NCACC Legislative Brief
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Week of June 18, 2018

This week, the rapid pace of session slowed significantly compared to last week. Few legislators were physically on site the first part of the week, and there were no long evening sessions. Having completed most of their work on public bills last week, legislators focused on local bills and several constitutional amendments. Leadership said publicly that the short session will not go past June, so we anticipate adjournment no later than next Friday evening.

Amendment Lowering Income Tax Rate Cap Passes House Committee

This week, a House committee debated and approved legislation, Senate Bill 75, which would place a constitutional amendment on the ballot, to cap the maximum tax rate on both personal and corporate income taxes at 5.5 percent. The North Carolina Constitution currently provides for an income tax rate cap of 10 percent. The existing tax rate on personal income is 5.499 percent and it is set to be further reduced to 5.25 percent in 2019. The current tax rate on corporate income is 3 percent, which is set to be reduced to 2.5 percent in 2019. The bill has already passed the Senate and the House Rules committee, and could be heard on the House floor next week.

If the General Assembly passes Senate Bill 75, the proposed constitutional amendment will be on the statewide general election ballot on November 6, 2018. In order for it to be enacted, it must be approved by a majority of voters.

The NCACC has concerns about potential long-term consequences of this cap.  Further limiting state revenue options in the state constitution could potentially shift revenue pressures to the county level. If you have any concerns on how this proposed constitutional amendment could impact your county, we encourage you to contact your legislators.

Committee Discusses Constitutional Amendment to Expand Victims’ Rights

On Thursday afternoon, the Senate Judiciary Committee met to discuss House Bill 551, Strengthening Victims’ Rights. The legislation would place an amendment on the November ballot that would change the section of the state constitution that guarantees certain rights to crime victims and provides additional protections. The proposed changes are inspired by a national movement to enact comprehensive victims’ rights. The initiative, known as  “Marsy’s Law”, began in California to address concerns raised by surviving family members of a murder victim.

House Bill 551 would amend the state constitution by expanding the type of offenses that trigger victims’ rights. It would also guarantee victims the following rights:

  • To be treated with dignity and respect
  • Reasonable, accurate and timely notice, upon request
  • To be present at any proceeding and to be heard at certain proceedings
  • Full restitution in a timely manner
  • Information upon request
  • To reasonably confer with the prosecutor

Earlier versions of the proposal guaranteed reasonable protection for the victim from the accused. This was removed from the most recent version after local law enforcement and local governments raised concerns about liability and practicability. During committee discussion, legislators raised questions about the impact the new reporting requirements would have on the court system. The bill was presented for discussion only, and will be heard formally in committee for a vote early next week.

Other Constitutional Amendments Under Consideration This Session

In addition, several other proposed constitutional amendments saw action in the General Assembly this week. Each of the following constitutional amendments would be placed on the November 2018 general election ballot if approved in each chamber of the General Assembly by a 3/5 margin. They would then require approval by a majority of North Carolina voters in order to be ratified.

  • Require Photo ID to VoteHouse Bill 1092 requires every individual voting in person to present photo identification. Should the amendment be approved by voters, legislators would debate and approve the manner in which the new photo ID requirement would be implemented. The bill has been heard in a House committee and is expected to be voted on by the House early next week before being sent over to the Senate for consideration.
  • Protect Right to Hunt and FishSenate Bill 677 provides the people of North Carolina the right to hunt, fish, and harvest wildlife. Under the amendment, the General Assembly could still pass laws regulating hunting and fishing. The proposed amendment also includes language stating the amendment is not to be construed to modify any current provision of law relating to public safety, trespass, property rights, eminent domain, or the regulation of commercial activities. This legislation has passed the Senate and one House committee. It is expected to be voted on by the House early next week.
  • Judicial Vacancy Sunshine AmendmentSenate Bill 814 would remove the Governor’s authority to make appointments when certain judicial vacancies occur. The bill provides for a nonpartisan judicial merit commission for the nomination and recommendation of nominees when filling judicial vacancies in the following manner:
    • Statewide nominations of candidates are made to the Commission.
    • Commission vets names and submits qualified nominations to General Assembly.
    • General Assembly must submit at least two nominations to Governor for appointment.
    • If the Governor fails to appoint, the General Assembly decides. If the General Assembly is not in session, the Chief Justice makes the appointment.

