A lawsuit filed by Carter County against the Carter County Tomorrow (CCT) and the First Tennessee Private Industry Council (PIC) in August of 2015 has led some to wonder, what is the PIC?

Following the federally-mandated Job Training Partnership Act (JTPA) of 1982, Tennessee Governor Lamar Alexander designated 14 service delivery areas in which PICs would be established to serve the economically disadvantaged and unemployed while meeting industries’ needs. The First Tennessee PIC was a partnership of more than 30 nominated representatives from the businesses and community agencies by their Local Elected Officials (LEO) from Sullivan, Washington, Carter, Unicoi and Johnson Counties.

The Alliance of Business and Training (AB&T) was designated as the subrecipient of grants acquired by the PIC with the shared goal of job training and preparation.

In the year 1998, PICs were dissolved as the Job Training Partnership Act was replaced by the Workforce Investment Act. The PIC boards could transition to become Workforce Investment Boards.

At this time, then PIC Director J.B. Shepherd and his assistant Kim Eggers continued to file the PIC as an entity with the Secretary of State’s Office and continued to file form 990s with the Internal Revenue Service (IRS), as if nothing had changed.

Meanwhile, some members of the First Tennessee PIC were forming a new WIB.

The original 1988 agreement between the First Tennessee PIC, the consortium of LEOs, the grant recipient, the administrative entity and the First Tennessee Development District stated that the agreement which established the PIC would remain in effect until modification or termination is required by the JTPA.

The termination of the act incited necessary changes for the operation of the Workforce Development Complex (WDC), which was being leased to the PIC by the county.

“Operation of the PIC was under a law that ran out; in other words, the PIC no longer existed, so we took over the building on the individual basis — or one not obligated to the government — and I was chosen to operate that part of it and to see that everything was rented and leased and maintained,” former PIC Director J.B. Shepherd said in an interview with the Elizabethton Star in 2016.

The original lease agreement of 1995 between Carter County and the PIC states that if the PIC ever ceases to exist as an entity, all assets of PIC shall become the property of Carter County.

In 2007, CCT voted to sublease the WDC from the PIC, and according to its minutes, the PIC Board approved. Though the sublease was signed by Shepherd, PIC Chair Larry Mullins, and then Carter County Mayor Truman Clark, it appears no meeting minutes can be recovered from PIC meetings following the year 2000 recording approval of the decision by PIC board members.

In fact, the Elizabethton Star has not found any evidence that the PIC board met in an official capacity after the year 2000.

Additionally, per Tennessee Non-Profit Corporation Act, transfer, dissolution or merge of assets must be filed with the Attorney General, but no report of this is included with the sublease. The sublease also included a clause stating that the PIC transfers all of its right, title, interest and ownership in and to all bank accounts standing in its name at any financial institutions.

The complaint filed by the county regarding the current status of the PIC and the validity of the lease agreement states, “In 2007, CCT assumed the identity of PIC and began filing annual reports with the Secretary of State’s Office purporting to be PIC and substituting its Board of Directors as those of PIC. CCT also assumed control of all assets of PIC and began management of the complex. These actions were taken without any authority or any documented approval of the board of directors for PIC or the Tennessee Secretary of State.”

When requesting a 17-year extension of the lease agreement before the Carter County Commission on March 19, 2012, former CCT President Tom Anderson was questioned by commissioners about the nature of the PIC.

“We do business as the Workforce Development Complex,” Anderson told the Commission. “It’s now part of Carter County Tomorrow. The PIC, as it were, is no longer. We kept the name with the 501c3 status and do business as the Workforce Development Complex. We still carry out the same mission of PIC which is workforce development. Nothing’s changed as far as the mission.”

In 1999, when Shepherd was filing for 501c3 status with the IRS, he provided a detailed report of the mission of the PIC.

This report stated the overall purpose of the PIC was to coordinate and monitor job training services, to bring together unemployed and low-income individuals with job training opportunities. The PIC worked with AB&T to provide these services. The report also states the PIC had plans to provide a workforce development center, in order to facilitate training provided by AB&T. The PIC would provide oversight and monitoring of grants and would coordinate activities and services with Employment Security, Vocational Rehab, Northeast State Technical College, The Department of Human Services, Adult Education and other community based organizations.

The major change in that statement and the current status of the PIC is that its mandate was repealed, which meant it could no longer work in the same capacity with AB&T. This also affected its ability to receive grant funding.

In the year 2000, when the WIB was established and the PIC board appears to have discontinued meeting, the filing status with the IRS also changed. This is the year Kim Eggers began filing form 990s for the PIC.
On the 1999-2000 form 990, the purpose for exemption is listed as “To provide administrative oversight to the Job Training Partnership Act grants.” In addition, the description of program services states it exists “To provide training services, education and activities for labor market area, to ensure program integrity, to manage staff and premises to enable staff to advise clients about education and provide employment skills.”
After the JTPA was repealed, the exemption purpose changed as well, with no apparent approval of the PIC board, whose members were either no longer meeting or were meeting as the WIB.

The exemption purpose in the tax year 2000-2001 stated it was “To provide a central location for workforce development programs.” It further detailed that it was “To manage staff and premises in order to provide a central location for other non-profit entities to be able to provide education, training and activities for the local labor market.”

The effects of the law change are evidenced by this change in purpose for exemption, and signifies a change from being an organization that provides agency oversight, receives grants, and provides training services and facilities to an organization that provides facilities for services.

This study into the history of the matters of the PIC and the CCT are to be continued.