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Senate | August 11, 2015 | Chamber | Senate Session

Full MP3 Audio File

Senate will come to order, Sergeant at Arm will close the doors, members will go to their seats, members and the guests in the gallery will please silence all electronic devices, [xx] prayer by senator Dan Soucek of Watauga county, all members and guests would you please stand Thank you, please join me in prayer. Father, God, creator of universe, maker of men we ask for your presence here, we ask for your grace, your mercy, your wisdom that you grant us deliberative body and ability to discuss tough issues to always to remind ourselves of our place before the people of North Carolina and a place before you. Peace be with them, thank you for our families, please bless as we continue to be away from them, in Jesus name. Amen. Senator Pate is recognized for a motion.  Mr. President, the journal of Monday August 10, 2015 has been examined and is found to be correct. A move that the Senate dispense with reading of the journal and that its stand approved as written.  Without objection the journal for August 10th 2015 stands approved as written. Members leaves of absence are granted today for Senators Cook, Brian Meredith and Smith Ingram. Members we have a nurse of the day today in the back of the chamber, Nurse Lisa Serbii[sp?] of Lincolnton, North Carolina is here top serve the Senate, nurse [xx] please [xx] I apologize, thank you for your service today. Ratification of bills, clerk will read. No bill from [xx] foreign bills duly ratified for presentation to the Governor. Senate bill 199, an act to increase the amount of fund on single account on with the Clerk of Supreme Court, above which the excess must be invested for [xx] as per requirements. House bill 184, in actuality Department of Cultural Office of Archives and History to use the net proceeds on the sale of artifacts for maintenance, or conservation of other artifacts to clarify the process for transfer unclaimed, and undocumented property belong to museum and historical repositories. Those museums and historical repositories set a time limitation on confidentiality records, to clarify that photographs, and video recordings, [xx] or ship wrecks on public records in the custody of North Carolina agencies, and to provide a certain merchandise credit, or not deemed abandoned property. House bill 512 an act to allow time extensions for implementation of back up. PSAP requirement to define uniform statndards for back up the SPAs and to develop a master purchasing list for 911 system that will bill the expenses. Members we are ready to go into our calendar unless there's something else before we get to that. Senator Barefoot, for what purpose do you rise? Send forth a conference report. Send forward your report Clerk will read. Mr. President I come to support house bill 13, the bill entail to act presented to a public school for first time to admit submit proof the health assessment, to require the [xx] due to the failure to present the health assessment transmitting[sp?] form, not resolving suspensions and to allow and to make up the work neat, to specify what information shall be included in the health assessment transmittal form and who will authorize to have that access to the form and to requirement Department of Health and Human Services and the Department of Public Instruction to amend the Health Assessment Transmittal Form, to report the general Legislative Oversight Committee to Health and Human Service into the Joint Legislative Education Oversight Committee. Calendar. Anything further before we go to the calendar? Public bills third reading roll call, House Bill 117, the clerk will read. House Bill 117, NC Competes Act. Further discussion or debate?

Senator Brown, for what purpose to you raise? Thank you Mr. President. Just briefly I appreciate the good lively debate we had last night, I'm not sure there's a whole lot else can be said and I just ask for your support. Further discussion or debate? Hearing none question to the Senate, Senator Van Duyn. For what purpose do you rise? I would like to debate the bill. You've the floor. I listened very intently to last nights debate and senators I'm both [xx] spoke xxabout the unmet need in our rural communities especially the need for better schools, that is on high. Gentlemen an that is what [xx] to our state when we hear from businesses that they need to be successful. And they touched into a better educated work force, high speed internet and good roads. We know what we need to do to create opportunity for all of North Carolina and sales tax redistribution, the well intention will not get that job done. Our cities are not our advisories, they are our partners in economic recovery and they are the engines that are driving growth. Sales tax redistribution stifles growth and not just for rich counties. My county Wampum county, take [xx] We're not a baking hub, and we're not a high tech hub. What we do is we take care of people, the hospitals, one of our biggest employers and we have a vibrant tourism economy. Tourism is an important industry in many of the counties that are loosers in this game. And maintaining a tourism economy takes continued investment in things like police and fire, side walks and roads, to provide the infrastructure to support the influx of outer state visitors. The current sales tax formula takes that into account but this plan does not. Since 2012 we have time and time again given tax handouts to the wealthiest individuals in large corporations. Those handouts have resulted in severe cut backs on education and transportation. We currently spend $100 million plus on education than we did in 2007 in spite of the fact that we have 150, 000 more students. We need to quit pick winners and loosers those and we need to work together to meet our responsibilities state wide and address our biggest areas of concern, not by redistributing from one county to another that by making those collective investments that truly would make North Carolina great. Sales tax redistribution, is it this traction and then attempt to blame cities for the misguided cuts we have made since 2012 to programs that are necessary for all of North Caroline to thrive, thank you. Mr. President. Further discussion, further debate, senator Apodaca for what purpose do you rise? To speak on the bill. You have the floor. I live in a joining county, actually I served part of senator Van Dyne's home county and I'm just not familiar with the area she speaks of. We have a economy and the Henderson Transovania Bunkum area, growth some of the lowest unemployment in the state time after time after time, we see growth in the business sector. I was on the phone this morning with a company that wants to come into Bunkum County and add 350 more jobs over a hundred million dollars of investment. These jobs will pay close to $50, 000 a year. So I just can't sit here and listen to how we destroy this and that and everything else. We're on the right path, we're seeing results but we have to take everyone with us. We can't just have Bunkum County, Mecklenburg County, Durham County, Wake County doing well and our other county is not. And senator Brown, I want to thank you for leading this [xx] and let's look after everyone in North Carolina which is what I thought I used to hear Governor Easley say and let's just do something about

it, let's vote for this bill get it out and help everybody, thank you. Further discussion or debate, [xx] for what purpose do you rise? To briefly comment on the bill. You have the floor. Mr. President, my colleagues, we've had three counties at most four singled out as we discuss this bill, counties that are doing prosperous according to those who spoke on them. Now Senator Apodaca just said that the counties in his region are doing fine. He said Bucomb is, Henderson is Transylvania is. Now if Transylvania is doing fine and Henderson is like he says, then why are they recipient counties under this bill? They are recipient counties under this bill. The text their taxes revenue gain in each of those counties increased. On the other hand, on the other hand, let's look at [xx] County. On the coast, it's not doing so well. It's unemployment rate is up. The statistics were just released earlier this week and the unemployment rate is up in that county yet that county is one of those that's considered a donor county and its revenue will fall 6% so the only point that we've been trying to make is that it's not just those four urban counties that are losing under this tax plan. And if we're going to be responsible we ought to have a plan that looks out for the interest of the Brunswick counties, in fact similar counties that have high unemployment rates like [xx] County and Macon County and it starts a process that really aims this relief that we're trying to give to the counties that need it most and afford it most on the part of those who are giving it up. Brunswick County, with an increasing unemployment rate, can't do it. Avery County when the increasing unemployment rate ought not be a donor county. Alamance County, Moore County well some folk would argue differently about Moore County. Iredell County but sorry, Jackson some of this calendar that were listed yesterday, [xx] county a donor counties that have there unemployment rates increasing and we are saying some of the other were justified in taking resource from them. Maybe you can find a rational [xx] for that I can't and that's why I think that this bill while aimed at addressing inequity in the state goes about going it when it doesn't do it from general state revenues so that everybody can move forward by addressing the problem and not reducing counties that are already under stress. Mr. President. Further discussion or debate, Senator Apodaca. Senator Hise yield? Senator Hise do you yield? I will yield. Senator Hise I think I heard on of the counties up in your area mentioned and what we just heard. How are things going in your district? Thank you I think senator Luise just gave the list of a lot of the counties in the state where our tax revenue is going in each one these. I think we have more difficulties that will not imagine, we're dealing with school systems that aren't dealing with how do we accommodate growth. I've got school systems, how do we deal with the loss of the number of students? How do we keep putting money into an aging infrastructure systems when our population isn't growing in these districts because of the system we've created in the state. When an individual start to look at community college is the places that send people away, they are trying in for jobs that exist in other districts senator Apadoca told us one about meeting with the ministry. I met with the ministry this morning that took in to make a large investment in one of my counties there's a problem the infrastructure does exist. The county doesn't have the revenue to put that infrastructure in, you maybe hearing a lot about this in the next few weeks, whether or not they are coming here into this state the [xx] more than we can make that investment because the counties can and moving forward, I have an important. That's still sitting in double digits and coming forward I would love to have the 4.5 to 5% that Buckingham county have in unemployment . I don't know that I've seen none in my last corn it's coming forward we have created a system in the state that takes from

