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 | Finance

Full MP3 Audio File

On the agenda the day, we are going to pull off, we are going to pulll 647 dropping down and then we're going put the Newton's bill Sheriff's Association last and I want to thank our pledges for being here. I think we have a list of them somewhere, and here they're. Medication from High Point, first love Santa Barbara though that would be not sponsoring anybody over High Point. I need a House Bill from Lawrence Central Stand, Joe Rodry Rowly, Senator Nathan, Alexandria Dablin[sp?] Senator Blue, Christine Beard Gosper Senderson and Senderson and chase cross from Nathan, Senator Senderson. Thank you all for the great job you doing, I hope are learning a lot this week, and our Sergeant at Arms are Ed Chesler record holder of Carolina Rushing single game, rushing yards[sp?] all American, Marcus Kids and Dale Hobb. Dale was a [xx] he was a sheriff one time and he used to arrest a lot of people, they're here, thank you always for the job you do. We're going to take two Bills, House Bills first so we leave the house and we are going to take Millicent Hagard's Bill, Biller's exempt inventory, 168 House Bill that will be first and the second one will be water and sewer service ready to change the mellows and that will be the second one. If you'll step forward, Representative Millers, floor is yours. Thank you Mr. Chairman and members of the Committee, the bill here before you today is House Bill 168. I want to first thank Senator Brown and Senator Gun for actually working with us on this bill. I'll be very brief in describing at any questions that you all may have, more than happy to address very briefly. Back in the early 80s, this chamber, this legislature actually took action to actually treat the taxation of inventory when it comes to manufacturing for the aspects of retail at the point of sale. But it has yet to actually take the aspects of inventory when it comes to building and improvements to property at the point of sale. This bill actually works to do that from a residential stand point, I encourage you to look at the bill in regard to the definitions for single family residential as well as duplex. It covers where the aspects of property taxes that you actually have, the increase in value due to the improvements of the actual property, to actually be assessed at point of sale. So, this allows an exemption for only three years for the builder, and the builder actually as to apply for the exemption every single year in order to receive it. Just so you know the state of South Carolina has this in place, as a matter of fact there's an exemption for six years. So, I think our state is definitely behind in regard to actually treating inventory for what it truly is. I'll be happy to answer your questions you may have [xx]. Representative if you stop now you're ahead. Senator Brown I know that you want to make some comments on this bill. Just on the commercial piece that only deals with water, sewer and roads that does not include buildings, and is a five year exemption in the same criteria holds this with the residential palces [xx]. Alright, we've got a good explanation and I think that's fine and see if we have any questions first, I know we have got some hands over here, Senator McInnis, I saw you first, you're the earliest, you're not going sit back there. Thank you Mr. Chairman, since I've been here this is one of the greatest opportunities of economic development and opportunities of job development that I've come across for the building industry and I move for a favorable report at the appropriate time. Okay, that's what you wanted to do, I know Senator McKissick had his hand but I know he don't want to move for a favorable report. Senator, go ahead. Actually, I just wanted to ask one or to quick questions and bill sponsor may be able to help me with this. To qualify for this exemption will they be filing the same form in all 100 counties or how will this exemption process actually work? Will be a common form that's available from the tax offices in all 100 counties are an [xx] of this, is it specified when somebody has to get this in by so that they are exempted for e-care because it looks like it's an annual exemption. But it doesn't state anything further than that, so I'm looking for the specifics in details so that folks who want to qualify will qualify, we'll know how to do it. Mr. Chair, in terms of brevity I'll like to direct this to staff that way they can handle it. They know how to be brief representative. Staff jump on this. The part revenue may have data baker[sp?] maybe her,

