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House | June 11, 2014 | Committee Room | Finance Budget

Full MP3 Audio File

We’re going to go through that bill first and if there’s any time for the remaining bills we’ll try to get to those. If we do not get to those this calendar will roll for tomorrow or next week. Representative Dollar, sir are you handling senate bill 744? Well since I don’t see any of your senate counterparts. [SPEAKER CHANGE] Madam chair. [SPEAKER CHANGE] Yes sir. [SPEAKER CHANGE] We’re hearing just the finance fees of the..? [SPEAKER CHANGE] Mr. ?? yes sir. As soon as Mr. Dollar gets to the podium. Folks I believe on the top of your folders you will see a PCS and that is the finance provisions. Representative Setzer moves we have the PCS before us for the purpose of discussion. All in favor will say aye. All opposed no. Representative Dollar you have the floor sir and if you would like to have staff to go through the provisions we’ll be glad to honor that. [SPEAKER CHANGE] Yes madam chair. [SPEAKER CHANGE] Ms. Averett. [SPEAKER CHANGE] Good morning. As Representative Howard said, the PCS that you have before you this morning contains just the finance provisions that are in the budget and I will briefly go through the tax provisions and then Rodney has a chart and he will go through the fee provisions. The first tax provision that is on is section 12h.18 of the bill and this is something that has to do with an assessment for LME and MCOs however this is not, it’s just directing that the assessment can be allowed if the federal government allows it and all the details can be worked out so this is a provision that had been in the senate bill and as you will recall the federal government said that the way that it was written and proposed by the governor could not be implemented in the state at this time so this does not implement it but it does gives some authorization in case it can be worked out and that authorization ends July 1st, 2017. Section 15.2b increases the percentage rate used to calculate the public utility regulatory fee. The regulatory fee was actually set for both years of the biennium in last year’s budget but this increases it and changes it for the year coming up from 0.13% to 0.14%. Section 20.2 of the bill increase the percentage rate to be used for the insurance regulatory charge but it’s not for this biennium, it is for the 2015 year and also in doing that it increase the purposes for which that fee can be used. As you know the insurance regulatory charge is used to reimburse the general fund for expenses that are incurred from the department of insurance and there’s a list of purposes for which it can be used to reimburse the general fund. This will add to it the hearings that the industrial commission has and also in the bill there’s a provision that would amend the fee setting authority for the industrial commission to not authorize their fee setting ability for these hearings. These hearings will in the future, not this year, but in the future be paid from the insurance regulatory charge. Section 34.6 of the bill is in your transportation part of the budget and it repeals the quarterly refund of the motor fuel excise tax that’s paid by taxi cabs and it delays the expansion of the highway use tax space to include the dealer fees. That was something that was passed in last year’s budget that the highway use tax would be not eh retail value of the car plus the dealer fees but that was delayed and in this bill it is delayed again. Section 36.12 authorizes the issuance of general obligation bonds from our two thirds bonds authority and Mark Bondo is here and can explain that in some more detail in a few minutes. Section 37.1 moves us to the end of the bill and the section of the bill that’s called the finance changes. This section clarifies what is meant by the term net general fund tax collected..

Last year the general assembly sat a trigger so that in the future the corporate income tax rate may move down a percentage point if certain triggers are met. It was unclear when you’re looking at that trigger, there was a dollar amount set in the statute, where do you go to determine if that dollar amount is met. It referred to the capital report. However, that has many different charts. What is in your bill now is what the appropriation committee and this body typically uses when it puts together its general fund availability segment. When you all are thinking what are our net general fund tax collections? The information that Gary Boardman gives you and that you receive from your budget development teams. This is the figure that is used. Section 37.2 phases out over four years the Medicaid home harmless provision. Some years back, when there as a Medicaid swap when the state took over part of the Medicaid expenditures, it held counties harmless, but in addition to holding them harmless, it guaranteed every county at least a 500,000 dollar benefit. This begins to phase out that 500,000 addition that every county receives. It is my understanding, when it is fully phased out I believe there will be 24-26 counties that are continuing to receive a whole harmless payment. Section 37.3 is a provision that you all passed earlier in house bill 10-50, but the senate took it out. This was a recommendation also of the revenue law study committee. It exempts 50% of the sales price of a manufactured or modular home from sales tax. Lastly, Section 37.4 is a new provision, but it is a provision that phases in the 7% sales tax rate on gross receipts derived from sales of piped natural gas from one of eight gas cities over the next two years. In the past the gas cities, of which there are eight, did not impose an excise tax on the piped gas sold to their customers. The rate for those, effective July 1st, was a going to be a rather large increase. This just phases it in over two years. The rate July 1st for the customers in those cities will be 3.5%, and beginning July 1, 2015 it will be the full 7% that all other customers of other piped natural gas companies pay. Those were the tax provisions. [SPEAKER CHANGES] Member of the committee. Do you have questions regarding the tax provisions? Rodney Bissel? [SPEAKER CHANGES] Thank you madam. Rodney Bissel with… [SPEAKER CHANGES] Madame chair? I’m sorry, was Mr. Bissel continuing with the explanation, or? [SPEAKER CHANGES] Yes sir. [SPEAKER CHANGES] Because, I had a question. I can wait. [SPEAKER CHANGES] You had a question on the tax provisions? [SPEAKER CHANGES] Yes, the tax provisions. [SPEAKER CHANGES] Thank you Madame Chair. Rodney Bissel, with fiscal research. I’ll be going over the fees spreadsheet that you have in your packet. This is fiscal information and summary information on all the fees and the finance PCS. You’ll see we have them grouped by team area beginning with education. We have the section number of the bill, general fund or special fund impact, and we also indicate whether this was in the senate budget or not. Beginning with the education area in Section 11.9, we have the UNC faculty tuition waiver. This increases the number of classes that faculty or staff member at a UNC institution may take free of tuition or fees from 2 to 3 and clarifies that the UNC system may waive both tuition and fees for faculty. The next section, 11.18. UNC set non-budget and tuition rates. This relates to a provision in last year’s budget that decreased general fund appropriations by 27.3 million to be offset by a non-resident tuition increase. Last year’s provision also indicated the percentage increase of the non-resident tuition. This provision is giving flexibility to the UNC system to set those rates as it sees fit to meet the budget requirement of the 27.3 million. On the next page, in the general government area, there is this one provision that allows agencies to adopt emergency rules to enact fees or fee increases without going through the normal rule process. Then in the JPS area, beginning with Section 16b.3, the hazardous materials facilities fee. This is a new fee for hazardous…

