Legislative Year in Review

Budget

Early in the long session, Senate and House leadership said they would have a budget finalized by the end of June. The General Assembly was earnestly working towards that goal, but disagreements between the two chambers emerged around tax cuts and budget reserves. Consequently, budget negotiations between the House and Senate continued throughout the summer, and the legalization of casinos then became a part of the negotiations, along with spending levels for capital improvements and infrastructure projects.
 
Nearly three months after the start of the fiscal year, the House and Senate passed a compromise budget with HB 259—2023 Appropriations Act. Instead of signing or vetoing HB 259, Governor Roy Cooper allowed the bill to become law without his signature on October 2, 2023, in order to expedite Medicaid expansion implementation.
 
The biennial spending plan allocates a total of $29.8 billion for FY 2023-24 and $30.9 billion for FY 2024-25. 
 
Highlights of the 2023 Appropriations Act include:
 
Economic Development

• Increases the number of megasites (sites of over 1,000 acres) from five to seven and allocates nearly $108 million for work on these sites;
• Authorizes the selection of up to 15 selectsites (sites of less than 1,000 acres) and provides $10 million to support readiness efforts;
• Allocates $350 million for the Global TransPark, an airfield and industrial site in Eastern North Carolina. 

Education

• Provides a 4% raise in the first year for K-12 teachers and 3% in the second year for a total of 7% over the biennium;
• Increases the funding for the Opportunity Scholarships program to $520.5 million by 2032-2033 for tuition grants to private schools. In a major change, the Opportunity Scholarship program expands eligibility to families of all incomes. 

Environment

• Appropriates $20 million for research related to PFAS to be conducted by the North Carolina Policy Collaboratory. 

Health Care

• Allocates the $1.6 billion “signing bonus” that the state received from the federal government for Medicaid expansion to numerous behavioral and rural health projects;
• Allots nearly $320 million for a new children’s hospital that will include a behavioral health hospital to be operated by UNC Health and built in the Raleigh-Durham area.

Higher Education

• Allocates $500 million to fund NCInnovation, a nonprofit enterprise that will help university researchers within the UNC System to commercialize their research;
• Provides greater authority to the legislature over the North Carolina Community College System, including transferring the Governor’s appointments to the State Board of Community Colleges to the General Assembly;
• Provides funding to local community colleges for economic development-related projects. 

Infrastructure

• Appropriates $2 billion for water and sewer upgrades for about 200 projects for local communities across North Carolina. 

State Government

• Provides a 7% raise over the biennium to most state employees;
• Authorizes legislators to refuse future records requests from the public and exempt them from the public records law;
• Prohibits COVID-19 vaccine mandates on employees by schools, colleges, state agencies and local governments, with the exception of hospitals or other facilities requiring vaccinations for federal funding. 

Taxes

• Caps the franchise tax on the first $1 million of a company’s tax base starting in 2025;
• Accelerates planned cuts to the personal income tax rate by decreasing the current rate of 4.99% to 4.6% in 2024, 4.25% in 2025 and 3.99% in 2026, with the rate going down as low as 2.49% in the next five years if certain revenue triggers are met.

 
Other Key Provisions

• Modifies language from HB 347—Sports Wagering/Horse Racing Wagering, which passed this session, by eliminating the limit of 12 mobile betting operators and instead requiring operators to have “written designation agreements” with professional sports teams and the owners of certain major sports facilities. 

Medicaid Expansion

Legislation to expand Medicaid in North Carolina, HB 76—Access to Healthcare Options, passed the legislature and was signed into law by Governor Roy Cooper at the end of March. However, the General Assembly included a provision in HB 76 that made Medicaid expansion contingent upon the state budget becoming law. 
 
Despite a six-month delay, the House and Senate finally passed HB 259—2023 Appropriations Act at the end of September. Since Medicaid expansion had been the Governor’s greatest priority since his first term, Governor Cooper immediately announced that he would allow the budget to become law without his signature. The budget became law on October 2 and, as a result, Medicaid expansion in North Carolina became official.
 
The Department of Health and Human Services is prepared to launch Medicaid expansion on December 1 of this year. Consequently, an estimated 300,000 people currently receiving Medicaid Family Planning benefits will automatically be enrolled on the start date, and another 300,000 North Carolinians are expected to follow soon thereafter.
 
Since the federal authorization of Medicaid expansion in 2014, North Carolina becomes one of 41 states to have expanded Medicaid.

Elections Bills

The General Assembly passed several elections bills this year that make significant changes to the state’s election laws prior to the 2024 election. 
 
