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House | April 21, 2015 | Chamber | 20150421_House_Finance

Full MP3 Audio File

No, no. Good morning, it's 8.30 a quorum being present the House Committee on Finance is now called to order. Good morning, I'd like to welcome our Sergeant-at-Arms that will be serving us today, where is my list? Here we go. Of course, we have Reggie Sills, Terry McCraw and Chris McCracken. Our Pages today are is that Elina[sp?] Caldwell? Representative Riddell, Elisha Harrison, Representatives Stam and Jacob Johnson, yes Joe Sam Queen. We're going to deviate slightly from the order and show courtesy to our visitors from the senate. Senate bill 372 I believe senator Tillman will be presenting and we also welcome Senator Rucho today. Senator Tillman you're recognized sir. It's certainly good to be over in the house where everything is lively is peaceful and wonderful and I appreciate the hearing of senate bill Mr. Chairman. I know how you want to do house bill [xx] he'll cross over but I [really appreciate that and thank you. Members and Mr Chairman if you're ready for me, Yes Sir, You're recognized. Thank you folks this is a limited energy renewable credit bill that will allow big projects and some other projects that's got a lot of work in the ground, a lot of infrastructure done and a lot of money put out for these projects. Due to no fault of their own, as you may know in this business is highly regulated, there are many hoops that you go to jump through including the [xx] as well as many others to get this project ready to go. A lot of delays have occurred that certainly not thought of these folks but they've been waylaid many times in this project and these are big and viable projects in economically depressed areas of the state it's not like that we're are putting them in Charlotte-Mecklenburg, or that we're putting them in Durham, or Raleigh, we're putting them in counties like Bartie, Edgecombe, Hertford, Gates who have a lot of property there with nothing on them producing anything and is very little income being produced by others. I will say that this bill has been run by many people we've had lots of discussions over several months with the NC utilities commission, department of revenue, public utility representatives, industry experts, accountants, engineers and local and economic development folks, all of which favor this project and all of which we'd like to see very limited extensions so these folks can complete the projects that they've already put a lot of their livelihoods into. Mr. Chairman, I will not go into details unless there are questions from the committee, and we've got staff here that we can call on if we need to. Are there any questions for the bill sponsor? Representative Hager. Thank you Mr. Chairman, and just looking over the summary here, Senator Tillman maybe you can tell me, how far does it extend in the credit out until? These credits would go for an additional year for these people that have met certain basic requirements, such as having incurred at least 80% of the cost and partially constructed at least 80% of the project with less than 65 megawatts. Those bigger projects, the taxpayers will have incurred at least 50% of the cost, partially constructed at least 50% of the project and have 65 or more megawatts. Followup yes [xx] when you say 80% how is 85% on the less than 65 megawatts, and 50% on the, I think it's 50 or anything above 65 megawatts, how was that determined, who determines that, and how is it verified? DOR and others have to look at these projects and they must verify that not only by engineering studies but on site studies to see that they've actually put this amount out, it's not just taking their estimates. Senator I think I am going to ask Ms. Funnel of staff to explain the bill and perhaps some of the ramifications that might answer some of the questions, Ms. Funnel? Yes Sir. So as Senator Tillman said, Senate Bill 372 it

