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House | May 15, 2013 | Committee Room | Finance

Full MP3 Audio File

Let's get this party started. I'd like to welcome you all to the House finance committee and I would like to thank our pages today. Nathan Riddle, Daniel Tally and Hannah....please pronounce your last name for me, dear. [SPEAKER CHANGES] ? [SPEAKER CHANGES] Thank you, I wouldn't have gotten there and I appreciate you being here. And I'd like to thank our Sargent at Arms, Mr. Hines. Mr. Sills. Mr. Brandon and Mr. Clampet we appreciate your continued support in this endeavor and thank you for being here. Members of the committee, your here because your obligation is to being here but we're glad to have you here as well. At this time, we will hear Representative Brody's bill, House bill 421. Marchville de-annexation. Representative Brody. [SPEAKER CHANGES] Thank you, Mister Chairman. Pretty basic bill. Marchville is very excited about this because they need to de-annex a property in order to annex...voluntarily annex another of a business that's coming into Marchville and they're seeking de-annexation that's supported by the resolution from the town of Marchville and I can go into the details if you wish. [SPEAKER CHANGES] Mister Chairman. [SPEAKER CHANGES] Representative Howard. [SPEAKER CHANGES] At the appropriate time, I believe that Representative Brody has all the proper documentation. I move for a favorable report to House bill 421. [SPEAKER CHANGES] Members of the committee, you heard the motion on the floor. Any further discussion? If not all in favor say aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] All oppose? Motion carried. Thank you Representative Brody. We're glad you’re here. [SPEAKER CHANGES] Thank you, Mister Chairman. [SPEAKER CHANGES] You're welcome to stay if you like. And we can all understand why you wouldn't want to. We'll now have House bill 857. Public contracts. [SPEAKER CHANGES] ? [SPEAKER CHANGES] Yes, sir, we do. Senator Moffitt moves to have the PCS before us for discussion purposes. All in favor say aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] All oppose. Motion carried. Thank you Representative Arp, please present your bill. [SPEAKER CHANGES] Thank you members of the committee. This is a bill that is a consensus bill. We worked on it with the North Carolina League of Municipalities, the North Carolina Association of County Commissioners, the North Carolina Chamber of Commerce, the Carolina's AGC, the subcontractors, the electrical, mechanical and plumbing association, the American Chapter of Fire Sprinklers Association, the North Carolina Institute of Minority for Economical Development, the architects, the engineers, the UNC General Administration, the governor’s office and the Department Of Administration, the state construction office, the state treasurer and the minority of interests. These are the folks that we've pulled together to have a consensus bill. What this bill does it allow three additional contracting methods available. We've had many, many bills come through here that are one off designed billed bills and even a public private partnership that’s been approved, this time. What this does is take those concepts...those contracting methods and utilize them on a state wide basis. It allows this to be used state wide. What we've done is for the infrastructural delivery options. It's for all non DOT work. So, this deals with things like procurement of facilities as well as waste water treatment plants and things of that nature. It ensures fair equitable open ethical transparent and quality based contracting procedures. It allows design build, what we call design build bridging, which is a hybrid in public and private partnerships. If there's any questions...I'd be glad to take it. [SPEAKER CHANGES] Ms. Churchill, do you have anything to add to this explanation? Alright, question is on the committee, Representative Stone. [SPEAKER CHANGES] Yes, good morning Mister Chair, I just want to let everyone know on the committee that this bill was in government and I have to really commend Representative Arp on his hard work. It came back twice. He pulled because he wanted to make it better. He went out...the governor did came out in support of it. It's a great bill and at the proper time I'd like to ? the motion. [SPEAKER CHANGES] Thank you, Representative Stone. Representative Alexander. [SPEAKER CHANGES] I want to join the stand to move this one forward. [SPEAKER CHANGES] Thank you, sir. Representative Hager. Representative Luebke. [SPEAKER CHANGES] Thank you, Mister Chairman. The question I just have, I guess, for staff. Ms. Churchill, will this bill mean that we will no longer have to have the jurisdiction by jurisdiction bill? [SPEAKER CHANGES] Ms. Churchill. [SPEAKER CHANGES] Yes, sir. [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] No, that takes care of it, I think. Saves a lot of time. Thank you. [SPEAKER CHANGES] Thank you, Representative ...

