North Carolina 2025-2026 Regular Session

North Carolina Senate Bill S546 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		GENERAL ASSEMBLY OF NORTH CAROLINA
2	2		SESSION 2025
3		-	S 1
4		-	SENATE BILL 546
	3	+	S D
	4	+	SENATE BILL DRS15248-MCf-163
	5	+
5	6
6	7
7	8		Short Title: Clean Energy Workforce & Innovation Act. (Public)
8	9		Sponsors: Senators Theodros and Salvador (Primary Sponsors).
9		-	Referred to: ~~Rules and Operations of the Senate~~
10		-	~~March 26, 2025~~
11		-	~~S546 -v-1~~
	10	+	Referred to:
	11	+
	12	+	DRS15248 -MCf-163
12	13		A BILL TO BE ENTITLED 1
13	14		AN ACT TO ENACT THE CLEAN ENERGY WORKFORCE AND INNOVATION ACT. 2
14	15		The General Assembly of North Carolina enacts: 3
15	16		SECTION 1.(a) Article 10 of Chapter 143B of the General Statutes is amended by 4
16	17		adding a new Part to read: 5
17	18		"Part 8A. Clean Energy. 6
18	19		"§ 143B-451.2. Clean energy workforce and innovation. 7
19	20		(a) Title, purpose. – This Part shall be known and may be cited as "The Clean Energy 8
20	21		Workforce and Innovation Act". The purpose of this Act is to accomplish the following: 9
21	22		(1) Develop a skilled workforce in this State to support the deployment of 10
22	23		advanced nuclear energy, small modular reactors, and related clean energy 11
23	24		technologies and facilities. 12
24	25		(2) Accelerate clean energy innovation by streamlining regulatory processes for 13
25	26		small modular reactors and associated infrastructure, ensuring North Carolina 14
26	27		remains a leader in reliable, low-carbon energy. 15
27	28		(3) Expand economic opportunities in energy transition by investing in workforce 16
28	29		training, apprenticeships, and educational partnerships that equip North 17
29	30		Carolinians for high-paying, sustainable careers. 18
30	31		(4) Ensure equitable access to clean energy jobs by prioritizing workforce 19
31	32		development programs in communities affected by fossil fuel plant closures, 20
32	33		economically distressed areas, and underrepresented groups in the energy 21
33	34		sector. 22
34	35		(b) Definitions. – The following definitions apply in this Part. 23
35	36		(1) Department. – The Department of Commerce. 24
36	37		(2) Energy sector skilled trade. – Operator certification, welding, precision 25
37	38		machining, grid integration and energy storage expertise, nuclear fuel 26
38	39		management, electrical work, instrumentation and control systems 27
39	40		capabilities, cyber security, reactor maintenance, or any other trade or 28
40	41		occupation related to nuclear energy facilities or generation that does not 29
41	42		require a four-year college degree. 30
42	43		(3) Institution of higher education. – Any public university, community college, 31
43	44		or technical training school in North Carolina offering programs in nuclear 32
44	45		technology, engineering, or energy-sector skilled trades. 33
45	46		(4) Small Modular Reactor (SMR). – A nuclear reactor with a capacity of less 34
46	47		than 500 megawatts per unit, designed for modular construction and advanced 35
47		-	safety features, including passive safety systems using natural cooling 36 General Assembly Of North Carolina Session 2025
48		-	Page 2 Senate Bill 546-First Edition
	48	+	safety features, including passive safety systems using natural cooling 36
	49	+	FILED SENATE
	50	+	Mar 25, 2025
	51	+	S.B. 546
	52	+	PRINCIPAL CLERK General Assembly Of North Carolina Session 2025
	53	+	Page 2 DRS15248-MCf-163
49	54		mechanisms to prevent overheating; underground or sealed containment 1
50	55		systems; automatic fail-safe shutdown mechanisms; smaller core and lower 2
51	56		power density componentry; fuel choices that are accident tolerant or capable 3
52	57		of withstanding higher temperatures with lower risk; and security measures 4
53	58		reducing risks from sabotage, aircraft impact, or other external threats. 5
54	59		(c) Clean Energy Workforce Development Program. – There is established in the 6
55	60		Department of Commerce the Clean Energy Workforce Development Program (Program). The 7
56	61		Program shall be comprised of the following elements: 8
57	62		(1) Workforce development. – In conjunction with The University of North 9
58	63		Carolina and the Community Colleges System Office, the Department shall 10
59	64		develop a grant program for institutions of higher education in this State to 11
60	65		expedite and facilitate the expansion of nuclear technology and clean energy 12
61	66		training programs. The Department shall (i) develop guidelines for an 13
62	67		application process for institutions of higher education for the allocation of 14
63	68		funds granted pursuant to this section and (ii) prioritize awarding funds based 15
64	69		on the degree to which the institution has shown in the application the 16
65	70		following: 17
66	71		a. A viable plan to partner and create learning synergies with industry 18
67	72		leaders and employers to align training and real-world clean energy 19
68	73		needs. 20
69	74		b. The funding will be used for nuclear energy workforce needs, 21
70	75		including energy sector skilled trades. 22
71	76		(2) Apprenticeship development. – In conjunction with The University of North 23
72	77		Carolina and the Community Colleges System Office, the Department shall 24
73	78		develop a grant program for subsidizing the costs of qualifying employers for 25
74	79		paid apprenticeship positions for students in institutions of higher education 26
75	80		in the State in order to promote direct-to-hire pathways for participating 27
76	81		students to be prepared for and immediately fill nuclear energy industry 28
77	82		workforce needs. A qualifying employer is an employer currently operating 29
78	83		nuclear energy facilities in the State or in another state and construction 30
79	84		companies and other entities identified by such employers as having the 31
80	85		technical capabilities necessary to design, construct, and maintain nuclear 32
81	86		reactors and equipment for nuclear energy generation. The Department shall 33
82	87		(i) develop guidelines for an application process for qualifying employers for 34
83	88		the allocation of funds granted pursuant to this section and (ii) prioritize 35
84	89		awarding funds based on the degree to which the employer has shown, in the 36
85	90		application or otherwise, the following: 37
86	91		a. A viable plan to partner and create learning synergies and pre- and 38
87	92		post-graduation employment opportunities for student attending 39
88	93		institutions of higher education in the State. 40
89	94		b. The funding will be used to subsidize the total cost of the paid 41
90	95		apprenticeship program created by the qualifying employer and 42
91	96		stipends to participating apprentices to offset living costs. 43
92	97		c. The funding will be used to benefit economically disadvantaged 44
93	98		students. For purposes of this sub-subdivision, an economically 45
94	99		disadvantaged student is one that meets any one or more of the 46
95	100		following: 47
96	101		1. Qualifies for and receives a federal Pell Grant. 48
97	102		2. Is a dependent in a household with income below (i) eighty 49
98	103		percent (80%) of the state median income or (i) the federal 50
99	104		poverty line. 51 General Assembly Of North Carolina Session 2025
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	105	+	DRS15248-MCf-163 Page 3
101	106		3. Is a recipient of Supplemental Nutrition Assistance Program 1
102	107		(SNAP) or Temporary Assistance for Needy Families (TANF). 2
103	108		4. Is a child of parents or guardians who did not earn a 3
104	109		postsecondary degree. 4
105	110		5. Residing in a development tier one area, as defined in 5
106	111		G.S. 143B-437.08. 6
107	112		6. Has been displaced, and is transitioning, from a career in coal, 7
108	113		oil, or gas industry jobs and is pursuing educational 8
109	114		advancement for nuclear energy career needs. 9
110	115		d. A history of hiring participating apprentices, economically 10
111	116		disadvantaged employment applicants, and students graduating in 11
112	117		relevant fields from institutions of higher education. 12
113	118		(3) Educational assistance. – In conjunction with The University of North 13
114	119		Carolina and the Community Colleges System Office, the Department shall 14
115	120		develop a scholarship program for students attending institutions of higher 15
116	121		education in this State to offset the cost of tuition and materials for degrees or 16
117	122		certifications in nuclear engineering, electrical engineering, energy sector 17
118	123		skilled trades, and public health radiation protection programs. The 18
119	124		Department shall (i) develop guidelines for an application process for students 19
120	125		of institutions of higher education for the allocation of funds granted pursuant 20
121	126		to this section and (ii) prioritize awarding funds based the degree of need in 21
122	127		the State for the designated coursework, degree, or certification for which the 22
123	128		scholarship is sought. The scholarship assistance program shall include 23
124	129		financial assistance for workers in the energy sector that have been displaced 24
