Members please note: The NCCBI offices will be closed Monday for Memorial Day
Other stories below: Budget talks falter as leaders mull sin taxes to plug revenue hole.... Tax increment financing bill reaches Senate floor.... Legislature honors NASCAR on eve of big race.... Senate panel considers medical malpractice reform bill.... Conferees named to resolve issue over funding for urban loops.... Board embraces biomanufacturing program.... Appeals Court sides with employer in important carpal tunnel case.... Case tests contingency-fee practices in workers' comp awards....NCCBI news....

Efficiency Commission Update
Surprise! Major state bureaucracies embrace cost savings ideas
Two major state government bureaucracies have joined the chorus singing about the need for improved efficiency. They even suggested significant changes that will make a difference. The State Personnel Office and Chief Information Office were responding to a request earlier this year by Gov. Mike Easley that asked state government agencies to say how and whether they could implement recommendations by the governor’s Efficiency Study Commission.

Information Technology (IT) and personnel costs are two of the largest expenses in the state’s budget. The Office of the State Controller has indicated that total state expenditures on IT in 2001-2002 were $700 million. Some think the total now is more than $1 billion of the state’s approximately $15 billion budget. “If the state implements the IT efficiency recommendations in an expeditious and purposeful manner, significant immediate and on-going savings will accrue,” said the response from the Chief Information Officer.

The Senate version of the state budget for the year starting July 1 includes a provision that would require an IT study commission to report its recommendations for efficiency back to the 2004 General Assembly. The governor’s newly formed Council for Fiscal Reform is also expected to review the IT program. “If we can improve efficiency by 10 percent we would save nearly $100 million,” said Jim Hyler, co-chair of the Council for Fiscal Reform and past chair of NCCBI and the Efficiency Study Commission. 

Several of the CIO recommendations could be implemented with executive orders from the governor. Those include one that would more clearly define authority and eliminate duplication. “We’ll be asking the Governor to move forward on some of those,” said Hyler. Other changes will require legislation and appropriations. 

Some of the Efficiency Commission’s recommendations addressed in the Office of State Personnel response were:

 Prospectively eliminating longevity pay and funding additional pay for excellent performance.  Allowing employees with special expertise to return to work without penalty.
 Consolidating bids for optional bids for state government employees. Currently supplemental benefit offerings vary from agency to agency. 
 Increasing the amount of time that an employee must work in order to be eligible for retiree health benefits.
 Modernizing personnel administration.
 Reducing the number of duplicate personnel system.

Several of these measures are sensitive and likely to provoke debate. With the General Assembly dealing with a budget shortfall and anxious to get out of town, there’s been some built in reluctance to take on most of these issues this session. Hyler said that the Council would push for changes that can be made administratively.

At a recent meeting, Dan Gerlach, Governor Easley’s budget advisor, told the Fiscal Reform Council that state agency responses to the Efficiency Commission recommendations were still dribbling in, with some agencies embracing change and others something less than that.

“Thus far the momentum for cost saving efficiency has been pretty good,” said Phil Kirk, president of NCCBI.  “We’re glad to see the positive responses from state personnel and the CIO. We hope that for others when real changes to existing turf are closer to reality they won’t mind the grass being cut.”

NCCBI has been a major catalyst for efficiency to become a higher priority for state government. As part of that effort, NCCBI created a special information and education arm called NCBEST, which analyzed the reports from State Personnel and the Information Office. 

Budget talks falter as leaders mull sin taxes to plug revenue hole
For the second week in a row, House and Senate conferees made little progress on resolving differences in the budgets each chamber has passed. The holdup continues to be a struggle to plug a $400 million revenue gap that’s developed in the current year’s budget plus differences in the revenue packages the chambers have adopted for the next biennium. As the conferees huddled behind closed doors, representatives of several groups descended on Jones Street to argue for higher taxes instead of additional cuts in education and social programs. Those pleas seemed to evoke a response in the Senate, where President Pro Tem Marc Basnight indicated he would look favorably on higher sin taxes. "You have to look at the lottery, the cigarette tax, the alcohol tax -- the taxes that don't affect our rankings," he told one reporter. However, the House seems dug-in against any taxes beyond continuing the half-cent sales tax and the higher income tax rate on wealthy individuals.


Tax increment financing bill reaches Senate floor
With dozens of mayors and city council members watching, the Senate Committee on Finance on Wednesday favorably reported S. 725 Local Option Project Development Financing, a measure that would provide an additional financing tool for local governments to use in restoring run-down areas and promoting economic development through public/private partnerships. The bill, which would require a change in North Carolina’s constitution, is strongly supported by NCCBI, the League of Municipalities, the Association of County Commissioners, local chambers of commerce and many others. The bill now goes to the Senate floor for consideration.

