This Week

After passing the State’s biennial budget into law last week, the legislature turned its focus towards adjournment. The Senate unveiled an adjournment resolution which would adjourn the session on Tuesday, September 29th and have lawmakers return April 25th, a few weeks earlier than normal for the short session. Until now, several pieces of legislation that either one or both chambers desire, both popular and controversial, have been stalled as part of budget posturing. Since the budget is now law, the legislative floodgates opened and bills that have been dormant for months were reanimated. Lawmakers are utilizing a procedure to completely change the content of a bill, creating new Proposed Committee Substitutes (PCS), which may have no resemblance to the original bill. This has been used occasionally this session as it has in past sessions, but is now rampant (ex: an IT bill yesterday was transformed into a bill to help the Belhaven hospital bypass CON). Several of the bills lawmakers intend to pass before session’s end are constitutionally, three-day bills. This means lawmakers will either have to push adjournment back a day or abandon those pieces of legislation.
N.C. lawmakers soon plan to adjourn session – Citizen-Times
Major bills squeezed into session end – N&O
End of session finally in sight for lawmakers – N&O

The Senate began working on the $2 Billion borrowing proposal Monday afternoon. House Bill 943, entitled the Connect NC Bond Act of 2015, will go before the voters for their approval on the 2016 primary election ballot as the Governor requested. That means the bonds would be put on the ballot in March of 2016 if lawmakers are successful in moving the State’s primaries from May to March. If the bonds are approved by the voters, the proceeds will support infrastructure projects for the UNC system, the Community College system, and several other new projects or renovations for existing facilities in State government. Governor McCrory had originally proposed a larger bond package which was closer to $3 Billion, and included money for transportation projects. The legislature however cites their action in the budget ending the fund transfer from the Highway Trust Fund to the general fund, freeing an additional $216 Million each year towards road construction as the reason for not including transportation in the proposal. The Senate passed the bill Wednesday 41-2 and has been calendared in the House for a concurrence vote Monday evening.

Proposed $2 billion bond vote moved to March, more UNC projects added – N&O
Senate gives strong backing to $2 billion bond proposal – WNCN

There are several bills that traditionally pass every year. Typically, there is a technical corrections bill as well as a budget technical corrections bill. Both are intended, as their title proclaims, to make “technical” changes to existing statutes, new statutes, and the budget. More often than not however, these bills do not strictly adhere to their purpose and contain a number of policy matters as well. Both of these bills are still being developed and have not been made public. Another perennial bill is the appointments bill which was unveiled Tuesday in House Bill 272. Both the Speaker of the House and the President Pro-Tem of the Senate have statutory authority to make appointments to various Boards and Commissions and this bill fills any vacancies that may turnover.

The House passed Senate Bill 513, The North Carolina Farm Act of 2015 on its second reading Thursday afternoon. The bill makes several noncontroversial changes to benefit agriculture, North Carolina’s largest industry. However, in a sudden Rules Committee which met on the House floor around the Chairman’s desk, the Committee voted to remove several provisions from the bill. The first would have transferred the oversight of deer farming from the Wildlife Resources Commission to the Department of Agriculture and Consumer Services. The second would have studied the State’s renewable energy portfolio standards (REPS). And a third removed a proposed definition of a “sustainable farm” which many viewed as too vague. The bill then came back before the House and received no debate on its second reading, passing 86-13 with full debate expected on Monday.
NC lawmakers move with caution on deer, farm bill – N&O

The House and Senate passed the Conference Report for House Bill 373 Thursday, which is titled simply, Elections. The bill moves all of the State’s primary elections up from May to March 15th. The purpose of this provision is to give North Carolina a more influential voice in the process of selecting presidential nominees by holding an earlier, winner-take-all primary for presidential candidates. In most prior elections the North Carolina primary has been irrelevant, with the presidential nominations already secured. The provision also moves the filing period for candidates from February to the first week of December. This means that newly elected legislators seeking reelection will have to file less than a year into their two year term. A new section of the bill would allow “affiliated party committees”, the State’s House and Senate Republican and Democratic caucuses, to operate in the same fashion as the statewide Republican and Democratic parties idependently, as their own entities. The North Carolina Republican Party actively campaigned against this change. The bill handily passed the Senate 30-13, but the vote was much closer in the House, 52-49, dividing both House Republicans and Democrats on the issue. It now awaits action from the Governor.
NC GOP divided by bill to let leadership set up own fundraising means – WRAL
General Assembly votes to move N.C. presidential primary to March in 2016 – Winston-Salem Journal

The Senate Rules Committee unveiled a PCS to House Bill 8, entitled Court of Appeals Election Modifications. The bill would restore partisan judicial labels next to the names of candidates for the North Carolina Court of Appeals. Currently a candidate’s party affiliation is absent on the ballot and all candidates for a seat on the Court run in a collective primary to determine two candidates for the general election. Opponents argue that partisan politics should remain absent from judicial elections. However, proponents argue that this change would make the process more transparent as political parties currently endorse judicial candidates and include their names on material they distribute at the polls. Under this bill, all candidates will still participate in a collective primary, meaning that two candidates of the same party could still face off in the general election.
NC Senate looks to add party affiliations in judicial races – N&O

The House revived Senate Bill 605, Various Changes to Revenue Laws on Wednesday. The bill makes various tax changes, including a provision to allow Counties to boost local education funding by raising local sales taxes up to the level currently allowed by law. It also makes changes to recent budgetary language regarding light rail in localities and how it is funded.
NC tax legislation expands options for counties, could help light rail efforts – WRAL

