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Senate | February 11, 2015 | Chamber | Senate Session

Full MP3 Audio File

The Senate will come to order. The sergeant at arms will close the doors. Members, if you'll make your way to your seats. Members and guests in the gallery, please silent all electronic devices, and we're going to do obviously something a little bit different today, so if members will make their way to their seats and get ready for the picture. For those of you who are new to this, we're going to do a panoramic photo here and our photographer will explain to you the process and the age of his machine and all that kind of stuff, but make your way to your seats and we'll get ready for your photograph. [SPEAKER CHANGES] Hello, I'm Doug Chadwick here, let's see, we're going to need to have to have a lot of people move well to, I really don't want anybody in front of the doors. I want people standing at the white wall to my right of the doors on both sides, you need to move toward the corner of the room. The people standing in the back on the sides of the room need to move towards the center of the building quite a distance. Sorry, I didn't see that happening. Just keep moving down. Everyone, keep moving down. We'll be able to see you back there quite well, and the members you might want to, particularly in the nearer two quadrants you might want to arrange the papers on your desks so that they look like you're working but not too cluttered. It's, yeah, we really need everybody against the wall standing, keep moving toward the back of the room. Both sides. Folks over on my right here, we need to move that way again. Yeah. As you can tell this is an old camera, designed around the turn of the 20th century. This one was built in 1920, made by a division of Kodak. It's gonna take it about two minutes to make a complete sweep. You're only in the picture for about a half a second, but you need to hold still because it's hard to tell exactly what half second during the time that the light on the camera's blinding you is the actual half second of the exposure. If the people over there on my left, if you could just sort of move back against the wall. The further back here the more chance I'm gonna have of you being in focus and recognizable, and everybody over there has done that. Okay, and after I take the picture with the large old camera, I'm gonna take it down and do a backup with the little modern digital camera and I'll just select whichever looks better. Okay. Is everybody ready? Okay. Looks good. Everything looks good. I think usually most members fold their hands on their desks. Obviously some people go off of the side so you can't do that as easily. It does that for a few seconds but it seems to have settled down. Okay, everybody look this way, give us a smile. Hold still and we're rolling. The negative is gonna be 10 inches high and about 4 feet long. I make the prints in my own darkroom. I just put the paper in contact with the negative, so there isn't a second optical step. It's the original way of photographic print making. Enlargers came later. Oh, and sometimes people ask whether photographs from previous sessions are available. Yes they are. You can just sort of order them as part of the regular order process. Getting to the center here, Lieutenant Governor. Okay, looks good. And you'll be getting order forms about ordering prints in a couple weeks when I have sample prints. Looks good.

I'd better not jump around and vote either. I'm a little too close to the tripod for any clowning around to get you smiling. Almost done here. Okay. Okay, hold still where you are. I'll be ready to shoot the backup in just a minute here. Okay, pass it [??] I had to look here. [??] Okay. Okay, no, I don't think we really [??] . Okay, okay, from the 19th century to the 21st century here, the flyball governor in that camera was designed by Nicholas Watts for the steam engines, so it's very much 19th century, or was that 18th century technology. Anyway, okay. This looks good. [??] Yup. Okay, that looks good. Look this way. Give us a smile. Looks good. Look this way. Look this way. Looks good. In the center now. Okay, thank you very much. [Applause] [SPEAKER CHANGES] I found Jamie's note. It says Jamie was here. Figures. [SPEAKER CHANGES] I'm still seeing spots. [SPEAKER CHANGES] Yup. [SPEAKER CHANGES] [??] takes a picture with that old camera, at least he used to cause he doesn't use it anymore. [SPEAKER CHANGES] You ready, sir? [SPEAKER CHANGES] The Senate will return to order. Leading the Senate in prayer is the Reverand Peter Milner, Senate Chaplain. All members and guests in the gallery will please stand. [SPEAKER CHANGES] Let us bow our heads in prayer. Our Father who art in heaven, we come before you because you are our Father. You are living and you are active here in this place, and Lord, you're not ignorant of our prayers for a thought is on our mind, you know them according to Psalm 139. We lift up the families of the victims of the shooting in Chapel Hill. I know it was shocking to me, and I'm sure it was shocking to others in this room, but Lord, you know what we need before we bring it before you. We thank you for knowing our needs. We thank you we can come to a place where can satisfy us. We come before you, then, so that we might be spurred on to seeking you. We need your vision Lord, not our own. We come before you as real people in the need of your real guidance and your real presence here today. Stir our hearts to follow in your footsteps. In Jesus name we pray. Amen.