125	130		by the closure of a coal-fired plant that are seeking to transition skills to 25
126	131		nuclear energy generation and technologies. 26
127	132		(4) Veteran initiative. – In conjunction with The University of North Carolina, the 27
128	133		Community Colleges System Office, and the Department of Military and 28
129	134		Veterans Affairs, the Department shall develop a fast-track initiative for 29
130	135		qualifying veterans to facilitate and expedite training, licensure, and transition 30
131	136		into civilian nuclear energy careers. A qualifying veteran is a veteran of a 31
132	137		branch of the armed forces of the United States, with priority being given to 32
133	138		those having naval or other nuclear operations experience. The initiative shall 33
134	139		include a scholarship component for veterans attending institutions of higher 34
135	140		education in this State to offset the cost of relocation, tuition and materials for 35
136	141		degrees, licensure, or certifications in nuclear engineering and related nuclear 36
137	142		technologies, certification exams, and specialized career coaching. The 37
138	143		Department shall (i) develop guidelines for an application process for 38
139	144		qualifying veterans for the allocation of funds granted pursuant to this section 39
140	145		and (ii) prioritize awarding funds based on relevance of nuclear operations in 40
141	146		military service and financial- and merit-based factors determined by the 41
142	147		Department. 42
143	148		SECTION 1.(b) Nuclear Innovation Zones. – The Department of Commerce, in 43
144	149		collaboration with the Department of Environmental Quality, the Utilities Commission, and any 44
145	150		other State agency or entity the Department of Commerce deems relevant, shall conduct a sbtudy 45
146	151		on the feasibility and potential benefits of establishing Nuclear Innovation Zones in the State. 46
147	152		This study shall include the following: 47
148	153		(1) The feasibility of attracting investment and job creation through regulatory 48
149	154		streamlining of permitting nuclear energy production, including related 49
150	155		manufacturing sectors. 50
151	156		(2) Potential incentives to encourage private-sector participation. 51 General Assembly Of North Carolina Session 2025
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153	158		(3) A review of existing State and federal regulations affecting nuclear energy 1
154	159		development and possible reforms to streamline approval processes while 2
155	160		ensuring public safety. 3
156	161		(4) Site Selection Criteria for potential nuclear energy generating facilities, 4
157	162		including identification of key factors in determining suitable locations such 5
158	163		as proximity to existing energy infrastructure, workforce availability and 6
159	164		training programs, and community impact and local government 7
160	165		considerations. 8
161	166		(5) A review of environmental best practices and necessary safeguards and an 9
162	167		evaluation of potential impacts on air, water, and land use. 10
163	168		(6) A survey of other states' efforts, including examination of successful nuclear 11
164	169		energy development policies and recommendations based on best practices 12
165	170		and lessons learned. 13
166	171		(7) A review of potential State-backed financial mechanisms for nuclear 14
167	172		deployment. 15
168	173		The Department of Commerce shall submit a final report with findings and 16
169	174		recommendations to the Joint Legislative Commission on Energy Policy and the General 17
170	175		Assembly no later than December 31, 2025. 18
171	176		SECTION 2. Article 3J of Chapter 105 of the General Statutes is reenacted as it 19
172	177		existed immediately before its repeal and reads as rewritten: 20
173	178		"Article 3J. 21
174	179		Tax Credits for Growing Businesses. 22
175	180		"§ 105-129.80. Legislative findings. 23
176	181		The General Assembly finds that: 24
177	182		(1) It is the policy of the State of North Carolina to stimulate economic activity 25
178	183		and to create new jobs for the citizens of the State by encouraging and 26
179	184		promoting the expansion of existing business and industry within the State 27
180	185		and by recruiting and attracting new business and industry to the State. 28
181	186		(2) Both short-term and long-term economic trends at the State, national, and 29
182	187		international levels have made the successful implementation of the State's 30
183	188		economic development policy and programs both more critical and more 31
184	189		challenging, and the decline in the State's traditional industries, and the 32
185	190		resulting adverse impact upon the State and its citizens, have been exacerbated 33
186	191		in recent years by adverse national and State economic trends that contribute 34
187	192		to the reduction in the State's industrial base and that inhibit the State's ability 35
188	193		to sustain or attract new and expanding businesses. 36
189	194		(3) The economic condition of the State is not static, and recent changes in the 37
190	195		State's economic condition have created economic distress that requires a 38
191	196		reevaluation of certain existing State programs and the enactment of a new 39
192	197		program as provided in this Article that is designed to stimulate new economic 40
193	198		activity and to create new jobs within the State. 41
194	199		(4) The enactment of this Article is necessary to stimulate the economy and create 42
195	200		new jobs in North Carolina, and this Article will promote the general welfare 43
196	201		and confer, as its primary purpose and effect, benefits on citizens throughout 44
197	202		the State through the creation of new jobs, an enlargement of the overall tax 45
198	203		base, an expansion and diversification of the State's industrial base, and an 46
199	204		increase in revenue to the State and its political subdivisions. 47
200	205		(5) The purpose of this Article is to stimulate economic activity and to create new 48
201	206		jobs within the State. 49
202	207		(6) The State is in need of a focused tax credit program that encourages and 50
203	208		facilitates economic growth and development within the State. 51 General Assembly Of North Carolina Session 2025
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	209	+	DRS15248-MCf-163 Page 5
205	210		(7) The resources of the State are not evenly distributed throughout the State and 1
206	211		different communities have different abilities and needs in attracting and 2
207	212		maintaining new and expanding business and industry. 3
208	213		"§ 105-129.81. (See notes) Definitions. 4
209	214		The following definitions apply in this Article: 5
210	215		(1) Agrarian growth zone. – Defined in G.S. 143B-437.010. 6
211	216		(2) Air courier services. – Defined in G.S. 143B-437.01. 7
212	217		(3) Aircraft maintenance and repair. – The provision of specialized maintenance 8
213	218		or repair services for commercial aircraft or the rebuilding of commercial 9
214	219		aircraft. 10
215	220		(4) Business property. – Tangible personal property that is used in a business and 11
216	221		capitalized by the taxpayer for tax purposes under the Code. 12
217	222		(4a) Clean energy manufacturing. – The manufacture in this State of small modular 13
218	223		reactors, small modular reactor components, reactor modules, or nuclear fuel 14
219	224		assemblies. 15
220	225		(5) Company headquarters. – Defined in G.S. 143B-437.01. 16
221	226		(6) Cost. – In the case of property owned by the taxpayer, cost is determined 17
222	227		pursuant to regulations adopted under section 1012 of the Code. In the case of 18
223	228		property the taxpayer leases from another, cost is value as determined 19
224	229		pursuant to G.S. 105-130.4(j)(2). 20
225	230		(7) Customer service call center. – The provision of support service by a business 21
226	231		to its customers by telephone or other electronic means to support products or 22
227	232		services of the business. For the purposes of this definition, an establishment 23
228	233		is primarily engaged in providing support services by telephone or other 24
229	234		electronic means only if at least sixty percent (60%) of its calls are incoming 25
230	235		or at least sixty percent (60%) of its other electronic communications are 26
231	236		initiated by its customers. 27
232	237		(8) Development tier. – The classification assigned to an area pursuant to 28
233	238		G.S. 143B-437.08. 29
234	239		(9) Electronic shopping and mail order houses. – An industry in electronic 30
235	240		shopping and mail order houses industry group 4541 as defined by NAICS. 31
236	241		(9a) Environmental disqualifying event. – Any of the following occurrences: 32
237	242		a. During the tax year in which the activity occurred for which a credit is 33
238	243		being claimed, a civil penalty was assessed against the taxpayer by the 34
239	244		Department of Environmental Quality for failure to comply with an 35
240	245		order issued by an agency of the Department to abate or remediate a 36
241	246		violation of any program administered by the agency. 37
242	247		b. During the tax year in which the activity occurred for which a credit is 38
