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House | June 4, 2014 | Chamber | House Finance

Full MP3 Audio File

Good morning. The house committee on finance will come to order. The Chair is pleased to begin by welcoming our sergeantsat arms who will be assisting us today. They are Reggie Seals, Marvin Lee, John Brandon, Mike Clampett. The Chair and the members appreciate your service. Also like to recognize our pages that are here today. We have Imani Burwell from Franklin County, sponsored by Representative Richardson. Madison Ruth from Rutherford, sponsored by Representative Hagar. Rebecca Siden from Idell County, sponsored by Representative Brawley. And Kristin Stukes from New Hanover County, sponsored by Representative Hamilton. The chairs and the members appreciate your service today as well. Members, the first order of business will be the approval of the minutes from the last time the finance committee met. Are there are any corrections or additions to the minutes? If not, Representative Collins moves that the minutes stand approved as written. Any discussion or debate? Seeing none, those that favor the motion will signify by saying aye. Those opposed will signify by saying no. The ayes have it, the minutes stand approved. Ladies and gentlemen from the agenda, the Chair would like to begin by referring two bills to the occupancy tax subcommittee. They are House Bill 1044 ?? Township TDA Changes, and House Bill 1244 Wilson County Occupancy Tax Increase. So those bills are officially referred to the occupancy tax subcommittee. Ladies and gentlemen, we’re going to go slightly out of order on the agenda this morning. We will begin with House Bill 1067 Murphy Deannexation. The Chair welcomes Representative West to explain. Representative West, if you’ll excuse me. Representative Starnes, please state your purpose. [SPEAKER CHANGES] I’d like to move for a favorable report. [SPEAKER CHANGES] Representative Starnes has moved after Representative West ?? debate stating that there is no opposition to this bill, that the bill be given a favorable report. Is there further discussion or debate? If not, those who favor the ?? will signify by saying aye. Those opposed will signify by saying no. In the opinion of the Chair the ayes have it and the motion for favorable report carries. [SPEAKER CHANGES] Thank you Mr. Chairman and thank you members of the committee. [SPEAKER CHANGES] At this time we will also deviate slightly from the agenda and move to House Bill 1080 Watha Deannexation. The Chair is pleased to recognize Representative Millis to explain the bill. [SPEAKER CHANGES] Thank you Mr. Chair and members of the committee. This is a deannexation bill. I had a resolution from the town of Watha’s board to our local delegation. There is no opposition to this bill, and Mr. Chairman I’m offended that Representative Starnes hasn’t already moved for a favorable report. [SPEAKER CHANGES] I believe that it was Representative Starnes’ intent to allow Representative Collins to move so the gentleman is recognized. [SPEAKER CHANGES] I so move for favorable report on House Bill 1080, Mr. Chair. [SPEAKER CHANGES] Representative Collins has moved that House Bill 1080 be given a favorable report. Is there further discussion or debate? Seeing none, those who favor the motion to give House Bill 1080 a favorable report, please signify by saying aye. Those opposed will signify by saying no. In the opinion of the Chair the ayes have it and the motion carries. At this time, we’ll move back to the top of the agenda, to House Bill 1069 Unemployment Insurance Law Changes. Representative Howard is recognized to explain the bill. [SPEAKER CHANGES] Thank you, Mr. Chairman, and I do have one amendment that I would like to have passed out and I move that we accept this amendment as part of the PCS, for the purpose of discussion. [SPEAKER CHANGES] Representative Howard has moved that the proposed committee substitute for House Bill 1069 be before the committee. Is there any objection? Seeing none. [SPEAKER CHANGES] She asked that the amendment be also part of the PCS. Is that part of the motion or not? [SPEAKER CHANGES] It is. The PCS before us for the purpose of discussion and the amendment is coming. [SPEAKER CHANGES] So before we vote on it can we just at least have a chance to see what it says. [SPEAKER CHANGES] Okay. [SPEAKER CHANGES] ?? object. [SPEAKER CHANGES] Representative Leubke. [SPEAKER CHANGES] Mr. Chairman, are we saying that we will not vote on the amendment when you say for discussion?

