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House | June 25, 2014 | Committee Room | Appropriations

Full MP3 Audio File

[0:00:00.0] We have two bills that we will take up today the first bill is Senate Bill proposed committee substitute for Senate Bill 3, I hear motion for the PCS to be properly before the committee. So, I move by Representative ___[00:20] all those in favor say aye, all who oppose no, the aye’s have it and Chairman Berg come up and recite and I will present the bill. [Pause] [SPEAKER CHANGES] Thank you Mr. Chairman, the proposed house committee substitute for Senate Bill 3 is in front of you and when we came to this general assembly this year coming into this session the general assembly everyone had made teacher compensation, teacher pay raises their top priority. We also made significant priority out of a commitment to raise starting teacher salaries up to $35,000 a year by the end of the next year and two year effort to do that. We also talk in terms of our priorities of making sure that we gave a raise to our state employees to restore master pay and also to do some things to improve professional development to allow us to demonstrate and some very substantial ways how we value teachers and how we value education in the state of North Carolina. I’m very pleased and proud that we had bipartisan support for the house’s overall budget and that budget is going forward and is now in conference. The bill before you today allows us with the other issues that are out there, this bill allows us to highlight and focus on education and those educational priorities that I just discussed. We know that these are the priorities that all chamber support, these are the priorities that the Governor supports and I believe that we should pass this bill today and take this effort to the for the house and to essentially allow us to proceed this general assembly to proceed and vote and insure for the school years that are upcoming for the school systems as they start the years are coming that we will preserve all of our teaching assistance that teachers will have the first substantial ways in five years since their salaries were frozen. The state employees will receive a raise that we will within the commitments that we have made in education fund or Master’s degree settlement that we had said we were going to provide that policy also provide funds for the Yellow Ribbon Campaign for our veterans and their educational needs ensure that we have clarified tenure as we did in the house budget and to provide those funds for the Career Pathways Pilot Program so that North Carolina can move and modernize move to a reform system with compensation modernize, our compensation system for teachers in North Carolina such that we may will be a model for the country. With that Mr. Chairman let me mention a few other items that are in this bill as you note the original budget bill was somewhere in the range of maybe 280 pages, the bill before you is probably roughly 40 pages I believe, 39 to 40 pages. This bill does not use additional funds from the lottery except is those funds were being swept up from accounts that were available or otherwise revised upward… [0:05:00.3] [End of file…]

in physical research's analysis of the consensus analysis for the lottery. I wish it was about 32 million additional dollars. This bill provides for the same thousand dollar across the board raises for our state employees, it provides for the 1.44 percent cost of living adjustment for retirees, of course the 5 percent raise as we discussed, all of the other raises and adjustments with respect to assistant clerks, deputy clerks, magistrates, the UNC raises as well as those for the highway patrol. So it is the same compensation package in size and scope that we passed in our House budget. This budget also provides 1.8 million dollars to [??] for coal ash, we anticipate that bill coming to the House shortly, and these are the funds to pay for that. We also have in this budget 134 million dollars in a medicaid risk reserve that the governor and the office of state budget would be able to utilize to ensure against any contingencies in the upcoming medicaid budget. I would just note that as things stand today, the cash position in medicaid is 127 million state dollars to the good. I would also point out that we have the 11.8 million dollars that needed to be provided through DPI to address the opportunity scholarship issue as well. There are other provisions in this budget that are principally technical, we may change this for example, in the grading system for our schools that everyone agreed needed to be made, again, an education priority, also with the community colleges we provide the mechanism by which the closing the schools gap will be able to be addressed with the savings that the community colleges had worked so diligently to achieve, and that both the House and the Senate had agreed needed to be purposed for that. Other technical matters that were necessary for the adjustments to the second year of the budget are also in here. Mr. Chairman, I'll be glad to go over - there are a number of individual provisions, I believe I have the latest sheet on that, but I'll be happy to go over those individual provisions or to answer any