NC Legislative Update: June 2018 #2

by Nexsen Pruet, PLLC

Nexsen Pruet, PLLC

This Week

Significant legislation began moving last week in the wake of the previous week’s budget approval.  Many of these initiatives have been in the works since lawmakers adjourned last year, particularly legislation that crossed over from one chamber to the other last year, as well as recommendations from Interim Committees.  The General Assembly still appears to be on schedule to adjourn prior to the end of the State’s fiscal year, June 30th.  Leadership initially targeted a June 15th adjournment, but it appears lawmakers will be here at least one more week.  The Governor has ten days to take action on legislation while the NCGA is in session, and lawmakers are aiming to pass any matters requiring action from the Governor by Friday of this week.  If that holds true, lawmakers will likely address other matters that do not require gubernatorial action, such as local bills and constitutional amendments, during that 10-day period next week. 

Governor Roy Cooper (D) vetoed the state budget sooner than many observers had expected.  He announced his veto of the spending measure last Wednesday in a press conference, and the Senate wasted little time overriding his veto on party lines the following day.  Sen. Don Davis (D-Greene), who broke ranks to vote with Republicans in favor of passing the spending proposal, voted with his Democratic colleagues to sustain Gov. Cooper’s veto.  The House has calendared the override vote for Tuesday morning.  The threshold required to override a veto is two-thirds of the members present and voting, and the House, like the Senate, has a veto-proof Republican majority.

Cooper vetoes GOP budget, saying it 'doesn't cut it' – WRAL
Senate swats down budget veto – WRAL

Both the House and Senate moved identical legislation that would authorize the Department of Transportation to issue a $3 Billion bond for highway construction.  The Senate was the first to have the measure pass either chamber.  Senate Bill 758 would authorize the State to borrow up to $300 Million each year for 10 years.  Funds would come from the State Highway Trust Fund rather than the general fund, so the debt issuance does not need approval from the voters.  The measure passed the Senate unanimously.

$3B in road borrowing clears Senate – WRAL

The Senate moved the perennial omnibus agriculture bill, more lovingly referred to as, the Farm Act of 2018.  Senate Bill 711 contains a number of measures intended to benefit, or provide regulatory relief, to various aspects of the State’s largest industry.  The bill has sparked controversy among various environmental groups, particularly regarding a provision benefitting hog farmers.  The bill passed the Senate on party lines and is expected to be heard in the House Agriculture Committee Tuesday.  Among the provisions, the bill:

  • Repeals the North Carolina Handler's Act and enacts the Fruit and Vegetable Handlers Registration Act.
  • Allows the Department to release collected information relating to agriculture that is confidential under federal law if confidentiality is waived by the federal agency that requires confidentiality.
  • Exempts the Department from the Umstead Act, which prohibits the State from competing against businesses, to sell merchandise related to its Got to Be NC Agriculture marketing promotion at the State Fair.
  • Classifies "verified propagules," which are seeds or clones from an industrial hemp plant that has been tested and confirmed to have a THC concentration that complies with federal law, as hemp products.
  • Prohibits beverages derived from plants from being labeled as milk, such as "soy milk" and "almond milk.
  • Directs Agriculture and Forestry Awareness Study Commission to study requiring the holders of unused rights-of-way and utility easements to offer the easements to the underlying property owners for fair market value, and the advisability of excluding property enrolled in present use value taxation from rural fire protection district and county service district taxes.
  • Requires that land records in every county include some form of notice to alert a person researching the title of a particular tract that the tract is located within one half-mile of a poultry, swine, or dairy qualifying farm or other qualifying farm or a voluntary agricultural district, or within 600 feet of any other type of qualifying farm.
  • Under the current right-to-farm law, no agricultural or forestry operation may be or become a nuisance by "any changed conditions in or about the locality of the operation after the operation has been in operation for more than one year, when such operation was not a nuisance at the time the operation began." This legislation amends the right-to-farm law that a changed condition of a farm operation includes, but is not limited to, a change in the ownership, occupancy, or use of the property that is affected by the alleged nuisance.
  • Directs the Utilities Commission to adopt rules to establish reasonable limitations on the amount by which a natural gas company may increase rates for cost recovery for construction and extension of natural gas service to a farm.
  • Directs the Department of Revenue to publish a depreciation schedule for farm equipment and make the schedule electronically available on its website.
  • Makes various modifications for the World Equestrian Games, which will be held in Rutherford County this fall, and is expected to be the largest sporting ever held in NC.

