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House | February 27, 2013 | Committee Room | Commerce

Full MP3 Audio File

Speaker: Good morning welcome to the house commerce committee and the next summary on the house chair of the house commerce committee today we will be discussion n voting on senate bill 10 which involves reorganization and ?? first let me introduce our pages ?? by Representative Greedy ?? from union county Representative ? Eva Barlow sponsored by Representative milieus and ?? sponsored by ted Davis Jr ?? we do have a proposed committee sometimes so it would be in order for someone to move Representative ?? moves ?? proposed committee substitute is properly before us and i will recognize senator orthodox to have some brief introductory because this is our senate bill the proposed committee substitute has been passed out by Sergent arms at this point i think we are gonna do if it is alright senator if it's alright senator ?? run through the details of the differences between the house version of senate bill 10 and the ?? version is passed by the senate ?? so we started the beginning started the beginning that's probably a good idea Speaker Changes:if you give us a moment while we have the proposed committee substitute passed out Speaker Changes: ?? you are recognized to distinguish the differences between house version and senate version Speaker Changes: thank you Mr chairman members of the committee the senate version of the bill is passed out to the senate and sent to the house is the third addition of the bill this bill is structured in three parts part one of the bill consists of title basically ?? not met recently or duplicate's or been not critical to government operations it contains a number of boards and commissions that are accentual repelled in the statue part 1 of the senate bill also includes a modification ?? of the board of dietetics and nutrition in the first addition of the senate bill that board was eliminated in later amendment of the senate that board was modified so no longer fixes the destination of part 1 that the house committee members moves the changes to the dietetics board into part two of the bill part 2 of the bill deals with reorganization modification ?? number of the states some of which are eliminated the boards are the terms of the current boards are terminated and other change made to them those boards include resources commission the course of resources board ?? management commission the industrial commission wild life resource commission and i would ?? say senate version ?? the north Carolina turn pike authority the senate bill also eliminated seven security court judge ?? and modified the compensation of state board of elections change the appointment of the chair of state board of elections I'm sorry the state board of education modified the ?? lottery commission and expands the board of transportation part 3 of the commission provided an ?? the house committee substitute that is before you this morning as i said in part one basically modifies moved the modification ?? to part 2 of the bill is now contained in section 2.15 i believe if the part one continues to eliminate all of the other boards that were eliminated in the senate bill and adds addition that and the elimination of north Carolina sustainable local foods,

In 2012 there was a provision that would have terminated or expired that that council effective 2015 this provision accelerates that expiration to July 1st 2013 and authorizez secretary of agraculture to or the comissioner of agraculture to sustain the idea of local sustainable foods. Part two of the bill which is sort of the heart of that fact makes changes to many of the boards and comissions. I should say the first thing that the house comitte substitute does is to delete the provision supporting the twelve superior court judges, tha's no longer in the bill. A second change that is in the house committe substitute is the elimination of the provision relating to the utilities commision that would stay the same. The house commitee sustitue make different and additional modifications to the provision relating to the coastal resources comission and the environmental management comission. It also continues many of the to many of the other comitties. It reorganizes it adds some new ones modifies the supervision and post realese suprvision comission the state personel comission, The North Carolina justice and education standards comission. It authorizes the mining and energy comission which hold members concurently they can be on that comission as well as hold anothr office um simultaniously uh it changes the apointment authority for the um cheif administrative law judge for the office of the hearings um that position is currently adminstedrd by the supreme justice of the supreme court ths the house comittee substitute would make that apointment by the governer and subject to conversation by the general ssembly and would also make the apoint ment of additional administrative law the hosue comittee poart three adds a new part to liscencing boards it adds a provision requiring liscencing boards to consider factors before denying liscences to applicants with criminal records um and it also authroizez the program evaluation divison to study the autherization of the various indepentdent liscencing and consider the feasibility of creating a siongle state agency to oversee the administration of the boards these last two provisions were contained by the joint legislative procedure oversight comittee part four of the house comitte substitute um includes the severability clause and the effective date clause unless it is other wise provided in the bill the eniter bill is made effective when it becomes law um Mr Shrerif if you would like I could go section by section through this. [SPEAKER CHANGES] Based on that speach there will be summery review of the proposed comittee sustitute I wanted to see if senator Apodaca might want to make any comments [SPEAKER CHANEGS] Mr. Chairman I appreciate you letting me come over I feel like the parent that sent their kid to college and they come home at Thanksgiving and you don't recognize em so um my goodness what have you done to my child This is not a good way to start the session we sent a good piece of legislation over that we worked hard on and we put a lot of effort into and thought it was mutual but if this is what's gonna happen I'm particularly disturbed by the judges taken out I feel like been a move by some attorneys and I do question the ethics involved with that I just want you to know that up front WE'll take a harder look at that but Mr. Chairman I don't know what to say this is nothing like what we sent over so I would be wasting the house time if I spoke about it I just look forward to seeing the conference good bye and amen Thank You [SPEAKER CHANGES]Thank you senator apodaca (Apodaca?) Uh questions or comments for members of the committee about the proposed committee substitute Representative Samuelson. [SPEAKER CHANGES] Thank you Mr. Chairman will I appreciate the senators effort on this bill that I really appreciate Is the house's effort to make this a real responsible way to reform some important boards and commissions to reflect the values

