Legislative Report

Report 11-21
June 24, 2011

GENERAL ASSEMBLY OVERRIDES BUDGET VETO AND ADJOURNS

The General Assembly adjourned on Saturday, June 18th. The final week of this regular session saw the over-ride by House and Senate of the Governor’s veto of the state budget bill for 2011-13 (House Bill 200) and the passage of a wide variety of bills.

A number of bills that affect retirees were considered during the closing days. As we noted in last week’s Special Report #2, one bad bill emerged as well. Fortunately, we were able to stop House Bill 656, Add Sheriff’s Association to the Local Governmental Employees’ Retirement System (LGERS), with the help of some very effective grass roots lobbying by our members. The bill potentially jeopardized the Federal Tax exempt status of the assets in LGERS.

 Although House Bill 656 had raced through the Senate, the House did not schedule the bill for a concurrence vote on the last day of the session. The bill will be eligible for consideration next year, but it cannot be taken up when the General Assembly returns to Raleigh on July 13th for a special session on redistricting.

We thank all of our members who contacted their representatives in the House to stop House Bill 656. We had support from both local and state government retirees in this effort.

SPECIAL SESSION IN JULY

The adjournment resolution sets July 13th as the start date for a special session to deal with redistricting and a limited array of other issues as noted below.

(1) Bills:
a. Revising the Senate districts and the apportionment of Senators among those districts and containing no other matter.
b. Revising the Representative districts and the apportionment of Representatives among those districts and containing no other matter.
c. Revising the districts for the election of members of the House of Representatives of the Congress of the United States and the apportionment of Representatives among those districts and containing no other matter.

(2) Bills returned by the Governor with her objections under Section 22 of Article II of the Constitution of North Carolina, but solely for the purpose of considering overriding of the veto upon reconsideration of the bill.

(3) Filling of vacancies on the State Board of Community Colleges in accordance with G.S. 115D-2.1(b)(4)e.

(4) Bills in which the General Assembly makes an appointment or appointments to public office and which contain no other matter.

(5) Bills relating to election laws.

(5a) Adoption of conference reports for bills which were in conference as of Saturday, June 18, 2011 and conferees had been appointed by both houses as of that date.

(6) A joint resolution further adjourning the 2011 Regular Session to a date certain.

The General Assembly is expected to hold a second Special Session this summer to consider several bills that were introduced that deal with changes to the State Constitution. This session likely will be held in late August and be very limited in scope.

BILLS APPROVED LAST WEEK

House Bill 596: Transfer Surplus Property to the State Treasurer

This bill would give 50% of the proceeds obtained from the sale of surplus state property valued at $6 million or less to the Teachers’ and State Employees’ Retirement System. The bill was approved by the Senate and sent to the Governor on July 20th for signature.

House Bill 927: State Pension Plan Solvency Reform Act

This bill changes the TSERS and CJRS vesting period from five to 10 years for employees hired on and after August 1, 2011. The bill also enacts a new Section in the Teachers’ and State Employees’ Retirement System, Consolidated Judicial Retirement System, Local Governmental Employees’ Retirement System and Legislative Retirement System to be effective December 1, 2011 to detail a new Class 1 misdemeanor which prohibits a person from improperly receiving a decedent’s retirement benefits.

House Bill 927 was approved by the Senate, ratified, and sent to the Governor on June 16th.

House Bill 538: LGERS Law Enforcement Officer Disability

 This bill removes the one year requirement and makes local government law enforcement officers eligible for disability benefits on the first day of employment for any disability occurring while in the actual performance of duty.

HB 538 was approved by the Senate, ratified, and sent to the Governor on June 20th.

Bills Carried Over

Several bills of interest are eligible for consideration in the 2012 Session. The status of these is summarized below.

House Bill 473: Equal Tax Treatment of Government Retiree Benefits

The House Committee on State Personnel took up a committee substitute for this bill on Friday. The amended bill would phase in an exemption from North Carolina state personal income taxes for all retired state, local and Federal employee pensions. Essentially, the bill gradually extends to all governmental retirees the tax exemption that resulted from the Supreme Court ruling in the case of Bailey vs. Patton. The Bailey exemption initially applied only to governmental retirees who were vested as of August 12, 1989. The expanded exemption would be phased in from 2011 to 2020, covering an additional three years of retirees each year.

The bill remained in the House Finance Committee at the end of the session.

House Bill 928: State Health Plan Solvency Reform Act

There are two primary changes proposed in this bill. First, a new category of coverage is established to cover any gap that might arise in federal Medicare coverage for retirees if the Federal government were to raise the minimum eligibility age above age 65. In this case, state retirees would continue to receive primary coverage from the State Health Plan at age 65 until reaching the new Medicare eligibility. They would pay a premium to the state similar to the Medicare premium until they reached the new Medicare eligible age.

Second, the bill changes the Plan year to the calendar year effective January 1, 2013. There would be a six-month transition period (July1, 2012-Deceber 31, 2012). The Treasurer has expressed concerns about the costs associated with the conversion. Bill sponsors have agreed to work out a financing plan for the transition period that will not deplete Health Plan reserves.

This bill was approved by the House and sent to the Senate on June 10th. It was referred to the Insurance Committee and remained in this committee at the end of the session.

OUR GRATITUDE TO ALL OF YOU!

This is the last regular weekly Legislative Report for this session. We will issue a special report after the July redistricting session to summarize any activities of interest to our members.

Allow us to thank you for your support during this tumultuous legislative session. Your willingness to call upon legislators when necessary was a great help to us.

 We will include a detailed written report on the 2011 Session in the July-August issue of our newsletter, Living Power. Please feel free to call us with any questions you may have about the legislative session.