extend the credit for one year for taxpayers that meet certain requirements. So to qualify for the extension a taxpayer must first submit an application by October 1st, 2016 and pay an application fee of $1000 per megawatt with a minimum fee of $5000. Then to qualify for the credit they must show that the construction was partially constructed as of January 1st, 2016, and how they will show that is they must submit application by March 1st, 2016, and that documentation also includes a recent certification by the taxpayer that the costs incurred in the partial construction meets the requirement, and report from a licensed engineer that the partial construction meets the partial requirement, and a report from a licensed CPA that the cost incurred for the project meet the minimum percentage of cost incurred. And this Act is effective when it becomes law, and as Senator Tillman did say the percentage of construction for projects that are 65 megawatts or less is 80%, and for projects that are 65 megawatts or more, the partial completion must be 50% by January 1st, 2016. Miss Fennell I guess that the question I would ask is Chair, I interpret you much to say essentially that these grandfather's projects that were already authorized already in process and just allows its completion but will not allow new projects to be funded beyond current date that had not already began, is that correct? Yes you must have undertaken it by January 1st, 2015 which is the original date that it would have expired and you must have substantially completed the project up to 50% or 80% depending on the size of the project. Okay, thank you. Further questions from the committee? Yeah, up here. Representative Haeger did you have a follow up. [xx] Okay representative Stam [xx] probably would know the answer to this but if not, stay out. Since this is past senate I assume with this committee passes its likely to become law, and its 36.7 million in the second year [xx]. The house has passed a whole other tax credits, that are in various stages of [xx] committee or senate committee on ways and means, but all of those put together, isn't it the case that we have to account for that in the budget that the House passes next month? Mr. Chairman. Senator Tillman. Representative Stam, that's a good observation. Yes, many projects have been passed by one body or the other. This one is critical in that, a lot of this work has been done with credits that have already been extended, they're just needing an extension in time. They're taking advantage of those tax credits that's already on the books. There are 3000- 5000 jobs in constructing these projects in those economically depressed areas. They will bring in 300 to 500 full-time permanent people with jobs in those counties. So there's a direct correlation to the economy, especially in those counties with this particular bill. Followup. Yes and I understand that answer, but I have a different question and that is, if we go ahead, if the House passes this bill along with this. Hundreds of million of other credits that may or may not happen, [xx] that have to come off budget house that's passed next month, in other words if there's at least 36 million of credits in the Senate that aren't going to happen why shouldn't this wait till after the House passes its budget? Well, we would ask why shouldn't we pass this if its important? and you've passed your House bills and we're certainly going to look favorably upon all those that we can I'm just asking for the same courtesy in this one, and at the end of the day when we talk about the budget Representative Stam, we will discuss all these things and those things with the highest priority will get in the budget and those others may or may not. If I would speak on it. Or debate. For purpose of argument that this is more important than any of the other credits that we passed, but it's the cumulative total that's the problem and if there's 36 million of credits that we passed that are never going to happen the Senate would go ahead and defeat him or withdraw him or do something, then it would not so drastically affect the budget that we're going to pass. This is not an opposition to the bill, it's an opposition to why pass it before this House passes its budget, that's just my comment on it. Senator Rucho, did you want to address that? I am. Representative Stam, I do share your concern. Here is the situation, the way this is structured going out a year and as Senator Tillman alluded to, some of this takes to eight months to a year to be able to make the plans to hook

on these megawatt facilities on to the grid. There is all kinds of both technical and business type arrangements that need to be coordinated, but the important part is we are going up the one year to put an end to these renewables in a soft landing type approach, and time is of the essence because they're going we need the time between the passage of this bill and December of this year to be able to get to the 50% level and moving forward so that the only reason why it's just time sensitive, so that we can stay on our, not to exceed the year time frame for them to make the finally connection to the grid. Representative Stan[xx?], did you have a follow up? No, I just share the same concern and we finally true up the budget that would be great. It just means that going to be a very painful house budget, They all, aren't they?. Absolutely Representative Szoka. Thank you Mr. Chair, first I'd like to just make a comment that I think this bill is very timely. I think it's a good bill and I think that we all know that a lot of these projects take an incredibly large amount of planning and time to come to completion sometimes because of weather, hook up problems with the utilities or whatever, it extends the completion time so I think that this bill is a good [xx] to vote for it in the appropriate time I'd like to make a motion. Representative Collins,  yes sir, I have several questions that this discussion brought about, I didn't have them before when I just read the bill but now that I'm seeing the financial note here in the discussion, I have some questions. I'm I to understand that some of these projects that we pick up by extend have not even started yet? So chairman. Mr. Chairman these projects must already have begun and many of them are in the ground and a lot of money is out there, they're only 65 for this, up to 65 megawatts that have already put the amount of money that's in the bill, I believe you've got a summary, as well as the bigger projects that include thousands of jobs to construct. May I follow it? Follow what?  If this [xx] statement 2017, why are we showing 36.7 million dollars, I don't know if it's up to infinity or not its the least up between the 20, 20, I'm not understanding what that's all about. Mr. Chairman I think [xx] is going to explain of [xx] that is not   Mr Turk if you will explain, Yes, Representative Collins it's clear as taking private installments in this is the bottom line of why. So if you have about $525 million in investment here is going to result in a credit of about $183 million, that's about 36 or so million spread over a five year period. Follow up. I guess just a follow up comment. All 100 of full time jobs that are mentioned. These things are out in my area a lot too and I have never signed a single persons and they are watching the sun bake this things once they put up in, also as mentioned that the land that they sold in [xx] wasn't producing anything before they were put in place in Maya they were producing a lot of crops before this mashion looking counties so invite[sp?] them. Representative Warren. Thank you, Mr. Chair. I'm just curious, how many projects are we talking about currently? Mr. Chairman, there are about four projects out there that are very viable, that have infrastructures in the ground and money already and time already expended, and that's all that I know about that would qualify. There may be others, but if there are I don't know about them. Three of them are very big projects, thousand-acres project. Follow up. Please, for staff? Ask your question. Miss [xx], do I understand what you said that the projects have to qualify they have to have 80% of costs by January 1st, 2016. Yes, that correct. For projects that are 600 [xx] or below it's 80%, above that it's 50%. Follow up. Senator Tillman, is it possible that we have other good jobs start and qualify for that between now and January? Mr. Chairman Senator. I can only speculate, but if you're putting up $1000 per megawatts and you're doing an application fee, and you're putting thousands of dollars on the line, I seriously doubt it Thank you very much. OK.

