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House | September 29, 2015 | Committee Room | Appropriations Committee, Part Two

Full MP3 Audio File

[BLANK I can bring the committee to order we are here to take up house bill 98 which is the 205 budget technical corrections before starting on the bill I just want to introduce members of the house sergeant at arms that are with us young Bay Reggie Seals[sp?] Marvin Lee, David Litcgan[sp?] Jim Moran[sp?] Bill Morris, Martha Garterson[sp?] Ray Cook, and Terry Mccrow[sp?] Thank you all for being here and thank you for putting up with us this long. Chairman Dollar it's your bill you got the floor, thank you Mr Chairman members of the committee I'll work on going through the provisions of the technical corrections bill and anything that I cannot explain either especially or upon further reflection we'll have staff explain and go through we didn't quite have the time to pull together all the information for a bill summary but I can assure you that this provisions certainly most of these provisions are truly technical this is about as clean a technical corrects bill as you're going to get probable unlike the bill that's going on one floor below us which may be different matter but we're trying to keep this clean as we can and Mr. Chairman I'm going to look at this so you interrupt me as people have questions and we'll try to answer those as we get futher staff explanation one page one the first item is strictly timing change date change in 1.1, 1.2 is removal of shallow graph dredging items from a continuation review as I recall it because it's not necessary based on how we funded it. 1.4 has to do just clarifying that the banish cheque will be sent out separately from the pay cheque that goes out on December 21st I believe before Christmas. On page 2 you have in the IT section there were several items, a couple of pages of the items in the IT section one of them's dealing with, some of is money moving around, but it's moving around to cover purposes within the IT funds, so it's not really new appropriations just making sure enough money is covering variety of areas, 2.1 make sure that they have the funds necessary for the e-form digital signatures which the staff in the general assembly's been working on for quite some time. If you look down the balance of that page you see Representative Richardson I believe has a question. Mr. Chairman back on section 1.4 the compensation, it says it shall not be paid out with the December pay check. They still will get this check before Christmas won't they? Yes, they should get it before Christmas, that would be the idea is to get the bonus prior to Christmas. It's just that there was the administration, the people who administer it were saying, can't we just put it in with the regular payroll for all the obvious reasons but the decision was made that no we want it separate we want people to be able to see that they are getting this check, but it should go out and if any of the staff has something different than that it's my understanding it should go out by the 21st by the same time as the other is deposited Representative Presnell to your left Chairman Doll. Yes, chairman Doll, you mentioned shallow dress dredging, what did you say about that? It was in the continuation review but, from an earlier version of the budget but the budget funded all of that and made a whole host of changes and just sort of made that provision So will this still be funded, follow up, okay. Representative McNeil in front of you. Note I apologize did you say that it was going to go out the bonuses on a separate cheque or the same cheque? Separate cheque.

Thank you Okay, alright, just balance again if I think there was one more there on the balance of page two, there are citations that need changed on page three, the bottom of page two and into page three, if you go at the middle there at 2.13 it talks about non-exempted pulling transferring from participating agencies to newly established positions in the departments, this is the newly establish IT department shall not become exempt solely by virtue of their transfer that means they get to keep their their employments status and that's just with regard to employees that are being transferred. Mr Chairman Representative Mitchell in that section on understand that all the new positions in that agency will be exempt, That is correct in the IT Department I believe all of those positions are exempt and Mr Chairman you may want to, is there any reason, staff if it's different than that appropriate staff member to respond to that question. OK proceed Carol [xx] fiscal research any new positions that are created in excess of the positions that are transferred to the new department will be exempt. All right OK moving along there's a, Do you want to repeat it is that? Yeah I could you restate that again just so we all understand it. People who are transferred to the new department as their positions are transferred will not be exempt but any new positions that are created as the department is established will be exempt. So Representative so basically what I'm understanding is all new positions in IT all new positions will all be exempt positions? If those positions are within the Department of Information Technology that is correct. Alright Representative Dollar. Okay moving on to page four and Mr [xx] you may want to comment on 2.2 and 2.21 I believe these were just clarifications particularly with respect to RFP's about making sure that all of the affected agents better involved with an RFP consulted and have the ability to approve those RFP's before they go out and I think that's basically just to make sure that all the stakeholders is you are all of these agencies for which the services that are being provided actually have a say in those RFPs before they go. In education the sections their had a lot of changes their most of these were technical maters just making sure that the law follows the intent that we had with respect to some salary items, bridge program at the bottom of that page had a technical matter and it changed it was a date over in if you look on page five that was changed to November to December 15 over in page six some name and technical changes there date changes  and some main changes at thetop of the   [xx] Representative Speciale on [xx] the definition on page five of a veteran and you struck out service under condition other than dishonorable can I ask why and what since I don't have the GS and the SL in front of us. Which line are you are you The bottom of page five this is veteran, a person who served active duty for not

