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Senate | April 10, 2013 | Committee Room | Senate Finance

Full MP3 Audio File

Will the Finance Committee come to order, please. First thing first. Let's say to our pages, Senate Pages, let's identify them. Chandria Boykin - Senator Davis, here? Thank you. Jamar Jones - Senator Davis. Lily Gardner - Senator Davis, Bobby Evans - Senator Davis, Morgan Bass - Senator Davis, Senator Hoyle, well, wait a minute, that's not right. Thank you for being here today. We appreciate it and hope your stay is going to be informative. Alright, members of the committee, you're having your information handed out to you and the first bill we will get to will be House Bill 193 - expanding uses of the Mecklenburg County/Charlotte local taxes. Representative Samuelson and Representative Brawley and Representative Carney. Welcome. And Representative Burrell. Thank you. We appreciate you all coming today and spending time in the Senate Finance. Welcome. [SPEAKER CHANGES] Thank you, Mr. Chairman. We will be brief but we're prepared to answer any questions that you have. This is a local bill but it has garnished some state [SPEAKER CHANGES] Pay attention. [SPEAKER CHANGES] garnered some state-wide interest. It has no new taxes in it. There are no new revenues in it, state or local, and all it does is give new options to the City Council of Charlotte to decide how to receive, how to spend the money they already have. One of the new options would be to fund improvements to what we call Panther Stadium. It's actually Bank of America Stadium, and the other would be an option if they would like to, to fund amateur sports. That's all it does and I urge your support. [SPEAKER CHANGES] Mr. Chairman. [SPEAKER CHANGES] Yes, sir. Senator Tillman. [SPEAKER CHANGES] This bill is no new taxes. It's a local bill and you do with it what you want, and a local bill, it sounds like a good one, I move for a favorable report. [SPEAKER CHANGES] Alright. Members of the committee, we have a motion for a favorable report on House Bill 193, coming before us from Senator Tillman. Any questions, comments? Questions? Senator Curtis. [SPEAKER CHANGES] What would the money be used for if it were not used for this purpose? [SPEAKER CHANGES] It is currently allocated for the Convention Center. The Convention Center's been there about 15 years, and so this would be, give them the choice of whether to fund the Convention Center or the Panther Stadium, or the amateur sports. Part of the reason for ?? for Panther Stadium is because it sits on city-owned land, so there is a city interest in it. [SPEAKER CHANGES] Alright. Senator Allran. [SPEAKER CHANGES] Thank you. To verify, this does not involve state tax dollars. This is your local money. [SPEAKER CHANGES] Correct. [SPEAKER CHANGES] Why don't you say that again for everybody. [SPEAKER CHANGES] Okay. There are no new revenues, no new taxes, nothing coming from the state, nothing new from the local. [SPEAKER CHANGES] Is that all ??. Pretty clear? [SPEAKER CHANGES] Pretty clear. {SPEAKER CHANGES] Very good. Senator Tucker. No? [SPEAKER CHANGES] That's all I wanted was a clarification from Rep. Samuelson. [SPEAKER CHANGES] Alright. So I trust that there's no clarification. We do have a motion in front of us. [SPEAKER CHANGES] Mr. Chairman. [SPEAKER CHANGES] Wait. I'm missing somebody. Senator Stein. [SPEAKER CHANGES] Senator, does this involve state taxes? [SPEAKER CHANGES] No state [audience laughter] no,no,no, what part of no, no [SPEAKER CHANGES] All we can say, all we can say, Sen. Samuelson, we brought out our best and our bravest here. [SPEAKER CHANGES] I've got. Hold on. I've got a question here from Senator Jenkins. [SPEAKER CHANGES] Thank you, Mr. Chairman. Rep. Samuelson, you can't buy an airport with this money, can you? [SPEAKER CHANGES] No, no, you can't. [SPEAKER CHANGES] Do you have one for sale? [SPEAKER CHANGES] Alright. I see no more questions or comments. [SPEAKER CHANGES] Altogether? [SPEAKER CHANGES] Alright. I see no questions or comments. All in favor of a favorable report for House Bill 193 expanding uses for Mecklenburg County/Charlotte local taxes, please say aye. [Audience response]. All opposed, no. Ayes have it. Thank you for joining us today. [SPEAKER CHANGES] Thank you, committee, for hearing this before cross-over. [SPEAKER CHANGES] And I will take care of that on the Senate floor. Let's get the next one. I promised Senator Tillman an opportunity because he has a meeting, so the next bill will be Senate Bill 337 - North Carolina Public Charter School Board. Senator Tillman. [SPEAKER CHANGES] Thank you, Mr. Chairman. This bill is in Finance because there is a fee that will be assessed for the application process and that will be up to the Charter Board to set. This is okaying the fact that they can have a fee for the applications. There already is one but this clarifies that. And