question to the sponsor[SPEAKER CHANGES] Representative Arp, yes please. [SPEAKER CHANGES] Assuming I'm the small contractor normally small contractors are left out of design bill projects, tell me why I should like this bill. [SPEAKER CHANGES] Well because we actually went back there and put in small business contracting incentives and recommendations for them to seek out small business entities we went back and did that. I'm a small business myself and that's specifically the point that we went back in and encouraged the local government entities to address that issue in their contracting methods and make sure that's a part of the team and actually the qualifications of the team to be selected. [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] So you're saying not just the members of AGC which are generally larger contractors but also smaller contractors will like this also. [SPEAKER CHANGES] We've got the buy in from both the AGC and the subcontractors as well as the architects and engineers which are even smaller groups than that as well as myself. [SPEAKER CHANGES] Thank you, Representative Holley. [SPEAKER CHANGES] Thank you Mr. Chairman I just wanted to commend the committee on a lot of hard work because I know this was hard work and it is going to be a real good basis now for the departments to be able to make purchases without having to come over like you said one at a time and piecemeal to do some work and thank you very much Representative Arp for your work on this. [SPEAKER CHANGES] Thank you Ms. Holley. [SPEAKER CHANGES] Thank you Ma'am. Representative Hamilton. [SPEAKER CHANGES] I agree with Representative Holley's comments, I'm just sort of curious can you tell me in a nutshell just how it's different from what we currently do because I know that currently we allow design bill in the state. [SPEAKER CHANGES] No we don't and that's the point. Design bill is what we call a single contract, before if a government entity let's say wanted to build a building they would contract with the architect or engineers and that group they would design the plans and give that to the entity and then the entity would then bid that out to the contractors. There's two contracts with that, this is what we call a single contract that allows the government entity to go to one other entity and contract together but what we do is put in there all the prevent all the what we call sting factor the brother in law deals, the arms length open transparent way to do that. [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] Ok thank you so much for that explanation so this would allow an architect, engineer and a builder essentially to bid on a project together. [SPEAKER CHANGES] That's correct. [SPEAKER CHANGES] Ok. [SPEAKER CHANGES] Using quality based selection and a procedure that addresses all of those concerns. [SPEAKER CHANGES] Thank you, Representative Ross. [SPEAKER CHANGES] Thank you Mr. Chairman, first question do we have a bill summary. Is there [SPEAKER CHANGES] Yes. It's on the back of the second piece yes. [SPEAKER CHANGES] I don't , we don't have it and it may be because we don't have the PCS and it may be because we were late so I appreciate that. The next question is how does this bill treat historically under utilized businesses. [SPEAKER CHANGES] Let me go back and what this bill does is doesn't change any existing law. What we did was craft these new contracting methods and part of our line is to stay within so the governmental entity has established those goals this refers to those same goals and says that you have to state that as part of your request for proposals. [SPEAKER CHANGES] Mr. Chairman. [SPEAKER CHANGES] Yes Ma'am. [SPEAKER CHANGES] I wanted to know there are some people in the audience who have traditionally had some thoughts about design build and P3 projects and I see Mr. Simpson and I see a few other folks and I'd just like to know what their view is or their views are on this bill. [SPEAKER CHANGES] Yes Ma'am. Please approach the mic and state your name for the record and answer Representative Ross's questions. [SPEAKER CHANGES] I'm Dave Simpson I'm with Carolina's AGC association of general contractors. Thank you mr. chairman, thank you Representative Arp. Representative Arp has done a magnificent job of bringing together so many people in fact he said during some of the negotiations I don't know how I can talk to anybody else. One of the things Representative Ross to answer your questions specifically that we're seeing is a spate of local bills that come out each year and there's hardly any kind of language there they can just do it local governments can this would allow for a competitive bid process a lot of sunshine and we think it's probably the best deal that you can get. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Thank you, Good Morning my name is Henry Jones I represent the mechanical plumbing and mechanical contractors

_____ in your districts, and, as you know, we've been before you many times, not supporting Design Bill, but this Bill, we think, is a much fairer approach than that death by a thousand cuts that Representative Luebke was talking about, each jurisdiction doing it separately, and we commend Representative Arp for doing this in such a fair, open fashion. Thank you. [SPEAKER CHANGES] Thank you. Representative Hall. [SPEAKER CHANGES] Thank you, Mr. Chairman, and I'm going to circle back to the question of the involvement of small businesses and how any evaluation is done to ensure that small businesses at least get what they're getting now, as far as consideration in the contracting process. Is there anything in here that improves that? [SPEAKER CHANGES] Yes, Representative Hall. What we've done is--in fact, current law doesn't have small business in there. What we've done is actually put that in there, and if you look on the last page, where it relates to the minority contracting procedures and so forth, specifically on Page 13, you see some language, the public ownership will make a good faith effort to comply with GS 143 and to recruit and select small business entity when selecting a construction manager at risk. That same language is in the Design Bill and so forth, and so it touches on both the minority contract and the small business. [SPEAKER CHANGES] Follow-up? [SPEAKER CHANGES] Follow-up. Is there anywhere in this Bill where you define what the elements of good faith are for the compliance? [SPEAKER CHANGES] That's already determined in terms of the minority business contracting, and so we didn't change any of that language. The same contracting language that exists in current law, which deals with good faith effort by governmental entities as it relates to the minority contracting, those same things still apply. [SPEAKER CHANGES] Follow-up? [SPEAKER CHANGES] Final follow-up. Thank you Mr. Chairman and Representative Arp. I appreciate you entertaining these questions. Final question. Has your research, or did any of the small business organizations come to you and indicate that they thought this improved or increased the participation of small business as opposed to our conventional way of contracting? [SPEAKER CHANGES] Early on, that was a consideration and point of contention, and we agreed that this language addressed those concerns, so much so that we went back and put it in the CM at-risk statutes, and so, being a small business owner myself, I am acutely aware of that, as well as various contractors as well. That's where the language came from. [SPEAKER CHANGES] Thank you. Any further questions from the Committee? We have a motion from Representative Stone for a favorable report for House Bill 857. _____ PCS, unfavorable _____ original Bill. Yes, sir. You've all heard the motion on the Floor. Any further questions? If not, all in favor say aye. All opposed? Motion carried. Thank you Representative Arp. [SPEAKER CHANGES] Thank you. {SPEAKER CHANGES] At this time we will have the PCS for House Bill 936. Representative Reives. Oh, Representative Faircloth. And Representative Davis moves to have the PCS for House Bill 936 before us for discussion purposes. All in favor say aye. All opposed? Motion carried. Thank you Representative Faircloth. [SPEAKER CHANGES] Thank you Mr. Chairman and members of the Committee. This is a Bill that arose out of request from hunting organizations, particularly the Bowhunters organization in North Carolina, and it also was done in coordination with Wildlife Resources Commission, and it speaks to the concept of poaching wildlife, and basically that is the taking of wildlife or the destructing of wildlife, or in some way doing illegal actions that endangers the wildlife population in our state. The legitimate hunters are very much concerned about this, as are a lot of other people, and it is a relatively simple Bill. What it does is establish in the State Treasurer a wildlife poacher reward fund, and the monies coming into the fund come from the violations paid into the court by people who violate the wildlife laws. A percentage of the compensation paid annually...

