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Senate | August 10, 2015 | Chamber | Senate Session, Part Two

Full MP3 Audio File

The Senate will come to order, Sergeant at Arms will close the doors, members will go to their seats, members and guests at the gallery will please silence all their electronic devices. Leading the Senate in prayer tonight is Doctor Deon Clerk of the power to become ministry in Rainford North Carolina. Doctor Clerk is the wife of Senator Clerk. All members and guests in the gallery will please stand. Let u pray. Father in the name of Jesus, Lord thank you for this day that we had not yet seen before, and we thank you for the nobleness of this purpose for the 50 women and men on whom you place the calling to lead your people and the state in a way that is right, and just, and good. Never let the members of this body forget that calling Lord rather give them the strength, the courage, and the kindness to serve the people. Let them reason together as brothers and sisters, secure in the knowledge that a good persons steps are ordered by you. Lord help them to remember the poor and the rich, the feeble and the strong, the elderly and the young help them to consider the needs of the many as well as the needs of the few, give them clarity in decision making and humility in the face of power, and Lord protect each member and each members family from any who might seek to do them harm, shelter them Lord just as You have shelter leaders in times past, and Lord we pray a special prayer for one called Philip Burger Senior for we know that you placed both a unique burden and a unique blessing on those charged with the task of leadership. Lord, we thank you for your unending kindness both to this nation and to this state. We make all these petitions in the name that is above every name, amen. Senator Berger is recognized for a motion.  Hi, Mr president the journal for Thursday August 6, 2015 has been examined and found to be correct. I move that we dispense with the reading of the journal and that it stands approved as it is written. Senators please come order Without objection the journal for August 6 stand approved as written. Leaves of absences or granted for senators Cook, Hartsell and Smith Ingram we have our nurse of the day, our nurse is [xx] from [xx] North Carolina [xx] would you please stand to be recognized. Welcome to the senate. we're going to let the record reflect senator Hartsell is in the chamber Mr president Senator Apodaca what purpose do you rise? Motion Mr president please you're go ahead. Thank you Mr. President, members, Senate Bill 199 funds for the deposit with the clerk of court scheduled with second tonight move that it placed at the top of the calendar? Without objection so ordered. Thank you Mr. President house bill 512 amend clarify backup PSAP requirements is on tonight's calendar move that it be placed on the calendar in the second position Without objection so ordered. Thank you Mr. President, Mr. President I move the rule be suspended in the end house bill 372, 2015 medicaid modernization as being reported in tonight that it be brought before us for immediate consideration or at the end of the calendar Was that for at the end of the calendar? Yes Sir. Without objection so ordered. Mr. President, move the rolls be suspended and House Bill 117, NC Competes Act which will be read in if it already hasn't, be placed on the end of today's calendar. Without objection so ordered. Ratification of bills.

Enrolled Bills: The Enrolling Clerk reports the following bills duly ratified for presentation to the Governor: SENATE BILL 581, AN ACT TO DIRECT THE DEPARTMENT OF TRANSPORTATION TO STUDY THE process for accepting subdivision streets dedicated as publican states highway systems for maintenance and to amend the potential needed, to approve traffic devices in certain sub division, house bill 308, an act to amend the law pertaining to the medical support in health insurance coverage, relating to child support to a land state laws a federal guide lines are no longer include provision and employer provide a group health insurance is automatically considered reasonable, and to modify the long term care advancement program to confirm with federal guidelines, house bill 371 and I create a civil claim for re leaf or damages sustained as a result of terrorist acts amending law related to members of the North Carolina national guard carrying consumer weapons and to permit their rules review commission through a [xx] certain circumstances. We are moving to the calendar. First bill is senate bill 99 for concurrence with the house committee substitute, Senator Randleman. Thank you Mr. President.  Let's get the bill read in first mum. Thank you My bad. Senate bill 199 funds deposit the clerk will record. Senator Randleman.     Thank you. Members, this is the same bill that we had back in April of this year, when the bill was heard in the house, they had discussions, they decided rather than to increase the limit to 5, 000 that they would increase to 10, 000, which would be the amount that the courts would have to invest. When I heard of this proposal, I talked with the financial management division of the administrative office at the courts, I talked to the court of courts conference, for all in agreement with the $10, 000 amount in that I'd ask for your support. So this will vote yes on compliance. Further discussion, further debate? Seeing none we will vote on Senate Bill 199 on the house committee substitute to concur, the bill sponsor recommends that you vote yes to concur. We will take the vote, five seconds will be allowed to vote all those in affirmative will vote yes, and all oppose may vote no. The clerk will open the vote. 47 having voted aye and zero voting no, senator [xx] votes aye, the senate concurs and senate bill 199, the bill will be enrolled and sent to the governor. house bill 512, concurrence, the clerk will read. House bill 512, amend, clarify backup PSAP requirements. Senator Hayes is recognized to explain the concurrence book. Thank you Mr. President and members of the senate and thank you senator Pate for your work on this bill and others that's coming forward. The conference report that you have in front of you, when this bill was in senate judiciary, they added a provision in there that would prohibit the double taxation of city residents for 911 dispatches, the house members seem to have coronary about protecting tax payers and so in an effort to remove this bill forward and some important things for 911 system, we have removed that provision and we ask for your support in this conference report going forward. further discussion further debate. Hearing none although that the recommendation from the senator Harry is that we do confirm the committee substitute conference committee. All those in favor will vote aye or oppose will vote will vote no seconds to be allowed to vote clerk will open the machine.

Senator Tacker, votes aye, 48 voting aye and non in the they have the senate concurs with the conference committee recommendation, the house will be notified. senate bill 607, second reading, the clerk will read, senate bill 607, Act pay bill of rights, senator Wayden is recognized to come in on the bill pardon me, Senator Jackson you're recognized. Thanks you Mr President, we favorites so that's okay, Members basically this bill 607, would ask the voters of this state, to amend the constitution by adding three provisions to that will strengthen the fiscal integrity the state and protect tax payers from government overreach, together these three positions represents an integrated and cohesive approach to physically responsibility that will ensure that future general assemblies spend sensibly, save wisely and tax sparingly, while retaining the flexibility to react to crisis and economic downtime. The three the provisions are as follows, it would lower the maximum possible income tax, rate in North Carolina from 10% to 5%, it is currently on our constitution. Second thing we will do is create a constitutional rainy day fund that can only be spent on emergencies by 2/3rd votes and the third thing we will do, we'll limit the growth of states expanding to the percentage change and the inflation and population growth, and it would be used all these on a three year average to make it work. And one of the concerns when we had this same committed last week there was no mechanism to deposit money into the Rainy Day Fund, so I have an amendment that I'm going to ask you to vote on tonight, and I'll go into the amendment in just a moment, but I can re vote on that amendment then should it be found favorable which I believe it will, the most things because it' s not a whole lot of policy changes in the amendment [xx] by the wave that I'm the last Senator to remove this bill from the [xx] calender and place it on the wall so that you all can have a chance to read over this bill in its entirety with the amendment as well so that we can discuss it at a later date so Mr. President at this time I would ask that we ascend forth an amendment. Senator Jackson is allowed to send forth his amendment. The clerk will read. I believe it's on everyone's dashboard.   Senator Jackson will rise to amend the bill Senator Jackson you are recognized to explain the amendment. Thank you Mr president what this amendment will do I know it looks like its a lot and it's sought but maybe has completely rewritten this whole bill but it really hasn't as far as the policy goes. What it has done though is that it has mandated an annual deposit into the emergency savings reserve equal to 2% of our per year appropriations until the fund balance is equal to 12.5% of the per year appropriations so basically what that is saying folks is that you will increase 2% on last years appropriated until I management cup of 12.5% , now to just sort of get you to put that in perspective, 12.5 % is 1/8 of our state's budget, if you take 100% that would last us about 45 days, so that will give us a rainy reserve of about 45 days which is around $ 2.7 billion. The second thing this thing would do, is actually would combine all three of the provisions on each lowering the maximum personal income tax from 10% to 5%, and of course the rainy day fund and limiting the growth that expanding to the percentage and change in inflation and population growth, into one constitutional amendment that would be on the ballot this, hopefully in March of 2016 or some time in 2016, for the voters to approve. I'll be happy to answer any questions that you might