May be I misstated, I would like to have the PCS before for the purpose of discussion first then there is an amendment that I would like to have incorporated and I will get to the amendment. [SPEAKER CHANGES] Thank you. So the lady from ?? has moved that the PCS before the committee. Chair sees no objection and so ordered and Representative Howard, you are recognized to explain the propose committee substitute to House Bill 1069. [SPEAKER CHANGES] Thank you, Mr. Chairman and you all realize that we have unemployment oversight committee and that committee met during the time that we were out of session and these are changes, corrections and proposed corrections and changes that have come forth during these meetings and Mr. Chairman, if with permission, I will just say the staff to go over the provisions in the PCS and then we will all talk about the amendment. [SPEAKER CHANGES] Yes man, the Chair recognizes [Greg Rony] with research division to discuss the PCS or whichever staff he chooses to refer to. [SPEAKER CHANGES] I’m [Greg Rony] of the Research division. The summary shows you how the PCS change from the underlying House Bill but the provisions that stayed in the PCS were to authorize the DMV to share social security numbers with ?? switches. The department ?? division of employment security. It also increases the number of the work contacts that have to happen each week from 2 per week which is current law to 5 per week. It eliminates this possibility of requesting reconsideration of the DES decision and finally it makes technical changes in modern arts, some languages and cross references. The second big thing that it does is it clarifies the?? authority to garnish and attach credit card receipts and so, the department revenue gave a presentation about its authority to do this. The unemployment oversight committee, but three concept here is the DES has a judgment against the tax prayer for not paying their UR taxes and an effort to collect that judgment, they would collect it from a credit card processing company. The next major area was that it eliminate the variable rate for UR claimants. This is probably one of the most complex areas of it. But under current law there is a range for each unemployment claim and so you can have, depending on your attachment to the work for us, different number of weeks and it turned out that as we this UR system was changed and House Bill four that this system become inoperable. So everybody was effectively at least in the level of unemployment that we have now. Everybody was receiving the maximum number of weeks. So, what the PCS does is it just eliminates the range and gives every UR claimant the maximum number of weeks which is actually what’s mathematically happening currently and this just takes out this inoperable area of the law and then the final thing it does is it statutorily requires photo identification for UR claimant. Currently DES requires photo ID under memorandum of understanding and this makes it a statutory requirement. This piece the bill was US department of labor, did say that the state could, it was good practice to require to validate these claims and require ID. So the ID section of this bill, at least that piece of it USDOL has said that that's okay. And I’m not, I guess will, I will address the PCS the amendment later. [SPEAKER CHANGES] Representative Howard moves to amend the bill, the amendment is before you and Representative Howard do you with to explain or do you wish Mr. ?? to continue. [SPEAKER CHANGES] I think it's relatively simple but if you will see that the PCS made the following changes to the first edition, we removed our provisions addressing the confidentiality of the UR claimant formation that was not our intent to do that in this PCS. So actually this just puts that provision back in place. The issue before us now is there is a ?? County court case that where the judge has chosen department that they have to continue.

…doing something and the US Department of Labor has adamantly said that we cannot. So we’re trying to get that piece moved forward as quickly as we can and get that issue clarified. That just puts that confidentiality piece back into the bill as it was originally. I would ask for your support on that amendment. [SPEAKER CHANGES] The lady from Davie has moved to amend the bill as you’ve just heard described. Members duly have copies of the amendment. Is there further discussion or debate on the amendment set forth by Representative Howard to the proposed committee substitute? Representative Collins? [SPEAKER CHANGES] I’m just trying to fully understand the amendment. Representative Howard, this amendment starts at the fifth line on the first page, is that correct? I’m just trying to figure out where we come back into the bill after where this amendment ends. Do you know what I’m saying? Do we come back in to where line seven is now and then pick up from there? [SPEAKER CHANGES] Yes. [SPEAKER CHANGES] You know what I’m saying, after this amendment ends? [SPEAKER CHANGES] Yes sir. [SPEAKER CHANGES] That’s what I’m having a hard time figuring out. Where do we rejoin the PCS from the amendment? [SPEAKER CHANGES] Representative, if you’d like Ms. Avrette… [SPEAKER CHANGES] Absolutely, please. [SPEAKER CHANGES] …she appears to wish to address that. The Chair recognizes Cindy Avrette from our staff. [SPEAKER CHANGES] Thank you Mr. Chairman. You are right, Representative Collins, it picks back up with the line. In essence what it’s doing is just inserting a new part that’s not in the bill right before it, and then you pick up with the rest of the bill as is. [SPEAKER CHANGES] Representative Stam? [SPEAKER CHANGES] I agree with the amendment. I’m just thinking out loud and maybe your staff could tell me. Since there is a court case is this one case where we should say that this does apply to pending litigation or would that go without saying? I don’t know the status of that litigation. [SPEAKER CHANGES] The Chair