Wednesday was “Town Hall Day” in the General Assembly and local government officials were on hand to talk with elected leaders about a number of issues, including project development financing. Ellis Hankins, executive director of the League of Municipalities, told the Finance Committee that the legislation would give local governments a new financing option, called tax increment financing, but would have safeguards through oversight by the state Treasurer and the Local Government Commission. Using project development financing, a city or county could define a redevelopment district and then partner with a private developer to initiate a project. To finance the project, the local government would issue bonds that would be repaid from taxes on the resulting higher value of the property. The bonds could be used only for the portion of the project that is funded by the local government; for example, a parking deck adjacent to an office building paid for by a private developer. A further explanation of tax increment financing can be found in NCCBI’s position statements under the Tax and Fiscal Policy Committee.

Others speaking in support of the legislation included Winston-Salem Mayor Allen Joines; Greensboro Mayor Keith Holiday; N.C. Department of Commerce legal counsel Don Hobart; NCCBI Vice President of Governmental Affairs Leslie Bevacqua; David Knight, representing the state chapter of the State Planning Association; Paul Wilms, representing the N.C. Home Builders Association; Jeff Merritt, representing the N.C. Metropolitian Alliance; and John Peterson of the N.C. Economic Developers Association.

Mayor Holiday told the group that the legislation would allow some creative financing for local governments and would “be an extra tool in our tool kit when we are competing with other states for economic development projects.” Mayor Joins said an example of a project that would have benefited from this financing option was the new office building in downtown Winston-Salem. Bevacqua noted that this is an important issue to local chambers of commerce across the state. She noted that 48 other states have given local governments this authority.

Legislature honors NASCAR on eve of big race
Every year the General Assembly passes resolutions honoring worthy causes or notable individuals. But recently the legislature extended his highest praise and courtesies to an unusual recipient – NASCAR. The resolution honoring NASCAR came amid a growing awareness of the sport’s $1.5 billion economic impact on the state’s economy, most of it in Charlotte, Concord, Rockingham and Iredell County, and amid concerns that one or more of the NASCAR races may be moved to other states.

The Coca-Cola 600 will be run Sunday at Lowe’s Motor Speedway. Built more than four decades ago, the largest sports facility in the Southeast has 167,000 permanent seats, including 121 executive suites, and capacity for nearly 50,000 more spectators in the infield area. Lowe's Motor Speedway was the first superspeedway to host night racing in 1992 and was the first sports facility in America to offer year-round living accommodations when it released 40 condominiums for sale high above Turn One in 1984.

Below is a text H. 1161 (Goodwin, McMahan, L. Johnson and Barnhart) a Joint Resolution Honoring NASCAR, its Pioneer Racing Families and Drivers, and North Carolina Motor Racing:

Whereas, North Carolina takes great pride in its position as the stock car racing capital of the United States and the world; and

Whereas, North Carolina is the home of NASCAR, which staged its first sanctioned "purely stock car" race at the Charlotte Speedway on June 19, 1949; and

Whereas, since that time, NASCAR and motorsports events have become and remain hugely popular with the people of North Carolina, with more than one million people attending motorsports events in North Carolina each year, thereby substantially enhancing the tourism industry in and economy of North Carolina; and       

Whereas, North Carolina currently hosts five NASCAR Winston Cup events, with two being held at the North Carolina Speedway in Rockingham and three at the Lowe's Motor Speedway, near Charlotte, and is thus the stock car racing capital of the world; and       

Whereas, these Winston Cup races materially affect North Carolina's economy, and the loss of any Winston Cup event would have a tremendous negative impact on jobs and tax revenues in the Rockingham and Charlotte areas and the tourism industry in North Carolina in general; and       

Whereas, North Carolina has established the William States Lee College of Engineering at the University of North Carolina at Charlotte which offers an undergraduate program concentrating on motorsports engineering; and       

Whereas, after World War II, stock car racing evolved as a sport in the foothills, the pinewoods, and the piedmont of North Carolina, quickly becoming one of the deepest traditions in North Carolina popular culture; and       

Whereas, more NASCAR teams are located in North Carolina than in any other state; several world-class tracks stretch across North Carolina and provide racing enthusiasts with a chance each year to watch the legends of stock car racing; and North Carolina has produced more Winston Cup champions than any other state; and       

Whereas, no one who ever saw them will forget the legendary pioneer stockcar drivers who were native or adopted Tar Heels, such as Curtis Turner, Fireball Roberts, Lee Petty, Speedy Thompson, Herb Thomas, Banjo Matthews, Junior Johnson, Ralph Earnhardt, Wendell Scott, Tim and Fonty Flock, Buck Baker, and others too numerous to mention; and       

Whereas, the Pettys, the Earnhardts, and the Jarretts of North Carolina are among the most famous racing families in the world and still call North Carolina home; and       

Whereas, it is in the best interests of North Carolina and of NASCAR to continue the extremely close relationships that have developed and to continue to cooperate and work together to provide and retain the current Winston Cup races held at Rockingham and Charlotte; and       

Whereas, in 1996, a study prepared by the North Carolina Department of Commerce found that the motorsports industry contributed $392 million to the State's economy and employed more than 4,000 people, and in 2003, that economic impact figure has climbed to over $1.5 billion and more than 10,000 jobs; Now, therefore,  Be it resolved by the House of Representatives, the Senate concurring:               

SECTION 1.  The North Carolina General Assembly celebrates, commends, and commemorates NASCAR for the many valuable contributions it has made to the sporting scene and popular culture in North Carolina and its important support of and contributions to North Carolina's economy.       

