APRIL 4, 2003

ISSUE. No. 10

Published every Friday during legislative sessions exclusively for NCCBI members

Index of stories below: House gets serious about writing a budget... Senators propose giving redistricting to independent commission... Flurry of bills tinker with school operations... Doctors plan rally to support medical malpractice reform... Senate closes franchise tax loophole... Bills of interest introduced this week... Novartis gives $1 million to Medicaid fund... Weak March tax collections wipe out surplus... Highway funds battered by weak economy... Court upholds contributory negligence law... NCCBI news... State slams revisions to New Source Review rules... Senate elects new members of UNC Board of Governors...

Drive to improve government efficiency
advances with introduction of Senate bills

NCCBI’s drive to implement recommendations of the Governor’s Efficiency Commission bore more fruit this week when several bills were introduced in the Senate to do just that. Senate Majority Leader Tony Rand, who served on the Efficiency Commission chaired by former NCCBI Chair Jim Hyler, offered a number of specific proposals Wednesday. Rand also introduced several blank bills addressing efficiency topics that will be fleshed out next week.

Hyler said he was “delighted” that Sen. Rand has introduced the bills. “This is an important first step to begin the debate in order to make structural changes in the delivery of government services,” Hyler added. Among the efficiency bills introduced Wednesday by Sen. Rand are:

 S. 804 DMV/NCDL/Registration Extensions which saves time and money by allowing drivers to renew their vehicle registrations every other year instead of annually, and making drivers licenses good for eight years instead of five.
 S. 805 Consolidate Administrative Functions and a companion measure, S. 808 Consolidate Administrative Programs, call for the consolidation of administrative and support functions of state government in areas of the state that have high concentration of state facilities. The initiative is modeled after similar measures taken recently for the many state facilities in Morganton. The legislation directs the University of North Carolina, the Judicial Branch, the Executive Branch, the Legislative Branch, the Community College System, and the Department of Public Instruction to develop a plan to consolidate their administrative functions in areas of the state with high concentrations of facilities. Those plans must be presented to the General Assembly no later than May 1, 2004.
 S. 807 Combine Safety Programs calls for elimination of duplicate worker safety programs and calls on the Industrial Commission and Department of Labor to examine the current programs and make recommendations for consolidation.
 S. 809 Consider Sale or Lease of State Property directs the Department of Administration to review its inventory of state-owned property and recommend property that should be sold or leased to the private sector.
 S. 810 Increase Use of Public Defenders encourages the formation of additional public defender offices throughout the state to defend indigent defendants rather than paying attorneys in private practice to defend them.
 S. 813 Controller's Fee permanently imposes a 20 percent collection fee on deadbeat taxpayers and strengthens efforts to collect back taxes under the Accounts Receivable program.
 S. 817 Deferred Retirement Option Program allows state government retirees with special expertise to continue working under a deferred retirement option program.
 S. 819 Use Of State Property/Blount Historic District speeds up the process of disposing of state-owned property in Raleigh’s Blount Street Historic District, with proceeds going toward maintenance and upkeep of the Governor’s Mansion.
 S. 821 Governor's Efficiency Commission is a blank bill at present that will be fleshed out soon with other efficiency ideas.
 S. 924 Reduce Scope/Size of Boards and Commissions requires a review of the more than 400 state boards and commissions, with an eye toward eliminating or consolidating many of them.

None of the above bills specify a dollar amount that can be saved if they are passed into law, but it’s believed that the ideas they espouse would save the state tens of millions of dollars. In addition to the bills offered by Sen. Rand, a number of the recommendations made by the commission are being considered in the budget negotiations.

The Efficiency Commission report included recommendations that can be enacted administratively by Gov. Mike Easley through executive orders and a number of recommendations that need legislative action. Gov. Easley’s office is working with all state agencies on implementing efficiency ideas under his control. It’s expected that much of that work will be handed to the Business Council for Fiscal Reform, which Ealsey announced at NCCBI’s Annual Meeting on March 19. Easley appointed several NCCBI figures to the council, including Hyler and Sue W. Cole of Greensboro, the U.S. Trust Company of North Carolina president and CEO who succeeded Hyler as NCCBI’s chair at the Annual Meeting. Others the governor appointed include Bill Coley, the former Duke Power president; Jim Hance, vice chairman and CFO of Bank of America; and Ken Thompson, president and CEO of Wachovia Bank. Easley said he would appoint additional members soon.

House gets serious about writing a budget
he House continues working toward its self-imposed April 18 deadline to have the budget bill ready and made substantial progress toward that goal this week. Appropriations Committee Co-chairs Jim Crawford (D-Granville) and Wilma Sherrill (R-Buncombe) on Wednesday introduced H. 853 Governor's Budget Bill, which generally incorporates the $15.3 billion spending plan advanced by Gov. Mike Easley. This was just to get the governor’s plan on the table for debate; it’s expected that the House will put its own imprint on spending priorities. The same thing happened in the Senate when Appropriations Base Budget Committee Co-chairs Linda Garrou, Walter Dalton and Kay Hagan introduced S. 717 Governor's Budget Bill.

The biggest budget question is whether there are enough votes in the House Finance Committee to pass Easley’s plan to delay the sunset on $460 million in state sales and income taxes expiring June 30. In newspaper interviews, nine committee members said they support continuing the taxes for two years, 15 said they’re opposed, 9 said they’re undecided and 3 said they want higher sin taxes instead of continuing the expiring half-cent state sales tax.

Among the sin tax options floated this week was a bill by Sen. Steve Metcalf (D-Buncombe), S. 665 Increase Alcohol/Substance Abuse Services, which would raise the tax on a can of beer or glass of wine by 3 cents and by 7.5 cents on a shot of liquor. He said the increase would raise $95 million to fund mental health, developmental disabilities and substance abuse programs. Also, Sen. Dan Clodfelter (D-Mecklenburg) offered two, S. 915 Raise Cigarette Tax for Medicaid and S. 917 (Clodfelter) Raise Cigarette/Alcohol Tax for Medicaid, which raises the excise tax on cigarettes; streamlines the tax on liquor, changes the distribution of excise taxes on alcohol, and phases out the county share of Medicaid costs.

