H1224 [Edition 2]

GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2013

H 2

HOUSE BILL 1224

Senate Finance Committee Substitute Adopted 7/16/14

Short Title: Local Sales Tax for Education/Econ. Dev Chngs.		(Public)
Sponsors:
Referred to:

May 28, 2014

A BILL TO BE ENTITLED

AN ACT to limit the total local government sales and use tax rate to two and one‑half percent; to allow counties to use a portion of the proceeds of the local government sales and use tax for public transportation or for public education; and to make various changes to tax and economic development laws.

The General Assembly of North Carolina enacts:

PART I. LOCAL OPTION SALES TAX FOR EDUCATION

SECTION 1.1. Subchapter VIII of Chapter 105 of the General Statutes is amended by adding a new Article to read:

"Article 43A.

"County Sales and Use Tax for Public Education.

"§ 105‑512.1. Short title; purpose.

This Article is the Local Government Sales and Use Tax for Public Education. Article 43 of this Chapter and this Article give the counties of this State an opportunity to obtain an additional source of revenue with which to meet their needs. A county may choose to use this source of revenue to finance local public transportation systems, as provided in Article 43 of this Chapter, or for public education needs, as provided in this Article. A tax levied under this Article may not be in effect in a county at the same time as a tax levied under Article 43 of this Chapter.

"§ 105‑512.2. Levy.

(a) Referendum. – A tax levied under this Article must be approved in a referendum. The board of commissioners of a county may direct the county board of elections to conduct an advisory referendum on the question of whether to levy a local sales and use tax in the county at a rate of up to one‑half percent (1/2%). The applicable rate must meet all of the conditions listed in this subsection. The election shall be held in accordance with the procedures of G.S. 163‑287. The conditions are:

(1) It must be in an increment of one‑quarter percent (1/4%).

(2) It must be at a rate that, if levied, would result in a total local sales and use tax rate in the county of two and one‑half percent (2 1/2%).

(b) Ballot Question. – The form of the question to be presented on a ballot for a special election concerning the levy of the tax authorized by this Article shall be:

"[ ] FOR [ ] AGAINST

Local sales and use tax at the [applicable rate stated in both words and as a percentage] in addition to the current local sales and use taxes, to be used only for public education."

(c) Authority. – If the majority of those voting in a referendum held pursuant to this Article vote for the levy of the tax, the board of commissioners of the county may, by resolution and after 10 days' public notice, levy a local sales and use tax at the rate specified in the ballot.

"§ 105‑512.3. Administration.

Except as provided in this Article, the adoption, levy, collection, administration, and repeal of these additional taxes must be in accordance with Article 39 of this Chapter. In applying the provisions of Article 39 of this Chapter to this Article, references to "this Article" mean "Article 43A of Chapter 105 of the General Statutes." G.S. 105‑468.1 is an administrative provision that applies to this Article. A tax levied under this Article does not apply to the sales price of food that is exempt from tax pursuant to G.S. 105‑164.13B or to the sales price of a bundled transaction taxable pursuant to G.S. 105‑467(a)(5a). The Secretary shall not divide the amount allocated to a county between the county and the municipalities within the county.

"§ 105‑512.4. Use.

Counties may use the proceeds of a tax levied under this Article only for the following purposes:

(1) Public school capital outlay purposes, as defined in G.S. 115C‑426(f) or to retire any indebtedness incurred by the county for these purposes.

(2) Salaries of classroom teachers, salaries of classroom teacher assistants, and supplements of classroom teacher salaries. For the purposes of this section, a classroom teacher is an employee of a local board of education employed as a teacher who spends at least seventy percent (70%) of his or her work time in classroom instruction and a classroom teacher assistant is an employee of a local board of education employed as a teacher assistant who spends at least seventy percent (70%) of his or her work time assisting in a classroom.

(3) Financial support of community colleges, including funds to supplement State financial support of community colleges."

SECTION 1.2.(a) G.S. 115C‑429(b) reads as rewritten:

"(b) The board of county commissioners shall complete its action on the school budget on or before July 1, or such later date as may be agreeable to the board of education. The commissioners shall determine the amount of county revenues to be appropriated in the county budget ordinance to the local school administrative unit for the budget year. The board of county commissioners may, in its discretion, allocate part or all of its appropriation by purpose, function, or project as defined in the uniform budget format. For allocations made by the board of county commissioners for the purpose of or for a function related to instructional services, the board of county commissioners may direct the amount of funds to be used for salaries of classroom teachers, salaries of classroom teacher assistants, and supplements of classroom teacher salaries. For the purposes of this section, a classroom teacher is an employee of a local board of education employed as a teacher who spends at least seventy percent (70%) of his or her work time in classroom instruction and a classroom teacher assistant is an employee of a local board of education employed as a teacher assistant who spends at least seventy percent (70%) of his or her work time assisting in a classroom."

