After taking last week off, both chambers returned to Raleigh this week to continue their efforts to wrap up the legislative session. Senate Leader Phil Berger has asserted that the Senate will adjourn on October 31, regardless of whatever legislation is outstanding, but the House has not given an end date for session.
The legislature has continued work on mini budgets as the budget stalemate with the Governor continues. While most state employees have received raises in various mini budgets, the legislature has yet to pass a raise for teachers and school employees. They have indicated that a bill is being worked on, but there is some disagreement on the path forward.
The Senate has not voted on the budget override since receiving the bill from the House. However, the Senate has noticed that an override vote may take place on Monday, the 28th. Senator Berger has also indicated that the Senate may come back to Raleigh to vote on the budget override after the candidate filing period, so that Democrats can vote for the override without fear of a primary challenger.
NC Farm Act Compromise
The House and Senate have been at odds for months over the North Carolina Farm Act of 2019. The bill largely deals with updating industrial hemp regulations in response to a recent federal law change that expanded the legal uses and market for hemp. The issue in controversy between the House and Senate has been a ban on smokable hemp. Representative Jimmy Dixon has claimed that leaving smokable hemp legal would essentially be a backdoor way to legalize marijuana, since the two plants look and smell similar. The law enforcement community shares those concerns, claiming that smokable hemp would prevent them from getting probable cause based on the smell of marijuana. Senator Brent Jackson, the bill sponsor, has argued that there are tests to differentiate the two substances, and that banning smokable hemp will severely affect farmers’ ability to market the crop, since the smokable products are one of the most profitable uses of the plant. The two sides reached a compromise this week in conference and agreed on a smokable hemp ban that will start on June 1, 2020. The bill also requires the Department of Agriculture and Consumer Services, the North Carolina Industrial Hemp Association, the North Carolina Hemp Commission, the State Bureau of Investigation, and other law enforcement agencies to study the issue and report to the Agriculture and Forestry Awareness Study Commission, who will decide whether the prohibition on the sale of smokable hemp should be repealed.
The conference report is on both chambers’ calendar for Monday.
WRAL: https://www.wral.com/deal-struck-on-nc-farm-bill-smokable-hemp-ban/18719711/
Senate Finance Bills
The Senate passed two finance bills this week that largely include provisions included in the vetoed budget. Senate Bill 557 and Senate Bill 578 have both passed the Senate and are now in the House Finance Committee.
Senate Bill 557 increases the standard deduction for married couples filing jointly from $20,000 to $21,000, and from $10,000 to $10,750 for those filing single. The bill also clarifies the definition of a holding company for franchise tax implementation. It establishes market-based sourcing for companies calculating their sales factor for multi-state apportionment, and requires marketplace facilitators to collect and remit sales tax for third-party-sellers.
Senate Bill 578 reduces the franchise tax rate from $1.50 to $0.96 per $1,000 of tax value over two years. The rate will be $1.29 in 2021 and $0.96 in 2022. Electric utility companies will continue to pay the $1.50 rate until 2027. The bill also reduces the qualifying expense threshold for awards from the Film and Entertainment Grant Fund. This section also specifies that the grant is a binding agreement and not subject to appropriations by the General Assembly.
Senate bill 557 passed the Senate with large bipartisan support, while Senate Bill 578 passed on mainly party lines, as Democrats feared that the franchise tax cuts would jeopardize funding availability for future government needs.
Medicaid Transformation Readiness Hearing
The House Health Committee held a meeting this week to hear from the NC Department of Health and Human Services (DHHS), NC Healthcare Association (NCHA), and the NC Medical Society on the state’s move to managed care Medicaid, known as Medicaid Transformation. DHHS Secretary Mandy Cohen noted slow sign-ups and the budget stalemate as challenges to meeting the February 2020 implementation date, but still insisted that the Department would be ready if they had a budget by November 15. The provider community seemed less optimistic that the February 2020 date was feasible, as they noted slow patient sign-ups, credentialing issues, and a lack of provider contracts in place. Without provider contracts in place, many Medicaid beneficiaries will not be able to select their doctor when enrolling, and credentialing issues will affect reimbursements. Lawmakers also expressed concern with the Department’s aggressive timeline, with Republicans and Democrats both talking of delaying the implementation until July 2020. With the Senate planning to adjourn next week, and no budget in place, it is likely that the Department will be forced to delay.
