Keeping Up With Jones Street

Bumpy Road to Start the Legislative Session

noreply@blogger.com (Anonymous) — Fri, 06 May 2016 15:58:00 +0000

Bumpy Road

Jones Street is like a gravel road right now – BUMPY! Just a month ago, in a rare move, the General Assembly called itself into session for one day to enact House Bill 2 which is now referred to as the “Bathroom Bill”. The new law has generated overwhelming negative press and has hit a nerve down at the Building. Opposition and supporters of the new law are responding loudly and angrily; this will be a tough place to get work done this year.

You can view the text of HB 2 here; the summary prepared by the drafting lawyers here; HB 946 filed this week by House Democrats to repeal House Bill 2 here; and we’re hearing the Senate Republican Caucus may discuss allowing for a statewide referendum on the law. The “sin wagon” has been driving around the block all week. I have never seen more vitriol in my 20 years on Jones Street.

Welcome to the opening week of the 2016 Legislative Short Session. Historically, the short session convenes in even-numbered years to adjust the biennial budget. Lately it’s included a full budget process plus a continuation of the prior year’s session with consideration of substantive bills – a free-for-all.

Midterm Departures

This year we see an unusually high number of midterm departures. Replacement members are selected by a committee of the county political party of the departing member with proportional representation in the case of multiple county districts.

· Sen. Josh Stein resigned to run for Attorney General -> Jay Chaudhuri was selected to complete his term and is on the ballot in November.

· Sen. Dan Soucek resigned to take a job with Novant Health -> Deanna Ballard has been selected to complete his term and is on the ballot in November.

· Rep. Brian Brown resigned to join US Senator Thom Tillis’ staff -> Greg Murphy takes his seat.

· Rep. Bryan Holloway resigned to take a position with the NC School Boards Association -> Kyle Hall takes his seat. That makes 3 Rep. Halls in the House for those of you counting.

· Rep. Ralph Johnson died in office last month -> Chris Sgro takes his seat but will not run in November. Rep. Sgro is the Executive Director of Equality NC and his driving purpose in Raleigh this session will be to overturn HB 2.

· Rep. Jacqueline Schaffer resigned last Friday -> her replacement is Scott Stone.

Governor’s Budget

Although every Governor assembles a careful spending plan for the legislature to consider, the legislature develops and acts on its own budget but usually with a nod or two to the Governor. This week the Governor’s budget which proposes spending $22.3 billion (an increase of 2.8%) was presented to House Appropriations. You can see the document here.

Next Steps on Tax Reform

Republican tax reform architect Sen. Bob Rucho, who is retiring after this term, says this year’s state income tax reform bill will only include provisions to raise the standard deduction. This week the Senate acted on SB 726- Internal Revenue Code Update – which is nearly the same bill as passed last year but includes a provision allowing teachers to deduct up to $250 for out-of-pocket classroom expenses ($1.7 million) and income received as a result of wrongful imprisonment ($20,000). The provision causing controversy requires homeowners with forgiven mortgage debt to pay sales tax on that amount even after a short sale. The Senate also passed SB 729 – Various Changes to the Revenue Laws which includes minor and technical tax law changes. Both bills await House consideration.

Toll Lanes

Two bills were filed this week by Mecklenburg County legislators to halt the controversial project to build toll lanes on Interstate 77 that broke ground late last year. Both HB 950, introduced by Rep. Tricia Cotham, and HB 954, introduced by Rep. Charles Jeter, would cancel the contract with I-77 Mobility Partners, a subsidiary of Cintra. By canceling the contract, the state would be required to pay a penalty that’s estimated to cost up to $300 million.

Opposition to the toll lanes has peaked due to concerns over a 50-year non-compete clause in the contract that makes it difficult for the state to build new free lanes on I-77 and news that Cintra declared bankruptcy over its Texas SH 130 toll road. While several local governments oppose the project, the Charlotte Regional Transportation Planning Organization voted to endorse the project.

If either bill makes it through the House, it’s not clear the Senate will take it up. Senate President Pro Tempore Phil Berger stated last week that he sees no need for significant changes to the contract. Governor McCrory and the Department of Transportation have said they are moving forward with the toll lanes because the Charlotte Regional Transportation Planning Organization asked for them.

State Lottery

The Governor’s Budget proposes spending part of the $62 million in unanticipated lottery ticket sales receipts on his education priorities including spending $5.8 on 300 additional Opportunity Scholarships.

Certificate of Need

House leadership continues to say they won’t consider CON repeal at this time but the Senate is ready to move ahead and we’re hearing they may send a CON repeal or partial repeal to the House with an implementation plan that takes the long view.

We’re starting to see where the trades to wrap-up session this summer will be.

Womble Carlyle Legislative Update - August 7, 2015

noreply@blogger.com (Anonymous) — Fri, 07 Aug 2015 20:15:00 +0000

Angel and Laura worried all week about what we could tell you about in our weekly update, but then yesterday happened. Lo and behold this week has written itself. Silly us!

New Senate Budget Strategy: truce, sort of.

In a conversation with Sen. Apodaca early Wednesday, we learned he had a plan to kick-start the stalled budget negotiations and start to wrap this session up. Sure enough, later that morning the Senate took the first step at ending the budget standoff using the time-tested strategy of…. removing obstacles. At Wednesday’s press conference the Senate announced the following departures from their own budget proposal in order to bring the House to the table:

· Removal of many controversial policy provisions that can be passed in stand-alone legislation.

· Take out Medicaid Reform and handle in a separate bill.

· Take out the proposed sales tax redistribution and run separately.

Remember that lawmaking is part policy, part politics and part personality. Hats off to Senate Leadership; they’re on to something here.

Medicaid Progress

The current continuing budget resolution expires on August 14th. Sen. Berger, leader of the Senate, believes they can pass a state budget in time. But Senior House Appropriations Chair Dollar is less confident, saying there is “plenty more work to do.” (Rep. Dollar is the main drafter of the House Medicaid Reform plan – one of the big obstacles to passing a budget. The new Senate Medicaid Reform Plan makes several compromises, and passed the Senate Health Care Committee the day after the Senate announced its new strategy.

The House-passed Medicaid Reform plan bill was gutted and the new Senate language was substituted. Now, HB 372 – Medicaid Transformation/HIE/Primary Care/Funds – does several things that the House bill didn’t do, including changing the operational structure for the Medicaid program and allowing private commercial insurance companies to participate alongside provider-led entities. The plan would create a new independent agency, the Department of Medicaid, which would oversee the transition to full-risk capitated plans and become the single state agency responsible for Medicaid. The new department would be a cabinet-level agency with a secretary appointed by the governor but requiring confirmation by the legislature.

The plan also calls for three state-wide contracts that would likely go to commercial insurers, and up to twelve regional contracts for provider-led entities. The inclusion of private commercial insurers in the plan is a sticking point between the two chambers. We think that issue will be decided by but, yet again, it seems that neither side is willing to budge on that issue.

The Senate Appropriations Committee will vote on the bill Monday afternoon, then it will be considered by the full Senate on Monday night. We expect the House to not concur with the Senate changes, and a conference committee will be appointed to work out the differences.

Economic Development

The Senate’s economic development plan is the new language in HB 117 – NC Competes Act. The bill passed Senate Finance yesterday and has been referred to Appropriations. The proposal includes the phase-in of a single sales factor, the creation of an additional sales tax exemption for datacenter equipment and electricity, and an extension of sales tax breaks for commercial airlines that buy jet fuel in the state -- all things that the House agrees with! But right before everyone started holding hands and singing Kumbaya, the Senate gummed up the moment by adding a provision that provides for the redistribution of the sales tax, which House members and the Governor oppose. (As in “I’ll veto that.”)

Senate Majority Leader Harry Brown, who represents a rural district, has been touting his plan for the redistribution of the sales tax but it hasn’t gained much traction in the House or among legislators representing populous and destination counties. Under current law, there is a 2% local sales tax that is divided among the counties. For every sales tax dollar currently raised, 75 cents stays in the county where a purchase is made, and 25 cents is distributed to counties across the state based on their population. The current plan was enacted in 2007 as part of the “hold harmless” provisions included in the state’s Medicaid Swap. However, Sen. Brown argues that this formula puts smaller, more rural counties at a disadvantage because so much money is spent in large counties with big shopping areas. Originally he proposed a formula that would distribute 80 cents of a sales tax dollar to counties based on population and 20 cents based on sale location. But after the Governor threatened to veto any bill containing his plan, Brown compromised to a 50-50 split for sales tax distribution, with 50 cents being distributed based on population and 50 cents based on sale location. A breakdown by legislative staff showed that 80 counties would gain money under the plan, while 20 counties would lose money. Senator Jeff Tarte from Mecklenburg County wasn’t comfortable with the plan, even with the 50-50 split, pointing out that large counties would have little time to adjust to newly created holes in their budgets.

Loser counties: Avery, Brunswick, Buncombe, Cabarrus, Carteret, Catawba, Currituck, Dare, Durham, Forsyth, Guilford, Iredell, Jackson, Macon, Mecklenburg, Moore, New Hanover, Surrey, Wake, Watauga.

Representative Bill Brawley, a House Finance Chair from Mecklenburg County, said that he will fight the change to the distribution formula. And that veto threat is out there. The bill will be considered by the Senate Appropriations Committee and then by the full Senate on Monday night.

Silver Anniversary

This is Laura’s shout out to Rep. Mickey Michaux. This week marks the 50^th anniversary of Voting Rights Act. For those of us born in the late 1960’s the Civil Rights movement was important recent history in our southern state, but we learned it in school. It wasn’t until I occasionally joined Rep. Mickey Michaux for breakfast at the Legislative Building that the history came to life. Michaux and his family lived the struggle that we study in school and are entertained by at the movies; he marched at Selma. He has fought and won, and fought and lost. He was discriminated against in obvious and subtle ways that defied my imagination, and made him who he is today. That’s why he became a lawyer, a US Attorney, and a legislator – in fact, the longest serving legislator currently in office. At 85 he’s not ready to quit. Most of us will never walk a mile in his shoes. Whatever your position on the Voting Rights Act and whether it’s still relevant today, or the current pending litigation, you have to admire this man even if you don’t agree with him. The folks we lobby who don’t agree with him, respect him. You can read more about The Voting Rights Act and NC’s pending litigation in the NYT Sunday Magazine.

Constitutional Amendments: TABOR

The Senate is considering three new Constitutional Amendments. The Taxpayer Bill of Rights, commonly called TABOR, would limit the growth of the state budget to the growth of the economy plus population growth. It also provides a new maximum state income tax rate of 5% -- halving the current maximum rate of 10%. And it establishes a Rainy Day Fund that can only be accessed by a 2/3 vote of the House and Senate thereby skirting the Governor’s Budget Emergency powers. SB 607 is calendared for full Senate consideration Monday night. The ballot questions would be put to the people on the March 15^th Presidential Primary ballot – which will be separate from our other primary elections held next May.

Remember that in order to place a Constitutional Amendment on the ballot each chamber of the General Assembly must approve the bill containing the amendment language by a 3/5 vote of all members. Then the ballot must receive a majority of votes cast in the election.

ABLE Act

This week HB 556 – Achieving a Better Life Experience Act was ratified. The Governor will sign the bill with much fanfare at the Mansion next Tuesday. This new law conforms with federal law enacted last year allowing families to set up tax protected savings accounts – much like 529 College Savings Accounts – for supporting individuals with disabilities.

Cabinet Change-up

Nick Tennysen, longtime deputy at NC DOT, was named Secretary after the abrupt departure of Tony Tata. And Rick Brajer, former biotech executive, will replace the departing Aldona Wos as Secretary of Health and Human Services later this month.

On Jones Street we’re really all just one big family some of the time

DeleteBloodCancer.org held a donor registration event in the Legislative Building this week in support of Kevin LaCount, a well-liked lobbyist for the State Employees’ Association – not Dana Cope who is under indictment – was diagnosed with acute myeloid leukemia in June. This cancer is treated with a stem cell transplant using donor cells. Kevin’s diagnosis comes after Superior Court Judge Carl Fox was diagnosed with myelodysplastic syndrome – both need bone marrow matches for transplants. We watched as lobbyists, staff, legislators, elected officials, and folks off the street swapped their cheeks to join the registry – Angel did it. If you are matched you will be asked to donate either through a bone marrow donation or through apheresis (which I’ve done). Sometimes something beautiful that transcends politics is happening on Jones Street.

To learn more about joining the bone marrow donor registry click here.

