As the House and Senate near adjournment, both chambers are working hard to wrap up their work for the long session. A budget deal was released earlier in the week before being passed by both chambers, it is now on its way to the Governor, who has suggested he will veto the bill. Additionally, several major policy proposals were vetted in committees and on the House and Senate floor this week. It is likely that the legislature will conclude their business within the coming weeks. The Senate has indicated that most policy committees have been shut down, with the exception of Senate Rules and Finance, and Speaker Tim Moore (R-Cleveland) has said he is hoping to adjourn by the 4th of July.

Budget Update

SB 257: Appropriations Act of 2017 passed its final hurdle before being sent to the Governor this week. After a negotiated budget deal was released on Monday night, the agreement was passed by both chambers; the Senate voted 39-11 on Wednesday, while the House’s final vote was 77-38 on Thursday. Gov. Cooper publicly opposed the proposal this week, particularly criticizing cuts to his office and the budget for the Attorney General, and many expect him to issue his fifth veto. Once the bill has been sent to the Governor, he has ten days to either sign or veto the budget, and if a veto is issued, the bill will require approval from three-fifths of present legislators to be passed into law. SB 257 passed with a veto proof majority in both chambers, with support from nine Democrats, four in the Senate and five in the House. A budget bill has only been vetoed twice in state history, in 2011 and 2012 by Gov. Beverly Perdue; in both instances the veto was overridden.

For an in-depth review of the budget deal, follow this link.

Charter School Changes

This week, a proposed committee substitute (PCS) was introduced in the Senate Committee on Education that would make a number of changes to state laws regarding charter schools. HB 800: Various Changes to Charter School Laws, which is sponsored by Reps. John Bradford (R-Mecklenburg), Jason Saine (R-Lincoln), Scott Stone (R-Mecklenburg) and Holly Grange (R-New Hanover), would:

  • Allow education or charter management organizations to employ school teachers. Current law provides that a charter school’s board is responsible for contracting employees.
  • Expedite the timeline for the State Board of Education provide a decision on charter school fast-track replication applications within 120 days of submission.
  • Grant priority enrollment to students who were enrolled in a different charter school in the state in the prior year.
  • Modify laws regarding NC Virtual Public School (NCVPS) to repeal a requirement that all e-learning opportunities be consolidated under NCVPS.
  • Direct the Office of Charter Schools to assist charter schools that wish to participate in the NC Pre-K program.

After receiving approval from two Senate committees this week, the bill is now eligible to be heard on the Senate floor.

Health Care

HB 156: Medicaid PHP Licensure/ Food Svcs State Bldgs, which was amended by Sen. Ralph Hise (R-Mitchell) in the Senate Health Care committee on Thursday, would create a Prepaid Health Plan (PHP) Licensure Act, governing the Department of Insurance’s licensure of PHPs as part of Medicaid transformation. The bill would require a PHP to be licensed by the Department of Insurance and sets a number of requirements for those licenses, including instating an application fee not to exceed $2,000 and annual license fees not to exceed $5,000, and allowing the Commissioner of Insurance to take certain actions if the PHP is in a hazardous financial condition. Additionally, HB 156 allows the Department of Health and Human Services to operate or contract for the sale of food at Department of Administration and Department of Insurance properties. The net proceeds of those food sales would be used to support programs that enable the blind and visually impaired through the Division of Services for the Blind. The bill was given a favorable report and has been sent to the Senate Finance Committee.

HB 277: Naturopathic Study, which was amended by Sen. Joyce Krawiec (R-Forsyth) in the Senate Health Care committee on Thursday, would create a study on the practice of naturopathic medicine in NC. The bill directs a workgroup to study approved naturopathic medicine programs, the scope of practice for naturopathic doctors, and whether the practice should constitute the practice of medicine under state law. The bill now heads to the Senate Committee on Rules.

