A searchable audio archive from the 2013-2016 legislative sessions of the North Carolina General Assembly.

searching for

Reliance on Information Posted The information presented on or through the website is made available solely for general information purposes. We do not warrant the accuracy, completeness or usefulness of this information. Any reliance you place on such information is strictly at your own risk. We disclaim all liability and responsibility arising from any reliance placed on such materials by you or any other visitor to the Website, or by anyone who may be informed of any of its contents. Please see our Terms of Use for more information.

Senate | July 22, 2015 | Committee Room | Education and Higher Education Committee

Full MP3 Audio File

Good morning everyone I'd like to call the higher education meeting to order, thank you for being here I'd like to recognize and thank our sergeants at arms Silas [xx], Donar Blake and Steve McKeic thank you. Great punch of pages that we have at the back still heading a few things out. Thank you. Ember Heidens, senator Brian, Alexandria Dublin, senator Blue, Travous Ford, senator Bill Fred, Hanna Duchy, senator Rucho, Alex Bradly senator Harrington, Wu Shu Owayan, we got to practice that one for senator Brian,. Anita Alberg Senator Stein and [xx] Don Davies, thank you very much for your service here this week. We have three bills on a calendar in front of us, the first one is is House bill 334, and I believe that we have a PCS if I like to entertain a motion to adopt a PCS Senator Fushi, thank you very much, all in favor to adopt the PCS say aye? Oppose no? The ayes have it, and senator Tillman you're recognized to explain the PCS. Thank you Mr. Chairman, thank you. This simply allows charter schools to charge a fee structure such as that which is practiced in another public school, it's very simple, simple bill it allows them to have this put into law make it okay to charge the fees that are already being accessed by the public schools. So it does. There's nothing devious in this bill, Floyd McKissick did not write it, so, he's not even in here, so I appreciate your vote on this. Senator Tillman would you be okay if staff would briefly go through the PCS?  I would love for one since staff knows more about this bill than I do.  Great, well thank you. Droopy you're recognized, if you would go through that please. Now the PCS. The PCS PS actually makes a few changes to the second edition of the bill, and redoes the structure a little bit if the school's advisory board it would provide that the board elect there own chair rather than the governor appointing it appointing the chair and the chair of the state board would appoint a non voting member to the advisory board. It would establish see office of charter schools in statute and locate it within under the state board of education directly, and there's a technical change in section III as well. Mr. Chairman? Yes Senator Tommy. I was talking by [xx] bill which we are taking out that was a good bill too and we're going to put into something else and pass out. I'm sorry I didn't get in as a what is the PCS, but staff you are on a role go right ahead. Go ahead and continue Drafty. [xx] OK alright Senators, anyone of the committee have any questions regarding this? Do Mr. Chairman. Let's do that let's go ahead and put amendment in that way we were discussion that PCS with the amendment rolled in, Senator Tom you have the amendment could you explain that please? This amendment basically makes a change in the appointment by State Board of Education that it says it will be a member of that not a current of the State Board of Education and who is a charter school advocate, so this appointee would be that board but not for a current member of the state board but a charter school advocate that's all the amendment. Questions on the amendment? You should have a copy of that on your desk. Question? Yes Senator Stan. So we are saying that the person has to be not a member of the state board and is a charter school advocate is that what we are saying. Yes sir. Paula? Yes. What is a charter school advocate is that defined anywhere? No but those who are, know it, and those who aren't, they also know it. That's we have three big group out there with a few thousand people that are in the group that charter school supporters and advocate so it won't be hard to find one. If anyone believes in choice or an alternative method to traditional public schools. Follow up does this person, by being on the board, does he or she have a role in approving or suctioning charter schools that

