Ladies and gentlemen let's have the Finance Committee come to order. first step is to introduce our pages who we much appreciate being here. If I mispronounce your name please correct me. Megan Evan sir Senator Jackson, Grey Goodson, Senator Brown, Christian Hughes, Senator Tucker Jersey Naren, representative Rebin, Walter Maridy, Senator Brown, Will Rodgers Senator Krawiec. Madison Tayler, Senator Tillman. Elizabeth Odano[sp?], Senator Apodaca. Kendall Hunt Senator Burger and in the west Senator Meredith good thank you for being here, and I hope you visit is pleasurable and knowledgeable. I'd like to also to recognize two guests today Chris Heirs, Executive Director Public Staff. Chris delighted to have you with us and Ed Finley, Chairman of the Utility Commission, thanks very much for being here today we might need your thoughts on one of the bills. Okay, let's go ahead and take on the first bill and that would be House Bill 307 Zeblon Charter, Representative Malone. Representative Malone welcome. We're delighted to have you here we just want to give you a senate welcome. Thank you Mr. Chairman. Good afternoon everybody, 307 is a local bill for Zeblon North Carolina Reading District House 35. Basically what it does is, to put it this way 1989 they got themselves in a trial change so they could collect funds for several different purposes being roads and drainage projects, open space projects and recreational projects. now they were at the time also had some restrictions they had to get something done if they were doing it by themselves in six years time with somebody else 10 years time and it could only use 50% of their money in the fund for any given project, so what we're doing is we're giving them more flexibility we're giving them the full 10 years and we're telling them they can use their money as they see fit. That's it ask for your vote. Alright Senator Barefoot. Thank you Mr. Chairman at the appropriate time I just like to move for a favorable report. Alright members of the committee you have House Bill 307 in charter used of certain fees before you and we have a motion from Senator Barefoot for a favorable report on House Bill 307 any questions, or comments? Seeing non all in favor please say Aye, opposed No. Ayes have it and Senator Barefoot will be taking on 307 on the senate floor? Thank you, nice to have you with us. Alright and now we will talk about to house bill 356 and see you see changes. Representative Arp, welcome to the senate finance delighted to have you here Thank Mr. Chairman, Thank you sir. Would you be kind enough to present 356 and any staff that you need would be the other assist you. Thank you. Thank you Mr. Chairman what this bill does, is establishing the regulatory fee for the utilities commission. Last year, last session when we reduced the regulatory fee for competitive telephone company over the next two years because they were no longer regulated, what this does was created reduction in the fee at that time we promised we would go back and reset the fee to maintain the revenue for the utility commission. And that's what this bill does. It's establish with regulatory fee at 0.148% which is actually the current level of revenue the lake comes out but it's the same level revenue because you have less participation of the companies involved and quite frankly you have passed this in the budget that you passed, this is identical to section 15, 16 in house bill 97 which you passed on June I think alright senator Tillman questions Mrs. Chairman looking on [xx] and Representative Bob will stand feel as broke out possibly that stage is a good fortune on the next page, is just no longer applicable? Tell me about that. I do believe is no longer Africa ball it's a non on black hill language because
it's non competitive aspect of those Telmor comments. Miss Fennel would you help us if possible, sure I guess. Representative Albert is correct, it also takes out language that require detailed commission to report to the general assembly each year on way it should B, since the raid is now seven statute they did not to do that. However will point out that as with every other appropriation the funds can only be spent when they are appropriated by the general assembly, so the general assembly will still have the ability to look at this other year, but it strikes requirements that the commission reports back to the general assembly and what the way it should into you. Follow up. One follow up Mr. Chairman. Senator Tillman. The rate is now set in the bill senator that's you, and that can only be changed by our action in the legislature that in other word it stays this util we take action to change it. I 'm I right? Chef. Yes sir, there is a opportunity if you'd look on page three of the bill, if this funds are not sufficient to cover the amounts that the general assembly has to determine the commission in the public staff would spend for the following year they may raise the ledge fee upto 0.175%. So there is the ability for the commission to raise the fee in small amount out if the funds coming in actually aren't sufficient to cover the expenses. Any all said senator Telmen, Yes sir. Alright. Senator Markisic This be question of staff as well I know there is language here indicating that they be authorized to maintain a reserve the 50% of their operating budgets now that's 50% threshold is that current the same threshold or is that a new provision that kicking in with these particular bill. Yes sir the prior to 2009 they were allowed to have up to a 100% reserve and the 2009 budget on this fund along with many other funds were swept and when those funds were swept they put a 20% reserve cap on all of this funds this raises there reserve back up to 50% to allow them have a better cash flow. This fees actually will be paid in a quarterly basis and so this allows them to meet their cash flow at the end of each quarter. Rep. Arp One problem that they were having was because of quarterly and cultural issues and they are born form other agencies and so forth and now with the move they are longer have that ability quite not the there's physical policy, what this does is allow them to have six month flatterer care and adjust, is very similar to what the current banking commissioner has marveled a lot for that and we still have oversight in the sense that we set the fee, but there is an adjustment that they can set. Quick followup. Followup, Senator Mikin the 50% threshold makes sense seems to me, I mean it is like will be accredible that is reasonable results in form of acrelypter I can't say we would like to recover a lot of mercues again as often as it can so the fee set now used to be quarterly well it now goes to what basis will be paid on a, remain quarterly as there're different interval that's been specified. Yes, how it now? It's still quarterly, but what this does, is, this also has a take down mecharnism once they raise the gap, they have to reduce the rate so that they don't go over that gap as well but the clerk is still its quarterly but the reserves is for six months which is basically two payments on [xx]. And last follow up. Follow up, how often particulary be recomputed in terms of what that rate would be I mean the rate to be specified within some possibility for them to increase it? How often do they re-assess what there cash flow needs requirements might be? Okay, Miss Phanel will help with that question. Yes the general said he can come in anytime and change it but the commission only has the authority to change it once a year. Once a year? Once a year. They couldn't do it every quarterly, it can only be done once a year. Thank you. Senator McKissick you are all set? clarification and at the appropriate time move for a favorable report. Alright, I've got a favorable report from Senator McKissick on House Bill 356 each member of the committee with additional question any comments from Mr. Phinly? Okay members of the committee you've very report motion favor report on house bill 356 NCUC like the changes seeing no additional comments or questions all in favor please say aye opposed nays, ayes have it. I would be remorseful if I did not introduce a sergeant at arms Jonah Blake, Jimmie Hamilton, Steve Wilson and Hall Rouch thank you for helping make this move Finance committee move forward, members of the committee that conclude the business for today, there will be a believe a Finance
committee tomorrow take up picking up some time sensitive issues and you'll receive notification of it plus the list of the bills that will be included in it and will shall be dealing with the indexation bill and time sensitive and so seeing no additional comments the finance committee is adjourned.