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NCACC Legislative Bulletin
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Temporary budget extended through Aug. 31

With the temporary state budget, or “continuing resolution,” expiring today, legislators this week agreed on an extension until Aug. 31. Ideally, a biennial state budget would be in place by June 30, before the beginning of the fiscal year on July 1. Frequently, legislatures have had to enact a so-called “CR” to keep state government operating until agreement is reached on a final budget. Signs coming out of the legislature, including an uptick in meetings between various appropriations committee chairs and comments from leadership, point to the possibility of achieving such an agreement by the end of the month.

Once the General Assembly passes the budget bill, it usually wraps up other business quickly and adjourns. However, this year several large policy issues remain in play, including local sales tax redistribution, Medicaid reform and constitutional amendments regarding state finances, that may keep legislators here somewhat longer.

Senate gives final approval to local sales tax plan

The Senate on Tuesday gave final approval to H117 (NC Competes Act), which contains local sales tax redistribution and economic development incentives pulled out of Senate budget last week to spur budget negotiations. Details of the redistribution plan were reported in last week's bulletin. Sen. Harry Brown of Onslow sponsored a rally at the legislative building Wednesday to encourage the House to support the redistribution plan. Local officials in support of redistribution attended the rally, while others in opposition to the changes were also at legislature to express their views.
 
The House bill now returns to that chamber for it to accept or reject the changes. It did not receive a hearing this week but was discussed frequently in various informal conversations between legislators, local officials and other stakeholders. We are hearing that the House is split on the issue and many members are still undecided.

August recess a time for Federal advocacy

Congress annually breaks from all legislative activity during the month of August to allow members to spend time in their Congressional districts to connect with constituents and potential voters. Many lawmakers will hold town meetings or participate in local civic events. As a result, August provides an ideal time to meet with your Members of Congress locally, saving both time and money compared to scheduling the same meeting in Washington, D.C. Take advantage of this opportunity to reinforce the issues you discussed with them early in the year, thank them for items accomplished and request action needed before the end of the First Session.

The NCACC's federal advocacy partners, Strategics, has compiled a tip sheet with information on how county officials can best advocate for their local needs with their Congressional representtives.

House expands use of transit sales tax for 10 counties

This week the House approved H394 (Increase Options for Local Option Sales Tax), a local bill that gives flexibility to 10 counties to use their quarter-cent sales tax for transit for school construction instead. Voters in the county must approve the tax by referendum prior to enactment. The bill has generated great discussion on the need for local revenue options as well as the need for additional school construction resources, and many members spoke in favor of turning the concept into a statewide bill.

While local bills may impact no more than 15 counties, NCACC has used this discussion to highlight H518 (County Sales Tax Flexibility), a statewide bill that gives similar flexibility to counties by resolution or referendum. As introduced, H394 only applied to Robeson County, but a series of floor amendments added Ashe, Columbus, Franklin, Hoke, Nash, Richmond, Rutherford, Scotland and Watauga counties. The bill was approved on Thursday by a 106-4 vote and goes to the Senate for consideration.

County Caucus hears about critical issues

The legislative County Caucus met Wednesday afternoon to hear from a county commissioner and two county staff members on budget issues affecting counties. Surry County Commissioner Larry Phillips (pictured) spoke on the importance of state assistance with economic development incentives. Phillips served as the chair of the NCACC Economic Development Task Force in 2014. Lee County Finance Director Lisa Minter discussed budget issues facing counties entering the new fiscal year, and Lincoln County DSS Director Susan McCracken shared with legislators the needs in her county on child and adult protective services. Each spoke about budget priorities from a unique perspective. Following the presentations they answered questions and heard remarks from legislators. NCACC thanks Commissioner Phillips, Lisa Minter and Susan McCracken for their time and expertise.

The County Caucus is made up of former county commissioners and others interested in county issues who are now serving in the General Assembly. Attendance at Wednesday’s meeting included former commissioners and a former county attorney.

Senate approves plan to restrict state spending

After three days of passionate debate, legislation that would place several state constitutional amendments before voters next fall passed the Senate Wednesday. S607 (Taxpayer Protection Act) makes three substantial changes to how the state raises and spends funds. It would reduce the personal and corporate tax rate cap from 10 to five percent, ties annual growth in the state budget to a formula using growth in population and inflation, and establishes a new “rainy day fund” that would require a two-thirds vote in both the House and Senate to access. An amendment to the bill rolled the three separate referendum votes into one, requiring voters to choose either all three amendments or none.
 
State Treasurer Janet Cowell opposes the legislation, saying it puts the state’s AAA bond rating in jeopardy. House leadership has said that chamber may not consider the changes before the session adjourns.

House bond package gets chilly reception in Senate

The bond package approved by the House lastweek was referred to the Senate’s Ways and Means Committee on Monday, a committee typically used for bills that the chamber views with disfavor. H943 (Connect NC Bond Act of 2015) would put a $2.85 billion statewide bond to voters in a referendum in March 2016. The bond would be the first of its kind in 15 years and would fund various infrastructure projects, including $500 million for public school construction as well as funds for community colleges, universities and parks.