there's no fiscal impact to the budget for this. The charter staff that's there now is in place and I don't believe that there's going to be any extra cost attached to that so that's the reason this bill is here and we ask for your approval. [SPEAKER CHANGES] Members of the committee, any questions, comments? I've got, yeah I've got two questions. I've got Senator McKissick. [SPEAKER CHANGES] Just a quick question, Senator Tillman. In the event that somebody does not have the capacity to pay the fee is there a provision for a waiver? [SPEAKER CHANGES] No sir. The reason we have an application fee is to ferret out those wannabe's that are not financially stable enough to pay for an application fee. You've got to be well fixed to establish a charter and there's all kind of applications, we come by individuals and fly-by-nights if we don't have a pretty hefty application fee. That was intentional. It will be intentional. [SPEAKER CHANGES] Alright, so what will the fee- [SPEAKER CHANGES] Do you have a follow-up question? [SPEAKER CHANGES] Yeah, follow-up. Do we know what the fee is going to be or what, if you could provide a little more on that. [SPEAKER CHANGES] No, the Charter School Board, these are public schools, Senator, will set that application fee as part of their duties, responsibilities, as outlined in the bill. [SPEAKER CHANGES] Okay. [SPEAKER CHANGES] Do you have a follow-up question? [SPEAKER CHANGES] A quick follow-up and the way you articulated at start, I thought you were imposing a per pupil application fee but that's not what you're doing, you're doing the applicants who want to become charter schools. [SPEAKER CHANGES] This is a Charter School Application fee on the non-profit that is applying to be a charter. [SPEAKER CHANGES] Got it. Thank you. [SPEAKER CHANGES] Okay. Alright, before we go, Senator Wade, I want Ms. Avery to identify one more piece in that legislation that needs to be brought up because it is under finance control. Ms Avery, please. [SPEAKER CHANGES] There is one other provision in the bill that necessitates its presence in this committee and that is on page 15, section 3, and it's an expansion of a property tax exemption. Currently, property that is occupied by a non-profit educational institution gratuitously is exempt from property tax. This would just provide that a charter school, the property occupied by a charter school, is exempt even if the charter school is not the owner and not necessarily occupying it gratuitously. And there is a fiscal note which shows minimal to no impact, minimal impact, in your packet. [SPEAKER CHANGES] Thank you, Cindy, that's- [SPEAKER CHANGES] Okay, well first things first, Senator Wade. [SPEAKER CHANGES] Mr. Chairman, thank you. I just wanted to move for a favorable report at the appropriate time. [SPEAKER CHANGES] Thank you, Senator Wade, we have that. Okay, yes sir. [SPEAKER CHANGES] Thank you, Mr. Chairman. On that very section, section 3 on page 15, so one piece that I think Cindy just noted that I hadn't focused on is so if you were a charter school renting a building from a for profit landlord and paying full market rent the landlord no longer has to pay property tax? Is that an accurate understanding? [SPEAKER CHANGES] Mr. Chairman, or Cindy. [SPEAKER CHANGES] You want to answer that or do you want Cindy to handle that for us? [SPEAKER CHANGES] The building's use is educational and that property is being used for educational purposes as a school building they would not be subject to tax. It would just be like you were renting a double-wide and putting it on there and using it for an educational building you would not pay property tax. [SPEAKER CHANGES] Ms. Avery? She agrees. [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] Comment, that piece doesn't make any sense to me, that if you are a landlord, private, the tenant doesn't pay property taxes, the owner of the building pays property taxes and if the owner of the building is getting full market rent and is not giving it at a dollar a year, or whatever, if it is essentially a charitable contribution for educational purposes that makes sense to me that they could have an exemption from property taxes. But if there just getting rent why will we exempt that from the tax base? [SPEAKER CHANGES] Senator Stein, if you are I or anyone else that I know in their right mind would give a piece of property, say for one dollar a year, to a charter school. Most of them, if not all, would certainly want to do deduct that as a gift to a charitable organization, being a non-profit or a school. I can't see why they would be subject to property taxes since they are going to be deducting a charitable gift number one, and number two is it's used for educational purposes. Just like the buildings that our public schools sit on, our traditional public schools, they don't pay any property taxes. They're public schools now. [SPEAKER CHANGES] Final follow-up. [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] Would the, what I heard you to say, Senator Tillman, is that if they were, the landlord was giving a deduction

