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League Bulletin

May 10, 2019

​WHAT HAPPENED: It was a front-loaded week at the General Assembly, with the House in heavy action until Tuesday afternoon, committees busy and a Senate session Wednesday dispensing of bills that needed attention to remain alive for the session.
WHAT IT MEANS: This was crossover week, with a do-or-die deadline for most bills that hadn't yet passed a single chamber. Crossover, a routine part of the legislative session, in one sense thins the field for what lawmakers can consider for the rest of the session. General Assembly staff usually produces a list of still-eligible bills after crossover, and we'll share that once available. 
ON TAP: Compared to crossover's mad-dash, next week will have a quieter feel. Recall​ that the House was passing its budget last Friday amid the publication of this Bulletin; it's now in the Senate's hands, and that's what everyone's watching at this point. Senate Majority Leader Harry Brown is quoted in media outlets including the Insider State Government News Service as saying the goal is to complete that work by month's end, with floor votes to follow. 
THE SKINNY: The 2019 session has matured and refined its focus with crossover out of the way and a budget process hitting milestones. Read on for updates on legislation affecting cities and towns and a last word about an event that our members already have on their calendars -- CityVision 2019​, next week in Hickory! ​​

​Legislation that would have mandated municipalities provide and pay for a new retirement benefit for firefighters, called a “special separation allowance,” was converted to a study bill prior to approval by the House. Members of the chamber's Pensions and Retirement Committee on Monday discussed HB 27​8 Study Parity for First Responders​ and sought and received assurances from bill sponsor Rep. Jason Saine that the proposal would not move forward without a state funding mechanism. 
League members adopted a policy goal in November to oppose this benefit unless funding is provided and have been working diligently to inform legislators on the cost of adding a new retirement benefit for firefighters. The League shared with the members of the House Pensions and Retirement Committee that consideration of this unfunded mandate comes as municipalities are being required to make substantial contribution rate increases to the Local Government Employees Retirement system (the pension system to which firefighters belong) and therefore new retirement benefits should not be mandated without funding. The League also referenced an analysis​ of HB 278 developed by legislative staff prior to the committee meeting, noting that cities and towns already have the authority in law to offer the special separation allowance benefit if they choose. Municipalities have the authority to set compensation, provide retirement incentives, or offer any other supplemental benefits. The Department of the State Treasurer also voiced concerns about the design of the benefit creating unfunded liabilities for local governments, since it would establish a new, other post-employment benefit that is not funded in a fiscally responsible or actuarially sound manner, noting it could negatively impact local government bond ratings.
The League thanks the members of the House Pensions and Retirement Committee for their thoughtful consideration of the impacts of HB 278 and to bill sponsor Representative Saine for this change. The study in HB 278 is now eligible for consideration by the Senate. 

The House this week approved a scaled-backed version of legislation that would allow billboards condemned due to road and other construction to be relocated in some areas where they currently would not be allowed. The 73-43 House vote for HB 645 Revisions to Outdoor Advertising Laws​ followed negotiations by the League that led to changes that included limiting the relocations to within two miles of the condemned signs original location and elimination of some language that could have led to more generous compensation when billboards are not relocated. The bill would allow those relocations in areas zoned commercial and industrial. In addition, several changes were made on the House floor, including removal of all language that would have changed vegetation cutting rules around billboards and a requirement that the military must be consulted when relocations occur within five miles of a military base. After the bill was approved by the House Transportation Committee in a close vote last week, it was then reassigned from the House State and Local Government Committee to the House Rules Committee, a sign that House leaders wanted some version of the legislation to pass. At that House Rules Committee meeting on Monday night, League Chief Legislative Counsel Erin Wynia told committee members that, while municipalities still had concerns about the bill, the changes were enough to cause the League to take a neutral position in return for keeping the negotiated provisions. The bill now moves to the Senate for consideration.

In the rush to crossover, HB 348 Protect City Employees from Retaliation​, a bill backed by the Police Benevolent Association, passed the House after being changed to require cities and towns that do not have an anti-retaliation policy to adopt one. As originally filed, the bill would have created additional legal protections for municipal law enforcement officers from retaliation. The N.C. Association of Chiefs of Police and the League of Municipalities had noted those new protections could limit a law enforcement agency's ability to discharge a problem officer due to fear of increased litigation.
With the bill’s focus changed to requiring anti-retaliation policies, primary sponsor Rep. Holly Grange assured other legislators on the House floor that it was not her intent to micromanage cities and towns as to what was in their policy. The League thanks Rep. John Faircloth for a helpful amendment to remove a requirement that the anti-retaliation policy be adopted by ordinance, which would have been contrary to common practice with municipal personnel policies.
While the League appreciates the change to make improvements to the bill, it was noted on the House floor that the state does not dictate personnel policies in this way for any other political subdivisions of the state. The League believes municipalities should retain the authority to dictate their own personnel policies and that the bill will likely spur questions from League members regarding clarification of intent. HB 348 is now eligible for consideration in the Senate.

