JUNE 18, 2004	ISSUE No. 7	2004 SHORT SESSION
Published every Friday during legislative sessions exclusively for NCCBI members

Senate sweetens economic incentives
bill with millions for rural infrastructure
The Senate took important steps this week to strengthen North Carolina’s economic development policies by agreeing to inject $20 million into the state’s incentive fund and by giving a nod to legislation that would grant 24,000 small businesses a break on their corporate income taxes. But the Senate set up a standoff with the House by insisting on also spending $20 million to bolster business growth in rural parts of the state through water and sewer improvements, an idea the House has rejected.

The Senate voted 26-16 Wednesday to pass H 1352 Emergency Funding for One NC & New and Expanding Industry Training (Owens) and returned the bill to the House for concurrence in the amendment adding the money for rural economic development projects. Amendment sponsor Sen. Walter Dalton (D-Rutherford) said the money is needed for water and sewer improvements in rural areas so they will be capable of serving new businesses. Many rural communities now are under water and sewer moratoriums, he noted.

H 1352 would immediately inject $20 million into the One North Carolina Fund, the so-called “governor’s walking around money” used to close important economic development deals. It also includes $4.1 million as an emergency appropriation to the state Community College System to fund the New and Expanding Industry worker training program.

”I regret economic development and the creation of jobs has turned into a partisan issue in the Senate,” NCCBI President Phil Kirk said, referring to the fact that nearly all of the opposition to the bill came from the Republican side of the aisle.

As economic development issues made headlines, Senate budget writers continued working at the committee level to draft the chamber’s spending plan for the coming fiscal year. No definite blueprint emerged this week, but Sen. Linda Garrou (D-Forsyth), said the Appropriations Committee, which she co-chairs, should have the bill out on Monday.

The Senate Finance Committee on Tuesday added the small-business tax break by adopting a committee substitute to a measure that passed the House last week, H 1414 2004 Appropriations Act-1. The concept is similar but more generous than the proposal advanced by Gov. Mike Easley that was ignored by the House. It would exempt the first $25,000 of new income from the 6.9 percent corporate income tax (Easley suggested $20,000) for companies that earn $100,000 or less a year. At profit levels between $100,000 and $200,000, the first $15,0000 would be tax exempt. Above $200,000 there would be no tax exemption. The House did not include anything like that in its budget.

The Senate budget will have to reflect the small-business tax break and possibly other measures that would impact the state’s bottom line.  A fiscal analysis discussed by the Finance Committee indicated the corporate income tax break would cost the state $14 million next fiscal year. “This is a very, very small step forward in the right direction,” Kirk said.

NCCBI’s reaction to the small-business corporate income tax break is that it’s a good first step but a better way to prime the economic pump would be to cut corporate income taxes across the board. The state’s 6.9 percent rate is the third-highest in the Southeast.

The committee substitute, renamed H 1414 Create New Jobs, Recruit New Businesses, also would broaden eligibility for the state’s R&D tax credit and give the state Treasurer more leeway to invest up to $100 million of state money in venture capital funds. NCCBI has previously expressed support for several provisions of the “new jobs” bill, including the proposed change to the R&D tax credit.

While the One North Carolina Fund is called the “governor’s walking around” money, technically the money is a grant to a local government to close the deal on a relocation or expansion that the local government is negotiating. Language in the legislation requires the local government or regional EDC to reach a detailed agreement with the business describing what the company must do (create a certain number of jobs, invest so much in infrastructure, for example) before the state will release the money. See the story on page 11 describing restrictions on the use of the grants.