less than 90 days blah blah and it continues on to the next page which says and who was discharged or released on such service rather than the way it was which said who was discharged and released from such service under conditions other than dishonourable so I'm trying to where does that definition apply for and what purpose? That definition applies can any of the staff answer that one because I'm not certain on that one. Sure, Brad Oak man physical research this definition deals with veterans being to go for in state tuition if they don't meet residency requirements in order to comply with new federal requirements, it's an understanding from see an OSPM that this change would be required in order to be fully compliant with the new federal requirements it would apply  two veterans who are recipients of Macu murray, GI bill or post natal 11 GI bill, education benefits and most of those require that they have a discharge other that dishonorable, but this will make sure that in some event  where the discharge was a little more complicated, that they will be brought in under this new requirement. Follow up [xx] I'm trying to any situation, but we should be paying tuition to someone who was discharged under less than honorable conditions. As per as our staff is aware they will be in those situations but UNC has suggested that in order to be compliante with the VA they would need that language shrieked Representative Cleveland follow Follow up. I'd like to get, if it's possible get where the UNC is getting their information only what statute, or whatever that says we need to do this. If staff could follow up with Representative Speciale after and try to get him that information please. It's certainly unbelievable Mr. Chair if you like [xx] from UNC may be able to comment on that as well. Thank you very much. [xx] with UNC general administration, the issue here is the federal law that was passed veterans [xx] there is requirement to be able to be eligible for this benefits you'll have had a discharge that makes you eligible, so it would be a discharge that is different than dishonorable. In the case of someone who re-enlist and maybe discharged dishonorably that doesn't mean VA it's an eligible service that first time that they serve that qualifies them for this educational benefit. So just because they may have enlisted and got dishonorable discharge doesn't mean that they lose have you feel it from their first service for this educational benefits, and what we've been told by the VA. This is not coming from us its coming form the VA that the state of North Carolina if we are going to remain compliant cannot supersede and say that just because they have dishonorable discharge it means their previous eligible service means they are not going to be able to receive in situation benefits. So this the compliance issue with federal law. Representative Cleveland Thank you is the gentleman from the UNC system has that in writing? I would like to see it and if he doesn't I would like to get it in writing, and see it. I'm adamantly to change in this language and there is more than always a negative reasons why it shouldn't be changed. The armed forces provide discharges to give you the character the individuals that served, and those that served honorably served in that manner those that didn't should be identified and they should not be given the same prerogative and benefits of the individuals that served honorably, and if that's what going on, we have to change it, yes we have that in writing from the VA and we shared with staff and we shared it with others. This is coming from the feds[sp?] down, about whether or not our institution law that we passed earlier this session, whether ewe are compliant with the federal law. What we have heard is that, thy misread one area of the section that it was listed above as opposed to down below the eligibility section, and for that reason they're asking for this clarification to just write these words Okay we will be able to get this. A copy of what it is they've got. Representative Speciale Cleavland has the floor. Representative Cleveland. Thank you Mr. Chairman If the gentleman would email that to us the entire committee I'd like for us to have it and at this point if we don't change this here I plan to run an amendment on the floor to change it. I would just I think it will be good for

