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House | April 29, 2015 | Committee Room | House: Commerce and Job Development

Full MP3 Audio File

I want to call the Commerce Committee to order, board members will take their seats. First I want to announce our Sergeant at Arms today. They are Yang Bay, Bill Moore's and Bill Moreen. We certainly thank them for their assistance this morning. We also have some pages here today, they are Marion Eve from Mecklenburg and her sponsor is Representative Brandford. Captain Heus from Craven county whose sponsor in John Bell and Casey mostly from Hundy county whose sponsor is Representative Floyd. We have a fairly short agenda this morning Representative Heins bill 89 has been withdrawn so we will start today with Representative Henderson bill 8b, 898 in senate bill recipient educational requirement, we have PCS before I believe Representative Abel moves that we hear the PCS, all approval say aye? Aye. Representative Harder you have permission to go ahead with the PCS. Thank you madam Chair, members of the committee. This bill Is recommended by North Carolina Human relation commission,. Basically what it does is that it requires companies that accept economic grant to Senate to provide educational outreach efforts, and it lays our several different options that companies this businesses can comply with and around some of those sponsoring a career day and cavitle[sp?] college, hosting instate students visits to expose students to workplace environments, job opportunities, job responsibilities, collaborating with students to identify deals in qualifications, club rating mycologists to adopt curricular, funding college excuse me, funding college scholarships and relevant degree big programs, hosting internships. We do not want to put any kind of bans and regulations on businesses, but the idea is if the company is going to accept any economic incentive which is funded by the taxpayers, they should provide some kind of educational outreach in the community. The good news is I think a lot of businesses are doing this already, and so I don't think it's going to be a burden on anybody, but it just puts it in state long it would be part of the contract that's imposed by the Department of Commerce. Alright. Any members have questions, I believe I saw representative Polis here? Thank you Madam Chair, a quick question. My question is on the up to three years. We have not determined whether, what this is up to, it could be it one it could be a month or who would make that determination of the period of time this has to be. Yes, it's not to exceed to exceed a three year period. Can someone direct me to where that is in the bill so that I can look at it, and maybe madam chair can defer dis-actor provide clarity on that question? line 10. Thank you representative Hardister  the the requirement is on line 10 and 11 basically requiring that they provide these educational and outreach efforts for a period of no more than three years. That would presumably become a term agreement with the Department of Commerce that this business is entered when they are awarded the grants or incentive and the department of commerce then would be able to enforce that provision. Follow up? Yes representative Holly So what you are saying is, it will be done on a case by case basis and the Department of Commerce would make that determination when they enter into the contractual incentive agreement? As it's currently written, yes that's how I think it will work thank you. Representative Oneal, did you have a question? thank you Representative Hull I like that concept of your bill. Like you said it is a good idea for businesses to be given incentives give back to the community in some way but unfortunately the dealt in the details. Because I know you are given a apparently from line nine, we have given the department of commerce sole discretion assuming in implement this program. I'm just wondering how many times is sufficient, they gonna have to do one of this programs a year, five year, ten year we just

have a lot of details we think that your bill is lacking, and I understand that the part you should come up with, but I certainly to know what the come up with, I would hope what the come up with is fair to the businesses and the owners Madam Chair, Representative Oneal that's a great question and suddenly as I stated earlier, we don't want to put it some requirement regulation on businesses. My understanding is would refer to a [xx] language. Basically I would say one time, no more than one time a year and no more than a 3 year period. That is my understanding on this my intend and the PCS, so like for example an internship which a lot of companies might do that anyway. One internship for a year for not more that three years to satisfy the requirement, but if we need the type of language I'll be more happy to entertain any ideas. Representative Brody. Do you have any question? Yes. Thank you Madam Chair, Representative Harrystar[sp?] I just want to get an idea or maybe your opinion on where you see this grants heading because what I see from just  limited amount of exposure [xx]. We provide the grant and then we start wittling away and start separating things off the grant we got the utility fund, that's next and because even after utility fund we are starting to split that out. But then you had this on here and just your opinion on how far do we go with branching off pieces of these grants to accomplish other things than the