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House | January 31, 2013 | Chamber | Finance

Full MP3 Audio File

[SPEAKER CHANGES]: Thank our ?? of ?? Mr. ??, Mr. ??, Mr. ?? and Mr. Brandon. Thank you for being here. Members of the public, thank you for your endurance. Members of the committee it's your responsibility to endure. At this time we will hear house bill number 4. Representative Howard, please come forward and explain this situation. [SPEAKER CHANGES]: Thank you Mr. chairman and members of the committee. I hope that everybody had the opportunity, like yesterday afternoon to go over all of the information that we sent to you. So, you would have it before you. [SPEAKER CHANGES]: Representative Howard, excuse me, representative ?? makes a motion for the ?? before for discussion purposes only. Any discussion on the motion, all in favor say Aye. [SPEAKER CHANGES]: Aye. [SPEAKER CHANGES]: ?? oppose motion could ?? chairman ??. [SPEAKER CHANGES]: Again, I hope everybody had the opportunity to go over all of the email information that we were able to send out to you like yesterday afternoon, and the reason it was late is because we were trying to be sure that everything in the bill was correct and implies, I can give you the long explanation this morning or I can give you the short explanation, we'll do it either way. The long explanation is the 13, 14th pages that you received last night, it is in your pocket. Then I start with the shorter explanation, and then we can move out to the long explanation if you want to go there. This bill was developed, and I want to say a special appreciation to representative Harry Warren and representative Edgar Starnes. We didn't go looking for trouble or looking for a problem, but it was presented to us, and this bill is an alternative, it's an option, and I will be the first person to tell you it is not perfect but it is absolutely the best proposal that we could developed after about a 14 week, 3 days a week being ?? with our staff. The issue is fairly simple, the issue is this I did of $2.5 billion that is currently due and payable to the Federal government, and this is not a State ??, this is not something that our State or general Fern has to address, but this is a ?? about all the employers in the State of North Carolina. The next question to ask ourselves, the consequences of this ??, and I can tell you first hand the ?? is creating a real disadvantage with respect to recruitment of new industries and new jobs for the people of North Carolina, and when our economic developers, your economic developers are trying to attract industry into North Carolina. One of the first questions that these folks are going to ask, if we come into North Carolina do we become a ??, and the answer to the question is, yes. So, you can see that we are not on a even playing turf, incidentally we are 3 steps behind all of the surrounding states. Again, this proposal simply offers an alternative to the current repayment plan which has a final payment date of 2019. If we do not do anything, if we do not pass this legislation or some part of it

It will be 2019 before this debt is retired and we have a stable suiter fund, and that suiter fund is what pays our benefits, and we can have $1 billion in our suiter fund and have the debt retired by the last quarter of 2015, early 2016, so that's the reason we're here and the bill is lengthy, not as lengthy as it was before the night before last because we tried to combine a lot of the pieces but it's still a 39 page bill and basically this is what it does, there's an employment security reserve fund and it restricts the use of the dollars that's in that reserve fund and it will cap the fund at $50 million or any amount of interest paid or the amount of interest that was paid the previous year. Now that reserve fund comes from the 20% surcharge that all employers pay into the fund every year and thank goodness we've had that money because if we had not had it then we would not have been able to fund the amount of dollars that we needed to pay the interest on the debt and we have made interest payments in the last three years. $80 million, $83 million, $77 million, it's big dollars, but we have used that fund. The first thing this bill does is restrict that fund. That is the only reason that we can use those dollars. We found that in the worker training trust fund and training and employment account there were little pots of money in the Division of Unemployment, so we are eliminating these accounts and transferring all of the balances of all of these accounts into the UI fund. Those dollars will be used to help retire the debt. We also found a special employment security administration fund that had approximately $16 million that was over at the Division. We are appropriating $10 million of the $16 million in that fund, and that too will be swept toward debt repayment. Nobody really likes this bill. Everybody is coming to the table and being a part of the solution and that includes the business community, that includes the folks who are currently on the system and it also will include the people who will be looking to go on the system. We changed the suiter charges and increased the minimum and the maximum contribution rate by .06 and we moved to a formula as opposed to a very complicated tax table. The 20% surcharge that I just mentioned, those dollars being put into the trust fund that pays the interest, we now have a trigger off of the surcharge when the UI fund equals or exceeds $1 billion and this is something that the business community, all of the business community has been forced to pay for many, many years with no end in sight, there was no trigger. Basically they just continued to pay 20% of the surcharge and that was tied to their suiter payment. This was something new that we found that I'm sure that many of you are not aware of, I certainly wasn't, but there's a special provision, it's a federal provision

And we have three groups that are not required pay ?? tax, and they have the option to do a direct reimbursement of any claims that are filed against them. And it includes all governmental entities. Us, the State of North Carolina. Unfortunately when we have layoffs we're relying on the backs of the private sector. The benefits are paid because that's the way it should be. The folks are eligible and need the benefits. But some 22 months later, and that's an egregious number, but some 22 months later the State of North Carolina gets an invoice that says, "You owe X amount of dollars from the year before." Not the current year before but one year, one year back. So that includes the State of North Carolina, all of your cities and all your counties that do this direct dollar for dollar repayment at some time in the future. But they have no money in a reserve account to pay those benefits. A major change in this bill. We are not saying that all of these entities, the State of North Carolina, all of your cities, and all of your counties will now have an escrow account. And they have the dollars in that account. And instead of using a credit card, and I take this from my friend Representative Starnes, they now will use a debit card. They have money in the bank that these benefits will be drawn from. And they will be required to have 1% of their taxable payroll in reserve, opposed to riding the backs of everybody else. I told you that this is a very complicated bill. It has a lot of pieces and a lot of parts. We actually had a pie chart that we used to work off of, and one of the other sections that we looked at was the benefit duration. And we reduced the maximum duration of benefits from 13 weeks - we currently have 26 weeks. We are now developing a sliding scale, and it's tied to the current unemployment rate of the State of North Carolina, which is looked at twice a year. We are reducing the duration from 13 weeks to 20 weeks, and that is based on what our unemployment rate is. And if we could ever get to 5.5 unemployment rate or less, the range would be between 5 to 12 weeks. And that makes sense because the folks don't need the duration if there is full employment. We also addressed the calculation of the weekly benefit amount. Currently it is a rather complicated process, but we changed it to be based on the average of the last two quarters worked, rather than the highest quarter. The maximum weekly benefit - and that's something that has been discussed out in the community and seems to be a real issue with a lot of folks - but I ask you. If you do not have the chart before you, this information has been available since last November. That the State of North Carolina is the highest benefit state in the Southeast. We are well outside the bell curve. To give you an example, the maximum weekly benefit amount in Alabama is $265. Florida, $275. Georgia, $330.

