NCACC
Legislative Update
North Carolina
Association of County
Clerks Conference
September 10, 2020
COVID-19 Response
& 2020 Legislative Session
CARES Act &
Coronavirus Relief Fund
Budget & Fiscal Impact
Other Updates
2020 Short Session
Timeline & Schedule
•
Late March: House Select Committees begin to meet to discuss COVID relief.
•
April 28 – May 2: Official start of 2020 Short Session; COVID-19 only
•
May 2 – May 18: General Assembly took two weeks off. House COVID-19
work groups resume.
•
May 18: 2020 Short session resumes in earnest
•
June 26: Adjourned shortly after 3:00am to return with committee meetings
and potential veto override sessions until Sept. 2
•
July 8: Reconvened session for one day to consider veto overrides.
•
September 2: Reconvened short session to spend federal relief funds;
adjourned Sine Die on September 3
House Select Committee on COVID-19
Economic Support • Unemployment Benefits • Small Business Loans • NC Retail Merchants and Hospitality Associations • NC Chamber • Tax Extensions Health Care • NC Health Care Association & Medical Society • NC Local Health Directors and Nurses Associations • Child Care Providers • EMS • Behavioral Health • Telemedicine Continuity of State Operations • State Agencies • Local Government Associations • Statutory and Regulatory Deadline Modifications Education • Testing Waivers • University and Community College Systems • Graduation Requirements; Licensure 3COVID-19 Response
& 2020 Legislative Session
Legislature Reconvened Short Session on April 28, 2020
COVID-19 Response
& 2020 Legislative Session
SL 2020-3
COVID-19
Recovery Act
SL 2020-4
2020 COVID-19
Recovery Act
Regulatory
Fiscal
5COVID-19 Response
& 2020 Legislative Session
SB 704 COVID-19 Recovery Act (S.L. 2020-3)
Delays certain DMV credentials (vehicle inspections and renewals) for a one-time, five-month extension
Reinstates authority for Special Obligation Bonds used as a borrowing tool for large capital projects
Clarifies authority for local boards to conduct remote meetings
Delays effective date of GS Chapter 160D, which reorganizes the state’s land use and planning statutes, by 8 months to 8/1/2021 (repealed by SL 2020-25; Compliance required July 1, 2021)
Extends to 3/1/2021 local government criminal ordinance reporting requirement
Makes temporary changes to retiree separation requirement and earnings cap for retirees to return
Requires certain local government financial reporting to LGC
CARES Act
Coronavirus Relief Fund (CRF)
Direct County Allocation in SL 2020-4 [*
Also see SL 2020-80
]
State of NC received approx. $4 billion in CRF funds from federal CARES Act Local Governments with population >500,000 received direct allocation (approx. $481,000 total) SL 2020‐4 allocates $150 million to the 97 counties that did not receive direct CRF allocation from U.S. Treasury. Minimum $250,000 per county, with remaining funds distributed per capita SL 2020‐3 also places separate $150 million in Local Government Reserve Fund for local governments IF federal government amends the CARES Act to allow revenue replacement 7
COVID-19 Response
& 2020 Legislative Session
Coronavirus Relief Fund (CRF)Direct County Allocation
SL 2020-3 (HOUSE BILL 1043)
Allocates $150 million to the 97 counties that did not receive direct CRF funding from the CARES Act. All counties will receive a base allocation of $250,000, with the remaining funds distributed on a per capita basis.
Authorizes counties, in their discretion, to allocate a portion of their allotment to municipalities within the county, provided the transfer meets the requirements of the CARES Act and corresponding U.S. Treasury guidance.
Requires quarterly reporting to OSBM, beginning Oct. 1, 2020, on the use of funds.
Unspent and misspent funds are subject to federal recoupment. Counties and municipalities are subject to clawback or other state measures for misuse. “Any local government officer, official, or employee who violates this section shall be subject to a civil action by the State and held personally liable to reimburse the State.”
Also places $150 million in Reserve Fund to be appropriated to local governments IF local governments experience a revenue shortfall from COVID-19 AND the federal government amends the CARES Act to allow CRF money to be spent on revenue replacement.
