Legislative Update

Tuesday, July 18, 2017
July 18, 2017 Legislative Update

North Carolina legislators packed their bags and went home after adjourning the 2017 long session on June 30. Hundreds of bills were considered during the five month long session, including the biennial budget, which was passed before the end of the fiscal year, as well as a number of major policy initiatives. This update is not a conclusive list of all major policy initiatives passed during the long session. Be on the lookout for comprehensive industry specific wrap ups from McGuireWoods Consulting in the coming weeks. 

2017 Long Session By the Numbers

Bills Filed: 1,609 – 925 in the House and 684 in the Senate.

Bills Pending on the Governor’s Desk: 108 – Governor Roy Cooper has 30 days to act on legislation; if he does not sign or veto a bill within that time, it goes into effect without his signature.

Bills Signed by the Governor: 60 –Gov. Cooper has signed 27 bills into law since the General Assembly adjourned.

Bills Not Signed by the Governor:  1 – Gov. Cooper has allowed one bill, SB 577: Consumer Credit/ Default Charges, to go into effect without his signature so far this year.

Bills Vetoed by the Governor: 7 – two since the General Assembly adjourned. To date, five vetoes have been overridden.

Session Laws: 113 – in addition to the 66 bills that required gubernatorial action, 47 local bills were passed by the General Assembly, which do not need the Governor’s signature.

Agriculture, Energy & Natural Resources

Session Law:

Sponsored by Sens. Brent Jackson (R-Sampson), Norman Sanderson (R-Pamlico) and Andrew Brock (R-Davie), the state’s annual farm act was signed by the Governor on Wednesday. Among other provisions, SB 615: North Carolina Farm Act of 2017 would:

  • Direct the Environmental Management Commission (EMC) to exempt facilities that store poultry manure to be used for renewable energy from odor rules.
  • Clarify agritourism and the definition of a farm to state that a building or structure that is used for agritourism, such as wedding venues, is only exempt from local zoning and development regulations if it is location on a property that has met certain requirements for at least three years.
  • Eliminate county authority to adopt zoning regulations governing hog farms.

On the Governor’s Desk:

Sponsored by Reps. Chris Millis (R-Pender) and John Bell (R-Wayne), HB 559: Outdoor Heritage Enhanced, expands Sunday hunting by:

  • Removing restrictions on hunting with the use of firearms on private land to allow hunting of wild animals and upland game birds in all counties except for within 500 yards of a religious place of worship. Hunting with the use of firearms between 9:30 AM and 12:30 PM on Sundays, and the use of dogs to hunt deer with the use of firearms would remain unlawful.
  • Allowing hunting of wild animals and upland game birds on public lands of the state that are managed for hunting on Sundays, subject to some restrictions.
  • Prohibiting the hunting of migratory birds on Sunday unless authorized by proclamation or rules of the Wildlife Resources Commission.

The bill was presented to Gov. Cooper on June 30.

In the final days of session a bill that represented nearly a year of stakeholder negotiations became a point of contention between the House and Senate. HB 589: Competitive Energy Solutions would rewrite the state’s renewable energy laws. While in the Senate, Sen. Harry Brown (R-Onslow) sponsored an amendment to enact a three year wind moratorium. Ultimately, the conference committee reached agreement on an 18-month moratorium on the issuance of permits for wind projects. Additionally, the bill would:

  • Allow Duke Energy to offer a limited community solar program.
  • Allow third-party leasing for rooftop solar systems.
  • Reinstate the green source rider program.
  • Open a competitive bidding process for renewable energy projects.

HB 589 was sent to the Governor on June 30.

In Conference:

An omnibus environmental regulation bill that originated in the House, HB 56: Amend Environmental Laws, which is sponsored by Reps. Pat McElraft (R-Carteret) and Larry Yarborough (R-Person) was sent to the Senate in late April. While in the Senate, a number of additions were made to the bill, including:

  • Repealing a plastic bag ban in portions of Dare, Currituck and Hyde Counties.
  • Amending several laws concerning riparian buffer zones, including the requirement for Jordan Lake to be cleared if local law enforcement determines there is a public safety issue, and excluding certain buffer zones from property tax bases.
  • Revising laws concerning mining permits to require the Department of Environmental Quality to issue permits for a mining operation’s “life-of-site,” limit the amount of a bond the applicant must file to no more than $1 million and add an annual $400 operating fee per permit.
  • Granting eminent domain power to private condemners for pipelines originating outside of NC.

The conference committee for HB 56 is being chaired by Rep. David Lewis (R-Harnett) and Sen. Andy Wells (R-Catawba) and a conference report for the bill would be eligible in either the August or September sessions if a compromise is reached. To view the full composition of the conference committee, click here.

Initially, HB 770: Amend Environmental Laws 3, which is sponsored by Reps. Kyle Hall (R-Stokes), McElraft, Brian Turner (D-Buncombe) and Pricey Harrison (D-Guilford), would have required the EMC to adopt temporary rules to reflect modifications to requirements for assessment and corrective action in response to discharges and releases from petroleum underground storage tanks. A proposed committee substitute introduced in June added a number of amendments to the bill, including provisions that would: 

  • Authorize the Marine Fisheries Commission to adopt rules to provide for advanced siting and preapprovals of shellfish aquaculture leases.
  • Direct the Division of Marine Fisheries to review its Fishery Management Plan for the River Herring regarding the validity and scientific basis for the status of the species as overfished.
  • Prohibit local governments from enacting ordinances to prohibit the disposal of construction and demolition debris in a C&D landfill.

The conference committee for HB 770 is headed up by Rep. Kyle Hall and Sen. Brown and the bill is eligible for consideration in August or September. To view the full conference committee, follow this link.

Vetoed:

On June 30, Governor vetoed HB 576: Allow Aerosolization of Leachate, sponsored by Rep. Jimmy Dixon (R-Duplin), which would have allowed lined landfills to dispose of leachate through aerosolization. In his objection message, Gov. Cooper stated his belief that scientists, not the legislature, should determine which technology can safely dispose of contaminated liquids from landfills. The bill passed the House and Senate with veto-proof majorities and is eligible to be reconsidered in the August and September sessions.

