Bill Summary for H 1031 (2013-2014)

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Summary date: 

May 16 2014

Bill Information:

View NCGA Bill Details2013-2014 Session
House Bill 1031 (Public) Filed Wednesday, May 14, 2014
Intro. by Murry.

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Bill 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.