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  • The Tax Foreclosure Decision

    Authored by: on Thursday, May 28th, 2015

    Tax collectors are obligated to “use all lawful means” to collect their local governments’ property taxes. G.S. 105-350(1).  This provision implicitly obligates local governments to use the foreclosure remedy when available and necessary.

    Despite this legal obligation some local governments remain hesitant to use foreclosure. They might be worried about the administrative and financial aspects of the process or about the negative publicity that might arise if they wind up evicting residents from their homes.

    Those concerns are understandable but outweighed by the harm caused by the government’s refusal to use what might the only effective remedy to collect certain taxes.  The property tax system becomes less equitable when some taxpayers are permitted to ignore their tax obligations with no negative consequences.  Collection rates and public confidence in the tax system are sure to drop as a result.

    Taken together, the statutory guidance and the public policy interests lead to only one reasonable conclusion: local governments should at least consider the use of foreclosure on every property subject to a tax lien when other collection remedies fail.  That said, there are a few legitimate reasons—most of them financial—why a local government might choose not to foreclose on a particular property.

    Here are a few questions for tax officials and their governing boards to ask as they consider moving forward with a foreclosure. Read more »

  • Keeping the Public Informed about Communicable Diseases

    Authored by: on Tuesday, May 26th, 2015

    The last year has been a very active one for North Carolina public health workers who deal with communicable disease. The 2014-15 flu season was a bad one, with a total of 218 deaths reported by the time the season began to wind down in the spring. A majority of North Carolina counties had at least one pertussis (whooping cough) case in 2014, and the state’s total number of cases for the year was quite high at 782. The largest Ebola epidemic in history was well underway by last summer, and in the fall four cases were diagnosed in the United States. A large outbreak of measles associated with theme parks in California did not reach North Carolina but caused over 100 cases in seven states, and spread to Mexico and Canada as well.

    Perhaps you read news stories about these or other communicable diseases. Perhaps you even wondered how information about particular cases or outbreaks could be made public. I’ve had quite a few questions along those lines in recent months—questions about when information may be released, when it may not, how much information can be made public, and why information is released in some cases but not others. Read more »

  • The Affordable Care Act’s Employer Mandate: Will the U.S. Supreme Court Kill It?

    Authored by: on Wednesday, May 20th, 2015

    Under the Affordable Care Act, employers above a certain size are required to offer health insurance coverage to their employee or pay a substantial penalty. This requirement is commonly known as the “employer mandate.” King v. Burwell, a case pending in the United State Supreme Court right now, does not directly involve the employer mandate, but it nonetheless has the capacity to kill it in North Carolina and thirty-three other states. If the Court, in King v. Burwell, finds that the ACA authorizes the federal government to subsidize the purchase of health insurance only on state-run exchanges, and not on federally-run exchanges, the employer mandate will be unenforceable in the 34 states with federally-run exchanges. Read more »

  • Subdivision Performance Guarantees: A Little More Clarity

    Authored by: on Tuesday, May 19th, 2015

    In North Carolina, a developer can get final plat approval before he completes the required infrastructure—but only if the developer provides financial assurance to guarantee the infrastructure completion. North Carolina’s General Statutes allow cities and counties to permit these performance guarantees in conjunction with subdivision approvals.

    Two fairly recent cases provide some additional clarity about the scope and enforcement of performance guarantees. The key issues from these cases include:

    • Courts generally will enforce the terms of the performance guarantee and financial instruments.
    • The benefits of a performance bond may be assigned from a county to a municipality.
    • For enforcement, local governments may not be time-barred by the standard statute of limitations.

    This blog will consider each of these topics as they are addressed in Developers Surety & Indemnity Co. v. City of Durham and The Town of Black Mountain v Lexon Insurance Company.

    Read more »

  • Speeding: Local Ordinance Violation or State Law Infraction?

    Authored by: on Tuesday, May 19th, 2015

    [Note:  This post originally appeared here on the North Carolina Criminal Law blog.]

    Suppose a North Carolina city adopts an ordinance establishing a local speed limit of 25 miles per hour for all city streets that are not otherwise marked. Signs are posted on city streets reflecting the 25 mile per hour limit. Absent this ordinance, state law would provide for a speed limit of thirty-five miles per hour inside the municipal corporate limits. The city’s municipal code provides that violations of its provisions are not governed by G.S. 14-4, which otherwise would render the violation of a local ordinance regulating traffic an infraction. The municipal code also states that speeding on a city street is punishable by a civil penalty of $75 and requires that payment be made to the town hall. A local law enforcement officer stops a car that is traveling 40 miles per hour on a city street. May the officer issue a civil citation to the driver, requiring payment of the $75 penalty?  May the officer cite the driver for speeding in violation of state law, an infraction?  May the officer choose between these two methods of enforcement?

    Read more »

  • Notices and Public Participation in the Budgeting Process

    Authored by: on Monday, May 18th, 2015

    Budget season is in full swing for most local governments across the state. Managers, budget officers, department heads, and others are busy compiling expenditure requests and identifying potential revenue sources to balance the budget for the fiscal year that begins on July 1. Elected officials in many jurisdictions have been actively involved in setting policy and funding priorities for the unit. They are preparing to make difficult choices as to which projects and services to undertake, and which initiatives to postpone or even abandon. Board members also are determining the mix of revenue mechanisms that will be used to fund the projects and services, and deciding whether changes will be made to tax rates and fees. But what roll does the public play in this process?

    The answer to that question varies significantly among jurisdictions and even from year-to-year within a jurisdiction. The Local Government Budget and Fiscal Control Act, G.S. Ch. 159, Art. 3, prescribes the minimum process requirements that a unit must follow to provide notice to the public of the proposed budget and afford citizens an opportunity to comment. Many jurisdictions go well beyond the minimum requirements in order to facilitate meaningful citizen participation in the budget process. These additional public outreach efforts serve a valuable purpose, but they do not relieve a local unit from complying with the statutory requirements.

    This post summarizes the statutory notice and public input provisions. It also highlights resources available to help local units better integrate public participation in the budget process. Read more »

  • Public School Funding Dispute Resolution Process Revisited

    Authored by: on Friday, May 15th, 2015

    In Union County Board of Education vs. Union County Board of Commissioners, ___ N.C. App. ___, No. COA14-633 (Apr. 7, 2015), the North Carolina Court of Appeals reversed a trial court judgment in favor of the Union County Board of Education in the amount of $91,157,139, holding that the trial court judge erred in allowing evidence of the local school unit’s needs beyond its specific budget request. In so holding, the court clarified that G.S. 115C-431, commonly referred to as the dispute resolution statute, authorizes an “expedited process to resolve budget disputes between a board of education and a board of county commissioners when the board of education’s proposed budget [for the upcoming fiscal year] is not fully funded.” In other words, the dispute resolution process applies to funding disputes between a local school board and a county board of commissioners over the school unit’s upcoming fiscal year’s needs only. The court also confirmed that a county’s funding responsibility for public school capital and operating expense extends only to providing the amount that is “legally necessary” to enable the local school unit to meet its constitutional obligation to provide all students with the opportunity to receive a sound basic education. Read more »