Recent Blog Posts

  • Mind the Gap (Billing)!

    Authored by: on Monday, August 28th, 2017

    No, not the gap that subway riders all over the world are warned about at every stop.  I mean the gap between the time the NC registration for a motor vehicle expires and a new registration is issued for that same vehicle.  During that gap the motor vehicle is unregistered, meaning the county in which that vehicle is located has the obligation to list and tax it as personal property.  Gap billing is one of the few remaining county tax obligations for motor vehicles after the DMV took over the collection of property taxes on registered motor vehicles under the Tag & Tax Together program.

    Gap billing has been required by G.S. 105-330.3 since Tag & Tax Together went live in 2013. But it was not until January 2017 that the state began providing counties with “gap billing reports” for vehicles whose registrations expired and were later reissued.  Earlier this month, the governor signed Session Law 2017-204 (see Part V on page 40 here), which amended G.S. 105-330.3 to simplify the gap billing process and make it conform more closely to “regular” personal property tax bills.  Just last week Durham County shared with other counties two gap billing forms (here and here) that they developed in consultation with the DOR. And finally, the DOR reports that very soon they will be helping counties automate the gap billing process.  All of which is to say that counties now have the information and the guidance needed to mind the gap and start billing. Read more »

  • Statues and Statutes: Limits on Removing Monuments from Public Property

    Authored by: on Tuesday, August 22nd, 2017

    Monuments to Confederate soldiers stand outside the county courthouse in many North Carolina counties.  Other Civil War monuments and statues are located in public parks and cemeteries, and one stands in a prominent location at the University of North Carolina at Chapel Hill.  What, if anything, can a local government do with such a monument?  That question has come into sharp focus in recent days.  Protests in Charlottesville, Virginia, related to that city’s decision to remove a Confederate statue turned violent, and a white nationalist protestor killed a woman when he drove his car into a crowd of counter-protestors.  Two days later demonstrators in North Carolina toppled the Confederate Soldiers Monument at the old Durham County Courthouse.

    Governor Roy Cooper and other leaders have called for Confederate monuments to come down, but Cooper stated that there is a better way to go about it than demonstrators tearing down statues.  There are legal limits, however, for the State or subdivisions of the State to remove or relocate such monuments.  A North Carolina law, adopted in 2015 and codified as North Carolina General Statute (G.S.) § 100-2.1, requires that objects of remembrance on public property cannot be removed or relocated except in certain circumstances. On the surface that law seems straightforward—cities and counties can’t remove a Confederate monument.  The crafting of the law and the many ways that scenarios might play out, however, raise questions about the precise scope and effect of the law.  This blog seeks to identify those questions and offer some (but certainly not all) answers about the scope of local government authority for removing objects of remembrance.

    Read more »

  • Companies that Boycott Israel – New Contracting Limitation But No Action Required Yet!

    Authored by: on Thursday, August 17th, 2017

    During the final week of the recently adjourned 2017 legislative session, the General Assembly enacted S.L. 2017-193 (H161), “Divestment from Companies that Boycott Israel.” This legislation created a new Article 6G of Chapter 147 prohibiting the investment of state funds in or governmental contracting with any company that boycotts or is involved in a boycott of the State of Israel.  The prohibition is similar to the Iran Divestment Act in that state agencies and local governments are prohibited from contracting with companies identified by the State Treasurer as engaging in certain activities determined by Congress and our state legislature to be against the interests of our country and state (see this post for recent legislative changes to the Iran Divestment Act).  This post discusses the new Israel boycott contracting prohibition which went into effect when the legislation became law on July 27, 2017.  Although the new law is in effect now, local governments should not worry about complying with it just yet – it will be several months before compliance requirements are triggered.

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  • Iran Divestment Act Changes – No Certification Required Anymore!

    Authored by: on Wednesday, August 16th, 2017

    In 2015, the General Assembly enacted the Iran Divestment Act (IDA) which prohibits state agencies and local governments from contracting with a company that the NC State Treasurer has determined invests more than $20 million dollars in the Iranian energy sector (for more information on the IDA, see this blog post).  The Treasurer is required to publish a list of such companies on its website (commonly known as the Treasurer’s IDA list) and to update the list every six months.  Two provisions of the IDA created challenges and confusion for local governments right from the start.  First, the IDA required contractors to certify at the time of submitting a bid or entering into a contract that they were not included on the Treasurer’s IDA list, but did not specify how or in what form the contractor was to make this certification.  Second, the definition of a “person” on the Treasurer’s IDA list with which state agencies and local governments could not contract included a reference to governmental entities that some interpreted to include state and local governments themselves.  Under this interpretation (which was not rendered by this author), state and local governments were required to certify that they were not investing at least $20 million dollars in the Iranian energy sector when entering into a contract with another governmental entity, such as an interlocal agreement or an award of grant funds.  Fortunately, the General Assembly enacted legislation during this year’s session that eliminated the certification requirement and put to rest the “person” confusion.

