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State
Government Column for May 2004
J-DIG Continues Attracting
New Industries
North
Carolina’s Jobs Development Investment Grant (J-DIG) program offering state
income tax rebates to targeted industrial prospects has landed three additional
relocation deals since the turn of the year and a total of 10 since its
enactment by the General Assembly one year ago. The latest came March 18 when ZF
Lemforder Corp., an automobile component manufacturing and supply company,
announced it would locate a facility in Newton, in Catawba County, bringing 200
jobs and up to $28.8 million in additional investment to the area.
ZF Lemforder is the car chassis technology division of ZF Friedrichshafen AG, a
worldwide supplier of driveline and chassis technology. Headquartered in
Friedrichshafen, Germany, ZF is among the 15 largest automotive suppliers in the
world. The company has a total workforce of 53,300 at 119 locations in 25
countries, and combined revenues for the group totaled more than $10 billion in
2002.
The company plans to start construction on the new 150,000-square-foot facility,
which is expected to be completed in 2005. ZF will initiate incremental hiring
later this year through the Employment Security Commission. These jobs will have
an average salary of $33,400 per year.
For each year the company meets required performance targets, the state will
provide a grant equal to 65 percent of the personal state withholding taxes
derived from the creation of new jobs. If the company creates the jobs called
for under the agreement and sustains them for 10 years, the agreement could
yield $1.7 million to the company of over the life of the grant.
Two days before the ZF announcement, Unilin, a Belgian manufacturer of glueless
laminate flooring known as Quick-Step, became the ninth J-DIG grant recipient
when it announced it would expand its operations in Davidson County, bringing
330 jobs and up to $80 million in additional investment to the area. The company
plans to start construction on a new building immediately and will initiate
incremental hiring later this year through the Employment Security Commission.
These jobs will have an average salary of $16 per hour.
For each year Unilin meets required performance targets, the state will provide
a grant equal to 60 percent of the personal state withholding taxes derived from
the creation of new jobs. If the company creates the jobs called for under the
agreement and sustains them for 10 years, the agreement could yield maximum
benefits to the company of $2 million over the life of the grant.
On March 15, Verizon Wireless, one of the nation’s leading providers of
wireless communications, became the eighth J-DIG recipient when it announced it
would build a call center in Wilmington, creating up to 1,211 jobs with an
investment of up to $29 million. The company said it expects to complete
construction of the 150,000-square-foot facility by the end of this year.
Verizon said it plans to begin hiring in the spring and will fill 700 jobs this
year, with a total of up to 1,211 positions planned long-term. The jobs come
with a benefits package and salaries starting at $25,000 and up. Under terms of
the J-DIG grant to Verizon, the state will rebate 60 percent of the personal
state withholding taxes paid the by new workers each year in which the company
meets the required performance targets. The agreement could yield as $7.2
million to the company over 10 years.
On March 1, Citi Cards became the seventh J-DIG recipient when it announced it
would expand its operations in Guilford County, bringing 900 jobs and up to $35
million in additional investment to the area. Citi Cards, the nation’s leading
credit card provider, is a division of Citigroup, which has more than 200
million customer accounts and does business in more than 100 countries. The
company plans to start construction on a new building soon and will initiate
incremental hiring later this year. The chosen location is just off I-40 between
Greensboro and Burlington. These jobs will have an average salary of $31,400.
Under the terms of Citi Card’s J-DIG grant, for each year in which the company
meets the required performance targets, the state will provide a grant equal to
60 percent of the personal state withholding taxes derived from the creation of
new jobs. If the company creates the jobs called for under the agreement and
sustains them for 10 years, the agreement could yield maximum benefits to the
company of as much as $5.2 million over the life of the grant.
The Job Development Investment Grant initiative awards up to 15 grants annually
to strategically important new and expanding businesses and industrial projects.
These grants are only awarded to projects whose benefits exceed their costs to
the state and which would not locate in North Carolina without the grant.
Cumulative annual grant amounts are capped at $10 million.
The first Job Development Investment Grant was awarded in May 2003 and has been
responsible for bringing 4,421 new jobs and more than $256 million in investment
in North Carolina. Twenty-five percent of the eligible grant amount for each
announcement made in more prosperous counties will be used to fund the state’s
Industrial Development Fund, a rural infrastructure fund. This fund, which will
be worth $15 million, works toward the fulfillment of Gov. Mike Easley’s
commitment to build One North Carolina.
Supreme Court Upholds Cap on Punitive Damages: The N.C. Supreme Court has
upheld the state’s cap on punitive damage awards, ruling that a Gaston County
jury improperly awarded a couple $23 million for their embarrassment after two
K-Mart security guards accosted them. In the case, Rhyne v. K-Mart Corp., No.
522A02, the high court affirmed a decision by the state Court of Appeals that
the cap on punitive damages does not violate the state constitution.
The General Assembly enacted the cap on punitive damages in 1998, setting the
limit at $250,000 or three times actual damages, whichever is greater. NCCBI was
among the groups advocating the cap as part of a series of tort reforms.
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