GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1993

S	1 

SENATE BILL 1570*

Short Title:  Regional Development Partnership.        	(Public)
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Sponsors: Senators Kaplan and Edwards.
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Referred to:  Economic Development/Travel Tourism.
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May 25, 1994

A BILL TO BE ENTITLED
AN ACT TO ENCOURAGE REGIONAL COOPERATION IN ECONOMIC DEVELOPMENT THROUGH THE NORTH CAROLINA PARTNERSHIP FOR REGIONAL ECONOMIC DEVELOPMENT AND TO APPROPRIATE FUNDS FOR REGIONAL ECONOMIC DEVELOPMENT PARTNERSHIPS.
Whereas, the General Assembly finds that economic development has not been evenly distributed across the State; and
Whereas, in the increasingly complex and competitive environment for economic development, individual local governments often lack the expertise and resources to engage in activities that promote job creation; and
Whereas, the economy of North Carolina is composed of diverse subeconomies that vary significantly across the State, and effective economic development policies and programs must be customized to best take advantage of the particular resources and opportunities of these regions; and
Whereas, cooperation among cities and counties, in partnership with the private and nonprofit sectors, enables diverse regions to mount effective economic development activities; and
Whereas, in recognition of this, the General Assembly created three regional economic development commissions pursuant to G.S. 158-8.1, 158-8.2, and 158-8.3 in 1993; and
Whereas, other regional economic development organizations have been formed on a voluntary basis in other parts of the State; and
Whereas, the enactment of the North Carolina Partnership for Regional Economic Development will encourage regional cooperation throughout North Carolina across local government boundaries and across the public, private, and nonprofit sectors to enable all parts of the State to become more competitive for economic development; Now, therefore,
The General Assembly of North Carolina enacts:
Section 1.  Chapter 158 of the General Statutes is amended by adding a new Article to read:
"ARTICLE 5.
"Regional Economic Development Partnerships.
"§ 158-45.  Scope.
This Article does not apply to those counties included in regional economic development commissions established pursuant to G.S. 158-8.1, 158-8.2, and 158-8.3 until July 1, 1996.
"§ 158-46.  Definitions.
The following definitions apply in this Article:
(1)	Department. – The Department of Commerce.
(2)	Distress factor. – A county's distress factor as calculated under G.S. 105-130.40(c).
(3)	Region. – An area served by a regional economic development commission.
(4)	Regional economic development partnership. – A regional economic development commission certified by the Department pursuant to this Article.
"§ 158-47.  Partnership requirements; governing body.
(a)	Requirements. – A regional economic development partnership must include an adequate number of counties, and municipalities of those counties, to demonstrate to the Department that the regional partnership meets all of the following requirements:
(1)	It is of adequate size in population and geographic scope to effectively undertake economic development activities, to market as a distinct and viable region for attraction of new investment, and to generate adequate local resources to effectively cooperate with the Department.
(2)	It is economically integrated as determined by commuting patterns, economic base, economic interrelationships, major employers, or other indicators of economic integration.
(3)	It has an identifiable focal point of economic activity, known as an economic engine or driver, within the regional boundaries on which to build an effective economic development and marketing strategy, such as a metropolitan area, a cluster of manufacturing or nonmanufacturing industries, a natural resource base, or other clearly identifiable economic resources.
(b)	Governing Body. – Each regional economic development partnership shall be governed by a board that is broadly representative of the citizens of the local governments that comprise the partnership.  The board should reflect the diverse population of the region and include representatives of the public sector, the private sector, and the nonprofit sector.  Where appropriate and practical, the board should also include representation, voting or nonvoting, from other regional organizations within the boundaries of the partnership.  Voting representation shall be allocated on an equitable basis among the members of the partnership.
"§ 158-48.  Certification of partnerships.
(a)	Application. – In order to be certified, a proposed regional economic development partnership must apply to the Department for certification as a regional economic development partnership on an application provided by the Department.  Applications for certification shall be delivered to the Department by October 1 of the year in which certification is sought.  The application shall contain the following information and any other information required by the Department:
(1)	Documentation that the requirements of G.S. 148-47 have been satisfied.
(2)	A business plan that covers a two-year period and presents a detailed description of the proposed activities of the partnership and a detailed budget that includes both State and local funds.
(3)	Documentation that the partnership has provided opportunity for discussion and participation in the development of the business plan by interested parties, including local economic development organizations, existing regional organizations, business, nonprofit development corporations, and others, as appropriate.
(4)	Identification of public and private organizations within the boundaries of the partnership active in economic development and a description of what role, if any, they will undertake in cooperation with the partnership.
(5)	A statement that none of the local governments in the proposed partnership is a member of another partnership or proposed partnership.
(b)	Certification. – The Department shall complete review of all applications by November 1 of each year.  The Department shall provide technical assistance to applicants in removing deficiencies in applications.  The Department shall certify a partnership only if:
(1)	The application meets all requirements for certification; and
(2)	All applications taken together with other information available to the Department provide no evidence that a county that wished to participate in a partnership was denied a reasonable opportunity to participate.
(c)	Reports. – Each partnership must submit an annual report to the Department.  The report must include a description of activities carried out to date, results of those activities as measured by jobs and investment and other appropriate measures, and a detailed financial report.
