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House | June 12, 2013 | Committee Room | Finance

Full MP3 Audio File

if our members will please take their seats we have a rather long agenda while the budget document is prepared we are going to go ahead and hear two bills hour bill 493 west robinsviille occupancy tax thank you ma'dam chair what this does bill does is allows robinsville to levy at 3% occupancy tax. I would appreciate your support. Mr. starns-i move for a favorable report. mr. moffet would you certify that this bill has cleared the occupancy tax committe with proper documentation. yes good morning madam chair yes we thouroughly scrubbed this bill last week and it does meet the guidelines as set forth by this committee have a motion to give house bill 493 a favorable report all in favor will say i all in favor will say no senator davis city bill 177 senator davis are you in the room? senator brown are you in the room? representative shepard are you prepared to? representative shepard speaks, but it in not audible for about 90% of the time representative hamilton thank you mad'am chairman at the appropriate time i'd like to make a motion yes ma'am this is the appropriate time i move to send a favorable report representative hamilton has moved to give senate bill 25 a favorable report further discussion seeing none all in favor say i all apposed say no i think thats unanamous members of the committe i believe you will find hot off the press your new budget document senate bill 402 theres also a binding document unfortunately we do not have the page of the document since we do not have the updated version i will try to ask our annalyst staff to get this information for you we are going to try and move through as quickly as we can if you will hold your questions to the end subject to the time frame we do not have time for amendments this morning prepare to have thoose amendments prepared for the floor if we do have time i will back up and hear these amendments any questions? rodney bissel will give us an over view of the budget thank you mad'am chair you will see that you have in your copy of the legal size handout this is a fee chart that summarizes not only the fees and the house budget but also includes the fees in the senate budget and indicates if the budget and indicates if the proposal is identical or included on the first page for capitol projects you'll notice the 2/3 bonds act of 2013 which is included in the senate budget is not in the house proposal and then from there we have the fees grouped by sub comittee area the first being education and mad'am fair with your permission we have analyst with each sub comittee area that can go over the fees by subcomittee education fiscal research

The first fee listed here in the document, section 9.3, modify teacher licensure fees for house. What this does, this allows the state board to set the fees for teacher licensure, consistent with what was in the senate budget. The only difference between the senate and the house language, excuse me, is that the provision includes an exception to the rule making procedures under the administrative procedures act. The senate granted that exception to the state board for the purposes of licensure fees indefinitely. The house just grants that exemption for the 13, 14 year fiscal year only. It's expected that these fees will bring in approximately 600,000 dollars. The last time these fees were changed was 1998. [SPEAKER CHANGES] General government. [SPEAKER CHANGES] Madam Chair, there's two more education provisions that are in for UNC, if I may. Andrea Pulflisker research. Section 11.7, which is on page 91 of your hot off your presses copy this morning, is for student charges at the School of Science and Math. This provision is identical to the senate version and authorizes the board of governors to impose a new fee on non ?? students that don't live at Science and Math for distance education services, and then also for anyone participating in extracurricular enrichment programs sponsored by the school, there is no estimate available on how much these fees would bring in. The School of Science and Math would be starting these programs up likely the summer of 2014. The other education provision is on the next page, section 11.8. This would allow the UNC School of the Arts to charge fees to resident students. Some time ago there was an appropriation made to allow the School of the Arts to stop charging resident students fees, but that appropriation no longer keeps up with the total cost of those fees to the resident students, and this would allow them to charge students the difference. [SPEAKER CHANGES] As we move to general government, I would ask the analyst, if you are able to give us the page number that we're working on so folks can stay together. General government. [SPEAKER CHANGES] Madam Chair, at Rodney Bissel fiscal research. The first three items in the general government section are general provisions which I'll just briefly highlight. The first one is appropriation of other funds, which is section 5.1, which is on page eight of your budget document. That is just boilerplate language that codifies existing transfers. Section 6.2, which is on page 12 of your budget is establishing or increasing fees under the act which allows raising fees, commensurate with the budget act, without consultation with the legislative review committee. Section 6.17 is the restore transitional hold harmless for local governments. That's on page 23. Currently, local governments receive a hold harmless payment. This was initiated in the 1990s, when the state repealed several local government revenue sources, including the property tax on intangibles and inventories. That state allowed half cent sales tax in 2002 to make up for those lost revenues. For some local governments, that sales tax did not entirely make up for the repealed local revenues and this hold harmless has been in place since then to keep them made whole. That hold harmless payment at sunset, the last payment was in 2012. This section restores that hold harmless payment for one additional year. The general government team will now continue with section 19.2. [SPEAKER CHANGES] Yes, mam. Yes, mam. [SPEAKER CHANGES] Lisa Holloway with fiscal research. The next item this shows is section is 19.2 was an exemption to rule making at the Department of Cultural Resources. This one is not in the house budget. It was a senate item, but not in the house, so it was dropped. On the next page, page number five, is section 20.2.

