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House | June 27, 2013 | Committee Room | Government

Full MP3 Audio File

him on the House committee on the newsletter will start with some simple housecleaning that you want to come at the hospital today. what reduce us on arms young Bay Patrick Mason Babel, Martha Gaddis 's illusion pages William Baggett from Johnston County sponsored by rep. Lynn Daughtry Ariella Flannery from Halifax County sponsored by Representative Ray Michael Robertson from the committee County sponsored by Representatives Sanford Avenue from the losing County sponsored by Representative Bachmann… Sophia did you do that in a station right there is one person today will have house Bill five sixty eight, pass-through of the annexation Change speaker: would have passed out the PCS is no motion because the first was reversed on favorite staff. motion passes. remember that you have for Change speaker:Mister on the bill summary, Ms. 's got it right what this bill is about it. it would jihad. Eric 's five tracts totaling about six hundred and seventy five acres from the corporate limits of the city of Nashville on this. this property is all part of the actual regional Airport on the property in question from is a car– for the most part on doesn't involve the city providing any level of of of our significant services. for example, the city does provide water, but it also provides waterfront to him. the Sabres. the unincorporated portions of Buncombe County and portions of Henderson County. the. so, for example, live the city don't need to provide street maintenance lighting the zoning on solid waste. it provides the wire. I guess in theory through through mutual aid and police protection it could provide. but again the airport itself has its own fire department, and it's got its own police force on what the city does do is collect personal property taxes on the owners of airplanes in the owner 's rental cars and collect sales taxes and so what were trying to do here is our take on this relatively small piece of property outside of the corporate limits and just move it back in there where the taxation will only be by the county itself, and I can go into her reason for this is the the the lady from Buncombe wants me to talk about it, but otherwise I will leave it right there and ask for your favorable recommendation. the bill thank you is presently questions from the committee. the fish. thank you, Change speaker:Mister Chairman laid examined the committee, Change speaker:I am here in opposition to the spill. obviously, and I propose that because there's no reason for him. Change speaker:I love my good, but one of order. this is not a taking that's inappropriate use of the word him him continues to chairman this added to the lady to use of the word. the picture fillets in the Change speaker:Fort Langley on that. the reason that we oppose it is because the airport was established in the late nineteen fifties by the city of Asheville corporate limits since nineteen seventy nine. this was established by nineteen seventy nine session long here in the General assembly, and it has served the region well the city zoning authority with all

[Speaker changes.] [Speaker changes.] [Speaker changes.] [Speaker changes.] [Speaker changes.] [Speaker changes.] [Speaker changes.]...away in last year's law so this is not about overly restrictive zoning regulations. And, if the airport is no longer in the city, city police and fire service will no longer be available on the same basis, which is not a positive step for a regional metropolitan airport serving an urban area and the city would experience a loss of revenue from property taxes collected on the facilities at the airport of about $193,000 annually and in a budget that isn't all that large, this is a chunk out of their budget...but for $193,000 annually, are you going to allow a piece of property and a building that was established in the 1950's by the city of Asheville acting alone to be taken out of its corporate limits. I ask you to really, seriously consider this. After the string of bills that you have seen come before this committee all session long, are you going to allow this "one more thing" to the tune of $193,000 hit to the budget in Asheville to happen. I ask you to oppose this legislation. Thank you very much. [Speaker changes.] Thank you, madam. Next, Representative Moore? [Speaker changes.] Thank you, Mister Chair...question for the bill's sponsor, please. [Speaker changes.] Representative McGrady, the property taxes being collected by the city...what has been the relationship of the city, as far as development in support of the airport over the period of time that they've had? [Speaker changes.] The lady from Buncombe states it properly in terms of the role that the city initially played in the operation and founding of the airport. Subsequently, the airport was operated by a regional authority set up by contract and, more recently, the airport is operated by a regional authority established in law. The airport over years began to provide some of its own sets of services and..including fire and police and, more recently, solid waste and lighting and a whole range of other things...and then, by statute, as the lady stated, we...last year...took away the zoning responsibilities of the city from the airport so, at this point in time...again, sort of in theory...because it, in fact, doesn't have to happen...fire and water services, excuse me...fire and police services are not in any active basis, provided by the city to the airport. And the issue here in part is that the...you know you've got a lot of plane owners and car companies and other things that are paying taxes for basically no services. [Speaker changes.] Thank you, Representative McGrady. Any other questions from the committee. [Speaker changes.] Mister Chairman? I'm over here again. [Speaker changes.] Representative Fisher? [Speaker changes.] Thank you, Mister Chairman. And I will add that one of the sort of byproducts of the passage of this is that in potential disaster situations or emergency situations, throughout the history of the airport, businesses in Asheville, emergency services in Asheville have come to the aid of the airport. I can remember a pretty significant crash at the Asheville airport where the whole city and businesses in the city rallied to come to the aid of the airport. That would no longer exist...and the ability for them to supply emergency or disaster coverage from the city services, Asheville police and fire with this, would be hampered. You know, I really think that we, as a committee have probably been overtired by a lot of the bills that have come through here...that seem to be very pointed in the direction of Asheville. I'm not sure why this is occurring but I really think that, for $193,000, the...

