GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1993

H	2 

HOUSE BILL 294
Committee Substitute Favorable 4/12/93

Short Title:  GPAC/Economic Development.	(Public)
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Sponsors:
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Referred to:  
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February 25, 1993

A BILL TO BE ENTITLED
AN ACT TO IMPLEMENT THE RECOMMENDATIONS OF THE GOVERNMENT PERFORMANCE AUDIT COMMITTEE REGARDING ECONOMIC DEVELOPMENT.
The General Assembly of North Carolina enacts:
––-ECONOMIC DEV. COUNCIL/PLAN.
Section 1. (a)	The General Assembly finds that:
(1)	The Department of Commerce's Economic Development Board is a 26-member advisory board charged, in part, with advising the Secretary of Commerce on formulating a program for the economic development of the State.
(2)	The Economic Development Board has published a strategic business plan for quality growth, that sets out a series of strategies and initiatives to be taken by the State in economic development.
(3)	North Carolina has received wide recognition for its economic development successes, although it has some development weaknesses.
(4)	The Economic Development Board of the Department of Commerce, the Governor's Commission on Workforce Preparedness, the Rural Economic Development Center, and other organizations and agencies have developed strategic plans related to economic development.
(5)	The economic development policy currently stated in G.S. 143B-428 and the resulting plan developed by the Economic Development Board are lacking key elements necessary for a truly comprehensive and effective economic development plan.
(6)	North Carolina needs a statewide economic development plan that would do all of the following:
a.	Identify the roles and responsibilities of the many diverse agencies and organizations involved in economic development.
b.	Provide measurable objectives or performance indicators to assess the State's economic development progress.
c.	Set out broad vision and mission statements and general goals and policies of the State with regard to economic development.
d.	Reflect the input of all parties involved in economic development as well as the input of the public.
(7)	The lack of an integrated, comprehensive statewide economic development plan creates several inefficiencies as follows:
a.	Agencies involved in economic development have little direction regarding the types of programs and priorities they should focus on.
b.	The General Assembly has limited guidance as to which economic development appropriations are the most effective.
c.	There are no explicit performance indicators against which agencies' effectiveness can be measured.
d.	Various agencies may be duplicating one another's programs or even serving at cross purposes.
(8)	The Economic Development Board should be replaced by an Economic Development Council with additional responsibility for planning and authority to recommend economic development policy to the Secretary of Commerce, the Governor, and the General Assembly on a variety of issues.  The Department of Commerce, through its Economic Development Council, should be the lead agency in coordinating all affected parties in developing and updating an integrated, comprehensive economic development plan.
(b)	G.S. 143B-434 reads as rewritten:
"§ 143B-434.  Economic Development Council – creation, duties, membership.
	(a)	Creation and Duties. –  There is created within the Department of Commerce an Economic Development Council.  The Council shall have the following duties:
(1)	To provide economic and community development planning for the State.
(2)	To recommend economic development policy to the Secretary of Commerce, the General Assembly, and the Governor.  The recommendations may cover the following issues as well as any other economic development policy issues:
a.	Use of tax abatements and other incentives to motivate economic development.
b.	Definition of which specific activities and programs should be considered economic development activities and programs for the purpose of receiving State appropriations.
c.	The role of institutions of higher education in economic development.
d.	The use of State funds to leverage private nonprofit economic development initiatives.
(3)	To recommend annually to the Governor biennial and annual appropriations for economic development programs.
(4)	To develop and update annually a statewide economic development plan, as provided in G.S. 143B-434.1.
		The Council shall meet at least quarterly at the call of its chair or the Secretary. Each quarter the Secretary shall report to the Council on the program and progress of this State's economic development.
(b)	Membership. –  The Economic Development Council shall consist of 30 members.  The Secretary of Commerce shall serve ex officio as a member and as the secretary of the Economic Development Council.  Two members of the House of Representatives appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives, two members of the Senate appointed by the General Assembly upon the recommendation of the President of the Senate, the Secretary of State, the President of The University of North Carolina and the President of the North Carolina System of Community Colleges shall serve as members of the Council.  The Governor shall appoint the remaining 22 members of the Council, provided that one of those appointees shall be a representative of a nonprofit organization involved in economic development.  The Governor shall designate a chair and a vice-chair from among the members of the Council.
The initial appointments to the Council shall be for terms beginning July 1, 1993.  Of the initial appointments made by the Governor, eight terms shall be designated to expire July 1, 1995; the remaining terms shall expire July 1, 1997.  Of the initial appointments made by the General Assembly, one term made upon the recommendation of the Speaker of the House of Representatives and one term made upon the recommendation of the President of the Senate shall be designated to expire on July 1, 1995; the remaining terms shall expire July 1, 1997.  Thereafter, all appointments shall be for a term of four years.