House approves using bonds to finance healthcare facilities
The House gave third-reading approval Thursday to legislation that would allow the state to borrow money to build five major healthcare and health research facilities on UNC System campuses. The vote came after the House Finance and Appropriations committees earlier in the week amended and then favorably reported S 1098 Finance Cancer Center and Cardio Institute (Jenkins). The House version would fund construction of five such facilities while the Senate version envisioned funding only two -- a $180 million cancer research hospital at UNC-CH and a $60 million cardiovascular center at East Carolina University. The House bill adds $35 million for a bioinformatics center at UNC-Charlotte, $35 million for a Center for Health Promotion and Partnerships at UNC-Asheville, and $28 million for a stand-alone facility to house the new pharmacy school at Elizabeth City State University. Both the House and Senate versions would use certificates of participation – bonds that don’t require a vote of the people. A fiscal note attached to the House version of the bill said issuing $338 million in bonds to build the five facilities would require payment of $229.6 million in interest over the life of the bonds.


House panel delays vote on school opening bill
Approximately 200 people jammed a House Commerce Committee hearing Wednesday as it debated a bill to require local school systems to open no earlier than Aug 25 and end by June 10. The bill, H 1464 School Calendar Changes, sponsored by committee chair Rep. Connie Wilson (R-Mecklenburg) also would cut the number of teacher workdays during the school year from 20 to 10, but would not reduce teachers’ salaries. Dr. Jim Causby, executive director of the N.C. Association of School Administrators, spoke against the bill, saying that school calendar development is complex and should be left up to the elected school boards. Jo Ann Norris, associate executive director of the Public School Forum, advocated a study to address the myriad of questions that still surround the legislation. NCCBI also supports a study (see May 21 Bulletin).  NCCBI President Phil Kirk was present at the meeting and prepared to testify, but the committee adjourned before all speakers were allowed to speak. Representatives from NCAE and the parent advocacy group “Save our Summers” spoke in support of the bill. Further testimony is expected on the bill next week.         

ESC bill goes to Appropriations
The Senate Finance Committee gave a favorable report on Wednesday to a committee substitute for S 1388 - 2004 ESC Omnibus Act, sponsored by Sen. Martin Nesbitt (D-Buncombe). The bill, as approved, will move money from the special Employment Security Reserve Fund in order to fund positions at local ESC offices. The bill now goes to the Senate Appropriations Committee. The original bill would have deferred a 20 percent employment surcharge on unemployment insurance taxes (to replenish the now depleted $200 million fund) and replace it with a 2 percent offset to fund programs previously funded through the Worker Training Trust Fund. The committee substitute approved Wednesday was significantly different and merely asked for money to be diverted from the special fund to fund operation of local ESC offices.

Bill limiting CEO compensation defeated in committee
Legislation that would have limited the corporate deduction for employee compensation to an amount not to exceed 50 times the compensation paid to the corporation’s lowest paid full-time employee was soundly defeated in the House Finance Committee on Thursday. H 1655 Incentive for Higher Wages was sponsored by Rep. Paul Luebke (D-Durham). Several committee members expressed concern about the potential impact of the bill by making North Carolina look unfriendly to business and possibly driving businesses to locate in other states. Leslie Bevacqua Coman, NCCBI vice president of governmental affairs, testified against the bill, saying “Rep. Luebke says this is a symbolic bill, but we believe that it would be a symbol that North Carolina is not friendly to business.” She noted that we compete nationally and internationally to bring jobs to our state and this bill could hurt our competitiveness with other states. “We believe in a free enterprise system and this is an issue that should be left up to shareholders,” Bevacqua Coman said.


Legislative Actions

 By a vote of 115-0, the House gave final approval Tuesday to H 1413 Tax Credit For Long-Term Care Insurance (Nye), a measure that extends the Jan. 1, 2004, sunset on the tax credit through Jan. 1, 2008. The measure now goes to the Senate.

  The House Environment and Natural Resources Committee on Tuesday favorably reported S 1219 Dry Cleaning Solvent Cleanup Act Amendments.
 

House Finance delays action on bill to cap tax on motor fuels

The House Finance Committee on Thursday referred to a subcommittee a bill that would cap the state tax on a gallon of gasoline at 24.3 cents. The measure, H 1661 Cap Gas Tax Variable Rate, would freeze the variable wholesale component of the state tax at 6.8 cents per gallon. The state reviews and revises its tax on gasoline every six months. It’s set to rise to 7.1 cents per gallon on July 1. NCCBI opposes this legislation.

