North Carolina Legislative Report - July 20, 2012
July 9 - July 20
On the Floor
The NC General Assembly completed the short legislative session on July 3 and has adjourned sine die until January 30, 2013. The MVA Public Affairs Legislative Report on North Carolina will be distributed bi-weekly while the North Carolina Legislature is not in session.
There are still eight bills waiting for action by the Governor, which are listed below.
While session is over, the General Assembly will continue to have various interim committee meetings throughout the year.
Last week, former Speaker Harold Brubaker (R-78) announced his retirement from the General Assembly.
This week, long serving House member, Representative William Wainwright (D-12), passed away.
Representative Stephen LaRoque (R-10) was indicted on federal charges and was removed from his position as Co-Chair of the House Rules Committee.
Bills Pending on the Governor’s Desk:
H585 Vehicle Emissions Inspections.
H799 Licensure by Endorsement/Military/Spouses.
H819 Coastal Management Policies.
H837 Completion of CPR by Students Required.
H914 AEDs in State Buildings.
H953 Amend Environmental Laws 2.
H1009 MSD Amendments.
S229 Amend Environmental Laws 2012
Committee Highlights
To view more information about each committee meeting, please click on the relevant committee below.
Joint Legislative Program Evaluation Oversight Committee
The Oversight Committee met Wednesday, July 18, to hear from State Auditor Beth Wood. Her report to the committee focused on the allegations of the improper use of state vehicles by two employees at the Division of Alcohol Law Enforcement. The report also made public claims that ALE officials were interfering with the investigation.
In the News
Hospital Billing
Blue Cross and Blue Shield of North Carolina has launched an advertising campaign aimed at educating consumers about a "wasteful" medical billing practice it says is costing North Carolinians about $16 million a year. The insurer contends that hospitals and doctors' offices routinely overcharge for radiology services. When patients go in for multiple images, providers are billing multiple times for some services that are performed only once, such as providing a gown, setting up IV fluids and preparing the room for the procedure, Blue Cross contends. The company earlier filed a petition with the N.C. Department of Insurance, seeking permission to change the way it reimburses providers for radiology services. Now, the insurer plans to take out a series of newspaper and radio advertisements over the next few months to educate consumers about why it is taking that step, says Blue Cross spokesman Lew Borman. The headline at the top of that Web page reads: "Health care costs enough without paying for it twice." On that site, Blue Cross encourages customers to help reduce unnecessary charges by requesting detailed medical bills and asking their providers what they're being charged for and why. While Blue Cross doesn't divulge what it spends on such ad campaigns, "we believe it's worth a modest investment to try to recoup this $16 million in multiple billing," Borman said.
Energy Hearings
Ousted utility chief Bill Johnson and former Progress Energy board members urged state regulators not to rescind the merger between Progress and Duke Energy during an all-day public hearing in Raleigh that painted dramatic scenes of the days leading up to Johnson's abrupt dismissal. Members of the N.C. Utilities Commission repeatedly asked if the premise of the $32 billion merger -- that it will benefit the public -- is still valid in the wake of Duke's merger doubts and Johnson's firing. Time and again Johnson, and the board members who supported him, assured regulators that despite the CEO shakeup the merger will deliver substantial public benefits. Johnson chronicled mounting tensions between executives and managers at both power companies over the merger's costs. Those costs, Johnson said, prompted Duke officials to badmouth the deal to journalists and Wall Street analysts. Johnson, meanwhile, became fiercely determined to get the merger done, in part because Progress would have been punished by Wall Street if the merger had fallen through. Such a setback, he acknowledged, would have forced Progress to make considerable staff cuts in Raleigh.
Airline Talks
US Airways CEO Doug Parker says he met with American Airlines CEO Tom Horton to discuss a potential merger between the two companies, which Horton has resisted for months. Parker visited Charlotte as part of a series of public appearances to try to build support for the potential merger. Such a combination would boost Charlotte Douglas International Airport’s stature as a major hub, Parker said. The new American Airlines -- which would be headquartered in Dallas-Fort Worth and use the American brand -- could have more than 800 flights a day from Charlotte Douglas. That’s up from US Airways’ current schedule of more than 600 flights, Parker said. Charlotte is US Airways’ busiest hub, with the airline accounting for almost 90 percent of the airport’s daily air service. US Airways also has more than 7,000 employees based in Charlotte. Parker said he expects Charlotte Douglas to grow in the event of a merger, not shrink, because of its importance in the merged carrier’s network.
