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House | June 24, 2014 | Committee Room | Regulatory Appropriations

Full MP3 Audio File

Good Morning. A quorum being present, the House Committee on Regulatory Reform is now in session. I want to thank our Sergeants at Arms today, Young Bae, Bob Rossi, Doug Harris, Carl Morello, Bill Morris and B. H. Powell. And, we have a full complement of pages to help us, Calex Anderson from Iredell County, Dana Arbeleaz from Wake, Adam Bonfield from Burke, Alex Casey from Wake, Greg Cullock from Johnston, Jennings Dixon from Chatham, Olivia DuBose from Forsyth, Josiah Evans from Johnston and Kevin Gauche from Mecklenburg. I'm sure I've mangled several of those names and I give you my apologies. The bill that we heard last week is back, it has been bifurcated. We now have two bills: Senate Bill Four Ninety-Three (493) has been reduced to the Health and Safety Regulations only, Senate Bill Seven Thirty-Four (734) has been turned into all of the other elements of the Regulatory Reform Act of Twenty Fourteen (2014). Representative Murray is recognized to send forth a motion that the PCS for Four Nighty-Three (493) be in front of us. [SPEAKER CHANGES] I make a motion that the PCS for Senate Bill Four Nighty Three (493) be properly before the committee. [SPEAKER CHANGES] Seconded by a Representative Jordan. All in favor say, "Aye". [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Opposed? Alright, before we start, I did want to say, we, Amy Jo Johnston? Raise your hand. And, Erica Churchill are going to be the designated amendment drafters. If you do not yet have your amendment drafted, please go to these two and they will either help get it drafted or draft it for you. The remainder of our staff today, of course, Karen Cochran-Brown, the indefatigable. Okay, What? Let's go ahead and go, we've only got three hours. Representative Murray is recognized to explain the bill. [SPEAKER CHANGES] Thank you, Mr. Chairman. Thank you members of the committee. This part of the regulatory reform package is, deals with health and safety regulatory reform. In Section One point A (1.A), we have the sum and substance of House Bill Four Ninety-Eight (498) which passed the House in the long session last year, and Section Two (2), complementary to the autism insurance coverage piece is a behavioral analyst licensure for family, for people who represent, if you represent an area that includes a military base, you are fairly familiar with the behavioral analyst licensure issue coverage through Tricare. So, this helps mitigate that. There's been changes to the Pharmacy Benefits Management Regulations Section from the Bill that we heard last week, last Wednesday, in consultation with the Department of Insurance. We're going to study a couple of major issues dealing with incentives provided to patients, as well as disclosure of patient information, the crux of which remains, deals with, price updates for maximum allowable costs, as well as definitions. I expect some further tweaks to this section, but we are closer than we were a week ago on the proper definition and coverage for allowing for price updates for maximum allowable cost prices. Section Four (4) deals with limited food services at lodging facilities. If you've ever stayed at a Holiday Inn Express, you see the, or a similar hotel they've got prepackaged food, pre-warmed food. You shouldn't have to have a full-blown restaurant regulatory framework in order for somebody to be able to warm up a bagel and that's what this deals with. Section Five (5) is House Bill, I think it's House Bill Ten (10) that passed the House in the long session. It deals with youth skin cancer protection. Anybody over eighteen (18) using, it prohibits anybody under the age of eighteen (18) from using a tanning bed. Section Six (6) is a nursing home administrator act provision. Representative Dahler brought this forward. That helps, actually I'm sorry, this is a provision that was brought forward by Representative Arp. The Nursing Home Administrator Act refers to a licensing exam administered by the board. The exam is actually administered by a national body, so this ??

... the Nursing Home Administrator Act to clarify that to make sure that the test referred to is actually administered by the national body and not the board. Section 7 is reports, is a report on the subsidized Early Education for Kids System before it can be rolled out statewide, we're requiring that the Department of Health and Human Services in the Division of Child Development and Early Education to report back to the Joint Legislative Committee for Health and Human Services before it gets rolled out statewide. Section 8 deals with conflicts of interest provisions on hospital mergers. Representative Daughtry brought this forward and I haven't heard over the past week any concerns on this particular provision. Section 9 deals with multiplicative auditing and monitoring a certain service providers. If you are accredited by a national agency, and that comes with an audit then we are going to limit the number of audits that can be performed by the state. Section 10 ends a sunset for facilities that use alternative electronic marketing systems. This is a provision that was brought froward by Representative Dollar. Section 11 state Medicaid re-credentialing period. The Feds require a maximum of re-credentialing every five years and we're changing state law to go the maximum from three to five years. Section 12 is and amendment that was added in committee last week about the use of spring water at coal located restaurants. That makes me thirsty just reading this title. Representative Stan brought this amendment forward. Section 13 deals with amendment to how animal euthanasia technicians correctly calculate chemical agents for animal euthanasia. Representative McElraft brought this provision forward. And then we have the Section 14 severability clause. And with that Mr. Chairman I'd like to answer any questions about any of these provisions. [SPEAKER CHANGES] Are there any questions for the bill sponsored on a macro level? Representative Harrison? [SPEAKER CHANGES] Thank you Mr. Chair and Representative Murray, I apologize I missed last weeks meeting because of a conflict. Do you mind just briefly explaining on the pharmacy benefits regulation. Who is covered by that change cause you said you made some tweaks to it? [SPEAKER CHANGES] That's right. That's going to be plans that are regulated by the Department of Insurance would have to update their maximum allowable costs pricing consistent with Medicare Part D. There's a CMS final rule that requires a price update and disclosure of pricing every seven days and this seeks to mimic that. There are additional provisions that we're asking the Department of Insurance and the North Carolina Board of Pharmacy to jointly study on what's happening on a national level and come back with recommendations to the general assembly. But this is limited to trying to be consistent with how Medicare Part D operates and have regular maximum allowable cost price updates. Maximum allowable costs is the maximum the pharmacy can be reimbursed. It changes rapidly and so we just want to make sure it's on a regular update to make sure that when the prices go up it helps the patients, or helps the prices go down it helps as well. So, it;s just making sure we have a stable price update system. [SPEAKER CHANGES] Follow up? Representative Stevens. [SPEAKER CHANGES] Thank you Mr. Chair. My question I guess, I've got two questions. One, this only impact the people who are insured? It's not going to affect the people who are not insured in any way? It doesn't regulate their price in anyway? [SPEAKER CHANGES] No, maximum allowable cost price update is a way to calculate drug pricing for reimbursement to pharmacies. It doesn't effect patient co-pays. It basically is a way to have a regular price updates consistent with Medicare Part D. [SPEAKER CHANGES] Follow up? [SPEAKER CHANGES] And I guess that raises the question. Why did we pick Medicare Part D? [SPEAKER CHANGES] Medicare Part D is something that's not regulated by the state and at the federal level centers for Medicare and Medicaid services recently issued a final rule requiring Medicare Part D plans to update their prices every seven days. What we're trying to do here is make sure that state regulated plans operate in the same fashion. [SPEAKER CHANGES] Follow up? [SPEAKER CHANGES] Another follow up, please? Thank you. Is this going to have an impact on their health insurance costs? [SPEAKER CHANGES] You're talking about state health plan?

Well any of the health plans, how is it going to affect those health costs? [SPEAKER CHANGES] Drug prices go up, drug prices go down. We just want to make sure we have regular updates and that's the goal here, to make sure we have stability in how price updates occur. [SPEAKER CHANGES] Representative Speciale is recognized to send forth an amendment. [SPEAKER CHANGES] Mr. Chairman. [SPEAKER CHANGES] Yes ma'am? [SPEAKER CHANGES] I have a question on that same bill. [SPEAKER CHANGES] Okay. The lady is recognized. [SPEAKER CHANGES] Thank you, my question is does this apply to all self-insured to the ERISA plans too? [SPEAKER CHANGES] It would only apply to plans that are subject to regulation by the Department of Insurance and so I would think it would be actually non-ERISA plans that would be subject to this regulation, not ERISA plans. I think it's the other way around. ERISA, I believe, the way I interpret ERISA, I think ERISA prohibits the state from regulating those insurance plans. [SPEAKER CHANGES] The sergeants at arms have informed me they have set up a remote location where it can be, this committee can be viewed on WRAL in room 421 for those of you that would rather sit comfortably somewhere else. Representative Cunningham. [SPEAKER CHANGES] Thank you, Mr. Chair. Section 1 for the autism health insurance, how did we come up- [SPEAKER CHANGES] Representative Cunningham, I was going to let the pharmacy thing finish and then start going through the amendments. If this is, if you aren't, if you got another question about the pharmacy thing- [SPEAKER CHANGES] No. I'll wait. [SPEAKER CHANGES] Okay, thank you, because we're going to discuss the pharmacy very well. I know there's going to be two or three amendments about that. Representative Speciale is recognized to send forth an amendment, ATK-132, the gentleman is recognized to explain his amendment. Representative, yeah okay. [SPEAKER CHANGES] This amendment changes, makes some changes to the tanning portion and basically what it does it says the operator should not allow a person under 18 to use it without a written prescription from the medical physician or written consent of the parent or guardian. We're stepping in an area, again, where we're taking away parental authority. If you say they can't do it until they're 18 and they're determined to get a tan, they're going to spend a lot more time out in the sun. They're going to get that tan if that's what they want to get. So let's, as a State Government, let's just back off the parents, let them do their jobs, and let them decide whether or not they want to give their kid permission to go to a tanning booth. Let's just leave it like it is but ensure that they have parental consent, simple as that. [SPEAKER CHANGES] Representative Murry. Okay, Representative Stam. [SPEAKER CHANGES] Yes, I'd opposed the amendment. The underlying provision passed the House about 5-1 last year. We don't have any reason from the Senate why they haven't taken it up. Since then the major people who were lobbying against it dropped their opposition and let's just examine the nature of this amendment. Basically it's saying you can do whatever you want with parental consent on this and think about 15-year-olds and remember that the medical evidence is that people are dying, even in their 30's, from this tanning bed use they did when they were 15. Alright, you have two 15-year-olds, is the argument that 15-year-olds should be able to smoke cigarettes with their parental consent? No. Is the argument that you ought to let 15-year-olds drink whiskey if their parents give it to them? No. Is the argument that if two 15-year-olds want to have sex with each other if they have their parentals, parents consent, that that should be allowed? No. For centuries the law has protected minors from abuse, neglect, and their own inexperience. We now know that this use of tanning beds severely harms them in their future and the parents consent or not makes no difference. [SPEAKER CHANGES] Representative Speciale is recognized to debate the amendment a second time. [SPEAKER CHANGES] That was a terrible analogy there. The bottom line here is we have a sun. The sun does the same thing that the tanning booth does. If the kids want it they're going to get it. Let their parents make the decision like the parents should be making decision. If not, then I'd like to put an amendment that we outlaw forks because kids are stabbing each other with forks as well. I'd also like to put in amendments for a bunch of other things that kids are doing. We can't regulate everybody