A general contribution in drawing a deduction. Would you be amenable to language that qualified that they were giving it for below market rent before they could get a property tax deduction? [SPEAKER CHANGES] No. [SPEAKER CHANGES] I mean elimination of having to pay property taxes. [SPEAKER CHANGES] No. Not as long as I've been with these ??. No I would not. [SPEAKER CHANGES] Okay. I've got Senator Hunt. [SPEAKER CHANGES] Thank you Mr. Chairman. Senator Tillman I think if I were a public charter school going to lease a space in an existing building and I knew the landlord was going to get to avoid property taxes on that building, I think I would include that in my negotiating when I was negotiating my rent. [SPEAKER CHANGES] Being a Realtor of your caliber I think you would sir. I would if I were in your shoes. [SPEAKER CHANGES] Okay. Question. I got Senator Blue. Question.

Yes sir. Could you please identify yourself sir? [SPEAKER CHANGES] Buddy Young. Director of Public Works, ?? Assembly. [SPEAKER CHANGES] Question Senator Brock? [SPEAKER CHANGES] Yes, Buddy, so the town is going to take over the ?? of the dam? (Microphone not on.) [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] Follow up question, Senator Brock. [SPEAKER CHANGES] Isn't that dam a part of a road? [SPEAKER CHANGES] Yes, they're going to keep that as a private road. [SPEAKER CHANGES] ??? I think we should give it to the State. That's costing us a lot of money in the Conference. [SPEAKER CHANGES] We're not here to discuss religious preferences here. I think Senator Brock had his questions answered. Any other questions? We have a motion before us on Senate Bill 290 for a favoable report from Senator Cook on Waynesville Annexation. All in favor please say aye. All opposed nay. The ayes have it. [SPEAKER CHANGES] Thank you Mr. Chairman and members of the Committee. [SPEAKER CHANGES] Thank you Senator Davis. I'm going to turn the Chairmanship over to Senator Rabon for the next bill. [SPEAKER CHANGES] Thank you Mr. Chairman. We have Senate Bill 6, a proposed Committee substitute. Do I hear a motion to ?? substitute from Senator Newton. Thank you. All those in favor say aye. Senator Rucho will explain the bill. [SPEAKER CHANGES] Yes, the PCS on Senate Bill 6. This is part of the Unemployment Insurance Reform Bill that we passed early on and what it does is it cleans up some accounts that were left in there and so what we're doing is, first it closes the worker's training trust fund and remits the balance to the UI Fund. Closes the training and employment account, remits the balances to the UI fund and it approves $10 million of the $16 million Special Security Administration fund to the UI fund and the remaining of that at least to my understanding goes to the debt. Mr. ?? did that get explained sufficiently or do you have some other thoughts? Questions? [SPEAKER CHANGES] Senator Newton. [SPEAKER CHANGES] Thank you Mr. Chairman. Thank you Senator Rucho. Is there anybody who opposes this that you're aware of? [SPEAKER CHANGES] No sir. [SPEAKER CHANGES] Sounds good to me. [SPEAKER CHANGES] Senator. Chairman. [SPEAKER CHANGES] Thank you. Senator Rucho, question. Does this bill in any way hinder us paying our debt back as quickly as we had intended with our original bill? [SPEAKER CHANGES] No sir. [SPEAKER CHANGES] Okay. Thank you. [SPEAKER CHANGES] Senator Hise. [SPEAKER CHANGES] Mr. Chairman, I move for a favorable report to the bill and favorable to the proposed substitute, unfavorable to the original bill. [SPEAKER CHANGES] Thank you Senator Hise. In one moment we're going to have two questions - no, one question then. [SPEAKER CHANGES] Thank you Mr. Chairman. After paying my unemployment tax this first quarter and being concerned about solvency both in business and the UI Fund I'm going to be the one to object. [SPEAKER CHANGES] Thank you Senator. ?? no questions or comments from the Committee we will call for a vote. All those in favor of PCS unfavorable to the original bill, please say aye. Opposed? Ayes have it. Thank you very much. That concludes the business of today and the meeting is adjourned.

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