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League Bulletin

July 2, 2020

Editor's note: This edition of the League Bulletin comes to you a day early, considering our office closure tomorrow, Friday, July 3.

WHAT HAPPENED: Gov. Roy Cooper signed into law a slew of bills the General Assembly sent him in wrapping up the current leg of state lawmaking, including measures affecting or of interest to cities and towns.  

WHAT IT MEANS: We've included breakdowns below, but system development fees, the Viable Utility Reserve, local states of emergency, transportation money, and package delivery robots are among topics. 

ON TAP: A small stack of legislation remains pending on the governor's desk as of this writing, including Implement Conner's Law, which we've covered in past Bulletins. Skeletal sessions of the legislature continue until a July 11 break, in place until a reconvening in September. General Assembly staff has also released a list of new laws with July 1 effective dates.

THE SKINNY: As is usual during session wrap-ups, a lot of bills came through and this Bulletin pulls together the latest action that cities and towns should know about. You should also know that your advocacy helped your community. Among bills the governor signed this week is one the legislature approved to guarantee municipalities receive a quarter of the $300 million set aside in CARES Act dollars for local governments. Approval of HB 1023 Coronavirus Relief Funds/Additions and Revisions came after legislators had previously sent $150 million of the $300 million to county governments with language that encouraged them share money with municipalities but did not require it. What the governor signed into law this week followed meetings between League representatives and legislative leaders.  

Yesterday, the governor approved legislation to create the Viable Utility Reserve fund -- a new grant program that would support financially distressed public water and wastewater systems by facilitating viable operations and encouraging regionalization. The governor’s approval comes after both chambers unanimously approved a conference report to HB 1087 Water/Wastewater Public Enterprise Reform, providing $9 million in non-recurring state funds.

The bill language regarding the fund was the result of a yearlong legislative study and stakeholder process that focused on the more than $17 billion in water and sewer infrastructure needs statewide and also includes a study of the feasibility of authorizing historical charters for units of local government. League Board President Jennifer Robinson had previously sent letters to both House and Senate sponsors thanking them for their support of the Viable Utility Reserve.

The final version of the bill included a variety of additional unrelated provisions, including reallocating some existing funds to specific local water and wastewater utility projects and addressing flood storage capacity. The League thanks Rep. Chuck McGrady and Sen. Paul Newton for their leadership during the legislative study committee and stakeholder process, and Governor Cooper for signing this important legislation in to law. We are hopeful for continued funding to help create viable utility operations.

Legislators approved changes to the laws governing local states of emergency last week, setting new requirements for local officials to follow before their emergency orders may become effective. Now signed into law by Gov. Roy Cooper, the new procedures will require a local government to post its emergency order on its website and submit a signed copy of the order to the N.C. Department of Public Safety's WebEOC portal. Failure to follow these steps, which must be taken along with existing requirements for publication of the order, would mean that the emergency order would not be effective. The procedures came in HB 593 JCPC/Detention/CAA and Other Fees at the request of the N.C. Retail Merchants Association, which expressed past frustration with not having a centralized database of local orders that affected its members' retail business operations.​

The point in time at which some water systems would collect system development fees moved under a bill signed into law by Gov. Roy Cooper on Tuesday. The new law, modifications to which were negotiated by the League after the N.C. Home Builders Association proposed the change, would apply in a tightly-defined set of circumstances. Specifically, the water systems affected by this change would be those that currently collect the fee at the time of plat recordation. Under the new law, which becomes effective January 1, 2021, that timing is pushed to a point later in the development process: either when an applicant applies for a building permit or when the water service was committed by the water system -- whichever point was later. The governor's signature also made law a clarification requested by the League to another part of the system development fee law. This clarification ensured that some water systems could utilize fee revenue to repay capital debt.

As their routine business came to a close last week, legislators continued a session-long trend of considering bills focused on the COVID-19 pandemic, including action on seven separate bills that would reopen various businesses despite emergency orders to the contrary by Gov. Roy Cooper and local officials. Of those seven bills, four now sit on the governor's desk. Most legislative observers expect him to veto all four, as he did an earlier, similar bill (and the fifth in our list) that failed a veto override vote in the House last Wednesday. Rounding out the list, legislators failed to see through final votes on the remaining two bills in this grouping.

