NC Legislative Update for July 2015 #3

Nexsen Pruet, PLLC

This Week

Trying to predict when the General Assembly will adjourn every year is a question that even the most seasoned lawmakers, lobbyists and staff cannot answer. The length of the current session, which began in mid-January, is expected by many to continue well into the fall. North Carolina is neither a full-time legislature, nor does it have any limitations as to when it must adjourn. The current session length and the low annual salary of $13,951 for legislators have sparked debate over a solution to the problem that financially constrains legislative service to business owners, retirees and the independently wealthy. Suggested solutions include either a formal session limit or creating a full-time legislature.
Annual NC adjournment guess raises schedule change options – WRAL

The Senate completed policy committee meetings this week and budget negotiations are officially underway between the two chambers. Conferees were appointed last week. No formal negotiations on the budget have commenced. The first item in contention that Conferees will address is Medicaid Reform. Budget writers, more specifically in the Senate, have indicated that negotiations on the full budget will not move forward until Medicaid reform is resolved. Key lawmakers from both chambers, however, are scheduled to attend several national conferences over the coming weeks meaning an agreement on Medicaid, and thus the budget, is not likely to be resolved in the immediate future.
Two-thirds of legislature to attend private budget talks – N&O
How far away is a state budget resolution? – Gaston Gazette
Lawmakers leave budget behind, head to California conference – WRAL

The Senate resurrected House Bill 562, Amend Firearms Laws, on Thursday in the Judiciary II Committee. The bill passed the House last month after being significantly watered down from its original version. The bill presented numerous changes in its 17 sections, but a few specific provisions drew particular concern from anti-gun activists. One of those would allow District Attorneys and Administrative Law Judges that have concealed handgun permits to carry a firearm concealed in the courtroom. Another allows a permit holder to have a firearm that is in a closed compartment in a locked vehicle on educational property. A provision that some pro-gun Republicans did not like would allow the Commissioner of Agriculture to prohibit the carrying of firearms at the State Fair. The bill is expected to receive a hearing in the Senate next week.
Gun opponents resigned to firearms bill's passage – WRAL

In the same meeting, the Judiciary II Committee also passed House Bill 774, the Restoring Proper Justice Act, which would allow executions to resume in North Carolina. Current law requires physicians to be present at an execution to monitor the lethal injection. H774 would allow a lethal injection to proceed with any medical professional present to supervise, including physician assistants, nurses, and paramedics, as long as a physician is on site to pronounce the person dead after the fact. Another provision would exempt information from public records about the drugs used in the lethal injection, including the contents and dose of the drug, as well as information on suppliers and manufacturers. The bill would also exempt the procedure from the State’s rule making process and give the Secretary of the Department of Public Safety the discretion to release that information. If the bill passes, it is certain to begin a protracted appeal process.
Bill to resume state executions advances – WRAL

The House Environment Committee met Tuesday to review the Senate’s changes to the Regulatory Reform Act, House Bill 765. The Committee was tasked with making a recommendation on concurrence. The Committee suggested that the House not concur with the Senate changes. On Wednesday, the House followed the Committee’s advice and unanimously voted not to concur and appoint a Conference Committee to address the changes.

The North Carolina Supreme Court ruled Thursday that the State’s opportunity scholarships or “school vouchers” are constitutional. School vouchers supplement the tuition for low income students who attend private school. Opponents of the 2013 law argued that public funds should not be used to help pay tuition to private religious schools. The Supreme Court ruling was a 4-3 decision with the Republican Justices voting in for of vouchers and the Democrats voting in the negative.
NC Supreme Court rules in favor of voucher program – WNCN

On Thursday, a federal judge ruled in favor of the City of Greensboro in its challenge to the legislature’s recent reconfiguration of the City Council. An injunction was granted so that the new plan will not be in effect for this election cycle. House Bill 263 restructured the Greensboro City Council by decreasing the number of Council members from nine to eight while simultaneously redrawing the council to be elected from districts. The controversial bill barely passed the House, but succeeded due to some parliamentary maneuvering, and some changed votes. The ultimate fate of the plan, however, will be decided by the Courts before the 2017 election.
Judge rules against Greensboro City Council redistricting law – News & Record

North Carolina may have a say in the upcoming 2016 Presidential primary. Traditionally, the State’s primary occurs in May, and more often than not, both the Democratic and Republican nominations are virtually secured by the time North Carolinians get to the polls. Lawmakers are now attempting to make North Carolina a player on the national stage in the selection of party nominees. On Tuesday, the Senate passed House Bill 373, compromise legislation to move the State’s Presidential primary up to March 15th. The original proposal from legislative leaders called for an even earlier date but threats from the Republican National Committee to strip the state of most of its delegates, led lawmakers to agree on March 15th. The candidate receiving the highest number of votes in the March primary will retain all of the State’s 72 delegates in a winner-take-all format. The primary date for all other offices in the State remains in May.
Legislators push for earlier presidential primary in NC – Charlotte Observer

