Bill Text: NC S591 | 2017-2018 | Regular Session | Amended
Bill Title: Site and Building Development Fund
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2017-04-05 - Ref To Com On Rules and Operations of the Senate [S591 Detail]
Download: North_Carolina-2017-S591-Amended.html
GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2017
S 1
SENATE BILL 591
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Short Title: Site and Building Development Fund. |
(Public) |
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Sponsors: |
Senators Gunn, Horner, McInnis (Primary Sponsors); Ford and Smith-Ingram. |
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Referred to: |
Rules and Operations of the Senate |
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April 5, 2017
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.
The General Assembly of North Carolina enacts:
SECTION 1. Article 10 of Chapter 143B of the General Statutes is amended by adding a new section to read:
"§ 143B‑437.022. Site and Building Development Fund.
(a) Definitions. – The following definitions apply in this section:
(1) Code. – Defined in G.S. 105‑228.90.
(2) Department. – The Department of Commerce.
(3) Development plan. – A strategic analysis of potential qualified business facilities required by this section to be maintained by the Department and updated every four years.
(4) Fund. – The Site and Building Development Fund established in this section.
(5) Local government. – Any of the following:
a. A city as defined in G.S. 160A‑1.
b. A county.
c. A consolidated city‑county as defined in G.S. 160B‑2.
(6) Local government unit. – The term includes a local government, a nonprofit economic development corporation, and any combination of local governments or nonprofit economic development corporations.
(7) Long‑term lease. – A lease agreement with a maximum duration exceeding three years, including any extensions allowed by the lease agreement.
(8) Nonprofit economic development corporation. – A corporation meeting all of the following requirements:
a. Exempt from income tax under section 501(c)(3) or 501(c)(6) of the Code.
b. Established to assist one or more local governments in reducing the burden of economic development efforts.
c. Acknowledged through a resolution of one or more local governments that contains all of the following:
1. Statement that the corporation is acting in support of the local government in economic development efforts.
2. Nonbinding pledge to repay the Fund if the corporation fails to make any required loan payments.
(9) Qualified business facilities. – Real property, improvements to real property, and planned improvements to real property. Improvements to real property include the following:
a. New buildings, renovations to buildings, and upfitting buildings.
b. Water lines, sewer lines, and other utility improvements.
c. Roads, grading, signage, and other access improvements.
d. Measures necessary for permitting, including services.
e. Any other measures necessary for the land to be marketable for immediate use in commercial operations, including necessary services.
(10) Sale. – Any transfer of ownership, including involuntary transfers.
(b) Fund Established. – The Site and Building Development Fund is created as a restricted reserve in the Department. The Fund does not revert but remains available to the Department for the purposes of this section.
(c) Use of the Fund. – The Department shall use the Fund for the following purposes:
(1) Loans to local government units for the acquisition and development of qualified business facilities in accordance with this section.
(2) Expenses directly related to the operation of the Fund and administering loans from the Fund, including the cost of the development plan required by this section.
(d) Application. – The Department shall require a local government unit to submit an application in order for a project to be considered for a loan from the Fund. The Department shall prescribe the form of the application, the application process, and the information to be provided, including all information necessary to evaluate the qualified business facility in accordance with this section.
(e) Selection. – The Department shall administer the selection of qualified business facilities to receive loans from the Fund. The Department shall develop written guidelines to identify and evaluate qualified business facilities. The Department shall issue written findings addressing any application approved for a loan from the Fund. The Department shall consider the following factors in approving applications for loans from the Fund:
(1) Consistency with the economic development goals of the State and of the area where the qualified business facility will be located.
(2) The Department shall consider, but is not bound by, the priority recommendations in the development plan.
(3) Preference for qualified business facilities located in rural or less‑developed areas of the State.
(4) Evaluation of the application to determine if the qualified business facilities are merited and appropriate for the proposed use.
(5) Necessity of a loan from the Fund for the completion of the qualified business facility.
(f) Development Plan. – The Department shall obtain a strategic analysis of potential qualified business facilities and an update to the analysis every four years. The Department shall contract with another entity with demonstrated experience in site selection services for businesses and in evaluating sites for business recruitment purposes.
(g) Awards. – If the Department approves an application for a qualified business facility, the Department shall determine the amount of the loan from the Fund, the preferred form and details of the loan participation, and the safeguards to protect the State's investment.
(h) Maximum Award to Tier Three Counties. – The maximum outstanding loan balance from the Fund to qualified business facilities located in tier three counties, based on the designation assigned pursuant to G.S. 143B‑437.08, shall be thirty percent (30%) of the difference between the cumulative total appropriations into the Fund and total expenses paid from the Fund.
(i) Loan Terms. – Loans from the Fund shall meet the following requirements:
(1) The loan is evidenced by a promissory note and secured by a first deed of trust on the qualified business facility.
(2) The maximum duration of a loan is 15 years.
(3) The loan is due upon the sale or long‑term lease of the qualified business facility. Principal and accrued interest must be paid when the loan is due or more frequently.
(4) The interest rate of a loan is zero percent (0%) for tier one counties, one percent (1%) for tier two counties, and two percent (2%) for tier three counties, based on the designation assigned to counties pursuant to G.S. 143B‑437.08.
(5) The loan agreement shall require the local government unit to obtain from any entity leasing or purchasing the qualified business facility the following:
a. An agreement that the entity will not use the qualified business facility for retail, professional office, sporting event, museum, or governmental purposes for at least five years after the lease or purchase.
b. A legal opinion based on a search of public records that the entity leasing or purchasing the qualified business facility has no debts related to unpaid taxes.
(j) Multiple Loans. – One or more financial institutions may hold a security interest on the qualified business facility with a priority equal to the security interest for the loan from the Fund if there is a written intercreditor agreement between the Department and other equal priority creditors that provides that, in the event of default, any loss is shared among the creditors in proportion to the amount loaned.
(k) Payments. – The Department shall be responsible for monitoring the loan and administering the repayment. The Department shall remit all amounts paid under this section to the Fund.
(l) Release. – The Department, at its discretion, may release property from the first deed of trust if adequate security remains for the outstanding balance of the loan from the Fund. The Department may use this authority to release property to restructure the terms of the loan and participate in financing transactions involving the qualified business facility.
(m) Limitation. – 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.
(n) Notice of Guidelines. – At least 20 days before the effective date of any guidelines, the Department shall publish the proposed guidelines on the Department's Web site and provide notice to persons who have requested notice. In addition, the Department shall accept 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. Amendments to the guidelines to correct spelling, grammatical, or typographical errors do not require notice.
(o) Reports. – On September 1 of each year until the Fund has no assets, the Department shall submit a written report on the Fund to the Joint Legislative Commission on Governmental Operations and publish this report on its Web site. This report shall contain at least all of the following:
(1) A listing of each outstanding loan, including the date of loan, amount of loan, outstanding amount of loan, interest rate, maturity date, location of qualified business facility acting as security, brief property description, identity of local government unit receiving the loan, status of repayment, current use of the qualified business facility, and identification of loans made since the last report.
(2) Written findings addressing any application approved for a loan from the Fund since the last report, as required by subsection (e) of this section.
(3) Detailed information about any defaults and repayment since the last report.
(4) Information contained in the report required by G.S. 105‑277.15A(g)."
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:
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(29) The Department of Commerce in developing criteria and guidelines under G.S. 143B‑437.021."
SECTION 3. The provisions of this act are not subject to the terms of G.S. 160A‑20.
SECTION 4. This act does not obligate the General Assembly to appropriate funds to implement it.
SECTION 5. This act is effective when it becomes law.
