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North Carolina Legislative Report - June 29, 2012

June 25 - June 29, 2012

On the Floor

With only two more legislative days expected before adjournment sine die, both chambers in the General Assembly will have their hands full next week.  Governor Bev Perdue has vetoed two major pieces of legislation, including the adjustments to the second year of the two year budget passed last year (H950).   One more controversial bill still sitting on her desk, the Clean Energy and Economic Security Act (S820), may also come up for a veto-override vote should the Governor decide to veto the act.

The House and Senate both gave unanimous support to a bill that has been the subject of much debate and lobbying, Dentistry Management Arrangements (S655), a compromise bill that has been in the works for over a year.  A bill forbidding tax assessors (S462) from using contingency audits is on Monday’s calendar for a final vote by the House to concur with changes made by the Senate. 

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

H177- Clean Energy Transportation Act (Presented to Governor 6/28) An act to create an interagency task force to study the feasibility and desirability of advancing the use of alternative fuels by state agencies and the development of associated fueling infrastructure; establish criteria for the operation of electric vehicle charging stations located at state-owned rest stops along the highways; and to amend the Energy Jobs Act of 2011 if the Energy Jobs Act of 2011 becomes law.

H1229- 2012 UNC BOG Vacancy Election (Adopted 6/28) The House appointed Aldona Wos to fill the unexpired term of Brent Barringer on the University of North Carolina Board of Governors. 

S655- Dentistry Management Arrangements (Ratified and Sent to Governor 6/29) This compromise bill that passed unanimously out of both chambers has been in the works for over a year and was even the subject of its own House Select Committee.  Rep. Bert Jones, R-Rockingham, and Rep. Ruth Samuelson, R-Mecklenburg, played major roles in crafting this which would require dentists agreements with management companies to conform with the Dental Practice Act and establishes a task force to study the issue.

S462- Contingency Contracts for Audits/Assessments (Passed by Senate, Calendared for concurrence vote after favorably reported out of House Commerce Committee) According to bill supporters, this act is about making sure tax collections are fair for citizens and business owners.  The bill states, “In determining the liability of any person for a tax, the Secretary may not employ an agent who is compensated in whole or in part by the State for services rendered on a contingent basis or any other basis related to the amount of tax, interest, or penalty assessed against or collected from the person."

S813- DCR and DENR/ Study State Attractions Savings (Chaptered as Session Law 2012-93) An act to require the Department of Cultural Resources and the Department of Environment and Natural Resources to study various revenue enhancements and potential savings at state historic sites and museums, the state zoo, state parks, and state aquariums, as recommended by the Joint Legislative Program Evaluation Oversight Committee.

2012 Boards and Commissions Appointments Bill:

H1234- 2012 Appointments Bill (Senate Committee Substitute Adopted, waiting for approval on Senate and House floor)

Other Important bills:

H203- Mortgage Satisfaction Forms/No False Liens (In conference committee)

H457- Municipal Electric Utilities/Rate Hearings (Placed on House Calendar for concurrence vote)

H953- Amend Environmental Laws 2 (Placed on House Calendar for concurrence vote)

S42- Mech. Liens/PVT Lien Agent. (Ratified and sent to Governor 6/28)

Committee Highlights

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

House Finance Committee

The House Finance Committee held two days of discussion on H1180 Video Sweepstakes Entertainment Tax, but never took up the measure for a vote.  The bill, being pushed by Rep. Bill Owens, D-Camden, defies party lines and has support and opposition from both sides of the chamber.  Despite the call from the governor to heavily tax and regulate the industry, it appears the issue may be dead for the remainder of the legislative session. 

House Commerce and Jobs Development Committee

A House Committee gave it’s OK to legislation that would prohibit state and local government tax collectors from hiring private tax auditors who are paid based on the taxes assessed. Bill supporters told members of the House Commerce and Job Development Committee that tax auditing based on contingency awards encourages aggressive and unfair assessments on taxpayers. "You need people without a financial motive," said lobbyist and former state Rep. Chuck Neely. Some local governments employ the private tax auditors to find and establish values for equipment and other property, especially that owned by businesses. Perry James, Chief Financial Officer for the city of Raleigh, said private auditors also are essential to assessments for utility franchise taxes and business privilege taxes, particularly for non-traditional businesses such as those operating on-line. "The business community doesn't look like it used to," James said. But Rep. Harold Brubaker, R-Randolph, called the contingency awards an "I-gotcha" approach to tax collection. "No one would want to go before a judge (paid) based on how many convictions they got," added Rep. Edgar Starnes, R-Caldwell. The bill now goes to the House floor.

