Welcome to the Nexsen Pruet Weekly Legislative Update! The Nexsen Pruet Public Policy team provides attorneys and clients with a newsletter summarizing the week's activities and conveying the inner workings of the legislative process and state government in Raleigh. Please feel free to pass this along to your clients or other interested parties, email kcollins@nexsenpruet.com to be added to the list. 

Last Week

The week predominantly focused on the developing budget in the House. The bill filing deadline for budget bills and bills from study committees was last Tuesday. As a result of this deadline, numerous bills were introduced as lawmakers scrambled to beat the cutoff. The last bill filing deadline is for local bills and bills affecting state or local retirement systems. These must be filed by this Thursday. A list of types of bill with no filing deadline can be found here

Thursday, the Senate Judiciary I Committee met and gave Senate Bill 734, Statewide Standing Order/Opioid Antagonist, sponsored by Sen. Pate (R-Wayne) a favorable report. The bill is designed to help combat opioid overdoses by making it easier for individuals to access an opioid antagonist. The bill allows anyone to purchase naloxone hydrochloride, which is used to treat overdose from heroin and prescription pain killers, at a pharmacy under a standing order from the NC State Health Director. Expanding access to this drug is seen by many as a way to save countless lives as the rate of deaths caused by overdose in NC has skyrocketed in recent years. The bill is calendared for Tuesday on the Senate floor. 
NC police chief touts rehab, not jail, for opioid addicts – N&O 

Also Thursday, the House passed House Bill 958, Sheyenne’s Law, sponsored by Rep. Pittman (R-Cabarrus). The bill creates a felony for seriously injuring or killing someone while operating a boat under the influence. The bill is in response to the death of Sheyenne Marshall, who was knee boarding and hit by an impaired boater at Lake Norman last year. Currently, the penalty is a Class 2 misdemeanor. The bill passed unanimously in the House and will now go to the Senate. 
House raises penalties for drunk boating – WRAL 

Several bills were filed in the Senate last week affecting the State's taxing authority. Senate Bill 870 provides a one-year grace period regarding a new sales tax on labor, including maintenance, installation and repair services. Another portion of the proposed bill, similar to a proposal contained independently in Senate Bill 755, would exempt motor vehicle repairs from the tax on labor. Senate Bill 869, entitled Market Based Sourcing, makes changes to the allocation and apportionment of income for corporations which provide services. This is an attempt to have a similar single sales factor for services as is already provided for sales of goods and to help service providers with a large base in North Carolina. 
Senate bill would provide grace period for collecting new labor sales tax – Winston-Salem Journal 

Another notable piece of legislation, filed by Sen. Cook (R-Beaufort) and Sen. Brock (R-Davie), who is running for Congress in the crowded open-seat 13th district, would effectively kill renewable energy projects in NC.Senate Bill 843, entitled Renewable Energy Property Protection, among other restrictions, would require a 1.5 mile setback from an adjacent piece of property as well as a bond requirement for the permit holder for 15% of the property value for decommissioning projects. The bill was sent to the Senate Rules Committee. 

The General Assembly also appointed a new police chief following the retirement of longtime Chief Jeff Weaver. His Lieutenant and interim Chief Martin Brock was formally appointed to the post. 

Legislation in the News: 
Advocates push for more DWI interlocks – WRAL 
Committee wants to raise lawmaker reimbursements for mileage, travel – WRAL 
NC Senate bill would cut off funds to immigration ‘sanctuary cities’ – N&O 
Inland lawmaker proposes strict limits on coastal net fishing – Outer Banks Voice 
House seeks - again - to end ferry tolls – WRAL 
NC Rep. Chris Millis wants to redirect Connect NC bond funds – Star News
 

Bill that could help Durham-Orange light rail meets with resistance from rural lawmkaers – WRAL 
Immigrant advocates, some police say local IDs needed – WRAL 
Senate bill targets squatters occupying foreclosed homes – Winston-Salem Journal 
Ager pushing Medicaid expansion; odds against it in '16 – Citizen-Times 
$500 tuition? Big shift sought for NC higher ed – N&O

House bill 2

Last Monday, Governor McCrory announced that North Carolina was suing the United States Department of Justice for “radical interpretation” of the Civil Rights Act. The suit, filed in North Carolina’s Eastern District of federal court, was in response to the DOJ’s threats last week to withhold Title VII funding over House Bill 2 if there was no action by Monday. McCrory had asked the DOJ for an extension over the weekend, but was told that he would be given an extra week if he publicly agreed that the law was discriminatory. The suit ensures that federal funding would not be cut off until the courts weigh in. A few hours later, Speaker Moore (R-Cleveland) and Sen. Berger (R-Rockingham) filed a separate suit, which asked for a declaratory judgement on both Title VII and Title IX of the Civil Right Act. 
McCrory asks court to rule that HB2 is legal – N&O 
Charlotte mayor leaves all options on table for HB2 resolution – CBJ 
White House won’t strip funding from NC during ‘bathroom law’ suit – The Hill 

