NCGA Week in Review – April 15 – April 19

April 19, 2013

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Insurance Reform Plans Voted Down in House, Pass in Senate

Two bills reforming automobile insurance passed through the Senate on Thursday. Senate Bill 180 allows insurance companies to offer optional program enhancements that are currently available in other states. Another bill, SB 181, keeps insurers from using years of driving experience as a factor for determining rates. This measure is meant to protect experienced drivers from outside the United States from having to pay the same rate as a driver with no driving experience. SB 181 would allow insurance companies to consider if a driver is younger than 19 years of age. Current law does not allow auto insurance companies to use age as a factor in determining rates. Lawmakers are not concerned that this change will lead to drivers under 19 having higher rates, as drivers younger than 19 already paid higher rates due to having little driving experience.
A different auto insurance reform plan was voted down in the House Insurance Committee on Tuesday. HB 265 would have brought significantly more reform to the industry than the Senate counterparts. HB 265 allowed insurers to opt out of the NC Rate Bureau and set their own rates. The legislation also included a clause allowing optional program enhancements, similar to SB 180. Supporters of HB 265 claim that it would lower rates for up to 85 percent of drivers, and allow full market competition for low rates. Opponents of the bill claimed that it would result in higher rates and more uninsured motorists. Insurance Commissioner Wayne Goodwin argued that the bill would strip him of his power to stop excessive rate increases proposed by insurers.
Education Reform Passes House
The House approved HB 719 on Thursday afternoon with only one dissenting vote. HB 719 reforms the teacher tenure system, giving administrators the ability to remove ineffective teachers. The new system removes tenure and gives teachers either a probationary or non-probationary status. Teachers would be placed on probationary status after receiving an unfavorable end-year review. If a teacher on probationary status received another unfavorable review, the instructor could be fired. Also included in HB 719 is a mandate for a study of how to reward good teachers with merit pay. Lawmakers also instructed the Department of Public Instruction to create a program allowing students to earn educational credit for experiences such as internships. HB 719 now moves to the Senate, where a rival education reform plan cleared the Senate Education Committee earlier this week. Like HB 719, SB 361 addresses issues such as teacher tenure. The bill would allow the top 25 percent of teachers to receive four year contracts, while the remainder of teachers would work on annual contracts without the ability to legally challenge their dismissal.
Price of Voter ID Bill Becomes More Clear as Bill Moves Forward
Implementation of the voter identification bill could cost as much as $3.6 million according to legislative staff. The majority of the cost comes from providing free photos to those without driver’s licenses and voter education efforts. The $3.6 million estimate is on the high end, as the higher figure covers all contingencies. The price of the bill came into consideration as HB 589 passed through the House Finance Committee on an 18-10 party line vote. The bill now heads to the floor, where debate will begin Wednesday. House Speaker Thom Tillis informed his chamber that Monday and Tuesday would include full calendars, so that voter ID could be debated on Wednesday and Thursday.
McCrory Announced Transportation Plan Thursday
Governor McCrory announced a new plan for prioritizing and paying for transportation projects on Thursday. State officials claimed the plan would allow for the state to construct more projects without raising new revenue. The new plan would also select projects based on objective date and local input versus politics. Under the proposed plan, all modes of transportation, including roads, trains, ports, and airports, would compete for funding from the same pot. Transportation Secretary Tony Tata stated that the plan would spur economic growth and enhance the state’s economic ability to recover from the Great Recession. The plan would lead to more appropriations for high-cost projects to reduce travel times, alleviate congestion, and attract economic development. Secondary roads could see reduced maintenance as a consequence of the proposal. The plan would pay for an estimated 260 projects over the next ten years. The current DOT plan includes 175 projects over the next ten years. Many people had cautious responses to the plan, claiming they did not have enough details on the potential effects.
Read more about Governor McCrory’s transportation plan here.
Tax Credits Could End for Film Companies
New legislation filed Wednesday could slow North Carolina’s growing film industry. Under current law, film companies can claim a 25 percent tax credit, up to $20 million, on productions spending more than a quarter million dollars in the state. House Bill 994 would eliminate the tax credit and waive any tax liability the company accrues over the next five years up to an equivalent amount. Only companies based in North Carolina pay the taxes that could be waived, meaning that any companies from out of state would not receive any tax incentives. Those against the bill claim that it would slow the amount of films produced in the state. The tax credit has led to more films being produced in the state. Supporters of the legislation claim that it would bring accountability to the state government.
Senate Approves Prescription Database Reporting Change
The Senate approved SB 222 on Tuesday. The bill intends to make the computer database that tracks prescription drug purchases more effective. Created in 2007, the database is designed to prevent prescription drug abuse. SB 222 would speed up reporting into the database and encourage the Department of Health and Human Services to use it to report back to doctors and licensing boards about potential prescription misuse. The bill’s companion has already passed through committee, but has not yet been heard on the House floor.

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