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House | July 11, 2013 | Committee Room | Finance

Full MP3 Audio File

Good morning and welcome to the House Finance Committee. If our members will take their seats, we’ll try to get started. We have a rather long agenda this morning. The people at the back are having way too much fun. Our first bill up this morning is going to be Senate Bill 43, Study Savings for Administration of Claims. Senator Brown. [SPEAKER CHANGES] Thank you, Madam Chairman. This bill was recommended by the Joint Legislative Committee on Workers Comp, Coverage Compliance and Fraud Prevention and Detection. What the bill does is it directs the Office of State Personnel in conjunction with the Department of Public Instruction and the Office of State Budget Management to study the expenses related to the management of state and local government employees’ workers’ compensation claims and make recommendations for improving efficiencies and reducing expenses. During our meetings we found out that there was an issue here that needed to be taken care of. In some areas, workers’ comp claims were… I can’t remember the exact percentage because it’s been a while, but it was quite a bit over the norm, so I think a study surely needs to be taking place and see if we can kind of reign some of this stuff in. [SPEAKER CHANGES] Representative Brawley. [SPEAKER CHANGES] For a motion. [SPEAKER CHANGES] You’re recognized, sir. [SPEAKER CHANGES] I move a favorable report to Senate Bill 43. [SPEAKER CHANGES] We have a motion for a favorable report. Further questions, discussion or debate? Seeing none, Representative Brawley’s motion is before you. All in favor will say aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] All opposed, no. I believe that’s unanimous. Senator Brown, who would you like to handle the bill for you on the floor? [SPEAKER CHANGES] Would you like to handle it? [SPEAKER CHANGES] I will. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Our next bill up is Senate bill 1159. Senator Tarte requires certain general reappraisals. Senator Tarte, welcome to the House Finance. [SPEAKER CHANGES] Thank you Madam Chair, members. I appreciate it. The bill that’s before you is to enable Mecklenburg County to fix problems that occurred in the 2011 property reevaluation. This bill has unanimous support from the Mecklenburg delegation; it has unanimous support from the Mecklenburg Board of County Commissioners. That may be an all-time first. And that’s the bill. [SPEAKER CHANGES] Representative Samuelson. [SPEAKER CHANGES] Thank you, Madam Chair. As a member of that Mecklenburg delegation, I would move approval of this bill in the appropriate time. [SPEAKER CHANGES] It’s the appropriate time. Representative Luebke. [SPEAKER CHANGES] I just wondered, Senator, if you could give an example of one of the errors, kind of error. [SPEAKER CHANGES] The kind of errors that occurred? Well we had… One simple one would be where we had two properties side-by-side. One would be a third acre, the other would be a half acre, and the property values were set at exactly the same value. [SPEAKER CHANGES] How’d that happen, if I may follow-up? [SPEAKER CHANGES] It is a long story, but what they started doing is using a set value for all properties in the area, and then they just applied it to everywhere, and it’s that kind of egregious error they’re trying to fix now. [SPEAKER CHANGES] You have a motion before you to give the bill a favorable report. Any further questions or debate? [SPEAKER CHANGES] Madam Chair? [SPEAKER CHANGES] Representative Starnes. [SPEAKER CHANGES] Thank you. I know this bill is drafted to address a problem in Mecklenburg County, but it is a statewide bill. How many counties are there like this that would be eligible for reappraisals? [SPEAKER CHANGES] Madam Chair? [SPEAKER CHANGES] Yes sir. [SPEAKER CHANGES] As I understand, the bill would potentially enable 14 counties that meet certain criteria. The criteria that are specifically outlines in this and the degree of error, the only county right now that fits this is Mecklenburg. [SPEAKER CHANGES] Representative Starnes. [SPEAKER CHANGES] Now tell me again about the 14 counties that were potentially meet the criteria. [SPEAKER CHANGES] The criteria, the one that drives it includes its population, so size. [SPEAKER CHANGES] Further questions from the committee? Anyone want to speak from the outside? Seeing no hands, we have a motion from Representative Samuelson to give this bill a favorable report. All in favor will say aye.

All oppose no. And I believe Representative Brawley will handle this on the floor for you. [SPEAKER CHANGES] I will, thank you. [SPEAKER CHANGES] Our next bill up is Senate Bill 290, Waynesville annexation. Senator Davis, welcome to the Committee. Representative Brawley is recognized that we have the PCS before us for the purpose of discussion. All in favor will say aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] All oppose, no. Senator Davis you have the floor sir. [SPEAKER CHANGES] Thank you, Madam Chairman and Members of the Committee, I’m back with the Waynesville annexation. Could we have the proposed Committee Substitute explain the amendment? [SPEAKER CHANGES] Staff? Representative, Mr. ??, we’re on Waynesville. I’m sorry, Gregory Meed will explain. [SPEAKER CHANGES] The proposed Committee Substitute, the only difference is the city of Waynesville discovered there were errors in the mete and bounds description. That is in, that describes the property that’s going to be annexed. [SPEAKER CHANGES] Madam Chair. Would you ask the gallery to come to order please so I can hear the gentleman? [SPEAKER CHANGES] Going to ask the folks to please take your conversation outside of this room if you need to have one until we’re finished. Thank you. [SPEAKER CHANGES] To start again, the PCS all it does is it takes the original bill, but there was an error in the property description that the Waynesville discovered. It had donut holes in it and it also had typographical errors. And so the metes and bounds description was changed so the typographical errors were removed and some old donut holes were removed. And so it was always the parcel that’s trying to be described has not changed, it’s just the errors and admissions have been corrected. And then other than that, the PCS ?? original bill, it just adds this, described ?? to the town of Waynesville’s corporate limits. [SPEAKER CHANGES] Senator? [SPEAKER CHANGES] Thank you, Madam Chairman. I’d like to remind the Committee that this is not a forced annexation, this is an annexation that Lake Junaluska, the organization went to the town of Waynesville and asked for this. The delegation from Haywood County is unanimous in its support. I’ve talked to some people that have some concerns about this. I’d remind you that 60% of the home owners at Lake Junaluska are non-residents and so they can’t vote on a referendum. But if the Committee, if somebody would like to amend this motion to require a referendum we’d certainly be open to that, if necessary. It’s not our preference but we’d be open to that. The way it is though they’ve spent about $60,000 polling the members and the residents and they have about 2/3 other people that are in favor of doing this friendly annexation. I have individuals here that would be glad to answer any questions including Mr. Joe Stowe who has about 4 years experience in the utility business and he is a Chair of the Lake Junaluska Board. [SPEAKER CHANGES] Members of the Committee, Representative Brawley? [SPEAKER CHANGES] What is the Lake Junaluska Assembly Incorporated? SPEAKER CHANGES] I will defer, we have people here that can answer the question technically if the Chair will recognize. [SPEAKER CHANGES] Sir, if you will come to the microphone and give us your name and your position. [SPEAKER CHANGES] My name is Jack Ewing, I serve as the executive director of Lake Junaluska Assembly Incorporated. In 2008, the Board of Directors was formed for Lake Junaluska Assembly Incorporated. As the successor body to the Southeastern Jurisdiction Administrative Council. It is the body that is responsible for making decisions about the Conference and Retreat Center as well as the residential component. There are 1200 acres within Lake Junaluska and Lake Junaluska Assembly Incorporated is the official name of the governing body associated with that 1200 acres. [SPEAKER CHANGES] Representative Brawley, follow up. [SPEAKER CHANGES] Follow up. That means that is a Methodist Church. [SPEAKER CHANGES] That is correct sir. The Southeastern Jurisdiction of the United Methodist Church.

