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House | April 17, 2013 | Committee Room | House Finance

Full MP3 Audio File

In order for products to be accepted onto the GSA furniture schedule, the company and the products must be vetted by the GSA program. So first, the company bust be vetted for HR employment practises and being in good standard. Second, the products must be vetted for meeting BIFMA, GREENGUARD, the Trade Agreements Act and various other standards. Also, the company is subjected to periodic audits by GSA. By way of illustration, Bernhardt's contract furniture division, Bernhardt Design currently has 388 chair skews, 181 table skews, and five cased goods collections. If you look at the handout that has been submitted to you, you'll see most of our products listed there. Of these, 298 chair skews, 76% of our chairs, 115 table skews, 63% of our tables, and three cased goods skews, 60% of those collections, have been accepted into the GSA program. In contrast, the state has only accepted ten of our current skews for the qualified procurement list, or less than 3% of our chairs. None of our tables and none of our cased goods collections. You'll see the chairs that have been collected highlighted in a red block on that handout. Despite having high quality current products that are made in North Carolina by North Carolina workers and that are accepted into the GSA furniture schedule, Bernhardt is unable to compete for most state furniture requirements, contracts, and daily furniture business. House bill 449 will provide Bernhardt and other similarly-situated North Carolina furniture manufacturers with a greater opportunity to compete for state requirements contracts while maximizing furniture products and value available to state agents at no additional administrative costs to the state. Thank you. [SPEAKER CHANGES] Thank you, sir. Representative Hager. [SPEAKER CHANGES] Thank you, Mr. Chairman. I can't see why anybody would be opposed to this bill so I'd like to move for a favorable on the PCS, unfavorable to the original. [SPEAKER CHANGES] Hold that thought. Representative Holley. [SPEAKER CHANGES] Speak to the bill? [SPEAKER CHANGES] Yes, ma'am. [SPEAKER CHANGES] I've been working with Representative Starnes on this bill. Part of the reason for qualified products in this state is due to the budgetary cutbacks. It takes a long time to evaluate each piece of furniture and each category and they have not been able to get as rapid a changeover as business has changed. Therefore, to allow North Carolina vendors and North Carolina vendors only to be able to be taken off of the GSA contract to show that they have qualified in a certain level is very good and I support the bill. [SPEAKER CHANGES] Thank you, ma'am. Representative Howard? [SPEAKER CHANGES] Representative Hager, please state your motion for the convenience of the committee. [SPEAKER CHANGES] Thank you, Mr. Chairman. I would like to move for a favorable on the PCS, the house bill 449 and unfavorable to the original. [SPEAKER CHANGES] Members of the committee, you've heard the motion. All in favor say aye. All opposed? Motion carried. [SPEAKER CHANGES] Thank you, Mr. Chairman. Ladies and gentlemen of the committee. [SPEAKER CHANGES] Thank you, Representative Starnes. [SPEAKER CHANGES] Representative Samuelson, house bill 135. [SPEAKER CHANGES] Thank you, Mr. Chairman. He's let me go because staff has to leave on this one. It's not very often that financees and ER- [SPEAKER CHANGES] Mr. Chairman? [SPEAKER CHANGES] Yes, ma'am. [SPEAKER CHANGES] I move that we have PCS before us for the purpose of discussion. [SPEAKER CHANGES] Bless your heart, you've heard the motion on the floor. All in favor say aye. All opposed? Motion carried. Thank you Representative Howard. My trifocals are not working that fast this morning. [SPEAKER CHANGES] Thank you- [SPEAKER CHANGES] Representative Samuelson. [SPEAKER CHANGES] But the environmental review commission reviewed this bill. This goes back to a legislation that we passed a couple of years ago that allowed for permit for landfills to be permitted on a ten-year cycle rather than a five-year cycle, but before we could do it on a ten-year cycle that was held until the rules were formatted for how we would do the ten-year permit and what the fees would be. So they now put this in place. It is neutral. It is technically revenue neutral, however, there is a fiscal note that will show- and I had it right here, what's changing is the timing of the fees, because whether you do a five-year cycle or a ten-year cycle, you're permit fees will be the same, it's just the timing will be off. So what you see on your fiscal note- do they have copies of the fiscal note? Okay, thank you. We see in the fiscal note is the first five years, they will be increasing collections. If you could see the next five years, you could see that the next five years, the collections are down by the exact same amount that they were up the first five years because they've gone from a five to ten year cycle, but's technically revenue neutral and I urge your support. [SPEAKER CHANGES] Questions, comments from the committee? Representative Hager. [SPEAKER CHANGES] Thank you, Mr. Chairman. We heard this bill in environment, I think we got all of the questions answered so I'd like a motion if it's the proper time. [SPEAKER CHANGES] Further questions from the committee? It's the proper time. Representative Hager. [SPEAKER CHANGES] Thank you, Mr. Chairman. I'd like to move for a favorable for house bill 135. [SPEAKER CHANGES] Members of the committee, you've heard the motion on the floor. Any further discussion? All in favor say aye. All opposed?