SB 747—Elections Law Changes
Governor Cooper vetoed this bill that makes wide-ranging changes to current election laws because he contended that it would disenfranchise some North Carolinians. SB 747 shortens the timeframe that absentee ballots can be accepted by requiring their receipt by Election Day, provides poll observers with more rights and limits private funding for election administration in county and state-level elections. The House and Senate overrode the Governor’s veto; and the Democratic National Committee and the North Carolina Democratic Party immediately filed a lawsuit to prohibit this bill from going into effect.
 
SB 749—No Partisan Advantage in Elections
This legislation changes the makeup of county boards of elections in all 100 counties by decreasing their members from five to four and the State Board of Elections by increasing its members from five to eight. In a major change, all appointments made to the State Board of Elections and to county boards of elections will be made by the General Assembly and not the Governor. These boards will now be equally split between the two political parties (current law gives the Governor’s party a majority on all elections boards). A conference committee was appointed with both chambers adopting the conference report. However, the Governor vetoed the bill, and the legislature subsequently overrode his veto. A week after the veto override vote Governor Cooper filed a lawsuit asserting that SB 749 unconstitutionally removes power from the executive branch.  

Energy & Broadband

This session the General Assembly passed legislation that protects vital sectors like energy and broadband as well as prevents the exclusion by state and local governments of energy generated by any method.
 
SB 58—Protect Critical Infrastructure
As a result of attacks on electrical substations, the Senate introduced this bill that increases criminal penalties for attacks on the state’s critical infrastructure, which includes telephone, broadband, broadcast or cable telecommunications as a part of the state’s critical infrastructure. After passing the House and Senate by unanimous votes and with bipartisan support, Governor Cooper signed SB 58 into law.
 
HB 130—Energy Choice/Solar Decommissioning Rqmts.
This legislation prohibits local governments from passing ordinances that prohibit certain energy sources to be used by residents. HB 130 also requires owners to decommission solar panels in a responsible way when operations cease for a solar project and that certain financial assurance requirements are met by the owner of the utility-scale project. The bill became law without the Governor’s signature.
 
SB 678—Clean Energy/Other Changes
This bill changes statutory language to include nuclear resources and fusion energy in a mix of energy solutions like solar and wind. SB 678 also includes other provisions such as those related to dams, solar capacity and local governments. After the adoption of a conference report by the House and Senate, Governor Cooper vetoed the bill. In response, the House, with bipartisan support, and the Senate overrode the Governor’s veto, allowing SB 678 to become law.

Health Care 

As in previous legislative sessions, health care policy was a top priority for the General Assembly this year. There were a number of bills introduced this session, and several that passed.
 
Bills Passed
 
HB 346—Reorganization & Economic Development Act
Under this legislation, Blue Cross and Blue Shield of North Carolina (BCBSNC), the state’s largest insurer, is able to restructure its corporate model by creating a new nonprofit holding company to serve as the parent holding company. The state’s Insurance Commissioner strongly opposed the bill because he argued that insurance premiums will increase for those covered and BCBSNC will face less regulation by the Department of Insurance. The State Treasurer also raised objections to the bill. The bill’s sponsors asserted that HB 346 would allow BCBSNC the flexibility to quicky make business decisions and, thereby, become more competitive in the health insurance marketplace. After considerable debate in committees and on the floor, the House and Senate passed this legislation, and the Governor signed it into law.
 
SB 20—Care for Women, Children and Families Act
SB 20 contains new abortion restrictions and a number of other maternal health provisions. It allows for abortion up to 12 weeks, with longer timeframes for rape, incest, fetal anomalies or if the mother’s life is danger because of a medical emergency. Despite considerable debate in both chambers, the House and Senate passed this legislation. Governor Cooper vetoed the bill at a public veto ceremony in May, but the House and Senate ultimately overrode his veto a couple of days later. The law is being challenged in court.
 
HB 125—NC Health & Human Services Workforce Act
This legislation creates protections for health care workers from violence in the workplace such as requiring law enforcement officers be present in emergency rooms and hospitals implement security plans based on risk assessments. HB 125 also includes provisions related to the health care workforce like the allowance of relocation licenses for physicians and physician assistants serving in the military. Both chambers adopted the conference report, and the Governor signed the bill into law.
 
Bills Introduced
 
SB 3—NC Compassionate Care Act
After a similar bill was introduced last year, Senate Rules Committee Chair Bill Rabon (R-Brunswick) filed SB 3 to legalize medical marijuana for people who suffer from debilitating medical conditions and life-threatening diseases such as cancer. Under SB 3, a patient would have to obtain written certification from a physician with whom they have a legitimate physician-patient relationship for a legal purchase. In addition, the bill sets up a regulatory system with patients having to obtain registration cards and a licensing structure for suppliers. The bill passed the Senate but has remained stalled in the House. It will be eligible for consideration during the 2024 legislative short session.
 
