June 16, 2000
n
Issue No. 6 n
The 2000 Short
Session
This is the print-out version of this
week’s Bulletin, with no pictures or
graphics
House Adopts Budget;
Adjournment Talk Begins
Legislators are now talking about
adjourning around the end of the month after the
House on Wednesday, by a vote of 105-9, passed a
$14.02 billion budget for the coming fiscal year
and sent the bill on to the Senate. The document
achieves what many thought would be all but
impossible given the state's tight revenue
situation -- funding all the major goals set by
Gov. Jim Hunt and legislative leaders, paying off
the remaining court-ordered tax refunds and doing
it all without raising taxes.
Some creative financing tactics were used,
including one that saves $275 million in the
coming fiscal year by changing the way the state
pays teacher salaries. In prior years, the state
added the cost of July and August teacher
salaries to the budget -- even though the fiscal
year ends in June -- to account for teachers who
want their annual salaries divided into 12
paychecks instead of 10.
Gov. Hunt was pleased with the budget, saying in
a statement that "the budget bill . . . puts
our children, families, schools and the
environment first in a difficult budget year. It
will provide full funding for Smart Start and
will keep us on track to raise standards for
teachers while raising their salaries to the
national average. I look forward to working with
the Senate to keep our focus on our top
priorities and to move quickly to pass a final
budget."
One of the few public complaints came from the
N.C. Economic Developers Association. Don
Kirkman, president-elect of the NCEDA, said the
budget doesn't contain adequate funding for
industrial recruitment. “The House budget .
. . calls for cutting the Industrial Recruitment
Competitiveness Fund in half, from $2 million to
$1 million. This is a serious blow to recruiting
new industry this upcoming year. The return on
investment from new employment and tax revenues
is much greater than the amount of the
fund.”
Kirkman urged his members to contact their
senators to urge them to restore full funding of
the industrial recruitment fund.
Approval of the budget bill by the House came
after more than seven hours of debate during
which several amendments offered by Republicans
were narrowly defeated. Most attention centered
on a provision in the legislation expanding the
N.C. Court of Appeals from 12 to 15 judges. The
three new judges would be appointed by Gov. Hunt
and would remain on the bench until standing for
election in 2004. Some GOP House members said
that amounted to packing the court by a lame-duck
governor.
An amendment offered by Rep. Art Pope (R-Wake) to
drop the three new judges from the budget failed
57-55. Rep. Joe Kiser (R-Lincoln) offered an
amendment to fund the new judges but have them
appointed by the next governor; it failed 59-53.
Some other amendments, which also failed, focused
on the GOP members' concern that the budget
doesn't adequately fund Medicaid costs.
The nine votes against the budget all came from
Republicans: Reps. Cary Allred (R-Alamance),
Cherie Berry (R-Catawba), Billy Creech
(R-Johnston), Michael Decker (R-Forsyth), Sam
Ellis (R-Wake), Julia Howard (R-Davie), Joe Kiser
(R-Lincoln), Art Pope (R-Wake), and Edgar Starnes
(R-Caldwell).
After Wednesday's House action to approve the
budget, the key Senate appropriations committees
immediately took up the legislation Thursday
morning.
The budget includes 5 percent pay raises for
state employees -- more than Gov. Hunt proposed
-- and injects $120 million into the state's
depleted Rainy Day Fund. The House budget is
slightly more than $100 million more than what
Hunt had proposed spending for the year.
"We think it's a good budget. We think it's
about as tight as we can draw it. We tried to do
good in this budget and harm no one. That's been
our goal all along," House Appropriations
Co-chair Ruth Easterling (D-Mecklenburg) said
during floor debate.
The budget bill, H. 1850 2000 Appropriations Act,
would put $120 million in the Rainy Day Fund;
$100 million in the Repair and Renovation Fund;
and $30 million in the Clean Water Management
Trust Fund. It includes $255.6 million to fund
average 6.5 percent pay raises for North
Carolina's 81,500 classroom teachers, the fourth
and final annual step in raising teacher pay to
the national average. It includes another $135
million in bonuses for teachers at schools that
meet or exceed academic expectations.
It includes money to expand the Smart Start early
childhood educational program into all 100
counties, but would wait until January -- halfway
through the fiscal year -- to take that step.
