House Passes Budget

The state House passed their two-year, $22.1 billion spending proposal early this morning on a vote of 93-23 after a long week of debate that saw delays because of the sheer number of amendments to the bill. House Bill 97, 2015 Appropriations Act, the official title of the state budget, enjoyed bi-partisan support in this morning’s 1:15 a.m. vote. The budget package saw about 40 amendments on the floor alone, and 62 amendments in the House Appropriations committee on Monday. Overall, the budget includes an increase in General Fund spending of $1.3 billion, a 6.3 percent increase, compared to a 2 percent increase in the governor’s recommended budget. This number reflects the projected revenue increase of $400 million announced earlier this month.

Highlights of the new spending plan include an increase in K-12 school spending by $269 million, decreased cuts to the UNC system budget, a two percent raise for the majority of state employees, a cost of living adjustment for state retirees, tax credits for solar energy projects and historic preservation, as well as tax credits for the film industry. Though the proposal does not include any changes in income tax rates, it does restore a sought-after deduction for medical expenses.

The budget package was amended numerous times on the floor of the House last night through a marathon round of amendments. Representative Yvonne Holley (D-Wake) sponsored an amendment to provide $1 million to help small convenience stores buy refrigerators and other equipment to allow them to provide fresh fruit, it passed 67-49. Representative Paul Stam (R-Wake) sponsored an amendment to give an additional $15,000 of the $50,000 owed to confirmed eugenics victims by July 1st, passing 114-0. Rep. Stam also sponsored an amendment which would have eliminated the proposed venture capital fund, though it failed 39-75. Additionally, Representative Bobbie Richardson (D-Franklin) sponsored an amendment that removed language which required the Department of Revenue to close its call center in Rocky Mount, NC by 2017, which would have resulted in the loss of 70 jobs. The amendment passed on a close vote of 59-57. In total, the House passed over 40 floor amendments to the state budget last night, rejecting 13.The House budget now heads to the Senate, where senators will draft their own version of the bill.

To review summaries of each subsection of the budget, read last week’s Week in Review here

House Budget Finance Package

The House Finance committee debated key tax and economic development provisions of the budget this week, eventually approving the measure after two hours of debate on a close vote of 19-16. Discussions centered around expanding or contracting a series of tax breaks that some Republicans said went too far. Key provisions included within the budget draft were: tax credits for solar energy projects, extended for up to two years, renewable energy tax credits extended for up to four years, an extension in the tax credit for research and development for four years, and an extension in the medical expenses tax deduction. Also included in the package was a tax break on aircraft service contracts beginning in 2017, a tax credit for the preservation of historic buildings, $40 million for the creation of a venture capital fund in the hopes of spurring job growth, and $60 million in film incentives.

Most of these provisions ended up in the final draft of the budget. Some parts of the package, however, were amended in the House Rules committee on Thursday afternoon, as committee members eliminated the research and development tax credit, decreased film grants from $60 million to $40 million, provided an additional $500,000 for disability scholarships, of the governor’s $1.2 million budget request, and changed the extension of the renewable energy credit from 2020 to 2018, in addition to decreasing the credit from 35% to 15%.

As originally written, the budget included a 50 percent increase in Department of Motor Vehicle fees for everything from learner’s permits to truck titles. That increase was amended in the Rules committee to 30 percent, after outcry from House members who felt it was simply too high. Under the new plan, the price of an eight year driver’s license would increase from $32 to $41, while the price of an annual car registration would increase from $28 to $36. The increase in fees is the first since 2005.

View a summary chart of the Finance provisions here

Renewable Energy Freeze On Fast Track to Clear Senate

An ambiguous voice vote Wednesday sent to the full Senate a measure that would freeze North Carolina's renewable energy standard. The renewable energy standard, first established in 2007, requires utilities to get increasing amounts of energy from solar, wind or organic fuels, reaching 12.5 percent of their sales by 2021. The move to freeze the standard is supported by House Majority Leader Mike Hager (R-Rutherford) and has already cleared the House. Rep. Hager's proposal is to freeze that target at the current six percent and would also keep the cap on annual costs that utilities can charge residential customers at $12 a year, instead of the scheduled increase to $34.

In the Senate, it was attached to House Bill 332, Energy Policy Amendments, which is an economic development bill on natural gas. Senator Bob Rucho (R-Mecklenburg), chair of the Senate Finance committee, would not allow debate or public comment on the green-energy part of the bill and declared a favorable report after a voice vote that dissenters said favored "no" votes. Sen. Rucho had previously refused Democrats' request that votes be counted, leading even a few Republican senators to say they were upset at the way Sen. Rucho had handled it. According to the North Carolina Sustainable Energy Association, more than $2.6 billion has been invested in green-energy projects in the state since 2008.

Read H332 here

House Bill 405, “Property Protection Act” Heads to the Governor

House Bill 405, Property Protection Act, passed the Senate on Monday night by a vote of 32-13 and will now head to the desk of Governor Pat McCrory (R-NC) for final approval. The measure had previously passed the House with a vote of 100-8. The bill is aimed at protecting property owners (employers) by enacting civil penalties for people who take or record information that “substantially interferes” with the rights of the property owner. The proposal would prevent anyone from placing an unattended camera or other surveillance device in a business.

Although it has mainly drawn opposition from animal welfare advocates because it would prevent private undercover investigations at farms, in its present language the measure would include any business. There is some disagreement about whether the state's whistleblower law would protect workers who discover illegal practices. A court ruling has held that reporters who go undercover to expose workplace abuses are not protected by the First Amendment and can be held liable in a lawsuit. The agricultural industry has responded in recent years by supporting legislation that some call "ag-gag" bills, meant to muzzle undercover investigations. Despite this, the bill enjoys strong support from many in the business community as a common sense solution to a serious problem. However, the Humane Society of the U.S. has purchased air time in Raleigh to run an advertisement calling on Gov. McCrory to veto the measure. H405 went to his desk Wednesday, and he has ten days to either veto, sign or let it become law without his signature.

Read H405 here

N.C. Judge Temporarily Halts Fracking/Shale Permits

A Wake County judge this week barred the N.C. Mining and Energy Commission, the commission in charge of regulating fracking in North Carolina, from issuing any further drilling permits pending the outcome of a lawsuit between Gov. McCrory and legislative leaders. On Wednesday, Wake County Superior Court Judge Donald Stephens issued an order that had the effect of re-establishing a statewide moratorium on fracking. Judge Stevens did, however, grant a motion by some of the defendants to put the case on hold until the resolution of Gov. McCrory's lawsuit against General Assembly leaders challenging the body’s authority to appoint a majority of members to commissions, specifically the Coal Ash Management Commission. The governor’s lawsuit is still pending in the courts.

Speaking to reporters on Wednesday afternoon, North Carolina Department of Energy and Natural Resources (DENR) spokeswoman Crystal Feldman said of the decision: "DENR opposed the request for an injunction because we believe the rules promulgated by the Mining and Energy Commission will remain valid even if the court rules that the appointments to the commission are unconstitutional.” North Carolina’s state-wide fracking moratorium was lifted in mid-March.