NCGA 2013 Session Wrap-Up

July 30, 2013

Pardon Our Dust

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On Friday, July 26th, the General Assembly finished up their business for 2013. The General Assembly will return for short session on May 14th, 2014 at noon. During the interim, oversight and study committees will meet. These committees will conduct oversight over recently passed laws, ensuring that the Governor and the executive agencies carry out the duties of new laws. Further, several study committees will be formed during the interim that will study issues and recommend legislation for the legislature to move forward with in the short session next year.
Currently there are 38 bills still pending signature from the Governor. Once those bills are signed into law, approximately 400 bills will have been passed into law this year. The General Assembly had a focus on reform this legislative session; the biggest issues that faced the legislature this year are outlined below.
Yesterday Governor McCrory signed one of the more controversial measures of the session, SB 353, Health and Safety Law Changes. Proponents of the measure that places more regulations on abortions in the state, say that it is about raising the safety standards for doctors and clinics that perform abortions, as well as ensuring a safer procedure for women. Opponents of the measure say that the legislation will limit the access and availability of abortions across the state.
Provisions of SB 353 include: prohibits sex selective abortions, opts out of abortions in the federal exchange and in city and county health plans except for when the mother’s life is in danger, rape, or incest, and makes the requirements of the abortions to be closer to the standards required of ambulatory surgical centers.
Last Friday Governor McCrory signed the $20.6 billion budget into law. The Appropriations Act of 2013 increases state spending by 2.5 percent from the last fiscal year. Overall, 56 percent of the budget is focused on funding K-12, the 58 community colleges, and the 17 public universities across the state. The tax reform plan also passed this year has been incorporated into the budget.
A provision to compensate victims of North Carolina’s Eugenics Program, which ended in 1974, is included in this budget. The budget sets aside $10 million to be divided evenly between all living victims of the state program.
Two bills, HB 23 and HB 44, were signed into law this year with the intentions to promote technology and expand digital learning in North Carolina. HB 23, Digital Learning Competencies/School Emp’ees, directs the State Board of Education to develop and implement digital teaching and learning standards. HB 44, Transition to Digital Learning in Schools, expresses North Carolina’s intent to transition from funding textbooks to digital learning materials in public schools by 2017.
After passing the House with a vote of 90-21, the Governor signed HB 269, Children w/Disabilities Scholarship Grants, into law yesterday. The scholarships will be available for the 2014 spring semester, with the intent to give children with disabilities the opportunity to learn in an environment that best meets their needs, whether that is in a nonpublic school or homeschool.
In May Governor McCrory signed HB 484, Permitting of Wind Energy Facilities, into law. The legislation creates the framework for wind energy facilities to be established in North Carolina. In a press release, the Governor stated that this piece of legislation signals his “continued support for an ‘all-of-the-above’ energy plan.”
The legislature also passed SB 76, Domestic Energy Jobs Act, which directs the Mining and Energy Commission to explore the next steps in permitting citizens to conduct greater energy exploration. SB 76 also established an Offshore Energy Fund, for emergencies.
In the last few days of the legislative session, a bill that would have lifted the moratorium off of hydraulic fracturing, and authorized the reorganization of the North Carolina Commerce Department, including privatizing much of the state’s job recruitment efforts, lost its momentum. Governor McCrory has stated that shale gas exploration is one of his top priorities, but current law prohibits this exploration until July 1, 2015. SB 127, Economic Development Modifications, currently resides in the Senate Rules committee, and will be eligible to become law again when the General Assembly reconvenes in May 2014.
On Monday Governor McCrory signed HB 937, Amend Various Firearms Laws, into the books. The law expands the places that people with a concealed carry permit can carry their firearm to include bars and restaurants that serve alcohol as long as the carrier is not consuming alcohol. The owner of a bar or restaurant has the right to forbid conceal carry in their establishment, if they choose to do so under the law. The law also allows for a handgun to be in a locked compartment, inside of a locked car, on a public school, university, or state government parking lot.
HB 937 establishes uniform state requirements for reporting information about substance abuse and mental health court findings to the national criminal background check system. The legislation also strengthens penalties for those who violate firearm laws in North Carolina.
