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North Carolina Legislative Report - June 22, 2012

June 18 - June 22, 2012

On the Floor

The House and Senate spent all of last weekend and early this week working on a compromise budget that has now been passed by both chambers and has been sent to the Governor’s desk.  The $20.2 billion dollar spending plan (H950) has an increase in spending of 2.5% and contains provisions from both the House and Senate budget proposals.  Final legislative approval was also given to the Clean Energy and Economic Security Act (S820) which legalizes hydraulic fracturing and horizontal drilling in North Carolina.  Monday evening the Senate also completed the veto-override of a bill that would allow community colleges to opt out of some federal loan programs (H7).

The Senate has given approval to the adjournment sine die resolution (S955) calling for adjournment on June 30, but the legislature may be required to stay a little later if the Governor vetoes any recently passed legislation. 

Here are some key bills that moved in the House and Senate this week:

H950– Modify 2011 Appropriations Act (Conference Report accepted by House and Senate, sent to Governor) The $20  billion budget worked out by a conference committee has been accepted by both chambers and is now waiting for the Governor’s action.  She has 10 days to either sign the bill, veto it, or allow it to become law without her signature. 

H952 – State Air Toxics Program Reforms (Ratified and Sent to Governor)  This bill exempts from state air toxics emissions controls those sources of emissions that are subject to certain federal emissions requirements.  The Department of Environment and Natural Resources is directed to develop a permit process for emissions the Division of Air Quality determines to be unacceptable risks to human health.

S810 – Regulatory Reform Act of 2012 (Passed 3rd reading in House 6/21, ordered engrossed and sent to Senate)

After entertaining and adopting several amendments, the second regulatory reform act  passed the House Thursday.  The bill requires agencies that perform permitting processes to track and report the time it takes for each step of the process.  This type of self-audit will help lawmakers see where reforms can be made to ease the process of getting permits from government agencies.

H199 Metal Theft Prevention Act of 2012 (Ratified and presented to Governor 6/19) With unanimous support in the House and the Senate, this bill increases the penalties to theft of metal and also includes provisions that ties the penalties to the amount of property damage caused by the theft.  There are also preventative measures in regards to purchases of scrap metal to deter the purchasing of stolen metals.

H7 Comm. Colleges/Opt Out of Fed'l Loan Program (Passed notwithstanding the Governor’s objections) This bill provides that constituent institutions of the North Carolina Community College System may opt out of participation in the William D. Ford Federal Direct Loan Program. 

H237 Workers’ Compensation Amendments (Ratified and will be sent to the Governor 6/21)  This bill provides that the North Carolina Rate Bureau share with the NC Industrial Commission information on the status of workers’ compensation insurance coverage of employers in this state and making clarifying, conforming and other changes relating to the workers’ compensation laws of NC.

Committee Highlights

To view more information about each committee meeting, please click on the relevant committee below.

House Environment Committee

After a lengthy debate, the House Environment Committee approved legislation addressing concerns raised about a bill passed last year that allowed billboard companies to cut more trees around their signs.  The measure was supported by the League of Municipalities because it allows local governments to regulate replacement vegetation that must be planted after trees are removed near billboards. 

House Finance Committee

The House Finance Committee met three times this week to discuss a wide variety issues before sending them to the House floor.  On Thursday the committee gave approval to a bill that would force the Department to enter into a management agreement with the North Carolina Zoological Society, creating a public-private partnership to manage the zoo.  The proposal was recommended by a select committee that studied public-private partnerships, and was then adjusted in a Finance subcommittee created to specifically work on H958 NC Zoo Public-Private Partnership.  There was also a brief discussion on H1180 Video Sweepstakes Entertainment Tax.  Although there was no official vote, there was a lot of skepticism about the proposal from both sides of the aisle that made passage seem unlikely on Thursday. 

House Education Committee

House leaders on Monday changed the Senate's public school overhaul bill to include tax breaks for businesses that give money to nonprofits that in turn provide scholarships to attend private schools. The House Education Committee debated and took public comment on their version of a Senate measure promoted by Senate leader Phil Berger, R-Rockingham, but didn't vote on it. The Senate version focuses largely on beefing up public school reading programs in early grades, ending job-protecting tenure for veteran teachers and requiring local districts to create merit pay plans.

Senate Rules

The Senate Rules held two hearings this week with a staffer from Governor Bev Perdue’s office, aid Pryor Gibson, and Jim Trogdon of the Department of Transportation.  After receiving conflicting letters from the General Trogdon, the Senate Rules Committee decided to hold hearings with both the official who’s name was forged on the letter and alleged perpetrator.   After the second hearing, Sen. Apodoca, the Rules Chairman said the committee will discuss next week what action, if any, will be taken.