“Kentucky, 415... North Carolina, 525... and that is indexed, meaning that changes every year. South Carolina is 326, Tennessee, 275... Virginia, 378. There was nothing magic, about how we came up with this… 350. Take that column of numbers and divide and you’re going to find an average… and that’s how we came up with the number of 350 dollars. Some of the other changes that we made… the partial weekly benefit… we have a disregard… 20 percent of the weekly benefit amount rather than 10... another change, is the waiting week… this plan will now require a waiting week for all new claims… and we removed all the wavers regarding that waiting week. The extended base… we are repealing that section. The extended benefit trigger… we removed those triggers and it simply reads that we will accept extended benefits if it is 100 percent federally funded… it’s another little term that I certainly wasn’t familiar with, but many of you may be… it’s called attached claims… and we found that probably 50 to 60 percent of the debt that we owe stems from attached claims… and this is when an employer wants to keep his chief cook and bottom washer, but perhaps it’s not the best of the season, so employer says to employee: “I will file an attached claim for you”… and that means that, that employer, does not have to be compliant to look for job to meet all the other requirements, because he is somewhat attached to that employer. There is a promise that, that person will come back to gainful employment within possibly 6 weeks… that can be extended to 12 weeks, 18 weeks, or 24... so that person, is receiving benefits through the fund, and still tied, to that employer. We made a provision for attached claims… that employer must have a positive credit balance and must reimburse the fund, for those number of weeks, that those benefits are expended. It will be limited to one time per employee, for not more than 6 weeks. There’s problems… everybody is a part of this problem… with all due respect, I say that the business community can no longer use the unemployment fund as a business model… that will not happen any longer in this bill. There’s the issue of disqualification… they’re very subjective currently, but now that is going to be based on each application for UI… you are qualified or disqualified. We are removing substantial fault, and most of the good cause provisions. They have continued to increase over time. We are retaining the domestic violence and spousal relocation due to military reassignment.”

other than that, we are eliminating substantial fault and eliminating most of the other good cause provisions unless they were federally required. We have a clear definition now to define suitable work and that definition is suitable work is any work after 10 weeks of UI benefits. That is the short version of the bill and now if it is your prerogative, I'm going to ask staff to go through the long explanation because I know they can do it more succinct than I can do and we will go through the long explanation of the bill, Mr. Chairman. [SPEAKER CHANGES] Thank you, Representative Howard. Before Ms. Averitt speaks on the bill, I would like to tell the committee and the public that we are going to vote on this bill and we will vote on this bill at 11:30 so barring amendments we can take up and committee discussion, at 11:30 we will take a vote. Just for information purposes for all that can hear this committee meeting. Ms. Averitt. [SPEAKER CHANGES] Mr. Chairman, I will be happy to answer questions and offer more explanation on any part that a member has a question about but I feel that Representative Howard's summary was, I don't have anything to add at this point to her summary. [SPEAKER CHANGES] Thank you. Representative Warren. [SPEAKER CHANGES] Thank you, Mr. Chairman. I would like to thank Representative Howard and Representative Starnes, and Ms. Averitt, Mr. Bizell and the rest of the staff for the fine work they did on this and for the opportunity to have worked on this bill. Ladies and Gentleman, the bill addresses a problem that actually some folks try to assign back to the 90's at which point the General Assembly relaxed the pseudo tax on businesses in the state and some people tried to put this debt on the business community. I'd like to point out that a lot of people who are in business today weren't in business back then. This is an existing problem that I believe really is here because of our failure to respond to recessions appropriately in 2001 and again in 2007. When our surplus fund was being depleted, we took no action, the General Assembly at that time, took no action to put the taxation program back into effect and to address it properly then. Had that happened, we wouldn't be in this situation today, but where we are is in a position that puts us as a state, non-competitive, not only with the southern states but nationally as well for companies who either want to start up, expand or relocate to North Carolina. In essence, this is going to cost us jobs, particularly if we don't act because to let the business community carry the full weight of this, we will not be able to alleviate this debt until 2019 and we cannot wait until 2019 to attract business, to create jobs and for our business community to be able to function more profitably. This is something we have to address today and it's not an easy solution. I think we all recognize that and it may not be a popular solution but we all came here to do the right thing and address the problems before the state. I believe this bill is one of the best bills that I have seen in the 3 years now that I have been here. I encourage you to look at it objectively and to evaluate it in the right light and I, at the proper time, Mr. Chair, would like to make a motion. [SPEAKER CHANGES] State your motion, for the record. [SPEAKER CHANGES] I would like to make a motion that the bill be given a favorable report and sent to the floor. [SPEAKER CHANGES] Unfavorable to the original bill? [SPEAKER CHANGES] Yes sir. Favorable to the committee substitute. You know the drill. [SPEAKER CHANGES] You got it. [SPEAKER CHANGES] If you don't mind, give it in full form. We have a lot of freshman here so they can hear it. [SPEAKER CHANGES] Sure. I would like to give a favorable report to the original bill, unfavorable to the PCS. [SPEAKER CHANGES] Backwards. [SPEAKER CHANGES] The other way around, excuse me. Let's try it again. I'd like to give a favorable report to the PCS, unfavorable to the bill. [SPEAKER CHANGES] Thank you. We will hold that motion. We'll hold that motion for the time being. Any further discussion from members of the committee? If not we will go into amendments. Representative Hall? Representative Hall. [SPEAKER CHANGES] Okay and this is discussion, Mr. Chair. [SPEAKER CHANGES] Yes, sir. [SPEAKER CHANGES] Just wanted to make sure we got a good history of this and I will come back to questions for staff. Representative Warren referenced

[speaker] and briefly that we werent in this situation when we had a reserve fund, and that we did reduce in part to lower the burden on business i also want to make sure we recognize that businesses do not pay into these taxes if the do have employees, so it is considered as part of the labor cost ,that they do and they very intelligent , have well paid accountants and business planers etc. so we dont think that this is somehow, funds that are given to the genral public and not considered in the business plans of those folks who operate in our state so again i want to emphasize business cost has been paid all along by the employees, who have their overall compensation, reduced as far as take home pay because of the business model the businesses use when considering their labor cost, so i just want to make sure we do have a fair discussion of what our problem is, i also want to make sure we understand where we currently sit all states as representative Howard said, are facing this problem , all states deal with it differently, some of the numbers, index numbers that representative Howard talked about, are in favor of North Carolina regarding the amounts of compensation and weeks , some of the number differ, but one of the things we do have to recognize , we going to have to have some balance and responsibility in this, is North Carolina with this and other factors considered , continues to be for about 12 years in a row, the best place or one of the top ten, 5, or 2 best places to do business in America, so alot of things go into that calculation , i want to make sure we have a clear discussion of this so we understand where we come out, lowest state and local tax burden on business in 2011 according to the council on state taxation. the best state for business number 2 in 2011 according to chief excutive magazine, the number 2 most favorable business climate in 2011 according to the developments council international, the number three best business climate in 2011 according to site selection magazine , the best state for business number 3 according to ford in 2011, America's top state for business number 3 in 2011, number 7 as far as the top state for doing business according to area develeopment magazine, number 13 for doing business according to technology and science capabillities, ??? to go along with what im saying is with this issue and this problem , we might want to take more then an hour and a half to discuss it, and we have ben able to function , although not as well as everbody else but certainly competively and we need to have a ballased approach , so i do want to make sure we understand, employees have ben paying into this all along , some people think that its only something that business does without considering their labor cost and that we do need to have a comprehensive solution to this problem , and we may need to take more than an hour and a half to discuss it and come out with something thats fair, fair for everybody [speaker changes] mr. chairmen, mr. chairmen, would representative Hall yield for a question , representative Holl [speaker changes] representative Hall [speaker changes] be glad to yield [Speaker changes to representative Hall (there are two listed with last name)] i think the reprenstative you have stated that these contributions paid by the employers are actually part of the compensation paid to the employees, that they will be recieving more money if this was not paid into the state using that logic would you accept that if we increase the contribution required of the employers that to hold their labor costs constant they should be able to recover this increase duction from the employees, [speaker changes] well no i wouldnt say that what i would say is that the employers, whatever we do , the solution we come up with, employers are going to continue to just their business models and decide what their profit margins need to be for them to stay in business , we are going to continue to do things to make it possible for them to do business in this state , including incentives of both state, local, county and city, that we do to do that and we're going to continue to maintain infrastructure in this state,and do publice private partnerships with universities and all the other things we do to go into their business model to decide so again its a partnership among many different factors this not being the only one that imsure they take into consideration, i dont think we could narrow it to that solution