[0:00:00.0] …And to really help us do the job that we are elected to do and so I urge your support. [SPEAKER CHANGES] Representative ___[00:12] [SPEAKER CHANGES] I have a question on this, why are the, [Inaudible] [SPEAKER CHANGES] The members will be appoint has been changed to require that they all be lawyers, can I ask what the reasoning is it? [SPEAKER CHANGES] The industrial commission and those workers compensation cases they awards that are awarded by the Industrial Commission are comparable to superior court awards. In order to be a superior court judge you have to be an attorney. So, based on the level of expertise required at the worker, at the Industrial Commission that was a change that was suggested by several members of the house to add an attorney requirement in addition two of the six members have to be board certified and workers compensation, I think there is a broad thought that this will help the industrial commission carry out their work better in a more knowledgeable fashion, Representative ___[01:30] [SPEAKER CHANGES] Thank you Mr. Chairman while the Senators having a hard time seeing this bill as it’s own and I’m having a difficult time figuring out this bill and what I would like to ask is that the committee spend some more time on it, I have many questions from the small like why eliminate forestry which is one of our major industries on the coast, from the Costal Resource Commission to the big like why are we supping the power of our municipalities and our counties to forward names to the Governor went from they may send them to or it ended up they may send them, it was, they will forward nominees for the appointment. So, I’m concerned about we are taking hands of a local and putting it back at the state. Two another big questions, why we find the utilities commission when they are in the middle of some right hearing some to do with my area in particular. Finally on process, we represent the people of our district as we all know and several of these changes are very severe and change a lot of how we do business and how we operate, I like the opportunity to be able to call the folks in my area to see both business and local government to see how these changes would affect them and receive their input. [SPEAKER CHANGES] Representative Fisher. [SPEAKER CHANGES] Thank you Mr. Chairman, I mean I have known this bill is coming but I guess I still feel like I’m in shock. I’m serving now in the beginning of a 5th term here and from the very beginning of the time I was sent down here by the people who elected me I was asked to work in a collegial bipartisan to the extent possible way with the folks here that I was sent to work with and this to me just smacks of partisan sort of opportunism, I think that it seems fairly clear that the reason that some of these boards are being eliminated or wiped out and starting from scratch is so that and requirements made that only certain people can pick members of certain board is just a way to eliminate one side of the…Sort of chance at making some sort of fair play happen. This is I mean I can go through the whole bill and take examples but I will just take one in particular and that is the doing away of the committee on the first page of the dropout Prevention Committee. In a year, where we have seen the highest rate of graduation in North Carolina in many years and the title or the part one of the bill says, to eliminate boards and commissions that are duplicative or are not deemed critical… [0:04:58.6] [End of file…]

This is a committee that I see… [SPEAKER CHANGES] Representative Fisher, if I could ask you a question. Are you aware the last time the dropout prevention council has met? [SPEAKER CHANGES] Yes, I am. And I know that part of the meeting had to do with the great success that they had had over time in making sure that our high school graduates...our high school students did graduate. I just, I think that like my colleague, Representative Tines stated, this is something that needs to have a little more work and a little more thought given to it. It doesn’t look like to me anything more than, we’re going to wipe out everything that was before and start over again and make sure that things are not happening in a bipartisan way. It just seems fairly obvious to me that that’s what’s at work here and I certainly cannot support it in this form. [SPEAKER CHANGES] Representative Blackwell. [SPEAKER CHANGES] Thank you, Mr. Chairman. I’d like to send forward an amendment please. I think the copies, I don’t know whether they’ve been passed out. [SPEAKER CHANGES] They have not been passed out yet. [SPEAKER CHANGES] Let them be passed out and then come back to me. [SPEAKER CHANGES] Certainly, that’s exactly what we’ll do. Representative Blackwell has an amendment and it will be passed out and when it’s sufficiently been passed out I will recognize you to explain your amendment. Representative Warren. [SPEAKER CHANGES] Thank you, Mr. Chair. First of all, I’d like to say, partisanship and motives put aside, and accusations put aside, I applaud the effort to reduce the size of government through the reduction of committees and their size and their lack of functionality. I was wondering, though, in part one, would the bill’s sponsor be able to provide some type of support documentation to show, perhaps, where there is duplication of the functionality of the boards that are being limited through other departments, agencies, or programs? [SPEAKER CHANGES] Representative Warren, most of the eliminations of certain state boards and commissions in section one were discussed in the administrative procedures oversight and for the two following reasons, either they were no longer funded or they have not been populated or met in a significant amount of time. I’m not sure duplication is really the issue on the elimination of the boars in section one. There’s likely some duplication, but mainly it was because we couldn’t find anybody to respond to these boards and commissions because they haven’t met in so long. That’s why they’re being eliminated in section one. [SPEAKER CHANGES] Thank you, Mr. Chair. [SPEAKER CHANGES] Representative Dollar. [SPEAKER CHANGES] I understand there some more amendment coming, but at the appropriate time I’m prepared to send forward a motion on the bill. [SPEAKER CHANGES] We will hold that motion until discussion has been completed. Representative Lambeth. [SPEAKER CHANGES] Thank you, Mr. Chairman. On page 19, I had just a couple questions or observations. This relates to the dietetics nutrition board. The term, this is line 27 on page 19, the terms of the members shall expire March 31, and the members of the board shall take office on the first day of July. I wondered what happens during that period of time if the boards terminated and then the new board takes its role July. There’s a period in there where there’s no boad oversight. That’s the question. The second question relates to staggered terms. Generally, I like staggered terms. This has all of them coming on or off at the same time, and I wondered about the staggered terms issue as well. [SPEAKER CHANGES] You’re talking about the staggered specific to the dietetics board? [SPEAKER CHANGES] For that board only. [SPEAKER CHANGES] I’ll recognize Karen Cocher-Brown to address the issues with the dietetics board. [SPEAKER CHANGES] Thank you, Mr. Chair. The article six, section ten of the constitution and GS128-7 provide basically for a holdover of members when their terms expires and a new appointments have not been made. Under the constitution and under statute, the current members would hold over until new members are appointed. [SPEAKER CHANGES] Thank you for that explanation. That sufficient? [SPEAKER CHANGES] Yes, sir. That’s good. [SPEAKER CHANGES] Representative Pierce. [SPEAKER CHANGES] Mr. Chair. Mr. Chairman, what fault was given in this process when you have those people on the board who had the expertise and you’re preparing to transition it to folks who you just might...like I said, some of them