rural counties and gives to the ubern counties and we are looking to make the division united 50, 50 to offset some of that problem. Further discussion or debate. Mr. President.  I'm sorry senator Blueward. Yes sir. Follow up. Yes senator Hise yield for a question? yield. Senator highs you represent the county on you? I don't not. You do not represent the county...  When I was originally elected in 200 Representative Davis County, Senator Soucek now represents Avery County. You're familiar with the rural nature of Avery County. Do you think it's fair that we would reduce Avery County counties sales tax revenue by 5%. Every County's sales tax revenue year over year does not decrease, if we would look at that, the decrease you're claiming is versus the growth that one would expect. Avery County would be unique in the in the state that they have a tourism industry that exist year around something we don't see in Western North Carolina they not only have summer visitors and summer residents soon as I'll be on that they begin a stees reason and operating bring a lot of individual individuals and every county from my district and others that bring that revenue in county, and do proportionally very well in sales tax versus and other county of that currently represents in the process into eliminate and level that plane field across those counties and across for every county which has some of the highest income individuals anywhere in the state as well as gated communities at and Limbo Ridge others if they don't necessarily represent what you see in the rest of the district. I think it is time to level playing field with every county by the increase they were receiving here is going forward. One [xx] follow up. [xx] for follow up. I want to make sure I got a simple man solid it's tough to process a lot of words. Do you agree that it is fair to reduce the sales texts, receipts in every from every county. I would say that when every county receipts and slaes tax increase every year under the this plan, I would be hard pressed to see how one would categorize that as a reduction. Further discussion or debate, Senator Rabon for what purpose do you rise? Thank you Mr. President, to speak very briefly on the bill. Just one moment sir, Senator Van Duyn I believe your microphone might be on. Thank you. Senator Rabon recognize. Thank you, Mr. President. I sit here and I listen to this and my county was mentioned by my colleague, Senator Blue and [xx] I feel compulsed to speak. I'll start with Senator Van Duyn's statement and she said all of North Carolina in her opening remark, and then she said, and I quote, my county takes an 80% hit. Well ladies and gentlemen, my county may lose a little Brunswick[sp?] County, but my other counties I don't have the pleasure of representing just one county, I represent several counties in eastern North Carolina and I feel this is the North Carolina State Senate to say that I represent all of North Carolina [xx] as well as just my district,  then having said that, living in bounds with county, we have it pretty good, our tax base is substantial, our tax rate is pretty low. We live in paradise if anyone here thinks they do, I do. The happiest [xx] goes down on America. It happens to be where I reside, and there is going to be some people that are happy about this in the happiest town, they are going to be some people in the happiest town that are unhappy. But I'm going to be one of the happy ones because I know just to show [xx] standing before you that my voting, and supporting this bill is the right thing to do, and it's the right thing to do for all of the north Carolina. And those of us that are going to [xx] who're willing to stand up and help those of us who're going to see an increase on the right side of this bill and we're on the right side of moving North Carolina forward to where we need to go and following the plan that we have had for the last five years and I hope we have for the next five decades, so I would encourage everyone when loose a draw and that covers this all to support this bill this is the best economic package that we brought forward in decades, there's absolutely no reason in not supporting it Senator Brown, Senator Rucho and I and others have worked on this for months and months and months trying to reach a fair compromise and a good deal and I think we've come up with it and I think this is something we should stop bickering about whose

odd is being [xx] and everyone if going to win. The total amount of tax revenue in this state is not changing, it's going to be the same fox, the same number of tax dollars that would be coming are coming to be spent by tax payers of North Carolina. I have to agree with Senator Apodaca, we've got a good bill before us, let's get on with it, let's North Carolina progress, I encourage you all to support it and thank you. Further discussion or debate, senator Brown, for what purpose do you rise? speak to the bill one more time. You have the floor.  Senator Reiner, I think you hit the nail on the head when you talked about the whole package you know a lot of legislation up here, you can, I think, probably most of it actually you can probably read through it and there's always a line or two that don't particularly like, because I don't see anybody up here has ever passed a perfect bill that am aware of but this bill as a whole is good for the whole state, and I think that's what gets maded[sp?] up in this whole debate, it's what the bill does for the state as a whole. The senate fees, for some of those that say they are loosing in this bill, if you senate bill [xx] your huge winners more than officer any kind of [xx] in this particular bill I don't know how you can argue otherwise, some it is a huge win for you in this bill and the piece, sales tax piece if I was to be that get some of this [xx] never get any of that in [xx] a little piece of the [xx] it's a balance and that's why this bill took long to put together is because we tried to find something that everybody can win just a little bit on, and it is easy to complain about something, somebody might be loosing but you never praise anything you're getting that human nature I guess we always want to talk about what someone has taken, not   somebody has given us, and things like when you get up taken for granted , just remember 07, a third bill took place over 84 counties I don't know what those negotiations look like, I wansn't part of to be honest with you, but I do know this about 84 counties will negotiation and I have suffered through eight years of loss and a few counties, and one under negoatiation and I have benefited greatly in this past eight years. All this does is to say we made a mistake in [xx] we did to the majority the counties in the state. Let's fix that. Let's not give them more than they had, but let's at least put them back to where they were and make it fair, but it was back in 07 that's how this deal[sp?] does on that one piece and yet the other piece is a huge win, a huge went for a lot of major counties in the state. It's just a good compromise bill, and let's just try to be fair to everybody, I know it's, I'm not totally tickled to death by some of these pieces either, to be honest with you. I can sit here and tell you the pieces I don't particularly like. I mean I've got a county with 200, 000 people's never had a [xx] do I think that's fair? I sure don't. Why wouldn't a county that size get JDIG money? I don't know that answer but it never has, and that's a pretty good size county I'd say, and never received a JDIG grant ever, and that's why I'm saying that you win some, you loose a little bit of this but it's a good balance. I just ask that you vote for this bill let's move on it's good for the state of North Carolina and I think it's a good bill. Further discussion or debate? Hearing none, question for the senate is a passage on third reading of the senate committee substitute to house bill 117. All in favor will vote aye, all opposed will vote no, five seconds will be allowed for the voting, clerk will record the vote. 34 having voted in the affirmative and 12 in the negative, house bill 117 is past its third reading, the amendments will be engrossed and the bill will be returned to the house on the issue of concurrence senate bill 607, the clerk will read. Senate bill 607 the pack of payer protection act. Senator Brent Jackson is recognized. Than you Mr. President. Supposing, before I explain the bill, I've amendment that is purely technical that I'd like to run Sent forward

your amendment, Clerk will read. Senator Jackson moves to amendment the bill. Senator Jackson is recognized to explain the amendment. Thank you again Mr. President. Members this is basically is just purely technical we are on page two line 24, we're deleting the term five and inserting the term 10 still be struck through language. The five will not be struck through but and on that particular of section and then on page two same page line 26 by deleting the term section one and substituting section three, this is purely technical and I'd be happy to answer to any questions and ask for your support. Further discussion to debate on amendment two hearing none, the question of the Senate is the passage of amendment of two, the Senate Bill 607. All in favor will vote aye, all opposed will vote no. Five seconds to be allowed for the voting. Clerk will record the vote. Senator Foushee, Senator Clark aye. 41 having voted in the affirmative and 4 in the negative, amendment two passes and the bill is back before you. Senator Jackson is recognized to explain the bill. Thank you Mr. President. Members we had a sort of healthy and lengthy debate last night on this bill on the amendment which is now the bill that is before you, and basically all said Senate Bill 607 does is ask the voters to amend the constitution by adding three provision that will strengthen the fiscal integrity of our state, and protect our taxpayers from government overreach. Together these three provisions represent an integrated and cohesive approach to fiscal responsibility that will ensure that the future General Assemblies spend sensibly, save wisely, and tax sparingly by retaining the flexibility to react to crisis and economic downturns. These provisions must be viewed as a comprehensive package, each one supports and complements the others creating a balance. The first provision, we put a limit on State spending growth that level of the final years, appropriations plus the average inflation and population growth over the preceding three years. The second provision would create a constitutional Rainy Day Fund, and fund it at 2% of Appropriations each year until it reaches 12.5% of prior year appropriations. this would give us about a 45 day reserve, and just for reference with there just been just enough to have covered our recent worst recession, our revenue decrease during our recent recession, and I have on the dashboard members a chart and it's labeled Document A, and it would show you that during our biggest 07/08, if you'll bare with me I have it up here, but it's kind of in it. We had 11.1% decrease in actual collections, I'm not sure, does everybody have that one up that they want to look at? OK, thank you. So, the 12.5% is probably a valid number, that would give us just a little bit left in that particular case. The third provision would reduce the maximum state income tax to 5% from 10%. These amendments include a safety vow, as I like to call it, that gives the general Assembly the latitude to take extraordinary measures in extraordinary turns. Whether it be economical downturns or whether it be for disasters. The General Assembly with a 2/3 vote can open the safety [xx] and they can go into this fund, they can take many from this fund they can also vote not to put many in this [xx] should these circumstances arises. If these measures are enacted and approved by the voters North Carolina will join the majority of triple, triple [xx] States that have constitutional limits on taxes and outstanding in place and if you'd like to look at document B, I believe it is, on the dashboard that will show you the states that are triple, triple A raided in what they do, it will also show you the states that are triple A raided and what they do and we found somewhere in the middle of all that with these things. I believe this bill

