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House | June 3, 2014 | Committee Room | House Transportation Appropriations

Full MP3 Audio File

If the members would take their seats and the visitors would retire to the gallery. A quorum being present, the house committee on transportation is now in session. Our sergeants at arms today are Reggie Seals, Doug Harris, Mike Clampert, Barry Moore. Our pages today are Anna Cooke from Wayne County, Representative Jay Bell. Please stand up so we know who you are. Okay. Good deal. Yeah, Ry Gibson IV from Wake, Speaker Tillis. Lauren Harding from Sampson, Jay Bell. Anya Honeycutt from Wake. Representative Tillis. And William Johnson from Wake, Representative McNeill. Thank you for being with us today. We’re going to try to move at transportation speed and get through this whole agenda today. Our first bill, House Bill 1025, we have a PCS for that. That’s a compilation of seven bills. Representative Torbett. [SPEAKER CHANGES] Thank you, Mr. Chairman and members of the committee. [SPEAKER CHANGES] We need a motion. Representative Brown, Ryan Brown moves, Representative Rayne Brown seconds that the PCS be before us. Thank you. [SPEAKER CHANGES] Thank you, Mr. Chairman. Members of the committee, if you will follow real quick. This is as the chairman said, a compilation of bills in an effort to save time, they are a result of the joint legislative transportation oversight outcomes that were held during the interim. Bills number reflect ?? 225 1071 1072 1073 1122 1125 and 1126. I’d be more than happy to read descriptions of it, or you can refer to the summary and I’ll defer to any questions, Mr. Chairman. [SPEAKER CHANGES] Is there a desire that the summary be read? Representative Shepherd. [SPEAKER CHANGES] I have an amendment. [SPEAKER CHANGES] We have an amendment. Representative Iler will send forth an amendment. Has it been distributed? [SPEAKER CHANGES] I believe it has been distributed. This amendment is a further bill that we took up in the transportation oversight committee and we pulled it out because we didn’t understand what ramp metering was, apparently. And so what this does is, it’s not authorizing ramp meters, they’re already authorized. That is a meter controlling traffic going onto a busy highway. DOT can already put in ramp meters, already authorized. This just makes it, it describes what it is and it makes it a violation if you run a ramp meter, versus if you run a red light at an intersection. All traffic is moving the same direction. There is no chance basically for a collision. But if someone inadvertently goes on the red thinking it’s still green, they’ll have an infraction. It won’t have insurance points or license points, but charge is a lesser violation than running a red light. That’s what this bill does, or this amendment. [SPEAKER CHANGES] Mr. Chairman. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Speak on the amendment. [SPEAKER CHANGES] Representative Torbett. [SPEAKER CHANGES] Ladies and gentlemen, I support this amendment as Chairman Iler said. This was also an outcome from the joint ?? oversight committee. It just took a little bit more time to I guess dissect and understand, and it is before you in a much better form. [SPEAKER CHANGES] Okay, are there further discussion or further debate on the amendment? Representative Iler moves the bill be amended. So many as favor, say aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Opposed? Okay, we’re back on the main bill. HB 1025. Sir? I’m sorry, Representative Cleveland, I apologize. [SPEAKER CHANGES] It’s already been done. No sense in talking about it. [SPEAKER CHANGES] It was about the amendment? [SPEAKER CHANGES] Yes. [SPEAKER CHANGES] Moving on to this bill. [SPEAKER CHANGES] Thank you Representative Cleveland, I appreciate your patience. Further discussion and further debate on the bill? Representative Shepherd is recognized for a motion. [SPEAKER CHANGES] Thank you, Mr. Chair. I move for a favorable report to PCS 1025, unfavorable to the original bill. [SPEAKER CHANGES] Representative Shepherd moves that HB 1025 PCS as amended be enrolled into a new PCS, favorable to the new PCS. Unfavorable to the previous PCS and the original bill. Seconded by Representative Jeter. All in favor, say aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Opposed? The motion carries. HB 1062 map 21 update rail safety

