EDGE COMMITTEE DRAFT.

View NCGA Bill Details2017-2018 Session
Senate Bill 618 (Public) Filed Tuesday, April 4, 2017
AN ACT TO MAKE CERTAIN CHANGES TO ECONOMIC DEVELOPMENT INCENTIVES OF THE STATE TO CLARIFY THE IMPORTANCE OF USING DEVELOPMENT FUNDS IN THE MORE DISTRESSED AREAS OF THE STATE AND MAKE OTHER CHANGES.
Intro. by Brown, Britt, Lee.

Status: Ref To Com On Rules and Operations of the Senate (Senate Action) (Apr 5 2017)

SOG comments (1):

Identical bill

Substantively identical to S 660, filed 4/4/17.

Bill History:

S 618

Bill Summaries:

  • Summary date: Apr 5 2017 - More information

    Part I.

    Amends GS 143B-431.01 by also prohibiting the Department of Commerce (Department) from contracting with a nonprofit for (1) site certification functions and activities performed by the Department or (2) the performance of functions, powers, duties, or obligations of any other State agency. Amends the mandatory contract terms for any contract that the Department enters into with a nonprofit for the performance of any of the Department's functions, powers, duties, and obligations, as follows: (1) requires the nonprofit's report on prior State fiscal year program activities, objectives, and accomplishments, as well as expenditures and fund sources, to also include for jobs anticipated to result from the nonprofit's efforts, the name and contact person of each company creating new jobs in the State and the location of each project; (2) specifies requirements for bonuses that are awarded for job performance, as reported in the nonprofit's report; and (3) adds that the contract must include a provision prohibiting the nonprofit from contracting with any State agency other than the Department for the performance of one or more of the agency's functions, powers, duties, or obligations.

    Part II.

    Amends the definitions used in Part 2F, E-NC Initiative, of Article 10 (Department of Commerce) of GS Chapter 143B. Specifies that the term eligible position does not include a position filled by a worker with an H-1B visa or H-1B status. Effective January 1, 2017.

    Amends GS 143B-437.52 by amending the conditions that the Economic Investment Committee must find before entering into an agreement with business to provide grants, to require that the project be consistent with economic development goals for the State and for the area where it will be located, including anticipated effects the project described in the application will have on the development factors, as calculated under GS 143B-437.08, of the area. Effective January 1, 2017.

    Effective January 1, 2018, amends the limitations on grant awards under GS 143B-437.52 to add of the maximum amount of total annual liability for grants awarded in a single calendar year, no more than 50% may be awarded for projects located in whole or in part in development tier three areas. Specifies that of the amount awarded for projects located in whole or in part in development tier three areas, no more than 50% may be awarded for projects located in whole or in part in attainment areas. These limitations  do not apply to a grant awarded to a high‑yield project.

    Amends GS 143B-437.56, which limits the amount of a grant awarded in each case to a percentage of the withholdings of eligible positions for a period of years. Amends those percentages so that they are no more than: (1) 80% for a development tier one area; (2) 70% for a development tier two area; (3) 60% for a development tier three area that is not designated as an attainment area; and (4) 50% for a county designated as an attainment area (was, no more than 75% of any area other than a development tier one, which was no more than 80%). Adds that for any eligible position located in a county designated as an attainment area, 50% of the annual grant is payable to the business and 50% is payable to the Industrial Development Fund Utility Account (Utility Account). For any position located in a development tier three area that is not designated as an attainment area, 70% of the grant is payable to the business (was 75%) and 30% (was, 25%) is payable to the Utility Account. Effective January 1, 2017.

    Amends GS 143B-437.72 by amending the provisions that must be included in an agreement between a local government and a grantee business. Prohibits the provisions concerning a commitment to create or retain a specified number of jobs within a specified salary range at a specified location from including the number of jobs filled by workers with H-1B visas or H-1B status. Amends the provisions that must be included in an agreement between the State and local governments by making the current matching requirements for local governments in a tier three area applicable to those that are not designated as an attainment area. Adds that for a local government in an attainment area, the State will provide no more than $1 for every $4 provided by the local government. Effective January 1, 2017.

