SEPTEMBER 20, 2002 * ISSUE NO. 16 * 2002 Short Session The Legislative Bulletin is published weekly by NCCBI exclusively for its members Index of stories below: Democratic defections kill lottery in the House... Tourism development grants bill wins panel's endorsement... NCCBI's Bevacqua rated one of state's top lobbyists... Employers give high marks to community college worker training... Appeals Court sides with Boyce's claim that Cooper defamed him...Calendar of events...This and past issues of the Bulletin going back to 1998 can be downloaded from the NCCBI web site at http://www.nccbi.org/Legislative_Bulletin/index.htm

House and Senate agree on a budget,
raising hopes session will adjourn soon
Legislative activity that had proceeded at a snail's pace for a month suddenly became a whirlwind this week as House and Senate leaders reached no less than three compromises on the state budget -- the third of which was the charm. On top of that the House saw its first-ever floor vote on a state lottery. As most observers predicted, the lottery went down in flames but the third budget deal between Gov. Mike Easley and Democratic leaders in the House and Senate held fast. Hurried votes in both chambers on Thursday pushed the $14.3 billion compromise budget through second reading. The House convened at 8 a.m. today and the Senate at 10 a.m. and each gave final approval to the spending plan. Those final votes send the spending plan on to governor, who is expected to sign it, clearing the way for the General Assembly to take up a few final pieces of legislation next week, with adjournment likely by the end of the month.

The House and Senate accepted the joint conference committee's report on S. 1115 Modify Appropriations Act of 2001 (Aaron Plyler) largely along party lines. In the House, 61 Democrats and two Republicans voted yes and 53 Republicans voted no during Thursday's second reading. The Republican yes votes were Reps. Monroe Buchanan of Green Mountain and Connie Wilson of Charlotte, although Wilson later said she pressed the wrong button and would vote no on third reading. In the Senate on Thursday, 33 Democrats voted yes while 15 Republicans and one Democrat, Sen. Ellie Kinnaird of Chapel Hill, voted no. The final budget is slightly larger than any of the spending plans adopted earlier by the House and Senate and the proposal offered months ago by the governor. Although the bottom line in the final plan is 3 percent smaller than the original budget adopted a year ago, it represents a 4 percent increase in spending from the $13.7 billion budget used during the recession-wracked 2001-02 budget year. See the chart below on growth in the state budget over the past 15 years.

The spending plan is rightfully being called an education budget because that's about the only area seeing increased spending. It funds Gov. Mike Easley's two priorities: reducing class size in first grade and expanding the More at Four pre-kindergarten program for at-risk children. It fully funds enrollment growth in the public schools. While other state employees get no raises (but 10 more vacation days), teachers, principals and assistant principals get a step increase in pay. The governor was happy: "This is a good budget that makes the critical investments in education that will ensure that North Carolina remains competitive in the global economy," he said. Here's a recap of this week's rush of budget events:

Budget Deal No. 1 floundered Monday when House Republicans and some Democrats objected to including in it a voter referendum on a state lottery. House Speaker Jim Black had two reasons for tucking the lottery into the budget bill. One, he needed the revenue to balance the budget, and, two, he believed some members leaning against the lottery would hesitate to vote their conscience if it meant killing the budget. But howls of protest from Republicans and Democrats alike scuttled the plan. The lottery was broken out of the budget, sent to the House floor on Tuesday and quickly killed, 69-50. See separate story below.

Budget Deal No. 2 withered Tuesday under the serious threat of a veto by Easley, whose Irish tempter boiled over when budget conferees left out $27 million to fund his More at Four pre-kindergarten program and $42 million to reduce class size in first grade by hiring 600 more teaches. Legislative leaders beat a hasty retreat and restored the money for Easley's pet projects, albeit at the expense of cuts in other areas of education, including $5 million chopped from the UNC System budget and $5 million lopped off community college spending. The Tobacco Trust Fund was raided for the money to pay for the additional first-grade teachers.

