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House | May 1, 2013 | Chamber | Commerce

Full MP3 Audio File

Good morning, welcome to the Commerce and Job Development Committee. It's my pleasure to have everyone here today. We do have some pages with us today. We have Caitlin ?? from Wake County, sponsor of our representative Stan. We have Caitlin ?? from Harnett County, sponsor of our representative ??. We have Kiara Rhodes from Wake County, sponsored by ??. And we have Carrington Royles from Harnett County, sponsored by David Lewis. First bill on the calendar, the agenda for today, is House joint resolution 55, Reform Workforce Development. This bill does not have a proposed committee substitute so representative Howard, you are recognized to explain the resolution. [SPEAKER CHANGES] Thank you, Mr. Chairman and members of the committee. This resolution actually came out of the program evaluation division, tied to a study that was completed May 9th of 12. A lot of folks think that this bill does more than what it does but actually it is only a vehicle to get a message out to you, the members of the general assembly, of what that program evaluation study produced. There is no legislation that is currently tied to this resolution so all the Workforce Development folks that have been concerned, there is no further action after this is heard on the floor. I will point out that the program evaluation division learned that the Workforce Development system is funded with $1.4 billion and over half of that funding comes from the general assembly. The division report found that State level leadership and local structures compromised effectiveness and there were no State-wide performance measures to provide any accountability with regard to Workforce Development. The in session law 2012 131 implemented all of the PED recommendations and the commission of Workforce Development is following through as intended on all of those recommendations. Basically the joint resolution expresses the general assembly's opinion that the Governor and local elected officials should reduce the 23 existing Workforce Boards to 16 and conform the boundaries to the existing boundaries of the Council of government's regions as PED recommended. With that, Mr. Chairman and members of the committee, I'll be glad to answer any questions. Again it is a message to the members of the general assembly to learn what the findings of Workforce Development, what the PED is determining that would improve Workforce Development. [SPEAKER CHANGES] Representative Lucas, you are recognized. [SPEAKER CHANGES] Thank you, Mr. Chair. Haven't had the pleasure of working on PED with Rep. Howard. She's explained this very exhaustively and done a very thorough job and so at the appropriate time I'd like to offer a motion. [SPEAKER CHANGES] Further discussion, further debate by members of the committee? Rep. Lucas, this is the appropriate time. [SPEAKER CHANGES] Move for favorable report. [SPEAKER CHANGES] Motion being properly made, all those in favor say,"Aye." All those opposed, say, "No." The ayes have it. Rep. Howard, congratulations. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] We are going to displace House Bill 112 at the request of the primary sponsor until a future date so we will move on to House Bill 473 which is the NC Captive Insurance act. Rep. Dockham has let me know that, I believe, you have some technical amendments. I will let you explain the bill and then let staff explain the technical amendments and move forward on that. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] You are recognized. [SPEAKER CHANGES] Thank you, Mr. Chairman and members of the committee. Some of you have all . . .

We heard this bill, captive insurance act, and the House Insurance Committee, so I’m going to be very brief. But just briefly, captive insurance companies, or insurance companies that are solely to insure the risk of a specific company or group. The captive insurance group is a wholly subsidiary of a parent company or an industry association. Captive insurance companies are not a new concept but it is a new concept for North Carolina. We have businesses using captive insurance in North Carolina now, but those captive insurance companies are not located here in North Carolina. What House Bill 473 would do is allow captive insurance companies to be domiciled here in North Carolina, making it easier for North Carolina companies to obtain this type of coverage and allowing North Carolina to charge and keep the premium tax these companies pay. So it is a win-win situation, Mr. Chairman and members of the committee. And Mr. Chairman, I have from the insurance department Rose Von Williams here to explain the bill a little more technically. But we do have a technical amendment, if the Chairman would allow that to be heard now, I would appreciate it. [SPEAKER CHANGES] Do all members have a copy of the amendment? I believe it’s being passed out. Representative Daughtry, you’re recognized to discuss the amendment. [SPEAKER CHANGES] Thank you Mr. Chairman. Members of the committee, this is purely a technical amendment. It was just changes that the Secretary of State asked us to make, to make the language more clear and she assures me that it is purely technical. And staff would be glad to answer any questions, Mr. Chairman. Thank you. [SPEAKER CHANGES] Representative Brawley, you’re recognized. [SPEAKER CHANGES] I move that the amendment be adopted. [SPEAKER CHANGES] Further discussion, further debate on the amendment. Hearing none, all in favor will say aye. All those opposed say no. The ayes have it. We’re back on the bill. Further discussion, further debate on the bill as amended? Hearing, Representative Atley, you’re recognized. [SPEAKER CHANGES] I just have a kind of a question of why have they not been allowed in the past? Was there any particular reason that they had been not allowed to do business or is this something that’s come up in terms of types