On Wednesday, the NC Senate and NC House of Representatives formally opened the 2023 legislative session by swearing in newly-elected members, choosing leaders for each chamber, and adopting rules for the session. While the session’s opening day was largely ceremonial, the details of the House and Senate Rules could have implications for nonprofits advocating on state legislation in 2023 and 2024:

• Senate Rules: The Senate unanimously passed its permanent rules for the session yesterday. Nonprofits interested in having bills filed in the Senate should note that the bill filing deadline for public bills (i.e., those that apply to the entire state or in at least 15 counties) is Tuesday, April 4, and Senators must submit their proposals for public bills to legislative staff no later than Thursday, March 9. For local bills (i.e., those affecting fewer than 15 counties), the bill filing deadline is Thursday, March 9, and Senators need to submit their proposals to legislative staff by Thursday, February 23. Senators can file an unlimited number of bills. 
• House Rules: The House adopted temporary rules yesterday in a party-line vote. The House will vote on permanent rules next month. House Democrats expressed concerns that the temporary rules could make it easier for the House to override Governor Roy Cooper’s vetoes this session since one provision in the rules allows House leadership to call veto override votes without providing notice to House members or the public. Nonprofits interested in having bills filed in the House should note that the bill filing deadline for most House bills is Tuesday, April 18, and House members must submit their proposals for public bills to legislative staff no later than Wednesday, March 22. House bills that include appropriations or tax law changes must be filed by Tuesday, April 25 and submitted to legislative staff by Wednesday, March 29. For local bills, the House bill filing deadline is Thursday, March 23, and House members need to submit their proposals to legislative staff by Wednesday, March 1. House members may only file 15 public bills during the 2023-24 legislative session.
• Crossover Deadline: The House and Senate agreed to set the session’s “crossover” deadline at May 4, 2023. Officially, most legislation needs to pass at least one chamber prior to the crossover deadline to be eligible to become a law in 2023 or 2024. Legislation affecting state spending, taxes, election laws, and redrawing congressional or state legislative districts aren’t subject to the crossover deadline, and legislators – particularly those in leadership roles –often find creative ways of getting bills passed even if they didn’t meet the crossover deadline. Nonprofits advocating in the state legislature should anticipate hearing many “May the Fourth be with you” puns this spring!
• End of the Session: Unlike most states, North Carolina’s state constitution doesn’t provide for an end date to the legislative session or a maximum number of days that legislators may convene each year. That means it is nearly impossible to predict how long the state legislative session will last. Legislators will likely aspire to have a state budget in place by the start of the new fiscal year on July 1, but it will be challenging for the House, Senate, and Governor Cooper to come to agreement on the content of the budget by then. Typically, the General Assembly finishes its session within a couple of weeks of the state budget becoming law. Translation: legislative leaders will likely talk about their plans to wrap up the 2023 session in early July, but it’s quite possible that the session continues into late summer, fall, or even later. 

Legislators will return to Raleigh on January 25 to begin filing bills, having committee meetings, and voting on legislation.

As the 2023 NC legislative session gets underway, the Center is interested in finding out how well nonprofit leaders know the people who represent them in the NC General Assembly - and how well you'd like to know them. Please fill out this quick survey to let us know.

As a reader of these weekly Nonprofit Policy Updates, you are probably aware that the Center takes positions on – and lobbies on – state and federal public policy issues that affect most or all 501(c)(3) nonprofits in North Carolina. Last month, the Center’s Board of Directors approved the 2023 Public Policy Agenda for North Carolina’s Nonprofit Sector’s Nonprofit Sector, which describes the Center’s current positions on state and federal public policy issues affecting nonprofits. Many of the public policy solutions and challenges identified on the Center’s 2023 public policy agenda are included because of your input and the input of other nonprofits.

Now that the NC General Assembly has officially started its 2023-24 session, the Center is starting to talk with legislators about filing bills to help nonprofits operate more effectively in achieving their missions. As we have these conversations, the Center needs your input so that:

1. We can make the strongest possible case to legislators about the need for these nonprofit policy solutions; 
2. We can prioritize potential legislation that would be of the greatest benefit to nonprofits; and
3. We don’t overlook nonprofit policy solutions that are important to your nonprofit but aren’t (yet) part of the Center’s 2023 public policy agenda.

To help the Center be the strongest possible advocate for policy solutions that could help your nonprofit in 2023, please take five minutes to complete a brief survey about potential 2023 nonprofit sector legislation. Thank you if you have already provided input; the responses we received last week are already helping shape our initial conversations with legislators!

Over the next few months, the Center is hosting a series of Nonprofit Policy Conversations around the state to bring together nonprofit leaders and local elected officials (mostly state legislators) to discuss public policy issues that are important to charitable nonprofits and the people and communities they serve. At each of these Nonprofit Policy Conversations, the Center will provide a briefing on state legislative priorities for 2023, trends in the nonprofit sector, and potential public policy solutions and challenges for nonprofits in 2023 and beyond. The Nonprofit Policy Conversations also will include discussions about state and federal public policy issues of particular interest to local nonprofits. The Center is working with local partners to host upcoming events in Charlotte (January 17), Winston-Salem (January 20), Burlington (January 30), Wilmington (February 10), Concord (February 24), Fayetteville (TBD), and Raleigh (TBD). Registration is open for the Charlotte, Winston-Salem, Burlington, Wilmington, and Concord events; we’ll keep you updated as the other dates are finalized.