Follow-up, would the gentlemen yield for a second question? [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] Mr. Chair, I don’t want to yield to too many questions because I know we have some amendments that need to be done and again we only have an hour and a half to do this so I prefer if it’s not germane to the deal that we discuss it afterwards. [SPEAKER CHANGES] I’ll tell you what, I’ll accept that. I realize that you would like the opportunity to present some amendments so we’ll discuss this on the floor. Thank you. [SPEAKER CHANGES] Very well, Representative Luebke. [SPEAKER CHANGES] Thank you, Mr. Chairman. It’s hard to know where to start on a bill. The public should first of all know the public concerned about this or just interested in this should know we received a copy of today’s bill thirty minutes ago. It’s also true that we’re going to be voting in an hour and a half. These are the most significant changes to unemployment benefits in decades, maybe ever in the history of the unemployment system in North Carolina. Representative Howard’s presentation was not balanced. She did a good job but she represented the perspective, she did not represent the perspective of the unemployed who are losing benefits substantially under this bill. There were other things that weren’t mentioned, for example, North Carolina in fact has an average benefit of 288 which is exactly in the middle of the 50 states. The assertion was made that we are so different from other states in the South East, the fact of the matter is Virginia and North Carolina are within $3 of one another. North Carolina has a 288, Virginia has 288 dollar average benefit and North Carolina has a 291. So it is just simply misleading to suggest that we are out of sync with everybody around us. The other thing that has not been talked about is what is the impact on a low income family where a worker is laid off? What is the impact on a middle income family where the employee is laid off? One third of the people here make more than $37,000 who are affected by this bill and their benefits will go down and I want to ask first of all if I might, Mr. Chairman, a question of staff. Can’t staff tell us, first of all if this bill had been in place, how many workers in North Carolina last fiscal year during the recession, great recession, would have had their benefits reduced? And Mr. Bizzell, maybe Rodney Bizzell address that. How many thousands of workers would have had their benefits reduced? [SPEAKER CHANGES] Mr. Bizzell [SPEAKER CHANGES] Mr. Chairman, as part of the information that we provided in the packet we looked at the number of the claimants during the great recession who would have been impacted by the impact of the reduction in the maximum weekly benefit and that number was 132,000 over the course of the recession. [SPEAKER CHANGES] Thank you, a follow-up question? [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] Mr. Bizzell can you tell us the cost to the benefit loss, the millions of dollars lost by the unemployed in North Carolina beginning July 1st if this bill becomes law and it seems to be on a fast track to become law so what is the impact in terms of millions of dollars lost to the unemployed and their families? [SPEAKER CHANGES] I’m not sure I understand the question. Was that in regard to the federal benefits? [SPEAKER CHANGES] No sir what I mean is we’ve got current law right now that sets out a certain amount of benefits. We have a proposed law that’s going to reduce the benefits to the employees of the state. These are employees who are Republican, employees who are Democrats, who have been laid off from work and my question is with this bill coming into effect how much will that reduce, in millions of dollars, the amount of dollars available to those unemployed workers? Or putting it another way, how many millions of dollars are not there for those unemployed workers to put back into our consumer economy? We will be losing millions and millions of dollars because those who are unemployed spend virtually 100% of the compensation they receive.

they spend it in the economy. So my question Mr. Bissel is, what's the cost to the employees? What's the reduction in terms of available millions of dollars with this bill as opposed to the current law? [SPEAKER CHANGES] Mr. chairman, I think we have an estimate for that. The first six months... we estimate that it's about 225 million. [SPEAKER CHANGES] Thank you. So that means that we, we need to hear and understand we're taking 225 million dollars out of the pockets of the unemployed in this state. Remember, contrary to what Representative Howard has said, this problem was not caused by the unemployed. It was caused by the business community which six times between 1992 and 2000, six times asked to have the unemployment tax reduced. And never after that during the years 2000 to 2008 did the business community come to the general assembly and say please raise the tax just in case. No sir, no ma'am. All they wanted was the tax to go down. That is what's causing the shortfall. And to take it out on the unemployed of North Carolina is just to me is totally unacceptable. It.s reprehensible to do that. And I ask you, any of you who say we're going to support this bill, if you can really go home to the unemployed in your district and say "I'm really sorry I had to reduce your benefits but I did"? You didn't have to do that, there's a chance to have a balanced bill that may have a ?? that may have a small reduction on benefits and a higher tax on employers to make it more balanced. Right now we have a one-sided bill with a huge hit, 200 million dollars in six months, so that's 400 million dollars in a fiscal year that people are not bringing home. My second question Mr. Chairman for the staff along, along these lines is: What is the total amount of higher taxes that the staff estimates total that employers will pay additional, compared to what they're paying now? [SPEAKER CHANGES] They'll be with you shortly. [SPEAKER CHANGES] Mr. Chairman, if we look at the period at which the debt would be paid off which would be 2015, employers would have paid an additional 20 million in ?? taxes and 800 million in ?? tax increases. [SPEAKER CHANGES] But, Mr. Bissell, what we're talking about here ?? ... follow up. Thank you Mr. Chairman. [SPEAKER CHANGES] Of course. [SPEAKER CHANGES] The key figure here is 20 million dollars, because... we're... our bill is about the state taxation. It's 20 million dollars for employers, 200 million dollars for employees. That is simply wrong. And I don't see how anyone can vote for a bill that has a 20 million dollar hit on employers, and a 20 million dollar hit on unemployed employees. Just seems to me that is so wrong. Twenty million versus two-hundred million. It's been asserted that the employers are paying their fair share... employees are paying their fair share, the unemployed are paying their fair share. First of all, the unemployed had nothing to do with this, but, second of all, that clearly is not true. According to staff, not my numbers, staff's numbers, 20 million dollars hit for employers, 200 million dollar hit for the unemployed workers and employees of the state. Now, Mr. Chairman, if I might at this point offer an amendment to this bill. [SPEAKER CHANGES] If you don't mind, I have several people that have questions and we'll come back to the amendment. Representative Brawley. [SPEAKER CHANGES] Yes sir. [SPEAKER CHANGES] If I might ask Representative Luebke a question. [SPEAKER CHANGES] Representative Luebke. [SPEAKER CHANGES] ?? [SPEAKER CHANGES] Representative Luebke, you said that the employers came and asked you for these tax reductions. I know you were here during that time. Could you tell me which employers asked you for those reductions? [SPEAKER CHANGES] Well the... I can tell you that small business and big business went to the leadership of the democratic party..

and I think the democratic party needs to take responsibility for having done that, for having listened to the business lobby there. I think we should have all stood up more. I would have to tell you I was not in favor of those kinds of cuts for the reasons that I feared but I was out voted by my democratic colleagues and so the mistake was made by, I'll own up to it, from a political party perspective, the democrat party did it but the source of the request came from the business community representative, representative Brawley. ?? [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] Representative Luebke. I was chair of the finance committee during that time and no business ever came to me and asked for a reduction. [SPEAKER CHANGES] Thank you representative Dollar. Representative Alexander. [SPEAKER CHANGES] Temporary. What the change is to our unemployment compensation system become permanent and if we were really going to deal with this and say that the cuts in the past were excessive then we should have permanent increases in what we put away for a rainy day and this should be balanced on both sides but I think it is extraordinarily disproportionately unbalanced for working families in North Carolina and I want to talk a little bit about cutting the amount of the weekly compensation down to three hundred and fifty dollars. As representative Luebke said, a average payout is consistent with what goes on in other states and some of our surrounding states so we do have some people who get more than in other states but if you average overall our unemployed it's consistent with surrounding states but five hundred and thirty dollars for a middle class family is not going to sustain them when we have a recession like the recession that we had. And let me tell you what it's going to do to the economy. People who make between thirty seven and fifty, sixty thousand dollars have mortgages in general. They are usually people who have been in the work force for a longer period of time and maybe in their fifties or in their sixties. They may have children in college or in community college and so these are people who are going to have more difficulty going back into the work force. We've seen statistics after statistics that if you're over the age of forty five it's much more difficult to get another job because of who you're competing with and there are about three people competing for every one job that is available so by cutting that higher rate we're basically telling people who are between the ages of forty five and sixty, well sorry you're not going to be able to pay your COBRA anymore. Sorry, you're kid is not going to be able to go to college anymore. sorry. You may go into foreclosure. All of those things not only affect those families but they affect our economy and to say that making sure that we sunset these minimal increases is more important to our economy than thinking about those families I think is highly misleading and heartless. I'll have my amendment after my colleagues have done theirs because like I said if under a miracle one of their amendments passes, I'll have to make an amendment to mine. [SPEAKER CHANGES] Yes maam. Thank you. Representative Collins. [SPEAKER CHANGES] I think we're focusing somewhat on the wrong thing here. The title of the bill , I think, points out an obvious emphasis change that we need to make here in North Carolina. We need to emphasize putting unemployed people back to work rather than compensating people for being unemployed. I think that's what a lot of this bill is all about. I know there's been a lot of changes in my lifetime but one of the changes that I've noticed has been that many times now when people lose a job, and I'm not saying every time, but in a lot of cases it has become customary and I know people have told me this that and they've told employers this and employers have repeated this back to me that people now begin to look for a job when their unemployment is getting ready to run out rather than when they lose the initial job. I think we will more than make up for the losses to the economy that has been mentioned before by employers- by employees getting back to work. I think this will help them get to work. It will make our state more competetive for drawing businesses in like we say we shouldn't expect new businesses to pay old debts and

