The House and Senate both returned to Raleigh this week for a three-day session, pursuant to the adjournment resolution passed last month. The session was restricted to only addressing redistricting matters, appointments, nominations, conference reports, and another adjournment resolution. Congressional redistricting was the main focus of the session, while legislators also passed bills to help alleviate cash flow shortages at the Department of Transportation, and they passed another round of disaster relief to deal with hurricane damage related to storms over the last several years.

Lawmakers concluded business for the year on Friday, November 15, and will not return to session until January 14, 2020. The January session’s rules specify that lawmakers can address veto overrides, bills addressing access to health care, budget modifications, among other items.

Congressional Redistricting

Last month, a three judge panel entered a ruling indicating that the state needs to redraw its congressional maps based on a similar ruling over a partisan gerrymandering of the state legislative districts. The judges’ order granted an injunction to halt the 2020 primaries as a result of the case. The same three judge panel also approved the legislature’s recent redraw of the state legislative maps.

When redrawing the map, lawmakers used the same open committee process used when they redrew legislative districts early this year, and also had a public hearing to accept public comments. Per court order, legislators excluded using political data when drawing the map. The new map leans to elect five Democrats and eight Republicans, compared to the current map that has a three Democrats to ten Republicans breakdown.

While legislators did take incumbency into account and no congressional members were double bunked, the maps may mean that two sitting congressmen will face unfavorable odds in the 2020 election.

Congressman Mark Walker currently represents the 6th District, which includes part of Guilford County and several largely rural surrounding counties. Under the new map, the 6th District will now consist of all of Guilford County and part of Forsyth County, which includes Winston-Salem, and the district leans Democratic.

Congressman George Holding represents the 2nd District, which leans Republican and consists of parts of Wake and Johnston Counties, as well as a few surrounding counties. Holding does not actually live in his current district. The new 2nd District will only consist of a portion of Wake County, and will lean Democratic.

The map will have to be approved by the three judge panel that struck down the current map before they can go into effect for the 2020 election. The judges have reserved the right to move the candidate filing period if they find it necessary.

WRALhttps://www.wral.com/congressional-redistricting-proposal-threatens-2-nc-incumbents/18765607/

New Congressional Map: https://webservices.ncleg.net/ViewBillDocument/2019/6956/0/HB%201029,%203rd%20Edition%20-%2019x36%20Map

Governor Vetoes Teacher Pay Raise Bill

Governor Cooper vetoed Senate Bill 354 last week, which would have given teachers the 3.9% over two years raise that they would have received under the vetoed budget, plus an additional raise to make the increase 4.4% over two years if the budget veto override is successful. Democrats called this a political ploy, and no Senate Democrats voted for the bill and only three Democrats voted for the bill in the House. In his veto message, Governor Cooper claimed that the bill shortchanged teachers and school employees, despite the State having the revenue to do more.

WCNC: https://www.wcnc.com/article/money/governor-cooper-vetoes-teacher-pay-bills-seeks-higher-raises/275-7cb31091-f947-4762-bbff-167722a8c5b1

WRAL: https://www.wral.com/republicans-pitch-new-teacher-raises-but-with-a-catch-in-budget-fight/18733666/

NC DOT Cash Flow Bill

The legislature passed the DOT Cash and Accountability Act this week, which addresses the current cash flow shortage at the Department of Transportation (DOT) that has threatened to derail hundreds of road projects and jeopardize thousands of jobs. DOT cited increased costs due to hurricane-related road repairs and slow federal reimbursements for road damage costs. In an average year, DOT spends around $65 million on storm damage road repair, however, this year they have spent nearly $300 million. DOT has also spent $311 million defending the controversial Map Act, which prevents landowners from developing property in areas where future highway projects are planned. The legislature has repealed the Map Act.

The bill forgives a $90 million loan from the General Fund and allows the Department to increase their $300 million Build NC bond to $400 million. The bill also includes a $100 million transfer from the General Fund to the Department, with $36 million of that going towards disaster relief. The bill establishes the Transportation Emergency Reserve to be used for future declared disasters and includes an initial $64 million appropriation, with the goal of the Department building the fund up to a $125 million balance.

In addition to giving DOT access to additional money, the bill directs the State Auditor to conduct a performance audit of the Department, and adds additional reporting requirements, including a weekly cash watch report.

The bill drew some criticism from Democrats, who support additional funding for the Department, but disagreed with a provision specifying that DOT pay only simple interest and not compounding interest as just compensation.

The bill is now on the Governor’s desk.

WRAL: https://www.wral.com/bill-gives-dot-a-cash-infusion-lots-of-new-reporting-requirements/18766674/

Disaster Relief Bill

The legislature approved a nearly $230 million disaster relief package to help assist with the recovery efforts from Hurricanes Mathew, Florence, and Dorian. Around $121.5 million of the bill is used for various matching requirements for drawing down federal funds. The bill also contains funds to prepare for future storms with flood mapping and water level monitors. $15 million is appropriated to assist local governments with cash flow needs in the form of grants and loans. The Golden L.E.A.F. Foundation also receives $15 million under the bill to be used to assist local governments and non-profit organizations in their recovery efforts. The bill contains various appropriations to government entities that sustained damage during the storms.

Outside of monetary relief, the bill allows the state more flexibility in moving money around from previous disaster relief bills that specified for what storm the money could be used for. The Community College System is allowed to use money from last year to cover budget shortfalls due to enrollment declines related to the storms. The bill also removes a provision that barred individuals who had previously received federal flood insurance money from participating in a pilot program that helps to assist individuals in paying their flood insurance premiums.

Outside of disaster relief, lawmakers also tacked on a few unrelated items, including budget technical adjustments, funding for the recently enacted Rural Hospital Stabilization Fund, and a provision that drew criticism from the Governor that requires all cash gifts or donations to the state or to be used by the state to be deposited in the State Treasury. Some have viewed the unrelated provisions as intended to bait the Governor into vetoing the popular bill.

WRALhttps://www.wral.com/disaster-funding-coming-as-ocracoke-residents-call-for-help/18764219/

USDA Releases New Rules on Hemp Production

The United States Department of Agriculture (USDA) recently took another step towards expanding the industrial hemp market in the United States by releasing their interim final rules labeled Establishment of a Domestic Hemp Production Program. USDA’s rules were posted to the Federal Register on October 31, 2019, and the rules will have a 60 day comment period for groups and individuals to give the Department feedback. The rules largely contain the nuts and bolts of how the Department will implement the 2018 Federal Farm Bill, which reformed the nation’s hemp laws by relaxing the requirements to obtain a license to grow hemp, and removed legally grown hemp and hemp products below .3% THC from the Controlled Substance Act (CSA). Hemp above .3% THC is still considered a scheduled I substance.

Previously, under the 2014 Federal Farm Bill, states were allowed to establish pilot hemp programs that focus on hemp research rather than being suitable for large scale industrial use. North Carolina passed legislation in 2015 and follow-up legislation in 2016 to establish the state’s pilot program, and that program is currently in place, run by the North Carolina Industrial Hemp Commission.

Nexsen Pruet: https://www.nexsenpruet.com/insights/usda-releases-new-rules-on-hemp-production