Senator Berger is recognized for a motion. [SPEAKER CHANGES] Thank you, mister President. The journal of Tuesday, February 10, 2016 has been examined and is found to be correct. I move that we dispense with the reading of the journal and that it stand approved as written. [SPEAKER CHANGES] Without objection, the journal for February 10 stands approved as written. Senators, our nurse of the day today is Pamela Harris of Raleigh. Nurse Harris, please stand and be recognized. Thank you for serving the Senate. Do we have any reports of standing committees? [SPEAKER CHANGES] Mister President? [SPEAKER CHANGES] Senator Rabon, for what purpose do you rise? [SPEAKER CHANGES] Send forth a committee report. [SPEAKER CHANGES] Senator Rabon, you can send forward your report. The clerk will read. [SPEAKER CHANGES] Senator Rabon, finance committee, submits for passing. Senate bill 15, unfavorable as to the bill, but favorable as to committee substitute bill titled an act to make changes to the unemployment insurance laws as recommended by the joint legislative oversight committee unemployment insurance. [SPEAKER CHANGES] Senate bill 15, calendar. Any other reports of standing committees? Senators, upon the motion of Senator Brock of Davis county, the chair is happy to extend courtesies of the gallery to Mayor Darrell Hinnant of Kannapolis and Annette Keller, director of communications. If you're with us in the gallery, please stand and be recognized. Thank you for joining us. Senators, we're gonna move right into our calendar for the day. We have one bill on our calendar. It's a public bill. Second reading roll call. [SPEAKER CHANGES] Mister president. [SPEAKER CHANGES] Senator Rucho, for what purpose do you rise? [SPEAKER CHANGES] To speak on the bill. [SPEAKER CHANGES] Senator Rucho, we got to read it in first. We'll be with you in just one second. So Senate bill 20, clerk will read. [SPEAKER CHANGES] Senate bill 20. IRC update, IRC update, motorfield tax change. [SPEAKER CHANGES] Senator Rucho is recognized to speak to the bill. [SPEAKER CHANGES] Thank you mister President and members of the Senate. This bill is composed of two parts. One is the IRC update and the other is the issue of the gas tax and the stability of, of DOT. Both of which are time sensitive, and that being said it's critical that the, the Senate pass it over to the House so that we can go ahead and move these forward in an expedient manner. We had a very good discussion in finance on this bill dealing with the IRC, and just as a little bit of background, internal revenue code. They tend to make decisions in Washington and the Congress there at the very end of the year which puts a lot of pressure on state legislators in trying to decide how to manage these specific tax changes that they have put forward. The other advantage that Washington has is they tend to print money over there and we need to live within our means, so those are some of the criteria as to how and why we made certain decisions. Members of the Senate, if you, I'm gonna go through point by point on these, but as, as we would say, there's about a $73 million reduction in the availability for this fiscal year's budget. If indeed we choose to couple or conform with these IRC changes. So I would urge you that that's part of the decision process that the finance committee and both revenue laws and finance made a decision as to how to go on this issue. First section dealing with the 179 expensing limits, we have decided to decouple from that change. It would cost about $52 million in availability. It doesn't prevent the businesses from being able to take advantage of the savings. It just allows it to be done over a five year period of time. The other bill, and again, every one of these that we've

Decoupled we have decoupled in a previous fiscal year, so there is some consistency to what we're trying to do. The second one is deduction of tuition expenses and that is roughly $1 million. There are some extenuating circumstances with that one, if indeed the internal revenue code is followed that would require us if we're going to treat all taxpayers the same to establish a deduction and a tax credit and rather than the million dollars if it was strictly the deduction it would actually potentially cost $25 million if it actually went to a tax credit, so it's a lot more complicated than it might seem, but the best way to go is to decouple on that one. Exclusion on income for cancellation of debt on a principal residence. In the past we have decoupled from this. In a period of time where the majority of residence would have fallen into this is changing and the numbers are I'm sure significantly reduced. The potential cost would be about $14 million, and so we ask that you decouple from that particular provision. Deduction of mortgage insurance premiums. In the past we've decoupled it and we