NORTH CAROLINA GENERAL ASSEMBLY
1965 SESSION
CHAPTER 988
SENATE BILL 369
AN ACT AUTHORIZING COUNTIES TO CREATE RURAL DEVELOPMENT AUTHORITIES.
The General Assembly of North Carolina do enact:
Section 1. Short Title. This Act may be referred to as the Rural Development Authority Act.
Sec. 2. Finding and Declaration of Necessity. It is hereby determined and declared as a matter of legislative finding:
(1) That many rural areas of North Carolina suffer from chronic unemployment and underemployment, lack of economic development, and patterns of land use which contribute to soil erosion, undue depletion of soil fertility resulting in inadequate yields and income to support the farm family, and inadequate control of surface waters for flood prevention or drainage and for the maximum conservation and multiple utilization of water resources.
(2) That economic development of rural areas of North Carolina is a public use and purpose for which public money may be spent and private property acquired and is a governmental function of State concern.
(3) That it is a proper public purpose for any county, city, district, authority, or other political subdivision of the State to aid, as herein provided any Rural Development Authority located or operating within its boundaries or jurisdiction, because such local governmental unit will derive immediate benefits and advantages from the operations of such Authority.
Sec. 3. Definitions. The following terms, whenever used or referred to in this Act, shall have the following meanings, unless a different meaning clearly appears from the context:
(1) "Rural Development Authority", "Develoment Authority , or "Authority" shall mean any of the public corporations created pursuant to the provisions of this Act. .
(2) "Area of Operations" shall include all areas of a county lying outside the corporate limits of any city or town having a population of 2,500 or more, as shown by the last preceding Federal census, or such portions of said areas as may be designated as an area of operation pursuant to the provisions of this Act.
(3) "Federal Government" shall include the United States of America, or any agency or instrumentality thereof, corporate or otherwise.
(4) "Rural Development Project" or "Development Project" includes any work or undertaking:
a. To develop recreational facilities.
b. To develop agricultural and forestry related processing and marketing facilities operated for public use.
c. To install, construct, improve, and maintain roads, parks, soil conservation measures, flood control and drainage structures and facilities dams, wells, reservoirs, pipelines, waterworks, irrigation equipment fish ponds, sewerage systems, fencing, nature trails, campsites, and other facilities contributing to economic development, resource development, or conservation of natural resources.
d. To provide safe and sanitary low cost housing for occupancy by rural residents of low income through the acquisition of property, the construction and sale or leasing of such housing.
(5) "Bonds" shall mean any bonds, interim certificates, notes, debentures, or other evidences of indebtedness or obligations issued by a Rural Development Authority pursuant to this Act.
Sec. 4. Creation of Rural Development Authorities. (a) Each county in the State is hereby authorized to create a separate and distinct body corporate and politic to be known as a Rural Development Authority. Said Authority shall be created by the passage of a resolution by the governing body of the county. Notice of intent to consider passage of such a resolution shall be published in a newspaper published or generally circulated within the county at least ten days prior to the meeting at which such resolution is enacted.
(b) Upon passage of a resolution creating a Rural Development Authority, the county governing body shall cause a certified copy of said resolution to be filed in the office of the Secretary of State; upon receipt of said certified copy, the Secretary of State shall issue a certificate of incorporation.
(c) In any suit, action, or proceeding involving or relating to the validity or enforcement of any contract or act of an Authority, a copy of the certificate of incorporation duly certified by the Secretary of State shall be admissible in evidence and shall be conclusive proof of the legal establishment of the Authority.
(d) In lieu of creating a Rural Development Authority, the governing body of the county may by resolution designate (1) the County Planning Board, (2) the County Economic Development Commission, (3) a Regional Planning Commission, (4) a Regional Economic Development Commission,(5) or a Regional Planning and Economic Development Commission to serve as a Rural Development Authority for the county. In such event, the body so designated shall have and exercise all of the powers and duties of a Rural Development Authority as provided by this Act.
Sec. 5. Appointment, Qualification, Tenure, and Compensation of Members of the Authority. When the governing body of the county adopts a resolution creating a Rural Development Authority, it shall appoint as members of the Authority no less than five and no more than nine citizens, who shall be residents of the county. Members shall be appointed for terms of five years; provided, that the appointments of some of the initial members may be made for lesser periods of time, to the end that thereafter the terms of all members shall not expire at the same time. A member shall hold office until his successor is appointed and qualified. Vacancies for unexpired terms shall be promptly filled by the governing body for such unexpired term. A member shall receive no compensation for his services, but he shall be entitled within the budget appropriation to reimbursement of necessary expenses, including travel expenses, incurred in the discharge of his duties.