Motion carried. Sold. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] House Bill, Senate Bill 56, the Wallace satellite annexation. [SPEAKER CHANGES] Thank you Mr. Chair, members of the committee. This is a bill that ?? [SPEAKER CHANGES] Your mike’s not on, my friend. [SPEAKER CHANGES] Thank you Mr. Chair, members of the committee. This bill is a perfect example of good cooperation between city, developer and tenant. It allows the town of Wallace to annex lots in this particular development as they come onboard. There is no opposition to this at all. It passed the Senate unanimously, I ask for your support. [SPEAKER CHANGES] Representative Warren. [SPEAKER CHANGES] Thank you Mr. Chair. At the appropriate time, I’d like to make a motion. [SPEAKER CHANGES] Any further questions from the committee? Representative Warren. [SPEAKER CHANGES] I make a motion for a favorable report on Senate Bill 56. [SPEAKER CHANGES] Members of the committee, you’ve heard the motion on the floor. Any further discussion. If not, all in favor say aye. All opposed? Motion carried. Thank you Representative Dixon. [SPEAKER CHANGES] Thank you Mr. Chair, members of the committee. [SPEAKER CHANGES] We appreciate you being here. At this time we will have House Bill 336. Representative Conrad. [SPEAKER CHANGES] Thank you Mr. Chairman. House Bill 336 has been filed at the request of the University of North Carolina, school of the arts, and we do have here Mr. Jan DeCristo this morning if you have any questions. He is Director of Economic Development and External Affairs at the school. Prior to the session, the entire local delegation met with the school of the arts and this bill was their request and you can see that it’s also sponsored by Representative Lambeth who’s here today, Representative Hanes, Representative Terry, and also Senator Parmon and Senator Brunstetter are supporting it in the Senate. We are very proud to have the school of the arts in Forsythe County. It opened in 1965 and it’s very unique in the university system in that it has a high school component. They have about, average about 200 in-state students and between 50 to 70 out-of-state students. The students in the high school, they are required to take all the credits that a normal high school student would take, in English, math science, social science and foreign language. But of course, they choose to choose the high school because they are very gifted in some area of the arts, drama, music or dance. And they want to get this concentration in the arts and then the high school also has a component where they do a lot of performances, which of course causes the expense of the high school component of the school of the arts to be perhaps greater than a normal high school. Up until the year 2000, the in-state high school students were charged a tuition. The General Assembly in the year 2000 decided to appropriate enough money that in-state students would go at no charge to the school of the arts. Well we know that in the last few years, there have been appropriation challenges and the full complement of money for the in-state high school students has not been granted to the school of the arts. I think it mentions this on the PCS but the cost of all the fees and education for the in-state students totals around 2 and a half million dollars, but they’ve only been appropriated in the most recent year about 1.9 million dollars, leaving a gap of about 500,000 dollars. Now they’ve been covering this gap by using money from the undergraduate and graduate programs. But the intent of this bill is that they would like to reinstate charging tuition, of course the exact amount which would be the bridge gap, would be established by the UNC board of governors and the board of trustees of the University of North Carolina school of the arts. And they have also assured us that if this amount of money is difficult for any of the students that of course there is financial aid or scholarships that would be available. And happy to answer any questions or as I said Jim DeCristo is here as well. [SPEAKER CHANGES] Representative Carney. [SPEAKER CHANGES] For a motion, at the appropriate time. [SPEAKER CHANGES] Thank you. Representative Warren. [SPEAKER CHANGES] Thank you Mr. Chair. Actually, I have several quick questions if the gentleman will yield, be patient with me. [SPEAKER CHANGES] Absolutely. [SPEAKER CHANGES] Thank you. Representative, I may have missed this. Did you say if the charges would be based on the difference between funding, so would there be a difference between in-state and out-of-state fees? [SPEAKER CHANGES] Yes. The out-of-state students pay quite a bit. They pay, their tuition is $10,571.