Senators propose handing redistricting to independent commission
n odd couple of senators are crossing party lines to propose legislation that would depoliticize the every-10-year task of redistricting by taking it away from the General Assembly and giving it to an independent commission. Conservative Republican Hamilton Horton of Forsyth County and liberal Democrat Ellie Kinnaird of Orange County introduced bills to that effect Monday in the Senate. S. 651 Independent Redistricting Commission/Statutory would establish the commission by statute and empower it to recommend to the General Assembly plans for legislative and congressional redistricting. S. 650 Independent Redistricting Commission/Constitutional calls for a referendum on amending the state constitution to allow redistricting to be done by the independent commission rather than by the legislature.

At a news conference, Horton and Kinnaird were joined by representatives of several public policy groups that support the legislation, including The John Locke Foundation, Common Cause of North Carolina, Citizens for a Sound Economy and the N.C. State Grange. NCCBI has supported the concept for years. When he was in the state Senate 30 years ago, NCCBI President Phil Kirk co-sponsored similar legislation with Horton. Horton said the yearlong court fight over legislative districts proves that the politicians shouldn’t be entrusted with the job.

Under the proposed legislation, the independent commission would have nine members, with two each appointed by the chief justice of the state Supreme Court, House speaker and Senate president and three by the governor. Each person would have to appoint persons from both political parties.

Flurry of bills offered that tinker with school operations
he ongoing debate over how to adequately fund the public schools hasn’t dissuaded legislators from offering educators their advice about how, when and where the schools should actually operate. Several bills have been filed recently that would have major impacts on the day-to-day management of school systems across the state, including:

Measures specifying that the school year can’t begin until after Labor Day. To help the tourism industry, particularly in coastal areas, bills have been introduced in the House and Senate to bar most schools from opening before Labor Day. In the House, Reps. Dewey Hill (D-Columbus) and Connie Wilson (R-Mecklenburg) are leading the initiative with H. 683 Schools Start After Labor Day. Two such bills have surfaced in the Senate, S. 779 (Dannelly) Schools Begin After Labor Day and S. 1002 (Ballantine and Soles) School Starts After Labor Day, both of which direct local boards of education to set the first instructional day of the school year after Labor Day. The N.C. Travel & Tourism Coalition hasn’t yet decided whether to endorse the concept. The legislation wouldn’t shorten the school year and would not affect year-round schools.

Bills barring use of a high school exit exam. Rep. Rick Glazier (D-Cumberland) filed legislation last week, H. 678 Eliminate High School Exit Exam, directing the Department of Public Instruction not to implement the pending high school exit exam and barring the addition of other tests assessing student achievement. Senate Education Committee Co-chair Steve Metcalf (D-Buncombe) filed a companion bill, S. 699, on Tuesday. The high school exit exam, proposed by former Gov. Jim Hunt, was intended to assure that a high school diploma had value. However, the legislature directed DPI to halt work on the exam last year.

A measure to raise the pay and credentials for teacher assistants. Sen. Metcalf introduced S. 700 Teacher Assistant Salary/Tuition Funds, which appropriates $4.3 million over the next two years to raise teach assistant salaries from $14,000 a year to $18,000. It also appropriates $6 million to the community colleges to pay for additional training teacher assistants are required to have under the federal No Child Left Behind Act.

Other education-related bills introduced this week:

 S. 696 (Metcalf) Initiatives to Address Teacher Shortages - An act to effectively recruit and retain teachers for the North Carolina Public Schools. At present the legislation is a blank bill.
 S. 697 (Metcalf) Community College Trust Fund Established - An act to establish a North Carolina Community Colleges Trust Fund.
 S. 698 (Metcalf) Advisory Members on the State Board of Education - An act to add a local superintendent chosen by the governor and the state principal of the year as advisory members to the State Board of Education.
 S. 701 (Metcalf) Job Sharing for School Personnel - An act to facilitate job sharing by certain public school professional personnel by expanding current rules allowing classroom teachers to share a job to cover those working as guidance counselors, media coordinators, media specialists, psychologists and social workers.
 S. 702 (Metcalf) Community College Equipment Funds/Carry Forward - An act to permit the Community Colleges System to use unspent funds to purchase instructional equipment. A companion bill, H. 846, was offered in the House.
 S. 703 (Metcalf, Swindell and Holloman) Legislative Study Commission on Rural Schools - An act to establish a 22-member Legislative Study Commission on Rural Schools, which would issue recommendations to the 2004 session of the General Assembly.
 S. 638 (Brock) Parental Notice of Health Care - An act to prohibit the provision of certain health services by local school administrative units and to require units to obtain permission from parents for certain services.
 S. 639 (Brock) Textbooks Selected at the Local Level - An act to make textbook selection a local decision.
 S. 640 (Brock) Schools Must Protect Student Privacy - An act to protect the privacy of students and their families.
 S. 641 (Brock) Elect State Board of Education - An act to amend the North Carolina Constitution to provide for election of district representatives to the State Board of Education.
 S. 644 (Brock) UNC System/No Remedial Education - An act to provide that constituent institutions of the University of North Carolina shall not offer remedial education programs.
 S. 645 (Brock) LEAS & Colleges Operate Charter Schools - An act to permit a local board of education to apply for charter status for one or more of its public schools and to permit private colleges to serve as chartering entities for charter schools.
 S. 737 (Lucas) Calendar Must Let Teachers Take Earned Leave - An act to modify the school calendar to ensure teachers have an opportunity to take advantage of annual leave they have earned.
 S. 783 (Garwood) Raise Compulsory School Attendance Age - An act to prohibit students from dropping out of school before the age of seventeen.
 S. 795 (Queen) Character Education to Include Antiviolence Information - An act to modify character education in kindergarten through twelfth grade to include an antiviolence message and a conflict resolution component.
 S. 796 (Stevens) School Board/County Dispute Resolution - An act to amend the procedure for resolution of disputes between local school boards and county commissioners.
 S. 797 (Kinnaird) Soft Drink Tax/School Breakfast - An act to levy a three-cents per container tax on soft drinks to provide funds for education.
 S. 843 (Shubert) Inform Parents of Student Progress - An act to ensure that parents receive a marked copy of tests taken by their children under the statewide testing program.
 S. 886 (Carpenter, Dannelly and Purcell) Sun Safety for School Children - An act to require local boards of education to adopt policies to allow for outdoor use during the school day of articles of sun-protective clothing and to allow pupils to use sunscreen during the school day without a physician's note or prescription.
 S. 931 (Shubert) No Portfolio Required/Teacher Certification - An act eliminating the portfolio requirement for teacher certification.
 S. 949 (Lucas) Link Principal's Bonus to 4-Year Graduation Rate - An act to provide an annual bonus to high school principals if the four-year graduation rate increases by more than ten percent from the previous school year of if the four-year graduation rate exceeds eighty percent.

