Bill Text: NC H797 | 2013-2014 | Regular Session | Amended
Bill Title: Business Facilities Development
Spectrum: Moderate Partisan Bill (Republican 9-1)
Status: (Introduced - Dead) 2013-04-11 - Ref to the Com on Commerce and Job Development, if favorable, Appropriations [H797 Detail]
Download: North_Carolina-2013-H797-Amended.html
GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2013
H 1
HOUSE BILL 797
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Short Title: Business Facilities Development. |
(Public) |
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Sponsors: |
Representatives Jeter, Stam, and Murry (Primary Sponsors). For a complete list of Sponsors, refer to the North Carolina General Assembly Web Site. |
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Referred to: |
Commerce and Job Development, if favorable, Appropriations. |
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April 11, 2013
A BILL TO BE ENTITLED
AN ACT to create a fund to provide loans to local government units for the development of site infrastructure.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 143B‑437.02 reads as rewritten:
"§ 143B‑437.02. Site infrastructure development.
(a) Findings. – The General Assembly finds that:
(1) It is the policy of the State of North Carolina to stimulate economic activity and to create new jobs for the citizens of the State by encouraging and promoting the expansion of existing business and industry within the State and by recruiting and attracting new business and industry to the State.
(2) Both short‑term and long‑term economic trends at the State, national, and international levels have made the successful implementation of the State's economic development policy and programs both more critical and more challenging; and the decline in the State's traditional industries, and the resulting adverse impact upon the State and its citizens, have been exacerbated in recent years by adverse national and State economic trends that contribute to the reduction in the State's industrial base and that inhibit the State's ability to sustain or attract new and expanding businesses.
(3) The economic condition of the State is not static and recent changes in the State's economic condition have created economic distress that requires the enactment of a new program as provided in this section that is designed to stimulate new economic activity and to create new jobs within the State.
(4) The enactment of this section is necessary to stimulate the economy, facilitate economic recovery, and create new jobs in North Carolina and this section will promote the general welfare and confer, as its primary purpose and effect, benefits on citizens throughout the State through the creation of new jobs, an enlargement of the overall tax base, an expansion and diversification of the State's industrial base, and an increase in revenue to the State and its political subdivisions.
(5) The purpose of this section is to stimulate economic activity and to create new jobs within the State.
(b) Fund. – The Site Infrastructure Development Fund
is created as a restricted reserve in the Department of Commerce. 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 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 development. – A subsidized loan to one or
more local government units to enable the unit or units (i) to acquire land, 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 or (ii) to install fiber or lines suitable for the provision
of high‑speed Internet access service. For purposes of this section, the
term "local government unit" includes economic development
commissions.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 to one or more local government units for site development having (i) 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 and (ii) a provision allowing for reduction of the principal of the loan by an amount equal to the number of jobs created and maintained as by a business multiplied by the amount of the credit provided in G.S. 105‑129.87(a) for the county in which the job is located.
(4) Economic development commission. – A commission, agency, nonprofit entity, or other entity operating for the purpose of promoting economic development growth and for the benefit of one or more local government units, if the unit or units have adopted a resolution designating that the entity is operating for that purpose.
(d) Eligibility. – To be eligible for consideration
for site development for a project, a business must meet both of the
following conditions:a local government unit must execute a written
agreement with the State 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 of an appropriate level of
employment by the business leasing or purchasing property acquired or improved
by a subsidized loan and any other criteria the Department considers
appropriate.
(3) A requirement that the unit repay any portion of a subsidized loan reduced for job creation 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 (e) through (g) of this section.
(e) Health Insurance. – A business is eligible for
consideration forto purchase or lease site development property 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 an agreement between the business and the local government unit
required by subsection (d) of this section is in effect, the business must
provide the Department of Commerce 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.provided.
(f) Safety and Health Programs. – In order for a
business to be eligible for consideration forto purchase or lease
site 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 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 of Commerce Commerce,
in consultation with the North Carolina Rural Economic Development Center,
Inc., shall administer the selection of projects to receive site
development. The selection process shall include the following components:
(1) Criteria. – The Department of Commerce 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.Application evaluation. –
The Department Department, must submit to the Economic
Investment Committee the applications for projects the Department considers
eligible and appropriate for consideration for site development. In in evaluating
each application, the Committee must consider all of the factors set
out in Section 2.1(b) of S.L. 2002‑172.the following:
a. Impact on gross regional product and gross State product.
b. Costs and benefits of the project to the State, including the expected return on investment made in the project by the State.
c. Number of induced short‑term, project‑related jobs expected to be generated by the project as well as the number of long‑term permanent jobs expected to be generated indirectly in the economy as a result of the project.
d. Economic circumstances of the county and region, including the extent to which the project will serve to mitigate unemployment.
e. The expected time frame during which the project is expected to pay back in State tax revenues the amount of any subsidized loans.
f. The extent to which the project impacts an existing industrial cluster.
g. The long‑term prospects for growth at the project site or sites.
h. A strategic business facilities development analysis of potential sites for development, shell building needs, special use buildings needs, and buildings to be renovated, as determined by the North Carolina Rural Economic Development Center, Inc., in consultation with each of the seven regional economic development partnerships in the State. The Center, in consultation with each of the seven regional economic development partnerships in the State, shall update the analysis 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 development for the project is necessary to carry out the public purposes provided in subsection (a) of this section.
c. The 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 is appropriate to the project and not unreasonable or excessive.
f. Site development under this section is necessary for the completion of the project in this State.
(6) Recommendations.Awards. – If the Committee
recommends Department approves a project for site 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
development, the Department Secretary shall enter into an
agreement to provide site development within available funds for a project
recommended by the Committee.project. 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. A repayment of a subsidized loan is triggered by property secured by the loan being sold or leased to a business. The amount of repayment triggered must be proportional to the amount of the property sold or leased and must be calculated by multiplying the loan, as reduced by created jobs, 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) Payments. – The Department shall remit amounts paid pursuant to subsection (i1) of this section to the State Community College System for use in purchasing equipment and constructing facilities for the community colleges in this State suitable for industrial training of students.
(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 to obtain 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. The Department shall publish this report on its web site
and shall make printed copies available upon request.
(l) Reserved for future codification purposes.
(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. There is appropriated from the General Fund to the Department of Commerce, Commerce Finance Center, the sum of _______________ for the 2013‑2014 fiscal year to administer the program created by this act.
SECTION 3. It is the intent of the General Assembly to continue to make annual appropriations for this program. It is also the intent of the General Assembly that the Golden Leaf Foundation shall allocate at least fifteen percent (15%) each year of its annual receipts to a loan program created to comport with the program enacted by this act.
SECTION 4. This act is effective when it becomes law and applies to site development agreements entered on or after that date.