At the same time, yet another proposal made necessary by the pandemic gave rise to a clash between House and Senate leaders late on the last night of session. This proposal concerned a Jim Crow-era law—temporarily suspended by a legislative action this spring—that made it illegal to wear a mask in public. The suspension of this law expires on August 1, 2020, and House Minority Leader Darren Jackson tried multiple times to extend that suspension through next February. House leaders agreed to that extension in the Fourth Edition of SB 782 Merchandise Sales Limit/Meck Dist Ct., only to ultimately remove it in final negotiations with the Senate. The back-and-forth generated media attention, but no solid promises were made by legislative leadership to revisit the issue before the law reverts back to criminalizing public mask-wearing at the beginning of August.

In contrast to the vehement disagreement between members of each party over these pandemic bills, other COVID-19 response bills found bipartisan support this week. One measure applicable to cities, other governmental units, and businesses alike would shield them from liability for any act or omission alleged to have resulted in a person contracting COVID-19, so long as those actions or omissions arose from negligence. 

​Lawmakers considered dozens of bills in the final days of this year's legislative session, in many cases sending finalized versions to Gov. Roy Cooper for his consideration. Read on for highlights of those actions that affected municipal interests.

  • Transportation funding: In the span of just one week, legislators introduced, and then passed on to the governor, a major NCDOT funding and policy reform bill that slashed spending in the current fiscal year while shoring up future transportation revenues. (Read details of the package in this prior Bulletin report.) Additionally, the House overwhelmingly approved a major transportation and education bond package, though the Senate took no substantive action on it.
  • Tax and finance updates: An omnibus tax and finance bill became law Tuesday with the governor's signature. Provisions of interest to cities included one removing minimum qualifications for online retailers, which will likely slightly increase online sales tax collections (Section 3.3); one implementing uniform meals tax language (Section 3.5); another extending special infrastructure assessment authority to July 1, 2025 (Section 7.2); and a final provision to extend the state's large JDIG economic incentive program through the end of the next decade, Jan. 1, 2030 (Section 7.4).
  • Extend temporary COVID-19 measures: This year's omnibus regulatory reform act, signed into law yesterday, included extensions of some temporary COVID-19 measures legislators authorized earlier this year. Of note for cities, they may continue to hire back recently retired employees through the end of August to assist in pandemic response. The law also extended the temporary authority for remote notarization until March 1, 2021. Finally, the bill contained dozens of other unrelated, and uncontroversial, provisions that failed to become law last year when the Governor vetoed that year's regulatory reform bill.
  • Sweepstakes machines: Legislators made a last-ditch effort last week to reform the state's sweepstakes machine laws, ultimately failing to advance the bill when a House committee deadlocked on the vote after several members who were participating remotely could not have their votes counted. Proponents of the bill said it would assist law enforcement in clamping down on large sweepstakes operations, while opponents claimed that same language opened the door for small numbers of machines to appear in convenience stores and bars across the state.
  • Package delivery robots: Legislators sent the governor a bill last Thursday that authorized the operation of package delivery robots like those used by FedEx and Amazon. Now signed into law, the bill, detailed more fully in this prior Bulletin report, received significant improvements for municipalities due to the League's involvement in the negotiations and the support of cities' goals by bill primary sponsor Sen. Jim Perry.
  • Deannexations: One local bill deannexed property from three municipalities and became law Thursday once the legislature cast its final vote on it. Of the three affected cities in this bill, the Town of Bolton opposed the legislature's action, while the cities of Dunn and Jacksonville supported the deannexations that applied to their jurisdictions.
  • Government employee concealed carry: Legislators signed off last week on a gun bill that, among other provisions, allowed two classes of government employees to carry a concealed handgun while working: employees of a law enforcement agency that were not sworn law enforcement officers, but who met certain conditions; and emergency medical services personnel who were providing tactical medical assistance to law enforcement in an emergency situation.
  • Emergency personnel death benefit funding: No legislator cast a dissenting vote in sending to the governor a bill last week that provided funding for a previously-approved death benefit given to beneficiaries of emergency personnel murdered in the line of duty.
  • Satellite broadband funding: Although legislators considered several measures this session to increase funding for the state's broadband grant program, they only approved one of them, which the governor signed into law yesterday. This $1 million appropriation would go to satellite broadband companies, subject to numerous conditions in a newly-conceived grant program for that purpose.

​A new federal toolkit is available to local leaders to better understand how they can plan effective strategies with their Opportunity Zone designations. It's the followup to a previous version of the Opportunity Zones Toolkit. “By aligning local, state and federal resources, establishing incentives, and building on new partnerships, communities in and around Opportunity Zones can attract the desired private capital investment they need to boost economic growth throughout their region," said a news release with details and updates.