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House | June 19, 2013 | Committee Room | Commerce

Full MP3 Audio File

I would like the committee to order the members could find their seats and visitors please retire to the back of the room, we will get started. I would like to welcome everyone to the full house committee on commerce and job development. We will be taking up house bill, excuse me, senate bill 127 and before we get there, I would like to recognize our sergeant of arms Bill bass, Joe Quirk, Carl Merelo and Martha Gadison. We certainly appreciate the hard work that you folks put in to getting our rooms set up. Also I could recognize our pages today, Nicholas Williams, if you could stand up when I call your name. He is sponsored by representative John Bell, Chaes Cross being sponsored by representative J Dockham, where is Chaes, oh he is occupied with his sponsor. James German, sponsored by representative Stan, Camerin Talet represented by representative Dockham and Kiama swebson sponsored by representative of the wayne hall. We certainly appreciate you being in our committee today. We do have some guests with us, I like to recognize secretary of commerce, Madame Secretary, thank you for being in our committee today. At this point, the primary bill sponsored to be senator harry brown, on the senate side i know that representative Tamara and house side has been working with the senate on this. So at this point, senator you have the ?? [SPEAKER CHANGES] Thank you Mr. ??. This is kind of two bills are moving, representative ?? and I have been working on this. [SPEAKER CHANGES] Senator, have we done watching you. Yes, represented by Briam, luis and we have the pcs before so in favor show aye, all oppose pcs is before the senate and you may continue. [SPEAKER CHANGES] Thank you Mr. chairman and I tried to run through the bill real quick and then I asked for representative Burdy kinda come in with his basis and he is working really hard on the first part of the bill but part 1 of the bill just establishes the framework for the department of commerce to contract with a non-profit corporation provides heavy research and recruitment recommendations regarding economic development and ?? of grant awards and for marketing and consultation into development of long wage economic development planning. The contract of fulfillments is limited to skype and in the below lays out what these limits are. Also a non profit corporation contacted by the department would be overseen by an economic development oversight committee. The mission receives state funds by this non profit, this specific to the contract and do not arise until a certain prerequisites are satisfied and you can see in the bill all that prerequisites that must be satisfied. A contract authorized must contain the following terms and the bill has all the terms that must be included in that contract. Bit of a problem, must hang on to the reports wage, giveups and fiscal resources to base in to any performance to which of the department has contracted with the non profit corporation. The remaining provisions of part 1 include a report of economic development board and authorization to a lot of sector to delegate the sectors responsibilities with respect to a comprehensive strategic economic development plan to the governments board of the non profit corporation with whose the department has contracted, a requirement that a governing board of the non profit corporation intend to function’s privacy performed by economic development board, in extention for officers and employees of the non profit corporation from the revisions of the state personal act and requirement under departments staying developers plan for the contracting with a non profit corporation and concentration of organizations involved in economic development in the state. Part 2 of the bill bring ?? the north carolina board of science and technology as a north Carolina board of science technology and innovation. Which will gain the duty to advice and make recommendations to the non profit corporation on the role of science technology and innovation. Part 3 of the bill would divide the state into 8 geographic regions to facilitate the collaboration and coordinating planning and resource use to improve cooperation facilitating increased efficiencies, receive advice on economic development issues while upper boards established by non profit corporations, establish a one stop assistance in each region for citizens and businesses, the bill would require the department of commerce, environment, natural resources and transportation each provide one employee per each regional office to serve as that department-

Liaison with other departments and with local governments, schools and colleges, businesses, and other developmental planning bodies the community college's system officer would also be required to designate one representative to serve as a liaison in each zone. Part 5 of the bill creates the study commission on interagency collaboration for prosperity consisting of 8 members 4 from each legislative chamber. And part 6 of the bill would repeal all legislative enactments creating regional economic development commissions in the state, and will provide where necessary provisions regarding the assets of those commissions. That's going through the bill pretty quick, I'll ask Representative Murry maybe to touch on the first part that I know he's worked on very hard. [Speaker Change] Thank you Senator Brown. And I wanted to also just publicly thank Senator Brown for his willingness to work on this marriage of the concepts between his regional realignment and the privatization and this is a true partnership with Senator Brown on this concept. And with regards to part one I think if you look at how we're structuring this organization you can see the tapestry of business that runs across our state clearly reflected in the government’s board of this partnership for prosperity. We've got agribusiness as recommended by the commissioner of agriculture, financial services, information technology, bio-technology, energy, manufacturing, military, and tourism, and retail all represented on this board of directors. And if that doesn't paint a picture of the business segments in the state of North Carolina I don't know what we could do any better to paint a tapestry of what the state of North Carolina's business community looks like. Additionally if you look in part D on page 3 you can see the clear conflict of interest provisions that we've put into this to make sure that that the people's business is done properly in this public/private partnership. And on page 5 part G you can see that the public information and reporting in part F and part G the reporting and public information pieces of this legislation is strong to make sure that the business that is done by this non-profit partnership for prosperity is done above board and properly. And so that was a major, major area that we were interested in making sure what we ?? areas of improvement. So with that if there are any specific provisions of the legislation that you would like to ask about the Secretary of Commerce is here and I would like to thank her and the Governor's office for their diligence and work on this legislation, this is a top priority we have a state with rich resources, but we're plagued by high unemployment. And this we've got to change the way we do business to help our existing business grow, and help new businesses relocate to our state to expand, grow, and create jobs to help partner everywhere across our state for prosperity for everyone. [Speaker Change] Thank you Representative Murry. Senator Brown. [Speaker Change] Thank you Mr. Chairman. As you know as far as aligning the regions go I think all of you know that in the state of North Carolina if you look at a region none of em match. I don't care what region you look at I don't think you find another one that looks like the other one. What this does, and these are loose regions and I think that's been a misconception of the bill is that these are regions that'll be tight regions. Part of the bill actually says that the department has the opportunity to change the regions if they see that it makes sense to do so, which I thinks important. So I would hope that you don't get tied up on the regions so much because those lines are loose and if the department thinks that some counties need to be moved to a different region, they have the power to do that. But I think the important piece of the regions is for the first time we'll have someone from commerce, and ??, transportation working together in a central location in each of these regions to handle requests and issues that businesses have concerns about when they're looking at relocating in North Carolina. And I think you know times important to most businesses if you have a business wants to relocate in your region they want to be able to get answers pretty quick and make decisions pretty quick, and I think this will allow that to happen. And this is kinda the first time we've been able to pull all of those entities together. [Speaker Change] Thank you Senator

