Outside of Rowan

Article 3-I replaces Bill Lee Credits

In July 2006, the NC General Assembly passed legislation (House Bill 2170) that created a new tax credit program, Article 3-I Credits. Article 3-I Credits should not be confused with (Bill) William S. Lee Credits. Although these tax credit programs are similar, they are not the same. Article 3-I is not a revision to the Bill Lee Act; it replaces the Bill Lee Act effective January 1, 2007. The distinction is subtle, but significant. The Bill Lee Act five-tier County designation system will be replaced with a three-tier system. Click here for a full analysis of the Credits for Growing Businesses (Article 3-I Credits)

Article 3-I provides three types of tax credits to eligible taxpayers that undertake qualifying activities in North Carolina:
1) Credit for Creating Jobs
2) Credit for Investing in Business Property
3) Credit for Investment in Real Property (tier 1 only).
These credits may be combined to offset up to 50% of the taxpayer’s state income and franchise tax liability, and unused credits may be carried forward for up to five years (15-year carry-forwards apply to the Credit for Investing in Real Property and 20-year carry-forwards exist for taxpayers that invest at least $150 million over a two-year period).

In general terms, Lee Credits are repealed for business activities that occur on or after January 1, 2007 and Article 3-I Credits take effect for taxable years beginning on or after January 1, 2007. However, taxpayers will have the option, after signing a letter of commitment with the NC Department of Commerce, to utilize Lee Act Credits in place of Article 3-I Credits for qualifying activity that takes place at a specific site in 2007. If the taxpayer intends to claim Lee Credits for 2007 activity at more than one site, it must sign a separate letter of commitment for each site. Taxpayers should carefully review and understand the differences between Lee Credits and Article 3-I Credits before electing to claim Lee Act Credits for 2007 activity.

Thanks to the NC Department of Commerce for preparing the Credits document.

IEDC Conference

Randy Harrell attended the Annual Conference of the International Economic Development Council (IEDC) in New York City September 16- 19th. In addition to Randy’s responsibilities as Executive Director of the Salisbury- Rowan Economic Development Commission, he presently serves as the Chairman of the Charlotte Regional Partnership’s (CRP) Economic Developer Advisory Committee, on the Executive Board of the CRP, is a Past President of the North Carolina Economic Developers Association and a former Governor appointee to the North Carolina Economic Development Board. While attending the conference, Randy met with site selection consultants, attended educational seminars and workshops and networked with fellow economic developers.

IEDC is the international professional organization of economic developers. Ronnie Bryant, Chief Executive Office and President of the CRP, was installed as Chairman of the IEDC Governance Board of Directors during the conference.

NC Department of Commerce strives for Improvement

In the North Carolina Department of Commerce’s 2005- 06 Annual Report, the response and recovery from the “Perfect Economic Storm” was detailed. In short, the North Carolina economy has recovered from the dramatic and unprecedented events that occurred since 2001.

Amongst the changes enacted by the Department to respond to the crisis, the incentive portfolio has been updated and expanded. As earlier detailed, the Bill Lee Act was “modernized” this session. Other recent changes include

The One NC Fund was appropriated $20 Million
The Job Development Investment Grant (JDIG) was expanded
The continuation of the Site and Infrastructure Development Fund
Sales tax refunds enacted for materials used in the construction of selected large projects
Research and Development Tax Credit revamped and enhanced
Reduced sales tax on research equipment enacted

The Department has also undertaken a detailed study, underwritten by Duke Energy, of best practices and comparative analysis. The primary conclusion of the study was that significant economic development benefits could be achieved from small incremental investments. Various implementation activities are being undertaken this year in response to the study including

Creation and implementation of a Economic Development Intelligence System with prominent computer businesses SAS and ESRI
Research Projects
Comprehensive website redesign
Client Relationship Management System development
Selection of Tron as the advertising agency of choice
Execution of a public relations plan
Establishment of a Project Management Office

The Salisbury-Rowan EDC works closely with the NCDOC and handles inquiries, projects and scheduled visitations with clients and consultants coordinated by NCDOC.

Biotech Campus progresses

The North Carolina Research Campus continues to quickly take shape as a research hub, physical site and bio business venture. David H. Murdock, chairman and owner of Castle & Cooke, Inc. and Dole Food Company, Inc., and other partners in the $1 billion dollar campus, celebrated the topping off of the David H. Murdock Core Laboratory Building by announcing a new tenant, the Biomarker Group on August 21st.

“The campus is on the move,” said Mr. Murdock. “And that’s good news for a world that needs breakthrough research and discoveries in the life sciences.”

The array of resources aligning at the campus attracted its latest tenant, the Biomarker Group, pioneer of a diabetes test known as GlycoMark. The company’s interest in nutrition and health parallels that of Mr. Murdock.

In a separate business panel on September 25th, U.S. Commerce Department Deputy Secretary David Sampson called the NC Research Campus an example of how the nation will remain competitive and innovative for years to come.

Sampson had been in the community three years ago after the abrupt demise of one-time textile giant Pillowtex Corp., which wiped out more than 4,000 jobs in the region. He said that he didn't know of any other area that had seen such positive change so quickly. Sampson also praised the collaborative nature of the campus, especially the UNC System, Duke University and David Murdock, owner of Dole Food Co. and Castle and Cooke Inc.