Hazardous materials for persons who are required under federal requirements to report to the division of emergency management. The fee is $50 for hazardous materials and $90 for extremely hazardous materials and there was an amendment that passed in the JPS subcommittee that put a $5000 cap on this fee. The ABC permit fee increases in section 16b.2 this is increasing the renewal and registration fee for ABC permits to be equal to the initial permit fee amounts. This will increase the beer and wine permit fees from $200 to $400 and mixed beverages will increase from $750 to $1000. The private hospital toxicology fee is allowing a court fee for toxicology tests at private hospitals allowing a fee for that that would be the same as the fee for tests done at a local or state crime lab. The community work crew fee is allowing the department of public safety to charge a fee sufficient to cover its cost to provide work crew services to local governments. Currently there’s a cap on that fee of $150. Similarly the inmate labor contract in section 16c.3 allows the department of public safety to charge transportation and administrative fees to recover costs associated with inmate labor contracts. On the next page under transportation, conversion of paper titles just authorizes the conversion of existing titles from paper to copies to electronic. Section 34.14 DOT signage fees is allowing the department to recapture the cost to administer signs with logos for private businesses and tourism oriented directional signs. Those current fees are $300 and $200, this would just allow the department to set the fees to recover costs. The next item 34.26 is fairy tolling. This repeals the tolling authority of the board of transportation and it removes tolls from three currently tolled routes and this would result in a reduction of $2.1 million in the highway fund. In the HSS section 12e.3 this is an increase fee for private well water testing. The fee would be increased from 55 to 74 and it would also add existing wells to be tested as well as newly constructed wells. The innovations waiver services is on here but Cindy addressed that under the tax provision so I won’t repeat that here. The NER section beginning with the state fair admission provision in section 13.2 this exempts the board of agriculture from rule making for purposes of determining the state fair admission cost. Forestry management plans implements a new fee for forestry management plans and the cost depends on the acreages specified here. The national poultry improvement plan fees is a fee increase for the national poultry improvement plan certification for the initial certification it’s $50 plus 10 cents per bird and for each subsequent year the fee is $10 plus 10 cents per bird. On the final page commercial fishing licenses, this is doubling six different commercial fishing licenses over what the FY ’12-’13 amount was and you have listed here for each license the ’12-’13 amount, the current amount, and then the proposed fee amount. In section 14.13a this is the natural heritage program online access fees that allows the DENR secretary to set fees to offset the cost associated with preparing customized environmental review services or developing online technology for external users to access the natural heritage program data. It also provides for conducting an inventory for natural areas, conservation and protection planning. And finally the wildlife licensing changes provides a variety of technical changes for the wildlife licensing fees and that concludes the fee provisions. You can see the totals here are 12.2 million in the general fund for..

Fi 14, 15 and 1.3 million in special funds. [SPEAKER CHANGES] Members of the committee, questions with respect to the fees, before we go back over to mark bondo with the bonding provision, Mr. Collins [SPEAKER CHANGES] Yes I actually had two questions on this, one is on the second page, the hazardous materials, Just not being a part of any of these sub committees I’m just wondering, who is that being, is that to manufacture the hazardous materials, is it trucking companies that transport them, I just kind of want to know who that fee is on and you also mentions the maximum of 500 dollars, is that per truckload or per material being processed, I just need a little bit more details about who that’s on and what that 500 dollar limit means. [SPEAKER CHANGES] Christine lagat, Christine if you would use your microphone please. [SPEAKER CHANGES] Thank you madam chair, Christine lagat fiscal research. The fee is going to be charged on companies or industries that use or store hazardous materials, for their business, it’s not trucking, and I’m sorry if you could repeat the second part of your question. [SPEAKER CHANGES] The 500 dollar limit is that per week, per year, per certain poundage or, would mention that this 50 dollars has a 500 dollar limit on it and I was just wondering what that means more specifically. [SPEAKER CHANGES] Madam chair, Christine lagat again fiscal research, its 50$ per hazardous material that they use or store in their facility and 90$ per extremely hazardous material it’s an annual fee and the cap is 5000 dollars. [SPEAKER CHANGES] Mr. brolly [SPEAKER CHANGES] Yes madam chairman, inquire to the chair [SPEAKER CHANGES] Yes sir. [SPEAKER CHANGES] This bill has a ways to go after it leaves here, if there are fees added to it after it leaves this committee, will they come back to this committee for reconsideration, for consideration [SPEAKER CHANGES] Yes sir [SPEAKER CHANGES] Thank you [SPEAKER CHANGES] Mr Collins [SPEAKER CHANGES] I just have one more question, this involves the national poultry improvement plan certification, I just want to make sure I understand this, because I have a lot of chicken and turkey farmers in my area,and I am just wondering is this something they ??, I’m thinking these chicken houses have like 10,000 birds you know in the plant at one time and 10 cents per bird could be a big big fee, I like to know what this fee is for and who it’s going to be imposed on before I vote for this. [SPEAKER CHANGES] Mr. Dale, Timothy Dale sir. [SPEAKER CHANGES] Yes, back here, timothy dale fiscal research?? Representative Collins, I just, towards the back of the room over here, so this is primarily targeted to your folks that have their small chicken production type things, it’s not the big houses it’s a voluntary program, this is more for branding for them so they can say they have quality products, it’s a voluntary program. [SPEAKER CHANGES] Members of the committee, further questions with respect to the fees. Bondo sir are you ready, members we are going back to the bonding provision which you will find on page 1 section 36.12 [SPEAKER CHANGES] Yes Mark Bondo, fiscal research, so 36.12 authorizes 263.7 million dollars in 2/3s bonds which were a form of general obligation bonds, allowed in the constitution, their formulated on a calculation of the amount of general obligation debt repaid over the previous biennium. What this prevision does is it allows the authorization of 15.4 million dollars to construct the western crime lab in Edniville and it also allows for the renovation of the able marrow building for 42.3 million dollars. The next item is the 206 million dollar reauthorization of existing authorized, but unissued debt, so the state has 206 million dollars of authorized but unissued nonvoter approved debt, known as special indebtedness for cops, that is attached to a project, what this would do is reauthorize that debt as general obligation debt to achieve a triple a rating instead of the double A+ rating that the other debt has, which will allow for slight interest rate savings over time, but also look better on the state’s overall balance sheet. [SPEAKER CHANGES] Mr. holme [SPEAKER CHANGES] This is not on the bond section, this is a different subject, are you ready for other questions?