Political appointments no doubt, but what thought was given that for our citizens back home who rely on some of these agencies with people of expertise. What thought was given to that, if you don't mind me asking Mister Chair. [SPEAKER CHANGES] Certainly. As specifically to the Coastal Resources Commission and the EMC, and environmental management commission - while the Senate version had a clean sweep in both of those, the House version is not a clean sweep. So we retain roughly 50% of the existing members on those two boards specifically to allow for that continuity. [SPEAKER CHANGES] Follow-up, Mister Chair. [SPEAKER CHANGES] I know that this is the environment that we operate in, but what assurances that this comes to pay that both parts of the House will have equal opportunity to make sure that we have members. I mean, can we have that assurance? I know you just can't tell what the future going to hold, but I-- [SPEAKER CHANGES] I expect a robust conference process on this legislation [laughter]. [SPEAKER CHANGES] Thank you, Mister Chair. [SPEAKER CHANGES] Representative Catlin. [SPEAKER CHANGES] Thank you, Mr. Chairman. I was trying to make sure I understood the appointment phase schedule for the Coastal Resource Commission and the EMC. A new castle shall be appointed in the manner provided by this subsection, with terms beginning on July 1st, 2013, and expiring on 2015. Could you explain-- could someone explain this, please? [SPEAKER CHANGES] Certainly. That is very confusing part of the legislation by it. And it was to preserve that continuity issue that many of us had talked about. So I'm going to recognize Karen Crocker Brown to explain how we drafted that. Jeff's going to explain how we drafted that. [SPEAKER CHANGES] Yes. The language here, there's similar language for the environmental management commission, it's designed to keep some of the current membership of the commission in place. Whereas if you look at the language at the bottom of page six, it provides that the terms of the members of the Coastal Resource Commission - in this case serving at the beginning of the year - expire when the act becomes law. Except as provided in the section. And if you look over on page seven there are four subdivisions starting out lines four through 17. These describe positions held by current members of the Coastal Resources Commission, and provide that those members serving in those particular positions continue to serve until June 30th, 2014. Although the other members of the commission would be removed and would be reappointed by their appropriate appointing authority, the four members serving in these current positions would continue to serve until June 30th, 2014. [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] Certainly. [SPEAKER CHANGES] These, pretend for just a minute I don't know who these four members are, can we describe what these categories are? [SPEAKER CHANGES] Yes I can do that. The first one, subdivision one - that's page seven, line four - this person shall-- they're currently in the position of representing experienced and commercial fisherman on the existing Coastal Resources Commission. And on the revised Coastal Resources Commission they will serve under subdivision eight, which is also a commercial fishing position. That's also part of the idea is that the experience of these existing members is carried over into their new positions on the revised Coastal Resources Commission. Subdivision two, that member currently serves in a wildlife or sports fishing position. Under the revised Coastal Resources Commission statue, they will serve under the sports fishing position. A third person is currently serving which experience in local government within the coastal area. That person will serve in a position for experiencing local government within a coastal area on the revised CRC, and then the final member is currently serving an at-large position, and would be carried over into the revised Coastal Resources Commission to serve an at-large position. [SPEAKER CHANGES] Does that help? Representative Catlin. [SPEAKER CHANGES] Thank you. Could I ask the same question on the EMC? [SPEAKER CHANGES] The transitional language.

