Welcome to the Nexsen Pruet Weekly Legislative Update! The Nexsen Pruet Public Policy team provides attorneys and clients with a newsletter summarizing the week's activities and conveying the inner workings of the legislative process and state government in Raleigh. Please feel free to pass this along to your clients or other interested parties

And The Gavel Drops!

After an unusually lengthy short session that started May 14^th, lawmakers finally agreed on Wednesday August 20^th to adjourn sine die, and conclude the business of the 2013-14 General Assembly.  At the end of last week, the Senate sent the House a technical fix to the budget for teaching assistant funding, championed by the Governor and House, and three different adjournment resolutions for the House to pick from.  Two of the resolutions would have brought the General Assembly back to Raleigh in November after the election to deal with items such as coal ash clean-up and Medicaid reform and one that would adjourn the session sine die, which was ultimately chosen.

The Senate also passed the perennial appointment’s bill which fills vacancies on state boards and commissions reserved for appointment by the House Speaker and Senate Pro-Tem.  The appointments bill does not need the Governor’s approval.  Both chambers also passed the conference report for the Regulatory Reform bill which now awaits action from the Governor.

This week, the House worked Monday through Wednesday but was unsuccessful in passing the budget fix for TA’s due to its contingence on also passing the more controversial H1224, Local Sales Tax Options/Economic Development Changes.  That bill contained a cap on the percentage of sales tax a county may levy as well as funding authorization for two of the Governor’s economic development provisions, JDIG (Job Development Investment Grant) program and the job catalyst fund, JMAC (Job Maintenance and Capital Development Investment Fund).  H1224 failed to pass the House.

The Senate returned Wednesday after the House and Senate came to an agreement on what they called “Coal Ash #1”, indicating that there would be two or maybe three more coal ash bills in the future.  Both chambers passed the conference report for coal ash clean-up that day. 

The Senate also passed a clean version of the Unemployment Insurance legislation.  Following that, House and Senate adjourned the session sine die, and left without accomplishing a number of items on the agenda, including anticipated changes to revenue and environmental laws, Medicaid reform and economic development incentives.

There is speculation however that the Governor may call the legislature back for a special session to address some his office’s priority issues that never made it to his desk.  In particular the JDIG provisions which Department of Commerce Secretary Sharon Decker said were needed to help in the recruitment of a few companies that are “in the pipeline”.  The Governor also has expressed his concerns over the need for a funding fix for teaching assistants in the budget as well as his desire to reform the Medicaid system. 

Thursday may very well have been the last day in the General Assembly for many members including Speaker Tillis, should the Governor not call the legislature to return.  We would like to thank them all for their service to our state and we wish them all well.

Tillis looks back on speakership – WRAL

Lawmakers leave jobs bill, Medicaid reform behind – WRAL

Legislators stroke coal-ash deal, head home – The Robesonian

TA’s, Sales Tax & Incentives

The Senate budget correction for teaching assistants H718 would have given local school districts the flexibility to move money in their education budgets between teachers and teaching assistants.  The last section of the bill however, dictated that in order for the correction to become effective, the House must also pass the conference report for H1224, capping the local sales tax.  Passing H1224 proved to be a more difficult task than anticipated amidst a House Republican caucus divided over incentives. 

Last Friday, after lengthy caucus meetings throughout most of the day regarding H1224, an attempt to add it to the calendar failed 44-46.  In an effort to ease tensions over the local sales tax issue, House and Senate leadership negotiated a third bill, also contingent on passing H1224.  H189 would have temporarily exempted Wake County from the sales tax cap, allowing commissioners until 2016 to pass a referendum raising the local sales tax, as opposed to the end of this year and be grandfathered in. 

H1224 was passed out of the House Rules committee Monday evening11-8 and calendared for Tuesday.  Another caucus meeting Tuesday morning preceded the vote to approve the conference report where House leadership calculated they had the necessary support to pass the bill.  The House failed to adopt the conference report, losing the vote 47-54 with 28 Republicans voting no.  Speaker Tillis (R-Mecklenburg) had previously indicated if H1224 did not pass, there would be no need to hear the other two bills, leaving the TA funding fix unresolved as well.

