[BLANK_AUDIO] [SOUND] The house to come to order, members will take your seats, visitors to retire from the chamber The Sergeant at arms will close the doors. We ask all our members and all visitors to please silence all electronic devices. This afternoon's prayer will be offered by representative Ed Cog/g. We ask all members and all of our visitors in the gallery to please stand for the prayer and remain standing for the pledge of allegiance Representative Ed Cog/g. >> Thank you speaker let us pray. Eternal God we give you thanks for giving us another day. Lead us in your ways that our state may be guided along the roads of peace, justice and good will. grant strength and wisdom to our speaker, to the members of this This house and to the senate, to our governor and his cabinet and to our judiciary. may our combined efforts benefit our state and its people. Bless mothers across our state and nation that we will celebrate in a special way this Sunday. May all that is done within this house Be for your greater honor and glory, Amen. >> Amen. I pledge allegiance to the flag of the United States of America, and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. Gentleman from Hardick Representative Louis is recognized for a motion >> Mr. Speaker, the journal for May 3rd has been examined and found to be correct. I move that it stand as written. >> Representative Louis moves that the journal for May 3rd be approved as written, those in favor will say aye >> Aye >> Those opposed no, the aye have it. The journal is approved as written Partitions, memorial or papers addressed to the general assembly of the house clerk will read. >> Their Mr. Speaker the search North Carolina general stature 96-15.3 and North Carolina session law 2015-238. I'm pleased to nominate Mr. Keith A Holiday for reappointment as a member of the board of review for confirmation about. He will continue to serve as representatives of employees. Mr. Holiday brings a distinguished career of public serve and private sector experience for the board of review. He has served admirably since his original appointment in December 2013. Include you will biographical information and his statement of economical interest It is for your review. I urge your his confirmation at the earliest possible time. Sincerely Pet McCorry, Governor. >> As a matter further of the committee on rules calendar and operations. The house. >> Members, we have a with us two folks I want to make sure we introduce. First is is our Doctor of the day, Doctor. John Burkerd and our Nurse for the day, Melissa Watson for Asheville, would you all Van we all please stand so we can welcome you. Thank you for being with us today. [APPLAUSE] Introduction to bills and resolution to the clerk will read >> Representative Doltry, house rule 1020, indigent of service and amendments Judiciary one >> Representative of adultery, house filed 1021 amend industry commission statues. >> Judiciary one. >> Representative Pieas, house being 1022, town of Maxson GM Mexsation. >> Local Government and favorable finance. >> Representative Davis House field 1023, Municipal Service Districts Statutory Changes. >> Local Government. >> Representative Dickson, House field 1024, prohibits certain stern water control measures. >> Environment. >> Representative Dickson, house field 1025, Department of Environmental quality to commit codes and strain Extreme migrations. >> Environment. >> Representative Horn, Murphy, Earl. S. Martins. House field 1026. Collaborations of State Agencies Early Education. >> Health. >> Representative Horn, house bill 1027 Unfunded liability Retirement Health Fund Study. >> Pensions and And retirement. >> Representative Horn, hospital 1028, School of government Project standards overnight with despite. >> Procreations. Representative S. Martin house bill 1028, Economic Development Changes and Study. >> Coommerce and Job Development. >> Members, a few of the courtesies the gallery Gallery of the chair would like to draw your attention to. First off on the motion of the General of Horret, Representative Louis, the chair is happy to extend the courtesies of the gallery to a group of individuals representing the North Carolina occupational therapy association. Would you all please stand so we could welcome. Thank you for being with us today. [APPLAUSE] [APPLAUSE] Also a motion of the lady from Wilson County.
Representative Former Battlefill/g, the chair is happy to extend the courtesies of the gallery to representative from links incorporated amount those include Include Jin Mishow, whose the wife of representative Mishow, K. Webb the coordinator and Former Mayor of Asheville, Terry Bellarmine. Would you all please stand so we could welcome you. Thank you for being with us today. [APPLAUSE] >> All said I think this is the This is the same group that I will do this one motion of Representative Hamilton on New Hanover County, the same group that Wilmington chapter of the Links Incorporated are also here. And from by way of information, the Links Incorporated has been in existence for 70 years. And the Wilmington Chapter is the oldest chapter in North Carolina having celebrated 65 years in the And members from that and members from Wilmington Jackson Wanda Sloan , Karen Davis and Patricia Wadyle. Again we thank you all for being with us today. >> [APPLAUSE] >> And our motion of all members of the Meckenburg county delegation the chair is. Is happy to extend the courtesies of the gallery to Nataly English and members of the Charlotte chamber of commerce, would you all please stand so that we can welcome you as well. Thank you for being with us. >>[APPLAUSE] If I can have everybody's attention the house will come to order. The chair is about to make an appointment. The chair here by appoints Representative Peddlton/g of Wake county as chair of the committee of the committee on health would ask representative Peddilton/g to come forward and receive his gavel. [BLANK_AUDIO] [APPLAUSE] [APPLAUSE] Calendar senate bill 726 the clerk will read. >> Senator Michelle, Redman and Tillman senate bill 726 an act to reference of internal revenue code and to decouple from certain provisions of federal protection Americans from tax hikes act of 2015. General assembly North Carolina enacts. >> The gentleman from Meckenburg representative Brawley has the floor to debate the bill. The House will come to order. [SOUND] Would ask members to please take their seats. If members need to have conversation Please step off the floor. The gentleman has the floor. >> Thank you Mr. Speaker. We had a very lively debate yesterday, and as part of the discussion there was quite a bit of debate on what happens to the mortgage forgiveness, and the various persons that are caught up in that. And I hesitate to say things that I have not documented myself personally, so I wanted to go back and recheck and there were a few things I wanted to correct. There was discussion of people in bankruptcy being hit, kicked while their down by having to pay taxes on the debt forgiveness. But I have verified that under our arrest rules, debt forgiveness discharge under title 11 which would be chapter 7, chapter 11 and chapter 13, bankruptcy is not considered taxable income. We also discussed case of foreclosures. And that is where people have bought a house for For $100,000, they have gone into foreclosure cuz they can't make their payments. And the house was sold for $80,000 and there is imputed/g income there of $20,000. Now, it's also worth pointing out that there's a concept there called basis. The tax payers basis in the house is $100,000. When it sells for $80,000 that is a $20,000 loss. Unfortunately federal tax law doesn't recognize a law on the sale of principle residence. And while you would think. You could offset that loss against the imputed. income and zero out you really can't but their is another provision and this would take place in the case of for closure and that is insolvency. If you are in a position where you are unable to pay your debts, and your assets are less than your liabilities as they would be. Be in the case of the foreclosure. This form which is contained on page seven of IRS Publication 4681 which is entitled, cancel debt for closures and repossessions allow
