JULY 21, 2004	ISSUE No. 12	2004 SHORT SESSION
Published every Friday during legislative sessions exclusively for NCCBI members

What does $15.9 billion buy these days?
Our look at surprises in the final state budget,
along with bills that passed during the wee hours

The $15.88 billion budget finally adopted by the General Assembly after a marathon weekend session increases spending by about $1 billion from the past year and by roughly $368 million more than was anticipated a year ago, most of it for education, social programs and economic development efforts. The bipartisan House voted 90-17 to accept the compromise spending plan but it was approved along party lines in the Senate by a 21-17 margin.

At the end of this newsletter is a detailed budget chart that tracks changes in major revenue and expense line items from the original budget for the 2004-05 fiscal year adopted a year ago, through the House and Senate revisions and ending at the final spending compromise.
 
The 188-page budget bill approved in the wee hours of Sunday morning contains several important provisions, which we will summarize below, beginning with economic development issues.

Sales tax refunds
Perhaps the most notable economic development issue in the budget is that it adds several categories of businesses to the existing list of those eligible for sales tax refunds on materials they purchase to build and equip facilities in the state costing at least $100 million. Chief among them are computer assembly plants, not surprising in light of Dell Computer’s reported interest in the Triad as the site of its mammoth new facility. Sales tax refunds would save Dell upwards of $1 million. Others added to the exempt list are aircraft-, auto- and semiconductor-makers.

Dell reportedly plans to build a 400,000-square-foot plant on 100 acres somewhere in the Mid-Atlantic region costing roughly $190 million and providing almost 1,900 jobs. The location of the new Fed Ex facility in the Triad is a major attraction for Dell. Winston-Salem Business Inc. has asked the Golden Leaf Foundation for a $41 million grant to train workers if Dell picks the Triad. Other pieces of the proposed incentive package include $41 million from the Community College System to match the Golden Leaf money; $14.5 million as a Job Development Investment Grant from the state; $5.2 million in incentives from Forsyth County; $3.7 million from Winston-Salem; $3 million from the City-County Utilities Commission; $1 million from the private Winston-Salem Millennium Fund, and an undisclosed amount from the One North Carolina Fund.

The General Assembly gave the Triad another budget nod when it included a tax break for TIMCO Aviation Services in the budget bill. A special provision exempts from sales tax makers of aircraft parts and lubricants for commercial aviation – a description that fits TIMCO to a T.

In a nod to rural counties, the budget says eligible companies investing at least $50 million in Tier 1, 2 and 3 counties will be eligible for the sales tax refund. In Tier 4 and 5 counties, the threshold remains at $100 million. The budget bill indicates that those sales tax exemptions and refunds would cost the state $5.2 million this fiscal year.

Jobs Development Investment Grants program
As expected, the legislature agreed to expand the two-year-old and highly successful Jobs Development Investment Grants (JDIG) program. The budget contains provisions expanding from 15 to 25 the number of JDIG grants that may be awarded each year, and raising the maximum value of those grants from $10 million to $15 million. Other provisions will require JDIG applicants to submit copies of their state and federal tax returns and to give special consideration to buying goods and services from small businesses headquartered in North Carolina.

Tax credits
The budget contains a provision raising from $6 million to $7 million the total amount of qualified business investment tax credits a taxpayer may claim in a single year. Strengthening the tax credit will save investors $4.5 million this year, according to budget writers. Another provision in the budget offers a small cut in privilege and excise taxes amounting to $2.9 million this year.

Global TransPark
The General Assembly agreed to keep the troubled Global TransPark in Kinston on life support by including $1.6 million in the final budget to maintain current services there while the TransPark board develops a business plan to attract support from the private sector.

Other notable issues we spotted in the budget bill:

Department of Commerce
The new state budget puts the Department of Commerce into the site development business. A special provision in the budget directs the department to create the Site Infrastructure Development Fund specifically for the purpose of acquiring and holding options on property suitable for a “large, regional industrial site that cannot be assembled by local governments.” Before now, the state often relied on large utilities like Duke Power or Progress Energy to step in and acquire land options, as was done when the state was courting Mercedes Benz several years ago. In a related matter, the budget authorizes Commerce to contract for the preparation of proposals and reports in response to requests for proposals for location or expansion of major industrial projects.

