April 22, 2016

North Carolina 2016 Pre-Session Legislative Update

Maynard Nexsen

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Gaveling in the 2016 Session

Lawmakers will return to Raleigh next week for the 2016 short session of the North Carolina General Assembly, which will gavel in at 7:00 PM on Monday, April 25th. Following a nine-month long session in 2015 and two brief “special sessions” during the interim, there appears to be motivation among legislative leaders to have a truly short session with the goal of adjourning by the 4th of July. Although several lawmakers and political insiders have expressed skepticism, there is some evidence of this intention as the House Appropriations Committee is set to meet on Wednesday morning.

The short session differs from the long session in more ways than just the length of time legislators are in Raleigh. Lawmakers use the short session to adjust the second year of the State’s biennial budget, to revisit some unsettled matters from the previous year as well as new proposals from interim committees and new legislation that falls within rules of what may be introduced. However, the trend for the past several years has been to address the issues that have majority support from both bodies. Sen. Berger (R-Rockingham), Pro-Tem of the Senate, outlined some of the Senate's legislative priorities on Wednesday. WRAL has coverage of the press conference here.

A total of 43 oversight and Study Committees as well as their subcommittees met throughout the interim to make recommendations for legislation to be taken up this summer. A majority of the proposals are noncontroversial.

For a recap of the 2015 legislative session, see the Nexsen Pruet 2015 Session in Review

What is eligible?

According to the 2015 Adjournment Resolution, only certain bills are eligible to be heard in the short session. Below are some of the items among the list of what may be considered by lawmakers.

Budget bills
Constitutional amendments
Crossover bills, which passed the originating chamber in 2015
Bills recommended by a study committee
Local bills
Appointment bills
Pension or retirement bills
House, Senate & Joint Resolutions
Redistricting or election law bills
Adjournment resolutions

Any measure not meeting these requirements may only be introduced and considered upon the passage of a joint resolution receiving a two-thirds majority in each chamber. A full list of eligible bills that met the 2015 crossover deadline can be found here. However, it is not unusual for a bill that has passed one body or the other to be “gutted” and resurface containing an entirely new topic.

Some of the notable topics lawmakers may look to address include:

Tax changes
Regulatory reform
Certificate of Need
Scope of practice
Medicaid reform
Mental health
Limited Medicaid expansion
Teacher pay
Third party payments
Eliminating economic development tiers
Modifications to HB2
Session length
Lottery advertising
I-77 toll roads

2016 Bill Filing Deadlines – NCGA

Budget Surplus

Gov. McCrory appears to have an idea for how he would like the legislature to allocate the State’s extra tax dollars. The State has a projected $237 Million surplus. McCrory released his education budget priorities that would among other things, raise teacher pay an average of 5% in an attempt to boost the average salary to $50,000.
McCrory wants 5 percent hike to teachers – The Robesonian

He also released his budget priorities for the Department of Health & Human Services. He called for $50 Million in additional spending, more than half of which, he hopes will be used to address mental health issues. The proposal also includes very limited Medicaid expansion for people with intellectual and developmental disabilities.
McCrory wants more money for substance abuse treatment, Zika prevention – WRAL
McCrory Announces Limited Medicaid Expansion – Carolina Journal

Earlier this month, State Auditor Beth Wood (D) released the findings of an audit on Medicaid which estimates the program has overpaid providers as much as $835 Million. DHHS contends the overpayment is closer to $690 Million and noted that overpayments are deducted from future payments to providers. The Department also projects Medicaid will end the 2015-16 fiscal year with a $250 Million surplus.
DHHS claims Medicaid provider overpayments is not chronic concern – Winston-Salem Journal

The legislature may choose to adopt some of the governor’s proposals, but there is no requirement for them to do so. Ultimately, the length of the session will be determined by how quickly lawmakers can come to an agreement on the budget. Lawmakers are faced with another surplus, which often can be more challenging for budget writers than a deficit because they must agree on where the additional dollars will be allocated. The State’s fiscal year ends on June 30th, but more often than not, a Continuing Resolution is needed to keep government running when lawmakers fail to meet that deadline.

2016 Primary Results

Although primaries for North Carolina’s Congressional and NC Supreme Court elections were postponed due to litigation, the rest of the State’s primaries were held on March 15th. Traditionally North Carolina has held its primaries in May. However, in 2015 the NCGA moved the date of the 2016 primaries up to March 15th, largely due to increasing the State’s relevance in the presidential contest.