questions. Our anticipation is that this bill would be on the floor of the House on Thursday, to also make sure that members have sufficient time between the committee meeting and action on the floor. So Mr. Chairman, I'll be happy to answer any questions, or of the members wish me to go through each individual provision I'll be happy to do that as well. [SPEAKER CHANGES] Before we move into questions, I would point out for those folks in the back of the room, and if you're listening online, you can find the documents, the summary, and the PCS on the committee website, in case you don't have a copy. At this time we'll take questions from committee members. Rep. Jackson, do you have a question? [SPEAKER CHANGES] Thank you Mr. Chairman. Chairman Dollar, I had a question on the revenue that is used in this bill. It appears from my reading of Senate bill 744 that we passed a few weeks ago that there was a general fund appropriation of 21,111, 480,828. However the bill that's been passed out before us has a total general fund availability of 21,251,000,000, which seems to be a total of 140 million additional dollars in this document, and I'm wondering if you could explain the difference. [SPEAKER CHANGES] The difference is primarily come out of how you treat the reserves and what's quote-unquote "at the top", above the line in terms of your savings reserves

...your repairs and renovations. And there's also certain differences between some movements of funds from pots into availability that are not otherwise there in this version. [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] Follow-up, Mr. Chairman. Thank you. Are we using non-reoccurring money to fund re-occurring expenses. [SPEAKER CHANGES] No sir. [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] Do you anticipate the money from the reserves to be available the next year as well? [SPEAKER CHANGES] What I was saying, in answer to your question previously, is that the part of the differences are the amounts that balance out in the reserve accounts when you just approach this from the standpoint of a budget that is...I don't want to say, well...modifications to the existing underlying budget. The minimum modifications to that existing underlying budget. [SPEAKER CHANGES] Representative Glazier. [SPEAKER CHANGES] Thank you, Mr. Chair. Thank you, Representative Dollar. And I know you all maybe have gone over this in more detail in your caucus, but since we're just getting it, I really would ask that we go through a section by section analysis since this is going to be our major time to look at it before the floor. But when you do, my particular early questions deal with sections 1.2 and 1.3A. I'd like explanation of exactly what's occurring what the limitations are on those two sections which seem to be pretty important to the concept here. But I would ask for a section by section analysis. [SPEAKER CHANGES] I'd be happy to go through the section by section and if I can staff just briefly respond to the question with respect to 1.2 and 1.3A. [SPEAKER CHANGES] Phyllis [??] division. Looking here at the 1.2 has indicated that section says that matters that might have been prohibited for expenditure under GS143C6-5 are not going to be prohibited for the rest of the 2014-2015 bi-annual. The purpose of this is because in your two budget bills, there are provisions that were considered and if neither of those bills pass, GS143C6-5 will prevent agencies from being able to do some of those things. This change here in 1.2 allows flexibility for the next fiscal year on matters that might have been in both budgets and in agreement in both budgets in some way that might be able to be done are the provisions of this act. [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] I appreciate the explanation on 1.2, although I need to think through that, I think I understand. But the $361 million, can you explain, when you say they are not in controversy, am I to read that as, in the two budgets that passed, that's the amount that was agreed upon in cuts in both budgets and that's what that number reflects? [SPEAKER CHANGES] Yes sir. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] OK. Just to get it through... [SPEAKER CHANGES] Mr. Chairman, I have a procedural question. I think it's procedural. [SPEAKER CHANGES] Representative Insko. [SPEAKER CHANGES] When will we be able to get the money report? The other half of the budget. [SPEAKER CHANGES] We really wouldn't have a money report, per se, with this bill. If staff want to comment on that. [SPEAKER CHANGES] The way this is drafted, all the instructions necessary are within this bill, and an additional money report is not needed. You see in the front, there are modifications of the appropriations, as far as availability goes, there are some reserves that are created, and some other details that are included here so as not having to necessitate having the money report in the short bill. Now I defer to [??] if she wants to add to that explanation. [SPEAKER CHANGES] Representative Dollar. [SPEAKER CHANGES] Thank you, Mr. Chairman. 1.1A Sets for the adjustments to the general fund including estimates for the unreserved funds, you can see that very plainly. 1.1B directs the controller to reserve the amounts for the savings...