demonstrates to the tax paying citizens and residents to this state, that we are serious about being good stewards of public funds. And it gives them the opportunity to hold us accountable to them at the ballot box to approve this constitutional amendments. Members I would say to you, if this bill was to pass second reading today, according to what I've been told by our attorneys here in this building This is not a two or three day bill, we can go ahead and vote third reading but most of you know me and you know I believe in transparency and given folks plenty of time to look at things. I'm going to object the third reading so that it gives us one more night to look at this, and we can bring it up again tomorrow for the final reading. I'll be happy to entertain any questions Mr. President, and I would certainly appreciate your support, thank you. Is there any further discussion or debate. [xx] For what purpose do you rise? up to debate the bill. You have the floor. I have some grave concerns about this bill, I think it seeks to put in our state constitution policies that do not belong there and would hamper future legislatures from being able to move our state forward. We all received an email from a state treasurer warning that this bill will potentially endanger our good bond rating because it limits our financial and budgetary flexibility. Loosing our triple A rating will mean higher borrowing cost and adversely affect economic development because businesses want to be sure that North Carolina is on a good sound financial footing. While the idea of a Rainy Day fund is goo, having to have a super majority if two thirds of all house and senate members to use the funds will be difficult at best. Sometimes I wonder if we can get two of the house in senate to agree whether the [XX] are [XX] or not. But perhaps the worst part of this bill is the last section of the regionalisation that the house states spending to an increase of only inflation plus population growth each year. if we were to have another great re-session or even just a regular re-session where cards had to be made. We can never recover from them we are already in a deposit in a education funding from the last re-session and in a deposit in some other areas and this would mean that we could never restore nessesary funding for important state services. We've all heard a lot this session about we need to invest more in our infrastructure how we are going to do this if all we can increase is the state spending by inflation in the population growth. To see the adverse effects of such legislation all we need to do is to look to Colorado. with this policy has led to higher local taxes and to budget cuts. Even blocking the ability of assisting communities in the wake of disastrous floods and causing the Colorado business leaders to lead a charge to get rid of their similar law. We do not need legislation that will cripple our state's ability to grow and attract business and industry. I respectfully ask that you vote against this unwise legislation. Further discussion. Mr. President. Senator Rucho, for what purpose do you rise? To debate the bill. You have the floor. Members of the Senate, I'm not sure everything I heard just a few moments ago is what reality is. I also did receive a copy of the treasurer's letter as I mentioned to you yeseoday I've had an opportunity to speak with treasurer and we discussed a number of the issues. Let's talk about Colorado for a minute and and negative connotation that table has with the Colorado plans and let's compare what we have here wept Colorado has. First of all Colorado requires a vote of the people to increase taxes which is very cumbersome our case we have 2/3 of the boat in an emergency situation whether be a natural disaster where economic down town and the advantage that we have is we will have $2.7 billion in our reserve fund available to handle emergency this state needs. That needs own right has to rating agency sees very simply North Carolina is prepaid to handle any problem whether it be a natural or

physical a policy problem, and what that means is and if you look back in that charge that senator Jackson eluded to, those same plans that shamed physical responsibility is increasing in their bond rating because of the fact that the ratings agencies recognize their constitutional limits as to what was spent, how the money was spent And also controlling the rate of taxes so you just look back on this sheet and I think you'll be amazed about all this triple A states that have been very successful have controls over spending, have controls over taxes because of fact that very simply and if you look at track number c on the dashboard let's look for a few moments on that track let's talk about Authorise budgets prior to 11 and 12 they're done by our friends in the back row but let's looked down on a spending problem that may have occurred. In 2004 and 2005 when the good times were rolling, the Assembly under that period of time spent 7.4% above what the previous year was and then all of a sudden they said [xx] if we spent 7.4 then let's ahead and spent 8.2 the next year, and then all of a sudden those were rolling really well and now they spent 10.2%, and 2 2007 and 8 just before the recession hit, just before we had the $2.7 billion deficit that unfortunately we were responsible to fix. That was ladies and gentlemen an 8.7% average growth in the budget, and what that is is unsustainable, and what the amendment that Senator Jackson and the rest of us are trying to put forward will restrain that. And as I mentioned yesterday tell me what is a better sign for fiscal integrity and sound economic policy, but to have a Rainy Day Fund that is funded, that is available, that controls this kind of a irrational spending. Now you look at the last four 2011 through 2015 and you see 4.6, 3.4, 1.2, 1.5 that's 2.75% average growth. That is basically what inflation is, and also population growth, and what did we find happened at the end of this last year end of 14th? Miraculously we grew by 7.1% income in revenue, tax income. That is $1.35 billion of more money with a historic tax cut that was going to put forth in January 14, and all of a sudden the critics basically said we will not have enough money to spend to take care of the needs, this general assembly miraculously had $1.35 billion roughly $450 million more than the estimated but the reality is we still took care of education, we still took care of the court system, our transport system is getting healthy. We're fixing the problems of the past, and very simply ladies and gentlemen passed by the people of state of North Carolina, because they demand fiscal responsibility, that's why many of us came here, that's why many of us elected to come here is so important to continue this effort, and if we don't pass it, then the problems that we have seen in the past will continue. and I'll be honest. This spending has been back between four and eight could easily be done by a similar group of republicans in one of this bodies. Mr. President.  I'm not finished yet. Senator Stam for what purpose do you rise? Senator Rucho will yield for a question. Senator do you yield? Finish when I'm ready. He doesn't yield. Senator Rucho has the floor. Thank you Mr. President. So we're not making this up. These are facts. You can see the charts that Senator Jackson set forth. You can look and see the success of these other states that have got triple A bond rating, ladies and gentlemen you talk about flexibility, the treasurer has said we're going to lose flexibility. We have flexibility, if we have a short fall, we going to have $ 2.7 billion in the reserve fund to be able to use to handle that emergency case, let's say for some reason we can't do that. Then all of a sudden the General Assembly can come in and with a simple majority come out and say, we're going to raise sales tax for a short period of time I think you folks in the back row will remember we had temporary sales taxes, some of them lasted forever, others we were able to eliminate but the reality is you used that as a quick fix to handle that emergency, very simple majority. There are safe guards in this bill. It's been thoroughly evaluated. We hope it will be looked again.

We know that the rating agencies will say, that constitutional restraint means that North Carolina will remain a prosperous state and will continue to be a [xx] rated state. Mr. President, I'll respond to his question. Senator Stan, for what purpose you rise? To see if senator yields to that question. Yes. He will so yield. Thank you, Senator Richard, with whom at Moody's have you spoken about this bill? I have spoken with nobody at Moody's. I have spoken with the treasurer who has not spoken with anybody at Moody's. I have a question. Can I finish my answer? Yes. Thank you, who has not spoken with anybody in any of the rating agencies either. I have a question. Senator [xx] you yield for a question? Yes. He yields. Who [xx] and who have you spoke with? I'm sorry, repeat it again With whom at [xx] and whom at fix have you spoken to? Didn't you hear my entry I spoke with none of the rating agencies. I did not hear that. Thank you. Follow up? Follow up questions, do you yield? Yes. Senator Richards before this body is forced to vote on a policy it may or may not have an impact on our credit rating. The treasury who's job it is, is to protect the credit worthiness of the state as [xx] that this is going to create, it may be viewed negatively by the rating agencies do you think it would have been prudent if we'd had a hearing where the public could've come and talked and we could've asked the credit rating agencies what they've use of these ideas? I will say to you Senator Stein that the treasurer made a quick response to this bill without having the whole bill before her. So in reality our conversation with her with additional information I think it would be reasonable to ask her again if she has that same reservation. I offered to spend time with her at the time, they talked with the rating agencies to make sure they fully understand all the protections and all the safeguards in place to make sure that this is as full-proof as it can be, but more importantly when it passes this general assembly it goes to the people. And the people will have a chance to be able to make the final decision, whether they believe in spend-thriftness, spending 8.7% average growth or fiscal responsibility when lower taxes, when more jobs when economic GDP growth, works. And that's just a matter of what has happened and this is something we should continue moving forward with. Follow-up question. Yes Sir. The yield. I didn't ask if you were prepared with to sit with the Treasurer and educate her as to how this would affect the rating agencies. I asked, "Do you think it would be prudent for this body to have heard from the writting agencies before we consider an amendment for the Constitution which is incredibly difficult to change. " I will tell you Senator Stein, that the rating agencies now that they know that bill is there will probably call the treasurer and the governor's office I already mentioned to you earlier that Florida is seeing an increase in their rating because of the fact that they've put in some conservative restrictions to make sure that tax and spend failed policies of the past will damage their economy and they can continue doing what North Carolina is doing and that is having economic growth and job creation, and give everybody an opportunity to share in the prosperity. Mr. President? Senator Woodard, for what purpose do you rise? See if Senator Stein will yield for a question? Senator Stein do you yield? I do. He yields. Did you get any answer to your question? I did not. Thank you. Senator Apodaca, for what purpose do you rise? Mr. President, speak on the bill just a moment please. You have the floor. You know folks, I guess we'll go to the ultimate credit agency, that would be the voters of North Carolina, I guess they'll have the say. Ultimately isn't that who sends us up here, isn't that who we answer to? So with that being said Mr. President, I'd like to send forth an amendment. Send forward your amendment. The Clerk will read. Senator Apodaca moves to amend the bill. Senator Apodaca has the floor to explain the amendment. Thank you, Mr. President. All this does is it sets the date that we vote on this bill for my birthday in 2016, November 8th, 2016. This will go before the voters of North Carolina during the General Election. I can think of no better time to put it before the voters of North Carolina when that will be the most voters in North Carolina voting so I recommend this to you, and it would be a great birthday present.

