Order, everybody want to take their seat. This morning I would like to announce our sergeant at arms, they are Warren Hawkins, Dag Harris and David Lincoln. We're very pleased this morning to have a number of Pages here, Kenny Luck from Weit counties sponsored by representative Jackson, Britney Mc Manas also from Weit counties, sponsored by Representative Bobby Richardson. Kelly Norton from Berk sponsored by [xx] Black Wale and Tyrick Rhodes, also from Weit[sp?] County sponsored by Representative Shelly Willingham. This morning we're very pleased to have two special guests, who can give us a a lot of important information and they are willing to answer your questions about the new direction for economic development in the state of North Carolina. First we have the CEO of the Economic Development Partnership, North Carolina, Mr Christopher Chon, and certainly we welcome you down here to the microphone, and we're anxious to hear about the direction you're going to take to straiten North Carolina back to prosperity okay. Yes face it. Good morning everyone, how are you all? So, pleasure to be here this morning. I think I've been asked to just give basically an overview of this new organization, the Economic Development Partnership with Northern Carolina or EDP and see, that's a little bit in less of a mouthful, but that's what I'll be referring to, and giving a little bit background on the organization. What it's responsible for doing, how it came to be, how it's structured and then where it's going from here. So, my real honor to be here today. It's my first time addressing this particular committee. I do look forward to having a good, productive relationship with the House Commerce Committee given your also important role in making sure that we've got a good economic and business climate to get out there and present to companies from around the world. So, let me just start off with a bit of a brief background about myself. I am, some of you know, a relatively new resident of the state of North Carolina. Just over nine weeks of being a citizen here. So, it's been relatively kind of drinking from a fire horse not just from a professional standpoint, but just personally getting to know the area that I live in now and getting to know the state. I've been in economic development work for 17 years now. It's actually the only career I've ever known. I spent my first 10 years with the State of Ohio department of development, that was their commerce department equivalent right out of school, ten years in various responsibilities for the State of Ohio in a public sector agency, then I spent the past seven year as CEO of something called the Missouri Partnership. This was Missouri's privatization of its business recruitment and marketing functions. I had the pleasure of being the first employee of that organisation and growing it from a start-up entity into an organisation that was, very proud to say recognised as one of the best in class around the country with respect to their marketing and business recruitment efforts, so 10 years in a State government agency, seven years in a public-private partnership at the entire time focused exclusively on economic development especially in the area of corporate attraction, corporate expansion and business recruitments, so it's an honor to be part of the North Carolina team now, it's not a State where I had any personal connections or roots in, but it was certainly a State that was extremely attractive to me because I think we have very good product to go out there and sell around the world, I'll expand on that a little bit, but I also so believe in the model that has been set up here in North Carolina, this new economic development partnership model which again represents one of these public-private partnerships or organisations that has been formed here but also around the country. So that's a little bit of background or whom I am. The economic partnership development in North Carolina EDPNC. There are a number of functions that we're responsible for and I'll take you through each of those functions as I think as this group gets up and running, it is important for audiences all over the states understand what role that we play specifically in helping advance the economic development agenda for the state of North Carolina. Probably the most high profile part of what we are focused on is what we call business recruitment but is basically notion of what are we doing to position North Carolina as a location for new employers to come in to the state and set up operations. Those could be manufacturers. Those could be corporate headquarters.