behavior, and again, the key here is there is a sun that does the same thing as a tanning booth. So why are we getting involved? Why is the General Assembly involved in something like this? Leave it up to the parents. Thank you. [SPEAKER CHANGES] Representative Dobson. [SPEAKER CHANGES] Thank you, Mr. Chairman. I'd like to speak in favor of the amendment and I appreciate Representative Speciale bringing it forward. This is a key provision, to me, in this bill that talks about what the role of government is and is it the role of government to make decisions that should be left between a parent and their child? And I don't think that it is. I think this is an issue that, with the written consent of the parent, that this is a good amendment and it just philosophically comes down to the role of government. I don't believe we should be getting in to these issues that should be left between a parent and the child. So I would strongly urge you to support the amendment. [SPEAKER CHANGES] Representative Robert Brawley. [SPEAKER CHANGES] To ask Representative Stam a question. [SPEAKER CHANGES] Representative Stam? [SPEAKER CHANGES] I'd be glad to yield. [SPEAKER CHANGES] Representative Stam, is there anything in this bill that would make it illegal for that child to get a suntan either in the sun or in a tanning booth at home? [SPEAKER CHANGES] That's really not a question to me. Obviously there's nothing in the bill that relates to that, Representative Brawley. [SPEAKER CHANGES] Thank you. If I might speak on the bill? [SPEAKER CHANGES] The gentleman's recognized. [SPEAKER CHANGES] The parents are going to control the issue anyway so why not go ahead and let them control the issue. As Representative Stam's acknowledged that there's nothing in this bill that if the parents want to allow their child to get a suntan their going to do it. So I support the amendment, encourage you to. [SPEAKER CHANGES] Further discussion or debate? Representative Jones. [SPEAKER CHANGES] Thank you, Mr. Chairman, and as much as I sympathize with the argument of the amendment sponsor and the others been mentioned I am very protective when it comes to parental authority and very hesitant to see government intrude on that. However, I agree with Representative Stam's argument. We heard this bill in Health and Human Services and I don't think that it's proper to equate a commercial tanning booth to the sun. I think there's a lot more intensity that comes with a tanning booth. I do think that there is a role of government when it comes to protecting minors, as Representative Stam said, and the same argument occurred to me. That is, as protective as I am about parental authority, I don't think that the role of the parent, for instance, should be to allow alcohol purchase, to allow cigarette purchase. There are certain things where it is very clear that it is harmful for the individual and so on this one I'm going to have to come down against the amendment and for the bill, which did pass this House by a vote of 94 to 22 in its current form. I think it is best to leave it alone and I would oppose the amendment. [SPEAKER CHANGES] Okay, we're going to continue to debate on this but I do want to warn the committee in three hours we're going to do both of these bills and probably 20 amendments and we got to pass them out today. So, Representative Avila. [SPEAKER CHANGES] Thank you, Mr. Chairman. I might think you'd find it interesting that the sun has actually been declared a carcinogen. That's how far we're going with some of our protection of people. It's getting to the point that we're not going to be allowed to use our common sense in running our own personal lives and the tanning bed industry is highly regulated. As a matter of fact there's a move out now to possibly move it to a different level of intensity, or whatever, in terms of licensing it, the type of instructions that go along with someone who's going to tan. We heard a lot of people in white coats, who I respect a great deal, speak emotionally about an issue. Melanoma, which was their chosen cancer to go against, is a deadly cancer but it's not proven, scientifically or medically, that it's just suntanning that does it. There's a hereditary link that's in there as well and I think when we start to meddling in controlling everything that people do that we need to consider common sense and giving them directions with the right kind of knowledge to run their own lives.

Okay, go ahead. [SPEAKER CHANGES] Chris Millis, you're recognized. [SPEAKER CHANGES] Thank you Mr. Chair, this is to add some more salt and pepper to this issue but not repeat what has already been said. I fully support Rep. Avila as well as Rep. Dobson so comments, this goes back to the role of government. It is one thing for us to inform individuals in regard to health and safety. It is one thing to actually have regulations, to actually help inform citizens on guidance but is another, under the guise of regulatory reform, to forbid. The current language actually forbid- I actually support this ammendment and I hope you guys will very carefully and prudently think about what our role is here as individuals and allow of course, the parents to actually have the proper consent- guardianship over their own children. Thank you very much. [SPEAKER CHANGES] Is there someone here from the tanning industry that would like to speak on this? [SPEAKER CHANGES] At the pleasure of the chair, Rep. Brawley, we debated this bill on the House floor extensively and it passed 94 to 22, so I would respectfully ask that you call for the vote and let's move on because we've got some other stuff to do.. [SPEAKER CHANGES] Well I've got two people, Sarah Stevens and Skip Stam[??] [SPEAKER CHANGES] Okay. Skip, wave off. [SPEAKER CHANGES] I would just point out we had last year, when we passed this 94 to 22, a new meta analysis which is like a study of all the studies, which showed a significantly higher risk for melanoma from those who had these tanning beds in their teens. I mean we can't just shut our eyes to the facts- defeat the ammendment. [SPEAKER CHANGES] Okay. So many as favor the ammendment by Rep. Speciale say "aye". [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Opposed, "no". [SPEAKER CHANGES] No. [SPEAKER CHANGES] I'm gonna call for a division. Raise hands if you're in favor of the ammendment. Thank you, put your hands down. Opposed, raise your hand. Thank you. Twenty-one in favor, twenty-nine opposed. The ammendment fails. Rep. Horn is recognized to send forth an ammendment, "Interstate Connectivity of Controlled Substances Reporting System ATK 135 version 1. Rep. Horn, you're recognized. [SPEAKER CHANGES] Thank you Mr. Chairman. This ammendment allows, or actually directs North Carolina to participate in interstate connectivity. Presently 41 North Carolina counties abut another state. Controlled substance use is a significant problem, we passed a controlled substance reporting bill last year, but we don't bother to interconnect with our adjacent state so that we can ensure that folks are playing by the rules, so to speak. A number of counties have seen a significant surge in prescriptions being filled in their counties, and which are also being filled in the county across the state line. So this allows North Carolina to join the National Association of Wards of Pharmacy for their PMP connect to rapidly begin sharing controlled substance prescription data with actually 25 other states. I urge you to support the ammendment. [SPEAKER CHANGES] This is a good ammendment, Mr. Chairman, and I believe this is the contents of an additional bill that has been filed. Has that come up from- I want to ask Rep. Horn a question: The bill hasn't been heard yet in this session but it was a recommendation from a oversight committee in the interim, or my recollection is that this has been discussed or this is a bill that has been filed and I'm glad Rep. Horn has brought it forward. [SPEAKER CHANGES] Discussion or debate? Question before the committee is the adoption of Rep. Horn's ammendment ATK 135. So many as favor the ammendment say "aye." [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Opposed, "no"? The ammendment carries. Rep. Larry Hall (recording ends)

Is recognized to send forth an amendment, Pharmacy Benefits Management Study. [SPEAKER CHANGES] All right, thank you, Mr. Chairman. This amendment would take an issue that is partially being studied and partially being debated and is something new that creates apparently several different classes of rights for. [SPEAKER CHANGES] Mr. Chair, could we hold just a minute? I'm not even sure what area, we don't have the amendment yet, I'm not sure what area he's modifying. [SPEAKER CHANGES] Apologize, we'll hold for just a moment. I apologize, Representative Stevens, it was my understanding that it had been, but. [SPEAKER CHANGES] And Representative Hall, I didn't mean any disrespect. I was just trying to figure out where you were. [SPEAKER CHANGES] Does everyone have the amendment ATC139 version one, excuse me, that's ATK139 version two. Is there anyone lacking the amendment, please hold your hands up. Representative Hall is recognized to explain his amendment. [SPEAKER CHANGES] Thank you, Mr. Chairman, and again this is an amendment that turns this section of the bill into a study so we can get the proper information we need and insure the impact of it. A lot of consternation among people who are in the industry about this and exactly some of the definitions and how it would apply, and so it appears we're not really ready to move forward on this and don't have all the information we need to satisfy the parties and ensure fair competition between the providers. [SPEAKER CHANGES] Representative Murry. [SPEAKER CHANGES] Thank you, Mr. Chair. This language is incomplete because there's nobody at the Department of Insurance with any pharmacy expertise at this point, and so I don't know how they'd conduct this study alone, and so what we've done in the bill the PCS sets before you, we've had a significant portion of the bill, of this section in consultation with the North Carolina Board of Pharmacy, so I'd ask members to oppose this amendment because it is one, incomplete and two, the Department of Insurance could not conduct this study alone. [SPEAKER CHANGES] Is there anyone from the Department of Insurance here? OK. Further discussion, further debate. Do you want to address it? Or not? Please go to the microphone and identify yourself. [SPEAKER CHANGES] Thank you, Mr. Chair. I'm Rose Vaughn-Williams, I'm legislative counsel to the Department of Insurance. I've not seen the new PCS or the amendment, but I'm listening. We don't regulate pharmacy benefit managers, and I appreciate the original idea of being changed to a study to look at that. Our usual regulation is insurance and insurance entities and their effect on consumers instead of business entities like pharmacies. This would be something new to us to do and to learn how to implement. So that I could say, I could answer. I'll do my best. [SPEAKER CHANGES] Other questions? Representative Stevens? [SPEAKER CHANGES] Thank you, Mr. Chair. I think, my question, and I realize that Representative Murry has a lot of expertise in this area, but I don't think that the rest of us understand it well enough to feel comfortable proceeding at this point, which is why I would be more in favor of a study, but I will have to vote no on this amendment because it doesn't apparently target the right people. [SPEAKER CHANGES] I'm working with ?? on this provision and I expect resolution by tomorrow. [SPEAKER CHANGES] Mr. Chairman. [SPEAKER CHANGES] Representative Hall. [SPEAKER CHANGES] Then I'll withdraw the amendment based on Representative Murry's comment. [SPEAKER CHANGES] And Representative Hall, I will gladly have you involved in that conversation to get your level comparability up as well. [SPEAKER CHANGES] Thank you, Representative. Representative Jordan is recognized to send forth an amendment. Oh, I'm sorry, they just handed it to me, I'm sorry. Representative Cunningham is recognized to send forth an amendment.