have on this amendment, and I will I ask for your support, thank you.  Mr. President.  Senator Stein, for what purpose do you rise?  To see if the amendment sponsor would yield to a question. Senator Jackson do you yield? Yes Sir. Thank you Senator Jackson, I appreciate your putting the bill of tomorrow for further deliberation, my request to you is, since you are rewriting, an amendment, one of the three amendments, that will have real consequences to the state budget, basis, can you take this amendment off for tonight, and put it on with tomorrow so that we can, and it won't slow down the bill at all, but it will give us an opportunity to study exactly how many millions or hundreds of millions or billions are we talking about. I don't think amending the state constitution should be done on the fly and that the state as a whole would benefit if we just let it sleep with this for one night and study what it's consequence is.  Thank you. Senator Jackson, you may respond. Thank you Senator I appreciate your concern basically that I would love to have this amendment passed tonight and then you can have it as a whole and we can look at it and we can discuss it, debate it hopefully tomorrow or Wednesday at the latest maybe, but really discuss it then. I'd be glad to answer any questions if it comes to number you might have. 2% as of last year would be an approximate $420 million. Mr. President. Senator Stein, for what purpose do you rise? To speak on the amendment You have the floor. I have great respect for Senator Jackson but I have no respect for this process. I think that my request was utterly reasonable and frankly I'm disappointed in the response. I don't think we should be amending the constitution in a fundamental way on a provision that has never been debated anywhere to my knowledge before. It is disrespectful of the importance of that document. It's disrespectful to the people of North Carolina, and I don't know if it's a good idea or not, but I can tell you this I'm against it and I urge you all to as well. Mr. President. Senator Apodaca for what purpose do you rise? To speak to the amendment. You have the floor. I just heard the righteous indignation about a colleague on the back row he's going to have two days in which to study and vote on this bill starting tomorrow, so I think the process is more than fair and he's got all night to come up with all the reasons he's going to vote against it tomorrow and the next day, so I ask you to vote for the amendment. Mr. President. Senator Blue, for what purpose do you rise? Will Senator Jackson yield for a question? Yes senetor. Senator Jackson yields. Yes, sir. Senator Jackson, I was trying to pass through this amendment. You say the only major change is the one relating to the size of the rainy day fund, or this emergency fund? To respond Mr. President, yes Sir, Senator Blue has basically taken the 2% from last year's appropriations, and it is captured at 12.5% as well. Now the other thing that it does do, I mean, and I think I went through this and didn't apologize it combines all three of the ones we had originally felt about into one constitutional question on the ballot. Gentleman from another question. Senator Jackson you yield? Yes Sir. You've explained that I was busy trying to read, since this is the first time, and I apologize for you having to over it again, but having been one who played a role in creating the rainy day fund in the State in the first place when we first dated in the 90s. Let me ask you, are you aiming for a specific percentage of the budget based on recommendation of this financial groups that rate us whether it's the bonding of the status people of various groups or you're just picking an arbitrary number that we ought to have in this reserve account?  To respond. Senator Jackson.  Thank you Mr. President. is a great question and I appreciate that question very much. If it was up to me, we would have 30 or 40% in the [xx], so this was not a number that was paid. This is a number that I think we can get past. You know currently when you were here doing the rainy day fund that was done through a general statue which by the way to my knowledge is never actually been made up was eight percent and so 8% is basically 30 days revenue for the state and I really wanted 25% originally we'l have a talk on this [xx] so we have a higher percentage

which will give us 45 days of reserves that is being mandatory to fit in there, so that we can get to where we need to be should we have another economic downturn. And I would also like to say senator please this amendment and this bill when it's done will still allow the controller to move amendments back and forth as they have done in the past and this would have to be replaced.   [xx] questions Mr president You have the floor senator of Senator Jackson, Senator Jackson do you yield? Yes sir. Have you had a staff or have you run this particular product amendment by the raiding houses, so if there is some concern in as to how those houses that determine what our financing capabilities are as they determine how bonds are classified this step, has anyone checked within to get their assessment of this particular number since you say that it is not necessarily tapped  in any of the recommended ones. Senator Jackson, Thank you Mr president. Senator Brock to answer question, I have not personally spoken to anyone in the bond rating business, I don't know whether staff has or not. We have researched other states that have done provisions similar to this and we have seen some to have high as 20% we have seen some to have as low as 4-2% and so we just sought of trying to pick the medium number that we thought this body they could agree upon and they are body across the highway could agree upon this will and that way that voters of this state will they would be something set in the constitution that there will be set among should we have another economical or a natural disaster come forth. One final, final question, Mr. President, of Senator Jackson. Senator Jackson, do you yield?  I do. Yes sir.  Indeed you through this I was trying to read through it. What is this the process of getting here if you start trying to do it doing the recession having to pull over the next two three years. To respond Mr President, Senator Blue that's a great question as well, based on 2/3 of votes they would majority have the general assembly can go in and change this and not withstand feeding money into this account but it has to be done by 2/3 of our votes. Mr. President Senator Stern for what purpose do you rise? See if Senator Jackson yield for a question Senator Jackson do you yield? I yield under one condition Mr. President. He doesn't insult me, or I might insult him back. Without stipulation senator Senator Stan you are recognize to ask your question.   [xx] Senator Jackson to make that determination? You said something interesting the second time, I don't know if you said it the first time, I certainly didn't hear it if you did, you are changing the constitutional amendment in terms of the vote to the people, so that, instead of the people being able to vote on each of this three very distinct amendment separately, you are putting them all in one bucket, so that, if a citizen wants to conclude that having a rainy they find making a lot of sense but having the spending limitation makes no sense, because health care inflation [xx] goes much faster than regular inflation, or the population, the population growth over all, just doesn't make any sense to have spending cup or sales limiting the income tax taking 2 billion powers off the top of our budget might be included, as a voter you're denying them the right to choose the right they fun but not the other two. I'm I right in understanding that's what you are demanding the voters? Well, Mr. President to answer his question, I don't know that we are denying the voters anything Senator Stan, basically what we felt like this three went together, sort of like the goal, you know you needed more and I have the others to make it work well and that's the reason we put the three together to make it simpler for the voters, there is nothing to try and have't heard anything, you will not find to get something to pass it, normally would not ask. We just not like it would be simple to ask the voters one question and word that question so it didn't compromises all three of these players. Speak on the amendment. Senator Stan you are recognized you have the floor. Thank you. This is another reason why I'm going to be voting against the amendment, because there may be a reason why a voter wants to have a rainy day fund but they may think that its important to not state the economic interest to give the other two and I think its wrong to deny the voters that choice. Present discussions senator [xx] for what purpose will you rise.

  Speak on the amendment.   You have the floor.     I apologize on the Senator Jackson for bringing this forward it had fiscal responsibility to the budget process there were questions about what is required of counties? And why a number of 4.5 was pixed? And there's a mandatory requirement of a fund balance of 8% in the counties in North Carolina, and they're required to fulfill that obligation, what this amendment does along with the overall bill basically says there's going to be a mandatory savings reserve to handle any emergencies, whether be natural, or an economic problem. With the fact that 8% is required of counties mandated then 12.5 is really a fair number, because if you look at what the counties actually save all counties on an average have 27.43% fund balance, and counties over 100 or more have a 26%. Counties under the 25, 000 have a 30%, and what we're asking is 12.5% to be sure that if we do have another short further recession. Then very simply, we'll have moneys to be able to carry that, and not have to have the significant cut been done in the past when unfortunately as we experienced in 2011, we were stuck with a $2.7 billion deficit, and so what this does is it actually allows us to plan for the future, to protect the budget, give it some stability, and in doing so, it's done in a very systematic manner. I would hope that members would support this amendment, and then tomorrow we can discuss more about the different parts but this a prudent and financially sound way to budget for the State of North Carolina, and there was a comment, the rating agencies would be upset with this. I think I read the treasurer mention that. I did have an opportunity to speak with her this past Friday and discuss the fact that, what is worse in the fiscal integrity of the state of North Carolina? Is it having a savings reserve account that's mandated to handle the problems that could come? Or is it the fiscal irresponsibility of of having the $2.7 billion deficit?  What's worse for the financial strength of North Carolina? If you can't answer that question you surely don't need me to answer it for you. So, I would urge that we go ahead and pass this amendment, have a good discussion tomorrow and the day after, so we can go ahead and move this taxpayers protection act forward.  Mr president.  Senator Tillman for what purpose do you rise? Speak briefly on the bill.  You have the floor. I don't know if I heard this right or not, Senator Stein, so I'm going to ask you to correct me if I'm wrong. I believe I heard you just say that a spending cap makes no sense at all because inflation may run higher in healthcare, and for senior citizens and so forth. So, a spending cash makes no sense at all. I think that's what I heard, and I believe that's what the records will reflect. Well if you love spending folks, you don't want a spending cap. So I'd advice you to vote for Senator Stein. No. No. No. We don't believe in spending cap, let's just spend as we wish because you know you don't know who'll be in charge of the in- house in a few years down the road. This is one of the best things you can do to protect the tax payers' money. Vote forward the bill, the amendment. Further discussion, further debate. Hearing none, Senator Jackson from Mecklenburg, for what reasons do you rise? To ask a very polite question of Senator Jackson. Senator Jackson from Samson, do you yield? I will yield Mr. President. The gentleman yields. Thank you Sir, and it's a question about the two percent Senator Jackson, I just want to make sure I understand that this amendment if passed will require the starting in 2016 that we start setting aside 2% of the general fund each year until we reach 12.5%, is that correct? Those present will respond, Senator Jackson that is correctly said that it will be of the 2015 appropriated budget. Now the spending appropriated. Thank you May I speak to the amendment? Senator's recognized.  That amounts to a $400 million appropriation, next year somewhere in the bulk of $400 million. So, this amendment which we've spent less than half an hour on will spend $400 million starting next year, and then every year adding up