Those could be operations like distribution facilities, data centers, food processing operations. It could be any of those types of industry sectors, or operations that we are trying to recruit into North Carolina. Very high profile part of what we do and very important part of what we do. Another area where we are focused is on servicing the existing employer base here in North Carolina these are companies that have already chosen to invest, and create jobs right here in our own backyard. We've got to make sure that we're doing all we can to connect those employers with any resources they need to ensure that those companies continue to stay in North Carolina, keep growing, keep adding jobs because again that helps strengthen the overall state that we're living in as well as our communities. A third function that we perform. Export and trade promotion. Essentially helping existing companies in North Carolina, mostly in the manufacturing space, and all over the state, helping these manufacturing companies increase their sales of products around the world. We have a lot of great, small and mid-sized companies who maybe aren't sure how to take those next steps from selling products here in the US to now selling them to China, Mexico, Canada, Europe, wherever in the world that they can find customers for their products they are trying to understand how they can increase their sales to those areas, grow their sales and then of course when they can grow their sales, it often means they have to expand right here in North Carolina again leading to more jobs and investments made right here at home. So helping these companies with their export needs very important part of what we do as well. Tourism promotion, also important to a lot of the local economies all over the state. Tourism here in North Carolina is at 20 billion dollar a year annual industry. It puts 200 000 some people to work, 52 million visitors a year coming in. Those are all dollars that are now circulating through our states economy but you have to have an aggressive promotion effort to go out there and convince families, individuals vacationers, conference planners, sports tournament holders, film producers all of those different subsets of the tourism promotion audience. Of course we have to try to reach them and convince them of why North Carolina is a beautiful place where they aught come spend their money rather than somewhere else when they are deciding where to take a vacation or where to hold a convention and then lastly, small business assistants there are a lot of great resources out there around the states to help small businesses get up and going. What we plug into in that process is counselling would be entrepreneurs and business owners on those first steps that they have to take in filling all the necessary permits and licenses that they need to get up and going as a business here in North Carolina, so we have a dedicated team internally that's constantly taking phone calls everyday from these would be entrepreneurs and helping walk them through those processes to make sure that they can start the groundwork of creating a business here which will of course hopefully be successful down the road and add some more of the job creation in the state. So those five functions are primarily what are done within the walls of the economic development partnership in North Carolina as you can see this work fits very neatly into a definition of marketing business development and sales. That's essentially what this organisation was set up to do, was to market, promote and sell North Carolina. Now we have a number of different customer audiences that we're promoting the state to on the business recruitment or existing employer expansion side, you can see very much that our customers are companies that are considering either growing their facilities here in North Carolina or bringing new facilities into the state. So for this audience it's very much a marketing and selling message about why North Carolina is an optimal place for these companies to do business. On the export promotion side you can see that the marketing message is very much about the quality of products that are manufactured here in North Carolina and why someone siting over in China or in Europe would want to buy those products from the manufacture here in North Carolina versus from a manufacture somewhere else in the United States. And then our tourism side, no surprise there, that's a lot of marketing effort again helping people understand all the beautiful assets that we have in this state and try to convince those vacationers and consumers why they should be spending their dollars here as opposed to in Virginia or North Carolina or somewhere else, but at the end of the day North Carolina that's the product that this organisation is responsible for promoting and selling to a diverse array of audiences and customers around the country and around the world. So the organisation itself,
we were set up as a 501 C3 non profit back in October, that's when the doors of the organisation officially opened. I had the privilege of joining the team in mid January. We're set up as a contractor to the North Carolina Department of Commerce. We're now performing all of these marketing, business development and sales functions on behalf of the commerce department as an independent contractor to that agency. That's where we derive a significant source of our annual budget, that contract with commerce is approximately 17 1/2 million dollars of year of operating dollars to go out there and perform the marketing and sales activities that I've talked about. But we're also now as a public, private none profit we're able to go out there and recruit investment from private companies who are interested in supporting the broader economic development goals for North Carolina. You can see that if we're successful across each of the different functions that we're responsible for, whether that's recruiting new industries to the state, helping existing companies grow, helping small businesses get up and going, helping promote tourism spending or increase in exports for North Carolina, you can