Small Business Ombudsman
The budget directs the state Department of Commerce to create the position of Small Business Ombudsman to work with small businesses to ensure they receive timely answers to their questions involving state government. The Small Business Ombudsman will have the authority to ask questions of state agencies on behalf of a business, to receive information concerning the status of a business's inquiry, and to convene representatives of various agencies to resolve specific issues raised by a business. The ombudsman will work with the small business community to identify problems in state government related to unnecessary delays, inconsistencies between regulatory agencies, and inefficient uses of state resources.

N.C. Partnership for Economic Development
The budget gives $1.75 million to N.C. Partnership for Economic Development, the umbrella organization overseeing the state’s seven regional economic development entities, a grant of $1.75 million that will pay for each one to formulate new strategic plans. With their $250,000 grants, each of the seven partnerships will be required to undergo a visioning process to determine their weaknesses and to assess potential strengths. Much emphasis will be placed on the clustering concept of economic development. Each region will determine which business clusters it already has and how to strengthen those clusters in light of competitive advantage the region might enjoy. The strategic plans also will attempt to develop targeted economic development initiatives to recruit new businesses and retain existing ones. Other aspects of the strategic planning process will:

 Identify a mechanism for monitoring the regional economy and updating the strategic economic development plan to take account of changing economic conditions.

 Recommend infrastructure investments to meet the region's current and anticipated future needs.

 Ways to integrate the Community College System and the UNC System into economic development efforts and planning.

 Create leadership networks that span the public and private sectors and that facilitate communication within clusters, between members of complementary clusters, and between members of the public and private sectors. 

Department of Environment and Natural Resources
An eye-opening provision in the budget directs DENR to establish one-stop environmental permit application assistance and tracking systems at all of its regional offices. Further, it directs DENR in most cases to approve such permits within 60 days. The provision directs the department to “provide to each person who submits an application for any environmental permit subject to this section to any regional office a time frame within which that applicant may expect a final decision regarding the issuance or denial of the permit.” It states that when a person applies for an environmental permit at any DENR regional office, the agency “shall provide to the applicant a good faith estimate of the date by which the department expects to make the final decision of whether to issue or deny the permit.” If the applicant has provided all the information requested by DENR for the permit, and if DENR has not responded within 60 days, “the permit shall be automatically granted to the applicant.”

Another provision in the budget directs DENR to expand a trial program begun a year ago to help land developers acquire all the environmental permits they need at one time. This was a major improvement over past practice, in which the developer had to individually file and track multiple air and water permits. The new budget directs DENR to expand the Express Review Pilot Program to two additional regional offices where the department believes they are most needed. The budget authorized DENR to keep the eight people now manning the Wilmington and Raleigh Express Review offices and to hire four additional people to staff the two additional offices. Higher fees paid by applicants for the express service pay for the additional manpower.
 
State employees
Most state employees will receive raises of 2.5 percent or $1,000, whichever is greater. State retirees will receive a 1.7 percent COLA in their pension payments.

Education
It turns out that the one issue that most delayed final adoption of the budget was a quiet debate over teacher bonuses. Under the existing ABCs of Education law, teachers at schools where students exceed academic expectations receive bonuses of $1,500 and teachers at schools that merely meet academic expectations get $750 bonuses. Legislators said they were surprised to learn that 94 percent of all teachers get at least the $750 bonus. At one time budget conferees were seriously considering a provision that would have limited the bonuses only to teachers at schools that exceed expectations, but it ultimately was dropped. Kept, however, was a provision calling on the State Board of Education to study student performance standards and whether they should be revised. Elsewhere, Gov. Mike Easley got all $59 million that he wanted to expand his education initiatives -- the More at Four preschool program and his plan to reduce class size in lower grades. The budget also includes $63.9 million for enrollment growth in the UNC System, $31.4 million for public school enrollment growth and $23.4 million for community college enrollment growth. The increase in K-12 funding anticipates hiring 1,133 additional personnel, mostly classroom teachers.

