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House | August 11, 2015 | Committee Room | Finance Committee

Full MP3 Audio File

The House Finance Committee meeting will come to order. Today our Sergeant-at-Arms staff includes Reggie Sills, Marvin Lee, David Leighton, David Linthicum and Ray Cook. We appreciate your service, and I don't think we have any Pages today. I think they've They will not be here the rest of the [xx] Thank you Sir, and also I want to appreciate our staff. Lynn's already here, and of course, our finance staff, we always appreciate your service and your being here to help us. And so today we're going to extend a huge courtesy, well excuse me Sir. Representative Davis, Chairman, you're recognized for a short Committee Report Sir. Thank you Mr. Chairman. The Finance Committee, sub-committee on Oxy[sp?] Tax met this morning. I will tell you Mr. Chairman, that it was not a quorum nor was there a representative from the minority party, we only have two democrats press on the committee, representative Carney as you know is out on sick leave and the other Democratic representative wasn't present nor did we have an overall quorum, but without objection, we went ahead and met, and the bill that was this agenda received a favorable report. Chairman Davis with unanimous consent, we'll accept that it's properly before the committee. Mr. Chairman Chairman Brawley. Thank you Mr. Chairman. Representative Davis, was the Moore county occupancy tax increase found to be in compliance with our guideliines? Yes sir. If it hadn't been, they wouldn't have received a favorable report. Thank you Mr. Chairman. Yes sir. Thank you Chairman Brawley. With unanimous consent, we'll accept it as being properly before the committee. Hearing no objection, the report is properly before the committee, and we're going to extend the courtesy to the Senate today, and Senator Jackson you're up to bring forward Bill 448, the gentleman is recognized. Thank you Mr. Chairman, good morning members? This Bill is called Equalized Tax on Propane used as Motor Fuel. You know there is a lot vehicles nowadays being run on Propane fuel, and what this Bill does would actually put it because propane has 73% of the efficiency of gasoline, and so in essence when you're buying Propane to put it in a motor vehicle you'll pay more proportionally for the tax than you would if you were buying gasoline or diesel. So what this bill does is rectifies that, this bill passed the Senate unanimously and there's also a bill being introduced in the US Senate by Senator Bob[sp?], Senate Bill 344 that will do the same thing on the Federal Excise Tax but this is just taking care of the Sales State Tax and I'll be glad to answer any questions. Let's see Representative Warren. Just for a motion at appropriate time sir. Any further questions or debate? Senator Waddell, Chairman Szoka. Thank you Mr. Chair, just because I'm not familiar with it, how do you know if Propane is being used as motor fuel as opposed to wipe your tank for your grill or something, I mean I just don't know it's like [xx] Representative I would it would be my guest, so if you're feeling if your grill it'd be a 25 pound cylinder, and if you're feeling if your tank on your vehicle it'd probably be at least a 50 to 100 gallon tank, it would be my assumption, it's what I've seen in place and also that is different when fill up stations. Further discussion, Representative Warren you are recognized. Thank you Mr. Chair, good morning? I'd like to make a motion for a favorable report for Senate Bill 448. You've all heard the motion, the Chair deems the second not necessary. Those in favor say aye? Those oppose say no? Any opinion Chair, the Ayes have it. Congratulations Senator Jackson, and I think as courtesy to you we're going to also take care of 446 at at this time. Yes Sir that would be fine. I don't know if Representative Torbert is in the room or not, but there he is! Thanks Mr. Chairman. He's so short I couldn't see him. But thank you all for the passing, for approving this other one, and Representative Torbert, if you want to join me up here on this bill. I'll do my part and then let you have your part of it, if you want to do that? If that's Ok Mr chairman? That would be in order, Sir. OK, Senate Bill 446 is uniform treatment of franchised dealer loaner vehicles.