SECTION 1.2.(b) G.S. 115C‑433(b) reads as rewritten:

"(b) If the board of county commissioners allocates part or all of its appropriations pursuant to G.S. 115C‑429(b), the board of education must obtain the approval of the board of county commissioners for an amendment to the budget that does any of the following:

(1)~~(i)~~ ~~increases~~ Increases or decreases expenditures from the capital outlay fund for projects listed in G.S. 115C‑426(f)(1) or ~~(2), or (ii)~~ (2).

(2) ~~increases~~ Increases or decreases the amount of county appropriation allocated to a purpose or function by twenty‑five percent (25%) or more from the amount contained in the budget ordinance adopted by the board of county commissioners: ~~Provided,~~provided, that at its discretion, the board may in its budget ordinance specify a lesser percentage, so long as such percentage is not less than ~~ten percent (10%).~~ten percent (10%).

(3) Decreases the amount of funds allocated for salaries of classroom teachers, salaries of classroom teacher assistants, and supplements of classroom teacher salaries. For the purposes of this section, a classroom teacher is an employee of a local board of education employed as a teacher who spends at least seventy percent (70%) of his or her work time in classroom instruction and a classroom teacher assistant is an employee of a local board of education employed as a teacher assistant who spends at least seventy percent (70%) of his or her work time assisting in a classroom."

SECTION 1.3.(a) G.S. 115D‑55(a) reads as rewritten:

"(a) Approval of Budget by Local Tax‑Levying Authority. – By a date fixed by the local tax‑levying authority, the budget shall be submitted to the local tax‑levying authority for approval of that portion within its authority as stated in G.S. 115D‑54(b). On or before July 1, or such later date as may be agreeable to the board of trustees, but in no instance later than September 1, the local tax‑levying authority shall determine the amount of county revenue to be appropriated to an institution for the budget year. The local tax‑levying authority may allocate part or all of an appropriation by purpose, function, or project as defined in the budget manual as adopted by the State Board of Community Colleges. The local tax‑levying authority may direct the use of funds appropriated to the institution derived from a tax levied under Article 43A of Chapter 105 of the General Statutes.

The local tax‑levying authority shall have full authority to call for all books, records, audit reports, and other information bearing on the financial operation of the institution except records dealing with specific persons for which the persons' rights of privacy are protected by either federal or State law.

Nothing in this Article shall be construed to place a duty on the local tax‑levying authority to fund a deficit incurred by an institution through failure of the institution to comply with the provisions of this Article or rules and regulations issued pursuant hereto."

SECTION 1.3.(b) G.S. 115D‑58(b) reads as rewritten:

"(b) If the local tax‑levying authority allocates part or all of an appropriation pursuant to G.S. 115D‑55, the board of trustees must obtain approval of the local tax‑levying authority for an amendment to the budget which does any of the following:

(1) ~~increases~~ Increases or decreases the amount of that appropriation allocated to a purpose, function, or project by twenty‑five percent (25%) or more from the amount contained in the budget ordinance adopted by the local tax‑levying authority or such lesser percentage as specified by the local tax‑levying authority in the original budget ordinance, so long as such percentage is not less than ten percent (10%).

(2) Decreases the amount of the appropriation directed by the tax‑levying authority for a specific use from funds appropriated to the institution derived from a tax levied under Article 43A of Chapter 105 of the General Statutes."

SECTION 1.4.(a) G.S. 105‑506 reads as rewritten:

"§ 105‑506. Short title; purpose.

This Article is the Local Government Public Transportation Sales Tax Act and may be cited by that name. This Article and Article 43A of this Chapter ~~gives~~ give the counties ~~and transportation authorities~~ of this State an opportunity to obtain an additional source of revenue with which to meet their ~~needs for~~ needs. Counties and transportation authorities may choose to use this source of revenue to ~~financing~~ finance local public transportation ~~systems.~~ systems under this Article, or to finance public education needs, as provided in Article 43A of this Chapter. A tax levied under this Article may not be in effect in a county at the same time as a tax levied under Article 43A of this Chapter. ~~It provides them with authority to levy sales and use taxes. All such taxes~~ A tax levied under this Chapter must be approved in a referendum."

