The state legislature continues at breakneck speed, following-through on the initiatives Republican leaders say they have promised the voters. 

 

Two bills filed last week begin to deal with the regulatory reform issue. Senate Bill 22, APA Rules: Increasing Costs Prohibition, sets parameters on how state agencies can adopt new regulations. The bill would allow new state regulations that generate a cost for the regulated only under narrow circumstances, including when they are expressly called for under the law. Other exceptions include responding to an unforeseen threat to public health or safety, a court order or a federal regulation. Sen. David Rouzer, R-Johnston, the bill's sponsor, said it does not affect rules already in place but that it would send a powerful message of support to the state's business community. He did not oppose an amendment offered by Sen. Bob Atwater, D-Chatham, to have the measure expire at the start of 2013. The bill now heads to the House.  A second bill SJR17 would create a legislative committee that would solicit public input on identifying current “excessive regulations”. This bill passed the Senate and now heads to the House. 

 

Meanwhile, Gov. Beverly Perdue announced that her administration has identified 900 agency rules, most of them outdated, recommended for elimination. Perdue sent the list to the General Assembly.

 

Perdue issued an executive order in October directing agencies under her purview to avoid issuing regulations that were not absolutely necessary. She also began an effort to identify existing, unnecessary rules and solicit public comments regarding rules on a website. She said Tuesday that the creation of new rules has dropped dramatically and that her administration will deliver another, potentially longer list of rules for elimination later in the year.

 

Governor Perdue announced last night in her State of the State address to the General Assembly that the budget shortfall is now at $2.4 billion rather than the $3.7 billion previously projected.  Figures released by Perdue's office show an additional $700 million in revenue growth, $200 million from reduced Medicaid costs, $50 million from State Health Plan savings and another $50 million in various savings. Republicans are skeptical of the revenue growth figure and have signaled they will go with a more conservative revenue estimate. 

 

SB 13 – Balanced Budget Act of 2011 passed the House and Senate amidst strong opposition from Democrats that the funds being cut are used to create jobs. The bill gives the governor authority to cut $400 million from the current fiscal year’s budget and requires $142 million in savings from existing state accounts, including economic incentive funds. The governor has not said whether she would veto the bill but, has been vocally opposed to cutting any economic incentive funds. 

 

Senate Bill 33 – Medical Liability Reform makes changes to the state’s medical liability system including limits on non-economic damages and periodic payments of future economic damages. The bill is expected to be heard in Senate Judiciary 1 this week and is considered the first step in broader legal reform efforts being championed by the NC Chamber.

 

Former North Carolina Chief Justice I. Beverly Lake Jr. has sent a letter to Sen. Pete Brunstetter, R-Forsyth, questioning the constitutionality of a cap on non-economic damages in medical malpractice lawsuits. Lake, also a Republican, cited two earlier court rulings -- one a 1904 decision, the other in 2004 -- which indicated that non-economic damages are property and a jury must be allowed to determine the amount. "North Carolina citizens have a 'sacred and inviolable' right to have a jury determine the amount of compensatory damages, including non-economic damages, under our Constitution," (the Insider 2/10/11)

 

This legislation – sponsored by Representative Mitch Gillespie, would allow for risk-based clean-up of industrial sites. The bill was discussed in the House Committee on Environment last week where concerns were voiced by NCDENR. Representative Gillespie pledged to work out any issues and concerns from all sides on this issue before the bill is voted on in committee. 

Petitioning or Engineering

Last week, PENC submitted a Letter to the Editor for The News & Observer supporting NCDOT's Chief Traffic Engineer Kevin Lacy's complaint to NCBELS against the North Raleigh Coalition of Homeowners' Associations. Lacy recently asked the state to determine if the coalition practiced engineering without a license after finding that the group submitted a study that "appears to be engineering-level work" in petitioning for more traffic signals on Falls of Neuse Rd.

Click Here for the Letter to the Editor 

Today, another article appeared in The News & Observer citing national "scorn" from e-mails, blogs, and even Rush Limbaugh accusing Lacy of suppressing citizen dissent. 

Engineer Criticism

A state transportation official is being rebuked in letters and e-mail messages from across the country for his charge that a North Raleigh man practiced engineering without a license when he filed a report backing a neighborhood push for new traffic signals. Kevin Lacy, the state Department of Transportation's chief traffic engineer, asked a professional licensing board in December to investigate David N. Cox. Lacy cited “engineering-level work” in an eight-page analysis, filed by Cox, that disputed an engineering study backing Lacy's refusal to approve two signals on Falls of Neuse Road. In e-mail to The News & Observer, DOT and the N.C. Board of Examiners for Engineers and Surveyors, critics have accused Lacy of suppressing citizen dissent. “This is America, not Russia,” said John Dendy of Roswell, Ga., formerly of Raleigh. Radio commentator Rush Limbaugh took up the attack Monday in a 90-second distillation of populist outrage. Lacy was using government power “to stomp on a citizen who dares disagree,” Limbaugh said. “Mr. Cox is apparently guilty of being smart,” he said. “He says his group's request for traffic lights was simply to make their neighborhood safe. American citizens petitioning their government are threatened for intelligently making their case.”