Further discussion or debate on Amendment 3. Senator Blue, for what purpose rise? Debate the amendment. You have the floor. I want Senator Apodaca to know that we're operating on all fours on this issue. Senator Rucho has taught me in his efforts in the Wake County referendum bills that the best time to put these things before the voters is when most voters are participating, and I think November 2016 is a perfect time to do it, and I commend Senator Apodaca for doing that although I think the bill is crazy. Senator Brent Jackson, for what purpose do you rise? Thank you, Mr. President. Speak to the amendment. You have the floor. Members, I don't want to take the thunder away from Senator Apodaca, but I would have to tell you this because Lisa, his wife is probably the only one that knows this other than Tom and I, but that's my birthday too. So I would appreciate your support for this amendment. Thank you. Further discussion or debate on Amendment 3. hearing none question before the senate is the passage of amendment three to senate bill 607 all in favor will vote aye, all oppose will vote no. Five second be allowed for the voting, clerk will record the vote. If I might note that Senator Brian is back in the chambers and wish be recorded on this vote Senator Bingham aye. 47 having voted in the affirmative and none in the negative amendment three passes and the bill back before you further discussion or debate?   Mr. President Senator McKissick for what purpose do you rise? Speak on the bill You have the floor Bill that we have before is not really what it amounts to as the constitution. It's something that we should all take very very seriously. It's not just about the wisdom of voters coming forth on election day, and voting either in favor or against it. It's about setting forth a proposal that that deserve consideration, in this particular situation I don't believe this is the type of issue that really need to double for the voters I don't think the type of issue that is deserving of that level of attention. Let's say that for a variety of reason. First of all, we establish this maximum of 5% in terms of personal income taxes, well it might intrinsically appeal to a whole lot of folks the only thing that in ever [xx] will likely occur as result of it is that if we in the budgetary shortfalls things are anticipated. The scare is going to be more sales taxes. Sales taxes have variety of matters. I think right now we probably tax between somewhere about 35 or 40 different categories of goods and services. I understand that in some states they tax upto 140-160. The only thing this bill will do, if it goes before the voters, if in fact is adapted as part of constitution and I think it needs to be told to voters if you do it, it needs to be a full bill rights. He says to them, your income tax might be lower, but you are going to be paying more in sale taxes across the board because  every outcome that will occur if this [XX] pass. The other thing is this of us could look today and to the future. None of us could know what will occur. One thing that certainly seems to inevitably occur is that we end up with unfunded mandate from Washington. Things that occur that we don't know are coming. Once this is in our constitution with those unfunded mandates come, we're still going to have to pay for them, we're still going to have to grips with whatever they require us to do is a matter of funding, but in terms of using personal income taxes as a mekethar[sp?] of doing it open to us, that option would be close. The other thing it requires is for this General Assembly to get a two thirds vote, two third that's an amazing threshold to reach, I mean that is an incredible super majority. If we are going to go there use any of this rainy day funds. We don't to handcuff ourselves financially, we don't need to put ourselves in a position will be challenging to overcome circumstances. We don't need to put ourselves in a type of crisis or small minority can go in there and deny us a super majority vote and have the fate of this state and the circumstances

that we face at a time of potential crisis financial undermined it. That doesn't make a lot of sense. So yes it's up to the voters, but let's put to the voters logical, reasonable options things that are thought through, not just things that sound good, not just things that might intrinsically appeal to you and if it goes to him give them a taxpayer bill of rights that clearly spells out the inevitable outcome of what will occur if we're limiting ourselves to 5% and we need more money to get the job done, to make certain that when we provide services for people, when we provide [xx] life for people that when we take upon our responsibilities to create jobs in the state that we have the resource to do it and to do it right. Further discussion, further debate. Senator Tillman for what purpose do you rise? To speak briefly on the bill. You have the floor. I think it was about four budgets where that's about eight years I sat back here in the back on 648, some of you senator Burger you were here, in fact you were here two years before that. Senator Apodaca came in that year and several others. Senator McKissick you weren't here the whole time, but you came long enough to see Randon Bass not at work. Now we watched these structurally deficient budgets which you did many times. You had expenses that went on and on, and you put those in the budget with one time money and then you ran at about 7 or 8% in budget increases over those years and we watched that and we said, we can't sustain that. We couldn't do a thing about it, and if you want to lead the campaign to say we don't want you to have a limit of 5% on your income, and you don't want to control state's spending and you want us to have a run away budget again, maybe you all could advertise that that's what you want. The people will have a say on this and I promise you if that issue whether it's one question or three on the ballot, the people with their good judgement will vote for it. Now if you want to educate I'm going to tell them you really don't know what you're voting on folks, and that you're going to get us in trouble one day when we have inflation running around. But, well we are basing our spending on inflation, we are basing it on growth and we are basing it on a low number, a much lower number, what we already will have is 5% on your personal income. But we saw all of this take place over those years and sat back there and couldn't do a thing about it because if [xx] wanted it and [xx] wanted it, it was rammed down our throats and what we got was about a $3 billion, Senator Rucho you said 2.7. Between that and $3.1 billion deficits, and you left them in our lap because, yes we had a down turn and we will have another. You had no plans for any downtown you had no rainy day fund to cover it so there we go. We had that huge deficit because we didn't have the discipline, you all did not have the discipline to limit your budget to a realistic number that would take care of growth. Now when you go and run the like that on the state and you come along and get a taxpayer protection act and all of a sudden you don't like it. Nelly, if you love spending you won't like this bill. If you love spending and doing things for all of your friends you won't like this bill. I love it. Mr. President, glad to see you senator Tillman will yield for a question. Further discussion of debate senator Mckissick, senator Tillman do you yield? Only for the great senator form Durham. He yields. Let me ask you this senator Tillman, suppose we had passed this in 2007, 208 came along, we were 16% % short in our revenues. Let's say that you have been apposed or [xx] opposed to a federal bill out of the states. And what given any money so we don't have a favorable bill out with 16% chop with our revenues what would you have done if this bill in this constitution amendment had been in place in 2008. What would have been your source of revenues to have funded the goods and services of the state of North Carolina. Is that a question or a speech? Yes, a question.  A question. Well first of all, I would advise you folks not to get us in that hole by doing all of those things you did. Sure, you wait for 2007, the horses are out of the barn. No, you can't wait [xx] when you're midst of a recession or the beginning of a recession, you can't wait to do a thing. We're doing it now where can build [xx] and I reserve

that to take care of my [xx] and keep spending under control, when you've got all this course going on which you all love to do you get in to this problem. We're going to control spending, I have never seen a democrat legislature anywhere in the world control spending. Further discussion or debate. Mr. President. Senator Jackson, I got three lights lit up. Senator Raven your microphone is on. Yes I know. Thank you Mr. President You might want to turn it off. Sir Jackson is recognized. Thank Mr. President. Members I want to speak the second time on he bill. Your floor. Thank you. it you're looking at the chart and I believe this chart D or in document D there was a rainy day for an I think established somewhere around the best I can tell is 1991 and that fund fluctuated mostly increased and I commend the previous general sent me for that 2000 and more though going into 2002 must have been a tough year because it was zeroed out 2001, 2002, great years, I remember that very well for other reasons [xx] started picking and it looks like in, pardon me I forget where I see this thing, in 2006 and 2207, at 2007 we had $786, 649, 678 in the raining day fund and then all over sudden it went to 150 so it looks like we pulled out 600, 000 plus and I think somewhere move along in there and I might be incorrect, maybe that was in 08 or 09 you all can correct me on this, there was one cent sales tax put into place to try and cover some short falls, but my point to all this in bringing it out, if this amendment concerning the rainy day fund part of this amendment what if in place from 1991 we would have had the $2.7 billion in there Senator Rucho is referring to and the rest of it would have been flowing back to the general fund, so we would have been covered in my opinion here those years Senator Smith you brought up Colorado and I don't blame you, I would have brought up that too then we certainly done our research on Colorado but I want to make sure the members in here understand the difference between what we're doing and what Colorado are doing. What we're doing, this General Assembly can change it. Well by two-thirds of it. The Senator McKessey that is a lot, is 34 members. To be exact, 33 and a third, I hadn't figured out which one of you all was going to be kept at third so we just went with 34. Could be, Senator you pointed Senator Apodoca? Okay. But, 34 members in most cases would require some sitting down, talking and working together, that's what it would do. If we were in Colorado though, we wouldn't have that option. You'd have to take it back to the people, they have to vote to release it. They also have to vote to not exceed the spending limit or the cap. I can't imagine why Corolado would have ever pass this, and I would never support something this strenuous. But what we're doing here with a two-third vote, you could actually vote the money into the account or not, take the money out, or not. You could change the required spending limit or not by a two thirds vote. There's options here that we have put in this provision and into this amendment that would allow this body, assuming the final taxpayer votes upon it and approves it would give us or this body, not necessarily myself or the rest in this room, would give this body the authority to do this. I think this is the prudent thing to do, that's the word that was used earlier. I think if we'd have this