SECTION 1.4.(b) Part 1 of Article 43 of Chapter 105 of the General Statutes is amended by adding a new section to read:

"§ 105‑506.3. Tax rate.

(a) Rate. – The applicable rate of local sales and use tax that may be levied under this Article must meet all of the following conditions:

(1) It must be in an increment of one‑quarter percent (1/4%).

(2) It must be at a rate that, if levied, would result in a total local sales and use tax rate in the county or special district of two and one‑half percent (2 1/2%).

(b) Cap. – Except as provided in this subsection, a county's local sales and use tax rate may not exceed two and one‑half percent (2.5%). A county's local sales and use tax rate may exceed two and one‑half percent (2.5%) if the county conducted one or more advisory referendums on or before December 31, 2012, in which a majority of the voters approved the levy of a local sales and use tax resulting in a total local sales and use tax rate in the county of two and three‑quarters percent (2.75%). In no event may a county's local sales and use tax rate exceed two and three‑quarters percent (2.75%). If a county's local sales and use tax rate is two and three‑quarters percent (2.75%) on April 1, 2013, and the county repeals the levy of a tax authorized under Subchapter VIII of this Chapter so that the county's local sales and use tax rate falls below two and three‑quarters percent (2.75%), the county may not enact a local sales and use tax under this Subchapter that results in a county local sales and use tax rate that exceeds two and one‑half percent (2.5%)."

SECTION 1.4.(c) G.S. 105‑507.1 reads as rewritten:

"§ 105‑507.1. Local election on adoption of sales and use tax.

(a) Resolution. – The board of commissioners of a county may direct the county board of elections to conduct an advisory referendum within the county on the question of whether a local sales and use tax at the rate of up to one‑half percent (1/2%) may be levied in accordance with this Part. The applicable rate must be in accordance with G.S. 105‑506.3. The election shall be held in accordance with the procedures of G.S. 163‑287. The board of commissioners shall hold a public hearing on the question at least 30 days before the date the election is to be held.

(b) Ballot Question. – The form of the question to be presented on a ballot for a special election concerning the levy of a tax authorized by this Article shall be:

"[ ] FOR [ ] AGAINST

~~One‑half percent (1/2%)~~ [The applicable rate stated in both words and as a percentage] local sales and use taxes, in addition to the current local sales and use taxes, to be used only for public transportation systems.""

SECTION 1.4.(d) G.S. 105‑507.2 reads as rewritten:

"§ 105‑507.2. Levy and collection of sales and use tax.

If the majority of those voting in a referendum held pursuant to G.S. 105‑507.1 vote for the levy of the tax, the board of commissioners of the county may, by resolution, levy ~~one‑half percent (½%) local sales and use taxes~~ a local sales and use tax at the rate specified in the ballot in addition to any other State and local sales and use taxes levied pursuant to law. Except as provided in this Part, the adoption, levy, collection, administration, and repeal of these additional taxes shall be in accordance with Article 39 of this Chapter. In applying the provisions of Article 39 of this Chapter to this Part, references to "this Article" mean "Part 1 of Article 43 of Chapter 105 of the General Statutes"."

SECTION 1.4.(e) G.S. 105‑509 reads as rewritten:

"§ 105‑509. Local election on adoption of sales and use tax – regional public transportation authority.

…

(b) Resolution. – The board of trustees of the regional public transportation authority may, if all of the conditions listed in this subsection have been met, direct the respective county board or boards of elections to conduct an advisory referendum within the special district on the question of whether a local sales and use tax at the rate of up to one‑half percent (1/2%) may be levied within the district in accordance with this Part. The applicable rate must be in accordance with G.S. 105‑506.3. The tax may not be levied without voter approval. The election shall be held on a date jointly agreed upon by the authority, the county board or boards of commissioners, and the county board or boards of elections and shall be held on a date permitted by and in accordance with the procedures of G.S. 163‑287. The conditions are as follows:

(1) The board of trustees has obtained approval to conduct a referendum by a vote of the following:

a. A majority vote of each of the county boards of commissioners within the special district, if it is a multicounty special district.

b. A majority of the county board of commissioners within the special district, if it is a single‑county special district.

