NC ECON. DEV. PARTNERSHIP MODIFICATIONS.

View NCGA Bill Details2013-2014 Session
Senate Bill 743 (Public) Filed Wednesday, May 14, 2014
A BILL TO BE ENTITLED AN ACT TO FACILITATE ECONOMIC DEVELOPMENT WITHIN THE STATE.
Intro. by Brown.

Status: Ref To Com On Finance (House Action) (Jun 11 2014)
S 743

Bill Summaries:

  • Summary date: Jun 5 2014 - More information

    Senate amendments make the following changes to the 3rd edition:

    Amendment #1

    Amends the effective date of the act, providing that except as provided in Part VI of the act, nothing in the act can be construed to obligate the General Assembly to appropriate funds for the implementation of the act (previously, did not mention Part VI of the act).

    Amendment #2

    Amends proposed GS 143B-437.02A, Film and Entertainment Grant Fund, to replace any occurrence of the word "rules" with "guidelines". Enacts new GS 143B-437.02A(g), requiring the Department of Commerce to develop guidelines in regards to the administration of the Film and Entertainment Grant Fund and the selection process for distributing such grants. Requires the Department of Commerce to publish any proposed guidelines on the Department's website at least 20 days before the effective date. Also requires the Department of Commerce to accept oral and written comments on the proposed guideline during the 15 busines days beginning on the first day that the Department has completed these notifications and publications. Makes a technical change.

    Amends GS 150B-1(d) to provide that the Department of Commerce, in administering the grant program, are exempt from the rulemaking provisions and requirements of Article 2A of GS Chapter 150B.

    Makes clarifying changes to the appropriations provision transferring $10 million to the Film and Entertainment Grant Fund from the Repairs and Renovations Reserve, to clarify that it is from funds appropriated to that reserve for the 2014-15 fiscal year.

    Makes technical and conforming changes.

    Deletes language that required a $1,000 application fee in order to apply for a grant from the Film and Entertainment Grant Fund.

    Amendment #3

    Requires that the study undertaken by the Department of Commerce (Department) to develop a plan for contracting with a North Carolina nonprofit corporation for the performance of economic development activities and duties of the Department, must include an analysis of all compensation levels for employees, officers, and other personnel of public-private partnerships for economic development activities in other states to aid in determining and reporting on average and appropriate levels of compensation.

    Amendment #4

    Makes a technical correction.


  • Summary date: Jun 5 2014 - More information

    Senate committee substitute makes the following changes to the 2nd edition:

    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.

    Enacts new GS 143B-437.02A, titled The Film and Entertainment Grant Fund, which creates in the Department of Commerce this special non-reverting fund to be used to encourage and develop the tv and film-making industry in North Carolina.  Sets out five provisions that are to be included in any rules regarding the awarding of grants, including certain requirements on receiving grants in relation to total qualifying expenses and that the funds are not provided to more than one production company for a single production. Sets out seven types of productions that may not receive a grant. Gives priority to productions reasonably anticipated to maximize the benefit to the state.

    Sets out nine terms and definitions to be used in the section, including highly compensated individual and qualifying expenses.

    Establishes procedures for a production company to apply for a grant of funds, which includes an application, under oath, to the Secretary of Commerce (Secretary) and  an application fee of $1,000. Directs the Secretary to work with the NC Film Office to adopt rules and processes for the verification of qualifying expenses of production companies. Provides that no grant funds can be released before qualifying expenses are verified and substantiated. Sets out three requirements for the process of substantiation, including requiring the production company to submit all qualifying expenses with documentation on net expenditures for equipment and other personal property and a compliance audit at the production company's expense.

    Requires the Department of Commerce to report four categories of information to the Department of Revenue, which in turn the Department of Revenue must include in the economic incentives report. This information includes the location of sites used in a production for which a grant was awarded and the total cost of the grants awarded.

    Also requires a production company to notify the Division of Tourism, Film, and Sports Development of their intent to apply.

    Appropriates $10 million from the Repairs and Renovations Reserve to the Film and Entertainment Grant Fund, nonrecurring, for the 2014-15 fiscal year and $10 million from the Savings Reserve to the Film and Entertainment Grant Fund, also nonrecurring, for the 2014-15 fiscal year.

    Provisions on the fund are effective January 1, 2015, expiring July 1, 2020. Provides that the Secretary of Commerce cannot award a grant for any qualifying expense for which a taxpayer received a tax credit under GS 105-130.47 or 105-151.29.


  • Summary date: Jun 4 2014 - More information

    Senate 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 annually, conducted by the State Auditor, 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.

    Makes technical changes and corrects statutory references.

    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 nonprofit 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 nonprofit'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 non-profit 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 non-profit 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.

    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 (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 - More information

    This bill is identical to H 1031, filed 5/14/14.

    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.


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