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League Bulletin

June 30, 2017

After roughly six months of lawmaking and a positive, productive outcome for North Carolina's cities and towns, the General Assembly early Friday morning concluded its 2017 regular session -- with plans to come right back. The House and Senate agreed to an adjournment resolution that marks two extra dates this year for reconvening over specific kinds of business. Starting on Aug. 3, the chambers may consider veto overrides; appointments and confirmations; bills in response to court action (like with electoral districts); impeachment bills; concurrence votes and conference reports on legislation that was eligible as of late this week; and revenue bills that had passed an initial vote in the receiving chamber or passed an initial vote for concurrence in the originating chamber, but had not yet been taken up for a final vote.

After concluding those matters, they'll adjourn again to reconvene Sept. 6. Starting on that date, they may consider revising House, Senate, judicial and local electoral districts; constitutional amendments; veto overrides; appointments and confirmations; impeachment bills; and court action responses. After adjourning that session, the plan is to break until the May 2018 short session.

Looking back on the last six months at the General Assembly, municipalities can be proud of their hard work and communication. Potentially damaging bills were minimized or stopped, like the harmful billboards bill that saw a rare floor-vote failure this week after the League, local officials and partners made sure lawmakers knew the fallout that its passage would create. Meanwhile, important and valuable policies became law. They included a state budget that recognizes the key role that cities and towns play regarding local investments for jobs and growth. (Click here to review the budget's contents that are of interest to cities and towns.) The General Assembly, in the final stretch, also presented and approved legislation laying out how the relief funds for Hurricane Matthew and other disasters will be distributed, for such things as housing, repairs and flood insurance subsidies, with a $100 million allocation.

A full and detailed analysis of the session and its outcomes for cities and towns -- the End of Session Bulletin -- will be available in the near future. The League and its members would like to thank the General Assembly, cities and towns and all partners for embracing teamwork in shaping policies that in turn positively shape North Carolina.

In a strong bipartisan show of support for local control over billboard siting decisions, the House voted down HB 581 Revisions to Outdoor Advertising by a 48-67 margin Monday. Historically, bills rarely fail on a floor vote. The long floor debate followed weeks of outreach to legislators from local officials, who opposed the bill and explained its impacts on local communities. The bill's many provisions (summary here), taken together, meant that local officials would no longer have the ability to determine the character and appearance of their communities, with respect to decisions about where billboards were located and how they looked. During the Monday debate, many House members noted the potential of the bill, with the loss of local control, to disrupt local visions for economic development that bring residents, businesses, and visitors to North Carolina. Cities and towns appreciate the willingness of legislators to oppose this measure and in particular thank the following representatives for their comments, proposed amendments, and leadership during Monday's debate: Reps. Chuck McGrady, Pricey Harrison, Jay Adams, Ted Davis, Becky Carney, Grier Martin, Joe John, Brian Turner, and Mary Belk. None of the provisions of HB 581 may advance for the remainder of the legislative biennium. Contact: Erin Wynia

Members of both the House and Senate voted unanimously this week in support of a compromise water impact fees bill negotiated by the League, giving final approval for a key advocacy goal of cities and towns. The measure now sits before Gov. Roy Cooper. With the passage of HB 436 Local Government/Regulatory Fees, legislators made great strides to ensure that North Carolina's path to growth was not imperiled. Also with their votes, legislators limited potential local government liability from any future adverse court rulings related to these fees. For months, League representatives negotiated the compromise language with the N.C. Association of County Commissioners and the N.C. Home Builders Association. Cities and towns sincerely appreciate the commitment of the many legislative sponsors who supported this initiative, including those who signed on as primary sponsors of early versions of this bill: Sens. Paul Newton, Chuck Edwards, and Norm Sanderson, and Reps. Chuck McGrady, Linda Johnson, Craig Horn, and Linda Hunt Williams. For a more detailed summary of HB 436, please read this report. Contact: Erin Wynia

Friday's adjournment gavels landed before lawmakers could give final consideration to a closely watched local revenue flexibility bill, HB 900 Safe Infrastructure and Low Property Tax Act. That doesn't mean it wasn't a success. HB 900, from Reps. Stephen Ross of Burlington and Jason Saine of Lincolnton, experienced remarkable bipartisan traction that took the concept -- a top goal of cities and towns -- much farther than it's gone in the past, even earning it a near-unanimous approval in the important House Finance Committee. Revenue options will remain a priority, meaning cities and towns across the state will continue to make their case that a new voter-approved revenue source like a quarter-cent sales tax for specific investments can encourage economic development while reducing pressure on the property tax base. The League would like to thank all members, legislators and businesses who got behind this vital proposal and pledge to keep it alive for the next eligible session. The League especially thanks sponsors Representatives Ross and Saine for presenting a nonpartisan solution to keep North Carolina on a strong growth track.

