Mar 17, 2017

NCGA Week in Review

The realities of a Republican led legislature and Democratic Governor became clearer this week as Gov. Roy Cooper addressed the legislature with his state-of-the-state speech and vetoed a bill for the first time. The legislature stayed busy this week as bill filing deadlines are quickly approaching. Bills concerning bees, basketball, and body piercing caught the attention of many, as well as a more traditional legislative topic – tax reform.

Appointments and Confirmations

While the state awaits a judgment from the Superior Court, the Senate moved forward this week in confirming the Governor’s cabinet picks. This week, two of Gov. Cooper’s Secretaries received confirmation from the Senate. Erik Hooks was confirmed to serve as Secretary of the Department of Public Safety and Jim Trogdon was confirmed as the Secretary of the Department of Transportation. Additionally, Senate committees issued subpoenas for acting Secretaries Machelle Sanders, Department of Administration, and Tony Copeland, Department of Commerce, to appear before their respective confirmation committees.

Additionally, the Senate confirmed Darrell Allison, the Executive Director of Parents for Educational Freedom in North Carolina and NC Central University alumnus, to fill a vacancy on the UNC Board of Governors.

Body Art Regulations

Though tattoo artists are required to hold permits and are subject to inspections, under current law piercers are held to no health and safety regulations.

HB 250 / SB 256: Body Art Regulation Changes would add body piercings, branding, scarification and subdermal implantations to the definition of body art, along with tattooing. All body art professionals would be required to hold a permit with their local health board and would be subject to inspections. Supporters of the bill argue that the risk of transmitting blood-borne pathogens necessitates additional regulations.

The House version of the bill, sponsored by Reps. Kevin Corbin (R-Macon), Bert Jones (R-Rockingham), and Greg Murphy (R-Pitt), passed the House Committee on Health this week and has been referred to Finance. Sponsored by Sens. Jim Davis (R-Macon) and Valerie Foushee (D-Orange), the Senate version has been referred to the Committee on Rules and Operations of the Senate.

Governor Cooper Vetoes Partisan Court Bill

Gov. Cooper issued his first veto yesterday afternoon, objecting to HB 100: Restore Partisan Elections/ Sup. & Dist. Court, which would have made elections for district and superior court seats partisan. In his message, Gov. Cooper cites his concerns that making the courts more partisan takes away from the issues heard in the court and that voters should elect judges based upon experience and not party, and cites concerns about unaffiliated candidate having a difficult path getting on the ballot. Overriding a veto requires the approval of three-fifths of both chambers. With 74 seats in the House and 35 in the Senate, the GOP could override the Governor’s veto if they choose to.

HB 2 & Basketball

Following the fallout of HB 2, the “bathroom bill,” the National Collegiate Athletic Association (NCAA) and Atlantic Coast Conference (ACC) moved championship tournaments and other events from NC last year citing concerns about inclusion and civil-rights protections.

This week, Republican Reps. Mark Brody (Union), Chris Millis (Pender), Larry Yarborough (Person) and Beverly Boswell (Dare), called the NCAA and ACC’s tax exempt status into question with HB 328: Athletic Associations Accountability Act. The bill would require the Speaker of the House and President Pro Tempore of the Senate to file a tax-exempt organization complaint with the Internal Revenue Service against both the NCAA and ACC. Primary bill sponsor Rep. Brody argues that the organizations have lobbied against HB 2 and as a result are not eligible for tax-exempt status. The bill has been referred to the House Committee on Judiciary.

House & Senate Tackle Tax Reform

This week, both the House and Senate released their tax proposals and the Senate passed a bill that proposed to constitutionally cap the personal income tax rate.

HB 356: Tax Reduction Act 2017 would:

  • Increase the standard deduction for personal income taxes. The standard deduction would be raised from $17,500 to $18,500 for married couples filing jointly, with similar increases for other tax status categories. The legislature increased the standard deduction last year in a continued effort to reduce the tax burden.
  • Exempt mill machinery from retail sales and use taxes.
  • Simplify franchise tax calculation by eliminating a current requirement that a corporation determine its franchise tax base by calculating the appraised value of its real and tangible property and its total actual investment in tangible property.

HB 356, which is sponsored by Republican Reps. John Szoka (Cumberland), Jason Saine (Lincoln), Bill Brawley (Mecklenburg) and Susan Martin (Wilson) has been referred to the House Committee on Finance.

Though the Senate has not filed a bill yet, they have released the following proposal:

  • Reducing personal and corporate income tax rates to 5.35% and 2.75% respectively.
  • Increasing the standard deduction from $17,500 to $20,000 for a married couple filing jointly, with similar increases for other tax categories.
  • Increasing the current tax credit for families with children that earn less than $120,000 annually.
  • Increasing the amount of mortgage interest and property taxes that can be deducted from $20,000 to $22,000.
  • Switching to market based sourcing for tax calculation, which relies on income received by customers in the state instead of employment and capital investments.

Senate Finance Chairman Tommy Tucker (R-Union) stated that the Senate plan would save businesses and individual taxpayers $1 billion in its first year. House Finance Chairman Jason Saine (R-Lincoln) reported that the House bill would save businesses $135.8 million per year, while individual taxpayers would save $64.5 million in the 2017-18 fiscal year and $124 million in the following year.

Additionally, by a 36-13 vote, the Senate passed SB 75: Const. Amd. – Max Income Tax Rate of 5.5% on Tuesday. Sponsored by Sens. Tommy Tucker (R-Union), Andrew Brock (R-Davie) and Jerry Tillman (R-Randolph), SB 75 would constitutionally cap state income tax rate at 5.5%. The bill has now been sent to the House Committee on Finance.

Saving the Bees

As the plight of the bees garnered national media attention this week through a breakfast staple and its mascot, Reps. Pricey Harrison (D-Guilford), Chuck McGrady (R-Henderson), Grier Martin (D-Wake) and Mitchell Setzer (R-Catawba), filed HB 363: The Pollinator Protection Act on Wednesday. The bill would allow neonicotinoids, a class of insecticide and the most widely used pesticide in the US, to be used only by farmers, licensed applicators and veterinarians and would ban the use by unlicensed home, garden and landscape application, which currently constitutes 25% of their use. Neonicotinoids are associated with the declining bee population worldwide – 44% of beehives in the US were lost in 2015, which could have long term negative impacts on produce production capabilities. HB 363 has been referred to the House Committee on Environment.