you to establish insolvency status and the forgiveness of your debt then is not a taxable event either under IRS rules or North Carolina, because these are sections of the IRS Code to which we conform. The particular section that we are not conforming is in those cases where someones basis is significantly less than the debt. And while some debt is discharged, they are still ahead of where they were when they paid the house. So while we do recognize the concern, the justifiable concern, about kicking people who are down If you are down, we are not kicking you. We will allow you to not have to pay taxes on that debt forgiveness. The other sections of the bill, there was some, and I expect we will have more debate later today, but Mr. Speaker we had a good debate and vote yesterday and I hope we'll have a good vote today. Thank you. >> Speaker. >> What purpose does the gentleman from durham Representative Michele rise? >> To ask Representative Browley a question. >> [CROSSTALK] >> He yield. >> Say that again. >> The lion L-O-I-N sir. It is meant as a compliment sir. I just wanna know how you spell that. >> Representative Michele, there have been times I thought you might have been wrong, but I've never thought that you. >> [CROSSTALK] >> Apparently the lion has the floor to ask a question. >> All I want to do is ask a question, Mr. Speaker. >> Mr. Brawley, I'm aware of cognizant of what you just said on it however the problem, and I'm not so sure how you get over this. You are telling us that insolvency is not cut out, but if you take out the forgiveness altogether, how do you keep the insolvency portion in there. >> I'm gonna answer what I think you're asking me, and then if not of course I'll yield for a clarification. If you have gone in to foreclosure because you are unable to make your payment that along with the listing of your debts is prima facie evidence that you are insolvent. And if you are claiming insolvent status with the IRS by having filed this form, any debt forgiveness associated with the foreclosure is not taxed as income It's treated the same way it would be in bankruptcy. >> I have further questions, Mr. Speaker. >> I believe the gentleman's indicated he would yield to additional question. >> I do yield. >> The gentleman from Durham has the floor to state another question. >> Thank you. I'm still at a loss as to how you get over the hurdle by combining or making sure that the federal insolvency statute coincides or works with our state statute. Number one and number two is that if you're talking about some people don't have to file insolvency. Some people had a point particularly early in bankruptcy that doesn't mean that you totally insolvent. And people are still gonna be taxed based on that forgiveness in there. But the first part of the question is This is where I really need an answer. >> Sir the answer is the section the IRS code which contains the exclusion of debt forgiveness as income is a part of the IRS code to which we have already conformed and continued to conform, what we We are not conforming to is a change that created an additional circumstance under which debt forgiveness would not be taxed. >> One further question, Mr. Speaker. >> Does the gentleman yield to an additional question? >> I yield. >> He yields. >> But what if you don't What if you don't file for insolvency or can't reach the status for becoming insolvent? >> If you do not file for insolvency it would be considered taxable. If you do not qualify as insolvent in that your assets do exceed your debts, I think the assumption is you could have paid the Mortgage had you decided to do so. And then would not be forgiven that as be included in your taxable income for the federal government and also taxable income for the
state. Or excuse me, now the federal government would Forgive it regardless but the state would not. >> Just the gentleman from Durum has the flow to debate the bill. >> Is just the question that I have in my mind and I'm aware of everything that you've said representative Broughy/g but people got caught up. In this whole real estate scam that was going and their things that were happening particularly when they were over selling Morges and doing all the other things that this scam were doing. A lot of people were not aware of them a lot of people were put in position where for instance if at $20,000 Forgiveness is their you don't have to be in Solomon to file for bankruptcy and that's the you gonna get and you got a lot of forks who are out their that just can pay yet. They not necessary as Solomon but they could be bankrupt. And you still gonna text those people who we've been put into that position and it is to me is just unfair on now. Certainly if their is a situation where you could have maybe a level a cut off point or something like that would be a little bit more powerful. Than just a a naked bill as it is right now. What purpose does the gentleman from Duram representative Lucky rise? >> To send forward an amendment the clerk will read. Representative Lucky needs to amend the bill on page 3 line 10 through 14 by rewriting those lines to read. The gentleman has the floor to debate the amendment. >> Thank you Mr. Speaker and to mention to the members or state to members the amendment that I'm debating is 143V2 make sure that it is that amendment. Speak to the amendment now Mr. Speaker. >> The gentleman has the floor to debate the amendment. >> Thank you. Members you know that we had a long debate yesterday on the question of whether their should be debt forgiveness and no income tax charged for those who were caught up in this mortgage. Mortgage a mess. And I think we all agree that what the federal law has that you can exempt up to $2 million and have that be tax free was just excessive and there was conversation about recognizing That we could come down a whole lot, put a cap on, we could put a cap on much, much lower, and therefore help the really needy in the middle class where people have been laid off from their jobs. They've had lower incomes than they thought they were going to be . And we help those people we do not have millionairess we had that conversation. I thought their was something senses on that both sides of the aisle a lot of people came to me, and to other members here on the democratic side and said we like some idea of a lowered cap. What this amendment does is lower the way down, but I think properly sold to $50,000. So what it says is that if say you had as a result of the short sale you were at $75,000 liability. This would. Move $50,000 of that liability but you will still be liable for the 25,000. Or if the deference was 50,000 it would not be any income tax due at all, for 30,000 it would not any income tax due at all. Because what we are doing here is excepting only the first $50,000 of any kind of debt relief. I think this is a very fair amendment in that it helps what I can call the truly needy who are in difficulty with their house in the mortgage units. And Mr. Speaker I urge adoption of the amendment. [BLANK_AUDIO] For what purpose does the gentleman from Wake, Representative Stam rise? >> To debate the amendment. >> Gentleman has the floor to debate the amendment. >> 50,000, we're 50,000 now. So, hypothetical this is a character factual that means Means every idea that I give is not true. Suppose I'm a rich guy and I wanna give $50,000 to my friend George Cleveland here not as a gift, but for services.
