§ 105-129.2A. Sunset; studies.

§ 105‑129.2A.  Sunset;studies.

(a)        Sunset. – ThisArticle is repealed for business activities that occur in taxable yearsbeginning on or after January 1, 2007.

(a1)      Sunset forInterstate Air Couriers. – Notwithstanding subsection (a) of this section, in thecase of an interstate air courier that enters into a real estate lease on orbefore January 1, 2006, with an airport authority that provides for the leaseof at least 100 acres of real property with a lease term in excess of 15 years,this Article is repealed effective for business activities that occur on orafter January 1, 2010.

(a2)      Sunset for EligibleMajor Industries. – Notwithstanding subsection (a) of this section, in the caseof a taxpayer that qualifies as an eligible major industry on or before January1, 2008, this Article is repealed effective for business activities that occuron or after January 1, 2010.

(a3)      Sunset for CertainTaxpayers Located in Development Zones. – Notwithstanding subsection (a) ofthis section, in the case of a taxpayer that satisfies all of the conditions ofthis subsection, this Article is repealed effective for business activitiesthat occur on or after January 1, 2010.

(1)        Before January 1,2006, the taxpayer signs a letter of commitment with the Department of Commercedescribing a proposed new or expanding project and specifying the amount to beinvested in real property and machinery and equipment, the number of new jobsto be created, and a proposed timetable for making the investment and creatingthe jobs.

(2)        Before January 1,2006, the Secretary of Commerce makes a written determination that the taxpayeris expected to purchase, lease, or construct and place in service in aneligible business at a location within a development zone within a three‑yearperiod at least ten million dollars ($10,000,000) of real property andmachinery and equipment and that the taxpayer will create at least 300 new jobsat the location within a three‑year period beginning when the property isfirst placed in service in an eligible business.

(3)        Before January 1,2006, the taxpayer places at least four million dollars ($4,000,000) of realproperty and machinery and equipment in service at the location and creates atleast 20 new jobs at the location.

(a4)      Sunset for TaxpayersThat Sign a Letter of Commitment. – Notwithstanding subsection (a) of thissection, in the case of a taxpayer that signs a letter of commitment with theDepartment of Commerce on or before December 31, 2006, stating the taxpayer'sintent to create new jobs or make new investments with respect to machinery andequipment, central office or aircraft facility property, or substantialinvestments in other real property at a specific site in this State, thisArticle is repealed effective for business activities that occur on or afterJanuary 1, 2008. If a taxpayer elects to take any credit under the provisionsof this subsection for activities occurring in the 2007 taxable year, thetaxpayer may not take any credit under Article 3J of this Chapter with respectto the same establishment for activities occurring in the 2007 taxable year.

(b)        Equity Study. – TheDepartment of Commerce shall study the effect of the tax incentives provided inthis Article on tax equity. This study shall include the following:

(1)        Reexamining theformula in G.S. 105‑129.3(b) used to define enterprise tiers, to includeconsideration of alternative measures for more equitable treatment of countiesin similar economic circumstances.

(2)        Considering whetherthe assignment of tiers and the applicable thresholds are equitable for smallercounties, for example those under 50,000 in population.

(3)        Compiling anyavailable data on whether expanding North Carolina businesses receive fewerbenefits than out‑of‑State businesses that locate to NorthCarolina.

(c)        Impact Study. – TheDepartment of Commerce shall study the effectiveness of the tax incentivesprovided in this Article. This study shall include:

(1)        Study of thedistribution of tax incentives across new and expanding industries.

(2)        Examination of dataon economic recruitment for the period from 1994 through the most recent yearfor which data are available by county, by industry type, by size ofinvestment, and by number of jobs, and other relevant information to determinethe pattern of business locations and expansions before and after the enactmentof the William S. Lee Act incentives.

(3)        Measuring the directcosts and benefits of the tax incentives.

(4)        Compiling availableinformation on the current use of incentives by other states and whether thatuse is increasing or declining.

(d)        Report. – TheDepartment of Commerce shall report the results of these studies and itsrecommendations to the General Assembly biennially with the first report due byApril 1, 2001, and the last report due by June 1, 2007.  (1997‑277, s. 4; 1999‑360,s. 18.1; 2000‑173, ss. 1(b), 1(c); 2001‑476, s. 2(a); 2002‑146,s. 2; 2003‑435, 2nd Ex. Sess., s. 3.2; 2005‑241, ss. 1(a), 1(b);2006‑168, s. 2.1; 2006‑252, s. 1.3; 2007‑515, ss. 4, 5; 2008‑134,s. 69.)