United States: North Carolina General Assembly Week In Review - September 18, 2015

Governor signs NC Budget

The Governor signed the budget bill, HB 97, earlier today. Thursday night, just after midnight, the House gave its final approval to HB 97, the 2015 Appropriations Act.

The House went into session at 5 pm on Thursday, to start debate on the budget bill. The House debated the bill for 5 hours. In the end, 9 Democrats voted with 71 Republicans in favor of the budget, Rep. Gale Adcock (D-Wake), Rep. William Brisson (D-Bladen), Rep. Ken Goodman (D-Richmond), Rep. Charles Graham (D-Robeson), Rep. Susi Hamilton (R-New Hanover), Rep. Rodney Moore (D-Mecklenburg), Rep. William Richardson (D-Cumberland), Rep. Ken Waddell (D-Columbus), and Rep. Michael Wray (D-Northampton).

The Senate gave its approval on Wednesday. The Senate debate began on Tuesday at 2 pm, just over 14 hours after the conference report was published online. The vote was mostly along party lines, with the exception of three Democrats, Sen. Ben Clark (D-Hoke), Sen. Jane Smith (D-Robeson), and Sen. Erica Smith-Ingram (D-Northampton) voting in favor of the budget on its final reading.

The State has been operating under a continuing resolution (CR) since July 1, 2015. The current CR was set to expire tonight at 11:59 pm.

Read HB 97 here.

Medicaid reform bill to be heard next week

On Thursday, September 17, the conference committee report for HB 372, Medicaid Transformation and Reorganization, was reported into the House and Senate chambers. Under the new plan, Prepaid Health Plans (PHPs) will be responsible for the delivery of Medicaid services. The bill defines PHPs as "an entity, which may be a commercial plan (CP) or provider-led entity (PLE) that operates or will operate a capitated contract." Additionally, the bill defines a CP as "any person, entity, or organization, profit or nonprofit," and defines a PLE as an entity in which "a majority of the entity's ownership is held by an individual or entity that has as its primary business purpose the ownership or operation of one or more Medicaid and Health Chose providers" and a majority of the entity's governing body must be composed of physicians, physician assistants, nurse practitioners, or psychologists.

As originally proposed in the Senate's reform plan, three PHPs will contract with the Division of Health Benefits and will serve recipients statewide. Additionally, the Division of Health Benefits could contract with up to 10 PLEs for regional contracts. Medicaid recipients will be able to choose their preferred plan, whether it is a CP or PLE, or a statewide or regional plan.

Under the new compromise plan DHHS will continue to have full authority to manage the Medicaid and NC Health Choice programs. A new division, however, will be created. The newly-created Division of Health Benefits will be responsible for implementing Medicaid reform, and will eventually take over the duties currently vested in the Division of Medical Assistance (DMA). Twelve months after capitated contracts begin, DMA will be eliminated.

The state's current LME/MCOs will continue to manage all of the behavioral health services that they currently provide, for at least four years. After that time period, it is possible that behavioral health care could be turned over to the PHPs, if the legislature chose to do so.

Once HB 372 becomes law, the Division of Health Benefits and a legislative oversight committee, the Joint Legislative Oversight Committee on Medicaid and NC Health Choice will both be created. Additionally, the new division will be responsible for submitting all necessary waivers and State Plan amendments (SPAs) to the Centers for Medicare and Medicaid Services. It is expected that the process to get all of the proper approval for necessary waivers and SPAs could take from 12 to 24 months. Eighteen months after the state receives approval, capitated contracts under PHPs will begin, and initial recipient enrollment must be complete.

It is expected that the House and Senate will both vote on the measure on Tuesday, September 22. Governor McCrory has stated that he plans to sign the legislation.

Read the conference report to HB 372 here.

Agreement reached on economic development bill

Late Thursday night, the conference report to HB 117, NC Competes Act, was posted on the NC General Assembly website. The conference report contains changes to the Job Development and Investment Grant (JDIG) and OneNC programs, several changes to the tax code, and a section dealing with tax compliance and fraud prevention.


The JDIG program underwent the most modifications. Under the conference report, the program was given a three year extension, changing the expiration from January 1, 2016 to January 1, 2019.

The conference report creates a new category of qualifying project called a high-yield (HY) project. A qualifying HY project is a project that has an investment of at least $500 million in private funds and provides 1,750 jobs. The conference report allows the grant to be disbursed for 20 years, unless the project becomes disqualified, where the grant will terminate in the year the project becomes disqualified.

