Session ends with 911 win

By Todd McGee
Communications Director

During a tough session that caused most advocacy groups to measure success in terms of limiting their losses, counties in North Carolina did manage to record one significant victory this session when the General Assembly approved a bill to expand the use of 911 funds.

Counties receive flexibility to use 911 funds for equipment other than what is needed to receive calls. (NCACC file photo)

H1691 (Use of 911 Funds) was passed in the final days of the session and accomplishes two long-standing county legislative goals – to expand the use of the 911 funds and to add local government representation to the state 911 Board.

The bill equalizes representation on the state 911 Board by adding two local government representatives, and gives counties the ability to use the funds to purchase more types of equipment needed to operate a 911 center. Previously, counties could only spend the funds on equipment needed to receive 911 calls.

The bill also provides a one-time window to use up to 50 percent of the reserves built up in the fund for any public safety need, freeing up almost $50 million statewide for counties and cities, and establishes statewide standards for 911 centers.

Rep. Angela Bryant (Nash) was one of the co-sponsors of the bill and co-chaired, along with former Rep. Lucy Allen (Halifax), a study committee that examined the issue beginning in January 2010. The committee met several times before the 2010 short session convened. It consisted of several legislators with an interest in this issue, including Reps. Bill Faison (Orange), Efton Sager (Wayne), Lorene Coates (Rowan) and Roger West (Cherokee).

Bryant said the study committee played a key role in gaining momentum on the issue.

"The study committee made the difference because it was a complicated issue," Bryant said. "All of us, the legislators involved in the study … were very involved in the issue, understood the issue and knew about the issue, so I think that made all the difference. We were able to get to the nitty gritty of where the conflicts were and try to solve the problems in a balanced way."

Bryant became involved because commissioners in the two counties she represents – Halifax and Nash – prodded her on the need to expand the use of 911 funds. Both counties adopted a set of legislative priorities each year, and expanded use of 911 funds was always at the top of the list.

"I got involved with the 911 issue because it was the priority of both of my counties," she said. "It took me my whole first session to understand what the problem was. Everybody told me you can't mess with that. It's too big of a problem, and the telephone companies will never go along with it. It's an unsolvable problem."

Bryant said House leadership told her the issue was too complicated and too controversial for a statewide bill and encouraged her to file a local bill. As a result, several legislators filed local bills during the 2009 session.

"We had enough local bills filed to really get some momentum in the Public Utilities Committee, and it was bipartisan," Bryant said. "We had both Republican and Democratic members who had filed bills. That helped us get the bills rolled into a study. We learned enough about it to make good arguments for making changes, and as a result of that we got the study, which I think was the beginning of us really solving what had been a long-term problem."

For what was supposed to be an unsolvable dilemma, the bill was passed without a dissenting vote in both the House and Senate.

"Now our communities will be safer in several respects," Bryant said. "First, we are putting $50 million on the streets in our local communities for public safety needs at a time when most every community is cutting the budget. In addition, we will have minimum statewide standards in place by next fiscal year. So that means when you call 911 in every jurisdiction, the quality of service you receive will be relatively similar. We think that will help protect people. And third, we will be more prepared now as we go into the next generation of technology. In those three ways, our communities are safer and we have helped provide money for our local communities."

ABC reform bill gets a late pass

While the 911 legislation was the biggest positive impact for counties, there were several other bills of interest that passed in 2010. Another bill that passed during the final week was H1717 (Modernization of the State ABC System). The bill empowers county boards of commissioners – as the appointing authorities for many local ABC boards – to monitor and address potential problems within the ABC system. ABC boards and employees are covered under the Local Government Ethics Act and must comply with a gift ban and an anti-nepotism provision.

Boards of county commissioners are empowered to address local ABC problems. (Photo by Todd McGee)

The bill allows the State ABC Commission to promulgate rules regarding operating efficiency and solvency, but not profitability standards that may be unattainable for many smaller local boards. If an ABC board is not in compliance with the performance standards that are set, the county and the State ABC Commission have more than a year to work together to develop an improvement plan to get the system back on course to try to avoid insolvency. If problems are not corrected during that time, the ABC Commission must notify the appointing authority prior to taking action. The bill allows the ABC Commission to merge an insolvent local board with another local board, create a joint store operation or close single stores – instead of just having the option of closing an insolvent system. This bill also requires local ABC boards to prepare an annual balanced budget and provide copies of reports to appointing authorities.

This legislation would limit local ABC general manager salaries to the same as the local clerk of superior court, but allow the appointing authority to alter this if warranted. Similarly, the legislation limits local ABC board member compensation to $150 per meeting, but the appointing authority has the authority to decide differently and to notify the State ABC Commission of that change. The legislation requires ABC board members and employees to follow the same travel reimbursement procedures as state employees unless the appointing authority establishes a different travel policy and notifies the ABC Commission.

State budget causes local headaches with lottery change

For the first time in seven years, the General Assembly adopted a budget before the end of the current fiscal year when the Senate and House both gave final approval to the 2010-11 state budget on June 30. The budget reduced the second year of the biennium's budget by $600 million to just shy of $19 billion and included $519 million in enhanced federal Medicaid dollars yet to be enacted by Congress.

