Weekly Update from the NC State House - June 2014: Signs you are near adjournment may include but are not limited to...

by Nexsen Pruet, PLLC

Symptoms of Adjournment

Signs you are near adjournment may include but are not limited to a budget conference committee, bills being stripped to carry sweeping policy changes moving very quickly, bills held hostage across chambers, shortness of breath induced by prolonged opposition, nervousness, migraine and fatigue.  If budget stalemate persists for more than 7 days, doctor may prescribe more coffee.  In case of policy overdose, contact a poison control center immediately, assuming it gets funded.  Keep out of reach of children.

Monday evening the Senate failed to concur with the House budget proposal 0-49, sending it to a conference committee made up of appropriations chairs from both chambers. Tuesday morning, before beginning the conference process, the Senate appropriations subcommittees met to review the differences between the House and Senate budget proposals.  Then Wednesday the full Senate Appropriations committee met to further hear the budget differences, followed by a separate individual hearing Thursday afternoon on the House Medicaid budget.  Gentler words were used describing the coal ash spill.

Meanwhile the House pushed forward, using committee meetings Wednesday and Thursday to gut four bills which resurfaced as lengthy omnibus policy initiatives, including regulatory reform, election laws, environmental laws and issues around criminal justice.

Sen. Apodaca, the Senate Rules Chairman filed the Adjournment Resolution last week for next Friday, June 27th, 2014.  This very optimistic adjournment date would mean that the conference committee has come to an agreement and produced a compromise budget that is approved by both chambers.  After the full NCGA approves the budget, there are still some housekeeping matters that must be addressed as well as any unfinished policy items.  Barring the Governor calling for a special session, the resolution would officially end the business of the 2013-14 NCGA upon its passage, not to return until January 2015 with newly elected or reelected legislators.  It is very unlikely this adjournment date will be met.

Medicaid Reform

The House and Senate both agree that reform in the Medicaid system needs to happen, however the approach each chamber visualizes for that reform are at odds.  Both chambers now also agree that Medicaid should move towards capitation, although the Senate plan would move much more quickly towards capitation, as early as 2015.  The House was originally opposed to this notion, but a PCS to the Medicaid reform bill H1181 Thursday in the House HHS committee, adopted a five year transition to capitation, rejecting the HMO model in favor of an ACO model.

Many of the respective positions of reform clash.  The Senate plan would remove the Division of Medical Assistance (DMA), which houses Medicaid from under DHHS and create a new department solely for Medicaid.  The Senate would also turn over management of Medicaid services to HMO’s, set roughly $100 million more aside to cover anticipated cost overruns and eliminate eligibility for the aged, blind, disabled and medically needy.

The House bill that was unveiled Thursday aligns closely with a model from the Medicaid Reform Advisory Group which met during the interim session.  The bill would:

  • Retains DMA under DHHS
  • Designate the management of Medicaid services to provider led Accountable Care Organizations (ACO’s)
  • Transitions Medicaid providers from fee-for-service to capitation
  • Create a pilot program for the intellectually and developmentally disabled (IDD) population to be managed by an LME/MCO to coordinate both their mental and physical care.  Under the language as written, only one LME/MCO would qualify to participate in the pilot making this provision a sole source contract.

Most groups that spoke on the legislation were generally supportive, but expressed concerns with the last section of the PCS regarding the IDD population.

The bill has a serial referral to the full House Appropriations committee and will likely be heard in next week.

NC Medicaid road map approved by House committee – Daily Reflector

Medicaid funding, reform efforts continue to divide House, Senate – WRAL

Regulatory Reform

The House Wednesday stripped S493 in the Finance and it emerged as a 35 page omnibus regulatory reform bill containing a multitude of policy initiatives.  Among the provisions, the bill would:

  • Allow breweries to self-distribute unlimited amounts of “private label” beer
  • Repeal protest petitions against a zoning map amendment
  • Make mug shots confidential and exempt from public record disclosure unless the person is charged with a felony or the officer or agency determines release of the photo reasonably necessary to secure the public’s safety
  • Allow private companies to serve eviction papers
  • Provide additional ethics requirements for members of city governing boards with a population of more than 75,000
  • Require certain health benefit plans to provide coverage for autism treatments
  • Regulate the setting of maximum allowable cost price by a pharmacy benefits manager
  • Prohibit persons under the age of 18 from using tanning beds
  • Waives conflict of interest in contracting for materials or services for commissioners and employees of hospital authorities as long as they are not involved in making or administering the contract.

Some provisions were rejected including relaxed restrictions for billboard vegetation removal and public utility regulatory fee structure changes.  Members from both sides of the aisle expressed concern with the “Christmas tree” bill, dubbed so for being a conglomerate bill containing a number of unrelated policy items.   The bill is also lacking in the air quality provisions contained in the Senate version.  Because of substantial controversy, this bill was sent back to committee, either for further work or burial.

