Good morning. Thank everyone for coming out for another delightful edition of the House Committee on Finance . We have pages helping us today, Kayle Robison from Mecklenburg County sponsored by Paul Stam hey, James Robinson the third from new Hanover Representative Brisson, Nicholas Walker from Kapparis, Beverly owned, welcome to the finance committee. We are ablely assisted today by Richie Sales Marvin Lee Kerry Marglow and David [xx] sergeant of arms [xx] is our clerk staff today is [xx] with us you will be I'm sure, yes I know. Jonathan Tarte, Brian Snitker[sp?] Greg Rooney and I believe Cindy favorites also I'll say is the designated hitter today. First bill will be SB 313. Now, I've got an announcement on this. I've understand that a lot people had brought forth amendments that were not disclosed to the Chair, someone even proposed to PCS, there is an omnibus license bill plate being together in house rules and redirect those amendments in the PCS to that body, we've a couple of terms and civil issues in the senate bill, if we loaded it up it ends up going to conference committee assuming it passes at all, so the chair is not accepting any amendments for PCS on this bill. Senator Bingham you're welcome to the house sir. Senator if you'd like, I can have the staff explain because I know we've messed with your bill a little bit. It would be nice if they would explain the. Try to explain your original bill and we'll have explained it changes the original bill that I have learnt is was requested by the registrar deed association this last licence plate is already available, but the, in a similar to the enforcement and how it traveled military but what had happened was, it was not a designation as to what would be considered a retired register of deeds so this this does actually just clarify that and that is a person with at least 10 years of service as a registrar of deeds in any North Carolina county and a person who no longer holds that office for any reason other than statutory removal will be qualify for the plate so that was some of the concern and that was the original bill and Mr. Chairman if you wise. Thank you, Ms. Ebra[sp?] would explain the additions to the bill. Yes sir, it may help to explain changes that were made last session by the general assembly. Last session, the general assembly put in to the statute that for someone to be able to general assembly and request authorization for a special licence plate. They had to to submit an application to the Division of Motor Vehicles, meeting day and they had the application had to have the names of the required number of plates that would need to be, people who were interested in the plate before the plate come before the general assembly. Right now, the statute in most cases requires at least 300 plates, request for that plate before the plate can be produce. The general assembly has allowed some special licence plates to be on a background other than the first and flight background but in those instances it requires at least 500 requests for those plates. So what the statute did that before you can even come to the general assembly you have to show DMV that you have the required number of plates. It also said that any exist plate in the statute that is not met that statutory number of request for the plate within two years would be repealed so now the changes that were made to the bill and house transportation authorizes four new special registration plate that have met the new plate development requirement. They've gone to DMV, DMV has sent the General Assembly a report saying this four groups have the required number of request for the plate, and that's for surveyors, the Sheriff's Association, and their two different plates for Save the Honey Bees. It also reauthorizes The Military Veteran special plate in the order of the Longingly Prime special registration plate, neither of those have yet made the records of number of requirement so under the law they will be repealed, this re-enacts them and removes them from the requirement that they have those necessary numbers. It also provides the specific authorization for the Carolina Panther's plate to
be, instead of being part of the profession Motor Sport, to play it, professional sport play that has its own designation with an added fee for it. Are there any questions for staff? Representative Bill is recognized for a motion. Move, Move for report on House Bill, Senate bill 313. Further discussion, further debate? Representative [xx] Thank you Mr. Chairman, I hate to slow down the train. Is this the one which has the time sensitive or is it the one follow up. This is the one that [**] sent because some of those plaits have been basically expired and we are trying to get a reauthorized. [**] adjust the question, the bill sponsor very quick and just maybe figuring this apologies bring him home. There are kind of part to play, you talked a bout a four color play, is that within the standard of what we passes? I think last year you afford maybe a question for staff. Thank you will be better qualified to answer this. Ms. [xx] This bill does along with the military veterans plate and the order of the long way [xx]. Time plate removes the Carolina those plait from the requirement that the general simply did last year. Mr Chairman. Mr letter I have seen that plait it says Carolina panthers crossed the top, it's not like a full color plate so the numbers are on a white background and easily discernible. Representative Holley you also had a question sir. Just a comment Mr. Chairman before we vote and it's really not to the substance actually the bill but it could be. If I could be recognized for that? Certainly Sir. Thank you Mr. Chairman, and just the concern that we've decided to fast track this bill so some committee work would have been done on it, you refer to say would be done on another bill that will be going to rules and of course that takes