A BILL TO BE ENTITLED
AN ACT to improve the effectiveness and efficiency of the ECONOMIC DEVELOPMENT Board in the formulation of the State's economic development policies, TO provide for GREATER TRANSPARENCY AND accountability in the state's efforts to create jobs for north carolina citizens, to create the joint legislative committee on economic development oversight, and to require reporting by the regional economic development commissions.
The General Assembly of North Carolina enacts:
SECTION 1.(a)  The General Assembly finds that the State has long recognized the need for a coordinated economic development program that encompasses all areas of the State and all activities and includes long‑range planning. Over the last 15 years, its efforts to provide for such a program have included creating the Economic Development Board, mandating a government performance audit study, and expanding the responsibilities of the Board in light of the study and in light of continuous changes in the State's economic situation.
SECTION 1.(b)  The General Assembly recognizes that economic development efforts on behalf of the State encompass a broad range of activities by various parties for the purpose of increasing and maintaining the State's economic vitality. It is especially important that a single entity oversee economic development efforts in the State to prevent duplication and to promote efficiency and effectiveness.
SECTION 1.(c)  The General Assembly has identified the Economic Development Board in the Department of Commerce as the economic development policy development and planning source to advise the legislature and the executive branch, to coordinate economic development efforts by various State agencies and by local governments and local development organizations, and to develop and evaluate annual long‑range economic development plans.
SECTION 1.(d)  The General Assembly recognizes that the responsibilities assigned to the Board are numerous and complex and that it has not always been possible for the legislature or the public to monitor the Board's efforts in carrying them out, to evaluate its successes and failures, or to receive current information on procedures and programs.
SECTION 2.(a)  It is the intent of the General Assembly to evaluate the current law establishing procedures for coordinating State, local, and regional economic development efforts and consider ways in which the procedures could be improved to provide greater transparency and regular feedback and updates.
SECTION 2.(b)  It is the intent of the General Assembly to evaluate the extent to which the long‑range comprehensive plans developed by the Board have achieved their goals and have anticipated and addressed global changes such as the decline of tobacco as an economic force in this State and the exodus of manufacturers to other countries. It is the intent of the General Assembly to determine whether improvements to the planning procedure and structure could enhance the State's ability to anticipate and address these types of trends before the damage to the economy has occurred.
SECTION 2.(c)  In carrying out these efforts, it is the intent of the General Assembly to consider staffing and funding issues for the Board, periodic reporting and publication of information, and a system for accountability for responsibilities assigned to various State and local entities.
SECTION 3.  Chapter 120 of the General Statutes is amended by adding the following new Article to read:
"Article 26A.
"Joint Legislative  Committee on Economic Development Oversight.
"§ 120‑236.  Creation and purpose of the Joint Legislative Committee on Economic Development Oversight.
There is established the Joint Legislative Committee on Economic Development Oversight. The Committee shall review current economic development procedures and strategies that impacts public policy. The goals and objectives of the Committee shall be to evaluate the extent to which the long‑range comprehensive plans developed by the Economic Development Board have achieved their goals and have anticipated and addressed global changes such as the decline of tobacco as an economic force in the State and the exodus of manufacturers to other countries. The Committee shall determine whether improvements to the planning procedure and structure could enhance the State's ability to anticipate and address these types of trends before the damage to the economy has occurred. 
"§ 120‑237.  Committee membership; terms; organization; vacancies.
(a)	The Committee shall consist of 16 members as follows:
(1)	Six members of the Senate at the time of their appointment, appointed by the President Pro Tempore of the Senate.
(2)	Six members of the House of Representatives at the time of their appointment, appointed by the Speaker of the House of Representatives.
(3)	Two members of the public appointed by the Speaker of the House of Representatives and two members of the public appointed by the President Pro Tempore of the Senate, each of whom shall be actively involved in the business of economic development. The public members shall reflect the geographic diversity of the State.(b)	Members of the Committee shall serve terms of two years beginning on August 15 of each odd‑numbered year.  Initial terms shall commence on August 15, 2003.
(c)	Members who are elected officials may complete a term of service on the Committee even if they do not seek reelection or are not reelected, but resignation or removal from service constitutes resignation or removal from service on the Committee.