Of course gifts, we don't tax gifts anyway. And I get him to put a note in deed of trust on his mansion in Jacksonville, and the next day, I say I hereby forgive your loan, and he's got services for me probably clandestinely, being a former marine you never know where he was. He gets to keep that 50,000 tax free. Great idea. >> for what purpose does the gentleman from Nash, Representative Collins rise? >> To ask Representative Brawley a question in relation to this amendment. >> Does the gentleman from Mecklenburg yield to the gentleman from Nash? Does the gentleman yield? >> I do. >> He yields Representative Brawley I think what I heard you say, and I want to make sure I understand this before I go on this amendment. I think that I heard you say the the only people who'd be affected by having to pay state income taxes are those who short sold their house, and the sale price was more than they actually paid for the house to start with. So there is, despite the fact that they're not getting all the money and they are getting debt relieved in effect, they are getting a benefit greater than what they paid. Is that correct? >> Sir I would not say in every case, but I would say in most cases there are conditions such as representative Michele entered earlier where if someone could claim insolvence status, but did not do it they would still end up paying taxes on it. Thank you. >> Mr. Speaker, what purpose does gentleman from Mecklenburg rise? >> I wondered if the gentleman from Durham, representative Luebke would yield for a question. Representative Luebke does the gentleman yield to a question from the gentleman from Mecklenberg? >> I do. >> He yields >> Thank you sir. I've read your amendments, and I noticed that the changed words are per taxable years 2015 and 2016. The amount excluded from the taxpayers gross income for the discharge of qualified principal residence indebtedness under section 108 of the code. Is that in excess of $50,000. Sir the way I read your amendment, you don't allow people to deduct up to $50,000, or not pay taxes on up to $50,000. But in fact it forces people to pay taxes on up to $50,000 and only excludes the amount above. I'm I misunderstanding the words here, or would you? >> Well Representative Brawley let me first say that I wanted to show you this amendment before it went up on the screen. And I didn't get a chance to do that. So just as a courtesy I'd I wanted to do that and apologize for that. As to the drafting of the amendment, the staff and I had very clear discussion of what the intention was and I said that in remarks what the intention was to exempt the first $50,000. If that is not the way you read it, I don't know what to say because it's not the way it was intended. And I just am taken aback besides talking [INAUDIBLE] my glasses on right now. >> [LAUGH] I'm taken aback that you say staff is drafted in a way that was not my intend and you know I don't like to criticize staff but I don't understand what happened. Because I had a clear conversation with staff and I thought we understood each other in terms of we're exempting the $50,000, and we're paying taxes above the $50,000. Thank you. >> Further discussion further debate on the amendment? >> Mr. Speaker? >> [BLANK_AUDIO] Is the gentleman wanting to withdraw his amendment? >> No. the staff is saying that- >> The gentleman is recognized to debate the amendment a second time. >> Thank you, Mr. Speaker. If I can have staff on the floor for just a second. >> The Chair grants that permission. [BLANK_AUDIO] Representative Luebke, what I'm gonna do is I well let someone else debate but I will let the gentleman debate again and count it only on the second time debating. For what purpose does the gentleman from Wake, Representative Jackson, rise? The member from Wake, Representative Stam, rise? >> To tentatively debate the amendment, depending on what it says. >> I will halt a committee meeting occurring on the floor at the moment, sir. >> Let me defer.
