GENERAL ASSEMBLY OF NORTH CAROLINA
HOUSE BILL 1761*
Short Title: JDIG Amendments.
Representatives Glazier, Dickson, Brubaker, Crawford (Primary Sponsors); Faison, Insko, and Wray.
Commerce, Small Business and Entrepreneurship, if favorable, Appropriations.
April 19, 2007
A BILL TO BE ENTITLED
AN ACT to allow the use of JDIG grants to maintain existing jobs.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 143B-437.50 reads as rewritten:
"Part 2G. Job Development Investment Grant Program.
"§ 143B-437.50. Legislative findings and purpose.
The General Assembly finds that:
(1) It is the policy of the State of North Carolina to stimulate economic activity and to create new jobs and to maintain its existing multinational heavy industry manufacturing jobs for the citizens of the State by encouraging and promoting the expansion and retention of existing business and industry within the State and by recruiting and attracting new business and industry to the State.
(2) Both short-term and
long-term economic trends at the State, national, and international levels have
made the successful implementation of the State's economic development policy
and programs both more critical and more challenging; and the decline in the
State's traditional industries, and the resulting adverse impact upon the State
and its citizens, have been exacerbated in recent years by adverse national and
State economic trends that contribute to the reduction in the State's industrial
base and that inhibit the State's ability to
multinational heavy industry manufacturing jobs or attract new and
(3) The economic condition
of the State is not static and recent changes in the State's economic condition
have created economic distress that requires a reevaluation of certain existing
State programs and the enactment of a new program as provided in this Part that
are designed to stimulate new economic activity and to create new jobs within
State.State and to retain the State's multinational heavy
industry manufacturing jobs.
(4) The enactment of this
Part is necessary to stimulate the economy, facilitate economic recovery, and
create new jobs in North Carolina; and this Part will promote the general
welfare and confer, as its primary purpose and effect, benefits on citizens
throughout the State through the creation of new
jobs,jobs and the
retention of existing multinational heavy industry manufacturing jobs, an
enlargement of the overall tax base, an expansion and diversification of the
State's industrial base, and an increase in revenue to the State and its
(5) The purpose of this Part is to stimulate economic activity and to create new jobs within the State.
(6) It is not the intent of the General Assembly that grants provided through this Part be used as venture capital funds, business incubator funds, or business start-up funds or to otherwise fund the initial capitalization needs of new businesses.
(7) Nothing in this Part shall be construed to constitute a guarantee or assumption by the State of any debt of any business or to authorize the taxing power or the full faith and credit of the State to be pledged."
SECTION 2. G.S. 143B-437.51 reads as rewritten:
"§ 143B-437.51. Definitions.
The following definitions apply in this Part:
(1) Agreement. - A community economic development agreement under G.S. 143B-437.57.
(2) Base period. - The period of time set by the Committee during which new employees are to be hired for the positions on which the grant is based.
(3) Business. - A corporation, sole proprietorship, cooperative association, partnership, S corporation, limited liability company, nonprofit corporation, or other form of business organization, located either within or outside this State.
(4) Committee. - The Economic Investment Committee established pursuant to G.S. 143B-437.54.
(4a) Development tier. - The classification assigned to an area pursuant to G.S. 143B-437.08.
(5) Eligible position. - A position created by a business and filled by a new full-time employee or an existing employee at a multinational heavy industry manufacturing facility in this State during the base period.
(6) Full-time employee. - A person who is employed for consideration for at least 35 hours a week, whose wages are subject to withholding under Article 4A of Chapter 105 of the General Statutes, and who is determined by the Committee to be employed in a permanent position according to criteria it develops in consultation with the Attorney General. The term does not include any person who works as an independent contractor or on a consulting basis for the business.
(6a) Multinational heavy industry manufacturing facility. - A North Carolina multinational heavy industry manufacturing business committed to expend during the period from January 1, 2007, to December 1, 2011, at least two hundred million dollars ($200,000,000) to retool its existing facility which has other similar facilities located on the continents of Asia, Europe, Australia, and South America.