Additionally, HB 117 will increase the State's liability cap from $15 million to $20 million, for a year in which no grant is awarded for a HY project, and $35 million for years that include a grant awarded to a HY project. The grant will be available in semiannual commitment limitations less than or equal to 50%.

The conference report changes the disbursement for projects located in tier 2 counties, to allow only 10% of the grant to be diverted to the Utility Fund. It also modifies the percentage of withholdings to 80% for tier 1 counties and 75% for tiers 2 and 3. The grant will allow businesses that meet the HY requirements for 3 consecutive years to receive 100% of withholdings for each eligible job for the consecutive 3 years.

Also, it adds a new requirement of local government participation in the recruitment and offer of incentives. It requires rejected offers to be published in a list.


The only change to OneNC is the matching formulas. Under the conference report, the state will match $3 to every $1 in local money for tier 1 counties, $2 to $1 for tier 2 counties, and $1 to $1 for tier 3 counties.

Tax changes

The conference report provides a tax credit on electricity for Datacenters with $75 million in private investment funds. Aircrafts weighing between 9,000 pounds and 15,000 receive a tax credit on jet fuel. Modular homes, aircrafts, and jet engines are added under the privilege tax. The conference report exempts motor vehicle service contracts and motorsports parts and fuel from sales tax. The conference report also includes various changes impacting tax compliance and fraud prevention.

What is not included

The conference report does not address the sunset of several tax credits, set to expire in this fiscal year including renewables and the Research and Development tax credits.

The finance portion of the state's budget, HB 97, is contingent on HB 117 becoming law before January 1, 2016. The conference report to HB 117 is set to be heard in the Senate on Monday.

Read the conference report to HB 117 here.

Compromise reached on local government regulation bill

The House and Senate voted to approve a conference report to HB 44, Local Government Regulatory Reform 2015. The conference report:

  • Provides local governments different options for notice to chronic violators of overgrown vegetation ordinances.
  • Authorizes cities to regulate uninhabitable structures that unreasonably restrict the public's right to use the state's ocean beaches.
  • Prohibits local governments from requiring compliance with voluntary state rules and regulations or rules and regulations with a delayed effective date.
  • Repeals the requirement local governments comprising the local health department maintain operating appropriations from local ad valorem taxes.
  • Provides developers of property located partly within the municipality options to 1) apply the county land use planning ordinances to the entire property or 2) apply the municipality's ordinances to the portion within the municipality and the county ordinances to the rest of the property.
  • Allows local governments to permit irrigation and drinking water wells.
  • Limits fence wrapping signage to advertising sponsored by a person directly involved in the construction of the project
  • Removes exception for zoning permits from the Permit Choice statutes, NC Gen. Stat. § 143-755
  • Makes various changes to the Preaudit Certification statutes, effective October 1, 2015.
  • Limits local governments' ability to regulation beehives.
  • Requires notices to adjacent property owners prior to the start of any construction project, but limits the notice period to 15 days.
  • Includes modifications to riparian buffer regulations.
  • Requires zoning density ordinances to provide credits or severable development rights for dedicated rights-of-way.
  • Makes various changes to inspections of buildings certified by licensed architects or licensed engineers.
  • Clarifies local governments' authority to define bedroom.
  • Provides more flexibility to cities regarding development agreements.

The bill will be sent to the Governor.

Read HB 44 here.

Senate sends Employee Misclassification Bill back to House for concurrence

On Thursday, the Senate signed off on its own version of Employee Misclassification Reform, HB 482. The Senate made substantial changes to the bill.

The Senate Committee Substitute for HB 482 (SCS) requires the advisory council to meet at least quarterly. The Senate also modified the House bill by creating a new appeal process for the employer within the Industrial Commission. It removes the following two factors the House included in its version of the bill dealing with how independent contractor status was determined, 1) the level of the individual's investment in equipment or tools required to perform the work and (2) the individual's opportunity for profit or loss. The Senate further removed a requirement that violation of the statute constituted revocation of the violator's license, and disqualification of some violators from contracting with the State. It removes the exception for newspaper, shopping news, and magazine distributors from the employment definition under the Unemployment Insurance statutes. Finally, the SCS removes the appropriations to DOR for administration and enforcement of the statute.

The bill is currently in the House Rules Committee.

Read HB 482 here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.