Against the backdrop of budget negotiations, committee work by the House and Senate picked up this week, as it appears the General Assembly is intent on winding down its action on policy bills. Among other items of interest to counties, the House commenced its consideration of the Farm Act, a compromise to long-standing land use and development discussions emerged, and legislation establishing a process for state assistance to distressed public water and wastewater infrastructure systems received its first committee vote this week.
NCACC expects a busy week next week with the compromise budget likely to emerge ahead of the end of the fiscal year, and a plethora of committee work on a vast array of legislation as the General Assembly concludes work on policy bills.
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Budget Negotiations Begin in Earnest This Week
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Legislative leaders continued their closed door negotiations on a compromise 2019-2021 budget this week with the goal of having a new spending plan in place by the start of the new fiscal year on July 1, 2019. With that goal in mind, NCACC expects the compromise budget proposal to emerge next week and gain General Assembly approval before the end of the current fiscal year.
Once the General Assembly approves its compromise budget, the proposal will go to the Governor for approval. A veto by the Governor would set the stage for yet another round of budget negotiations if the General Assembly cannot override the veto by a three-fifths majority. If a new spending plan is not in place by the start of the fiscal year, under state law enacted in 2016 a continuation budget will automatically be in place and take effect.
While there are many differences between the House and Senate budgets, the following are items in play that most affect counties. We ask that you contact your legislators, especially the chairs of the House Appropriations and Senate Appropriations committees, and ask them to include the following provisions in the compromise budget:
- Address K-12 school and community college capital needs either through a statewide bond as proposed by the House or other means such as allocating school capital funds from the State Capital and Infrastructure Fund (SCIF) as proposed by the Senate;
- Any proposal to increase investments for public school facilities should also specify funding amounts for each county to allow for proper project planning, and ensure counties have a role in determining project prioritization and funding decisions in partnership with the local school district;
- Maintain $100 million appropriation from lottery revenue to Public School Building Capital Fund while maximizing appropriation amount to the Needs-Based Public School Capital Fund;
- Retain Section 7.48 – REPEAL RIGHT OF ACTION/CAPITAL OUTLAY FUND of Senate budget eliminating ability for school boards to sue counties over local capital appropriations;
- Funding to expand broadband access to unserved areas of the state;
- Provide sufficient funding from the Medicaid Transformation Fund to help implement Medicaid managed care;
- Retain Viable Utility Reserve Fund to provide grants to distressed water infrastructure entities for assessments and inventories, merger or regionalization studies, or infrastructure projects; and
- Limit cuts to the Film and Entertainment Grant fund.
NCACC’s full analysis of the House budget can be found here and the analysis of the Senate budget here.
For more information on the state budget, please contact NCACC Legislative Counsel Adam Pridemore or NCACC Government Relations Coordinator Amber Harris.
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Wastewater Reform Legislation Gains Senate Committee Approval
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This week, the Senate Committee on Pensions, Retiring and Aging approved legislation enacting water and wastewater public enterprise reform and assisting distressed public water and wastewater infrastructure systems. Details on House Bill 777, Various Retirement Changes/Wastewater Reform, can be found in last week’s Brief. The bill could be up for a vote on the Senate floor early next week.
House Bill 777 Various Retirement Chngs/Wastewater Reform (found in Section 25) requires the State Water Infrastructure Authority, in conjunction with the Local Government Commission, to develop criteria to determine how to assess distressed units of local government, as defined by the bill. Once identified as a distressed unit, the legislation directs local governments to conduct an asset assessment and rate study, participate in a training and education program, and develop an action plan that must include particular provisions as established by the bill.
In an effort to assist distressed public water and wastewater infrastructure systems, the bill establishes the Viable Utility Reserve, which may award grants. Permissive use of the grants are as follows:
- Provide physical interconnection and extension of public water or wastewater infrastructure to provide regional service;
- Rehabilitate existing public water or wastewater infrastructure;
- Decentralize an existing public water system or wastewater system into smaller viable parts;
- Fund a study of rates, asset inventory and assessment, or merger and regionalization options;
- Fund other options deemed feasible, which results in local government units generating sufficient revenues to adequately fund management and operations, personnel, appropriate levels of maintenance, and reinvestment that facilitate the provision of reliable water or wastewater services.
The legislation goes on to do the following:
- Establish a process by which a public water or public wastewater system established under Chapter 162A of the General Statutes could merge, or be dissolved, as initiated by the public water or public wastewater system;
- Authorize interlocal agreements between local government units operating a public water system or public wastewater system;
- Require the Department of Environmental Quality to study sub-basin transfers and make recommendations as to whether the statutes, or rules, should be amended.
Related wastewater reform provisions were included in, and passed as part of, the Senate budget earlier this session. Unlike the budget, the PCS to HB 777 does not appropriate any funding to implement the policy the bill establishes. Any funding would come as part of the final budget voted upon later this summer.