I know all of us have been to a dealership at one point in time, and we have asked to buy a vehicle. Well and most time our dealerships will let us have one of those vehicles. We'll come to find out there is all different grades of the way you can get those vehicles licenced and tagged, and basically what we're trying to do is unify through a uniform effort of when you go out to a dealership, all dealerships can do one of two things. And, it would allow that you drive it it would also amend the definition of new motor vehicle to provide that a use of a newer motor vehicle as a service  loaner of new motor owner or demonstrative vehicle does not render the vehicle a used motor vehicle in other words, it would not have as many miles on to be called a demonstrator but it will been a few miles and our section three creates a new registration plate it's called the LED licence plate for franchise dealer loaner vehicle sets up an annual revenue frame for the state being a $200 annual proplexy[sp?] effective July 1st 2016 and would make use of licence plate mandatory effective January the 1st 2019, and that's basically what the three things this bill. The fourth thing provides for the  use of the dealer plate on a demonstration permit and provides that a demonstration permit may be issued by franchised dealer who alone motor vehicle, either way with or without charge to benefit customers who are having a vehicle serviced by the dealer, I know that's a lot being said but the bottom line is this, basically believe my part of this bill is basically just allowing these dealers to legally be able to loan this vehicle when they're working on them, whether it be for a short period of time or whether it be for maybe a week or so, without going through so many hoops to be able to do that. And Representative Torbett. Now I'd be glad to answer any questions on that part of the bill. And Senator Jackson with unanimous concern the PCS is properly before us, hearing no objection the PCS is before us. Representative Torbett. Thank you, My first thanks goes to Senator Jackson, just to let him know he is big in the hearts of the house members. Senator was kind enough to let us add on a few things in the house that had gone ahead and passed out transportation. One is the UAS effort. In essence what the UAS does, it takes last years language and just updates them to what the FAA did in between last year and this year. It makes minor tweaks and adjustments to make sure that we are running parallel with the Federal Aviation Administration. As you may or may not know, the Federal Aviation Administration issued some rules and regulations and they will be handling the licencing of operations of unmanned systems in the national airspace. So we remove the licencing in the sections of all [xx], which means that although you may be licensed to operate inside national airspace by the Federal Aviation Administration. North Carolinaians actually deserve to know who is and what they're operating in their areas and so the state will permit to make sure that those people operating know the rules of the road if you want to put it that way inside the State of North Carolina, what you and what you can't do and it's very, very, very real that they know those laws because you'll be seeing in the upcoming days some announcements her you can be charged with a misdemeanor all the way up to a state act of terror federal active terror if you improperly use one of this systems, we're doing what we can to stay in front of this issue and that's the intent of this language moving out, and I thank the Senator for letting us add that too his bill. Third call I don't see Representative Iowa in here it's pretty just rudimentary. It's not a precedence setting thing but it's his area [**]  asking for some navigational water opportunity to kind of manage that. They also into transportation we've no issues with nobody concerned and that's pretty much the jest of just being not ready for any question Mr Chairman. Representative Adams you're recognized Thank you Mr. Chairman. Just looking at this bill, of course curious about these vehicles not being designated used vehicles, is there a point where they are designated used vehicles? Is there a mileage threshold? There is a mileage threshold that when they do have to be classified as a used vehicle but I'm not exactly sure what that is. Okay. [**] have someone in audience that could answer that question Mr. Chairman? Is anyone in the audience prepared to answer the question?

Mr. Chairman John Powell [xx] on behalf of the North Carolina Automobile Dealer Association. You're recognized. Thank you sir. Basically what this, these provisions in the bill is basically design to, there're a lot of manufacturing incentives and other things that goes along with a vehicle still being designated as new. Under federal law the used car rule, there's really not a designated mileage number, but if a vehicle has been driven for more mileage than it's necessary for demonstration purposes, one of those buyers guides stickers, the used car stickers you see on the windows has to go on there. So regardless of what the North Carolina law would say about whether it's new or not that designation, that customer's disclosure is going to be there. And certainly the mileage on the vehicle is going to show it's not technically it's still a new vehicle for purposes of North Carolina law, the purposes of these incentives that are available to customers when the vehicle is still new. But the adequate disclosure, that is, it's not been, it's not worth a lot, it's been used for other purposes will certainly be there. Thank you.  I knew he could answer it much better that I'd answered it. Any further questions or comments? Representative Stam. I did a lot of hitch hiking in my youth and I'm all in favor of hitch hiking on the senate bills, but I just want to know the procedural status on Part 2 is that past Transportation Committee. The past It's encapsulated inside the current house budget. It's in the house, OK. In part three. Why wouldn't every coastal county have the authority to regulate whatever is not inconsistent with state. Had to defer that to the coastal communities to answer that question. Last question does that bill pass local government or is that a bill or? I do not helping [xx] that's what I was thinking it came out as senate. Thanks. Further discussion, or debate debate from members? Representative Hager is recognized. Thank you, Mr. Chairman. I guess I'll take the opposite side of what Representative Stam has, and I won't ask this question, but I'll find Representative Iler and ask him just to comment about why were you adding on another layer of regulations? Is the question I had on the third part and I'll ask Representative Iler that, thank you. Can I sort of levy[sp?] that water for you Representative Hager? If Mr. Chairman, that would be fine? That would be in order. OK. From my understanding there is an issue down where there's boats have been abandoned and that type of thing, and that's what this is attempting to clean up, is allowing them the opportunity to do that. Mr. Chairman? Yes, Representative Stam. In my remarks are not really an opposition to Representation Hager. My thought is just, is what is there different about Brunswick County that is different than Onslow County, or Carteret, and why should be a different rule for one and the other, so, you can explore that with Representative [xx]. Representative Jones? Thank you Mr. Chair, do you have someone prepared to make a motion? Well, Representative Jones, if you're prepared to do that that will certainly be in order and we would appreciate it. Therefore Mr. Chairman I would move for a favorable report to the proposed committee substitute for senate bill 446 and favorable to the original And the chair deems the second is not necessary, those in favor say aye. Aye. Those opposed no, in the opinion of the chair the ayes have it. Thank you Mr. Chairman, thank you members, always a pleasure to be with you all, thank you. Next in order would be House Bill 38, Representative Davis. And Representative Davis, the chair is understanding that their is an amendment, is that correct? It's a PCS? Okay. Representative Davis, it's the chairs understanding that there is a technical amendment as opposed to a PCS. And there may be another. Yes.  Representative Hager has an amendment, Mr. Chairman that is also a Technical Amendment, but this is PCS that we're starting out with. I don't have a PCS chair. Representative Davis, would you approach, please? [xx] I will okay. It is not a PCS now. Excuse me. I apologise it is not a PCS now and thank you Mr. Chairman for allowing

