North Carolina Legislative Report - June 8, 2012

June 4 - June 8, 2012

On the Floor

The General Assembly remained focused this week on advancing several pieces of major legislation.  On Monday, the Senate was able to give final approval to the Excellent Public Schools Act (SB 795), an education reform bill written by Senator Phil Berger.  Also considered and passed by the Senate this week was the Clean Energy and Economic Security Act (SB 820) which legalizes the hydraulic fracturing process known as “fracking.”  The House gave their final approval to a new gaming compact with the Eastern Band of the Cherokee Indians that will allow live-dealer gaming at their casinos (SB 582) and also voted to offer compensation of $50,000 to victims of the state-sponsored Eugenics Commission (H 947).

Next week, the Senate will roll out its version of the budget.  The Senate budget will be posted on the General Assembly website ( Sunday.  The Senate will take the bill up in the Senate Appropriations/Base Budget Committee on Tuesday and likely floor action on Wednesday and Thursday. On the House side, the focus will be the Clean Energy and Economic Security Act (SB 820).  This bill will come before the House Environment Committee on Tuesday and there will likely be floor action on Wednesday and Thursday. 

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

SB 820 – Clean Energy and Economic Security Act (Passed 3rd reading in Senate, sent to House 6/6)  The Senate gave primary approval to lifting the ban on horizontal drilling and fracking in North Carolina.  In the current version of the bill, horizontal drilling would no longer be an illegal practice, however the state is statutorily banned from issuing licenses for fracking until the newly revamped Mining and Energy Commission finishes writing the rules and regulations for fracking. 

SB 795 – Excellent Public Schools Act (Passed 3rd reading in Senate, sent to House 6/4) President Pro-Tem of the Senate, Phil Berger, pushed his education reform plan through the Senate Monday evening after rejecting an amendment put forth by Sen. Josh Stein.  The bill contains a plan to improve early childhood literacy, tenure reform and performance based pay for teachers.  The plan has been referred to the House Education Committee.

SB 582- Authorize Indian Gaming/Revenue (Ratified and Signed by Governor on 6/6) After debate on a single amendment and the bill itself, the new tribal compact passed its 3rd reading in the House and was sent to the Senate for a vote to concur.  Minutes after being ratified, the new compact was signed in a ceremony featuring Governor Bev Perdue and Chief Michell Hicks, Chief of Eastern Band of Cherokee Indians.

H142 – Economic Development & Finance Changes (Passed 3rd reading in House, sent to Senate 6/5) The House voted unanimously in favor of this bill which included several fixes to “promote economic development and to provide fiscal relief to citizens of the State.”  Included in the legislation is a one-year cap on the gas tax at 37.5 cents per gallon and a one year delay in the collection of ferry tolls as mandated by last year’s budget.

S826 – Revenue Laws Tech., Clarifying & Admin Changes (Passed 3rd reading in Senate, sent to House 6/7) Thursday, the Senate gave unanimous approval to 22 pages of proposed tax law changes and updates. 

S824 – Expedited Rule Making for Forced Combination (Passed 3rd reading in Senate on 5/31, received in House 6/4) Last week the Senate gave their stamp of approval to a proposal to require the Secretary of Revenue’s interpretation of the law concerning the Secretary’s authority to adjust net income or require a combined return be made through rule making and to provide an expedited process for rulemaking on this issue.


In Committee

Senate Appropriations Subcommittees

Thursday afternoon was busier than normal when every Senate appropriation subcommittee met to review and discuss the House budget that was passed last week.  With the Senate version of the budget expected to be released on Sunday, there is likely to be major differences between the two chambers’ bills.

House Commerce (Subcommittee on Alcoholic Beverage Control)

The subcommittee on ABC voted Wednesday morning to give a favorable report on H1121, a law that will allow Mecklenburg ABC stores to be open on Labor Day in 2012.  This will allow places near the Democratic National Convention who are expecting a surge in the number of visitors that week, to have plenty of alcohol stocked to meet their customer’s needs.  After being passed out of the committee, the bill later passed third reading in the House and has been referred to the Senate Commerce Committee.