to roughly about what Senator Richards cited the deficit being when he came in here $2.6 billion dollars. So, this is a $2.6 billion appropriation bill and we're going to vote on it having spent less than half an hour addressing it. That is not prudent, that is not fair to the voters of this state. Senator Stein is absolutely right, none of the comments that we've heard tonight in support of this amendment justify rushing this through at light speed. If you truly care about fiscal discipline, you will not rush to spend a couple hundred, a couple billion dollars just because you would rather to do it tonight than tomorrow. This requires a [xx]. Mr president. Senator Jackson from Sampson.  Thank you sir.  What purpose do you rise? To speak on the amendment.  You have the floor.  Thank you Senator Jackson from Mecklenburg [xx] one with the hair and much better looking and certainly younger, and Senator Stein I could say the same thing about you you don't think this is fast moving and it has in some ways I guess you could say been there this bill has out there all over the weekend and no change and no amendment does not do a whole lot of things to it and senator Jackson you refer to it as spent 2% I refer to it my phylosophy would be they were saving the 2% which is 420 million if we used last years numbers, we can change that should we desire to do so with a 2/3 support and I believe that the reason this language is drafted in part the way it is, was to allow bipartisan support, I believe in that I think most of you know me and have to know that and senators senator Jackson if I was setting for you, I might be arguing the same way. But, this bill is going to be begin tomorrow to begin the next day there will be debate on it it's going to go across to the hall to our counterparts in the they are going to do the same thing. And then to me the final part which we have left out of all this argument this debate on the floor tonight, is that we are going to allow, God forbid, but we are going to allow that voter to make the decision. That voter out there in the country side. That poor, out logical that we sometimes then come to be, we're going to allow them the opportunity to make this decision for us. It wound be us that makes this decision, we are just giving them the pathway and the opportunity to do this, to allow those people that are paying the taxes, that are working everyday to make this decision. I would ask for your support thank you. Further discussion further debate, hearing none the question before the body is the adoption of amendment number one all in favor will vote aye all oppose will vote no, five seconds will be allowed for voting and the clerk will record the vote. 33 having voted in the affirmative and 15 in the negative the amendment number one is adopted. Senator [xx] Mr. President.   For what purpose do you rise? Motion please you may go ahead. Mr. President that moves senate bill 607 be removed from tonight's calendar and placed on tomorrow's. Without objection so ordered. public bill second reading House Bill 372 Medic Aid Transformation. House Bill 372 Medic Aid transformation HIE primary care fund.  Senator Hayes you

are recognized to explain the bill. Thank you Mr. President, members of the senate and thank you to Senator Tucker and Senator Payne here in the senate as well as many members that come together to reach this point on Medicaid reform and I feel today can be a very important step forward for this system. This bill will actually transition our Medicaid system finally from being a fee-for-service system to a capitated[sp?] system. a system that does no longer focus on how many X-rays or how many emergency room visits we can pay for, but allows us to actually manage the health of the individuals on Medicaid, and make sure that we're controlling spending in the state. Very quickly, we're also looking in controlling the growth rates in North Carolina so we would say 2% below the growth rate that's expected of the non-expansion states under the affordable care act. And we're looking to transition our Medicaid system to something that we as a legislature can be confident that when we pass a budget that is the amount of spend that we're going to have in Medicaid. We will maintain responsibility for population changes, but if it's a bad for seasonal or others, that's the responsibility of the managed entities. Few things I wanted to highlight on what are the differences between where we are in this bill and where we were in the budget. First of all we have aims the timeline for expanding, to the capitated entities. We have had a solid 2 year timeline, we have now changed that timeline to transitional system until 12 months after CMS approval. We expect about 6 months to write the process, 18 months for CMS to approve it and looks more like a 3 year time period now, but it is flexible depending on when CMS actually comes back with those approvals. We have also changed the date for ending the CCNC contract, we had set in that contract effective January 1st, within the current contract under this we've extended that out until May 1st, and those operations to allow some more transition time, to allow us to get better things to the individual providers, to be able to provide those, before they see the large rate increases coming in and take over the management of cases for their patients. On the governance side we have also eliminated what many of us saw before it as the independent board that would run Medicaid, in this bill we have instead created a Department of Medicaid that the Governor would appoint the Secretary, would still be exempt from the State Personnel Act, but that would be under the confirmation of the General Assembly. And for LME/MCOs, we had a two-year pass through for LME/MCOs, after discussion with the House we have extended that to the entire first contract. So, if you're looking at a five-year contract and three years before implementation, this would be an eight-year time period that we operate under our current LME/MCOs System before transitioning. And members, I'd be happy to answer any questions you have on this bill or on the Medicaid transformation. I'm very grateful for the support we've received to this point from so many individuals on both sides, and I would ask for your support tonight. Thank you. Further discussion, further debate? Senator Robinson, for what purpose do you rise? to ask the bill sponsor a couple of questions. Senator Hise do you yield?  I yield. Go ahead senator Robinson. Thank you and the summer ties we talked some about this in the committee and appreciate your listening to the questions and concerns, but another one concern is, in terms of going to a capitative system, with MCO's that might be out of state, and don't necessarily may understand or have a specific interest in the patient population maybe they do. What guarantee is there in here to make sure that some of the high risk populations like pregnant women we've discussed before, are that, they have safe guards. we've discussed that in our committee before, you know we have addressed that. What does this bill do and what do we

have in terms of safe guards for those high risk populations? [xx], given in this question, I think the risk is the same whether we're talking about the state wide manage carrier entities, the state wide provider land entities or the original provider land entities that are coming forward. Two things, first of all the requirements of services in the [xx] services that apply to individuals now under the state would now apply to the individuals under this system, so if we are required to receive those services then that right now applies to the capitated entity just as much as it applied to the state. The capitated entities that you'll find in here have a responsibility now for all of the appeals and others the appeal process, it is left at the current time but it would be through the Office of Administrative Hearings and Operations that we're going through, but the results of that are the responsibility of the decapitated entity. So if their determination is someone needs services, they will be required to pay for those services thus moving forward. It's initially how we started with the LME MCOs and leaving them under the system, we do realize as we went along we had to make some changes to that to reflect a capitated system and may have to continue to do so in the future, but operating that system right now seems to be outside the concept to perform. Follow up Mr. Chair. I yield. Senator Robinson, Senator Hise yields, you may go forward with your next question. OK Senator Hise, another concern here is you and I are familiar with the fact that sometimes our insurance companies, the larger insurance companies, have prior authorizing periods, delay authorizing a particular service which can delay either the service getting done, the payment, etcetera which is oftentimes traditional for the commercial insurers. Do we have have any safeguards or will we, and I see you'll have an oversight committee, will there be any provisions in there to protect the patient population to make sure that there are nurse services because of this regulations open time or procedure maybe thank you, there are several that are in here and the first I will say is you see we've also funded in the bill is HIE exchange for the first time all of the clinical information for medicated patients will now be held by the state, so all the services known that we provide we'll have data and access to all that information, the new wealth of the department and why we have seen it's so important to separate up the department and  a new skilled set of individuals is to monitor that data, to monitor that information and find both over and under utilization, if they're improperly denying services that are coming up will show as under utilization If they're paying for too many services they might not be financially [xx] for very long, and we as a department will have to protect against above. We have created now separate oversight committees for Medicaid that focus just on the Medicaid system while maintaining the oversight for the Department of Health and Human Services, but quite frankly under a capitated system, that becomes the role of the department and not trying to match things to federal funding codes as we currently have in our system. Just a final follow up, Mr. Chair. Senator Robinson you have the floor. The other concern, and we've mentioned it, I think you've heard is before years in our State, whether good or bad, we have had groups of providers that have been faithful to take on Medicaid patients, when nobody else has agreed to do it, and so the question here is based on this particular system and MCOs coming in to determine who's in that network or how would we ensure, or is there any insurance to make sure that these smaller providers, or even the federally qualified health centers or whoever have an opportunity to be in those networks. I think Senator Ford has an amendment that speaks that a little bit, but what I would say is CMS requires for each one of these entities for the areas they service, to be able to show network adequacy, they have to be able to show a number of providers in an area able to cover the population, whether that's a region that they're covering or Statewide. What you see kind of in that process, and gumming them. If they can't meet those, they can't provide services in the State. So they actually have to go out, and find providers now to make sure that the networks are adequate versus the current voluntary system we have, where we hope enough providers sign up in this process. You have also added in now

the concept of patients their choice, so if a patient feels like a particular network isn't sufficient in their areas and regions at the enrollment process, has the ability to choose any of the other plans, will those be state ward plans or regional plans that are available in there area and I think adding that type of competition help the individual level we will ensure that if this plans want to succeed they have to be willing to provide the services that individuals  who made  that choice will need further discussion, further debate, Senator Ford for what purpose to you rise?  To send forth an amendment. Gentleman may send forth his amendment, the clerk will read.  Senator Ford move to amend the bill. Senator Ford, would you recognize to explain the amendment. Thank you Mr President, ladies and gentlemen of the senate, this is a clarifying amendment that would clarify the language in the bill that would allow for small provider opportunity participation. I would appreciate your support senator Hise for what purpose do you rise? Thank you Mr. President the amendment you have before you and senator Ford showed me earlier today, just requires that this, well we said they can could use economic or quality standards to not contract with a particular provider this amendment simply says that they have to use the same economic and quality standards across all providers, without regards to those providers size and I think it's a good amendment, I would ask for your support. Further discussion, further debate hearing none the question before the body is amendment number 1 all in favor will vote aye, all opposed will vote no. 5 seconds would be allowed for voting, the bill sponsor recommends that you approve this amendment, the clerk will open the vote 48 have been voted in the affirmative, none in the negative, amendment one is adopted, further discussion further debate on the bill. Mr president.  Senator  Bryant for what purpose do you rise?  To ask senator Hise a question. Bryant Senator Heist you yield?  I will yield.   Senator Hise in other states that have gone to this [xx] and perhaps they have gone to a PLE model agreeing more about the NCO model, what has been the situation for federally qualified health centers in those models, have they been apart off the network have they not what's your experience for information on that.   Senator Bryant we are moving forward I think you often hear the state operate under some sought of manage care as partial services. I would say that the system that is proposed here is unique to the state of north Carolina. To put all services, all patients with the exception of all eligibles under one system that has a mixture of entities and providers of entities will be unique to the state of North Carolina, most entities for federally qualified health centers they provide services to the manage care entities in those states, some have lay down specific progress to keep them under people service motto, but we have tried to avoid any instances in this system to where cost can be squeezed or pushed to other areas to avoid the management entity being able will try to shift course and not be responsible for the other out space. Follow up. Follow up. The other experience I've read about in other states I was the MCO's is that they manage to meet decapitation goals, that sought of mirrors with the services as our Senator Robinson mentioned and you addressed this a little bit but and I understand we are going to have an exchange monitor under utilization over utilization but that sort of [xx] [xx] what is there to protect services that actually threaten people's health and lives when these companies engage in patterns of delaying services for creating barriers to service as a way to meet their calls goals and how we know that and how we address it at the best level.  I think the way you are looking