believes Representative Stam directs that to Ms. Avrette or Ms. Paul. [SPEAKER CHANGES] Thank you, Mr. Chairman. Representative Stam, at this point in time there still is a preliminary injunction that has been put into place by Judge Ridgeway in Wake County and the US Department of Labor has directed that the agency take every step possible to try to get that preliminary injunction lifted. But with regard to the language in this statute according to the guidance that we have received from the United States Department of Labor, this should take care of the pending litigation. [SPEAKER CHANGES] Ladies and gentlemen is there further discussion, debate or inquiries on the amendment? If not, Representative Howard has moved the amendment and the question before the committee is the adoption of the amendment. Those who favor the motion will signify by saying, “Aye.” [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Those opposing the motion will signify by saying, “No.” In the opinion of the Chair, the ayes have it. The motion carries. At this time we are back on the proposed committee substitute as amended. Representative Stone starts. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] In terms of suggestion before or…? [SPEAKER CHANGES] Before. But you need to jog my memory. There on page three of the bill where we’re talking about the garnishment of the income coming into the employer and you’re intercepting the credit card receipts. Is the employee notified that his credit card receipts will be intercepted or does he get the surprise when the money doesn’t show up in his account? [SPEAKER CHANGES] Representative Stone, the Chair would like to direct your inquiry to Ms. Avrette. [SPEAKER CHANGES] Mr. Roney worked on this part of the bill and he’s prepared to answer that. [SPEAKER CHANGES] Ms. Avrette will pass to Mr. Roney. [SPEAKER CHANGES] I think it is a surprise because when you’re trying to collect there’s an actual judgment that’s been recorded against these people, so they’ve pretty much had the highest level of activity the judicial system can give them where it’s been fully determined that they owe the money. So it is a surprise that they got it from this source, but I think that kind of goes to that cat-and-mouse game of if you tell the people where you’re going to collect the money, then that potential source of the money will disappear. So they know that they owe the money and that they’ve gone all the way to having a full…all the way to a judgment. [SPEAKER CHANGES] Did that address your…Representative Howard…?

Speaker Changes: Representative ?? Speaker Changes: Thank you Mr.Chairman i just want to make a couple statements about the relative unemployment benefits the rates, Speaker Changes: On average as many of you know i come from a rural part of North Carolina ?? rate of 6.2 percent ?? when you look at average rate probably gone hurt this rural areas.I know that the bill has gone last year ?? i appreciate the fact that we worked on unemployment insurance benefits in order to make it sown.But when you look at a county searches of Columbus and ?? i represent and lot of these folks are still haunting for jobs are we restrict them basically to state wide average,i just gotta some sort of problem with and i just want to rely that to the committee, Speaker Changes: Representative ?? Speaker Changes: And we appreciate that Representative ?? but the U.S department of labor will not allow us to break the state county by county,i understand the concern that he have,that's why we are putting the workforce element int play here and try to help these people find jobs and that's an important part of the bill, Speaker Changes: Representative ??,Representative barley of ?? Speaker Changes: Can i ask you a question? Speaker Changes: Yes sir ?? Speaker Changes: Again going to page 3 of garnishment of the ?? can we garnish a bank account? Speaker Changes: we can garnish a bank's saving accounts ?? Speaker Changes: Yes even on state the creditors can do that so if we have a judgment even if it was just ?? then they cold take your bank account, Speaker Changes: Does the gentlemen have a further ?? Speaker Changes: No sir i ll be just more careful, Speaker Changes: Are there further Representative ?? Speaker Changes: I'm confused from question not that last i have heard earlier that we are doing away with the greater scale of maths and benefits not by some ?? now I'm here differently I'm confused by the discussion ?? Speaker Changes: We still have the scale originally from the law of the formula and before we started adjusting your maximum number of weeks for the state wide unemployment that was a new concept by the formula and so the formula gave people different number of weeks when the house for ?? which is the ?? of change count the formula and we added the table and the table is the thing that's gonna describe that how many weeks on the table they still on state wide at unemployment rate is very high in case of many 20 weeks and the state wide unemployment rate is low as 12 when safer hand when it was 12 the thought as the formula would still be working it was 35 even if the maximum possible was 12 and it turns out mathematically that it was operable and it did i=operate for 8 weeks 18,19 and 20 but the week 75 was blown everybody was getting the maximum and so just clean this out the simplest way possible the ?? committee the plan was that we were just take away the minimum so the table is still there and the table still operates the maximum number of weeks is going to be this one number so this so the number of weeks that you receive is basically based on the state wide unemployment rate and it gores down as state ?? rate goes.But there is no other than testing claim it by claim it basis to give them a number of weeks with in and that band so right now it doesn't really important that you qualify for unemployment insurance then you will give this maximum number of weeks and we are just leading the minimum.

