NCGA Week in Review

February 12, 2016

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This week, several legislative oversight committees met to discuss legislative issues facing the state. The committees heard presentations from keystakeholders and state government departments. These committees, and others, will continue to meet during the interim. The legislative session will beginon April 25th.

Capital Improvements Oversight

The Joint Legislative Oversight Committee on Capital Improvements met on Wednesday, February 10 to discuss capital improvement projects and budgets inother states.

Director of State Fiscal Studies at the National Association of State Budget Officers (NASBO) Brian Sigritz provided the committee with an overview ofcapital budgeting in the states. A 50 state survey of capital budgeting defined capital and maintenance expenditures and provided narrative explanation ofthe planning processes, project selection, financing and debt management.

Director of Special Projects John LePenta from the Office of State Budget and Management provided the committee with anoverviewof Project Phoenix. Project Phoenix is a nine project initiative to improve the state’s occupancy of real estate across North Carolina.

The committee will reconvene on March 9.

Charter School Advisory Board

The Charter School Advisory Board held all-day meetings on Monday, February 8 and Tuesday, February 9 to discuss several issues pertinent to charterschools across the state, and to consider the applications from hopeful charters.

The Department of Public Instruction (DPI) provided the board with a presentation on school transportation. SectionChief of Transportation Derek Graham reported that though 147 charter schools operated or contracted for school buses during school year 2014-2015, mostschools opt for car pools or parent transportation. Graham also highlighted the statutes that govern charter bus use and inspection.

The board took up several policy issues for discussion and to make recommendations to the Board of Education. The board recommended updating charterapplications to require that all board members disclose all convictions, excluding minor traffic violations. Review the current criminal background checkrequirements here.

A series of policy recommendations regardingteacher licensure will be formally brought to the State Board in March. The recommendations, which include eliminating student growth as a formal standardof N.C. educator effectiveness and adjusts teacher licensure requirements through technical changes, were well received by the advisory board.

The board will meet again in March.

Emergency Management Oversight

The Joint Legislative Emergency Management Oversight Committee met on Thursday, February 11 to discuss several emergency management concerns of the state.

The Director of the Division of Emergency Management (NCEM), Mike Sprayberry, provided an overview of the Division. The NCEM is responsible for respondingto natural threats & hazards to protect N.C. at local and state wide levels. Read more about the Division here.

State Highway Patrol Lieutenant Colonel Billy Clayton discussed the state’s response to Winter Storm Jonas earlier this year. State Highway Patrol tookmultiple measures within the 48 hours prior to the storm to prepare for hazardous conditions. Read more about State Highway Patrol’s preparation for WinterStorm Jonashere.

Dr. Megan Davies, Chief of the Epidemiology Section of the Division of Public Health, discussed the Zika virus and other emerging threats to the publichealth of N.C. The Zika virus, a mosquito-borne arbovirus similar to West Nile, has had endemic levels of transmission in Central & South America,Mexico and the Caribbean. To handle the threats of Zika, Davies proposed that N.C. needs three things: a prepared workforce, strong internal and externalpartnerships and strong health infrastructure. Clickhereto read more about Zika and other public health threats.

State Veterinarian Dr. Douglas Meckes, Director of Animal Health Programs and Poultry of the Veterinary Division, Dr. Sarah Mason, and the Director of theEmergency Programs Division at the Department of Agriculture and Consumer Services, Sharron Stewart, provided the committee with anupdateon Avian Inluenza preparedness. Because of the importance of agriculture in N.C., the threats of avian bird flu are considered particularly concerning.N.C. has nearly 4,500 commercial poultry farms. The presenters provided an overview of the emergency responses and prevention tactics used in the stateagainst Avian Influenza.

The committee will reconvene on March 10.

Environmental Review Commission

The Environmental Review Commission met on Wednesday, February 10 to discuss several environmental issues facing the state.

The committee heard from the Department of Environmental Quality (DEQ) and stakeholders held a discussion on the disposal of solar panels.

