News Releases for June 2004
June 16, 2004
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Hoeven Outlines New Accountability Measures For State Economic Development Programs
Plan Includes Job Creation And Wage Reporting, Clawback Provisions
BISMARCK, N.D. - Gov. John Hoeven today announced a plan to provide greater accountability in North Dakota’s state economic development programs, including specific requirements for reporting job creation numbers and wages, and with clawbacks for companies that don’t meet their goals.
Previous attempts in the last legislative session to bring forward accountability measures were unsuccessful, owing primarily to a lack of consensus among lawmakers on how best to do that. Hoeven said he has already begun working with legislators to provide more accountability without imposing bureaucratic burdens on professional developers. He has also consulted with state and local developers to ensure that new legislation is workable from a practical standpoint.
“We are committed to continuing to improve both our reporting on state subsidies, as well as the effectiveness of our economic development programs,” Hoeven said. “Good reporting and accountability will further strengthen support for our programs.”
Gene Veeder, president of the Economic Development Association of North Dakota, said, “We report to locally driven economic development entities, and we support the state’s efforts to provide the people of North Dakota with information about economic development projects.”
State Rep. George Keiser, sponsor of the new bill, said, “We had four or five bills introduced late in the last session, which didn’t give us adequate time to work with all of the constituents. This bill will enable us to work with the public, economic developers, legislators and business leaders to craft the very best accountability bill for North Dakota.”
Under Hoeven’s plan, recipients of state development programs would be required to sign a written business agreement, and report to the grantor the following:
- The number of new jobs to be created.
- The average compensation for the jobs to be created.
- The target dates to meet goals (2-5 years).
- A progress report on achievement of job and compensation goals.
A “clawback” provision in the proposal would require companies to pay back business subsidies if goals are not met.
Accountability measures would apply to cities and counties as well, under Hoeven’s plan. They must maintain records of business subsidies and make them available to the appropriate governing body and to the public in an annual report. This report must include:
- The names of the businesses receiving business subsidies during that year.
- The number of new jobs expected to be created by each business.
- The total dollar value of all business subsidies provided by the political subdivision during that year.
- The average compensation expected to be provided by the new jobs anticipated as a result of the business subsidies.
The primary sponsor of the bill will be Rep. George Keiser (R-Bismarck). Kaiser will continue to obtain input on the detailed provisions of the proposal and will organize additional sponsors for the legislation. The bill will be introduced late this fall for consideration by the 2005 session.
“Accountability is not only a responsibility, but an asset to our economic development efforts,” Hoeven said. “It creates greater public confidence in our programs and the network of developers throughout our state working to grow our economy.”
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