For the internal management assistance at the top of page 11 and it works the exact same way, except in this Case of four members in Burma omission and commission will continue serving to June 30, '20 15th the difference between the case is largely to maintain the staggering debts, in place for the two commissions on the first person who's carried over service and a position for agriculture under the existing EMC and that person will continue to serve and the agricultural sliding the revised embargo management commission be a second person is serving in the eyes and engineer for on that experience and water supply or water and air pollution control arm and a person will move into a slot for the same thing is we're experiencing was five or water and air pollution control the third person is currently serving in a position on the four that on some one of public and Marches into senior water pollution control the purse seven newsstands to a position four and march from a point C and the final person is serving under position four on air pollution control and under the revised from EMC a personal certain air pollution control position but as chairman are some black allowable leave your name that has been sufficiently pastels you're recognized explain your memo by its (SPEAKER CHANGES) thank you Mr. chairman on this is the right thing to a fairly straightforward amendment one then I believe to be important and lives as many of PCs stands on one page 12 in section 2.48 dealing with the industrial commission would simply say the income of members of the commission already the terms are terminated as of April 5 to eighth and would go away all new people on my problem with that particular piece of the bill he is that if someone alluded to earlier the decisions of the International Commission or sensually judicial decisions of thousands of employees and employers across the state go before the Industrial Commission to get their case is decided in heard I think it sends the wrong message to suggest that we don't like a group of people making these judicial decisions at the Industrial Commission soldiers from afar mall employee all new people that seems to suggest to me that we're more interested in whether are making decisions we approve all of them that they're following wall justice this bill is the PCs and then amended to eliminate the firing of judges we checked and would've been a bad idea for the reason that we should let judges serve out the terms let them expire August they all are engaged in this behavior we're always use of dealing with bad as there are with the Industrial Commission on shore but given the fact that this is a judicial function that the Industrial Commission on cares Alt, my own argument to the members of this committee is that we all had functional presently serving sure about their terms Allies agree all the provisions relating to the National Commission with regard to qualifications of members all with regard to on diminishing away from terms of new appointees are and are our national house to believe this amendment which essentially say is currently serving members serve out their terms of a wise we go to the provisions so far the PCs are (SPEAKER CHANGES) some dollar papers (SPEAKER CHANGES) thank you Mr. chairman subcommittee in and of a greatly respect to the wisdom of friction of the liberals however on it to disagree with him rather strenuously on this particular amendment on is one of the prime sponsors on, the workers' compensation reform bill Harley parts and info? And all were mostly on the number two that a correction Crawford with the other prime sponsor for myself and one of the things we discussed quite a bit, was you know many of the problems are currently on the Industrial Commission that have been documented in the news media year after year after year have to do with the actual administration of the commission sale on we know we're all .......

due respect to folks that are over, we've had serious problems with the operation of that commission and there's only one part of it that is the actual adjudication of those cases. That's one part of it. But people forget about all of the folks over there, hundreds actually, who were working on all kind of other aspects of processing claims and cases and data that has been, and ensuring, for example, that employers that are supposed to be having workers' comp have workers' comp. We've seen all of these problems and, frankly, we need to clean house. We do need to accelerate. Obviously we could not do that last year because, in the legislation, because, quite frankly, the Governor at the time would not agree to go along with that. But I think everybody that's looked at this really, really closely understands that we've got a serious problem with the industrial commission and we need to go ahead and get with the qualifications that are in this legislation. We need to go ahead and get some changes made and some new eyes and new perspective and fix this commission. It is important to the effective implementation of the legislation that this General Assembly has passed and it should have, hopefully, a fix to the administrative issues that have been long and systemic with this commission. So, with all due respect, I would request that you vote no on the amendment. [SPEAKER CHANGES] Representative Samuelson. [SPEAKER CHANGES] Thank you, Mr. Chair. I agree with much of what Representative Dollar said but I've actually just got a question for staff on how this would work. When I read it it looks like this would effectively nullify the rest of that provision. Can you, maybe I'm reading something wrong, can you help me understand how it works? [SPEAKER CHANGES] Yes, Ms. Brown, you're recognized. [SPEAKER CHANGES] Representative Samuelson, the amendment provides basically not withstanding the changes that are being enacted in 97-77A, which are the new changes, basically changing the term to 4 years and requiring that they be [??]. Not withstanding that the Industrial Commission members that are serving currently would complete their terms as provided in section 22, session log 2011-287, and in that bill, last year, you all basically set out a staggered set of expirations for each of the members of the Industrial Commission. So this would basically provide that when their terms expire new appointments would be made, pursuant to the changes in the law that will become effective when this becomes effective. [SPEAKER CHANGES] Follow-up? [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] I guess what's throwing me is, on the amendment where it says rewriting the lines, it looked to me like we were deleting, in essence, those new staggered terms. [SPEAKER CHANGES] That's correct, Representative Samuelson. We're deleting those staggered terms and putting back in the staggered terms that you all created last year. [SPEAKER CHANGES] Representative Starnes, did you want to speak to the amendment? You're recognized. [SPEAKER CHANGES] Thank you. First of all, let me ask Ms. Brown a question. We established staggered terms for the Industrial Commission in the last session. Now, give me an idea of the timetable, when are these terms, how many are coming due this year or the next year? When will a majority of the membership be rotating up? [SPEAKER CHANGES] I have the section in front of me and it basically provides that one term expired April 30th, 2011, that's already happened. Two terms expire June, 2012, that's already happened. One term expires April 30th, 2013, one expires June 30th, 2014, one term expires April 30th, 2015, and the last term expires June 30th, 2016. [SPEAKER CHANGES] Second question? [SPEAKER CHANGES] No, just a comment on the amendment. I'm going to support the amendment from Representative Blackwell. We want to enable the General Assembly to influence the policy of this state through the appointments but I really think that we need to take the long view on these commissions and boards as opposed to the short