away some committee opportunity to work on the bill and will force people to have to do things potentially on the House floor. So I think we're sacrificing a little bit of involvement of the committee for the expediency and I understand that the Chairman's prerogative and respect that but it is something that happens. So I just want to make sure we all know it. Well I appreciate the gentleman's comment, but I might point it out that I know there is a stack of amendments, none of them have been revealed to the Chairman, none of them have been revealed as of yet if people would like for amendment to be seriously considered, I think a matter of courtesy would say that you at least wave confidentiality 24 hours before so the chairman knows what he is facing. The bottom line is a lot of people want to mess this bill up. I don't want to see this bill die and I want to give the committee an opportunity to work in a consistent manner and not let's have a lot of political sabotaging games today, Sir. The motion before the committee is the approval of Senate Bill 313. Okay, seconded by Representative Adams so many as favor the motion say aye, those opposed no, motion carries. Thank you Senator. Senator Curtis I believe you were also under some time pressure today? Thank you Mr. Chairman, this is Senate Bill 386 and it simply reiterates that the UCC Filing Fee at the Registrar Deeds Office is $38 no matter whether it is filed with paper or the confusion is The Secretary of State wanted to encourage E-Filing so it reduces the Secretary State's fees to $30 and this says that that is only a $30 fee at Secretary of State's office and it will continue to be $38 at Registrar Deeds Office no matter how it is filed any question for the bill sponsor representative Hager? Motion [xx] Representative Davis waves, further discussion further debate, representative Hager is recognized for a motion. Thank you Mr Speaker, I'm not sure I got that bill since PCS or not but I'll make a motion favorable for senate bill 386. Seconded by representative Collins, many in favor of the motion say aye. Aye. Oppose no, motion carries senator Randleman This is senate bill 199 clerk will record, welcome to the house senator. Thank you Mr Chair and who says that you can't go home again thank you, thank you for allowing me to come today Senate Bill 199 will increase the amount of funds in a single account on deposit with the clerks of Superior Court which must me invested from $2000 to $5000. Under current law the
clerk of Superior Court is required to invest withing 60 days of received funds in excess of $2000 when it is expected that the clerk will be holding the money for more than six months. This $2000 amount have been in effect since 1971, with low interest rate these small accounts are not cost effective and your little to no return on investment. The investment and withdrawal process is very time consuming for the clerks and this will give some relief to them. The clerks are in support, the AOC, is in support, and I know of no opposition and this is the original bill. Question for bill sponsor, Representative Collins? Just a motion at the proper time Mr. Chair. Representative Davis, not quick enough Ted. Further discussion further debate? Representative Collins is recognized for a motion. Move for favorable of report in Senate Bill 199. Seconded by Representative in favor of the motion say aye. Aye. Oppose no. Senator Davis senate bill 273 you're going to be in time for session all of you, Thanks Mr chair for accommodating us today and to the committee members currently I am North Carolina taxes and tax at state level but trying to do it's the counties did so and this bill comes up at the request of Pitt county and what they are hoping to do is further clean up their books yeah and what the bill would do is allow the county to waive the penalties and fees part of local taxes again an attempt to clean up the books we wanted this as a local bill but we were informed as delegation that we needed this bill so what I would emphasize today is that this allows the option for all 100 counties but you would not be mandated to do so. I do ask for your support. Yes, Representative Stam. This is just a drafting thought that I have raised in a lot of committees. Whenever I see not withstanding any other provision of law, I soon want to know what provision of law we're talking about, and if possible to put that in rather because with poor lawyers, when you say not withstanding any other provision of the law, they've going to examine the whole general statutes to know what they're talking about. I don't want to do hypothetical thing right now, but clarify that on the floor would that bother you? OK. I think I want to ask does anybody want to take that one on? I would be happy to work with Representative Stam for an amendment on the floor. There is a specific statutory provision that provides that this can be waived, and we can cite that statute. We included this generally because the statutes regarding motor vehicle property taxes are all over the place because of tax and tags we wanted to be more inclusive to make sure we weren't excluding something. I'll work with staff Mr. Chairman. Okay, do you want to do it on the floor and hold the bill or do you want us to hold the server the next way? I don't want to hold the bill up. Okay, because we will meet again sir. Okay. Representative Adams, Representative Collins. Question or motion? Question Gentleman recognized for a question. To the bill sponsor, do we know how much money we are talking about here? I'm not exact, I'm not exactly to avoid the county but again this is coming at the request of the county, the board is unanimously in support of this Thank you. Representative Collins. Just a comment on the last of comment or a question if I might. The gentleman is recognized. I don't think we are in danger living in state and it looks like we're talking about county money is that correct? I do have another question. Gentleman I recognized. In written that one paragraph bill analysis that we have, I can't tell whether this is saying that the counties will be allowed to decide whether they are going to release somebody from the penalties and interest on a case by case basis and treat taxpayers differently or not. I'm curious about that did you. Look for that [xx]. Alright. Your are correct, it does not require them to adapt a policy, a single policy. It does require them to adapt the reasons why but it doesn't require them to adapt the uniform policy from our talking with the counties it is their intention to waive them all in a group as one Follow up. The gentleman is recognized to debate. Now that I don't trust every local government that we have