Close to the commission a special conditions and offenders probation and criminal cases involving the taking into your modem speeds up to 10:00 PM real estate on Solaris, really a surreal image of-five discussions into the compensation claim annually to the commission a special conditions are offenders probation in criminal cases involving the taking into removal damage and destruction that several of life of a wallet commission is the finest billing office development, spoke yesterday in committee and the also-Semite endorsement from the following groups?? the state day of the other sources of the fund which will play in the state treasurer, away from almost the whole match play the commission is compensation for rewards fade from the fund . (SPEAKER CHANGES) If somebody violates the law, rewards play down the fund for play bios some group to get information that persons arrested from convicted in the farthest punishment used to repay that reward fund to the go back into the fund, the proceeds of any gives grants and contributions to a study which are specifically designated for inclusion in the fund the scholars such groups have in past years established their own reward fund and 51 group of over 35,000-mesut HR 238E7 FR , like the dismay that we DL 55 to 80¢ 229367 fateful bowl record am IFSAI-Dr. Blake you will concur with P's um there was another BLM bank and cultural committee that should have been sent two ICY said they leave this PLYZ 9 SFLA was somebody else is no room for M9 formation NMS and two SMS not have to make cross over from MLB respect we had the opportunity to PCA their meal Mexican fare COL said Mr. MM if we get this table with triple in the dome Baker said, syndicate thank you, shared power for clarifying that a good one? If their opposition to U.S. Command of their culture yesterday and this game and says, that a fist and could someone be incarcerated because she couldn't pay the 30-day the fee of dollars to our request to the bill include the request under the 1950s I know I am a little in the go to jail for NBC condition and computation and IC that sound like any other restitution and I that the defendant CD requires A. Sam, have taken confirm with 550 left real step further by T5985 any other ST Chang the way down to the morals of restitution would like to thank you think if they visit these are the questions if not you are the most aggressive heart of any further discussion of their stay out of all those missing. (SPEAKER CHANGES) Laker center, died a year, state than a year by the late and 1/2 that they will have the house bill 273 first rules that say harsher edge Mr. Chair for the exhibit different from the fifth when mime was pretty cool but, in the morning everybody is so bill that passed of the education committee yesterday with the four men does refer to your server enough on your finances morning from there's basically four main provisions of this bill from one is a good father charter schools and our money for operation expenses to their cars Elias to transfer funds it from the manner it also requires only a score by details of falls recalculated three appeals restrictions: transfer submittal tax revenue else of the tax district this allows the following fall bassoon and four in the car score cost you more teaching prevailing party action concerning the transfer funds for Nellie ??.............

Through a charter, and it requires these expenses to be paid in a period not to exceed three years. Be glad to take questions. Representative Starnes? [SPEAKER CHANGES] Thank you Mr. Chairman, now I'd like to offer an amendment that's being passed out at this time. [SPEAKER CHANGES] Committee will be at ease until the amendments are out to the members. Do all members have a copy of the amendment? Representative Starnes. [SPEAKER CHANGES] Thank you. There was a law suit several years ago in which the charter schools spent years, and hundreds of thousands of dollars. They took it all the way to the Supreme Court, and they won, and this just codifies the language, putting into the law what they fought for in the courts ?? read your adoption. [SPEAKER CHANGES] Questions, comments? Representative Luebke. [SPEAKER CHANGES] Could staff explain that in particular just to how this would impact the public school units? [SPEAKER CHANGES] Kara? [SPEAKER CHANGES] I believe fiscal staff may be better able to explain. [SPEAKER CHANGES] Please. [SPEAKER CHANGES] Doubtful, but I'll try it, Mr. Chair. Brian Madison with fiscal. In response to your question, Representative Luebke, what the amendment appears to do would be to place some tighter restrictions on the funds that LEAs, or local school districts may budget for the purposes of transfer to charter schools. So you see the items that are removed here, such as the indirect costs, fees for actual costs, et cetera. Those would then be subject to the subsection 2, the local current expense fund and be required for pro rata transfer to a charter school within that district. [SPEAKER CHANGES] Follow-up. Thank you, and do we have a fiscal note in terms of what the impact would be on LEAs to shift dollars under this amendment from the traditional public schools to the charter schools? [SPEAKER CHANGES] Mr. Chair, no we don't. We had looked at this issue quite extensively back in 2011 when similar language was being considered, and we were not able to estimate a specific local transfer. If we were to do a fiscal note for this again, I don't think we'd have information available to be able to speculate as to for all of the existing charter schools, and all of those charter schools that may be coming down the road, what might be in some of these other funds. They range from anything like bake sales, newspaper sales, or student newspapers to federal appropriations that may or may not appear, and it's totally a local impact within the local public school system, it's just the share of the pie that is transferred from the traditional public school district to the public charter schools. [SPEAKER CHANGES] Follow-up. Thank you, sir. Mr. Chairman, I know I'm not able to ask for fiscal note any more but it seems to me, particularly if there already was one in 2011, that a fiscal note ought to be updated given that there is a fiscal impact on, say, the Durham Public Schools that our DPS - Durham Public Schools - will have to allocate additional monies to the charter schools within Durham county. That is a fiscal impact, and as you know Mr. Chairman, for that a fiscal note is needed. So, I don't understand how we can move forward with this bill today without a fiscal note. [SPEAKER CHANGES] Mr. Chairman. [SPEAKER CHANGES] Representative Starnes. [SPEAKER CHANGES] Thank you. Well, when they won the court case, the school systems were supposed to go ahead and start doing this, and so really your school system should already be following the law after the court case. So, going forward, I'm not aware that there's going to be any additional fiscal impact, is the way I understand it. [SPEAKER CHANGES] Representative Stam. [SPEAKER CHANGES] Yes, just for the memory of the members, this provision was in the Senate-passed "Senate bill 8" two years ago, and it was in the House-passed "Senate bill 8" two years ago, and all the information then - it didn't get into the conference report, just because of... Maybe the word isn't "threats," but emanations from the government. So, it's not like we haven't seen this and didn't understand the fiscal impacts, and of course Representative Lubke, any money that goes, goes to other public schools. It doesn't go to private schools, or anybody else, other than public schools.