Representative Holley. [SPEAKER CHANGES] Thank you, Mr. Chair. I want to go to the section talking about now going to five per week and I kind of want to make a statement, of having to look for five jobs per week. I’ve talked to a number of unemployed professionals who expressed to me how difficult this would be because if you’re in accounting or you’re someone and you’re looking for specific kinds of employment, not just general employment, sometimes five a week is really difficult to find. And it forces them to apply for positions that they clearly are not interested in or may not be qualified for. And that they felt, a friend of mine who is also an HR professor felt this would be a burden. Where as normally they may get 20 or 30 applicants for a position, now they’re going to get 150 applicants for a position and half of those people truly aren’t interested in that job, and that they may make an offer or something to someone who really isn’t interested in trying to get that position. And I was wondering if anybody had looked into the impact on the employers when it comes to an increase in maybe frivolous applications coming in. [SPEAKER CHANGES] Representative Howard, or staff. If anyone can address Representative Holley’s question. [SPEAKER CHANGES] I’ll try to take it on. [SPEAKER CHANGES] The lady is recognized. [SPEAKER CHANGES] I believe that with the new technology through the workforce development arm, all of these applications basically can be completed online. So it’s not, we’re trying to encourage folks to reach out, knowing that after a certain timeframe they may be required to take a job that is lesser than what they were previously employed to do. So we initially had three. And we have moved it to five. Mr. Chairman, Mr. Folwell might want to address that because I believe this was a request of the division. [SPEAKER CHANGES] The Chair is pleased to announce that the Assistant Secretary of Commerce for the division of employment security Dale Folwell is here today. Secretary Folwell, did you wish to speak to Representative Holley’s inquiry? [SPEAKER CHANGES] Thank you, and thank you members of the committee. Initially what was happening, Representative Holley, is that when people come into the local offices which they’re now required to do within the first four weeks, and they were filling out their work search, in many cases the previous requirement was for them to look for two jobs per week. And because they don’t read the statute, nor should they, the statute says they had to do those on different days. So people were being disqualified on this work search that they turned in because they looked for two jobs on the same day. So once we put sunshine on that issue, then people start asking the question why are we only requiring them to look for two jobs a week? So the bill that, the language that’s before you was to give people the opportunity to look for all the jobs on one day if they chose, to access the Internet to look for jobs if they chose. But also to raise the requirement for them to look for more jobs per week. Because their job, and they certify every week that they’re able, available, and seeking employment. So their job is to find a job. So as to remove this little thing that was going on in local offices, and also to expand the responsibility on the unemployed to look for more work. [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] The lady is recognized. [SPEAKER CHANGES] I’m just curious about the employer. Have you spoken to any employers, how that may possibly impact their Human Resources? [SPEAKER CHANGES] Secretary Folwell. [SPEAKER CHANGES] We have heard no push-back from any employer in North Carolina. We have about 200,000 of those that are entered into our system, but don’t have any objection to this. [SPEAKER CHANGES] Representative Leubke, and then Representative Hall. [SPEAKER CHANGES] Thank you, Mr. Chairman. I wanted to ask one small question about the

...the photo I.D., and I guess for Mr. Falwell, where did this list come from, and how does it compare to the requirement when you hold a job, ?? you have to able to show a photo I.D? [SPEAKER CHANGES] Secretary Falwell? [SPEAKER CHANGES] Thank you, Mr. Chairman. Representative Lubke , the question regarding the photo I.D. is an idea that came from people who work in our agency who are constantly seeing cases like the one I'm going to show in front of you, where a roommate is apologizing to another roommate for stealing their social security number and filing for unemployment benefits. That case is actually coming up in Orange County this week as a felony. And my point of telling you that, Representative Lubke, is that we realize that nowhere during the process, through filing your claim, through adjudication, through lower appeals, through higher appeals, "border review," at nowhere in the process were North Carolinians asked to prove that they are who they say they were when they filed this claim on the internet. So, the photo... when I started looking at this, Representative Lubke, on question number twelve on our weekly certification, in order to get this card reloaded every week, question number twelve says "are you able, available and seeking employment?" Any young person in this room knows that the job that they currently have they only received after they were able to show, under federal law and Homeland Security, that they were who they say they were. So, if it's a requirement to be employed in North Carolina, under federal law, to show an I.D., then it should be a requirement to show an I.D. for unemployment benefits. And to directly answer your question, the list that you see in front of you is the I-9 list that's provided to us by