The Governor shall make a replacement appointment to serve for the unexpired term in the case of a vacancy, provided that a  vacancy in a term appointed by the General Assembly shall be filled in accordance with G.S. 120-122.
	The members of the Economic Development Council shall receive per diem and necessary travel and subsistence expenses payable to members of State Boards and agencies generally pursuant to G.S. 138-5 and 138-6, as the case may be. The members of the Economic Development Council who are members of the General Assembly shall not receive per diem but shall receive necessary travel and subsistence expenses at rates prescribed by G.S. 120-3.1.
(c)	Staff. – Clerical and professional staff support to the Economic Development Council shall be provided by an Interagency Council composed of representatives of the following State agencies:
(1)	The Department of Administration.
(2)	The Department of Agriculture.
(3)	The Employment Security Commission.
(4)	The Department of Labor.
(5)	The Department of Transportation.
The Department of Commerce shall have the responsibility for coordinating the activities and efforts of the Interagency Council.
				."
(c)	G.S. 143B-433(a) reads as rewritten:
"(a)	(1)	The North Carolina Alcoholic Beverage Control Commission,
(2)	The North Carolina Utilities Commission,
(3)	The Employment Security Commission,
(4)	The North Carolina Industrial Commission,
(5)	State Banking Commission,
(6)	Savings and Loan Association Division,
(7)	The State Savings Institutions Commission,
(8)	Credit Union Commission,
(9)	The North Carolina Milk Commission,
(10)	The North Carolina Mutual Burial Association Commission,
(11)	North Carolina Cemetery Commission,
(12)	The North Carolina Rural Electrification Authority,
(13)	Repealed by Session Laws 1985, c. 757, s. 179(d),
(14)	North Carolina Science and Technology Research Center,
(15)	The North Carolina State Ports Authority,
(16)	North Carolina National Park, Parkway and Forests Development Council,
(17)	Economic Development Council,
(18)	Labor Force Development Council,
(19)	Energy Policy Council,
(20)	Energy Division,
(21)	Navigation and Pilotage Commissions established by Chapter 76 of the General Statutes.
	."
(d)	Beginning July 1, 1993, the Department of Commerce shall reallocate to the Economic Development Council created in this section funds and resources previously allocated to the Economic Development Board.
(e)  Part 2 of Article 10 of Chapter 143B of the General Statutes is amended by adding a new section to read:
"§ 143B-434.1.  Statewide economic development plan.
(a)	Council to Prepare Plan. – The Economic Development Council shall prepare a statewide economic development plan by April 1, 1994.  The Council shall review and update this plan by April 1 of each year.  The original statewide economic development plan shall cover a period of several years and each annual update shall extend the time frame by one year so that a multiyear plan is always in effect.  The Council shall provide copies of the plan and each annual update to the Governor and the Joint Legislative Commission on Governmental Operations.  The statewide economic development plan shall encompass all of the components set out in this section.
(b)	Public and Private Input. – At each stage as it develops and updates the plan, the Council shall solicit input from all parties involved in economic development in North Carolina, including:
(1)	Each of the programs and organizations that, for State budget purposes, identify economic development as one of their global goals.
(2)	Local economic development departments and regional economic development organizations.
(3)	The Board of Governors of The University of North Carolina.
The Council shall also hold public hearings across the State to solicit public input on economic development before the initial statewide economic development plan is completed.  The Council shall hold additional public hearings from time to time to solicit public input regarding economic development activities.
Each component of the plan shall be based on this broad input and, to the extent possible, upon a consensus among all affected parties.  The Council shall coordinate its planning process with any State capital development planning efforts affecting State infrastructure such as roads and water and sewer facilities.
(c)	Needs Assessment. – The first step in developing the statewide economic development plan shall be to develop a needs assessment based on the input from economic development parties and the public and on information about the economic environment in North Carolina.  To prepare the assessment, the Council shall gather the following information.  Thereafter, the information shall be updated periodically.
(1)	Economic and demographic data on North Carolina by State, region, and county including population, population projections, employment and employment projections, income, poverty migration patterns, and other similar data.
(2)	The cost of doing business in North Carolina and other competing states, as it may affect decisions by firms to locate in this State.
(3)	Competitive assets within the State and by region and county, including infrastructure, tourist assets, natural resources, labor, educational and research resources, and transportation.
(4)	Economic and industrial changes in competitive states by region, including new plant location information.
(5)	Other information relating to economic development such as regulatory or legal matters and social considerations.
(d)	Vision and Mission Statements. – The Council shall develop a vision statement for economic development that would describe the preferred future for North Carolina and what North Carolina would be like if all economic development efforts were successful.  The Council shall then develop a mission statement that outlines the basic purpose of each of North Carolina's economic development programs.  Because special purpose nonprofits are uniquely situated to conduct the entrepreneurial and high-risk activity of investing in and supporting new business creation in the State, they should be assigned a dominant role in this key component of economic development activity.
