Senate Bill 613, signed into law by Governor McCrory on July 3, establishes the new “North Carolina Military Affairs Commission.” The purpose of the Commission is to provide advice to the Governor, the General Assembly, the Secretary of Commerce, and various state agencies on initiatives, programs, and legislation that will:
- Protect the existing military infrastructure in North Carolina against incompatible development, future military budget cuts, downsizing or consolidation, future Base Realignment & Closure (BRAC);
- Promote new military missions by supporting the vitality, prosperity and expansion of our military operations;
- Improve quality of life for military members and families by protecting and enhancing military programs and benefits; and
- Support economic opportunities for the state by leveraging opportunities for North Carolina businesses and growing our economy.
The Commission’s vision is to make North Carolina the most military-friendly state in the nation.
Military activities accounted for $23.4 billion in State GDP in 2008, with North Carolina businesses receiving $4.1 billion in defense procurement contracts. Defense-related businesses operate in 87 of North Carolina’s 100 counties, and $2.1 billion in statewide disposable income was created through incremental military activities.
Overall, the military supports roughly 10 percent of North Carolina’s economy. The military supports 540,000 jobs in North Carolina, $30 billion in state personal income, and $48 billion in gross state product. 340,000 of military-supported jobs occur in the private sector, with Professional and Technical Services, Administrative and Waste Services, and Construction being the top three military-supported private industry sectors. For more information on the economic impact of the military in North Carolina, please read this report from the North Carolina Department of Commerce.
The Commission will consist of 20 voting members, with the Governor appointing ten members, and the President Pro-Tem of the Senate and the Speaker of the House appointing five members each (with one member from each chamber who has either served in the military or has extensive experience in the area of military affairs). The terms of the appointed members will be for two years, and the chair would be appointed by the Governor from the voting members. The Commission will also include two non-voting members (a House member and a Senate member from districts that have a military installation), and non-voting ex-officio members (or their designees).
The legislation passed the General Assembly unanimously.
With the passage of House Bill 628, so-called “Green Building” rating systems can only be used in the construction of certain state-owned buildings if its certification favors North Carolina’s home-grown building materials.
LEED (Leadership in Energy and Environmental Design) is a national rating system for the design, construction, operation, and maintenance of “green” buildings, homes and neighborhoods. Under the LEED system, points can be awarded in five categories: sustainable sites, water efficiency, energy and atmosphere, materials and resources, indoor environmental quality, and innovation and design process.
Roughly half of all construction projects in North Carolina are LEED certified. LEED certification has become a gold standard of sorts in the construction industry, and its proponents claim that meeting its requirements can mean a significant return on investment in terms of increased energy efficiency, health and productivity — as well as the financial benefit of receiving tax credits. North Carolina’s Sustainable Energy-Efficient Buildings Program requires that any major facility construction or renovation project (such as state university and community college buildings) use these sustainable, energy-efficient building standards.
Green buildings cost significantly more upfront, but a 2003 study of 33 LEED projects found that compliant buildings can yield savings of over ten times the initial investment after 20 years. Other studies have shown that LEED certified buildings can bring in higher rents, sale prices and occupancy rates.
Not everyone is a fan of LEED certification, however, including many green builders. Gennaro Brooks-Church, a LEED certified AP himself, sees the entire scheme as overrated and largely unnecessary: “LEED and green building so far have very little in common. In fact, anyone who uses LEED as proof of their green building kudos is either a newbie wannabe or a marketing agent wanting to sell you something (and it aint green building). LEED is better than building crap. LEED is better than chopping down the rain forest. But LEED is a deterrent from practical, affordable, ethical and easy green building. You can build a LEED Platinum building by fudging the numbers and spending lots of money on useless elements, but it takes a lot of time and paper-pushing.”
Bias against local materials has crept into the ratings criteria over time and poses a threat to the state’s forestry sector and the thousands of jobs the industry supports. Rather than establishing a set of specifications that a supplier could meet, the LEED design group began certifying certain suppliers and programs themselves, presenting a barrier to other qualified competitors such as Sustainable Forestry Initiative and the American Tree Farm System. These programs are used by owners of private forest land in North Carolina, promoting “sustainable forest management through a set of standards developed by professional foresters, conservationists, scientists and others, addressing key environmental, social and economic forest values — from water quality and biodiversity to harvesting and regeneration.” Read more...
Over the last several months, there have been a number of mischaracterizations in the media regarding a new law that will bring common-sense health and safety standards to clinics which provide abortions in the state of North Carolina. Contrary to what many activists have said, the legislation does nothing to change federal law or limit woman’s right to choose.
What are the health and safety provisions in the new law?
There are two. The first will allow the Department of Health and Human Services (DHHS) to apply the same safety and hygiene standards to abortion clinics that now cover outpatient surgery centers. These commonly-accepted health standards were put in place to safeguard patients seeking personal medical care at outpatient (or “ambulatory”) surgery care facilities. Any type of surgery carries with it the inherent risk of medical complications, and abortion-related complications can include infection, excessive bleeding, and uterine perforation. While uncommon, these complications can sometimes be significant enough to require hospitalization or further surgery.