243	248		being claimed or in the prior two tax years, any of the following: 39
244	249		1. A finding was made by the Department of Environmental 40
245	250		Quality that the taxpayer knowingly and willfully, as defined 41
246	251		in G.S. 143-215.6B, including all limitations thereto, 42
247	252		committed a violation of any program implemented by an 43
248	253		agency of the Department. 44
249	254		2. An assessment for damages to fish or wildlife pursuant to 45
250	255		G.S. 143-215.3(a)(7) was made against the taxpayer. 46
251	256		3. A judicial order for injunctive relief was issued against the 47
252	257		taxpayer in connection with a violation of any program 48
253	258		implemented by an agency of the Department of 49
254	259		Environmental Quality. 50 General Assembly Of North Carolina Session 2025
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256	261		c. During the tax year in which the activity occurred for which the credit 1
257	262		is being claimed or in the prior four tax years, a criminal penalty was 2
258	263		imposed on the taxpayer in connection with a violation of any program 3
259	264		implemented by an agency of the Department of Environmental 4
260	265		Quality. 5
261	266		(10) Establishment. – Defined in 29 C.F.R. § 1904.46, as it existed on January 1, 6
262	267		2002. 7
263	268		(11) Full-time job. – A position that requires at least 1,600 hours of work per year 8
264	269		and is intended to be held by one employee during the entire year. A full-time 9
265	270		employee is an employee who holds a full-time job. 10
266	271		(12) Hub. – Defined in G.S. 105-164.3. 11
267	272		(13) Information technology and services. – Defined in G.S. 143B-437.01. 12
268	273		(14) Long-term unemployed worker. – An individual that has been totally 13
269	274		unemployed for at least the preceding 26 consecutive weeks as evidenced by 14
270	275		records maintained by the Division of Employment Security (DES) of the 15
271	276		Department of Commerce. 16
272	277		(15) Manufacturing. – Defined in G.S. 143B-437.01. 17
273	278		(16) Motorsports facility. – A motorsports racetrack classified in the United States 18
274	279		racetrack national industry 711212, as defined by NAICS. 19
275	280		(17) Motorsports racing team. – A professional racing team primarily engaged in 20
276	281		the research and development, design, manufacture, repair, maintenance, and 21
277	282		operation of motor vehicles used in live motorsports racing events before a 22
278	283		paying audience. 23
279	284		(18) NAICS. – Defined in G.S. 105-228.90. 24
280	285		(19) New job. – A full-time job that represents a net increase in the number of the 25
281	286		taxpayer's employees statewide. A new employee is an employee who holds 26
282	287		a new job. The term does not include a job currently located in this State that 27
283	288		is transferred to the business from a related member of the business. 28
284	289		(20) Overdue tax debt. – Defined in G.S. 105-243.1. 29
285	290		(20a) Port enhancement zone. – Defined in G.S. 143B-437.013. 30
286	291		(21) Purchase. – Defined in section 179 of the Code. 31
287	292		(21a) Qualifying clean energy manufacturer. – A manufacturer of small modular 32
288	293		reactors, small modular reactor components, reactor modules, or nuclear fuel 33
289	294		assemblies located in this State. 34
290	295		(22) Related member. – Defined in G.S. 105-130.7A. 35
291	296		(23) Research and development. – An industry in scientific research and 36
292	297		development services industry group 5417 as defined by NAICS. 37
293	298		(24) Urban progress zone. – The classification assigned to an area pursuant to 38
294	299		G.S. 143B-437.09. 39
295	300		(25) Warehousing. – Defined in G.S. 143B-437.01. 40
296	301		(26) Wholesale trade. – Defined in G.S. 143B-437.01. 41
297	302		"§ 105-129.82. (See notes) Sunset; studies. 42
298	303		(a) Sunset. – This Article is repealed effective for business activities that occur on or after 43
299	304		January 1, 2014. 44
300	305		(b) Equity Study. – The Department of Commerce shall study the effect of the tax 45
301	306		incentives provided in this Article on tax equity. This study shall include the following: 46
302	307		(1) Reexamining the formula in G.S. 143B-437.08 used to define development 47
303	308		tiers, to include consideration of alternative measures for more equitable 48
304	309		treatment of counties in similar economic circumstances. 49
305	310		(2) Considering whether the assignment of tiers and the applicable thresholds are 50
306	311		equitable for smaller counties. 51 General Assembly Of North Carolina Session 2025
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308	313		(3) Compiling any available data on whether expanding North Carolina 1
309	314		businesses receive fewer benefits than out-of-State businesses that locate to 2
310	315		North Carolina. 3
311	316		(c) Impact Study. – The Department of Commerce shall study the effectiveness of the tax 4
312	317		incentives provided in this Article. This study shall include: 5
313	318		(1) Studying the distribution of tax incentives across new and expanding 6
314	319		businesses and industries. 7
315	320		(2) Examining data on economic recruitment for the period from 2005 through 8
316	321		the most recent year for which data are available by county, by industry type, 9
317	322		by size of investment, and by number of jobs, and other relevant information 10
318	323		to determine the pattern of business locations and expansions before and after 11
319	324		the enactment of this Article. 12
320	325		(3) Measuring the direct costs and benefits of the tax incentives. 13
321	326		(4) Compiling available information on the current use of incentives by other 14
322	327		states and whether that use is increasing or declining. 15
323	328		(d) Report. – The Department of Commerce shall report the results of these studies and 16
324	329		its recommendations to the General Assembly biennially with the first report due by June 1, 17
325	330		2009.2026. 18
326	331		"§ 105-129.83. Eligibility; forfeiture. 19
327	332		(a) Eligible Business. – A taxpayer is eligible for a credit under this Article only with 20
328	333		respect to activities occurring at an establishmenta location whose primary activity is listed in 21
329	334		this subsection. clean energy manufacturing. The primary activity of an establishmenta location 22
330	335		is determined based on the establishment's location's principal product or group of products 23
331	336		produced or distributed, or services rendered. 24
332	337		(1) Air courier services hub. 25
333	338		(2) Aircraft maintenance and repair. 26
334	339		(3) Company headquarters, but only if the additional eligibility requirements of 27
335	340		subsection (b) of this section are satisfied. 28
336	341		(4) Customer service call centers. 29
337	342		(5) Electronic shopping and mail order houses. 30
338	343		(6) Information technology and services. 31
339	344		(7) Manufacturing. 32
340	345		(8) Motorsports facility. 33
341	346		(9) Motorsports racing team. 34
342	347		(10) Research and development. 35
343	348		(11) Warehousing. 36
344	349		(12) Wholesale trade. 37
345	350		(b) Company Headquarters Eligibility. – A taxpayer is eligible for a credit under this 38
346	351		Article with respect to a company headquarters only if the taxpayer creates at least 75 new jobs 39
347	352		at the company headquarters within a 24-month period. A taxpayer that meets this job creation 40
348	353		requirement is eligible for credits under this Article with respect to the company headquarters for 41
349	354		three taxable years beginning with the year in which the job creation requirement is satisfied. A 42
350	355		taxpayer that creates an additional 75 new jobs at the company headquarters in a 24-month period 43
351	356		during a three-year eligibility period does not qualify for any extended eligibility period. 44
352	357		However, a taxpayer that creates an additional 75 new jobs at the company headquarters in a 45
353	358		24-month period after the completion of a three-year eligibility period is eligible for credits with 46
354	359		respect to the company headquarters for an additional three taxable years beginning in the year 47
355	360		in which the additional job creation requirement is satisfied. 48
356	361		(c) Wage Standard. – A taxpayer is eligible for a credit under this Article in a 49
357	362		development tier two or three area only if the taxpayer satisfies a wage standard. The taxpayer is 50
358	363		not required to satisfy a wage standard if the activity occurs in a development tier one area. Jobs 51 General Assembly Of North Carolina Session 2025
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360	365		that are located within an urban progress zone, a port enhancement zone, or an agrarian growth 1
361	366		zone but not in a development tier one area satisfy the wage standard if they pay an average 2
362	367		weekly wage that is at least equal to ninety percent (90%) of the lesser of the average wage for 3
363	368		all insured private employers in the State and the average wage for all insured private employers 4
