NCGA Week in Review: End of Session Wrap Up

North Carolina legislators packed their bags and went home after adjourningthe 2017 long session on June 30. Hundreds of bills were considered duringthe five month long session, including the biennial budget, which waspassed before the end of the fiscal year, as well as a number of majorpolicy initiatives. This update is not a conclusive list of all majorpolicy initiatives passed during the long session. Be on the lookout forcomprehensive industry specific wrap ups from McGuireWoods Consulting inthe coming weeks.

2017 Long Session By the Numbers

Bills Filed: 1,609 – 925 in the House and 684 in the Senate.

Bills Pending on the Governor’s Desk: 108 – Governor Roy Cooper has 30 days to act on legislation; if he does notsign or veto a bill within that time, it goes into effect without hissignature.

Bills Signed by the Governor: 60 –Gov. Cooper has signed 27 bills into law since the General Assemblyadjourned.

Bills Not Signed by the Governor: 1 – Gov. Cooper has allowed one bill,SB 577: Consumer Credit/ Default Charges, to go into effect without his signature so far this year.

Bills Vetoed by the Governor: 7 – two since the General Assembly adjourned. To date, five vetoes havebeen overridden.

Session Laws: 113 – in addition to the 66 bills that required gubernatorial action, 47local bills were passed by the General Assembly, which do not need theGovernor’s signature.

Agriculture, Energy & Natural Resources

Session Law:

Sponsored by Sens. Brent Jackson (R-Sampson), Norman Sanderson (R-Pamlico)and Andrew Brock (R-Davie), the state’s annual farm act was signed by theGovernor on Wednesday. Among other provisions,SB 615: North Carolina Farm Act of 2017 would:

• Direct the Environmental Management Commission (EMC) to exempt facilities that store poultry manure to be used for renewable energy from odor rules.
• Clarify agritourism and the definition of a farm to state that a building or structure that is used for agritourism, such as wedding venues, is only exempt from local zoning and development regulations if it is location on a property that has met certain requirements for at least three years.
• Eliminate county authority to adopt zoning regulations governing hog farms.

On the Governor’s Desk:

Sponsored by Reps. Chris Millis (R-Pender) and John Bell (R-Wayne),HB 559: Outdoor Heritage Enhanced, expands Sunday hunting by:

• Removing restrictions on hunting with the use of firearms on private land to allow hunting of wild animals and upland game birds in all counties except for within 500 yards of a religious place of worship. Hunting with the use of firearms between 9:30 AM and 12:30 PM on Sundays, and the use of dogs to hunt deer with the use of firearms would remain unlawful.
• Allowing hunting of wild animals and upland game birds on public lands of the state that are managed for hunting on Sundays, subject to some restrictions.
• Prohibiting the hunting of migratory birds on Sunday unless authorized by proclamation or rules of the Wildlife Resources Commission.

The bill was presented to Gov. Cooper on June 30.

In the final days of session a bill that represented nearly a year ofstakeholder negotiations became a point of contention between the House andSenate.HB 589: Competitive Energy Solutions would rewrite the state’s renewable energy laws. While in the Senate, Sen.Harry Brown (R-Onslow) sponsored an amendment to enact a three year windmoratorium. Ultimately, the conference committee reached agreement on an18-month moratorium on the issuance of permits for wind projects.Additionally, the bill would:

• Allow Duke Energy to offer a limited community solar program.
• Allow third-party leasing for rooftop solar systems.
• Reinstate the green source rider program.
• Open a competitive bidding process for renewable energy projects.

HB 589 was sent to the Governor on June 30.

In Conference:

An omnibus environmental regulation bill that originated in the House,HB 56: Amend Environmental Laws, which is sponsored by Reps. Pat McElraft (R-Carteret) and LarryYarborough (R-Person) was sent to the Senate in late April. While in theSenate, a number of additions were made to the bill, including:

• Repealing a plastic bag ban in portions of Dare, Currituck and Hyde Counties.
• Amending several laws concerning riparian buffer zones, including the requirement for Jordan Lake to be cleared if local law enforcement determines there is a public safety issue, and excluding certain buffer zones from property tax bases.
• Revising laws concerning mining permits to require the Department of Environmental Quality to issue permits for a mining operation’s “life-of-site,” limit the amount of a bond the applicant must file to no more than $1 million and add an annual $400 operating fee per permit.
• Granting eminent domain power to private condemners for pipelines originating outside of NC.

