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House | May 30, 2013 | Committee Room | Finance

Full MP3 Audio File

If not have enough nuts Mr. Bryan Mr. Platt Mr. Davis and would like to thank you for being here are also likes the pages of the senate's most of their aunt Mr. Process could take it from a year that those aged am as a publicly procedure and that's a problem at this demo tape help, said bill 129 search of replace traditional ?? (SPEAKER CHANGES ) from the desert to say that the dead man's committee out to shake the use of this early morning that this bill hard this from a friend of Genstar's said when asked him about a bill yesterday from anywhere we ran seven house bill than the mood to start moving the ball bills for offerings on else that destiny to city was living the dream of having an ominous only 119 this morning of said that 129 crashed unanimous before ?? (SPEAKER CHANGES) the house finance committee, and this committee before and the explanation simply as a 22,003 and 2009 the general assembly approved about $3.2 billion in debt for capital facilities then, we just a Russian man of fault that he would be good if we assume a good deal of legislature of the heavy up two to know this, given the future without voter approval after much work to build those treasures or more aware that we were all mulch believes that, and then this should make a move from ocean for family planning a family said, is a question that they can then missed a 10-571 other side of a biochemist was a good life as a committee-making the best of them house to 536 percent at fault but in this chair and a day of the few words of a loss to feel about the one we're looking at with this project of the home and we have a real problem in the nation that you're all aware with people being killed on the highway by a third person driving or under the influence of alcohol or drugs, VR status tried many different ways to try to cut into this problem solving successful some have no luck this is one step further in the college trying to cut down only member of the people who were inherited from a high waves the fate of some importance to the of the bed there some consternation but some folks when they first to leave the language and this will cause a lack of will coach the women here you go easy on the folks that are driving drunk and we would do that when we're not going easy on the lower going into recognizing some facts are out there , but Mr. Dole domestic balance commission and domestic violence has a passionate interest of the people who are trying to control them and interest in this particular kind of approach but always someone who is a day of my husband and father had a drinking problem and goes out there and rights and wrongs this call loses his license was unable to drive to work a brash loses his job because Holman said Spellman store striking then defend their blue summer along the way domestic problems plaguing the crop the problem alike as it should the coliseum trading again lost a job machine for the last one facet of this that's not directly related to a drama on the highway would have clipboard of the parser import mission Michael people mobile work in the person gets called property stocks gained a reprise of waller's then loses his license or her life and from the very likely take him back and forth to work and that follows a problem which may result in the major losing their jobs or just giving up on me and saying it home and again in two by the end so we're trying to ??........

The pro cheer what we're saying is what the gold: mission is to have people on the highway who are driving not drink that special events. The best answer we have this approach lives rather than having somebody arrested taking away their own driver's license, which causes some of these of the problems that problem list have been tried with less control them but that the drumming is less allow them to drive to work in backless allow them to drive and a limited way is the best be sure they can do with gifted ranking and that's what this admission and reliability of the 16 bit of there are some of the technical part of this legal parts of this and the less money owed to five carol national primary sponsor on those two issues with an explanation of basically I want to understand we're trying to find a remedy that allows people to continue the work that allows them to have less domestic violence and home to make it safer for you and I am, all of our family, my weight and not be confronted with new drugs are so with that unlike for a gesture of the message action to save the word about the middle portion of the message text as chairman,(SPEAKER CHANGES) Maryland from had this was ideal that as soon as a part of all the other deals hired a secession about is on track to address the problem from driving the more save this bill is about the addressing repeat offenders and looking around in other states are looking at a scientific research on a mandatory analog is the way to do that. The cuts down on repeat offenders I believe of 67% from a weekend outside missing two free e-mail to you last night there's more from a few things or handed out this morning , but that this bill is just sat is just to keep some money from his namesake one Thomas ¬be a punishment is just as when the car and just basically a second passenger nickel or just to make sure that vs. non-java on these things are not what you might have heard how they would have a operated 1015 years ago and are very advanced L column yet again somebody in the more peace overture below into your machine on the issue, she was a very close plays you have to repeat that step over and over and over again at certain intervals is designed to try to extract reports correctly to TV and say you if you have one of the Singapore united that if you drink and drive you to be called unity and peace, be notified and may even get a lot more trouble and so hopefully the key people to come on the straight hair taken from the war two, political neighbor helping children do things on the week's events , where the currently not able to do that via to go all the amount region, or the financial penalties (SPEAKER CHANGES ) this is fine as calm as a fiscal night that she never sued last night that says that no estimate is available on that but I will tell the body is that berry is some actually a huge, money out by the Federal government this is much like when the state's news from the 0.10192108 the Federal government started with a large car money on the day care plan to deny a promise a deal with the navy grants to states to do that and that the lobby came through the seventies a state without the cold safety, I was seeking money to know that all right now we're in the care, approach studio lots of ideas about 52 -$0 million is out there been estimated that North Carolina makes a change to a mentally ill of slalom vendors under the gala for about $23,000,000 a year and more unusual Federal safety album that is not in the fiscal nine, because we will not have is up and running by July 1 and not be eligible for this fiscal year until the next voluble we are hopeful than in the long term that will actually get money to help us with the costs associated with this program in the inland valley site is Linda say briefly that I was a fair calls came to me about this bill, Morris, but the more fathers a win for everyone from the main thing is to get to literally presents some discussion came from driving their color 90 license issue on the edges of the things you from driving a car that initiate a lot of issues, from driving that??.....