The committee action came after several questions were raised about the bill. NCCBI opposes the bill as does NCGo!, a diverse statewide group of businesses and individuals who are concerned about traffic congestion and transportation funding. NCCBI is a member of NCGo! along with local chambers of commerce, regional transit systems, construction industry associations and consulting engineers.

Speaking against the bill were Christie Barbee, executive director of the Carolina Asphalt Pavement Association, Betsy Bailey, executive director of the N.C. Public Transportation Association and Barry Jenkins, who spoke on behalf of the Carolinas Associated General Contractors Association and NC Go!.

The speakers said the proposed legislation could have a potential negative long-term impact on the Highway Fund and Highway Trust Fund. It is estimated that the savings at the pump would translate into 2 to 3 cents for every 10 gallons of gas. However, the Highway Fund would sustain a loss of approximately $16 million. That would cut into transportation improvements for the state.  Doug Howey, director of government affairs with the N.C. Petroleum Marketers Association, spoke in support of the bill. The state gas tax – officially know as the motor fuel excise tax because it applies to both gasoline and No. 2 diesel fuel -- is composed of a flat rate of 17.5 cents per gallon plus a variable wholesale component. The wholesale component is either 3.5 cents per gallon or 7 percent of the average wholesale price, whichever is greater. When the tax was last adjusted on Jan. 1, it rose from 24.2 to 24.3 cents per gallon, based on an average wholesale price per gallon of 97 cents per gallon.


Virginia raising taxes $1.4 billion over next two years
The first major tax increase in Virginia since 1986 – a package that will raise almost $1.4 billion in revenue over the next two years – was signed into law by Gov. Mark Warner on June 9 and takes effect July 1 with the start of the state’s new fiscal year. The tax package had been debated for weeks during a special session of the Virginia General Assembly and cleared the way for a final compromise on the state budget. The major changes involve the sales tax, income tax, cigarette tax and deed recordation fees. The Virginia Chamber of Commerce did not object to the revenue-raising plan.

Most of the new revenue will result from a half-percent increase in the state sales tax to 4 percent, although the sales tax on food items will drop by half a percent. Also, the plan raises the state cigarette tax – which at 2.5 cents per pack was the lowest in the nation – to 30 cents. The sales tax exemption for certain public service corporations was eliminated.

Warner, a Democrat, inherited a $6 billion budget deficit when he took office in 2002. In November 2003 he launched a tax reform plan that he touted at 46 town hall meetings statewide, making the case that a rebounding state economy would not generate sufficient revenue to meet growing obligations in education, health care, public safety and other core services. That was followed by a special session of the Republican-controlled General Assembly, which sat deadlocked for 105 days over the issue of raising taxes. The impasse broke last month when Republican lawmakers agreed to accept Warner’s plan.

The bundle of higher taxes on sales, tobacco and real-estate deeds - coupled with anticipated savings from a freeze on the popular car-tax rollback - is expected to generate roughly $1.6 billion over the next two years. The state will directly collect $979 million; funnel another $377 million in new sales-tax revenues for local schools; and save an estimated $277 million by holding the car-tax phase-out to 70 percent of the first $20,000 of value on personal motor vehicle.


Names in the News

Butterfield, Dority face off to replace Ballance
Former state Supreme Court Justice G.K. Butterfield, a Democrat, and Greg Dority, a Republican, will face each other on the ballot July 20 to serve out the remaining months of the term of Cong. Frank Ballance (D-1st). Gov. Mike Easley decided to hold the special election to fill the congressional seat as part of the state primary balloting to save the $500,000 it would cost to hold the election separately. Butterfield and Dority will be on ballots throughout the First District, which covers northeastern North Carolina. Meeting at the Greene County Courthouse in Snow Hill, Democrats chose Butterfield over Elizabeth City businessman Sam Davis III. Dority lost to Ballance in 2002.

