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Reprinted with permission from
The Courier=Times Online
Person County’s top industry hunter thinks the county would not have been able to land all of the more than $230 million in new and expanded industry projects committed here during the last two years without the help of the state’s William S. Lee Act.
The Bill Lee Act, as it’s sometimes called, provides credits against state income taxes to new industries that locate in North Carolina and to existing industries that wish to expand, in exchange for attainment of agreed-upon levels of investment and new jobs.
Enacted by the General Assembly in 1996, the Lee Act was scheduled to expire on Dec. 31 of this year. But late last month, the General Assembly passed legislation extending provisions of the Lee Act for another two years.
Glen Newsome, executive director of the Person County Economic Development Commission, welcomes the extension, and is thankful that he will have the Lee Act in his quiver of economic development arrows as Person County targets new industrial projects.
Eight times within the past two years, Newsome has been able to draw on the Lee Act to help successfully solidify deals to Person County’s benefit. Those eight projects add up to more than $237 million of investment and a total of 585 potential new jobs for a county whose unemployment rate has dropped lower than 6.0 percent only once within the last five years.
Not even Newsome is prepared to say that the Lee Act is solely responsible for nailing down those eight projects. But he nonetheless is confident that it was the Lee Act incentives that turned the deal on “some” of them.
The Lee Act and the tax breaks it permits is controversial. Upon its inception, the measure was touted as a means toward helping all North Carolina counties share the wealth from new and expanded industry. Under the act, incentives are weighted heavier for industries that elect to locate in the state’s rural counties. In fact, the state’s 100 counties are subdivided into five tiers, ranging from the wealthiest urban counties in Tier 1 to the poorest rural counties with high unemployment in Tier 5. The incentive for each job created in a Tier 5 county is greater than the incentive allowed for a job in a Tier 1 county.
Person County is in Tier 3.
Opponents of the Lee Act, however, say the state has granted far too much tax relief to companies that didn’t need it and-or didn’t choose to go to North Carolina’s more rural counties.
Nonetheless, Newsome thinks the Lee Act is a big help to Person County and other rural counties as well.
“In today’s economy, as difficult as it is to get a new [industrial] location or expansion, it’s critical to developers in rural counties,” Newsome tells The Courier-Times, referring to the tax relief measure.
“Since it’s inception,” he says, “we [in Person County] have used the Lee Act extensively with our existing industrial firms as well as many new location projects. It is an excellent tool for economic development and one of the few that local developers in rural communities can offer a company on the spot.”
Newsome explains how it works:
“In order to qualify for this incentive, a company must pay 110 percent of the average manufacturing wage of a community, provide health insurance to its employees and meet other criteria.”
Typically, an agreement between the community and the industry sets out the performance criteria, the achievement of which the industry must be able to document at periodic intervals before the county signs off on the incentive for a given period. The total incentive may not exceed 50 percent of the firm’s state income tax obligation.
Newsome details the eight projects that most recently have taken advantage of the Lee Act provisions.
“During the past two years alone,” Newsome says, “the Lee Act has helped Person County with the location and/or expansion of eight industrial projects. The combined new capital investment associated with these project exceeds $230 million. More importantly, these projects have the potential to create over 585 direct new jobs.”
These are the projects:
The General Assembly decided on a two-year extension of the Lee Act in large measure to help land two new industrial projects in the state The Cheesecake Factory, which wants to build a bakery in Nash County that would employ 500 people by 2012, and Dole Food Co., which has proposed a fruit/vegetable processing facility in Gaston County that eventually could employ some 3,000. Dole’s incentive is as yet undetermined, while the Cheesecake Factory is in line for tax credits at about $1.5 million.
The state House passed the Lee Act extension by a 74-44 vote, with Rep. W. A. (Winkie) Wilkins, D-Person, voting with the majority. Over in the Senate, the sole dissenting vote was cast by Sen. Ellie Kinnaird, D-Orange, who also represents Person County.
For his part, Newsome is grateful to have the Lee Act incentive program as a tool he can use for Person County in the highly competitive economic development wars. Looking back on the eight projects for which the act was used here most recently, Newsome says, “Had we not had it, I don’t think some would have located or expanded to Roxboro.”