According to DEQ Assistant Secretary Tom Reeder’spresentation, N.C. is ranked 4th in the country for solar power generation, with the largest solar facility east of the Mississippi located in Edgecombecounty. Reeder, and the department, advocated for the state to create a decommissioning plan for solar farms as they age. The average life of a solarfacility is 25 years, and solar panels contain toxic components. Reeder also discussed the environmental and health impacts of solar power, highlightingthe loss of agricultural land and the emissions and toxins created by manufacturing panels.

The committee also heard from Interim Director of Government Affairs for the N.C. Sustainable Energy Association Maggie Clark. In her presentationto the committee, Clark provided sample decommissioning language as well as the decommissioning language in many large solar farm contracts in N.C. Clarkalso discussed the recycling techniques that are currently available, which can yield 90% recovery of glass and semiconductor materials used in PV modules.

The committee then held a discussion on storm water management measures with Reeder. The committee discussed whether post-construction storm watermanagement measures are necessary outside of certain, sensitive areas. In his presentationto the committee, Reeder discussed stormwater runoff control devices, which are currently required to receive 401 certification when a development projectimpacts any stream or wetland. Reeder explained the costs associated with post storm management and emphasized that other states, such as South Carolina,only require storm water management in sensitive regions, such as the coast.

Reeder also discussed riparian buffer requirements with the committee. In hispresentation, Reeder discussed the potential of reduction or elimination of riparian buffer requirements for intermittent streams. Riparian buffer managementstrategies are in place in the Neuse River Basin, Randleman Lake Watershed, Tar-Pamlico River Basin, Catawba River Basin, Goose Creek Watershed and JordanLake Watershed. Intermittent streams have flowing water periods during the wet season (winter-spring) but are normally dry during summer months. Thecommittee discussed options to reduce the requirements for riparian buffers on intermittent streams, such as more narrow buffers, or buffers of non-woodyvegetation.

The committee will reconvene March 9 at 9:00am.

General Government Oversight

The Joint Legislative General Government Oversight Committee met on Monday, February 8.

Chief Information Officer of the Department of Revenue (DOR) David Roseberry presented an overview of major IT projects completed between 2012 and 2015.

The projects completed included TIMS, a consolidation of all tax systems, Interactive Voice Response (IVR) use to reduce taxpayer call wait times, and amodernized e-file system, which allowed all individuals, corporations, estates, and trusts to file annual tax returns through the DOR website. Read moreabout these projects here.

Health & Human Services Oversight

The Joint Legislative Oversight Committee on Health & Human Services met on Tuesday, February 9 to discuss health several concerns to NorthCarolinians.

The committee was updated on the progress of two areas which were discussed at their last meeting: infant mortality and the recent review by the Children’sBureau of Child & Family Services.

N.C. has one of the highest infant mortality rates in the country. Many health organizations have been tasked with finding ways to reduce infant mortalityand improve birth outcomes. Strategies have included increasing breast feeding initiatives, providing IUDs to teens to reduce unwanted pregnancies, andserving rural health counties – many of which do not have access to an OBGYN.

The Governor and the legislature have invested over $25 million into foster care and in-home services in the past years. This figure will be doubled in2016. The recent review of child & family services by the Children’s Bureau recognized three focal areas that require improvement: safety, permanencyand family & child well-being. Groups across the state will continue to meet over the next 90 days to complete the performance improvement plan. Theplan will be the state’s guide for the next two years.

Director of the Division of Mental Health, Developmental Disabilities & Substance Abuse Services Courtney Cantrell, provided the committee with anoverviewof the 2016 State Medical Facilities Plan (SMFP) & Behavioral Health Beds. The SMFP provides projections of need to guide local planning for specifichealth care facilities and services to maximize safety and quality, access and value of services. Cantrell covered the state’s needs for psychiatricprogramming and beds according to the SMFP. Once the SMFP is published, the market responds to needs through the Certificate of Need (CON) process. In2016, the SMFP estimates that the state will need to fun 35 child/ adolescent and 36 adult psychiatric inpatient beds, and 28 child/ adolescent and 45adult substance abuse inpatient treatment beds.

Dr. Chris Conover, a research scholar at the Duke University Center for Health Policy & Inequalities, presented to the committee on the economicbenefits of less restrictive regulation of advanced practice registered nurses (APRNs). APRNs, he stated, are a large potential resource to the state, asthey can provide care at lower costs with equivalent outcomes to those of physicians. Conover stated that reducing the restrictions and regulations ofAPRNs would improve access, cost and quality of care. Read more about APRN regulationshere.

