2017 SUMMER ATTORNEYS CONFERENCE Legislative & Case Update. Amy Bason, Deputy Director & General Counsel Paige Worsham, Research Attorney
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1 2017 SUMMER ATTORNEYS CONFERENCE Legislative & Case Update Amy Bason, Deputy Director & General Counsel Paige Worsham, Research Attorney 1
2 2017 Legislative Session (Part 1) NCGA adjourned* 2017 Long Session early Friday morning, 6/30 2
3 NCACC Priority Legislative Goals PE-1: Seek legislation to establish a new statecounty partnership to address statewide public school capital challenges--including but not limited to maintenance, renovation, construction and debt-- through a dedicated, stable funding stream that is consistent from county to county and sufficient to meet the school facility needs of all 100 counties. PE-2: Seek legislation to repeal the statutory authority under G.S. 115C-431(c) that allows a local school board to file suit against a county board of commissioners over county appropriations for education. 3
4 NCACC Priority Legislative Goals TF-1: Support efforts to preserve and expand the existing local revenue base of counties, and oppose efforts to divert to the state fees or taxes currently allocated to the counties to the state. Oppose efforts to erode existing county revenue streams and authorize local option revenue sources already given to any other jurisdiction. GG-1: Support increased state funding for transportation construction and maintenance needs, and support legislation to ensure that the STI funding formula recognizes that one size does not fit all and that projects in both rural and urban areas are prioritized and funded. JPS-1: Support legislation and funding to raise the Age of Juvenile Jurisdiction from 16 to 18 with the exception of felony crimes. 4
5 Significant Legislation S.L (HB 119): Clarify County Commission Vacancy Elections Amends G.S. 153A-27, (Vacancies on board of commissioners) to clarify that the length of appointment to fill a vacancy during a four-year county commissioner term is determined by the date of the next general election in which county commissioners are elected, and not only a general election with all precincts open on election day S.L (HB 100): Restore Partisan Elections Makes elections for superior court and district court judges partisan, effective Jan. 1, Governor s veto overridden S.L (HB 142): HB 2 Changes Repeals HB 2 from 2016 special session. Preempts regulation of multiple occupancy bathrooms. Prohibits, until Dec. 1, 2020, a local government from regulating private employment practices or public accommodations. 5
6 Significant Legislation S.L (SB 68): State Board of Elections and Ethics Establishes Bipartisan State Board of Elections and Ethics Enforcement to consolidate functions of State Ethics Commission and State Board of Elections. Eight-member board with Governor appointing four members from each political party. Also increases county boards of elections from 3 to 4 members, split between 2 parties. Democrat chair in odd years and Republican chair in even years. Governor s veto overridden. S.L (HB 239): Reduce Court of Appeals Reduces size of the N.C. Court of Appeals from 15 to 12 judges. Allows an appeal of right to the N.C. Supreme Court from class action certification orders and termination of parental rights orders. Allows discretionary review when Supreme Court determines matter important to integrity of court system. Governor s veto overridden. 6
7 Significant Legislation S.L (SB 131): Regulatory Reforms Zoning Regulations (Section 2.4) Clarifies consistency statement governing board produces when approving or rejecting a zoning amendment. Effective Oct. 1, 2017 Subdivision Regulations (Section 2.5) Adds exemption from definition of subdivision for division of a tract when settling an estate Provides for expedited review for division of qualifying tract or parcel greater than five acres Effective July 1, 2017 Public Records (Section 2.9) Allows local government to comply with public records access law by posting public records online in a format that allows a person to view the public record. Effective July 1, 2017 Statute of Limitations for Land Use Violations (Section 2.15) Five years if violation known; or violation could be determined from public record Seven years if violation apparent from public right-of-way; in plain view from place public is invited Exception for conditions dangerous to public health or safety Effective Oct. 1,