… if anybody has any questions on with respect to the bond issue. Mr. Starnes? [SPEAKER CHANGES] Can we get a comment from the Treasurer’s Office on the debt affordability? [SPEAKER CHANGES] Is there anyone in the back of the room that would like to speak for the Treasurer’s Office? Sam. [SPEAKER CHANGES] Representative, Sam Watts from the Treasurer’s Office. If you have a… my person who would be the person to answer the question is not here right now, so I would… I can get an answer before your end of your meeting though. What’s the specific question? [SPEAKER CHANGES] How does this two thirds bond comport with the debt affordability? [SPEAKER CHANGES] We’ll get back to you. [SPEAKER CHANGES] Mark. [SPEAKER CHANGES] Yes ma’am. [SPEAKER CHANGES] Mark ?? is helping to address that question, Mr. Starnes. [SPEAKER CHANGES] Yes sir. In the 2014 debt affordability study that the Debt Affordability Advisory Committee put out, the 206 million dollar reauthorization was one of their recommendations. The other two items – the 15.4 million dollars and the 42.3 million dollars of new debt authorizations – would keep the state below the four percent recommendation that they have, so the Debt Affordability Council recommends for the state to stay no more than four percent below current revenues, as that service would be calculated as a percentage of that. This would keep them… the state would still be well below that level. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Back to the general questions now. Mr. Hall? [SPEAKER CHANGES] Thank you Madam Chair, and I’ve got some questions about the 106 million I believe we’re generating from the increase in the advertizing for the lottery. So I wanted to know what the basis was for the projected 106 million that we’re going to get from that, and do we have - [SPEAKER CHANGES] Mr. Hall, that’s actually not a part of this bill, and if you could hold that questions until the full appropriations meeting that will follow shortly. That’s not a part of this bill this morning. [SPEAKER CHANGES] Well could you tell me who…? Is anyone on the staff here this morning going to be the person that’s going to be able to provide that information when we get there, so I can try to contact them before we…? [SPEAKER CHANGES] Just a minute. [SPEAKER CHANGES] We’ll contact the lottery people and have them get up ?? [SPEAKER CHANGES] Ms. Avery is going to contact the Lottery Commission and have someone to be in that meeting for you, Mr. Hall. Members of the committee, we’re going to take all your questions, and then if you have an amendment, I need to have it up here so we can get it back to our staff. If the amendment has an impact on this year’s budget, then Mr. Dollar is going to indicate that it does affect the availability and that amendment will be rules out of order. Members of the committee, questions. Mr. Warren. [SPEAKER CHANGES] Thank you, Madam Chair. I have a question for Ms. Avery on staff if that’s alright. [SPEAKER CHANGES] Yes sir. [SPEAKER CHANGES] Going back to her presentation, I’m just curious what the section 37.3, which exempts 50 percent of the sale price of manufacture of model module home from the sales tax, could you give me an idea… do we have an idea what type of dollar amount that would be estimated to be? [SPEAKER CHANGES] Yes sir. If you will… on the fiscal note, it indicates that it would be 6.1 million for the fiscal year. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Further questions, comments or concerns. I have two amendments up here. Are there others coming? [SPEAKER CHANGES] Madam Chair? [SPEAKER CHANGES] Mr. Luebke? [SPEAKER CHANGES] Would you be kind enough to tell us what the topics are on the amendments? [SPEAKER CHANGES] Representative Davis, modifying the ?? credit, and Representative Holley, restore earned income tax credit. [SPEAKER CHANGES] Thank you, ma’am. [SPEAKER CHANGES] We have one more. Representative Samuelson, and this is a credit for investing in renewable energy property.