(7) New employee. - A full-time
employee who represents a net increase in the number of the business's
statewide.statewide or an existing employee at a
multinational heavy industry manufacturing facility.
(8) Overdue tax debt. - Defined in G.S. 105-243.1.
(9) Related member. - Defined in G.S. 105-130.7A.
(10) Withholdings. - The amount withheld by a business from the wages of employees in eligible positions under Article 4A of Chapter 105 of the General Statutes."
SECTION 3. G.S. 143B-437.52 reads as rewritten:
"§ 143B-437.52. Job Development Investment Grant Program.
(a) Program. - There is established the Job Development Investment Grant Program to be administered by the Economic Investment Committee. In order to foster job creation and retention and investment in the economy of this State, the Committee may enter into negotiated agreements with businesses to provide grants in accordance with the provisions of this Part. The Committee, in consultation with the Attorney General, shall develop criteria to be used in determining whether the conditions of this section are satisfied and whether the project described in the application is otherwise consistent with the purposes of this Part. Before entering into an agreement, the Committee must find that all the following conditions are met:
(1) The project proposed
by the business will create, during the term of the agreement, a net increase
in employment in this State by the
business.business or permit the
retention of the existing workforce of a multinational heavy industry facility.
(2) The project will benefit the people of this State by increasing opportunities for employment and by strengthening this State's economy by, for example, providing worker training opportunities, constructing and enhancing critical infrastructure, increasing development in strategically important industries, or increasing the State and local tax base.
(3) The project is consistent with economic development goals for the State and for the area where it will be located.
(4) A grant under this
Part is necessary for the completion of the project in this
or to retain the existing workforce of a multinational heavy industry facility
in this State.
(5) The total benefits of the project to the State outweigh its costs and render the grant appropriate for the project.
(b) Cap. - The maximum number of agreements the Committee may enter into each calendar year is 25.
(c) Ceiling. - Except as provided in this section, the maximum amount of total annual liability for grants for agreements entered into in any single calendar year, including amounts transferred to the Utility Account pursuant to G.S. 143B-437.61, may not exceed fifteen million dollars ($15,000,000). The maximum amount of total annual liability for grants for agreements entered into in 2006, including amounts transferred to the Utility Account pursuant to G.S. 143B-437.61, may not exceed thirty million dollars ($30,000,000). No agreement may be entered into that, when considered together with other existing agreements entered into during that calendar year, could cause the State's potential total annual liability for grants entered into in that calendar year to exceed this amount.
(d) Measuring Employment. - For the purposes of subdivision (a)(1) of this section and G.S. 143B-437.51(5), 143B-437.51(7), and 143B-437.57(a)(11), the Committee may designate that the increase or maintenance of employment is measured at the level of a division or another operating unit of a business, rather than at the business level, if both of the following conditions are met:
(1) The Committee makes an explicit finding that the designation is necessary to secure the project in this State.
(2) The agreement contains terms to ensure that the business does not create eligible positions by transferring or shifting to the project existing positions from another project of the business or a related member of the business."
SECTION 4. G.S. 143B-437.55(c) reads as rewritten:
"(c) Annual Reports. - The Committee shall publish a report on the Job Development Investment Grant Program on or before April 30 of each year. The report shall include the following:
(1) A listing of each community economic development agreement negotiated and entered into during the preceding calendar year, including the name of the business, the cost/benefit analysis conducted by the Committee during the application process, a description of the project, the term of the agreement, the percentage used to determine the amount of the grant, and the amount of the grant made under the agreement during that year.
(2) An update on the status of projects under agreements entered into before the preceding calendar year.
(3) The number and development tier area of eligible positions created by projects with respect to which grants were awarded.
(3a) A listing of the employment level for all businesses receiving a grant and any changes in those levels from the level of the next preceding year.
(4) The wage levels of all eligible positions created by projects with respect to which grants are awarded, aggregated and listed in increments of five thousand dollars ($5,000).
