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House | July 23, 2013 | Chamber | Session Part 2

Full MP3 Audio File

The house will come to order. Senate bill 683, the clerk will read. [SPEAKER CHANGES] To the president of the senate, and the speaker of the house of representatives, the conferees appoint to resolve the differences between the senate and house of representatives on senate bill 683, a bill ?? to create a safe harbor for victims of human trafficking, and for prostituted minors, modify the membership of the North Carolina human trafficking commission, and provide for parole consideration for certain inmates sentence under the fair sentencing act. Conferees recommend the senate and house of representatives adopt this report. Conferees for the senate, Senator Goolsby, chair, Senators Barringer and Kinniard. Conferees for the house of representatives, Representative Glazier, chair, Representative Conrad, Davis and McGrady. [SPEAKER CHANGES] Representative Glazier is recognized. [SPEAKER CHANGES] Thank you very much, Mr. Speaker. And this is for a motion to adopt the conference report and to speak to the motion. [SPEAKER CHANGES] You're recognized. [SPEAKER CHANGES] Thank you very much, Mr. Speaker. Members, this is a large bill, that we talked about on the floor, that there was only several differences between the house and the senate on the human trafficking bill. This is a great work by Representative Hamilton, and Representative Davis, and their bill. And let me explain the two changes. The first change is that we had included some larger investigative grand jury capacity beyond human trafficking to look at other offenses. The senate wanted to limit it to human trafficking, and the current law of drug offenses. The house agreed with that, and so that provision was changed. The major change was with regard to those boys and girls ages 16 to 17, who are engaged in acts of what we used to call prostitution. The question became how to handle those, whether to defer prosecution on those minors or to grant them immunity and put them into treatment, and truly safe harbor. The majority of the house conferees and all the senate conferees agreed to the senate language, which is to grant immunity for 16 and 17 year olds, to refer their cases to DSS and to the juvenile court for treatment and for assistance. But to recognize the 95% of those women and boys are victims, and we don't criminally prosecute victims. And, I I will say that other language with deferred prosecution occurs at age 18, but if the prostitution acts continue, then the 18-year-old may be prosecuted as an adult. So, that is to change, I would ask Mr. Speaker if you might recognize Representative Davis or Representative Hamilton if they have anything to add, and I recommend the conference report to you. [SPEAKER CHANGES] Further discussion or debate? Representative Davis is recognized. [SPEAKER CHANGES] Thank you Mr. Speaker. Comment on the bill. This is a great bill. Something that we've really need to address, a very serious problem, and I ask for your support. [SPEAKER CHANGES] Representative Hamilton is recognized. [SPEAKER CHANGES] Thank you Mr. Speaker. Just to reiterate the same and to just acknowledge that's night is a very historic moment for North Carolina, and we're finally moving forward with some very important legislation to protect our children for decades to come. Thank you. [SPEAKER CHANGES] Further discussion or debate? If not, the motion is to adopt the conference report. All those in favor will vote aye, all those opposed will vote no. The clerk will open the vote. The clerk will lock the machine, and record the vote. The aye are 103, the no's are zero. The motion is passed, and the senate will be so notified. Representative Hardister, are you ready for the conference report on senate bill 337? The clerk will read. [SPEAKER CHANGES] To the president of the senate, and the speaker the house of representatives the conferees appoint to resolve the difference between the senate and house of representatives on senate bill 337, a bill to entitle anact to create the North Carolina charter schools advisory board, and to make other changes to charter school laws. The conferees recommend the senate and house of representatives adopt this report. Conferees for the senate, Senator Tillman, chair, senators Wade and Clark, conferees for the house of representatives, Representative Stam, chair, Representative Hardister, Glazier and Bryan. [SPEAKER CHANGES] Representative Hardister is recognized to make a motion, and to debate the motion. [SPEAKER CHANGES] Thank you Mr. Speaker. I'd like to move that we do adopt this conference report

Members, you may have noticed this bill’s been on and off the calendar the last few days. The reason for that is because we adopted a conference report then we decided to go back and renegotiate and then we adopted an alternate conference report, got the signatures today. All the conferees have signed off on it. I’ll briefly go through the changes that we made to the bill. Most of those changes are technical. As you can see in the title, the bill will establish a charter school advisory board and make certain changes to laws governing charter schools. In the conference committee we decided that it would be best to allow the governor to appoint the charity advisory board, but the board would appoint the vice chair internally. The bill would require the state board of education to establish charter application fees of no less that $500, no more that $1000. Required charter schools to comply with a criminal background check policies of the LEA in which they are located. Require that 50% of teachers in grades K-12 be certified. Allow real estate where charter schools are located to be tax exempt, but the property must be used exclusively for educational purposes. There may have been some other technical changes, but those are the highlights. Mr. Speaker, I’d like to see if Representative Glazier might be recognized for a moment to speak to the motion. [SPEAKER CHANGES] Representative Glazier is recognized to debate the motion. [SPEAKER CHANGES] Thank you very much, Mr. Speaker. I did sign the conference report and do recommend it to you and just want to highlight the 50% rule that’s in there. Those of you may remember when the Senate passed this bill it had 0% requirement for certified teachers. The House put it at 50%. The House provision has prevailed with the help of Representative Hardister and those on the conference committee on the House side. And the governor’s office. Because of that, I really do recommend that we adopt the conference report. Thank you. [SPEAKER CHANGES] Further discussion or debate? If not, the question before the House… [SPEAKER CHANGES] Mr. Speaker. [SPEAKER CHANGES] Representative Adams is recognized. [SPEAKER CHANGES] Yes. I have a question for Representative Glazier. [SPEAKER CHANGES] Representative Glazier do you yield? [SPEAKER CHANGES] I do yield. [SPEAKER CHANGES] Thank you, Representative. Did I understand you to say only 50%, does that mean that 50% will not be certified? [SPEAKER CHANGES] Do not have to be. There’s a minimum requirement of the 50% The charter school could have 100%, but when the Senate passed this bill they had zero. We put in, on the House side, 50%, they tried to compromise it down to 25%, we got it back to 50% and I think, given the circumstances, I felt like that was absolutely the best that we could do. [SPEAKER CHANGES] Further discussion or debate. If not the question before the House is the passage of the motion to adopt the conference report. All in favor vote aye, all opposed vote no. The clerk will unlock the machine and open the vote. The clerk will lock the machine and record the vote. 88 voted aye and 22 voting no, the motion passed. The Senate will be so notified. Representative Schaffer are you ready? House Bill 937. The clerk will read. [SPEAKER CHANGES] To the President of the Senate and Speaker of the House of Representatives, the conferees ?? the difference between the Senate and the House of the Representatives on House Bill 937. The bill has been entitled to increase penalties on certain crimes in which a firearm is used. The conferees recommend that the Senate and House of Representatives adopt this report. Conferees of the Senate, Senator Newton, chair, Senators Harrington, Brock and Randleman. Conferees for the House of Representatives, Representative Schaffer, chair, Representative Burr, Faircloth, and Cleveland. [SPEAKER CHANGES] Representative Schaffer is recognized. [SPEAKER CHANGES] Thank you Mr. Speaker. I rise to make a motion that we do adopt this conference report and also to speak to that motion. [SPEAKER CHANGES] You are recognized. [SPEAKER CHANGES] Thank you Mr. Speaker. Ladies and gentlemen, as you know House Bill 937, from its inception, has been an effort to protect the rights of individuals who abide by our gun laws and to increase the criminal penalties for those who do not. When we entered the drafting process of House Bill 937, we wanted a bill that had the support of both sides of this issue. We wanted support from law enforcement, wanted support from our second amendment advocates. In the House version of that, we were able to achieve that. We had a formal endorsement from the Sheriff’s Association. When the bill went back to the Senate, there were a few additions that the Senate had made. When it returned to us, there was one particular sticking point, that has been the pistol permit issue.

What that has done is that our sheriffs have given us some pause. It's given pause to a few of our members, that we need to take some time to consider what it is that we needed to do. That we needed to repeal this Pistol-Permit situation, or not. Given our desire to have a consensus bill, we did want to take that time, and we were able to do that in our conference committee. Before I get to the conference ?? specifically I do want to speak to the proposal for the repeal of the Pistol-Permit system. That proposal is not without merit. I believe there is wide spread agreement that the Pistol-Permit system in North Carolina is flawed. We have agreement from folks from all sides of the issue, including our sheriffs' organization. What we do not have agreement on is exactly how to remedy those flaws. Whether a full repeal is appropriate or whether to make fixes to the Pistol-Permit system. A few of those flaws I want to speak to briefly. One of them concerns arbitrary enforcement of some of the laws. There is really no uniformity of practices going on. So you can have a difference of outcomes, for example in ?? county versus ?? county for the same kind of applicant. That's something that needs to be fixed so that we have a more uniform system. The most notable flaw however, and I'm sure that many of you have heard about it the last couple of weeks, is what has been dubbed the armed felons loophole. As many of you know, the pistol-permit is good for five years, so what we have under our current system is that an individual can be granted a pistol permit and in year one they can go out and commit a felony and in year two or year three they can use their pistol-permit to purchase a gun. We have some concerns with that. It's something that we would like to fix. One proposal to solve these issues has been to eliminate the Pistol-Permit system all together and require that there be instead of a background check with the pistol-permit system that there be a background check at the point of sale using the NICS[??] database. One point of concern that has been raised by a few folks within our own chamber as well as our sheriffs is that the current NICS[??] database does not have all of the information that we need to make an appropriate background check at that point of sale. So that's a little bit of background from the things we considered in our conference committee discussion. So, the outcome of that conference committee, what we have done, what we have decided, is to forgo the repeal at this time, once we got into the ?? of these issues. We realized there were a lot of moving parts, things that needed to be considered, infrastructural needs that needed to be addressed, and in short, we needed more time to study them. So what we will do, we will study them in the interim, and if there is something that comes out of that study that determines we need to repeal the system or make more permanent fixes then we'll do that. In the meantime, some of these flaws need to be fixed. Most notably this felon loophole. So in the conference report there are a few important fixes to close that loophole. The first one concerns the sheriffs revocation of pistol permits. Right now, the sheriffs are not required, and are not really set up for when a pistol permit holder commits a felony or some other disqualifying offense. They have no system for going out and revoking that permit. So what we've done in the conference report is we've put language in there that would require the sheriffs to do this. It's language that tracks[??] with the current system for revoking a concealed-carry permit. So upon a disqualifying offense, something that would have originally disqualified the permittee from receiving the permit, then the're going to have to revoke that permit. What we've also done, for the interim, we've added some clarifying language to be filled during our next reporting. That's one of our major concerns about the NICS database at this time. So we're going to go ahead and require that there be better reporting in that respect. The last thing concerns that arbitrary enforcement. We've added some clarifying and technical changes throughout our current laws, to the pistol-permit system, to ensure that there is more uniform enforcement of those laws, to really decrease the incidence of the arbitrary enforcement. In sum, as I said at the beginning, we entered this bill seeking consensus from both sides of the issue. We have continued working through these issues with stakeholders. We've continued working with sheriffs. We've addressed their concerns in this bill. We've addressed the concerns of members in this bill. And in the end I believe we have a conference report that appropriately protects the Second Amendment rights of individuals and properly cracks down on gun crime. With that I strongly support this conference report, and ask you to join me. [SPEAKER CHANGES] The floor recognizes

