State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_143B > GS_143B-437_012

§ 143B‑437.012.  JobMaintenance and Capital Development Fund.

(a)        Findings. – TheGeneral Assembly finds that:

(1)        It is the policy ofthe State of North Carolina to stimulate economic activity, to maintain high‑payingjobs for the citizens of the State, and to encourage capital investment byencouraging and promoting the maintenance of existing business and industrywithin the State.

(2)        The economiccondition of the State is not static, and recent changes in the State'seconomic condition have created economic distress that requires the enactmentof a new program as provided in this section that is designed to encourage theretention of significant numbers of high‑paying jobs and the addition offurther large‑scale capital investment.

(3)        The enactment ofthis section is necessary to stimulate the economy and maintain high‑qualityjobs in North Carolina, and this section will promote the general welfare andconfer, as its primary purpose and effect, benefits on citizens throughout theState through the maintenance of high‑quality jobs, an enlargement of theoverall tax base, continued diversity in the State's industrial base, and anincrease in revenue to the State's political subdivisions.

(4)        The purpose of thissection is to stimulate economic activity and to maintain high‑payingjobs within the State while increasing the property tax base for localgovernments.

(5)        The benefits thatflow to the State from job maintenance and capital investment are many andinclude increased tax revenues related to the capital investment, increasedcorporate income and franchise taxes due to the placement of additionalresources in the State, a better trained, highly skilled workforce, and thecontinued receipt of personal income tax withholdings from workers who remain employedin high‑paying jobs.

(b)        Fund. – The JobMaintenance and Capital Development Fund is created as a restricted reserve inthe Department of Commerce. Monies in the Fund do not revert but remainavailable to the Department for these purposes. The Department may use moniesin the Fund only to encourage businesses to maintain high‑paying jobs andmake further capital investments in the State as provided in this section, andfunds are hereby appropriated for these purposes in accordance with G.S. 143C‑1‑2.

(c)        Definitions. – Thedefinitions in G.S. 143B‑437.51 apply in this section. In addition, asused in this section, the term "Department" means the Department ofCommerce.

(d)        (Effective untilJuly 1, 2010) Eligibility. – A business that satisfies all of the followingconditions is eligible for consideration for a grant under this section:

(1)        The Departmentcertifies that the business has invested or intends to invest at least twohundred million dollars ($200,000,000) of private funds in improvements to realproperty and additions to tangible personal property in the project within asix‑year period beginning with the time the investment commences.

(2)        The business employsat least 2,000 full‑time employees or equivalent full‑time contractemployees at the project that is the subject of the grant at the time theapplication is made, and the business agrees to maintain at least 2,000 full‑timeemployees or equivalent full‑time contract employees at the project forthe full term of the grant agreement.

(3)        The project islocated in a development tier one area at the time the business applies for agrant.

(4)        All newly hiredemployees of the business must be citizens of the United States, or have properidentification and documentation of their authorization to reside and work inthe United States.

(d)        (Effective July1, 2010) Eligibility. – A business is eligible for consideration for agrant 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 (4) of this subsection:

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

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

b.         The business employsat least 2,000 full‑time employees or equivalent full‑time contractemployees at the project that is the subject of the grant at the time theapplication is made, and the business agrees to maintain at least 2,000 full‑timeemployees or equivalent full‑time contract employees at the project forthe full term of the grant agreement.

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

a.         The business is inmanufacturing, as defined in G.S. 105‑129.81, and is converting itsmanufacturing process to change the product it manufactures.

b.         The Departmentcertifies that the business has invested or intends to invest at least sixty‑fivemillion dollars ($65,000,000) of private funds in improvements to real propertyand additions to tangible personal property in the project within a three‑yearperiod beginning with the time the investment commences.

c.         The business employsat least 320 full‑time employees at the project that is the subject ofthe grant at the time the application is made, and the business agrees tomaintain at least 320 full‑time employees at the project for the fullterm of the grant.

(3)        The project islocated in a development tier one area at the time the business applies for agrant.

(4)        All newly hiredemployees of the business must be citizens of the United States, or have properidentification and documentation of their authorization to reside and work inthe United States.