Reserve and repairs and and uh, renovations and as you may be wondering our title savings reserve uh, under this bill would uh, come up to six hundred and fifty nine million uh, plus uh, dollars. The uh, FICA matter uh, transferring that to general fund availability which was uh, uh, agreed to the additional uh, lottery money transfers uh, in and these are sweeping in all of those biggest pots that were um, uh, in agreement plus the um, the additional funds forecast um, one point one uh E is uh, includes fifty seven point one million increase revenue. The fifty one point one F appropriates uh, from the additional revenues and reductions in areas uh, and making adjustments to uh, age and municipalities and appropriating to the general maintenance reserve for contracts and resurfacing the transportation issue one point one G revises uh, again uh, fifty seven million dollars uh, increase in available revenue there a one point one H appropriates available funds from additional revenues in other areas to fund the uh STI, the uh, strategic transportation initiative, this is a uh, highway budget issue not with uh, we have explanation for one point one in one point three A, one point 3 B uh, directs um, uh, again thirty million plus in the highway fund um, uh and another eleven million dollars um, uh, in a manner of consistent with those the operation of those funds uh, one point four A uh, is the the generals fund support for the salary increases one, uh, point four B is your cost of living uh, one point five is the highway portion of salary increases, one point five B uh, is the retirement portion uh, from the highway fund one point six. Um, is contingencies in in uh, ?? this is uh, related to um, uh, uh, coal ash I believe if i recall correctly, uh, one point seven uh, is your Medicaid uh, risk reserve um, one point eight um, uh, uh, is the uh, prevision that was put in um, uh, for the option scholarships that we already voted on, uh, in the previous budget. One point nine appropriates funds with general fund for the educations salary supplements for masters in advanced doctoral degrees, uh one point one O, funds financial aid for veterans in the yellow ribbon campaign. Uh one point one one uh, funds financial aid for uh, veterans community college under the yellow ribbon program. Uh, Two point one uh, is the outline for the new uh, or outlines for new teacher salary schedule with the uh, average five percent increase again this is the same as we had in uh, uh, the prior bill uh, two point two outlines school based administrative salary um, schedule and other issues uh, two point three uh, specifies the permanent full time central office staff you'll receive a thousand dollar salary increase is consistent with the... [SPEAKER CHANGES] ?? [SPEAKER CHANGES] police, two point four... [SPEAKER CHANGES] Represent Floyd, Represent Floyd [SPEAKER CHANGES] Question of the chair? [SPEAKER CHANGES] Yes sir. [SPEAKER CHANGES] Oh for the ?? ?? A question? [SPEAKER CHANGES] Wait can we allow preserve dollar to run threw the... [SPEAKER CHANGES] That's my thought ?? [SPEAKER CHANGES] let it run threw the previsions and and then we'll come back to questions after he's completed that, at that time. [SPEAKER CHANGES] My, may I be permitted to ask a question? [SPEAKER CHANGES] State your question. yes. [SPEAKER CHANGES] Uh, uh, is he going thew all these sections? [SPEAKER CHANGES] Well. I was asked to but I can do it on a more uh, particularly this page right here I think I can do this page in a more shrunk aided fashion if that would suite. [SPEAKER CHANGES] The the [SPEAKER CHANGES] member [SPEAKER CHANGES] years requested representative Glazier going thew the provisions, it was requested by a member to do so and so he as uh, granted those provisions represent dollar you have the floor. [SPEAKER CHANGES] Thank you mister chairman I I think I can um, particularly on this page I I I think I can maybe accommodate both purposes um, all of the salary provisions you see on this page and and uh, skip over to point seven for just a moment these are all the ?? salary provisions that uh, you have already seen in the prior...

