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House | April 22, 2015 | Committee Room | House: Commerce and Job Development

Full MP3 Audio File

Thank you Mr Chairman is the bill before us? Yes. Okay Sorry, trying to get everything put together as you all might imagine. I'll try to be brief. This is House Bill 567 North Carolina Aircraft Repair Act. The mains aircraft labor and storage LEAN's laws to create regulations regarding written estimates and disclosures of other charges for the repair of aircrafts. The bill also will prevent an aircraft repair shop that violates any other regulations from perfecting a LEAN on the repaired aircraft. Basically as you see, current law, personal expense, labor skills and materials on an aircraft that has furnished storage for an aircraft has a perfected LEAN on the aircraft the amount of lean is to contract price for the workers' storage, and in the absence of a contract, the LEAN is wholly responsible worth of the service, a reasonable worth of the service. The law establishes the process for filing an [xx] and gives the LEAN priority over other perfected and unperfected security interests in the aircraft. Upon payment, the LEAN owner must release the possession of the aircraft and file an notice of satisfaction of LEAN with the corporate court. The law also provides a process for the enforcement of LEAN by the the aircraft why are we talking about this bill, it's the question I'm sure and a number of instances with some folks, just might have to do aircraft it have a different municipal airport in my area, I've had issues with the mechanics holding log books and other things where basically the airplane is grounded and charging exorbitant fees for their repairs, this would essentially keep everyone honest and that's the intent of this legislation, now you have to any questions Mr. Chairman. Questions for the bill sponsor. I sold my plane so I have no questions. Any other, OK question in the back. Will this affect how much the mechanic can charge for his work? It does Mr. Chariman. Recognize? Yes it is not design impact, the mechanic can contractually give an estimate of what the repairs will cost, it just keeps everyone kind of on paper and honest and so that things can't be withheld so that the again, addressing the exorbitant fees where you might not reclaim your own aircraft. Other questions? Representative Robinson. Just for a motion, at the appropriate time Mr. Chairman. Alright, anyone else? I think it may be the appropriate time. Very well I move for a favorable report for house bill 567. And I believe this has a serial referral to transportation. Make that part of the motion. Alright. We have a motion for a favorable report on house bill 567, with a serial referral to transportation, all those in favor signify by saying aye. Any opposition? Alright, bill passes. Now we're going to have Representative [xx] to return for house bill 779, that's the last one on your list. thank you Mr. Chairman. I do have an amendment for the bill. If we could pass that out if it's not been passed out. Alright. Does everyone have the amendment as a copy? Alright, just hold a moment, the amendment is being passed out. While it's being passed out I will explain the bill. The bill's essentially a means to simplify and give options for the state's CIO and her agencies in terms of IT procurement. It's fairly self-explanatory, but allows for everyone to be able to compete and for the CIO to make choices based on qualified vendors. And the amendment has been passed on Mr. Chairman as a member of the committee I'd like to move the amendment. Alright we have an amendment before us, this is amendment ARO thus 20 volume one. Thank you Mr. Chairman the purpose of the amendment is consult through with the State CIO after we've obtained the language. We're just making sure that we're perfecting the bill, so that it is functional, and so that we allow for as it states available for multiple manufacturer supplies office of information and technology services shall evaluate the responses and award contracts to qualified responders and ask for you to support the amendment, thank you Mr. Chairman. All right, do we have questions from the committee to the bill sponsor? All right I have Representative Brockman? To question. Okay, all right, Representative Athower[sp?] I was just questioning the availability of a summary on this bill?