Homeland Security. [SPEAKER CHANGES] So ??, what you're telling us is that this is the same list as the I-9 form? And if you just say "yes" or "no," that's fine. [SPEAKER CHANGES] This is the entire list from the federal government, and obviously the list that's in front of you is not the entire list. [SPEAKER CHANGES] Representative Lubke, if the Chair could ask you... [SPEAKER CHANGES] But it covers, Mr. Chairman... number six: any document issued by the United States or any state that the division determines adequately identifies the individual. [SPEAKER CHANGES] Okay. And, Representative Lubke, the Chair may, to your point, Mr. Bizzell on our staff wanted to speak to your inquiry. [SPEAKER CHANGES] And I'd like to continue another point. [SPEAKER CHANGES] Okay. [SPEAKER CHANGES] Thank you, Mr. Chair. Rodney Bizzell, Fiscal Research. And, just to point out that we did run this by USDOL, and they said this was a good practice, and they approved of it as long as the type of I.D. that's required is not really restrictive. [SPEAKER CHANGES] Representative Lubke? [SPEAKER CHANGES] Thank you, Mr. Chairman. I have a problem with this bill, and can't support it because it continues (sic) to the lower amount of eligible weeks to receive unemployment benefits. In February 2013, we dropped — not "we," I didn't vote for it — the body voted to drop the number of weeks that a person could receive unemployment from twenty-six weeks to twenty weeks. And, the other thing that comes up in this situation, is that with only twenty weeks, you really are limited in terms of the jobs that you might have to take. And I would follow up with Jer Howard, who said one of the things we were trying to do was to get people to take jobs, even if they're jobs for which they are overqualified. And, I said then, last year, and others did as well, that this is saying that someone who is an accountant might have to take a job as a cashier at Wendy's because it's kind of in the same general area. And, that seems inappropriate, to me, to have to do that to the unemployed. The unemployed don't want to be unemployed, and they're being hurt by this...

Speaker: Situation and show you how people are having state jobs is not as good is where they were i have to state department of labor that says that weakly benefited North Carolina listen carefully the weakly benefited 2014 was 227$ a week that compare to before the bill took fact when the bill took the fact the average benefit was 301$ the for an unemployed person the average benefit has dropped from 301$ to 227 $ and if you ?? to take on that that about 300$ a month the people a living with less .Now i understand a year ago that was seen as one of the necessary steps to take it from the really unemployed in order to do other things with bill but here we have clear data from the department of labor that shows the impact of this on the average North Carolinian who is unemployed it seems to do simply wrong to do that and i think the idea of whole idea need to take any jobs that out there is wrong i would just say with those points alone,i cant support the bill this time around either, Speaker changes: Representative Luke the chair appreciator marks and did let you complete him.The chair would request that the information that ?? staff or inclusion of the committee record ,Representative Hall, Speaker changes: Thank you Mr.Chairman just said have a question in staff or ?? can answer it regarding the employ,the employee may search for the contacts the job just mesmerized the fact what exactly ?? employee contact to satisfy that requirement of file, Speaker changes: Mr.Chairman i believe ?? probably identify that in to that question better than anyone else they are the groups that implementing that, Speaker changes: Representative hall the chair would like to direct that inquiry to sector ?? with your permission sector?? Speaker changes: Thank you Mr.Chairman Representative Hall the options that North Carolina would have is to obviously go to the internet and ?? is a ?? job is a telephone to ?? job the old fashioned way of ?? to ?? job .The most importantly want we think that ?? system gonna do and it shown what it have done lat six weeks is bringing back people into reemployment offices.Getting people back to work is the most important function that the was carried out and the no one who knows local label market better then the specialist who worked for solutions throughout your communities they know what they conceives are they know that economical activity they know that some work needs to come in so the bottom line is this is it ?? the options that the North Carolinian has order to apply for a job.We think they are gonna evolve themselves as the most important option which is physically ?? reappear in one of our re-employment D W S offices so that we can match workers with the people's who are with workers which is what we hear across the state, Speaker changes: yes, Mr.Chairman again the staff or ?? Speaker changes: Secretary, Speaker changes:secretary ?? the question is if we are now saying this change is gonna increase in number of persons to have in to physical offices therefore the staff and location ?? necessary to do this now we have the corresponding increase in the people ?? to meet this expensive s with this associate with it Speaker changes: Mr.Chairman, Speaker changes: Secretary follow, Speaker changes: we are not necessarily increasing the people coming into the offices were now required to come into the offices for most of the them withing their first four weeks of pay whether they get an employment assessment interview and obviously they are welcome to come into the offices any time beyond that all this provisions.