Mr. Dollar, do you have any other comments that you would like to make, with respect to the bill? [SPEAKER CHANGES] No Madam Chair. [SPEAKER CHANGES] Miss Holley, you’re recognized to send forth an amendment. Members, the sergeant at arms will pass out the said amendment. Mr. Starnes. [SPEAKER CHANGES] An additional question, at the appropriate time. [SPEAKER CHANGES] It might be now. [LAUGHTER] [SPEAKER CHANGES] All right. My question is on page 26, the 37.1A, dealing with the trigger for the corporate income tax cut. Just help me understand what we’re clarifying here. [SPEAKER CHANGES] Representative Starnes, right now the trigger would be set at the, if the net general fund tax collections for the certain fiscal years meet the amount set in the statute. The question is where do you go to look, to see what those net general fund tax collections are, and what the current law says is the state’s comprehensive annual financial report. Well my understanding is that report is pages and pages long and has several different charts in it, all that read a little differently depending upon where you’re starting from. So what this does is to try to use for that trigger the general fund, what the general assembly typically thinks of as the net general fund tax collections. And what this body usually looks to is what’s reported by the department of revenue in its reports. And so if you’ll look on page 26 it says the net general fund tax collections will be the net revenue amount reported by the department of revenue in its June statement for the 12-month period and in the prior June 30th. And then there are a couple of adjustments that Mary Boardman, working with our budget development team, felt that you would want. And one is that you would take from that any large one-time, non-recurring dollars. And the second are any adjustments that would be made because of perhaps budgetary decisions to end transfers or move transfers back and forth. For instance, local government transfers right now aren’t part of that, but if you somehow drew them into the general fund or something it might artificially inflate it. So this would just be allowing those adjustments so that you would receive a true picture of what your net general fund tax collections were for those years. [SPEAKER CHANGES] And what would be an example of a large one-time monetary infusion? [SPEAKER CHANGES] You may have a case that’s settled. A large corporate income tax case that settled and you might receive several hundred, you know, several million dollars. [SPEAKER CHANGES] Miss Holley, you’re recognized to send forth your amendment and explain that amendment, ma’am. [SPEAKER CHANGES] Thank you, Madam Chair. This is an amendment that’s dealing with restoring the earned income tax credit for the corporate poor. The unincorporated poor. It’s based upon the rules where we took the corporate taxes and then reduce them down from six to five percent. What I’m asking is that it go down to 5.6% which is a 4/10 of a percent difference, that will take care of both the unincorporated poor. Now, the earned income tax credit, the people who normally get the earned income tax credit are historically only on this tax credit for a couple of years. And this is a real important thing for them because where it stands now with the reduction in the earned income tax credit, they are actually getting a tax increase. These are the working people who have a tendency to be overlooked. So what we’re doing is, what I’m asking is that you reduce it by 4/10 of a percent, what we were trying to give the corporate, the corporations, and give it to the unincorporated. To the poor people with the earned income tax credit. [SPEAKER CHANGES] Mr. Stam. [SPEAKER CHANGES] In opposition, the rationale for the federal earned income tax credit is that the working poor are paying FICA and Medicare tax which is significant but they don’t pay that at the state level. There’s nothing that they’re offsetting. [SPEAKER CHANGES] Mr. Leubke. [SPEAKER CHANGES] I would just say a few words in support of the amendment Representative

Holly has pointed out that this helps working people, and actually its actually it’s beyond the poor. It’s not just along the working poor, according to our fiscal research staff 22% of all tax filers are eligible for this earned income tax credit and this helped people around the state, many of you republican or democrat have many constituents, who are beneficiaries of the earned income tax credit, they were and will continue to be if the amendment is supported, and that amount, that 22% of north Carolinians who benefit from the earned income tax credit, is a million filers, so that’s a million filers across the state, it is only fair that we provide them with some opportunities to have more in their pockets so that they can drop it from their pockets to the retail merchants around them, but most importantly it’s a fairness issue given how many people need this income, 22% again of all tax filers and I support the amendment. [SPEAKER CHANGES] Mr Lewis. [SPEAKER CHANGES] Thankyou madam chair, may I speak on the amendment? [SPEAKER CHANGES] Yes sir [SPEAKER CHANGES] Thank you mam, I want to thank the lady from lake for bringing this forward, I would like to take the time to remind the committee and to remind the public that may be listening, that in last year’s effort to help working families this general assembly greatly increased the standard deduction that all tax payers are able to get, we expanded the child tax credit for the lower income working families that we have, and we also cut the sells tax on good that working families need to buy, including diapers, clothes, school supplies and whatnot, we are very Intune and very aware of the struggles that our working families face, and we have tried to address those in a broad approach way, a way that helps them get the training they need to get the jobs that they need, to support themselves and support their families, this is not a good amendment, this does not go in the direction of empowering people and I would urge that community to vote it down. [SPEAKER CHANGES] Follow up? Miss holly your recognized ma’am. [SPEAKER CHANGES] Well, I think this does go in the direction of empowering people, because it is the working people that its effecting there are a lot of people now that are having to take less of the income in lower paying jobs, this is a little bit of a safety net, we’re not talking a lot of money here, this is a little bit of a safety net, this is one flat tire for us away, some people are one flat tire away from poverty, and this is a little bit of a safety net and there is not enough that we can do, half of these people are children, these are families, have this effect 3 million people a year in north Carolina and 300000 people a year in north Carolina and half of them are children, thank you [SPEAKER CHANGES] Holly has moved for the adoption of the amendment, Mr. hall [SPEAKER CHANGES] On the amendment madam chair, thank you madam chairman and I’d appreciate the comments of representative lewis in reference to last year’s tax bill, and I think, despite the best intentions possibly of the majority last year, we did have a bill that was passed that provides continuing and escalating tax decreases for parts of our community, but at the same time it might have been overlooked that we increased the taxes on 80,000 small businesses in the state, by doing this one revenue neutral earned income tax credit, we will put more money back into the economy as representative holly said, it will also allow more families to have the opportunity to withstand emergencies which would, in all instances put them on social services assistance, or department of health and human services assistance, so this is something that will help, not only the families, it will be a little bit less of a tax cut for others, but it will restore people to where they were before they got a tax increase, those million north Carolinians, so to have this money back in the economy it will be circl

