AN ACT TO CREATE A FUND TO PROVIDE LOANS TO LOCAL GOVERNMENT UNITS FOR THE DEVELOPMENT OF SITES AND BUILDINGS.
Enacts new GS 143B-437.022 to create the Site Building and Development Fund (Fund), as a restricted reserve in the Department of Commerce (Department). Provides that the Fund can be used only for providing loans to local government units for the acquisition and development of qualified business facilities, as specified, and for expenses directly related to the operation of the Fund as well as the administration of the approved loans from the Fund, including the costs of the required development plan.
Sets out and defines the terms to be used for the Fund, including development plan, nonprofit economic development corporation, and qualified business facilities. Requires local governments to submit an application for a project to be considered for a loan from the Fund. Directs the Department to prescribe the form of the application, application process, and the information necessary to evaluate the qualified business facility. Requires the Department to develop written guidelines to identify and evaluate qualified business facilities as well as issue written findings for any application approved for a loan. Sets out five factors the Department must consider in approving loan applications, including consistency with the economic development goals of the State and of the area where the qualified business facility will be located, and the necessity of a loan from the Fund for the completion of the qualified business facility.
Requires the Department to obtain a strategic analysis of potential qualified business facilities (Development Plan) and requires the analysis to be updated every four years. The Department must also contract with an entity having demonstrated experience in site selection services for business as well as experience in evaluating sites for business recruitment purposes.
Requires the Department to determine the amount of the loan awarded from the Fund, preferred form, details of the loan participation, and safeguards to protect the State’s investment. Sets the maximum outstanding loan balance from the Fund to qualified business facilities located in tier three counties, based on the designation assigned pursuant to GS 143B-437.08, to be 30% of the differences between the cumulative total appropriations into the Fund and the total expenses paid from the Fund.
Sets out five loan terms that all loans from the Fund must meet, including that the loan is evidenced by a promissory note and secured by a first deed of trust, that the maximum duration of the loan is 15 years, and that the interest rate will be 0% for tier one counties, 1% for tier two counties, and 2% for tier three counties. Allows one or more financial institutions to hold a security interest in the property with priority equal to the security interest for the loan if there is a written intercreditor agreement that provides that any loss, in the event of default, is shared proportionately among the creditors. Provides the Department is responsible for monitoring the loan and repayment and must remit all amounts paid to the Fund. Allows the Department discretion to release property from the first deed of trust and restructure the terms of the loan if adequate security remains for the outstanding balance.
Requires the Department to publish the guidelines for qualified business facilities at least 20 days before the effective date of any guidelines. Directs that the guidelines be published on the Department's Web site and notice be provided to persons who have requested it. Also requires written comments on proposed guidelines to be accepted during the 15 business days that begin after the Department has completed specified notice requirements.
Requires the Department to submit a written report on the Fund to the Joint Legislative Commission on Governmental Operations on September 1 of each year, until the Fund has no assets. The report must also be posted on its website. Sets out what the report, at a minimum, must contain, including lists of all outstanding loans and loan information, written findings that address applications approved for loans, and details about any defaults and repayment.
Amends GS 150B-1(d) to exempt the Department from rulemaking requirements in regards to developing criteria and guidelines as specified above. Further provides that the provisions of this bill are not subject to the terms found in GS 160A-20, concerning security interest of cities and towns.
Establishes that this act does not obligate the General Assembly to appropriate funds to implement the act.
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