(d)	The President Pro Tempore of the Senate and the Speaker of the House of Representatives shall each select a legislative member from their appointees to serve as cochair of the Committee.
(e)	The Committee shall meet at least once a quarter and may meet at other times upon the call of the cochairs. A majority of the members of the Committee shall constitute a quorum for the transaction of business. The affirmative vote of a majority of the members present at meetings of the Committee shall be necessary for action to be taken by the Committee.
(f)	All members shall serve at the will of their appointing officer. A member continues to serve until the member's successor is appointed. A vacancy shall be filled within 30 days by the officer who made the original appointment. 
"§ 120‑238.  Assistance; per diem; subsistence; and travel allowances.
(a)	The Committee may contract for consulting services as provided by G.S. 120‑32.02. Upon approval of the Legislative Services Commission, the Legislative Services Officer shall assign professional and clerical staff to assist in the work of the Committee. The professional staff shall include the appropriate staff from the Fiscal Research, Research, Legislative Drafting, and Information Systems Divisions of the Legislative Services Office of the General Assembly. Clerical staff shall be furnished to the Committee through the offices of the Senate and the House of Representatives Supervisors of Clerks. The expenses of employment of the clerical staff shall be borne by the Committee. The Committee may meet in the Legislative Building or the Legislative Office Building upon the approval of the Legislative Services Commission.
(b)	Members of the Committee shall receive per diem, subsistence, and travel allowances as follows:
(1)	Committee members who are members of the General Assembly, at the rate established in G.S. 120‑3.1.
(2)	Committee members who are officials or employees of the State or of local government agencies, at the rate established in G.S. 138‑6.
(3)	All other Committee members, at the rate established in G.S. 138‑5.
"§ 120‑239.  Committee authority.
The Committee may obtain information and data from all State officers, agents, agencies, and departments, while in discharge of its duties, under G.S. 120‑19, as if it were a committee of the General Assembly. The provisions of G.S. 120‑19.1 through G.S. 120‑19.4 shall apply to the proceedings of the Committee as if it were a committee of the General Assembly. Any cost of providing information to the Committee not covered by G.S. 120‑19.3 may be reimbursed by the Committee from funds appropriated to it for its continuing study." 
SECTION 4.  G.S. 143B‑434.01 reads as rewritten:
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"(h)	Goals and Objectives. – The Board using data from the public input and the environmental scan, shall formulate a list of goals and objectives. Goals shall be long‑range, four years or more, and shall address both needs of economically distressed Regions and counties as well as opportunities for Regions and counties not distressed. The goals shall be developed with realism but should also be selected so as to encourage every Region and county within the State to develop to its maximum potential. Objectives shall be one year or less in scope and shall, if achieved, lead to the realization of the goals formulated by the Board as provided in this section.
Both goals and objectives should be stated largely in economic terms, that is, they should be related to specific population, employment, demographic targets, or economic sector targets. Both efficiency and equity considerations are to be addressed and balanced with special emphasis placed on the needs of disadvantaged or economically distressed populations and communities. The goals and objectives should not state how the economic targets are to be reached, but rather what the economic conditions will be if they are obtained. So that the progress of North Carolina's economic development efforts can be monitored, the Board 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. The goals and objectives formulated by the Board shall include the following:
(1)	A specific target number of new jobs to be created in the State. The target number shall be broken down by county and Region and by new and existing businesses.
(2)	A specific target rate of unemployment for the State and for each county and Region.
(3)	An estimate of the number of jobs that will be lost in the State and in each county and Region.
(4)	A specific target dollar amount of new capital investment in the State and in each Region.
(i)	Formulation of Economic Development Strategy. – The Plan shall have as its action component a strategy set forth in a blueprint for directing resources of time and dollars toward the satisfaction of the goals and objectives stated in subsection (h) of this section. As a practical consequence of the economic environment, a focus on the competitiveness of indigenous industries and entrepreneurial development is required. The Plan shall include a strategy for the coordination of initiatives and activities for workforce preparedness, funded by federal or State sources, including, but not limited to, vocational education, applied technology education, remedial education, and job training, and the achievement of the economic development goals of the Plan. A balance of opportunity between rural and urban regions and between majority and minority populations should be an overriding consideration. Equity of opportunity for counties and communities across the State will involve the explicit consideration of local fiscal capacity and the fiscal ability to support development activities.