Putting, putting claimants back to work should be our major emphasis. Helping those people get back to work should be our major emphasis. I consistently hear employers tell me - and have since I ran for office in 2010 - that the biggest competition they have for getting employees, for hiring people that they want to hire, is not other competitors in their business but is the unemployment check. I had an employer who - if I told you his name you'd see his equipment all over this area as well as a lot of our state - was trying to hire forklift operaters in 2010 at the height of the recession at $14 an hour. Didn't have to have any education, didn't have to have any skills they train them on the job. That's $560 a week. He said he couldn't hire anyone because they were telling him they could make $500 a week on unemployment, why would they work 40 hours a week for $60? So that maximum benefit is a problem getting people back to work. Same year I talked to one of our pharmaceutical manufacturers in our home town and, while they were making a presentation to us, they told me they had immediate openings for 200 people. And I stopped them immediately and I said, "What are we walking about? Are we talking about chemists here?" They said, "No, we're talking about factory line employees with a high school education." So, our employment compensation program has built a lot of problems. And one of the problems it's built has been a disensentive to get people back to work. I don't know why people in North Carolina should be paid 50% more than every state surrounding us for the same thing. For being unemployed. It doesn't make any sense, unless we're saying everybody in the country's heartless and nobody can survive anywhere in the Southeast besides in North Carolina, I think we're living in a fantasy world. I think our emphasis out to be helping people get back to work. I think that's we ought to task our employment security commission for doing. There's a lot of things that go along with drawing your own paycheck rather than drawing unemployment. A lot of advantages to that pride-wise, psychological-wise. I think people feel better about themselves when they're earning a paycheck, and anything we can do to help them do that we ought to be doing that. I'd like to ask one question too. What kind of wage does somebody have to be currently making now in order to have an unemployment benefit greater than the $350 max we're talking about? [SPEAKER CHANGES] Mister Chair? Mister Chair? [SPEAKER CHANGES] Representative Warren? [SPEAKER CHANGES] If I could respond to that. In order to make the maximum benefit of $535 a week in North Carolina, the claimant has to have made about $55,000-- just a little in excess of $55,000 a year. Currently in North Carolina, the average income's about $46,000 a year. And if I could at this time just address a couple other points that were made? First of all, as far as the length of time to review this bill, this bill went public - it was rolled out in revenues - on December 5th. And it's been online since then. There's been plenty of time for all of us who knew we were going to be elected to review that. It was a public event. So the bill has been available for quite some time. Additionally, for the look at hypothetical cases and ask questions like, "What if?" [SPEAKER CHANGES] Representative Warren. Do it rather in just a sec, because Representative Collins still had the floor. [SPEAKER CHANGES] I'm sorry. [SPEAKER CHANGES] Are you finished, Representative Collins? [SPEAKER CHANGES] He answered the question that I had. [SPEAKER CHANGES] And I've got Chairperson Brawley and then I will take your Representative [crosstalk]. [SPEAKER CHANGES] Thank you, Mr. Chairman. I'm always thought of as a warm and kind and considerate gentlemen. And being called heartless and mean spirited kinda bothers me a little bit. But, you know that cuts both ways. These people on unemployment would be much better benefited if they had jobs and opportunity. And when those calling me heartless are constantly attacking success, constantly attacking achievement, constantly attacking anything that says, "I'm able to accomplish something," and at the same time encouraging more and more benefit payments. Every time you turn around, billings putting a state, a federal government into such debt our children and future generations are going to be in trouble. I don't feel mean spirited. I think I'm making good common sense. I'm trying to provide jobs. And I think you should be too. [SPEAKER CHANGES] Representative Blust. [SPEAKER CHANGES] I just wanna respond to a couple things that Representative Luebke raised, and there's-- I anticipated a lot of of demagoguery over this bill and more to come. And already-- and I'm troubled by the bill too. I don't like doing this. And we can get in an argument over who caused the problem, how long it's been out here. But it's been dumped on this general assembly. And it's incumbent upon us to.

Fix it and it has been anticipated long time, one of the false heards that Rep Lucas is trying to create is this first of all is a rushed job. And we only can get to look at the bill that this is bad and you are just rushing through. And I can personally attest having been on revenue loss study commission. This has been around a long time. I believe last session we even passed a bill to hire expertise to help us grapple with what is the best way to deal with the horrible problem that has developed. It’s going to harm the business community, harm future employees in the state. This has been vetted a long time all kinds of people with concerns came before revenue loss study commission. The idea that you couldn’t get this version of the bill to half hour before this meeting is just not true. This thing a bill gets filed. Now we have a computerized system in the general assembly. This bill got filed and you could get it on the internet. I ran off a copy yesterday afternoon of this version of the bill .They were hours to go last night to study the new provisions of it . So it was just not accurate to make this a rushed job. The other thing it’s got to be remembered and pointed out again and again, the benefit reduction in this bill of prospective is for new unemployed started I believe July 1st. So no one currently on the program is going to have the benefits cut. That really isn’t pleasant to do. But unemployment was never intended to replace a job. I don’ think anybody most people with jobs are having a hard time meeting their mortgage and their cobrids of different payments. So that’s got to be kept in mind. So it isn’t a pleasant thing. But it’s the best solution I have seen that’s been actually proposed. But some people want to bond it this indebtedness. But someone used to in charge of the general assembly matched out our state credit cards. So we are trying to do the best we can under the circumstances and I think this is a reasonable approach and I think we are just going to have to one by one calmly parry back on some of the false charges that are going to be out there against this bill. [Speaker Changes] Rep Alexander and then Warren and then amendments [Speaker Changes] Thank you Mr.Chair. May be I have with the wrong [inaudible] in doing these numbers, I figured out I seem to have a lot of constituents. These annual income seem to be between 25,000 and 37000 , which means they are not making $55,640 which would enable them to get the maximum benefits under our existing system. However we drilled down in to the numbers. We find out how existing theory is that unemployment compensation is going to be targeted at 56 and two-thirds of the average weekly insured wage under the existing system. Assuming its two thirds, if you assume that it takes 100% to meet somebody’s obligation, we already have them at least a third down in terms of what they need to do whatever it is. Whether it’s [inaudible] whether it’s a mortgage whether it’s a card payment whether it’s food. So the whole stretch of imagination is our existing system overly generous. I think to characterize it as being overly generous and to make it seem as if people are lined up at the borders to come over the Appalachian mountains to come down the Chandon valley to swim up the Catawba river in order to get unemployment benefits here in the utopia of North Carolina, somebody is smoking my medical campus bill. We are not presiding over.