Budget Deal No. 3 emerged late Wednesday and was declared acceptable to all concerned, mainly because it wasn't offensive to anyone concerned. It didn't propose a lottery. It did include money for the governor's educational programs. And it came fairly close to being balanced. A first draft of the third compromise came within $110 million of being balanced, a yawning revenue gap that the budget conferees decided to leave up to Easley to close. But he didn't take the bait. He said he would have accepted the challenge of closing a $110 million revenue gap if he had the lottery revenue to play with. Having previously ordered two rounds of massive spending cuts under his emergency budget powers, Easley wasn't about to willingly spill more budget blood. House and Senate leaders tried again and came back with a budget that's within $41 million of being balanced -- a deficit itemized under the novel category of "negative reserve." Easley and the Democratic leadership held their nose and accepted the deal, mainly, they said, because time was running out. The continuing budget resolution under which the state is operating is set to expire in less than two weeks.

Even its Democratic defenders admit that the final budget has a major problem, besides its "negative reserve" that will be closed through unspecified cuts by state agencies during the remaining nine months of the fiscal year. It relies on some $800 million in nonrecurring money to help fund continuing operations, the fourth year in a row that the General Assembly has used such stopgap measures and a major reason why Moody's stripped the state of its Triple A credit rating. Even the House's chief budget negotiator, Rep. David Redwine (D-Brunswick) conceded that's a problem. "We can't go on like this," he told reporters. The budget also relies on $330 million in local government reimbursements but does not include language allowing local governments to raise sales taxes by a half-cent to make up the difference. However, Senate and House conferees today reported to the floor a new conference report for S. 1292 which would put into effect a half-cent local option sales tax on Dec. 1. The state half-cent expires on July 1, 2003. The net effect, if this legislation is enacted, would be the overall sales tax rate would be seven cents from Dec. 1 until July 1, 2003, when it would revert back to six and a half cents. This bill is scheduled for debate by the Senate and the House on Monday night.  
 
Other controversial items in the final budget bill:  

The state's pharmaceutical industry took a big hit in the wallet when the budget conferees decided against including language in the bill blocking a plan to save the state millions in Medicaid expenses by steering recipients toward generic drugs. Health and Human Resources Secretary Carmen Hooker Odom has advocated the plan for a so-called preferred drug list for Medicaid recipients. Still on the table, however, is Hooker Odom's offer to the drug manufacturers to drop the "generics first" policy if the industry agrees to pay the state $20 million to expand the cheaper Carolina Access Medicaid program. Pharmaceutical companies say such a contribution is illegal under federal law but budget conferees said they added language to the final budget addressing that concern. 

A provision that the Senate inserted in its budget allowing teachers to have PAC contributions to the N.C. Association of Educators automatically deducted from their paychecks survives in the final budget. NCCBI lobbied against the provision, fearing that it takes the state one step closer to a full-blown teachers union.

The final budget includes several finance provisions that were previously considered in the revenue bill. Included in the budget package is language to conform state law to federal EGTERRA pension and retirement provisions, which has been strongly supported by NCCBI. Also included is conformity to federal bonus depreciation regulations under a plan that delays the state's full compliance with those regulations, as in legislation previously approved by the House. Other revenue law changes include a change with regard to the definition to business income and a change to equalize the franchise tax on corporate-affiliated LLCs. Both of these provisions have been described by legislative leaders as "closing loopholes." Not included was a provision opposed by NCCBI regarding the "throwout rule" and language to clear up ambiguity in the current law on subsidiary dividends, on which NCCBI and others have been advocating change. It's expected the subsidiary dividends issue will be dealt with in a separate bill next week.

Among other major items left on the General Assembly's plate as it winds down the session is economic development incentives legislation. The House-passed H. 1734 Economic Stimulation and Jobs Creation Act is pending in the Senate. The legislation allows the state to target desirable new and expanding industries by creating a program to refund to such industries up to 75 percent of state income taxes paid by workers in those new jobs (see the August 30 Bulletin for details). Gov. Easley said he will continue pushing for passage of the legislation, saying, "Once the budget passes (Friday), it will be time to focus on the challenges of economic development and industrial recruiting packages still pending in the legislature." That bill is scheduled to be taken up by Senate Finance on Monday. Also, the "Do Not Call" bill strongly opposed by NCCBI, H. 1612 Stop Unwanted Telephone Solicitations, remains in a House committee.