July 17th, 2015 Womble Legislative Update

noreply@blogger.com (Anonymous) — Fri, 17 Jul 2015 19:41:00 +0000

In Limbo

You may recall that the General Assembly did not enact a new budget in time for the fiscal year that began July 1^st. Instead, a continuing resolution was passed that keeps spending static until its expiration of August 14^th. When August 14^th gets here we will either have a state budget in place (not likely), have a state government shut-down (not likely but scary just the same), or another continuing resolution that punts the budget deadline farther into the future (where I’m placing my bet). Governor McCrory has taken two steps to interject that pique our interest:

Governor McCrory addressed the House Republican Caucus then the Senate Republican Caucus on Thursday to urge getting the budget unstuck. House Republicans say the governor urged support for his highway and infrastructure bonds, as well as his ideas about Medicaid Reform. He urged the House to hold the line on tax reform. The Senators didn’t share what went on in their caucus but we know the governor and the House agenda are fairly closely aligned.
State Budget Director Lee Roberts is querying agencies to determine which functions are critical for “health, safety and well-being” and must continue even if there is a state government shut-down. Although a shut-down is unlikely, there is not a clear catalogue of which functions are vital and which are not.

Budget Conferees Appointed

One month after the Senate passed its version of the budget, the House and Senate have appointed conferees to the conference committee which will develop a compromise agreement. When choosing members for the conference committee, it seems that there were many worthy choices. The House appointed 82 conferees (more than two-thirds of the House membership), which includes almost every member who voted for the House budget except for Speaker Tim Moore and includes 19 Democrats. Speaker Moore said they will divide the budget work into subject areas such as health and education.

The Senate followed suit two days later and appointed 32 conferees consisting of the entire Senate Republican Caucus except for Senate President Pro Tempore Phil Berger and Senator Bob Rucho – the only Senate Republican to vote against the budget. No Democrats made the cut.

The grand total of budget conferees comes to 114 – two-thirds of the full General Assembly.

To compare, the total number of conferees last session was 43: 27 from the House and 16 from the Senate.

The conference committee will now have a month to develop a compromise before the current continuing resolution expires on August 14. No word on when conferees will officially begin meeting.

Eliminating Protest Petitions

HB 201 – Zoning Changes/Citizen Input , which eliminates the use of the protest petition, has been approved by the legislature and was presented to the governor for his signature this week. Protest petitions, used by residents to force three-fourths votes rather than simple majorities by city councils on controversial proposed rezoning proposals, have been used by neighbors to slow down new developments or business construction near existing homes and businesses. Supporters of the bill deemed this process “archaic” during discussions and argued that the petitions make it too easy for a small group of landowners to block progress on a development project. The bill replaces protest petitions with a process for concerned residents to submit written comments to the clerk of the board, who would forward them to council members if they are received at least two days before the rezoning vote.

Confederate Monuments

SB 22 – Historic Artifact Management and Patriotism Act – was reviewed and received a favorable report in the House Committee on Homeland Security, Military, and Veterans Affairs this week. It would bar state or local authorities from permanently removing an object on public land that “commemorates an event, person or military service that is part of North Carolina’s history.” Removing such an object would require an act by the General Assembly to be approved by the governor. The bill was introduced in the Senate in February – months before last month’s shootings in Charleston – and is intended to protect historical monuments from “knee-jerk reactions.”

House leadership attempted to add the bill to Wednesday’s calendar for a vote by the full House, but decided to push it until next week after objections by House Minority Leader Larry Hall and other Democrats. It’s now on the calendar for Monday night.

Auto Emissions Inspections on the chopping block. Sort of.

In 2002, NC enacted legislation to mandate annual auto emissions inspections in 48 counties – mostly urban counties and their adjacent neighbors but some rural counties that registered high NOx and SOx readings. The testing combined with targeted emissions reductions from coal-fired power plants (the Clean Smokestacks Act) and emissions reductions from industry smokestacks were a balanced attempt to balance the cost and responsibility for improving air quality in NC in accordance with the federal Clean Air Act. Since then new cars are running cleaner and the emissions test has few failures leading lawmakers to question whether it’s worth the cost and hassle to drivers. HB 169 – Limit Motor Vehicle Emissions Inspections repeals the annual emissions inspection requirement for all but Alamance, Buncombe, Cabarrus, Cumberland, Davidson, Durham, Forsyth, Gaston, Guilford, Iredell, Johnston, Lincoln, Mecklenburg, Orange, Pitt, Randolph, Rowan, Union and Wake Counties, but does not eliminate the annual safety inspection which is part of that same service. The bill passed a House Committee and we expected a full House floor debate this week…. until the service station owners, who perform these inspections, weighed in on their capital costs to provide the state-mandated service. We’re waiting to see how the business interests get resolved. The bill has been calendared for House consideration Monday; if the bill passes the House, it will need Senate approval and the governor’s signature. It would not go into effect until the EPA approves an amendment to NC’s state implementation plan.

DWI

SB 619 – Grey’s Law would enact tougher measures against drunk driving, including a proposal to require ignition interlocks for everyone convicted of DWI. These are devices that are connected to ignition systems and require a driver to blow into a tube before starting the car to ensure that the driver’s blood alcohol limit is below the set threshold. Current law requires an ignition interlock in certain circumstances, including drunk drivers convicted of repeat offenses, drivers who refuse to submit to a blood-alcohol breath test, or drivers who blow at or over .15. Over 11,000 drivers in North Carolina currently have interlock systems in their vehicles as a result. It is estimated that an additional 19,000 drivers would be added by this bill.

While some Senators argued that the scope of the bill is too wide, others argued that stricter interlock proposals would keep drunk drivers off the roads and reduce the number of alcohol-related accidents. Senator Josh Stein, one of the bill’s sponsors, argued that interlock systems cut recidivism rates by 50% and pointed out that 26 other states require interlocks after all DWI convictions.

The bill was up for discussion only this week. The next meeting of the committee has not yet been scheduled.

Up Next Week: We’ve heard the House will not have recorded votes toward the end of the week so members can attend the American Legislative Exchange Council meeting in San Diego.

July 2, 2015 Womble Legislative Update

noreply@blogger.com (Anonymous) — Thu, 09 Jul 2015 15:31:00 +0000

Premature Fireworks on Jones Street

We know it’s only July 2^nd, but thanks to the fight over Greensboro City Council Redistricting we have fireworks! On the eve of the Legislative Summer Recess a carefully crafted conference committee report was rejected by the House with some of those members calling senators “bullies” much to the delight of the media. House Republicans retreated to caucus for arm-twisting.

And you thought the only danger from sharks was at the beaches….

Greensboro Legislative Mischief

A bill filed in March reducing the membership of the Trinity City Council (population 6,650) from eight members to five members, and reducing the terms for Mayor and City Council members from four years to two years if approved by referendum took on a new life when Sen. Trudy Wade added a new section to the bill in the Senate Redistricting Committee, quadrupling the size of the bill, that redistricts the Greensboro City Council. The House rejected the Senate changes and a compromise bill emerged from a conference committee this week. The conference report for HB 263 – City Elections/Trinity and Greensboro increases the Greensboro City Council from seven to eight members with none elected city-wide, and the mayor may only cast a vote to break a tie. The legislature drew the eight districts splitting precinct blocks and deviating from the ideal district numbers triggering the gerrymander claim. The conference report also assigns to the General Assembly the task of redistricting of the Greensboro City Council after the 2020 census – a job they left to the City Council in the past. Greensboro Rep John Blust, a conferee, refused to sign the conference report because it did not include a city-wide referendum on the changes, which he and others advocated for.

The conference report was placed on the calendar in both the House and the Senate for Thursday’s session. The House failed to garner the necessary votes to support the compromise voting 50 to 53 on the first go-round; and Rep. Glazier’s clincher motion was rejected by the Speaker. (A clincher motion is a redundancy that kills something dead). Rep. John Blust of Greensboro stated on the House floor that senators were threatening to kill House Bills as retribution.

House Republicans retreated to a quick caucus meeting where arm twisting managed to change seven votes and the conference report was then messily adopted by the House. Procedurally, a member who voted on the prevailing side, in this case voted against the conference report, made a motion to “reconsider the vote by which the report failed”. That motion passed and the conference report was back before the House for consideration. Next came a motion to forgo debate, which passed along party lines. Ultimately the conference report was adopted by the House by a vote of 57 to 46.

Bills dealing with redistricting and terms of office become law upon ratification and do not require the Governor’s signature.

Summer Recess

The General Assembly goes on summer vacation until 7:00 pm on Monday, July 13th according SR 717 which was ratified today. Our State Constitution provides that, while in session, “The two houses may jointly adjourn to any future day or other place. Either house may, of its own motion, adjourn for a period not in excess of three days.” In this instance the first sentence applies, and they adjourn for 10 days. Interestingly, state law prohibits fundraising from PACs associated with lobbyists and from lobbyist principals unless or until the General Assembly has adjourned for more than ten days. A missed opportunity?

Uber won’t be uber-regulated

SB 541 – Regulate Transportation Network Companies – passed the Senate Transportation Committee this week and heads to the Senate Finance Committee. The bill sets regulations for the currently unregulated ride-sharing industry, like Uber and Lyft, by requiring these companies to conduct criminal background checks on drivers and requiring drivers to be covered by at least $1 million in liability insurance when driving for the company. Taxi drivers have been asking the state to begin regulating the new industry –their competition. Uber officials say that they already comply with the provisions in the bill and are supportive of the bill moving forward. **We learned that some auto insurance policies have covenants that void a personal auto policy if the car is used for livery. This has been a rude awakening for some parents of college-age secret Uber drivers.

Regulatory Reform

The Senate has put together a wide-ranging regulatory reform bill designed to loosen regulations on businesses. HB 765 – Regulatory Reform Act of 2015 – was originally a House bill dealing with gravel and rock transport, but is now a 54-page list of regulatory changes that Senate Republicans insist are necessary for a healthy economy in North Carolina. The Department of Environment and Natural Resources objected to some of the bill’s provisions and submitted a letter of its demands in exchange for removing its objection. The Senate approve a wide-ranging omnibus amendment that appeased the department and then approved the bill.

Just a reminder that the state government did not shut down at the June 30^th end of the fiscal year.A continuing resolution was enacted to continue government spending until August 14^th by which time a budget agreement may be reached, or more likely another continuing resolution is adopted.

Next Week

We’re expecting a quiet week on Jones Street with the legislature in recess. But the clock is ticking on the budget continuing resolution. We’ll keep you posted.

June 26, 2015 Womble Legislative Update

noreply@blogger.com (Anonymous) — Thu, 09 Jul 2015 15:27:00 +0000

The budget gridlock rumors on Jones Street are real. A decorated Christmas tree arrived in the Senate chamber this week to emphasize how far apart the two chambers are on next year’s spending plan. Next year starts on Wednesday. Speaking of next year, in the absence of a new budget the legislature must pass a “continuing resolution” to keep state government running or face a government shutdown. We don’t know exactly what was going on behind the closed doors of the caucuses, but the General Assembly adjourned until Monday with no plan in place. Early next week will be a pressure cooker.

Keeping the Government Running

Because the final budget won’t be in place by the end of the fiscal year (June 30), the General Assembly must pass a continuing resolution that will keep the government running until a compromise budget bill can be worked out. On Thursday, the House and Senate both took a recess after completing their calendars in hopes that a continuing resolution could be voted on and passed before legislators went home for the weekend. After extending the recess several times, both chambers adjourned for the day without taking anything else up. Leaders from both chambers weren’t able to agree on a few things, including:

Teacher assistant funding- While the House budget plan leaves teacher assistant funding levels unchanged, the Senate budget cuts about 5,000 teacher assistant positions. This point of contention is being addressed in the continuing resolution because school districts will need to begin making personnel decisions before the school year starts in August.
Driver’s education- While the House budget plan leaves driver’s education funding intact, the Senate budget eliminates the limit on the fees a local school board can currently charge a student for driver’s education for the 2015-2016 school year, moves driver’s education to community colleges in 2016-2017, and eliminates the requirement that students take driver’s education.
The length of time the continuing resolution would cover- While House leaders would like for the expiration date to be somewhere around the end of September, Senate leaders want an earlier date. House leaders are predicting that budget negotiations could last several months, but Senate leaders have dismissed that idea.

Leadership from both chambers are hoping to have an agreement by early next week.

Reforming Medicaid

HB 372 – 2015 Medicaid Modernization – passed the House this week and was sent to the Senate. Instead of being welcomed with open arms, the bill was sent directly to the Senate Ways & Means Committee, aka “The graveyard of the Senate.” The Senate sends bill to that committee as a statement. In this case, the Senate has included their much more dramatic Medicaid reform proposal in their budget and will continue to push for it during budget negotiations.

