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League Bulletin

March 6, 2015

League members and staff continued intense efforts this week to support House passage of SB 20 IRC Update/Motor Fuel Tax Changes, a bill intended to stabilize gas tax revenues for the State and the hundreds of municipalities that maintain roads locally. The bill passed the chamber yesterday after two bipartisan votes, and the League thanks the many House members who voted in support of the measure. We also applaud the leadership of Rep. Bill Brawley during the debate. Cities will benefit from more stable gas tax revenues, from which they receive Powell Bill funds that may be used on locally-maintained transportation infrastructure. One of the League members' top policy goals this session is to seek legislation that generates additional revenues to address growing transportation needs at the state and local level.

The bill previously passed the Senate, with the League serving as a primary supporter. From its inception, Senate leaders recognized the League as a main proponent of the legislation, and League leaders reiterated that support in statements to multiple media outlets when the bill was introduced. This week, anticipating a series of close House votes, League members and staff in combination held conversations with over half of the House members to secure support for continued transportation funding. Thank you to the numerous mayors and council members that responded to our individual calls for outreach on this important measure.

Representative Brawley cited the League's support and efforts during floor debate. The bill passed the House in a different form than the Senate, which will likely lead to appointment of a conference committee to work out differences. The Senate provided for an initial tax rate floor of 35 cents beginning March 1, 2015, while the House chose a slightly higher floor of 36 cents beginning April 1, 2015. In addition, each chamber chose a different rate at which to compute future gas tax rates. Other provisions in the bill garnered less attention during the House committee and floor debates this week. Read previous League coverage here. Contact: Rose Williams

A key jobs recruiting bill cleared the House this week, with the League supporting its passage by working with key House members and pushing for all House members to support the legislation. HB 117 NC Competes Act, which now goes to the Senate for consideration, would double an existing cap on funding for the state's key jobs recruitment program, the Jobs Development Investment Grant program. It also would restore money for an infrastructure grant program.

By boosting funding for these programs, the legislation supports a  League goal of providing for state-level incentive programs necessary to keep North Carolina competitive when it comes to bringing jobs and industry to local communities. This letter from League Executive Director Paul Meyer, sent to legislators this week and calling for passage of the bill, pointed out that neighboring states are not sitting on the sideline when it comes to aggressive incentives and industrial recruiting efforts. The letter, sent to both House and Senate members, also urged legislators not to encumber the bill with tax changes or unrelated funding, recalling the debate over last year's HB 1224 and referring to any additions as "a formula for failure."  

Senate leaders have indicated that they are likely to seek changes to the legislation, but it is as yet unclear what they may be. The Senate majority has been more critical of job recruiting incentives. With the debate now moving to the Senate, please contact your senators to let them know of the critical need for jobs recruiting legislation. Read more on the the NC Competes Act here and here. Contact: Rose Williams

Bills filled this week in the General Assembly would restore a state tax credit for renovation of historic homes and buildings and put more money toward grants intended to bring TV and film production to the state. Both pieces of legislation support a League goal of establishing a competitive film incentive program and restoration of the state historic tax credit. HB 152 New Historic Preservation Tax Credit would create an historic tax credit of 10 to 20 percent of expenses, depending on the size of the renovation project and where it occurred. In poorer, Tier 1 and Tier 2 counties and for projects under $10 million, the higher percentage would apply. 

A previous state historic tax credit, worth up to 30 percent of a project's value, expired on Dec. 31. The House bill has strong support in that chamber, with 62 co-sponsors initially signing onto the bill. Governor Pat McCrory and his administration, including Secretary of Cultural Resources Susan Kluttz, also are strong backers of the proposal. Its prospects in the Senate are less certain. The League would like to thank the primary co-sponsors -- Reps. Stephen Ross of Burlington, Jon Hardister of GreensboroDavid Lewis of Dunn and Rick Glazier of Fayetteville, -- along with all other co-sponsors and Governor McCrory and Secretary Kluttz.

Please continue to contact your legislators and urge them to support this important bill! Your efforts are being noticed and are having an effect in Raleigh. The League staff will continue to work for restoration of the tax credit, which is so vital to economic development in small towns and large cities. Look for more regarding those efforts in coming weeks. Read more about the historic preservation tax credit bill here, and see Representative Ross discuss the legislation in this video produced by The Insider state government news service.