in North Carolina but I'd feel a lot better better it would remain specific rather maybe unable to maybe let my buddies off and let my enemies continue to suffer the penalties mentioned. Representative [xx] Thank you Mr. Chairman senator Davis why it was just mentioned that the counties intent to not make this flexibility in the sense of picking one task payer over or another for all tax payers why is the bill drafted than to just reference flexibility isn't that really about removing penalties and interests for everyone gentleman recognise again what the intent is they simply want to clean up their books and it is as we were talking about before more of a broad based approach and again we would like to see the bill move forward the intent originally was for [xx] local bill but if their is some clarifying language we are open towards that we just want to get the books cleaned up. Thank you. Representative Bell. A motion at the appropriate time OK consulted with staff on how difficult these two issues would be to address on the clarifications, and it's their opinion that they believe that they could do it in a single amendment and we could run that on the floor or we can displace the bill to next Tuesday at the sponsors. OK, I think the consensus says we are going to roll forward. Representative Bell is recognized for a motion. A motion of favorable report on Senate Bill 273. Seconded by Representative Adams. Representative Moore, were you tying to seek the Chair's attention? No [xx] OK. I think you're mistaking him with me. Representative Moore please observe the dignity of the committee and don't pick on the bill sponsor. Wait till he clears the podium then you can have it. Those in favor of the motion say aye? Those opposed no? The motion carries. Thank you senator. Thank you Mr. Chair and members. House Bill have to amend the Respiratory Care Practice Act, it's an agency bill Representative Goodman. Thank you Mr. Chair. Ladies and gentlemen this is an agency bill it amends the Respiratory Care Act to make some technical changes. Basically it changes the definition of unlicensed support activities. It broadens the penalties and remedies that the board may access to include an individual scope for respiratory care practice. It expands the grounds of the board to impose discipline, it changes the rules on issuing a license and there're several other technical things. I'd be glad to answer any question Dr. Bill Croft is here who is Executive Director of the Respiratory Care Board. If there are any questions I'll be glad to take them. Would you like to have Dr. Croft recognized to discuss the bill? Doctor Craft[sp?] .yes.if you would please state your name the organization. I'm doctor Bill Craft[sp?] I'm with the North Carolina Respiratory Care Board and I am the Executive Director. Did you have comment on the bill sir? I'm sorry the one of the major upgrades to the bill is the change in educational requirements which have actually been in place since 2000 after the bill was passed in 2000. This requires a minimum associate degree which aligns with the national standard, which is set forth by the National board for Respiratory Care. The other aspect of the bill is the change in how we administrate some of the complaints that we receive and how we pursue those against licencees. Further question for the bill sponsor or for Doctor Craft[sp?]? Representative Collins. I'd like to know if replacing new people under a licensing board is so who they're or why? representative [xx] Doctor [xx] Yes Sir, there is no additional individuals being placed under the licensing board, other than what is already placed on the licensing board. Gentlemen we should follow up. I thought I saw that in here, I will continue to look. Representative Jordan. Thank you Mr. Chairman, ask the bill sponsor? The gentleman is recognized.
Thank you. Representative [xx], could you help me understand something? It says in the summary that; HB 267 creates the North Carolina Respiratory Care Board, but it sounds like it already exists and we're adding to it. Why does it say it creates the board if it already exists or does it? Representative Goodman? Could staff answer that? Alright Mr Rowney[sp?] I'm sorry if I did that, what I meant was that it does certainly already exist and so that chapter creates it, and so this bill is updating that chapter but it certainly already exists. Does the gentleman wish to follow up? OK. Representative Collins, did you have a follow up? I think I see, it looks to me like maybe we're not adding anybody under a licensing board, but we are adding some people who are now under the Respiratory Care Board and can be disciplined by those folks, and I'd just like to know in the gentleman's opinion if this is something that's become necessary for public health reasons? Dr. Kropf, could you address that question Sir? I can. Can you let me know what part of the bill you're speaking about? Well I was looking at, excuse me Mr. Chair? Certainly, Representative Collins. I guess it's the, therapeutic effectiveness of medical equipment used in respiratory care treatment for an individual