GENERAL ASSEMBLY OF NORTH CAROLINA
HOUSE BILL 1761
AN ACT to create the job maintenance and capital development fund.
The General Assembly of North Carolina enacts:
SECTION 1. Part 2 of Article 10 of Chapter 143B of the General Statutes is amended by adding a new section to read:
"§ 143B-437.11. Job Maintenance and Capital Development Fund.
(a) Findings. - The General Assembly finds that:
(1) It is the policy of the State of North Carolina to stimulate economic activity, to maintain high-paying jobs for the citizens of the State, and to encourage capital investment by encouraging and promoting the maintenance of existing business and industry within the State.
(2) The economic condition of the State is not static, and recent changes in the State's economic condition have created economic distress that requires the enactment of a new program as provided in this section that is designed to encourage the retention of significant numbers of high-paying jobs and the addition of further large-scale capital investment.
(3) The enactment of this section is necessary to stimulate the economy and maintain high-quality jobs in North Carolina, and this section will promote the general welfare and confer, as its primary purpose and effect, benefits on citizens throughout the State through the maintenance of high-quality jobs, an enlargement of the overall tax base, continued diversity in the State's industrial base, and an increase in revenue to the State's political subdivisions.
(4) The purpose of this section is to stimulate economic activity and to maintain high-paying jobs within the State while increasing the property tax base for local governments.
(b) Fund. - The Job Maintenance and Capital Development Fund is created as a restricted reserve in the Department of Commerce. Monies in the Fund do not revert but remain available to the Department for these purposes. The Department may use monies in the Fund only to encourage businesses to maintain high-paying jobs and make further capital investments in the State as provided in this section.
(c) Definitions. - The definitions in G.S. 143B-437.51 apply in this section. In addition, as used in this section, the term 'Department' means the Department of Commerce.
(d) Eligibility. - A business that satisfies all of the following conditions is eligible for consideration for a grant under this section:
(1) The Department certifies that the business intends to invest at least two hundred million dollars ($200,000,000) of private funds in the project within the five-year period commencing January 1, 2007, in improvements to real property and additions to tangible personal property used in the business.
(2) The project employs at least 2,000 full-time employees or equivalent full-time contract employees at the establishment that is the subject of the grant at the time the application is made, and the business agrees to maintain at least 2,000 full-time employees or equivalent full-time contract employees at the establishment for the full term of the grant agreement.
(3) The project is located in a development tier one area at the time the business applies for a grant.
(e) Health Insurance. - A business is eligible for consideration for a grant under this section only if the business makes available health insurance for all of the full-time employees of the project with respect to which the application is made. For the purposes of this subsection, a business makes available health insurance if it pays at least fifty percent (50%) of the premiums for health care coverage that equals or exceeds the minimum provisions of the basic health care plan of coverage under G.S. 58-50-125.
Each year that a grant agreement under this section is in effect, the business shall provide the Department a certification that the business continues to make available health insurance for all full-time employees of the project governed by the agreement. Failure of the business to satisfy the requirements of this subsection shall result in recapture of a portion of the grant proceeds as provided in the grant agreement.
(f) Safety and Health Programs. - A business is eligible for consideration for a grant under this section only if the business has no citations under the Occupational Safety and Health Act that have become a final order within the last three years for willful serious violations or for failing to abate serious violations with respect to the location for which the grant is made. For the purposes of this subsection, 'serious violation' has the same meaning as in G.S. 95-127.
(g) Environmental Impact. - A business is eligible for consideration for a grant under this section only if the business has no pending administrative, civil, or criminal enforcement action based on alleged significant violations of any program implemented by an agency of the Department of Environment and Natural Resources, and has had no final determination of responsibility for any significant administrative, civil, or criminal violation of any program implemented by an agency of the Department of Environment and Natural Resources within the last three years with respect to the location for which the grant is made. For the purposes of this subsection, a significant violation is a violation or alleged violation that does not satisfy any of the conditions of G.S. 143-215.6B(d).
(h) Selection. - The Department shall administer the selection of projects to receive grants under this section. The selection process shall include the following components:
(1) Criteria. - The Department shall develop criteria to be used to identify and evaluate eligible projects for possible grants under this section.
(2) Initial evaluation. - The Department shall evaluate projects to determine if a grant under this section is merited and to determine whether the project is eligible and appropriate for consideration for a grant under this section.
(3) Application. - The Department shall require a business to submit an application in order for a project to be considered for a grant under this section. The Department shall prescribe the form of the application, the application process, and the information to be provided, including all information necessary to evaluate the project in accordance with the applicable criteria.