(d)	Renewal. –  A certification remains valid for two years.  Every two years, each partnership must reapply for certification in accordance with this section.
"§ 158-49.  State funding of partnerships.
(a)	Allocation. – Regional economic development partnerships are eligible to receive State funds as provided in this section.  Each year, the Department shall allocate any funds appropriated by the General Assembly for regional economic development partnerships among the counties that are members of partnerships according to level of economic distress as indicated by the distress factor.  Each county's allocation shall be determined by dividing the county's distress factor by the sum of the distress factors for all partnership counties and multiplying the resulting percentage by the amount of the appropriation.  The Department shall then allocate to each regional economic development partnership the sum of the allocations to each county that is a member of the partnership.
(b)	Match. – Each partnership must match its allocation under this section on the basis of one dollar ($1.00) of non-State funds for every ten dollars ($10.00) of State funds.  This match requirement shall be allocated among the counties of the partnership in proportion to each county's allocation of funds under this section.  Of the ten percent (10%) match, at least one-half must be contributed by private sector sources.
(c)	Distribution. – The Department shall distribute to each regional economic development partnership its allocated amount only after determining that:
(1)	The amount of funding is reasonable given the proposed budget and program activities submitted by the partnership.
(2)	The partnership has established appropriate financial mechanisms and controls.
(3)	The partnership has demonstrated the ability to provide the required matching funds.
If the Department determines that a partnership has not met these conditions, the Department shall retain the partnership's allocation in a trust account until the partnership meets the conditions.
(d)	Use. –  Funds distributed to a regional economic development partnership under this section shall be used only for marketing, advertising, promotion, and related economic development activities to secure jobs and new investment in the region.  Examples of eligible uses include:
(1)	Marketing the region to promote new investment from out-of-State companies.
(2)	Promoting travel and tourism or natural-resource based attractions.
(3)	Trade missions.
(4)	Marketing and promoting existing industries.
(5)	Encouraging attraction or retention of entrepreneurial development.
(6)	Promoting and marketing local crafts, industries, or other specialized economic development opportunities.
(7)	Research-related economic development activities such as industry sector studies for targeted marketing, buyer-supplier analyses for targeted marketing or to support existing industry, development of necessary supporting information and data, linking the region with the Department of Commerce Economic Development Information System.
(e)	Administrative Costs. – The funds distributed under this section shall not be used for staff or administrative costs unless this use is approved by the Department in the business plan.  The Department may authorize up to twenty-five percent (25%) of the State allocation to be used for staff or administrative costs in regions with high levels of distress.  In making this determination, the Department shall consider the relative levels of distress of the partnerships as measured by the distress factors of the counties in each partnership.
"§ 158-50.  Duties of the Department of Commerce.
(a)	The Department shall actively assist each partnership in organizing and carrying out activities specified in its business plan.  The Department shall also ensure that each partnership is linked to the Economic Development Information System.  The Department shall develop procedures that ensure that each region has maximum opportunity to attract new jobs and investment, that all inquiries from companies concerning location in North Carolina are fairly and equitably handled, and that all inquiries and prospective investments are handled efficiently and effectively.
(b)	The Department shall institute a process to organize programs and services in a manner that will assist each region in taking maximum advantage of potential development opportunities.  This process shall include all of the following:
(1)	Integrating each regional economic development partnership into the Economic Development Information System and the Geographic Information System.
(2)	Developing joint marketing strategies and materials for targeted industries, services, or promotional markets based on each region's strengths and priorities.
(3)	Assigning an economic development specialist to work with each regional economic development partnership.
(4)	Providing technical assistance and training, if needed, to help build regional capacity.
(5)	Developing cooperative marketing and advertising campaigns to ensure consistency of image and quality and to secure discounts on media presentations.
(6)	Customizing the services and programs within the Department, where practicable, to better link departmental resources with the diverse needs and opportunities within the boundaries of each partnership."
Sec. 2.  It was the finding of the Economic Development Board created in G.S. 143B-434 that numerous regional organizations receive State funds to conduct economic development activities.  The Government Performance Audit Committee recommended that duplication and fragmentation in economic development activities be reduced at the State level.  It is the intent of the General Assembly that any duplication and fragmentation of State-funded economic development activities at the regional level also be reduced or eliminated.
Sec. 3.  The Legislative Research Commission may work in cooperation with the appropriate executive agencies and boards and representatives of local government to study and recommend a strategy to reduce duplication and fragmentation in State-funded regional economic development organizations.  The Legislative Research Commission may report its findings and recommendations to the 1995 General Assembly.
Sec. 4.  There is appropriated from the General Fund to the Department of Commerce the sum of two million four hundred thousand dollars ($2,400,000) for the 1994-95 fiscal year to be allocated to regional economic development partnerships certified under Article 5 of Chapter 158 of the General Statutes, as enacted by this act.  These funds shall not revert at the end of the fiscal year but shall remain available until used for this purpose.
Sec. 5.  This act becomes effective July 1, 1994.