Municipal Legislative Update Karl Knapp NC League of Municipalities NCGFOA Summer Conference July 17, 2012

1. Municipal Legislative Update Karl Knapp NC League of Municipalities NCGFOA Summer Conference July 17, 2012

2. Agenda • Annexation and Municipal Authority • What Didn’t Happen • State Budget • Local Government Finance • Taxes and Revenues • Retirement • Environment • Transportation • Law Enforcement • Other

3. Annexation • Lawsuit • Election Rather Than Petition • Deannexations • Davidson Cross-County Prohibition

4. Municipal Authority • Metropolitan Sewer District Amendments • Asheville Airport and Western NC Agricultural Center

5. What Didn’t Happen • Transitional Hold Harmless Extension • Sweepstakes Tax Changes • Water Rate Restrictions • Water and Sewer Extension Requirements • Guns in Parks • Building Design Controls • ETJ Restrictions

6. State Budget • Gas Tax Cap – FY 13-14 Powell Bill Reduction • Rural Center Infrastructure Program Cut • Clean Water Management Trust Fund Cut • Interest on DOT utility relocation projects cut from 8% to prime plus 1%. • MPO and RPO members subject to State Ethics Act

7. Local Government Finance • Contingency Fee Contracts • Prohibited 7/1/2013 – 6/30/2015 for contracts to determine tax liability. Flat fee only. • Does not affect contracts purely for reallocation of sales of utility franchise tax • If discovery is allowed under a reallocation contract, it must be compensated on a flat fee basis • Does not affect contracts that only involve collection of taxes • Efforts to get around these restrictions could easily result in more severe restrictions being adopted in 2013.

8. Local Government Finance • Public Finance/Municipal Service District Changes • ABC Board Finance Officer Clarification • Accountability for Nonprofits

9. Taxes and Revenues • Taxation of Homeowners Association Property • Study possible municipal sales tax and taxation of leasehold interests in exempt property • Extend various sales tax refunds • Eastern Municipal Power Agency Rates Revenue

10. Retirement • Fraud Squad and Whistleblowers • Trustees Decide on COLA • No Public Retirement for Felons • Expand Firefighter/Rescue Squad Disability • Sick Leave

11. Environment • Fracking • Legalizes the practice and creates process for establishing rules • Does not preempt local authority in law, but restrictions could come in rules • Establishes a Mining and Energy Commission to oversee all natural gas extraction regulations, with a seat designated for a municipal elected official • The League will participate in several stakeholder groups that will craft rulemaking proposals and legislative recommendations

12. Environment • Two year delay of the Jordan Lake Rules’ requirement • for cities to adopt a new development ordinance • Easing of stormwater requirements for airports • No treatment required for compost runoff. • No emissions inspections for newer vehicles • Alternate fuels infrastructure

13. Transportation • Reform of DOT project planning and contracting • RPO definition expanded

14. Law Enforcement • Emergency Management Changes • Street Gang Nuisance Abatement • PSAPs • Law Enforcement Vehicle Length

15. Other • Building Code Inspectors to Track Mechanic Liens • Lithium Batteries in Rental Properties • Metal Theft Prevention • Urban Research Service Districts • Industrial Development Fund • Information on Minors Not Public Record

16. Possible Key Issues 2013 Long Session • Tax Reform • Transportation Reform • Land Use/Rights of the Landowner • Local Government Retirement • Gun Control/Parks • Internet Sweepstakes Cafes

17. Questions? kknapp@nclm.org

18. Thank you.