There is, I've been advised there is no summary on this bill. Representative Brody did you have a question? Okay, all right I have another question here in the back, all right go on Thank you Mr. Chairman. So the IT people have already approved this with the amendment, they like it with the amendment. That's correct. Thank you. All right are there other questions from the committee? All right Representative Brown. Thank you Mr. Chairman, I just need clarification Representative [xx] qualified responders, does that mean that they appropriately filled out the RFP for instance or is that going to a vendor who has met certain requirements to even be able to respond? That's correct it's a process so qualified under the request for proposal, so there is a process already in place, so that it's not wild wild west. Thank you. Representative Hall Thank you Mr. Chairman it's just a comment of support for the bill I think it encourages the competition we want in bidding for state contracts and I support the bill. Thank you. All right, other questions from the committee? Anyone else Do I have a motion? Mr. Chairman, is the motion on the amendment? Alright that's OK. let's clear the amendment, so do I have a motion on the amendment? Alright. Mr. Chairman I move that we accept the amendment as presented. Alright we have a motion to accept the amendment as presented, those in favor? Alright, any opposition? Alright we're back on the bill. Representative Bell. [xx] Alright, rolled in a committee substitute, new PCS, OK, alright you hear the motion, all those in favor signify by aye, any opposition? Alright. bill passes. Thank you Mr. Chairman, thank you members of the committee. Next bill is House Bill 438 modify utility account and I believe this as Representative Martin saw, yes. Mr. Chairman I'm having a question on surface looking into a discrepancy between the bill's summary and our understanding so can we move this out on the calendar for just a minute in case the amendment needs to be prepared. OK, alright, thank you. Alright, I'm going to move then to House Bill 594, clarify sale of antiques and specialty vehicles. This is Representative Hurley. Good morning? Just came from the Committee on Aging, out of breath here. This bill came to me further request from the North Carolina Automobile Dealers Association, and it is just clarifying who can sell antique cars if they're sure that it's going to be an antique car, and so it's to clarify the sale of antiques and specialty vehicles. they have to have ascertained, they have to have a vehicle and have a bond, thousand dollar security bond, give at least 60 days advance notice to the local DMV, and they have to put signage out that it will be they are who were selling the vehicles, and have at least three license sales people on site, and advertise the event as an antic of collectors vehicle sale so you'll know who is selling these vehicles as the people will not be billed and taken advantage of. It will be a national antique car, so I'd appreciate your support. Alright, questions from the committee, representative Broody. Thank you Mr. Chairman. Just one to question having at least three license sales. People on site, could you give me the rationale for that one? the person from North Carolina on regular association is here. Could you call for him please? Alright, I'll allow is there someone here from the automobile dealers? Yes Mr. Chairman, thank you very much, [xx], North Carolina automobile dealers association [xx] basically what this, a lot of these requirements are in the statute now, you have to be a

licensed dealer to do these off premises sale of these specialty vehicles and antic vehicles and the thought in here was for this bill was to kind of beef up this statute to make sure that these things are really legitimate sales, so the three sales persons concept we're not [xx] to it but it is a concept of making sure it's a legitimate sale with a legitimate dealer and that's where the number came from basically. Thank you. Follow up Mr. Chairman. Follow up. Follow up for the gentleman if you wouldn't mind? Sir, could you answer the question? Are there any companies that sell antic vehicles that are small that would not be necessary to have three people, what say you? own an operator or something like that?   Representative that's certainly possible, I'm not entirely sure that this, we've checked with various auctioning companies in the state, they didn't have have a problem with this, we're not aware of any opposition to this, but again if that number posses a problem, we can certainly, we certainly won't discuss that it wasn't really, it's more along the lines of making sure these were legitimate sales, obviously it's already a dealer license you're requirement in here so you have to be a licensed here in the first place so we can certainly look at that because it raises concerned. Further questions? Representative Yobo. How does this affect the guy that goes out and finds his old car fixes them up and sells on one or two at a time? Yes I've deferred to the. Representative Yobo basically this doesn't really affect them, this is for dealers and under the statutes to have to be a licensed dealer selling cars I think it's five or more cars a year. So if they were engaged in activity that didn't require them to be dealers in the first place I don't think this would impact it again this is just covering the statute that currently allows the existing license dealer independent or franchised to have a off premises seal off and especially in antic vehicles, I don't think, if you're not required to be licensed now I don't think this will required to be licensed as a dealer Further questions? No other questions, all right, Representative Brown. Promotion? All