Continuing Budget Resolution Number Three

Two months into the fiscal year and the government is still operating under a continuing resolution (CR). With the CR set to expire at 11:59 pm on Monday, August 31, House and Senate leadership agreed this week to extend the CR through midnight September 18 in a new CR, House Bill 18.

There was significant movement this week on budget negotiations, but the chambers still seem to be in disagreement about big issues. House and Senate leadership met yesterday morning with Gov. Pat McCrory at the Executive Mansion, but no new agreements were reported as a result of the meeting.

Despite some disagreement, the subcommittees were given their target spending numbers this week. Subcommittee chairs are now working on their budget areas while leadership continues to negotiate items such as the redistribution of the local option sales tax, economic development tools, teacher assistants, drivers education, and Medicaid reform.

The chambers have three weeks to work out their budget differences in order to meet the 11:59 pm deadline on Friday, September 18.

Read the new CR here.

Spending Targets

Last week, the House and Senate agreed to spend a total of $21.735 billion in the budget, HB 97. Wednesday the chambers further agreed to subcommittee spending targets.

Education (public schools, University of North Carolina System, community colleges): $12.05 billion

Health and Human Services (Medicaid, public health, mental health): $5.12 billion

Justice and Public Safety (courts, prisons, State Bureau of Investigation): $2.44 billion

Natural and Economic Resources (commerce, environment, agriculture): $372 million

General government (Dept. of Cultural Resources, Office of the State Auditor, Dept. of Revenue, other state agencies): $425 million

Debt service: $715 million

Additional salary and benefits: $349 million

Reserve to handle unresolved budget matters: $121 million

Capital projects: $30 million

Read HB 97 here.

Senate appoints conferees to HB 117

Over the last month, HB 117, NC Competes Act, passed the Senate chamber, but was rejected by the House, 111-2, in a motion not to concur with the Senate changes. The vote outcome was due largely to the Senate’s addition to a change in the local option sales tax (LOST) distribution formula.

Yesterday, one week after the House appointed conferees, the Senate appointed its conferees for HB 117. Chairing the conference committee for the Senate is Majority Leader Sen. Harry Brown (R-Onslow). Other Senate conferees include: Sen. Tom Apodaca (R-Henderson), Sen. Bob Rucho (R-Mecklenburg), Sen. Tom McInnis (R-Richmond), Sen. Chad Barefoot (R-Wake), Sen. Tamara Barringer (R-Wake), Sen. Bill Rabon (R-Brunswick), Sen. Rick Gunn (R-Alamance), Sen. Ralph Hise (R-Mitchell), and Sen. Tommy Tucker (R-Union). Four Democrats that voted in favor of HB 117, are also on the conference committee: Sen. Floyd McKissick, Jr. (D-Durham), Sen. Angela Bryant (D-Edgecombe), Sen. Don Davis (D-Greene), and Sen. Ben Clark (D-Hoke).

The conferees will try to work out differences between the House and Senate proposals. One of the biggest issues in the bill is the Senate’s proposal to change the LOST distribution formula. The Senate’s proposal would change the current formula (75% of the tax being distributed by point of collection and 25% of the tax being distributed per capita), to a 50/50 split, half to be distributed by point of collection and half to be distributed per capita.

The House remains adamantly opposed to changing the LOST distribution formula. The Speaker went on record this week stating that the House Republican caucus voted overwhelmingly against the redistribution of LOST.

Negotiations remain contentious and it remains uncertain as to how comprehensive economic development policies will pan out, either through HB117 or the budget.

Read HB 117 here. See the bill summary here.

Unemployment Insurance bill goes to the Governor

The Senate concurred to House changes to SB 15, Unemployment Insurance Law Changes, on Thursday. Only seven Senators voted against the bill.

The bill adds quarterly reporting requirements by the Division of Employment Security (the Division) to several Joint Legislative Oversight Committees, increases beneficiaries’ requirement to make two job contacts per week to five job contacts per week, requires the individual seeking benefits to present photo identification to the Division, limits the number of weeks an individual may receive benefits, changes the weekly benefit amounts, creates a Board of Review for the purpose of determining appeals, policies and procedures, makes changes to the limitations on suits or proceedings for unpaid contributions, and changes charges to the employer’s account to quarterly.

The bill now goes to the Governor.

Read SB 15 here.

Uber bill passes final legislative hurdle

On Thursday, the House passed SB 541, Regulate Transportation Networks Companies. The bill requires transportation network companies, such as Lyft, Sidecar, and Uber, to buy insurance coverage for their drivers and passengers. The bill also requires the company to preform nationwide criminal background checks on drivers.

Uber publically endorsed the legislation, sending an email to its users on Thursday announcing the passage of SB 541. The email urged its users to “take a moment and join us in thanking bill sponsors Sen. Bill Rabon, Sen. Floyd B. McKissick, Jr., and Rep. Bill Brawley for standing up for your right to a safe, dependable, on-demand ride!”

The bill now goes to the Governor.

Read SB 541 here.

Unclaimed Life Insurance Benefits

On Tuesday the Senate passed SB 665, Unclaimed Life Insurance Benefits, without debate. The bill was presented to the Governor yesterday.

SB 665 requires insurers to perform a semiannual comparison report with the Death Master File, or similar file, of its in-force policies, annuities, and account owners, with some exceptions. The requirement is prospective for all policies and annuities entered into beginning October 1, 2015 and after. However, the requirement is retroactive for any policy or annuity issued by a company that has or does engage in asymmetric conduct. The bill does not modify or supersede the authority of the State Treasurer to examine records and conduct an audit, nor its ability to request or access records of an insurer and visit an examination of the insurer's records under Chapter 116B, Escheats and Abandoned Property, of the General Statues.

Read SB 665 here.