The conference committee for HB 56 is being chaired by Rep. David Lewis(R-Harnett) and Sen. Andy Wells (R-Catawba) and a conference report for thebill would be eligible in either the August or September sessions if acompromise is reached. To view the full composition of the conferencecommittee, clickhere.

Initially,HB 770: Amend Environmental Laws 3, which is sponsored by Reps. Kyle Hall (R-Stokes), McElraft, Brian Turner(D-Buncombe) and Pricey Harrison (D-Guilford), would have required the EMCto adopt temporary rules to reflect modifications to requirements forassessment and corrective action in response to discharges and releasesfrom petroleum underground storage tanks. A proposed committee substituteintroduced in June added a number of amendments to the bill, includingprovisions that would:

• Authorize the Marine Fisheries Commission to adopt rules to provide for advanced siting and preapprovals of shellfish aquaculture leases.
• Direct the Division of Marine Fisheries to review its Fishery Management Plan for the River Herring regarding the validity and scientific basis for the status of the species as overfished.
• Prohibit local governments from enacting ordinances to prohibit the disposal of construction and demolition debris in a C&D landfill.

The conference committee for HB 770 is headed up by Rep. Kyle Hall and Sen.Brown and the bill is eligible for consideration in August or September. Toview the full conference committee, follow thislink.

Vetoed:

On June 30, Governor vetoedHB 576: Allow Aerosolization of Leachate, sponsored by Rep. Jimmy Dixon (R-Duplin), which would have allowed linedlandfills to dispose of leachate through aerosolization. In hisobjection message, Gov. Cooper stated his belief that scientists, not the legislature,should determine which technology can safely dispose of contaminatedliquids from landfills. The bill passed the House and Senate withveto-proof majorities and is eligible to be reconsidered in the August andSeptember sessions.

Education

Session Law:

HB 13: Class Size Requirement Changes, which is sponsored by Reps. Chuck McGrady (R-Henderson), Jeffrey Elmore(R-Wilkes), Chris Malone (R-Wake), and Kevin Corbin (R-Macon), would makechanges to the required class size for kindergarten through third grade.Under the law, average class sizes in an LEA for kindergarten through thirdgrade cannot exceed 20 students, and the maximum size for an individualclass cannot exceed 23 students. The bill was signed into law on April 27,and applies to the 2017-18 academic year.

On the Governor’s Desk:

Sponsored by Reps. Kyle Hall, Debra Conrad (R-Forsyth), Larry Bell(D-Sampson), and Elmer Floyd (D-Cumberland),HB 155: Omnibus Education Law Changes would make various changes to state education laws. The bill makesconforming adjustments to a recent North Carolina Supreme Court decisionregarding the repeal of career status for certain teachers, allowsassistant principals to conduct evaluations for beginning teachers,instructs the Superintendent of Public Instruction to develop to arecommended curriculum for computer science and computer related courses inK-12 schools, and creates a work group to study student mental health. Thebill becomes effective when it is signed into law. It was presented to theGovernor on June 28.

Sponsored by Reps. John Bradford (R-Mecklenburg), Jason Saine (R-Lincoln),Scott Stone (R-Mecklenburg), and Holly Grange (R-New Hanover)HB 800: Various Changes to Charter School Laws would make various changes to the laws governing charter schools in NorthCarolina. The bill would allow employees of an education or charter schoolmanagement organization to work as a teacher in a charter school, adjuststhe decision timeline for charter school replication to 120 days fromapplication submission, and modifies the definition of a material revisionof a school’s charter as it relates to enrollment growth. The legislationalso creates an enrollment priority category for students previouslyenrolled in another charter school, instructs the Office of Charter Schoolsto work with charter schools that would like to participate in the NC Pre-Kprogram, and modify the requirements of the North Carolina Virtual PublicSchool. The bill was sent to the Governor on June 29.

Finance & Economic Development

Session Laws:

Since gaining a majority in the legislature in 2011, the GOP has madesubstantial changes to the state’s tax code, with a focus on reducing thepersonal and corporate income tax rates, expanding the sales tax base, andreducing or eliminating tax credits. The final tax package inSB 257: Appropriations Act of 2017:

• Reduces the personal income tax rate from 5.499% to 5.25% in 2019 and reduces the corporate income tax rate from 3% to 2.5% in 2019.
• Increases the standard deduction to $20,000 (currently $17,500) if married, filing jointly; $15,000 (currently $14,000) for head of household; $10,000 (currently $8,750) for single; and $10,000 (currently $8,750) if married, filing separately.
• Expands the child deduction for people eligible for the federal child tax credit. Deduction ranges from $0 to $2,500.
• Lowers the franchise tax for s-corporations.
• Extends the renewable energy tax credit for facilities utilizing renewable biomass from January 1, 2017 to May 5, 2017.
• Exempts mill machinery from retail sales and use taxes and directs the Revenue Laws Study Committee to study ways to clarify the scope of the exemption.
• Does not implement market-based sourcing, as the Senate had proposed to do.