8 Significant Legislation S.L (HB 630) Rylan s Law/ Family Child Protection and Accountability Act/ S.L (HB 229) Technical Corrections Creates working group facilitated by UNC School of Government to study regional supervision and collaboration among county or regional social services Consultant to create social services reform plan In , requires counties to enter into annual written agreement with NC DHHS for social services programs other than medical assistance. Agreement authorizes DHHS to withhold state and federal funds if the county fails to comply Provisions for corrective action plan and state can potentially assume administrative functions temporarily Effective Mar. 1, 2019, authorizes county boards to create regional social services departments to incorporate all or a portion of programs and services Requires county DSS to observe a parent or caretaker during at least 2 visits with juvenile in custody before returning custody to parent 8
9 Significant Legislation S.L (SB 155) Brunch Bill Adopt ordinance to allow alcohol sales beginning at 10am on Sundays HB 559 Sunday Hunting Removes some current restrictions on Sunday hunting Effective Oct. 1, 2017, adds requirement for voter referendum to ban Sunday hunting SB 55 School Bus Cameras Authorizes county to adopt an ordinance imposing a civil penalty for passing a stopped school bus. Install automated school bus safety camera to capture vehicles passing bus Violations deemed noncriminal and subject to civil penalty: $400 for 1 st offense; $750 for 2 nd ; $1,000 after 9
10 Significant Legislation HB 243 Strengthen Opioid Misuse Prevention Act Extends standing order for naloxone to allow prescriptions to governmental agencies, including local health departments Limits prescriptions for opioids to five-day initial supply or seven-day supply after surgery SB 338 Disaster Recovery Act Allocates $100 million in budget in disaster recovery funds based on criteria: $25 million to housing-related projects $30 million to Golden LEAF $20 million for debris removal and farm repairs $2.7 million to community colleges to offset enrollment impacts $22.3 million state match for federal assistance 10
11 Significant Legislation HB 436 System Development Fees Effective Oct. 1, 2017, establishes statewide authority for local governments to impose system development fees for water and sewer service Process for calculation and allowance for credits; requires local government to accept public comment for 45 days and conduct public hearing before adopting fee Clarifies three year statute of limitations applies to repayment of fees charged without authority S.L (HB 406): Orange County Impact Fees Repeals Orange County s local act authorizing impact fees 11
12 Significant Legislation HB 205 Electronic Publication of Legal Notices Effective Oct. 1, 2017, specifies requirements for electronic publication of legal notices on newspaper s website; charges for subsequent publication; and changes definition of newspaper with general circulation for purposes of legal ads Effective Oct. 1, 2017, authorizes electronic notice on local government website by any board in Guilford County or municipality in Guilford HB 26 Workers Compensation Clarifies workers compensation act in response to Wilkes case No presumption for medical treatment for injury or condition not identified on Form 60 or Form 63. The employee must prove that later injury or condition is causally related to compensable injury. 12
13 Significant Legislation HB 589 Renewable Energy Changes Moratorium on permits for wind energy facilities and expansions until Jan. 1, 2019 Exemptions for projects that received FAA clearance before May 1, 2013 or projects with completed application submitted before Jan. 1, 2017 S.L (SB 615) Farm Act of 2017 Provides that a building or structure used for agritourism is deemed a bona fide farm purpose if criteria met; excludes farm buildings meeting the definition from building rules Eliminates county authority to regulate swine farms 13
14 Significant Legislation HB 252 Building Code Regulatory Reform Makes amendments to several building inspection procedures for local governments Effective Dec. 1, 2017, requires inspection department to establish informal, internal review process Reporting to legislative committee S.L (HB 530) Condemnation of Unsafe Buildings Authorizes county inspectors to condemn nonresidential buildings or structures in a community development target area as unsafe Provides for removal or demolition procedures HB 310 Small-Cell Network Infrastructure Framework for municipal regulation of small wireless facilities 14
15 Significant Legislation HB 161 Divestment from Companies that Boycott Israel Similar to process for Iran Divestment Act Prevents local government from contracting with a restricted company (included on list as company engaged in a boycott of Israel; doesn t apply to ordinary business purpose decisions or actions with <$20 million per year impact) Any contract in violation is void; existing contracts as of Oct. 1, 2017 in violation allowed to expire Does not apply to contracts $1,000 or less S.L (SB 69) Finance Officer Training When Local Government Commission requires finance officer or other employee to complete training, the LGC must notify the employee and employer. Employer must submit proof of completion to LGC. 15
