Commerce Issues 2012 Economic Development Tier Rankings

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N.C. Commerce Secretary Keith Crisco today announced the county tier designations for 2012. The designations, which are mandated by state law, determine a variety of state funding opportunities to assist in economic development.

"Our goal is to encourage economic development statewide so all of our residents can find good jobs regardless of their location in our state," Crisco said. "These tier rankings provide important tools that help attract or retain businesses in all parts of North Carolina."

Using a statutory formula outlined in the 2006 Tax Credits for Growing Businesses (more commonly referred to as Article 3J tax credits), the Department of Commerce assembles required statistics for each of North Carolina's 100 counties, applies the formula and assigns a tier designation ranking from one to three. Tier 1 counties are the most economically distressed and Tier 3 counties are the least. Eligible businesses that locate in lower-tiered counties are eligible for some grant programs and larger tax credits than those that locate in higher-ranked areas.

Eight counties will change tier designations for 2012. Chowan and Yancey counties will shift from a Tier 2 to a Tier 1 ranking. Alexander and Gates counties will move from Tier 1 to Tier 2 counties. Craven and Onslow counties, currently Tier 3 counties, will shift to a Tier 2 ranking. Lincoln and Watauga counties will move from a Tier 2 to a Tier 3 ranking.

The law calls for the 40 most distressed counties to become Tier 1 counties, the next 40 counties to be designated as Tier 2 and the 20 most prosperous counties to become Tier 3 counties.

The rankings are based on an assessment of each county's unemployment rate, median household income, population growth, and assessed property value per capita. In addition, any county with a population of less than 12,000 or a county with a population of fewer than 50,000 residents with 19 percent or more of those people living below the federal poverty level automatically are designated as among the most distressed counties.

Tier designations determine the available amount of tax credits for job creation and business property investment in a list of eligible industries. They include manufacturing, motorsports, aircraft maintenance and repair, air courier services, warehousing, customer service call centers, research and development, electronic shopping and mail order houses, wholesale trade and information technology.

All eligible companies are required to offer employees health insurance and pay at least 50 percent of the premiums, cannot owe back taxes and cannot have received a significant environmental violation notice from the state Department of Environment and Natural Resources. In Tier 2 and Tier 3 counties, companies also must meet a wage test.

Potential benefits to companies under each tier designation include:

* Tier 1 - $12,500 tax credit per new job with a requirement to create at least five jobs, and a 7 percent tax credit for eligible business property expenditures.

* Tier 2 - $5,000 tax credit per new job with a requirement to create at least 10 jobs, and a 5 percent tax credit for eligible business property expenditures of more than $1 million.

* Tier 3 - $750 tax credit per new job with a requirement to create at least 15 jobs, and a 3.5 percent tax credit for eligible business property expenditures of more than $2 million.

For more information about the tier designation system, visit http://www.nccommerce.com/research-publications/incentive-reports/county-tier-designations

Source: http://insurancenewsnet.com/article.aspx?id=307478&type=topnews