    Amends GS 143B-437.01, concerning the Utility Account, by adding that the Utility Account is to provide funds to assist in retaining, as well as creating, jobs, including expanding the existing job base. Makes conforming changes.

    Part III.

    Amend GS 143B-437.08 by deleting the provisions requiring adjustments to the development factor and specified exceptions. Adds that the Secretary of Commerce (Secretary) must cost adjust the national value for per capita income to determine the State value for that factor and determine the State value for the specified factors used in calculating the development factor. Using these metrics, requires the Secretary to create an index, as follows: (1) the State average rate of unemployment divided by the county's average rate, (2) the county's per capita income divided by the per capita income value for the State determined pursuant to this subsection, (3) the county's percentage growth in population divided by the State's percentage growth, and (4) the county's adjusted assessed property value per capita divided by the State adjusted assessed property value per capita. Requires the Secretary to then rank and publish all the counties according to their index scores, along with the value against which the factor is compared, from lowest to highest, with a separate designation for any county with performance greater than that of the benchmarks for all indexed development factors as an attainment area. An index score average and achievement area designation is effective only for the calendar year following the designation. Makes conforming changes to GS 143B-437.01, GS 143B-472.127, and GS 143B-472.128. Applies to economic development awards made and related determinations occurring on or after January 1, 2018.

    Part IV.

    Requires for each Collaboration for Prosperity Zone established in GS 143B‑28.1, the employees of the Department in the zone must examine each annual update of the plan; collate all information relevant to the zone, county, region, and other unit of local government in the zone; and provide a copy of the collated information to each unit of local government within the zone. Requires that the collated information also identify any additional regional assets not otherwise contained in the annual update. Requires for any asset identified in the annual update or identified by the employees an analysis to be performed to identify appropriate potential industries best suited to maximize the beneficial economic impact of each asset. Requires the Department to give the Economic Development and Global Engagement Joint Oversight Committee a list of any assets remaining in the collated information for more than two years by January 1 of each year.

    Requires, for each Collaboration for Prosperity Zone established in GS 143B‑28.1, the employees of the Department in the zone to submit a report to the Joint Legislative Economic Development and Global Engagement Oversight Committee and the Fiscal Research Division on the following: (1) jobs anticipated to result from efforts of the employees, including the name and contact person of each company creating new jobs in the zone; (2) the location of each project, including the development tier designation of the location; and (3) project leads that were not submitted to the Department for possible discretionary incentives.

    Part V.

    Amends GS 143B-428, which sets out he Department's declaration of policy, by adding that the coordination of the state's economic development efforts is to emphasize maximizing the return on investment of economic development dollars by selecting projects and locations on the basis of providing the greatest relief to communities experiencing chronic economic distress.

    Requires the Department to study ways to effectuate this policy clarification. Specifies issues to be included in the study. Requires a report to the Joint Legislative Oversight Committee on Economic Development and Global Engagement by October 1, 2017.

    Amends GS 143B-437.07 to require the Department to use the index required by GS 143B‑437.08(c1) to create a plan for improving the performance of each county underperforming the benchmark in one or more indexed development factors to the benchmark performance level at the time the plan was created. Requires the plan to cover five years, and requires a new plan upon the plan's expiration. Requires the Department to publish and submit an annual progress report to the Joint Legislative Oversight Committee on Economic Development and Global Engagement that includes specified information. Requires that a copy of a plan for the first year be submitted after it is created and each progress report be submitted on or before April 1 of each year. Makes additional clarifying changes.

    Specifies that for purposes of the initial plan required under GS 143B‑437.07, the Department must consult with and use data compiled by the Center for Competitive Economies at the Kenan‑Flagler Business School at UNC-CH for the study performed for the Joint Legislative Oversight Committee on Economic Development and Global Engagement.

    Part VI.

    Unless otherwise provided, the act is effective when it becomes law. 


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