This is the voluntary safety workers' compensation fund it's on page 254 of the house bill. This is very similar to the Senate in that it adds this program to be funded by the Grace Premiums surtax and it reduces by 5% the other two programs so upto 20% will be going into this fund, after 2 years the full 20% will go in the next two years. There is a corresponding money item as well that will reduces the state appropriations for this program and the next one Section 20.3 can be found on page 258 of the bill this says regulatory surcharge which is the funds that are used for the department of insurance, this is gonna be set at 6% which is same, is the same as what was in the Senate's budget, and then moving to page 6, the next Section 21.1 is down on page 258, this repeals the North Carolina Public Campaign Finance Fund, the house proposal is just about the same as the Senate it was ?? little bit and it increases the availability to the general fund of 3.5 and those funds are used within the State Board of Election's Force operating for the next year. The next one is Section 27.1 it can be found on page 262. This increases the registration fees for lobbyist and lobbying principle from the 100 to 250 dollars, this is identical to the Senate. It was generated by a 400 thousand annually. Moving to the next one 30.1 can be found on page 264. This is different from what was in the Senate this retains this program but requires a continuation review to be performed and must be completed by March 31st of 2014. And then moving to page 7, Section 30.2 can be found on page 265, this is related to the Displaced Homemakers Program. What the difference here is that the Displaced Homemakers Program will continue to receive funding for this next fiscal year and you see this split of 35 dollars and the Domestic Violence Center would receive 40 dollars beginning in 2014 all of these funds will go to the Domestic Violence Center Fund and Madam Chair that completes general government section. [SPEAKER CHANGES] There is one final item in Section 6.16 which is found on page 23 at the budget, the Passenger Air Carrier Sales Tax Refund. This is a payment for sales tax, sales tax is paid on aviation field in excess of 1.25 million dollars during the period of January 2011 to June 2011, the state made a partial payment on the Sales Tax Refund in the budget last year. That payment was, that the action in the budget was necessary because the tax payer filed for the refund late, this provision would simply allow for the reminder that Sales Tax Refund to be made. And Madam Chair the next section is Health and Human Services and our analyst for that area can speak to those provisions. [SPEAKER CHANGES] Ryan Blankage with legislature drafting we turn to page 8 of the legal sized sheet. There are two provisions on that page that were included in the Senate Budget but are not included in the House Budget. First of all, there is a provision related to the Medicaid Management Information System, our provision in the house provision still contains appropriations and some reporting acquirements but the house version does not include a fee that the department could charge. Second on that page is they there was a change to certificate of need, when you file for certificate of need you have to pay a fee because of that certificate of need, adjustment was made, that is not a fees associated with that and it's not in the house. Turning to page 9, Section 12, H.7 there is a pre-existing provider application fee that has been in the Statute, excuse me, not in Statute, it has been in the budget since 2009, that's been in effect since September 1st of 2009, the Senate qualified this fee, the house version of the provision does not, it's still a 100 dollar fee to be charged on application and also on recredentialment. [SPEAKER CHANGES] My name is, excuse me Sir, provision on page 140 [SPEAKER CHANGES] It's on page 140 Yes, Mam. Next 12 H.19 which is on page 149, page 149 that's the hospital provider assessments, just by a word of background of the Federal Government allows the State to collect assessments from certain provider groups for medica

and then can do various things with that money. One thing that we do is make payments back to providers and we can do that with federal matching funds, so it helps to increase the total amount of money going to providers by collecting some money from the providers. Right now the state collects an additional 43 million dollars as part of that assessment. The Senate changed that to a collection 15.6 percent of the total assessments collected, which would have resulted in about 50 million dollars, rather than 43. What the house does is collects a flat amount of $95,000,000. [SPEAKER CHANGES] Madam chair, Susan Jacobs with fiscal research. Beginning on page 123, there's two fees for the division of public health. The first fee increases the permit fee for food and lodging establishments. The House bill increases this fee from 75 dollars to 95 dollars, and the counties retain all of the receipts collected, because