A BILL TO BE ENTITLED AN ACT TO FACILITATE ECONOMIC DEVELOPMENT WITHIN THE STATE. Enacted June 24, 2014. Effective June 24, 2014, except as otherwise provided.
Bill Summaries: H1031 (2013-2014 Session)
Summary date: Jun 24 2014 - View summary
Summary date: Jun 10 2014 - View summary
House amendments make the following changes to the 3rd edition.
Provides that the duties of the Economic Development Accountability & Standards Committee (Committee), established in this act, include a biennial audit of the records of the North Carolina nonprofit corporation with which the Department of Commerce has contracted under this section, by the Office of State Budget and Management, State Auditor, or internal auditors of the Department (was, by the Office of State Budget and Management).
Also makes an amendment regarding the composition of the 17-member nonprofit corporation's governing board. Directs the Governor, who appoints 8 members and the chair, to select appointed members so that two-ninths come from a development tier one area, two-ninths from a development tier two area, and no more than two members come from the same Collaboration for Prosperity Zone. Directs the Speaker of the House and the President Pro Tempore of the Senate, who appoint four members each, to select their appointed members so that one-fourth come from a development tier one area and one-fourth from a development tier two area, and no two members come from the same Collaboration for Prosperity Zone.
Provides that at least 25 percent of the funds raised by the nonprofit corporation from sources other than the state must be used for the benefit of or for salaried positions located in or working solely on development in development tier one or two areas, as defined in GS 143B-37.08.
Summary date: Jun 5 2014 - View summary
House amendments make the following changes to the 2nd edition:
Amendment # 1
Makes technical changes and corrects statutory references.
Clarifies that the Department of Commerce, DENR, DOT, the Community Colleges System Office, and the State Board of Education (previously, did not specify agencies) must report by January 1, 2015, regarding the establishment of Collaboration for Prosperity Zones, to the Senate Appropriations/Base Budget Committee and the House Appropriations Committee
Amendment # 2
Adds new mandatory contract term, which must be included in any contract entered into under GS 143B-431A, concerning public-private partnerships, requiring entities that receive gifts, contributions, items, or services for which fair market value exceeds $1,000 and fair market value was not paid, to publish within seven days of receiving the item, the entity it came from, the fair market value and a description of the item, along with the date and amount of any award previously given to the entity.
Amendment # 3
Makes a technical change to proposed GS 143B-431A(e)(5).
Amendment # 4
Amends GS 143B-431A(e)(11), a mandatory contract term concerning severance pay of the CEO or other officers of the nonprofit, clarifying that no state funds can be used for severance pay and further provides limitations for severance pay even from funds that are not state funds.
Amendment # 8
Amends GS 143B-431A(e)(4), deleting language that referred to the establishment of a code of ethics as part of a mandatory contract term. Deletes set out requirements that the code of ethics must address. Amends GS 143B-431A(h) concerning applicable laws, establishing that officers, employees, and members of the nonprofit are public servants and are subject to all the requirements of the State Ethics Act. Further provides that all officers, members of the board, and employees whose annual compensation is equal to or greater than $60,000 are subject to GS 138A-22, regarding statements of economic interest.
Amends GS 143B-431A(d)(3) to remove members of the governing board of the nonprofit from the provision concerning the amount of state funds that may be used for compensation. Provides that they can receive per diem and other allowances pursuant to GS 138-5.
Summary date: Jun 4 2014 - View summary
House committee substitute makes the following changes to the 1st edition.
Makes various changes to proposed GS 143B-431A concerning the purpose of contracting for economic development, deleting language that referred to the development of a long-range strategic plan for economic development through public and private means.
Amends the duties of the proposed Economic Development Accountability and Standards Committee, providing that it must have an audit, at least biennially, conducted by the Office of State Budget and Management, of the records of the NC nonprofit corporation that is contracted with the Department of Commerce (Commerce) to review financial documents, the performance, and the compliance of the corporation (previously, audits were to be completed by either the State Auditor or internal auditors of Commerce. Makes technical changes. Deletes language that set out retail, distribution, and logistics as areas that an appointee can have knowledge in and be qualified to serve on the Committee. No longer requires a tourism expert to be jointly recommended, allowing each organization to make a recommendation.
Amends the amount of state funds that can be used for the annual salary of employees or officers of the contracted nonprofit to not exceed the greater of $120,000 or the amount most recently established by the General Assembly in the current appropriations act (previously, could not exceed $120,000). Amends further limitations before state funds can be received by the nonprofit organization, providing that the non-profit must have or raised at least $250,000 (was, $10 million) from non-state funds to support its operations and functions.