Gov. Hunt had wanted enough money to begin the
final expansion of the program in September.
The spending plan envisions 5 percent raises for
all other state employees, including community
colleges and UNC System faculty, the largest
raise they've been offered in several years. To
find enough money for that, the House proposes
reducing the state's contribution to the state
employees' retirement fund this coming fiscal
year by $172.5 million. Officials said the state
could safely take that step because the
retirement trust fund is extremely healthy.
The Department of Health and Human Services
suffers several major spending cuts in the House
budget, including a $70 million reduction in
Medicaid reserve funds, a $32.4 million reduction
in Medicaid funding based on more recent
projections of demand, and $25.2 million gleaned
from Medicaid drug rebates and earned revenue.
The budget does not include any money to fund
Hunt's proposals to expand eligibility for the
child health insurance program but does eliminate
a waiting period for children with long-term
disabilities or health problems.
The House budget includes a new $8 million
program for housing alternatives for mentally ill
children who would otherwise be
institutionalized, a $3 million reserve for
system reforms, and nearly $7 million for a
Medicaid program to pay for home services and
medical equipment for 600 people with mental
disabilities. The funding reflects a move by the
state away from institutional care for the
mentally ill and toward community-based treatment
programs.
The budget document assumes a zero beginning
unreserved credit balance for the new fiscal year
-- the most stark sign that the state scrapped
the bottom of the barrel finding emergency money
for Hurricane Floyd victims during an emergency
special session last winter. It projects total
tax revenues during the year ahead of $13.216
billion and investment income of $214 million. It
continues the long-standing practice -- strongly
opposed by NCCBI -- of transferring into the
General Fund $170 million from the Highway Trust
Fund and $13.8 million from the Highway Fund.
The spending plan projects a current operations
budget (expansion budget, new money) of $65.6
million for the Highway Fund and spending of
$83.48 million by the Highway Trust Fund.
Including federal funds, total Highway Fund
availability of new money available for
expenditures during the year would be $1.247
billion.
The budget sets the salary of the governor and
the chief justice of the state Supreme Court at
$119,339 and the salaries of the members of the
Council of State at $105,326. Cabinet secretaries
would be paid $102,903.
The House Budget at a
Glance
(Budget cuts in parentheses)
Increase in Pay and Benefits for State
Employees
* Classroom teacher pay raise: 6.5 %
* Pay raise for principals and assistance
principals: 10 %
* Raises for all other state employees, community
college and university faculty: 5 %
* Retirees' COLA: 4.6 %
* Add 1 percent employer contribution to 401(k)
plan
* Reduce retirement system contribution: ($172.5
million)
* Reduce debt service funds: $52.2 million
* Reduce death benefit contribution: ($10.9
million)
* Reduce funds for increases in health plan
premiums: ($32.7 million)
* Reduce portion of state payment for retiree
health benefits: ($50 million)
Public Schools
* Final installment on raising teacher
pay to national average: $7.8 million
* Funds to improve student performance: $8
million
* Increase English as Second Language funds: $3.7
million
* Supplemental funding for small school systems:
$2 million
* Increase funding for exceptional children: $5
million
* Increase funds for schools in poor counties: $5
million
* Central office administration funds: $3.4
million
* Funds to help schools pay increased fuel costs:
$7 million
* Reduce adjustment of average salary based on
actual experience: ($42.4 million)
* Reduction in projected average salaries: ($8.2
million)
* Cut projected enrollment growth by 972
students: ($6.9 million)
* Adjust payments for vacation days: ($5 million)
Universities
* Projected enrollment increases: $21.1
million
* Increase in off-campus enrollment: $10 million
* Additional tuition receipts approved by Board
of Governors: ($3.3 million)
* New need-based financial aid program: $5
million
* Adjust inflation increase at UNC Hospitals:
($2.7 million)
* Tuition grants to state students attending
private colleges: $3.3 million
* Funds for historically black colleges to close
minority achievement gap: $500,000
* ECU's continued transition to doctoral
institution: $1.5 million
Community Colleges
* Enrollment growth: $20.5 million
* Supplement for summer term instruction: $7.2