at right now how we medicaid system, [xx] you don't have enough providers for the medicaid systems, you have a lot you can try to get a [xx] to the Federal government at OAH to force them to bring out the providers, but all providers have to be paid the same, under our current system, they actually have flexibility as managed [xx] the change contract traits to be able to make sure they meet them again the unique part of this compared to what we currently have is competition, we are empowering medical recipients to be able to choose, which are the plans they would like to be under, and so if a particular plan is not meeting their need, they have multiple choices to move through, for every recipient in the state, to see who will meet their needs better, we have a responsibility and overside and the CMS will continue to overside that if you're denying someone services they are entitled to, they run the risk of not only losing their contract, but putting all the funding in the system at risk, that still continues from the current system to the risks that will be placed under but we actually have someone to hold accountable, there are many manage care organization out there, we are allowing three to come into this stage, if one of them fails, we have the option to bring in a new contractors. Same as true with PLEs if the fail the we have manage carry entities or new PLE's can be created in order to maintain our system one more question Mr president. Senator Brian you're recognized Senator Hise you yield? I yield. Under the affordable care act and the federal exchange primarily because we did not expand Medicaid but also because of poverty and lack of access to health care in the East, our health care costs are so much higher because our folks are so undeserved and in some respects, sicker or maybe in greater need of services. So what will we do under this model to make sure we don't run into the same problem under the ACA where providers do not want to come to the East because our costs are higher, populations poorer, ec cetera and I know they are coming to serve low income patients but even amongest their populations when the cost is higher, there may be a disincentive. Is there any way we'll make sure that our folks get fair access to services?    I think the best way you make sure  that is in the state wide plans if you want to cover state wides, I you want to make sure that you can have services in Charlotte and Mecklenberg in your state wide plan, you have to provide network adequancies see across the entire state, that's what's coming forward which means if those providers are not signing up with you plan, you're going to have to adjust your rates in those areas is to make sure that you have network adequacy and so if you want to access the profitable areas, you're going to have to be required to show network adequacy in other areas and state. further discussion, further debate, senator Van Duyn for what purpose do you rise? [xx] Hise a question. Senator Hise do you yield? I will. He yields. Thank you Senator Hise. In my part of the county all right my [xx] of the state. We have a small safety net providers and they currently take Medicaid patients and the uninsured if they don't get chosen given that my understanding is that whether we're talking on PLE or MCO these are close networks. If they are not chosen to be part of those networks and are left with only uninsured patients, they are bound to go out of business. Who is going to be left to take care of the uninsured patients? Two points I said as in was intended in the bill and in senator Ford clarification. There's only two reasons that they can deny the provider from being in the network. One would be economic. They wouldn't accept the rates that were offered to them while coming up but as these amendments states that will have to be the rates offered to everyone else in the state. So if they've shown network adequacy but they won't accept those rates. The second will be for quality standards. If they did not meet the quality standards that were set across the board for the plan for things like hospitalization and others, they could be turned down and not be a provider, if they don't meet one of those two criteria then they would be a contractar with all of the MCO and PLEs. Follow up. I yield He yields go ahead sir.  When one of the safety net providers they're given that there are all ready taking patience that are uninsured, will it be difficult for them to compete with other providers they don't take any charge so wouldn't it be

conceiverbly be very difficult for them to meet your first criteria? I think the ritual be offered that are sufficient to cover the course of the medicaid patience and doing [xx] doing surgery or other that are out there if they can manage that system to cover other free services for other people that are under medicaid then that might not be the the direction they choose to go but we will cover the cost of medicaid recipients and under this system all the medicaid recipients they will be adequately compensated for those services. One more follow up.  Senator Huges do you yield? I yield. Senator [xx] you have the floor.  So who covers the uninsured. The for uninsured individuals other than empower requires the hospital system to take all the individuals without the ability to pay that does not apply to primary care doctors or are other individuals are responsible for their own medical cost? Thank you Further discussion further debate Mr president Senator Block for what purpose do you rise? To see if Senator Heist would yield for a question. Senator Heist you yield? I yield. Thank you senator I've been trying to get that information form staff and this refers to section 3E with the reimbursement rates for the primary care physicians and part of that is try to help them see that because it is not worth while to see money wise to see the patients. Does this include nurse practitioners and physician assistants? I may have to follow on specific on that, this would require everyone who is build under the federal code for the primary care services currently will be bumped up to the same rate they would receive from medicare patients and I do believe that would include anyone in the primary care but I'll have followed to that.  Just speak to the bill briefly. Senator Block you may speak on the,  the reason I bring that because is and increasingly difficult to recruit people, recruit students to go in a healthcare. To become a doctor is very troublesome because when you talk to him, the amount of paper work you have to do and amount of work you have to do, that's outside of practicing medicine, is discouraging people we got in the medicine. And if you don't put a rate towards a reimburse at a fair rate especially those that may be position assistant or not practitioners will be even difficult to try to serve this under served areas. So I think it's a good step to try and get the rates right, to make sure that people can provide the services that are needed because if it's not, because of the amount of paper work and how difficult it is to go through this program, you are going to have fewer, we are at less access to healthcare and I mentioned it last year in the meeting about, former access to healthcare and full I personally know of a P. A that lost 600 time flops last year because of the amount of paper work that she had to do. The more and more regulation say we put on this the tougher it is to practice medicine is and actually   give good health care to these people. Further discussion further debate. Senator Robinson for what purpose do you rise? To ask the bill's sponsor a question. Senator Hise do you yield? I will yield. Thank you Senator Hise you've been generous with sharing information in your time with this, and you know my interests and in terms of making sure people get health care, earlier in discussion in committee, what I heard from you and the other co cheers was We can not expand Medic aid until we fix the system until we reform it and my assumption with this is we are the form, we are at the point of reforming and getting it where you think it will work. So the question is, if this plan goes into effect, we still have 500, 000 people out there without care which are going to pounce on hospitals etcetera,  etcetera,    and we'll continue to be the uninsured which really etcetera, decreases quality of health care overall in terms of payment, so how much time do you predict is going to take us once this is proved to expand medicate to air these people in?

 Thank you, I think the changes that might come toward the Medicaid population is in the future, depends on how the federal government changes the system that they are offering. 50% of the administrative costs first two years and then they decline it up until 2020 in which they're paying in only 90% in that point and then No statement. So, without further action congress that would drop to a two to one match for those services coming in. I don't think anyone looks at our budget and in growth in others and says that's the direction we want to take funds out of education and others in order to expand more services to Medicaid, to able body working individuals which is what the extension population needs, and so if there are changes in the direction that this administration is offering or in future administrations, I will be very willing and I think most of us will to evaluate what their putting forward in the system, what's being offered under the Affordable Health Care Act remains till this day a bad offer for the State of North Carolina. A follow up Mr. Chair. I will yield. Senator Hise yields. Okay.  Senator Hise you begin to really sound like a politician. To my question directly Senator Hise, we know we could have set up our own exchange or the federal government would do it so we know that and we know how many people and we know the formula in terms of what it reimburses in declining years, but I'm saying that at some point we have to care of these people, we have to take care of our people, they're our people and we have to take care of them. So what do you project, when do you project, how many years, how many whatever before we either take care of them ourselves or accept the affordable care. I think there is a solution for how we've taken care of that, and it's quite frankly that we grow our economy in this state. We have 500, 000 able body working individuals that's by the definition that's worth coming in, they were being asked add to the medicaid system. I prefer a very different path. I prefer that we add them back into our work force and we add them to the fully in charge individuals that can forward in this state. It is a better solution for a hospital system, it is a better solution for our doctors, and quite frankly it is the best solution prior budget on this thing. Further discussion, further debate. Speak briefly on the bill. Senator Ford, for what purpose do you rise? To speak briefly on the bill Senator Floyd you have the floor. I was not going to speak and I am going to continue my commitment to my colleague to you senator Harrison supporting, this piece of but I cannot sit here and allow you to make the statement not once but twice that we have able bodied individuals who should be able to afford health insurance, the reality is it's that people can't in this state who get up and go to work everyday, who make minimum wage at a time that they pay for rent, food, and other reasonable living expenses there is nothing left we're talking about abled bodied people who get up and go to work everyday I would ask you for a little bit more compassion upon those people who get up who get up and go to work. Further discussion further debate? hearing none Mr president. Senator Mckkissick, for what purpose do you rise? To speak on the bill Have the floor I want to thank the cares who've worked diligently on this [xx] before us I honestly don't know whether the option we have before us tonight for consideration for reforming Medicaid is the best possible fix. I don't know if it will establish the type of parameters that are perhaps needed to provide a greater a predictability of what our medicaid spend would be, what I do know a fully capitated system should accomplish that. I also know that a high breed system allows one to evaluate, the best particularly manage care as well as looking provider led entities providing [xx]. So I view this as an open book, a book that is open for evaluation for consideration, but I likewise believe that we must look at medicaid expansion in the same lane. We need to look at all the options that are on the table, we need to understand the parameters that are