patient, looks like people who practice that have been added under the governance of the North Carolina Respiratory Care Board. Is the gentleman gentleman referring to bill explanation or the bill itself? I'm actually referring to the bill itself. OK, which page and which line? Well they're defined on page 2 lines 20 and 21, and if not mistaken I think later in the bill they come under the Respiratory Care Board, is that not correct? I think this is talking about who's being added under the auspices of the Respiratory Board I believe. Dr. Croft, would you respond? Yes Mr. Chairman. What this language actually does is clarifying the exemption under the exemption clause in the definitions. This was in cooperation with the North Carolina Medical Equipment Suppliers, they wanted a more clarifying language so we could ensure that they know what their people can do to not violate our act, and so their assessment is not something that a home care company does if they're not a respiratory therapist so the therapy assessment was put in there to clarify that gentleman wish to follow up further questions for the bill sponsor further discussion or the debate is there a motion? OK Ken Walters[sp? Representative Waddell thank you Mr. Chairman I move for a favorable report for House Bill 287 okay excuse me Mr. Chair, this is [xx] Representative Waddell moves, Favorable Report to HB 267 Amend Respiratory Care Act. Representative Davis, would you like to get the second in? thank you sir so many as favour the motion say I those oppose no the bill passes Mr. Chair ladies and gentlemen House Bill 287 a main insurance laws agency bill Center of Balm Gardener. Where's Diana? okay Thank you thank you Mr. [xx] [xx] recognized to explain his bill thank you Mr. Chairman Sir. This is a very simple two page bill, it's been on a long strange trip, it's been from appropriations. Start to that an insurance went through appropriations, then it went to J 2, It was on the house floor yesterday and re-referred to finance, and hopefully it will go back to the floor today [xx] is here if you have any questions about the insurance part, it has one small amendment to restore a tax deduction for fraud and theft from a retirement that section 8 and if anybody has any questions Jonathan Tour did the fiscal
analysis memorandum he can tell you about that, we are talking about a rounding error and he said if you look on from the fiscal memorandum, insignificant impact to the budget. He said it's too small to calculate the percentage we're talking about a small number of people. I would appreciate a favorable report so we wouldn't go back to the floor on this Representative Stam. Yes. You have a question? Yes sir. It's to understand what I saw last last the impact for 14 because this is retroactive is about $10000 is that correct? That's correct. But cannot calculate it what it would be for 15 or going forward, is that correct? I'm going to ask staff to respond to that please. Mr. Tarte. Representative Stam you're correct. So final question. Yes sir. Since this is retroactive and we need it to help a constituent of yours, wouldn't it good to limit it to 2014 so that the Senate doesn't consider this unraveling our tax reform 988 and takes care of your problem without introducing another problem? I think that a jet[sp?] Representative Stam I'm going to ask you to withdraw that question? I withdraw the question. Thank you sir. I'm sorry Jonathan I'm about to demote you to a representative, you get paid more than we do. When you say you could not calculate the cost is that because it is that undetermine or is we don't think it's immeasurable cost. What I'm asking for is an order of magnitude of potential cost Well, I'll tell you what we know, the federal level you have part of the atomized deductions are custody and theft loss you know you can deduct those three instead they are greater than 10% we are just gross income. This is a special provision, it is not subject to that here was some money made up provision at the Federal level to deal with specific situations like these and this has been drafted very narrow to only impacts those. We don't have the level of details to get down to those specific theft laws, that's authorized at the federal position. What we do know is that we've seen the tax records for representative Pat Gardner's constituent to it and determined liability is about 10000 we discussed that with department of Revenue Tax Administration who confirmed that they are not aware of any other tax in 2014 tax year that are impacted by this and that we don't have any data on who may be a victim in 2015 and forward. One last question. Yes, Rep. Stam. Here is what I'm concerned about. Suppose you have a Bernie Madoff situation in 2015, so perhaps you had 15 people with the same type of problem in 2015, I mean 2015 is not even over. So this is the kind of thing that would be spiky. It's not like medical deductions which you know what they are or other kinds of deductions. This is going to be a very erratic deduction. Just my opinion, just my opinion. I'd like to ask staff a few questions about this because I think one of the things I'm hearing here is let me posit a hypothetical. Someone's involved in an investment which is a taxable investment, they receive a statement of income which they file with their taxes on which they pay income tax, they do this for three or four years. It was then discovered that this was a pyramid scheme and all the supposed income was a lossery[sp?] but under our current tax law they are not able to go back and basically say I've paid taxes on $10, 000 each of three years for $30, 000 of income that never existed. What they have is in fact is a $30, 000 casualty loss which is reduced in offsets. So they've paid income tax on money that never existed and they are not allowed to go back and fully reclaim that as a loss, is that the way the current tax laws are stated?