see that if we're successful in any and all of these areas, that's going to create a lot of benefit for a lot of different private sector industries that are here in the state. A great example, utility companies. If we're successful in attracting more manufacturing and power intensive industry to the state, that's ultimately a good thing for them because guess what? They get to sell more power. Construction and real estate firms, same thing for them. The more economic development that occurs here in the state as a result to all these different activities, that's ultimately more customers for them on the construction and real estate development front. So these are the types of private companies that are already choosing to invest their dollars in the EDPMC which is great because at the end of the day what that does is it gives us an even broader base of resources with which to fund our various activities. In other words, the state of North Carolina they are investing $17 1/2 million of public funding through this contract with the EPDMC for us to go out there and facilitate this kind of economic development and yet for every additional dollar we can raise from the private sector that goes towards our overall budget the state is still receiving the benefit of that. It's just the state caps its amount of investment at 171/2 million when in reality they are getting $19 or $20 million worth of work being done because now the private sector has stepped in to provide some of those resources for us to go out there to market and promote North Carolina to our different customer audiences. That is probably the single biggest reason why North Carolina and fifteen other states, have gone about this effort to privatize their economic development functions. As I said, 16 States now in total close to a third of the US has chosen to adopt this privatization effort this public-private partnerships and now without no good reason as I said the biggest reason among them is that you're now able to leverage resources from the private sector in followings of the economic developments objectives for this organisation. A second big reason is having the kind of operational flexibility that you have by doing this in a non-profit process within the public sector, and I say that speaking very much from experience having spent 10 years in a traditional public sector environment, in the past seven years in one of this public private partnership models. Probably the biggest hallmark of that difference when it comes to the operating environment that we are in, we were bought to a board of directors here in North Carolina, 17 individuals from all over the State primarily from private industry, these are business owners of companies small, large and everything in between. There are individuals who are used to holding their corporation and their businesses accountable for results and that's the same level of accountability that they will be exercising with the staff of the EDPNC including myself, is holding us to the fire for performing at a certain level. That's certainly an added advantage of governance structure that we have but also important is that with this board of directors and with this operational structure we have the ability to reward excellent performance within the organisation, which is sometimes a very difficult thing to do within the public sector. Again having spent 10 years in the State of Ohio in the State Government, 7 years in a public-private partnership. As I told a group earlier this morning, one of those challenging things as a manager within the public sector, when I was in Ohio was the fact that you really weren't able to reward people who were performing way above what
their expectations were nor did you really have the tools to discipline those who were not performing at the standards expected the organization. And that can be very frustrating, not just as manager, but if you are one of those top performers. You are going out there, you are recruiting companies at a pace two to three times better than your colleagues, and someone else isn't pulling their way for those individuals, if they aren't getting adequately incentives or rewarded for excellent performance, guess what? They usually leave after few years because some one else can compensate them a little bit better when they are tired of sort of being treated the same as someone who is doing half the amount of work and having that kind of flexibility now that we're set up as a non-profit, to reward star performance and to rid out those who aren't performing to the level of expectations, that's very much a function of the governance structure that we now report to, there`s a board of director who again as I said they`re used to holding their organisation accountable for results, but they are also used to proving management the tools and resources they need to reward the kind of effective performance that you want the sales and marketing organisation to have that's the second reason why 16 states have moved in this direction. The third reason continuity and consistency of a long term, administrations change, governors change directors of economic developments and secretaries of commerce change that will happen in every single state, and the challenge that you run into in a lot of states is that anytime you have those kinds of changes there can be a temptation to have a wholesale change of the marketing direction or the marketing strategy, and any of you who are in your own businesses you recognize that for a marketing strategy to be effective, it really has to be consistently applied over the long-term, no marketing strategy can be effective it it's changing every two years, four years even eight years. You really want to be your market place with a consistent message that goes for a long time, in that long time we'll often spend multiple administrations, multiple commerce department change-overs that's very helpful and then of course we're in the selling business, and so in the selling business you have relationships with the buyers and the people who influence buying decisions. By having that kind of constant turnover in the public sector