[0:00:00.0] …Budget that was passed at those same levels and in the same manner in which we set those out 2.7 is the career pathways in public program as was in the bill, as was in the Budget Bill. If you flip over to page 4, the first couple of items as it say there are those are board played items we also have the five days of leave provision with regard to the 35 mile radius for jobs for someone who is an SPA position and moves to an EPA position and then there is subsequently reassign back to SPA. The standard provision we have had in the lottery commission for sometime comments with or increases obviously cost of living is there contributions to the state health plan, some authority for the state treasure that was in there, the national guard pension which was in the budget, the non-permanent temporary employees under the ACA get that provision with the State Health Plan as before, the contribution rates for the Separate Insurance Benefit Plan, these are all compensation issues. If you go to the bottom at the revenue this involves the temp system those adjustments that run the budget that we feel have to be made, 4.1A gets into the Masters Pay, 4.1B also fixes a number of technical issues and like with those education programs with the LEAs, the formula changes, 4.1C the allowance for the community college system is mentioned earlier, the provision for the veterans in the Yellow Ribbon for community colleges. 4.2 gets into some HHS matters where we were repealing the ___[02:25] Savings Program that was not implemented but maintained the 3% rate reduction had been passed last year and it would be in place, work first adjustments, funds from the employment security reserve pay interest on the insurance that the veterans homes that were addressed in Black Mountain in Kingston, the lest front, the underground storage tanks, there you get repealing some technical matters that have been taking care in the highway US tax adjustments, ___[03:12] some terms in 4.8 is to what those mean and then on the final page the adjustments that were being made with the state revenues community confided program there repealing the language with DPS allowing them to fix the kitchen and make some other needed facility adjustments that really need to be done. And 4.11 that direct physical research issue for a legislative budget actions and provide records to the Director of the Budget who facilitate the 14-15 budget. I will be happy to respond to any other, to any further questions or to Mr. Chairman direct those to the staff as needed. [SPEAKER CHANGES] Representative Fisher. [SPEAKER CHANGES] Thank you Mr. Chairman. I’m over here for the bill sponsor. If we don’t see it on the list is that mean that it doesn’t exist anymore for example, childcare subsidy formula and eligibility scale for, eligibility for childcare subsidy, is that no longer a consideration for this budget if it doesn’t appear here? [SPEAKER CHANGES] Those changes would not be in this bill. [0:04:59.9] [End of file…]

Representataive Michaux [SPEAKER CHANGES] Thank you, Mr. Chairman. On page 11, that action dealing with clarifying changes to teacher contracts, could you explain that to me? [SPEAKER CHANGES] I would...Just to make sure that we have a perfectly clear answer, Mr. Chairman, I would refer that to staff. [SPEAKER CHANGES] Chris Nordstram from the fiscal research team. Basically this is just clarifing the performance based contracts that were funded in the 2013 budget. It clarifies in lines 40 through 46. Just clarifying that the $500 increase is a A. it's a pay raise and that it goes from $500 in the first year to $1000 in the second year, $1500 in the third year to $2000 in the fourth year. [SPEAKER CHANGES] Follow-up, Representative Michaux. [SPEAKER CHANGES] I'm still not...because what I'm looking at here, on line 36 through line 39, it looks like we're doing something with tenure in that situation, is that not correct? [SPEAKER CHANGES] To clarify, Chirs Nordstram again, fiscal research. These were the contracts that, if signed, the teachers had to give up their career status. There are no additional changes to the career status statutes in this bill before us. [SPEAKER CHANGES] Mr. Chairman, follow-up. [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] I need to get clarification on something else also. [SPEAKER CHANGES] Representative Blackwell, for you I think he may be able to... [SPEAKER CHANGES] I had a follow-up. [SPEAKER CHANGES] A follow-up on that issue? Or would you like... [SPEAKER CHANGES] No I got a follow-up on another issue. [SPEAKER CHANGES] OK on another issue? Representative Michaux, go right ahead. [SPEAKER CHANGES] Am I to understand that this document, this 45 page document or however number of pages it is that we received today, replaces the 245 page document that we passed out of here? Is