Sec. 6. Removal of Members. A member of an Authority may be removed by the governing body of the county for inefficiency or neglect of duty or misconduct in office. No member shall be removed unless he has been given a copy of the charges at least ten days prior to the hearing thereon and has been given an opportunity to be heard in person or by counsel.
Sec. 7. Organization of the Authority. The members of the Rural Development Authority shall select from among themselves a chairman, a vice chairman, and such other officers as the Authority may determine. The Authority shall adopt such rules and regulations not inconsistent herewith as it may deem necessary for the proper discharge of its duties. The chairman may appoint such committees as may be authorized by the Authority's rules and regulations. The Authority shall meet regularly at such times and places as may be specified in its rules and regulations, and special meetings may be called pursuant to such rules. All meetings shall be open to the public. A majority of the members shall constitute a quorum of the Authority for all purposes.
Sec. 8. Staff and Employees. Within the limits of available funds, the Rural Development Authority may appoint a secretary, its own counsel, technical experts, and such other officers, agents, and employees as it may require, and shall determine their qualifications, duties, and compensation. An Authority may delegate to one or more of its members, agents, or employees such powers and duties as it shall deem necessary to carry out the purposes of this Act, subject always to the supervision and control of the Authority.
Sec. 9. Interest of Members or Employees. No member or employee of an Authority shall acquire any interest, direct or indirect, in any Development Project or in any property included, or planned to be included, in any Development Project, or in any area which he may have reason to believe may be included in any Development Project, nor shall he have any interest, direct or indirect, in any contract or proposed contract for materials or services to be furnished or used by the Authority or in connection with any Development Project. The acquisition of any such interest in a Development Project or in any such property or contract shall constitute misconduct in office. If any member or employee of an Authority shall have already owned or controlled within the preceding two years any interest, direct or indirect, in any property later included or planned to be included in any Development Project under the jurisdiction of the Authority, or has any such interest in any contract for material or services to be furnished or used in connection with any Development Project, he shall disclose the same in writing to the Authority and to the county governing body, and such disclosure shall be entered upon the minutes of the Authority. Failure to make such disclosure shall constitute misconduct in office.
Sec. 10. Powers of Authority. A Rural Development Authority shall constitute a public body corporate and politic, exercising public and essential governmental powers, which powers shall include all powers necessary or appropriate to carry out and effectuate the purposes and provisions of this Act, including the following powers in addition to those herein otherwise granted:
(1) To sue and be sued; to adopt a seal and alter the same at pleasure; to have perpetual succession; to make and execute contracts and other instruments necessary or convenient to the exercise of the powers of the Authority; to make and from time to time amend and repeal bylaws, rules, regulations, and resolutions.
(2) To borrow money and otherwise contract indebtedness; to issue its bonds or other evidences of indebtedness; to secure the payment thereof by mortgage or pledge of any or all of its property, assets, rights, privileges, licenses, rights of way, easements, revenues, or income.
(3) To apply for and accept advances, loans evidenced by bonds, grants, contributions, and any other form of financial assistance from the Federal Government, the State, county, any municipality or other public body or from any sources, public or private, for the purposes of this Act; to give such security as may be required and to enter into and carry out contracts in connection therewith; and, notwithstanding the provisions of any other law, to include in any contract for financial assistance with the Federal Government such conditions imposed pursuant to Federal law as the Authority may deem reasonable and appropriate and which are not inconsistent with the purposes of this Act.
(4) Within its area of operation, to prepare, acquire, lease, construct, maintain, and operate Development Projects, provided, however, that a Rural Development Authority shall not have the power to acquire, lease, construct, maintain, or operate facilities for the generation, transmission, or distribution of electric energy, for the production, transmission, or distribution of gas (natural, manufactured, or mixed), or for the rendering of telephone service.
(5) To arrange or contract for the furnishing, construction, or repair by any person or agency, public or private, of services, privileges, works, streets, roads, public utilities or other facilities for or in connection with a Development Project; and (notwithstanding anything to the contrary contained in this Act or any other provision of law) to agree to any conditions they may deem reasonable and appropriate attached to Federal financial assistance and imposed pursuant to Federal law relating to the determination of prevailing salaries or wages or compliance with labor standards in the undertaking or carrying out of a Development Project, and to include in any contract let in connection with such a Project provisions to fulfill such of said conditions as it may deem reasonable and appropriate.