Representative Hall? [SPEAKER CHANGES] Thank you, Madam Chair. My question I guess would be for Mr. Ewing or bill sponsor about indication that the council is over the Conference Center Retreat Center and there are about 1200 acres. Does the council own the 1200 acres and is the council elected by the residents of the 1200 acres? [SPEAKER CHANGES] Mr. Ewing? [SPEAKER CHANGES] Thank you Madam Chair. The 1200 acres is not owned by the Conference Center Retreat Center, I’m sorry by the Board of Directors. Individual property owners of the, there are 811 individual pieces of property. Some of which the Conference Center Retreat Center are owned by the Board of Directors and therefore by the southeastern jurisdiction. What the southeastern jurisdiction does own are the pavement, the pipes and the easements associated with the residential component of Lake Junaluska. [SPEAKER CHANGES] Follow up, Representative Hall? [SPEAKER CHANGES] Follow up. Is there any election held by the property owner of the members on the council or how are the property owners represented? [SPEAKER CHANGES] There are 2 persons who serve with voice and vote on the Board of Directors. There are 32 members on the Board. The President of the community council, the Junaluska Assembly Community Council is elected by the property owners and the Lake Junaluska Property Owners Organization is also elected by the property owners. So those two are elected by the residents of Lake Junaluska. The remainder are either ex officio as the bishops, there are 3 bishops that serve on the Board of Directors and then there are 24 members on the board of directors that are part of a self-perpetuating Board. [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] Yes sir. [SPEAKER CHANGES] And are all of the 24 members and the 3 bishops required to be members, excuse me, property owners or residents of Lake Junaluska? [SPEAKER CHANGES] They are not. Approximately half are property owners at Lake Junaluska. But it is not a requirement. [SPEAKER CHANGES] Representative Hager? [SPEAKER CHANGES] Thank you Madam Chair. I just want to, probably for staff or for the sponsor, do we have a map on this? Is there a map available? We do have a map that we could distribute. Sorry Madam Chair. [SPEAKER CHANGES] We don’t’ have one. Mr. Ewing do you have a map available for the Members of the Committee? [SPEAKER CHANGES] We do. There is, we have one copy right here. [SPEAKER CHANGES] Madam Chair if I may we did have maps for Members of the Committee at one of the previous meetings but we don’t have one today I apologize for that. [SPEAKER CHANGES] At the request of the committee that they have a map, I’m going to ask Sergeant-of-Arms to make proper copies and we will temporarily displace your bill, Senator Davis. We’re going to skip down to House Bill 569 Representative Boles, because he has another commitment and needs to move this. [SPEAKER CHANGES] Thank you Mrs. Chair. This is a amendment to the Foxfire Charter to voluntarily annex a subdivision that is outside their contingence. They’ve already supplied the infrastructural water sewer, and as a property have sold, they automatically volunteer to come into the city, the village of Foxfire. [SPEAKER CHANGES] Representative Collins? [SPEAKER CHANGES] Representative Boles, do you know of any opposition to this bill? [SPEAKER CHANGES] No. [SPEAKER CHANGES] Then a motion at the motion at the appropriate time. [SPEAKER CHANGES] It’s the appropriate time, Representative Collins. [SPEAKER CHANGES] I’d like to make a motion we give a favorable report to House Bill 569. [SPEAKER CHANGES] Further questions Representative Brawley? [SPEAKER CHANGES] If I might, I’m a vote for your bill but I did something similar some 18, 20 years ago and I’m still hearing about it. [SPEAKER CHANGES] This is from the developer that.