(2) A public hearing is held on the question by the board or boards of commissioners at least 30 days before the date the election is to be held.

(c) Ballot Question. – The form of the question to be presented on a ballot for a special election concerning the levy of a tax authorized by this Article shall be:

"[ ] FOR [ ] AGAINST

…."

SECTION 1.4.(f) G.S. 105‑509.1 reads as rewritten:

"§ 105‑509.1. Levy and collection of sales and use tax – regional public transportation authority.

If the majority of those voting in a referendum held pursuant to G.S. 105‑509 vote for the levy of the tax, the transportation authority may, by resolution, levy ~~one‑half percent (½%) local sales and use taxes~~ a local sales and use tax at the rate specified in the ballot within the special district, in addition to any other State and local sales and use taxes levied pursuant to law. In determining the results of the election in a multicounty district, all the counties of the district shall be considered to be one unit but also must receive a majority vote in each county, except that if the referendum is passed in one or more but not all of the counties, the counties in which the referendum was not approved are removed from the special district upon certification of the election result and the county or counties that approved the referendum shall remain in the special district. Except as provided in this Part, the adoption, levy, collection, administration, and repeal of these additional taxes shall be in accordance with Article 39 of this Chapter. In applying the provisions of Article 39 of this Chapter to this Article, references to "this Article" mean "Part 4 of Article 43 of Chapter 105 of the General Statutes." Any repeal of the tax shall be done by the same procedure as its enactment under this section, and in a multicounty district a petition for repeal under G.S. 105‑473 shall be judged by the total votes in all the counties in the district."

SECTION 1.4.(g) G.S. 105‑510 reads as rewritten:

"§ 105‑510. Local election on adoption of sales and use tax – regional transportation authority.

…

(b) Resolution. – The board of trustees of the regional transportation authority may, if all of the conditions listed in this subsection have been met, direct the respective county board or boards of elections to conduct an advisory referendum within the special district on the question of whether a local sales and use tax at the rate of up to one‑half percent (1/2%) may be levied within the district in accordance with this Part. The applicable rate must be in accordance with G.S. 105‑506.3. The tax may not be levied without voter approval. The election shall be held on a date jointly agreed upon by the authority, the county board or boards of commissioners, and the county board or boards of elections and shall be held on a date permitted by and in accordance with the procedures of G.S. 163‑287. The conditions are as follows:

(1) The board of trustees has obtained approval to conduct a referendum by a vote of the following:

a. A majority vote of both of the county boards of commissioners within the special district, if it is a multicounty special district.

b. A majority of the county board of commissioners within the special district, if it is a single‑county special district.

(2) A public hearing is held on the question by the board or boards of commissioners at least 30 days before the date the election is to be held.

(c) Ballot Question. – The form of the question to be presented on a ballot for a special election concerning the levy of a tax authorized by this Article shall be:

"[ ] FOR [ ] AGAINST

…."

SECTION 1.4.(h) G.S. 105‑510.1 reads as rewritten:

"§ 105‑510.1. Levy and collection of sales and use tax – regional transportation authority.

If the majority of those voting in a referendum held pursuant to G.S. 105‑510 vote for the levy of the tax, the transportation authority may, by resolution, levy ~~one‑half percent (1/2%) local sales and use taxes~~ a local sales and use tax at the rate specified in the ballot within the special district, in addition to any other State and local sales and use taxes levied pursuant to law. In determining the results of the election in a multicounty district, all the counties of the district shall be considered to be one unit but also must receive a majority vote in each county, except that if the referendum is passed in one but not both of the counties, the county in which the referendum was not approved is removed from the special district upon certification of the election result and the county that approved the referendum shall remain in the special district. Except as provided in this Part, the adoption, levy, collection, administration, and repeal of these additional taxes shall be in accordance with Article 39 of this Chapter. In applying the provisions of Article 39 of this Chapter to this Article, references to "this Article" mean "Part 5 of Article 43 of Chapter 105 of the General Statutes." Any repeal of the tax shall be done by the same procedure as its enactment under this section, and in a multicounty district a petition for repeal under G.S. 105‑473 shall be judged by the total votes in all the counties in the district."

SECTION 1.4.(i) G.S. 105‑511.2 reads as rewritten:

"§ 105‑511.2. Local election on adoption of sales and use tax.