Fortunately for everyone, the risks involved to the mother’s life during a surgical abortion are extremely low. And while statistics vary, according to the Guttmacher Institute, the chances of death associated with abortion in the United States is just one out of every 29,000 women (at 16-20 weeks pregnant) and just one out of every 11,000 women (at 21 or more weeks).
But by expanding existing safety and hygiene standards to cover all facilities that provide outpatient surgical abortions, all North Carolina’s women, rich and poor alike, can finally access sanitary facilities and share in better quality medical care.
But aren’t North Carolina’s clinics safe and clean now?
Everyone wants them to be; health risks to women only increase in those facilities which fall short of maintaining basic standards of safety and hygiene. In the last decade, under already existing regulations, over 200 citations have been issued against clinics — and more recent violations of these long-established regulations are troubling indications that future improvements need to be made.
If you are even an occasional reader of this space, you know that I put very little stock in “best places for business” lists. There are too many of them, reflecting too many different and mutually incompatible methodologies. They produce conflicting information and often bear little relationship to what is really going on in state economies.
Rather than measure elite opinion about states and what they ought to be doing to promote economic growth, I prefer to measure economic growth itself. If you start by identifying economic pacesetters, you can then identify what factors make them pacesetters — and, in turn, which of those factors can be affected by public policy.
In an earlier column, I noted that the latest Bureau of Labor Statistics data on job creation show that North Carolina is now outperforming the national average. According to a broader set of economic data compiled by researchers at the Federal Reserve Bank of Philadelphia, North Carolina is in an even stronger position than I originally thought.
The Philly Fed produces a monthly “coincident index” for all 50 states. The index combines four indicators: nonfarm payroll employment, average hours worked in manufacturing, the unemployment rate, and inflation-adjusted employee pay. The Fed researchers then tie each state’s index to its GDP growth rate.
During the Great Recession, the coincident index for North Carolina dropped precipitously. But over the past two years, the state’s economic performance has improved markedly. In October 2013, North Carolina’s index value reached 164 — precisely the index value our state had reached on the eve of the recession in late 2007. Read more...
Click the image above to open a fully interactive, 48-page PDF of the latest issue of The Raleigh Digest. It’s a fairly large file, so it may take a second or two depending on your internet connection.
To be frank, sometimes legislation that’s passed by the General Assembly just isn’t, well…very exciting. Some bills do nothing more than make seemingly minor technical changes to an existing law or put clarifying language on the books so that the legislature’s intent is less ambiguous down the road. HB743, now law, is such a bill. It makes the following technical — although very important — changes to SL 2013-2, a new law which brings sweeping reforms to North Carolina’s troubled unemployment insurance system:
- Clarifies that penalties are paid into the Supplemental Employment Security Administration Fund and then transferred to the Civil Penalty and Forfeiture Fund;
- Corrects a reference to the Unemployment Insurance Reserve Fund as an Enterprise Fund and not a special revenue fund;
- Clarifies that amounts in the account of a reimbursing employers in excess of 1% of taxable wages will not be refunded to the employer and will be retained as a credit;
- Determines the minimum and maximum number of weeks of benefits based on the seasonal adjusted statewide unemployment rate over a three month period. S.L. 2013-2 originally used the unemployment rate for a single month to determine the weeks of benefits, and using an average of three months avoids administrative delays when the U.S. Department of Labor adjusts the unemployment rate for a month subsequent to the announcement;
- Corrects the definition of “disciplinary suspension” to less than 30 days from more than 30 days;
- Requires by law that employers must state a basis for a protest of a claim within 15 days from the delivery of the notice of filing of a claim;
- Requires by law that benefits are not paid until one of the following occurs: the employer files a protest, the 14-day period to file a protest expires, or the claim is adjudicated;
- Requires by law that employers with 25 or more employees file wage reports in an electronic format;
- Moves the effective date from Monday, July 1, 2013 to Sunday, June 30, 2013 — because claims for unemployment benefits are based on weeks beginning on Sundays;
- Directs the Governor to appoint the members of the Board of Review by September 1, 2013 and allows the initial Board of Review appointments to serve without confirmation by the General Assembly.
f Review appointments to serve without confirmation by the General Assembly.
A new law provides greater transparency for citizens when it comes to the actual cost of indebtedness associated with bond referendums. House Bill 248 — The Taxpayer Debt Information Act — says that when a bond initiative is put on a city or county ballot, it must now include a statement informing voters that the debt includes interest — and that taxes could be raised to satisfy payment of both the principal and interest on the debt. The new law also requires that the estimated interest amount be included along with the principal amount of the bond request.
General Obligation bonds give politicians the authority to issue new indebtedness, but the taxpayers — who are responsible for actually paying it back — are often the least informed as to the true cost. “As a county commissioner for many years,” said Representative Debra Conrad during floor debate on April 18, “I had to consider adoption of bond orders for many projects and was concerned that only the bond principal amount was emphasized during the bond adoption process and on the ballot question with little or no mention of the interest paid on the bonds, which as you know is a considerable amount.”