Representative Grier Martin for debate. Got a couple of administrative matters. Special messages from The Senate The Clerk will read. [SPEAKER CHANGES] Senate Committee Substitute for House Bill 726, a bill to be entitled An Act to Authorize in Wake County ?? Vehicle Construction, Improvement, Ownership and Acquisition of Public School Property. [SPEAKER CHANGES] Calendar July 24. Tomorrow. [SPEAKER CHANGES] Senate Committee Substitute #2 for House Bill 857. A bill to be entitled An Act to Authorizing Public Contracts to Utilize the Design and Build Method for Public/Private Partnership Construction Contracts. [SPEAKER CHANGES] Calendar for today. [SPEAKER CHANGES] Special message from The Senate. Mr. Speaker's ordered that a message be sent to The Senate, fails to concur in The Senate Committee Substitute to Senate Bill 127 a bill to be entitled An Act To Establish Geographically Uniform Zones To Promote Collaboration For Prosperity Within The State. [SPEAKER CHANGES] Noted. [SPEAKER CHANGES] The, Mr. Speaker has ordered that a message be sent to The House Of Representatives with the information that The Senate fails to concur The House Committee Substitute #2 to Senate Bill 501 a bill to be entitled An Act To Modify The Definition Of All-Terrain Vehicle To Reflect Changes In The Type Of All-Terrain Vehicles Sold In North Carolina. Respectfully, Senator Lane, principal Clerk. [SPEAKER CHANGES] Noted. Representative West is recognized to send forth the conference report. [SPEAKER CHANGES] To The President Of The Senate, Speaker Of The House Of Representatives, ?? a conference to resolve the differences between The Senate and The House Of Representatives on House Bill 493. A bill to be entitled An Act To Authorize ?? To Levy An Occupancy Tax To Amend The Existing Graham County Occupancy Tax And Create A Taxing District In Graham County For The Purpose Of Levying A 3% Room, Occupancy and Tourism Development Tax. The conferees recommend that The Senate and The House of Representatives adopt this report. Conferees for The Senate, Senator Apodaca, Chair. Senator Hise and Davis. Conferees for The House Of Representatives, Representative West, Chair. [SPEAKER CHANGES] Calendar today without objection. Calendar today. Representative Queen did you want to recognized for. [SPEAKER CHANGES] Yes sir. [SPEAKER CHANGES] Request. [SPEAKER CHANGES] I just wanted to be noted as voting aye on the human trafficking bill. I was in the chamber but my button wasn't working somehow [SPEAKER CHANGES] Request granted. [SPEAKER CHANGES] Representative Grier Martin is recognized to debate the bill. [SPEAKER CHANGES] Thank you very much Mr. Speaker. Ladies and gentleman the gentleman from Harnett, Representative Lewis, drew me what on paper what is one ugly district. But I found as I represented it for a few months and ?? about it, on the ground it's actually very beautiful. And one of the things I enjoy most about representing it is that it has a high percentage of institutions of higher learning. It's got William Peace University, Meredith College and portions of North Carolina State. It doesn't have St. Augs in it but I do think there's some parts of my district that picks up students from St. Augs in it. In my previous district I also represented The President of St. Augs and The President of Peace University. In addition my grandfather was The President of the College of North Carolina, my father was involved in university administration. A trend which you'll note because my lack of brain power will stop at my generation. But my point being I have an affinity for institutions of higher learning and many of my bosses are directly involved in that endeavor. And I haven't heard from a single one of them thinking that this bill is a good idea. That the introduction, further introduction of guns on campus is in anyway gonna further their educational mission, in any way going to make their campuses safer. Now, what this bill does is not the end of the world. I'm not gonna predict dire consequences in and of the bill itself. I do have some serious concerns though about what the future will bring. We talk a little bit too much, take this moment to remember former Representative Phil Hare and his ?? under the nose of the tin argument. And I worry that that's what's happening here. That if guns get a foothold on our college campuses that a lot scarier things await. So let's let this be the end of it. I'm voting against it. But those of you that are voting for it, let it stop here and go no further on our campuses. Thank you. [SPEAKER CHANGES] Representative Luebke could you please state your purpose. [SPEAKER CHANGES] Representative Schaffer yield for question? [SPEAKER CHANGES] Representative Schaffer does the lady yield? [SPEAKER CHANGES] I yield. [SPEAKER CHANGES] The lady yields. [SPEAKER CHANGES] Representative Schaffer I just wanna ask you, when you talked about all the parties were at the table but I didn't hear you make any mention of gun safety advocates. Were in fact those who argue on behalf of gun safety or have those concerns, were they.

further debate? [SPEAKER CHANGES] Let me answer that in two parts. The first thing is that I mentioned that the people who are usually on the opposite sides of these issues were at the table, and I called them stakeholders, and we have discussed those things. But this bill has been fully vetted in committee, debated, lots of public comment, we did have advocates from gun violence organizations there giving their opinion. The same thing happened on the senate side. So there opinions have been heard. They have been considered. We have drafted and crafted a very narrow bill. One that attends to appropriately protect the rights of second amendment folks, and cracked down on gun crime, and really increase the penalties for that. A major portion of this bill that has to do with concealed handgun permits. So we're talking about a very specific subset of the citizenry, folks who have gone through the background checks, the training, 21 years and older. So it is limited in that respect. So we have taken those issues into consideration. [SPEAKER CHANGES] Speak briefly on the conference report. [SPEAKER CHANGES] The gentleman is recognized to debate the motion. [SPEAKER CHANGES] First of all, thank you, Representative Schaffer. Appreciate it. Members of the house, this is a bill that if you read through it, and representative Martin made reference to in terms of the access to the college campuses. This is a bill that is in fact not balanced. It does not represent the kinds of concerns that gun safety groups have. Those perspectives were perhaps listened to, but they're not included in the bill. And for that reason alone, besides the content actually what's in the bill, I would encourage you to vote against the conference report. Thank you. [SPEAKER CHANGES] Mr. Speaker. [SPEAKER CHANGES] Representative Brawley, please state your purpose. [SPEAKER CHANGES] Asked Representative Luebke a question. [SPEAKER CHANGES] Representative Luebke, does the gentleman yield? [SPEAKER CHANGES] I yield. [SPEAKER CHANGES] Gentlemen yields. [SPEAKER CHANGES] Representative Lupe, wouldn't you agree with me that gun owners are gun safety advocates? [SPEAKER CHANGES] Representative Brawley, the way I would put it is this. A gun safety group is a group which is concerned about just that, gun safety, and doesn't in and of itself mean necessarily gun owners. [SPEAKER CHANGES] Representative Michaux, please state your purpose. [SPEAKER CHANGES] To speak on the report. [SPEAKER CHANGES] The gentleman is recognized to debate the motion. [SPEAKER CHANGES] Mr. Speaker, ladies and gentlemen of the house, you've heard me argue article one section 30 of the constitution on the matter of concealed weapons. But what concerns me here is that under this bill, the concealed weapons records are kept confidential. Well, if I were to stand up here and tell you that I agree that you have a constitutional right to carry that weapon under the United States constitution, then probably voting registration lists should be kept confidential also, because they are open and can be subject to some of the same things that you claim would happen if these people were identified by opening their lists. For instance, you say that if we don't keep it confidential then people know who have guns around, and will try to steal them or try to do some harm to them or something like that. I'd say that that has been done with those persons who were on voter registration rolls. They have been threatened, and everything else. So if you're going to make these records confidential, I would assume that you would want to make voting records, the voting registration records confidential. And when we do that, then I'll vote for this bill. [SPEAKER CHANGES] Representative Glazier, please state your purpose. [SPEAKER CHANGES] To see if Representative Schaffer will yield for question. [SPEAKER CHANGES] Representatives Schaffer, does the lady yield? [SPEAKER CHANGES] I yield. [SPEAKER CHANGES] The lady yields. [SPEAKER CHANGES] Thank you, Mr. Speaker. Thank you, representative. If you could explain, and I apologize, I'm just trying to locate, does this bill have any provisions, or the conference report have any provisions as relates to the carrying of firearms, concealed or otherwise, on K-12 campuses? [SPEAKER CHANGES] Yes it does. It is contained in section two. Bear with me for a moment. That is on page three of section two, subsection K. [SPEAKER CHANGES] And could you follow that, Mr. Speaker.