Revenue Laws

SB 628: Various Changes to Revenue Laws , sponsored by Sens. Jerry Tillman (R-Randolph), Andrew Brock (R-Davie), and Tommy Tucker (R-Union), would make a number of technical and conforming changes to revenue laws including:

  • Clarify that petroleum pipeline companies apportion income for corporate and franchise tax based on the number of barrel miles transported in this state, which codifies existing practice.
  • Modifies a corporate income tax deduction for interest paid or accrued to affiliates.
  • Clarify sales and use taxes on repairs, maintenance and installation services (RMI), and increases the percentage of RMI services that may be taxes as part of a capital improvement from 10% of the contract price to 25%.
  • Allows the Secretary of Revenue to reduce a sales tax assessment involving the failure to properly collect sales and use tax on vacation rental linens by 90%.
  • Provides a sales tax exemption from RMI services for aircrafts with a gross take-off weight of more than 2,000 pounds, currently, aircrafts between 9,000 and 15,000 pounds are exempt from the tax.

The bill has been referred to the House Finance Committee.

Regulatory Reform

Sponsored by Sens. Rick Gunn (R-Alamance), Dan Blue (D-Wake), and Kathy Harrington (R-Gaston), SB 155: ABC Omnibus Legislation would make various changes to state alcohol laws. The bill would allow counties and cities to pass ordinance to allow for retail and restaurant alcohol sales before noon on Sunday. The legislation reduces the restriction on the number of bottles that can be purchased by an individual after touring a distillery from one to five. The bill clarifies state law to allow for the sale of crowlers, which are 32 ounce cans sealed in a taproom or restaurant, and creates a permitting process for distillery tasting events on and off-site. Also, it would also create a permitting process to auction high-end wine and spirits, and authorize home brewers to share their products at exhibitions, fairs, and competitions. The proposed committee substitute to SB 155, which received a favorable report from the House Alcoholic Beverage Control Committee on Thursday, is a combination of several other bills related to state alcohol laws: HB 500: ABC Omnibus Legislation, SB 155: Economic Job Growth for NC Distilleries, and SB 604: Homemade Alcoholic Beverage Tasting Permit. The bill was referred to the House Finance Committee. ​

Reps. Scott Stone (R-Mecklenburg), Jason Saine (R-Lincoln), John Bradford (R-Mecklenburg), and John Torbett (R-Gaston), have sponsored legislation aimed at streamlining the permitting process at the state and local level. HB 794: NC Permitting Efficiency Act of 2017 would create across the board requirements for counties and cities to issue site construction and land use permits. Also, the bill gives certain municipalities the authority permits related to State maintained roads within the municipality’s jurisdiction and extraterritorial jurisdiction. The bill passed the House on Thursday, 96-15.

SB 100: Aerial Adventure Financial Responsibility, sponsored by Sens. Wesley Meredith (R-Cumberland), Michael Lee (R-New Hanover), and Joel Ford (D-Mecklenburg), would require zip line and obstacle course operators to have at least $2,000,000 in aggregate liability insurance against the liability for injured persons or property. The bill would also instruct the Commissioner of Insurance to enforce the policy, and adopt rules of enforcement. Challenge or zip line courses on private property, not open for public use, or owned by the State would not be required to maintain liability insurance. A PCS to the bill was adopted on Tuesday by the House Committee on Insurance, which makes some clarifying and technical changes. The bill has been sent to the House Committee on Regulatory Reform.

Sponsored by Reps. Stephen Ross (R-Alamance), Pat Hurley (R-Randolph), Jamie Boles (R-Moore), and John Torbett (R-Gaston), HB 617: Clarify Sale of Antique & Specialty Vehicles would update the requirements for automobile dealers to sell certain vehicles. Initially the bill focused on existing dealerships holding special events to sell antique and collector’s vehicles, but a PCS introduced in the Senate Committee on Commerce and Insurance on Wednesday would allow certain electric car manufacturers to operate dealerships within the state. Current law prohibits motor vehicle manufacturers from directly operating a vehicle dealership, but the PCS would create a carve out and allow a manufacturer to operate up to six dealerships within the state so long as the manufacturer only produces electric cars and has never had an affiliation with another franchised dealership. The bill has not been voted out of the committee yet, if it receives a vote, it has a final committee stop in Senate Rules before heading to the Senate floor for a vote.