week, several significant legislative bills, which could have an impact on the
Engineering Industry, were heard in committee - with one being narrowly
approved in its first committee stop.
Bill 298, sponsored by Representative Mike Hager, was given a two hour
hearing in the Regulatory Reform Committee and eventually passed by a very
narrow 11-10 vote. This controversial bill would rollback the requirement that
NC electric utilities generate a portion of their power supply from alternative
Hager has been a critic of the original legislation (SB 3) in 2007 which he
claims subsidizes the renewable energy industry placing an additional cost on the
ratepayer. Critics of his proposal,
including many in the renewable energy business, tout the positive impact the
original legislation has made citing a RTI International study that found NC’s
clean energy and efficiency programs:
1.5 billion in project investment statewide between 2007-2012
an estimated $1.7 billion during the same time period to the gross state
product, including secondary effects
or retained 21,163 jobs
analysis of the bill can be found here.
What It Means for Engineers: Many private consulting engineering projects
resulted from the Renewable Energy Portfolio Standards enacted in SB 3. If the
rollback provisions in HB 298 are signed into law, the renewable energy sector
for engineering projects in NC would suffer as there would no longer be a REP
requirement after 2018. Other
surrounding states, like SC where they are now considering legislation modeled
after the 2007 NC law, would likely reap the benefits.
NC Could Lose Solar Lead as Neighbors
ACTION ALERT: If you are opposed to HB 298 please e-mail
your member in the NC House explaining the impact this rollback would have on
your business and the renewable energy projects you are working on. Please copy email@example.com in your e-mail
so a comprehensive summary can be compiled.
Bill 394 – Lower Tax Rates for a Stronger NC Economy.
version of tax reform is a bipartisan bill that would make fairly small changes
to the tax code, lowering the income tax to 6% (currently ranges from 6-7.75%)
and the corporate income tax to the same level (currently 6.9%). The sales tax base would be expanded to
include some services that are not now currently taxed i.e., landscaping, pest
control, event tickets, etc. A tax on
professional services is not included in this proposal. The franchise tax would
be replaced by a business privilege tax.
The Senate Finance Committee discussed the bill a day after co-chairs
Bill Rabon S-Brunswick and Bob Rucho, R-Mecklenburg, introduced bills to create
a single personal income tax bracket, which would be lowered to 4 percent over
three years, and to lower the corporate tax rate from 6.9 percent to 6 percent,
also over three years. Senate leader Phil Berger, R-Rockingham, signed on as a
primary sponsor of the bill to lower the personal income tax.
What It Means for Engineers: It is impossible to know what affect any of
these tax proposals will have on your business or on you as an individual as
much will depend on your current tax liability, the type of business you have
(Corporation, Sole Proprietor, LLC), the services that are ultimately taxed,
etc. Also, the Governor’s office has
revealed that they are developing their own tax reform proposal and the House
will have legislation as well. We will
continue to monitor this issue to ensure that the tax burden is fairly and
equitably shared and that your business interest is represented and heard in
new NC Lien Law took effect April 1. Do
you know the new requirements?
answers to these questions in Melissa Brumbach's latest blog post where she has
previously discussed the ABCs of Lien Laws for those making claims on a project
(that is, architects, engineers, contractors, subcontractors, and suppliers)
and the 123s of Lien Laws for project owners.
Now, time to learn some new tricks:
enter, the Lien Agent. Read More Here.
Will NC Lien Law Delay Construction
Carolina’s new construction lien law went into effect on Monday, and it changes
many of the rules required before a construction project can start. Read More Here.
Bills Scheduled for Hearing this Week
(subject to change)
SB 547 – (Hunt) – Energy Savings
Contracting Amendments – Commerce with referral to Finance if approved. Read
SB 32 – (Hartsell) – Periodic Review
and Expiration of Rules – Program Evaluation – Read More Here.
HB 222 – (Moffitt) – Buncombe
County/Use Design Build Methods – Engrossed in the House. Scheduled for Senate
Local Government – Read More Here.
SB 677 – (Rabon, Rucho) – Corporate
Income Tax Reduction and Reform – First hearing, Senate Finance. Read More Here.
SB 163 – (Jackson) – Protect
Landowner’s Water Rights – First Hearing, Senate
Agriculture/Environment/Natural Resources – Read More Here.
HB 488 – (Moffitt) – Regionalization
of Public Utilities – First Hearing, House Finance – Read More Here.
HB 301 – (Arp) – Clarifying Changes –
Engineers and Surveyors Laws – Favorable report Regulatory Reform and Referred
to Finance. Read More Here.