term view. Now, we went through a major re-write of the Industrial Commission in the last session and with workers' compensation laws an we recognized that the terms needed to be staggered and that there is a value in having some institutional knowledge on this board. I don't have any idea of whether their good commissioners or bad commissioners or who's doing a good job or who's doing a bad job. But we have a process that we've already established, that's less than two years old, where we can make reasonable appointments. I think that it's wrong-headed for us to do this at this time. I think it sends the wrong message to the public. I think that it sends the wrong message to the people who sent us here. Yes, we want to be able to influence these boards but we've already set up a process by which we do that. I think the systematic process that we set up last session is good and I support the amendment to stay with the staggered terms. [SPEAKER CHANGES] Representative Hall. [SPEAKER CHANGES] To speak to the amendment. I'd like to speak the amendment in favor of it. With respect to Nelson Dollar, I know he knows a great deal about the Industrial Commission, and most of the decisions are administrative, a great deal of them are. But as I read the resolution from Representative Blackwell, it's about full commissioners and most of the decisions of the full commission are on rules of law. So I hope you will consider supporting this amendment. [SPEAKER CHANGES] Representative Samuelson. [SPEAKER CHANGES] Can I actually speak on the amendment, please? [SPEAKER CHANGES] You're recognized. [SPEAKER CHANGES] I'd actually like to speak against the amendment. Someone has sent me a report that shows that there was a recent performance audit report that shows the North Carolina Industrial Commission has been lax in monitoring data to make sure that North Carolina businesses are keeping up with their duty. Even our bipartisan auditor, Beth Wood, had comments in there that they aren't doing what they need to be doing and so, therefore, I think, even though we put in the new system, apparently the people who are there are not doing the job, according the performance report or according to our auditor that they were supposed to be doing and this may be a way to restructure it so that we can get the people who are doing the work that needs to be done. [SPEAKER CHANGES] I'll also add, not withstanding the amendment, the section in the proposed committee substitute does not alter the staggering term. The terms are still staggered. Representative Dollar, you are recognized. [SPEAKER CHANGES] I would just, thank you, Mr. Chairman, I would just point out that had we been able to do something a little different in section 22 last time, we would have. The provision in the bill before you, having two, two, and two on the staggered basis, two for up to 2015, two up to 2016, and two up to 2017 is a much better way to do this and we do need to get change on the commission. The reality is you're not going to fix the problems, many of the problems, that we have in the Industrial Commission until you get the leadership changes that we need on that commission. That's just the honest reality of it. So I think that we need to vote against the amendment and we need to have the provisions that we got in this proposed bill. And again I would say, as one of the sponsors of the reform bill, I do not have confidence that we're going to get the true, full value, I would say put it that way, of that legislation until we affect the leadership changes that need to be affected. So again, I would just respectfully ask you to vote against the amendment. [SPEAKER CHANGES] Representative Avila. [SPEAKER CHANGES] Thank you, Mr. Chairman. I'm speaking against the amendment simply because, having gained a significant amount of knowledge over the last few weeks in other areas, what we're facing, to a great extent, isn't the fact that people know what they're supposed to be doing. The fact is simply they're doing it. There have been instances of flagrant disregard for legal statutes that were put in to place. There have been prejudices that have been instituted into the performance of duties and I feel like we are fully within the rights, as elected officials looking out for what's in the best interest of the state of North Carolina, to examine how people are doing their jobs and if they are not doing it in the manner to which it should be done we take action. Thank you.

further discussion on the amendment. Representative Catlin. [SPEAKER CHANGES] Thank you, I just want to point out that I've researched a couple of these committees and 60% of the EMC and 60% of the CRC appointments would be up for reappointment within, by summer of next year. So that's the majority in a fairly short period of time, so I just mention that. [SPEAKER CHANGES] Further discussion on the amendment. Hearing none, all those in favor will say aye. All those opposed say no. In the opinion of the Chair the no's have it. The no's do have it. Representative Hager, you are recognized. [SPEAKER CHANGES] Send forth an amendment, Mr. Chairman. [SPEAKER CHANGES] While Representative Hager's amendment is being passed out I will continue. Representative Shepard, did you have a comment that you would like to make on the bill? [SPEAKER CHANGES] No, I have questions. [SPEAKER CHANGES] Excellent, thank you. [SPEAKER CHANGES] Representative Holley, did you have a comment that you would like to make on the bill? [SPEAKER CHANGES] I just had a question about the staggering on page 7, where you were ending them all on the 14th, and I was wondering what the original ending date for those people, for those four, would have been? [SPEAKER CHANGES] So on page 7, I have that you're discussing the, are you asking about the CRC or on the previous page, continuing from the, that's correct, CRC. [SPEAKER CHANGES] The CRC. [SPEAKER CHANGES] Jeff, you're recognized. [SPEAKER CHANGES] Thank you, Mr. Chair. This is true for both the staggering here and the staggering for the EMC. What we did was we looked for members who actually, their current terms end on, in this case, June 30th, 2014. So these four members will get to serve out their current full term so, under current law, they serve through June 30th, 2014. Under the proposed committee substitute they serve through June 30th, 2014. For the EMC, those four members currently serve until June 30th, 2015. Under the PCS they serve their full term through June 30th, 2015. [SPEAKER CHANGES] Thank you very much. [SPEAKER CHANGES] You're welcome. Does everybody have a copy of the amendment offered by Representative Hager? Representative Hager, you are recognized to explain your amendment. [SPEAKER CHANGES] Thank you, Mr. Chairman. This amendment actually puts the Utility Commission back into the bill and let me explain why. Several of us met with Chairman Finley last week and asked him some fairly pertinent questions. Let me give you guys some data on the seven members on the Utility Commission. Six out of seven, and I'm not making any disparaging remarks here, the six out of seven are attorneys on that board right now. Only one member of that board has any industry experience on working in utilities, that's Chairman Finley. And in the conversations we had with Chairman Finley he did agree that it would be good to take the board from the commission and from five to seven and to put some unique experiences on that board that had actually had some experiences within the industry of which their making decisions on. So if you take a look at the bill, it basically does that. It reduces the membership commission, or the amendment I should say, reduces the membership commission to five members. It reduces the current members' terms, the current members other than the chair and that's important because we need some continuity on there, other than the chair to June 30th, and it provides that future appointees must have five years of what we call progressively experienced. That means that as they started in the industry it progressively got more into the industry and to the sector of business. And it provides that they may not be an office holder of any key party or service delegate of any party. That's basically, in a nutshell, what this long amendment does. There was a question earlier, I think by Representative Tine, or a discussion earlier about rate cases moving forward. This date has set. The rule is, right now, they actually can make a rate case decision with three members of the board and the rules are you have to start the rate case to be able to decide on the rate case. This date, on the June 30th, is set up so the rate case, I think the current rate case is