The general staff, thank you Mr. Chairman, I just MIC representative from the school boards association just would like a bomb, reaction the swimmers here is an miss manners please send her some oxygen info record of the inland Liane when I represent the North Carolina school boards association that happen like the KCBS D court of appeals not the Supreme Court actually said that E9 E DEF later the local contract extends five which are score people call 52 we had to say here that four bet that all the funds that what (SPEAKER CHANGES) Bradley fleming 352 if they were placated effect five that we would not have to share to this general assembly then make that determination that there were things that should not being considered local connectix parents for example preschool programs and all the things that are listed at LMN that and the statute to wish it were reimbursed tuition reimbursements there is a long list educator nine thanks to SS S about what happened against school districts will now have 10 days based funds back in the 52 they would end up having the BC Eric we will probably end up back in litigation began publication has pretty much less course and everybody knows what the rules are currently you'll also played a number of programs in your school districts in jeopardy for example preschool programs we cannot actually share this bonds with the charter schools because they are restricted instead we would have to say here are back at city light of a global funds within lack of a larger share of them vastly DC that ML we stand on our K12 PM CDTS preschool programs MALEX ,(SPEAKER CHANGES) we're the end of the first rock we would end up fighting to our school students and higher banks that we call our web public school students NT Pass this amendment I'd be happy to try to answer any other questions the new stadium and take a second, let the newsletter forgets that are so many of capital funds and lonely lady fiscal analysis two years ago, my opinion those that are forgetting about paper said of what the traditional forgetting a play that calculates 70% of the no lack getting anywhere close to letter not the director tension lines 20 to 22 of us that do allow Federal funds to be set as a team required by the banner at sharing things that somebody said we want, use for backs template and elementary school or we only what use for Kyser junior high school Lakers and columns of Leonard of representatives Starnes say that this some misgivings, fossil record season is already told the schools today in a near miss what are saying something else in the last art shell out more money than (SPEAKER CHANGES) I currently sharing some of the discussion clarification went from somebody that's the whole model which are good luck to answer that question , thank you very much on local history this is going to walk safely back the way of laws and supplying a gap of accounting principle that lost every business in the state and that is the north wants the state to three came on the Federal government would pretend money for a gun or who wants a restricted fund to tell the school system put a separate fund ownership with everybody that's all the stops again today what this means is that charter schools will get about 70% per dollar of what school systems get this provision of him awake the one that's being stricken in favor of the stone or provision is essentially taking out what I call the kitchen sink revision that was drafted by an adversary lawyer ensure that the case it was quoted at the end of the legislation legislature on a weekend of November Coach Jim Crawford a friend of mine called me and tell me what was about to happen and this is essentially let's see if we can't undo the sugar creek cases in one fell swoop a play everything but two forms county money and fines and forfeitures and a separate fund at the discretion of the school system what you're doing is applying to be ??......

...businesses the same principles that apply to other business. Let the donor decide and at the end of the day, as Skip says, school systems will still have most of the dollars and the children in charter schools will get about 70 cents on the dollar, as opposed to about 60 cents on the dollar. It is eminently fair and it's consistent with what all businesses throughout this country and this State must do under general accounting principles. [SPEAKER CHANGES] Representative Robert Brawley. [SPEAKER CHANGES] Question of either Representative Starnes or staff. Does anything in this amendment affect State funds? The way I read it it's local funds and federal funds. Is there anything in it that affects State funds themselves? [SPEAKER CHANGES] I'll have to defer to staff. [SPEAKER CHANGES] Mr. Chair, this is just a, or the impact here is, as the member said, local and federal, other sources. No State funds are involved in this amendment. [SPEAKER CHANGES] Follow up? I'm sorry. You said no State funds are involved? [SPEAKER CHANGES] That's correct. [SPEAKER CHANGES] Representative Starnes? Representative Samuelson? Representative Hanes? [SPEAKER CHANGES] Yes. I'm a co-sponsor of this bill and I'd have to stand with Representative Collins right now and his last statement. I'm a little confused now at what's going on here. But I would like to have Ms. Winter to respond to Representative Stam's question with regard to funding. I don't remember exactly what the question was at this point, but there was a statement made with regard to funding sources and you didn't get a chance to respond to that and I'd like to hear your response to Representative Stam's question, please. [SPEAKER CHANGES] Again, LeeAnn Winter with the North Carolina School Board Association. When charter schools were developed by the State, it was with the understanding that the charter schools would go raise the money themselves for their capital and thus, there is the restriction in the statutes that capital funds are not shared with the charter schools. Either at the State level or the local level. But that we would share our local current expense appropriation. There was no definition of what the local current expense appropriation was. The understanding coming out of the General Assembly at that time was that that meant the money your county commissioners appropriated to you. The first case got filed which was the Delaney case out of Asheville and the North Carolina Court of Appeals, and none of these cases have gone to the Supreme Court. The North Carolina Court of Appeals at that time said that the local current expense appropriation equals the local current expense fund, which is a term of art used in the chart of accounts for schools. That triggered all the other litigation as to what is that fund to and thus, the final determination coming out of Sugar Creek too, was that any money that touched that fund we had to share. Even things like State funds coming from NC pre-K. And so that's when the General Assembly said no, that's not what we meant. They're our special funds and we need to create a place to put those special pots of money. For example, the NC pre-K money, we do get some federal appropriations, ROTC that go directly to school districts. People who give grants or give money to schools typically do not put designated restrictions on those. So for example, when you do fundraisers through your PTA and your PTA then gives the money to your schools, they don't say it has to, a letter doesn't come with it that says it has to be spent this exact way. There's just already an understanding. And a lot of those State and federal programs or grants from other outside entities do not have those legal documents that would have to be created to go along with all of these things that are stipulated in the new underlying language in the amendment. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Thank you. Representative Stone? [SPEAKER CHANGES] Yes, I'd like make a motion for a favorable report for the Starnes amendment. [SPEAKER CHANGES] Thank you, Representative Stone. And I believe there's one more speaker from the public. Mr. Paul Norcross?

