As Apple considers the Triangle, NC leaders propose incentives for a 'game-changing' employer

Apple considering NC’s RTP for new center

Computer giant Apple is actively considering locating some of its operations in North Carolina's Research Triangle Park.
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Computer giant Apple is actively considering locating some of its operations in North Carolina's Research Triangle Park.

North Carolina state legislative leaders proposed substantial changes to economic-development incentives on Thursday, amid increased public attention on tech giant Apple's interest in locating in Research Triangle Park.

Senate leader Phil Berger and House Speaker Tim Moore said the package of changes are not aimed at any one company, saying they were meant to attract a broad array of industry. They declined to discuss ongoing discussions with Apple.

A news release the Republican legislative leaders sent out said the changes are intended to help land a "major jobs announcement" in the coming months.

That is likely to involve at least 3,000 jobs, based on what lawmakers are proposing.

Moore and Berger said economic development grants that have been put in place in recent years have been important to the state's economy but are due for revisions.

"We learned a lot of valuable lessons from the near-misses," said Moore, of Cleveland County, mentioning the loss of potential automotive manufacturing facilities — including a Toyota plant. "We left everything on the field there. I think when you step up in such a major way with that incentives package it really elevated North Carolina internationally as far as companies looking to expand."

N.C. Senate President Pro Tem Phil Berger, left, and N.C. House Speaker Tim Moore talk during a news conference at the Legislative Building in Raleigh, N.C., Thursday, May 17, 2018. They talked about proposed changes to economic-development incentives. Ethan Hyman

The incentives package will be incorporated in the state budget. It focuses on the main incentives program: the Job Development Investment Grant.

It sets new thresholds to attract companies that would invest at least $1 billion and create at least 3,000 jobs.

Gov. Roy Cooper's office released a statement later in the day supporting the changes but saying they should be made in a stand-alone bill that could be considered on its own merits and not incorporated into the budget.

"As we do on many economic development efforts, the governor's office worked closely with the legislature and other interested parties on this change that can help bring even more jobs to North Carolina," spokesman Ford Porter said. "We believe this is important enough to be voted on as a stand-alone measure."

State budgets can be controversial; the Democratic governor vetoed last year's budget and lawmakers passed it over his objections.

The legislature returned to Raleigh on Wednesday for a session focused on budget changes. Thursday's news conference made it clear to companies early in this year's budgeting process that the state is ready to move quickly on incentives.

The announcement also served to respond to news media reports about Apple in recent days based on unnamed sources.

"One of the worst things that the North Carolina media can do, as it relates to our state’s economic recruitment efforts, is print speculative stories based on anonymous sources," said Berger, of Rockingham County. "Sources who will not go on the record about economic recruitment do not know what they're talking about and are spreading rumors or mere speculation. ... To be clear, what we are about to say is on the record and is attributable to us."

N.C. legislative leaders Rep. Tim Moore and Sen. Phil Berger wouldn't confirm rumors of Apple planning to locate a large facility in North Carolina. They also said speculation in the media is not helpful toward recruitment.

Apple announced in January it would be looking for a site to establish another campus, which will bring thousands of jobs and billions of dollars in investments wherever it lands.

Apple CEO Tim Cook has met with Cooper, and Apple representatives have discussed the project with the staff of key lawmakers, The News & Observer reported Wednesday.

The company and political leaders are interested in tailoring a financial incentives package that could seal the deal, as Apple is also reportedly still looking at other states.

"I think the big takeaway is that we're putting ourselves in a much more competitive position to attract a game-changing employer for North Carolina," Sen. Tamara Barringer, a Cary Republican, said Thursday.

"It's the one thing we were lacking, and we needed to make these changes so we could play on the world stage."

North Carolina's JDIG program allows companies to take a tax credit against employee withholding taxes.

Last year the General Assembly included in the state budget a change to that program aimed at attracting the biggest of projects, known as “transformative,” that bring at least a $4 billion investment and 5,000 new jobs. Berger and Moore's latest proposal would lower that threshold to $1 billion and 3,000 jobs, and it would eliminate a $6,500-per-job cap on incentives awards.

The counted jobs would not include those filled by citizens of foreign countries in the United States on H-1B work visas, they said.

The changes would also allow companies that locate a transformative project in North Carolina to:

get credit for later expansions of their workforce.

have up to 10 years to achieve job targets instead of five years.

receive grants up to an additional 30 years beyond that ramp-up period, instead of an additional 25 years.

Currently, a fund called the utility account helps rural parts of the state pay for infrastructure to attract businesses. That money comes from state tax revenue generated by projects' new jobs. A change for transformative projects and certain other large JDIG projects would send 10 percent of a grant to the utility account, so that each project contributes to improvements all over the state.