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League Bulletin

June 16, 2017

A legislative committee on Wednesday gave near-unanimous backing to a bill that supports a goal among North Carolina cities and towns for revenue flexibility as they pursue economic development and infrastructure needs. HB 900 Safe Infrastructure & Low Property Tax Act from Reps. Stephen Ross of Burlington and Jason Saine of Lincolnton advanced through the House Finance Committee and was referred to House Rules. The bill had surfaced in Finance with amended language that, as approved, would authorize municipalities to levy a municipal-only quarter-cent sales and use tax that could only be approved with the consent of local voters in a referendum.

As noted in publications including the Burlington Times-News, proceeds could only go toward the construction and improvement of public infrastructure or for economic development. This flexibility would reduce pressure on local property tax rates and encourage municipal investments that promote economic growth and job creation. Municipalities continually expend resources to work cooperatively with public- and private-sector partners to recruit businesses and encourage business development. Cities and towns thank Reps. Ross and Saine for their leadership in this important economic development aid. The bill requires full House and Senate approval before it could go to the governor for signing.

After receiving the green light by a House regulatory reform committee Wednesday, a modified but still problematic billboards bill now heads to the House floor for a vote, likely next week. Two previously scheduled House floor votes on HB 581 Revisions to Outdoor Advertising Laws have been scuttled in recent weeks, due in part to opposition from city officials as well as other stakeholders, such as the N.C. Department of Transportation (NCDOT). However, the NCDOT told members of the House Committee on Regulatory Reform that while it still held concerns about the bill, its position had changed to neutral after the committee's removal of a provision that would vastly increase the payments made to billboard owners in condemnation actions.

Please take action this weekend to let your House members know of the impacts of this bill on your community. Share with them which areas of your city or town would have to accept billboards if this bill became law. You may find talking points here. Or, for a sample letter, email NCLM grassroots associate Vickie Miller. Among its many troubling provisions, the bill gives billboard owners carte blanche permission -- with no input or discretion by local officials -- to relocate existing billboards to any place in a city or town with a commercial or industrial zoning component. In cities that have worked to responsibly regulate outdoor advertising, areas with no current billboards or those with mixed-use residential and commercial zoning would have to accept relocated billboards. And, even more problematically, when relocating signs, HB 581 would allow billboard owners to make the signs taller, larger, and digital, even if local ordinances would otherwise prohibit those upgrades. Billboard companies could also, under the bill, choose regardless of condemnation to relocate billboards to municipal areas that currently do not allow them. Contact: Erin Wynia

House economic development leaders unveiled a reworked economic development proposal yesterday that would direct more resources to rural areas without harming high-growth communities. The League especially thanks the leadership of Rep. Susan Martin for seeking the input of cities on the latest version of HB 795 Economic Development Incentives Modifications, which gained the approval of the House Committee on Commerce and Job Development on Thursday. Numerous stakeholders spoke in favor of the bill, including Robbins Town Manager David Lambert, the N.C. Chamber, the N.C. Rural Center, and several economic development organizations.

Among its many provisions, the bill would direct a larger percentage of each Job Development Incentive Grant award to the Utility Account, a move that would provide more infrastructure funding for less-prosperous communities. The Utility Account provides grants and loans for infrastructure that serves specific commercial or industrial sites in economically distressed areas. Another related provision in HB 795 would allow Utility Account funds to pay for infrastructure that serves existing businesses, a long-term investment that would benefit several generations of businesses on those sites.

The measure also takes initial steps toward changing the way the state calculates and uses measures of economic distress. The League membership supports legislation to revise the tier method of measuring levels of economic distress to focus on the causes of distress. HB 795 moves in this direction by altering three of the four factors that go into these calculations, changing the basis of the unemployment and wage factors and eliminating the population decline factor. Then, it deletes most of the current adjustment factors now in statute. During the committee discussion, Rep. Martin acknowledged that these provisions would result in changes to some counties' economic tier rankings, but she said they more accurately captured the level of a community's distress. She also pointed out that the bill directed further study of the issue, which would continue similar legislative discussions that have taken place for the past several years. The bill now goes to the House Finance Committee for consideration. Contact: Erin Wynia

A proposal that seeks to standardize and provide statewide consistency across local jurisdictions for reviewing development-related plans and issuing permits advanced this week in the first of several planned House votes. After a lengthy discussion, the House State & Local Government II Committee approved HB 794 NC Permitting Efficiency Act of 2017 on Thursday. The bill contains first-ever state-level procedural guidelines for cities and counties to follow when permitting construction-related activities such as grading, soil and erosion control, water and sewer, and driveway cuts. (Read details of the original proposal.) The bill would also allow the state's large- and mid-size cities to accept delegation of N.C. Department of Transportation construction approvals.

Prior to this vote, the League worked closely with Rep. Scott Stone, a consulting professional engineer, to make improvements to the bill. The League appreciates Rep. Stone's willingness to take this feedback into account in the latest version of HB 794. With these improvements, the bill provides more flexibility for cities to accommodate extenuating circumstances that come up during permit application reviews. And as compared with the filed version of the bill, the changes also ensure that cities may recoup costs associated with off-site development improvements and electronic permit review systems. The League will continue discussions with bill sponsors as this measure advances. Its next stop is in the House Finance Committee. Contact: Erin Wynia

Large reform packages appeared this week in committees of both chambers as multiple provisions were added to two existing bills. SB 16 Business & Agency Regulatory Reform Act of 2017 was presented by co-chairmen Reps. John Bradford, Chris Millis, and Dennis Riddell in the House Regulatory Reform Committee. And HB 374 Business Freedom Act appeared in Senate Commerce and Insurance.