Education

Session Law:

HB 13: Class Size Requirement Changes, which is sponsored by Reps. Chuck McGrady (R-Henderson), Jeffrey Elmore (R-Wilkes), Chris Malone (R-Wake), and Kevin Corbin (R-Macon), would make changes to the required class size for kindergarten through third grade. Under the law, average class sizes in an LEA for kindergarten through third grade cannot exceed 20 students, and the maximum size for an individual class cannot exceed 23 students. The bill was signed into law on April 27, and applies to the 2017-18 academic year.

On the Governor’s Desk:

Sponsored by Reps. Kyle Hall, Debra Conrad (R-Forsyth), Larry Bell (D-Sampson), and Elmer Floyd (D-Cumberland), HB 155: Omnibus Education Law Changes would make various changes to state education laws. The bill makes conforming adjustments to a recent North Carolina Supreme Court decision regarding the repeal of career status for certain teachers, allows assistant principals to conduct evaluations for beginning teachers, instructs the Superintendent of Public Instruction to develop to a recommended curriculum for computer science and computer related courses in K-12 schools, and creates a work group to study student mental health. The bill becomes effective when it is signed into law. It was presented to the Governor on June 28.

Sponsored by Reps. John Bradford (R-Mecklenburg), Jason Saine (R-Lincoln), Scott Stone (R-Mecklenburg), and Holly Grange (R-New Hanover) HB 800: Various Changes to Charter School Laws would make various changes to the laws governing charter schools in North Carolina. The bill would allow employees of an education or charter school management organization to work as a teacher in a charter school, adjusts the decision timeline for charter school replication to 120 days from application submission, and modifies the definition of a material revision of a school’s charter as it relates to enrollment growth. The legislation also creates an enrollment priority category for students previously enrolled in another charter school, instructs the Office of Charter Schools to work with charter schools that would like to participate in the NC Pre-K program, and modify the requirements of the North Carolina Virtual Public School. The bill was sent to the Governor on June 29.

Finance & Economic Development

Session Laws:

Since gaining a majority in the legislature in 2011, the GOP has made substantial changes to the state’s tax code, with a focus on reducing the personal and corporate income tax rates, expanding the sales tax base, and reducing or eliminating tax credits. The final tax package in SB 257: Appropriations Act of 2017:

  • Reduces the personal income tax rate from 5.499% to 5.25% in 2019 and reduces the corporate income tax rate from 3% to 2.5% in 2019.
  • Increases the standard deduction to $20,000 (currently $17,500) if married, filing jointly; $15,000 (currently $14,000) for head of household; $10,000 (currently $8,750) for single; and $10,000 (currently $8,750) if married, filing separately.
  • Expands the child deduction for people eligible for the federal child tax credit. Deduction ranges from $0 to $2,500.
  • Lowers the franchise tax for s-corporations.
  • Extends the renewable energy tax credit for facilities utilizing renewable biomass from January 1, 2017 to May 5, 2017.
  • Exempts mill machinery from retail sales and use taxes and directs the Revenue Laws Study Committee to study ways to clarify the scope of the exemption.
  • Does not implement market-based sourcing, as the Senate had proposed to do.

The legislature overrode Gov. Cooper’s veto of the budget on June 28.

In Conference:

Sponsored by Sens. Jerry Tillman (R-Randolph), Brock and Tommy Tucker (R-Union), SB 628: Various Changes to the Revenue Laws would make a number of technical and conforming changes to state revenue laws. Changes made to the bill in the House include:

  • Provides a sales tax exemption from RMI services for aircrafts with a gross take-off weight of more than 2,000 pounds.
  • Allows the Secretary of Revenue to reduce a sales tax assessment that involves the failure to properly collect sales and use tax on charges for vacation linens by 90%.
  • Provides a property tax exemption for mobile classrooms and modular units that are occupied by a school and used exclusively for educational purposes, regardless of ownership of the property.
  • Eliminates a monthly deposit requirement for local governments if the money on hand is less than $250.

Former Sen. Brock, who has since resigned from the General Assembly, and Rep. Bill Brawley (R-Mecklenburg) were appointed to chair the conference committee, and SB 628 is eligible for consideration in the August and September sessions. To view the full membership of the conference committee, follow this link.

Left on the Table:

Currently, no cities within North Carolina have the authority to levy a local sales and use tax, though counties are authorized to do so. Sponsored by Reps. Stephen Ross (R-Alamance) and Saine, HB 900: Safe Infrastructure & Low Property Tax Act would allow municipalities to levy a city-only tax, set at .25%, to produce revenue that can be invested in infrastructure and economic development projects. The tax would have to be approved by voters through a referendum.  HB 900 was heard in the House Finance Committee in mid-June and remains eligible for consideration in the short session.

Health Care & Insurance

Session Laws:

Gov. Cooper signed HB 243: Strengthen Opioid Misuse Prevention (STOP) Act into law on June 29. The bill, which is sponsored by sponsored by Reps. Greg Murphy (R-Pitt), Ted Davis (R-New Hanover), Malone and Craig Horn (R-Union), seeks to address the opioid addiction epidemic by controlling prescriptions of pain killers and strengthening treatment options for addicted individuals. The legislation:

  • Allows practitioners to prescribe opioid antagonists to local health departments, law enforcement agencies and organizations that promote scientifically proven ways of treating substance use disorders
  • Requires physician assistants and nurse practitioners to consult with their supervising physician prior to prescribing Schedule II and III opioids if the patient is being treated in a pain management facility and treatment is expected to exceed a 30 day period.
  • Requires prescribers to use electronic prescriptions when prescribing Schedule II and III opioids.
  • Limits practitioners to prescribing a five-day supply of opioids for acute pain, and seven-days for post-surgical treatment.
  • Requires hospice and palliative care providers who prescribe opioids for in-home treatment to provide their patients and families with safe disposal instructions.
  • Clarifies that needle exchange programs may receive public funds, but cannot receive state funds.
  • Strengthens the state’s Controlled Substances Reporting System by increasing regulations and oversight including requiring practitioners and pharmacists to review a 12-month patient history prior to signing or fulfilling an initial opioid prescription.

On the Governor’s Desk:

Sponsored by Reps. Donny Lambeth (R-Forsyth), Verla Insko (D-Orange), Murphy and Josh Dobson (R-McDowell), HB 283: DHHS Recommend Telemedicine Policy was sent to the Governor on June 29. The legislation would require the Department of Health and Human Services to study and recommend a telemedicine policy to the legislature by October 1. 