away from the ashville city budget, this bill is just not necessary, and i would ask you to oppose it, thank you [change speaker] representative mcgrady response please [change speaker] what the lady has said, regarding the provision of fire services, or emergency services to the airport, just isn't true. When the plane crash occurred, that the lady referred to, in fact fire and police responded from all areas, including my own county and that will continue to occur no matter what happens. The only thing that I would add in closing here is that when we crafted the original airport authority bill a portion of the (silence) proving this because the city, at least initially has not been at all cooperative in its transfer of the property. I will state for my colleagues and for the ladies purpose, if we pass this bill out and it makes it over to the senate and in fact the city is fully cooperative in moving the airport property appropriately to the authority, this bill will probably never become law, but it appears that the city will not do anything in a cooperative and colleaguel fashion and therefore these types of bills have to move forward, and I apologize for that [change speaker] thank you representative mcgrady, representative wilkins [change speaker] thank you mr chair, representative mcgrady, you just mention cooperative and you mentioned collegual and cooperative fashion, and you said that ashville has failed to be cooperative in all attempts, cooperative with whom? the rest of us don't know [change speaker] respond representative mcgrady [change speaker] when we passed the original airport authority bill, i drafted a large portion of the bill, I went out of my way to make sure that there was no negative financial impact upon the city if ashville, by de-annexing property, but subsequent to the passage of the bill, it became law. The city of ashville had to cooperate with the authority itself to transfer the property because it required FAA approval, and the city, at least initially bocked. I will tell you most recently within the last several months, curiously upon the filing of this bill, we've gotten a new level of cooperation, and today I don't have any complaints with the city of ashvilles cooperation in trying to resolve the issues with the FAA, and that's why i said that my hope is that this bill never becomes law, but if we get back in the situation we were in, where the city isn't cooperating with the FAA, then this law may be necessary. [change speaker] follow up? [change speaker] just one and im going home here in a bit, is this the last actual bill we are going to see this session? [change speaker] mr chair that's the wrong person to ask [change speaker] that's exactly what I was about to say, this is the only ashville related bill that this member will be the lead sponsor on for sure. [change speaker] the chair is going to take a minute to remind the committee we have several bills, and lets keep the questions directed and move forward, any other questions from the committee? we have a motion. [change speaker] I'd like to make a motion [change speaker] representative boxer your recognized for a motion [change speaker] thank you mr chair, i move for a favorable report for proposed committee substitute for house bill 568, unfavorable to the original [change speaker] there we go ladies and gentleman we have a motion before us, all in favor say aye [change speaker] aye [change speaker] all opposed [change speaker] no [change speaker] pleasing the chair the ayes have it, therefore they do, next up senate bill 177 [change speaker] thank you senator [xx]

Thanks Mr. Chair, to committee members. I stand in presenting Senate Bill 177 today. And this is a local bill that impacts the town of Hookerton and Maysville. What it would do is extend or relax the satellite ?? rules. In the case of Hookerton, to allow them to annex a park in a water town area. In the case of Maysville, a economic development park. The bills have unanimous support in the Senate resolutions and support of our municipalities. From Senator Brown, who represents Maysville is in full support of it. And I ask for your support today. [SPEAKER CHANGES] Thank you Senator. Do you know of any opposition to the bill? [SPEAKER CHANGES] No opposition. [SPEAKER CHANGES] Thank you. Representative Ford. Any other questions from the committee? Representative Ford. [SPEAKER CHANGES] Yes, sir. I noticed on this bill you list some of my towns on here. I don't see Sulsberry. I'm a little worried from time to time about satellite annexations. Because then we get back to the donut holes and everything else, and how far is the satellite annexation, and I just don't want it affecting my area anymore. We've had major problems with that. So what's going on here with some cities listed and others not? [SPEAKER CHANGES] Representative what that means is your city has already taken advantage of this. This bill does not add to yours, it was already done in the past. This now allows my city and Senator Brown's city to be added to the list to take advantage just as yours did. [SPEAKER CHANGES] Thank you sir. [SPEAKER CHANGES] Any other questions? From the committee? Representative Floyd, you're recognized for a motion. Ladies and gentleman we have a motion for a favor report. All in favor say aye, any opposition? [SPEAKER CHANGES] Thank you so much committee, Mr. Chair. [SPEAKER CHANGES] Thank you, the ayes have it. Ladies and gentlemen, next we have a House Bill 569, fox fire satellite annexation. Representative Bowles, you have the floor. [SPEAKER CHANGES] Thank you Mr. Chair. This would permit the village of Fox Fire to volunteer annex potion of a subdivision. There's a horse farm and they've already extended the utilities. And asked that their develop they're coming in to the city limits. [SPEAKER CHANGES] Representative Setzer. [SPEAKER CHANGES] At the appropriate time, in spite of that tide, I'd like to make a motion for favor of report. But it's for the children. [SPEAKER CHANGES] Just wanted to make sure the chair says you're not talking about his tie. ?? Questions from the committee? Representative Floyd. Representative, please mash the button so we can all [SPEAKER CHANGES] The location of Fox Fire, is that even favorable? [SPEAKER CHANGES] Ah yes, is ?? between Favol and East Over in Cumberland County. [SPEAKER CHANGES] It's in Moore County [SPEAKER CHANGES] Thank you there again. Now any other questions from the committee? All the motion before Representative... ?? You're recognized for a motion. [SPEAKER CHANGES] I move for a favorable report for House Bill 569. Refer to the committee on finance. [SPEAKER CHANGES] Ladies and gentleman, you heard the motion. All in favor say aye, any opposition. [SPEAKER CHANGES] Thank you Mr. Chair and committee, and I look forward to representing ?? finance. [SPEAKER CHANGES] The eyes did have it. Ladies and gentleman, next we have up will Senate Bill 297. Senator ??, You have the floor maam. [SPEAKER CHANGES] Good morning, ?? Chair. [SPEAKER CHANGES] One second, I'm sorry. We do have a PCS before us to present the motion. So moved. All in favor say aye. The ayes have it PCS is before us. You may resume. [SPEAKER CHANGES] Thank you, Mr. Chair and committee, Senate Bill 297 would allow the city of Wingston Salem to do economic development projects in distressed areas as long as 50% of the funds used are not city funds and they would not. This would exempt them from having to do use the contact requirement and at sunsets in July 2018. This would allow our city to go into areas that's in economic distress and do some economic development activity. It only impacts once