Legislation in the News:
NC lawmakers try to clear decks before adjourning for year – Citizen-Times
Pending bills will mean big changes for NC voters – WRAL
Language limiting bike lanes dropped from bill – Star News
NC Senate looks to shift public school money to charters – N&O
N.C. Senate approves bill to ban ‘sanctuary cities’ – Jones & Blount 
Late maneuvering to hurt newspapers– Jacksonville Daily News
Sandbag rules to soften under state budget law – Star News
Budget contains more money to dredge shallow inlets – Lumina News

Medicaid Reform

House Bill 372, legislation that reforms the State’s Medicaid system among other provisions, passed the House and Senate on Tuesday and was signed into law by Governor McCrory on Wednesday. The new law:

• Creates a new Division of Health Benefits (DHB) to administer Medicaid, retaining it under the Department of Health & Human Services (DHHS)
• Gives lawmakers confirmation powers over the Governor’s appointment to oversee the Division
• Moves the state to capitated, full-risk contracts one year after CMS approval
• Allows both Managed Care Organizations (MCO) and PLE’s to bid on an RFP to manage the State’s Medicaid population, defining them under the category of Prepaid Health Plans (PHP’s)
• Allows 3 statewide contracts to be awarded to PHP’s and up to 10 regional contracts which are limited to PLE’s. PLE’s may bid on more than one regional contract provided the regions are contiguous
• Phases in LME/MCO’s, which manage mental health in the State over a period of 4 years after the capitated PHP contracts begin
• Keeps dental Medicaid as the lone carve out remaining fee for service
• Establishes Joint Legislative Oversight Committee on Medicaid and Health Choice to oversee and review budgetary, financial, administrative and operational aspects of DHB
• Gives DHHS full authority to write waivers and State Plan Amendments (SPA), but must notify the Oversight Committee and post the amendment publicly online no fewer than 10 days before submission
  Medicaid reform passes; could be years before patients see change – WRAL 
  NC General Assembly sends Medicaid bill to McCrory– WNCN 

Economic Incentives

House Bill 117, the NC Competes Act passed the Senate Tuesday and the House Wednesday. Governor McCrory is expected to sign the bill next week. Among the provisions, the bill:

• Job Development & Investment Grant (JDIG) modifications that would:
  • Increases the available funds in JDIG to $20 Million per calendar year with no high yield project
  • Provides additional $15 Million in flexibility to attract high yield projects ($500+ Million in investment/1,750 jobs) bringing maximum JDIG availability per calendar year to $35 Million
  • Extends program three years to January 1, 2019
  • Requires tier three counties to have local government participation in recruitment of the project and to have offered additional incentives to be eligible for JDIG funds
• Requires local match for One NC fund on a tiered requirement: 3 State dollars for 1 local dollar for tier 1; 2 State dollars for 1 local dollar for tier 2; and an even local match for tier 3
• Makes various tax changes for data centers and aviation
  Jobs incentives bill heads to Gov. Pat McCrory – N&O
  Reinvigorated incentives get final OK at General Assembly – Winston-Salem Journal 

Regulatory Reform

Conferees for House Bill 765, the Regulatory Reform Act of 2015, released a 71 page Conference Report Thursday evening and is calendared in both chambers for Monday. Among the proposed provisions that streamline or eliminates antiquated rules and regulations that hinder business, the bill:

• Makes clarifications for legislative appointments by the Speaker of the House and the President Pro-Tem of the Senate
• Amends the definition of employee under the Workers’ Compensation Act to exclude volunteers and officers of certain nonprofit corporations and associations
• Makes various changes to laws regarding wastewater, storm water and air quality
• Codifies practices for environmental self-audit privileges and limited immunity for businesses and other entities Studies the recycling of computer equipment, televisions, other electronics and solar panels
• Establishes “life of site” permits for sanitary landfills and makes fee adjustments
• Permits pigeon hunting
• Creates animal cruelty hotline

In Other News

• A Wake County Judge Wednesday ruled that a lawsuit to the State’s Voter ID law can proceed. He also halted any further proceedings until after the 2016 primary election to see if the reasonable impediment changes the General Assembly put in place this year are sufficient. Read more from the N&O here.
• Rep. Becky Carney (D-Mecklenburg) returned from her absence at the General Assembly after undergoing open heart surgery a few months ago. She is making a full recovery and we enthusiastically welcome her back. Read more in the Charlotte Observer here.
• Former State Rep. Deborah Ross (D-Wake) resigned her position as legal counsel at GoTriangle this week. Ross has been mulling a challenge to two-term incumbent U.S. Sen. Richard Burr (R) in 2016 and resigning her post suggests she is leaning towards entering the race. Read more from WRAL here.
• Four term State Senator Josh Stein (D-Wake) announced over the weekend that he would seek statewide office in 2016. Stein is eyeing the office of North Carolina Attorney General, which is being vacated by longtime incumbent Roy Cooper (D) who is assumed to be running for Governor. Prior to his service in the General Assembly, Stein served under Cooper as a Deputy Attorney General. He joins his colleague Sen. Buck Newton (R-Wilson) in the race, who previously announced his intentions to seek the office earlier in the year. Read more from WRAL here.

In the News

Domecast podcast tackles the legislature’s grand finale – N&O
N.C. State Fair vying for USA Today Travel's '10 Best State Fairs' – TBJ
NC budget cuts $110 million from regional mental health – Charlotte Observer
CBJ presents Carolinas HealthCare exec with lifetime achievement award (PHOTOS) – CBJ
Flashback: When conservative Democrats ruled in NC – N&O
Watergate lawyer commits record gift to Campbell Law – TBJ
Rep. Hardister wants to talk to fellow Republicans about repealing the death penalty – Jones & Blount