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 	site development in accordance with 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.			
(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 local government unit must execute a written agreement with the State that provides for each of the following:
(1)	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)	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 to 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 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.
(f)	Safety and Health Programs. – In order for a business to be eligible to 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 to purchase or lease site development property under this section only if the business certifies that, at the time of purchase or lease, the business satisfies the environmental impact standard under G.S. 105‑129.83.
(h)	Selection. – The Department of 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 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)	Application evaluation. – The Department, in evaluating each application, must consider all of 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 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.
	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)	Awards. – If the Department approves a project for site development, it must 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 Secretary shall enter into an agreement to provide site development within available funds for a project. Each site development agreement is binding and constitutes a continuing contractual obligation of the State and the local government unit. The site development agreement must include all of the performance criteria, remedies, and other safeguards determined necessary by the Department to secure the State's investment. Each site development agreement must contain a provision prohibiting a local government unit from leasing or selling under the agreement to a business that 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 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.(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 cost/benefit analysis conducted 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, 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.
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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.