>> Is the gentleman from Durham ready to continue debating? Yes but just to clarify if I might. >> The gentleman still has the floor to debate the amendment a second time. >> Staff has told me that, Representative Brawley with respect, that the amendment does do what I wanted it to do. And so the amendment really is what I said before in my remarks, it does cap it at $50,000. So you get $50,000 of relief but not more than that. That is what I'd ask staff to do and staff confirmed that that's what it does. There was a misreading. Staff says really there was a misreading on your part. Well they're not saying that of you but they're saying the amendment is what I said it would do. It would help people up to $50,000. They would not get any relief on this discrepancy in the short sale beyond $50,000. That's what it does. You really do help the middle class, the people in bad financial situations if you support this amendment. And I would very much urge you to do so. Thank you, members. I apologize for the back and forth confusion but it is what it is in terms of helping people who owe less than 50,000 and they will get relief under this amendment. Thank you. >> For what purpose does the gentleman from Wake, Representative Jackson, rise? >> To speak on the gentleman's amendment. >> The gentleman has the floor to debate the amendment. Thank you, Mr. Speaker. I would just echo my friend's from Durham comments Because we start with federal gross income. It's a add back. It's the way staff explained it. And so you're only adding back the amount over $50,000 in debt forgiveness. And so it does do as Representative Luebke had hoped it did. I think this is I a great compromise. I think Representative Stam gave some examples that I guess somebody could exploit but I want to make sure everybody understands, he couldn't just give Representative Cleveland $100,000 and then have the debt forgiveness and take advantage of this. You would actually have to buy the piece of real estate and it would have to be Representative Cleveland's primary residence which my understanding is under federal law is defined and only in that circumstance would the debt forgiveness operate as some workaround on the tax code. So that is not likely to happen. What is likely to happen is people who have gone through a hard time maybe went to the bankruptcy court got discharged but kept their house cuz they really wanted to make it work and didn't want to be homeless and then later found out that they just couldn't make it work and had to let the house go whether it's through a short sale or foreclosure. This would allow the first $50,000 of their debt forgiveness. This is not money they got or a getting now in their pocket. This is a debt that has been forgiven. And so what we're basically saying is look, if they couldn't pay the mortgage company and the mortgage company couldn't find assets to go after to get the $50,000, more likely $20, $25,000 and they couldn't find it, then we'll forgive the debt. And you know what would happen if we don't forgive the debt? Then they're going to be a debtor to the state of North Carolina and North Carolina's gonna attach their tax refunds every year and any other legal means that the state has of collecting this money and I just don't think that's the business we want our department of revenue to be in and so I would ask you to support the amendment. >> For what purpose does the gentleman from Wake, Representative Stam, rise? >> A question one brief question to Representative Luebke and one for Representative Jackson. >> First of all Representative Luebke does the gentleman yield to the question from the gentleman from Wake? >> I do I yield. >>He yields. >> Representative Luebke in preparing your amendment did you have to get a fiscal impact of your amendment that we can share with us?>> Well we know that the total amount was 8 million from the research that the staff had done and this clearly bring it down below the 8 million and in my judgement whatever that amount is and it's definitely going to be below 8 million that's the right thing to do for the needy families really as Representative Jackson has spoken, as Representative Michele has spoken of there is a cost I think the cost is worth it. As you know I could find a number of things in the tax code that would find us that 4 million if it's 4 million. So it's not really about the revenue it's about the principal of whether we wanna help working families middle class families who have been caught up in this debt. >> Question for Representative Jackson. >> Does the gentleman from wake yield to a question from the other gentleman from wake? >> I yield. >> He yields. >>Representative Jackson this is a 4 million dollar question. In my hypothetical I want to hire Representative Cleveland to do
some credestine/g activity for me. Why do you say I have to buy him a house? >> Why can't I not lend them the 50,000 it would cost me you do real estate. I prepare the note and be the trust and record it for about $206 and then then I forgive the loan why do you say I have to buy a house? Why can't I just lend them the money on its principal residence then forgive it, then he doesn't have to pay tax? He put off the books? Representative Stam I believe you the second time when you to and defined your hypothetical You named it right you would have to have his principal residence. So no if he already lived in a house he would not have to go out and buy a new home. But you would have to take out a loan in deed a trust on his existing principal residence in order to make that hypothetical work. >> Follow up. >> Does the gentleman yield to an additional question? >> Yes sir Yes Sir. >> Yields. >> Record Jackson. Give you a little advertising her. How much would it cost for you to prepare a note in DIDA Trust and record it. >> It cost me 206 dollars I would charge. >> I'd believe we charge now about 950 dollars for that service Representative Stam You left Representative Stam speechless at that point. >> [LAUGH] >> Hopefully w do that more often. For what purpose does the gentleman from Mecklenberg Representative Browley rise? >> To debate the amendment. >> The gentleman has the floor to debate the amendment. >> I did want to say to Senator Blue Miss Grifefn/g came over and explained to me that there was a reference to an earlier portion of the bill and this was adding back. And so the way it was worded it would operate correctly. So once again we can see that all your [INAUDIBLE] the common sense of accountants and turning into something that's just backwards. Also I did want to say while I recognized the sentiments expressed in the Amendment I would ask that we do not adopt it. Thank you Mr speaker. For what purpose does the lady from Surri Representative Stevens rise? >> To see if Representative Blowley would yield for a question. >> Does the gentleman from Mecklenberg yield from the lady from Surri? >> I do yield for a question. >> He yields. >> Thanks Representative Blowley, in reference to this bill let's say I bought a house for a $100,000 and I live in it for 10, 15 years, and then I suddenly go out and borrow $150,000 against it. Then I default on the loan and all the bank gets back is $50,000. How much I'm I gonna pay taxes on? How much Much of that unrelated debt I'm I gonna have to pay taxes on? >> The total debt forgiveness if I remember the facts. You borrowed 100,000 then you borrowed an additional 150,000, >> No additional 50,000 for a total of 150,000. >> And your total balance was 150,000? >> Correct. >> And you would have taxable income of $100,000. >> I thought that you didn't->> Does the lady wish to ask additional question? >> if I may. >> And does the gentleman yield for an additional question? >> I do. >> He yields. >> Thank you but my basis in it was 100,000 so I thought you only had to pay taxes on the additional above your basis? >> No ma'am The basis we entered into it and the discussion of whether or not you could claim insolvency because it sold for less than the basis and you were losing money. The idea in your particular one is where you have received the additional $50,000 in cash The forgiveness of the 50,000 cash you got plus the 50,000 you borrowed for the house initially so your basis in the house determines whether or not you had a profit or loss and say it does not determine [INAUDIBLE AUDIO] >> Further discussion, further Debate on the amendment, if not the question of the house is the adoption of amendment one, [INAUDIBLE AUDIO] Representative Leakey, those in favor will vote aye, those opposed will vote no, the clerk will open the vote. >> [BLANK_AUDIO] [BLANK_AUDIO] the clerk will open the sheet to record the vote. 50 had voted in the affirmative and 62 in the negative, the amendment is not adopted. Members a couple of recognitions the chair would like to do. First of we have a group of students from Ashley Elementary School from [INAUDIBLE] would you all please stand so that we can welcome you up here on the right, thanks for being with us today. >> [APPLAUSE] >> We also have a group of students from Picket Elementary