HB 476 – (Hager) – Rewrite Underground
Damage Prevention Act – First Hearing, House Committee on Public Utilities –
Read More Here.
In other News:
McCrory Wants Nonprofit to Lead
Pat McCrory proposed Monday the creation of a private nonprofit corporation to
spearhead North Carolina's economic development and tourism efforts that he
says will make the state become more competitive in the economic development
game with other states. Read More Here.
Carolina environmental agencies are renewing daily air quality forecasts for
ozone pollution in the state's metropolitan areas. The state Department of
Environment and Natural Resources says the ozone season began Monday. Air
quality has been good so far this year due to cool, wet weather. State and
local air quality programs issue air quality forecasts for ozone from April
through October in the Asheville, Charlotte, Fayetteville, Hickory, Greensboro,
Raleigh and Rocky Mount areas. Daily air quality forecasts focus on the
pollutant likely to reach the highest level on a given day, which could be
ozone or particle pollution. The forecasts are color-coded. Green means good
air quality, yellow means moderate quality, orange indicates the air is
unhealthy for sensitive groups, and red warns the air is unhealthy for
everyone.(THE ASSOCIATED PRESS, 4/01/13).
governments are on the defensive, fighting to keep prized assets and local
control against a legislature that appears intent on taking them. Three cities
– Charlotte, Asheville and Raleigh – face the loss of signature assets. Senate
bills would redraw school board districts in Wake and Guilford counties and
change the way members in each are elected. "It has been an amazing array
of bills that add up to more restrictions on cities and on urban counties to
govern themselves," said Ferrel Guillory, a political analyst at UNC
Chapel Hill. Despite having a governor in Republican Pat McCrory who was the
longtime mayor of the state's largest city, some GOP members are openly wary of
cities. "There is a definite feeling that cities have too much power and
want to control everything," said Sen. Tom Apodaca, R-Henderson.
"Cities are getting too big and too powerful. We have to look after
tensions have been marked by three battles:
would transfer control of Charlotte Douglas International Airport – the world's
sixth busiest based on takeoffs and landings – from the city to an independent,
regional authority. Sen. Bob Rucho, a Matthew Republican, says city officials
want control "for their personal agenda rather than what is best for the
economic future of airport, the city and the region."
Senate negated a lease of the former Dorothea Dix hospital property to the city
of Raleigh, which plans a park. The bill would require the state to get fair
market value. The lease had been approved in December under former Democratic
Gov. Beverly Perdue. The measure, now in the House, sparked tense debate. At a
hearing, Capitol Broadcasting president and CEO Jim Goodmon said nobody would
trust doing business with the state if it breaks the lease.
long-anticipated bill filed last week would put Asheville's water system under
control of a Metropolitan Sewerage District, without compensating the city.
of other bills would affect cities. House Bill 150, for example, would limit
their ability to make homebuilders adhere to design standards. House Bill 79
calls for a constitutional amendment eliminating extraterritorial jurisdiction,
a tool that helps cities control development on their borders. Tax reform bills
would end revenue sources such as the franchise and business privilege license
taxes. That would cost cities $320 million, according to the N.C. League of
Municipalities, though bill supporters say it would be balanced by broadening
the sales tax base. House Bill 252 would prevent Asheville from using part of
its water utility revenues for street repairs that result from installing
underground water lines.
these follow last year's major changes in North Carolina's annexation laws that
made it harder for cities to grow through annexation. "The legislature has
created a threatening environment for cities, forcing cities to legitimize and
justify their role in North Carolina and its economy," said Esther
Manheimer, vice mayor of Asheville and a former legislative attorney.
"Past legislatures have understood the role of cities in the overall
health of the state, and that was never questioned." In the legislative
auditorium last week, public officials from around the state gathered for Town
Hall Day, organized by the N.C. League of Municipalities. After listening to
Republican Rep. Ruth Samuelson of Charlotte outline issues, councilman Tony
Stimatz of Elizabeth City rose. "The impression is (legislators) don't
want to let us do our jobs," he said. "You're identifying a genuine
tension in our philosophy," Samuelson replied. "On one hand we
believe in local government. On the other hand we might be more sensitive to
over-reach(ing) at the local level." House Speaker Thom Tillis says the
tensions with cities reflect philosophical differences. "A part of the
conflict is a different world view of the role of government," he said.