Further questions from the committee? Representative Starnes. [SPEAKER CHANGES] Thank you. Representative Boles, isn't the town of Foxfire the one that we had to have special legislation for a couple of sessions ago to fix another problem they had? [SPEAKER CHANGES] That is correct. And the people donated the land to the village. And so... [SPEAKER CHANGES] Does this involve that property? [SPEAKER CHANGES] No, sir. That was property that the heirs inherited, and they gave it to the village, which was, I hate to say, fifty or sixty acres. But this is a private development of a subdivision. [SPEAKER CHANGES] Further questions from the committee? Any outside interest? We have a motion to give House Bill 569 a favorable report. All in favor will say Aye. All opposed No. [SPEAKER CHANGES] Thank you, Madame Chair. [SPEAKER CHANGES] And I guess you'll handle your own bill on the floor. [SPEAKER CHANGES] [LAUGHTER] Yes, ma'am. [SPEAKER CHANGES] Let me go ahead and try to take the last House bill, House Bill 1015, Bessemer City annexation is back before you. Representative Hastings, you're handling this bill. You have the floor, sir. [SPEAKER CHANGES] Well, we've been before this committee before and since then...we actually had the maps and all the information but... [SPEAKER CHANGES] Representative Hager? [SPEAKER CHANGES] Thank you, Madame Chairman. I've looked at this; I've spoken with the bill's sponsor, and I'd like to move for a favorable. [SPEAKER CHANGES] Any other questions from the committee? Anyone from the outside that would like to have input? Representative Hager moves to give House Bill 1015 a favorable report. All in favor will say Aye. All opposed No. Okay. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Senator Tucker, are you available, sir? Yes, sir. [SPEAKER CHANGES] I've been here the whole time. [SPEAKER CHANGES] I'm so sorry. You were hidden in the corner and we didn't see you. Senate Bill 488. [SPEAKER CHANGES] Thank you, Madame Chair. Members of the Committee, the Nursing Home Administrator Act. ?? If you look at the bill. We've got an amendment also, Madame Chair. [SPEAKER CHANGES] Representative Collins, you're recognized to send forth an amendment. [SPEAKER CHANGES] This amendment... [SPEAKER CHANGES] It's a very simple amendment, members, I believe. You can do it without paper. [SPEAKER CHANGES] Okay. On page three, lines thirty-two and thirty-three, it simply changes under that number nine to read: alcohol or any controlled substance. Technically alcohol is not a controlled substance so we had to put the alcohol in front of the controlled substance rather than behind it. [SPEAKER CHANGES] Madame Chair, may I ?? [SPEAKER CHANGES] You certainly may. [SPEAKER CHANGES] ?? and we just wanted to clarify that alcohol was not a controlled substance. ?? This just clarifies that. [SPEAKER CHANGES] Senator Tucker, if you could put the microphone on, sir. [SPEAKER CHANGES] ?? Yes, ma'am, I've done that. [SPEAKER CHANGES] Do you want to repeat your comments on the amendment? [SPEAKER CHANGES] Yes, ma'am. Prior to the meeting this morning, staff brought to me the fact that we needed to designate the fact that alcohol was not a controlled substance. It was improper language in the bill, so this amendment simply corrects that. [SPEAKER CHANGES] On the amendment, members of the committee, any questions or concerns? Representative Collins has moved that we give the amendment a favorable report. All in favor will say Aye. All opposed No. We're back on the bill. [SPEAKER CHANGES] Thank you, Madame Chair. May I go ahead? [SPEAKER CHANGES] Yes, sir. [SPEAKER CHANGES] All right, thank you. Back on the bill. As a solid member of the baby boomer generation, I have a special interest in making sure nursing homes will be there and properly run when I get there. So... [AUDIO ENDS]

I have worked on this bill and what it does is, it changes the requirements for Nursing Home Administrator form 2 years to 4 years, having a Bachelor Degree in that current curriculum. It also will allow someone with a 2 year degree, but having 5 years of Nursing Home Administrating experience to be able to get a license. It also raises some fees. Currently, the fees have not been raised since 2004. So that's pretty much the gist of where it is. I think they are currently running a deficit in the Nursing Home Administrating Board because they have not decided over the years to raise fees and keep up with various costs. That's kinda where the bill is. I'll be glad to answer any questions, Madam Chair. [SPEAKER CHANGES]. Representative Samuelson. I'm waiting for a motion, ma'am. [SPEAKER CHANGES]. I'll make a motion that we go favorable to Senate Bill 488. [SPEAKER CHANGES]. As amended. [SPEAKER CHANGES]. As amended. Thank you. [SPEAKER CHANGES]. You heard the motion... Representative Carney [SPEAKER CHANGES]. I thank you, Madam Chair. Question, please, for the bill sponsor. [SPEAKER CHANGES]. Yes, ma'am [SPEAKER CHANGES]. Senator Tucker, I'm just curious, I was glancing down through all of these fees and it seems, it would appear that the majority of them doubled. Why is, why such a drastic increase? [SPEAKER CHANGES]. That, that's. May I answer, Madam Chair? [SPEAKER CHANGES]. Yes, sir. You have the floor. [SPEAKER CHANGES]. Representative Carney, that is a fair observation, although that's not the reality they tell me. They're going up 25 and 50 dollars. I also have a fiscal note that the fees could raise up to 45,000 dollars in a total year over all the nursing homes across the state. Based on what they've told, but yes, that gives them a range. The rule-making process to have a fee changed sometimes takes 2 years, so they just did this to give themselves the latitude to raise the fees because they've held them since 2004. [SPEAKER CHANGES]. Follow up, Representative Carney? Good. Representative Collins. [SPEAKER CHANGES]. I'd just like to know, Senator Tucker, what kind of feedback have you gotten from the Nursing Home Group on this? Do they like it, don't like it, or don’t care? [SPEAKER CHANGES]. Sir, in fair response to your question, I have not received a call. This bill has been floating around for 4 months, and I've not received a call from any of them. [SPEAKER CHANGES]. Representative Starnes. [SPEAKER CHANGES]. Thank you, Mrs. Senator Tucker. This is the second time this session that we've seen a bill coming in saying that you've got to have a 4 year degree before you can get a certain job, and I continue to be troubled by that. Can you tell me what the rationale behind that is, because while that might be desirable, do we really want to make it a requirement? [SPEAKER CHANGES]. Well, this is at the request of the Board. As you know, well as I stated, people with 2 year degrees and 5 years of experience can still receive licensure. All those people who currently do not have a 4 year degree or a 2 year degree but have been in the industry can continue to receive a license. The requirement for a 4 year degree certainly would raise the bar of professionalism in this curriculum. As you know, Representative Starnes, healthcare is so complicated, and so the requirement of a 4 year degree, which I do not have and have done OK without it, and I understand your point, the 4 year degree would require a higher technical skill than a 2 year degree. [SPEAKER CHANGES]. Representative Starnes. [SPEAKER CHANGES]. And the way I read it, if you have a 4 year degree in Art History then you'd be qualified to run a nursing home? [SPEAKER CHANGES]. That's, that's right, sir. You would be. Real Estate too. [SPEAKER CHANGES]. Madam Chair, I believe I'll have an amendment proposed to strike that language. [SPEAKER CHANGES]. You're free to do that. Representative Stam. [SPEAKER CHANGES]. In support of that amendment that'll be coming, if the Bachelor's Degree had to be in a related field I'd understand it, but they're striking the language that allows the Board to do rules about accommodation of education and experience acceptable, so they would have to accept the person with the degree in French, or Art History, or music. Those are all wonderful fields, parlez-vous francais?