right I think now is a good time, That we move for a favorable report on house bill 594. All right you've heard the motion, for favorable report on House Bill 594 all those in favor signify by aye? Aye In the opposition? All right, bill passes. Thank you [xx] and Martin are you, Bill 438 Okay, thank you Mr. Chairman, and members of the committee, and thank you to my co-sponsors here. This modified utility account came out of the work that I did on House Bill 117 and looking at all economic development tools that we have in our State, and how we can do the right job supporting all counties the Tier 3 counties, 2 counties, and 1 counties, and as I looked into the J. G Program, you may remember that when we passed the Bill, The Job Development Investment Grant that we're renaming to Job Growth, that when companies choose to locate in the tear surreal Wealthy County, and we give an that we hold back a percentage of it, and if it's a Tier three County, 25% of what would be the grant is withheld for the Utility Fund. Fertility Fund is used for projects in Tear One and Tear Two Counties. And if the Tear Two counties it's reduced, I think 15% is withheld, and one change that we propose and pass out at the House, which is actually being taken up in the senate today for discussion so there is some progress there, with that we change it to 30% so that more money would come out of that when it goes in two or three county and be available for out Tear One and Tear Two projects. And those projects also to go for infrastructure that reasonably expected to create jobs we made a second change this was an amendment from representative Tine that to they all to maintain jobs, so we were trying to look at what can we do to make sure we were using this money properly in our Tear three counties, and as I further investigated I found that we weren't tapping into this fund as much as we could be because we really have a lot of

our infrastructure and it's the application process. So what sometimes happens, I know this will shock members of the committee, is that the fund get swept into the general fund when it comes to appropriation time. So while we're trying to designate that this money be used for economic development in our tier one and two counties, that is not always occurring. And so right now in that fund which again this money is not appropriated, we appropriate the money to go into the JDIG account, and then when we pay that fund out, when the awards come forward, when the company remember at the back end companies have shown up, they have created the jobs, they've paid money in, we've collected the payroll taxes and then a percentage goes back to the company. And when you remember that because when we come back talking about these programs again that it's not a giveaway, its at the back end returning a reinvestment, so after we've given that money back, money we've collected from new jobs and we've kept a percentage, that's how this fund gets their money. So usually they say the Commerce Departments here that typically in the fall, we do the reconciliation and put money into the fund so right now we have about $11 1/2 million in the utility account, of which about 7 1/2 million is obligated, so there's about $4 million available for our tier 1 and tier 2 counties to apply for. Now, in my tier 1 county we have another problem that's not being addressed, and this is where I started to put all the pieces together, and it's one of those great problems that breakdown silos. Like this is a great project, it's education, it's work for us development, and we don't know what to do with that and I find the exam point when things come together, so it's been a challenge. What we have, in additional to really high unemployment, we have 400 jobs in the high paying manufacturing companies that we can't feel, because we don't have the right workforce in Wilson County. So we have one of the highest weekly wages because we do have some great companies, we also have one of the highest unemployment rates. So we're moving forward and there's been great collaboration between industry and education should come together and have a new cooperative and innovative high school where they will be teaching specific industrial skill so it's like a stem school academy of applied technology let me talk about it before because I'm also asking that we give them another planning year to open because they are planning to bring in equipment from this industry and have high school students to start working that they will budge in they would work like it was a company and they would gain skills so thaey can come right of high school and with associate community college degree be on a high school campus and community college working with industry to move forward, but it's a big investment and we are really struggling to find funds with project now the secretary Scovery has been there the governor has been down there they think this is the fabulous model, and it might be something we can replicate across the state and its very exciting because it does break down the silent and really the industry folks are coming in and working directly with our K212 I would say these are the skills we need and we are going to come to the table with equipment, so they've gone a lot of different grams, but they are still struggling so what we are doing here is adding one possible way that this money could be spend that up to 500, 000 dollars that it would go to same applications so it would have to be approved could be for infrastructure for these types of educational opportunities which will help people gain employment. So that I'm sorry for the long summary, but I think its kind of interesting when you change a fund that's out there, that you make sure that