primary purpose of the grant. Thank you Madam Chair. Thank you if I follow your question and then maybe a separate discussion of course this would apply to grants like J Mark and J Digg the film grant. But if I follow the question I think as far as whether or not we're going to continue the grants that's most likely a separate discussion. In my personal opinion is that I'm not a big fan of economic and senates but we have them they are here and so if we're going to have them I think this is something reasonable to put in the State Law as part of the contract. They'll be enforced by the department of commerce Representative Terry, do you have a question? Thank you, Madam Chair. Thank you so much, my question is I heard and I looked at the bill that this we're emulating I guess the STEM Curricular, but I don't see that in here anywhere, I'm I mistaken about that?  Representative Harder.  The STEM curricular? Companies, businesses that do in fact lend themselves to the educational requirements of STEM courses.  Representative Terry, this bill has broader than just STEM, because we given incentives to companies that are other than STEM companies. For instance, in the Film Grand Program, they may choose to get off for an intern's someone who is more coming from the Arts, rather than science and technology. But, I think one of the good things about this is that it becomes a workforce development opportunity for any business that is receiving the grants. Because if you were a company that was a science engineering company then you could use this as an opportunity to develop your workforce by bringing some people in, to be help them get trained for joining your company later. Followup please. Yes followup, you may respond. The reason I asked that question is to make a comment regarding a company that I'm familiar with that has brought students in, and I'm not certain where they stand on our radar for the state, but I know that they have received economic incentives from the department of commerce, and it involved both engineering and art for the students to be able to go there to learn. Madam chair? [xx] So I believe they would be compliance  with this bill then, and that is why we don't believe it will be to owners so many companies are already doing that type of thing. Representative Brown. Thank you, Madam chairman. Representative Hadister and members, more of a comment than a question, I have a

lot of heart burning with this bill and I would ask members to certainly to vote for confidence, I will absolutely be voting no, and the reasons I will be voting no is from a business perspective. Although I think the sentiments here is a feel good sentiment that I guess one can see is admirable, but from a practical stand point, from a business ownership perspective, it is extraordinarily impractical, it's extremely vague, and provides zero clarity from a business owner, for instance it says anyone or more of the following, so what does that bring your daughter to work day, could that be classified, bring your pet to work day, can food drive, where does it end, and what is the clarity on that, career your opinion is that it's one time a year, while the business owner unfortunately I can't go off of your opinion and will choose not to do so. My opinion would be that we allow the commerce department if this is something that they feel is an important aspect of providing incentives to define something of this nature within their incentives program, but for us to put it into statute seems a little heavy handed and the language that is in this bill is just so extraordinarily vague that I just want it to be very practical you may move on. Thank you representative for that. And again as I said earlier in response to Representative McNeill's question. I totally understand where you coming from and so we need to tighten up the language to make it more specific then I'm totally open to ideas on how to do that because that was never our intention we wanted this to be something simple, that's easy to comply with and as I said, I think a lot of companies are doing this anyway. I have about nine more members who want to ask questions, I would like to take a vote on this because we have a the second bill 1135 so after a couple of more questions I'm going to see if Thomas has any response to this let's see how many more we can get to. Next is Representative Point. You have a question? Thank you Madam Chair. Certainly the sense is lot but I must to an extent agree with Representative Brown, as well as maybe a couple of more questions. In fact I will put them all together. Are any other states putting  these kind of requirements? Any of our neighboring States for [xx] similar requirements? Is there a quality control measure and I don't see one in this bill. Where is the coordination with the state board of add, D. P. I, somebody because there's a zillion people knocking on the doors of schools that want to get their message in and they want to get in front of kids and in front of teachers and there's no. Even though I don't like gate keepers at the front door of a school, somebody's got to be controlling Who comes in and out. And I don't see that's in this bill you did say that needs more work, I couldn't agree with you more. I like the concept as you said is being implemented all ready by a great number of people. Thanks a lot but I think you need to go back to the drawing board. Madam Chair. Yes. Those are good questions and a great point. So as far as other states