North Carolina General Assembly Week in Review

August 21, 2015

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Agreement Reached on Total Budget Spending Number

NC State Government is currently operating under a Continuing Resolution (CR), SB 560, 2015 Continuing Budget Authority. This CR is set to expire at 11:59pm on August 31, 2015. With less than two weeks before the CR expiries, House and Senate leadership have agreed to a total spending number but continue tonegotiate the details of the budget.

On Tuesday, the House and Senate agreed to spend $21.735 billion on the NC budget, which is approximately $265 million more than the Senate proposed in itsbudget, and $420 million less than what the House proposed in its budget. Already almost 8 weeks into the 2015-16 fiscal year, State services arecontinuing and most traditional schools are starting. Yet, teachers assistants, economic development programs, and driver education remain on thenegotiating table for budget discussions.

The General Assembly will have to pass a budget bill, or another CR before the August 31st midnight deadline.

Read the new CR here.

HB 117 Conferees Appointed by the House

House Bill 117, NC Competes Act, passed the Senate chamber last week, but was rejected by the rel=”noopener noreferrer” House on Wednesday, 111-2, in a motion not toconcur with the Senate changes. The vote outcome was due largely to the Senate’s addition to a change in the local option sales tax (LOST) distributionformula.

Yesterday rel=”noopener noreferrer” the House appointed conferees. Chairing the conferencecommittee for the House is Rules Chairman Rep. David Lewis (R-Harnett). Other conferees include: Reps. Jason Saine (R-Lincoln), Bill Brawley(R-Mecklenburg), John Szoka (R-Cumberland), Charles Jeter (R-Mecklenburg), Susan Martin (R-Wilson), Jeff Collins (R-Nash), Bob Steinburg (R-Chowan), TedDavis (R-New Hanover), Stephen Ross (R-Alamance), John Bradford (R-Mecklenburg), Jeffrey Elmore (R-Wilkes), and Leo Daughtry (R-Johnston). Four Democratmembers join the conference committee: Reps. Ken Goodman (D-Richmond), Rodney Moore (D-Mecklenburg), Susi Hamilton (D-New Hanover), and Darren Jackson(D-Wake).

The rel=”noopener noreferrer” Senate has not yet appointed conferees.

Read HB 117 here. See the billsummary here.

Medicaid Reform Conference Committee

Also on Wednesday, the House failed rel=”noopener noreferrer” to concur to Senate changes to HB 372, Medicaid Transformation/HIE/PrimaryCare/Funds. The House and Senate appointedfinal conferees on Thursday. Co-Chairsfor the House will be Reps. Donny Lambeth (R-Forsyth) and Nelson Dollar (R-Wake). The Senate will have three Co-Chairs, Sens. Ralph Hise (R-Mitchell),Louis Pate (R-Wayne), and Tommy Tucker (R-Union).

The House and Senate, as well as the Governor, all agree that they want to move away from the state’s current fee-for-service system to a full-riskcapitated system. Disagreements between who will administer the program has divided the Senate and the House.

The Senate version creates roles for both managed care organizations (MCOs) and provider-led entities (PLEs). The three MCOs would operate on a statewidebasis, while the PLEs would operate in regions. On the other hand, the House version permits provider-led entities to bid for contracts and manage networksof at least 30,000 Medicaid recipients.

On Wednesday, however, House leaders announced that they would pursue a hybrid model, moving them to agree with the Senate that MCOs and PLEs could operatein the state.

Also on the negotiating table will be whether a new department will be created to oversee the state’s Medicaid program. Under the Senate’s plan, a newDepartment of Medicaid would be responsible, while the House prefers to keep the program under the Department of Health and Human Services.

HB 372 negotiators will also have to determine whether the Community Care of NC (CCNC) program will continue under the reformed Medicaid system. The Senateproposes to cancel that contract and instead use those savings to raise the rates for OB/GYNs and certain primary care physicians up to 100% of theMedicare rate. The House prefers to build off the home-grown medical home rel=”noopener noreferrer” system. Yesterday, State Auditor Beth Wood released an audit that determined thatthe CCNC model did produce savings to the state.

Read HB 372 here.

House Passes Changes to Unemployment Insurance

The House passed SB 15, Unemployment Insurance Law Changes, on Thursday. The House changes, made earlier this month, included changes to the reportingrequirements, modified the effective date to January 1, 2016, changes to the limitations on suits or proceedings for unpaid contributions, amendments tothe photo identification requirement, amendments to the procedure for protest claims, changes the weekly benefit amounts, and changes the charges to theemployer’s account to quarterly.

Among other provisions, SB 15 increases the current job contact requirement for those receiving benefits from two contacts per week to five contacts perweek, while giving the receipt more flexibility regarding when and how those contacts are made. Rep. Jonathan Jordan (R-Ashe) moved to amend the bill onthird reading to change the requirement to three contacts per week. Rep. Jordan stated on the floor his amendment would bring NC in compliance with theoverwhelming majority of other states, while still increasing NC’s current requirement from two contacts to three contacts per week. Rep. Julia Howard(R-Davie) spoke in opposition to Rep. Jordan’s amendment, arguing the Senate would not agree to any further rel=”noopener noreferrer” changes. Rep. Howard concluded if the Housepassed Rep. Jordan’s amendment the House risked the entire bill failing in the Senate. Rep. Jordan’s amendment failed, 49-60.

The bill now goes to the Senate for concurrence.

Read SB 15 here.

Transportation Network Companies Passes House Finance

On, Thursday, the House Finance Committee gave approval to SB 541, Regulate Transportation Networks Companies, with little debate. The bill will go to theHouse floor next week. The bill requires companies to buy insurance coverage for their drivers and passengers. The bill also requires rel=”noopener noreferrer” the company topreform nationwide criminal background checks on drivers. Uber, Lyft, and other Transportation Network Companies have provided input in the development ofthe proposed regulatory framework.

Read SB 541 here.

Changes to Unclaimed Life Insurance Benefits Passes the House

This week the House gave approval to SB, 665, Unclaimed Life Insurance Benefits. The approved version was the result of lengthy negotiations betweenstakeholders.

During the Judiciary I committee hearing, Chairman Rep. Leo Daughtry (R-Johnson) and Tony Solari (NC Department of State Treasurer liaison) publicallythanked Jeff Barnhart and Franklin Freeman of McGuireWoods Consulting, LLC (lobbyists for the National Alliance of Liability Carriers), and Mike Mann(lobbyist for Kemper) for their diligent work on this bill.

SB 665 requires insurers to perform a semiannual comparison report with the Death Master File, or similar file, of its in-force policies, annuities, andaccount owners, with some exceptions. The requirement is prospective for all policies and annuities entered into beginning October 1, 2015 and after.However, the requirement is retroactive for any policy or annuity issued by a company that has or does engage in asymmetric conduct. The bill does notmodify or supersede the authority of the State Treasurer to examine records and conduct an audit, nor its ability to request or access records of aninsurer and visit rel=”noopener noreferrer” an examination of the insurer’s records under Chapter 116B, Escheats and Abandoned Property, of the General Statues.

The bill passed second and third readings in the House on Thursday and now goes to the Senate for concurrence.

Read SB 665here.


Senior Vice President 

Senior Vice President 

Franklin Freeman
Senior Vice President 

Bo Heath
Senior Vice President 

John Merritt
Senior Vice President 

Senior Vice President 

Kerri Burke
Vice President 

Assistant Vice President 

Sarah Wolfe
Assistant Vice President