Doctors plan rally to support medical malpractice reform
atch for a major media frenzy in Raleigh on Tuesday when hundreds of doctors rally at the Capitol in support of medical malpractice reform legislation. The doctors’ rally follows a photo op Thursday by trial lawyers who paraded alleged victims of medical malpractice before the cameras. At issue is a package of bills that would cap pain and suffering damages at $250,000 and limit legal fees, among other things. Trial lawyers seem most upset about H. 809 Ensure Access to Health Care, because it also would reduce their income by specifying that a greater percentage of jury awards go to the patient and less to the attorney. For example, in a typical $1 million jury award for medical malpractice, trial lawyers now get about $800,000. That would be reduced to about $600,000 under the legislation. The bill says the lawyer would collect 40 percent of the first $50,000 of a recovery, 33.3 percent of the next $50,000, 25 percent of the next $500,000 and 15 percent of any amount over $600,000. Trial lawyers “like to talk about patient rights, but their opposition to reasonable limits on excessive legal fees is just another example of how their actions speaker louder than words,” said Dr. Joseph Perkins, chair of the N.C. Medical Society’s Professional Liability Tack Force. Similar measures are pending in Congress; medical malpractice reform already has passed the U.S. House and is pending in the U.S. Senate.

Legislative Actions

 The Senate on March 27 gave third-reading approval to S. 51 (Clodfelter) Close Franchise Tax Loophole and sent the measure to the House. The bill adds a new section to franchise tax laws specifying that “any membership interest a business trust holds in a limited liability company is attributed to the owners of the beneficial interests in the business trust, according to their interests in the trust, and the trust itself is disregarded as a separate entity.”

 By a vote of 36-9, the Senate on Wednesday gave final approval to H. 340 School Calendar Flexibility for Inclement Weather, a House-passed bill that reduces the number of days students are required to go to class to help schools make up days lost to snow and ice. The measure would allow schools that have faced unusual winter storms to make up as many as three days by extending the school day rather than holding classes on Saturdays or cutting into spring and summer breaks. It applies only to this school year. The bill now goes to the governor.

 The House on Wednesday voted 101-17 on third reading to pass a bill exempting autopsy photos from the state's public records law. Under H. 65 Autopsy Photos Not Public Record interested parties still could view autopsy but few people could make copies of them. The legislation was spurred by the dispute over autopsy photos of NASCAR driver Dale Earnhardt after his fatal crash at the 2001 Daytona 500. The measure was sponsored by Rep. Karen Ray (R-Iredell) who represents a district that includes a number of NASCAR businesses. The bill now goes to the Senate.

 By a vote of 49-1, the Senate on Tuesday passed a bill requiring paid fund raisers working for charities to immediately disclose their cut of donations. Sen. Eric Reeves (D-Wake) cast the only dissenting vote against S. 353 (Bingham) Charitable Solicitations/Require Disclosure. The legislation now goes to the House. State law now requires charities to disclose within 14 days the percentage of donations they give paid solicitors. Similar legislation, H. 833 (McGee, Frye, Parmon and Stiller) Charitable Solicitations/Require Disclosure, was offered in the House.

 The House gave final approval Tuesday to legislation designating the Carolina Lily as the state's official wildflower. H. 47 (Baker) Adopt Carolina Lily as State Wildflower passed by 111-7. The House passed a similar bill last year but the Senate failed to pass it when a dispute arose about designating an official state berry.

Bills of Interest Introduced This Week

Note: This list is quite long this week, mainly because of the Senate’s self-imposed deadline requiring all but appropriation bills to be introduced by April 2. While all of these bills are important, we have placed a  in front of those that appear of special interest to NCCBI members.

