Legislative Update (Not the) End of Session

by Womble Bond Dickinson
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Jones Street has the unsettling calm of the realization after a just-fought battle that the victory was not worth the bloodshed, and you can’t remember why you’re fighting.

The North Carolina General Assembly concluded its 2014 Short Session on Saturday, August 2nd. Except that it didn’t. This year the House and Senate, both run by huge Republican majorities, have been at war; they did not agree on when to adjourn, how to adjourn, or what issues they can take up should they return to wrap-up unfinished business. 

Here’s what guidance our Constitution gives us about the Legislature in Article 2, Section 20. “Each house shall be judge of the qualifications and elections of its own members, shall sit upon its own adjournment from day to day, and shall prepare bills to be enacted into laws. The two houses may jointly adjourn to any future day or other place. Either house may, of its own motion, adjourn for a period not in excess of three days.” This week the House will meet on Wednesday and the Senate on Thursday only to meet that constitutional requirement – their calendars are bare. We hear they will both be in session August 14th in case they must consider any veto message from the Governor.

The next interesting constitutional issue here is the veto. When the General Assembly is in session, a ratified bill must be acted upon by the Governor within 10 days after it is presented to him – that’s August 12th. Should the General Assembly adjourn, the Governor would have 30 days from adjournment sine die to act on a bill – that’s September 1st. That longer period for the Governor’s consideration was provided in anticipation of the flurry of last minute legislation. In this case the Governor has until August 12th at the latest, and many bills were presented to him earlier than August 2nd.

Some of the bills we’ve been following for you this session were ratified, but many were just left on the table in school yard bully fashion:

SB 729 – Coal Ash Management Act was sent to a conference committee. Despite the spill in the Dan River being in Senate President Pro Tempore Berger’s neck of the woods, and despite the House and Senate conference leaders both being from Hendersonville, NC, no agreement was reached before the legislators left town.

HB 663 – Define Practice of Law (LegalZoom) never got out of the Senate. Lobbyists for LegalZoom and for the NC Bar worked hard to reach a compromise, the language of which was widely shared on Jones Street and can be found in an earlier “Keeping Up With Jones Street” blog entry, but legislators never rewrote the bill or took it to the full Senate for a vote. Nor was the House convinced to take it up on concurrence.

HB 1101 and HB 1102 dealing with Mechanic’s Liens never received Senate consideration.

SB 38 – Environmental Amendments is stuck in the Senate Clerk’s Office.

SB 493 – Health and Safety Regulatory Reform never received Senate consideration.

SB 734 – Regulatory Reform never received Senate consideration.

HB 1224 – Local Tax Changes and Economic Development which included the controversial local sales tax provision, JDIG, JMAC, Crowd funding and other provisions was sent to conference. The Conference Report was adopted by the Senate and rejected by the House. That Conference Report is here.

SB 3 – House Mini Budget was a slightly snarky attempt by the House to move some big budget items off the table before tackling others. The House used a stripped Senate bill to drop their mini budget contents into, passed it, and sent it to the Senate. The Senate returned it to the House with no action and no message (that being the message). The House sent it to the Senate again. The Senate refused to receive it. Playground.

SB 763 – Revenue Laws Technical Corrections stalled in Senate Rules.  This bill contains the recommendations of a year's study of our tax laws.  Without enactment of this bill the Historic Tax Credits program expires as does the Film Credits program.

A few things we're watching for you fared better:

SB 853 – Business Court Modernization was Ratified. The enacted version is here. The bill includes the threshold provisions for designation to the Business Court as well as the Delaware-style provisions for incorporation. The 2014-15 adopted budget also provides that 2 of the Special Superior Court Judges shall be converted to additional Business Court Judges when they become vacant. Details about where they will locate and how they will be supported were not included.

SB 648 – Patent Trolls was Ratified. The final version of the bill includes several new sections dealing with other matters: creating transparency in contracts between the Attorney General and private attorneys, allowing shareholder assent to exclusive forum, and limit asbestos-related liabilities for certain successor corporations. The ratified bill is here.

We hear the Legislature plans a lame-duck session later this fall on Medicaid Reform and may also tackle coal ash and health insurance coverage for the treatment of autism.

We feel the need to clarify that items left on the table represent countless hours of work by rank and file legislators who are acting on behalf of their constituents, and their frustration is noted.

 

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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