Yes sir. [SPEAKER CHANGES] Madam Chairman, I’ll respond to the [SPEAKER CHANGES] Yes sir, you certainly may. [SPEAKER CHANGES] Linguistics professor from Maypex?? I can support that amendment with no problem at all, gentlemen. I can, I understand where you’re coming from on that. Thank you. [SPEAKER CHANGES] Representative Starnesworth, your amendment sir? [SPEAKER CHANGES] It’s on the way, but basically it will just strike the provision requiring the four year degree, and it may take just a moment for the staff to have it prepared. [SPEAKER CHANGES] We’ll just stand at ease for it. [SPEAKER CHANGES] Madam Chair. [SPEAKER CHANGES] Yes sir, Representative Lundquistasd? [SPEAKER CHANGES] Inquiry to the chair? [SPEAKER CHANGES] Yes sir? [SPEAKER CHANGES] If we’re going to outlaw foreign ??, will allow foreign debate to be used on the floor? [SPEAKER CHANGES] We’re going to ask [SPEAKER CHANGES] Madam chair? [SPEAKER CHANGES] We’re not going to go there, everyone just y’all relax for a few minutes. Representative Samuelson. [SPEAKER CHANGES] While they’re preparing the amendment, I was going to ask a question about the amendment. If we just strike the piece about requiring the degree, are we just leaving in the piece about the nursing minimum experience and doing nothing with all the other language that was struck? I just want to make sure that that’s what you want. [SPEAKER CHANGES] Well, I have not had a chance, obviously, to consult with them. We’re just really going back to what they already have. Would be. [SPEAKER CHANGES] Restored the language. [SPEAKER CHANGES] They’re going back to what they already have. A two year degree, five years experience. [SPEAKER CHANGES] Right [SPEAKER CHANGES] And eliminating the French degrees. [SPEAKER CHANGES] You know they will just be at ease until we get some maps and some amendments. [SPEAKER CHANGES] OK [SPEAKER CHANGES] Members will come back together. We’re going to try to run this amendment without having copies made. I’m going to ask Trina from our staff to explain said amendment. [SPEAKER CHANGES] So what the amendment does is that it amends Page 1 of the bill, Lines 13-27. And it’s basically undoing all of the strikethroughs and underlining. So it’s restoring the current law. And that’s all the amendment does. So it would just

00:00 back to what the current law is is that you have two years of college level study and it has that language about completed [??] of education experience except [??] rules [??] by the board. senator Tucker comment on the amendment sir. no Ma'am I'll be agreeable to the amendment as I stated thank you. senator Starnes comment on your amendment sir...we have the amendment before us any questions on the amendment representative Carney. so just to be clear we're in taking all of that out then the bill sort of becomes a fee bill almost. I will have to say that yes Ma'am. further questions from the committee further outside interest if any now the amendment before you all in favor will say aye. aye. all opposed no..representative Samuelson would you like to re-state your motion now that the bill is amended again. yes I move that we give a favorable response to senate bill 488 as doubly amended. representative Brawley. could I try [??] motion that we [??] the amendments into the committee substitute give the committee substitute a favorable and unfavorable of the original bill. I think that'll work..we have a motion before us all in favor will say aye. aye. all opposed no, [??] senator Tucker would you like to tell us [??] handle this bill in the [??] for you. representative Collins thank you madam chair members of the committee. we're gonna pull out senate bill 480 and I believe that is representative Happadonka's bill but at the request of senator Stam it's representative Stam the french wizard is going to [??] the bill. [??] madam chair this is the annual UNC capital improvements project bill I won't discuss the individual projects Mark Bondo is the expert on this these're projects that're funded with money that is not appropriated by the general assembly but is authorized by the assembly and let me leave it at that if I could for further staff explanation. yes sir Mark. again I'm Mark Bondo with this research this is the what's know as either the self [??] bill or the non appropriated bill for UNC these are university finance projects that involve that and they're usually financed by housing receipts gifts and grants and those sorts of things if we wanna go into project detail where there is a new fee or an increase in an existing fee I'll talk about that there're two projects for [??] state the [??] and the soccer field those that involve a new debt service fee for the students for [??] hall that's a 14 dollar fee and for the soccer field that's a 10 dollar fee and that'll be annual until the debt's retired for east Carolina university there're two projects [??] hall demolition and reconstruction that'll be financed by housing receipts there'll be a 2 percent increase in housing receipts and then there's a new project to build a women and children's clinic facility which will be financed by both hospital receipts and parking receipts as there's a parking garage there's one project for North Carolina ANT that is a new students center or a student union that'll be financed by a new debt service fee that'll be phased in over four years and once it's in fully implemented that'll a 450 dollars per year charge to the students for North Carolina state university there's a Carmichael hall renovation that's financed by new debt service fee of 27 dollars and 50 cents there're three projects for UNC chapel hill the [??] center phase [??] acquisition which is acquisition associated with the business school which will be financed by the endowment and gifts UNC chapel hill the [??] village replacement which is a dorm facility will be financed by a 3 percent increase in housing receipts. 05:00