364	369		in the county. All other jobs satisfy the wage standard if they pay an average weekly wage that 5
365	370		is at least equal to the lesser of one hundred ten percent (110%) of the average wage for all 6
366	371		insured private employers in the State and ninety percent (90%) of the average wage for all 7
367	372		insured private employers in the county. The Department of Commerce shall annually publish 8
368	373		the wage standard for each county. 9
369	374		In making the wage calculation, the taxpayer shall include any jobs that were filled for at 10
370	375		least 1,600 hours during the calendar year the taxpayer engages in the activity that qualifies for 11
371	376		the credit even if those jobs are not filled at the time the taxpayer claims the credit. For a taxpayer 12
372	377		with a taxable year other than a calendar year, the taxpayer shall use the wage standard for the 13
373	378		calendar year in which the taxable year begins. Only full-time jobs are included when making 14
374	379		the wage calculation. 15
375	380		(d) Health Insurance. – A taxpayer is eligible for a credit under this Article only if the 16
376	381		taxpayer provides health insurance for all of the full-time jobs at the establishment location with 17
377	382		respect to which the credit is claimed when the taxpayer engages in the activity that qualifies for 18
378	383		the credit. For the purposes of this subsection, a taxpayer provides health insurance if it pays at 19
379	384		least fifty percent (50%) of the premiums for health care coverage that equals or exceeds the 20
380	385		minimum provisions of the basic health care plan of coverage recommended by the Small 21
381	386		Employer Carrier Committee pursuant to G.S. 58-50-125.requirements for small group health 22
382	387		benefit plans under State or federal law. 23
383	388		Each year that a taxpayer claims a credit or carryforward of a credit allowed under this 24
384	389		Article, the taxpayer shall provide with the tax return the taxpayer's certification that the taxpayer 25
385	390		continues to provide health insurance for all the jobs at the establishment location with respect 26
386	391		to which the credit was claimed. If the taxpayer ceases to provide health insurance for the jobs 27
387	392		during a taxable year, the credit expires, and the taxpayer may not take any remaining installment 28
388	393		or carryforward of the credit.expires. 29
389	394		(e) Environmental Impact. – A taxpayer is eligible for a credit allowed under this Article 30
390	395		only if the taxpayer certifies that, at the time the taxpayer claims the credit, there has not been a 31
391	396		final determination unfavorable to the taxpayer with respect to an environmental disqualifying 32
392	397		event. For the purposes of this section, a "final determination unfavorable to the taxpayer" occurs 33
393	398		when there is no further opportunity for the taxpayer to seek administrative or judicial appeal, 34
394	399		review, certiorari, or rehearing of the environmental disqualifying event and the disqualifying 35
395	400		event has not been reversed or withdrawn. No later than January 31 of each year, the Secretary 36
396	401		of Environmental Quality shall provide an annual report to the Department listing all 37
397	402		environmental disqualifying events for which a final determination unfavorable to the taxpayer 38
398	403		was made in the prior calendar year and shall provide the name of the taxpayer involved and the 39
399	404		date that the disqualifying event occurred. 40
400	405		(f) Safety and Health Programs. – A taxpayer is eligible for a credit allowed under this 41
401	406		Article only if the taxpayer certifies that, as of the time the taxpayer claims the credit, at the 42
402	407		establishment location with respect to which the credit is claimed, the taxpayer has no citations 43
403	408		under the Occupational Safety and Health Act that have become a final order within the past 44
404	409		three years for willful serious violations or for failing to abate serious violations. For the purposes 45
405	410		of this subsection, "serious violation" has the same meaning as in G.S. 95-127. The 46
406	411		Commissioner of Labor shall notify the Department of Revenue annually of all employers who 47
407	412		have had these citations become final orders within the past three years. 48
408	413		(g) Overdue Tax Debts. – A taxpayer is not eligible for a credit allowed under this Article 49
409	414		if, at the time the taxpayer claims the credit or an installment or carryforward of the credit, the 50 General Assembly Of North Carolina Session 2025
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411	416		taxpayer has received a notice of an overdue tax debt and that overdue tax debt has not been 1
412	417		satisfied or otherwise resolved. 2
413	418		(h) Expiration. – If, during the period that installments of a credit under this Article 3
414	419		accrue, the taxpayer is no longer engaged in one of the types of the business described in 4
415	420		subsection (a) of this section at the establishment location for which the credit was claimed, the 5
416	421		credit expires. If, during the period that installments of a credit under this Article accrue, the 6
417	422		number of jobs of an eligible company headquarters falls below the minimum number required 7
418	423		under subsection (b) of this section, any credit associated with that company headquarters 8
419	424		expires. When a credit expires, the taxpayer may not take any remaining installments of the 9
420	425		credit. The taxpayer may, however, take the portion of an installment that accrued in a previous 10
421	426		year and was carried forward to the extent permitted under G.S. 105-129.84. A change in the 11
422	427		development tier designation of the location of an establishmenta location does not result in 12
423	428		expiration of a credit under this Article. 13
424	429		(i) Forfeiture. – A taxpayer forfeits a credit allowed under this Article if the taxpayer was 14
425	430		not eligible for the credit for the calendar year in which the taxpayer engaged in the activity for 15
426	431		which the credit was claimed. A taxpayer forfeits a credit previously allowed under this Article 16
427	432		if a final determination unfavorable to the taxpayer with respect to an environmental 17
428	433		disqualifying event is made that is applicable to the year in which the activity occurred for which 18
429	434		the credit was claimed. In addition, a taxpayer forfeits a credit for investment in real property 19
430	435		under G.S. 105-129.89 if the taxpayer fails to timely create the number of required new jobs or 20
431	436		to timely make the required level of investment.investment under G.S. 105-129.89(b). A taxpayer 21
432	437		that forfeits a credit under this Article is liable for all past taxes avoided as a result of the credit 22
433	438		plus interest at the rate established under G.S. 105-241.21, computed from the date the taxes 23
434	439		would have been due if the credit had not been allowed. The past taxes and interest are due 30 24
435	440		days after the date the credit is forfeited; a taxpayer that fails to pay the past taxes and interest by 25
436	441		the due date is subject to the penalties provided in G.S. 105-236. 26
437	442		(j) Change in Ownership of Business. – As used in this subsection, the term "business" 27
438	443		means a taxpayer or an establishment.a location. The sale, merger, consolidation, conversion, 28
439	444		acquisition, or bankruptcy of a business, or any transaction by which an existing business 29
440	445		reformulates itself as another business, does not create new eligibility in a succeeding business 30
441	446		with respect to credits for which the predecessor was not eligible under this Article. A successor 31
442	447		business may, however, take any credit or carried-over portion of a credit that its predecessor 32
443	448		could have taken if it had a tax liability. The acquisition of a business is a new investment that 33
444	449		creates new eligibility in the acquiring taxpayer under this Article if any of the following 34
445	450		conditions are met: 35
446	451		(1) The business closed before it was acquired. 36
447	452		(2) The business was required to file a notice of plant closing or mass layoff under 37
448	453		the federal Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 38
449	454		2101, before it was acquired. 39
450	455		(3) The business was acquired by its employees directly or indirectly through an 40
451	456		acquisition company under an employee stock option transaction or another 41
452	457		similar mechanism. For the purpose of this subdivision, "acquired" means that 42
453	458		as part of the initial purchase of a business by the employees, the purchase 43
454	459		included an agreement for the employees through the employee stock option 44
455	460		transaction or another similar mechanism to obtain one of the following: 45
456	461		a. Ownership of more than fifty percent (50%) of the business. 46
457	462		b. Ownership of not less than forty percent (40%) of the business within 47
458	463		seven years if the business has tangible assets with a net book value in 48