It will help those small businesses, those 80 thousand small businesses that got that tax increase, and it’s a good thing for North Carolina, it’s a good thing for the small communities where these businesses are, and we’ve continually pounded our small and rural areas, and this would be an assistance to them as well as those 80 thousand small businesses, so I’d ask for you to support this. This helps our small business as well as our families who are struggling. [SPEAKER CHANGES] Mr. Collins. [SPEAKER CHANGES] Just to clarify a couple things, I’m one of those 80 thousand small businesses. You are too if you’re self-employed. If you remember back in 2012, this General Assembly under our leadership gave a two-year basically hiatus on paying taxes on the first 50 thousand dollars you make by self-employment income to try to spur the economy. Apparently it’s worked from all the DOL figures we see. Regardless of whether it’s U4, U5, U6; whatever number you look at – unemployed, underemployed, ??, aggregate, rate – we’re growing our economy faster than almost any other state, and faster than any other state that hasn’t already gone into energy exploration over the last two years. I understood that that was going to be temporary and that I wasn’t going to have my income taxes lowered by three thousand dollars a year every year for the rest of my life and that I’d get back to paying the normal North Carolina income tax after a couple of years. I think most self-employed people understood that. As far as the other incident goes, if I remember our debates right last year, the state earned income tax credit maxes at 80 dollars. There’s no way in the world that the dropped sales taxes and the increased standards of production and the other things that representative Lewis mentioned don’t more than make up for that 80 dollars, so for me this is much ado about nothing and I would ask you not to support the amendment. [SPEAKER CHANGES] We’re getting ready to vote on the amendment. [SPEAKER CHANGES] Madam Chair? [SPEAKER CHANGES] One more time, Doctor ??. Yes sir? [SPEAKER CHANGES] Madam, just to request the ayes and no’s. [SPEAKER CHANGES] Yes sir. How about a show of hands? Is that fair? Are you good with that? We’ve got to vote on the major bill. If you’re okay with that, we’d rather… The Clerk will call the roll. All in favor of the amendment will say aye. All the opposed – [SPEAKER CHANGES] Madam Chair, I did want the ayes and no’s please. [SPEAKER CHANGES] That’s what she’s doing. [SPEAKER CHANGES] ?? Clerk will call the roll and all in favor will answer aye. All opposed will answer no. [SPEAKER CHANGES] Representative Alexander? [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Alexander, aye. Representative Blust? [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Blust, no. Representative Brawley? Robert Brawley? [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Robert Brawley, no. Representative William Brawley? [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative William Brawley, no. Representative Burr? [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Burr, no. Representative Carney? [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Carney, aye. Representative Collins? [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Collins, no. Representative Cotham? [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Cotham, aye. Representative Davis? [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Davis, no. Representative Dollar? [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Dollar, no. Representative Hager? [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Hager, no. Representative Hall? [SPEAKER CHANGES] Yes. [SPEAKER CHANGES] Representative Hall, aye. Representative Hamilton? [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Hamilton, aye. Representative Hanes? [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Hanes, aye. Representative Hardister? [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Hardister, no. Representative Holley? [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Holley, aye. Representative Howard? [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Howard, no. Representative Johnson? [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Johnson, no. Representative Jones? Representative Jordan? [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Jordan, no. Representative Luebke? [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Luebke, aye. Representative Lewis? [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Lewis, no. Representative Martin? [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Mar - [SPEAKER CHANGES] Which Martin? [SPEAKER CHANGES] Grier. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Grier Martin, aye. Representative Moffitt? [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Moffitt, no. Representative Rodney Moore? [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Rodney Moore, aye. Representative Tim Moore? [SPEAKER CHANGES] Absent. [SPEAKER CHANGES] No. [SPEAKER CHANGES] Tim Moore, no. Representative Meyer? [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Meyer, aye. Representative Samuelson? [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Samuelson, no. Representative Schaffer? [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Schaffer, no. Representative Setzer? [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Setzer, no. Representative Stam? [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Stam, no. Representative Starnes? [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Starnes, no. Representative Stone? [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Stone, no. Representative Tine? [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Tine, aye. Representative Waddell? [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Waddell, aye. Representative Warren? [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Warren, no. Representative Wells? [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Wells, no.

Motion fails on a vote of 23, 13. Representative Samuelson, ma’am, you’re recognized to send forth an amendment. [SPEAKER CHANGES] Thank you, Madam Chair. ?? Thank you. They’re passing out the amendment. This has to do with the renewable energy tax credit that is due to expire on January 1, 2016. This does not change that. What it does is simply acknowledge that projects sometimes take longer than you expect to get them finished, and so what this is recognizing is that if a project is under construction and meets sort of the federal guidelines for what constitutes under construction, that as long as it is put in service by July 2017, that it would still qualify for the credit. There are not going to be a lot of these. I understand from staff there would be no fiscal impact in this year and minimal fiscal impact going forward, but it just recognizes that as the economy has turned around, it has gotten harder to gauge exactly how long it takes to complete a construction project. Any of ya’ll who have ever built anything know that it’s really hard to guess, and so the way the language was originally written, it said that it had to be completed by a certain date. Well sometimes you can do all your best as a contractor and you just can’t get it finished by a certain date, and if you’re trying to get investors in your project and you know there’s got this hard completion date that nobody can really control, it gets harder to do the projects, and I believe… I talked to Representative Hager and I believe he’s the one that I thought might oppose it, and if Mike wants to respond to it, I think that he said he was okay with this as well. [SPEAKER CHANGES] Members of the committee… Mr. Starnes? [SPEAKER CHANGES] Does staff have an estimate on the fiscal cost? [SPEAKER CHANGES] Jonathan? Jonathan Tart, do you have an estimate of the fiscal impact? [SPEAKER CHANGES] We do not have an estimate of the fiscal impact at this time other than because of the date on it, it should for you. I don’t have that right at hand. [SPEAKER CHANGES] Ms. Carney? [SPEAKER CHANGES] Thank you, Madam Chair. I think this is a good amendment. I think it shows us being proactive as we are moving forward with our growth in this state, and I do think it’s going to pick up a lot of these smaller businesses that are looking to expand in this area, so I would ask for your support. [SPEAKER CHANGES] On the amendment, Mr. Jordan. [SPEAKER CHANGES] Thank you, Madam Chair. I have an inquiry for maybe the amendment sponsor. [SPEAKER CHANGES] Yes sir. Ms. Samuelson, so you…? [SPEAKER CHANGES] Yes. [SPEAKER CHANGES] Thank you, Representative. I appreciate the amendment. Your argument was contractors are just not able to quite finish the project, so my question is why would you have only 5 percent starting? That’s just a very beginning before the deadline. Why not like 50 percent? [SPEAKER CHANGES] Good question, and I asked the question as well. That’s the standard that the feds use under these similar programs, and it does constitute a substantial investment on the part of the contractor, and there’s a certain point early in the contract where you’re got to get some okays that can be a delay. I’ve seen it before where you get the foundation laid and then you hit this delay on part of it and you can’t move forward, so it’s also recognizing where these delays often happen. [SPEAKER CHANGES] Members of the committee, on the amendment. Mr. Hager and Mr. Dollar, I see you two. [SPEAKER CHANGES] Thank you, Madam Chairman. I just happened to be working; I had to go. Representative Samuelson, I’ve talked about this. I think it’s fair for those that are in process to a certain point to be able to take advantage of it, so I think it’s a fair amendment and I’m planning on supporting it. [SPEAKER CHANGES] Madam Chair, I think he is channeling me this morning. [SPEAKER CHANGES] Ms. Samuelson moves the adoption of the amendment. All in favor will say aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] All opposed, no. The motion passes. Representative Davis sir, we’re going to stop for one second. I’d like to have a motion on the minutes from our last meeting. Representative Brawley moves that the minutes be approved. All in favor will say aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] [SPEAKER CHANGES] All opposed, no. Representative Davis…

