NCGA Week in Review

As the House and Senate near adjournment, both chambers are working hard towrap up their work for the long session. A budget deal was released earlierin the week before being passed by both chambers, it is now on its way tothe Governor, who has suggested he will veto the bill. Additionally,several major policy proposals were vetted in committees and on the Houseand Senate floor this week. It is likely that the legislature will concludetheir business within the coming weeks. The Senate has indicated that mostpolicy committees have been shut down, with the exception of Senate Rulesand Finance, and Speaker Tim Moore (R-Cleveland) has said he is hoping toadjourn by the 4^th of July.

Budget Update

SB 257: Appropriations Act of 2017passed its final hurdle before being sent to the Governor this week. Aftera negotiated budget deal was released on Monday night, the agreement waspassed by both chambers; the Senate voted 39-11 on Wednesday, while theHouse’s final vote was 77-38 on Thursday. Gov. Cooper publicly opposed theproposal this week, particularly criticizing cuts to his office and thebudget for the Attorney General, and many expect him to issue his fifthveto. Once the bill has been sent to the Governor, he has ten days toeither sign or veto the budget, and if a veto is issued, the bill willrequire approval from three-fifths of present legislators to be passed intolaw. SB 257 passed with a veto proof majority in both chambers, withsupport from nine Democrats, four in the Senate and five in the House. Abudget bill has only been vetoed twice in state history, in 2011 and 2012by Gov. Beverly Perdue; in both instances the veto was overridden.

For an in-depth review of the budget deal, follow thislink.

Charter School Changes

This week, a proposed committee substitute (PCS) was introduced in theSenate Committee on Education that would make a number of changes to statelaws regarding charter schools.HB 800: Various Changes to Charter School Laws, which is sponsored by Reps. John Bradford (R-Mecklenburg), Jason Saine(R-Lincoln), Scott Stone (R-Mecklenburg) and Holly Grange (R-New Hanover),would:

• Allow education or charter management organizations to employ school teachers. Current law provides that a charter school’s board is responsible for contracting employees.
• Expedite the timeline for the State Board of Education provide a decision on charter school fast-track replication applications within 120 days of submission.
• Grant priority enrollment to students who were enrolled in a different charter school in the state in the prior year.
• Modify laws regarding NC Virtual Public School (NCVPS) to repeal a requirement that all e-learning opportunities be consolidated under NCVPS.
• Direct the Office of Charter Schools to assist charter schools that wish to participate in the NC Pre-K program.

After receiving approval from two Senate committees this week, the bill isnow eligible to be heard on the Senate floor.

Health Care

HB 156: Medicaid PHP Licensure/ Food Svcs State Bldgs, which was amended by Sen. Ralph Hise (R-Mitchell) in the Senate HealthCare committee on Thursday, would create a Prepaid Health Plan (PHP)Licensure Act, governing the Department of Insurance’s licensure of PHPs aspart of Medicaid transformation. The bill would require a PHP to belicensed by the Department of Insurance and sets a number of requirementsfor those licenses, including instating an application fee not to exceed$2,000 and annual license fees not to exceed $5,000, and allowing theCommissioner of Insurance to take certain actions if the PHP is in ahazardous financial condition. Additionally, HB 156 allows the Departmentof Health and Human Services to operate or contract for the sale of food atDepartment of Administration and Department of Insurance properties. Thenet proceeds of those food sales would be used to support programs thatenable the blind and visually impaired through the Division of Services forthe Blind. The bill was given a favorable report and has been sent to theSenate Finance Committee.

HB 277: Naturopathic Study, which was amended by Sen. Joyce Krawiec (R-Forsyth) in the Senate HealthCare committee on Thursday, would create a study on the practice ofnaturopathic medicine in NC. The bill directs a workgroup to study approvednaturopathic medicine programs, the scope of practice for naturopathicdoctors, and whether the practice should constitute the practice ofmedicine under state law. The bill now heads to the Senate Committee onRules.