the bill to be heard, may I proceed? And Representative Davis with unanimous consent the bill is properly before the Committee, and you're also recognized to send forth the technical amendment if you'd prefer to do that or at any time as you're explaining. Thank you. Thank you Mr. Chairman, thank you for allowing this bill to be heard. Ladies and gentlemen of the committee, this bill comprises as it now stands with seven sections. In the last biennium, in between the long on the Short Session Representative Justin Burr and I chaired a Judicial Efficiency Committee, and out of that committee, eight individual bills were introduced in the House, all eight of those bills passed the House, all eight of those bills went to the Senate where nothing was done. Therefore, they failed for lack of consideration, and so when we came back for this new biennium, I introduced House Bill 38 which was comprised of all eight of those bills, as you know there's no limit on how many study bills you can introduce, but there are a limit on regular bills so I comprised all of these sections into one bill. All of the language of the seven sections, with the exception of one as it now stands, is exactly identical except for the effective date as to what was previously presented to the House and passed by the House, also the bill that I introduced in its original form got a a favorable Report from Judiciary II in the House. After it got out of Judiciary II it was referred to Appropriations for some reason. It was never heard in Appropriations because it really should have been there so he got moved the rules and was in the rules a PCS was introduced that made two changes, one change took out one section of the original bill which was a study to see if maintenance of how with twelve vehicle should be put out for beer to the public and that was later removed and it was aside just to keep the system the way it is now the other change was dealing with section 1 and the bill that you now have before you this is the only change from all the things that were previously considered by the house and previously passed in the PCS that was presented in rules the number of copies of appellate decisions when it came out the judicial efficiency it was decided to take away a lot of the copies of appellate decisions that were sent to different organizations and the PCS put those copies back into the bill. So what you before you now, the only difference between what was recently done and now as it stands would be the fact that section one puts back in the number of copies, excuse me, it takes out the number of copies I'm sorry, it adds in the number of copies, it gets confusing, it puts back in the number of copies that was originally taken out in the bill that was recently introduced as a result of judicial efficiency. It's my understanding that Representative Hager is going to offer an amendment that will put the copies back in, that's why I confusing for me and that is yet to be done but I anticipate that coming. I will say that there is a technical amendment that I would like to I believe this has been passed out. I had to put on my magnifying glass because my regular glass is gone [xx] I'm getting a new prescription, that has to do with page three with lines 19 through 24, if you look at the bills that now stand that's under line because that was going to be new law but it's my understanding that this was passed in previous legislation this year, therefore it doesn't need to be underlined because it is now law, it's not change. So what the amendment simply does, is to remove the underlying Mr. Chairman from the bill that is before you and I would move for the amendment to be accepted. You've all heard the motion, further discussion, further debate representative Luebke. Mr. Chairman first of all what amendment are we talking about? As I said representative Luebke has On page three last [xx] through 24.  Alright thank you what that simply does once again is just removes underlying not new law as was previously passed earlier this section, so now it's existing. Now makes sense thank you Sir, thank you for the question. Further discussion further debate? Those in favor say aye.

Aye. Those opposed say no the opinion of the chair technical amendment is adopted, representative Davis. Mr chairman that's all I have to say at this point, I'd be happy to answer any question that anyone would have, I believe that chairman wants to give representative Hager wants to offer the amendment. Okay, representative Hager? thank you Mr chairman, I appreciate the opportunity to offer the amendment move forward, I think two of you have it on your desk this is an amendment that of course puts the bill back like it came from folks I believe we need to be very good stewards of our tax payer dollars and even copies costs $10's of 1000's when you're sending this kind of paper work all over the what I'd rather see is a folks that if they don't get this in their [xx] they need to call [xx] not be obvious knocked out some of this those who probably don't know they're getting the form, other report don't even know who to call so [xx] procedures I think is useless in this case, so what I would like to do to save a little bit of time tax payer money, let's get back to doing what we would, carrying this bureaucracy and be more efficient, thank you Mr chairman. With unanimous consent, the amendment brought here before us, for further discussions, for further questions. Okay, Chairman Szoka. Thank you Mr. Chair and this [XX] Bill sponsor, this provision of providing copies been in been out, and now I'm trying to put it back in. I'm flankly confused, could you explain what the AOC's position is on this. You are probably as confused as I am and I was there. When we did the Judicial Efficiency Study, we were trying to look at ways to make our Judicial System much more economic economic as well as efficient and there was discussion about why so many copies of appellant decisions was sent to all this different organisations so the opinion of the study committee and recommendation was  almost all over taken out there was still some left in there and there was the up down provision included that even those who introduced it they  wanted to opt out,  but there was also a provision that you see it's in the present bill that was in that study bill added the fact that they say that it would be put on a website pulling at little bit in page three that appellant division report should be made available by electronic means and no cost to recipient through publication downloadable format on a public available website so they thought it would be there without been done would so many copies be sent out Follow up So what was the rationale for irrational as the thing was most rationale for distributing all these copies again that was made in laws, I believe I was asked to include that provision and I agreed to do so to keep the bill moving Representative Stam as a consumer of this books, I can give a little insight. First of all, they've been on internet for years, so people who like to work on the internet have had that for years. Secondly, as a budgetary matter, I don't think it matters because most of the people who would be doing it by purchase in the amendment would be purchasing it with state funds, and just to add, the other question is. Is it going to be in the budget of AOC or is it going to be in the budget of Chapel Hill, School's of Law, okay? So it's not really a budgetary matter. The question is, really, what's going to keep your Bill that needs to pass from getting tangled up again, because this like the fifth stop for it. So, do you oppose or support the amendment? I don't think it matters from any top policy standpoint. Thanks for that question, I'm kind of between a rock and a hard place, I was chairman of a committee who recommended this, based on that recommendation I reintroduce the bill in the last [xx] which passed the house and went to the senate. When we came back because it wasn't acted upon by the Senate, I due to the same language again and the bill that we had which passed Judiciary Two with a favorable report. I didn't mind making [xx] is happy to do that but as far as we're all of favor or not, I'm going to leave it up to your conscience. If you want to go with what The Judicial [xx] Committee recommended and we [xx] you'll vote for the amendment. If you want this copy to still go to the entities that sent forth in what was the PCS which is now available for vote for that.