Overside. Representative Torbett. [SPEAKER CHANGES] I have number 1026. [SPEAKER CHANGES] I apologize. 1026 [SPEAKER CHANGES] Thank you Mr. Chairman, this also is an effort from John legislative transportation oversight. I would give you just a brief synopsis of this, ladies and gentlemen. It complies with the new requirements, federal requirements of moving ahead for progress in the 21st century Act, otherwise known as transportation ?? map 21. It gives NCDOT the enforcement authority required to implement the requirements of map 21. [SPEAKER CHANGES] Okay. Representative Torbett, is this the PCS we are discussing? [SPEAKER CHANGES] Okay, motion by Representative Brian Brown that the PCS be enforced. All in favor, say Aye. Ok, continue your discussion sir. [SPEAKER CHANGES] I have reached the conclusion unless there are questions. [SPEAKER CHANGES] Very good. [SPEAKER CHANGES] Are there any questions relating to the bill? Further discussion further debate, is there a motion? [SPEAKER CHANGES] Representative Arp moves favorable pcs on HB 1026 and favorable to the original bill and this is to the floor. [SPEAKER CHANGES] Alright, so many as favor the motion, say Aye. oppose ??. Motion carries. HB 1028 single license plate renewal sticker [SPEAKER CHANGES] Thank you Mr. Chairman, members to the committee this also is a result of john legislative transport oversight committee and what this does very simply is it improves efficiencies and saves DMV roughly 75025 dollars annually. The statute allows for only one sticker and as you know now, your license tag comes with a sticker on top left and you have to purchase each and every year sticker for the top right . It simply removes the sticker on top left and all the information needed is contained within the single sticker. In administrative ?? currently calls for two thus we need to mandate one sticker in order to remove the authority from administrative co-provision to allow it to be repealed. [SPEAKER CHANGES] Ok. Representative Torbett, have we heard from the DMV licensees, the license plate facilities about this? [SPEAKER CHANGES] We have sir, and there was some concern and the latest discussion I’ve had is that concern has been mediated. [SPEAKER CHANGES] Is there anyone here that represents the DMV contracts center and wishes to comment on this bill? [SPEAKER CHANGES] Tejure Williams representing the LPAs and we are fine with this point, thank you. We are fine. [SPEAKER CHANGES] Thank you Mr. Shepherd. Representative shepherd? Ok, further discussion further debate, representative Starnes? [SPEAKER CHANGES] Will the one sticker show the date, year and the month? [SPEAKER CHANGES] It will contain all the necessary information sir. [SPEAKER CHANGES] Ok. [SPEAKER CHANGES] Any other questions, further discussion or debate. Is there a motion. Representative Faircloth is recognized. Representative Faircloth moves the favorable report on house bill 1028. This will be reported to the floor. Seconded by Representative Caitlin. All in favor say Aye, opposed? Motion carries. [SPEAKER CHANGES] Torbett and Iler, house bill 1029 DMV paper towels DOT FLAP funds. This is a pcs. Representative Torbett moves that the pcs be ?? Seconded by representative Iler, all in favor say Aye. Gentleman, you’re recognized. [SPEAKER CHANGES] Thank you Mr. Chairman, members of the committee, once again the reason for pcs is to compile two bills. House bill 1029, house bill 1123 for those of you who keeping score. Brief information on this which I think is wanted. House 1029 gives the DMV. The authority to convert paper titles to electronic version at the request of a lain holder and to charge a necessary fees for the conversion. Other states charge a fee ranging from 50 cents to 20 dollars. 3 dollar fee would allow for the compensation to the LPAs for servicing cover causing curb at the department, house bill number 1123 would exclude federal lands excess funds from STI.

