A BILL TO BE ENTITLED
AN ACT TO PROVIDE TAX CREDITS FOR JOB CREATION AND INVESTMENT IN MACHINERY AND EQUIPMENT FOR CERTAIN TAXPAYERS ENGAGED IN BUSINESS AS GROCERY STORES.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 105‑129.15 is amended by adding the following new subdivisions:
"§ 105‑129.15.  Definitions.
The following definitions apply in this Article:
…
(2a)	Development zone. – An area designated as a development zone by the Department of Commerce under G.S. 105-129.3A.
(2b)	Development zone agency. – Defined in G.S. 105-129.13.
(2c)	Grocery store. – An establishment in supermarket and other grocery (except convenience) stores industry 44511, as defined by NAICS.
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(4a)	NAICS. – Defined in G.S. 105-129.2.
…."
SECTION 2.  Article 3B of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105-129.16D. Credit for investing in a grocery store with a development zone agency.
(a)	Eligibility. – A taxpayer is eligible for a credit under this section only if all of the following conditions are met:
(1)	The taxpayer has entered into a partnership with a development zone agency in which the development zone agency has at least a forty-five percent (45%) ownership interest and in which the development zone agency receives at least forty-five percent (45%) of the profits of the partnership.
(2)	The partnership operates a grocery store in a development zone.
(3)	The partnership makes available to the public annual financial statements, which include a balance sheet as of the end of the partnership's fiscal year, an income statement for the fiscal year, and a statement of cash flows for the fiscal year.
(b)	Credit for Job Creation. – An eligible taxpayer is allowed a credit for creating a new full‑time job if the partnership hires an additional full‑time employee during the taxable year to fill a position located at a grocery store in a development zone. The amount of the credit is four thousand dollars ($4,000) per job. The entire credit may not be taken for the taxable year in which the additional employee is hired, but must be taken in five equal installments beginning with the taxable year in which the additional employee was hired.
If, in one of the five years in which the installment of a credit accrues, the number of the partnership's full‑time employees at grocery stores in development zones falls below the number of full‑time employees the partnership had in grocery stores in development zones in the year in which the taxpayer qualified for the credit, the credit expires and the taxpayer may not take any remaining installment of the credit. The taxpayer may, however, take the portion of an installment that accrued in a previous year and was carried forward to the extent permitted under G.S. 105‑129.17.
A taxpayer that claims a credit allowed under Article 3A of this Chapter with respect to a job may not take the credit allowed in this subsection with respect to the same job.
(c)	Credit for Investing in Business Property. – An eligible taxpayer is allowed a credit for investing in business property if the partnership has purchased or leased business property and places it in service at a grocery store in a development zone during the taxable year. The amount of the credit is equal to four and one-half percent (4.5%) of the cost of the property. The entire credit may not be taken for the taxable year in which the property is placed in service but must be taken in five equal installments beginning with the taxable year in which the property is placed in service.
If, in one of the five years in which the installment of a credit accrues, the business property with respect to which the credit was claimed is disposed of or taken out of service at a grocery store in a development zone, the credit expires and the taxpayer may not take any remaining installment of the credit. The taxpayer may, however, take the portion of an installment that accrued in a previous year and was carried forward to the extent permitted under G.S. 105-129.17.
A taxpayer that claims a credit allowed under Article 3A of this Chapter with respect to business property may not take the credit allowed in this subsection with respect to the same property. A taxpayer may not take the credit allowed in this subsection for business property the taxpayer leases from another unless the taxpayer obtains the lessor's written certification that the lessor will not capitalize the property for tax purposes under the Code."
SECTION 3.  This act is effective for taxable years beginning on or after January 1, 2002, and applies to jobs created or business property placed in service on or after that date.