you really are running the risk of disrupting those important sales relationships every four to eight years or whatever those terms are in other States. Virginia just to our north they change governors every four years no matter what. So you can imagine it's no surprise that Virginia was one of the first to privatize their economic development efforts because with that kind of every four years turnover. It's impossible to have a long-term consistent marketIng message or a long-term sales relationships unless you take your economic development efforts, one degree removed away from that constant political turnover. So those three reasons; increased resources coming from private sector, improved continuity of message, inconsistency of relationships and then accountability for results ability to reward star performance. Those are the three big reasons I think 15 other states before North Carolina went down this path. of privatizing their economic development effort, s, and it's no surprise that other states are also continually looking at this matter. So that a little bit rational functionally speaking the organization we have proximatly 52 employee at this time a lot of books are based in the main office in [xx] but we also have individuals based all around the state in each everyone we call for eight prosperity zones. So these are individuals who are assigned to each of these different regions all over the state. Big part of what they do day to day is there calling on existing employers helping make sure that the businesses who are already here in North Carolina, have the resources that they need to stay and keep growing, very important function, we also have some of out business recruitment staff distributed around the state, they represent all of North Carolina know how companies find locations all over the state but they just happen to be physically based in markets like Charlotte or Greensburg and Greenville. In Addition to the fifth sum 4 times staff that we have in our tourism, export promotion, business recruitment, existing business and small business functions, we also contract with the number of individuals in overseas markets. This are individuals who are helping our organizations with a number of different things. One is helping facilitate inward foreign investments, coming from these markets where this individuals are based. Japan, China, Canada and Europe. We also have individuals based overseas who are helping to find buyers
and distributors for exports coming up in North Carolina those folks in the Uk, China, Mexico, Hong Kong and Canada. And then we also have in the tourism industry three contractors in the UK, Germany and Canada working with travel agents, and tour operators based in those markets, helping to get North Carolina on the ternary for visitors and development troops coming over from those markets to increase tourism spending's coming in form outside of Carolina, so that's how we're set up, we obviously have a lot of work to do, as two months into the job it's very much for me been about figuring out what's the reputation for North Carolina to each of these different audiences especially when it comes to the high profile work of cooperate recruitment and business attraction, that's a very, very competitive environment, you all know that, that's a big reason that you all helped to pass a house bill 117 a couple of weeks ago, you were helping to give us some of those very necessarily tools as we go head to head against the likes of South Carolina, Georgia and Tennessee and 46 other states as well as sometimes other countries ans we try to work through more importance and more industries to this state so long, term and I'll wrap up here and happily answer any questions before yielding the floor to the secretary of commerce. Some of our challenges, big part of it is how do we continue to raise visibility of the product that we're out there responsible for marketing, so whether we're promoting North Carolina to a tourism audience or business audience, big part of the challenge as a marketing and sales organisation simply making more of our target audience aware of this product, helping people understand what natural assets are available at vacation if they're tourists, helping businesses understand the tax regulatory and infrastructure advantages of setting up operations in North Carolina. Whatever those audiences are we need to make sure that we're connecting with the in a they way they understand the advantages of the product that will out their marketing. And then of course we want to make sure that we're developing relationships with the people that we believe are either making or influencing these decisions on where their companies locate to, where they vacation at, which exports they buy, all of these different decisions are certainly driven by individuals, business owners, corporate executives, trying to forge relationships with as many of this groups as possible, thats also necessary to sales function that we perform. So what I would ask of all of you especially as it pertains to things like the business recruitment effort. You are instrumental in giving us the product that we're taking out there to the corporate audience that we're catering to. When a business is looking at where it's going to expand or locate operations but the product that we're selling to them as you all know it's not ending in a fix or box or on a shelf. This product is the total of things like the quality and cost of our workforce, the quality of our physical infrastructure, the quality of our educational system and institutions. It's our energy rates, it's our tax rates, it's incentives, those are certainly part of what companies look at. It's this bundle of different intangibles that would be different for every single company or industry sector and yet so many of these things are issues that you all as members of the elected body, have immediate influence over what that quality of product like so. We get out there and sell the product, less assured, that our mission, we will market this thing, but we need you to keep give us a better and better product to take out there to market. To