having issues O f course I hope so Follow up question Follow up Is there any restriction that this person not be compensated by if your charter school [xx] group for it particularly charter school None of the members are this [xx] are compensated, there is nothing in there that says they are not, that it will not preclude them if they were being [xx] by somebody I don't believe under the current regulation from serving. Senator Davis, do you have a question? Thanks Vice Chair, I'm just trying to make to understand this correctly, it says to the amendment, one who is not a current member of the state board of education, could you explain that? Sure, we don't want that bound upon one of their own members, we've all ready got members from the board, not we don't want them loading it up, no might be one of their members, makes all the sense in the world to me. Alright enough for the question [xx] hold the motion for one moment, Senator [xx] did you have a question? I was just following up with Senator [xx] questions seems like I would remember this is been such a moving target besides [xx] but I thought we had conflict of interest provisions or some reference to some provisions that impacted this board if is the same board that we originally put in that has and may be it's another board whether you were paid who you worked for, and all that could I [xx] recall any [xx] if it was different board Do you have, anyone have answer to that? The charter school advisory board [xx[ and other state [xx] so would be covered under that [xx] That good question, they all cover Well thank you, I have a motion, a motion from senator [xx] adopt the amendment all in favor say aye, Aye! Oppose no, the ayes have it and the PCS as amended is before you. Do we have any question from the committee, senator Robinson Thank you Mr. Chair I want to ask Senator Tillman the earlier provision and I can't found then here that that the house had in the charter school application be valuated based on content and its substance, it will allow the applicant to address the charter school advisory board, is there still in here? Absolutely.  Okay, [xx] yes I could You may be denied, you need to have a chance to back and talk to the board about why you were denied not just be denied and say good bye. Staff have classification that if you could [xx] you could you clarify Sure we actually the house provision are not longer in the proposed committee substitute Follow up Mr. Chair Follow up is what is what I want too. Follow up, Go ahead. Senator Robinson go ahead and ask your follow up.   The house provisions are no longer wo where are they or why were they taken out? They are not in this PTS.   Well, you're not both the surprised We'll work on that, the day is not over. Alright, do you have any further questions on PCS Senator Coke. I'd like to move her favorable opinion, yeah. Opinion. Great, alright and for that. Mr. [sp?] Does DPI have any role whatsoever with all the schools that this bill is inactive into law? Not anymore. Followup question? Followup. What is the staff capacity of the state board of education? Would you ask that again? I know that DPI's an agency and they have staff people to do what I know that the state board exist and those folks do a lot of good work but what staff does the state board have in order to carry out this work since we're now charging it with oversight of the charter school program. Well that's a good question, very logical question. We will take the $928, 000 and state board here. You get the staff you need, you get the funds and you operate it. Senator [xx], I think you've brought a question that is a great question, staffer actually has an answer that could help clarify that a little bit for you. Thank you Mr. Chairman With regard to assistance from DPI

