Image Credit: @NovonixBattery / X
***Note from The Tennessee Conservative – this article posted here for informational purposes only.
The Center Square [By Kim Jarrett] –
The Tennessee Department of Economic and Community Development is asking a Chattanooga company to return a $3 million FastTrack grant after the company failed to create the number of jobs it promised.
Novonix, known as PUREGraphite at the time of the 2021 contract, said it would create 290 new jobs as a condition of receiving the grant. The company only created 85 jobs, 29% of what it promised.
A June 11 letter to the company from Tennessee officials provided to The Center Square said the company has 45 days to repay the money. Any unpaid amount will accrue interest.
According to a template Accountability Agreement for Tennessee’s FastTrack grants provided by the Economic and Community Development Department, a company that creates less than 90% of its pledged new jobs must repay a proportional amount of the grant award. A company that creates less than 50% must repay the entire grant.
The clawback agreements are a safety net if the companies don’t hold up their end of the bargain when receiving the grants.
“At the end of the day, the state has a contract with these companies,” Economic and Community Development Commissioner Stuart McWhorter said in an interview with The Center Square. “And these are taxpayer dollars that we take seriously when we do this.”
A $30 million FastTrack grant awarded to Starbucks in May has raised questions about accountability if the companies awarded the grants do not fulfill their obligations.
The state has asked 70 companies to repay part or all of their grants since the program began, according to the department.
Without naming names, a 2024 report from the state comptroller says the state sought $22.5 million back from 14 companies between 2016 and early 2024. Ten of those companies fought the state in court. Tennessee collected $14.4 million. Another $8.1 million was still owed.
Seven companies went bankrupt or dissolved before paying, with $7.9 million in taxpayer money declared uncollectible, the audit says.
FastTrack grant statutes were passed by lawmakers in 2005 and included the FastTrack Job Training Assistance Program and Infrastructure Development grants, the Economic and Community Development Department said in an email to The Center Square. The economic development grants were added in 2012. The accountability agreements were added in 2014, but the department was already doing them by the time the statute was passed, according to the department.
Novonix also received a $150 million grant from the U.S. Department of Energy in 2022, according to a previous report. The grant was tied to the company’s plans to build a Chattanooga plant to produce 30,000 metric tons of graphite per year for the electric vehicle industry, using raw materials primarily sourced in the U.S. Novonix planned to spend $877.3 million on the expansion, according to the report.
The company is also receiving $103 million in tax credits from the U.S. Government’s Section 48C Advanced Energy Project Credit Program, the company announced in April. The funding is contingent upon Novinix producing its 11,000 tonnes per annum before April 7, 2028.
The Center Square was unsuccessful prior to publication getting comment from Novonix.