For more information on the wastewater reform, please contact NCACC Legislative Counsel Adam Pridemore.
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2019 Farm Bill Passes the Senate, Gets First House Hearing
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Senate Bill 315 North Carolina Farm Act of 2019 passed the Senate Monday evening. A motion to vote separately on controversial provisions in the bill failed. The bill received its first hearing in the House Agriculture Committee but no vote was taken. NCACC spoke in opposition to Section 20 of the bill, which expands the definition of agritourism and pre-empts county zoning authority related to property used for hunting, fishing, shooting sports and equestrian activities. S315 must next move through the House Finance, House Judiciary, and House Rules committees before being heard on the floor.
For more information on agricultural issues, contact NCACC Government Relations Coordinator Amber Harris.
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Land-Use Regulatory Reform Bill Gains Committee Approval
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Legislation making various changes to the land-use regulatory laws of North Carolina gained approval in the House Regulatory Reform committee this week. The committee considered a proposed committee substitute (PCS) to Senate Bill 355 Land-Use Regulatory Changes, which was the result of stakeholder meetings to address concerns from local government advocates and homebuilders. NCACC and county staff attended the stakeholder meeting, which ultimately led to the compromise language in the PCS.
Previous versions of S355 included provisions that would potentially promote land-use litigation and circumvent a county’s ability to make development decisions. This has been a long-standing issue between local governments and homebuilders. The House will likely consider the bill next week.
NCACC thanks county staff for their insights and assistance on this legislation.
For more information on the land-use regulatory reform, please contact NCACC Legislative Counsel Adam Pridemore.
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Legislation Addressing County Goals Still in Play
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As the session winds down, legislation addressing several of the Association’s priority legislative goals remains in committee or otherwise awaits action. The following bills are related to NCACC legislative goals or forward county interests and remain eligible for hearing this session. Please contact your legislators to express your support for these important proposals.
H667 Local Option Sales Tax Flexibility: authorizes counties to levy, subject to voter approval, an additional local option sales and use tax at either a ¼ or ½ cent, in quarter-cent increments and within current sales tax caps for each county. The bill also allows counties to specify the purpose for revenues from the tax on the ballot, designating the funds for either public education or any public purpose. This legislation has passed the House and been referred to Senate Rules, and would address a priority NCACC legislative goal.
H19 Certain DRE Equipment: delays the decertification of voting machines that do not use paper ballots until Dec. 1, 2020, provided the county gets permission from the State Board of Elections. H19 has passed the House and has been sent to the Senate, and addresses an important issue that many counties and election boards are facing.
H79 Academic Alignment/Boards of Education & CC: allows local boards of education to align school calendars with the start of the local community college. The bill passed the House earlier in session and now sits in the Senate Rules committee.
H431 Fiber NC Act: allows local governments in under/unserved areas to build broadband infrastructure and lease that equipment to service providers. H431 did not have to meet the March crossover deadline. It has been referred to House State and Local Government and is awaiting a hearing.
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Other Provisions Affecting Counties in a Variety of Bills
Here is a list of other provisions appearing in various bills and impacting counties that received hearings or votes this week:
- House Bill 557, Municipal Omnibus Bill, cleared the House Finance committee this week. Of interest to counties, Section 2 in the bill would require boards of county commissioners to provide written notice to municipalities in the county by February 15th, if the board changes the method of distribution for dividing local sales and use taxes between a county and its municipalities. Boards are currently required to adopt a resolution to change the method of distribution by April.
- The full Senate on Thursday unanimously passed Senate Bill 523, Revenue Laws: Clarifying and Administrative Changes, which includes a provision previously included in the Brief, prohibiting counties from holding more than one local quarter-cent sales tax referendum within one year. The bill now moves to the House.
- Senate Bill 313, Performance Guarantees to Streamline Affordable Housing, was approved by the House Regulatory Reform committee this week. The bill would make modifications to the performance guarantees local governments are authorized to include in subdivision ordinances, including terms of duration, extension, release, amount and timing. S313 next moves to the House Rules committee.
- The Senate held its first hearings this week on House Bill 268, Disapprove Certain On-site Wastewater Rules, which passed the House earlier in session and was included in the Brief. As the title indicates, the bill disapproves certain wastewater treatment rules adopted by the N.C. Commission for Public Health, and creates a new task force to rewrite the rules.
- House Bill 761, Clarify Wastewater Permitting Liability, cleared the House last month and received its first hearing in a Senate committee this week. The bill, explained in a previous Brief, limits county health department liability for septic system failures related to evaluations conducted by private, licensed soil scientists. The bill will next be heard in the Senate Rules committee before moving to the Senate floor for a vote.
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