In Conference:

When HB 403: Behavioral Health and Medicaid Modification, which is sponsored by Reps. Nelson Dollar (R-Wake), Lambeth, Dobson, and Donna White (R-Johnston), was sent to the Senate, the House had passed provisions that would have modified certain requirements pertaining to Local Managed Entities/ Managed Care Organizations (LME/MCOs), however, when it was in the Senate, major changes were made to the bill that would:

  • Eliminate the LME/ MCO structure 18 months after the state’s Medicaid reform waiver is approved by the Centers for Medicare and Medicaid Services, which could be as soon at 2019.
  • Make changes to the Medicaid transformation law, including the number of Provider-led entity (PLE) and Prepaid Health Plan (PHP) contracts allowed.
  • Replace the requirement that PHPs must comply with Chapter 58, the state’s laws that regulate the insurance market, with the recently amended federal Medicaid managed care regulations.
  • Require the Department of Health and Human Services (DHHS) to give the General Assembly notice prior to submitting or not submitting amendments to the state Medicaid State Plan, which are posted on the DHHS website.
  • Make conforming changes to the process for Medicaid beneficiaries enrolled in a LME/ MCO to appeal or file grievances, to align with recently passed federal managed care regulations.

The bill is now in conference and is eligible to be considered in August or September, if a compromise is reached. The conference committee is headed up by Rep. Dollar and Sen. Ralph Hise (R-Mitchell). To view the full composition of the conference committee, click here.

Justice & Public Safety

Session Law:

Gov. Cooper signed SB 600: Britny’s Law: IPV Suicide on June 11. The bill, which is named in memory of a North Carolina woman who was shot and killed by her boyfriend after a four-year long abusive relationship, is sponsored by Sens. Chad Barefoot (R-Franklin), Jeff Jackson (D-Mecklenburg) and Danny Britt (R-Robeson). SB 600 allows prosecutors to allege premeditation in murder cases if there is a history of domestic violence committed against the same person. This allows prosecutors to charge first-degree murder, which can carry a sentence of life in prison or the death penalty, instead of a second-degree murder charge.

On the Governor’s Desk:

Sponsored by Reps. Allen McNeill (R-Randolph), John Faircloth (R-Guilford), Pat Hurley (R-Randolph), and Rena Turner (R-Iredell), HB 138: Revise Gang Laws was sent to the Governor’s desk on June 28. The bill would make a number of changes to state gang laws, including:

  • Modernize the definitions associated with the Gang Suppression Act.
  • Create sentencing enhancement for any person convicted of a Class C through Class I felony when it is found that the offense was committed as part of criminal gang activity.

Sponsored by Sens. Shirley Randleman (R-Wilkes), Warren Daniel (R-Burke) and Brock, SB 548: Strengthen Human Trafficking Laws/ Studies was sent to the Governor on June 27. If enacted, the bill would:

  • Require adult establishments, rest areas and welcome centers, businesses that sell alcohol, hospitals and employment or training centers to display public awareness signs on the issue of human trafficking, including the information for the National Human Trafficking Resource hotline.
  • Prohibit the practice of massage therapy and bodywork in adult establishments.

Regulatory Reform

Session Law:

Signed into law on May 4, SB 131: Regulatory Reform Act of 2016-2017, which is sponsored by Sens. Wells, Bill Cook (R-Beaufort), and Sanderson, makes a number of changes to state laws, including:

  • Clarifies that a franchisor is not the employer of a franchisee or employees of the franchisee for employment law claims under state law.
  • Allows lessors of single family rental units to pass through charges for water and sewer utility service to tenants.
  • Clarifies that DOT storm water requirements are applicable to state road construction undertaken by private parties.
  • Provides that when DOT requires the relocation of utilities, including cable service, located in a right-of-way for which the utility owner contributed to the cost of acquisition, the Department must reimburse the utility owner for the cost of relocation.
  • Directs DEQ to study (1) whether the size of riparian buffers required for intermittent streams should be adjusted and (2) under what circumstances units of local government should be allowed to exceed riparian buffer requirements mandated by the state and federal government.
  • Prohibits DEQ from requiring the use of on-site storm water control measures to protect downstream water quality standards unless required to do so by State or federal law.

A full summary of SB 131 is available here.

SB 155: ABC Omnibus Legislation, sponsored by Sens. Rick Gunn (R-Alamance), Dan Blue (D-Wake), and Kathy Harrington (R-Gaston), was signed into law on June 30. To many North Carolinians, SB 155 became known as the “brunch bill,” due to a provision that allows counties and cities to pass ordinances that allow retail and restaurant alcohol sales beginning at 10 AM on Sundays. Since becoming law, ordinances have been passed by the city or town councils of Carrboro, Raleigh, Huntersville, Surf City, Carolina Beach and county commissioners in Henderson and Mecklenburg counties, but an ordinance in New Bern failed.

On the Governor’s Desk:

Sponsored by Rep. Saine, Torbett, and Michael Wray (D-Northampton), 310: Wireless Communications Infrastructure Siting would:

  • Amend state laws related to the regulation of wireless infrastructure siting and collocation of small wireless facilities on city poles in public rights-of-way.
  • Allow local governments to assess fees on wireless providers for occupation of rights-of-way.
  • Authorize cities to charge a $50 per pole per year fee for collocation of a small wireless facility on city utility poles.

HB 310 was sent to the Governor on June 29.

Vetoed:

HB 511: Game Nights/ Nonprofit Fund-Raiser, sponsored by Reps. Jamie Boles (R-Moore), Marvin Lucas (D-Cumberland), and Saine, would allow non-profits to serve alcohol at fundraising events where gambling is taken place. Commonly known as “casino nights,” the events feature casino style games, where participants could win prizes or awards. Serving alcohol at these events is currently illegal, however, district attorneys rarely prosecute it. HB 511 was vetoed by Gov. Cooper on Wednesday. In his veto message, the Governor stated that the legislation could allow the video poker industry to “infiltrate our communities.” The bill has been sent back to the legislature and is eligible to be reconsidered in the August or September sessions.