Yes Sir. And the situation in which Representative Bumgardner is explaining is we have someone who has an illusionary income that does not in fact exist because it had been stolen as a result of a crime, and that he is facing a tax liability on an income that does not exist, but the tax laws don't recognize that it never existed, is that correct? That's correct [xx] North Carolina not the federal worth Okay It's almost like we're it would see moments like equity would say if you never actually had the money because we had that money because it was stolen, why are you paying taxes on it Is that essentially what the question address? policy issue, you got someone who didn't get that income on the subject tax, the only other thing that I can add I just [xx] in our research we do now that the total amount all casually and deaf losses again those are everything, storm damage is anywhere from zero to four million per year, this should be a small percentage of the four million per year unless you have Representative Stam, I think he correctly pointed out that with spite you don't know if you have another situation like that what I may have. Alright. I have Representative Collins, and Representative Bishop, and Representative Martin queued up and Jordan. It'll be a lot of fun on the floor. Representative Collins is recognized. [xx] comment if I might Mr. Chair. Yes sir, the gentleman is recognized. This is a great consumer protection bill, in a number of ways I wont get into all the technical aspect of the way in which it is as far as original insurance components are concerned, but I will say that as far as this question we're dealing with now, I don't think regardless of what it cost the state we should ever compound a person problems if they've had their so called financial adviser devasted financialy by the state gouging them for some more. If you've been a good saver responsible with your money and worked hard all your life and saved $500, 000 okay plan and then, suddenly your financial adviser you find out has stolen a lot from you then the state of North Carolina should come after you for another $30, 000, making your problem worse what we should do is go after the axes of the thief and if we are interested in recovering money we need to recover from the thief not from the person who's been stolen from, so I think this is great consumer protection I'd be happy to make emotion to perfect time Mr. Chairman I've got you need to be in the queue or do want to okay good enough representative bases did you wave offer if you want us no.come on in. I just think you had one comment and then going to act on the comments chairman made unlike say a mortgage interest reduction or even a medical expense deduction this is something that goes to the reversal of income, and so even though you got a question what period is called in and you might not even know state purposes, I may have to ask a question for the staff. If you have a deduction, deduction will allow without regard to the, a flow, something like that, would it be sad if you created a loss for could you carry that loss back and on the forward under north Carolina law? Mr Todd. Our loses are calculated based on at the end of year your total reconciliation of your expenses and revenues, you can carry your individual losses typically back three years. Follow up. If I can just. Continue debate. Thank you Mr chairman. Provided there are some flexibility if you got a prior period in which you recognized income and then you got a loss that is it right there, frankly reversal of that income, you can take the loss back and set it off against prior period, you might be able to take it forward in some cases. But it is totally different than something, and should be given more priority just as the chairman's question indicated then a tax preference item like some favorite type of expense just like a mortgages interest even a medical law. Gentleman are you through? Representative Martin. Thank you Mr Chair, and I have a clarifying question for the staff with an open inquiry I have received from one of my constituent that seems to be related and you are saying this is very narrowly tailored so want to make sure it's not picking up
this other piece you have you way dream losses and I had from a constituent who had been gambling and spends upwards half a million dollars of gambling every year and my heart aches for this person because they might loose 400, 000 and win 600, 000 and in the past I guess I could balance that out and take the deduction of their losses, and that is not longer the case and in other states you can balance it out and come up with just what the net but this is not going to address that situation, is that correct? That would be a separate deduction. So I just want to be clear about that. Mr [xx], you're correct and Mr Chairman I would like to clarify something on the previous question. Yes. I answered that with the respect understood to be talking about net operating losses and he specifically talking about the theft loss, I got lost thinking he was describing an operating losses. Theft loss can not be carried back, its an automatized deduction. It would only be going forward it might contribute to the overall loss but it won't be carried back. Okay, Representative Bishop, essentially what he's talking about is something normally would be expensable on Schedule C and the cash to loss will be on Schedule A. May I follow up? Yes. If the automatize deductions on Schedule A, showing on your return resulted in a loss. So automatize deductions contributed to a loss, with the loss be subject to being carried back? No, Schedule A doesn't go back, Schedule C does. Another comment. yeah, Representative Bumgardner. Thank you, Representative Collins for your comments, and this to what Representative Stam said going forward, there's no way to know whether this will happen to someone else. We're talking about one person now but we could be talking about anybody in any of your districts in the future. We have laws to protect consumers against fraud and abuse. The person that did this is sitting in jail right now because he can't make bail, and good. So, going forward do we want to penalize a person who losses their retirement account through fraud because somebody unauthorized took their money and now we want to let the state to go after them for penalties, and interest, and taxes. Even going forward and sure there's potential, things could happen, it could be a large amount of money at some point, hopefully that won't happen. So I think this is an important little piece of legislation and I would like to see it get through. Thank you. Representative Jordan. Thank you Mr Chair I agree with Representative Collins comments but I had a couple of questions