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NC Legislative Update: February 10, 2017

February 10, 2017

This Week

Following a lawsuit by Gov. Roy Cooper (D), a law passed in one of last year’s December special sessions creating the Bipartisan State Board of Elections & Ethics Enforcement (BSBEEE) was put on hold. The legislation consolidated the powers and duties of the State Board of Elections and the State Board of Ethics, as well as the oversight of lobbyists, which has been housed under the authority of the Secretary of State. Legislative leaders appealed, and yesterday, the NC Court of Appeals put a temporary stay on the lower court’s injunction, effectively reinstating the law at least in the short term. Attorneys for the Governor have asked the NC Supreme Court to uphold the lower court’s injunction while the case is pending, noting that once merging the Boards into BSBEEE has begun, it will be difficult to undo. 
NC Court of Appeals temporarily reinstates legislature’s election law changes – N&O 
NC appeals court temporarily reinstates new elections law – WSOC 
Partisan struggle with NC Governor back in court – WWAY

After a slow start, several House Committees began their work this week and bills continued to be steadily filed. In total 86 bills were filed this week, with 47 in the house and 39 in the Senate, bringing the total number of bills filed so far this session to 156. The House Committees on Finance, Appropriations, Education – K-12, Education – Universities, Transportation, and Health met to at least have their introductory meetings and several began hearing bills. A link to next week’s 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.

The House Education Committee on Universities, met to discuss House Bill 39, entitled Amend Appointments/UNC Bd of Governors, which reduces the number of members on the UNC System Board of Governors. The Board, which currently has 32 members, would be reduced to 24 members under the proposed law, with 8 specified seats dissolving after the expiration of their terms. The bill, which is the first bill to pass out of either chamber, passed 108-4. The legislature appoints the membership of the UNC Board of Governors. The bill awaits action in the Senate. 
House ignores plea for diversity, OKs slimmed-down UNC board – WRAL

The House Education Committee on K-12 began working on House Bill 13, entitled Class Size Requirement Changes, sponsored by Rep. Chuck McGrady (R-Henderson). The bill allows the maximum class size for kindergarten through third grade to increase by three students. After the bill passed that Committee, it was heard in House Appropriations, where it received a favorable report. House Bill 7, entitled LRC/Strengthen Savings Reserve, sponsored by Senior Appropriations Chairman Rep. Nelson Dollar (R-Wake) was also heard and passed in Appropriations. The bill mandates that the General Assembly continue to strengthen the State’s “rainy day fund”. Both bills will likely receive floor votes next week. 
Legislators want to require themselves to put money in savings – N&O 
NC bill easing class-size limits in early grades considered – WNCN

The Senate however had only one Committee scheduled this week. The Commerce & Insurance Committee had prepared to begin the confirmation process for former Rep. Larry Hall to be the next Secretary of the Department of Military & Veterans Affairs (DMVA). However, Rep. Hall did not attend the meeting, as there is a pending legal challenge to the new law that requires Senate confirmation of Cabinet Secretaries. The order in which Cabinet Secretaries were to be confirmed last week, seemed to indicate that the confirmations were loosely organized from least to most controversial. 
Preview of Cabinet confirmation hearings as standoff intensifies – N&O 
Judges block North Carolina law limiting governor's powers – AP 
N.C. Chamber supports two Cabinet secretaries – N&O 
NC Senate reacts to court ruling on plan for Cabinet confirmation hearings – N&O

Rep. Pat Hurley (R-Randolph) filed legislation, House Bill 71, to increase the per diem for lawmakers from $104 to $164 and the mileage reimbursement from 28 cents per miles to 57.5 cents, updating the payments to mirror federal reimbursement rules. A legislator’s salary in North Carolina is just under $14,000 for the entire year with an additional $559 per month expense allowance. The law would not be in effect until the next General Assembly convenes in 2019. Per diem and mileage reimbursements compensate lawmakers only during session and for official business during the interim. Previous attempts over the last two decades to raise legislative compensation have failed to even receive a vote. 
North Carolina legislators want to pay themselves more – N&O

Other legislation filed and worth noting include:

  • House Bill 35 entitled Protect North Carolina Workers Act, sponsored by Rep. George Cleveland (R-Onslow) which would increase the number of employers who must participate in the federal E-verify program by reducing the threshold for mandatory participation in the program from 25 employees to 5 employees. The bill excludes farm workers and independent contractors from the definition of employee.
  • House Bill 48 entitled Legislator-Lobbyist Reform Act, sponsored by Rep. Scott Stone (R-Mecklenburg), which would extend the “cooling off period” or the time a legislator must refrain from registering as a lobbyist from six months to one year following their leaving office.
  • House Bill 54 entitled Protect the Hardworking Taxpayers Act, sponsored by Rep. Kelly Hastings (R-Gaston), which would eliminate the recently installed $20,000 cap on the mortgage interest deduction;
  • House Bill 61 entitled Small Business Income Tax Relief, sponsored by Rep. Kyle Hall (R-Stokes), which would reinstate the recently eliminated tax exemption on the first $50,000 of net business income a taxpayer receives during the taxable year if the taxpayer is a small business. In the case of a married couple filing a joint return where both spouses receive or incur net business income, the maximum dollar amounts apply separately to each spouse's net business income, not to exceed a total of $100,000.
  • Senate Bill 42 entitled Reduce Cost & Reg. Burden/Hosp. Construction, filed by Sen. Ralph Hise (R-Mitchell), which would direct the Medical Care Commission to replace the current Hospital Facilities Rules and adopt the recommendations of the American Society of Healthcare Engineering’s Facility Guidelines Institute.
  • Senate Bill 70 entitled RLSC Study Sales Tax Exemption: Nonprofits, sponsored by Sen. Don Davis (D-Greene) which would study replacing, with an exemption, the requirement for tax-exempt nonprofit corporations from paying and seeking a refund for the sales tax on taxable sales.

Legislation in the News: 

Rep. Szoka, Sen. Meredith file bill to bring fast internet to rural areas – Fayetteville Observer 
Folwell vows to attack unfunded pension, health liabilities – Carolina Journal 
Surgeons don’t want optometrists laser-cutting eyes – N&O 
Power to the people: Bills call for states’ convention to amend Constitution – Wilson Times 
Should driving with an animal in your lap be illegal? NC legislator files bill – N&O 
NC House bill would penalize immigration sanctuary cities – N&O 
New NC bill would allow people to carry gun without permit, training – WSOC 
Longer wait period proposed for lawmakers-turned-lobbyists – N&O 
NC lawmakers reintroduce ‘Allison’s Law’ at General Assembly – WNCN

Budget Surplus

The House and Senate Appropriations Committees will meet jointly on Tuesday to hear the most up-to-date revenue figures ahead of crafting the State budget. Projections indicate the State will collect $22.6 Billion in revenues, a $552 Million surplus when the 2016-17 fiscal year ends on June 30th. A report released by the nonpartisan Fiscal Research Division of the General Assembly, also projects that revenue collections for the coming 2017-18 fiscal year will bring in an additional $500 Billion and that the 2018-19 fiscal year will generate and an additional $1 Billion more than that. 
Legislative leaders tout half-billion-dollar state surplus – Carolina Journal 
Legislative leaders hail budget surplus – WRAL


News Monday that the NCAA would pull all championship events in North Carolina through 2022 if HB2, “the bathroom bill”, is not rescinded in the next two to three weeks made waves on social media in the beginning of the week. Legislative leaders however appear to be unreceptive following legislative Democrats’ rejection of the proposed compromise to repeal the controversial legislation in December. Republicans in the NCGA blame Gov. Cooper for quashing the December repeal legislation by pressuring legislative Democrats not to compromise and support nothing but a full repeal of HB2. Two bills have been filed in the House to repeal the law under different terms, but both were file by the minority and are unlikely to gain traction. 
HB2 could soon cost NC six years of NCAA championship events, sports group says – N&O 
NC lawmakers introduce new bill to repeal HB2, expand LGBT protections – WNCN

In Other News

Gov. Cooper has endorsed former two-term Insurance Commissioner Wayne Goodwin (D), who lost a tight race in November, to succeed Patsy Keever as Chair the NC Democratic Party. 
Cooper backs Goodwin for N Carolina Democrats' chairman – AP

The former Secretary of the NC Department of Environmental Quality (DEQ) under former Gov. McCrory, Don van der Vaart, is reportedly in the running to land the number two position at the federal Environmental Protection Agency (EPA) under the Trump administration. Rumors have floated since the election that van der Vaart was being considered. 
Report: Former DEQ head in running for No. 2 EPA job – N&O

Former Gov. Pat McCrory will be part of a panel on NBC’s “Meet the Press” this Sunday morning with Chuck Todd at 10:00AM. 
Pat McCrory takes a turn as TV pundit, will join ‘Meet The Press’ roundtable – N&O

In the News

Here’s how much Gov. Roy Cooper’s Cabinet and top aides will earn – N&O
Freshman NC House members bring experience to tackle state's big issues – NSJ
Causey puts customer service at top of Insurance Department agenda – Carolina Journal
4 NC Towns In Top 20 Nationally For Opioid Abuse, Study – WCNC
NC business leaders urge increased NC Pre-K enrollment – N&O
NC Senate leadership used 2015 law to raise $2.2 million through unlimited donations – N&O
Stein makes key hires in his justice department – N&O
NC voters accused of voter fraud file defamation lawsuit – N&O
Director named for UNC’s NC Policy Collaboratory – N&O
Former US Sen. Hagan faces long, complex road to recovery after encephalitis – N&O
Two Democrats announce for Foxx's Fifth District – Winston-Salem Journal

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.