The other senator from Forsythe County supports this bill and there is no opposition. I ask for your support please. [speaker changes] Thank you senator. Representative Adams. [speaker changes] Thank you. Question for the senator. [speaker changes] Yes? [speaker changes] So, you all are not working in distressed areas now, or? [speaker changes] Yes, this would only allow ?? not to have to go through the contracting requirement as long as its under $300,000 [speaker changes] ?? I'd like to make a motion when the time comes. [speaker changes] You'll be recognized at the appropriate time. Any other questions from the committee? ?? forward. McNeill. [speaker changes] How's the house delegation on this? [speaker changes] There's no opposition. This is one bill that the full delegation is in support of. [speaker changes] Any other questions from the committee? Seeing no other questions from the committee, Representative Adams, you're recognized for a motion [speaker changes] Thank you Mr. Chair, I would move for a favorable report for the PCS for Senate Bill 297 unfavorable to the original bill. [speaker changes] Ladies and gentleman, we have a motion for favorable report. All in favor say aye. Any opposed? Thank you, the ayes have it. [speaker changes] Thank you. [speaker changes] Thank you. Ladies and gentleman, next we have up, Senate Bill 547. Senator Hunt. [speaker changes] Thank you Mr. Chair and members. The purpose of this bill 547 is to allow DOT to raise the speed limit to 100 miles per hour. Energy saving contracts is what this is all about. Basically, this allows the state energy office to issue contracts based on RFQ as opposed to an RFP. Energy saving contract, some of y'all may not know what that is, it's just allows governmental agencies to allow energy saving contracts with contractors and the contractors guarantee a certain savings to the governmental agency. They have to back up that guarantee with a letter of credit or some kind of binding capacity. The reason for making this change from an RFP to an RFQ is because it costs these vendors a lot of money to actually go in there and do the estimate and figure out exactly what is needed to do this work on the individual buildings. In one case, I'm aware of the vendor spent $100,000 to go through and evaluate the energy savings measures and design them and it cost them $100,000 and then they did not get the job and that has happened several times throughout the state. The second part of the bill stipulates that it limits the ?? performance of energy conservation measures by the UNC system schools. NCSU has been allowed to do these contracts, and this bill would actually terminate that ability except that they would be able to continue the contracts they already have and to continue the contracts being negotiated as long as they are financed by the end of 2014. This bill has passed unanimously in the senate and I'd appreciate y'alls support. [speaker changes] Thank you there Senator. Questions from the committee? [speaker changes] over here. [speaker changes] Representative Holley. [speaker changes] Thak you Mr. Chairman. A RFQ for the benefit of the committee, is a request for quote. RFP is a request for proposal. [speker chagnes] Qualifications RFQ. Request for qualifications. [speaker changes] Of the one for request for qualifications. The problem - the only problem that I have basically with this is that it is counter to the state's established procurement process and when you start going out and making exceptions to the state's established procurement process, it can cause problems and then it does this domino effect. If you allow it in one area, will you allow it in another area? I got a little bit of reservation here. I understand what you're trying to do. I see that you're trying to limit it to when you have a mandatory site visit or to a ??, but every business person that makes a bid to the state knows, or makes a bid to any entity takes on the financial responsibility of what it takes to make that bid. It is part of their cost of doing business. We can't --

