North Carolina General Assembly Week in Review

January 21, 2022

Pardon Our Dust

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North Carolina is bracing for its third winter storm, which is supposed to continue through the end of Saturday. This week, the General Assembly reconvened to pass two bills, one which will postpone the state’s election timeline yet again. In today’s newsletter we explain that bill and review the bills passed last year that affect local governments.

Following the appearance of the first confirmed case of the omicron variant, COVID cases rapidly increased, but over the past week have gradually declined. As of this morning, in the state of North Carolina, there were 29,580 confirmed cases of the coronavirus. There are 4,741 individuals hospitalized, and sadly, 20,108 confirmed deaths. 74% of the total adult population has been vaccinated with at least two shots. 

As we all continue to feel the effects of the global pandemic and adjust to a new normal, we want to highlight a few ways our clients across North Carolina have worked to support residents and make this time a little easier for those throughout the state. Read more about what our clients are doing to help by clicking here.

For more information on COVID-19 in North Carolina, click here to visit the Department of Health and Human Services website, and be sure to stay up to date on the latest federal guidelines issued by the Centers for Disease Control and Prevention (CDC) by clicking here.

Election Timeline Changes

In response to the ongoing litigation over the legislative and congressional district lines that are set to be contested at the NC Supreme Court next month, the General Assembly reconvened this week to pass a bill to give candidates and the Board of Elections more time to prepare for the primary elections in the event the Court requires a redraw of the lines. H605: 2022 Primary Date would change the date of the 2022 primary from May 17 to June 7, and in the event of a second primary, or runoff, July 26. The filing period would be postponed to March 24 through April. Any person that filed in the December filing period before the Supreme Court ordered a stay on the districts would still be considered to have filed properly for the election; however, an individual who filed in December but wished to withdraw will be eligible to do so. While Governor Cooper has not yet indicated if he will veto the bill, Democrats in the General Assembly did not overwhelmingly support the bill. Democratic House Leader Rep. Robert Reives (D-Chatham) argued that the legislature should wait to see what the Court does first.

Review of 2021 Local Government Bills

Some of the greatest beneficiaries of last year’s General Assembly session were many of the state’s counties and municipalities. In addition to receiving more than $1.3 billion in direct assistance from the federal government through the American Rescue Plan Act signed by President Biden last March, the ARP also provided $5.5 billion for recovery funds to pass through the state. Many of those dollars were passed to local governments through the state budget passed in the fall, helping those local leaders address crucial water, sewer and economic development needs in their cities and counties.

In addition to the state budget, local governments were included in a variety of policy changes, including election changes, affordable housing, criminal justice reform, annexation, and transportation.

SB 105 2021 Appropriations Act: The state budget signed by Governor Cooper last fall has been heralded as the most significant piece of legislation for local governments in over a decade because of the roughly $2 billion directed to programs that will bring direct benefits to local governments. The state budget directs new funding and creates some new programs through the Department of Environmental Quality’s Division of Water Infrastructure, including $456.6 million into the state Viable Utility Reserve, $247 million for individual storm mitigation and resiliency projects, and $103.6 million for grants for stormwater mitigation programs. Additionally, localities will receive funding for economic development projects, including $115 million for local airport projects, $24.2 million for the Parks and Recreation Trust Fund, and $50 million for a new Rural Downtown Transformation Grant program for local leaders wanting to invest in new sidewalks, greenways, lighting, signage, public parking, or other projects to make their town or county more inviting for economic development or tourism. A priority of many legislators last session was increasing the supply of affordable housing, and as a result, the state budget includes a $170 million investment in the Workforce Housing Loan Program which provides funding to build affordable housing.

Annexation/Deannexation: A total of seven bills passed the General Assembly last year that would allow municipalities to annex or deannex property. Nearly all local bills affecting annexations and de-annexations this session were not controversial, with most having been requested by local officials.

Elections Changes: Last year, the US Census was delayed because of the COVID pandemic, forcing some municipalities to delay elections until next year via statewide legislation. Others took the opportunity to permanently move their elections to even-number years via local bill. Mount Airy, Rutherford College, Havelock, Trent Woods, River Bend, Dover, Cove City and Bridgeton will all see elections moved to even-numbered years.

SB 473 Enhance Local Govt. Transparency: Signed into law by Governor Cooper during the final days of the legislative session, this bill prohibits local officials from voting on or taking actions that advance a contract or award to a non-profit organization with which they have an association. A violation of that provision would be a misdemeanor.

HB 165 DOT Legislative Changes.-AB: Significantly for local governments, this bill changes how certain formulas are applied for transportation planning funding and for how variations are applied to the State Transportation Improvement Plan (STIP) funding formula. The bill increases the dollar threshold from $500,000 to $1 million under which informal bidding procedures can be used for construction and repairs with the Small Business Enterprise program, which will speed up those projects. The bill also expands the yearly cap for the department to pay Map Act claims from $150 million to $300 million.

HB 436 Support Law Enforcement Mental Health: This bill requires psychological screening examinations for law enforcement officers prior to employment and requires the NC Criminal Justice Education and Training Standards Commission and the NC Sheriff’s Education and Training Standards Commission to make officers statewide aware of mental health resources.

HB 536 Law Enforcement Duty to Intervene: This bill requires law enforcement officers to intervene and report an excessive use of force by another law enforcement officer. Additionally, the Commissions mentioned above are required to run applicants for law enforcement positions through the national decertification index.

HB 890 ABC Omnibus Legislation: Thirty alcohol-related provisions were combined into this omnibus bill that passed the General Assembly, several of which were of particular interest to local governments and in reaction to the COVID pandemic. One provision allows local governments to adopt an ordinance to create a “social district” which is defined as an outdoor area, marked clearly with signs, in which a person may consume alcoholic beverages sold by a permittee.

SB 314 Local Gov Commission Assistance Toolkit: In response to frustration over the last several years by some municipalities in response to their counties shifting the method of sales tax distribution, this bill seeks to avoid local government unit fiscal distress by delaying the impact of changes to sales tax distribution formulas by one fiscal year. Additionally, the bill amends the process for a municipality in financial distress to transition through either recovery or dissolution.

HB 489/SB 478 2021 Building Code and Dev. Reg. Reform: At the opposition of many local governments, this omnibus development industry bill contains provisions that restrict or limit the ability of localities to assess fees charged under local erosion control programs or for inspection compliance. Additionally, the bill prohibits local erosion control programs from requiring a separate erosion control plan for development of a residential lot disturbing less than one acre where an approved erosion control plan exists for the entire development and the developer and builder are the same person.

HB 20 1998 Clean Water Bond Add’l Connections: This law amends the Clean Water and Natural Gas Critical Needs Bond Act of 1998 to expand the criteria under which the Secretary of the Department of Environmental Quality must grant a waiver to allow additional connections for provision of water to include structures located on lots that are zoned for residential use or mixed-use development. This law eliminates the requirement under existing law that the structure be “habitable” and located on lots that are zoned for a “single-family residence.”

Legislative Meetings

Monday, January 24

1:00PM: House Select Committee on An Education System for North Carolina’s Future