GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1993

S	1 

SENATE BILL 193

Short Title:  GPAC/Economic Dev. Council/Plan.	(Public)
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Sponsors: Senators Perdue; and Martin of Guilford.
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Referred to:  Government Performance Audit.
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February 17, 1993

A BILL TO BE ENTITLED
AN ACT TO IMPLEMENT A RECOMMENDATION OF THE GOVERNMENT PERFORMANCE AUDIT COMMITTEE TO ESTABLISH AN ECONOMIC DEVELOPMENT COUNCIL IN THE DEPARTMENT OF COMMERCE TO REPLACE THE CURRENT ECONOMIC DEVELOPMENT BOARD, TO REQUIRE THE COUNCIL TO PREPARE AND UPDATE ANNUALLY AN ECONOMIC DEVELOPMENT PLAN FOR THE STATE OF NORTH CAROLINA, AND TO REQUIRE THE DEPARTMENT OF COMMERCE TO ESTABLISH A PLANNING UNIT TO SUPPORT THE ECONOMIC DEVELOPMENT COUNCIL'S ONGOING ROLE IN ECONOMIC AND COMMUNITY DEVELOPMENT PLANNING.
The General Assembly of North Carolina enacts:
Section 1.  The General Assembly finds that:
(1)	The Department of Commerce's Economic Development Board is a 25-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.
Sec. 2.  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 20 members.  The Governor shall serve ex officio as a member and as the chair of the Economic Development Council.  The Secretary of Commerce shall serve ex officio as a member and as the secretary of the Economic Development Council.  The Governor shall appoint the remaining members of the Council, as follows:
(1)	One economic development representative each from three of the regional alliances that have been established around the State by local governments and that involve the private sector in economic development.
(2)	One representative from each of the following State agencies:
a.	The Department of Administration.
b.	The Department of Agriculture.
c.	The Department of Community Colleges.
d.	The Employment Security Commission.
e.	The Department of Labor.
f.	The Department of the Secretary of State.
g.	The Department of Transportation.
h.	The Board of Governors of The University of North Carolina.
(3)	One representative each from three of the private nonprofit organizations that have received economic development appropriations in the most recent fiscal biennium.
(4)	Four members of the public.
The initial appointments to the Council shall be for terms beginning July 1, 1993.  The Governor shall designate eight terms to expire 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.
	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.
(c)	Staff – The Department of Commerce shall provide clerical and professional staff support to the Economic Development Council.
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Sec. 3.  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.
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Sec. 4.  G.S. 120-123 is amended by adding a new subdivision to read:
"(6a)	The Economic Development Council established by G.S. 143B-434."
Sec. 5.  Beginning July 1, 1993, the Department of Commerce shall reallocate to the Economic Development Council created in this act funds and resources previously allocated to the Economic Development Board.
Sec. 6.  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."
Sec. 7.  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.
Sec. 8.  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 act.  It is the intent of the General Assembly that this will be a continuing appropriation.
Sec. 9.  This act becomes effective July 1, 1993.  The terms of all current members of the Economic Development Board shall expire July 1, 1993.