Order throughout the room. Welcome everyone, we are glad to have you here. This is an exciting day for us I think, from the crowd in the back, we'll see what we have going. We'll do our housekeeping first and introduce our pages, there is a Clark from Rayford, Senator Clark, any relation? Harrison, I can't read your writing from ??. Senator Wade welcome and Miss Lindsey from Reedsville. Senator Berger?? Senetator Burger. Jacob Bernett from Camden, Senator Jay Davis and Grahams Clark from ??. Welcome, hope you've had a good week, I know it's been a short week but one that I am sure you'll all remember. Sergents and Armed Staff, we appreciate and are glad to have with us today ?? Cheryl, Camden Lewis, Donald Blake and Anderson Meadows, so thank you all for your service and for all that you do for us. This morning we are going to hear from two Bill. This morning we are going to hear about two bills. They are both PCS's, we'll take those up. They are not for discussion, they are just for presentation. We will not be discussing today, we will do that at a later date, and of course we will won't be voting on any of these, for either of these today so with that, we will first hear from Senators Clodfelter and Hartsell. Senate Bill 394 and this is a PCS, do we have a [SPEAKER CHANGES] Motion of clarification sir. Did I understand that we are not going to take any questions [SPEAKER CHANGES] No, this is just for presentation only today. We are just getting it out in front of the whole world today, but we will have a motion to hear this PCS or have it put out please by Senator Hise, thank you. All in favor say Aye, thank you very much ??? Senator Hise [SPEAKER CHANGES] Thank you Mr Chairman, members of the committee. First let me say that, we appreciate the opportunity to present this to not just this committee but to get out to the whole world as it will be including those folks in China that are apparently listening on our system here and have been for years. Let me simply say that this is not, the 394 that you have before you is not a Republican plan, it is not a Democrat plan. It is not a Senate plan, it is not a House plan. It is a what we tend to think and we like to look at, Senator Clodfelter and I as a consensus effort to look at tax reform. It is an attempt to fix an adequated, outdated tax code. It does not seek to increase taxes. It does not seek to decrease taxes. We again appreciate the opportunity to put it out. You have before you the committee sub and you have a series of, there is also an explanation that goes back to the last version and updates from the last version that we've presented to this committee, I think sometime in late March or early April. This is the third version of the bill. Let me if I might, I think Senator Clodfelter can explain the specific items in this separate handout that you have as to what they are. [SPEAKER CHANGES] The handout will guide through the bill. The first two pages of the handout are the high level summary of the major provisions of the bill, broken down by the principal types of taxes. The third page, those haven't been distributed yet, have they been distributed? [SPEAKER CHANGES] Apparently some people don't have,some people do [SPEAKER CHANGES] Remember what I am saying cause it's going to be really simple and you will get the copy in about 15 seconds alright, the third page that looks like this, that's the fiscal analysis of the bill and it shows you all the operating components of the bill and how they come to the bottom line. The fourth, fifth and sixth pages of your handout are analysis of the impact of the personal income tax changes on different income levels and different filing statuses
Those would be charts will look like this in your handout. Some people have the hand out. Everybody will get it shortly and then the final page you've got, on the back, will look like this and that page is a summary of what are the main changes that were made between the second addition of the bill, which was the addition we presented to the committee in early April and this addition of the bill, which is the third addition of the bill. That is the back page. That's the summary of the principal changes. Most of those are the result of input and reactions we've gotten from folks. Some issues are still in progress but that's essentially what you have with your handouts and that will help guide through your reading of the bill. [SPEAKER CHANGES] In summary, the primary differences from the last version are the rate, the personal and corporate rate for both carry pass throughs and otherwise is 5.95 percent flat. The franchise rate is $1.25 per thousand with some ? and the sales tax is 4.5. Otherwise, we have the other changes...we do not...this bill from the last version does not tax social security. It does not expand the base any farther than it would be previously on sales taxes and just as a matter of information to you, in the first two years we looked at...we actually came up with more money than we needed to make it a flat situation. We thought about looking at some other provision. We looked at some other provisions and one of them was in fact we have extra funds and we applied that into a reserve to pay the UI debit, which could expedite the payment back for business purposes. Other questions, we'd be glad to answer at some point in time but I think that's our time. [SPEAKER CHANGES] We're going to make sure everyone who does not...anyone who does not have a copy of the explanation and etcetera, please let me know or the Sargent at Arms know. I think they all got swallowed up pretty quickly. We'll make sure all the members do have copies and then we will have discussion. The Sargent at Arms pass those out please and then we're going to have a full discussion next week or at a later date on these bill. So next bill will be 677. It will be presented by Senator Rucho or without Senator Rucho. It is a PCS so we need a motion to hear the PCS, please Senator Tucker. All in favor say aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Oppose? The ayes have it. Senator Rucho. [SPEAKER CHANGES] Thank you Mister Chairman and members of the finance committee. This has been waited...a long waited...we worked hard to get out some information. We're not going into a lot of detail because it was designed, basically, to allow it into the public domain so that you'll have a chance to look at it prior to any committee meetings. First thing I’ll ask, though, is...members of the audience, how many...would you just raise your hand if you're lobbyists. Okay, members of the committee, I just want you to remember those are the folks that are in the process of trying to be sure that this tax system stays complicated and loopholes are maintained. And I’m not saying...and I'm not saying...that's their job and okay but all I will tell you is the people that they represent in many case are concerned more about the fact that they maintain their loopholes and their special ? as is evidence by seven other times when we tried to move a tax reform...you ask Senator Clodfelter...tried to move tax reform and, unfortunately, was was stymied because of the fact was that the goal of special interests rather than the people were put forward first. The goal of this bill is to do a number of things. First of all, to eliminate tax ? and loopholes that are in the biannual expenditure, which we're trying to get rid of those so that what that means is we get rid of the expenditures and the loopholes and the ? and that means everybody's tax rates are less in the state of North Carolina. That means everybody's going to be treated fairer.