In the News

Budget Approved

Lawmakers have given final approval to a Republican-penned spending plan for state government next year that doesn't raise taxes, but fails to trim public school cuts to the level sought by Gov. Beverly Perdue and fellow Democrats. After separate debates, the House and Senate voted for the $20.2 billion spending plan that adjusts the second year of the two-year budget. Perdue will now have 10 days to decide whether to veto the bill, sign it or let it become law without her signature. She vetoed a two-year budget last year, but the veto was overridden. Thursday's votes — 71-45 in the House and 30-15 in the Senate for the final plan — would exceed the three-fifths majorities required in each chamber to overcome her veto. 

Fracking

The Senate has given final legislative approval to a bill that paves the way for legalizing a controversial form of natural gas drilling known as hydraulic fracturing. It is now up to Democratic Gov. Beverly Perdue to decide whether to sign or veto the legislation, which would dramatically reshape the state’s energy landscape. Supporters laud the bill for its potential economic benefits and opponents denounce it as environmentally destructive. Perdue, who has expressed support for hydraulic fracturing, or fracking, in the past, has remained conspicuously silent on the Republican-backed legislation. 

Air Toxics

A bill that exempts industrial plants from certain North Carolina pollution rules if they already comply with similar federal restrictions is on its way to Gov. Beverly Perdue’s desk. The Senate approved 38-1 on Thursday changes to scale back the state's authority over hazardous chemicals covered by both the state Air Toxics Program and a similar federal program. The House already agreed to the bill. The Perdue administration said this spring she generally supports the changes, which were sought by groups representing manufacturing and chemical production plants and the North Carolina Chamber. Power plants, paper mills and chemical manufacturers are among those most likely to be affected. The state environment department still would have authority to step in if a plant's pollution is found to be an unacceptable risk to human health. 

Medicaid Shortfall

House and Senate Republicans working on a compromise state budget learned Friday that the current year's Medicaid shortfall is larger than originally calculated. Al Delia, acting secretary of the Department of Health and Human Services, said there's an uptick in claims that is likely to result in an additional $75 million shortfall for the fiscal year ending June 30. That's in addition to the $206 million shortfall the Legislature agreed to close last month with some unexpected tax collections and proceeds from several pots of money within state government. Delia said the extra gap can be attributed to providers turning in reimbursement requests more quickly at this time of year compared to previous years, likely the result of faster billing systems. So it probably won't result in more Medicaid spending overall, just the need for a cash infusion now to pay bills on time, he said. 

Democratic Convention

Many of the roughly 1,200 Democrats who gathered for their party's state convention in Saturday were optimistic about their party's chances this year. “In the long run I think we’re going to carry North Carolina,” said Betsy Wells, a party activist from Kings Mountain. “Is it going to be tough? Yes.” The gathering was largely devoted to lengthy elections of delegates to the national convention in Charlotte. But Saturday night, Delaware Attorney General Beau Biden, son of the vice president, called North Carolina a “critical” state in the presidential election and defined the “stark contrast from the top of the ticket down.” “President Obama has a very clearly articulated path with the creation of 4.2 million jobs, 27 months of consecutive job growth,” Biden told reporters before his keynote speech at the Jefferson-Jackson Dinner.

UNC Board

Peter Hans, a senior policy adviser for the Nelson Mullins Riley & Scarborough law firm, has been elected as chair of the University of North Carolina Board of Governors. His two-year term begins July 1. Hans is now completing his second term as the board's vice chairman. Also, Cary businessman Frank Grainger was elected vice chairman, and Cary businesswoman Ann Goodnight was elected board secretary Friday. 

Veto Override

The Senate wasted little time Monday night completing an override of Gov. Beverly Perdue's veto of legislation allowing community colleges to opt out of a federal student loan program. No debate accompanied the 31-16 party-line vote, which exceeded the three-fifths majority needed to override a veto. Last week, the House voted to override the veto. That vote came more than a year after Perdue vetoed the bill, prompting complaints from House Democrats that it might not be considered timely under the veto provision in the state constitution.

Endorsed

A group representing the interests of Highway Patrol employees has endorsed Republican Pat McCrory for North Carolina governor this fall. McCrory's campaign said the North Carolina Troopers Association endorsed the former Charlotte mayor over the weekend during his appearance at the group's family-focused picnic at Tweetsie Railroad in Blowing Rock. Association president Ron Crawford is quoted in a McCrory campaign release that McCrory's experience as mayor and involvement with law enforcement issues makes him the right choice for the job.