would urge that you do the same. Tax free distribution from IRAs to public charities, it would be $1 million and we ask that you decouple from that one. The one that we feel we would like to conform with and we have in the past is a deduction for up to $250 for teacher's classroom expenses, and that would be about $1 million, so in essence the availability which for this year, fiscal year, would be reduced by $1 million of the budget numbers that we experienced. There's an excess of $2.1 million, so that would not be an issue to be concerned with in regard to our budget. Mr. President, I would stand to any questions and then once we finish this portion, Senator Rabin will explain the gas tax. [SPEAKER CHANGES] Do you have any questions for the Senator or any discussion or debate? [SPEAKER CHANGES] Mr. President. [SPEAKER CHANGES] Senator Rabin for what purpose do you rise? [SPEAKER CHANGES] To speak on the bill please. [SPEAKER CHANGES] Senator Rabin has the floor to speak to the bill. [SPEAKER CHANGES] Thank you Mr. President, members, the second part of the bill is the motor fuels tax changes. What this part of the bill does is it immediately reduces the motor fuels tax by 2.5 cents from its present day 37.5 cents to 35 cents. It resets the date that we set the gas tax. Currently it is being done twice a year. This bill would set the gas tax once a year on January 1. The other thing this bill does is it changes the formula by which we set this tax. It would take a 17.5 cent fixed rate, which we have now, and it will add a 17.5 cent rate or a 9.9% of the average motor fuels tax over the preceding period to create a floor of 35 cents and basically that is the bill. Now, just to let you know what this bill does in every day common speak, it cuts, it freezes and it stabilizes a very volatile tax. 70% of the money that we receive for the Highway Fund in this state comes from the motor fuels tax. This is an up and down, up and down situation and as you have seen the volatility and the problems that have happened worldwide with the recent oil drop, those problems are being felt in the state of North Carolina. This is something that we need to do and I would certainly appreciate your support and I'll entertain any questions that you have about it. [SPEAKER CHANGES] Thank you very much. Do you have any questions for Senator Rabin? Any discussion or debate? Yes, Senator, hold on, Senator. Senator Ford, you had your light on first, I believe. Senator Ford, for what purpose do you rise? [SPEAKER CHANGES] To speak to the bill. [SPEAKER CHANGES] Senator Ford has the floor to speak to the bill. [SPEAKER CHANGES] Thank you, Mr. President. Ladies and gentlemen of the Senate, one of the few things that congress got right last year was the passage of the tax increase prevention act of 2014. On December

2014 President Obama signed into law Congress' Tax Increase Prevention act. The law extended more than 50 tax provisions that expired on December 31, 2013. In this federal legislation there is tax relief for teachers, homeowners, businesses and students. We have, North Carolina, the option of tax conformity, including decoupling options. I believe that we should provide the same tax relief to millions of North Carolina taxpayers and put more money back into the pockets come tax day in April. I would encourage you to rectify a change in North Carolina's income tax laws that I think is particularly harsh and unfair. The change occurred in 2013 but will be reinstituted in 2015 if the IRC bill recommended by Senator Rucho is enacted without change. The IRC update bill recommended by Senator Rucho continues a decoupling that began in 2013 with respect to excluding forgiven debt on a principal residence. Under Federal law when an individual sells his or her house for what is less than what is owed on the house, in a short sale, for example, in lieu of a foreclosure, the mortgage holder forgives the amount of the debt that remains. The unfortunate homeowner is not required to recognize as income the amount of debt that was forgiven and pay tax on that amount. Federal law excludes the forgiven debt from gross income. North Carolina, however, requires this unfortunate homeowner to recognize the forgiven debt as income and pay tax on it. North Carolina started doing this in 2013 by decoupling from the Federal exclusion and we'll do it again this year if the bill recommended by Senator Rucho is not amended to conform to the Federal exclusion. North Carolina is one of the few states in the US that recognizes this forgiven debt to be recognized as income. If North Carolina does not conform to the exclusion, we will treat our residents worse than they are being treated by the IRS. We will also impose a heavy tax burned on those least able to pay, those who have lost their houses and are trying to rebuild their lives. Not conforming to