Thank you. I just want to be very brief. I just heard the word share several times. [SPEAKER CHANGES] Who does he represent, Mr. Chairman? [SPEAKER CHANGES] Oh, I'm sorry. I'm from High Point, North Carolina. I'm a co-founder of a charter school in High Point. I heard the word share used several times. The only thing I can say is that it's very difficult to share something that doesn't belong to you. That's taxpayer money that's meant to follow their children in the public school system it's traditional or charter. [SPEAKER CHANGES] Thank you. Representative Stone has a motion on the floor to approve the Starnes amendment. All in favor say aye. [SPEAKER CHANGES] [chorus] Aye. [SPEAKER CHANGES] All opposed. [SPEAKER CHANGES] No! Division, division. [SPEAKER CHANGES] Alright, we'll have a raise of hands. All in favor raise your hand. All in favor raise your hand. [long pause] Amendment passes 16 to 11. Amendment is adopted. [SPEAKER CHANGES] Mr. Chairman. [SPEAKER CHANGES] Representative Stam. [SPEAKER CHANGES] I have an amendment if it could be passed out. [SPEAKER CHANGES] Committee will be at ease until all members have a copy of the amendment. [long pause] [SPEAKER CHANGES] All members have a copy of the amendment? If you don't, please raise your hand. [pause] [SPEAKER CHANGES] Representative Stam, please explain your amendment. [SPEAKER CHANGES] Thank you, Mr. Chairman. I worked on this Representative Starnes. He had another amendment and Representative Blackwell had a concern and basically we merged our amendments here. Representative Blackwell had a concern that if on a ballot initiative money was raised for a particular students to be used in a particular school district that the voters might have been misinformed as to the use of that money. So, rather than striking the language on lines 11 through 13, which is in the underlying bill, we don't strike it; but then we limit it to the cases where the language on the ballot approved by the voters specifies. So, I move the adoption of these amendment. Maybe it's just clarifying. [SPEAKER CHANGES] Representative Hardister. [SPEAKER CHANGES] Thank you, Mr. Chair. Just for clarification, I've spoken with Representative Stam and I do support this amendment. [SPEAKER CHANGES] Questions from the committee. [SPEAKER CHANGES] Representative Samuelson. [SPEAKER CHANGES] Well, this question is for the amendment and the bill and pardon my ignorance. I don't quite understand this bit about the funds going outside the tax district. Can you take 30 seconds and explain that? Somebody? [SPEAKER CHANGES] Representative Stam [SPEAKER CHANGES] Yes. The original—this reversal is what we call the Nesbitt amendment where – well, let's not go into history, but if that's what it does – [Crosstalk] [SPEAKER CHANGES] Too late, too late. Please proceed. [Background laughter] [SPEAKER CHANGES] A child lives in Ashville, but goes to a charter school outside Ashville, but in Buckham County or Transylvania County. The whole concept of the charter school idea was that money would follow the child and whether is 70% or 80% or 90%, whatever it is should follow the child. So, this is saying that if you have a supplemental school tax, it will follow the child to the school where that child is being educated, but not if the language on the ballot approved by the voters to raise money for it if there was such a ballot specifies something different. [SPEAKER CHANGES] Further questions or comments from the committee? [Brief pause] You've heard the motion from Representative Stam to adopt the Stam-Starne's amendment; a match made in heaven. All in favor say---Representative Holley. [SPEAKER CHANGES] I just have a question. So, I can send my child to a charter school in another part of the state and have that money come from my local jurisdiction? [SPEAKER CHANGES] Representative Stam. [SPEAKER CHANGES] Yes, because you paid the taxes to contribute that to the fund. [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] But if the taxes may have been different from the jurisdiction that I was in to the jurisdiction that I'm going. So, there may be some varying factors here. [SPEAKER CHANGES] Answer. Follow-up. [SPEAKER CHANGES] Yes, but the fact is...

going either sixty seventy eighty or ninety percent, so you're not losing their hours and later make money. this is, they never contribute a hundred percent because I don't contribute capital you have stopped the most of those standards are as minute, all in favor say I all opposed, motion carried. thank you to minute as adopted by oatmeal of the things that lose them. this general type move that the members be put in place after a favorable or unfavorable to the original bill records are stamped even as young as a further digester is looking [SPEAKER CHANGES] thank you, Mister Russo I think that the committee leadership of the new those who spoken for this arms amendment, and us for this bill with the finance issues. the dollar is using included on very very thin ice and trying to do in asserting that we do not need a fiscal note on this think about how many fiscal notes you have in front of you that is talked about impact on local government or no impact on state government, where the staff will write unable to determine if there's any impact on state government. so we have physical notes all the time that it rests is the question of the impact on the state whether or not the number is zero and I don't know who's the rules meister here, but I just remembered Mister Chairman, I'm a vice chair of this committee think I can ask for fiscal note that within if I can would like the fiscal note riveted Howard thank you missed you, not pleasure. [SPEAKER CHANGES] I have to agree that residue that he is correct in will will say to developmentally discriminate him and handed him him them with as much information as they can gather, he now had it before the bill comes to the power this illness have to be crossover at the same all in favor say aye was thank you. I direct the parser of your regular committee, welcomed us and at this time we will have house Bill one oh seven representatives that Shelley Michael… this out recently to Gail and [SPEAKER CHANGES] i think there's a good morning. I appreciate you taking the time to review this bill of this bill, the Eastern region was developed at his funeral the history before go for the visa regime was developed to push the concept of the global transport the global transport was it an idea that came up twenty years ago. they said within ten years. this global transport area in Eastern region. there went up foregoing and fifty three thousand jobs was twenty years later, and there unbelievers about two hundred jobs. there which were taking taken from some other areas of the state, so there's no no net gain in report hundreds of millions of dollars into this thing bottom line is the counties have the right to withdraw from the region, but the monies that they have in the in the long fund I take out until the whole thing falls apart and what this bill is asking is that if a county decides to withdraw from these the region that they get their portion of the money the thirteen counties are several counties that are considering withdrawal are several of the counties have started their own economic development teams and they want to use this money to out to further their economic development because they don't feel I could get anything from the global transport site object via that want one gallon and the global test market in any eyes of many of the counties has been a huge failure. obviously it had it in my twelve years without a business plan if, after 9/11 they decided I was try to find a concept for this thing that'll work because original concept and Mark so they decent innately submitted business plan to try and turn it into a terrorist terrorism training facility that didn't work

