Recent Blog Posts

  • 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 »

  • Voting Rules, Monuments, and Beehives: Miscellaneous Changes to Local Government Laws

    Authored by: on Friday, October 23rd, 2015

    It is an understatement to say that this year’s session of the General Assembly produced legislation of interest to local governments.  Some of that legislation has been discussed by my colleagues elsewhere on Coates’ Canons.  (See, for example, here, here, here, and here.)

    This blog post examines a handful of largely unrelated legislative changes that involve local governments in some way.  The changes concern the following topics:

    • city council voting rules
    • chronic violators of overgrown vegetation or nuisance ordinances
    • local beehive regulations
    • the display and handling of the United States and North Carolina flags
    • the removal or relocation of public monuments
    • the standard of proof for claims against 911 operators
    • oaths of office for county officers
    • licensing requirements for closing-out and distress sales
    • the preemption of local firearms regulations

    Read more »

  • New Rules for Small Overpayments of Property Taxes

    Authored by: on Thursday, October 22nd, 2015

    After posts on the new builders’ inventory exclusion (here and here) and on new rules for the waiver of interest on old motor vehicle taxes, one final new property tax law deserves its own blog post.  S.L. 2015-266 creates new procedures for resolving small overpayments.

    In a nutshell, the new law permits a local government to apply overpayments of less than $15 to the taxpayer’s account for the following year’s taxes unless the taxpayer requests payment of the refund prior to the end of the fiscal year.  I’ve blogged on the existing rules for overpayments here; today I explain how the new law on overpayments interacts with those rules. Read more »

  • 2015 Changes to Municipal Service District (MSD) Authority

    Authored by: on Monday, October 19th, 2015

    In the state budget bill, S.L. 2015-241, the legislature made a few changes to municipal service district (MSD) authority. An MSD is a defined area within a municipality in which the unit’s governing board levies an additional property tax in order to provide projects or extra services that benefit the properties in the district. (Counties have similar authority, referred to as county service districts.) A service district is not a separate government. It is simply a mechanism whereby a local government may raise money to pay for services or projects from those property owners that most directly benefit from the services or projects. (Click here for more information on MSDs.)

    Under general law, a municipality may define one or more service districts for any of the following functions:

    • Beach erosion control and flood and hurricane protection works
    • Downtown revitalization projects
    • Urban revitalization projects
    • Transit-oriented development projects
    • Drainage projects
    • Sewage collection and disposal systems
    • Off-street parking facilities
    • Watershed improvement, drainage, and water resources development projects

    (There are a few additional authorized purposes for certain municipalities. See G.S. 160A-536.)

    The most common municipal service districts are established for downtown or urban area revitalization. A municipality may establish one or more downtown revitalization districts in its central downtown area. It may form an urban area revitalization district in an area that meets any one of these criteria: (1) it is the central business district of the municipality; (2) it consists primarily of existing or redeveloping concentrations of industrial, retail, wholesale, office, or other significant employment-generating uses; (3) it is located in or along a major transportation corridor (with certain restrictions); or (4) it is centered or focused around a major concentration of public or institutional uses.

    Downtown and urban area revitalization districts are commonly referred to as business improvement districts or BIDs. Establishing a BID allows a municipality to levy an additional property tax on real and personal properties within its central downtown, or other commercial area, to fund a variety of downtown projects and services, such as street and sidewalk improvements, promotional and marketing efforts, increased security, additional trash collection, and building façade improvements.

    Section 15.16B of S.L. 2015-241 (state budget) imposes limitations on a municipal board’s authority to levy an MSD tax for any of the authorized purposes. It also mandates that a municipality follow certain procedures before entering into a contract with a private entity to provide services within certain types of MSDs—namely those established for downtown or urban area revitalization. Finally, the new law designates a study commission to look at the feasibility of allowing property owners to opt out of an MSD. Read more »

  • Legislative Transfer of Asheville Water System Is Constitutional

    Authored by: on Thursday, October 15th, 2015

    [Update: The North Carolina Supreme Court reversed this decision in Asheville v. State. Read about the Supreme Court decision in a blog post here.]

    In 2013 the North Carolina General Assembly enacted a law (S.L. 2013-50) that requires the city of Asheville to transfer its water system to an existing metropolitan sewerage district (MSD) operating in Buncombe County. Once the water system is transferred, the law transforms the MSD into a new entity, a municipal water and sewer district (MWSD), which has authority to operate both the water and sewer systems. The law doesn’t mention Asheville or the Buncombe County MSD by name, but they are the only local governments that meet the descriptive criteria in the law. The city of Asheville challenged the constitutionality of the law and the trial court ruled in the city’s favor. The North Carolina Court of Appeals has reversed that ruling in City of Asheville v. State, finding the law to be a valid exercise of the legislature’s authority over local governments.
    Read more »

  • More Questions About the New Builders’ Inventory Exclusion

    Authored by: on Thursday, October 8th, 2015

    The General Assembly finally closed up shop for 2015 but conversations about the new laws produced this session continue to percolate.

    A prime topic of these discussions is the new exclusion for improvements to residential and commercial real property (S.L. 2015-223).  I’ve already blogged and published a bulletin about the law, now nicknamed the “builders’ inventory exclusion.”  After hearing many interesting questions about the exclusion at Department of Revenue seminars over the past few weeks, I thought a follow-up blog would be helpful. Read more »

  • IT’S BACK . . . New E-Verify Contracting Requirements

    Authored by: on Monday, October 5th, 2015

     

    In the waning days of the 2015 legislative session, the General Assembly enacted legislation that once again changes the E-Verify contracting prohibition for state and local government contracts. In some respects HB318 (Protect North Carolina Workers Act) limits the prohibition; in many other respects, however, the prohibition has been expanded. Local governments, school units, and public authorities should be aware of these changes and take steps to comply with them, especially since the new law will go into effect as soon as the bill is signed by Governor McCrory and will apply to all contracts entered into on or after that date.[1] Read more »