August 26, 2019

NC Legislative Update: August 2019 #4

David Ferrell, Michelle Frazier, George Smith, III

Maynard Nexsen

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The budget stalemate between the legislature and Governor Cooper continued this week, with both chambers holding votes on various bills, but no vote taken on overriding Governor Cooper’s budget veto. Given the current budget impasse, the Senate has started moving several “mini budgets” which include pieces of various sections of the budget bill passed by the legislature earlier this year. The Senate amended House Bill 555 to include provisions from the Health and Human Services budget that allocate funds for Medicaid Transformation, which is the State’s movement to capitated Medicaid contracts. The Senate also amended House Bill 609 to now include an appropriation for a 2.5% raise for correctional officers. Moving the budget in pieces has been brought up before as a tactic to get around a budget deal tied to the Governor’s Medicaid expansion demand. Governor Cooper says that the piecemeal budget idea is a “gimmick” and Democrats have called it a political move to force Cooper to veto seemingly popular bills before an election year.

While the budget stalemate continues the State will continue operating under a 2015 law that prevents a government shutdown by keeping in place the recurring funding levels of last year’s budget until a new one is adopted. House Speaker Tim Moore has indicated that he still believes that the House will be able to override the veto, and continues to place the motion to override on the House calendar. This will require at least several House Democrats to be absent, since 51 of the 55 House Democrats have signed on to a letter pledging that they will not vote to override Governor Cooper’s veto.

WRAL: https://www.wral.com/gimmicks-cooper-says-as-republicans-change-tactics-on-budget/18585533/

Taxpayer Refund Act

Earlier this year, lawmakers announced that the State’s over collections had resulted in a $900 million surplus. They touted this as proof that their policies and tax cuts have resulted in increased revenue by growing the economy. This week, Senate Leader Phil Berger and House Speaker Tim Moore announced a plan to send part of the surplus back to the taxpayers. In a plan unveiled on Thursday, Senator Berger explained that taxpayers who filed individually will receive a $125 refund and those who filed jointly will receive a $250 refund. The refunds will go to nearly 5.1 million tax filers, but will cost to $5.5 million to administer. In all, House Bill 74 will cost $660 million. Refund checks will go out on December 15, 2019 and February 1, 2020, depending on when the tax filing was received. During a Senate Finance Committee hearing, Democrats raised concerns that the money could be better used to address pending needs in the State, like school construction, healthcare, and infrastructure. Republicans responded that those items were dealt with in the budget they passed, and are currently being blocked by Governor Cooper’s veto. They urged the Democrats to help override the veto to address those issues.

WRAL: https://www.wral.com/lawmakers-offer-to-refund-900m-budget-surplus-to-nc-taxpayers/18583336/

Rural Health Care Stabilization Act

Both chambers have passed legislation to create a rural hospital loan program for rural hospitals in jeopardy of bankruptcy. The legislation originally passed the Senate and the House amended the loan maturity timeline, but the House also added provisions to allow local governments more flexibility on their sales tax and expand eligibility for the State’s Utility Account. Instead of reaching a compromise to the different versions of the bill in conference, the Senate choose to abandon the original bill and insert their language into an unrelated dental bill that had already passed the House. House Bill 704 now includes the Senate’s original plan, with the House change to the loan maturity timeline, but the sales tax and Utility Fund sections have been removed. The bill targets a struggling hospital in Randolph County, but any hospital can apply, outside of UNC Health Care, which will be in charge of administering the fund.

Governor Cooper Vetoes

Governor Cooper issued his 33rd and 34th veto with week, raising objections to House Bill 370 and House Bill 645. House Bill 370 would require Sheriffs to comply with the controversial federal 287(g) immigration program. The program is operated by the U.S. Immigration and Customs Enforcement Agency (ICE) and allows local law enforcement offices to voluntarily cooperate with ICE to enforce various immigration laws. House Bill 370 would make it mandatory for all sheriffs to participate in the program, and the Senate added a provision to allow for a superior court judge to remove a sheriff from office if the sheriff did not comply with the program. Under the 287 (g) program, sheriffs will be required to hold suspected illegal immigrants and report their status to ICE. In his veto message, Governor Cooper claimed that the bill was unconstitutional, and called it “partisan political pandering.”

House Bill 370 dealt with relocating existing billboards when they are condemned, mostly due to highway expansion projects, and established a regulatory framework for where relocated billboards can be placed. The industry has cited that there are 1,000 fewer billboards in the State than there were 10 years ago, mostly due to local regulations prohibiting condemned billboards from being relocated. By vetoing the bill, Governor Cooper is needlessly costing the taxpayers and the Department of Transportation, which is in the middle of large-scale layoffsdue to budget shortfalls, since property owners are due compensation when billboards are taken by eminent domain. In his veto message, Governor Cooper raised concerns over removing local control, ignoring the fact local governments had to grant permission for the billboard to go up in the first place. The Outdoor Advertising Association calls Cooper’s decision “misguided” and claims that he gave a gross misrepresentation of the bill in his veto remarks. The veto came as a surprise to many, since the bill represented a compromise with stakeholders, including the League of Municipalities, County Commissioners’ Association, several large cities, and even the Governor’s own Department of Transportation, all of whom were neutral on the bill.

WRAL: https://www.wral.com/cooper-vetoes-bill-requiring-sheriffs-to-honor-ice-detainers/18583029/

WRAL: https://www.wral.com/cooper-vetoes-changes-to-billboard-regulations/18585680/

US News: https://www.usnews.com/news/best-states/north-carolina/articles/2019-08-22/cooper-vetoes-north-carolina-billboard-relocation-bill

Senate Rejects Healthy NC Bill

The Senate voted not to concur on an omnibus healthcare bill passed by the House last week. The bill, dubbed “Healthy NC” contained the following nine parts: creates a Psychology Interjurisdictional Compact (PSYPACT), allows licensed marriage and family therapists to perform first examinations for involuntary commitments, eliminates redundant adult care home inspections, creates the Lupus Advisory Council, requires that insurers develop formularies for Center for Medicare and Medicaid Services (CMS) approved step therapy, requires insurers to cover oral chemo drugs the same as injected chemo, requires Medicaid to pay for telemedicine, requires private insurance and the State Health Plan to cover telehealth services, and creates the North Carolina Healthcare Solutions Task Force. The bill passed the House by a large margin of 106-3, but the Senate has historically blocked similar provisions in the bill dealing with what they consider to be insurance mandates. Conferees have not been appointed.

Duke Energy Bill Converted to Study

The House passed a bill that was intended to allow the NC Utilities Commission to approve rate increases for multiple years at a time, however, in mixed political vote on a floor amendment, the controversial section of the bill was turned into a study. Duke Energy has been pushing the bill, claiming that it will allow them to better plan for long-term upgrades to the energy grid, however, numerous large energy users, like Google and Walmart, have opposed the bill, along with environmental groups and associations. The Senate has indicated that they will not concur with the changes.

WRAL: https://www.wral.com/duke-energy-bill-hits-hurdle-key-section-now-a-study/18581393/

2019 Session Laws

The following 200 bills have become law this session:

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Attorney Advertising.

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Maynard Nexsen

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Maynard Nexsen on:

NC Legislative Update: August 2019 #4

Taxpayer Refund Act

Rural Health Care Stabilization Act

Governor Cooper Vetoes

Senate Rejects Healthy NC Bill

Duke Energy Bill Converted to Study

2019 Session Laws

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