Appointed
Larry Kernea of Murphy has been sworn in as the newest member of the state Board of Transportation, replacing Conrad Burrell of Sylva. Kernea represents the state Department of Transportation’s Division 14, which comprises Cherokee, Clay, Graham, Haywood, Henderson, Jackson, Macon, Polk, Swain and Transylvania counties. Kernea is general manager of Murphy Electric Power Board. He serves on the Tri-County Community College Board of Trustees and is a graduate of Tri-County and North Georgia Technical College.
LaRoque Indictment
The North Carolina House turned up the pressure on a Republican member indicted this week on federal charges as the chamber's top leader said he thought it would be wise for his colleague to resign his seat. House Speaker Thom Tillis said he advised Rep. Stephen LaRoque of Kinston to consider stepping down from the House, where LaRoque had served for almost six years since 2003. LaRoque already was on his way out the chamber - he lost in the May primary and won't return when the next two-year session begins in January. "He and I have had some discussion and I have suggested that it is really in his best interest," Tillis, R-Mecklenburg, told The Associated Press in an interview, adding: "I think it would be a wise decision."
Merger Hearings
Duke Energy has brought in two highly regarded trial lawyers as the N.C. Utilities Commission hears testimony from former Progress Energy CEO Bill Johnson about his post-merger resignation. Charlotte lawyer Jim Cooney and former N.C. Supreme Court Chief Justice Burley Mitchell gave notice to the commission that they will appear for Duke. A third high-profile lawyer, Raleigh’s Wade Smith, already represents Johnson. Their presence signals the growing stakes in the Duke merger, which is being investigated by both the Utilities Commission and Attorney General Roy Cooper. The commission could also bring in its own hired experts at Duke’s expense.
GOP Complaint
The North Carolina Republican Party accused liberal-leaning advocacy groups of breaking federal tax rules, but a group leader called the complaint a phony effort set to silence critics of policies of the new GOP majority in the Legislature. The executive director of the state Republican Party mailed a request asking the Internal Revenue Service to investigate whether five nonprofit organizations participated in political campaigning that the GOP said would violate their tax-exempt status. The groups cited by the GOP - Progress North Carolina, Project Ricochet Inc., Democracy North Carolina, North Carolina Justice Center and the Institute for Southern Studies - either sponsored public forums or circulated flyers criticizing the Legislature's actions, the request said. The five groups are identified as "501c3" groups under IRS rules, which make them exempt from certain federal taxes because they have charitable or educational purposes. It also allows donors to make tax-deductible gifts to the groups.
Charter Schools
Nine new charter schools are headed for August openings, the first since state lawmakers removed a 100-school statewide limit last year. Two of those new charter schools will be in Guilford County: Cornerstone Charter Academy and the College Preparatory and Leadership Academy of High Point. The new schools can open in August. The State Board of Education approved the schools despite concerns that not enough was known about the impact the new charters could have on racial diversity and the ability of school districts to repay money borrowed for construction.
Community Mental Health
The state's latest plan for community mental health services has gotten off to a bad start with the first local mental health office to become a managed-care agency falling into a $3 million financial hole in its first six months of operation. Western Highlands Network, which covers eight counties including Buncombe and Rutherford, is working with the state Department of Health and Human Services on a plan to correct the money problems that started the first day it became a managed-care agency in January. The changes may involve reducing some mental health treatments the office believes are excessive, telling service providers to return money for services that were not approved, and enforcing rules for providers filing payment claims. Last year, the legislature passed a law that requires all local mental health offices to convert to managed-care agencies by January 2013.
LaRoque Indicted
State Rep. Stephen LaRoque, chairman of the powerful House Rules Committee, was indicted by a federal grand jury in Raleigh on charges of theft and money-laundering stemming from his enterprise that makes federal loans to struggling businesses. LaRoque, 48, a Republican from Kinston, is accused of using hundreds of thousands of dollars in federal funds to enrich himself and benefit his wife and close associates over a 15-year period. Federal investigators say they followed a series of financial transactions in which federal loan money was transferred through various accounts to pay for thousands of dollars of Faberge eggs and other jewelry for his wife’s birthday and anniversary presents, the purchase of an ice rink in Kinston for his wife – along with a new ice resurfacing machine – and buying a home to rent to a stepdaughter.
Legislative Runoffs
North Carolina voters have put the finishing touches on which Senate candidates will appear on the November ballot. Four men advanced to the fall general elections through Tuesday's primary runoff.
In the 44th State Senate District, Republican David Curtis defeated incumbent Chris Carney. Curtis will face Democrat Ross Bulla in the fall. Carney was the only incumbent senator involved in a runoff.