You’re recognized send forth an amendment. [SPEAKER CHANGES] Thank you, ma’am. I appreciate the Chair allowing the amendment to be heard. [SPEAKER CHANGES] Who’s got the original? [SPEAKER CHANGES] Mr. Davis, do you have the original copy of your amendment, sir? [SPEAKER CHANGES] Yes, ma’am. [SPEAKER CHANGES] We need it. All members have copies of the Davis amendment? Representative Davis, sir, you’re recognized to explain your amendment. [SPEAKER CHANGES] Thank you, Madame Chairman. As you’re aware, the state of North Carolina presently has a film incentive program that is scheduled to expire at the end of this year. In looking at the extending this program, and considering the tight proposed budget we are facing, and in the spirit of compromise, I offer this amendment containing proposed changes to the existing film incentive programs. There are four major things that this bill does. Number one, it moves a sensate date to January, 2017, which is a period of two years. It reduces the per project cap from 20 million to 15 million dollars, which is a 25% reduction. It reduces the tax credit from 25% to 22.5%, which is a 10% reduction. And it calls for an independent study by the program evaluation division as to the state and local tax revenue impacts. The study by the Motion Picture Group that everyone has seen shows that the incentives make money. The review by the legislative staff that everybody has seen shows that the incentives cost the state. So, why not allow this independent study, and I emphasize independent study, to take place during that two year extension so that we can truly see what those impacts are. The 22.5% reduction is the least amount that will keep North Carolina as a tier one location. Because, if you are not a tier one, then you might as well have no incentives at all because no one’s going to consider coming here. These reductions will address the stated desire to attract more TV shows with more permanent crew base capital investment and permanent employment base without totally walking away from movie production. This reduction in the credit will likely mean we will not see anymore blockbuster films made in North Caroline. But we can ensure the longevity of our film/television industry. I had Patrick McHue, who was nice enough to do a projection that you have concerning what the impact that such a reduction would have. The only historical data that we could base it on is 2011, 2012, and 2013 and, as you can see, if this amendment had been in effect back then, the state would have saved 3.2 million in 2011, 11.4 million in 2012, and 6.3 million in 2013. Because of the speculative nature of this industry, it is very difficult to try to put together something that would show the cost as to the future. This amendment is critical to economic development in North Carolina through a good, clean, nonpolluting business. This amendment is critical to the people who work in the film industry in Wilmington and the surrounding counties, to Charlotte and the surrounding counties, and to those who work in the film industry throughout the remainder of North Carolina. Time and time again I see bill after bill being argued in the House because it will result in jobs, and I have supported them. Well, the film industry allows 4200 people to have full-time jobs with an average pay of $60,000. That doesn't even include the part-time jobs. That does not even include