SECTION 2.  The North Carolina General Assembly celebrates and honors the memory of the Pettys, the Earnhardts, and the Jarretts, North Carolina's famous racing families, as well as the memory of the courageous pioneer stock car drivers, who made NASCAR and North Carolina motorsports the legends that they are today.       

SECTION 3.  The Secretary of State shall transmit a certified copy of this resolution to the governing body and officers of NASCAR, to the owner of the North Carolina Speedway, and to the owner of the Lowe's Motor Speedway.

Senate panel considers medical malpractice reform bill
The Senate Select Committee on Insurance and Civil Justice Reform held two meetings this week to consider S. 9 Medical Malpractice Damages/Attorneys’ Fees. Tuesday’s meeting was focused on the collateral source provision in the proposed legislation. At a Wednesday meeting, the committee heard Insurance Commissioner Jim Long say that a cap on medical malpractice awards should include a provision that any savings achieved should be allied to the cost of premiums. Long suggested that legislators should consider several options, including a cap on the fees of attorneys who represent doctors and hospitals in malpractice cases. S.9 would cap non-economic damages in medical malpractice cases at $250,000. It would also limit the contingency fees paid to lawyers in those cases. The committee expects to have several additional informational meetings before taking action on the bill.


Conferees named to resolve issue over funding for urban loops
The Senate on Tuesday rejected, by a vote of 46-3, House amendments to S. 384 (Gulley, Lucas) Durham Northern Loop Corridor and conferees were appointed. The bill originally amended the Highway Trust Fund to provide funding for urban loops in Durham and Fayetteville but had been amended by the House to include Wilmington's Southern Loop project. Appointed as Senate conferees were Sens. Wib Gulley, Daniel Clodfelter, Linda Garrou, Tony Rand, Robert Rucho and Larry Shaw. It’s expected that conferees will agree on adding Wilmington’s loop road to the bill, plus a loop road for Winston-Salem.

House committee approves bill calling for DNA database
The Science and Technology Committee on Wednesday favorably reported H. 1256 Voluntary DNA Database Biotech, a measure that directs the state Commerce Department to set up a database of DNA samples with citizens would voluntarily donate. The registry could be accessed by companies conducting medical research and is being promoted as a way to further develop the state’s medical research community. If the bill passes, North Carolina apparently would be the first state to operate such a database specifically for medical uses. The bill now goes to the House Finance Committee.

Briefly Noted: The House on Tuesday voted 108-6 on third-reading for S. 931 (Shubert) No Portfolio Required/Teacher Certification, legislation that would eliminate a requirement that new teachers compile a portfolio before they can be licensed in North Carolina.  The measure was returned to the Senate for concurrence in amendments.


Legislative Actions

 The House on Wednesday gave second- and third-reading approval to S.776 (Dalton) Workers' Compensation/Definition of Employee and returned the bill to the Senate for concurrence in amendments.
 
 The Senate on Wednesday gave second- and third-reading approval to H. 462 (Alexander) Health Insurance/Marriage & Family Therapists, H. 744 (Hackney) Managed Care Patient Assistance and H. 913 (Brubaker) Universal Telephone Service Provider, and the measures were enrolled.

 The Senate on Wednesday gave second- and third-reading approval to S. 1021 (Soles) Confirm Jo Anne Sanford Utilities Commission and sent the bill to the House.

 The Senate Judiciary I Committee on Thursday favorably reported H. 842 (Michaux) Help America Vote Act Compliance, a measure that would bring North Carolina into compliance with the federal Help America Vote Act. The federal law requires states to standardize voter registration and provisional ballots. By 2006 North Carolina will have to abolish punch-card ballots and lever voting machines, provide better access to voting places for the disabled. The state will get $37 million from the federal government to help pay for the improvements.  The House-passed bill now goes to the Senate floor.