In the News

Board of Governors Appointment

House Republicans appointed former ambassador and major GOP financier Aldona Wos to the UNC Board of Governors on Thursday.  Wos is a co-chairwoman of Republican gubernatorial candidate Pat McCrory's campaign and served as a top official in Elizabeth Dole's U.S. Senate bid and President George W. Bush's organization. She served as ambassador to Estonia until 2006.  “Ambassador Wos has an impeccable record of extraordinary success in every endeavor she has undertaken,” said House Speaker Thom Tillis in a statement.  “I am confident that as a member of the Board of Governors, she will serve our state in the same exceptional manner that has been the hallmark of her career thus far.  North Carolina’s university system is lucky to have such a talented individual joining their illustrious board.”  Wos will serve the remained of Brent Barringer's term on the board until 2015. Barringer resigned earlier this month to focus on his wife's GOP bid for the state Senate.

Legislative Starts

The Senate wants to change how legislative sessions get going. This session's technical corrections bill, meant to clean up flubs in other bills and references in state laws, included a provision added by Sen. Fletcher Hartsell, R-Cabarrus, to change how the legislature organizes every two years. Under current law, the General Assembly begins meeting in odd-numbered years on the "third Wednesday after the second Monday in January." That translates into a Jan. 30 start date in 2013. The complaint with this system is that the legislature gets together and then sits idle while it organizes committees.

DOT Letters

Senate Democrats objected Wednesday to how the chamber's Republican leaders are investigating altered letters from a Department of Transportation executive. The critique came shortly after two DOT employees and Gov. Beverly Perdue's deputy chief of staff were grilled in a committee meeting for an hour by a Republican senator that had the feel of a lawyer questioning a witness in a court case. One DOT office assistant struggled to hold back tears as she spoke before TV cameras in a crowded committee room and expressed deep regret over her involvement with the letters. The Senate Rules Committee has collected evidence in four separate meetings since last week before deciding what to do about letters some legislators received about funding for two toll road projects before a key budget vote earlier this month. The June 14 letters appeared to be signed by DOT Chief Operating Officer Jim Trogdon, but he later disavowed their content because they appeared to reverse Trogdon's letter to budget writers a week earlier that suggested the projects didn't need $63 million next year. It turned out DOT workers placed Trogdon's digital signature on letters that had been edited by Perdue aides without Trogdon's review and rushed them to legislators. Sen. Dan Blue, D-Wake, said the questioning of DOT Deputy Secretary Susan Coward and Trogdon assistant Vicki Stanley was a one-sided cross-examination of people being treated like they have committed a crime.

Dental Divide

After days of huddled negotiations, opposing sides in a fight over who controls dental practices emerged with a compromise that was promptly unanimously passed by the House on Wednesday night. The bill was scaled back considerably from Senate legislation passed last year which gave sweeping powers to the N.C. Board of Dental Examiners to review and block contracts between dentists and dental service firms. Still, both sides appeared happy with the compromise. "It is in the best interest of all parties that the law be clarified to avoid litigation," said Rep. Bert Jones, R-Rockingham, one of two dentists in the House. The N.C. Dental Society and allied dentists sought the legislation to stop what it said were agreements between dentists and dental service firms which threatened the quality of patient care and ran afoul of a law that requires dentists to own dental practices. The dental service firms and their allied dentists argue that the management arrangements, with the firms handling administrative tasks like payroll and billing, can lower overhead for dentists, increase competition and lower prices for patients.

Banking Laws

Gov. Beverly Perdue has signed into law a measure conforming state banking laws with federal statutes and giving state regulators the ability to move quickly to take steps to restore a struggling bank to fiscal health. It also reduces the membership of the state banking commission to 15, down from 22. The bill, which Perdue signed last week, breezed through the state legislature. It was unanimously approved by the Senate and attracted just a single no vote in the House. It had been endorsed by both the state banking industry and consumer advocacy groups. Former state banking commissioner Joseph Smith Jr. had pushed for years for such a measure, which led to last year's formation of a Joint Legislative Study Commission on the Modernization of N.C. Banking Laws. The Committee found that a big chunk of the state law regulating banks had been on the books for more than 70 years. "It's a product of a lot of...discussion and thought," said Chris Kukla, who served on the study commission. Kukla is senior counsel for government affairs at the consumer-oriented Center for Responsible Lending.

Early Endorsement

The 2014 U.S. Senate race is still a long way off and House Speaker Thom Tillis hasn't said he has any plans to enter it, but that hasn't prevented him from picking up an endorsement already. Ed Broyhill, the son of former U.S. Sen. Jim Broyhill, endorsed Tillis' non-campaign to unseat Democratic U.S. Sen. Kay Hagan on Sunday. In a post on Facebook, Broyhill wrote: "My family and I endorse Thom Tillis for the U.S. Senate in 2014. It's not too early. Jump aboard now." The post generated dozens of "likes" and comments. Broyhill is a prominent Winston-Salem political name. Ed Broyhill ran unsuccessfully for the Congress in 2004.

