United States: North Carolina General Assembly Week In Review - August 03, 2015


Last Monday night the Senate passed HB 774, Restoring Proper Justice Act, 33-16. According to HB 744's supporters, the bill will allow executions to resume in the state. The last execution occurred in 2006.

The House voted to concur, 74-34, on Wednesday. House debate focused on the protection of manufacturing information of the drugs from public record. Members favoring the protection argued that it was good public policy. Those members likened the protection to requirement to keep names of personnel involved in the execution out of public record.

The bill was presented to the Governor on Friday. He has 10 days to either veto or sign the bill into law.

See HB 774 here.

Budget Public Comment

On July 29, the House Appropriations committee heard public comment on the Senate's version of HB 97, Appropriations Act of 2015. Testimony and presentations focused on teachers assistants, drivers education, state employee salaries and benefits, economic incentives, and the Senate's proposal to change the distribution formula for the local option sales tax.

Teachers, principals, superintendents, and teacher assistants (TAs) spoke on the need for TAs to be fully funded, as well as the need for a budget agreement soon, so that their local budgets could be more predictable.

School superintendents and AAA Carolinas spoke on the need for driver education to be funded in the state, currently the Senate's proposed budget eliminates the requirement and all funding with it.

Under the House's proposed budget, teacher assistants are funded at the 2014-15 fiscal year level, driver's education is fully funded, provides a 2% cost-of living adjustment (COLA) to retirees and a 2% salary increase to all state employees, and makes major investments in economic development programs.

The N.C. Economic Developers Association, representatives from the Charlotte Chamber and other local chambers of commerce, and local government officials spoke primarily on taxation and economic development. The Senate's proposed budget includes changes to the current distribution of the local option sales tax. The formula changes over the next four years so that, effective July 1, 2019, 20 percent would be distributed to the county and city where a purchase is made, while 80 percent of sales taxes collected would be distributed based on population. Under current law, 75 percent of the sales tax goes to the county and city where the purchase is made, while 25 percent is distributed across the state based on population. The House's proposed budget does not include this change and would leave the current distribution formula as it is today.

See Budget differences here . Review committee presentations by NCGA staff here.

Budget Negotiations

Budget meetings were taking place last week, with House and Senate Finance chairs meeting to discuss differences in tax policy and economic development programs.

Although meetings are occurring, it is almost certain the chambers will not be able to come to an agreement on the 2015-2017 budget by the August 14 deadline imposed by the Continuing Resolution (CR) passed the last week in June. The chambers will most likely have to agree to another CR, or extend the current one. After the close of the 2014-2015 fiscal year, the N.C. Office of State Budget and Management reported a surplus of $445 million, $45 million more than expected. It is uncertain as to how this will impact the budget bill or a future CR.

See HB 97 here.

Fraudulent Investments

HB 287, Amend Insurance Laws-AB, an agency bill requested by the N.C. Department of Insurance, makes technical corrections to laws governing professional employer organizations, insurance company deposits, continuing care retirement communities, health insurance external review, health insurance fiduciaries, and insurance company names. The bill also creates a study of the health insurance premium rate review process and moneys from the insurance regulatory fund.

During the House Judiciary II Committee meeting last week, the bill was amended to include a provision to help one of Rep. Dana Bumgardner's (R-Gaston) constituents. The provision allows an itemized individual income tax deduction for investors who incur losses from criminally fraudulent investment arrangements. When an individual makes financial investments, he or she receive a statement of income regarding those investments. That statement of income is used in determining the individual's tax liability. Under current N.C. law, if that investment turns out to be fraudulent, due to a Ponzi or pyramid scheme for example, the taxpayer cannot go back and reclaim taxes he or she paid on the income that never actually existed. The provision in HB 287 is set to correct this issue. According to N.C. General Assembly staff, there is a federal law that addresses this issue regarding federal individual tax liability.

Last week, HB 287 bounced from committee to the House floor and back to committee again. The House Judiciary II Committee reported the bill favorable on July 28. The bill was then calendared for the following day, but later withdrawn and re-referred to the House Finance Committee where it was given favorable report the following day. The bill now sits in the House Rules Committee.

Read HB 287 here.

Employee Misclassification Reform

On Tuesday, HB 482, Employee Misclassification Reform, was heard by and given a favorable report from the House Judiciary II subcommittee. Rep. Rick Glazier (D-Cumberland) voiced some disappointment that the bill did not contain a provision that would protect the complaining employee from retaliation. Rep. Dan Bishop (R-Mecklenburg) offered to work with Rep. Glaizer on this concern.

Rep. Glaizer also expressed concern regarding the definition of non-profits. The N.C. Center for Nonprofits testified at the committee meeting that that was an unintended consequence from the bill with regard to the workers compensation statutes but the issue could be moot if one of the regulatory reform bills, HB 760 or HB 765, were enacted.

The bill is expected to be heard by the full House Judiciary II committee this week.

Read HB 482 here.

Transportation Press Conference

On Thursday, Sens. Wesley Meredith (R-Cumberland), Ralph Hise (R-Mitchell), Michael Lee (R-New Hanover), Warren Daniel (R-Burke), and Bill Rabon (R-Brunswick), co-chairs and members of the Senate Transportation Committee, held a press conference to discuss the Senate's plan to address funding for N.C. transportation needs.

The senators believe there is a better way to address N.C. long term transportation needs than the bond Governor McCrory has proposed. The Senate's plan puts over $200 million per year in recurring funds toward maintenance priorities, ports modernization, and other projects. It also adds $139 million to repair 400 structurally deficient bridges in the next two years, $70 million for pavement preservation, and $67 million for road improvement projects.

Also last week in transportation news, N.C. Department of Transportation (NCDOT) Secretary Tony Tata resigned, citing his writing career and family as the reason. Rep. Charles Jeter (R-Mecklenburg) and NCDOT Deputy Secretary Nick Tennyson have both stated interest in replacing Tata.

Privacy/Protection from Revenge Postings

HB 792, Privacy/Protection from Revenge Postings, passed second reading in the Senate on Tuesday. The bill aims to protect the public from revenge postings online by making it a criminal offense to disclose certain images in which there is a reasonable expectation of privacy and to make indecent exposure that occurs on private premises a criminal offense.

Sen. Gladys Robinson (D-Guildford) proposed an amendment that would lessen punishments for second and third convictions for defendants under 18 years old. Senator Robinson agreed to withdraw her amendment upon the request of Sen. Buck Newton (R-Wilson). Sen. Newton objected to third reading so he and Senator Robinson could work together to perfect her amendment.

The bill has been calendared for tonight's session, August 3, 2015.

Read HB 792 here.

Film Grants

A miniseries based on the 1987 movie "Dirty Dancing" has released the $4 million it was awarded from the N.C. Film Grant program. Applications have been reopened for the returned $4 million and will be accepted through Friday, August 7.

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