Plays several signs in two successive civil fines and you know the bottom line is that this is a failure and they stopped lending money to the county's this money and loss accounts which has collected by edition a license plate fee, so this will allow the county's to get that their portion of the money into one with economic development and they'll have to use it for economic development (SPEAKER CHANGES) that thank you, representative Collins back from a show that becomes jam-medicine balls and bad thing to Mr. Chairman, just as soon as we can ease wanted Alan whether this letter from their fourth the budget and a commissioner said taking some kind of public action saying that they wanted to reduce the john Paul I do have a resolution in support of the spill from creating county a high end of someone in the senate ask about getting their county to it, so there is no support among, a few of the county's four from thank you Mr. (SPEAKER CHANGES) Termination by just like to see an official action on behalf of the canny before I believe the county's want something to sometimes it's not the notes when commissioner are two 252, the health and from this and this crisis, first and 88¢ E starring Janet site on the edges for first signal EJMLK Hanley said the staff at the facts a letter reject all other partitions and sang said specific to the slide deck, Mr. She'll be the SNA to the Tolly amending the statute applies to the eastern region dances simply called our region in the statue of taking this same half-hour I'm not sure that fully understand the PL, EMMAS leach and from that of a lot of money for economic development company said NHL MM-financed by the Mexican mafia is working for is some legislation L2 male and 7 to 10 from 3 to 7 pounds, the demand that they voted to LLS um have any friends are distributed a lot like the troubled fans are actually placed 9N2 this assumes the destination list was formed to push the publisher is marked by deleting and turn publish this parking lot will suspend such a load of cox and along the county's that everything is referred to as the eastern region but its entire mission that well to the expand a little bit too can provide economic development for these counties of the nothing's happening is all saved on pushing the global train struck again which is the failure with regard to the bill coming from the senate best of the land to the revise the other regions of desolate interest of the global business money specifically: (SPEAKER CHANGES) transport money, but the use of that they got it from inside a license plate C in the user to launder the counties are get back in just a charge the county jail on the money, charging interest on it and that's the way the reason they stop along the money such a sitting there listening, medical, um, a company that ended a $5.00 com 5 cc so are we talking about the E partition of many that is spread across from the ballot got no text of the money that was put in by the state can bet that the goes into this distribution this is specifically 88, by state money and I guess when teachers chairman, that he has come from a MMM makes many SM@\and from 10 questions to an explanation that infected to that IP stack down still Bangkok still is that the savage says syntax, no SMS of things that Mr. Fink and supplies a different message that that crashed and they can't fly zone transfer eccentric aunt IAI D's S no longer unauthorized or deny B and there's currently AM to approximately 14.8 million total and background in C. Mack trucks five , just as for the record is estimated that some of the roughly 1.2 million of fauquier county it was what they would get back from that fund that consistent pitching, still needed follow up their vacation please send if I understand this right maybe everybody a ??.............

Understands it, but over the, the five years from '94 to '99 there was a five dollar tax, special tax and this money was generated and it is being, to the tune of 14.8 million dollars. Who has control of that 14.8 million dollars? [SPEAKER CHANGES] Miss Griffin. [SPEAKER CHANGES] The, the Eastern region, which is the municipal corporation established via the, the statutes. [SPEAKER CHANGES] Speak on the bill. [SPEAKER CHANGES] Yes, ma'am. [SPEAKER CHANGES] I'm not sure I'm speaking on the bill or Global TransPark, but I, I can tell you that the Global TransPark has been a real disappointment for all of us. It was a vision that never came to reality. We have, the state has put millions and millions of dollars down there, and I do think right now the Global TransPark is trying to do better than, than what it did in the past, but I can understand why the counties would want to take, take their own money out and use it for their own economic development, if the member is telling me that this Eastern region is for the promotion solely of the Global TransPark. Is that what you're telling us? [SPEAKER CHANGES] Well, it's for, it's was, it was created to push the Global TransPark. That was its main purpose, but it does claim to be for economic development throughout the region, but its focus is on that Global TransPark. [SPEAKER CHANGES] Does that, a question for staff, does the, does the Eastern region also receive other dollars other than, well, they're not receiving these dollars. They're just a holding company, but do they receive other state dollars or. [SPEAKER CHANGES] Yes ma'am. I'm Aubrey from fiscal research. They do receive an annual allocation along with the other six economic development partnerships. [SPEAKER CHANGES] Then, Miss Chairman, if I understand this right, you're not asking for any distribution of that annual money that comes. You're only asking for the money from the taxation of the, the vehicle. Miss Chairman, I move that we give this bill a favorable report and perhaps encourage the other counties to take their money out. [SPEAKER CHANGES] Thank you Representative Howard. Representative Bill Brawley. [SPEAKER CHANGES] Thank you mister Chairman. I do want to be clear, the money that we're talking about distributing is only funds on deposit, and it's not money that is loaned out that would require the recalling of the loans. [SPEAKER CHANGES] Committee will be at ease for a moment. [SPEAKER CHANGES] I got a couple more too, so it'll. [SPEAKER CHANGES] We can't wait. [SPEAKER CHANGES] I guess the other one would be, will the state be. [SPEAKER CHANGES] Wait, wait, wait, let's not put another one out there just yet, because the people that could answer it are thus engaged. Miss Trina. [SPEAKER CHANGES] Had to consult there. So our understanding is that it would vary by county, whether, whether any of these, the assets are encumbered through loans, and the bill could probably stand to be clarified to say something along the lines of unencumbered assets could be distributed if that was the will of the committee. [SPEAKER CHANGES] Representative. [SPEAKER CHANGES] Follow up, Representative Brawley? [SPEAKER CHANGES] Yes sir, a second question. If these distributions are made, will the state then be liable for additional funding to support the Eastern region or the Global

