North Carolina April 3, 2015 Legislative Update
For the first time we can recall the House and Senate will take Spring Break next week. The House announced last month it will have Spring Break while the Senate announced it will hold skeletal sessions with no recorded votes. For clarification, both chambers will do the exact same thing by holding a “skeletal session” twice next week in order to meet the constitutional obligation to not recess longer than 3 days while in session. We’ve heard the best place to lobby next week is Augusta.
This week chaos ensued in the House as it adopted the House Permanent Rules to govern its activities. The Rules determine how the members may participate in making laws and how legislation will flow. The House uses Mason’s Manual of Legislative Procedure as its guide like most state legislative bodies. The Rules are introduced and debated in a Resolution that the House (or Senate) adopts without consideration by the other chamber or interference from the Governor; it uses the committee process and requires approval by a simple majority on the House floor. Once the Rules are approved, suspension of those rules requires a 2/3 vote of the members present and voting. That means, in the House, it takes 61 votes (or a simple majority of those present and voting) to create the Rules and 80 votes (or a 2/3 majority of those present and voting) to rescind or alter the rules. During long House Sessions there is often unanimous support to suspend Rules that prohibit food in the chamber or require men to wear coats on the House floor. More contentious is the suspending of rules regarding adding a bill to that day’s calendar without notice. The Rules also contain all those creative and nontraditional ways to get things done that we’re so fond of.
Speaker Moore prefers more transparency than his predecessor and is seeking to keep substantive lawmaking out of the budget document, and non-germane provisions out of conference reports. A popular change allows a House bill sponsor to remove his name from a bill if the Senate has changed it substantially – or even completely; many very controversial laws are passed attached to the bills of unsupportive sponsors causing these members trouble back home with their constituents. The House Permanent Rules also allow House Members to sponsor 15 bills rather than 10, with a bill introduction deadline of April 14th rather than yesterday. Just when the we thought we could relax….
In typical fashion the highly disciplined Senate proposed and adopted the Senate Permanent Rules on January 14th when the legislature held its organizational session.
Sales Tax Redistribution and Proposed Increases
Two bills have been filed in the Senate to promote the Senate Republican plan of redistributing sales tax revenue to rural counties while taking it from urban ones by focusing on county population rather than point of sale. This is the clearest example we’ve seen of the anticipated rise in fighting between rural and urban North Carolina. After announcing the plan, urban counties got fired up, so the bill sponsors have softened the blow by including provisions to address that concern by allowing urban counties to raise taxes. The House takes a gentler approach.
The Senate approach:
SB 608—Simple and Fair Formula for Sales Tax Distribution – was filed by Senator Rucho. Because of reaction from urban counties, Rucho has said that he wants a provision that will prevent counties’ revenues from falling below their 2013-2014 levels. To do this he said that the state will need an additional $66 million in revenues. How does the state get more revenue, you ask? More taxes, of course! Senate Republicans are discussing options of expanding the sales tax to services. Examples we’re all familiar with are barbers, lawn services, attorneys…
SB 369 – Sales Tax Fairness Act – was filed by Senator Brown with 11 other Senate Republicans signing on as sponsors. This bill would address the loss in sales tax revenue from urban counties by allowing counties to raise local sales taxes by a quarter-cent without a voter referendum.
The House approach:
A bill was also filed in the House to address the lack in revenue for rural counties. HB 518 – County Sales Tax Flexibility – does not redistribute the sales tax revenues. Instead, it allows all counties to raise local sales taxes by a quarter-cent without a referendum in most cases.
Historic Tax Credit
HB 152 – New Historic Preservation Tax Creditpassed the House and was sent to the Senate where it was referred to the Ways and Means Committee which rarely meets. Committee Chairman Sen. Apodaca described the committee as a graveyard which offered little hope to supporters of the tax credit. However, House bill sponsor Rep. Ross suggested there are “graveyards” in both chambers. So this is how it’s going to be….
HB 195 – An Act Amending the North Carolina Pharmacy Practice Act to Allow for the Substitution of an Interchangeable Biological Product overwhelmingly passed the House and goes to the Senate. The bill allows generic alternatives to “biologics” to be dispensed by pharmacists thereby significantly reducing the price of some costly treatments to cancers and autoimmune diseases. The bill was a consensus effort of health insurance plans, pharmaceutical companies and pharmacists – a rare coalition.
Last week we told you about the Senate bill that would remove the religious exemption from immunization requirements and the resulting onslaught of angry anti-vaccine parents in the hallways of the General Assembly. Well, it looks as if protesting from the general public actually works… Sponsors of the controversial bill along with Senate Leadership released a statement this week that read, “After hearing serious concerns about stricter vaccine and immunization requirements from our constituents and from citizens across the state, we have decided we will not move forward with Senate Bill 346. The vaccine bill is dead.” We’ve never seen anything like this; the moral of the story: Don’t mess with angry moms.
Wake County Commissioners Redistricted
SB 181 – Wake County Commissioner Districts– was passed by the House after the Senate approved it last month. The bill changes the way Wake County elects its Commission by establishing districts rather than the current county-wide races which resulted in a Democrat sweep last November. The districts will overlay the newly-formed Wake County School Board districts. In addition, two new regional districts will also be created, one representing Raleigh and the other representing Wake County’s rural and suburban areas. No Democratic lawmakers supported the bill in either chamber. Because this is a local bill, it does not require the governor’s signature and becomes law upon Ratification.