Representative Harry Warren
♦Almost all Committee meetings were cancelled this week because so many of the House members serve on either the full Appropriations Committee or one of the subcommittees which were involved in finalizing the House budget. It would have been too difficult to populate the standing committees with the remaining members. Additionally, all members would not have had the opportunity to offer input or, in some cases, present a bill. The primary focus this week was to finalize the House budget proposal and to pass HB 998 – The Tax Simplification and Reduction Act out of the House and send it to the Senate. This tax revision proposal from the House has some significant differences from the version put forth by the Senate. Here are some of the highlights from the bill:
HB 998 – Tax Simplification and Reduction Act. This proposal reduces individual and business tax rates. In order to offset the revenue reductions created by the relaxation of the Corporate Income Tax (CIT) and the Personal Income Tax (PIT) the bill mandates the sun setting of certain tax exemptions and includes an expansion of the state sales tax to be levied on certain services that currently are not taxed.
· The current tiered tax structure of the PIT (6% -7% & 7.75%) would be replaced by a flat rate of 5.9% applicable to all taxpayers, effective January 1, 2014.
· The Corporate Tax Rate would decline over a 5-year period, going from 6.9% to 5.4%, also beginning January 1, 2014.
· It reduces the Corporate Franchise Tax rate from $1.50 per $1,000 to $1.35 per $1,000, effective January 1, 2015.
· It repeals the gross receipts franchise tax on entertainment and expands the sales tax base to include gross receipts derived from admission charges to entertainment venues, effective July 1, 2014.
· It repeals the gross receipts franchise tax on utilities and repeals the preferential sales tax rates on electricity, effective July 1, 2014.
· The bill repeals the excise tax on piped natural gas and repeals the sales tax exemption on piped natural gas, effective July 1, 2014.
· It expands the sales tax base to include service contracts and alterations, repairs, maintenance and installation of tangible personal property, effective July 1, 2014.
The second most prominent bill of the week was SB 402 –The Appropriations Act of 2013. This was the Senate’s budget proposal, reworked by the House. The differences in fiscal philosophy were somewhat dramatic on some issues and strikingly similar on others. In the final analysis, the House was more sympathetic to K-12 education and a variety of other social and conservation concerns than the Senate. It was in the same general revenue range ($20.57 billion) as the Senate’s ($20.6 billion) and the Governor’s budgets.
The bill was discussed/debated in the House Appropriations Committee on Tuesday for almost 10 hours and was subjected to around 30 amendment submissions, many of which were accepted. It was then discussed for an additional hour in the House Finance Committee on Wednesday morning. The House convened at noon on Wednesday and after dispatching several smaller bills, began debating SB 402 around 12:30 pm.
After the bill was read in by the clerk, debate began on more amendments to the bill. The sometimes heated discussions continued until a vote was taken. The bill passed its second reading on a vote of 77 to 41. The session adjourned at 8:00 pm.
Debate on the bill began again on Thursday morning at 9:00 am and ended at12:45 pm with a vote of 77 to 40 on its third reading. The bill now returns to the Senate for confirmation.
Some highlights of the bill:
EDUCATION: In regards to K-12 Education, the House allocated approximately $66 million more than the Senate. The 2013-2014 allocation is set at $7,905,610,301 and for 2014 -2015 is at $8,044,189,900.
The House provides five additional vacation days for teachers and state employees.
The House also retains a salary supplement for teachers with advanced degrees when those degrees are a requirement of their position.
The budget provides funding for the Opportunity Scholarship Act that offers up to $4,200 reimbursement for parents who opt to have their child attend a private school that would address their child’s learning needs better than they believe a traditional public school is doing. The funding for the first year is $10 million and increases up to $40 million in the second year of the biennium.
The Teaching Fellows Program was funded.
Teacher Assistants were funded, although there was a small reduction.
The NC GAP (Guaranteed Admission Program) was funded.
Parents for Education Freedom would be awarded $464,100 to develop charter schools in rural areas.
Community Colleges would receive less from the House ($13 million) than the Senate provided. For 2013-2014 ($1,012,637,467) and in 2014-2015 ($1,009,089,167). There is a one–time $10 million allocation for systems budget.
The UNC system would also see less from the House proposal (about $53 million) receiving $2,560,018,594 in 2013-2014 and $2,586,827,274 in 2015-2016. There would also be an increase in tuition for out-of-state students.
Health and Human Services would receive funding in 2013-2014 for $5,020,585,790 and in 2015–2016 they would receive $5,209,223,293. This represents an increase of almost $40 million more than the Senate version.
Justice and Public Safety would receive $2,354,996,842 in 2013-2014 and $2,334,961,131 in 2015-2016. This increases the JPS appropriation over the Senate budget by approximately $24 million.
Here are some of the fee highlights of the bill. You can use the link above to review the entire text of the bill.
· Increases fees by $60 million, ($52.2 million of which would impact the General Fund and $5.8 that would impact various special funds).
· Restores the transitional “hold harmless” payments to local governments for one year for repealed reimbursements.
This week, I was able to be present with Representative Pat Hurley and representative Phil Sheppard to witness Governor McCrory sign the cursive writing bill. The three of us were the Primary Sponsors of HB 146 – Back to Basics.
Additionally, I presented HB 333 –Sex Offender Residency/Regis. Amendments to the Senate Judiciary II Committeeon Thursday, where it was given a favorable report and now advances to the Senate Floor.
The Senate is still waiting on the Court decision regarding Section 5 of the Voting Rights Act before acting on HB 589 – VIVA, the Voter ID Bill. The Court decision is expected around the 20th of this month. Voter ID will be finalized before this session adjourns for the year.
Bills of interest presented to the Governor:
SB 489 – Consumer Finance Act Amendment. This bill would modify the maximum interest rate allowed and make various amendments to the North Carolina Consumer Finance Act to ensure continued access to credit.
SB 207 –Maintaining Water & Sewer Fiscal Health. This act authorizes the Local Government Commission to intervene and assume financial control of a water or sewer enterprise system that is not financially self–sustaining and is a financial burden to the unit of local government.
HB 24 - Domestic Violence/Abuser Treatment Program/Amendments. This bill specifies the process for notifying an abuser treatment program if a probationer is directed to attend and clarifies the notification process if the probationer fails to attend or is discharged for violating program rules. It also eliminates the requirement for review hearings every sixty days for defendants on unsupervised probation who are ordered into a treatment program.
SB 211 – Cities/Public Nuisance Notice. The bill allows municipalities to serve a notice of remedial action against chronic violators of public nuisance ordinances by regular mail in addition to registered or certified mail.
The upcoming June Town Hall meeting will be held on Friday, June 21, at the Rowan County Commissioner’s Chambers located at 130 W. Innes St., Salisbury, from 6:00 pm to 7:00 pm. Mark your calendar!