16 .Other HB 469 Self-Driving Cars Creates regulatory framework for fully autonomous vehicles NCACC designates a planner seat on Fully Autonomous Vehicle Committee S.L (SB 8) Stormwater Runoff at Airports Prohibits local governments from requiring stormwater control measures that promote standing water at airports HB 275 No Stormwater Fees on Taxiways or Runways Effective Jan. 1, 2018, prohibits a local government from imposing stormwater utility fees on military runways and taxiways Limited exemption for non-military airports HB 704 Study Dividing School Systems Joint legislative study committee to study LEA division 16
17 Legislature Adjourns Sort Of 17
18 Bills Still in Conference Committee HB 56 Amend Environmental Laws Repeal plastic bag ban Riparian buffer tax exclusion study HB 403 Behavioral Health and Medicaid Modifications LME/MCO changes concerning spending authority, salaries, and certain other functions Revisions to state Medicaid reform HB 770 Amend Environmental Laws, cont. SB 656 Electoral Freedom Act Changes qualifications to be recognized as political party Lowers number of signatures required for unaffiliated candidates to get on ballot 18
19 What Didn t Pass? SJR 36 Convention of the States State would apply to Congress to call an Article V Convention of the States for proposing amendments to U.S. Constitution SB 660, HB 795, SB 223 Economic Development Tier Changes Eliminate adjustment factors that automatically apply to some counties Revise tier factors; Allow agencies to use other criteria HB 581 Billboard Regulations SB 126 Change LOST Adjustment Factor Align Art. 40 sales tax distribution factors with tiers rather than current % adjustments 19
20 What Didn t Pass? HB 746 Concealed Carry Allow concealed carry without permit Constitutional Amendments Eminent Domain; Right to Work; Cap Tax Rate at 5.5%; Right to Hunt & Fish; Limit NCGA Leader Terms; Limit NCGA sessions; 4-Year NCGA Terms; Independent redistricting; Elect State Board of Ed HB 717 Judicial and Prosecutorial Redistricting Would redraw districts for district attorneys, superior court and district court judges HB 389 School Calendar Flexibility Pilot program would allow certain LEAs to experiment with alternative opening & closing dates 20
21 What Didn t Pass? SB 145 Immigration Compliance Would withhold taxes and other revenues from local governments that do not comply with state and federal immigration laws Local Option Sales Tax Flexibility Authorize counties to use quarter-cent sales tax for education purposes Body Art Regulation Changes HB 110 Transportation megaprojects SB 419 Rewrite of Planning Statutes 21
22 Budget Highlights Education: $100 million from lottery proceeds to the Public School Building Capital Fund $30 million in FY 2018 and $75 million in FY 2019 to new Needs-Based Public School Capital Fund (NCACC priority goal #1) Grants for Tier 1 and Tier 2 counties, with priority criteria For new construction only Matching requirement $1:$3 in Tier 1 counties with grant cap of $15 million; $1:$1 in Tier 2 counties with a grant cap of $10 million Counties that receive grants are ineligible for $ from $100M Fund for five years, increasing availability for other counties Creates legislative committee to study Fund, including obstacles to counties participation and other potential uses of funds, like lease agreements and publicprivate partnerships States intent to increase lottery money for capital needs to 40% of net revenue by
23 Budget Highlights Education: Continues to fund non-instructional support personnel from lottery revenue, and uses $43 million in lottery resources to fund LEA transportation needs in FY 2018 Allows State Board of Education to allot additional teachers in some isolated schools and allocates $500,000 for this purpose Creates one-year pilot program to provide transportation funds to charter schools through grants and transfers $2.5 million from DOT Creates Legislative Task Force on Education Finance Reform to study new allotment model Reinstates Teaching Fellows program for special education and STEM 23
24 Budget Highlights Health and Human Services: From Dorothea Dix funds, $2 million nonrecurring for child behavioral health crisis facilities and $17 million nonrecurring for inpatient behavioral health beds at 5 hospitals $350,000 to continue community paramedicine pilot program in 3 counties $3 million in FY18 and $6.1 million in FY19 combined with TANF block grants to reduce NC Pre-K waitlist $1 million for 21 new positions at various adult care facilities; $200,000 for staff background checks $161,439 in FY 2018 and $3,229,695 in FY 2019 to implement Family/Child Protection & Accountability Act (HB 630); also appropriates funds for child welfare improvement plan Temporarily funds $5 million each year for state-county special assistance; 50% match from counties and expires June 30, 2019 or when funds spent 24
