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NC Legislative Update: April 7, 2017

April 7, 2017

This Week

Lawmakers plan to take a one-week reprieve from legislating next week for the Easter Holiday.  Members of the House and Senate will be in Raleigh for the first part of the week, but will recess after Tuesday until the following Wednesday.

The House began the week revisiting the consolidation into a single board, the powers and duties of the State Board of Elections, the State Ethics Commission, and the Secretary of State’s oversight of lobbyists.  After a three-judge panel ruled in favor of the Governor regarding a lawsuit over the matter, House Republicans passed another measure this week that was similar, yet different from the overturned law that was passed last December.  This legislation would retain the Governor’s authority to appoint the members, and the Chair, of the board, but would still require a bipartisan 4-4 split, and would require the Governor to select members from a list provided by each of the State's two largest political parties.  A spokesman for Gov. Cooper (D), has indicated that the Governor intends to veto the bill.

Lawmakers revive plan for combined state elections, ethics board – WRAL
House GOP tries again on overhaul of elections oversight – N&O

The House concurred with Senate modifications to House Bill 7, entitled LRC/Strengthen Savings Reserve, sponsored by Rep. Nelson Dollar (R-Wake).  The bill mandates that the General Assembly continue to strengthen the State’s “rainy day fund” by transferring 15% of each fiscal year's estimated revenue growth to the savings reserve.  The bill awaits action from the Governor.

The House also passed Senate Bill 131, the Regulatory Reform Act of 2016, sponsored by Sen. Andy Wells (R-Catawba), in a bipartisan vote of 84-27.  The bill amends several State laws related to State and local government regulation and agricultural, energy, business regulation, environmental, and natural resources regulation.  The House made a number of technical changes to which the Senate must concur before the bill goes to the Governor.  The bill title notes 2016 because the legislation contains the provisions that passed both chambers from last year’s Regulatory Reform Act, which ultimately failed to pass.

An attempt by Rep. Chris Millis (R-Pender), to shepherd House Bill 470, entitled Responsible Wind Energy Implementation, through the House Committee on Homeland Security, Military & Veterans Affairs, was defeated by a vote of 12-6.  The bill, which is yet another attempt to restrict wind farms, would have required, among other provisions, that wind farms cannot be with 30 miles of a military installation.  Millis noted that this setback will not deter him from continuing to push the issue.

NC wind farm restrictions with 30-mile military buffer are defeated, for now – N&O

The Senate Rules Committee gave a favorable report to House Bill 229, entitled Reduce Court of Appeals to 12 Judges, sponsored by Rep. Justin Burr (R-Stanly). The bill would lessen the number of judges by three, from 15 to 12, as vacancies arise due to a mandatory judicial retirement age or other resignation.  Under current law, Gov. Cooper would appoint successors to any vacant seat.

Court of Appeals Reduction OK'd by Divided Senate Panel – U.S. News

The Senate continued the process of confirming more of Gov. Cooper’s Cabinet nominees.  The Senate unanimously confirmed Secretary Mandy Cohen of the Department of Health & Human services (DHHS) and Secretary Machelle Sanders of the Department of Administration.   Both Secretary Tony Copeland of the Department of Commerce and Secretary Michael Regan of the Department of Environmental Quality (DEQ) received unanimous Committee recommendations in the first step toward their confirmation.  Gov. Cooper announced his final two Cabinet appointments today.  He appointed Ron Penny for Secretary of the Department of Revenue (DOR) and Eric Boyette for Secretary of the Department of Information Technology (DIT).

Commerce secretary gets nod from Senate panel – N&O
Environmental agency head gets thumbs-up – N&O
After bumpy start, cabinet confirmations moving smoothly – WRAL

Ahead of the Senate’s Tuesday bill filing deadline, Senators scrambled to ensure their legislative proposals were introduced.  The Senate last week, extended its bill filing deadline for public bills until Tuesday, and does not have deadlines for Appropriations/Finance bills.  In the House, non-Appropriation/Finance public bills and resolutions must be filed by next Wednesday, April 12th.  Public bills that do have an impact on Appropriations or Finance must be filed by April 25th.  Crossover currently remains scheduled for April 27th, although that date may change.