Lacy said in an earlier interview that he had advised Cox and his neighbors to hire an engineer for their work. He said they should not have done it on their own. He declined to comment Monday. Technology blogs and populist websites have spread the North Carolina story. A magazine for engineers interviewed state officials last week. Andrew Ritter, executive director of North Carolina's engineering examiners board, said his counterparts from six other states asked him about it at a recent conference. Ritter and Greer Beaty, a DOT spokeswoman, said Lacy is supported by professionals who understand the need to guard the public from being misled by phony engineers. “Kevin did what he believed in his core was the right thing to do,” Beaty said. Lacy and other licensed engineers are obligated by law to report possible violations.(Bruce Siceloff, THE NEWS & OBSERVER, 2/15/11).

 

After the presentation Rep. Rapp asked the Subcommittee leadership what their thoughts were on transferring secondary roads to the counties.  The chairs indicated they had not discussed the issue yet but it would be a topic for consideration in the long term. 

At another meeting of Transportation appropriations, NCDOT Chief Operating Officer Jim Trogdon talked to the Committee members about the NCDOT efforts in strategic prioritization, the 5 and 10 year work plans, urban loop programming, and the Mobility Fund. Rep. Killian chaired the meeting and gave his strong support to the NCDOT for their efforts to apoliticize the project selection process. He encouraged the Department to share their ideas to downsize, privatize, and make their operations more efficient. On the Mobility Fund he asked that the Department consider projects that we are currently aware of rather than looking for new ones. 

Sen. Gunn encouraged the Department to bring forward any burdensome rules and regulations that impede the speed with which NCDOT can deliver projects. Trogdon said they were working to identify those issues now. (Courtesy Julie White, NC Metropolitan Coalition)

What's Up This Week

In her State of the State speech last night the Governor told the General Assembly that she proposes reducing the corporate income tax from the current rate of 6.9% to 4.9% - the lowest marginal rate in the southeast - costing the state about $400 million in revenue. Perdue also announced her reorganization plan for state government that would reduce the number of state agencies from 14 to 8. The governor pledged that she will protect education from the budget ax and signaled she will not compromise on this issue. However, she does plan to offer an early retirement option to state employees that would result in the elimination of 1,0000 state positions. Details of these proposals will be available when the Governor releases her budget later this week.

 

Attorney General Roy Cooper has petitioned the U.S. Supreme Court to reinstate the state's lawsuit against the Tennessee Valley Authority, saying pollution from TVA power plants has a “tremendous impact” on public health and the environment in North Carolina. Cooper filed court papers last week asking the high court to review a decision by the 4th Circuit Court of Appeals throwing out the lawsuit against the utility. “At issue is whether people in North Carolina will continue to die as a result of TVA's excess emissions — even though these deaths could be readily averted by installing and operating modern pollution control equipment,” the petition states. Cooper contends the appeals court overstepped its bounds when it ruled last year that a public nuisance complaint couldn't be brought against facilities permitted under the Clean Air Act. The decision conflicts with previous rulings by the Supreme Court and appeals courts in other circuits upholding the right of states to use nuisance claims to stop pollution from crossing state lines, according to the petition. Cooper sued the TVA in 2006, alleging emissions from its power plants drift into North Carolina and harm the health of people living here while degrading the environment and obscuring mountain vistas.

U.S. District Court Judge Lacy Thornburg sided with the state in January 2009, declaring four TVA plants closest to North Carolina a public nuisance and setting limits on how much sulfur dioxide, nitrogen oxides, mercury and soot could be emitted. The utility appealed, and in July a three-judge appeals court panel in Richmond, Va., unanimously overturned Thornburg's decision, citing its impact on utility regulation. If allowed to stand, “the injunction would encourage courts to use vague public nuisance standards to scuttle the nation's carefully created system for accommodating the need for energy production and the need for clean air,” appeals court Judge Harvie Wilkinson wrote. But Cooper said in his Supreme Court petition that the law needs to be clarified. “Given the tremendous burdens and costs that TVA's excess emissions unfairly place on North Carolina and its citizens, this court should grant the petition and resolve this important issue,” the petition says.(Clarke Morrison, ASHEVILLE CITIZEN-TIMES, 2/04/11).