The lady yields SPEAKER CHANGES Thank you Mr. Speaker thank you Mr. Representative. Could you explain exactly what it does for purposes of K12 campuses thank you SPEAKER CHANGES Sure. What it does is that is permits someone who has a concealed handgun permit to keep their concealed weapon in their car in a closed container in their car they cannot take it out. It allows them to have that on a campus of a K12. You know the very classic situation of the individual who is taking their child to school who prefers to carry their weapon in their car with them for safety purposes that they would not have to take the weapon out before SPEAKER CHANGES One last question Mr. Speaker. SPEAKER CHANGES The lady yields. SPEAKER CHANGES And is it limited to is it clear that they cannot take that gun out of the car? SPEAKER CHANGES Yes it is. SPEAKER CHANGES Thank you and to speak on the bill Mr. Speaker SPEAKER CHANGES The gentleman is recognized to to debate the motion. SPEAKER CHANGES Thank you Mr. Speaker. I have two things. To say to the representative one is for the resolution and I think an appropriate one. On the permit issue that came up in the senate and second for the portions of the bill the really do and I think are important. My disagreement on the bill is what it was when I first heard it and Representative Martin being kinder than I am I am more of a gentleman I think I am going to go a bit further. The bill as I remember was opposed by all of the police chiefs and all of the chancellors all of the institutional campuses that are in charge of student safety. And while there are arguments on both sides of this and I. Only time will tell on this and which way works. I really feel we ought to have differed to all of the people who are in charge of all of the students and did not differ and so that ix my first problem and as it protects in as senator shaffer said it protects people who believe in second I fear and I question whether it protects the public safety on the end that is where she and I disagree and i hope i am wrong but I fear that I am not. In terms of college campuses and the variety of people who are on college campuses. My second problem with the bill is the restaurant provision that was in it and there I just have a real problem with the mixture of alcohol and guns. And while I do believe and actually do agree with representative Raleigh's point of view. While a vast majority of concealed gun owners really are some of the safest gun users that there are. and I do not disagree with that at all we have a lot in my neck of the woods I also know someone drinks regardless of how safe they are in their personal lives regardless of how conscious and good they are in their personal lives. Bad things happen when people get drunk. And now we have thrown weapon into the mix. having been at a number of Friday night dinners and events at restaurants in fayetteville on payday weekend with the population they have and seeing the alcohol there and standing on the side I hope I am wrong but I fear I am right because I think this does not support public safety and I fear the reverse consequence I will be voting no SPEAKER CHANGES Representative Floyd please state your purpose SPEAKER CHANGES Mr. Speaker at the conclusion of this vote I have an inquiry to the chair. SPEAKER CHANGES The chair will return at the appropriate time. SPEAKER CHANGES Representative Fairclaw Please state your purpose. SPEAKER CHANGES To debate the bill. SPEAKER CHANGES The gentleman is recognized to debate the motion. SPEAKER CHANGES Thank you Mr. Speaker and members of the house. We talked about this bill early on, we were considering it before and some of these issues have came up some things have changed during the discussion of this bill and during the hearing of the Senate. and in all of the emails and in all of the personal conflicts that many of us have had in discussing this. Some of the questions that come up are exactly the ones that have been raised here. by my fellow legislators. What about somebody with a concealed carry permit being being allowed to carry a gun onto a campus under conditions requiring it to be locked up etcetera. I have talked to chancellors I have talked to Police chiefs on the campuses about this and my first question to them is. How many guns do you think have been on their campus in the last month? And their answer is I hope none. Now do you think that is true? particularly when for instance you have a main street running though your campus and someone is coming to visit the chancellor and the happen to have a concealed carry a permit.

stopping and having someone keep their guns for them until they get back from theyre visit. or remember to leave it at home which they probably didnt do because they happen just to put it in their car park it and leave it somewhere. Probably what they do is drive to the campus visit the chancellor and leave, and no body ever knew that gun was there. Lets not fool ourselves there are guns on our campus. We don't like the idea, but they are there. The difference that comes about with this bill is that the police chiefs of those campuses who are very much interested in this issue will have access to the concealed carry permits. So that they can at least now know wether or not someone is coming on their campus and wether or not they have a concealed carry permit. What would raise their reason to inquire about that could be one of many things, but at least they have more information available to them under this bill than they presently have. Also the concern about concealed carry enrushment. I had to thing along time about this one. I had been in a lot of enrushment in my time some of them in pretty rowdy places, I've seen some really good bar fights. But then I had to ask myself how many times have I picked up the headlines of our main newspapers here in the states. Wether it be the triad, the triangle, or Charlotte what ever the case maybe and read in that headline "concealed carrier commits crime." Can u remember how many times you've seen that. You dont see it much, responsible people generally are the ones who have concealed carry. They dont want to get in trouble, they don't want to ruin what they know is a good constitutional right. Can an accident happen your dog gone right it can, but the provisions of this bill IF we're going to have concealed carry puts us in the right direction. We still got some work to do, but its in the right direction, and I urge you to support it. Representman Pittman, please state your purpose. To debate the bill The ?? right now is to debate the motion I want to say how much I appreciate those who have worked on improving this bill it was pretty good last year, and they worked on it made an even better bill since it went to the senate. I've said before it doesn't goes as far as I'd like too, but it does make some good progress, and I appreciate that very much. I appreciate the addition of assisted district attorneys, and investigators employed by the office of district attorney, and added to this list because specifically asked to do that by assited district attorney in my district. As far as guns on campus something was said about it being scary about having guns on campus you know locked up in a car. To me its a lot more scary to think that a child ????. A lot more scary to me to think of a Virginia Tech situation in which a criminal comes on campus. He doesn't care what the gun laws are, and start shooting up the place, and there is no body, no professor, no student, no staff person, that could stop that, and put that criminal down before he kills 32 people. Thats a lot more scary to me than having a gun locked up on campus. Anyways this bill does some good things. Its moved us in the right direction. I do hope we eventually get to a point of constitutional carry, but this is good progress and I appreciate it and hope you'll vote for it. Thank you. Representative Cunningham, please state your purpose Thanks you Mr. Speaker. I have a question for the bill sponsor. Representative Chayford does the lady yield? I yield. The Lady yields. Thank You. On page 10 line 26 it talks about people that are on narcotics or marijuana. Are we planning to do screening for drugs for everyone that is going to buy a gun. Thank you. Thank you for the question. The question here concerns the disqualifying offenses for individuals for people already that was referred as to what was already in the current law. This is what already disqualifies an individual from receiving a pistol permit.

Drug related issues, as well as our criminal offenses, additional criminal offenses. And so this is what is already in the current law and things that we are already checking for. [SPEAKER CHANGES] Representative Collins, please state your purpose. [SPEAKER CHANGES] To briefly debate the bill. [SPEAKER CHANGES] The gentleman is recognized to debate the motion. [SPEAKER CHANGES] Just wanna make sure one point is clarified. A lot of straw enemies are built sometimes when we discuss these bills. And one is the guy who's going in the bar, getting drunk and carrying his concealed weapon with him. This bill does not allow a person consuming alcohol to carry a concealed weapon. Just want to make sure that's clear. On the other hand, my wife and I are both concealed carry permit holders, and we go in restaurants that serve alcohol at least once a week. Probably 100 times a year. Without ever consuming alcohol. So, why should I be told that I can't carry my concealed weapon in there just because other people are drinking alcohol? If they're drinking alcohol and carrying a weapon, then they're violating the law. So I wanna make sure that's clear. This law in no way gives people the excuse to carry concealed weapons while they're consuming alcohol. It does not do that. And I support this bill. [SPEAKER CHANGES] The question before the house is the motion for the adoption of the conference report for house bill 937. All in favor vote aye, all opposed vote no. The clerk will open the vote. The clerk will lock the machine and record the vote. 73 having voted affirmative, 41 in the negative. The conference report for house bill 937 has been adopted. The senate will be so notified. House bill 831, the clerk will read. [SPEAKER CHANGES] Mr. Speaker. [SPEAKER CHANGES] Oh, Representative Floyd may state his inquiry. [SPEAKER CHANGES] Mr. Speaker, thank you. Representative Moore had added additional bills to the calendar, and that is a total of how many now Mr. Speaker? [SPEAKER CHANGES] About 30. Just kidding. Just kidding. Just kidding. Representative Floyd, I think I understand the intent of your question. We're going to try and take up some of these conference reports. If the chair anticipates the debate is going to go long, and we will probably recalendar them for tomorrow, but we would like to try to dispose of some of these if possible. House bill 831 the clerk will read. [SPEAKER CHANGES] Committee substitute number two for house bill 831, a bill to entitle an act to provide for the education of children in private psychiatric residential treatment facilities. [SPEAKER CHANGES] Representative Avila, please state your purpose. [SPEAKER CHANGES] To debate the bill. [SPEAKER CHANGES] The lady is recognized to debate the bill. [SPEAKER CHANGES] Thank you Mr. Speaker. Ladies and gentlemen, this is a process or procedure that is going to become law or process or procedures for the state of North Carolina, whether or not we pass this bill. The reason for that is, the reason for this bill, which is a lawsuit. Our children, who because of mental illness, who have been placed in PRTS, these psychiatric treatment facilities, are as entitled to their education under the law of the state of North Carolina as a child sitting in your local LEA. What has happened, unfortunately, is that through however the process developed, no direct funding for education has been directed to the majority of these PRTS, and they've been funding the education with their own private dollars. Those that want to. We've had a lawsuit filed where a child is not getting the education that they are entitled to. And in order to take care of this issue, what we're doing through a lot of heavy duty negotiations with DPI and DHHS, the providers and all parties concerned, is to establish process and procedure through those departments in order to be able to take care of the educational needs for these children. And I would very much like your support for this, and if you have any questions, I will try to answer them to the best of my ability. [SPEAKER CHANGES] Representative Insko, please state your purpose. [SPEAKER CHANGES] To the debate the bill. [SPEAKER CHANGES] The lady is recognized to debate the bill. [SPEAKER CHANGES] Thank you Mr. Speaker. Members, this is been a problem for some time. These children are mentally ill, and have no impairment intellectually. They deserve an education