Speaker: A S T-210 Speaker Changes: Mr.Chairman we don't have that yet, Speaker Changes: It's coming out now,hold,it's not a problem Representative Jordan,thank you,as everyone go the amend,who does not have the amend,Representative Cunningham is recognized to explain he amend, Speaker Changes: Thank you under section 1 ,with artist and health insurance coverages,i would desire if you look on page 2 line 25,deleting 23 is to remove the page 23 and put the age of 21 and the reason why I'm accent for because most children does have that ?? if it is recognized it can be diagnosed early on and 23 seems to be a far out number for children with ?? to get coverage ,i expect your support for he amend, Speaker Changes: Representative ?? Speaker Changes: I'm gonna have to defer for the advocates for ?? but i believe this 23 is consistent for i m gonna need you would paid recognize, Speaker Changes: My name is Flory ?? 23 was chosen last year when the house considered this bill because basically it was an average of other states and act similar legislation's 37 of have cast ?? form like this .26 will be the age that will be relevant to the care act ,26 is the age that the state health plan decided on when the state health plan last month decided to adopt the benefit for itself, Speaker Changes: Representative Murray, Speaker Changes: I just want to thank her for that clarification , Speaker Changes: Further and further debate, Speaker Changes: Representative ?? and Representative Shepperd and order, Speaker Changes: Thank you Mr.chairman just have a question about physical impact on this provision to be have any kind of idea of the fact that this is gonna cause anyone , Speaker Changes: Representative ?? the original bill that you have seen before did have a physical impact because the sate health plan was in it involved the state health plan just offered it's benefit on their involution and so this bill as along as covers state health plans ,so in terms of physical impact to the state that has been removed , Speaker Changes: Thank you, Speaker Changes: Representative Shepperd, Speaker Changes: Mr.Chairman just to make a comment,some of these children in the early ages have not get the care ?? they have needed so sometime the lady giving the care if they are treated a little early at an early age you see a lot of positive results from them with send some of them on this age have not received a as extended because we got some extended adults ?? they didn't get early on you so i support the amend , Speaker Changes: Representative Brian Brown, Speaker Changes: See Mr.chairman we ought to respect the amend sponsor ?? if I'm wrong and certainly ?? can correct me as well on the language of the bill but the argument on this extended age and the children are been identified earlier than that that's absolutely correct ,bill language state that this goes to 23 if you have identified priority in age 8 I'm i correct Representative ?? Speaker Changes: You're correct, Speaker Changes: So this is just an expanding coverage to the age of 23 those individuals covered been identified prior to age 8 this is an important provision to extend much needed coverage to these children and i would be highly recommend to feed this amend,

Thank you, Representative. Representative Hager. [SPEAKER CHANGES] Thank you, Mr. Chairman. As a lot of you know, I was one of seven to vote against this autism bill when it came through the House, but I will say this amendment – and I think Representative Shepard maybe and I think Representative Brown tried to address the issue; Representative Sheppard may not have understood this – I think this… I would be in favor of defeating this amendment because of the pullback on the extension on it. I would like to see that 23 if not a little more, more towards Affordable Care Act issue of 26, but 23 is in the bill right now. I certainly would not want to see that pulled back, so I ask for members to defeat this amendment. [SPEAKER CHANGES] Representative Cunningham. [SPEAKER CHANGES] I appreciate all of your comments about autism. I myself have an autistic grandson and understand that early diagnosis is the most important thing you can do for autistic children because at the delayed age of 23, after 21, developmental stages are unlikely to be changed unless early change is implemented, so I’m only asking to consider the amendment because not only does health insurances have a commitment to assist with treating, but parental and families at home also have a responsibility to recognize and get their children early care just as I did for my grandson. So I think that 23 is not going to do that much for increasing their vitality for life, so I still ask you to reconsider on the amendment. Thank you. [SPEAKER CHANGES] Representative Shepard. [SPEAKER CHANGES] Yes sir, Mr. Chair. In regards to what Representative Hager said, I did misspeak. I meant to say I want to defeat this amendment because we do have some people who didn’t get their early treatment, and we don’t want to leave them out without any coverage, so thank you. [SPEAKER CHANGES] Further discussion, further debate? The question before the committee is adoption of Representative Cunningham’s amendment. So many as favor the adoption say aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Opposed, no. [SPEAKER CHANGES] No. [SPEAKER CHANGES] No’s have it. I think we have dealt with the last amendment. We are now on the bill as amended. [SPEAKER CHANGES] Mr. Chairman, I’d like to make a motion that we give Senate Bill 493 as amended a favorable report enrolled into a new proposed committee substitute unfavorable to the original bill. [SPEAKER CHANGES] We have a motion by Representative Murry. Is there any further debate? So many as favor the adoption of the bill say aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Opposed, no. [SPEAKER CHANGES] No. [SPEAKER CHANGES] Carries. Thank you Representative Murry. We are now ready to take up Senate Bill 734, and we have 14 amendments for this one, so… [SPEAKER CHANGES] Mr. Chairman? Mr. Chairman, is that a PCS? [SPEAKER CHANGES] It is a PCS. [SPEAKER CHANGES] I make a motion that the PCS be properly before the committee. [SPEAKER CHANGES] Thank you. Motion by Representative Murry that 734 PCS be before the committee. So many as favor say aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Opposed, no. PCS is before us properly. Representative Murry will present the bill. [SPEAKER CHANGES] Thank you, Mr. Chairman. This is Senate Bill 734. If you recall back to last Wednesday, there were two section of the reg. reform bill that dealt with business regulations and state and local government regulations. We have split those provisions out and also added back in several recommendations that came out of the Administrative Procedures Oversight Committee that have already passed this chamber. That’s what you see in part 1. Part 1 are the administrative reforms that deal with the deletion of several unnecessary boards that haven’t been meeting over the past few years, and that’s section 1.1. Section 1.2 clarifies the process for readoption of existing rules, and the original statute sis not set the process for agencies to readopt rules once the review process was complete, so we’re amending that house Bill 74 from last session the help clarify how administrative agencies go back through and readopt rules. Section 1.3 is a recommendation from the APO Committee that recommended an authorization of licensing board to adopt rules for professional corporations. Section 1.4 deals with Occupational Licensing Board reporting requirements, and this would require APO to notify that…

These licensing boards should have to report the number of total licensees supervised by the board, and the number of applicants who failed the examination each year. We’re not going to ask for the names of the people who failed the exams, just numbers. We have an idea of whether the veracity of the exam and that report back to the administrative procedure oversight committee. Section 1.5 would authorize the office of administrative hearings to allow documents in a contested case to be filed and served electronically. Section 1.6 contains a clarified that the state board of education is subject to a rule making under the administrative procedures at as part of recommendation on the APO committee. Part 2 begins the business regulation section of the bill. The original sent bill 493 had a provision of prohibiting certain headlights, after market headlights. That part of 493 is now in this bill. We have removed the section about inspections. There were concerns that were raised about how an inspection would occur. 2.3 deals with bail bond shield amendment. It changes the margins of the bail bond shields so that all the numbers for the newly licensed bail bonds can actually fit on the shield. Section 2.4 came from, is agreed to by the utilities commission to repeal unnecessary and obsolete provisions in utility law. 2.5 deals with, we passed a locksmith law in the last session, in the long session. This clarifies that merchants can, are exempt from the licensing of locksmiths so they can provide replacement transponder keys. Section 2.6 is a clarification of a professional engineering exemption brought forth by Rep. Arp. Section 2.7. There’s a fair amount of conversation about how we do. Whether we allow yahoos to serve process servers. This is going to study the yahoos to serve people. This is a study provision to discuss how we use private process servers. Section 2.8 clarifies the effective date of the definition of discharged waste. Section 2.9 studies the membership under the insurance guarantee association act. There’s some pending litigation dealing with this issue. We turned this into a study. Section 2.10 was an amendment offered by Rep. Ramsey I believe and the reform committee last Wednesday to clarify exempting specialty markets and exempting farmer’s tailgate markets from registration for the specialty markets operators. Section 2.11 deals with the ADD requirements for private pools. It clarifies the North Carolina building code. It refers to the federal definition of a public place in the Americans with Disabilities Act. That concludes the section of business regulations. Starting in Part 3, we deal with state and local government regulation changes. Section 3.1 deals with notification of property owners for transfers of right of way. That’s the DOT has gotten more comfortable with this provision since last week. This just requires units of local government to require right, require acceptance of right away dedications in exchange for transfer density credits to notify the applicant and the property owner when the local government begins that negotiation. Section 3.2 deals with DOT condemnation and court order map changes. Both of these provisions 3.1 and 3.2, Rep. Stein has been working on these provision with the DOT. Section 3.3 is a clarification for the law of notice to chronic violators in municipalities and city’s public nuisance ordinances. This is basically going to treat folks that have public nuisances the same as, treat people who have overgrown vegetation the same as folks who have public nuisances from our notice requirement. Section 3.4 addresses an issue that was in the long session regulatory reform bill with regards to treatment of fraternities and sororities with regards to zoning. This basically gives a fraternity or sorority that has lost their recognition from the university two years to re-establish or for a new, and gives a new sorority, you have a year to get…

Approval for a new fraternity sort 3.5 repeals the protest partitions that have been discussed and debated by the house several times; I'm sure we'll have more discussion and debate on that today. Section 3.6 working with the department of insurance to repeal certain unnecessary statutes at their recommendation. Section 3.7, we talked about mug shots; we are turning that provision into a study as well, that the department of public safety and AOC will submit a report at the end of the year to the joint legislative oversight committee and the department of justice and public safety on how we should treat mug shots. Section 3.8 clarifies that inspections for worker progress are consistent with the law that the general assembly passed last session, the long session. Section 3.9 deals with ethics requirements for municipal officials; we had some conversations about that last Wednesday, and so we're asking that the state ethics commission and UNC school of government report back to the joint legislative procedures oversight committee on how we should properly treat certain city officials in regards to ethics provisions. 3.10 deals with ?? building code to study the authority granted to local building project inspectors in the cities and counties where building plans are reviewed and approved prior to the issuing of a building permit. 3.11 deals with BRAC and other amendments related to Base Realignment Closure and helps make sure that the military, that we have amends, open means to make sure that any conversations with regards to BRAC by the military affairs commission doesn't become public until the federal government makes their final decision with regards to BRAC. 3.12 is a new provision that deals with permitting restaurants, eating establishments, food businesses and retail businesses on Centennial Campus to sell alcoholic beverages with a permit. As the Centennial Campus develops there are going to be restaurants on there and they wanted to make sure that they had this clarification. Section 3.13: Extend the deadline of adoption of the division of employment security rules. THis is back in a provision that allows the--extends the ENC rules to the end of the year, and requires them to report back to the joint legislative oversight committee on unemployment insurance by September on its progress. Section 3.14 directs the North Accountability Code to study procedures and policies to approve material, design, or methods. Section 3.15 amends the definitions for North Carolina code officials to include a definition for willful misconduct, gross negligence, or gross incompetence, and requires the North Carolina Code Officials Board to notify all code enforcement officials in the state of this clarification by October first. Section 3.16 is an amendment that Representative Whitmire had been working on with regards to clarification of flood plane ordinance and a bona fide form for ETJs to exempt them from municipal regulations that are part of the ETJ of the city. And then part 4 deals with the severability clause. [SPEAKER CHANGES] Thank you, representative. Well, we neglected--we made a small error on 493, and I'm gonna make a motion as chair to allow the staff to make grammatical and punctuational corrections involving numbering of 493 which we've already said over but amended. So, all in favor of that motion please say aye? [SPEAKER CHANGE} Aye. [Speaker Change] Opposed, no? Last, a quick announcement: Both PCS's are on the committee's website, if you don't have the paper but would like to see what we're discussing, it is available online. We've got a bunch of amendments so let's get started. Representative Dollar is setting forth an amendment, this is AST 202, version 1--would everyone make sure they have a copy? Representative Dollar. [SPEAKER CHANGE} Thank you, Mister Chairman. This amendment is identical to house bill 150 that the general assembly of the house passed last year, 98-18 and reflects a... [End Segment]