(e)	Goals and Objectives. – The Council shall next identify the five to seven most important issues or problems that North Carolina must address regarding economic development.  For each issue, the Council shall develop specific goals and strategies or approaches to achieving each goal.  Goals shall be long-range and shall address both economically depressed areas and more prosperous areas.
So that the progress of North Carolina's economic development efforts can be monitored, the Council shall set objectives for each goal that allow measurement of progress toward the goal.  Objectives should be quantifiable and time-specific in order to serve as performance indicators.
(f)	Implementation Plan. – Based upon all of the foregoing steps, the Council shall establish an implementation plan assigning to the appropriate parties specific responsibilities for meeting measurable objectives.  The implementation plan shall contain all necessary elements so that it may be used as a means to monitor performance, guide appropriations, and evaluate the outcomes of the parties involved in economic development in the State."
(f)  The Department of Commerce shall establish a planning unit within its executive offices to support the Economic Development Council's ongoing role in economic and community development planning.  The unit should consist of two professional staff plus necessary support staff.  The planning unit shall assist the Council in coordinating the planning process, monitoring and updating the plan, and collecting and analyzing the data necessary for planning.
(g)  There is appropriated from the General Fund to the Department of Commerce the sum of three hundred thousand dollars ($300,000) for the 1993-94 fiscal year and the sum of three hundred thousand dollars ($300,000) for the 1994-95 fiscal year for the Economic Development Council created in this section.  It is the intent of the General Assembly that this will be a continuing appropriation.
(h)  This section becomes effective July 1, 1993.  The terms of all current members of the Economic Development Board shall expire July 1, 1993.
––-DEVELOPMENT PERFORMANCE INDICATORS.
Sec. 2. (a)	The General Assembly finds that:
(1)	The term "economic development" encompasses all activities conducted for the express purpose of increasing and maintaining the economic vitality of North Carolina, including industrial and business recruiting, business retention, facilitating business creation, providing small business assistance, job training and workforce preparedness programs, and investing in infrastructure, both physical (roads, utilities, etc.) and technological (fiber-optics networks and other information system links).
(2)	State General Fund expenditures for the 1991-92 fiscal year for economic development were approximately eighty-four million dollars ($84,000,000).
(3)	This eighty-four million dollar ($84,000,000) expenditure on economic development was allocated among 40 different State and State-associated programs and entities, which can be grouped into five broad categories:
a.	Nonprofit agencies.
b.	The Department of Community Colleges.
c.	The Department of Commerce.
d.	Other State departments, including the Department of Agriculture, the Business Licensing Office of the Department of the Secretary of State, the Department of Administration, and the Department of Environment, Health, and Natural Resources.
e.	The University of North Carolina.
(4)	The results of State economic development activities are not effectively monitored and evaluated because, although the State employs several conventional methods of ensuring accountability of agencies involved in economic development (such as budgets, department plans, and internal audits), these accountability measures focus on inputs or on programs and budget levels, rather than on outcomes–the results of their efforts.
(5)	Most State agencies involved in economic development activities have not yet designed and implemented meaningful measures to evaluate and report on performance; as a result, the General Assembly has only a limited ability to evaluate the outcome of its significant investments in economic development.
(6)	To implement a truly integrated approach to economic development, each key agency must be accountable for its contribution to meeting the overall economic development goals of the State; performance indicators would provide an effective and appropriate means to assure this accountability on a regular basis.
(7)	The General Assembly should base its economic development budget allocations on outcomes, as measured by performance indicators.
(b)	Each State agency involved in economic development shall develop, in conjunction with the Office of State Budget and Management, performance indicators that are appropriate and measurable criteria, including criteria that each agency can influence and criteria based on baseline data and reasonable recommendations.  The performance indicators should articulate specific, measurable results for each agency and should be comprehensive, so that the General Assembly may base each agency's continued economic development appropriation on its effectiveness as measured by the performance indicators.
(c)	This section becomes effective July 1, 1993.
––-ECONOMIC RESPONSIBILITY.
Sec. 3. (a)	The General Assembly finds that:
(1)	The term "economic development" encompasses all activities conducted for the express purpose of increasing and maintaining the economic vitality of North Carolina, including industrial and business recruiting, business retention, facilitating business creation, providing small business assistance, job training and workforce preparedness programs, and investing in infrastructure, both physical (roads, utilities, etc.) and technological (fiber-optics networks and other information system links).
(2)	State General Fund expenditures for the 1991-92 fiscal year for economic development were approximately eighty-four million dollars ($84,000,000).
(3)	This eighty-four million dollar ($84,000,000) expenditure on economic development was allocated among 40 different State and State-associated programs and entities, which can be grouped into five broad categories:
a.	Nonprofit agencies.
b.	The Department of Community Colleges.
c.	The Department of Commerce.
d.	Other State departments, including the Department of Agriculture, the Business Licensing Office of the Department of the  Secretary of State, the Department of Administration, and the Department of Environment, Health, and Natural Resources.
e.	The University of North Carolina.