This program allows the state to pull down federal dollars through a separate prioritization process based on federal requirements similar to the bridge and safety programs. Total amount of money involved is approximately 2.5 million dollars. [SPEAKER CHANGE] Are there any questions regarding the bill? Representative Bumgardner. [SPEAKER CHANGE] Let me get to the button here. Thank you Mr. Chairman. On this the conversion of titles, that is to the request of the lien holder, what if the lessee does not want to do that? They don't have any choice? It's going to be converted to an electronic title and that's it? [SPEAKER CHANGE] Yes that's what the bill authorizes. [SPEAKER CHANGE] That was Giles Perry. Follow up? [SPEAKER CHANGE] I have follow up. So if at a later time the person that say pays the vehicle off, are they going to get charged again to get a paper title? [SPEAKER CHANGE] Mr. Perry. [SPEAKER CHANGE] We will have to get that answer for you. We do not know the answer at this point. [SPEAKER CHANGE] Follow up? [SPEAKER CHANGE] On certain antique vehicles that have paper titles that are very old, that is a valuable piece of paperwork that often has a bang on the value of a vehicle and if you would lose that or it become invalid for whatever reason a lot of people wouldn't like that. I can guarantee it. [SPEAKER CHANGE] Representative Cleveland. [SPEAKER CHANGE] Thank you Mr. Chairman. I'm not sure I completely understand what we're doing here with the electronic titles. If I understand the process presently, if you have a paper title and you have a lien on your vehicle it's annotated on the title and at the time you payoff the debt owed that's on the vehicle it it again annotated on the title. I believe you receive a letter stating there is no longer a lien on that title. I personally like paper titles and I personally don't like the idea if I buy an automobile and whoever I borrow the money from has the prerogative of saying you don't get a paper title, We're going to do this electronically. And now we hear that we don't know if I would have to pay for a paper title or not. I think this bill needs to be looked at a little further before we continue down this road. [SPEAKER CHANGE] Mr. Chairman if I may. [SPEAKER CHANGE] Representative Cleveland before we try to take you down that road, we'll ask the commissioner of the DMV to enlighten us on the bill. [SPEAKER CHANGE] Thank you. I am Kelly Thomas, the commissioner of Motor Vehicles. The reason for the electronic lien and title conversion are for the finance companies that own the titles today. So if they have an electronic, they can move to an electronic title. Those antique owners that own those titles that are worth and are very valuable, we're not recommending that those become electronic. We recommend that those maintain just like they are. The customer will not have to pay for it, but again if the lien company elects to take your hard copy title and make an electronic version, we're charging the lien company 3 dollars. That's about the same amount that they charge you already to create the title. Right now there's no, it's a revenue making for the state. We're not trying to impact the citizens title making capabilities. We want to give the opportunity to take the hard copy titles and make them electronic. It is the customer's choice if you already own the vehicle. If you already own the vehicle and have the title, it's your choice. [SPEAKER CHANGE] Representative Cleveland, do you have a follow up? [SPEAKER CHANGE] For clarity, are you telling me that if I go buy a new vehicle and whoever loans the money for that new vehicle to me, he has the option of having a paper title with the lien recorded on it that I would hold or he would have an electronic title that he would hold. And at the end...

… of the payments, I would be given a paper title? Is that what you’re telling me? [SPEAKER CHANGES] Sir, if you’ll allow me to answer… [SPEAKER CHANGES] The gentleman is recognized. [SPEAKER CHANGES] Thank you, sir. Kelly Thomas. The lean company can offer you either a paper copy title or electronic. For it to be electronic, we’re going to charge three dollars to do it. Basically it will clear out their backlog of hardcopy titles. We estimate as many as three thousand the first year of hardcopy titles will be converted to electronic titles. That would clear out of Bank of America, Federal Pentagon, Credit Union, USAA. All those titles that they’re maintaining hardcopies on today, it would be electronic. When the customer pays off that loan, we will then issue that customer a hardcopy title. [SPEAKER CHANGES] Mr. Chairman, if I may? [SPEAKER CHANGES] Representative Cleveland, did you have a follow-up? Representative Bumgardner. [SPEAKER CHANGES] I had another question for Mr. Thomas. [SPEAKER CHANGES] By all means. [SPEAKER CHANGES] So with respect to older vehicles, which I’m sure at some point some older vehicles are also financed or leased or something else, say a person buys an older car and they get a title, how do they