Community colleges
The General Assembly has given lip service to the need to raise community college faculty salaries, which rank near the bottom of national rankings. Now at least the legislature is putting some numbers behind the rhetoric. The budget gives community college faculty a 2 percent raise over and above what other state employees will receive. Plus, the budget sets out a roadmap for future budget-writers that would get faculty salaries up to the national average. Here’s the five-year cost estimate to achieve that goal: $33.3 for the 2004-2005 fiscal year, $21.1 for the 2005-2006 fiscal year, $21.6 for the 2006-2007 fiscal year, $22.1 for the 2007-2008 fiscal year, and $12.4 for the 2008-2009 fiscal year. “It is imperative that the state move community college faculty and professional staff salaries to the national average,” the budget states.

Social services
The budget provides a $6.6 million increase to strengthen the state health insurance program for children of the working poor and a $25 million increase for childcare subsidies. It earmarks $12 million in federal grants for hiring as many as 180 new social workers and $4 million in state money to hire 60 more. The N.C. Division of Social Services has said it needed 800 additional social workers. The budget also earmarks $2.5 million in federal grants to train social workers in handling child abuse and neglect investigations and $2.7 million in federal money will help the state implement a new computer system that will help workers keep better track of child abuse suspects. The budget also contains $64,000 to rehire an executive director for the N.C. Child Fatality Task Force, which investigates child deaths.

"It was a good session, especially for education and economic development," NCCBI President Phil Kirk said. "The governor's budget was good for both areas which are so closely related and the legislature responded in a positive way."
 
Kirk, who is a member of the state Economic Development Board, applauded the business community and the economic development sector in particular, for "working more closely together and with the Department of Commerce, regional, and local economic developers than ever before."  That cooperation, plus the widespread popularity of any issue related to the creation of jobs, led to the passage of more economic development tools than anyone could have expected at the beginning of the session, he added.

"We have been particularly vocal in our advocacy for more support for our under-funded community college system," Kirk said. "Again, the governor and the legislature responded in positive terms, especially in regard to salaries, equipment, increased multi-campus funding, and more money for training."

 

Government efficiency gets boost with enactment of IT reforms
Before wrapping up and going home, the General Assembly overwhelmingly passed S 991 Improve State IT Efficiency & Project Management (Reeves, D-Wake), which undertook a major reform of information technology (IT) operations in most of state government. The bill overhauls how state government oversees high-tech computer purchases and increases the power of the Chief Information Officer (CIO).

IT reform was part of NCCBI’s top priority for improving government efficiency. No area offered more potential for improvement than IT. The State Budget Office recommendation for the legislation, which was endorsed by the Governor’s Business Council for Fiscal Reform, indicated that over the long run savings of at least $77 million annually could be expected. Equally important is that IT changes will improve state government’s delivery of service to the public.

At its May 5 meeting, the Governor’s Business Council for Fiscal Reform, which is co-chaired by former NCCBI chair Jim Hyler and retired Duke Power Executive Bill Coley and includes several other NCCBI members, had backed passage of the legislation. The State Budget Office was instrumental in crafting details of the approved legislation.

In commenting on the legislation, NCCBI president Phil Kirk said, “Implementation of the Governor’s Efficiency Study Commission report is one of NCCBI’s highest priorities. We complement Governor Easley and the members of the General Assembly for taking this important first step in bringing accountability and sound business principles into the important and expensive area of information technology. The legislature has added some additional oversight which should address many of the concerns raised by those opposed to giving up any of their flexibility or control.”

The most significant change that will occur as a result of the legislation is the transfer of control of the state’s IT responsibilities from the Information Resource Management Commission (IRMC) to the state’s Chief Information Officer (CIO). A 12-member Information Technology Advisory Board replaces the IRMC and there will be additional oversight through the 16-member Joint Legislative Oversight Committee on Information Technology.  The final bill shifts the focus of the legislative oversight committee from electronic commerce to information technology operations within state government.

The adopted conference committee report responded to some of the concerns raised by Council of State members to allow departments of state government to seek deviations from certain procedures that require consolidation of important processing functions. Previously only the Department of Revenue could seek such a deviation. Under the compromise, a state agency unhappy with the CIO’s decision could appeal to a new three-member panel comprised of the secretary of administration, the state controller and the state budget officer. Even with this change, however, the final bill did not have the seal of approval from Council members, according to Sen. Eric Reeves (D-Wake), sponsor of the legislation.