I'm not sure, I honestly don't know, anybody else who knows get free to churn in, as far as the gate keeper issue I have not discussed this with the department of Education, but I assumed that it will work, kind of in a similar version where it does with other companies that offer internships and education out reach and sponsor events at schools and the community. I assume that it will be facilitated through the local school system, but your point are all taken and for the commetees indulges I will point out. These idea again came from the Department of Human Relations And, excuse me the North Carolina Department of Administration Human Relations Commission, a friend of mine, a constituent from Guildford Counties serves on commission and brought this idea to me, and I was kind of skeptical at first, but I thought this kind of makes sense, I kind of like where we're going with this, got something to build raping just before the deadline. And then it was like literally like the day before the filing deadline, and my research assistant said, hey remember this, you want to file this, I'm like, I don't know, let me think about it, I had to make kind of a last minute decision, but we've worked with of course my primary sponsor Representatives Dobson and Meyer put it together we got a file. And frankly what we're doing today is just bringing it here with more trust wisdom of the committee. Representative Yober. It sounds like a great idea on the surface, but I'm picturing the Department of Commerce putting together an incentive package to compete with another state and then, by the way, we have this special law that

you have to abide by it so I don't think it helps us in our competitive decision. Is there anyone here from the Department of Commerce who would like to give their opinion on the bill? Please come to the microphone at in the back, and let us know your name please? Good morning. My name if John Humane, I'm General Council with the Department of Commerce. We haven't had a lot of time to study this bill, but I will give a couple of comments on it. First I think Representative Yoder is correct and whenever we do give incentives to two companies one of the thing to point out is that there is usually tied with education that's composed of education requirements with Community College System and so whenever those companies are coming North Carolina creating jobs, there is always a component of Community College System to provide some type of training for workers to get those skills that the company needs to we had the the jobs that are required to do. There are in couple of the problems that I have seen in the bill. First of all, about initially that if a business receives economic development as it about these article. Other and JDEG and the film grand in august and senate will be restoring on that about the General Assembly all the other in senate that the department has don't get businesses. They got to local unit of government who then transfer that is great that they have used those grams to give grants to businesses, so it was not a contract that apartment enters to with this business where economic development centers other than those 3 that I have mentioned. So I wouldn't be applying across the board to every incentive package. Secondly, there's already a lot of reports that are required by the Department commerce to be submitted, and from the folks who received the incentive, so for instance the JDEG recipients have to submit annual report to us. So, and then, we are required to submit an annual report to this body by April 30th every year. So, if there is going to be something like this, we would want to work to make sure that those are combines, so, we're not having another report that has to be done by a business and another report that has to be done by the Department of Commerce to this body, but rather can bind us into the one report that's already required. I think that's probably all the comments I need to make, and if I'll be happy to answer any questions any one might have. Alright I do have counterfeit and a couple of more questions that can either be addressed to the Department of Commerce or the business sponsors? Madam Chair, It's me again, hey, I tell you what? This has been an interesting discussion, and I appreciate all the feedback, but Madam Chair if you'd indulge very briefly, committee members I'm going to pull the bill that's okay with the chair but before we do that, if you allow, a constituent of mine is here from Greensboro. He serves on the commission that recommended the bill. If we could just give him one minute to state his intentions and then we'll displace the bill. So when I give you that courtesy you can will the individual please come to the microphone and make sure it's on and give us your name. [xx] Good afternoon. Let me start by saying my name is Michael Picarelli, I serve on the North Carolina Human Relations Commission appointed by Governor McCrory. One of the sub-committee was in education committee and we all put a lot of work in within our counties as well and some of our cities and how we're trying to build the education up in each of our schools. I'm humbled to be here and address each and everyone of you and I'm grateful for your consideration even this matter being in front of you. When this thing was proposed it was merely just a form of partnership between a State's Educational Institution industries that have interest in North Carolina. There are a lot of businesses currently that do provide back to the schools, but we normally see them providing back to some other form in entity, say yes to education, that's the N. C a lot of that there does not really filter back into the classroom. So we were trying to propose was not a requirement nor an action but simply those that are seeking incentives to bring their business here was to form a better community base and provide a better base of education for tomorrow. One of the most important that we all do is that we want to be great stewards for tax payer dollars, but their nothing more important as being a