?? just with the tuition. And if they stay on campus and take a full meal plan, that’s about an additional combined total of about $9000, so out of state is close to around, rounding it off, about $20,000. For in-state, the gap would be, and the numbers that I had from the school is a little different from the summary, but around $2500, but again, this bill does not set that amount. That would be for the UNC Board of Governors to actually set a dollar amount. This just allows the school to reinstate some tuition amount for in-state high school students. [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] I guess the only other question I have is how this course fits into Representative Carney’s bill that requires an art class or something for graduation. [SPEAKER CHANGES] Well, they have about five hours a day of intense training in the arts, which is why they choose to go to the school of arts, because you can’t get that at a traditional high school. [SPEAKER CHANGES] Okay, thank you. [SPEAKER CHANGES] I think they would be very overqualified as far as the credits. [SPEAKER CHANGES] Representative Luebke. [SPEAKER CHANGES] Thank you, Mr. Chairman. Thank you, Representative Conrad for mentioning the point that the financial aid is going to be available, I think, for many of us in the House Education committee. This was a key point that no one, because of income, not be able to attend the school with these fees and I appreciated that there were people from the school who talked very explicitly about that. Thank you for working on that and I support your bill. [SPEAKER CHANGES] Yes, Representative, I know the school of Arts is looking for the most talented across the nation and I’m sure they would not deny access to someone who had extraordinary talent it a particular area. [SPEAKER CHANGES] Representative Carney, your motion. [SPEAKER CHANGES] Mr. Chairman. [SPEAKER CHANGES] Excuse me, Representative Starnes. [SPEAKER CHANGES] Thank you. Just a question then. This bill is intended to bridge the gap between funding of the General Assembly and the actual cost, so do you envision the School of the Arts will be self sustaining then? [SPEAKER CHANGES] JIm, would you like to answer? I believe so. This is just for the high school. [SPEAKER CHANGES] Right I understand that. [SPEAKER CHANGES] If you will please state your name for the record. [SPEAKER CHANGES] My name is Jim DeCristo and I’m the director of external affairs at the UNC School of the Arts. As far as self sufficient, I mean, we would be self sufficient in the fact that we would close the gap and would still be receiving the appropration from the general Assembly that is used to cover the fees that were waved in 2001. It definitely is part of our plan to improve our self sustainability and if that gap was to continue to grow over time and give us the ability to keep that gap closed and make sure that we’re not charging those costs on to our graduate and undergraduate programs. [SPEAKER CHANGES] Quick follow up then. So basically if the General Assembly appropriates less money to the School of the Arts, the tuition charged to the students would increase. [SPEAKER CHANGES] It not…the fee charge. We’re not talking about tuition. But the fee charge would increase as that gap increases. If the General Assembly would give us more approprations then those charges would go down. If the appropriation was equal to the cost, we would not charge any. [SPEAKER CHANGES] Thanks for that, Representative Starnes. [SPEAKER CHANGES] Representative Starnes, I will add that this will not take effect until the year 2014 - 2015, not for the current class coming in this fall. I believe also, when I met with the School of the Arts, they did say that this concept has been vetted with the student and they understood the necessity and wanted to keep the standards of the school high so that there was not an objection from the student body. [SPEAKER CHANGES] Representative Hager. [SPEAKER CHANGES] Thank you, Mr. Chairman. Maybe to the gentleman. Can you give me the breakdown of the amount of instate student versus the amount of out of state students. [SPEAKER CHANGES] It varies every year, obviously, but it’s about 200 in state student in our high school to about 50 to 70 out of state students every year. [SPEAKER CHANGES] Representative Stam. [SPEAKER CHANGES] I like the policy of this, but has somebody on staff looked at whether you can actually charge fees to public high school students? [SPEAKER CHANGES] They used to charge [SPEAKER CHANGES] Miss Griffin, excuse me. [SPEAKER CHANGES] Representative Stam, there is some case law that we looked at, there was a challenge to some fees that were charged back, I think it was in the early 80s in a Greensboro school and the court concluded that reasonable fees that were associated were acceptable, but there also had to be some sort of a policy to accommodate students who couldn’t afford them. There was a case on that. [SPEAKER CHANGES] Further questions from the committee. Representative Carney. [SPEAKER CHANGES] Thank you, Mr. Chairman. I appreciate the Representative bringing this forward.

