United States: April 17, 3015 NC Legislative Update

Legislators are back in Raleigh after a week off and it doesn't look like anything has changed after the extra time they were given to reflect on the session.  Just as we've seen before:

  • There's a new bill that would allow the opossum to be dropped in Brasstown on New Year's Eve. 
  • There's another economic incentives bill in the House. 
  • There were dogs that had been rescued from puppy mills at the legislature to lobby for the puppy mill bill. (And YES, that was best thing to happen all week!!!!  Well, for Angel at least.  Laura watched and smiled.)

One thing that we haven't seen before is the introduction of multiple bills dealing with the prohibition of powdered alcohol.  You heard it right.  Powdered.  Alcohol.  There's just too much to say about that.

Opossum* Drop

There's a perennial issue out there that offers a good lesson in sausage-making: the Clay's Corner Opossum Drop. For more than six years, Clay's Corner in Brasstown, NC has been fighting to maintain its now famous New Year's Eve tradition of lowering a caged Opossum at the stroke of the new year. PETA and other animal lovers groups have been trying to get it stopped through administrative hearings and Superior Court, but lawmakers have been trying to find a way to let this tradition continue in a limited way.  In 2014, a bill was filed to carve out Clay County from NC wildlife laws regarding opossums at year's end, which many argue is unconstitutional. This year's attempt is HB 574 which exempts opossums statewide from protections pertaining to capture and treatment of animals from December 29th until January 2nd.  The effect of that carve out is that New Year's opossum drops would be legal statewide.  The bill got a nod from the House and will be considered by the Senate. It would be in bad taste to say that there's more than one way to skin a cat.

*"O" or No?  Opossum refers to the animals native to North America, while possums are native to New Guinea, Australia and Indonesia.  Thank us later when you answer that question correctly in trivia.

Another Incentives Bill

HB 920Omnibus Economic Development Improvements – is the latest economic development bill to be introduced in the House.  With a bipartisan sponsorship led by Rep. Jason Saine, this bill includes many of the same things as the previous economic development bill that the House sent over to the Senate.  But because the Senate is sitting on that bill, the House decided to hit them again.  New additions in this bill include:

  • Historic rehabilitation tax credits
  • Film grant fund modifications
  • Credit for manufacturing cigarettes for exportation
  • Use of North Carolina ports credit
  • Motorsports sales tax credit

No word yet on what the Senate will do.

Elections Bills

Judicial Elections

HB 8Restore Partisan Statewide Judicial Elections – would restore the "D" and "R" beside a judicial candidate's name on the ballot.  A decade ago, judicial elections were made nonpartisan and public funds were made available for judicial campaigns by a Democratic legislative majority. In the last few years, Republicans have eliminated public financing and outside spending has taken its place in judicial elections. This bill would make them partisan elections, requiring primaries in some cases.  Bill sponsors argued that providing candidate party affiliation will help voters to make choices based on whether a candidate's ideology matches their own, thus increasing voter interest in these elections.  Opponents don't believe that partisan politics should be brought into races of judges who should be impartial.

 The bill passed the House Elections Committee on Tuesday and got its second nod on the House floor with 3 Republicans and an Independent joining the Democrats in their losing effort.  Final House approval is scheduled for Monday, after which it will be sent to the Senate for consideration.

Gubernatorial Elections

HB 344Gubernatorial Team Ticket – also passed the House Elections Committee on Tuesday.  This bill would change the current method of separately electing the governor and lieutenant governor, instead making them run as a single ticket.  Candidates would run separately in the primaries before being teamed up for the general election.  The bill sponsor, Rep. Bert Jones, believes that the governor and lieutenant governor should be from the same party and might remember the photo finish between LTG Dan Forest and Democratic candidate Linda Coleman – who has formed her committee to run again.  As a practical matter this bill would make it close to impossible for an unaffiliated candidate to run.  Look for it on the House floor next week.

LegalZoom

HB 436Unauthorized Practice of Law Changes – updates the definition of "practice law" and authorizes the State Bar to challenge an additional list of unlicensed services, including online services like LegalZoom.  Online service companies argue that the State Bar is simply trying to protect its turf, but the State Bar argues that there is a legitimate concern for public protection.  The bill easily passed the House Judiciary I Committee and will now head to the House floor.

Revenue Forecast

Most North Carolinians filed their taxes this week and have an opinion about the new Republican Tax Plan that is now fully in effect – they are either winners or losers. Detractors from our new tax structure have been awaiting a post-April 15th notice of a structural budget deficit, but whether the sky is actually falling is not clear.  The state budget is drafted, considered and passed by the General Assembly upon the professional advice of its staff economist, who says there will be budget hole of $94 million.  However, if you ask the State Budget Officer who answers directly to the Governor and has responsibility for implementing the enacted budget, he's still suggesting a hole of $271 million. It's rare that they don't agree. There will be a shortfall – and there always is since NC budgets one-time money in addition to recurring revenues from fees and taxes. We're anxious to see what the "April Surprise" looks like this year since it will determine the tax policy talking points for the 2016 elections. (I know – too soon!)

This leaves the Republicans with the problem providing adequate funding for state and local governments with the natural but problematic solution of raising taxes.  A few creative members are now looking at gaming revenue to fill some gaps.

Sweepstakes

HB 938Comprehensive Gaming Reform – was introduced by Rep. Harry Warren.  This bill would eliminate the State Lottery Commission and replace it with the North Carolina State Gaming Commission with expanded oversight covering ALL gaming in the state, including bingo and the boxing commission.  It would also legalize and regulate the operation of sweepstakes establishments with a valid license issued by the Gaming Commission.  Just a few ways this bill could generate revenue are through application fees ($250), penalties for operating sweepstakes without a license ($25,000-$100,000), and annual excise taxes on sweepstakes establishments and devices ($2,000 and $1,000 respectively).  It also allows counties and cities to impose an annual excise tax of $500 on each sweepstakes device and $1,000 on each sweepstakes establishment.  Local governments must distribute at least 3% of these revenues to the county sheriff's department or the municipal police department of the taxing jurisdiction.  The remainder many be used for any public purpose. 

HB 922Video Sweepstakes Regulation and Taxation – was introduced on the same day by Rep. Chris Malone.  This bill also legalizes and regulates the sweepstakes industry and has the same fees and penalties as Warren's bill.  The major difference is that this bill does not create a gaming commission to oversee all forms of gaming in the state.

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