The House plan:

Medicaid would remain within the Department of Health and Human Services
Provider-led entities would be the only organizations allowed to operate health plans
Full capitation would be phased in over five years
Supported by the Department of Health and Human Services, the North Carolina Hospital Association, and the NC Medical Society

The Senate plan:

Medicaid would be removed from the Department of Health and Human Services and would be overseen by a new Health Benefits Authority which would be run by an appointed board
The board would contract with three private healthcare management providers who would serve Medicaid patients state-wide
The state would be divided into six regions and offer contracts to two local provider-led organizations in each region
Full capitation would be phased in over two years

A Blue Law Topples

A conference report for HB 640 – Outdoor Heritage Act – has been adopted by the House and Senate, toppling one of the remaining blue laws in NC which prohibited Sunday hunting with a gun; it awaits ratification and the Governor’s signature. The bill would allow hunting on Sundays with guns on private lands with permission of the owner, without dogs, and not between the traditional church-going hours of 9:30 am – 12:30 pm. There is no hours restriction on private hunting preserves. No Sunday hunting in Wake or Mecklenburg counties (they meet the 700,000 population threshold). The three hour no hunting period was a nod to the conservative religious movement that seeks to keep the congregation in church on Sundays whether they hunt or not. The conference report received bipartisan support from urban and rural legislators.

Greensboro City Council

SB 36 – Greensboro City Council Changes – is a bill that we told you about back in March. Introduced by Senator Trudy Wade, the bill makes changes to the Greensboro City Council by shrinking it from nine members to seven, making the mayor a non-voting member in most cases, and extend member terms from two years to four years. Although it passed through the Senate easily, it was met with resistance in the House. The Guilford County House delegation (with the exception of Rep. John Faircloth) has banded together and come out against the bill or insisted on adding a referendum which would allow Greensboro residents to vote on the changes. As a result, they garnered the votes to add a referendum to the bill. However, seeing that her bill was meeting resistance, Senator Wade added the language to a House bill that was being heard in the Senate. HB 263 – City Elections/Trinity – was originally a non-controversial bill that only applied to the City Council in Trinity. It passed the Senate and has been sent back to the House for concurrence with the new title “City Elections/Trinity and Greensboro.”

The original bill sponsor, Representative Pat Hurley, is urging her fellow House members to concur with the changes made by the Senate in order to save her original bill. It was placed on the calendar twice this week, but not voted on because it didn’t have the votes. It has now been placed on Monday’s calendar. It’s anyone’s guess as to whether it will actually be voted on.

June 19, 2015 Womble Legislative Update

noreply@blogger.com (Anonymous) — Thu, 09 Jul 2015 15:24:00 +0000

A contentious week on Jones Street ends on a sad note. As the General Assembly takes up (or doesn’t) issues relating to abortion, economic incentives, access to guns, access to healthcare, tax fairness, Medicaid reform and other high stakes issues, the Legislative Building fills with passionate protesters seeking to influence the outcomes. Moral Monday arrests continue – although you can’t guarantee it will be on a Monday – and emotions are running high. Now every legislative office contains a “panic button” that alerts on-site police. Now there are velvet ropes between the public and the 14 foot high brass doors to the legislative chambers. And for the first time we can remember the Fire Marshall is actually enforcing the occupancy limits in those overstuffed, sweltering committee rooms. This week Jones Street had that uneasy feeling.

Guns

The divide in the State House over access to handguns is a deep one. After a number of starts, the House passed a much-softened version of HB 562 – Amend Firearms Laws largely along party lines. A bipartisan coalition successfully amended the bill eight times during a floor debate that lasted hours. Those amendments included rejecting a new provision to end the pistol permit application system run by sheriffs, as well as rejecting a proposal to allow legislators and staff at the General Assembly with concealed carry permits to carry their guns at the General Assembly. Rep. Jeff Collins argued that allowing legislators and staff to carry concealed handguns would serve as a deterrent to those wanting to incite violence in the halls. Rep. Leo Daughtry suggested that the legislature is where issues are decided by debate, “there are some places we don’t need guns.” (whew!) The bill is now in the Senate Rules Committee.

NC Connection to Charleston Tragedy

After a lengthy and emotional week of debate over the gun bill, members cheered when they learned that the suspect in the Charleston church shooting had been apprehended in North Carolina. But word spread quickly that the sister of former state senator Malcolm Graham was one of the nine victims. It was a sad end to the week.

A Blue Law Topples

A conference committee report for HB 640 – Outdoor Heritage Act will allow for lawful Sunday Hunting with a firearm on private property except between the traditional church hours of 9:30-12:30. Hunting on private hunting preserves is exempted from the hours restrictions. The House voted this week to approve the compromise and the Senate vote is expected next Tuesday.

Senate Budget

The Senate released its budget late Monday, reviewed it in three committees on Tuesday, then held floor debate and votes on Wednesday and Thursday. It will now go to conference committee where House and Senate members will work together on a compromise budget. But, don’t start holding your breath just yet, House Budget writer Chuck McGrady was heard to say we will be here until Labor Day.

Here are some of the differences between the House and Senate budgets that will need to be worked out in conference committee:

· House: $22.2 billion (an increase of about 5%)

·         Senate: $21.47 billion (an increase of about 2%)

·         House: Includes the historic preservation tax credit and $40 million a year for film grants
·         Senate: No historic preservation tax credit and $10 million a year for film grants

· House: 2% raises for all teachers and state employees

· Senate: Raise starting teacher salary to $35,000; No across the board state employee raises

· House: $73 million on textbooks and digital curriculum resources

· Senate: $29 on textbooks and digital curriculum resources

· House: 30% increase in DMV fees

· Senate: 20% increase in DMV fees

The Senate plan also included several policy proposals that weren’t in the House budget, including:

· A Medicaid reform plan- see below

· A plan to redistribute the sales taxes from more populous and affluent counties to more rural counties

· A tax plan that will reduce personal and corporate income taxes, reduce tax exemptions for nonprofits and expand the sales tax base

Here are links for the Senate Budget Money Report and accompanying bill language.

Dueling Medicaid Reform

As we had heard, the Senate budget proposal did, in fact, include a Medicaid reform proposal to transition the program to full-risk capitated health plans. In their version, Medicaid would be removed from the Department of Health and Human Services and would be overseen by a new Health Benefits Authority which would be run by an appointed board. The appointed board would contract with three private healthcare management providers who would serve Medicaid patients state-wide. In addition, the state would be divided into six regions and offer contracts to two local provider-led organizations in each region.

Meanwhile, as the Senate’s Medicaid reform proposal was presented in the budget this week, the House was busy getting its own proposal through the committee process. HB 372 – 2015 Medicaid Modernization – received approval in the House Appropriations Committee this week and is scheduled to be voted on by the full House next week. In contrast to the Senate plan, the House plan leaves Medicaid within the Department of Health and Human Services. Provider-led entities would be the only organizations allowed to operate health plans, with full capitation being phased in over five years. This plan has the support of the Department of Health and Human Services, the North Carolina Hospital Association, and the NC Medical Society.

Voter ID

HB 836 was originally filed with the title “Local Government Regulatory Reform.” However, once it got to the Senate, it was given a new title: “Election Modifications.” When a compromise emerged this week, it included provisions for local government regulatory reform AND provisions for election modifications. It ALSO included brand new language softening the Voter ID law passed in 2013 -- currently the subject of state and federal lawsuits.

The new language creates a new exception for presenting photo ID at the polls, allowing a voter to cast a provisional ballot if he or she can’t comply with the photo ID requirement due to a reasonable impediment. Eight reasons can be claimed, including lack of transportation, disability or illness, lost or stolen photo ID, and lack of a birth certificate to obtain a photo ID. The voter must also present identification in the form of a copy of a current utility bill, bank statement, government check, paycheck, other government document, voter registration card, or the last four digits of the voter’s social security number and the voter’s date of birth.

Democrats in both chambers were caught off guard by the change and unhappy with the process, but then voted overwhelmingly with Republicans to approve it given the improvement over current law.

Rep Rick Glazier announces his departure from the NC House

noreply@blogger.com (Anonymous) — Thu, 09 Jul 2015 15:21:00 +0000

The House Losing a Lion

Rep. Rick Glazier announced he will leave the General Assembly at the end of the session after seven terms representing Cumberland County in the House of Representatives. This is no normal retirement. In each term, regardless of the political party in control, Democratic Rep. Glazier has been rated by his peers as one of the most effective legislators. His unmatched careful review of every bill considered by the House, and his willingness and ability to improve even legislation he may not support has earned him the respect of all. When the Speaker recognizes him to debate a bill, everyone perks up and pays attention; he is one of the few who can change the outcome of a vote with his floor debate.

June 12, 2015 Womble Legislative Update

noreply@blogger.com (Anonymous) — Thu, 09 Jul 2015 15:20:00 +0000

The Senate needed a little more time to put the finishing touches on its budget, so we didn’t get to see it this week. We’re now expecting it to be released on Monday and passed by the Senate by the end of the week.

Veto Override

On Thursday, the House overrode the Governor’s veto of SB 2 – Magistrates Recusal for Civil Ceremonies, first approving an often-criticized motion precluding debate before the vote was put to the members. The Governor and House Leadership had been jockeying against one another for members’ support since the May 28^th veto, with a margin so close that both sides were taking constant attendance. The final vote of 69 to 41 was a three vote cushion for the override with notable divergence from a party-line vote. Three Republicans supported the Governor: Rick Catlin of New Hanover County, Leo Daughtry of Johnston County and Paul Tine (former Democrat) of Dare County. Three rural Democrats voted with the Republican majority to override: William Brisson of Bladen County, Charles Graham of Robeson County and Ken Waddell of Columbus County – these Democrats had previously supported the bill.

Economic Development

The Senate has at last unveiled its economic development plan which includes lowering personal and corporate income taxes and expansion of the sales tax base. The Senate stripped the language from the economic development bill backed by the House and Governor and inserted new language for its plan, which was presented to the Senate Commerce Committee on Wednesday. No votes have been taken yet.

Some highlights of the plan include:

Reduction of corporate income tax rate to 4% effective January 1, 2016; 3% effective January 1, 2017
Repeals the privilege tax on banks
Phase-in of single sales factor over three years
Reduction of the franchise tax rate to $1.00 per $1,000, effective in 2017
Reduction of personal income tax rate to 5.5% in 2016
Expansion of sales tax base to include repair/maintenance services, pet car/veterinary services, and advertising services
Phase-down of the nonprofit sales tax refund
New formula for local sales tax distribution to give more to rural counties
Cap on total local sales tax rate at 2.5%

A final economic development bill will result from a compromise between the House and Senate on the competing plans.

The Senate’s proposed committee substitute for HB 117 can be found here: http://www.ncleg.net/documentsites/committees/senate2015-67/06-10-15/PCS%20for%20H117.pdf

A summary of the plan can be found here: http://www.ncleg.net/documentsites/committees/senate2015-67/06-10-15/Summary%20of%20Plan%20Components%20for%20PCS%20H117.pdf

Medicaid Reform

Another issue that the House and Senate have differing plans for is Medicaid reform. While we’ve been hearing that the Senate budget will include a Medicaid reform proposal to allow private managed care companies to compete with provider-led organizations, the House has decided to move its Medicaid reform bill that excludes managed care companies. HB 372 – 2015 Medicaid Modernization – received a favorable report in House Health Committee and now heads to House Appropriations. Supported by the North Carolina Hospital Association, NC Medical Society, and the Department of Health and Human Services, the bill would transition the Medicaid program from fee-for-service to full-risk capitated health plans operated by provider-led entities to manage and coordinate the care over the course of five years. Private managed care companies do not have a role in this framework.

The two chambers were unable to reach a compromise last year on Medicaid reform, but both insist that reform is imperative. This long session might really live up to its name this year!

Residential Design Controls

SB 25 – Zoning/Design & Aesthetic Controls – has been approved by the legislature and sent to the Governor for his signature. The new law will prohibit cities and counties from adopting regulations controlling building design elements for one- and two-family dwellings. This would include:

Exterior building color
Type or style of exterior cladding materials
Style or materials of roof structure or porches
Exterior nonstructural architectural ornamentation
Location and architectural styling of windows or doors
Number, type, and interior layout of rooms

Exceptions include if the dwellings are located in historic districts, where regulation is substantially related to applicable safety codes, and where regulations are a condition of participation in the National Flood Insurance Program.

June 5, 2015 Womble Legislative Update

noreply@blogger.com (Anonymous) — Thu, 09 Jul 2015 15:17:00 +0000

It’s June – the month the legislature logically should be wrapping up along with the state’s fiscal year but we’re nowhere close. There are still big fights ahead on budget, taxes, economic development tools, solar produced energy, and Medicaid. Stay tuned.

Vetoes

This week the House and Senate undertook to override two bills vetoed by the Governor:

HB 405 – Property Protection Act – sometimes referred to as “ag gag” was enacted this week as the House and Senate both voted with the required supermajorities to override the Governor’s Veto. The new law goes into effect January 1, 2016 as prescribed in the bill. Proponents of the bill argue that it strengthens protections for trade secrets. Opponents argue it will have a chilling effect on whistleblowers.