it does give them some flexibility and it's permissive language may and although I would like to see the students not have to pay it is a public high school but I do think it's an exceptional school, and if you haven't visited it you should. I had a niece and nephew to graduate from there and it's an amazing school nationally recognized. So with that Mr. Chairman, I move for a favorable report for House bill 436. [SPEAKER CHANGES] Members of the committee, you've heard the motion on the floor. Any further discussion? If not, all in favor say "aye". [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] All opposed? Motion carried. Thank you. Rep. Conrad. House bill 248, we have a PCS, Rep. Hager makes the motion to have the PCS before us for discussion only, all in favor say "aye". [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] All opposed? Motion carried. Thank you. Glad to have you again Rep. Conrad. [SPEAKER CHANGES] I thank you so much, this bill is one that is near and dear to my heart and I've been waiting 18 years to have the opportunity to file it. If the title seems familiar, to those of you who were here last session, former Rep. Del Fallwell presented a bill with the same title, addressing more disclosure on bond indebtedness but it was unsuccessful in getting a favorable report. The process for authorizing general obligation bond debt in North Carolina is founded on sound principles and is well run by the state treasurer's office, but I always felt that we had been lacking in transparency to the citizens. Since general obligation bonds are issued on full faith and credit, elected officials have the authority to pay back these bonds by taxing the citizens, and as former Rep. Falwell said to me the other day, the people who know the less about the bond process are the ones who are obligated to pay for it. I was a county commissioner in Forsythe for 18 years, and of course as a county commissioner I had to consider adoption of many bond orders during that time for school construction, libraries, and community college needs, and each time I was very outspoken on the need for complete transparency on the ballot, and also when each of the steps and public process on the way to the ballot. My main concern was that in the public notices and particularly on the ballot question, that only the bond principle amount is emphasized with little or no mention of the interest paid on the bonds, which as you know is a considerable amount. I originally as Del did wanted to place the exact dollar amount, estimated amount, of interest in addition to the principle on the ballot for full disclosure to the citizens and of course still wish this was possible. But there were a lot of objections from bond council and the treasury. So I decided to work with all the stakeholders to come up with a compromise and you have the PCS before you At the stakeholders' meeting with the League of Municipalities, the North Carolina Association of County Commissioners, representative of the treasury department Vance Holloman, Tony Solari, we had a couple bond counsels there including Tom Lee, my own finance director from Forsyth county and I think we have come up with a very good bill. The interest of course has to be estimated and it will be if you look at the bill in sections 1, 2, and 3. It has to be estimated because you know there are many factors between the time of the passage of a bill or referendum and the time the bonds could be issued. Interest rates can be changed, the bond rating of the government entity could change, you have up to 7 ears to issue the bonds, so during that period of time of course interest rates could change and also it occurred to my county, if you have a large school board referendum, we would not issue the bonds all at one time, we might do them over a period of 7 ears in parcels of 2 or 3, so there are a lot of factors that make the interest estimated. There's also of course the option of running out the clock. If you don't want to issue the bonds at all. The committee substitute bill beefs up the disclosure of the estimated interest cost, and requiring the publication of those cost in the authorization process. Sections 1, 2, and 3 cover those steps, from the introduction of the bond by the elected bodies finance officer to the publication by the clerk of the bond order, and also through the adoption the adoption of the bond order by the elected body. Note that there's also a statement in each section, the validity of the bonds authorized by the order is not subject to challenge on the ground that the actual interest cost of the bond when issued is different than the amount set forth in the statement. This was was put in there to address the concerns of the Bonds council, that a citizen might in some way want to file a law suit down the road, that if the actual estimated interest was different