if the Chairman had recognized him he'll be the expert. [xx] got an expert back there, if they have I would like to see him. Okay, come on. Yes sir. State your name represent, who you represent. My name is David [xx] director for the Law [xx] Division for the Department of Revenue. As far as the questions on the application statute 105, 282 is a statute that governs application, so this will need to be added to that to make sure that it's an annual application onto that particular statute. The state also requires the department to either approve the counties applications or develop one ourselves and this will be one of those that we would develop a form and then prescribe that out for the counties for all 100 counties to use. Very good. Let me start with one question, there's a follow up. Yeah, quick follow up. I was just wondering, do we know what the economic impact might be on our cities and counties, if there's a number that could be provided since they're the ones who actually won't be receiving the revenue. They want to speak on the issue either but [xx]. Well, do we have any answer? I don't have any estimate on the loss of [xx]. Webstave answer. Yes sir. Rodney. Thank you Mr. Chairman, Rodney [xx] and I have a memo that, fiscal memo that I think was passed out but we have a range estimate of 52-65 million and that includes cities and counties. The reason it's arranged estimates is to commercial piece was difficult to determine the estimate for. But that's based on a survey of counties, that The Association County Commissioners did. Thank you Ronie. Thank you. That ought to answer that question and now seeing, Senator Hise, you are next. Thank you Mr. Chairman. The question I have on this is by state law. It's always a contiguous time but we require counties to do a re-evaluation of all their property every eight years. Now I know a lot do it more frequently but we put it off as long as we can and have a big war when it happens. If the eight year property evaluation requirement falls in this time period, how do you evaluate a property? That the State Law is going to require you to do a re-evaluation or do you just try to come up with an evaluation like the improvements weren't there that would say it? How do you fulfill both of those, the requirement of doing the re-evaluation on the property, but not including what improvements may actually be on the property? Mr. Chair, out of brevity can staff handle it? Staff out of brevity, they will handle this. I think that what this new statute says is that the value of certain improvements including subdivision are excluded, and so when the county was to re-evaluate they're going to have to pretend that they're not there. During this period were that improvements to the property are excluded. So, I would assume when it comes off the rolls then it's going to pop up to that valuation that was set. So, I guess that the counties and the cities will be tracking two values. It's real fair market value under the current system and then this new system that's going to have a slice of value ignored or changes in the property ignored because there are really there is just that this statute says those increases in value are excluded, Follow up senator. [xx], but under that concept you said they have two values the new value that is disexempted would not then become a comp for other properties that had to be evaluated at the same time? Mr. Chair, comps always are to with sales. So, I don't, when there's a sale occurs this isn't going the statute is not going to have any effect so because assuming the new bar is not going to be able get it in this program. So, that going to reset value how[sp?]. So, there won't be any comparable sales data, I can't envision comparable sales data problems created by this statute. Alright, seeing no, seeing my favorite Senator, Senator Waddell. Thank you Mr. Chair my question is this seems to be limited to contractors because this is what it says in your [xx] list here. And 105 273 says a contractor but they are not the only once who are in the business of building, we're in the business of purchasing

and the business of selling and improving the community. So, some way that others, investors, other companies can be included if they are not contractors? Representative I think you know the answer to that. Very good question actual the actual bill size the term builder, and the term builder is altered for this aspect actually include those who doing improvement in these properties including actual building the home. So, it does get out where your actual sharing and is not exclusive to those who are just licence contractors, great question. Next question. Alright, I see no the hands, we've somebody from the audience who want to speak. If you do step to the mic back there turn the mic on, give your name and who you representative and there you have two minutes. Good afternoon Senators, I appreciate the opportunity to speak, my name is Marcus Kimray, I am a tax administrator here in North Carolina. This Bill obviously has a great support so I won't be so presumptuous as yes to think I can talk you out of it. But I would like to speak to some of the issues that we will have, tremendous administrative issues in dealing with this in the tax offices. Trying to deal with an excluded value and a non excluded value would be a mess, just quite frankly a mess. If you recall, Mecklenburg County have some issues with there 2011 re-evaluation and they weren't dealing with an exclusion like this. Imagine what would be like for tax office tried to deal with this, going forward. The process requires an annual application and if your permit me I'd like to try to explain very briefly the process. You got another minute. One minute yes Sir. Builders and developers can apply for this exclusion in the month of January, but the state statues allow them to apply all the way through the last day of the calendar year for good cause. But local jurisdictions have to set their tax rates and budgets in June. So, in theory developers and builders could apply after budgets and tax rates have been set, and local jurisdictions would have no opportunity to react to this. So, I would at least encourage you to require application with no exception in the month of January. So, local jurisdiction have the opportunity to budget for this exclusion. Thank you very much, we have. Mr Chairman could you repeat who you represented, I couldn't catch that. Tax collectors. Wake County. Wake County. Wake County. You don't want to meet a tax collector knowing you. We have one other speaker or two? State your name and who you represent sir? Rodney Dickerson, I'm the assistant town manager for the town of Garner here locally, and I'm speaking on behalf of League and the 540 cities and countires, I mean towns that it represents. And the cities and towns oppose this bill. The fiscal note shows loses to cities and counties between $50 and $60 million. Our tax assessor who just spoke estimate we could lose half the annual growth in this local area. The bill would hold residential property exempt for the three years and commercial property exempt for five years. Cities and towns would still provide fire and police services to these properties. So, I think it's important to note that we'll be providing different services although the properties may not be on the tax row. You have things like cooperate theft that police will have to answer to, fires of partially constructed structures despite not receiving more tax money for the properties. We could also be providing solid waste services if they, for example they wanted to go out trim more of their trees or they created some waste in some form, we would still have to pick that up. Some of these properties may be built because they are incentive by the bill, many would have been built anyway. So, we had hope the bill could be limited to apply in the area suffering from tough economic times, and we realise there some areas that can really benefit from this. But we're sorry that is not part of the bill, we don't see this bill as being a one size fits all. Thank you Sheriff, very good. Your two minutes are up. I do have a question for you though don't leave and I have a comment myself to make in just a minute. Senator Wells. I have a question for either of the speakers. Let's say a parallel example, a non profit hospital buys a doctor practicing and it drops off the tax role. In that the same kind of administrative issues that we are talking about here and while