(e)        Wage Standard. – Abusiness is eligible for consideration for a grant under this section only ifthe business satisfies a wage standard at the project that is the subject ofthe agreement. A business satisfies the wage standard if it pays an averageweekly wage that is at least equal to one hundred forty percent (140%) of theaverage wage for all insured private employers in the county. The Department ofCommerce shall annually publish the wage standard for each county. In makingthe wage calculation, the business shall include any jobs that were filled forat least 1,600 hours during the calendar year, regardless of whether the jobsare full‑time positions or equivalent full‑time contract positions.Each year that a grant agreement is in effect, the business shall provide theDepartment a certification that the business continues to satisfy the wagestandard. If a business fails to satisfy the wage standard for a year, thebusiness is not eligible for a grant payment for that year.

(f)         Health Insurance.– A business is eligible for consideration for a grant under this section onlyif the business makes available health insurance for all of the full‑timeemployees and equivalent full‑time contract employees of the project withrespect 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 theminimum provisions of the basic health care plan of coverage under G.S. 58‑50‑125.

Each year that a grantagreement under this section is in effect, the business shall provide theDepartment a certification that the business continues to make available healthinsurance for all full‑time employees of the project governed by theagreement. If a business fails to satisfy the requirements of this subsection,the business is not eligible for a grant payment for that year.

(g)        Safety and HealthPrograms. – A business is eligible for consideration for a grant under thissection only if the business has no citations under the Occupational Safety andHealth Act that have become a final order within the last three years forwillful serious violations or for failing to abate serious violations withrespect to the location for which the grant is made. For the purposes of thissubsection, "serious violation" has the same meaning as in G.S. 95‑127.

(h)        EnvironmentalImpact. – A business is eligible for consideration for a grant under thissection only if the business has no pending administrative, civil, or criminalenforcement action based on alleged significant violations of any programimplemented by an agency of the Department of Environment and Natural Resourcesand has had no final determination of responsibility for any significant administrative,civil, or criminal violation of any program implemented by an agency of theDepartment of Environment and Natural Resources within the last three yearswith respect to the location for which the grant is made. For the purposes ofthis subsection, a significant violation is a violation or alleged violationthat does not satisfy any of the conditions of G.S. 143‑215.6B(d).

(i)         Selection. – TheDepartment shall administer the selection of projects to receive grants underthis section. The selection process shall include the following components:

(1)        Criteria. – TheDepartment shall develop criteria to be used to identify and evaluate eligibleprojects for possible grants under this section.

(2)        Initial evaluation.– The Department shall evaluate projects to determine if a grant under thissection is merited and to determine whether the project is eligible andappropriate for consideration for a grant under this section.

(3)        Application. – TheDepartment shall require a business to submit an application in order for aproject to be considered for a grant under this section. The Department shallprescribe the form of the application, the application process, and theinformation to be provided, including all information necessary to evaluate theproject in accordance with the applicable criteria.

(4)        Committee. – TheDepartment shall submit to the Economic Investment Committee the applicationsfor projects the Department considers eligible and appropriate for a grantunder this section. The Committee shall evaluate applications to chooseprojects to receive a grant under this section. In evaluating each application,the Committee shall consider all criteria adopted by the Department under thissection and, to the extent applicable, the factors set out in Section 2.1(b) ofS.L. 2002‑172.

(5)        Findings. – TheCommittee shall make all of the following findings before recommending aproject receive a grant under this section:

a.         The conditions foreligibility have been met.

b.         A grant under thissection for the project is necessary to carry out the public purposes providedin subsection (a) of this section.

c.         The project isconsistent with the economic development goals of the State and of the areawhere it is located.

d.         The affected localgovernments have participated in retention efforts and offered incentives in amanner appropriate to the project.

e.         A grant under thissection is necessary for the sustainability and maintenance of the project inthis State.

(6)        Recommendations. – Ifthe Committee recommends a project for a grant under this section, it shallrecommend the amount of State funds to be committed, the preferred form anddetails of the State participation, and the performance criteria and safeguardsto be required in order to protect the State's investment.

