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NC Legislative Update for July 31, 2015

August 3, 2015

This Week

It has been two weeks since conferees were appointed and the status of the State’s biennial budget remains uncertain. While some informal negotiations have occurred, there has been no indication that lawmakers are close to an agreement. The major obstacles continue to be Medicaid reform and the Senate’s tax plan, which lawmakers previously stated they intend to address both before they negotiate the rest of the budget. The Continuing Resolution (CR) passed last month expires on August 14th. Governor McCrory’s (R) budget director, Lee Roberts, has told state agencies to prepare for a government shutdown as there appears to be no consensus between the House and Senate over an additional CR.
Health debates like Medicaid and CON help delay state budget – TBJ
State agencies asked to prepare for government shutdown – WNCN

Indicating the lack of progress, the House held yet another Appropriations meeting to continue the public vetting of the Senate’s budget proposal in which several House members capitalized on the opportunity to further express their disdain for the Senate plan. Meanwhile, Sen. Rabon (R-Brunswick) held a press conference alongside members of the Senate Transportation Committee Wednesday to again denounce the Governor’s transportation bond proposal. He instead doubled down on the Senate plan for transportation investment which would end the transfer of money from the highway trust fund to the general fund. There was a bright spot however when Sen. Apodaca (R-Henderson) thanked the House Finance Chairs and Health & Human Services Chairs on the floor for having discussions with their Senate counterparts on Medicaid and the tax plan. He did however take the time to point out that House Appropriations Chairs have yet to meet with the Senate Chairs. The House then responded that Senate Majority Leader and chief budget negotiator Sen. Brown (R-Onslow), was out of town all week and unable to negotiate.
State budget talks making little progress – WRAL
As deadline looms, NC House, Senate budget writers haven’t met – N&O
Senate, Governor Spar Over Transportation Bonds – Carolina Journal
TAs a topic as NC budget talks continue – N&O

The official revenues for 2014-15 have been calculated and the State ended its fiscal year with a $445 Million surplus, $45 Million more than previously anticipated. While it is generally a good thing for the State to be in the black on revenues, extra money to spend often creates more hostility than peace in the legislative building. Having a revenue shortfall is much easier for lawmakers to manage than a surplus, because it is easier to say no than yes. With a surplus, the Governor, along with every legislator, agency and special interest has an idea how some or all of the money should be spent, often leading to an extended budget fight like the one we are currently experiencing.
Revenue gives state ‘few extra dollars’ – N&O
McCrory: Budget surplus enough to trigger cuts to corporate tax rate – TBJ

The Senate Monday gave final approval to two controversial bills from last week. House Bill 562, Amend Firearms Laws, makes various changes to gun laws in North Carolina and House Bill 774, the Restoring Proper Justice Act, which would allow executions to resume in the State without a medical doctor present. Both bills drew sharp criticisms from left leaning advocacy groups and praise from several groups on the right. Both bills now await action from the Governor.
Lawmakers pass bill to standardize state gun permit process – WRAL
Senate execution bill keeps drugs, suppliers, process secret – WRAL

Also worth noting, Secretary of Transportation Tony Tata abruptly resigned from the post in the McCrory Cabinet on Tuesday citing personal matters and pursuit of his career as an author. Previously there has been speculation that Sec. Tata was considering a primary bid against Congressman Walter Jones (R) in the 3rd district. However, more recent speculation indicates that the Cary Republican may instead choose to run in a primary against Congresswoman Renee Ellmers (R) in the 2nd Congressional district. In the meantime however, Governor McCrory must find a replacement for Tata. One of the aspirants looking to fill the void is Rep. Jeter (R-Mecklenburg), who expressed interest in the job Wednesday, just hours after Tata’s announcement. As for an interim Secretary, Gov. McCrory has selected Deputy Secretary Nick Tennyson, former Mayor of Durham, who has also expressed an interest in permanently occupying the post.

Tata resigns as DOT secretary – WRAL
Jockeying begins to replace Tata – N&O

Legislation in the News: 
Senate OKs bills on human trafficking, medical examiner training – WRAL
NC Hospitals Want To Change The Way You Pay Them – WFMY
'Revenge porn' bill advances, but may change – WRAL
Value of public schools: The great divide in North Carolina GOP? – Charlotte Observer
NC private investigators could be banned from using GPS tracking – N&O
Bill prohibiting local livestock rules sent to McCrory – Citizen-Times
House committee shoots down lab choice provision – WRAL
Bill would let city of Raleigh donate police dogs to their handlers – N&O
State Senate Honors Work, Career of Harris Blake – The Pilot

Campaign Finance

Mid-year campaign finance reports were due today. Lawmakers are prohibited from taking Political Action Committee (PAC) checks during session. The House and Senate have been in session since mid-January and thus the vast majority of money raised by each campaign comes from individual donors, with the exception of the two-week period in the beginning of the year.
Money check: NC House leadership – WRAL
Money Check: Senate Leadership – WRAL

Chief Justice Lake

The Marshall Project, a nonprofit, nonpartisan news organization covering America’s criminal justice system, profiled former North Carolina Chief Justice and Nexsen Pruet senior counsel I. Beverly Lake. The profile highlights Chief Justice Lake’s pioneering focus on restoring the public’s confidence in the justice system by creating the Actual Innocence Commission, the first criminal justice reform commission of its kind, which was tasked with reforming the justice system and rewriting rules. The Commission’s work resulted in groundbreaking laws to record interrogations and set standards regulating the handling of DNA evidence as well as establishing The Innocence Commission, the first state-funded panel to review claims of wrongful conviction and imprisonment.
A One-Man Justice Crusade in North Carolina – The Marshall Project

In Other News

• State Rep. Duane Hall (D-Wake) is reportedly exploring a possible U.S. Senate bid against two-term incumbent U.S. Sen. Richard Burr (R). Read more from the N&O here.
• Former State Senator Malcolm Graham (D-Mecklenburg) is rumored to be mounting a rematch in the primary with former colleague, now Congresswoman, Rep. Alma Adams (D-Guilford) in the heavily Democratic 12th Congressional district. Rep. Adams prevailed in a crowded 2014 Democratic primary to replace the longtime Rep. Mel Watt (D-Mecklenburg) who vacated the seat to work in the Obama administration. The district stretched from Charlotte to Greensboro, but geographically should favor a Mecklenburg candidate. Read more here.
• An opinion piece appeared in the News & Observer over the weekend from State Treasurer, Janet Cowell (D) urging lawmakers to pass legislation permitting a venture capital fund. The proposal was included in the House budget and would allow the Treasurer, to invest up to 10% of the State’s unclaimed property fund in small businesses in the private sector as well as startups. Read more here.

In the News

New voices enter debate over state’s complex system allocating health services – Winston-Salem Journal

NC state health plan’s liability is growing – N&O

N.C. One Step Closer to March 15 Presidential Primary – Carolina Journal

Judge delays closing arguments in NC voting rights trial – N&O

Beer industry says it has $3.8B impact on NC economy – WRAL

Road Worrier: NCDOT workers on Senate hit list – N&O

If you own a chicken, North Carolina wants to know – TBJ

NC lottery nets $522 million for state education funding – WWAY

Catawba seeking national brand for N.C. casino project – Charlotte Observer

State finalizes sale of 307-acre Dorothea Dix property for new Raleigh destination park – TBJ

NC salary database was blocked – N&O

Audit: Robeson Schools Misspent $3.16 Million In Medicaid Funds – Carolina Journal

State elections director: 31 cases of alleged voter fraud referred to county prosecutors – Winston-Salem Journal

Commerce chief goes 'Under the Dome' – Star News

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.