for staff and I guess the first one is going to be the definition of criminally fraudulent investment arrangement is that under section 165 C2 and what is that definition? Yes sir, that would be under a code and there is a prethra of federal rules and regulations that define exactly what type of [xx] lose is allowed under that is very detail I'll be happy to share with but it is covered under section 165 of the code and the regulation of the internal revenue code. Follow up? Yes sir, follow up more of a practical question how is this sort of thing documented is it you're showing some accounts somewhere that that shows on paper an increase but turns out later not to be when an investigation is done can you help me live with the practical aspects whoever can answer if you can Representative Bob Gardner? N the case of the person that contacted me it was forgery. I think Mr. Todd with generic cancer. I can do with talk side. You get it they will end up with 299A [xx] pensions or retirement income and it would be important to [xx] income in there and as far as the legal side showing the fraud Been involved there Mr. Chair There're forms, I can get you a copy of those forms internal revenue called that they have to present, I mean there are specific forms that documented, that they would have to follow the ORS, and obvious happy to get those for you. Thank you am coming when you got. Nazaire would it be fair to say that, based on your legal opinion would
be that; the laws will be well documented and wouldn't just be on the statement of the follower. Yes Sir, it will be well documented Gentleman have a follower? Am coming. Yes Sir. Thank you Mr Chairman. Based on this, it's sounds to me that, the same cam really didn't ever exist on the first same place so I don't see why we would even consider charging tax on it, so this is a no [xx] to me. Thank you Representative Sam, Yes and I assistant, get sure to change your mind. If the limited to Representative Bumgardner constituent situation, I'll be in favor of nit but I go by the words on the page, not the situation and here is the big problem; I don't know the exact details but it's a case right now being run at Shallot, maybe Representative Bishop knows more about it and the [**] big lawyer who is collecting Hundreds of Millions of Dollars, from investors, in a crimely forajulate[sp] scheme to other people who lost, basic [xx], and am sure the person who did it is probably in jail, but most most of the people have losses or in it, because they were hoping to get profit from the losses of others. And so, if it were limited to cases where the taxpayer had no involvement in the scheme it'd be one thing, but I is not limited to that, you understand what I am saying? Do I need to explain Ponzy[sp?] scheme or what not. We're going to give you 20% on your money and of course the only way they get 20% of the money is that they pay the 20% to the first people who come in the next 10.000 who come in. So, this provision will also benefit people who are hoping to profit off a fraud of others and would give them that benefit. So I have an amendment drawn to eliminate representative Baron Galdner problem but unless he wants to accept it, we'll just have to discuss it later Representative Shuster To make a motion for favor report at the appropriate time Representative Collins just to comment if I might Yes sir Unfortunately in my town we had a Financial Advisor who was doing something very similar to what representative Stan[sp?] just mentioned. He was pretty much doing a poncy scheme, I think he didn't intentionally do that to begin with he had invested in something which turned out to be a bust and in order to try to cover for that he invested in something else which turned out even to be a worse bust he was giving people false reports on the amount of money they had fortunately a number of people who worked at one of the major employers in our area end up loosing everything they had in their retirement plans. None of these people knew that they were being add[sp?]. I certainly hope I didn't here from any of them. This actually happened a year or two, before I came to the general assembly, I certainly hope the State didn't go after the people if you lost $100, 000 to the sky. I hope they didn't treat him as if $100, 000 were withdrawn that year and I know the State Security set up an office in Iraq mount that they are working on it for six months in order to bust this guy. I have never heard of people investing on a poncy scheme who knew what they were doing. If you do I agree with [xx] should be rewarded for financial idiocy or financial deceit, but everybody I've ever come in contact with, who got involved in something like this did it, and should be rewarded for financial idiocy, or financial decent but every body I have ever come in contact got involved like this, did it in good faith and I certainly hope we're not going to penalize anybody, who thinks they are investing with a reputable financial adviser and winds up finding out later on they had their stolen. Representative Bishop. Representative Bishop. Thank you Mr. Chairman. On the subject of the Zeekler reward fraud which Representative Stam Zeekler is referring to and Ken Bell is the receiver in that matter the receiver has filed law suits against certain person who did make very large investments in the ponzi scheme expecting to benefit from it. So in other words the law actually doesn't allow that person to recover and I wouldn't object to a refinement of none of this. It would take such a person and would prevent them from being able to benefit from this, and in fact as the discussion has gone on a similar
distinction perhaps is we we're talking about the Chairman's comments earlier and some others that if you have a loss like this, it is a reversal of so there may ought to be some refinement, now I would conclude this way, it does seem to me that in the circumstances that have been discussed that, the relief ought to exist. So the perfect not the enemy of the good that can be tailored or improved in some way, fine but I don't think that's the reason not to do it now. I think you can come back and fix it a little bit later, again I I think it does stand apart from other types of tax preference items and therefore is appropriate to make this distinction. Further discussion further debate? Representative [xx] is recognized I move for a favor of the report of house Rose committee substitute for house bill 287 in favor of original bill. Representative Seth's removes representative Collins seconding that house bill 287 committee substitute number two amend insurance laws AB be reported favorable and representative [xx] will try to get this back on to today's calendar for you. Collins we're going to vote. Yeah. Let's vote, we are going to try to give it to him today but first we're going to pass it. So as many as favor of the motion say Aye. Aye Oppose, no. Yeah, are my guys, ask me a question and I lose my chain of thought. Shine the objects. Thank you sir. Thank you Committee, thank you. House Bill 394 Representative Goodman, increased options for local options sales tax Thank you Mr. Chairman. This is just a very simple local bill which allows the County Commissions in the Robinson County to use the local option sales tax for school construction instead of transportation. I ask for your support. Representative Hagger[sp??]