of that increase. The Senate budget increased that fee from 75 dollars to 120 dollars. And they had a corresponding cut in general fund appropriation of over $700,000. The second fee is also within the division of public health, and it is on page 127. There is also a corresponding money item in your committee report on page G6 item number 36. This is an increase of an existing fee from $1,000 to $1,250. The decrease in general fund appropriation is approximately 220,000 dollars, and that's associated with the increase in receipts. The impact for ?? is approximately $800,000 because they pay for the majority of the autopsies performed in the state. [SPEAKER CHANGES] Thank you ma'am. Justice and Public Safety. [SPEAKER CHANGES] Thank you, madam chair. William Childs from fiscal research. Starting on the top of page 11. There is an expunction fee. This is section 18b.16 on page 243 of the bill. This creates a uniform fee for expunctions of 175 dollars. The way that the House is different form the Senate, is that the House splits the money between the department of justice and the administrative office of the courts with 70 percent to the former, and 30 percent to the latter. Next fee is, amend motions fee. This is section 18b.17 on page 244. This limits the motion fee, when a notice of hearing on a motion is filed. This is identical to the Senate, and there is no estimate available for this change. Next is section 18b.18. This is the criminal justice education and standards commission court fee. This is on page 245 of the bill. This is identical to the Senate and this has no fiscal impact because it is changing the distribution of the fee instead of the amount. The last justice and public safety fee is on page 12. This is section 18b.19. Court costs for the services of expert witnesses providing testimony about a chemical or forensic analysis of a trial. This is on page 245 of the bill. This is identical to the Senate. It creates a $600 fee for an analyst to testify about a forensic analysis at a trial. We have no estimate available for this. [SPEAKER CHANGES] Thank you, Sir. Natural and economic resources. [SPEAKER CHANGES] Thank you, madam chair. Timothy Bell with fiscal research. Section 13.1 of the bill, which is on page 165. This mirrors the senate proposal. It implements a new four dollar soil testing fee for whats to find ?? season from December until March, on any given year. It also increases the expedited soil-shipper fee from from $100 to $200. It generates approximately $450,000 in new receipts. The next fee, section 13.8 on pages 166 and 167. This allows the board of ?? of soil scientists to charge for the actual cost of the examination fee. Currently, they are permitted by statute to charge $125. The actual cost of the national exam is $150. This allows them to charge up to that amount. Section 13.9 Increase certain commercial fertilizer fees. This is on page 167 of the bill. This increases the annual registration fee for fertilizer products weighing less than five pounds. From 30 dollars on an annual basis to 55 dollars on an annual basis, and generates

$21,000 in receipts. [SPEAKER CHANGE] Madame Chair, Jennifer Hoffman with Fiscal Research, continuing on that page, Page 13 at the bottom of your chart, Section 14.16 is a Senate only special provision so you don't find it in the House budget. The senate diverted a portion of the scrap tire tax to the general fund, the House did not. If you flip your page, Page 14 of your chart, the first two items on there again are Senate only items where the Senate diverted a portion of the white goods tax and a portion of the solid waste and scrap tire tax to the general fund, the House did not, you do not have a House provision. [SPEAKER CHANGE] Jennifer, would you give us the page numbers on those? [SPEAKER CHANGE] There is no House provision so there is no page numbers. [SPEAKER CHANGE] I understand, got it. [SPEAKER CHANGE] Section 14.26 is also a Senate only special provision so there is no house page number. This essentially appropriated the severance tax from Senate Bill 76. At the bottom of that chart you do have the House version of the Senate special provision, the House version begins on Page 188, Increased Funding for Dredging. The Senate version increased registration fees for boats and titling fees for boats, the House version does not. Instead the House version appropriates an outright general fund appropriation. Both versions diverted 1/6 of 1% of the motor fuel tax to dredging and both versions set up a special dredging fund. The amount of diversion is 1.2 of the motor fuel tax but there is no increase in that tax. If you flip the page of your chart to Page 15, section 14.3 covers pages 168-172, that's the Land and Water Conservation Fund Special provision. This essentially repeals the Natural Heritage Trust Fund and takes those dedicated tax revenues that used to go to the Natural Heritage which is 25% of the deed stamp tax and certain special license plates and diverts those monies to the Clean Water Management Trust Fund. There