"We're putting more power in the hands of the individual property
owner."(Jim Morrill, THE CHARLOTTE OBSERVER, 3/31/13).
plan to rollback requirements that North Carolina's electric utilities generate
a portion of their power supply from alternative energy sources has cleared a
House committee after a debate that saw two of the chamber's more powerful
Republicans take different sides of the issue. Rep. Mike Hager, R-Rutherford,
the bill's sponsor, said dropping what is known as the renewable energy
portfolio will protect consumers and taxpayers, who are footing the bill for
the alternative energy industry with subsidies. Rep. Ruth Samuelson,
R-Mecklenburg, said the alternative energy industry is bringing jobs and
improving the tax base in rural areas of the state. She dismissed the idea of
subsidies in a market already controlled by regulated monopolies and state
legislation comes six years after North Carolina lawmakers approved the
renewable energy requirements. The first of those requirements went into effect
in 2012, with power companies required to generate 3 percent of their supply
from renewable energy sources and energy efficiency savings. By 2021, the
requirements would reach 12.5 percent of the supply. Hager's bill would scale
the renewable requirements back to 6 percent, but environmental groups say it
essentially caps alternative usage at its current level by redefining what the
power companies are allowed to consider.
of the House Commerce Committee heard from a variety of solar energy sellers
and developers, green energy advocates and farmers who warned repeal of the
requirements would damage a burgeoning industry in the state. "We will
grow. The question is whether we grow in North Carolina," said Benjamin
Schneider of PowerSecure, a Wake Forest energy consulting and solar firm. Tom
Butler, a Harnett County hog farmer, said the legislation could mean an end to
a hog waste-to-energy project that has been being developed at his farm for the
last four years.
handful of speakers from conservative advocacy groups said economic gains cited
by supporters of the renewable energy requirements have come on the backs of
ratepayers. "The ratepayer was left in the cold. The person who had to pay
the bill was never at the table," said Dallas Woodhouse of Americans for
Prosperity. As it is currently assigned, the bill must be approved by three
other House committees before a floor vote. (Scott Mooneyham, THE INSIDER,
NC House Subcommittee Amends, Approves
Bill to Eliminate Green-Energy Rules
N.C. House subcommittee narrowly approved Rep. Mike Hager’s bill that would
eliminate the state’s renewable-energy requirements, referring it to full
Commerce and Jobs Committee. Read More Here.
Senate Finance Committee continued to look at tax reform on Wednesday, hearing
an explanation of a bipartisan, comprehensive plan that would lower income tax
rates and expand the sales tax base to include some services not currently
taxed. Sen. Dan Clodfelter, D-Mecklenburg, one of the bill's sponsors, said the
plan is intended as a starting point for debate. "We are amenable to all
good ideas," Clodfelter said. The legislation touches on nearly every
aspect of the state's taxing structure. It would replace the current three
personal income tax brackets with a single, 6-percent rate, while lowering the
corporate income tax rate to 6 percent for all businesses. Currently, the top
personal income tax rate is 7.75 percent, and the corporate tax rate is 6.9
tax deductions would be eliminated, and the definition of state income would be
tied to the federal adjusted gross income. It also would lower the state sales
tax rate from 4.75 percent to 4.5 percent, while expanding the base to include
some services -- including things like landscaping, pest control and event
ticket sales -- not currently taxed. Like legislation sponsored by Sen. Andrew
Brock and already presented to the committee, state and local privilege license
taxes would be eliminated and changes would be made to the state's franchise
tax. The local government's money would be made up by distributing some of the
new franchise tax -- called a business privilege tax -- to cities and counties.
Bill Rabon, R-Brunswick, asked if the bill sponsors had any plans to lower
income taxes further over time. Clodfelter responded that they couldn't make
the numbers work. The plan is largely revenue neutral, meaning it would neither
lower or increase the amount of tax revenue generated. Sen. Fletcher Hartsell,
R-Cabarrus, another of the bill's sponsors, said he believed the bill would
improve economic activity in the state simply by simplifying the tax code. One
critic spoke up at the Wednesday meeting, where no votes were taken. Alexandra
Sirota of the N.C. Budget and Tax Center said her analysis showed the bill
resulting in a slight tax increase for the bottom 80 percent of taxpayers and
decrease for the wealthiest 1 percent of taxpayers. She said the elimination of
a progressive income tax would erode over time the ability to pay for schools
and health care.
committee discussed the legislation a day after co-chairs Rabon and Bob Rucho,
R-Mecklenburg, introduced bills to create a single personal income tax bracket,
which would be lowered to 4 percent over three years, and to lower the
corporate tax rate from 6.9 percent to 6 percent, also over three years. Senate
leader Phil Berger, R-Rockingham, signed on as a primary sponsor of the bill to
lower the personal income tax.(Scott Mooneyham, THE INSIDER, 4/04/13).