A small adjustment made in the Senate committee last year. What this provision does is it simply clarifies that municipalities and counties do not have the authority to regulate the aesthetics on single family homes and two-family residences and this applies to the outside cladding, porches, non-structural exterior ornamentation, the style and location of doors and windows, garage doors, types of rooms, and interior layout of the rooms. I want to make sure everybody's, maybe refresh your recollection from last year. This only applies to residential dwellings; it does not impact municipal or county regulation of commercial or multi-family. It doesn't impact homes that are covered by historic districts, or on the national registry, or safety issues. It doesn't apply to manufactured homes. It doesn't apply to, impact at all national flood issues. And it also does not impact the municipality or county's ability to regulate with regard to height, bulk, orientation or location on the lot, and it also does not in any way impact HOA covenants. It was obviously supported by the home-builders, supported by various realtor groups, and it was also supported by the North Carolina Housing Coalition as well. We had a very strong bipartisan support for this legislation and I would be happy to answer any questions, appreciate it's inclusion of this amendment in the bill. Thank you. [SPEAKER CHANGES] Further discussion, further debate, Representative Adams. [SPEAKER CHANGES] Thank you. Just a question for Representative Dollar. I'm not, Representative Dollar? I'm not sure, who does it impact, then? [SPEAKER CHANGES] I'm sorry, what? [SPEAKER CHANGES] Who does it impact? What kind of home would it impact? [SPEAKER CHANGES] It would impact single family or two-family dwellings, and you'll see that on line 9 of the amendment, one- and two-family dwellings. So, it's a residential house and what it applies to is just the outside aesthetics as well as the right of a home buyer or a future homeowner to be able to say where they have their rooms inside their house without concern that some municipal government would, would tell them how many rooms they gotta have and where they gotta have them. [SPEAKER CHANGES] Further discussion, further debate, Representative Bumgardner. [SPEAKER CHANGES] I have a question for the amendment sponsor. [SPEAKER CHANGES] Representative Dollar. [SPEAKER CHANGES] Yes. [SPEAKER CHANGES] What is it that keeps a city from declaring an area to be a historic district and thereby getting around this and just deciding that they want things to look a certain way? [SPEAKER CHANGES] Well there are a variety of rules and regulations that apply to that. It's, that particular provision is covered in lines, for example, 11 and 12 where it talks about structures that are located in an area designated as a local historic district pursuant to part 3C of article 19, chapter 168 of the general statute, so it's, it has to, it can't just be on someone's whim, it has to meet the statutory requirements for a historic district. [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] The question before the committee is the adoption of the amendment [SPEAKER CHANGES] Mr. Chair? [SPEAKER CHANGES] Yes? [SPEAKER CHANGES] I'm in front of you, I'm sorry. [SPEAKER CHANGES] Oh, sorry. Representative Harrison. [SPEAKER CHANGES] Yeah, thank you Mr. Chair, I just, I'm trying to recall the debate on this. I had some recollection that, that my city was particularly concerned with this legislation. I don't know if there's anybody from the League or something that can speak to this or if that's appropriate? [SPEAKER CHANGES] Representative Harrison, this is the bill where Rick Glazier said that he had read the bill, read the law, and read the case law and essentially this codifies the land vale decision from North Carolina Supreme Court. I'm pretty sure that's why it had such an overwhelming vote. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Do you still wanna ?? I've gotta [SPEAKER CHANGES] That's okay. [SPEAKER CHANGES] Further discussion, further debate? So any of us favor the motion by Representative Dollar, say aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Oppose, no. Motion carries. Representative Murray is recognized to send forth an amendment AST-208, version 1. [SPEAKER CHANGES] Thank you, Mr. Chairman. On adoption of this amendment, the chance...

Is that this will be passed into law by July first is a long shot and so we are changing several affective dates till August to provide for that additionally there's some renumbering and re lettering of sections on page eight and twenty three twenty four. There is a typographical error it's deleting and clarifying how the association should read and we're also clarifying board of Alderman versus government board on page twenty one line twenty seven so I move to option this technical amendment. SPEAKER CHANGES: Further discussion further debate. So many of us favor the amendment by Representative Murray say aye. SPEAKER CHANGES: Aye. SPEAKER CHANGES: Opposed no. Amendment carries Representative Jordan is recognized to send forth an amendment. Do you have a preference which we see...OK he has two the first is AST two zero six version one representative Jordan is recognized to explain the bill. SPEAKER CHANGES: Thank you. Thank you Mr. Chairman I move adoption of this amendment AST two oh six is going to amend the section with the bail bondsman shield. There were some technical corrections that need to be done we needed to spell out what the department of insurance was saying was the specific size which is the one point eight eight inches two point three six inches high. Also there's a second section the attorney general had determined that these folks can use what are called runners as agents to help them capture the escaping felons. We're just putting in that we're cadifying the attorney generals opinion of that is fine for them to use runners as well as they can already use sure at ease and so forth. I'd be glad to answer your question. SPEAKER CHANGES: Sure. Further discussion further debate. ?? the motion before the committee is the emotion before the committee is the adoption of the sub...amendment by representative Jordan AZ T two oh six and many that is in favor of the amendment say aye. SPEAKER CHANGES: Aye. SPEAKER CHANGES: Opposed No. The amendment is adopted. Representative Jordan is recognized to send forth an amendment ATC one thirty nine version one. Gentlemen is recognized. SPEAKER CHANGES: I think that's duplicative of the one we just did. SPEAKER CHANGES: Representative Stephens they both reference the same section of the bill. But there are two separate amendments. SPEAKER CHANGES: I'm sorry mister ?? I believe this is the final version of what I attended to be the amendment the difference is if you'll notice this one has a...yes we all overlook things Representative Stephens thank you. (laughs) The only difference between this and the last one is we needed to add in the first section there you see on line six and seven, following that regulation twelve NCACO seven D that's the number basically the name has to be on the sheet before it's delivered so we're not delivering blank shields to people who then engrave their own name and act like bondsmen. SPEAKER CHANGES: OK. I think technically since this amends the previous amendment that it would be out of order so I'm gonna... SPEAKER CHANGES: Lift the chair. SPEAKER CHANGES: Accept the...I think what we need to do is reconsider the previous one. So representative Jordan is recognized to move that we reconsider the adoption of the previous amendment. SPEAKER CHANGES: Yes sir I do. SPEAKER CHANGES: Second by Representative Stansme is in favor of the motion say aye. SPEAKER CHANGES: Aye. SPEAKER CHANGES: Opposed no. The motion before us is AST two oh six. Representative Jordan is recognized to withdraw the amendment. SPEAKER CHANGES: Yes sir I do. SPEAKER CHANGES: Representative Jordan is recognized to send forth amendment ATC one thirty nine the gentleman's recognized to explain the amendment. SPEAKER CHANGES: Thank you mister chairmen I do send this forth I do move adoption based on the previous discussion. SPEAKER CHANGES: Further discussion further debate. This committee in favor of the adoption say aye. SPEAKER CHANGES: Aye. SPEAKER CHANGES: Opposed no. The amendment is adopted. Representative Jordan is recognized to send forth an amendment ARO seventy seven. The gentleman's recognized. SPEAKER CHANGES: Thank you mister chairmen. This is a new amendment on a different section of the bill. The folks over on our employment security division have done a great job dealing with the department of labor, dealing with decreasing our debt by a billion dollars and all the UI changes that we've sent over after serving on the administrative procedure oversight this term I'd like to give...so all this amendment does is extend it from the fourteen to two thousand fifteen to do those rules. SPEAKER CHANGES: Further discussion further debate. The question before the committee is the adoption of ARO seventy seven sent forth by Representative Jordan so many of us favor the adoption say aye.

The amendment is adopted. Representative Murry is recognized to send forth an amendment. ARO-79 version 1. Gentleman has the floor. [SPEAKER CHANGES] Thank You, Mr. Chairman. This adds two studies on a couple of economic development matters. These are laid to provisions in SB853 that deals with Business Court Modernization and SB648 which is the NC Commerce Protection Act of 2014. I believe these two proposals adopt statutory language which permits North Carolina Corporation to be merged into a wholly owned subsidiary without shareholder authorization and a separate vote and allowing North Carolina corporations to designate in exclusive form for shareholder disputes. Both of these ideas have merit but I believe they need more discussion and so, we’re asking the joint legislative economic development global engagement oversight committee or the EDGE committee, give them time to look at this and discuss and go into conference on these two provisions in this bill and I would move adoption of these two additional study provisions. [SPEAKER CHANGES] Further discussion, further debate. Hearing none, the question before the committee is the adoption of the amendment ARO-79 sent forth by Representative Murry. So many as favor the adoption, say Aye. Those opposed, no. The amendment is adopted. Representative Steinburg is recognized to send forth an amendment. ARO-78 version 1. The gentleman is recognized. [SPEAKER CHANGES] Thank You, Mr. Chairman. This amendment is making sure that the commissioner of insurance has the authority to set rates. His hands are currently tied. The only thing he basically can do now is raise rates and what this does is it maximizes the flexibilities for the commissioner to set rates appropriately even if those rates will be lower. [SPEAKER CHANGES] Questions for the amendment sponsor. Representative Tine. [SPEAKER CHANGES] Thank You, Mr. Chairman. I think this is a good step forward because as far as the rate making process goes, when they submit the rate the commissioner is supposed to look and see if it’s appropriate based on all the filing. Latest one is, I think, 3000 pages or 1000 pages, it’s long. But, he’s only allowed right now to say it can go up or stay the same. He can’t look at it and say, ‘well you know after looking at all this information, it needs to go down for the public’s interest’. So this would give him the authority to be able to do that and I think it’s appropriate. So, I urge the adoption. [SPEAKER CHANGES] Further discussion, further debate. Representative Robert Brawley is recognized. [SPEAKER CHANGES] I would like a better explanation from somebody exactly what this does do. In the insurance committee we’ve been looking at the rate bureau and what we do with that. Is there someone from the industry or the department that can tell me in their words what this does? [SPEAKER CHANGES] We have a gentleman from the insurance industry that was here. Ben? Are you gonna speak on this? Popkin? Alright. He’s from the department of insurance. [SPEAKER CHANGES] Yes sir, thank you Mr. Chairman. My name is Ben Popkin. I’m with the department of insurance. I have not had an opportunity to review this provision. I’d like to get a chance to look at that and comment on that at a later point, if I may. I apologize for this coming up but I have not had copies of the material that has come before us relating to this bill. [SPEAKER CHANGES] Sir, do you want to try to review it now and comment during the committee or you’re asking? [SPEAKER CHANGES] Yes sir, if I may. [SPEAKER CHANGES] Okay. For Representative Steinburg’s ?? I’m gonna displace this amendment and we’ll have the sergeant ?? give you a copy of it. Do you have access to the copy of the bill? [SPEAKER CHANGES] I do have a copy of the amendment. I do now have a copy of the underlined bill. [SPEAKER CHANGES] Okay, so new section. [SPEAKER CHANGES] It doesn’t amend anything in the bill. It just adds a new section. So you really don’t need to have it. [SPEAKER CHANGES] Okay. It’s also online. That’s displaced.