the committee to take a look at that information from the page before amendments are contemplated, I think the thing we want be careful about is, just making sure that, for all of our veterans in North Carolina, that we don't, I know this is not the gentleman's intent but we just make sure that we don't do something that we will disqualify all of our veterans from this program, because of technical matter, and that's the point of this particular provision in simply a compliance with federal requirements, whether there is federal requirements or what we will agree with or not it, we want to make sure the money me that is available for them for the education. Follow up representative Cleveland Okay are we ready to move forward Representative Mitchel I've got a list now representative Dollar. Representative Mitchel. I hate to keep, no I don't I would have done it. Let's go back to page four line 36 and 3.2, can you explain what that's telling us here that these are permanent full time and part time none certified employees who's salaries is supported by the general fund, shall not be legislatively increased for the 2015/2017 fiscal yea biennium. Maybe increased as otherwise allowed by law. Can somebody explain that to me? Yeah, but that's normal language to, I think our salary and benefits forks can speak to that. The underlined portion is where Mr. Chair, this language is is a change from what was included in the conference budget, but it just conforms the language for the none certified personnel, with all the language in part 30 of the budget. This is intended to save those legislature is not increasing salaries across the board, but there are other Hr policies and practices and allow for increases in range, increase job duties and those things can take place. So just clarifying and conforming the language to what the others say. Follow up? The follow is, I just want to be sure that if we come back next year and increase salaries, that this people with be honourable to receive any increase salaries that we legislate next year. Absolutely. Al right. Representative Whitmayer. If you'll use the microphone. Sorry about that. If Mr. [xx], after we are done for those that were talking about the Veter's definition, if we could meet outside, I think that would be good. There was quit a bit to that and probably be beneficial if he could explain, so if you here maybe we meet outside after we're done please. Representative Blackwell.  I would like to go ahead if I may and ask representative Mr. Moretz another question on the subject if he's still here. Mr. Moretz maybe I can ask the question while he's walking up. Mr. Morretz are you in fact saying that the VA is telling us that there are no circumstances under which we could deny a veteran with a dishonorable discharge a benefit. No I'm not, I'm saying that if the state were to do so in this case we will not to offer institution for the rare exception where someone who has an honorable discharge or something other than dishonorable discharge he qualifies for education benefits and then reenlist and has dishonorable discharge later on, that if we were to say that that individual does not qualify for institution then we, we do run the risk of loosing all federal funds for those types of educational scholarships. Follow up. Follow up. So the only dishonorable probably discharged that we have to provide a benefit to, is one who had prior service that ended with an honorable discharge? Or service other than qualifying service other than dishonorable discharge so they could be a medical discharge which may or may not be honorably discharged but it would be a qualifying service that includes a discharge other than dishonorable. One final follow up, follow up so if someone who served in the military one time only ended his service with a dishonorable discharge we can deny the benefit to them without endangering our standing with VA. My understanding is they will not be eligible for this benefit to

begin with and we would not be required to give them instate tuition that's correct. They would [xx] benefit. Representative Shepherd thank you Mr Chair my question basically is are there any federal funds involved in this at all? Or is it just all state funds that's providing in state tuition? I think it is federal money but Mr [xx] may be sure to clarify that for us. Till we get through this section you may want just stand up there. I apologize for that so the VA benefits are federal funds that come in with the veterans as they enroll in UNC system. The question that we are talking about here is with the VA reform bill we have to offer instate tuition so the benefits are being drawn down or at the instate tuition rate. So these are federal funds being drawn down and we are classifying them, we are waiving the out of state tuition for those who have lived here less than 12 months that would normally be our resident rate. Representative Cleveland do not leave the podium back their unless you need the exercise. Thank you Mr. Chairman. So in it's essence you are tell me I said to the committee that veterans who qualify for educational benefits are the ones that you are addressing and if that is so, I still I do not see where if we have a prior service member who has earned his education benefits, then losses the honorable discharge in another enlistment would be penalized by this language because he has his educational benefits, and in my recollection is the law says that if they got education benefits they get in state tuition. The VA looked at the language and whenever they were reviewing it they said that they had problems if we interpreted as a way of denying eligibility and I can show you the email that we have with them. Follow up. Follow up. I think the better thing to do instead of changing this requirement would be to put some language their indicating that is the individual has the benefits and is. Why do I want to say this. If the individual has the if it's to go to school, he will be admitted in no matter what his discharge is at the present time. I just got problems with that language being taken out and I have problems with it not just for school but for a lot of other reasons. Representative Dollar you got the floor. Okay and I would point out in it's true of most of this provisions you are not seeing all of the provisions, you're just seeing one little piece that has been adjusted so sometimes that can lead to lack of clarity, all right moving along back on page seven we have a day changes at the top of page seven, program valuation report that they would like pushed off for year, a correction on the name of the new role of health office we have a matters of in 4.6 just updating the fact that we have a new Department of Military and Veteran Affairs, there's a date change that was requested Representative Brad Brown, make a note of that one. The provision with respect of appeals is in section 12 F2 B and we have been looking over there very closely today, make some adjustments we'll feel good about that provision on over on page eight you see some date change there some changes with respect to the wording down through those There is sections, I don't think anything of any major import there. There's some clarifications with respect the aquariums and their fee funds as well as the Museum of Natural Science and I think what we were doing there if I remember correctly was trying to treat everybody equally and appropriately based on some of the changes and statutes everyone on page 10. This dealt with classifications and transfers making sure that the term transfer was in their does it apply to a number of those positions over on page 11 again technical changes there to