know…? Now we’re going to get into an area where if a person has a paper title, how are they going to know whether there is an electronic title, and how is all that going to work out? I understand about clearing the backlog for some banks, but from a consumer standpoint, from a person buying a vehicle, how’s he going to be sure that the title he’s getting is in fact the title and that somebody else isn’t going to come along and say “Well now we’re got an electronic title, and your title’s no good and my title is good”? You’re just opening… you’re asking for a problem, I think. [SPEAKER CHANGES] Mr. Thomas. [SPEAKER CHANGES] Thank you. Again sir, I think to answer your question, technically there’s no different today in title fraud that you’re discussing, whether it’s electronic fraud or they’re washing titles today, so that’s why a License and Theft inspects every vehicle by a VIN number on more than one site on the vehicle. So we’re not losing any… we’re maintaining accountability better by an electronic title for this capability. It does not eliminate the job that License and Theft does for evaluating VIN numbers on all vehicles, whether it’s an antique vehicle or a trailer. [SPEAKER CHANGES] Representative Bumgardner, is there a follow-up? Further discussion, further debate? [SPEAKER CHANGES] Mr. Chairman? [SPEAKER CHANGES] Representative Starnes. [SPEAKER CHANGES] So I go and I buy a brand new vehicle off the car lot, and I want to finance it for five years, and so the lender agrees to do that. You will issue an electronic title to the lender. At the time that I pay off the car, he will then notify the DMV and the DMV will send me a paper title. Is that correct? [SPEAKER CHANGES] Mr. Thomas? [SPEAKER CHANGES] Yes sir, that is correct. If you want electronic, it will be maintained electronically. We recommend you get a hardcopy title after it’s paid off, but if the vehicle’s currently yours, no further leases or lenders on the vehicle, we recommend it be in your name only. [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] Well currently I think, and I’m not sure because I’ve never borrowed money on a car, but if you finance the car and then you pay it off, then the bank just mails you the title that they have been holding. So now rather than the bank mailing the consumer the title, it will be coming from the DMV because there actually was no paper title before this time? [SPEAKER CHANGES] Mr. Thomas? [SPEAKER CHANGES] Yes, sir. That’s exactly right. We mail you the title. This is not different than what was passed last year, and for us to have an electronic lean capability, that’s provided by a contractor. That is on contract. We will have that physically capable maybe by the end of August. This particular part of that contract allows the state to make three dollars on an electronic title. That was not part of the legislation’s statute last year for the ELT conversion. So again, I can understand how we caused confusion by asking for three dollar revenue in this titling, but it was not part of the statute last year establishing the capability. [SPEAKER CHANGES] Mister Thomas…

Currently if someone finances a car, it’s financed on a paper title. When the lien is paid out, the lien is marked paid on the title and that is shipped to the car owner. If they wanted a title that reflected no lien, they would actually have to pay a fee and apply for a new title, would they not? [SPEAKER CHANGES] Yes sir. You are correct. [SPEAKER CHANGES] And there would be a fee involved in that? I can see the nod from here. [SPEAKER CHANGES] Yes sir, it’s $15. I’m sorry. [SPEAKER CHANGES] Okay thank you. Were there further questions for Mr. Thomas? Further debate on the bill? Is there a motion? Torbett you want to do it? [SPEAKER CHANGES] I’ll make a motion. [SPEAKER CHANGES] Okay Representative Torbett moves that the PCS on HB 1029 be approved favorable to the PCS unfavorable to the original bill with serial referral to finance. All in favor say aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Opposed? I believe the ayes have it. The ayes do have it. House Bill 1086. Representatives Presnell and McNeill. [SPEAKER CHANGES] Welcome to transportation. [SPEAKER CHANGES] Thank you, this bill is no more than just a study for the highway signs as a means of improving so that our residents and the visitors that come to our state are made aware where our state parks and our trails, this does include the mountains-to-sea trail. It’s recommended by the LRC on cultural and natural resources. [SPEAKER CHANGES] Representative Shepherd. Any other discussion or debate? Representative Faircloth. [SPEAKER CHANGES] ?? veterans ?? [SPEAKER CHANGES] Representative Faircloth, would you use microphone please? [SPEAKER CHANGES] Would this also apply to for instance the veterans memorial that was just opened in Gilford County? [SPEAKER CHANGES] No, it’s just for state parks. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Further discussion or debate? Hearing none, Representative Shepherd is recognized for a motion. [SPEAKER CHANGES] Thank you, Mr. Chair. I move for a favorable report for House Bill 1056. Thank you. [SPEAKER CHANGES] Okay, that goes to the floor. So many as favor the motion say aye. Opposed? Motion carries. House Bill 1124 DOT minority business program. Representative Iler. [SPEAKER CHANGES] Thank you, Mr. Chairman. And with a side note, the bills that came out of the joint oversight committee were about 50/50 but for some reason they all got rolled into PCSs with Representative Torbett. So I appreciate the gentleman’s work on all the bills that we had divided up. This is one bill that didn’t quite fit the same profile, but it’s just a very simple adjustment to a time on the DOT minority and women’s business program. And this is a program that is reviewed every five years by DOT and the report came out in mid-May. And the deadline for it to end was going to be August of 2014. This just extends it a year to August 2015 to give DOT time to review the report that came back from their contractor that did the review and develop recommendations for the 2015 session, to come back to the 2015 session. So it’s just an extension to give them more time to review the study and come back to us in 2015. [SPEAKER CHANGES] Representative Arp. [SPEAKER CHANGES] Motion when appropriate. [SPEAKER CHANGES] Thank you. Representative Cleveland. [SPEAKER CHANGES] Thank you Mr. Chairman. Does not the state have a minority owned, woman owned business program that’s supposed to cover all state agencies? [SPEAKER CHANGES] Representative Iler?

We can. [SPEAKER CHANGES] There are other programs that are involved in other state agencies. This statute that’s impacted by this bill addresses the DOT program. [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] My question was, is there legislation that covers all state agencies, and I’ll add to my question, or do we do it by individual agencies? [SPEAKER CHANGES] Mr. Perry. [SPEAKER CHANGES] I believe there’s one other statute that involves other state contracting, and then there’s this statute that addresses DOT. [SPEAKER CHANGES] That’s interesting. Mr. Chairman, can I follow-up the answer? [SPEAKER CHANGES] Yes, Representative Iler. [SPEAKER CHANGES] Just logically it seems as if we’re extending this one per GS13628.4E. We’re extending this one a year and may or may not be extending all the others, so this is specific to DOT. [SPEAKER CHANGES] Representative Bumgardner. [SPEAKER CHANGES] Tell me again why we’re extending this. [SPEAKER CHANGES] The review was done… let’s see. DOT contractor complete and deliver the required five-year report in mid-May. They just need more time to review the review and come back to us with recommendations in 2015. [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] Thank you. So did they ask for another year? [SPEAKER CHANGES] Yes, this is a recommendation of DOT to the Joint Transportation Oversight Committee. [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] I understand that, and at the end of that year… I have a question. At the end of that year, where are we going to go then? What are we going to do then? Are we going to extend it again or are we going to eliminate it or are we going to discuss it? [SPEAKER CHANGES] Apparently they’ll come back to us in the 2015 session. I believe the head of DOT is here to help us with that answer. [SPEAKER CHANGES] It’s actually the Chief Deputy Secretary Nick Tennyson. Mr. Tennyson, welcome. Would you care to weigh in? [SPEAKER CHANGES] I’m Nick Tennyson, Chief Deputy Secretary of NCDOT. The problem is simply that we were not able to have enough time to modify the currently existing program and let the legislature consider it during this brief session, so we will certainly commit – I will commit the department – to having this ready for your review on or before the convening date for the 2015 session, which will give plenty of time to review it in time for this sunset to be avoided. The sunset set for August of 2014 would have required an approval during this session, so we will have it ready for your review in time for the long session. [SPEAKER CHANGES] Representative Bumgardner, do you have a follow-up? [SPEAKER CHANGES] Not right now. [SPEAKER CHANGES] Representative Starnes. [SPEAKER CHANGES] And so how would the state be damaged if it expired this year? [SPEAKER CHANGES] Some of us contracts using federal funds require the existence of a program. For some of our programs which are merely state funds, I believe we could issue contracts without having the program, but candidly, it’s a risk in terms of issuing those contracts and then having them challenged that I don’t think is worth taking given the alternative of just taking an extra few months to go ahead and review it and have the program in place. Certainly the legislature will be in a position to not renew the program at all. We’ll have to make sure we spell out the risks and challenges of making that decision, but in this circumstance, it’s certainly our recommendation that we go ahead and extend this sunset and fully consider that issue during the long session. [SPEAKER CHANGES] Follow-up? [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] Well just to comment, at some point in time we just have to make a decision, do we want these quotas in our DOT contracts, setting aside a certain amount of business for women or minority-owned businesses? I just feel like the public is best served when we get the best price for a project no matter who it comes from. I never have liked the set-asides or the quotas. We’re going to have the same issue next year that we have this year, and you can use your own judgment, but Washington is what it is and if they’re requiring some of these programs to get…