(4)	Thus, State economic development activity is highly fragmented; this fragmentation and lack of integration results in the potential for inadvertent duplication as well as lost opportunities for synergy and collaboration.
(5)	Each key economic development player identified above makes a unique and significant contribution to the State's overall economic development program.
(6)	To maximize the return on North Carolina's investment in economic development, each of these key players must focus on its strengths, rather than diffusing its efforts across several economic development strategies.
(b)	Part 2 of Article 10 of Chapter 143B of the General Statutes is amended by adding a new section to read:
"§ 143B-437C.  Allocation of economic development responsibilities.
The Department of Commerce shall coordinate economic development efforts among the various agencies and entities that receive economic development appropriations and shall recommend to the Governor and to the General Assembly the assignment of key responsibilities for different aspects of economic development within the following framework:
(1)	The Department of Commerce shall take primary responsibility for recruitment, retention, and expansion of industry and tourism.
(2)	The Department of Agriculture shall take primary responsibility for recruitment, retention, and expansion of agribusiness industry, in support of the Department of Commerce.
(3)	The Department of Community Colleges shall take primary responsibility for implementation of worker training programs.
(4)	The special purpose nonprofit organizations funded by the General Assembly for economic development activities shall take primary responsibility for facilitating business creation through financing, education, or other support.
The Economic Development Council created in G.S. 143B-434 shall recommend resource allocation and planning designed to encourage each agency to focus on its area of primary responsibility and not diffuse its resources by conducting activities assigned to other agencies."
(c)	This section is effective upon ratification.
––-REVIEW FUTURE DEVELOPMENT NONPROFITS.
Sec. 4. (a)	The General Assembly finds that:
(1)	The General Assembly has established, directly or indirectly, the following four special purpose nonprofit agencies to conduct economic development activities:
a.	The North Carolina Biotechnology Center.
b.	The MCNC (Microelectronics Center of North Carolina).
c.	The Rural Economic Development Center, Inc.
d.	The Technological Development Authority, Inc.
(2)	The mission of each of these nonprofits is as follows:
a.	The mission of the Biotechnology Center is to provide long-term economic benefit to North Carolina through support of biotechnology research, development, and commercialization statewide.
b.	The mission of the MCNC is to accelerate the use of emerging electronics technologies through innovation and market-driven applications that improve quality of life.
c.	The mission of the Rural Economic Development Center is to develop and advocate innovative strategies to help stimulate economic growth and job creation throughout the State's rural areas.
d.	The mission of the Technological Development Authority is to increase the rate at which new jobs are created in all regions of the State, by stimulating the development of existing and new small businesses.
(3)	In the 1991-92 fiscal year, these four nonprofits expended almost thirty million dollars ($30,000,000) in General Fund revenues justified in the budget process as economic development.
(4)	The use of nonprofits as a mechanism for State-initiated economic development is unusual but not unique among southeastern states.
(5)	Each of these special purpose nonprofits has demonstrated success in its respective area of focus and, as a group, they have contributed significantly to North Carolina's reputation as a State committed to innovative, technology-based research and development.
(6)	The nonprofit status of these entities allows them to use State dollars to leverage private investments, serve as an independent and objective liaison among public and private entities, and conduct objective, nonpartisan research.
(7)	For these reasons, the State should continue to use nonprofits to deliver economic development services.
(8)	However, legislation establishing nonprofits for economic development has not always specified the mission of the nonprofit or the outcomes it is supposed to attain; future legislation funding nonprofits should specify their mission and desired outcomes and should provide for a periodic, comprehensive review of the entity.
(b)	It is the intent of the General Assembly that any future legislation establishing or funding a new nonprofit agency to conduct economic development activities will stipulate clearly the mission and purposes of the agency and will provide for periodic, comprehensive review of the agency.
(c)	This section is effective upon ratification.
––-BIOTECH MICROELECTRONICS REC.
Sec. 5. (a)	The General Assembly finds that:
(1)	The General Assembly has established, directly or indirectly, the following four special purpose nonprofit agencies to conduct economic development activities:
a.	The North Carolina Biotechnology Center.
b.	The MCNC (Microelectronics Center of North Carolina).
c.	The Rural Economic Development Center, Inc.
d.	The Technological Development Authority, Inc.
(2)	The mission of each of these nonprofits is as follows:
a.	The mission of the Biotechnology Center is to provide long-term economic benefit to North Carolina through support of biotechnology research, development, and commercialization statewide.
b.	The mission of the MCNC is to accelerate the use of emerging electronics technologies through innovation and market-driven applications that improve quality of life.
c.	The mission of the Rural Economic Development Center is to develop and advocate innovative strategies to help stimulate economic growth and job creation throughout the State's rural areas.
d.	The mission of the Technological Development Authority is to increase the rate at which new jobs are created in all regions of the State, by stimulating the development of existing and new small businesses.