TransPark? [SPEAKER CHANGES]. You do have some interesting questions, Representative Brawley. [SPEAKER CHANGES]. I would say no. I don't think there's anything in here that obligates the General Assembly to appropriate additional funds. [SPEAKER CHANGES]. Follow up? [SPEAKER CHANGES]. Yes, sir. With the withdrawal of counties from the eastern region cause the failure of the Global TransPark, and would we have liability? [SPEAKER CHANGES]. I can answer that one. [SPEAKER CHANGES]. Go ahead. [SPEAKER CHANGES]. It appears to a lot of the counties that that's already happened. The failure of the Global TransPark. [SPEAKER CHANGES]. If I may clarify my question. Would that end up with a bigger bill for the state for the cleanup? [SPEAKER CHANGES]. ?? for a moment. Representative Ross. [SPEAKER CHANGES]. I just wanted to ask Representative Speciale a question. [SPEAKER CHANGES]. All right. I'll get back to you in just a second with the answers. [SPEAKER CHANGES]. Do the members, the other members who represent the other counties in this region, are they supportive of this bill? Because I see that you're just the primary sponsor all by yourself. And so, there are a lot of other counties involved and I just kind of wanted to know what your colleagues think about this bill. [SPEAKER CHANGES]. OK, this was one of the first bills I submitted. I didn't know about co-sponsors, you know, getting other folks on board, so I'm a freshman, so that's my... I haven't contacted the other 13 counties. This would apply to them, if they chose, if this bill passes, if they chose to pull out they would get it. They're not required to pull out, this doesn't mean that anybody is going to pull out, it just gives them that option should they do so. As far as I'm concerned, this is a jobs bill because a lot of the counties... [SPEAKER CHANGES]. Proceed. [SPEAKER CHANGES]. ... A lot of the counties have started their own economic development teams, and this is money that they could use. Right now it is sitting in a pot, not being used. [SPEAKER CHANGES]. I understand that, Representative Brawley. We've sort of got out of line here. [SPEAKER CHANGES]. The Brawley question hadn't been answered, they're still working on that. Let's try another one, Representative Brawley, and we'll get back to that one. [SPEAKER CHANGES]. I think, while they're working on that one, I'll tell you what my train of thought is coming from. [SPEAKER CHANGES]. Yes, sir. [SPEAKER CHANGES]. My degree is in accounting and occasionally that rears its ugly head. This is going to create a situation much like the dissolution of a partnership, and when one does that distributions to the partnership are limited by the potential losses on disposal of the assets and potential liabilities. The only concern I have with this bill is if a county withdrawals, takes all of their money out, and then it turns out that the liquidation of the assets leaves a shortfall, essentially the last county to head for the door may end up with a big bill rather than a pot of cash. So, if what we're talking about doing is dissolving the eastern region then let's do it in an orderly manner so that no one's injured. Otherwise, I have some concerns about the unintended consequences of this being structured the way it is, because one, if other people are told they share encumbered funds and they can't get them out, then are they going to sue Craven for part of the cash that Craven got, make Craven take over some of the liabilities? [SPEAKER CHANGES]. Representative Howard. [SPEAKER CHANGES]. Mr. Chairman, I guess it behooves us all to read the bill closely. [SPEAKER CHANGES]. On every point. [SPEAKER CHANGES]. First of all, I'd like to withdraw my motion and speak to that withdrawal. [SPEAKER CHANGES]. Yes, ma'am. [SPEAKER CHANGES]. I guess I was focusing on the money that was in a fund from the original five dollar taxation, and I still feel that that would be fair that the counties that are in that region that participated in that fund, if that is just sitting there and it is unencumbered, that that should be permitted. But I don't think, I think we had some legislation last year by other members that tried to pull their county out of the region and take their money, and... Chose. I am not supportive of that. [SPEAKER CHANGES]. Representative Howard, Mrs. Griffin had something to add to what you were saying. [SPEAKER CHANGES]. We were just going to try to address some of the questions raised by

Representative Brawley. I guess this bill, as it allows the counties to withdraw their portion prior to dissolution, but as the summary sort of alludes to, the statutes provide for the dissolution of the eastern region and happens upon termination. In other words, in the situation where if every county were to withdraw and the partnership were to dissolve, the statute provides what happens in that situation and it says that amounts loaned for a project in a county are allocated to that county to the extent of its beneficial ownership. There are several provisions and it says that amounts not allocated are allocated among the remaining counties in proportion to the amount of tax that they collected and the remaining counties become the owners of the right to repayments of the amounts loaned in proportion to the amount of tax they collected. What we’re trying to say is the statute contemplates and sets out what happens upon dissolution if all of the counties were to withdraw. As to the question of what amounts are loaned out and which counties had encumbered funds, we would probably have to contact the eastern region and find out more information for you on that. [SPEAKER CHANGES] That was regarding the Brawley question. Representative Hamilton. [SPEAKER CHANGES] Thank you, Mr. Chairman. This is probably another question for staff, but of the monies collected from the $5 fee, it amounts to, I think you said, roughly $14.5 million. How is the interest from that money utilized? Does it go to pay off debt liabilities, what happens to the interest accrued and how is that currently being used? [SPEAKER CHANGES] We’re double checking but we think that it goes back into the fund and then I would suspect attributed proportionally to the counties. We have a breakdown of how much is attributable to each county, but that’s also something we can double check. Aubrey, did you have anything to add on that? [SPEAKER CHANGES] I would say the interest is taken from the amount that they are allocated on an annual basis and distributed on a proportional scale back to the other six. It’s taken into account in terms of their annual allocation. [SPEAKER CHANGES] The subcommittee to the left of me can outside any time they want to. Representative Hamilton. [SPEAKER CHANGES] Thank you for the answer. Follow up. [SPEAKER CHANGES] Follow up, please. [SPEAKER CHANGES] So if one county pulls out, how does that affect the distribution? I mean, will other counties see a reduction in that interest collected? [SPEAKER CHANGES] Representative Hamilton, repeat that one more time please? [SPEAKER CHANGES] If one county leaves and takes their proportionate share with them, does that reduce the interest collected that’s currently to benefit other counties? How does that affect the partnership, I guess is what I’m asking. [SPEAKER CHANGES] I was meaning in terms of the other six partnerships that also receive an annual allocation. If a county were to withdraw, that would decrease the interest. That would be taken into account of the annual allocation to the other six partnerships. [SPEAKER CHANGES] Representative Rodney Moore. [SPEAKER CHANGES] Thank you. Miss Howard answered my question so I’m satisfied. [SPEAKER CHANGES] Thank you, sir. Representative Holley. [SPEAKER CHANGES] Thank you, Mr. Chair. This is probably a question for the staff. I’m to understand that in statute there is something about the dissolution of the go between spot, that there’s some statutorial procedures of how that would go about. But there is not anything for if we allow one person to come out early? Or is that currently in the statute that that’s not permitted without coming through here? [SPEAKER CHANGES] The current law provides for a county to withdraw, however, they can’t take their share of the money until the entire region is dissolved. This bill allows them to take their share prior to dissolution and upon their withdrawal. [SPEAKER CHANGES] Again, this money is money that the purpose of this money is to loan to the counties for economic development. They’ve stopped loaning this money to the counties so it’s sitting there. The counties want that money so they can use it for economic development which is what it was intended for in the first place. If, for example, Craven County pulls out and gets their portion...