 H. 816 (Wood) 121 House Members - An act to amend the North Carolina Constitution to expand the House of Representatives by adding one member, to prevent future 60-60 splits between the parties. The extra member would be elected at-large statewide until the next redistricting.
 H. 819 (Miller and Ellis) Campaigning Outside Polls - An act to strengthen the requirement that county boards of elections must provide a space beyond the buffer zone around the voting place where campaigning and other election-related activity can be conducted.
 H. 821 (Justus) Filling Candidate Vacancy - An act to simplify the process of filling a vacancy on a party ticket.
 H. 822 (Alexander) Health Insurance Coverage/Early Intervention - An act to require health benefit plans to cover medically necessary early intervention services for children from birth to three years of age who are covered under the plan.
 H. 827 (Weiss, Luebke, Insko and Glazier) Conform Bank Expense Deduction - An act to conform state income tax on banks to federal income tax on banks.
 H. 835 (Blackwood) Prescription Drug Discounts/Uninsured Elderly - An act requiring pharmacies to charge Medicaid beneficiaries no more than the Medicaid reimbursement price for prescription drugs.
 H. 849 (Weiss) Environmental Enforcement Accountability Act. An act to direct the Department of Environment and Natural Resources to establish and maintain a list o
f chronic violators and a database of enforcement actions and to further discourage violations relating to the environment.
 H. 850 (McLawhorn and Sexton) Community Colleges Professional Staff Salaries - An act to implement a plan for moving faculty and professional staff salaries in the North Carolina Community College System to the national average.
 H. 852 (Walend) Increase 'Rainy Day' Funds - An act to increase the funding for the Savings Reserve Account and to provide that any balance not needed to fund the Savings Reserve Account may be used only for capital improvements, repairs and renovations, or maintenance.
 S. 622 (Reeves) Electronic Signatures by Public Agencies - An act to clarify the use of electronic signatures by public agencies.
 S. 623 (Reeves) Anti-Hacker Attack Analysis - An act relating to anti-hacker attack analysis.
 S. 624 (Reeves) DENR/Local Environment Health Specialists - An act to modify the enforcement of local sanitation and on-site wastewater programs by authorizing local environmental health officials to authorize local environmental health specialists to enforce program rules and to eliminate unnecessary reauthorization or retraining of certain environmental health employees with local health departments or with the Department of Environment and Natural Resources.
 S. 629 (Clodfelter) State Banking Laws - An act relating to the state's banking laws. This is a blank bill.
 S. 631 (Clodfelter) Self-Insured Localities - An act to make statewide an act currently applicable to Charlotte and Raleigh that deems the creation of a self-funded risk program as the purchase of insurance for the purpose of waiving governmental immunity.
 S. 632 (Clodfelter) Workers' Compensation/Agricultural Employment - An act to lower the number of agricultural workers that must be employed by an employer in order for agricultural employment to be within the purview of the Workers' Compensation Act.
 S. 633 (Clodfelter) Modify UNC Bond Law - An act to revise the University of North Carolina Special Obligation Bond Law.
 S. 634 (Forrester) LRC Study Medical Errors - A joint resolution authorizing the Legislative Research Commission to study the incidence of medical errors in health care settings, the impact medical errors have on patient safety, and the benefits of mandatory reporting of medical errors.
 S. 637 (Brock) Annexation Referendum - An act to restore the pre-1959 annexation law by requiring a referendum on annexation on petition of the residents being annexed, and to allow the city to provide for a referendum on annexation.
 S. 642 (Brock) Lapsed Salaries Revert - An act to revert lapsed salaries to the General Fund for the rainy day fund and to encourage accuracy in budgeting by correctly funding salaries and salary-related expenditure for state employees and teachers.
 S. 643 (Brock) Double Penalties for Traffic Offenders - An act to double the penalties for motor vehicle offenders.
 S. 647 (Gulley) Limited Local Waiver of Sovereign Immunity - An act to authorize cities and counties to, by resolution, create a self-funded risk program and thereby waive governmental immunity from civil liability in tort to the extent that funds are available in the funded reserve for the payment of claims.
 S. 649 (Horton) New Party Ballot Access - An act to lower from two percent to one-half of one percent the percentage of gubernatorial voters a new party must collect in signatures in order to achieve ballot eligibility.
 S. 658 (Soles and Clodfelter) Appellate Procedure/State Banking Commission - An act to resolve conflicting statutes; to amend the appellate procedure before the State Banking Commission; and to authorize the commissioner of banks to appoint a hearing officer.
 S. 660 (Kerr and Rand) Gross Premiums Tax Equalization - An act to equalize the gross premiums tax rates levied against Article 65 corporations, health maintenance organizations, and other insurers.
 S. 661 (Reeves) Health Care Information Privacy - An act to protect health information privacy by prohibiting use or disclosure of protected health information for purposes of marketing without written authorization of the individual, and by limiting the use or disclosure of protected health information without individual authorization for certain public health-related activities.
 S. 663 (Ballantine) Property Tax on Yachts - An act to exempt certain boats from property tax. The exemption applies to boats owned by residents of other states who contract with a broker in North Carolina to sell the boat.
 S. 666 (Metcalf and Rucho) Travel and Tourism Incentive Grants - An act to create a travel and tourism capital incentive grant program administered by the state Department of Commerce.
 S. 668 (Metcalf) Beer/Wine Shipments - An act to authorize the Alcoholic Beverage Commission to issue beer and wine shippers permits to allow the direct shipment of malt beverages and wines to residents of North Carolina.
 S. 674 (Hoyle) Graduated Corporate Income Tax - An act to provide for a graduated corporate income tax. The act specifies that for corporate income from zero to $3,000, the income tax rate would be 1 percent; for income of $3,000 to $6,000, the rate would be 2 percent; for income of $6,000 to $9,000, the rate would be 3 percent; for income of $9,000 to $12,000, the rate would be 4 percent; for income of $12,000 to $15,000, the rate would be 5 percent, for income of $15,000 to $30,000, the rate would be 6 percent; for income above $30,000 the rate would be 6.9 percent.
 S. 675 (Hoyle) Code Officials Professional Qualifications - An act to establish a professional development program for code-enforcement officials, to authorize the use of funds from the Department of Insurance Fund for professional development of code-enforcement officials, and to appropriate funds from the insurance regulatory fund for that purpose.
 S. 676 (Hoyle) Revise the Banking Laws of North Carolina - An act to redefine a limited service facility, to clarify the powers of the banking commissioner and to update and modernize the allowable business activities of banks.
 S. 679 (Hoyle) Modify State Financing Laws - An act to modify the public financing laws of the state. This is a blank bill.
 S. 680 (Hoyle) Workplace Safety Tax Credits-AB - An act to allow income tax credits for voluntary workplace safety efforts by employers.
 S 681 (Hoyle) Economic Initiatives - An act to establish and implement economic initiatives. This is a blank bill.
 S. 683 (Kerr) State Capital Facilities Financing - An act to provide a statutory framework for the financing of capital facilities by the state and to authorize the issuance of special indebtedness to acquire two private prisons, for site work for a hospital at Central Prison, for a SBI laboratory addition for rape kit DNA testing and other forensic purposes, and for capital improvements and land acquisition for parks, recreation and the preservation of natural heritage.
 S. 685 (Weinstein) Conform Mortgage Lending Laws - An act to conform the laws related to permissible interest rates for home loans secured by second and subsequent mortgages to the laws governing permissible interest rates for home loans secured by first mortgages.
 S. 691 (Thomas) Property and Casualty Insurance Omnibus - An act to require real property companies to carry contractual liability policies; require motor vehicle and home appliance service agreement companies to use a specific format on all written materials submitted; mandate all required submissions to the Department of Insurance to be in a specific format if in writing; require warranty companies to comply with Article 1 of Chapter 58 of the General Statutes; define mechanical breakdown service agreements and require all mechanical breakdown service agreement companies to comply with article 1 of Chapter 58 of the General Statutes and with the rules regarding motor vehicle and home appliance service agreement companies; and provide that a bad check constitutes nonpayment of premium of a motor vehicle liability insurance policy.