Is it, it clarifies and removes the confusion of people who are looking for two jobs on the same day and then getting disqualified for benefits. More importantly it asks them to look instead of two jobs a week, five jobs a week either through the internet, the telephone, knocking on a door or coming into our local employment offices. {SPEAKER CHANGES} Representative Jones. {SPEAKER CHANGES} Thank you Mr. Chairman, and I wanted to thank Representative Luebke for his remarks, and, but you know the debate here to me once again is, fascinating and as I was listening it sounds like there is a position there of entitlement, if you will that a person first of all should feel entitled to a job, and not only that, but they should be entitled to the job that they want. In other words the accountant that we just heard about should be entitled to a job as an accountant and I thought that jobs were determined by markets, by supply and demand and I think many of us here believe that you know if there is a greater supply than there is a demand, there may not be a demand for an accountant right now, and that accountant might need to seek another job and I believe that, as many people do that, people do want to work, they want jobs, they want to support their families, they don't want to be on unemployment and if they are in that position that there is not a demand for their particular service at that time that they would probably be willing to do something else, for which they were qualified. So, I did support that original bill and I support this bill, and I hope that you will to. {SPEAKER CHANGE} Representative Brawly of Iredell {SPEAKER CHANGE} To comment on the averages that Representative Lubeke was referring to. {SPEAKER CHANGE} The gentleman may do so briefly the chair would again point out that those figures have not been available or not yet made available to our staff for review, but you may certainly. {SPEAKER CHANGE} Okay, okay when we passed the law, we reduced the benefit, the maximum benefit to $350 dollars, isn't that correct? So. {SPEAKER CHANGE} Yes sir It was the way that we were calculating the benefit, yes sir. {SPEAKER CHANGE}So anyone getting up to $350 dollars has not had a change? {SPEAKER CHANGE} Well that's basically true, yes. {SPEAKER CHANGE} So, the average before the $301 dollar, average came about because there were was a number of people getting well over $350 dollars. Those people had been hurt, they've given up $100 dollars or more a week, that average doesn't mean a whole lot to anyone. In fact it doesn't mean anything to people that were drawing a check for $350 dollars or less. {SPEAKER CHANGE} Representative Collins. [SPEAKER CHANGE} Yeah, just again I supported the original UI bill and I support this one I would just ask that everyone give it a favorable report. Again, I agree with Representative Jones, I think there’s a philosophical difference here, as a person who as an adult, with a college degree has waited tables and worked loading trucks, all while I was teaching high school math, It has always been my opinion that it was my responsibility to provide for my family and to take whatever jobs were available necessary to do that. I certainly do not believe that any reputable job is demeaning, I don’t find it more demeaning to work a job outside of my field then I do to depend on other people’s taxes to pay for my family’s upkeep. So, I think we just have a philosophical difference here and this is a good bill that we need to pass. {SPEAKER CHANGE} Representative Howard is recognized for a motion {SPEAKER CHANGE} Thank you Mr. Chairman, I would move that we give the PCS as amended a favorable report and favorable to the, no let me rephrase that. That we give the PCS for 1069, as amended a favorable report. {SPEAKER CHANGE} Representative Howard, has moved that the proposed, committee substitute as amended for house bill 1069, be given a favorable report that if the members, excuse me. Representative Howard moves that the proposed. Okay, Representative Howard has moved, that the proposed committee substitute as amended for house bill 1069 be rolled into a new proposed committee substitute incorporating the amendment passed by this committee and that, that new committee substitute be given a favorable report.