Tired of that secretary would you like two the two address the time that a long they keep the opportunity time as the body and the KKK support and help hide a clear-cut AF if it's not an offense that had never won a place like the K. Coppersmith A economically , and that the driveway, an employment Atty. (SPEAKER CHANGES) and public that unemployment than that, but another five years ago at DAA the Fenway time that all of that stuff that happened and create a nonprofit and can then, a congressman congratulated timely two pickups A today, but they cannot dispatch and put them in the back of each of the fact that we understand that and Compaq operates like deadly nonprofit think tank or older and if not, planned for the FAA plans to operate, and that any opportunity could, if the contract with the nonprofit belief that could perform at the time looking to the contractual relationship that contact managed on the public-health and of a land and that money that from the time I did this equation is not about that will not be like you the money that got behind the Congress defended by Caroline At well A appropriated a Congress that I'm an internal contact with the fund Compaq said Gary A, deprived of its larger than the currently operating in a gang, that lee I can tell if he had a clear, wall between the public and private funding for playing time, the shareowners and back to prove their imported into the category the operation of banking from Mike Greenwell and tried that I am hopeful that that will be approved and that we can all are identified. That is, like to open up of the committee for question-and if the intent of care, but today, had been failing to recognize our combined two long time now that the first question they Miss chairman of the first 100?? (SPEAKER CHANGES) support this bill does some good stuff in here that actually is a volunteer time moment and the corner of the commission member that, I was pushing for a long, so there are some good thing. I'm concerned about whether this will make sure that required by and let them do some of the time might be looking to do one vs. of northeast obviously did not have won the production by the time the corporate world to be able to raise funds to how exactly would back a relationship work with the developing a private money to support economic of development and more time to bring the chairman, where did that very fact of life at all the way I am in need of help of partition region with about in my opinion that no change from the start time the largest town that weekend with a fake good people help of dollars in that region of time it possible for what happened to me that the only supported by $8.00 , got all the end of the time and with this nonprofit you'll get paid and in my opinion of the time to come in all of this day , and we would be worried about develop and expand throughout the state in the northeast and not as many I'm especially with about two of the goal area, in that location despite into the port of the North Carolina, when the state take advantage of that Time National rating of any problem with these to take advantage of palm Sunday at the creates a situation where you get more private dollars and the only time Mr. Jordan died:-the second question is one that has got to the second timing and scope or not gone, and com admitted some debate, and ½ months when the partnership alliance for funding is concerned under the provision in the looks like it would reduce what time of great about 50%, and not just in December , and I got the distinct impression nominated by the year to make timely than a plan together and widens ?? (SPEAKER CHANGES) work from the 15 projects that I'm going to continue and without losing ground on the ballot: if your might be willing to commit just a fun time for the two that we can make time ??.....

We got this thing right into roll ?? [SPEAKER CHANGES]Thank you Mr Charin and thank you for the question .Now i will ask for the secretaries help wanna wanna make a brief response.This this process developing this partnership of prosperity is intending to take 6 months for development and during that process there would be reporting requirements back to the government operations committee here in the legislative when we adjourn hopefully ?? rather than wider because my beard starting itchy but once you adjourn this process of developing this partnership will be clearly reporting back to the general assembly in that government operation.and if there needs to be in time extension we can we can that would be in the contract terms that will be able to have with the department of commerce and i would like the secretary to have to my comments Mr chair man [SPEAKER CHANGES]Thank you secretary ?? [SPEAKER CHANGES] and that would be read all the original process in volunteers.Now about last two weeks ago today and we talked about transition time ?? and they said i deal from their perspective that would be six to twelve months we agreed we could make it work with them at that time frame and talking would the senator and with representative Murray we felt like twelve months is probably optimal and we could make a hand shake agreement that could work towards that and ?? we got support that there are some pieces of that need to take some time and that work for those specific plans .We are gonna target six months time frame and think that's realistic we are gonna move aggressively but we are gonna do the transition planning with them not apart from them and now only to work together this pieces employs [SPEAKER CHANGES]Thank you secretary. The final followup is the flexibility .I am not really noble to have that flexibility to move out to the twelve months ?? comments what id that provide the flexibility that we need to make an adjustment to move forward [SPEAKER CHANGES] senator brown [SPEAKER CHANGES] i would say this represented time is the funding piece of it is toting.

the area on the own version of the Board of Directors of development on the beltway. The perspective of the time ?? 58 and lived to be a long-term plan, general- a time of day and transportation has to have a weapon at the table and locations for the only member much of all ?? please, but the other had questioned the family and a touchdown with the flexibility of the FA home to the time the automation, Kelly’s up a lot and an undeniable telling that to do that and(SPEAKER CHANGES) lee Arellano I'm a problem, but if you call the French telling them a nickname Charlotte military commander, from time to care, and especially liked though the two 21 actually formed part time within these are the county should be for the mainland to pay condoms and take some time with a predefined end of the Northern England for them, but they got what actually have a big story that the people of the people of Haiti got 2304 counties are working to get hold of a timeout the deputy of the end of day that they lack the wind, we know that the FDA at about eight to time to come together with small leak into working on specific product is probably a good cop to wait and let up and go back to the whole life is good in the development of a pound, and where you can get answers would happen that the court to come within the bridegroom time happened to me of comments and questions for some of the larger stake are much too hard work to do that as well, did a good time to reformat for this report, like colleges that the five technology innovation award a lifelike too many focusing exclusively to five and turned to god to other components of the time your life that opened before the five and the university, even though she ended the last two internally and good representation of time university system, in terms of the unbelievable, that the prosperity of how windows, Canada five,(SPEAKER CHANGES) I out with a population 1500 feet of land of a good question of how they got had been kidnapped son of war may have worn as we got back to life, like, to try and work through that time of death and the passion went to college and, look for me to work together by all the time and Michael balance is well within regions , again with the people of the county with a tough time the palace of them like a county that the candy man or the data from five F level of dollars to be one of the northeast and nowhere, dollars , a longtime piece that handle a ballet of education or Health Care so much that fall into portable northeast and again included well the thing that figure had the discretion to move a Cadillac for two of his time but tried explaining to the republican court on-line time, they are two of the weekend and come back too often they have become timing of the public realm of Gresham and that the goal of the only one hit, click, however, we can begin by clicking on the time line between lake and down, (SPEAKER CHANGES)and with the with the long-term value and robin play, and work again until we can call 1 to 1 in the end, the phone from the back of time on the wall like the one to wonder about information we have had the operation in the department that time. And that's really the big draw that the three of the other legal on the line in long-term goal of the terms of the time of five from Canada to make a ??..............