is no fiscal impact because again it is just a transfer of existing monies. Section 14.4, Deed Stamp Tax Credited to the General Fund is a House special provision on page 172. Essentially the Senate version diverted Deed Stamp Tax to the general fund and the House does not and again it makes one change and it diverts money that used to go to the Natural Heritage Trust Fund to the Clean Water Management Trust Fund. There is no fiscal impact on that. The next special provisions are on pages 174-183. This is Marine Fisheries License and Permit Fees. This is the same as the Senate. This multipage special provision essentially increases commercial fishing licenses and permit fees across the board by 25%. It also allows the Marine Fisheries Commission to set new fees up to $100 for existing permits and it restructures the four higher fishing licenses. The fees that will be raised are approximately $675,000 and they are to be used to support the At Sea Observer Program. If you flip to page 17, section 14.27 again is a Senate only provision so it does not exist in the House version of the bill. [SPEAKER CHANGE] Timothy Dale again with Fiscal Research. Section 15.1 on Page 189 of the bill sets the regulatory fee for the Utilities Commission. The House and Senate proposal had increased it from 12 basis points to 13 basis points. The House has mirrored that provision. [SPEAKER CHANGE] ?? with Fiscal Research. Section 15.20 on Page 200 ?? Application Fee Increase increases the current application fee from $5,000 to $10,000. The estimated impact of this special fund is $90,000. Section 15.21 is also on Page 200 ?? Reporting Fee Increase. This is identical to the Senate as is the prior one

no estimate is available, but this would increase the JDIG annual reporting fee to be the greater of either $2500 or .03% of grant amounts rewarded, not including the utility account transfer. [SPEAKER CHANGES] We need to go back to the presenter for JPS for correction. [SPEAKER CHANGES] Thank you Madam Chair, William Childs from Fiscal Research, when I spoke about the motion fee that was on page 11 of the chart and page 244 of the bill, I said it was identical to the Senate, that was not correct, there is an amendment that held up only 1 fee may be assessed for any motion for which a notice of hearing has been filed, so I apologize for that, Madam Chair. [SPEAKER CHANGES] Thank you sir. Transportation? [SPEAKER CHANGES] Madam Chair, Bryce Paul with Fiscal Research, directly in front of you. Beginning on page 18 with section 3413, the House proposal for this provision maintains the existing ferry toll structure. Fares that are currently in effect and authorizes the department to generate receipts via advertising and other potential revenue sources. This largely conforms to the content of House Bill 475, by contrast the Senate proposal would have required system-wide tolling effective November 1st, 2013, but the faring structures to be determined by the Board of Transportation subject to a floor and a ceiling. Sections 3415 you will find on page 275 and 3416 on 276, each of these sections is identical to the Senate provision and it consolidates existing fees for the inspections program account and the DMV technology improvement account, and credits those to the Highway Fund, there is no change in the fee level. Moving to page 19 with section 3419, 3419 is a Senate-only proposal that's not included in the House budget, sections 3420 and 3421 likewise are both Senate proposals which are not included in the House budget. And section 3424 was removed from the House budget for an amendment yesterday and appropriation, it's no longer included. [SPEAKER CHANGES] Rodney Bizzle will discuss page 21. [SPEAKER CHANGES] Thank you, Madam Chair, and I would just point out that we do have the total fiscal impact of the fees indicated on the bottom of page 19, the total impact of the changes that you've heard discussed for the general fund are 54.2 million and for special funds, 5.8 million. On page 20, we have a section called other provisions of note, these are not fees that would have a revenue impact as the ones we've already discussed, but these are generally related to finance and things that we wanted to draw to the committee's attention. The first one in section 30.6, which is on page 266, simply requires the Department Administration to study the feasibility of eliminating or reducing the fee that is charged to support the e-procurement system. Section 6.9, which is on page 16, is a provision which allows the state budget director or his designee to access anonymous tax return data from the Department of Revenue for the purposes of revenue projections. And then the next one, section 2.2 is just your general fund availability statement which is found on page 5, the Senate-version of the availability statement had a reserve of 217.1 million, for a finance package of the House Budget Reserves 38.5 million in FY13-14, and 381.1 million for fiscal year 14-15. And Madam Chair, the NER team can go through the next several provisions.