Budget Money

Republicans are close to finishing closed-door negotiations on the state budget -- but one sticking point is apparently a House provision earmarking economic development money for specific projects, or what some may call "pork spending." The $20 million provision in question is tucked into the state commerce department budget for the One NC Fund, an pot of money used to entice companies to expand in North Carolina. The House wants to give $500,000 to Johnson and Wales University in Charlotte and another $500,000 to RTI, a research firm in Chapel Hill. Another $4.5 million is destined for the Rural Center's small business loan program. The other $14.5 million? It's House budget doesn't specify where it goes. The provision doesn't appear in the Senate budget and the commerce department didn't ask for it, an agency spokesman Tim Crowley said. It's unusual for lawmakers to earmark One NC Funds because it essentially sidesteps the normal process. The money is typically used to help retain companies or help them expand, often when North Carolina is competing with other states for the business.

Adjournment

An adjournment resolution rolled out in the Senate Rules Committee would have legislators leaving town a week from Saturday. Senate Rules Committee chair Tom Apodaca, R-Henderson, said the June 30 date could be dependent on a budget compromise being reached on Tuesday night. But he also indicated that the legislature might be able to bump the schedule up a day earlier with a quick resolution to budget negotiations. House Speaker Thom Tillis, meanwhile, mentioned July 2 as a possible date for the sine die adjournment. Legislative leaders apparently are looking at staying in Raleigh for up to 10 days after the approval of a final budget because of an expectation that Gov. Beverly Perdue will veto the bill.

Dismissed

A management shake-up within North Carolina's health department settled Tuesday with the dismissal of the state Medicaid director, days after it became public that the government health insurance program faces a larger shortfall this year than previously expected. State Department of Health and Human Services acting Secretary Al Delia announced several changes that left Dr. Craigan Gray out of a job. Gray has been director of the Division of Medical Assistance since 2009 and managing Medicaid. The federal-state government health insurance program has 1.3 million enrollees - mostly poor children, older adults and the disabled - and is expected to spend more than $12 billion this fiscal year. Department Chief Deputy Secretary Michael Watson will succeed Gray, whose last day was Tuesday. 

Altered Letters

Gov. Bev Perdue's office, under fire over the disclosure that top aides altered a state transportation official's position on funding for toll road projects without his knowledge, said Tuesday that her staffers had only "suggested some edits" to paperwork while seeking to ensure the projects stayed on track. Perdue, a Democrat who is not seeking re-election, did not comment on the issue. Her press secretary issued a statement. Republicans called what happened something much different: a possible crime that merits serious review. The Senate Rules Committee chairman launched an inquiry, using the word "fraudulent" to describe the letters sent to lawmakers last week that appeared to reverse the state Department of Transportation's position on whether the legislature should provide $63 million next year for two toll roads.

Energy Merger

The North Carolina Utilities Commission will hold an additional hearing to determine if Duke Energy can merge with Progress Energy. State regulators announced that climate-change nonprofit NC Warn will have a chance Monday to cross examine witnesses who want the merger. The ruling came Tuesday after the nonprofit and energy giants filed dueling motions this week arguing if additional hearings were needed. NC Warn argued the merger could drive up rates for customers, and the energy companies responded that no further hearings were necessary. The $13.7 billion merger would create the nation's largest electric utility, serving 7 million customers in six states. The merger cleared a major hurdle June 8 when it was approved by federal regulators after more than a year of consideration. 

Upcoming Committee Meetings

Monday, June 25, 2012 

4:00 PM   

    • Joint Legislative Program Evaluation Oversight Committee 544 LOB

5:30 PM  

    • Rules, Calendar, and Operations of the House (House)
    • Public Finance Laws/Municipal Service Dists. (S426)
    • Study and Amend Fisheries Laws. (S821)
    • Surf City Deannexation. (S900)
    • Ocean Isle Beach Satellite Annexations. (S901)
    • Town of Boone/ETJ. (S949)
    • Cleveland County Corr. Facil. Prop Transfer. (S951)

7:00 PM  

    • Session Convenes (House)
    • Session Convenes (Senate)

Tuesday, June 26, 2012 

10:00 AM 

    • Health and Human Services (House)

10:00 AM 

    • Rep. Floyd & Rep. Wray/Press Conference Press Room LB 

11:00 AM 

    • Senator Phil Berger Press Conference Press Room LB 

12:00 NOON 

    • Transportation (House)
    • Increase DOT Public-Private Partnerships.-AB (H1077) 
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