the citizens County of Halla are talking about that. It is a similar issues, just size and scale and the scope. This particular bill applies to a vast majority of the new growth every year where as those of one on one situations. Thank you, good question. I will take proactive to our energetic one thought here. Those properties are worth very little until the bill erased all of his money to put up the project and put the sour lines in the streets and the lights and the gas and so forth. And that problem we want the whole lot on more to you, once it's put in operation and once this probations are lifted. So, you are going to get something much more viable in a place. You may have a short time to climb but then overall you gain greatly and, your money is not on the land but the builder's money is. That's why we are trying to take care of the day. One of other speaker back there. Could you give as the name, Mic. [xx] General Council of North Carolina, association restrained and I don't think I could say it any better than you said it. I didn't think so either. And I will shut up. Thank you. Saying no other hands, Senetor Brock makes a motion. I got from David Hall[sp?], he got from me, and Hall[sp?] got it from God. That was easy one he has a [xx] motion for a favorable [xx] and favour. Aye, any oppose? Passes. Thank you. Brown I believe you hard a bill on the floor my guess Rep. Millers you got one of the bills quickly. Thank you Mr. Chair I will handle the first two sections of this. We have a PCS and Senator Harrington moves the PCS. On favor, aye. Go right ahead Ray. Thank you Mr. Chair, the first two sections of this bill has to do with clarifying the powers of waters in civil authorities. It is house bill 538 Senator [xx]. The first section has to do with currently has the power to have sewer ordinance. It is unclear whether they have the power the to have water ordinances but since they are water and sewer authorities, we want to clarify that. The next aspect is about develop agreements, we want to make that's clear to make sure individuals are reimbursed for infrastructure that they are required to build even though that they're not it's regional also to the reward aspect this is what we are covering to for an aspect of vandalism. Any question you may have on these two sections is happy to answer. Let's hold right their, Senator Randleman[sp?]. I know you have a comment and I know [xx]. Section three Mr. Terry, if we could have staff take care of that section because that I'm not the sponsor on that section. Thank you Senator Randleman. Now see if we have any questions, I know we have several amendments and Senator Raven, Chair Raven. We will look at his amendment first. Their was about four or five. Thank you Mr. Chairman I believe the members have a copy of the amendment and this is actually just a little clarifying piece that will clarify some of the languages that goes on interest free loans and we will have staff explain it fully. But it's very straight forward and deals with the interest free loans that these authorities will be using. If you've heard the amendment No. 1 here and if we have any question first, let's see if we do whether staff needs to get involved or not, it's pretty straight forward. No questions, all in favor of amendment number 1? Aye? Aye. Any opposed? Alright, we got that one. Now senator, Senator Raven [xx] has an amendment. If you would senator, amendment two. Thank you Mr Chair. In order to, I'm not confuse everybody in the chamber, I'm going to ask Erica to go through this real quick. Alright, let's go through the amendment. Thank you Mr Chair. The Senator Sanderson's amendment would add a new bill section to the bill. The intent of the new bill section, would be to allow a metropolitan water district or a metropolitan water and sewerage district, both created under Chapter 162A, to engage in installment financing when purchasing or remodeling real or personal property. Currently, metropolitan sewerage districts which are also established under chapter 162A already have this authority. Alright is that clear? Any questions, alright no.