A system that is said to make a bad effect says saying that the first myth that we need to explain all of that ms and the eve of a on you. But the base of a jobs and who got caught in that it's acting of job offers because of the great about money they've made until employment at them as Mia be a good method is former Alpha log jam about welfare queen value human that that still use tell the full better that way Cadillac are a good one, commodities , you understand spirited debate by the riots that decade as the happened that we need to be talking about is a realization structural unemployment as simple as we said the topic is with the go back to a full import that unemployment achieved if employment picture of-home is gonna be 5 to 7 minutes one of the economists that Italy’s fact that they have heard, talking the same thing that got even when we get all the other side of this great recession, and the blowfish structural unemployment that is higher than 5% and therefore are going to have to rethink what he has to we doing an across of Corel's spectrum all things in order to make it possible for, systems to be able to appropriately transition from an economy acquired to 2007 to 2 act of different tag oh, make them cry as a different address still see it get back, lives in them that does that mean that we have to do everything in the way that was then starting in 1937 delegates, it means we probably need to be spending more money only trained we need to be based upon a community college we need to begin the far west of things that are not directly addressed in this measure that is why a dazed and German that this at mention of name calling about your was possible to get to see what all this possible to get messy democrats republicans and then it's every last one was made a bunch of dumb decisions over the last 10 to 15 years ago so as to where we all right now , about the work together to try to give out all that we are right now but said that that the baby out with a bad four and that's the problem was some tough what would a lot of contemplating the word that many as long as someone that emit a couple minutes longer than that the feud that can lead to had attended, station nine is that this team is about 11:00 PM bench that in the process of putting this together let us and not forget that basics as some that is going to have to rely on the use we put together does not make 55,000 Al that basic, basic service and make some less . Bennett that those sale at the county's bank, says that the data and the approach that come from Mecklenburg idea that, as that Santa Ana the banking industry, that make that much money will become an invalid that you that you can have a system that open up that late deals with people in that category as well as a typically be above flood of the appropriate lead in the private sector to sell it, but it does he have a levy, that is not to reliability which let let us tell me is that left them either of those, but he issued better than a politician opportunity to let my kids under the terms of thank you so much ladies and gentle man (SPEAKER CHANGES) reason to take us a warm that two and living with someone to represent the manager said this is not the ……..

politicize the bill. this is not a time to think about hypothetical. If we want to get down that road we could talk about hypothetically what would have been the impact, where would we be today had the General Assembly in 2002 or 2007 reacted to the fact that that the reserve fund was dwindling, we wouldn't be in this situation today but it's not a time to look back. It's a time to look forward and to evaluate this bill in all honesty. To Representative Alexander's point, a claimants benefit is based on their individual earnings. The media and some of us in this room are focused on the maximum and that's the wrong road to look at in evaluating this bill. So I would just encourage, again, everybody to please understand that we are in a little different situation. It's not every state in the union that is in this predicament. There's only about 30 that owe the government monies that were automatically funneled down. There's only two that owe more than we do and they out-populate us by about three and four times, New York, California. We have 9.3/9.6 million people in this state and we owe the third highest amount of money to the federal government. As far as how this is going to effect people today also take into consideration how it's going to impact people if we have to pay this back, take until 2019 to pay this back, and employers don't come to the state, don't expand in the state, don't replace employees that they lose through attrition, or decide to hire one less employee so they can afford the increasing food tax. We have to look at this objectively. We can't get sidetracked by looking at individual cases of an individual claimant. We have to consider everything across the board. So again, I ask you please, let's keep this non-partisan, let's keep it objective, let's get it passed. [SPEAKER CHANGES] Thank you, at this time we'll take up the Luebke Amendment. Representative Luebke, please explain your amendment to the committee. [SPEAKER CHANGES] Thank you, Mr. Chairman. First of all, if any of you have had a chance to get through the bill you'll know that on page 21, toward the bottom, the bill makes a major change in our policy in terms of how many weeks an unemployed person can receive benefits. 43 states pay out 26 weeks as do we under current law. Under this proposal, the maximum number of weeks an employee could have, receive the benefits, is 20 weeks. In doing so, moving it down from 26 weeks to 20 weeks, puts us below Alabama and Mississippi. We have a harsher law proposed than Alabama and Mississippi and it's important also to remember that if you take these $291, which is our average benefit, not to talk about the $500 and change, if we take that and multiply that by the six months that 26 weeks represents, that's about $7,500. And these numbers are based on what Ms. [??] had put in the staff report. So you're talking about $7,500 is under current law and you want to cut that from 26 weeks down to 20 weeks. In other words you want to make a 30% cut in the number of weeks that employees can get compensation. The unemployed were not part, were not at the table when this bill was developed. Do not let anyone tell you otherwise. The unemployed were not here. The unemployed would never have said, "Oh sure, it's fine to cut our benefits from 26 weeks to 20 weeks." And those who are saying, "Gosh, it's good for our unemployed in my district to have to have fewer benefits." Look them in the face and tell them that. I don't believe you will find that they'll be very happy when they find out you've cut their benefit weeks from 26 to 20. So, Mr. Chairman, I want to move forward, for that reason, an amendment that restores the 26 weeks, puts us back with 43 other states and virtually every other southern state including Alabama and Mississippi. We need to do better than those two states. So that's my amendment. I move it to option. [SPEAKER CHANGES] Thank you, Representative Luebke. Representative Warren? [SPEAKER CHANGES] And Mr Chairman, may I first, I'd like the aye's and no's on this amendment please, so people are, for the freshmen that means you're on the record. Anyone in the public can see how you voted on this question, to cut the number of weeks of benefits. Thank you. [SPEAKER CHANGES] And that is a procedural move that has been here since time in memorium. You can look at all of the votes

now I think the Democratic party needs to take responsibility for having done that, for to have them listen to the business lobby there, I think we all should have stood up more, I will have to tell you I was not in favor of those kinds of cuts for the reasons that are ?? but I was out-voted by my Democratic colleagues. And so the mistake was made, by I'll own up to it from a political party perspective, the Democrat party did it. But the source of the request, the request came from the business community, reprentative Brawley ?? follow up [SPEAKER CHANGES] Representative Luebke I was chair of the finance committee at that time and no business, no business ever came to me and asked for the reduction. [SPEAKER CHANGES] Thank you representative Brawley, representative Alexander [SPEAKER CHANGES] Temporary. But the changes to our unemployment compensation system become permanent. And if we were really going to deal with this and say that the cuts in the past were excessive, then we should have permanent increases in what we put away for a rainy day. And this should be balanced on both sides. But I think it is extraordinarily and disproportionately unbalanced for working families in North Carolina. And I want to talk a little bit about cutting the amount of the weekly compensation down to three hundred and fifty dollars, as representative Luebke said, our average payout is consistent with what goes on in other states, and some of our surrounding states. So we do have some people who get more than in other states, but if you average over all our unemployed, it's consistent with surrounding states. But five hundred and thirty-five dollars, for a middle class family is not going to sustain them when we have a recession like the recession that we've had. And let me tell you what it's going to do to the economy. People who make between thirty-seven and fifty sixty thousand dollars have mortgages in general. They're usually people who have been in the work force for a longer period of time. And may be in their fifties, or in their sixties. They may have children in college, or in community college. And so these are people who are going to have more difficulty going back into the work force. We've seen statistic after statistic that if you're over the age of 45, it's much more difficult to get another job because of who you're competing with. And there are about three jobs, there are about three people competing for every one job that's available. So by cutting that higher rate, we're basically telling people who are between the ages of 45 and 60, well, sorry, you're not going to be able to pay your COBRA anymore. Sorry, your kid is not going to be able to go to college anymore. Sorry, you may go into foreclosure. All of those things, not only affect those families, but they affect our economy. And to say that making sure that we sunset these minimal increases is more important to our economy than thinking about those families, I think is highly misleading and heartless. I'll have my amendment after my colleagues have done theirs because like I said if under a miracle one of their amendments passes, I'll have to make an amendment to mine. [SPEAKER CHANGES] Yes ma'am, thank you. Representative Collins. [SPEAKER CHANGES] Just, is it on, well? I'll hold it. I think we're focusing somewhat on the wrong thing here. The title of the bill I think points out an obvious emphasis change that we need to make here in North Carolina, we need to emphasize putting unemployed people back to work rather than compensating people for being unemployed, I think that's what a lot of this bill is all about. I know there's been a lot of changes in my lifetime, but one of the changes that I've noticed has been that many times now when people lose a job, and I'm not saying every time, but in a lot of cases it's become customary and I know people have told me this that and they've told employers this and employers have repeated this back to me that people now begin to look for a job when their unemployment's getting ready to run out rather than when they lose the initial job. I think we'll more than make up for the losses to the economy that's been mentioned before by employers, by employees getting back to work I think this will help them get to work, it'll make our state more competitive for drawing businesses in and like we say we shouldn't expect new businesses to pay old debts, and