Next for NC – Elimination of the
— With a welter of tax reform bills already introduced in the General Assembly,
and more to come, one proposal by Mocksville Republican Andrew Brock to
eliminate the state’s franchise tax is likely to get a hearing. Read More Here.
new Senate bill would strip away a number of environmental regulations. SB 612
would, among other things, prohibit cities and counties from enacting
ordinances that are more stringent than state or federal regulations, eliminate
riparian buffer protections that prohibit development on private property along
the Neuse River and the Tar-Pamlico River basins, and fast-track some
stormwater management system permits. It would also extend water and air
quality permits from eight years to 10 years, and allow third parties to
contest state regulators' decisions. The primary sponsors are Sen. Harry Brown
of Jacksonville, Sen. Brent Jackson of Autryville, and Sen. Andrew Brock of
Davie County.(Dome, THE NEWS & OBSERVER, 4/05/13).
House has approved a bill stripping the city of Asheville of its ability to use
up to 5 percent of water revenues each year for street and sidewalk
improvements related to water projects. But the modified version of the measure
will allow the city to use $3.65 million in such revenues for 11 projects
already in the pipeline. The bill, sponsored by Republican Reps. Tim Moffitt
and Nathan Ramsey of Buncombe County and GOP Rep. Chuck McGrady of Henderson
County, passed the House 74-40 almost entirely along party lines. The measure
now goes to the Senate for consideration. City planners estimate the
legislation will cost the city about $1.8 million a year in lost revenues and
contribute to a budget deficit in the coming fiscal year estimated at nearly $6
million. Council members and staff blame a raft of new state laws pushed by
Republicans, including a bill introduced last month that would hand the city
water system over to the Buncombe County Metropolitan Sewerage District.
"I think we're experiencing the most radical shift in state policies that
I've seen in 30 years here," Councilman Cecil Bothwell said. "If they
pass the bills currently submitted, they are going to do serious harm to
Asheville and other cities across the state. "I think the game plan is to
force city councils to cut services or raise taxes, and then they will run
candidates against us blaming us for doing that." Ramsey said the intent
of bill approved by the House last week was to prevent the city from diverting
water system revenues for other uses. "We're reinvesting the water revenue
back in the water system," he said. "That's good policy."(Clarke
Morrison, ASHEVILLE CITIZEN-TIMES, 4/04/13).
Charlotte Mayor Sees Inevitable CLT
Foxx started his first day on the job since declaring he won’t seek re-election
by attending a meeting on transit projects. That seemed fitting, since the
Charlotte mayor is, according to insiders, being vetted as one of the candidates
for transportation secretary in the Obama administration. Read More Here.
Gaston Regional Chamber Steps Up Push
For Garden Parkway
Gaston Regional Chamber has hired a lobbyist and public-relations firm to help
it make sure the Garden Parkway toll road will be built. Read More Here.
NC Construction Jobs Trending Upward
Carolina's construction industry added 1,000 jobs in January and 600 more in
February, according to the Associated General Contractors of America. Read More
Officials Make It Clear I-77 Widening
Will Happen: With toll lanes
meeting after meeting in recent months, state and local leaders have said plans
are moving forward to widen I-77 north of Charlotte in the next few years by
adding toll lanes. Just last week, state House Speaker Thom Tillis
(R-Cornelius) told toll-lane opponents at the state capitol that the state’s
plan to hire a private company to build and operate high-occupancy toll lanes
is happening, and it’s the best option for widening the road soon. Read More Here.
Berger On McCrory’s DOT Ideas: I’m Keenly Interested
ran a fairly short Q&A with Senate President Pro Tem Phil Berger this
weekend. I left out a whole section on education reform, which I’ll deal with
in a separate story, probably this coming weekend.
was also this, when I asked Sen. Berger what he knows about Gov. Pat McCrory’s
hint last week that something big is coming on transportation funding: Read
NC Can’t Go Toe to Toe with East Coast
into his presentation on “The Future of NC Ports”—the title of the latest
community conversation hosted by the Cape Fear Economic Development
Council—Jeff Miles, acting executive director of the N.C. State Ports
Authority, put into words the authority’s approach to competing with other East
Coast ports. Read More Here.
Governor Backs Eliminating Toll Road
(AP) — Gov. Pat McCrory’s administration supports a bill to eliminate a mandate
on North Carolina transportation officials to build toll-road projects in
Gaston County, the northern Outer Banks and near Wilmington. Read More Here.