(a) Resolution. – The board of commissioners of a county may direct the county board of elections to conduct an advisory referendum within the county on the question of whether a local sales and use tax at ~~the rate of one‑quarter percent (1/4%)~~ a rate of up to one‑half percent (1/2%) may be levied in accordance with this Part. The applicable rate must be in accordance with G.S. 105‑506.3. The election shall be held on a date jointly agreed upon by the boards and shall be held on a date permitted by and in accordance with the procedures of G.S. 163‑287. The board of commissioners shall hold a public hearing on the question at least 30 days before the date the election is to be held.

(b) Ballot Question. – The form of the question to be presented on a ballot for a special election concerning the levy of a tax authorized by this Article shall be:

"[ ] FOR [ ] AGAINST

~~One‑quarter percent (1/4%)~~ [The applicable rate stated in both words and as a percentage] local sales and use taxes, in addition to the current local sales and use taxes, to be used only for public transportation systems."

SECTION 1.4.(j) G.S. 105‑511.3 reads as rewritten:

"§ 105‑511.3. Levy and collection of sales and use tax.

(a) Authority to Levy. – If the majority of those voting in a referendum held pursuant to this Part vote for the levy of the tax, the board of commissioners of the county may, by resolution, levy ~~one‑quarter percent (1/4%) local sales and use taxes~~ a local sales and use tax at the rate specified in the ballot in addition to any other State and local sales and use taxes levied pursuant to law.

(b) Administration. – Except as provided in this Part, the adoption, levy, collection, administration, and repeal of these additional taxes shall be in accordance with Article 39 of this Chapter. In applying the provisions of Article 39 of this Chapter to this Part, references to "this Article" mean "Part 6 of Article 43 of Chapter 105 of the General Statutes.""

SECTION 1.4.(k) This section is effective when it becomes law.

SECTION 1.5.(a) G.S. 105‑537 reads as rewritten:

"(a) Authority. – A tax levied under this Article must be approved in a referendum. If the majority of those voting in a referendum held pursuant to this Article vote for the levy of the tax, the board of county commissioners may, by resolution and after 10 days' public notice, levy a local sales and use tax at a rate of one‑quarter percent (0.25%).

…

(e) Expiration. – A board of county commissioners may not direct the county board of elections to conduct an advisory referendum on the question of whether to levy a local sales and use tax in the county as provided in this Article on or after August 1, 2014."

SECTION 1.5.(b) This section is effective when it becomes law. Notwithstanding G.S. 105‑537(e), as enacted by this act, a county that meets both of the conditions listed in this subsection, as of the date this act becomes law, may direct the county board of elections to conduct an advisory referendum under this Article:

(1) The county has directed the county board of elections to put the question of whether to levy a local sales and use tax in the county under this Article on the ballot in a State, county, or municipal general election to be held in 2014.

(2) The total rate of local sales and use tax in the county is less than two and one‑half percent (2 1/2%).

SECTION 1.6. Except as otherwise provided, this Part is effective when it becomes law.

PART II. JMAC MODIFICATIONS

SECTION 2.(a) G.S. 143B‑437.012 reads as rewritten:

"§ 143B‑437.012. Job Maintenance and Capital Development Fund.

…

(d) Eligibility. – A business is eligible for consideration for a grant under this section if it satisfies the conditions of either subdivision (1) or (2) of this subsection and satisfies ~~the conditions of both subdivisions (3) and~~subdivision (4) of this subsection:

(1) The business is a major employer. A business is a major employer if the business meets the following requirements:

a. The Department certifies that the business has invested or intends to invest at least two hundred million dollars ($200,000,000) of private funds in improvements to real property and additions to tangible personal property in the project within a six‑year period beginning with the time the investment commences.

b. The business employs at least 2,000 full‑time employees or equivalent full‑time contract employees at the project 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 project for the full term of the grant agreement.

c. The project is located in a development tier one area at the time the business applies for a grant.

(2) The business is a large manufacturing employer. A business is a large manufacturing employer if the business meets the following requirements:

a. The business is in manufacturing, as defined in G.S. 105‑129.81, and is converting its manufacturing process to change the product it ~~manufactures.~~manufactures or is investing in its manufacturing process by enhancing pollution controls or transitioning the manufacturing process from using coal to using natural gas for the purpose of becoming more energy efficient or reducing emissions.

b. The Department certifies that the business has invested or intends to invest at least ~~sixty‑five~~fifty million dollars ~~($65,000,000)~~($50,000,000) of private funds in improvements to real property and additions to tangible personal property in the project within a ~~three‑year~~five‑year period beginning with the time the investment commences.

c. The business meets one of the following employment requirements:

1. If in a development tier one area, the business employs at least 320 full‑time employees at the project that is the subject of the grant at the time the application is made, and the business agrees to maintain at least 320 full‑time employees at the project for the full term of the grant.