Thank you Mr. Chair. I have copies of the amendment. [SPEAKER CHANGES]Sergeant Barns if you will pass them out thank you. While its being passed out let me just explain a very simple amendment which would maintain the formula and the procedure in existing law to establish what our maximum benefit is. Currently we do this annually around I believe its August the first, somewhere along in there. It would just maintain doing exactly that. I believe that if we did that we would not be physically way out of balance because it doesn't propose changing any of the other moving parts. Alright Mr. Chairman I would also like to ask for the [??] [SPEAKER CHANGES]Yes sir. Representative Howard [SPEAKER CHANGES]I think this takes us exactly back to where we were with Dr.[??]. Again if this is going into effect when the bill is effective July one, again this puts us out of the balance and takes us right back where we are right now, representative Alexander with the same calculation. So I would just ask folks to vote no. [SPEAKER CHANGES] If you would like to re-draft it and re-submit it on the floor, I'd like to pull this amendment as well. If it pulls the bill out of balance we're not going to hear it. But Mr. Chairman [SPEAKER CHANGES] Yes sir. I'd like to dispute the notion that its going to pull the bill out of balance because remember that the formula is a sliding scale. Nothing else changes, all of the taxation adjustments the [??]duration adjustments; all of that remains the same. So it seems to me that... [SPEAKER CHANGES]Mr. Chairman the point of order is so the debate on a ruling is not in order unless there is an appeal from the Chair. [SPEAKER CHANGES] Thank you Representative Stam. This amendment is withdrawn. The third amendment is the Tine amendment, and if I pronounced your name wrong, forgive me. [SPEAKER CHANGES] No that's it. Thank you very much. Yep nothing fancy. [SPEAKER CHANGES] I try to practice. [SPEAKER CHANGES] Alright. Thank you. [SPEAKER CHANGES] You should have that amendment before we go on. [SPEAKER CHANGES] To the revenue laws and oversight committee; I want to thank you for all your work and apologize for coming so late to the game. Obviously you've had a lot of consideration on this and I would have preferred to bring this type of proposal earlier, but I appreciate you hearing it now. As a business owner and someone heavily involved in economic development in the past; I do take this problem very seriously and agree with your assessment that we need to clean this up as quickly as possible and keep to the timeline that you've set out in your proposal. So therefore I am offering a compromise amendment that would do two things. But in my work with the staff I ask that they keep the same timeline so it would still pay back the debt at the same time and build the same reserves and things like that. So Ms. [??] staff was very helpful in that. So it would change two things. One it would reduce the max payout to four hundred and twenty-five dollars, and in order to offset that it would take the pseudo from the proposed six one hundredths increase to twenty-nine one hundredths increase; and that way it keeps the same timeline and it tries to lessen the impact on some of the unemployed while also... and as a business owner I know that I'm one of the ones that would be paying this increase, but increase the hurt a little bit on the businesses on it. [SPEAKER CHANGES] Representative Howard. [SPEAKER CHANGES] And I sincerely....

So I think the time waiting with me Arleigh this morning and now we discussed this amendment registering again on have I LTM on can have to pay is the amendment that are patient with affect any at least hasn't had good balance it out there at the back on this coincident basics community in the nonpersonnel platform your writing is that the business community is already having a field SYNCHRONY and is now a federal bathroom anything criticism year after year after year currently 80 and $84 per employee per year to CCC to Is not way to really stand here are thinking yet whole range of our friends are and how and when Brandman University of $400 per employee per year are okay a.m. electronics which is continuing to increase out how to do something I just sat down with me invested asDistrict represented by Mr. chairman sensor to represented bullies here would you please clarify which one additional I doubt that another job is Anglophile chair person patrolman probably and Lexapro effectiveness chairman also want to will fight representative time for his well-crafted and well considered amendment of but I did notice that there is not a fiscal note with it and I was wondering if wanted been prepared Mr. chairman Vincent else will just as in effect North Carolina's coffers all entire the this is the amendment doesn't affect the Carolinas coffers therefore a fiscal note is irrelevant any further questions from the committee staff Karl Rove observed Alexander I Alexander I lost in this is not rollcall represented what I was for it before it was against they will tell you here relentless know lives of vulnerable overmolded know representative Bill Brawley know representative Bill Brawley know representative or for no represented Courtney Brooks and Connie I represent Collins Rector of Collins know wrote some code from our recent Cawthon I observe Davis was of Davis know represents all are represents all or no observe Hager prison of Hager know representative all in rooms of whole DS representative Hamilton was of Hamilton yes representative paints crimson of Haynes yes representative officer resume parser know representative Holly is Holly yes representative Howard representative Howard know representative Johnson represents representative Johnson know representative Jordan achievement Jones rubs of Jones know representative Jordan representative Jordan no provision of Lewis representative Lewis know absolutely I repeatedly G.I. representative McManus observant menace yes representative Moffat observe Moffat know representative or more ribs and more I lives of Timor lives of Timor know ribs of the loss terms of the Roth I represent Samuelson represent Samuelson know representative safer

[SPEAKER CHANGES]Representative Schaffer, no. Representative Setzer? [SPEAKER CHANGES]No. [SPEAKER CHANGES]Representative Setzer, no. Representative Stam? [SPEAKER CHANGES]No. [SPEAKER CHANGES]Representative Stam, no. Representative Starnes? [SPEAKER CHANGES]No. [SPEAKER CHANGES]Representative Starnes, no. Representative Stone? [SPEAKER CHANGES]No. [SPEAKER CHANGES]Representative Stone, no. Representative Tine? [SPEAKER CHANGES]Yes. [SPEAKER CHANGES]Representative Tine, yes. Representative Waddell? [SPEAKER CHANGES]Yes. [SPEAKER CHANGES]Representative Waddell, yes. Representative Warren? [SPEAKER CHANGES]No. [SPEAKER CHANGES]Representative Warren, no. Representative Wells? [SPEAKER CHANGES]No. [SPEAKER CHANGES]Representative Wells, no. Amendment failed, 24 no, 13 yes. We now have the Ross amendment. [SPEAKER CHANGES]Thank your Mr. Chairman. And had Representative Tines amendment passed, I would have had to amend my amendment, so what this amendment does, is it establishes what the weekly benefit amount is, but it retains the $350 cap that is already in Representative Howard's bill. And to explain this, under our current UI system, we base the weekly benefit amount based on the highest weekly benefit that the employee had in the quarter. What this does is the bill takes it to whatever the weekly benefit was the time the person was let go, which may be a lower weekly benefit. This amendment takes the 2 highest benefit quarters, so it's still will be averaging that out will be lower to what current law is. It basically takes us back to where the law was in North Carolin, 20 years ago in 1993. so this amendment goes back to North Carolin law in 1993 for how to calculate the weekly benefit. Again, weekly benefit can't go over $350, which is what Representative Howard has. It's also consistent with how a majority of states address the weekly benefit amount is. So this is basically calculating what the weekly benefit will be between $0 and $350. And so it's to give people just a little bit more based on their work history during this short period of time when they'll recover. And I respectfully move its adoption. [SPEAKER CHANGES]Representative Collins. [SPEAKER CHANGES]I like to ask a question on either Representative Ross, or staff, or whoever can answer this question. I understand 2 highest quarters, but what is the individual's base period? 2 quarters out of how many quarters or years, or whatever we're looking back? [SPEAKER CHANGES]Mr. Chairman, I would prefer that Ms. Averette answer that question. [SPEAKER CHANGES]Alright, thank you. Representative Collins, if you resubmit that question. [SPEAKER CHANGES]Yes. I was just wondering how the base period is defined. 2 quarters out of how many previous quarters? [SPEAKER CHANGES]It's 15 months, so it's 5 quarters. [SPEAKER CHANGES]Representative Samuelson. [SPEAKER CHANGES]A technical question. I'm looking on page 19, line 48, and it doesn't look like that's where it's supposed to go. Can you give us further accomplice? [SPEAKER CHANGES]I apologize, the line number is incorrect. I believe it's the page numbers, it should be page 20, line 48, through page 21, line 2. [SPEAKER CHANGES]Thank you. Mr. Chairman, can we add that technical amendment? [SPEAKER CHANGES]Are there any objections to adding a technical amendment to this bill? Without reprinting it, I hope not. Surely, any objections? Hearing none, it's done. [SPEAKER CHANGES]Thank you. [SPEAKER CHANGES]Mr. Chairman? [SPEAKER CHANGES]Any further discussion? Representative Howard? [SPEAKER CHANGES]With all due respect, Mr. Chairman, I'm not sure how this is going to play into the total fees. I do read