if you are unable to do so if you're intoxicated protects the safety of the public and protects the safety of that driver it also allows that driver to get to a business, to get to a job, to support their family it helps all along the way and if you're concern about the cost I think it's about one to two dollars a day is going to be the cost to the person that's really not more than a ?? or two per day so I thought this was a win-win I hope you do too and we'll be glad to answer questions or listen to any amendments[SPEAKER CHANGES]Representative Hanes [SPEAKER CHANGES]Thank you Mr. Chair, I'll like to thank the bill sponsors on their work on this very important bill I think everyone of us in here unfortunately has been touched in some type of way by people who've driven while intoxicated my question Representative Jackson you might be able to help me with this could you talk to us a little bit about whether we already have existing limited driving privileges for folks who might have a first DWI how does that interact or how does that jive with this bill and I have a follow-up question for you as well thank you[SPEAKER CHANGES]Upon a first conviction while driving impaired DMV does revoke someones drivers license for a year provided they have met unique certain criteria you are eligible for limited driving privilege if you had a blood alcohol read reported to DMV point one five or higher then you are required in addition to those other provisions to also have an interlocking vehicle you might operate this bill is currently written that lowers that threshold from point one five to point one three [SPEAKER CHANGES]follow-up[SPEAKER CHANGES]clearly you always going to have bad actors even in a well-intention bill like this I'm wondering what is the penalty clause for those folks who might be convicted under this bill and then take that interlock and put it in a vehicle they're not actually using as their primary operating vehicle you know this stuff goes on all the time right now what kind of safety measures you have in place to kind of try to protect in some of that and accomplish the goals that you all tried to do and I thank you[SPEAKER CHANGES]any vehicle that you are operating that did not have the interlock your license will be revoked you are driving outside the scope of your privilege subject to up to 120 days in jail depending on your driving record and will be a loss of your driving privilege as well[SPEAKER CHANGES]Representative Starnes [SPEAKER CHANGES]Thank you Mr. Chairman and I offer an amendment and I believe the amendment has best passed off[SPEAKER CHANGES]Members have a copy of the amendment [SPEAKER CHANGES]Representative Starnes [SPEAKER CHANGES]Thank you, Mr. Chairman, ladies and gentlemen of the committee I'm a co-sponsor of this bill not a primary sponsor but the original bill has the standard point 08 level blood alcohol content and the committee process in the J committee got raised to .13 this will simply take it back to the .08 standard which is what we typically look at for convictions of drunk driving[SPEAKER CHANGES]Representative Mofitt[SPEAKER CHANGES]Thank you Mr. Chair I have a question of the bill sponsor and it relates to the amendment offered by Representative Starnes and this could be for Representative Jackson or Representative Jordan when a person that is that has a .08 you mention a moment ago that is automatic revocation and if they meet a certain forward criteria they can get a limited driving privilege is that correct what's the difference between a limited driving privilege and Representative Starnes amendment to make it an interlock ignition compulsory at .08 what's the difference between the two[SPEAKER CHANGES]in order to qualify[SPEAKER CHANGES]follow-up[SPEAKER CHANGES]in order to currently qualify for a limited driving privilege you would have to had a substance abuse assessment no priors within seven years, proof of insurance it has certain conditions it has certain hours what this does is add to in addition to having those things it adds the condition that you have to have a interlock on any vehicle that you're operating so you still have the same limited driving privilege you just got an additional condition that you have to have an interlock[SPEAKER CHANGES]further questions from the committee regarding the Starnes amendment[SPEAKER CHANGES]Representative Brawley