the Federal law on this amounts to kicking a person when they're down. This does not comport with North Carolina values. Mr. President, to correct this problem, I'd like to amend the bill. [SPEAKER CHANGES] Senator you can send forward your amendment. The clerk will read. [SPEAKER CHANGES] Senator Ford moves to amend the bill. [SPEAKER CHANGES] Senator Ford is recognized to speak to the amendment. [SPEAKER CHANGES] Thank you, Mr. President. Ladies and gentlemen of the Senate, this is a simple amendment. What I'm looking to do here is to amend the IRC update bill here to conform with the Federal exclusion and make conforming with Federal law retroactive to 2013. The bill would delete some lines on page 3, line 23 to 26 which is the provision that decouples from the Federal mortgage debt forgiveness income exclusion. By deleting this provision, North Carolina would conform. I commend the amendment to you. [SPEAKER CHANGES] Do we have any discussion or debate? Senator Apodaca, for what purpose do you rise? [SPEAKER CHANGES] I need to send forward a substitute amendment please. [SPEAKER CHANGES] Senator, you can send forward your substitute amendment. The clerk will read. [SPEAKER CHANGES] Senator Apodaca moves to amend the bill. [SPEAKER CHANGES] Senator Apodaca is recognized to speak to the substitute amendment. [SPEAKER CHANGES] Thank you, Mr. President, members. In reviewing the bill, I'd like to call your attention to page 3 line 48. In that we refer to a general statute as incorrect and this makes the correction of that general statue. I ask for your support. [SPEAKER CHANGES] Is there any discussion or debate? Hearing none. [SPEAKER CHANGES] Mr. President? [SPEAKER CHANGES] Senator Stein for what purpose do you rise? [SPEAKER CHANGES] To debate the substitute amendment. [SPEAKER CHANGES] Senator Stein has the floor to speak to the substitute amendment. [SPEAKER CHANGES] This is clearly a procedural trick to prevent us from helping some 3500-4000 North Carolina families but more than that the neighborhoods in which those houses are located

We are making it harder on North Carolina communities if we vote for this amendment to get out from underneath the crisis that happened from the mortgage foreclosure problem. I ask you to vote down this amendment so we can vote in favor of Senator Ford's excellent amendment which is going to help North Carolina in a meaningful fashion. [SPEAKER CHANGES] Any further discussion or debate? Hearing none, the question before the Senate is the adoption of amendment 2, all in favor will vote aye, opposed will vote no. Five seconds will be allowed for the voting. The clerk will record the vote. [SPEAKER CHANGES] Smith-Ingram, Waddell, yes or no, no, Smith-Ingram, Waddell, no. 34 having voted in the affirmative and 16 in the negative amendment 2 is adopted, amendment 1 does not pass. The bill as amended is back before the body. Is there any further discussion or debate. Senator Van Dyne, for what purpose do you rise? [SPEAKER CHANGES] To amend the bill. [SPEAKER CHANGES] Senator Van Dyne you can send forward your amendment. Do we have a, thank you. The clerk will read. [SPEAKER CHANGES] Senator Van Dyne moves to amend the bill. [SPEAKER CHANGES] Senator Van Dyne is recognized to speak to the amendment. [SPEAKER CHANGES] The purpose of the amendment is simple. It reinstates the tax deduction for tuition. Please consider, 60% of jobs in this state will require some form of training, certification or a degree beyond a high school diploma. Increasingly an Associate or a Bachelor's degree is the only pathway to the middle class, yet our policy choices are making it more difficult for students to attend and complete their programs and thus be successful in the labor market. Some facts, since 2008 average tuition and fees for the UNC system have increased around 40% while state funding for full time equivalent students has decreased by 15%. Since 2009, in state community college tuition has increased more than 70%. Additional funding for UNC need based funding has not increased in recent years and students are leaving college with growing amounts of student debt. The $1 million cost of keeping this deduction is minimal relative to the return that could be gained for the state if North Carolinian families could afford to send their children to college. I urge you to support this amendment. [SPEAKER CHANGES] Any discussion or debate? Senator Apodaca, for what purpose do you rise? [SPEAKER CHANGES] Senator Apodaca has the floor for a motion. [SPEAKER CHANGES] Mr. President, I move that Amendment 3 be laid upon the table. [SPEAKER CHANGES] Senator Apodaca moves that Amendment 3 [SPEAKER CHANGES] Mr. President, second. [SPEAKER CHANGES] Senator Brock seconds it. This is a non-debatable motion, it will go straight to a vote. The question before the Senate is the motion to table Amendment 