All the businesses that supply the film industry, whereby they can provide additional jobs for their employees. The bottom line, members of the Committee, is that the Senate budget does not contain any provision for the film incentives. Unless the House amends the Senate budget, the film incentives are dead, and the film industry is gone from North Carolina. Most will leave, or they’ll stay, and be on unemployment and Medicaid and try to find other jobs where they have those specialized skills which the movie people have. There’s no reason for us to beat ourselves up over this in the Committee or the House floor. All we need to do is to agree on a film incentive proposal that we can send back to the Senate. They will probably not agree, and this issue will be sent to Conference to be vetted and decided upon. Therefore, I ask you to please vote for this amendment, so we can get the process going, so we can get this issue in conference with the Senate. Then we will have an opportunity to either approve or not approve the Conference report. I contend to you, most respectfully, that this is the right path for us to take at this time, rather than to liquidate the film industry. Thank you, and I ask for your support. [SPEAKER CHANGES] Madame Chair. Point of order? Madame Chair. [SPEAKER CHANGES] Mr. Stam [SPEAKER CHANGES] Under the rules you announced at about 9:00, I don’t see an offsetting of, anything to offset the amount, and I’m wondering if that violates the rules you announced at the beginning. [SPEAKER CHANGES] I’m trying to make that determination right now, Mr. Stam, We’re not sure of the impact of the amendment on this year’s budget. Mr. Brawley? [SPEAKER CHANGES] Thank you, Madame Chair. I’ve a question, I’m not sure if the sponsor or staff would need to answer this. Is this a refundable tax credit or a non-refundable tax credit? [SPEAKER CHANGES] I’m sorry. This will remain what is in place as far as that. In other words, it will still be based upon the amount that they spend and then they will be refunded 22.5% rather than the current 25%. [SPEAKER CHANGES] So, as a follow up, just to confirm, a company that paid no taxes in North Carolina would still be eligible for a full refund of the amount in the tax credit? [SPEAKER CHANGES] Mr. Davis? [SPEAKER CHANGES] Certainly. Thank you, Madame Chairman. Representative Brawley, as you are aware, the tax credit is really not a tax credit. It is a refund written back to the industry based upon currently 25% of the qualifying expenditures that they make. And that would remain in effect. [SPEAKER CHANGES] Mr. Collins? [SPEAKER CHANGES] I had a question. I think they’re getting to my point. I keep seeing, if I could take this as it’s written, and believe what it says, I might be able to vote for it. But I keep seeing the word taxpayer. In line 7, I see the word taxpayer. In line 12, I see the word taxpayer, and in line 29, I see the word taxpayer, and I haven’t even read the backside yet. But I had three of the executives from these committees come to my office last year, and I was trying, I was talking to them about the fact we weren’t doing this in a vacuum. We were decreasing corporate tax rates. They made it very clear to me that they don’t pay any taxes in North Carolina. So I don’t know how we’re getting by giving the money, if our, apparently our current statutes say taxpayer all over the place, and these people aren’t paying any taxes in North Carolina, unless they told me something that wasn’t true last year. [SPEAKER CHANGES] Miss Hamilton? [SPEAKER CHANGES] Thank you, Madame Chairman. To that point, I think if you look back at the Samuelson Amendment related to renewable energy, you see the word taxpayer repeated over and over again as well. The fact is, is that the expenditures in this state from the film industry exceeded over a billion dollars in the last twelve years. They’ve paid sales tax revenues to the state of North Carolina. They’re only receiving a quarter of that money back, 25% of their total North Carolina qualifying expenditures, which includes a significant amount of sales taxes, as well as state income taxes paid by thousands and thousands of workers who receive paychecks from these production companies. This is a net gain to the state of North Carolina. Expenditures must take place first. I think that Mr. Davis’s amendment is a very fair amendment. It reduces the obligation of the state. It also targets the industry more toward television production, which are longer term jobs in the state of North Carolina with long term contracts when series are picked up. It takes us more away from the film industry, and more toward television, which again are longer term jobs. [SPEAKER CHANGES] Mr. Hager? [SPEAKER CHANGES] Thank you, Madame Chairwomen. I don’t think anybody.

Stand on the tax credit now see from the far, this tax credit thinks like out front orange casing system let me tell you why, if you look at the paper ?? about what the difference between the 15B and ?? you look the money we spend in the last three years, look the money we gonna spend for moving forward. As each one you stand and say education is the most important thing in North Carolina, is this money better who spend on teacher's assistants and teachers and schools ?? that's a question you have to ask to yourself. In a limited budget of money are we gonna spend it on ?? what we think as most important thing what I think is the most important thing is education. So you guys have to make a decision today and I will vote and I vote no because I want to spend this money in education, on teacher’s assistant back in the classroom and I wanna pay teachers a little more. [SPEAKER CHANGES]Mr. Alexander. [SPEAKER CHANGES]Thank you ma'am chairman. I wanna speak in favor of the amendment, in my district we have the production go on now for bed sheets and but one production during the life of the ?? is gonna kick in about 5 or 6 million dollars per month into the local economy that's add up to about 30 million dollars. That one production employees 300 people most of whom are full time, all of whom live either in the shallot area or the surrounding countess I know that several folks live low in ?? because I met them and talk about their commune. The people who are employed are not just folk who live in my district but they live in the area in near for the economic activity spread out. I also know in order to get credit on this one production they are spending in north Carolina and they keep copies and records of that spending so their pay and sells tax form in getting a repay on the back in. It makes sense if all it about is jobs, we have good clean nonpolluting jobs coming out of the industry. If what we are concerned about is ongoing employment this measure will help develop and keep our television industry in North Carolina. It makes sense it aliens with everything the folk on both sides of ?? and I urge thou to vote for the amendment. [SPEAKER CHANGES]If your turn one quick follow up please. [SPEAKER CHANGES]Thank you very much madam chairman I will be brave. Just as an example set in North Carolina right a multimillion dollar cheque every year to USA raise for their jet fuel tax sales tax repay they are only obligated to pay two and half million dollars in jet fuel taxes to the state of North Carolina and at the end of the year whatever they spend in access of that is paid out to them in the cheque. I just want you ask to consider that on the outside of the North Carolina corporation we talking about 4200 workers on the state of north Carolina that are already here, these are clean jobs they are already here and it's about families in north Carolina that are paying income taxes and supporting the state. I would like to call for the aye's and no's. [SPEAKER CHANGES]Miss Sanderson. [SPEAKER CHANGES]Think you have a question for bill sponsor may be ?? I was looking for a bill that actually, I mean the name of the sponsor, I was looking for a bill that actually changes the structure of which this does not, is there another proposal anywhere floating around here that actually changes the structure of how we do this. [SPEAKER CHANGES]Representative ?? respond mam chairman. [SPEAKER CHANGES]Yes air quickly. [SPEAKER CHANGES]Thank you mam. Representative ?? the only thing I know out there is a snit legislation that's in the P3 legislation that calls for the grand program which is my will just kill the?? Because ?? last year. And I am not sure whether that's going anywhere or not. [SPEAKER CHANGES]Ladies and gentlemen we have already 5 minutes pass the time we need to vote so out of respect I am going to give you one minute. Mr. Barley. [SPEAKER CHANGES]Thank you madam chairman. The racing industry we gave credits to look at all in ?? business that is generated loose hardware.