Under the new law, the chief information officer, who is appointed by the governor, is given the authority to review and approve all state agency IT projects that cost more than $500,000. The CIO also has the authority to suspend the approval of any IT project that does not continue to meet the applicable quality assurance standards. The state courts and the university system will be exempt from the rules.


Bond agreement benefits university system and others
Following weeks of negotiations, the House and Senate reached an agreement to authorize $463 million in special indebtedness to benefit several of the state’s universities, provide for land preservation projects and build new juvenile detention centers. The approved projects will benefit health care and education and will be a boost to the state’s overall economy. The bill also includes a study of higher education strategy and creates a Debt Affordability Advisory Committee.

H 1264 Finance Vital Projects/Study (Miner R-Wake) authorizes funding over a two-year period for the following projects:
New cancer rehabilitation and treatment center at UNC-Chapel Hill ($110 million in ‘04-‘05 and $70 million in ‘05-‘06).
N.C. Cardiovascular Diseases Institute at East Carolina University ($30 million in ‘04-‘05 and $30 million in ‘05-‘06).
Center of Health Promotion and Partnerships at UNC-Asheville ($25 million in ‘04-‘05 and $10 million in ‘05-‘06).
Bioinformatics research center at UNC-Charlotte ($25 million in ‘04-‘05 and $10 million in ‘05-‘06)
Pharmacy school at Elizabeth City State University ($25 million in ‘04-‘05 and $3 million in ‘05-‘06).

Also included, contingent on approval by the Board of Governors, is $50 million for planning, design, land acquisition, site preparation and consulting services for several other university projects including a Center for Excellence of Teaching and Nursing at Fayetteville State University; a Joint Millennial Campus for N.C. Agricultural and Technical State University and UNC-Greensboro; the Mountain Area Health Education Consortium for the N.C. Center for Health and Aging at Western Carolina University; and a Center for Design Innovation to be operated jointly by Winston-Salem State University and the N.C. School of the Arts.

The approved legislation adds funds to preserve land for state parks and land around our military bases and funding to build new juvenile detention centers.

In a statement released jointly by President Pro-Tempore Marc Basnight, Speaker Jim Black and Speaker Richard Morgan, following approval of the bond package, the leaders said, “We are very pleased to have an agreement that will benefit people in all area of our state.

“The university projects are not only a tremendous investment that will improve health care and education across North Carolina, but also will have an enormous impact on our overall economy. These projects will create thousands of high-wage, high-skilled jobs, including many in the indispensable health-care industry. Such important jobs will help us replace some of the more than 150,000 manufacturing jobs that we have lost in the last several years.

“This proposal also supports our men and women in uniform. Our military leaders have said that too much growth and encroachment around our military bases threatens their ability to perform their mission. Preserving the land around our bases will help protect our military facilities during the next round of federal base closings.

“North Carolina is ranked fourth in the country for fiscal responsibility, and our debt ratios are already below the national average and better than most AAA-rated states. This bill allows us to fund the projects that are needed immediately, and also maximizes our ability to manage our debt better in the future.

In addition to the approval of projects outlined above, the bill requires the Board of Governors and the Board of Community Colleges to contract with an independent consultant to do a comprehensive study of the mission and educational program needs for the University System and the Community College System. The bill also creates a nine-member Debt Affordability Advisory Committee to advise the Governor and the General Assembly on the state’s debt capacity of the upcoming 10 years, issue guidelines on debt management policies that include target and ceiling ratios.


Studies bill gives clues to emerging political issues
One of the last bills to be approved by the 2004 General Assembly was the so-called Studies Bill, the measure passed each year that authorizes a number of independent study commissions and gives direction to the Legislative Research Commission on issues they may study prior to the next legislative session. Traditionally, study commission reports are made prior to the beginning of the next session and include several recommended bills that are introduced early in the next session. Highlights of the recommended studies that are particularly important to the business community include:

Study the Size/Scope of Boards and Commissions. This was a recommendation over a year ago from the Governor’s Commission to Promote Government Efficiency & Savings on State Spending and has had the full support of NCCBI.