New Laws in the Making

The enrolling clerk reports the following bills duly ratified for presentation to the governor:
 S. 814 an act to clarify the law regarding competitive and deregulated offerings of telecommunications services.   
 H. 103 an act to increase the membership of the board of trustees of the North Carolina School of Science And Mathematics to conform to the increase in the number of congressional districts in this state.
 H. 234 an act to clarify the application process for community college students requesting financial assistance.
 H. 950 an act to require the Department of Juvenile Justice and Delinquency Prevention to obtain the approval of the court before placing a juvenile committed to the department in a program not located in a youth development center or detention facility.
 S. 323 an act to protect the identity of a complaining party against a licensee or an unlicensed general contractor by the licensing board for general contractors and to clarify when the board may seek injunctive relief.
 S. 468 an act to clarify the law governing the modification and termination of irrevocable trusts.
 S. 517 an act to reduce the minimum membership of the global Transpark Development Commission, also called the Eastern Region Commission. 
 S. 555 an act to clarify that it is a felony for a school safety officer to have sexual contact or take indecent liberties with a student.
 S. 559 an act to clarify the motor vehicle dealer franchise laws.
 S. 619 an act to provide that a blood analysis report sent directly to the clerk of superior court may be used as the basis for the civil revocation of a drivers license.
 S. 630 an act to clarify the definition of a protective order under the laws relating to domestic violence.
 S. 825 an act to authorize the wildlife resources commission to protect certain reptiles and amphibians that require conservation measures.
 S. 940 an act to provide job protection for volunteer firefighters, rescue squad workers, and emergency medical services personnel called into the service of the state in response to a proclamation of a state of disaster by the governor or the general assembly, or in response to an emergency situation resulting in the activation of the state emergency response team.
 H. 22 an act to authorize the Department of Transportation to use the portion of contract maintenance resurfacing funds allocated to widening existing narrow pavements scheduled for resurfacing to widen any existing narrow pavements and to authorize the department of transportation to use Highway Trust Fund secondary road paving funds allocated to each county for the additional purpose of safety improvements on paved and unpaved roads in the same county, as recommended by the Joint Legislative Transportation Oversight Committee.
 H. 1177 an act to provide that physicians in good standing to practice medicine in another state may practice medicine or surgery at a camp for therapeutic recreation for individuals with chronic illnesses under certain restricted conditions.

Economic Development

Board embraces biomanufacturing program, tax increment financing
The N.C. Economic Development Board adopted resolutions supporting a comprehensive biomanufacturing training and education program and local option project development financing in its quarterly meeting on Wednesday at the Marriott Downtown in Greensboro. Robert Stolz, chairman of the Economic Development Board and a member of NCCBI's board and executive committee, presided. After hearing presentations by J.B. Milliken, vice president of the UNC System, and Hal Price of Biogen in RTP, the board signaled its strong support for a Biomanufacturing Training Center at N.C. State University with a component at N.C. Central University. Funding is being sought from the Golden LEAF Foundation and other sources. Randall Kaplan of Greensboro made the motion to support the program and NCCBI President Phil Kirk seconded it, and the vote was unanimous. Mac Williams from Asheville presented the legislative proposal to allow local option project development financing. The bill, if enacted, would allow local governments to issue bonds to assist with economic development projects and the increased tax revenues would pay back the bonds. Forty-eight states have similar provisions in effect. "Not having this economic development tool puts North Carolina at a real disadvantage," Kirk said. "We need to be doing everything possible to create jobs for our citizens and this is a great opportunity we should not pass by." If the General Assembly passes the bill, it will be voted on by the public because it requires an amendment to the state constitution.  


West Pharmaceuticals will rebuild in Kinston
West Pharmaceuticals, the Kinston company that suffered a catastrophic explosion and fire that killed six employees and completely destroyed its manufacturing facility, will stay in North Carolina and rebuild in Lenoir County. West Pharmaceuticals will occupy Lenoir County's industrial shell building on Highway 70 West. Construction improvements on the 107,000-square-foot building will begin this summer and continue through the fall. West Pharmaceuticals plans to move into the facility by December and to be in full operation in 2004. North Carolina will invest $250,000 in the relocation, using money from the One North Carolina Fund, a discretionary grant program administered by the N.C. Department of Commerce.

"We are very pleased that West Pharmaceuticals has decided to remain in North Carolina," said Gov. Mike Easley. "This commitment is good news for the employees of West Pharmaceuticals who have been instrumental in the company's success over the years." Said Donald E. Morel Jr., chairman, CEO and president of West Pharmaceutical Services: "It has always been our hope and intent to rebuild in Kinston, and we are excited to have arrived at a solution that will make this happen."

West Pharmaceuticals was one of the top 10 employers in Lenoir County before the explosion. Its immediate closing left nearly 250 workers unemployed. Since the explosion, many of the plant's employees have been temporarily relocated to plants in Nebraska and Florida. West Pharmaceuticals' Kinston plant made syringe plungers and IV fitments used for drug delivery systems and compounded rubber materials for use in other West facilities throughout the United States.

The company, which also considered Nebraska and Florida for the relocation, worked with Lenoir County, the city of Kinston, the Kinston-Lenoir County Chamber of Commerce and the N.C. Department of Commerce on the agreement to acquire the county's building.

State Government
Update on conversion of Blue Cross and Blue Shield of N.C.
Blue Cross and Blue Shield of North Carolina (BCBSNC) has been seeking to convert to a for-profit company. If approved by the North Carolina Department of Insurance (NCDOI), the company’s conversion would result in an independent foundation dedicated to improving the health of North Carolinians.