The General Assembly balanced its budget in part by diverting nearly $63 million of county lottery funds. The state used all of the projected growth in lottery sales and reduced the county share, compared to 2009-10 appropriations, by more than $30 million. The state will use the money for classroom teachers and scholarships. The lost revenues effectively reduce counties' statutory 40 percent set aside of net lottery receipts for school construction to 25.8 percent. Based on higher lottery sales projections, the 40 percent – with its growth – would exceed $176.5 million; the General Assembly reduced the county appropriation in school construction lottery funds to $113.7 million.

A special provision allows counties to authorize their local school administrative units to use all or part of the remaining county school construction lottery funds for classroom teachers (current statutory language limits these funds to school capital facility expenditures). LEAs must request use of the funds for classroom teachers, and if a county did allow lottery proceeds for classroom teachers, these funds could not supplant existing local current expense funding and would not count toward the charter school current expense allocation. The budget changes the county-by-county allocation to a straight per pupil basis.

The budget fully restored the $40 million in state-funded community mental health services and added $9 million in additional investments in local in-patient bed capacity. Community colleges will receive $33 million in new equipment investments per COPS funding.

The budget also calls for online travel companies such as Expedia.com and Hotel.com to collect and remit state and local sales and local occupancy taxes on the retail price of room rentals.

To offset state revenue declines, the budget redirects for one year the grant program funds for the scrap tire and white goods reserves to the general fund (Sec. 2.2). Direct county allocations from the scrap tire and white goods taxes continue as statutorily required. Local beer and wine revenues are fully restored.

The budget contains a contingency plan should the $519 million in enhanced federal Medicaid funding not be realized by Jan. 1, 2011 (Sec.2.3). By order of priority (first taken, last restored), the state budget director will use disaster relief funds, unclaimed lottery prize money and excess receipts realized in 2009-10, other funds' interest, and anything left in the general fund. Next in line would be a reduction in Medicaid provider rates, use of some of the $150 million in rainy day reserves, a reduction in the state's retirement contribution ($139 million), and last but not least, a 1 percent across-the-board cut to state agencies ($177.5 million).

Annexation reform among bills that fail to gain traction

One bill that generated a lot of publicity but little activity in 2010 was H524 (annexation reform). The bill, which was introduced by Rep. Bruce Goforth (Buncombe), reflected recommendations of the 2008-09 Joint Legislative Study Commission on Municipal Annexation. It passed the House in July 2009 and was referred to Senate Finance. It was re-referred to the Senate Committee on Rules, where it saw no further action.

Adjournment for the House (pictured) and Senate came at 5:33 a.m. on Saturday, July 10. (Photo by Kevin Leonard)

The House bill contained some elements of the NCACC legislative goal, including a requirement for a joint utility services plan, a three-year time limit within which services must be provided to annexed areas, a July 1 effective date for annexations, an increase in density requirements, and a requirement for a referendum in certain circumstances.

The NCACC goal sought a referendum when services are already available in the annexed area and reimbursement by the municipalities for loss of sales tax revenues. The referendum provision in H524 was a petition initiative that required at least 15 percent of the registered voters in the area to be annexed and the receiving municipality to sign a petition asking for a referendum. The bill included no provision for municipalities to reimburse counties for lost sales taxes.

Another bill that generated a lot of discussion but ultimately died was H813 (Uniform Apportionment of Tort Responsibility). This bill, which passed the House last summer, would have changed our state legal system from contributory negligence to comparative fault, thereby dramatically expanding personal injury and other tort lawsuits in North Carolina.

Currently under contributory negligence, a plaintiff who is partially at fault for his or her own injury is barred from recovery from defendants. Under the proposed legislation, a plaintiff could recover damages from a defendant even if the plaintiff caused up to 50 percent of his or her own harm. This would likely result in an increase in cases being filed against counties and related agencies, as well as an increase in insurance premiums. The bill was eventually derailed but may come back in 2011.

A Senate bill that attempted to regulate commercial dog breeders failed to advance in the House. S460 (Commercial Dog Breeder Regulation) would have required commercial dog breeders with at least 15 female dogs used for breeding and 30 puppies to register with the N.C. Department of Agriculture and to adhere to standards developed by the State Board of Agriculture.

Earlier discussions contemplated making counties responsible for inspecting commercial breeding operations. The NCACC worked with the bill sponsor to revise the bill to avoid this unfunded mandate and instead to give counties more authority to respond to complaints. In addition, breeders would be responsible for any costs incurred by counties if a county determined a breeder was in violation of the standards and the county was forced to take over the care and housing of dogs. This issue was eventually included in the long list of issues contained in the studies bill (S900).

The House and Senate each moved quickly at the end of the session to enact H80 (Ban Electronic Sweepstakes). The bill clarifies a 2006 ban on video poker machines and includes specific definitions of the types of machines used to simulate video poker that would be banned. The Senate passed the bill by a vote of 47-1 on June 22. The House concurred with Senate changes on July 7, and the bill was ratified July 8. The Association had a legislative goal in 2005-06 to support a ban of video poker.

The Legislature also amended the electronics recycling legislation that was part of the solid waste bill that passed in 2007. S887 (Amend Electronics Recycling Law) establishes a fund to provide grants to counties to help fund electronics recycling. Computer manufacturers will have to pay an annual fee of either $2,500, $7,500 or $15,000 – depending upon how strongly they recycle their own products and products from other manufacturers. The revenue generated by the fees is expected to be less than $1 million annually.