Representative Stam is recognized to send forth an amendment, AST212. [SPEAKER CHANGES] Thanks, Mr. Chairman. A lot of section one does away with commissions or boards that just haven't met at, but section 1.1k reaches into the Supreme Court, and really has no effect because under article 4 we have jurisdiction over their procedures and this actual innocence commission was set up by Chief Justice Bevway, it morphed into the Statutory Innocence Inquiry Commission, and then it's telling the new Chief Justice, we will get a new Chief Justice in August, sort of what to do or not. I just think it's unnecessary, accomplishes nothing because we don't have jurisdiction over it, and it might send a message that somehow we don't think innocence is important which, of course, I think it's extremely important. Whether they set up another study commission on that or not, who knows, but why are we doing this section. So I just move we take it out and leave that to state Supreme Court. [SPEAKER CHANGES] Representative Stevens. [SPEAKER CHANGES] Thank you, Mr. Chair. I have a little bit of a different position on it than Representative Stam does, but my understand is the actual Innocence Commission was established as a result of the request of the General Assembly and as we review this in administrative procedures oversight, we were trying to do away with obsolete boards and commissions, so all this does is recommend to them to go ahead and delete it because we recommended to them to start it to begin with. It has been replaced with another situation and it is something that is in our statutes, the recommendation, so we just are trying to remove it. Clean up things. [SPEAKER CHANGES] Further discussion, further debate? OK, we have a motion by Representative Stam, AST212, so many as favor the adoption of the amendment, signify by saying aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Opposed, no. [SPEAKER CHANGES] No. [SPEAKER CHANGES] The chair believes the ayes have it. The ayes do have it. The motion is adopted. Representative Meyer is recognized to send forth an amendment, AST203. The gentleman has the floor to explain the amendment. [SPEAKER CHANGES] Thank you, Mr. Chair. This amendment removes the language that would repeal the rights of protest petition on zoning changes. I understand that this issue has been debated at length in this chamber and that there are many feelings on what to do or not to do here. I just want to bring up a couple of points. One is that this is an issue that is currently under study from the Property Owners' Rights Study Commission which has not brought back a report to the full House, and I believe that if that committee wants to bring back a report and make recommendations, we could wait to handle this issue in 2015 with a fuller study of an independent bill. Secondly I'd like to say that although I understand that there are a small number of times where the protest of a rezoning request leads to real problems and gumming up the system there's also a very small number of times that the local council actually folds to the protest petition. Usually there's a way to work these things out and we need to leave that in place. The right of protest petition protects individual property owners and minority property owners around a zoning change in a way that is consistent with the protections in our system of government for individuals so that there is not government overreach, and so when an individual property owner buys into a property and understands the zoning that is around them, they're making an investment to the future and their ability to maintain that investment is in part protected by this, and in fact it also protects those who wish to rezone a piece of property because once they buy in and have that property rezoned appropriately, they also have the right to protest petition later should someone want to rezone the property around them. So there could be a way that we could readjust the legislation or the statutes to have a better process, but to do a full scale repeal I don't think is warranted at this time. Thank you. [SPEAKER CHANGES] Representative Martin, I understand you have a group of students here. Would you please tell the chair who you have. Please use your microphone so we can hear you. [SPEAKER CHANGES] Welcome a group of 4H students from Wilson who came up to visit us today. Thank you. [SPEAKER CHANGES] Welcome to the Regulatory Reform Committee. Further discussion, further debate on the amendment. Representative Jordan. [SPEAKER CHANGES] First of all I would suggest we vote against this amendment. Protest petitions basically allow one person to hold up an entire city's right to have a zoning decision.

Made by majority vote. But we’re not talking majority 50%+1. We’re not talking 3/5 which we do in this chamber sometimes which is 60%. We’re not even talking 2/3 which is 67%. This is ¾. This is 75%. This has done something that needs to be dealt with and taken away. It allows one holdout to hold up an entire project. Even when we hold 5% of the perimeter of a property. I would suggest we vote against this amendment. Let’s keep it the way it is in the bill. [SPEAKER CHANGES] Representative Harrison. [SPEAKER CHANGES] Thank You, Mr. Chair. I have a certain different perspective on this as the city of Greensboro for some reason was exempt from the protest petition from 1971 until 2009 when we restored that right and it’s been a very important tool for neighbors. These are just re-zoning decisions, these are not zoning decisions. These are one, as Representative Meyer mentioned, when you have you can rely on a zoning characterization of a neighborhood and then a proposal comes in to re-zone and just often, the zoning boards and boards of adjustments contain full members of industry. So, I think that this just is a tool that allows neighbors to have a voice in this debate and it’s been very important for a number of neighborhoods in Greensboro and I just encourage you to support this amendment. Thank You. [SPEAKER CHANGES] Representative Stam. [SPEAKER CHANGES] Thanks. This provision passed the house last year and just wasn’t taken up by the senate. It is not for the benefit of the property owners. This supermajority requirement inhibits the rights of property owners to seek relief from a majority of their town council. Probably the wrongest thing about the provision in line 5 is that it’s called ?? protest petitions. They can protest all they want. When it was put in the 1920s that was the only way people had to get a little handle on their neighbor’s property. But since then we have 10 reviews before a typical town council or county commissioners where they get to extort everything they want out of the person who want to change the zoning. It’s not democratic. Representative Meyer need to form a new party called the anti-democrat party because he doesn’t like majority rule. I believe that the city should be free. Let my people go free at last from the tyranny of the one or two people on the council who use their position emboldened by the protest petition to extort things out of the majority of the council. [SPEAKER CHANGES] Representative Wells. [SPEAKER CHANGES] Thank You, Mr. Chair. I have considerable experience of protest petitions. I found them thoroughly distasteful. They are unfair. They do nothing to promote good planning. It’s generally accepted that what we want to encourage, is density. But what a protest petition does is allows one neighbor to say ‘Yes, I want density. I just don’t want it in my backyard. Put it somewhere else in the city’ and that’s how it works. It’s a way for local elected officials to sidestep a decision because we don’t just allow a clear majority. If we’re going to go along the principle that allows supermajorities, I think we should expand it into tax increases including those involving property tax re-assessments. That could get real interesting. As Representative Stam says, this is just not fair. This is anti-democratic. We’ve got to put this to bed once and for all. [SPEAKER CHANGES] Is the gentleman offering such an amendment? Representative Avila. [SPEAKER CHANGES] If I may, I’d like to direct a question to Representative Wells. In a situation where we have repealed the protest petition, what would be the recourse to people in the future with objections? Representative Wells? At a local re-zoning here, there has, in my experience, been virtually unlimited time allowed for opponents to the rezoning. Repealing the protest petition is not an attempt to silence any opponents. They have plenty of time to solicit support from neighbors, from people across the city, the county council members and zoning board people. We actually do this through a 2 step process in most.

In municipalities, there’s a planning board hearing to make a recommendation to the council and then there’s a council hearing. So we go through two hearing councils already. Everybody has time to be heard at both of those hearings. So if the majority of that community feels like this is a bad thing, that a particular re-zoning is a bad thing to do, they can make their voices, they’ve got weeks if not months to make their voices heard. This is not something that’s being rushed through or being pushed through in a big hurry. Everybody in the community has a voice. And it is heard. [SPEAKER CHANGES] Is there follow up? Did you want to debate the bill? Representative Insko. [SPEAKER CHANGES] Thank you, Mr. Chairman. I would just point out that there’s been a considerable debate on this issue. It’s in a study bill, it’s being studied. It is not a slam dunk amendment. And we need to let that study committee complete its work and this is an issue, this is a major policy issue that is controversial and I think it’s inappropriate for us to deal with it today in this committee, when we are trying to move this bill through so I hope that you would vote for the amendment. [SPEAKER CHANGES] Representative Baumgartner. [SPEAKER CHANGES] Thank you Mr. Chairman. I would ask that you vote against this amendment. This protest petition is a problem. It’s been a problem in my district. It allows a few not in my backyard people to control a whole lot of other people and we need to have some reform in this area and I would ask that you vote against this amendment. [SPEAKER CHANGES] Representative Adams. [SPEAKER CHANGES] Thank you Mr. Chair. I just wanted to offer my support for the amendment. We have had a number of issues in our town and we talk about democracy the people do have a right to be heard. They have a right to protest. It is a good amendment and I hope you will support it. [SPEAKER CHANGES] Further discussion, further debate. Question before the committee is the adoption of the amendment AST-203 sent forth by Representative Meyers. As many as favor the adoption say aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Opposed no. Decision of the chair, the nos have it. The amendment is defeated. I have a second amendment on protest petitions. I don’t have the name. This would be AST-205, amend protest petitions. [SPEAKER CHANGES] That’s mine. [SPEAKER CHANGES] Representative Harrison. Representative Harrison is recognized to send forth an amendment. [SPEAKER CHANGES] Thank you Mr. Chair. I wanted to offer a compromise on this important protest petition. I believe Representative Insko and Representative Meyer made a very good point that this a very substantive policy. The decision we’re making is part of a regulatory reform bill and my preference is that we not be doing it in this vehicle. But in the interest of compromise, I am offering to raise the threshold of the neighbors that need to participate in order to file a proper protest petition and that would be raising it from 20% of the neighbors to 33%, so one third. And then raising the 5% on the closer 100 foot wide buffer extension to 15% so this raises it to a larger percentage of the neighbors that need to participate in this protest petition in order to reach the necessary threshold. I just repeat that this has been a really important opportunity for citizens of Greensburg to protest, usually these are commercial developments that are going into residential neighborhoods. And I would urge the committee’s support. Thank you. [SPEAKER CHANGES] Representative Millis. [SPEAKER CHANGES] Thank you, Mr. Chair. I’d just like to take this time to encourage members to defeat this amendment. I know this has been ?? articulately by Representative Harris that this is a compromise. But in regard to representation of the constituents that we have the privilege to represent, if you actually stand for private property rights, not only for the individual who’s actually standing before the planning board or the actual zoning board or the actual town council, but also for those who are adjacent property owners as well, that we’re actually talking about. I just want to make sure we understand what’s going on here. Even if there is a commercial development that goes within the area that’s abut residential neighborhoods, there are still building setbacks that are enforced. There are still perimeter buffers that are enforced. The actual adjacent property owner has the due recourse in regard to making sure that their development is not necessary, or their actual private property is not negatively impacted by the very