The legislature overrode Gov. Cooper’s veto of the budget on June 28.

In Conference:

Sponsored by Sens. Jerry Tillman (R-Randolph), Brock and Tommy Tucker(R-Union),SB 628: Various Changes to the Revenue Laws would make a number of technical and conforming changes to state revenuelaws. Changes made to the bill in the House include:

• Provides a sales tax exemption from RMI services for aircrafts with a gross take-off weight of more than 2,000 pounds.
• Allows the Secretary of Revenue to reduce a sales tax assessment that involves the failure to properly collect sales and use tax on charges for vacation linens by 90%.
• Provides a property tax exemption for mobile classrooms and modular units that are occupied by a school and used exclusively for educational purposes, regardless of ownership of the property.
• Eliminates a monthly deposit requirement for local governments if the money on hand is less than $250.

Former Sen. Brock, who has since resigned from the General Assembly, andRep. Bill Brawley (R-Mecklenburg) were appointed to chair the conferencecommittee, and SB 628 is eligible for consideration in the August andSeptember sessions. To view the full membership of the conferencecommittee, follow thislink.

Left on the Table:

Currently, no cities within North Carolina have the authority to levy alocal sales and use tax, though counties are authorized to do so. Sponsoredby Reps. Stephen Ross (R-Alamance) and Saine,HB 900: Safe Infrastructure & Low Property Tax Act would allow municipalities to levy a city-only tax, set at .25%, to producerevenue that can be invested in infrastructure and economic developmentprojects. The tax would have to be approved by voters through a referendum.HB 900 was heard in the House Finance Committee in mid-June and remainseligible for consideration in the short session.

Health Care & Insurance

Session Laws:

Gov. Cooper signedHB 243: Strengthen Opioid Misuse Prevention (STOP) Act into law on June 29. The bill, which is sponsored by sponsored by Reps.Greg Murphy (R-Pitt), Ted Davis (R-New Hanover), Malone and Craig Horn(R-Union), seeks to address the opioid addiction epidemic by controllingprescriptions of pain killers and strengthening treatment options foraddicted individuals. The legislation:

• Allows practitioners to prescribe opioid antagonists to local health departments, law enforcement agencies and organizations that promote scientifically proven ways of treating substance use disorders
• Requires physician assistants and nurse practitioners to consult with their supervising physician prior to prescribing Schedule II and III opioids if the patient is being treated in a pain management facility and treatment is expected to exceed a 30 day period.
• Requires prescribers to use electronic prescriptions when prescribing Schedule II and III opioids.
• Limits practitioners to prescribing a five-day supply of opioids for acute pain, and seven-days for post-surgical treatment.
• Requires hospice and palliative care providers who prescribe opioids for in-home treatment to provide their patients and families with safe disposal instructions.
• Clarifies that needle exchange programs may receive public funds, but cannot receive state funds.
• Strengthens the state’s Controlled Substances Reporting System by increasing regulations and oversight including requiring practitioners and pharmacists to review a 12-month patient history prior to signing or fulfilling an initial opioid prescription.

On the Governor’s Desk:

Sponsored by Reps. Donny Lambeth (R-Forsyth), Verla Insko (D-Orange),Murphy and Josh Dobson (R-McDowell),HB 283: DHHS Recommend Telemedicine Policywas sent to the Governor on June 29. The legislation would require theDepartment of Health and Human Services to study and recommend atelemedicine policy to the legislature by October 1.

In Conference:

WhenHB 403: Behavioral Health and Medicaid Modification, which is sponsored by Reps. Nelson Dollar (R-Wake), Lambeth, Dobson, andDonna White (R-Johnston), was sent to the Senate, the House had passedprovisions that would have modified certain requirements pertaining toLocal Managed Entities/ Managed Care Organizations (LME/MCOs), however,when it was in the Senate, major changes were made to the bill that would:

• Eliminate the LME/ MCO structure 18 months after the state’s Medicaid reform waiver is approved by the Centers for Medicare and Medicaid Services, which could be as soon at 2019.
• Make changes to the Medicaid transformation law, including the number of Provider-led entity (PLE) and Prepaid Health Plan (PHP) contracts allowed.
• Replace the requirement that PHPs must comply with Chapter 58, the state’s laws that regulate the insurance market, with the recently amended federal Medicaid managed care regulations.
• Require the Department of Health and Human Services (DHHS) to give the General Assembly notice prior to submitting or not submitting amendments to the state Medicaid State Plan, which are posted on the DHHS website.
• Make conforming changes to the process for Medicaid beneficiaries enrolled in a LME/ MCO to appeal or file grievances, to align with recently passed federal managed care regulations.