SB 4, No NC Exchange/No Medicaid Expansion, which became law in early March, rejects major parts of the Affordable Care Act and prohibits North Carolina from establishing a state-sponsored marketplace for health insurance, opting for the federal government to have control of the insurance marketplace instead.
After signing the law, Governor McCrory stated that making the decision to block Medicaid expansion was difficult, but that the state must reform the current system, to ensure the people currently enrolled are receiving the services they need and that tax payer dollars are not put at risk, before expanding Medicaid any further. Proponents of expanding Medicaid in North Carolina said that the expansion would have allowed for nearly 500,000 more uninsured citizens to attain health insurance.
The Regulatory Reform Act of 2013, HB 74, currently awaits final approval from the Governor before officially becoming law. The 68-page bill aims to cut down on places where lawmakers said there was over-regulation, which they said was burdensome on encouraging economic activity in the state. HB 74 contains a wide range of provisions, ranging from allowing a bed-and-breakfast to serve more than just breakfast, to changing the regulations on trash trucks in the state.
In a press conference on Friday, Governor Pat McCrory stated concerns about two provisions of the bill- provisions that would change regulations on landfills and billboards. Governor McCrory stated that he was concerned that the bill would take away some of the ability for municipalities to keep billboards off of their roadways, if the municipality chose to do so. If the Governor chose to veto the bill, lawmakers would have 40 days, from the date of the veto, to reconvene for a special session to override the veto.
After several versions of a tax reform plan were introduced by both the House and Senate, the chambers and the Governor came to a compromise on a plan to reform North Carolina’s tax code for the first time since the Great Depression. Governor McCrory signed HB 998, Tax Simplification and Reduction Act, into law on July 23rd.
The tax reform plan will lower the personal income tax rate for all citizens down to 5.8 percent in 2014, reduces the corporate income tax rate to 6 percent in 2014, and eliminates the estate tax. The gas tax cap has been extended another year, to June 30, 2015, under the new law.
In conjunction with Department of Transportation Secretary Tony Tata and Governor McCrory, the legislature passed HB 817, Strategic Mobility Formula. The Strategic Mobility Formula will replace the state’s Equity Formula, which was created in 1989 and no longer sufficiently met the needs of North Carolina’s roads, according to Governor McCrory.
The new formula will implement a tiered approach to funding transportation projects across the state. The statewide tier will receive 40 percent of available funding, the regional tier will receive 30 percent of available funding, and the division tier will receive 30 percent of available funding over the next 10 years. The Strategic Mobility Formula is expected to fund at least 260 projects and create more than 240,000 jobs over the next 10 years. Before implementation of the new formula, the NC DOT 10-year plan includes 175 projects and creates 174,000 jobs.
Full implementation of the new formula is scheduled to begin July 1, 2015.
On February 19th, Governor McCrory signed HB 4, UI Fund Solvency & Program Changes. HB 4 seeks to make fixes to North Carolina’s unemployment insurance system. The state currently owes more than $2 billion in debt to the federal government for loans used to fund the state’s share of unemployment compensation. Governor McCrory said that this bipartisan solution would protect North Carolina’s small businesses from over-taxation, as well as ensure that the state’s unemployment safety net is financially sound for the future. Proponents of the bill also said it will help employers reach an economic climate that will allow the job creators to begin hiring again.
Yesterday HB 589, VIVA/Election Changes, became law. HB 589 will require voters to show a valid government-issued photo ID before casting their vote. According to the law, a valid government-issued photo ID includes a driver’s license, non-operator ID card, tribal ID, military ID, and a passport. The law will begin a gradual implementation in 2014 before taking full effect in the 2016 elections. All North Carolina citizens without a valid government-issued ID will be able to obtain one at no cost through the Department of Motor Vehicles. Additionally, the law establishes consistent standard hours for early voting across the state and eliminates straight-ticket voting.
Proponents for the legislation say that it will help restore the integrity of the election process, and keep the process fair and accountable. Opponents of the legislation say that this law will see legal challenges and will suppress voters in North Carolina.
Other provisions of the new law include: an increased maximum on campaign donations from $4,000 to $5,000, with the cap adjusted for inflation beginning in 2015; repeals “Stand by Your Ad,” which required candidates to endorse ads run by their campaign; and repeals a publically funded election program for appellate court judges.
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