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Legal Eagles: Local acts of the General Assembly - recent Supreme Court decisions 

By Kim Hibbard, NCLM General Counsel

With the 2017 long session of the General Assembly convening on January 11, the season for requesting local bills has arrived. While every session sees hundreds of local bills introduced and enacted at the behest of individual municipalities and counties, there are also occasional local acts that impose requirements or remove authority in a way that is opposed by the affected local government. Encountering one of these bills, you might have wondered whether there any legal limits on the General Assembly’s power to enact such legislation. Two recent decisions of the North Carolina Supreme Court address this question.

First,a bit of constitutional background: The North Carolina Constitution, in Article VII, Section 1, gives the General Assembly the broad power to "provide for the organization and government and the fixing of boundaries" of local governments, and except as otherwise prohibited by the Constitution, to give them "such powers and duties…as it may deem advisable." Article II, Section 24, in turn, prohibits the General Assembly from addressing fourteen specified subject areas through local, private, or special legislation. These matters may be addressed only in general laws. For example, the legislature may not enact a local bill to regulate trade or labor; to authorize the opening or closing of streets; or to extend the time for levy or collection of taxes. Of interest in the two cases, the General Assembly also may not enact local bills "[r]elating to health, sanitation, and the abatement of nuisances."

The two Supreme Court opinions came down on the same day in December. City of Asheville v. State, in which the League participated with an amicus brief, deals with legislation mandating the involuntary transfer, without compensation, of the city’s water system to a metropolitan water and sewer district. Town of Boone v. State deals with legislation removing the town’s authority to exercise extraterritorial jurisdiction. In both cases, the legislative acts were adopted over the adamant opposition of the affected municipality. On appeal, the municipalities argued, among other things, that the acts were constitutionally prohibited because they related to health, sanitation and the abatement of nuisances in violation of Article II, Section 24.

Results were mixed. In the Boone case, a split Supreme Court upheld the local act removing the town’s ETJ authority. The majority held that the removal of territorial jurisdiction from the town fell squarely within the General Assembly’s broad authority, recognized in the first clause of Article VII, Section 1, to provide for the organization, government and fixing of boundaries of municipalities. In parsing the provision, the majority determined that the limitation language ("except as otherwise prohibited by this Constitution") does not apply to the organization, governance and boundaries power in the first clause and limits only the delegation of powers in the second clause. Thus, once it determined that the act was one of organization, governance and boundaries, there was no need to apply the subject matter prohibitions in Article II, Section 24 to the local act. Of the seven justices, six agreed with the result, but only four agreed with this reasoning.

The Boone ruling came in contrast to the Asheville case, another split opinion, in which the Supreme Court struck down the water system transfer legislation, finding that it was a local act relating to the prohibited subjects of health, sanitation and the abatement of nuisances. In doing so, the majority opinion articulated a new test for determining what the constitutional provision means by "relating to": "…whether, in light of its stated purpose and practical effect, the legislation has a material, but not exclusive or predominant, connection to issues involving health, sanitation, and the abatement of nuisances." The majority rejected the state’s argument that the transfer of the water system was aimed at governance issues rather than health and sanitation. [The dissenting justices would have applied the same reasoning as in the Boone case and avoided the prohibited subjects analysis.]

Is it all crystal clear now? No. Uncertainty is seemingly inevitable when it comes to court interpretations of authority and its limitations. It remains to be seen how courts will reconcile these two cases and apply them to other facts.

But these cases are nonetheless instructive for municipal elected officials. They demonstrate one reason that the League strongly encourages its members to cultivate good working relationships with the General Assembly. Getting to know your delegation is an ongoing process that should not wait until you need to ask for, or oppose, legislation. Building relationships won’t necessarily resolve every issue before it ends up in local or statewide legislation, but it can go a long way toward preventing unwelcome surprises. Feel free to contact the League’s grassroots staff when it comes to assistance in that regard.