    Read more »

  • System Development Fees are the New Impact Fees

    Authored by: on Tuesday, August 15th, 2017

    As detailed here, in 2016, the North Carolina Supreme Court held that municipalities (and by analogy counties) lack the statutory authority to impose certain upfront charges for water and sewer services. Upfront charges are charges imposed on new or existing development before a property parcel is actually connected (or under contract to connect) to a local government’s water or sewer system. Local government utilities across the state impose a wide variety of upfront charges, some that are assessed only on developers as a condition of securing development approvals, and others that are imposed on both new and existing property owners. The purposes of these fees range from reimbursing the utility for past investments, to reserving capacity, to covering the costs of extending infrastructure, to establishing a reserve for future maintenance or expansion of the system. In Quality Built Homes Inc. v. Town of Carthage, No. 315PA15, ___ N.C. ____ (Aug. 19, 2016), the supreme court invalidated certain types of upfront charges. Questions remained, however, as to whether government utilities have authority to impose other types of upfront charges pursuant to their general rate-making authority. As detailed in this post, local government utilities were left to make difficult decisions about who to charge, when to charge, and how to calculate the amount of the charge.

    A new law, the Public Water and Sewer System Development Fee Act, S.L. 2017-138, clarifies a local government utility’s authority to assess upfront charges for water and sewer. The new law grants local government utilities specific authority to assess one type of upfront charge—a system development fee—albeit with significant limitations. It also preserves the authority of local government utilities to impose certain other upfront fees. At the same time, however, it prohibits local government utilities from assessing many of the types of fees that have become routine in recent years. Local government utility providers will need to act soon to bring their fee schedules into compliance.

    This post sets out the basic contours of the new law. It discusses who must comply, who can be assessed and when, what the processes are for calculating and adopting the fee schedule, and how a local unit must administer the fee proceeds. It also lists the other types of allowable water and sewer charges. Finally, it identifies a few drafting quirks that may cause some implementation issues. The Generally Assembly has specified that the new law’s provisions be narrowly construed by the courts. To that end, local officials should carefully follow the statutory requirements and proceed cautiously when interpreting any statutory ambiguities. (Future posts will flesh out the details for the calculation requirements and deal with potential liability issues for past fees that were assessed unlawfully.) Read more »

  • Difficult Exemption Questions

    Authored by: on Monday, August 14th, 2017

    To qualify for most property tax exemptions in North Carolina, property must be both owned by a qualifying taxpayer and used for a qualifying purpose. (You know that because you’ve read this post, right?)

    A recent email from a county tax office highlights how difficult these question can become. Although you might never face the exact same scenarios as this county did, the analysis I share below should help with your next knotty exemption problem.

    Here’s a brief description of the two property owners in question.  (Names changed to protect the innocent and the guilty, the taxable and the exempt.)  Should either of these property owners be exempt?

  • Angels’ Wings Aviation, Inc., a non-profit corporation that provides pilot training for religious missionaries and aviation education for youth. The taxpayer seeks an exemption under either GS 105-278.3 (religious) or GS 105-278.7 (charitable, scientific, educational). It plans to purchase a private plane that will be hangered in the county.
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  • Smoky Mountains Financial Institute Inc., non-profit corporation that provides education and coaching to help individuals achieve lifelong financial independence and self-confidence in managing their personal finances. It seeks an exemption under GS 105-278.7 (charitable, scientific, educational).
  • Read more »

  • Local Government Lawyers: Take Care in Asserting Governmental Immunity

    Authored by: on Tuesday, August 1st, 2017

    When a city, county, or other unit of local government is sued for negligence or other torts, it’s common practice for the unit’s attorney to file a motion asking the trial court to dismiss the lawsuit based on the defense of governmental immunity. (See blog posts available here and here for an explanation of governmental immunity fundamentals.)  Many local government attorneys believe that, if the trial court denies such a motion, the unit always has the right to an immediate appeal.  As a recent decision by the North Carolina Court of Appeals reminds us, however, whether the unit may immediately appeal can depend on how the immunity defense is framed in the motion.  This blog post aims to

    • explain when a motion to dismiss that alleges governmental immunity is immediately appealable and
    • identify practical steps local government lawyers should take to ensure that the right to an immediate appeal is preserved.

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