GOP opposition, Democratic defections kill lottery in the House
Fourteen House Democrats deserted the party leadership on the lottery issue and helped hand Gov. Mike Easley the first major political defeat of his administration. The 69-50 vote against holding an advisory referendum on a lottery during the Nov. 5 general election was the first time the issue had received a floor vote. In the five previous times that the Senate passed a lottery bill the measures all died in committee. Easley predictably was upset. “It is unbelievable that the legislature would deny the people of this state the right to vote on a lottery," he said. "This means that legislators have to cut an additional $70 million out of the state budget at a time when we are trying to meet the demands of a growing school age population. I commend those members who did vote in favor of an education lottery and demonstrated that they are realistic about the budgetary and education challenges facing our state. I hope that those members who voted against the bill will now offer an alternative solution since they have refused to offer any viable solution for the past two years.”

In the roll call on S. 2 Authorize Lottery Referendum (Tony Rand), 47 Democrats voted yes and 14 voted no. Fifty-five Republicans voted no and three voted yes. If the measure had passed the House and been approved by voters on Nov. 5 -- most polls have shown public support for a lottery as high as 70 percent -- legislators would have returned to Raleigh after the election for a decisive vote on the issue. 

The floor vote came after House leaders backed off their idea of rolling the lottery into the compromise budget bill. After the vote, House and Senate budget conferees returned to work looking for an additional $70 million in cuts that would have been covered by lottery profits in the last two months of the current fiscal year.

Legislative Actions
Tourism development grants bill wins committee's approval
The House Finance Committee on Tuesday favorably reported H. 1751 N.C. Tourism Development Act (Beverly Earle), a measure that  would make arenas, convention centers and other publicly owned tourism projects eligible for new state grants. For the second time in two weeks, the committee rejected an amendment to exempt major professional sports teams from receiving the grants. Opponents pushing that amendment said the legislation's primary purpose is to help Charlotte build a new arena to house a new NBA franchise. Committee members from the Charlotte area denied that, saying the legislation would provide grants equal to only a small part of a proposed $231 million downtown arena. The legislation would create a Travel and Tourism Capital Incentive Grant Program in the Department of Commerce, which would make grants to local governments equal to a percentage of the state sales taxes and business privilege taxes generated by the tourism-related facility. The percentage would be highest -- 35 percent -- in poor counties and lowest -- 25 percent -- in affluent areas. The grant could only be used for capital costs, including debt service. A five-member panel would begin making grants next year and receive applications through June 2005. The grants, limited to 10 in any one year, could be spread out over a 10-year period. Legislators earlier agreed to cap the awarding of annual grants at no more than $20 million.

Bill becomes law without governor's signature
Gov. Mike Easley refused to sign legislation passed last month by the General Assembly overturning a Coastal Resources Commission rule against constructing swimming pools in coastal setback areas, and the measure became law after laying on his desk for 10 days. A spokesman for Easley said he disapproved of the bill on environmental grounds. The measure, H. 1540 Disapprove CAMA rule, passed the House by a vote of 99-9 and the Senate by a vote of 26-2 -- numbers well beyond the reach of a veto.

FedEx bill advances: The House on Thursday gave second-reading approval to H. 1665 Interstate Air Couriers - Bill Lee (Lyons Gray), the measure to extend the deadlines for tax credits previously approved for the FedEx cargo hub at Piedmont Triad International Airport from 2006 to 2010. The bill was on the House calendar for a final vote today.