Key stakeholders were brought together to provide input during the crafting of the bill. These included the North Carolina League of Municipalities, the North Carolina Association of County Commissioners, the Bonds Council, and representatives from the North Carolina Treasurers Office, which oversees the bond process. The bill was not opposed by any of the stakeholders and received unanimous approval when it went before the House Finance Committee.
During the month of November, House and Senate members return to Raleigh to resume their specific studies during the interim. This month, subcommittees began reporting their findings as members had an opportunity to examine, critique and offer refinements to existing law.
Joint Legislative Economic Development and Global Engagement Oversight Committee
The Joint Legislative Economic Development and Global Engagement Oversight Committee met on November 7th to hear a variety of reports on the status of North Carolina’s economy. Regardless of the economic turmoil of the recent years, North Carolina is beginning to rebound and new jobs are developing in our communities.
In a report from Ted Abernathy, a partner at Economic Leadership, LLC, members saw the trends in employment over the last decade. Jobs are beginning to shift away from manual labor and more jobs are opening in our private sector businesses, particularly in the hospitality industry and the health system. Similarly, North Carolina’s GDP is above the average of other southern states in the manufacturing and financial industries. Additionally, North Carolina ranks in the upper half of all states in its contributions to the tech and science workforce nationwide and has almost doubled its influence in the last three years.
Commerce Secretary Sharon Decker updated members on the Department’s Economic Development Partnership and Tony Almeida briefed the committee on the McCrory administration’s strategic planning on jobs and the economy. Both the Department of Commerce and the McCrory administration have a strong dedication to establishing a public-private partnership in North Carolina and are working to engage private sector resources and additional funding in economic development throughout the state.
Earlier this year, the North Carolina General Assembly overwhelmingly passed House Bill 247, banning the use of a controversial health insurance contract provision that’s informally referred to as the “Most Favored Nation” clause (MFN).
The new law will allow healthcare providers and insurance companies to freely negotiate reimbursement rates.
The MFN clause in business contracts takes its name from the international practice of establishing reciprocal economic relationships. The provision guarantees that a country receives trade advantages equal to the “most favored nation” by the country granting such treatment. As part of a business contract, the MFN (sometimes also referred to as a ‘most favored customer’ clause or ‘most favored licensee’ clause) requires a seller to provide a buyer the lowest price offered to any rival purchaser. Ostensibly, this is meant to guarantee the lowest prices or rates to any buyer.
“ It is my belief that we need to return North Carolina’s health insurance market to a competitive state, and certainly in the last 15 years we have gone from having over thirty insurance companies offering health insurance; and we’re now down to seven.”
—Representative Justin Burr
Advocates of MFN provisions in the insurance world argue that the measures can, in theory, be pro-competitive by encouraging competition and lowering prices for consumers. The Antitrust Division of the U.S. Department of Justice said that in most instances MFN clauses should be viewed as “a legal attempt to adapt to competition” because: Read more...
A pair of “beer bills” made their way through the legislature this year and were signed into law. House Bill 829 allows the sale of malt beverages in refillable 64 oz. containers (known as “Growlers”) in grocery stores, wine shops, bars, restaurants, and other establishments where alcoholic beverages are already sold. Growlers are currently sold in South Carolina and, since North Carolina is the home of nearly 100 craft breweries, the new law is expected to make our brewers’ product more available.
According to the Beer Institute, the state’s breweries contributed over 65,000 jobs to the state and more than $7 billion to the state economy last year. “Enactment of the Growler Bill will allow the industry to continue to thrive and help ensure that the state remains a craft beer epicenter in the future, said Patrick Gleason in a June 26 article in Forbes Magazine. “The Growler Bill isn’t just a boon to brewers and beer nerds; the expansion of commerce it will generate is also good news for the state economy.”
House Bill 610 allows vendors to sell beer in the seating areas of smaller-sized sporting arenas and stadiums in North Carolina. Currently, the law only allows roaming retail beer sales in stadiums with a 60,000-seat or greater capacity and in cities with populations of over 450,000 people — effectively shutting out every other venue in North Carolina except the 73,000-seat Bank of America Stadium in Charlotte.
The new law lowers the seating threshold from 60,000 to 3,000, and it eliminates the “hometown population” requirement — opening up in-stand beer sales for dozens of college football stadiums and minor league baseball stadiums in tens of thousands of communities all around the state. Selling beer in the stands alongside other food and drinks provides convenience for sports fans (especially those with mobility issues) and will certainly reduce foot traffic and long lines at vending stations. Other portions of the current law would remain in effect, including prohibiting employees from verbally shouting or hawking the sale of beer, not allowing sales to the underaged or visibly intoxicated, and the requirement that food and non-alcoholic drinks also also be available to North Carolina’s millions of sports fans.