Quite Time

Things have been relatively quite in Raleigh as the legislature deals with a tremendous number of bills.  However, I have  run across a couple of interesting items.  It has been reported that there is some discussion about taking the next two years of tobacco settlement money and diverting it from the Golden LEAF Foundation to the general budget.  I have not seen any mention of this in a bill but there must be something to it.  I still maintain that this would put a damper on our economic development efforts.  Although the Foundation has an endowment for its use, and could continue to make grants from those funds, the incoming stream of funding allows the Foundation to provide up to 10 percent of the endowment every year in grants, rather than the 5 percent that a traditional foundation would provide.This means that some projects that would normally be funded would be rejected.  It's a thorny issue, and I will continue to monitor the situation

Another bill that has been introduced that deserves some attention is Senate Bill 658. This bill revises the tax structure of the state and on a quick overview it would make some dramatic changes.  Keep watching and I'll try to give you more information.  If you would like to read through the 65 page bill just click on the above hyperlink and enjoy yourself.  Let me know if you find anything of interest.

Redistricting is another hot topic in Raleigh.  There are a couple of proposed maps floating around but the Redistricting Committee is still holding public hearings to get input from concerned citizens. Lawmakers will host a public hearing on redistricting this coming Saturday, April 30th at Central Piedmont Community College and satellite sites in three surrounding counties. Live video hook-ups will allow people in Cabarrus, Cleveland and Catawba counties to have a say as well.  Here in Cleveland County you can participate at Cleveland Community College at the Rotary Center for Global Studies.  The three hour hearing begins at 9:30 am.

Fun and games in Raleigh

The General Assembly passed legislation on Thursday that would extend unemployment benefits for about 37,000 North Carolina residents, which are set to expire on Saturday.  However, in addition to the extension of benefits, Republican legislators have included a continuing resolution that, if a budget is not passed by the June 30 deadline, would fund the state at 87 percent of Governor Perdue’s proposed budget.  The Governor opposed this amendment and vetoed the bill. I expect the veto will be sustained in the house since the bill was passed along party lines.

The Governor also vetoed another bill this past week - S265 – Health Plan/Appropriations and Transfer.  This bill would have required state employees to pay part of their health insurance ranging from $11 to $22 per month.  The Governor vetoed the bill stating, “This bill is in effect a tax on teachers, who have not received a pay raise - and have effectively seen their pay drop - for the past three years.” House speaker, Thom Tillis offered to exempt teachers but this offer was rejected.  Let’s see if the Legislature will override this veto.  I would say chances are slim.

House budget subcommittees gave some indication last week as to how they were proposing to close the 2.6 billion dollar deficit. Efficiencies within state government will have to be achieved and some downsizing will have to occur in order to meet that target. The downsizing targets have been reported as follows: Education spending cuts 10%; Universities 15.5%; Elementary and secondary education 8.5% (largely protecting teacher positions, and cutting aids and administration); Community colleges 10%; DHHS 11%; state agencies such as environment and commerce 25%. Numbers related to employee salaries and the state pension plans have not been finalized.  We are getting down to the “nitty gritty”.  This proposal does not include any tax increases, but watch for increases in fees or other “nontax” revenue streams.

The House Select Committee on Tort Reform passed two significant pieces of legislation on Thursday that address several key issues important to the business community. H542 is a general tort reform bill that includes provisions to ensure that juries receive accurate information on the actual medical bills paid in a case; establish appropriate standards for expert witnesses; set reasonable limits on attorneys’ fees in small cases; and provide protection for pharmaceutical manufacturers that have received FDA approval of their products. The second piece, S33, would cap non-economic damages in medical malpractice cases at $500,000; bifurcate trials in civil cases; and provide for periodic payment of future economic damages in medical malpractice cases.   Both bills are expected to be heard by the full House as early as next week.

Bills of Interest

H735 – Ready For Work/UI Drug Testing

This bill provides for periodic drug testing among the conditions required for eligibility to receive unemployment insurance benefits in order to ensure that recipients are able and available to work. 