Assume, shropshire index rose five-and listen only the strong appeal actually reduced from 115 to 2.13 , would apply only come from that can only assume the original bill and the 6 seconds standard that we use a mistake the most across the nation 459 -second-guessing that symbolic, that's when the bill was originally, it was awfully high standards without its related to this release of hosts of the language are all offenders from the cleanest way to do what is probably to say all offenders us what the Federal government requires a boardwalk of the Federal funding a way to eight in most people's mind that he is a dolphin is the difference being that she can be convicted of driving while impaired four other funding sources other than alcohol and save a dolphin language and also expects those who've taken to mean streak of us who are smoking marijuana and care of those companies under the deal has risen written was a plea of a judiciary the key play came as a PCs have made the move from increased at a 0.13 yen vs. stars amendment which I would just four largest anti-Clinton attended this language channel question from disclosure clues are in this discussion was wondering two things, one LP to figure: 13, welcome well off (SPEAKER CHANGES )one fruit and others in the house of those close to fill the human flaky only state from a sale there's a lot of other bill's sponsors of the discussion so I can say I do support the value of all Federal funding of all the way I do support at the 0.13 came about as a compromise on the deal was 100 days than that was stuck in the fourth district committee helicopter my husband and Mr. Anderson Davis also scored well a change, it was a litigious care about is a compromise plan is too aggressive olive bottomless pit to the minute that was taken the bill would be sent to the Sunday warned that Mr. Had just two quick questions on the intercom the fifth amendment to the defeat of the bag and 0.08, like to know what exactly how much fat, so we have to try to register that , from a gentleman from the second thing is how many are lost in the NFL comment on how the warrior locks that would encompass a few lower down 5.5 FM in sound like you and everybody is that everybody in the process of all differently so I can give you a number for exactly how many drinks out never seen a steady they should two beers which labor body in mike's Puc court always say if Elisa Daly had two deer park awful, and that is not the way, if you if I can process would be real, 11 thing about Colin hour on December 8 I can say that from the national traffic safety board just write recently recommended by states consider moving the sender from 0.08105 (SPEAKER CHANGES) , and that's one of the things so that I believe a 0.082757728 straight as far as the number of analog from that number conventions in North Carolina league last year was in the 30/1000 , believe it is in the fiscal nine months are you looking at Colville he'll be a significant number of additional people will be subject and on the dow had to settle some of the banking and the question that the 9 minutes of the precious aid for this document from a good setup that Maddox says saw a later, more break from an informer for a fan in 2 hours -takers is said that starting this adoption is a man that can affect the process, David of this sad, but those manages about that we're back on the bill raising doubts that this involves we're back on the LAN of authenticity chairman I just wanted to know in the past when the legislature is considering D standout perils until issues have come up and so I just like the sponsors to explain how to do is identify the answer to one, minus a bad guy, and a checkbook and said that in addition to access to the ??......

him with sectioning the bill deals with that I can go through that, because there had been issues in the past where people said, well, if you're rich enough in God, and if you are notyour Gwinnett, you know not have as many options, so I'd like you to go to that and then numb and then lost my second question Change speaker:after receipt would do first issued under it is a veryindigent date of funded instead about a deal that again was part of a compromise. some people don't believe that we need that at all or some people would think you everything what itwould do that with kale with the initial installation of interlock device, which is the most expensive part of it, but it would not help with the monthly that you would be the offender wouldbe one hundred percent responsible for the monthly civilian service of making an interlock and I totally understand the poor rich versus poor economy, but the truth is that United youget commitment from one page, or insurance is going from and if you can afford to pay triple your insurance to drive and I believe that you can afford to pay two dollars a day to makesure that you don't reoffend and maybe kill some Change speaker: mystic question his name off the other issue that came up was in the past it was really only one vendor to vendor 's and there was some questions about the vendors and so I just liketo know do you know how many vendors. there are these interlock systems on how many have been certified, who certifies them those kinds of things because, again, in the pastthere were some questions about the relationship of certain vendors with the state and known and how they do their business Change speaker: proceeded there are in your body and your will there are three vendors named in their modern tech smart start and alkali, there may be those we know those three Change speaker: follow-up and so does my next question is, do they have to go through some kind of certification, state or federal certification and you explain what that is, then, whether you know when they got certified any of that kind of issue, Change speaker: but I do know to be certified and not was one of the issues the topic you referred to couple years ago to modernism litigation aboutmaybe only one company was the and certify that has been corrected. there is at least three maybe four companies now the state Oliver, the state provided Mister Timmins area.somebody here from one of the providers elected your from a loving actual certification process. Change speaker:please stick to the podium, state your name for the record you have pressed the button Change speaker: from Johnson( monitor neuron three vendors are funds rate monitor SmartStart in our walk. the certification process was asked about all companies must did hear to the nationaltransportation safety, nutrition, Stanford and locks, impulsive, who are complied as of the other two vendors with the state standard, which requires a multi- day test device avoidanceover sixty seven days of advice things operation and understand what Joyner, some of the toughest in the nation interlocks and apply knowledge of all three companies complyrecovery certainly does. but each has been certified by the state lab and also met the Knudsen certification for an independent third-party level Change speaker: of and just the question in the past that while the price for the interlock among the three companies is that about the same as a coming battle. what is the situation that Change speaker: you start up front all to about the same, which is about seventy dollars per month from now on the related targeting for the quizzes within thank you for the Change speaker: Moffitt business hours. theChevrolets and don't Change speaker: you think this bill is is necessary. it's been a long time coming, but we have in this state is a system that we have beaten then we made our best to test toaddress drunk driving in the state. I will take the court. we will convict them and we can take their drivers license away from them, but people still drive. I mean just because you loseyour glasses that doesn't remove their needs. it do get to work or go to the doctor and go to the grocery store. take children's school so they may not have a license winter stilldropping off our goal is