 Gov. Mike Easley reappointed Dr. J. Kenneth Chance of New Bern, Dr. James “Jim” B. Congleton III of New Bern, Anne L. Johnson of Raleigh, Carol B. Kemp of New Bern, Karen S. Rand of Fayetteville, John A.J. Ward of New Bern and Joseph E. Zaytoun of Cary to the Tryon Palace Commission.

 Gov. Mike Easley appointed Mark C. Cramer of Charlotte, Sanford T. Cross of Raleigh, Charles E. Knox Jr. of Cornelius, Dale McKeel of Durham, Brent McKinney of Greensboro, Aaron W. Plyler of Monroe, Wayne Troutman of Concord and Stephen P. Zelnak Jr. of Raleigh to the Blue Ribbon Commission to Study Solutions to North Carolina’s Urban Transportation Needs.  The commission studies the transportation needs of urban areas in North Carolina. It studies innovative financing approaches to alleviate urban congestion, local revenue options and other transportation issues. There are 27 members on the commission. The governor appoints 15 members.

 Five Research Triangle leaders have been awarded Eisenhower Fellowships: Jean Davis of Empire Properties, Rosiland Fuse-Hall of NCCU, Kathryn Higgins of Blue Cross and Blue Shield of NC, Joan Myers of NCEITA, and Debra Tyler-Horton of the NC Justice Center.

 The Hon. John M. Engler, former three-term governor of Michigan, was selected by the executive committee of the National Association of Manufacturers (NAM) as the next president and CEO of the nation’s largest industrial trade association. He formally assumes the post in October after the retirement of Jerry Jasinowski. NCCBI is the state affiliate of NAM.

 Haley Haynes Montgomery, a Hendersonville native and former Asheville attorney, was promoted from general counsel to deputy secretary by Secretary of State Elaine F. Marshall. Montgomery, 36, will oversee several major divisions of the Secretary of State’s office, including its Corporations and Uniform Commercial Code sections. Montgomery had been serving as the department’s General Counsel since 2002. Montgomery worked as a private attorney in Asheville prior to joining the department. She is also a former public defender in both Asheville and Fayetteville. She is a graduate of N.C. State University and the UNC Chapel Hill School of Law.


Economic Development

Charlotte sees ‘good news in otherwise tough times’
Corporate investments in the Charlotte region reached nearly $1.9 billion during the first three quarters of the 2003-04 fiscal year, an increase of $844 million during the previous period, according to data from the North and South Carolina departments of commerce analyzed by the Charlotte Regional Partnership. Job creation also remained steady, with the region adding nearly 6,000 new jobs, the group reported.

Among other growing sectors of the Charlotte economy, the film industry pumped $128 million into cash registers across the region, up $5 million over the previous period. Paul G. Grube, regional president for Wachovia Corp. and the outgoing chairman of the Charlotte Regional Partnership, said, “We’ve been able to remain steady even though the region is still in transition and the Carolina economy is lagging national indicators that point to recovery. This is good news in otherwise tough times.”

The data was released at the Charlotte Regional Partnership’s annual meeting on June 15. Michael G. Mayer, senior vice president and commercial market executive for Bank of America’s Southern Piedmont region, was installed as the partnership’s new chairman. The partnership, one of seven regional economic development organizations in the state, serves the 16-county region around Charlotte, including a few counties in South Carolina.


Study determines 46,000 people work in child care
North Carolina’s child care industry directly supports the employment of over 46,000 people and generates over $1.5 billion in gross receipts, according to a study released Wednesday by North Carolina Partnership for Children Inc. and the National Economic Development and Law Center (NEDLC). To put that in perspective, 46,000 people is about the same as the number of elementary school teachers in North Carolina, and $1.5 billion is about equivalent to the revenue generated by the scientific research and development and wireless telecommunications industries.

“The child care industry is a significant part of North Carolina’s economic infrastructure,” said Ashley Thrift, chairman of the Partnership for Children. “These small businesses educate and care for our children as well as contribute to the economic well being of the state.”

