COVID-19 Law & Policy Updates

UPDATES (July 27, 2021): On Monday, July 26, Bloomberg Law reported on a July 6 U.S. Department of Justice memo that addressed whether public or private entities may require COVID-19 vaccinations while they are under emergency use authorizations. The memo concluded that the federal Food, Drug, and Cosmetics Act does not prohibit such requirements. Also on Monday, the U.S. Department of Veterans’ Affairs announced that VA health care personnel would be required to receive COVID-19 vaccinations. On Tuesday, July 27, the CDC issued updated recommendations for mask use by fully vaccinated people. The new guidance recommends that fully vaccinated people wear face masks in public indoor settings in areas experiencing substantial or high transmission, a designation that presently includes a majority of North Carolina’s counties. The guidance also recommends universal indoor masking for teachers, staff, students, and visitors to schools, regardless of the individual’s vaccination status.

July has been a very busy month in COVID-19 law and policy, with activity on issues ranging from mask requirements, to new guidance for K-12 schools, to vaccine mandates. This post rounds up the latest information and resources, beginning with a snapshot of where we’ve been and where we are now with COVID-19 in North Carolina.

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Property Taxes and Annexations

It’s been 10 years since the General Assembly limited the authority of municipalities to annex property into their municipal limits.  My colleague Frayda Bluestein explained the details of these changes here and here. The most consequential of those changes was preventing municipalities from pursuing annexations that were not requested by the property owners (aka involuntary annexations) unless a majority of voters in the affected areas approve the annexations. Read more »

Public Meetings After the Lifting of the State-Level State of Emergency

In May of 2020, early in the pandemic, the legislature enacted a new law setting out provisions for remote meetings during a state-level state of emergency. See my blog post here, to see a review the statute, and my blog post here, to see a summary of the recent clarifying amendments to the new law – I’ll call it the “SOE law.” The Governor’s state of emergency is still in effect, and so is the SOE law, but it’s not too soon to think about  the conduct of meetings after the state of emergency ends. For example, before the SOE law, there were no specific rules about board members participating remotely.  The SOE law set out specific rules for remote participation, and the use of remote meetings has become a regular practice during the pandemic. Remote public access to meetings in many places has increased. But those SOE law rules expire when the state of emergency ends.

Once the state of emergency ends what will the rules be? They will be what they were before the adoption of the SOE law. For a summary of the law on remote participation before the SOE law see my bulletin and  blog post here.  This blog post sets out the things that local government boards can continue to do after the SOE law expires and the things that boards can’t continue do without obtaining legislative authority. Read more »

American Rescue Plan Act of 2021 (ARP): Local Government Expenditures of ARP funds for General Government Purposes

As some local governments have received, and many will shortly receive, their first tranche distribution of ARP funds (also referred to as Coronavirus State and Local Fiscal Recovery Funds, Fiscal Recovery Funds, or CLFRF), local officials are trying to understand all their expenditure options. I have received several questions from local officials about the legality of using ARP funds for everything from buying police vehicles, to doing minor construction projects, to acquiring land, to providing general salary bonuses, to spearheading economic development projects, to hiring new employees, to upgrading software systems, to giving a rebate to taxpayers, to installing new playground equipment, and beyond. In short, local government officials want to know whether, and to what extent, ARP funds may be used for general government projects, services, and activities that do not directly relate to the pandemic (collectively general government purposes).

The short answer to this question is that although most of the authorized expenditures for ARP funds relate to addressing the public health and financial impacts of the pandemic, there is authority to spend at least a portion of ARP monies for general government purposes. A detailed analysis, however, finds that this authority is more limited than it might first appear. A local government may use ARP monies to fund (most) government services, to the extent that the local government experiences a reduction in general revenue during the pandemic, according to a specified formula. Additionally, a local government may spend ARP monies for certain necessary public enterprise infrastructure projects. Finally, there is authority to spend a small portion of ARP monies (and investment proceeds of ARP monies) for general government purposes. More on each below. Read more »

Clarification of Rules for Remote Meetings Under State Level State of Emergency: No More Waiting 24 Hours After Public Hearings!