there, if there is one custom for North Carolina that requires a specific waiver that we need to look at that potential in doing so. I do not view this tonight as it was in favor of medicaid expansion or against medicaid expansion, I view it as gaining step, a forward step towards offering more predictability to our medicaid banquet. But more importantly looking at a solution that involves significant, provider led entities, and opportunity to come to this table as well as manage care organisations to really come up with the best possible way of doing so in an independent department that does not have an over paid, over compensated board, but which offers the autonomy to perhaps move things forward I do have significance concerns about the inextricable linkages between medicaid and all the other services, and then held to him in services and how you untangled that infurently[sp?] tangled world. How about his accomplished? No one's been able to tell me time how about we be done. [xx] with task ahead. They said off for opportunity. The answer is yes. Does that mean all the solutions to the past have been wrong? The answer is no, doesn't it mean that in [xx] has audible challenges based upon all the directives, all the details that have to be dealt with each and every year as well as a changing climate in Washington that inevitably impacts us. I think we all know that in the past that has been a unique challenge. So with that said, I'm willing to look at an option, but I'm also not willing to turn my back on the potential for using the same zest, the same energy, and trying to come up with a unique fix for North Carolina that will allow for Medicaid expansion. Further discussion, further debate? Hearing none, the question before the Senate is the passage of Senate Bill 372 as amended on its Second Reading. All in favor will vote Aye, all opposed will vote No. Five seconds will be allowed for voting, and the Clerk will record the vote. 38 having voted in the affirmative and 10 in the negative, senate bill 372 passes its second reading and will without objection be read a third time. North Carolina general assembly enact.  Further discussion I'm sorry mr president. Senator van Dem, for what purpose do you rise? I'd like to object to  third reading, Mr president Senator Apodaca for what purpose Objection she was too late standing up, you'd called for a third reading, we move forward. Hearing none, further discussion or debate. Mr. President. Senator Blue for what purpose do you rise? Would senator Apodaca yield for a question? Yes sir Senator Apodaca, I want to clear the calendar and get all of this stuff done just as bad as you do Okay But by the same token what harm will it do to give her time to prepare and amendment or whatever else she has in mind if we finish this bill 12 hours from now, [xx] 18 hours from now, rather than just showing courtesy to a fellow senator [xx] you come back to [xx] if you'd like. Chairman if I may have another question, One more Senator Apodaca,  I'm not trying to be [xx], I'd rather begin from 1201, but we also know that 50 of us are here and they displace certain courtesies toward each other, and I'm simply asking is there some compelling reason that you can't give her the benefit of 18 hours to do amendment of whatever out. The results are going to be the scene, if you decree that, that's where they don't want to be, but say all of the courtesy to the follow the senator.  Senator Blue, we all voted on the rule book okay, into abide by the senate rules. Now tonight senator Stan has complained about policy and procedure, Senator Jackson has

I just don't know if we need to start maybe following the rules in this chamber a little more, conduct in here denied has been a little over the wine but some senators and we're deliberate at [xx] body [xx] not the question not be adjourned. Mayor, so I think along those lines we need to act a little more several towards each other and respect each other a little more. That being said, if senator Van Duyn was late making her motion, Mr. President, feel free to go ahead and object the third reading and we'll deal with this again tomorrow.  Mr. President, if I could just bring another question of senator Apodaca.  Senator Apodaca do you yield to Senator Blue? S Enator, the only reason I raise a question is that she was trying to get the Chair's attention was not alone but she had been trying to get the Chair attention. That's fine. [ BLANK ] house bill 372 will remain on the calender. we haven't had time today to welcome our pagers but it's passed their bed time, so we are we are going to dismiss them now and we look forward to seeing you here tomorrow, and the rest of the week. Thank you pagers. Let's give them a hand now and will introduce to them tomorrow. Second reading roll-call, house bill 117, the Clerk will read. House bill [xx]. Senator Brown you are recognized to debate the bill. Thank you Mr. President, first I'd like to send forth an amendment. Gentleman will send forth his amendment, the Clerk will read. Senator Brown moves to amend the bill. Is the bill on everyone's dash board?  I think it is up now. It's a really this is a technical amendment that was requested by the department of revenue. What it does is two things, it gives us a specific time frame for the proceeds of the tax on aviation fuel to be transferred to the highway fund and the second piece just clarifies the effective date of the sales tax distribution piece, ask for your support. Further discussion or further debate on the amendment hearing none all in favor will vote aye all oppose will vote no, five seconds will be allowed for voting the clerk will record the vote. 45 having voted in the affirmative and one in the negative, the amendment is adopted. Senator Bryant you're, Mr President, I would like be recorded as having voted Aye. Senator Bryant votes Aye. Senator Lowe votes Aye. The total is 47 to 1.  Senator Brown you have the floor to discuss the Bill. Thank you Mr President, I don't think there's anybody that doesn't know anything about this bill it's been worked on I would say all session probably harder than any bill that we've probably taken up this entire session. I think the goal of this Bill was to try to make it a fair Bill, and there's not a lot of compromises with this Bill becausee it deals with [xx] in the state and also how sales tax is allocated across the state, and I think its so important because, as you know these two different items affect different counties in different ways, and I think that's why it was worked on so hard to try to find a compromise that I think I should be able to live with, and I think will benefit the state as a whole. I almost relate it to what we did transportation a couple of years ago. That was a major change in how we allocated dollars in transportation, it but as you know  it hurt some counties and helped a lot others, but it was the right thing to do for the state, and that's exactly what this bill is it's the right thing to do for the state, I'll briefly run through the bill and I will try and answer any questions, the first part of it part one deals with [xx] and it just increases

the count of years [xx] from 15 million to 20 million, we are not going extends the programme for three years, allowing JDIG commitments through January '19. The amount of business receives via JDIG will change in two ways. A personal income tax withholdings generated by the eligible created positions to a tiered maximum percentage of withholdings, 80% of withholdings if the project is in Tier 1 and 75% for all other areas, and the portion of the award directed to utility account in Tier 2 areas is changed from 15 to 10%. Job creation requirements would increase from 20 jobs to 50 jobs in Tier 3. The bill would create a component for recruitment of megasites or high yield projects where a business invests at least 750 million and creates at least 2, 000 jobs. When a high yield project is landed, the annual JDIG commitment cap for that year increases from 20 million to 35 million, and I think you may see a memo on this in a few minutes. the bill would address our concerns at commerce consume JD availability to quickly ease calendar year by splitting the single year 20 million dollar basis for commitment caps. If their are two equal some are annual installments of $10 million the amount not utilized in a period roll over to the next period. There are several miscellaneous changes that strengthen the bill one of those is strengthens the recapture provision for failure to maintain operations the grant term, provisions modifying the relevant time period and yes which increases in employment of measured and another that adds annual reporting requirements or strengthen of those requirements. Part two of the bill would modify the local [xx] of the one North Carolina fund to a tiered requirement three state dollars for one local dollar for tier one. Two state dollars for one local dollar for tier two and an even local march for 10th [xx] three. Part three of the bill which I think is one of the most important pieces facing single sale fatgar apportionment over a three year period that will line us with South Carolina and Georgia in particular and also Virginia Tennessee had version of this fees. Part for the bill deals with the a dollar cent with infrastructure and it would create an additional sale tax exemption for data center equipment and electricity. Section 5 or part 5 of the bill will exempt deviation gasoline and jet fuel and inter state air business for use in commercial aircraft, this exemption is bolder than the current refund provision and it should benefit all airlines and all airports, that is the change, also in that section we have a fees that will exempt from sale tax service contracts on a qualified aircraft or qualified jet engines that supervision that there was in Greans Bowing at particular and it deals with the Henegy jet who was a manufacture there for those airlines. Another key pissed of boats and aircraft and what is does is it changes or increases the rate to the general rate on the tax piece from 3% to 4.75 piece, it also increases the cap on sales tax for an aircraft to $2, 500. And the last piece deals with the distribution of sales tax. Back in 2007, the formula for sales tax was changed from 50/50 allocation to a 75/25% allocation. A 50/50 piece was in place for about 25 years and it was changed in '07, and that had a dramatic impact on rural North Carolina in particular. What this does is it changes back to the 50/50 apportionment that was in place for 25 years that was changed back in '07. It also gets rid of an adjustment factor that's been in place for many years, and I would say very much unfair if you look at the adjustment factor, you've got some counties that receive 80 cents on the dollar, you've got some counties that receive 49 cents on the dollar. and it's interesting when you start looking at the counties that will receive less than a dollar it's some of our poorest counties in the state but not necessary always because Wake county only gets 96 cent of the dollar, Guilford gets 94 cents, and Mecklenburg only get 89 cents on the dollar that's not fair to them either. This levels that playing field makes

