NCGA Week in Review: Spotlight on Interim Committees

As we begin a new year, the General Assembly is preparing to begin the next regular session. Many interim committees have been meeting since the conclusion of the short session last June and are beginning to wrap up their work and pass committee reports. Legislative recommendations and draft bills, which will be formally introduced when the long session begins, are being considered and approved by these committees. The General Assembly will convene next Wednesday, January 11, to adopt rules, and will then take an organizational break; they are likely to begin work later in the month or early in February.

This is part one of a two week spotlight series on interim committees.

ICYMI Political News

Newly Elected Officials Sworn In

Several officials elected in November took their oaths of office this week and began their duties. Democrat Roy Cooper was the first official to take his post as the state’s 75^th governor shortly after midnight on January 1. Additionally, Democrats Josh Stein and Mike Morgan and Republicans Mike Causey, Dale Folwell and Mark Johnson took their oaths as Attorney General, Associate Supreme Court Justice, Insurance Commissioner, State Treasurer and State Superintendent of Public Instruction respectively.

Some inaugural events, including the Governor’s official swearing in, parade in downtown Raleigh and an open house at the Executive Mansion have been cancelled due to an upcoming inclement weather while some smaller events will continue as scheduled. The Junior League announced this morning that their inaugural events, including the Council of State Reception, Governor’s Reception and Inaugural Ball will be moved to a combined event tonight 

Governor Cooper Makes Several Cabinet Appointments

Governor Cooper has begun to fill his cabinet, naming appointments to the Department of Environmental Quality (NCDEQ), Department of Transportation (NCDOT) and Department of Public Safety (DPS). Under a law passed in December’s special session, the appointees will have to be confirmed by the Senate.

On Tuesday the Governor named James Trogdon to head NCDOT. Trogdon has 25 years of experience in the transportation sector, including experience with NCDOT and the General Assembly.

Michael Regan, a former regional director of the Environmental Defense Fund with experience in the Environmental Protection Agency, was appointed to lead NCDEQ on Wednesday.

Yesterday, the Governor made his third Cabinet pick, naming Eric Hooks to lead DPS. Hooks is a veteran of the State Bureau of Investigation, where he formerly served as the assistant director and is currently a special agent charged with overseeing the inspections and compliance unit.  

The Governor has also asked the following people to serve as caretaker supervisors of the following departments until appointments are made:

• Britt Cobb, Department of Administration
• George Sherrill, Department of Commerce
• Bill Ross, Department of Environmental Quality
• Dempsey Benton, Department of Health and Human Services
• Kevin Cherry, Department of Natural and Cultural Resources
• Linda Hayes, Department of Public Safety
• Ron Penny, Department of Revenue
• Mike Holder, Department of Transportation

Governor Cooper’s Medicaid Expansion Plans

On Wednesday, Governor Cooper announced that he would take immediate executive action to expand Medicaid as outlined in the Affordable Care Act, however several caveats stand in the way of the Governor’s plan.

First, under state law passed in 2013 only the General Assembly has the authority to expand Medicaid. House and Senate leadership have sharply criticized the Governor while many members of the Democratic minority have applauded his efforts.

Additionally, the expansion of Medicaid would only be possible under the Affordable Care Act, which President-elect Trump has vowed to get rid of upon taking office in two weeks.

The Governor is expected to file an amendment to the state’s Medicaid plan with the federal Department of Health and Human Services today.

Legislative Districts

On Wednesday, three federal judges denied a request by state lawmakers to postpone an earlier order requiring the General Assembly to redraw state House and Senate maps and hold special elections this year. Lawmakers have also appealed the ruling to the US Supreme Court. If the Supreme Court does not overturn the ruling, the General Assembly will be required to redraw state House and Senate maps in the early months of the upcoming long session and hold special elections this year.

Election Law Blocked

Yesterday, a three-judge panel ruled that SB 4: Bi-Partisan Ethics, Elections & Court Reform, which was passed in the fourth special session of 2016 last month, shouldn’t take effect until the legality of the law can be confirmed by the courts. The panel has granted the Governor’s request for a 10-day block on the law, which he argues unconstitutionally shifts appointment powers to legislative leaders.

The law makes several reforms to state laws governing elections, lobbying, and judicial procedure. The legislation: 

• Creates a bi-partisan Board of Elections and Ethics Enforcement responsible for elections, lobbying compliance, campaign finance and ethics. The Board will be comprised of eight members, four Democrats and four Republicans, who will be appointed by the governor and the legislature.
• Clarifies that the State Board of Elections has no authority to alter state legislative and congressional districts.
• Requires that elections for the state Supreme Court and Court of Appeals will be partisan elections.
• Modifies the length of terms for Industrial Commissioners.
• Modifies appellate court review of certain cases.

SB 4 was passed by the General Assembly and signed by Governor Pat McCrory in December.

Spotlight on Interim Committees

Administrative Procedure Oversight

The Joint Legislative Administrative Procedure Oversight Committee held four meetings during the interim between the 2016 short session and the upcoming long session. The committee’s last meeting was held on Tuesday and approved the committee report then. 

During the interim, the committee heard recommendations from the Office of Administrative Hearing and the Rules Review Commission, resulting in five legislative proposals coming out of the committee. The following legislative proposals will be introduced for consideration in the long session:

Clarify Contested Case Policy: Would clarify the process to commence contested cases in administrative hearings.

Amend Periodic Review of Rules Process: Would eliminate the “without public interest” designation in the rules review process, which would require all rules to be reviewed before being readopted or eliminated.

Authorize Rule Technical Corrections: Would allow the Codifier of Rules to make certain corrections to rules including telephone number, website and physical addresses, typographical errors and the titles of organization and positions.

