House committee substitute makes the following changes to the 1st edition.

Makes organizational changes.

Part I. Discretionary Economic Development Fund Modifications

Deletes the proposed changes to GS 143B-431.01 (Department of Commerce contracting of functions).

Deletes the proposed changes to GS 143B-437.51(5), amending the definition of eligible person. Instead, amends the term high-yield project as the term is used in Part 2G of Article 10 concerning the Job Development Investment Grant Program (Program). Currently, high-yield project means a project for which the agreement requires that a business invest at least $500 million in private funds and create at least 1,750 eligible positions. Expands this definition to encompass projects where the agreement requires that a business invest at least $500 million in private funds and create at least 1,750 eligible positions for projects located in a high-growth area, at least 1,600 positions for projects located in a development tier three area, at least 1,200 positions for projects located in a development tier two area, or at least 800 positions for projects located in a development tier one area. Specifies that the location with the highest designation determines the job creation requirements due under this provision if a project will be located in more than one area. Also adds the term high-growth area, and defines the term to mean the classification assigned to an area pursuant to GS 143B-437.08 (Development tier designation). Effective July 1, 2017, and applies to agreements entered into on or after that date (previous changes to GS 143B-437.51 were effective January 1, 2017, and applied to awards made on or after that date).

Changes the effective date provided for the changes made to GS 143B-437.52(a) to July 1, 2017 (was, January 1, 2017), and makes the changes applicable to agreements entered into on or after that date (was, awards made on or after that date).

Deletes the proposed changes to GS 143B-437.52(c), concerning award limitations. Now sets the maximum amount of total annual liability for grants awarded in any single calendar year under the Program, including amounts transferred to the Utility Account pursuant to GS 143B-437.61, at $20 million (was, set at $20 million for a year in which no grants are awarded for a high yield project and $35 million for a year in which a grant is awarded for a high yield project; previously, limited the maximum liability provisions to projects not wholly located in development tier one areas). Adds new language establishing that this maximum liability provision does not apply to high-yield projects or to projects located wholly within a development tier one area. Effective January 1, 2017, and applies to liability for grants awarded on or after that date (previous changes were effective when the act becomes law and applicable to grants awarded on or after that date). 

Amends GS 143B-437.55(b), concerning the grant application fee. Changes the current blanket fee of $10,000 to now set the following fees: $10,000 for projects that are not high-yield projects and located in a development tier three area, $5,000 for projects located in a development tier two area, and $1,000 for projects located in a development tier one area. Sets the fee for high-yield projects at $10,000. Specifies that the locations with the highest development tier area designation determines the fee if a project will be located in more than one development tier area. Effective July 1, 2017, and applies to applications filed on or after that date. 

Deletes the proposed changes to GS 143B-437.56(d), which added that for any eligible position located in a county designated as an attainment area, 70% of the annual grant is payable to the business and 30% is payable to the Industrial Development Fund Utility Account (Utility Account). Instead, adds new language providing that for any eligible position created for a high-yield project in years in which the business receives the enhanced percentage pursuant to subsection (a1) of the statute, irrespective of the location of the project, 95% of the annual grant approved for disbursement must be payable to the business and 5% must be payable to the Utility Account pursuant to GS 143B-437.61. Makes conforming changes to delete existing language exempting high-yield projects from the provisions of subsection (d) in years in which the business receives the enhanced percentage pursuant to subsection (a1) of the statute. Effective July 1, 2017, and applies to grants awarded on or after that date (previous changes were effective January 1, 2017, and applicable to awards made on or after that date).

Amends GS 143B-437.58(a), eliminating the minimum filing fee on the annual payroll report required of businesses awarded grants and instead sets the fee at .03% of an amount equal to the grant less the amount to be transferred pursuant to GS 143B-437.61 (currently, is the greater of $2,500 or .03% of an amount equal to the grant less the amount to be transferred). Effective July 1, 2017, and applies to annual payroll reports submitted on or after that date.

Amends GS 143B-437.62, extending the sunset of the Job Development Investment Grant Program to January 1, 2025 (was, January 1, 2019).