Any ??. [Speaker Change] Yes ma'am. I bring ?? with fiscal research. Section 15.28 page 206. Regional economic development commissions statutes creating the commissions repealed. This is identical to this Senate except that the repeal of the four state created commissions becomes effective 6-30 of 2014, as opposed to 7-1 of 2013. The next item section 15.18 page 195. Modify IDF in utility account. Is identical to the Senate it reverses the change enacted July first of 2012 which limited IDF availability to the 65 most economically distressed counties to permit use in all tier one, and tier two counties. It modifies the language requiring that funds be reserved only for projects that will directly result in the creation of jobs to projects reasonably anticipated to result in the creation of jobs. Also eliminates language regarding job retention. It modifies language requiring that funds be reserved only for projects in eligible industries by merely giving priority to such industries. And the remainder of that provision is conforming changes. The next item JDIG modifications section 15.19 page 199. Is also identical to the Senate. It requires best efforts on a commerce's part to achieve the average of the range of percentage it withholdings allowed in calculation of the minimum and maximum grant. It requires information sharing with locals within 30 days of submission of a JDIG application. And it modifies the liability cap to be 22.5 million for the 2013/2015 ??. And 7.5 million for July 1st 2015 to December 31st 2015. The next item section 15.3 page 189. Is the unemployment insurance reserve. This is different from the House in that it sweeps those division of employment security fund balances to go to the unemployment insurance fund for federal debt reduction. And the next item is on page 189 15.4A. The employment security reserve fund. Makes the 205 million federal grant all go towards the UI system upgrade as opposed to the House version which also allowed those funds to be used for UI administration costs. The final one 15.7A on page 190. Is a new house provision. Commerce flexibility to reorganize the department to establish the public, private partnership. It allows the Secretary of the department to reorganize positions and related operational costs within the department to establish a public, private partnership, which includes costs containment measures. [Speaker Change] Madam Chair. [Speaker Change] Representative Luebke. [Speaker Change] On the JDIG portions could we hear from the staff as to how that alters current legislation? I heard what it changes it up to, but how that is different from what we currently have? [Speaker Change] Aubrey. [Speaker Change] Yes ma'am. On the application fee, the current application fee is $5,000 that would increase it to $10,000. The application fee has not been changed since program inception in 2002. The reporting fee increase is also a modification since program inception which was $1,500 is now at $2,500 or the greater of either $2,500 or the .03% of the initial grant amount less the utility account portion. So as example for that a company that received a JDIG award like MET-LIFE would now have an annual reporting fee of approximately $26,000 as opposed to $1,500. The additional modifications modify the cap. The cap currently is a calendar year, award cap of $15 million. And this provision allows over the ?? to be a cap of 22.5 million and then the 7.5 for the first six months of FY 16. It also requires the information sharing with locals within 30 days of the application which is not currently in statute. And then it requires the best efforts on commerce's part to achieve the average of the range of the percentage of withholding allowed in the calculations of the minimum, the maximum grant. So that range is 10% to 75% and it would require them

[Speaker changes.]...attempt to hit 42.5% per their award cap period. [Speaker changes.] Follow up. Representative Luebke? [Speaker changes.] Thank you, Madame Chair. Staff? Could you kindly explain more on "best efforts" concept. [Speaker changes.] Sir, I'm referring to page 199, Lines 23 through 26 and the language is "the department shall make every effort to insure that the average percentage of withholdings of eligible positions for grants awarded under this part does not exceed the average of the range provided in the withholding section." [Speaker changes.] Madame Chair, as you know this has been one of my favorite bills through the years...the JD Bill... [Speaker changes.] I remember. [Speaker changes.] And...