of insurance? Exactly history, a little bit here. [SPEAKER CHANGES] Well, Representative Avila, this is a very specific type of insurance. I don’t think that it’s not, it wasn’t that they weren’t allowed to be here, no one just took the initiative to bring this forward so that they could be domiciled here in North Carolina, and this would allow them to do that. Companies are doing this in North Carolina now, but they’re having to go out of state to buy the coverage. This will allow companies to be located here in North Carolina. [SPEAKER CHANGES] Further discussion, further debate on the bill as amended. Hearing none, all those in favor will say aye. All those opposed say no. Ayes have it. Thank you Representative Daughtry for bringing this jobs bill before the Jobs and Commerce Committee. [SPEAKER CHANGES] Thank you Mr. Chairman. I believe this has a referral to Finance, if I’m [SPEAKER CHANGES] That was part of the motion that I heard. [SPEAKER CHANGES] that’s what I thought so. Thank you Mr. Chairman, thank you members of the committee. [SPEAKER CHANGES] We are going to skip over the game nights non-profit fund raiser because we’ve got some speakers that want to speak in favor of the bill and pose the bill. I will recognize at this point Representative Martin, are you ready to present House Bill 629? It’s my understanding that there is a PCS for this legislation. Representative Tolson moves that the PCS be properly before us. [PAUSE] Representative Martin, you are recognized. [SPEAKER CHANGES] Thank you Mr. Chair. Members of the committee, I sent out an email yesterday that included a lot more detail on this bill, because I find it to be a lot more helpful to understand the purpose of why this is coming forward as legislation. So I hope you had a chance to look at that. I did not provide a hard copy. But a little bit of background, this is in fact a very simple bill. It’s a technical change to special purpose projects and there are a number of special purpose projects that qualify for tax free or tax free bonds from the local government commission. So these need to be approved at the state level when there’s new business investments that qualify. And there’s a lot of federal requirements about that and I have some staff out here if you’re interested in learning more about the bond structure, which I did go through a lot of questioning about

Looks like this is necessary and how can this really that makes sense says solid waste recycling plants and projects to qualify for in this type of bond financing delegates were two ways to crash IE get either culture in five C salad waste recycling facilities also qualify because every selling KM as the Somali faction planes and M E's B recycling that this is what I think it would qualify for these acts of financing ninth and communities that want to offer that same year industry electronic business that DC is designed to help of an I5 UEL information about that, you anticipate that when the company said is getting ready to enter the planting grass in my district is not considering two sentences in grades nine E street, North Carolina defensive E C's FIC police products and recycles an increase in the product is exported to increment uses for these airports and a rail systems and creamy alliance,(SPEAKER CHANGES) a man of the next four ID and rarely sank in an intensive CD set up entry on the headliner from this and acting secretary of commerce in support of the stamp designs from C trucks are commission agriculture and water from the department of finance the chain of custody are in support of a spellbinding not have any opposition to that enabled EL major industry from L.a. to questions can be had from Texaco testing techniques and residuals and you recognize, which challenger area from ocean and the procession from a legislation and number two person tells you recognize from ocean storm, fulfilling reported most of the safety of five motivational deal is a referral to one recession for the bail motion of arts and culture.(SPEAKER CHANGES) And also say of all schools in the house and Gerson Margarita brings her job to build for the job to commerce moment basically warehouse building 72% in C right to work are some of you recognize the flavor of conflict is chairman of the committee of hostility 72 is rather straight 4-1 in this room knows we are right to work study of chapter 10 of our station oracle to check and 95 of six league tells us that the right of persons to work in our state cannot be denied or abridged whether they are member of the union or not a member of the union was a 72 goals as it is you cannot fourth from one to be a member of the union by a contractor to engage them in so we're looking contract law to get two parties one party cannot require the other 42 employee members of the union at war for the contract the ballot if that language is written to contract out that the other contract itself will be for him on a forceful wish to respond in our discussion for the debate on the bill Arsenault which the film recognize this song is still from the resource kit, sorry over by the national relations are national labor relations act , (SPEAKER CHANGES) despite concerns that work for passing legislation that's already covered by Federal law which would preempt this and we do best lists of movement for safari, but Federal authorities to share the bomb that was the question for the bill sponsored are some of you recognize that the jurors in the public's deferred a question to staff the generally recommend against each year on perfect opportunity? Sharon stone quest is the question was known as we did the story covered by the national labor relations act and it's something we would be about 4¢ because his ability to render the faulty friend of a Federal law , and I am not completely sure the best recently, there is a simple question with regard to instruction contracts that are similar to the delays in all of the past because no one can ??.................