House approves plan for regulating drones

S446 (Dealer Loaners/Unmanned Aircraft/Brunswick Co.) passed the House this week. The bill would clarify the authority of the state Chief Information Officer to approve the procurement or operation of an unmanned aircraft system (UAS) by a state or local government entity. Current law requires approval of the State CIO to purchase or operate a UAS or to disclose personal information obtained through the use of UAS until Dec. 31, 2015.  The law further provides that an agent or agency of the state or a local government may not operate an unmanned aircraft until the knowledge and skills test required to be developed by the Aviation Division of the Department of Transportation is implemented.

Under S446, a state or local government entity would be able to procure or operate an unmanned aircraft before the knowledge and skills test is implemented, provided the entity receives approval from the State CIO. After the date the test is implemented, both the CIO approval (until Dec. 31, 2015) and successful completion of the knowledge and skills test would be required to obtain or operate a UAS. The bill also makes a number of conforming changes to align state law governing UAS with federal regulations. S446 now goes to the Senate for concurrence.

Senate sends Medicaid reform proposal to House

On Tuesday, the Senate passed the latest version of its Medicaid reform proposal, approving H372 (Medicaid Transformation/HIE/Primary Care/Funds) 34-10. Last week the Senate amended its modified plan into the House’s Medicaid reform bill, H372. The Senate’s bill would transition the state’s Medicaid program from a fee-for-service model to a fully capitated system with commercial insurers and provider-led entities delivering services statewide or in different regions across the state. Service providers would contract with existing LME/MCOs to deliver behavioral health services. This version also sets up a new, cabinet level Department of Medicaid to implement the plan 12 months after federal approval of the new system. The bill now returns to the House to concur with or reject the Senate’s changes.

Bill to protect emergency personnel ID info approved

A bill that would prohibit the disclosure of certain personal information of local law enforcement officers is on its way to the Gov. Pat McCrory. S699 (Protect LEO Home Address/Other Information) provides that a city or county law enforcement officer’s residence, emergency contact information, and other specified types of personal identifying information may not be disclosed as part of the officer’s publicly available personnel record. The House this week amended the bill to include within these protections the mobile telephone numbers issued by a local, county or State government to a sworn officer or non-sworn employee of a public law enforcement agency, a fire department employee, or any emergency response personnel. The Senate concurred with the House changes.

Other bills of interest

  • The House and Senate both have approved the conference report on H512 (Amend/Clarify Back-up PSAP Requirements). The final bill as agreed upon by the conferees removes the language added in the Senate that would preclude counties from charging cities for providing 911 dispatch services. The remaining provisions in the bill extend the time for implementing a back-up PSAP plan and require the 911 Board to study the option of developing a master purchasing list for eligible 911 expenses. The language stricken from H512 still exists in H730 (County Provide 911 Dispatch Services), which passed the House in April and was sent to Senate Finance.  Given that H730 made the crossover deadline, it remains eligible for consideration this session and in the short session. The conference report for H512 was presented to the Governor for signature on Wednesday. NCACC would again like to thank Reps. Susan Martin and Jason Saine for taking the counties’ concerns into consideration during conference negotiations.
  • The House voted 102-8 on Wednesday to concur with the Senate’s changes to H168 (Exempt Builder’s Inventory), a bill we have tracked since the start of session. The bill removes certain commercial and residential property improvements from local property tax bases. NCACC worked with bill sponsors in the House and Senate to address county concerns with the concept; however, the final bill does carry a negative impact to county property tax revenues. The bill now goes to the Governor for his consideration.
  • S332 (Register of Deeds-POA Indexing Fees), which imposes an additional $2 fee for each entity listed in an instrument containing excessive recording data, i.e. one with more than 20 distinct entities, passed the House this week and has been sent to the Senate for concurrence. During a discussion of the bill in the House Rules Committee, Sen. Warren Daniel, the bill sponsor, stated that the rationale for the bill was to account for the additional staff time required to index and cross-index names on documents with excessive recording data. S332 has been placed on the Senate calendar for Tuesday, August 18.
  • S386 (Register of Deeds/UCC Recording Fees) was signed into law this week. The bill specifies fee amounts for filing instruments covered by the Uniform Commercial Code (UCC) with Registers of Deeds. The UCC regulates the recording of security agreements in which a financial loan is secured by collateral. S386 becomes effective Oct. 1, 2015 and applies to instruments registered on or after that date.
  • The House Transportation Committee approved a bill that would place regulations on transportation network services, such as Uber, Lyft, and Sidecar. Rep. Bill Brawley, who sponsored the House companion bill to S541 (Regulate Transportation Network Services), explained to the committee that the intent of the bill is to prevent cities from regulating these services in the same way as they regulate the taxicab industry. S541 received unanimous support from the Transportation committee and was referred to House Finance.

This Week at the General Assembly

This Week at the General Assembly is produced regularly while the General Assembly in in session. Visit our YouTube channel at www.youtube.com/ncacc1908 or our website to view the latest episode of This Week at the General Assembly.

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