North Carolina General Assembly Week in Review

April 28, 2023

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It has been a busy week at the North Carolina General Assembly, as both chambers passed dozens of bills, addressing a range of issues, including healthcare and public school funding. Many committee meetings ran for an hour or more, with in-depth discussions and debates over proposed legislation. As the legislature’s May 4 crossover deadline quickly approaches, lawmakers plan to keep up the rapid work pace. Senate budget leaders also continue to meet as they work towards the release of their budget proposal in the coming weeks. 

Hospital Service Corporations

This week, House lawmakers passed HB 346: Reorganization & Economic Development Act, which would allow hospital service corporations to restructure their corporate models so that they are controlled by a non-profit holding corporation. The bill would enable hospital service corporations to create a non-profit holding company that would become the parent the company and any of its current and future subsidiaries. Currently, there are only two hospital service corporations operating in North Carolina, Blue Cross Blue Shield and Delta Dental.

The House bill has garnered significant support with 56 sponsors, including Majority Leader Representative John Bell (R-Wayne) and Democratic Leader Representative Robert Reives (D-Chatham). A companion bill has also been filed in the Senate, with 36 state senators out of 50 sponsoring it.

Despite a long list of bipartisan bill cosponsors, lawmakers on both sides of the aisle and Republican Commissioner of Insurance Mike Causey have voiced concerns with the bill. The provisions in the bill that would allow hospital service corporations, like Blue Cross Blue Shield, to move surplus dollars into a new holding company have raised alarms as it could be used to buy healthcare companies and other subsidiaries or make investments that some argue are subject to far less regulatory oversight than the non-profit insurer currently receives.

Commissioner Causey held a press conference on Monday to voice his opposition to the bill, stating that “this legislation is missing many provisions that are necessary to protect the people, the policyholders.” Commissioner Causey also highlighted the lack of meaningful review of reorganization.

Representative Donny Lambeth (R-Forsyth), a former hospital administrator and chairman of the House Health Committee, initially expressed skepticism about the objectives of the bill. But on Thursday, during the floor vote on the bill, Rep. Lambeth told his fellow House members that although he had been a critic of the intent behind the bill, specifically that of Blue Cross Blue Shield, he believed that the restructuring could create the potential for a reduction in cost. Rep. Lambeth also disagreed with critics who asserted that the bill would raise premiums for policyholders, stating that he did not believe it would cause premiums to go up more than they are already going to.

The bill passed 86-26, with members of both parties voting in favor of the bill, and against it. HB 346 now heads to the Senate.

Driver Changes

North Carolina drivers could soon be facing significant changes on the road with the introduction and passage of two Senate bills. SB 157: Limited Provisional License Modification, which was introduced by Transportation leaders in the Senate, would change the waiting period for drivers going from a learner’s permit to a provisional license. Currently, drivers must wait 12 months, but SB 157 would reduce the wait time to 9 months. Additionally, non-family members would be allowed to ride with the driver during their provisional license period. The motivation behind this bill was the backlog at the DMV caused by the COVID-19 pandemic, which prevented many drivers from getting their licenses in a timely manner. Although most lawmakers voted for the bill, including a vote of 38-5 in the Senate, and 92-15 in the House, not all stakeholders are in agreement with the bill. Some lawmakers cited a study by the UNC Highway Safety Research Center which showed that shortening the permit requirement to six months during the pandemic contributed to a 12% increase in crashes for 16-year-olds statewide. Nonetheless, the bill now goes to Democratic Governor Roy Cooper for his signature or veto.

In addition to SB 157, another bill affecting North Carolina drivers also began gaining traction this week, as it passed the Senate Transportation Committee. SB 638: Move Over for Disabled Vehicles would expand on the current law that mandates motorists to move over for emergency, law enforcement, and utility vehicles that are stopped along the road. According to the bill, disabled vehicles would need to display “hazard warning lights, road flares, or other caution signals” when parked or standing within 12 feet of a road. The bill aims to provide more safety for drivers and passengers who are changing a tire, replacing a battery, or experiencing other car problems. The bill has received bipartisan support and is currently being reviewed by the Senate Rules Committee.