Study the Availability of Health Insurance for Small Businesses and Trade Associations.

Local School Construction Financing Study. A 19-member commission is to be appointed to examine the present system of local financing for school facilities and “shall study alternative options for financing local school construction, renovation, repair and maintenance.”

Joint Legislative Education Oversight Committee. This on-going study committee is charged with several new items including exploring such items as E-textbooks for students, kindergarten admission requirements, updating the job description for school counselors, and testing reform.

Revenue Laws Study Committee. This on-going study committee is directed to study subsidiary dividend taxes, income tax derived from manufacturing, tax foreclosures, tax preferences, travel and tourism capital investment and a long list of other items. The most comprehensive issue included in the recommendations for the Revenue Laws Study Commission is a study of “Business Taxation.” The legislation says in part that “the committee may study comprehensive reform and simplification of the existing State taxes on business entities, including corporations, limited liability companies, partnerships, business trusts, associations, and other entities engaged in business.” The elements of the plan to be studied include repealing the corporate income tax, revising the current franchise tax and several other items.

Study of Various Ways to Promote Government Efficiency. Another follow-up from the Governor’s Commission to Promote Government Efficiency and Savings on State Spending is a directive from the General Assembly for the UNC system, the Judicial Branch, the Executive Branch, the Legislative Branch, the Community College System, and the Department of Public Instruction to study several items, including consolidation of administrative functions The Department of Administration is to report the results of the various studies to the Legislative Research Commission by January 15, 2005.

The Joint Legislative Transportation Oversight Committee is to continue its work and look at such items as I-95 tolls, alternative fuels and comprehensive transportation issues “including planning and scheduling of projects, legislative and executive oversight, revenues, funding and expenditures of the Highway Fund, the Highway Trust Fund and Federal Aid programs for transportation.

The Environment Review Commission is to study water restriction guidelines, establishing a Clean Air Trust Fund, and stormwater issues.

UNC Board of Governors Study. A study commissions consisting of 10 members is to study the election or appointment of members of the Board of Governors, the length of members’ terms, the number of terms a member may serve and the size of the Board of Governors.

Teacher Retention. The state Board of Education is directed to study issues related to effective recruitment and retention of teachers.

Health Care Workforce Development. A commission consisting of 21 members is to be created to “determine methods to increase the number of people providing health and dental care in North Carolina and to overcome existing barriers contributing to the heath care provider shortages”.

Study of State Boards, Commissions and Councils. In addition to the recommendation to the Legislative Research Commission that it may study the size and scope of boards and commissions, a separate study commission was approved to look at several issues relating to boards and commissions. The 28-member commission authorized in the legislation “shall examine the organization, powers, duties, functions, and funding of State boards, commissions, and councils.” Questions to be considered are 1) whether some of the boards, commissions, or councils should be eliminated or consolidated; 2) whether the number of members and the manner in which members are selected should be altered; 3) whether the number and frequency of meetings should be altered; 4) the cost of supporting each board and the productivity and effectiveness of the boards, commissions and councils.
 
Study Commission on Worker Retraining. The 32 member Commission is directed to examine 1) Business incentives that encourage employers to support efforts by employees to retrain in order to qualify for higher paying or non-exportable jobs by allowing employees time off, reimbursing employees for education expenses, or providing other support; and 2) Successful retraining incentive programs in this and other states.

For complete details on all legislative studies that were approved, go to the General Assembly website and go to the ratified copy of S 1152.


After minor changes, school calendar bill passes
The House and Senate compromised on the number of teacher workdays to eliminate, which allowed final passage of legislation mandating that most school systems will open no earlier than Aug. 25 and close no later than June 10. The House had proposed cutting teacher workdays from 20 to 10 but the Senate wanted to trim only five. The compromise recommended by House and Senate conferees to H 1464 School Calendar Changes settled on 15 teacher workdays and added some other provisions sought by opponents of the legislation. The final vote in the House, which accepted the compromise by a 59-37 margin, came at 3:02 a.m. Sunday. Systems that traditionally have a large number of snow days, mostly those in the mountains, can request waivers. The legislation received much discussion in committees and on the floors of both chambers over the last few weeks. Because of the questions that surrounded the bill, NCCBI continued to advocate a study to be conducted by the State Board of Education and the State Board of Travel and Tourism. A provision was ultimately added to the bill to direct the State Board of Education to study non-instructional teacher workdays to ensure their effectiveness. The school calendar requirements will take effect for the 2005-2006 school year.