I hate to be, give you a lawyers' [xx], 50% of our friends want it, 50% don't want it and I agree with my friends but that's really where I am, I'm just being properly honest. Representative Mias. Thank you Mr. Chairman I do like the efficiency created by the amendment I have one question for representative Hager thought it would be appropriate Mr. Chairman. That will be order. Representative Hager it can make sense to me why the reports would continue to go to offices of the judicial branch the attorney general's office, why are we going to continue to send them to the department of cultural resources? Thank you for that question and the question is I'm not sure this was the recommendation to come out just officially I just stayed with it, and I'm sure they studied it and so, and again I'm not an attorney and I'm not a medical systems I couldn't tell you. Mr. Chairman if anyone has an answer for that I'd love to just know out of curiosity. Well Mr. Chairman the answer to that. Excuse me representative Mayar I didn't hear what you, are you finished? Sorry. Mr. Chairman and if there's anyone who can tell me why culture resources need the report I'll love an answer to that but I'll leave it up to your discretion Mr. Chairman as to whether you want to take the conversation. Mr. Chairman is anyone prepared to answer representative Meyer's question? If so raise your hand. Representative Stam is recognized. Is in the part of culture resource and the official depository of state records going back to 1669 as I guess that's the reason to make sure they have a complete record. Representative Blast did you have something lucid to add? I was it going to find that some of these decisions are so well written and so well reasoned that they constitute literature, Further discussion, further debate, Representative Jones? Thank you Mr. Chair. I just want to speak in favor of the amendment and I understand the position of the bill' sponsors and I truly don't think this amendment affects the policy of the bill one way or the other, but I can't truly imagine why anybody would, in this day and age, anybody that needs this document is going to have access to an electronic copy and they still have the opportunity if they want to request a paper copy, and I'm still amazed that the amount of paper and ink that get used and in my opinion wasted and I think as Representative Hager say we need to to save taxpayer dollars when we can. I can't imagine how anybody would really be opposed of this amendment unless they are person that has the contract to print these things, but quite honestly I think it should be a no-brainer force, I hope that you will support the amendment. Representative Holley do you have a question or comment about the the amendment? I have a question. You're recognized. I was just curious as to why the nongovernmental entities in here to receive a copy to begin with, we bunch of colleges that are North Carolina colleges, but they aren't state supported schools that are on this list, I was just curious about why in Ellon and Campbell and you know. Representative Hager would you like to respond? Yes Mam I think, yes Sir I apologize representative Harry I think the amendment takes most of those entities I have if I'm not mistaken. The amendments before us this is the vote on the amendment, those in favor say, aye. Aye. Those opposed, no. The opinion of the Chair the ayes have it. At this point the bill has been amended any further discussion or debate and is any one prepared to make a motion? Representative Brast. I move that the amendment be roled to a new committee substitute for that new committee substitute to be given a favorable report unfavorable to the original. And charideens[sp?] the second is not necessary those in favor say aye? Aye. Those oppose no and the opinion of the chair Representative Blast motion passes Thank you Mr. Chair thank you members of the committee As a courtesy Senator Daniel I know you have to catch a plane later if there's no objection we're going to let Senator Daniels bring forward SB 332 we recognize sir Thank you Mr. Chairman members of the committee it's good