Is there further discussion or debate on Representative Howard’s motion? Before we vote, just as a courtesy, Secretary Folwell do you wish to add anything to this? If so, you have the floor, sir. [SPEAKER CHANGES] Thank you Mr. Chairman and members of the committee. Some of you in this room know me and some of you don’t. Most of you are used to me showing you and starting a presentation with props. I don’t have any props today. But I would like for you to listen to what I have to say. I appreciate the attention that’s been given to this agency technical corrections bill. But I will add that there is a part of this bill that’s not in the PCS that’s in front of you. And that’s the part dealing with the 26 words that protect our agency from 11/1 of 2011 up until and if and when a border review is appointed. The reason I’m bringing this to your attention is that, just to take you back in time for just a moment, 15 months ago this agency had 2.6 billion dollars in debt. The third highest debt in the United States behind New York and California. And the reason that should matter to you, especially those of you who live in border counties, is that the ?? taxes on every North Carolina employer including non-profits, school districts and local governments, the ?? taxes on all our employers in North Carolina will continue to go up, over and above 37 other states as long as this debt is outstanding. 2.6 billion dollars in debt 15 months ago, and today I’m pleased to report that we are at a billion dollars in debt, 15 months later. 15 months ago, it was taking in our higher appeals unit 280 days for our citizens to get an appeal heard. Today it’s 26 days. In our lower appeals unit, it was taking 18 weeks to get your case scheduled. Today it’s 18 days. In July of last year we had over a quarter of a million phone calls under our agency that were not answered. We answered almost every phone call that came into our building last week. My point of telling you that is, you may think after I get through with my comments, that I’ve had a choice as to what I’m about to say. I don’t think that when I was selected to do this job I had a choice. I didn’t have a choice but to work with the hard-working people of this agency to pay down this debt. To work to get these citizens’ phone calls answered. To work with the good ideas and the good ideas and the hard work of the people of this agency to get these appeals times and the aging of our agency down. We didn’t have a choice. And I think given the fact that not only has all that occurred, but our agency has implemented one of the most largest and sweeping pieces of unemployment legislation in 30 years in North Carolina and put it in a computer system that is older than most of the people in this room, and you have not heard one peep out of any North Carolinian who did not get paid on time. My point of telling you that is that all during that process, we have been bullied over an issue called the border review. And I want to say this because it may be my last opportunity to say it. I have a responsibility when I go back in that building in a few minutes. I have a responsibility to hold my head up high and to tell people of that agency that I represented them. In the PCS that came out just two weeks ago, there was a mention about the border review, the governor being stripped of his power, and that the appointments be made by I suppose Representative Howard to the boarder review. [SPEAKER CHANGES] Secretary Folwell, the Chair is going to ask that you confine your remarks to the bill that’s before the committee. [SPEAKER CHANGES] I’ll be glad to, Mr. Chairman. I will tell you that this is an important issue. We hope that we get the 26 words back in the bill. We hope that we are no longer bullied and that we continue to do our work at division of employment security to implement the law that you folks have written. And to continue to make you proud, because we think we have the opportunity of being one of the best performing agencies in the United States, whereas we have been the lowest performing agency in the United States for the last 15 years. [SPEAKER CHANGES] The Chair thanks the gentleman. The question before the committee [SPEAKER CHANGES] Mr. Chairman, Mr. Chairman. [SPEAKER CHANGES] Representative Leubke, please state your purpose. [SPEAKER CHANGES] Yes sir.

The point that Mr. Folwell raise is in the bill. It's on page three of the bill, and as I see it, the Governor has one appointment to the Board of Review, the House has one, and the Senate has one. [SPEAKER CHANGES] Representative Luebke, the Chair would encourage the gentlemen to refer to the proposed committee substitute that was passed out... [SPEAKER CHANGES] I'm sorry, I thought I had the bill. Can you tell me what the change has been? [SPEAKER CHANGES] Everything we just talked about. [SPEAKER CHANGES] Representative Luebke, the part that you're asking about is not before the committee. I'ts not in the bill. [SPEAKER CHANGES] It's not in the bill. Thank you very much. [SPEAKER CHANGES] No sir. The question before the committee is the motion from Representative Howard to give the proposed committee substitute as amended for House Bill 1069 of favorable report with the amendment rolled into a new proposed committee substitute. All those who favor the motion will signify by saying "aye." Those opposed will signify by saying "no." In the opinion of the chair the "ayes" have it, and the motion carries. [SPEAKER CHANGES] Thank you, Mr. Chair. [SPEAKER CHANGES] Thank you. At this time we'll move into House Bill 1201. I understand we have multiple sponsors of the bill here today: Representative Holloway, Representative Pierce, Representative Dixon, Representative Dobson. Any or all of you gentlemen that would like to present the bill, you have the floor. [SPEAKER CHANGES] Thank you Mr. Chair. Members of the committee, it's good