3. All in favor will vote aye, opposed will vote no. Five seconds will be allowed for the vote and the clerk will record the vote. 33 having voted in the affirmative and 17 in the negative, the table motion is successful. Amendment 3 is tabled. The bill as amended is back before the body. Any discussion or debate? Senator Tucker, for what purpose do you rise? [SPEAKER CHANGES] To speak to the bill. [SPEAKER CHANGES] Senator Tucker has the floor to speak to the bill. [SPEAKER CHANGES] Certainly, Mr. President and members of the Senate, every bill that comes before us doesn't have everything we like or want, but in this case I realize that I couldn't justify to my constituents if I voted against a tax cut for all driver, if I voted against a tax deduction for teachers and if I voted against a gas tax forward and stabilization of the system, the transportation system, so that projects in my district would not be canceled, so therefore I stand in support of this bill. Thank you, Mr. President. [SPEAKER CHANGES] Senator Lee, for what purpose do you rise? [SPEAKER CHANGES] To speak on the bill. [SPEAKER CHANGES] Senator Lee has the floor to speak on the bill. [SPEAKER CHANGES] Being a former Board of Transportation member, I appreciate the technical aspects of the bill

Senator Rabin, but as we move into Spring Break, families like mine with four children are going to pile into a car and go on vacation, and this gives folks like myself and my family and other families in my district and across the state an immediate tax cut as we go into Spring Break at the end of March or the beginning of April. On the flip side of that, again, being on the board, I understand the importance of having a stable source of revenue for our infrastructure when we’re talking about maintenance and new projects. We stand in my district to lose some significant projects if we don’t pass this bill, and also, as we’re – my wife and I – are driving on Spring Break, we can know we’re going over those bridges and on those roads knowing we did not cut almost 800 million dollars over the next period of years from our transportation budget. I’m new here and I just can’t really see going back to my district, telling them that I sat idly by while I let these projects be cut. Thank you. [SPEAKER CHANGES] Thank you, Senator. Any further discussion or debate? Senator Clark, for what purpose do you rise? [SPEAKER CHANGES] Ask Senator Rabin to yield for a question. [SPEAKER CHANGES] Senator Rabin, do you yield? [SPEAKER CHANGES] I yield. [SPEAKER CHANGES] Senator Clark, you have the floor. [SPEAKER CHANGES] I am a little confused about Senate Bill 20, whether it represents a tax cut or tax increase, so I just have a few questions. Under our current law, in July what would the motor fuels tax rate go to? [SPEAKER CHANGES] I’m getting that written down so I can hear it. Give me a second. [SPEAKER CHANGES] Senator Rabin, if you’ll just speak in your microphone. Thank you. [SPEAKER CHANGES] Thank you, yes. Senator Harrington’s writing that down, so I will tell you. Or do you want an estimate right now? I will tell you that the current tax is 37.5 cents. It will be 35 cents. How low will it go or how high will it go? I cannot tell you because we don’t have a crystal ball, and if I’d had a crystal ball and had known what petroleum prices were going to do, you can believe that I would stand before you a wealthy man today because I would have been buying puts in the petroleum industry like you had never seen before. I will tell you that we’re expecting it in the short term to fall, but we’re expecting it to rise again. But if we take the forecast from August of 2014, the certified budget and the certified revenue forecast would be August 2013, 27 cents for 2015, 38.1 cents for 2016, and so that is the biennium. That’s the time in which we operate, and that’s what it would have been according to that forecast. [SPEAKER CHANGES] Thank you, Senator. Senator, do you have a follow-up question? [SPEAKER CHANGES] Not at the moment. I’d like to speak to the bill. [SPEAKER CHANGES] Senator Clark, you have the floor to speak to the bill. [SPEAKER CHANGES] Senator Rabin has said very succinctly – initially, until he continued on – that under our current law, the motor fuels tax is going to go to 30 cents per gallon in July, but under this bill as they’re proposing it, we’re going to get a tax cut down to 35. Wait. That’s not a tax cut, is it? I mean we’re going to get a tax increase up to 35 cents a gallon in July, then we’re going to set a floor at that tax increase of 35 cents a gallon. Why don’t we just under our current law let it drop to 30 cents a gallon as it is and set the tax floor at 30 cents a gallon? I think most of my constituents would call that a motor fuels tax cut. I think what they’re seeing under this bill as is likely to be passed today is a motor fuels tax increase. I ask Senator Brown to yield for a question. [SPEAKER CHANGES] Senator Brown, do you yield? [SPEAKER CHANGES] I will. [SPEAKER CHANGES] Excuse me, I mean Senator Rabin. Sorry. [SPEAKER CHANGES] Senator Rabin, do you yield for a question? Senator Rabin, do you yield for a question? [SPEAKER CHANGES] I yield. [SPEAKER CHANGES] Senator Rabin, under our current law, the motor fuels tax is 37 cents a gallon. Under the law as you’re proposing, it would go down to 35 cents a gallon. Now we know if we didn’t do anything, in July it’s going back down to 30 cents a gallon, so how long is it going to be? So effectively you’re dropping it from 37 to 35, and it will be at 35