. Motion for a favorable appropriate time Mr. Chairman. Further discussion, further debate, Representative [xx]. Mr. Chairman, Representative Goodman and I have discussed this briefly the bill and I think he knows and many on this committee know that I've always been concerned about the regressivity of sales tax, and so on this particular case it seems like you're saying the commissioners have asked for. in this particular case we're moving from a property tax potentially that could be used to which more takes revenue from the wealthy or the more well to do and shifts it to the middle income-lower income population. So my question is on this, is there, my question is really this that I get concerned about this and looked it up and Robeson County is not one of the highest counties among the 100 in terms of the [xx] rate. Robeson actually has a lower [xx] tax rate that Durham, and it gets ranked 272nd out of the 100, so I guess first of all from a policy perspective, do you think it's a good idea to move from property tax to sales tax? Particularly when the property tax well perceived is high as not high comparing the other 100 pounds. Miss Mary. Representative Goodman. Thank you Representative Luki, if someone lives in Durham you might not understand Robeson county the wealthy and Robeson county are either middle or lower income, generally property values are low there in, so they add below income tax does not generate big bigger amounts of money, but it is very big County, funding for schools is a difficult process, so actually what they are asking for is to be able to use the taxes to tax referendum, instead of transportation I don't think they going to have any mass transit system motion Robertson County to be able to transfer that instead for school construction. As you know lottery funds for school constructions had been reduced so they're just trying to find ways to fund their school system. Follow up. Follow up. Thank you for that explanation. I think this is not, I'd have to say members of the committee and Representative Goodman, this is not a very simple bill because what we're doing is taking a policy
that this General Assembly passed I believe about eight years ago to have, allow for a local option sales tax for public transportation and shifted to school construction, and that this really is a Statewide discussion and ought to be considered. I hear what you're saying in terms of your local needs, but we would be shifting the proceeds or the possibilities of how to use a local option sales tax from a policy that was heavily debated very controversial at the time to very quickly moving it to public school construction. So it seems, members of committee, that we ought to be thinking that this as much as your county wants it, I think from a finance and tax policy point of view, this is a really a problem to be moving so quickly at the end of the session into a new area. So it's just a concerned I have. May I respond? Yeah, go ahead, Rep. Goodman. This is not really that quick. This was introduced from the Senate in the last session. I they passed it in the last session and we didn't get to it. Robeson County, well counties are unique and they have different needs and what is appropriate in Mecklenburg may not be appropriate in Robeson. They are just looking for ways to fund construction of schools. The tax referendum is available, and they just want to transfer how they spend the money. follow up. Not this time. Representative Singh. Representative [xx] will this be subject to the redistribution plan by Senator brown? Description he's is saying the redistribution plan is in such doubt I would rather place my chips here on this bill. Representative Hager for debate. Yes sir, thank you [xx] [xx] questions and a comment. Gentleman is recognized. Representative Goodman, do you have a need for a street car or a rail line in Robinson County? Please. I think anybody that proposed that in Robinson County would be run out of town on a rail. Thank you. Follow up question? Follow up Representative [xx] alluded to that you were going to take county tax dollars, property tax dollars, and plan it would be is, does the bill say that or did you just say that you were going to use it in additional to that, what does the [xx] but does it also say that it would plant the dollars? There is nothing in the bill that says they're going to supply dollars. They don't I have enough funding now that a plan anything, so, this will be an addition to whatever we're doing. Mr. Chairman just a comment? the gentleman is recognized for debate. Thank you, and I appreciate what used to happen here in The General Assembly and how these [xx] for mass transit in [xx] county, or [xx] county or anywhere else. That just doesn't work guys, what we need in small rural counties because our kids can't compete with the local's addition that the Mecklenburg County gives to the teachers in the school's [xx] Wake County gives to that what they can use for [xx]. We need this option to be able to help fund our schools, we're at disadvantage at rural areas and our kids are suffering because without him and Representative Goodman, I applaud you for this. Thank you for bringing it forward. Representative Martin. Thank you, Mr. Chair. I just had a question for staff about and some of these has come up to the discussion of this should we be doing at the end of the session and one of these provisions in 12th 24 last year which was complicated by other things and this not part of the proposed senate budget plan, may be tied to the redistribution but may be able to be untied, thank you. Mr. Chairman? Miss Edward. The option described in this bill was part of 12:24 last session it would have been all 100 countries not just one. There is a provision in the senate budget that also this separate from the redistribution. This money under both senator budget bill and this one would not have subjected to that redistribution Follow up just a comment. I would move that we, I would support this Bill and think that overall that we generally need to be supporting of this policy. Further discussion further debate?