Amend Occupational Licensing Boards Statutes: Would respond to the decision in North Carolina State Board of Dental Examiners v. Federal Trade Commission.

Occupational Licensing Board Contact Info: Would require Occupational Licensing Boards to provide the Joint Legislative Administrative Procedure Oversight Committee with accurate contact information.

Building and Infrastructure Needs of the State

The Blue Ribbon Commission to Study the Building and Infrastructure Needs of the State has met four times since the end of the 2015-2016 short session. During their meetings, the committee heard from several state offices and outside stakeholders on the infrastructure needs of the state and how to fund necessary projects.

The study committee has issued several recommendations to the General Assembly in their final report focusing on three areas: needs and costs, process, and funding, their recommendations include:

• Establishing financial incentives for local governments when undertaking new building construction or water and sewer infrastructure improvement.
• Regularly funding the repairs and renovations of current state-owned property and to create a reserve to fund repair, renovation, operations and maintenance of all new construction.
• Recognizing the specific hardships faced by rural communities in funding capital improvement projects.
• Developing and utilizing a uniform system for all state agencies to weigh whether it is more cost efficient for the state to lease, renovate or construct buildings for a particular agency’s needs.

Education Strategy and Practices

The House Select Committee on Education Strategy and Practices held three two-day meetings during the legislative interim to discuss a myriad of education issues related to both K-12 public education and the community college and university systems in the state. The committee’s report includes fourteen findings and recommendations, including:

• Revising the school administrator salary schedule.
• Moving early childhood education programs from the Department of Health and Human Services to the Department of Public Instruction.
• For the General Assembly and State Board of Education to work in conjunction to create new policies that conform to the Every Student Succeeds Act.
• Improving data sharing between state agencies to improve driver’s education programs.
• Studying expanding the Read to Achieve initiative to include higher grade levels.
• Continuing funding of Advance Placement and International Baccalaureate exam fees.

Homeless Youth, Foster Care and Dependency

The Legislative Research Commission on Homeless Youth, Foster Care and Dependency held two meetings during the interim and was charged to study the issues facing homeless juveniles in NC as well as related issues pertaining to abuse, neglect, and dependency and foster care in the state. The committee made several recommendations in their report including:

• Examining the necessity of the rule requiring therapeutic foster parents to have income exclusive of the foster care stipend.
• Requiring foster care applications to be approved or denied within three months of the date of application.
• Continuing to study the issues facing youth homelessness and foster care.

Program Evaluation

The Joint Legislative Program Evaluation Oversight Committee held six meetings during the interim during which the committee examined common inefficiencies found in state departments, possible changes to the funding formula for NC Community Colleges and K-12 schools and potential reforms to the Medicaid program to increase efficiency and decrease fraud. The committee approved of eight bill drafts, which will be introduced in the long session:

Ed. Finance Reform Task Force: Would create a Task Force on Education Finance Reform to study and develop a weighted student formula funding model for K-12 public schools.

Office of State Auditor/ Corrective Action: Would require the State Auditor to follow up with an underperforming state agency and to report any failures to take corrective action to the General Assembly.

State Agencies Must Use eProcurement: Would implement the State Auditor’s recommendation for state agencies to be required to use the same electronic procurement and contract management systems.

Enhance Oversight of Service Contracts: Would enhance oversight of state service contracts, including implementing a contract management system and periodic review of certain contracts.

Study Unfunded Liability/ Retiree Health Fund: Would establish the Joint Legislative Committee on the Unfunded Liability of the Retiree Health Benefit Fund.

BOR/ Independent Staff/ Data Tracking: Would make several changes to the Board of Review in order to enhance the efficiency and independence of the Board.

Legislator Subsistence/ Travel Rates: Would increase the legislator subsistence allowance to match federal per diem rates.

SOG Pilot Project Standards: Would require the School of Government to develop standards for state agencies to use when implementing pilot projects. 

Regulatory and Rate Issues in Insurance

The Legislative Research Committee on Regulatory and Rate Issues in Insurance held two meetings during the interim. In their meetings, the committee examined numerous issues related to insurance including hearing from the Department of Insurance on the rate making appeals process and hearing presentations on the current insurance regulations for aerial and challenge courses, such as zip lines. The committee has not issued a final report of legislative recommendations.

Savings Reserve

The Legislative Research Commission on Savings Reserve Account held three committee meetings during the interim to discuss possible efforts to increase the state’s savings reserve. In their final report, the commission includes a legislative proposal that would require the General Assembly to transfer 15% of each fiscal year’s estimated growth in state tax revenues to the savings reserve account.

School Based Administrator Pay

The Joint Legislative Study Committee on School-Based Administrator Pay held three meetings during the interim where they heard from several stakeholders and state agencies on the current formulas for calculating school-based administrator pay and possible changes to the formula. The committee made the following recommendations in their final report:

• Replacing the current principal pay schedule.
• Providing bonuses for principals in low-wealth local education agencies (LEAs) who achieve a certain level of results.
• Eliminating the assistant principal schedule.
• For the General Assembly to consider a multi-year plan to raise school-based administrator pay.

Unemployment Insurance

The Joint Legislative Oversight Committee on Unemployment Insurance held three meetings during the interim to discuss the Unemployment Trust Fund Balance, disaster-related benefits and services in the wake of Hurricane Matthew, implementation of the Southeast Consortium Unemployment Insurance Benefits Initiative and the legislative requests from the Division of Employment Security. In their report, the committee includes one piece of draft legislation, Unemployment Insurance Technical Changes, which would make numerous technical changes to current unemployment insurance laws.