Federal Dollars that issue will still be here. Next year, we just have to make a decision, do we like to program or not like to program. [SPEAKER CHANGES] Alright. Representative Bumgardner. [SPEAKER CHANGES] I’d like to agree with Representative Starnes. He’s exactly right, because the argument that was just put forth that we have ongoing contracts with the federal government and us getting that money depends on having this program. It’s going to be the same thing next year, it’s never gonna end. Either it’s gonna end, or it’s not gonna end and where we are right now, this is a classic example of kicking the can down the road. [SPEAKER CHANGES] Representative Arnold, if you want to comment. [SPEAKER CHANGES] Just a response. I tend to agree with both the gentlemen just spoke. However, I think we have more information to make a more informed decision if we take the time and also do this in the long session and give DOT time to make their recommendations in the 2015 session. Just my 2 cents. [SPEAKER CHANGES] Representative Brown. Rayne Brown. [SPEAKER CHANGES] Thank You Mr. Chairman. If there’s one program I hear a lot of complaints about it’s this and I hear it from folks connected who do contract work with DOT. As a woman, it’s offensive to me and I know that this program is abused, I know there are men who put businesses in their wives’ names and compete unfairly. I’m certainly not gonna vote for this bill today and I urge others not to, as well. Thank You, Mr. Chairman. [SPEAKER CHANGES] Representative Reeves. [SPEAKER CHANGES] Thank You, Mr. Chair. I was just trying to make sure I was understanding what the bill is. I think today, what we’re looking at is that the statute requires that DOT reviews the program in every 5 years. Is that correct? [SPEAKER CHANGES] It’s correct. [SPEAKER CHANGES] I follow. So, all we’re doing today is giving DOT a chance to finish their review which they did not complete by this date. Is that correct? [SPEAKER CHANGES] While they received the review from their contractor and they have not done their review to give us recommendations at this point. They’ve gotta admit ?? [SPEAKER CHANGES] Right, so we’re just trying to wait for them to give us their recommendations. It’s really not about the merits of the bill today? [SPEAKER CHANGES] Correct. Not cutting it off before we have full information. [SPEAKER CHANGES] About the program. Alright, Thank You. [SPEAKER CHANGES] Representative Blackwell. ?? for Representative Rayne Brown. [SPEAKER CHANGES] Excuse Me. Thank You, Mr. Chair. But with this vote we are extending it an extra year. Is that correct? [SPEAKER CHANGES] Correct. [SPEAKER CHANGES] Thank You. [SPEAKER CHANGES] Representative Josh Dobson. [SPEAKER CHANGES] Thank You, Mr. Chairman. Just a quick comment. I agree with Representative Iler on this. I think that it wouldn’t be unreasonable to give DOT a little bit more time on this and extended it for a period of time and if it’s not done then I’ll be the first one to address it at that point. But I don’t think it’s unreasonable to put this until 2015 and then let’s address it in the end than just at this time. [SPEAKER CHANGES] Okay. Representative Tennyson did you want to comment on the debate so far. [SPEAKER CHANGES] Guess it’s two promotions I’ve got in one day. I’m Nick Tennyson, chief deputy secretary of the DOT. I just want to respond to the question what is being said. This not a setting of quotas or set-asides. This program sets targets. Whether or not that’s a target that we achieve is a matter of some concern on our part from time to time but it is not a set-aside program and the second aspect of this is the extensional requesting is to august of 2015 because that was a simple addition of a year. A shorter time certainly would be, in my view, satisfactory to the department if we don’t wanna go a year but in any case, the extension from August of 2014 to whenever it expires, not a year from today or a year, for the bill. [SPEAKER CHANGES] Representative Blackwell. [SPEAKER CHANGES] I have a question for Mr. Tennyson. Help me understand, may be you said this and I didn’t grasp it. Let’s say we don’t pass this bill and this section which provides for this program will expire August 31, 2014. If the program goes away August 31st, 2014, what is the financial impact, if any, on the department and the state?