to be here with you today this is a bill that saves taxpayer's dollars which you were just talking about in the committee a moment ago and it came to me from my local registrar of deeds and the registrar of deeds association and what they were describing to me is that there are certain real estate instruments that are presented for recording that may have, in a traditional sense you may have a deed that has two or three parties that they have to index and it takes the staff five, 10 minutes to index those three of four names but sometimes there's documents like powers of attorney or restrictive covenant that may have hundreds and hundreds and hundreds of names of individuals who need to be indexed in the public registry that could literally take up a staff member's time two or three days for the cost of 26 dollars so this bill just simply tries to rectify the fees scheduling of how these lengthy documents are recorded so that if there are more than 20 parties to a document then every party after that is a two dollar fee per party so for instance here this is a Wake County document that was provided to me by the Wake County registrar of deeds it's a restrictive governance document has 468 entries that would have to be cross indexed in the registry and so that would obviously exceed the 20 entity limit and would probably take one of their staff members a significant amount a time to do so this is just an attempt to try to I guess save our counties some staff time in recording these lengthy documents. OK. That you Senator Daniel. With unanimous consent, the bill is properly re-force. Any discussions or questions from the committee members. Chairman Martin. Thank you Mr. Chairman. Senator Daniel, I just have a question. This is not like discretionary that it be recorded. Like someone would have to pay this fee. They have to have it recorded with the registrar of deeds. Is that correct? Excuse me, I apologies. I meant to say chairwoman. I meant to say chairwoman excuse me. Mr. Chair. You're recognized. I would say that yes this would typically be documents that would need to be recorded. For instance the one that I have here is an amendment to a declaration on restrictive governance. That amendment once it's approved by the home owners and the home owners association would then need to be recorded in the registrar deeds, other wise they would not be public notice that the restrictions have been amended. So yes I think that they would need to be recorded. Mr Chairman. Representative Stam, just a procedural question. Is this the same bill that passed unanimously out of judiciary II about two weeks ago Or is it a companion Is it? Can I make a motion for favorable report? That would be an order sir.   I so do. that's it. You've all heard the motion, representative Lukie[sp? Right, having an opportunity here to have billing committee, do you know senator Daniel why they put down two dollars instead of 10? Really it was said we're going to cover the cost of it, is really $2 more than to cover the cost of this things, does that make sense to you? And I'll add that I think it's very important we do have a fixed amount as opposed to, as discretion of the clerks or whatever, but then $2 seem kind of low for doing this work, sure. Thank you Luebke, just to clarify this would require $2 per entity above 20, so in the example of documents that I've has 468 entries, the first 20 will be covered under the $26 recording fee, that will be 448 texture which will then be $2 per entities so it will be approximately $900 to record this, so not insignificant. Thank you representative Stam motion is before us, those in favor say aye! Aye. Those who oppose no, in the opinion of the chair the ayes have it. Mr. Chair. Yes. The fact that [xx] chair the after rules to strike additional referred the rules since it's been through so many committees already Does the chair hear representative Stam say he would follow up on that and Mr. Chairman I think representative Jordan was going to handle that on the floor I believe. Thank you senator Daniel Okay, at this time we'll move to House Bill 191 is Representative Pres Oh, there she is.

Representative Presnell you're recognized Thank you Mr. Chairman, this bill is requested by the board examiners, to increase the fees on permits and renewals. It's been about ten years and you've heard the explanation, the bill was before us with unanimous consent and chairman is recognized. At the appropriate time I'd like to make a motion for favorable report. Unless the chair sees a hand go up pretty quickly that would be an order at this time. Thank you sir. I make a motion favorable report for house bill 191.  You've all heard the motion, all in favor say aye? Aye. Those opposed no? The opinion of the chair the ayes have it. Thank you Representative [xx]. And at this time we'll move to house bill 504 and I think the Honorable Neil will be handling the bill today. Allan O'neil thank you. I [xx] but I do represent part or more counties. But anyway, Chairman Hayes and committee, Thank you and good morning. House bill 504 would authorize More County to lay an additional room occupancy tax of 3% and make some technical changes. The bill conforms to the guidelines for occupancy tax adopted by the house committee. More County has been there being a 3% democracy tax since 1987, this would move the total allowable up to 6% which was within the guide lines. As far as the distribution goes the money goes to the More County travel and tourism authority. Two thirds to promote travel and tourism and one third terrorism related expenditures. That pretty much explains the house bill and Mr chairman if there's any questions? Thank you for the explanation sir, the unanimous consent the bill and any further questions or debate, representative Lukie? Representative Lcky. Another short question but I think ti may be to either representative McNeil or representative Davis, did this bill pass the sub committee on On occupancy taxes? Which member would prefer to respond? Representative Davis, you're the chair of that committee, I'm I correct. Yes sir. Mr. Chairman. Will it be in order to ask the chair that question. You're recognized. Yes sir representative Lucke it does meet the guidelines and it did receive a a report out of the sub-committee. Thank you. Yes Mr. Chairman. Representative Davis is recognized. Thank you Mr. Chairman, based upon but it does comply with the guidelines and it did receive a favorable report at the sub-committee I would make a motion for a favorable report. Any further discussion or debate? Representative Davis is recognized. Yes sir I would like to make a motion for a favorable report. And you've heard the motion, chair deems the second not necessary. Those in favor say aye. Aye. Those opposed no No In the opinion of the chair, the ayes have it. Thank you. Thank you representative Neil unless notified otherwise the final Bill will be. Okay Senate Bill 15 and it's my understanding that representative and rules chairman Luis will be handling the Bill. There is an amendment And the chair is understanding there's an amendment. Is that correct, representative Luis? representative Luis is recognized to explain the bill. Thank you Mr. Chairman and members. The bill that you have before you is a largely technical bill. I'll be happy to is deep in to it as the members desire. I will however speaker about a couple of substitute changes that were made since the bill came over from the Senate. I think that might be a better use of our time. And as Senator Rucho here Mr. Chairman I wanted to point him out if you see her leave. The chair has not seen senator [xx] is what he looks like.