The study, which was the first of its kind in North Carolina, was performed by the NEDLC and was paid for by a grant from the W.K. Kellogg Foundation. Researchers from NEDLC assessed the direct and indirect impact the child care industry on North Carolina’s economy. The study examined licensed and regulated care across the state. Child care that is legal but is not licensed was not included in the study.

“The findings presented here today demonstrate the importance of accessible high quality care to North Carolina’s economic development future,” said NEDLC Vice President Carolyn D. Hayden. “In measuring the economic impact of the industry, NEDLC takes a conservative approach to its research, assessing direct efforts without using industry linkages, or multipliers. What we found was that the direct efforts, on their own, were very impressive,” she added.

The 48-page report was released to about 150 attendees. North Carolina business and policy leaders joined with representatives of the Partnership for Children to discuss this study. Panel members included state Commerce Secretary Jim Fain; Barry Eveland, IBM senior state executive for North Carolina and chair of NCCBI; Jim Goodmon, president and CEO of Capitol Broadcasting Co.; and Andrea Harris, president of the North Carolina Center for Minority Economic Development.


Raleigh, Laurinburg, Land-of-Sky get brownfield grants
Communities in 42 states and Puerto Rico – including three North Carolina communities -- will share more than $75 million in EPA brownfields grants to help revitalize former industrial and commercial sites, turning them from problem properties to productive community use. In addition to industrial and commercial redevelopment, brownfields approaches have included the conversion of industrial waterfronts to river-front parks, landfills to golf courses, and rail corridors to recreational trails. EPA's brownfields assistance has leveraged more than $5.8 billion in private investment, helped create more than 27,000 jobs and resulted in the assessment of more than 4,500 properties.

Raleigh received a $400,000 grant -- $200,000 for hazardous substances and $200,000 for petroleum contamination. The city will use the money to identify ways to clean up contamination at 1,600 potential brownfield sites in the downtown area and in some adjacent residential neighborhoods. The city plans to target the top 100 sites that could provide strategic locations for business and service redevelopment projects during the next 10 years. Cleanup of these brownfields is expected to create jobs, increase the community's tax base, and make available clean, blight-free properties to provide greenspace and support economic development.

Laurinburg received a $200,000 grant -- $100,000 for hazardous substances and $100,000 for petroleum. The money will be used to clean up petroleum and hazardous substances contamination on the 5.3-acre site of the former Scotland Memorial Hospital, which closed 20 years ago. The city plans to eliminate environmental concerns about the property so that it can be redeveloped in cooperation with the Richmond Community College into a regional vocational training facility with a public park and greenspace. A site investigation carried out under a brownfields assessment grant revealed three areas of concern: a former underground storage tank area with two 15,000-gallon tanks that were used for fuel oil and one of unknown size that held diesel, combustion-related contaminants around the former incinerator, and asbestos within the hospital building itself.

The Land-of-Sky Regional Council of Governments received a $400,000 grant -- $200,000 for hazardous substances and$200,000 for petroleum contamination. The money will be used to identify, characterize, and prioritize sites; perform Phase I and II site assessments; develop cleanup plans; conduct community involvement activities; and assist local officials with health monitoring. The council anticipates assessing up to six sites. In addition, the EPA awarded the Land-of-Sky Regional Council of Governments a $1 million grant that will be used to create a revolving loan fund available for local governments in the four-county region of Western North Carolina. The Brownfields program encourages redevelopment of America's estimated 450,000 abandoned and contaminated waste sites. Since the beginning of the Brownfields program, EPA has awarded 554 assessment grants totaling over $150 million, 171 revolving loan fund grants totaling over $145 million, and 66 cleanup grants totaling $11.4 million.


State Government

DOT board awards $27 million in highway contracts
The N.C. Board of Transportation awarded contracts totaling $27.1 million for highway improvements in 10 counties during its June meeting. The contracts were for projects in Ashe, Cabarrus, Caswell, Cleveland, Granville, Guilford, Randolph, Robeson, Vance and Wayne counties. Included were contracts to:

Build the Henderson Western Outer Loop, a 2.5-mile, four-lane divided highway, from Ruin Creek Road to County Home Road in Vance County. The contract went to Key Constructors Inc. of Clarksville, Va., for $8.4 million. Work is expected to begin June 28 with completion scheduled in December 2006.