I appreciate the work that Representative Avila has done on this, and this is certainly a step in the right direction. Thank you. [SPEAKER CHANGES] Further discussion, further debate? If not, the question before the House is the passage of the House Committee Substitute Number 2 for House Bill 831 on its second reading. All in favor vote Aye, all opposed vote No. The Clerk will open the vote. The Clerk will let the machine record the vote. 113 have voted in the affirmative, none in the negative. The House Committee Substitute Number 2 for House Bill 831 has passed its second reading and, without objection, will be read a third time. [SPEAKER CHANGES] General Assembly of North Carolina enacts. [SPEAKER CHANGES] Further discussion, further debate? If not, the question before the House is the passage of the House Committee Substitute Number 2 for House Bill 831 on its third reading. All in favor say Aye, all opposed No. The Ayes have it. The House Committee Substitute Number 2 for House Bill 831 has passed its third reading. The bill will be returned to the Senate. Senate Bill 18, the Clerk will read. [SPEAKER CHANGES] House Committee Substitute for Senate Bill 18, a bill that's been entitled to enact amending the Locksmith's Licensing Act expanding the authority of the locksmith licensing board to regulate institutional locksmiths and raising the ceiling on certain fees. General Assembly of North Carolina enacts. [SPEAKER CHANGES] Representative Brawley, the chair understands that Representative Stone has an amendment. Is the gentleman wish to take up the amendment first? [SPEAKER CHANGES] I would prefer that, yes, sir. [SPEAKER CHANGES] Representative Stone is recognized to send forth an amendment. The Clerk will read. [SPEAKER CHANGES] Representative Stone moves to amend the bill on page four, line one through six by rewriting those lines to read. [SPEAKER CHANGES] The gentleman is recognized to debate the amendment. [SPEAKER CHANGES] Thank you, Mr. Speaker. Ladies and gentlemen, this amendments for the retailers. I just want to make sure they're excluded. Some of locks include transponders and have to be electronically keyed and also have to send someone out from the retail store to actually put them on. So just want to make sure they're excluded from the bill. We'd ask for your support. [SPEAKER CHANGES] Further discussion, further debate on the amendment? If not, the question before the House is the passage of the amendment sent forth by Representative Stone for the House Committee Substitute of Senate Bill 18. All in favor vote Aye, all opposed vote No. The Clerk will open the vote. The Clerk will let the machine record the vote. 112 having voted in the affirmative, none in the negative. The amendment passes. Representative Brawley, please state your purpose. [SPEAKER CHANGES] Speak on the bill. [SPEAKER CHANGES] Gentleman is recognized to debate the bill as amended. [SPEAKER CHANGES] We had a good discussion on this bill yesterday, and we did, in the committee, delete the provisions requiring that a ... or stating that if you have the tools of a locksmith that would be illegal. However, in the process I learned if you're riding around in your pick-up truck with a sledgehammer and a crowbar, if they can prove intent, you'll still go to jail for having tools to break in. [LAUGHTER] I do appreciate your support on this bill. [SPEAKER CHANGES] Further discussion, further debate? If not, the question before the House is the passage of the House Committee Substitute to Senate Bill 18 as amended on its second reading. All in favor vote Aye, all opposed vote No. The Clerk will open the vote. The Clerk will let the machine record the vote. 96 having voted in the affirmative and 15 in the negative, the House Committee Substitute for Senate Bill 18 as amended has passed its second reading and, without objection, will be read a third time. [SPEAKER CHANGES] General Assembly of North Carolina enacts. [SPEAKER CHANGES] Further discussion, further debate. Representative Farmer-Butterfield, please state your purpose. [SPEAKER CHANGES] I would like to be recorded as voting Aye on SB 18. [SPEAKER CHANGES] The lady will be recorded as voting Aye. The question before the House is the House Committee Substitute to Senate Bill 18 as amended on its third reading. All in favor say Aye. All opposed say No. The Ayes have it. The House Committee Substitute to Senate Bill 18 as amended has passed its third reading. The bill will be engrossed and returned to the Senate. Senate Bill 381, the Clerk will read. [SPEAKER CHANGES] House Committee Substitute for Senate Bill 381, a bill to be entitled to enact to transfer the Gates Correctional Facility to the Gates County Board of Commissioners. General Assembly of North Carolina enacts. [SPEAKER CHANGES] Representative Mobley is the member responsible for carrying this bill. [SPEAKER CHANGES] Thank you, Mr. Speaker. [SPEAKER CHANGES] The lady is recognized to debate the bill. [SPEAKER CHANGES] This is an unusual request, one that Senator Jones and I tried to do several years ago and it ... we weren't able to get to first base with it. But I certainly appreciate the fact that this is being done and ask your support because Gates County is one of our rural areas that's in need of many, many things, and they intend to use this for many... [AUDIO ENDS]

services. However, the main one, or the specific one they want to use it for is for a regional Emergency Management Center, along with some other things. So please support the bill. [SPEAKER CHANGES]. Further discussion, further debate? If not, the question before the House is the passage of the Senate Committee Substitute to Senate Bill 381 on its second reading. All in favor vote aye. All opposed vote no. The clerk will open the vote. Representative Floyd, does the gentleman wish to record? The clerk will let the machine record the vote. 113 having voted in the affirmative, none in the negative. The Senate Committee Substitute for Senate Bill 381 has passed its second reading, and without objection will be read a third time. [SPEAKER CHANGES]. General Assembly of North Carolina enacts. [SPEAKER CHANGES]. Further discussion, further debate? If not, the question before the House is the passage of the Senate Committee Substitute to Senate Bill 381 on its third reading. All in favor say aye. All opposed, no. The ayes have it. The Senate Committee Substitute for Senate Bill 381 has passed its third reading. The bill will be enrolled and sent to the Governor. Ladies and gentlemen, we are back on page 2, second, third readings of the original calendar. Without objection, House Bill 618 will be removed from today's calendar and re-calendared for tomorrow. So ordered. Senate Bill 470, the clerk will read. [SPEAKER CHANGES]. Committee Substitute for Senate Bill 470, a bill to be entitled an act to prohibit the consumption of malt beverages or unfortified wine on premises of any business during the period of time where any on premises permit issued to the business authorizing the sale and consumption of malt beverages or unfortified wine is suspended or revoked by the Alcoholic Beverage Control Commission. The General Assembly of North Carolina enacts. [SPEAKER CHANGES]. Representative Faircloth, please state your purpose. [SPEAKER CHANGES]. To debate the bill. [SPEAKER CHANGES]. The gentleman is recognized to debate the bill. [SPEAKER CHANGES]. Thank you, Mr. Speaker and Members of the House. Now, this is a bill that simply makes it unlawful for a permittee, or his employee or agent, to allow the consumption of malt beverages or unfortified wine on the premises of his business, or to consume them himself, or his employees consume them, during the period of time when there has been a revocation or a suspension of an ABC permit on the premises. If that does occur while they're under suspension, that is a separate violation. It does, however, protect the property owner. If the owner is a different person, in that, if the first business owner were to move out of the business after losing their license, then that does not fall to the building. The building can then be rented to someone else who has not committed a crime, and it can be used and get an ABC license. I urge you to consider this favorably. I also like to send forth an amendment. [SPEAKER CHANGES]. The gentleman is recognized to send forth an amendment. The clerk will read. [SPEAKER CHANGES]. Representative Faircloth moves to amend a bill by deleting the short title and substituting the following. [SPEAKER CHANGES]. The gentleman is recognized to debate the amendment. [SPEAKER CHANGES]. Thank you, Mr. Speaker. This is a pretty simple amendment. It comes about, because back in 2003, there was a statute that spoke to Convention Center facilities. There are publicly owned Convention Centers and there are privately owned Convention Centers, and for some reason this bill was passed back then. It said for a privately owned facility, that one of the requirements for it is that it has to be located in an urban redevelopment area. Well, what has occurred is that there are some business folks who want to start a privately owned facility that doesn't happen to be in an urban redevelopment area. One particular one that I know of is at the, where three urban redevelopment areas come together, but it sits across the street, therefore it's not on any one of them. So, what this amendment would do is simply read that the facility shall be certified by the appropriate local official as being consistent with their rules on redevelopment area. And I urge your support of the amendment. [SPEAKER CHANGES]. Further discussion on the amendment? If not, the question before the House is the passage of the amendment sent forth by Representative Faircloth to the Senate Committee Substitute of Senate Bill 470. All in favor vote aye. All opposed vote no. The clerk will open the vote. The clerk will let the machine record the vote. 111 having voted in the affirmative, 2

In the negative, the amendment passes. We're now back on the bill. Further discussion, further debate on the bill as amended? If not, the question before the House is the passage of the Senate Committee substitute to Senate bill 470 as amended on its second reading. All in favor, vote aye, all opposed, vote no, the clerk will open the vote. The clerk will lock the machine, record the vote. 113 have voted in the affirmative, none in the negative. The Senate Committee substitute to Senate bill 470 as amended has passed its second reading. The amendment changed the title, therefore the bill will remain on the calendar. Senate bill 558 the clerk will read. [SPEAKER CHANGES] House committee substitute for Senate bill 558, a bill to be entitled "An Act to Amend the Law Governing the State Treasurer's Investment Authority With Regard to Special Funds Held by the Treasurer", the General Assembly of North Carolina enacts. [SPEAKER CHANGES] Representative Collins, please state your purpose? [SPEAKER CHANGES] Debate the bill. [SPEAKER CHANGES] The gentleman is recognized to debate the bill. [SPEAKER CHANGES] I left a word out there that I always use, you'll notice, because I believe in truth in advertising, didn't use the word "briefly" because I'll probably exceed myself and impose a three minute limit this time because of the nature of the bill. The background of the bill is this: as the General Assembly, we have charged the investment of the state's retirement plan monies to the State Treasurer. We've also told the State Treasurer what we expect that person to earn for an investment return, an annual return of 7.25 percent a year. At the same time, we have passed legislations to tell that Treasurer what to invest in. I hope you get the irony of putting those three things together. We've told the Treasurer, "You do the investment, you're responsible for it, here's the return you're responsible for making, but, by the way, we're gonna tell you how to invest the money. We're gonna put certain restrictions on it." Senate bill 558 makes some small, but significant, changes in the allocations formula that we have mandated on the State Treasurer. And those changes are primarily three, and I can point you to them in the bill. Number one, currently, the State Treasurer is able to allocate up to 34% of the total assets into a whole classification of assets known as alternative investments. This particular bill would raise that percentage by 1%, from 34% to 35%, which is not extremely significant; more significantly is the second change. The second change is in the subcategories. There are a number of categories classified under alternative investments, and you'll find this beginning on page two of the bill. Under the subclassifications, for instance, one of those classifications is credit, we're investing some of our money in credit assets. That current limit is 5% of the total assets. Senate bill 558 would raise that to 7-1/2%. That's line 25 of page two. Hedge funds is another, which is not really an asset class, because hedge funds can invest in a lot of different things, but currently, the portfolio, 6.5% is the limit of the amount of the portfolio that can be invested in that. Page three, line 27 would raise that to 8.5%. A broad class known as alternatives, which includes private equity and several other things, the current limit is 7-1/2%, that would be raised to 8.75%, page three, line 42. And another broad class of assets called inflation protection assets, which can be anything from commodities to tips, bonds, the current limit is 5%, this would raise the cap to 7-1/2%, page four, line 19. Now, those are not huge increases, but they do allow the Treasurer a little bit more flexibility than they have right now. Currently -- oh, by the way, there is one other change, too, and the other change that's made, the third change this bill would make is to require some extra reporting from the State Treasurer. The State Treasurer would have to report some additional information about any management fees and other fees that are being charged to the plan, and also would be required to give a rationale why any asset class has increased in its percentage of the total assets by more than three percent. So, if the State Treasurer has gone from six percent to nine and a half percent in real estate, she, he, whoever it happened to be at the time, would have to explain that in a report and how it fits into the total investment philosophy of the assets itself. Now critics of the plan will tell you this: number one, the critics of this bill will say, "This is just too risky, you know, alternative investments are kind of a spooky, esoteric type of investment that nobody really understands, and so to even allow it one more percent is gonna devastate our state retirement plan." Well, that's kind of a broad brush. Alternative investments do include things like private equity, which you better have some understanding in order to invest in real estate. Some people consider real estate risky. Some people consider real estate safer than stocks. But it even includes inflation protected bonds, which I don't think anybody would call that an extremely risky investment, unless we're never gonna have inflation. What

