Short Session Recap: Local Government
The end of the legislative short session was mostly focused on adjustments to the state budget, which brought billions in both state and federal funding to local governments. Many of the appropriations went towards water and sewer infrastructure, affordable housing, and economic development. Aside from the state budget, legislators pursued policies affecting public safety, municipal employees, and land use. Unlike previous sessions, few bills limiting municipal authority were ultimately adopted, including some that would limit annexation authorities or election timelines. Additionally, a host of bills, sponsored by both Republicans and Democrats, affecting law enforcement retention, retirement bonuses, training, and department funding, were not ultimately adopted by either chamber.
HB 103 - 2022 Appropriations Act: Building on the investments into infrastructure and local project funding that were passed in the 2021 state budget, legislators adopted a state budget bill that appropriated substantial amounts of grants and direct funding to counties and municipalities.
Perhaps most significant, nearly $1.5 billion will go to infrastructure projects prioritized by local government leaders. Some popular programs, the Viable Utility Reserve and the Drinking Water and Wastewater State Reserves, provide grant funds to local governments for water and sewer projects. The programs were first created using federal American Rescue Plan Act funds in last year’s state budget and became popular across the state. More than 700 applications were received, totaling $3.1 billion. In late July, the State Water Infrastructure Authority, which oversees the funds allocated by the legislature, announced that $789.4 million would be distributed to 385 projects statewide. During the 2022 legislative session legislators increased the size of the fund by providing $230 million in additional federal dollars. The budget also responded to local economic development priorities priorities by providing over $876 million to supplement investments in infrastructure or business incentives.
The short session budget made additional investment in transportation and housing for localities. Due to requested oversight of the Department of Transportation (DOT) and the historic transfer of sales tax revenue to the department, the budget for the state’s Highway Fund and Highway Trust Fund increased by $933 million. The appropriations act required DOT to make a one-time transfer of $109 million to the Highway Fund to accelerate right-of-way purchases for committed projects. Local government leaders also sought and received an increase of $20 million for the state’s Workforce Housing Loan Program, which provides loans to develop low-income housing, bringing the total over the 2021-2023 fiscal biennium to $170 million. Specific affordable housing projects of need were prioritized, including funding to high-need areas like Dare County.
SB 265 – Bond Info Transparency/LGC Toolkit II: Following several instances of local governments facing accusations of mishandling finances, legislators passed, and the Governor signed, a bill to provide for greater transparency. The bill requires local governments to disclose any estimated interest costs of a bond issuance and property tax rate changes that are needed to service a proposed debt. The bill also limits the amount of debt a city or county can incur without approval from the Local Government Commission.
HB 776 – Remote Electronic Notarization: This bill, that saw many changes before it was ultimately passed and signed into law, makes permanent the rules allowing for remote notarization of documents. This was a practice allowed during the state of emergency and used during the pandemic. The bill originally included language to require localities to provide public access to employee information, including reasons for demotions, transfers, suspensions, dismissals, and promotions, but this provision was removed in the final version.
SB 435 – Terminations of States of Emergency: Also making permanent another practice from the pandemic, this bill requires all counties and municipalities to post a notice of the implementation or expiration of a state of emergency clearly on their website. Additionally, the bill requires the units to provide notice to the Department of Public Safety’s critical incident management system.
HB 211 – Social District/Common Area Classifications: In 2021, a host of reforms to the way the state regulates alcohol were implemented, including the authority for local governments to adopt “social districts” where patrons of specified restaurants can carry alcoholic beverages onto the street. The broad changes in the bill provide more clarity about the businesses and restrictions in a social district. For example, this bill clarifies that a business in a social district may choose to exclude open containers of alcoholic beverages purchased from another permittee in the district. The bill also clarifies the role of the ABC Commission. Local governments must submit maps of the social districts to the ABC Commission, and the commission may issue one-time permits for qualifying applicants for events taking place within a social district.
The final section of the bill is not alcohol related, but clarifies that an owner of real property who is denied connection to water or sewer by a county may circumvent local voluntary annexation requirements and seek to obtain water or sewer from another unit of local government.
SB 372 – Electrical Lic./Bldg. Code/Dev. Reform 2022: This omnibus building inspections bill made numerous changes to state law, some of which affect local government authority. With the passage of the bill, local government inspection departments will be required to publish an annual report listing how they spend inspection fees. The bill also requires local governments to designate a person responsible for overseeing inspection responsibilities. The bill passed after a controversial provision, opposed by local governments, was removed. The section would have allowed private building inspections of residential and commercial construction projects.
Civilian Traffic Investigator bills: Several large cities in the state requested legislative approval for their usage of civilian traffic investigators to respond to minor traffic accidents. These civilians, who are already used in Fayetteville and Wilmington, have the authority to investigate crashes, write reports, and remove vehicles blocking traffic. The intent is to allow civilians, who are trained city employees, to do this work so police officers are freed up to focus on more pressing issues. The House advanced two bills that would have given this authority to Greensboro (HB 103) and Greenville (HB 1011), but the Senate did not take up the legislation.
HB 315 – Arson Law Revisions: A recommendation from the legislature’s Joint Oversight Committee on Justice and Public Safety, this bill makes a host of reforms to the state’s laws affecting arson prosecution. The bill also required municipalities and counties to seek background checks on all firefighter job applicants, including both paid and volunteer firefighters.