that my understanding? [SPEAKER CHANGES] No sir. It does not replace that bill that has passed. What this does is allow both chambers to move forward on the most important set of promises that we have made in this general assembly. We want to make sure that as schools begin their process for starting out the next year, that they're going to know that they're going to have those teaching assistants there. They're going to know what the compensation is for those teachers. State employees are going to know, in those basic adjustments that are absolutely necessary, are made with respect to the budget. If other negotiations need to go longer on the broader bill, that will not, in any way, impede the moving forward with what we have said all along is our highest priority. [SPEAKER CHANGES] Just one follow-up. [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] I guess, Representative Dollar, what I'm getting is, if we pass this bill out, then is there...I guess what I'm getting at is if we pass this out and assure this, what happens to the rest of the bill we pass in that big bill? [SPEAKER CHANGES] That bill is the subject of work by the conferees. [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] If nothing is ever reached on that bill, we can go home with nothing in that bill and have this in tact. Is that correct? [SPEAKER CHANGES] That's correct sir. [SPEAKER CHANGES] Representative Harrison. [SPEAKER CHANGES] Thank you, Mr. Chair. I think Representative Michaux's question got to what I was going to say. Representative Dollar, I just wanted to confirm so the funding, the only funding impacting...

… DENR and this appears to be the extra funding for the coal ash positions, but as far as clean water funding, it will be whatever was in the… unless something changes with the negation on senate Bill 744. The funding level for clean water will be whatever was authorized in last year’s budget. Is that right? [SPEAKER CHANGES] That is correct. [SPEAKER CHANGES] And just to add, if you’re looking at follow-up on Representative Insko’s question earlier, if you’re trying to find a comparison, on the front page of the General Assembly, if you’ll look down in the lower left hand corner, there is a comparison document that will show you the items that are in controversy, items that aren’t, and the items that are not shaded are the items that would be affected by this budget here in front of you now. Representative Insko? [SPEAKER CHANGES] Thank you Mr. Chairman, and you may have just answered this, but I would like a list of the budget reductions as set out in Senate Bill 744 third edition and Senate Bill 744 seventh edition that are not in controversy, and I understand I could go through it and do that item by item if I went online, but if we could get a list it would be very, very helpful. [SPEAKER CHANGES] That document exists and can be provided to you. [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] On line 42 – 41 and 42 – it says state agencies shall not make grant awards with – [SPEAKER CHANGES] What page, Representative? [SPEAKER CHANGES] Sorry, page 3. Same section. “State agencies shall not make grant awards with funds that are subject to proposed budget reductions.” So I think what you’re saying here is that if you are a state agency and you still have money left over in this year’s budget that’s due to be cut next year, you should not spend any more money this year. [SPEAKER CHANGES] I would defer to staff to make sure that… I think I’ve got the right answer but I want to be 100 percent. [SPEAKER CHANGES] Representative Insko, Karen Hammonds-Blanks with Fiscal Research. That language actually refers to the fiscal year of 14-15 and not to the current fiscal year, so there would be no impact on what the agencies have done already during this fiscal year. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Representative Glazier? [SPEAKER CHANGES] Thank you, Mr. Chairman. I’m just, I’m going to try to limit it to three questions, and one’s a technical questions. If you could turn to the front page Representative Dollar, I think this is just a typo but maybe I don’t understand. So when you take the beginning unreserved balance of 167.7 and the revenue’s – [SPEAKER CHANGES] Could you give me the line, please? [SPEAKER CHANGES] I’m sorry, line 19. And then you take line 21, 19.9 on line 21, and then you take line 31, 990 million. That should add up to 21.25. It doesn’t. It’s about 110 million, 20 million short. I think what’s happened, and correct me if I’m wrong, if you turn to the next page, if you add in the subtotal adjustments of 120 million, it gets you to the 21.25, but that number shouldn’t be the number on the front page. That should be the 21 something and then the adjustments. I think it probably is incorrect on the front page. Would you agree? [SPEAKER