Representative Harry Warren
♦ As the week began, the focus was primarily on reaching an accord with the Senate regarding a revision of the State’s taxation methodology.
The latest version of the Senate’s tax plan called for:
- Reducing the Personal Income Tax (PIT) to a single flat rate of 5.75% for all taxpayers.
- The Corporate Income Tax (CIT) rate would eventually phase out completely within 5 years to 0%.
- There would be a new business license fee of $400 – $500 and a franchise tax on S Corps.
Additional aspects of the Senate plan include:
- Refund 100% of the sales tax to non-profits doing less than $2.8 million; non-profits in excess of $2.8 million would not see a refund above that amount;
- The combined mortgage interest deduction (MID) & personal property tax (PPT) would be limited at $15,000;
- There would be no change in the food tax and no tax on Social Security;
- The $50,000 deduction for business income would continue through 2013, but sunset in 2014.
- The plan also included a cap on the gasoline tax for two years.
The Senate projects an annual growth of approximately $600 million.
By Comparison, the House plan would:
- Reduce the PIT tiered system to a flat rate of 5.9%, thereby replacing the current rates of 6.0% – 7.0% & 7.75%
- The CIT would remain but be reduced to a regionally competitive rate of 5.4%.
- The MID and PPT would be capped at $25,000, while charitable contribution would be unlimited.
- There is no provision pertaining to capping the gas tax or taxing Social Security.
- The $50,000 business income tax would be eliminated.
Both plans include sunsetting a number of existing business related tax exemptions and a selected expansion of the state sales tax. The general consensus has been that the House plan is more favorable to the Counties, municipalities and to the general public and was better received by the Governor.
While talks continue between the House and Senate Appropriations Committee members, both chambers continue to hear legislation.
At this point in the Session, much of the House Calendar consists of bills set for a vote of concurrence. Just the same, some significant legislation managed to be acted upon and approved.
Here is a sampling of some bills that were heard this week:
Several bills were debated at great length, some with much controversy.
SB 112 – Create Jobs Through Regulatory Reform. This bill was on the floor for more than an hour and a half, with members offering amendments and debating the merits of the legislation. The bill has 32 easy-to-read and understand provisions that address various subjects under four different categories such as “Improve Rule Making Process,” “State and Local Government Regulations,” “Business and Labor Regulations” and “Environmental and Public Health Regulations.” The net result is a reassurance to businesses that local government entities cannot implement rules and regulations more excessive than State and/or Federal regulations. The bill establishes a three-tiered rule review process. There are also provisions that provide employment preferences for veterans.
SB 81 –Charlotte Regional Airport Authority. This bill has been around for quite some time as the City of Charlotte fought to retain control of the airport and resist the establishment of the Charlotte Regional Airport Authority. This bill is an interesting read as it outlines the foundation of the Authority, its rules of operation, limitations and responsibilities. The qualifications for and the method of appointment for members of the Authority are covered in detail.
SB 607 – Require Use of Paper Ballots. This is a STUDY bill which simply means that it authorizes the Joint Legislative Elections Oversight Committee to study whether or not to require the use of paper ballots in all North Carolina elections. The bill would also prohibit the State Board of Elections or any county from purchasing a voting system that does not produce a paper ballot until August 15, 2014. The bill sponsor cited numerous examples of errors in this recent Presidential election, where people casting an electronic ballot for one candidate were recorded as having voted for the opponent, as one of the motivating factors for introducing this bill. Cost and accountability were other considerations.
SB 353 – Health and Safety Law Changes. This bill is the House correction for the controversial Senate bill (SB 695) from last week that sparked a “flash” protest and garnered some media coverage. This House response focuses on the main intent of the original bill, which is to update the safety and operational procedures of abortion clinics. These provisions have not been updated since the 1990’s. Many surgical and technological advancements have been made over the years that should be considered as applicable to these clinics just as they are for ambulatory clinics. While the stated intention of the bill is to better ensure the safety of women who have elected to have an abortion, abortion supporters allege that enhancing safety requirements will create financial burdens that some clinics will not be able to afford to comply with, and this will force their closure. The bill does not outline specific requirements but defers that responsibility to the Department of Health and Human Services to determine, which some argue weakens allegations that the true intent of the bill is to limit or restrict access to abortions. In addition to safety and procedural enhancements, such as requiring the doctor performing the abortion to be present and to have admitting privileges at a local hospital, the bill also permits health care providers to opt out of performing abortion procedures on the basis of moral objection and denies sex selection abortions.