SB 2 – Magistrates Recusal for Civil Ceremonies – was overridden by the Senate early in the week but the House has not yet acted. The original House vote for the bill (on May 28^th) was 67-43 with 10 members not voting. If all House members were present and voting they would require 72 votes to override the Governor’s Veto. But our experience has been that a vote to override a veto and a vote for a bill are not the same thing so the support does not always correlate. In this case we hear the numbers are very close in the House and currently favor the Governor, but any member’s absence changes the whole equation. So the Governor and the Speaker are both lobbying members and urging good attendance. In a situation like this we expect the Speaker to continue to list the bill on the calendar until the right combination of members are in the chamber and then hold the vote. That’s right, we think it’s just a matter of time.

The Right to Bear Arms

Another controversial bill making its way through the House is HB 462 – Amend Firearm Laws – which makes some changes to current law such as removing some misdemeanors from the list of convictions that prohibit a person from obtaining a concealed handgun permit, having most misdemeanor convictions count against a person for only three years for purposes of obtaining a concealed handgun permit; stalking convictions would count for 5 years; domestic violence convictions and assault on a law enforcement officer would permanently prohibit obtaining a concealed handgun permit. The bill would repeal the pistol purchase permit effective 2021, and bill includes several other provisions. A version of the bill was examined and passed by a House Judiciary Committee in early April, and it has bounced around various committees ever since. Wednesday the latest version of the bill was considered by the House Rules Committee (which is usually a slam-dunk spot for approval) but the motion to give the new version of the bill a favorable report passed only when the Chairman voted to break the tie. The bill is calendared for full House consideration on Monday and we expect a fight. Don’t bring a knife to a gun fight. Don’t shoot the messenger.

Still Curbing Voter Fraud

HB 100 – Record Excusals from Jury Duty – heads to a second Senate Committee. The Senate is considering a bill the House passed last week that requires excusals from jury duty be recorded and reported to the State Board of Elections since many of the reasons a person isn’t eligible for jury duty (i.e. felony conviction) would also prohibit that person from legally voting in NC. This voting rights bill is moving through the General Assembly with very little controversy but plenty of interest.

Environmental Protection

HB 795 – SEPA Reform – bill differences between the House and Senate versions were resolved and a conference report has been adopted. It awaits ratification and the Governor’s signature. Environmentalists are asking the Governor to veto the bill which would increase the thresholds for when the State Environmental Policy Act applies and increase the number of exemptions for the Act. No word yet on what the Governor plans to do with the bill.

Abortion Wait Times

HB 465 – Women and Children’s Protection Act of 2015 – gained final legislative approval this week and was sent to the Governor who announced that he would sign the bill into law. Pro Choice advocates argue this violates a campaign promise made by McCrory in 2012 that he wouldn’t sign any further restrictions on abortion into law.

The bill extends the waiting period for an abortion in NC from 24 hours to 72 hours and contains a new provision that requires doctors who perform abortions after the 16^th week to send ultrasounds, measurements, and other information to the NC Department of Health and Human Services so that the state can ensure no abortions are being illegally performed after 20 weeks. Several bipartisan provisions were added that would increase the safety of women and children, including one to clarify who can be charged with statutory rape or sexual offenses.

ABC Law Changes

HB 909 – ABC Omnibus Legislation – was also sent to the Governor’s desk this week. The bill makes changes to ABC laws in the state, including banning powdered alcohol and allowing restaurants to fill take-home growlers with wine. One controversial provision would allow distilleries to sell containers of their own liquor to distillery visitors which would mark the first time in North Carolina since Prohibition that bottles of liquor would be sold by any entity other than via an ABC store. While there was plenty of disagreement about that one provision, bill proponents argued that it would be good for the industry and that job creation would follow the growth.

Retention Elections

HB 222 – Retention Elections/Supreme Court – received concurrence approval in the House and now awaits ratification and the Governor’s signature.

Up Next Week

In the House: guns and a veto override on the House floor; state legislation implementing new federal law called The ABLE Act in committee.

In the Senate: budget and tax cuts for economic development.

May 29, 2015 Legislative Update

noreply@blogger.com (Anonymous) — Thu, 09 Jul 2015 15:14:00 +0000

Vetoes

Within 24 hours, Governor McCrory has vetoed two bills sent to his desk by the General Assembly. Both bills will now go back to the legislature for each chamber to consider whether they will attempt to override the veto. A veto override requires the support of three-fifths of the members present and voting in both chambers.

SB 2 – Magistrates Recusal for Civil Ceremonies – would allow magistrates to refuse to perform marriages without fear of being fired by citing a “sincerely held religious objection.” Once their objection is submitted in writing, they would be barred from performing any marriage for six months or until they removed their objection. The bill also applies to registers of deeds who issue marriage certificates. While the Senate has the support to override the veto, the House passed the bill by a vote of 67-43, which is barely above the three-fifths threshold; the veto override will start in the Senate. Also a factor, ten House members were absent and didn’t vote. This bill arose from magistrates being required to perform gay marriages.

HB 405 – Property Protection Act – is commonly referred to by opponents as the “ag-gag” bill because they believe the bill is specifically intended to prevent undercover investigations of farms and agriculture facilities. The bill allows employers to sue employees who use their positions to gain access to documents or to secretly record areas that aren’t open to the public. McCrory explained, “I am concerned that subjecting these employees to potential civil penalties will create an environment that discourages them from reporting illegal activities.” The bill easily cleared the three-fifths threshold in both the House and Senate when it was initially passed but a veto override effort will begin in the House. The Governor’s office was flooded with calls to veto this bill, and the First Lady has made puppy mill legislation her top priority.

Retention Elections

HB 222 – Retention Elections/Supreme Court – was approved by the Senate on Thursday. The bill calls for retention elections—where a “yes” or “no” vote would be given instead of an election between opponents— for sitting members of the NC Supreme Court, reasoning that it would cut down on the high costs of judicial campaigns if sitting judges didn’t have to run against opponents. It would also prevent sitting judges from having to raise campaign money from individuals who might appear before them in court. The original House version of the bill also applied to the state Court of Appeals, but the Senate removed that provision.

Senate Democrats were suspicious of the timing for this bill, noting that retention elections would begin in 2016 when only one member of the Supreme Court, Justice Bob Edmunds, a Republican, faces re-election. Senator Josh Stein called it “the Justice Bob Edmunds Protection Act” since it would begin in 2016 when Edmunds is up. However, Senate Republicans argued that having only one sitting judge up for re-election makes for a great opportunity to test out the new type of election.

The bill will now go back to the concurrence in the Senate changes.

Abortion Law

HB 465 – Women and Children’s Protection Act of 2015 – gained initial approval in the Senate on Thursday and will receive a final vote on Monday. The bill extends the waiting period for an abortion in NC from 24 hours to 72 hours and contains a new provision that requires doctors who perform abortions during weeks 19 and 20 to send ultrasounds, measurements, and other information to the NC Department of Health and Human Services so that the state can ensure no abortions are being performed after 16 weeks. The Senate also added in several bipartisan provisions aimed at the safety of women and children, including two provisions that were introduced in bill-form earlier this session by Senator Jeff Jackson which would strengthen laws for statutory rape and sex offenders. This resulted in complaints from Democrats and calls to divide the bill and vote separately on the issues. However, the bill was voted on in its entirety by a vote of 31-15.

Once the bill receives its expected final Senate approval on Monday, it will be sent back to the House for approval. We haven’t yet heard if the House will accept the changes.

Senate Budget Underway

Senate appropriations subcommittees met all week to review the House budget. Senators adopted a schedule for approving its version of the budget on June 11. This would leave two full legislative weeks for a conference committee to develop a compromise budget and for the compromise to be approved by both chambers on June 30, which is the final day of the fiscal year.

While the House budget increased spending by about 6%, Senate leaders have said that they will limit any budget growth to 3%.

Womble Carlyle Legislative Update for the week of May 18th

noreply@blogger.com (Anonymous) — Fri, 22 May 2015 19:24:00 +0000

House Budget

It was a week of herding cats for the House Leadership as they worked their budget through caucus, subcommittees, caucus, committee, caucus, then caucus again, caucus again, and caucus yet again, then an emergency trip to the Rules Committee to assuage the objections to the increased DMV fees, and then to the House floor. But the House budget passed with strong bi-partisan support; final reading took place in the wee hours of this morning.

The House Appropriations Committee met Tuesday to consider over 120 amendments. Last night and this morning the full House dispensed with nearly 70 amendments before adopting the final spending package of $22.2 billion with strong bi-partisan support and sending it to the Senate.

The House spending plan raises new money with increased DMV fees of nearly 50 percent which caused an uproar among Republicans and Democrats. Ultimately the fee increase will only be 30 percent and those funds will augment road-building and maintenance, upgrade the state ports, ferry vessel repair and replacement. North Carolinians will see their annual vehicle registration fee go from $28 to $36.50 (not including county property taxes that are collected at the same time) and an 8-year driver’s license fee would increase from $32 to $41.60.

In a few hours you’ll be able to read the House Budget Money Report here and the accompanying bill language here.

The Senate plans to work all of next week voting on their version.

Program Evaluation Projects

A decade ago the General Assembly created the Joint Legislative Program Evaluation Oversight Committee to evaluate programs the state is funding to make smart decisions regarding future funding. The Committee is made up of members from the House and Senate who are given the responsibility of examining whether public services are delivered effectively. Each year they adopt a work plan for their staff. Here’s what they’ll look at this year:

· Funding Formulas for K-12 Public Schools and Feasibility of Student-Based Funding

· Community Colleges Funding Formula

· Performance of Privatized State Government Functions

· Effectiveness of Economic Development Tiers

· Effectiveness of Medicaid Program Integrity

· Feasibility of Consolidating State Purchase of Health Care Services

· School Calendar Flexibility

· Performance of Medicaid Data Warehouse

· Management of Layers and Span of Control for State Agency Executive Offices

· Management of Inmate Health Care

· Professional Educator Licensure Process and Teacher Education Requirements

· Analysis of North Carolina Lottery Commission Operations

· Implementation of Results First in NC

· Review of DOT’s Ferry Division

· Management of State Pension Fund Investments

Click here for the list and descriptions of each project.

“Ag-Gag” Bill

HB 405 – Property Protection Act – has passed the Senate and been sent to the Governor for his signature. The bill allows employers to sue employees who use their positions to gain access to documents or to secretly record areas that aren’t open to the public. Known by opponents as an “ag-gag” bill, they argue that it is specifically intended to prevent undercover investigations of farms and agriculture facilities. Supporters have stated that it protects the rights of property-owners.

Opossum Drop

HB 574 – Opossum Exclusion From Wildlife Laws – has passed the Senate and will be sent to the Governor. Clay’s Corner is Brasstown, NC will once again be able to have a New Year’s Eve opossum drop because opossums will be exempt statewide from protections pertaining to capture and treatment of animals from December 29^th until January 2^nd. Since it’s a state-wide bill, any city would be allowed to participate in opossum drops for New Year’s… Just an observation.

Renewable Energy

In 2007 NC became the first state in the region to adopt a renewable portfolio standard which required utilities to get increasing amounts of the energy it sells from renewable sources such as solar, wind and “green” sources so that by 2021 their portfolios would reach 12.5 percent renewables. The 2007 agreement was the result of much stakeholder input, good faith and substantial compromise all around. In addition to the clean environment benefit, producers of green energy appreciate the market demand created by the law which in turn helps to subsidize the cost of innovation. The argument against renewables is they cost more to produce and are less reliable than traditional energy sources. Rep. Hager’s bill, HB 332 – Energy Policy Amendments, freezes the renewable energy portfolio requirement at its current 6% level and freezes the current cap on annual costs utilities can charge customers at $12 per year -- not even halfway to the mandated levels in the 2007 law but still with years to go. Hager’s reason for the bill is to keep costs low for ratepayers. But advocates are concerned about renewable markets and capital investments into new technologies. The bill passed the Senate Commerce Committee after a lively debate and voice vote and was referred to the Senate Finance Committee. Finance Committee Chairman Rucho declined to allow public comment on the bill at the hearing and he declared that the bill passed by voice vote while members present insist it failed; the chairman declined the motion for “division” which allows a vote by show of hands. The bill is expected to reach the Senate floor early next week although the Finance Committee has not yet released the bill.

Champions Among Us

The state officially lent her voice to the chorus of congratulations to Coach Krzyzewski and the Duke Blue Devils on their 2015 NCAA Basketball Championship title by honoring the team with a Joint Resolution. The coaching staff and players attended the session, made remarks, signed autographs and posed for pictures. Though your Government Relations Team bleeds two shades of blue, we were proud to of the Blue Devils’ enormous feat this year, exciting athleticism and class.