million
* Increase funds for occupational and continuing
education: $3 million
* Eliminate community services block grant
funding: ($1.8 million)
* Reduce equipment funds: ($2 million)
* Increase estimate of tuition and fees: ($3
million)
* Increase in-state tuition per semester hour by
75 cents: $2 million
* Increase tuition charges from 14 to 16 semester
hours: $2 million
* Reduce need-based financial aid fund balance:
($1 million)
* Reduce management information system fund
balance: ($2 million)
Health and Human Services
* Reduce adoption assistance funds:
($2.3 million)
* Eliminate child support call center: ($1.5
million)
* Transfer Medicaid reserve funds: ($70 million)
* Reduce Medicaid funding based on new
projections: ($32.4 million)
* Increase Medicaid drug rebate receipts: ($12.1
million)
* Increase receipts from prior year earned
revenue: ($13.1 million)
* Increase receipts across department: ($3
million)
* Eliminate 29 vacant positions: ($2.1 million)
* Reduce Smart Start funds: ($49 million)
* Reduce funding to AIDS drug assistance program:
($5 million)
* Reduce funding to developmental evaluation
centers: ($1 million)
* Reserve for mental health court rulings and
reforms: $3 million
* Increase funding to community mental health
programs: $4 million
* Establish child mental health residential
program: $8 million
* Special children adoption incentives fund: $6
million
* Infant mortality program: $1 million
* Smart Start: $44 million
Department of Commerce
* Industrial recruitment funds: $1
million
Aid to non-state entities
* Grants to community development
agencies: $1 million
* Technological Development Authority: $3.5
million
Courts System
* Funds for court technology: $6.7
million
* Replace other equipment: $1 million
Transportation
* Increase maintenance/contract
resurfacing: $20.9 million
* Replace, repair and renovate facilities: $9
million
* Operating assistance for urban and regional
transit: $5.9 million
* Rural transit assistance: $1.3 million
* Equipment for 28 new Highway Patrol troopers:
$1.3 million
* Reserve for DMV computer system maintenance:
$3.3 million
* Reserve for maintenance: $10.5 million
Construction
* Matching funds for federal water
resource programs: $13.4 million
* National Guard armory in Charlotte: $1.6
million
Rising Revenues All But
Wipe Out Budget Shortfall
The state's budget shortfall
eased a great deal last month when surging
individual income tax collections wiped out what
had been a roughly $300 million deficit.
According to data provided to NCCBI by the State
Controller's Office, the state budget through 11
months of the fiscal year is now within
two-tenths of one percent of being on target for
the year.
At the end of May the budget was projected to
have realized total tax and non-tax revenues of
$12.03 billion. Actual collections through the
end of the month reached $12.05 billion, a
shortfall of just over $19 million. At the end of
April that deficit was about $300 million.
The reason for the all-but-disappearing deficit
was that individual income tax collections for
May amounted to $591.9 million, whereas
collections of $387.2 million had been projected.
That's a positive swing of $204.7 million for the
month.
Corporate income tax collections and sales taxes
also were more than projected. The budget
anticipated sales tax collections of $270.8
million for the month of May but a total of
$305.3 million actually was collected, a positive
difference of $34.5 million. Corporate income
taxes were $5.6 million more than expected. Also,
franchise taxes are beginning to rebound to
projected levels. For the month of May,
franchises taxes amounted to $37.1 million
whereas $18.1 million was budgeted, a positive
difference of $19.0 million. Through 11 months,
however, franchise taxes remain $91.9 million
less than expected.
Through 11 months of this year, corporate income
taxes have amounted to $1,012.4 million. That
compares to $915.8 million through 11 months of
the previous fiscal year.
Similarly, individual income taxes are well ahead
of last year. Through 11 months, individual
income tax collections have amounted to $6,692.7
million compared to $6,221.7 million at this
point last fiscal year.
Bottom line, total tax and non-tax revenues
flowing into the General Fund now stand at 99.8
percent of budget projections.
NCCBI Executive Committee
Holds Quarterly Meeting
The air conditioning at the NCCBI
offices was on the fritz, pushing the temperature
inside the board room into the unbearable range,
but the members of the NCCBI Executive Committee
didn't let the heat deter them from the tasks at
hand during the governing body's quarterly
meeting Tuesday.