BCBSNC has said it needs to convert to gain access to capital to invest in customer service innovations to make health care information and resources more accessible to customers. The company has said that premiums will not increase as a direct result of conversion – though premiums will increase due to rising medical costs, government mandates and the costs of running a successful company. In addition, BCBSNC has stated that types of coverage will not change – and choices of doctors and hospitals will not change – as a result of conversion.

Since BCBSNC filed its conversion plan in January 2002, NCDOI has held three public hearings in Asheville, Raleigh and New Bern and had a public comment period. In addition, the department hired consultants to study and report on issues related to the proposed conversion.

One of those consultant reports – which focuses on the impact of conversion on accessibility and affordability of health care – was referenced this week in The Charlotte Observer and in other news outlets across the state. The report – authored by Chris Conover from Duke University and Mark Hall from Wake Forest University – has been made available to the public with redactions to safeguard confidential business information protected under the law.

The Conover and Hall report contemplates a host of issues related to potential impacts of conversion on profitability and the availability and accessibility of health care. The report examines conversions in other states, as well as the North Carolina market. In almost every case, the authors acknowledge that their research provides limited insights into what might occur in North Carolina, and their report draws few conclusions about these impacts.

Recent media coverage focuses on speculation in the report that a for-profit BCBSNC would face increased pressure to raise premiums. BCBSNC emphasizes that – like any business – if the company sets prices too high, customers would take their business elsewhere. Only by offering good products at competitive prices can the company succeed, regardless of its form.

News coverage has also addressed speculation on the impact of increased premium taxes after conversion. The report does not take into account something the company has said all along – that the limited break the company gets on state premium tax is likely to go away regardless of whether or not it converts. In fact, the state Senate has already voted to increase the company’s premium tax rate to the same level as other health insurers. Given the state’s ongoing budget crisis, the legislature is likely to enact the increase, meaning the company would pay the same tax whether it converts or not.

The data in the Conover and Hall report show that, in general, conversion itself did not lead to rate increases in other states. The study also found that converted Blue Plans continued to offer competitively priced products. This echoes a University of Minnesota report done for the state of Maryland earlier this year that showed premiums did not increase after health plans converted to for-profit status.

The Conover and Hall report also states that:

 Conversions have not led to Blue Plans leaving major markets. In North Carolina, many of the subjects interviewed said they felt BCBSNC would be unlikely to exit any major markets following conversion.
 Conversions have made little difference in how Blue Plans operate.
 Converted Blue Plans have demonstrated greater success in reducing administrative costs. In addition, the report's authors suggest that the "profit motive" may encourage BCBSNC to be more innovative in the products and services it offers customers.
 Conversions do not automatically result in deterioration in accessibility and affordability of health care in states where Blue Plans convert. In fact, the authors noted that North Carolina's health coverage market was likely to remain competitive even if BCBSNC converts.

Overall, this report confirms that conversion would not adversely affect the accessibility or affordability of health care in North Carolina, and that it recognizes the benefits to the state through the creation of the independent foundation.

In the coming weeks, reports from other consultants are expected to be made available to the public, including those from Ernst & Young and Clark Bardes Consulting.  


Lancaster unveils plan for community college focus on biotechnology
Community College System President Martin Lancaster has unveiled a strategy for strengthening the community colleges’ focus on programs preparing North Carolinians for work related to biotechnology. "On May 17 forty years ago, the General Assembly established the comprehensive North Carolina Community College System to prepare our people to move from the farm to the factory floor," Lancaster said. "Today, a big part of our job is moving them from factory to 'pharma' -- that is, to make sure our citizens are part of the tremendous growth of pharmaceuticals, biomanufacturing and all the other fast-growing aspects of biotechnology. It's appropriate that we celebrate our fortieth anniversary by committing our system to this next great change in our economy."

Lancaster’s “Strategic Plan for Meeting Long-Term Skills Needs of North Carolina's Biomanufacturing Industries and Biotechnology Cluster” was prepared by consultants Regional Technology Strategies Inc. and funded by the Golden LEAF Foundation. The community college portion of the plan calls for a "BioNetwork" with three major components:

 A Biotechnology Office for the North Carolina Community College System;
 A central training/learning center located at a major university, with dedicated space for advance training for community colleges; and
 Five community college biotechnology centers located on "lead" community college campuses, three dealing with specific subject areas, one with continuing education and one with business start-ups.

Lancaster said North Carolina has the largest biotechnology community in the South and fifth largest in the country. He quoted statistics saying $7 billion a year in revenues. In a little more than 20 years, that workforce is expected to quadruple.  The community colleges and the N.C. Biotechnology Center already are partners in a comprehensive training program in pharmaceuticals and bioprocessing. Biotechnology, bioprocessing and related disciplines are offered at two-year technical degree programs or collaborations at several community colleges, and transfer programs are underway with research universities.