Power plants in North Carolina ranked the eighth highest in the nation for mercury emissions in 2009, sending out more than 4,000 pounds of the pollutant that year, according to a new report by Environment North Carolina. Progress Energy's power plants ranked first among North Carolina plants for the amount of mercury emitted. Progress Energy's Skyland plant released 973 pounds of mercury in 2009, the 27th highest in the nation, according to the report. Coal-fired power plants are the largest source of mercury pollution in the U.S., according to the environmental advocacy group. Environment North Carolina released the report ahead of the federal government's proposal for limiting mercury emissions. The U.S. Environmental Protection Agency is set to propose a standard in March. Environment North Carolina is calling on the agency to issue a strong standard to reduce mercury and other air pollution.(ASHEVILLE CITIZEN-TIMES, 2/03/11).

House Republican leaders will announce the membership of the House's committee on legislative and congressional redistricting this week, according to a spokesman for House Speaker Thom Tillis. “We are announcing the Redistricting Committee Tuesday on the floor of the House,” said Tillis spokesman Jordan Shaw. The Senate has already selected its Redistricting Committee. The General Assembly is constitutionally charged with redrawing political maps for North Carolina’s congressional representation as well as the state House and state Senate following the decennial census.(Barry Smith, FREEDOM NEWSPAPERS, 2/04/11).

Gov. Beverly Perdue on Monday dismissed a national political pundit's assertion that she could be the most vulnerable Democratic governor on the ballot in 2012. "It's never good for an incumbent when poll numbers that show you losing by 7 points are viewed as positive news," Chris Cillizza wrote Friday in The Fix, his Washington Post politics blog. An experienced political fighter, Perdue said she's used to taking on doubters. "I've been called the most challenged person wherever I was running since the day I filed (to enter my first race) in the late '80s," she said. "I've never lost a race, and I don't intend to lose a race." Since she took office two years ago, Perdue has been burdened by the down economy and negative polling. Perdue acknowledged that her ratings ride on the economy, and she said she's counting on continued economic improvement in the coming months to bolster her re-election bid. Ongoing state and federal investigations into her campaign finances also could play a role, although Wake County District Attorney Colon Willoughby has said the state probe isn't focused on Perdue or any other elected official. Political observers also see her closely tied to President Barack Obama's fortunes in North Carolina, especially with the Democratic convention landing in Charlotte next summer.(Cullen Browder, WRAL NEWS, 2/07/11).

 

State transportation officials have penalized contractor Barnhill Contracting Co. $1.12 million for running more than one year behind schedule on completing the new Oak Island Bridge. Barnhill's bid for the bridge construction was $36.6 million. The price of additional materials raised the contractor cost to $37.5 million, said Ron Hancock, a DOT bridge construction engineer. But if the late completion penalty stands, the actual amount paid out by the department would be about $36.3 million. A December 2008 fatal construction accident and the resulting investigation caused a lengthy work delay. The DOT later rejected cracked girders received by Barnhill, causing additional delay while new ones were ordered. It also took more time than anticipated to receive an environmental permit for the bridge work, and the torrential rains of last September caused additional time overruns, Hancock said. Barnhill applied for, and was granted, at least one 30-day extension in the bridge construction schedule. Drew Johnson, vice president of Barnhill's heavy highway division, said Barnhill will forward any subcontractor requests for time extensions to the Transportation Department and will split the loss of funds with the subcontractors.(Ken Little, WILMINGTON STAR NEWS,

 

If legislative Republicans follow through on a campaign promise to approve legislation requiring voters to present photo identification at the polls, the state may have to issue nearly a million photo IDs to voters, an analysis by the State Board of Elections indicates. The analysis, obtained by WRAL News, shows that at least 700,000 registered voters in the state don't have a driver's license or photo ID issued by the Division of Motor Vehicles. Records for another 300,000 people need further checking to determine if they have a license, elections officials said. North Carolina has about 6.4 million registered voters.

 

North Carolina has spent $31.4 million on snow removal and treatment of roads so far this winter. “We budgeted $30 million for winter weather expenses and can tap into about $10 million in emergency reserves to back that up,” said Department of Transportation spokesman Steve Abbott said. “If it goes beyond that, then we would use money from our maintenance budget. There will not be any cutback in snow and ice removal because of money issues as making the roads safe and clear are a first priority for the department.” Two of the state's 14 transportation districts in western North Carolina account for nearly one-third of the spending. In the DOT's District 13, which includes the counties of Buncombe, Burke, Madison, McDowell, Mitchell, Rutherford and Yancey, total costs come in at just more than $5 million. District 14, which includes Cherokee, Clay, Graham, Haywood, Henderson, Jackson, Macon, Polk, Swain and Transylvania, has tallied $4.2 million in expenses. The Department of Transportation has calculated expenses through Jan. 18. The total may increase some as outside contractors hired to assist DOT turn in their bills, according to Abbott.(John Boyle and Jon Ostendorff, ASHEVILLE CITIZEN-TIMES, 2/07/11).