What critics try to paint is a picture in which they say the risk of a portfolio is equal to the sum of the risk of its individual parts and if you know anything about investing, while I won't say anything, you know very much deeply about investing you know that that's just not true. I do this for a living so I understand this. The classic, I won't say the classic, but the ideal portfolio that we try to get people to put into when you include all your assets is what we call a 7-Twelve strategy that uses seven asset classes and twelve sub-classes and among those classes are at least five things that our legislation considers alternative investments. So my clients, if they listen to me, will have about 40% of their assets in alternative investments. And believe it or not, that lowers the overall volatility of the portfolio over just having, for instance, a straight stock portfolio even though eight of the twelve sub-assets I'm getting them to invest in would be considered more volatile on their own than large cap stocks. But the reason for that is very simple. There are two reasons. When you're investing you need to do at least two basics. You need to invest for diversification, which everybody understands, the more asset class you're using the better. And number two, for non-correlation and that's something people don't understand. Correlation means everything's going up and down at the same time. The temperature is correlated to how much clothes you wear, directly correlated. Correlation is something that used to be easy to do in the investment world. It's gotten harder and harder over the last 20 years. I'll give you an example every one of you will understand. 21 years ago when I got in the investment business foreign stocks were considered non-correlated to US stocks. They didn't go up and down at the same time. Now, if you're interested in your stock portfolio, if you're one of these people that follows it compulsively what do you do? You watch the Nikkei Index in Japan tonight to figure out what the Dow is going to do tomorrow. That's not an example of non-correlation. They're running together now. That has gotten harder and harder and harder to do. I can't predict the future but I can say one thing, I don't know what the risk of certain investments is going to be going forward but I do know this, the risk of being very, very heavily invested in bonds is a very strong risk right now because I can tell you this, interest rates have been going down for the last 30 years, we've had a 30 year bull market in bonds that's unprecedented in our nation's history but about a month ago interest rates started going up. And I can tell you one thing for sure, as interest rates go up bond values go down. Since we were passed this bill over from the Senate and have been debating this bill our state retirement plan has lost 1.5 billion dollars in their bond portfolio, what we would consider the least risky, safest part of the portfolio. Now critics of that statement will tell you, "yeah, but if you hold a bond to maturity you really don't lose anything." Well that's true and not true. It is true if you hold a ten year bond for ten years and that you paid $10,000 for it you'll get $10,000 back. But if you pay attention to some of these handouts I gave you, for every quarter of a point that we don't meet that 7.25% bogey it requires us to pony up an additional 280 million dollars. Now, I looked at my cell phone today and the ten year treasury bond, right now, is yielding 2.5%. So if we're buying 2.5% treasury bonds we are under-performing our bogey if we hold it to maturity by 4.75% every year. That means 5.3 billion dollars in extra appropriations by you and I if we're willing to do that. If we're willing to just buy bonds and under-perform by 4.75% it's going to take an additional 5.3 billion dollars of appropriations every year. So if you think that's safe I think you need to think again. Second thing that critics of this bill will say is that the fees are too high. These fees of these alternative investments are just too high. Well again, there's information on one of the sheets I gave you. The fees on our retirement plan for the whole portfolio are 40 basis points, 0.40%. It's peers average is 0.55% so our pension plan is running on lower fees than the average pension plan of its size. Now it is true that sometimes you do have to pay more for actively managed portfolios where it takes a higher knowledge base to do. It doesn't take a huge knowledge base to go out and buy treasury bonds but some of these things do require more but our state treasurer has even had this plan audited by an outside firm to see if they were paying too much fees and the outside office said, "no, you're in line." A third criticism I've heard is that, "well the alternatives just haven't done that well. They're just not doing all that well." Well again, I don't know where they're getting that from. I look at, one of the alternative categories is credit and that's made an 11% average for the last three years which is pretty good. I've had hedge funds point and say, "look the hedge funds are only making, they've only made 6% average the last three years."

Well do you know what the word hedge means, if you hedge your bets that means you are betting against the rest of your portfolio. How about this? How's stocks and bonds doing over the last three years, quite well. I would have expected any hedged investments to have done very poorly over the last three years because that is one of those things we are using in case the main bets don't do well. So making 6 percent on somthing on hedging on something where your prices are going up The forth criticism I have heard is that well the treasury The treasurer already has 34 percent of viability and is only using 20 so why is this bill even necessary. And I think that's a legitimate question until you understand how the current limit is stated. The treasurer right now can only bring that alternative up to 34 percent and I am going to call her she because our current treasurer is a she. if she invests to the max of every sub category we frankly don't have one big over all limit on investments right now we have 5 limits and you would have to be maxed out on all 5 of those to get the 34 percent well just because she believe real estate is a good investment right now doesn't mean. doesn't necessarily mean she believes inflation protected assets are good. She is not going to max out in a all 5 of them if you take the 5 sub categories I just gave youa nd add them together you will realize that it adds up to more than 35 percent it adds upt o something like 45 percent but we won't get into that. [SPEAKER CHANGES] Mr. SPeaker[SPEAKER CHANGES] it is not going to max out in all of them, I'll be glad to answer his questions.[SPEAKER CHANGES] Representative Floyd please state your purpose[SPEAKER CHANGES] Inquiry to chair [SPEAKER CHANGES] The gentleman may speak his inquiry [SPEAKER CHANGES] Time allegation please [SPEAKER CHANGES] By rule there is 15 minutes for the first debate and 10 minutes for the seconds representative collins has 11 minutes left no 4 thank you[SPEAKER CHANGES] Representative Floyd I am like you and I want to get out of here as quickly as possible. [SPEAKER CHANGES] I have heard all four of these criticisms levels and in fact you have probably gotten three of these in an email. I will be surprised if yo haven't so I feel like they deserve an answer. Anyway I hope you'll support this bill. We're trying to give our treasurer the flexibility she needs in order to do her job and if you understand investing we are not adding to the risk involved in this portfolio. What we are doing is giving her some flexibility with this bill so for instance if she's got an asset that is performing well she doesn't have to sell off some of it just because it's performing well and goes outside that 5 percent I ask that you support this measure [SPEAKER CHANGES] Representative Jones please state your purpose. [SPEAKER CHANGES] Sent forth an amendment the general article sent forth an amendment the gentleman will read. Representative jones moves to rewrite the bill on page 6 line 8 by rewriting the line to read[] the gentleman is recognized to read the amendment I know that everyone in here has probably been lobbied pretty hard by this bill on both sides. In the finance committee it passed by one vote There were a couple of different concerns that were raised. we felt that This amendment might address to put in the study. What this amendment would do would direct this to a study of two particular issues that were debated in the finance committee that led to concern one was the issue that sole fiduciary structure of the straight of the state treasurer part of the discussion was that North Carolina was one of only four states in the country That has this particular structure that it might be helpful to just study and see the other alternatives for administering the pension fund. The second is the adequacy of the assumed rate of the return of 7 1/4% percent directing the treasurer towards 7 1/4% may incur too much risk and so we thought the way to deal with this would be to at least create a study presented through to both side and both sides support this and it seems very amenable and I Think it is a good amendment and I recommend that both side support .