Where I’m actually kind of excited about being in this region. With the - taking away the Eastern region and the funds going back to the counties for the license plates, who in those counties will actually manage those funds and really drive it for economic development because, although our County Commissioners drive economic development, we see things a tad differently. Senator Brown? That’s a very good question, one that I’ve got a little bit of concern with to be quite honest, and something that we have to work through. It’s my understanding that the Eastern region is meeting trying to figure that out. There’s a bill right now that - for Craven County to pull out of the Eastern region and they’re asking for those dollars to go back to Craven County, so the Eastern region is - it’s kind of interesting how it’s evolving because I’m not sure what the final outlook is going to be, especially with those dollars that were generated by the tag revenues that you’re referring to. My personal opinion is, if the counties in those regions want those dollars back they should be allowed to get them back. That’s how I personally feel, and I think the bill that Representative Speciale has got, which deals with Craven County, I think there’s some thoughts of expanding that to all the counties in the Eastern region. I’m not sure how that’s going to play out to be quite honest. Representative Holley. Thank you Mr. Chairman. One of the things I’ve learned over the years is that if you not at the table you have a tendency to get left out, and I’ve read this but I’ve read it briefly and lightly and I want to know where historically unutilized businesses – minority and women owned businesses fit in here. Are they at the table? Can they be on the board? Can one of the hub schools be designated in the technology piece of that, I mean is it here? Where is it? Thank you Representative Murry. Excellent question and I think the secretary has laid out a clear vision on what her intentions are with that and I would ask her to weigh in on how she sees his role now. Sec. Decker. Representative Holly, you can be assured that minority and women owned businesses are at the forefront of my mind. We have not explicitly identified on our board that there would be minority and women owned businesses representative because my expectation is that in any board across the sectors there would be diverse representation and that for me is absolutely intentional and not questionable. It must be managed that way. I think you will also see in the nonprofit, a renewed and clear focus on small business development that the organization is the one will be driving out over the next few weeks. I believe that we have not had the focus with clarity that we need to have that in state commerce and that will be corrected in this process of change. Follow-up. Follow-up, representative Holley. Getting over to the schools I would like to see the schools involved in the science and technology. I would like to see one of the other designated schools to be a hub school, historically underutilized school because they too play an active part in science and technology. Thank you Representative Lambeth. Thank you Mr. Chairman, and also thank the bill’s sponsors for bringing this to us today and for the hard work that’s been put into this and it’s obviously been a lot of work put into this. My question relates to how do you see that the various chambers of commerce organizations fitting into this as you rollout particularly those eight zones? Representative Murry. That’s our local boots on the ground partners that we are - I think that’s going to be a strong relationship with those and the secretary has laid out a vision previously on that and I would ask her to comment on that as well. The process will start this summer. Tony Amita and I will be making field visit starting in late July, working on the development of North Carolina’s first economic development strategic plan in many many years, and at the table will be the local chambers of commerce, local economic developers, local and county city officials. Those folks who on the ground are involved in economic development every day, so that were driving out this plan with their engagement and their involvement and so there will be very - that will be the first opportunity for engagement and a lot more moving forward. For me and you’ve heard me say this, too many times probably, but economic development is a local business and the state has a very important role to play in economic development in North Carolina but the activity happens at a local level and so they’ll be heavily engaged in the planning and in the execution of the plan. Thank you Madam Secretary. Representative Fisher.

Thank you Mr. Chairman. You know, everybody gets a little bit uncomfortable when change of this magnitude occurs. And you get used to the way things are and have been, and it's hard to make that shift over to a new set of ideas. Although I am intrigued by your plans, I am beginning to place my confidence in what you're going to be able to do with these prosperity zones, but I still have a little bit of unease about the whole sort of top down vs. bottom up approach to job development. And for example, and it's because I come from the west, it seems like everything has had to happen in the triangle or Charlotte. For example, we have biotech in Ashville in the form of Nutraceuticals, and we have the largest germ plasma repository in the country, just about, and you know biotech doesn't just happen in one place. How are you going to, and I guess this question is for the secretary, how are you going to be able to highlight the specialties that come out of each of these individual prosperity zones in a way that really brings distinction to what they're able to do apart from what is able to be done in those other regions? [SPEAKER CHANGES] Secretary Decker? [SPEAKER CHANGES] Thank you for the question, because that issue is one of the drivers for the need for this change. We have not been able to successfully do that at this point. And so by honing in our focus to a zone level, working with your local developers who know these specialty areas, and I've already spent some time in the western part of the state talking around these issues. The plan for that zone will be unique to that zone, but the state will now be in a position to promote that, and market it in a new and unique way I think, in an aggressive way. But in support of what's happening locally: The intention is not to be top down, but to be bottom up. And that planning starts this summer, if we're given the permission to move forward. And it starts with your folks at a local level. This is not something we can do in a silo or a vacuum. I think we've tried that, and it hasn't worked. So this is about getting on the ground with your community leadership involved in economic development and making plans that can be executed locally with state support. [SPEAKER CHANGES] Sen. Brown? [SPEAKER CHANGES] Thank you Mr. Chairman. I think it's important- one of the driving forces, I guess, for me to try to do something different, is that I look across the state at the unemployment rate in some of the counties in the state. A lot of our programs you think now are for rural North Carolina. But when I look at unemployment, I look at Wilson and Nash county. Unemployment, 12-13% range. I look at the far western counties. Unemployment 13, 14, 15%. I look in the southeast. Robinson, Columbus, Scotland county. Unemployment 12, 13, 14%. So it's obvious what we're doing now for rural North Carolina hasn't done a good job, because those unemployment figures really haven't moved, and I think getting commerce and transportation and ?? out in those regions to understand those regions, to understand the needs, the workforce that's in those regions, and to really develop a plan that can address those unemployment numbers in those small rural counties, I think that's important. And if something we haven't really done a good job of in my opinion in this state, it's something we need to change. [SPEAKER CHANGES] Rep. Robert Brawley. [SPEAKER CHANGES] Thank you Mr. Chairman. It looks to me like it's an excellent plan. From Iredell county, we've seen what it means when people workt together and follow the leadership of the Dept. of Commerce, and look forward to working with you, but one thing I've also noticed in working with body politic: Business seems to go where the money is, and if I understand these nonprofit corporations, they're going to be taking money from local governments, the state, and private businesses. So what are we doing to keep that money from influencing what gets done? [SPEAKER CHANGES] Rep. Murry. [SPEAKER CHANGES] Excellent question, Rep. Brawley. We've got clear conflict-of-interest provisions in here to help prevent self-dealing, additionally I think when you're dealing with a