for charter schools, charter schools would still be able to work with the department, the department would still be required to help them with things like special education services, testing and accountability services, finances and business services. These are all things outside the office of charter schools that currently exist that are assistance offered by DPI to charter schools. [xx] Mr. Chairman, follow up question. Follow up. Senator [xx] why do you think that the state board will do a better job than DPI, what has DPI done that has satisfied you? Charter schools are a relatively new thing in North Carolina they're having growing bangs and this the BPI was never in love, contrary to what you may hear with charter schools. Now there are charter public schools, so they are public schools. But we found more than one incidence, in fact if we had time we could recount some whether there have been an obstacle to the objectives of charter school education, and if there's an impediment there I want to remove it. Folks, they are bonafide public schools, and as such, I want them treated exactly that way because the market determines whether a charter makes it or not. You send your kids where you want to them to go to get the right education, if they don't provide it you go back to the public school and the market will dictate where they go and the public schools is entitled different, you're required to go in a school you leave. You got no choice unless something came along like charter school, and if something interferes with that choice, I'm for getting rid of the impediment. [xx] follow up what is DPI done wrong? Just help educate, that means they're doing a bad job, but maybe I'm not against this field but I don't know. I don't believe in just shifting the tares on the Titanic without explanation. We'll I'm not going to give you the details, a good law you would never do that in public and I'm not even a good lawyer. I thought that's what we did here. Let's go ahead and go through the Chair. We don't air our dirty laundry here. There is a good reason to do this thing and the charter schools need all impediments removed so they can flourish if they're going to flourish if they don't they'll die on that and be closed. We don't close public schools. We close charters if they don't perform. Alright, we do have a motion before us, it's a motion that's favorable to the PCS as amended role into a new PCS with favorable report to the new PCS in unfavorable through regional Bill. Any further questions? Seeing none, all in favor say Aye. Aye. Opposed No. No. The Ayes have it and and thank you very much Senator Tillman. Next bill we have in front of us is House Bill 709, and I have Representative Martin. to come up and explain one line. Representative Martin, please go ahead. Thank you very much Mr. Chair, Senators. The bill you have before you just makes a slight amendment to the existing tuition assistance benefit which we provide to members of our North Carolina National Guard. It doesn't provide any additional funding for it, it just adds one additional category to what we already do. We currently provide tuition assistance to our guardsmen for four-year colleges, two-year colleges, graduate school, etc. This would just allow tuition assistance money to go towards guardsmen also seeking a graduate certificate be happy to talk more about it in depth, Mr. Chair. I think that's great for now as we do have a couple of possible questions. Senator Tarte? Yes, Mr. Chairman Chair, I guess the first question is whether this was a request of the Guard or not? Representative Martin? Yes, Senator Tarte it sure is and Mr. Chair, we do have Representative of the Guard here happy to talk about it if you need their assistance. Great, thank you for that, we may or we may not. Yes, follow up? Yes, just at the appropriate time I'd move for a Favorable. Great, thank you. Senator Davis. Thanks Mr. Chair. I do support the bill, I was just trying to understand if we're using this and the existing funding sources do you anticipate additional, I'm just saying it would seem like certificates would be more readily available than to graduate level degrees, and I'm just trying to make sure that that funding, anticipation of the funding would still be adequate. Representative Martin. Thank you, Senator Davis. Just to be clear too, yes this doesn't provide any additional funding. What the Guard is finding, is that they're finding an increased demand amongst their members for these graduate certificate programs. So it represents a little bit of a reduction in demand for graduate courses for four-year degrees, although those are certainly still popular that what

they are funding is that this is a growth area and they are working to recruit and retain guards men this is something that they want to out of the plan. Certainly, if we want to pay for its a general assembly, if you want to we can pay for a 100% of tuition and all this programs that start to get kinder expensive so as with everything there is a balance. Senator Brian do you have a question? I just want to ask what a graduate certificate is just I'm I hear to plea ignorance, but so I can be sure. Yes representative Martin. Thank you Mr. Chair and Mr. Chair if I stumble on this answer feel free to have staff throw me a life burden, Senator Brian don't fell like ignorant I was not really sure what a graduate certificate was until the guard ask me on this bill also so I have known one is for about three months now also, it is a graduate level course work that student pursue not, it doesn't go as in depth as a degree program but it does carry academic credit generally but not always can be eligible for other types of federal tuition systems all but I can give you some examples just from NC state some certificate programs they offer. Environmental assessment, energy and technology, finance marketing, counseling, mathematics, non-profit management, supply chain management and so forth. Right thank you and Senator Raven, do you have a question? That sort of answers it, thank you. Great thank you. We do have a motion for a favorable report, any further questions? Seeing non on favor say aye? Opposed no? The ayes have it, and the motion passes. Thank you Mr. Chairman, thank you members. Thank you very much. Yes, I will handle this on the floor. And finally we have senate bill 554 school building leasing reform. I think, I don't know if Senator Meredith is prepared? Yes this is going to be for discussion only we going to discuss the bill, have some questions we do have some for the public to comment on this and senator [xx] is recognized to explain these. Thank you Mr. Chairman, members of the committee. I'd like to first thank both chairman, senator Tillman and representative Szu Check of we've meet numerous times on this bill and I want to thank them for the opportunity today to discuss this bill but they have spent a lot of time on this and looked at it and thanked both the chairman for this time. So with that said what I would like to do basically is discuss very briefly what the genesis of this bill would do, current law says if you cannot pay capital projects with operational savings and what this bill will do would allow school system to consolidate and set up operational leases and with those operational leases they can be paid with capital expenses. So the efficiency that are gained by closing schools that are either inefficient or might not have enough students in them. If you've maybe 35 schools in a district and you got maybe a 50% FT that students are 50% in each class, you can consolidate schools, build new schools with operational license put all those students in one school and of course that will reduce all the staff whether it will be cafeteria staff, whether it be instructional staff, it will just help schools systems to build new buildings and consolidate old buildings. Of course I've said early the bill would allow districts to consolidate and then pay with the new buildings with the savings. So the savings from the old buildings if you had 35 buildings you can bind those buildings, some of the savings from operational money could be used for capital expenses and currently now in law you can not use operating expenses for capital expenditures. This will help a lot of small counties like Washington, those hyper the small counties will really be helped by this and also the large counties. There's going to be billion and billions of dollars that are going to be requested in the future for school construction and this will help alleviate those bonds and those requests for state for billions of dollar for construction. This could be done by operational leases so the state would not have the impact have to pay for the capital cost for this new construction buildings. So Mr. Chairman that's kind of a brief overview of the bill, so if you may be recognized That's great, thank you I appreciate that. Let me see if we have questions from members then we have members of the public. First Senator Wade I'm going to have to divert a lobby property [xx] is familiar, thank you.  Yes. Ma'am. Senator Meredith[sp?], could you just give us a real life example and how would it save money and I imagine this is in your area so what will happen to the old building that they'er not using we have