it's really doing  what's intended so these are infrastructure improvements that would go into, a community could use for work force that the people who are there have opportunities then to get employed so the net result is reducing unemployment and using this money for infrastructure in those counties. I worked with the commerce department on this, do they support these changes to the fund? And what we are trying to get corrected is in the drafting, the intention is that it would be 500, 000 dollars total and then when it says under, if you're looking at the bill line 28, the fund shall be used, that's supposed to be talking about 500, 000 dollars but the bill summary says its 2 areas and one is unlimited so we're going to get that straight I don't know if has come up to a decision, but if we need to a perfecting amendment, what I'd like you to vote on is to move it forward for the 500, 000. Happy to take any questions. Alright thank you Representative Martin, I've got a number of people here signed up to speak. Representative Adams, we'll start with Representative Adams. Couple of comments, we're going to turn the utility account to a euphemism.   Into want?   Into a euphemism, it's no longer going to be the utility account now it's going to be for high school educational programs as well. I have a real problem with doing that, I think utility account should remain

as the defined, and if you want to set up a different program to float money into it for these specific programs that's fine, but this is, and we got $11 million in utility account so that meets the potential for 22 of these grands across the state, and burn down the entire account our local community colleges set up a furniture academy and a simulated hospital which would've been a [xx] from this sort of thing, but before I would ask for that, I would like for the money to flow from appropriate fund not a utility account. If I may Mr. Chair. Representative Marvin. I just want clarify that the language right now is up to 500, 000 dollars per year that may be approved so there couldn't be happening all over the place. So this would essentially be in a pilot provision and it is go to infrastructure and technology improvements, that is on line 25 of the bill. So I do, but I do do appreciate your concern. So that's Follow up. To be clear that's a total $500, 000 a year from the account for this purpose? Yes All right I have Representative Shepard. Thank you Mr. Chair, I think that she just answered my question concerning the $500, 000, if that's the total will grant a $500, 000 and it can only be used for applied technology and so forth right? That is correct, and again the communities who have, that meet these qualifications would have to apply and get approved though the grand process. Representative McNeil. Thank you, I think the prior discussion has answered my question, atleast I hope, because I was looking under on line 30 where it says, there should be no maximum funding amount per new job to be created or per project, and kind of just a follow up  are you saying now that the 500, 000 dollars is going to buy that section 2 or so while we've got unlimited language Yes, that's the part that I have bill drafting and staff working on to make sure if we need to have clarifying language there. The intent was that the total will be 500, 000 dollars, and right now, a lot of the grants are awarded on a part-job basis, and because this is allowing students to get the education they need to then become employed, it's not a company coming in to create jobs, but the problem is that, we're not going to be able to recruit more companies or get our existing companies to expand, if we can't fill those jobs and provide the skilled workforce. So I see them as very closely related with the goal of we want our people to have good jobs and the idea of recruiting jobs here. So they're just saying that it's not going to be based on a part job. We were saying that it reasonably, the other important language is if you turn to the second side, and you look at what's changed there all of the top is existing language, and the current utility fund and then 12 is added, which defines the work based experienced programs, that limits it to a kind of the cooperative and innovative high schools that are technology-like that furniture one that Representative Adams was referring to may if they needed the funds, if they're in Tier 1 or 2 be able to apply for some of the equipment needs and that kind of thing. But it wouldn't be a poor job number so it's just a different way of measuring how you put the funds out there. Follow up. Follow up. Let me ask this then, assuming that you get that language straightened out to where it says 500, 000, theoretically could one entity then with the no per job limit or per project limit theoretically could one person come in and maybe sweep in and they're the first one line and get a whole 500, 000 one year. Well I don't know about one person but one project could come in and get all that $500, 000 yes now alright I have seven and it looks like it's getting ready to be eight signed up to speak so we need to try to move these along if we can. Representative Brody, no question right? Representative Richardson. Thank you Mr. Chair can I just go ahead and ask a question or wait till she finished consultation. Go ahead It sounds like a good project but my question is has this money