Lancaster said that the community colleges are ready to move forward immediately and have funding requests as part of the statewide biotechnology proposal now before the Golden LEAF Foundation and the General Assembly. Those requests also address the plans of the University of North Carolina, the North Carolina Biotechnology Center and other partners.

New auto emissions testing program expands to six new counties
Starting July 1, motorists in Catawba, Cumberland, Davidson, Iredell, Johnston and Rowan counties will have to pay $30 to have their cars inspected every year as part of the state’s expanded emissions testing program. Drivers with vehicle models 1996 or later will pay $30 for a standard safety inspection and computerized emissions test. Owners with 1995 model vehicles and older will continue to pay for a standard safety inspection. By 2006, the testing program will expand to include 48 counties.

State pays to remove junkyards from flood plain
The state recently paid $875,000 for conservation easements to 57 acres of junkyards in Kinston as part of the state’s efforts to reduce environmental hazards in the 100-year flood plain. The purchase involves three tracts owned by Webb Automotive Salvage Yards near N.C. Highway 11/55 in Kinston. The purchase is the second in a program designed to reduce the threat of potential hazardous waste contamination in the event of a flood. After Hurricane Floyd, the legislature appropriated funds to address problems caused by flooding. Purchasing junkyards in the 100-year flood plain and prohibiting the construction of new ones is a part of that plan. After this purchase is completed, approximately $2.7 million will remain in the fund. Three additional junkyards remain to be purchased in the Kinston area.


Study rules out two options for new Greenville Southwest Bypass
The N.C. Department of Transportation said the results of a federally-mandated environmental study have eliminated two viable corridor options for the new Greenville Southwest Bypass, the area’s top transportation priority and a key economic development project. "Eliminating the Memorial Drive widening option was a crucial step in the planning process," said N.C. Board of Transportation member Marvin Blount III who represents Pitt County on the board. "The department is required to study all reasonable alternatives to make sure that the corridor chosen improves safety, reduces congestion along Memorial Drive and Stantonsburg Road at the Pitt County Memorial Hospital, minimizes impacts to the environment and is the most cost-effective. We now are in an excellent position to move this project forward and provide a vital link to Kinston and the region." DOT is required to study all viable corridor options for the bypass -- including widening Memorial Drive (N.C. 11) and Stantonsburg Road (U.S. 264 Business) and an alternative that calls for constructing the bypass on a new location. Based on study results, those two alternatives were eliminated due to escalated costs, major impacts to streams and wetlands, historical properties and local businesses, as well as safety concerns associated with proposed changes in the area's driving patterns. DOT now will evaluate the three remaining alternatives for the 7.8-mile bypass from U.S. 264 in Greenville to N.C. 102 in Ayden. All include building a four-lane roadway with a divided median on new location beginning near the existing N.C. 11/102 intersection and connecting to the existing U.S. 264 interchange west of Greenville. State engineers anticipate holding public hearings in the fall and selecting the preferred alternative by the end of the year.

Briefly Noted: The DOT has begun a $35 million widening project on one of the most congested roads leading from southern Wake County into the Research Triangle Park Area. A contract was awarded to Blythe Development Co. to widen 12 miles of N.C. 55 from U.S. 64 in Wake County to Cornwallis Road in Durham County. During the project, which should be completed by mid-2006, motorists can expect daytime lane closures between 9 a.m. and 3 p.m. 

Names in the News

Three community colleges get new presidents
G. Dennis Massey has accepted appointment as Pitt Community College's new president. Massey, 55, will begin his tenure Aug. 1 with a salary of about $130,000. Now interim president of McHenry County College in Crystal Lake, Illinois, Dr. Massey will start at Pitt this summer, upon the retirement of current President Charles Russell. Lynne M. Bunch was confirmed as the new president of College of The Albemarle in Elizabeth City, effective immediately. She has been interim president since August 2002. Most recently vice president of college advancement at COA, Bunch has been at the college since 1983. State College President Mary Rittling, president of West Virginia State College, was announced as the new president of Davidson Community College. She replaces J. Bryan Brooks, who retired Dec. 31.

 Former state Rep. Phil Baddour of Goldsboro, First Citizens banker Alex MacFayden of Raleigh and retired executive R. Stanley Vaughn of Charlotte were appointed to the Clean Water Management Trust Fund by Gov. Mike Easley. The governor also reappointed trustees Joe Hester of Rocky Mount and John McMillan of Raleigh to serve additional four-year terms. Baddour, now in private law practice, sponsored the legislation in 2000 that codified the state’s goal of preserving a million acres of open space over the next 10 years. MacFayden is group vice president for government affairs with First Citizens Bank. Vaughn retired from Pricewaterhouse Coopers in 1999. Since forming in 1996, the Clean Water Management trust Fund has awarded 407 water quality grants for a total of $320.7 million

 Dan Blue of Raleigh, the former House Speaker who lost to Erskine Bowles for the Democratic nomination for U.S. Senate last year, has registered to lobby for Blue Cross Blue Shield of North Carolina. Blue is one of three former House members lobbying for Blue Cross. The other two are Bob Hensley and Andy Dedmon.

