A BILL TO BE ENTITLED
AN ACT to establish the solar energy incentive grant program within the department of commerce.
The General Assembly of North Carolina enacts:
SECTION 1.  Article 10 of Chapter 143B of the General Statutes is amended by adding a new Part to read:
"Part 2C. Solar Manufacturing Incentive Grant Program.
"§ 143B‑437.12.  Solar Manufacturing Incentive Grant Program.
(a)	Definitions. – The following definitions apply in this Part:
(1)	Agreement. – A solar manufacturing incentive agreement under G.S. 143B‑437.17.
(2)	Business. – A corporation, sole proprietorship, cooperative association, partnership, S corporation, limited liability company, nonprofit corporation, or other form of business organization, located either within or outside this State.
(3)	Committee. – The Solar Investment Committee established pursuant to G.S. 143B‑437.14.
(4)	Eligible position. – A position created by a business and filled by a new full‑time employee in this State.
(5)	Full‑time employee. – A person who is employed for consideration for at least 35 hours a week, whose wages are subject to withholding under Article 4A of Chapter 105 of the General Statutes, and who is determined by the Committee to be employed in a permanent position according to criteria it develops in consultation with the Attorney General. The term does not include any person who works as an independent contractor or on a consulting basis for the business.
(6)	New employee. – A full‑time employee who represents a net increase in the number of the business's employees statewide.
(7)	Overdue tax debt. – Defined in G.S. 105‑243.1.
(8)	Related member. – Defined in G.S. 105‑130.7A.
(9)	Withholdings. – The amount withheld by a business from the wages of employees in eligible positions under Article 4A of Chapter 105 of the General Statutes.
(b)	Program. – There is established the Solar Manufacturing Incentive Grant Program to be administered by the Solar Investment Committee. In order to foster job creation and investment in the economy of this State, the Committee may enter into negotiated agreements with businesses to provide grants in accordance with the provisions of this Part. The Committee, in consultation with the Attorney General, shall develop criteria to be used in determining whether the conditions of this section are satisfied and whether the project described in the application is otherwise consistent with the purposes of this Part. Before entering into an agreement, the Committee must find that all the following conditions are met:
(1)	The project will benefit the people of this State by increasing opportunities for employment and by strengthening this State's economy by, for example, providing worker training opportunities, constructing and enhancing critical infrastructure, increasing development in strategically important industries, or increasing the State and local tax base.
(2)	The project is consistent with economic development goals for the State and for the area where it will be located.
(3)	A grant under this Part is necessary for the completion of the project in this State.
(4)	The total benefits of the project to the State outweigh its costs and render the grant appropriate for the project.
"§ 143B‑437.13.  Eligibility for and receipt of grant funds.
(a)	Health Insurance. – A business is eligible for a grant under this Part only if the business provides health insurance for all of the applicable full‑time employees of the project with respect to which the grant is made. For the purposes of this subsection, an applicable full‑time employee is one who earns from the business less than one hundred fifty thousand dollars ($150,000) in taxable compensation on an annualized basis or three and one‑half times the annualized average State wage for all insured private employers in the State employing between 250 and 1,000 employees, whichever is greater. For the purposes of this subsection, a business provides health insurance if it pays at least fifty percent (50%) of the premiums for health care coverage that equals or exceeds the minimum provisions of the basic health care plan of coverage recommended by the Small Employer Carrier Committee pursuant to G.S. 58‑50‑125.
Each year that a business receives a grant under this Part, the business must provide with the submission required under G.S. 143B‑437.15(d) a certification that the business continues to provide health insurance, as required by this subsection, for all applicable full‑time employees of the project with respect to which the grant is made. If the business ceases to provide the required health insurance, the Committee shall amend or terminate the agreement as provided in G.S. 143B‑437.18.
(b)	Safety and Health Programs. – A business is eligible for a grant under this Part only if the business has no citations under the Occupational Safety and Health Act that have become a final order within the past three years for willful serious violations or for failing to abate serious violations with respect to the location for which the grant is made. For the purposes of this subsection, "serious violation" has the same meaning as in G.S. 95‑127.
(c)	Overdue Tax Debts. – A business may not receive an annual disbursement of a grant if, at the time of disbursement, the business has received a notice of an overdue tax debt and that overdue tax debt has not been satisfied or otherwise resolved. A business may receive an annual disbursement of a grant only after the Committee has certified that there are no outstanding overdue tax debts and that the business has met the terms and conditions of the agreement. No amount shall be disbursed to a business as a grant under this Part in any year until the Secretary of Revenue has certified to the Committee that there are no outstanding overdue tax debts of the business. A business that has met the terms of the agreement shall make an annual certification of this to the Committee. The Committee shall require the business to provide any necessary evidence of compliance to verify that the terms of the agreement have been met. The Committee shall certify the grant amount for which the business is eligible under the agreement. The Department of Commerce shall remit a check to the business in the amount of the certified grant amount within 90 days of receiving the certification of the Committee.
