GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1995

H	1 

HOUSE BILL 1061

Short Title:  Manufacturing Jobs Tax Credit.	(Public)

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Sponsors: Representatives Hunt; and G. Miller.

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Referred to:  Business and Labor, if favorable, Finance.

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May 15, 1995

A BILL TO BE ENTITLED
AN ACT TO PROVIDE A CORPORATE INCOME TAX CREDIT FOR RETAINING THREATENED MANUFACTURING JOBS IN DISTRESSED COUNTIES.
The General Assembly of North Carolina enacts:
Section 1.  Division I of Article 4 of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105-130.40A. Credit for retaining threatened manufacturing jobs in distressed county.
(a)	Definitions. – The following definitions apply in this section:
(1)	Full-time position. – Defined in G.S. 105-130.40.
(2)	Located. – A position is located in a county if at least fifty percent (50%) of the employee's duties are performed in the county or the employee is a resident of the county.
(3)	Severely distressed county. – A county designated as severely distressed pursuant to G.S. 105-130.40.
(b)	Credit. – A corporation engaged in the business of manufacturing in a severely distressed county whose business is threatened because its principal product has become obsolete or uncompetitive due to technological advances is allowed a credit against the tax imposed by this Division equal to twenty percent (20%) of the corporation's expenses during the taxable year necessary to retain its threatened jobs in the county.  For the purpose of this section, expenses to retain threatened jobs include the costs of purchasing and installing business equipment and making capital improvements to modify a manufacturing facility for production of a different or an upgraded product.  Expenses are necessary to retain threatened jobs if the corporation's failure to modify the manufacturing facility would cause the loss of at least 10 jobs in the county.
(c)	Eligibility. – A corporation is eligible for this credit only if the number of its full-time employees located in the county has not decreased during the three-year period preceding the year the expenses are incurred.
(d)	Installments; Condition. – The credit allowed under this section may not exceed two thousand eight hundred dollars ($2,800) for each threatened full-time job retained by the corporation in the distressed county.  The credit may not be taken in the taxable year in which the expenses are incurred.  Instead, the credit shall be taken in equal installments over the four years following the taxable year in which the expenses were incurred and shall be conditioned on the continued employment by the corporation in the county and in the State of the number of full-time employees the corporation had in the county and in the State during the taxable year the expenses were incurred.  If, in one of the four years in which the installment of a credit accrues, the number of the corporation's full-time employees in the county or in the State falls below this number, the credit expires and the corporation may not take any remaining installment of the credit.  The corporation may, however, take the portion of an installment that accrued in a previous year and was carried forward to the extent permitted under subsection (e) of this section.
(e)	Limit; Carryforward. – The credit allowed under this section may not exceed fifty percent (50%) of the amount of tax imposed by this Division for the taxable year reduced by the sum of all credits allowed, except payments of tax made by or on behalf of the taxpayer.  Any unused portion of the credit may be carried forward for the succeeding five taxable years.
(f)	Certification. – In order to qualify for this credit, the taxpayer must provide written certification from the Secretary of Commerce that it meets the conditions of this section and that it has incurred the expenses for which credit is claimed.  In addition, the taxpayer must provide any other documentation required by the Secretary of Revenue.
(g)	Documentation. – To obtain the certification of the Secretary of Commerce that it meets the conditions of this section and that it has incurred the expenses for which credit is claimed, a corporation must provide any information and documentation the Secretary of Commerce requires.  This information and documentation must be submitted to the Secretary of Commerce through the local economic development officer for the county in which the jobs are located.
Each year for four years after the expenses are incurred, the corporation shall provide the Secretary of Commerce with documentation establishing that it has met the continuing employment condition of subsection (d)	of this section.  The Secretary of Commerce shall notify the Secretary of Revenue immediately of any corporation that fails to establish that it meets this continuing employment condition.
Information submitted to the Secretary of Commerce pursuant to this subsection is a public record.  The Secretary of Commerce may adopt rules to implement this subsection."
Sec. 2.  This act is effective for taxable years beginning on or after January 1, 1995.