Establishes a Pandemic Recovery Office to oversee and coordinate reporting and accounting of CRF funding. It will be extremely important that any funding counties receive is expended according to the requirements of the CARES Act and corresponding US Treasury guidance. Unspent or misspent funds are subject to federal recoupment after December 30, 2020.
See Section 2.3 and Section 3.3(2) in House Bill 1043
N.C. Pandemic Recovery Office (NC PRO) [email protected] Website with FAQs Required county plans
CARES Act
Coronavirus Relief Fund
CRF Eligible Expenditures:
1. necessary expenditures incurred due to the public health emergency of COVID-19 2. were not accounted for in the budget most recently approved as of March 27, 2020 (the date of enactment of the CARES Act); and
3. were incurred between March 1, 2020, and December 30, 2020.
• US Treasury and NC PRO have released additional guidance over past months including coordination with FEMA-PA; other CARES Act funding
CARES Act
Provider Relief Fund Elementary & Secondary School Emergency Relief Fund Higher Education Emergency Relief Fund
CDBG Grants (State and Locals)
Child Care and Development Block Grants Community Services Block Grants
Small Business Loans and Grants
State of NC also received in
federal funding
Federal and State Advocacy
11COVID-19 Response
& 2020 Legislative Session
Legislature Reconvened Short Session on May 18, 2020
Additional
Legislation
H1023/S.L. 2020-80 Coronavirus
Relief Fund/Additions & Revisions
• Appropriates remaining $150M in CRF to counties previously held in reserve underH1043/S.L. 2020-3
Requirement to share 25% of county full share with municipalities Amounts previously shared count toward 25% threshold
County to determine amount and method of allocation to municipalities
Municipalities must have a plan in place to spend funds by September 1, 2020 or send funds back to county
County may use or redistribute returned funds
Funds allocated are subject to recoupment by the U.S. Treasury if the municipality does not spend on eligible expenses, and municipalities are liable to the State for misuse.
Also appropriates $200+ million in CRF funds for health care, NC DPI, NC Dept. of Commerce; for FEMA match; hospital grants
Mini-Budgets of Note
•
S816/S.L. 2020-64 CC Funds/CIHS Funds/CR Funds and Offsets
•
S808/S.L. 2020-88 Medicaid Funding Act
•
S836/S.L. 2020-32 State Operations/Increase Federal Funds Use
•
H1187/S.L. 2020-15 Raise the Age Funding
•
H1087/S.L. 2020-79 Water/Wastewater Enterprise Reform
•
H1071/S.L. 2020-71 Funds to DPI for ADM Growth
Policy Bills That Became Law
•
S315/S.L. 2020-18 NC Farm Act of 2019-20
•
H1169/S.L. 2020-17 Bipartisan Elections Act of 2020
•
H77/S.L. 2020-91 DOT 2020-2021 FY Budget Governance
•
H593/S.L. 2020-83 JCPC/Detention/CAA and Other Fees
•
H873/S.L. 2020-61 System Development Fee/ADU Sewer Permit
•
S212/S.L. 2020-81 Capital Appropriations/R&R/DIT/Cybersecurity
Re-Opening Legislation
•
H536 Temp Outdoor Restaurants for Outdoor Seating
•
H594 Temp Open Gyms/Health Clubs/Fitness Centers
•
S599 Open Skating Rinks/Bowling Alleys
•
H258 Open Amusement Parks/Arcades/Venues
•
H686 Freedom to Celebrate the 4th of July
•
H806 Open Exercise and Fitness Facilities
General Assembly attempted to override these vetoes during their July 8
one-day session. However, none received necessary 3/5 majority vote.
COVID-19 Response
& 2020 Legislative Session
Legislature Reconvened Short Session on September 2, 2020
19H1105/S.L. 2020-97 Coronavirus
Relief Act 3.0
Appropriates about $1 billion in unspent federal CARES Act and State general funds:
$30M – to expand rural broadband access for homes and businesses $10M – to improve student and teacher internet connectivity
$20M – to K-12 public schools to purchase additional PPE $5M – to community colleges to purchase additional PPE
$5M – to community colleges to purchase equipment for healthcare and first responder workforce training programs
$5M – to the State Board of Elections (SBE) for the 2020 general election, including the directive those funds be used as follows:
o $1M to provide $10,000 to each county to supplement county funds for election day voting.