Shortly after last week’s Bulletin​ was completed, the House gave final approval to its budget proposal. The 61-51 vote in the House sent HB 96​6 2019 Appropriations Act​ to the Senate for further consideration. (Read the League’s summary​ of House budget provisions impacting municipalities.) The Senate appears likely to begin developing its budget proposal in short order, with Sen. Harry Brown saying this week that the chamber hopes to pass its version of the budget in the last week of May. From there, a conference committee would likely work to resolve differences in the two proposals before an agreed-upon conference budget is passed in both chambers and sent to Gov. Roy Cooper for his consideration. 

Senate budget writers will have additional revenue to work with when developing their spending plan. The chief economist from the Fiscal Research Division of the General Assembly told lawmakers this week that April income tax collections were $395 million above projections, representing a 46 percent increase over similar collections in April 2018. A complete, updated revenue forecast is expected next week, but those totals mean the budget surplus for the current fiscal year could be more than $700 million, although it was unclear as of this writing how much of the additional revenues would be recurring or a one-time event.​

The biggest and best annual conference for North Carolina cities and towns -- CityVision 2019, May 14-16 in Hickory -- is straight ahead, and while it's easy to get immersed in the conference's programming, speakers and connected events, there's another feature that will help you navigate and make the most of it. Download the new "NC League Mobile" app to keep tabs on what's happening at the conference and discover interesting materials and media -- including podcast episodes, social media connections and details on the League's fresh rebranding. It's available by search in the App Store (iPhone or iPad) and Google Play (Android). Once you open the app, you can create your own account. All CityVision 2019 attendees will have free WiFi access throughout the convention center. We'll see you there!

Beating this week's crossover deadline was a proposal by electric membership cooperatives to expand rural broadband service, addressing a key goal​ of League members. HB 386 Electric Co-Op Rural Broadband Services​ passed the House on a nearly unanimous vote on Tuesday and crossed over to the Senate for consideration. (The bill mirrors a Senate proposal, SB 310, which passed its originating chamber last week.) Legislators have praised the co-ops for bringing forth a solution to a critical economic development issue, with the bill poised to clear statutory barriers and allow co-ops to partner with private entities in rolling out broadband service, a concept similar to the model we've reported about in the League-supported FIBER NC Act, HB 431. 
In other news, Gov. Roy Cooper on Wednesday announced close to $1​0 million in grants meant to improve high-speed internet possibilities in economically disadvantaged areas. That's through the Growing Rural Economies With Access to Technology, or GREAT, grant program. Grant recipient​s are internet service providers and electric co-ops; municipalities were not made eligible by the enabling legislation. A press release​ from the governor's office has details.

State leaders have selected multiple city officials to serve on a new commission to examine transportation funding sources, with Raleigh Mayor Nancy McFarlane picked as the group’s co-chair and Banner Elk Mayor Brenda Lyerly and Charlotte Council Member Julie Eiselt also serving among the group’s 14 members. The NC FIRST Commission (in longform, the North Carolina Future Investment Resources for Sustainable Transportation Commission) met for the first time last Friday. With a mission to advise Secretary of Transportation Jim Trogdon of potential sources of funding to build and maintain the state’s transportation system, the commission’s work addresses one of the top policy concerns of municipal officials. Meeting every two to three months for the next year and a half, the commission will deliver its recommendations in time for the convening of the 2021 legislative biennium. The perspective of city officials will likely play a prominent role, starting with a presentation that League Chief Legislative Counsel Erin Wynia gave at last week’s kick-off meeting. Wynia, along with other speakers, addressed the numerous factors disrupting age-old transportation funding sources, such as the gas tax. The group’s next meeting is set for July 12. View the meeting schedule online​.

Among bills that didn’t pass by the crossover deadline this week was legislation that sought to create a private cause of action for people who claim their municipality or its police agency isn't complying with state immigration law. But, according to media outlets, legislative leaders are saying the bill still has a chance. HB 135 Government Immigration Compliance​ cleared the House Rules Committee this week, and although it didn't make the deadline for chamber passage and was returned to the Rules Committee, the Insider State Government News Service reported on Friday that it may still be considered. The outlet quoted of House Rules Chairman David Lewis, "We are talking about ways the bill may still be eligible if it includes a fee or funding provision," which is a component of bills unaffected by the crossover deadline. The bill, in addition to creating the private cause of action, would also waive governmental immunity for any city or county that enacts a so-called sanctuary city policy, ordinance or procedure. Punishments would include the withholding of various tax monies paid to local governments for one year. In discussing the bill, legislators have not offered any examples of cities in violation of the state's sanctuary cities law and the League is unaware of any in violation.