Special Budget Edition: North Carolina General Assembly Week in Review

by McGuireWoods LLP

NCGA Adjourns the 2015 Session

In the early morning hours of September 30, 2015, the House and Senate gave final sign off on the Senate Joint Resolution (SJR) 721, Adjournment Resolution. The resolution ended the “long” session, which began in January of this year.

The SJR sets April 25, 2016 as the date the General Assembly will reconvene next year. Among the bills that may be considered during the 2016 “short” session are: appropriations bills, bills amending the NC constitution, bills that have crossed over from the originating chamber to the other chamber, bills recommending studies, bills with recommendations from commissions or committees, local bills, and bills vetoed and returned by the Governor. After adjournment the Governor has 30 days to act on a bill and is required to reconvene the General Assembly if a bill is vetoed.

During the interim, in between adjournment and the date the General Assembly reconvenes, the Speaker and President Pro Tempore may authorize oversight committees to meet. Usually the General Assembly will pass a bill at the end of session authorizing agreed upon studies and reports to be completed by the oversight committees during the interim. However, this year the Speaker and President Pro Tempore chose not to pass such a bill and rather to complete any studies through the Legislative Research Commission (LRC), chaired by Senator Tom Apodaca (R-Henderson).

Read SJR 721 here.

NCGA Passes Bond Bill

Wednesday, just after midnight, the House gave final approval to HB 943, Connect NC Bond Act of 2015. The bill authorizes the State to issue $2 billion in bonds for economic development and infrastructure projects, upon the approval by a majority of the voters. The bond issue will be included on the NC Presidential Primary election ballot in March of 2016. The economic development and infrastructure projects funded by the bond must be consistent with Governor Pat McCrory’s Connect NC Plan. The bond package has been a priority for the Governor this session.

The following projects are among those to benefit from the bond funding and are included in HB 943:

  • $980,000,000 in funding for various building renovations and construction for several University of North Carolina universities
  • $350,000,000 in funding for construction, repairs, and renovations for various NC Community Colleges
  • $312,500,000 for Local Parks and Infrastructure
  • $70,000,000 for Readiness Centers for the National Guard
  • $179,000,000 for two Agriculture projects at NC State University and Agriculture and Consumer Services
  • $100,000,000 for State Parks and Attractions
  • $8,500,000 for the Samarcand Training Academy in Moore County

With the finance portion of the state’s budget, HB 97, contingent on HB 943 becoming law, the passage by both House and Senate chambers was necessary before January 1, 2016. The bill will now go to the Governor.

Read HB 943 here.

Technical Corrections

Two bills passed the House and Senate this week making technical corrections to general law and the 2015 Appropriations Act, HB 97. HB 259, General Government Technical Corrections, the House concurred to Senate changes early Wednesday morning. The bill is largely technical changes to HB 97.

The House took the lead on the bill making technical corrections to general law, SB 119, GSC Technical Corrections 2015. The House added several policy provisions to SB 119, so the Senate voted not to concur and sent SB 119 to a conference committee just after midnight Wednesday morning. Negotiations on the bill were finalized and presented around 4:00 am on Wednesday. Most of the policy provision were struck from the bill, leaving mostly technical changes. Sen. Brown stated on the floor the policy provisions struck from the conference report for SB 119 would be left for debate during the 2016 Short Session.

Read HB 259 here.
Read SB 119 here.

Farm Act passes NCGA

On Monday the Senate failed to concur to the House Committee Substitute for SB 513, North Carolina Farm Act of 2015. A conference committee was appointed, led by Rep. Jimmy Dixon (R-Duplin) and Sen. Brent Jackson (R-Sampson). Both the House and Senate adopted the conference report on Tuesday, the House doing so just before midnight.

The conference report added a section establishing a policy supporting sound science in agriculture, restored the transfer of the captive cervid program from the Wildlife Resources Commission to the Department of Agriculture and Consumer Services, removed the section allowing the burning of polyethylene agricultural plastic used in connection with agricultural operations as an alternate disposal, removed the section authorizing the development of a pilot American Eel Aquaculture Plan, and removed the section establishing a permit for farm wineries. Other provisions included in the final version of the bill include:

  • Increase the NC Horse Council assessment fee from $2 to $4 per ton of commercial horse feed
  • Provides that an employer does not have to withhold State income tax on paid to an H-2A agricultural worker where federal income tax is not required to be withheld
  • Directs DOT to establish rules to allow permitted oversized vehicles to operate between sunset and sunrise, including Sundays and certain holidays (current law does not permit operation on Sundays and holidays)
  • Allows any person to operate an all-terrain vehicle on a public street when in connection with farming operations
  • Prohibits the Secretary of Environment and Natural Resources from excluding any area from shellfish cultivation because of the presence of submerged aquatic vegetation, unless prohibited by federal law
  • Makes changes to the present-use value taxation
  • Prohibits termination of certain Agricultural Development and Farmland Preservation Trust Fund easements, for the purpose of economic development
  • Makes modifications to the implementation of animal waste management system regulations, including modifications to certain swine waste management system performance standards
  • Clarifies what structures are included under the definition of “farm building”

The Governor signed the bill on Wednesday.

Read SB 513 here. Read the conference report summary here.

