North Carolina § 143B-437 - 57. Community economic development agreement.

§ 143B-437. 57. Community economic development agreement.

Terms. - Each community economic development agreement shall include at least the following: 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. The term of the grant and the criteria used to determine the first year for which the grant may be claimed. The number of eligible positions that are subjects of the grant and a description of those positions and the location of those positions. The amount of the grant based on a percentage of withholdings. A method for determining the number of new employees hired during a grant year. 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. A requirement that the business report to the Committee annually the aggregate amount of withholdings during the grant year. A provision permitting an audit of the payroll records of the business by the Committee from time to time as the Committee considers necessary. A provision that requires the Committee to reduce the amount or term of a grant pursuant to G.S. 143B-437.59. A provision that requires the business to maintain operations at the project location or another location approved by the Committee for at least one hundred fifty percent (150%) of the term of the grant and a provision to require the Committee to recapture an appropriate portion of the grant if the business does not remain at the site for the required term. 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. A provision establishing the conditions under which the grant agreement may be terminated, in addition to those under G.S. 143B-437.59, and under which grant funds may be recaptured by the Committee. A provision stating that unless the agreement is terminated pursuant to G.S. 143B-437.59, the agreement, including any amendments pursuant to G.S. 143B-437.59, is binding and constitutes a continuing contractual obligation of the State and the business. 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. 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. A provision that prohibits the business from manipulating or attempting to manipulate employee withholdings with the purpose of increasing the amount of the grant and that requires the Committee to terminate the agreement and take action to recapture grant funds if the Committee finds that the business has manipulated or attempted to manipulate withholdings with the purpose of increasing the amount of the grant. A provision requiring that the business engage in fair employment practices as required by State and federal law and a provision encouraging the business to use small contractors, minority contractors, physically handicapped contractors, and women contractors whenever practicable in the conduct of its business. A provision encouraging the business to hire North Carolina residents. A provision encouraging the business to use the North Carolina State Ports. A provision stating that the State is not obligated to make any annual grant payment unless and until the State has received withholdings from the business in an amount that exceeds the amount of the grant payment. A provision describing the manner in which the amount of a grant will be measured and administered to ensure compliance with the provisions of G.S. 143B-437.52(c). A provision stating that any recapture of a grant and any reduction in the amount of the grant or the term of the agreement must, at a minimum, be proportional to the failure to comply measured relative to the condition or criterion with respect to which the failure occurred. A provision stating that any disputes over interpretation of the agreement shall be submitted to binding arbitration. 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 the limitation contained in subdivision (f) of G.S. 143B-437.56 in any year. A provision stating that the business agrees to submit to an audit at any time that the Committee requires one. A provision encouraging the business to contract with small businesses headquartered in the State for goods and services. Approval of Attorney General. - The Attorney General shall review the terms of all proposed agreements entered into by the Committee. To be effective against the State, an agreement entered into under this Part must be signed personally by the Attorney General. Agreement Binding. - A community economic development agreement is a binding obligation of the State and is not subject to State funds being appropriated by the General Assembly. History (2002-172, s. 2.1(a); 2003-416, s. 2; 2004-124, ss. 32G.1(f), 32G.1(g); 2006-168, s. 1.6; 2006-264, s. 69(e); 2009-394, s. 3; 2015-259, s. 1(f); 2015-264, s. 91(a); 2018-5, s. 15.1(e); 2018-137, s. 2.) Editor's Note. - Session Laws 2004-124, s. 32G.1(h), provides: "It is the intent of the General Assembly that the benefits of a robust and growing economy be shared by all citizens of the State regardless of their geographic location or whether they live in urban, suburban, or rural areas. In striving for balanced economic development throughout the State, the General Assembly has designed a system to identify areas of the State that are most in need of additional economic development and has designed economic development programs to provide for relatively stronger incentives in those areas. In keeping with this policy of balanced economic development, the General Assembly strongly encourages the Department of Commerce and the Economic Investment Committee to give priority consideration under the Job Development Investment Grant program to projects that are located or will locate in less economically developed areas." Session Laws 2004-124, s. 32G.1(j), provides that s. 32G.1(f) is effective on and after October 31, 2002, while s. 32G.1(g) is effective July 20, 2004, and applies to agreements entered into on or after that date. Session Laws 2004-124, s. 1.2, provides: "This act shall be known as the 'Current Operations and Capital Improvements Appropriations