Overhaul of state regulations clears two House committees – WRAL

Unemployment Insurance

Thursday the House voted to concur with the changes the Senate made to H1069 Unemployment Insurance Law Changes 69-46.  The legislation now awaits action from the Governor.  The bill would:

  • Clarify that UI claim information is confidential unless the disclosure is permitted by federal regulation, and would exempt UI information from the public records disclosure requirements
  • Authorize the Division of Motor Vehicles (DMV) to disclose social security numbers to Division of Employment Security (DES) for the purpose of verifying employer and claimant identity
  • Require UI claimants to contact 5 potential employers per week
  • Clarify DES authority to garnish and attach the credit card receipts of delinquent taxpayers
  • Eliminate the variable range for UI duration and base the duration of UI benefits only on the unemployment rate. Under the proposal, all UI claimants would receive the maximum number of weeks of UI benefits currently allowed
  • Require photo identification to receive UI benefits

Public-Private Partnership

This week the Senate addressed H1031 NC Economic Development Partnership.  After hearings in both the Senate Commerce and Appropriations committees, the bill emerged from the full Senate Thursday unchanged from the House version.  Passing a bill in such a manner means the bill does not need to return to the other chamber and goes directly to the Governor who is expected to sign it into law.  Below are a few highlights from the legislation:

  • Permit the Department of Commerce to contract with a North Carolina nonprofit corporation for the performance of certain economic development functions currently performed by the Department
  • Eliminate the Economic Development Board
  • Modify the duties and membership of the North Carolina Board of Science and Technology
  • Establish 8 geographic zones in the State for inter-departmental cooperation purposes
  • The nonprofit would be required to raise $6 million in private money over the next five years
  • Employees of the new nonprofit are held to the standards of the State Ethics Act to prevent pay-to-play issues which have plagued other states that have attempted similar policies.
  • Requires biennial audit by either OSBM, State Auditor or internal department auditors

Commerce privatization bill clears legislature – WRAL

Coal Ash

The Senate gave its first hearing Monday to a bill S729 that would set regulations for the clean-up of coal ash in North Carolina.  The Senate moved a PCS to the Governor’s original proposal through the Senate Ag/Env/Nat Resources committee Wednesday, the bill then cruised through the Finance committee Thursday, passing unanimously in just a few minutes.

The Senate version is a more comprehensive plan than that of the Governor, requiring all coal ash ponds in the state to be closed within 15 years.  Should the bill pass in its current form, North Carolina would adopt the most environmentally responsible restrictions regarding coal ash ponds in the country.  The bill would:

  • Establish nine member commission for clean-up oversight
  • Require the entity responsible for the spill to bear the cost of clean-up and prohibits rate increases to customers to fund it.
  • End the disposal of wet coal ash
  • Designate new ash be recycled for beneficial use or put in lined facility
  • Set 15 year tiered deadline to close existing ash ponds and requiring “high risk” sites be closed by 2019

The bill is calendared for a full Senate hearing Tuesday of next week.

Reactions vary after NC Senate proposes ne coal ash plan – N&O

Coal ash cleanup bill gets once over from Senate panel – WRAL

NC Senate Leaders Want Duke Energy To Close Its Coal Ash Ponds Within 15 Years – WUNC

N.C. A&T researchers find use for coal ash – News & Record

Environmental Law Changes 2014

The House Wednesday stripped a bill in the Environment committee and inserted a number of environmental laws changes.  At 25 pages long, S38 contains a number of provisions, all of which however are germane to the same general topic, environmental regulation unlike the regulatory reform bill.  The bill addresses air quality reporting requirements, isolated wetlands, animal waste lagoons and fertilizer regulation among other things.  The bill passed the House 105-12.  This version seems to have more support from the environmental community than does the Senate version.

House OKs changes to environmental laws – WRAL

Charlotte Airport

On Tuesday, the House approved HB 133, which included a Senate measure that potentially may end the dispute surrounding who should run Charlotte Douglas International Airport.  Last year, legislators passed a bill transferring control of the airport from City Council to a new commission.  Charlotte lawyers responded quickly asking a judge for an injunction and the legal battle has dragged on ever since.  At issue, the Federal Aviation Administration said the legislation failed to clarify who owned the airport and whether the commission was an agency of the city of Charlotte or a separate entity. 

Tuesday’s 75-42 vote attempts to clarify that the airport commission is an agency of city government, but it removes the city council and city manager from direct oversight of Charlotte Douglas International Airport.  The bill was passed as a local bill and does not require the Governor’s approval.  The FAA could issue a ruling on the commission and issue it an airport operating certificate, which would move the group closer to running Charlotte Douglas.  Opponents have labeled the bill as a "sneak attack" to steal the city's airport and the city said it will keep fighting the commission.

Charlotte Douglas airport ownership bill clears NC legislature – Charlotte Observer

In the News

Moped insurance bill advances – Port City Daily

NC House, Senate disagree over DOT tax funds used to pay McCrory staff salaries – N&O

NC lawmakers change groundwater litigation limits – WRAL

NC Senate panel votes to increase penalties for inmates who get cell phones – N&O

Voucher backers want NC to double available slots before lottery – WRAL

Economic development official says N.C. incentives fall short – Star News

House Bill Addresses Early Ballots After Death – WITN

House, Senate remain at odds over Common Core – WRAL

Report: Campaign cash tough to track in N.C. legislative races – The Voter Update

House approves moped plates, hemp extract – WRAL

House Committee Advances Proposal to Clarify NC Election Laws – TWC News

Wilmington Mayor speaks out against film incentives alternative – WECT

The money is fungible – NC Spin

House makes Venus flytrap theft a felony – WRAL

Poll: N.C. voters think governor takes cue from legislature – The Voter Update

House of Cards? – Talking About Politics

Free fishing day scheduled – Sun Journal

Other Useful Links

North Carolina General Assembly

Office of the Governor

North Carolina Center for Public Policy Research
Rankings of Effectiveness, Attendance, and Roll Call Voting Participation for the North Carolina General Assembly.


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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