progress, if I'm not mistaken, will get completed before they start the Duke rate case after that, so these are set up so the rate cases are taken in mind. [SPEAKER CHANGES] Discussion on the amendment offered by Representative Hager. Representative Starnes, you're recognized. [SPEAKER CHANGES] Thank you. Well, obviously I don't like this amendment either. You know, if there's anything that's not broken in North Carolina, it's our utilities commission, and I just disagree that you have to have industry-related experience to be a member of the commission. You don't have to have any type of requirement or experience to be a member of the general assembly, or a county commission, or a school board, and yet, what I think is that we have to trust the people who are making appointments to this Board, and I believe that if you nominate and appoint people of reasonable intelligence, they have the ability to learn the issue of front of them, and I want to give them more credit than some of my other colleagues will. You know, I just really think that the utilities commission, and the way we've got it structured now, it works, primarily for the benefit of the consumer in North Carolina, who's dependent on affordable electricity, but they're meeting the needs of the utility industry as well. They're able to operate, operate it at a profit, and build the facilities that they need to make sure that we have the infrastructure in place to provide a stable and reliable source of electricity. And of course, the utilities commission does more than just electricity, they have a number of issues that they deal with. But I just oppose this amendment just because I think you're trying to fix something that's not broken. [SPEAKER CHANGES] Representative Collins, you're recognized to discuss the amendment. [SPEAKER CHANGES] Well, this amendment, I feel kind of like, with Representative Hagens on one side and Representative Starnes on the other, kind of like, some of my friends like this, and some of them don't, and I'm voting with my friends on this one. That's kinda the position I'm in. But I actually like this amendment, and the reason I like this amendment is for three things that I see right behind the other. I think it is important that for something as significant as rate-setting ability that we do have some knowledge of what's going on. I might like to be a member of the utilities commission rather than being in the legislature so I can make 125 grand for attending however many meetings it is they have a year, but I don't know anything about setting rates. I really don't, and I don't think I'd be a very good member of that committee. So I think it is good that people have some background in finance or rate-setting or something related to what they're doing. Second thing, I like the fact that they're now gonna be under the State Government Ethics Act, just like you and I are. And third thing I like is that apparently there's a move to depoliticize this thing. The last two lines on the first page there. So for all those reasons, I'm gonna support this amendment. [SPEAKER CHANGES] Representative Samuelson, you're recognized to debate this amendment. [SPEAKER CHANGES] Representative Collins did a good job of describing being stuck between a rock and a hard place. The two things I have disliked about the Senate version of this bill were the inclusion, originally, of the judges, and the inclusion of the utilities commission. And so, I was pretty delighted when I saw this morning that the utilities commission was out. However, I also recognized that when it gets to the Senate during our conference committee, the Senate is likely to want to put it back in, and I don't want to send it over there and have the Senate put in what they had, but on the other hand, I'd really rather not have it in at all, and so, I'm gonna vote my conscience and vote against the amendment, but I'm going to encourage the Senate to recognize that if you're going to put the utilities commission back in, the only halfway reasonable way to put it back in is the way we've got it described here in this amendment. [SPEAKER CHANGES] Representative Earle, you're recognized to debate the amendment. [SPEAKER CHANGES] Oh, thank you, Mr. Chairman. I was wondering if it would be possible for me to introduce an amendment based on the issue that Representative Starnes raised. Could we name a representative from Cherokee County to the coastal resources commission? [SPEAKER CHANGES] Any member is able to introduce any amendment that they wish. Representative Hager. [SPEAKER CHANGES] Thank you, Mr. Chairman. Yeah, and in all due respect to my majority leader, the commission does handle things like the fuel clause, for instance. And I doubt a handful of folks in here could tell me what the fuel clause does, and how it is involved