 

The chief executive officer of the State Ports Authority said Monday that he would support moving the authority under control of the state Department of Transportation in theory but that many discussions about details still must take place. Tom Eagar made comments during a Monday meeting of the Governance Subcommittee of the Governor’s Logistics Task Force, which is debating the idea. Gov. Beverly Perdue established the task force in 2009 to examine various transportation and logistics issues in the state. The Ports Authority, headquartered in Wilmington, currently reports to the state commerce secretary. Ports spokeswoman Shannon Moody, in an e-mail response to questions from the Wilmington Star-News, said putting the ports under the department could benefit the authority and the state. “Streamlining logistics benefits all involved,” she said.(Patrick Gannon, WILIMINGTON STAR-NEWS, 2/07/11).

Gov. Beverly Perdue has awarded $8.5 million in federal stimulus funds to 43 agencies and organizations to promote energy conservation and use of renewable fuels. The grants were given to local government, private industry and other organizations. In addition to promoting energy conservation, the grants are designed to create new jobs. North Carolina has distributed about 90 percent of the federal stimulus money it received for energy conservation use. The grants were in three different areas: Main Street projects, which need at least 50 percent fund matching from other sources; Commercial Renewables Initiatives; and Energy Efficiency for Commercial, Industrial and Nonprofits.(Steve Lyttle, THE CHARLOTTE OBSERVER, 2/08/11).

 

The University of North Carolina at Chapel Hill enrolled more out-of-state students last year than the UNC system allows, and the university will likely have to pay for it this week. The UNC system has an 18 percent cap on out-of-state freshmen, a ceiling installed in 1994 to ensure adequate college access for North Carolinians. UNC-Chapel Hill went over by 13 students in a total class of 3,960. The result: a budget reduction of $158,225 -- the amount the state will spend to educate those extra non residents this year. The penalty kicks in when a public university exceeds the cap two years in a row.

 

The state's largest electric utilities are pushing for a change in state law they say they need before they can build new nuclear reactors. But a coalition of environmental and consumer advocates are lining up to fight the proposal, which would make it easier for utilities to raise rates to pay for nuclear plants. Progress Energy and Duke Energy executives say the lengthy rate hearings they would have to go through now are effectively blocking efforts to build new reactors in the state. "We can't raise the money on Wall Street unless we get that kind of regulatory structure" in North Carolina, Progress CEO Bill Johnson said. The companies announced last month that they are merging. Jointly financing new nuclear reactors, which can cost more than $10 billion apiece, is one of the main drivers of the merger.

A coalition of more than a dozen groups that includes environmentalists, nuclear critics, N.C. Justice Center and AARP want to keep this state from adopting a nuclear policy that's already in place in South Carolina, Florida and others. The groups have placed full-page newspaper ads to warn that this state's power companies are gambling on nuclear projects that could experience cost overruns and end up abandoned, as happened more than 60 times in the 1980s. The AARP also sent a mailer to more than 100,000 members in the state last week, characterizing the proposal as a blank check that will lead to certain annual rate increases. "GOP legislators will be nervous about voting for something that will fairly quickly start to raise people's energy bills," said Peter Walz, organizing director at the N.C. Conservation Network. It's not clear when the new Republican-controlled General Assembly might come forward with the legislation Charlotte-based Duke and Raleigh-based Progress are seeking. Republican leaders in both chambers said through spokesmen they don't know the status of a draft bill. Rep. Daniel Clodfelter, D-Mecklenburg, said the utility proposal is a no-brainer. The tradeoff is that "you end up paying more on the front end, but you have more stable rates and you have lower rates over the long term," Clodfelter said.

The change Progress and Duke are seeking would let utilities raise rates to pay off the interest on their debt. The principal would not be paid until the nuclear plant is built and in operation. Still, by paying the interest each year rather than after the plant is completed, the cost of a plant would be reduced by about 25 percent, said Robert Gruber, director of the Public Staff, the state's consumer advocacy agency. That's why Gruber has thrown his support behind the power companies' proposal, after years of opposing the idea as bad public policy. "I've reluctantly come to this conclusion because nuclear plants are so expensive," said Gruber, whose agency intervenes on behalf of ratepayers in utility rate cases.(John Murawski, THE NEWS & OBSERVER, 2/10/11).