The bill is now in conference and is eligible to be considered in August orSeptember, if a compromise is reached. The conference committee is headedup by Rep. Dollar and Sen. Ralph Hise (R-Mitchell). To view the fullcomposition of the conference committee, clickhere.

Justice & Public Safety

Session Law:

Gov. Cooper signedSB 600: Britny’s Law: IPV Suicide on June 11. The bill, which is named in memory of a North Carolina womanwho was shot and killed by her boyfriend after a four-year long abusiverelationship, is sponsored by Sens. Chad Barefoot (R-Franklin), JeffJackson (D-Mecklenburg) and Danny Britt (R-Robeson). SB 600 allowsprosecutors to allege premeditation in murder cases if there is a historyof domestic violence committed against the same person. This allowsprosecutors to charge first-degree murder, which can carry a sentence oflife in prison or the death penalty, instead of a second-degree murdercharge.

On the Governor’s Desk:

Sponsored by Reps. Allen McNeill (R-Randolph), John Faircloth (R-Guilford),Pat Hurley (R-Randolph), and Rena Turner (R-Iredell),HB 138: Revise Gang Laws was sent to the Governor’s desk on June 28. The bill would make a number ofchanges to state gang laws, including:

• Modernize the definitions associated with the Gang Suppression Act.
• Create sentencing enhancement for any person convicted of a Class C through Class I felony when it is found that the offense was committed as part of criminal gang activity.

Sponsored by Sens. Shirley Randleman (R-Wilkes), Warren Daniel (R-Burke)and Brock,SB 548: Strengthen Human Trafficking Laws/ Studies was sent to the Governor on June 27. If enacted, the bill would:

• Require adult establishments, rest areas and welcome centers, businesses that sell alcohol, hospitals and employment or training centers to display public awareness signs on the issue of human trafficking, including the information for the National Human Trafficking Resource hotline.
• Prohibit the practice of massage therapy and bodywork in adult establishments.

Regulatory Reform

Session Law:

Signed into law on May 4,SB 131: Regulatory Reform Act of 2016-2017, which is sponsored by Sens. Wells, Bill Cook (R-Beaufort), and Sanderson,makes a number of changes to state laws, including:

• Clarifies that a franchisor is not the employer of a franchisee or employees of the franchisee for employment law claims under state law.
• Allows lessors of single family rental units to pass through charges for water and sewer utility service to tenants.
• Clarifies that DOT storm water requirements are applicable to state road construction undertaken by private parties.
• Provides that when DOT requires the relocation of utilities, including cable service, located in a right-of-way for which the utility owner contributed to the cost of acquisition, the Department must reimburse the utility owner for the cost of relocation.
• Directs DEQ to study (1) whether the size of riparian buffers required for intermittent streams should be adjusted and (2) under what circumstances units of local government should be allowed to exceed riparian buffer requirements mandated by the state and federal government.
• Prohibits DEQ from requiring the use of on-site storm water control measures to protect downstream water quality standards unless required to do so by State or federal law.

A full summary of SB 131 is availablehere.

SB 155: ABC Omnibus Legislation, sponsored by Sens. Rick Gunn (R-Alamance), Dan Blue (D-Wake), and KathyHarrington (R-Gaston), was signed into law on June 30. To many NorthCarolinians, SB 155 became known as the “brunch bill,” due to a provisionthat allows counties and cities to pass ordinances that allow retail andrestaurant alcohol sales beginning at 10 AM on Sundays. Since becoming law,ordinances have been passed by the city or town councils of Carrboro,Raleigh, Huntersville, Surf City, Carolina Beach and county commissionersin Henderson and Mecklenburg counties, but an ordinance in New Bern failed.

On the Governor’s Desk:

Sponsored by Rep. Saine, Torbett, and Michael Wray (D-Northampton),310: Wireless Communications Infrastructure Siting would:

• Amend state laws related to the regulation of wireless infrastructure siting and collocation of small wireless facilities on city poles in public rights-of-way.
• Allow local governments to assess fees on wireless providers for occupation of rights-of-way.
• Authorize cities to charge a $50 per pole per year fee for collocation of a small wireless facility on city utility poles.

