2016 LEGISLATIVE

WRAP-UP

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Chris Nida NC League of Municipalities

Outline

• 2016 Overview

• What Passed?

• What Didn’t Pass?

• League Updates

• Questions & Discussion

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2016 Overview

• Session convened April 25

• Budget agreement announced in late June

• Chambers adjourned late in evening of July 1,

earlier than in most recent two years

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2016 Overview

• House and Senate agreed to $22.225 billion

spending target for budgets

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• House passed their

budget May 19; Senate

followed suit June 3

• Negotiations continued

until signs of agreement

in final weekend of June

2016 Overview

• Final days of session marked by sometimes

public disagreements between the two

chambers

• Senate adjourned while House was still

considering bills on its floor

• With Senate having adjourned, House soon

followed suit; a number of bills did not receive

final approval by both chambers

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2016 Overview

2016 – What Passed?

• HB 1030 2016 Appropriations Act (awaiting Governor’s signature)

• Grows state spending by roughly 2.8%

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• Provides teachers and

state employees with a mix

of salary increases and

one-time bonuses

• Provides an income tax cut

through expansion of the

zero bracket for income

tax

Budget Agreement

• Eliminates $17.6 million appropriation of state funds to local sales tax

collections, as agreed to as part of 2015 sales tax reallocation

compromise

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• Eliminates light rail cap but

proposes additional

restrictions on state

funding for light rail

projects

• Clarifies 2015 sales tax

base changes, which

would increase local sales

tax revenues

Budget Agreement

• Provides $5.7 million in nonrecurring funds for downtown

revitalization projects in 56 municipalities

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• Maintains total Powell Bill

funding at $147.5 million

• Provides $33.8 million in

nonrecurring funds for

State water and

wastewater infrastructure

grants, and an additional

$8.6 million in nonrecurring

funds for Clean Water

Management Trust Fund

Budget Agreement

• Local Government

Commission would be

authorized to require

local finance officers to

take additional training

in certain

circumstances

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Finance Officer Training

• Intended to address some

concerns with municipalities on

LGC “watch list”

HB 1035/S.L. 2016-84 LGC/Training for Local Gov’t Finance Officers

SB 481 Fund Small Businesses/DOR

Rulings/City Rt of Way

– Provision prohibits cities from charging utility

companies fees associated with permits & inspections

of work in public right-of-way

– League worked with bill sponsors to delay

implementation until July 1, 2017, at rates effective as

of June 1, 2016

– Utility companies argue distributions of utility-related

sales taxes should cover cost of managing right-of-way

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Utility Line Fee

SB 326 Local Gov’ts/Bldgs/Structures/

Inspections. (awaiting Governor’s signature)

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Rental Registration

• Similar to previous years’

legislation restricting local

governments’ ability to

conduct rental registration

programs

• Passed nearly unanimously

after amendments

requested by cities

incorporated into the bill

• Retains city council discretion in determining

when properties are included in district or not

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HB 1023/S.L. 2016-8

Municipal Service

Districts/Statutory Changes

• Requires municipalities to

have hearing if property

owner petitioned for removal

from MSD

Municipal Service Districts

SB 667 Elections Omnibus Revisions (awaiting

Governor’s signature)

– Declares that intent of General Assembly is for all

municipal elections to be held in even-numbered years

beginning in 2020

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Municipal Elections

– Study as to how to

implement this intent is to

be conducted before start

of 2017 General Assembly

session

HB 169 Restore State Claim for Wrongful

Discharge (awaiting Governor’s signature)

– Restores right to sue for wrongful termination in state

court that was eliminated in HB 2

– Rumors, discussion of larger compromise related to

repeal of HB 2 provisions; legislation beyond HB 169

never filed or heard

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HB 2

HB 483 Land-Use Regulatory Changes (awaiting

Governor’s signature)

• Creates statutory vested rights for multi-phase

developments, for a period of seven years

• Final version of HB 483 a much scaled back version of

earlier version of bill, which included several proposals

more objectionable to municipalities

• League, members, private land use litigators worked

extensively with legislators to remove those provisions

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Land Use Changes

HB 972 Law Enforcement Recordings/No Public Record

(awaiting Governor’s signature)

• Resulted from interim study committee

• Does not mandate use of body-worn cameras

• Clarified that police recordings are not public records or

personnel records

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Body-Worn Cameras

• Provides a framework for when a

recording may be viewed or

released and to whom, providing

statutory guidance to law

enforcement officials and courts

HB 630 Drinking Water Protect'n/Coal Ash Cleanup Act –

(awaiting Governor’s signature)

• Second coal ash bill that passed; was a compromise

reached after Governor McCrory vetoed SB 71

• Both bills required Duke to provide a permanent alternative

water supply to homes near coal ash ponds

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Coal Ash

• The League negotiated changes to

SB 71 to allow for a water system

to evaluate its ability to provide

water

• HB 630 included language to take

into account a system’s resources

2016 – What Didn’t Pass?