(j)         (Effectiveuntil July 1, 2010) Agreement. – Unless the Secretary of Commercedetermines that the project is no longer eligible or appropriate for a grantunder this section, the Department shall enter into an agreement to provide agrant or grants for a project recommended by the Committee. Each grantagreement is binding and constitutes a continuing contractual obligation of theState and the business. The grant agreement shall include the performancecriteria, remedies, and other safeguards recommended by the Committee orrequired by the Department. Each grant agreement shall contain a provisionprohibiting a business from receiving a payment or other benefit under theagreement at any time when the business has received a notice of an overdue taxdebt and the overdue tax debt has not been satisfied or otherwise resolved.Each grant agreement shall contain a provision requiring the business tomaintain the employment level at the project that is the subject of theagreement that is the lesser of the level it had at the time it applied for agrant under this section or that it had at the time that the investmentrequired under subsection (d) of this section began. For the purposes of thissubsection, the employment level includes full‑time employees andequivalent full‑time contract employees. The agreement shall furtherspecify that the amount of a grant shall be reduced in proportion to the extentthe business fails to maintain employment at this level and that the businessshall not be eligible for a grant in any year in which its employment level isless than eighty percent (80%) of that required. A grant agreement may obligatethe 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 bythe State of any debt of any business or authorizes the taxing power or thefull faith and credit of the State to be pledged.

The Department shall cooperatewith the Attorney General's office in preparing the documentation for the grantagreement. The Attorney General shall review the terms of all proposedagreements to be entered into under this section. To be effective against theState, an agreement entered into under this section shall be signed personallyby the Attorney General.

(j)         (Effective July1, 2010) Agreement. – Unless the Secretary of Commerce determines that theproject 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 aproject recommended by the Committee. Each grant agreement is binding andconstitutes a continuing contractual obligation of the State and the business.The grant agreement shall include the performance criteria, remedies, and othersafeguards recommended by the Committee or required by the Department.

Each grant agreement for abusiness that is a major employer under subdivision (1) of subsection (d) ofthis section shall contain a provision prohibiting a business from receiving apayment or other benefit under the agreement at any time when the business hasreceived a notice of an overdue tax debt and the overdue tax debt has not beensatisfied or otherwise resolved. Each grant agreement shall contain a provisionrequiring the business to maintain the employment level at the project that isthe subject of the agreement that is the lesser of the level it had at the timeit applied for a grant under this section or that it had at the time that theinvestment required under subsection (d) of this section began. For thepurposes of this subsection, the employment level includes full‑timeemployees and equivalent full‑time contract employees. The agreementshall further specify that the amount of a grant shall be reduced in proportionto the extent the business fails to maintain employment at this level and thatthe business shall not be eligible for a grant in any year in which itsemployment level is less than eighty percent (80%) of that required.

Each grant agreement for abusiness that is a large manufacturing employer under subdivision (2) ofsubsection (d) of this section shall contain a provision requiring the businessto maintain the employment level required under that subdivision at the projectthat is the subject of the grant. The agreement shall further specify that thebusiness is not eligible for a grant in any year in which the business fails tomaintain the employment level.

A grant agreement may obligatethe 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 bythe State of any debt of any business or authorizes the taxing power or thefull faith and credit of the State to be pledged.

The Department shall cooperatewith the Attorney General's office in preparing the documentation for the grantagreement. The Attorney General shall review the terms of all proposedagreements to be entered into under this section. To be effective against theState, an agreement entered into under this section shall be signed personallyby the Attorney General.

(k)        (Effective untilJuly 1, 2010) Safeguards. – To ensure that public funds are used only tocarry out the public purposes provided in this section, the Department shallrequire that each business that receives a grant under this section shall agreeto meet performance criteria to protect the State's investment and ensure thatthe projected benefits of the project are secured. The performance criteria tobe required shall include maintenance of an appropriate level of employment atspecified levels of compensation, maintenance of health insurance for all full‑timeemployees, investment of a specified amount over the term of the agreement, andany other criteria the Department considers appropriate. The agreement shallrequire the business to repay or reimburse an appropriate portion of the grantbased on the extent of any failure by the business to meet the performancecriteria. The agreement shall require the business to repay all amountsreceived under the agreement and to forfeit any future grant payments if thebusiness fails to satisfy the investment eligibility requirement of subdivision(d)(1) of this section. The use of contract employees shall not be used toreduce compensation at the project that is the subject of the agreement.