Zoning regulations and planning regulations that this body gives the authority to local governments. This is about an imbalance in voice. This does not actually repeal anybody, it’s already been said, from being able to have a voice. It just basically takes care of the imbalance. While this appears as it is a compromise, it misses the whole entire policy argument, and I would encourage you to vote down this amendment. [SPEAKER CHANGES] Representative Adams. [SPEAKER CHANGES] Thank you, Mr. Chair. I wanted to offer my support for the amendment. It is a compromise, that’s what we do down here. I think we need to consider the neighborhoods and the people who have concerns. It has been a contentious issue. It’s one that our communities in Guilford County and Greensboro concerned about it. I would ask that you support the amendment. It does appear to be reasonable. She has increased the percentages, and I think we need to consider it and support the amendment. [SPEAKER CHANGES] Representative Stam. [SPEAKER CHANGES] I would request that Representative Harrison amend her amendment to say if there’s a protest petition that it only requires a majority vote to pass. Oh, that will be the affect anyway, of defeating the amendment. But please defeat it. [SPEAKER CHANGES] Representative Wells. [SPEAKER CHANGES] It is a fact of the human psyche that when you buy a house, a subdivision, and you’ve got a 20 acre field sitting vacant behind your house, over time you come to expect that that field is yours, and you have the right to see it remain vacant. That’s what we’re really dealing with. When people get used to having the open space behind them that they don’t have to maintain, pay taxes on or pay insurance on, they think it should continue as long as they’re there. So it’s a real shock when somebody wants to come in and do something. And this isn’t a matter of commercial development, this is a matter of good planning. You can pull out the protest petition weapon, and it’s a nuclear weapon, you can pull that out despite having full endorsement of the city planners. The folks that are charged with making decisions on what is the right thing to do, and where is the right thing to do it. A professional staff that is under the direction of a manager and a council, is making a decision. Those folks are under some political pressure to do the right thing, but they also have a professional obligation to do the right thing for their city. So pulling out a protest petition, requiring an anti-democratic super majority vote on a city council that’s had the blessing of a trained professional staff, that has laid out a plan for an entire city on where things should go and how they should go, is just not the right thing to do. We should not be doing this. Even as a compromise, this is not a good amendment. [SPEAKER CHANGES] Representative Insko. [SPEAKER CHANGES] Thank you Mr. Chairman. I would just point out that some protest petitions succeed. New information is brought in. If they were that bad, they would never succeed. The other thing is the reason they succeed is that sometimes there is actually a taking in the process, if you have a change in the neighborhood that’s substantial, it can reduce the value of the property. And I think a person has a right to have a protest petition in order to protect their property rights. So please support the amendment. [SPEAKER CHANGES] Further discussion, further debate. Representative Hall, Larry Hall. [SPEAKER CHANGES] Thank you Mr. Chairman. I want to speak in support of this amendment. I want to make just a couple of observations and I appreciate Representative Wells’ experiences and those were of course in situations where protest petitions existed and so the citizens’ individual property rights were protected and they were able to come forward and ask that accommodations be made based on the fact they were in most of every instance they first and also had a recognized use that they were enjoying. The other issue is what a staff advises the elected officials to do. Of course, the elected officials are supposed to be representing the citizens who are individual property owners and their rights because advisors provide options, should not [PAUSE] go wanting because a staff provides an option. The elected officials still have that responsibility to the local citizens who are voting for them and should have

some consideration of their desires. This amendment does increase the number of individual property owners who have to be involved in this and I think that we certainly claim that we're in favor of individual property rights and individual property owners and their ability to preserve what they paid for. In many instances the reason the area is attractive is because of their efforts and so they should have some ability to defend or preserve or have some input on how their community looks going forward. So I'd ask that you support the amendment. [SPEAKER CHANGES] Representative BumGardner. [SPEAKER CHANGES] Thank you, Mr. Chairman. I would ask that you vote against this amendment. There's one individual property owner that nobody's mentioned here and that's the person that owns the property they're wanting to develop. They get to sit back and watch the people that live in the neighborhood down the road say, "you can't do that, that's going to hurt our property value," and so then they get the zoning board and their protest petition out and they put a stop to it and keep them from developing their property and doing what they want to do with their individual property. And I ask you to vote against this amendment. Thank you. [SPEAKER CHANGES] Representative Jordan. [SPEAKER CHANGES] Thank you, Mr. Chairman. I'll be brief. To paraphrase Representative Harrison's quotes on the floor about the environmental amends bill, this amendment's much better than the previous one but it's still bad and we should vote it down. [SPEAKER CHANGES] Further discussion, further debate? The question before the committee is the adoption of the amendment AST-205 sent forth by Representative Harrison. So many as favor the adoption of the amendment say aye. Opposed no. The amendment is defeated. Representative Hager is recognized to send forth an amendment ARO-76-version 1 in section 320, the gentleman is recognized, has the floor. Excuse me. [SPEAKER CHANGES] Mr. Chairman, could you tell me which one that is again, I apologize. [SPEAKER CHANGES] Motor vehicle that is owned, exclusively operated by non-profit. [SPEAKER CHANGES] Thank you, Mr. Chairman. This amendment would allow charter schools, which are again public schools, to run a permanent plate on their school buses. Very simple, very non-controversial amendment. [SPEAKER CHANGES] Further discussion, further debate? So many as favor the adoption of the amendment ARO-76-Version 1 sent forth by Representative Hager say aye. Opposed no. The motion carries. Representative Whitmire is recognized to send forth an amendment, AST-204-Version 1. [SPEAKER CHANGES] Thank you, Mr. Chair. This is technical in nature. It just simply clarifies that item we passed last year unanimously in the House and the Senate. It just technical and clarifying in nature, if there are any questions I'll be glad to answer them. [SPEAKER CHANGES] Okay, good. Further discussion, further debate? Hearing none. The motion before the committee is the adoption of the amendment AST-204 sent forth by Representative Whitmire. So many as favor the adoption say aye. Opposed no. The amendment is adopted. Representative Speciale is recognized to send forth an amendment, ARO-74, permit cosmetologists to use barber poles and the designation barber. The gentleman has the floor. [SPEAKER CHANGES] I'm hearing that some people don't have it. [SPEAKER CHANGES] We don't have it. [SPEAKER CHANGES] Okay, I- [SPEAKER CHANGES] This is a, intended to be a short-term fix for something that we're going to probably need to look at when we come back next year. Cosmetology, cosmetologists, since 1990, have had the same training, plus more, that barber's have. They're taught to shave, they're taught to cut men's hair, women's hair. They go through all the same stuff. Some of them have opened their shops and call themselves barber shops or barber and hairstylist or whatever and this has been going on for years. Well, for some reason now, the Barber Board, which is a separate board from the Cosmetologists' Board, has been going in a fining shops that have cosmetologists that are calling themselves barbers or barber shops and we're talking about $1,000 or $2,000. And this is a debate that's been debated before, as far as I know, over the years about whether or not they have authority over the

... cosmetologists. It’s a recurring issue. Cosmetologists are having to battle this out with the Barber Board, so in order to resolve this temporarily until we come back next session and look at possibly combining both board, it’s going to allow them to do what they’ve been doing and keep the Barber Board out of the cosmetology shops. There’s instances where cosmetologists are working in the barbershops, no problem. They’re considered barbers just like barbers are until they open their own business and they’re not licensed by the barbers; they’re licensed by the Cosmetology Board. So it’s just a… appears to me to be a power issue, so it’s to keep these folks from getting fined or having to battle it out with the barbershops. This seems to allow them to do what they’re doing until we as a General Assembly can battle this thing out and figure out if we want to just combine the boards and let them regulate all of them or not, and I ask for your support on this. [SPEAKER CHANGES] Representative Presnell. [SPEAKER CHANGES] Thank you, Mr. Chairman. The barber’s pole is the oldest, most distinguished mark of any profession, dating back before Christ. The arts of hair and beard-trimming, medicine, dentistry and surgery were all performed by the same operators in early history. Barbers were once called barber surgeons and due to their services rendered, especially to royalty, they were the most respected and protected of men. Barbers poles and the word “barber” need to remain with barbers; not cosmetologists. I ask that you vote no on the amendment. [SPEAKER CHANGES] Representative Speciale. [SPEAKER CHANGES] I‘m not advocating that the dentists and the rest of them get the use of the barber poles; however, cosmetologists, they are in fact barbers just like barbers are. They’re trained to shave, they’re trained to do the hair; they do all the stuff they do in a barbershop, so to allow them to utilize it – and to be honest with you, the barber poles have been in existence for thousands of years, and for the barber organization to say that someone can’t use it, if I want to put one outside my house, I should have the authority to do that. They don’t own that. It’s not trademarked, and let’s let these cosmetologists do their job and work and make money and build this state. [SPEAKER CHANGES] Would the gentleman accept a question from the Chair? Being as someone who finds himself very uncomfortable in… I think cosmetology shops is also sometimes called beauty parlors, and one of the things that I like about the barber pole is the fact that when I go into an establishment with a barber pole, I expect to see a calendar with dogs smoking cigars and playing poker, ESPN on the television, and a bunch of guys talking hunting and fishing. Will you guarantee me that I will not have an unwelcome ambience at a cosmetology salon, sir? [SPEAKER CHANGES] A lot of times I get my hair cut by the cosmetologists and they do an excellent job. [SPEAKER CHANGES] Further discussion? Representative Faircloth. [SPEAKER CHANGES] Thank you, Mr. Chairman. Question for the sponsor of the amendment. [SPEAKER CHANGES] Representative Speciale, do you yield? [SPEAKER CHANGES] I yield. [SPEAKER CHANGES] Thank you, Representative Speciale. Is there anything, if someone gets their training and decides, and they are generally, in most cases I suspect, a cosmetologist is a female – may not be in all cases, but if they’re female and they decide to go into this haircutting business and they decide they want a barber pole, can they take the training and register as a barber? [SPEAKER CHANGES] Well certainly they can, but the situation that we have right now is that there’s nothing prohibiting them from using that barber pole, there’s nothing in writing, and the barber regulations, the cosmetologists are exempted from those requirements, so now it just becomes an issue of which inspector or whoever they’re sending out from the Barber Board, what his opinion is as to whether they should or should not be able to use that, so we’re trying to resolve this temporarily until we come up with a better solution, until we’ve got the time to look at this closer and possibly like I said combine the boards and kill some redundancy. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Representative Cunningham. [SPEAKER CHANGES] Thank you, Mr. Chair. I understand what Representative Speciale is saying. Now we have combined shops. When you go…

