Notice and Hearing Requirements for Economic Development Appropriations

<p>Economic development appropriations pursuant to G.S. 158-7.1 have long required a properly-noticed public hearing prior to approval. When the appropriations involve business location incentives, the notice and hearing requirements take on constitutional significance as a result of North Carolina Supreme Court case law. In 2015, the General Assembly imposed additional notice and hearing requirements, mandating a public hearing for any economic development appropriation. The General Assembly modified the requirement again in 2019. This post offers guidance for understanding and complying with current notice and hearing requirements under G.S. 158-7.1.</p> <p>Background</p> <p>Local governments have held public hearings pursuant to Article 1 of North Carolina General Statutes Chapter 158 (“The Local Development Act of 1925”) for decades. Prior to 2015, such hearings were required only when an economic development appropriation was related to real property or involved a business location incentive for “jobs and tax base” that “might otherwise be lost to other states.” Maready v. City of Winston-Salem, 342 N.C. 708 (1996). Starting in 2015, Session Law 2015-277 required North Carolina local governments to issue notice and hold a public hearing prior to approval of any appropriation for economic development—even when the appropriation had nothing to do with real property or business location incentives.</p> <p>The new, expanded requirement for public hearings now encompasses relatively routine appropriations such as salaries for development professionals, allocations for advertisements in trade magazines, and coordinating functions handled by Chambers of Commerce and similar organizations. Such routine expenditures had typically been included in annual budgets and approved through the annual budget process. Local officials [...]</p>