There's a clear question in that situation with regard to whether those kinds of contract or the restrictions in those kinds of contracts would be preempted by federal law. There's a split among other jurisdictions in case law on that question, and it has not been dealt with by the Ford circuit yet. So there is some question to whether or not that might be preempted by federal law. This bill is broader, and it is not, from my research, and I'm not a labor lawyer so I don't hold myself out as an expert on this, it's unclear with regard to other types of contracts whether or not the federal law applies to this. [SPEAKER CHANGES] Representative Jeter, you're recognized. [SPEAKER CHANGES] I was just going to make a motion when appropriate. [SPEAKER CHANGES] OK. Representative Terry? [SPEAKER CHANGES] Thank you, Mister Chair, I'd like to ask a question about the bill sponsor, please regarding, or perhaps as a staff question, I'm not real clear. I would like to know how or what impact of the federal Davis Bacon law would have with regard to this legislation. [SPEAKER CHANGES] Thank you, Representative Terry, Mister Chair would like to refer that question to the staff. [SPEAKER CHANGES] I'm afraid I cannot answer that at this point. I'd be happy to research, and get back to you. [SPEAKER CHANGES] Representative Evelyn, Representative Alexander. [SPEAKER CHANGES] Thank you, Mister Chairman, I'd like to inquire with the bill sponsor, what the genesis of this bill is. Have you received a lot of complaints about this particular practice? [SPEAKER CHANGES] Well, thank you Representative Alexander, quite honestly, the genesis was Representative Stam. [SPEAKER CHANGES] Follow up: has he received a lot of complaints? [SPEAKER CHANGES] I believe he has, which is the reason he brought this legislation forward. Further discussion, further debate? Are you done, Representative Jeter? Representative Fisher, you're recognized. [SPEAKER CHANGES] Thank you, Mister Chairman, I wonder if there is anybody from labor who is in the audience who might like to address this at all? [SPEAKER CHANGES] Feel free to introduce yourself to the committee. We recognize for your time not to exceed two minutes. [SPEAKER CHANGES] Thank you, Mister Chair, my name is Mike Oak, and I'm here for the North Carolina state AFLCIO. It's our view, that representative Hall suggested, that this law is preempted by federal law. Under the National Labor Relations Act, no employee can be discriminated against on hire, because they are or are not a member of the union. In fact, no one must join the union at any time in any state. In the non-right-to-work states, what an employee must do, they don't have to be part of a union, but they have to pay their share of the dues that go to administering the contract that they enjoy. They're entitled to a rebate for any part of the dues that go to political work, or lobbying, or anything like that. The union has to represent them, but they have to pay their fair share. In North Carolina under our law, you don't even have to pay your fair share. You enjoy the benefits under the contract, but you don't have to pay any part of it. The National Labors Relations Act is supposed to be a uniform law for the whole country, and a state cannot regulate what the NLRA regulates. And as the supreme court has said, any conduct that is arguably covered by the National Labors Relations Act is preempted. One narrow exception is what's called 14B, which was put in in 1947, which says that a state can prohibit if it wants, an agreement between an employer and a union that everyone must pay their part of the dues. It says that everyone has to join the union, but the way that's been interpreted, you don't have to join the union, you just have to pay your part of the dues. So congress said we're going to make an exception: each state can decide for itself whether or not it wants employers and unions to be able to agree to that. And we decided that we didn't want that to be allowed in the contract, and that's what our right to law does. but anything beyond that is preempted. And this is not a case between an employer and a union, and this is not a case of an employer signing a contract, this is a case of one employer telling another Under the national

Order to discriminate in hiring is one employer to another lawyer only hire union people. And yes I said, your time is expired yet Thursday's wrap up is an and that the labor act specifically prohibits that. Now, and so our view is forth the Larson from smoking is expansive, I noticed a vexing and complicated area, but I just want to have argue thank you, Mister [SPEAKER CHANGES] but for your presentation rivers are probably recognize him. This drug can would you accept in question, sir chairs you start from the priority list. [SPEAKER CHANGES] Mister Okun under this video, someone would not be able to require another company. The union in order to bid for business is that covered under the National Labor Relations Board act that you refer to. Yes, all your international organization came to a city as part of their contract demanded that only union labor be used to predict the reprints, documents, would that be a violation of the law, the National Labor Relations Board. [SPEAKER CHANGES] I think if the if the first, if some organ in the organization and is straight out of the state said that in North Carolina. Another employer and can only hire union people outside of the cockpit that would violate labor. Yes [SPEAKER CHANGES] I want follow-up because that that's not the question I asked how well can you require that bids that bidders must be union in order to be up for work in North Carolina in a contract, it is. [SPEAKER CHANGES] It's a complicated situation with contractors in North Carolina I have actually in the construction industry contract with the hall to refer workers to work near at hand and are too kind hall. One is an exclusive hall where the employer since I'll only get members from the hourly workers union hall in a situation union also has to refer any nonunion members who come and want to be referred [SPEAKER CHANGES] Mister Chairman, the gentleman 's not even address in the class was not as cheesy as I said, we can't believe that this is a confusing and vexing area. I wish the answers were simple but I don't guess I don't think that under the labor act, you can require that only union workers be hired to work on your property. [SPEAKER CHANGES] Mister Oken. I guess the example coast represented Alexander