in place, we would have not seen the short [xx] and the short file of of where we were and the programs that had to be kept and that we are trying to restore slowly. Mr. President. Senator Rucho, for what purpose you arise? Would Senator Jackson yield for a question. Senator Jackson, do you yield? Yes sir, I yield. Senator Jackson, you eluded to the fact two thirds vote would use the rainy day to fund it or not but are there no additional credit and safeguards in the like with the facts that cooperating income taxes 4% couldn't with the simple majority, the general assembly be able to increase that five and be able to get the additional money they would need through that source? Thanks Mr. President. Absolutely senator they could do there are several other things they can do if they so chose to do so. Power and in addition to that, when the income tax the personal compaction of north Carolina reaches zero and we still have the 5% tax. Couldn't with the simple majority the general assembly in case of emergency would ever reason maybe necessary will simple majority increase the income tax up to 1, 2, 3, 4 up to 5% to handle that emergency? To respond, yes all they could, they could do that senator Richard. That's a question? Do you yield? I yield. So therefore the ones you mentioned and the one you discussed, there are a lot of safe guards in place as this plan goes forward to be able to be sure that all the priorities need of spending to the states of North Carolina can be met whether there is physical or a natural disaster or any type of problem. Are we not better of with this then under the present system which requires no mandated rainy day fund? To respond yes sir. Senator Richard would agree that we are better with this and with that I will appreciate your support on this dilemma. Senator Raven, did you want to be recognized? [xx] Yes Sir, speak to the bill. I was You have the floor. Thank you. To debate the bill [xx] my colleagues senator [xx] has said and to discuss briefly and talk some of the statements and things that senator McKissick brought up, and he brought out a couple of good things senator McKissick [xx] we would be allowed to raise or lower, or expand the sales tax or consumption tax if you will and that what was done a few years ago, and this general assembly repeal that increase I believe in 2011, but we can do it again when we get an exam, let me give you a couple of facts that everyone should know and if you don't know I hope you do when we finish here today, and that is our revenues personal income tax all that twice all our revenues from sales tax are or from consumption fro this day. I'm a person that believe too much money come to [xx] and I believe $400 million but that not [xx] that's not personal believe. I would like to see that money still in the pockets the people and be going to sales taxes so that our counties will each be getting 50%, and our people will each be getting 50%. Which has nothing to do with this bill, but going on with that a two third majority is prudent. Thank you. because if we're at a whim of this legislature or this Senate, and 26 votes can raise personal income tax, we'll see benefit of that tax increase for over a year. That doesn't solve the problem if there's a disaster. Thank you again Senator.  If, if history repeats itself and it will and we slip, and the economy slides into another recession. The last recession cost hind us of about 12 or so percent. Senator Rucho you can nod the next one will be deeper. 12.5% is very prudent. That should put us at an even level Senator again, good thinking and good work. Now let's get on to the sales tax again. If we can cap this is a 5%, which is a good and reasonable number, and it'll cap not only personal but

it will cap corporate, all income taxes, still allowing for deduction? We saw this happen in Georgia they capped their income tax, they didn't lose their triple A bond rating. Florida hasn't lost its triple A bond rating and it's that they were told by Standard and Poor's they had made prudent and wise decisions in conservative handling of the taxpayers money. Let's expand the base. Let's lower personal income tax and let's expand the base. Okay, when we do that, we're stimulating our economy the right way. We're not taxing productivity retaxing spending, retaxing consumption. Who consumes more? The haves or the have nots? that's rhetorical, but I'll answer it. The haves spend more. Therefore the haves pay more in sales tax they have not benefit. Now some people are going to say, Oh senator, oh senator, you're evil! These are the words of the man down there or in their mouth today because the poor people are going to pay as recessive[sp?] Now we don't tax, have no intention of taxing food, something everyone uses. I think food tax is a terrible thing to do. I won't talk for it. I won't endorse it when the time comes. But taxing services and expanding our base is the thing to do because if we have a problem, senator, if we have a problem and if we slide within 30 days, we will start a recovery if we adjust our sales tax. Within 30 days of that 45-day period that you're giving us a good window on, and again, good work. You're giving us a 45-day window, but within 30 days this Body And start moving back to the positive baseline, this is the way to go. And I believe the voters of North Carolina are going to improve the necessary [xx] and they're going to thank us all and Then taking good care of their money and doing what we should do. So senator thank you for your bill I support you and support your bill and encourage others to do so. Further discussion or debate. Senator Van Duyn, for what purpose do you rise? I'd like to send forth an amendment. Send forward your amendment [xx] The Clerk will read. Senator Van Duyn moves to amend the bill. Senator Van Duyn is recognized to explain the amendment. Thank you. Right now How hardworking people are struggling to get ahead in our economy the nation is crawling back from recession but here in North Carolina families are struggling still to put food on the table, meanwhile the first day of school is around the corner and many of our students still don't have textbooks and our schools still do not know what the budget they would have to work with is for the coming year, teacher pay in North Carolina is 42 in the nation, and we have no plans to get us near the national average Thank you for spending is lower than preressesion novels and behind all of our neighbor states in the south east, this participation in front of us is another budget gimmick that will do nothing to make government more efficient, it will not lower taxes for ordinary people or fix our schools. It is the destruction from the xx which is finishing the budget for the coming year and ensuring that budget includes the basic. education funding, we need for our students and our schools. So what I'm proposing and what this amendment does, is it prevents this legislation from being implemented until we here in the general assembly have successfully raised teacher pay to the North Carolina raise teacher pay in North Carolina to the national average. Attracting the brightest and best teachers is a priority for everyone and with this amendment we can ensure that it doesn't get kicked to the bottom of the pile yet again. And that's why I urge you to support this amendment. Further discussion, senator Jackson. Thank you Mr. President. You have a floor. Thank you Mr. President.

Senator Van Duyn, I understand your concern on the budget and I have the same concern, you know we should have a budget in place, we've been in here since January. And we should have a budget, that you remember to this bill to me is not somewhere to this bill has no bear to this bill and so I would ask the members to not support this amendment. Further discussion or debate. Mr. President. Senator Tillman, for what purpose do you rise? Take on the amendment. Have the floor. Chapter 39 I have some concerns the [xx] special without scores and there is a lot of [xx], however, however. if you read the continuing resolution, we have put the starting pay up, the 35000 that will be in effect that allows us to have better and brighter teachers by getting the starting pay up over the last four years significantly above what it was and now even with better than competing states that were were loosing business to. We also have $100 million for growth in the public schools in this continuing resolution that will fund TAs, teachers, whatever they want to spend it on. You buy gasoline for the buses with it, we got that total flexibility in there. We're taking care of concerns of the public skills. it won't be complete that we finish the budget but if we did nothing else with the viewing of those two things an there's a few other things that's already in there but that's already in place with the CR. Discussion or debate? Senator Apodaca for what purpose do you rise? To see if senator Van Duyn yield to the question. Senator Van Duyn do you yield? She yields. Senator Van Duyn do you have a physical note to go with this? No I don't. It's got money implications [xx] must have physical note with it, so if it's not one then it's out of order. Mr. Chairman. Inquiry Mr. Chair State your inquiry. Mr. President I think we need a physical note to go with this if we're going to go hear this amendment, I don't see one with it. Give me a moment. senator will stand for this in just a moment. Senator Van Duyn could you come up here please. Mr. President. Senator Apodaca for what purpose do you rise? Mr. President I would like to remove my objection to amendment four. Very well, further discussion or debate on amendment? Mr. President. Senator Apodaca, for what purpose do you rise? Motion please. You have the floor to set your Motion. Senate Bill 607 amendment four I do that it lay upon the table. Senator Tucker for what purpose do you rise? To second the Motion to lay on the table. The motion having been made and seconded to lay amendment four on the table, that is a non-debatable Motion before we get to the vote on that motion Senator Barringer has requested in with your consent is granted leave of absence for the remainder of the session. Question for the Senate is the passage of the motion on the table, amendment forward, the Senate Bill 607 all in favor the motion will vote now and oppose now. Five seconds will be left for the recording clerk to record the vote. [xx] Senator Tillman [xx] Senator Alexander. 29 having voted in the affirmative in 15 and negative, the motion of the table carries and amendment four table. The bill is back before you on second reading, further discussion or debate. Senator Blue for what purpose, Senator Jackson, for what purpose do you rise?  To speak to the bill. You have the floor. There are a lot of moving pieces here, but there's one piece I want to draw your attention to and that's the effect that section one of this legislation will have on our budget when we're coming out of a recession because that it's the way that the cap ultimately makes contact with our budget. Under those circumstances, once the recession ends the challenge has only just began because now as the economy recovers, state government continues to live inside that recession for years. That means that when the cap finally hits, chances are it's going to hit us just as we're getting on our feet, and folks, it's going to land like a ton of bricks. It will have the effect

of wiping out the first surplus we see after some very hard times. As it's been mentioned in Colorado passed a very similar constitutional amendment in 1992. I understand there are some differences, I'm going to get those in a moment, but I brought a chart of the effect that their constitutional amendment had on their education funding. Could we put that on the dashboard please? The black line running across the top is the national average for per people education funding the broadest metric of education funding. All the colorful lines underneath are the different sources accounting for Colorado's poor people funding in years following their enaction of table work. They enacted that in 1992. That's where the graft starts. I think it's fair to call this a swift and severe reduction in education funding. You can see in one of the there was a spike upwards in 2006, that's from where they voted to temporarily lift table work. Unlike Colorado we have a constitutional requirement that every child shall receive a sound, basic education. It's one of the things that makes our state unique, I think we consider it a source of pride, this amendment could ultimately create a constitutional conflict between it and the duty to provide a sound basic education. Under those circumstances, we could have a judge setting the spending moment for the state. I don't think that is your intent. We are not playing with matches here we are playing with dynamite we're locking our State onto a set of train tracks that disappear around the corner. We have no idea where this will take us, all we know is that the last train that went this direction, drove off a cliff. As to the differences between Colorado's plan and ours, the essence is that we can have a two-thirds vote here in the legislature and break the [xx] Here's the problem with that, while that might be a policy option for most of you, it will not be political option. Because of the dominant role that primary elections have in feeling our seats and because of the ideological forvo surrounding this issue, there will be a crushing amount of political pressure on members of the current majority not to ever break this [xx] as soon as this passes it becomes one of those things you will be ask to take pledges on during primary, it'll become a nice clear line in the sand that non of you will ever want to cross. Unless we're about a natural disaster, most of you will dim it politically impossible to ever exercise this option especially for something like the gradual under funding of public education, which is exactly what happened in Colorado. Your attention have been directed to another document that provide a list of states that have done similar things of the triple 8 states, only one of them has enacted of something truly similar to this plan. It was Alaska in 1982, there is no solid track record a triple-A states going in this direction and I would be very uncomfortable, basing our entire fiscal future on a plan enacted by state whose economy is one-tenth the size of ours. If you disagree with every the thing have said so far, let me make one more point we should be able to agree on, this is been on the agenda for for less than a week, by comparison sales tax re-distribution took senator Brown months, know how many rounds of charts he produce showing all he various projections. The incentives package we passed last night has essentially been in negotiations for over a year, as was medicaid. This bill could be bigger than all of them, we know we have at least multi hundred million dollar on the budget starting next year and that's before any fiscal cap hits. This is the biggest bill of the year and it's about to pass the senate having existed current form for less than 24 hours. These documents on the dashboard are first documents that have been publicly associated with this legislation. I do sincerely appreciate Senator Jackson's willingness to delay the final vote I appreciate his willingness to delay the vote today so that we can look at the amendment. That was a step he did't

