Bill Summary for S 743 (2013-2014)

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Summary date: 

Jun 4 2014

Bill Information:

View NCGA Bill Details2013-2014 Session
Senate Bill 743 (Public) Filed Wednesday, May 14, 2014
Intro. by Brown.

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Bill summary

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.