...than the interest at the time of issuance. I felt that only probably a small percentage of the population may actually may be informed by steps 1, 2, and 3 so, to me, the most important part of this bill is section 4. This deals with the ballot question. In the past the ballot question was very minimal, very short, just mentioned the principal bond interest and do you approve and that was basically it. And, again, I was, as a County Commissioner who had to review the language that would go on the ballot, I was very frustrated at the inability to put more language on the ballot. If you'll look at lines 41 to 44 this is the new language, and the new pieces are underlined, "Shall the order authorizing," and then you have the blank, "for the principal amount of the bonds plus interest." This is a new statement, "For," and of course for library, schools, whatever it is would go into the parenthesis, and then the additional new language, "and providing that additional taxes may be levied in an amount sufficient to pay the principal of, and interest on the bond be approved." This is just for transparency. I know during my long time as County Commissioner a lot of citizens really didn't understand the bond process. From the comments they made to me, and I just felt that as an elected official it was my duty to make them at least have more information before making that decision. It's not there to dissuade them one way or the other to vote for or against the bond. It's strictly for transparency. There are some, I believe they were here, Bill McGee and Tony Solari from treasury. Everyone has reviewed the (I see, Tony, he's back there) the PCS and on board with this compromise language. [SPEAKER CHANGES] Questions from the committee? Representative Collins. [SPEAKER CHANGES] Just a motion at the appropriate time. [SPEAKER CHANGES] Representative Ross. [SPEAKER CHANGES] I wanted to ask a question of Mr. Lee who I saw in the back. [SPEAKER CHANGES] Mr. Lee would you approach the mic, state your name and department for the record. [SPEAKER CHANGES] Yes, my name is Tom Lee with Womble Carlyle Practices as bond counsel a lot of state and local government bond issues. [SPEAKER CHANGES] Yes, ma'am. [SPEAKER CHANGES] Mr. Lee we've heard that all the stakeholders were involved. Last year when we heard this bill bond counsel was very, very concerned about it because they thought that it was going to represent something that might not be true and there were going to be a lot of different problems. Are you satisfied with this version of the bill? [SPEAKER CHANGES] Yes, I am, and I have shared this with several of the other bond law firms in North Carolina that do the kind of work that I do. And, everyone from the legal side is, at least if anybody is dissatisfied they haven't told me. And they've been given the opportunity to tell me. [SPEAKER CHANGES] Than you very much. [SPEAKER CHANGES] Thank you, Representative Ross. Mr. Lee. First off I want to thank Tom Lee for being part of the process [SPEAKER CHANGES] Thank you, Representative Blust. [SPEAKER CHANGES] I have a question for Mr. Lee. If the bill had gone forward in its original form, and there was actually an estimated, that's call an estimated amount of interest, what could be the possible basis of a lawsuit if the estimate didn't work out to contract a reality? How, How would someone be harmed if it had clearly been on the ballot as estimated? That's just...I've just been baffled by the fact that that would cause such a stir - the original bill. [SPEAKER CHANGES] The longstanding principle in North Carolina has been that what's on the ballot question that goes to the voters as a contract between those voters and that unit of government. All the bond counsel who looked at this last year were very concerned that if we put an estimated amount then that becomes part of the contract or at least if we, well, let me, that becomes part of the contract and that if, for any number of reasons, the amount of interest that is going to be due on those bonds, which could range from, like Representative Conrad said: from the terms of the bonds, where tax rates are, whether the bonds are tax exempt or taxable bonds, whether or not their variable rate. There are any number of factors, the credit of the union, all of those that can go into it that if we have a significantly higher number then that breaches the contract. That's the . . . The voter's can say, "I was fraudulently induced into this contract." Now, if we could write about a question that is this long me might could handle all that and I think the bond holders could get satisfied, maybe not, but what we try to do, through this process, is to keep the ballot question much shorter, but separately in the process put those estimates, into the process but also . . .