The General Assembly this week quickly addressed the problematic effects of a recent Supreme Court decision on the workers' compensation system after a number of groups, including the League, joined together advocating for the fix. HB 26 Workers' Comp/Approval of Disputed Legal Fees is now on the governor's desk for signing. The bill, in response to the June 9 Wilkes v. City of Greenville decision, ensures that an Industrial Commission worker’s compensation award does not create a presumption that future medical conditions of an employee are causally related to the compensable injury. The bill also allows those employees to request a hearing before the Commission to prove that their medical condition is causally related to the compensable injury. Cities and towns thank Sen. Dan Bishop for his work bringing forward this sensible proposal that reflected agreement among an array of stakeholders. Outlets including the News & Observer covered the bill's passage.

The General Assembly's $23 billion state budget became law on Wednesday, just in time for the July 1 start of the new fiscal year, after lawmakers overrode Gov. Roy Cooper's veto of the plan. Governor Cooper in his signed veto message had laid out a series of objections to the budget, stating among other things that it "neglects our schools and our economy," "lacks structural integrity by failing to account for population growth, inflation and looming federal reductions" and "contains provisions that infringe upon" the governor's abilities. Lawmakers, contending the budget sticks with a successful track record for the state, overrode the veto along party lines, with two Democrats voting with the majority.

We reported in last week's Bulletin on the budget's items of interest to cities and towns, the vast majority of them positive. They include a continuance of Powell Bill support, the creation of a site improvement fund to help local governments, parks and recreation aid, film grants and much more. A League-prepared spreadsheet offers full details.

Legislation enjoying some of the strongest consensus of the session received the governor's signature on Thursday. HB 243 Strengthen Opioid Misuse Prevention (STOP) Act had more than half of the House's membership on its list of sponsors and received a unanimous final vote earlier this week, as officials across the state and country have recognized the steep increase in opioid-related deaths and dependencies. Reps. Greg Murphy, Ted Davis, Chris Malone and Craig Horn were chief sponsors of the bill that Gov. Roy Cooper, upon its signing, called one of the "important first steps to stem the opioid epidemic" here. The law includes a requirement on prescribers and pharmacies to check the prescription database before prescribing opioids and allows local governments to support needle-exchange programs. Separately, the state's budget creates a pilot program in the Department of Public Safety, in conjunction with the City of Wilmington, to establish a Quick Response Team to work with qualifying local entities to address the needs of opiate and heroin overdose victims who are not getting follow-up treatment.

After receiving two Senate committees votes last week, an industry-backed small cell wireless proposal advanced this week through its two remaining committees and the full Senate. Because the measure received no amendments in the Senate, it headed to the governor for his consideration. HB 310 Wireless Communications Infrastructure Act implemented comprehensive procedures and restrictions on local government regulation of small cell wireless facilities. Small cell facilities typically consist of an antenna, utility pole, and ground-mounted equipment box. Prior to the bill's movement through the legislative process, the League engaged in extensive negotiations to ensure that cities would retain oversight over matters of concern such as public safety, space between facilities, aesthetics and appearance, utility undergrounding policies, and historic districts. The League also negotiated other terms more favorable to cities than in the filed version of the bill. Contact: Erin Wynia

Both legislative chambers signed off on a building inspection regulatory reform bill this week that would require new local government procedures and reports. HB 252 Building Code Regulatory Reform directed cities and counties to create an informal internal review process of local building inspectors' decisions. Intended to provide contractors and builders with transparent steps they can follow when they disagree with an inspector's decision, the measure laid out three minimum components of the internal review process. Then, HB 252 required all local building inspection departments to submit a report on the implementation of this process, including how often it was used and the outcome of each review, each year for the next five years. The reports must go to the Joint Legislative Committee on Local Government by Jan. 15, beginning in 2018 and ending in 2022. Contact: Erin Wynia