"§ 143B‑437.14.  Solar Investment Committee established.
(a)	Membership. – The Solar Investment Committee is established. The Committee consists of the following members:
(1)	The Secretary of Commerce.
(2)	The Director of the State Energy Office.
(3)	The Director of the Office of State Budget and Management.
(4)	One member appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives.
(5)	One member appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate.
The members of the Committee appointed by the General Assembly may not be members of the General Assembly. The members of the Committee appointed by the General Assembly serve two‑year terms that begin upon appointment.
(b)	Decision Required. – The Committee may act only upon a decision of three of its five members.
(c)	Conflict of Interest. – It is unlawful for a current or former member of the Committee to, while serving on the Committee or within two years after the end of service on the Committee, provide services for compensation, as an employee, consultant, or otherwise, to any business or a related member of the business that is awarded a grant under this Part while the member is serving on the Committee. Violation of this subsection is a Class 1 misdemeanor. In addition to the penalties imposed under G.S. 15A‑1340.23, the court shall also make a finding as to what compensation was received by the defendant for services in violation of this section and shall order the defendant to forfeit that compensation.
If a person is convicted under this section, the person shall not provide services for compensation, as an employee, consultant, or otherwise, to any business or a related member of the business that was awarded a grant under this Part while the member was serving on the Committee until two years after the person's conviction under this section.
(d)	Public Notice. – At least 20 days before the effective date of any criteria or nontechnical amendments to criteria, the Committee must publish the proposed criteria on the Department of Commerce's Web site and provide notice to persons who have requested notice of proposed criteria. In addition, the Committee must accept oral and written comments on the proposed criteria during the 15 business days beginning on the first day that the Committee has completed these notifications. For the purpose of this subsection, a technical amendment is either of the following:
(1)	An amendment that corrects a spelling or grammatical error.
(2)	An amendment that makes a clarification based on public comment and could have been anticipated by the public notice that immediately preceded the public comment.
(e)	Sunshine. – Meetings of the Committee are subject to the open meetings requirements of Article 33C of Chapter 143 of the General Statutes. All documents of the Committee, including applications for grants, are public records governed by Chapter 132 of the General Statutes and any applicable provisions of the General Statutes protecting confidential information.
"§ 143B‑437.15.  Applications; fees; reports; study.
(a)	Application. – A business shall apply, under oath, to the Committee for a grant on a form prescribed by the Committee that includes at least all of the following:
(1)	The name of the business and the proposed location of the project.
(2)	The names and addresses of the principals or management of the business, the nature of the business, and the form of business organization under which it is operated.
(3)	The financial statements of the business prepared by a certified public accountant and any other financial information the Committee considers necessary.
(4)	The number of full‑time positions, if any, proposed to be created for the project and the salaries for these positions.
(5)	Certification that the business will provide health insurance to full‑time employees of the project as required by G.S. 143B‑437.13(a).
(6)	Information concerning other locations, including locations in other states and countries, being considered for the project and the nature of any benefits that would accrue to the business if the project were to be located in one of those locations.
(7)	Information concerning any other State or local government incentives for which the business is applying or that it has an expectation of receiving.
(8)	Any other information necessary for the Committee to evaluate the application.
A business may apply, in one consolidated application in a form and manner determined by the Committee, for a grant on its own behalf as a business and for grants on behalf of the related members of the business who may qualify under this Part.
The Committee will consider an application by a business for grants on behalf of its related members only if the related members for whom the application is submitted have assigned to the business any claim of right the related members may have under this Part to apply for grants individually during the term of the agreement and have agreed to cooperate with the business in providing to the Committee all the information required for the initial application and the agreement, and any other information the Committee may require for the purposes of this Part. The applicant business is responsible for providing to the Committee all the information required under this Part.
If a business applies for a grant on behalf of its related members, the related members included in the application may be permitted to meet the qualifications for a grant collectively by participating in a project that meets the requirements of this Part. The amount of a grant may be calculated under the terms of this Part as if the related members were all collectively one business entity. Any conditions for a grant, other than the number of eligible positions created, apply to each related member who is listed in the application as participating in the project. The grants awarded shall be paid to the applicant business. A grant received under this Part by a business may be apportioned to the related members in a manner determined by the business. In order for an agreement to be executed, each related member included in the application must sign the agreement and agree to abide by its terms.
(b)	Application Fee. – When filing an application under this section, the business must pay the Committee a fee of five thousand dollars ($5,000). The fee is due at the time the application is filed. The Secretary of Commerce, the Director of the State Energy Office, and the Director of the Office of State Budget and Management shall determine the allocation of the fee imposed by this section among their agencies. The proceeds of the fee are receipts of the agency to which they are credited.