House Revolt Crashes Incentives Bill – Carolina Journal

House defeats Senate gambit on TAs, Incentives – WRAL

TA funding, economic development bills remain for lawmakers – WRAL

Regulatory Reform

Both chambers passed the conference report for S734 this past Friday.  The regulatory reform legislation now awaits action from the Governor and includes among other provisions:

• Allow businesses to represent themselves using a non-attorney in administrative appeals
• Allow community colleges with brewing, distillation, and fermentation programs to sell malt beverages produced during the course
• Exempt C&D landfills from the minimum financial responsibility requirements applicable to other solid waste management facilities
• Eliminate outdated air quality reporting requirements
• Allow mineral rights to be severed from the title to real property
• Study the use of contaminated property
• Clarify the Hardison Amendment to require that no state environmental regulation shall be more strict than the minimum federal regulations unless approved by the lawmakers

Regulatory reform package goes to governor – WRAL

Coal Ash

One of the last actions each chamber took up before adjourning the session was the initial step towards cleaning up the coal ash spill that occurred in February of this year.  Lawmakers reached an agreement Tuesday for the conference report on the Coal Ash Management Act of 2014, S729, which was not expected to be addressed until a November special session.  Among other provisions, the bill would:

• Temporarily ban the responsible entity from seeking rate increases to pay for the clean-up
• Establish a nine member Coal Ash Management Commission to oversee clean-up, administratively located in the Division of Emergency Management under Department of Public Safety
• Prohibit construction of new coal ash impoundments after October 1, 2014
• Require all coal combustion energy plants to convert to disposal of dry fly ash by December 31, 2018
• Require groundwater monitoring and assessment of impoundments
• Instruct the Department of Environment & Natural Resources to classify and prioritize impoundments as high, intermediate, or low risk for the purpose of closure and remediation
• Require closure of all “high risk” impoundments by December 31, 2019
• Require closure of all impoundments by December 31, 2029
• Study the use of coal combustion products as structural fill and the disposal of coal combustion residuals to combustion products landfills

Lawmakers indicated that this bill is the first of likely several in the future that will deal with this issue.  The bill now awaits action from the Governor.

NC lawmakers pass coal ash legislation; adjourn very long short session – N&O

JMAC

One of the economic development pieces from H1224 was a JMAC provision which would allocate $12 million over six years to Evergreen Packaging, a paper mill in Haywood County that employs roughly 1,000 people in Western NC.  The mill is investing $50 million to convert their boilers from coal to natural gas due to an EPA regulation.  The investment includes installing new natural gas supply lines.  Initially, S3 was a stand-alone bill for the JMAC provision, but it was stripped and turned into the mini-budget a few weeks ago.  A series of procedural motions and votes to revert the language back to its original form allowed the House to pass the JMAC provision and send it to the Governor.

Lawmakers resurrect money for Canton mill – Citizen-Times

Unemployment Insurance

The Senate passed S42 before adjourning Wednesday which would clarify the confidentiality of unemployment compensation claimant records.  Under the legislation, any unemployment compensation information in the records of the Division of Employment Security is required to be kept confidential.  This includes claim information and any information that reveals the name or any identifying particular about any individual or any past or present employer or employing unit or that could foreseeably be combined with other publicly available information to reveal any such particulars. 

The Division may disclose final decisions and the records of the hearings that led to those decisions only after the expiration of the appeal rights.  The language had previously passed the General Assembly in a broadened Unemployment Insurance bill which the Governor vetoed.  This clean fix now sits on the Governor’s desk and he is expected to sign the legislation.

Senator Lee

The New Hanover County GOP selected Michael Lee to fill out the remainder of the term belonging to now retired Sen. Goolsby (R-New Hanover).  Lee, a Wilmington attorney is also the current GOP nominee running for the seat in November’s general election.  Sen. Lee (R-New Hanover) was sworn in on Wednesday and took his first votes in the Senate on Thursday evening.  Lee faces fellow attorney and former New Hanover County School Board member, Elizabeth Redenbaugh (D).

Lee to take oath of office for NC Senate – WWAY

Nineteen-Candidate Judicial Race

Nineteen candidates have filed to run in an upcoming special election this November to fill the seat vacated by Chief Judge John Martin who retired in the beginning of August.  In this special election the 40% threshold does not apply and the winner will be determined by plurality, meaning whichever candidate gets the most votes wins the seat.  Below is a list of the candidates and the order in which they will appear on the ballot:

1. Marion Warren – Brunswick
2. Chuck Winfree – Guilford
3. John M. Tyson – Cumberland
4. Elizabeth Davenport Scott – Wake
5. Tricia Shields – Wake
6. Jody Newsome – Wake
7. Marty Martin – Wake
8. Hunter Murphy – Haywood
9. Keischa Lovelace – Wake
10. Ann Kirby – Craven
11. Abe Jones – Wake
12. Sabra Jean Faires – Wake
13. Daniel Patrick Donahue – Perquimans
14. J. Brad Donovan – Wake
15. Lori G. Christian – Wake
16. Jeffrey M. Cook – Wake
17. Betsy Bunting – Wake
18. John S. Arrowood – Mecklenburg
19. Valerie Johnson Zachary – Yadkin

Governor McCrory Appoints Judge Lisa Bell to Court of Appeals – NC Governor’s Press Release

19 candidates running in special election for N.C. Appeals Court seat – The Voter Update