Opportunity Scholarships

North Carolina is set to expand the Opportunity Scholarship program, allowing any family in the state to receive taxpayer funding to attend a private school. The new legislation, SB 406: Choose Your School, Choose Your Future would eliminate income eligibility limits for scholarship recipients, making funds available to all students in the state. Under SB 406, which passed the Senate Education Committee and now goes to the Senate Appropriations Committee, a sliding scale system would be used to determine funding amounts. Lower-income families will receive the most money, with a family of four making up to 100% of the amount required to qualify for a free or reduced lunch receiving full voucher funding, equivalent to the average amount spent per student in public schools.

While many have praised the bill as a move towards equal opportunities in education, others are concerned about the potential harm to public schools. Democratic Governor Roy Cooper has criticized the legislation, saying that it will allow wealthy families to use taxpayer support to attend private schools and take billions of North Carolina tax money away from public schools. In a tweet last week, Governor Cooper called the proposal “worse than awful,” because it would give “billions of NC taxpayer dollars in vouchers that can be used by billionaires to send their kids to private schools.” Critics have argued that this could result in poor and middle-class children potentially attending private schools that are not as good as public schools.

The Opportunity Scholarship program was initially created in 2014 to help low-income families choose alternative routes for an education for their children. It has grown to serve 25,246 students, with last year’s enrollment being the largest expansion of North Carolina’s private school enrollment since 1971.

Supporters of the legislation, like one of the bill’s sponsors, Senator Michael Lee (R-New Hanover), argue that it is the government’s role to help children, not school systems, and that the program will provide families with greater choice in education. Lee also cited the concept of “backpack funding,” in which each student is given a certain amount of funding regardless of where they go to school.

companion bill was filed in the House last week and was co-sponsored by Speaker of the House Representative Tim Moore (R-Cleveland) and Representative Tricia Cotham (R-Mecklenburg) who recently switched from Democrat to Republican, giving House Republicans a supermajority.

School Curriculum

Republican legislators in North Carolina pushed for years to change the state’s public school curriculum and the standard course of study. This week, the House passed a bill that would further diminish the State Board of Education’s power, which is currently appointed by the Democratic Governor Roy Cooper, and transfer more of that authority to the General Assembly. HB 756: Standards Advisory Commission, proposes the creation of a new commission that would recommend what should be taught in North Carolina’s K-12 schools. 

Currently, the State Board of Education has the responsibility of voting on the state’s standard course of study. However, HB 756 would create a new commission, made up mostly of appointees by the General Assembly, to vote on the standard course of study. Democrats have raised concerns that this proposed commission would give too much power to the General Assembly, introducing political considerations into the process of education.

Republican legislators contended that the General Assembly does not have enough input into what is taught in schools. “Educating children by our Constitution is placed at the feet of this body right here, the North Carolina General Assembly,” said Representative John Torbett (R-Gaston), the bill’s primary sponsor. “It’s our responsibility and we shouldn’t shrug from that responsibility.”

The proposed commission would be required to include specific categories of individuals, such as superintendents, principals, teachers, curriculum specialists, parents, business members, and “at-large” members. Members of the commission would be appointed for four-year terms. However, any changes in standards or content adopted by the state board would have to be presented to the Joint Legislative Education Oversight Committee, and the changes would be blocked if legislation is filed within 30 days to delay the changes.

The bill passed the House this week by a vote of 71-43, largely along party lines. All Republicans voted in favor of the bill, while all but two Democrats opposed it. The bill now goes to the Senate.

Upcoming Legislative Meetings

Monday, May 1

3:00PM: House Judiciary 1
3:00PM: House Session
3:00PM: Senate Session

Tuesday, May 2

8:45AM: House Finance, Subcommittee on Occupancy Tax
9:00AM: House Finance
10:00AM: House Local Government
10:00AM: House Health
11:00AM: House Judiciary 2
11:00AM: House Pensions and Retirement
12:00PM: Senate State and Local Government
1:00PM: Senate Commerce and Insurance
1:00PM: House Education K-12
2:00PM: Senate Finance
2:00PM: House Families, Children and Aging Policy
3:00PM: House Judiciary 3
3:00PM: House Commerce

Wednesday, May 3

10:00AM: House Regulatory Reform
11:00AM: House State Government