North Carolina General Assembly Week in Review

McGuireWoods LLP

Budget Conferees

The North Carolina General Assembly returned to Raleigh from a 10-day recess on Monday, July 13. House and Senate members have not yet come to a compromise regarding their very distinct budget proposals. However, last week both the House and Senate took one step toward compromise and appointed a plethora of conferees, 114 members in total, to the conference committee for House Bill 97, the budget bill.

Last Tuesday, the House appointed 82 conferees. Representative Nelson Dollar (R-Wake) was appointed as Senior Chairman to lead the House conference committee. The House’s conference committee includes 19 Democrat House members and 1 Unaffiliated House member.

Last Thursday, the Senate appointed 32 members to its conference committee, comprising of all the Republican Senate members excluding Senator Bob Rucho (R-Mecklenburg). Senator Rucho was the only Republican Senate member not to vote for the final budget. The Senate conference committee will be led by Senators Harry Brown (R-Onslow), Kathy Harrington (R-Gaston), and Brent Jackson (R-Sampson).

The Senate also announced last week that it plans to conclude all work in its committees this week. The Senate will stop holding committee meetings after this week, thus if a bill is still in a Senate committee after Thursday it most likely will have to wait until the short session to be heard.

See House Bill 97 conferee list here.

Contingency Plan

Before leaving for recess the House and Senate passed a continuing resolution (CR), a resolution agreed upon and passed by both the House and Senate chambers to keep state government running on a temporary basis until a final agreement can be reached on the budget. The CR is set to expire August 14, 2015 at 11:59 PM.

So what happens in the event the House and Senate chambers do not pass a budget before midnight on August 14, 2015? The result could be a lapse in state and federal budget authority and need for a state Continuity of Operations Plan (COOP), or the legislature will need to pass an additional CR, which would allow for funding to continue in the meantime.

Under the current CR, funding is maintained at 100% for current for state government programs and services. However, according to a memorandum circulated last week from the Office of State Budget and Management (OSBM) to state agencies, under a COOP some government operations may not continue. The “minimum functions and services that must be performed for immediate response to issues of public lives or safety, or to avoid catastrophic loss of state property,” must be identified by each department and incorporated into a statewide plan.

Although the memorandum states it “fully expects that the 2015-17 biennial budget . . . will be enacted without a lapse in budget authority,” OSBM has requested all department heads submit their plans by July 27, 2015.

Read the current CR here.

Public hearing scheduled on Regulatory Reform Act of 2015

On July 2, 2015, the Senate gave approval to HB 765, Regulatory Reform Act of 2015. Because the Senate adopted changes to the house bill, HB 765 was sent back to the House for a concurrence vote. When the bill was originally passed by the House, it was a one-page environmental technical correction bill. After the Senate took possession of it, HB 765 became a 58-page environmental regulatory reform bill.

Last week, instead of bringing the bill up for a concurrence vote, the House placed it into the House Environment committee. Tomorrow, Tuesday, July 21, 2015, at 10:00 am the House Environment committee will hold a two-hour public hearing on the regulatory reform bill.

Read a summary of H765 here.

House continuing study of H482, Employee Misclassification Reform

On Tuesday, July 14, 2015, a five-person subcommittee of the House Judiciary II committee heard public comment regarding HB 482, Employee Misclassification Reform. The primary issue of the meeting focused on the classification of employee versus independent contractor, while other issues included a provision on prohibiting employee retaliation, Industrial Commission stop work orders prohibiting companies from operating without proper workers’ compensation, and technical issues raised by staff and state agencies.

The NC Department of Revenue, NC Justice Center, NC Chamber, and Retail Merchants, were among those testifying before the committee. The NC Industrial Commission submitted recommendations to the committee, but did not present at the July 14 meeting.

The subcommittee will meet again tomorrow, Tuesday, July 21, 2015, at 1:00 pm, and is expected to release a new draft bill in the coming weeks to the full House Judiciary II committee.

Watch a video from the meeting here. Read a summary of H482 here.

Protest Petitions to be eliminated with H201, Zoning Changes/Citizen Input

Last Wednesday, the House passed House Bill 201, Zoning Changes/Citizen Input. The bill eliminates the protest petition option for residents, which required a city council to vote by supermajority, (three-fourths votes), rather than by a simple majority, on rezoning proposals. Instead the bill requires the clerk of the board to deliver written statements regarding a proposed amendment from any resident or property owner in the city to the city council if submitted at least two business days prior to the proposed vote.

If signed by Governor McCrory, the law would apply only to zoning changes initiated after August 1, 2015. Governor McCrory is expected to sign the legislation, stating "I’ve always felt majority rule should be the case in all governments unless they're veto overrides and things of that nature," according to the Charlotte Observer.

Read the bill here.

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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