Senate Judiciary II

On Thursday morning H111, a gun law bill left over from the long session last year, was passed out of the Judiciary Committee and referred to the committee on Finance.  The newly adopted language of the bill would allow concealed-carry permit holders to bring their weapons into restaurants and bars that serve alcohol, as long as they do not drink.  The bill also clarifies statutes regarding rules that allow municipalities to ban guns in certain public areas. 

Senate Finance

In the Finance Committee this week, the Senate discussed a variety of bills ranging from funding for UNC Nonappropriated Capital Projects, to changes in unemployment insurance and the extension of tax provisions. 

House Judiciary B Committee

Wednesday morning was a very contentious meeting as the committee discussed amending the Racial Justice Act, and ultimately voted along party lines to approve SB 416.  After some public comment and debate between legislators, the bill was voted on and placed on the calendar for June 7th.  It was later pulled from the calendar and sent back to committee pending approval of an amendment.

House Finance Committee

One major topic of discussion this week was H958 a bill that would create a public-private partnership to operate the North Carolina Zoological Park.  The bill was discussed Thursday morning and a vote is expected on the proposal next week when the Committee meets again.


In the News

Internet Sweepstakes

Gov. Bev Perdue said Thursday she’d like to see video sweepstakes outlawed once and for all, but as long as they’re legal, she wants to tax the games to fund the state’s public schools.  As budget talks continue in the Republican-led General Assembly, Perdue challenged lawmakers to squeeze a new source of state revenue out of the sweepstakes games. “We need to tax the heck out of them and regulate them, regulate them hard,” said Perdue, a Democrat.  Perdue said she is opposed to the sweepstakes parlors that now operate across North Carolina. But she said taxing them is a reasonable idea now that legislative leaders have dismissed her budget proposal. She had recommended a temporary sales tax increase to generate more money for public schools that she said had been hurt by budget cuts. 

Corporate Taxes

Lawmakers continue to whittle away at the state Department of Revenue’s authority to collect tens of millions in corporate income taxes. On Thursday, the Senate approved legislation that would prevent the state Department of Revenue from issuing directives on how to implement a law allowing corporations to defend their use of subsidiaries from state tax collectors. State law allows the state to calculate tax debt by forcing companies to combine all of their revenue, not just the revenue received in North Carolina. It’s meant to stop corporations from shifting money into tax shelters through complex subsidiary structures. But last year, lawmakers passed a measure permitting corporations to defend using subsidiaries if they could prove there was a “reasonable business purpose” other than to lower taxes. 

GOP Convention

Former Charlotte Mayor Pat McCrory formally accepted his party’s gubernatorial nomination Saturday, promising to clean up Raleigh and bring a leaner vision of government. Speaking at the state GOP convention, McCrory said the state must regain its lost momentum with new policies. McCrory said the state had lost its reputation for good roads, good schools and low taxes, and it had become a state with some of the region’s highest income, corporate and gasoline taxes. “Right now this is not the state I grew up in. We can do so much better,” McCrory told about 2,000 delegates and guests. The GOP convention had an upbeat mood with Republicans confident of extending control of the state Legislature and talking about the possibility of picking up four congressional seats – the biggest GOP gain in the country.

Supreme Court Race

A new super PAC is ramping up fundraising on behalf of state Supreme Court Justice Paul M. Newby, a Republican, in his effort to fend off challenger Sam Ervin IV, a Democrat and judge on the state Court of Appeals bench. Key conservatives have formed the N.C. Judicial Coalition, a tax-exempt group that can take advantage of the recent ability to raise and spend unlimited money to support or oppose candidates. At stake is the 4-3 balance on the Supreme Court, which currently tips conservative. While all of the court’s business is, by definition, important, half a dozen lawsuits have been filed over legislation passed in the Republican-dominated General Assembly last year that could end up before the seven justices, dealing with such contentious issues as redistricting, abortion and education funding. 

