GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2017
S

D
BILL DRAFT 2017-MC-203G [v.3]

(THIS IS A DRAFT AND IS NOT READY FOR INTRODUCTION)
05/16/2018 01:33:46 PM
Short Title:

High Yield/Transformative Projects Mods.

Sponsors:

Senator Berger (Primary Sponsor).

(Public)

Referred to:
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34

A BILL TO BE ENTITLED
AN ACT TO INCENTIVIZE MAJOR MANUFACTURING AND TECHNOLOGY
HEADQUARTERS PROJECTS.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 143B-437.51 reads as rewritten:
"§ 143B-437.51. Definitions.
The following definitions apply in this Part:
…
(5)
Eligible position. – A position created by a business and filled by a new
full-time employee in this State during the base period. For purposes of
high-yield projects and transformative projects, (i) positions created in the
year the business achieves the minimum requirements set forth this section
may be considered eligible positions even if created outside the base period
and (ii) in a year other than during the base period, an eligible position must
be filled for at least 30 weeks of the applicable grant year.
(5a) Expansion position. – A position created by a business and filled by a new
full-time employee in this State for a transformative project in any year in
which the business receives the enhanced percentage of the withholdings of
eligible positions pursuant to G.S. 143B-437.56(a1).
(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, who is not a worker with an H-1B visa
or with H-1B status, 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.
…
(9a) Transformative project. – A project for which the agreement requires that a
business
invest
at
least
four
one
billion
dollars
($4,000,000,000)($1,000,000,000) in private funds and create at least
5,0003,000 eligible positions.
(10) Withholdings. – The amount withheld by a business from the wages of
employees in eligible positions and, if applicable, expansion positions under
Article 4A of Chapter 105 of the General Statutes."

*2017-MC-203G-v-3*

 General Assembly Of North Carolina
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50

Session 2017

SECTION 2. G.S. 143B-437.56 reads as rewritten:
§ 143B-437.56. Calculation of minimum and maximum grants; factors considered.
…
(a1) Notwithstanding the percentage specified by subsection (a) of this section, the amount
of the grant awarded for a high-yield or transformative project shall be enhanced as provided in
this subsection if the applicable conditions of this subsection are met. A business receiving an
enhanced percentage of withholdings under this subsection that fails to maintain the minimum
job creation requirement or meet all terms of the agreement will be disqualified from receiving
the enhanced percentage and will have the applicable percentage set forth in subsection (a) of
this section applied in the year in which the failure occurs and all remaining years of the grant
term.
(1)
ifIf the project is a high-yield or transformative project, the business has met
the investment and job creation requirements, and, for three consecutive years,
the business has met all terms of the agreement, the amount of the grant
awarded shall be no more than one hundred percent (100%) of the
withholdings of eligible positions for each consecutive year the business
maintains the minimum job creation requirement and meets all terms of the
agreement. Ninety percent (90%) of the annual grant approved for
disbursement shall be payable to the business, and ten percent (10%) shall be
payable to the Utility Account pursuant to G.S. 143B-437.61.A business
receiving an enhanced percentage of the withholdings of eligible positions
under this subsection that fails to maintain the minimum job creation
requirement or meet all terms of the agreement will be disqualified from
receiving the enhanced percentage and will have the applicable percentage set
forth in subsection (a) of this section applied in the year in which the failure
occurs and all remaining years of the grant term.
(2)
If the project is a transformative project and the business has met the
investment and job creation requirements and all terms of the agreement, the
amount of the grant awarded shall be no more than one hundred percent
(100%) of the withholdings of eligible and expansion positions for each year
the business maintains the minimum job creation requirement and meets all
terms of the agreement. Ninety percent (90%) of the annual grant approved
for disbursement shall be payable to the business, and ten percent (10%) shall
be payable to the Utility Account pursuant to G.S. 143B-437.61.
(b)
The term of the grant shall not exceed the duration listed in this subsection. The first
grant payment must be made within six years after the date on which the grant was awarded. The
For projects other than transformative projects, the number of years in the base period for which
grant payments may be made shall not exceed five years. For transformative projects, the number
of years in the base period for which grant payments may be made shall not exceed ten years.
Maximum durations are as follows:
…
(1a) For transformative projects in which the business receives the enhanced
percentage pursuant to subsection (a1) of this section, 25 the base period plus
30 years starting with the first year a grant payment is made. If a business is
disqualified from the enhanced percentage in one of the first 12 years, the term
of the grant shall not exceed 12 years starting with the first year a grant
payment is made. If a business is disqualified from receiving the enhanced
percentage after the first 12 years, the term of the grant ends in the year the
disqualification occurs.
…