Representative Hager is recognized for a second time. Thank you. Thank you, Mr. Chairman. Representative Tillman, you stated that we had 3-500 jobs, and I guess I'm like Representative Collins, I'm kind of suspect on that job count. It may be during construction, I think it may be. Is that kind of what we're hearing, during construction it's 3-500 jobs? Mr. Chairman. Senator. No, Sir. 3000-5000 jobs. These are large, large projects, thousand-acre projects with many megawatts. No, about 3000-5000 construction jobs, and 300-500 total that would be permanent. These things will need to be monitored, there are transmission lines that must be kept up and maintained, there are people that will have to be there on site. So we're talking about a total of 300 minimum, up to 500 permanent full time jobs. Follow up. Senator Tillman, is this 300 to 500 jobs, if we give these folks the tax credits are these 300 to 500 jobs guaranteed? No Sir, I don't know that there's are any guarantee about those jobs, I don't know that. I don't think we have a guarantee of it, nothing. Follow up. Question, Mr. Chairman. I don't see a referral to this on Public Utilities, and I think I've already talked to the Representative Lewis about referring this bill to Public Utilities. He has tentatively agreed to that, but with the motion, I'd like to make a motion to have it referred to Public Utilities, referral to [xx] facilities[sp?]   We'll make that part if the motion. For the gentleman's information that was discussed earlier, it wasn't on the Bill jacket, but I was confident that when we reported out, the Speaker will put it where the Speaker wants it to be, and if the Speaker and Representative Lewis have agreed to this I have no doubt, but we'll make the motion or rather Representative Szoka, will make the motion, or have you completed your questions Sir? Representative Jordan. Thank you, Mr. Chairman. I'd like to follow up a little bit on what Representative Stam was talking about, and it may be a question to staff, but my understanding very recently about availability has been that these tax credits bills like historic tax credits, that we pass in the House and sent over to the Senate, that are sitting in Ways and Means or whatever in limbo, that money comes off of our availability in our budget. If we pass this bill, this money will also come off of our availability for our budget. So I think I understand Representative Stam was saying, if we could get some movement on some of our tax credits that are not going to be dealt with to take them off our availability, that might to be better for us in terms of the budget, otherwise we should probably wait for this tax credit until we finish our budget and deal with it at a later time. Can I ask staff to clarify about the availability and how this bill affects it? Just as the tax credits that we have passed that have not been dealt with in the Senate also affect our availability. Mr. Tart[sp?] Yes. Representative Jordan, it would I reduce the availability of past in the second year by 36 million. Okay follow up. I follow up comment. At this point I would not be willing vote for this because we've already send over millions of dollars of tax credits, if they're not going to move it in the Senate that's fine, but I think they should be voted down so that we ain't taking off that problem with availability, so that's kind of last stand on the situation right now. OK, Senator I think the committee is asking for a little help. with their Bills on your side to get an answer fairly quickly and I'm sure that being the gentleman that you are, you'll take that to heart as if further discussion, further debate? Thank you Mr. Chair Representative Zacher is recognized for a motion. Thank you Mr. Chairman, make a motion that Senate Bill 372 receive a favorable recommendation from the Finance Committee. With serial referral to public utilities seconded by Representative Martin, so many as favor the motion say "aye" "aye" oppose "no" the opinion of the Chair the "ayes" have it, thank you Senator. Thank you Mr. Chairman. Representative Davies is is recognized to send forward the committee report. Thank you Mr. Chairman, House Bill 347 entitled Modify Graham County oxitax was heard by the oxitax subcommittee yesterday the bill was found to be in compliance with the house guidelines for oxitax legislation and received a favor report and recommendation. OK thank you MR. Chairman, is Representative West here to present his bill? Representative West is recognized to present HB347 Thank you Mr. Chair, members of committee, house bill 347, record a file in the existing Graham County occupancy text and get the uniform of the current text guidelines.