(3)	The Technological Development Authority was originally established as an independent State agency in 1983 but was reestablished as a nonprofit corporation in 1991.
(4)	The underlying premise under which the Technological Development Authority was created was that it would become self-sufficient within 10 years; such self-sufficiency would validate the assumption that investment in high-technology companies is viable in North Carolina's market.
(5)	The Technological Development Authority has indeed become self-sufficient so that, beginning with the 1993-94 fiscal year, it will not request State funding.
(6)	The State should establish a goal of self-sufficiency for those economic development entities for which self-sufficiency is viable.
(7)	The Center for Microelectronics Systems Technologies of the MCNC, which focuses on microelectronics technologies and markets use of the MCNC facility to users, and the Economic Development Program and the Institute for Biotechnology Information of the Biotechnology Center, which provide support to start-up biotechnology businesses, are especially well-situated to become self-sufficient.
(8)	The following elements make self-sufficiency viable for these entities:
a.	A significant level of interest from private funding sources in the work they conduct.
b.	The growth projections for their respective technological focus areas.
c.	The advancements toward self-sufficiency they have already achieved.
(b)	It is the intent of the General Assembly to maintain funding for (i) the Center for Microelectronics Systems Technologies of the MCNC and (ii) the Economic Development Program and the Institute for Biotechnology Information of the Biotechnology Center at current levels for the next four years (the 1993-94 fiscal year through the 1996-97 fiscal year) and then review the appropriations to these entities.
(c)	This section is effective upon ratification.
––-NONPROFITS PERFORMANCE CONTRACTS.
Sec. 6. (a)	The General Assembly finds that:
(1)	The General Assembly has established, directly or indirectly, the following four special purpose nonprofit agencies to conduct economic development activities:
a.	The North Carolina Biotechnology Center.
b.	The MCNC (Microelectronics Center of North Carolina).
c.	The Rural Economic Development Center, Inc.
d.	The Technological Development Authority, Inc.
(2)	The mission of each of these nonprofits is as follows:
a.	The mission of the Biotechnology Center is to provide long-term economic benefit to North Carolina through support of biotechnology research, development, and commercialization statewide.
b.	The mission of the MCNC is to accelerate the use of emerging electronics technologies through innovation and market-driven applications that improve quality of life.
c.	The mission of the Rural Economic Development Center is to develop and advocate innovative strategies to help stimulate economic growth and job creation throughout the State's rural areas.
d.	The mission of the Technological Development Authority is to increase the rate at which new jobs are created in all regions of the State, by stimulating the development of existing and new small businesses.
(3)	In the 1991-92 fiscal year, these four nonprofits expended almost thirty million dollars ($30,000,000) in General Fund revenues justified in the budget process as economic development although, beginning in the 1993-94 fiscal year, the Technological Development Authority will no longer receive State funding.
(4)	Each of these special purpose nonprofits has demonstrated success in its respective area of focus and, as a group, they have contributed significantly to North Carolina's reputation as a State committed to innovative, technology-based research and development.
(5)	However, few mechanisms currently exist to ensure the accountability of these special purpose nonprofits to the State.
(6)	The current accountability mechanisms are:
a.	Annual and special published reports.
b.	Quarterly reporting to the Joint Legislative Commission on Governmental Operations regarding the use of their funds.
c.	Annual government financial audits.
(7)	These conventional accountability measures focus on inputs, or programs and budget levels, rather than outcomes–the results of the nonprofits' efforts.
(8)	Without outcome-based accountability measures, the extent to which the nonprofits are fulfilling their intended purposes cannot be fully assessed.
(9)	The lack of meaningful measures to evaluate and report the nonprofits' performance leaves the General Assembly with only a limited ability to evaluate the outcome of its significant investments in economic development activities of nonprofits.
(10)	Performance-based contracts would provide an effective and appropriate accountability mechanism to assess the performance of the nonprofits on a regular basis.
(11)	Examples of performance-based indicators by which nonprofits' effectiveness could be measured include:
a.	Achievement of an adequate ratio of private funding to State funding.
b.	Long-term financial viability, measured in quantitative terms, of those start-up businesses which the nonprofits finance.
c.	Number of patents received by applied researchers supported by the nonprofits.
d.	Number of jobs created in businesses that the nonprofits finance.
(12)	The General Assembly's economic development budget allocations to nonprofits should be based on outcomes, as measured by performance indicators designed by the nonprofits in conjunction with the Department of Commerce and the Economic Development Council.