Put them in places where we can state the various assumptions that go into how we determine this interest rate to give the qualifications that I just mentioned that are a number of reasons why this may not hold up. What we're trying to do is bring certainty to the entire prices, so that, if I buy this bond, I don't have to worry that it may get challenged later because of something that was in a bond ballot question ten years earlier. [SPEAKER CHANGES] Thank you. Excellent answer. Thank you. And I mean that sincerely. Representative Luebke. [SPEAKER CHANGES] Thank you, Mr. Chairman. I think my question is for staff, and it is a question concerning the difference in the language in the original bill and in the committee substitute as to the ballot question, the precision. And I guess the question is this: In the original bill, it seems to me that's straightforward and basically lets the public know what's going on, and I think that's a good idea. In the PCS on Page 2, Line 33 and 34, there is a phrase "providing that additional"…. essentially, does the voter understand that additional taxes may be levied, providing… actually, providing that additional taxes may be levied are not sufficient to pay the principal of an interest on the bonds we have approved. My question is, that's the law. Why would we need to put that additional phrase on there? I mean, clearly, if there's not enough … You've got to pay the bonds just like you've got to pay the bills for the Department of Social Services. I guess my question is, how does that improve the bill, or even is it necessary to have that language? [SPEAKER CHANGES] I felt that was an essential-- [SPEAKER CHANGES] I just wanted to ask staff about the difference between putting that on or not and whether… My concern isn't that it's already in the law and it's misleading, as if there's going to be a tax referendum or something later. Miss Griffin, if you could address that. [SPEAKER CHANGES] Representative Luebke, I think that the question speaks to Representative Conrad's point about transparency. I think that you're correct that it is, in fact, the law, and so I think to restate it simply restates the law. I think the issue was that, in discussions about this bill, that there was concern that a lot of taxpayers may not be aware of that. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] I have a follow-up. [SPEAKER CHANGES] Go ahead. [SPEAKER CHANGES] Again, this goes back to my experience as the county commissioner. It's not that citizens are not knowledgeable. They have buys lives, and they don't really know the intricacies of bonds. We've had citizens come up to me and say, "I didn't know that we had to pay the bonds." [SPEAKER CHANGES] Representative Stam. [SPEAKER CHANGES] I just want it very clear for them. In Forsythe County, we do what's called a debt levy plan now, where there's an immediate tax increase, even before the bonds are issued. We want them to know to expect a tax increase so that they won't be surprised. [SPEAKER CHANGES] Thank you, Representative Conrad. Representative Stam. [SPEAKER CHANGES] As a further example, some voters, Representative Luebke, including some legislators, think that bonds are like manna from heaven that just appears at you don't have to pay. As a matter of fact, at the federal level, some people think that borrowing money from China never has to be repaid, and it's therefore free money. [SPEAKER CHANGES] Representative Ross. [SPEAKER CHANGES] Thank you, Mr. Chairman. Just a comment. I'm thrilled now that the bill now doesn't create legal problems. But I do think that it's going to create infrastructure problems. It think that fewer bonds are going to pass, and we're going to have less infrastructure. I will say, though, more bonds might pass in our cities, so this will be another situation where our cities will have amenities and many of our rural area will not. I think that that's unfortunate. [SPEAKER CHANGES] Thank you. Representative Bill Brawley. [SPEAKER CHANGES] Thank you, Mr. Chairman. Representative Carney and I were laughing over some previous experiences. There was a situation in Mecklenburg County early in the '90s when people all of a sudden realized bonds did need to be paid back, and a bond referendum in 1993 just barely passed. Schools, libraries, parks got slaughtered. When we did bond referendums in 1995, 1997, 1998 when I was a park commissioner. We put out literature that said what the expected cost of the bonds would be and what the maximum tax increase, assuming no other