a true partnership. It's successful when all its parts are successful. And so, I think that the representation that we've got from the cross industry sector, industries populate around certain geographic areas. We've got biotech in the triangle, and financial services in the Charlotte area. And so, just the sheer nature of that governance board is a geographically diverse governance board, and the plan within those individual business sectors will help, in my opinion, make sure that we have broad, broad investment across all areas in these different regions. [SPEAKER CHANGES]. Follow up. You're talking about page 3, what's there, right? [SPEAKER CHANGES]. That's right. [SPEAKER CHANGES]. I got it. Yeah, I think, at least in my mind, it's a little different question, in that, page 3 deals with the conflicts of interest of the Board members and that part of it. But if somebody in Raleigh says hey, I'll contribute so-and so, but I want to make sure you bring in business to Raleigh, how do we counter that? They're not a member of the board, they're not on the board, but they do have money. [SPEAKER CHANGES]. Certainly. It has to, any investment that this, any activity that this new non-profit is going to engage in has to be consistent with the overall economic development plan that will be developed. And strong within that plan is going to be targeting our rural, most economic depressed areas, with a focus on small business. So I think it’s the classic, if you fail to plan then you plan to fail, and once you have a plan, then you need to work your plan. And so, I think that's a big piece of this, and I think that's going to be an opportunity for each of us to be involved in helping execute, implement, and develop that plan. [SPEAKER CHANGES]. Representative Hamilton. [SPEAKER CHANGES]. Thank you, Mr. Chairman. I'm not really sure who to direct the question to, so first of all, I just want to say I like the bill. I'm very, a lot of really hard work has gone into this and we appreciate everybody's efforts. I also like, very much, the flexibility in the mapping that’s given to the Secretary. Maps should be dynamic, they should follow the economy, they shouldn't be static, and hats off to you, Madam Secretary, because you may start getting the same requests for moving around that the general assembly's been dealing with over the last few years, I don't envy you that. I do have a question though, about sections 6.8, and I should know the answer to this, but I'm not on Appropriations, what's the current budget amount for the partnerships? I know it's still not resolved, but where are we with it as we speak? [SPEAKER CHANGES]. Senator Brown. [SPEAKER CHANGES]. Representative Hamilton, it's my understanding that the partnerships get about 4 and a half million of state dollars. Today, the bill scales that out over time, but that's the amount of state dollars going to the partnerships today. [SPEAKER CHANGES]. Follow up. [SPEAKER CHANGES]. Follow up. [SPEAKER CHANGES]. Yes, Senator Brown, I understand and I agree with a statement that you made earlier that it's time to put the handwriting on the wall. And so, by giving them notice for the budget process that they are not going to continue receive that funding, I think we're all on the same page there. But the question is, do we know what that, and this may be a question for staff, do we know what that current dollar amount is, did we give them a year, did we give them six months, did we give them three months, at this stage of the budget process? I'm just curious. [SPEAKER CHANGES]. We're currently looking, staff is looking for that number. Can we get back to you with that? OK, good. Thank you. Representative Wells. OK. Representative Millis. [SPEAKER CHANGES]. Thank you, Mr. Chairman, and thank you, Senator Brown and Representative Murry, for bringing this forward. Receiving this bill last night and reading through it, I really vision this bill that has two separate parts that's interwoven, and one of those parts is structuring the Department of Commerce, which I fully support. I think the intent here is to make it more efficient, as well as to make it more effective. And my heart is truly behind those efforts and the work that's been put into it. The second part is the establishment of a non-profit corporation, as it ironed out on the page 1 here of the purpose of the non-profit organization, is not to guide the state in infrastructure decisions, but to, more or less, give them the purview to help guide the state under the wide blanket of the statement of incentives and grants