HB 310 was sent to the Governor on June 29.

Vetoed:

HB 511: Game Nights/ Nonprofit Fund-Raiser sponsored by Reps. Jamie Boles (R-Moore), Marvin Lucas (D-Cumberland),and Saine, would allow non-profits to serve alcohol at fundraising eventswhere gambling is taken place. Commonly known as “casino nights,” theevents feature casino style games, where participants could win prizes orawards. Serving alcohol at these events is currently illegal, however,district attorneys rarely prosecute it. HB 511 was vetoed by Gov. Cooper onWednesday. In hisveto message, the Governor stated that the legislation could allow the video pokerindustry to “infiltrate our communities.” The bill has been sent back tothe legislature and is eligible to be reconsidered in the August orSeptember sessions.

In Conference:

When it was sent to the House, SB 16: Business & Agency Reg. Reform Act of 2017, which is sponsored by Sen. Wells, Tamara Barringer (R-Wake), and Daniel,included three agency requested provisions related to the Office ofAdministrative Hearings and the Rules Review Commission. While in theHouse, a number of provisions were added to the bill, including:

• Allowing bed and breakfasts to provide additional, optional meals to guests.
• Amending the requirements for health benefit plans covering small employers.
• Clarifying the staffing standards for dog day care services.
• Directing the Building Code Council to study electrical safety requirements for swimming pools.
• Requiring backup lights to be operational to pass a state automobile inspection.

The bill is now in conference and eligible for consideration in the Augustor September sessions. The conference committee is chaired by Rep. Lewis,and Sen. Trudy Wade (R-Guilford). To view the full conference committee,clickhere.

Left on the Table:

After passing the House on June 22,HB 794: NC Permitting Efficiency Act of 2017, is now in the Senate Rules Committee and eligible for consideration inthe short session. The bill, which is sponsored by Reps. Stone, Saine,Bradford and Torbett, would give delegate the authority to issueconstruction permits and approvals associated with state maintained roadsto municipalities with a population of 50,000 or more.

Transportation

On the Governor’s Desk:

Fully autonomous vehicles are not regulated under current state law.HB 469: Regulation of Fully Autonomous Vehicles, sponsored by Reps. Phil Shepherd (R-Onslow) and Torbett, would amendcurrent statute by defining autonomous vehicles and definitions related totheir function, such as “automatic driving system” and “fully autonomousvehicle.” Also, the bill would define how current motor vehicle laws wouldapply to a fully autonomous vehicle in operation. The bill was sent to theGovernor’s desk on June 28. If signed by the Governor, the bill goes intoeffect on December 1, 2017.

SB 413: Clarify Motor Vehicle Dealer Laws, sponsored by Sen. Brent Jackson (R-Duplin), would make various changes tocurrent law regulating motor vehicle dealers and manufacturers. SB 413would broaden an exemption from continuing education courses for motorvehicle dealers that are licensed to sell new and used vehicles, andexpands a grandfather provision for an incentive program from 2018 to 2022.The legislation would also modify the law related to warranty obligationsfor living facilities of recreational vehicles, and prevent dealers fromcharging certain shop and maintenance service fees unless notice is postedto the customer. The bill was presented to the Governor on June 27. Thebill becomes effective on January 1, 2018 if signed by the Governor.

Left on the Table:

Sponsored Reps. Ross, Pat Hurley (R-Randolph), Boles and Torbett,HB 617: Clarify Sale of Antique & Specialty Vehicles would 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 during thefinal days of session would allow certain electric car manufacturers tooperate dealerships within the state, would establish a new requirementthat most applicants for a new motor vehicle dealer license certify on theapplication that neither the applicant nor its affiliates aremanufacturers, and would expand a provision in existing law giving standingto certain dealer associations to file petitions before the Commissioner toseek relief for violations of the manufacturers licensing laws. Current lawprohibits motor vehicle manufacturers from directly operating a vehicledealership and gives limited standing to certain dealer associations. Thebill was brought up in committee for discussion but was not voted on beforeadjournment. The bill is eligible to be considered in the short session.

Sponsored by Reps. Jon Hardister (R-Guilford), Faircloth, John Blust(R-Guilford), and Cecil Brockman (D-Guilford), HB 802: Exempt Motorcoach Manufacturer & Distributor would have exempted man