be successful, any state has to have a good product and a good promotional effort. One without the other isn't going to get any state any far. I could have 10 times my annual budget of 18 Million a year, but if I have a lousy product. If I'm Nejrsy or Elenony or Califonia, my sucess is probably going to be somewhat limited in getting companies to locate to those areas., at the same time, I could have the best business climate in the world to offer to companies from The US around and the world if there're no Dollars invested in getting out there telling the story, our success will also be limited, so it ha to be a bounce approach of strong product and strong promotion. We look forward to working with the commerce department and all of you who are focused on the product, and you trust us to do our work on the promotion and aggressive marketing and selling of that product. So, looking forward to a great relationship with all viewers very pleased to work with The Missouri General assembly on regular occasions, and appreciate all the work that you guys are doing, especially on something on the house build 117. That's a very necessary part of the world that we play in when it comes to recruiting business. So, at this time, happy to take any questions. Thank you Mr. Tron for a very detailed report on the new public-private partnership, we do have about five minutes for questions, I believe Representative
Tobie, did you have a question? I do Madam Chairman, thank you. Mr. John, thank you for being here, very informative. I appreciate the efforts you've put forth and George you're talking about the board that you work for basically, and their results [xx] we are bored that we work for about 9.9 million. So, we also are very interested in results, and I guess my question comes to point that their're numerous that my colleagues that believe a good tax policy is a successful start for both private and personal incomes and profitability. That being said, how are you guys in bench-marking and realizing what promote and successes be able to separate or differentiate between your actions being a direct result of this company achieving their goals, more so from the overall for lack of a better term legislative impact of tax policy better affecting goals. How are you all able to differentiate, so we understand your successes. Yeah, great question, I think part of it is, how many more deals are we getting to take a look at North Carolina. I think that's very much directly tied to our success in the marketing and business development function of what we're doing in the business recruitment side. North Carolina I think is in a position where because of the past, the historical success in growth of the state over the past several decades. It's in a pretty enviable position relative to other states in terms of just how it's regard by the business community. I think no surprise that we show up on top five rankings often for some of these business climates surveys that are commissioned by CNBC or Forbes or Chief Executive Magazine and that's great. That's gets us in the conversation much more frequently than Missouri or in Ohio which don't enjoy that top five ranking but you still need the tools that can be that's enough to maybe get them to make a phone call or send some statement of interest we know there is other states that also enjoy that. Texas, Georgia, those are also states that are also seen as very positively by the business community but it gets down to competing for each individual deal and that's when you have to have things like good tax policy, and good workforce, and good education institutions, good incentives, good infrastructure all of those things. In terms of how do we know that our efforts are yielding the kind of results that we want, sure we could certainly wait for the phone to ring based on the merits of how we are seeing but no. I think the one way that we demonstrate results is by aggressively going out there and trying to get North Carolina in front of even more companies that are looking at where they choose to locate and expand. I'm very confident that with an aggressive coordinated marketing effort, we'll put north Carolina in the competition for even more deals than we might otherwise have seen prior to putting in place some marketing effort like that. So I think that's going to be one reason that I hope to show value and as I told the group earlier this morning, one bench mark for who we plan to ask is are we being successful in that regard? That's very much for us, that input will come from the local economic developers, folks like Danny in Dastin county, if they aren't seeing more deal flow, as a result of our economic development marketing efforts then it means we aren't doing our jobs but I'm very confident that if I can have this name sort of success here that I was able to be part of in Missouri through that aggressive proactive marketing effort, we're going to see North Carolina compete for even more deals than we might have otherwise without putting in place this type of effort. Thank you. Representative Bradford Thank you madam chair First of all welcome to North Carolina congratulations to you on all your success. I represent Mecklenburg County but I spend a fair amount of time to the west part of North Carolina, and when I'm there and I tune in to my local news, I pick up South Carolina Broadcast news. And my observation has been that the South Carolina news media talks a lot about the companies by name that they are actively recruiting or maybe companies that are actively considered in South Carolina, and companies that I have to imagine are probably looking at North Carolina as well. My observation has been that we often learn about companies that have gone to another state and I've to believe that behind the scenes, North Carolina and is actively recruiting those companies but we always hear about them in the post mortem phase. My question to you is I understand that this are sensitive negotiations, you've none disclosure agreements all the above, but what's your plan to make sure that North Carolina's understand when that's appropriate? Who are we recruiting?