25 Budget Highlights Health and Human Services: Corrective action plan processes for county DSS Medicaid eligibility accuracy Similar to the current process for Medicaid timeliness Would penalize counties by requiring repayment for inaccurate eligibility determinations Annual audit of all county DSS for compliance with eligibility processing standards Reduces funding for LME/MCOs by $86.9 million in total ($31.5 million recurring) in the first year and $90.6 million ($36 million recurring) in the second year Reinvestments in community services and reductions possibly offset Requires DHHS to review quarterly the eligibility of Medicaid recipients and report to county DSS, who must promptly review and take any necessary action. Allows DHHS to contract with vendors to monitor changes impacting eligibility Adjusts child care subsidy allocation formula and requires counties with higher demand and spending than their allocation to submit a plan to DHHS prior to receiving additional funds Additional state level resources for opioid and substance abuse management, including $250,000 to New Hanover County 25
26 Budget Highlights Justice & Public Safety: With the exception of certain felonies, raises the age of juvenile jurisdiction to 18, effective Dec. 1, 2019, and provides $519,600 in FY 2018 and $478,000 in FY 2019 to implement the change Cuts Dept. of Justice budget by $10 million recurring; specifies codes for reduction Directs PED to study allocation of attorneys in state government, including the AG s office and use of private counsel $200,000 to AOC to study efficiency in rural judicial districts $2 million recurring for new ADA positions Eliminates access to Civil Justice funds (Legal Aid) Defines State Highway Patrol as a PSAP for purposes of 911 grant eligibility 26
27 Budget Highlights Transportation: Increases funding to Strategic Transportation Infrastructure Program by $320 million by end of FY 2019 Eliminates funding for inmate Litter Crews and Road Squads Extends to 2018 the moratorium on new maps under the Map Act $1.5 million in FY 2018 and $2 million in FY 2019 to incentivize regional consolidation of public transportation systems 27
28 Budget Highlights Economic Development: Establishes NC Ready Sites Fund in Dept of Commerce and appropriates $2 million to assist local governments in tier one and two counties with development of infrastructure around industrial sites Extends JDIG sunset to 2021 and adds exemption from JDIG cap for transformative projects with private investment of at least $4 billion projected to create at least 5,000 jobs Funds various targeted economic development grants to help local governments with specific projects $15 million recurring in FY 2018 and $31 million recurring in FY 2019 for Film and Entertainment Grant Fund 28
29 Budget Highlights Environment: $5 million over both years ($805,707 recurring) for Clean Water Management Trust Fund Eliminates one position in each of DEQ s seven regional offices Study to evaluate transfer of well inspection and permitting from the DHHS to DEQ Directs study of solid waste disposal tax 29
30 Budget Highlights Finance: Effective Jan. 1, 2019, reduces personal income tax rate from 5.499% to 5.25% Effective Jan. 1, 2019, increases standard deduction Effective Jan. 1, 2018, converts existing child tax credit to a deduction Effective Jan. 1, 2019, lowers corporate income tax rate from 3% to 2.5% Allows sales tax refund for transformative projects under JDIG program 30
31 Other Budget Highlights Directs a legislative study on local government enterprise systems, particularly water and sewer systems, and requires consultation with NCACC and others during the study Cuts Governor s budget by $1 million recurring Requires legislative approval before state funds can pay for legal work by private counsel Designates both the General Assembly and the Governor as Defendants in any action filed against the State Requires joinder of the Speaker and President Pro Tempore in any civil action challenging statute or state constitution State employees hired after Jan not eligible for retiree health benefits 31
32 Cases of Note U.S. Supreme Court Cooper v. Harris, 197 L. Ed. 2d 837 (May 22, 2017) Holding: Race was predominant rationale for redistricting NC s 1 st and 12 th Congressional districts, and does not survive strict scrutiny analysis. 5-3 decision Upholds District Court s decision that racial considerations predominated 1 st and 12 th districts 32
33 Cases of Note U.S. Court of Appeals for the Fourth Circuit Lund v. Rowan County, No (July 14, 2017), On Rehearing En Banc In 10-5 decision, Fourth Circuit affirms district court and finds Rowan County s opening prayer practice unconstitutional District court, applying Town of Greece v. Galloway, 134 S. Ct (2014), found prayers unconstitutional in 2015; Panel of Fourth Circuit reversed in 2-1 decision Residents of Rowan County sued the County, alleging it violated the Establishment Clause of the U.S. Constitution by commissioners delivering sectarian legislative prayers and by coercing Plaintiffs to participate in religious exercises at the beginning of county commission meetings 33