CHANGES] Let me refer to staff on that one. [SPEAKER CHANGES] Representative Glazier, you’re correct. That is the final total number and that number should be less, that amount you just indicated. It will be a technical correction. [SPEAKER CHANGES] Thank you. Then my second question Representative Dollar, I think I understand but well let me get the second easy one out of the way and then the last one. There’s no provisions in here that deal with the Read to Achieve fixes, right? That’s left for another day. The Read to Achieve fixes that were in the budget, that’s not in here. Is that correct? [SPEAKER CHANGES] To my knowledge no. [SPEAKER CHANGES] And then my last question would be going back to the career status, just so I’m clear, what I think I understand, we attempted to fix that in the bigger budget bill which is at issue with the Senate. In here, there’s not an attempt to repeal the repeal. There’s simply an attempt to deal with what contract issues might be for people who accepted it, but right now the old law from last year’s budget as to career status is in effect except as enjoined by the court. Would that be right? [SPEAKER CHANGES] I would prefer to refer to staff, since that’s partly a legal…

I want to make sure I don't get it wrong. [SPEAKER CHANGES] Chris ?? from fiscal research as it's partly a legal issue I will defer to legal on this one. But there is as I stated earlier there is nothing in this bill related to related to career status. [SPEAKER CHANGES] Follow up. I appreciate Chris' great answer, which I would give if I was him too. But I just want to make sure that I understand the legal implications of where we are. One's a fairly big matter even though, I understand what you're trying to do here. So if we could just get some clarification at some point, before we leave, that would be great. [SPEAKER CHANGES] We'll work on getting that clarification for you. [SPEAKER CHANGES] Representative Wilkins. [SPEAKER CHANGES] Thank you, Mr. Chair. And I'm going to try and follow along. I'm on your left, Representative Dollar. I'm going to try and follow along after Representative Michaux. Representative Dollar, does this or how could this affect the conference process? [SPEAKER CHANGES] I think it could help the conference process. [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] To qualify that would it help the House position moreso? [SPEAKER CHANGES] Well I think that what you're trying to arrive at is a mutually agreed upon budget. I believe this would be very helpful to the process. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Representative Goodman. [SPEAKER CHANGES] Thank you, Mr. Chair. Representative Dollar, if I understand this, we're still planning to use, to transfer $116 million in lottery money for teacher pay and you've revised your lottery forecast to $57.4 million increase. That leaves about $58 million in lottery money that you're going to transfer out of what we currently use. Where are you going to take that from? Do you have an answer to that? [SPEAKER CHANGES] Those monies can only be spent for educational purposes so they would go into education purposes based on existing law. [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] Well, some of that money's for scholarships. Some's for school construction. Do you have an idea where you're going to move it from? [SPEAKER CHANGES] I believe the allocation and I will defer to staff on this. I believe the allocation would be in line with what would be in effect for 14 15. [SPEAKER CHANGES] Additional comments from staff? [SPEAKER CHANGES] Brian Madison, fiscal research. Just looking at section 1.1D. The clarifying language there appears to be lines 45 and 46 on page 2, which reads these funds shall be used to support public schools, teachers, compensation increases, and implement the career pathways pilot program in part 2 of this act. Those would be the two purposes. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Representative Michaux. [SPEAKER CHANGES] Yeah. I'm trying to ?? What happens if this, you've got a $12 billion budget figure here. What is the total cost of this bill? [SPEAKER CHANGES] This bill appropriates $21,251,115,466.00. [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] Does it appropriate it for what's in this bill? [SPEAKER CHANGES] Yes, sir, under the stipulations this bill and as I might add, and staff may be able to say it more eloquently or more technically accurate than I can. But as you know, we are modifying an existing underlying budget that is in force and effect and it will be in force and effect July 1. [SPEAKER CHANGES] Mr. Chairman, yes sir. You've got, you're reallocating, you've got the total availability of general fund provisions in here at $21,251,000,000.00 which is about $140 million more than was appropriated under the bill.

