Bifurcate Economic Distress Categorization.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 557

Short Title: Bifurcate Economic Distress Categorization. (Public)
Sponsors: Senator Sawrey (Primary Sponsor).
Referred to: Rules and Operations of the Senate
March 26, 2025
*S557-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO MODIFY HOW TO CATEGORIZE ECONOMIC DISTRESS DEPENDING ON 2
THE FUNCTION FOR WHICH THE CATEGORIZATION IS TO BE USED. 3
The General Assembly of North Carolina enacts: 4
SECTION 1.(a) Nothing in this section shall be deemed to apply to the Department 5
of Commerce, the corporation with which the Department contracts pursuant to 6
G.S. 143B-437.01, and other entities working with the Department where the Department, the 7
corporation, and the entities are using the development tier designations determined pursuant to 8
G.S. 143B-437.08 for economic development purposes. 9
SECTION 1.(b) Except as provided in subsection (a) of this section, all departments, 10
authorities, other State and local entit ies, and entities receiving and using State funds for any 11
other purpose that use the development tier designations determined pursuant to 12
G.S. 143B-437.08 for any purpose or program, including, but not limited to, taxes, the North 13
Carolina Development Farm land Preservation Trust Fund, the Spay and Neuter Program, the 14
Abandoned Manufactured Home Cleanup Grants Program, the State Wastewater Reserve, the 15
State Drinking Water Reserve, the Public Safety Assistance Points Grant Program, Oral Health 16
Preventive Services, Medication Assistance, Qualified Allocation Plan for Low Income Housing 17
Tax Credits, shall, no later than July 1, 2027, discontinue the use of such designations. 18
Governmental entities affected by this section include, but are not limited to, the following: 19
(1) The Department of Agriculture and Consumer Services. 20
(2) The Department of Environmental Quality. 21
(3) The Department of Information Technology. 22
(4) The Department of Health and Human Services. 23
(5) The North Carolina Housing Finance Agency. 24
(6) The Department of Transportation. 25
(7) The Department of Revenue. 26
SECTION 1.(c) Each entity to which subsection (b) of this section applies shall 27
independently develop criteria designed to achieve each program's objectives to be used in place 28
of developmen t tier designations and shall report by July 1, 2026, on any recommended 29
legislation and on the developed criteria to the Fiscal Research Division and as follows: 30
(1) The Departments of Agriculture and Consumer Services and Environmental 31
Quality to the Joi nt Legislative Oversight Committee on Agriculture and 32
Natural and Economic Resources. 33
(2) The Department of Information Technology to the Joint Legislative Oversight 34
Committee on Information Technology. 35
General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 557-First Edition
(3) The Department of Health and Human Services to th e Joint Legislative 1
Oversight Committee on Health and Human Services. 2
(4) The North Carolina Housing Finance Agency to the Joint Legislative 3
Oversight Committee on General Government. 4
(5) The Department of Transportation to the Joint Legislative Transporta tion 5
Oversight Committee. 6
(6) The Department of Revenue to the Revenue Laws Study Committee. 7
(7) Any other entity to the oversight committee having jurisdiction over the 8
primary purpose of the entity. 9
SECTION 1.(d) Notwithstanding G.S. 143B-437.08(c), an entity required to 10
discontinue use of the development tier designations no later than July 1, 2027, as required by 11
this section, may use the last development tier designations published by the Department of 12
Commerce until the earlier of developed replacement criteria or July 1, 2027. 13
SECTION 2. G.S. 143B-437.08 reads as rewritten: 14
"§ 143B-437.08. Development tier designation. 15
(a) Tiers Defined. – A development tier one area is a county whose annual ranking is one 16
of the 40 highest in the State. A developm ent tier two area is a county whose annual ranking is 17
one of the next 40 50 highest in the State. A development tier three area is a county that is not in 18
a lower-numbered development tier. 19
… 20
(d) Data. – In measuring rates of unemployment and median household income, the 21
Secretary shall use the latest available data published by a State or federal agency generally 22
recognized as having expertise concerning the data. In measuring population population, 23
population density, and population growth, the Secretary shall use the most recent estimates of 24
population certified by the State Budget Officer. For the purposes of this section, population 25
statistics do not include people incarcerated in federal or State prisons. 26
… 27
(f1) Adjustment for Urban Counties. – Regardless of the actual development factor, any 28
county that has a population density of greater than 750 people per square mile shall 29
automatically be ranked as one of the 10 lowest counties. 30
… 31
(k) Report. – By November 30 of each year, the Secretary of Commerce shall submit a 32
written report to the Joint Legislative Economic Development and Global Engagement Oversight 33
Committee, the Senate Appropriations Committee on Natural and Economic Resources, t he 34
House of Representatives Appropriations Subcommittee on Natural and Economic Resources, 35
and the Fiscal Research Division of the Joint Legislative Economic Development and Global 36
Engagement Oversight Committee on the tier rankings required by subsection (c) of this section, 37
including a map of the State whereupon the tier ranking of each county is designated. The report 38
shall identify, for development tier three areas, census tracts that are low -wealth or rural. For 39
purposes of this section, a "rural census tract" means a census tract having a population density 40
of less than 500 people per square mile according to the most recent decennial federal census, 41
and a "low-wealth census tract " means a census tract for which at least 50 percent (50%) of 42
households have a median household income that is at least 60 percent (60%) below the county's 43
median household income." 44
SECTION 3. Section 1 of this act is effective when it becomes law and applies to 45
determinations of annual rankings for calendar year 2026 and beyond. The remainder of this act 46
is effective when it becomes law. 47