The Director of the Division of Social Services, Wayne Black, and Work First Policy Consultant, Sharon Moore, provided the committee with an implementationupdate on drug testing for Work First Program Assistance. The program provides parents with cash assistance and other services to help them become employedand move toward self-sufficiency. Negative drug tests are now required for families to continue receiving assistance through the Work First Program. SinceAugust 2015, 89 total tests have been performed, confirming positive results in 21 tests, 70 applicants missed their drug test appointments and withdrewtheir applications as a result. Each drug test performed has a total cost of $55, and screens for all major controlled substances. Read more about drugtesting for this programhere.

The committee will reconvene on March 8.

Justice and Public Safety Oversight

The Joint Legislative Oversight Committee on Justice and Public Safety met on Thursday, February 11 to discuss a variety of crime and public safetymeasures.

Director of the N.C. State Crime Laboratory (NCSCL) John Byrd presented the crime lab’sannual reportto the committee. In hispresentation, Byrd highlighted the mission of the lab, which is to be responsive to the needs of their customers, proficient, and efficient. The NCSCL has reducedturnaround time over the past year as well as reduced vacancy rate.

Director of the State Bureau of Investigations (SBI) B.W. Collier presented to the committee on N.C.’s public safety preparedness. SBI and Alcohol LawEnforcement (ALE) agents are highly trained to investigate crimes and ensure the safety of North Carolinians. In hispresentation, Collier highlighted three critical concerns of SBI: recruitment and retention of agents, outdated equipment and special funds for undercover operations.

Dr. Gary Junker, the Director of Behavioral Health, and Dr. Karen Steinour, the Health Services Compliance Director of the Department of Public SafetyDivision of Adult Correction and Juvenile Justice Prisons, presented an update on prison mental health. Approximately 14% of N.C.’s incarcerated populationrequires mental health services. The prison population has seen national increases in the incarceration of mentally ill inmates since the 1950s. This“ever-increasing population” drives the need for comprehensive mental health treatment services in jails, prisons and juvenile justice centers. Read moreabout mental health treatment strategies for the incarceratedhere.

The committee will reconvene in March.

Medicaid & NC Health Choice Oversight

The Joint Legislative Committee on Medicaid & N.C. Health Choice Oversight met on Tuesday, January 9.

As work on Medicaid reform continues to move forward, the newly-created Division of Health Benefits continues legislative oversight committee will continueto meet with stakeholders. Additionally, as mandated in last year’s H372, the Department of Health and Human Services will bring any recommendations forlegislation for the 2016 session, forward at the March meeting.

Presenting on Medicaid & N.C.Health Choice enrollment, Deputy Secretary of the Division of Medical Assistance (DMA) Dave Richard highlighted thatenrollment was relatively flat for the first half of fiscal-year 2015-2016, but has accelerated over the last few months. Changes at the federal, state andcounty levels are contributing the enrollment variability. Read more about Medicaid enrollmenthere.

DMA Finance Director Trey Sutton provided the committee with apresentationon the Medicaid & NC Health Choice budget. The Medicaid program is $181 million under budget as of December 2015, due to lower service consumptioncompared to last fiscal year, enrollment remaining under budget, and lower costs driven by changes in population profile.

The committee will reconvene on March 8.

NC State Lottery Oversight

The Joint Legislative Oversight Committee on N.C. Lottery met on Thursday, January 11, 2016. The committee heard from Executive Director of the N.C.Education Lottery Alice Garland, who provided an overview of the state lottery, which celebrates ten years in 2016. The lottery has become a $2 billionbusiness in the state and 26% of earnings support education.

The state lottery has seen consistent growth over the past ten years, and attributed their success to their gaming systems contracts, which they believeprovide the latest technology in the lottery industry.

Garland particularly highlighted how the recent Powerball phenomenon supported sales in the state. The 70-day Powerball run incited $101.2 million inticket sales, with $38.5 million going towards education earnings.

To read more about the N.C. state lottery, clickhere.

