Legislation creating a public-private economic development enterprise cleared House and Senate committees on Wednesday. If it passes the General Assembly it is expected to be signed by Gov. Pat McCrory and start operations in July.
The aim is to create a nonprofit corporation that contracts with the state Department of Commerce to attract jobs and promote international trade and tourism. It would strive to be more like private industry, faster and more flexible than state government bureaucracy.
Sponsors stressed that the legislation creates protections against ethical abuses, including a conflict of interest policy, restrictions on gifts and travel, and prohibiting the co-mingling of state and private funds. Projects generated by the corporation would be subject to public disclosure if they receive state money. The corporation would be required to meet in public, periodically be audited by the state, and disclose the names of individual and corporate donors, among other safeguards.
The nonprofit group would be overseen by an accountability committee comprised of the secretaries of commerce, transportation, environment and revenue, and three members appointed by the legislature. It would have a 17-member board comprised of political appointments.
A big change since the last version of the legislation was aired, in early April, was dropping the requirement that the new corporation raise $10 million in private money before it could begin operating. Commerce Secretary Sharon Decker said at the time that it posed a major hurdle.
But Decker said Wednesday she was satisfied with the new requirement that the corporation only have to raise $250,000 in seed money. Then, it would have to raise $750,000 in its first year and $1.25 million in each additional year. The contract would be for up to five years.
After Wednesday’s House committee meeting, reporters asked Decker if she had concerns about Richard Lindenmuth, who has been interim chief executive officer for the new partnership plan since January and will presumably be named by the board as the permanent CEO.
On Tuesday, N.C. Policy Watch published a story online saying Lindenmuth has no economic development experience and his consulting company went into bankruptcy in 2010. It also reported a federal bankruptcy judge in a separate incident questioned his fiduciary abilities. Policy Watch reported Lindenmuth said the accusations were groundless.
Decker said Lindenmuth was vetted and his references checked, and she was satisfied with his answers.
There are identical bills moving through the House and Senate. Rep. Tom Murry, a Republican from Cary who has led the effort, said it was to ensure that one of the bills successfully clears all the hurdles. He said he thought it would be on the House floor next week. The Senate appropriations committee will discuss it on Thursday.