00:00 they got some tax credits look at all the ancillary businesses they've generated I think if you look at the film industry instead of just talking about this credit and the film industry that you look at all ancillary businesses that go along with it we need to pass this amendment. Is there anybody that don't wanna speak, have a...Rodney Rodney Moore we'll get back to miss Carney and I have right now I have Tim Moore and Rodney Moore and miss Carney is there anybody else I'm gonna cut it off right there Rodney Moore. Thank you madam chairman I'll be very brief the film industry in North Carolina started in my hometown in Wilmington around 1980 I guess was the production of King Kong the De Laurentiis and with the advent of that industry especially in the city of Wilmington it created not only direct jobs for people that work with the crew it also helped ancillary businesses like representative Brawley said with laws and all of that and if you say if this film industry goes [??] it's gonna be a major impact on employment in North Carolina it's not only Wilmington or Charlotte they're doing shoots and sights all over the state and so we really if we're really about jobs if you really still have your red your little red band and you snap your wrists every time you get of a message to talk about anything other than jobs then you really need to consider this amendment and you need to support this and help us come up with a valuable solution to this issue because this is a multi million dollars business in the state and it's not only the forty two hundred jobs but it's all the ancillary jobs in other industries that support the direct film industry so if you're about jobs let's find a solution to this issue let's pass this amendment and let's negotiate and move forward thank you. Miss Carney. Thank you madam chair and thank you for your indulgence today as you can tell there's a lot of passion about this issue and as I've said recently and will keep saying we need to keep talking and what you can do today in here by voting yes for this amendment as representative Samuelson was just saying that there's something else out there, we're at the end of the road with the budget we all know that but here's an opportunity for us to keep the door wide open if you vote for this then we will be in conference between us and the senate the senate has offered a dead end with a grand proposal it doesn't give any commitment to the industry with this we are saying as we said to our renewable energy people if your project under weight we're gonna keep you alive in North Carolina while a lot of these industries these film companies are already under weight they can pull up and leave we don't want them to you don't it's jobs let's keep talking vote this amendment up and let it go to conference and let North Carolina come out with some commitment to an industry that has grown over the years is continuing to grow and will grow we all know it so let's keep talking let's keep it alive vote for it and let's do conference with the senate. Madam chair, um Mr Hager and then Tim Moore. Thank you madam chair just I did a quick back the envelope calculation we spent 61.2 million dollars last year 40 thousand dollars a year that would have put us back one thousand five hundred and thirty teaching jobs. Thank you Mr Moore do you have an amendment sir. I do and it's so short it may not even need to be in writing if I can just explain it line 7 credit [??] you read a tax payer that after the word that put the words pays state taxes. Madam chair madam chair. Mr Stam . Of course that doesn't I oppose the amendment that doesn't fix the problem they could pay two dollars and stay in context and then be qualified for 20 million. [??] throw your amendment Mr Moore Mr Davis moves for adoption of the amendment the clerk will call the roll. Representative Alexander. Aye Representative Alexander aye representative Blust . No Representative Blust no representative Robert Brawley. Aye Representative Robert Brawley aye representative William Brawley. No. Representative William Brawley no representative Burr. NO. Representative Burr no representative Carney. Aye. Representative Carney aye. 05:00

Representative Collins. [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Collins, no. Representative Coffin. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Coffin, aye. Representative Davis. [SPEAKER CHANGES] Yes. [SPEAKER CHANGES] Representative Davis, aye. Representative Dollar. [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Dollar, no. Representative Hager. [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Hager, no. Representative Hall. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Hall, aye. Representative Hamilton. [SPEAKER CHANGES] Yes. [SPEAKER CHANGES] Representative Hamilton, aye. Representative Hanes. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Hanes, aye. Representative Hardister. [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Hardister, no. Representative Holley. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Holley, aye. [SPEAKER CHANGES] Representative Howard. [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Howard, no. Representative Johnson. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Johnson, aye. Representative Jones. Representative Jordan. [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Jordan, no. Representative Luebke. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Luebke, aye. Representative Lewis. [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Lewis, no. Representative Grier Martin. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Grier Martin, aye. Representative Moffitt. [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Moffitt, no. Representative Rodney Moore. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Rodney Moore, aye. Representative Tim Moore. [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Tim Moore, no. Representative Myer. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Myer, aye. Representative Samuelson. [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Samuelson, no. Representative Schaffer. [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Schaffer, no. Representative Setzer. [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Setzer, no. Representative Stam. [SPEAKER CHANGES] No [SPEAKER CHANGES] Representative Stam, no. Representative Starnes. [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Starnes, no. Representative Stone. [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Stone, no. Representative Tine. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Tine, aye. Representative Waddell. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Waddell, aye. Representative Warren. [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Warren, no. Representative Wells. [SPEAKER CHANGES] No [SPEAKER CHANGES] Representative Wells, no. [LONG PAUSE] Motion fails on a vote of 20 to 16. Representative Lewis. [SPEAKER CHANGES] For a motion, Madam Chair. [SPEAKER CHANGES] Thank you, Madam Chair. I move that the House Proposed Committee Substitute to Senate Bill 744, along with an unengrossed amendment, be given a favorable report. [SPEAKER CHANGES] Can we briefly rephrase, Mr. Lewis? [SPEAKER CHANGES] Yes, ma'am. [SPEAKER CHANGES] Would your motion read to roll the amendments into a new PCS and provide a favorable report to that PCS, and re-refer the bill to the committee on appropriations? [SPEAKER CHANGES] Yes ma'am. That's what I meant to say. [SPEAKER CHANGES] We have a motion before us. All in favor will say aye. All opposed no. the ayes have it. We stand adjourned.