 S. 713 (Hoyle) Workers Compensation/Restore Integrity - An act to restore integrity to the Workers' Compensation Act. This is a blank bill.
 S. 719 (Forrester) Phase Down Income Tax Rates - An act to reduce income tax rates, with the top rate falling to 6.75 percent after 2008.
 S. 723 (Kinnaird) I-40 Billboard Moratorium - An act reinstating the moratorium on further billboards along Interstate 40 in North Carolina from the Orange-Alamance County line to Wilmington.
 S. 725 (Clodfelter) Local Option Project Development Financing - An act to amend the North Carolina constitution to permit cities and towns to incur obligation to finance the public portion of certain economic development projects.
 S. 726 (Clodfelter) Judicial Branch Independence - An act to reinforce the independence of the judicial branch as a separate branch of state government and to ensure the fiscal integrity and accountability of the judicial branch, as recommended by the state judicial council.
 S. 732 (Albertson) Underground Storage Tank Program Amendments 2003 - An act to make improvements in the regulation of petroleum underground storage tanks and to the leaking petroleum underground storage tank cleanup program.
 S. 745 (Lucas) Same Day Registration - An act to provide for in-person registration and voting at early voting sites and at central sites on election day; and to provide for adequate identification requirements for persons registering and voting on the same day to protect against fraud; and to appropriate funds for implementing and monitoring the program.
 S. 752 (Jenkins) Economic Initiatives - An act to establish and implement economic initiatives. This is a blank bill.
 S. 756 (Garrou) Brownfields Amendments - An act to amend the Brownfields Property Reuse Act. This is a blank bill.
 S. 767 (Apodaca) Contract Surety Bonds - An act prohibiting officers and employees of the state and its political subdivisions from requiring construction contract bidders to obtain surety bonds from sureties or producers designated by the officers and employers.
 S. 771 (Thomas) Credit Scoring Limitation - An act to limit the use of a person's credit history for discounting rates on automobile and homeowners' insurance and to prohibit the use of a person's credit history as a sole basis for terminating insurance coverage, ceding an automobile insurance policy to the reinsurance facility, or subjecting a policy to consent to rate.
 S. 775 (Dalton) Prelitigation Mediation of Insurance Claims - An act to conditionally require insurers to provide information regarding policy provisions and policy limits prior to litigation when requested in writing by the persons who have claims, other than medical malpractice claims, subject to insurance policies and to give these insurers the option of initiating prelitigation mediation of the claims.
 S. 776 (Dalton) Workers' Comp/Definition of Employee - An act to clarify the definition of employee under the Workers' Compensation Act, particularly newspaper carriers.
 S. 777 (Foxx) Amend Dealer Licensing Law - An act to amend the motor vehicle dealers and manufacturers licensing law with regard to the manufacture, sale and distribution of trailers and semitrailers.
 S. 782 (Dannelly) Health Insurance Coverage/Early Intervention - An act to require health benefit plans to cover medically necessary early intervention services for children from birth to three years who are covered under the plan.
 S. 787 (Reeves) No Motor Fuel Sales Limits - An act to prohibit limiting the quantity of motor fuel sold or offered for sale under the Motor Fuel Marketing Act.
 S. 789 (Tillman) Motor Vehicle Repairs/Unfair Trade Practices - An act to provide that certain practices of insurance companies with regard to motor vehicle repairs are unfair methods of competition and unfair or deceptive trade practices.
 S. 802 (Soles) Medical Malpractice Witnesses Discovery - An act to reduce the costs of medical malpractice actions by limiting the number of expert medical witnesses and by limiting discovery.
 S. 829 (Albertson) Stormwater Compliance - An act to amend Chapters 105 143 of the General Statutes and other laws pertaining to incentives to encourage stormwater control.
 S. 841 (Shubert, Weinstein, Ballantine and Rucho) Prosperity Project - An act to enhance the prosperity of the people of the state of North Carolina by accelerating the completion of an interstate quality highway along the general route of U.S. Highway 74 linking Asheville to Charlotte to Wilmington.
 S. 853 (Metcalf) Community College Professional Staff Salaries - an act to implement a plan for moving faculty and professional staff salaries in the North Carolina Community College System to the national average.
 S. 856 (Metcalf) EMC to Develop Regulations - An act to direct the Environmental Management Commission to develop regulations. This is a blank bill.
 S. 860 (Clodfelter) Simplified Business Enterprise Taxation - An act directing the Revenue Laws Study Committee to study a proposal to reform and simplify state taxation of business enterprises and appropriating funds to the Department of Revenue for Information Technology necessary to estimate the revenue impact of proposals to improve state business taxation.
 S. 861 (Clodfelter and Hoyle) Adopt International Building Code - An act to adopt the International Building Code as the State Building Code.
=H. 856 (C. Wilson)
 S. 869 (Hagan) Restrict UNC Ownership of Certain Properties - An act to prohibit institutions of the University of North Carolina from financing, developing, owning and operating lodging facilities, conference centers and golf courses, except under certain conditions.
 S. 874 (Bingham) OSH Investigations/Violations - An act relating to the handling of first-time violations of Occupational Health and Safety Regulations.
 S. 895 (Queen) Facilitate NC Architecture - An act amending the laws of relating to architecture to facilitate North Carolina architecture by North Carolina architects.
 S. 904 (Queen) Correct Research and Development Credit - An act to correct problems that prevent the Research and Development Tax Credit from applying consistently to taxpayers increasing their research and development in this state.
 S. 905 (Queen) Raise State Minimum Wage - An act amending the State Wage and Hour Act to increase the state minimum wage to $6 an hour.
 S. 906 (Queen) Small Business Capital Gains Exclusion - An act to exclude income tax gains from investments in qualified small businesses.
 S. 907 (Hartsell and Weinstein) Certification of Wastewater Site Evaluations - An act to provide for the certification of wastewater site evaluators.
 S. 908 (Hartsell) Groundwater Protection Act - An act to protect groundwater as a current and future water resource and to encourage redevelopment of brownfields sites.
 S. 911 (Clodfelter) Improve Environmental Enforcement - An act to improve the enforcement of various environmental laws substantially raising fines. The bill raises the maximum civil penalty from $5,000 to $10,000 a day.
 S. 927 (Metcalf) Certify On-Site Wastewater Contractors - An act to provide for the certification of on-site wastewater contractors and inspectors.
 S. 943 (Hoyle) Biomanufacturing Funds - An act to appropriate funds to the Board of Governors of the University of North Carolina to assist with biomanufacturing construction financing and worker training that will increase the state's ability to compete for biomanufacturing markets and help boost future economic growth across North Carolina.
 S. 944 (Hoyle) 21st Century Jobs Act – Extends the qualified business tax credit and the state ports tax credit through 2007 and makes extensive revisions to the research and development tax credit to make it more easily apply to midsize and small business investments.
 S. 945 (Hoyle) Timely Environmental Permit Process - An act to provide that the secretary of Environment and Natural Resources shall modify the permit process for certain air quality permits, shall conduct a thorough review of the environmental permit programs to identify impediments to the timely issuance of permits by the Department of Environment and Natural Resources, and shall make recommendations for modifications to these programs in order to enhance economic development.
 S. 956 (Hartsell) Improve Rulemaking Process - An act to amend the Administrative Procedure Act to revise the procedure for adopting permanent and temporary rules, to create a procedure for the adoption of emergency rules, and to clarify the role of the Rules Review Commission.
 S. 980 (Albertson) Voluntary Stormwater Expenses Credit - An act to provide a refundable tax credit for voluntary expenses to reduce stormwater pollution beyond expenses required by law.
 S. 1010 (Gulley) Moving Ahead Transportation Initiative - An act to implement the North Carolina Moving Ahead transportation initiative by allowing cash balances in the Highway Trust Fund to be used to meet crucial transportation needs and to reaffirm the intent of the General Assembly that proceeds from the issuance of bonds under authority of the State Highway Bond Act of 1996 shall be used for the purposes stated in that act, and for no other use.
 S. 1018 (Berger and Clodfelter) Health Care Provider Professional Liability Insurance Changes - An act to require certain professional liability insurers to use experience and schedule rating plans and to establish premium stabilization accounts to mollify severe market cycle changes caused by decreases in investment income.