In November, Incumbent U.S, Senator Richard Burr (R) will face a challenge from former North Carolina State Representative Deborah Ross (D) and Libertarian Sean Haugh. Governor McCrory (R) will face a challenge from NC Attorney General Roy Cooper (D) and Libertarian Lon Cecil. There will also be at least two new Council of State members, as State Treasurer Janet Cowell (D) is retiring, and Attorney General Roy Cooper is running for Governor.

The NCGA will see a number of new faces when the legislature convenes for its 2017-2018 session. Several areas are guaranteed to have new representation in the General Assembly due to “open seats” where the incumbent is not seeking reelection. Two incumbents in the House also lost their primaries to challengers. Rep. George Robinson (R-Caldwell), who was appointed to fill the unexpired term of former Rep. Edgar Starnes, was defeated in his bid to retain the seat by attorney Destin Hall. Freshman Rep. Ralph Johnson (D-Guilford) passed away on the day of the primary after suffering from a stroke earlier in the year. He lost in the primary to Greensboro Pastor, Amos Quick who, with no opposition in November, will fill the seat in 2017. However, the Guilford County Democratic Party chose Chris Sgro, executive director of EqualityNC to serve the remainder of Johnson’s term. Gov. McCrory made his appointment official last week to serve during the short session. Local parties have yet to fill the seats of Senators Josh Stein (D-Wake) and Dan Soucek (R-Watauga) who resigned their seats this year. Their replacements will serve out the remainder of the 2016 session.

For a full analysis of the March 2016 down-ballot primary elections, as well as the upcoming June 7th primaries, see the NC Free Enterprise Foundation’s 2016 Post Primary Election Briefing here.

Special Session: Congressional Redistricting

Although the majority of the primary elections for North Carolina have been decided, the primaries for the State’s 13 Congressional districts have not yet been held. In February, U.S. Supreme Court Chief Justice John Roberts refused to issue a stay on a lower court opinion, which ruled the 1st and 12th Congressional districts unconstitutional for being racial gerrymanders. The NCGA was then directed to redraw the district maps.

As a result, legislative leaders determined that new maps would exclude race as a factor and redraw all 13 districts to be more compact geographically. They also openly stated that the new maps would indeed be a partisan gerrymander which is perfectly legal, to maintain the current 10-3 GOP majority in the Congressional delegation. Incumbency was also a factor taken into consideration for redrawing the maps, and most incumbents were not included in the same district, although many found themselves in districts that were very different geographically.

The time constraints for local election boards to organize by the March 15th primary resulted in a second primary on June 7th for the Congressional primary elections. Under normal circumstances, a candidate in a primary must win at least 40% of the vote to avoid a runoff, but a one-time exception, allowing a simple plurality to win the primary, was included for the June 7th primary.

Another one-time exception allows candidates currently running for another office, to additionally run in the June Congressional primaries. The modification allows the winner of the June Congressional primary to choose which office they will seek in the general election. That change has led a number of current members of the NCGA to run for Congress, particularly in the new 12th and 13th districts, without losing their seats in the General Assembly should they lose in the Congressional primary.

All of this, combined with no requirement to reside in a specific Congressional district, has created a few notable races to watch in June. In the 2nd district, incumbent Rep. Renee Ellmers (R-2) will run in a district more geographically similar to the district she won in 2010, prior to the 2011 redistricting. However, Rep. George Holding (R-13), who currently represents roughly 60% of the new 2nd, has also decided to run there, after his residence was moved into the new overwhelmingly Democratic 4th. Failed Republican contender for U.S. Senate in 2014 and 2016, Dr. Greg Brannon has also entered the race. The districts electoral makeup strongly favors a Republican.

The 9th district is currently represented by Rep. Robert Pittenger (R-9) but has changed dramatically. Formerly contained generally around Charlotte, the new district runs along the South Carolina border, from Charlotte to Fayetteville. Rep. Pittenger who has represented the 9th since 2012, has recently been in the news regarding FBI investigations into some of his personal business dealings. He has drawn a primary from Rev. Mark Harris who ran unsuccessfully for U.S. Senate in 2014, losing in the primary to now Sen. Thom Tillis (R). The districts electoral makeup strongly favors a Republican.

The 12th district, a majority/minority district currently represented by Rep. Alma Adams (D-12), formerly stretched from Greensboro to Charlotte. The new 12th is contained exclusively in Mecklenburg County. Rep. Adams is seeking reelection, but due to the new boundaries, will face a number of prominent primary opponents. Those challenging her in the Democratic primary include former State Sen. Malcolm Graham, who ran for the seat in 2014, as well as current State Representatives Rodney Moore, Tricia Cotham and Carla Cunningham. Adams, who until recently lived in Greensboro, more than 100 miles outside of the new district, has moved her residency to Charlotte to seek reelection. The districts electoral makeup strongly favors a Democrat.

