2015 SUMMER ATTORNEYS CONFERENCE Legislative Update
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1 2015 SUMMER ATTORNEYS CONFERENCE Legislative Update Amy Bason, Deputy Director & General Counsel Casandra Skinner Hoekstra, Legislative Counsel 7/25/15 1
2 NCACC Mission Our Association supports and promotes the well-being of all North Carolina counties through advocacy, education, research, and member services. 2
3 NCACC At a glance Dedicated to helping counties succeed Advocacy Education Center for County Research Risk Management Membership: All 100 NC counties Leadership: Board President, Macon County Commissioner Ronnie Beale & Executive Director, Kevin Leonard 3
4 Outline Legislative Update County Priorities/Goals Key Legislation Continuing Resolution State Budget Medicaid Reform Sales Tax Distribution Cases of Note Questions/Discussion 4
5 Where are we now? Session began in mid-january Committee assignments made Snow days in February Spring break week after Easter House passed its budget mid-late May Senate passed its budget mid-june Continuing Resolution early July Summer break week after 4 th of July Wrapping up committees? 5
6 NCACC Top 5 Priorities HH-1: Continued state funding of Medicaid PE-1: Restore 40% of lottery $ for school construction PE-4: Repeal school boards authority to sue boards of commissioners over education funding GG-1: Oppose shift of transportation responsibilities to counties. TF-1: Oppose unfunded mandates 7/8/2015 6
7 Bills addressing NCACC Goals H Fund Distribution Appeals, scope and board function H430 County Omnibus Legislation In House rules, includes study of nonprofit property exemption, PILOTs, noxious weeds, residential recycling programs and fees. H432 Counties/Internet Infrastructure H726 School Boards Can t Sue Counties S210 Notice Publication by Counties and Cities 7
8 Legislative - Builders Inventory H168 amended by Senate Passed Senate Commerce; In Senate Finance Senate added commercial property exemption back into bill -$50M to $60M loss to counties To Appropriations next 8
9 Legislative - Regulatory Reform Act of 2015 H765 amended by Senate Repeals electronic manufacturer's recycling requirements Still banned from landfills so Lowers age to drive an ATV to 6. Self-reported environmental violations may now be exempt from civil fines and held confidential. Passed Senate; House failed to concur Conferees appointed 7/22/15 9
10 Key Legislation S423/S.L Foster Care Family Act H255/S.L Building Code Regulatory Reform S284/S.L Infrastructure Assessments Extend Sunset H222/S.L Retention Elections State Supreme Court H154/S.L Local Govts in State Health Plan 7/8/
11 Key Legislation H836/S.L Election Modifications H640/S.L Outdoor Heritage Act H346/S.L Counties/ Public Trust Areas S682/S.L Modify Sunset Re: Contg Audits 7/8/
12 Key Legislation H512 - Amend/Clarify Back-Up PSAP Requirements H730 - County Provide 911 Dispatch Services H44 - Local Government Regulatory Reform 12
13 Key Legislation H100 - Record of Excusals from Jury Duty S513 - NC Farm Act of 2015 H Presidential Primary 13
14 Vetoed Bills H405 Property Protection Act Governor vetoed 5/29/2015 Overridden 6/3/2015 S2 Magistrates Recusal for Civil Ceremonies Governor vetoed 5/28/2015 Overridden 6/11/2015 7/8/
15 Legislative - Continuing Resolution Gov. McCrory signed into law June 30 Expires August 14 Continues funding for state operations at 100% of current levels Increases starting teacher salaries to $35,000 Fully funds ADM enrollment growth for public schools No additional money for driver's education 15
16 Legislative - State Budget Senate version passed mid-june, House version a few weeks prior Drastic differences Senate includes major policy changes (Medicaid, tax reform) Spends $700 million less than the House $100 million in lottery funds from both chambers 16
17 Legislative - State Budget House spends over $30 million on mental health; Senate spends less but does provide for some community psychiatric beds Both chambers increase autopsy fees Foster care changes in both chambers Raise age at which youth can leave the system 17
18 Legislative - Medicaid Reform (House) Both chambers adopt capitated plans; BUT House is pushing a separate bill with provider-led model coordinating physical and mental health care keeps administration in DHHS retains Community Care of NC phases new plan over five years 18
19 Legislative - Medicaid Reform (Senate) Within the budget, Senate creates a new health benefits board outside of DHHS to administer program; appointed by Governor and legislature ends CCNC contract changes system to managed care model all with a 2-year transition schedule 19
20 Sales Tax Expands the State and Local sales tax base to include: - Repair and maintenance of tangible personal property - Grooming, training, boarding related to animal care, veterinary services - Advertising services* - Effective October 1,
21 Sales Tax Phases down the amount of sales for which a nonprofit can get a refund. From $666.7 million in 2015 to $15.0 million in Impacts nonprofit hospitals, colleges and universities, church construction, and some other nonprofits. 21
22 Sales Tax - Shifts the distribution of existing Articles 39, 40 and Removes the adjustment factor currently used in the distribution of the Article 40 ½ cent. - Continues the city hold harmless - Effective July 1,
23 Sales Tax Creates a New Article 43A (County Sales and Use Tax for Public Education) Requires a positive public referendum Limits the number of sales tax questions on the ballot to one at a time The maximum rate under this Article is ½ cent The rate can only be raised in ¼ cent increments The total local rate cannot exceed 2 ½ cents This is a county only tax 23
24 Sales Tax Sets in place the same rate limitations as above (2.5%, except 2.75% for Orange and Durham) for ALL local sales taxes. Authority to increase existing 43 and 46 to ½ cent, as long as the 2.5% provision is met Like above, all changes must be in ¼ cent increments. The net effect is that counties can include: ½ cent for any public purpose, transit, or education OR ¼ cent for one purpose and ¼ cent for another purpose. The net impact is a significant shift of local sales tax revenues over time. 7/8/
25 Union County Education Funding Lawsuit Dismissed NCACC filed an amicus brief on behalf of Union County Board of Commissioners NC Court of Appeals overturned $91 million jury verdict Court found jury should not have heard evidence outside of budget request Dismissal marks an end to the lawsuit filed in 2013 Issue could resurface in other counties this year. 7/8/
26 Property Tax Cases Corning Cabarrus County PTC County erred assessing as special purpose property PTC County should have shown loss in value econ/functional obsolescence PTC- Appraise at $30M not $152M County Appealed Statewide? Lowes/Big Box stores 26
27 Questions? 27
28 Amy Bason, NCACC Deputy Director & General Counsel (919) Casandra Skinner Hoekstra, NCACC Legislative Counsel (919) Thank you! 28
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