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My understanding on most of these projects is that they usually go through the relevant governing body of the university system and then they go through the Board of Governors for approval to be sent to the General Assembly. I don't believe that there is a actual student vote on these projections but again UNC might have something to say on this specific project. [SPEAKER CHANGES]: Madam Chair? [SPEAKER CHANGES]: Yes. Representative Moore. [SPEAKER CHANGES]: On that same question, if I might, get Representative Stam and ask. I was provided a few talking points by the University on this issue about the multiple levels of approval that the projects go through. This is for any of the projects in there. Apparently, these are student supported projects, which would include a student fee increase and would be and would be a vote of the students and the Campus Board of Trustees would approve and then the Board of Governors would approve it, then the legislature reviews it and then it goes apparently back to the Board of Governors to get final approvals. That's how the process was explained to me on it. [SPEAKER CHANGES]: Representative Samuelson does that address your question? [SPEAKER CHANGES]: Thank you, that does address the question so I have a quick comment. I've also been told that the Winston-Salem delegation supports keeping it in there and that the Board of Governors, including some of the members that we appointed, also think that this is a good idea so I would be inclined to not support the amendment. [SPEAKER CHANGES]: Representative Starnes. [SPEAKER CHANGES]: Thank you. Who currently owns the Racetrack and the stadium now? [SPEAKER CHANGES]: Mark Bondo. [SPEAKER CHANGES]: Currently, the stadium is owned by the City of Winston-Salem and they own the Racetrack as well. [SPEAKER CHANGES]: Follow up then. Has this been a profitable venture for the City of Salem? [SPEAKER CHANGES]: My understanding from looking at the Winston-Salem's budget and CAFER is that the operational component of this usually breaks even but the debt service component of it normally requires, because there is outstanding debt through the city, and it normally requires general funds support. [SPEAKER CHANGES]: Speak on amendment. [SPEAKER CHANGES]: Yes sir. [SPEAKER CHANGES]: I hope we will support this amendment. We shouldn't be getting the universities into money losing propositions. The City of Winston-Salem has decided that they can't operate this track and make money, it's costing them when they figure into debt service and the university's going to buy it and they're going to balance this budget on the backs of the students and you can talk about well we've got a process and the students get to vote and they have a say-so. They're going to be saddled with another $110 per year to pay for a racetrack that gives them no benefit as well as helping them get an education. At some point in time we've got to draw the line and try to make it more affordable for kids to go to school. So I support the amendment. [SPEAKER CHANGES]: On the amendment, Representative Brawley. [SPEAKER CHANGES]: I have a question of staff is alcohol currently allowed at the racetrack? [SPEAKER CHANGES]: Staff? [SPEAKER CHANGES]: Yes. Yes sir, again Mark Bondo with fiscal research. Yes, currently alcohol is allowed at the stadium for races and in order to keep that practice going forward there needed to be an amendment to general statute to allow Winston-Salem as a state entity to continue to allow alcohol sales at the racetrack. [SPEAKER CHANGES]: Representative Brawley a follow up? [SPEAKER CHANGES]: Follow up. So there is a provision in this Bill that allows alcohol on the facility. [SPEAKER CHANGES]: I believe he's shaking his head. Mark? [SPEAKER CHANGES]: Yes, that's correct. Yes. [SPEAKER CHANGES]: Representative Hanes. [SPEAKER CHANGES]: Thank you Madam Chairman. I was wondering if there was anyone here from Winston-Salem State to add some information regarding this stadium please? [SPEAKER CHANGES]: Sir, if you'll come to the microphone at the back and give us your name and your position please. [SPEAKER CHANGES]: My name is Cornelius Graves. I am Director of Government and Community Relations at Winston-Salem State University. Throughout this process we've consistently engaged members of the Winston-Salem community, the City of Winston-Salem and our delegation. To this point, we've received unanimous support from our delegation, as well as the outgoing SGA President and the current SGA President. We've also gained support from the current racing operation CEO, Dale Pentalist [??] who has no problem with her acquisition, Richard Childress who supports the university's ownership of