In total 212 bills were filed this week, with 116 in the House and 96 bills filed in the Senate, bringing the total number of bills filed so far this session to 1,338.  After 11 weeks of session, only 4 bills total have become law, with one bill pending on the Governor’s desk.  A link to next week’s announced Committee calendar can be found here.  A cumulative list of House and Senate bills filed so far this year, links to each bill, and its current status can be found here

Notable bill filings from this week include:

House Bill 546 – Revise IVC Laws to Improve Behavioral Health
House Bill 571 – Automatic Expunction/Wrongful Conviction
House Bill 578 – Revisions to Outdoor Advertising Laws
Senate Bill 615 – North Carolina Farm Act of 2017
Senate Bill 621 – Business Contracts/Choice of Law and Forum
Senate Bill 622 – Business Corporation Act Revisions
Senate Bill 628 – Various Changes to the Revenue Laws
Senate Bill 629 – Health Care Services Billing Transparency

Legislation in the News:

New Bill Aims to Improve Access to Cancer Treatment Medicines in NC – Spectrum News
Legislators And Physicians Target Opioids – NC Health News
New approach to state construction funding could generate billions, NC House GOP says – N&O
Duke Energy may seek legislative action on controversial solar development proposals – CBJ
Wake senator leading charge to overhaul NC child welfare system – WRAL
Legislation would end impact fees on development in NC – N&O
Mandatory background checks for teachers advances in House – WRAL
NC lawmakers propose changes to state constitution to enshrine victims’ rights – N&O
Tax compliance flap shakes up craft beer debate – WRAL
NC bill would raise legal vaping and smoking age to 21, some exceptions included – Winston-Salem Journal
Domestic violence homicides could be tried as first-degree murder cases under bill – WRAL
Let schools start earlier in August, NC House says – N&O
Lawmaker's push for four-year terms derailed – WRAL
House seeks tougher penalties for first responder attacks – WRAL
Bills would keep legal ads in print – Havelock News
Hog waste bill moves to House floor – WRAL
Proposed North Carolina law aims to curb distracted driving, hand-held phone use behind the wheel – Port City Daily
Skeptics seek solar cell study - again – WRAL
Boswell, Cook sponsor bills aimed at shrimping rule petition – Outer Banks Voice
Deaf driver's license bill passes NC House – WRAL

Senate Tax Relief

The Senate passed Senate Bill 325, the Senate tax relief plan sponsored by Sen. Jerry Tillman (R-Randolph), Sen. Andrew Brock (R-Davie), and Sen. Tommy Tucker (R-Union), the Co-Chairs of the Senate Finance Committee.  Senate leadership has touted the bill as $1 Billion in tax relief for the middle class.  The proposal passed 34-13 on party lines.  Highlights include:

  • Reducing the State personal income tax rate from 5.499% to 5.35%;
  • Raising the standard deduction to remove approximately 94,000 people from income tax liability in the State, increasing the share of the income tax burden towards wealthier individuals, without increasing their taxes.  The amount of income in the zero-tax-bracket would increase: from $17,500 to $20,000 by 2018 for married filing jointly; from $14,000 to $15,000 for head of household; and from $8,750 to $10,000 for single filings or married filing separately;
  • Modifies the mortgage interest deduction which is currently capped at $20,000 to: $22,000 for married filing jointly; $16,500 for head of household; and $11,000 for single filings or married filing separately;
  • Modifies the child deduction amount to coincide with adjusted growth income and filing status, scaling from $2,500 deduction for each dependent in the lowest income bracket, to zero deduction for the highest income bracket;
  • Reduces the State’s corporate income tax rate, which is currently 3%, would drop to 2.75% in 2018 and 2.5% in 2019; 
  • Provides a reduction to the franchise tax for S-Corporations;
  • Shifts the method of tax collection on some businesses to market-based sourcing.  The move benefits North Carolina based businesses by shifting to taxation on a company’s revenues from sales from the State, rather than taxing investments and employment.

Senate passes billion dollar tax cuts – NSJ

In the News

The $90 Billion Investor Who’s Out to Fire Wall Street – Bloomberg
New, smaller UNC Board of Governors takes shape – N&O
Gov. Roy Cooper hints more executive orders to come at TBJ Power Breakfast – TBJ
North Carolina governor asks Congress for $1 billion more in Hurricane Matthew help – N&O
A Plea for Oral Health – NC Health News
Lewis: Final tax cut may be bigger than Senate’s $1 billion package – Carolina Journal
Despite bathroom bill replacement, mayors won't budge – AP
NCAA Lifts Ban on North Carolina After HB2 ‘Bathroom Bill’ Repeal – NBC News
Advocates for Medicaid Expansion Continue Their Uphill Climb – NC Health News
NC hemp commission considering joining lawsuit against DEA – WLOS
Divided board approves new NC guidelines for reading and writing – N&O
Joel Ford has already raised big money to take on Jennifer Roberts for mayor – Charlotte Observer

The Nexsen Pruet Public Policy team provides attorneys and clients with a newsletter summarizing the week's activities and conveying the inner workings of the legislative process and state government in Raleigh. Please feel free to pass this along to your clients or other interested parties, email to be added to the list.