(c)	Committee Reports. – The Committee shall publish a report on the Solar Manufacturing Investment Grant Program on or before September 1 of each year. The report shall include the following:
(1)	A listing of each agreement negotiated and entered into during the preceding calendar year, including the name of the business, the cost/benefit analysis conducted by the Committee during the application process, a description of the project, the term of the agreement, the formula used to determine the amount of the grant, and the amount of the grant made under the agreement during that year.
(2)	An update on the status of projects under agreements entered into before the preceding calendar year.
(3)	A listing of the employment level for all businesses receiving a grant and any changes in those levels from the level of the next preceding year.
(4)	The criteria developed by the Committee, in consultation with the Attorney General, to implement this Part and any changes in those criteria from the previous calendar year.
(5)	The effectiveness of the program in recruiting new and expanding businesses.
(6)	The environmental impact of businesses that have received grants under the program.
(7)	The geographic distribution of grants, by number and amount, awarded under the program.
(8)	An explanation of whether the projects with respect to which agreements are entered into involve new businesses in the State or expanding existing businesses in the State.
(9)	A listing of all businesses making an application under this Part and an explanation of whether each business ultimately located the project in this State regardless of whether the business was awarded a grant for the project under this Part.
In addition to the annual report required by this subsection, the Committee shall publish a report on the Solar Investment Grant Program within two months of direction to do so by either the General Assembly or the Fiscal Research Division.
(d)	Grant Recipient Report. – No later than March 1 of each year, for the preceding grant year, every entity that is awarded a grant under this section shall submit to the Department, as a condition of its continuation in the grant program, a report showing the number of full‑time employees, the amount and date of capital investments in real property or eligible business property, and the number of watts of rated capacity of panels. Annual reports submitted to the Committee shall include social security numbers of individual employees identified in the reports. Upon request of the Committee, the business shall also submit a copy of its State and federal tax returns. Payroll and tax information, including social security numbers of individual employees and State and federal tax returns, submitted under this subsection is tax information subject to G.S. 105‑259. Aggregated payroll or withholding tax information submitted or derived under this subsection is not tax information subject to G.S. 105‑259. When making a submission under this section, the business must pay the Committee a fee of one thousand five hundred dollars ($1,500). The fee is due at the time the submission is made. The Secretary of Commerce, the Director of the State Energy Office, and the Director of the Office of State Budget and Management shall determine the allocation of the fee imposed by this section among their agencies. The proceeds of the fee are receipts of the agency to which they are credited. The Committee may require any information that it considers necessary to effectuate the provisions of this Part. The Committee may require any business receiving a grant to submit to an audit at any time. The reporting procedures of this section are in lieu of any other general reporting requirements relating to private entities that receive State funds.
(e)	Study. – The Committee shall conduct a study to determine the minimum funding level required to implement the Solar Investment Grant Program successfully. The Committee shall report the results of this study to the House of Representatives Appropriations Subcommittee on Natural and Economic Resources, the Senate Appropriations Committee on Natural and Economic Resources, and the Fiscal Research Division no later than March 1 of each year.
"§ 143B‑437.16.  Calculation of grants.
(a)	Existing Manufacturer Grant. – Any manufacturer commencing eligible sales at any time subsequent to December 31, 2009, of solar photovoltaic panels it manufactured within the State shall be entitled to receive an annual solar photovoltaic manufacturing incentive grant in an amount of seventy‑five cents (75¢) per watt of the rated capacity of panels sold in a calendar year. No manufacturer shall be eligible to receive grants pursuant to this subsection for more than five years.
(b)	New or Expanded Grant. – Any entity (i) that commences the manufacture of solar photovoltaic panels in the State on or after January 1, 2010, or expands its manufacture of such panels in the State by at least fifty percent (50%) above the baseline production level of six million watts and (ii) for which the Secretary of Commerce has made a written determination that the entity is an Investment Level I, Investment Level II, or Investment Level III entity shall be entitled to receive an annual solar photovoltaic manufacturing incentive grant for six years at the following rates:
Year	Investment Level	Rate
1 and 2	I, II, and III	75¢/watt
3 and 4	I	50¢/watt
	II and III	75¢/watt
5 and 6	I and II	25¢/watt
	III	75¢/watt.
For purposes of this Part, an Investment Level I business is one that the Secretary of Commerce has certified will make a capital investment of at least twenty‑five million dollars ($25,000,000) over the grant term and employs at least 230 full‑time employees during each year of the grant term;  an Investment Level II business is a business that makes a capital investment of at least seventy million dollars ($70,000,000) over the grant term and employs at least 200 full‑time employees during the third through sixth years of the grant term above the employment level required for Investment Level I businesses; and an Investment Level III business is a business that makes a capital investment of at least one hundred forty million dollars ($140,000,000) over the grant term and employs at least 700 full‑time employees during the fifth and sixth years of the grant term above the employment level required for Investment Level I businesses.