Coach K had something for everyone: he urged the legislators to remember our educators as the real heroes in NC. He then touched the Tar Heels in the crowd by remembering with admiration Coaches Dean Smith and Bill Guthridge who we lost earlier this year. And for you Wake Forest crowd, he told Senate Chaplain (and former Demon Deacon) Peter Milner that it wasn’t about games, it was about championships, and that is humbling and good.

Sometimes it’s okay to secretly admire your adversary; Tuesday was one of those days.

Safely Boarding the School Bus - we're never done.

noreply@blogger.com (Anonymous) — Wed, 29 Apr 2015 19:47:00 +0000

The safety of schoolchildren has been a priority every year at the General Assembly. But several years ago former NC House Speaker Pro Tempore Dale Folwell shone a bright light on the safety of children boarding and disembarking from school buses — his own son Dalton was tragically hit and killed by a car that illegally passed a stopped school bus in Forsyth County in 1999. Pro Tempore Folwell was able to push legislation increasing the penalty for passing a stopped school bus to 5 points on a driver's license, but a punishment isn’t always the best deterrent.

In fact, the best deterrent may be a barrier for the passing car. BL Solutions has developed an new school bus arm that extends from the bus totally across the oncoming lane of traffic. Any oncoming car that runs into the arm will incur lots of collision damage but the arm will fall away from the bus without harming it.

This legislative session House Bill 489 was introduced to require that schoolchildren be trained about the safety of boarding and disembarking from school buses. The legislative “crossover” deadline has arrived without consideration that bill so it’s dead for the biennium but the point has been made and legislators are once again thinking about school bus safety.

It didnt' stop there for Dale Folwell and his wife Synthia, who donated Dalton's organs and have made the awareness of organ donation a priority. Falwell famously set the record for miles travelled in the U.S. by motorcycle one October to raise awareness of organ donation with nearly 33,000 miles travelled.

Check out more about BL Solutions at http://www.wcsr.com/Insights/News/2015/April/Womble-Carlyle-Client-BL-Solutions-Innovation-Drives-School-Safety.

Womble Carlyle Legislative Update - April 24, 2015

noreply@blogger.com (Anonymous) — Fri, 24 Apr 2015 20:02:00 +0000

Crossover is the deadline established by House and Senate Rules by which a House bill must be received by the Senate, and a Senate bill must be received by the House, in order to remain eligible for action for the rest of the biennium. Bills not subject to Crossover are those that contain a fee, tax or appropriation, or a constitutional amendment, local bill or a bill recommended to the 2016 session by a study committee. Thursday, April 30^th is crossover so the volume of work on Jones Street is huge, the atmosphere is chaotic, and the very clever people are getting things done under the radar. Here are the highlights/lowlights:

Abortion Bill

HB 465 – 72 Hours Informed Consent by Person or Phone – passed the House along party lines on Thursday and now goes to the Senate. The bill extends the waiting period for an abortion in NC from 24 hours to 72 hours and contains a new provision that requires doctors who perform abortions during weeks 19 and 20 to send ultrasounds, measurements, and other information to the NC Department of HHS so the state can ensure no abortions are being performed after 20 weeks.

House Republicans took a different political approach with this bill by having only female primary sponsors on the bill and agreeing that no male caucus members would debate the bill on the floor. It was a robust debate of women legislators. The party-line vote included the Speaker, who historically doesn’t cast a vote except in close votes, on memorializing resolutions, and on major tax and budget issues. Also of note was the “no” vote of Rep. Tine (Dare County) who was elected as a Democrat, dropped his party affiliation just before the session convened, and has been caucusing with Republicans this session. We expect this bill to sail through the Senate.

Economic Development

The Senate Finance Committee began discussing HB 117 this week. Sen. Rucho suggested that the committee will develop a new plan from parts of the three bills below. This is the first Senate movement on Economic Development this session.

HB 117 – NC Competes – is the first plan passed by the House and supported by Governor McCrory. It:

·         doubles JDIG money to $45 million
·         extends the sales tax refund for aviation fuel
·         enacts a sales tax exemption for datacenters

SB 526 – Job Creation and Tax Relief Act of 2015 – is the first plan introduced by the Senate. It:

·         proposes a move to a “single sales factor” where a company would be taxed only on what they sell in-state
·         refunds taxes for companies investing at least $1 billion and hiring 2,500 workers
·         reduces the corporate income tax rate from 5% to 4% over the next two years
·         reduces the individual income tax rate from 5.75% to 5.5% over the next two years
·         retools JDIG to benefit rural counties

SB 338 – Economic Development/Tax Modifications – is the second plan introduced by the Senate. It:

·         proposes a move to a “single sales factor”
·         refunds taxes for companies investing at least $1 billion and hiring 2,500 workers
·         reduces the corporate income tax rate from 5% to 3%
·         retools JDIG to benefit rural counties

Failed Legislation

It’s rare for a bill to fail on a vote and there has been a flurry of them recently. Typically a bill sponsor or committee chair will pull a bill if the votes don’t appear to be there. This session we’ve seen some bills go down and we’re wondering if vote counting is a lost art.

HB 344 – Gubernatorial Team Ticket – failed on the House floor this week. It is the proposed constitutional amendment that we told you about last week that, if approved by voters, would require candidates for governor and lieutenant governor to run together on one ticket. It received 60 votes with 58 against it, but fell short of the necessary three-fifths votes needed to get on the ballot. Although bill sponsors argued that it’s important to have a lieutenant governor from the same party as the governor in case something were to happen to the governor, the “if it ain’t broke don’t fix it” argument won out in the end. So, don’t worry, you can still split the top of your ticket.

HB 128 – Referendum for Certain Local Debt – failed in committee this week. It would have allowed residents to force a referendum on proposed spending by local governments for projects costing $5 million or more. Rep. Speciale argued that the bill would protect citizens and give them more of a voice in preventing local tax increases. Rep. Ross reminded the committee that citizens elect their local officials as he made a motion for an unfavorable report. The motion passed easily killing the bill.

HB 761 – Charter School Capital Funds – failed on a motion for a favorable report. It would have allowed for county money for capital needs for schools be shared with charter schools to help with construction and renovation needs, the purchase of property, furniture or equipment for charter schools. The committee chairman ruled the motion to approve failed on a voice vote. After counting hands, the motion failed 12-7.

Health Insurance Mandates

The NC Chamber and the National Federation of Independent Businesses (NFIB) has made opposing health insurance mandates, which can be costly for businesses, one of their top priorities. There are a number of bills moving this session that impact health insurance:

HB 306 – NC Cancer Treatment Fairness – requires health insurers to offer coverage for oral chemotherapy drugs that is at least as good as coverage for IV chemo. The bill sponsor argued in the House Insurance Committee that some chemo drugs are only available in in oral form. The bill received strong support in committee, then passed the House floor by a vote of 104-10. The bill has been sent to the Senate where it died last session. No indication whether the Senate will take up the bill.

SB 676 – Autism Health Insurance Coverage passed the Senate Insurance Committee and will be on the Senate floor next week where it is expected to pass. This bill mandates that health insurance cover treatment therapies for autism. Some advocates believe the bill still needs some tweaks.

HB 528 - Chiropractor Co-Pay Parity is scheduled for consideration by the House Insurance Committee next week. It would require that an insurance plan treat a chiropractic visit the same as a general practitioner visit for purposes of co-pay. The bill does not set the amount of the co-pay so some argue it is not an insurance mandate.

LegalZoom

HB 436 – Unauthorized Practice of Law Changes – passed the House on Monday by a vote of 115-4 and has been sent to the Senate. This bill would allow legal service websites such as LegalZoom to continue offering products in North Carolina only if they meet certain criteria but they will not be allowed to offer legal advice or legal documents based upon questions and answers with a consumer, which are both considered the practice of law and can only be performed by a licensed attorney. Legislators say this version of the bill has the support of the NC Bar.

SEPA

HB 795 – Amend State Environmental Policy Act passed committee and is on Monday’s House Calendar. The bill puts thresholds into law in order to trigger to the need for a SEPA document by requiring the expenditure of public funds or disturbing of public lands to be “substantial” which they define with a dollar trigger of $20 million and disturbed publicly-owned land area threshold of 20 acres. A SEPA document is a comprehensive, time-intensive and costly study of the potential adverse environmental impacts from the projects using public funds or public lands for development, ie a public wastewater plant. Sierra Club and other conservation groups strongly oppose the change. The state Department of Environment and Natural Resources has not taken a formal position on the bill.

Next week will be a zoo on Jones Street. Wish us luck and let us know what your questions are.

April 17, 2015 NC Legislative Update

noreply@blogger.com (Anonymous) — Fri, 17 Apr 2015 18:58:00 +0000

Legislators are back in Raleigh after a week off and it doesn’t look like anything has changed after the extra time they were given to reflect on the session. Just as we’ve seen before:

· There’s a new bill that would allow the opossum to be dropped in Brasstown on New Year’s Eve.

· There’s another economic incentives bill in the House.

· The usual bill to allow hunting on Sundays has been filed.

· There were dogs that had been rescued from puppy mills at the legislature to lobby for the puppy mill bill. (And YES, that was best thing to happen all week!!!! Well, for Angel at least. Laura watched and smiled.)

One thing that we haven’t seen before is the introduction of multiple bills dealing with the prohibition of powdered alcohol. You heard it right. Powdered. Alcohol. There’s just too much to say about that.

Opossum* Drop

There’s a perennial issue out there that offers a good lesson in sausage-making: the Clay’s Corner Opossum Drop. For more than six years, Clay’s Corner in Brasstown, NC has been fighting to maintain its now famous New Year’s Eve tradition of lowering a caged Opossum at the stroke of the new year. PETA and other animal lovers groups have been trying to get it stopped through administrative hearings and Superior Court, but lawmakers have been trying to find a way to let this tradition continue in a limited way. In 2014, a bill was filed to carve out Clay County from NC wildlife laws regarding opossums at year’s end, which many argue is unconstitutional. This year’s attempt is HB 574 which exempts opossums statewide from protections pertaining to capture and treatment of animals from December 29^th until January 2^nd. The effect of that carve out is that New Year’s opossum drops would be legal statewide. The bill got a nod from the House and will be considered by the Senate. It would be in bad taste to say that there’s more than one way to skin a cat.

*”O” or No? Opossum refers to the animals native to North America, while possums are native to New Guinea, Australia and Indonesia. Thank us later when you answer that question correctly in trivia.

Another Incentives Bill

HB 920 – Omnibus Economic Development Improvements – is the latest economic development bill to be introduced in the House. With a bipartisan sponsorship led by Rep. Jason Saine, this bill includes many of the same things as the previous economic development bill that the House sent over to the Senate. But because the Senate is sitting on that bill, the House decided to hit them again. New additions in this bill include:

Historic rehabilitation tax credits
Film grant fund modifications
Credit for manufacturing cigarettes for exportation
Use of North Carolina ports credit
Motorsports sales tax credit

No word yet on what the Senate will do.

Elections Bills

Judicial Elections

HB 8 – Restore Partisan Statewide Judicial Elections – would restore the “D” and “R” beside a judicial candidate’s name on the ballot. A decade ago, judicial elections were made nonpartisan and public funds were made available for judicial campaigns by a Democratic legislative majority. In the last few years, Republicans have eliminated public financing and outside spending has taken its place in judicial elections. This bill would make them partisan elections, requiring primaries in some cases. Bill sponsors argued that providing candidate party affiliation will help voters to make choices based on whether a candidate’s ideology matches their own, thus increasing voter interest in these elections. Opponents don’t believe that partisan politics should be brought into races of judges who should be impartial.

The bill passed the House Elections Committee on Tuesday and got its second nod on the House floor with 3 Republicans and an Independent joining the Democrats in their losing effort. Final House approval is scheduled for Monday, after which it will be sent to the Senate for consideration.

Gubernatorial Elections

HB 344 – Gubernatorial Team Ticket – also passed the House Elections Committee on Tuesday. This bill would change the current method of separately electing the governor and lieutenant governor, instead making them run as a single ticket. Candidates would run separately in the primaries before being teamed up for the general election. The bill sponsor, Rep. Bert Jones, believes that the governor and lieutenant governor should be from the same party and might remember the photo finish between LTG Dan Forest and Democratic candidate Linda Coleman – who has formed her committee to run again. As a practical matter this bill would make it close to impossible for an unaffiliated candidate to run. Look for it on the House floor next week.

LegalZoom

HB 436 – Unauthorized Practice of Law Changes – updates the definition of “practice law” and authorizes the State Bar to challenge an additional list of unlicensed services, including online services like LegalZoom. Online service companies argue that the State Bar is simply trying to protect its turf, but the State Bar argues that there is a legitimate concern for public protection. The bill easily passed the House Judiciary I Committee and will now head to the House floor.

