Legislature Focuses on Taxes, Incentive Programs in Busy Week

Members of the North Carolina General Assembly had a full schedule this week, considering bills on everything from taxes and job incentives to whether the governor should be elected on a team ticket. Both chambers are slated to return to action on Monday, in preparation for the April 30th crossover deadline.

Senate Panel Debates Jobs Incentives Plan

Republican leaders in the state Senate voiced concerns this week about North Carolina’s main jobs incentives package and said they plan to combine elements of competing House and Senate economic development plans into one proposal. The Senate Finance Committee meeting was the body’s first public discussion of House Bill 117, NC Competes Act, an economic development bill supported by Governor Pat McCrory (R-NC) and approved by the House in early March. The House package doubles the money allotted to the Job Development Investment Grant fund from $22.5 million for the current two-year period to over $45 million, allowing the McCrory Administration to promise millions to employers before the end of the year. For their part, Senate Republicans have filed a separate bill that raises the cap while changing the program to limit incentives in urban counties. They also filed legislation that would lower corporate income tax rates and change how the taxes are calculated through a method that benefits large manufacturers. Senators are expected to move forward on the proposals next week. 

Read HB 117 here

House Bill Would Let Cities/Towns Add to Sales Tax

A plan put forward by state House leaders this week would allow cities and towns to enact their own quarter-cent sales tax. House Bill 903, the County Tax Flexibility/Municipal Rev Opts, was introduced by Rep. Jason Saine (R-Lincoln) as part of an alternative effort to a Senate plan that would redistribute sales tax revenue based on population. In areas where both cities and counties take the option, the sales tax rate could rise by 0.5 cents per dollar of sales. HB 903 is but one response to the legislature’s decision last session to prohibit cities and towns from collecting a business privilege license tax. The elimination of the tax has left some cities with sizable budget holes and complaints about no other help from lawmakers. If the bill were to pass, city councils could add a quarter-cent to the tax rate that is applied to sales and services within the city limits. However, only a public hearing would be required. In the Senate, Republicans want to change how sales taxes are distributed among counties, and they’re considering an expanded list of services that would be subject to the tax. Legislators are expected to consider both proposals in the coming weeks.

Read HB 903 here

Senate Bill Would Shift Preservation Credits to Local Governments

The Senate State and Local Government Committee passed a bill this week that would allow local governments to make grants or loans toward the rehabilitation of historic structures. Senate Bill 472, Local Incentives for Historic Rehabilitation, now goes from the State and Local Government committee to the Finance committee. SB 472’s primary sponsors are Sens. Bob Rucho (R-Mecklenburg), and Andrew Brock (R-Davie). They propose to allow cities and counties to make grants or loans toward the rehabilitation of commercial and noncommercial historic structures, regardless of whether those structures were publicly or privately owned. The bill does not however, restore the widely popular historic preservation tax credits that the legislature allowed to expire last year. In the coming weeks, the biggest questions could be whether the measure can gain traction in the House after the Senate quickly buried House Bill 152, New Historic Preservation Tax Credit, which would have restored the tax credits albeit at a lower amount.

Read SB 472 here

House O.K.’s Tighter Checks on Migrant Workers

A bill that cleared the House on Thursday would compel thousands of additional North Carolina businesses to start using a federal system to check their employees’ immigration status. House Bill 318, Protect North Carolina Workers Act, would lower the threshold for using the E-Verify system from 25 employees to five. HB 318’s sponsor, Rep. George Cleveland (R-Onslow) said at a press conference this week that the measure would add about 100,500 employers statewide to the immigration-check system. “People in the United States illegally cost North Carolina $1.7 billion a year,” Cleveland said. “It's our responsibility to the citizens of our state to make sure that they are not subsidizing illegals.” The debate over the proposal at times became heated and drew accusations of intolerance from House Democrats. The bill now heads to the Senate.

Read HB 318 here

Senate Bill Limits Teacher Political Activity

North Carolina’s public school employees would be barred from campaigning for a political candidate during school hours or using school computers to campaign, under the terms of a bill passed by the Senate Education Committee this week. Senate Bill 480, Uniform Political Activity/Employees is being sponsored by Sen. Andy Wells (R-Catawba), who says that the measure simply applies the same rules now in effect for state employees to all public school employees throughout the state. Speaking to the press on Wednesday, Sen. Wells said “North Carolina now has one set of laws for state employees around political activities and 115 sets of policy rules for school board employees, this replaces that disparity with one uniform law for everyone.” However, Sen. Angela Bryant (D-Nash), called one section of the law "murky," because it prohibits the use of a person's position to support or oppose a candidate without placing any limits on that prohibition. Legislative staff said teachers a teacher's right to campaign on their own time wouldn't be affected. Meanwhile, Republican Sen. Jerry Tillman (R-Randolph), a former school administrator, added that most superintendents and principals could be considered to be on the job 24 hours a day, so restricting their ability to engage in political activity all the time would infringe on their First Amendment rights. 

Read SB 480 here

House Rejects Gubernatorial ‘Team Ticket’ Idea

House members rejected a proposal on Wednesday to put an initiative on the ballot that would have amended the North Carolina Constitution to allow candidates for governor and lieutenant governor to run as a ticket. House Bill 344, Gubernatorial Team Ticket, would have put a referendum on the ballot statewide in 2018 to require voters to select a "team" as governor and lieutenant governor, starting in the November 2020 general election. The measure would mirror the way presidents and vice presidents of the United States are currently elected. Under HB 344, voters would still be allowed to cast ballots in party primaries for lieutenant governor candidates, with the winner being paired with the victor of the gubernatorial primary. The bill’s sponsor, Rep. Bert Jones (R-Rockingham), said out of the 43 states that have lieutenant governors, 25 of them run on team tickets with their state’s gubernatorial nominees. In North Carolina, the positions were held by opposing parties in the early 1970s and the mid-to late 1980s, something that Rep. Gary Pendleton (R-Wake), said led to "one big cat fight." The final vote on HB 344 was 60-58, falling short of the two-thirds majority required under law to advance a proposal amending the constitution.

Read HB 344 here

Religious Freedom Bill Dead for the Session

Facing opposition from business leaders and fellow Republicans across North Carolina, House Speaker Tim Moore (R-Kings Mountain) announced this week that the House will not take up controversial “religious freedom” legislation, effectively killing it for this rest of the session. Speaking to reporters on Thursday, Speaker Moore said that House Bill 348, the NC Religious Freedom Act, was not going to move. “This bill in its current format, at the current time, is not the proper path to go for the citizens of North Carolina,” Moore said. The Speaker’s decision followed growing concern throughout the state about the proposal, which is similar to those that sparked widespread public backlash this year in Indiana and Arkansas, making national headlines. The measure had fomented opposition from businesses, including IBM and also had drawn the ire of Republican Gov. Pat McCrory, who expressed reservations at the idea of the bill moving forward. Asked how important such opposition was to his decision, Moore, who is in his first term as speaker, said “a good bit.” HB 348 has an identical version in the Senate, SB 550, that hasn’t had a hearing yet.

Read HB 348 here