good steward for tax payer dollars and having those dollars being back applies into the education system. It is best for N. C today as well as North Carolina tomorrow. So I humbly again respect each of your decisions, and I would beg that you consider taking this matter, scrubbing it the way you like but be available to rise formal language, that for those processes that do come into North Carolina to looking, are able to reach back out to the schools within their Counties, as well as Cities, to be able to provide some career achievemnet that's for growth and educational opportunities that mirror their businesses growth for tomorrow. Thank you. Thank you, without objection, I will follow the sponsor's direction and a house bill 898, will be pulled from today's agenda and we'll move on to Thank you Madam chair, members of the committee, I've enjoyed the legislative process, I appreciate the influence. Thank you Representative Hadister. We'll move on to our last bill, Representative Johnson with bill 623, device and medical equipment permit requirement. This is a PCS, Representative Graham has moved that this PCS is for the committee, all those say I? Without objection we will proceed with Representative Dobson's introduction of his bill. Thank you Madam chair for allowing this bill to be we heard today, members of the committee, the short tittle pretty much gives you an outline of what the bill tries to accomplish, but basically anyone who sells heavy medical equipment in North Carolina this includes things like wheelchairs, crutches, foliar leaves, scooters, things like that, that they should have a break in motor location in North Carolina, are within 40 miles of a North Carolina medicaid medicare beneficiary served by the provider that's what the bill tries to accomplish. Now I'll like to take a second if you will indulge me to tell me why that's needed. One reason is a fairness issue, to our businesses here in North Carolina, I think that they should receive priority, so it's a fairness issue, this companies that are from outside of North Carolina, at least in some instances there is a debate about to what extend, but at least some instances I think that they're playing by different set of rules than those in North Carolina. So they're not having to comply every time with the same regulations and rules that those in North Carolina have to apply to. So a couple of things, one this is the only dealing  with the equipment is not dealing with insulin, contacts, anything outside of that. We're just dealing with heavy equipment in this bill, and that's what we're trying to get at so thank you, thank you for the opportunity to present the bill. If the committee members will endorse me I'm going to let staff make a comment on this bill. We have a concern that this is in violation of the commerce claws and will let staff explain that before I go to members question. Thank you Madam Chair, Members of the committee, we have advised the co-chairs and the sponsor of this bill that we do have some concerns that this provision may violate the  federal commerce clubs of the US constitution. Generally that provision provides with regard to state that states may not discriminate against other out of state businesses without a compelling State interest, and without essentially finding the list burden some alternative to archive that compelling state interest. It's not clear in this case what the corneal state interest would be for burdening out of state businesses in this way and we do have that concern. The bill was just paste on the agenda yesterday, so we haven't had time to do an exhaustive amount of research but we've raised that concern and the Chairman has asked us to raise that to the committee, thank you. I believe the bill sponsor would like to respond to this House Bill comment. Thank you Madam Chair and I'll start my comments by saying I hold no ill will towards our staff they're just doing their job and they do a great job, so I don't begrudge them in anyway in fact I appreciate the due diligence on this issue at the proper time Madam Chair whenever you see fit I do have someone in the audience I'd like to comment on that. Representative Avarlav I believe you have a question? Thank you madam chair. And my question goes a little bit a little bit too bad when I read the section B1 from things poped out immediately, and if I could I just them more in a row and may be answer about the person who speaks and one I'm pretty sure some of this stuff are available online. So how many online supply will be eliminating and what will cost our residents