We would have heard him by now. You're recognized. Thank you, Mr. Chairman and members you'll notice over on page 10 of the bill. This is a substitute change from the way it passed over from the Senate. What this does is it is essentially being confirmed the members of the employment security board of review which have in fact been serving for the past two years. They were not given legislative confirmation back when they were named in this rights that oversight. It also changes the terms one of the things that the folks that have felt this board is important felt what's important is to maintain continuity of the board so that you didn't have all three members being named at the same time. The chance of all three of them being new and not having experience so this creates a staggered term where that won't take place. You have one named each year to a three year term. Also the bill calls upon the program oversight committee to perform a study about the exact role this board has and what we need. Mr. Chairman I will add that I've consulted with Senator Rucho who was the primary sponsor of this field also have consulted with the governor staff including secretary Fauvel and as best I can tell this an agreed to bill so I would be glad to yield this time. At this time the chair will recognize chairman saying to send forth an amendment and to explain an amendment Thank you chairman the amendment has passed out pretty simple and after [xx] secretary farewell will view the bill before committee page three line 25to line five in substituting three and then the date changing what that will essentially do is put a second plan with what federal requirements are, it does number from two to three but the key is stay compliance and then keeping away from a lot of additional paperwork and confusion at the agency. Anyone else from the agency, we need more explanation but that's what the explanation is. Thank you Mr. Chairman And is there need for further explanation or should it be made forward Okay, you've all heard the amendment of excuse me, excuse chair Representative Gidder  yes Question on the amendment Mr. Chairman, and probably maybe for chairman Sane or former representative Fauvel I guess, the understanding of the amendment is that the federal requirement is three, we're going from two three it seems like to me that, the one thing that I think we do well in this state when it comes to employment is try to incentivize people to go out there and actively look for work, not to suggest that they're not, but trust but verify. I guess what was the original reasoning for five and why the change now because to me asking someone to look for work one day, or make a contact one day a week doesn't seem overly onerous, in my opinion. OK, in this Mr. Chairman, if I could just refer to Secretary Folwell because I can't speak the regional intent of the bill. That would be an order and it's great to have you here, a former colleague, Secretary Folwell. Thank you Mr. Chair. Senator Jeter I agree with you that five one a day is not too much to ask especially when so much of job search now is in electronic. In the unlikely event EB, Extended Benefits ever comes back in the country or in North Carolina, what we would have is we'd have some citizens who would be required to have five work such as [xx] and then some census because they are on EB. We are going to be required three in our local offices and more extra

customers would be very confusing. Number two we have a lot of seasonal employees in North Carolina, whether it's people on the beach who don't work in Winter from Christmas tree farmers as for concrete[sp?] and because the attached claims is not really part of the operating procedure anymore those people have to go through the same work search when they are laid off easily, so it brings to three. The third reason that we're in favor of this amendment is that. There's a national debate going on about the need for [xx] at all because nobody ever follows up on it I'll go offline and explain some of the issues. The third reason is that portion of the over payments that we are deemed to be overpaying is because when it all that goes in and ask you could you provide that work search when you drew unemployment 15 months ago, that piece of paper and so we're getting deemed over payments for something that we're trying to correct obviously and so those are the three main reasons that we've been favored, philosophically I agree with you I feel that administratively this would be better. It's good to see that the Secretary recovered from that motorcycle accident that he used to use as an excuse all the time. That was an inside joke Representative Jones. Thank you Mr. Chair I had a similar line of questioning and the Secretary answered my question, so thank you. Representative Hager. Thank you Mr. Chairman I guess I'm long lines Representative [xx] We all have EB now so why are curtailing this in case we get while we can face cases may have? I just here that much. Sure I'm in favor of reducing this. From five to three, I think just the act of search of getting out there at least one a day keeps folks engaged in the process and keeps them moving towards that, if we want to have an option of going down to three and have only pay three fees of the weekly pay then we need an amendment for that but I don't think we'd ever reduce the amount of time, so I would not be in favor of this amendment. Representative Cunnigham. I have a question for the Secretary. So are we saying that there's not a system to track people when they're doing the job searches. Thank you Representative [xx] there is a system. We as of last year instituted EAI which requires every claimant in North Carolina for the first time to physically appear in office, produce an ID that says they are, they said they were when they filed for this claim, and to produce their work search documents. The other issue is that this was a two and the reason we were getting deemed by The Department of Labor is the previous statute said that those two job searches could not occur on the same day. So what we would have is we'd people showing up for the local offices, they did their job search on Thursday, and then there would be an over payment created because they didn't do one of Wednesday and one on Thursday. So what we're trying to do is we're trying to clean that up, keep it in compliance with the Department of Labor. This is an issue they had brought up when this bill originally came up and we're just trying to make it more efficient, cut down on fraud and make it more customer friendly. Thank you, also I agree with. Representative Cunningham would you like to follow up? It's a question or a comment? OK, recognized for a comment. Thank you, I also agree with the amendment because I do know that a lot of people now are doing online job searches and if you're already unemployment and you happen to go out, yes you're going out but you may want to do two jobs while you're out on one day, or three jobs while you're out on one day of face to face, and you're also doing or maybe two or three online because a lot of places you got to put it in online before you can even go face to face, thank you. Any further discussions, comments or questions on the amendment itself?  I have a question Representative Bradford.  I didn't recognize Mr. Chairman. Thank you Mr. Chairman I got to tell you as an employer, often I have to let folks go because of non-performance yet for whatever reason they still seem to get unemployment benefits and I struggle with this and the

