Bill Text: NC H1135 | 2013-2014 | Regular Session | Amended
Bill Title: Business Facilities Development
Spectrum: Partisan Bill (Republican 7-0)
Status: (Introduced - Dead) 2014-06-18 - Re-assigned To Commerce and Job Development [H1135 Detail]
Download: North_Carolina-2013-H1135-Amended.html
GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2013
H 1
HOUSE BILL 1135
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Short Title: Business Facilities Development. |
(Public) |
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Sponsors: |
Representatives Stam, Murry, and Jeter (Primary Sponsors). For a complete list of Sponsors, refer to the North Carolina General Assembly Web Site. |
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Referred to: |
Finance, if favorable, Appropriations. |
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May 21, 2014
A BILL TO BE ENTITLED
AN ACT to create a fund to provide loans to local government units for the development of sites and buildings, As recommended by the North Carolina Economic Development Board.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 143B‑437.02 reads as rewritten:
"§ 143B‑437.02. Site infrastructure development.
…
(b) Fund. – The Site Infrastructure and
Building Development Fund is created as a restricted reserve in the
Department. Funds in the fund do not revert but remain available to the
Department for these purposes. The Department may use the funds in the fund
only for the following purposes:
(1) For site development the
acquisition and development of sites and buildings in accordance with this
section.
(2) To acquire options and hold options for
the purchase of land in accordance with subsection (m) of this section.
(c) Definitions. – The definitions in G.S. 143B‑437.51 apply in this section. In addition, the following definitions apply in this section:
(1) Department. – The Department of Commerce.
(2) Site or building development. – A
subsidized loan to one or more local government units to enable the unit or
units, individually or pursuant to a multijurisdictional agreement, to acquire
land or buildings or to improve land, including constructing buildings or
renovating or rehabilitating existing buildings, or to do both in order to
ready the property for lease or sale to a business.Any of the following:
a. A restricted grant or a forgivable loan
made to a business to enable the business to acquire land, improve land, or
both.
b. A grant to one or more State agencies or
nonprofit corporations to enable the grantees to acquire land, improve land, or
both and to lease the property to a business.
c. A grant to one or more local government
units to enable the units to acquire land, improve land, or both and to lease
the property to a business.
(3) Subsidized loan. – A loan from the State, for a term to be determined by the Department, to one or more local government units for site or building development having an interest rate of zero percent (0%) for tier one counties, one percent (1%) for tier two counties, and two percent (2%) for tier three counties.
(d) Eligibility. – To be eligible for consideration
for site or building development for a project, a business must meet
both of the following conditions:a local government unit must execute a
written agreement with the Department that provides for each of the following:
(1) The business will invest at least one hundred
million dollars ($100,000,000) of private funds in the project.A
requirement that the unit obtain from a business leasing or purchasing property
acquired or improved by a subsidized loan an agreement to meet performance
criteria that protects the State's investment and secures the benefits
anticipated by the lease or sale to the business.
(2) The project will employ at least 100 new
employees.A requirement that any performance criteria used by the unit
include, at a minimum, the creation and maintenance for a period of at least
five years of an appropriate level of employment and capital investment by the
business leasing or purchasing property acquired or improved by a subsidized
loan and any other criteria the Department considers appropriate, other than a
wage standard or test.
(3) A requirement that the unit repay the subsidized loan if the business leasing or purchasing property acquired or improved by a subsidized loan fails to meet the performance criteria.
(4) A requirement that the unit enter into an agreement with a business leasing or purchasing property acquired or improved by a subsidized loan, whereby the business agrees to reimburse the unit for any amount of repayment required by subdivision (3) of this subsection and agrees to structure the lease or sale as a conditional grant, revocable lease, or otherwise include terms permitting liquidated damages.
(5) A requirement that the unit enter into an agreement with a business leasing or purchasing property acquired or improved by a subsidized loan, whereby the business agrees to meet the requirements of subsections (f) and (g) of this section.
(6) A requirement that the property acquired or improved by a subsidized loan will not be primarily used for entertainment, retail, professional office, sporting event, museum, or governmental purposes.
(e) Health Insurance. – A business is
eligible for consideration for site development under this section only if the
business provides health insurance for all of the full‑time employees of
the project with respect to which the application is made. For the purposes of
this subsection, a business provides health insurance if it pays at least fifty
percent (50%) of the premiums for health care coverage that equals or exceeds
the minimum provisions of the basic health care plan of coverage recommended by
the Small Employer Carrier Committee pursuant to G.S. 58‑50‑125.