(laughter)...so I wanted to ask...so this is language, as I'm reading it since it's underlined, that it's not in current statute...the "best efforts"? [Speaker changes.] Yes, sir. [Speaker changes.] And, if I may...and so current law is what? Is there anything in there at all...current law...or is this changing current law in terms of...basically how the taxpayer will fare because what we're negotiating here is how much of a break we're giving the corporations in terms of not having to pay...pay in on behalf of their workers? [Speaker changes.] The agency actually made this suggestion to help temper liability of going forward, right now with the 10 to 75% withholdings range, often...Stewart Dickenson?????? of ???????Finance, who runs the program, said that companies come in pushing for the maximum...75% over the course of twelve years and this gives him the cover to say "we can't make all awards at a 75% level"...it needs to be on average in the middle of that range, which is 42.5%. Again, helping temper liability. [Speaker changes.] Representative Carney? [Speaker changes.] Yes, Madam Chair...I don't know if I missed it but could the staff go back over...on page 20, the very last one...section 3426? [Speaker changes.] Madam Chair? [Speaker changes.] Staff? [Speaker changes.] I can cover that provision. It's Section 34.26 on page 279, which allows counties to use the Article 46/Local Option Sales Tax for a variety of transportation purposes. Counties already have authority to use this article for any purpose so this is essentially just clarifying that these funds can be used for transportation purposes. [Speaker changes.] Representative Starnes. [Speaker changes.] Thank you. Well, a coupla' questions but while we're on that subject...but this is the first time that we're allowing counties to use this portion of the sales tax for road...highway purposes, isn't that correct? [Speaker changes.] Jeff Cherry????, ??????? Traffic Division, as far as I know, that is correct. [Speaker changes.] Follow up ?????? Senator Starnes. [Speaker changes.] Thank you. And if this sales tax has been put on previously, perhaps by referendum, does this...and then the voters are told that they would be used for a specific purpose...are counties authorized then to divert this money that was approved by referendum, for a highway purpose. [Speaker changes.] ???????? Traffic Division again...one of 5537 in statute specifies the wording of the referendum. The referendum is not...that's ????? by law for this levy...this particular sales tax does not specify a purpose so therefore, if they wanna' use it for roads...I don't think it would be needed to re-referenda???? [Speaker changes.] Follow up, Representative Starnes? [Speaker changes.] Just to make a comment on this provision...using local money for highway purposes is a pretty new concept and...that we're delving into here...and I think it's a mistake that if....

...passed a referendum and were told that their sales tax would be increased for a certain purpose, it needs to be used for that purpose which they voted on and I think its not good public policy then to come in later and say, "Well, we're going to divert the money that you approved for a certain purpose to highway purposes." But that's another issue. Let me ask one other question to staff. When you look at the budget overall, how do counties come out? Have they been pretty well held harmless or have we pushed additional costs down to the counties? [SPEAKER CHANGES] I don't see a staffer quickly raising their hand. Karen? [SPEAKER CHANGES] Madam Chair? Karen Hemmingsblanks [SP] in fiscal research. We have not done a specific analysis but in comparing all the activity in the various subcommittees, I think this budget actually does less to take money from the counties or to impose additional costs on counties. [SPEAKER CHANGES] Thank you, ma'am. Members of the committee, other questions? Representative Luebke? [SPEAKER CHANGES] I just wanted to comment on what, first, does everyone in the committee feel that to not that staff wouldn't know, but are the county commissioners OK with these aspects of the budget? Do we know that maybe from the appropriations committee yesterday or from any comments to committee chairs? Because if not, I think it would be helpful to hear from the county commissioners. Particularly on this point about using sales tax dollars, which in Durham, the referendum was about helping education. So is there someone from county commissioners who could address this, ma'am? [SPEAKER CHANGES] I'm looking to see if I see a representative from the county commissioners. Kevin Leonard? Rebecca? Anybody here from the County Commissioners Association? Yes, Rebecca Troutman. Rebecca, would you like to come up