The League is analyzing both bills, but is noting provisions that may be of interest to cities and towns. SB 16 Business & Agency Regulatory Reform Act of 2017 directed the following Legislative Research Commission (LRC) studies:

  • Sec. 17 - Directs the LRC to study the regulatory, financial, and infrastructure burdens of communities east of Interstate 95. That study may include: (1) the administrative burdens and increased costs due to unnecessary or duplicative environmental burdens, (2) the impacts on private property rights and land development due to land use and other restrictions imposed by local governments, (3) the impacts of underinvestment in necessary infrastructure to encourage and sustain economic development, and (4) any other relevant topic or issue.
  • Sec. 21 – Directs the LRC to study the creation of a mediation and arbitration board that would serve as a mediator and arbitrator of disputes between local governments and owners or developers of property regarding regulation of the use or development of property.
  • Sec. 21.1 – Directs the LRC to study the state’s sedimentation and erosion control program, and that programs that have been delegated to local governments to examine how the programs could be more efficient and streamlined.
  • Sec. 21.2 – Directs the LRC to study flood control measures to prevent flooding damage to persons and property in the Lower Neuse River Basin, listing specific areas of study.

HB 374 Business Freedom Act includes a section to apply existing laws that restrict the State's stormwater program's regulation of airports (and land near airports) to local governments. Existing law restricts the Department of Environmental Quality from requiring stormwater control measures that promote standing water at public airports that support commercial air carriers or general aviation services. This is due to safety concerns over water attracting birds. The proposed change would make the same restrictions applicable to a local government with a stormwater ordinance adopted pursuant to the water supply watershed laws. It would also require a local government to deem runways in compliance with water supply watershed management protection ordinances if certain measures of stormwater control are provided.

SB 16 passed the House this week and will next be considered by the Senate for concurrence; HB 374 will be next considered by the Senate Rules Committee. Contact: Sarah Collins

Lawmakers are getting closer on the budget. House Speaker Tim Moore on Thursday said that his chamber was wrapping up negotiations with the Senate following a final offer from the House, which at the time of this writing had a session scheduled for 3 p.m. Friday (with a Saturday session possible) in the event that a compromise budget could be read in to the record. Senate leader Phil Berger told publications including the Insider that next week may bear possibility for budget movement or votes as talks continue. The goal is to have a finalized and signed budget in place by the end of the fiscal year, June 30, though lawmakers have implemented placeholder budgets in years when negotiations carried past that deadline. The passage of a budget would signal the homestretch of the current legislative session, which still has a number of other bills on the burner. (The League, in recent Bulletins, has shared spreadsheets that show what each chamber's plan proposes that is of interest to cities and towns.)

As General Assembly budget writers and leadership close in on a final spending plan to send the governor, legislative committees have been hard at work moving bills they'd like to see on the books before the session ends. Not all are guaranteed to pass before the final gavel, but here are a few of potential interest to cities and towns that received action this week (presented by bill number):

SWANC President Daryl Norris presents at this week's legislative breakfast. Photo credit: Sarah Collins

The Storm Water Association of North Carolina (SWANC), a League affiliate organization, joined with lawmakers and their staff at a breakfast in the Legislative Building on Wednesday. Attendees learned about SWANC and stormwater management policies in North Carolina. SWANC, formed as a collective voice of stormwater programs across North Carolina, includes members from the public and private sectors who are experts in stormwater management and the implementation of federal and state stormwater requirements. SWANC extends its sincere thanks to the legislators and staff who participated and to Dr. Bill Hunt of N.C. State University for providing a great presentation that explained the many reasons stormwater is managed, including property protection and reduction of flooding. Email SWANC for more information.

City and state officials listen to President Trump discuss his infrastructure approach. Photo credit: National League of Cities

Municipal leaders nationwide are keeping eyes on infrastructure proposals out of the White House that, as currently presented, may provide more control to state and local governments but fall short of the need for a substantial direct investment. "The result is a mixed bag for cities -- some crucial programs shored up, major changes to regulations, and a great deal of funding uncertainty for the future," says a National League of Cities post on "6 Things Cities Need to Know About Trump's Infrastructure Plan." It discusses President Trump's plan in more detail and provides recommendations that would help municipalities. Among concerns is the proposals' lack of attention to broadband infrastructure, NLC says. Fayetteville Mayor Nat Robertson was among city-level officials from across the nation at a bipartisan meeting with President Trump last week on infrastructure policy and local needs.

North Carolina's state treasurer is on track to beat his goal of cutting fees paid from the state pension fund to third-party managers by $100 million during his first term of office, the News & Observer reports. Treasurer Dale Folwell said this week he had reduced those payouts by almost $50 million so far, and he told news outlets that puts him on track for a $200 million cut by the end of the four-year term.

Eleven airports across the state are down for improvement with the announcement of $35.4 million in state funding this week. The money is for projects that enhance airport safety and boost economic activity and tourism, according to a press release from the N.C. Department of Transportation (NCDOT) with a full list of benefitting airports. They include New Bern, Kinston, Statesville, Jacksonville and others. "Completing these projects will increase the safety of these facilities while also maintaining the link these airports provide our state to the national and global economies," NCDOT Division of Aviation Director Bobby Walston said. According to agency data from 2016, aviation contributes $31 billion in annual economic impact to the state and accounts for 123,400 airport-related jobs.