It will be at 35 for four months – that is until July, but because you’re going to change the law, instead of it going down to 30, you’re going to keep it at the 35 and pass that on and make the folks of North Carolina think that we’re getting a tax cut. We’re not getting a tax cut. I’d like to continue speaking. [SPEAKER CHANGES] Was that a question, Senator? Senator Clark, I need to be able to control the meeting, so if you’ll address all questions to me, and then I’ll ask the Senator, and if you want to speak to the bill, I’ll let you speak to the bill as well, but we’re kind of confusing those things, so if you have a question please ask the question, and if you want to speak to the bill, I’ll give you time to speak to the bill too. We started the question, so let’s finish there, and then we’ll go back to speaking. Thank you. [SPEAKER CHANGES] Does that mean you want me to ask the question? [SPEAKER CHANGES] You can ask the question now. Senator Rabin, do you yield for the question? [SPEAKER CHANGES] I yield. [SPEAKER CHANGES] It’s your floor for the question, Senator. [SPEAKER CHANGES] The question… Under the law as proposed in Senate Bill 20, if we look at each year, we will see a tax increase in the motor fuels tax relative to what the current law is, during 2016, during 2017, during 2018 and during 2019. If we leave the law as it is, those increases that are just called out, will they constitute a tax increase or a tax decrease relative to what would happen with the law as it is today? [SPEAKER CHANGES] Senator Rabin, you have the floor. [SPEAKER CHANGES] Thank you, and thank you, Senator Clark. It’s a bit of a convoluted question, but I will answer it in a convoluted way, and I will start by saying that Cumberland and Hoke County are both going to lose 98 miles in resurfacing, 17 miles in resurfacing, 24 miles and 19 miles in pavement preservation, adding up to millions of dollars, and that’s your home district. This is not really about semantics. This is a two and a half cent tax cut, period. Now if I could predict and answer your question in an un-convoluted way, I would probably be the weather man on Channel 5, and you’d better walk outside to see if it’s raining if he says it is. I cannot make those predictions. [SPEAKER CHANGES] Senator Clark, for what purpose do you rise? [SPEAKER CHANGES] I’d like to speak to the bill. [SPEAKER CHANGES] To speak to the bill? Senator Clark, you have the floor to speak to the bill a second time. [SPEAKER CHANGES] Senator Rabin can’t answer the convoluted question, so I’ll put forward an answer in a very clear and concise way. Hope you don’t mind the help, Senator Rabin. [SPEAKER CHANGES] Mr. President? [SPEAKER CHANGES] Senator Rucho, for what purpose do you rise? [SPEAKER CHANGES] Would Senator Clark yield to a question? [SPEAKER CHANGES] Senator Clark, do you yield? [SPEAKER CHANGES] I would yield after I’ve put forth a very succinct response to - [SPEAKER CHANGES] Senator Rucho, let him finish his speech here and then we’ll come back to ask you. [SPEAKER CHANGES] Alright, let’s see. Let’s make this simple, alrighty? Under the current bill – I mean under the current law, the motor fuels tax would be 30.4 cents per gallon in 2016. Under the law as proposed in Senate Bill 20, the motor fuels tax would be 25 cents per gallon, which is an increase. In 2017, under the current law, the motor fuels tax will be 31.3 cents per gallon; that’s projected. Under Senate Bill 20, as before, it would be 35.4 cents per gallon, which of course is an increase. In 2018, under current law, the motor fuels tax will be 33.8 cents per gallon. Under the bill, as before, it will be 40.5 cents per gallon. Under current law, the motor fuels tax would be, in 2019, 34.2 cents per gallon. Under the law that is before – the bill that is before us, the motor fuels tax will be 41 cents per gallon. So in each case, beginning in 2016, under the current law, the motor fuels tax will be lower than it will be under Senate Bill 20 as put before us today. I think most citizens in the state of North Carolina would consider that to be a motor fuels tax increase. I certainly do. Now I yield for Senator Rucho’s question. [SPEAKER CHANGES] Senator Rucho, you have the floor. [SPEAKER CHANGES] Thank you, Mr. President, and Senator Clark, from what Senator Rabin talked about earlier, his crystal ball doesn’t seem to be working quite as well as yours does. You must be applying for the weatherman’s job on Channel 5, but unfortunately, I guess the real question you have to ask yourself, and something that you