Resurface 18.4 miles of N.C. 96 from U.S. 158 Business just north of Oxford to the Virginia state line in Granville County. The contract went to S.T. Wooten Corp. of Wilson for $4.9 million. Work is expected to begin June 28 with completion scheduled in November.

Build a 1.2-mile section of the Concord-Kannapolis Westside Bypass from Weddington Road to Grand Canyon Road in Cabarrus County. The contract went to Triangle Grading & Paving Inc. of Burlington for $7.5 million. Work is expected to begin June 28 with completion scheduled in July 2006.

The DOT will hold a workshop Tuesday, June 22, on proposed improvements to the I-40/I-26/I-240 interchange southwest of Asheville. The workshop will be held from 4:00 p.m. to 7:00 p.m. at the National Guard Armory, 75 Shelburne Road (off of Brevard Road near I-240) in Asheville.  NCDOT proposes to provide the missing interstate connections between the future I-26 and I-40. Improvements to the interchange will add these connections as well as relieve existing congestion and improve safety through this area.

General Fund revenues up $500 million from year ago
North Carolina collected $501.1 million more in tax and non-tax revenue through 10 months of its current fiscal year than it did in the same period last year, according to complete but unaudited figures released by the State Controller’s office. About $89.7 million of that came in the month of April alone. Individual income tax collections were particularly strong in April, a crucial month for the state because it reflects year-end tax filings. However, it’s worth noting that, year-to-date, individual income tax collections are below last year’s level, at $6.38 billion vs. $7.43 billion. However, the state is in a much stronger cash position now than a year ago. The state’s unreserved fund balance was $728.8 million at this point last fiscal year, and that’s now swelled to $1,139.5 billion currently, almost $411 million better than a year ago.


State joins program to reduce air pollution from diesel trucks
North Carolina, South Carolina and Georgia have been awarded a $1.5 million grant to mount a program to reduce air pollution from diesel trucks. The National Association of State Energy Offices awarded the grant, which will fund much of the $3.5 million cost for installing 150 electrified parking spaces at truck stops, giving truckers access to heat, air conditioning, internet and telecommunications without idling their diesel engines. The remaining cost for installing the electrified parking spaces will be provided by IdleAire Technologies Corp., which produces the Advanced Travel Center Electrification system. In North Carolina, 50 electrified parking spaces will be installed at the Petro Stopping Center on Interstate 85/40 in Mebane. Fifth other spaces will be installed at a truck stop in Anderson, S.C; and 50 more at one in Newnan, Ga. Truckers must purchase a $10 window adapter and pay $1.25 per hour to use the electrified spaces, but they could save about $3,000 a year in fuel and other costs from not idling their trucks.

Legal Beat

Court affirms narrow role of depression in workers’ comp
The N.C. Court of Appeals this week upheld a decision by the state Industrial Commission that narrowed the scope of how and when depression can be considered a contributing factor in workers’ comp cases. At issue was the case of a Maola Mike Co. worker who injured his back on the job in November 1997. The company paid weekly worker’s comp benefits pf $222.40 until doctors released the man to return to work in March 1998. But within an hour or two of returning to work, the worker claimed he had hurt his back again. He claimed the first injury caused him to suffer depression, which in turn caused the second injury. A series of doctors and psychiatrists examined the claimant and none found any connection between the man’s depression and either of the workplace injuries. When the Industrial Commission denied additional workers’ comp benefits for the second alleged injury, he took the case to the Court of Appeals, which affirmed the commission’s decision. The opinion was written by Judge Robin Hudson with concurrences from judges John Tyson and Sanford Steelman. No. COA 03-294.