Bowman Gray Stadium. We’ve had over 50 years of a relationship with racing. We hope to continue this relationship in perpetuity. There’s also academic benefit from the standpoint that we do have a racing and sport management program. It’s a four year degree program. It’s actually the only four year university in the country to offer a Bachelor of Science degree in motor sports management. [Speaker Changes] Members of the committee, do you have follow up questions for the gentleman from Winston-Salem State. Representative Brawley. [Speaker Changes] Thank you, madam Chairman. In addition to the benefits of the racetrack, I get this sense that this is a larger property, and I wondered what the university wanted to do with the rest of it other than the racetrack. [Speaker Changes] Sir, you may ??. [Speaker Changes] Yes. At this point I actually would like to have our Vice Chancellor of Facilities, Owen Cooks, to come up and give a little bit more information on that aspect. [Speaker Changes] Good Morning. Owen Cooks, Associate Vice Chancellor of Facilities at Winston-Salem State University. The acquisition of Bowman Gray Stadium, Civitan Park, and the surrounding lands is a key component of our campus master plan. It’s comprised of 94 continuous acres adjacent to our campus, so it would almost effectively double the area of our campus. We currently lease the property for Winston-Salem; there’s actually a series of leases. We lease part of the property for commuter student parking; we lease part of the property for student recreation; we lease part of the property for athletic venues. In addition to the stadium, we have our track, our outdoor track in that location, football practice fields, and so on. And so for all of these purposes and uses, we see this acquisition as a key component of our master plan. [Speaker Changes] Madam Speaker. [Speaker Changes] Representative Hanes, yes sir. [Speaker Changes] Question for Mr. Cook. Could you give us a sense of what the University’s plans are for Civitan park area moving forward. [Speaker Changes] Sure. The master plan for Civitan park, we’ve developed several facilities — the track I spoke of early, the football practice fields. We’re also hoping to build a baseball and softball field in the Civitan park area. It’s in a low-lying area, so it’s really not suitable for building development but a great opportunity for athletic fields, expansion, both for recreation or athletics department. [Speaker Changes] Representative Jordan. [Speaker Changes] Thank you, madam Chairman. Questions for the guests. [Speaker Changes] Yes sir. [Speaker Changes] First of all, you said there was current leases on the property? [Speaker Changes] Yes sir. [Speaker Changes] What is the benefit to the University of getting out of those leases and actually owning the property, considering its a brown field site. [Speaker Changes] Currently the leases give us the ability to seek permission form the city of Winston-Salem to construct improvements on the land, and we’ve done so with that practice field and the track. But if the lease were to terminate, or end at its natural time period, we would lose all those improvements and all the capital investment that we’ve done on that site so far. The other benefit is just a financial one: we would no longer be making lease payments in an ownership position, and be able to improve that land without necessarily going through the city process. [Speaker Changes] Further question? [Speaker Changes] Yes sir. [Speaker Changes] What’s going to be the additional operating expense to the university that will come out of its budget for this new acquisition. [Speaker Changes] Currently, by the lease that we have with the city, we actually have to take on a lot of the operating, for instance, the field house that serves the Bowman Gray Stadium now, the current lease calls for us to manage about 90% of the operation and maintenance expenses of that facility currently. Now a lot of that is covered by athletics and auxiliaries because of the uses of that, with the exception of our motor sports management program, which occupies a small portion of that facility. [Speaker Changes] Follow up. [Speaker Changes] Yes sir. [Speaker Changes] So the amount is what, 180,000? 200,000? [Speaker Changes] I think that’s in the fiscal note that MarK Bondo provided. I didn’t bring mine up here with me to the podium. [Speaker Changes] Mark, would you like to… [Speaker Changes] Yes ma’am. [Speaker Changes] If you look at page 10 of the fiscal note, there is a section for operating revenue. That service fee revenue from the new fee and then operating expense. So for the first fiscal year, 2013 and 14, operating expense is projected to be about 858-860 thousand dollars per year, and then the debt service expense on top of that would be about 490 thousand dollars. And then revenue would be about 880 thousand dollars. And the debt service fee revenue would be about 581-582 thousand dollars.

Representative Starnes. [NEW SPEAKER] Thank you. When was the last time this track was resurfaced? [NEW SPEAKER] It's been several years, sir. [NEW SPEAKER] Follow up. So, racetracks have an extremely high maintenance cost. So if in the next couple of years the track has to be resurfaced, can you give me an idea of what that's going to cost and how you're going to pay for that? $110 under the numbers in the fiscal note, you don't have enough money there to pay for track maintenance. [NEW SPEAKER] What we try to do in the operating side of things is build in a maintenance reserve for all of the property and the associated improvements that might need to be made, and so that's how we would cover the repair and renovation of the facility in that time. [NEW SPEAKER] Follow up, Representative Starnes. [NEW SPEAKER] Well then, one other question. This was built on an old city dump or a landfill or whatever. What type of liability do you assume since you are buying a brown field. [NEW SPEAKER] When we were going through the do diligence study to find out the extent of that old landfill was, and in doing so, we believe that seeking a formal brown field agreement with us as the potential purchaser and the city as the seller, would be prudent to protect our liability going forward. But we didn't find anything in that Phase 1, Phase 2 environmental that gave us cause for concern. Based on the types of developments, we're wanting athletic fields and things that are pretty much restricted to the surface of that area. [NEW SPEAKER] Representative Holley. [NEW SPEAKER] Thank you Madam Chair. First of all, I commend the university on trying to be proactive and obtaining a stadium and a facility that is right next to campus, to allow for it's future growth. This seems to be well thought out. I think that they've done an outstanding job and just like any other university in the UNC system, they too would like to have a stadium and a field and some of the other amenities. They've found a way of doing this. They've found a way with low overhead. The students have even agreed to this and I don't think that this amendment is a good amendment and I vote against the amendment. [NEW SPEAKER] Representative Collins on the amendment, sir. [NEW SPEAKER] Yes, on the amendment. I can understand why the Winston-Salem delegation is solidly behind this. Because we're basically taking something that City of Winston-Salem has half a million dollars of debt service a year, if I'm reading right, and now putting it on the state tax payers. I'd love to do the same thing for a lot of facilities in Rocky Mount that we have debt services on. But I'm here to represent the tax payers of my district and of this state. I think for the City of Winston-Salem it's a great deal. I think for the state it's a horrible deal. So I support this amendment. [NEW SPEAKER] Representative Tim Moore on the amendment, sir. [NEW SPEAKER] Yes, ma'am. I think this is a good bill. But the amendment, I thought about this yesterday when a person talked to me about it and at first I was resistant to the amendment. But I looked at it and I think by passing the amendment we may be doing Winston-Salem State a favor. I do worry about what Representative Starnes got into which is potential liability. You can have brown fields agreements. But some of those still may require further remediation or some kind of actions to be taken. There's also, we know of situations where water contamination pops up after the fact, and again depending on how the brown fields agreement's struck there may or may not be liability. So I think I'm going to go ahead and vote for the amendment, to take this out. But I just was curious from the University's standpoint. Are you guys really sure what you're biting off on this thing, asking for this, from a liability standpoint? Because I really have some concerns for the University and also even for the state, in taking that one on because of the fact it is a brown field site. [NEW SPEAKER] Anyone? [NEW SPEAKER] We believe we do. You know, part of this process, should this bill go through as it was originally written, is we still have to go through the Department of Administration's state property office and all of the do diligence that they do in the consummation of any transaction, be it the purchase of land, facilities or leases. So there are do diligence steps we've completed to date that brought us here today and there are additional do diligence steps that will be completed prior to this transaction being complete, should it be approved.