Each year that a contract for site development under this
section is in effect, the business must provide the Department a certification
that the business continues to provide health insurance for all full‑time
employees of the project governed by the contract. If the business ceases to
provide health insurance to all full‑time employees of the project,
Department shall provide for reimbursement of an appropriate portion of the
site development funds provided to the business.
(f) Safety and Health Programs. – In order for a
business to be eligible for consideration forto purchase or lease
site or building development property under this section, the
business must have no citations under the Occupational Safety and Health Act
that have become a final order within the past three years for willful serious
violations or for failing to abate serious violations with respect to the
location for which the grant is made. For the purposes of this subsection, "serious
violation" has the same meaning as in G.S. 95‑127.
(g) Environmental Impact. – A business is eligible for
consideration forto purchase or lease site or building development
property under this part section only if the business
certifies that, at the time of the application,purchase or lease,
the business satisfies the environmental impact standard under G.S. 105‑129.83.
(h) Selection. – The Department shall administer the selection of projects to receive site or building development. The selection process shall include the following components:
(1) Criteria. – The Department must develop criteria to be used to identify and evaluate eligible projects for possible site development.
(2) Initial evaluation. – The Department must evaluate major competitive projects to determine if site development is merited and to determine whether the project is eligible and appropriate for consideration for site development.
(3) Application. – The Department must require a business
local government unit to submit an application in order for a
project to be considered for site development. The Department must prescribe
the form of the application, the application process, and the information to be
provided, including all information necessary to evaluate the project in
accordance with the applicable criteria.
(4) Committee.Development plan. – The Department
must submit to the Economic Investment Committee the applications for projects
the Department considers eligible and appropriate for consideration for site
development. In evaluating each application, the Committee must consider all of
the factors set out in Section 2.1(b) of S.L. 2002‑172.Department,
in evaluating each application, must obtain a strategic business facilities
development analysis of potential sites for development, shell building needs,
special use buildings needs, and buildings to be renovated. The Department
shall obtain the analysis by contracting with another entity with demonstrated
experience in site selection services for businesses and in evaluating sites
and buildings for business recruitment purposes. The Department must consider,
but is not bound by, the priority recommendations in the analysis. The analysis
shall be updated every four years.
(5) Findings. – In order to recommend a project for
site development, the Committee Department must make all of the
following findings:
a. The conditions for eligibility have been met.
b. Site The site or building development
for the project is necessary to carry out the public purposes provided
in subsection (a) of this section.
c. The site or building development project is consistent with the economic development goals of the State and of the area where it will be located.
d. The affected local governments have
participated in recruitment and offered incentives in a manner appropriate to
the project.
e. The price and nature of any real property to be acquired or improved is appropriate to the site or building development project and not unreasonable or excessive.
f. Site developmentA subsidized loan
under this section is necessary for the completion of the site or building
development project in this State.
(6) Recommendations.Awards. – If the Committee
recommends Department approves a project for site or building development,
it must recommend determine the amount of State funds to be
committed, the preferred form and details of the State participation, and the
performance criteria and safeguards to be required in order to protect the
State's investment.
(i) Agreement. – Unless the Secretary of Commerce
determines that the project is no longer eligible or appropriate for site or
building development, the Department Secretary shall enter
into an agreement to provide a subsidized loan for site or building development
within available funds for a project recommended by the Committee.project.
In doing so, consideration shall be given to projects according to the
strategic business facilities development analysis obtained by the Department,
as required by subdivision (4) of subsection (h) of this section. Each site
development agreement is binding and constitutes a continuing contractual
obligation of the State and the business.local government unit.
The site development agreement must include all of the performance
criteria, remedies, and other safeguards recommended determined
necessary by the Committee or required by the Department to secure
the State's investment. Each site development agreement must contain a
provision prohibiting a business local government unit from receiving
a payment or other benefitleasing or selling under the agreement to
a business that at any time when the business has received a notice
of an overdue tax debt and the overdue tax debt has not been satisfied or
otherwise resolved. Nothing in this section constitutes or authorizes a
guarantee or assumption by the State of any debt of any business or authorizes
the taxing power or the full faith and credit of the State to be pledged.
The Department shall cooperate with the Department of Administration and the Attorney General's Office in preparing the documentation for the site development agreement. The Attorney General shall review the terms of all proposed agreements to be entered into under this section. To be effective against the State, an agreement entered into under this section must be signed personally by the Attorney General.