459	464		excess of one hundred million dollars ($100,000,000) and has the 49
460	465		majority of its operations located in a development tier one area. 50 General Assembly Of North Carolina Session 2025
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462	467		(k) Advisory Ruling. – A taxpayer may request in writing from the Secretary of Revenue 1
463	468		specific advice regarding eligibility for a credit under this Article. G.S. 105-264 governs the 2
464	469		effect of this advice. A taxpayer may not legally rely upon advice offered by any other State or 3
465	470		local government official or employee acting in an official capacity regarding eligibility for a 4
466	471		credit under this Article. 5
467	472		(l) Planned Expansion. – A taxpayer that signs a letter of commitment with the 6
468	473		Department of Commerce, after the Department has calculated the development tier designations 7
469	474		for the next year but before the beginning of that year, to undertake specific activities at a specific 8
470	475		site within the next two years may calculate the credit for which it qualifies based on the 9
471	476		establishment's location's development tier designation and urban progress zone, port 10
472	477		enhancement zone, or agrarian growth zone designation in the year in which the letter of 11
473	478		commitment was signed by the taxpayer. If the taxpayer does not engage in the activities within 12
474	479		the two-year period, the taxpayer does not qualify for the credit; however, if the taxpayer later 13
475	480		engages in the activities, the taxpayer qualifies for the credit based on the development tier and 14
476	481		urban progress zone, port enhancement zone, or agrarian growth zone designations designation 15
477	482		in effect at that time. 16
478	483		(m) Qualified Capital Intensive Corporations. – A corporation that is a qualified capital 17
479	484		intensive corporation under G.S. 105-130.4(s1) is not eligible for any credit under this Article 18
480	485		with respect to the facility that satisfies the condition of subdivision (2) of that subsection. 19
481	486		"§ 105-129.84. (See notes) Tax election;liability eligibility; cap; carryforwards; limitations. 20
482	487		(a) Tax Election. –Liability Limitation. – The credits provided in this Article are allowed 21
483	488		against the franchise tax levied in Article 3 of this Chapter, the income taxes levied in Article 4 22
484	489		of this Chapter, and the gross premiums tax levied in Article 8B of this Chapter. The taxpayer 23
485	490		may divide a credit between the taxes against which it is allowed. Carryforwards of a credit may 24
486	491		be divided between the taxes against which it is allowed without regard to the original election 25
487	492		regarding the division of the credit. 26
488	493		(b) Cap. – The credits allowed under this Article may not exceed fifty percent (50%) of 27
489	494		the cumulative amount of taxes against which they may be claimed for the taxable year, reduced 28
490	495		by the sum of all other credits allowed against those taxes, except tax payments made by or on 29
491	496		behalf of the taxpayer. This limitation applies to the cumulative amount of credit, including 30
492	497		carryforwards, claimed by the taxpayer under this Article for the taxable year. 31
493	498		(c) Carryforward. – Unless a longer carryforward period applies, any unused portion of 32
494	499		a credit allowed under G.S. 105-129.87 or G.S. 105-129.88 may be carried forward for the 33
495	500		succeeding five years, and any unused portion of a credit allowed under G.S. 105-129.89 may be 34
496	501		carried forward for the succeeding 15 years. If the Secretary of Commerce makes a written 35
497	502		determination that the taxpayer is expected to purchase or lease, and place in service in 36
498	503		connection with an eligible business within a two-year period, at least one hundred fifty million 37
499	504		dollars ($150,000,000) worth of business and real property, any unused portion of a credit under 38
500	505		this Article with respect to the establishment that satisfies that condition may be carried forward 39
501	506		for the succeeding 20 years. If the taxpayer does not make the required level of investment, the 40
502	507		taxpayer shall apply the standard carryforward period rather than the 20-year carryforward 41
503	508		period. 42
504	509		(d) Statute of Limitations. – Notwithstanding Article 9 of this Chapter, a taxpayer shall 43
505	510		claim a credit under this Article within six months after the date set by statute for the filing of the 44
506	511		return, including any extensions of that date. 45
507	512		(e) Credit Treated as Tax Payment. – The owner of a pass-through entity that claims a 46
508	513		credit under this Article may treat some or all of the credit claimed as a tax payment made by or 47
509	514		on behalf of the taxpayer. A credit claimed that is treated as a tax payment is subject to all 48
510	515		provisions of this section. A credit claimed that is treated as a tax payment does not accrue interest 49
511	516		under G.S. 105-241.21 if the payment is determined to be an overpayment. A taxpayer that elects 50 General Assembly Of North Carolina Session 2025
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513	518		to have a credit claimed under this Article treated as a tax payment must make this election when 1
514	519		the return is filed. 2
515	520		"§ 105-129.85. (See notes) Fees and reports. 3
516	521		(a) Fee. – When filing a return for a taxable year in which the taxpayer engaged in activity 4
517	522		for which the taxpayer is eligible for a credit under this Article, the taxpayer shall pay the 5
518	523		Department of Revenue a fee of five hundred dollars ($500.00) for each type ofthe credit the 6
519	524		taxpayer claims or intends to claim with respect to an establishment.a location. The fee is due at 7
520	525		the time the return is due for the taxable year in which the taxpayer engaged in the activity for 8
521	526		which the taxpayer is eligible for a credit. No credit is allowed under this Article for a taxable 9
522	527		year until all outstanding fees have been paid. Fees collected under this section shall be credited 10
523	528		to the General Fund. 11
524	529		(b) Report. – The Department must include in the economic incentives report required by 12
525	530		G.S. 105-256 the following information itemized by credit and by taxpayer: 13
526	531		(1) The number and amount of credits generated and taken for each credit allowed 14
527	532		in this Article. 15
528	533		(2) The number and development tier area of new jobs with respect to which 16
529	534		credits were generated and to which credits were taken. 17
530	535		(3) The cost and development tier area of business property with respect to which 18
531	536		credits were generated and to which credits were taken. 19
532	537		(4) The cost and development tier area of real property investment with respect 20
533	538		to which credits were generated and to which credits were taken. 21
534	539		"§ 105-129.86. (See notes) Substantiation. 22
535	540		(a) Records. – To claim a credit allowed by this Article, the taxpayer shall provide any 23
536	541		information required by the Secretary of Revenue. Every taxpayer claiming a credit under this 24
537	542		Article shall maintain and make available for inspection by the Secretary of Revenue any records 25
538	543		the Secretary considers necessary to determine and verify the amount of the credit to which the 26
539	544		taxpayer is entitled. The burden of proving eligibility for the credit and the amount of the credit 27
540	545		shall rest upon the taxpayer, and no credit shall be allowed to a taxpayer that fails to maintain 28
541	546		adequate records or to make them available for inspection. 29
542	547		(b) Documentation. – Each taxpayer shall provide with the tax return qualifying 30
543	548		information for each credit claimed under this Article. The qualifying information shall be in the 31
544	549		form prescribed by the Secretary and shall be signed and affirmed by the individual who signs 32
545	550		the taxpayer's tax return. The information required by this subsection is information 33
546	551		demonstrating that the taxpayer has met the conditions for qualifying for a credit and any 34
547	552		carryforwards and includes the following: 35
548	553		(1) The physical location of the jobs and investment with respect to which the 36
549	554		credit is claimed, including the street address and the development tier 37
550	555		designation of the establishment.location. 38
551	556		(2) The type of business with respect to which the credit is claimed and the 39
552	557		average weekly wage at the establishment location with respect to which the 40
553	558		credit is claimed. 41
554	559		(3) Any other qualifying information related to a specific credit allowed under 42
555	560		this Article. 43
556	561		"§ 105-129.87. (See notes) Credit for creating jobs. 44
557	562		(a) Credit. – A taxpayer that meets the eligibility requirements set out in G.S. 105-129.83 45
558	563		and satisfies the threshold requirement for new job creation in this State under subsection (b) of 46
