Municipal Legislative Update Karl Knapp NC League of Municipalities NCGFOA Summer Conference

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.