the amendment. [SPEAKER CHANGES] Yeah, I have no qualms whatsoever with the two items that are in this amendment. In fact I had spoken with Representative Setzer after the Finance Committee meeting about perhaps the need to include this in a study bill because I think it is a good question. Do we really need to place this kind of burden, fiduciary responsibility, on one person and really an advisory board that that same person appoints. That's putting a lot of responsibility on one person. I frankly wouldn't want to have the responsibility that Treasurer Cowell has right now and also it's a good question whether 7.25% is any kind of magic number that's really based on any rationale. So I'm going to hesitatingly support this amendment and the only reason I hesitate is that I hope this doesn't gum things up in the Senate and we don't wind up killing the bill by adding something to it that's got to go back to the Senate. That's my only hesitation on this whatsoever. I think these are two great topics for us to study and for that reason I am not going to offer any opposition to this amendment. [SPEAKER CHANGES] Further debate on the amendment. [SPEAKER CHANGES] Mr. Speaker. [SPEAKER CHANGES] Representative Luebke, can you please state your purpose. [SPEAKER CHANGES] Representative Collins would yield for a question. [SPEAKER CHANGES] Representative Collins. Does the gentleman yield? [SPEAKER CHANGES] Gladly. [SPEAKER CHANGES] Representative Collins yields. [SPEAKER CHANGES] Representative Collins, you just at the end said you had some concerns that this might keep the bill from passing the Senate so my question is this: would you not want to take these two items, you and Representative Jones take these two items that are in the amendment and just put them in the studies bill as opposed to weighting down this bill? [SPEAKER CHANGES] Frankly I would prefer that. Absolutely. That would be my preference. Because I just can't predict what the Senate's going to do about anything. I really can't. [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] Yes. Does the gentleman yield? [SPEAKER CHANGES] It seems to me you're suggesting then that actually we ought to vote against the amendment and be sure the bill is going to be passed in the Senate. [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] The gentleman may respond to the question. [SPEAKER CHANGES] I have mixed feelings about this for two reasons. Number one, if this amendment makes it easier for anybody to vote for this bill which was I believe unnecessarily contentious in the Finance Committee then I hate to say vote against the amendment. On the other hand, if the passage of the amendment gums things up in the Senate then I'm going to rue the fact that we passed the amendment. So I really don't know how to advise you, vote your conscience on this amendment. [SPEAKER CHANGES] The word of the day is conundrum. [SPEAKER CHANGES] Representative Luebke is recognized to debate. [SPEAKER CHANGES] To speak on the amendment. Members, if you heard what Representative Collins just told us, he said that he would prefer that this be separate as part of the studies bill and I would be concerned that if this amendment passes we could well end up with the bill not getting through the Senate. So with using your own reasoning Representative Collins, I think I'm going to vote no and I would urge other members as well to vote no on this amendment. I think we do run the risk of the bill not passing, getting into law, because of the time factor right now. So I'm encouraging you to vote no. Thank you. [SPEAKER CHANGES] Representative Boles, please state your purpose. [SPEAKER CHANGES] If I could ask Representative Collins. [SPEAKER CHANGES] Representative Collins, does the gentleman yield? [SPEAKER CHANGES] I do. [SPEAKER CHANGES] The gentleman yields. [SPEAKER CHANGES] ??? rumored with the Senate and everything I'm hearing are we even going to have a studies bill? [SPEAKER CHANGES] That I have no inside information on. [SPEAKER CHANGES] Representative Boles, it is highly unlikely that there will be a studies bill but as was the practice in the last session if this were something that the body wanted to do then the House would take the position that it would be commissioned through the LRC. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Representative Glazier, please state your purpose. [SPEAKER CHANGES] Just to speak to the amendment. [SPEAKER CHANGES] The gentleman is recognized to debate the amendment. [SPEAKER CHANGES] Thank you Mr. Speaker and I really appreciate the Speaker's comment just now because it strikes me I agree very much with the bill and I agree as well with the amendment but if it is a potential block and I think it could be or a possibility I would hope Representative Jones and wonder if you wouldn't be able to get a commitment I'm sure from the leadership that this is an issue that ought to be explored and can be done strictly by the leadership's commitment even now to studying it and that would take away the problem of the amendment. I wonder if you would be willing with a commitment on the floor, it would seem a consensus commitment, to withdraw the amendment. Under those circumstances I don't think you'd find much opposition to wanting to study this on our side. I can't speak for everybody but it certainly seems on your side that that would be available. [SPEAKER CHANGES] Representative Jones, please state your purpose. [SPEAKER CHANGES] I'm either yielding to a question or I'm debating for a second time. Was that a question? [SPEAKER CHANGES] Mr. Speaker.

Mr. Speaker, may I have the question re-directed to Rep. Jones? And I apologize. [SPEAKER CHANGES] The gentleman yields, and the gentleman will respond. [SPEAKER CHANGES] Rep. Glazier, I would put it this way: I believe that this amendment makes some of our members here more comfortable in perhaps voting for this bill. I don't if this bill is going to pass or not. I know it passed the Finance Committee by one vote. The representatives from the Treasurer's Office told me that they felt like that this actually strengthened their bill. Now, again, as Rep. Collins said, vote your conscience. My feeling is that if senators sponsored this bill,l and they want this thing to pass, and it comes back to them, and they've got the people that are for the bill telling them that they would like to have it pass, I believe that it will. I can't guarantee that, but I believe there are people on both sides of the issue that thinks that this is a good amendment, and I'm gonna vote for it. [SPEAKER CHANGES] Rep. Brawley, please state your purpose. [SPEAKER CHANGES] ?? [SPEAKER CHANGES] Members, if you do not intend to vote on the amendment, if you'll turn off your light. I'm trying to sort out if there members who have their lights on for the bill. So Rep. Robet Brawley is recognized to debate the amendment. [SPEAKER CHANGES] To speak on the amendment. Thank you, Mr. Speaker. Ladies and gentlemen, I, too, work in the investment business and was very much in favor of this bill when it first came up because I think that a person should be allowed if they're responsible for managing investments. Then I started research. I think all of us have heard of the name Harlan? Bowles?, and the great job he did with our pension plan. Under his watch, he could only invest in cash, bonds and stock. He did in the late 80s get real estate added, and then in 2000 we added private equity investments, hedge funds, credit strategies and inflation protection. Ever since 2000 we've been concerned about the results of our portfolio in the Treasurer's Dept. As far as this last year’s return, the categories we're expanding, private equity investments did 6.55%. Hedge funds did minus 6.52%. Credit strategies .37%, and the inflation protection investments -- inflation protection investments -- did minus 10.67%. I think this thing definitely needs some study. We need to review it again, and I really do question expanding this authority, but I really do thing this amendment is very much needed. [SPEAKER CHANGES] Rep. Pittman, please state your purpose. [SPEAKER CHANGES] To inquire to the Chair. [SPEAKER CHANGES] The gentleman may state his inquiry. [SPEAKER CHANGES] In trying to figure out how to vote on this amendment. I wonder if we were to pass this bill without this amendment, I wanting to clear on what the likelihood is that we could still get this studied without having passed the amendment. [SPEAKER CHANGES] I think, too, Rep. Robert Brawley's points, there are some very legitimate questions to be asked. The Chair would be very much supportive of study through the LRC. [PAUSE] [SPEAKER CHANGES] In other words, it's gonna get studied one way or the other. Further discussion, further debate on the amendment? [SPEAKER CHANGES] Yes. [SPEAKER CHANGES] Rep. Luebke, please state your purpose. [SPEAKER CHANGES] To speak on the amendment. [SPEAKER CHANGES] The gentleman is recognized to debate the amendment. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Mr. Speaker, I feel that you just convinced us all to vote No on the amendment because, and I appreciate what you said, that we all agree here, on both sides that it ought to be studied, and you indicated that you wanted to study, and we run the risk, as Rep. Collins has said, that it gets mocked? up in the Senate. So I think it's a safer way to go to vote No on the amendment because we know, we have the word of our Speaker, that we're gonna get a study. So I feel more comfortable voting No on it. Thank you. [SPEAKER CHANGES] The Chair may have observed Rep. Luebke channeling his inner Tillis. The Chair would defer to the members, but the members will know that this matter will get studied should this amendment not pass. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Further debate on the amendment? If not, the question before the House is the passage of the amendment sent forth by Rep. Jones for the House committee substitute of Senate Bill 558. All in favor vote Aye, all opposed No. The Clerk will open the vote. [PAUSE] The Clerk will lock the machine and record the vote. Forty-nine having voted in the affirmative, 61 in the negative, the amendment fails. Now [CUTS OFF]

We're back on the bill. Who ever represented state Ross please state your purpose. [Speaker changes] Thank you Mr. Speaker. Members [Speaker changes] Members recognizes to abate the bill. [Speaker changes] Couple of things I'd like to point out. In addition to what Representative Collins has talked about. What we have...one of the reasons why it's critical that we make these changes at this point in time is because over the years, and I've been in this business for 34 years, trading these exact investments that we're talking about here, one of the reasons why it's so important we do this now is because, we have what I typically call created, we haven't created it, but the perfect storm in investments right now, the interest rate market if you look at interest rates over, let's look at treasury bonds over a 150 year history, interest rates are at the lowest levels that they've been, really in history. And the one thing that we know for certain, in fixed income investments, it's very mathematical. Fixed income investments move in direct correlation with interest rates. The one thing we also know for certain is, that they are, that they have no place to from this point, but up. I did a couple of calculations earlier and we're approximately at around 46% I think it is, in bonds. If we have a 1% rise, in a 30 year bond, that's a negative rate of return for that bond at 17.38%. That means that bond is gonna fall at 17%. Now it gets worse if you go further out in duration ?? 30 year bonds and there are 30 year bonds in the portfolio. If we get a 3% rise in interest rates, that's a 52% decline in the value of those bonds. Now you multiply that times the amount of bond, the number of bonds that are in the portfolio and we're talking about some serious money. Now with that in mind over the years, alternative investments have come on the scene and I know that there was something mentioned just a few minutes ago, about its certain points in time, different investments were added to the strategy. When I started in the business back in 1980, with Merrill Lynch some of these investments weren't even available. In fact when I started in the business back in 1980, some of these investments weren't even on the drawing board. What we traded back then were stocks and and bonds and that was it. Now as time has gone on and with technology, investments have become more sophisticated. Someone mentioned earlier about international investments. Well they were very hard to do back in 1980 but with technology we can now trade international investments just as if they were domestic. So it's critical that we understand the correlation of what's going to happen if we have, not if, but when have a rise in interest rates. It was mentioned earlier that we had a little bit of a signal, about 3 or 4 weeks ago, you may remember it, the Fed said ?? chairman said we may draw back a little bit on what we're, what we're doing as far as our activity on the bond market. We think it may be time to start pulling back because we think the, economy may be able to stand on its own, it didn't work. You saw the Stock Market fall and you saw the Bond Market take a huge hit. And it was mentioned earlier that the, ten, what happened with the 10 year treasury bond was about a 1.2 billion dollar hit in the bond portfolio pension plan. Now what's going to happen when all of this, as I call it the Perfect Storm, takes place is they're going to come back to us and want us to fund the difference which we, the billions are going to be so large, we're not going to be able to do it. That they're going to be looking to us, to fund the difference in this plan when it falls. ?? Reason for the flexibility, in the alternative bracket, and I like to call it buckets, because if you take the, the, different, strategies that they have listed, credit strategies, real estate, ?? funds, alternatives in inflation protection, the reason for the flexibility or the need for flexibility there is again, if you look at what's going on with credit strategies right now and that's another area that's pretty mathematical, if the ?? curve or if the credit spread widens to a certain point ??

