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League Bulletin

April 24, 2015

The Senate Commerce Committee approved SB 25 Zoning/Design & Aesthetic Controls yesterday without amending the filed version of the development interest-backed bill. The bill, which now moves to the Senate floor for a vote that is expected next week, restricts the ability of municipalities to enact aesthetic-based standards for building design elements. Speaking just before a representative of the N.C. Homebuilders Association during yesterday's debate, League Director of Government Affairs Rose Vaughn Williams addressed the committee, noting that municipalities use such standards to ensure that the property values of surrounding property owners remain protected from incompatible development. Sen. Tamara Barringer elaborated on that point, describing a situation in her district where a homebuyer's property values sunk when the developer lowered the quality of the surrounding homes in that neighborhood (read more about Sen. Barringer's comments in this News & Observer article, "NC Senate panel votes to limit cities on home designs"). The League thanks Sen. Barringer for publicly opposing this bill in its current form.

In her remarks, Williams also referred to a compromise package of amendments offered by the League, but not taken up by the committee. Those amendments would address the main concerns previously expressed by development interests, but would grant limited authority to municipalities in certain situations. League members and staff have promoted these amendments for the past two months; to receive a copy to use in your conversations with legislators, please contact Erin Wynia.

Please call House members this weekend and urge them not to support HB 875 Restrict Municipal Eminent Domain. While the League appreciates the work of primary bill sponsors Reps. Jonathan Jordan, Chuck McGrady, and Howard Hunter, III in addressing the League's initial concerns and limiting the original scope of the bill, it would still require county commission approval of all municipal condemnation actions outside a municipality's corporate limits (with limited exceptions). The bill essentially gives county commissioners a veto over municipal officials' decisions, a policy the League opposes. House members began discussion of the bill in the House Local Government Committee yesterday, then postponed further discussion and a vote until the committee meets again Monday afternoon.

Municipalities are one class of publicly-accountable condemnors, a group of entities which also includes county commissions and the State and federal governments. Condemnation power is also given to private entities such as electric, gas, and water utilities, and railroads. All of these condemnors hold the authority to condemn private property in exchange for just compensation, a significant power granted to them because of the overriding public need to have reliable, low-cost basic infrastructure. HB 875 singles out municipalities for the possibility of county commission veto of infrastructure projects because it would not impose this oversight on any other type of condemnor.

When discussing this proposal with House members, please explain to them the circumstances in which municipalities initiate condemnation proceedings, including extension of water and sewer lines to economic development sites or residential developments whose wells have run dry. Provision of these basic public services is a primary purpose of municipal government, and this bill would slow or stop municipalities from performing this basic function while simultaneously driving up costs for taxpayers. Contact: Erin Wynia

A bill that promises a number of North Carolina towns and cities some relief from utility relocation costs has passed one House committee. The House Committee on Transportation gave its OK to HB 771 DOT/Utility Relocation Costs on Wednesday, and the legislation is now before the House Appropriations Committee. The bill advances a key policy goal approved by League members for this legislative session. It would require the state to pay for all or some of the relocation cost of municipal water and sewer lines for municipalities with a population under 50,000 when state road construction forces those relocations. Currently, the state pays those costs only for towns with a population of 5,500 or less.

The bill would set up a tiered system where municipalities with a population under 10,000 would pay none of the costs and those between 10,000 and less than 50,000 would pay either 25 or 50 percent of the costs. Read previous League coverage here. The League thanks the many members who contacted legislators on behalf of this legislation, Rep. Phil Shepard of Jacksonville for working with League staff and members on the bill, and Rep. Rena Turner of Olin for persuasively relaying to her colleagues the plight of the City of Statesville as it dealt with the financial repercussions of a utility relocation. Contact: Erin Wynia