In Conference:

When it was sent to the House, SB 16: Business & Agency Reg. Reform Act of 2017, which is sponsored by Sen. Wells, Tamara Barringer (R-Wake), and Daniel,  included three agency requested provisions related to the Office of Administrative Hearings and the Rules Review Commission. While in the House, a number of provisions were added to the bill, including:

  • Allowing bed and breakfasts to provide additional, optional meals to guests.
  • Amending the requirements for health benefit plans covering small employers.
  • Clarifying the staffing standards for dog day care services.
  • Directing the Building Code Council to study electrical safety requirements for swimming pools.
  • Requiring backup lights to be operational to pass a state automobile inspection.

The bill is now in conference and eligible for consideration in the August or September sessions. The conference committee is chaired by Rep. Lewis, and Sen. Trudy Wade (R-Guilford). To view the full conference committee, click here.

Left on the Table:

After passing the House on June 22, HB 794: NC Permitting Efficiency Act of 2017, is now in the Senate Rules Committee and eligible for consideration in the short session. The bill, which is sponsored by Reps. Stone, Saine, Bradford and Torbett, would give delegate the authority to issue construction permits and approvals associated with state maintained roads to municipalities with a population of 50,000 or more.

Transportation

On the Governor’s Desk:

Fully autonomous vehicles are not regulated under current state law. HB 469: Regulation of Fully Autonomous Vehicles, sponsored by Reps. Phil Shepherd (R-Onslow) and Torbett, would amend current statute by defining autonomous vehicles and definitions related to their function, such as “automatic driving system” and “fully autonomous vehicle.” Also, the bill would define how current motor vehicle laws would apply to a fully autonomous vehicle in operation. The bill was sent to the Governor’s desk on June 28. If signed by the Governor, the bill goes into effect on December 1, 2017.

SB 413: Clarify Motor Vehicle Dealer Laws, sponsored by Sen. Brent Jackson (R-Duplin), would make various changes to current law regulating motor vehicle dealers and manufacturers. SB 413 would broaden an exemption from continuing education courses for motor vehicle dealers that are licensed to sell new and used vehicles, and expands a grandfather provision for an incentive program from 2018 to 2022. The legislation would also modify the law related to warranty obligations for living facilities of recreational vehicles, and prevent dealers from charging certain shop and maintenance service fees unless notice is posted to the customer. The bill was presented to the Governor on June 27. The bill becomes effective on January 1, 2018 if signed by the Governor.

Left on the Table:

Sponsored Reps. Ross, Pat Hurley (R-Randolph), Boles and Torbett, HB 617: Clarify Sale of Antique & Specialty Vehicles would update the requirements for automobile dealers to sell certain vehicles. Initially the bill focused on existing dealerships holding special events to sell antique and collector’s vehicles, but a PCS introduced in the Senate Committee on Commerce and Insurance during the final days of session would allow certain electric car manufacturers to operate dealerships within the state, would establish a new requirement that most applicants for a new motor vehicle dealer license certify on the application that neither the applicant nor its affiliates are manufacturers, and would expand a provision in existing law giving standing to certain dealer associations to file petitions before the Commissioner to seek relief for violations of the manufacturers licensing laws. Current law prohibits motor vehicle manufacturers from directly operating a vehicle dealership and gives limited standing to certain dealer associations. The bill was brought up in committee for discussion but was not voted on before adjournment. The bill is eligible to be considered in the short session.

Sponsored by Reps. Jon Hardister (R-Guilford), Faircloth, John Blust (R-Guilford), and Cecil Brockman (D-Guilford), HB 802: Exempt Motorcoach Manufacturer & Distributor would have exempted manufacturers and distributors of motorcoaches from owning, operating, or controlling a motor vehicle dealership in North Carolina. The bill would also define “motorcoach” under current law as a commercial bus with a capacity of 16 or more passengers, no less than two rows of seating, and a minimum weight of 26,000 pounds. The bill passed the House by a vote of 115-2, but did not receive a vote in the Senate.

 

Posted by: Kerri A. Burke, McGuireWoods Consulting LLC @ 12:00:00 am  Comments (0)
Monday, July 10, 2017
July 10, 2017 Legislative Update

The North Carolina General Assembly recently adjourned the legislative session that began in January. However, they plan to reconvene in August to continue working on policy they were not able to reconcile prior to adjournment.  

            The North Carolina General Assembly officially convened Wednesday, January 25, 2017. This session saw a wide variety of policy matters including non-discrimination ordinances, tax reform, economic development reform, transportation and infrastructure initiatives, education funding and regulatory reform.  Now, not all of these initiatives were passed out of both chambers and have been enacted into law.  Nevertheless, many of these policy matters were addressed and are or will become law in the near future.  