HB 171/SB 193 Modify Film Grant Fund would put $66 million toward the state's film incentive grants established last year in lieu of a film and TV production tax credit. That program has $10 million currently appropriated to it. The bills' sponsors include key leaders from both the House and Senate, but whether lawmakers decide to increase funding for the program likely will not be determined until the a state budget is approved this summer. But contacting your senators and House members now is crucial to letting them know of your support of the program. Read more about film grants proposal here. Contact: Scott Mooneyham

Gov. Pat McCrory released a 2015-2016 proposed state budget on Thursday that would put more money toward teacher pay and provide for increased Medicaid enrollment. Important for municipalities, the budget plan falls in line with SB 20 IRC Update/Motor Fuel Tax Changes and would put $144 million toward local Powell Bill transportation funding. It also parallels House legislation by putting $33.5 million into job recruiting incentives programs and restoring historic preservation tax credits. It would leave funding for film grants at $10 million. The plan also includes Governor McCrory's proposal for a $1.2 billion transportation bond. Read more about the Governor's budget proposal here and here.

A bill filed this week in the House would allow voters to force a referendum on debt secured by local issuances of certificates of participation (COPs) and other non-general obligation bond indebtedness. HB 128 Referendum on Certain Local Debt would require a referendum on all borrowing for local government capital projects when 5 percent of that local government's voters sign a petition requesting a vote. The League opposes the bill, and its  prospects in the House look uncertain. So far this legislative session, House leaders have shown a limited appetite for legislation that imposes new and wide-ranging restrictions on municipal authority.

In 1991, the North Carolina Supreme Court upheld local governments' use of  certificates of participation and other "special indebtedness" that does not require a voter referendum. Since then, both local governments and the state have extensively used this form of borrowing, with the state having last put a bond referendum before voters in 2000. The General Assembly in 2013 placed limits on the state's use of state special indebtness going forward.

A bipartisan bill filed in the Senate this week would subject police departments that use automatic license plate readers to new rules. SB 182 Automatic License Plate Readers would require police departments that use the devices to adopt written polices governing their use. More importantly, the legislation would require that data collected using the devices be destroyed within 90 days unless it was related to a specific, articulated criminal case. As more police departments have begun using the devices -- which can be stationary or mounted to police cars --civil liberties advocates have called for regulation due to privacy concerns.
Town Hall Day is less than two week away, but there is still time to register! March 18 will be a great day for representatives of North Carolina towns and cities to visit legislators and make municipalities' priorities known to them. House Speaker Tim Moore and Senate President Pro Tem Phil Berger are confirmed speakers for the Legislative Leadership Session at 1 p.m. Secretary of Cultural Resources Susan Kluttz will discuss historic preservation and Secretary of Transportation Tony Tata will talk roads and transportation infrastructure at the 4:30 p.m. session at the N.C. History Museum Auditorium. Because the agricultural community is also using this day as a lobby day, it is critical to make appointments now with members of your legislative delegation. Also, don't forget to wear your League green.

The day also will include a legislative briefing from the League's Governmental Affairs Team and an evening reception with legislators and key state leaders. Click here to register and come be a part of this great event!

The Senate Redistricting Committee this week heard but did not act on legislation that would restructure the Greensboro City Council. The committee listened to speakers both for and against SB 36 Greensboro City Council Changes, which would reduce the number of council members, change the mayor's powers, and eliminate at-large seats. Mayor Nancy Vaughan and the Council oppose the change, saying that they did not request it. Mayor Vaughan, in a letter to the Senate committee, called for a referendum to be put to Greensboro voters before any changes are made. The committee is expected to vote on the bill on Tuesday. Read media coverage of the meeting and Mayor Vaughan's letter here.
Legislators in both chambers filed companion electronic notice bills Wednesday that failed to address the core of the League's electronic notice policy goal, which seeks to allow municipalities the option to publish their own electronic legal public notices in lieu of publication in a newspaper. Instead of granting that authority to local governments, HB 156/SB 129 Legal Notices/Require Internet Publication would continue a monopoly for the press regarding electronic notice while providing little or no financial relief for taxpayers. The twin bills contain the same language added to electonic notice bills last session which undermined League-supported proposals that would have saved taxpayer money by allowing local governments to publish required legal notices on their own maintained websites. HB 156/SB 129 would require newspapers to publish legal notices online at no additional charge, when a governmental entity had paid for the statutorily-required print notice. Further, this proposal would hold newspapers harmless for any errors in their own electronic notices, so long as the local government simultaneously published the notice on its own website. Contact: Erin Wynia
Led by House Majority Leader Rep. Mike Hager, a group of House members filed a proposal yesterday to exclude from builders' property taxes any increase in property value attributable to subdivision or other improvements made to the property until the builder sold the property. HB 168 Exempt Builders' Inventory tracked a similar proposal offered a decade ago by then-Sen. Walter Dalton and a companion bill introduced that same session by current House Speaker Tim Moore. Unlike the 2005 bills, this year's proposal would limit the amount of time a builder could exclude the improved property value from taxation to five years. HB 168 would also require builders to apply annually for the exclusion and would direct tax assessors to specify the portion of a property's increase in value that was attributable to the subdivision or improvements. In 2005, tax assessors mounted a strong campaign opposing the proposal. Due to the potential loss of property tax revenues for municipalities, the League opposes this proposal.