Local Government Economic Development Powers “Clarified”

<p>On October 20, 2015, the Governor signed Session Law (S.L.) 2015-277, placing into effect several “clarifications” to the primary economic development statute used by local governments, G.S. Chapter 158, Article 1, “The Local Development Act of 1925.” The modifications fall into three categories: first, broad discretionary language was removed; second, new procedural requirements were imposed; and third, historic rehabilitation was explicitly included within the penumbra of allowable economic development activities, subject to the same limitations that have long been imposed on such activities by the statute and the North Carolina Constitution. Each will be addressed in turn.</p> Discretionary Language in G.S. 158-7.1(a) Removed <p>G.S. 158-7.1, up until S.L. 2015-277 became law, contained fascinating language in subsection (a) that can be traced back to the original language enacted in 1925, at a time when economic development incentives weren’t permitted (incentives wouldn’t be approved by the North Carolina Supreme Court until the seminal 1996 case, Maready v. Winston-Salem, 342 N.C. 708). The pre-2015 language did not contain the term “economic development,” but it described activities that conveyed a similar meaning:</p> <p style="padding-left: 30px">“Each county and city in this State is authorized to make appropriations for the purposes of aiding and encouraging the location of manufacturing enterprises, making industrial surveys and locating industrial and commercial plants in or near such city or in the county; encouraging the building of railroads or other purposes which, in the discretion of the governing body of the city or of the county commissioners of the county, will increase the population, taxable property, [...]</p>