Recent Blog Posts

  • Expanded Motor Vehicle License Tax Authority for Municipalities

    Authored by: on Monday, November 9th, 2015

    A municipality currently is authorized under general law to levy up to a $5.00 licensing tax on any motor vehicle resident in the municipality (motor vehicle license tax). See G.S. 20-97(b). A municipality’s governing board may levy the tax in the unit’s annual budget ordinance. The revenue generated by the tax is unrestricted; it may be expended for any lawful purpose. Several municipalities have received local act authority to increase the amount of the tax. And, as of July 1, 2016, all municipalities will have the authority to levy up to a $30.00 motor vehicle licensing tax. See Section 29.27A of S.L. 2015-241.

    The expanded tax authority comes with some strings, though. All of the additional revenue that a unit generates from increasing the motor vehicle license tax above the current $5 limit is earmarked for certain expenditures. The earmarks do not apply if a unit continues to only levy the $5.00 tax. They also do not apply if a unit levies a motor vehicle license tax under local act authority.

    The expanded authority is effective as of July 1, 2016. Beginning with the FY2016-17 budget ordinance, if a unit levies a motor vehicle license tax pursuant to general law authority the proceeds from the tax are earmarked as follows: Read more »

  • Writing Off Old Property Taxes

    Authored by: on Monday, November 9th, 2015

    Quick poll question:  does your local government annually write off all property taxes that are more than 10 years old? (I bet everyone reading this post just nodded yes.)  Okay, second poll question: where in the Machinery Act are local governments authorized to write off all taxes that are more than 10 years old?  (I bet everyone reading this post just shrugged.)

    It’s true that most local governments remove old taxes from their books after 10 years. It’s also true that the Machinery Act doesn’t explicitly authorize this approach.  Here’s my analysis of the very common question about what to do with old taxes.  Read more »

  • New Law: Consenting to Medical Treatment for a Child Placed in the Custody of County Department

    Authored by: on Friday, November 6th, 2015

    Through S.L. 2015-136, “An Act to Make Various Changes to the Juvenile Laws Pertaining to Abuse, Neglect, and Dependency,” the General Assembly enacted G.S. 7B-505.1 and G.S. 7B-903.1(e).These two new statutes address medical decision-making authority for a child who is placed in the custody of a county department through an order entered in an abuse, neglect, and dependency action. These new laws apply to all abuse, neglect, and dependency actions that were pending on or filed after October 1, 2015.
    Read more »

  • 2015 Powell Bill Changes

    Authored by: on Monday, November 2nd, 2015

    In addition to local funding sources, municipalities receive some financial assistance from the State to help pay for the construction, maintenance and repair of municipal streets. The legislation that first established this distribution is known as the Powell Bill (after its principal sponsor in the North Carolina Senate), and the moneys distributed to the municipalities are referred to as Powell Bill funds. This year the legislature made a few significant changes to the Powell Bill fund authority in the state budget. This post discusses the general allocation and distribution schemes for Powell Bill funds and summarizes the recent legislative changes. Finally, the post briefly notes another new provision granting municipalities authority to raise local funds for street projects. Read more »

  • Two New Exceptions to the Public Records Law Protect Citizen Information

    Authored by: on Wednesday, October 28th, 2015

    Local governments obtain all sorts of information about citizens. Whether it’s for utility billing, payment of taxes, issuing permits, participation in local programs and volunteer activities, or as a result of regulatory or law enforcement activities, our personal information makes its way into government records. Under North Carolina’s public records law, government records are open to public access unless an exception applies. There is no blanket exception for citizen information. Instead, the General Assembly has enacted specific exceptions for particular categories of citizen information. Examples include utility billing information (discussed in a blog post here); email addresses used for subscriber lists (discussed in a blog post here); and social security numbers and other personal identifying information as listed in G.S. 132-1.10.

    In 2015, the legislature added two new exceptions to the public records law that will protect citizen information held by government agencies. One law, S.L. 2015-189, protects private information that is obtained by a city under an alarm registration ordinance. Another law, S.L. 2015-190, creates mandatory procedures for the use of automatic license plate reader systems, including limitations on the use and retention of data collected by these systems. Read more »

  • Local Sales and Use Tax Changes and New State Revenue Sharing Requirement

    Authored by: on Monday, October 26th, 2015

    There was a lot of buzz around sales tax reform during the past legislative session. Several different proposals were introduced, ranging from changing the allocation methods of existing local sales taxes to converting local sales taxes to state taxes. Many of the efforts were aimed at providing increased resources to rural areas in the state; some at the expense of more urban areas. The legislature arrived at a compromise of sorts, which is reflected in Sections 32.18 and 32.19 of S.L. 2015-241 (state budget). The new provisions make a few significant changes including expanding the sales tax base to include certain services; sharing a portion of state sales tax proceeds with counties and municipalities; and reallocating the expected increase in proceeds generated by three of the local sales taxes due to the base expansion to certain counties according to a statutory formula. The third change is being made “to address sales tax leakage that results from the different revenue-raising capacity of local option sales taxes in each taxing jurisdiction.” G.S. 105-524(a).

    This post details current local sales and use tax authority, including hold harmless payments and state supplemental payments. It then summarizes the changes to the new local sales and use tax allocation scheme, and it describes the new state supplemental payments. Finally, it briefly analyzes the constitutionality of the new local sales and use tax allocation scheme. Read more »

  • Local Government Economic Development Powers “Clarified”

    Authored by: on Monday, October 26th, 2015

    On October 20, 2015, the Governor signed Session Law (S.L.) 2015-277, placing into effect several “clarifications” to the primary economic development statute used by local governments, G.S. Chapter 158, Article 1, “The Local Development Act of 1925.” The modifications fall into three categories: first, broad discretionary language was removed; second, new procedural requirements were imposed; and third, historic rehabilitation was explicitly included within the penumbra of allowable economic development activities, subject to the same limitations that have long been imposed on such activities by the statute and the North Carolina Constitution. Each will be addressed in turn. Read more »