Old North State Report - May 6, 2016
It was a light second week of session for lawmaking in Raleigh as the controversy surrounding HB 2 (“Public Facilities Privacy and Security Act”) kept the spotlight.
Legislative leaders announced Wednesday they have reached agreement on a $22.225 billion spending level for the Fiscal Year 2016-2017 state budget. In the coming weeks, the House and Senate will pass budget proposals that limit spending to $22.225 billion, which represents a 2.26 percent spending increase over last year’s budget. Meanwhile state agencies continued presenting their requests to the various Appropriations subcommittees.
The House passed three bills which will now go to the Governor’s desk. Senate Bill 725 (“Unemployment Insurance Technical Changes”) was approved unanimously, Senate Bill 729 (“Various Changes to the Revenue Laws”) was supported by a large majority, and Senate Bill 726 (“Update the references to the federal Internal Revenue Code”) was passed on a near-party line vote after debate about taxing homeowners for income received from a short sale.
U.S. Justice Department officials repudiated House Bill 2 this week in a letter to Governor McCrory charging that the state law violates federal law. The department gave state officials until Monday to respond "by confirming that the State will not comply with or implement HB2” to avoid the possible loss of federal education funding. The letter says HB2, which pre-empted Charlotte's anti-discrimination ordinance, violates Title IX, which bars discrimination in education based on sex, and Title VII of the Civil Rights Act, which bans employment discrimination.
The Governor, House Speaker Tim Moore, and Senate President Pro Tem Phil Berger said they would examine the state’s options but argued the letter was a prime example of federal over-reach. The Republican leaders have publicly refused to back down in the face of protests and pressure. Privately, they may be exploring ways to ameliorate the situation. A meeting was held with Charlotte Mayor Jennifer Roberts on Thursday leading some to speculate the idea of both the city and state backing off their positions was under consideration.
All of this occurred in a week where Republican leaders sought to focus attention on new federal data showing North Carolina’s economy has grown faster than any other state since 2013. In addition, they touted plaudits from Site Selection magazine for North Carolina’s economic competitiveness. The resolution of the HB 2 controversy and its impact on the state remains fluid at this moment. We will keep you updated as developments warrant.
The articles published in this newsletter are intended only to provide general information on the subjects covered. The contents should not be construed as legal advice or a legal opinion. Readers should consult with legal counsel to obtain specific legal advice based on particular situations.