Bill Summaries: H795 (2017-2018 Session)

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  • Summary date: Jun 15 2017 - View summary

    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. 


  • Summary date: Apr 12 2017 - View summary

    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 and (2) 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. 

    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. 

    Amends GS 143B-437.56 by adding 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). For any position located in a development tier three area that is not designated as an attainment area, 75% of the grant is payable to the business and 25% is payable to the Utility Account. 

    The above portions of Part II are effective January 1, 2017.

    Amends GS 143B-437.52(c) to limit the application of the existing maximum amount of grant liability to grants awarded for projects that are not wholly located in development tier one areas. Makes conforming changes.

    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 $2 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.

    Amends 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 that 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 Joint Oversight Committee on Economic Development and Global Engagement 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-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.

    Requires all entities to, by July 1, 2017, elect whether to discontinue the use of the development tier designations for all purposes and programs, including taxes, the North Carolina Development Farmland Preservation Trust Fund, the Spay and Neuter Program, the Abandoned Manufactured Home Cleanup Grants Program, the State Wastewater Reserve, the State Drinking Water Reserve, the Public Safety Assistance Points Grant Program, Oral Health Preventive Services, Medication Assistance, Qualified Allocation Plan for Low‑Income Housing Tax Credits, and the Strategic Prioritization Funding Plan for Regional Impact Transportation Investment Projects. This section applies to: (1) the Department of Agriculture and Consumer Services; (2) the Department of Environmental Quality; (3) the Department of Information Technology; (4) the Department of Health and Human Services; (5) the North Carolina Housing Finance Agency; (6) the Department of Transportation; and (7) the Department of Revenue.

    Requires each entity that decides to discontinue the use of the development tier designations to independently develop criteria designed to achieve each program's objectives to be used in place of development tier designations and report by October 1, 2017, on the developed criteria to the Fiscal Research Division and to their respective joint oversight committees. Also requires an entity electing to discontinue use of the development tier designations to annually update, as of January 1 of each calendar year, usage of the development tier designations to those published latest by the Department of Commerce until the developed replacement criteria are enacted into law.

    Part VII.

    Unless otherwise indicated, effective when the act becomes law.