How are we recruiting them? And not just after we find out they went somewhere else. This way North Carolina's know that your department certainly is out doing the things that you're supposed to be doing. What's your plan to attack then? That's a great question, I think there's no easy answer to that, you want to respect the confidentiality the company is dealing with and I think all of you can guess or know what's the reason are why a company want to keep as much of this wrapped up before they go public with the decision. I think one way that, I think there's plenty of information we can produce in regular basis to our board or our investors in other state holders, that shows what that pipeline of activity looks like, I think it will be very difficult to prematurely disclose who those companies are, out of respect for the companies themselves, I think in 17 years I've run in plenty of situations where state cause themselves the chance to win the deal because they want discrete about safe guarding the information of the company and trusted them with and I never want that to be the reason for North Carolina to loose a deal is because we got loose lips and someone let the name of the company out, but everything up until the identity of the company itself, there are plenty of ways where we can be talking about that in terms of what are our activities level look like, here is the difference, industries sector we are even trying to court. I will even talk in turns about the types of deals because we were pursuing up until point, I feel like we went much more than that, someone could deduce who that company was. I think that's all we can offer be going beyond that, I just wanted jeopardise our States chances to win that deal because the confidentiality really is key, any company will tell you that there's a lot of reasons take something like corporate headquarter relocation, these are individuals and families who don't yet that they're going to be asked to move from Chicago or New York to North Carolina. The executives they do not want that sort of thing getting out there prematurely until they are ready to announce that. So a lot of reasons beyond something like that but we want to be respectful of that our Representative Burry. Thank you, Madam Chairman. Mr Chung when you went through your biography, I guess I cannot lit up a little business said Okay this is a guide that may have some insights and what I'm looking at that's your take on because you are from Ohio, I have an opportunity to go up through there occasionally and, of course, there's real busy area in Kentucky right across the river and then you get into Cincinnati, but that's the Cincinnati metro area we have one of those and of course Representative Bradford begun this is the shylock method area, and Charlotte Metro area consist a lot of portions of South Carolina. In fact your predecessor the [xx] Regional Partnership. This body was funding the partnership and part of their charge was to find businesses for the Metro-Charlotte area which included four counties in South Carolina I wanted to ask you just, and really briefly it is. What is your experience with working for Ohio has the same thing. Bringing it to North Carolina when you're dealing with a that includes some place in another state, and is it often times an advantage for we created so much to yourself to actaully, if you can get a company that decides to, wants to come into the region they would just [xx] see them in [xx] South Carolina for example across, instead of going to Columbia, and the interior or something like that Great questions. You are very correct in saying that companies many times do look at regions. When some locates in the pull workforce from all over the region, South Carolina, North Carolina and the like, and the economic impact of that type of certainly spills out beyond any single county or state line. We wanted on the North Carolina side of course, [xx] people are mistaken, because there is certainly some benefits for the State when those jobs were done [xx] but, by recognizing the people that work on that location because [xx] people from South Carolina and others that region. So, I think that's fine. I think when we're talking about attracting new companies and of course I want to win those skills on North Carolina side. To answer your question, yes there is certainly going to be some benefit even if it doesn't but I assume I don't want to be, just roll over and let South Carolina win those. I think when you get with into those regions that [xx] the more dangerous avenue, is
