North Carolina General Assembly Week in Review

North Carolina lawmakers briefly returned to Raleigh earlier this week for an administrative session, adjourning within a few minutes. Per the General Assembly’s adjournment resolution, SJR 916: Adjournment Resolution, lawmakers will return to Raleigh again at the end of the month, reconvening at noon on Monday, July 29.

Gubernatorial ActionsNorth Carolina legislators wrapped up the bulk of their legislative business for the year at the end of last month, sending a flurry of bills over to Governor Roy Cooper’s (D) desk for further action. Following the legislature’s adjournment on Friday, June 28, Governor Cooper had ten days to take action on the 18 bills sent over by the General Assembly, on top of the six bills already awaiting his decision. In total, after lawmakers left Raleigh for the month, Governor Cooper acted on 24 bills: signing 18 bills into law, vetoing five, and allowing one to become law without his signature.

Gubernatorial Actions

Bills signed into law by the Governor include:

HB 98: Right to TryIndividualized Treatments – allows eligible patients with life-threatening or severely debilitating illnesses the right to try individualized investigational drugs, biological products, and devices. The Governor signed HB 98 into law on July 8. HB 199: DMV Proposed Legislative Changes.-AB – was signed into law by the governor on July 2 and would make a handful of changes to the laws related to motor vehicles, including:

• Authorizes and studies the issuance of a digital version of a drivers license that can be displayed on a mobile device
• Requires ignition interlock as a condition for restoration of a drivers license after certain revocations based on a conviction of death by motor vehicle
• Authorizes remote electronic notarization and electronic signatures for motor vehicle transactions
• Requires the Division to study using alternative materials for registration plates and ways to modernize issuance of dealer plates
• Increases the licensing period for motor vehicle dealers from one year to two years and increases the penalties for littering
• Requires the Department of Transportation to contract with a private entity to administer the logo sign program

HB 228: Rev. Laws Tech., Clarifying, & Admin. Chngs – makes various technical, clarifying, and administrative changes to the revenue laws, makes technical changes to the Medicaid hospital assessment statutes, replaces an expiring unit of measure used by Fannie Mae referenced in state statute setting certain restrictions on high-cost home loans, increases the special registration plate fee for the NC Tennis Foundation special license plate, and increases the bond debt limit for the Housing Finance Agency. The Governor signed HB 228 into law on July 1. HB 250: Public Safety/Other Changes – makes revisions to death investigations under the jurisdiction of the Office of the Chief Medical Examiner, modifies laws related to limited driving privileges and restoration of a license after certain driving while impaired convictions, modifies a section of the license plate reader pilot program to require certain information be provided to the State Bureau of Investigation, allows local boards of education to use eminent domain for utility easements, adds tianeptine to the controlled substance schedule, among other changes. Governor Cooper signed HB 250 into law on July 8. HB 591: Modernize Sex Crimes – creates a new offense for sexual extortion and aggregated sexual extortion, modifies the offenses of first-, second-, and third-degree sexual exploitation of a minor to include material that is modified by technological means and to include child sex dolls, creates a new offense of an obscene visual representation of a minor engaging in sexual activity, modifies the offense of solicitation of a child by computer to include communications with parents of minors, makes conforming changes to the sex offender and public protection registration program statutes, and makes changes to the offense of disclosure of private images to clarify that altered images violate the prohibition against disclosure of certain private images. The Governor signed HB 591 into law on July 8. HB 593: Various General Local Laws – provides an additional civil penalty for violating motor vehicle restrictions on a designated road segment in Macon County, amends certain regulations applicable to sanitary districts, clarifies funds allocated to certain localities, and requires the state to transfer certain real property to the City of Monroe. The Governor signed HB 593 into law on July 8. HB 900: Certain CIHS Partners/Regulate Tobacco Prod – allows the State Board of Education to approve the substitution of a new higher education partner for two Wake County Public School System cooperative innovative high schools and allows the school system to continue to operate the two schools as cooperative innovative high schools while seeking a new higher education partner during the 2024-25 and 2025-26 school years. HB 900 also creates a new regulatory system for the certification of consumable products and vapor products, including the creation of a public directory of these certified products, and provides enforcement mechanisms for violations of the newly authorized regulatory system. Governor Cooper signed the bill into law on July 3. HB 942: SHALOM Act – creates a definition of antisemitism as a tool and guide for recognizing, combating, tracking, and reporting antisemitic incidents in North Carolina, and informing related trainings and education. The Governor signed the bill into law on July 1, saying, in part, that “defining antisemitism is important to stopping it, and this new law helps do that as antisemitic incidents are on the rise.” SB 303: Various Court Changes – makes changes and technical corrections to the laws governing various aspects of the courts, including removing the requirement that adoption petitions retained by the clerk be the original petition, establishes venue in Wake County for mandatory complex business cases and cases assigned to a business court judge, authorizes a clerk of superior court to set conditions of pretrial release, establishes a safe babies court to hear certain juvenile abuse, neglect, and dependency matters, authorizes the state Supreme Court to hold sessions in any location throughout the state through 2026, among other changes. The Governor signed SB 303 into law on July 8. SB 319: Insurance Rev/Online Auctions/Firefighters – was signed into law on July 2 and does the following:

• Clarifies that risk retention groups chartered in North Carolina are subject to examination by the Commissioner of Insurance and are responsible for the costs of the examination
• Reduces from 5% to 1.85% the tax rate applicable to gross premiums paid for coverages within North Carolina to risk retention groups not chartered within the state
• Establishes a procedure for remote bidding at a foreclosure sale
• Allows health benefit plan sponsors, on behalf of any enrolled individual, to consent to delivery of all plan-related documents by electronic means
• Makes the Firefighters’ Health Benefits Pilot Program permanent and renames the program to the Firefighters’ Cancer Insurance Program
• Increases the monthly payment and pension for members of the North Carolina Firefighters’ and Rescue Squad Workers’ pension fund
• Provides an alternative means to background checks for firefighting and prevention services applicants living in North Carolina for more than five years

SB 332: 2023 Appropriations Act Changes – authorizes the various salary increases for teachers, principals, and other school support personnel for the 2024-25 fiscal year. While the Governor signed SB 332 into law on July 8, he also encouraged legislators to provide additional pay increases to teachers throughout the state. SB 355: North Carolina Farm Act of 2024 – was signed into law on July 3 and makes various changes to North Carolina’s agricultural laws, including:

• Eliminates the civil penalty for transporting alive swine without identification and amends the definition of feral swine in the Wildlife Resources Commission statues to include live swine transported without identification
• Directs the Agriculture and Forestry Awareness Study Commission to study communication lines that fall below minimum height requirements and create a public safety hazard
• Limits agronomic soil testing to in-state soil samples
• Allows the Department of Agriculture and Consumer Services to use the full amount of funds appropriated for the Bioenergy Research Initiative on efforts to advance and promote new and emerging crops
• Codifies a prescribed burn cost share program
• Allows cities to regulate beehives only within their incorporated limits
• Prohibits cities and counties from imposing stormwater utility fees for property used for bona fide farm purposes
• Reenacts the conservation tax credit for certain real property donations and modifies the purposes for which donated land will quality for the tax credit

SB 357: Adjustments to the 2023 Appropriations Act – provides funding for the continuation of the compensation grants portion of the child care stabilization grants that were set to expire at the end of June and allows the use of Opportunity Scholarship program funds to be used to cover administrative costs of the Personal Education Student Accounts for Children with Disabilities Program. In signing SB 357 into on law on July 8, Governor Cooper stated, “this legislation provides critical but limited grants to help keep childcare centers open for the next few months. However, legislators need to do much more for parents, businesses and children by extending these grants through 2025…” SB 425: HHS Omnibus – clarifies the manner of service of petition and notice of hearing on disabled adults, amends the definition of family child care home, modernizes local health director qualifications, extends unlicensed kinship care to half-siblings of relative children, clarifies that the first responder to whom an infant may be surrendered must be on duty, allows for the application to the court for limited custody of surrendered infants upon the initiation of notice by publication, updates guidelines for trauma-informed standardized assessments, modifies the Quality Rating Improvement System, temporarily extends the option to decrease the Medicaid enrollment burden on county departments of social services, creates a uniform reference to East Carolina University regional behavioral health facilities, updates the Hospital Violence Act, and clarifies Medicaid benefits for inmates. The Governor signed SB 425 into law on July 8. SB 527: ABC Omnibus 2023-24 – was signed into law on July 8 and makes changes to the state’s alcohol laws, including:

• Exempts ready-to-drink cocktails from the mixed beverages charge
• Allows ABC stores to open on New Year’s Day, Fourth of July, and Labor Day, at the discretion of the local ABC board, so long as those holidays do not fall on a Sunday
• Allows to-go and delivery sales of mixed beverages and wine by the glass
• Allows a mixed beverage permittee to purchase spirituous liquor from any ABC board operating in the same county as the permittee
• Allows ABC stores to sell value-added products, gift cards, and barrels
• Allows local boards to sell spirituous liquors below the price paid to the distiller

SB 559: Charter Schools/Pension/ESOP – allows the board of directors of certain charter schools to elect to participate in the State Health Plan for Teachers and State Employees, creates additional flexibility for charter schools to become a participating employing unit in the State Health Plan, and clarifies the definition of a historically underutilized business as it relates to an employee stock ownership plan. Governor Cooper signed SB 559 into law on July 8. SB 565: Revise Automatic Expunction – revises the laws governing the automatic expunction of records by clarifying that expunged court records are confidential and must be retained by the clerks of superior court as confidential files and allows prosecutors to have access to all confidential files of expunged records. SB 565 was signed into law on July 8. SB 802: C-PACE Program – establishes the Commercial Property Assessed Capital Expenditure Program to be administered by the Economic Development Partnership of North Carolina. The C-PACE program allows owners of qualifying commercial property to apply for long-term financing provided by private lenders to pay for property improvements that include energy efficiency, water conservation, renewable energy, and resilience measures. Governor Cooper signed the bill into law on July 8.

In addition to the bills signed by Governor Cooper, five bills were vetoed:

HB 155: Title for Off-Road Veh./Low Speed Veh. Insp – would allow the Division of Motor Vehicles to issue a certificate of title for all-terrain vehicles and utility vehicles, expand the streets or highways on which a modified utility vehicle may be legally operated, and authorize the off-site safety inspection of low-speed vehicles by licensed safety inspection stations. HB 155 passed the Senate with a 33-16 vote and the House with a 92-12 vote, receiving bipartisan support in both chambers. The Governor vetoed the bill on July 3 citing concerns about the lack of safety features in certain off road vehicles in his veto statement. HB 556: Tenancy in Com./E-Notary/SmallClaims Changes – would codify common law rules governing concurrent ownership of real property as tenants in common, extend the expiration dates on emergency video notarizations and emergency video witnessing to July 1, 2025, amend confidentiality and geolocation technology requirements in the notary public laws, prohibit cities and counties from adopting ordinances or resolutions that prohibit source of income disclosure to rental housing providers, clarify authorized litigation costs in summary ejectment matters, provide that a judgement in a small claim action can be rendered electronically by the magistrate, and would begin the appeal period in a small claim action when judgement is rendered by the magistrate. HB 556 passed the Senate with a 36-6 vote and the House with a 74-39 vote, both with bipartisan support. Governor Cooper vetoed the bill on July 3, arguing in his veto statement that the bill would make it harder for low-income families to find affordable rental housing and creates legal ambiguity regarding when eviction orders become effective. HB 690: No Centrl Bank Digital Currency Pmts to State – would prohibit a state agency or the General Court of Justice from accepting a payment using central bank digital currency, or from participating in any test of central bank digital currency by any Federal Reserve branch. HB 690 passed both chambers with bipartisan support – 39-5 in the Senate and 109-4 in the House. Governor Cooper vetoed the bill on July 5, citing concerns about the legislation being premature and reactionary when, at the federal level, efforts are being made to ensure standards and safeguards are in place to protect consumers. SB 166: 2024 Bldg. Code Regulatory Reform – would amend various development regulations and building codes, including:

• Prohibiting any public water system owned or operated by a local government unit from requiring a customer to install a backflow preventer on an existing connection, including multifamily dwellings
• Clarifying that fees collected by a building inspection department must be used to support the administration and operations of the department only
• Requiring a local government reviewing residential building plans for issuance of a building permit to perform the initial residential building plan review concurrently with development approvals required by other government agencies
• Providing clarifications to the requirements for model homes
• Prohibiting a political subdivision from adopting a local fire prevention code provision which would apply to certain dwellings that are not prescriptively required by the North Carolina Residential Code
• Requiring the North Carolina Code Officials Qualification Board to develop a State Building Code Permit Technician certificate program and certificate
• Reorganizing the Building Code Council to have 13 members who are appointed by the General Assembly and the Governor to mirror the same membership size as the Residential Code Council
• SB 166 passed with bipartisan support in both chambers – passing the Senate by with a 34-10 vote and the House with a 77-28 vote. Governor Cooper vetoed the bill on July 5, arguing in his veto statement that the bill prevents North Carolina’s building code from adopting innovations in construction and mobility and removes subject matter experts from the Building Code Council.

SB 445: Recording of Court-Filed Documents – would exempt any certified copy of a court-filed document from formatting requirements applicable to paper documents presented to a register of deeds for registrations, establish that the small claims appeal period begins when a judgment is rendered, require written findings of indigency in small claims appeals, modify the criteria for a plaintiff’s motion to dismiss a summary ejectment appeal, require the clerk to disburse payments within five days of a request, increase the punishment for willful and wanton damage to the residential real property of another, and prohibit fraudulent rental, lease or advertisement for sale of residential real property. SB 445 passed both chambers unanimously, 44-0 in the Senate and 115-0 in the House. Governor Cooper vetoed the bill on July 8, arguing in his veto statement that the bill creates legal ambiguity regarding when eviction orders become effective and makes it harder for low-income individuals to appeal as indigent in small claims court.Lastly, the governor allowed one bill, SB 607: Regulatory Reform Act of 2024, to become law without his signature on July 9. SB 607 makes changes to laws related to occupational licensing, rulemaking, and other regulations, including:

• Exempts certain activities from requiring licensure as a barber or cosmetologist and increases the number of in-class training hours required for licensure as a massage therapist to 650 hours
• Increases the punishment for property crimes committed against critical infrastructure, including public water supplies, wastewater treatment facilities and manufacturing facilities
• Prohibits the acquisition of quartz mining operations and lands containing high purity quartz by foreign governments designated as adversarial by the United States Department of Commerce
• Prohibits local governments from requiring an applicant for water or sewer service for residential development to agree to any condition not otherwise authorized by law
• Excludes aquaculture from the definition of “development” for the purposes of the Coastal Area Management Act and limits the authority of the Marine Fisheries Commission to adopt rules regulating aquaculture equipment
• Amends the appointments to the North Carolina Railroad Board of Directors by decreasing the number of appointments by the Governor from seven to six and making one member the Commissioner of Agriculture or their designee
• Clarifies the prohibition on counties and cities enacting and enforcing certain ordinances, rules, and regulations related to battery-charged security fences
• Allows a manufactured sign seller to repossess the sign if the buyer fails to make payment, even if the sign is affixed to real property

SB 607 passed the Senate by a final vote of 30-13 along party lines and the House with a final bipartisan vote of 63-37. When announcing that he would allow the bill to become law, Governor Cooper stated that the bill contains some important changes that should become law, however, cited the changes to the charter and bylaws of the North Carolina Railroad as the reason for not signing the bill into law.

Upcoming Legislative Meetings

Currently, there are no legislative committee meetings scheduled for next week.