NC Health News: https://www.northcarolinahealthnews.org/2019/10/24/march-to-medicaid-managed-care-switch-looking-rocky/
DOT Cash Flow Fix
The House Transportation Appropriations Committee took up a bill to address the current cash flow issues at the Department of Transportation (DOT). DOT announced earlier this year that a cash flow shortage will force them to lay off around 1,000 temporary employees and halt nearly a thousand projects. DOT cited increased costs due to hurricane-related road repairs and slow federal reimbursements for road damage costs. In an average year, DOT spends around $65 million on storm damage road repair, however, this year they have spent nearly $300 million. DOT has also spent $311 million defending the controversial Map Act, which prevents landowners from developing property in areas where future highway projects are planned. The legislature has repealed the Map Act.
Representative John Torbett unveiled the DOT Fin. Preservation and Accountability Act in committee and the bill would spend $360,200,000 from the General Fund to help DOT pay for Map Act claims. It also appropriates $301,000,000 from the Savings Reserve to the Highway Fund to be used towards projects on the delayed list, but the Department would be required to repay the Savings Reserve by 2025. The bill contains another section that would make money in the Savings Reserve available for DOT in response to nationally declared disasters. The bill passed the Committee, but House budget writers have indicated that they are working on a competing approach that will be narrower and try to use more money currently at DOT to solve the problem. One issue contributing to the cash flow problem is a statutory cash floor that the Department cannot go beneath.
The Senate has indicated that they are interested in addressing the issue, but are troubled that Governor Cooper has not submitted a plan to address the problem or requested additional DOT funding from the General Assembly. The Senate has also raised concerns that additional oversight at DOT might be needed to avoid similar problems in the future. Others have indicated that the cash flow issue warrants a larger look at how the state funds transportation infrastructure, which relies heavily on the gas tax, but has been seeing declines in revenue.
WRAL: https://www.wral.com/dot-cash-flow-fix-moves-in-house-but-competing-proposal-coming/18716658/
2019 Session Laws
The following 232 bills have become law this session:
- SB 7: Bipartisan Ethics Appointments
- SB 75: Restore Ct. of Appeals Membership
- SB 77: Ag Disaster Fund/Certain Counties
- SB 214: Ensure Orderly 2019 Elections
- SB 12: Fill Certain Vacancies/Alexander & Burke Co.
- SB 56: Revenue Laws Technical Changes
- SB 4: Extend Terms of 2 Members/Coastal Carolina CC
- SB 272: Zoning for University Facilities-Durham
- SB 6: Dare County/CC Construction Funds
- SB 162: Loan Origination/Late Payment Charge Changes
- HB 263: Fill Vacancies/Modify 2018 Appointments
- SB 63: City of Kannapolis/Annexation
- HB 130: Allow Game Nights
- SB 505: Rural Job Retention Act
- SB 605: Highway Storm Recovery Act
- HB 1014: 2020 Census VTD Verification Program
- SB 310: Electric Co-Op Rural Broadband Services
- HB 363: Craft Beer Distribution & Modernization Act
- HB 233: State Auditor/Local Finance Officer Amends
- HB 532: DNCR Add New Trails & Various Changes
- HB 388: Immunizing Pharmacists
- HB 646: ID Approval/Flex Muni One-Stop
- HB 70: Delay NC HealthConnex for Certain Providers
- HB 9: Bessemer City Charter Amendment
- HB 201: Randolph Co. Register of Deeds Tax Cert
- SB 252: Dental Bill of Rights
- SB 138: Even-Yr Municipal Elections/Town of Black Mtn.