idea that we're going to reduce it from five to three, I'd like us to see us take it from five to 10. These folks have a job to go find a job. They're being paid made to go find a job, and with the internet before us and the ability to go online and search, most certainly the notion to reduce it just does not align with anything that I think passes a reasonable test. I'm most certainly against the amendment and I would appreciate your support to do the same. Thanks. Representative Lewis. Thank you Mr. Chairman, just if I could clarify with Secretary Folwell. Secretary Folwell page three lines 24 through 26, it's currently law that someone must make at least two job contacts. Is that correct sir? Yes sir the currently law is two. So On two separate days. May I ask another question? That would be in order sir. Thank you Mr. Chairman. So the amendment would take that from two to three whereas the original bill takes it from two to five. So either way it is requiring more of are receiving benefits, is that correct? 100% correct, we're increasing it. Representative Falwell, do you have further clarifying comments? OK, Representative Jones is recognized. Well thank you Mr. Chair. I was looking at Secretary Falwell, and I did want to give him the opportunity to make some more clarifying comments. I guess my comment is that what this amendment does is take the bill from five to three, I think we should be very clear about that. Now, I would like to give Secretary Falwell the opportunity to further explain or clarify why he thinks that's a good idea because I think there's some misunderstanding with the members. I understood him to say that, when he was responding to Representative Jeter, that in concept he agreed with the idea that we should have fiber perhaps more, but I think he was trying to explain why he supported this amendment to limit it to three. so I understand the current law was two, but the current bill is five and so the amendment we're voting on is taking it down from five to 30 and and I just wanted to give secretary [xx] the opportunity to clarify for members what I thought he was trying to say earlier but if he has some question final remarks. Secretary Forwell. Thank you representative Jones what you've said is correct but the three reasons to bring it from two to five was to clarify so that people could do work searches on the same day and do one per day and then after receiving information about how this system actually works getting granular about how the law says but actually how it's working. The three years and more appropriate way for the agency to go as I said for three main reasons and probably three more on top of that, and number one is that it complies with the Federal Law of three requirements work searches for AB. Number two, the system is currently in place, it  is producing quote over payments that really aren't over payments, but the Department of Labor sees it as such, and number three, it recognizes some of the work search requirements that are now being put based on seasonal workers in North Carolina from the mountains to the ocean. Who for the first time recalls attached claims or not really part of our standard opening procedure anymore, even though they're quite employed, they still have to go out and do work searches. So it's just an honor in those three instances Representative Johns is recognized for a follow up. Thank you Mr. Chair, just a follow up question for secretary Powell, are you aware of any other states that they require more than three are you familiar if any of them have that policy? There are only four states that require more than three, only four states its require more than three, so this will put us in line with the other 46 states, and also Mr. Chairman if I might, not everybody we do have a mobile population where people do go from state to state and as much as our work searches can be in line with what they are in 46 other states, it's obviously better. And Chairman Lewis is recognized.

Mr. Chairman I had a quick question for staff if I might. That would be an order sir Thank you Mr. Chairman. The bulk of this language in this bill was recommended by the joint legislative oversight committee on unemployment insurance staff knows  they considered the five-day verse three-day verse two-day provision if so obviously some how five days is in the bill, so could we, I didn't serve on that committee. Mr. Chairman I did serve on Mr. Chairman Yes, Representative Howard is recognized. Thank you sir. I did serve on that committee, we went through all the recommendations in order to clean up some actions that had transpired in the department that were not authorized and not appropriate. Senator Rachel also served with, representative Warren and representative [xx] that committee was almost vote for five and I would ask that we stay with that opposed to further reducing it to 30. The chair thinks the next person or representative Mayer, no need to be recognized. Representative Brad I just want to make a follow up thank you Mr chairman, thank you representative [xx] further clarification I know I said five [xx] two to three I guess the point I'm making and I appreciate your comments Mr secretary the reality is we're talking about unemployment benefits that are tax payer dollars and this is about behavior, we have to drive behavior so that people who are getting unemployment benefits which is a wonderful thing to be able to provide at the same time we have a responsibility as body to make sure that those individuals are driven and have a behavior and are insentivised as to go find employment, and if we take this number and move it from two to three whenever moving it to five to me still seems very reasonable, that means from just an odds perspective, five times a week the chances of this folks to find employment and get off the system drastically improves. So for that reason I support five, which is the original bill and still stands against to the amendment although I do understand those remarks from the secretary and I do appreciate those thank you. Chairman [xx] is recognized. Thank you Mr chair again I think that secretary Fowler has made a good case for it, but at the same time I think if we can, in debate of one way or the other three or five or whatever if you're hungry and are looking for work you're going to be looking for regardless of what the number is I know that chairman Luis is going to as a favor to the bill sponsor opposed it I can see the way, I don't think this in any way affects the overall outcome of this bill and it's a good bill and we'll move forward Representative Louis is recognized. Thank you Mr chairman, members I sort clarification so that we can all understand this bill or the amendment as best we could, I do think that the sector bring some good points that need to be reviewed but I found myself on this question about what representative Hager is, which is that, at this time, the concern for the extended, the EB as he says, really before so with that I'd ask that the members to fit this amendment and we move forward with the bill as it was drafted. Representative Warren. Thank you, Mr. Chair. I would just like to know if the amendment sponsor would consider withdrawing the amendment, and perhaps, I think one of the valid arguments that the Secretary put forth is the conflict of Job Search requirements if you're in a case of extended benefits. So I would suggest that maybe perhaps withdraw the amendment and consult on maybe on the floor propose an amendment that would stiplify in the event the State went into extended benefits then it would revert to three. Representative Warren. Mr. Chai. Mr. Chairman.   Representative Stein is recognized. Mr. Chairman, I'll withdraw the amendment. Mr. Chair. Representative Jones If I might be recognized. Would this have to do with the Stein Amendment? Yes sir. And he's withdrawn it, so is it necessary at this point? Yes Sir, I'd just like to the gentleman is recognized. Thank you, Senator Stein I