Amends the mandatory contract terms, which must be included in any contract entered into under this new section, now providing for 15 mandatory contract terms, which include deletions from the previous edition, mandatory contract term additions, and various changes to the previous terms. Amends the provisions concerning the required reports, providing that they must include information regarding the anticipated jobs that are to result from the non-profit's efforts (previously, had to report on anticipated jobs and the jobs that actually resulted from its efforts). Requires that employee bonuses be based on overall job performance and not on a specific project lead. Provides that the required reports can include any other information as requested by Commerce. Amends the requirement that all nonprofit assets and funds be surrendered to the Department within 30 days of the termination of the contract to also require the funds to be surrendered upon dissolution. Deletes provision detailing how surrendered funds are to be used. Makes technical changes to the conflict-of-interest contracting clause, adding a new term to be used in this provision, subject person, meaning a board member, officer, or employee of the nonprofit corporation. Amends and expands the gift policy clause as well as the provisions concerning the requirement for a code of ethics. Amends the provision which previously limited the contract to no more than four years, now providing that the contract cannot be for longer than five, with extensions allowed in one-year increments for up to four times after no less than four-fifths of the original contract term has passed.
Deletes the following mandatory contract term provisions: (1) a requirement that the nonprofit maintain a website, with specified disclosures; (2) a provision encouraging the nonprofit to seek private funds from businesses and entities that will not seek economic development incentives; (3) a provision requiring the lending, awarding, or granting of private funds to be in a written agreement signed by the Board; and (4) a provision requiring contracting with the Office of State Budget and Management for performance review and verification. Enacts new mandatory contract term provisions that require the nonprofit to maintain a record containing information regarding the nonprofit's donors and to report such information. Also includes a new provision that provides the nonprofit cannot engage in the awarding of grants of the public or private funds the nonprofit holds as well as a new provision which details the funds that are to be raised from efforts and sources other than state funds, including at least $5.75 million during the term of the contract. Also provides that the limitation in GS 143C-6-8, concerning the availability of certain funds, applies to the nonprofit.
Requires that the report to be submitted to specified agencies by September 30 of each year must include information regarding gifts, contributions, or other items that were received for which fair market value was not paid. Requires approval by the Secretary to deviate from state policies on reimbursement. Deletes provision which provided that employees and officers of the nonprofit are public servants; deletes other provisions in regards to the employees as public servants.
Enacts new limitation on public funds, providing they cannot be used to hire a lobbyist.
Makes clarifying changes.
Amends GS 132-6(d), concerning the disclosure of public records, setting out limitations for when records of the nonprofits and businesses requesting funds are considered public records and subject to disclosure.
Amends provisions that direct Commerce to study and develop a plan for contracting with nonprofit corporations, deleting a requirement that Commerce must study and report on the annual average of metrics for the 10-year period preceding contracting for performance of the metric. Also reorganizes and includes new performance metrics that are required to be measured and reported on.
Provides that agencies must also report by January 1, 2015, regarding the establishment of Collaboration for Prosperity Zones to the Senate Appropriations/Base Budget Committee and the House Appropriations Committee (previously, were only required to report to the Joint Legislative Commission on Governmental Operations).
Requires that the specified reports concerning prosperity zones also be sent to the Senate Appropriations/Base Budget Committee and the House Appropriations Committee.
Deletes Part V, "Study Commission on Interagency Collaboration for Prosperity," from the act.
Establishes that it is the intent of the General Assembly to receive and review the reports regarding the creation of the Collaboration for Prosperity Zones to further address nine topics, including cross-training employees, consolidating programs or services, and studying the grouping of counties within the zones.
Makes conforming changes.
Summary date: May 16 2014 - View summary
I. Enacts new GS 143B-431A, Department of Commerce - contracting of functions, providing that the purpose of this new section is to establish a framework whereby the Department of Commerce (Department) can support a nonprofit corporation, through financial and other means, that will render advisory, research, and recruiting recommendations concerning incentives or grants for jobs and business development and marketing as well as consultation on the development of a long-range strategic plan for economic development, through public and private means.
Authorizes the Department to contract with a NC nonprofit to perform one or more of the Department's functions, powers, duties, or obligations. Sets out the functions that the Department cannot contract for with the nonprofits, including the administration of unemployment insurance and functions set forth in GS 143B-431(a)(2). Establishes the Economic Development Accountabiltiy & Standards Committee (Committee) to provide oversight over the newly contracted services. Provides the Committee will have seven members; sets out who will serve as the seven members. Provides that the Committee must meet at least quarterly and sets out the duties of the Committee, including receiving, reviewing, and referring complaints and requesting enforcement of the contract by the Attorney General.
Sets out requirements that must be met prior to contracting with any NC nonprofit including specific requirements concerning the makeup and diversity of the nonprofit's governing board and a requirement that any amount of state funds that can be used for the annual salary of any one employee of the nonprofit cannot exceed currently $120,000. Sets out duties of the governing board. Requires that the nonprofit have received $10 million from fundraising efforts to support operations and functions of the corporation. Sets out 12 mandatory contract terms, which must be included in any contract entered into under this new section, including provisions requiring the nonprofit to provide copies of the nonprofit's annual audited financial statements to specified parties, a requirement that all nonprofit assets and funds be surrendered to the Department within 30 days of the termination of the contract, and provision limiting the contract to no more than four years, with extensions allowed in speicified circumstances.