As you are probably already aware, the U.S. House of Representatives spent four days holding a series of 15 votes to elect Kevin McCarthy (R-CA) as Speaker of the House last week. To get enough votes to elect Speaker McCarthy, U.S. House Republican leadership agreed to several changes to the House rules that will make it difficult for the House to reach agreement with the Democratic-controlled Senate on any significant legislation. Specifically, it will be challenging for Congress to pass legislation in 2023 or 2024 to raise the federal debt ceiling (which needs to happen this August) or fund the federal government beyond September 30. The potential gridlock in Congress increases the prospects for a federal government shutdown later this year. A government shutdown can lead to payment delays to some nonprofits with federal grants and contracts and can force some North Carolinians who rely on the federal government for essential programs and services to have to turn to nonprofits to provide this assistance.

Next week, the NC Early Childhood Foundation (NCECF) is offering a free webinar on child care and economic recovery in North Carolina during the COVID-19 pandemic. The webinar, which will be held on Thursday, January 19 from 11 a.m.-12:30 p.m., follows up on a recent NCFEF report highlighting the link between child care availability and the state’s economy. The webinar will feature insights from the report researcher, real-world perspective from community stakeholders, and potential policy solutions from state legislators.

The NCFEF webinar and the report are particularly relevant to nonprofit organizations because a national study of the nonprofit workforce shortage has identified lack of access to affordable, high-quality child care as one of the main reasons that nonprofits have struggled to maintain full staffing levels over the past two years. Policymakers at the federal, state, and local levels can all help come up with solutions to alleviate the state’s child care crisis, and the Center will keep you posted when there are opportunities for your nonprofit to take action.

Register now for next Thursday’s webinar.

Last week, the Federal Trade Commission (FTC) published a proposal rule that would prohibit employers – including nonprofits – from requiring that employees, contractors, or volunteers sign non-compete agreements in order to provide paid or unpaid work. Non-compete agreements are contractual provisions that prevent workers or volunteers from seeking or accepting certain types of employment after the end of their time working for a business or nonprofit. The FTC’s proposed rule also would require existing non-compete agreements or provisions to be rescinded within 180 days of the enactment of a final rule. Under the proposed rule, nonprofits and businesses could still impose other types of contractual restrictions on workers, including confidentiality and non-disclosure provisions as long as these restrictions don’t have the practical effect of preventing workers from seeking or accepting other employment. 

For nonprofits interested in providing feedback to the FTC, the proposed rule is open for public comment through March 10. To help you get started, check out the National Council of Nonprofits’ tips for nonprofits filing public comments. 

Nonprofits that were registered as lobbyist principals in 2022 (and their staff or contractors who were registered as lobbyists) must file their final quarterly reports with the Secretary of State Lobbying Compliance Division by January 24. Lobbyist principals need to use the special fourth quarter expense reports (available online) that include the cumulative total payments to lobbyists for the year. To help you understand the basics of state lobbying laws affecting nonprofits, check out the Center's summary of NC lobbying laws for nonprofits. 

Also, the NC Secretary of State has opened lobbying registration for 2023. Lobbyist principals (i.e. nonprofits that lobby) and lobbyists (i.e. nonprofit employees and contractors who lobby on behalf of nonprofits) must register annually with the Secretary of State. Lobbyists and lobbyist principals must register within a day after they begin lobbying.

The U.S. Department of Labor (DOL) recently announced that it now plans to release new proposed regulations on the salary threshold under the Fair Labor Standards Act (FLSA) this May. Currently, FLSA requires employers, including nonprofits, to pay their employees at least $7.25 per hour and to pay employees one-and-one-half times their regular rate of pay when they work more than 40 hours in a workweek. Employees are exempt from the FLSA overtime pay requirement if they:

1. Are paid on a salary basis (meaning they are paid the same amount each week regardless of how many hours they actually work);
2. Are paid at least $684 per week ($35,568 per year); and
3. Exercise job duties that are classified as administrative, executive, or professional.

In 2016, near the end of the Obama administration, DOL attempted to raise the salary threshold for exemption from overtime pay to $47,476 per year. Ultimately, federal courts stopped the implementation of the Obama-era overtime rule, and the Trump administration elected to use a lower salary threshold (the current level of $35,568) for exemption from overtime pay. It is likely that the forthcoming DOL regulations will set a salary threshold closer to that of the 2016 proposal. DOL also could make changes to the duties tests for administrative, executive, and professional employees.

It is important for nonprofits to review their employees’ job descriptions regularly to see whether they meet the criteria for one of these three duties tests. Unfortunately for nonprofits, the DOL guidance on the three duties tests often focuses on typical for-profit positions and doesn’t provide analysis of nonprofit positions (e.g., the guidance isn’t clear on whether certain fundraising/development jobs or volunteer management positions meet one of the duties tests). The new regulations also could provide a chance for DOL to fix this issue and provide clearer guidance for nonprofits.

The Center provides Nonprofit Policy Update each week as a benefit to its nonprofit members. However, to help all North Carolina nonprofits respond to the COVID-19 pandemic, we're temporarily providing this newsletter to non-member nonprofits. Become a member to ensure you continue receiving these updates along with many other valuable benefits.