Having to speak over the sound of two fans
brought in to combat the heat, the 15 Executive
Committee members attending the meeting heard
financial reports on the health of the
association and discussed strategy for passing
the $3.1 billion higher education bonds. Speakers
at the meeting included UNC System President
Molly Broad and Community College President
Martin Lancaster.
Broad thanked the NCCBI leaders for the
association's leadership in pushing the bond
referendum legislation through the General
Assembly. “We won't forget that it was this
organization that quickly, firmly took charge of
the situation and got the General Assembly to
respond," Broad told the Executive
Committee. "NCCBI was there, and for us to
have secured bipartisan passage within 10 days of
when the General Assembly convened, and to have
obtained unanimous support is nothing short of
remarkable."
NCCBI President Phil Kirk briefed Executive
Committee members on progress so far in launching
the campaign for passage of the bonds. He
reported that 12 of the state's top business and
education leaders are spearheading the campaign.
Heading up the campaign, Kirk said, will be
Leslie Bevacqua, NCCBI vice president of
governmental affairs. She will take a four-month
leave of absence from the NCCBI staff beginning
July 17 to run the day-to-day operations of the
campaign. Until the campaign secures office space
of its own next month, work on the campaign will
done out of NCCBI's offices.
The campaign co-chairs, charged with directing
the statewide effort to pass the bond package,
are: Jim Broyhill, former U.S. senator; Mimi
Cecil, secretary of the board of directors of the
Biltmore Co. and chair of the board of Warren
Wilson College; Mac Everett, First Union Bank
Mid-Atlantic Region president and NCCBI chairman;
Helen Newsome, president of the National
Association of Community College Trustees; and
Dr. Leroy Walker, former N.C. Central University
chancellor.
The finance co-chairs, who will raise funds for
the statewide campaign in order to educate North
Carolina voters about the bond referendum are:
William J. Armfield IV, president, Spotswood
Capital LLC; Thomas Bradshaw Jr., managing
director of Salomon Smith Barney Inc.; Bert
Collins, president and CEO of N.C. Mutual Life
Insurance Co.; Hugh McColl, chairman and CEO of
Bank of America Corp.; John Medlin, chairman
emeritus, Wachovia Corp.; Earl N.
“Phil” Phillips Jr., president of
Phillips Interests; and Dr. Ruth Shaw, executive
vice president and chief administrative officer
of Duke Energy.
Gov. Jim Hunt and former governors Jim Martin,
Jim Holshouser and Bob Scott will serve as
honorary co-chairs, Kirk added.
The referendum would allocate $2.5 billion for
new construction, repairs and renovations for the
UNC system's 16 campuses. Another $600 million
would go for critical building needs at the
state's 59 community colleges.
The referendum has garnered widespread bipartisan
support from education, government and business
leaders across the state. State Treasurer Harlan
Boyles has also endorsed the proposal, saying
that it is a fiscally responsible way to support
our community colleges and universities.
NCCBI Treasurer Horace Johnson of Raleigh, the
Ernst & Young executive, reported that the
association was in relatively good fiscal health.
He said the forthcoming auditor's report will say
that NCCBI completed its fiscal year April 1 with
a small surplus, the first time that has happened
in four years.
Legislative News Briefs
Senate Passes Bill to Improve Internet
Access in Rural Areas
The Senate unanimously approved a bill
Tuesday to help rural communities get high-speed
Internet connections. The measure, S. 1343 Rural
Internet Access Authority, sponsored by Sen. Eric
Reeves (D-Wake), would create a Rural Internet
Access Authority that would be part of the state
Commerce Department but largely funded with
private money. Reeves said the agency is needed
to make sure rural areas aren't left behind as
the Internet increasingly drives the economy. It
is expected to begin with a $30 million
contribution from Microelectronics Center of
North Carolina, money the company, which was
started with state month and largely funded by
the state until it turned profitable, gained from
the spin-off of a subsidiary. Helping rural
communities gain affordable high-speed Internet
access was a major proposal advanced by the Rural
Prosperity Task Force chaired by Erskine Bowles.
NCCBI Chairman Mac Everett of Charlotte, the
First Union Bank executive, said implementing the
recommendations of the task force is one of his
major goals this year.