Well, it's going to cost me some money to give you an estimate, so I should automatically get in here without that. I have some reservations. I'd like to see it tightened up a little bit to address that if possible. [SPEAKER CHANGES]. Mr. Chairman. [SPEAKER CHANGES]. You may respond. [SPEAKER CHANGES]. A good example of why I think this is needed is to compare these energy saving contracts to DOT contracts. You know, when DOT lets a contract, they have done the design work. So the vendor of the contractor knows exactly what he's bidding on, he doesn't have to design it. So he can just, you know, what's the cost of concrete, what's the cost of labor. In this case, the vendor has to actually go design the project, and that's what is very time consuming and very costly. And that's the reason for this bill. [SPEAKER CHANGES]. Follow up? [SPEAKER CHANGES]. Follow up. Yes. I understand that, but DOT has engineers and DOT has engineers exclusively do these things for transportation issues. But in different areas, a vendor who does something knows that he has a cost, that if he's going to submit a bid that there's going to be some cost incurred in going out and measuring and doing whatever he needs designing whatever he needs to put in his proposal. I really have a problem when we start saying that he does not have to do that. That we will accept his, I really have a issue with this part of it, because every area does not have a DOT staff person with engineers and architects who can do this, and once we start this train, it continues to go. I can't support this bill. [SPEAKER CHANGES]. Representative Luebke. [SPEAKER CHANGES]. I have my question answered. Thank you. [SPEAKER CHANGES]. Well, thank you. Representative Faircloth. [SPEAKER CHANGES]. Thank you, Mr. Chairman. Senator Hunt, I understand, you mentioned NCSU, and I understand, perhaps some of the other Universities have a problem with this bill. Can you tell me what their concerns would be for that? [SPEAKER CHANGES]. I think NCSU has some projects that are underway and this bill does allow them to continue those that are underway. The idea, of course from my perspective and our perspective in the Senate, is to provide individual contractors with employment to help our employment picture. I think that with this provision, the first provision would allow more contractors to bid if they don’t have to incur those upfront costs. And I think that bid procedure would allow construction costs to actually be reduced substantially because you have more bidders. [SPEAKER CHANGES]. Follow up. [SPEAKER CHANGES]. Follow up. [SPEAKER CHANGES]. Thank you, Mr. Chairman. Mr. Chairman, is there's anyone here from the UNC system that can speak to that? [SPEAKER CHANGES]. The Chair is asking anyone from the UNC system here that would like to engage us on... Please present yourself to the mic. [SPEAKER CHANGES]. Yeah, this is Drew Moratz with the University of North Carolina, Journal Administration. We do have some concerns with the bill. N.C. State University did get this authorization 2 years ago to go forward with the self-performance of the contracts, and currently the private sector is engaged. We've got 7 of the 8 contracts that have been lettered to North Carolina companies, so we still are using North Carolina based companies and the private sector specifically on the contracts that we have led at this point. Our concern is that in the time that we're asked to make cuts and become more efficient, this is one of those areas that we could expand and our hope coming to this session was to allow additional campuses that authority as we go forward, as envisioned by House Bill 818. So, we do have some concerns with the bill because it limits our ability to become more efficient. [SPEAKER CHANGES]. Thank you. Representative Cleveland. [SPEAKER CHANGES]. Thank you, Mr. Chairman. As I listen to the discussion here, I'm really having some doubts. I don't quite understand a request for qualifications. If I'm a business person and I'm bidding on a job, I have to know what that job is going to cost me before I can put a bid in. And does this request for qualifications entail that? I just, I don't quite understand it. [SPEAKER CHANGES]. Senator Hunt. [SPEAKER CHANGES]. Basically, you have to have, the vendors that are asking to do this job, their qualifications are evaluated by the State Energy Office to find if they in fact have the skills and the financial wherewithal to get it done. So, and then, the contract is actually negotiated with that agency and the State Energy Office.

so this is a negotiated contract as opposed to the Olympia contract follow-up on Change Speaker: the negotiated contract based on why the individual company are we selecting a company in sin, you got good qualifications, so you can do the job. how much you want your first date. you know, Change Speaker: I concept eludes me as well. Change Speaker: the request for qualifications of the names used in a request for any particular contractor that was a bit on the job to present their qualifications. the State energy office, so maybe five different contractors that will do this work. the state energy office will evaluate them, and then negotiate with the one they think is the best nothingness of people from the industry. speak so much earlier phone, Change Speaker: so if you tell me is that we are giving the state energy office, the ability to decide who does the work for the state without competitive bidding Change Speaker: of the power. Change Speaker: the big. the bid is is on the front end for the request for qualifications. there may be found in maybe ten corporations, businesses that want to build on the work, but then the person that is best qualified according opinion, the State energy office that will be the one they would negotiate with the job if negotiations don't work and got down to the next. the next person they think is most qualified Change Speaker: for a comment, Mister Chairman, you look nice for comment. Change Speaker:I have a bit of a problem getting a state agency, the ability to decide who is that I do work for the state content this work and continues to work for the state. I cannot. I can understand her concern of industry having to put money up front to discover what they have to do to do the work and put a bid in on based on that, but I just I have a large problem with having a state agency do the selection of the contractors, Change Speaker:the Rosenblum, you do understand the difference between a competitive bid contract versus a evaluation of qualifications. when you meant, because that center is funded with me Change Speaker:good morning countries. unlike lionesses Maresca Resto is one of the companies in the state. the dust performance contracting their others represented here as well. let me try to explain how this works. what happens is we have lots and lots of old buildings in North Carolina that are owned by the state to very inefficient, so electricity cause. for example, to run a prison might be ten million dollars per year, and they decide we want to be more efficient so the proposal, representative Cleveland is about is tied to the savings and those savings are guaranteed, so it's not like when, after the RFQ Department of corrections chooses one of us. we then get to bed twenty five million dollars. the project is always been across the state less than their current utility costs. that's better performance contracting is all it is all about. it would be the same to replace the toilet in a prison or all of the white why are you guys in control of yellow. the same cost at a time when we don't have the capital to go out and redo all these things, so the private sector takes the risk spend the upfront money. it is only pay out of savings. it's it's really a brilliant concept. I wish we could get a lot of other area that answer your question in Cleveland. no high Change Speaker: real quickly, he will move Florida have led down the new speaker Change Speaker:urges him on Phil Kirk Doctor of a legislative committee letter all energy services companies and also work for a variety of trying, and a representative polish what is actually worse than• sled is not the business lost a hundred thousand dollars amended the contract is that the owner didn't even award a contract when I was also doing business that we have that we have to do a nutshell, we can recover. when we don't expect when everyone