Requires the Department, by September 30 of each year, to submit a report on the contracted performances to the Joint Legislative Commission on Governmental Operations, the Joint Legislative Economic Development and Global Engagement Oversight Committee, and the Fiscal Research Division. Sets out what the report must contain. Requires the contracting nonprofit to use interest earned on state funds for the same purposes as the principal funds, and applies the state's travel and personnel policies to the nonprofit's officers, employee, or member expenses. Provides that the contracted nonprofit is subject to the public information requirements of GS Chapter 132 and Chapter GS 143. States that the nonprofit's officers, employees, and members are not state employees and are not entitled to state benefits.
Repeals GS 143B-434, concerning the Economic Development Board. Amends GS 143B-434.01, concerning the Comprehensive Strategic Economic Development Plan, adding and defining the term "Secretary" for use in the section, meaning the Secretary of Commerce. Provides that the Secretary is tasked with preparing the Comprehensive Strategic Economic Development Plan, reviewing and updating the existing plan on or before April 1 of each year (previously, the Board was tasked with preparing the plan). Makes conforming and clarifying changes to the section in response to the Secretary's new assigned duties. Repeals GS 143B-437.03, concerning the allocation of economic development responsibilities. Above changes effective July 1, 2014.
Directs the Department to study and develop a plan for contracting with one or more NC nonprofit corporations for the performance of economic development and tourism marketing activities and duties. Requires the Department to consult with various stakeholders and consider the benefits and costs of implementing such a plan. Requires a schedule for implementation of contracting services to be developed. Also requires a report to be made to the Joint Legislative Commission on Governmental Operations no later than December 1, 2014.
Amends GS 126-5(c2), providing a new subdivision concerning those subject to the provisions of the state personnel system, providing that officers, employees, and members of a NC nonprofit that contracts with the Department pursuant to GS 143B-431A are not subject to the provisions of GS Chapter 126. Liaisons to the Collaboration for Prosperity Zones for the Department, as well as the Department of Environment and Natural Resources and Department of Transportation are also exempt from the Chapter.
Repeals Section 15.7A of SL 2013-360, concerning Department flexibility to reorganize to establish a public-private partnership.
All above changes, unless otherwise noted, are effective July 1, 2014.
II. Renames the Department's North Carolina Board of Science and Technology to North Caroline Board of Science, Technology, and Innovations. Amends the board's duties and powers to include advising and making recommendations to any NC nonprofit with which the Department contracts pursuant to GS 143B-431A on the role of science, technology, and innovation. Provides new requirements in regards to the makeup of the board's members, providing that the board will have 23 (was, 17) members, requiring one of the members from the components of the University of North Carolina to be from a historically black college or university, one member to be from the NC Community College System, one member representing K-12 public education, and an additional seven at-large members. Makes conforming and clarifying changes.
III. Enacts new GS 143B-28.1, to establish eight permanent, geographically uniform zones to, among other objectives, (1) facilitate collaborative and coordinated planning and use of resources; (2) improve cooperation among governmental and nonprofit entities at the local and regional level; and (3) establish, to the extent that it is feasible to do so, one-stop sources in each region for citizens and businesses seeking state services at a regional level. Divides the state into eight zones to create collaboration for prosperity zones. Identifies the eight zones as follows and specifies the counties included in each zone: (1) Western Region, (2) Northwest Region, (3) Southwest Region, (4) Piedmont-Triad (Central) Region, (5) North Central Region, (6) Sandhills (South Central) Region, (7) Northeast Region, and (8) Southeast Region. Requires agencies to report to the Joint Legislative Commission on Governmental Operations and the Study Commission on Collaboration for Prosperity by January 1, 2015, as to how they plan to establish the zones. Effective July 1, 2014. Effective April 1, 2015, amends GS 115C-65 to require that the state's ight education districts be composed to match the composition of the zones. Makes a conforming deletion of the current makeup of the districts. Provides that members of the Board of Education appointed by the Governor and confirmed by the General Assembly before 2015 with terms ending in 2017, 2019, and 2021 are designated as the appointees of the specified districts for the remainder of the member's term.
IV. Provides a deadline of January 1, 2015, for the Department, DENR, and DOT to physically maintain co-located liaison personnel within each zone and for the Community College System Office to designate a liaison in each zone. Also requires the State Board of Education to designate at least one representative from a local district or the Department of Public Instruction to serve as a liaison in each zone by January 1, 2015. Specifies duties of the liaisons. Requires reports from these entities to specified offices, committees, and commissions by January 1, 2015, on the establishemnt of the liaison and their assigned activies, and by April 1, 2015, on the liaisons' activiites. Specifies additional information that must be included in the report. Effective July 1, 2014, and expires July 1, 2018.
V. Creates the eight-member Study Commission on Interagency Collaboration for Prosperity (Commission) to review reports submitted by the following departments: Commerce, DENR, DOT, the Community College System, and the State Board of Education. Provides that the Commission may study and make recommendations to the 2015 Regular Session of the General Assembly on issues related to enhancing inter-agency collaboration, consolidating programs to streamline services, requiring the establishment of inter-agency one-stop shops in each zone, and reducing barriers faced by citizens and businesses in accessing services. Provides that the Commission terminates upon the filing of its report or on July 1, 2015, whichever is later.
Summary date: May 14 2014 - View summary
To be summarized.