(b)	The Department of Commerce, in conjunction with the Office of State Budget and Management and each nonprofit agency involved in State-funded economic development activities, shall recommend for each nonprofit agency performance indicators that are appropriate and measurable criteria, including criteria that each agency can influence and criteria based on baseline data and reasonable recommendations.  The performance indicators should articulate specific, measurable results for each agency and should be comprehensive, so that the General Assembly may base each agency's continued economic development appropriation on its effectiveness as measured by the performance indicators.
(c)	The Department of Commerce and the Office of State Budget and Management, as appropriate, shall, when allocating economic development appropriations to nonprofit agencies, execute a contract incorporating the performance indicators and any conditions upon which the appropriation was based.
(d)	This section is effective upon ratification.
––-UNC STUDY EXTENSION ECONOMIC DEVELOPMENT.
Sec. 7. (a)	The General Assembly finds that:
(1)	The University of North Carolina System's campuses administer many programs related to economic development, as follows:
a.	At Elizabeth City State University, the Small Business Development Technology Center and North Carolina Tomorrow.
b.	At East Carolina University, the Regional Development Institution.
c.	At Pembroke State University, the Economic Development Center.
d.	At Western Carolina University, Western North Carolina Tomorrow.
e.	At the University of North Carolina at Chapel Hill, the Small Business Technology Development Center and the Kenan Center of North Carolina.
f.	At North Carolina State University, the Industrial Extension Service, Industrial Telecommunications, the International Trade Center, the North Carolina Japan Center, and the Textiles Extension Service.
(2)	In addition, The University of North Carolina System supports economic development through basic and applied research, centers, institutes, and laboratories.
(3)	The University of North Carolina System has a unique contribution to make to economic development due to its access to ongoing research.
(4)	The extension service of The University of North Carolina System currently serves a function that is only indirectly related to economic development, although, given its regional infrastructure, it could be used for even more direct economic development activity.
(b)	The Board of Governors of The University of North Carolina shall, in consultation with the Boards of Trustees of all affected constituent institutions and in consultation with the Economic Development Council created in G.S. 143B-434, study its extension activities and determine the proper role of extension activities in economic development.  The Board of Governors shall reassign its extension activities a more active role in economic development if it finds such a role to be appropriate.  The Board of Governors shall report to the General Assembly and the Joint Legislative Education Oversight Committee by July 1, 1994, on its findings and any action taken with respect to extension activities.
(c)	This section is effective upon ratification.
––-RESTRUCTURE DEPT. OF COMMERCE.
Sec. 8. (a)	The General Assembly finds that:
(1)	The Department of Commerce has excess levels of management, excessively narrow spans of control, and some unnecessary positions in some units.
(2)	The Agribusiness Division of the Department of Commerce has programs that are duplicated in the Department of Agriculture and the Department of Environment, Health, and Natural Resources.
(3)	If the Weatherization Assistance Program of the Energy Division, which weatherizes houses for the needy, were combined with the Community Assistance Division's program that renovates houses for low-income persons, four positions could be eliminated.
(4)	Twelve positions in the following units of the Department of Commerce are unnecessary because the units have a supervisor and an assistant supervisor who both have narrow spans of control:
a.	Personnel Office.
b.	Energy Division.
c.	Banking Commission.
d.	Credit Union Commission.
e.	Finance and Budget (ESC).
f.	Labor Market Information (ESC).
(5)	Six positions in the following units of the Department of Commerce are unnecessary due to one-to-one reporting relationships:
a.	International Trade Division.
b.	Banking Commission.
c.	Credit Union Division.
d.	Community Assistance.
e.	Personnel (ESC).
f.	Labor Market Information (ESC).
(6)	Sixteen positions in the following units of the Department of Commerce are unnecessary for various reasons:
a.	Mutual Burial Association Commission.
b.	Cemetery Commission.
c.	Community Assistance Division.
d.	Security Administration (ESC).
e.	Public Information Office (ESC).
f.	" Manpower" Programs (ESC).
(7)	The Utilities Commission has a secretarial position for each Commissioner, and some of its other secretarial positions are excessive in comparison to other divisions.
(b)	Five positions in the Agribusiness Division of the Department of Commerce are eliminated because they are associated with programs that are duplicated in the Department of Agriculture and the Department of Environment, Health, and Natural Resources.
(c)	Four positions from the Energy Division, the Community Assistance Division, or both are eliminated.  In order to eliminate these positions, the Department of Commerce shall combine the Energy Division's Weatherization Assistance Program with a related program in the Community Assistance Division that renovates houses for low-income people.
(d)	Twelve unnecessary supervisory positions from the following divisions or units of the Department of Commerce are eliminated:
a.	Personnel Office.
b.	Energy Division.
c.	Banking Commission.
d.	Credit Union Commission.
e.	Finance and Budget (ESC).
f.	Labor Market Information (ESC).
In each case where there is an excessive layer of management or a management position with a narrow span of control, the management positions are to be eliminated.