A third of self highways the family's analog devices them if they're dropping their trouble trying to get this over bill Clinton making that when they have losses are not least are sober and operates a good deals that the right direction the move for fame or four as amended and they will move to the subs to thank the registrars version of the fact that the question, thank you, Mr. Chairman, 2 to 5/8 to seven this device could go on and M cars owned a nine V of the offending activist and console and 1/2 cosmic family that the device MFN clause that MMM two that the fed also mean that mike is a must balance and I have to believe into the machine every time I use a vehicle as well, why should I do know what this something that just curious about how to make a determination that is the chalice palaces believing in it together. The top place and (SPEAKER CHANGES) Mr. Chairman of the NSC question would you have to put in all four vehicles in the house all nine you only have to put the device on the vehicle to two intended to drive studies must else again from all they're glad you got a little folklore, that the lakefront that she could never got much raunchy only after track record that second value question was: what if you drove to coordinate policy, like scorpion guess I would have to use the machine working operators nine five user interface that internal health it's all along that vehicle hit will always be on that vehicle flipped the body was to drive the vehicle, and so I don't know that people would put it on every corner house all the ideas of Littleton on the course of the deal over a and members will get a file to see a surge of college Israel in section seven discusses a bench-include all the enforce discipline which vehicle and so forth , represented by this than some thinking this chair that I think the command line special I can represent from Jackson-737,(SPEAKER CHANGES) that session this year this is my third year in Rollie Ana nothing them out of the many of the judge to come forward to a share something with them back home that I got so much a new police officer good that could last a citadel installation of SMS you think your list that's the maximum benefit about to begin the situation have totally different perspective than what we had a highly nothing then my knee of his demand the continuous is there than that of the message gets to put two and else that's a game is played in the course systems and the liking this cut that barely knows their cells contains those unfamiliar for years for Serbia try running for the right person unlike judges in 97 says we continue to look for ladies and Rollie 22 for the badly good that he goes right back to the system to the core system to turn it into the person has a lot of bands that the Minnesota linebacker us to do any of these charges six months to seven lead higher standard action as much of a good item that for three years some of them have been pushing this in the system if you want, that bunk and that determined the police officer lee said, and I tell you this is office said they are finding that those, that's when the competition to design a plan that he's not there to dismiss S5, whether they make enough that session with some of these often a fan of things that a-one believes seven good, but should share our legislation and I hope that they should be a better movie will thank you for a massive bill Braun -HMM, I get a lot of questions raised about the cost and agents and then I realize that suburban law that weighs 6 to 2 short circuited by have someone else three for you by having multiple cars in the household and I actually going back to really do what we try to do you call we can't have the perfect answer no but now we are trying to do is to reduce the number of people that are driving around impaired 10:00 on Friday night when our kids are all the way home from the movie of the basketball game and reduce the chances that somebody's going to back ??....................

The call someone else doesn't have enough control told not to have five drinks in 2 hours then on giveaway supporting this with all its faults knowing that this is not a panacea, but it is going two taken the end, the number of people who'll be crying for dettloff ones in the coming two years and that simply because someone helps was able to drive a car while impaired because there was some device to stop thank you for this bill and bow me like you're, think we should call where this time zone for a fifth of the best available at above-half and that as a debatable issue of the latest gem in the FHA, the bus passes said that, given the fact that an economist, at this and the business times concerns of the custom at that time we passed legislation of Laettner the fact that this defendant,(SPEAKER CHANGES) the legislation the budget to access we taken over the stunned the public of the game for the state coach commission about the funding we have our legs and as assumes that ability to gain that was also the necessary to prosecute these, cases of Ventura folks who practice in the course no good as it may concern in some part of the effectiveness of this ability of the week, the middle of the generation that the state lamps, is, suffer from the delays represents the goal to balance a guess as to members of the man: voting for the system by bills that would allow funding that they can't give some welcome this thing they're too good to have staffs of these different organizations tell us about the need to have sufficient funding to operate so they can enforce these laws that you take your time, the form and the fact that this shared this question from bill sponsored the project 57, said that this approach, (SPEAKER CHANGES) Susan committee and 10-7 that they express their celebrity centre for never said, this bill that the Kelly descended into the path of a lot of opportunity to get around this that the city around this ignition plants sold in the Panasonic responded for somebody goes an extra step to violate the intent of the law came into driving trial court, under the influence and try again the next governor rice, then had a lock system owner whenever I guess any crisp ally, has a step up to offset that there there's not increased penalty in this deal are some warm but from Wallace license revoked which is what she would be due when the keyword from breaking into a trot without this privilege from the core without com means that the subject of the revocation was a problem. As is the most serious rob Wasserman officiating see anything until 120 days in addition you name it for one year, one pair George most likely you're giving 86 monitor first offender less likely to give the six month sentence suspended of the nation on the commission do some things that view the subject and deprivation for the underlying from the pair also revived in the store to serve an active, as well so any guess you can take a public URL is that she would be violating the law is subject to some real jail, because some people athletics will work , seven of those costs by his chair one more comment to the question one question then my mind when this first was mentioned a million women what do the mothers against drunk driving and say about this ?? (SPEAKER CHANGES ) the mission before its first blush this almost looks like we're going each year on the operating cost the first five million strong running support issues he received some information about 79 , bill hallway and there's a spokesman here: the representing this and take that as a new line and not men everywhere they go right now and am curious less than a mistake if you don't have that intelligence by the NFC to scale back up the dream is walking alongside a: the store and the driver had three prior convictions did not have a driver's license 50 AM access to E: his home when he said that as if UN ??....