With one exception related to the state's large economic incentives grant program, legislators this week pushed further economic development program reforms to a future legislative session. The week featured separate House committee discussions on revised (but unpublished) versions of two large initiatives: HB 795 Economic Development Incentives Modifications and HB 904 North Carolina Rural Job Creation Fund. The first bill contained numerous changes to a variety of state economic development programs that benefitted cities and towns, as detailed in this prior Bulletin article. The second bill would have created a new program that would use state appropriations as seed money to capitalize and match private funds, which in turn would be invested in rural businesses via loans. Ultimately, House members decided that both proposals needed more in-depth discussion and delayed their consideration until a future session.

However, the House separately passed SB 223 Exclude Tiers 1 & 2 From JDIG yesterday to remedy the fact that the Job Development Incentive Grant (JDIG) fund had already hit its cap for awards for the 2017-18 timeframe. SB 223 partially eliminated the current cap for JDIG awards, allowing it to be exceeded when grants are awarded to companies locating in the most economically distressed areas of the state (tier 1 and tier 2 counties). Additionally, the bill ensured that the current cap did not apply to projects that qualified as a high job-generating project known as a “transformative project.” While the Senate did not take action on this bill before adjourning, the bill remains eligible for consideration when the legislature returns for session on Aug. 3. Contact: Erin Wynia

While efforts on a statewide broadband bill stalled over the past few months, legislators approved a local municipal broadband bill Wednesday to allow continued service to the Town of Pinetops. The Edgecombe County town, which already received electric service from the City of Wilson, will retain gigabit broadband service provided by Wilson with the passage of HB 396 Municipal Broadband Service Area. However, the bill directed Wilson to cease its service to Pinetops 30 days after the date of retail service provided by a "competitive provider." The bill did not require that private provider to offer a comparable level of broadband service to Wilson's Greenlight service. Without action by the legislature, Wilson would not have been able to legally charge for the service to Pinetops due to restrictions currently in state law. Contact: Erin Wynia

Although the legislative chambers proposed multiple large reform packages this session, they could only agree to a few provisions. Many environmental and regulatory reform provisions appeared in multiple bills, sometimes with minor changes to entice the other chamber to agree to the provision. Amendments to some of these proposals were still in play the last day of session, including a provision that would have limited local governments' ability to control by zoning the siting of asphalt plants. However, similar to the last legislative session, there were too many differences in what the chambers wanted to pass and none of the remaining regulatory reform packages succeeded in gaining final approval of the General Assembly.

Here are the reform bills that included provisions of interest to cities and towns, but did not pass prior to adjournment:

Ultimately, two provisions of interest that were originally seen in the Senate’s proposed version of HB 374 made up the majority of SB 8 Various Local Changes/ Nonpublic School Bkg Ck, which passed in a conference report on the last day of session. Those provisions were:

  • a section to apply existing laws that restrict the state's stormwater program's regulation of airports (and land near airports) to local governments, restricting the ability to require stormwater control measures that promote standing water due to safety concerns over attracting birds, and requiring a local government to deem runways in compliance with water supply watershed management protection ordinances if certain measures of stormwater control are provided.
  • a specific exemption to building code provisions that allows the City of Greensboro to complete a needed parking deck project.

Legislators did pass SB 131 Regulatory Reform Act of 2016-17 earlier in the 2017 session, and it included the so-called "non-controversial" reform provisions that had been previously considered in 2016. With the breadth of the adjournment resolution for what can be considered when they come back in August, many of the bills for which conference committees were appointed could still be subject to agreement. Contact: Sarah Collins

H284 25-year LEO Retirement Option that would provide an additional retirement option for law enforcement officers passed the House this last week of the legislative session, but was not taken up by the Senate. Under the bill, law enforcement officers could retire after 25 years of service, regardless of age, but would receive a reduced retirement benefit. The proposal also allowed the employer to offer and negotiate a separation buyout to an officer who chooses to retire prior to reaching eligibility for the special separation allowance. The League thanks Reps. Gregory MurphyAllen McNeill, and the other sponsors for working with officers to find an additional retirement option that is revenue neutral for employers.