Representative Cleveland, unless I misunderstand, State energy office won't choose the vendor, the owner chooses the vendor. The state energy office qualifies as they do now. The 14 companies in North Carolina are eligible to do the work but state energy office won't choose which one gets the business. The owner will indicate the DOT or whatever. [SPEAKER CHANGES] Thank you, coming back to the committee. Any other questions from the committee? Representative Holley. [SPEAKER CHANGES] Thank you Mr. Chair. I understand what he is saying but he is still circumventing the ?? process. We'll be having a quick pre-qualified vendors list is what you are actually doing. And then they get to choose, which vendor would they use of the pre qualified vendors list. I have no problems with that except there is still no bidding process where someone can actually qua and wait. It's competitive other than somebody arbitrarily saying "We like your business and we appeal qualifying you.". It eliminates small vendors, it hurts the vendors who came in the last moment who may want to bid only for a specific job. I have problems with it. [SPEAKER CHANGES] Thank you. The chair there are two more people that want to speak and I'd ask you to keep your comments as brief as possible because we do need to move forward. Introduce yourself. [SPEAKER CHANGES] Hi, My name is Tim Gasper and I'm with trained U.S incorporated pre qualified ?? in North Carolina. I have been performing these contracts in North Carolina for the past 10 years. I can tell you, first thing that the expense to develop and deliver a promised contract is far beyond to what it needs to do a fair, efficient and competent delivery of a performance contract. For example, it really does follow very closely ?? at risk technique negotiation which is allowed by North Carolina Statue and it does provide for competition however below or underneath the energy service company as acting as a general contractor more or less. So it's not a risky venture for an agency or local development unit. There are jump off points along the process. We are in fact lengthening the process for the performance contract negotiation. By adding this first step, all we are trying to do is reduce the amount of cost that the bidders who are not successful do not have to ?? and carry on to the next project and the next project and the next project. There is one winner and 4-5 losers so there is up to $400,00 of wasted money in development and so I believe there is plenty of protection and plenty of north Carolina statues for procurement to support what we are asking for. Thank you. [SPEAKER CHANGES] Thank you. We were also speaking in favor or gonna indulge this committee with some information. And I also ask you to ?? in the committee we had 3-4 for speaks who would obviously favor this. Anyone who would speak against it in the committee since we would open it up for people against the committee. Alright, please present yourself and keep your march to a minute. [SPEAKER CHANGES] Yes sir Mr. Chairman. My name is Will Heath and I am with ?? Woods, the company that does these contracts. Representative Hall and representative Cleveland saying that it's a competitive bill is slightly confusing. if Honeywell bids on it you come in and you design the project. We may have different design than the resco or trans and the state is actually not putting up that money so if I say Honeywell is going to propose a 10 million dollar bid, the Resco may come in with 12 million dollar bid and Trans will come in with 14 million dollar bid. Those are state savings, that's not the money state is paying out and we come to those numbers differently because we have different engineers that look at different efficiencies. Something of confusion is, a competitive low bid process would be if the state was actually purchasing it. These are savings that are being provided to the state. So it's slightly different from other ?? process and that's why we are looking at qualifications before you go into the investment grade or a process where we bring in our engineers to ?? through buildings, to take energy readings, heat sensor readings, we need to cut that cost down so we can expand to more vendors and smaller vendors. They don't have that upfront cost so they can put up. This will actually open it up to more people bringing bids. [SPEAKER CHANGES] Thank you. Coming back to the committee. Any questions from the committee? Representative Holley. [SPEAKER CHANGES] I'd like to make a motion at an appropriate time. [SPEAKER CHANGES] Any other questions from the committee? Representative Holley you are recognized for a motion. [SPEAKER CHANGES] I know I am doing this right but I'd like to make a most important unfavorable report for 547

We have a motion for an unfavorable report. ?? PCS and unfavorable as to the original. We here the motion before us. All in favor say aye. Any opposed. The No’s have it. The bill will be brought back before us. [SPEAKER CHANGES] I would like to make a motion for a favorable report as to the PCS unfavorable as to the original. [SPEAKER CHANGES] There is a PCS motion. We have a motion before us. Representative McGrady. All in favor say aye. All opposed. In the opinion of the chair the ayes have it. [SPEAKER CHANGES] Thank you Mister Chair and most of you members. [SPEAKER CHANGES] Next before us is Senate bill 659. Senator Harrington. [SPEAKER CHANGES] Thank you Mister Chair, members. This is Senate bill 659 as map 21 also known Moving ahead for progress 21st century. It is an agency bill it's been very narrowly tailored and does not do more than required by the Federal Highway administration DOT is seeking to make changes to state law so that North Carolina will be in compliance with the federal Highway Code. Section one addresses open container requirements. Section two addresses penalties for repeat offenders of DUI and DWI. Current North Carolina laws not in compliance with federal law and because of the federal highway system has redirected five percent of fiscal year funds into alcohol impaired driving programs. The redirected money totals about eight million dollars currently and woke up to ten million in fiscal year twenty fourteen. This money is needed for roads so this bill must be passed in long session. To comply, North Carolina must prohibit the possession of any open alcoholic container in the passenger area of any motor vehicle located on a public highway or the right-of-way of a public highway in the state. Under current North Carolina law the open container requirement supply only to those types of vehicles required to be registered this means that mopeds are exempted and thus North Carolina is not in compliance and this bill correct that. Federal agencies have determined North Carolina’s repeat intoxicated driver law does not comply with the impoundment immobilization or interlock installation and mandatory minimum sentence requirement to comply state law must require the impoundment, immobilization or interlocking of each vehicle owned, operated or owned and operated by repeat intoxicated offender to comply with mandatory minimums repeat offenders state law must provide for a mandatory minimum sentence of not less than five days imprisonment or thirty days of community service for second offenders and not less than ten days of imprisonment or sixty days of community service for third or subsequent offenders. This bill will eliminate these exceptions to North Carolina law that cause us not to be in compliance with federal law and allow us to continue receiving these funds. [SPEAKER CHANGES] Thank you Senator Harrington. Questions from the committee? Representative Bell. [SPEAKER CHANGES] I’ll motion at the appropriate time. [SPEAKER CHANGES] Representative Brody [SPEAKER CHANGES] If I may Mister Chair. [SPEAKER CHANGES] Thank you. We have someone from DOT to comment. [SPEAKER CHANGES] Good question. That’s a good question. [SPEAKER CHANGES] ?? For the Attorney General’s office representing the division of motor vehicles. I’ve been informed by at least one vendor that on an ignition lock device can be put on a motorcycle, so how that person testing uses ignition lock device while operating a motorcycle is another question. [SPEAKER CHANGES] Thank you sir any other questions for the committee? Seeing none, Representative Bell time for a motion. I'll have move for favorable report to Senate Bill 659 and is a referral to transportation with referral to appropriations. [SPEAKER CHANGES] We have the motion before us. All in favor say aye. Any opposed. The bill passes. [SPEAKER CHANGES] Thank you, Mister Chair, committee. [SPEAKER CHANGES] Okay Ladies and gentlemen it brings us up to the last bill today, which is for discussion only. House Bill 227