revision. if you don't have a driving license for vehicles that have this Change speaker: religious nutters and the Steelers only for this is only a provision that would apply to people with Alimta from hervoicemail on the deal homepage to us under section two. your say that subsection E one fourth SEC has been stricken under current law, you can get a driver privileged. if you have not had a prior condition of conviction for drama and within the last seven years when we when Rex and Faircloth tells about. he was worried some people would think we were goingeasy on offenders. this is one of the provisions now referred to as were actually making it possible for people to get a limited driver privilege or undercurrent while they would not wearsaying that, yes, if you had an unanimously at five years ago when one Carlisle, you would not be held for Robert, with were going to make you eligible for crime for which we want youto drive to work. we just want you to do so. server will give you that privilege, but wouldn't require you to have an interlock so we talk about a school a little easier if an incident that weare trying to incentivize people to get this machine in the core. we want to drive the digital world want to take care of your family which is looking to do so without rancor, from Change speaker: the committee for the notion that lives in stone pads and click' Change speaker: holdings is to destroy and add someone to know we are passing along is charged with deciding on someone with noguidelines that we should do it. someone who does not have the interlocutor car with the Prada wildlife and him alone. Change speaker:I don't believe it would be a stiffer penalty under this bill, I'm not sure I don't believe there isanother statute of the instance you. all our tags enclosing you walk out of the squad is what they eat. if you mess with that. it makes them validate up. Change speaker:there's nothing like that is idealfor powerful as least twenty four eight, was Russia's remote from us is regarded as a class one misdemeanor, so you don't have to get jail time is up to now, if you got licensed thatyou got a prior conviction that makes you at least a level two. the front license plate all in this judge intimately sixty days of two hundred twenty. the storms are most and least Change speaker: a move for a favorable report for House Bill five thirty six, as amended unfavorable to the original. Change speaker:the relatively PCS members of Cleveland emotional for all in favor say I was educatedthinkers can be thanking the sponsors members. the committee will now take of House Bill nine ninety eight, St. Louis and in the unlikely event that pressure decreases in the cabin oxygen mask will drop from the ceiling oxygen rest will draw from the end. we have a PCS for this bill is and will probably lose that these this was for discussion only. I'll never say I hope 's motion carried out ribs and was restarted before I forget, designof this rearranging discussion up house built for my three Robinson, Bill occupancy tax will be sent to the occupancy tax committee. I wanted to get that off my agenda, and so wecan move on to other Change speaker: pleasant things that him a chance to stand before you today and to talk about the exciting subject of tax reform, we can write modernization and simplification isall prolonged about how to begin these remarks, and I have struggled with bad because many of you in this room hair for years and years set in the same tears and heard about thevarious concerns that face us. when trying to address a tax system that was written largely own an economy that was in existence seventy five years ago. all of us in this room here.the common bond of wanting to do what is right

I am going to submit you that we can continue to take steps in that direction by adopting the bill that is before you. What this bill seeks to do is to take North Carolinian's tax system which is extremely complicated and simplify . It takes north Carolinian's tax system which I submit to you offers to a disincentive for people to try to better themselves and it addresses by creating a flat personal income tax rate a 5.9%. As we currently have the highest personal income marginal tax rates in the south east. we have three rates 6, 7 and 7.75. This bill would propose to create one flat rate of 5.9%. As current North Carolina tax law begins to tax at 6% rate from the rate first dollar that you earn , this bill will create a tiered exemption system upto 25 thousand dollars that would be taxed at zero percent. This bill further goes on to address our franchise tax. The one thing that nearly everyone will agree on is that nobody particularly likes the franchise tax or even completely understands it. I deal unlike other proposals that come forth is not expand or imposed to franchise tax on any entity not currently paying it. What is does do is to move in the direction of trying to eliminate the franchise tax by cutting the rate which is a move that I hope we can repeat in subsequent years. The sales tax quite of bit conversations has gone on this year about sales tax. This bill does expand the sales tax base but it does so in a limited and measured way. It does so in a way that focuses only on the installation and repair of tangible personal items. The bill that the sponsors selected that definition is that the vendors who already collecting, remitting and storing the sales tax records for potential audits for 7 years are already equip to collect, remit and store this information. There are a few tax breaks that are repealed and this our first step to refine and further clean up our tax code. We are glad to go into that is where the final piece of the bills with North Carlina's corporate income tax. We have debated a long time about what the corporate tax should be here is What I can tell you.I can tell you that having the highest corporate income tax in the south east creates sticker shock whenever companies are looking to locate in our state. The economist will verify the best way to spur job growth to create opportunities for people to go to work and advance in there career is to cut the corporate income tax. The bill before does a responsible and measured way, the rate will fall from its current 6.9% over the next 4 years to 5.4%.5.4 I regret to say is still higher than neighbor to south