(4) Committee. - The Department shall submit to the Economic Investment Committee the applications for projects the Department considers eligible and appropriate for a grant under this section. The Committee shall evaluate applications to choose projects to receive a grant under this section. In evaluating each application, the Committee shall consider all criteria adopted by the Department under this section and, to the extent applicable, the factors set out in Section 2.1(b) of S.L. 2002-172.
(5) Findings. - The Committee shall make all of the following findings before recommending a project receive a grant under this section:
a. The conditions for eligibility have been met.
b. A grant under this section for the project is necessary to carry out the public purposes provided in subsection (a) of this section.
c. The project is consistent with the economic development goals of the State and of the area where it is located.
d. The affected local governments have participated in retention efforts and offered incentives in a manner appropriate to the project.
e. A grant under this section is necessary for the sustainability and maintenance of the project in this State.
(6) Recommendations. - If the Committee recommends a project for a grant under this section, it shall recommend the amount of State funds to be committed, the preferred form and details of the State participation, and the performance criteria and safeguards to be required in order to protect the State's investment.
(i) Agreement. - Unless the Secretary of Commerce determines that the project is no longer eligible or appropriate for a grant under this section, the Department shall enter into an agreement to provide a grant or grants for a project recommended by the Committee. Each grant agreement is binding and constitutes a continuing contractual obligation of the State and the business. The grant agreement shall include the performance criteria, remedies, and other safeguards recommended by the Committee or required by the Department. Each grant agreement shall contain a provision prohibiting a business from receiving a payment or other benefit under the agreement at any time when the business has received a notice of an overdue tax debt and the overdue tax debt has not been satisfied or otherwise resolved. A grant agreement may obligate the State to make a series of grant payments over a period of up to 10 years. Nothing in this section constitutes or authorizes a guarantee or assumption by the State of any debt of any business or authorizes the taxing power or the full faith and credit of the State to be pledged.
The Department shall cooperate with the Attorney General's Office in preparing the documentation for the grant agreement. The Attorney General shall review the terms of all proposed agreements to be entered into under this section. To be effective against the State, an agreement entered into under this section shall be signed personally by the Attorney General.
(j) Safeguards. - To ensure that public funds are used only to carry out the public purposes provided in this section, the Department shall require that each business that receives a grant under this section shall agree to meet performance criteria to protect the State's investment and ensure that the projected benefits of the project are secured. The performance criteria to be required shall include maintenance of an appropriate level of employment at specified levels of compensation, maintenance of health insurance for all full-time employees, investment of a specified amount over the term of the agreement, and any other criteria the Department considers appropriate. The agreement shall require the business to repay or reimburse an appropriate portion of the grant based on the extent of any failure by the business to meet the performance criteria.
(k) Monitoring and Reports. - The Department is responsible for monitoring compliance with the performance criteria under each grant agreement and for administering the repayment in case of default. The Department shall pay for the cost of this monitoring from funds appropriated to it for that purpose or for other economic development purposes.
Within two months after the end of each calendar quarter, the Department shall report to the Joint Legislative Commission on Governmental Operations regarding the Job Maintenance and Capital Development Fund. This report shall include a listing of each grant awarded and each agreement entered into under this section during the preceding quarter, including the name of the business, the cost/benefit analysis conducted by the Committee during the application process, a description of the project, and the amount of the grant expected to be paid under the agreement during the current fiscal year. The report shall also include detailed information about any defaults and repayment during the preceding quarter. The Department shall publish this report on its Web site and shall make printed copies available upon request.
(l) Limitations. - The Department may enter into no more than five agreements under this section. The total aggregate cost of all agreements entered into under this section may not exceed forty million dollars ($40,000,000), and the annual aggregate cost of all agreements entered into under this section may not exceed four million dollars ($4,000,000). The total annual cost of an agreement entered into under this section may not exceed the lesser of four million dollars ($4,000,000) or fifty percent (50%) of the withholding of the full-time employees for the preceding year."
SECTION 2. There is appropriated from the General Fund to the Job Maintenance and Capital Development Fund, created under Section 1 of this act, the sum of four million dollars ($4,000,000) for the 2008-2009 fiscal year.
SECTION 3. G.S. 150B-1(d) is amended by adding a new subdivision to read:
"(d) Exemptions from Rule Making. - Article 2A of this Chapter does not apply to the following:
(14) The Department of Commerce and the Economic Investment Committee in developing criteria and administering the Job Maintenance and Capital Development Fund under G.S. 143B-437.11."
SECTION 4. This act becomes effective July 1, 2007.
In the General Assembly read three times and ratified this the 2nd day of August, 2007.
President Pro Tempore of the Senate
Speaker of the House of Representatives
Michael F. Easley
Approved __________.m. this ______________ day of ___________________, 2007