To the salon, there may also be a barber. So you have two regulatory boards coming in doing an assessment of that facility. So in order for a cosmetologist to have the barber stand, they cannot have the sign. They can have a sign that you can put in the window. You cannot have the pole. But if it is a barber shop, they can have the pole. So it is a little confusion between how many people need to come in and regulate that industry. So I support Representative Speciale’s idea of how we need to correct that issue. Thank you. [SPEAKER CHANGES] Further discussion, further debate. The motion before the committee is the adoption of the amendment ARO-74 version 1 by Representative Speciale. As many as favor the adoption of the amendment say aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Those opposed no. [SPEAKER CHANGES] No. [SPEAKER CHANGES] The decision of the chair, nos have it. Representative Stam is recognized to send forth an amendment. ARN-41. The gentleman is recognized. [SPEAKER CHANGES] One more on protest petitions but this one has no substantive effect. It’s just putting the accurate title in the bill. In other words, we’re not, people can still file protest petitions all day long, jump up and down, talk to their counselors. All you’re repealing is the super majority effect of a protest petition. So we’re just accurately describing what we’re actually doing here. [SPEAKER CHANGES] Further discussion, further debate. As many as favor the adoption of the amendment ARN-41 sent forth by Representative Stam, signify by saying aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Opposed no. The amendment passes. Representative Brian Brown is recognized to send forth an amendment ASTf-201 version 1. [SPEAKER CHANGES] Thank you, Mr. Chairman. If we could temporarily displace this amendment, that’d be great. [SPEAKER CHANGES] Representative Steinberg, have you worked out your amendment with the department of insurance? [SPEAKER CHANGES] Five minutes. Have I got five minutes? [SPEAKER CHANGES] Well here’s the situation. We have two amendments pending. One is Representative Steinberg’s and the other is Representative Brian Brown’s so we are going to start the debate on the bill as amended. [SPEAKER CHANGES] Mr. Chair? [SPEAKER CHANGES] I’m sorry. Representative Stevens. [SPEAKER CHANGES] I’m looking at an amendment from Representative Hager. Has that been withdrawn? [SPEAKER CHANGES] Is this what you’re referring to ARO-75 version 1. [SPEAKER CHANGES] Yes. [SPEAKER CHANGES] Yes, he has agreed to displace that. [SPEAKER CHANGES] Mr. Chair. [SPEAKER CHANGES] Representative Jones. [SPEAKER CHANGES] Brief question of privilege if I may. I just wanted to find out if there were any other 4-Hers that were still in the room. I think we may have some others visiting including my home county in the back, but I don’t know if they’re still here. If anybody’s still here, I’d ask for them to stand. Perhaps they’ve left, but I do want to acknowledge them. Thank you, Representative. [SPEAKER CHANGES] Thank you, Representative. If anybody has youth groups appear, if you’ll make the Chair aware of it, or someone else does, we’ll definitely recognize them. I really like to see kids coming up, seeing how this really works. There was someone else that was seeking recognition. [SPEAKER CHANGES] Representative Dobson. [SPEAKER CHANGES] Thank you, Mr. Chairman. Just at the appropriate time I do have a couple questions on the bill itself, whenever you’re. [SPEAKER CHANGES] This would be the appropriate time. Go ahead sir. [SPEAKER CHANGES] Thank you. Representative Murray on page 12 it talks about the ADA requirements for private pools. Can you just, for my own lack of understanding, can you elaborate a little bit on that? [SPEAKER CHANGES] Certainly. So there is a conflict in the North Carolina building code on whether an HOA pool is a public place. That issue is clearly addressed in the Americans with Disabilities act. So we are making sure the North Carolina building code when it speaks toward public places and the ADA requirements, that it’s whatever North Carolina’s interpretation is are going to be consistent with the Americans with Disabilities act. And just make sure that HOA pools fit appropriately under the definition of whether it’s a public place or not, should be a decision of the American with Disabilities act, not the North Carolina building code. It’s a seek to clarify that issue. That’s the issue that’s being addressed. [SPEAKER CHANGES] One quick follow up

Follow up. [SPEAKER CHANGES] So we’re not adding any new regulations to private pools in this. [SPEAKER CHANGES] That is correct and that’s the issue you’ve just, you’re jumping up and down right on the issue. The issue is that it is unclear where there’s certain HOAs based on the size of the neighborhood, as a public place or whatever. And so we wanted to make sure that the appropriate definition for a public place for basically pools and the homeowners association is appropriately defined and consistent with the Americans with Disabilities Act which controls how public places and people with disabilities have access to public places. [SPEAKER CHANGES] Thank you Mr. Chairman and Representative Murray. [SPEAKER CHANGES] Thank you. Representative Insko. [SPEAKER CHANGES] Thank you, Mr. Chairman and Representative Murray. On page 15 it’s the differential treatment of fraternities and sororities. I just want to make sure I understand that. On line 35, I believe that you mentioned that, I believe you said that if fraternities or sororities were seeking approval, they had one year to do that, and I’m reading here three, so. [SPEAKER CHANGES] So what we’re doing here, there’s three provisions here. There’s the ordinance, so we’re talking about zoning ordinances, fraternities and sororities. For a fraternity or sorority that was suspended or not recognized, they have at least two years to reestablish approval recognition. The ordinance must give a fraternity or sorority, I’m sorry I did misspeak. Seeking approval, at least three years to seek, to attain approval. And the ordinance must require that property cannot be occupied successfully by a fraternity or sority seeking to establish, reestablish approval or recognition and a fraternity or sorority seeking approval or recognition or vice versa. So it’s three years. I did misspeak. I did misspeak. [SPEAKER CHANGES] I actually, [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] Follow up. So I want to make sure I understand number three. As I read number three, the purpose of that is to prevent a fraternity or sorority that has lost their license, to have two years to try to get reestablished, and then to switch to a different fraternity and become, and take three years to get established as that new organization. [SPEAKER CHANGES] That’s my understanding. It forbids you from being able to double dip. I think that’s, if you didn’t get reestablished in two years, then you can’t just change your name and try to be a new fraternity and get three years. Now that’s exactly the issue we’re trying to address. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Representative Horne is recognized. [SPEAKER CHANGES] I think my question has been answered but just in case it hasn’t, I want absolute clarity on the swimming pool ADA issue. When we use the word private, and I understand that it can be a private community but it could be a private home. And is that clear in this change, that it is a HOA or that type of private, versus a private home? [SPEAKER CHANGES] It’s more clear in the American with Disabilities Acts than it is with the North Carolina building code. And so that’s the change. And I will defer it to staff for additional clarification and Amy Jo Johnson on staff was working on this particular provision. [SPEAKER CHANGES] Thank you Representative Murray. Yes, with regards to the issue of the private pools, this is specific to the HOA pools that would be governed by the building code. So although it does not say it here because of the portion of the building code that’s being referenced, that’s talking about the HOA pools which are not necessarily public, they’re not necessarily private, it depends on the ADA and telling the building code council to clarify that so that only the HOA pools that would be considered public under the ADA are in fact considered public under the building code as well. [SPEAKER CHANGES] Follow up. Representative Robert Brawley. [SPEAKER CHANGES] I’d ask a question on section 3.6. [SPEAKER CHANGES] Or the questions to section 3.6 to the department of insurance on the repeal of obsolete statutes and I would ask that folks from the department of insurance that wanted to have these obsolete statutes repealed be able to address any questions regarding that section if that’s okay.

Ben, would you like to address that, or... [SPEAKER CHANGES] Alright, yeah. [SPEAKER CHANGES] I'm Rose Vaughn Williams, legislative counsel for the Department of Insurance, and I'm sorry, I did not hear the question. I apologize. [SPEAKER CHANGES] I didn't recognize- [SPEAKER CHANGES] [??] didn't ask it yet. [SPEAKER CHANGES] Okay, thank you. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] That's why. [SPEAKER CHANGES] Ms. Williams, going through this, all of these sections repeal as best I can tell effeciency reports, quality of care, accountability, and effectiveness. But if I read correctly in some of the other provisions, one of the reasons that they're being repealed is that they're included in other legislation. Am I doing that correct- [SPEAKER CHANGES] Right. Well, yes sir. Thank you Rep. Brawley. By other statutes already in place, we get some of the information that we already need, do you want me to summarize them? All the ones? [SPEAKER CHANGES] No ma'am. But on section 3.6d, that one I did not find, and it's a requirement that false information be reported. Do we still require anyone filing a false claim, or false information or fraudlent insurance to report it to somebody? [SPEAKER CHANGES] Yes sir. Rep. Brawley, I'm sorry, I don't have the provision in front of me and I don't know that the full statute would help me either but the ones, the number of the reports, one of them is a reportable required by law, it ended up the law didn't pass, but the report provision on the effect of the new law has stayed in there since the 80s, one of them is on motorcycles that was passed in the 80s, on the availablity of motorcycle insurance and we've been sending that in the general assembly and we decided it's plentiful these days, let's get rid of that, one of them is an HMOs, I think we used to have twenty-some, and now there are five, it took us full time employees to process and consolidate all that data that's not needed that we have available in other ways, it was taking the companies a whole lot of effort and work to get that information to us. One of the- and now I'm going blank. But those are the reports. So I think we are most careful to be sure we don't miss something. I don't think we would have proposed it if we did that I'll just say. [SPEAKER CHANGES] I thank you. I just want to be sure that we're getting that information, because it looked like good information. [SPEAKER CHANGES] Right. Believe me, we will absolutely continue to get what they need for the market conduct exams. Thank you. [SPEAKER CHANGES] Rep. Brody. [SPEAKER CHANGES] Thank you, Mr. Chairman. Rep. Murry, I want to get back to the pool thing again. Forgive me, but please let me know if I'm reading more into this than is necessary, but I don't understand the ADA requirements so when I don't follow them completely my imagination begins to wander and I begin to picture scenarios, and one of those scenarios is that generally, if you remodel, do something, remodel, then you become subject to whatever the current legislation is, and in particular in the pools, like private pools or HOA pools, I envision the new ADA regulation to have the pool have zero entry versus a step and all those things. Am I going too far in that, or do we face actually the possibility of having those stricter regulations? [SPEAKER CHANGES] My understanding is that the ADA definition of a public place would actually be a benefit in the situation that you just described. First is the existing North Carolina building code. That's my understanding, and I will defer to staff again, but that's my understanding, to further clarify my understanding. [SPEAKER CHANGES] Yes, Rep. Brody, you are correct that typically when there is some new build or renovation done to a public pool, they would have to adhere to the more updated standards of the ADA, particularly in 2010. The issue here is that HOA pools, though typically thought of as private, under the ADA, some are private and some are public, it depends on what the HOA pool is functioning as. If it is strictly only for the individuals in the HOA, they don't host meets, things like that, then it would definitely be a private pool. Under the federal regulations however, an HOA pool can be public if it engages in certain activities. This is just (recording ends)