it a dollar for dollar allocation which I think is a fair allocation. This should have been made or changed many years ago when the spring [xx] tax system was changed and put in place but for whatever reason, it wasn't changed. Again I think this is a air bill, it's a bill that addresses all of North Carolina, you saw the chart today that if you look at Jdeg dollars, when 1314, $257.4 million of those awards, went to three counties and that's okay, it benefited those counties, but this is a compromise to help those counties that never had a Jdeg award and probably never will. Again I think it's a good compromise, it's a bill we've worked all session and I'd ask or your support. Further discussion further debate. Hearing none Senator Apodaca for what purpose do you rise? Send forth an amendment.  Senator Apodaca you may forth your amendment, clerk will read. Apodaca moves to amend the bill. Senator Apodaca you're recognized to explain to explain the amendment. Thank you Mr. President and members, this amends the bill on page 1 line 32 about the leading $750 million and substituting $500 million and on page one line 33 by deleting 2000 and substituting 1750 Mr. President what this does it makes us even more competitive with the States in the South East when we get to the large projects, the high value projects, that we've heard so much about so this really [xx] to help us even more in competitiveness and I recommend it to you. Further discussion further debate on amendment two, hearing none the question before the Senate is the adoption of amendment two, all in favor will vote aye, all oppose will vote no. Five seconds will be allowed for voting and the clerk will record the vote. McKissick 47 having voted in the affirmative and none in the negative, amendment number two is adapted. Further discussion or debate on house bill 117 on its second reading. Senator Ford for what purpose do you rise? To speak, quickly on the bill. You have the floor. Thank you Mr. President. Ladies and gentlemen, senate, just briefly as relates to the redistribution of the sales tax. Mecklenburg County like a lot of other counties is already redistributing a portion of it's sales tax to the benefit of rural areas. It continues to contribute to the the account with a portion of all JDIGS awarded in the county. This additional cut to local budgets upset any other offsetting impacts will impact infrastructure and other citizen services and potentially result in a property tax increase. I contend and I have contended all along that the solution for rural North Carolina rests with the $445 million surplus. The solution to rural North Carolina is to use state funds. No one in this chamber that I've talked to personally or even today can tell me why we should not use state money to support rural North Carolina. Instead of taking monies from other areas that need that money as well. One of the other issues I want to bring to your attention is that there is this fact that Mecklenberg county and other large areas can support it because it's not that much money. The reality is that Charlotte and Meckleberg county has past $1.8 billion in bonds since 2007, this investment in our community was built on a financial model

which includes this current sales tax structure. Ladies and gentlemen, for that reason, I cannot and will not support a bill that would hurt the citizens of Mecklenberg county and put us in the position to raise our taxes. Further discussion, further debate. Senator Bull for what purpose do you rise? To debate the bill Senator has the floor. Thank you Mr. President, and to my colleagues I want to just set a couple of things straight. First I think that this bill does an excellent job in dealing with five out of six issues, and I want to say that publicly. I've been one who's been critical of our slowness in trying to address some of the economic capitation issues, and I think that the the approach taken to some of these are to be commended, whether it's JBEG, Aviation Fund and the various others the only part of this bill that I think any exception at all to is part six. Sales Tax, I'm going to tell you why. First place some of the 2007, the Windmill Sales Tax that had been put on 1982 or 83 which was the one that gave sales tax back to counties on a per capital basis as opposed to point of collection. That tax was chosen and taken off, because the counties had benefited the more counties and the poor counties in the state, were being over whelmed, with medicaid cost, and the state at that time required those counties to pay 1/3 of wherever the state was paying, on this medicaid match to the federal government. one county was paying 25% I think of their revenue, in their medicaid cost and there were at least 15 or 20 counties that were paying more than 10% of their tax collections, their budget for Medicaid exchanges. And so this General Assembly chose for the State to take over that responsibility from those rural counties, from those less prosperous counties. And the deal was worked out because the only way to save the major urban areas or to put them to some degree in parity was for the State to pick up certain costs in association with it, and so the deal was worked out pretty much at the urging of the small and rural counties so that they could get this Medicaid monkey off their back, and they benefited tremendously. It was not a deal where they gave something up and got back less than what they gave up, they got tremendously more from it, and they should have, the State should have been covering that. But let me raise three other issues and I have had this conversation indirectly with senator Rucho, what we are doing in shifting this revenues, is taking a bad aid approach to a much deeper problem, and all of you know it that problem is the sales tax is going to yield lesser and lesser funds over time fewer and fewer funds over time because we have failed to broaden the gift and services for which it applies. And so it is not going to generate the $ 85 million this [xx], to hold harmless the counties, all of those that are losing under this proposal list would go on and on, so we until we deal with that broader problem this is a temporally fix, but it's a temporally fix that doesn't really do anything, that's a number that say if we get $ 85 million this [xx], to hold harmless the counties, all of those that are losing under this proposal what Senator Brown talked about [xx] that if you take Wake county from 96 and 97 cents per dollar and you take them to the full dollar, that's making up what you are redistributing, so you take $ 85 million to hold all the counties harmless under this tax proposal and you won't have any losers. I want you to think about that. $85 million, and we tell them they have to spend that in education or education related stuff, it costs between $40 and $60 million to build a school in Wake county, high school, costs over $40 million to build an elementary school in this county. So you're taking $ 85 million to start addressing the capital education needs in the state and you're

dividing it among the 60 or 70 counties or more than 70 counties, that think that they are benefiting from this approach. Right now when we look at some of the streamlines internet sales tax proposals that we are constantly trying to get congress to adopt, when look at the fact that the sales of the major items are based on the point of delivery rather than the point of sale, refrigerator and other things like that, or even cars I guess, and we understand that the population in the state the one factor that we're basing this redistribution distribution on if the population in this state, the two places where it's absolutely exploding [xx] count and the county is immediately around them but not only is it exploiting with new people, people are moving from these counties as if we're shifting money too into these areas. So this stakes is very temporary and it still not going to provide the services that these counties deserve and especially the children in this counties deserve. So I think that we are believing in ourselves, if we think that giving an extra couple of hundred, paying for a hundred thousand dollars to these counties that need several million dollars to meet the education [xx] but we're somewhere rather fixing this problem. We need to come more and contact with reality. So I commend you for what you've done on the other potions of this bill, you have even convinced me that the single cells factor is something that that we generally needed to look at, but I would say you could have had all winners in this bill and no losers had you chosen to do it, and it's not too late you can still fix that aspect of it, but I suggest if it's only an $85 million fix so that nobody is gripping and groaning about what they are loosing there are much simpler ways to go about it and as I said earlier on, we stand more than ready to help you with that fix however you would be inappropriate other than creating users through shipping the sales tax.   [xx] Further debate, senator Apodaca fro what purpose do you rise? Will Senator Blake yield a question? Senator Blake do you yield? Absolutely. He yields. Senator Blake, I was here in 2007 I'm trying to remember what bill that change was put in can you recall?  I don't remember he specific bill I remember talking to representative from many of the  counties the medicaid cost to the county senator Apodaca rage from less than I think one, one and a half percent down in Mecklenburg as I said 25% of the budget in some of the small rural counties I don't remember bill numbers. Follow Mr president, I yield. Let me help you it was in the budget senator. I don't remember the budget bill number. It was, the other thing one that a good chance for the bigger counties to get them a little bigger piece of the pie at the expense of smaller counties having to burden with medicaid expenses? I don't see the connection to that. Follow up Mr president [xx] do you yield? Yeah well we've heard discussion about policy things in the budget and I was just wondering earlier in this session and I was just wondering in this case was this a policy issue aim towards small counties in order to get the medicaid off of them and give the larger counties a chance to get more of sales tax money I don't  It was not that it may have been in the budget but I got more influence on the budget now than I had in 2007 but if that is in reference one for you but the point I want to make is it is not part of a deal that the urban counties will get something special, they could live with medicaid payment that they were making and again, I think Wake county that was less than 2% of our budget but it was clear that Wayne county and some of the counties especially on North Eastern part of the state couldn't continue making this medicaid payments, it was basically making them stay moving down ahead, to meet their medicaid responsibilities, they couldn't build schools, the couldn't pay teachers and they couldn't do wild varieties of other things one last follow up for me.  Gentleman Oneal.  Thank you senator Blue, I thought you said earlier in the senate that you didn't have anything to do with that budget so we really wouldn't know what the thinking was of those folks who did the budget would we? In 2007 you're member