and try to address that question? [SPEAKER CHANGES] OK. Thank you. Thank you, Madam Chair. Rebecca Troutman for County Commissioners Association. I think of what Ronnie Bisnal [SP] said we would just kind of reiterate that that counties can already use sales taxes for transportation if they so choose. [SPEAKER CHANGES] In the overall question, Ms. Troutman, I believe that Dr. Luebke was trying to address was your comfort level with respect to this budget. [SPEAKER CHANGES] To the House's budget? [SPEAKER CHANGES] That's right. With the, all the features of the appropriation fees. The fees here that are here in finance. Thank you, ma'am, for correcting or heading on direct. [SPEAKER CHANGES] Madam Chair, I don't believe that there are, the fee structure impacts counties. So if we misread the budget, I would certainly like clarification from staff. [SPEAKER CHANGES] Thank you, ma'am. Representative Hager. [SPEAKER CHANGES] Thank you, Rebecca. [SPEAKER CHANGES] Thank you, Madam Chair, Chairwoman. I guess this is a question for the staff on page 26, Section 15.18, we move from funds on the 65 mostly economically stressed counties to 80. Can staff tell me the breakdown between how many tier 1 counties there are and then how many tier 2 counties there are? [SPEAKER CHANGES] Staff? ?? [SPEAKER CHANGES] Yes, there are 40 tier 1, 40 tier 2 and then 20 tier 3. [SPEAKER CHANGES] I'm sorry, would you repeat that? [SPEAKER CHANGES] 40 tier 1, 40 tier 2, and 20 tier 3. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Members of the committee, questions? Concerns? Generally well. We're moving right along. [SPEAKER CHANGES] Madam Chair? [SPEAKER CHANGES] Representative Starnes. [SPEAKER CHANGES] Thank you. I do want to point out one other thing that troubles me a little bit and it's on the page 279 in the big book. And it's on line 38 under, apparently under the new transportation bill. If counties chose to use some of their local money for highway purposes, then they can get some matching money from the State under these new, under the new highway bill we passed, but I don't like the idea on line 38 where they get a bonus. I mean why should we be telling the locals that if you'll go ahead and impose this tax for highway purposes then we'll give you a bonus. I just think that's a bad public policy. [SPEAKER CHANGES] Thank you, sir.

Members of the committee. [SPEAKER CHANGES] Madam Chair, request the ayes and nos on the votes. [SPEAKER CHANGES] We’ll have them. We’re waiting for a motion. Representative Hager. [SPEAKER CHANGES] Madam Chair, I make the motion for approval for House Bill...which one...Madam chair...Senate Bill 402 for a favorable report. [SPEAKER CHANGES] We have a motion before us, further discussion, further debate? All in favor…I apologize Dr...roll call vote being called for we will start the… [SPEAKER CHANGES] Representative Alexander. Alexander, no. Representative Blust. Blust, yes. Representative R. Brawley. R. Brawley, yes. Representative B. Brawley. B. Brawley, yes. Representative Burr. Burr, yes. Representative Carney. Carney, no. Representative Collins. Collins, yes. Representative Cotham. Cotham, no. Representative Davis. Representative Dollar. Dollar, yes. Representative Hager. Hager, yes. Representative Hall. Representative Hamilton. Hamilton, no. Representative Hanes. Representative Hardister. Hardister, yes. Representative Holley. Holley, no. Representative Johnson. Johnson, yes. Representative Jones. Jones, yes. Representative Jordan. Jordan, yes. Representative Lewis. Lewis, yes. Representative Luebke. Luebke, no. Representative McManus. McManus, no. Representative Moffitt. Moffitt, yes. Representative R. Moore. R. Moore, no. Representative T. Moore. Representative Grier Martin. Grier Martin, no. Representative Samuelson. Samuelson, yes. Representative Schaffer. Representative Setzer. Setzer, yes. Representative Stam. Stam, yes. Representative Starnes. Starnes, yes. Representative Stone. Stone, yes. Representative Tine. Representative Waddell. Waddell, no. Representative Warren. Warren, yes. Representative Wells. Wells, yes. Representative Howard. Howard, yes. [SPEAKER CHANGES] Motion passes on the vote. 21, aye. 10, no. Our next bill, on our calendar for this morning is House Bill 951. Representative Waddell, sir are you ready? Representative Blust moves that we have the PCS before us for the purpose of discussion. [SPEAKER CHANGES] Madam Chair. [SPEAKER CHANGES] Can’t see who’s… While we’re doing a little cleanup here, Representative Cotham, we’re proud to have you back and hope that you’re doing much better and I hope everything is going well. We’re also going to do a motion to ??