State Government

Novartis donates $1 million to Medicaid program
Novartis Pharmaceuticals donated $1 million to the state Department of Health and Human Services to help fund a program that provides targeted healthcare services for Medicaid recipients. The Community Care program, which now operates in 22 counties, seeks to lower overall Medicaid costs through preventative measures. Officials say the program will save $9.4 million in state funds and $29 million in total Medicaid costs this year.

Paulo Costa, president and CEO of Novartis Pharmaceuticals, said his company “recognizes the value of integrated health systems within Medicaid to improve quality and access to care while containing total Medicaid health care costs. It is our hope that other leading pharmaceutical companies will come forward to support Medicaid-Community Care of North Carolina and that other states will look to North Carolina as a model for their own Medicaid programs.”

The first Community Care initiative targeted child asthma, and lowered hospital admission rates for children by 34 percent and emergency visits by 8 percent. The average cost for an asthma episode decreased 24 percent.

The Novartis donation will help the state establish new Community Care networks and expand existing networks. Working with the N.C. Foundation for Advanced Health Programs, a 20-year-old nonprofit whose mission is to improve access to care and restrain costs, Community Care is seeking more funds to allow it to expand statewide and increase enrollment from 300,000 to 655,000 Medicaid clients. Through Community Care, Medicaid patients have case managers in their own community to help them in disease management and to act as their health advocates. This is typically a nurse or social worker who has more time for them than their doctors and who can educate them on their health care needs, such as lifestyle changes required for diabetes management.

Weak tax collections in March wipe out budget surplus
arch tax collections came in $119 million below budget, weakened by business fears over the war in Iraq and waning consumer confidence in the economy, an economist told state lawmakers Thursday. The lower-then-expected receipts wiped out the small budget surplus that had accumulated in the first eight months of the fiscal year and left the state $80 million in the red, according to Dave Crotts, chief analyst in the General Assembly’s Fiscal Research Division. Crotts said it’s difficult to predict how the final three months of the year will play out. The General Fund could end the year June 30 anywhere from a $323 million shortfall to a $77 million surplus, he said. Dan Gerlach, Gov. Easley’s senior budget adviser, said a shortfall could be easily addressed because the governor has withheld some money to state agencies.

Highway funds battered by weak economy
The weak economy is keeping drivers off the roads and contributing to sharp declines in revenues flowing into the Highway Fund and Highway Trust Fund. Through January, or seven months of the fiscal year, total revenues for the two funds are running nearly $26 million less than at this point last fiscal year. The biggest drop is in the motor fuels tax, which stood at $497 million at the end of January compared to $522.6 million the previous year. Total Highway Fund receipts amounted to $698.3 million through seven months, compared to $723.1 million last fiscal year, a drop of 3.4 percent. Total Highway Trust Fund receipts amounted to $1,253 million through January, compared to $1,278.8 million last fiscal year, a drop of 2 percent. See the chart below for a detailed look at both funds.