 Rep. Pete Cunningham (D-Mecklenburg), 73, underwent successful heart surgery last week and hopes to return to the General Assembly soon. Former state senator Bob Martin of Bethel died Thursday after suffering head injuries last week in a car wreck. Martin, 90, was parking his car at Wal-Mart in Tarboro when he apparently stepped on the gas instead of the brake, causing the car to hit a wall of the store.


Legal Beat
Appeals Court sides with employer in important carpal tunnel case
Just because an employee develops carpal tunnel syndrome on the job doesn’t mean you can’t fire them over an unrelated issue, a divided N.C. Court of Appeals said Tuesday. In a 2-1 opinion written by Judge John Tyson, the court affirmed a decision by the N.C. Industrial Commission that the Toastmaster clock plant in Scotland County was justified when it fired a worker for cause even though the worker was in a light duty job after returning to work from carpal tunnel surgery. The case is No. COA02-1072.

Tyson’s opinion, concurred in by Judge Sanford Steelman, relies heavily on Seagraves v. Austin Co. of Greensboro, a 1996 decision holding that employers can fire workers for things they fail to do on the job – failing to meet quota, for example – as well as for overt acts. Tyson said the Industrial Commission properly applied Seagraves to this case because Toastmaster “provided competent evidence to show that plaintiff's failure to perform the (light duty job) was not related to her prior compensable injury.” Tyson added: “A worker's failure to perform required tasks for employer results in reprimands and eventually termination. There is no indication that employer treated plaintiff's misconduct differently than that of other employees in deciding to terminate her employment. The burden shifted to the plaintiff to show that ‘her inability to find or hold other employment of any kind, or other employment at a wage comparable to that earned prior to the injury, is due to the work-related disability.’”

Judge Wynn dissented, saying he thought the majority was stretching to apply Seagraves to this case. “In this case, the majority seeks to expand the holding of Seagraves to allow the termination of injured employees for acts of negligence rather than intentional or gross misconduct,” Wynn wrote. “Under Seagraves this court created a justifiable legal fiction: an injured employee who is terminated for misconduct is considered to have constructively refused suitable employment and is barred from receiving workers' compensation benefits,” Wynn added.

Tyson and Steelman thought otherwise in upholding the Industrial Commission’s determination that the employer was entitled only to partial compensation of $166.67 per week for the 16 weeks she was out on leave, medical expenses, plaintiff's attorney fees, expert fee and costs.

Case tests contingency-fee practices in workers’ comp awards
Attorneys who successfully represent workers’ comp claims usually are paid a percentage of the disability award they get for the injured worker. But a case now before the N.C. Court of Appeals raises the novel claim that the attorneys also are entitled to a percentage of the hospital and doctor costs for treating the worker. That’s the issue in the case of a Mexican farm worker who was awarded $24,000 for injuries he received when he suffered a heatstroke while working on a Sampson County farm.

The case centers on Carmen Fuentes, who suffered a heatstroke at a Sampson County farm in 1998. His condition wasn’t immediately diagnosed, and by the time he was transported to UNC Hospitals in Chapel Hill he had sunk into a persistent vegetative state. The hospital’s costs for treating him amounted to $363,307.29, plus $44,256.00 to the doctors. The law firms of Massengill & Bricio P.L.L.C. and White Law Offices P.A. were approached by the Fuentes family about representing them in Fuentes’ workers' comp claim, which by then had been denied. The attorneys won on every issue before the Industrial Commission, which ordered Fuentes to receive $24,000 in workers comp benefits. But the commission denied the attorneys’ claims that, because their exceptional work had persuaded the hospital’s insurance company to pay the roughly $410,000 cost for treating Fuentes, they were entitled to 25 percent of that, too. The commission reasoned that “the approval of attorneys' fees based on a percentage of the compensation paid to plaintiff is limited to indemnity compensation and penalties and sanctions added to such compensation, but does not include expenses related to medical care and treatment.”

That question ended up before a Sampson County Superior Court judge, who ruled that, in fairness, the attorneys were entitled to 25 percent of the medical expenses as well as 25 percent of the indemnity award. UNC Hospitals appealed that ruling to the Court of Appeals, which on Tuesday reversed the Superior Court ruling and remanded the case for a new trial. In the order written by Judge Douglas McCullough, concurred in by Chief Judge Sid Eagles and Judge Rick Elmore, the Appeals Court said the trial court “is not prohibited from utilizing a percentage of the medical compensation as a basis for a fee. The trial court may not, however, reduce the compensation paid to medical providers in order to fund the fee award.”


