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League Bulletin

April 28, 2017

Municipal officials extend a huge thanks to Reps. Steve Ross and Jason Saine for introducing a revenue measure Tuesday that achieves the top legislative goal of cities and towns. HB 900 Safe Infrastructure & Low Property Tax Act gives cities and towns additional options to raise revenues for critical infrastructure and economic development investments. The bill would allow municipalities to seek voter approval for one of three new revenue streams: a municipal-only quarter-cent sales tax, a prepared meals tax, or an occupancy tax. If voters consented, any proceeds must be spent on local infrastructure projects or economic development.

Cities and towns prioritized this measure as their top goal because they currently must rely solely on the property tax and a small array of fees to fund core services such as police, fire, transportation, and parks. The bill would enable cities to maintain high levels of municipal services without undue pressure on the property tax, thereby attracting residents, businesses, and visitors to local communities with a higher quality of life. Cities and towns appreciate Reps. Ross and Saine for recognizing the need for a broadened municipal revenue base and for working with League members on this proposal, the first of its kind for the N.C. General Assembly. They also thank the numerous co-sponsors of this measure for their support of cities: Reps. John Faircloth, John FraleyJulia Howard, Linda JohnsonSusan Martin, Mitch SetzerBob Steinburg, and Linda Hunt Williams. The bill must now receive a hearing in the House Finance Committee. Contact: Chris Nida

After cities and towns across the state this week jumped to action and contacted their legislators with concern, a pair of problematic proposals regarding billboard regulation were pulled from the House voting calendar. The proposals -- HB 579 Revisions to Outdoor Advertising Laws and HB 580 Revisions to Outdoor Advertising Laws -- as written would have the effect of restricting local control of billboards as well as drastically increase the costs for state and local taxpayers when infrastructure and development require billboards be condemned. In one instance before a gubernatorial veto of a similar bill in 2004, the City of Greensboro could have been forced to pay $240,000 for the removal of a single billboard. The potential from this year's bills for negative consequences both predictable and unpredictable received attention from news outlets, in one instance involving an editorial that opined laws must preserve local government regulation and that the proposed changes would throw that out of balance. The League would like to thank everyone who voiced his or her opinion on this issue and urged House members to oppose these bills ultimately removed from the voting calendar for further review. Contact: Erin Wynia

In a positive shift from language that would have impacted local governments' ability to charge differential water and sewer rates to customers outside of municipal boundaries, HB 718 from Rep. Chuck McGrady now calls for a study of how public enterprises provide those services. That study would be in consultation with parties including the League and the N.C. Association of County Commissioners. Specifically, it would examine operators' methods for setting fees and accounting controls. It would also explore potential legislation for proper funding of infrastructure and improvement as well as for the monitoring of aging systems, "including how this responsibility impacts the financial health of the public enterprise." The changes passed the House on Wednesday and the bill now awaits consideration from the Senate Rules Committee. We first reported on the bill in its prior form here. Findings from the study, if the bill were to become law, would be reported prior to the 2018 General Assembly. The League would like to thank Rep. McGrady for his diligence in working with cities and towns and for including the League and partners in discussions.

After a late ruling that it was subject to this week's crossover deadline, SB 126 Change the LOST Adjustment Factor advanced through both the Senate Finance Committee and full Senate floor debate Wednesday. The 34-15 approval of the measure, which would change the adjustment factors applied to the half-cent local Article 40 sales tax levy, did not fall along party lines. During the Finance Committee debate, some senators expressed frustration that they had conflicting information about the impacts of this bill on their local communities. To see where your municipality falls, please refer to this chart prepared by the legislature's non-partisan fiscal staff.

Now, the measure heads to the House, where negotiations and changes to the proposal are expected. For the moment, the bill would eliminate all current adjustment factors for this particular tax, replacing them with new adjustment factors tied to the economic development tier ranking given to the county and municipalities within it that levy this tax. Whether this proposal would increase or reduce a county's current tax receipts depends on the difference between the adjustment factors in law now for that county versus the newly proposed factors. Counties and those municipalities in them which rely on tourism would be most adversely affected. Contact: Chris Nida

The House approved a bill this week to make city-requested changes and clarifications to the body-worn camera law that passed last year. HB 797 Changes to Current BWC Law, among other things, would clarify when a city manager can access a recording, specifically authorizing the disclosure and release of law enforcement recordings for use by a city manager for administration or management purposes. When the law passed last year, legislators noted that an exception for release within a law enforcement agency for administrative purposes would allow for recordings to be released to a manager, but legal interpretations of that wording necessitated the clarification found in HB 797.