Mr. Tennyson is recognized. [SPEAKER CHANGE] Thank you. The answer is that I can’t tell you, I am not certain what the impact would be, it’s a matter of what the risk would be. In other words, for those contracts that are not covered by the federal funding, they’re state funding only, we would be engaged in trying to determine whether the courts would ultimately rule that we are required to have such a program. There’s been a long history of making such a requirement, I can’t speculate on the likelihood of someone who brought a suit prevailing or not prevailing if we don’t actually have the program in place. [SPEAKER CHANGE] Follow up? [SPEAKER CHANGE] Please. The source of the requirement for state funded programs to be in place that would be the subject of litigation, what’s in general the argument, maybe this is for staff, Giles or somebody. Why does the state funded project have to have one of these programs in place? [SPEAKER CHANGE] Mr. Tennyson. [SPEAKER CHANGE] Okay, Giles. [SPEAKER CHANGE] The legislature determined that that was a policy choice that they made when they enacted the state contract related policy on minority and women businesses so it’s a decision of the general assembly on those contracts. [SPEAKER CHANGE] Follow up. But with respect to federal transportation dollars, are we contractually bound to have programs like this in place with respect to dollars that we are already receiving, projects that are underway, or commitments were made on? [SPEAKER CHANGE] Mr. Tennyson. [SPEAKER CHANGE] My answer would be I do not believe that we are required to have a state program in place. We are required to follow the federal program for those programs that involve federal funds. [SPEAKER CHANGE] So the federal program will continue regardless of what we would do on this? This will only affect discontinuation of state programs that are only required if the state chooses to require it? [SPEAKER CHANGE] Mr. Perry. [SPEAKER CHANGE] Yes I believe federal law would continue to require a program of this type for federally funded contracts. For other contracts that’s a decision of the general assembly, whether or not it should be state policy to do that. [SPEAKER CHANGE] Mr. Perry so this bill will extend the state requirement from minority and women owned business goals, is that correct?? [SPEAKER CHANGE] This bill extends the existing program which affects all DOT contracts ??? funded for one year. [SPEAKER CHANGE] Representative Shepard. [SPEAKER CHANGE] Mr. Chair I just had a matter correction from Mr. Tennyson. Just a light moment here, being a representative is not a promotion Mr. Tennyson. [SPEAKER CHANGE] I don’t think that requires a response. Representative Rayne Brown. [SPEAKER CHANGE] Thank you Mr. Chairman. I just had a question for Mr. Tennyson please. When those contracts were let was it not with an understanding that this problem could come to an end in August? I just don’t understand your point about the need to carry that forward. Thank you. [SPEAKER CHANGE] Mr. Tennyson. [SPEAKER CHANGE] I apologize if I’ve confused the issue, it is not as to contracts that were let, it is as to contracts that would be let after the program lapsed. In other words if we let a contract or advertise for a contract in September and didn’t have those requirements there may be someone who finds that a cause to litigate. That is speculation as to the question of whether or not such a requirement is a matter of court findings or the legal record. I’m trying to explain to you why I don’t have any way to actually state firmly either that it will or will not have an impact because ultimately it would be a matter of what was decided by those who were in the market. [SPEAKER CHANGE] Follow up? [SPEAKER CHANGE] Representative Jeter. [SPEAKER CHANGE] Thank you Mr. Chairman. My concern and I understand Representative Rayne Brown, Representative Bumgardner, and others’ concerns and I don’t necessarily disagree with their concerns. In the transportation side of things if we do not have..

