NCGA Week in Review

May 17, 2019

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In the wake of last week’s crossover deadline, the date by which the majority of bills must pass from one chamber to the other to still be considered, lawmakers moved through a series of committee meetings and floor votes. Senate legislators are working to wrap up their budget discussions, aiming to unveil their version of the state budget proposal by the end of the month.

Meanwhile, the results are in for the much anticipated 9th district special-election primary. State Sen. Dan Bishop (R-Mecklenburg) will be up against Democrat Dan McCready for the congressional seat in the September election. While both Dans began to prepare to duke it out for the D.C. seat, Rep. Chuck McGrady (R-Henderson) announced early this week that he will not be seeking reelection for his House seat next year. 

Both the House and the Senate will reconvene Monday, May 20th for floor vote sessions. The House will reconvene at 7:00PM and the Senate at 2:00PM.

ABC Modernization

A compromise bill to resolve many years of back and forth between craft breweries and state wholesalers has continued to make its way through the General Assembly. House members passed HB 363: Craft Beer Distribution & Modernization Act in a 104-8 vote in April. Now, the bill is up for discussion in the Senate, and has moved swiftly through the process. Wednesday, the bill was passed through the Senate Commerce committee before being heard in the Senate Rules committee Thursday morning. Both committees moved the bill through unanimously.

HB 363 is considered a compromise between the breweries and the wholesalers, which, in current law, are the only ones allowed to sell barrels of the craft beer if the brewer wants to sell more than 25,000 barrels per year. This dispute has resulted in 12 years of court battles, Minority House Leader Darren Jackson (D-Wake) noted during committee. The bill allows craft breweries to sell up to 50,000 barrels of the beverage independently and directly to the consumer without having to go through the wholesaler. Supporters believe this will help continue to grow small businesses in North Carolina while also ensuring their practices follow the alcohol laws of the State.

Tax Reductions

A bill that several Senate lawmakers are calling a “historic” tax package moved through committee this week, making it to the floor for a vote Thursday afternoon. Sen. Jerry Tillman (R- Randolph), one of the bill’s primary sponsors, has continuously stood by his bill, arguing that North Carolina’s increase in revenue has, in part, been because of the actions taken to cut taxes by Republican legislators.

Several of the provisions included in the bill were also included in the House’s version of the budget passed a few weeks prior. SB 622: Tax Reduction Act of 2019, a now 30-page proposal, includes several tax-law changes. The bill would eliminate the state’s corporate franchise tax through a five-year phase out schedule and establish market-based sourcing for income taxes for corporations who conduct multistate operations. Marketplace facilitators and marketplace sellers, such as companies like Amazon or eBay, who conduct business within North Carolina, even when operating remotely, would be required to collect and remit state sales and use taxes. Nonresident businesses and employees that are asked to come aid the state with disaster-related work would be exempt from both the corporate and individual income tax. Additionally, the bill would increase the standard deduction rate for personal income tax for North Carolina residents.

The bill was up for debate on the Senate floor Thursday, receiving a few amendments, and ultimately being stalled to remain on the Senate’s calendar for next week. Sen. Ralph Hise’s (R- Mitchell) amendment includes a provision that penalizes a company that comes to North Carolina to aid in disaster-related work and fails to comply with the notification process of the Department of Revenue.

Sen. Floyd McKissick (D-Durham) also proposed an amendment, which, after receiving a 25-20 vote, was tabled. The amendment would allow for an earned income tax credit for certain taxpayers. Sen. McKissick argued that if the franchise tax was truly a deterrent for companies coming to North Carolina and creating jobs, places like Research Triangle Park would not exist throughout the state.

House Redistricting

The saga that is redistricting in North Carolina continued this week as the House Redistricting committee met Thursday to discuss the court-ordered redrawing of several Wake County district lines. State lawmakers have been sent back to the drawing board once more in the case of the county’s 11 state House districts.

In North Carolina v. Covington, the 2017 U.S. Supreme Court case, justices ruled that two of the 11 state House districts in Wake County were unconstitutional gerrymanders and ordered the General Assembly to redraw the two districts in question. Lawmakers redrew those two districts and adjusted two others, redrawing a total of four state House districts within Wake County. Per the North Carolina State Constitution, unless otherwise ordered by a court, districts may only be drawn once every 10- years. Queue a series of additional lawsuits citing the violation of the state constitution.

A 3-judge Superior Court panel ordered the General Assembly to revert the four House districts that were redrawn in 2017, House district 36, 37, 40, and 41, back to their original 2011 shape. Now, lawmakers are tasked with the redraw of the other 7 state House districts. 

Rep. David Lewis (R-Harnett), chair of the House Redistricting committee, went over the criteria and timeline of the process with committee members Thursday. Members are to create draft plans using 2010 consensus population data and will have access to map drawing software. All plans must be submitted for drafting by June 14th in ordered to be considered by the committee. That gives members 3 weeks until their next meeting on June 6th to come up with their potential map plans. The court order states that the new districts must be in place by July 1st of this year.

Upcoming Legislative Meetings

Monday, May 20
1:00PM: Joint Legislative Program Evaluation Oversight Committee

2:00PM Senate: Session Convenes

3:00PM House: Rules, Calendar, and Operations

3:00PM Senate: Select Committee on Prison Safety

7:00PM House: Session Convenes

Tuesday, May 21

1:00PM House: Wildlife Resources

3:00PM House: Alcoholic Beverage Control

Wednesday, May 22

10:00AM Senate: Agriculture/Environment/Natural Resources

Thursday, May 23

10:00AM Senate: Agriculture/Environment/Natural Resources