in terms of what will pay them, save them to online versus having to purchase in a physical North Carolina site. And then in terms of, I know one of the arguments was made of having repairs and things of that nature easily available but my assumption would be that the manufacturer of that equipment similar to the manufacture of my car in Germany, makes sure that there's somebody in North Carolina that can fix it when I buy it. So I would assume manufacturer of equipment with definitely onbond in terms of funding and maintaining the technicians available. And the other question the 40 mile radius what if somebody comes from 50 or 60 miles is that particular person going to have to maintain all sort of record and ask where do you come from and type of things, I'm just the real issues with this limitation, it looks like we are setting up little region of supply and if can really live there I will appreciate it [xx] may respond Thank you madam chair. I will say you are probably accurate in some cases where Representative were, in some cases they may be able to provide the service to the equipment locally, but in some instances for example a medicare contracted provider for a wheelchair averages I think 339 miles away from Raleigh, 364 miles away from Greensboro a medicare contractive provider for sea path averages 443 miles away from Raleigh and that was actually the point that I wanted to bring up in my opening remark so I thank you for the question, I thank you for allowing Allow me to clarify. The issue about the the mileage I may have to defer on that one to a member of the audience at a proper time, Thank you for the question. Representative Brown. Thank you Madam chair. I'll tie negative Nelly today. Representative Dobson I actually came from this life in a formal life I spend many, many years working in the Home Health Environment and I see several problems with this bill and in some which Representative Abler brought, up but particularly in my opinion surrounding some of the oxygen respiratory equipment. Starting with the Ceda bypap that you had mention. There's actually states on the West Coast where Ceda bypap is a full commodity. You walk into a Wall Greens, purchase it without a script, set your own setting and all of those things, a lot of which the way the industry is moving I don't agree with that but that's what's happening. The other aspect that it is, if you have National companies want to which I work for Let's take representative's Dobson district for example it would just made more physical sense for us to bring a truck out of the Norfolk region to service that market then you bring it out on the green door market, that seems to be problematic when you are talking about very rapid response to some of these needs that these patients have in ensuring that they get the services that are provided in the most expedient men or possible when you have a selfies buses rather we can bring out out a glow flow to ensure that proper oxygen set up is obtained in the manner which it needs to be obtained and the time frame to be obtained but you see this may be extremely problematic for some of these companies to handle and keep costs down so for these reasons I will unfortunately not be able to support your bill would you like to respond representative Dobson? Not at this time Representative [xx] Thank you madam chair, I think we're going to have an interesting time with the 40 mile requirement because it's being discussed as if you've got to have a look at Within 40 miles of North Carolina but when I read it I covered the main that you would have to have a location within 40 miles of any Medicaid customer you could potentially serve. Which is to say, you could've a location in Matthews that would be within 40 miles of people in Union County but North Mecklenburg would have to be served by another location because it's more than 40 miles from Matthews to say Davis. And, it would also be extremely restrictive if you have to have a location within 40 miles of every Medicaid patient in North Carolina. So there maybe some imposition in our language here, on what it says or what it's supposed to mean or not the same and I raised this because it is, how does one say this politely? the ability of a room maker to misinterpret legislative intent, has messed me up to 4 years up here and I could see a we having a rule permitting to go and be with full house

of every resident of North Carolina that you want to serve or else have to check her deal and make sure no body more than 40 miles away buys and them if I move more than 40 miles away are you in trouble? And then I can also see the constitutional problems because, Gosh! We don't have a passport for North Caroline yet, I realised that there are a lot of people that like to that instead of the immigration statutes but I don't think we have the right to do any of that. I appreciate what the bill sponsor is trying to do [xx] also have questions about your bill, thank you. Representative Dopson were you indicating you wanted to respond? Thank you Madam Chair, Representative Billy with the last part of your comment on the interpretation of rule making, I couldn't agree more. So I will start with that, also say that's certainly not the intent to mandate a [xx] order facility within 40 miles of every potential recipients of these benefits. I appreciate the comments here. Madam Chair at your discretion what I would like to do with your discretion and members of the committee, would be allow someone from the audience to speak on this and then displace this bill at this time. We'll do that. I did have four other speakers but we'll go to Representative [xx] 's guest, if you'll come forward to the microphone and introduce yourself we'll listen to your comments. Good morning, thank you Representative Dollar[sp?], also thank you