Program Evaluation Oversight

The Program Evaluation Oversight Committee met on Monday, February 8 to review and recommend various draft legislation requested by the committee.

The Overnight Respite Services draft legislation amends SB 291 to eliminate the PED follow-up study of theovernight respite services pilot program. The bill draft requires DHHS to report the status of the overnight respite licensure process to the jointlegislative oversight committee on HHS. Additionally, the bill draft directs the University of North Carolina’s School of Government to develop pilotstandards and the Office of State Budget Management to adopt and implement rules with which future General Assembly-directed pilot projects must comply.The committee adopted the draft legislation.

The State Real Property draft legislation was drafted in response to a 2015 report that found that the State’s real property portfolio is noteffectively managed by the Department of Administration. The draft legislation requires more active management of state-owned real property, as well as aprocess to identify surplus state-owned real property. The committee adopted the draft legislation.

Two bill drafts were proposed to address an August 2015 report which found the many employee insurance committees of individual state agencies anduniversities to be ineffective at managing the selection of Supplemental Insurance products. The first bill draft eliminates the separate structuresand favors the creation of a single committee that would oversee supplemental insurance for state employees through the Office of State Human Resources.The second bill draft would amend current statutes governing these committees with the intent of improving the current structure as opposed to centralizingall supplemental insurance offerings. Both pieces of legislation were removed from the day’s agenda after lengthy debate.

The Oversight of Service Contracts draft legislation, created in response to a report in January 2016 that agencies are not ensuring the best valuethrough the procurement of contracted services, would require state agencies to submit business cases for high-value service to the Department ofAdministration’s Division of Purchase and Contract. The department would be responsible for reviewing and approving cases in accordance with establishedcriteria. The committee adopted the draft legislation.

A December 2015 report determined that the economic development tiers system, currently used to rank N.C. counties, is not effective and does not providethe most distressed counties with maximum benefit. The Economic Development Tiers draft legislation would require gradual discontinuation of thetier system to be completed by 2018. The draft legislation would create a legislative commission charged with reexamining the strategies used to identifyand assist economically distressed communities.

Read more about these proposed bills here.

The committee will reconvene on March 14.

Revenue Laws Study Committee

The Revenue Laws Study committee met on Tuesday, March 9 to discuss a wide array of potential tax policy changes, including market based sourcing andraising the standard deduction. The committee also received a semi-annual report and discussed an update on the collection of sales tax on products sold onthe internet.

The use of market based sourcing would shift N.C.’s corporate income tax calculations to a market based approach. The purpose of this shift is toincentivize national service companies to invest and hire more in N.C. Under current law, income taxed at a service company is equal to the company’sincome producing activity within the state. The bill draft, as presented, would instead tax the revenue received from the N.C. market. N.C. would bejoining 23 other states if this draft legislation were to be passed. Read more about market based sourcinghere.

Barry Boardman with NCGA Fiscal Research discussed raising the standard deduction of personal income taxes, and the impact of doing so on taxpayers. Everytax return that files with the standard deduction would owe less tax as a result. An estimated 70-75,000 returns would no longer owe taxes. Reducing thestandard deduction would have the biggest impact on those earning $70,000 or less per year. Read more about reducing the standard deductionhere.

Greg Roney of the Legislative Analysis Division of NCGA presented on the collection of sales tax on products sold via the internet. The US Supreme Courtdetermined that retailers must have a physical presence before they can collect sales tax in Quill Corp v. North Dakota. The National Convention of StateLegislators (NCSL) has urged states to pass legislation that would challenge the Quill ruling. Clickhereto read more about internet sales tax.

The committee was also provided with the Semi Annual Report of Tax Compliance Initiatives and Results for July 1, 2015 – December 31, 2015. Clickhereto read the update.

The committee will reconvene on March 8.

A Look Ahead to Next Week


  • 2:00pm House Select Committee on Wildlife Resources


  • 9:30am Joint Legislative Administrative Procedure Oversight Committee, Subcommittee on Occupational Licensing Board Oversight
  • 12:30pm Joint Legislative Administrative Procedure Oversight Committee, Ad hoc Subcommittee on Dental Board Case


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