was noticing that the second potion of the amendment does not seem to be controversial, and I was going to suggest perhaps rather than withdrawing the amendment that you just change the amendment to take out the first portion which is controversial, and go followed with the second portion which simply changes the effective day, and it does not seem to be controversial. How do you feel about that. Mr. Chairman if I may. That would be in order sir. Thank you. I think we can handle this verbally, I'll just make a new amendment that reads and on page four, line 13 by the leaving January 1, 2016 and substituting October 1st 2015 as the amendment, I'll make that amendment and leave it to you. Is that a perfected amendment? That's a perfecting amendment and the Chair deems that to be to be in order so we now have the perfecting amendment with unanimous consent force so we're now on the perfecting amendment, Representative Louise we support the perfecting we support the amendment as perfected and Representative Gidder[sp?] move approval of the perfected amendment you've all heard the motion no second is necessary those in favor say I those oppose no, the perfecting amendment is passed Representative Louis For motion Mr. Chair? You are recognized sir Thank you Mr. Chairman, Mr. Chairman I move that the amendment be rolled into a new substitute and at that committee substitute to be given a favorable report and favorable to the original bill representative Stan, sorry yeah first the procedure thing I think all you've done is perfect the amendment you still need to vote on the amendment and then I have a comment on the bill that in the opinion of the chair that's what we did but just to make sure we can always have another vote on the perfecting amendment those on favor say I not on the perfecting amendment but as the amendment as perfected.  and representative Loius made the motion to roll everything into this, so unless the stuff sees a problem with where we are, are we prepared to vote at this point  okay, and if it pleases the committee we'll vote on the amendment as perfected, so all the perfecting Mr. Chairman The same amendment as perfected Ford. The amendment hasn't been perfected. Mr. Chairman representative Saine is recognized. To speak to the amendment,  Hey you all vote for the amendment. Do we have any more comments on this perfecting amendment. [xx] and now that we've done that four times let's move on to where we were with Representative Lewis. Representative Lewis, is that your understanding that you've made a motion. Yes Mr. Chairman, if it was in order. And the chair deems it in order. Those in favor say aye. Aye.  Those oppose say no. In the opinion of the chair, the ayes have it.  Mr. Chairman and if Mr. Chairman, I was seeking recognition to speak on the motion but I was delaying it because we never actually getting a vote on the side of a member, but they're, can you unwind? in the interest of time, it is in the discretion of the chair to go back and make sure that you as a member or satisfied. Do you have a motion on an amendment? No I have a speech on the bill. Okay. Would you also include in your speech the amendment as you would prefer to see it so we could be procedurally in order. I don't have an amendment. Okay. Mr. Chairman? Representative Stam is recognized.yes.on the bills itself, I want to conceptually disagree with my friend Representative Bradford on what we're doing here. It's not a big discrepancy, just conceptually. These are not tax payers dollars at all. The money is sent from employers. It's called a tax, but really what it is, if I can have the attention of the body, it's an insurance premium.

It's called an employment insurance In terms, in my opinion, the money doesn't even come from the employers, the employers write the cheque but the money in economic terms comes from employees so that in fashioning a good unemployment the insurance system, you should take what a rational employee who doesn't expect to be an employee but realizes it might be happen occasionally through no fault of his or her own to do the system I just wanted to make that point, that's how we should look at it, is from the eyes of the rational but possibly unemployed employee in the future, thanks. And if there is no objection, to respect the integrity of the Committee and the rights of the minority and the majority we would retake the vote so that it's clear on the amendment as perfected. Those in favor say say aye? Aye. Those opposed say no. In the opinion of the chair the ayes have it. And then we would follow up once more with Representative Loius' motion if he would Mr. Chairman I move that the, I move that the amendment that was passed be rode into a new proposed committee substitute for senate bill 15 and that bill be given, that proposed committee substitute be given a favorable report, unfavorable to the original bill. And you've all heard the motion, those in favor say aye? Aye. Those opposed no? In the opinion of the chair it passes. Thank you Mr. Chairman, thank you members. Good job. Yes. Not officially, but you can talk to your friends because I want to clear up some things with staff. Okay. Unless we have further business, or questions or comments from the members, or the other chairs the meeting is adjourned. Thank you.