And just as a series of questions for you on helping me feel more comfortable with supporting this part of the bill is first of all, is that why should we establish a non-profit corporation to do these function of the Department of Commerce which would basically, on page 1 here if what I’m reading here it says that the nonprofit corporations can perform one or more of the Department’s functions, powers, duties or obligations set forth in that statute except the following. Why should I support this establishment of this nonprofit versus an advisory board of private sector individuals to help guide the state in their economic development decisions and then I may have a series of very kind follow ups. [SPEAKER CHANGES] Representative Murry? [SPEAKER CHANGES] Thank you for the question Representative Millis. And I Think the key word that we’re looking for and the key thing that we really want to stress here is that we need our Department of Commerce and our economic development activities to move at the speed of business, not the speed of government. And so the flexibility and the nimbleness that a nonprofit organization, clearly spelled out by a contractual relationship. Which is a misnomer with how we do economic development in our current environment. Currently, a lots of the existing nonprofit organizations that we have are juts, they just get checks from the General Fund and say have a good day. There’s no deliverables. There’s no accountability. There’s no, you will do this, you cannot do this. And so this new world order change, change, it’s a new way to do business and we will clearly spell out what this entity will be responsible for, what the accountably measure sand they’ll have reporting requirements back to us, back to the General Assembly.. To make sure we have proper oversight with strong conflict of interest and public notice provisions. So I think that’s the way the public expects us to do business and that’s how we want this done properly and do business as well. [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] Yeah Mr. Chair. Thank you, Representative Murry for that description and as a brief comment and then just a follow-up question, is that it is my opinion that business moves at the speed of business because it is their money and it is their rear ends on the line. And that when it’s not your money and your rear ends not on the line it’s really hard to have that incentive to move at the speed of business. And with this make up of this nonprofit organization the only reason why that I can think they would move at the speed of business is either good intentions or personal motives. And my other question is that in regard to page 1 here, is how can this nonprofit provide recruiting recommendations regarding incentives or grant rewards that’s lines 13 and 14, how can they do that without having other conflicts within the following pages of the bill? Again, the part 1 about the bill about the restructuring of the Department of Commerce, my heart’s totally behind it and I appreciate all the effort that’s’ been done. But this establishment of this nonprofit has me seriously concerned. [SPEAKER CHANGES] Representative Murry? [SPEAKER CHANGES] The nonprofit can no obligate state funds. They cannot award grants. That is what Secretary ? called it the public side of the house. Which is, which the Board of Directors is, its’ everybody that you would want to be involved in that. The secretary of Commerce, Transportation, DENR, and so however if an entity is going to be charged with developing a plan and executing an economic development process that’s more nimble and flexible, then their recommendations on how an individual project fits within that structure is where they fit into this puzzle. And so this is private sector heavy with all the expertise that comes with that. And their recommendations will strongly influence how the grant’s received, versus now which is a little, it’s not quite there and I’ll let the Secretary chime in. [SPEAKER CHANGES] Representative Millis thanks for raising the question because it’s just that issue that brought me to the point to say we have to make the change to the nonprofit. In this scenario, the performance puts them on the line. That happened in stated government today. So we create the nonprofit. The state of North Carolina contracts with this nonprofit for performance recruitment. Growth of establishing of existing businesses the development of tourism and travel for the state of north Carolina, will clearly define performance expectations. My expectation is that f this organization doesn’t meet those expectations than they don’t get the contract next time around. [SPEAKER CHANGES] Follow up?

Thank you so much for that response. Just to let you know, I don't want to throw out the good for the greater here. I don't have a problem with the intent with all the aspects of tourism, the aspects of decisions making, but just the part of the recommendations of the incentive in the grands. I can make a recommendation to give you money, it may be different than me physically giving you money, but I'm still making that recommendation. I think the functions the department of commerce being done by a private entity or a non-profit entity that actually guide them to move more quickly at the speed of business is great, but I would like to see the parts about incentive grants not to be a part of this bill. Frankly, because if we get back to the aspects of the role of government, I could understand infrastructure because that's a public benefit that... may have a indirect private benefit well, but whenever you are directly given private dollars and say ??? it has an indirect public benefit, I have strong reservations about that. [SPEAKER CHANGES] Senator Brown. [SPEAKER CHANGES] I had some reservations at first until I thought through the process and what I see is a business entity coming to a particular zone meeting with the officials in that zone expressing their needs to relocate maybe in that particular zone, and I see the officials from commerce and transportation and ??? are working with us now in profit to make that happen on a quicker time frame. As I tie it together I see how it can work and I think that's why it's important that these zones were created that you have those entities in place that can work with us non-profit as well to stream line this process and make it go a lot quicker. [SPEAKER CHANGES] Thank you Senator. Representative Hamilton and consultant with staff regarding your question since we're still in the budgeting process we really can't come up with an answer for you. Representative Cunningham. [SPEAKER CHANGES] Thank you Mr. Chair and Secretary Decker for being here. Your strategic plan and your vision, thank you for that. I have just a few questions: How many projected payed positions will be created after the transition? And the annual salary on page two is capped at a hundred and twenty thousand per ??? to modify in a budget. What are looking at a average projected salary? And lastly, are the people participating for the grants under the created commission, or whatever it is, will the be required to use evidence base practices as they move forward? [SPEAKER CHANGES] Representative Murry. [SPEAKER CHANGES] I'll defer this Secretary. [SPEAKER CHANGES] Secretary Decker. [SPEAKER CHANGES] I do not have for you specific numbers of employees nor average salary. The charge given to me by the governor ??? you gotta do this for less money and fewer people. And so that's the big picture. The details of that will be worked out as we work through the economic development plan and really define the necessary resources to accomplish that plan. It will require evidence based performance so that we can measurably identify performance measures and then follow up in measurement behind them. [SPEAKER CHANGES] Thank you. Representative Catlin. [SPEAKER CHANGES] Thank you Mr. Chairman. This will be a question for Senator Brown: Is this PCS changing officially the Diener regions? [SPEAKER CHANGES] I have talked to Diener and Diener is very interested in these regions as well, as you know there are seven Diener regions now, this will allow them to actually add a Diener office in the Charlotte area which they don't have at this point, which as you can imagine, is kind of unusual. But it will allow to put a Diener office in Charlotte because the other seven regions will have a Diener office available, but not just an office, I think the key piece of it is to have a representative from Diener located in this one-stop-shop facility within those regions, that's the important piece. So they'll be at the table from the start on the ??? process. [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] I'm not sure I understood. This does change the Diener regions. [SPEAKER CHANGES] It does change the regions. [SPEAKER CHANGES] OK, I have had some concerns expressed by the marine core ??? point about that, this is, it's not a no-brainier type of thing, I think we need to look at that. [SPEAKER CHANGES] I'm not sure why they would have a concern because the region Wilmington doesn't change