Money was found from retiring earlier bonds and could do a full disclosure. Now that also allowed us to get votes from people who had taken the no tax increase pledge because the people were fully informed. It also led to discussions about the bonds. There was a lot more sense of openness and those bond referendum than in the past by huge margins where they had previously failed. I think the comment about people being surprised that they have to pay the bond back is a surprising number of people that don't realize their taxes might go up to pay for the bonds and by putting it out there and having the full discussion it also cuts the legs out from under groups that will come in at the last with attack ads to try to overcome the bonds. The conversation is fuller. We were very successful. I'm a conservative republican. Representative Carney is less conservative than I and not a republican. We agreed on this. We worked together. And we were very successful. [SPEAKER CHANGES] Could we please ?? [SPEAKER CHANGES] Representative Brawley, please speak for yourself. Representative Samuelson. Oh, Representative Hager. [SPEAKER CHANGES] Thank you, Mr. Chairman. I think this bill is a good bill. I appreciate Representative Conrad bringing it to us. You know, if we give more information to our taxpayers and to our constituents, why is that a bad thing? You know, if we give more information same as we'd expect if we go out and take a personal loan on a mortgage or a car, why is it, I'm trying to figure out, why is that a bad thing. And the last thing I'll say as Representative Brawley keeps talking is, the other thing I'll say is that if we don't vote on parks and our citizens don't vote on parks and infrastructure, why is that a bad thing? [SPEAKER CHANGES] Thank you Representative Hager. Representative Collins, I believe you had a motion. [SPEAKER CHANGES] I'd like to make a comment and then a motion if we could. [SPEAKER CHANGES] By all means. [SPEAKER CHANGES] You know I've got a lot of confidence in our people in the rural areas. I live in a fairly rural county and I don't think our folks will be harmed at all by additional information. Personally I wouldn't care if the, in fact the only problem we have in my county is that folks have improved so many bonds that we have no limit left. We're at our limit. So it's not like rural counties don't want to improve their situations. Those of us that live in areas like that know that. I don't care if the, you know personally I wouldn't care if the ballot was a page long when I sign I'd like for it to have the type of information that we have when I buy a house where I know up front how much money I'm going to pay and that contract is several pages long and I look through that pretty carefully to see what the total amount of money is going to be, but if this is a compromise we can get as one of those who was a primary sponsor of Representative Falwell's bill last time, I certainly move that we at least give our tax payers this much information. That we give a favorable report to the Proposed Committee Substitute on House Bill 248, unfavorable to the original. [SPEAKER CHANGES] Representative Blust. [SPEAKER CHANGES] Staff, are these kinds of disclosures, aren't they required for consumer loans? Disclosure of the amount, the total amount you have to pay back including interest? [SPEAKER CHANGES] Representative Stam I think can answer your question. [SPEAKER CHANGES] I've done about 3,000 of those closings with the truth in lending. Yes, the total amount is there, but what is also there that I think is more important is the interest rate. Frankly, I think the interest rate is more significant to the consumer. [SPEAKER CHANGES] Thank you, Representative. Committee, we have a motion on the floor. All in favor say aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] All opposed. Motion carried. Thank you, Representative Conrad. Representative Tim Moore. House Bill 409. Like they say on The Price is Right, come on down. [SPEAKER CHANGES] Thank you, Mr. Chairman. [SPEAKER CHANGES] Thank you, Representative Moore. [SPEAKER CHANGES] This should be the easiest bill of the day. [SPEAKER CHANGES] Yes, we anticipate that with trepidation. That statement always brings fear. Please continue. [SPEAKER CHANGES] Thank you. This is an deannexation bill for the city of Shelby. Technical Classical Academy is a new charter school that is located in Cleveland County and they are waiting to close on property that is described also in this deannexation request to construct a charter school. It consists of roughly 56.38 acres. The city of Shelby, where the land presently is, has passed a resolution, I have a copy of that here, concurring and consenting to the deannexation of property. I have a letter from the city manager and also from the mayor. This is a, everybody's in complete agreement, I told my good friend Mr. Stone over there that