  • Non-discrimination Ordinance: Signed by Governor
    • House Bill 142 was the bipartisan compromise bill that repealed House Bill 2
  • The non-discrimination policy directly aligns with our 2017-2018 legislative agenda:
    • Support efforts to effect non-discrimination statutes to mitigate economic losses and extend protections to all citizens.
  • Corporate Tax Reform: Passed in Budget, now law
    • In 2019, the corporate tax rate in North Carolina lowers from 3% to 2.5%
    • Lowers the franchise tax for S-Corporations
    • Repeals the Mill Machinery Tax
  • The tax reform in the budget directly aligns with our 2017-2018 legislative agenda:
    • Support a NC tax code that has a positive overall impact on economic growth
    • Key factors: NC needs a competitive tax position which provides certainty and limits taxes on business to business services
  • Economic Development Reform
    • Major North Carolina economic development incentives are fully funded for 2017-2018: passed in the budget, now law.
    • The budget added a type of project it will consider for enhanced incentives.  It is called a transformative project – the project must invest $4 billion and create 5,000 jobs to be eligible for that designation: passed in the budget, now law.
    • House Bill 795/Senate Bill 660 were introduced and took on a number of different looks during the legislative session.  The chamber is directly engaged in conversations regarding comprehensive economic development reform: in progress.
  • The economic development provisions in the budget directly aligns with our 2017-2018 legislative agenda:
    • Support initiatives designed to attract and retain jobs and investment including:
    • Continuation and expansion of the Jobs Development Investment Grant program.
    • Continuation of a “closing fund”
    • Funding for the state’s role in economic development
  • Transportation and Infrastructure Initiatives: passed in the budget, now law.
    • Strategic Transportation Investments
      • In 2017-2018, STI funding increases by $139 million
      • In 2018-2019, STI funding increases by $180 million
    • Airport Infrastructure Improvements
      • CLT received $25 million for 2018-2019
        • Car rental sales tax revenue was traditionally sent to the general fund, the NCGA diverted money out of the general fund, and appropriated that money directly to airports
    • Light Rail Cap was NOT repealed (appeared in House budget, but not final budget compromise)
  • The transportation provisions in the budget that passed directly aligns with our 2017-2018 legislative agenda:
    • Support the Strategic Transportation Investments program for prioritization of transportation funding
    • Support funding for the arts, travel and tourism and other things that make North Carolina attractive from an economic development perspective
  • Education: passed in the budget, now law.
    • Teacher pay raise by an average of 3.3%
    • Reestablishes the North Carolina Teaching Fellows Program with a focus on STEM educators
    • Moves the ApprenticeshipNC program to the North Carolina Community College system
      • The budget also calls for a study to be done on workforce development needs
  • The education provisions in the budget directly aligns with our 2017-2018 legislative agenda:
    • Support efforts to improve Charlotte-Mecklenburg Schools, Central Piedmont Community College and UNC Charlotte including:
      • Support continued reform of the teacher compensation system to make N.C. more competitive
      • Support the continued funding of classroom enrollment growth in pre-K, K-12, community colleges and universities
  • Regulatory Reform
    • HB 310: Awaiting Action by Governor
      • This bill will bring 5G wireless access to NC – allows wireless providers to use existing infrastructure and right of ways for small cell towers
      • Rep. Jason Saine’s bill – passed both chambers with wide bipartisan support
    • SB 155: Signed by Governor
      • The “Brunch Bill” provides municipalities with the authority to pass a local ordinance allowing alcohol sales before noon on Sunday’s
      • Passed with strong bipartisan support in both chambers
    • HB 26: Awaiting Action by Governor
      • Workers Comp Bill fix – there was a court decision that shifted the burden of proof for workers comp claims back to the employer, which undid reforms that were passed a few years ago 
      • Large coalition supported the fix: American Airlines, Blue Cross Blue Shield, NC Farm Bureau, and about 20 other organizations
  • The above legislation that passed directly aligns with our 2017-2018 legislative agenda:
    • Support continued efforts to reform NC’s laws and regulations to encourage economic growth
    • Support funding for the arts, travel and tourism and other things that make North Carolina attractive from an economic development perspective

This is a relatively brief look at the work the legislature completed from January to the end of June. We wanted to specifically highlight the policy areas that the Charlotte Chamber worked on during this session, and showcase the successes we have seen, from the vantage point of our legislative agenda. The legislature plans to go back into session in August, September and November. We could see them focus on redistricting, constitutional amendments, additional regulatory reform bills, tort reform and economic development reform to highlight a few.  

Posted by: Keith Kelly, Vice President, Local and Regional Government, and Joe Bost, Vice President, State and @ 12:00:00 am  Comments (0)
Monday, June 26, 2017
June 26, 2017 Legislative Update

As the House and Senate near adjournment, both chambers are working hard to wrap up their work for the long session. A budget deal was released last week before being passed by both chambers, it is now on its way to the Governor, who has suggested he will veto the bill. Additionally, several major policy proposals were vetted in committees and on the House and Senate floor last week. It is likely that the legislature will conclude their business within the next week. The Senate has indicated that most policy committees have been shut down, with the exception of Senate Rules and Finance, and Speaker Tim Moore (R-Cleveland) has said he is hoping to adjourn by the 4th of July.

General Assembly Sends Final Budget Deal to Governor’s Desk

SB 257: Appropriations Act of 2017 passed its final hurdle before being sent to the Governor last week. After a negotiated budget deal was released on Monday night, the agreement was passed by both chambers; the Senate voted 39-11 on Wednesday, while the House’s final vote was 77-38 on Thursday. Gov. Cooper publicly opposed the proposal this week, particularly criticizing cuts to his office and the budget for the Attorney General, and many expect him to issue his fifth veto. Once the bill has been sent to the Governor, he has ten days to either sign or veto the budget, and if a veto is issued, the bill will require approval from three-fifths of present legislators to be passed into law. SB 257 passed with a veto proof majority in both chambers, with support from nine Democrats, four in the Senate and five in the House. A budget bill has only been vetoed twice in state history, in 2011 and 2012 by Gov. Beverly Perdue; in both instances the veto was overridden.

For an in-depth review of the budget deal, follow this link.

House & Senate Revise Revenue Laws

SB 628: Various Changes to Revenue Laws, sponsored by Sens. Jerry Tillman (R-Randolph), Andrew Brock (R-Davie), and Tommy Tucker (R-Union), would make a number of technical and conforming changes to revenue laws including:

  • Clarify that petroleum pipeline companies apportion income for corporate and franchise tax based on the number of barrel miles transported in this state, which codifies existing practice.
  • Modifies a corporate income tax deduction for interest paid or accrued to affiliates.
  • Clarify sales and use taxes on repairs, maintenance and installation services (RMI), and increases the percentage of RMI services that may be taxes as part of a capital improvement from 10% of the contract price to 25%.
  • Allows the Secretary of Revenue to reduce a sales tax assessment involving the failure to properly collect sales and use tax on vacation rental linens by 90%.
  • Provides a sales tax exemption from RMI services for aircrafts with a gross take-off weight of more than 2,000 pounds, currently, aircrafts between 9,000 and 15,000 pounds are exempt from the tax.

The bill has been referred to the House Finance Committee. 