The concept of differentiation should be employed. The Plan should recognize the various strengths and weaknesses of the State and its component regions, subregions, and, in some cases, individual counties. The concept of market segmentation should be employed. Different Regions and subregions of the State should be promoted to different markets.
(j)	Implementation Plan. – Based upon all of the foregoing steps, the Board 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.
(k)	Annual Report. – The Plan shall contain a section devoted to measuring results, to be called "An Annual Report on Economic Development for the State of North Carolina". The Annual Report shall contain a comparison of actual results with stated goals and objectives and significant and meaningful statistics to allow policymakers to adjust strategy and tactics as necessary to achieve the formulated goals.
The Annual Report shall break down data by Regions and counties including:
(1)	The net job change (expansions minus contractions) by the various economic sectors of the county, Region, and State. The net job change shall be compared to the targeted numbers for job creation, job loss, and unemployment rate established in the goals and objectives.
(2)	Realized capital investment in plants and equipment by new and expanding industry in each county, Region, and State. The realized capital investment shall be compared to the targeted amount established in the goals and objectives.
(3)	Manufacturing changes by county, Region, and State that affect the value of firms, total payrolls, average wages, value of shipments, contributions to gross State product, and value added.
(4)	The net change in the number of firms by county, Region, and State with statistics on the dynamics of change:  relocations in versus relocations out; births versus deaths; and expansions versus contractions.
(5)	A measure of the status and performance of all sectors of the county, Region, and State economy including, but not limited to, manufacturing, agriculture, trade, finance, communications, transportation, utilities, services, and travel and tourism.
(6)	An assessment of the relative status and performance of rural business development as opposed to that in urban areas.
(7)	An analysis of the status of minority‑owned businesses throughout the State.
(8)	An assessment of the development capability of the various Regions of the State in terms of their environmental, fiscal, and administrative capacity. Those areas that are handicapped by barriers to development should be highlighted.
(9)	An evaluation of the State's economic performance as indicated by the above statistics with the goals and objectives outlined in the Plan.
(l)	Accountability. – The Board shall make all data, plans, and reports available to the General Assembly and the Joint Legislative Commission on Governmental Operations at appropriate times and upon request. The Board shall prepare and make available on an annual basis public reports on each of the major sections of the Plan and the Annual Report indicating the degree of success in attaining each development objective."
SECTION 5.(a)  By February 15, of each fiscal year, beginning in 2004, the seven regional economic development commissions shall report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
(1)	The preceding fiscal year's program activities, objectives, and accomplishments;
(2)	The preceding fiscal year's itemized expenditures and fund sources;
(3)	Demonstration of how the commission's regional economic development and marketing strategy aligns with the State's overall economic development and marketing strategies;
(4)	To the extent they are involved in promotion activities such as trade shows, visits to prospects and consultants, advertising and media placement, the commissions shall demonstrate how they have generated qualified leads.
The regional economic development commissions shall provide copies of the organization's annual audited financial statement to the Fiscal Research Division within 30 days of issuance of the statement.
The reporting requirements of the regional economic development commissions shall be reviewed annually by the North Carolina Partnership for Economic Development and recommendations for changes to the reporting requirements shall be made to the Joint Legislative Committee on Economic Development Oversight.
SECTION 5.(b)  The structure of the North Carolina Eastern Regional Economic Development Commission shall be studied, in accordance with the recommendation in the UNC Kenan‑Flagler study, to determine if their board structure should be reconstituted and made similar to that of North Carolina's Northeast or Southeast Regional Commission.
The North Carolina Eastern Regional Economic Development Commission shall contribute to the cost of this study by retaining a consultant familiar with the Commission.
The study shall be conducted by a designee of the North Carolina Partnership for Economic Development determined by the Partnership Presidents, a designee of the UNC Kenan‑Flagler School, and consultant(s) retained by the Eastern regional commission.
None of the eastern regions shall be consolidated.
This study shall be submitted to the Joint Legislative Committee on Economic Development Oversight and the North Carolina Partnership for Economic Development prior to the beginning of the 2004 legislative session.
SECTION 6.  This act is effective when it becomes law.