HB 767 – Corporal Pruitt Rainey “Brass to Class” Act. Named after Corp. Rainey Pruitt who desired to become a Phys. Ed. Teacher but was killed in Afghanistan in 2008, the bill directs the State Board of Education (SBE) to develop rules and criteria to award experience credit for relevant nonteaching work experience for Armed Forces veterans.
SB 683 – Safe Harbor/Victims of Human Trafficking. This legislation rewrites various laws pertaining to human trafficking, involuntary servitude, sexual exploitation and prostitution. It also provides for the consideration of parole for certain inmates sentenced under the Fair Sentencing Act.
SB 140 – Financial Exploitation of Older Adults. This bill is based on recommendations of the Task Force on Fraud Against Older Adults. It covers at least five key points (areas). It provided me a reality check, however, when I read that for the purposes of this bill, “older” would be in reference to adults 60 years of age or older.
HB 257 – Unclaimed Property Program Improvements. This bill was done at the request of the State Treasurer’s Office. It simply makes some technical changes to the administration of unclaimed property that would normally funnel into the “escheats fund.”
HB 683 – Commonsense Consumption Act. This legislation would bar civil actions against individuals and companies within the food producing and food advertising industries for claims arising from weight gain or obesity.
HB 345 –Increase Penalties for Misuse of 911 Systems. This reclassifies the misuse of the 911 system from a class 3 misdemeanor to a Class 1 misdemeanor. It also addresses the appointment of the sheriff and police chief to the State 911 Board.
Public Bills for Concurrence
A vote for “concurrence” is a vote to approve or disapprove of a bill that was sent to the opposite chamber (House to Senate or Senate to House) modified and then returned to the original chamber for agreement (concurrence) or approval. These are House bills that were returned by the Senate with some modifications:
HB 192 – Allow Right-of-way Usage in Central Business Districts.
HB 232 – State Health Plan/Statutory Changes.
HB 250 – Charter School Enrollment and Charter Revisions.
HB 327 – Fire and Rescue Pension Revisions of 2013.
HB 340 – Limited Lines Travel Insurance.
HB 357 – Retirement Governance Changes Act of 2013.
HB 362 – Department of Public Safety Changes.
HB 428 – North Carolina School Bus Safety Act.
HB 492 – Safeguard Qualified Individuals – Medicaid Personal Care Services.
Bills that Were Ratified for Presentation to the Governor
SB 316 – Pretrial Release/Rebuttable Presumption. This is an act to provide that a rebuttable presumption exists in certain circumstances that a person charged with a felony or class A1 misdemeanor offense involving the illegal use, possession, or discharge of a firearm should not be released prior to trial, and to amend certain bond provisions.
SB 465 – Prohibit Use of Tax Zapper Software. This act will make it a criminal offense to sell, purchase, install, possess, transfer, use, or access an automated sales suppression device.
HB 296 – Omnibus Wildlife Resources Commission Act. This law would adjust the fees charged for certain hunting and fishing licenses issued by the Wildlife Resources Commission.
HB 816 – Tobacco Growers Assessment Act. This bill authorizes tobacco growers to assess themselves to promote the interests of tobacco growers.
Final Notes:
I will continue to send you a weekly newsletter as long as the session continues, which I suspect won’t be much longer. It is most likely tax revision will be resolved first, followed by a state budget compromise between the House and Senate. Because the General Assembly will definitely be in session next week, I will not be able to meet with the Senior Democrats of Rowan County on Tuesday, as previously planned. I sincerely regret this and hope to be able to meet with this group sometime in the near future.
N.C. House of Representatives District 77, Rowan County
611 Legislative Office Building Raleigh,
North Carolina 27603
(919) 733-5784