Page 2

2017-MC-203G [v.3]

 General Assembly Of North Carolina
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51

Session 2017

(c)
The Except as provided in subsection (a1), the grant may be based only on eligible
positions created during the base period.
…
(f)
The For projects other than transformative projects, the amount of a grant associated
with any specific eligible position, including any amount transferred to the Utility Account
pursuant to G.S. 143B-437.61, may not exceed six thousand five hundred dollars ($6,500) in any
year."
SECTION 3. G.S. 143B-437.57(a) reads as rewritten:
"(a) Terms. – Each community economic development agreement shall include at least
the following:
(1)
A detailed description of the proposed project that will result in job creation
and the number of new employees to be hired during the base period.
…
(3)
The number of eligible positions that are subjects of the grant and a description
of those positions and the location of those positions.
…
(6)
A method for the business to report annually to the Committee the number of
eligible positions and, if applicable, expansion positions for which the grant
is to be made.
…
(11) A provision that requires the business to maintain employment levels in this
State at the greater of the level of employment on the date of the application
or the level of employment on the date of the award.
…
(14) A provision setting out any allowed variation in the terms of the agreement
that will not subject the business to grant reduction, amendment, or
termination of the agreement under G.S. 143B-437.59.
(14a) If applicable, a provision for transformative projects setting out any allowed
variation in the terms of the agreement that will result in a grant increase to
the business for expansion positions. Grant increases for expansion positions
may not include workers employed in North Carolina who fill expansion
positions with the business as a result of a merger or acquisition occurring
during the term of the agreement.
…
(23) A For projects other than transformative projects, a provision stating that the
amount of a grant associated with any specific eligible position, including any
amount transferred to the Utility Account pursuant to G.S. 143B-437.61, may
not exceed six thousand five hundred dollars ($6,500) in any year.
…."
SECTION 4. G.S. 143B-437.58(a) reads as rewritten:
"(a) No later than March 1 of each year, for the preceding grant year, every business that
is awarded a grant under this Part shall submit to the Committee Department of Revenue an
annual payroll report showing withholdings as a condition of its continuation in the grant program
and identifying eligible positions that have been created during the base period that remain filled
at the end of each year of the grant. Annual reports submitted to the Committee Department of
Revenue shall include social security numbers of individual employees identified in the reports.
Upon request of the Committee, the business shall also submit a copy of its State and federal tax
returns.returns to the Department of Revenue. The Committee may inspect the information
submitted to the Department of Revenue pursuant to this section at the Department of Revenue
for purposes of award verification and calculation. Payroll and tax information, including social
security numbers of individual employees and State and federal tax returns, submitted under this
2017-MC-203G [v.3]

Page 3

 General Assembly Of North Carolina
1
2
3
4
5
6
7
8
9
10
11
12
13

Session 2017

subsection is tax information subject to G.S. 105-259. Aggregated payroll or withholding tax
information submitted or derived under this subsection is not tax information subject to G.S.
105-259. When making a submission under this section, the business must pay the Committee
Department of Revenue a fee of the greater of two thousand five hundred dollars ($2,500) or
three one-hundredths of one percent (.03%) of an amount equal to the grant less the maximum
amount to be transferred pursuant to G.S. 143B-437.61. The fee is due at the time the submission
is made. The Secretary of Commerce, the Secretary of Revenue, and the Director of the Office
of State Budget and Management shall determine the allocation of the fee imposed by this section
among their agencies. The proceeds of the fee are receipts of the agency to which they are
credited."
SECTION 5. This act is effective when it becomes law and applies to community
economic development agreements for high-yield projects and transformative projects entered
on or after that date.

Page 4

2017-MC-203G [v.3]