(e)  Six positions that involve one-to-one reporting relationships in the following divisions of the Department of Commerce are eliminated:
a.	International Trade Division.
b.	Banking Commission.
c.	Credit Union Division.
d.	Community Assistance.
e.	Personnel (ESC).
f.	Labor Market Information (ESC).
(f)  Sixteen positions in which the functions are unnecessary in the following units of the Department of Commerce are eliminated:
a.	Mutual Burial Association Commission.
b.	Cemetery Commission.
c.	Community Assistance Division.
d.	Security Administration (ESC).
e.	Public Information Office (ESC).
f.	" Manpower" Programs (ESC).
(g)  The Secretary of Commerce shall study the best way to merge the North Carolina Mutual Burial Association Commission and the North Carolina Cemetery Commission, including their memberships, powers, duties, functions, property, personnel, and funds.  The Secretary shall report to the General Assembly by May 15, 1993, the results of its study including proposed legislation providing for the statutory merger of the two commissions.
(h)  Seven secretarial positions in the Utilities Commission are eliminated.  The Utilities Commission shall pool its support services.
(i)  The base budget of the Department of Commerce is reduced by one million two hundred thousand dollars ($1,200,000) for the 1993-94 fiscal year and one million seven hundred thousand dollars ($1,700,000) for the 1994-95 fiscal year due to the decrease in personnel positions mandated by this section.
(j)  Subsection (g) of this section is effective upon ratification; the remainder of this section becomes effective July 1, 1993.
––-COMMERCE RECS.
Sec. 9. (a)	The General Assembly makes the following findings:
(1)	The Department of Commerce's Business and Industry Development Division (B&I) operates nine regional offices with a staff of 27 individuals and annual expenditures of about one million three hundred fifty thousand dollars ($1,350,000); the Department's Division of Community Assistance (DCA) operates seven regional offices with a staff of 29 individuals and annual expenditures of about one million six hundred thousand dollars ($1,600,000).
(2)	The assignment of counties to regions is not consistent within B&I and DCA of the Department of Commerce, and the two divisions do not effectively coordinate their work.
(3)	The current mission of the B&I offices is broad in scope and results in wide variations in workloads, priorities, and strategies across regional offices.
(4)	B&I regional office staff are pursuing projects that would be more effectively handled by central office staff.
(5)	Development of resources and community needs, and the emphasis on and quality of strategic planning, vary widely among regions and counties.
(6)	Some regional and community personnel perceive central office staff as keeping new industry prospects to themselves and favoring certain areas for location.
(7)	Dynamic multicounty alliances are neither congruent with regional office boundaries nor consistently addressed by B&I's strategy.
(8)	The flow of information within B&I lacks strategic focus and does not effectively utilize computerized data processing techniques.
(9)	A significant aspect of the regional office operations is obtaining information and services for existing and prospective industrial clients.  Currently each office maintains its own file of contact information and deals with each request for information and service from other agencies as an individual case.  Many of these requests are repetitive and could be handled by data system links or telephone access messages.  Others require personal contact that could be facilitated by designation and publication of the individuals to be contacted.
(10)	A single-source approach to answering questions about permits required for construction and expansion, training resources, potential financing, statutes, workplace regulations, and other subjects would greatly facilitate the ombudsman function.  Also, structured interdepartmental techniques for following up and expediting requests for action could both save staff time and improve services to the citizenry.
(b)	The Department of Commerce shall consolidate the nine regional offices of the Business and Industry Division and the seven regional offices of the Division of Community Assistance into a smaller number of larger regional offices. The Department shall determine the appropriate number of offices and shall define a single set of regional boundaries to carry out the responsibilities.  The mission of the newly consolidated regional offices shall be long-range community-oriented economic development, and the top priority of the offices shall be services to rural areas.  Activities of the Department and the regional offices shall include:
(1)	Implementation of strategies for providing leadership to multicounty economic alliances; such strategies might include exchange of information, joint planning within transportation corridors and aquifers, marketing initiatives, and coordination of services to existing industries.
(2)	Development of an integrated, fully automated data system to support regional office functions, and design and implementation of interdepartmental techniques to follow up on and expedite requests for information and services.
(3)	Consideration of the need for environmental engineering and other technical services; services might include utilizing the staff of regulatory agencies to provide technical assistance, budgeting funds for consultation fees, and technical training of regional staff.
(c)	The base budget of the Department of Commerce, regional offices for business and industry and for community assistance, is reduced by not less than four hundred fifty-six thousand dollars ($456,000) for the 1993-94 fiscal year and reduced by not less than four hundred fifty-six thousand dollars ($456,000) for the 1994-95 fiscal year.  These reductions include the elimination of between three and six support positions, between six and seven relocation positions, between two and three retention and expansion positions, and reductions of other regional office expenses.
