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NC Legislative Update for June 26, 2015

June 29, 2015

This Week

This week at the General Assembly was relatively dull compared to the last few weeks. The House Finance Committee used two meetings, Tuesday and Thursday, to review and discuss the tax package portion of the Senate budget. The discussion will continue next week with another meeting scheduled on Tuesday. The only positive comments from the Committee pertained to the shift to single sales factor method of corporate taxation, the rest of the plan was not received well.

Tuesday’s discussion concentrated on the sales tax redistribution, the corporate tax changes, and new services affected by the sales tax, including advertising, repair, and veterinary services. On Thursday the committee examined the impact that capping the sales tax refund and the charitable deduction would have on hospitals, nonprofits, private universities, churches, etc. Although the policies that were discussed are very serious, several members of the Committee used levity to express their frustrations with several references to Karl Marx, his manifesto, and a Christmas break.
NC Senate sales tax shift compared to Communist Manifesto in House – N&O
NC Senate tax plan pits rural against urban – Citizen-Times
Hospitals, colleges lobby against Senate tax proposals– N&O

The House voted unanimously on Tuesday not to concur on the Senate budget. The next step for the budget is a Conference Committee, which has yet to be appointed. The conferees will use the coming weeks to create a spending plan which both chambers can agree. Speaker Moore (R-Cleveland), and other House leaders, said the House is willing to stay as long as it takes to resolve the budget differences. Conservatively, members are predicting adjournment around Labor Day. June 30th is the last day of the State’s fiscal year. Lawmakers need to pass a Continuing Resolution for next year’s budget to keep the government open until a new budget is enacted. The House and the Senate even failed to agree on a Continuing Resolution on Thursday so they will reconvene next week and attempt to reach an agreement on the Continuing Resolution. Apparently one problem was the Senate’s insistence on eliminating teaching assistants.
Lawmakers negotiating temporary NC spending measure – WRAL
NC budget talks likely difficult with Senate’s big plan– Citizen-Times
House member, McCrory hope to block sales-tax redistribution – WSOC
Budget differences could lead to long legislative summer – WRAL
Sunday Dome: Major incentives still need to be settled in NC budget – N&O

Senators approved a Conference Report to House Bill 640, sponsored by Rep. Dixon (R-Duplin) also known as the Sunday hunting bill. The House approved the compromise last week that permits hunters in all but two Counties, Wake and Mecklenburg, to hunt on Sundays, except between the hours of 9:30AM-12:30PM, when worship services generally take place. There are several other restrictions in the bill, including no hunting within 500 yards of a place of worship. The bill also prohibits the hunting of migratory birds and deer hunting with dogs on Sundays. Bow hunting is already allowed on Sundays. The bill now goes to the Governor.
Lawmakers lift ban on Sunday hunting and send bill to McCrory – N&O

Governor McCrory (R) joined several leaders in Southern States in calling for the removal of the Confederate flag from various governmental displays. More specifically, he called for legislation to end the DMV’s issuance of a license plate bearing the Confederate battle flag. There is question as to the Governor’s authority to end the issuance without legislative action due to a lawsuit years ago regarding the same issue. The Governor claims he needs legislation to ban the license plates. The Senate says he can do it without additional legislation. To date nothing has happened.
NC sorting out how to end Confederate flag tags– WRAL

Legislation in the News:
McCrory signs ‘biscuit bill,’ 11 others – N&O
Future NC employees would not receive retirement health care under Senate budget – N&O
NCGA Considers Year-Round Community College Funding – Carolina Journal
Lawsuit over voter ID stalls after legislative changes – WRAL
NC lawmakers approve insurance mandate on moped owners – WNCN
Four more companies urge N.C. lawmakers to avoid changes to renewable-energy standard – CBJ

Medicaid Reform

The House passed House Bill 372, its version of Medicaid Reform on Tuesday in a strong bipartisan vote, 105-6 with all six no votes coming from Republicans. The bill, sponsored by Rep. Dollar (R-Wake) and Rep. Lambeth (R-Forsyth), centers around Provider-led Entities (PLE’s) that would manage the State’s Medicaid population. The proposal is very similar to the House plan from last year that would have used Accountable Care Organizations (ACO’s). In the proposed system, provider and hospital networks would form these entities and would be responsible for controlling cost and assuming the risk in a capitated system. The plan would phase in over five years but excludes mental health, pharmacy and dental altogether. Supporters of the bill include the North Carolina Hospital Association, N.C. Medical Society, and DHHS under Gov. Pat McCrory. The bill is not likely to receive a warm reception in the Senate.
House OKs Medicaid bill – N&O

The Senate initiative on Medicaid Reform, led by Sen. Hise (R-Mitchell), would establish three statewide plans to manage the State’s Medicaid population with a mix of both private Managed Care Organizations (MCO’s) or PLE’s. It would also divide the State into six regions which could have up to two additional regional PLE’s. This plan contains an aggressive timeline for reaching full-capitation by August 1, 2017. Additionally, it would remove Medicaid from DHHS and establishing a new cabinet-level, independently appointed Health Benefits Authority to oversee the program. This plan is to be a whole-person approach with no exceptions. Senate leaders announced earlier that they would not adjourn session sine die until a solution had been reached for controlling Medicaid costs. However, none of these proposals can go into effect until approved by the Federal government.

In Other News

  • Former U.S. Sen. Kay Hagan (D), who was defeated last fall by now Sen. Thom Tillis, (R) announced that she would not challenge incumbent Sen. Richard Burr (R) in 2016. Hagan was considered the best option to unseat Burr who is seeking his third term in the Senate. Her withdrawal leaves a void for the Democratic contender with a dwindling field of high-tier candidates. NC Treasurer Janet Cowell (D) said that she intends to seek reelection. Also U.S. Transportation Secretary and former Charlotte Mayor, Anthony Foxx (D) assured Sen. Burr, who supported his nomination for Transportation Secretary, he would not to challenge him. However, it is possible, he could change his mind. Read more in the N&O here.
  • WRAL went “On the Record” over the weekend with state government reporters to analyze the content and the process of the Senate budget and how it differs from the House budget. You can watch the program here.
  • House Rules Chairman Rep. Lewis (R-Harnett), the House author of the 2013 Voter I.D. Law, wrote an open letter addressing the changes the two chambers agreed to last week.
  • Former four-term Governor Jim Hunt (D) held a secret forum Wednesday to discuss the future for policy in North Carolina. Read more in the N&O here.
  • Speculations are rising on who may replace Revenue Secretary Lyons Gray after the NCGA confirms his appointment to the Utilities Commission.

In the News

NC Lawmakers React To SCOTUS Upholding Obamacare – WUNC

Official: Split Teacher Tenure Should Not Be A Problem – Carolina Journal

Gov. McCrory Doesn’t Want to Pull Existing NC Confederate Flag License Plates – ABC 11

AARP seeks medical deduction return – WRAL

NC legislative staff urge the sale of underused state property – N&O

Report: N.C. is weakest state for labor unions – TBJ

North Carolina, Triangle outpace nation in tourism and travel spending – TBJ

Duke Energy's returns remain above rates allowed by N.C. regulators – CBJ

N.C. Treasury launches $200M program for minority- and women-owned investment firms – TBJ

Supreme Court subsidy ruling could have $414M impact on N.C. hospitals – TBJ

Fishing is free in NC on July 4 – Citizen-Times

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 kcollins@nexsenpruet.com to be added to the list.

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