Ronald Rabin secured the Republican nomination in the state's 12th State Senate District, beating back challenger Don Davis. Rabin will face Democrat Brad Salmon.
Democrat Robert B. Clark III beat Billy King in the 21st State Senate District. He faces no Republican challenger.
Jeff Tarte secured the 41st State Senate District and he also faces no November challenger. The redrawn Mecklenburg district drew a crowded GOP primary field.
Council of State
Republican Dan Forest scored a convincing win over fellow Raleigh resident Tony Gurley for the right to run for lieutenant governor in November as voters chose party nominees in a dozen Council of State and legislative runoff races. Forest, an architect, had 68 percent of the vote compared to 32 percent for Gurley, a Wake County commissioner, with nearly all precincts reporting unofficial results. Forest will take on Democratic nominee Linda Coleman, who won in the May primary.
Republicans Pick in 8th, 9th, 11th Congressional Runoffs
U.S. House 8th -- Former congressional aide Richard Hudson beat dentist Scott Keadle in the 8th District contest. Hudson said he's looking forward to taking on Democratic Party incumbent Larry Kissell in a district that was redrawn to favor Republicans in last year's redistricting process.
U.S. House 9th -- Real estate investor and former state senator Robert Pittenger beat Mecklenburg County Commissioner and former sheriff James Pendergraph in the GOP runoff in the 9th District. Pittenger takes on Democrat Jennifer Roberts in November for the right to succeed retiring GOP U.S. Rep. Sue Myrick. The district, which covers portions of Mecklenburg, Union and Iredell counties, is overwhelmingly Republican and has been in the party's hands since 1963.
U.S. House 11th -- Real estate investor Mark Meadows beat Vance Patterson by a 3-to-1 margin in the state's 11th Congressional District, a mountainous and rural 17-county region. He faces Democrat Hayden Rogers, the former chief of staff for Heath Shuler, who decided not to run for re-election. The state's 11th District is one of the seats Republicans hope to take from Democrats in the fall.
Voter Turnout
Voter turnout for North Carolina's runoff elections Tuesday didn't set a record low, but it wasn't far off. Despite including five statewide races and three congressional races – elections officials said it was the longest runoff ballot in modern North Carolina history – only about 221,000 people went to the polls statewide, which is less than 3.6 percent of the state's registered voters. The lowest turnout ever for a North Carolina election was 2.5 percent.
Merger Lawsuit
A Duke Energy shareholder has filed a lawsuit in Delaware's Court of Chancery accusing 11 Duke board members of breaching their fiduciary duty in abruptly firing ex-Progress CEO Bill Johnson. The lawsuit, filed by Lesley C. Rupp of Alabama, does not ask for a specific amount in damages. Rather, it seeks to have the defendants, which include Duke CEO Jim Rogers and 10 other board members who voted to replace Johnson, pay all damages sustained by their actions. Those damages include loss of prospective revenue through denial of future rate increases; increased costs of borrowing that could result from future credit downgrades; Johnson's severance package as well as the cost of possible severance packages for three other high-level Progress executives who left the company after the merger; and the cost of defending the ongoing investigation into Duke's actions, as well as legal and settlement costs related to possible future litigation. A Duke spokesman said that the company believes the lawsuit is entirely without merit and intends to defend itself vigorously.
Bills Signed
North Carolina Gov. Beverly Perdue signed 11 more bills into law, including one that permits a judge to erase some nonviolent felony convictions and another directing lawmakers to come to Raleigh earlier than usual next year to elect their leaders. She's already signed nearly 50 bills. She has until midnight Aug. 2 to sign the remaining bills into law, veto them or let them become law without her signature. One new law signed by Perdue allows a person convicted of a low-grade felony to wait 15 years before asking a judge to expunge the conviction. Other legislation bars public workers convicted of employment-related felonies from collecting state retirement. Another law tells lawmakers to convene in early January to elect the Senate leader and House speaker, then adjourn for a few weeks. Republican legislators said the provision, contained in a 35-page cleanup bill approved on the session's final day, would make the session more efficient by picking leaders before bill-writing and debate begins. Another newly-signed bill is designed to create whistle-blower protections for people alleging fraud or other misconduct related to the health insurance plan for state employees and teachers.
