When a Local Government Purchases Property at a Tax Foreclosure (Part II)

Tax fans, I know you’ve been eagerly anticipating the sequel to my last post, which ended in a thrilling cliff-hanger: What must we do with sale proceeds and outstanding taxes after a local government sells property it purchased at a tax foreclosure sale?

Your wait is over! Read on to learn the stunning conclusion . . . Read more »

Trial Court Review of Closed Session Minutes

A North Carolina local school board renews its contract with a superintendent for an additional four years. Seven months later, the board meets in closed session to discuss a personnel matter. Immediately after the closed session, the superintendent resigns and the board approves a $200,000 severance payment. The newspaper requests a copy of the closed session minutes. The board responds that the minutes are confidential personnel records and their release would frustrate the purpose of the closed session. The newspaper files a lawsuit to compel the release of unredacted minutes relating to the superintendent’s employment. The board files a motion to dismiss the lawsuit arguing that the records are not subject to disclosure, so the complaint fails to state a claim for which relief can be granted.

Must the trial court take the board’s word for it that the minutes are entirely confidential, and grant the motion to dismiss? Or should the trial court review the records to determine whether records may lawfully be withheld? The North Carolina Court of Appeals has held that the trial court must review the records. Read more »

Public Health Law Update: Back-to-School Edition

UPDATE: House Bill 13, described below in the section titled Health Assessments, was enacted on August 18, 2015 (S.L. 2015-222). The legislation requires requires health assessments for all children enrolling in the state’s public schools. Under former law, only children entering kindergarten were required to provide a health assessment. More information and a copy of the health assessment form are available from the North Carolina Division of Public Health. 

For many families in North Carolina, the arrival of August means it’s time to start preparing to send children back to school. In addition to shopping for school supplies and new sneakers, it’s a good time to make sure children’s school health needs are in order. This post reviews some new immunization requirements that took effect on July 1, and provides a refresher and update on kindergarten health assessments, rescue medications in schools, and that ever-present childhood nuisance – head lice. Read more »

Sign Litigation: A Brief Analysis of Reed v. Town of Gilbert

Temporary yard signs are springing up all around town. Town council wants to reduce the clutter, but also wants to respect the free speech rights of the community. Council is considering new rules that will allow campaign signs during election season, event signs within a day of the event, and ideological signs anytime. It seems like a reasonable balance—allowing the signs but limiting them to a relevant time-frame. Can the town’s regulations distinguish among signs this way?

A recent U.S. Supreme Court decision says no. Such distinctions are unconstitutional content-based regulation of speech.

To be clear, every sign ordinance distinguishes among signs. Ordinances commonly distinguish between locations (commercial property, residential property, public property, etc.), between types of signs (free-standing, wall signs, electronic signs, etc.), and between messages on the signs (commercial, safety, political, etc.). Reasonable distinctions concerning location and types of signs remain permissible.

The Reed decision, though, clearly invalidated some distinctions based on the message content of signs, and it will require adjustments to many local ordinances and some state statutes. The decision, with its four separate concurring opinions, also left open several legal questions.

This blog considers the decision of Reed v. Town of Gilbert, 576 U.S. __ (2015), and its impact on local sign ordinances. Read more »

Local Government Utilities and the Equal Credit Opportunity Act—Part I: Notice Requirements

Dale Linquent is a resident of Carolina Village. He has lived in three different apartments in as many years and each time has left an outstanding utility balance on his account. This year the village board adopted a new water ordinance specifying that an applicant will not be able to open a new account with the utility if he/she owes any outstanding delinquencies on a water account. Furthermore, if an applicant has incurred a delinquency on a village water account within the past three years, he/she must either pay a deposit of $120 (which is the average amount of a residential bill for two months of service) or have an individual who has not incurred a delinquency on a village water account within the past three years co-sign on the account.

Dale moves into his fourth apartment and attempts to open a new water account. Utility Jones, the village’s utility manager, informs him that he first must pay off the $93 in delinquencies and penalties owed on his prior accounts. Mr. Jones also informs Dale that he must pay the $120 deposit or have another eligible individual co-sign on the account. Dale agrees to pay the outstanding balance of $93. He does not have the funds to also pay the deposit, though. He informs Utility Jones that he cannot come up with the money for the deposit and he cannot find anyone willing to co-sign on the account. He is thus unable to establish utility service.

Dale explains his dilemma to his buddy Ida Suue. Although not a lawyer by trade, Ida fashions herself a bit of a legal guru. She tells Dale that the city cannot effectively deny him service by making him pay a deposit or get a co-signer because that clearly violates some federal law she once read about. Dale calls the utility department the next morning and informs Utility Jones that he intends to sue the village for violating federal law. Should the village be worried?

Yes and no. Ida actually is correct that federal law applies in this situation. In fact, there are two different federal statutes that are implicated—the Equal Credit Opportunity Act (ECOA), 15 U.S.C. Sect. 1691, and the Fair Credit Reporting Act (FCRA), 15 U.S.C. Sect. 1681. Neither of these statutes prohibits the village from requiring a deposit or co-signer on Dale’s account because of the prior delinquencies, but both statutes require that the village comply with notice requirements. And the ECOA prohibits a government utility from engaging in certain other practices related to the establishment and maintenance of a utility account.

This post discusses the notice requirements of the ECOA. Future posts will address other provisions of the ECOA, as well as the notice provisions of the FCRA. Read more »

When a Local Government Purchases Property at a Tax Foreclosure (Part I)

Local governments are free to purchase property at any tax foreclosure auction, be it one of their own or one initiated by another government.  This often occurs by default when a local government enters an initial bid at the amount of taxes and costs owed on the property and no other parties offer bids.  Or it can occur intentionally when a local government wants to purchase the property being sold and successfully outbids another party.

Either way, the local government will become the owner of the property assuming that the government does not assign its bid to another party and that its bid is not topped during the upset bid period.  The local government’s ownership of the property will be governed by G.S. 105-376.

A few important points to keep in mind if a local government is the high bidder:

Read more »

Chasing Nickels and Dimes: Small Overpayments, Small Underpayments, and Tiny Tax Bills

[UPDATE 10/16/15:  S.L. 2015-266 slightly changed the rules governing overpayments.  See this blog post for more details.]

Does a tax office need to collect every penny of every tax bill? Usually the answer is yes, because GS 105-380 and -381 prohibit local governments from waiving a valid tax.  If a tax office decides not to collect part of tax, that action would be an unauthorized tax waiver in violation of the Machinery Act.

But from a practical standpoint, it doesn’t make much sense to spend scarce public resources chasing down a few nickels and dimes.  The fact that Aunt Mabel wrote “$123.45” on her tax payment check when she actually owed $123.46 in taxes probably doesn’t justify the county foreclosing on her doublewide. Likewise, the $3 in taxes owed on Uncle Ernie’s beat-up old row boat probably isn’t worth the cost of printing and mailing that bill.   Happily the Machinery Act provides local governments with the opportunity to avoid collecting Aunt Mabel’s missing penny and Uncle Ernie’s tiny tax bill. Read more »