know mathematically exactly what it's going to do to the underlying bonds in the credit strategy. Right now that's doing well. But they're capped out, they can't put any more money in it. So you've got an investment there that's doing well, you're capped out, you can't put any more money into it, and then you've got one, inflation protection, that's not doing well. And all of these things move at different times. So we need to look at granting flexibility to be able to outright--frankly, I think that they need even more flexibility than we're talking about here. Because if I were working in credit strategies for example right now, I would want to more than 7.5% in credit strategies. But I know there are limits. So I think that what we need to do here is take a real serious look at guarding the future of the pension plan. A lot of institutions put alternatives into their portfolios as an insurance, sort of an insurance play. Because they know that if stocks and bonds fall, typically within the alternative strategy, there is something that's going up. They don't necessarily buy these for the return as much as they do to protect the portfolio on the down side. So that when you take the big hit in bonds, you've got something that's going to factor back into the number and level it out and the hit will not be as bad. So I urge you to support the bill. I think it's critical, I think it's timely. Thank you. [SPEAKER CHANGES] Representative Hurley, please state your purpose. [SPEAKER CHANGES] To debate the bill, please. [SPEAKER CHANGES] The lady is recognized to debate the bill. [SPEAKER CHANGES] Thank you, Mr. Speaker. I'm one of these people that's called the critic, according to our bill sponsor. I, as a state employee, having 20 years invested in the retirement system, and you all are retirement investors, too, because your money is invested in here in the retirement system. We have 800,000 that are invested in the system. They are Teachers and State Employees Retirement System, the Consolidated Judicial Retirement System, the Firemens and Rescue Workers Pension Fund, the Local Governmental Employees Retirement System, the Legislative Retirement System, and the North Carolina National Guard Pension Fund, and the Retiree Health Benefit Fund. All of those are included in our retirement system. Now I mean no disrespect for the treasurer or her office, but she already has the authority to invest 34% of the $81 billion in this fund in alternative investments. Some of these investments have large transaction and investment fees that we have been told about and they do cost hundreds of millions of dollars, and understand that she spent 300,000 last time--300 million last time, excuse me, in fees, but supposedly return was 5 billion. So that was really, really good. But I don't have a crystal ball. I don't what the economy's going to do. And yes, the bonds are going down. I understand the interest rates are going up, the dollar's going down. We don't know what's going to happen with this. The 34% that she has the authority to invest right now is only--right now she only is investing 22% of it. If this bill passes, the credit strategies portfolio will go--right now she can invest 5% and supposedly has 5 or 4%--but it would go to 7.5%. The real estate portfolio would stay at 10% that she can invest in, because that couldn't go any higher, for whatever reason. That happened in the committee. I was not in the committee meeting. The hedge funds--we're not sure how much is invested in that, maybe 1%, maybe 2%, we don't have a total. But it would go to 8.5%. The alternatives portfolio is 7.5% now and she only has 4.5% invested in it right now and it would go to 8.75. The inflation protection portfolio, she has 5% that she can do; she's only invested 4, and then she could go to 7.5%. Please join me in voting against this bill. Thank you.

Representative Blust, please state your purpose. [SPEAKER CHANGES] To speak on the bill. [SPEAKER CHANGES] The gentleman is recognized to debate the bill. [SPEAKER CHANGES] Thank you, Mr. Speaker and members of the House. I don’t consider myself a critic. I just consider myself what’s called an investment somewhat risk-averse. And in investments, the investment advisors usually try to get an idea from the client how much risk they’re willing to take on because that’s the ?? of this bill. It is in essence are we willing with the 80 billion or so invested, are we willing to up that risk? Are we willing to go into more risky investments? Now, there is in investing, one of the first fundamental rules is the risk return. If you are willing to take more risk with the same amount of money, you can potentially earn a greater return if you can sleep at night, knowing there is more of a chance that that 10,000 I just invested could go to 5,000 tomorrow. I’m happy with my financial situation to know I can afford to lose that 5,000. So I might put it in more risky investments, knowing I’ve also got a greater chance with that 10,000 to make it 20,000. So all investors have this different capacity for risk. In our situation, we’re dealing with the state pension plan, this 80-some billion. I think it’s incumbent upon us to like Harlon Boyles, to be very risk-averse. Now that can hurt us in the long run in a sense in that the problem here that the treasury’s seeking to solve is the fact that we are on the hock. It is a promise. It’s a legal obligation of this state to pay certain benefits over the coming year and years and decades and on into perpetuity, what we’ve promised retirees. That’s the obligation. Right now we have 80 billion saved up against that obligation, and we’re saying my goodness, if we can return 7.2%, then we don’t have to put in as much money each year in our budget. We don’t have to put it in like we did today. We don’t have to put in this much on our annual budget if we can assume that fund is going to earn a higher rate of return. Now in the last year or so, that’s been fairly easy because we’ve had a federal reserve that has seemingly without believing there could be a negative consequence, decide they are going to pump 85 billion of new money into the economy every month. They are buying I think it’s 40 million in, 40 billion in treasury debt each month. They are buying 45 billion of mortgage-backed securities each month in an attempt to stimulate the economy. That’s why we’re at this interest rate turning point, is that people are starting to think there are going to be negative consequences to that in interest rates at some point. Now what we have in essence is we’ve got this unfunded liability. We don’t have to put up as much cash, so let’s if we earn more, so let’s take a higher risk. We’re behind in the early third quarter, so let’s start throwing long. We might connect. But the problem is, the chances are you won’t connect. And that’s going to have enormous consequences if we take this bet and it doesn’t pay off, if it pays off then the people pushing this are geniuses. But here’s the chance it won’t, there’s a bigger chance it won’t. And that means even more money has to be anted up annually to meet these obligations. And I think those who oppose it are just saying whoa, whoa, it might be best to take a look at this and go easy on the risk. We’re already at 34, as Representative Brawley said, it wasn’t long ago these were zero. And we seem to be rushing into this, it is not that long into this that

That we’ve gone. And it, it is higher risk. The portfolio risk can be managed through your, through your stocks and your bonds. Now let me explain the bonds if I can. Yes there’s a paper loss as interests go up because if you have say a thousand dollar bond that pays 10% you have a, a ten, say it’s ten years, you have in essence a contract that in ten years that company, say it’s IBM whatever, is gonna pay you back that ten thousand. And in the meantime every year they’re gonna give you a thousand. Those are less risky because they stand in, there is a risk of bankruptcy. And different bond categories bear different risks. You, you’ve all heard junk bonds. But your high grade corporates, your government debt is, is known as very, very light risk. So you, you are gonna get, the thing to remember is even if interest rates go up and you say right now we’ve lost X amount on our bond portfolio. If you keep those, those are gonna go back up to face value when they mature and you still get that annual income from the bond. So you don’t necessarily have to lose a dime. That’s not true of equities because the equities might not go back up. But bonds are known as, as low risk because you’ve got that payment guarantee unless there’s a bankruptcy. And they’re less risk because the bond gets paid first in a bankruptcy over any equity. So we are seeming to be taking on additional risk here and we need to be careful about it. And I wish there was a way that those who are so eager to go in this route could be personally guaranteeing this debt because if it’s not paid there’s a lot of people who are gonna be coming to us with IOUs wanting, wanting their money back. I would say this to you. One thing does need to be, does need to be said here. Well folks you can take this as a joke if you’d like. [SOUND] You can take this bill as some kind of joke. But this is deadly serious what we’re doing here. These and I wonder if this isn’t the reason for the bill, these investments that we’re wanting to go into pay a lot more to the money managers. They pay higher fees. And if you’ll look at the fees. One thing I’ve learned and I no investment expert but over the years is I have read several times the average, the markets themselves outperform 85% of the professionals. And there are index funds, there are things you can do for very low fees that are going to pay you a pretty good return. And you can take those fees you don’t pay and you can add them to principal and invest those too. And we oughta take a look at doing some of that because one of these handouts says that five billion was gained for three hundred million in fees. That I notice that’s for one year. I used to listen to the great John Templeton on Wall Street Week when they had him on. And he said you have got to look at the long term and see how people perform under various scenarios. And it is true we’re in an interest rate hike. It’s changed a 30 year bull market is gone. And, and Mr. Andy Silton/g who was the, the richer/g treasurer Moore’s/g investment officer who first got us into these type of investments is now warning us about them. And he’s pointing out that nobody in money management today came up in an interest rate rising environment. And there’s a lot of rules and a lot of conventions that people are gonna find out no longer hold true in this type of environment. And all of that adds to that risk. So we need to be careful. We probably need to take a look at not mandating quite so high a return from the treasurer cuz I don’t blame her for wanting to throw long. But we have to sit here and work calmly and rationally as fiduciaries of these peoples’ money that Representative Hurley talked about. Thank you. [SPEAKER CHANGES] Representative Moore please state your purpose. [SPEAKER CHANGES] For a motion. [SPEAKER CHANGES] Gentleman is recognized for a motion. [SPEAKER CHANGES] Mr. Speaker I move the previous question. [SPEAKER CHANGES] Representative Moore moves the previous question. All in favor vote aye. All opposed vote no. The clerk will open the vote.