here, you know how the budget was done.  I'm sitting right here Yeah but where I'm sitting want to sit over but even seating over there I had as much impact on it as you do.  Okay thank you Mr president. Mr president.   Senator Hise get your microphone you have a question. Senator Hise do you speak to the bill.  Thank you Mr. President members of the senate representing a lot of the it's real areas in Western North Carolina, I think it's kind of interesting this weekend we went to get boys some clothes for school, Monday they start second grade, well in [xx] purposes in my home county, we had one option, we could have gone to the Wallmart now that's an advantage to many of my other counties that I represent, so in order to buy the schools clothes and school supplies and others we travel to Senator Vine's district and district senator Apodaca's district and by doing so, made sure none of the counties got none of the returns and my boy still go to school, in Metro county, and when we're not going to send another revenue for them to go to school in Metro county based on those sales. This is larger purchases and things we do in that manner, my residents in Madison county it's nearly all their purchases. Now Buncombe County came to the Madison County line in Weaverville, right off Interstate 26, build a Walmart and the Lowes residents in Madison county spend more revenue in Bankam county than they do in their own county because that's where it's built. They still go to school in Madison County, they still have a sheriff that protects them in Madison County, they still have the court system in Madison County all these fundings that are really based on the population we choose to do revenue based on the point of sale, and its a cycle. We continue to give the urban areas more, and more of the revenue so that they can build more and entice more individuals, and be more involved in economic development so that we can take the jobs too, and we can take more retail outlets. Do you want to see it played out, look at population growth in this state. You will find something that almost exactly mirrors the manner in which we currently send sales tax. We have areas in this state that aren't growing, that are declining in population. I can show you the heat maps, Western Carolina University Development. We're going to become an urban urge in this state, if we don't do something to change that direction. Now everybody wants to talk a lot about 2007. and yes, Will Counties would have given up anything to be able to take that medicaid burden off them. Something is the one of the chairs of the budget for Medicaid I understand greatly and that's why I understand arguments about why we don't need to expand the service but they would give a deal, we have to take more from you and other areas to give to our urban friends in order to give you some relief for this burden is placed upon me and now we come back 7, 8 years later and say boy look at what you got for what you gave up, counties would have collapsed in the state of North Carolina right now if they were still responsible for a third of medicaid. Mr. President. Senator [xx] for what purpose do you rise? Will senator Hise ask you a question? I will. Senator Hise I'm trying to figure out exactly what the rural of counties gave up to the urban counties in 2007 they weren't collecting money from the point of sales, sales cheques even though that was what they were left. What did they give up to urban areas? The change in the four million indicated that they went from 75% discretion based on the population to a flip to the other direction where the 75% now went the point of sale. Will the gentleman yield for one other question? Senator Hise to you yield?   Just one. Did you understand that threat they gave up? Everybody gave up everybody gave the house cent back to the state, everybody gave the half a penny back to the state. The urban areas and the rural areas so that the state would pick up for medicaid cost for everybody, and I'm trying to figure out what else did they give up other that house since which wasn't 5075 split, everybody gave up that extra half opinion. They gave up the funding

formula that provided the residents who traveled outside the county to make purchases to those areas, are no longer funding the local services. We set ourselves in into a direction, in which revenue continue to flow from this state, just as it does than employment now and others because I can show you the maths 2007 forward and look into we're seeing the growth of more individuals, even though they're living in rural areas, are having to do shopping and employment in urban areas, and paying for the additional gas taxes are moved back and forth. Counties are being hurt by this operation. This was a good deal when it was 100% population. This was an okay bill when it was 80/20. This bill is an absolute necessity now that it's moved to 50-50. This is not a fight I'd give up. After this process, we have to make sure that our rural areas are sustainable. We have no problems with employment up, population growth and others in urban areas. Wade County is sitting at nearly what economists call, full employment right now. We still have these that are in the double digits. We're trying to change a system, so that we can become one North Carolina, and I ask for your support for this important step. Further discussion, further debate. Senator Rucho for what purpose do you rise? Discuss the bill. Someone has the floor. At this late hour I'm not looking to prolong this, but I was very excited to hear Senator Blue talking about one of the solutions to this problem, and that is base expansion, and Senator Blue I and many other in the Senate on both sides of the aisle would believe that the best way to resolve this problem, and especially the $85 million you talked about under the 50-50 plan should be resolved very quickly with a base expansion that we proposed in our budget, and something that in reality has been recommended since 1950 when they said, we need to go basic expansion and broaden the sales tax base and so I hope that if we get anything out of this there will be some assistance for small counties and poor counties like fully support that effort has been done in the beginning, and it is may be not as much as one would hope, but the reality is move in the right direction and I hope that the money that is brought into those counties is used to allow for them to become competitive, when they have a chance to recruit jobs to come into their counties, so they indeed will be able to have employment sort on the rise. You know non of us regretted to that, we all recognized that we need 100 counties that are prosperous, but I think the most important part of it and so we take away today as effective that if we build that sales tax base, there will be an issue about not having sufficient resources that can be used across the state. It will give us an opportunity to to move to the direction that we've all been trying to do and I hope we can pass that at some point. Thank you. Further discussion further debate, senator Brown, for what purpose do you rise?  Senator bill, I just had to respond a little bit to that and understand, how tough this issue this for all of us, I really do. But I run the numbers to just give you a perspective of how big these numbers are for certain areas. In the eight years since it changed, since I was 7 till today, Meckelburg county, between the county and the city, he has picked up an additional 100 million dollars roughly, that's not the the exact number, but a $100 million more that they would have had under the old formula. $ 100 million and I just cant get the idea how little impact this will have on Mecklenberg county. First of all, Mecklenberg is about 10% of the population but they are getting 14% of the sales tax. I think that's an interesting number, because we are getting rid of one formula that allocates dollars out unfairly, but yet they get 14 cent of every 10 cent now.  So I'm not sure if that's real fair, but it is what it is but, let me find Mecklenburg County real quick and I'll tell you how quick it changes for them and how it compares to some other states. In this year's budget, Meckelburg county will receive about $216.6 million in sales tax revenue. By the year 2022 which is what? Six years from now, they'll pick up, they'll be at $261 million. So they'll grow 45 million dollars under my plan, under my plan from today in six years, they grow $45 million and look at the city of Charlotte today is about $110 million they'll

be at $133 million in those six years. That's pretty good growth I'd say I think most of our counties would be tickled to death with that kind of growth, I know I would. When you look at the number I think that those are pretty manageable numbers and Rake county has got similar growth. If you look at there numbers is very similar, something very manageable and what you got to remember is we all have to pay teachers and I mentioned that earlier today in teacher Sacco so I mentioned that earlier today, they're still eight counties in this state that pay zero teacher supplements, zero. They don't have money to pay a dime in teachers supplements, Mecklenburg county pays over $6000 in teachers supplements, Wake is almost the same, pretty close but you got eight counties that don't pay anything, can't pay anything you got [xx] county, near Mecklenburg county, pays less than a $1000 and yet they got to compete against Mecklenburg county for those good teachers, how tough is that pretty tough. We had stories that where some counties hadn't built schools in 40 in 40 years because they can't, can't run a bond referendum. I'm telling you guys this is a fair bill. When you look at the counties that are loosing just a small piece of their budget, Mecklenburg county is got close to $2 billion budget and we're talking about peanuts compared to their total budget not what we're asking to give. It really is compared to everybody else's budget And yet it's the biggest fight I have ever seen, and Senator Apodaca was right. You know in 07 we [xx] based up here in Raleigh. Wake county has got lobbyists, Mecklenburg has got lobbyists, there's about two or three other counties got lobbyists and they being running around here like things are going crazy and I got 95 of six counties [xx] a single lobbyist, and they can't even defend themselves.  Can't even defend themselves.  This lobbyists have been running around here Can't even defend themselves. represent this other counties I'd like the world's ending, are we getting all the money? [xx] part of this plan gives them so much of an advantage, these small counties don't get any of that money, no, I don't get a penny of it, we know that, transportation dollars every bit of it, how is it going now because when you form a change, it's going to Wake, Meck all big counties, it's all going there just give them something, that's what this bill does I mean, I have never seen anything like in my life up here. You know, it's got to be fair, this state all of us, not about a few, I'm just asking to give some of this something back, they need some help, take a visit that is somebody's county. Everybody should spend a little time and analyze some straight goals towards these counties. They really should, they come to the school districts and just take a look, and spend a little time seeing what they're having a day in their world and where those street kids go to school, everybody from a make and a wake and somebody counties need to go to those counties and take a look, I've got a change that you would have it in your county, then you go have it in your counties because you've got the money change it and they don't. Again is fairness, somebody got to be fair to these guys and help them and that's what this bill does, I'm just asking to help somebody's counties. And this is a small, small ask, for some of these small counties. Senator Davis from Green for what purpose do you rise?  To speak on the bill. The gentleman has the floor. Growing up, we had a thing in our household. If you were short of food and everybody was set the table everybody ate. As a matter of fact, the truth be known, and there were times because I remember growing up in Green County, myself working in the tobacco fields to the wee hours, and there were sometimes I came in and we would sit there and our grandmother made sure we ate even when she couldn't eat. Well I'm hating my friends seriously speaking, we need to think about North Carolina as a state, because the truth being known prior to 2007 so many people in Eastern North Carolina, have felt disconnected from the state,