(i1) Subsidized Loans. – Subsidized loans must be evidenced by a promissory note and secured by a deed of trust on the property acquired or improved by the loan. Repayment of a subsidized loan is required on the occurrence of the earlier of (i) the passage of five years from the date the subsidized loan was made or (ii) the property secured by the loan being sold or leased for a period of more than three years, including all options or automatic rights to extend the base term of the lease. The amount of repayment triggered is proportional to the amount of the property sold or leased and shall be calculated by multiplying the loan by a fraction, the numerator of which is the amount of property secured by the loan sold or leased and the denominator of which is the total amount of property subject to the loan. Upon the payment of the amount of the loan calculated to be required by this subsection, a release deed shall be executed and filed for the portion of the property for which the payment was made.
(i2) Multiple Loans. – One or more financial institutions may hold a security interest on the property with a priority equal to the security interest for the subsidized loan if there is a written intercreditor agreement that (i) has been reviewed and approved by the Department and (ii) provides that, in the event of default, any loss is shared among the creditors in proportion to the amount loaned.
(i3) Payments. – The Department shall remit amounts repaid pursuant to subsection (i1) of this section to the Site and Building Development Fund.
(j) Safeguards. – To ensure that public funds are
used only to carry out the public purposes provided in this section, the
Department shall require that each business that receives State‑funded
site development must agree local government unit that leases or sells
property improved by a subsidized loan obtains from the acquiring business an
agreement to meet performance criteria to protect the State's investment
and assure that the projected benefits of the project are secured. The
performance criteria to be required shall include creation and maintenance of
an appropriate level of employment and investment over the term of the
agreement and any other criteria the Department considers appropriate. The
agreement must require the business to repay or reimburse an appropriate
portion of the State funds expended for the site development, based on the
extent of any failure by the business to meet the performance criteria. The
agreement must provide a method for securing these payments from the business,
such as structuring the site development as a conditional grant, a forgivable
loan, or a revocable lease.
(k) Monitoring and Reports. – The Department is responsible for monitoring compliance with the performance criteria under each site development agreement and for administering the repayment in case of default. The Department shall pay for the cost of this monitoring from funds appropriated to it for that purpose or for other economic development purposes.
On September 1 of each year until all funds have been
expended, the Department shall report to the Joint Legislative Commission on
Governmental Operations regarding the Site Infrastructure Development Program.
This report shall include a listing of each agreement negotiated and entered
into during the preceding year, including the name of the business, the
cost/benefit analysis conducted by the Committee during the application
process, a description of the project, and the amount of the site
development incentive expected to be paid under the agreement during the
current fiscal year.year, and the status of any property sold or
leased to a business. The report shall also include detailed information
about any defaults and repayment during the preceding year and the information
contained in the report required by G.S. 105‑277.15A(g). The
Department shall publish this report on its web site and shall make printed
copies available upon request.
(l) Program Guidelines. – The Department shall develop guidelines related to the administration of site infrastructure development, as authorized by this section, and to the selection of projects. At least 20 days before the effective date of any guidelines or nontechnical amendments to guidelines, the Department must publish the proposed guidelines on the Department's Web site and provide notice to persons who have requested notice of proposed guidelines. In addition, the Department must accept oral and written comments on the proposed guidelines during the 15 business days beginning on the first day the Department has completed the notice requirement of this subsection. For purposes of this subsection, a technical amendment is one (i) that corrects a spelling or grammatical error or (ii) that makes a clarification based on public comment and could have been anticipated by the public notice that immediately preceded the public comment.
(m) Options. – The Department of Commerce may
acquire options and hold options for the purchase of land for an anticipated
industrial site if all of the following conditions are met:
(1) The options are necessary to provide a
large, regional industrial site that cannot be assembled by local governments.
(2) The acquisition of the options is
approved by the Committee."
SECTION 2. G.S. 150B‑1(d) is amended by adding a new subdivision to read:
"(d) Exemptions from Rule Making. – Article 2A of this Chapter does not apply to the following:
…
(21) The Department of Commerce in developing criteria and guidelines under G.S. 143B‑437.02.
…."
SECTION 3. There is appropriated from the General Fund to the Department of Commerce the sum of four hundred thousand dollars ($400,000) for the 2014‑2015 fiscal year to be used to contract for the preparation of the strategic business facilities development analysis required by Section 1 of this act.
SECTION 4. The provisions of this act are not subject to the terms of G.S. 160A‑20.
SECTION 5. Subsidized loans undertaken by units of local government are not subject to review and approval by the Local Government Commission under Article 8 of Chapter 159 of the General Statutes.
SECTION 6. This act becomes effective July 1, 2014, and applies to site development agreements entered on or after that date.
