressed a key concern of municipalities regarding groundwater compliance boundaries affecting some wastewater systems. In a change favorable to cities, the bill clarified how those boundaries are applied after a court ruling overturned previous state agency interpretations of the law. Although the court case was brought because of the coal ash ponds, the ruling affected the same section of the law that regulates municipalities. Without the provision included in the bill, cities operating Class B biosolid disposal programs -- those permitted before Dec. 30, 1983 -- could have been forced to make expensive changes to their systems.

The League again thanks Representative McGrady and Representative Ruth Samuelson for their diligent work on this matter, and for defending the change during the long, tumultuous debate of the bill. Read more coverage about the coal ash legislation here and here. Contact: Erin Wynia


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Legislature Gives Final Approval to League Crafted E-Verify Fix

In the short session's eleventh hour, the House voted to give final approval to legislation containing a League-supported provision that will ease E-Verify requirements for local government purchasing officers. The requirements for all purchases and contracts had become a significant, red-tape burden for local government. HB 369 Criminal Law Changes was considered all but dead after the House voted not to concur with the Senate's changes two weeks ago and the Senate then left town before appointing its conferees. Recognizing the importance of the legislation, Representative Skip Stam asked the House last Friday to reconsider its earlier motion not to concur with the Senate's changes to the bill. During floor debate, he and Representative Harry Warren both defended the League's provision. The House ultimately voted by a 77-to-14 margin to approve the bill and send it to Governor Pat McCrory for his signature.

If signed by the Governor, which we expect will happen in the coming days, the bill will remove the requirement that cities and counties determine whether their contractors and vendors are compliant with the state's E-Verify laws before making any purchases or contracts, regardless of size or type. Instead, local governments will only have to ensure their contractors' E-Verify compliance in contracts within the formal bidding range. We thank Representatives Stam and Warren for their leadership and perseverance with this bill in the House as well as Senators Thom Goolsby and Floyd McKissick for working with us on our provision in the Senate. Contact: Whitney Christensen


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Public Hearings for Fracking Rules Begin

The N.C. Mining and Energy Commission (MEC) held its first of four public hearings Wednesday regarding its proposed rules to regulate oil and gas exploration and development. The remaining public hearings will be held at the following locations:

  • Sanford, Wicker Civic Center, August 22, 5-9 p.m.
  • Reidsville, Rockingham County High School, August 25, 5-9 p.m.
  • Cullowhee, Bardo Fine & Performing Arts Center- WCU, September 12, 5-9 p.m.

The League prepared talking points for municipal representatives and plans to submit detailed comments before the September 30 deadline. The talking points reflect the League's Municipal Advocacy Goals, which specifically address hydraulic fracturing with the following goal: "Protect local authority and localities' power to regulate hydraulic fracturing and related infrastructure in their communities." Contact: Sarah Collins.


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Members of Congress Weigh in on Community Broadband

Members of Congress are wading into the fight over potential Federal Communications Commission pre-emption of state laws limiting municipal-owned broadband systems. Senator Ed Markey of Massachusetts and Representative Mike Doyle of Pennsylvania this week issued a statement calling on FCC Chairman Tom Wheeler to take action.

Wheeler has indicated that he is considering pre-empting state laws like the one passed in North Carolina in 2011 which restricts expansion of government-owned broadband. Wheeler argues that such laws restrict competition and harm consumers. The City of Wilson has filed a petition with the FCC asking for the agency to pre-empt North Carolina's law that restricts expansion of that city's broadband network. Chattanooga, Tenn., has filed a similar petition.

Other members of Congress have said the FCC should not step into what is a state matter. The initial phase of public comment on the Wilson petition ends next Friday. You can enter comments here. Read already-entered comments here. Contact: Kim Hibbard


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Tourism Spending Reaches Record

Visitors to North Carolina spent a record $20 billion in 2013, according to the state Department of Commerce's Division of Tourism, Film and Sports Development. The state estimates that tourism spending resulted in state tax receipts in excess of $1 billion and local tax revenue of better than $600 million. Compiled on a county-basis, Buncombe County -- where tourists spent $901 million -- led the state in the growth of tourism dollars. Read more here.


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NCSBE Begins Outreach on Election Laws Changes

Representatives from the N.C. State Board of Elections are beginning to reach out to various groups across the state regarding changes to the state elections laws -- including a voter ID requirement -- that will take effect in 2016. For cities, NCSBE is interested in ensuring that officials have all the information they need to answer any questions they receive from their citizens. See this article and the accompanying video clip from Time Warner Cable News for more on the Board's efforts.