May 2016 – MSD Modifications and Implications
In response to the recent changes in MSD legislation, NCDDA has provided a brief overview below along with an example RFP for our member communities to utilize as they begin addressing this new process. We have also provided a link to to RFPs prepared by other communities. As you move forward, please share your examples to add to our list of resources.
The North Carolina Legislative Review Commission has established a joint study committee to discuss MSD’s, specifically, the feasibility of authorizing property owners within a municipal service district to petition for removal from that municipal service district. The Committee may consider any issues relevant to this study. We learned late last week that the committee is scheduled to meet Thursday, March 31st from noon to 4:00 pm. The NCDDA Board is planning to have representatives at that meeting and has also requested to be allowed to speak on this issue. We will keep you posted. Please contact email@example.com with any questions.
September 2015 – Legislative Summary
The NCDDA has been hard at work this budget cycle to ensure that we are advocating for the needs of our members across the state. The attached budget, which was released late Monday, includes several items of importance for our members, most notably a modified historic preservation tax credit, an amendment to municipal service district legislation, and the funding of the Main Street Solutions Fund. Thank you all for your work to reach out to your legislators and share with them the needs of our downtowns throughout the state; without the widespread effort that was made, I am certain that the results would’ve been very different.
Historic Preservation Tax Credit (page 409)
This budget introduces a modified historic preservation tax credit with a base credit of 15% for income-producing rehabilitation projects with expenses of up to $10 million and 10% for income-producing rehabilitation projects with expenses of between $10 million and $20 million. Projects in a tier one or two area or on an eligible targeted investment site will be eligible for an additional 5% credit.
A credit of 15% is available to tapayers with rehabilitation expenses of more than $10,000 for non-income producing historic structures.
This is a great win for our historic buildings and downtowns throughout the state, and can certainly be attributed to the work of the NCDDA, our members and partners across the state to show the benefits of historic preservation tax credits, as well as the opportunities that still exist.
Municipal Service Districts (page 292)
If services are provided to the district by a private agency or governmental agency other than the municipality, a contract must be issued specifying the purposes for which city moneys are to be used for that service district and requiring an appropriate accounting for those moneys at the end of each fiscal year or other appropriate period.
Prior to entering into a contract, the municipality shall solicit input from residents and property owners within the district regarding the needs of the district, use a bid process to determine which private agency is best suited to achieve the needs of the district based on criteria set by the municipality, and hold a public hearing. Once the municipality determines the appropriate agency to provide services to the district, a contract of up to five years may be issued. The municipality will require an annual report, by presentation in a city council meeting and in written report regarding the needs of the service district, completed projects, and pending projects. The private agency must also seek input of the district’s property owners and residents on an annual basis.
There should be no accumulation of excess funds beyond that necessary to meet current needs, fund long-range plans and goals, and maintain a reasonable fund balance. Moneys collected shall be used only for meeting the needs of the service district, as those needs are determined by the city.
This municipal service district amendment is a significant improvement on the language that was initially introduced and subsequent versions, which would have allowed a vote of residents within MSDs to abolish the district, allowed property owners to request to opt out of the MSD, and required annual contracts (and bids) for MSD service providers. The NCDDA’s quick responses to each version of this amendment and the concerted effort made by members across the state had a tremendous role in the evolution of this amendment over the last two months.
Main Street Solutions Fund (page 285)
Provides $2 million for the Main Street Solutions Fund for the 2015-2016 fiscal year, with $1.1 million allocated for specific projects and $900,000 available for local governments throughout the state to assist planning agencies and small businesses with efforts to revitalize downtown areas.
The lesson that I think has been reinforced for many of us throughout this process is how important it is to have a relationship with our elected officials to ensure that the lines of communication remain open. I would encourage you all to reach out to your legislators to thank them for their service and their efforts to help you in your work to make your downtown a better place.
NCDDA Vice President – Government Affairs
July 9, 2015
NCDDA Review of the Proposed Municipal Service District Amendments
(As contained in House Bill 97 [H97-PCS20371-MDxfr-13] on pages 324 & 325)
Please be advised concerning an important piece of legislation that is currently moving in the N.C. Senate. We want you to be fully informed about this issue and the possible ramifications for municipal service districts (MSD’s) across the state.
If passed, this amendment would put in place the following:
• A petition signed by 15% of the registered voters in the district will trigger a referendum to consider MSD dissolution.
• If a majority votes to dissolve the district, it is eliminated.