and I debated this on before the general assembly of the Democratic national convention came to North Carolina entered into a contract, you ran the convention center control at North Carolina and as a condition of that contract required that all printed materials for all visitors. Package must be printed by only union light. There was only one print shop in North Carolina and Charlotte. That was a union printshop and twenty seven others were for bid and the even been on the work. [SPEAKER CHANGES] The question I'm asking you is it your testimony today that the Democratic National Committee or convention violated the national Labor Relations act by demanding that only union shops, print material to be handed out at the Democratic national convention. I don't think it violates the labor that I don't know the facts the case. I don't think it violates the Libra for an employer to say I want to go through union contract. However that does not mean that all of the labor union contract for our members and the union are paying dues. For example, I feel like I might say as if I might say I want you to hire. I want you hire ex- company because they have a union as I want to hire them as fine, but but it doesn't mean that those employees have to join the Union restroom is right and it just means I have to work for union shop without any union member by businessman who is not a union shop should be forbidden from bidding contracts, according to your testimony well, and Sarai believe that violates the idea of a right to worksite, Mister Chairman, I'm in favor of this bill done. I will take back control or euro quicker the Valley air. I recognized Jim? Isabella Rosen 's speciality. I agree that this is a confusing enticing and I believe that this

Will we support it, [SPEAKER CHANGES] Roosevelt then he recognized this [SPEAKER CHANGES] chairman of two things that I would like for division owned 's" and secondly I would just like to observe there if I following the this dialogue correctly, it seems that it's possible that you could right now, the existing law. I draw a contract that saved with the revs of the wrongs talk about it is possible that their contract would be unenforceable, and if it's unenforceable and he would be like a number of symbolic of things that people enter into any industry, I would be very akin to the symbolic article six section four of the state Constitution. It requires literacy test before you can register to vote, which I have been assured that is rendered unenforceable. At this point. All you recognize her second start of the members or call two minutes ago one we ask only that you work twice and not sure this is printed by federal law. I think of the body. We need to be careful not to continue to pass unenforceable laws that reason, I would urge the members not still further discussion. Further, they were liberal in the terminal building address if I'm understood the discussions. The consensus seems today from the especially ability of that, it is not discriminatory to require the contract. The union that it is discriminatory to require that they, not the union of my sense at all to me and I think we need to build a clarify exactly how we feel in North Carolina and as far as symbolic. It represent Alexander 's comments about it being symbolic if somebody says you've got to do. You got to have union contracts. It may be symbolic than what you follow lawsuit against the muscle is going to handle, and we did make it clear, allowing we don't agree with this artificial access says that he was chairman I would really like to have seen her center from labor again address that question that and said it I'm sorry, as in a row. I also probably just just brought up as if that's possible. * time not to exceed one minute registered German again, many Prelude by saying it's a complicated area and but my understanding is not unlawful for an employer to say I want to use a nonunion contract, it would be unlawful for the nonunion contractor to then refuse to hire somebody because their union, but so they can say I will usually use non- union contractor and selling in union contractor, that's fine with the right to work law says it is that you neither site have a contract that says neither those contracts have apprentices. Everybody was showing the union what is already against the law to discriminate when the contractor hires based on whether somebody is or isn't a member, but again I thank you for your patience. I know its competent area and and and and people will disagree to thank you present efficiency. [SPEAKER CHANGES] Thank you, Mister Chairman, I visit many just sounds like to me that the him fully clear on attempt at making up new law and know that no fun served himself said that Tatum, he's here on behalf of another member and you know I just I I feel uncomfortable as saying yes to passage of this without more clarification on without know a clear clear knowledge that we are not presenting federal law and they are just too many questions. As far as I'm concerned, and I am I will will a process and I have you all join me in that president probably recognize her second year, you might should use our initials were first mind. You got to grow is an here I'm sorry, I know how is referring to the chairman. I am [SPEAKER CHANGES] Mister Chairman, I didn't really know

Talking about today, but it’s an interesting thing to raise. I did vote for a resolution that asked the DNC to use a lot of local companies to support the convention. The Charlotte Observer reported very proudly that 31% of the contracts were let to North Carolina Companies. That means 69% were not. And part of the reason for that is, there was a preference for a union contractor. And it was stated in their purchasing regulations. Non-union contractors could bid, and except for printing they did not have to become a union shop to get work. But it was stated that preference would be given to union contractors and most of the business went out of state. I’m not really clear on what Mr. Okin ?? has said today other than to assume that if his statements are completely true he’s saying that the Democratic National Convention violated Federal law by not, by refusing to deal with non-union companies. And going out of state. I don’t really think that’s the law. I think what we’re seeing is an attempt to confuse the situation and try to create fear, uncertainty and doubt, to use an old phrase from the computer industry, to scare people away from something that you don’t