The bill currently resides in a Senate committee and, though discussed, has not received a vote by that committee.

Legislation With Fiscal Impacts to Counties Still Awaiting Vote

A bill we mentioned in this week’s supplemental brief has not been heard on the House floor as expected. Instead, it was referred back to the House Rules Committee. The most recent version of the legislation - Senate Bill 153 - appeared in the House at the end of last week and contains a handful of provisions of note to counties. Section 2 of the bill sets up a special separation allowance for firefighters and rescue squad workers that could cost local governments $298 million over the next ten years. This analysis is from a legislative retirement note attached to House Bill 340 which is now section 2 of Senate Bill 153. The bill contains other provisions of concern to counties. The expanded commercial cemetery property tax exemption carries a $1 million impact to local governments according to the legislative fiscal analysis. Furthermore, the bill includes a property tax exclusion for the unmarried spouses of fallen first responders that carries a $700,000 impact to local governments across the state. The bill could move out of House Rules this week and on to the House floor. NCACC asks our members to contact their legislators with concerns on this legislation.

Bill Establishing a Work Group to Study Criminal Code Includes Requirements for Counties

House Bill 379, Recodification Working Group, is based on a recommendation from the Joint Legislative Administrative Procedure Oversight Committee and the Joint Legislative Oversight Committee on Justice and Public Safety. The legislation is part of a long-term project to reorganize North Carolina’s Criminal Code and would, among other things, require local governments to create a list of ordinances that are subject to criminal punishment pursuant to G.S. 14-4(a) and submit the list by December 1, 2018.

The bill was ratified and sent to the Governor last week.

U.S. Supreme Court Rules for State in Remote Sales Tax Case

In a 5-4 decision, the U.S. Supreme Court issued its opinion yesterday in the South Dakota v. Wayfair case, upholding South Dakota’s law that requires out-of-state retailers meeting certain transaction thresholds to collect and remit sales tax. In deciding for the state, the Supreme Court overruled previous decisions prohibiting retailers without a physical presence in a state from collecting sales tax, noting in Wayfair that “physical presence is not necessary to create a substantial nexus.” In response to the decision, the states and Congress could follow a variety of paths. Support for the Marketplace Fairness Act at the federal level is one of the NCACC’s federal legislative goals, and the state legislature could choose to pursue legislation similar to Senate Bill 81, which passed the state Senate last year and addresses sales tax collection for remote sales.

You can click here to view the most recent episode of This Week at the General Assembly, the NCACC's made for government television show on legislation affecting county governments in the North Carolina General Assembly.

North Carolina Counties' Five Priority Goals

  1. PE-1: Seek legislation to establish a new state-county partnership to address statewide public school capital challenges -- including but not limited to maintenance, renovation, construction and debt -- through a dedicated, stable funding stream that is consistent from county to county and sufficient to meet the school facility needs of all 100 counties.
  2. PE-2: Seek legislation to repeal the statutory authority under N.C. Gen. Stat. 115C-431(c) that allows a local school board to file suit against a county board of commissioners over county appropriations for education.
  3. TF-1: Support efforts to preserve and expand the existing local revenue base of counties, and oppose efforts to divert to the state fees or taxes currently allocated to the counties to the state. Oppose efforts to erode existing county revenue streams and authorize local option revenue sources already given to any other jurisdiction.
  4. GG-3: Seek legislation, funding, and other efforts to expand digital infrastructure/broadband capability to the un-served and under-served areas of the state.
  5. PE-4: Support legislation providing flexibility to align K-12 and community college calendar.
Copyright © 2018 North Carolina Association of County Commissioners, All rights reserved.

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