SB 846 Change the LOST Adjustment Factor

• Eliminated county-specific adjustment factors in

local sales tax and eliminates annual state

appropriation of $17.6 million to local sales taxes

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• Elimination of state

appropriation was in

final budget

agreement; adjustment

factor changes were

not

Sales Tax Changes

SB 778 Performance Guarantees/Subdivision Streets

• Restricted traffic improvements municipalities can require of new schools, and required NCDOT to reimburse schools for cost of improvements

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• Zoning changes for

schools removed from bill;

League worked with

legislators on drafts of bill

extensively

• Passed House, never

considered by Senate

School Streets

SB 868/HB 100 Local Government Immigration Compliance

• Established process for attorney

general to investigate complaints

of alleged noncompliance with

state immigration laws, including

E-Verify

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• If determined that local government was not complying with state laws, cities could have lost Powell Bill funding and counties capital funding for schools

Sanctuary Cities

HB 3 Omnibus Constitutional Amendments • Proposed three separate constitutional amendments for

the November 2016 ballot

• One proposed amendment

would change eminent domain

language and allow it only in

event of “public use;” another

would cap state income tax rate

at 5.5%

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Constitutional Amendments

SB 897 Asheville City Council Districts

• Bill filed late in session by retiring Rules Chairman Sen. Tom Apodaca

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Asheville City Council

• Proposed changing the method of election for Asheville City Council to district-based system

• House opted not to pass bill after impassioned speeches on final day of House session

SB 46 Jacksonville Occupancy Tax

• Top session priority of Majority Leader Sen. Harry Brown

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Jacksonville Occupancy Tax

• Would have allowed City of Jacksonville to spend greater percentage of occupancy tax on capital project

• House Finance rejected over lengthy discussion of occupancy tax purpose, uses

SB 875 Town of Sunset Beach/Deannexation

• Local bill filed by Senate Finance Committee Co-Chairman Sen. Bill Rabon

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Sunset Beach Deannexation

• Would have deannexed several parcels of property from Town of Sunset Beach, against wishes of Town

• House Finance Committee declined to vote on bill after members indicated they would not support

HB 954 Terminate Agreement for Tolling of I-77

• Terminated contract for tolling of I-77 and

redirected funds from specific projects to pay off

any costs associated with termination

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• Passed House by 81-

27 vote

• Never considered by

Senate

I-77 Tolling

SB 363 Wage & Hour/Local Gov’t Assessments

• Amended existing special assessment for infrastructure

authority to allow developers to pay cost of infrastructure

up front and allow local governments to use assessment

to repay developers

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• Bill proponents

worked with NCLM,

NCACC & LGC to

address concerns

• Never Considered by

Senate

Special Assessments

HB 1029/SB 810 Economic Development Changes & Study

• Created 11-member workgroup to review research and recommend revisions to current method for evaluating a community’s economic distress

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HB 1028/SB 844 Eliminate

Use of Development Tiers • Replaced current tier system

with index developed by Dept.

of Commerce

County Tier System

SB 821 GSC Tech. Corrections 1

• Contained language that would have transferred the certification

requirement to the local government; and

• Would not require a new certification within 180 days for

contracts/purchases with entity already certified

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• 2015 law prohibited cities from doing

business with any entity on Treasurer’s

list of businesses with $20M invested

in Iran

• Requires cities to have contractor

certify they are not on that list for every

contract/ purchase over $1,000

Iran Divestment

HB 1134 Admin Changes Retirement

System/Treasurer

SB 887 Admin Changes Retirement

System/Treasurer

• Both would have changed the retirement

eligibility for new hires (after January 1,

2017) from service-based to age- based

(to retire without reduced benefits)

• Based on federal requirements that

defines “normal retirement age” as 50

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Retirement Systems

• At the end of June, the House and Senate appointed one

group of conferees to try to reach agreement on

provisions of one large reform package

• Included in those negotiations were provisions from: – SB 303 Regulatory Reform Act of 2016

– HB 169 Regulatory Reduction Act of 2016

– HB 593 Amend Environmental Laws

– H 763 Military Operations Protection Act of 2016

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Regulatory Reforms

• Ultimately, many provisions

proved too controversial to

reach any agreement

• SB 303 Regulatory Reform Act of 2016 – House’s version of regulatory reform

– Included:

• Many land-use reforms related to:

Rezonings

Subdivision changes

Land use violations/statute of limitations

• Buffer-related study

• Public records: can fulfill requests exclusively with information

published online

– The League worked with House members, resulting in some

changes to address concerns regarding the land-use reforms

– Passed House on June 16, Senate did not concur with proposal

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Regulatory Reforms

• HB 169 Regulatory Reduction Act of 2016 – Passed Senate June 13; House did not concur with proposal

– Originally provided cumulative financial impact ceilings on what

rules can be adopted by the APA

– Repealed landfill bans on electronics and the requirements to

recycle

– Later converted to HB 2-related bill

• HB 593 Amend Environmental Laws – Passed Senate on June 23; House did not concur with proposal

– Exempted additional surfaces of landscaping material from the

definition of BUA in the implementation of stormwater programs

– Included solid waste amendments related to franchise

agreements, and a study of landfill capacity and solid waste

disposal efficiency

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Regulatory Reforms

League Updates

Staffing Updates

• New Government & Public Affairs Division – Rose Vaughn Williams, Associate Director of Government

and Public Affairs

– Communications Team • Scott Mooneyham, Director of Public Affairs

• Ben Brown, Advocacy Communications Associate

• Kristin Milam, Creative Services Associate

– Grassroots Team • Vickie Miller, Grassroots Coordinator

• Will Brooks, Grassroots Initiative & Civic Engagement Associate

• Risk Management Services – Bob Haynes Retiring effective October 31, 2016

Lobbying Updates

• Contract

Lobbyists join

NCLM

• Joint Municipal

Caucus

Formed

Grassroots Advocacy

• Exponential Growth in

NCLM Grassroots

Network – Thank You!

• Grassroots Advocacy

is key to NCLM

lobbying efforts

• Join LeagueLINC at

www.nclm.org.

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2016 Annual Conference

Register here: http://www.nclm.org/meetings-training/Pages/Annual-Conference.aspx

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