Revenue Forecast

Most North Carolinians filed their taxes this week and have an opinion about the new Republican Tax Plan that is now fully in effect – they are either winners or losers. Detractors from our new tax structure have been awaiting a post-April 15^th notice of a structural budget deficit, but whether the sky is actually falling is not clear. The state budget is drafted, considered and passed by the General Assembly upon the professional advice of its staff economist, who says there will be budget hole of $94 million. However, if you ask the State Budget Officer who answers directly to the Governor and has responsibility for implementing the enacted budget, he’s still suggesting a hole of $271 million. It's rare that they don't agree. There will be a shortfall – and there always is since NC budgets one-time money in addition to recurring revenues from fees and taxes. We’re anxious to see what the “April Surprise” looks like this year since it will determine the tax policy talking points for the 2016 elections. (I know – too soon!)

This leaves the Republicans with the problem providing adequate funding for state and local governments with the natural but problematic solution of raising taxes. A few creative members are now looking at gaming revenue to fill some gaps.

Sweepstakes

HB 938 – Comprehensive Gaming Reform – was introduced by Rep. Harry Warren. This bill would eliminate the State Lottery Commission and replace it with the North Carolina State Gaming Commission with expanded oversight covering ALL gaming in the state, including bingo and the boxing commission. It would also legalize and regulate the operation of sweepstakes establishments with a valid license issued by the Gaming Commission. Just a few ways this bill could generate revenue are through application fees ($250), penalties for operating sweepstakes without a license ($25,000-$100,000), and annual excise taxes on sweepstakes establishments and devices ($2,000 and $1,000 respectively). It also allows counties and cities to impose an annual excise tax of $500 on each sweepstakes device and $1,000 on each sweepstakes establishment. Local governments must distribute at least 3% of these revenues to the county sheriff’s department or the municipal police department of the taxing jurisdiction. The remainder many be used for any public purpose.

HB 922 – Video Sweepstakes Regulation and Taxation – was introduced on the same day by Rep. Chris Malone. This bill also legalizes and regulates the sweepstakes industry and has the same fees and penalties as Warren’s bill. The major difference is that this bill does not create a gaming commission to oversee all forms of gaming in the state.

New NC Business Court tweak in the works

noreply@blogger.com (Anonymous) — Thu, 16 Apr 2015 21:25:00 +0000

A new Senate Bill making a further update to defining a mandatory complex business case for referral to the Business Court was filed and has begun to move. Senate Bill 435 sponsored by Bob Rucho and Tamara Barringer who you may remember from last session's Business Court Modernization have an additional tweak this session. The bill would require that for mandatory designation to the Business Court a tax contestation must involve at least $5,000 in controversy.

The bill was filed last month and referred to the Senate Rules Committee which used to be where bad (and some good) bills went to die, but this session the Rules Committee is also the staging area for all bills that will receive committee action as well, giving the Senate Rules Committee Chairman total power over the flow of legislation in that chamber. The bill is now in the Senate Judiciary 1 Committee and we expect it will receive consideration soon.

We'll keep you posted on any changes, but you can check out the bill here: http://www.ncleg.net/Sessions/2015/Bills/Senate/PDF/S435v1.pdf

April 3, 2015 Legislative Update

noreply@blogger.com (Anonymous) — Fri, 10 Apr 2015 20:09:00 +0000

Spring Break Y’all

For the first time we can recall the House and Senate will take Spring Break next week. The House announced last month it will have Spring Break while the Senate announced it will hold skeletal sessions with no recorded votes. For clarification, both chambers will do the exact same thing by holding a “skeletal session” twice next week in order to meet the constitutional obligation to not recess longer than 3 days while in session. We’ve heard the best place to lobby next week is Augusta.

Rules

This week chaos ensued in the House as it adopted the House Permanent Rules to govern its activities. The Rules determine how the members may participate in making laws and how legislation will flow. The House uses Mason’s Manual of Legislative Procedure as its guide like most state legislative bodies. The Rules are introduced and debated in a Resolution that the House (or Senate) adopts without consideration by the other chamber or interference from the Governor; it uses the committee process and requires approval by a simple majority on the House floor. Once the Rules are approved, suspension of those rules requires a 2/3 vote of the members present and voting. That means, in the House, it takes 61 votes (or a simple majority of those present and voting) to create the Rules and 80 votes (or a 2/3 majority of those present and voting) to rescind or alter the rules. During long House Sessions there is often unanimous support to suspend Rules that prohibit food in the chamber or require men to wear coats on the House floor. More contentious is the suspending of rules regarding adding a bill to that day’s calendar without notice. The Rules also contain all those creative and nontraditional ways to get things done that we’re so fond of.

Speaker Moore prefers more transparency than his predecessor and is seeking to keep substantive lawmaking out of the budget document, and non-germane provisions out of conference reports. A popular change allows a House bill sponsor to remove his name from a bill if the Senate has changed it substantially – or even completely; many very controversial laws are passed attached to the bills of unsupportive sponsors causing these members trouble back home with their constituents. The House Permanent Rules also allow House Members to sponsor 15 bills rather than 10, with a bill introduction deadline of April 14^th rather than yesterday. Just when the we thought we could relax…..

In typical fashion the highly disciplined Senate proposed and adopted the Senate Permanent Rules on January 14^th when the legislature held its organizational session.

Sales Tax Redistribution and Proposed Increases

Two bills have been filed in the Senate to promote the Senate Republican plan of redistributing sales tax revenue to rural counties while taking it from urban ones by focusing on county population rather than point of sale. This is the clearest example we’ve seen of the anticipated rise in fighting between rural and urban North Carolina. After announcing the plan, urban counties got fired up, so the bill sponsors have softened the blow by including provisions to address that concern by allowing urban counties to raise taxes. The House takes a gentler approach.

The Senate approach:

· SB 608—Simple and Fair Formula for Sales Tax Distribution – was filed by Senator Rucho. Because of reaction from urban counties, Rucho has said that he wants a provision that will prevent counties’ revenues from falling below their 2013-2014 levels. To do this he said that the state will need an additional $66 million in revenues. How does the state get more revenue, you ask? More taxes, of course! Senate Republicans are discussing options of expanding the sales tax to services. Examples we’re all familiar with are barbers, lawn services, attorneys…

· SB 369 – Sales Tax Fairness Act – was filed by Senator Brown with 11 other Senate Republicans signing on as sponsors. This bill would address the loss in sales tax revenue from urban counties by allowing counties to raise local sales taxes by a quarter-cent without a voter referendum.

The House approach:

· A bill was also filed in the House to address the lack in revenue for rural counties. HB 518 – County Sales Tax Flexibility – does not redistribute the sales tax revenues. Instead, it allows all counties to raise local sales taxes by a quarter-cent without a referendum in most cases.

Historic Tax Credit

HB 152 – New Historic Preservation Tax Credit passed the House and was sent to the Senate where it was referred to the Ways and Means Committee which rarely meets. Committee Chairman Sen. Apodaca described the committee as a graveyard which offered little hope to supporters of the tax credit. However, House bill sponsor Rep. Ross suggested there are “graveyards” in both chambers. So this is how it’s going to be….

Biosimilars

HB 195 – An Act Amending the North Carolina Pharmacy Practice Act to Allow for the Substitution of an Interchangeable Biological Product overwhelmingly passed the House and goes to the Senate. The bill allows generic alternatives to “biologics” to be dispensed by pharmacists thereby significantly reducing the price of some costly treatments to cancers and autoimmune diseases. The bill was a consensus effort of health insurance plans, pharmaceutical companies and pharmacists – a rare coalition.

Vaccination bill

Last week we told you about the Senate bill that would remove the religious exemption from immunization requirements and the resulting onslaught of angry anti-vaccine parents in the hallways of the General Assembly. Well, it looks as if protesting from the general public actually works… Sponsors of the controversial bill along with Senate Leadership released a statement this week that read, “After hearing serious concerns about stricter vaccine and immunization requirements from our constituents and from citizens across the state, we have decided we will not move forward with Senate Bill 346. The vaccine bill is dead.” We’ve never seen anything like this; the moral of the story: Don’t mess with angry moms.

Wake County Commissioners Redistricted

SB 181 – Wake County Commissioner Districts – was passed by the House after the Senate approved it last month. The bill changes the way Wake County elects its Commission by establishing districts rather than the current county-wide races which resulted in a Democrat sweep last November. The districts will overlay the newly-formed Wake County School Board districts. In addition, two new regional districts will also be created, one representing Raleigh and the other representing Wake County’s rural and suburban areas. No Democratic lawmakers supported the bill in either chamber. Because this is a local bill, it does not require the governor’s signature and becomes law upon Ratification.

March 27, 2015 Legislative Update

noreply@blogger.com (Anonymous) — Fri, 10 Apr 2015 20:08:00 +0000

Many large groups of the general public descended on the General Assembly this week in an attempt to have their voices heard on various issues. One such issue was vaccinations, which resulted in a lot of women walking around with babies strapped to their backs while pushing a stroller with one hand and holding a toddler’s hand with the other. It was actually pretty impressive to see.

There were also a number of groups there to support the medical marijuana bill, with Republicans Against Marijuana Prohibition (RAMP) back for their second week in a row.

The Senate’s bill filing deadline was Thursday of this week. Almost 200 bills were filed on that day, including one that would name the Linville Caverns spider as the state’s official spider. If you want to know more about the Linville Caverns spider, I’d suggest taking a trip to the Linville Caverns because Google isn’t going to give you much information, other than the spider’s confidence level is “confident.” I’m guessing that spider confidence is a good thing, but it’s probably not enough information to make an informed decision on a majorly important issue such as this.

The House filing deadline for public bills is April 8.

However, if your clients have problems after the bill filing deadlines have passed, don’t worry! There are still ways to continue to solve problems after those deadlines, and language can still be added to bills through different means. So, continue to let us know if we can help you with anything!

Medical Marijuana

HB 78 – Enact Medical Cannabis Act – was unanimously voted down on Wednesday in a House Judiciary Committee. The committee opened the floor to public comment and heard passionate pleas from both sides for an hour. After the public had spoken, there was no debate amongst the committee members before they voted for an unfavorable report and killed the bill. However, supporters of the bill weren’t too pleased with Rep. Dean Arp who made the motion for an unfavorable report. As Rep. Arp was leaving the committee room, he was struck in the back by one of the bill proponents who was then quickly pulled back by a very large, ex-football playing lobbyist. Capitol Police then ushered the man away. After being presented with an apology note, Rep. Arp chose not to press charges.

Vaccinations Bill

A bill filed a few weeks ago, which would repeal the religious exemption from vaccinations in NC, will not pass in its current form. Primary sponsor Senator Jeff Tarte told us this week that he thinks Senate leadership would like to see the bill passed, but only after it undergoes some changes. One possible change could be an informed consent provision to replace the religious exemption, which Tarte thinks may be overused by people who are just personally opposed to vaccinations.

Gas Tax Agreement

The House and Senate announced an agreement this week on the plan to temporarily revamp the gas tax in order to avoid a drop in the tax to 30 cents per gallon in July. They estimate that drop would result in a loss of around $400 million in funds towards building and repairing roads. While the current gas tax is 37.5 cents per gallon, the new agreement will cut it and set a floor of 36 cents on April 1, 35 cents on January 1, 2016, then 34 cents on July 1, 2016. This plan will give the legislature time to come up with a new permanent plan of transportation funding that is less volatile, which they’re hoping to do by the end of 2016. The agreement also contains the IRC update provision to help North Carolina’s tax laws match the federal government’s. In addition, the bill makes it to where taxes will be charged on mortgage debt that has been forgiven, treating it as income. The House and Senate will vote on the agreed upon conference report next week, after which it will go to the governor’s desk.

More Economic Development

The House Finance Committee discussed yet another economic development bill this week. However, the discussed bill – HB 89 – is a bill sponsored entirely by Democrats. Nevertheless, Finance Chair Jason Saine told us that they wanted to discuss the bill and its ideas as part of a robust discussion on economic development. The bill will be used as a starting point for a bi-partisan bill which will include historic tax preservation credits, film tax credits, and credits for construction of low-income housing and for users of state-owned ports. This will be the second economic bill filed by the House. Why? Because the Senate hasn’t expressed much interest in taking up the first bill that the House sent over. Maybe the second time’s the charm…

Tax Cuts

SB 526 – Job Creation and Tax Relief Act of 2015 – was filed Thursday by Senate leadership and includes about $1 billion in tax cuts. The bill lowers personal income tax rates from the current 5.75% to 5.625% in 2016, and then to 5.5% in 2017. The corporate income tax rate would also be lowered to 4.5% in 2016, and then to 4% in 2017. The bill also provides for the transition to single sales factor apportionment. House leadership has expressed concern about ending up with a shortfall in state revenue if taxes are lowered too quickly.