and left here a hundred twenty hundred forty million more than was appropriated when the bill left here. Now, what I'm trying to find out is how much this bill cost and where the rest of the money is being spent if we have to go home with just this in effect. [SPEAKER CHANGES] Representative Michaux I think the question answers itself. If the bill appropriates those funds, you have differing levels of funds. As you know you have some that are taken out above the line because they're in savings reserve and R&R. When those funds aren't there it makes other adjustments in those bottom line figures but the funds appropriated are the funds appropriated for those purposes. [SPEAKER CHANGES] I'm just a little dense right now because what I'm seeing is what you have done is you have taken care of the teachers and the state employees in this and a few other little items in here that's not going to cost twenty one billion dollars. Now if we pass this bill and shut down and go home with just this budget bill passed, what happens to the rest of the money because what's in here is not going to take up twenty one billion dollars? [SPEAKER CHANGES] We already have an existing budget. You have operations of state government. You have Medicaid. You have teachers, the rest of their salaries, the rest of a state employee's salary. You have all of the things that have budgeted for already in the appropriations act for the biennium that was passed last year. [SPEAKER CHANGES] That, Mr. Chairman, that's my point. In other words, we are not making, we will not be making any adjustments to the budget that we passed last year, the two year budget. We'll go home with what's left out of here to pay out what was appropriated in that budget that we passed last year, is that correct? [SPEAKER CHANGES] These are the adjustments in this document here. [SPEAKER CHANGES] Representative Jackson? Representative Insko? [SPEAKER CHANGES] I'm beating the same dead horse. So, my question has to do with the provisions in both the House and Senate version that we passed this year that were alike in the House and Senate but did not appear in last year's budget. And what I heard you say was that that Senate bill seven forty four is still in negotiation, we still have a final vote to take on that and if we don't take it on that then the version that we passed last year is in effect. But my question has to do with any new provisions that appeared both in the House and the Senate budget in those bills and this year are any of them in this budget, covered with the amount of money you have spent here? [SPEAKER CHANGES] They would be covered to the extent that they're in here, to the extent that they're not in this bill they would not otherwise be covered. [SPEAKER CHANGES] Representative Harrison? [SPEAKER CHANGES] Thank you Mr. Chair, just a quick clarification. Representative Dollar, the provision relating to UNC System employees section three point six, do I understand that the state personnel act covered employees have their salaries increased by a thousand dollars except for the UNC, the School of Math and Science. The UNC gets flexibility in determining the exempt employees, is that accurate and is this what the House's position was on this issue? [SPEAKER CHANGES] Could I catch that question again? The short answer is this is the same language from the bill we passed in the House. [SPEAKER CHANGES] Representative Glazier? [SPEAKER CHANGES] One last question, thank you Mr. Chairman, thank you for indulging. Just again, and I know we'll have to spend a night to go back and look, but as I understand it, because of the limits of what the budget's trying to do and to focus on the issues that it's attempting to just focus on to the exclusion of the others. For example, in areas that aren't in here, like the University budget. The University's budget that was in the two year biennium budget showed I believe that there would be another fairly significant cut or hit to the discretionary cut this year, were we not to do anything about that? Since this bu