Perhaps the most interesting is the 13th district. Incumbent Rep. George Holding has elected to run in the 2nd district, making the 13th district an open seat. The new 13th is perhaps the most competitive district in the State, although its electoral makeup still slightly favors a Republican.
With the one-time rule allowing candidates to run for Congress without jeopardizing the office they currently hold, several Republicans are aiming to move to Washington. In total, 17 Republicans have filed for the new seat, including State Representatives Julia Howard (R-Davie), John Blust (R-Guilford), Harry Warren (R-Rowan) and State Senator Andrew Brock (R-Davie).

You can enter your address on the State Board of Elections website here to determine the district you now live in. However, as of present time, the Federal Court has not approved the new maps.

Special Session: Charlotte Ordinance

The more controversial of the two special sessions held during the interim, which attracted the attention of the national media, was called in response to a municipal ordinance by the City of Charlotte. The Charlotte City Council adopted an ordinance allowing individuals in public spaces to choose the bathroom corresponding to the gender with which they identify. This quickly became a lightning rod issue, pitting the Governor and legislative leaders against Charlotte in legislation which would ultimately overturn the ordinance in addition to other provisions.

Although Governor McCrory had expressed opposition to the ordinance, he was not willing to call lawmakers in for a special session, preferring the issue be addressed when they returned for the short session. The ordinance would have been effective by the time they were scheduled to reconvene, prompting lawmakers to call themselves back into session, which has not been done in some time.

Returning to session for one day, lawmakers did indeed overturn the ordinance, requiring individuals to use the restroom corresponding with the gender on their birth certificate. However, House Bill 2 also contained provisions to prevent all Counties and Cities from raising the minimum wage locally or adopting additional nondiscrimination ordinances beyond the statewide policy which omits gender identity and sexual orientation. It also eliminates the ability of employees who are fired to file suit in State court for alleged discriminatory termination based on race, gender, handicap, religion or age among other reasons. The law does not inhibit individual businesses from adopting their own policies regarding restrooms and changing facilities.

The law has received both criticism and praise. Just a few weeks after signing the bill into law, and considerable backlash from various groups, businesses, media outlets and other States, Governor McCrory released Executive Order 93. The order, maintains the current practice of nondiscrimination for State government employees and calls for changes to the law to address discriminatory firings, among other things. Legislative leaders have not expressed any immediate interest in changing the law which is now being challenged in Federal court.
Employment law advocates in NC hope for HB2 changes – N&O
Lawmakers: Bathroom provision stays, other sections of HB2 could change – WRAL
Court finds Virginia school's transgender bathroom rule discriminatory – WRAL
Both sides weigh impact of McCrory’s House Bill 2 – WNCN
McCrory on House Bill 2: ‘I knew there would have to be corrections’ – Charlotte Observer

Litigation

Governor McCrory scored a win this interim in a suit he brought against the legislature over appointments to boards and commissions. The suit cited the Coal Ash Commission as an example, over separation of powers, which has since been dissolved by the Governor. All but one of the seven Justices, Paul Newby, sided with McCrory.
NC Supreme Court favors McCrory in appointments case – ABC11

The trial over the constitutionality of 9 State Senate districts and 19 State House districts began last week. Plaintiffs argue just as with the Congressional maps, that the named districts were drawn based on racial gerrymandering. In that case, the Federal court struck down the old Congressional maps but has yet to rule on the constitutionality of the latest maps.
Trial over NC legislative districts begins in Greensboro – N&O

The NC Supreme Court recently heard a case regarding a 2015 law that allowed sitting Justices on the North Carolina Supreme Court to run for reelection in retention elections instead of traditional, competitive elections against an opponent. Plaintiffs argue that a Constitutional Amendment is required for such a change. The law is effective for 2016 and the only seat up on the Supreme Court in the 2016 election is currently held by conservative Justice Bob Edmunds. Justice Edmunds has recused himself from the case. In the event of a likely 3-3 split, the lower court ruling would be upheld and retention elections would be invalid.
Skeptical Justices Consider Judicial Retention Law – Carolina Journal

Also, the NC Supreme Court last Friday ruled unanimously that 2013 legislation eliminating tenure for veteran teachers was unconstitutional. Justices noted that while lawmakers were able to rid of tenure for incoming teachers, they were not able to revoke tenure from teachers to whom it had already been promised.
Supreme Court upholds tenure rights for veteran teachers – WRAL