NC House passes major insurance, credit union bills, plus new shark-fishing rules

The North Carolina House passed major business reform bills Thursday, answering separate pushes for more flexibility from the state’s credit union industry and the state’s largest insurer, Blue Cross Blue Shield of North Carolina.

The House also passed a bill to overhaul the process for deciding what children learn in North Carolina’s public schools, a controversial measure that cleared the chamber on a busy day for lawmakers.

The state legislature hits “crossover” on May 4, a quasi-deadline for bills to pass at least one chamber of the General Assembly. There are ways around that deadline, and it doesn’t apply to bills that deal with money, but it’s an important viability marker for policy proposals, and its approach quickens the pace of this legislative session.

In addition to bills rolling back credit union and insurance regulations, the House churned through proposals dealing with milk, shark fishing, rental rules and a process that could be used for a long-shot convention to amend the U.S. Constitution. All these measures would have to pass the state Senate as well to become law, something that will play out over the next few months.

Among the most closely watched Thursday:

Blue Cross Blue Shield NC reorganization. House Bill 346 is one of the session's most heavily lobbied bills. Blue Cross wants to reorganize under a new holding company under this legislation, which would give the company new freedom to buy companies and make investments without approvals required now from the state’s insurance commissioner. The company says it needs the flexibility to compete with other large insurance companies around the country that don’t need such approvals.

Insurance Commissioner Mike Causey, an elected Republican, opposes the bill, saying he fears it would let Blue Cross shift assets without accountability, avoiding state and federal laws that trigger policyholder rebates if the company makes too much money.

Key leaders from both parties support the measure, and it passed the House Thursday 86-26. It will likely fare well in the Senate, too. A companion measure there has 36 sponsors, out of 50 total senators, and Republican Senate leader Phil Berger, R-Rockingham, has said he supports it.

Blue Cross is a major campaign donor for state lawmakers, and its political action committee gave legislative campaigns nearly $260,000 last year, according to State Board of Elections records.

Several lawmakers expressed concerns Thursday that the complex bill moved too quickly through the House, and with too little public discussion. Rep. Abe Jones, D-Wake, said just before the vote that he didn’t fully understand the measure.

“And I dare say I’m not the only person in this room who’s in that position,” he said. “So I would urge you to vote no.”

Blue Cross said in a statement that the bill "maintains a strong and solvent insurance company, and maintains appropriate transparency and oversight by state regulators."

Credit union regulations. The other major industry bill that moved Thursday is House Bill 410, which rewrite’s the state’s credit union regulations, allowing them to expand. Current law limits their membership to certain sets of people. The State Employees’ Credit Union, for example, largely serves state employees.

This bill would also let credit unions sign up customers who fall below the federal poverty line, plus anyone who lives in an area without a traditional bank branch within an eight-mile radius of the local population center. Credit Unions say this is needed to fill gaps left by bank branch closures in rural areas. Banks see credit unions, which as non-profits have tax advantages, as unfair competitors.

The bill passed the House 85-25, another bipartisan vote with support and opposition from members of both parties. Berger said the Senate Republican majority hasn’t discussed this bill at length, but he indicated it might be difficult for the bill to move forward if the issue remains so divisive.

“If we continue to have concerns expressed by the banking industry … we will probably suggest that the banks and the credit unions get together and see if they can come to some agreement,” Berger said.

K-12 curriculum changes. The education bill that cleared the House deals with the state’s standard course of study in K-12 schools. House Bill 756 would create a new commission to recommend these curriculum changes, with six members each appointed by House and Senate leadership. A late amendment Thursday added another six members to the commission who would be appointed by the governor.

Right now the course of study is decided by the State Board of Education, which is largely appointed by the governor. This bill says the commission would submit recommendations to the State Board, which could only vote them up or down without changes. If the State Board votes them down twice it could adopt its own course of study, but that would be subject to changes from the General Assembly.

State Rep. Julie Von Haefen, D-Wake and a former president of the Wake County PTA, said the bill “fundamentally changes how we will establish the standard course of study” Rep. John Torbett, R-Gaston and the bill sponsor, said the new process would provide “a wider, more balanced spread on the standard” including “what industry is looking for in our kids … so they, too, could be good wager earners, or artists.”

This bill — except for the part providing appointments from the governor — is also included in the House budget, meaning it will be part of that broader debate. The Senate is crafting its budget now. Berger said Thursday that Senate Republicans don’t yet have a consensus position on the proposal.

Other bills

Other bills that cleared the House Thursday, and are also headed to the state Senate for more debate, include:

Pharmacy industry reforms. House Bill 246 would regulate pharmacy benefit managers, which large insurance companies use to negotiate drug prices. The issue has become an annual fight between insurance companies and independent pharmacies, and the House passed this bill 113-1 Thursday. The Senate has declined to back these changes in the past, signaling an uphill battle for the measure going forward.

Landlord/tenant rules. House Bill 551 tweaks a number of rental laws, but a section on service animals seemed to cause the most disagreement. The bill says landlords couldn’t charge nonrefundable fees for service animals, as they can for regular pets. But it also says landlords can challenge a tenant’s need for a service animal living by requiring written verification from a health professional that they have a disability. The bill would also enable landlords to recover attorneys fees more often in an eviction case. Disability Rights North Carolina, as well as the N.C. Justice Center, a progressive advocacy group, oppose the bill, which cleared the House on a bipartisan 87-26 vote.

Shark Fishing. House Bill 544 would make it illegal to hold shark fishing tournaments on the shores of Carolina Beach, Caswell Beach, Holden Beach, Kure Beach, Oak Island, Ocean Isle Beach, Sunset Beach, or Bald Head Island from May 1 to Oct. 31 every year. The local governments involved requested the moratorium during their peak tourism seasons, and the bill passed 113-0.

Constitutional convention. House Bill 648 lays out the process that would be used to pick delegates to a potential convention to amend the U.S. Constitution, something the House called for earlier this year in a pair of other measures. Thirty-four states would have to call for such a convention for it to be held. If that happens, this bill says North Carolina’s delegation would have three members chosen by the state Senate, three by the House of Representatives and one that leaders from the two chambers agree on. The measure passed 64-50, with most Democrats and seven Republicans voting against.

Dairy industry assessment. House Bill 377 allows North Carolina dairies to collect, from themselves, up to 5 cents for every 100 pounds of milk produced to fund a new association to promote the industry. It passed the House 114-0.