NCCBI News
Bevacqua rated one of state's most effective lobbyists
NCCBI Vice President of Governmental Affairs Leslie Bevacqua was rated one of the most effective lobbyists working in the General Assembly in the annual survey conducted by the N.C. Center for Public Policy Research. Bevacqua moved up from seventh to fifth place in the rankings, which are based on a survey of all 170 legislators, the 321 registered lobbyists and legislative liaisons based in North Carolina and 28 capital news correspondents. She is the only woman in the Top 10 and becomes the highest-ranked woman in the 11-year history of the rankings. NCCBI President Phil Kirk ranked 14th in this year's determination of the Top 50 lobbyists, down from eighth last year.

The rankings confirm the influence and respect NCCBI commands in the General Assembly. Bevacqua is the highest-rated female association lobbyist and Kirk is the highest-rated male association lobbyist. NCCBI is the only association with two lobbyists in the Top 50.

"I was pleased to be recognized by my peers for the work I do on behalf of NCCBI," Bevacqua said. "However, I believe it is a recognition of the effectiveness of our association more than the effectiveness of what I do. NCCBI is involved in a wide range of issues, so for me it is a great opportunity to work with all members of the General Assembly and with other lobbyists representing individual companies, other associations and citizens groups." 

"We're thrilled with Leslie's ranking," Kirk said. "In the membership survey we conducted last spring, our members said they think our lobbying effectiveness was very important and these rankings confirm their high opinion. However, this is a team effort with contributions from all members of our staff, including Steve Tuttle, who writes the Legislative Bulletin, and Julie Woodson, who worked full time in the legislature as director of government affairs. It also is a tribute to our members, many of whom stay in close contact with legislators on many issues."

Most of the top lobbyists are full-time professionals who work for multiple clients. Zeb Alley, who represents Deloitte & Touche, Ernst & Young, KPMG Peat Marwick and several other clients, was ranked No. 1 for the eighth year in a row. In second place was Don Beason, whose Capitol Group lobbying firm represents BB&T, BellSouth, CP&L and others. Third was Roger Bone, whose Bone & Associates firm represents Carolina Independent Auto Dealers Association, Eli Lilly & Co. Lorillard Tobacco Co. and others. Fourth was David Horne Jr., with the Raleigh law firm of Smith, Anderson, Blount, Dorsett, Mitchell & Jeringan, who represents Brady Sales & Service, CP&L, Centex Rooney Construction Co., the N.C. Medical Society and several others.

Bevacqua rose to fifth place in the ranking in the survey even though she didn't have any of the four things most other lobbyists apparently used to their advantage. NCCBI doesn't have a PAC and remained neutral in the lottery debate. Bevacqua also isn't a lawyer or a former legislator. Nearly three-fourths of the most influential lobbyists have at least one client with a PAC able to make contributions to state political campaigns. Eight of the 48 most influential lobbyists worked on one side or the other in the lottery debate. Also, lawyers and former legislators continued to dominate the top spots in the rankings. Twenty-seven of the 48 most influential lobbyists are lawyers while nine of the top 48 are former legislators.

Several lobbyists working for NCCBI member companies also ranked high in the survey, including Jeff Van Dyke of BellSouth, Fran Preston of the N.C. Retail Merchants Association, Gene Ainsworth of R.J. Reynolds Tobacco Co., Gene Upchurch of Progress Energy, Chris Valauri of the N.C. Beer and Wine Wholesalers Association, Hugh Tilson of the N.C. Hospital Association, Michael Carpenter of the Home Builders Association, John McAlister of Duke Energy, Harry Kaplan of the Harrison J. Kaplan law firm, Eddie Caldwell of the Hafer & Caldwell law firm, Tony Adams of the Outdoor Advertising Association, and Kenneth Wright of Blue Cross and Blue Shield.

Politics
Dole, Bowles agree to debate next month
Guilford College in Greensboro will host an Oct. 19 debate between Democrat Erskine Bowles and Republican Elizabeth Dole in the race to succeed retiring U.S. Sen. Jesse Helms. The debate, sponsored by the N.C. Association of Broadcasters, will be broadcast by about 30 TV stations around the state and several radio stations. The candidates haven't yet agreed on a format but both Bowles and Dole both have said they like a town-hall style with questions from the audience. Bowles has proposed six additional debates but Dole's campaign has not accepted the offers.