March 20, 2015 Legislative Update

noreply@blogger.com (Anonymous) — Fri, 10 Apr 2015 20:07:00 +0000

The General Assembly is in full spring tilt. Next Thursday is the bill introduction deadline for non-money bills and folks are busy pitching their ideas and lining up support.

Spring weather in Raleigh brought with it Ag Day – celebrating North Carolina’s $100 Billion agriculture economy. “Republicans Against Marijuana Prohibition” joined in this year which just confused everyone. Some Republican lawmakers expressed their relief to us when a rain shower caused “RAMP” to roll up its outdoor display and leave.

The spring weather may also have caused the Ethics Commission to address conflicts of interest that may arise from relationships of a private and personal nature between lobbyists and legislators. We expect a hearing on HB 252 in the next week.

UNC Board of Governors elections:

This week the House and Senate elected members to the University of North Carolina Board of Governors. The BOG is the governing body for the constituent institutions of the University of North Carolina.

Senate elected members are:

· John Fennesbresque, a Charlotte attorney

· Lou Bissette, an Asheville attorney

· Frank Grainger, a Cary businessman

· Anna Spangler Nelson, a Charlotte businesswoman

· Tom Goolsby, a Wilmington attorney and former member of the NC Senate

· Temple Sloan IIII, Raleigh, former CEO of General Parts, Inc.

· Michael Williford, a Fayetteville attorney

House elected members are:

· Pearl Burris-Floyd, Dallas, NC, VP of the Greensboro Partnership

· C. Philip Byers, Forest City, businessman

· Walter Davenport, accountant from Raleigh, former member of the Board of Governors

· Joe Thomas Knott III, Raleigh attorney

· John Alex Mitchell, Durham developer

· James Holmes Jr., Raleigh businessman

· David Powers, Winston-Salem businessman (RJR)

· Mary Ann Maxwell, Goldsboro businesswoman

Economic Development:

SB 305 - An Act to Provide Cost Recovery for Acquisition of Joint Municipal Power Agency Ownership Interest in Generating Facilities. This bill is a huge boon for the towns in eastern North Carolina that got together to build their own power plants decades ago which ended up resulting in sky high debt payments causing very high power bills in the region impacting households and the ability to attract industry to the area. The bill allows Duke Energy to purchase the plants for $1.2 billion (of the $1.8 billion outstanding debt) and authorizes a bond to retire the remaining debt. The bill received unanimous support in Senate Commerce Committee and awaits a hearing in the Senate Finance Committee next week.

The Senate on Economic Development:

On Tuesday, Commerce Secretary John Skvarla spoke to members of the Senate Finance Committee urging support of HB 117—NC Competes, Governor McCrory’s economic development plan. It increases the JDIG cap from $22.5 million to $45 million and offers tax breaks for jet fuel and technology data centers. Skvarla and the bill got a cool reception in the Senate with the bill being referred to the Senate Rules Committee (read: parking lot).

Added to the Senate skepticism regarding cash grant incentives is heightened fighting against urban areas on behalf of rural areas (contrary to what new census numbers told us to expect). Historically, 80% of JDIG incentives have been going to Wake and Mecklenburg Counties. Senators argued that rural counties desperately need more employers and that this inequity just intensifies the divide between rural and urban areas.

The Senate responded with their own economic development plan - SB 338 – Economic Development/Tax Modifications. The Governor and Speaker both expressed disappointment of the Senate plan, but with 26 Senate co-sponsors it will be hard to slow it down.

The Senate plan would:

· Reduce the state’s corporate tax rate from 5% to 3% over two years (which would result in about $500 million less in state revenue).

· Limit Wake, Mecklenburg, and Durham Counties to a formula tied to their percentage of the population, which would limit them to no more than about half of the state’s incentive money.

· Shift to single sales factor apportionment, which would calculate companies’ tax liability based entirely on sales instead of factoring in payroll and property value (estimated to cost the state $75 million by Senator Berger’s office and $180 million by the governor’s office).

The Senate also introduced SB 326 – Increase JDIG Program Funding – was introduced by Senator Rick Gunn on the heels of the Senate’s economic development plan. This bill would immediately add $5 million available to the JDIG fund to offer as incentives in the short-term while the legislature debates the broader bill. Senator Berger says to expect it to pass the Senate next week.

Of Interest:

Judicial Retirement Age

HB 205 – An act to increase the mandatory retirement age for judges and justices of the General Court of Justice and for magistrates, and to allow judges, justices, and magistrates to serve until the end of the calendar year in which they attain the age of 75 – passed a House Judiciary Committee on Wednesday. It would increase the mandatory retirement age from 72 to 75 to reflect the fact that people are living longer and healthier lives. Sponsor Rep. Schaffer told the committee that 19 states have no mandatory retirement age. The bill will now go to the House Committee on Pensions and Retirement.

Oral Chemotherapy

HB 306 – An act relating to health benefit plan coverage for orally administered anticancer drugs – was filed Wednesday. The bill seeks to treat oral chemotherapy the same as other forms of chemo for insurance coverage purposes. This ball stalled in the Senate last year with all other bills that included an “insurance mandate”.

If you’re a bill watcher you’ll notice that Senate bills are referred to the Rules Committee when introduced. We’re hearing that committee chairs have to request to have a bill released to their committee for a hearing.

Next Week:

· We expect to see a bill filed on behalf of LegalZoom in NC. We hear lobbyists from the NC Bar are working for compromise legislation, but let us know what you’re hearing.

· A bill will be filed to offer a driving privileges card for illegal aliens as a public safety measure and to require them to purchase auto insurance which they currently cannot.

· There is a fight brewing to increase state revenues with Sweepstakes, Lottery and Video Lottery. The only bill we’ve seen filed is Rep. Stam’s to require the Lottery Commission have the express permission of the General Assembly to expand its gaming offerings. The bill was pulled from a Judiciary Committee calendar last week when the Lottery Commission changed its position on the bill from neutral to opposing.

· House and Senate Page Programs: Bella DeVivo, Broughton High School freshman and my very own kid, will serve as a House Page for our very own Rep. Rob Bryan! If you have a high school student who wants to learn a little about the legislative process, and earn a cool $150, they should apply to the page program.

March 13, 2015 Legislative Update

noreply@blogger.com (Anonymous) — Fri, 10 Apr 2015 20:06:00 +0000

Redistricting Local Bills

SB 181 – Wake County Commissioner Districts and SB 36 – Greensboro City Council Districts, the two bills that remake the governing boards of two large local governments, passed the Senate this week. It was a contentious floor debate between Wake County Republican bill sponsor, Chad Barefoot, and Wake County Democrats, Josh Stein and Dan Blue. While Senator Barefoot told the press that the Wake County delegation had been discussing the bill for months, Senator Stein said it hadn’t been brought up in any of the delegation meetings. Senator Stein also pointed out that the bill is coming right on the heels of Democrats taking over the formerly Republican County Commission. The vote was, not surprisingly, along party lines.

Both bills will now head to the House, where most senior Republicans on the Wake County delegation have hinted at being in favor of the Wake County bill. Wake County Representative Paul Stam has voiced his full support. If approved in the House, the bills will become law. The governor has no veto power over local bills (bills that apply to fewer than 15 counties). To the victor goes the spoils…

State Revenue

The legislature’s Fiscal Research Division released a new estimate of state revenue this week. While last month’s report showed revenues to be below target by $271 million, this month’s estimate puts the general fund revenue at $158.6 million below. The state’s fiscal year ends June 30. The governor’s new Budget Director, Lee Roberts, pointed out that we’ll have a much better view after the April tax season. Stay tuned for the next estimate!

Economic Development

HB 117 – NC Competes Act – the House’s economic development bill came to a stand-still once arriving in the Senate. Senate Rules Chair Tom Apodaca made clear that the Senate would take its time looking at the bill, which is now parked in the Senate Rules Committee. He warned that the bill pushes the limits of what the Senate has decided they can accept when it comes to economic development efforts. Meanwhile, Governor McCrory and Commerce Secretary John Skvarla continue to lobby in favor of the bill, saying it’s essential in order to recruit large companies to the state, including automakers.

Judicial Experience

HB 213 – An act to amend the Constitution to provide that candidates for judgeships must have at least five years’ experience as licensed attorneys – would affect eligibility for election or appointment of justices of the Supreme Court and judges of the Court of Appeals, Superior Court or District Court. The draft legislation promoted by the NC Courts Commission, a group that advises the legislature on the statewide judicial systems’ needs and problems, initially would have permitted candidacy after five years of experience anywhere in the country. However, the amended version, which requires in-state experience, received tentative approval by the commission while legislative staff research whether it conflicts with the US Constitution. The bill will next be assigned to legislative committees in the House.

Longer Terms at the General Assembly?

HB 180 – An act to provide for four-year terms for members of the General Assembly – would allow voters to decide in the next general election (November 2016) whether to amend the NC Constitution to allow members of the General Assembly to serve four-year terms instead of their current two-year terms. The bill would also allow voters to decide whether House Speakers and Senate President Pro Tems should be limited to two consecutive sessions. The bill’s primary sponsors include three Republicans and one Democrat, and co-sponsors include a bipartisan mix of 33 members.

March 6, 2015 Legislative Update

noreply@blogger.com (Anonymous) — Fri, 10 Apr 2015 20:05:00 +0000

In Like a Lion and Out Like a Lamb.

That’s what we’ve always heard about the month of March in North Carolina.

1. In like a lion.

2. Madness.

3. Out like a lamb.

Not many generations ago our lives were ruled by the weather. And so it has been on Jones Street. With winter storms behind us we officially entered “Madness” this week with bill introductions, committee meetings, floor debates, and unhappy people. And there is plenty of basketball still to come.

State of the Judiciary Address

For the first time since 2001, the Chief Justice of the North Carolina Supreme Court delivered a State of the Judiciary address to a joint session of the General Assembly and the Governor. It had been 14 years since the State of the Judiciary Address had been delivered and the first time the Governor attended.

Chief Justice Mark Martin’s address highlighted the fiscal needs of our underfunded court system which handles 3 million cases each year in a state with 9 million people. In 2012 NC ranked 45^th nationally in state per capita spending. He highlighted the need to direct more resources to court reporting and expert witnesses as examples of what the courts need to better serve North Carolina citizens and businesses. A compelling takeaway was that the Judicial Branch, co-equal to the other two branches of government, is funded at just $500 million in a state budget of $22 billion. To put that in perspective, the Wake County Public Schools’ budget is funded at $1.5 billion.

On a positive note, he highlighted the success of the Veterans Treatment Courts which help those who have served make the transition and thrive as civilians while offering particular support for the issues veterans have in our society. He also noted that there is work being done to develop a master plan for instituting e-filing statewide.

Governor McCrory’s newly-released budget recommendation increases court spending by $6 million next year, with $10 million additional in 2016-2017. The final budget for the Judicial Branch will be agreed to by the House and Senate in the budget bill that then requires the Governor’s signature.

You can read Chief Justice Martin’s address here.

Governor’s Budget

Governor McCrory released his budget recommendations this week. Remember that although the governor proposes a budget, his sole constitutional participation in the formation of the budget is to sign or veto a ratified budget bill; it is then his administration’s responsibility to implement the enacted budget. Historically, legislators use the governor’s recommendations as guidance and sometimes political cover for making tough choices. The budget process now underway is for the 2015-2016 and 2016-2017 budget years and would need to be implemented by July 1, 2015 to keep government on track.

In addition to the recommendation to bolster the Judicial branch, some of Governor McCrory’s $21.5 billion budget highlights for 2015-16 are:

· Raising the state’s minimum starting salary for teachers to $35,000 per year

· $99 million over the next year for NC Competes, a plan with incentives for economic development

· Creation of a Department of Military and Veterans Affairs

· Call for a $1.2 to $1.4 billion transportation bond, as well as a $1.2 to $1.4 billion general obligation bond for repairs and renovation of state buildings

· Limiting the amount of state money the University of North Carolina system schools can spend on fundraising to $1 million

· 5% pay raise for 700 state troopers

· $8 million to rescue the ECU School of Medicine

· $4.1 million reduction to the Department of Public Instruction (10%)

· $10 million for a new film and TV production grant program

· Restore the state’s Historic Preservation Tax Credit program

Governor’s Economic Development Quiver Passes the House

HB 117 – NC Competes – overwhelmingly passed the House this week with bipartisan support and heads to the Senate. This is Governor McCrory’s quiver of incentives to lure business to NC (in particular, an auto manufacturing facility). The debate over incentives was similar to every other year’s business recruiting efforts bill so no one even batted an eye at the Stam-Luebke alliance which is strange political bedfellows in every other instance. Opponents of the bill continue to argue that state incentives pit urban areas against rural ones. Of note, we heard little opposition to the adoption of single sales factor apportionment.