Revenue Laws

SB 628: Various Changes to Revenue Laws, sponsored by Sens. Jerry Tillman (R-Randolph), Andrew Brock (R-Davie),and Tommy Tucker (R-Union), would make a number of technical and conformingchanges to revenue laws including:

• Clarify that petroleum pipeline companies apportion income for corporate and franchise tax based on the number of barrel miles transported in this state, which codifies existing practice.
• Modifies a corporate income tax deduction for interest paid or accrued to affiliates.
• Clarify sales and use taxes on repairs, maintenance and installation services (RMI), and increases the percentage of RMI services that may be taxes as part of a capital improvement from 10% of the contract price to 25%.
• Allows the Secretary of Revenue to reduce a sales tax assessment involving the failure to properly collect sales and use tax on vacation rental linens by 90%.
• Provides a sales tax exemption from RMI services for aircrafts with a gross take-off weight of more than 2,000 pounds, currently, aircrafts between 9,000 and 15,000 pounds are exempt from the tax.

The bill has been referred to the House Finance Committee.

Regulatory Reform

Sponsored by Sens. Rick Gunn (R-Alamance), Dan Blue (D-Wake), and KathyHarrington (R-Gaston),SB 155: ABC Omnibus Legislationwould make various changes to state alcohol laws. The bill would allowcounties and cities to pass ordinance to allow for retail and restaurantalcohol sales before noon on Sunday. The legislation reduces therestriction on the number of bottles that can be purchased by an individualafter touring a distillery from one to five. The bill clarifies state lawto allow for the sale of crowlers, which are 32 ounce cans sealed in ataproom or restaurant, and creates a permitting process for distillerytasting events on and off-site. Also, it would also create a permittingprocess to auction high-end wine and spirits, and authorize home brewers toshare their products at exhibitions, fairs, and competitions. The proposedcommittee substitute to SB 155, which received a favorable report from theHouse Alcoholic Beverage Control Committee on Thursday, is a combination ofseveral other bills related to state alcohol laws: HB 500: ABC OmnibusLegislation, SB 155: Economic Job Growth for NC Distilleries, and SB 604:Homemade Alcoholic Beverage Tasting Permit. The bill was referred to theHouse Finance Committee. ​

Reps. Scott Stone (R-Mecklenburg), Jason Saine (R-Lincoln), John Bradford(R-Mecklenburg), and John Torbett (R-Gaston), have sponsored legislationaimed at streamlining the permitting process at the state and local level.HB 794: NC Permitting Efficiency Act of 2017would create across the board requirements for counties and cities to issuesite construction and land use permits. Also, the bill gives certainmunicipalities the authority permits related to State maintained roadswithin the municipality’s jurisdiction and extraterritorial jurisdiction.The bill passed the House on Thursday, 96-15.

SB 100: Aerial Adventure Financial Responsibility, sponsored by Sens. Wesley Meredith (R-Cumberland), Michael Lee (R-NewHanover), and Joel Ford (D-Mecklenburg), would require zip line andobstacle course operators to have at least $2,000,000 in aggregateliability insurance against the liability for injured persons or property.The bill would also instruct the Commissioner of Insurance to enforce thepolicy, and adopt rules of enforcement. Challenge or zip line courses onprivate property, not open for public use, or owned by the State would notbe required to maintain liability insurance. A PCS to the bill was adoptedon Tuesday by the House Committee on Insurance, which makes some clarifyingand technical changes. The bill has been sent to the House Committee onRegulatory Reform.

Sponsored by Reps. Stephen Ross (R-Alamance), Pat Hurley (R-Randolph),Jamie Boles (R-Moore), and John Torbett (R-Gaston),HB 617: Clarify Sale of Antique & Specialty Vehicleswould update the requirements for automobile dealers to sell certainvehicles. Initially the bill focused on existing dealerships holdingspecial events to sell antique and collector’s vehicles, but a PCSintroduced in the Senate Committee on Commerce and Insurance on Wednesdaywould allow certain electric car manufacturers to operate dealershipswithin the state. Current law prohibits motor vehicle manufacturers fromdirectly operating a vehicle dealership, but the PCS would create a carveout and allow a manufacturer to operate up to six dealerships within thestate so long as the manufacturer only produces electric cars and has neverhad an affiliation with another franchised dealership. The bill has notbeen voted out of the committee yet, if it receives a vote, it has a finalcommittee stop in Senate Rules before heading to the Senate floor for avote.