Mr. Chairman. Representative Luebke. Thank you Mr. Chairman, just a technical thing, item. Is it not true that the short title is actually I'm sorry, the long tile there is actually incorrect, because the body of the Bill says that the moneys could be used for public transportation or school construction and actually the title says in lieu of Mr. Chairman? Miss. Edward. I just, the long title I believe, is just trying to alert members to the fact that this is not increasing the overall rate that Robinson County could have. It is just saying that right now to achieve that quarter cent that it would have to be used for public transportation, so when we look at public transportation, it could be used for for construction. Follow up? Well that's good enough from Miss Edward, thanks for the explanation I've been working [xx] for so long I have no question about that. I did just want to address from a policy perspective. The fact that it was in 1224 last year, we all know what hodge price 1224 was and that really the items in there were not separately considered and it had so much in it that was undebated by this House that that's really a major reason why that bill failed. It is clear to me that this is a major policy change on the part of this committee and if the bill passes this General Assembly. Because we gave a lot of thought to the question of where that local option sales tax, how it should be used and decided on public transit and did so with support from rural counties that were aware that many of their low income people could benefit from a bus system. As we know, almost every county through social this is provide that kind of public transit in effect for senior citizens and the disabled. So when the bill was passed, I miss average of whether it was 2008 or not it was about then it was because counties really saw that they might well need have the need for public transit. I hear what you are saying Representative Goodman that this is a now see school construction as a greater need, then public transportation and I understand that argument. But I think overall this Bill should not move forward for policy reasons this needs to go to the Revenue Law Study Committee and have the Revenue Law Study Committee look at this as far as other options and whether using a local open sales tax force school construction is probably public policy and I understand what you are trying to do Representative Goodman but I think it deserves a wider policy discussion as to whether it's good policy for all 100 counties I cant support the Bill thank you. Representative Sayne. Thank you Mr. Chairman. Serious question, has the League or the County Commission Association or anyone like that given any support or are they here to speak on it? I haven't heard any of those groups or local county commissioners in Robinson County are Unanimously in support of it. I see Miss Williams from the League, does the League taken a position? please identify yourself for the record My name is Rose Van Williamson[sp??] and I'm the Director of Government Affairs for the North Carolina League of Municipalities. It's not weighed in this local bill, and as long as the delegation is unanimous from that area, and happy with results but I hear it. Okay, Is Miss Reiss [sp??] from the County Commission Association here? Or someone please identify yourself for the record Sir Thank you [xx] with North Carolina association [xx] apreciate [xx] working with local delegation we also don't typically take decision on local bills, but we do appreciate in working with delegates delegations, we haven't thank you again what representative Martin said, I think this kind of a local decision, local option, I mean it is what it is you have needs, and your folks need to find a way to find it vote for your folks and [xx] thank you. Further discussion, further debate? Representative Hurger is recognized for a motion thank you Mr.
Chairman I wish this was for all world congress and [xx] thank you very much I move a favorable on house bill 394 Representative Hager Moves, Representative Martin Seconds favor report House Bill 394 those in favor of the motion say Aye, aye, aye opposed no, no motion carries. Thank you Mr Chair members of the community. House Bill 490 Stanford tax authorization Representative Salmon thank you Mr Chair members of the committee this is a local bill brought our delegation by Lee county and the Stanford Business community it's a pretty standard occupancy Representative Salmon I think we have a proposed committee substitute on this. Motion by Representative Blest to the PCS be before us as many as favor the motion say aye, aye opposed no the gentleman is recognized to you need help on staff to explain the PCS or you conversant with it sir? This is the PCS I received by email yesterday? OK you're good with it thank you sir, as I said this is a local bill brought our delegation by the Stanford [xx] business community this bill authorizes the city of to live room occupancy tax on hotel rooms above 3% it also requires the Stanford to establish a tourism development authority to administer any proceeeds this bill allocates that all 100% instead of he normal two thirds to go to tours and promotion There's no known opposition to this bill and we do respectively ask for a favorable report and I will yield to any questions. Any further discussions further debate? Representative Lucas I move for the favorable report for the committee substitute on favor the original bill I guess second by Representative Cotham as many as favor the motion say aye, aye opposed no, ladies and gentlemen we have finished our agenda we are adjourned. Thank you.