This change will diminish the voice of commercial property owners and business owners and further complicate the existing legislation that already contains a clear and simple remedy to amend, reduce, expand or abolish an MSD for any reason, at the request of stakeholders. In the case of a request to dissolve an MSD, the municipal body (City Council) holds a public hearing, listens to stakeholders and then votes on whether to dissolve the district. Therefore, we believe this proposed amendment is unnecessary, will hurt business and will have unintended consequences.
• The MSD’s serve businesses, commercial property owners and visitors, as well as residents. While the business owners, commercial property owners and visitors are key constituents, they are generally not registered voters in the MSD’s; therefore, they would not have a voice in the dissolution process under this proposed legislation. In short, the proposed bill would only allow registered voters who reside in the district to vote on dissolution – not all of the stakeholders who are funding the district.
• There is already a process in place for stakeholder complaints including dissolution of an MSD in the legislation (Section 23, Chapter 160A-541). It is rigorous and is managed by the convening municipal bodies that create and manage the MSD’s. It does not seem to need repair.
• MSDs can only be created by local municipal bodies. It makes sense for the power to dissolve an MSD to stay with these elected officials.
A great city and region are built upon the foundation of a vibrant downtown. Most MSD’s are key to providing that core downtown, beachfront or main street. The MSD is a core economic development tool that was created by the legislature in 1973 and has worked well. There are currently more than 55 MSD’s across the state, creating value in communities large and small. One of the critical elements of MSD’s is that they can be tailored to fit the needs of any community or area. Almost every City with an MSD is directing the funds to specific programs to make their districts strong economic engines for the entire community. Therefore, we are concerned about the impact that the abolition of MSD’s might have on the strength of local economies across our state.
We ask your help in advocating for removing this proposed legislation from the budget as it will hurt small and large businesses across the entire State. We do not believe this additional legislation is necessary; in fact, we believe this legislation would have unintended consequences on not only the MSD’s, but on the local economies as well.
Read the proposed MSD changes on pages 324 and 325.
April 2, 2015
In the House, HB 152 to create a new Historic Preservation Tax Credit Program passed by an overwhelmingly majority vote in the House, 98–15, on March 26, 2015. The companion bill to HB 152 in the Senate is SB287, which was referred to the Rules Committee after the 1st reading on March 16 and re-referred to the Finance Committee on March 23. NCDDA and its members met with legislators in the Senate on March 31 as part of Downtown Legislative Day to discuss the tax credit bills. A press conference was called by the Speaker of the House, Tim Moore, Cleveland-R, to discuss the bill and can be viewed by clicking here.
March 14, 2015
The NC Senate has filed the same bill as was filed in the House to reestablish the State’s Historic Tax Credits (S287). Click here to learn more and spread the word. Action is needed by or on March 16.
March 13, 2015
How do you contact your legislator? Watch this short video slide presentation narrated by Shannon Johnson, NCDDA’s Secretary.
March 10, 2015
NCDDA is an active part of the Historic Tax Credit Coalition being led by the Cultural Resources Secretary Susan Kluttz, and as many of you know by now, H.B. 152 was filed in the House yesterday with bipartisan leadership and can be reviewed online. Please contact your house members as soon as possible to ask for support of H.B. 152 – New Historic Preservation Tax Credit. This will be one of the many topics you can discuss during your Downtown Day visit as well.
The coalition has a provided weblink to find your representative by clicking here.
February 10, 2015
Small Business Center Funding Concerns – We have learned of the recent response by the President of the NC Community College System to the NC Office of State Budget and Management to reduce the System’s expenses, and thus budget. The option of reducing expenses that causes NCDDA’s Board of Directors deep concern is the elimination of the NC Community College’s Small Business Center Network (SBCN), which would abolish Small Business Centers (SBC) statewide. We understand this accommodation was made reluctantly to provide a response to OSBM’s request and we have written a letter in response to the State Budget Director and have also sent a copy to the Governor.
News article from The Pilot: Small Business Center Article – The Pilot – January 27, 2015
As you know, the state legislature did not renew historic preservation tax credits in 2014, and the program expired on December 31. Leaders from across the state, including Governor Pat McCrory, have called on the legislature to introduce a bill to bring back the program.
As soon as possible, please visit www.historictaxcredits.org to learn more and consider signing the petition to restore Historic Preservation Tax Credits in North Carolina.
Below, NCDDA has posted an example resolution of support to use within your communities (example from Goldsboro, NC; you may need to validate in your own community). You can download the example by clicking on this link: Template Resolution for Towns Supporting North Carolina Historic Preservation Tax Credit Programs Revised.