Recount confirms Carolyn Grant as GOP nominee for new congressional seat
Raleigh business woman Carolyn Grant will be the GOP candidate for the state's new 13th Congressional District and will face state Sen. Eric Miller in the Nov. 5 general election. A recount of the votes conducted earlier this week showed she edged Graham Boyd by 175 votes. Several other tight primary races were decided after recounts, including the GOP primary for a seat on the state Supreme Court in which Fayetteville lawyer Edward Brady narrowly defeated state Court of Appeals Judge Ralph A. Walker by just 1,536 votes. Brady will face Democrat Justice G. K. Butterfield in the Nov. 5 election. Other developments in close primary races:

Sen. Howard Lee conceded defeat to Sen. Ellie Kinnaird in the Democratic primary in the 23rd Senate District. A final tally showed him trailing Kinnaird by 119 votes out of nearly 25,000 cast. Kinnaird will face Republican Peter Morcombe.

In the Democratic primary in the 16th House District, F.D. Rivenbark of Burgaw trails Jack Barnes of Hampstead by four votes out of about 1,600 cast.

In the GOP primary in the 68th House District, Joseph Carter of Albemarle is 23 votes behind George Crump of Rockingham out of about 1,000 cast.

In the Democratic primary in the 5th Senate District, James Johnson III of Wilson is 137 votes behind Tony Moore of Winterville out of nearly 15,000 cast for four candidates.

Replacement Candidate: Cynthia Barnett of Raleigh, director of development for The Opera Company of North Carolina and a former staff member at NCCBI, was chosen by party leaders as the Democratic replacement candidate in the House 34th District race. She will take the place of  Julie Paul, who unexpectedly pulled out of the race last week. Barnett, 58, will face Republican lawyer Don Munford and Libertarian Victor Marks in the general election Nov. 5. The incumbent, Republican Art Pope, decided not to seek re-election in the district.

NCCBI Member Candidates: The following candidates for public office in North Carolina are members of NCCBI.  "This is not an endorsement of these candidates, but it does provide an indication of their general support for business,"  NCCBI President Phil Kirk said. "If we left anyone out, please let us know and we will publish their names later."

U.S. Senate: Erskine Bowles
U.S. Congress: Cass Ballenger and Robin Hayes;
State Senate: Marc Basnight, Linda Garrou, Tony Rand, David Hoyle, John Garwood, Kay Hagan, Dan Clodfelter, Bob Carpenter, and Allen Wellons.
State House: Bill Owens, Ronnie Smith, David Redwine, Jim Crawford, Arlie Culp, Harold Brubaker, Frank Mitchell, Eugene McCombs, Wilma Sherrill, Drew Saunders, Ed McMahan, Martha Alexander, Connie Wilson, Stan Fox, Joanne Bowie, Alice Underhill, Phil Baddour, and Leslie Cox.


State Government Watch
Most employers give top ratings to community college training program
Nearly two out of three employers surveyed rated as excellent the skills their workers acquired under the New and Expanding Industry Training program administered by local community colleges, according to a report to the State Board of Community Colleges. The survey also shows that community colleges are offering more such worker training programs in rural areas. Dr. Larry Keen, the system's vice president for economic and workforce development, said 67 percent of employers surveyed said the training was excellent, 29 percent ranked the training very good, and 3 percent said the training was acceptable. Employers also were asked to rank the impact of training on the company’s operations. About two out of three said the worker training programs had had an excellent impact on their businesses, 26 percent said the training had a "very good" impact, while 6 percent said the impact was acceptable. North Carolina had 26 percent fewer new and expanding companies last fiscal year than the prior year, which resulted in a 24 percent reduction in the number of training projects. Also, the number of workers trained decreased 39 percent. The New and Expanding Industry Training program, which began in 1958, was the first state-supported customized training program in the nation and has been copied by other states.