(5) The amount of new income tax revenue received from withholdings related to the projects for which grants were awarded.
(6) The criteria developed by the Committee, in consultation with the Attorney General, to implement this Part and any changes in those criteria from the previous calendar year.
(7) The effectiveness of the program in recruiting new and expanding businesses.
(8) The environmental impact of businesses that have received grants under the program.
(9) The geographic distribution of grants, by number and amount, awarded under the program.
(10) An explanation of whether the
projects with respect to which agreements are entered into involve new
businesses in the
State orState, expanding existing businesses in
the State.State, or the retention of existing multinational heavy
industry business in the State.
(11) A listing of all businesses making an application under this Part and an explanation of whether each business ultimately located the project in this State regardless of whether the business was awarded a grant for the project under this Part.
(12) Repealed by Session Laws 2006-168, s. 1.4, effective July 27, 2006.
(13) The total amount transferred to the Utility Account of the Industrial Development Fund under this Part during the preceding year."
SECTION 5. Section 2.1(b) of S.L. 2002-172 reads as rewritten:
"SECTION 2.1.(b) In developing criteria
143B-437.46 143B-437.52 for the awarding of
grants under Part 2F 2G of Article 10 of Chapter 143B of the
General Statutes and under G.S. 143B-437.50143B-437.56 for
determining the percentage upon which the amount of a grant is based, the
Economic Investment Committee, in consultation with the Attorney General, may
consider criteria that address the following:
(1) Factors related to the economic impact of the project, such as the following:
a. Impact on gross regional product and gross State product.
b. Costs and benefits of the project to the State, including the expected return on investment made in the project by the State.
c. Number of direct jobs that will be created or retained by the project, the wages of those jobs, and the total payroll for the project.
d. Number of induced short-term, project-related jobs expected to be generated by the project as well as the number of long-term permanent jobs expected to be generated or sustained indirectly in the economy as a result of the project.
e. Dollar value of the investment, including the size of the investment in real versus personal property and expected depreciation rates.
f. Economic circumstances of the county and region, including the extent to which the project will serve to mitigate unemployment.
g. The expected time frame during which the project is expected to pay back in State tax revenues the amount of any grants to be paid out.
h. The economic demands the project is expected to place upon the community or communities in which it will locate.
i. The number of eligible positions that would be filled by residents of development zones.
(2) Factors related to the strategic importance of the project to the State, region, or locality, such as the following:
a. The extent
to which the project
builds builds, sustains, or enhances an
b. The extent to which the project falls within a classification of business and industry that the Department of Commerce regards as a target for growth and expansion in the State.
c. The ability of the project to attract follow-on investment in the State by suppliers and vendors.
d. The extent to which the project serves to maintain and grow jobs in the State in a business undergoing an internal restructuring or rationalization process.
e. The extent to which the project can be expected to contribute significantly to and support the local community.
(3) Factors related to the quality of jobs, such as the following:
a. The wage
level and status of the jobs to be
created.created or retained.
b. The quality and value of benefits offered by the company.
c. The potential for employee advancement.
d. The extent of training programs offered by the company.
e. The sustainability of the jobs in the future.
f. The workplace safety record of the company.
(4) Factors related to the quality of the industry and the project, such as the following:
a. The nature of the project and the project's relationship to the larger business of the company.
b. The nature of the industrial classification of the project and the nature of the business of the company undertaking it.
c. The long-term prospects for growth at the project site or sites.
d. The long-term prospects for growth of the company and the industry within the United States.
e. The financial stability of the company associated with the project.
(5) Factors related to the environmental impact of the project, such as the following:
a. The nature of the business to be conducted.
b. The ability of the project to satisfy State, federal, and local environmental law and regulations.
(6) The degree to which use of the program has been geographically dispersed among the various regions of the State and between rural and urban areas.
(7) Other factors that the Economic Investment Committee considers relevant that are not inconsistent with this section and that the Committee determines will further the purposes of Part 2F of Article 10 of Chapter 143B of the General Statutes."
SECTION 6. This act is effective when it becomes law.