Act of 2004'." Session Laws 2004-124, s. 33.5, is a severability clause. Session Laws 2006-264, s. 69(e) was repealed, pursuant to the terms of Session Laws 2006-264, s. 69(g), upon Session Laws 2006-168, which amended this section, becoming law. Session Laws 2015-259, s. 1(i), provides: "The Department of Commerce shall study the factors that have contributed to the termination of grants awarded pursuant to Part 2G of Article 10 of Chapter 143B of the General Statutes. In conducting the study required by this subsection, the Department shall examine the efforts of other states that have permitted similar economic development programs to incent businesses to create jobs for the purpose of determining best practices for remediating underperformance of participating businesses in order to lower the incidence of community economic development agreements under G.S. 143B-437.57 ending in termination. The Department shall submit the report to the House of Representatives Finance Committee, the Senate Finance Committee, the House of Representatives Committee on Agriculture and Natural and Economic Resources, the Senate Appropriations Committee on Natural and Economic Resources, and the Fiscal Research Division no later than March 1, 2016." Session Laws 2015-259, s. 1(j), as amended by Session Laws 2015-264, s. 91(a), made the amendment by Session Laws 2015-259, s. 1(f), effective October 1, 2015, and applicable to awards made under Part 2G of Article 10 of Chapter 143B of the General Statutes on or after that date. Session Laws 2017-57, s. 15.15A(d), provides: "(d) If the Office of Budget and Management and the Department of Commerce certify in writing to the Director of the Budget that the conditions set forth for infrastructure development of a site for the purpose of securing a community economic development agreement under G.S. 143B-437.57 for a transformative project, as defined in G.S. 143B-437.51, have been met, then the Director of the Budget may use the Savings Reserve Account in the General Fund to implement this section. To implement this section, the State Controller may transfer up to fifty million dollars ($50,000,000) to a reserve in the Office of State Budget and Management for each transformative project for uses consistent with the Site Infrastructure Development Fund established pursuant to G.S. 143B-437.02, and such funds are hereby appropriated for this purpose. Under no circumstances shall the total amount that may be transferred pursuant to this section exceed eighty million dollars ($80,000,000). If it is not necessary to expend all of these funds in accordance with this section, the State Controller shall transfer the remaining funds to the Savings Reserve Account. The authority to transfer amounts pursuant to this subsection expires June 30, 2019." Session Laws 2018-5, s. 15.3(a), effective June 12, 2018, repealed Session Laws 2017-57, s. 15.15A(d). Session Laws 2017-57, s. 1.1, provides: "This act shall be known as the 'Current Operations Appropriations Act of 2017.'" Session Laws 2017-57, s. 39.4, provides: "Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2017-2019 fiscal biennium, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2017-2019 fiscal biennium." Session Laws 2017-57, s. 39.6, is a severability clause. Session Laws 2018-5, s. 15.1(g), made the amendment of subsection (a) of this section by Session Laws 2018-5, s. 15.1(e), effective June 12, 2018, and applicable to agreements executed on or after that date. Session Laws 2018-5, s. 1.1, provides: "This act shall be known as the 'Current Operations Appropriations Act of 2018.'" Session Laws 2018-5, s. 39.4, provides: "Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2018-2019 fiscal year, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2018-2019 fiscal year." Session Laws 2018-5, s. 39.7, is a severability clause. Effect of Amendments. - Session Laws 2004-124, s. 32G.1(f) and (g), added subdivision (a)(25) and subsection (c). See editor's note for effective dates and applicability. Session Laws 2006-168, s. 1.6, effective July 27, 2006, substituted "during the base period" for "in the base years and later years" at the end of subdivision (a)(1), substituted "period" for "years" at the end of subdivision (a)(11), and inserted "including any amount transferred to the Utility Account pursuant to G.S. 143B-437.61" in subdivision (a)(23). Session Laws 2009-394, s. 3, effective July 31, 2009, in subdivision (a)(9), substituted "reduce the amount or term of a grant" for "amend an agreement"; in subdivision (a)(13), deleted "amended or" preceding "terminated pursuant" and inserted "including any amendments pursuant to G.S. 143B-437.59"; in subdivision (a)(14), substituted "to grant reduction, amendment, or" for "to amendment or"; and in subdivision (a)(21), substituted "reduction in" for "amendment to an agreement reducing" near the middle. Session Laws 2015-259, s. 1(f), in subsection (a), substituted "require the Committee to recapture an appropriate portion of the grant if the business" for "permit the Committee to recapture all or part of the grant at its discretion if the business" in subdivision (10), and substituted "the greater of the level of employment on the date of the application or the level of employment on the date of the award" for "the level of the year immediately preceding the base period" in subdivision (11). For effective date and applicability, see Editor's note. Session Laws 2018-5, s. 15.1(e), in subdivision (a)(6), inserted "and, if applicable, expansion positions"; added subdivision (a)(14a); and in subdivision (a)(23), substituted "For projects other than transformative projects, a provision" for "A provision." For effective date and applicability, see editor's note. Session Laws 2018-137, s. 2, effective December 3, 2018, in subdivision (a)(23), substituted "the limitation contained in subdivision (f) of G.S. 143B-437.56" for "six thousand five hundred dollars ($6,500)" following "may not exceed."