Legislature creates Health Insurance Innovations Commission
Legislators accepted on a conference report that will establish the N.C. Health Insurance Innovations Commission. The legislation was supported by NCCBI, the Metrolina Health Initiative, the Charlotte Chamber, the Gaston Chamber and others. Creation of the commission also was recommended by the House Select Committee on the Rising Cost of Health Care and the Joint Committee on Small Business Economic Development. The commission will establish pilot demonstration projects across the state to test the modification of various state insurance regulations to allow carriers to develop and test alternative insurance policy designs. No state money was requested. The commission will apply through its staff at UNC-Charlotte for federal and philanthropic funding.


What measures didn’t pass during this session
Stopping bad bills from passing the General Assembly often is as important to NCCBI’s work on behalf of the business community as seeing to it that sensible legislation is enacted. Here’s a brief list of proposals – some good and some bad -- that didn’t make it through the legislative process:

 An attempt to cap the variable component of the motor fuels tax did not move forward. NCCBI, NCGo! and other groups opposed the cap because of the potential impact it would have on the Highway Fund and the Highway Trust Fund. It is estimated that the proposed cap on gas taxes would have resulted in a combined loss to these two funds of approximately $50 million. That would have significantly impacted the maintenance of roads and the funding to public transportation in the state.

 Efforts were stalled to cut the corporate tax rate. An effort to exempt a certain level of taxes for small businesses was approved by the House but the Senate did not include it in its version of the bill and it was not in the conference report. “In an election year, the leadership did not want to get involved in controversial issues, but frankly that is what they are paid to do,” said NCCBI President Phil Kirk. “Hopefully, they will move forward during the next session on key issues, including the reduction of the corporate income and personal income taxes.”

 Medical malpractice legislation, debated in Senate and House committees for the past year and a half, was not enacted during this session. Advocates for medical liability reform, including NCCBI, have testified before these committees, encouraging legislators to enact a limit on non-economic damages, a limit on attorneys' contingency fees, periodic payments and collateral source rule reform. The reforms would help ensure access to health care and would help control medical liability costs. The Senate passed a bill that did not include a cap on non-economic damages. A House committee held hearings but never took a vote on the issue. “It was inexcusable for the House not to take up the medical malpractice bill in light of this growing crisis,” Kirk said.


Just compensation legislation heads to governor for signature again
Following a veto by Governor Easley and a surprisingly easy vote in the House to override the veto, supporters of the “Just Compensation” billboards bill worked out a compromise that appears to meet with the administration’s approval. The Senate had overwhelmingly approved the original bill vetoed by the governor and was poised to reconsider the issue. The governor’s staff, wanting to head off an override of the veto in the Senate, strongly encouraged all parties to work out a compromise. Governor Easley is expected to sign the reworked H 1213 Monetary Compensation/Outdoor Advertising (Culpepper D-Pasquotank).

Representatives from the N.C. Outdoor Advertising Association, N.C. League of Municipalities, N.C. Association of County Commissioners, N.C. Sierra Club, Scenic North Carolina, and the N.C. Association of Planners met for hours to craft compromise legislation. Tony Adams, executive director of the N.C. Outdoor Advertising Association, praised the group’s efforts and noted that Sens. Dan Clodfelter and Scott Thomas were critical to the success of the negotiations.

NCCBI was an early supporter of the just compensation bill and, like other groups that supported the original legislation, was pleased with the final version approved by the House and Senate.

As reworked in the final hours of the legislative session, the bill abolishes amortization of outdoor advertising and requires the payment of monetary compensation for the forced removal of outdoor advertising by local government ordinance. The cap on compensation that was in the bill vetoed by the Governor (H 429) was removed. Under the provisions of the compromise bill, if the parties are unable to agree on the amount of monetary compensation, the case would go to Superior Court, which will then make the determination.