559	564		this section during the taxable year is allowed a credit for creating jobs. The amount of the credit 47
560	565		for each new job created is set out in the table below and is based on the development tier 48
561	566		designation of the county in which the job is located. If the job is located in an urban progress 49
562	567		zone, a port enhancement zone, or an agrarian growth zone, the amount of the credit is increased 50
563	568		by one thousand dollars ($1,000) per job. In addition, if a job located in an urban progress zone, 51 General Assembly Of North Carolina Session 2025
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565	570		a port enhancement zone, or an agrarian growth zone is filled by a resident of that zone or by a 1
566	571		long-term unemployed worker, the amount of the credit is increased by an additional two 2
567	572		thousand dollars ($2,000) per job. 3
568	573		Area Development Tier Amount of Credit 4
569	574		Tier One $12,500 5
570	575		Tier Two 5,000 6
571	576		Tier Three 750 7
572	577		(b) Threshold. – The applicable threshold is the appropriate amount set out in the 8
573	578		following table based on the development tier designation of the county where the new jobs are 9
574	579		created during the taxable year. If the taxpayer creates new jobs at more than one eligible 10
575	580		establishment in a county during the taxable year, the threshold applies to the aggregate number 11
576	581		of new jobs created at all eligible establishments within the county during that year. If the 12
577	582		taxpayer creates new jobs at eligible establishments in different counties during the taxable year, 13
578	583		the threshold applies separately to the aggregate number of new jobs created at eligible 14
579	584		establishments in each county. If the taxpayer creates new jobs in an urban progress zone, a port 15
580	585		enhancement zone, or an agrarian growth zone, the applicable threshold is the one for a 16
581	586		development tier one area. New jobs created in an urban progress zone, a port enhancement zone, 17
582	587		or an agrarian growth zone are not aggregated with jobs created at any other eligible 18
583	588		establishments regardless of county. 19
584	589		Area Development Tier Threshold 20
585	590		Tier One 5 21
586	591		Tier Two 10 22
587	592		Tier Three 15 23
588	593		(c) Calculation. – A job is located in a county, an urban progress zone, a port 24
589	594		enhancement zone, or an agrarian growth zone if more than fifty percent (50%) of the employee's 25
590	595		duties are performed in the county or the zone. The number of new jobs a taxpayer creates during 26
591	596		the taxable year is determined by subtracting the average number of full-time employees the 27
592	597		taxpayer had in this State during the 12-month period preceding the beginning of the taxable year 28
593	598		from the average number of full-time employees the taxpayer has in this State during the taxable 29
594	599		year. 30
595	600		(d) Installments. – The credit may not be taken in the taxable year in which the new jobs 31
596	601		are created. Instead, the credit shall be taken in equal installments over the four years following 32
597	602		the taxable year in which the new jobs were created and is conditional upon the continued 33
598	603		maintenance of those jobs by the taxpayer. If, in one of the four years in which the installment of 34
599	604		a credit accrues, a job is no longer filled, the credit with respect to that job expires, and the 35
600	605		taxpayer may not take any remaining installment of the credit with respect to that job. If, in one 36
601	606		of the years in which the installment of a credit accrues, the number of the taxpayer's full-time 37
602	607		employees falls below the sum of the applicable threshold and the number of full-time employees 38
603	608		the taxpayer had in the year before the year in which the taxpayer qualified for the credit, the 39
604	609		credits with respect to all of the new jobs expire, and the taxpayer may not take any remaining 40
605	610		installments of the credits. When a credit expires under this subsection, the taxpayer may, 41
606	611		however, take the portion of an installment that accrued in a previous year and was carried 42
607	612		forward to the extent permitted under G.S. 105-129.84. 43
608	613		(e) Transferred Jobs. – Jobs transferred from one area in the State to another area in the 44
609	614		State are not considered new jobs for purposes of this section. Jobs that were located in this State 45
610	615		and that are transferred to the taxpayer from a related member of the taxpayer are not considered 46
611	616		new jobs for purposes of this section. If, in one of the four years in which the installment of a 47
612	617		credit accrues, the job with respect to which the credit was claimed is moved to an area in a 48
613	618		higher-numbered development tier or out of an urban progress zone, a port enhancement zone, 49
614	619		or an agrarian growth zone, the remaining installments of the credit are allowed only to the extent 50
615	620		they would have been allowed if the job was initially created in the area to which it was moved. 51 General Assembly Of North Carolina Session 2025
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617	622		If, in one of the years in which the installment of a credit accrues, the job with respect to which 1
618	623		the credit was claimed is moved to an area in a lower-numbered development tier or an urban 2
619	624		progress zone, a port enhancement zone, or an agrarian growth zone, the remaining installments 3
620	625		of the credit shall be calculated as if the job had been created initially in the area to which it was 4
621	626		moved. 5
622	627		(f) Wage Standard. – For the purposes of this section, a taxpayer satisfies the wage 6
623	628		standard requirement of G.S. 105-129.83 only if the taxpayer satisfies the requirement with 7
624	629		respect to both the new jobs, considered collectively, for which a credit is claimed and all of the 8
625	630		jobs at the establishment, considered collectively, with respect to which a credit is claimed. 9
626	631		(g) No Double Credit. – A taxpayer may not claim a credit under this section with respect 10
627	632		to jobs for which a taxpayer claims a credit under G.S. 105-129.8. 11
628	633		"§ 105-129.88. (See notes) Credit for investing in business property. 12
629	634		(a) General Credit. – A taxpayer that meets the eligibility requirements set out in 13
630	635		G.S. 105-129.83 and that has purchased or leased business property and placed it in service in 14
631	636		this State during the taxable year and that has satisfied the threshold requirements of subsection 15
632	637		(c) of this section is allowed a credit equal to the applicable percentage of the excess of the 16
633	638		eligible investment amount over the applicable threshold. If the taxpayer places business property 17
634	639		in service in an urban progress zone, a port enhancement zone, or an agrarian growth zone, the 18
635	640		applicable percentage is the one for a development tier one area. Business property is eligible if 19
636	641		it is not leased to another party. The credit may not be taken for the taxable year in which the 20
637	642		business property is placed in service but shall be taken in equal installments over the four years 21
638	643		following the taxable year in which it is placed in service. The applicable percentage is as 22
639	644		follows: 23
640	645		Area Development Tier Applicable Percentage 24
641	646		Tier One 7% 25
642	647		Tier Two 5% 26
643	648		Tier Three 3.5% 27
644	649		(b) Eligible Investment Amount. – The eligible investment amount is the lesser of (i) the 28
645	650		cost of the eligible business property and (ii) the amount by which the cost of all of the taxpayer's 29
646	651		eligible business property that is in service in this State on the last day of the taxable year exceeds 30
647	652		the cost of all of the taxpayer's eligible business property that was in service in this State on the 31
648	653		last day of the base year. The base year is that year, of the three immediately preceding taxable 32
649	654		years, in which the taxpayer had the most eligible business property in service in this State. 33
650	655		(c) Threshold. – The applicable threshold is the appropriate amount set out in the 34
651	656		following table based on the development tier where the eligible business property is placed in 35
652	657		service during the taxable year. If the taxpayer places business property in service in an urban 36
653	658		progress zone, a port enhancement zone, or an agrarian growth zone, the applicable threshold is 37
654	659		the one for a development tier one area. Business property placed in service in an urban progress 38
655	660		zone, a port enhancement zone, or an agrarian growth zone is not aggregated with business 39
656	661		property placed in service at any other eligible establishments regardless of county. If the 40
657	662		taxpayer places eligible business property in service at more than one establishment in a county 41
658	663		during the taxable year, the threshold applies to the aggregate amount of eligible business 42