(k)        (Effective July1, 2010) Safeguards. – To ensure that public funds are used only to carryout the public purposes provided in this section, the Department shall requirethat each business that receives a grant under this section shall agree to meetperformance criteria to protect the State's investment and ensure that theprojected benefits of the project are secured. The performance criteria to berequired shall include maintenance of an appropriate level of employment atspecified levels of compensation, maintenance of health insurance for all full‑timeemployees, investment of a specified amount over the term of the agreement, andany other criteria the Department considers appropriate. The agreement shallrequire the business to repay or reimburse an appropriate portion of the grantbased on the extent of any failure by the business to meet the performancecriteria. The agreement shall require the business to repay all amountsreceived under the agreement and to forfeit any future grant payments if thebusiness fails to satisfy the investment eligibility requirement of subdivision(d)(1) or (d)(2) of this section. The use of contract employees shall not beused to reduce compensation at the project that is the subject of theagreement.

(l)         Calculation ofGrant Amounts. – The Committee shall consider the following factors indetermining the amount of a grant that would be appropriate, but is notnecessarily limited to these factors:

(1)        Ninety‑fivepercent (95%) of the privilege and sales and use taxes paid by the business onmachinery and equipment installed at the project that is the subject of theagreement.

(2)        Ninety‑fivepercent (95%) of the sales and use taxes paid by the business on buildingmaterials used to construct, renovate, or repair facilities at the project thatis the subject of the agreement.

(3)        Ninety‑fivepercent (95%) of the additional income and franchise taxes that are not offsetby tax credits. For the purposes of this subdivision, "additional incomeand franchise taxes" are the additional taxes that would be due because ofthe investment in machinery and equipment and real property at the project thatis the subject of the agreement during the investment period specified insubsection (d) of this section.

(4)        Ninety‑fivepercent (95%) of the sales and use taxes paid on electricity, the excise taxpaid on piped natural gas, and the privilege tax paid on other fuel forelectricity, piped natural gas, and other fuel consumed at the project that isthe subject of the agreement.

(5)        One hundred percent(100%) of worker training expenses, including wages paid for on‑the‑jobtraining, associated with the project that is the subject of the agreement.

(6)        One hundred percent(100%) of any State permitting fees associated with the capital expansion atthe project that is the subject of the agreement.

(m)       Monitoring andReports. – The Department is responsible for monitoring compliance with theperformance criteria under each grant agreement and for administering therepayment in case of default. The Department shall pay for the cost of thismonitoring from funds appropriated to it for that purpose or for other economicdevelopment purposes.

On September 1 of each yearuntil all funds have been expended, the Department shall report to the JointLegislative Commission on Governmental Operations regarding the Job Maintenanceand Capital Development Fund. This report shall include a listing of each grantawarded and each agreement entered into under this section during the precedingyear, including the name of the business, the cost/benefit analysis conductedby 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 thecurrent fiscal year. The report shall also include detailed information aboutany defaults and repayment during the preceding year. The Department shallpublish this report on its Web site and shall make printed copies availableupon request.

(n)        (Effective untilJuly 1, 2010) Limitations. – The Department may enter into no more thanfive agreements under this section. The total aggregate cost of all agreementsentered into under this section may not exceed sixty million dollars($60,000,000). The total annual cost of an agreement entered into under thissection may not exceed four million dollars ($4,000,000).

(n)        (Effective July1, 2010) Limitations. – The Department may enter into no more than fiveagreements under this section. The total aggregate cost of all agreementsentered into under this section may not exceed sixty‑nine million dollars($69,000,000). The total annual cost of an agreement entered into under thissection may not exceed six million dollars ($6,000,000).  (2007‑552, 1st Ex.Sess., s. 1; 2008‑187, s. 26(a); 2009‑451, s. 14.5(b); 2009‑520,s. 1.)