The House Local Government Committee yesterday rejected a proposal to subject certain forms of local debt to a vote, giving HB 128 Referendum for Certain Local Debt a relatively rare unfavorable report that likely ends consideration of the idea for the remainder of the biennium. Originally a more wide-ranging bill, the version of the legislation debated limited the proposal to debt issued for capital projects with a total cost of more than $5 million. Despite those restrictions, the League and the N.C. Association of County Commissioners continued to oppose the bill, believing that these debt issuances already receive sufficient oversight and that needed local projects should not be subjected to the timing of the election cycle. The League would like to thank Rep. Steve Ross, former mayor of Burlington, for echoing many of these concerns in the committee and speaking to the importance of the Local Government Commission. The League would also like to thank former county commissioners -- especially Rep. Ted Davis -- for expressing their concerns as well. Contact: Chris Nida
Municipalities are considering property tax increases and employee salary freezes as a way to compensate for revenue scheduled to be lost when municipal privilege license authority expires on July 1, according to a recent League survey. Of 160 cities and towns responding to the survey, 40 indicated that property tax increases were being considered to make up for the loss of privilege license revenue. Roughly the same percentage are looking at reducing or eliminating employee salary increases as cities across the state develop their budgets and prepare for the loss of more than $62 million statewide. Legislators last session committed to finding a way to replace cities' lost revenue, but cities are well into the budget development process now and no replacement revenue mechanism has yet materialized. "This survey shows that, without action from the General Assembly, some cities and towns will be forced to shift more of the tax burden onto property tax payers or damage their hiring competitiveness," League Executive Director Paul Meyer said. For more on these survey results, click here. Contact: Chris Nida

In the week after it was filed, HB 903 County Tax Flexibility/Municipal Revenue Options received plenty of attention. The bill, which would give North Carolina cities the option to levy a quarter-cent city-only sales tax by resolution, was the subject of this article that appeared in the Raleigh News & Observer and The Charlotte Observer. Although the outcome of the legislation is far from certain, the bill's filing will continue to keep the idea, tracking a long-standing League goal, before legislators as tax and budget talks continue throughout the session. The League would like to continue to thank Rep. Jason Saine of Lincolnton for keeping critical municipal revenue issues before the legislature. If you have an opportunity to show your support for Representative Saine and encourage your legislators to support this endeavor, please do so.

HB 713 Body & Dash Cam Recording/Public Access, classifying that video from police body and car dashboard cameras are "records of criminal investigations," passed the House yesterday. Laws governing "records of criminal investigation" allow the release of such video at the discretion of the law enforcement agency and exempts such videos from personnel information protection laws.

Rep. John Faircloth explained that it was his intent that this bill be paired with a study bill to be sponsored by Rep. Carl Ford that will take into account a variety of other issues related to police body and dash cameras. Contact Sarah Collins

Cities would be prohibited from charging fees associated with business registration under a bill approved by the House Local Government Committee yesterday. HB 739 Repeal Business License Fees eliminates the portion of the statute that grants cities the authority to charge businesses "a reasonable fee" for registering with a city. In the wake of last year's elimination of municipal privilege license tax authority, many cities expressed to the League that they used the privilege license as a way to protect public safety, as it allowed them to track businesses operating in their jurisdictions to ensure that they received the proper inspections, zoning classifications, and the like. Experts at the UNC-Chapel Hill School of Government expressed the belief that cities could likely still fulfill this need by requiring businesses to register, and funding these registration programs through a minimal registration fee that covered the cost of the program. HB 739 would eliminate that fee authority. The bill's sponsor, Rep. Bill Brawley, acknowledged the League's concerns with the bill, and NCLM Director of Government Affairs Rose Vaughn Williams addressed the committee to explain those concerns. Rep. Brawley committed to working with the League on the legislation. The bill next moves to the House Finance Committee, where Rep. Brawley is a senior chairman. Contact: Chris Nida
The League thanks primary bill sponsors Reps. Rob Bryan, Skip Stam, Dan Bishop, and John Bradford for agreeing to League-suggested changes to HB 721 Subdivision Ordinance/Land Develop. Changes, which passed through a committee and the full House this week. The changes will preserve municipalities' ability to effectively recover the costs of incomplete infrastructure from developers through performance guarantees such as bonds and letters of credit. The bill sponsors agreed to League-suggested modifications that would set the amount of performance guarantees at 125% of the estimated cost of completion, up from the original proposed amount of 110%. The approved version of the bill also dropped stormwater-related performance guarantees after originally including them. This change meant that municipalities could continue current practices in requiring guarantees for the performance of post-construction stormwater devices. Also, among other provisions, the bill lists the types of financial assurance a developer may choose from: bonds, letters of credit, or an "equivalent security." The bill now heads to the Senate for its consideration. Contact: Erin Wynia