- SB 139: Even-Yr. Municipal Elections/Town of Montreat
- HB 336: Extend Suspension of Spencer Mountain
- SB 235: Franklin/Nash Municipalities/Unfit Dwellings
- SB 30 Stanly CC/Contracting Date Extension
- SB 381: Reconstitute/Clarify Boards and Commissions
- HB 301: CIP Revisions/Juvenile Code
- HB 179: Mini-Truck Classification
- HB 131: Repeal Map Act
- HB 82: Railroad Crossings/On-Track Equipment
- SB 648: Support Shellfish Aquaculture
- SB 448: Amend Appt For Compact on Education/Military
- SB 255: State Board Construction Contract Claim
- SB 151: Break or Enter Pharmacy/Increase Penalty
- HB 617: Allow Repeat Referral to Teen Court
- HB 578: Modify Legitimations Provisions
- HB 548: Modify Physical Therapy Definition
- HB 383: Topsail Beach Charter/Board Vacancies
- HB 1016: UNC Boards of Trustees Appointments
- HB 1017: Special Master Wake House Plan
- HB 415: Photos of Juveniles/Show-Ups
- SB 148: Public Records/Release of LEO Recordings
- SB 11: ABC Regulation and Reform
- SB 466: EDPNC Modifications
- HB 57: Create Term for Public Schs. & Codify NCVPS
- HB 389: ABC/Univ Athletic Facility
- HB 531: Tenants at Foreclosure Act Restored
- HB 658: Allow Donations of Unexpired Drugs
- HB 664: myFutureNC/Postsecondary Attainment Goal
- HB 432: Water/Sewer to Contiguous Dwelling Units
- HB 219: NAIC Accreditation Amendments.-AB
- SB 80: China Grove Satellite Annexation
- SB 242: Recreational Land Fee Changes
- SB 227: TP3/Principal Fellows Consolidation
- SB 84: Walkertown Zoning Authorizations
- SB 262: Union/Prohibit Certain Hunting Acts
- SB 674: Surry Co./Mt. Airy/Elkin City/Bd. Ed Partisan
- HB 15: Lexington/Dissolve Utilities Commission
- HB 240: Albemarle/City Labor for Business Ctr
- HB 299: Henderson City/Build Community College Bldgs
- HB 6: Burlington Airport/Lease/Contract Authority
- SB 225: Repeal Tuition Surcharge
- HB 537: Hwy Use Tax Vehicle Subscriptions
- HB 934: Right to Try Adult Stem Cell Treatments
- SB 219: Modify Teacher Licensing Requirements
- SB 55: Continuing Education for General Contractors
- SB 483: Vacation Rental Act Changes
- SB 610: Authorize Northern Peaks Trail
- SB 95: Veterans Memorial Funds/Do Not Revert
- SB 556: GSC People First Language 2019
- SB 529: Fees/Returned Checks
- SB 88: Electrician Requirements for Certain Orgs
- SB 313: Guar. to Streamline Afford. Housing
- SB 127: Protect Governmental Accountability
- HB 656: Medicaid Changes for Transformation
- HB 924: Teacher Contract Changes
- HB 474: Death by Distribution
- HB 67: Road Barrier Prohibition
- HB 310: Clarify Insurance Prod'r Crim. Bckgrd Check
- HB 812: Nutrient Offset Amendments
- HB 886: Study Participation of Operators in NC Pre-K
- HB 529: Utilities/Water and Wastewater Consumption
- HB 917: Emergency Declaration/Clarify Rd Closure
- HB 747: NC Missing Person Information Sharing
- HB 770: Freedom to Work/OLB Reform
- HB 871: Fair Contracts
- HB 4: Claremont Deannexation
- HB 52: Wrightsville Beach Local Act Amendment
- HB 204: Town of Beaufort/Annexation
- HB 349: Wilkes County Fire Tax-Procedure
- HB 489: Lincolnton-Lincoln County Airport Authority
