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  • “Good Cause” and Late Property Tax Exemption Applications

    Authored by: on Monday, September 28th, 2015

    The Machinery Act rarely gives local governments much discretion. Most often our property tax statutes proscribe exactly what should happen in a given situation.

    There are a few tax collection situations in which local governments have flexibility, however.  Consider the unfettered authority of tax collectors to waive the 10% penalty for bad checks (G.S. 105-358) or the option for local government boards to waive discovery bills.  G.S. 105-312(k).

    Another of these discretionary situations is the topic of today’s blog post: decisions by governing boards to allow late exemption applications for “good cause.”  G.S. 105-282.1(a1).  That statute does not define “good cause”, leaving it up to local governments to decide for themselves what facts justify late applications.  Read more »

  • Leasing Government Property Legislative Changes: Notice Requirements and Communications Towers

    Authored by: on Friday, September 25th, 2015

    What do the time frame for providing public notice of a lease of government property and leasing government property for communications towers have in common? Changes to the statutory requirements for both are included in legislation that became law earlier this week. Section 9 of S.L. 2015-246 (H44) amends G.S. 160A-272, the statute that generally governs leasing government-owned property, in two ways: (1) increases the public notice period for certain types of leases from 10 days to 30 days; and (2) allows leases for communications towers to have a term of up to 25 years without being treated as a sale of government property. Both of these legislative changes are now law, so if you’re interested, keep reading.

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  • New Public Records Exceptions for Security and Law Enforcement Officers (LEO) Information

    Authored by: on Friday, September 25th, 2015

    Concern about the safety of law enforcement officers (LEOs) and their families has led the North Carolina General Assembly to consider, over the past several years, various proposals to protect from public disclosure personal information of LEOs and other officials who are involved in the criminal justice system. A proposal from last year (mentioned in my blog post here) would have authorized law enforcement personnel to request that their personal information be removed from city and county websites. That bill did not pass, but the legislature revived the issue this session, eventually settling on a provision that protects certain specific information about sworn law enforcement officers. It also creates a new exception to the public records law for the government-issued mobile phone numbers for law enforcement and certain other employees. The state appropriations act (the state budget) also creates new exceptions in the public records law for certain security information. Read on to learn more about these new exceptions. Read more »

  • New Law Modernizes Preaudit and Disbursement Processes–Part II

    Authored by: on Thursday, September 24th, 2015

    Effective October 1, 2015, local governments, public authorities, and school units are subject to new preaudit and disbursement processes. In S.L. 2015-246, the legislature modified G.S. 159-28 (applicable to local governments and public authorities) and G.S. 115C-441 (applicable to school units) to address common issues faced by local units in implementing the preaudit and disbursement requirements, particularly with respect to electronic transactions. (The changes do not apply to ABC Boards, which will continue to be subject to the existing preaudit and disbursement requirements under G.S. 18B-702.)

    This post summarizes the changes to the disbursement process. Click here for a discussion of the new preaudit provisions. Read more »

  • Richmond County Board of Education v. Cowell: Clear Proceeds of Improper Equipment Offense Surcharge Belongs to Public Schools

    Authored by: on Thursday, September 17th, 2015

    As part of the Justice Reinvestment Act of 2011, the legislature enacted G.S. 7A-304(a)(4b), which assesses a $50.00 surcharge on any individual convicted of an improper equipment offense. Improper equipment offenses are generally defined in G.S. Ch. 20, Art. 3, Part 9, and include operating a vehicle without properly functioning equipment (such as a steering mechanism, speedometer, brakes, horn, directional signal, windows, windshield wipers, exhaust system, emission control device, tires, etc.). The surcharge is assessed in addition to any other penalty or cost authorized by law for conviction of the offense. The proceeds are remitted to a state fund (State Confinement Fund) and used to pay a portion of the cost of housing certain misdemeanants in county jails. 

    The North Carolina Court of Appeals recently held that the use of the proceeds for this purpose violates the North Carolina Constitution. The court determined that the $50.00 surcharge “falls within the ambit of Article IX, Section 7(a)” of the Constitution and, therefore, the clear proceeds generated from the surcharge must be used to fund education rather than be contributed to the State Confinement Fund.  Read more »

  • Cash Grants for Real Estate Developers without Competition for Jobs—A Constitutional Quandary

    Authored by: on Tuesday, September 15th, 2015

    A local real estate developer, Al Czervik, proposes to construct a mixed-use development with residential, office, and retail space. The city council likes the development plan because it is consistent with the council’s vision for the area. Czervik, seeing incentives being offered to convince companies to locate in North Carolina rather than other states, misses the significance of the competition element of those incentives and thinks his development, too, should receive incentives. He requests a $1 million cash grant ($100,000 per year for 10 years) from the city to “make the project work.” Czervik is unwilling to promise jobs, of course—because it is the tenants who will provide jobs, not his development—but he is confident that tenants with jobs will locate in the development and therefore he seeks a subsidy nonetheless. Czervik’s request gets the attention of the city attorney, who is well aware that this request rests on very shaky legal ground (as explained in this blog post and this law review article). How might the city attorney frame the legal issues for city council members, who are initially receptive to Czervik’s request? Read more »

  • New Exclusions for Residential and Commercial Real Property Improvements

    Authored by: on Thursday, September 10th, 2015

    In my last post I discussed S.L. 2015-204, which creates new authority for counties to waive interest on old registered motor vehicle taxes.  Today I analyze the second major property tax law passed this session, S.L. 2015-223, which is much more likely than S.L. 2015-204 to have a substantial impact on local government finances.

    S.L. 2015-223 creates new exclusions for improvements to real property being held for sale.  For years home builders have been pushing to exempt their real property inventory from property taxes in the same fashion that personal property inventory held by traditional merchants and manufacturers is exempt under G.S. 105-275(32a), (33) and (34).

    Home builders got their wish, sort of, for a few years.  In 2010 the General Assembly created a deferral for taxes attributable to the construction of new, unsold residential homes.  That deferral “sunsetted” (in other words, disappeared) as of 2013.

    But now it’s back and stronger than ever.  Instead of deferring taxes, S.L. 2015-223 excludes them entirely. And the new law covers non-structural improvements and commercial properties, neither of which fell within the scope of the old deferral.

    Here’s a summary of the new law:

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