Bill Gives Charlotte Permission to
Continue Conditional Zoning
The Senate unanimously approved a bill
giving Charlotte permission to continue using
conditional zoning even though the a judge has
ruled that the process is illegal. The
legislation, which must also go through the
House, would let the city end a zoning freeze
that began in April and has delayed hundreds of
millions of dollars in construction. A similar
bill would give Mecklenburg County the same right
and theoretically protect the county from
lawsuits similar to the one against the city.
Charlotte and Mecklenburg County have used
conditional zoning for years to resolve up to 80
percent of zoning cases in the city. The city
contends that conditional rezoning is a more
flexible way to control growth that also allows
more room for compromise. Critics say the system
allows developers too much power to influence
decisions behind the scenes, shutting
neighborhood groups out. The bill renewing
conditional zoning would expire in 2001 unless
the city seeks an extension or a permanent change
in the law.
House Adopts Revisions to Bill Lee Act
The state House voted 91-17 on Monday to
revise the eligibility criteria in the Bill Lee
Act so Midway Airlines will be able to claim an
investment tax credit for a airline maintenance
and repair hanger it plans to build at
Raleigh-Durham International Airport. Another
change in the eligibility criteria included in
the legislation will enable Buckeye Technologies
a $3 million tax credit for expanding a
manufacturing plant it recently acquired in
Gaston County. The legislation, H. 1560 Modify
Bill Lee Act, also contains a clause that would
allow any unused portion of a tax credit to be
carried over into succeeding years.
Senate Panel Approves Changes in Water
Bonds to Help Small Towns
The Senate Appropriations Committee on
Wednesday favorably reported a bill that would
direct more of the $1 billion in water and sewer
bonds approved by voters in 1998 to small towns
that are struggling to upgrade their water and
sewer systems. The measure, S. 1381 Reallocate
Water Bond Funds, sponsored by Sen. John Kerry
(D-Wayne) rewrites the original enabling
legislation for the bonds to direct more of the
money as grants to small towns. For wastewater
collection systems and treatment works, the bill
provides $3.5 million for local government loans
where the town has bond rating of less than 75,
and $90.6 million for units with bond rating of
75 or more. For water supply and distribution
systems and conservation projects, the bill
directs $7.1 million for towns with bond rating
under 75, and $98.8 million for units with bond
ratings of 75 or higher, for a total of $200
million. That $200 million is further allocated
as follows: $146 million to be used by Department
of Environment and Natural Resources to provide
grants to local governments as follows: High-unit
wastewater account -- $37,960,000 to units with
bond rating under 75 and $35,040,000 for units
with 75 or more, and identical amounts for
high-unit cost water supply account. An
additional $25,920,000 of the $200 million is to
be used to provide unsewered community grants to
eligible units to assist with wastewater
treatment projects. The remaining $28,080,000 of
the $200 million is to be used to provide
supplemental and capacity grants to eligible
units to match federal, state or other grant
funds or to improve water and sewer projects.
Sen. Kerr's bill allows a maximum of $12,000,000
for supplemental grants and $3,000,000 of
capacity grants to be issued upon certification
by Rural Economic Development Center each fiscal
year through June 30, 2005.
House Transportation Committee Approves
Toll Roads Legislation
Private developers could build up to
three toll roads in the state under a bill
favorably reported Wednesday by the House
Transportation Committee. The measure, H. 1630
Toll Roads, sponsored by Rep. Jim Crawford
(D-Granville) would allow the state DOT to issue
the first license for a private toll road by the
end of the year.
Senate Panel OKs Character Education Bill
The Senate Education Committee favorably
reported a bill Wednesday that directs school
systems that teach character education to include
respect for teachers in those programs. The
measure, S. 1177 Enhanced Character Education,
sponsored by Education Committee Co-chair Howard
Lee (D-Orange) contains no penalty provisions.
The committee narrowly defeated a proposal by
Sen. Austin Allran (R-Catawba) that would have
required all school systems to teach character
education.
Metropolitan Planning Boards Clear Senate
Committee
The Senate Transportation Committee on
Wednesday favorably reported a bill passed last
year by the House that would establish
metropolitan planning boards (MPBs) to help urban
area of the state better manage transportation
issues. The measure, H. 1288 Establish
Metropolitan Planning Boards, sponsored by Rep.