We’re not Buncombe and Lee county, we don’t like to fight all the time. We all just get along in Cleveland county. The reason they’re wanting to de-annex is they’re going to qualify for financing through the USDA and to get that you have to be in a county, you can’t be in a city limits. Sorry we don’t have quite the drama you guys do, Representative Moffitt. [SPEAKER CHANGES] Well, just hide and watch, you never know what happens next. Representative Samuelson. [SPEAKER CHANGES] To make a motion at the appropriate time. [SPEAKER CHANGES] Thank you. Representative Starnes. Representative Moore, we’re not done with you yet. We haven’t finished with you… [SPEAKER CHANGES] Because charter schools are public schools, typically they are exempt from ad lorem taxes, is that correct? [SPEAKER CHANGES] That’s my understanding, yes. [SPEAKER CHANGES] Representative Luebke. [SPEAKER CHANGES] Representative Moore, I know you like my questions and amendment so much. [SPEAKER CHANGES] Tickled to death. [SPEAKER CHANGES] We had this in government, Representative Moore, as you remember, and I don’t think you could explain then, why does the city need to de-annex this. I think it’s along the lines of Representative Stanes’ question. It’s already, the school would be exempt from ad lorem taxes. [SPEAKER CHANGES] Representative Luebke, he wasn’t in the Government Committee, another member presented it for him. [SPEAKER CHANGES] Yeah, I wasn’t then that day. [SPEAKER CHANGES] Representative Stone presented it. [SPEAKER CHANGES] I apologize then, I thought you had. But again, as Representative Stanes say, if it’s not subject to ad lorem anyway as a charter public school, why the deannexation? [SPEAKER CHANGES] It has to do with the financing that they’re going through. They have...they’re receiving financing through the USDA and to receive that financing that can’t be in the city limits. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Yes sir. [SPEAKER CHANGES] Any further questions for the committee? I know there’s a motion out there somewhere. Representative Samuelson. [SPEAKER CHANGES] I move that we give a favorable to House Bill 409. [SPEAKER CHANGES] Members, you’ve heard the motion on the floor. All in favor say aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] All opposed. Motion carried. Thank you, Representative Moore. Representative Tine, House Bill 242. We have a proposed Committee Substitute. Representative Moffitt moves the proposed Committee Substitute before us for discussion only. All in favor say aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] All opposed, motion carried. Thank you. Representative Tine. [SPEAKER CHANGES] Thank you, Mr. Chairman. [SPEAKER CHANGES] I’m afraid to touch the mic. I’m not sure where Representative Moore touched it, but… [SPEAKER CHANGES] He has been under the weather. [SPEAKER CHANGES] Adjusting the mic to make sure that …. [SPEAKER CHANGES] We’ll spray you with Lysol when it’s over. [SPEAKER CHANGES] Thank you very much, Mr. Chairman. This bill is the result of a contact that I received from the local fire department shortly after beginning the session that was having a difficult time getting a tax refund on their sales tax. I contacted the Department of Revenue and it took a few weeks but they figured out a fix to be able to get it back to them. I just asked simply how do we fix this so we don’t have to keep going through this type of process. Found out that in 2009 we intended to fix this issue by basically just saying that the fire departments and EMS have to be tax exempt, but then we realized that that IRS no longer requires that you apply for tax exempt status or to be a 501c3. This first fix went to Government and it went through and then Representative Howard very accurately recognized that the first fix made it too broad and that we might include some folks we didn’t intend to include, so this fix says you can either be tax exempt or financially responsible to a city or county. I’m ready for any questions that you may have. [SPEAKER CHANGES] That’s an open ended statement. Representative Waddell. [SPEAKER CHANGES] For a motion at the appropriate time. [SPEAKER CHANGES] Representative Carney. Representative Moore. Representative Waddell, it’s the appropriate time. [SPEAKER CHANGES] Mr. Chairman, I move that we give a favorable report to House Bill 242 to PCS. The Committee Substitute 242. I think it’s referred to Government. [SPEAKER CHANGES] It’s already been there thank God. [SPEAKER CHANGES] You’ve heard the motion on the floor. All in favor say aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] All opposed. Motion carried. Before we adjourn, I have one announcement, I know you all going be tickled to...thank you Representative Tine. There has been a subcommittee appointed to deal with de-annexation bills. I know you’re all tickled to death to hear that. Representative Stone, you’ll be the chair. Members of the committee, Representative Blust, myself, Representative Tines and Representative Hanes. We appreciate you all’s willingness to serve. The bills that have bee4n appointed to that committee, House Bill 500, 567, 568, 245, and 260. Also for information of the committee, I’d like for you all to keep Representative Robert Brawley in your thoughts and prayers. He is currently at Wake Med and he is going to have to undergo a stress test.

He has been in the hospital since yesterday, until tomorrow. I'm sorry. Representative Howard. [SPEAKER CHANGES] Just to remind the committee that finance will meet tomorrow at 8:30 in this room. [SPEAKER CHANGES] Yes, it will be the biggest show in town. There being no further business, we're adjourned. [SPEAKER CHANGES] Thank you. [AUDIO ENDS]