NC Local Governments, Meet Your New State Partner for Economic Development
Published for Community and Economic Development (CED) on July 29, 2014.
North Carolina local governments have a new partner in their economic development efforts. Session Law 2014-18 authorizes the North Carolina Department of Commerce to enter into a contract with a nonprofit entity in order to carry out many of the Department’s economic development recruiting and marketing functions for the state. The nonprofit entity has already been incorporated and dubbed the Economic Development Partnership of North Carolina. In order to assist local governments with understanding their new economic development partner, this post describes the enabling legislation and some of the significant requirements imposed on the entity.
Session Law 2014-18 enacts new G.S. 143B-431A, which sets forth parameters for the Department of Commerce (“Commerce”) to follow in contracting with a nonprofit entity (“contracted entity”) to carry out several of the department’s economic development functions. Those parameters are broken down in this post into the following categories: contracted functions, private funding, oversight and governance, and mandatory reporting. Each will be described in turn.
Contracted Functions
General Statute (G.S.) 143B-431 lists the functions of Commerce, which include “all of the executive functions of the State in relation to economic development and employment security, including by way of enumeration and not of limitation, the expansion and recruitment of environmentally sound industry, labor force development, the administration of unemployment insurance, the promotion of and assistance in the orderly development of North Carolina counties and communities, the promotion and growth of the travel and tourism industries, and energy resource management and energy policy development,” among others.
New G.S. 143B-431A authorizes the department to contract with a nonprofit entity for carrying out many of those listed functions, but media reports have focused on the economic development recruiting and marketing functions of Commerce. The legislation does not transfer all functions—it specifically prohibits Commerce from assigning the following functions to the contracted entity:
- Commerce may not contract with the nonprofit for the administration of any funds received from the federal government.
- Commerce may not delegate its responsibility to obligate or commit Commerce funds provided under Article 10 of G.S. Chapter 143B, to include state economic development incentives such as the One North Carolina Fund, the Job Development Investment Grant (JDIG) Program, the Industrial Development Fund, and the Job Maintenance and Capital Development Fund.
- Commerce may not contract for the functions of the Division of Employment Security or authorities it controls pursuant to G.S. 143B-431(a)(2), such as the State Board of Alcoholic Control, the Utilities Commission, the North Carolina Industrial Commission, the Commissioner of Banks, and the Rural Electrification Authority.
Topics - Local and State Government