NCGA Week in Review – August 22, 2014

August 22, 2014

Pardon Our Dust

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On Wednesday night, the North Carolina General Assembly officially adjourned for the biennium. The adjournment resolution does not call back legislators for a November special session to focus on Medicaid reform, as previously discussed.
Several last minute measures passed through the legislature and made it to the Governor’s desk for final approval on Wednesday, as well. First, in the House, legislators resurrected a previous version of SB 3, JMAC Modifications. The Senate originally passed the measure in June, but after the House turned the measure into a “mini-budget,” the legislation did not go any further. Legislators brought back the Senate edition of the bill that will expand the Job Maintenance and Capital Development (JMAC) Fund in order to finance a grant for Haywood County employer Evergreen Packaging. Evergreen Packaging currently has to invest in environmental upgrades in order to stay in compliance with new EPA rules.
The second measure that reappeared on the last day of the short session was SB 42, Confidentiality of UC Information.  The measure ensures that the NC Division of Employment Security will not run afoul of federal regulations because of circumstances beyond its control. SB 42 had already passed the Senate and House once, but the concurrence vote from the Senate on the measure was never voted on. This bill now sits on Governor McCrory’s desk.
With these measures passing the legislature on Wednesday, as well as a coal ash cleanup agreement, if they are signed by the Governor, they will join the other 572 new laws that have been created during the 2013-2014 biennium. The House met for a total of 162 legislative days in 2014 and the Senate met for a total of 163 legislative days. Both chambers completed the 2013 long session with 106 legislative days.
Economic Development Bills
On Tuesday, on a bi-partisan basis, the House voted down HB 1224, Local Sales Tax Options/Economic Development Changes, a bill full of economic incentives and tax changes. NC Department of Commerce Secretary Sharon Decker was a large proponent of the bill, saying that it would help bring large projects to the state.  The bill included the creation of the Job Catalyst Fund, a fund that set aside $20 million to help lure businesses to the state; it was commonly called a “closing fund.” The bill also included the proposal to limit the local sales tax rate for counties.
The defeat of HB 1224 was the reason that SB 3 was brought back to the House floor on Wednesday. The JMAC provisions were a part of HB 1224 before its defeat. SB 3 ensures that the JMAC Fund will be properly funded in order to give Evergreen Packaging the grant they need.
Film Incentives
In the budget a $10 million film grant program was passed, that will go into effect on January 1, when the current tax credit will sunset. Much of the film industry lobbied for an extension of the current tax credit, and even with several attempts by House members to extend the credit program, it never succeeded.
Puppy Mills
A bill that First Lady Ann McCrory lobbied for, HB 930, Dog Breeding Standards/Law Enforcement Tools, never passed the Senate. The bill, which would set standards for large commercial breeders in order to fight puppy mills, passed the House in 2013 on a strong bi-partisan basis, 101-14.
Medicaid Reform
After a study commission was created by the General Assembly in 2013 to create a plan for Medicaid reform, and both the House and Senate came up with their own versions of a plan for Medicaid reform in 2014, nothing passed both chambers. The budget included a provision stating the General Assembly’s intent to come back in November of this year for a special session that focused solely on the topic. In the end, the legislature decided to focus on the issue in 2015 and not come back in November to pass a Medicaid reform plan.
Teacher Assistants
Due to a mistake on the wording of language on the funding of teacher assistants in the budget, restrictions are currently in place on how school districts can fund teacher assistants. Legislators from both chambers had come up with a bill to fix the budget language, but the Senate made it conditional on the passage of HB 1224. After the House voted down HB 1224, the issue was never resolved.
After House and Senate conference committee members of SB 729, Coal Ash Management Act of 2014, announced in early August that they would not be able to come up with a compromise plan on how the state could clean up coal ash ponds, most people considered the legislation “dead.” On Tuesday, the day before the legislature adjourned, conference committee members announced that an agreement had been made.
Representative Chuck McGrady, R-Henderson, a member of the conference committee announced on the House floor that this was just the beginning of a long and unprecedented process. He said that there will be more bills on coal ash passed in future years.
Proponents of the measure explained that this was the first plan of its kind in the nation. Opponents of the measure said that the final measure did not address who was going to pay for the clean-up, whether it would be tax payers, Duke Energy customers, or Duke Energy itself.
SB 729 passed on a strong bi-partisan basis, 84-13 in the House and 38-2 in the Senate.
Beginning September 1, Supreme Court Justice Mark Martin, a Republican, will replace Chief Justice Sarah Parker, a Democrat, as the new Chief Justice of the North Carolina Supreme Court. Chief Justice Sarah Parker is retiring at the end of the month after reaching the mandatory retirement age of 72. Governor Pat McCrory appointed Justice Mark Martin to the position by following tradition of appointing the justice with the most seniority.
Following this appointment, on Wednesday Governor McCrory announced that Court of Appeals Judge Robert Hunter, a Republican, will become an associate Supreme Court justice to fill out the remainder of Justice Mark Martin’s term. His tenure will begin on September 6.
Hunter is seeking a full eight-year term to the Supreme Court in November. Hunter is facing off against Court of Appeals Judge Same Ervin IV. Martin is also on the November ballot, running for Chief Justice against Superior Court Judge Ola Lewis.
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, Vice President