and guess what the same feeling were there in 2007 and the same feeling were there today in 2015. This is real. There're people in this state who struggle, day to day hard working people, and we come up here and have all these debates, and all these discussions guess what, I'm not saying this to end all, we have to start somewhere, and we've consistently struggled no matter if it's the East, if it's the West, and they are one state just look at disparities, across every major institution and category, where there is education and yes, we're talking about the economy, unemployment. My friends, we are North Carolina. I don't care how you frame it. We hear these fancy slogans, two North Carolina's, the urban [xx] the vibe, the haves the have not's, you can call it whatever you want to call it, or we will sit here to address it. Senator Brown I stand with you tonight, thank you for what your doing, and I'm not even talking about that section by itself, but look at the rest of this bill, people are without jobs right now trying to figure out how they're going to get back the work. Who are the economic development package before us today? And we're all focused on that one little piece here, let's stand up tonight, and let the residents of North Carolina be proud of what we've done. I ask you I beg and plea for you to stand up tonight for North Carolina. Vote for North Carolina tonight thank you. Further discussion, further debate. Mr president. Senator McGinnis[sp?] for what purpose do you rise? Speak to the bill. The gentleman has the floor. Thank you Mr president. Ladies and gentlemen of the senate, I want to thank Senator Brown for bringing forth this very important piece of legislation at this point in time and I arise in the love of our state. I represent district 25 which many of you know Scotland Richmond answers Stanley in the posh of Rowan county, three of which ladies and gentlemen, are in the bottom 10% economically in this great state as my good friend Senator Davis just eluded to. No JDIG[sp?] money has ever been awarded in Scotland, Anson or Stanley county, none. One small  project in Richmond, and one small  project in Rowan. over 90% of that JDIG[sp?] money in the last 12 years spending Wake, Mecklenburg, and Durham I don't begrudge them I'm not here tonight to cast dispulsion on them God bless them for doing it but we've got to fix this deal so that rest of us can have that piece of the pie we can have that opportunity. Scotland county tax rate one dollar and three cents now I'm not talking about Scotland in Lairinburg, I'm talking about Scotland county, highest in the state. I forgot to tell you, that's plus an $85 household solid waste fee $3 million it's going to cost to close the landfill, 55 in town. Richmond County got the [xx] Senator Tillman the lowest average residential housing unit value North Carolina less than $75, 000 we got a lot of folks living at $20, 25, 30, 000 home they want to do better we need an opportunity, we need an injection of cash without another tax increase, add some clarity. Senator Hise already alluded to it. I give it to you again. What canl teach you something at 620 dollars a year and I look over at my good folks at Mecklenburg at 6500. How can I compete? How can we compete for a highly qualified teacher in the classroom? And they get $100 a week and get 25 miles off the road. Stanley County Highway goes through Stanley County. Hard to believe. Stanley County, North Carolina No Through Way Highway goes through AllWestimer[sp?] District and they got a lack of Broadband because it's in a donut hole. A broadband, the great equalizer. We need this money in real North Carolina.

Fifty-fifty is not what I wanted, I heard something different, something better but I'm willing to take fifty-fifty because I can take it that a piece of that law perhaps $200 or $300 thousand even on television, basically someone from Carteret[sp?] compared Carteret[sp?] to [xx] $4000/100000 is not going to help Bunson county, they can't build a school for that, they can't build a laboratory for that, I got news for you $400/500, 000 but on the local teacher's supplement to get it where we can qualify the competitive is a game changer. Ladies and gentleman it's time to level the playing field in rural North Carolina and bring it up to standards of urban North Carolina and have as my good friend alluded to one North Carolina, I urge you to vote deny politics on this bill. Further discussion, further debate Senator Ford for that purpose do you rise? Thank you Mr president, to speak a second time briefly on the bill.  The gentleman has the floor. I want to bring to this bodies attention that starting in 2011 this Body voted to redirect close to $200 million from the Golden Lee[sp?] Fund which is specifically designed for rural North Carolina. Somebody in here who is screaming and hollering needs to take some responsibility for that. $26 million that you eliminated from the rural center, I'm not opposed to helping out whole North Carolina, my heart and compassion goes toward helping anybody who needs help, my solution back here is that we have a surplus, no one in this chamber wants to address the issue that we are surplus and that which should use state revenue to support whole North Carolina, what say you? Mr. President. Senator Burke for what purpose do you rise?  speak to the bill,  Chairman has thee floor you know, Senator Flock, what say me, I 'll say we spend a lot more money in the Rural Infrastructure Authority than what's ever spent by a real center.  Let's not go through all the political damage that was done throughout the organisation. We don't need that North Caroline we want to put money into the rural areas and we have other pieces of the pie one thing that we have in this Bill should actually take precedents over everything else in this Bill. It is a single sales factor. That's what we need in manufacturing, that's what we need as far as bringing jobs to North Carolina.  Expanding jobs in North Carolina. That is what we need as far as putting people to work.  With that, not only will everybody get a piece of pie, there'll be more pies being baked. That in itself is good. I like to eat pie a lot.  That's what we need. There is a lot of great stuff in this Bill, and there is a lot of great things in here that will benefit Wake and Mecklenburg Counties in other things when you look at airline fuel, jet fuel. Not too many jets here in Davie County. Not too many jets in other counties. There's a lot of benefit that you're going to get here in your areas, I urge you to support the bill and let's go home. Senator Burger for what purpose do you rise? To speak to the bill. Gentleman has the floor. Thanks Mr. President. Members we've had a robust discussion about this. I think it's important for us to look at this like we would look at any legislation as a whole, and I would suggest to you that this bill is an economic development bill for all of North Carolina. Not just for the urban areas. Granted, the urban areas particularly the larger counties are going to get the bulk of the JDEG just like they have over the past two years. $273 million in JDEG grants going to three counties, $46 million are going to the other 97 counties. So I think that in some respect and help make up for a slight decrease in the growth of sales tax revenue, and two years ago, this general assembly voted, I think the senate voted unanimously to make a change in the distribution of highway funds. Mecklenburg County was one of the big winners there, $400 million in combined local and states projects, additional dollars. I didn't hear any of the rural

folks standing up complaining about Mecklenburg County getting its congestion problems addressed, didn't hear complaining from the rural legislators about that money could have gone to Bill Broads in rural North Carolina, no we understood that we are all in this together and when Mecklenburg County benefits the rest of the state benefits, so when [xx] county benefits the rest of the state benefits, when rich man county benefits the rest of the state benefits and we are not taking about taking money from someone and giving it to these counties. What we are saying is we need to have a distribution formula that allows more of the dollars that start in Hansen county, to come back to Hansen county as opposed to having those dollars that start in Hansen count ending up in one of the more urbanized counties. More of the dollars start in Rockingham County where I'm from that come back to Rockingham County, so Rockingham County, Hudson County andRockingham County. Those counties will have for those dollars that originated their coming back there. Now that just one piece of this one of things is curious to me is we hear one person say that the reallocation of the sales tax is not that much money that is really not going to do that much, and yet we hear another legislature say, that is going to burst the budget and looks aren't going to be able to pay the bounds without increasing property taxes. Well you can have it both ways is one or the other but I do agree that several hundred thousand dollars on some of this rule counties makes a big difference, a huge difference and several hundred thousand dollars in those counties is not going to solve all the problems, but it will help, and again we are living or allowing that money to stay where it started or go back to where it started. For the most part and we are going back to the formula that we had up until 2007 and yes we took off the [xx] that there was pure per capital, but the overall balance of the local sales tax distribution at that time was 50% point of sale 50% per capital and what this bill will do is return us to an overall distribution of the local sale tax at 50% point of 50% per capita. Now the rest of the bill does a lot of great thing it is everything, probably and more that the folks who are looking at economic development they have been asking for and all the rule legislators are saying is a small piece of that, a small piece of economic development bill from all of North Carolina or focus on rural areas, I urge you to vote for the bill hearing no further discussion or debate the question before this senate is the passage of senate bill 117 as amended on its second reading all in favor would vote aye, all oppose will vote no, five second will be allowed for the voting and the clerk will record the vote 46 having voted in the affirmative and 12 negative, House Bill 117 passes its second reading and we'll remain on the calendar Mr. Speaker. Senator Apadoca for what purpose you rise? Motion please floor your motion? Mr. President, earlier this evening we amended Senate Bill 607, put it over to second reading tomorrow, I move that the amendment to 607 be engrossed prior to the second reading. Without objection, so ordered. Notices and Announcements, Senator Tucker for what purpose do you rise? Special announcement please, a moment of personal privilege on all the above. Senator Tucker you are recognized on a point of personal privilege. Just quickly at this late hour I would like let everybody know, is we moved toward the LME MCO is taking care of our alcohol and drug treatment facilities throughout the State, and making those capitated kind of treatment program tomorrow in room 1228 TROSA, who is an organization that treats drug and alcohol for over 500 individuals across the State, will be here and they

will take 30 minute intervals one at 3.15, excuse me one at 3.30, one at 4.15 and one at 5.30. Some of those individuals that have gone through that treatment program who are now working, Senator Soucek they have over 500 people from across the state. They have a moving company and 80% of their revenues are generated by the companies that have been formed out of this organization. It's a great organization, it is in Senator McKissick and Senator Waters district as a part by partisan effort we want to introduce you to this group. It's in our budget at a minimal amount and they want you to take a look at it and so if you would please tomorrow at 12.28 come see a successful program that raises 80% of its money which is what I'm all about for non profit. Thank you. Other notices and announcements. Point of personal privilege. Senator McKissick for what purpose do you rise? thanks senator Tucker for work on this social brank[sp?], social is an amazing program I have been familiar of it. With it since the  very early 1990s and I really would commended it as a model for this entire state from what can be done in terms of substances abusers to be involved in a free studying program where the participants in that program do not pay a dime. All the money is coming from either donations from entrepreneurial services or perhaps grants that are received in north Carolina similar stupidities. It is excellent in terms of entrepreneurship and giving people marketable skills those people that leave there get involved in business, they operate themselves or go to work in jobs that they now have skills for. They don't have a supervision at any type of specific level and I think that is something that we can all be very proud of. Further notices or announcements? Hearing none, is there further business to come before the senate? if not, the chair recognizes senator Burger for a motion. Thank you Mr president, I move to that the senate deny endurance in the [xx] set forth in the senate rule 24.1 replication of bills, the appointment of [xx] support [xx] said house messages we convene on Tuesday, August 11th thing at 2 PM. The motion will is at the senate, the now adjourned subject to the stipulation state of about senator Brugger, to reconvene to Tuesday, August 11th at 2 pm seconded by senator Clark who we congratulate his bride for staying here, they have the entire time tonight. All in favor say aye. Aye.  All opposed no. The ayes have it. The Senate stands adjourned.