The financial that day: only validate the time this summer with them, Washington is Monday that would enable a high , with the daily -fee and a time and thank you, to the head and we're doing a good way to provide that, under the macula com, an opportunity to V, which time the green company into the blood bank, and he agreed with that thing about com (SPEAKER CHANGES) Keith and the opportunity of development and then I am inclined to copy of time that we can find good documentation you I'm wondering the lead and the framework of the plan time-and-pop band-aid from getting company the time of life and times: divine intervention and bad that I believe that one, and eight of them time and I had the privilege to be of great deal,, , an opportunity by the lack of taking the time, too, but my own head into the three D, and I have a number of people to create then try out by fire, but if I'd been through a combination of what happened next Monday, one that time, you know how we will, folded into the plan and the other question about that than a two college and I'm Technology to bring up and brought together a package of people lie in one area in the bronco and on and we have a good way behind the daytime flicker Decker , banking, right next to the lack of incredibly important 211, the end, the Atty., (SPEAKER CHANGES ) 8:00 PM talk about the time that the economic help is hard for them and call Karen and high heels as much more closely aligned time or resources around as if he said that when the plane, that the economic development planned , but did you make a deposit is the opportunity to attack that left the plane from when I got that, should we do not think about the Eli technology, the band like a pretty common in rural North Carolina together , airline applications about a couple of other by peg tire and they have been taken from an advantage to doing it. After that, like I’m official like an ordinary reported and time left in the battle to keep in mind? You own a time and the one in 129 lead off about being on the contract, time and you don't play and no governmental operations and a weaker than the time of day today and what role they played a part in the night they may get back to the drawing board and I could not be where we try and do what they're eating 11 thing the contract in time for them or to live under other departments to end the day of the intended to drive a: on the gun on the contract(SPEAKER CHANGES) provisions of the loyalty of fashion when this occurs and so there can be religious labor action live, in fact, when one of the Federal work from contacting your review by the legislative body and in one way you're : football: at the time that get way. The nation and everything did that with the top of the Bear Stearns and in the meantime the contract of the envelope and we want we are likely to lead the public. One day contract and longtime be wearing 115 representative of the time that make you happy we welcome them and then the year ended weeks ago the portion of the feedback we get one of the stack of NIH clearly the status quot wasn't working as well and good, but that September's happen in the trial ??.....

for bringing this forward because the way I see it it provides pretty much a recipe for success including the three main ingredients. That is it clearly defines responsibility, it promotes and provides us and the people that we represent the accountability, and it provides us a mechanum [sp?] so we can consistently and ongoing assist outcomes. So if shifts or mods need to be applied, they can easily and readily be applied. I think, like I said, the three main ingredients for success. I support this. Let's move forward. [xx] for a motion, Mr. Chair [speaker change] Please hold Representative [xx]. Senator Brown, you're recognized to revisit the question presented to you by Representative Catlin. [speaker change] I'm hoping someone from DENR is here that might can answer this question. Representative Catlin had an issue about the, someone from Carter County not being able to go to the Washington DENR office for permitting. That doesn't change in this bill. They can continue to do that and I just wanted to make sure that he understands that that's the case. [speaker change] Mr. Robbins if you could, just identify yourself for the record. [speaker change] Neal Robbins with DENR. The senator is correct. Our regional offices will be able to retain their same character and provide customer service across the lines. There'll be no barriers for constituents who need to use services. [speaker change] Follow up, please. [speaker change] Representative Catlin. [speaker change] Thank you. Well then, maybe I'm confused, but my first question was do these regions become the DENR regions? And then the answer I got was yes. Well, if that's the case, then some counties are going to change which DENR region they get their permits from. [speaker change] Direct that to Mr. Robbins. Mr. Robbins. [speaker change] My understanding of the Prosperity Zones is that they are the zones for coordination between DOT commerce and DENR. But that's not going to affect the way our regional offices operate outside of the purposes of this bill. [speaker change] Follow up. Can somebody just tell me that this does not change the DENR permit regions. [speaker change] I would if it'd make you feel better, but- [speaker change] Senator Brown. [speaker change] Representative Catlin, that was never the intent of this bill. So, I feel pretty confident, and I think DENR has answered that question. I think the permitting process stays the same. What the Prosperity Zones does is it creates a one stop shop facility where a representative from DENR and a representative from commerce and a representative from transportation can be together to work on bigger projects than most cases. Someone wanting to relocate to North Carolina or maybe expand their business and get answers on a quicker time frame than what they can do today. [speaker change] Representative Stone. [speaker change] Thank you, Mr. Chair. I'd like to thank the committee for putting this bill together. I tell you I think it's definitely a move in the right direction. And no doubt about we have the right secretary to put this into work. I think I've talked in the past, of some of the concerns I love the fact that we were going to be moving much faster than we have in the past. When we look in some of the issues in the eastern part with the unemployment rate and the fact that we need to look at unemployment rate where to drive those business to to help out. I also have concerns because some of those districts had some of the highest tax rates and that's going to be tough. Back home in our local communities, economic development is working hard with the infrastructure, but it's also gotten involved in the game of cash incentives or tax refunds or different sorts to attract businesses. And what we're essentially doing is competing small town against small town and it's getting very difficult. So, hopefully this will solve some of that so we're not competing and making it difficult for those small towns that we can get some business there. And I'm really looking forward to coming back next year seeing how this has been implemented and the process as we move forward. So, I thank you again for the bill. [speaker change] Representative Lucas. [speaker change] Thank you, Mr. Chair. I support the content of the Prosperity Zones. I think it's an idea that we need to really do our best to implement or try because we know what we've been doing hadn't worked as well as had hoped. As it relates to intra-zone dominance, for example in the northeast region, that's just one example, you'll have counties such as Wilson and Nash and Pitt that are going to be paired with counties in the far north