(d)	The Department of Commerce in conjunction with its newly consolidated regional offices of the Business and Industry Division and Division of Community Assistance shall develop and implement a single-source approach to provide the basic information most often requested by businesses, industries, and other entities or economic development projects that may consider locating or relocating in the different areas of the State.  In developing this single-source approach, the Department and its regional offices shall consider what information is appropriately handled by data system links or telephone access to recorded messages; what information is more appropriately conveyed by personal contact, and whether that information could be facilitated by the designation and publication of the individuals to be contacted; and what information regarding permits, training resources, potential financing, State laws, workplace regulations, and any other relevant subjects can feasibly and effectively be conveyed through a single-source approach.
(e)  This section becomes effective July 1, 1993.
––-TRANSFER SCIENCE & TECH. BOARD.
Sec. 10. (a)	The General Assembly finds that:
(1)	The Department of Administration is not a key player in economic development, yet it has the North Carolina Board of Science and Technology.
(2)	The North Carolina Board of Science and Technology and its attendant funding should be transferred to the Department of Commerce, whose major role is economic development.
(b)	The statutory authority, powers, duties and functions, records, personnel, property, and unexpended balances of appropriations, allocations, or other funds of the North Carolina Board of Science and Technology are transferred from the Department of Administration to the Department of Commerce.
The transfer directed by this subsection shall include eight certified positions under General Fund program code 14100-1871 in the Department of Administration as well as all positions certified for the Board under Special Fund program code 24100-2873 in the Department of Administration.  The Office of State Budget and Management shall ensure that the transfer directed by this section is carried out.
(c)	Part 27 of Article 9 of Chapter 143B of the General Statutes, which consists of G.S. 143B-426.1, is recodified as Part 6A of Article 10 of Chapter 143B of the General Statutes, to consist of G.S. 143B-445.1.
(d)	G.S. 143B-445.1, as redesignated by subsection (c) of this section, reads as rewritten:
"§ 143B-445.1.  North Carolina Board of Science and Technology.
(a)	The North Carolina Board of Science and Technology consists of the Governor, the Science Advisor to the Governor, and 17 members appointed as follows: the Governor shall appoint one member from the University of North Carolina at Chapel Hill, one member from North Carolina State University at Raleigh, and two members from other components of the University of North Carolina, all nominated by the President of the University of North Carolina; one member from Duke University, nominated by the President of Duke University; one member from a private college or university, other than Duke University, in North Carolina, nominated by the President of the Association of Private Colleges and Universities; one member from the Research Triangle Institute, nominated by the executive committee of the board of that institute; one member from the MCNC (Microelectronics Center of North Carolina), nominated by the executive committee of the board of that center; one member from the North Carolina Biotechnology Center, nominated by the executive committee of the board of that center; four members from private industry in North Carolina, at least one of whom shall be a professional engineer registered pursuant to Chapter 89C of the General Statutes or a person who holds at least a bachelors degree in engineering from an accredited college or university; and two members from public agencies in North Carolina.  Two members shall be appointed by the General Assembly, one shall be appointed upon the recommendation of the President of the Senate, and one shall be appointed upon the recommendation of the Speaker of the House of Representatives in accordance with G.S. 120-121.  The nominating authority for any vacancy on the Board among members appointed by the Governor shall submit to the Governor two nominations for each position to be filled, and the persons so nominated shall represent different disciplines.
(b)	Members appointed to the Board by the General Assembly shall serve for two-year terms beginning 1 July of odd-numbered years.  Vacancies in appointments made by the General Assembly shall be filled in accordance with G.S. 120-122.  The two members from public agencies shall serve for terms expiring at the end of the term of the Governor appointing them.  The other 13 members appointed to the Board by the Governor shall serve for four-year terms, and until their successors are appointed and qualified.  Of those 13 members, six shall serve for terms that expire on 30 June of years that follow by one year those years that are evenly divisible by four, and seven shall serve for terms that expire on 30 June of years that follow by three years those years that are evenly divisible by four.  Any appointment to fill a vacancy on the Board created by the resignation, dismissal, death, or disability of a member shall be for the balance of the unexpired term.
(c)	The Governor shall serve as chair of the Board and shall designate the vice-chair from among the members of the Board.  The Science Advisor to the Governor shall serve as executive director of the Board.  The Secretary of Commerce or the Secretary's designee shall serve as secretary to the Board.
(d)	The Governor may remove any member of the Board from office in accordance with the provisions of G.S. 143B-16.
(e)	Members of the Board who are employees of State agencies or institutions shall receive subsistence and travel allowances authorized by G.S. 138-6.  Legislative members of the Board shall receive subsistence and travel allowances authorized by G.S. 120-3.1.
(f)	A majority of the Board constitutes a quorum for the transaction of business.
(g)	The Secretary of Commerce shall provide all clerical and other services required by the Board."
(e)  This section is effective upon ratification.