Woudl you have a pcs before us? Motion made all in favor say I YOu are recognized to esxpalin the bill Thank you mr chair. This is a bill that started as a local bill but we had to do it as a statewide bill its very simple that deals with housing structures and structures that are vacant and abandoned. A lot of you see these structures in your neighborhoods and this is why we deal with it in this bill or the city has to take over in an arbitrary way. This gives the homeowners and the city a more cooperative way to deal with these buildings that I call eysores. What I learned was that I had a ton of boarded up houses and buildingin these neighborhoods and if we were willing to reinvest in these neighborhoods and revitalize them. There were ceratin homeowners that had no intention of fixing up their houses and I know some people think this a property rights issue but my goal for the committee to look at the rights of the owner. Mr Jones has been in her house for 30 years with two people in the community who abdicated their responsibilities as a homeowners. I want people to see her property rights and her property value goes down. I want to look at the rights of everyone and not just one personl. Thats why I have this bill. Civitas is okay with this bill and the lEague of Municipalities. THis same program has been done in cleveland and detroit who have depressed areas. Most of the time you see the homeowner loves this bill because this is their property and they dont want to deal with it and gives them an out. I think its a good bill, rep ??? has signed onto it and at this point I will take questions and comments Ill just make a brief comment. This is a difficult issue becuase we want to move forward but still respect property rights. It is a serious problem and I would say the district of each person in the body has blighted property. WE want to respect property rights of individuals. Those who own the bligthted property and those of the surrounding community. Imagine a shopping center that has been abandoned for years its dilapidated and its an eyesore that bringing down the other property valeus. I am a property rights advocate, against eminent domain for economic development uh forced annexation but we have worked on this bill and worked with Civitas and we wanted to bring it by the committee to seek your input and see if you have ideas. REp adams THank you mr chair I konw there are problems with boarded up properties. I would like to know what the bill does that the current law is not doing. I would like someone to explain that portion too beacuse there are two parts. IF a homeowner has not complied

Building inspection statutes of the minimum housing standards and the city or county has issued an order for the person to rehabilitate the property or demolish the property. And if the owner has failed to do so, then the County could seek to appoint we’ll call a receiver to either go in and rehabilitate, demolish or sell the property. This can be a voluntary process or the homeowner agrees to it. Or if the homeowner or the property owner does not agree then the county or city may seek a court order to appoint the receiver. The receiver would have to show you [pause] ensured it’s appointing a third party to either rehabilitate, demolish or sell the property. [SPEAKER CHANGES] Follow-up ?? [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] If the property is not sold but it’s rehabilitated, who actually owns it then? [SPEAKER CHANGES] The property owner would maintain ownership interest in the property if it is rehabilitated but there would be a lean on the property for the cost of the rehabilitation. [SPEAKER CHANGES] Thank you. Representative Wilkins. [SPEAKER CHANGES] Thank you, Mr. Chairman. I think we’re here for the purpose of trying to identify questions. And I had one at the bottom of page two and that’s in the event of a sale. What makes action incumbent upon the purchaser? I mean, I don’t see anything that says this purchaser has got to do something to improve the property. [SPEAKER CHANGES] Representative Brandon. [SPEAKER CHANGES] I’m not sure if understand the question. But the action I think, I think I understand your question. It’s because the purchaser would take the responsibility of taking that property. And then they would actually, after the liens and all of that stuff is paid for, then they would actually become the owner and start the revitalization process. Like take for example, like I have a big hotel in High Point right in the middle of a really big revitalization project that we've got. These folks have no intentions of fixing this hotel. The roof has actually collapsed and went through the building. It is now a health hazard and we still cannot get the owners to do anything. So it would be very beneficial for us to be able to take a receiver. And we have one, people who want to revitalize that area. It’s actually the Boston street area that we've been trying to revitalize. And we can actually take that property and we can revitalize it. And the property owner will get any of the profits that’s left over after liens and those things. But we now have a property that’s not, you know, I can’t get investors to come in there and invest in that area as long as I have a big humongous hotel that is literally falling in the street. [SPEAKER CHANGES] Follow up. May I try again. [SPEAKER CHANGES] Sure. [SPEAKER CHANGES] If that current owner can sit there and do nothing, what prevents the purchaser, the new purchaser from sitting there and doing nothing? [SPEAKER CHANGES] ?? We’ll send that to staff. [SPEAKER CHANGES] The bill does require a purchaser to demonstrate that they will be able to rehabilitate a property within a reasonable time. [SPEAKER CHANGES] The Chair has questions for Government staff as well. I guess my question there, what is different with this bill that we currently can’t do in government now? What cities and municipalities and counties? [SPEAKER CHANGES] The county or the city is permitted to rehabilitate or demolish a property if the codes have not been complied with and the order to rehabilitate has not been complied with. The difference is the appointment of a third party to do these things. Also currently our statutes do not provide for a method for the city or county to sell the property, nor to take it and rent it out. So, those two things are different than what is currently in Chapter 160 and Chapter 153. [SPEAKER CHANGES] So the third, just to follow-up for myself, the party the ability