School in Lexiston in Davidson County, would you all stand so that we can recognize you? [INAUDIBLE] thanks for being with us. >> [APPLAUSE] >> Also a motion from the gentleman from [INAUDIBLE] Representative Hagar the chair is happy to extend the courtesies of the gallery to the North Carolina providers council members, would you all please stand so that we can welcome you with us today. Thank you very much. >> [APPLAUSE] >> For what purpose does the The gentleman from New Hanover, Representative Kathlyn Raise. >> Thank you Mr. Speaker to introduce an amendment. >> The gentleman has recognized the seventh and fourth amendment to cooperate. >> Representative to Kathlyn Rise to amend the BILL on page three line ten through 14 by rewriting those lines to read. >> The gentleman from New Hanover has The member has the floor to the debate the amendment. >> Thank you. Am an Environmental Engineer and a Hydro geologist and I'm not a lawyer so I will do my best to explain this. As I understand this is that in a short sale, when someone sells your property at less than they owe on their mortgage Each loan then in the mortgage lenders agree to that, so example if you have a 200,000 dollar mortgage and you are only able to sell it for 180,000 then that 20,000 difference is something that now you had paid North Carolina taxes on. I understand that and I understand that people that take second loans using things like that. But there is one issue that I have constituents that have been contaminated and they can't sell there property and id they do they sell it at a lot less. So I want to make sure that their protected. This contaminated properties are difficult to sell and they're victims of contamination from all site property owners and so what this does, I know of a constituency, I've had one sub division with 90 homes that, because of our off site risked based rules, they're contaminated and they're having trouble selling their property and some of them are not gonna be able to make their payments so they'll be in this situation. So I wanna make sure they don't have to pay taxes on what they really lost and then also I am aware of constituents that have had underground heating oil tanks that now we don't have that trust fund to clean it up and so they have contamination and some of the constituents they have inherited the property from their parents who have passed away and they can't afford to continue to pay for it and so they do sell it for a lower amount because it's contaminated, I don't want them to have to pay income taxes on what is really not a profit for the for them. So this just exempts those contaminated and the words are residential property with contamination that resulted from the migration of contaminants all sorts of contaminants. From other properties under separate ownership in order to qualify for this exemption the property owner must not have caused or contributed to the contamination present on their property. So if they are innocent they're protected for this they don't have to pay that extra tax. And the other ones are the residential properties with contamination that resulted from the discharge of petroleum from an underground storage tank used to store fuel for nine commercial purposes and for which no fines have been received. From the none commercial leaking petroleum underground storage tank clean up fund. As the reimbursement for the cause associated with the clean up. And we have ended that fund and so they have inherited those tanks from the oil companies in 1985 to pass the liability on to them, and so I wanna make sure they are protected also. Most of them are senior citizens that had no idea they had liability when they were given those tanks. So I wanna make sure that we are being fair to those that are contaminated and so I ask you to please support this amendment it only exempts those properties. >> For what purpose does the lady from Surri Representative Stevens rise? >> To see if the amendment sponsor will yield for a question? >> Does the gentleman from New Hanover yield to the lady from Surri? >> I do. >> He yields. >> Representative [UNKNOWN] do you have any idea of the financial impact of this have you gotten a fiscal note? >> No staff told me they have not dose a fiscal research on this. I don;t think it's a lot I think the biggest impact will be on those who have serious contamination and they are not able to make their payments. >> For what purpose does the gentleman from Durham Representative Michele rise? >> To ask the sponsor a question. >> Does the gentleman from New Hanover yield to the gentleman from
Durham? >> I do. >> He yields. >> What your amendment does says that if anybody foreclosure or anything, if they can't say sell that property for what they purchased it for because of contamination that they should have known before they bought it, that they're gonna be exempt from any forgiveness on that? Is that what I'm hearing? >> If I may answer, again I'm not a lawyer but let's say that your property is contaminated by an outside industry, and then you try to sell your property because you're having trouble paying for it and the most you can get is 180,000 and you owe 200,000 then the bank would allow that difference and you won't have to pay taxes on that $20,000 that you technically lost. >> Further question Mr. Speaker. >> Does the gentleman yield to an additional question? >> I do. >> He yields. >> Where I'm confused is that a person who buys that property in the due diligence leading up to the purchase of that property would that person not have found out that here was underground storage leakage or the possibility of it and know that they have bought that property facing that risk, that's where I'm getting at. >> I'll give my best answer to that. I am aware of people that buy contaminated property, they go though phase one evaluation and they offered lease for the property so they have already lowered the property value when they [INAUDIBLE] when they buy it. >> Further question. >> Does the gentleman yield to an additional question? >> I do. >> He yields. >> But he person who bought it has to sell it for less than he paid for it knowing that it's already there and he got it at a lesser price but he sold it for else whatever reason that he paid for it, you're not gonna pay tax for that forgiveness? >> He's gonna try to sell it for as much as he can, and if the contamination is worse than he knew or there's additional contamination, then he He won't be able to sell it as much and so he would be protected also. >> Could I speak on the amendments? >> The gentleman from Durham has the floor to debate the amendment. >> This is really taking it in my book to a far extreme, you're going out and you gonna buy a piece of property and we Talking about foreclosure for those who couldn't afford to do it. But you go on out and you buy a piece of property and you're gonna do your due diligence. You're gonna find out through that due diligence whether or not the property is contaminated or whether there is a possibility of contamination for that property And you use that to get the property at a lower price, then you come a long a year, two years later and you want to sell the property because you scrapped/g the cash or something for whatever you were using and you know that is the contamination is there but you're gonna sell it for an even lower price than what you paid the first time for it. But now you're gonna forgive that [INAUDIBLE] at that point, how can you really reason this and make it work for somebody who's aware of the situation and knows what they're getting themselves into, and not do something for those who are unfortunate enough to be in that position. I suggest you vote against this amendment. >> Mr. Speaker, can I clarify that? >> For what purpose does the gentleman from New Hanover rise? Does he wish to ask this gentleman a question or to speak a second time? >> Just to speak a second time. >> The gentleman from New Hanover is recognized to debate the amendment for a second time. >> This says residential property with contamination that resulted from the migration of contaminants of property under separate ownership. It is not related to what you brought up. >> Members the chair will remind the members that we're debating amendment number two from Representative Curtlin/g those members that have eliminated their rights to speak on the main bill might want to cut those off, we'll get back to them, but for what purpose does the gentleman from Buncombe Representative Turner arise? >> To speak on the amendment please. >> The gentleman has the floor to debate the amendment.