already been targeted for a particular project or will it go into a competitive grant for this year for any tier-1 county. Thank you for that question. The money is not targeted so we do have a good project in mind that would potentially qualify under these things but this is a model and we hope that there will be other projects like these, so it will go through the regular competitive process. Follow up. So, my second part of that question is will it go into your competitive grant this year or how will it be determined who gets the money for this year? I may ask Thomas to comment on this on how they do their utility fund applications but because it's not like a budget grant, I think they have ongoing applications and so if we added this year's then there's $4 million in the fund now that's not accounted for so it would just be competing with all the other utility, other infrastructure projects that come forward and then as we replenish our JDIG funds and we look at recruiting new companies and they come and we will have that even though we don't have many right now that we're handing out new grants to companies are coming in and they put money there so that it's a revolving count so more money will come in. So I think it will become available as soon as this became law like in July and if that's not right, they're shaking their head yes so starting in July. And I'm interested Follow up Follow up thank you, I'm very interested because I have some tier-2 tier-1 counties but if this becomes law, will become effective when it becomes law, that does not give the unknowing counties a great deal or opportunity to get their applications in to apply for this. That's the thing that I'm concerned about that will we give a competitive advantage to counties who already know about it since we aren't going to give like start as of July 1, or as of October 1? I think there's a lot of other programs out there and there's company's there's projects will come forward, it might not be a 500, 000 goes in one sweep, and it maybe that if we find there is so much need for this that we consider, is that the right cap, and then they could be doing the work to apply next year. I mean this type of project does take a number of years, which is why we're saying that they are not going to be ready to open visa-a-vis bringing the equipment in. It's been a multi-year process already, so it would be, when people are ready, they would apply. Alright, thank you. I still got eight stand up to speak, I want to get a bill on this today, so let's try and keep the questions and the responses as brief as possible, Representative Sauco[sp?] I just like to applaud the sponsors on this bill, I think it's a very good bill, and I'd like to make a motion at an appropriate time. Thank you. Representative Van Thallon[sp?] Thank you Mr. Chairman, and correct me because I think I remember in the discussion of the original Incentives Bill 117, this is going to be tied in with the State's Strategic Plan, as I understand it, and I guess my question is, in evaluating these projects that come in, is one of the parameters going to be how well it fits in with that strategic plan, and would that be an advantage of one project over another. Thank you for the question. I ask Thomas, would you like to answer how you determine the, Representative [xx] About it but the different programs is what the Jaydeg[sp?] [xx] in this utility fund do have this competitive process where it's tied into the plan? Join him I named General counsel[sp?] with the Department of Commerce. All the utility account goes through all these projects have to be approved by the Rural Infrastructural Authority which was established by this National Assembly a couple of years ago, so that they do have different criteria that they look at for any project, it's future plan is one of the things they look at but it's based upon the geographical location if everything is well so there's criteria that they had in place for making these decisions and that's what to follow for these types of projects as well. Thank you. Representative Hamilton. Thank you Mr. Chair I get what we're trying to do here and I applaud the efforts toward workforce development opportunities. I'm not comfortable however that it's placed in the right location. My question is, directly, the utility account, and rural

community that goes from jaded back to the rural counties for infrastructure is pretty well established among local economic developers that it will be used for pipe in the ground, road development, things of that nature that help recruit industry into the state. Workforce development is obviously a big part of that, but the question is has anybody talked to any of the local rural economic developers regarding, in the County Commission Association regarding taking this money out of the Utility Fund and putting it into the school system? Thank you for that question. I did work with the economic development main directors in my community about this who would have these other projects, and they are trying to recruit industry into this community community and not able to get them to expand because they don't have the skilled workforce so that is why it's economic development director working with the school, and bringing industry to the table on this project which is so closely tied and I think is something that we need to move to, and I just want to be clear that the money is not out of the utility fund, and so it's going to be competing with all those infrastructure projects. So it may not get funding, it's not 500, 000 has to be used in this way. It maybe in the right opportunity and we're leaving this money on the table, and so it's trying to expand the uses that it would benefit our communities and not be swept back into the general fund. Just following up if I may.  