2. If in a development tier two area with a population of less than 60,000 as of July 1, 2013, the business employs at least 800 full‑time employees or equivalent full‑time contract employees at the project that is the subject of the grant at the time the application is made, and the business agrees to maintain at least 800 full‑time employees or equivalent full‑time contract employees at the project for the full term of the grant.

~~(3)~~ ~~The project is located in a development tier one area at the time the business applies for a grant.~~

(4) All newly hired employees of the business must be citizens of the United ~~States,~~States or have proper identification and documentation of their authorization to reside and work in the United States.

…

(n) 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 ~~sixty‑nine million dollars ($69,000,000).~~seventy‑nine million dollars ($79,000,000). The total annual cost of an agreement entered into under this section may not exceed six million dollars ($6,000,000)."

SECTION 2.(b) This section becomes effective July 1, 2014.

PART III. JOB CATALYST FUND

SECTION 3.(a) G.S. 143B‑437.50 reads as rewritten:

"Part 2G. Job ~~Development Investment Grant Program.~~Development.

"§ 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 for the citizens of the State by encouraging and promoting the expansion of existing business and industry within the State and by recruiting and attracting new business and industry to the State.

…."

SECTION 3.(b) G.S. 143B‑437.51 reads as rewritten:

"§ 143B‑437.51. Definitions.

The following definitions apply in this Part:

…

(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) Full‑time worker. – 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 Department to be employed in a permanent position. The term does not include any person who works as an independent contractor or on a consulting basis for the business.

(7) New employee. – A full‑time employee or a full‑time worker who represents a net increase in the number of the business's employees or workers statewide.

…."

SECTION 3.(c) G.S. 143B‑437.52 reads as rewritten:

"Subpart A. Job Development Investment Grant Program.

"§ 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 investment in the economy of this State, the Committee may enter into 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:

…."

SECTION 3.(d) The Revisor of Statutes is authorized to change references of "this Part" in Subpart A of Part 2G of Article 10 of Chapter 143B of the General Statutes to "this Subpart" as appropriate.

SECTION 3.(e) Part 2G of Article 10 of Chapter 143B of the General Statutes is amended by adding a new Subpart to read:

"Subpart B. Job Catalyst Fund.

"§ 143B‑437.67. Job Catalyst Fund.

(a) Creation and Purpose of Fund. – There is created in the Department of Commerce a special, nonreverting account to be known as the Job Catalyst Fund to provide funds to a local governmental unit for projects that result in the creation of jobs. The Secretary of Commerce is solely responsible for the administration of the program and shall adopt guidelines applicable to program administration. The guidelines shall include the following provisions, which shall apply to each grant from the account:

(1) The funds are reserved for a project for which a business agrees to create and maintain, for the greater of 10 years or a time period not less than the sum of the full term of the grant plus five years, the number of new worker positions at the project as follows:

a. For development tier one areas, 500 full‑time workers.

b. For development tier two areas, 800 full‑time workers.

c. For development tier three areas, 1,200 full‑time workers.

(2) The funds are reserved for a project for which a business agrees to make an investment at the project as provided in this subdivision. The investment required by this subdivision must be private funds in improvements to real property and additions to tangible personal property located at the project for the greater of 10 years or a time period not less than the sum of the full term of the grant plus five years. The investment must be commenced no later than the time when the first disbursement is made to the business and must be completed no later than five years from the time the first disbursement is made to the business. Tangible personal property transferred by the business or from a related member of the business from one area in the State to the project is not considered an investment in tangible personal property located at the project for purposes of this section. The Department shall certify the amount of the investment made by the business at the project. The minimum investment at the project the business agrees to make is as follows:

a. For development tier one areas, twenty million dollars ($20,000,000).

b. For development tier two areas, thirty‑five million dollars ($35,000,000).

c. For development tier three areas, fifty million dollars ($50,000,000).