Gas Tax Debate

SB 20 – Update the Reference to the Internal Revenue Code, Decouple from Certain Provisions of the Federal Tax Increase Prevention Act of 2014, Modify the Motor Fuels Tax Rate, and Make Certain Reductions Within the Department of Transportation for the 2014-2015 Fiscal Year passed the House this week and will go back to the Senate for a concurrence vote. We are hearing the Senate will not concur and a conference committee will be appointed to settle the differences between the House and Senate-passed versions of the bill. Both bills create a new gas tax floor:

· House floor of $0.36 per gallon and eliminates 40 vacant positions at the Department of Transportation.

· Senate floor of $0.35 per gallon and eliminates 500 vacant and filled Department of Transportation positions.

Gay Marriage

SB 2 – Magistrates Recusal for Civil Ceremonies - A House Judiciary Committee began debating the Senate-passed bill and invited public comment this week. Religious leaders on both sides of the issue commented further obfuscating the issue of religious freedom in a judicial setting. An interesting point made by the NC Association of Registers of Deeds is that 42 of NC’s 100 Register of Deeds offices have three or fewer employees making the refusal to grant a marriage license by one employee a potential hardship for those seeking to tie the knot. That said, the Association did not take a position supporting or opposing the bill. The bill is still in committee for further discussion with a committee vote expected March 11^.

Redistricting Local Bills

SB 181 – Wake County Commissioner Districts - was heard in a raucous Senate Redistricting Committee this week with very little public notice. Senator Barefoot introduced a bill that will add two additional members to the Wake County Commission. It would also align county commission districts with the Wake County School Board Districts which were the subject of bitter partisan bickering on Jones Street a year ago. Some of you may not be aware that the Wake County Commission was swept by Democrats in November, and they did not request this change. No vote was taken on the bill this week. The Wake Legislative Delegation will hold a hearing Monday.

SB 36 – Greensboro City Council Districts - was heard in the same committee meeting. This bill would eliminate at-large seats thereby reducing the size of the Board and take the vote away from the mayor. The sitting council opposed the bill and passed a resolution to that effect. We expect a committee vote this Tuesday.

Feb 27th Legislative Update

noreply@blogger.com (Anonymous) — Fri, 10 Apr 2015 20:02:00 +0000

The news in Raleigh was dominated by snow and ice and skeleton sessions and empty calendars. However there were a few items of interest:

Fee Increases at the Secretary of State’s Office

Secretary of State Elaine Marshall proposed several fee increases to generate funds for additional investigator positions in her office in advance of anticipated enactment of crowdfunding legislation. She proposes increasing the fee to incorporate and LLC from $125 to $150, and increasing the fee to register as a securities salesman from $125 to $135. Increasing these fees is expected to generate $2.68 million per year with $1 million funding twelve investigator positions in her office and $1.68 million in new revenues for the state’s general fund. Legislators from both parties asked her to come back with fee increases that only generate $1 million.

Waiting for the Governor’s Budget

The Governor expects to deliver his budget to the General Assembly next week. The Governor’s Budget is typically received by the General Assembly as mere “recommendations” and bears whatever relevance to the enacted state budget as the legislators give it. The House and Senate budget committees will likely refer to it but not defer to it; they work from their own budget templates.

Gay Marriage

In reaction to the federal court rulings that struck down North Carolina’s ban on same-sex marriage, between winter storms in Raleigh the Senate debated and passed SB 2 – An Act to Allow Magistrates, Assistant Registers of Deeds, and Deputy Registers of Deeds to recuse themselves from performing duties related to marriage ceremonies due to sincerely held religious objection. The bill allows magistrates to refuse to perform marriages without fear of being fired. Current law defines a refusal to discharge a duty such as this as a Class 1 misdemeanor that requires an employee be “removed from office.” While the bill avoids mention of gay marriage specifically, it would allow magistrates to recuse themselves from performing marriages by citing a “sincerely held religious objection.” Once they submit their objection in writing, they would be barred from performing any marriage for six months or until they removed their objection. The bill would also apply to registers of deeds who issue marriage certificates. Bill sponsors insist that this bill is necessary to protect freedom of religion of public servants; opponents warn that passing the bill could result in other public servants refusing to perform their duties – such as performing interracial marriages. A Senator in the Minority warned that if the bill were taken to its extremes, clerks of the Department of Revenue could refuse to process tax returns of same-sex couples or ticket takers at the state-owned zoo could refuse to process family tickets for same-sex couples. Interestingly, two Republicans voted against the bill and two Democrats voted for it. In listening to the legal merits of the debate we pondered as to whether they should appropriated funds to defend legal action against this bill should it become law now or wait for the budget bill. No word on what the House plans to do with the bill. #WWJD

In Like a Lion Legislative Update 2/6/15

noreply@blogger.com (Anonymous) — Fri, 06 Mar 2015 20:58:00 +0000

This week was exhausting for your normally energetic government relations team; we had to be in so many different hearings at once that we had to wear comfortable shoes. Angel and I are excited to take it easy this weekend and enjoy the calming Battle of the Blues - the last real stop before March Madness is officially underway.

Though Angel is a Blue Devil and I’m a Tar Heel, we’ll be back on Jones Street early Monday – even losing an hour’s sleep - working for you.

In Like a Lion and Out Like a Lamb.
That’s what we’ve always heard about the month of March in North Carolina.
1.      In like a lion.
2.      Madness.
3.      Out like a lamb.

State of the Judiciary Address

You can read Chief Justice Martin’s address here.

Governor’s Budget

In addition to the recommendation to bolster the Judicial branch, some of Governor McCrory’s $21.5 billion budget highlights for 2015-16 are:

·         Raising the state’s minimum starting salary for teachers to $35,000 per year
·         $99 million over the next year for NC Competes, a plan with incentives for economic development
·         Creation of a Department of Military and Veterans Affairs
·         Call for a $1.2 to $1.4 billion transportation bond, as well as a $1.2 to $1.4 billion general obligation bond for repairs and renovation of state buildings
·         Limiting the amount of state money the University of North Carolina system schools can spend on fundraising to $1 million
·         5% pay raise for 700 state troopers
·         $8 million to rescue the ECU School of Medicine
·         $4.1 million reduction to the Department of Public Instruction (10%)
·         $10 million for a new film and TV production grant program
·         Restore the state’s Historic Preservation Tax Credit program

Governor’s Economic Development Quiver Passes the House

Gas Tax Debate

Gay Marriage

Redistricting Local Bills

The Sky Was Falling Legislative Update 2/27/15

noreply@blogger.com (Anonymous) — Fri, 06 Mar 2015 20:52:00 +0000

This week in Raleigh the sky was falling! – well it was snowing!

The news in Raleigh was dominated by snow and ice and skeleton sessions and empty calendars. However there were a few items of interest:

Fee Increases at the Secretary of State’s Office

Waiting for the Governor’s Budget

Gay Marriage

in reaction to the federal court rulings that struck down North Carolina’s ban on same-sex marriage, between winter storms in Raleigh the Senate debated and passed SB 2 – An Act to Allow Magistrates, Assistant Registers of Deeds, and Deputy Registers of Deeds to recuse themselves from performing duties related to marriage ceremonies due to sincerely held religious objection. The bill allows magistrates to refuse to perform marriages without fear of being fired. Current law defines a refusal to discharge a duty such as this as a Class 1 misdemeanor that requires an employee be “removed from office.” While the bill avoids mention of gay marriage specifically, it would allow magistrates to recuse themselves from performing marriages by citing a “sincerely held religious objection.” Once they submit their objection in writing, they would be barred from performing any marriage for six months or until they removed their objection. The bill would also apply to registers of deeds who issue marriage certificates. Bill sponsors insist that this bill is necessary to protect freedom of religion of public servants; opponents warn that passing the bill could result in other public servants refusing to perform their duties – such as performing interracial marriages. A Senator in the Minority warned that if the bill were taken to its extremes, clerks of the Department of Revenue could refuse to process tax returns of same-sex couples or ticket takers at the state-owned zoo could refuse to process family tickets for same-sex couples. Interestingly, two Republicans voted against the bill and two Democrats voted for it. In listening to the legal merits of the debate we pondered as to whether they should appropriated funds to defend legal action against this bill should it become law now or wait for the budget bill. No word on what the House plans to do with the bill. #WWJD

Snowmageddon Legislative Update 2/20/15

noreply@blogger.com (Anonymous) — Fri, 06 Mar 2015 20:50:00 +0000

Welcome to the Snowmageddon version of the Legislative Update. What a strange week in Raleigh with cancelled schools, legislative hearings and events. Going by twitter, the only event

at which a legislative quorum was reached this week was the Duke-UNC game; it certainly wasn’t Tuesday’s Senate Session.

We should have just stayed home this week, all of us. #snowday #snOMG

True Story:

Bitter cold winter weather kept legislative activity to a minimum this week: committees were canceled and sessions had no recorded votes, with the following two exceptions:

SB 14 – dealing with the Academic Standards Review Commission, Coal Ash Management Commission, the Health Information Exchange and more, passed the House Appropriations Committee and included four friendly amendments.

SB 15 – Unemployment Insurance Law Changes passed the Senate with just a handful of Democrats dissenting. The bill increases required job-related contacts to potential employers from 2 per week to 5 per week as a determination of whether an individual is actively seeking work, which one legislator said is too high a threshold.

Not a True Story:

Despite what you may have heard, freshman Senator Jeff Jackson did not singlehandedly introduce, debate, filibuster, break filibuster, vote, ratify and enact his legislative agenda, which would expand Medicaid, restore funding to the universities, fund the film tax credits, end puppy mills (his shout out to the Governor), increase teacher pay, and more. He did, on the other hand, create an active Twitter feed that delighted his constituents and North Carolina Democrats, and garnered national attention, including BuzzFeed , Rachel Maddow and Fox News. Senate Rules Chair Tom Apodaca jokingly called Sen. Jackson “North Carolina’s hardest working senator” during the Senate session he was also in.

Next Week:

We are so looking forward to a regular week next week with committee hearings, full calendars, and less time to ponder frivolous and bizarre questions your spam filter won’t allow us to discuss here. We expect to see the Governor’s budget delivered to the General Assembly as well as the House version of an economic development/incentives plan. Stay tuned…

Valentine's Day Legislative Update 2/13/15

noreply@blogger.com (Anonymous) — Fri, 06 Mar 2015 20:48:00 +0000

Welcome to the Valentine’s Day edition of Legislative Update

(not to be confused with the Friday the 13^th edition).

So far in 2015 one member abandoned the Democratic caucus, several high

ranking Republican committee chairs have been demoted, red
velvet ropes keep your Government Relations Team at arm’s length
from anyone we may hug or hit, and Moral Monday demonstrations
now happen every day of the week. In short, there is no love!

But we love love.

So we scoured the NC statutes and are pleased to report that

we do, indeed, have “love” in North Carolina – in fact “love” appears
seven times – in license plates that proclaim our love for animals,
the state song, salute to the state flag, adoptions, and the statute
differentiating types of bail bonds.

We also looked up “hate”.

The result: Love = 7. Hate = 0. Not bad.

The General Assembly has still not hit its stride. Several weeks into the 2015 session and we have very little bill movement and very few committee hearings. March contains bill introduction deadlines so we expect the pace to pick up.

This week we learned from economists at the Legislature that currently revenues continue to lag behind projections. Chief Economist Barry Boardman expects a $271 million shortfall in the current year budget. Republicans suggest April tax filings may help while Democrats complain that the recent tax cuts are deeper than originally thought.

Are Senate Republicans Raising Taxes?

Senate Bill 20, filed in the Senate as an Internal Revenue Code update bill, rolled out with a surprise new “Part II” that deals with motor fuel tax changes. We pay the motor fuels tax at the pump with every fuel purchase. The rate of that tax is adjusted every 6 months, according to the price of fuel – if fuel is up, the rate goes up; if fuel is down, the rate goes down. This new section proposes a 2.5 cent cut in the state’s gas tax and adds a new minimum rate floor that would keep it from falling even lower. In June, however, the gas tax is expected to go lower than the proposed minimum rate floor, so the tax reduction included in the bill would ultimately have the effect of being a tax increase later this year. Supporters of the bill argue a minimum rate is necessary to ensure the Department of Transportation’s primary revenue source is less volatile and more reliable, in order to keep up with both the need to repair roads and the growing economy. Under current law, the formula sets the tax as the sum of 17.5 cents plus either 3.5 cents or 7% of the average wholesale price, whichever is greater. The new legislation would change the formula, setting the tax at 17.5 cents plus either an additional 17.5 cents or 9.9% of the average wholesale fuel price, whichever is greater. The bill passed the Senate on Thursday, but we’re hearing House Leadership doesn’t agree with the tax reduction talking points. Stay tuned.