want them to do, so they’ll buy your certain product instead. And that’s all it is. This is a clear thing. If you write a contract that says you’re only going to use, or only allow your contractors to use, union shops that contract will not be valid in North Carolina, because we’re a right to work state. And you can’t enforce it. You can’t force cities not to hire non-union. You can’t force other people. Doesn’t mean they have to not hire union. It means you don’t get to tell them what to do. That’s all. Mr. Chairman, I’m in favor of this bill. [SPEAKER CHANGES] Representative Floyd, you’re recognized. [SPEAKER CHANGES] Mr. Chairman, I’d ask the bill sponsor a question, please. [SPEAKER CHANGES] You’re recognized. [SPEAKER CHANGES] How time-sensitive is this bill? [SPEAKER CHANGES] Thank you Representative Floyd, quit honestly this is a rather simple straightforward bill that has been complicated by the testimony that’s been heard in this committee. Essentially, if I’m a developer and I put my project out to bid, and the low bidder is a non-union shop, but I would prefer to hire a union shop, I cannot require them to become a union and take advantage of their pricing on this project. What this bill does is it basically says that if I was to require the low bidder who’s an open shop to become a member of the union in order to get the work, then that would be unenforceable and would be void. So I understand the testimony that’s been here, but I think the testimony’s been off the mark. And this is very straightforward and I would urge its passage. [SPEAKER CHANGES] Representative Floyd, you’re recognized. [SPEAKER CHANGES] How time-sensitive is this bill? [SPEAKER CHANGES] I’d like to go ahead and get a vote on this today. We’ve got crossover in two weeks. [SPEAKER CHANGES] Follow-up Mr. Chair? [SPEAKER CHANGES] You’re recognized. [SPEAKER CHANGES] Having heard the right to work state and the union, this is the first committee that I sit on in a long time wherein that we is not getting what I call profound information from our staff. And when our staff does not know the complexity of this, I think that we need to get just a little bit more information from our staff before we make a decision of this magnitude. Having worked in this field for about 30 years. [SPEAKER CHANGES] Representative Torbett. [SPEAKER CHANGES] Mr. Chairman, thank you. I think it’s the nature of this body to render what we feel is the best intent and support the common good of the citizens of North Carolina. I think it’s up to the judicial body to determine that what we do is actually against the law or with the law. And I would suggest that we do what we feel is inherently good. Support this amendment and my guess is that the committee is ready for a motion. [SPEAKER CHANGES] Further discussion, further debate. [SPEAKER CHANGES] Representative Jeter, you’re recognized for a motion. [SPEAKER CHANGES] Rhetorically I wonder if the AFL/CIO would be howling if the DNC mandated that all contracts go to non-union shops. With that I would make a motion for approval or favorable report on House Bill 872. [SPEAKER CHANGES] And division being called, all those in favor will raise your hand.

First 33 seconds...SILENCE! [Speaker changes.] All those opposed, raise your hand. (SILENCE til 0:54) Motion passes by a count of thirty to fifteen. Representative Boles, you're recognized. [Speaker changes.] To present House Bill 809, there is a proposed committee substitute and Representative Stone makes a motion that the PCS be properly before the committee. Representative Boles, you're recognized to debate the bill. [Speaker changes.] Thank you, Mister Chairman...thank the committee for allowing me and also like to thank the staff for work that we've done on this bill. House Bill 809 summary, as you all know is the authorized tax exempt organizations to operate Monte Carlo Nights or game nights, in which games of chance are played and prizes are awarded. This bill has been asked for for non-profits, also's been by the North Carolina Restaurant and Lodging, North Carolina Travel and Tourism and the Charlotte Hotel Association. This particular issue came about in my particular county, Moore County, because throughout the state, Monte Carlo Nights for non-profits are being held and the local DA's elect not to enforce them. In our particular county, our DA enforces this...the gaming night provision and even informed me that if you have a local gaming table in your own personal home and have friends that you're in violation of the law and so that raised a lot of questions. So I worked with staff and with the associations and I think we have a good bill here and I don't think I need to read it to you. [Speaker changes.] Mister Chairman? [Speaker changes.] Further discussion/further debate? Representative Torbett. [Speaker changes.] Move for favorable report. [Speaker changes.] We're gonna have a little more debate. Representative Alexander you're recognized. Representative Moore, you're recognized. [Speaker changes.] Very quickly, Representative Boles, how will this...this particular piece of legislation effect the possibility of casino-style gambling moving forward across the state? Would it have any effect other than the provisions in this bill...or... [Speaker changes.] No...it's not in gambling, as per se...as for fun night. We're all here for the children and for...this is so PTA can have fundraisers. And our non-profits. What we've tried to do is narrow it down to qualified facilities so that, if it's misused, that the ABC permit of that qualified facility is in jeopardy and the reputable qualified facilities..they're not gonna put themselves in jeopardy. We issued it in two events per month and four per year of calendar for the tax exempt charitable organizations, which had to get a permit through the ALE???????? [Speaker changes.] Representative Whitmire, you're recognized. [Speaker changes.] Question for the bill's sponsor. [Speaker changes.] You're recognized to ask the question. [Speaker changes.] Main question on this is to prevent it from creeping into..what so many other states have gone from a two-three million dollar business to a hundred-two hundred billion dollar business in a fairly short time. Can you just elaborate please on enforcement and permitting portions so that we make sure that's not a factor here. [Speaker changes.] OK...and I'm gonna also refer to staff also but in the provisions, the applicant has to provide from.... [Speaker changes.] [Speaker changes.]