I would appreciate your support on the bill. Representative Warren thank you Mr. Chair for a motion appropriate time please. I think the time is appropriate. Thank you I move for a favorable report on house bill 347 Favorable report moved by Representative Warren, seconded by Representative Zacker[sp?]. Any further discussion or debate. So as many as favor the motion say I I Oppose no. Motion carries. Thank you representative for your brilliant presentation. Thank you Mr. Chairman, thank you members of committee. House bill Amend Laws Pertaining to NC Medical Board, we have a PCs motion by Representative Jones seconded by Representative Warren that the PCs be in front of us, so many as favor of the motion say I.  I.    oppose no. PCS is properly before us representative Jones Thank you Mr. Chairman, I have in the same colleague with me on this bill as primary sponsor but he is otherwise engaged in legislative duties at the moment this is about amending laws pertaining to the North Carolina Medical Board and I think it is before the finance committes today specifically because of section eight and section nine, which deals with the fees, section eight deals with the application fee to the North North Carolina Medical Board and we did increase the fee from $350 to $400. Section nine deals with the annual registration fee, so my understanding this is the first increase in about nine years increases it from $175 to $250 and I would just observe as a member of North North Carolina dell[sp?] society that's a very modest  fee indeed I think it still less than what the dentist pay and I think it's very reasonable they're asking for this. Mr. Chair I'll be happy to entertain questions but at the appropriate time I'll be happy to make a motion as well. Are there any questions for the bill sponsor? was that a yes Representative Bishop? No sir I heard you say yeah [xx] OK you'll learn the rules of decorum eventually sir, Representative Martin. Thank you Mr. Chair, can you explain what'ts different in this PCS from what was heard in health committee is there something that's changed about the PCS? I can [xx] that in the staff I am not familiar with changes I know that there was a change that was made in the health committee, but I'm not sure what is changed in this [xx]. If the chair would be allowed a little attitude, this was in response to a question raised by Representative Glacier[sp?] and was worked out with members of the Medical Board, Tom Mansfield, who is Chief Legal officer of the Medical Board and was author of the changes to which Representative Glacier[sp?] agreed he's present in the audience I would ask him to explain it since sir, I think he could explain it with greater detail Mr. Mansfield if you press the green button tell us, state your name for the record and the organization you represent. Mr. Chairman, I'm Tom Mansfield from the North Carolina Medical Board, I'm the Chief Legal Officer at the Medical Board and  to change is to clarify the intent of the provision in Section 11 of your bill that's on page 3, line 21 the changes occur from line 20  to until line 34, and I don't think it says anything that's ultimately different in the affect of the bill but I think it makes clear that what the Board is trying to do is make sure that every physician who has been investigated by the Board, and regarding whom the Board is decided to initiate a public disciplinary proceeding, gets a fair treatment before the board and has access to the information he or she needs in order to defend himself himself before proceeding at the Board. Followup Thank you I just want to know the different speeches. Representative Meyer. Thank you, Mr. Chair. Two questions about the bill, I'll start with one on Section 1, can you you just give a reason Representative Jones for why we would place a lifetime limit on terms on a medical board? Representative Meyer, thank you for that question. I think it was the determination of the Medical Board that it gave more people the opportunity to serve, and by having two, three terms, that's six years that they can serve rather than being able to perhaps come back again at a later time. I think it was determined by the medical board that they would prefer to simply have

two three-year terms and go with a maximum six year maximum term limit. Follow up Followup thank you. In Section 7 of the provision, The Board shall not deny any application licenses based solely on the applicant's failure to become board certified, wouldn't we want members to be board certified? Mr. Chair, if I may defer that to I think so, Mr Mansfield. Thank you, Mr. Chairman. Yes, many physicians in North Carolina are board certified and most of the organizations in medicine think that that's an indication of competence, of high quality practice. There's a coalition in support of this bill a number of organizations I'm not aware of any organization in medicine that's opposed to the bill. This particular provision was with regards of some concerns for one component of the coalition with regard to the effect of various requirements imposed by the certifying boards has on physicians. So the intent of this is to say the board is going to judge competence and character and issuing a license to physician or not are going to issue a license unless that applicant meets his or her burden and shows that he is both competent and has excellent character in order to receive a license in North Carolina, but our coalition agrees that the board should not hinge a decision only on whether that position is board certified. The only impact that this bill would be to say that the board can't use that if someone is not board certified, that can't be the only basis for denial. We would have we would have some other reason that suggest they lack confidence or character. Follow up, further discussion, further debate the motion before the committee by representative Jones, is favorable report to PCS on housing bill 543, on favorable to the original bill second by representative Hastings, all in favor say I, oppose no, our agenda complete we 're now adjourned