have to take but he did in the name of transparency, he certainly deserves credit for that by considering the gravity of this bill, pushing it through in less than a week should make us all more than a little nervous nothing good has ever come from rapid fire constitution amendments, surely you can see the irony by the bill dedicated to [xx] [xx] itself so procedurally reckless. I urge your restrain. Mr. President Senator Brock go ahead, senator [xx] Thank you Mr. President. I have to go back to 2000, when I first ran in a race and talked about the problem we were going to have in the state at the time. Senator Jackson brought up what problem there was in 2001, went ahead and dipped into the rainy day fund, this was talked about then Senator Jackson from MEcklenberg County maybe we should do something to kind of limit our spending to make sure that we stay within our means. That was 01, 2006/2007 budget, we had a $2 billion surplus and money and projects flowed everywhere in this state. No money was put away in rainy day fund or not what it should have been we should have taken care of some long term expenses but we didn't do that. There's a whole lot of projects and a whole lot of money that flowed everywhere without any type of control. The recession hit. A lot of jobs lost in North Carolina they would start looking at ways to start cutting back spending then. No, we had stimulus money. We did not correct the problems we had in our budget. The structural deficits that got worse and worse. 2011 we had to make those changes. So this is something that hasn't been rushed through in a week. This is something that well over a decade we've talked about out. Is to restrain yourself and make sure that during the bad times, the times that North Carolina's weak they will be able to grow strong. I urge you to support the bill. Senator Blue, for what purpose do you rise? To debate the bill.  The Senator has the floor  Thank you very much, Mr. President ladies and gentlemen, as in so much of the legislation that we consider, it's been noted earlier today that it was getting bad. You know the Rainy day fund of this piece makes good sense, because we have experience with the Rainy day fund and names that are familiar to North Carolina, significant contributors, those who helped us put in place one of the forward looking Rainy Day funds. John Nadlin used to be the president CEO of WAKOBIA [xx] president of rise university then a professor at Duke. Ruben Hues a name many of you recognize. All people the past chairman of the state republican party, all people who played a role in helping us establish the Rainy Day fund and I would tell you one of the points that senator Jackson made was that it disappeared in about 200 2001, I'll tell you why it disappeared, we out it in place at 5% of the budget and it was sort of an amazing thing for the time, but it just so happened in around 2000 North Carolina experienced the worst flooding that it'd ever experienced mostly in eastern North Carolina. We had Hugo, we had hurricanes that nobody anticipated. But that's what rainy day funds were put in place for, for these unanticipated expenses. So between I forget the name of all the hurricanes but we had a season, toward the end of the last century where major hurricanes came through the state. And the place to go to relieve some of the misery that our citizens were experiencing was to the rainy day fund unfortunately we had it in place. And by the time the big floods came around in eastern North Carolina, it wiped it out and he's absolutely right, it went to zero. Which is what it should have done, that's what it was designed for. I'm not so bothered by us asking the voters

to put that in the constitution and even have two thirds of us have to vote to get money. Although I will tell you, requiring two thirds of the legislature to vote to take money out of a Rainy Day Fund to fix emergencies and the Governor will make the recommendation regarding it, but we used our own incentives at the end of the last century, and what happens when you got to have two-thirds vote? Is it people start looking at what do I need to negotiate for in this bill before I'll agree to spend the Rainy Day Fund. You're much more likely to get the funds addressed toward what the real needs are when a simple majority can do it because then you're not having to make bills with two or three or four holdout legislators in each chamber who are going to say yes I will do it but you got to declare something that happened maybe not even related is part of this emergency that we can spend a Rainy Day Fund on. I would caution you on that and that's the only thing that would really concern me. Now along that same line Senator Jackson, we didn't know when those hurricanes are coming, just like we didn't know that this big recession which was unlike some folk might want to characterized it, but this big recession that hit us in 2008 that was just related from Washington not from Riley just like we did know that going to come, but the problem that you got is if you get a hurricane  or you get a flat or you get some major effect. You are going to spend the rainy day money on it, that's what we should do. But if that is followed by some economic down turn and we know that they're inevitable well do for one pretty soon right now. But if that is followed by something like that, then it doesn't matter what you got in the rainy day fund. It's been exhausted and it's not going to be there for the economic down turn and you're going to have to have some way to address that down turn, and what you do with the spending amendment and the constitution is totally tie your hands behind your back. To addressing it, once you've had to respond the natural disasters or other things, and I would hope it would be that kind of thing that would cause you to spend the rainy day fund not underestimating budgets or other reasons that folks may have spent the money for. And so just to warn you, the other aspects of this constitutional amendment will cause those potential problems down the road and ultimately, ultimately we're the repository of the power of the people. They elect us and hope that we've got sense enough to spend money responsibly and where we don't? You're a good example given the arguments that you've made, they run us in and they put somebody else in charge who they think might responsibly. I think that this is somewhat a confusing budget gimmick. That's what it was down to it, we don't have the commitment and the discipline to do it [xx]. Thinks about it, what if we put in the rainy day fund since 2011, we've we both had [xx], started rebuilding it back. But at the percentage that even the law at the time required to build it back so the discipline is something that we have to develop and I'm moved by the argument that Senator Brown made about what is happening in rural North Carolina, and I grew up in rural North Carolina. And if you think that we're going to develop our schools, that we're going to develop broadband capability and all of the other things in these counties that you spoke so passionately about without somewhat rather making major investments that we know will pay off down the road then we're fooling ourselves, and I think the second thing that you do with this is use this budget gimmick to keep us from really setting the kinds of priorities that we have to in education and in infrastructure development that helps make us  one North Carolina. Wake County commissioners recently voted to spend multiple millions of dollars more for our school systems because that's an important priority, and I wish every county in the state to do that teachers will be getting much bigger supplements once we get a budget and figure out what we salary and their supplements will be based on. But you know, what you do with this limitation Senator Brown  is permanently consigned those counties in those areas that you say have been left behind to staying behind, because those areas that are

doing prosperous will figure out how to meet the need of their citizen demand of them. And we'll not have the ability if this amendment is passed to get around the games that it plays and the gimmickry to address the real need, whether it's increase teacher pay, whether it's broadband, whether it's putting out students in the position got adequate textbooks, got adequate computer capabilities and of all of those things across the state. So I hope you really think deeply before you submit this out to the voters because after signing, you believe that this is the excellent way to manage the state. I got trust and confidence in you as the people who were elected by the sources of the state to make the kinds of decision that recognize when we need meet to make extra ordinary investments. When we need to do things that we normally wouldn't do, so that you can bring the rest of the state along, and so you could bring the whole of the state to development, and I hope that you really rethink your position on this.  Senator Berger to what purpose do you rise. Speak of the Bill Senator has the floor Thank you Mr. President, members of the senate trying to figure where I will start is the reason for this bill.governments at all levels ultimately develop spending problems, and I think that as folks move along. What you see is a natural growth of spending in government, and so one of the key things that this amendment to the constitution will do is it will be a barrier to that effort. Now, is it a barrier that cannot be breached? No, it is a barrier that would allow for reasonable breaches. And Senator Blue talks about the disasters that have occurred, and just like the fiscal issues that we've dealt with where the economy some years will be in very good shape and some years will see slowdowns, we're going to have another hurricane, we going to have another natural disaster but, if memory serves me correctly when we've had those situations, this General Assembly, republicans and democrats have banded together and the votes to fund the things that were necessary for the State to address those issues those votes were near unanimous votes, not three-fifths, or two-thirds, or even three-fourths. I suspect that if you go back and look you'll find that probably nary a member voted against addressing those real issues, and that's really what this amendment looks at, is so when you have those sorts of situations, and that's what we're talking about. We're talking about those circumstances that while not totally unexpected, the timing may be the unexpected part, that it can be dealt with. Senator Blue says that he agrees with having a Rainy Day Fund, and that's a good thing, and the bad news is that we've had a the Rainy Day Fund as has been pointed out since 1991, and that Rainy Day Fund the way it was structured was not something that was available to us when the downturn occurred in 2007/2008/2009. That Rainy day Fund was totally inaccurate, inadequate. One of the reasons it was inadequate is because there was no requirement that the Fund be, no effective requirement, let's put it that that way, no effective requirement that the Fund actually continue to grow until it reaches a Wilson amendment takes care of that, it says that fund will be 12 ½% of the budget and that 12 ½% probably will be enough to turn us over, may not be but will be certainly more than what we had the last time, the other thing that we we need to make sure of is that with reference to pooling money out of the rainy day fund that it does require a supper majority in order to be able to do that, this a reasonable curb on growth in government, if you think they are problems that we have in North Carolina all the problems can be solved simple by spending more money and you probably will not like this amendment, if you understand that there are reasonable means that the state has to control the growth of government then you'll support this amendment, you will find that it is a good thing. I urge you to vote for the amendment Senator Daniel has an excuse, absence. Question for the body, passage