>> Thank you Mr Speaker. For those of you who don't know in my area we have a super fun site called CTS. And it's on the top of the hill and over the years the toxins from that now defunct manufacturing facility have reached through the ground into the neighborhood at the bottom of that hill. And these folks who bought their houses when they weren't contaminated now face the prospect that many of them if they came can sell their homes have to do so a greatly reduced price. And this amendment I think would go a long way toward helping people who are affected through no long doing or malphices/g of their own and who have been waiting and waiting and waiting for the EPA and DQ to deal with the clean up they wanna move on with their lives. I think this amendment would go along way toward helping them to do so. And so I'd ask you to please support and vote yes in this amendment. >> For what purpose does the gentleman from Mecklenberg Representative Brandford arise? >> To speak on the amendment. >> The gentleman has the floor to debate the amendment. >> I have a unique advantage in the fact that I used to work as an environment engineer so I am very familiar with what Representative Catlyne is proposing. I also I'm in the real estate business. This is a real issue folks I wouldn't be surprised if this didn't get unanimous support because what we are really talking about we are talking to individuals who own properties that might not even know they have environmental impact until an old gasoline station three blocks away it was determined that an underground storage tank leaked and they hit ground water, and though a [INAUDIBLE] has come and impact to them. You have never known that when you're just buying a piece of residential property. Once you know however though you must disclose it. And this is where the values are really hit. So to me this is a very prudent for us to do because this is a real issue. Where are not talking about people who maliciously went out and made a make shift fuel tank and it licked on their property. We're talking about someone that got caught up in unintended consequence of a prior facility of something that's going on and it's impacted their property. I urge you to support the amendment, it makes a lot of sense and it really does impact those in rural areas and those at the center of urban centers because that's where a lot of your old filling stations and your old car care facilities are. So to me this is a green one all day long and appreciate your representative Caitlin/g for bringing it to the floor. >> For what purpose does the gentleman form Irondale/g Representative Fraley arise? >> To see if the amendment's sponsor would yield to a question? >> Would the gentleman from New Hanover yield to the gentleman from Iredell? >> Yes my neighbor. >> He yields. >> Thank you. If the contamination comes from a third party, why shouldn't the property owner seek relief through suing whoever caused the contaminant as opposed to relief through the tax code? >> That's a very controversial issue, we have legislation that allows on site contamination on other people's property under our risk based law Laws and in some cases they don't have to be truly notified that they're contaminated as long as they're not drinking water from a well and so there could be a release that contaminates your property and If you decide that you want to sue them you can't because our legislation says they can leave that contamination there. >> Thank you. >> For what purpose does the lady from Davie Representative Howard arise? >> Speak on the amendment. >> The lady has the floor to debate the floor to debate the amendment. >> Thank you Mr. Speaker I hope you will support this amendment because it's the right thing to do. One of the things that I don't think that we've even thought about is the reverse mortgages that many of our senior citizens are trying to do the right thing and use the So reverse mortgage and then pay the loans off so I hope you will support the amendment. Thank you. >> For what purpose does the lady from wake, Representative Avila, arise? >> To speak on the amendment. >> The lady has the floor to debate the amendment. >> Like probably many of you in here, I've had personal experience Experience with this in a subdivision in my district. There was a small, home run business dealing with chips and anybody
that deals in that knows what the cleaning solutions are, TCE and PCE. And it's sits on a hill and nobody down below knew it was there And they do now because some of the houses, the waters didn't shut down because it's so contaminated and they're either bringing in water or their having to be connected to an outside source. So through no fault of their own, they are losing money and like everybody else here, I just feel Feel like under the circumstances that this is the right thing to do. Please support the amendment. >> Further discussion further debate on the amendment sent forth by the gentleman from New Hanover? Seeing none, the question before the House is adoption of the amendment sent forth by the gentleman from New Hanover Those favoring the adoption will vote aye, Those opposed will vote no. The Clerk will open the vote. [BLANK_AUDIO] The Clerk will lock the machine and record the vote. With 94 voting in the affirmative and 16 in the negative, the amendment is adopted. Now we turn to debate on Senate Bill 726. Further discussion, further debate? Seeing none the question before the House is the adoption of senate Bill 726 as amended on it's third reading. Those favoring adoption will vote aye. Those opposed will vote no. The Clerk will open the vote. [BLANK_AUDIO] [BLANK_AUDIO] the clerk will lock the machine and record the vote with 76 having voted in the affirmative and 35 in the negative, Senate Bill 726 has passed it's third reading and will be returned to the senate. >> Senate bill 725, the clerk will read. >> Senator Ruccho, Senate Bill 725, a bill to pay in time on ultimate technical, administrative and clarifying changes for [INAUDIBLE] recommended by the joint legislative oversight committee on unemployment insurance, [INAUDIBLE] >> For what purpose does the lady from Mecklenburg Representative Connie rise? >> I'd like to be recorded as voting no on that last bill. >> Lady will be recorded as having voted no on third reading on senate bill 726. >> For what purpose does the lady from Davy/g Representative Howard arise? >> To debate the bill. >> Lady has the floor to debate the bill. >> Thank you Mr. Speaker. This bill s really simple, there's three sections of the bill and section one simply clarifies the rule for what is referred to as Seuda/g dumping and Seuda/g is to save unemployment tax act. And the tax is based on the tax rate that go up when employees file unemployment insurance claims. We have learned that some employers try to get seuda/g tax number to pay a lower rate of tax so, in that way they can escape the claim history for the first lay off for their employees and North Carolina law prohibits seeking a new tax number under Under what is called cinder dumping. So that's section one simply modernizes the language and keeps the same continuity and control to prevent this pseudo dumping by some employers. Section two simply adds The phrase have the power to, and it's just a clarifying change for the board of review that they can independently select 10 officers. In section three, it's the effective date of the provision and I would ask for your support. I stand to answer any question. For what purpose does the lady from Wake, Representative Holly, rise? >> Thank you. I'd like to vote on my last bill. >> The lady will be recorded as having voted no on third reading on Senate Bill 726. Further discussion, further debate on Senate Bill 725. If not, the question before the House is the passage of Senate Bill 725 on it's second reading Those in favor will vote aye. Those opposed will vote no. The clerk will open the vote. [BLANK_AUDIO]