HB 616 Local Governmental Employees’ Retire. COLA, which would provide Local Government Employees Retirement System (LGERS) retirees with a 1 percent cost of living adjustment (COLA), received a favorable report from the House Pensions and Retirement Committee on Tuesday and was re-referred to House Appropriations

This legislation comes after the Local Government Employees Retirement System Board of Trustees voted in January to provide a fiscally responsible COLA to retirees by relying solely on existing funds available through the system's recent investment gains. Specifically, the Board approved the League and the N.C. Association of County Commissioners supported COLA of 0.625 percent.

The higher COLA called for in this legislation would increase each participating local government's contribution rate for general employees. That rate had been previously set at 6.67 percent, but would rise to approximately 6.77 percent under the bill. Contact: Sarah Collins

Legislation that would substantially undermine local regulation of billboards did not move this week and has been put on the legislative back burner for now. Because HB 304/SB 320 Revisions to Outdoor Advertising Laws contains permit fee increases, it is not subject to the April 30 crossover deadline when many bills must pass either the House or Senate to continue to be eligible for consideration. League staff still believes that the bill -- which contains several provisions affecting how municipalities can control the placement, size and other aspects of billboards --will be considered by legislators later in the legislative session. We thank you for making your concerns about the bill known to your legislators and urge you to continue to let them hear from you on this issue. Read the League's previous Action Alert regarding the bill here.

A Senate committee approved a bill on Tuesday that would clarify local government authority for offering incentives to encourage historic preservation. SB 472 Local Incentives for Historic Rehabilitation passed the Senate Committee on State and Local Government and is now before the Senate Finance Committee. League Director of Government Rose Vaughn Williams spoke to the committee, thanking sponsors Sen. Andrew Brock of Mocksville and Sen. Bob Rucho of Matthews but also making clear that cities and towns do not see local authority as a substitute for a state historic tax credit. 

Senator Brock, in response to questioning by other committee members, said the bill is not necessarily an alternative to state historic tax credits. Read media coverage here. League staff is continuing efforts on several fronts to support passage of HB 152 New Historic Preservation Tax Credit, a bill which would achieve a League policy goal of restoring a state historic preservation tax credit. Contact: Scott Mooneyham

A proposal to revamp some aspects of the historic property approvals process gained the first of two needed committee votes this week. Now, the House Judiciary II Committee will take up HB 799 Zoning/Changes to Hist. Preserv. Procedures, likely next week. The proposal's most drastic change would allow any party appealing a Board of Adjustment decision to force the local government into binding arbitration, preventing an appeal to Superior Court. This legal remedy is unprecedented in land use disputes, and coupled with an automatic award of attorney's fees also created by this bill, would incentivize litigation at the expense of municipal taxpayers. The bill also creates a new piece of evidence, called a "renovation report," for historic property owners to present during disputes. The report would list applicable local historic guidelines and materials that a property owner could use during renovation, and it would become part of any litigation record because it must be taken into account by historic commissions when considering certificates of appropriateness. The League has expressed concerns over these provisions to primary bill sponsor Rep. Mark Brody and appreciates Rep. Brody's willingness to work toward addressing these concerns before the bill's next hearing. Contact: Erin Wynia
The final stops on the League's Listening and Visioning Tour will take place next week, with visits to Wilmington, Jacksonville and Clinton. These meetings offer another chance for League members to provide feedback and allow us to get your take on what is happening in Raleigh and elsewhere. Please come to one of these events if you can. Learn more about the tour and find reservation information here.
With a pair of unanimous votes, the Senate approved SB 284 Infrastructure Assessments/Extend Sunset this week, sending it to the House for consideration. The bill extends until 2020 the authority for cities and counties to use a special assessment tool as a means of financing long-term public infrastructure projects. Local governments may only use this tool when it is requested by a majority of owners of the assessed property and those owners represent at least 66 percent of the value of the assessed property. The Town of Hillsborough has already utilized this financing mechanism, and the Town of Mooresville has received Local Government Commission approval to do so. Other communities around the state are considering utilizing the tool as well, and we thank Sen. Fletcher Hartsell for sponsoring this bill to extend the authority. If you have interest in using this financing tool, please contact your House members and let them know of the importance of this legislation. Contact: Chris Nida