...our immediate neighbor to the south, but it is in fact lower than most of our other competing states. As I said, I did not prepare a long speech to introduce this bill. I know that each one of you in this room has concerns and a commitment to make our state the best that it can be, to provide the best business climate that we can provide, because it is the business climate that we provide that leads to employment opportunities, opportunities to advance, and opportunities for our citizens, our constituents, to better themselves. Mr. Chairman, we've spent about three or four weeks with most of this bill on line. We have attempted to address concerns that have been brought up. I think in your direction, it may be in the best use of the committee's time to let me yield at this point to inquiries. The Chairman: Questions from the committee. Representative Luebke. Representative Luebke: [Silence.] Representative: Mr. Chairman, if no one else has a question, I do. [laughter] The Chairman: Proceed. Representative: I want to yield, because some people have said I always go first, and I just want the record to show that nobody else had her or his hand up. [laughter] The Chairman: Absolutely, and we're always glad to hear from you. Representative: Thank you. First question, for Representative Lewis. Thank you, first of all, for working hard on this. You said something, I think, in praise of lowering the individual income tax rate to 4.9%; I'm sorry, 5.9%. Does that mean that a family making $40,000 will pay at the same income tax rate as a family making $4 million? Representative Lewis: Let me answer that this way, Representative. First of all, you've got to remember that I prefaced the remarks on the personal income tax saying that there would be blocks of income up to $25,000 that would be taxed at zero percent. After that, the short answer to what you ask is, yes. And I respect very much there are deep philosophical differences when it comes to trying to assess what the tax rate should be. I will submit to you, and I will continue to advance, that the rate that income is taxed should be the same for everyone to whom the tax is applied. You and I both know that, even though the rate's the same, obviously a family that makes $4 million a year will pay a whole lot more in taxes than a family at $40,000 a year. The rate would be the same; of course, the amount paid in, the amount contributed to the revenue of the state, would be vastly different. Representative: Followup, Mr. Chairman. The Chairman: Followup. Representative: Do you know, Representative Lewis, thank you for that answer. Do you know what these tax savings will be for the family making $4 million; that is to say, paying 5.9% under your bill, and under what I assume you have the votes to pass, and the governor will sign? So what's the tax break? How much money does a family making $4 million save as a consequence of your bill lowering their rate, their marginal rate, because you and I both know they pay 6%, well now you're saying, a little bit, then 6%, 7%, and 7.5 on the amount about $100,000 taxable, for a married couple. You and I know that; it's inside baseball, but we know it. Now, you're taking that marginal rate, from $100,000 to $4 million, and you're bringing that -- basically there is no marginal rate anymore, you're bringing it from 7.75% down to 5.9%. My question is, ...

Enough of the mill in the four million dollar family lived through the senate and I greatly respect for two more basking in this chairman of staff and sacked answers for(SPEAKE CHANGES) one representative from his past I will certainly be provided for you I would just read your age that his mind, but only five from believe that setting a flat rate that everyone pays which does not provide the distance and some four someone to watch the goal from one of the current years for the next year is good cause of the RN missed, and the U.S. are pursuing the peace question I can only say we have we have not looked into the car and so should the income spectrum, with respect to four million sold four various tax analysis are less than 1% of their plan to make some pretty strong assumptions about the most adoptions , most taxpayers to determine what the actual tax liability would be the difference was with a 5.9 on vs. Tia gradually racist we currently have we haven't done that would be happy to do this for you and the fact that we understand this month's end of sales taxes while the net ?? (SPEAKER CHANGES) German list could I get the four million has requested also would present a man approached a 1.250000 an increase in the Marshall rate on income tax and the press and subsequently used a one million copies so, we see what the savings are to those three families to 50,001 million for money you can request a degraded, says that someone know about getting the car fixed and I've got my examiner Dr. Fires hide them well change air filter whole shebang of $400 in parts dollars (SPEAKER CHANGES) cash and Ellen L bailouts of 6.75% intro under my leg of the 7.776 or seven have thanks so well that my constituents, sauté seven & on the question is if they promise charges may $200 in labor law to $7.00 might become a judicial line and pay under your bill gates said $100 labor, chairman of banner year building what they write down the list for the average person was the increase in sales tax from a way that shows that their core fiction harm if they only $56.75 more into shows at six and don't you pay $7.50 to justify what cuts that this is how to sell the plan as this issue and say that people-one race else session of any good twice, and thank you for paying for gas (SPEAKER CHANGES) Madonna and provide business, the point is to have a one this bill raises the sales tax which is a regressive tax this bill reduces the income taxes specially on the wealthy and that he is a progressive tax where reducing the comments in the attached to this mail, we are increasing in the grass in the racing sales taxes on middle class reducing income tax on the wealthy and I am, that popular in mime and patient that must have a chance to question one that the fed was that she change from this change in the sales factor told corporate tax related to a Croatian open the last version of this point, said the city over several years , wondered aloud if we could be a member of the speeding up the corpora direction, that sends following all the different tax proposal should soon to be an underlying assumption that given the strangest at the same people are dead in charge Encarta two and two we can do this thing in steps over several years and the ones that come in another change that's the way we're going in to that that's what my concerns into the woods with raising the base two is defined as many different about this place is, don't do something too many could have a determination raced back up the next session that commanders in charge comes back to where we're doing the heavy lifting for a huge tax package increasing the tax burden in the future, if you ??............