A program it sounds like to me, we run a risk of losing Federal dollars for transportation projects in the future. I mean there are certain, I mean I understand that he is hedging his bets, Mr. Tennison, in the back. The reality is, if, if there are joint projects between the Federal and the State and the Federal government has a requirement, and we don't have a State component that, that matches that requirement, we will not be eligible for those Federal dollars. That's the reality of the situation. Now if wanna have a cognizant of discussion about this going forward, I think that's fine and I think this bill allows that. I'd also remind us that this bill still has to go to full Appropriations. So there's a lot of discussion to be had, that we can still have moving forward. [SPEAKER CHANGES] Representative Bumgardner [SPEAKER CHANGES] Waive off. Representative Pittman. [SPEAKER CHANGES] Thank you Mr. Chairman, I understand this is to be sent on to Appropriations so if it be appropriate at this time, in light of what discussion we had here and what Representative Jeter just said I would like to move that we report this, send it on to appropriations without prejudice. [SPEAKER CHANGES] Okay, at the appropriate time you'll be recognized. Is there further discussion, further debate? Representative Pittman is recognized. [SPEAKER CHANGES] Yes, sir, I'd like to move that we send House Bill 1124 on to Appropriations without prejudice, reported without prejudice. [SPEAKER CHANGES] Report without prejudice or not a favorable report? [SPEAKER CHANGES] Well there's three kinds. You can either be favorable, unfavorable or without prejudice where we're taking no position on it. We'll just send it on to them, let 'em take care of it. [SPEAKER CHANGES] Okay. All right, the motion by Representative Pittman is that HB1120 be given a report without prejudice with a serial referral to Appropriations. Is there a second to that motion? [PAUSE] By Representative Cleveland. All in favor of the motion, say ,"Aye" [SPEAKER CHANGES] Mr. Chair [SPEAKER CHANGES] Yes. [SPEAKER CHANGES] Mr. Chair. To your left. [SPEAKER CHANGES] Yes, sir. [SPEAKER CHANGES] May I comment on this motion, please? [SPEAKER CHANGES] Yes, sir. [SPEAKER CHANGES] Thank you, sir. I believe Representative Bumgardner was the one who talked about "kicking the can down the road" a little earlier. This is the ultimate kick of the can and we're shirking our duty if we pass this motion. [SPEAKER CHANGES] I think the gentleman may be asking the Chair if this motion fails, would a motion to give it a favorable report be in order? [SPEAKER CHANGES] That's a pursuant question, yes sir. [SPEAKER CHANGES] Yeah, the answer's yes. It would be. [SPEAKER CHANGES] All right, the motion is to give a report with no opinion, serial referral to Appropriations. All in favor say, "Aye". [SPEAKER CHANGES] AYE [SPEAKER CHANGES] Opposed, "No". [SPEAKER CHANGES] NO [SPEAKER CHANGES] Motion fails. Is there a motion? Representative Wilkins is recognized for a motion. [SPEAKER CHANGES] Thank you, Mr. Chair. And I would make the motion that this bill be given a favorable report and advanced to Appropriations. [SPEAKER CHANGES] Representative Wilkins moves HB1124 be given a favorable report and serial referral to Approprations. Further discussion, further debate? Seconded by Representative Rodney Moore, Representative Faircloth for a comment? [SPEAKER CHANGES] Yes, Mr. Chairman. Despite what our feelings might be personally about this particular situation I don't think we've had a relevant enough discussion from a legal standpoint to know exactly where we stand on this. And I would think the safe approach for us to take would be to find favorable report, move it on to the next committee so there will be time to satisfy all of us legally as to what the situation is. [SPEAKER CHANGES] So any in favor the motion say, "Aye." [SPEAKER CHANGES] AYE. [SPEAKER CHANGES] Opposed? [SPEAKER CHANGES] NO. [SPEAKER CHANGES] Motion carries. We did have a bill that did not make the agenda. It has been distributed. Service of Hearing order for MV dealer licensee Representative Torbett. If I'm gonna take a minute for people to review it. If there's an objection to adding that bill to the agenda today, we will not. It has not been passed out? [??] It hadn't been passed out. We won't have time. All right, we're adjourned. [SPEAKER CHANGES]