 H 769 - High School to Work Partnership

This bill would direct local boards of education to adopt and implement policies that encourage high school to work partnerships.  The Cleveland County’s Business /Education Alliance is hard at work to accomplish many of the provisions outlined in this bill.  If you would like to learn more about the Business /Education Alliance contact Tony Fogleman at (tfoglemand@clevelandcountyschools.org)

H800 - Streamlining NC Economic Dev for Job Creation

This bill would create the North Carolina Jobs and Commerce Corporation (NCJCC), which is intended to replace the current economic development governance structure currently located in other State entities, including the Department of Commerce and which shall be housed within the Small Business Technology and Development Center (SBTDC) within The University of North Carolina.  The bill would also create The North Carolina Jobs and Commerce Corporation Task Force which would evaluate the State's current system of economic incentives to determine which economic incentives in the State's current portfolio are providing a good return on investment and are effectively recruiting high-value jobs to the State.  The task force will also examine the existing grant, loan, and other economic development programs to determine where there are duplicative incentives.  This is a major change in the way economic development activities are handled in the State.  This task force will be looking at all economic development activities undertaken by any entity that receives State funding.  The task force must return it’s finding by May 1, 2012.  We will be following the activities of the task force very closely.

Worker's Comp Reform

The legislature has now embarked upon Workers' Comp reform.  Rep. Dale Folwell (R-Forsyth) filled House Bill 709 this week that addresses many of the problems with the state’s workers’ compensation system.  The bill includes the following comprehensive reforms:

·      Caps temporary total disability to 500 weeks

·      Increases temporary partial disability limits from 300 to 500 weeks

·      Increases the death benefit from 400 to 500 weeks and increases burial expense allowance

·      Better defines “suitable employment” for the workers’ return to work

·      Disqualifies individuals from receiving benefits who willfully misrepresent physical condition when applying for a job

·      Improves structure, operation and accountability of the Industrial Commission by reducing it from seven to five members and requiring legislative confirmation of appointments and brings the Commission under the Administrative Procedures Act

·      Improves communication between the employer and the doctor to better facilitate the employees’ return to work and ensures that both parties have equal access to medical information.

If you have had any problems with Worker's comp that has been a deterrent to growth of your business, let us know and we will pass it along to our local legislative delegation.

A Victory for Business

In case you haven’t heard, imbedded in Obama’s Health Care Bill was a  provision that would require businesses, charities and government entities to file a separate 1099 tax form for every business from which they purchased more than $600 in goods or services. The $600 threshold includes many routine transactions, such as phone bills and shipping costs, which would force small businesses to spend more staff time on paperwork, increasing overhead costs.  In a positive move for business, Kaye Hagan cosponsored the Senate version of the bill that abolished this provision.   Yesterday, the Senate passed the 1099 repeal 87 to 12, and it is now headed to the President's desk.  Please let Senators Hagan and Burr know that you appreciate this vote and their efforts on behalf of the small businesses of this county.

The North Carolina Chamber reported that House Bill 542, Tort Reform for Citizens and Businesses was introduced by Rep. Johnathan Rhyne (R-Lincoln), Rep. Danny McComas (R-New Hanover), Rep. Jim Crawford (D-Granville), and Rep. William Brisson (D-Bladen) this week.  The bill addresses a number of civil liability issues including medical malpractice, attorney fees in small claims cases, product liability, credentials for expert witnesses, and trespassing laws. Additionally, the proposed legislation would discourage plaintiffs from seeking large punitive awards by giving 75% of any award above $100,000 to the state’s education fund. The committee did not vote on the bill and thus will continue their discussions next week.  Keep your eye on this piece of legislation.

I reported in a previous blog about the opportunity presented by the Joint Committee on Regulatory Reform to make your voice heard concerning rules and regulations that create a hardship on business.  The next opportunity will be as follows

Friday, April 15
Blue Ridge Community College
Thomas Auditorium
180 West Campus Drive
Flat Rock, N.C.
Sign up to make a two minute statement: 12:30 p.m.
Meeting: 1 to 3 p.m


If you have a specific problem that you feel the committee should hear about this is your chance.  If you can't attend the meeting you can go to the committee's website (www.ncleg.net/regreform) and a form is provided for your input.