Paul Luebke (D-Durham), would require the
governor to appoint MPBs in every region of at
least 50,000 population.
State Government News
Briefs
CP&L Files for First Fuel Rate
Increase in Eight Years
For the first time since 1992, Carolina
Power & Light Co. will file for an increase
in the fuel rate charged its North Carolina
customers. CP&L is asking the N.C. Utilities
Commission to approve an $80.6 million, or 3.8
percent, increase in its fuel rate to recover
historic fuel cost shortfall for the period
ending March 31 and to meet expected fuel costs
in the near future. The increase would take
effect Oct. 1.
The fuel rate is a regulated, direct pass-through
charge in all electric consumers for the actual
cost of fuel to the utility to produce
electricity. CP&L has not requested a general
rate increase since 1988 and has not requested a
fuel factor increase since 1992. In fact, the
fuel factor has decreased four times since 1992.
Electricity consumption in CP&L's North
Carolina service area grew nearly 10 percent
between 1995 and 1999 and is expected to growth
another 10 percent in the next five years,
CP&L said.
If approved by the Utilities Commission, the
increase in the fuel factor would raise the
average residential consumer's power bill by 2.9
percent, or $2.38 a month.
Revenue Department Raises Motor Fuels Tax
to 23.1 Cents Per Gallon
The state motor fuels tax for gasoline,
diesel and alternative fuels will increase from
22 cents a gallon to 23.1 cents for the period
from July 1 through Dec. 31, the state Revenue
Department said. The new rate includes a 17.5
cents per gallon plus a wholesale component of
5.6 cents per gallon. The Revenue Department
adjusts the rate twice a year, based on changes
in the wholesale cost of fuel. State law sets the
wholesale component of the tax at 3.5 cents per
gallon or 7 percent of the average wholesale
price during the preceding six months, whichever
is greater. The average price for the last base
period was 80.44 cents per gallon.
Country Club Challenges Special Alcohol
Permits in Dry Counties
Verdict Ridge County Club in Lincoln
County, where alcohol sales are not allowed, is
challenging the General Assembly's practice of
authorizing private clubs and sports clubs in
some counties, but not others, to sell liquor
without a public vote. The legislature had
granted such special alcohol permits to private
sports clubs in 31 counties. Verdict Ridge is
asking a Superior Court judge to declare the
legislative practice unconstitutional. The club,
which is being developed by former Charlotte
mayor Eddie Knox, applied for permits last year
but the state ABC Commission denied the
application because it is not in a county covered
by a special provision. Knox, who now practices
law in Charlotte, is a member of the State ABC
Commission. As a former members of the General
Assembly he helped pass some of the special
provisions.
Federal Government News
Briefs
Stable CPI Indicates Fed May Delay
Further Rate Hikes
Consumer prices inched up 0.1 percent in
May as falling costs for gasoline, tobacco and
clothing helped restrain rising costs for
airfares and the biggest jump in food prices
since October 1998. Meanwhile, the Federal
Reserve, in another report released Wednesday,
said the U.S. economy posted solid economic
growth in April and May but reported "signs
of some slowing from the rapid pace earlier in
the year."
The Fed also said that employers are continuing
to report shortages of workers and having
difficulty hiring and recruiting people, but
added that such labor market tightness hasn't
intensified.
Even with signs of cooling in the economy, the
Fed said "indications of worsening price
inflation, while not widespread, are reported by
several districts."
The survey, compiled from reports from its 12
regional banks, will be used when Fed
policy-makers meet June 27-28 to review their
stance on interest rates. It was based on
information collected before June 6.
The small advance in Labor Department's Consumer
Price Index, the most closely watched inflation
gauge, was a slightly better reading on inflation
than the 0.2 percent increase many analysts were
predicting.
In April, for the first time in almost a year,
consumer prices held steady.
Outside the volatile energy and food categories,
the "core" rate of inflation rose for
the second month in a row by 0.2 percent in May,
matching many analysts' expectations.
In the first five months of the year, the core
rate of inflation has been rising at an annual
rate of 2.7 percent, compared with a 1.9 percent
rate for all of last year.
The Federal Reserve has boosted interest rates
six times since last June to slow the speeding
economy and keep inflation under control.
Some recent economic reports, including retail
sales, home sales, factory orders and
unemployment, suggest the economy is slowing a
bit.