H284 was one of two proposals that emerged this session regarding the pension benefits that officers would receive if they retire after 25 years of service, instead of 30 years. S199 Law Enforcement Officer Retirement/25 Years was opposed by the League and received no consideration in the Senate. It would provide officers their full pension benefit after 25 years of service, which would have resulted in increased costs to the retirement system -- one that would be paid by employers through a significant increase in the contribution rate they pay to the pension system for officers. Read more here and here.

The retirement system that provides benefits to employees of cities, towns, counties and other entities of local government is the Local Governmental Employees' Retirement System (LGERS). It's funded by investment earnings, employee contributions, and employer contributions. Employers and employees make these contributions so that, upon an employee’s retirement from either system, he or she is able to receive a consistent, defined benefit based on salary and years of service. The North Carolina Department of State Treasurer is the agency that oversees the administration of North Carolina's pension systems, and many of their requested legislative proposals that related to the pension systems passed in the last weeks of session -- much of the contents of these bills were administrative and included:

Contact: Sarah Collins

Lawmakers on Thursday gave final approval to a bill directing the City of Asheville to create electoral districts for city council elections there, despite the argument from city officials that it's an issue to deal with locally and not with state legislation. SB 285 Equal Representation for Asheville is now law as a local bill does not require the governor's signature. It mandates six city-drawn districts by Nov. 1 -- or the legislature would draw them next year -- in a move away from the city's at-large elections system. The changes would take effect for the 2019 elections. It all transpired as the city was exploring a possible referendum on Nov. 7 to let local voters decide whether they want a district system. The Asheville Citizen-Times reported after the legislature's vote that Asheville City Council two days prior had voted unanimously on the second of three steps toward the citywide vote. "The move toward a referendum comes after an April poll commissioned by the council showed most respondents wanted to be able to vote on the idea of districts, though most also said they wanted to keep the at-large election system," the newspaper reported.

In other news, an amendment put into HB 528 Budget Technical Corrections allows the executive director of the State Board of Elections to reduce the canvass period in 2017 elections. The League believes this authority could help to address timing problems discovered by the State Board of Elections for some 2017 municipal election schedules. The House Elections and Ethics Law committee had previously considered HB 843 Municipal Election Schedule & Other Changes, but it was never considered by the full House.

In one of the last votes of the 2017 long session, legislators gave final approval to a bill that would allow the cities of Sanford and Jacksonville to spend the proceeds of local occupancy taxes on infrastructure projects, within certain limitations. Unlike a contentious end-of-session debate on the same topic last year, legislators this year worked through differences via a conference committee process on SB 552 Omnibus Occupancy Taxes. The differences stem from informal rules in each chamber's finance committees that dictate the allocation of local occupancy tax levies, with the preponderance going toward travel and tourism promotion costs. However, SB 552 goes against those informal rules in two cases. First, it designates a portion of the funds collected from the Sanford occupancy tax to operation, promotion, maintenance, and renovation of the local civic center. And second, it flips the current breakdown of purposes for which the Jacksonville occupancy tax may be spent, allowing two-thirds for any tourism-related expenditures (such as infrastructure) and the remainder to promote travel and tourism in the City of Jacksonville. Legislators' support of this bill falls in line with an advocacy goal of cities and towns that seeks legislation allowing occupancy tax revenues to be used to fund municipal service and infrastructure costs in order to support travel and tourism. Contact: Erin Wynia

A new provision to deannex a Kinston neighborhood appeared Monday in a Senate bill originally filed in March to deannex part of the town of Sunset Beach (the latter of which had been the subject of legislation that failed last year). Rep. Mitchell Setzer of Catawba had attempted to remove the Sunset Beach portion of the bill in the House Finance Committee, but the amendment failed. The House Finance committee approved the bill's new version with the added Kinston provision, which went to the House floor the next day. Rep. George Graham of Kinston offered an amendment on the floor to remove the Kinston portion, but it failed 47-68. The bill passed the House and went to a Senate vote.

Sens. Louis Pate of Mt. Olive and Don Davis of Snow Hill successfully urged their chamber not to concur with the House version of the bill, sending it into the conference process to resolve the differences, unfortunately without success. The bill went back before the Senate, where it passed 30-11. Cities and towns thank Representatives Setzer and Graham and Senators Pate and Davis for their efforts to remove the provision.

In what ended up being the final week of the 2017 regular session, lawmakers took action on a number of other proposals and moved many of them to the governor's desk, while some stalled at deadline. Below are updates on additional bills of interest to cities and towns that received action this week.