During a lengthy floor debate, a contentious amendment was narrowly approved to remove a provision that would have allowed disclosure to a city/town council or citizen review board under specific circumstances -- in a closed session and under a confidentiality agreement. Amendment sponsor Rep. Bill Brawley explained his worry that there was no guarantee that the confidentiality agreement would not be breached.

The League thanks bill sponsors Reps. John Faircloth and Allen McNeill for their continued work on this issue and for addressing the concerns of cities and towns. Contact: Sarah Collins

The Senate this week approved a bill that contains provisions in the spirit of a League advocacy goal to reduce strain on law enforcement officers. That's through the passage of SB 630 Revise IVC Laws to Improve Behavioral Health. SB 630 would revise the state's involuntary commitment (IVC) laws. Specifically, it would:
  • revise the process for law enforcement officials that take custody of and transport individuals subject to an involuntary commitment order to their first commitment examination;
  • require local mental health management entities to formulate a local area crisis services plan for these custody and transportation services, developed through a stakeholder process that includes local law enforcement agencies;
  • direct local management entities to also develop a training program for law enforcement officers who provide these services;
  • give more flexibility to law enforcement officers performing these duties in the event that the designated facility does not have commitment examiners available, allowing transport of the individuals to a wider array of facilities;
  • grant additional authority to cities and counties in formulating their plans for custody and transportation of these individuals.

Sen. Ralph Hise, a sponsor, explained that the UNC School of Government helped draft the bill. He also related his experience as mayor of Spruce Pine in explaining the necessity of the revisions, specifically the need to free up law enforcement from providing custody in hospitals to those in crisis.

Cities and towns in October 2016 adopted a goal to support legislation that bolsters the state's mental health and intellectual/developmental disabilities treatment resources, including resources and solutions to lessen the strain on sworn law enforcement officers when providing custody of individuals in crises. Cities and towns appreciate the passage by the Senate and the attention given to this issue by the bill sponsors, which also include Sens. Joyce Krawiec, and Shirley Randleman. The bill will next be heard by the House. Contact: Sarah Collins

Separate proposals related to immigration law advanced this week, including the Senate's version of legislation to crack down on local governments that have so-called "sanctuary" policies, though none appears to exist in North Carolina. SB 145 Government Immigration Compliance from Sen. Norman Sanderson passed the chamber in a Wednesday floor vote and is currently in the House Rules Committee awaiting action. It seeks to penalize cities that aren't compliant with a 2015 state law related to local enforcement of federal immigration laws by stripping them of certain important revenues, including Powell Bill funds for streets. Under the bill's structure, dubious allegations could consume investigatory time at the attorney general's office and threaten local revenues (completed unrelated to the issue the bill seeks to address) that drive important public services.

A separate but topically similar proposal, HB 113 Pvt Action Local Compliance/Immigration Laws from Rep. George Cleveland passed the House and went to the Senate for consideration on Thursday. It would create a new cause of action for any local government resident against their unit of local government when that person believes the local government did not comply with state laws related to acceptance of identity documents or enforcement of federal immigration laws. It would also authorize an action for declaratory and injunctive relief; award attorney’s fees and court costs payments to the prevailing party in these actions; and allow a court to impose a penalty against a local governmental unit that fails to comply with a court’s order in these actions, up to $10,000 per day. As local, state and national news outlets continue to report, there are no known sanctuary cities in North Carolina, and the League is not aware of any city out of compliance with the 2015 law. Click here for news coverage.

Lawmakers this week crossed perhaps the most important legislative deadline of the session -- "crossover," the point at which any bill not related to finance or revenue must have passed either the House or the Senate to remain alive. It meant late nights of lawmaking and procedure to get legislation through, and plenty of updates to our easy-to-follow bill tracker. For instance:

  • HB 436 Local Government/Regulatory Fees - The House approved and sent the Senate a relaxed version of this bill we've been reporting on here. Softened from a prior version that would have repealed impact fees, this proposal now calls for a legislative study of the fees and, for one year, capping fee levels at what they were as of June 30, 2016.
  • HB 903 Water Resources Management Partnership Funds - Filed on Tuesday, this one would appropriate funds to the state’s regional councils of government to further planning activities related to regional cooperation among the state’s water, wastewater, and stormwater systems.
  • SB 131 Regulatory Reform Act of 2016-17 - Now on the governor's desk for signing, this bill would, among other things, insitute a seven-year statute of limitations for enforcement of any local or state land-use regulations, beginning when a violation is "apparent" from a public right-of-way or in plain view from a place to which the public is invited. Within those seven years, the measure shortens the time frame for code enforcement to five years once the local government actually knows of the violation. The proposal contains one exclusion to this limitation, in the cases of enforcement of dangers to public health or safety.
  • SB 285 Equal Representation for Asheville - Opposed by the City of Asheville, this bill passed the Senate this week and went to the House for consideration. It would move the City of Asheville into district-based local elections.
  • SB 292 Ord. Violation/No Auto Misdemeanor - Passed the Senate, now in the House. Under this bill, the violation of a city or county ordinance would not automatically be punishable as a misdemeanor or infraction unless expressly stated in the ordinance. Cities and towns thank Sen. Michael Lee, the bill's sponsor, for working with the League to provide flexibility to make necessary code changes.
  • SB 434 Amend Environmental Laws 2 - Crossing from the Senate to the House this week, the bill would, among other things, place new restrictions on local government riparian buffer requirements. Notably, it would add flood control to the list of reasons a local government can't have a larger buffer, harming a community's ability to protect property from flooding. The bill currently sits in the House Rules Committee.
  • SB 660 Economic Development Incentives Modifications - The Senate approved and sent the House this multi-part bill that would in part reform the current economic tier system, though not as sought in an advocacy goal cities and towns set for this year. Concerns remain about the bill's potential changes to the system and to other programs it addresses, like the Job Development Investment Grant.
  • SB 343 Increase Teacher Supplement/Electronic Notice and HB 572 Legal Notices/Require Internet Publication - Two different bills saw activity this week regarding electronic notices traditionally required in print news publications. SB 343 from Sen. Trudy Wade won approval in her chamber this week and went over to the House for consideration. It's needed legislation that would create standards for cities and counties that choose to publish required public notices on their own government websites, instead of publication in the newspaper. HB 572 from Rep. Stephen Ross received a favorable report from the House Rules Committee this week and was scheduled for a floor vote before being reassigned to Rules (per the advancement of SB 343). The House bill would have required online publication of legal notices, without removing the requirement of newsprint publication. It would, however, have limited the cost of print notices when governments have to run them more than once.
  • HB 306 E-Verify Required - All Government Contracts - The House passed and sent the Senate this bill to increase the number of E-Verify checks required of cities. Specifically, the bill would clarify that any contractor or subcontractor performing work pursuant to a contract with a unit of government, including municipalities, must utilize the federal E-Verify system to ascertain the work authorization of each employee of that contractor or subcontractor
  • HB 37 Protect Law Enforcement Officers - Passed the House and now in the Senate, this whistleblower bill would limit a law enforcement agency's ability to discharge an officer, running counter to the League’s member goal of "Supporting municipal authority over municipal personnel issues," and stakeholders have said it may encourage frivolous complaints by officers to avoid being disciplined.

The League will continue to follow these and many other bills of interest to cities and towns as the session progresses -- and you can too with our bill tracker. With crossover in the aft, the General Assembly is expected to be a bit more relaxed in the near days ahead, though heavy gears are turning on the next big project: releasing a new budget. Outlets including the Insider report that the Senate's version could surface the week of May 7.

The recent heavy rains that swept across North Carolina provide another example of how stormwater and managing that stormwater poses significant challenges for municipalities. Join the League and Smith Moore Leatherwood on May 18 in Raleigh for an Infrastructure Symposium that will address that and other hot-button topics involving municipal infrastructure. Addressing stormwater, hear keynote speaker Dr. Bill Hunt, N.C. State University professor and expert on stormwater design, discuss greener and cheaper ways to prevent rainwater from turning into a headache for your community. Hunt was recently featured in this Politico article making the case for innovative approaches to stormwater management. Aged systems across the state and nation have already been pushed to their limits, as discussed in a WUNC story this week in which Department of Environmental Quality Secretary Michael Regan notes some underground pipes were laid a full century ago. Don't miss the upcoming forum. Learn more about Dr. Hunt, other symposium programming, and how to register here.

On the latest Municipal Equation, the League's biweekly podcast on all things municipalities, we answer a frequent listener question (coming most often from people who work in government): "What do I really need to know about starting a podcast? Equipment? Approach? Editing?" There's a jungle of online resources for that, but they're frustrating to sort through. A lot of them conflict with or contradict one another, or are just marketing materials to get you to purchase some specific podcasting solution that might not be right for you. So this episode serves as our plain-language, how-to guide (especially for folks who work in government or public service, though anybody can apply these lessons) on getting started in podcasting. We list equipment, software, best practices to help you stay out of the ditch, and some philosophy on podcasting for public agencies. It's a big primer packed into a listener-friendly 36 minutes. And hear why Ben thinks virtually any local government can do something positive with podcasting. Municipal Equation comes out every other Tuesday here (or you can subscribe for free on iTunes). Find all past episodes -- covering everything from smart cities to public art to creative police relations to branding and on and on -- right here. Have an idea for a show? Email