In lieu of paying monetary compensation, a county may enter into an agreement with the owner of a non-conforming off-premises outdoor advertising sign to relocate and reconstruct the sign. The bill provides for relocation of the sign to a location that is reasonably comparable or better than the existing location. If a comparable location is agreed upon, local governments will pay the actual cost of relocation and reconstruction at the new site, as well as up to 30 days of lost revenue. If a comparable location cannot be agreed upon within 120 days, both parties shall submit to binding arbitration. If the arbitrators decide that the sites offered by the local government are not comparable to the original one, then the local government would have to pay monetary compensation to acquire the sign.

The bill still includes a grandfather clause that allows those local governments with amortization ordinances on the books at the time of enactment into law of this bill to amend those ordinances into annexed territory or to extend them into a town’s extraterritorial jurisdiction.



Legislative Actions

 The House voted 82-14 early Sunday to accept a Senate bill that bars corporate and union donations to “527” political groups creates for any radio or TV ads that mention a statewide or legislative candidate 30 days before a primary election and 60 days before a general election.
 
 The legislature gave its nod to a request by Dare County to raise its sales tax by a full penny to eight cents – the highest in the state. Lawmakers also agreed to allow Gaston County voters to decide on a half-cent tax increase. Dare County plans to use its additional sales tax revenue for beach renourishment in the wake of Hurricane Isabel last fall. The Gaston tax referendum would go before the county's voters in November. Half of the money raised would go to Gastonia, which wants to use it to build a new civic center. The rest of the proceeds would benefit the county and the rest of its municipalities.

 The House on Saturday concurred with Senate amendments to H 1213 Regulate Deferred Deposit (Culpepper) and H 1636 Renewable Fuel Tax Credits (Tolson) and the measures were enrolled.

 The Senate on Friday concurred with House amendments to S 0916 Create Civil No-Contact Protective Orders (Clodfelter) and the measure was enrolled.

 The Senate on Sunday concurred with House amendments to S 1008 VA-NC High-Speed Rail Commission (Gulley) and the measure was enrolled.


Names in the News

State Schools Superintendent Ward leaving early
Mike Ward, the state superintendent of public instruction who announced earlier this year that he would not run for re-election to a third term, said Monday that he will clean out his desk at the end of August to follow his wife to her new job as a United Methodist Church bishop in Mississippi. Ward said he plans to move to Jackson, Miss., with his wife on Aug. 31. The Rev. Hope Morgan Ward is beginning a job as head of the Mississippi Conference of the United Methodist Church. "As a native Tar Heel, educated in our public schools and universities, I have been pleased to serve at a time when North Carolina has changed from a state whose public schools trailed the nation to a state that draws praise of the nation," Ward said in a new release. "Mike has been a strong advocate for our teachers, school employees and students," Gov. Mike Easley said in a statement. "Under his watch, North Carolina has made tremendous education gains over the last several years. Our test scores are at a record high, and he deserves a substantial amount of the credit for these achievements." Howard Lee, chairman of the State Board of Education, praised Ward for his work moving North Carolina into the forefront of standardized testing. Easley will appoint an interim superintendent to complete Ward's term.

House, Senate leaders announce appointments
One of the final pieces of business at the end of each legislative session is passage of the annual appointments bill in which the House and Senate leaders announced their picks for a myriad number of state boards and commissions. We sorted through the lengthy bill and picked out those of interest to the business community.

