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NC Legislative Update for July 2, 2015

July 2, 2015

This Week

After some disagreement at the end of last week, lawmakers agreed Tuesday on Senate Bill 534, which is the Continuing Resolution (CR). The CR will keep State government functioning for forty-five more days until August 14th. The State’s fiscal year ended at midnight on Tuesday June 30th and since lawmakers were unable to pass a new budget by that point, a CR is required to keep the basic functions of government operating.

The CR is relatively straightforward, continuing to fund most aspects of government at the same level as the previous year with a few exceptions. Both chambers agreed to raise starting pay for teachers to $35,000 while also adding a little over $100 Million to fund school enrollment growth. The CR does not specifically provide funds for teacher assistants or driver’s education but rather provides spending flexibility to local entities to fund those at their discretion. It also directs the elimination of positions, both vacant and occupied, in state government that were defunded in both budgets. The CR also directed the Department of Health & Human Services (DHHS) to prepare waivers for the Medicaid Reform provisions in both the House and Senate budgets, indicating that both bodies are committed to some type of reform. All cuts will be managed by the Office of State Budget & Management (OSBM).
House, Senate agree on 45-day budget extension – WRAL
House OKs NC govt spending plan while awaiting budget deal – News & Record

As for the status of the actual budget, Governor McCrory (R) sent lawmakers a letter outlining his hopes for a final agreement, the time frame and what it should contain. He asked for a thirty-day window in the CR to encourage lawmakers to move swiftly. Lawmakers were originally discussing a sixty to ninety day window, but eventually agreed on the forty-five day extension. In the correspondence he also asked the legislature to include his bond proposals in the compromise and to remove the economic incentives from the budget and pass them in a separate bill. Most notably, he asked lawmakers to refrain from including the Senate tax changes in the budget, citing the reforms accomplished just two years earlier. He specifically singled out the sales tax redistribution proposal saying that he could not support a budget containing that provision. None of the requests were contained in the CR.
McCrory outlines budget priorities in letter to lawmakers – N&O
McCrory urges lawmakers to act on bond plan, but they aren’t so sure – N&O

Also this week, the House Finance and the Appropriations Committees met to continue their very thorough and very public review of the Senate budget proposal. Neither chamber has appointed budget conferees, something that will likely happen the week after lawmakers return from recess. Christmas decorations have been spotted in various offices as well as the Senate chamber. Members have also been heard whistling Christmas carols walking down the hallway.

The Senate passed House Bill 201, a bill ending the zoning protest petition process. A protest petition is a tool for property owners to challenge the rezoning of adjacent property and require a higher affirmative vote percentage by the local governing body to change the zoning. Advocates for the change argue that current law puts too much power to halt projects in the hands of a few while opponents claim current law levels the playing field in battling large corporations. The House must concur with the changes before the bill can be sent to the Governor which will not happen until after recess.
NC Senate panel votes to kill zoning petition, offer property tax exemption – N&O
Gov. Pat McCrory signals he’d end protest petitions – Charlotte Observer

NC Tracks, the system which DHHS uses in managing its Medicaid payments to providers, is again in hot water. But this time it is not over the functionality of the program, but rather the administration of the contract and substantial cost overruns. Angie Sligh, who was in charge of the implementation of NC Tracks has been accused of nepotism, hiring fifteen or more people, often unqualified, with whom she had personal connections. The office of State Auditor Beth Wood (D) performed an audit off of a tip from a DHHS employee that brought the spending to light. There is over $1.5 Million in question.
Audit finds Medicaid billing supervisor wasted $1.6 million – N&O

Tuesday, the NC Supreme Court heard the Governor McCrory’s lawsuit against the General Assembly over appointments and the separation of powers. The case involved the creation of the Coal Ash Commission, established last year by the NCGA where six of the nine appointees were appointed by the legislature and three by the Governor. Governor McCrory is also joined by former Governors Jim Hunt (D) and Jim Martin (R) in the suit. The result of the case, which will not be decided until later this year, could cause an upheaval in the makeup of state boards and commissions should the Supreme Court rule in favor of the Governor.
Justices hear governor’s lawsuit about power of appointments – N&O
NC justices hear arguments between governors, lawmakers – WNCN
Governor vs. General Assembly: N.C. Supreme Court to hear landmark case – Charlotte Observer

