This Week at NCGA: Bertie occupancy tax, school calendar changes, hotel safety, freeze corporate tax

This Week at NCGA: Bertie occupancy tax, school calendar changes, hotel safety, freeze corporate tax

February 25th, 2023

Bills introduced this week at the North Carolina Assembly include proposals to institute an occupancy tax in Bertie County and to halt reductions of the state’s corporate income tax rate.

The state House discussed bills that would allow public schools to start earlier than state law currently allows, but it appears they may be dead on arrival in the Senate.

The House gave approval to its own version of changes to regulations on people that stay over 90 days in a hotel or motel. And a group of Democratic lawmakers are sponsoring a bill trying to limit the number of homes corporate-style landlords can own.

Senate Bill 132, introduced Monday by Sen. Bobby Hanig (R-Currituck), would allow Bertie County to collect a six-percent occupancy tax on all stays in hotel and motel rooms and other short-term rentals like bed-and-breakfasts, AirBnB’s and VRBOs.

“This bill will help to promote tourism in Bertie County, providing further economic growth through increased profits for businesses, job creation in the tourism industry, and increased business engagement,” Hanig said.

The measure designates at least two-thirds of the collections to promote travel and tourism to Bertie and the remainder for tourism-related expenditures in the county, and authorizes the Bertie County Commissioners to create a Tourism Development Authority to manage the funds.

A total of 57 counties, and eight special districts including Ocracoke Island, are authorized by the General Assembly to collect an occupancy tax. Along with Bertie, Hertford and the Hyde County mainland are the only ones in the Greater Outer Banks area that are not.

The House Education Committee on Tuesday heard six bills that allow select local school district make their own decisions on the when the school year starts and ends, and a measure to make the changes statewide.

Currently, the state requires schools to open no earlier than the Monday nearest August 25 and end the school year by the Friday closest to June 11.

The current law passed in 2004 was backed by the state’s tourism industry along the coast and in the mountains to address staffing issues that arise when students depart while business is still in peak season, and limits the ability of families from around the state from being able to vacation in August.

Members of northeastern North Carolina’s delegation have said they support giving local districts more say in setting the calendars.

Several districts have proposed calendars for 2023-24 that ignore the law. This week, Gaston County approved a calendar that does just that.

In the course of the House committee meeting, reports only one legislator said anything against calendar flexibility. Rep. Frank Iler, R-Brunswick, said that allowing districts to change the school start or stop dates could affect families trying to take vacation, and could even necessitate taking a child out of school to attend vacation.

“I’m all about local flexibility, but I feel like we’re attacking the family,” Iler said. “Instead of family time, they’ll have to take their kids out.”

The six local bills were approved by the panel, while the statewide measure was only discussed and is expected to come back before the panel at a later date.

In an email, staff for Senate President Pro Tempore Phil Berger (R-Rockingham) told EdNC he had the following to say about calendar flexibility bills during a press gaggle on Tuesday:

“I don’t see where there’s a need to change the calendar law, except maybe to beef up the enforcement mechanisms for local systems that ignore the law,” Berger said. “I don’t know that there’s a particular bill that would do that but from my perspective that’s probably the only change that would need to be made.”

The House gave approval of its own Hotel Safety Bill, House Bill 41, a week after the Senate approved its own version.

Both bills are intended to address the increasing numbers of families or low-income people that are using hotel rooms or campsites for long-term lodging due to the affordable housing shortage.

This is a second attempt to amend state law sought by the lodging industry. It also adds campgrounds and RV parks to the statute. A similar bill was vetoed by Governor Roy Cooper last year.

The measure was approved with bipartisan support by an 83-41 vote, including 17 Democrats who voted aye. Rep. Bill Ward (R-Pasquotank), Rep. Ed Goodwin (R-Chowan) and Rep. Keith Kidwell (R-Beaufort) all voted in the affirmative.

The next step for the bills will be votes in the opposite chamber, which will likely lead to the measures being sent to a conference committee to work out their differences.

Bills entitled “Make Corporations Pay Their Fair Share” were introduced in the Senate and House that would halt the phasedown of the corporate income tax in North Carolina at the current rate of 2.5 percent.

Senate Bill 142 — with primary sponsors Sens. Lisa Grafstein (D-Wake), Julie Mayfield (D-Durham), and Natalie S. Murdock (D-Buncombe) — and House Bill 165 — with primary sponsors House Minority Whip Marcia Morey (D-Durham), Reps. John Autry (D-Mecklenburg), Pricey Harrison (D-Guilford), and Gloristine Brown (D-Pitt) — are in response to the budget that lawmakers passed in 2021 that scheduled the corporate income tax rate to drop to zero by 2030.

With Republicans controlling both chambers, the pair of bills are likely won’t move forward

“North Carolina families have been dealing with economic uncertainties for too long – not knowing whether they will have child care so they can work, whether their work will pay enough for bills, whether they can keep a roof over their heads and food on the table,” said Alexandra Sirota, Executive Director of the NC Budget & Tax Center.

The center reports a recent survey shows that North Carolina voters overwhelmingly reject state lawmakers’ previous decision to eliminate corporate income taxes, with 69 percent of respondents reporting opposition to the cuts and only 9 percent strongly supporting lawmakers’ choice.

House Bill 114, Home Ownership Market Manipulation, sponsored by Rep. Kelly Alexander (D-Mecklenburg), would cap at 100 the number of single-family homes that people or businesses can buy in the state’s largest counties.

That measure likely faces strong opposition from GOP lawmakers, and is not expected to move out of the House Rules committee.

The News and Observer reports it’s the first such proposal aimed at combating the growth of Wall Street-backed firms that have converted tens of thousands of homes to rentals across the country over the past decade.

Senate Bill 134, Curb Underwriting Abuses, sponsored by Sen. Todd Johnson (R-Union), requires Commissioner of Insurance Mike Causey to institute measures for “combating underwriting abuse”.

It’s the second straight session Sen. Johnson has introduced the same bill, which never made it out of the Senate Rules Committee in 2021.

The bill would require insurers writing residential property and casualty policies to take no more than 90 days from the effective date of the policy to make any underwriting investigation other than review of the initial application and to bill the insured for proper rating and classification”.

“The insurer shall not deny a claim based on underwriting a risk after the effective date of the policy and the presentment of a claim,” according to the bill text, and “an insurer shall not bill for any additional premium after the renewal quotation is made (for any condition which existed at the time of renewal).

The measure also requires Causey to adopt permanent rules that match the bill’s language, and the law would sunset once those rules are adopted.

House Bill 202, introduced by Rep. Ben Moss, Jr., (R-Moore), would create a grant program to allow schools to connect high school students with local businesses to develop skills and contacts for future jobs.

The High School to Work Grant Program would begin in the 2023-2024 school year, with the funds used to facilitate summer apprenticeships, internships, job shadowing experiences, and other opportunities for high school students to procure employment in needed trade fields and careers around the state.

House Bill 64, introduced on Feb. 8 by Rep. Kidwell with backing of five other GOP members, would charge a four percent tax on international wire transfers.

N.C. Tribune reports the proposal targets a service some groups see as a major channel for remittances from U.S.-based immigrants, legal and otherwise, to families overseas.

Oklahoma is currently the only other state that charges a similar fee.

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