  • HB 275 No Stormwater Fees on Taxiways or Runways - Presented to governor. Exempts airports from paying stormwater utility fees for the impervious surface from runways and taxiways. To qualify for the exemption, the airport must use the amount of money saved for attracting business to the airport. The bill would also exempt runways and taxiways located on military property from paying the utility fee, without any qualification requirements.
  • HB 138 Revise Gang Laws - Presented to governor. Standardizes criteria for classification of criminal gang membership, creates a sentencing enhancement for certain crimes done by gang members, and increases penalties for certain gang-related offenses.
  • SB 155 ABC Omnibus Legislation - Presented to governor. Makes various changes to the Alcoholic Beverage Control Commission Laws, including allowing local governments to adopt ordinances greenlighting the sale of alcoholic beverages beginning at 10 a.m. on Sundays (instead of noon). Other measures in the bill reflect the growth of the state's craft brewery and tap room industry.
  • SB 419 Planning/Development Changes - Passed Senate, did not advance from House Rules Committee. Proposed reorganizing and simplifying the state's planning-related statutes.
  • HB 198 City & County Authority - Now law. Amends the City of Fayetteville's charter to authorize establishment of a small business enterprise program to promote the development of small businesses in the city and enhance opportunities for small businesses to participate in city contracts.
  • HB 161 Divestment From Companies that Boycott Israel - Presented to governor. Prohibits companies that divest from Israel from contracting with state agencies (which includes political subdivisions of the state). It also amends the existing Sudan and Iran divestment statutes to all follow the same structure.
  • HB 205 WC for Inmates/UI & WC/Newsprint Employees - Presented to governor. Among various other changes, the bill would "modernize publication of legal advertisements and notices" and "allow Guilford County and any municipality in Guilford County to use electronic means to provide public notice in lieu of publication."
  • SB 69 Local Gov't Comm/Finance Officer Training - Ordered enrolled. Clarifies existing law to ensure that a local government’s finance officer or other employee and governing board receive notification from the Local Government Commission (LGC) of any required training. It also requires the employing local government entity to submit proof to the LGC of completion of those training requirements.

The League's bill tracker includes status updates and descriptions of all bills of interest to cities and towns.

Calling all muncipal officials! Registration is NOW OPEN for Connect CityVision 2017, the League's action-packed annual conference scheduled for Sept. 20-23 in Greenville. Need a reason to register now? We've got an early-bird rate that will save you $50, but you have only until July 5 to take advantage. Don't let it get away from you. Register now. This year, we're doing things a bit differently: the conference will begin on Wednesday, with sessions and social events running through Saturday morning. We made the scheduling shift to accommodate the majority of cities' and towns' council meeting schedules, and we hope it will allow even more members to attend the conference.

The CityVision annual conference balances educational sessions with ample networking and social events so that municipal officials can learn from both experts and colleagues who may be facing similar issues back at home. This year's annual conference will connect attendees to the latest trends and best practices for incorporating technology, regional partnerships and projects, pathways for economic development, and leadership skills training into how municipalities operate and provide services to their communities. Don't wait. Register today.

Sen. Andrew Brock of Mocksville will resign his longtime seat in the Senate following his appointment this week to the Board of Review, an independent, three-member panel that deals with unemployment insurance appeals. Senator Brock, who has served in the Senate since 2003, is a co-chair on the Senate Finance Committe. The appointment came by way of Senate legislation that also appointed former Gastonia city manager Ed Munn to the Local Government Commission and former lawmaker Mitch Gillespie, who most recently has been a top staffer with House Speaker Tim Moore, to the Environmental Management Commission. All three terms are set to expire in 2021.  The League wishes each of them the best in their new roles.

Municipal officials are reminded that the qualifying period for Powell Bill funds is just ahead, as is a deadline for the reporting necessary for eligibility. The following are important dates to remember:

  • Certified Statement, street listing, and certified map (if applicable) are due by July 21
  • Powell Bill Expenditures Report is statutorily due by Aug. 1
  • Municipal Fiscal Data Report is due by Dec. 1

Cities will be disqualified from the Powell Bill program if all required documentation is not received prior to the disbursement of the allocation, according to the state.

Click here and here for more specific instructions.