Representative Blust on the amendment. [SPEAKER CHANGES] Question, the fee of 110 dollars is that per academic year or is that per semester? [SPEAKER CHANGES] That’s per year, FTE, students. So for somebody who’s not a full-time student that fee gets pro-rated down but it’s per year. [SPEAKER CHANGES] Representative Hamilton. [SPEAKER CHANGES] Yes Madame thank you on the amendment and this is for the university as well the most redeeming thing I heard you mention in the discussion is that you’ve got a program at the university and that the race track may serve to train some of those students. Can you elaborate on that or explain it a little further. [SPEAKER CHANGES] I see some difference of opinion. [SPEAKER CHANGES] Yes we have four. [SPEAKER CHANGES] Sir again if you’ll identify yourself for our records. [SPEAKER CHANGES] Cornelius Graves, government and community relations. Winston Salem State. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] We have a four year Bachelor of Science degree program in motor sports management at Winston Salem State University. The only four year university in the country that offers that type of program. There have been numerous studies, one recently by the North Carolina motor sports an economic impact development study, which forecasts about 24 thousand jobs that impact the North Carolina economy are based on motor sports. So we’re actively pursuing the educational opportunities that equate to jobs in North Carolina and motor sports management is one of those programs. [SPEAKER CHANGES] Follow-up? ?? [SPEAKER CHANGES] Just quickly, so the track would be used in some way in that four year degree program? Is that what I’m hearing? [SPEAKER CHANGES] Yes we have students who train as mechanics. We have students in the program who actually train as pit crew management officers. We’ve recently an opportunity for students to participate who are athletes in the program. We’ve invited folks off campus to come on and participate in the program to get an interest into it. So it’s something that we’re actively pursuing growing. [SPEAKER CHANGES] Representative Brawley? [SPEAKER CHANGES] If I might ask the gentleman a question, follow-up on the motor sports issue. Do you use the track as a test track in your training? And by the way I congratulate you on your reputation in the motor sports business. You are recognized as a leader.] [SPEAKER CHANGES] Do we use the track as a test track in our training? [SPEAKER CHANGES] For motor sports management. Yes sir. [SPEAKER CHANGES] Not to my knowledge. No. [SPEAKER CHANGES] What do you use the track for? [SPEAKER CHANGES] It’s where our motor sports management program is housed. We have the classes on campus. There are opportunities and times where we do take students out there but it’s not used as a test track. [SPEAKER CHANGES] Follow-up? [SPEAKER CHANGES] So when they go out there they just look at the track. They don’t drive around it or anything? [SPEAKER CHANGES] No they don’t drive vehicles. [SPEAKER CHANGES] Follow-up? [SPEAKER CHANGES] Yes Sir Representative Brawley? [SPEAKER CHANGES] Do you pay the city for that use? [SPEAKER CHANGES] No sir. [SPEAKER CHANGES] I’m sorry. I thought I was going to help you. [SPEAKER CHANGES] Representative Collins? Representative Moore on the amendment? Representative Blust on the amendment? Representative Haines? [SPEAKER CHANGES] Thank you Madame Chairman. I heard Representative Jordan. I’ve set quietly because I wanted to hear all the comments and I wanted to give my colleagues a chance to say their peace and now I want to talk about my personal experience as a citizen as a young man who also grew up in Winston Salem and had the pleasure of having every member of my family attend that university except my father who attended North Carolina Central University but I also wanted to speak of a place where I grew up and where I had the good pleasure of starting my professional higher education career and talk with you a little bit with regard to the growth of that university and where it’s going. It is not the acquisition of a race track and I think I heard it put that way. Winston Salem State was out to buy

The racetrack. This is a learning laboratory in every sense of the word. What is going on with the Bowman Gray and ?? Town Park site right now is the only the beginning of the opportunities that Winston Salem State will have before it. Because it will have not only access but ownership of this track and this facility.I absolutely foresee and I believe that the leaders of the program there foresee using that facility, that learning laboratory in every sense of the word going forward.The program is only going to grow. It’s the only one of its type. And is a recognized leader in the motor sports education right now. I think if anyone looks at our NASCAR,looks at the NASCAR numbers and how it’s performing overall, it is the second fastest growing sport in the country. And Winston Salem State has done a great job of taking on, taking on a program that will train students to get jobs. Some of the 26,000 that are out there to put into our workforce. And that is what we’re here focused on. That is programs that create jobs. Winston Salem State is doing that. Most importantly, most importantly however though, we need to look at this as an opportunity for university that has come a heck of a long way in its 135 year history. This university was founded as a normal school and as a school that trained teachers, and as a school that ultimately grew to team up with the Reynolds Companies to train folks to work in an industry that built our triad and built our city. That school has grown into one that has joined the University of North Carolina system and that educates all of our children now. Not an university that is singularly focused any more. So it's an university that's willing to create jobs,to grow the triad, and to grow the State of North Carolina. This is a part of that growth. One of the true, one of the true issues that the university faces is that it is landlocked. And the university through, university through relationships with the city, and through strategic growth initiatives over the last 10 or 15 years has found a way to make it. So that they can survive and thrive going forward. And that was jump, it was a reach for them. Several years ago, when they said we’re going to start a Motor Sports Program, who’d ever thought it. Who’d ever think that a school that has traditionally trained, that has traditionally taught and educated majority-minority population would say we want to be a part of motor sports and they did it and they were well received. We’re not in this to take away the debt from the city, we’re in it to invest in our students. And in a majority of students who are the third or fourth poorest student population in the State of North Carolina. These kids are finding a way to come to school. And they’re finding a way to get themselves involved. And to educate themselves and lift themselves up through their own efforts. And that is what we all say here in the General Assembly that we want, we want motivated students, and we want motivated educators. And we want people who are going to push in that way. And I believe that granting Winston Salem State this opportunity will allow them to do that. So clearly, I’m going to be against this amendment. We have to invest. This is a learning laboratory. It’s going to continue to grow. And I’m going to ask everyone in this room to support these students who continue to work hard and this university that continues to work hard and vote against this amendment. [SPEAKER CHANGES] Any further questions from the committee on the amendment? Representative Brawley on the amendment. [SPEAKER CHANGES] Yes ma’am, thank you. [SPEAKER CHANGES] Brawley one then then Brawley two. [SPEAKER CHANGES] Well, that’s one way to tell us apart I guess. Thank you, Madame Chair. I’ve, I’ve listened to the debate on this. There’s several things that have come to mind. First, I’m always a number’s guy and I figured out they’re getting the land for $76,000 an acre and a then a stadium and racetrack is thrown in for free. The bill is going to require them to keep the race going. This is one of the oldest races, if not the oldest race in NASCAR. And if somebody were coming along to do something that would stop this race, we would really be up in arms to defend the race. They've agreed to do that and in fact kind of bring it into their program. The program comes across to a lot of people as a little silly. But I used to sit in front of a guy at the basketball game that started the NASCAR Motor Sports Engineering Program at