someone, thank you for that question, I would respectfully ask the chair recognize Mr. Felloshom[sp?] from [xx] has done some of this in the past so he can speak specifically to some of your questions. Yes, please if you could come up to the microphone identify yourself and who you're with and if you need the question repeated we can do that as well. Thank you Mr. Chairman I'm Robby Pierce with SFL Architects and to your question, a real life example would be in Washington county. They have five schools, they're old schools, they're very old. There newer school is just has got terrible mold problems and they have declining population so some of there schools, one of there schools in particular has only like 200 students in it so they need to consolidate five schools in to one. They don't have the bonding capacity to do that, if they were to build this buildings the traditional way they would have to literary more than double property taxes so this is an opportunity to bring those five schools together and actually two schools, the K8 and a high school, in the case of Washington county they can pay about 85% of the lease payment with savings, so it's really about creating operational efficiency and then using that efficiency to to pay the operating lease payments on this brand new state-of-the-art school. Follow up. What happens to the old school? I'm sorry I didn't answer that question. You didn't hear it? Yes, she asked what happens to the old school. The old schools would be either torn down or they would be disposed of in the manner that all public property is disposed of through the county. Thank you. Senator Smith, I saw your hand. Yes, thank you Mr. Chairman. On line 27 and 28, it says that the leases would not be subject to the requirements of GS 143. What is that that they're not going to be required to do? Staff could you expound on that please? That references to design build bridging contracts, and that statute defines design build bridging as a design and construction delivery process whereby a government entity contract ask for design criteria services under a separate agreement from the construction phase services of the design builder so it would not be subject to that and that's really totally understandable. [xx]. Thank you Mr. Chairman. When you take the four schools out of operation all of the expense that you have had maintaining and upkeeping those buildings tapping those buildings, tapping those schools. You have some first year savings that won't continue. You have savings that you can take advantage of by the consolidation, you have a principal salary, you had four of those and you won't have those anymore, you just have the one in [xx] but to some of those expenses, some of those savings won't continue because once you get into your new school you're then going to operate based on that school's needs and that school's staff and that maintenance needs and I'm not sure you will get the same. You will not get the same funding to continue those old schools however you will achieve some ongoing savings. Will that ongoing savings be enough to make these lease payments for the new school? That is a question that you've dealt with this things before but we've never done this in North Carolina. We've never converted current expense to capital, so that's the biggest thing in this that we're doing which is never been allowed before but, is that savings? Some of it first year savings, will that be enough for those ongoing 30 year, or I don't know how long these leases for, will that keep up these payments going or will you have to borrow additional money? Well, we've only Go ahead if you could re-identify yourself? Okay, I'm [xx] with [xx] Architect and in the [xx] or the business models we've looked at that we've taken into consideration only the long term savings in order to pay those lease payments, and if there were money required from the county, let's say if you had a payment that were $3 million a year and if the county had to put in $102 thousands a year, that's known up front, and the commissioners have to vote on it along with the school board. So that $3 million a year and if the county had to put in $102 thousands a year, that's known up front, and the commissioners have to vote on it along with the school board. So that commitment is made up front and