Several Regulatory Reform Packages Advance

Sponsored by Sens. Rick Gunn (R-Alamance), Dan Blue (D-Wake), and Kathy Harrington (R-Gaston), SB 155: ABC Omnibus Legislation would make various changes to state alcohol laws. The bill would allow counties and cities to pass ordinance to allow for retail and restaurant alcohol sales before noon on Sunday. The legislation reduces the restriction on the number of bottles that can be purchased by an individual after touring a distillery from one to five. The bill clarifies state law to allow for the sale of crowlers, which are 32 ounce cans sealed in a taproom or restaurant, and creates a permitting process for distillery tasting events on and off-site. Also, it would also create a permitting process to auction high-end wine and spirits, and authorize home brewers to share their products at exhibitions, fairs, and competitions. The proposed committee substitute to SB 155, which received a favorable report from the House Alcoholic Beverage Control Committee on Thursday, is a combination of several other bills related to state alcohol laws: HB 500: ABC Omnibus Legislation, SB 155: Economic Job Growth for NC Distilleries, and SB 604: Homemade Alcoholic Beverage Tasting Permit. The bill was referred to the House Finance Committee. ​

Reps. Scott Stone (R-Mecklenburg), Jason Saine (R-Lincoln), John Bradford (R-Mecklenburg), and John Torbett (R-Gaston), have sponsored legislation aimed at streamlining the permitting process at the state and local level. HB 794: NC Permitting Efficiency Act of 2017 would create across the board requirements for counties and cities to issue site construction and land use permits. Also, the bill gives certain municipalities the authority permits related to State maintained roads within the municipality’s jurisdiction and extraterritorial jurisdiction. The bill passed the House on Thursday, 96-15. 

SB 100: Aerial Adventure Financial Responsibility, sponsored by Sens. Wesley Meredith (R-Cumberland), Michael Lee (R-New Hanover), and Joel Ford (D-Mecklenburg), would require zip line and obstacle course operators to have at least $2,000,000 in aggregate liability insurance against the liability for injured persons or property. The bill would also instruct the Commissioner of Insurance to enforce the policy, and adopt rules of enforcement. Challenge or zip line courses on private property, not open for public use, or owned by the State would not be required to maintain liability insurance. A PCS to the bill was adopted on Tuesday by the House Committee on Insurance, which makes some clarifying and technical changes. The bill has been sent to the House Committee on Regulatory Reform. 

Sponsored by Reps. Stephen Ross (R-Alamance), Pat Hurley (R-Randolph), Jamie Boles (R-Moore), and John Torbett (R-Gaston), HB 617: Clarify Sale of Antique & Specialty Vehicles would update the requirements for automobile dealers to sell certain vehicles. Initially the bill focused on existing dealerships holding special events to sell antique and collector’s vehicles, but a PCS introduced in the Senate Committee on Commerce and Insurance on Wednesday would allow certain electric car manufacturers to operate dealerships within the state. Current law prohibits motor vehicle manufacturers from directly operating a vehicle dealership, but the PCS would create a carve out and allow a manufacturer to operate up to six dealerships within the state so long as the manufacturer only produces electric cars and has never had an affiliation with another franchised dealership. The bill has not been voted out of the committee yet, if it receives a vote, it has a final committee stop in Senate Rules before heading to the Senate floor for a vote.

Senate Revises Charter School Changes

This week, a proposed committee substitute (PCS) was introduced in the Senate Committee on Education that would make a number of changes to state laws regarding charter schools. HB 800: Various Changes to Charter School Laws, which is sponsored by Reps. John Bradford (R-Mecklenburg), Jason Saine (R-Lincoln), Scott Stone (R-Mecklenburg) and Holly Grange (R-New Hanover), would:

  • Allow education or charter management organizations to employ school teachers. Current law provides that a charter school’s board is responsible for contracting employees.
  • Expedite the timeline for the State Board of Education provide a decision on charter school fast-track replication applications within 120 days of submission.
  • Grant priority enrollment to students who were enrolled in a different charter school in the state in the prior year.
  • Modify laws regarding NC Virtual Public School (NCVPS) to repeal a requirement that all e-learning opportunities be consolidated under NCVPS.
  • Direct the Office of Charter Schools to assist charter schools that wish to participate in the NC Pre-K program.

After receiving approval from two Senate committees this week, the bill is now eligible to be heard on the Senate floor. 

Senate Debates Various Health Care Proposals

HB 156: Medicaid PHP Licensure/ Food Svcs State Bldgs, which was amended by Sen. Ralph Hise (R-Mitchell) in the Senate Health Care committee on Thursday, would create a Prepaid Health Plan (PHP) Licensure Act, governing the Department of Insurance’s licensure of PHPs as part of Medicaid transformation. The bill would require a PHP to be licensed by the Department of Insurance and sets a number of requirements for those licenses, including instating an application fee not to exceed $2,000 and annual license fees not to exceed $5,000, and allowing the Commissioner of Insurance to take certain actions if the PHP is in a hazardous financial condition. Additionally, HB 156 allows the Department of Health and Human Services to operate or contract for the sale of food at Department of Administration and Department of Insurance properties. The net proceeds of those food sales would be used to support programs that enable the blind and visually impaired through the Division of Services for the Blind. The bill was given a favorable report and has been sent to the Senate Finance Committee.

HB 277: Naturopathic Study, which was amended by Sen. Joyce Krawiec (R-Forsyth) in the Senate Health Care committee on Thursday, would create a study on the practice of naturopathic medicine in NC. The bill directs a workgroup to study approved naturopathic medicine programs, the scope of practice for naturopathic doctors, and whether the practice should constitute the practice of medicine under state law. The bill now heads to the Senate Committee on Rules.

 

 

Posted by: Kerri A. Burke, McGuireWoods Consulting LLC @ 12:00:00 am  Comments (0)
Tuesday, June 20, 2017
June 20, 2017 Legislative Update

As the legislature continues to move towards adjournment, lawmakers are considering major policy proposals and are nearing agreement on the state’s two year budget plan. This week, the legislature considered bills to ease regulatory burdens, reform parts of the state’s economic development structure, and improve health across the state.

Budget Update

After two weeks of negotiations, the House and Senate have reached a deal on the state budget package. The budget is expected to be unveiled the evening of Monday, June 20th with the House and Senate to follow with the necessary floor votes this week.

