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House and Senate give tentative nods to Commerce reorganization

Posted June 5, 2014

— The state House and Senate on Thursday gave tentative approval to different versions of a bill designed to turn the marketing and job-recruitment functions carried out by the Department of Commerce to a private nonprofit. 

Although the two measures started out the same when they were first introduced in committee Wednesday, a series of amendments have changed their content significantly. In the Senate, lawmakers rolled in a remake of the state's film incentives program. Homeland filming in Raleigh Senate wants a new grant program for film incentives

In the House, the biggest change came courtesy of an amendment by Rep. Rick Glazier, D-Cumberland, that placed employees of the new nonprofit under the State Ethics Act. Originally, the measure would have only required the nonprofit to adopt an ethics and gifts policy. But workers would have been exempt from requirements that apply to state officials that they disclose various financial interests such as stock ownership and real estate holdings. 

"We're going to run off private-sector people from helping us to move North Carolina forward," Rep. Tom Murry, R-Wake, said of the amendment. "We need this public-private partnership to move at the speed of business, not the speed of government."

But Glazier pointed out that other bills aimed at creating the partnership had contained the disclosure requirements. Also, he said, when public-private partnerships in other states had run into problems, it was due to a lack of ethics oversight that allowed pay-to-play situations to develop.

Rep. Grier Martin, D-Wake, said that other states had awakened to headlines about public-private partnership officials involved in scandals. 

"If you don't vote for this amendment, I think you are increasing the likelihood of that bad headline happening," Martin said.

Glazier's amendment passed 67-48, although initially the vote was much closer. Several members switched their votes after the fact. 

Fundamentals are the same

Despite the major amendments, the bills still function substantially the same. The Commerce Department would turn over functions such as tourism promotion and job recruitment to a new nonprofit. Although the responsibility for granting incentives would remain with state workers, the nonprofit would be responsible for finding and providing service to businesses thinking of relocating to the state.

"Sales and marketing is not what government does well," Murry said, explaining the measure on the House floor.

Proponents have said that job recruiters need to act more like the businesses they are trying to attract to North Carolina. 

Rep. Mickey Michaux, D-Durham, raised questions about how the switch would be financed.

"We're talking about a rather large amount of money," Michaux said.

Murry said the Commerce Department would cover the cost of the transfer out of its existing budget.

During committee hearings Wednesday, Commerce Secretary Sharon Decker said the state would spend 5 percent less on the partnership than it does on the same functions as part of government. That amounts to roughly $17.5 million per year, according to estimates given to lawmakers. The nonprofit would be required to raise $6 million of its own money over the next five years, according to both bills. 

In the House, the bill passed 73-41. Although Republicans largely favored the bill and Democrats largely voted against, a handful of members from both parties crossed political lines over the bill. 

"I have a philosophical problem with taking taxpayer money to entice ... businesses to relocate here," said Rep. Dana Bumgardner, R-Gaston. 

In the Senate, most of the debate focused on a grant program for film producers added to the bill Thursday morning. The vote in that chamber was 38-6, with five Republicans and one Democrat voting no.

Sen. Andrew Brock, R-Davie, objected to spending any money on film incentives when the state had pressing needs for building repairs. Senate leaders propose taking money from the state's emergency reserve account and its building fund to pay for the incentives. 

Both the House and Senate will need to take another set of votes on the bills next week. After that, it is unclear what course the legislative process will follow. In order for a measure to become law, the same bill must pass both the House and the Senate. Presuming both bills pass their respective chambers, they will still only be half-way through the process.

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  • Greg Boop Jun 6, 2014
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    North Carolina formerly had a non-profit focused on economic development and jobs - the North Carolina Rural Economic Development Center - which was set-up previously by the Democratic-majority legislature. The Republicans declared that this entity to be the worse idea ever and had to go - primarily because it had little oversight, poor records, created no jobs, and primarily handed out tax-payer money to relatives & friends of Democrats.

    Now the Republicans after eliminating the Rural Center want to create a non-profit economic development entity that will have little oversight, limited record keeping, and hand-out taxpayer money.

    Sounds similar - except for the list of relatives & friends who will receive the tax-payer money.

    Earlier WRAL article on the demise of the Rural Center -
    http://www.wral.com/rural-center-controversy-topples-chairwoman/12727259/

  • 42_wral_mods_suck_i'm_gone Jun 6, 2014

    "functions carried out by the Department of Commerce to a private nonprofit. "

    A private non-profit owned by a big campaign donor that will get a fat salary ensuring they organization non-profitability.

  • miseem Jun 6, 2014

    Glazier's amendment passed 67-48, although initially the vote was much closer. Several members switched their votes after the fact.

    Yeah. I guess they feel that voting for ethics instead of against them would be better on their resume on the next election. And they felt safe from ALEC sanctions since it passed already. Too bad we don't know the names of the ones who flip flopped on this.