School Reform

The Republican-led North Carolina Senate gave its final approval Monday evening to a public school overhaul bill after a Democratic amendment was defeated that would have deleted the measure's proposed end to teacher tenure and weakened merit pay requirements. The Senate passed the legislation on a party-line vote of 31-17, with GOP leaders calling the measure necessary to improve test scores, graduation rates and reading proficiency among children in early grades. But Democrats said the changes would demoralize teachers already discouraged by job losses, no pay raises since 2008 and other GOP-backed changes last year. The Democrats' amendment was defeated by the same margin as the full bill. Senate leader Phil Berger, a primary sponsor of the bill, called the Democratic ideas well-intentioned but "really represent a defense of the status quo."

Veto Overrides

Republican lawmakers are renewing a push for a compromise measure that would require voters to show identification at the polls, conceding that voiding a veto of a tougher bill is unlikely. House Speaker Thom Tillis said he is intent on overriding more of Gov. Bev Perdue’s vetoes before adjourning at the end of the month. But he recently acknowledged the one hill too big to climb may be the voter ID legislation vetoed by Perdue that would require voters to show a driver’s license at the polls. A veto override requires a three-fifths majority, meaning a handful of Democrats would need to side with the Republican majority.

Convention Protests

A city-designated protest route for the Democratic National Convention will allow marchers to come within two blocks of the Time Warner Cable Arena, the main convention site. But it will steer clear of Bank of America Stadium, where President Barack Obama is scheduled to speak Sept. 6, and some critics say it won’t let protesters get close enough to delegates so their message can be heard.

Thinking Short

The Senate is aiming for a June 19 adjournment, according to Senate Joint Resolution 955. Wishful thinking or legislative bluster? Probably both. Senate Rules Chairman Tom Apodaca filed the sine die bill Thursday. It will get introduced Monday. Republican legislative leaders have said they plan to make this a short session -- but putting a two-week deadline on the session is a new idea. More than anything, the bill is likely a signal to the House that it needs to play ball with the Senate, which hasn't even considered the state budget yet.

Legislative Calendar

Mon, June 11, 2012 

9:00 AM  Senator Phil Berger Press Conference Press Room LB 
2:00 PM  Senator Phil Berger Press Conference Press Room LB 
4:00 PM  Rep. Glazier/Press Conference Press Room LB 
5:00 PM  Judiciary Subcommittee B (House) 421 LOB  
               Amend Racial Justice Act. (A PCS will be considered) (S416)
7:00 PM  Session Convenes (House)
7:00 PM  Session Convenes (Senate)

Tue, June 12, 2012 

10:00 AM  Health and Human Services (House)                            544 LOB
                  Local Human Services Administration. (S433)
                  Streamline Oversight/DHHS Service Providers. (S525)
                  Continue the Sustainable Local Food Advisory. (H1098)
                  Promote Local/Healthy Food. (H975)

10:00 AM  Education (House)                                                           643 LOB
                  Yadkin Valley Career Academy. (H1018)
                  Bladen Community College Fed Loan Program. (H1049)
                  Isothermal Community College Fed Loan Program. (S805)

11:30 AM  Rep. Hackney/Press Conference Press Room LB

1:00 PM  Insurance (House)                                                         1228/1327 LB 
                 Right to Choose Physical Therapist. (S656)
                 Mutual Insurance Holding Companies. (S647)

1:00 PM  Agriculture (House)                                                          643 LOB
                ETJ/Definition of Bona Fide Farm Purposes. (S380)

Wed, June 13, 2012 

10:00 AM  Judiciary Subcommittee A (House)                               1327 LB  
                  Active Duty Death/Lease Termination. (H971)
                  Expunction/Nonviolent Offenses. (H1023)
                  Incapacity to Proceed Amendments. (H1048)
                  Repeal Rule in Dumpor's Case. (S521)

11:00 AM  Rep. Harrison/Press Conference Press Room LB 

12:00 PM  Senator Kinnaird Press Conference Press Room LB


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