$2.5M to counties to increase pay for election day workers by $100 for each worker on the day of the general election.
$1M to SBE to recruit election day workers through an advertising campaign.
H1105/S.L. 2020-97 Coronavirus
Relief Act 3.0
Childcare and Remote Learning Provisions:
$19.84M - to facilitate remote learning opportunities during the COVID-19 pandemic.
o County and municipal parks and recreation departments, as well as other community-based organizations (CBOs) such as YMCAs, YWCAs, and Boys and Girls Clubs, may apply for grant funds.
o Eases childcare facility regulations to allow CBOs to operate remote learning facilities during the time of a declared state of emergency.
• The operators of these facilities must comply with the sanitation requirements for licensed childcare facilities.
$35M – for grants to licensed childcare providers for remote learning opportunities for children.
$8M – for assistance payments to parents using remote learning opportunities for
H1105/S.L. 2020-97 Coronavirus
Relief Act 3.0
Makes various appropriations from the State’s General Fund related to disaster relief:
$24M – for the newly established Earthquake Disaster Relief Fund $27.8M – to the Hurricane Florence Disaster Relief Fund
$16.7M – to the State Emergency Response and Disaster Relief Fund for: o $10.4M for relief associated with Hurricane Matthew
o $2.8M for relief associated with Hurricane Dorian o $3.5M for relief associated with Hurricane Isaias
• Including associated tornados
Budget
& Fiscal
Impact
•
Airports
•
Animal Control
•
Planning and Zoning
•
Parks and Recreation
•
Inspections
•
Tax Assessment and
Collection
•
Public Safety
•
Libraries
•
Art Programs
•
Fire Protection
•
Economic Development
•
Hospitals
•
Water & Sewer
•
Solid Waste
County
Programs
and
Services
•
Public Health
•
Social Services
•
Public Schools
•
Emergency
Services
•
Elections
•
County Jails
•
Court Facilities
•
Sheriff’s Dept.
•
Register of Deeds
Uncertain Economic Impact
Property Tax
Local Sales Tax
Vehicle
Utility Revenue
Fiscal Impact: Local governments have seen a local sales tax shortfall of almost $80 million, compared to the same period of three months in 2019. Reflecting retail sales in March, April, and May, distributions to local governments were down -7% ($22.7 million), -13% ($42 million), and -4% ($13 million) respectively. Early figures from June sales, which coincide with the state moving to its Phase 2 reopening plan and the expenditure of some CARES Act and other federal stimulus funds, show an 11% increase statewide in local sales tax distributions.
Fiscal Impact: Counties received $125 million statewide last fiscal year in occupancy taxes on rental accommodations. Fiscal Impact: A decline in property tax revenues
of -1% statewide would equal a loss statewide of $74 million over the previous year. A -2% decline equals a $149 million loss and a -5% drop is a $372 million loss.
With new property tax rates now adopted, 15 counties had a tax rate change in 2020-21, with 4 counties increasing and 11 counties decreasing their rate. The average property tax rate is now .6760, compared to .6785 last year, a 0.35% decrease statewide. Fewer counties adjusted their property tax rate this year in the midst of a public health pandemic, when compared to recent years.
Fiscal Impact: Counties received $350 million statewide last fiscal year in utility revenues including water, sewer, electric, gas, and stormwater fees.
How are counties responding to budget uncertainty?
Conservatively Budgeting 2020-21 Revenues & Expenditures
(Projected Budget Impacts Range from -5% to -20%)
• Workforce Impacts Fund Balance Appropriations
Occupancy Tax
Fiscal Impact: Figures from the N.C. Department of Revenue show collections were down 7% in March, 9% in April, 17% in May, and down 3% statewide in June before beginning to return to positive figures. July vehicle property tax collection figures were up 7% statewide.
Other
Updates
Opioid Litigation Update
Sept - Oct Goals Referred to Steering Committee Steering Comms. Consider & Recommend Goals Referred to Legislative Goals Comm. Legis. Goals Comm. Considers & RecommendsGoals Referred to Board of Directors
Board Considers & Approves Goals Goals Referred to Member County Boards New Boards Take Office, Consider & Select Delegates Delegates Approve Goals at Legislative Goals Conference Oct – Nov July - Sept Commissioners & Boards Submit Proposed Goals