Washington Watch

Federal regulators issued over 4,000 new rules in 2003
Federal regulatory agencies issued an astonishing 4,148 new rules in 2003, a number that pushed the Federal Register to 71,269 pages, the Cato Institute said in a report Wednesday. In 2004, there are an additional 4,266 new rules in the regulatory pipeline, the conservative think tank said, including 127 that are deemed “economically significant” because they would have an economic impact of at least $100 million. The Cato Institute report estimated that the total cost of federal regulations is in excess of $800 billion – an amount that exceeds the total pre-tax profits of U.S. companies and more than the entire GDP of Canada.


Fish stocks rebounding, NOAA says in report to Congress
Considerable progress was made last year in rebuilding fish stocks to healthy levels, the National Oceanic and Atmospheric Administration (NOAA), said in a report to Congress on Wednesday. In 2003, four fish stocks were fully rebuilt, a record ten species were removed from the list of overfished stocks, and overfishing practices were stopped for five species, NOAA, which is an agency of the Department of Commerce, said in the report. "The American public can feel confident that U.S. fisheries are becoming more sustainable each year as we rebuild fish stocks that were once overfished," said retired Navy Vice Adm. Conrad C. Lautenbacher, undersecretary of commerce for oceans and atmosphere, and NOAA administrator. NOAA said the agency's partnerships with the regional fishery management councils, commercial and recreational fishermen, environmental groups and the states are working to ensure long-term healthy ocean ecosystems off America's coasts. Of the 894 federally managed fish stocks, 76 are classified as overfished, and 60 are experiencing overfishing. Almost all the overfished stocks are rebuilding under fishery management plans, and plans are under development for the few that are not.


Rules governing economic incentives
grants from the One North Carolina fund
The following language is taken from legislation bending in the General Assembly to inject $20 million into the state’s primary economic incentive fund.

Moneys in the One North Carolina Fund may be allocated only to local governments for use in connection with securing commitments for the recruitment, expansion, or retention of new and existing businesses. Moneys in the One North Carolina Fund shall be used for the following purposes only:
(1) Installation or purchase of equipment.
(2) Structural repairs, improvements, or renovations to existing buildings to be used for expansion.
(3) Construction of or improvements to new or existing water, sewer, gas, or electric utility distribution lines or equipment for existing buildings.
(4) Construction of or improvements to new or existing water, sewer, gas, or electric utility distribution lines or equipment for new or proposed buildings to be used for manufacturing and industrial operations.
(5) Any other purposes specifically provided by an act of the General Assembly.

Funds may be disbursed from the One North Carolina Fund only in accordance with agreements entered into between the State and one or more local governments and between the local government and a grantee business. An agreement between a local government and a grantee business must contain the following provisions:
(1) A commitment to create or retain a specified number of jobs within a specified salary range at a specific location and commitments regarding the time period in which the jobs will be created or retained and the minimum time period for which the jobs must be maintained.
(2) A commitment to provide proof satisfactory to the local government and the State of new jobs created or existing jobs retained and the salary level of those jobs.
(3) A provision that funds received under the agreement may be used only for a purpose specified in G.S. 143B-437.71(b).
(4) A provision allowing the State or the local government to inspect all records of the business that may be used to confirm compliance with the agreement or with the requirements of this Part.
(5) A provision establishing the method for determining compliance with the agreement.
(6) A provision establishing a schedule for disbursement of funds under the agreement that allows disbursement of funds only in proportion to the amount of performance completed under the agreement.
(7) A provision requiring recapture of grant funds if a business subsequently fails to comply with the terms of the agreement.

An agreement between the State and one or more local governments shall contain the following provisions:
(1) A commitment on the part of the local government to match the funds allocated by the State. A local match may include cash, fee waivers, in-kind services, the donation of assets, the provision of infrastructure, or a combination of these.
(2) A provision requiring the local government to recapture any funds to which the local government is entitled under the company performance agreement.
(3) A provision requiring the local government to reimburse the State for any funds improperly disbursed or funds recaptured by the local government.
(4) A provision allowing the State access to all records possessed by the local government necessary to ensure compliance with the company performance agreement.
(5) A provision establishing a schedule for the disbursement of funds from the One North Carolina Fund to the local government that reflects the disbursement schedule established in the company performance agreement.