Weekly Legislative Update
Overview
Activity at the North Carolina General Assembly was limited this week, as committees and lawmakers rested from the labor of meeting last week's crossover deadline. Leaders of the House and Senate worked to refer the over 300 bills passed last week to the committees that will shape legislation as it nears final passage. Work on the State Budget began in earnest this week with House Appropriations subcommittees pouring over a list of recommended cuts that approach draconian levels. In the Senate, few pieces of legislation were on the move, committee meetings were infrequent and a new Senator with a familiar face was sworn into office.
What could be characterized as a "crossover hangover," the after effects of last week's grueling week of lawmaking, was clearly the prevailing mood at the General Assembly this week. The House and Senate leaders worked to sort out the product of last week's work by referring bills to committees that will consider the legislation prior to consideration by the full chamber. To accommodate that work and to allow rank and file lawmakers time to appraise their progress, both the House and Senate held more than one floor session this week where no recorded votes were taken. At the other sessions this week, honorary resolutions, local bills and non-controversial measures were the focus of the chambers' work.
In the Senate, a bill (Senate Bill 80) to authorize an occupancy tax in Jacksonville, NC to fund tourism promotion projects was approved. Other legislation (House Bill 52) would allow Haywood County to change the date for filing a candidacy for the School Board. The perennial legislation (Senate Bill 786) authorizing the UNC system to spend money collected through fees on various projects was approved. Other bills approved by the Senate this week would allow for public financing of municipal political campaigns (House Bill 120) and make changes to the oversight of various licensing boards (House Bill 221). In the House, a collection of local bills was approved in addition to legislation to allow counties to rescind advanced property tax appraisals (House Bill 1350).
The real action in the House this week was the work of the Appropriations subcommittees who are pouring over a long list of potential reductions to the State Budget. The spending targets issued by the chief budget writers would have the House pass a budget plan that totals $17.6 billion, nearly $3 billion less than the budget passed by the General Assembly last year. A proportional share of those cuts would be passed along to each of the subcommittee areas of the budget with Health and Human Services and Education, the two largest sections of the budget, slated to take to biggest cuts. The most publicized of the potential cuts is the elimination of a full week of school that would save the State $100 million on teacher salaries.
House budget writers and House Speaker Joe Hackney (D-Chatham) have maintained that the budget should include no tax increases. However, political handicappers are shopping around a theory that the deep cuts are intended to evoke a hue and cry from the masses who will rise up and demand a tax increase as a better option to the elimination of funding for certain programs. Even if no such ploy is afoot, the potential $2 billion difference between the plan being drafted in the House and that passed by the Senate sets up a very difficult conference committee process. The conference committee would likely be formed by the House and Senate after House passage of the budget legislation. House leaders have set a mid June target for passage of their bill, leaving the conference committee about ten days to resolve differences in the two budget plans prior to the end of the State fiscal year on June 30, 2009.
The Senate received its newest member this week, when Chief Justice Sarah Parker administered the oath of office to former House Speaker Dan Blue (D-Wake). Now-Senator Blue was nominated by a local Democratic Party Committee and appointed to the Senate by Governor Perdue to fill the vacancy created by the death of Senator Vernon Malone (D-Wake). The mid session change creates an intriguing story line for many of the bills introduced by Blue when he was a House member this session. Blue will have the opportunity to champion the bills and vote on the legislation as it moves through the Senate just as he did in the House. Wake County Democratic Party officials residing in Blue's House District will now have to nominate a new member to the House. Blue was appointed to that seat only a few years ago when State Representative Bernard Allen (D-Wake) passed away. Previously, Blue was a member of the House of Representative for over two decades, served two terms as Speaker of the House, and ran unsuccessfully for the Democratic nomination to the US Senate in 2002.
Committee Meetings
Committees of the General Assembly began work on legislation that was sent from the other chamber this week and House Appropriations subcommittees began review of proposed cuts to the State Budget. Although committees were meeting on a much curtailed schedule this week, major legislation was before the House Finance Committee. The Finance Committee reviewed at length legislation (Senate Bill 703) that would grant the State Treasurer more options for investing the State's pension fund. Treasurer Janet Cowell (D-Wake) was on hand to defend the bill she says will allow the State to catch up with targeted return marks amid criticism from Republican members who say the bill grants authority to buy assets that are too risky. The bill passed on a divided vote and now heads to the full House where the House version of the bill was removed from the House Calendar last week under questions from the same critics.
A second meeting of the House Finance Committee this week brought approval of legislation (Senate Bill 575) that would allow a multi-million tax credit to "capital intensive corporations" that locate in and invest in excess of $1 billion in a facility in North Carolina. While State officials have declined to name the company that is being wooed with the legislative tax credit, media reports have identified Apple Computer as the target for recruitment. Changes to the bill made at the meeting yesterday would make an eligible company unable to obtain other grants or tax credits, require maintenance of work force and other reporting requirements. Fiscal researchers report that the Departments of Commerce and Revenue expect that the changes make only one corporation eligible for the "capital intensive corporation" status set out in the bill. The bill was approved and now goes to the full House for consideration.
In the Senate Finance Committee work continued on various legislative proposals. The Committee made no signal, however, that they are ready to return to work on the comprehensive tax reform proposal released one month ago.
In the House Transportation Committee this week, the Committee approved legislation (House Bill 824) that would authorize a special license plate for retired Registers of Deeds. The bill includes an exemption from the standard requirement that 300 special plates be requested before production, to accommodate the relatively small number of eligible Registers. The bill now goes to the House Finance Committee for further review.
In the House Health Committee, lawmakers approved legislation (Senate Bill 324) that would make permanent the waiver that allows for dispensing of hemophilic drugs without prior authorization usually required under the Medicaid program. This bill now goes to the House Appropriations Committee.
Upcoming Meetings
The House and Senate will hold pro-forma sessions in observance of the Memorial Day Holiday on Monday May 25, 2009. Commonly called "skeleton crew," the sessions are held to satisfy the Constitutional requirement that the General Assembly meet at least once every three days while it is in session, or else adjourn by a joint resolution. Generally, only the Wake County members of the House or Senate attend these sessions that consist of an abbreviated agenda and no votes. Lawmakers plan to return to work on Tuesday for a regular schedule of meetings next week.
The articles published in this newsletter are intended only to provide general information on the subjects covered. The contents should not be construed as legal advice or a legal opinion. Readers should consult with legal counsel to obtain specific legal advice based on particular situations.