to be before you this morning. I want to also thank my cosponsors here, primary in the bill with me: Representative Dobson, Representative Dixon, and Representative Pierce. If you remember a couple of weeks ago - it may have been a little longer; I don't recall. Things have been moving quickly. [SPEAKER CHANGES] Excuse me, Representative Holloway, the Chair is going to ask if the members and our guests could give the gentlemen a little bit more attention. It's very difficult even for the Chair to hear. Please proceed, Representative. [SPEAKER CHANGES] Thank you, Mr. Chair. We took up the omnibus tax bill, and if you remember, Representative Pierce on the floor stood up and had an issue with the local agricultural fairs being a part of that omnibus tax bill. Representative Dobson, Dixon, and myself also had concern with that, and we have this bill here before you that would simply exempt the ag fairs. Agricultural fairs in most cases are run by non-profits, American Legions, rotary clubs, Lions clubs, etc. They provide family events, family venues for people to go to. Provides opportunities for kids to experience and see a lot of things that they may not get to see on a day-to-day basis, such as farm animals, etc. Again, this bill is very simple. It just simply takes ag fairs out of that omnibus tax bill, and that's all I have unless any of my primary sponsors have any comments or any questions from the committee. [SPEAKER CHANGES] Representative Pierce. [SPEAKER CHANGES] Thank you. Just want to thank you all here to my passionate plead on the House floor. I would thank ?? Howard for allowing us to bring this bill forward. We hope we have everybody's support on this. We already talked about the importance of it, so we just need your support. Thank you. [SPEAKER CHANGES] Are there inquiries for the bill sponsors or for staff Representative Hardister? [SPEAKER CHANGES] Thank you, Mr. Chair. I'd like to be recognized for a motion at the right time. [SPEAKER CHANGES] If the General would hold that only a moment. Representative Starnes. [SPEAKER CHANGES] Thank you, Representative Holloway. I may have signed on to the bill. Certainly I have an agricultural fair in here, but how hard will it be to make up the $400,000 in revenue that we lose from this with the budget going on? [SPEAKER CHANGES] Well, Representative Starnes, the budget impact for this year is zero; the $400,000 would be next year. But I would also say that that number - I'm not sure how accurate that is, because a lot of these fairs - you've got young kids, you've got seniors who are allowed to come in for free. $400,000, let's look at that in the scope of a state budget: our $20,000,000,000 budget. $400,000 doesn't bother it much, and so I think when you look at the benefits of having these fairs, not risking some of them being shut down, I think that it's worth our while and effort to exempt them. Let's keep them going, and again, I remind folks, these are non-profits, folks like

American legion, the rotary club, lions club – these are good folks that help our communities, particularly rural areas, keep them together. [SPEAKER CHANGES] Representative Luebke. [SPEAKER CHANGES] The question for staff, please. [SPEAKER CHANGES] The gentleman may propound his inquiry. [SPEAKER CHANGES] I believe it was House Bill 1050 passed, there was sales tax on these agricultural fares. Is that correct? [SPEAKER CHANGES] Beginning January 1st 2015 there would be sales tax on them. [SPEAKER CHANGES] Right. Follow up. [SPEAKER CHANGES] The gentlemen is recognized. [SPEAKER CHANGES] Is the North Carolina Zoo on the basis of the legislation that we passed, will there be sales tax on admission to the zoo? [SPEAKER CHANGES] Yes Sir. [SPEAKER CHANGES] Representative Holloway, can you just, if I may Mr. Chair? [SPEAKER CHANGES] The gentleman is recognized. [SPEAKER CHANGES] Can you tell me why we would exempt the county fares but not the zoo? [SPEAKER CHANGES] Representative Luebke, I would say the Zoo is something that is there for the most part and it has been a long time since I’ve been to the Zoo but it functions pretty much on a year round basis; I guess we could call the general assembly ?? as what I was thinking too. But it’s something that’s there, it constantly functions more on a year round basis. These local county fares, they come in for a week or two and then they’re gone. Again, these are venues for families to come to and in my county, Stokes County, it’s once in a year. It’s for a week. You've got non-profits who are setting these things up and they’re not making a lot of money and if you want the fares to go away; will I’ll let them go away if we don’t pass this bill? No. But potentially, some of them? Yes. If you wanna do a bill to exempt the zoo, I don’t wanna do it with this one but file a bill and we’ll sign up and try to help you exempt the Zoo. But, that’s not my issue today. My issue is to try to take care of these agricultural fares. [SPEAKER CHANGES] Perhaps it was the reference to the Zoo, but the chair would like to extend a welcome to former Representative, Pryor Gibson who is in the gallery and perhaps only the Zoo in proximity to former Speaker [Brooh Becker] who is in the gallery as well. Are there further inquiries to the bill’s masters or the staff? If not, Representative Hardister, you are recognized for a motion, sir. Thank You, Mr. Chair. I’d like to make a motion for a favorable report on House Bill 1201. [SPEAKER CHANGES] Representative Hardister has moved that House Bill 1201 be given a favorable report. Is there further discussion or debate? Seeing none, those who favor the motion will signify by saying Aye. Those opposing will signify by saying no. In the opinion of the chair, the Ayes have it; the motion carries. Ladies and Gentlemen, there being no further business for the committee on finance, today, this committee does stand adjourned.