Recent news article from Asheville: NC tax break that helped rebuild downtown up for debate
UPDATES – July 30, 2014
The Historic Preservation Tax Credits are not dead just yet. Representative Lewis introduced an amendment to SB 763 today in the House that passed. It is not to late to contact your legislators concerning the extension or restoration of the credits.
UPDATES – June 16, 2014
This week the House and Senate budget bills will go to a Conference committee and there are several important items of interest to the NCDDA membership that are listed below. We made some headway, but here is what still needs to be done. We will send more updates as soon as we learn more.
Historic Preservation Tax Credits
The Historic Preservation Tax Credits made it by amendment into the House budget.
By mid-day Tuesday, please contact your member of the NC Senate and tell him/her about the importance of the Historic Rehabilitation Tax Credits – and why it has mattered in your community. Let your Senator know that the governor’s proposal for the credits was included in the House bill, but not the Senate bill, and we need his/her help in making sure that the tax credits are included in the final budget.
Proposed Funding Cuts to Division of Community Assistance and Office of Urban Development (Fund Code 1620)
The House changed the wording to DCA funding cuts (now Rural Economic Development Division). In the last update, the cuts meant the elimination of over 9 staff positions from the budget code that includes the services of the Office of Community Planning and Main Street, Small Town Main Street and Main Street Solutions Fund Programs and may require some of the remaining positions to focus solely on CDBG activities.
The new wording (http://mobile.ncleg.net/Sessions/2013/Bills/Senate/PDF/S744v7.pdf — see 15.9(b) – page 153 of Senate Bill 744 – Seventh Edition ) allows the Secretary of Commerce total discretion in how to meet the budgetary needs vs. being forced to eliminate that number of positions.
If you receive services from these programs (Main Street and/or Community Planning), it is important that your legislative representatives, Secretary of Commerce Sharon Decker and Assistant Secretary of Commerce Dr. Patricia Mitchell understand the impact they make on your community. Please work with your Mayors and other knowledgeable elected officials to help share quantifiable outcomes with your representatives and Commerce Officials. You can contact them at: firstname.lastname@example.org or email@example.com.
Main Street Solutions Fund
Many of us working in Main Street and other qualifying Solutions Fund communities were alarmed by a provision in the Senate (and now House) budgets that transfers unencumbered cash balances from several Commerce grant funds, including the Main Street Solutions Fund, to the Commerce General Fund. There does appear to be another provision in the budgets that provides $1,000,000 to the Solutions Fund for the 2014-2015 fiscal year from another source, which is a net increase of over $500,000.
While there does not appear to be any opposition at this time, it will not hurt to share impacts of the Main Street Solutions Fund with your representatives.
Film Tax Credits Update
It appears the tax credit will sunset and that the House and Senate will work on some compromise to retain a grant provision, but it will be far less than what was hoped for.
Remain in contact with your Senate or House member to encourage them to support the Film Industry in North Carolina.
UPDATES – JUNE 4, 2014:
The Governor’s budget proposal on pages 107 – 112 in Senate Bill 842 included provisions for a revised Historic Tax Credit Program. However, the Senate version of the State budget does not include the tax credits. The House of Representatives will be taking action soon and need to hear from you concerning the Governor’s proposal for the new credits being included in the budget.
NCDDA is monitoring legislation with the assistance of Randolph Cloud & Associates, a private firm representing organizations in Raleigh, such as the North Carolina Chapter of the American Planning Association. Based upon the results of the NCDDA membership legislative survey completed last year and guidance from the Board, Randolph Cloud & Associates is keeping track of the NCDDA legislative agenda/priorities and providing daily information with more focused weekly updates on any bills that may be of interest to our organization. The Board is currently preparing for this year’s short session with the NC General Assembly.
As our top priority in 2014, NCDDA’s membership and many of our partners are working together to support the extension of North Carolina’s Historic Tax Credit Programs. North Carolina’s Historic Tax Credit Program has fostered investments of greater than $1.6B in private investment, supported an average of $124.5M in State Gross Domestic Product and created/retained almost 2,200 jobs per year impacting all 100 counties of North Carolina.
Please join NCDDA and our partners in continuing to support economic development in our all of our communities through the NC Historic Tax Credit Programs.
Learn More about supporting the NC Historic Tax Credit Programs:
See Last Year’s Agenda below:
Please send the Board additional thoughts and concerns you may have to: firstname.lastname@example.org.