Charlotte and started a bandit racing team and everybody laughed. You’re not designing those cars. But he said we’re learning to operate a race team. And people quite laughing when his first class graduated and those kids got jobs at $100,000 a year or more. This, you know there’s a lot about this that’s out of the ordinary. It seems a little silly. And I understand the questions about Brownfields. I have little experience with that where Brownfields has been redeveloped for industrial parks. This is not really an unreasonable use. The point they’re saying this is 92 acres adjacent to their existing campus and their landlocked. That’s a reasonable thing. There’s a lot of questions. There’s been a lot of review. I’ve got one at UNC Charlotte, one at Western. I’m gonna have to pay those housing fees. The tax payers aren’t. I wish you all would. But I know who’s paying that. At some point we gotta trust their judgment. They have to live with this. So I’m inclined to oppose the amendment and let the school do what they want to do. [SPEAKER CHANGES] Representative Brawley. [SPEAKER CHANGES] Thank you Madam Chairman. Speak on the amendment. I would like to support Brawley the younger. [LAUGH] in opposing this amendment. We have elected [UNKNOWN] might I ask Representative Stam a question first? [SPEAKER CHANGES] Representative Stam is not is [CROSSTALK] in a position to defend or, to, or the amendment. [CROSSTALK] what he gave me. He’s just carrying the bill Mr. Brawley. [SPEAKER CHANGES] Okay. [SPEAKER CHANGES] I don’t know Senator Apodaca’s position on this. [SPEAKER CHANGES] Okay. Well, I really wasn’t interested in that. [LAUGH] What I was interested [CROSSTALK] [SPEAKER CHANGES] got four minutes before we can vote on this big bill. So I’m gonna wrap it up. [CROSSTALK] Brawley, Representative Hager. You’re all Representative Brawley let’s [SPEAKER CHANGES] I would speak against the amendment. We’ve got, we’ve, this body has elected a board of governors. The board of governors have has recommended this. And the motor sports is important to the state of North Carolina. And once [UNKNOWN] is known for it. And this is a part of the program. [SPEAKER CHANGES] Anybody else in the committee wanna, wanting to speak on the amendment? Anybody from the outside wanting to speak on the amendment? [SPEAKER CHANGES] Thank you Madam Chairman. I’m Del Fallwell/g private citizen from Winston-Salem. We killed this two years ago. The actual board of governors’ minutes reflects that this project was taken off of the bill that is before you. I’m here today to ask you on behalf of tourism, on behalf of students and on behalf of state taxpayers that you support Representative Jordan’s amendment. This is an article that appeared on all your desks in the last five days. This is what happens at Bowman Gray Stadium racing. This is no more than an acquisition of a racing facility. They did not even have an executive director of this racing program. They have less than two dozen students in the program. And I can tell you that I was also a student at Winston-Salem State. What you haven’t heard is this. The number of students that voted for this is less than 12. What you haven’t heard is when I asked the chancellor to his face if the city is losing money on this deal how do you intend to make money on it? And his answer back to me was that he was going to staff it with volunteers. You cannot run a facility like this every Saturday night with volunteers. I would tell you that at end of the day when you vote for Representative Jordan’s amendment, that you consider the students. It’s not $110. It’s $500,000 a year, in the words of Representative Hanes to the fourth poorest student campus in North Carolina. This was killed two years ago. And I end by this Madam Chairman. If this were your money the bottom line is that they use this facility I’ve asked for a copy of the canceled checks of what it cost them. There are no canceled checks. If somebody were offering you a facility to use every year that you didn’t have to pay for would you go out and just say thank you instead of putting $500,000 a year of student debt on the people [CROSSTALK] [SPEAKER CHANGES] Thank you Mr. Fallwell/g. Thank you sir. Ladies and gentlemen we gonna, we have a motion on the amendment. All in favor will say aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] All opposed no. [SPEAKER CHANGES] No. [SPEAKER CHANGES] The ayes obviously have it. Representative Stam you are recognized. [SPEAKER CHANGES] Madam Chair I move that the amendment be rolled into a new committee substitute. Committee substitute be given a favorable report unfavorable to the original bill. [SPEAKER CHANGES] We have a motion on Senate bill 480 as amended. All in favor

?? say aye. SPEAKER CHANGES Aye. SPEAKER CHANGES All opposed, no. That concludes our meeting. Senator Davis I apologize we're out of time. We'll bring you back next week.