NC Legislative Update for August 2015 #3

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This Week

Amid the budget deliberations, the General Assembly took time Tuesday to commemorate the 70th anniversary of the end of the war World War II. Senate Joint Resolution 720, passed by both the House and the Senate, honored the veterans of World War II including nearly 40 of whom were sitting in the galleries of the two chambers.

World War II veterans in N. Carolina honored by legislature – N&O

The week began with a bleak outlook as budget talks last Friday imploded over efforts by the two chambers to agree on a spending figure. However, leadership in both chambers announced Tuesday, after a morning spent at the Governor’s mansion that they were able to agree to a spending figure of $21.735 Billion. This is the first step towards a budget deal. The figure is a 2.7% increase compared to the 2013-14 budget, much closer to the Senate and Governor’s proposals which were approximately 2% increases. The House budget plan would have increased spending by close to 5%. Budget writers are expected to be in Raleigh over the weekend in an effort to make headway towards a budget and, hopefully adjournment.

NC lawmakers, McCrory agree on spending $21.74B this year – WRAL
General Assembly: 6 big undecided issues on slow march to adjournment – Charlotte Observer
Senate leader Phil Berger chats about the budget on N&O’s Domecast – N&O

The House voted not to concur Wednesday with two high profile and contentious bills, House Bill 117 and House Bill 372. The Senate made major changes to the House versions. The two policy changes have been hurdles in budget negotiations and were initially contained in the Senate budget. However, the two policy matters were removed and incorporated in separate bills at the request of the House, in an attempt to ease an agreement on the budget. House Republicans met for a “mandatory” caucus on Tuesday afternoon to discuss the two proposals behind closed doors and determined that both pieces of legislation were unacceptable.

House Bill 117, the NC Competes Act is arguably the more contentious of the two bills. More specifically, the sales tax redistribution provision contained in this bill has generated intense opposition in the House to legislation that would otherwise be widely supported. That provision would adjust County allocation of sales tax revenues from 75% point of sale/25% per capita distribution back to the 50%/50% distribution formula that was in place prior to 2007. The bill contains several other popular provisions such as economic incentives to attract businesses to the state and other tax changes desired by various industries. Leadership in the House has been openly opposed to the redistribution plan which is a primary objective for leadership in the Senate. The House Republican caucus overwhelmingly voted to not approve of the Senate changes. The Governor has also said publicly that he will veto any legislation that changes the formula for sales tax redistribution to the Counties.
N.C. House disagrees with Senate version of incentives, sales-tax bill – CBJ

The second bill that has been a point of contention is House Bill 372, which addresses Medicaid reform. Both chambers want some version of Medicaid reform but disagree on the approach. After the House voted down the Senate Medicaid plan Wednesday, negotiations began again immediately between the two chambers to reach a deal. A tentative agreement for a “hybrid” model, allowing both managed care organizations (MCO) and provider-led entities (PLE) to compete in the Medicaid marketplace was reached on Thursday. That is however only one of the points in controversy. Both the timeframe for implementation and the governance of the Medicaid program remain in conflict. Negotiations stalled on Thursday, but could potentially resume over the weekend.
House, Senate negotiators say they will pursue 'hybrid' Medicaid model – WRAL

The debate over reforming Medicaid has been a multi-year, multi-session process now. Lawmakers have been at odds over the best way to transform the program to capitalize on savings and insure budget predictability while simultaneously enhancing the program to benefit patients and providers. Community Care of North Carolina (CCNC), a private nonprofit organization, currently oversees the coordination of care for a large amount of the State’s Medicaid population. The Senate version of Medicaid reform would terminate the State’s contract with CCNC for what they perceive as a failure to bring sufficient savings to the State. The Senate has made no attempt to disguise their preference for private, commercial care to manage the program. The debate however, could take a new direction after the release of an audit on CCNC Thursday from State Auditor Beth Wood’s (D) office. The results of the audit were that CCNC has in fact made significant savings to the State, approximately $312 per enrollee annually. CCNC has traditionally received strong support in the House.
Audit: Managed care company for poor patients saves North Carolina money – WRAL
Audit of Community Care shows it saves Medicaid money, raises questions for Senate – TBJ

Senate Bill 15, Unemployment Insurance Law Changes, passed the House on Thursday. One of the more notable provisions is the suspension of the 20% surtax on employers once the Unemployment Trust Fund balance reaches $1 Billion. Once implemented, Speaker Moore (R-Cleveland) said that change should save workers and employers in the State $240 Million annually. It would also begin charging benefits to employer’s accounts quarterly rather than annually. Another provision would require claimants of unemployment insurance to show a valid photo identification to receive their benefits. The section that has received the most attention would increase the number of required weekly job contacts from two to five for recipients of unemployment insurance. It would also confirm the Governor’s appointments to the Board of Review which oversees decisions made by the Division of Employment Security and staggers their terms. Governor McCrory (R) vetoed similar legislation last year over a dispute with legislators shortening the terms of his appointees, but this version is said to be a compromise between the two chambers and the Governor. The bill now awaits action for concurrence in the Senate.
NC House OKs tougher requirement for jobless benefits – N&O
House clears NC unemployment bill raising contact mandate – WECT

The House Finance Committee gave its approval to Senate Bill 541, Regulate Transportation Network Companies. The intent of the bill is to impose basic statewide regulatory standards on drivers for services such as Uber and Lyft. Among other things, the bill requires the transportation company and its drivers to obtain permits and establishes basic levels of insurance coverage required for drivers. The bill will likely be heard next week.

Legislation in the News:
Bill Would Let Charter Operators Take Over Worst Schools – Carolina Journal
McCrory signs law to battle rare diseases – Triad Business Journal
House panel OKs remedial plan for high school seniors – WRAL

In Other News

An initial draft from the Academic Standards Review Commission, which is tasked with either modifying or replacing the State’s education standards, was due on Monday. The Commission, put in place by lawmakers last year, was created to examine the relatively new national education standards known as Common Core. The charge to repeal Common Core has been led by conservative groups that view the national standards as overreach from the federal government. Read more from the N&O here.

In the News

Dems Prioritize Governor's Race – Carolina Journal

LaRoque: My prosecution was 'a witch hunt' – WRAL

Advocates make calls urging parents to sign up for school vouchers – WRAL

NC selling 6 historic houses on Person Street – N&O

Former Raleigh mayor now oversees Legislative Building – WRAL

Beer fests vow to work with state agencies amid crackdown – Citizen-Times

Solar executives holding out hope for renewable tax credit extension – TBJ

Brenden Jones to run again for House seat, Ken Waddell undecided on re-election bid – WECT

 

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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