Of this region like their. I don't know how we are going suppress the dominance since we high unemployment in county's like Wilson and Nash. Whats going to prevent them from really having an unfair advantage in attracting business to ?? of some other county's in that region and I imagine that it probably may exist in all of the zone but that probably is really proliferated in that particular zone is anything to guard against t hat dominance [SPEAKER CHANGES]Secretary ??[SPEAKER CHANGES] Again you are hitting right on that issues that raise the need for this approach and achieved and identified that there are larger county's and smaller county's even larger county's with higher unemployment as you are experiencing. The intention of taking this approach in the planning that turn over the media began this summer in this economic development plan is to drive out our efforts to all 100 county's. One of the things we observe in looking what we have done and we get results in small geographic areas the rig county's i live in one of those do not get the progress that we see in the core of economic development work and so in part of our intention in doing and making this change is to better focus resources on that small poorer county's were we not be able to move a needle at all. The planning work we begin this summer will include all of those county's. Now i suggest that we will spent additional time and effort in those places that have been in ?? unemployment and stuck for ??years because the fundamental work we need to do there is probably very different than the work we need to do in different parts of the zone. we need to spent enough time and enough energy and enough efforts in research in what it is really begins to transform the economy. But it is hard work for willing to commit to just the reason that have been identified are smaller county's poor county's needs some focus efforts to make them change. [SPEAKER CHANGES]Representative Farmer- Butterfield [SPEAKER CHANGES]Thank you mister chair a couple of questions and a comment. My question first is for the department I guess.How will the department work with other partners in the community to ?? skills and workers with just that seems to be critical area in transforming the economy. [SPEAKER CHANGES]secretary ??[SPEAKER CHANGES] Thanks for the question. There are several things happening right now even without this reorganization in and reform. One is in August we would be introducing through our department of work for solutions an new online system for job matching. we don't have a good system available to focus the day. You go to monster.com and all types of technologies are there but specific north Carolina. So we are going to have a new ?? to available to us on summer that would do a much better job of matching available job in the state of North Carolina with workers who are unemployed so we are behind the ?? so we are behind we should be in regard and in summer we going to see a very significant change in this regard. We are also going through a major reorganization in renewed delivery of services through work for solutions. So looking in where we need to be located in community provide resources for job re training working very very closely with our community college system and the training support that they provide from please trying to make transaction in work. SO their is lot of work going their right now and your right that the important part of solution here because we have a gap between available jobs and available workers and we have got both in each category but they are not connected very well. SO very focus is required there, [SPEAKER CHANGES]Thank you ??[SPEAKER CHANGES] What about turnover time for full implementation of the plan and the realization of jobs. [SPEAKER CHANGES]Secretary ??[SPEAKER CHANGES] The implementation of that system will began on August and will be available of?? in promotion of that in mid July and it will be working with like media ?? and the process of loading the jobs in that system and getting the data on unemployed in that system to be able to began to do the matching. So its in process right now. [SPEAKER CHANGES] Further comment [SPEAKER CHANGES]Senator Brown would like to speak on your question. [SPEAKER CHANGES]very good [SPEAKER CHANGES] Senator Brown[SPEAKER CHANGES]represent also a piece ?? on the community colleges or ?? of ?? I thought this was very important because you exactly right ?? training going to be a big part of this package as well and nothing ??

Was very important [Speaker Changes] I'm impressed with the plain, that's my comment, and I also like to say that, and looking at accountability for non-profits. I worked with one for many years, and I can tell you that in the state of North Carolina, there is accountability. Evidence based performance is critical. Annual accounting, quarterly account, annual audits, annual monitoring, is occurring in North Carolina, now in terms of commerce I cannot speak to that. [Speaker Changes] Representative Floyd [Speaker Changes] Thank you mr TS, I went around and made my comments a little bit, because somebody had already spoken on it, and that is that the department of commerce is the engine to move North Carolina forward. This bill provided reflects the ability to do that. A good road map. My concern lies on line 35 to 42, when we look at the University of North Carolina system, but we identified two and that's the University of North Carolina and North Carolina state others that could be appointed and we have also there with a twenty three member board. I'm concerned that some kind of way that never addressed the twenty five that can aloud historical African American universities to be a part of it, but when we identified these two schools in the system, and we have fourteen others, it sort of raises a flag to me. [Speaker Changes] This is the existing language for the existing North Carolina board of science and technology so what we are doing is adding community colleges and k12 that board to help make sure we've got that diverse representation, so I - [Speaker Changes] I understand. I understand the existing language, and reading, it just raises a flag. [Speaker Changes] Representative Carney [Speaker Changes] Thank you Mr. Chair. First I want to thank the bill sponsors. The committee chair for letting us fully vet this in the committee, and for the two bill sponsors bringing their two entities that started out totally different bills bringing them together into the secretary for her. Her vision and wanting to move us forward as we continue to grow North Carolina. Having said that, some member said earlier that change is difficult to embrace for a lot of people and I'm speaking for a lot of the people that have contacted me that are involved and have been involved in the past, with the development the regional economical development systems that are throughout the state. I want, if you will Mr. Chair, I would like to ask a couple questions and then make a few comments. On the issue that Representative Hamilton brought up, with the appropriations made and the budget. I think that if we're going to support what the secretary's vision is, she's going to need that money for the marketing and the branding for this new move that we're going into for economic development. I think we ought to be up front and straight forward if there is a cost, and I'm hoping that it's just going to be on the senate side, put in the budget, rather than us saying to these regional partnerships that are out there "we're going to give you so much money, then statutorily, we're going to take away 50 percent." I think that should be up front stated rather than us saying that in this bill I'm not sure what this is in there. If we're passing this bill that if it becomes law, the budget bill, that we will then, take 50 percent out of whatever we give the partnerships for the branding. Is that, if you would just share with me the intent of what you were doing here. [Speaker Changes] Senator Brown [Speaker Changes] The dollars representative Carney, the dollars that were going to the partnerships is the base that we're working off of. The existing dollars. So as we move forward I think that is the base that we are talking about working with as far as the amounts that will be decreased going to the existing partnerships. I know the secretary has worked with them as well on some of these dollar amounts. She may want to touch on that, but it's my understanding that that existing base is the dollar amount that we're talking about that were working