With online efficiency factors and how much fuel you burn as a coal unit or as a nuclear unit. So if you're making decisions on the fuel clause and you don't understand online efficiency factor or at least have one person that does, then I think you're making the decision on things you don't know, you know nothing about. So I think there are certain technical issues that you have to address. There are some technical expertise we need on that panel to be able to make good decision on rate cases, on fuel costs cases, on these other cases that will come up. So I would ask you to vote for the amendment because I think it puts the right expertise on there and for some of the reasons that Rep. Samuelson said. If you go ahead and get this in our bill, it'll actually probably help the Senate decide where this, where this part needs to be instead of going back to their original version. [SPEAKER CHANGES] Vice Chair Brawley is recognized. [SPEAKER CHANGES] Thank you, Mr. Chairman. Um, you know, an interesting point was made about that there aren't really qualifications to serve in the General Assembly, and I have to admit some days that shows. Um, also, of course, the voters get the opportunity to correct that more easily than we do, members of the Utilities Commission. Having spent some time in the utility industry making rates. One of the point of the Utilities Commission is to allow utilities to operate efficiently and make a profit while still providing service to the people of North Carolina at minimum cost. During the discussion of the merger between Duke Energy and Progress Energy, there was a considerable discussion about the number of jobs that would remain in Raleigh, and with all due respect to the city that hosts this esteemed body, as a rate payer in Mecklenburg, I don't wanna pay higher electric rates because the job's in Raleigh that should have been in Charlotte or eliminated completely. Someone that really understands the theory of rate-making would understand create jobs and higher rates. You allow the utilities, in fact you push the utilities, to eliminate jobs they don't really need and reduce rates and thereby protecting the using and consuming public who is supposed to be the benefit of this commission. So I would say the recent record has shown that there probably is a need for adjustment here, and I'm supporting the amendment. Thank you, Mr. Chairman. [SPEAKER CHANGES] Further discussion on the amendment? Hearing none -- I'm sorry. Rep. Catlin?? -- [SPEAKER CHANGES] Thank you, Mr. Chairman. [SPEAKER CHANGES] You are recognized. I'd like to speak in support of the amendment also. Uh, the one thing I don't support is paying that much money to the Utilities Commission, but if we're going to, we need to have people that have qualifications, that can understand what we're trying to do and can understand the importance of what we're trying to, and so I support the amendment. [SPEAKER CHANGES] Rep. Blackwell, you are recognized for, to debate the amendment. [SPEAKER CHANGES] I, uh, reluctantly oppose the amendment. I just make two observations. The commission has a technical staff for the purpose of advising the commissioners and helping the commissioners, just as we have research and bill drafting and all the other staff that support us, so you're not called upon to come to the Utilities Commission already knowing everything so that you have nothing to learn, but just to go ahead and take advantage of your own knowledge and experience that you bring. The second thing I would like observe is that, uh, these members appointed by the governor have to be confirmed by the General Assembly. Now if we have concern that somebody is not qualified to bring the skills and the judgment to take advantage of the staff and the arguments before the commission and the other resources are available, we ought not to approve them. [SPEAKER CHANGES] Further discussion on the amendment offered by Rep. Hager. Rep. Hager, you're recognized. [SPEAKER CHANGES] Real quick, Mr. Chairman. Uh, no we've looked at that confirmation process in the past, and you look at what we've got on the Utilities Commission, I'm sure they're all good folks, but we've had through the confirmation, through the same confirmation process Rep. Blackwell spoke of, we've got seven, six, uh, seven attorneys that have, all but one, have zero experience in the industry. We're dealing with very complicated issues, and if you are relating, and we have a great staff here, but if you are requiring all your knowledge to come from the staff, then there's some issue there when they're actually making your mind up for you. [SPEAKER CHANGES] Further discussion on the amendment offered by Rep. Hager? Hearing none, all those in favor will say Aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] All those in favor say No. [SPEAKER CHANGES] No. [SPEAKER CHANGES] ??? of the Chair, the ayes have it. The ayes do have it. We have one more amendment offered by Rep. Robert Brawley. [PAUSE] [SPEAKER CHANGES] I'll give Sergeant at Arms time for the amendment to be passed out. [PAUSE]

Is there any members of the committee would like to debate the full text of the bill while the amendment is being passed out? [SPEAKER CHANGES]Mr. Chairman. Mr. Chairman? [SPEAKER CHANGES]Representative Pierce, you're recognized. [SPEAKER CHANGES]I know that we had another meeting at 11, some of us. Is that meeting canceled? Public Utilities, I think. At 12? Okay. [SPEAKER CHANGES]We've got this room for 2 hours. So you've got plenty of time. [SPEAKER CHANGES]Thank you. [SPEAKER CHANGES]Mr. Chairman, if it makes him feel any better, tell him the chairman is in here with him. [SPEAKER CHANGES]The chairman on that committee in on this committee, as well. [SPEAKER CHANGES]Thank you. [SPEAKER CHANGES]Does everybody have a copy of the amendment offered by Representative Robert Brawley? Representative Robert Brawley, you are recognized to explain your amendment. [SPEAKER CHANGES]Thank you, Mr. Chairman. Ladies and gentlemen, all this simple little amendment does is say you don't have to get an attorney to serve on the Industrial Commision. We've heard that the majority of the decisions are administrative, and I don't see any reason why there'll have to be an attorney make that kind of decision. I think it would be better off if they had some practical experience in business. I move the adoption of the amendment and be glad to answer any question. [SPEAKER CHANGES]Further discussion and debate on the amendment of Representative Brawley? Representative Dollar, you are recognized. [SPEAKER CHANGES]Well, I would concede to my friend from Iredell County that you certainly make the case, but one thing I would bring back to the attention on this is that these cases, once they are heard by a deputy commissioner, the deputy commissioner hears the case and then the full commissioners sitting in panels of 3, which is the way they do these cases, they review those appeals. Any appeals coming from the Industrial Commission goes directly to the North Carolina Court of Appeals. In other words, there's no trial de novo in Superior Court for Industrial Commission cases. These cases go directly to the North Carolin Court of Appeals. And so I understand the intent of the legislation, I mean the amendment, and I suppose it doesn't prevent the Governor from recommending attorneys for all of the positions, I would still hope we realize these folks are serving, and do have the powers of basically a Superior Court judge for the purposes of adjudicating these claims. [SPEAKER CHANGES]Further discussion on the amendment? Representative Bumgardner. [SPEAKER CHANGES]Thank you, Mr. Chairman. The commission is the Industrial Commission, it's not the Attorney Commission? I don't why business people should be excluded. They're living with the decisions this commission makes. This commission is one that was named specifically by constituents of mine that they had issues with, and these are people that are business people, that create jobs. [SPEAKER CHANGES]Further discussion on amendment aug'd by Representative Robert Brawley? Hearing none, all those in favor will say aye. [SPEAKER CHANGES]Aye. [SPEAKER CHANGES]All opposed say no. [SPEAKER CHANGES]No. [SPEAKER CHANGES]The opinion of the chair is the ayes have it. The ayes do have it. We are back to the bill, as amended. Further discussion from members of the committee? [SPEAKER CHANGES]Mr. Chair complete ayes and nos on this? [SPEAKER CHANGES]The ayes and nos have been called. I would like to give members of the public an opportunity to speak for