then locked in for the entire term of the lease. I'm glad to hear the commissioners do have a vote on this [xx]. Thank you. Senator [xx]. I have a couple of questions, first if I may address into this speaker? Yes please. First of all, how long is the period that these savings would be used? I'm sorry, but, just for our records if every time you address if you could just please identify yourself again.  I'm Robby  [xx] architects and savings would go to the benefit of making the lease payments as a term of the lease. follow directions but. Sorry. That's okay. These leases will generally range from 20 to 30 years and it depends on school district's ability to pay lease payments. It could be shorter or it could be little longer too. Follow up. Follow up. Thank you.  It sounds like a very good plan sounds like a very good plan, in fact it sounds like maybe we will be spurring the construction of schools in North Carolina do you have any feel for how much if any extra building in schools, this would generate? That's a great question and it would be drastic, we currently know of about a billion dollars worth of schools that need to be built and that currently can't be built unless this bill is passed. That's a billion dollars that I know of right now today. Thank you, Senator Wells do you have a question? Yes, a question for staff, just so thank you addressed in section three but using this device is the tax treatment sales tax pretty fast identical to [xx] in school, staff. I'm going to point on that question. I'm not qualified to answer tax questions for you all it does have referral to finance so what section three the way it's just on it's face it just says that it would add the developer to be able to get an annual refund of sales and use taxes paid by under the article so it would just add it to the list of entities that are eligible for that but beyond that I don't feel comfortable talking to you about the tax information alright thank you staff. Senator Bryant I saw your hand up.  I had and one of them is it seems like I remember didn't we have a earlier presentation on this? Maybe I'm dreaming You look like this is not the this type of issue has been discussed here. That's what I was thinking, and I just to be reminded of what, just describe a a little bit about how the list works and what ultimately happens, I'm assuming the LEA never really owns the building and so over the life course of the relationship what happens in terms of the building? We're the new line of questioning with a new person if you could, you can identify yourself please. Okay, I'm Roby [xx] with SFLA architects, so to answer the question the school district will generally have an option to purchase the building after five years so after after that five years they could purchase the building or they could choose to lease it for the entire term of the lease it's completely up to them and that is completely negotiated I would say that the county commissioners and the local government commission would have some say in that conversation because this also has to be approved by the local government commission A follow up Follow up So when they lease it for the term then what at the end of the term. There're a number of things that could happen that would again be negotiated but generally, this building would be built on land owned by the county commissioners so the developer would lease the land from the county commissioners and then lease the building to the school district. So at the end of the land lease, the building would go to the county commissioners and then the county commissioners could choose at that point to give it to the school district. Okay so, follow up. Follow up.   So they basically will end up with the building the county will They will and it's very likely that they would exercise their option after that five year tax credit requirement is over. And I have one other question Mr. Chair.   Yes go ahead. And that was following up on the question from Senator Smith about design bridge and I know you were saying you weren't qualified Dr. Shawn, but I was wondering if someone in here is qualified to say, how is this