something we're starting to see down there and something I saw in Kansas city which strudels Missouri and Kansas state line, as well as Cincinnati which strudels Northern Kentucky and Ohio, is when you start getting into a situation where existing employers within the region simply pick up and move 100 yards across state line to a new state, and leverage brand new incentive package that's often times worth a lot of money but that doesn't really add new economic activity to the region. That's largely unfortunately one way in Charlotte area right now, company going from I think Mecklenburg over to South Carolina, but there could be a day when it becomes much more back and forth, a god poster child for this is Apple Bees in Kansas City Apple Bees was founded in Missouri, they relocated to the Kansas side, a couple of miles away across state line road, received 10 million in incentives from the state from Kansas back in the middle 90s, 10 years later, when their lease expired, they picked up and relocated to Missouri, Missouri offered them $10 million in incentives to pick up and move those jobs. No new jobs within the region and yet both states pawned up $10 million of real money that could have gone towards other necessary public services for no net new economic in. That's the thing I kind of worry about when you have this regions that [xx] state line is hopefully both state legislatures, North and South Carolina could come to some agreement were they're not going incentivive that type of inter-regional relocation if their is no net new activity that's probably a topic for a much lengthier discussion Representative Graham. Thank you madam Chair, and Mr. Chung and thank you for being here and that was out standing presentation and welcome to the March madness. Thank you I'm being neutral, on a team I already have a team it's called Ohio State. Couple of questions I represent a rural county southeastern North Carolina in Lumberton, Robeson County. You touched base on a couple things here that really struck my attention and it's food processing, distribution and exports of course all of Eastern 95 is pretty much raw going towards the port and my question to you is, in terms of the agribusiness here in North Carolina. What discussions have you had with our Secretary of Agriculture in terms of agribusiness and the opportunities here for food processing, exports, refrigeration especially going to Africa and to the East so just promoting agribusiness in North Carolina what is your thoughts on that? terrific question. [xx] with our secretary [xx]. We have already have a Secretary Steve Arwin, myself, as well as Commissioner [xx] we've already had a few meetings talking about ways we can increase collaboration with agriculture has a lot of great subject matter expertise when it comes to our egg industry and what that industry means in terms of value for food manufacturers and food processing. Agriculture is something 78 79 billion a year, its the largest industry sector for state, but commissioner Troxler and the rest of us believe that there is room to grow that through attracking the more the value added activity, processing and food products manufacturing, and those are the types f projects that will definitely look in all corners of a state like North Carolina which is great because the more deal we can get that are looking at an entire state vs just one or two areas that expands the playing field, that we can put in fornt of a company as a potential location, so I should have a follow up meeting with them on Tuesday to talk about different events that we can collaborate on in terms of marketing North Carolina to companies within that industy and other ways we reach that audience with the message of why North Carolina had to be the home to a companies future food processing for manufacturing facility. And by the way I'll actually be speaking to the Robinson county committee of 100 here on April 8th so I'm not sure if he'll be back in tej district so I'm looking forward to the chance to do that. Mr. Chang, we do have four other members who have questions, but I do want to stop the questioning at this point to give secretary Cabola a chance to say a few words to the committee, Mr. Chan may be able stay a little bit after all. I'm sure we will have both of them back at future commerce meeting, so to address issues as we go along for this session. So, secretary [xx] you have the microphone. Thank you, Madam Chair he's pretty good, in't he? I'll talk about the partnership in just a minute and I'm going to be very brief. I thought thought he was doing a great job, and I want to hear the other four questions myself. Three things to say thank you for. One is thank you for creating
the legislation and the organisational structure to create the partnership. I think Chris gives you an idea of how valuable this is going to be for the state of North Carolina, and I can tell you assuredly we've got the right guy running it. He's an outstanding leader he understands the business he's seen it from the public and the private side and we are absolutely delighted that the partnership exists and you can see the enthusiasm and the vision that he's got and the experiences he's got thought this is going to work. Second thing to thank you for is house bill 117. The Governor asked in the state of the state message to let's get us the tools to get back in the game as Chris so articulately stated we need a companion of tools, we need a great stay, we need tax climate, we need regulatory climate but we also need incentives because we are not going to be the first to disarm, you know its going to be the