BLOGS: Keeping Up With Jones Street

Friday, April 17, 2015, 2:58 PM

April 17, 3015 NC Legislative Update

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 29th until January 2nd.  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 920Omnibus 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 8Restore 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 344Gubernatorial 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.


HB 436Unauthorized 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 15th 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.


HB 938Comprehensive 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 922Video 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.

Thursday, April 16, 2015, 5:25 PM

New NC Business Court tweak in the works

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:

Friday, April 10, 2015, 4:09 PM

April 3, 2015 Legislative Update

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.



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 14th 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 14th 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….



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

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 78Enact 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 526Job 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

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 117NC 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 338Economic 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 205An 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 306An 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

Redistricting Local Bills

SB 181Wake County Commissioner Districts and SB 36Greensboro 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 117NC 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 180An 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

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 45th 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.



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 117NC 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.
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