new leasing arrangement we're approving different from the lease provisions that we are exempting it from if I could get a description of, how would this design build bridge system be different from what we are approving today, anyone who knows? If you have a question or answer to that you can address that. I can all this is doing excluding design build bridging from the multiple options available in 143 section article eight section 143. I think I got that right, and I've talk with a lot of people about that sentence, I can't find anyone who feels strongly about that sentence being there. I think that there was initially some confusion, that this bill automatically met design build bridging for some reason, and so that was added to clarify that it is not design build bridging. What is design build bridging? Design build bridging is when a client hires an architect to develop a conceptual design or it's called a set of bridging documents, and then that client gives That is it, a bridging document to a design builder and says here is an idea of what we want, come back and give us a full set of. Drawings and build a building that looks generally like this one described in the bridging documents, does that answer your question? And I could also address the sales tax if you would like me too? [XX] if you did it please. Okay so under current law counties can apply for sale refunds of the sales tax pay from materials purchased through school building. So the county submits a form to the state and the state refunds to the sales tax. The developer can also do that if there building school, those who of you who know about Centigraph[sp?] we build that building we own it, we also apply for that sales tax refund the same way the county does in fact the county is partner of that process. All these does is clarified that sales tax is refund is available and it saves a lot of money and going through the process that process cost about $200 on Centigraph and with this clarification it don't cost anything. So it's just again it's all about saving money cutting out all red tape so that we can streamline this process. Thank you Senator Tilllman did you have a question or comment? Just one follow up, if there's a default on the lease payment what happens? Go a head answer yes please. So this is Robby[sp?] Fraser[sp?] with [xx] architect and if the school district doesn't pay the lease payment was that your question? Yes default can't pay. So they default, technically they could be asked to leave the building in practical terms, I think there would be a work out and it would be no different than any other school financing, for example if you issued a school district certificate of participation and the county or the school district did not make this payments which incidentally are lease payments or treated as lease payments. The school district would again then I have to leave the building. I can say that, after they have turned the building back over the years, there was 800 children out there. I did not know there is somebody else [xx] that is going to have to pay now, if the county commission know, since they are responsible to the school bills. Now you are going over and taking some stake money, if this was to pass. Is the stake going to be responsible for things as for the answers, you are using some principle showers[sp?] and so forth. And there is not going to contain showers [xx] of those four schools except there for the first year. Then you are raised. The saving you get from there [xx]. I want to know who is on the learn for there was a school system [xx]. The county commission generally holds title at the end of the day. Is that who are the tax payers going to run for them? So, this would have no any difference than any other financing, and we actually members of Senate [xx] to tell my maths session we try to get what course the state intercept, task[sp?], there're a number of schools districts that wanted that but local government commission did not want to do that and what that would have done is to be able to say that if the least payment don't get paid that the stake would take money that would otherwise be sent to the county to make a least payments so that the kids wouldn't be out out on the street and the LGC didn't support that and I don't remember all the details of why so in this scenario this is no different operating lease is no