DOT plans public hearings on highway projects 
The N. C. Department of Transportation will hold a public hearing Monday on the proposed U.S. 17 Washington Bypass in Beaufort and Pitt counties. The meeting will be held in the Continuing Education Building at Beaufort Community College on Highway 264 East near Washington. DOT proposes to widen portions of U.S. 17 to a four-lane divided highway and construct a four-lane freeway on new location near Chocowinity and Washington. Alternatives under consideration include a route following existing U.S. 17 through Chocowinity and bypassing Washington just to the north; a similar route includes a short bypass south of Chocowinity; and a route bypassing both Chocowinity and Washington further to the north. Additional right of way and the relocation of homes and businesses will be required. Meanwhile, DOT will hold an informational workshop Monday on the proposed U.S. 25/I-26 connector in Henderson County. The workshop will be held from 4 p.m. to 7 p.m. in the Patton Building at Blue Ridge Community College in Flat Rock. DOT proposes to widen N.C. 225 to four lanes from U.S. 25 at Zirconia to Interstate 26. The project will provide the region with a connector between U.S. 25 and I-26.

• Four at the interchange of Interstate 40 and Interstate 77 near Statesville in Iredell County.
• Four at the interchange of Interstate 40 and Interstate 95 near Benson in Johnston County.
• Two at U.S. 17/N.C. 87 and U.S. 17/74/76 in Brunswick County near Wilmington.
• One at U.S. 421, 1 mile south of N.C. 132 (Monkey Junction) in New Hanover County.
• One on N.C. 132 a block east of King Drive in Wilmington.

Legal Beat
Appeals Court sides with Boyce's claim that Cooper defamed him
Raleigh attorney Dan Boyce will get his day in court to argue that Attorney General Roy Cooper defamed him during the 2000 election with a TV ad that implied Boyce had unethically charged exorbitant attorney fees in lawsuits against the state. A unanimous three-judge panel of the N.C. Court of Appeals ruled Monday (No. COA-01-880) that a Wake County Superior Court judge improperly dismissed the defamation suit by Boyce, the Republican candidate for Attorney General, against Cooper, the Democratic candidate. The panel also disagreed with Cooper's cross-appeal that the Wake County judge erred by failing to take judicial notice of that fact that the State Board of Elections had dismissed Boyce's complaint. The opinion was written by Judge Patricia Timmons-Goodson and concurred in by judges K. Edward Greene and Linda M. McGee -- all Democrats.

At issue was a TV ad run by Cooper's campaign committee implying that Boyce and his law firm, Boyce & Isley, charged taxpayers $28,000 an hour in attorney's fees in the successful suits over the constitutionality of state intangible property taxes and state income taxes on retirees. In pertinent part, the ad said "Dan Boyce, his law firm sued the state, charging $28,000 an hour in lawyer fees to the taxpayers. The judge said it shocks the conscience. Dan Boyce's law firm wanted more than a police officer's salary for each hour's work. Dan Boyce, wrong for Attorney General."

"We conclude that plaintiffs set forth sufficient specific facts to support their claim that the statements made by defendants were false. If proven, the above-stated facts would show that defendants' advertisement contained several central errors of fact, publication of which tended to falsely imply that plaintiffs had sued the state and demanded excessive fees for their work at the expense of taxpayers," Judge Timmons-Goodson wrote. But while the Appeals Court said Boyce should get his day in court against Cooper, the judges implied his defamation suit isn't a slam dunk. "It will be (the firm members') substantial burden, as this case progresses, to provide sufficient evidence to support their claim that they have suffered actual injury as a result of defendants' actions," Judge Timmons-Goodson wrote. "At this juncture, however, they are entitled to proceed with their claims." 


FedEx Update: The Alliance for Legal Action, a group of Triad residents fighting construction of the FedEx hub at Piedmont Triad International Airport hub, petitioned the Fourth U.S. Circuit Court of Appeals in Richmond, Va., to accelerate a trial on its claim that the  Federal Aviation Administration did not adequately investigate the environmental consequences of building a hub at the airport. The court granted the request. 