You need to talk to your constituents. Are you going to vote down a six million dollar advantage or contribution to your road system in your district? That’s the question you need to ask yourself. Are you going to give up on the six million and tell your taxpayers that you did and you voted against the xix million dollars of roads in your district? [SPEAKER CHANGES] Senator Clark, you have the floor. [SPEAKER CHANGES] Senator Rucho, I’m glad you asked that question because when I campaigned for office, I told folks in my district that I might make some rough decisions, and asking for a tax increase might be a decision that I might be willing to do. This represents a tax increase. I don’t have any problems if we’re going to tell our folks that we need to raise taxes in order to provide for the transportation infrastructure of this state. That is my concern here – not the fact that we’re saying we need the money, but if we truly do need these funds to support the transportation infrastructure of this state, then maybe this discussion ought to take place during the budget negotiations during this long term, this long session. Why do we all of a sudden have to show up in one or two days and decide there’s a critical issue before us and we need to take care of it right now? We don’t have time to think about it; we don’t have time to engage in discussions about it. Maybe a tax increase is needed; maybe it’s not. Maybe we can do it via bonds; maybe we can cut something. I’ve often heard that when we talk about Democrats, they want to tax and spend, and the commentaries often “Well maybe they should cut something.” Maybe that’s an option too. I don’t know, but I take offense at the idea that we have to make a decision right now when we have a full session before us. Of course we have to deal with the ?? component, but as far as what we need to do in terms of the motor fuel tax, I think we can wait a little while on that, but if we choose not to, we must be clear to our constituents. We must be above board. This is a tax increase, period. Plain and simple. You don’t generate one billion dollars in revenues over about four years with a tax cut, and if you do that, I think that’s a better act than doing the fortune teller. Nothing else. [SPEAKER CHANGES] Thank you, Senator. Any further discussion or debate? Senator Van Duyn, for what purpose do you rise? [SPEAKER CHANGES] To debate the bill. [SPEAKER CHANGES] Senator Van Duyn has the floor to speak to the bill. [SPEAKER CHANGES] Thank you. With all due respect to my colleagues, I believe this is a case where transparency, and heaven forbid collaboration, would have made for a better bill. On the first day of session, the Democratic ?? caucus met to hear from business leaders, and what we heard loud and clear was that infrastructure, our roads and bridges, need attention now. We all agree. Addressing this problem adequately though will require that all options be on the table and all voices heard. You’ve raised taxes on working families and seniors by eliminating the income tax credit, by eliminating small business deductions, by eliminating tuition and medical deductions, all while giving tax handouts to corporations and the wealthiest individuals. Slipping a gas tax increase into a must-pass tax clarification bill and then calling it a tax cut is not fair to working families in North Carolinas who are still waiting for their share of the Carolina comeback. [SPEAKER CHANGES] any further discussion? [SPEAKER CHANGES] Mr. President? [SPEAKER CHANGES] Senator Apodaca, for what purpose do you rise? [SPEAKER CHANGES] To see if Senator Rabin will yield for a question. [SPEAKER CHANGES] Senator Rabin, do you yield? [SPEAKER CHANGES] I yield. [SPEAKER CHANGES] Senator Rabin, if this is not voted in, what will the damage be done to Buncombe County roads? [SPEAKER CHANGES] If you’ll bare with me for just a second… [SPEAKER CHANGES] Take your time please sir. [SPEAKER CHANGES]Let me get down on the highways trust fund, and I’m going to switch over to the highway fund. I have a lot of papers here in front of me. Buncombe County will lose 4.1 million, 83 miles of paving, 330,022 miles of resurfacing, for a total of $16,423,113. [SPEAKER CHANGES] Thank you, Senator Rabin. Speak on the bill? [SPEAKER CHANGES] Senator Apodaca has the floor to speak to the bill. [SPEAKER CHANGES] Thank you, Mr. President. Members, we can use semantics, we can talk about all we want to; we can talk about tax cuts.

