North Carolina General Assembly Week in Review - June 2022 #3

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The General Assembly is quickly approaching the end of their legislative short session. Republican leaders have indicated their plan is still to release and vote on the short session budget next week. Their plans are for the session to formally conclude by Friday, July 1. Senate and House leaders have spent the week meeting to negotiate additional raises for state employees and teachers, as well as potential tax cuts, and spending plans for an expected budget surplus of more than $6 billion. Negotiations hit a potential roadblock this week with the House refusing to take up the Senate's healthcare expansion priorities. At the conclusion of House session Thursday morning, House Speaker Tim Moore (R-Cleveland) told members, "We're in the final hours of negotiating the budget, and we'll get it done, or we won't." Senators and House members have been told to expect a long week of votes next week with the potential for a rare day of votes Friday expected.

Sports Betting

In 2018, the US Supreme Court struck down a federal law that prohibited sports betting nationwide. This led to major stakeholders and government leaders spending years to legalize sports wagering on a state-by-state basis. According to the American Gaming Association, over 30 states, plus the District of Columbia, authorize sports wagering in some capacity.

Currently in North Carolina, sports wagering is legal, but only at the two casinos operated by the Cherokee Nation tribe. A top priority of many North Carolina lawmakers for over a year has been the expansion, regulation, and legalization of wagering on sports across the state. The original bill to legalize sports betting, Senate Bill 688: Sports Wagering, was introduced in 2021 and passed the Senate with members of both parties voting for and against the measure. That bill would authorize, regulate, and tax sports wagering in the state, and task the Lottery Commission with the responsibility of regulating the industry. The Commission would issue licenses and collect license fees from operators of sports wagering platforms. The bill would authorize sports wagering via mobile devices, computer terminals, or at specifically designated sports facilities or major sports tournaments. Additionally, that bill would create the North Carolina Major Events, Games and Attraction Fund to use revenue generated by sports wagering to provide grants to promote new major events in the state, such as a Super Bowl.

Although SB 688 passed the Senate without much public fanfare, getting the bill through the 120-member House of Representatives was a more difficult task. In an attempt to resolve differences that many House members had with SB 688, Senate and House leaders introduced Senate Bill 38: Sports Wagering Amendments earlier this week. The bill would amend SB 688 if it were to become law. SB 38 would have raised the 8% income tax to a new 14% privilege tax on sports wagering operators to be paid monthly and reduce the amount of time that operators could deduct promotional credits from the tax. The bill would maintain the $2 million to be distributed annually for problem gambling and create a priority list of disbursements of revenue proceeds, including to parks and recreation grants, and to Historically Black Colleges and Universities, as well as to the Universities of North Carolina at Asheville and Pembroke.

Both SB 38 and SB 688 were passed by multiple House committees throughout the week but ran into complications on the House floor Wednesday evening. The first bill to be heard on the floor was SB 38. Rep. John Autry (D-Mecklenburg) succeeded at passing an amendment to remove betting on all college sports, citing the points shaving controversy of the Dixie Classic in the early 1960s. The bill passed by a slim 51-50 margin.

Next on the calendar was SB 688. Members on both sides of the aisle spoke against the bill. Several members also spoke in favor, referencing the economic benefits of capturing the revenue, rather than continuing to allow illegal bookies in other states to reap all the rewards. The bill failed by a 50-51 vote, followed by a procedural vote to keep the bill alive by referring it back to committee, which also failed.

The future of sports wagering in North Carolina is unclear, and with the short session scheduled to end next week, proponents are figuring out what to do next. Rep. Jason Saine (R-Lincoln) who managed the bills on the House floor this week, told reporters after session that lawmakers “may end up with a bill before the end of session that will serve for sports betting. [We] don’t know yet.”

Medicaid Expansion

Last month, Senate Republicans introduced House Bill 149: Expanding Access to Healthcare, which would have made North Carolina the 40th state to expand Medicaid under the Affordable Care Act. In addition to providing Medicaid coverage eligibility to working adults with incomes up to 133% of the federal poverty level, the Senate bill would amend the Certificate of Need cost thresholds and review criteria and grant full practice authority for Advanced Practice Registered Nurses (APRNs). HB 149 passed with a nearly unanimous vote in the Senate but has not moved in the House.

Up until this week, leadership in the House has been adamant that consideration of closing the health insurance coverage gap by expanding Medicaid would be too heavy a lift for the end of this year’s legislative work session. However, on Thursday morning, House Speaker Tim Moore (R-Cleveland) presented a plan to counter the Senate bill. Unlike the Senate’s bill, the House bill, Senate Bill 408: Rural Healthcare Access & Savings Plan Act, would not immediately expand Medicaid. The bill would create a pathway to Medicaid expansion by creating a study committeee, the Legislative Medicaid Rate Modernization and Savings Oversight Committee, to examine the best way to close the coverage gap. One reason for doing it this way, Speaker Moore said during Thursday morning’s House Health committee meeting, was to ensure the requirements of the North Carolina plan are acceptable to the federal Centers for Medicare and Medicaid Services. For example, both the Senate and House versions have a work requirement, but if the federal government does not accept the work requirement, as they have rejected in other states, the House version lays out a workforce development program to support Medicaid beneficiaries out of work.

The House version sets a timeline of mid-December to vote on a Medicaid expansion proposal. This would still be within the timeframe to take advantage of the federal government’s one-time infusion of $1.5 billion to states who expand Medicaid before the end of 2022. The House bill suggests using a billion of those dollars to address the state’s need for mental health services and treatment for substance abuse disorders.

Like other major polices pending in the General Assembly, the future of Medicaid expansion is uncertain. When the House bill was released late Wednesday evening, Senate President Pro Tempore Phil Berger (R-Rockingham) released a statement saying, the “House should pass the Senate version of House Bill 149, or we should incorporate it into the budget.” The House bill was only up for discussion in the House Health committee on Thursday morning and does not yet have a timeline for being brought up for a formal vote.

Hemp Legalization

The chances of hemp being permanently legalized in North Carolina during this year’s legislative short session became bleak after the annual omnibus agricultural bill, Senate Bill 762: North Carolina Farm Act of 2022, was presented to the House Committee on Agriculture this week without the hemp legalization section. Bill sponsor, Senator Brent Jackson (R-Sampson), expressed his disappointment to the committee for removing the section, noting that hemp could be an economic driver for rural economies. Nonetheless, House members suggested that a standalone bill sitting in the Senate that would legalize hemp permanently could still pass. The Farm Act received a favorable report and sets up a study on the highly controversial “right to repair” provision of the bill, which garnered public attention as it passed the Senate. It also clarifies changes made to building code restrictions placed on farm-use buildings that are supported by the state Fire Marshal.

Upcoming Legislative Meetings

Monday, June 27:

3:00PM: House Session
4:00PM: Senate Session

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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