Eye on Washington
Commerce cites progress in protecting textile industry
The U.S. Department of Commerce on Wednesday released the first Textile Working Group report to the Congressional textile caucus. The report outlines the Administration’s accomplishments in improving conditions in the U.S. textile industry. “This Administration made a promise to the U.S. textile industry and its workers,” said Commerce Secretary Don Evans. “We take that commitment seriously. This report highlights our accomplishments to date and is the first step toward fulfilling that commitment. President Bush and I know that the American worker can compete in any market, given a level playing field where free and fair trade flourish.” The Textile Working Group is an interagency group that was created in January when the Administration promised to ensure that textile and apparel industry concerns were addressed. The report says the working group has:

Pursued the opening of foreign markets to U.S. textile/apparel products and made reciprocal market access a priority in all future trade agreements.
Resisted demands in the World Trade Organization by textile supplying countries to accelerate the integration of our textile quotas.
Worked on 25 compliance issues with a variety of countries, with special attention on India, Egypt, Pakistan, China, Mexico, and Brazil.
In July, Pakistan reduced duties on 55 textile products requested by the United States.
U.S. Customs stopped $300 million in illegal trade involving 162 factories which were closed down as a result of U.S./Hong Kong Customs joint efforts..
The Committee for the Implementation of Textile Agreements charged back $28 million of trade against China's quotas last December.
U.S. Customs seized $14.2 million worth of textiles and apparel that was either transshipped or violated intellectual property rights.

American Textile Manufacturers Institute Chairman Van May said he was encouraged by the Commerce Department report, but he said it was just a first step. "Secretary Evans’ update on the Bush Administration’s efforts to help the U.S. textile industry shows that a broad array of textile issues continue to receive attention at the highest levels of our government. Clearly, much needs to be done to establish fairness and equity in international textile trade. In many cases some efforts – such as our textile negotiating objectives in future WTO trade talks, strict enforcement of current and future trade agreements and of U.S. laws against unfair trade practices – will require ongoing efforts by the United States Government and the continued support of the Bush Administration."

May added: "We would note that, since the Textile Working Group was established last January, 33 more textile plants have closed in the United States, including six in the last two weeks. At the same time, Asian exports from countries, such as China, Taiwan and Korea that illegally intervene in currency markets to gain export advantages, have surged to unprecedented levels. Further, the same textile export markets that were closed one year ago remain closed today and the plethora of tariff and non-tariff barriers to U.S. textile exports also remain. Important government tools for opening such markets, such as the withholding of growth on growth quota increases, withdrawal of GSP benefits and the filing of WTO cases remain, to date, unutilized. Finally, regarding Customs enforcement, while the government has opened several new investigations regarding textile smuggling, the interdiction rate is only a small fraction of the likely illegal trade." 

Commerce Secretary Evans announced formation of the interagency textile working group during a January appearance at a Burlington Industries plant in Cordova, N.C., at an event attended by Cong. Robin Hayes (R-8th), Gov. Mike Easley and textile industry representatives. Formation of the group resulted from promises the Bush Administration made to several textile state members of Congress to secure their votes for Trade Promotion Authority last December.


Washington news briefs from the National Association of Manufacturers

BellSouth wins approval to offer long distance: The Federal Communications Commission on Wednesday gave final approval for BellSouth to offer long-distance telephone service in North Carolina, South Carolina, Alabama, Kentucky and Mississippi. Not included in the order were two other states in BellSouth's service territory -- Florida and Tennessee. The N.C. Utilities Commission in May approved BellSouth's petition to offer LD services in North Carolina. However, it was up to the FCC to determine that BellSouth had complied with a 1996 federal law allowing Baby Bells into the long distance market after they had opened their networks to competition by other providers.

Accounting boards pledge to cut differences: The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) will seek to eliminate certain differences between the two panels’ accounting rules as a step toward global convergence of standards. In the short term, FASB and IASB are expected to focus on differences in standards that would be comparatively easy to erase.  The rulemaking could take about two years. 