of senate bill 60 in its second reading, all those in favor will vote Aye! and against vote No!Five seconds for the vote, the clerk will count the vote. 30 in favor, 15 negative; 30 meets the 3 face constitutional requirement, senate bill 607 passes its second reading, Senator Jackson objects the third reading and the bill will remain on the calender. What have we got there? Senator Lee has an excuse for absence. Third reading house 372 the clerk will read. House bill 2372 medicaid first HIE Primary Care Funds. Further discussion or debate. Senator for what purpose you rise?  To send forward and amendment.  Senator send forth the amendment. senator [xx] you'll meet the amendment bill. [xx] [xx] clerk will read.  Senator Van Duyn moves to amend the bill. Senator Van Duyn is recognized to explain the amendment.  Thank you Senator Hise, I am very grateful to you and your colleagues for all of the time and the talent that you put into these issues and after watching you field questions yesterday, I am particularly, I have even more respect and admiration for your mastery of the issues and I particularly appreciate your [xx] when I asked about the uninsured and what you said was that, they would be responsible for their own care, used the words able bodied workers to describe them. And sometimes though not having access to health care makes it difficult to work. I am volunteered during the [xx] of the affordable care act as a navigator. And I met a number of those people. For example, there was a 50 year old Andrew came in to see me, and he had worked all his life in construction, and because [xx] of the pains that he had, he had to take a lot of time off work apparently, his knees were shot and he probably needed new replacement surgery, but because she couldn't work full time, he did not make enough to qualify for a subsidy under the affordable care act so I had to tell him that I could not help him, and all he wanted was to get his knees fixed so that he could work more and take better care of his family. I also had a young 20 something women come in and she confided in me that she was battling with mental illness but she was very proud of the fact that she was able to work 20 hours a week at Walmart. She was very methodical and she brought in no books with receipts, and pay stabs, and I could see that it was very important to her that she take care of herself, that she be responsible for herself. She wanted to be responsible for her life, but I had to turn her away as well and she was in the cache 22 of not being able to work

more because of her illness, but not being able to qualify for her subsidy because she couldn't work more. As difficult it is as it is for these folks I am afraid that these girl will make it even more difficult. Currently we have safety net providers in North Carolina that serve the uninsured and I'm afraid that the need to cover their costs will put them at a competitive disadvantage when they seek to be included in the close networks of our NCOs and our PLEs. This amendment will make medicaid expansion part of this bill. By passing a medicate reform you are clearing the number one stated objection to expansion, and I think a commitment to expand medicaid will inevitably strengthen our CMS application. It will improve the financial health of our providers and we would go a long way to eliminate it the unintended the negative impact this bill would have on any change so for those reasons your support. Mr. [xx] Senator Apodaca for what purpose do you rise? Question for Senator Van Duyn please. Senator Van Duyn do you yield? Yes sir. She yields. Senator do we have this fiscal note on this? No we do not. Senator Hise for what purpose do you rise? Speak to the amendment. You have the floor. Thank you Mr. President members of the senate. Here we are again I think this is probably the ninth or tenth in my five years here that we have an opportunity to once again vote down the requirement for the state of north Carolina to expand into the Affordable Care Act. If you look at this amendment as it's presented, says to everyone 133% or below the federal poverty line. All 133, 1 out of 100% everyone over 100% qualifies for those subsidies it's because the federal government has given us a one-size, fits all, must take or leave a plan and then she is talking a lot about the uninsured, that the affordable care has made it illegal in the United State to be uninsured. You are fined and penalized every year. Under the law for those who don't have insurance we all thought they went away or purchased insurance or pay the funds as a system we have. This is a bad bill for the state of North Carolina it continues to be a bad bill state of North Carolina and as we join once again I don't know how more clearly we can state it, the answer to the Federal government and the affordable care act is no. Further discussion or debate senator Robinson for what purpose of your rise. Ask senator Hise a question. Senator Hise yield I yield He yield Senator Hise you just said 130 the federal profited level is what Senator Van Duyn proposing, yesterday you said that something to the effect that people who needed to get a job, are you aware of any people who have a job but don't have insurance? I'm aware of individuals of who are in violation of the federal law right now by not having insurance and have an income strain that's correct. Follow up Mr. Chair? [XX] Would you answer the question senator Hise are you aware of any people who have a job but who do not have insurance. I will repeat, I'm aware of individuals who have income when jobs are there and are in violation of federal law by not having the insurance. Speaker of the amendment. You have the floor. The [xx] that shows that senator [XX] know, because we've discussed it on committee. Span examples house man 31 years of age, wife 26, two children construction worker with a job pole maker who is trying to take care of the children and they earn 23, 450 un insured because there are the medicaid gap. They need the eligibility that we are talking about, Senator and

Diana is talking about up to a 133%. Another such example is a 52 year old husband and his wife is 49 with four children, only making $22, 850 a year, not  enough to pay a premium on their own, but if we had Medicaid expansion could qualify to pay a smaller premium so they can get insurance. Now Senator Hise, Senator Tucker several of you, Senator Pate I told you I like some of the pieces of the reform and I've been walked along with you and I heard about it. And I think may be it's worth a try. However your contention the whole time has been about let's fix it, then we can look at expansion. So what's the excuse for denying these people who work. They are about working poor in North Carolina and they deserve to have health insurance as much as you all are who get it out of the states some of us. They are the working pull, they go to work everyday. Some home health aid workers, some clean houses nobody gives them anything they work for what they get. These are some of the same folks who live in the rural areas of North Carolina but also leave in the urban areas. We need to expand Medicaid so we can use money, and yeah I don't want to be 10%, but we're given, have given away to corporations, so maybe we ought to take a little bit of that money back and give some of these people health insurance I ask for you to support the amendment. Further discussion or debate? Senator Brown for what purpose do you rise? I was going to try to stay out of this debate but. Speak to the amendment. You have the floor. I don't know some of you may have read an article on the paper the other day I think it was an article about the cost of health insurance, about a rate increase about 37% increase I think it was, I can't quite remember the exact number, 35, 37% and was all because of recognition that was because of what the affordable cut[sp?] has done. And it talked about that and it gets into expansion and what has happened, I know how [xx] have read many states decided to do some expansion and what it's done to their budgets? Ohio being one of them, and the problems that they've had and how done, put their budgets in holes and how they're trying to work through it. I guess fortunately for us we chose not to go down that path because when we talk about medicaid expansion I have to laugh in a sense because when I look at what it's done to our budget, I know about five years ago I think we were spending about $1.8 billion of State money on Medicaid and I think we're up to getting close $4 billion that we're spending on medicaid which is a state portion a third of that cost and people say we haven't expanded medicaid, I just have a hard time figuring that one out when you doubt what you send and people say we haven't expanded medicaid, I can't quite figure those numbers out that, it will make much more sense tome, also you mentioned business about businesses in the state and I happen to e one of those businesses that provide insurances to my employees and I can tell you what a boarding[sp?] it's done on me because now, at one time I used to pay it all, now I've had to put a cap because I can no longer afford to pay it all because of what the cost of insurance has gone and again, the Affordable Care Act is one of the reasons that's happened. We can debate expansion, not to expand, but I think all the proof all across this country has shown that every State that has expanded Medicaid has created a financial problem in their State budgets, I don't know about one that can say it hasn't. There's a lot of work that has to be done on healthcare, I don't think anybody can argue that, I know Senator Hise, Senator Peyton, and Senator Tucker have spent I don't know how many hours this session trying to figure out some reform in this State because of what it's doing to our budget. We talk about teacher pay, we talk about funding all this and spending more on this, but I just think about if we had a 1.8 billion more spend in a medicaid