last to disarmament, nobody else seems to be disarming, we need the incentive tools and you stepped up and you got house bill 117 team, not only in good order, you got it in good time and representative Martin, thank you representative [xx], thank you. It was wonderful done, it was a great collaborative effort with the operating agency, the house of representatives, the governors office, we crossed all the Ts and doubted all the I and presented a bill and its a great bill and I hope we can see that bill continue to make progress and the third thing I want to thank you for really a bigger picture is understanding exactly how the incentive program works in the state. The rhetoric around incentives is endless and amazing in the breath and scope of the misunderstanding and I can't thank you enough for understanding that our primary program the JDIG program creates net revenue to the state every time we use it. It is not a cost to the state it is a contributor to the state and this house understands it and that's why 117 works so well but I can assure you there are members of the general assembly as a whole and they are members of the nine million population in North Carolina who truly don't understand that and part of our obligation education and we've got to continue to enforce the fact that, that incentive program is a net contributor to the state revenue to the state coffers and we need to have it. Just as an easy example and I'll take questions since 2003, the JDIG program has generated $500 million in revenue to the state. Of that 500 million 150 million has been awarded or reimbursed to the companies who created those new jobs. 150 of the 500 and 50 million has gone into the utility fund which gets spent and the 80 most economically needy counties. Not in the top 20 but of the 100 counties 20 are excluded and 80 get the money. So in addition to things like the rural infrastructure authority and the golden lee[sp?] there are other programs that are designed to help those counties. There is a keen recognition in our primary program that there needs to be some expenditure in those 80 counties and $50 million have been placed into that, but at the end of the day we take in 500 million we spend 200 million in reimbursement and utility fund in my simple form of Mathematics it's 300 million left in the treasure, so how that a scholarship program I don't know, but please help me continue to educate, because education seems to be the missing component. Because our job, now that the partnership exists, is and I say this to Chris, kind of tongue in cheek, but it's true, He's proud to be supposed to be the star and ideal world leader out there finding every great deal. My job is to be the old experienced, grey haired guy who's been knocked down every set of stairs, and deciding whether they are or are not meritorious of getting economic support from the state of North Carolina. And our second job at Commerce is to continue to provide him the product, that he can use in his quiver of arrows to sell, because at the end of the day, that's what it's all about, to grow this economy.
So, thank you so much for 117. If you just want a perception analysis from someone who is not a psychologist, think of what the outside world is seeing in North Carolina right now. We were unable to get an incentive bill last session. this session the house steps up and up and gives us 117 immediately. since then there's been two other bills introduced and then there's conversation about another bill, an [xx] style. I'm starting on the other side of the glass, now what do I see in North Carolina? We don't have our act together and the one thing every company in the world wants, every human being in the world wants is certainty. and we have the obligation, if we're going to be in this business, if we're going to grow our economy we have the obligation to provide that certainty and it's right there. We just need to do it. There's a Banday bill that's being proposed, should I call it. $5 million between now and July it's half a losf because the certainty in that bill is to extend the sunset of the program to 2020, just like you did in 117, so we can give the world certainty that we're serious about this business. Again, my four thank you, thank you for all your help, thank you for getting it and let's get what we need so we can get back in business and let's learn some of the opportunities to increase sustenance force so I'll be happy to answer any questions or we can bring Chris back up here and let him answer the four questions he didn't get reached, madam Chair. Mrs. Secretary I certainly apologize, we have run out of time for the room. We would love to have both of you and Mr. Chen back. For those individuals didn't get your questions answered please let the chairs know or have the opportunity to speak privately, but we're happy to have them back and address your concerns in the future agenda and that's one reason we didn't have any bills today was to allow plenty of time for this board insertion and we'll continue it. Thank you both for being here, this committee is adjourned.