Federal Issues

Chamber praises Judiciary vote on class action lawsuit reform
The U.S. Chamber of Commerce cheered the House Judiciary Committee’s approval this week of a bill designed to help consumers and businesses by curbing abusive lawsuits filed by class action trial lawyers. “Momentum for the Class Action Fairness Act continues to build,” said Stanton D. Anderson, Executive Vice President and Chief Legal Officer of the U.S. Chamber. “This vote is evidence that Congress is moving ahead to restore fairness and sanity to a system that has for entirely too long enriched cunning trial lawyers at the expense of unsuspecting Americans.” The House Judiciary Committee approved the Class Action Fairness Act (H.R. 1115) by a vote of 20 to 14. This same committee and the entire U.S. House of Representatives have passed similar measures in the previous two Congresses. The Senate Judiciary Committee endorsed its version of the bill (S. 274) on April 11. The legislation expands the jurisdiction of federal courts, allowing them to more easily hear large class action lawsuits in which plaintiffs and defendants are from different states.  This will ensure that national class action lawsuits, involving plaintiffs from around the country, can be heard in federal courts, which are better equipped to apply the laws of multiple states. NCCBI is the state affiliate of the U.S. Chamber.

Chamber notes progress on asbestos litigation reform
The U.S. Chamber of Commerce this week welcomed movement on Capitol Hill toward a solution on how to handle the tangle of asbestos lawsuits that are bankrupting companies across the country. “Congress must act to protect people who have been harmed by asbestos and close the door on the unimpaired, who are looking for a quick payout,” said Thomas Donohue, President and CEO of the U.S. Chamber. “There is not a single legal issue more potentially damaging to the U.S. business community and our economy as a whole than asbestos litigation.” More than 60 companies have filed for bankruptcy because of asbestos claims, putting thousands of people out of work, and causing trickle-down devastation in towns across America, according to a recent study conducted for the Chamber by NERA Economic Consulting. The cost of asbestos litigation has been $54 billion so far, and total liability could pass $275 billion if no solution is found. Senator Orrin Hatch (R-UT) has proposed a bill that promises to expedite payments, take care of the sickest victims, and create structure and guidelines in a currently unmanageable system. Numerous interest groups have been engaged in discussions about the scope and nature of legislation. NCCBI is the state affiliate of the U.S. Chamber.


NCCBI News
Kirk urges Hickory audience to continue pushing for high standards 
NCCBI President Phil Kirk admonished the audience of business people and educators at the Wachovia Ben Craig Award for Outstanding Educators at the Holiday Inn Select in Hickory on Tuesday morning to "speak out for high standards and high expectations for all educators and students." He added: "The business community and Governor Hunt pushed the legislature to enact high standards and a strong accountability program. The results have been that North Carolina's public schools lead the nation in progress in many areas, but we are in danger of backsliding because too many in the legislature are backpeddling on the standards." Kirk said the General Assembly is abolishing the planned high school exit exam, which it directed the State Board of Education to develop several years ago. "Not only does this action waste $3.5 million in tax dollars already spent, but it has the effect of saying that we are satisfied with graduates who can pass a test at an eighth-grade level for a high school diploma." He praised the educators in the audience for their hard work in challenging times and saluted Wachovia for its strong support for public schools "both in money and in time." Wachovia gives its employees four hours off work each month to do volunteer work in the schools. Bryan Derreberry, president of the Catawba County Chamber of Commerce that was a co-sponsor of the event with Wachovia, gave the welcome. Jon Swift, senior vice president and market president for Wachovia, introduced Kirk.

Kirk gives budget briefing to Mount Olive chamber
There is more bipartisan cooperation in this session of the General Assembly than in any session in recent memory, NCCBI President Phil Kirk told 45 people attending Mount Olive Area Chamber of Commerce's Third Thursday “Business at Breakfast” held last Thursday on the Mount Olive College campus. "Hopefully this bi-partisanship will result in a shorter session," Kirk said. He told them that the recent April revenue figures had left a $400 million shortfall in next year's budget that is now in conference committee. Kirk discussed NCCBI's continued support for a constitutional amendment to limit the length of legislative sessions and medical malpractice insurance reform and its opposition to new taxes, health insurance mandates such as mental health parity, and a weakening of standards in education. "Hopefully the current effort to dismantle the state's much-heralded ABCs accountability plan will be stopped once the legislature takes time to evaluate the legislation which will violate the new federal No Child Left Behind law," Kirk said.  "The business community advocated for the higher standards which we now have in public schools, but it must make its voice heard equally as loud to keep and improve the standards." Kirk was introduced by Gena Knode, chairperson for the Third Thursday Breakfast program which was sponsored by Bill Bryan and Mt. Olive Pickle Co. Mayor Ruff Huggins of Mount Olive gave the invocation. Lynn Williams, community relations representative for Mt. Olive Pickles, and Patti O'Donoghue, president of the Mount Olive Area Chamber of Commerce, presented gifts to Kirk. Stephen Wissink, sales and marketing director for the North Carolina Magazine, and Lawrence Bivens, a writer for the magazine, also were present. They both are working on the Wayne County Community Profile that will appear in the July issue of the magazine.

 
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