Economic Development

Reps. Susan Martin (R-Wilson), John Szoka (R-Cumberland), Stephen Ross (R-Alamance) and John Fraley (R-Iredell), introduced a proposed committee substitute (PCS) to HB 795: Economic Development Incentives Modifications in the House Committee on Commerce and Job Development this week. The bill, which received a favorable report on Thursday and now heads to the Committee on Finance, would: 

  • Reduce the number of jobs required for a project to qualify as high yield under the Job Development Investment Grant (JDIG). Under current law, a business must invest at least $500 million and create 1,750 jobs to receive this designation. Under HB 795, the requirements would instead be based upon the tier designation of the projects location, ranging from 1,750 jobs for projects in high-growth areas and 800 jobs in tier 1 areas.
  • Reduce the filing fee for JDIG award applicants based upon tier area, ranging from $10,000, the current amount for all filings, for tier 3 areas and all high-yield projects, to $1,000 for tier 1 areas.
  • Revise the system currently used by the Department of Commerce to rank counties for economic distress to evaluate ratio of employment to population for the civilian population aged 25 to 64, average annual wage and adjusted assessed property value per capita and eliminate all adjustment factors.
  • Require the Department of Commerce to report on the performance of each county and offer performance assistance to all counties.
  • Require all state agencies that use the tiers for non-economic development purposes to elect whether or not to continue use of the tiers. If an agency were to discontinue use, they would be required to develop criteria to achieve program objectives by October 1, 2017.
  • Require the Joint Legislative Economic Development and Global Engagement Oversight Committee to study and propose legislation that separates the economic development tiers and non-county designations for targeted programs.
  • Extend the JDIG sunset to January 1, 2025.

To read more about HB 795, please click here to review a summary prepared by legislative staff.

  • Make conforming changes to the process for Medicaid beneficiaries enrolled in a LME/ MCO to appeal or file grievances, to align with recently passed federal managed care regulations.

Regulatory Reform

On Thursday afternoon, the House passed SB 16: Business & Agency Regulatory Reform Act of 2017, after a committee substitute that was introduced in the House Committee on Regulatory Reform on Wednesday. The bill, which now heads back to the Senate for concurrence, includes provisions that would:

  • Amend laws regarding bed and breakfasts to remove a 23 guest per night limit, and allow the inns to serve lunch and dinner and charge for those meals separately.
  • Amend alarm system business licensing statutes to remove a requirement that alarm system sales agents be residents of NC.
  • Repeal a requirement that businesses must employ a minimum of 26 employees to purchase stop-loss insurance.
  • Authorize private condemnation of land for pipelines that originate outside of the state.
  • Prevent cities from requiring improved stormwater controls when properties are redeveloped.
  • Add backup lights to the list of lights covered by state vehicle safety inspections.

SB 16 passed with a 94-19 vote. To read more about SB 16, follow this link to review a summary prepared by legislative staff.

The Senate also introduced an omnibus regulatory reform bill this week via committee substitute. HB 374: Business Freedom Act, which passed the Senate Committee on Commerce and Insurance on Thursday would:

  • Amend labor laws by limiting who can approve youth employment certificates, codifying the Carolina Star Program, and amending the Passenger Tramway Safety Act.
  • Amend the definition of a landfill’s “life-of-site” to include that the period may not exceed 60 years.
  • Allow construction of a parking garage to extend a lot line between a city-owned and a privately-owned lot without meeting certain building code provisions.
  • Amend stormwater runoff rules for airports by restricting local governments from requiring control measures that promote standing water.
  • Direct the Medical Care Commission to repeal the Hospital Facilities Rules and replace them with the American Society for Healthcare Engineers Facility Guidelines Institute “Guidelines for Design and Construction of Hospitals and Outpatient Facilities.”

The bill now heads to the Senate Committee on Rules. To read a summary of the PCS prepared by legislative staff, follow this link.

 

Posted by: Kerri A. Burke, McGuireWoods Consulting LLC @ 12:00:00 am  Comments (0)
Monday, June 12, 2017
June 12, 2017 Legislative Update

The legislature is moving full steam ahead towards passing a two-year spending plan as budget conferees have begun negotiating the House and Senate’s budget proposals. As the long session begins to wind down, House and Senate leaders are also wrapping up the confirmation process for Gov. Cooper’s remaining cabinet appointees, and discussing major policy proposals regarding rural economic development, the regulation of firearms, and newspaper carriers.

House & Senate Continue Budget Negotiations

House and Senate leaders named their respective budget conferees on Monday, and began the process of negotiating their budget proposals. Conferees are expected to work through the weekend and are on track to release their conference report as early as next week and no later than June 30, the end of the fiscal year. Once the budget is on the Governor’s desk, he will have ten days to either sign or veto the spending plan.

The list of conferees for both chambers can be found here.

To read more about the House and Senate’s differing proposals, follow these links:

NC House Releases Budget Proposal

NC Senate Releases Budget Proposal

House Debates New Rural Investment Fund

Sponsored by bipartisan group of House members, HB 904: North Carolina Rural Job Creation Fund would create the NC Rural Job Creation Fund, a new economic development fund aimed to target investment in rural areas. Sponsored by Reps. Stephen Ross (R-Alamance), Ken Goodman (D-Richmond), Jeff Collins (R-Nash), and John Faircloth (R-Guilford), HB 904 calls for an annual $50 million appropriation, which was not included in either chamber’s proposed budget, would:

  • Provide matching funds to businesses that expand operations in rural or economically distressed areas.
  • Invest at least 70% of its funds in tier one or two counties, with the remaining portion targeted to economically distressed areas in tier three counties.
  • Require repayment of the investment if certain job growth measures are not met, and no more than $5 million in state funds may be invested in one business.

Bill sponsors say this legislation would increase access to capital for companies in rural areas, and would encourage private equity firms and other investment groups invest in rural North Carolina. HB 904 was heard by the House Committee on Commerce and Job Development on Wednesday and has been sent to the Committee on Appropriations.

House Clears Comprehensive Energy Policy Reforms

A bill to modify the state energy policies moved through the House this week after months of stakeholder negotiations. The bill aims to reshape the relationship between traditional utilities and renewable energy providers, which has been managed by Renewable Energy Portfolio Standards (REPS) since 2007.