34 Cases of Note N.C. Supreme Court Wilkes v. City of Greenville, No. 368PA15, (June 9, 2017) Supreme Court allowed PDR of unanimous Ct. of Appeals decision, which held that Industrial Commission should give Plaintiff the benefit of presumption that his anxiety and depression were related to his injuries, and that Plaintiff had met his burden of proof Plaintiff worked as landscaper for City when he was hit in a car accident while driving City-owned vehicle. Plaintiff treated for broken ribs, head abrasion, and injuries on neck, back, pelvis, and hip City filed Form 60, accepting claim as compensable and describing injuries on form. Plaintiff later filed a Form 33 and listed previously-treated injuries plus depression, anxiety, and tinnitus. Full Commission found Plaintiff entitled to compensation for tinnitus, not entitled to compensation for anxiety and depression Ct of Appeals vacated Commission decision and held that rebuttable Parsons presumption (additional medical treatment is directly related to compensable injury) applies to plaintiff s anxiety and depression; reversed opinion that terminated plaintiff s total disability benefits 34
35 Cases of Note N.C. Supreme Court Wilkes v. City of Greenville, No. 368PA15, (June 9, 2017) Unanimous Supreme Court: we conclude that an admission of compensability approved under N.C.G.S (b) entitles an employee to a presumption that additional medical treatment is causally related to his compensable injury. Changes definition of disability: In determining loss of wage-earning capacity, the North Carolina Commission must take into account age, education, and prior work experience as well as other preexisting and coexisting conditions. While the plaintiff bears the burden of proof to establish disability, once plaintiff has done so, the burden shifts to the defendant to show not only that suitable jobs are available, but also that the plaintiff is capable of getting one, taking into account both physical and vocational limitations. Remanded to Commission to apply rebuttable presumption and to determine effect of plaintiff s tinnitus on wage-earning ability 35
36 Cases of Note N.C. Court of Appeals Innovative 55, LLC v. Robeson County No. COA (June 6, 2017) In 2015, planning board recommended approval for solar company s conditional use permit to build solar panel in county. Commissioners held two hearings and heard testimony from a solar farm expert, a landscape architect, and an appraiser, as well as opponents of the solar farm. Commission denied solar company s conditional use permit application and superior court upheld decision. On appeal, Court of Appeals finds the solar company presented a prima facie case that it was entitled to the permit and the opponents did not present evidence to rebut that showing. Opponents to the solar farm testified to unsupported and highly speculative claims about their unsubstantiated fears of solar farms and their possible dangers. Opposing contentions included assertions that the solar panels contain poison, might be connected to dead birds in California, might produce harmful radiation, and might be hit by hurricanes or tornadoes. The opponents produced no expert testimony or other material and substantial evidence in support of their claims. 36
37 Cases of Note N.C. Court of Appeals Hildebran Heritage & Dev. Ass n v. Town of Hildebran, 798 S.E. 2d 761 (March 21, 2017) Disagreement over disposition of old school building (the Old Hildebran School); four town council members interested in demolition and one council member opposed (Councilman Hildebran). Motion to amend agenda was made and passed at meeting to add a vote on school building demolition. Plaintiff files complaint against Town and company awarded demolition contract alleging multiple violations of open meetings law. Trial court entered partial directed verdict for defendants Four alleged violations: (1) Town council discussed disposition of school building during closed session (2) Town council failed to provide public reasonable access to subsequent meeting (3) One council member had one-on-one discussions with some council members outside open meeting (4) Town council voted to amend agenda at meeting with no public notice of change Court of Appeals discovered at oral argument that old school had completely burned down at some point during the appeal, but no evidence of date of fire in record. Issue of whether demolition contract null and void is moot because performance of contract impossible COA affirms trial court -- a lack of overflow seating or speakers to hear proceedings is not unreasonable. Even assuming member tried to avoid open meetings law, the vote took place at an open meeting. Partial dissent: One-on-one meetings did violate the open meetings law 37
