NCACC Legislative Bulletin
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May 13, 2016
Senate plan would impact county sales taxes
Legislation that could create uncertainty for fiscal year 2017 county budgets was introduced this week and assigned to the Senate Finance committee. S846 (Change the LOST Adjustment Factor) is sponsored by Sen. Harry Brown and contains two provisions that adjust sales tax revenue to counties. As of July 1 of this year, it would repeal the $17.6 million state appropriation to all 100 counties that was part of last year’s sales tax distribution compromise supported by the Association. The bill would also change the sales tax adjustment rate factor from county-specific rates to rates tied to a county’s economic tier designation. Beginning July 1, 2017, tier one counties receive a 1.1 percent adjustment, tier two receives 1.0 percent, and tier three adjusts by .9 percent. NCACC is working on local-level analyses of the bill.

House starts to roll out its budget

House appropriations subcommittees met throughout the day on Thursday to debate and approve the initial framework for the House’s recommended adjustments to the $22.2 billion budget for the upcoming fiscal year. Additional details are expected with the House’s full budget release in the House Appropriations Committee next Tuesday. These could include possible raises for teachers, state employees and retirees in addition to any possible tax and finance changes. A few initial items of note to counties are listed below. NCACC will release a detailed analysis of the House’s budget after it is approved by the full House, which is expected to be May 20.
  • $30 million in the DHHS budget to meet recommendations by the Governor’s Mental Health Task Force
  • $57 million from addition lottery receipts for non-instructional personnel, making this budget item fully supported by lottery funds
  • At least $11 million for state and county child welfare services training, oversight, accountability and program improvement, including $8.6 million for federal improvement plan implementation
  • $3 million from the Department of Environmental Quality for water and sewer projects for public schools
  • An additional $640,000 for state crime lab equipment and $2 million to outsource forensic analysis
  • Restores authorization for state supported driver's education
  • $11.6 million for additional textbooks and digital materials

Bill addresses local funding for charter schools

A bill filed in the House this week clarifies how charter schools receive local funds. H1111 (State and Local Funds for Charter Schools), sponsored by Reps. Charles Jeter, Linda Johnson, Leo Daughtry and Robert Reives, addresses state and local funding for charter schools. With respect to local funding, the bill states that the board of county commissioners shall appropriate current expense funds directly to a charter school on the same per pupil basis as the county LEA. The bill would also authorize charter schools to request capital outlay funding from the board of county commissioners.

To receive capital funds, the board of directors of the charter school must enter into an agreement with the county providing that the charter school will maintain a student enrollment of at least 50% of the students residing in the LEA located in the county until such time as the charter fully repays the capital funds provided. If the charter school fails to meet the enrollment requirement or if the facility is no longer used for public school purposes, the facility will revert to the county.  

H1111 additionally provides that charter schools would not be entitled to sue counties or to receive any sales tax revenue for capital needs from the amounts in Articles 40 and 42 that are restricted to public school capital outlay purposes. The bill has been referred to the House Committee on Rules.

Bill gives schools greater flexibility to lease facilities

A bill introduced in the Senate would give school boards greater flexibility to enter into operating leases with private developers for school buildings and other facilities. S554 (School Building Lease Reform), sponsored  by Sens. Wesley Meredith, David Curtis and Jerry Tillman, states that before entering into an operating lease, a local board of education must publish a notice of its intent at least 10 days in advance of the meeting at which the action will be considered. The bill provides that in addition to the date, time and place of the meeting, the notice shall indicate whether the board intends to act to approve the proposed lease at the meeting. Prior to authorizing such a lease, the school board must adopt a resolution declaring that it is “in the local administrative unit’s best interests under all circumstances” to enter into the lease agreement and that the private developer is qualified to provide the products and services as agreed upon in the proposed lease. 
S554 would also restore a statutory provision that allows school boards to enter into capital leases for a term of up to 40 years. County commissioner approval would still be required for any lease of three years or more. A private developer of a school leased to a county or local school board for a term equal to or greater than 10 years would be eligible for an annual refund of sales and use taxes paid. The bill further provides that lease payments may be funded from staff and operational savings achieved through the consolidation of existing school facilities into new or renovated facilities leased from a private developer.  

S554 has been referred to the Senate Committee on Education/Higher Education, with a serial referral to Senate Finance.

Proposed legislation addresses Medicaid processing

An interim report on Medicaid processing timeliness from the Program Evaluation Oversight Committee has resulted in legislation that sets up a multi-step system for improving timeliness, including the possible takeover of application processing similar to the current framework for child welfare services. H1087/S841 (Medicaid Eligibility Timeliness/Funds) sets this process in motion if a county DSS has consistent issues meeting timeliness requirements for Medicaid applications. The first step would be a 12-18 month joint corrective action plan that would include specific responsibilities and actions taken by DHHS and the county. If a county does not meet targets in the plan, following a 90-day notice, DHHS will take over processing until timeliness improves. A county can appeal this takeover determination to the Office of Administrative Hearings. The House referred H1087 to the Appropriations Committee. The Senate referred S841 to the Health Care and Appropriations Committees. Neither bill has been scheduled in a committee.

Other bill of interest

  • S734 (Statewide Standing Order/Opioid Antagonist) - This bill was approved by the Senate Judiciary I Committee on Thursday and has been placed on the Senate calendar for next Tuesday. The bill authorizes the State Health Director to prescribe an opioid overdose inhibitor by a statewide standing order, which makes it easier for a person to go to a pharmacy to obtain naloxone hydrochloride, a drug that blocks the effects of opioids, if that person has good faith belief that a family member, friend or other person may be at risk of an overdose.

This Week at the General Assembly

This Week at the General Assembly is on hiatus this week. Visit our YouTube channel at or our website to view the latest episode of This Week at the General Assembly.
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