From that the weekly benefits in the combative and 99 seats give the 3:50 AM just 9:00 AM I'm not sure where are that this doesn't begin to seven bounced because the blaze is being calculated said that are used at least seven and ended up making Mr. Chairman I'd like coffee ice in the sprints- Caldwell, (SPEAKER CHANGES) the pentagon standard five Alexander I. Robinson of lost a bid is a lost no represent of our Brawley the arms of our Brawley no offensive or bill Bradley brings a bill Brawley no permissive bar as if there are no roads of corny for the same party five represent Collins and represent Collins no robes of Gotham hundreds of problem five was the biggest rows of data is no weapons in the dollar represent all are no records in the payer representative they are no roads of all the represent all U.S. Representative Elton armies of cable sent by Representative James represent pains by representative waters said that his employees serve no Representative Ali Reza McCauley by Representative Howard L Representative Howard no represent out seven represent Representative Johnson no Representative Jones but certainly an event that some Jones no representative and representative and no Representative Louis Representative Lois no represented would keep I represent representative looking by Representative McManus represents McManus by Representative Moffett represents Moffett no representative Armone representative or more by representative Timor are the team or no represent the walls are represented dear all five representatives said Olsen represented representative said Wilson no representatives say five representatives say far no representatives said sir representative sets are no Representative Sam Rep says stamp no representatives starts for those storms no representatives told representative stone no represented five Representative Todd U.S. representative La Belle representative La Belle us represent a Warne represent of Warne and no represent Wills represented Wills no way to have been in the sales of 13 from 13 years to implement a photo of you who the myself ever represented one mischance are strands of discern my understanding is this a good rule was together as one more minute offer there's not one of the reps in looking no one to win a starting either AM in the senate committee will not be as a method of this material from the of course , you will be removed as a way of hours to Zaire there's no no further minutes,(SPEAKER CHANGES) we have a motion on the floor for Federal reporting table the racial bill and we will have a final discussion of the committee that's a tall they just kept pushing the Saturday them to look into be alive until some people indicated to get the( SPEAKER CHANGES) bill has been out since December and is approximate 14 H difference between the December 5 bill available his own home the website landslide were considering the day so certainly a significant difference when you talk about what's in the bill law, David Duval Mitchell we understand ago, this and other places is not just within this bill that noriega's role or has a right to know what we're going home for the inconvenience that they can we help people voted for a……

Most have nothing to say what we do they have a right to Milwaukee and see what we do an understandable we don't soak up as important as people will come these two things that came out that when port name One was mentioned that to you for recruiting businesses to the state we talk about how effective the state is intact but if we're growing businesses to the state that presumption that those businesses will be assuming eight bit old battle of the business is a bit where you're out of this issue that we're proposing to do a goal in the content is not a balanced manner it as to be done but in the balance away although we're proposing to do is say, employees have come to the state beach and will come to the state has a better employee as well and say you have to pay all this cost of this day that was incurred because of previous unemployment for employees in the state and sell again the question of Isabella’s to do that but we all have an interest in it and cannot they want to do better than what we've done in this deal to make that will work for all parties involved in digital folder lot of things in taxes they wouldn't give him a fully called we will make sure we understand all of these put together this is not a stand alone incidents and some things we did the best distortion footing a lot of state employees until unemployment in the particular category that represent a pilot up about it now headed of an impediment to ban and these expenses won't sell a game where all complicity in essence a leased me to try to find a balanced approach, they can get new unit thank you-looking by cuba's chairman thank you (SPEAKER CHANGES) where the points that made earlier, but will lower the decibel things and then the judge from the first goal from thank you, the staff for the future of the job 20 of the summary of the bill from kit when of favored the dollar for making them available last night, better that than nothing at all of which machine, I would also stood thank the chairman for his fairness are in some of the decision to allow ministry offered a lot of the shakers and more, I think the I think you plan your plane came to represent more than a thing as soon as possible lead of my mentors and elimination lot more than a sham even a fair and one of things and we talked about the presence of a comment or two ago you said the only effect, would take five, and another some people from the skepticism for sure and maybe if all I know that the captain of-the moment I tell you if the committee was two for promising we adjourned yesterday it will happen then( SPEAKER CHANGES) I keep my word as you should direct relation as I do and (SPEAKER CHANGES) I just, you will have to swing the public to note that these two groups that oppose this bill would be heard in a milieu that allow the move from allowed to two days, and we're on amendments that I know that we discuss the house and a caucus and I think with a shortage of talent , and things went so quickly that would offer, not appear to be offered the first one is to stop and other health issue of ballots, still as of now has the taxes that business will pay 20,000,000, our staff additional are those of those additional taxes sunset take away the sensor that is a book us to employees starting July 1 of permit an updated version of ms are reason enough to vote against bill because it is not the balance of temporary cuts for employers to brandishing his firm's lawyers to one million dollar cut for employees, it says one memo that nothing will be thinking about, the second is that separates it all is a decision by the majority to turn down the Federal emergency extended Federal benefits for employees there are 80,030 thousand employees in North Carolina, loose extended benefits that were included in the fiscal with bill vary in this bill they will loose those extended Federal benefits were turning down money that we as a nutshell in the zip into the Federal coffers Federal coffers using that bill had benefits $25,000,000 a week they can go to the employees and turned onto a consumer economy and needs to be noted that this committee initial rush to put this bill into place on July 1, 2013 of routing 8000 long……..