for the middle class, non tax cuts for the middle class. It's the same tired rhetoric we've heard over and over and over, and it's just not true. You can't say something over and over and make it true, folks. Voter's spoke in November. Everybody had their say, but some people can't get over what happened. We've been sworn in, this is the new session. Very simple bill here. If you don't want your road money in your district, please vote against this bill. But if you want a way for the people to get to work or families to go on vacation, vote for this bill. Thank you. [SPEAKER CHANGES] Any further discussion or debate? Senator Berger, for what purpose do you rise? [SPEAKER CHANGES] Just briefly, I hesitated to speak because I think Senator Apodaca really put the issue before us. It's fairly clear, two things, 35 is lower than 37.5. Right now, the gas tax is 37.5 cents/gallon. It will, on March the 1st, go to 35. You can call that an increase if you want to, it sounds like a cut to me. The other thing is, for every member in here, you are going to have a situation where if we don't do anything, which by voting no that's in essence what you're saying, "We don't want to do anything," you don't do anything what you're going to see is not just DOT money go out of your districts and those projects fall off and the resurfacing and the bridges not get taken care of, but your municipalities. We're all worried about the municipalities as I understand it, their Powell Bill is going to be gone. So, in Buncombe County, part of that $16M dollars that Senator Rabin spoke of goes to the municipalities in Buncombe County and Powell Bill funds. So in Buncombe County there will be a total of $2,343,720 that municipalities in Buncombe County will lose. In Cumberland County, if you don't vote for this bill, in Cumberland County, municipalities in Cumberland County will lose $4,577,859. That may be okay with you bit I don't think it's okay with the majority and I would urge you to vote for the bill. [SPEAKER CHANGES] Any further discussion or debate? Hearing none, the question before the Senate is the passage of the Committee Substitute to Senate Bill 20 as amended on its second reading. All in favor vote aye, opposed vote no. Five seconds will be allowed for the voting, the clerk will record the vote. Waddell, no. Thirty-six having voted in the affirmative and fourteen in the negative, the Committee Substitute to Senate Bill 20 as amended passes its second reading. It will remain on the calendar. Senators, that's all for our calendar for the day. Do we have any notices or announcements? Any notices or announcements? Senators, we're still in order, so if we'll remain -- for what purpose do you rise? [SPEAKER CHANGES] Democrats caucus, fifteen minutes after session. [SPEAKER CHANGES] Thank you, Senator. Any other notices or announcements? Is there any further business to come before the Senate? If not, the chair recognizes Senator Berger for a motion. [SPEAKER CHANGES] Thank you, Mr. President. I move the Senate do now adjourn, subject to the receipt of House messages and committee reports, the appointment of committees and the standard stipulations set forth in Senate Rule 24.1 to reconvene on Thursday, February 12th, 2015 at 11:00 AM. [SPEAKER CHANGES] The motion is that the Senate do now adjourn subject to the standard stipulations, the receipt of messages from the House, and committee reports and committee appointments to reconvene Thursday, February 12th at 11:00 AM, seconded by Senator Tucker. All in favor say aye, opposed no. The aye's have it. The Senate stands adjourned.