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League Bulletin

July 1, 2016

It was a full-tilt week at the N.C. General Assembly, with a $22.3 billion state budget on its way to the governor, the movement of several bills touching local policy, honors bestowed upon a number of retiring lawmakers and paperwork to ultimately adjourn the 2016 session -- making this the presumptive closing week. House Bill 2 also entered the mix, with caucus meetings focused on possible changes to the controversial law.

The budget won its final vote of approval in the legislature shortly after noon on Friday on a bipartisan 91-22 House vote. (See more details below in this newsletter.) As lawmakers carried the budget through and tightened up their last measures for the year, they took a moment to recognize those who will be retiring when the session ends, handing some of them commemorative gavels and inductions into the governor's prestigious Order of the Long Leaf Pine. The League would like to wish all retiring legislators the best for the future and congratulate them on their public service.

Still unknown by publication time was the fate of HB2, which has been the subject of much public debate ever since the March special session that sent it to the governor to be enacted. News reports on possible revisions to the bill -- which deals with restroom access, anti-discrimination policy and local authority -- have centered on reaction from the NBA, whose commissioner has voiced opposition to its provisions and said the organization is reconsidering letting Charlotte host the 2017 NBA All-Star Game with HB2 in its current form. Click here for more.

Meanwhile, the legislature was intent on concluding business for the year, with an adjournment resolution in the Senate shooting for no later than July 1 -- as this bulletin is being written. The action continues. The following items are as of 1 p.m. Friday.

A proposal moving in the General Assembly's final moments would usurp local authority in local elections. Sec. 5 of SB 667 Elections Omnibus Revisions, slated for a concurrence vote in the Senate on Friday afternoon following House approval on Thursday, would have municipalities hold their elections in even-numbered years beginning in 2020, a statewide measure to which League leadership has voiced opposition. "This provision has received no study and, so far, no debate, and studying an issue after it becomes law will not make up for that fact," Jacksonville Mayor Pro Tem and League 2nd Vice President Michael Lazzara said in a news release Thursday.

The bill states that it is the General Assembly's intention to provide for even-numbered year municipal elections, and that the Joint Legislative Elections Oversight Committee would study options to implement the change and recommend any legislation it deems advisable. The committee would report its findings in time for the legislature's 2017 long session. The News & Observer's coverage of the proposal notes that the bill also includes a provision requiring the attorney general to defend any lawsuits challenging legislative redistricting plans for local governments.

Last week, we reported on another local elections measure, to change how Asheville City Council members are elected. SB 897 Asheville City Council Districts would shift the city from at-large elections and bring about electoral districts, a move that city officials including Mayor Esther Manheimer opposed. They argued that such changes should be decided locally. That bill, already approved by the Senate, was up for House consideration at the time of this writing on Friday.

By an overwhelming majority, the House resurrected and finalized a rental registration proposal that had raised serious concerns by cities in previous legislative sessions. Yet after bill sponsor Rep. Bill Brawley amended that prior proposal, the measure passed by a 110-1 House vote late Thursday night. The amendments included changes requested by cities with rental registration programs, including Durham, Fayetteville, and Winston-Salem, as well as a change requested by the N.C. Sheriff’s Association. Rep. Brawley stated that with those amendments, the concerned parties had withdrawn their objections to the bill. Throughout the House floor debate, other interests weighed in supporting the bill, including Cleveland County and Charlotte Rep. Beverly Earle, whose city also operates a rental registration program. The League appreciates Rep. Brawley's willingness to meet the concerns of the cities mentioned above.

SB 326 Local Gov'ts/Inspect Bldgs & Structures contained nearly identical language to HB 530 Local Gov'ts/Inspect Bldgs & Structures, which received one committee hearing last year. Like its predecessor, SB 326 places restrictions on the ways cities run rental registration programs. Cities around the state successfully use these programs to force absentee landlords to address repeated criminal and housing violations on their properties, thus upping the quality of available housing and protecting the public safety of neighboring tenants and property owners. In explaining the rationale for the proposal on the House floor, Rep. Brawley stated that while the tool offered cities a useful crime control tool, some cities had abused that authority. The bill now heads to the Senate for a concurrence vote. Contact: Erin Wynia

Several wins for municipal government are found in the compromise budget that received final legislative approval on Friday. It continues last year's level of Powell Bill funding; funds downtown revitalization in nearly 60 municipalties; directs the Department of Environmental Quality to allocate funds for water resources programs that include projects in several cities and towns around the state; provides community colleges with money to create a continuing education program for local government and public authority finance officers; gives additional funding for state water and wastewater infrastructure grants; continues the state's film grant program; gives additional money to the Clean Water Management Trust Fund; sets up a study on the benefits of beach nourishment and the impact of the coastal economy; and increases receipts for the Local Government Commission to fund an additional position to assist local governments with financial matters, among other positives.

