The original legislation passed last year prohibits transgender people from using public bathrooms corresponding to their gender identity, and sparked a huge political and financial backlash.
The proposed reversal — which will be debated and voted on Thursday — has incensed gay-rights activists, who want nothing short of an unconditional repeal of the divisive House Bill 2.
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This is because the new plan would not cancel out the legislation entirely but replace it with a new law. The new framework would give the state final say over multi-stall restrooms and ensure "women and girls should not have to share bathrooms with men," according to its backers.
Unimpressed, activists alleged the proposal was "simply another version" of the old law, and was merely an attempt by officials to stop the financial hemorrhage sparked by its passing.
An Associated Press analysis this week found that the law will cost North Carolina more than $3.76 billion in lost business over the next 12 years. Numerous businesses, as well as music and sporting events, have spurned the state amid the furor.
@ HRCAny NC lawmaker who supports this bad # HB2"deal" is no ally of LGBTQ people & will have planted themselves on the wrong side of history.
@ ChadHGriffinIf passed this proposal will box LGBTQ people out of local nondiscrimination protections in a state without statewide protections. No deal.
The new proposal was reached by North Carolina House Speaker Tim Moore, state Senate leader Phil Berger and Democratic Gov. Roy Cooper, the latter of whom ran successfully last fall on a platform to repeal the bill.
"Compromise requires give and take from all sides and we are pleased this proposal fully protects bathroom safety and privacy," Berger and Moore said in a joint statement.
Gov. Cooper added: "It's not a perfect deal, but it repeals House Bill 2 and begins to repair our reputation."
Moore and Berger made the announcement after several hours of private meetings among lawmakers, according to the AP, with the two shuttling between their offices. GOP lawmakers and Gov. Cooper have been grappling for months over how to resolve the issue.
Their proposed legislation would have several effects: repeal House Bill 2; leave state legislators in charge of policy over multi-stall restrooms; and put a temporary halt on local governments passing nondiscrimination ordinances until 2020, something they said would allow time for ongoing court cases about transgender issues to play out.
It was one of those ordinances (a law passed by a municipal government) that prompted North Carolina's Republican-controlled legislature to pass House Bill 2 in the first place. Lawmakers said they wanted to stop an ordinance passed in the city of Charlotte allowing transgender people to use the bathroom corresponding to their gender identity.
As well as prohibiting this, House Bill 2 also stopped any other municipal governments from passing nondiscrimination ordinances.
Its backers said the bill would put women and children at risk from male sexual offenders who could enter their restrooms. Former Gov. Pat McCrory, who Cooper defeated last fall, urged legislators to stick with the existing legislation.
@ PatMcCroryNCI urge # NCGA& @ NC_Governorto finally stick with this deal that still respects privacy and let Supreme Court resolve issue for our nation.
But despite this support from conservatives who still want House Bill 2 to remain in place, the backlash was been huge — both ideologically and financially.
Mara Keisling, executive director of the National Center for Transgender Equality, called the North Carolina General Assembly "a national disgrace" in a statement to NBC Out in December.
"This harmful and discriminatory law has been a disaster for North Carolina, damaging both our economy and reputation on the national stage," added Cecil Brockman, an openly LGBTQ lawmaker in North Carolina's legislature.
The financial hits have ranged from scuttled plans for a PayPal facility, which would have added an estimated $2.66 billion to the state's economy, to a canceled Ringo Starr concert, depriving a town's amphitheater of about $33,000 in revenue.
The National Collegiate Athletic Association, or NCAA, indicated the state won't be considered for any championship events between 2018 to 2022 unless it changes the law. And the National Basketball Association,the NBA, pulled the 2017 All-Star game out of Charlotte.