Weekly Update from the NC State House - With the primary elections behind them, 170 state legislators reconvened in Raleigh on Wednesday and they did so full sail...

by Nexsen Pruet, PLLC


And They're Off!

With the primary elections behind them, 170 state legislators reconvened in Raleigh on Wednesday and they did so full sail.  The last days leading up to session were consumed by interim committees scrambling to finalize their reports with work ongoing up until the morning session was called to order.  Due to resignations and deaths, a handful of newly appointed members must learn the ropes, taking their seats in their respective chambers for the first time Wednesday.

The Governor rolled out his budget, committees were in full force, protests took place adjacent to the NCGA, tensions flared between the chambers, new building rules addressing the Moral Monday protests were adopted, tax changes were laid out and local bills began pouring in.

The "Short" Session

Unlike the federal government, the state of North Carolina constitutionally must balance its budget. The "short session" of the North Carolina General Assembly, occurring on even numbered years, is actually not a new session but rather a continuation of the previous year's biennial session. Historically legislators met only every other year, but as running state government grew in complexity, the legislature decided to return annually. The initial purpose of the short session was to balance the budget; however modern short sessions have hardly been limited to appropriations. Though there are no statutory time constraints for adjournment, and if this week is any indication of the session's pace, intentions are to adjourn quickly. However, good intentions do not always prevail.

The Governor's Budget

The Governor unveiled his budget on Wednesday which must address a $445 million shortfall due to Medicaid overruns and decreased revenues from the 2013 tax reform.  Here are a few highlights:

  • 7% raises for new teachers and 2% raises for state employees
  • Renews supplemental pay for teachers with masters in the subject which they teach
  • Additional $3.6 million for pre-k programs
  • $1.2 million for coal ash cleanup
  • 2% reduction to the UNC System
  • Technology updates at DMV office to facilitate customer service
  • $15 million increase in special Medicaid assessment hospitals pay
  • $1 million to implement proposed Medicaid Reform

The House and Senate full appropriations committees received a presentation of the Governor's recommended budget on Thursday from the State Budget Director, Art Pope.  You can view that presentation here.  The Senate will be the first of the chambers to pass a budget bill.  They begin their appropriations subcommittee process next week where they will make small tweaks to some sections of the proposal and sweeping changes to others.  Expect a finalized Senate version of the 2014 Appropriations Act in 2-3 weeks, which will then be sent to the House to go through the same process. 

Governor's proposed 2014-15 budget adjustments- N&O

Governor's proposed budget raises teacher pay, calls for Medicaid reform- Capital Tonight

McCrory Focuses on Teacher Pay, Avoids Tax Increases in Budget Adjustments- Civitas  

Legislators dig into McCrory budget proposal- N&O     

The Omnibus Tax Package  

Thursday, the House Finance committee addressed their first piece of legislation for 2014, the Omnibus Tax Bill. The bill as originally filed contained the recommendations of the Revenue Laws study committee which met throughout the interim. The bill addresses among other provisions, the following issues:   

  • Privilege tax for cities and towns
  • Agricultural exemptions
  • University pre-paid meal plans
  • Entertainment admission taxes
  • Service contracts
  • New tax on electronic cigarettes
  • Sales tax on modular homes  

A provision to modify North Carolina's apportionment formula for the way multi-state corporations are taxed was removed from the bill in committee. This piece, championed by the Senate, remains in the Senate version. 

NCGA Primary Election Update   

Nearly half of the 2015-2016 General Assembly was either elected or reelected last Tuesday. This coming November, 20 Senate districts and 58 House districts are unopposed in the general election with only one party on the ballot. Barring entry from an independent or write-in candidate, individuals in those districts are all but assured to serve next January. See the NCGA House and Senate breakdowns for the general election or view the NC Free Enterprise Foundation's candidate trackerfor more information.    

The passing of former Commerce Secretary Keith Crisco  

The passing of former Commerce Secretary and Congressional candidate Keith Crisco, came as a shock to the state on Monday after suffering injuries from a fall in his home. He was remembered by friends in the article below.  
Keith Crisco remembered as "one of North Carolina's giants"- N&O     

Other Highlights

The NC Board of Law Examiners requested an exemption for the legal field from a 2013 law which established that when disclosing criminal record, applicants are not required to divulge any expunged criminal offenses. Currently only law enforcement is exempt. A subcommittee of the Administrative Procedure Oversight committee will be appointed in the fall to further vet the issue and receive input from stakeholders. 

Freshly Filed Legislation  

With only a short window from the time they arrived until bill drafting deadlines, a flood of proposals have been sent to the drafting division of the General Assembly to be crafted into legislation. Along with the budget, the legislature has filed bills to address the following issues:  

  • Energy Modernization or Fracking
  • Educational Funding and Policy
  • Tax Policy
  • Economic Development
  • Environmental Issues  

Below are a few bills of interest from the 158 bills filed since Wednesday.  

H1031:  NC Econ. Dev. Partnership Modifications. (S743) 
                [Tom Murry]

H1032:  Patent Abuse Bill  
                [Tom Murry]

H1046:  State Plan Amendments/Submission and Notice  
                [Justin P. Burr; Mark W. Hollo]

H1050:  Ombibus Tax Law Changes (S763)  
                [Julia C. Howard; MItchell S. Setzer; David R. Lewis; William Brawley]

H1061:  Replace Common Core to Meet NC's Needs
                [Bryan R. Holloway; Larry G. Pittman; Michael Speciale]

H1107:  Restore Lottery $ for School Construction
                [Bryan R. Holloway]

S729:    Governor's Coal Ash Action Plan
                [Phil Berger; Tom Apodaca]

S745:    2014 Technical Corrections. (H1118)
                [Fletcher L. Hartsell, Jr.]

S759:    Unemployment Insurance Law Changes
                [Bob Rucho; Ben Clark]

S776:    Streamline Rule-making Process
                [Fletcher L. Hartsell, Jr.]

S784:    Study Expansion of Health Care Transparency
                [Ralph Hise]

S786:    Energy Modernization Act
                [Bob Rucho; Andrew C. Brock; E.S. (Buck) Newton]

S787:    Teacher Funds Must Be 51% of School Budget
                [Tom Apodaca; Bill Rabon; David L. Curtis]

Click here for 2013 bills eligible during the 2014 Short Session – NCGA

In the News

New session could be short but busy - Carolina Journal

Film incentives' fate going down to the wire - Star News

Poll: Small business owners want N.C. General Assembly to protect environment - TBJ

Scott Mooneyham: NC lawmakers getting ready for a real short session - Daily Advance

Hurricanes, Panthers growl over proposed sales tax change - WRAL

Legislature Adopts New Rules on Protests - N&O

Republican leaders appear willing to let current film incentives expire - N&O

Autism coverage stalls legislative vote against Affordable Care Act - WRAL

State may consider revenue-growth cap - Durham Herald-Sun

New push launched to end partisan redistricting - Charlotte Observer

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. 

Written by:

Nexsen Pruet, PLLC

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