NC House Approves New Package of Economic Development Tools

The North Carolina House this week approved legislation aimed at improving the state’s ability to attract new economic development and jobs, but the bill could face an uphill fight in the Senate.

HB 117, the ‘NC Competes Act,’ enhances the state’s job recruitment toolbox by doubling the cap on the existing Job Development Investment Grant (JDIG) program to $45 million for a two-year period, establishing a new, $20 million infrastructure grant program, expanding existing electricity tax credits for data centers, and modifying the state’s tax code to allow corporations investing $1 billion or more in high-poverty counties to use a ‘single-sales factor’ in their tax liability calculations.

The legislation also extends for 4 years the sales tax cap on jet fuel purchases in the state,a priority for American Airlines and the Charlotte Chamber of Commerce. That cap is set to expire at the end of 2015.

Governor Pat McCrory has asked the General Assembly to ‘fast-track’ approval of the bill, and during floor debate, Representative Bob Steinburg (R-Edenton), hinted the state was in the process of negotiating with “as many as three” automobile manufacturers who were looking at sites in the Rocky Mount area for a new plant.

While the bill was approved Thursday by a comfortable 88-29 margin, opponents argued that the state was picking economic ‘winners and losers’, and pointed to data showing that more than 80 percent of recent JDIG grants have gone to Wake and Mecklenburg counties.

REBIC, NAIOP, and other industry trade groups support the legislation, and will advocate for its passage in the Senate, where significant opposition is expected. The Senate Finance Committee has already begun debate over the JDIG program (renamed the ‘Job Growth Reimbursement Opportunities – People Program’, in the House bill), questioning its effectiveness in attracting new companies to the state.

Thanks to Mecklenburg County House members Charles Jeter, John Bradford, Rob Bryan, and Rodney Moore, for their sponsorship and support of this important legislation.

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