Status of the Highway Fund and Highway Trust Fund.  Dollars in Millions


Highway Fund

Month of January

7 Months Year-to-Date








Motor Fuels Tax







Motor Vehicle License Fees







Driver License Fees







Motor Fuels & Oil Inspection Fees







Title Fee














Subtotal – Highway Fund







Highway Trust Fund













Highway Use Tax







Motor Fuels Tax







Title Fee







Motor Vehicle Lease














Lien Recording







Repayment Fee







Subtotal – Highway Trust Fund














Legal Beat

Court upholds contributory negligence law
A divided state Court of Appeals on Tuesday upheld North Carolina's contributory negligence law in ruling that a Robeson County Superior Court judge erred when he granted a new trial to a woman after a jury concluded she was partly to blame in a slip and call case. Appeals Court Judge Eric Levinson wrote the opinion in Cameron v. Canady, No. COA 02-573, and was joined by Judge John Tyson. Judge Patricia Timmons-Goodson dissented. The case stems from an incident in which Joyce Cameron sued Gregory Canady, contending she hurt herself when she slipped and fell on his garage steps. Cameron claimed the steps were negligently maintained. A Robeson County Superior Court jury concluded the accident was caused both by the faulty steps and because Canady failed to use proper precautions when descending the stairs. At the time she was carrying a Rolodex in one hand and a bank bag in the other. She also admitted suffering from an inner ear problem that diminished her sense of balance. Because she was partially at fault, Cameron couldn't collect damages. However, the trial judge granted a motion by Cameron for a new trial, a ruling that the Appeals Court reversed and remanded.

Salesman strikes out over injury at ballpark
salesman for Sara Lee who won a company-paid trip to attend a food show in Chicago and then slipped off to attend a White Sox baseball game isn’t entitled to workers comp benefits for injuring his knee while leaving the ballpark, the Court of Appeals said in upholding a decision by the N.C. Industrial Commission. The case is Jacobs v. Sara Lee Corp., No. COA 02-413. Salesman Tim Jacobs had won the trip to the Chicago food show but decided to leave the convention one afternoon to attend the baseball game. On his way out of the ballpark, he slipped and ruptured a tendon in his right knee. He claimed the injury was work related. The Industrial Commission disagreed, saying that attending the baseball game was a personal deviation from Jacobs’ duties at the food show. Jacobs appealed but the Court of Appeals sided with the commission. The decision was written by Judge Ann Marie Calabria and concurred in by judges Linda McGee and Robert Hunter.


Kirk praises East Carolina at Founder’s Day celebration
reenville was chosen as the site for the current East Carolina University in 1907, not just because of the sites and cash it offered, but because of "some intangibles ... a fierce determination to build a facility that would educate the region's finest and hopefully keep them at home." NCCBI President Phil Kirk told the audience at ECU's Founder's Day celebration on March 27 "the vision, dedication, and work ethic were as evident in the early years of the last century as they are in this new century. That ministry -- that vision -- that mission has expanded over the years to many other important fields, including health care, business, art, music, sciences, technology, social work, and others," Kirk said. He saluted ECU for "training more professionals for North Carolina's public schools than any other college or university. I salute your emphasis on both quality and quantity.

Kirk, who chairs the State Board of Education, also attended an afternoon ceremony in which it was announced that the ECU School of Education is now officially the College of Education. He told the audience that ECU's College of Education had received the highest score in North Carolina on the report card for schools of education in the public and private systems.

He also emphasized ECU's role in economic development issues in the region. "Business and industry will not locate nor expand in areas that do not value public education. Taxes, incentives, water and sewer regulations, transportation, and cultural amenities are all important to economic development. However, the quality and quantity of the workforce rank number one among the factors business and industry consider in making location and expansion decisions."

Chancellor Bill Muse said Kirk he will be the recipient of an Honorary East Carolina Alumnus award on May 10 and also thanked him for serving on the ECU Board of Visitors. While on campus, Kirk participated in the groundbreaking for the renovations and expansion of the Rivers Building that is being funded through the UNC-community college bond issue. NCCBI coordinated the successful $3.l billion campaign in 2000.

NCCBI weighs in on airline crisis

NCCBI has joined with other groups across the country to let members of congress know of concerns about the deepening financial crisis threatening community air service. The group, Communities for Economic Strength through Aviation, sent the following letter to members of congress this week:

“We are gravely concerned about the impact of the airline industry’s financial crisis on our communities. With the industry in peril, so is the economic vitality of states and communities from coast to coast. We are writing to ask you to turn your attention to this problem as a matter of urgent priority. Commercial aviation is currently facing the greatest financial challenge in its history. The industry has lost $18 billion since the beginning of 2001. The industry is now carrying over $100 billion in debt and several U.S. airlines are in bankruptcy. Even in the absence of a war in Iraq, analyst had predicted losses of $6.7 billion in 2003. A war of limited duration is expected to raise losses to $10.7 billion. A war coupled with a major act of terrorism would likely increase losses to more than $13 billion and lead to a 23 percent total drop in passenger traffic.

“The impact on communities of the losses already experienced is st
aggering: thousands of flights have been eliminated and more than 100,000 jobs have been cut. According to the Air Transport Association, the war could put an additional 70,000 airline industry jobs and 2,2000 flight to small and mid-sized communities in jeopardy. Over the long term, many more jobs would be at risk because an estimated 15 jobs are produced in the broader economy for every job in the airline industry. Ultimately, this means that hundreds of thousands of additional jobs in sectors such as travel and tourism, manufacturing, wholesale and retail trade, agriculture, construction, communications, business and health services could also be lost. For example, Bureau of Labor Statistics data show that the travel and tourism sector alone has lost more than 460,000 jobs since September 2001.Reliable air service is indispensable to the economic health of our communities, our states and the nation. We urge you and your colleagues in Congress to act swiftly and decisively to address the unprecedented airline industry crisis and preserve this essential economic engine.”

Guilford County educators thank Kirk for leading state board
he Guilford County Board of Education passed a proclamation of gratitude for NCCBI President Phil Kirk's nearly six years of service as chairman of the State Board of Education at its meeting on March 11. Kirk has resigned his education post effective May 1. The resolution, signed by Chair Alan W. Duncan and Superintendent Terry B. Grier, praises Kirk for visiting all 117 school districts and more than 750 schools. It also reads, "The school children of North Carolina have benefited from his visionary leadership and statesmanship through his coordination of the most successful statewide bond campaign for $2.75 billion in bonds for schools and roads in the fall of 1996." He is also saluted for "helping the North Carolina General Assembly remember that the classroom teacher is vitally important as to whether our schools fail or succeed.  His leadership helped make the profession of teaching a more highly respected position in North Carolina and help raise teacher salaries nearer the national average."