In a third report, businesses boosted their
inventories by 0.4 percent in April, but saw
their sales decline by 0.6 percent, the Commerce
Department said.
Economists have offered mixed opinions on whether
the Fed will push up interest rates for a seventh
time when it meets later this month. But a
growing number of analysts, citing Wednesday's
CPI report along with data indicating a cooling
in certain areas of the economy, believe the odds
are greater that the Fed will stay on the
sidelines.
Electronic Signature Legislation Advances
Agreement by U.S. House and Senate
conferees on electronic signature legislation is
"a historic step for e-commerce and the
future of the American economy," the U.S.
Chamber of Commerce said. S. 761, the Electronic
Signatures in Global and National Commerce Act,
on which the conferees reached agreement on June
9, promotes the use of electronic signatures and
provides a consistent and predictable national
framework of rules governing the use of
electronic signatures. It preempts state law that
is inconsistent with the Uniform Electronic
Transactions Act (UETA), and provides that
electronic records and notices produced in the
execution of a digital contract will not be
denied legal effect solely because they are
electronic in nature. In addition, it ensures
that a company will be able to rely on an
electronic contract and that another party will
not be able to escape contractual obligations
simply because the contract was entered into over
the Internet or any other computer network.
"Approval of this legislation will ensure
that American businesses and consumers can take
advantage of the digital revolution," said
Rick Lane, chamber director of e-commerce and
Internet technology. "This legislation will
provide a bridge for companies doing business on
the Internet until the 50 states agree on the
rules for electronic transactions," he
added. The conference report now goes back to the
House and Senate, with final passage expected
shortly. The White House has indicated it will
sign the bill.
FEMA Approves Funds to Purchase Flooded
Homes
The Federal Emergency Management
Administration has approved a $4.2 million effort
to buy Nash County homes damaged by flooding from
Hurricane Floyd, Cong. Bob Etheridge (D-2nd) and
Sen. John Edwards (D-N.C.) said. The money will
be used to buy 30 homes destroyed by the flooding
last September and convert the land to open
space. FEMA will pay 75 percent of the cost, or
$3.17 million, while the state will pay 25
percent, or $1.05 million. The federal money
comes from an emergency relief package Congress
passed last year.
NAM Challenges Labor Relations Board
Policy
The National Association of
Manufacturers (NAM) on Wednesday urged the U.S.
Court of Appeals for the Sixth Circuit to review
whether the National Labor Relations Act protects
employees who walk off the job if they feel they
are being exposed to dangerous working
conditions. In a friend-of-the-court brief filed
in TNS Inc. v. National Labor Relations Board
(NLRB), the NAM argued that there must in fact be
"abnormally dangerous conditions" in
the workplace before employees may walk out, and
that the NLRB should leave this decision to
federal, state and local safety and health
agencies that monitor workplace conditions. In
addition, the court will decide whether employers
have the right to hire permanent replacements for
employees who walk off. "Because the term
`abnormally dangerous conditions' can be
interpreted differently, employees may decide to
walk off the job site in virtually any
situation," said Quentin Riegel, the NAM's
deputy general counsel. "Giving employees
the power to come and go as they please without a
counter-balancing right for employers to hire
replacements could be economically disastrous to
any company. This is particularly unfair if
employees use job safety issues as a pretext to
gain leverage during collective bargaining
negotiations."
U.S. Chamber Slams Bid to Control Drug
Prices
The U.S. Chamber of Commerce told a
Senate committee on Wednesday that it strongly
opposes any legislation that will impose a
government price control on pharmaceuticals sold
in the United States. The chamber sent a
following letter to the Senate Health, Education,
Labor & Pensions Committee that says, in part
that “legislation to impose foreign
governments' prices on medication sold in the
United States, or to permit re-importation of
drugs whose prices are controlled by foreign
countries, has grave implications for a multitude
of consumer products.” The U.S. Chamber,
with which NCCBI is affiliated, said it finds
particularly onerous any requirement that imposes
foreign government pricing on American consumers.
“Such proposals ignore completely external
factors that affect the distribution and
consumption of products in other countries, as
well as the effect on the availability of new
innovations in those countries,” the chamber
said.