The Clerk will lock the machine and record the vote. With 113 having voted in the affirmative and none in the negative, Senate Bill 725 passes its second reading and remains on the calendar. Members, we have a school group with us is the gallery that's arrived. Churchland Elementary School from lexington. Would you all please stand so we can welcome you. Thank you for being with us today. >> [APPLAUSE] >> Special message from the Senate. The Clerk will read. [BLANK_AUDIO] The following special message is received from the Senate. House Joint resolution 982, Senate committee substitute third revision. A joint resolution confirming the appointment of Robert L. Schumer duty of Director of the State world Investigation for a concurrency for the senate committee substitute joint resolution. >> Calendar and without objection today's calendar. This would involve the majority minority leader both conferred on this hearing no objection added to today's calendar. House joint resolution 982 the clerk will The Clerk will read. >> Representative Boles, House Joint Resolution 982. A joint resolution confirming the appointment of Robert F Schumer of Dearmond as Director of the State Bureau of investigation. The House resolves. The Senate concurs. >> The gentleman from Moore, Representative Boles, is recognized for a motion. >> Debate the motion. >> The gentleman is recognized for a motion motion. >> Thank you what is just clarifying that he is serving the rest of Director Colius/g term that was eight year term. And it's not a new eight year term. Just expired term. Further discussion further debate? If not the question before the house is the motion to concur with the city committee substitute house joint resolution 982. Those in favor will vote aye those opposed will vote no. The clerk will open the vote. [BLANK_AUDIO] [BLANK_AUDIO] The clerk will lock the machine and record the vote. 111 having voted in the affirmative and none in the negative, the motion to concur is adopted resolution is ordered enrolled. [BLANK_AUDIO] Senate bill 929 the clerk will read. Actually the clerk will suspend. For what purpose does the gentleman from Craven Representative Specioli rise? >. For a point of personal privilege. >> The gentleman is recognized to speak to a point of personal privilege. The first week of May is National Arson Awareness week. Each year hundreds of lives are lost and millions of dollars in property damage occurs as a result of arson. It's important that law enforcement officials have every tool possible to combat this costly and sometimes deadly crime. The state fire and arson dog Some dog program was established in 1993. Over the past two decades, more than 360 teams have been trained and placed in 44 states in the District of Columbia and Canada through the state farm Ice and Dog program. The canines are all Labradors retrievers because labs have a superior ability The ability to discriminate sense at the fire scene. Because they have a good disposition and an out going personality. Because they're very active and they have the love to work attitude. Canines are chosen to a cooperative program with guide dog and disability assistance canine organizations as well as local animal shelters and humane Societies. The Canines and the handlers are required to complete 200 hours, 4 week training course in Alfred Maine. The teams that would be the canine and the handler are required to re-certified every year to remain certified accelerate detection canine teams. There're two state firm arson dog teams in North North Carolina.There's Brian Philips and There's Canine Friday, he's the Director of public safety for the Moore county department of Public Safety in Carthage North Carolina.And his team has been certified since April of 2012 and there's Danny here on Canine Derby.Danny is the Fire Marshall of city of Fire department New bern, North Carolina and they've been certified since August of 2015.
[BLANK_AUDIO] >> Members,the Chair is happy to extend the courtesy to Gary,to the state firm Arson Dog Team. First we have Danny Hill and his Canine Derby, Danny is the fire Marshall for the city of New Bern fire Department. They've been certified since August of 2015 and then we have Brian Phillips and his k9 Friday Moore county department of public safety and [INAUDIBLE] who have been certified since April 2012, would you all please join me and please welcome if they are in the gallery the K9s and the handler. >> [APPRAISE] [APPLAUSE] >> We thank you for being with us and I know I speak for my colleagues and we express our honor and appreciation for all you do to keep lives safe thank you. For what purpose does the gentleman from Orange Representative Mayer arise? >> Thank you Mr Speaker I just want to like recorded as voting no on senate bill 726. The gentleman will be recorded as having voted no in senate bill 726. Representative Blowey is the gentleman wishing to debate 729 once the Chair calls it or the gentleman is seeking recognition for another purpose? >> Well I will debate the bill but I do have a point of personal privilege if I may. >> The gentleman is recognized to speak to a point of personal privilege. >> We were bailed out a little earlier from some discussion by Trina Griffen who is a very competent attorney that works for our staff but she also has a good sense of humor, and as many of you know that during some of the debates Representative Saine and I have referred to ourselves I am gold/g leader to my golden years. He is lead leader due to his firely/g personality and we were leading the rebel alliance he is a very big Star wars fun well what we received form her today a little bit of goodies that she had put together. Including life savers made from prestle/g sticks. A few other things and it's labelled to remind me as I didn't realize today is Star Wars day. May 4th may the force be with you thank you. >> [LAUGH] >> For what purpose does the lady from Franklin Representative Richardson arise? >> Thank you Mr speaker a moment of personal privilege please. >> The lady is recognized to speak to a point of personal privilege. >> Considering this week is National Teachers week of Appreciation I would like to read a point or a quote [INAUDIBLE] in honor of our teachers I've come to a finding/g conclusion that I am the decisive element in the classroom. It is my approach that creates the climate. It is my daily need that makes