HB 75/SB 47—PA Team-Based Practice
The House and Senate introduced companion bills that modify the supervision requirements for certain physician assistants who practice in team-based settings. The House passed the bill. Sen. Rabon amended the bill on the Senate floor making the bill contingent on the enactment of SB 3—NC Compassionate Care Act. Once amended, the House voted to not concur with the Senate’s change. This legislation remains stalled from final passage due to the tie to the medical marijuana debate.
 
SB 321—Medical Debt De-Weaponization Act
Championed by State Treasurer Dale Folwell, who is running for Governor in 2024 from the Republican Party, this bill creates new legal protections to address medical debt collections. Such protections include requiring health care facilities to provide patients with a written explanation of financial assistance options or providing consumers with a private right of action against medical debt collectors and health care facilities. Although the Senate passed SB 321, the House chose not to consider the legislation, and it remains in the House Rules Committee.
 
HB 218/SB 175—The SAVE Act
Companion bills were filed in the House and Senate in an effort to significantly change current law by eliminating physician supervision of Advanced Practice Registered Nurses (APRNs). Opponents of these bills asserted that such legislation risks patient safety, raises health care costs without increasing access to health care and removes physician involvement in patient care. Neither bill was taken up by the House nor the Senate.
 
HB 649—Ensure Timely/Clinically Sound Utiliz. Review
This bill proposes changes to the prior authorization process currently required by insurers in North Carolina. HB 649 makes necessary changes for quality patient care such as requiring insurers to make utilization review and restrictions easy to understand and accessible to the public and setting timeframes for utilization reviews to occur in a timely manner. Although the bill passed the House by a unanimous vote, the Senate did not hear the bill in committee, and it remained in the Senate Rules Committee. HB 649 remains eligible for the 2024 short session. 

Other Legislation

Annual Bills
Each session the House and Senate introduce three bills in the form of the annual Farm Act, the annual Regulatory Reform Act and the annual General Assembly Appointments bill.
 
SB 582—North Carolina Farm Act of 2023
The annual farm bill makes various changes to the state’s agricultural laws. SB 582 includes wastewater amendments, a provision renaming the official state fruit to the muscadine grape as well as other modifications. The Governor vetoed the bill based on a provision he stated weakens wetland protections. The House and Senate successfully overrode his veto, and SB 582 became law.
 
HB 600—Regulatory Reform Act of 2023
This bill amends state law related to state and local government, energy, agriculture and various other sectors. A conference committee was appointed to work out the differences between the House and Senate, and they ultimately adopted a conference report. However, Governor Cooper vetoed the bill based on environmental concerns. The House and Senate subsequently overrode his veto, and HB 600 became law.
 
SB 754—General Assembly Appointments
The annual appointments bill makes appointments by the House and Senate to various public offices like the Boards of Trustees for the state’s universities and the Board of Trustees for the State Health Plan. After passage by both chambers, SB 753 became session law.
 
Appointment Powers
The General Assembly passed legislation this session that limits the Governor’s power over appointments to certain boards and commissions. 
 
SB 512—Greater Accountability for Boards/Commissions
This legislation changes the appointment structure for the Economic Investment Committee, Environmental Management Commission, Commission for Public Health, Board of Transportation, Coastal Resources Commission, Wildlife Resources Commission, North Carolina Railroad Board of Directors, Board of Directors for the UNC Health Care System, Utilities Commission, the University of North Carolina’s Board of Governors and the Boards of Trustees for the University of North Carolina at Chapel Hill and North Carolina State University. SB 512 transfers some of the Governor’s appointments to the General Assembly as well as to Council of State members like the State Treasurer and Agriculture Commissioner. In addition, the bill changes the number of members to boards and commissions like the Utilities Commission, which decreases from seven members to five. The bill was heavily debated in committee and when it was voted upon by the House and Senate. The Governor vetoed SB 512 based on his assertion that the bill is unconstitutional, but the House and Senate moved to override his veto. Immediately after the veto override vote, Governor Cooper filed a lawsuit challenging the transfer of gubernatorial appointments to the legislature as a violation of the separation of powers as recognized by the North Carolina Constitution. A link to the complaint for Cooper v. Berger can be found here.
 
Social Issues
As a part of a national trend, bills related to hot-button social issues were passed by the General Assembly this year.
 