The clerk will let the machine record the vote, 73 having voted affirmative and 37 in the negative. The motion passes. We're not back on the bill. By rule the minority leader has a minute of, up to three minutes to speak. The majority leader has up to three minutes to speak. It is not mandatory that either speak. Representative Hall is recognized. [SPEAKER CHANGES] I pass to the majority leader. [SPEAKER CHANGES] Representative Starnes, please state your purpose. The question before the House is the passage of the House Committee Substitute to Senate Bill 558 on its second reading. All in favor vote aye. All opposed no. The clerk will open the vote. The clerk will let the machine record the vote, 61 having voted in the affirmative, 51 in the negative. The House Committee Substitute to Senate Bill 558 is passed its second reading and without objection- [SPEAKER CHANGES] Objection. [SPEAKER CHANGES] Objection having been raised the bill remains on the calendar. House Bill 857, the clerk will read. [SPEAKER CHANGES] Senate Committee Substitute No. 2 for House Bill 857, a bill to be entitled an act to authorize in public contracts to utilize the design bill method or public/private partnership construction contracts. General Assembly of North Carolina enacts. [SPEAKER CHANGES] Representative McGrady, please state your purpose. [SPEAKER CHANGES] Mr. Speaker, I'm not sure if my vote on the last motion was recorded but it should have been an aye. [SPEAKER CHANGES] The gentleman record as voting aye on the motion. Representative Arp, please state your purpose. [SPEAKER CHANGES] For a motion and speak on the bill. [SPEAKER CHANGES] The gentleman is recognized for a motion and to debate the motion. [SPEAKER CHANGES] Motion to concur with the Senate Committee Substitute No. 2, House Bill 857. [SPEAKER CHANGES] The gentleman is recognized to debate the motion. [SPEAKER CHANGES] Thank you, Mr. Speaker. Ladies and gentlemen, this is a bill that we passed unanimously here. I've been through four committees and so forth and in fifteen minutes I can explain to you all the different sections here. Section one- [SPEAKER CHANGES] The gentleman is out of order. [SPEAKER CHANGES] No, I would like to say that this has been a very strong collaborative effort. You've seen many of the design bills come through and what we've tried to do is address statewide the policy to provide a uniform. We've worked with the North Carolina Association County Commissioners, the League of Municipalities, the North Carolina Chamber of Commerce, the Carolina's AGC, the subcontractors, both the electric subs, plumbing and mechanical, Fire Sprinkler Institute of Minority and Economic Development, the architects, the engineers, UNC- [SPEAKER CHANGES] Mr. Speaker. [SPEAKER CHANGES] Representative Dollar, please state your purpose. [SPEAKER CHANGES] To see if the gentleman would yield for a question. [SPEAKER CHANGES] Does the gentleman yield? [SPEAKER CHANGES] Yes. [SPEAKER CHANGES] The gentleman yields. [SPEAKER CHANGES] Representative Arp, is there anyone opposed to this bill? [SPEAKER CHANGES] I haven't found them yet. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Further discussion, further debate. If not, the question before the House is the motion to concur on the Senate Committee Substitute No. 2 for House Bill 857. All in favor vote aye. All opposed no. The clerk will open the vote. The clerk will let the machine record the vote, 109 having voted in the affirmative, 1 in the negative. The House has concurred on the Senate Committee Substitute for House Bill 857. The bill will be enrolled and sent to the governor. Final item on the calendar, ladies and gentlemen, House Bill 493, the clerk will read. [SPEAKER CHANGES] To the present sent to speak to House of Representatives conferees appointed to resolve differences between the Senate and the House of Representatives on House Bill 493, a bill to be entitled an act to authorize the town of Robbinsville to levy an occupancy tax and to amend the conferees recommend the Senate and the House of Representatives adopt this report. Conferees for the Senate, Senator Apodaca, Chair, Senator Hise and Davis. Conferees for the House of Representatives, Representatives West, Chair, and Committee. [SPEAKER CHANGES] Representative West, please state your purpose. [SPEAKER CHANGES] To debate the conference report, Mr. Speaker. [SPEAKER CHANGES] The gentleman is recognized for the motion and to debate the motion. [SPEAKER CHANGES] Thank you, Mr. Speaker. This is a local issue in Graham County. We've resolved the differences and I move we adopt the conference report. [SPEAKER CHANGES] Further discussion, further debate. If not, the question before the House is the motion to adopt the conference report for House Bill 493. All in favor vote aye. All opposed no. The clerk will open the vote. The clerk will let the machine record the vote

will record the vote. Ninety-four having voted in the affirmative, 18 in the negative -- 93 having voted in the affirmative, 18 in the negative, the conference report has been adopted. The Senate will be so notified. [PAUSE] Ladies and gentlemen, tomorrow we will come into session at noon. For your planning purposes right now, the Chair and the leadership are working hard not to have session on Friday. We're hopeful that we'll be able to clean things up. To this point, there are no bills that would require us to carry over. We'll consult with the Members if something does come to us that requires a second reading. We'll gauge ? the caucus as to whether or not we would have to do that as a midnight session with concurrence of the minority, or an early-morning session. But at this time, there are no such bills. Just that would be the only reason at this point that we may have to have a Friday session. Rep. Larry Hall, please state your purpose. Notices and announcements. [SPEAKER CHANGES] Announcement. [SPEAKER CHANGES] The gentleman is recognized for an announcement. [SPEAKER CHANGES] The Democrats will caucus 11:00 a.m. tomorrow. [SPEAKER CHANGES] Rep. Hager, please state your purpose. [SPEAKER CHANGES] Point of personal privilege. [SPEAKER CHANGES] The gentleman is recognized for a point of personal privilege. [SPEAKER CHANGES] Thank you, Mr. Speaker. I just wanted to let everybody know our All-Stars in Rutherfordton?, NC, for those that are from Rutherfordton, NC, just beat West Virginia in the Regionals 25-1. They win tomorrow, they'll go to the Championship, they'll win the Championship and go on to California for the Nationals. So keep all these young men in your prayers and wish them luck for me. Thanks. [APPLAUSE] [SPEAKER CHANGES] Messages for the Senate. The Clerk will read. [SPEAKER CHANGES] Special Message from the Senate: Mr. Speaker presented the message from the Senate on July 23, 2013: Inform the House that the Senate fails to concur with the House committee substitute for Senate Bill 127. That bill's been ? to establish a geographically uniform zone to promote collaboration ? the state. It's ordered that this measure be sent to Your Honor and the body ? information. Senate requests conferees. The President Pro Tem will appoint Sen. Brown chair, Senators Apodaca, Gunn, Meredith, Randleman and Tillman on the part of the Senate ? like committee formed by ? may be resolved. Respectfully, Sarah ? Lange? , Clerk. [SPEAKER CHANGES] Note that conferees for the Senate Bill 127 will be Murry Chair, Susan Martin, Collins, Hamilton, Hager, Moffitt. The Senate will be so notified. [SPEAKER CHANGES] Mr. Speaker, is it ordered that a message be sent to the House of Representatives with the information the Senate fails to concur in the House committee substitute to Senate Bill 480, a bill, an act to authorize the acquisition or construction and finance it without appropriation from the General Fund of certain capital improvements and request conferees that ? President Pro Tem appoints: Sen. Apodaca Chair, Sen. Brunstetter, Sen. Brown, Sen. Hunt on the part of the Senate. It confer with like committee appointed by yonder body ? differences arising may be resolved. Respectfully, Sarah Lange, Clerk. [SPEAKER CHANGES] Noted. Conferees will be for the House: Howard Chair, Lambeth and Hanes. The Senate will be so notified. [PAUSE] Rep. Pittman, please state your purpose. [SPEAKER CHANGES] I wish to record my vote as No on that last bill. [SPEAKER CHANGES] The gentleman recorded as voting No. [SPEAKER CHANGES] Rep. Harrison, please state your purpose. [SPEAKER CHANGES] Inquiry to the Chair. [SPEAKER CHANGES] The lady may state her inquiry. [SPEAKER CHANGES] Yes, Mr. Speaker. So would we be advised to wear purple on Thursday? Is that what you're saying? [SPEAKER CHANGES] Yes. Rep. Grier Martin, please state your purpose. [SPEAKER CHANGES] For a moment of personal privilege. [SPEAKER CHANGES] The gentleman is recognized for a point of personal privilege. [SPEAKER CHANGES] Thank you, Mr. Speaker. Members, I've left at your desk a brochure for an exciting exhibit that's coming to my district to the North Carolina Museum of Art. It's in my district, but it's the entire state's museum. It starts in October, but I wanted to make you aware of it now in hopes that we won't be gathered here together any time before October. But some of the most significant Porsches in the entire world are coming to North Carolina at the Museum of Art. This is the museum's first ever design exhibit. It's focusing on design as opposed to art. So it's a big step forward for them, but it's generating a lot of attention. They've got cars coming in from the Porsche factory collection over in Germany, Jerry Seinfeld's collection, Ralph Lauren's collection. No word on if any from the Moore or Hager collection are coming, however. [SPEAKER CHANGES] Rep. Tolson, please state your purpose. [SPEAKER CHANGES] A point of personal privilege. [SPEAKER CHANGES] The House will come to order. The gentleman is recognized for a point of personal privilege. [SPEAKER CHANGES] Thank you, Mr. Speaker. Members of the House, I just wanted to let you know that Rep. Reives' son had open-heart surgery yesterday. Things? [CUTS OFF]

went well. He is mighty sore from the surgery, but I chatted with Representative Wray just a little while ago and he said he’s doing well. Let’s just keep him in our prayers and thoughts. Thank you. [SPEAKER CHANGES] Further notices and announcements. The clerk will read. [SPEAKER CHANGES] The House committee on rules, calendar and operations of the House will meet tomorrow at 10 AM in room 1228. 1327 of the legislative bill. [SPEAKER CHANGES] Further notices and announcements? Representative Moore is recognized. [SPEAKER CHANGES] Mr. Speaker. I move that the house do now adjourn to reconvene on Wednesday, July 24th at 12 noon, subject to the following: ratification of bills and resolutions, receipt messages from the Senate, receipt of committee reports, receipt of conference reports, re-referral of bills and resolutions, appointment of conferees and modifications to the calendar. [SPEAKER CHANGES] Representative Moore moves, seconded by Representative Dollar that the now adjourn to reconvene on July 24th at 12 PM subject to ratification of bills and resolutions, receipt of messages from the Senate, receipt of committee reports, receipt of conference reports, re-referral of bills and resolutions, appointments of conferees and modifications to the calendar. All in favor say aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] All opposed no. The ayes have it. The House stands adjourned.