for about 25 minutes total, 3 minutes each, that’s correct. Are there any members that would like to speak before I turn the microphones over to the public? If any member of the public would like to address any portion of the proposed committee substitute to Senate Bill 10, you have the ability to make comments before the full House Commerce Committee. Seeing no interest by members of the public represented to comment on the bill, the clerk will call the roll. [SPEAKER CHANGES] Mr. Chairman. [SPEAKER CHANGES] Representative Dollar. [SPEAKER CHANGES] We need a motion don’t we. [SPEAKER CHANGES] Certainly. Might as well have a motion. Representative Dollar, there is no serial referral to this bill. [SPEAKER CHANGES] Mr. Chairman I would move that the committee give a favorable report to the proposed House Committee Substitute for Senate Bill 10. Unfavorable as to the original. As amended. [SPEAKER CHANGES] Rolled into a new Committee Substitute. Everyone has heard the motion before Representative Dollar. Is there any discussion on the motion. [SPEAKER CHANGES] Representative Brawley. [SPEAKER CHANGES] Do I understand that motion to be that we roll the amendments under the Committee Substitute and the Committee Substitute be given a favorable report? [SPEAKER CHANGES] That’s how I heard Representative Dollar’s motion. That’s correct. Representative Hamilton. [SPEAKER CHANGES] Thank you, that’ nice. I’d like to call for the aye’s and nos. [SPEAKER CHANGES] That’s been noted, we’ve already done that so we’re getting ready to go. Hold on a second. And also, in Representative Dollar’s motion, staff is authorized to make technical changes as needed for the amendments that have been offered to be rolled into the Committee Substitute. Representative Caitlin, you’re recognized. [SPEAKER CHANGES] Thank you, Mr. Chairman. I have one more question of legal staff, I suppose. Is the conflict of interest provisions that we added to this substitute ensure that the EMC will meet the federal conflict of interest standards and allow us, the state authority, to regulate the clean air act and the clean water act? [SPEAKER CHANGES] Staff, can you answer that question? [SPEAKER CHANGES] The current conflict of interest provisions and currently law of EMC have been restored so what they're currently operating under has been restored in the House Proposed Committee Substitute and additional clarifying language has been added to make it abundantly clear that the commission is also under the state ethics act. It is, but we’ve also stated it in the EMC statute so they have both existing law and some extra clarification. [SPEAKER CHANGES] Thank you for the question, Representative Caitlin. Further discussion, further debate on the bill, on the motion. The clerk will call the roll. [SPEAKER CHANGES] Representative William Brawley. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Conrad. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Millis [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Moffitt. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Moore. [SPEAKER CHANGES] Nay. [SPEAKER CHANGES] Representative Saine. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Stone. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Torbett. s\ [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Alexander. [SPEAKER CHANGES] Nay. [SPEAKER CHANGES] Representative Avila. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Bell. [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Blackwell. [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Boles. Representative Robert Brawley. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Brody. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Brown. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Bumgardner. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Carney. [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Caitlin. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Collins. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Cunningham [SPEAKER CHANGES] No [SPEAKER CHANGES] Representative Dockham. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Dollar. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Representative Earle. [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Farmer-Butterfield. [SPEAKER CHANGES] Nay. [SPEAKER CHANGES] Representative Fisher. [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Floyd. [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Fulghum. [SPEAKER CHANGES] aye. [SPEAKER CHANGES] Representative Goodman. [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Charles Graham. [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative George Graham. Representative Hager. [SPEAKER CHANGES] Yes. [SPEAKER CHANGES] Representative Hall. [SPEAKER CHANGES] Yes. [SPEAKER CHANGES] Representative Hamilton. [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Hanes. Representative Holley. [SPEAKER CHANGES] No.

Representative Holloway. Representative Howard. Representative Johnson. Representative Lambeth. Representative Lewis. Representative Lucas. Representative Malone. Representative Martin. Representative Pierce. [SPEAKER CHANGES] No. [SPEAKER CHANGES] Representative Presnell. Representative Richardson. Representative Riddell. Representative Samuelson. Representative Schaffer. Representative Setzer. Representative Shepard. Representative Speciale. Representative Starnes. Representative Steinburg. Representative Szoka. Representative Terry. Representative Tine. Representative Tolson. Representative Waddell. Representative Warren. Representative Wells. Representative West. Representative Whitmire. Representative Wray. [SPEAKER CHANGES] And the Chair votes aye. [SPEAKER CHANGES] Mr. Chair. [SPEAKER CHANGES] Representative Samuelson. [SPEAKER CHANGES] I’m not sure if you’d call this a point of personal privilege or not, but I just wanted people to understand that Representative Speciale is Representative Speciale. He’s nice about it. [SPEAKER CHANGES] We’ll distribute a phonetic spelling of everybody’s name. Miss Avila. The vote’s 34-24, the bill passes. Does anybody have anything else they’d like to talk about today? The meeting’s adjourned.