Party Fundraising
The North Carolina Democratic Party is trailing the state Republican Party in the race for campaign cash ahead of fall elections. Campaign finance reports filed with the State Board of Elections show the Democrats raised a little less than $185,000 during a 10-week period between late April and June 30, when the party had $188,000 in cash on hand. Those numbers are a small fraction of the money accumulated by the state Republican Party, which reported raising nearly $772,000 during the period and having $965,500 in cash. State Republicans brought in $554,000 from outside political committees such as political action committees - more than three times the $166,000 Democrats raised. In terms of individual contributions, the reports show Republicans raked in $212,000, while Democrats brought in a meager $2,700. The GOP advantage is a reversal of fortune compared to previous election cycles, when the Democrats' control of the Executive Mansion and the Legislature usually has given them a comfortable fundraising lead. Just four years ago, the state Democratic Party had raised $510,000 during a similar period ending June 30 - more than double the total by the state Republican Party. "There was extreme disarray with the Democratic Party in North Carolina, and there isn't a solid message going forward about how to make the state better," said state Republican Party spokesman Rob Lockwood, referring to months of infighting in the wake of sexual harassment allegations at Democratic Party headquarters.
New Laws
Gov. Beverly Perdue has signed into law two-thirds of the bills left on her desk by legislators when they departed Raleigh. Perdue's office said Friday she signed an additional 38 bills on Thursday, leaving 20 on her desk. The Democratic governor has through Aug. 2 to sign each bill, veto them or let them become law without her signature. The bills she signed Thursday increase penalties for certain second-degree murders and deaths involving vehicles and create a new felony crime and penalties for someone who buys and sells children. The bills also have tougher penalties for repeat larceny offenders and prevent people with a history of child abuse, child neglect or sex offenses from working as child care providers. In addition, Perdue signed a bill ensuring that North Carolina complies with a U.S. Supreme Court ruling that found mandatory sentences of life in prison without parole for minors with first-degree murder convictions to be unconstitutional. The law creates a minimum sentence of 25 years before the young person gets a chance at parole, but still allows a judge to sentence the murderer to life without parole in some circumstances or conduct a hearing to examine factors before determining a sentence. North Carolina was one of the nearly 30 states where life without parole was the only option for certain types of murder committed by people under age 18. The Supreme Court said the sentence was cruel and unusual punishment.
Tillis Appointee
Some North Carolina environmentalists are questioning the appointment of the founder of pro-drilling group to the new board that is supposed to write regulations to govern natural gas drilling. Ray Covington, founder of N.C. Oil and Gas, an organization of Lee County landowners whose list of stated goals includes “we want this land drilled,” was appointed by GOP House Speaker Thom Tillis as one of the two conservation members on the board. “It adds insult to injury,” said Elizabeth Ouzts, director of Environment North Carolina. “There should at least be a voice for caution moving forward.” Covington, who owns a farm in Lee County, denies a conflict of interest. He said his organization is a cooperative meant to ensure North Carolina landowners get complete and accurate information, and that drilling is done safely. “I’ve always been a conservationist and a lover of land,” Covington said. “There needs to be more research done on what exists under the land in North Carolina, and that’s what we’re going to do.”
Health Benefits Exchange
North Carolina lawmakers have missed a federal deadline for the state to set up a marketplace where uninsured people and small businesses can shop for health insurance, meaning the federal government will now set one up for the state. Only about one-third of the states have already established health benefits exchanges. Republican governors and legislators across the country have balked at provisions of the Patient Protection and Affordable Care Act, especially the added expense of expanding Medicaid benefits and mandating that everyone carry health insurance. But states that want to retain control of the exchanges are still facing a mid-November deadline to apply to have detailed plans approved by January so they can begin operating a year later. North Carolina has no plan. Alan Weil, executive director of the National Academy for State Health Policy, a nonpartisan group based in Washington, said states like North Carolina are being cautious. “I would say the majority of states are still figuring out their options,” Weil said. “The problem is they need to figure it out pretty quickly.”
Battleground Status
The state Democratic Party is seeking to counter several national reports that suggest that North Carolina is fading as a battleground state. Walton Robinson, the party's communications director, began circulating a memo, first published in Politico, that argues that North Carolina is very much in play. The memo points to numerous polls showing that Obama even or ahead of Romney in the state even though Romney and his allies had spent $10.25 million on TV in North Carolina between May 1 and June 20, while Obama had spent $8.1 million. He said in a state that has been hit by a large loss of manufacturing jobs, Romney's record in pioneering in outsourcing jobs while at Bain Capital is particularly problematic. “First the election will not be won or lost on paid media,” he writes “Despite Romney and his SuperPAC allies outspending the president's campaign in the state, Romney's poll numbers continue to slide.”