One special instead be given special consideration at the expense of the people from console by the ring by limiting the Congress and the plans we get a chance alone made without ultimate goal of Symantec's is similar for a similar two from that agency, several personal income tax rate the plan is designed to transition into that he has also designed with first base on sound economic principles based on company business policies so they can B got up and down based on the revenue stream by the old Seattle and a novel to reduce from the professionally to taxes and taxes across the board to make North Carolina the competitive state we already know which makes take away and now it's going to be inmates taking this is the fourth week and have a business he organically grown in small business mouth or leaking the attracted just two of them, state businesses to come here purchasing property purchased land to play north Carolinians and blocking back to work from this case opportunity to put the people first and not special interests sell malice talk about just a couple about to get some clarification on a few things are out there that belie discussion but let's talk about the TV ads that are out there confusing the public that talking about some of the areas that are always say some less than truthful information about some ads back talk about the Federal Health Care by E and nonprofits are two other than withholding taxes pay no taxes a loyal to the state of North Carolina and their existence here F. Bentley SE and F-one NSC by the hospital association and the sure knowledge seemed that talks about that, they should have said that the Moscow face facts and they only seem possible bills of 26200 thousand dollars of that nearly impossible to understand that began a nonprofit organizations many executives and then pay $10,000,000 for multimillion dollar salaries S at the profit at 20/4 and so we need to be very conscious about the fact that two L. Nichols the delimited because if we talk about a fair plan that switching the let's also talk about any damages claimed that because tension you'll be inundated by a lobbyist friends trying to preserve their tax loopholes well to talk about (SPEAKER CHANGES) P. Mel Tillis for example they had represented of adults that talks about seven are still fighting for affordable housing and as a number of falsehoods at Manhattan a special interest group that many say the monopoly because of the fact that they leave or anyplace else to try to stem from a 6% and that is universal price that they are getting more concerned about any job creation that the tax reform package would do about maintaining their luggage and well financially this is a contract everybody to look at what is in the best interest of the state of North Carolina MM last month talks about to another and that talking about to nonprofit charities anyone understands that they are doing a lot of good work in the U.S. cable Carolina and law will say he is that if we treat everybody the same everybody used out that the police (SPEAKER C HANGES) , Cannell by Eric Weiner Emily and tax policy that this does is it puts money in people's pockets so that they'll have a chance to even two to charity, it released by the men should not be taking winners and losers that if Mr. Chen and bodies finished IE look from too much higher than the future will weekend talk about this bill in the detail and that this is designed to do is give everybody kind of opportunity to study it too are battling for renovations and got we will find a way they are to actually make North Carolina, competitive economy not just in the southeast but one that will be able to challenge by the entire state to attract the chief of the strength of the national title in the foot two, an opportunity to present this in more detail thank you for that to hand out of five to oh percent from bringing the forgo the two bills for that put them up ??....
the public eye. And before we adjourn, before we adjourn, I want to thank our staff for the hard work that they have done on this throughout the session in both houses and in all the bills that we have brought forward and I hope that we can come out of this with some really good tax ?? for the taxpayers of North Carolina. Do we have a question not germane to the presentation? [speaker changes] It's germane, but not - it's a technical question which is, is there a similar document to this for the NC Fair Tax Act? It shows the changes of what the net cost will be, who bears the cost of the changes. That would be very helpful. [speaker changes] Yes, that will come out before we have discussion. [speaker changes] Thank you. [speaker changes] Thank you. With no further business, this meeting is adjourned.