...sell the property and what was the... [SPEAKER CHANGES] The ability to rehabilitate the property and then rent it out for a period of two years. Those two things are in addition to what the city and county already has the authority to do, which is to demolish or rehabilitate the property and then place a lien on the property for the cost of those two things. [SPEAKER CHANGES] Thank you. Representative Floyd. [SPEAKER CHANGES] Just three points and that's in reference to the one thing that every city charter has in it. Safety of this community. All of them had that. So I think that that would in the parameter if that building is falling down within the inner city. The city has a statutory authority to take whatever action that is necessary. Two, I see there was a bill, I think it was 743 and the staff can help me, wherein that some cities tried to address this through their house and like the City of Fayetteville has a RAMP program and the City of Fayetteville has a court that hear these kinds of complaints. And I see that that may have an adverse effect as House Bill, I think it's 743, would have on this RAMP program to remove these kinds of areas and provide as to Representative Whitmire meant. It's what the property owner must do in order to bring the property up to what we refer to as the minimum standard. And then if not, the city can carry that particularly organization or individual to court to take whatever action is appropriate. But I do think that the city already has that statutory authority to or some kind of way for citizens to pass by and the building collapse and one of the bricks fall on that particular person. The city may be sued because it knew or had knowledge that the building by virtue of its own inspector that it was not fit for human habitation. [SPEAKER CHANGES] Mr. Chairman, I would like to say that this does, this my point to people who are in opposition. What you fear the city's already have the statute to do. And so this gives us an opportunity to not just actually just only have to tear down the building and only like destroy property that we already have. That's really our only recourse at that time. Now you can actually have another option to bring in a receiver and to try to save that property and be able to use it for revitalization processes. Right now, that hotel that we have, we certainly could. The city can go in and just tear it down. And they have every right to do that. But it is an historical structure that we would like to preserve. It was the only black hotel that people could go to way back in the 50's and the 60's, and we would like to preserve that. And getting a receiver to be able to do that is a better option than just tearing it down, which everybody agrees we can just do that, but we would like to have another option. [SPEAKER CHANGES] Representative Floyd? Follow up? [SPEAKER CHANGES] What hear are third party. I don't think it should be our responsibility to provide a third party the opportunity to become an investor. If that third party want to invest, then that third party should go through whatever legal challenge or legal responsibility to acquire that particular property. So why should we condemn that piece of property as per se, tear it down and allow the third party to come in. Now, having said that, the building with in itself that the person, the reason why that person don't want to do the repair, as long as there's a building there, the land is valuable. But once the building is torn down, a third party comes in, he or she simply buys the land. [SPEAKER CHANGES] That's what we're trying ?? is that we don't want the land, we want the building and so the third party is actually needed. You cannot, the third party, the receiver, which you have to get that, you have to get the receiver to be able to do that. But in order, to your point, is that we still have a property owner, so there is no legal ramification for another investor without this, to be able to go in there as long as I have a property owner that is abdicating their responsibility to be a property owner and take care of their ?? [SPEAKER CHANGES] Last follow up, Mr. Chair. Follow up. I don't think that it should be the responsibility here for us to provide a third party the opportunity to invest. [SPEAKER CHANGES] We do it all the time. [SPEAKER CHANGES] The Chair's going to move on because there's a lot of questions. I've got about six here wanting to speak and we also hope that this would help guide the bill sponsor...