Department of Labor Policy on Unpaid
Leave Draws Fire
The U.S. Chamber of Commerce on Monday
denounced a Department of Labor (DOL) proposal to
pay parents taking voluntary leaves of absence
out of state unemployment dollars funded by
business. "Unlawfully diverting money from
the unemployed and giving it to parents will
slash holes in an important safety net for
workers," said Randel Johnson, chamber vice
president of labor and employee benefits.
"If the Administration wants to undercut the
unemployment insurance fund, there should be a
full public debate first." In earlier
written comments to the Labor Department, the
Chamber noted that the DOL's own estimate for the
price tag for new benefits for an estimated six
million workers taking voluntary family or
medical leave could cost $36 billion every year.
States will be forced to look for other funding
sources – most likely in the form of
increased taxes or reduced benefits for the
unemployed – to pay that cost. "The
proposal will pit the unemployed against their
more fortunate neighbors who have a job, but wish
to take a paid leave of absence, in a competition
for limited funds," said Johnson. "If
this Administration wants to provide paid leave
to employees away from their work, it should
submit its proposal to the Congress and finance
it honestly – not by robbing a fund that has
been paid for by employers and set aside for
unemployed workers."
Names in the News
* Ed Crutchfield, chairman and
former CEO of First Union Corp., received the
Corporate Champion for Children award presented
by Smart Start, the early childhood educational
initiative. The award was presented to First
Union Mid-Atlantic President Mac Everett,
representing Crutchfield, Wednesday during a
Smart Start celebration attended by 1,500 people,
including Gov. and Mrs. Jim Hunt. Under
Crutchfield's leadership, First Union has done
much to improve the lives of young children. The
bank makes one of the first $2 million
contributions to Smart Start in 1996. “Ed
Crutchfield is a tremendous advocate and
supporter of public education and had led First
Union with a focus on education from both
contributions and employee involvements,”
said Everett, who is this year's chairman of
NCCBI. “He truly understands the importance
of early childhood literacy and has made it a
priority for everyone in our company.”
* Sam Houston, vice president of
edgate.com, an Internet-based provider of
educational programming, was chosen
chairman-elect of the Public School Forum board
of directors. Houston will become the third
chairman in the forum's history next July. Tom
Bradshaw, a former Raleigh mayor and former state
transportation secretary, succeeded Gerry
Hancock, the first chairman.
* Wall Street financier Julian Robertson
and his wife, Josie, announced a $24 million gift
to establish the first joint scholarship at UNC
and Duke University. The cash donation will fund
an endowment that will provide merit scholarships
to 30 students a year -- 15 at Duke and 15 at UNC
-- starting in 2001. Robertson Scholars will take
some courses together, and each will live at the
other campus for one semester. The scholarship,
worth an estimated $100,000 over four years,
includes a laptop computer, paid summer
internships and transportation between Chapel
Hill and Durham.
* Century Furniture Industries
has pledged $25,000 to the capital campaign of
the N.C. Community Colleges Foundation. The gift
was announced by Harley Shuford Jr., board
chairman of Hickory-based Century Furniture and a
member of the foundation board. The foundation
has raised more than $3 million in pledges and
contributions toward its goal of creating a $5
million endowment fund.
* Gov. Jim Hunt received the
Distinguished Alumnus Award from Tar Heel Boys
State for his dedication and loyalty to the
program and to the state. The program is
sponsored by the American Legion Auxiliary and
provides a week-long study of government for
rising high school seniors from across N.C.
Meanwhile, Hunt was named chairman of the
Platform Drafting Committee for the Democratic
National Convention, the group responsible for
preparing a draft for the Platform Committee.
* William M. Dean, president of
!dealliance and director of the Piedmont Triad
Research Park in Winston-Salem, has been elected
president of the Association of University
Related Research Parks (AURRP). !dealliance
formerly was known as the North Carolina Emerging
Technology Alliance, the developer of the
Piedmont Triad Research Park in downtown
Winston-Salem. Dean's election was announced at
AURRP's national convention in Boulder, Colo.
AURRP is a non-profit international organization
representing research, science and technology
parks designed to promote university-industry
relations, foster innovation, and facilitate the
transfer of technology from universities to the
private sector. The organization has 290 members
representing 75 percent of the research parks in
North America.
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