(c)	Election. – A business that qualifies both for an existing manufacturer grant under subsection (a) of this section and for a new or expanded grant under subsection (b) of this section must elect which grant to receive. This election is binding for the entire term of the grant.
(d)	Limitation. – In the event applications for grants pursuant to subsections (a) and (b) of this section exceed nine million watts per calendar year, the grant payments will be apportioned among the eligible applications, based upon the total wattage evidenced by such applicants, the amount per watt the applicant is eligible to receive, and the total wattage eligible for grants specified in this section.
"§ 143B‑437.17.  Community economic development agreement.
(a)	Terms. – Each agreement shall include at least the following:
(1)	A detailed description of the proposed project.
(2)	The number of eligible positions that are subjects of the grant and a description of those positions and the location of those positions.
(3)	A provision permitting an audit of the payroll records of the business by the Committee from time to time as the Committee considers necessary.
(4)	A provision that requires the Committee to amend an agreement pursuant to G.S. 143B‑437.18.
(5)	A provision that requires the business to maintain operations at the project location or another location approved by the Committee for the term of the grant and a provision to permit the Committee to recapture all or part of the grant at its discretion if the business does not remain at the site for the required term.
(6)	A provision establishing the conditions under which the grant agreement may be terminated, in addition to those under G.S. 143B‑437.18, and under which grant funds may be recaptured by the Committee.
(7)	A provision stating that unless the agreement is amended or terminated pursuant to G.S. 143B‑437.18, the agreement is binding and constitutes a continuing contractual obligation of the State and the business.
(8)	A provision setting out any allowed variation in the terms of the agreement that will not subject the business to amendment or termination of the agreement under G.S. 143B‑437.18.
(9)	A provision requiring that the business engage in fair employment practices as required by State and federal law and a provision encouraging the business to use small contractors, minority contractors, physically handicapped contractors, and women contractors whenever practicable in the conduct of its business.
(10)	A provision encouraging the business to hire North Carolina residents.
(11)	A provision encouraging the business to use the North Carolina State ports.
(12)	A provision describing the manner in which the amount of a grant will be measured and administered to ensure compliance with the provisions of G.S. 143B‑437.16(d).
(13)	A provision stating that any recapture of a grant and any amendment to an agreement reducing the amount of the grant or the term of the agreement must, at a minimum, be proportional to the failure to comply measured relative to the condition or criterion with respect to which the failure occurred.
(14)	A provision stating that any disputes over interpretation of the agreement shall be submitted to binding arbitration.
(15)	A provision stating that the business agrees to submit to an audit at any time that the Committee requires one.
(16)	A provision encouraging the business to contract with small businesses headquartered in the State for goods and services.
(17)	A provision stating that grant awards are subject to the availability of funds.
(b)	Approval of Attorney General. – The Attorney General shall review the terms of all proposed agreements entered into by the Committee. To be effective against the State, an agreement entered into under this Part must be signed personally by the Attorney General.
"§ 143B‑437.18.  Failure to comply with agreement.
(a)	If the business receiving a grant fails to meet or comply with any condition or requirement set forth in an agreement or with criteria developed by the Committee in consultation with the Attorney General, the Committee shall amend the agreement to reduce the amount of the grant or the term of the agreement and may terminate the agreement. Any reduction of the grant is applicable to the grant year immediately following the grant year in which the business fails to comply with the agreement. The reduction in the amount or the term must, at a minimum, be proportional to the failure to comply measured relative to the condition or criterion with respect to which the failure occurred.
(b)	If a business fails to maintain employment at the levels stipulated in the agreement or otherwise fails to comply with any condition of the agreement for any two consecutive years, the Committee shall terminate the agreement.
(c)	Notwithstanding the provisions of subsections (a) and (b) of this section, if the Committee finds that the business has manipulated or attempted to manipulate reported material with the knowledge that such action will increase the amount of a grant, the Committee shall immediately terminate the agreement and take action to recapture any grant funds disbursed in any year in which the Committee finds the business manipulated or attempted to manipulate employee withholdings with the purpose of increasing the amount of the grant.
"§ 143B‑437.19.  SMIG Program cash flow requirements.
The Job Maintenance and Capital Development Fund is created as a restricted reserve in the Department of Commerce. Monies in the Fund do not revert but remain available to the Department for these purposes. The Department may use monies in the Fund only to encourage businesses to maintain high‑paying jobs and make further capital investments in the State as provided in this section, and funds are hereby appropriated for these purposes in accordance with G.S. 143C‑1‑2."
SECTION 3.  This act becomes effective July 1, 2009, and applies to agreements entered on or after that date.