At the beginning of the pandemic, a new statute regarding remote meetings– GS 166A-19.24— provided a roadmap for managing government business. Public officials have learned so much about how to do things differently. Shout out to all of you who have pivoted in so many new directions, to keep people safe and healthy, and keep the government moving.  The new rules for remote meetings, summarized in my blog post here, have worked well but they also raised a few questions. Luckily, several local government attorneys proposed some clarifying changes. [Special thanks to Mujeeb Shah-Khan (Monroe City Attorney) for shepherding the project.]  Three changes were ratified by the legislature and signed by the Governor in Session Law 2021-35 (House Bill 812). This blog summarizes the changes, which will become effective July 1, 2021, and apply to remote meetings held on or after that date. Read more »

American Rescue Plan Act of 2021 (ARP): Accepting Funds, Budgeting & Cash Management

UPDATED June 18, 2021 to provide additional information on investment proceeds of ARP Funds, based on a June 17 update from US Treasury.

As detailed here and here, the federal American Rescue Plan Act (ARP) provides significant funding for NC local governments. (These funds are also referred to as Coronavirus State and Local Fiscal Recovery Funds, CSLFRF, CLFRF, or Fiscal Recovery Funds.) Many counties and municipalities over 50K population (metropolitan municipalities) have already received their first tranche of funds directly from the federal government, which comprises one-half of their total allocation. (For counties and metropolitan municipalities who have not yet applied, you may do so here.) All other municipalities, referred to as nonentitlement units of local government or NEUs, should receive their first distribution from the state within the next month or so, which also will comprise one-half of their total allocation. The NC Pandemic Recovery Office (NCPRO) has important guidance for local governments, including a checklist of items to complete in anticipation of receiving the ARP funds. They also are compiling and addressing frequently asked questions here. The US Treasury has addressed NEU distribution FAQs here.

Local government officials have many questions about when they’ll receive their funds and how much, for what purposes may they spend the monies, and what contracting, reporting, auditing, and other compliance requirements apply. Unfortunately, we do not yet have all the answers from the federal government. The good news is that local officials do not have to rush to spend the funds. According to the US Treasury’s Interim Final Rule interpreting the ARP, local governments have until December 31, 2024, to obligate the ARP monies and until December 31, 2026, to expend all the funds. As an immediate matter, though, local officials need to know how to accept the funds, what to do with the cash, and how to budget the monies under state law. Those are the topics of this post. Read more »

American Rescue Plan: Local Government Funding for Affordable Housing Development

The federal American Rescue Plan Act of 2021 (ARP) established Coronavirus State and Local Fiscal Recovery Funds (“FRF”), which will be distributed to state and local governments for the purpose of responding “to the public health emergency with respect to the Coronavirus Disease 2019 (COVID–19) or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid to impacted industries such as tourism, travel, and hospitality” (Part 8, Subtitle M of ARP). The amounts to be distributed are substantial. The U.S. Department of Treasury (“Treasury”) lists the county-by-county distributions here and the allocations for “entitlement” cities here.

The Interim Final Rule, promulgated by Treasury and codified at Part 35 of Subtitle A of Title 31 of the Code of Federal Regulations, recognizes “a broad range of eligible uses” for FRF, and offers local governments “flexibility to determine how best to use payments.” Although the rule is still “interim” and therefore leaves some details to be finalized, public officials are beginning to plan how they will utilize the infusion of funding. This post is designed to inform those initial planning discussions at the local level, and it will be updated when/if the “interim final rule” is revised.

There are many possible uses of FRF, ranging from premium pay for essential workers, to water, sewer, and broadband infrastructure. One particular category of potential FRF-eligible activities has generated a good deal of interest and questions from public officials: 31 C.F.R. 35.6(b)(12)(ii)(B) authorizes FRF to be used for “[d]evelopment of affordable housing to increase supply of affordable and high-quality living units.” Read more »