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NC Legislative Update for May 8, 2015

May 8, 2015

This Week

A relatively uneventful week at the Legislative Building has come to a close. The Senate did not take any votes until Thursday and the House voted on one bill on Wednesday and one on Thursday. House leadership also removed the controversial gun legislation, House Bill 562, from the Appropriations Committee calendar this week. The relaxed pace helped legislators rejuvenate after two grueling, long-hour weeks, but more importantly it allowed the legislative staff to catch up on all of the legislation that was moved ahead of cross-over. The reduced activity also gave House leaders the opportunity to begin closed-door discussions on the budget. But just because it was a slow legislative week, does not mean that there wasn’t big policy news in Raleigh.
Gun bill on hold amid growing opposition – WRAL

Governor McCrory (R) was able to deliver some good fiscal news to the state for a change. Tuesday, the Governor announced that the debt the state owed to the federal government for unemployment claims had been paid off. During the recession, the state authorized borrowing from the federal government to pay for unemployment claims that outpaced the funds reserved to cover them. At its peak, the debt had climbed to $2.75 Billion. The state accelerated the date by which the debt would be paid off by increasing unemployment taxes on businesses and reducing the duration and amount of the benefits. A $1 Billion reserve fund is planned to cover future economic downturns.
NC has paid off unemployment debt – WRAL
Taxes About to Drop Again – Carolina Journal

On Wednesday, Governor McCrory announced that revenue projections for the state showed a $400 Million budget surplus. Republican lawmakers and the Governor attributed the surplus to their 2013 tax reform package, saying the tax cuts helped spur economic growth which led to the surplus. Democrats however, say that the surplus was achieved through higher taxes for individuals and working families. The spin can go either way, but the numbers are a big relief for budget writers, as the revenue projections from the end of last year indicated a $270 Million shortfall.

Revenue projections show NC has $400 million surplus – N&O
North Carolina to end year with surplus – WRAL
More corporate tax cuts likely in NC – N&O
N.C. budget director on surplus: Deficit projection was 'overly conservative' – TBJ

The Joint Legislative Program Evaluation Oversight Committee met on Monday to review the progress of NC GEAR (Government Efficiency and Reform), a program set up by Gov. McCrory’s administration to save money in state government. After the presentation, Co-Chairs Sen. Hartsell (R-Cabarrus) and Rep. Horn (R-Union) along with Committee members, were unimpressed and had hoped that the would be more substantive recommendations for reforms.
Panel sour on McCrory’s efficiency plan – N&O

The Council of State, which is made up of all of the state officials that are elected statewide, voted unanimously to sell the 308-acre Dorothea Dix property for $52 Million to the City of Raleigh on Tuesday morning. The legislature announced last week that it would not pursue legislation to block the sale as they have done in the past, indicating either their satisfaction with the deal or their desire to relieve themselves of what has been a 13-year headache. The sale means that the NC Department of Health & Human Services, which is currently located on the Dix campus, will pay rent for up to 10 years to the city until they are able to relocate their operations.
DHHS looking for new home – WRAL

Legislation in the news:
NC speaker prefers holding bond votes in early 2016 – Record & Landmark
NC House panel OKs debt option to pay catastrophic claims – WRAL
'Second Chance' laws sought – WRAL
Recycling foes stall bill – WRAL
Bill would expand DNA collection from felony suspects – WRAL

Budget Season

Speaker Moore (R-Cleveland) announced a timeframe for the House budget now that the state revenue forecast is in. Every session the legislature crafts a 2-year, biennial budget, which they adjust in the short session to reflect the second year’s revenues. Republicans took control of the legislature in in the middle of the economic downturn and were forced to make cuts in state spending in order to balance the budget, which is constitutionally required. This biennium, Republican budget writers be crafting the state's spending plan with a surplus.

Governor McCrory has previously highlighted that he would like to see another increase to teacher pay and more funding for the court system. Governor McCrory, Speaker Moore and Sen. Berger (R-Rockingham) have all indicated that they would like to double the state’s rainy day fund. State law mandates that surplus funds must either be put away in savings or used for one-time spending.

Speaker Moore said that he would like to see the initial House proposal finished by May 18th with votes on May 20th and 21st. Budget chairs were in Raleigh all throughout the week, but they were rarely seen as they conferred behind closed doors to grind out the details of what will become the House budget. Once the initial budget is prepared, there will be a number of amendments offered by members of both the majority and minority parties to the spending plan. If history is any indication, a very short time period will be available to make modifications after the initial budget is released and seldom are significant changes made.
NC House budget due week of May 18, speaker says – N&O
Revenue surplus colors NC House budget talks – N&O

Regulatory Reform Act of 2015

House Bill 760, this year’s perennial regulatory reform legislation, received approval on the House floor Wednesday by a bipartisan vote of 77-32. The bill, which is 39 pages long, contains a number of changes to business, government and environmental regulations. Some of the provisions include:

• Permitting venues with more than 3,000 permanent seats to cook and serve meat, poultry and fish from a pushcart
• Excluding volunteers and officers of certain nonprofit corporations and associations from being defined as an employee under the Workers’ Compensation Act
• Releasing counties from having to approve inspections of components or elements of buildings that have been certified with a signed written document by either a licensed architect or a licensed engineer
• Prohibiting wildlife officers from inspecting weapons or equipment of hunters or anglers without reasonable suspicion of a violation

The provision that has received the most attention is a change to the Renewable Energy Portfolio Standards (REPS) that was made last week. The provision places a permanent cap at the current level of 6% on the REPS requirement, which is the percentage of renewable energy that an electric utility must use. The change effectively cuts the scheduled cap in half as opposed to repealing it entirely which was initially proposed. The bill now awaits action in the Senate.
Renewable-energy advocates take beating in N.C. House vote; opponents say bill will save customers money – CBJ
House OKs freeze on renewable energy goals – N&O

In Other News

• The NC Supreme Court announced that it is expediting the hearing for the redistricting case which was sent back for further review by the U.S. Supreme Court. The Court will begin hearing arguments in August. Read more from WECT.
• State Auditor Beth Wood (D) announced Monday that she will seek a third term and run for reelection. The State Auditor is the state’s top watchdog for government spending. Read more from WWAY here.

In the News

Council of State Update – Politics NC

NC Chamber backs legislature in fight with McCrory – WRAL

North Carolina tourists spent record $21.3 billion in 2014 – WRAL

Carolinas regulators clear first permits for oil surveys – WWAY

N.C. trade deficit ticks up in March – TBJ

Lassiter joins calls for N.C. legislature to pass incentives bill – Charlotte Observer

Software firms agree to keep Internet sweepstakes games out of North Carolina – CBJ

Congressional inaction on transportation funding could stall Triangle-area projects – TBJ


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