SEEING THE LIGHT AT THE END OF THE BUDGET TUNNEL?
By the end of this week, it appeared that budget negotiations may be coming to an end soon. House leaders, Senate leaders and the Governor have been meeting throughout this week in order to come to an agreement. Negotiations on Senate Bill 744, Appropriations Act of 2014, which was technically due at the beginning of the fiscal year on July 1, have come to a halt several times over disagreements on Medicaid and teacher pay.
Today Speaker of the House Thom Tillis announced during the rare Friday session that budget negotiations were moving along, and that there was the potential that the House would not have any voting sessions next week in order to finish off budget negotiations. If an agreement is reached on the budget soon, it is possible that the General Assembly could adjourn for the year as early as next week.
REPRESENTATIVE JIM FULGHUM REMEMBERED
Representative Jim Fulghum, a Republican freshman from Wake County, passed away last Saturday evening, July 19, after a short battle with cancer. He was 70-years-old.
Rep. Fulghum was diagnosed with stomach and esophagus cancer on June 28, according to his family. Less than a week after receiving the diagnosis, he withdrew from his state Senate campaign. Rep. Fulghum was running to replace Senator Neal Hunt (R-Wake), who is retiring at the end of 2014.
As a retired neurosurgeon, Rep. Fulghum was a huge proponent for health measures in the House. He is remembered for sponsoring measures to legalize the use of CBD oil to treat intractable seizure disorders, banning the use of tanning beds by teens, and requiring NC public schools to keep a stock of epinephrine injectors for emergency treatment of life-threatening allergic reactions.
UNCLAIMED U.S. SAVINGS BONDS
House Bill 27, Escheat Savings Bonds Trust Fund/Scholarships, passed both chambers this week unanimously. HB 27 will allow the State Treasurer to go to court with the federal government to win title to bonds that have not been redeemed for longer than three years after they reached maturity. Federal law currently prevents the State Treasurer from liquidating the bonds.
After the State Treasurer receives title of the bonds, the Treasurer’s Office will be permitted to search for the owners, or heir, of U.S. savings bonds that reached maturity long ago. It is expected that the State Treasurer’s Office holds approximately $450,000 worth of unclaimed U.S. savings bonds.
The money will go into an escheats fund until it is claimed. The interest earned from that account will be used to pay for college scholarships. The bill now only needs the Governor’s signature in order to become law.
On Thursday the Senate gave tentative approval to House Bill 1181, NC Medicaid Modernization, a bill designed to reform the state’s Medicaid system. The Senate’s version of Medicaid reform removes Medicaid from the NC Department of Health & Human Services and creates a separate agency called the Department of Medical Benefits. The legislation will also divide the state into regions that would contain both local provider-led organizations and managed care organizations. The provider-led organizations and managed care organizations in each region would compete for contracts.
The bill passed on second reading 28-16, passing largely on party lines, aside from Senators Wesley Meredith (R-Cumberland) and Jeff Tarte (R-Mecklenburg), who voted on the opposing side. After the Senate gives final approval to the bill on Monday, July 28th, it will go back to the House.
It is expected that the House will not accept the Senate’s version of Medicaid reform, as they differ on several large points. The House’s version does not create a new agency for Medicaid and also plans for provider-led accountable care organizations. If the House rejects the Senate’s version, it will go to conference committee for negotiations.
LOCAL SALES TAXES
House Bill 1224, Local Sales Tax Options/Economic Development Changes, received plenty of heated debate between senators this week, before eventually passing the Senate chamber 32-16 on Thursday. The first part of the bill caps local sales tax at 2.5 percent, which will make it easier for all but six North Carolina counties to raise their local sales tax rate.
The legislation would allow local governments to put referenda before voters asking them to approve raising sales taxes in quarter-cent increments for either general purposes, education, transportation, or a combination of the three.
Objections came primarily from the senators who represent the larger urban counties in the state. Guilford, Forsyth, Mecklenburg and Wake Counties all have the authority to put referenda before voters to raise local sales tax up to 2.75 percent, this would limit them back to 2.5 percent. Durham and Orange counties are currently capped out 2.75 percent and would be grandfathered in under this legislation.
The second half of the bill continues to be identical to previous Senate versions of the legislation, which pertain to economic development. This portion of the bill modifies the Job Development Investment Grant (JDIG) Program and the Job Maintenance and Capital (JMAC) Development Fund, as well as creates a new Job Catalyst Fund and writes regulations for crowd funding.
On Friday the House approved House Bill 1133, Technical and Other Corrections. The bill originally surfaced on Thursday in the House Rules Committee, and moved onto the House floor on Friday for debate. While most of the bill was purely technical in nature, such as correcting grammar or numbering in the General Statutes, there were several provisions that were more substantial.
One provision that created significant conversation from both parties, language eliminating the Child Fatality Task Force, was edited out of the bill in an amendment sponsored by Representative Grier Martin (R-Wake) on the House floor.
Overall, the bill passed out of the House 60-39, but not without objects over the process. Typically there is a technical corrections bill that is filed at the end of each session, but that did not stop opposition over the bill’s route from both parties. Several members claimed that the process was too quick; others protested that there were too many provisions in the bill.
After taking the final vote on Friday afternoon, the bill now goes over to the Senate for vetting.
SIGNED INTO LAW
Governor McCrory signed the following bills into law on Tuesday, July 22nd:
HB 644, Prevent Hazardous Drug Exposure – Protects health care personnel who work with or in close proximity to hazardous materials and antineoplastic agents (chemotherapy drugs) from disease and injury caused by exposure. By January 1, 2016, the NC Department of Labor must develop and implement regulations that conform to the National Institute for Occupational Safety & Health recommendations.
SB 812, Replace CCSS w/NC’s Higher Academic Standards – Requires a new state commission to review the Common Core academic standards and recommend the most rigorous academic standards to the State Board of Education for adoption. The new state commission will be allowed to recommend the continuation of parts of the current Common Core academic standards if they are deemed the best.
SB 614, Military Lands Protection Act – Grants the NC Military Affairs Commission greater flexibility to advocate for military missions, installations and infrastructure within the state by protecting sensitive documents concerning BRAC until decisions are made on the federal level. SB 614 also gives the State Construction Office the authority to oversee certain development surrounding military lands.
SB 794, Disapprove Industrial Commission Rules – This bill does two things: directs the Industrial Commission to adopt various workers’ compensation rules and provides uniform statewide guidelines for the computation of retroactive child support obligations.
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
Kerri Burke, Vice President
Bo Heath, Vice President
Sarah Wolfe, Assistant Vice President
Katy Feinberg, Strategic Communications