different than a certificate of participation. If the payment isn't made then the property can be taken back or well, it's not repossessed, it's just simply that the building owner let's say me in this case could take that school and ask the students to leave. Well no, somebody's got to be on the hook, and that money is going to be paid because you are not going to put the kids out and my question is, who do you collect from then? There is away and it's got to come from the county commissioner and funding it with property taxes, somewhere this is got to and you're not going to put the kids out. That's what I want to know. So there's currently only judicial relief, in other words you got a call, I believe. I believe that's the correct answer, I wish that wasn't the aswer and I would love for the legislature to consider and intercept because I think it's the right answer to that question but we don't currently have that available to us. Alright I've got a few questions lined up here and we're beginning to bat up against this, I got Senator Wade, Rabon and Stein and then we see if we may have someone else from the public who'd like to speak. Farringer you should slow down. Alright, go ahead senator Wade. Thank you Mr. Chairman, this is for Senator Meredith Senator Meredith I think that's a good idea to help ares that are more rural and they don't have enough students that they put together, what happens in an urban area? Can they still use operating expenses if they have one school that's overcrowded? Maybe another school it's needs to baby, have some work done to it, let's say that's not overcrowded, it has some additional spaces and they decide well let's just build a new high school and put all the kids in the new school. Would they be able to use operating expenses also? Yes Ma'am, and I think Senator Soucek I think that was one of the things that he and I discussed in detail is about, the operating expenses versus capital expenses and currently it's not been used like that, but I think if they had a need and the county commissioners and the school board met and agreed, and that they could meet with a group that would build a building they would lease, I'm sure that there's opportunities out there to lease buildings for just Hudson area, yes Ma'am. Senator Rabin. Yes, my question's for Senator Meredith. I have heard in the last couple of years for sure that we're short of schools, we have trouble building them, we don't have money to build them. This seems to me, and I'm asking you as a business person now, a cost effective way to bridge that gap and Get the schools up and built and operational so that the students have a place to go to school this matter. All the other stuff are details that can be worked out the core issue is, this is any means by which we can alleviate the strain of getting enough schools built to take care of our growing population. Is that a fair assessment?  Yes sir, thank you Mr. Chairman, yes sir Senator, and also that there is the money to build those buildings, the billion dollars or whatever it might be would not be coming from tax dollars, the full billion dollars. Yes sir, that's a good analogy, thank you. Senator Parenger, senator Stein go ahead. Thank you Mr. Chairman. I was going to say a comment along the lines of Senator Raven. Different counties have different circumstances, some have property tax payssuch that bonding will be the lowest cost way to finance a building, other counties don't have that capacity and the way I read this bill is it just gives School Boards another option with which to meet the needs of their citizens and no school  is obligated to do this if this project doesn't make sense for that particular county so, I like the fact this is an innovative approach to giving counties more options to deal with needs which differ. I mean some counties, Senator Raven, they don't need new schools because of growing students populations, the number of students are actually shrinking but the buildings are so old and to crap it they still need a new building, and then to Senator Tillman's comment on what happens if the county doesn't pay. school boards into leases for buildings today, they have the authority to do that and it's just like any other contract where a public agency leases private property, but if they fail to abide by the terms of the lease, the leasor has whatever legal remedies are available to get paid and if they fail to get paid then worst case scenario they can take the building back but we surely don't expect our hope that ever comes to occur. Right thank you Senator Barringer thank you Mr. Chair question to our speaker please? Yes go ahead. The question I have for you is you mentioned the five year mark as being a time when the school system might buy the

building back, can you explain to us why the five year mark is so important? Again this is Robbie Peterson[sp?]  SFL Architects and one of the components, one of the saving categories in projects like this is tax credits. Most tax credits have a tax credit burn of period the maximum of which is five years and actually the State of North Carolina tax credits are driving that, so that's where the five year period comes in. If, there were no tax credits contemplated in a particular project that period could be less it could maybe be three years that through the federal tax credit and I just wanted to say to Senator Tommie[sp?] questionnaire comes like 33 states that have intercepts? That's as of last session last year and again I think that's a conversation that really should be heard again. Thank you. Thank you, and we do, we are [xx] against the clock. We've had a very good discussion, we got some great input from the public, but if there was someone else from the public that want to speak that has an issue that really hasn't been addressed at all here, I'd like to give you an opportunity, but I don't see one. Let me go ahead and Senate Davis, do you have a question? Okay, another issues other than this Bill? Okay, let's do this, lets watch the discussed on air [xx], Thank you very much there're great question from the committee and I appreciate the organizations that brings this forth and the reason why we brought this up again is, I think the reasons why you have been treated by this is we're always looking for low cost innovative ways to deliver education as best as we can. One of the challenges here is that and if you work in the budget committee how complex our schools funding model and this does alter the funding model and trying to look at what the long term implications of some personal issues using for capital have some implications that we're not completely comfortable with and come to grips with. So we bring the keep bringing this up because we love the innovation, but we want to make sure that what this looks like long term for the whole state is a good idea and that's a little bit the idea behind why we're bringing this up and hopefully this is, intrigues some of your interests so that we can pursue what these concepts looks like. Senator Davis. Okay, Thanks. I wanted to go back, just point of inquiry of the Chair on House Bill 334 have we passed this? But to my knowledge I don't know if there was a serial referral and even though there is a transition of funds my question is, would there need to be a referral to the appropriate systems? There's no.   Good question though.committee, thank you very much, great engaging conversation. The meeting is adjourned.