…and some ideas may be possibly. So we’ll start off with Representative McNeill. [SPEAKER CHANGES] Yes, I think you’ve got a good concept here. I think the bill needs some work on it. On page 5, I’ve kind of got a problem with section E right at the top, where the receiver has exclusive authority. It basically says that once they’re appointed, everybody else is divested on any authority. They don’t… Apparently the way I read it, and staff can correct me if I’m wrong, but once they’re appointed, they’re pretty much it. And that person then could really put enough cost into that project, and they would then own the property. Basically. To me that seems to be quite a problem. And there’s one other area, and may be in the bill, that I’m not sure that if the bill passes and goes through, we might need to put in here something. What is the owner of the property going to do about taxes? Is he still going to have to pay the property taxes on it? Or is there something in the bill that excludes that? [SPEAKER CHANGES] Right. I think what you’re talking about is in both ?? the E kind of combines… We were talking with staff about this, and they can correct me if I’m wrong. We really wanted the whole entire responsibility to be on the receiver. The taxes, the insurance, all of the liability, and the court fees. All of that is going to be on the responsibility of the receiver. So let’s say you’re fixing up a house and you still have the property owner and something falls down and hits somebody in the head. That is the responsibility of the receiver, not necessarily the property owner who’s not actually dealing with the renovations. [SPEAKER CHANGES] Follow up Representative McNeill. [SPEAKER CHANGES] OK, maybe I’m reading it wrong. On that last sentence it says, except taxes or other governmental assessments. [SPEAKER CHANGES] Where do you see that? [SPEAKER CHANGES] That would be page 5, line 8. [SPEAKER CHANGES] Staff. [SPEAKER CHANGES] I believe you’re looking at the section pertaining to liens, but to speak to what Representative Brandon was just discussing. Currently there would be no civil liability for the property owner if anything occurred on the property during the demolition or renovation. Currently the bill does not speak to court costs or taxes. That’s something that we can work on. [SPEAKER CHANGES] Thank you. Representative Pittman. [SPEAKER CHANGES] Thanks Mr. Chairman. Being up here I’ve had to go a month without cutting the grass at the old house I’m trying to sell that nobody’s living in. I don’t want to start this on me before we get out of here. Just wondering what the standards are on that? [SPEAKER CHANGES] We’ll give that question to the bill’s sponsor. [SPEAKER CHANGES] Staff can clarify, but I can tell you that this is not something that this is a worry about. We’re talking about years and years and years of trying to get people to do what they need to be doing. It’s not something that somebody could do one month. I mean I had a person across the street from me that didn’t mow the grass for two years. And we still can’t get him to mow the grass. [SPEAKER CHANGES] Staff? [SPEAKER CHANGES] With regard to the building inspection statutes, if it’s a residential building, in order to be in violation, the property would need to be especially dangerous to life if it’s a residential property. If it’s a nonresidential property, the building must be vacant or abandoned, and appears to be so dilapidated as to contribute to blight, disease, vagrancy, or fire hazard. With regards to the minimum housing standards, It would need to be, let’s see… I apologize. I’m trying to find the exact wording. It would need to be in significant disrepair. But I’m trying to find the exact wording. I’ll get back to you on that. [SPEAKER CHANGES] The Chair would note that the questions we’re hearing one of the concerns is to make sure at some point we could ensure that it’s went through all the processes to protect the homeowner before it gets to this. So as you’re looking for ideas for your bill just make sure we have all the precautions to protect the homeowners, and property owners, period. Next, we’ll have Representative Ford. [SPEAKER CHANGES] Thank you. Mr. Chairman. Is there anything, to the bill sponsors, in this that addresses the other side of the equation? And I’m…

Because at home we had a home that was burned at the historical section, and it was more than fifty percent destroyed, and the homeowner wanted to tear it down immediately and rebuild. And the city stopped him from doing that for a year, because they thought it should have been rebuilt as is and using what he had, and he didn't see the profit or the need in that so I'm just looking at the other side of the equation on this. [Speaker Changes] ?? That's a good question, and I don't know. I know that there is a lot of historical credits, and historical laws but when you're dealing with historical areas and I don't know that bill addresses this or that we even need to but we'll definitely bring that up. That's a good question. [Speaker Changes] A great question. Representative Adams [Speaker Changes] Thank you Mr. Chair. I just wanted to comment. I think that this bill is not here today to be voted on, but to get input so while people are making comments I don't think people are necessarily in our position, Representative Brandon, but trying to help you get the bill out. One the - you talk about property and peoples rights and it used to be, and I remember when I came here we had so much boarded up housing in Guilford county, and district two that our representing council, we checked the law, the city couldn't do anything because the law said that if you were a property owner, and you couldn't fix up your property you could board it up. What the law didn't say in that was the loophole is how long you could board it up. So we found that the properties were boarded up for 10, 20, 30 years. We've taken that loophole out, but it takes time to get through this process, so I think you're getting some good input today, and you need to take it that way, and use it to try to help and get this bill out, because we have a lot of lawyers in this place, and they're going to be challenging you on some of those things because they represent - many of us are property owners and that kind of thing, so I think you should take it for what it's worth, and I've heard some good comments today. [Speaker Changes] Chair would like to thank Representative Adams for comments. I think they're really at heart so hopefully those responses will take a lot of these questions and work and make the bill even better than you may currently think it is. Representative Faircloth [Speaker Changes] Thank you Mr. Chairman, I am one of the primaries on this bill, and basically what we're talking about here is a way for a owner of a piece of property who does not have the means to bring it up to the condition it ought to be in in order to be safe and all that. He can voluntarily participate with the city in having a receivership appointed and have this property brought up to the condition the city is happy with, make it safe for everybody, and if there is some realized profit over and above cost and so forth, the owner and receive some of that. He may or may not. But what the two sponsors are talking about are situations where we have for instance a large apartment house, and the owner is saying Yes I would love to fix it up, because then I could sell it and make money on it, but I don't have the money to fix it up, and I cant borrow the money to do it. So this is a petition by the owner, voluntarily, or if the owner says to the heck with it I don't care what the decision is, he gives the city a way to make the city better. [Speaker Changes] Thank you for the comments. Representative Hall [Speaker Changes] A couple questions for the bill sponsors. Representative Faircloth said voluntarily, but as I understood it it also applies to people that don't agree. Is that correct? ?? Alright. An option to be voluntary if you don't agree. There are two options. ?? I did have a few questions, but I guess the main one was the one that Representative McNeill asked first which I didn't really understand the answer to. Are there any limits in the deal on how great a receiver can come for a property when he goes into the change and renovate like a percentage of the value or the dollar amount. Any type of limit at all? [Speaker Changes] ?? The bill does not contain a limitation on the expenses a receiver can occur. [Speaker Changes] Followup. [Speaker Changes] So this would mean that they could go in, tear down the place, and build a Trump tower, which essentially does take property from them. [Speaker Changes] In theory, that is correct. Yeah. [Speaker Changes] Well try and fix that. [Speaker Changes] Any other questions? Any other questions from the committee? I move that we've learned quite a bit about this bill, and the positives and the work we have cut out for us.

any other questions this committee is now adjourned