doesn't do anything about that. Am I right that, and assume we don't anything else, that the two-year, or the second-year budgets would take place, whether it's the university or something else, but in the university's case, they would be hit with the additional discretionary cuts if there were no other agreement? [Speaker Changes] That would be correct as I understand your question. An item that would have been cut in the second year or continued reduction in the second year of the biennium would be in force and in effect. [Speaker Changes] Further? Rep. Reeves [sp?]. [Speaker Changes] Thank you, Mr. Chair. Chairman [xx], I was trying to make sure that I understood one point. All of this now is done. If this bill passes out, these issues are not be re-taken up by the conferees. These won’t be addressed any more. [Speaker Changes] If this bill passes the House, when this bill passes the House, if this bill passes the Senate and is signed by the Governor, then those provisions would go into effect at that time. [Speaker Changes] Follow-up? [Speaker Changes] Follow-up. So that make sure I’m clear, that means that if everybody passes on this, this isn’t going to come back in a budget bill to us after we pass this, unless it just flat doesn’t pass Senate. Right? [Speaker Changes] As I understand your question, yes, that’s correct. [Speaker Changes] Mr. Chairman? [Speaker Changes] Rep. Shaw? [Speaker Changes] Mr. Chairman, we passed this to go to the Senate. It comes back to us for concurrence because it’s a Senate bill. [Speaker Changes] Rep. Shaw, it’s going – [Speaker Changes] It goes to the Senate for concurrence. It goes to the Senate for concurrence, right? [Speaker Changes] Correct. It would go to the Senate for concurrence, not the House. Further discussion? Further debate? If not, Rep. Holloway [sp?] is recognized for a motion. [Speaker Changes] Thank you, Chairman Burr [sp?]. I make a motion to move for unfavorable report to Senate Bill 3, second edition, with a favorable report as to the proposed House Committee substitute for Senate Bill 3, with staff being authorized to make corrections to the availability statement as required and other technical corrections only. [Speaker Changes] You’ve heard the motion from Rep. Holloway, Chairman Holloway. Those in favor of the proposed House Committee substitute to Senate Bill 3 will say aye. [Speaker Changes] Aye. [Speaker Changes] Those opposed say no. [Speaker Changes] No. [Speaker Changes] The ayes have it. Senate Bill 3 is passed. [Speaker Changes] Thank you. [Pause] [Speaker Changes] Members, we have another bill. If you’ll take your seat, we’re not, we’re not through. We have another bill. Please take your seats. This time we’ll move to House Bill 1224. Rep. Hager [sp?] is recognized to explain the bill. [Speaker Changes] Thank you, Mr. Chairman. I appreciate the time. This bill, Rep. Presnell [sp?] is out of the county today. She’s with, I think, she’s her grandson or her granddaughter today, so I’ll be bringing this bill forward. We’ve got some folks, Mr. Chairman, we’ve got some folks from Commerce who can probably answer some questions for her, but the genesis of this bill is Evergreen Manufacturing around the Asheville [sp?] area has issues with the EPA, more issues, this bill appropriates, I think if you look at it, $2 million per year to help them with those issues. It’s about 1,200 jobs for the area. And, Mr. Chairman, I would defer questions to the Commerce Dept., if that’s okay with you. [Speaker Changes] Rep. Ramsey [sp?]? [Speaker Changes] Motion at the appropriate time. [Speaker Changes] Gentleman, hold the motion. Let’s see if we have any additional questions from members. If not – Rep. I’m sorry. Rep. McQueen? [Speaker Changes] I’d just like to say that this bill protects about 2,000 jobs in western North Carolina. I’m very much in favor of it and glad to see it before us here today. [Speaker Changes] Further discussion or debate? If not, Rep. Ramsey, you’re recognized for your motion. [Speaker Changes] Thank you, Mr. Chairman. I move for a favorable report of House Bill 1224, and is a referral needed, Mr. Chairman? [Speaker Changes] No sir. [Speaker Changes] Okay. Thank you, Mr. Chairman. [Speaker Changes] All right, you’ve heard the motion. Those in favor in House Bill 1224 say aye. [Speaker Changes] Aye. [Speaker Changes] Those opposed no. [Speaker Changes] No. [Speaker Changes] The ayes have it. The bill is passed. At this time we stand adjourned.

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