Term unemployed persons in North Carolina, and that's the second amendment I , we were talking about offering and just, in the, in the rush of things didn't get offered. But there are two points that I think represent the unfairness of this bill to the unemployed of the state. And members of the committee, I hope you will all vote no on this bill because of the fundamental unfairness and the process. I would say besides the, I'm really, having chaired the committee for 12 years, the kind of point that my friend Representative Moore put there to keep this amendments from being voted on seemed extraordinarily unfair. Let us speak to that as committee members. It really should have happened, and we shouldn't have had that push, because it did not allow us to have a full debate on the issues. So for both reasons, members, both for reasons of process but also because of the fundamental unfairness and lack of balance to this bill, I urge you to vote no on the bill. And mister chairman, I request the ayes and nos. [SPEAKER CHANGES] Absolutely. Representative Collins. [SPEAKER CHANGES] It never ceases to amaze me whether on the House floor or in committee doing work how many self-contradictory statements I hear and just flights of illogic and so forth and today, the thing we're playing around with is how we're hurting employees rather than employers. On one hand, we hear that businesses figure the cost of the unemployment tax they're paying into their employment package, and therefore as long as we've got this issue out there, employees are paying it. Now I just heard that when we get this situation taken care of and the business owners no longer has this extra tax to pay that somehow or other the employees are still gonna be the ones to continue to pay, even though we've made the cost lower on employers for their employment package. So to me, it doesn't make any sense. The truth of the matter is, by solving this problem which this bill does, we're gonna help employers and employees both by helping employment in North Carolina which again is the purpose of this bill and what we need to be focusing on. Thank you. [SPEAKER CHANGES] Thank you. At this time, for the purpose of public comment, Representative Luebke mentioned two groups that would like we speak. We will allow each group two minutes. The AFLCIO, budget and tax center, and if time will permit, anyone else, but we will vote on this bill at 11:30. Please. And please state you name for the record so we can have it for the minutes. [SPEAKER CHANGES] Thank you mister chair, members of the committee. I'm Bill Rowe with the North Carolina Justice Center. I appreciate getting two minutes. That's one minute more than we got when we were talking at the revenue laws so we do appreciate the extra time. [SPEAKER CHANGES] It's our pleasure. [SPEAKER CHANGES] This bill does need more discussion. This is a good start. You all are dealing with really hard issues and really difficult ones and there's no reason to have to rush it through today. Many of you have been around a lot longer. Some of you are very new, but a bill of this magnitude could take a week or two. People back home could talk to you about it. I know your business interests are talking to you about it because they're all around the room in here. But you might even go back home and talk to some unemployed folks who would want to weigh in on this, and that would be a great opportunity to let this bill sit for a week or so in committee to hear back from folks. Also to bring everybody to the table. You've worked with many hard issues over the years. Worker's comp being one, where all the interests stood in the room together and tried to hash something out. And we're not doing it on this bill here. I do agree that, with Representative Blust on probably more things than he may think but facts are important. Facts are really important. And I think you really need to look hard at this bill and when you say that it's balanced I want to clear up one thing that I think Representative Luebke made a point but to understand the 20 million dollars that is a hit for employers on this bill is for the whole period until 2016 when the debt is paid off. If you look at, there's a little one page here that you've gotten that lists the cumulative fiscal impact on the individual UI changes and if you look at the pieces, the three major pieces, we didn't even get into, we're not even scratching the surface on all of the other pieces of this bill that are going to hurt people. But if you look at those three major changes, we're talking about billions of dollars. Billions of dollars. So to say it's balanced when we have 20 million dollars for the cumulative period for employers, and we could even include the few to tax credit. The few to tax piece in there. It's not balanced. Employees will be paying more than 70% of this debt in reduced benefits. We will make changes that some states have never thought about before in this bill

and we make them permanent. All under the guise that we have to solve this problem: the problem of paying off the federal government. The problem is when the federal government gets paid off and the fund is back in order, these cuts remain permanent and we've really dismantled an unemployment insurance system that was by all measures in the middle of the pact for the rest of the country. Really ask for you all to slow down. There's a lot to be talked about here. Passing this bill in the middle or end of February wouldn't be the end of the world. Thank you. [SPEAKER CHANGES] Thank you. Yes, sir? [SPEAKER CHANGES] My name is Mike Hocken, I'm here today on behalf of the North Carolina State-- [SPEAKER CHANGES] ?? Mike. I can't hear-- [SPEAKER CHANGES] You may have to hold the button down, Mr. Hocken. [SPEAKER CHANGES] Can you hear me now? [SPEAKER CHANGES] Yes, sir. [SPEAKER CHANGES] I'm sorry. All I'm saying is we want the system to work. And for 30 years, as the people and the employment security division of the department of commerce would know, we've been involved in the conversation of how to try to make it work. We haven't always, often rarely or listened to. For example we opposed the tax cuts in the 90s. But we were involved because we have a perspective about what it does. And this is the first time that I can remember that we haven't been involved in the discussion at all. I just want to re-iterate what it does to people. When you lose your job, especially you're the support of your family and you've been working a long time, it's traumatic. Putting aside the money, it's traumatic. What about my family? What are my friends going to say? What am I going to say in church? Out of this amount you get you've got to pay your car payment, your mortgage. That right there will take care of most of it. Your health care, your medicine, your food for your children. And these are people that did nothing wrong. They're out of work through no fault of their own. And I do want to address one thing, is that the question about whether people are not working because they'd rather get an unemployment check. I can't say that that never happens, but we have good workers in this state. And I hope that we're not trying to send the message that we don't. People want to work. Indeed, when our county was found in the 90s, we had either the first or second every year, rate of quick return to work. Our people were going back to work more quickly than any other state when they lost their job, and the benefit levels were proportionally the same. People want to work. They're just stuck in the situation where there are no jobs or not enough jobs. And so I would just echo Bill that I think that we are solving this problem disproportionally on the backs of workers and unemployed people who didn't do anything wrong. And it wouldn't hurt to slow down and hear from everybody about suggestions about how things might be fixed. Thank you very much. [SPEAKER CHANGES] Thank you. At this time, we have the motion on the floor from Representative Harry Warren who moves to have a favor report for the PCS for House bill number 4, unfavorable to the original bill. No further discussion. All in favor, immediately will call the role-- [SPEAKER CHANGES] Mister Chairman. [SPEAKER CHANGES] Representative Alexander? [SPEAKER CHANGES] Nay. [SPEAKER CHANGES] Representative Alexander: nay. Representative Blust? [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Blust: aye. Representative R. Brawley? [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative R. Brawley: aye. Representative Bill Brawley? [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Billy Brawley: aye. Representative Burr? [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Burr: aye. Representative Carney? [SPEAKER CHANGES] Nay. [SPEAKER CHANGES] Representative Carney: no. Representative Collins? [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Collins: aye. Representative Cotham? Representative Cotham: no. Representative Davis? Representative Davis: aye. Representative Dollar? Representative Dollar: aye. Representative Hager? [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Hager: aye. Representative Hall? [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Hall: no. Representative Hamilton? [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Hamilton: no. Representative Hanes? [SPEAKER CHANGES] Representative Hanes: no. Representative Hardister? [SPEAKER CHANGES] Yes. [SPEAKER CHANGES] Representative Hardister: yes. Representative Holley? [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Holley: no. Representative Howard? [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Howard: aye. Representative Johnson? [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Johnson: aye. Representative Jones? [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Jones: aye. Representative Jordan? [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Jordan: aye. Representative Lewis? [SPEAKER CHANGES] Aye. [SPEAKER CHANGES]

Representative Lewis; Aye. Representative Luebke? Representative Luebke; No. Representative McManus? Representative McManus; No. Representative Moffitt? Representative Moffitt; Aye. Representative R. Moore? Representative R. Moore; Nay. Representative T. Moore? Representative T. Moore; Aye. Representative D. Ross? Representative D. Ross; Nay. Representative Samuelson? Representative Samuelson; Aye. Representative Schaffer? Representative Schaffer; Aye. Representative Setzer? Representative Setzer; Aye. Representative Stam? Representative Stam; Aye. Representative Starnes? I'm sorry? Representative Starnes; Aye. Representative Stone? Representative Stone; Aye. Representative Tine? Representative Tine; No. Representative Waddell? Representative Waddell, No. Representative Warren? Representative Warren; Aye. Representative Wells? [SPEAKER CHANGES] House Bill Number 4 passes; 23 Yes, 13 No. I would like to thank each of the members of the committee for your endurance. I'd like to thank the public for your endurance. And as Bugs Bunny would say, "I'd like to say this has been a little slice of heaven, but it hasn't been". This meeting is adjourned.