Follow up. I think what concerns me is that that an education program, a workforce development program although it seems like a small amount of money will be in direct competition with the utility infrastructure, site development component for these rural communities. I would be very interested to hear from North Carolina economic development Association, County Commissioners Association, across this state as to whether or not they're comfortable with removing these moneys from the utility fund to be used directly for education purposes. Final question, is there a serial referral to K-12 education for consideration of this?  No, there's not. Representative Brown? Thank you Mr. Chairman, I apologize ahead of time perhaps I'm tired but I just want sure clarification, and I don't want to blubber the $500, 000 point, but I want to just make sure that I'm clear on it. So the $500, 000 that's used in section 1B that is a comprehensive 500, 000 dollars so far, if a 100 LEAs apply the cap is still 500, 000 maybe they get small portion, correct? not 500, 000 per school. Yeah sure maybe that we're one and then nobody else, it depends on whether they meet the criteria under the utility fund, but we do I think have the amendment follow up, follow up. Is the same 500, 000 applied to section 2 or is that a subsequent 500, 000, so it's 500 across the board, got it, thank you. Sir at the appropriate time I'd like to send forth my amendment. Is it ready? Alright Representative Martin has sent forth an amendment, we're going to read the amendment and ask for some time. What the amendment does it on page 11-31 it replaces the word participant with participant subject to the limits in sub- section 1D period. Mr. Chairman, is that going to be passed out?   I mean we can, would be the a way of giving the copies. Does every one need a copy of that amendment or is it, well you can see why I didn't read it, his writing and he could read it. I need a copy of that might hear it better We will try to get some copies of the amendment out, you want to, somewhere else in the amendment. I guess it' s line 31 I have read between where under that number two that they were saying was not subject to the $500, 000 after participants it just adds subject to the limits in subsection 1B just clarifies and it adds subject to the limits in section 1B so there's no confusion that there isn't one unlimited portion and one 500, 000 so it limits the total to $500, 000 per year. Alright is there anyone that still needs a copy of that amendment? Mr. Chair Representative Floyd[sp?] I think we can trust staff to prepare it correctly. Thank you Representative Floyd[sp?] I totally agree. We're going to move move ahead on the amendment. I move for the adoption of the clarifying amendment. All right you've heard the

amendment, all those in favor signify by saying aye Aye! Any opposition? All right the amendment passes it's included in the bill, back on the bill. Representative Adams, I think he just left. I can skip down and come back to you, Representative Terry. Representative Grams. Thank you Mr. Chair and I have a couple of questions for this bill sponsor, I'm looking at the language, I just want a clarification on a couple of points here it says the most distressed counties in the state. Can you say where you are second time? Yes I'm sorry, line eight. the most economically depressed counties in the state in creating jobs, I mean and principal I love your idea I think is a wonderful idea I like to support it but I'm kind of nervous when you're saying it could go to one LEA, I'm really concerned about that statement, so my question is and on line nine you talked about the department of commerce shall adopt rules provided for the administration program, if it's going to an LEA school system I'm sure they have qualified folks to and administer two programs. Mine, two questions, one is the criteria for being able to apply for these programs, and also who will be sitting at the table to determine who's going to have an opportunity for thsese that funding that's relates to the LEA's?   Thank you for your question. I just want to be clear that this language is the existing statute, so those things that you are pointing out are not propose new language so this is the Utility Fund and what's changing are these underlined items in 1B, and even under items two there on line twenty eight it's only the underlined area that changing and then worked with that amendment, but the funds shall be used by the city and county governments for projects that are easily anticipated to result in job creation, and then we add that piece, and there's another piece that was amended there in House Bill 117, but that's not reflected here because we haven't pass it all the way through yet to statute. So we go through the standard application process of the Utility Fund, and be administered in the same way and so it's not really through and they liaise through the local government and hopefully their working collaboration and keep in mind that now, I mean it just depends on our communities have different needs, so they all have infrastructure needs but, some are using 1 NC, some are using this, I mean there's alot of different tools out there in the tool kit, and we want it to be available for everyone. Representative Martins, excuse me. We're coming to the very end of the meeting, infact we have one minute lapse, so I'm going to call for a vote, I think we've had plenty of discussion, if there are other questions you'll hear the bill sponsor.  I do have a follow up, but I'll talk to the bill sponsors, alright I really need to get a vote on this now. Representative Szoko, I move that the committee give house bill 438 as amended a favorable recommendation. Roll into a new PCS as amended, you've heard the motion, all those favor signify by saying aye,  aye, any opposition  no  here's all right, let's have a show of hands. All those in favor Okay. All right. Opposed we have 13 in favor and 19 oppose. The bill fails Thank you Mr. Chairman And we adjourned [xx].