38 Cases of Note N.C. Court of Appeals Times-News v. Alamance-Burlington Bd. Of Educ., 797 S.E. 2d 375 (March 7, 2017) Newspaper requests minutes from closed sessions of School Board. Board produced 45 pages of heavily redacted closed session minutes. Newspaper sued to compel the Board produce minutes in unredacted form. Trial court granted motion to dismiss. On first appeal (2015), Ct. of Appeals reversed the trial court and remanded for in camera review of full minutes. Trial court found one previously redacted paragraph subject to disclosure. Newspaper appealed again. On second appeal, Ct. of Appeals affirmed trial court. Analysis focused on general account vs. minutes from closed session. We hold that where a public body has kept minutes which are sufficient to give someone not in attendance a reasonable understanding of what transpired, the public body has met its obligation to create a general account. General account (if created) is not subject to public inspection. Public records law does not require disclosure of minutes OR general account if that frustrates purpose of closed session. 38
39 Cases of Note N.C. Court of Appeals Henderson v. Charlotte-Mecklenburg Bd. Of Educ., No. COA (May 16, 2017) Plaintiff refereed basketball game at high school gym and was injured. Superior court grants school board s motion to dismiss. Court of Appeals affirms trial court. Defendant school board entitled to statutory immunity for contract with basketball club to lease school gym because school board followed its own rules and regulations when it entered into agreement. Rountree v. Chowan County, 796 S.E. 2d 827 (March 7, 2017) Summary judgment for county upheld in dispute over tax administrator serving as employee vs. contractor and keeping/losing retirement benefits Retired tax administrator took part-time position and learned two years later that employment terms made him ineligible to receive retirement benefits. Negligent misrepresentation claim. Summary judgment appropriate because plaintiff established no duty of care on county s part or, even with a duty, plaintiff could have determined consequences through investigation and inquiry. 39
40 Cases of Note N.C. Court of Appeals Meinck v. City of Gastonia, 798 S.E. 2d 417 (March 21, 2017) City leasing property to private party is proprietary, not governmental, purpose; city not immune from suit City leased commercial building to private nonprofit art studio. Plaintiff slipped and fell on steps at building while carrying pictures. Plaintiff alleged City negligently failed to maintain building conditions or provide warning. Trial court granted summary judgment for City on motion of governmental immunity. COA performs analysis for governmental vs. proprietary function. [W]hen an activity has not been designated as governmental or proprietary by the legislature, that activity is necessarily governmental in nature when it can only be provided by a governmental agency or instrumentality." Court determines lease provides financial advantage and immunity does not apply, reversing trial court. We view the private commercial nature of Defendant's agreement with the Art Guild to receive a 15% commission on all private art sold, Defendant's lease of the building solely to a private organization, and the Defendant's generation of substantial revenues from the lease, gift shop sales, and subtenants' rents, together as weighing heavily towards concluding Defendant's ownership and maintenance of the leased building to be a proprietary function. NC Supreme Court allowed PDR June 8,
41 Cases of Note N.C. Court of Appeals Providence Volunteer Fire Dep t v. Town of Weddington, No. COA16-80 (April 18, 2017) Volunteer fire department conveyed fire station to Town in exchange for Town s agreement to pay for repairs and improvements. Town agreed to lease the station back to the volunteer fire department. After repairing the station, the Town terminated agreement with volunteer fire department and leased station to a different fire department. Lawsuit filed for breach of contract, fraud, and unfair & deceptive trade practices; notice of lis pendens also filed. Town appeals trial court s denial of motion to dismiss fraud claim; grant of motion to amend complaint; and grant of motion for preliminary injunction. Ct. of Appeals finds appeal not interlocutory. Ct of Appeals affirms in part and reverses in part: trial court did not err in denying Town s motion to dismiss because Town was performing proprietary function through agreements with volunteer fire dept and not entitled to governmental immunity. Trial court did err in granting fire department s motion for preliminary injunction because the fire department filed a lis pendens, which provided for an adequate remedy at law. 41
42 Thank you! Amy Bason, NCACC Deputy Director & General Counsel (919) Paige Worsham, Research Attorney (919)
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