Immigration Laws

After the U.S. Supreme Court struck down major provisions of Arizona's controversial immigration law on Monday, North Carolina lawmakers said they remain committed to toughening immigration laws here. "While I'm disappointed that they didn't rule entirely for the law in Arizona, they didn't close the door completely," said Rep. Harry Warren, a Salisbury Republican who led the House immigration reform efforts. A special House panel tasked with examining the state's immigration laws delayed taking action earlier this month, citing the Arizona case pending before the court. The legislature is highly unlikely to consider the issue before adjourning July 2. The panel is required to develop a report and possibly suggest legislation by the end of the year. "The subject of illegal immigration is obviously something you can't ignore." Warren said.

Virtual Schools

A North Carolina judge heard arguments Monday on whether a for-profit company should get taxpayer money to operate a virtual charter school that offers online-only classes to students as young as kindergarten. N.C. Learns, a non-profit group seeking to open the North Carolina Virtual Academy, won approval from an administrative law judge last month to begin enrolling students this fall, despite the vehement opposition of state education officials whose approval is typically required by law. N.C. Learns is fully funded by K12 Inc., a for-profit Virginia company that has managed online schools in 29 states with mixed academic success. K12 would operate the North Carolina Virtual Academy. The State Board of Education appealed the earlier legal ruling to Wake County Superior Court. The North Carolina School Boards Association has also entered the case after 89 of the state's 115 public school boards went on the record opposing the virtual academy.

Voter ID

A proposal to require voters to show identification at the ballot box isn't likely to come up again this year, according to Rep. David Lewis. "It's gone," said Lewis, R-Harnett, who chairs the committee which oversees election laws. Under current law, most voters do not have to show ID when they come to the polls. Under a version of voter ID bill that Gov. Beverly Perdue, a Democrat, vetoed last year, most voter would have to provide photo identification before casting a ballot. Proponents of the measure say voter ID would help make sure people don't vote in the name of others or cast ballots when they're not qualified to do so. Opponents say there is no evidence of widespread voter fraud and ID laws would disproportionately keep poor, elderly and college-age voters from casting ballots. The House has thus far been unable to override Perdue's veto. Republican House Speaker Thom Tillis has said he was very eager to find a compromise this year. But it now appears that hope of compromise is mostly gone thanks to the calendar.

Tillis, Berger Carve Paths

Standing before a bank of TV cameras, Senate leader Phil Berger, R-Guildford, announced a budget deal this week that included major components of his keystone education plan. His House counterpart, Speaker Thom Tillis, R-Mecklenburg, stood a step behind to Berger’s left, peering at the senator’s notes. When Tillis stepped to the microphone, he confronted the defeat of his chief legislative priority, compensation for state sterilization victims, calling it a “personal failure.” The striking moment pointed toward an emerging dynamic between Berger and Tillis, according to many political observers, who saw subtle tears in the GOP fabric compared to a year earlier when Republican lawmakers worked closely together to move North Carolina to the ideological right.

Gubernatorial Debate

Democrat Walter Dalton and Republican Pat McCrory on Saturday sought to link each other to divisive state politicians during their first debate of the general election campaign for governor. Dalton, the lieutenant governor, came out swinging verbally in their face-to-face forum in a Wilmington hotel ballroom, using his opening statement to link McCrory to the Republican leaders who control the General Assembly for the first time in 140 years. "We've seen Pat's agenda since his allies took control of the Legislature," Dalton told a crowd of attorneys at the North Carolina Bar Association's annual meeting. "Pat and his friends have slashed funding for education, they've increased class size ... I don't think there's any question that Pat has supported them every step in the way." McCrory attempted to link Dalton to outgoing Democratic incumbent Beverly Perdue, who isn't running for re-election in November. He said it's the Democratic establishment - Perdue and Dalton included - that has brought on high unemployment and tax rates over the past decade and an outsider with private-sector experience like him is needed to repair the state economy and government.

Upcoming Committee Meetings

Mon, July 02, 2012 

  • 10:00 AM  Judiciary Subcommittee B (House)
                      -Littering Offenses/Increase Fines. (S635)
  • 11:00 AM  Session Convenes
  • 12:00 PM  Session Convenes
  • 10:30 PM  Rules, Calendar, and Operations of the House (House)
                      -General Statutes Comm. Technical Corrections. (S847)
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