That same afternoon, U.S. Attorney General, Loretta Lynch, held a press conference to announce a “law enforcement action”. She announced that the DOJ was filing a separate suit, naming Governor McCrory, the NC Department of Public Safety and the UNC System as defendents, “seeking a court order declaring House Bill 2’s restroom restriction impermissibly discriminatory, as well as a statewide bar on its enforcement.” This suit was filed in the Middle District of North Carolina. It is anticipated that the suits will be considered in the near future.
U.S. Justice Department sues North Carolina over HB 2 response – CBJ 

The North Carolina Chamber of Commerce sent an email on Wednesday with its proposed solutions for House Bill 2. The recommendations include having the State’s employment anti-discrimination law “match the protections defined in federal statute” to apply to “all organizations and employers engaged in business or commerce in North Carolina.” The Chamber also recommends reinstating language that “claims for recovery of damages resulting from employment discrimination may be brought in the North Carolina courts.” They do however recommend additional hurdles that did not exist before House Bill 2, including: a 180 day stautue of limitations; requiring claims be sent to the North Carolina Department of Labor; and that all suits, at the request of either party, be heard in the North Carolina Business Court. It also would provide protections for private businesses to set their own policies, subject to state and federal laws. The Chamber’s CEO, Lew Ebert, also said that the changes should be implemented in the short session. To date there have been few legislative advocates of this proposal.
NC Chamber of Commerce Speaks Out About House Bill 2 – TWC News 

The Whitehouse said Tuesday that federal funding would not be cut while the issue was pending in court. However, in a classic “Friday news dump”, the Obama administration issued a sweeping threat to local school districts nationwide. The decree says that if public schools choose to prevent students from using the bathroom or locker room that matches the gender they identify with, they could face withheld federal or legal action. 
Obama administration won’t cut funds to North Carolina as House Bill 2 lawsuit proceeds – N&O 
Agencies to issue federal decree on transgender access to school restrooms – Charlotte Observer

Budget

House Appropriations Committees began reviewing the House’s proposed budget Thursday, and moved through their respective provisions with relative ease. For now, it is a relatively noncontroversial budget proposal, and very few amendments were offered in any of the individual Appropriations Committees. House Budget Chairman Rep. Dollar (R-Wake) has prescribed an aggressive timeline for the House to send a budget to the Senate, by Thursday of this week. House budget writers and staff spent several late nights leading up to Thursday in order to meet the initial deadline. The House is scheduled to hear the full budget in the House Finance and full House Appropriations Committees Tuesday, with floor votes expected Wednesday and Thursday. 

House and Senate leaders agreed two weeks ago on a spending figure of $22.225 Billion, which is a 2.26% spending increase to the budget for the 2015-16 fiscal year. With plans to give teachers an average 5% raise and with proposed bonuses for State employees, the agreed figure does not leave much room for extensive adjustments to last year’s budget. Raises for teachers and bonuses for State employees were not included in the education portion of the budget unveiled Thursday, but are expected to be added on Tuesday in Committee when the full budget is presented. 
Eliminating ferry tolls among changes in House budget proposals – WRAL 
Plans on North Carolina House budget proposal taking shape – N&O

In Other News

Attorneys for the State argued that a reasonable deadline for lawmakers to have redrawn State legislative maps in place, in time for the 2016 general election, has expired. The lawsuit charges that 28 legislative districts, 9 Senate districts and 19 House districts, are racial gerrymanders and therefore unconstitutional. The timeline suggests that a primary would need to be held by August 19th to allow local elections boards the necessary time to reassign voters and print ballots following the special June 7th primary election. A three-judge panel who heard the case last month has not given a timeline for when they might rule. 
Attorneys disagree on tight timelines if NC legislative maps are overturned – News & Record 

The Mecklenburg County GOP selected Rep. Scott Stone (R-Mecklenburg) to serve the remainder of former Rep. Jacqueline Schaffer’s (R-Mecklenburg) term in House District 105. Rep. Schaffer, who resigned her seat earlier this year, had already announced that she would not seek reelection and Rep. Stone recently won the Republican primary for the open seat. The district heavily favors a Republican and Rep. Stone is expected to retain the seat in November. 
Scott Stone appointed to vacant House seat – Charlotte Observer 

A handful of lobbyists anonymously claimed to WRAL that they feel threatened by key lawmakers or staff, for personally, or having clients, speaking out against House Bill 2. 
Lobbyists: Lawmakers turn up pressure to quiet HB2 opponents – WRAL