Senate President Pro Tem Marc Basnight announced these appointments: John Houser of Gaston County to the State Banking Commission. Willy E. Stewart of Wake County, Alan Lassiter of Perquimans County and Paul Boney of New Hanover County to the State Building Commission. George Matthew Wood of Pasquotank County, Reef C. Ivey of Wake County, Wendell Murphy of Duplin County, George Daniel of Caswell County and Frank Daniels III of Wake County to the Centennial Authority. Richard P. Coleman of Columbus County to the Clean Water Management Trust Fund Board of Trustees. Marguerite P. Watts of Pasquotank County to the Disciplinary Commission of the North Carolina State Bar. Jon Hamm of Wake County to the e-NC Authority. The Hon. Thomas K. Jenkins of Macon County to the Environmental Management Commission. M. Durwood Stephenson of Johnston County, Reginald Kenan of Duplin County, and Dell Murphy of Duplin County to the North Carolina Global TransPark Authority for terms expiring on June 30, 2007. Bruce Beasley of Wilson County to the N.C. Health Insurance Innovations Commission. Patricia Garrett of Mecklenburg County, William D. Hedgepath of Cumberland County, and Robert Yatko of Gaston County to the N.C. Housing Finance Agency Board of Directors. Janet Smith of Forsyth County to the Information Resource Management Commission. Elizabeth Wellons of Johnston County to the Board of Trustees of the N.C. Museum of Art. The Hon. Robert B. Spivey of Bertie County, Ray Hollowell of Dare County, Ernie Bowden of Dare County, Elsie Griggs Hollowell Pugh of Camden County, Ben Berry of Pasquotank County, and Larry Johnson of Camden County to the Northeastern N.C. Regional Economic Development Commission. Tannis F. Nelson of New Hanover County to the Board of Directors of the N.C. Partnership for Children Inc. William Witherspoon of Wake County, Douglas Howey of Wake County, Tom C. Mehder of Mecklenburg County, Michael Richard Hare of Perquimans County, and Anne Coan of Wake County to the N.C. Petroleum Underground Storage Tank Funds Council. Derryl Garner of Carteret County and Laura Wilson of New Hanover County to the N.C. State Ports Authority. Terry Wheeler of Dare County to the Property Tax Commission. Tom Morrow of Wake County and Anthony Copeland of Wake County to the Board of Public Telecommunications Commissioners of the N.C. Agency for Public Telecommunications. Beverly McCracken of Guilford County to the Board of Trustees of the University of N.C. Center for Public Television. Robert Bleeker of Cumberland County and Murray Greason of Forsyth County to the N.C. Railroad Board of Directors. Marsha Jordan of Lincoln County to the N.C. Real Estate Commission. David R. Twiddy of Pasquotank County, Thomas Hilliard III of Wake County, Robert Saunders of Wake County and Jim Funderburke of Gaston County are appointed to the Rules Review Commission. David Smith of Durham County to the Board of Trustees of the N.C. School of Science and Mathematics. Kirk Alan Preiss of Wake County to the N.C. Board of Science and Technology. Dr. Delilah Blanks of Columbus County and J. C. Batchelor Jr. of Cumberland County to the Southeastern N.C. Regional Economic Development Commission. J.W. Davis of Henderson County, Jewell Wilson of Buncombe County, and Tommy Jenkins of Macon County to the Western N.C. Regional Economic Development Commission.

House Speakers Richard Morgan and Jim Black announced these appointments: Ray Rouse of Wayne County, O. Temple Sloan of Wake County, Don Beason of Wake County, Bob Seligson of Wake County and Michael Weeks of Wake County to the Centennial Authority. Kevin Markham of Wake County to the Clean Water Management Trust Fund Board of Trustees. Gene Miller Jr. of New Hanover County to the Economic Investment Committee. Herbert J. Crenshaw of Wake County to the e-NC Authority. Donnie Brewer of Pitt County to the Environmental Management Commission. The Hon. Frederick Yates of Perquimans County, Gene Minton of Halifax County, and the Hon. Zeno L. Edwards Jr. of Beaufort County to the Northeastern N.C. Regional Economic Development Commission. Jeff Etheridge of Columbus County to the N.C. State Ports Authority. Lee Settle of Moore County and Graham Bell of Gaston County to the Rules Review Commission. Spencer Thompson of Mecklenburg County to the Board of Trustees of the N.C. School of Science and Mathematics. Allan Dameron of Brunswick County to the N.C. Turnpike Authority.

Budget Charts
These charts track how planned state spending evolved from a year ago when the General Assembly adopted its biennual budget, through the adoption of revised spending plans passed by the House and Senate and through the final version hammered out by the conference committee. In the chart on the next page, the final column shows the total revised spending levels for each major expense area.

Bills awaiting the governor’s signature
The following bills passed by the House and Senate were sitting on the governor’s desk awaiting his signature at the time the session adjourned