Governor signs Economic Development Bill

Wednesday, the Governor signed HB 117, NC Competes Act, into law. As previously reported, the bill makes changes to the Job Development and Investment Grant (JDIG) and OneNC programs, several changes to the tax code, and a section dealing with tax compliance and fraud prevention. However, HB 117 does not address the sunset of several tax credits including renewables and research and development. The finance portion of the budget, HB 97, was contingent on HB 117 becoming law before January 1, 2016.

Read HB 117 here.

Elections Changes

Two bills have passed the General Assembly in the last seven days that will change the upcoming NC election cycle. HB 373, Elections, passed the General Assembly last week. HB 373 moves the North Carolina Primary date to March 15, 2016 and included a controversial provision that allows for the establishment of affiliated party committees. The Governor signed the bill on Wednesday .

Tuesday the House passed HB 8, Court of Appeals Election Modifications. The bill will change the NC Court of Appeals races to partisan elections.

Another election related provision was contained in the technical corrections bill, SB 119, which passed Wednesday morning. The provision permits Council of State members of the same political party to create an affiliated party committee. Under the legislation, the committee would be able t o support the election of candidates of the NC Council of State of the same political party. This provision, as with HB 373, allows for but does not require the establishment of these committees. This provision, however, is contingent on HB 373 becoming law.

All three bills have been presented to the Governor.

Read HB 8 here.
Read HB 373 here.
Read SB 119 here.

Changes to E-Verify Compliance

This week, HB 318, Protect North Carolina Workers Act, passed both House and the Senate chambers. The bill requires E-verify compliance in certain governmental contracts, clarifies what documents may be used to determine identification or residence, prohibits local governments from adopting sanctuary city ordinances, and prohibits the Department of Health and Human Services from issuing waivers to exempt food stamp recipients from federal work requirements.

The bill will now go to the Governor.

Read HB 318 here.

Regulatory Reform

Late Tuesday night, the House adopted the conference report to HB 765, Regulatory Reform Act of 2015. The Senate adopted the report on Monday. The bill makes several statutory changes including regulatory changes to various administrative statutes, eliminating certain statutes and regulations, and modernizing or simplifying regulations.

Some highlights from the conference report include:

  • Shifting the burden of proof in certain contested cases.
  • Exempts small business entities buying or selling entity-owned property.
  • Amends the definition of “employee” under the Workers’ Compensation Act to exclude volunteers and officers of certain nonprofits.
  • Expands the Good Samaritan law to breaking into or out of railroad cars, motor vehicles, trailers, aircraft, boats or other watercrafts.
  • Directs the Environmental Review Commission to study open and fair competition with respect to materials used in wastewater, stormwater, and other water projects.
  • Creates two studies on 1) electronic recycling programs and 2) permitting and recycling programs for utility-scale solar projects.
  • Amends the risk-based remediation statutes.
  • Amends the definition for “prospective developer” under brownfields redevelopments.
  • Makes amendments to isolated wetlands laws.
  • Studies and amends stormwater laws.
  • Creates a study of flood elevations and building height requirements.

The bill will now go to the Governor.

Read HB 765 here.

Health and Human Services Legislation

The House concurred on Tuesday to a Senate committee substitute to HB 297, End Marketing/Sale Unborn Children Body Parts. The legislation requires informed consent for the donation of the remains of unborn children, prohibits the sale of any aborted or miscarried material or remains of an unborn child, and limits the use of state funding for teen pregnancy prevention programs by prohibiting DHHS to use state funds to renew or extend existing contracts or enter into new contracts for teen pregnancy prevention programs with providers that perform abortions. The legislation passed the House 79-29. The bill now goes to the Governor.

Read HB 297 here.

Late on Tuesday, the Senate gave final approval to a House committee substitute for SB 698, Legacy Medical Care Facility/CON Exempt. The bill now provides for certain exemptions under the Certificate of Need (CON) law for newly defined “legacy medical care facilities.” A “legacy medical care facility” is a health care facility that is not currently in operation and has not been in operation for at least six months, but has been licensed and providing services within the past two years. The bill will help recently closed hospitals, such as hospitals in Yadkinville and in Belhaven. The bill now goes to the Governor.

Read SB 698 here.

Other Passed Legislation

Other legislation of note passed this week:

SB 670, Term Limits for BOG Members.
SB 670 limits members of the University of NC Board of Governors to three terms. A second provision, establishing a process for selection of a UNC System president, was added to the bill on Tuesday before the House and Senate gave final sign off on the legislation.

SB 676, Autism Health Insurance Coverage.
After being sent to Rules at the end of June, SB 676 passed both chambers of the General Assembly this week. The legislation provides for insurance coverage for the treatment of Autism. It requires health benefits plans to provide coverage for the screening, diagnosis, and treatment of Autism.

SB 694, Reegan's Rule/Enforce Pharm. Ben. Mgt.
SB 694 establishes legislation for the purpose of encouraging parent education of Type I diabetes during certain well-child visits and amends the law pertaining to pharmacy benefits managers to create a $100-$1,000 per day per drug penalty if a pharmacy benefits manager is found in violation of the law.

SB 313, Industrial Hemp.
SB 313 promotes and encourages the development of an industrial hemp industry in NC.

HB 647, Epi Pens in All Child-Serving Businesses.
HB 647 authorizes health care providers to prescribe and pharmacists to dispense epinephrine auto-injectors to authorized entities other than schools for the emergency treatment of anaphylaxis.

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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