2016 LEGISLATIVE WRAP-UP. Chris Nida NC League of Municipalities

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1 2016 LEGISLATIVE WRAP-UP Chris Nida NC League of Municipalities 1

2 Outline 2016 Overview What Passed? What Didn t Pass? League Updates Questions & Discussion 2

3 2016 Overview

4 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 4

5 2016 Overview House and Senate agreed to $ billion spending target for budgets House passed their budget May 19; Senate followed suit June 3 Negotiations continued until signs of agreement in final weekend of June 5

6 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 4

7 2016 What Passed?

8 Budget Agreement HB Appropriations Act (awaiting Governor s signature) Grows state spending by roughly 2.8% 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 8

9 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 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 9

10 Budget Agreement Provides $5.7 million in nonrecurring funds for downtown revitalization projects in 56 municipalities 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 10

11 Finance Officer Training HB 1035/S.L LGC/Training for Local Gov t Finance Officers Local Government Commission would be authorized to require local finance officers to take additional training in certain circumstances Intended to address some concerns with municipalities on LGC watch list 11

12 Utility Line Fee 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 12

13 Rental Registration SB 326 Local Gov ts/bldgs/structures/ Inspections. (awaiting Governor s signature) 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 13

14 Municipal Service Districts HB 1023/S.L Municipal Service Districts/Statutory Changes Requires municipalities to have hearing if property owner petitioned for removal from MSD Retains city council discretion in determining when properties are included in district or not 14

15 Municipal Elections 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 Study as to how to implement this intent is to be conducted before start of 2017 General Assembly session 15

16 HB 2 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 16

17 Land Use Changes 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 17

18 Body-Worn Cameras 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 Provides a framework for when a recording may be viewed or released and to whom, providing statutory guidance to law enforcement officials and courts 18

19 Coal Ash 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 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 19

20 2016 What Didn t Pass?

21 Sales Tax Changes 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 Elimination of state appropriation was in final budget agreement; adjustment factor changes were not 21

22 School Streets 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 Zoning changes for schools removed from bill; League worked with legislators on drafts of bill extensively Passed House, never considered by Senate 22

23 Sanctuary Cities 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 If determined that local government was not complying with state laws, cities could have lost Powell Bill funding and counties capital funding for schools 23

24 Constitutional Amendments 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% 24

25 Asheville City Council SB 897 Asheville City Council Districts Bill filed late in session by retiring Rules Chairman Sen. Tom Apodaca 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 25

26 Jacksonville Occupancy Tax SB 46 Jacksonville Occupancy Tax Top session priority of Majority Leader Sen. Harry Brown 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 26

27 Sunset Beach Deannexation SB 875 Town of Sunset Beach/Deannexation Local bill filed by Senate Finance Committee Co- Chairman Sen. Bill Rabon 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 27

28 I-77 Tolling 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 Passed House by vote Never considered by Senate 28

29 Special Assessments 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 Bill proponents worked with NCLM, NCACC & LGC to address concerns Never Considered by Senate 29

30 County Tier System 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 HB 1028/SB 844 Eliminate Use of Development Tiers Replaced current tier system with index developed by Dept. of Commerce 30

31 Iran Divestment 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 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 31

32 Retirement Systems 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 32

33 Regulatory Reforms 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 Ultimately, many provisions proved too controversial to reach any agreement 33

34 Regulatory Reforms 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 34

35 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 35

36 League Updates

37 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

38 Lobbying Updates Contract Lobbyists join NCLM Joint Municipal Caucus Formed

39 Grassroots Advocacy Exponential Growth in NCLM Grassroots Network Thank You! Grassroots Advocacy is key to NCLM lobbying efforts Join LeagueLINC at

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41 2016 Annual Conference Register here: 41

42 Municipal Equation Podcast Search for Municipal Equation on : SoundCloud.com/ MunicipalEquation TuneIn itunes

43 Questions?