The less money in that fund to loan out for the other 22, countries are counties but again the Celtics all supposed to be loaned out proportionally based on what they put in there in the first place but even when they were running out they were not living in a proportionately some counties weren't able to buy because more than a bigger share of it was not still available so the whole concept of this fund was not it was not being administered the way it should abandon the first place and right now, unless a need a setting lonesome was just sitting there are some columns by about 50 miles from(SPEAKER CHANGES) Katzenberg will transport is that a good fit with the thing that $5.00 surcharge for mob license tag for number of years, Michael in HTML most of the ways and gives them as part of the deceased and region from other little heavy issues with the county's be unable to get their money back a fiery most people in my county to the same thing that most people and for the specialist anything that is known, great bend are only for the money, I would say that that was the end of all public sector talks organization for global transport before willing to do two infrastructure improvements could turn that not only that card also are 40 more disabled to say that first and second biggest law for all eastern seaboard into economic issues that would really got loose North Carolina thought of before dawn, favor the bill but before you buy. Michael's out like them too long to all season with all legislators from eight to the coast of the best post and see if we can stop suit against targets of the one that would actually be a problem that all the small Carolina, so I would modify the bill will encourage and 40 give up five and pull out: the safely can do something which would actually make this an economic engine of them and almost none so far budget cutting , thank you (SPEAKER CHANGES) just my estimate is that the discussion of a follow this about this that the cursor to the bell said, four about original partnerships back down from the one that passed an amendment understanding of like mind CA here was this lies just to take the money the county's portion out that the tax money at 14.8 million fax at five that an invalid says that 12 weeks from the partnership 7 to 2 things going on here like it might question as to staff what the CNN and tried to help here with a spell contaminates the concept of what with am not need to spell had just M5 I think L.a. two with five kids say are from the 14.8 million desktops and can't sustain them stand in the partnership that this suggest in the delta said we want a Woodstock, portion that thank he said 1.2 million for Craig ML NSAM 5 L street from the tax 120 MM and forget the withdrawal of the event at the beach, indicates them are certain to become another question $1000 at the plate and if some people might mention 20 and if I were the other counties holly media from a money and stay aboard a ship also answer your question , but rather do it this way for the declared safe place to centrally asking for their portion of the tax collected termite accident that the CC syringe and get in there at 1.5 CDs have to wait 35000000 dollars by the 14th army base a western any relaxing as a liaison that tax five of 14.8 million SM five F if Clinton can anyone stop the five counties manager of the good wishes park will still be there will still be a mistake, differences that won't fund will not be left alone to the county's which they're not going to the county's not the way to and from them that if Mr. Mica Moshe, judges cushion deck, 7 May like this really gonna change anything if a malicious ??........

And we’ll give Craven County an opportunity to get into their own economic devilment program and I would move for a favorable report. [Speaker Changes] Senator Howard: [Speaker Changes] I just want to be sure that I understand this. Staff of just told rep Carney that Craven pint county would be due 1.5 billion dollars out of the 14.2 or what. Is that just from the 5-dollar taxation during that 5 year period? [Speaker Changes] Yes mam [Speaker Changes] We’re clear and it has nothing to do with the annual allocation to the various regions? [Speaker Changes] Correct [Speaker Changes] Is that correct? [Speaker Changes] Representative Blueky. [Speaker Changes] Thank you, I don’t think this bill is ready for prime time. And let me explain why if I may speak on the bill. I agree with rep Broollegy, Ger Howard, Carkey, there is just lot of questions about this and mines a little different and it’s this” lets say that Nash county comes up with a economic development project but it has decided to be on its own. Now I think we all know, certainly rep Collins knows that Edson county is a much poorer county than Nash county. And you go down the railroad tracks in rocky mountain and to the west is Nash county to the east is Esihon. With your bill it allows Nash to pull away, Eshion stays in there and I don’t understand how we have a regional development for eastern north Carolina when you have Nash running its own operation, Edisons still in the old system, or even Edege county pulls apart then you got two bureaucracies that have to talk to one another and clearly representative Collins knows this if a factory comes in to Nash county there is going to be people form Edigin county at a minimum who ware going to be applying for the jobs. So I think if you think about the stress that eastern North Carolina a faces I don’t’ think this is a good idea and I think it was suggested that you run the bill or amend the bill so that just craven county can pull its self away [Speaker Changes] Representative Howard is working on an amendment that may [Speaker Changes] I’d like you to consider that how you’re splitting up the whole region when we need regional development and not county by county development thank you. [Speaker Changes] Representative Moffit. [Speaker Changes] Thank you Mr. chair. I have a question for the staff if anyone’s available. If craven pulls out of the eastern regional, does this result in a reduction of the appropriation for the eastern region? Yes sir. Raven counties portion as based on the tier development designation. Thank you Mr. chair I have a question for the chair If this does affect an appropriation does this is this bill still subject to cross over? I think it would be within the digression of the rules chair if this needs to go to appropriations that would prevent it to be subject to cross over. Representative Ross The committee here could recommend a serial referral to appropriations based on what we think it’s impact would be on the budget and then you keep it alive and you can work on it. We have a couple options where we’re definitely running out of time we may comply with house rules we will not comply with senate rules perhaps. And we have the option unfortunately that in order to help the member this committee will meet again in the morning at 8:30 to hear this one bill Thank you members of the committee there will be no further business we stand adjourned.