SB 49—Parents’ Bill of Rights
This bill establishes certain rights for parents related to education, health, privacy and the safety of their child. SB 49 contains a section that prohibits gender identity and sexuality to be included in curriculum for grades K-4. The Governor vetoed SB 49, and the House and Senate successfully overrode his vote. Consequently, SB 49 became law.
 
HB 574—Fairness in Women’s Sports Act
This legislation restricts transgender females from playing on women’s sports teams from middle school to the college level. The legislature passed HB 574, which was vetoed by the Governor. The House and Senate overrode the gubernatorial veto, and HB 574 became law.
 
HB 808—Gender Transition/Minors
HB 808 prohibits gender transition care for minors. The House and Senate passed this bill, which was later vetoed by Governor Cooper. The two chambers overrode his veto, and HB 808 became law.
 
HB 750—Address ESG Factors
This bill prohibits state entities from using environmental, social and governance (ESG) criteria or economically targeted investment (ETI) requirements when making employment or financial decisions. The State Treasurer publicly supported this bill. After passage by the legislature, Governor vetoed HB 750, but the House and Senate overrode his veto, allowing HB 750 to become law.
 
Sports and Entertainment
The debate around legalizing casinos in North Carolina was a major part of this year’s budget negotiations between the House and Senate. Although casinos did not pass, the General Assembly did pass sports wagering legislation that garnered a lot of attention this session.
 
HB 347—Sports Wagering/Horse Racing Wagering
HB 347 is a bipartisan bill that legalizes and regulates mobile and online sports betting as well as betting on horse racing. The Lottery Commission is responsible for the implementation and regulation of this industry. In the House, the final vote for the bill did not fall along party lines but rather split both the Republican and Democratic Caucuses. In the Senate, HB 347 received bipartisan support with its passage. The Governor signed the bill into law in June at a ceremonial event in Charlotte, with a group of bipartisan legislators and representatives from professional sports organizations in attendance. Under HB 347, mobile sports betting and horse racing wagering become effective January 8, 2024. 

Redistricting

With a new state Supreme Court in place based on the 2022 elections, the state’s highest court reversed a previous redistricting ruling this spring in Harper v. Hall. The state Supreme Court held that partisan gerrymandering claims present a political question and not one for the state’s judiciary to decide under the North Carolina Constitution. As a result of this reversal, the Court held that the General Assembly may draw new legislative and congressional maps this year rather than continue to use the prior court-ordered maps.
 
In late September, the Joint House and Senate Redistricting Committees gathered public comments for the 2023 redistricting process with three meetings held across the state. The House and Senate finalized the maps in late October, prior to the candidate filing deadline that begins December 4 and ends on December 15. 
 
The maps coming out of this year’s redistricting process will shape the 2024 elections and legislative elections for the rest of the decade. In addition, these maps may decide who will control the U.S. Congress.
 
The map for the state House, which was drawn by a map-making consultant, includes 68 Republican-leaning districts, 45 Democratic-leaning districts and seven toss-up seats. In order to maintain a veto-proof majority, House Republicans will need to win 72 out of the 120 seats. The state Senate map includes 29 Republican-leaning districts, 18 Democratic-leaning districts and three toss-up seats. Senate Republicans will need to keep 30 out of the 50 Senate seats in order to maintain a supermajority.
 
Based on a previous map drawn by court-appointed special masters, there is a 7-7 split among Democrats and Republicans in the North Carolina delegation for the U.S. House of Representatives. The General Assembly’s newly drawn congressional map includes a possible partisan split of 11-3 favoring Republicans or a potential 10-3 split with one competitive district.
 
Governor Roy Cooper and House and Senate Democrats spoke out against the maps and criticized the redistricting process as a whole. However, under the state Constitution, redistricting bills are not subject to a gubernatorial veto; therefore, only a simple majority in the House and Senate was needed for the three redistricting bills to become law. Democrats are likely to challenge the new maps in federal court.
 
The new state House map can be found here, and the new state Senate map can be found here. The congressional map for the 14 districts can be found here. 

Adjournment and The 2024 Short Session

Under SJR 760—Adjournment Resolution, the North Carolina General Assembly adjourned on October 25 and will return monthly until the start of next year’s short session. The House and Senate will hold two days of sessions a month, beginning Wednesday, November 29 at 12pm. During these monthly sessions, the two chambers can only consider select matters such as veto overrides, bills related to election laws or bills responding to litigation challenging the legality of legislative enactments. 
 
In accordance with the adjournment resolution, the General Assembly will formally convene the 2024 short session on April 24, 2024.

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