Madam Chair. My name is Brad Heath, I'm with family medical supply, I'm out of [xx] and I certainly think Representative Bladen[sp?] brings up some excellent comment. It is in this room that you take what is the spirit of the issue, and have to iron out the letter of the issue, and so I guess for me it's more about speaking to the spirit of the issue. And a couple of things, I'll speak first to the inter state clause and I will also say that not every product is the same. In North Carolina, we're one of the only two states that by law and ask to provider must provide 24 hours backup in that home, and that comes from two areas. One is Hurricanes, and the other is we have a large amount of power lines above grounds, so when you have icing and power outages being able to have a patient on oxygen for 24 hours while someone gets to them, it pertinent, and that is not something that is covered on a National Web and I will tell you tell that we have right now a company out of California that drops, ships oxygen concentraters into homes without backup and because the North Carolina board of pharmacy does not inspect them at their location, it goes completely missed, and we have no ability in the state right now to fix that, that is a medicare medicaid paid for item, so that is part of the spirit of the issue we're dealing with, and so we would try to go through and iron out the later of that the other is the 40 miles actually came from [xx] we got eight other states right now that are in the same lace that we're in, the state of South Carolina allows us to go in their state inform of number of mile we have a vocation she wrote ourselves and we are able to service those more a bit. So the spirit of those actually came from what we're seeing with other states, and say, hey we know we can't draw a hard edge here, we know you have patients that cross that state line that was what was going on there. One of the other issues that is the true heart of where this is coming from and where this has preceded from is coming up in other state is that medicare has gone to bidding these items which is not a problem. This issue is that you have out of state providers who are driving down a low bid they take a medium bid, you don't get reimbursed for what you bid the medium bid of the award winners, they find that the bid is not is not appropriate for the investment they need to make and they withdraw completely which means you have an absolutely reduction of access or you have someone drop slipping in an item like a generator, so there are things which are absolutely agree with as on line, cause we sell products on line. We are not trying to eliminate item that are common commodities see part  masks are certainly becoming commodities, that is not what we are trying to a an issue with or eliminate the purchase of. I've been fearfully this will be interpreted as some type of anti-competitive bill which is not the intended or but the intent is I have a patient on Orca Coke Island that I serve, is that

patient drops [xx] and under North Carolina board of Pharmacy, they're never going to catch it. We've got some real issues, we've got some real issues that are being funded with medicare and medicaid money any other questions I might entertain? Thank you for your comments, Representative Brown, did you have a? Yes, thank you very much to the speaker's point, excellent points and I think this period of what they are trying to get at is needed. We absolutely should not be having patients companies drop ship ocean on concentraters I was actually going to bring up the Yoka Cord situation, I mean, I can't tell you how many times we have patients over there, and we know hurricanes impending, it's a two hour boat ride, but to put a track on a boat to drive over there you can't just leave within 24 hours, I mean, you are really tying your assets up out there, and we can't have that happen, so I would be more than willing to work with the bill sponsor and others to certainly tighten this up and make sure that the spirit of what needs to be obtained is obtained because I think that the point she brought up, is very very important and should be addressed. Representative Thompson do I here you correctly that want to remove this bill from the agenda today for further vote? Thank you Madam Chair, yes, this time that is correct. Without objection I will remove House bill 623, and that's all of our agenda for the day. Representative Holly did you have a? Yes I'd like to, because he's going to do something, there's a couple of comments I'd like to make that, if possible? You may proceed. Thank you Mum Chair. I spent 25 years [xx] medical equipment for the state. And one of my questions in, if you do anything you have to make sure that this does not conflict with [xx] contract for these things, because a lot of times a sales Rep is an independent business. So if you are talking about a sales Rep, he can be independent business and located anywhere within the state and that's there location. So you need to make sure that you keep that in mind and also make sure it does not conflict but with the rules and regulations of what the state, when the state bias in scientific in medical equipment. We don't have rules where we have a 40 mile limit in that kind of thing. You don't want to put something in that throws out all the means of dollars of contracts we currently have existing.  Thank you for your comments Representative [xx] and thank you farming commerce committee is now adjourned.