So if not, all in favor of amendment number two, Aye? Aye. Any Opposed. Passes alright. Amendment number 3 is being authored by Senator Cook. The man from [xx]. He can't even spell it. I can spell, I've been there. This is a very technical amendment, just some very minor changes to the words. Is really just really technical. Well, is that all you got to say for it? Okay. I push him and I believe you have something to say about the technical part. I do because this amendment applies to section 4 in the bill, and there was a sentence left in there. This was negotiated language which was the treasure office with [xx]. The senates was left into the original draft and it needs to be removed. So, this amendment [xx] removes the senate and if you have any question? All right we have a question for anyone on this one. Okay, a motion for favorable to the amendment. All in favor say aye. Aye. Any oppose? Alright next amendment. Do we've another one? Three's enough. Okay, now back to the bill. Senator McKissick. Here I was just curious, as he says a, one year kind of sunset on it, and we're moving the payment terms for a lot of these loans from 20 years to 30 years. I guess is to help somebody else with cash flow perspective and I support the bill. I'm just trying to figure out who it is we're trying to help, and what project it is now the spending if you could share that with us. Senator Randoman, I know you know some details. Thank you, thank you Mr. Chair. On the 2007 [xx] vulnerability list, there are 8-10 pounds that could benefit from this provision. The department is here, Mr. Sterns is here, and they may want to address the provision as to the departments involvement that are there are 8-10 towns, this could affect that will allow them to move forward with trying to address the water quality issue. Is not a water issue, it is a water quality issue and I know one of the towns in my district. We've been told that if they had the paperwork on their desk it would be the number one project in the county due to the water quality. So, it is beginning the process [xx] list the small towns to address the water quality issues. That clears that up as to who it helps senator. Can we have Mr. Starn speak to the committees, I support the bill and I want help those communities. I think it would just be good for us to know who we're helping out. \ Senator, who are you asking to speak? Edgar Storms. Former Representative of Starns [xx]. He's over there with the treasures office but Edgar go ahead, you've been around. A long time, he does a good count. Thank you Mr. Chairman, members of the committee I'm Edgar Starn with the office the state treasure. This is an attempt to assist Senator Randleman with the water project that they're proposing for the town Wilkesboro, North Wilkesboro and Wilkes County. It's a joint in a local effort and we support this language. Thank you, Edgar. Thank you. Any other question? Seeing none, we have a motion. Senator Waddell, thank you for being awake. We do have a motion for favorable report. All in favor, aye. Aye. Any opposed? Okay, none. Senator Randleman will handle that bill, I've got a feeling. Thank you. Senator Apodaca, don't you have a bill today? Yes, I do. Would you come forward and talk about Senate Bill 671? I'd be honored. You're going to help people out like people I know. Mr. Chairman, we have a PCS. Senator Apodaca moves the PCS. All in the favor aye. Aye. Opposed? Alright, PCS. Thank you, Mr. Chairman. What this does the finance implication is a $25 fee in order to put this into the DWI code and also the keep it [xx] after the cross over, so. That's why the $25 fees in it. Excuse me, there has been some minor changes made, Heather can you? We did this highway safety commission, Heather if you would. Yes sir, there were two changes made in the PCS, they're both on page one, lines 19 through 25 and the original bill required the individual seeking restoration to designate a single vehicle that would be driven by the individual and

have that vehicle be fitted with an ignition interlog. What this does is make changes at the request DNV to say that all vehicles registered in that persons name must be equipped with the ignition interlog and also further states that the person may only drive a car with a ignition interlog. So, there's the only changes in the PCS. Good Heather, Senator Apodaca. Alright the bills before you, the PCS's is before you. Seeing no other questions, Senator Wade. Senator Brian Webber[sp?], you were first Senator Brian. You made that motion, and I'm going to recognize you as making a motion for favorable as to the PCS unfavorable as there is no. Alright, we have it before [xx] now, all in favor say, aye. Aye. Any opposed? Alright, that's [xx] Raven you have a motion. Yes, Mr chairman thank you. I'm with senate bill 659 be removed from today's calendar and heard on another meeting. You had the motion, we are going to move this one from the calendar later. All in favor, aye. Aye. Any opposed? Senator Jackson did you want to, house bill 343 they left it, no they did not leave up here either, you are going to represent this bill today, house bill 343 excuse me Sir. That's okay, thank you Mr chairman, members this bill there's two things, one it extends the ATJ for the town of Clayton and its based on this section one and all parties have agreed to this. Section two basically defines the extraterritorial jurisdiction of Wallace and all parties or all in favor to this and I would ask for your support. There's no question but I see two or three hands going on this great motion here, Senator Cook, Senator Hise question. Just to check when you say all parties have agreed that would be the individuals in the ETJ who don't get a vote on the counts of other operation. Those individuals are okay with having those restrictions. Absolutely, everybody is agreement with this there is no opposition to this bill as I move it off. Alright, there you heard. Senator Cook has made a motion for the favor report. All in favor, aye. Aye. Any opposed? Alright, you're going to highlight all you say won't you? Yes sir. Thank you Mr chair thank you members. That would conclude our meeting today folks.