The House passed Senate Bill 22 on Tuesday. The main portion of the bill protects the removal of certain “objects of remembrance,” such as monuments, on public property by a local governing body. The bill was controversial because it would protect Confederate memorials that are displayed across the state. S22 was debated heavily by both sides of the issue but eventually passed 70-39, unchanged from the Senate version. Governor McCrory signed the bill into law late Thursday evening.
McCrory signs ban on removing historical monuments – N&O

Sen. Brown (R-Onslow), the Senate Majority Leader and chief budget writer, held a press conference Tuesday to again tout his plan to redistribute sales taxes to the Counties. The proposed plan was contained in the Senate budget. It changes the way sales tax revenues are distributed to Counties from a 75% point- of-sale/25% per-capita method to a 20% point-of-sale/80% per-capita method. The plan unquestionably favors rural counties as most sales tax revenue is collected in more urban areas. Sen. Brown stood with leaders from rural areas supporting the plan during the press conference. Both the House and the Governor have expressed concern with the plan and the Governor stated that he will veto any bill containing the measure. Fiery words were passed between the Senate and the Governor, ending with a rhetorical inquiry from the Senate Majority Leader: “I can’t figure out if Pat thinks he is the Governor of Charlotte or the Mayor of North Carolina.”
Governor, senators at odds over sales tax plan – WRAL
McCrory vows sales tax veto as senator rallies rural support – N&O
McCrory: I Might Veto State Budget – Politics NC

Legislation in the News:
Governor Promotes Connect NC Bond Initiative in Coastal NC – TWC News
Amendment takes negotiating tool away from NC school districts – WRAL
NC Senate votes to ban school boards from suing counties – N&O
Cities, counties balk at home builder tax exemption – WRAL
NC ports can count on cash from Raleigh – N&O
Senate bill would end DPI oversight of charter schools – WRAL
NC Senate backs regulations for Uber and similar ride services – N&O
House votes to slash emissions testing – WRAL

Tax Changes

The Senate has proposed yet another omnibus tax package which it unveiled in the Finance Committee on Tuesday. When filed, Senate Bill 605, sponsored by Sen. Rucho (R-Mecklenburg) was two pages long. However a Proposed Committee Substitute (PCS) to the bill increased its length to 23 pages, many of which are largely technical and were requested by the Department of Revenue. Among other provisions, the bill would:

  • Phase out the sales tax refund for professional racing teams
  • Clarify that the refund for indirect purchases made by a person on behalf of a nonprofit organization does not apply to the purchases of prepared food and accommodation rentals
  • Repeal the income tax refund check-off for a charitable contribution to the North Carolina Education Endowment Fund
  • Remove occupational licensing boards, such as the NC State Bar, from the definition of a State Agency so that they are no longer eligible for the State sales tax exemption
  • Conform the bonding requirements that entities must pay excise tax for cigarettes, tobacco products, beer and wine. Additionally it states that entities must file a bond in an amount that is two times the monthly average liability of the taxpayer. The minimum amount of the bond is $2,000 and the maximum amount is $2 million

In Other News

  • Bill Pully, president of the North Carolina Hospital Association, wrote an op-ed piece in the News & Observer regarding the proposed changes to the State’s Certificate of Need laws. You can read it here.
  • Rep. Saine (R-Lincoln) and Rep. Cotham (D-Mecklenburg) sat down on Capital Tonight with host Tim Boynum to discuss the budget. You can watch the video here.
  • Senate Rules Chairman Tom Apodaca (R-Henderson) sat down with the editorial board of the Asheville Citizen-Times to discuss the current legislative session. A link to the article can be found here.
  • The Office of State Auditor Beth Wood (D) performed a financial audit of the Department of Public Instruction (DPI), headed by State Superintendent June Atkinson (D). This is the first time in several years DPI has had such an audit done. You can read the full text of the audit here.
  • North Carolinian resident Jay Faison recently announced that he would spend $175 Million of his own money to encourage Republican candidates nationwide to embrace clean energy. He wrote a piece in Politico over the weekend which can be found here.

In the News

Battling Lobbyists' Bad Rap- Carolina Journal

Heath Shuler for... governor?- Jones & Blount

Media coalition sues McCrory administration over records- WRAL

DENR sues EPA over expanded water rule - WRAL

N.C. unemployment rate now at its highest level in 9 months- CBJ

Tryon Democrat mounting US House bid in 10th District- Citizen-Times


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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