to ALE. There's 9 district offices in the state. They have to prove that they're a 503, non-profit ALE, in this provision checks with the Secretary of State to make sure they're a qualified non-profit charitable. At that point of time, they pay the filing fee, and then they're issued to two, they're issued a permit to the organization, and one particular person that has applied, so they're personally liable. Also the qualified facility is responsible by their ABC permit. And upon violation, I think it's in section, page 4, line 14, as far a qualified facilities, there's a Class 2 misdemeanor, and also the charity person who applied for the application. [SPEAKER CHANGES]And the question I asked, essentially goes to the purpose of money for the purpose of tax exempt organization to fund itself, versus the purposes of the tax exempt organization, and we assume it's tax exempt because it does have a charitable purpose. And my disturbance with the whole bill just goes with that fact. I would be much more comfortable with this bill if it had some requirement, and it had at least a minimum based standard of the amount that had to go to charitable purposes other than in some state, I understand, perhaps as little as 4% really wound up going to charitable purposes. [SPEAKER CHANGES]Thank you, and if you have that concern, I would share that in Wake County you could probably do it, have your Knights, but in Moore County you cannot, it's at the discretion of the District Attorney. [SPEAKER CHANGES]Representative Shepard, you're recognized. [SPEAKER CHANGES]Yes, Mr. Chair, for a question of the bill's sponsor. [SPEAKER CHANGES]You're recognized. [SPEAKER CHANGES]Mr. Boles, does this also apply to like, 50-50 raffles? [SPEAKER CHANGES]No sir. [SPEAKER CHANGES]It does not apply to like? [SPEAKER CHANGES]Not at all. There are, page 2, line 48, the Operation 6 specified games of entertainment, which. [SPEAKER CHANGES]Representative Lucas, you're recognized. [SPEAKER CHANGES]Thank you, Mr. Chair. I want to commend Representative Boles for bringing this bill forward. It places us more in line with reality in this state. Of what's really actually going on, and it makes us less hypocritical as a state. You know, we talk about not allowing any kind of gambling, but you know, practically any of church you attend will have some kind of church bazaar, church raffle, and this kind of thing. You will also find it very rare that you can attend a high school football game on a Friday night that there's not a 50-50 raffle, and I don't know what kind of accountability there is with those. And, my travels in the rural areas, and I'm a rural person, I see all kinds of turkey shoots, by Lions clubs, and goodwill clubs, and this kind of thing, and I don't know what the accountability of that is but usually there's only 1 winner in these kinds of things, and

Well, I commend Rep. Boles for being candid and honest with us, and I think we ought to pass this bill. [SPEAKER CHANGES] Rep. Starnes, you're recognized. [SPEAKER CHANGES] Let me ask the sponsor a question. [SPEAKER CHANGES] May I ask, the question, is it friendly? [SPEAKER CHANGES] All my questions are friendly. [SPEAKER CHANGES] Thank you. [LAUGHTER] [SPEAKER CHANGES] Rep. Starnes, you're recognized to propound a friendly question. [SPEAKER CHANGES] Thank you very much. These non-profit organizations, when they decide to have this gaming night, does it have to be held in an establishment that currently has ABC permits, or does this give them the right to serve the alcohol at their own location? [SPEAKER CHANGES] No sir, they have to be at qualified facility which is specified, Page 3, help me out here, line 21. And if I can refer to staff just for verification of that. [SPEAKER CHANGES] Ms. Cockran-Brown ? you're recognized. [SPEAKER CHANGES] Thank you. the requirement that basically authorizes this is on Page 1, beginning on line 32. On line 33 it says it's lawful for a exempt organization to do this at a qualified facility, and that's the only authorization that the bill provides for where this can be located. [SPEAKER CHANGES] Rep. Dollar, you're recognized. [SPEAKER CHANGES] Well, just a follow-up, and this may be for the bill sponsor or for staff. So, the gaming that would be going on would be conducted at a commercial establishment. Is that correct? [SPEAKER CHANGES] The definition would be, right, that has a ABC permit. [SPEAKER CHANGES] Rep. Brawley -- ? [SPEAKER CHANGES] In times past, it seems that they were allowed to have game nights, and there are civic clubs in my hometown that have all kinds of gaming equipment. We may be addressing reality. We may be taking care of children. I'd rather my children home playing ball or going on hayrides and things. I'm going to have to oppose the bill because it does open up gambling, wide open, in North Carolina. [SPEAKER CHANGES] Rep. Brody, you're recognized. [SPEAKER CHANGES] Thank you, Mr. Chair. I'd like to ask the bill's sponsor a question, please. [SPEAKER CHANGES] You're recognized to propound your question. [SPEAKER CHANGES] Rep. Boles, if I understand this correctly, no. It has to be limited to a qualified facility, but then theoretically I guess, if these facilities are limited in a community, it is theoretically possible that on Monday night the Lions could have one, on Tuesday night the Rotary Club, on Wednesday night the Catholic church. All those as long as they, as these particular entities don't have one more than four times a year, is that how I read it? [SPEAKER CHANGES] No, sir. The qualified facility cannot host more than two per calendar month, so the max would be probably 24 in year, 12 months. [SPEAKER CHANGES] Rep. Presnell, you're recognized. [SPEAKER CHANGES] I would ask for division on this bill. [SPEAKER CHANGES] Division having been called, I have speakers that would like to speak on behalf of the bill. Rev. Mark ? Creech ? from the Christian Action League, you're recognized for a time not to exceed two minutes. Next on deck is Bill Brooks ? from the Family Policy Council. [SPEAKER CHANGES] Thank you, Mr. Chairman and members of the committee. I'm Rev. Mark Creech, Executive Director of the Christian Action League. The legislation before you today is really nothing new. It has appeared in some form before the General Assembly since as far back as 2001. Fortunately lawmakers have seen the wisdom in not advancing it. And with the deepest respect for its sponsor, I hope you'll make no mistake here, this bill is not innocuous or less dangerous because it comes as an angel of light with the promise of helping charities. Instead, it is a fallen angel with all the same minions of commercial gambling. This bill in essence is a de facto form of legalized casinos across our state. It has the potential for creating permanent stations for casino-style gambling, for making gambling more accessible, increasing the odds for people to become problem or pathological gamblers and with it there comes crime, corruption and other problems invariably [CUTS OFF]

related to casino gambling. We know this in part because of states like Michigan, Massachusetts, Illinois and Indiana. Charitable forms of gambling have grown to be considerably problematic. We should this proposed initiative, I suggest, for even more important reasons. We should see that gambling in any form is predicated on the loss and pain of others. It typically preys on the most vulnerable among us. The principle of gambling undermines our commitment to hard work and diligence. It capitalizes on the basest of human nature -- our greed and the spirit of covetousness. Moreover, let me add that adding alcohol to the mix only greases the wheels for an exacerbation of these negative behaviors. Because gambling is fundamentally flawed, it never fulfills its promises. And be assured that any short-term gains from charitable casino gambling will significantly outweighed by damage in the long term. [SPEAKER CHANGES] Rep.? Creech ?, you've got 30 seconds to wrap up. Thank you. Mr. Brooks ?, you're to debate the bill for a time not to exceed two minutes. [SPEAKER CHANGES] Thank you, Mr. Chairman. I agree with all the remarks that Rev. Creech had, so I'll try not to repeat those. The state will lose $1.2 million per year in revenue from the Cherokee according to the physical note on this bill. Gambling is a predatory activity that destroys the lives of five percent of those who participate. In addition to their own lives, an addicted gambler will much like an alcoholic have a negative impact on the lives of family and friends -- 17 according to research, according to one study. Five percent of those who gamble account for 50 percent of all the revenues. Our research indicates that many who frequent so-called non-profit gambling venues are regulars. In other words, they're compulsive gamblers. This bill is hiding behind the non-profits. What legitimate non-profit makes alcohol and gambling the centerpiece of its fundraising efforts? Marrying gambling and alcohol is not a good idea. It increases the problems for local law enforcement. Long history of gambling in North Carolina there is. North Carolina has tried bingo, dog racing, horse racing, harness racing, and more recently video poker and sweepstakes, a derivative. Casino nights will be no different. It will morph into something bigger and worse. Legalizing roulette wheels, craps tables and other Las Vegas-style gambling equipment will make gambling enforcement more difficult. If a law enforcement officer even sees the equipment, they know it's illegal. Under this bill, it would not be. This the fifth or more session that we have seen this type of bill. It has never been a good idea, and none have ever been passed. Why should we legalize gambling for fun knowing that it is going to lead to more gambling and send a signal to our citizens that casino is an accepted enterprise? And we hope you will not use the Cherokee as an example of why we would. That's a whole nother debate. Simply said, they operate under a federally-approved compact that was authorized by previous governors and previous legislatures. It's not our intent, we're working to tighten up the bill. That's the comment that I've heard most often from the bill sponsors and their lobbyists when I talk to them. We haven't seen a PCS on this bill, so I don't know what they mean by that. We recommend you vote against this bill or vote to give it an unfavorable report. Thank you. [SPEAKER CHANGES] Thank you, Mr. Brooks. Frank Gray ? from the North Carolina Restaurant and Lodging Association is recognized for a time not to exceed two minutes. [SPEAKER CHANGES] Thank you, Mr. Chair. Members of the committee, Frank Gray representing the North Carolina Restaurant and Lodging Association. Our members enthusiastically endorse and support this bill. We hope you will pass it. From the standpoint of commerce in North Carolina, this is an important bill. I hope many of you have heard from restaurants and hotels in your area that they are often asked by groups who want to have meetings, conventions in their facility to have these kinds of events, and they are good for business. They are good for the non-profit as a fun way to raise money for the group. The bill has been carefully crafted to put in place a permit system, have rules and regulations in place to limit the scope, limit the number, so I would respectfully disagree with the previous speakers about the parade of horribles that's going to flow from this. With all due respect, it's not gambling. There's no money at risk. [CUTS OFF]

