United States: North Carolina General Assembly Week In Review - August 21, 2015

Agreement Reached on Total Budget Spending Number

NC State Government is currently operating under a Continuing Resolution (CR), SB 560, 2015 Continuing Budget Authority. This CR is set to expire at 11:59 pm on August 31, 2015. With less than two weeks before the CR expiries, House and Senate leadership have agreed to a total spending number but continue to negotiate the details of the budget.

On Tuesday, the House and Senate agreed to spend $21.735 billion on the NC budget, which is approximately $265 million more than the Senate proposed in its budget, and $420 million less than what the House proposed in its budget. Already almost 8 weeks into the 2015-16 fiscal year, State services are continuing and most traditional schools are starting. Yet, teachers assistants, economic development programs, and driver education remain on the negotiating table for budget discussions.

The General Assembly will have to pass a budget bill, or another CR before the August 31st midnight deadline.

Read the new CR here.

HB 117 Conferees Appointed by the House

House Bill 117, NC Competes Act, passed the Senate chamber last week, but was rejected by the House on Wednesday, 111-2, in a motion not to concur with the Senate changes. The vote outcome was due largely to the Senate's addition to a change in the local option sales tax (LOST) distribution formula.

Yesterday the House appointed conferees. Chairing the conference committee for the House is Rules Chairman Rep. David Lewis (R-Harnett). Other conferees include: Reps. Jason Saine (R-Lincoln), Bill Brawley (R-Mecklenburg), John Szoka (R-Cumberland), Charles Jeter (R-Mecklenburg), Susan Martin (R-Wilson), Jeff Collins (R-Nash), Bob Steinburg (R-Chowan), Ted Davis (R-New Hanover), Stephen Ross (R-Alamance), John Bradford (R-Mecklenburg), Jeffrey Elmore (R-Wilkes), and Leo Daughtry (R-Johnston). Four Democrat members join the conference committee: Reps. Ken Goodman (D-Richmond), Rodney Moore (D-Mecklenburg), Susi Hamilton (D-New Hanover), and Darren Jackson (D-Wake).

The Senate has not yet appointed conferees.

Read HB 117 here. See the bill summary here.

Medicaid Reform Conference Committee

Also on Wednesday, the House failed to concur to Senate changes to HB 372, Medicaid Transformation/HIE/PrimaryCare/Funds. The House and Senate appointed final conferees on Thursday. Co-Chairs for the House will be Reps. Donny Lambeth (R-Forsyth) and Nelson Dollar (R-Wake). The Senate will have three Co-Chairs, Sens. Ralph Hise (R-Mitchell), Louis Pate (R-Wayne), and Tommy Tucker (R-Union).

The House and Senate, as well as the Governor, all agree that they want to move away from the state's current fee-for-service system to a full-risk capitated system. Disagreements between who will administer the program has divided the Senate and the House.

The Senate version creates roles for both managed care organizations (MCOs) and provider-led entities (PLEs). The three MCOs would operate on a statewide basis, while the PLEs would operate in regions. On the other hand, the House version permits provider-led entites to bid for contracts and manage networks of at least 30,000 Medicaid recipients.

On Wednesday, however, House leaders announced that they would pursue a hybrid model, moving them to agree with the Senate that MCOs and PLEs could operate in the state.

Also on the negotiating table will be whether a new department will be created to oversee the state's Medicaid program. Under the Senate's plan, a new Department of Medicaid would be responsible, while the House prefers to keep the program under the Department of Health and Human Services.

HB 372 negotiators will also have to determine whether the Community Care of NC (CCNC) program will continue under the reformed Medicaid system. The Senate proposes to cancel that contract and instead use those savings to raise the rates for OB/GYNs and certain primary care physicians up to 100% of the Medicare rate. The House prefers to build off the home-grown medical home system. Yesterday, State Auditor Beth Wood released an audit that determined that the CCNC model did produce savings to the state.

Read HB 372 here.

House Passes Changes to Unemployment Insurance

The House passed SB 15, Unemployment Insurance Law Changes, on Thursday. The House changes, made earlier this month, included changes to the reporting requirements, modified the effective date to January 1, 2016, changes to the limitations on suits or proceedings for unpaid contributions, amendments to the photo identification requirement, amendments to the procedure for protest claims, changes the weekly benefit amounts, and changes the charges to the employer's account to quarterly.

Among other provisions, SB 15 increases the current job contact requirement for those receiving benefits from two contacts per week to five contacts per week, while giving the receipt more flexibility regarding when and how those contacts are made. Rep. Jonathan Jordan (R-Ashe) moved to amend the bill on third reading to change the requirement to three contacts per week. Rep. Jordan stated on the floor his amendment would bring NC in compliance with the overwhelming majority of other states, while still increasing NC's current requirement from two contacts to three contacts per week. Rep. Julia Howard (R-Davie) spoke in opposition to Rep. Jordan's amendment, arguing the Senate would not agree to any further changes. Rep. Howard concluded if the House passed Rep. Jordan's amendment the House risked the entire bill failing in the Senate. Rep. Jordan's amendment failed, 49-60.

The bill now goes to the Senate for concurrence.

Read SB 15 here.

Transportation Network Companies Passes House Finance

On, Thursday, the House Finance Committee gave approval to SB 541, Regulate Transportation Networks Companies, with little debate. The bill will go to the House floor next week. The bill requires companies to buy insurance coverage for their drivers and passengers. The bill also requires the company to preform nationwide criminal background checks on drivers. Uber, Lyft, and other Transportation Network Companies have provided input in the development of the proposed regulatory framework.

Read SB 541 here.

Changes to Unclaimed Life Insurance Benefits Passes the House

This week the House gave approval to SB, 665, Unclaimed Life Insurance Benefits. The approved version was the result of lengthy negotiations between stakeholders.

During the Judiciary I committee hearing, Chairman Rep. Leo Daughtry (R-Johnson) and Tony Solari (NC Department of State Treasurer liaison) publically thanked Jeff Barnhart and Franklin Freeman of McGuireWoods Consulting, LLC (lobbyists for the National Alliance of Liability Carriers), and Mike Mann (lobbyist for Kemper) for their diligent work on this bill.

SB 665 requires insurers to perform a semiannual comparison report with the Death Master File, or similar file, of its in-force policies, annuities, and account owners, with some exceptions. The requirement is prospective for all policies and annuities entered into beginning October 1, 2015 and after. However, the requirement is retroactive for any policy or annuity issued by a company that has or does engage in asymmetric conduct. The bill does not modify or supersede the authority of the State Treasurer to examine records and conduct an audit, nor its ability to request or access records of an insurer and visit an examination of the insurer's records under Chapter 116B, Escheats and Abandoned Property, of the General Statues.

The bill passed second and third readings in the House on Thursday and now goes to the Senate for concurrence.

Read SB 665 here.

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