conform with the variety of other provisions allover on page 12. I request for clarification from DPS on the stake capital police and how that, that some items are allocated there, reallocated there, we have a change in a page 12, section 7.1 and this is a provision that is coming toward from the insurance folks. I cant explain this one in detail, except that representing time again this year but this is just to make sure that the effect of sales tax increase does not impact consumers in terms of payers thresholds involving insurance, I think that's the right way to put it. Over on page 13, again some changes with regard to the new Department of Military and Veterans Affairs. Also a change in 7.4 to some clarification that the state auditor had looked at at the bottom there in 21.2 security changes. These are provisions and run over to the middle of page 14 that the treasure had been working on getting them about 10 different bills. So these are some technical matters that we're taking care for the treasure. Moving on down there's a some small matters involving the neo gap things that we had in the previous version of the budget that we're just eliminating because it is not really irrelevant, and transportation I think a small change there, capital there was some adjusted with respective capital a clarification at the bottom of page 15 at the university system I believe that asked for some of their capital items. Over on page 60 gets some clarifications, word tend changes and the like down through there and some clarification with regard to the bottom there of a the appropriate statutes that are involved in those processes. Let's see over on, these are technical and clarifying changes and I'm looking on over on page 18 and 19 and I think, all those were just clarifying from some of the revenue provisions, some clean up language there. So that is the bill, and I'll be happy to attempt to answer any questions, or more likely have staff further illuminate as necessary Representative Pendleton. Yes representative Dollar on page 19 section 32, 14 A Charlie, it talks about the informational report is die for business is to file with department of revenue and then it goes on then. This is not a tax return, this is for informational purposes. It goes on down 32.14 a fee and allows the secretary of revenue to be able to find up to $5000 for not filing a time that ought to be more like $200, that's highway robbery. This is not a tax return. I will have to defer to staff for what the changes in that particular sections. Jonathan Tot in physical research, the $500 penalty was in the original legislation and I think the reason it may not be lower is because the informational report only applies to very large co-operations. They have to have income portion-able to North Carolina of at least 10 million dollars before they're subject to the subject and the report. Representative Blackwell. On page 14, line 22, item C there, can

you or staff explain What the nature of the change that's being made there? I'm sorry. Which line are you looking at? It's line 22, item sub C, under three security is eligible for investment. I'm just understanding, what exactly is that doing? What's the technical changes is there any substance to it? Is there someone here from the treasury department that can speak to this one? Eager to speak to this. Just Smith, I'm the director of fixed and common in the treasurers office. Really this is just looking at the consistency of how we do our overnight report agreements, which is what we've done for decades, our most conservative overnight investment on that ad really its consistency with the current market place where the regulating body for those counter parties is thinner and looking for consistency the same and everything we've done on that is this consistent to that just a technical correction to make that consistent with the current regulating body on that, but the transactions are exactly the same. So it's not broadening the investment opportunities or alternatives it's just clarifying that the which you referred to is what Thinra Correct so these all fall underneath the repurchase agreements which is our over night investment of cash. Where we invest cash and we get back treasury collateral it just as to do with the regulating body for the counter parties who are involve with the trade. A perfect example would be because the statute is very old in language would be like a Wells Fargo bank now they do that at of Wells Fargo securities which is regulated by Thinra is looking for consistency in their 10 liquid decrypted bill with the current marketplace and who the counterpart is but the type of securities in their transactions and transactions are exactly the same that we've done for decades in repos. Further questions further debate? Representative Dollar you have anything else? Chairman Johnson for a motion then. Mr Chairman I move for a favorable report for house bill 98 the house[sp?] committee substitute 215 technical correction [xx] technical change [xx] Everyone is heard despite the lack of a mic the motion by chairman Johnson any further discussion? if not the vote is on the motion all in favor indicate by saying aye, aye opposed that's our only business we stand adjourned. Thank you members. of the committee thank you Nelson you did good. That's a tough job