Given any thought to that and any thought to maybe requiring some kind a suit . [SPEAKER CHANGES] Thank you for that representative. Let me hit the first thing that you asked first if I can. When we began this stretch, we were asked to fund roughly 20.5 20.6 20.4 billion dollars worth of state paid expenditures. I wanna make two quick remarks on that. First of all you're point is absolutely correct in terms of this is a phased in over multiple year program. The reason it exist that way is obviously we don't live on an island and we're not starting from scratch. If we could we could decide exactly what services and what level the state would fund. And then based on those decisions that we make starting from scratch we could then decide how much revenue we would need to raise. We don't have that luxury at this time. One point that I Wanna make and I realize we're in finance and not appropriations but I think its very important to make and I don't think it gets made enough. This state, this general assembly has historically chosen to fund more of the services that our constituents are used to on a percentage basis than many many in fact I'd say most other states do. Look at the level of funding that we provide as a state as a percentage in our education system for instance. We get hit and say that we're 48th or 49th in how we fund out schools. Well if you look at what the state part of that is we're about 23rd. The same thing holds true for our roads. And I can go all the way across the board. So what I'm trying to say to you is what this does is propose a gradual step down in the rate. It also slows down the rate of growth of total income to the state. It doesn't reduce it unfortunately but it does slow the rate of growth, the tax growth, from about 4 and half % to about 4%. Is that a great thing? No, I wish it were more, I wish it could be more. But when we were tasked to write this bill, we were tasked to meet the obligations of the state as we understood them. My hope is getting to work with this general assembly and the administration that we can find additional savings in the state budget that can then let us further reduce the burden of taxation on our citizens. In terms of trying to require a super majority or what not to raise taxes or change rates that concept makes sense to me. As you know thought any thing short of putting that in the constitution would really just be a waste of time. Because a subsequent general assembly could choose not to follow that. So what we proposed does slow the rate of growth and its a step towards where I know you want to go and where you fought hard for us to go. It just doesn't get there quite as fast as perhaps you or I would like. [SPEAKER CHANGES] ?? Thanks. Three quick questions. Representative I thought about raising the point of water on representative Lukey. Barks ?? of the sales tax increase here was regressive because as he knows for 8 years as coach here of this committee he led the house to impose an additional 8 billion dollars of sales tax increases. [SPEAKER CHANGES] Mr Chairman may I reply [SPEAKER CHANGES] In a moment. But I didn't raise a point of order, but you opened pandora's box. Secondly ..

I think the phasing is fine, because if a company is thinking of looking here they’re not going to actually start making a profit for one, two or three years so, that induces location here. But thirdly, as I read this bill Representative Lewis, usually a tax reform package is a hodge-podge of compromise, and I looked at this and I thought it was a work of art, and you should be commended. [SPEAKER CHANGES] Thank you Representative Stam, I know Representative Luebke you would like equal time. [SPEAKER CHANGES Thank you Mr. Chairman, I really appreciate it. I just want to note, going back to 1991 that I have only advocated for increases in the progressive income tax. Any time a sales tax has gone up Representative Stam, is because I was out voted in a particular party caucus. Thank you. [SPEAKER CHANGES] And that’s the end of our history lesson right now. Representative Tine. But thank you. [SPEAKER CHANGES] Thank you Mr. Chairman. I have two questions if I can, the first would be on the mortgage write-off. It’s capped at 25,000 my understanding that is based on a mortgage at $400,000 and plus 5,000. Is that right? If I could, my question is, if that’s at current rates, then should we see a significant increase, which is obviously a concern for many people in regards to inflation. That would significantly reduce the amount of interest or the property value that you would be able to take a loan out on. Just wondered if there was any provision that would handle that. [SPEAKER CHANGES] At this time this bill does not contemplate that representative. What it does is, it says that you can, that an individual tax filer can choose to either take the standard exemptions in income or the standard 0% rate up to $12,000, if they’re married filing jointly. Or, they can combine their mortgage interest deductions and their charitable contributions and claim those at 0% rate, for an amount not to exceed 25k. I would certainly be glad in a few years, if we move in this direction, to talk with you about what that number should be. You mentioned an amount of 400,000 obviously many of us represent areas where that is not the average home cost. That was merely an example that I used that it would represent the average amount of mortgage that someone would pay on a $400,000 loan and average charitable contribution of 5k. That not only won’t fit everyone in the state, it won’t fit everyone in this room, but we had to start somewhere. [SPEAKER CHANGES] And I understand that, but as prices go up and if interest rates go up then obviously in five years, ten years you could be looking a significantly different amount of home that you could afford to purchase and still get the deduction. My second question was on the eliminating the personal exemptions the state personal exemptions, we asked staff last night in a discussion and I appreciate you rolling this in phases, is that; what are those personal exemptions at the state level that are being eliminated? [SPEAKER CHANGES] Mr. Chairman that was a direct inquiry and I think I could answer but Mr. Boardman or Mr. Averitt may be able to do so more concisely, if Representative Tine would not mind. [SPEAKER CHANGES] Mr. Boardman. [SPEAKER CHANGES] Thank you. Currently on your return, I’m just going to refer to married filing jointly, you and your spouse would be eligible for a $2,500 exemption per you and your spouse. If you had any dependents, they would also be eligible for 2,500 exemption as well. This bill just eliminates those exemptions, instead has a larger personal exemption or standard deduction and it also increases the child credit, which is currently $100