...telling the building code folks when you're looking at whether the HOA pool needs to do the upgrades or not, to consider, whether under the ADA, is it actually a private pool and, thus, does not need to do those upgrades? [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] I guess, if an HOA then wants to be extra careful and not potentially to be subject to those rules that they really need to watch what events or things that they do and basically keep it private, would that be correct? [SPEAKER CHANGES] That would be correct. [SPEAKER CHANGES] What constitutes the definition of a public place under the definition of pools is the level of activity that occurs in that pool. I think that's part of the clarification that's necessary for this to help make sure that we don't unnecessary restrictions on HOA pools. [SPEAKER CHANGES] Representative Lucas. [SPEAKER CHANGES] Thank you, Ms. Julia. My curiosity was peaked by the questions raised by Representative Robert Brawley in Section 3.6. I was of the impression, and correct me if I have misunderstood that, that that entire section with the provisions of the bill would suggest that this whole section in the study. [SPEAKER CHANGES] Representative Murry, do you wish to respond? [SPEAKER CHANGES] I believe that's a straight up repeal of certain statutes and reporting requirements in the Department of Insurance. In Section 3.6, those aren't study. That it is a straight up repeal of general statutes as recommended by the Department of Insurance. [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] A quick follow-up. Then, I suppose that would be taken care of then, if it’s revealed. Is that correct? [SPEAKER CHANGES] You're exactly correct. [SPEAKER CHANGES] Representative Brian Brown is recognized to send forth an amendment, ASTself 201, Version 1. [SPEAKER CHANGES] Thank you, Mr. Chairman. [SPEAKER CHANGES] And I thank you. I tell you what, let me go ahead and recognize you to send forth your perfecting amendment, which is ARN-42, Version 1, and you can explain both the perfecting amendment and the main amendment at the same time. Gentleman has the floor. [SPEAKER CHANGES] Thank you, Mr. Chairman. What you have before you, members, is the exact language that was in House Bill 680, which this body based on last session by a vote count of 103 to 1. I'll explain the entirety of the actual language in the perfecting amendment, as the Chairman said, together. Kind of the brief overview, 30,000 foot view of the actual language of the bill, this actually provides this state with regulatory guidance as it pertains to what has already been passed by the Federal Government and the Jobs Act allowing for equity crowd funding. If you're not familiar with that, I'll give you a quick overview of that. A lot of you are probably familiar with websites like Kickstarter, and those types of websites, where arts projects, businesses and things are able to raise capital from their friends and families for exchange for things like backstage passes, autographed photographs, and so on. I can tell you that no one wants an autographed photo of me standing in front of my business in exchange for any capital. What equity crowd funding does is it allows businesses to be able to receive small amounts of money from a large group of people to help with start-up, capital investments and growth. What the bill actually does is it does place some regulatory guidance as it pertains to equity crowd funding in the State of North Carolina. It provides the guidance that the business has to be registered with the Secretary of State and allowed to be able to do business within the State of North Carolina and can only receive funds from individuals who reside within the State of North Carolina. It also provides some caps for the amount of money that is raised and the amount of money that can be contributed from each individual purchaser of the issuance of the stock that is being served by the issuer. Essentially, any company that has not went through a full financial audit within the last 12 months and not disclosed that to the administrator, as well as any potential purchaser, can only raise a million dollars. Any company that has actually went through a full financial audit and has disclosed that to the purchaser and administrator can raise up to two million dollars. However, there can not be any more than $2,000 raised from any individual purchaser. A lot of disclosures have to be given, the type of company that you are, a full business brand, including the amount of money that you are seeking to raise. That amount of money will then be raised. Every dollar that comes in for this raise will go into an escrow account and will not be able to be issued to the issuer until that amount of money has been raised.

or exceeded as determined by the business plan. Also, identities of any investor, of any owners of a company that own more than 10%, identity of the Board of Directors, names of anyone assisting in the offering, any legal procedures or litigation that's associated with the issuing company, and also must have the purchaser submit in writing that they understand that the business is speculative and any investment in the business could provide in any losses. The perfecting amendment does amend page 6, lines 38 to 42 by eliminating the fee. With that, I will yield for any potential questions. [SPEAKER CHANGES] Representative Jordan. [SPEAKER CHANGES] Thank you, Mr. Chairman. Question for the bill, amendment sponsor. [SPEAKER CHANGES] Sure. [SPEAKER CHANGES] Could you discuss a little further on escrow agreement? My ears perked up, as an attorney, and also realtors have escrow agreements. Could you please discuss that because, I know as an attorney, if I have an escrow, funds in escrow and do something wrong with them my license can be taken. What, how is this escrow money protected in these escrow accounts? [SPEAKER CHANGES] It is over, it does have an overview from the administrator and it could be audited at any time to make sure that any funds that are raised, number one, is coming from North Carolina citizens, to ensure that that is in fact the case and to make sure that any monies that have been pledged is actually in there. The safeguard of not allowing the money to actually be dispersed to the issuer until the full raise is made is simply because, if you look at the business plan, they're asking for a particular amount of money in subject to capital improvements, start-up funds, whatever the case is. So if anything is raised less than that it would be reasonable to believe that anything else contained in the business plan would probably not be achieved also. So it just holds that money in the escrow accounts up until that fund is actually fully raised or exceeded that amount. [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] Yes sir, thank you. [SPEAKER CHANGES] Can you direct me to the definition of administrator and also tell me what sanction there would be on an administrator who misappropriated funds from an escrow account. [SPEAKER CHANGES] If I could, I'd actually like to defer that to staff. If that's okay. [SPEAKER CHANGES] The administrator is actually the head of the Securities Division in the Office of Secretary of State. [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] Has the Office of the Secretary of State been contacted to see if they will undertake these additional duties? [SPEAKER CHANGES] Representative Jordan, this is actually the identical bill that we passed under Representative Murry's sponsorship. The perfecting amendment just removes the fee, so this doesn't, the whole bill doesn't have to take a dip in Finance. [SPEAKER CHANGES] Right. [SPEAKER CHANGES] So- [SPEAKER CHANGES] I apologize, these are questions I should have asked at that point, at that time. [SPEAKER CHANGES] That's quite alright, sir, I just would, but please if you have more continue. [SPEAKER CHANGES] Okay. [SPEAKER CHANGES] Dave Massey with the Security, the Secretary of State's Office and the Securities Division was heavily involved in the development of this legislation and I would expect a fee, at some point, to support the operations that we're talking about here but in order for Representative Bryan's amendment to move forward and this bill to move forward we're going to defer the fee conversation until a later date but the sum and substance of this bill has thoroughly vetted with the North Carolina Bar Association's Security, Securities Bar, the Securities Division of the North Carolina Secretary of State's Office, and it's endorsed by the North Carolina Technology Association and various other start-up groups. So I think, my expectation is the Senate will eventually take this up, depending on how long we're here. It's in the queue, from what I understand, but we just wanted to belt-and-suspenders this issue because it's important for our small business start-ups and I thank Representative Brown for bringing forth this amendment. [SPEAKER CHANGES] Representative Susan Martin. [SPEAKER CHANGES] Thank you, Mr. Chair, and I also appreciate Representative Brown and Representative Murry bringing this forward. I was just wondering, because there is a lot of detail in here, if staff could make available the bill summary that we had, it's been a while since we looked at that. Maybe when we go to the dashboard and we have the full bill that we could add that summary to this component because it has a lot of detail and I'd like to be refreshed. Thank you. [SPEAKER CHANGES] Staff has accepted that direction have assented. Representative, did you have a follow-up, Representative Martin? Representative Queen. [SPEAKER CHANGES] Yes, I appreciate efforts to bring this forward, it is a very important entrepreneurial tool for, why are the investors limited to North Carolinians? It seems like the World Wide Web is as just exactly that and you would want to allow North Carolina companies to solicit investors from around the world, so- [SPEAKER CHANGES] Representative Murry?

[SPEAKER CHANGES] Thank you for the question. We would love for that to be the case. However, it does have to follow federal exemption for intra-state transactions in Section 3A11 of the securities act of 1933, as well as some other federal provisions that are only limited to intra-state activity. [SPEAKER CHANGES] Hopefully when the Securities Exchange Commission finishes their work, and listens to the startup community, that we will have a national platform to allow for multi-state offerings, but at this point, the only exemption that North Carolina can offer to the Securities and Brokers Registration requirements is specific to North Carolina companies, raising funds from North Carolina individuals. And so that’s our limitation. We still think it’ll have an impact though. We still think it’ll have a great impact. [SPEAKER CHANGES] Follow-up? Further discussion for the debate? Okay, we’ve got, first, the question before the committee is the adoption of the Perfecting Amendment, ARO80-Version 1, send forth by our—Excuse me, wrong… Made it all the way to the end – The Perfecting Amendment, ARN42 Version 1, by Representative Brown to amend the amendments, so many as favor the Perfecting Amendment, say Aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Opposed, no? The question before the House—Excuse me, the question before the Committee is ASTf201 Version 1 as amended, sent forth by Representative Brown. So many as favor the adoption of the amendment, say Aye? [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] All opposed, no? The amendment is adopted. So we now have Representative Steinburg is recognized to withdraw ARO78- Version 1, and send forth a new amendment. ARO80- Version 1. [SPEAKER CHANGES] Yes, Mr. Chairman. Thank you. That is exactly what I will be doing. We will be withdrawing the amendment and substituting another, and the substitution amendment will be to establish a legislative research commission, to study whether the commissioner insurance should be given the expanded authorities that the amendment that we’re pulling would have given him. So this will be a joint legislative study commission [elersy?] that I am proposing in this amendment for your consideration. Thank you. [SPEAKER CHANGES] Representative Tine. [SPEAKER CHANGES] Thank you, Mr. Chairman. Well, I think that this issue is about fairness and for the people in the state in regards to setting rates, which is what the commissioner is charged to do. One thing that Representative Dockham was kind enough to teach me before he left was, the number one way to create unintended consequences is through an insurance bill, so I would support this amendment to create a little more research on it and a little more study. [SPEAKER CHANGES] Representative Robert Brawley. [SPEAKER CHANGES] To speak on the amendment? [SPEAKER CHANGES] Gentleman is recognized. [SPEAKER CHANGES] Thank you, Mr. Chairman. I would like to thank Representative Steinburg for working with us on this issue, because this rate structure affects 9 million automobiles, vehicles in North Carolina, and I do think it needs to be studied a little bit, and this is the fairest way to do it. And I do appreciate it and I do encourage support of the amendment. [SPEAKER CHANGES] Further discussion? Further debate? The question before the committee is the adoption of the amendment sent forth by Representative Steinburg, ARO80 Version 1. So many as favor the adoption, say Aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Opposed, no? The amendment is adopted. We have now completed all the amendments, so we’ll be debating the bill. [SPEAKER CHANGES] Mr. Chairman, I’d like to make a motion that we give Senate Bill 734 as amended a favorable report, unfavorable to the original bill, and authorize staff to make technical and grammatical changes as appropriate. [SPEAKER CHANGES] Rolling it into a new PCS? [SPEAKER CHANGES] Certainly. [SPEAKER CHANGES] Is there further discussion, further debate on the adoption of the bill, as amended? [SPEAKER CHANGES] Mr. Chairman. [SPEAKER CHANGES] Representative Hager. [SPEAKER CHANGES] Mr. Chairman, I was wondering, I’ve got some concerns about a section here and I don’t know if I fully understand them or not. I was wondering if it would please the Chairman to have Katy Thomas from the Realtor’s Association explain her concerns on Section 3.3. Would that be possible?

We have the time, sir. Please give your name and organization for the record. [SPEAKER CHANGES] Yes, thank you very much, Cady Thomas with the North Carolina Association of REALTORS. We do not disagree with what you're trying to do in section 3.3, however the way it's drafted we think that the actual owners of record may not receive notice but yet they are defined as the chronic violators. So we would really like to see some perfecting language to make sure that the owner of record, in fact, gets notice of the violations because in a property management or a leased situation they are not necessarily the ones in the property. So if stuff is being tagged to the door the owner of record may never get that notice from their tenant. So we would just ask for some clarification on that, please. Thank you. [SPEAKER CHANGES] Mr. Chairman. [SPEAKER CHANGES] If it pleases the committee. [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] If it pleases the committee I'll work with Miss Thomas for the floor. [SPEAKER CHANGES] Okay. [SPEAKER CHANGES] Thank you, Representative Hager, thank you to the North Carolina Realtors for bringing that to our attention. [SPEAKER CHANGES] Further discussion, further debate. The question before the committee is the adoption of the proposed committee substitute as amended for Senate Bill 734, with staff authorized to make technical corrections and grammatical corrections. All in favor say aye. Opposed no. The motion carries, the bill is adopted. Being no further business the committee is adjourned.