?? [SPEAKER CHANGES] Thank you. Well I guess what I'm just saying let's let the partnerships know up front that and put that into the amount whatever is in the budget. The other section if you would just talk to us a little bit about, we're saying we're going to repeal the regional economic development commissions the partnerships and yet now we have a section six- six that says two or more counties cities or counties and cities can create their own regional planning and economic development commission. Can you talk a little bit about that for me? [SPEAKER CHANGES] Senator Brown [SPEAKER CHANGES] Representative Carney I feel like that's going on anyway to be quite honest. I think in your area I can't help but think Mecklenburg and Cabarrus and Gaston and maybe a couple of other counties are continually working on economic development and how they can collaborate on some of those efforts. We don't want to hurt those partnerships that are already in place. And I think that's the piece that you're referring to. There's several counties that are working together throughout the state and we want to continue to let them work together on reasonable type projects that make sense for those particular counties. [SPEAKER CHANGES] Follow up? [SPEAKER CHANGES] Follow up. Thank you Mr. Chair, I'm sorry. I've shared this with the secretary. I do have some concerns about and the concerns that representative Lewis raised are all here with the non profit, that non profit is going to be advising the big guys if you will. Commerce, transportation and ?? and if we have the little groups coming in trying to compete for that private money that's going to be out there. It's almost like we're gonna have competition between the state for private dollars and the local government for those local commissions that will pop up. But overall I think we have a good plan moving forward on these prosperity zones but I hope that we're going to keep our eyes and ears open and there is an annual reporting back. As we move forward in the new early stages I wish it could be a more frequent reporting back to us. I do hope that we're going to get some clarification of these new ?? zones that we just heard of today. I think there could be a huge impact on some current projects that are already out there in confusion and maybe holding up a project as we define where those lines are. I hope that can get cleared up. Thank you.[SPEAKER CHANGES]Representative Goodman. Questions been answered? OK. Representative Bumgardner. [SPEAKER CHANGES] Thank you Mr. Chairman. For the bill sponsors on page one here down at the bottom starting at line 25, actually line 23. Department may not contract with a North Carolina non profit corporation regarding any of the following. Are all of these things listed here one through four just gonna keep going like they're going now? [SPEAKER CHANGES] Representative Murray [SPEAKER CHANGES] Our intention is likely not. They would be more focused than they are now. But I think these are all obligations of public dollars and so that's why they're staying on that side of the house. But I think with a better plan and a better execution of a plan we can have better results with any JDigg or any 1NC grants. But if the grants are going to exist we want them to be executed in a way that has a greatest yield with the best oversight and that's the intention of this partnership. [SPEAKER CHANGES] Followup [SPEAKER CHANGES] Followup. Thank you. The very title of the bill here is an act to permit the department to contract with A North Carolina non profit corporation. And it seems to me like you're wording it so that you're going to contract with somebody that's already in existence when in fact we're creating the thing that we're going to contract with. [SPEAKER CHANGES] Is that a question or a statement? [SPEAKER CHANGES] Yes it is. [SPEAKER CHANGES] I thought so. So who would like that? Representative Murry.[SPEAKER CHANGES] It is a true statement. We are creating an entity and there are functions that that entity will carry out and there are functions that that entity will not carry out. And if it involves the obligation of public dollars it will not carry

That function. [SPEAKER CHANGES] Can I follow-up one more time? [SPEAKER CHANGES] One follow-up. [SPEAKER CHANGES] Did y'all count up how many jobs we're creating here by all of these boards and commissions we're settin' up? [SPEAKER CHANGES] I think you're gonna see more streamlining of these things, actually, and so I think you'll see efficiencies realized by this reorganization. [SPEAKER CHANGES] Secretary Decker, did you want to speak to that? [SPEAKER CHANGES] Yes, in actuality, the current economic development board will go away as this comes on to their -- actually, fewer numbers in terms of that board. There will be, however, more opportunities for volunteer participation by business leadership from across the state. We will retain the Travel and Tourism Board, for example, we will retain the Film Commission, for example, but we will provide some other opportunities, particularly at a zone level, for volunteer engagement by business leadership, but existing business and new business, but not paid positions. [SPEAKER CHANGES] Representative Shepard, you're recognized for a motion. [SPEAKER CHANGES] Thank you, Mr. Chair. I move for a motion that we accept the proposed committee substitute for favorable report, Senate bill 127, unfavorable to the original, with referral to Transportation. [SPEAKER CHANGES] The motion being properly -- if the Committee will suspend for a moment. We'll suspend the motion, Representative Floyd, you'd like to send forth an amendment? [SPEAKER CHANGES] Thank you, Mr. Chair. Could you -- you have it before you? [SPEAKER CHANGES] The staff will read the amendment to the Committee. [SPEAKER CHANGES] Yes, sir, thank you Mr. Chairman, this amendment would amend page 9, line 37 of the PCS, by rewriting that line to read, "members from other components of the University of North Carolina, one of which shall be from a historically black college or university, all nominated by the" dot-dot-dot. [SPEAKER CHANGES] Would the bill's sponsor like to speak to the amendment? Representative Murry? [SPEAKER CHANGES] I appreciate Representative Floyd trying to make this legislation better and I fully support his amendment. [SPEAKER CHANGES] Do members of the Committee actually need to see a copy of the amendment, or can we just move forward to its adoption? All in favor of the Floyd amendment, please say aye, all opposed? The amendment is adopted. Representative Shepard, if you could amend your motion. [SPEAKER CHANGES] I make a motion that we accept the proposed Committee substitute as amended for Senate bill 127, unfavorable to the original, with a referral to Transportation. Does that cover it? [SPEAKER CHANGES] Rolled into a new Committee substitute. [SPEAKER CHANGES] Rolled into a new Committee substitute. [SPEAKER CHANGES] The motion now being properly before the Committee, all in favor say aye, all opposed, say no. The motion is adopted. Senate bill 127 moves to its next committee. The Chair would like to thank Secretary of Commerce Sharon Decker for attending and being available to the Committee, good work on the part of the Committee, we stand adjourned.