the weather. As a teacher I posses a tremendous power to make a child life miserable or joyous. I can be a tool of torture or an instrument of inspiration. I could humiliate or heal in all situations it is my response that decides whether the crisis will escalate or de-escalate and it shall be humanized or dehumanized and I think that this is the attitude of many of our teachers, most of our teachers and we want to thank them and appreciate them for all the services they provide to our students across North Carolina, thank you. >> For what purpose does the gentleman from Cumberland Representative Floyd rise? >> Mr. Speaker on Senate Bill 726 I had a [INAUDIBLE] problem and I'd like to be recorded as having voted no. >> The gentleman be recorded as having voted no on senate bill 726. For what purpose does the gentleman from Mecklenberg/g Representative Moore rise? >> On a personal privilege Mr. Chairman. >> Chairman has recognized to speak on a point of personal privilege, >> Very quickly I wanted to advocate to the body of May 1st through 7th is US small business week, as we know small businesses is very Important to the economy not only of North Carolina but of the entire nation.I think that small businesses employ more people percentage wise than most other businesses so just wanted to advocate and put all your mind small business week footing for the US small business administration. Thank you. Back to the calendar senate bill 729 the clerk will read >> senators [INAUDIBLE] and Tilman, senate bill 729 a bill to be entitled to make various changes to the revenue laws the general assembly in act >> The gentleman Mecklenberg Representative Browley has the floor to debate the bill >> Thank you Mr. Speaker, Speaker I sometimes refer to this bill as son of 605. As you may recall there's was a technical corrections bill from
last year that had several provision from the senate which we liked and to which we agreed and several provisions to which we did not agree There were also several things to which we liked and they agreed. The bill never passed because we could never get it out of conference we kept loading it up so it is come back as 729. This bill contains Only those elements of 605 that passed both houses, therefore went through both finance committees and both caucuses. There is one addition at the request of department of revenue to clarify the treatment of interest paid By a subsidiary cooperation to a parent, previously it was assumed that any interest expense over 30% going to a parent was a tax avoidance scum and was not allowed. What the law does is change this So that in those cases where a subsidiary can prove that interest paid to a parent out of state is then paid to a third party financial institution and is also not deducted by the parent in the parent state Can be deducted from North Carolina income taxes for those businesses that cannot demonstrate or trace where the money goes the percentage has been lowered from 30% to 15%. The fiscal note was indefinite they said in worst case It could cost us $5 million in revenue, in best case it could increase our revenue by $5 million. All of the study chairs on revenue loss agreed to this and the financiers agreed that this be added because the agency had requested it. It is the only Only thing that has not already been passed by both chambers [INAUDIBLE] in this bill. I'll be happy to take any questions that anyone has. Thank you. >> Further discussion further debate if not the question for the house is the passing of senate bill 729 on its second reading. Who's in favor will vote aye, those opposed will vote Vote no. The clerk will open the vote. >> [BLANK_AUDIO] >> The clerk will lock the machine and record the vote. 107 having voted in the affirmative and four in the negative senate bill 729 passes its second reading, it remains on the calendar. Notices and announcements. For what purpose does the gentleman from Lincoln Representative Saine rise? >> Mr. Speaker I arise for a point of personal privilege. >> The gentleman has the floor to speak to a point of personal privilege >> Thank you Mr speaker as [INAUDIBLE] alluded to earlier, I rise today not simply as a point of personal privilege, but recall events that happened a long time ago in a galaxy far, far away. I hope that we might put aside partisan differences whether it's west side or east side, dark side or light side on this historic day of memorial. Mr. Speaker there are few days that excite me as much as Christmas, few that I wake up extra early to send well wishes but Mr. Speaker recognizing that today is an exciting pseudoholiday for the children of the 70s and 80s I rise to that occasion. This historic day extends across multiple generations. If you've entered down to Representative Turners office you'll notice a rather large Lego [UNKNOWN] in his legislative assistants office. Unfortunately it is the partially built [UNKNOWN] and represents unfinished government project. Never the less I will be remissed that I have been waiting for this day for several years, to stand in front of the house Mr speaker, and to wish you and the members of the house and to say may the 4th be with you always, thank you Mr speaker. >> For what purpose does the gentleman from Guilford Representative Faircloth rise? >> For an announcement. >> The gentleman has the floor for an announcement. >> Thank you Mr speaker the house committee on ethics will meet tomorrow morning May 5th at 10 o'clock AM room 415 LOB. We have one item the consideration of a bill in response to state ethic commission request for procedural changes 10 o'clock. >> For what purpose does the gentleman from [UNKNOWN] Representative Warren rise? >> Just a moment of personal privilege please. >> The gentleman is recognized to speak to a point of personal privilege. >> Thank you members if any of you have association with or concerns
about volunteer fire department here in North Carolina, if you'd be kind enough to send me an email let me know. I'd like to speak with you thank you. >> Further notices and announcements? If not the gentleman from Hart. I have remembered the clerk has some announcements the clerk will read. >> House committee on Homeland Security Military and government affairs will meet Thursday May, 5th 10 am and 421 LOB. Any further notices from the clerk? [BLANK_AUDIO] Any further notices and announcements? If not the gentleman from Harnett Representative Louis is recognized for a motion. >> Mr speaker subject to the re-referral of bills and resolutions I move the house adjourn to reconvene Thursday May, 5th at 11 o'clock am. >> Representative Louis moves seconded by Representative Saine that the house do now adjourn subject to the re-referral of bills and resolutions. To reconvene Thursday May 5th at 11 am. Those in favor will say aye. >> Aye. >> Those opposed no. The house has it we stand adjourned. [SOUND] [BLANK_AUDIO] [BLANK_AUDIO] upon motion of Representative Louis, House Bill 956 short title, the [INAUDIBLE] county community college projects, he committee referral to the committees on education community colleges is removed and the bill is re-referred to the community on local government. [BLANK_AUDIO]