HB 589: Competitive Energy Solutions for North Carolina, sponsored by Reps. John Szoka (R-Cumberland), Dean Arp (R-Union), and Sam Watford (R-Davidson), passed the House this week, 108-11. Among other provisions, the bill would:

  • Align the state definition of small power producers in state law with the federal definition of small power production facilities as a generating facility of 80 MW or less whose primary energy source is renewable, biomass, waste or geothermal resources.
  • Require utilities to offer standard contracts to small power production facilities for up to ten years, dependent on the size of the facility.
  • Create a process for the competitive procurement of new renewable energy resources for public utilities with 150,000 customers or more.
  • Create a new renewable energy procurement program for large energy users, the military and the University of North Carolina system.
  • Enable public utilities to recover the cost of Public Utilities Regulatory Policy Act (PURPA) qualified facility purchased power through the existing fuel clause rider.
  • Reduce the cost of Renewable Energy Portfolio Standard requirements for residential customers from $34 per account per year to $27.
  • Enact a new Distributed Resources Access Act to authorize leasing of third-party owned solar development.
  • Direct the NC Utilities Commission to establish standards that include an expedited review process for swine and poultry waste to energy projects.
  • Enact a solar rebate program to provide incentives to customers that install or lease solar energy facilities.

To read more about the details of HB 589 and how it compares to existing law, follow this link.

In an unusual fashion, Speaker Tim Moore (R-Cleveland) spoke in support of the bill in the House chamber on Wednesday. Proponents of the bill state that it will make solar more competitive in the state, while lowering costs tremendously for all ratepayers. The bill was referred to Senate Rules yesterday.

Autonomous Vehicle Regulations

Sponsored by Reps. Phil Shepard (R-Onslow) and John Torbett (R-Gaston), HB 469: Regulation of Fully Autonomous Vehicles seeks to regulate the emerging technology of driverless vehicles. Presently, NC is being used as a test site for autonomous vehicles, but state law does not permit the personal use of the vehicles. The bill, which passed the House in April by a vote of 119-1, was brought to the Senate Committee on Transportation on Wednesday for discussion only. If passed, HB 469 would:

  • Clarify that the operator of an autonomous vehicle must be a licensed driver.
  • Prohibit minors under the age of 12 from riding in an autonomous vehicle without an adult in the car.
  • Define a fully autonomous vehicle as one that is able to perform all real-time operational and tactical functions required to operate in on-road traffic without driver interference.
  • Require similar safety standards as traditional vehicles, such as requiring all passengers to wear a seatbelt and requiring liability insurance.  

If the bill receives approval from the committee at a future meeting, it will have a final stop in the Senate Committee on Rules, where a Senate companion, SB 337, has been sitting since late March, before heading to the floor for a vote.

Newspaper Carriers & Employment Classification

A bill that would change the employment status of newspaper carriers from independent contractors to employees is headed back to the House for concurrence this week, after receiving approval from the Senate with a 29-14 vote. Sponsored by Reps. Allen McNeill (R-Randolph) and Lee Zachary (R-Yadkin), HB 205: WC for Inmates/UI & WC/Newsprint Employees passed the House in early March as a bill to provide worker’s compensation for certain prisoners working in prisons. However, when the bill arrived in the Senate, Sen. Trudy Wade (R-Guilford) added provision that would remove a carve out for newspaper carriers, which allows  them to be classified as independent contractors instead of employees entitled to benefits such as worker’s compensation, unemployment insurance, and taxation. Those opposed to the bill say it would cripple the state’s newspapers, especially in small towns. Proponents argue that this is a way to fairly treat individuals who work as employees, and are not currently provided benefits.

House Narrowly Passes Omnibus Gun Changes

Legislation to make various changes to state gun laws received approval from the House by a vote of 65-51 on Thursday. HB 746: Omnibus Gun Changes., sponsored by Reps. Chris Millis (R-Pender), Larry Pittman (R-Cabarrus), Justin Burr (R-Stanly), and Michael Speciale (R-Craven), would allow an individual to carry a concealed handgun in areas where it is allowed to be carried openly. Also, the bill would lower the age to carry a concealed weapon from 21 to 18, and remove the requirement for a conceal carry permit unless the individual is prohibited from owning a gun under current law. Proponents of the legislation argue the bill provides clarity in current law, and allows for parity between open and concealed carry. Opponents say eliminating the conceal carry permit removes necessary safeguards and required firearms training that protects the public. The bill now heads to the Senate. Eight House Republicans joined the Democratic caucus in voting against the bill, so the current vote count would not be able to override a veto from Gov. Cooper.

Primary Date Change

In general election years, NC holds primaries on the first Monday in May, though a law passed in 2015 pushed the primaries to March in 2016 only, in an attempt to give the state more influence in the presidential election. A bill sponsored by Sen. Andrew Brock (R-Davie), would make that change permanent. SB 655: Change Date When Primary Elections Held passed the House 71-46 on Tuesday. The bill now heads back to the Senate after an amendment from Rep. Darren Jackson (D-Wake), changed the bill’s effective date from 2018 to 2020.

Supreme Court and Legislative Districts 

Last year, a three-judge federal panel determined that 28 NC legislative districts were racial gerrymanders, and ordered the legislature to redraw the maps and hold special elections in 2017. The special elections were put on hold as legislative leaders appealed the decision to the United States Supreme Court.

On Monday, the Supreme Court issued a ruling affirming the lower court’s decision, following a similar decision last month on the state’s congressional districts. The Court ordered the same three-judge panel to reconsider how to correct the maps. As the week continued, House and Senate lawmakers and Gov. Roy Cooper have disagreed on when the maps will be redrawn.

The Governor issued a proclamation for a two week long special session on Wednesday afternoon, calling legislators to begin redrawing new legislative maps the following afternoon. On Thursday, Rep. David Lewis (R-Harnett) and Sen. Ralph Hise (R-Mitchell), chairmen of the elections committees in their respective chambers, called the Governor’s proclamation unconstitutional and a political move, before cancelling the special session. 

Confirmation of Remaining Appointees

Governor Cooper’s final two cabinet appointees appeared before Senate committees for their respective confirmation hearings on Tuesday. Ron Penny, Secretary of the Department of Revenue, appeared before the Senate Finance Committee, and Eric Boyette, Secretary of the Department of Information Technology, appeared before the Senate Commerce and Insurance Committee. Both appointees received recommendations for confirmation and the appointments now head to the Senate Select Committee on Nominations, and then to the full Senate for final approval.

 

Posted by: Kerri A. Burke, McGuireWoods Consulting LLC @ 12:00:00 am  Comments (0)
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