NCGA Week in Review - November 2019 #3

McGuireWoods Consulting

Members of the North Carolina General Assembly were back in Raleigh this week for what many are hoping is the last time until January. After the Joint Select Committee on Congressional Redistricting met the week before to begin the process of redrawing the state's congressional districts, members of both House and Senate Redistricting Committees met to discuss which maps all members would be voting on. In addition to a week full of redistricting, two bills made their way out of conference committee and onto the floor. 

As it stands, the House and Senate plan to jointly adjourn until January 14, 2020 once their work is wrapped up for this November session. It is unclear when exactly that adjournment will take place.

Disaster Recovery

With the risk of federal matching funding at risk of running out by the end of the month for states impacted by recent storms, the legislature took action on a disaster relief bill to ensure North Carolina is able to receive the funds needed. HB 200: 2019 Storm Recovery/Var. Budget Corrections is a compromise between the House and the Senate, both of which moved forward with their own versions of a disaster relief bill prior to their October 31 adjournment. The House's version of a disaster relief bill included the federal matching funds as well as funding for resiliency projects, however, the Senate's original version of a relief bill only included the funding needed for federal matches. 

Rep. Chuck McGrady (R-Henderson) who sponsored the House's original disaster relief bill, presented the bill on the floor Thursday afternoon. He pointed out that while the funding for a number of resiliency projects the House supported was not included in the bill, the Senate was supportive of the project ideas. Rep. McGrady indicated that the Senate did not feel now was the right time to fund those projects, but that they may come up in a different bill come the January session.

HB 200 would provide the funding needed for all of the federal matches. In total, the bill allocates $121,585,594 to the General Fund to be used as a State match for federal disaster assistance programs for Hurricane Florence, Matthew, Michael, and Dorian. The bill would also make up for the funding that was not approved by the federal government for Hurricane Dorian relief using state funds. The bill provides $15 million for Golden L.E.A.F., $5 million to the Department of Agriculture for stream debris removal, $1.7 million as a directed grant to Hyde County for repairs to the Ocracoke School, $500,000 to the Wildlife Resources Commission to fund two grant programs administered by the Outdoor Heritage Advisory Council, among other appropriations to aid with storm repairs. 

In addition to the storm recovery sections of the bill, the conference report also contained several technical correction provisions needed in large part because of the way the budget process has unfolded over the course of the last several months, approving a series of mini-budget proposals rather than one comprehensive budget bill. HB 200 includes a provision to allocate the $13,397,000 needed to fund the Rural Health Care Stabilization Fund. The bill to establish the fund has already become law, however, did not include the funding needed to implement the program. While the most of the technical correction provisions were non-controversial, a provision to require all funds received by the state to be deposited into the state treasury stirred up some debate among members on exactly what the provision will do. The Governor's office urged lawmakers not to support this provision, arguing that the provision would jeopardize North Carolinian's access to funds from several lawsuit settlements. Several lawmakers argued against the statement from the Governor's office, stating that the provision would not impact any of the things cited by the Governor's office because state law already has a process in place for how those funds are to be handled. 

Even with some debate over what a handful of the technical corrections would actually do if passed and a number of members expressing concerns that the resiliency funding was not included in the bill, HB 200 passed through both the House and the Senate Thursday afternoon. With a vote of 100 -1 in the House and 45 - 0 in the Senate, the bill now awaits further action from the Governor. 

Transportation Funding

Both the House and the Senate supported a bill to provide the North Carolina Department of Transportation (DOT) with much-needed funding. The House passed SB 356: DOT Cash and Accountability in a 101-1 vote before sending it over to the Senate where it passed by unanimous vote Thursday afternoon. Following a number of severe weather storms over the last few years, Map Act litigation, over 900 transportation projects across North Carolina, and without a state budget, DOT faced a cash shortage forcing the Department to consider laying off employees and stalling a series of construction projects. Lawmakers have been brainstorming ways to prevent further project delays while also ensuring DOT is held responsible for their spending for over a month. SB 356 would provide some relief to the Department.

The bill would authorize the issuance and sale of $400 million in Build NC Bonds, directs the transfer of $100 million from the Highway Trust Fund to the Highway Fund as a loan to be paid back through two $50 million increments, and establish the Transportation Emergency Reserve to be used for major disaster expenses. The fund will start with a $64 million transfer from the General Fund and will be limited to $125 million in total funds.The bill will also limit the amount of funds DOT will be allowed to pay out each fiscal year to $150 million and removes the requirement of the Department to repay the $90 million loan that was approved by the General Assembly earlier this session. All in all, the bill provides DOT with around $290 million in funding. 

SB 356 also contains a number of additional reporting requirements that must be met by the Department to ensure accountability and transparency. Among the new reporting requirements, DOT will be required to release a Weekly Cash Watch Report, similar to the General Fund Cash Watch report that is released by the Office of State Controller. The bill directs the Office of the State Auditor to conduct a performance audit of the Department by March of next year and would require DOT to submit a financial management report to the Joint Legislative Transportation Oversight Committee by January 15, 2020. 

While members from both political parties, and those in both the House and Senate, agreed that the bill may not be a perfect solution to DOT's cash problems and is only an incremental change at getting the Department on track, they also agreed that something must be done. After passing through both chambers on the Thursday, the bill now sits on the Governor's desk. 

Congressional Redistricting 

With the filing deadline for congressional candidacy a little over a month away, members of both chambers' redistricting committees were back this week to finish redrawing the state's congressional district maps. The House Redistricting Committee met early in the week to discuss which map drawn by the Joint Select Committee on Congressional Redistricting last week they would take up for consideration. The committee ultimately decided on an amended version of a map drawn by Sen. Paul Newton (R-) during the Joint Committee's meetings. After passing through the Redistricting Committee, HB 1029: C-GoodwinA-1 made its way to the floor for a full House vote where both Republicans and Democrats offered amendments to the map. Only one of the six proposed amendments was adopted - the other five were defeated along party lines. 

Republicans largely stood behind Rep. David Lewis (R-Harnett) on his proposed map, while Democrats argued for more competitive districts. Democrats argued that not enough change was made to the districts cited in the lawsuit that lead the three-judge panel to strongly encourage the legislature to redraw the state's congressional districts or risk delaying the 2020 primaries. Democrats also advocated for a more transparent process, excluding incumbency as apart of the redistricting criteria, and hopes of establishing a new process to draw congressional and state legislative districts before the next census data is released and new maps have to be drawn once more. 

On the other side of the aisle, Republicans stood by the proposed maps as a best effort to accomplish what the courts recommended while taking into account a short timeline and reasonable efforts to keep incumbents in the same districts. Ultimately, the House passed HB 1029 in a 55 - 46 vote along party lines. The bill made its way over to the Senate Friday morning and will be on the floor for a vote in the afternoon. However, work on the maps may continue into next week. If the Senate adopts any amendments to the version of the congressional districts sent over by the House, House members will have to return in the coming days to vote on the Senate's changes. 

Upcoming Legislative Meetings

Monday, November 18

10:00AM: Child Fatality Task Force - Intentional Death Prevention Committee

1:00PM: Joint Legislative Program Evaluation Oversight Committee

Wednesday, November 20

11:00AM: Joint Legislative Commission on Governmental Operations, Subcommittee on Atlantic Coast Pipeline

2:00PM: Joint Legislative Commission on Governmental Operations

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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