Federal Issues

State slams revisions to New Source Review rules
he State of North Carolina told the Environmental Protection Administration on Monday that its proposed revisions to the New Source Review program represent an unacceptable retreat in protecting air quality in the state and the nation. “The EPA is proposing to scale back important air quality regulations designed to protect public health and the environment,” Gov. Mike Easley said. “Here in North Carolina, we have taken bold and progressive action through the Clean Smokestacks legislation to significantly reduce air emissions from our biggest stationary pollution sources,” Easley said. The governor’s comments were contained in documents the state submitted at an EPA regional public hearing to receive public comment on the proposed rules. The hearing in Research Triangle Park was one of five the EPA held around the nation.

The New Source Review (NSR) program, adopted by the EPA in the early 1980s, covers the construction of large industrial facilities and major modification of existing facilities. The program requires companies to obtain a permit before beginning construction or modification projects and stipulates that the permits will be granted only if the new plant or major modification includes pollution control measures that rely on state-of-the-art technology. However, the EPA concluded last year that the program had backfired. Far fewer new industrial facilities were being built and fewer modifications of existing facilities were being made because of the complexity of the NSR rules. In particular, the NSR rules defining “routine maintenance, repair and replacement” of existing pollution control equipment were burdensome.

Last November, the EPA issues proposed revisions to the NSR rules that offer companies greater flexibility to improve and modernize their operations in ways that will reduce energy use and air pollution, provide incentives to install state-of-the-art pollution controls and more accurately calculate actual emissions of air pollution. These NSR revisions also removed unintended regulatory barriers to investments in energy efficiency and pollution control projects, the EPA said.

"EPA is taking actions now to improve NSR and thereby encourage emissions reductions," said EPA Administrator Christie Whitman. "NSR is a valuable program in many respects but the need for reform is clear and has broad-based support. The steps we are taking recognize that some aspects of the NSR program have deterred companies from implementing projects that would increase energy efficiency and decrease air pollution."

N.C. Department of Environment and Natural Resources Secretary Bill Ross disagreed. ''We have serious reservations about this proposal and its potential impact on air quality in North Carolina and upwind states,'' he said.  'Under the existing rules, companies that make substantial changes to their facilities and/or increase emissions must undergo New Source Review and may need to upgrade their emissions controls. With the proposed changes, facilities could replace entire units in piecemeal fashion without ever addressing actual emissions increases or upgrading their controls.'' 

NSR rules only apply if the plant modification results in a net increase in air pollution. 

The proposed NSR revisions address:

Plantwide Applicability Limits (PALs): To provide facilities with flexibility to modernize their operations without increasing air pollution, facilities that agree to operate within strict site-wide emissions caps called PALs will be given flexibility to modify their operations without undergoing NSR, so long as the modifications don’t cause emissions to violate their plantwide cap.

Pollution Control and Prevention Projects: To maximize investments in pollution prevention, companies that undertake certain specified environmentally beneficial activities will be free to do so upon submission to their permitting authority of a notice, rather than having to wait for adjudication of a permit application. EPA is also creating a simplified process for approving other environmentally beneficial projects.

Clean Unit Provision: To encourage the installation of state-of-the-art air pollution controls, EPA will give plants that attain "clean unit" status flexibility in the future if they continue to operate within permitted limits. This flexibility is an incentive for plants to voluntarily install the best available pollution controls. Clean units must have an NSR permit or other regulatory limit that requires the use of the best air pollution control technologies.

Emissions Calculation Test Methodology: To provide facilities with a more accurate procedure for evaluating the effect of a project on future emissions, the final regulations improve how a facility calculates whether a particular change will result in a significant emissions increase and thereby trigger NSR permitting requirements.

Names in the News

Senate elects new members of UNC Board of Governors
year after scrapping a quota system that required the appointment of women, African-Americans and members of the minority political party, the Senate elected eight members of the UNC Board of Governors on Wednesday who fit the same profile. The new board members include two women, two African-Americans and one Republican. The new members are: R. Steve Bowden, an attorney from Greensboro; Peter D. Hans, a Raleigh lobbyist; Adelaide Daniels Key, an Asheville philanthropist; Charles S. Norwood Jr., a Goldsboro realtor; Estelle "Bunny" Sanders, mayor of the town of Roper in Washington County. Sanders and Bowden are African-American. Hans is a Republican. Three board members were re-elected: F. Edward Broadwell Jr., an Asheville banker; William L. Burns Jr., a banker from Hillsborough; and John W. Davis III, an investment banker from Winston-Salem. The board's vice chairwoman, retired educator Teena S. Little of Southern Pines withdrew her name from consideration before the Senate vote. Board Member Ruth Dial Woods, a retired educator from Pembroke, also was not re-elected. The House has not scheduled a vote yet on its slate of members to the board.

NCCBI President Phil Kirk was named to the U.S. Chamber's Chamber of Commerce Committee by U.S. Chamber Chairman Jim Kollaer. The group meets twice per year and advises the U.S. Chamber of Commerce board of directors on federal issues, outreach to the business community, and relations with local and state chambers. "I am honored to be selected to be a member of this group of some of my peers from across the country," Kirk said.  "I believe I will be able to learn a lot about what works and what does not work in various state chambers, and I look forward to sharing ideas from NCCBI with other state leaders." The group will meet in July in Naples, Florida in conjunction with the U.S. Chamber Executives' Leadership Forum.

 Joe Stansbury of Raleigh was elected chairman of the N.C. Federation of Young Republicans. Stansbury, 31, is the director of government relations for Variety Wholesalers Inc. and has worked on several local, state and federal campaigns.

 David Brody of Kinston and Robert J. Greczyn Jr. of Durham were appointed to four-year terms on the East Carolina University Board of Trustees by Gov. Mike Easley. Brody is the managing partner of Brody Associates and co-owner of Brody Brothers Dry Goods and Eastern Carolina Coca-Cola. Greczyn is president and CEO of Blue Cross and Blue Shield of North Carolina.


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