659	664		property placed in service during the taxable year at all establishments in the county. If the 43
660	665		taxpayer places eligible business property in service at establishments in different counties, the 44
661	666		threshold applies separately to the aggregate amount of eligible business property placed in 45
662	667		service in each county. If the taxpayer places eligible business property in service at an 46
663	668		establishment over the course of a two-year period, the applicable threshold for the second 47
664	669		taxable year is reduced by the eligible investment amount for the previous taxable year. 48
665	670		Area Development Tier Threshold 49
666	671		Tier One $ -0- 50
667	672		Tier Two 1,000,000 51 General Assembly Of North Carolina Session 2025
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	673	+	Page 14 DRS15248-MCf-163
669	674		Tier Three 2,000,000 1
670	675		(d) Expiration. – As used in this subsection, the term "disposed of" means disposed of, 2
671	676		taken out of service, or moved out of State. If, in one of the four years in which the installment 3
672	677		of a credit accrues, the business property with respect to which the credit was claimed is disposed 4
673	678		of, the credit expires, and the taxpayer may not take any remaining installment of the credit for 5
674	679		that business property unless the cost of that business property is offset in the same taxable year 6
675	680		by the taxpayer's new investment in eligible business property placed in service in the same 7
676	681		county, as provided in this subsection. If, during the taxable year, the taxpayer disposed of the 8
677	682		business property for which installments remain, there has been a net reduction in the cost of all 9
678	683		the taxpayer's eligible business property that are in service in the same county as the business 10
679	684		property that was disposed of, and the amount of this reduction is greater than twenty percent 11
680	685		(20%) of the cost of the business property that was disposed of, then the credit for the business 12
681	686		property that was disposed of expires. If the amount of the net reduction is equal to twenty percent 13
682	687		(20%) or less of the cost of the business property that was disposed of, or if there is no net 14
683	688		reduction, then the credit does not expire. In determining the amount of any net reduction during 15
684	689		the taxable year, the cost of business property the taxpayer placed in service during the taxable 16
685	690		year and for which the taxpayer claims a credit under Article 3A or Article 3B of this Chapter 17
686	691		may not be included in the cost of all the taxpayer's eligible business property that is in service. 18
687	692		If in a single taxable year business property with respect to two or more credits in the same county 19
688	693		are disposed of, the net reduction in the cost of all the taxpayer's eligible business property that 20
689	694		is in service in the same county is compared to the total cost of all the business property for which 21
690	695		credits expired in order to determine whether the remaining installments of the credits are 22
691	696		forfeited. 23
692	697		The expiration of a credit does not prevent the taxpayer from taking the portion of an 24
693	698		installment that accrued in a previous year and was carried forward to the extent permitted under 25
694	699		G.S. 105-129.84. 26
695	700		(e) Transferred Property. – If, in one of the four years in which the installment of a credit 27
696	701		accrues, the business property with respect to which the credit was claimed is moved to a county 28
697	702		in a higher-numbered development tier or out of an urban progress zone, a port enhancement 29
698	703		zone, or an agrarian growth zone, the remaining installments of the credit are allowed only to the 30
699	704		extent they would have been allowed if the business property had been placed in service initially 31
700	705		in the area to which it was moved. If, in one of the four years in which the installment of a credit 32
701	706		accrues, the business property with respect to which a credit was claimed is moved to a county 33
702	707		in a lower-numbered development tier or an urban progress zone, a port enhancement zone, or 34
703	708		an agrarian growth zone, the remaining installments of the credit shall be calculated as if the 35
704	709		business property had been placed in service initially in the area to which it was moved. 36
705	710		(f) Wage Standard. – For the purposes of this section, a taxpayer satisfies the wage 37
706	711		standard requirement of G.S. 105-129.83 only if the taxpayer satisfies the requirement with 38
707	712		respect to all of the jobs at the establishment, considered collectively, with respect to which a 39
708	713		credit is claimed. 40
709	714		(g) No Double Credit. – A taxpayer may not claim a credit under this section with respect 41
710	715		to business property for which the taxpayer claims a credit under G.S. 105-129.9 or 42
711	716		G.S. 105-129.9A. 43
712	717		"§ 105-129.89. (See notes) Credit for investment in real property. 44
713	718		(a) Credit. – If a taxpayer that has purchased or leased real property in a development tier 45
714	719		one area begins to use the property in an eligible business during the taxable year, the taxpayer 46
715	720		is allowed a credit equal to thirty percent (30%) of the eligible investment amount if all of the 47
716	721		eligibility requirements of G.S. 105-129.83 and of subsection (b) of this section are met. For the 48
717	722		purposes of this section, property is located in a development tier one area if the area the property 49
718	723		is located in was a development tier one area at the time the taxpayer made a written application 50
719	724		for the determination required under subsection (b) of this section. The eligible investment 51 General Assembly Of North Carolina Session 2025
720		-	~~Senate Bill 546-First Edition~~ Page 15
	725	+	DRS15248-MCf-163 Page 15
721	726		amount is the lesser of (i) the cost of the property and (ii) the amount by which the cost of all of 1
722	727		the real property the taxpayer is using in this State in an eligible business on the last day of the 2
723	728		taxable year exceeds the cost of all of the real property the taxpayer was using in this State in an 3
724	729		eligible business on the last day of the base year. The base year is that year, of the three 4
725	730		immediately preceding taxable years, in which the taxpayer was using the most real property in 5
726	731		this State in an eligible business. In the case of property that is leased, the cost of the property is 6
727	732		not determined as provided in G.S. 105-129.81 but is considered to be the taxpayer's lease 7
728	733		payments over a seven-year period, plus any expenditures made by the taxpayer to improve the 8
729	734		property before it is used by the taxpayer if the expenditures are not reimbursed or credited by 9
730	735		the lessor. The entire credit may not be taken for the taxable year in which the property is first 10
731	736		used in an eligible business but shall be taken in equal installments over the seven years following 11
732	737		the taxable year in which the property is first used in an eligible business. When part of the 12
733	738		property is first used in an eligible business in one year and part is first used in an eligible business 13
734	739		in a later year, separate credits may be claimed for the amount of property first used in an eligible 14
735	740		business in each year. The basis in any real property for which a credit is allowed under this 15
736	741		section shall be reduced by the amount of credit allowable. 16
737	742		(b) Determination by the Secretary of Commerce. – A taxpayer is eligible for the credit 17
738	743		allowed under this section with respect to an establishment only if the Secretary of Commerce 18
739	744		makes a written determination that the taxpayer is expected to purchase or lease and use in an 19
740	745		eligible business at that establishment within a three-year period at least ten million dollars 20
741	746		($10,000,000) of real property and that the establishment that is the subject of the credit will 21
742	747		create at least 200 new jobs within two years of the time that the property is first used in an 22
743	748		eligible business. If the taxpayer fails to timely make the required level of investment or fails to 23
744	749		timely create the required number of new jobs, the taxpayer forfeits the credit as provided in G.S. 24
745	750		105-129.83. 25
746	751		(c) Mixed Use Property. – If the taxpayer uses only part of the property in an eligible 26
747	752		business, the amount of the credit allowed under this section is reduced by multiplying it by a 27
748	753		fraction, the numerator of which is the square footage of the property used in an eligible business 28
749	754		and the denominator of which is the total square footage of the property. 29
750	755		(d) Expiration. – If, in one of the seven years in which the installment of a credit accrues, 30
751	756		the property with respect to which the credit was claimed is no longer used in an eligible business, 31