Reworked Farm Act passes Senate, still protects farmers from lawsuits – WRAL
Got milk? Answer in NC may soon be no if it's plant-based – WRAL

The Senate Commerce & Insurance Committee advanced a PCS to House Bill 382, entitled DOI Omnibus.  The bill makes several changes to insurance laws at the request of the Department of Insurance (DOI).  The bill passed the Senate Rules Committee on Monday and has been calendared for Tuesday.  Among the provisions, the bill:

  • Incorporates model act language from the National Association of Insurance Commissioners (NAIC) into North Carolina's Life and Health Insurance Guaranty Association Act.
  • Amends the Surplus Lines Act by allowing an insurer to be designated as a "nonadmitted domestic surplus lines insurer" in North Carolina. This designation would allow the insurer to be domiciled in North Carolina and write surplus lines insurance in North Carolina.
  • Makes amendments to North Carolina's consent to rate statute for both automobile insurance and homeowners insurance.
  • Makes numerous technical changes to various insurance laws at the recommendation of DOI.

The Senate Commerce & Insurance Committee also resurrected an omnibus bill making various changes to ABC laws in NC.  Among other provisions, the PCS to House Bill 500, entitled ABC Omnibus Legislation:

  • Makes technical and clarifying changes to various ABC laws
  • Adds movie theatres and stadiums or ballparks with at least 3,000 seats to serve, beer, wine, and mixed drinks.
  • Clarifies that a permit for a golf course restaurant applies to the entire golf course property.
  • Eases regulations for nonprofits to obtain ABC permits for fundraisers.
  • Allows distillers to sell merchandise at tastings.
  • Authorizes the sale of beer and wine on state owned passenger-only ferries.
  • Allows the transfer of control of a beer or wine wholesaler to a family member, prior to the owner’s death, and expands the definition of “designated family member”.  It also eliminates a supplier’s right to match and reassign to a designee the right to purchase the ownership interest.
  • Eliminates the ability of a supplier to financially assist a proposed purchaser in acquiring ownership of a wholesaler's business.
  • Prohibits suppliers from inducing or coercing a wholesaler to accept delivery of a product that was not specifically ordered by the wholesaler.

Alcohol wholesalers lobby gets new rules slipped into bill after secret Asheville rendezvous – Longleaf Politics 

In a rare bill filing, House Speaker Tim Moore (R-Cleveland) filed House Bill 1092, a proposed constitutional amendment that would ask voters in November to enshrine in the NC Constitution requiring a photo ID to vote.  Traditionally, the Speaker files little, to no legislation, and this is the only substantive bill he has filed since this General Assembly convened in January of 2017.  Constitutional amendments were a topic of discussion heading into the short session, although no specifics were given as to what lawmakers would place on the ballot. 

Amendment would put voter ID in NC constitution – WRAL
As expected, GOP lawmakers introduce voter ID constitutional amendment – Carolina Journal

In Other News

In a unanimous decision Friday morning, the NC Supreme Court ruled that State Superintendent Mark Johnson (R) should control the Department of Public Instruction, rather than the State Board of Education.  The ruling concludes a fight that has played out for over a year.
NC Supreme Court rules that superintendent should be in charge of state's public schools – N&O
Superintendent, state board both claim victory in court case over who runs NC schools – N&O

The Constitution Party has officially received ballot recognition in NC.  After gaining enough signatures and approval from the State Board of Elections & Ethics Enforcement, the party may now hold a convention and join the four other recognized parties in placing candidates on the ballot for races statewide.
North Carolina Constitution Party recognized as official party – WNCT

Charlotte and Las Vegas are reportedly the final two contenders to host the 2020 National GOP Convention.  Charlotte Mayor Vi Lyles, a Democrat, has been leading the push, meeting with RNC officials and noting that the convention would be an economic boon for the city.  A final decision could come as early as July.
Las Vegas is Charlotte's only competitor for GOP convention. Is it a serious challenger? – Charlotte Observer

Months after lawmakers grilled Gov. Cooper for the painfully slow recovery efforts from Hurricane Matthew, Cooper conceded that the efforts have taken too long.
Cooper: Process to fix homes damaged by hurricane 'taking too long' – WBTV

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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