(3) The funds are (i) used to acquire or improve land or infrastructure, for facility development, or for capital investment and (ii) used for manufacturing projects. For purposes of this subdivision, "manufacturing" is defined in G.S. 143B‑437.01.

(4) The funds are provided to a local governmental unit, and the local governmental unit matches a portion of the funds allocated by the Department as provided in this subdivision. A local match may include cash, fee waivers, in‑kind services, the donation of assets, the provision of infrastructure, or a combination. The local match requirement is as follows:

a. For development tier one areas, a local match of at least three dollars ($3.00) for every one hundred dollars ($100.00) from the State is required.

b. For development tier two areas, a local match of at least six dollars ($6.00) for every one hundred dollars ($100.00) from the State is required.

c. For development tier three areas, a local match of at least nine dollars ($9.00) for every one hundred dollars ($100.00) from the State is required.

(5) The funds are reserved for a project for which a business agrees to meet, for the greater of 10 years or a time period not less than the sum of the full term of the grant plus five years, the wage standard provided in this subdivision for all full‑time workers at the project. In making the wage calculation, all full‑time position jobs filled during the year for at least 1,600 hours are included. The required wage standard is as follows:

a. For development tier one and two areas, an average weekly wage that is at least equal to the lesser of one hundred percent (100%) of the average wage for all insured private employers in the county.

b. For development tier three areas, an average weekly wage that is at least equal to the lesser of one hundred ten percent (110%) of the average wage for all insured private employers in the county.

(6) The funds are reserved for projects for which a business agrees to meet, for the greater of 10 years or a time period not less than the sum of the full term of the grant plus five years, a requirement to provide health insurance for all full‑time workers at the project. For purposes of this subdivision, a business provides 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 recommended by the Small Employer Carrier Committee pursuant to G.S. 58‑50‑125. A business shall provide a certification that it continues to provide health insurance as required by this subdivision.

(7) The funds are not used for a project at which is located, during the greater of 10 years or a time period not less than the sum of the full term of the grant plus five years, a business that has received a notice of an overdue tax debt and that overdue tax debt has not been satisfied or otherwise resolved.

(8) The funds are not used in favor of jobs created or property investments made for which a business receives a tax credit under Article 3J of Chapter 105 of the General Statutes.

(9) The funds are reserved for projects for a business that has no citations under the Occupational Safety and Health Act that have become a final order within the past three years for willful serious violations or for failing to abate serious violations. In addition, the business must, for the greater of 10 years or a time period not less than the sum of the full term of the grant plus five years, have no citations under the Occupational Safety and Health Act that have become a final order within the past three years for willful serious violations or for failing to abate serious violations with respect to the project. For purposes of this subsection, "serious violation" has the same meaning as in G.S. 95‑127.

(10) The funds are not used for a project that consists of a professional or semiprofessional sports team or club or a project that consists solely of retail facilities. If a project consists of both retail facilities and nonretail facilities, only the portion of the project consisting of nonretail facilities is eligible for a grant, and only full‑time workers employed exclusively in the portion of the project that represents nonretail facilities may be counted for purposes of fulfilling the new worker position requirement. If a warehouse facility is part of a retail facility and supplies only that retail facility, the warehouse facility investment and full‑time workers are not counted for purposes of the requirements of this section. For the purposes of this Subpart, catalog distribution centers are not retail facilities.

(b) Forfeiture. – If the business at the project fails to timely create and maintain the required new jobs, to timely make the required level of investment, or to otherwise meet the requirements of this section, the local governmental unit shall provide a means to recapture from the business at the project an amount equal to the amount disbursed from the Fund for the project, and the local governmental unit must reimburse the Fund for that disbursement.

(c) Records. – A business located at a project for which a grant was made from the Fund shall maintain records and make available for inspection by the Secretary of Commerce any records the Secretary considers necessary to determine and verify the business has met the requirements of this section.

(d) Report. – The Department shall publish a report on the Job Catalyst Fund on or before April 30 of each year. The Department shall submit the report electronically to the House of Representatives Finance Committee, the Senate Finance Committee, the House of Representatives Appropriations Subcommittee on Natural and Economic Resources, the Senate Appropriations Committee on Natural and Economic Resources, and the Fiscal Research Division. The report shall include the following:

(1) A listing of each grant awarded during the preceding calendar year, including the name of the business locating at the project, a description of the project, the term of the grant, and the liability under the grant.