With the help of the League, SB 547 Interconnection of Public Water Systems was amended Tuesday to include provisions to encourage water systems to look toward future interconnection.

As originally filed, the bill would have allowed the state Department of Environment and Natural Resources (DENR) to mandate local water systems to interconnect with nearby systems as a condition for system construction or alteration, without taking into account issues such as:

  • Which system would be financially responsible for the interconnection?
  • Would the bill punish systems that planned well by forcing them to merge with a system that had not?
  • How would DENR determine which systems would interconnect?

The new version, which received a favorable report from the Senate State and Local Government committee, would allow DENR to serve a role in identifying and facilitating eventual voluntary interconnections of public water systems through information gathering. The League thanks Senator Hartsell for offering an alternative that takes a voluntary approach to encouraging future planning instead of mandating interconnections. Contact Sarah Collins

HB 634 Stormwater/Built-Upon Area Clarification quickly passed the House yesterday, resurrecting a debate from last session over whether the State and local governments should treat gravel-covered surfaces, such as parking lots, as impervious under stormwater laws. The bill would specifically exempt a surface of certain-sized stones laid at least 4" thick over a geotextile fabric from built upon area calculations, treating the material as if water would run though to the ground below.

The League opposed the provisions and supported instead retaining the current definition of built-upon area codified in S.L. 2014-210 which resulted from extensive study by the Environmental Review Commission.  The League thanks Rep. Chuck McGrady and Rep. Becky Carney for bringing attention to the fact that although the gravel affected by the bill can sometimes be considered pervious, if driven upon, water will run off all washed stone in just a short amount of time. Contact: Sarah Collins

A bill allowing municipalities to enforce political sign rules of the N.C. Department of Transportation (NCDOT) on NCDOT roads within the corporate limits of a municipality passed a committee and then the full House yesterday. HB 613 Clarify Political Sign Ordinance Authority partly addresses previous concerns of the League membership in situations where both local and state political sign rules exist. However, unlike a measure proposed last session, this bill would not allow a municipality to enforce its own local rules on NCDOT roads within its corporate limits. Contact: Erin Wynia
The House approved HB 318 Protect North Carolina Workers Act on Thursday, with the final version of the bill including language requested by the League that largely addressed  concerns about creating unnecessary paperwork for municipal purchases. The bill, as originally filed, would have rolled back the E-Verify concessions that local governments won during the previous legislative session. The earlier requirements had forced municipalities to confirm vendors' E-Verify compliance even for simple purchases. Last year's fix required contractor compliance only for contracts in the formal bidding range. The latest House bill would eliminate that fix, but would exempt contracts "solely for the purchase of goods, apparatus, supplies, materials, or equipment." The League thanks the bill sponsors --Reps. George ClevelandChris Millis, Debra Conrad and Chris Whitmire -- for working to address municipalities' concerns.

HB 730 County Provide 911 Dispatch Services is scheduled to be heard by the House Local Government Committee on Monday. The bill would make clear that counties cannot charge municipalities for 911 service when municipal taxpayers already pay county property taxes to help fund that service. Please contact members of the committee to express your support for HB 730. This legislation would address a top legislative priority adopted by League members in December to prevent municipalities from being additionally charged for county services which are funded through county property taxes. Contact: Sarah Collins