Deletes the proposed changes to GS 143B-437.72, amending the provisions that must be included in an agreement between a local government and a grantee business, and the State and local governments.

Part II. Development Tier Designations

Deletes the proposed changes to GS 143B-437.08 (Development tier designation). Amends subsection (b), which sets out the development factors which the Secretary of Commerce (Secretary) must annually assign to each county. Modifies the first factor to now be the ratio of employment to population for the civilian population aged 25 to 64  for the most recent five-year period for which data are available (was, the average rate of unemployment for the most recent 12 months for which data is available). Modifies the second factor to now be average annual wage for the most recent 12 months for which data is available (was, medium household income). Eliminates the third factor concerning growth in population. Maintains the fourth factor as it currently exists, concerning the adjusted assessed property value per capita. Makes conforming changes to subsection (d) concerning the data used in measuring the development factors. Adds new subsection (c1), requiring the Secretary to determine each county's performance against statewide values for the three development factors, as amended by this act. Requires the Secretary to separately designate any county with performance greater than all of the statewide indicators as a high-growth area, effective for the calendar year following the designation. Eliminates the adjustments set out in subsections (e) and (f), and makes conforming changes to subsection (c). Maintains the existing exceptions for two-county industrial parks, and certain multijurisdictional industrial parks set out in subsections (g) and (h). Eliminates the exception for Eco-Industrial Parks set out in subsection (j). Maintains the reporting requirements set out in subsection (k). Makes technical changes. 

Further amends GS 143B-472.127, concerning the administration of economic development grants or loans awarded by the Rural Infrastructure Authority. Makes organizational changes and adds to existing language, providing that local governments that receive grants or loans from the Rural Infrastructure Authority must be located in either a development tier one or tier two area, or a rural census tract in a development tier three area that is not a high-growth area (currently, does not require the rural census tract in a development tier three area to also not be a high-growth area to receive grants or loans under the program). 

Part III. Improve Project Impact

Modifies proposed GS 143B-437.07(d), requiring the Department of Commerce (Department) to create an annual report on the performance of each county underperforming the statewide value in one or more economic indicators set out in GS 143B-437.08 (was, required to create a plan for improvement of each county underperforming). Requires the Department to provide the applicable portion of the report to each county and offer assistance to each county upon request regarding improving performance relative to the statewide values identified. Makes changes to the annual progress report to be submitted to the Joint Legislative Oversight Committee on Economic Development and Global Engagement consistent with the modifications made to GS 143B-437.08. Makes conforming changes to delete the provision concerning required consultation and specific data to be used in the initial plan for improvement that is now eliminated.

Part IV. Rural Assistance 

Eliminates the previous provisions requiring the Department of Commerce (Department) to gather information and report for each Collaboration for Prosperity Zone as previously specified. Instead, directs the Department to study methods to support data-driven analysis and assistance for each Collaboration for Prosperity Zone and each labor market area within a Prosperity Zone, including publication of available facilities for commercial development and potential uses of the facilities. Requires the Department of Commerce to report to the Joint Legislative Economic Development and Global Engagement Oversight Committee by January 1, 2018.

Part V. Use of Economic Development Tiers and Rankings

Changes the date by which all entities must elect whether to continue or discontinue the use of the development tier designations from July 1, 2017, to January 1, 2018, for the specified purposes. Adds the Joint Legislative Economic Development and Global Engagement Oversight Committee to the entities to which any entity electing to discontinue using the tiers must report on the criteria designed to replace the tiers by October 1, 2017.

Adds a new provision requiring each entity electing to continue the use of the development tier designations to report by October 1, 2017, on the analysis that supports the continued use, including an analysis of how targeted programs match the use of the tier designations, to the Fiscal Research Division, the Joint Legislative Economic Development and Global Engagement Oversight Committee, and to their respective joint oversight committees.

Directs the Joint Legislative Economic Development and Global Engagement Oversight Committee to study and make legislative recommendations to the 2018 Regular Session of the General Assembly on seven specified matters, including studying the NCWorks Apprenticeship program.