752	757		the credit expires, and the taxpayer may not take any remaining installment of the credit. If, in 32
753	758		one of the seven years in which the installment of a credit accrues, part of the property with 33
754	759		respect to which the credit was claimed is no longer used in an eligible business, the remaining 34
755	760		installments of the credit shall be reduced by multiplying it by the fraction described in subsection 35
756	761		(c) of this section. If, in one of the years in which the installment of a credit accrues and by which 36
757	762		the taxpayer is required to have created 200 new jobs at the property, the total number of 37
758	763		employees the taxpayer employs at the property with respect to which the credit is claimed is less 38
759	764		than 200, the credit expires, and the taxpayer may not take any remaining installment of the 39
760	765		credit. 40
761	766		In each of these cases, the taxpayer may nonetheless take the portion of an installment that 41
762	767		accrued in a previous year and was carried forward to the extent permitted under G.S. 42
763	768		105-129.84. 43
764	769		(e) No Double Credit. – A taxpayer may not claim a credit under this section with respect 44
765	770		to real property for which a credit is claimed under G.S. 105-129.12 or G.S. 105-129.12A. 45
766	771		"§ 105-129.90. Credit for clean energy manufacturing. 46
767	772		(a) Credit. – A qualifying clean energy manufacturer that (i) meets the eligibility 47
768	773		requirements set out in G.S. 105-129.83 and (ii) satisfies the requirements for new job creation 48
769	774		and investment under this subsection during the taxable year is allowed a credit for clean energy 49
770	775		manufacturing. The amount of the credit is equal to a percentage of the qualifying clean energy 50 General Assembly Of North Carolina Session 2025
771		-	Page 16 ~~Senate Bill 546-First Edition~~
	776	+	Page 16 DRS15248-MCf-163
772	777		manufacturer's cumulative amount of income taxes for the taxable year for a number of years, as 1
773	778		follows: 2
774	779		Job Threshold Investment Threshold Years of Credit 3
775	780		25 $1,500,000 3 4
776	781		50 $2,500,000 4 5
777	782		100 $5,000,000 5 6
778	783		The applicable percentage is fifty percent (50%) if the location is a retired fossil fuel plant 7
779	784		site located in the State with existing transmission infrastructure and cooling water access, and 8
780	785		the applicable percentage is thirty percent (Y30) for any other location. 9
781	786		(b) Job Calculation Provisions. – The following provisions apply to the job threshold 10
782	787		provided in subsection (a) of this section: 11
783	788		(1) If the taxpayer creates new jobs at more than one eligible location 12
784	789		establishment in the State during the taxable year, the threshold applies to the 13
785	790		aggregate number of new jobs created at all eligible locations establishments 14
786	791		within the eligible counties during that year. 15
787	792		(2) A job is located in a county if more than fifty percent (50%) of the employee's 16
788	793		duties are performed in the county. The number of new jobs a taxpayer creates 17
789	794		during the taxable year is determined by subtracting the average number of 18
790	795		full-time employees the taxpayer had in this State during the 12-month period 19
791	796		preceding the beginning of the taxable year from the average number of 20
792	797		full-time employees the taxpayer has in this State during the taxable year. 21
793	798		(3) Jobs transferred from one area in the State to another area in the State are not 22
794	799		considered new jobs for purposes of this section. Jobs that were located in this 23
795	800		State and that are transferred to the taxpayer from a related member of the 24
796	801		taxpayer are not considered new jobs for purposes of this section. If the job 25
797	802		with respect to which the credit was claimed is moved to a development tier 26
798	803		three area, the remaining installments of the credit are not allowed. 27
799	804		(4) For the purposes of this section, a taxpayer satisfies the wage standard 28
800	805		requirement of G.S. 105-129.83 only if the taxpayer satisfies the requirement 29
801	806		with respect to both the new jobs, considered collectively, for which a credit 30
802	807		is claimed and all of the jobs at the location, considered collectively, with 31
803	808		respect to which a credit is claimed. 32
804	809		(c) Investment Provisions. – The following provisions apply to the investment threshold 33
805	810		provided in subsection (a) of this section: 34
806	811		(1) The investment threshold with private funds invested in the form of (i) 35
807	812		purchasing or leasing business property and placing it in service in this State 36
808	813		during the taxable year or (ii) purchasing or leasing real property in this State 37
809	814		and beginning to use the property during the taxable year. 38
810	815		(2) Business property is eligible if it is not leased to another party. The eligible 39
811	816		investment amount is the lesser of (i) the cost of the eligible business property 40
812	817		and (ii) the amount by which the cost of all of the taxpayer's eligible business 41
813	818		property that is in service in this State on the last day of the taxable year 42
814	819		exceeds the cost of all of the taxpayer's eligible business property that was in 43
815	820		service in this State on the last day of the base year. The base year is that year, 44
816	821		of the three immediately preceding taxable years, in which the taxpayer had 45
817	822		the most eligible business property in service in this State. If the taxpayer 46
818	823		places eligible business property in service at locations in different counties 47
819	824		and some of the locations are in development tier three areas, the investment 48
820	825		calculation will be reduced proportionately. If the taxpayer places eligible 49
821	826		business property in service at a location over the course of more than one 50 General Assembly Of North Carolina Session 2025
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	827	+	DRS15248-MCf-163 Page 17
823	828		year, the applicable threshold for each subsequent taxable year is reduced by 1
824	829		the eligible investment amount for the previous taxable years. 2
825	830		(3) Real property is located in the development tier area applicable to the county 3
826	831		at the time the taxpayer made a written application for the determination 4
827	832		required under this Article. The eligible investment amount is the lesser of (i) 5
828	833		the cost of the property and (ii) the amount by which the cost of all of the real 6
829	834		property the taxpayer is using in this State in an eligible business on the last 7
830	835		day of the taxable year exceeds the cost of all of the real property the taxpayer 8
831	836		was using in this State in an eligible business on the last day of the base year. 9
832	837		The base year is that year, of the three immediately preceding taxable years, 10
833	838		in which the taxpayer was using the most real property in this State in an 11
834	839		eligible business. In the case of property that is leased, the cost of the property 12
835	840		is considered to be the taxpayer's lease payments for the years for which the 13
836	841		credit is given, plus any expenditures made by the taxpayer to improve the 14
837	842		property before it is used by the taxpayer if the expenditures are not 15
838	843		reimbursed or credited by the lessor. When part of the property is first used in 16
839	844		one year and part is first used in a later year, separate credits may be claimed 17
840	845		for the amount of property first used in an eligible business in each year. The 18
841	846		basis in any real property for which a credit is allowed under this section shall 19
842	847		be reduced by the amount of credit allowable. If the taxpayer uses only part 20
843	848		of the property in clean energy manufacturing, the amount of the credit 21
844	849		allowed under this section is reduced by multiplying it by a fraction, the 22
845	850		numerator of which is the square footage of the property used in clean energy 23
846	851		manufacturing and the denominator of which is the total square footage of the 24
847	852		property. 25
848	853		(4) If, in one of the years in which the credit remains, the property with respect to 26
849	854		which the credit was claimed is no longer used in clean energy manufacturing, 27
850	855		the credit expires and the taxpayer is not allowed the credit in any years 28
851	856		remaining. If, in one of the years in which the credit remains, a part of the 29
852	857		property with respect to which the credit was claimed is no longer used in 30
853	858		clean energy manufacturing and that amount reduces the number of years 31
854	859		calculated for the credit, only remaining years for the lower calculation may 32
855	860		be claimed." 33
856	861		SECTION 3. Section 2 of this act is effective for taxable years beginning on or after 34
857	862		January 1, 2025. The remainder of this act is effective when it becomes law. 35