- HB 80: Roanoke Rapids Lake/Unattended Equip
- HB 237: Brunswick County Zoning Procedure Changes
- HB 368: Bermuda Run/Speed Restrictions
- HB 98: Macon/Clay/No Right-of-Way Spotlighting
- HB 134: Filling Vacancy/Onslow County Board of Comm
- HB 170: Various Satellite Annexations
- HB 187: Amend Town of Elon Charter/Parking Ordinances
- HB 285: City of Sanford/Town of Beaufort/Vol Annex
- HB 239: Pitt County Animal Control Records
- HB 324: Local Hunting Omnibus
- HB 429: Navigable Waters/Manteo/Hyde
- SB 191: Out-of-State Law Enforcement/2020 Rep Convtn
- SB 399: Rehire High-Need Teachers
- SB 355: Land-Use Regulatory Changes
- SB 378: Local Economic Development Modifications
- SB 394: Changes to Estates & Trusts Statutes
- SB 311: Massage Board Membership
- HB 257: Motorcycles/Face Masks
- HB 224: Assault w/ Firearm on LEO/Increase Punishment
- SB 594: Register of Deeds Updates
- SB 525: Textile Hist. Site/Operate SE NC Museum
- SB 220: Removal of Political Signs by Citizens
- SB 500: Modify Advanced Math Course Enrollment
- SB 186: Beaufort-Morehead Cty Airport Authority/Amend
- SB 686: Appointments Bill 2019
- HB 492: Simplify Builder Inventory Exclusion
- HB 402: UNC Capital Projects
- SB 384: Clarify Motor Vehicle Dealer Laws
- HB 761: Clarify Wastewater Permitting Liability
- HB 758: MSD Expansion and Governance/DACS Study
- HB 755: Travel Insurance Amendments
- HB 735: Adopt Rules Incorporating 2017 Food Code
- HB 629: Law Enforcement Mutual Aid
- HB 495: No Municipal Reg/Off-Site Wastewater Systems
- HB 329: Renewable Energy Amends
- HB 156: Swain County Settlement Trust Fund
- HB 138: Damage Jail & Prison Fire Sprinkler/Penalty
- HB 106: Inmate Health Care & 340B Program
- HB 18: Allow Absentee Ballots/Fire District Election
- HB 757: Pender County/Butner Property Transfers
- SB 535: Authorize State Park/Clarify Corps Name
- HB 668: Various Higher Education Changes
- HB 590: Amend Administrative Procedure Laws
- SB 444: Allow Use of Oyster Shells As Serving Dishes
- HB 411: Modify School Qual./Student Success Indicator
- SB 210: Organ & Tissue Donation/Heart Heroes
- SB 316: Affordable Housing
- SB 297: Cancer Research Advisory Panel
- SB 462: Modifications to NC Appraisal Board
- SB 508: Civil Procedure/Deponent Declaration
- SB 606: Prioritize Native NC Plants on Highway ROW
- HB 107: PED Oversight/EPP Changes
- HB 323: Assess Costs of Local LEO Crime Lab Analysis
- HB 268: Amend On-Site Wastewater Laws/Misc. TC
- HB 243: State Human Resources Act Amendments.-AB
- HB 337: Change Salvage Vehicle Transfer Requirements
- HB 362: 15-Point Scale For School Performance Grades
- HB 546: Prohibit Counterfeit/Nonfunctional Airbags
- HB 620: Street Database/Manual/Public Record Except
- SB 29: Move Over Law/Increase Penalties/Amber Lights
- HB 198: Human Trafficking Commission Recommendations.-AB
- HB 325: Opioid Epidemic Response Act
- SB 194: West Jefferson/Saluda Satellite Annexations
- SB 420: NC Servicemembers Civil Relief Act
- SB 218: Clarify State Recognition - Lumbee Indians
- SB 145: Allow Sports/Horse Race Wagering Tribal Lands
