NCGA Week in Review

The realities of a Republican led legislature and Democratic Governorbecame clearer this week as Gov. Roy Cooper addressed the legislature withhisstate-of-the-state speech and vetoed a bill for the first time. The legislature stayed busythis week as bill filing deadlines are quickly approaching. Billsconcerning bees, basketball, and body piercing caught the attention ofmany, as well as a more traditional legislative topic – tax reform.

Appointments and Confirmations

While the state awaits a judgment from the Superior Court, the Senate movedforward this week in confirming the Governor’s cabinet picks. This week,two of Gov. Cooper’s Secretariesreceived confirmation from the Senate. Erik Hooks was confirmed to serve as Secretary of theDepartment of Public Safety and Jim Trogdon was confirmed as the Secretaryof the Department of Transportation. Additionally, Senate committees issuedsubpoenas for acting Secretaries Machelle Sanders, Department ofAdministration, and Tony Copeland, Department of Commerce, to appear beforetheir respective confirmation committees.

Additionally, the Senate confirmedDarrell Allison, the Executive Director of Parents for Educational Freedom in NorthCarolina and NC Central University alumnus, to fill a vacancy on the UNCBoard of Governors.

Body Art Regulations

Though tattoo artists are required to hold permits and are subject toinspections, under current law piercers are held to no health and safetyregulations.

HB 250/SB 256: Body Art Regulation Changes would add body piercings, branding, scarification and subdermalimplantations to the definition of body art, along with tattooing. All bodyart professionals would be required to hold a permit with their localhealth board and would be subject to inspections. Supporters of the billargue that therisk of transmitting blood-borne pathogens necessitates additional regulations.

The House version of the bill, sponsored by Reps. Kevin Corbin (R-Macon),Bert Jones (R-Rockingham), and Greg Murphy (R-Pitt), passed the HouseCommittee on Health this week and has been referred to Finance. Sponsoredby Sens. Jim Davis (R-Macon) and Valerie Foushee (D-Orange), the Senateversion has been referred to the Committee on Rules and Operations of theSenate.

Governor Cooper Vetoes Partisan Court Bill

Gov. Cooper issued his first veto yesterday afternoon, objecting toHB 100: Restore Partisan Elections/ Sup. & Dist. Court, which would have made elections for district and superior court seatspartisan. In his message,Gov. Cooper cites his concerns that making the courts more partisan takesaway from the issues heard in the court and that voters should elect judgesbased upon experience and not party, and cites concerns about unaffiliatedcandidate having a difficult path getting on the ballot. Overriding a vetorequires the approval of three-fifths of both chambers. With 74 seats inthe House and 35 in the Senate, the GOP could override the Governor’s vetoif they choose to.

HB 2 & Basketball

Following the fallout of HB 2, the “bathroom bill,” the National CollegiateAthletic Association (NCAA) and Atlantic Coast Conference (ACC)moved championship tournaments and other events from NC last year citing concernsabout inclusion and civil-rights protections.

This week, Republican Reps. Mark Brody (Union), Chris Millis (Pender),Larry Yarborough (Person) and Beverly Boswell (Dare), called the NCAA andACC’s tax exempt status into question withHB 328: Athletic Associations Accountability Act. The bill would require the Speaker of the House and President Pro Temporeof the Senate to file a tax-exempt organization complaint with the InternalRevenue Service against both the NCAA and ACC. Primary bill sponsor Rep.Brody argues that the organizations have lobbied against HB 2 and as aresult are not eligible for tax-exempt status. The bill has been referredto the House Committee on Judiciary.

House & Senate Tackle Tax Reform

This week, both the House and Senate released their tax proposals and theSenate passed a bill that proposed to constitutionally cap the personalincome tax rate.

HB 356: Tax Reduction Act 2017 would:

• Increase the standard deduction for personal income taxes. The standard deduction would be raised from $17,500 to $18,500 for married couples filing jointly, with similar increases for other tax status categories. The legislature increased the standard deduction last year in a continued effort to reduce the tax burden.
• Exempt mill machinery from retail sales and use taxes.
• Simplify franchise tax calculation by eliminating a current requirement that a corporation determine its franchise tax base by calculating the appraised value of its real and tangible property and its total actual investment in tangible property.

HB 356, which is sponsored by Republican Reps. John Szoka (Cumberland),Jason Saine (Lincoln), Bill Brawley (Mecklenburg) and Susan Martin (Wilson)has been referred to the House Committee on Finance.

Though the Senate has not filed a bill yet, they havereleased the following proposal:

• Reducing personal and corporate income tax rates to 5.35% and 2.75% respectively.
• Increasing the standard deduction from $17,500 to $20,000 for a married couple filing jointly, with similar increases for other tax categories.
• Increasing the current tax credit for families with children that earn less than $120,000 annually.
• Increasing the amount of mortgage interest and property taxes that can be deducted from $20,000 to $22,000.
• Switching to market based sourcing for tax calculation, which relies on income received by customers in the state instead of employment and capital investments.

Senate Finance Chairman Tommy Tucker (R-Union) stated that the Senate planwould save businesses and individual taxpayers $1 billion in its firstyear. House Finance Chairman Jason Saine (R-Lincoln) reported that theHouse bill would save businesses $135.8 million per year, while individualtaxpayers would save $64.5 million in the 2017-18 fiscal year and $124million in the following year.

Additionally, by a 36-13 vote, the Senate passedSB 75: Const. Amd. – Max Income Tax Rate of 5.5% on Tuesday. Sponsored by Sens. Tommy Tucker (R-Union), Andrew Brock(R-Davie) and Jerry Tillman (R-Randolph), SB 75 would constitutionally capstate income tax rate at 5.5%. The bill has now been sent to the HouseCommittee on Finance.

Saving the Bees

As the plight of the bees garnered nationalmedia attention this week through a breakfast staple and its mascot, Reps. Pricey Harrison(D-Guilford), Chuck McGrady (R-Henderson), Grier Martin (D-Wake) andMitchell Setzer (R-Catawba), filedHB 363: The Pollinator Protection Act on Wednesday. The bill would allow neonicotinoids, a class of insecticideand the mostwidely used pesticide in the US, to be used only by farmers, licensed applicators andveterinarians and would ban the use by unlicensed home, garden andlandscape application, which currently constitutes 25% of their use.Neonicotinoids areassociated with the declining bee population worldwide – 44% of beehives in the USwere lost in 2015, which could have long term negative impacts on produceproduction capabilities. HB 363 has been referred to the House Committee onEnvironment.