Tough to an end to any activity that led to the LDAP that can any, adding that they can get that back down list medically planned, 59 and we're ready to take an MGM(SPEAKER CHANGES) dedicated to deploy his ability not elections committee without any more competition is a bill that would do away with a $3.00 political dimension of the state tax form the bulk of the attacks were some of the field highlighted time and taxpayer, they can designate $3.00 , tax liability $6.00 for couples to put an ad that a democrat party Republican Party libertarian party and this bill seeks to do away with that at the end time the macula promotion of the public at the plate and lefty they can turn-of-the time, then sharon's (SPEAKER CJHANGES)in the life of bill is going more to the plan is ?? what sort of like it, and knowledgeable about 10 years playing time to a bill sponsored by Hawaii doing this fall and holiday of the Fontana had worked well for many years the benefit of all the republicans and democrats and libertarian bent and in the category of help, balancing time-page questionnaire, the peak of the smell of the three parties are satisfied on the fact that they cannot be only a little oriented on one seven on the party, Florida, Japan are discriminated against by this policy that when I don't think that's the role of the state, to be the solicitor woodland NT is a tax form estimated time of a question like that of questionable for the content and so this bill 6 to 200-cuff in the collection of money from state government on behalf of political plan that would be the biggest proper role for the government and public , and age of social network in fundraising unlike the making in the traditional under-week of the rebellion dollars for a financial-I don't think this is a mechanism that the parties to depend on the taxpayers to do support from the flood for national development and put the time, and that you have mentioned again, time half the NEA and that he had paid only: and I don't want to give HTML help build the kind of behind-the way I plan to expand the time to head off the wall of a lifetime: (SPEAKER CHANGES)A and I am time to time you get them to time the ankle and county land method you can't stand the demand that can happen if the time the one that time he called a time ?? (SPEAKER CHANGES) one time card loans and T NFL and that foundation, and that many a time that happened in the fifth year -end a good from the plant and have happened had it and they look at Miami HMM, and-wife and two and two members of the committee, and this is a tough battle, actually is simple?? medication no residential, good taste cooking and T7 percent of lake county, attend this gives them the ability to bring in ??............

their jurisdiction, a park in their treatment plant and Senator Harry Brown asked to be added to the bill with ?? to bring in some economic development land. There's no opposition. Both communities are fully supported and I ask for your support today. [speaker changes] Representative Luebke. [speaker changes] Madame Chair, I'm delighted to be able to move for ?? report. [speaker changes] Ask staff do we have all the proper documentation on these two provisions. [speaker changes] Yes, we were provided documentation that for the town wants to bring in its own property so that you could see that local act and the other town, I get them confused, it actually has a voluntary petition from a non profit that wants to have a business part brought in in the voluntary annexation. So, there's evidence that the town boards wanted the bill and that the property will be the first property brought in under the local act wants to be brought in. One is owned by the town, the other is owned by a non profit. [speaker changes] Thank you. Senator Davis, we're not picking on you. We do this to all. Representative Hager. [speaker changes] Thank you Madame Chair. A question for the bill's sponsor. Senator, on this, one of the reasons that I was aware of that we do, that we don't, that we tend not to do non contiguous annexations. We tend to jump over, maybe, some of the depressed areas that need the services to get to richer neighborhoods and those things. Is that the case on either one of these issues? You're not jumping over anybody to get there, are you? [speaker changes] No. [speaker changes] Thank you. [speaker changes] Representative Brawley. [speaker changes] To debate Representative Luebke's motion. [speaker changes] I don't--we have a motion give Senate Bill 177 favorable report. All in favor will say aye. All opposed No. I'd like to thank you sir. Your motion passes. I'd like to especially thank our staff this morning because we had a lot of paper and a lot of reports and things that had to be done really early this morning. Fred Hines, Reggie ??, John Brandon and Mike Clampett. Thank you for being here early and getting everything in gear. Our pages this morning is Mary Catherine Starnes, and she is here on behalf of her dad, Representative Starnes. Stephen Steiner from Orange County. Stephen is my page. ??, I'm sorry, Jackson Valentine from Nash county, Representative Collins and James Yates from Wake county, Representative Stam. With no other business before us, we stand adjourned.