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BUDGET CONFEREES
It appears there may be light at the end of the tunnel in the North Carolina General Assembly. The budget process enters the final stages as the House and Senate budget conferees were announced this week. Leadership in both the House and Senate suggest there is room for compromise and they expect to be wrapped up by early July.
House Budget Conferees:
Rep. Nelson Dollar, Chair
Rep. Linda Johnson, Chair
Rep. Bryan Holloway, Chair
Rep. Justin Burr, Chair
Rep. Marilyn Avila
Rep. Hugh Blackwell
Rep. Jamie Boles
Rep. William Brisson
Rep. Rayne Brown
Rep. George Cleveland
Rep. Leo Daughtry
Rep. John Faircloth
Rep. Mark Hollo
Rep. Craig Horn
Rep. Pat Hurley
Rep. Donny Lambeth
Rep. David Lewis
Rep. Pat McElraft
Rep. Chuck McGrady
Rep. Tim Moore
Rep. Tom Murry
Rep. Jason Saine
Rep. Phil Shepard
Rep. John Torbett
Rep. Roger West
Senate Budget Conferees:
Sen. Harry Brown, Chair
Sen. Tom Apodaca
Sen. Phil Berger
Sen. Andrew Brock
Sen. Kathy Harrington
Sen. Ralph Hise
Sen. Neal Hunt
Sen. Brent Jackson
Sen. Wesley Meredith
Sen. Louis Pate
Sen. Bill Rabon
Sen. Shirley Randleman
Sen. Bob Rucho
Sen. Dan Soucek
Sen. Jerry Tillman
Sen. Tommy Tucker
COMMERCE
H1031, North Carolina Economic Development Partnership Modifications, passed the Senate by a unanimous vote of 49-0. Governor Pat McCrory received the bill on his desk Wednesday and is expected to sign it into law soon. The legislation sets the framework for a new public-private partnership to take over job recruiting and marketing functions. The functions are currently housed under the NC Department of Commerce.
After the bill passed the Senate, Gov. McCrory released a statement saying, “This action takes another important step in our Carolina Comeback by allowing our state’s economic development efforts to be more focused on customer service and efficiency, as well as job retention and creation.”
Commerce employees are expected to transition this summer, moving from the public NC Department of Commerce into the nonprofit partnership, which will be based out of Raleigh. Commerce Secretary Sharon Decker said the Commerce Department is well-prepared for the transition and that it is one that will allow the state to “recruit business at the speed of business.”
REGULATORY REFORM
Lawmakers had mixed feelings about a number of regulatory reform measures confronting them this week in one omnibus bill. First appearing in Tuesday’s House Finance Committee, S493, 2014 Regulatory Reform Act, included a long list of legislation from autism health insurance coverage to clarifying the professional engineer exemption. While some supported the bill as a whole, others criticized the vast amount of unrelated laws thrown under one title. The bill is expected to appear on the floor of the House next week.
A second regulatory reform bill, dealing with environmental laws, passed the House on Thursday and heads to the Senate. S38, Amend Environmental Laws 2014, contains a list of updates and mostly minor changes, fixing state environmental regulations. The Senate passed a further-reaching proposal, but environmentalists prefer the House version. SB 38 would prohibit local governments from regulating fertilizer, exempt some old animal waste lagoons from environmental rules and roll back certain required air quality reporting. The House proposal reflects a bipartisan compromise among the Representatives, passing 105-12.
COAL ASH
After approval by the Senate Finance Committee on Thursday, S729, Coal Ash Management Act of 2014, goes before the full Senate on Tuesday, June 24th. The Coal Ash Management Act of 2014 sets out a plan for closure of 33 coal ash ponds that are located across the state. It requires ash to be removed from ponds at four power plants considered high priority due to their proximity to water. The remaining ponds will be closed according to the risk level lawmakers assign them.
Other aspects of the bill include the creation of a nine-member Coal Ash Management Commission to oversee the hazard ratings, closure plans and a regulatory fee that must be paid by the utility. The fee would raise more than $2 million a year toward the addition of 25 more positions in the NC Department of Energy and Natural Resources. Bill Sponsor Senator Tom Apodaca, R-Henderson, said the costs for cleanup “cannot be passed on to the consumer.”
MEDICAID REFORM
House leaders rolled out a Medicaid reform proposal on Thursday afternoon. In large part, the proposal embraces Governor McCrory’s plan for an overhaul of the Medicaid system. Thursday’s proposal, H1181, North Carolina Medicaid Modernization, makes significant changes in the state’s roughly $14 billion Medicaid program by moving from the current fee-for-service model to “full capitation.” Keeping in line with the Governor’s proposal, the House language allows for accountable care organizations to form, keeping the reform provider-driven.
In the Senate’s budget, it called for the NC Department of Health & Human Services to “cease any activities related to implementing Medicaid reform based on its proposed accountable care organization (ACO) model.” The Senate called for a full capitation model, signaling that the House’s proposal did give a gesture towards their plan, as well. The bill passed the House Health & Human Services Committee and now moves to the House Appropriations Committee.
NC LOTTERY
The House budget proposal relied in large part on lottery revenues to fund teacher raises by five percent, by doubling the North Carolina Education Lottery’s cap on their advertising budget from one-percent to two-percent of total revenues. The Lottery’s executive director, Alice Garland, told Senate lawmakers on Wednesday that the lottery cannot meet the $106 million target set by House lawmakers in their budget. Garland said that the $106 million target did not take into account the additional restrictions that would be placed on the Lottery by the House budget.
State legislative and executive budget officials are now meeting to develop a revised consensus on what the lottery could produce under various scenarios. They hope to publish it by Friday.
HEMP OIL EXTRACT
H1220, Hope 4 Haley and Friends, named after a five-year old girl who suffers from uncontrollable seizures, passed the House chamber on Thursday almost unanimously, with only two legislators voting against the measure. H1220 would legalize the use of CBD oil to treat intractable epilepsy, a severe form of epilepsy that is responsive to three or more treatment options.
The bill states that in order to a person to be able to use the oil, which resembles the appearance of cough syrup, would have to be a North Carolina resident and be examined by a neurologist, who would recommend the hemp extract oil. The patient would also have to pay a $50 fee to the NC Department of Health & Human Services to apply for a permit and submit their information to a database of persons using the oil for medicinal uses.
Rep. Pat McElraft, R-Carteret, spoke on the House floor about giving hope to these families who have been affected by the disorder. With affected families in the gallery, she said, “It’s been a long time coming for some special, precious children who are here today.” The legislation is now in the Senate.
Please contact the Raleigh McGuireWoods Consulting team if you have any questions or comments:
Harry Kaplan, Senior Vice-President
hkaplan@mwcllc.com
Jeff Barnhart, Senior Vice-President
jbarnhart@mwcllc.com
Franklin Freeman, Senior Vice-President
ffreeman@mwcllc.com
John Merritt, Senior Vice-President
jmerritt@mwcllc.com
Johnny Tillett, Senior Vice-President
jtillett@mwcllc.com
Kerri Burke, Vice-President
kburke@mwcllc.com
Bo Heath, Vice-President
dbheath@mwcllc.com
Sarah Wolfe, Research Assistant
swolfe@mwcllc.com
Katy Feinberg, Strategic Communications
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