(2) An update on the status of projects under grants awarded before the preceding calendar year.

(3) The number and development tier area of new worker positions to be created by projects with respect to which grants have been awarded.

(4) A listing of the employment level for all businesses located at projects with respect to which grants have been awarded and any changes in those levels from the level of the next preceding year.

(5) The wage levels of all new worker positions to be created at projects with respect to which grants have been awarded, aggregated, and listed in increments of ten thousand dollars ($10,000) or other appropriate increments.

(6) The number of awards made for projects for new businesses and the number of awards made for projects for existing, expanding businesses in the preceding calendar year.

(7) The environmental impact of businesses at projects with respect to which grants have been awarded.

(8) The geographic distribution of grants, by number and amount, awarded under the program.

(9) For the first annual report after adoption of the guidelines developed by the Department to implement this Subpart, a copy of such guidelines, and, for subsequent reports, identification of any changes in those guidelines from the previous calendar year."

SECTION 3.(f) The Secretary of Commerce shall develop guidelines related to the administration of the Jobs Catalyst Fund, as authorized by this section, and to the selection of projects. At least 20 days before the effective date of any guidelines or nontechnical amendments to guidelines, the proposed guidelines must be published on the Department's Web site and provide notice to persons who have requested notice of proposed guidelines. In addition, the Department of Commerce shall accept oral and written comments on the proposed guidelines during the 15 business days beginning on the first day the notice requirement of this subsection have been completed. For purposes of this subsection, a technical amendment is one that corrects a spelling or grammatical error or that makes a clarification based on public comment and could have been anticipated by the public notice that immediately preceded the public comment.

SECTION 3.(g) G.S. 150B‑1(d) reads as rewritten:

"(d) Exemptions from Rule Making. – Article 2A of this Chapter does not apply to the following:

…

(10) The Economic Investment Committee in developing criteria for the Job Development Investment Grant Program under ~~Part 2F~~Subpart A of Part 2G of Article 10 of Chapter 143B of the General Statutes.

(10a) The Secretary of Commerce in developing criteria for the Job Catalyst Fund under Subpart B of Part 2G of Article 10 of Chapter 143B of the General Statutes.

…."

SECTION 3.(h) G.S. 143B‑437.07(c) reads as rewritten:

"(c) Economic Development Incentive. – An economic development incentive includes any grant from the following programs: Job Development Investment Grant Program; the Job Catalyst Fund; the Job Maintenance and Capital Development Fund; One North Carolina Fund; and the Utility Account. The State also incents economic development through the use of tax expenditures in the form of tax credits and refunds. The Department of Revenue must report annually on these statutory economic development incentives, as required under G.S. 105‑256."

SECTION 3.(i) This section is effective when it becomes law.

PART IV. JDIG MODIFICATIONS

SECTION 4.(a) Section 15.19(a1) of S.L. 2013‑360 reads as rewritten:

"SECTION 15.19.(a1) Notwithstanding G.S. 143B‑437.52(c), for the 2013‑2015 fiscal biennium, the maximum total liability for grants awarded, including amounts transferred to the Utility Account pursuant to G.S. 143B‑437.61, is ~~twenty‑two million five hundred thousand dollars ($22,500,000)~~thirty‑six million five hundred thousand dollars ($36,500,000) and, for the period from July 1, 2015, to December 31, 2015, the maximum total liability for grants awarded, including amounts transferred to the Utility Account pursuant to G.S. 143B‑437.61, is seven million five hundred thousand dollars ($7,500,000). No agreement may be entered into that, when considered together with other existing agreements governing grants awarded during an applicable time period provided in this subsection, could cause the State's potential total ~~annual~~ liability for grants awarded in that time period to exceed the designated maximum amount."

SECTION 4.(b) 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 investment in the economy of this State, the Committee may enter into agreements with businesses to provide grants in accordance with the provisions of this ~~Part.~~Subpart. 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.~~Subpart. Before entering into an agreement, the Committee must find that all the following conditions are met:

…

(5) The total benefits of the project to the State outweigh its costs and render the grant appropriate for the project. If the total costs of the project to the State outweigh the benefits as a result of an award from the Job Catalyst Fund under Subpart B of this Part, the Committee may disregard the Job Catalyst Fund award in determining whether a grant is appropriate for the project.

…."

PART V. EFFECTIVE DATE

SECTION 5. Except as otherwise provided, this act is effective when it becomes law.