Legislation in the News:
NC legislature votes to take a summer vacation – N&O
N.C. House passes Greensboro council bill on second vote – News & Record
Accusations fly as NC House votes down Greensboro redistricting – N&O
Dramatic legislative turnabout redraws Greensboro council districts – WRAL
Moped registrations, numerous other laws take effect on Wednesday – N&O
Autism insurance coverage nears passage – WRAL
Senate budget calls for repeal of CON, COPA laws – Blue Ridge Now
Push underway in NC to require ignition interlocks for all DWI offenders – Charlotte Observer
Prison leaders hope raises will end lingering officer shortages – WRAL

Regulatory Reform

Regulatory Reform resurfaced on Tuesday as Senate leaders unveiled a Proposed Committee Substitute (PCS) to House Bill 765 which began the day as one-page bill and ended the day as the 54-page, Regulatory Reform Act of 2015. The omnibus bill, carried by Sen. Wade (R-Guilford), contains everything from scaling back environmental regulations to allowing pigeon hunting in North Carolina. Much of the opposition has come from environmental groups over changes to air and water quality standards. Notable provisions in the bill include:

  • Requiring individual groups that are unsuccessful in suing the State over certain environmental impact disputes to pay the State’s legal bills;
  • Instructing the Department of Environment & Natural Resources (DENR) to remove monitors in the air monitoring network not required by the federal government;
  • Changing the regulatory threshold for impacts to isolated wetlands to one acre statewide;
  • Changing the definition of “employee” to exclude volunteers and officers of certain nonprofits;
  • Exempting from civil penalties, businesses that voluntarily report environmental violations with the exception of coal ash sites;
  • Requiring a criminal history check in order to obtain a license to sell manufactured homes;
  • Repealing recycling requirements for discarded computer equipment and televisions
  • Repealing a law that prohibits using profanity on highways;
  • Establishing animal welfare hotline in the Attorney General’s office for citizens to report incidences of animal cruelty;
  • Allowing the hunting of pigeons

DENR had serious concerns with seven provisions of the bill. Sen. Apodaca (R-Henderson) ran a series of amendments on Wednesday to address the DENR’s concerns in exchange for a letter of support for the bill as amended. Several other amendments from Democrats attempted to remove some of the provisions scaling back environmental regulations were defeated. The Senate passed the bill 31-17 and sent it to the House for concurrence, with Sen. Meredith (R-Cumberland) the only member to break rank and vote “no” with the Democrats.
Broad regulatory reform bill clears Senate committee despite outcry – WRAL
Senate Republicans look to change dozens of NC environmental regulations – N&O
Senate OKs environmental overhaul bill after tweaks to get DENR support – WRAL

In Other News

  • A number of new laws and delayed effective dates of previously passed laws took effect on July 1st, a list of which provided by the NCGA staff can be found here. The list includes such recently passed laws as requiring insurance for mopeds and in-state tuition for veterans.
  • Several weeks ago, the Governor signed a new law that would let NC Supreme Court Justices run in retention elections instead of competitive primaries and general elections. Justice Bob Edmunds, a conservative who holds the only seat of the seven members up for election this cycle, announced that he would seek the confirmation of the voters to remain on the State’s highest court. Read more from WXII here.
  • The U.S. Supreme Court Monday told a lower court to revisit its decision on the constitutionality of issuing “choose life” license plates in NC. The issue stems from a license plate bill several years ago where lawmakers included the choose life plate, but rejected amendments to add pro-choice plates. The original decision from the lower court said that having one plate and not the other was a violation of the First Amendment. This is as a result of a recent U.S. Supreme Court case arising from Texas. Read more in the N&O here.
  • As of Wednesday, B.W. Collier is the new Director of the State Bureau of Investigation (SBI). When the legislature moved SBI out of the Attorney General’s office and into the Department of Public Safety (DPS), it gave the Governor power to appoint the SBI Director with legislative confirmation. In order to distance the Director ethically from the Governor, the appointment is for an eight-year term and the Governor cannot remove him from office.

In the News

NC Senate provision could raise bank taxes – N&O

Duke Energy: Group's plan to sell solar power to a Greensboro church is 'unlawful' – CBJ

The GOP has new diversity in NC – N&O

Kill I-77 toll, businesses urge lawmakers – Charlotte Observer

Company involved in I-77 toll lanes eyes early exit from Chicago operation – CBJ

Cultivating a fertile future for N.C. farmers – Winston-Salem Journal

2016 already? Budget spawns campaign talk – N&O

Atlantic Coast Pipeline owners form business coalition to support the $5B project – CBJ

Both sides see little N.C. impact from Supreme Court order on emissions rule – CBJ

Please reach out to TJ Bugbee for any further information or to Susan Latta to request the monitoring of any specific legislation.

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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.  Send an email to to be added to the list.