Legislators Gearing Up for Short “Short” Session
Today, legislators convened at noon for the Short session which lawmakers predict to be shorter than most. Leaders in both the House and Senate have indicated that beyond amending the budget and raises for teachers there’s not much else they want to talk about. However, there are other issues that they will have to address that may challenge the aggressive schedule they have planned for adjournment.
1) There’s a budget shortfall. Currently, the general fund budget for FY 2014-15 is expected to fall short of revenue by $445 million. While the rainy day funds that have been set aside for emergencies should be sufficient to cover this deficit, pay raises for teachers have been promised and until the Governor’s budget is released, it’s unclear how these will be funded. And then there’s the Medicaid overruns to deal with… The “short” session just got a little longer.
2) Coal Ash Legislation. The Governor has released his coal ash clean-up plan but, it does not appear to align exactly with what the House and Senate are considering. The Senate plan is expected to be more aggressive than the House but even House leaders showed displeasure with the Governor’s plan.
3) Further Tax Reform. One of the more significant proposals coming out of the Revenue Laws Study Committee is to eliminate the Privilege Tax that some municipalities currently assess on businesses within their jurisdictions. The proposed legislation would require these municipalities to cap this tax at $100. The League of Municipalities and the affected cities oppose this change and lawmakers are considering allowing cities to increase their property taxes to make up the difference.
Another item surfaced surprisingly last week out of the Energy Policy Committee. The draft bill on Energy Modernization or “fracking” includes a cap on local government property tax collections. Specifically the bill says city (and county) property tax revenues for a fiscal year may increase no more than 8% from the prior fiscal year. The bill makes this cap applicable to all cities regardless of whether you are impacted by fracking.
4) House Leadership. With the Speaker of the House running for U.S. Senate, the House leadership will be challenged to come to a consensus among themselves on legislation that is the least bit controversial. Additionally with the sometimes adversarial relationship between the House and Senate, the Senate will have an advantage in negotiations due to the stability in their leadership and because there are fewer of them needed to reach agreement.
Legislative Priorities for PENC
1) Regulatory Review of Engineering Work - Subsequent to PENC's presenting the Summary of Findings and Recommendations to the Legislative Environmental Review Commission on January 15th, the ERC convened three Workgroup Meetings that included representatives of the regulatory agencies and PENC. Betsy Bailey and Gus Simmons, PE, Chair of the PENC workgroup, attended these meetings and participated in the discussions on behalf of PENC.
The legislative that will be introduced by Rep. Millis, PE and supported by the members of the Environmental Review Commission is attached and includes the following:
1. Requires the affected agencies (NCDENR, NCDOT, DHHS, local governments) to standardize their regulatory review procedures and to clarify the difference between “suggestions” or “recommendations” and requirements.
2. Requires the affected agencies or Regulatory Authority to cite the statute or regulatory authority for the requirement when requesting revisions or asking for additional information.
3. Requires the Regulatory authority to create an informal internal review process at the request of the Submitting Party for “innovative” designs or in the case of disagreement between the reviewer and the Submitting party.
4. Creates a pilot study to review the work activities of the PERCS wastewater collection system permitting program and the stormwater permitting program to determine what activities constitute the Practice of Engineering. This study must be conducted in cooperation with NCBELS and PENC. The results shall be reported by April 15, 2015.
5. Requires that each Regulatory Authority review the working job titles for every employee with job duties that include the review of Regulatory submittals. Additionally the Regulatory Authority must propose revisions to working job titles that will eliminate the public identification as “engineers” of persons reviewing Regulatory Submittals who are not Professional Engineers.
2) Opposition to HB 201 – Reinstate 2009 Energy Conservation Code – This bill is eligible for consideration during the short session because it passed in the House chamber last year. The bill was referred to Senate Rules which is where it resides now. The legislation, championed by Representative John Torbett would roll-back the commercial building energy code, making NC one of the worst states in the country regarding minimum energy efficiency levels. And, it will no doubt impact the level of DOE funding to companies and institutions in NC which from 2010 has amounted to $1.9 billion.
AIA NC is also opposing this bill.
3) Contractor Prequalifications/QBS Modifications - Following the passage of HB 857 in last year's legislative session one major issue from the bill was left to be studied during the interim, contractor pre-qualifications. Over the last few months the interim committee met and has come out with a series of recommendations to add more definition to the procedures that government entities undertake in pre-qualifying contractors for public work. Click here for a copy of the bill which is being sponsored by Rep. Dean Arp, PE
PENC supports the new requirements added to the bill that further strengthen QBS by prohibiting the consideration of fees.
4) Transportation and Other Funding at Risk – With the budget shortfall there is always the possibility that transportation funds could be diverted to the General Fund to help close the gap. While this is not anticipated, there is a larger than normal cash balance in the Highway Fund that could persuade lawmakers to “borrow” in the short-term. The cash balance is due to the accelerated rate at which NCDOT is requesting and receiving reimbursement from the federal government (because federal funds are expected to run out this summer) and delays in large projects due to lawsuits (Bonner Bridge). The budget shortfall could also cause other programs in NCDENR to be reduced even further.
PENC will be monitoring the budget deliberations very carefully and will oppose any further reductions to programs that impact engineering projects.