The League thanks General Assembly lawmakers for considering municipalities in their deliberations, and additionally thanks League members for voicing their concerns and working with legislators for positive outcomes. The budget's approval comes at the end of a bustling legislative week that led the House to a late-evening initial vote on Thursday and a 91-22 bipartisan final vote on Friday. The Senate's approval came earlier this week. The $22.3 billion plan now heads to the governor for his signature.

A proposal to direct occupancy tax dollars toward building a sports complex in Jacksonville failed to pass the House Finance Committee this morning on a 9-18 vote after fierce debate over how the City may spend the revenues. The House has informal rules dictating the allocation of local occupancy tax levies, with the preponderance going toward travel and tourism promotion costs. However, SB 46 Jacksonville Occupancy Tax would allow up to two-thirds of the local tax proceeds for "tourism-related expenditures," language that would increase amounts available to build the sports complex. The bill also contained a 10-year limit on this allocation of funds. Bill sponsor Sen. Harry Brown, who had unsuccessfully sponsored similar bills in previous sessions, argued that the bill was necessary because Jacksonville needed to build a tourism draw -- the sports complex, in this case -- in order to have something to promote. League members support proposals such as SB 46, endorsing a policy goal that states: "Allow all municipalities to adopt occupancy taxes and use revenues from those taxes to fund municipal service and infrastructure costs in order to support travel and tourism."

Before voting on the proposal, committee members debated the merits of passing a bill that ran counter to the committee's informal rules, with some members suggesting that strict adherence to those guidelines ignored local funding challenges in communities that did not have robust tourism attractions to promote. On the other hand, tourism industry representatives echoed the comments of other committee members, testifying that a favorable vote would lead to many more similar local government requests in future sessions. After disapproving the Jacksonville bill, the committee quickly approved SB 874 Sanford/Harnett OT, another occupancy tax bill that followed the committee's informal occupancy tax bill guidelines. That bill now advances to the full House for consideration. Contact: Chris Nida

Once signed by the governor, North Carolina will have a much needed law to address the disclosure and release of law enforcement recordings. In an attempt to balance concerns about transparency and privacy, both chambers took action this week to approve HB 972 Law Enforcement Recordings/No Public Record, which makes it clear that these recordings are neither a public record nor a personnel record.

The proposed legislation then provides a detailed framework for when a recording may be viewed or released and to whom, providing statutory guidance to law enforcement officials and courts. Many legislators recognized the measure was a step in the right direction, noting that currently there is not a law that would require release of body-worn camera recordings. (Read previous League coverage here).

Before final approval, the Senate added to the House's proposal measures to allow local health departments and nongovernment agencies to create needle exchange programs, which have been used in other states to reduce the spread diseases by drug users.

The League thanks bill sponsors Reps. John Faircloth and Allen McNeill and all legislators for their thoughtful consideration and hard work on a complicated topic. Read more here and here. Contact: Sarah Collins

In a week filled with countless committee meetings and votes, here are some highlights of the legislative action of interest to cities and towns this week:

  • HB 100 Local Government Immigration Compliance: This Senate proposal, which would block local governments from school and Powell Bill funding if they have so-called “sanctuary” policies for immigrants in the country illegally, gained final Senate approval Tuesday before advancing to the House. As of this publication, the House had not calendared this bill for a hearing. Read more details about the bill in this article from last week's LeagueLINC Bulletin.
  • HB 548 Conforming Changes/Constitutional Amend: When paired with HB 3 Omnibus Constitutional Amendments, the Senate advanced a comprehensive proposal this week that would ask voters to approve three separate amendments to the N.C. Constitution, dealing with eminent domain, income tax rate limitations, and the right to hunt and fish. As of this publication, the House had not calendared either bill for a hearing. 
  • HB 550 Raleigh Apodaca Service Dog Retirement Act: Within a week of approving two local bills that would allow cities and counties in designated areas to donate a retired service animal to the local employee who had normal custody and control of the animal during its service, the Senate last week sent the House a statewide bill that accomplished the same purpose. As in the Senate, the House yesterday voted unanimously to send the bill to the governor for his signature. The two local bills, both of which are now law, are HB 952 Honor Our Service Animals/Sheriff Contracts and SB 849 Wake Cty Towns Donate Retired Service Animals.
  • HB 630 Drinking Water Protect'n/Coal Ash Cleanup Act: Both chambers debuted and finalized HB 630 this week, couching it as a compromise with the governor. The bill addressed the manner in which electric providers such as Duke Energy must clean up coal ash ponds in the state. Much like a prior proposal vetoed by the governor last month, this bill directed electric providers to provide alternate drinking water supplies to property owners near the coal ash impoundments, with a preference given to public water supplies. Importantly, the bill included language to protect the solvency of public water systems that would risk financial stability if providing water to affected property owners was unsustainable for the system. The bill now moves to the governor for his consideration.
  • HB 804 Kelsey Smith Act: This bill, which would give law enforcement agencies easier access to cell phone data for locating endangered persons or dangerous suspects, entered conference negotiations Wednesday. Meant to find missing people who are believed to be in "imminent risk of death or serious physical harm or to be criminally involved in the imminent risk of death or serious physical harm to another," the proposal set circumstances under which law enforcement agencies could access telecommunications device data. The bill would require law enforcement to obtain a warrant to access the cell phone's location data.
  • HB 959 DOT Proposed Legislative Changes: Conferees for this bill added a provision this week that responded to a N.C. Supreme Court ruling June 10 that struck down the state's 29-year-old law allowing NCDOT to place development restrictions on land planned for future roads. The proposed legislative changes included using dollars currently earmarked for state-funded transportation projects to pay court costs and landowner fees, which could eventually run into amounts of hundreds of millions of dollars. The FY16-17 state budget included just over $32 million in additional amounts for this same transportation program. This bill now heads to the governor for his consideration.
  • HB 1074 Schools/CC Facilities: After adding numerous provisions to a bill that began as one to require lead testing of school drinking fountains, including a provision to address concerns over water quality as the U.S. Whitewater Center in Charlotte, the House passed this bill yesterday. The lead testing requirement may necessitate the involvement of the local water supply system serving that school.
  • HB 1126 Red Light Cameras/City of Greenville: With final votes this week by the Senate, this local bill became law yesterday. As with a 2014 measure that applied to Fayetteville, the law gives Greenville the ability to recoup the costs of operating a red-light camera system and raises the civil penalty by $25.
  • SB 481 Fund Small Business/DOR Rulings/City Rt of Way: The Senate gave its final blessing Tuesday to this bill, which effectively prohibited municipalities from charging utility companies fees related to work in municipal rights-of-way (more detail here). The bill now moves to the governor for his signature.
  • SB 770 NC Farm Act of 2016: The House debate this week on SB 770 centered on a provision that exempted agricultural water withdrawals from any future capacity use area designation, allowing these withdrawals to occur with no regulation. Ultimately, House members removed the provision before voting to send the full measure back to the Senate, which voted to concur on the bill Friday.
  • SB 865 State Health Plan/Admin Changes/Local Govts: The House voted by a large margin yesterday to advance a Senate proposal that would raise the number of local government employees permitted to be enrolled in the State Health Plan from 10,000 to 16,000 persons. The bill also allows certain local governments to leave the Plan, if they give notice to the plan by September 15. The Senate must take at least one more vote, a concurrence vote, before the bill could be sent to the governor for his signature.
  • SB 875 Town of Sunset Beach/Deannexation: This bill received an unfavorable recommendation from an annexation subcommittee of the House Finance Committee and had proceeded no further as of publication time.

The Federal Aviation Administration favors state and local government in its new final rule for unmanned aviation systems (UAS), generally known as drones, by determining that associated regulations are better handled closer to home. The final rule, found here, followed a FAA determination that federal preemption of state and local rules wasn't warranted and that "certain legal aspects concerning small UAS use may be best addressed at the state or local level." The FAA did, however, release a fact-sheet meant to guide state and local regulation.

The National League of Cities (NLC) in a statement called it a great opportunity for the drone industry to work with municipal leaders. "Cities commend the FAA for taking this important step in acknowledging that broad federal preemption would represent an overreach into regulations that have always been left to city officials, because these decisions are best handled at the local level," NLC CEO Clarence E. Anthony said.

Click here for a summary of the final rule, which will take effect in late August and offer safety regulations for drones weighing less than 55 pounds engaged in "non-hobbyist" operations (usually commercial, but governmental as well). While they won't preempt state and local policy, regulations include requiring operators to keep their aircraft within their line of sight and fly them only in daylight hours.