There to make a contribution to their non-profit organization, and it’s a fun way for the group to raise money, and it’s a good way for our members to have business, increase their business in North Carolina. I would say, Mr. Chair, to Doctor Fulghum’s question, on page 3, lines 9 and 10, the bill does specifically say that any proceeds from the game night must inure to the benefit of the exempt organization. So that’s an example of how we tried to make clear that this is a fund raising event. It’s a fund raiser for the non-profit and we commend the bill to you. Thank you. [SPEAKER CHANGES] Representative Stone, you’re recognized. [SPEAKER CHANGES] Thank you Mr. Chair. I appreciate the opportunity. First I’d like to ask if we have anyone from ALE here to give a support up or down on their insight of the bill. [SPEAKER CHANGES] Is anybody from the Alcohol Law Enforcement agency, would like to present or make a comment on the legislation? Seeing none. [SPEAKER CHANGES] Well, I’d just would like to make a few comments. [SPEAKER CHANGES] Recognized. [SPEAKER CHANGES] This bill has been brought to us and for the most respect all I can give my seatmate who has got the best intentions at heart, for this bill. I know he does. And I know some of the bill sponsors. But I’m going to speak to you on a guy that’s had multiple ALE license, and dealt with multiple non-profits. We heard a lot of different things in the committee today. Churches, one Representative talked about reality. And there is a lot of reality, and there’s very little accountability. And I’ll give you an example. If you walk into an establishment now that has an ALE license, and they’re playing cards, it’s against the law. The problem with this piece of legislation is you’re going to open it up for only the attorneys will make money. Because everyone will say that they’re a non-profit. It’s not hard to be a non-profit. Look around. Everybody’s got a non-profit. It’s the new way of doing business. Even if you make money, you call it a non-profit now because it’s the only way you can stay open. I have a lot of concerns. The restaurant and lodging, I understand why they want to allow this legislation to move forward. It probably is good. It’s what’s going to happen on the back streets, in the small bars, things that could potentially open up a can of bad worms for us all. So I am concerned. I know as I said before the intent’s great, but it does put us between ALE and our District Attorneys. Our District Attorney’s going to say one thing, the ALE’s going to say another. And then the other reality is, how many ALE officers do you have? How many local [SPEAKER CHANGES] Representative Stone, I will, let me just jump in here. I will say that this bill does have to go to Judiciary and Finance. And so there are a couple of bites of the apple left on this legislation, but I think a lot of the concerns you’re raising are essentially law enforcement, which will be handled in Judiciary. That’s the only reason I bring that up. [SPEAKER CHANGES] Well if it’s just Commerce only, I guess you’re trying to say the lottery’s already gambling so we’re out of it. Thank you. [SPEAKER CHANGES] Representative Cunningham, you’re recognized. We’d like to take a vote in about five minutes if we could. [SPEAKER CHANGES] Thank you. My question is, it seems as though we’re sending a mixed message. We say no to the sweepstakes, we say no to the video, but now we want to do this gambling. How many jobs is this going to create if it passes, that’s what I want to know. [SPEAKER CHANGES] Representative Pierce, you’re recognized. Representative Presnell has asked for the roll call. Representative Alexander, you’re recognized for a motion. [SPEAKER CHANGES] My motion would be favorable for, we have a PCS? [SPEAKER CHANGES] That’s right. [SPEAKER CHANGES] Favorable to the PCS, unfavorable to the original. [SPEAKER CHANGES] With subsequent referral to Judiciary and Finance. The motion having properly been made, the clerk will call the roll. [SPEAKER CHANGES] Representative W. Brawley. Brawley, aye. Representative Conrad. Conrad, no. Representative Millis. Millis, no. Representative Moffitt. Representative Moffit. Representative Moore. Moore, yes. Representative Saine. Representative Stone. Stone, no. Representative Torbitt. Representative Alexander. [SPEAKER CHANGES] Alexander, aye. [SPEAKER CHANGES] Alexander, aye. Representative Avila.

Avila, yes. Representative Bell. Bell, yes. Representative Blackwell. Representative Boles. Boles, yes. Representative R. Brawley. Brawley, no. Representative Brody. Brody, no. Representative Brown. Representative Bumgardner. Bumgardner, no. Representative Carney. Representative Catlin. Catlin, no. Representative Collins. Representative Cunningham. Cunningham, yes. Representative Dockham. Dockham, aye. Representative Dollar. Dollar, no. Represntative Earl. Earl, yes. Representative Farmer-Butterfield. Farmer-Butterfield, yes. Representative Fisher. Fisher, aye. Representative Floyd. Floyd, aye. Representative Fulgham. Fulgham, no. Representative Goodman. Goodman, aye. Representative C. Graham. Graham, aye. Representative G. Graham. Graham, aye. Representative Hager. Hager, aye. Representative Hall. [SPEAKER CHANGES] Yes. [SPEAKER CHANGES] Hall, yes. Representative Hamilton. Hamilton, yes. Representative Hanes. Representative Holley. Holley, no. Representative Holloway. Representative Howard. Representative Jeter. Jeter, aye. Representative Johnson. Representative Lambeth. Representative Lewis. Lewis, aye. Representative Lucas. Lucas, aye. Representative Malone. Malone, yes. Representative Martin. Martin, no. Representative Pierce. [SPEAKER CHANGES] No! [SPEAKER CHANGES] Pierce, no. Representative Presnell. Presnell, no. Representative Richardson. Representative Riddell. Riddell, no. Representative Samuelson. Representative Schaffer. Representative Setzer. Representative Shepard. Shepard, no. Representative Speciale. Speciale, aye. Representative Starnes. Starnes, no. Representative Steinburg. Representative Szoka. Szoka, aye. Representative Terry. Terry, no. Representative Tine. Tine, aye. Representative Tolson. Tolson, aye. Representative Waddell. Representative Warren. Representative Wells. [SPEAKER CHANGES] Thank you. Aye. [SPEAKER CHANGES] Warren, aye. Representative Wells. Representative West. Representative Whitmire. Whitmire, no. Representative Wray. [SPEAKER CHANGES] Motion passes by 27-17, this meeting is adjourned. [SPEAKER CHANGES] Thank you Mister Chai