- SB 332: Civil Procedure/Limitations/Land Surveyors
- SB 343: Various Education Law Changes
- SB 391: Expand Youth Internship Opportunities
- SB 478: Modify Appointment Reporting
- SB 493: DVPO Abuser Treatment/Time of Expiration
- SB 523: Laws Clarifying & Administrative Changes
- SB 604: Amend NC Veterinary Practice Act
- SB 108: PED/Safekeeper Health Care Cost Recov. Pract
- HB 469: Various Family Law Changes
- HB 628: 2019 Banking & Mortgage Corrections & Changes
- HB 675: 2019 Building Code Regulatory Reform
- HB 50: Allow Hyperbaric Oxygen Therapy for TBI/PTSD
- HB 922: Enhance Insurance Coverage/Educ. Buildings
- HB 264: GSC Technical Corrections 2019
- SB 532: Amends Probate/Trusts/Wills Choice of Law
- HB 220: Insurance Technical Changes.-AB
- SB 302: Update ACH Svc & Care Plan/Bd of Nursing
- SB 385: Clarify/Auto Dealers Regulatory Req
- SB 290: ABC Regulatory Reform Bill
- SB 9: Female Genital Mutilation/Clarify Prohibition
- SB 301: Regional School Modifications
- SB 366: 9th/10th Grade/College Transfer Pathways
- SB 413: Raise the Age Modifications
- SB 498: Facilitate Response to Disasters
- HB 724: Truth in Caller ID Act
- HB 872: Underground Utility Safety Act/Changes
- SB 190: Expand Special Assessments for Dam Repair
- HB 228: Modernize Laws Pertaining to NC Medical Board.-AB
- HB 961: Ensuring Authorization of Federal Funds
- HB 760: Expand Loss Prevention Investigations
- HB 391: Passenger Protection Act
- HB 590: Modify Continuing Ed for Real Estate Brokers
- SB 321: Federal Motor Carrier Safety/PRISM
- SB 68: Relocation of Water/Sewer Line Costs
- SB 584: Criminal Law Reform
- HB 206: Various Transportation Changes
- HB 217: DIT Changes.-AB
- SB 230: NC Military and Veteran Act of 2019
- SB 86: Small Business Health Care Act
- HB 99: Transfer ALE/Move Boxing Advisory Commission
- HB 597: Wildlife Resources Commission Amends
- HB 604: Small Business Retirement Program
- HB 55: Cleveland County/Sheriff Vacancies
- HB 554: Funeral Practice Licensure Tech. Corrections
- HB 609: Salary Increases/Adult Correctional Employees
- HB 226: Pay Increases/State Employees
- HB 126: Pay Increases/State Highway Patrol
- HB 777: Pay Increases/SBI & ALE
- SB 621: Testing Reduction Act of 2019
- HB 449: Handicapped & Special Registration Plates
- SB 600: Vets Children/Short-Term Workforce Training
- SB 353: Amend Cartway Path/Septic Tank Laws
- SB 682: Implement Crime Victim Rights Amendment
- SB 574: Study Establish Gaming Comm/Sports Betting
- SB 270: Durham Deannexation
- SB 692: 2019 Senate Consensus Nonpartisan Map
- HB 1020: 2019 House Remedial Map
- HB 29: Standing Up for Rape Victims Act of 2019
- HB 75: School Safety Funds, Programs, and Reports
- SB 118: Prison Safety/TANF State Plan/Clarifications
- SB 429: Disaster Recovery - 2019 Budget Provisions
- SB 458: PTS Day/Cardiac Task Force/Titus's Law/Data
- SB 691: Emergency Operating Funds for Utilities
- HB 211: Various DMV Changes
- HB 283: Conner’s Law
- HB 1001: Raise the Age Funding
- HB 387: Growing G.R.E.A.T.
- HB 100: DOT Budget for 2019-2021 Biennium
- SB 572: University System Risk Management Provisions