Heading out to $250. [SPEAKER CHANGES] Thank you. Representative Collins. [SPEAKER CHANGES] Just make a comment, if I could? I did just a little calculating over here, and as Representative Lewis knows, I really appreciate the work you’ve done on this. I’m one of those who’ll actually pay more taxes under this because of the limit on charitable contributions, and yet I applaud this bill and I plan to back it. For a family making $40,000 as was mentioned earlier, the fact that they won’t pay any taxes on the first $12,000 whereas under our system they currently do, will put about $720 back in their pockets. In order for the extra services that they’re going to pay the sales tax on, you have to spend $10,500 just in the services that we’re going to tax them on, which I think would be impossible probably if you’re making $40,000 a year, to balance that out. As far as what people who make a lot of money do with their income, it sounds like some of us think that the best thing they can do with that is turn it over to state or federal governments. The wealthy people I know, what they tend to do with their income is number one, hire people with it into companies that they tend to own. Number two, they tend to invest in other people’s companies with the extra money that they have, and thus spur employment that way and drive economic activity. I don’t know what I would say that state and federal governments are the best drivers of economic activity in our country. I really trust the people that have the money to understand how to do that better than we do in government. Also on a national level, we’ve had presidents in my lifetime from both parties prove that when you lower tax rates, you spur economic activity. President Kennedy proved that in the 1960s, President Reagan proved that in the 1980s. So I applaud you for what you’re doing and plan to support you even though it’s going to cost me a little more out of my pocket. [SPEAKER CHANGES] Thank you Representative Collins. Representative Robert Brawley. [PAUSE] We’re not voting today but thank you. Representative Samuelson. [SPEAKER CHANGES] Thank you Mr. Chairman. Actually, Representative Collins said much of what I was going to say because I’m another one of those who’s going to pay more under this bill. And we’ve had some long discussions about that. So I’ll just go to staff, when you do the comparison that Representative Luebke asked for, would you also do the effective rate for the people making $40,000 a year, once they take advantage of the exemption that Representative Collins mentioned? And then also when you do it for the upper income people, acknowledge the loss of the charitable deduction at the average rate of charitable deduction in those, and I think you’ll find that it won’t be as much of a shift as Representative Luebke has implied, because of the loss of deductions. Thank you. [SPEAKER CHANGES] Thank you. Representative Starnes. [SPEAKER CHANGES] Thank you. I’ve got two questions that’s along the lines of Representative Collins. But either Representative Lewis or staff, has anybody run the numbers to determine how many tax filers would be affected by the $25,000 cap of charitable deductions and mortgage interest? How many people would be caught with the ceiling? [SPEAKER CHANGES] Mr. Chairman, could I ask Dr. Borden to speak to that, and as he’s preparing to do that please understand Representative Starnes and all of the members, everything that we do of course are based on hypothetical models. We can’t get the actual information so he’s going to say that more concisely and probably without stuttering, but I’ll let them say it. [SPEAKER CHANGES] Dr. Borden. [SPEAKER CHANGES] Thank you. On itemized deductions, we’re fairly limited in our data sources that we can look at. When we look at statistics of income from the IRS on North Carolina filers, that data’s aggregated up to fairly high level or combined levels of income. The only thing we can really comment on is we recognize that about a third of all tax returns itemize. Obviously as that income goes up, the level of itemization goes up. 80% of our filers, 80 to 81% of our filers have income, federal adjusted gross income below $75,000. We think that those that will be affected by this cap are likely to be in the upper 19% of that income, and particularly as you move above $250,000. That’s where you’re most likely to see those that will be affected by the cap.

This follow-up that the anomaly that the goal line somewhere and we got them be perceived as to the planned towards the wealthy by we'll give them a try. Initially we have to understand that will allow to charities benefit from wealthy donors and we don't want to take away the incentive for people to give them some, this chairs and assume how many people be calling them about that one other question from ms the support of the wealthy people who got newly formed the states of the state's effort and income tax N many times they accept using the states are the trustees remember will miss on two make some charitable contributions five before the states to 7:00 AM (SPEAKER CHANGES) I'm wondering can we not have a provision that would be a statesman or the income taxes are paid on the state's they could possibly have an unlimited charitable contribution come back and (SPEAKER CHANGES) I have an idea how many states are affecting this that these are wealthy people who don't mind giving money away were they the children of not making large charitable contributions on behalf of your deceased parents that would limit them and a myth that many numbers on the size of the men in the making for us and start about to board a couple of other than the coliseum you think sunlight-like that comments from static-from an Atty. to open the state planning but how the financial and Carlos-seven people that are safe and that the biggest law, the taxation the state of the estate tax itself which if I got was that this a sign that the man is often not income tax enacted, be structured about the backdrop of playing senators state doesn't have a lot of income in the year that the person that is tested by the other guy could be that you can still get it back to a change that and as a study by the less about the plan think it makes them a practice that this bank did they can come back from the state of the few to shoot them the base ump and that in my mind about what about this and set them against an estate tax itself within the republican to the huge tax law states will follow up the MMM I understand that M and I've been in investment that will let the states still have to follow income taxes and then known about the portfolio is a can be a believe you could have been paying stocks you can have bonds you can have preferred stock sense of these states do have to pay income taxes, and we're talking about very large estates numbers could not be very few wrong with me for the states are these days are potential ban or should share these can benefit from that, so the committee as the joy and pleasure being issued a higher than they say, Allen Davis signed agenda think this sector copy of the bill Hollis that we will convene next week, Allison redesigned as that this upturn of them ???................