NCGA Week in Review – April 1 – April 5

April 5, 2013

Pardon Our Dust

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Voter ID Bill Filed Thursday
The highly anticipated legislation requiring voters to show photo identification at the polls was filed in the House on Thursday. House Bill 589 calls for the voter identification requirement to be fully implemented by 2016, when the next presidential election occurs. The Voter Information Verification Act would allow voters to use several types of government issued identification such as driver’s licenses, ID cards, student IDs from NC public universities and community colleges, and government employee IDs. Passports, military IDs, and IDs given to firemen, policemen, and first responders are also approved in the bill. Voters who do not bring identification to their polling place can still fill out a provisional ballot and then bring their ID to the board of election to have their vote counted. The bill also exempts voters who meet the federal definition of persons with disabilities from having to show ID. The bill would also establish a program to help voters get special ID cards through the state. The cards would cost $10, but would be free to people who signed documents stating they could not afford it. Also included in the legislation is the creation of a voter information board with 14 employees who would work with counties to educate voters about the ID requirement and help people obtain proper identification.
Governor McCrory Unveils Plan for Medicaid Overhaul
Governor McCrory announced his plan to overhaul the state’s Medicaid program on Wednesday. The plan calls for managed care companies to offer health care plans for poor children, the elderly, and the disabled. The Governor stated that the change would benefit health care providers, patients, and the state. Under the reforms, managed care companies would receive a set amount of money for each person enrolled in their health-care program. The change would bring predictability to Medicaid expenses, which has been incredibly unpredictable in recent years. Governor McCrory stated that patients would be healthier because a single company would be responsible for overseeing their physical and mental health needs. The change would be significant for North Carolina, as the state has relied on a managed care agency called Community Care North Carolina to create networks of doctors to care for Medicaid patients and work with people with chronic illnesses. Many disagreed with portions of the Governor’s plan, mostly because it could lead to care providers from outside of North Carolina. They also argued that these changes could limit some citizens’ access to health care.
Renewable Energy Rollback Clears House Commerce Subcommittee
A bill that would lower statutes requiring North Carolina’s electric utility companies to generate a portion of their power supply from alternative energy sources passed through the House Commerce Subcommittee on Energy and Emerging Markets on Wednesday. This bill comes six years after the initial renewable energy requirements were passed. The requirements came into effect in 2012, calling for power companies to generate three percent of their supply from renewable energy sources. These requirements would rise to 12.5 percent by 2021. The bill would scale back the requirements to six percent. Many of the bill’s dissenters claim that it would damage burgeoning industry, such as renewable energy consulting. The bill’s supporters claim that the economic gains tied to the renewable energy requirements have come as a burden to taxpayers.
New Bill Would Tax Sweepstakes
If passed, House Bill 547 would bring new taxes and regulation to electronic sweepstakes. Sponsors of the bill claimed that the intent is not to revive the industry but to tax and regulate machines that were not outlawed by previous legislation and court rulings. The industry would be regulated under the Department of Commerce. The legislation would require each café to pay a yearly excise tax of $2,000, another $1,000 per computer terminal and a flat four percent tax on all gross receipts. The bill would also prohibit counties and municipalities from outlawing the sweepstakes in their local jurisdictions. Supporters of the bill cite the new revenue it would bring to the state government. Meanwhile opponents of the sweepstakes claim that it would help the industry when it appeared to be dwindling.
Senate Finance Committee Focuses on Tax Reform
The Senate Finance Committee continued to look at a bipartisan tax reform plan that would lower income tax rates and expand the sales tax base to include some services not currently taxed. Senate Bill 394 is intended as a starting point for debate on reform, as the legislation addresses most aspects of the state’s tax structure. The bill would replace the three personal income tax brackets with a single, six percent rate, while lowering corporate income taxes to six percent for all businesses. Currently, the top income tax bracket is 7.75 percent and the corporate rate is 6.9 percent. The legislation also eliminates several tax deductions, and lowers the state sales tax from 4.75% to 4.5%. The tax base would expand to include services not taxed under the current structure, such as landscaping, pest control, and ticket sales. Under the new bill, state and local privilege license taxes would be eliminated and changers would be made to the state’s franchise tax. Local government money would be made up by distributing some of the new franchise tax to cities and counties. Supporters of the bill like that it is revenue neutral, and believe that it could help improve economic activity in the state by simplifying the tax code. Opponents of the legislation argue that it could lead to an extra burden on the bottom 80% due to the elimination of the progressive tax structure. The committee discussed the legislation a day after co-chairs Rabon and Bob Rucho introduced bills to create a single personal income tax bracket, which would be lowered to 4 percent over three years, and to lower the corporate tax rate from 6.9 percent to 6 percent, also over three years. Senate leader Phil Berger signed on as a primary sponsor of the bill to lower the personal income tax.


Please contact the Raleigh McGuireWoods Consulting team if you have any questions or comments:

Harry Kaplan, Senior Vice-President
Jeff Barnhart, Senior Vice-President
Franklin Freeman, Senior Vice-President
John Merritt, Senior Vice-President
Johnny Tillett, Senior Vice-President
Rita Harris, Vice-President
Bo Heath, Vice-President
Kerri Burke, Assistant Vice-President
Sarah Wolfe, Research Assistant
Katy Feinberg, Strategic Communications