NCGA Week in Review

August 2, 2019

Pardon Our Dust

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Another slow week for members of the North Carolina General Assembly with only a handful of committee meetings and little action taken on the countless bills still floating around. Senate lawmakers had a break from being down at the legislative building this week while House members still had to stick it out until wrapping up session late Wednesday evening. While multiple floor vote sessions were held, the House still did not attempt to hold a vote to override the Governor’s veto of the state budget proposal. 

Both the Senate and the House will reconvene on Monday, August 5, the Senate at 2:00PM and the House at 7:00PM. 

Rural Hospital Loans

One of President Pro Tempore Sen. Phil Berger’s (R-Rockingham) main agenda items this session slowly but surely made its way through a House Rules debate Wednesday afternoon. SB 681: Rur Hlth Care/Loc. Sales Tax Flex/Util. Acct. would establish a bridge loan fund in order to give low-interest loans to rural hospitals throughout the state that are struggling to keep the doors open. The loan would have to be approved by the Local Government Commission (LGC) and loan administrator, UNC Health Care. The loan would give rural hospitals the funding needed to update their facilities while not taking on any more debt themselves. UNC would be the signatory of the loan, leaving them responsible to repay it if the hospital does ultimately go under.

Supporters of the bill, including Randolph Health CEO Angela Orth who was present during the committee hearing, argue that this bill is exactly the type of policy decision the rural hospitals in North Carolina need to get back on their feet and continue to serve their communities. Opponents of the bill argue that the loan is only aimed at saving one hospital while there are many others in need of the same type aid. Leah Burns, a representative from the North Carolina Healthcare Association spoke to the groups position that there are other bills floating around from earlier this session that would better serve the interest of all of the state’s hospitals, pointing out that several of their member hospitals would considering applying for the loan as well. 

Members who oppose the bill also voiced their concerns that this would simply be putting a band aid on the real issues facing the state’s healthcare system, specifically rural hospitals, arguing that more affordable and comprehensive health insurance would help the state’s rural hospitals combat the financial problems they are facing. Members on both sides of the issue, and on both sides of the aisle, brought the discussion full circle, dancing around the elephant in the room from the budget stalemate: Medicaid expansion. 

Two other bills that have been held up in committee were tacked on to SB 681. The version of the bill passed through committee would give counties the ability to hold a referendum to charge a quarter-cent local sales tax that would be used for any public or public education purpose. The bill would also increase the number of counties, from 80 to 87, that are eligible for grants from the Utility Account. The next stop for SB 681 is the House floor. 

Milk Commission

The House Committee on Agriculture met to discuss a bill that would reestablish the North Carolina Milk Commission, which was dissolved back in 2004. SB 380: Restoration of NC Milk Commission would allow the Commission to classify milk based on its use or form, mediate disputes between producers and distributors, review the books and records of both producers and distributors, and would require all milk distributors to be licensed by the Commission. The Milk Commission would have the authority to set the price that must be paid by distributors to producers following an investigation and public hearing. The Commission would be allowed to set the maximum and minimum price of milk for both wholesale and retail sales, but would first have to determine that, without establishing a minimum price of milk, public health and welfare would be adversely impacted. The Milk Commission would be made up of 10 members: three appointed by the Governor, two appointed by the House, two by the Senate, and three by the Commissioner of Agriculture that would have to include a processor-distributor and a public member.

Rep. Jeffrey McNeely (R-Iredell) sponsored the bill, along with Rep. Pat Hurley (R-Randolph), working with local dairy farmers to come up with a version of the bill that they hope will save the milk industry and the family farms throughout North Carolina. The version of the Commission that was presented before the committee was modeled after the Virginia Milk Commission, a model that supporters feel has proven to be successful time after time. Other members in support of the bill argued that having the Commission act as a mediator for issues among milk producers and distributors was one of the most crucial parts of the legislation.

Other members expressed concerns related to the other provisions in the bill, including having to license all distributors, the potential litigation the state may face in light of the appointment structure, and the increase in costs placed on the consumer. Rep. Kelly Alexander (D-Mecklenburg) spoke about how his district of consumers, rather than farmers, would have a hard time with the impacts of this bill. Rep. Alexander’s sentiments were echoed by a representative for the NC Retail Merchants Association who argued that the burden of the increased cost would fall directly on the consumer, not the retailers. 

While some members of the committee felt as though the meeting provided them with enough information to take a vote on the bill, the chairs of the Agriculture committee decided that Wednesday’s meeting would be for information only. The committee plans to take up the bill again at a later date. 

Governor Veto

Governor Roy Cooper vetoed his third bill of the legislative session on Monday this week. SB 392: Various Charter School Changes made its way to Gov. Cooper’s desk after passing through the Senate 33-11 earlier this session and through the House in an 87-26 vote earlier in the month. SB 392 would have required background checks for charter school boards of directors, allowed the state superintendent to approve private activity bonds for charter school facilities, and outlined clear charter school renewal standards. The debate surrounding the bill stemmed mostly from the provision that would have lifted the cap on enrollment growth of virtual charter schools and would have given the State Board of Education the authority to allow the participating schools to increase their enrollment growth by more than 20%. The school would have to be in at least its fourth year of operation to be eligible for increased enrollment approval.

The two schools participating in the state’s virtual charter school pilot program have faced some pushback due to their low performance scores over the last few years. Supporters of the program and the bill argue that it is too soon to see the real, positive impact that the virtual programs are able to provide to students who may not have access to a quality education otherwise. In his veto document, Gov. Cooper cited the state’s virtual charter schools’ low performance scores as reason for concern and wants to keep the decision of whether to lift the enrollment cap to the discretion the State Board of Education.

Only two other bills have been vetoed by Gov. Cooper so far this session. SB 359: Born-Alive Abortion Survivors Protection Act, which failed an override attempt, and the budget bill, HB 966: 2019 Appropriations Act, which is still sitting on the House calendar. It is still up in the air whether or not the Senate will attempt to hold a vote to override the veto when they reconvene next week. 

Upcoming Legislative Meetings

Monday, August 5

2:00PM Senate: Session Convenes
3:00PM House: Rules, Calendar, and Operations
7:00PM House: Session Convenes

Tuesday, August 6

9:30AM Senate: Rules and Operations
10:00AM Senate: Judiciary
11:00AM House: Regulatory Reform