Administration releases draft cyber security report: The White House on Wednesday released a 100-page draft plan aimed at protecting major cyber systems.  The report takes a market-oriented approach and urges industry cooperation. "It's not about government regulation,” says Howard Schmidt, vice chair of the President’s Critical Infrastructure Protection Board.  “Rather, let the market forces do their best to make the changes for us.”  The public has 60 days to comment on the plan.

Senate asbestos hearing set for next week: Fulfilling a promise made this summer, Senate Judiciary Committee Chair Pat Leahy (D-VT) has set a hearing on the asbestos litigation crisis. More than 3,000 companies are now involved in asbestos litigation.  The NAM-led Asbestos Alliance seeks common-sense solutions that allow judges to make distinctions between cases involving people deserving of compensation (those who are sick) and people exposed to asbestos but showing no symptoms of illness.

Fate of small business tax relief tied to amendments: Senate Finance Committee ranking member Charles Grassley (R-IA) says the fate of a $16 billion small business and agriculture tax-relief package depends in part on what amendments senators might seek.  Prospects for Senate floor action would dim if Republicans decide to seek amendments to provide for permanency of various elements of the $1.35 trillion tax relief law, he says, or if Democrats seek to add language to increase the federal minimum wage.

Tort reform remains top priority of terrorism-insurance legislation: Provisions shielding companies from liability in litigation arising from terrorist attacks remain an informal discussion topic among key lawmakers and staff confronting differences between House and Senate terrorism insurance bills H.R. 3210 and S. 2600. Conferees on the legislation have not yet formally met, but there are member-to-member and staff discussions under way. At issue are provisions in the House bill requiring companies to pay back federal money and prohibiting collection of punitive damages by victims of future attacks.

Shrinking trade deficit aided by fall in imports: The Department of Commerce report that the monthly trade deficit receded $2.2 billion in July to $34.6 billion, as exports increased a solid $1.1 billion, confirms a gradual recovery in U.S. exports. It was the smallest monthly trade deficit since March. More than a third of July’s export increase was from automotive products. NAM calculations show that manufactured exports have risen 10 percent since their low of last January, reflecting the dollar’s slight decline from its 16-year high earlier this year. 

D.C. news briefs: Mounting budget deficits and uncertainty about Iraq have forced President Bush to shelve plans to seek a new round of tax cuts this year, White House Budget Director Mitch Daniels said Wednesday.... Democrats in the House, backed by two GOP senators, began circulating a petition to force a vote on a Senate bill that would accelerate the approval and marketing of generic drugs, the New York Times reports.... Senate Democrats are prepared to bring legislative activity to a screeching halt in a lame-duck session if Sen. Jean Carnahan (D-MO) is defeated in November, an outcome that would temporarily give Republicans control of the chamber before the 108th Congress is sworn in, Roll Call reports.... A new independent poll shows Ed Rendell (D) leading Mike Fisher 47-39 percent in the Pennsylvania gubernatorial contest.


Names in the News

Burley Mitchell, the former chief justice of the state Supreme Court who now heads the appellate and governmental relations practice groups at the Womble Carlyle Sandridge & Rice law firm, was appointed to the American Bar Association's s Presidential Task Force on Corporate Responsibility by ABA President A.P. Carlton. The task force was created earlier this year to address legal and ethical issues stemming from the fall of Enron Corp. 

Steve Lusk of Raleigh, deputy director of the financial services division of the Administrative Office of the Courts, was elected the new president of the State Employees Association of North Carolina during the group's annual convention. He will succeed departing president Shirley Bell of Clayton, a chemistry supervisor in the state Laboratory of Public Health.

Jerry Richardson was named director of the State Bureau of Investigation's Crime Laboratory by Attorney General Roy Cooper. Richardson has served in the SBI since 1987.




The NCCBI master calendar of meetings and events

Visit us at 225 Hillsborough Street, Suite 460, Raleigh, N.C.
Write to us at P.O. Box 2508, Raleigh, N.C. 27602
Call us at 919.836.1400 or fax us at 919.836.1425
e-mail: info@nccbi.org

Co_pyright © 1998-2001, All Rights Reserved