What we can do without money we can do a lot of things. I can think a lot of things that I would with it it's problem and again we will try to fix the problem we going to see how I think Senator Hise be the first to admit this reform is just the beginning of reform. I'm sure risk would have to be [xx] many, many times going forward but to expand the Medicaid at this point, it makes absolutely no sense in the model of transition, I just think we got to work through this thing figure it out then I got a [xx] watched [xx] eventually have to figure it out then, and then maybe our laws can try to control some of these pals but passing this amendment makes absolutely no sense at this point in what we're trying to do. I truly ask that you vote it down. Mr. President. Senator Russo[sp?] for what purpose do you rise? Would Senator Hise for a question. Senator Hise do you yield? I will yield. Senator Hise, thank you has been since the advent of Affordable Health Care Act, changes in eligibility in regards to who now can be a Medicaid, would you be kind enough to explain a little bit about how that worked and since especially since we didn't expand the Medicaid. How many new people have come on the rolls since then?  Thank you, Senator Rucho. I think we've seen a lot of changes including the modified income and others for our current medicaid enrollment, we saw in this January about 100, 000 individuals that were unexpected, they were enrolled in Medicaid in the operation about the time tax filing begin, they estimated over the two period as we've seen enrollment growth of almost 200, 000 individuals. We are now setting at a position to where more than one out of every five individuals in the state of Carolina is now covered under the Medicaid program and about 55% of our births in the state right now are actually covered under Medicaid. Medicaid in the operation and are quickly becoming the largest insurer of [xx] under our Medicaid system. Follow-up. Senator Hise, follow up? I yield. He yields. That's very informative and probably added to our medicaid woes. Do you have some estimate as to what that has cost the state of North Carolina in achieving or just taking on these people that automatically have been eligible since the affordable healthcare came in place? And some of those costs are baked in but what we're seeing is the growth of the Medicaid budget. It is becoming as well as the cost of serving those individuals somewhere in the neighborhood, for our base budget this year, the base it especially somewhere around $300 million. Thank you. Further discussion or debate? Senator Bryant what purpose do you rise? To speak on the amendment. You have the floor. I just wanted and to mention a couple of facts. Like Senator Brown, I was planning to stay out of it, but a couple of thing that I just felt a need to clarify. One is that no one who would have been eligible for the Medicaid gap, that is who's income would not allow them to qualify for a subsidy is in violation of any law around getting insurance because they can't get insurance under the affordable care act because they are prohibited from the [xx] and can't afford it so they aren't penalized if you're in that category. Point one, point two part of the reason for the increased health cost all these 500, 000 people who are uninsured that when they get sick we all end up paying for them to get service and our insurance companies and providers absorb that. So all our cost go up because of covering the cost of the uncompensated care, number two. Number three, it has a disproportional effect. Some of you may know that our health care core insurance premium differ by location. It is cheaper to get health insurance in Riley. Then it is a rocky mount, it is also one of the reason why we had trouble getting participating insurers in Eastern North Carolina under the Federal Affordable Care Act even with subsidies because the healthcare is higher where we have the greatest number of uninsured because our cost incorporates that uncompensated care, in other word there is nothing for free, so we are going to pay for it when we end up the issue is do we pay for it by capturing this people in to a system is where we

can manage the cost and the care and the prevention and or do we leave it outside the system as an invisible cost that we all incorporate and it disproportionately affect those of us who all ready from the poor areas because our premiums and cost for private insurance whether is on the market or through the exchange is higher because of the uncompensated care thank you. Further discussion or debate? Hearing none the question before the senate is the passage of amendment two to House Bill 372. All in favor will vote aye all oppose will vote no, five second be allowed for the voting. Clerk will record the votes. Senator Stain Moore, yes senator Stain aye. 16 having voted in the affirmative and 48 in the negative, I'm sorry senator Davis no. 16 having voted in the affirmative 28 in the negative, Jim Davis no 15 in the Affirmative, 29 in the Negative, Amendment 2 fails and the bill is back before you. Further discussion or debate on HB 372. Hearing none, the question before the Senate is the passage of House Bill 372 on its Third Reading. All in favor will vote Aye, all opposed will vote No, five seconds to be allowed for the voting, and the Clerk will record the vote. Berger, Aye. 34 having voted in the Affirmative and 10 in the Negative, Senate Committee Substitute to House Bill 372 has passed its Third Reading. The amendments will be engrossed, and the bill will be returned to the House on the issue of concurrence in the Senate Committee Substitute. For a concurrence, Senate Bill 429. The Clerk will read. SENATE BILL 429, Labor/2015 Technical and Conforming Changes. Senator Brock is recognized. Thank you, Mr. President. Senator Brown this is that perfect bill you were looking for. We figured it as a perfect bill, send it over to the House they made on change to it and it's written down in section there, I will just walk you through it really quick. It's an interpretation of selling onside and offside alcoholic beverages, apparently we've grocery stores that allow for testees things at the back of the store you have to be all days to do that as far as selling those tastings, however in the front of the grocery stores where most of the cash registers are, if you're out there buying a six pack and you're up the first on the all site consumption, currently, the interpretation that that is an onsite premise and they can not have the grocery store workers in the front of the cash registers and so beer for all site consumption's, so this is qualification of that for all site consumption, that the places with onsite tastings will be treated just the same way as all those that have all sight like every other grocery store. Just a clarification of classification in that issue in our view to support the concurrence. further discussion on debate. Hearing none, questions for the senators, the passage of the motion can concur in the house committee substitute senate bill 429, all in favor will vote aye, oppose will vote no, bill sponsor asks that you vote aye court will record the vote. 44 having voted in the affirmative and none in the negative on the motion to concur passes and the bill will be enrolled and sent to the governor. Members We're now on Tuesday afternoon and our pages have worked last night for today pretty good period of time and we have yet to have them introduced, so if the pages will come around for their introduction. Thank you for serving in the chamber this week, xx state bill, Brooklyn bring the. read loud.

Union Mills, Katelyn [xx] Bonning[sp?] Spring[sp?] Jack Denton Matthews, gracing forward Youngsville and [xx] Newton, Wilson, near Parker, Durram, Taylor, red farm, Durram, [xx] Riley, Etha Bunderdrift[sp?], [xx] Dustin[sp?] Roler[sp?] Riley and Samantha Walsh, Riley. Pages thank you for being here with us this week, members recognize your pages. Notices and announcements. Senator Woodard for what purpose do you rise? Moment of personal privilege Mr. President. You have the floor. Thank you Mr. President. Yesterday afternoon Senator Tucker extended an invitation on behalf of him, Senator McKissick and myself to come in and learn a little bit about TROSA, great drug recovery program that is based in Durham and we've had a couple of intense sessions and I hope you all will come down, something we can all agree on and feel very positive about. Sessions are going on this afternoon in dining room 1228, one's going on now and then again at five thirty, I hope you'll to take a few minutes and come down and learn about, this outstanding program. When I was state JC president 1999, one of the things I was proudest of was placing the JC chapter in this drug treatment facility. Friday night when Sarah and I were leaving a restaurant in Durham, I heard a voice call out across the parking lot and I walked over And it was Sam, one of the truce JC's that we helped adopt back in 2005 and when I met Sam and we adopted him had just been six months from being in a junky and so I see him today after a year and a half, and I ask how he is doing, today he is a foreman on a construction crew living in 12 men on his construction crew and he has absolutely turned his life around. We just thinking about how Sam has turned around thanks to [xx] be in a JC help a little bit to I'm in touch regularly with my friend Alex Warton was the president of the trouser JC chapter. When I met Alex he too was just about six months from being a Junky. He today he took trouser you've had about the businesses that trouser has, they have a long care service that takes care of service that takes care mine and [xx] Alex ran that crew for a number of years, since leaving Trosa[sp?] after serving as president JC chapter he went on to be the foreman he's now over five cemeteries in the Dramaria reunited with the daughter he lost during his period of addiction. He and his wife have three kinds and he is so proud of his son he is now playing pee wee football and their younger children. This place changes lives, it is transformative and it is as suppotertive[sp?] nonprofit. I hope you all will go down to room 12.28 and spend some time with me, Senator Tucker, Senator McKissick, Representative Avila, and learn a little more about [xx] and meet some of men and women were here today, an outstanding program I wish we could replicated it in every community in North Carolina. Thank you Mr. President. Further notices or announcements? Senator Ford, for what purpose of your rise? Moment of personal privilege please. You have the floor. Thank you Mr. President. A few weeks back I was inspired by Senator Brent Jackson, and Senator Rick Gunn with their sharing of watermelon and tomato sandwiches. So I wanted to share a little bit of Charlotte with you and so I reached out to my good friends at Snyder's-Lance, they have supplied us all with some snack packs. Just a little bit of information concerning Snyder's-Lance, Snyder's-Lance is the second largest snack maker in the Unites States. Snyder's-Lance represents a rich and traditional culture of more than a century old. The company's commitment of being a great place to work and make a difference and the community speaks to it's success. Dating back to the start of a small petro company in 1909 with the distinction of the original peanut butter sandwich cracker. The company currently employs over 1500 employees. There are approximately 1, 300 associates at the manufacturing facility all for South Boulevard which produces all of the lance seeing which crackers in Charlotte, and about 250 at the corporate

headquarters in the back on time corporate packing [xx] with annual revenues of 1.7 billion dollars [xx] slums is committed to funding hungry and supplying food for homeless families as well as supporting children's academic and cultural education. I hope you enjoy. Senator Ford we want to thank you for those gifts having grown up enjoying what we used to call square nabs. I was pleased to see those box of goodies, so thank you very much. Further notices and announcements, hearing none, further business coming before the senate? If not Chair recognize senator Pate for a motion. There is a debate going on about whether nabs are square of round, but they are not lambs[sp?] I move that the senate do now adjourn subject to the standard stipulation set forth in senate rule 24.1, the ratification of Bills, the appointment the conferees, the receipt of conference reports and the receipt of house messages to reconvene on Wednesday August 12, 2015 at 2 P. M. The Motion is that the senate do now adjourn subject to stipulation stated by Senator Pate to reconvene on Wednesday August 12, 2015 at 2 P. M., seconded by Senator Ford. All in favour say Aye, all opposed No. The ayes have it, the senate stands adjourned