(6) To own, hold, and improve real or personal property; to purchase, lease, obtain options upon, accept by gift, grant, bequest, devise, or otherwise, any real or personal property or interest therein; to sell, lease, exchange, transfer, assign, pledge, or otherwise dispose of any real or personal property or any interest therein; to insure or provide for insurance of any real or personal property or operations of the Authority against any risk or hazards; to procure insurance or guarantees from the Federal Government of the payment of any debts or parts thereof secured by mortgages on any property included in any of its Development Projects.
(7) To invest any funds held in reserves or sinking funds or any funds not required for immediate disbursement, in such investments as may be lawful for guardians, executors, administrators, or other fiduciaries under the laws of this State; to redeem its bonds at the redemption price established therein or to purchase its bonds at less than the redemption price, all bonds so redeemed or purchased to be cancelled.
(8) To make such expenditures as are necessary to carry out the purposes of this Act; and to make expenditures from funds obtained from the Federal Government.
(9) To exercise all or any part or combination of the powers herein granted.
Sec. 11. Cooperation Between Authorities. Any two or more Rural Development Authorities created pursuant to the provisions of this Act may join or cooperate with one another in the exercise, either jointly or otherwise, of any or all of their powers for the purpose of financing (including the issuance of bonds, notes, or other evidences of indebtedness and giving security therefor), planning, undertaking, constructing, operating, or con tracting with respect to a Development Project or Projects located within the area of operation of any one or more of said Authorities.
Sec. 12. Issuance of Bonds and Other Evidence of Indebtedness. (a) The Rural Development Authority shall have power to issue bonds or other evidences of indebtedness from time to time for any of its corporate purposes, including the repayment of principal and interest upon any advances for surveys and plans for Development Projects. The Authority shall also have power to issue refunding bonds for the purpose of paying or retiring bonds previously issued by it, or in exchange therefor. The Authority may issue such types of bonds as it may determine, including (without limiting the generality of the foregoing) bonds on which the principal and interest are payable:
(1) Exclusively from the income, proceeds, and revenues of the Development Project financed with the proceeds of such bonds; or
(2) Exclusively from the income, proceeds, and revenues of any of its Development Projects whether or not they are financed in whole or in part with the proceeds of such bonds; provided, that any such bonds may be additionally secured by a pledge of any loan, grant, or contributions, or parts thereof, from the Federal Government or other source, or a mortgage of any Development Project or Projects of the Authority; or
(3) From its revenues generally.
(b) Neither the members of an Authority nor any person executing the bonds shall be liable personally on the bonds by reason of the issuance thereof. The bonds and other obligations of the Authority (and such bonds and obligations shall so state on their face) shall not be a debt of the county, of any municipality, or of the State, and neither the county, the municipality, nor the State shall be liable thereon, nor in any event shall such bonds or obligations be payable out of any funds or properties other than those of said Authority acquired for the purposes of this Act. The bonds shall not constitute an indebtedness of the county, any municipality, or of the State within the meaning of any constitutional or statutory debt limit or restriction. Bonds of an Authority are declared to be issued for an essential public and governmental purpose and to be public instrumentalities and, together with interest thereon and income therefrom, shall be exempt from all taxes. Bonds may be issued by an Authority under this Act notwithstanding any debt or other limitation prescribed in any statute. This Act without reference to other statutes of the State shall constitute full and complete authority for the authorization and issuance of bonds of the Authority hereunder, and such authorization and issuance shall not be subject to any conditions, restrictions or limitations imposed by any other statute whether general, special, or local, except as provided in subsection (d) of this Section.
(c) Bonds of the Authority shall be authorized by its resolution and may be issued in one or more series and shall bear such date or dates, be payable upon demand or mature at such time or times, bear interest at such rate or rates, not exceeding six per centum (6%) per annum, be in such denomination or denominations, be in such form either coupon or registered, carry such conversion or registration privileges, have such rank or priority, be executed in such manner, be payable in such medium of payment at such place or places, and be subject to such terms of redemption (with or without premium) as such resolution, its trust indenture, or mortgage may provide.
(d) Bonds shall be sold by the Authority at public sale upon such terms and in such manner, consistent with the provisions hereof, as the Authority may determine. Prior to the sale of bonds hereunder, the Authority shall first cause a notice of the sale of the bonds to be published at least once at least ten days before the date fixed for the receipt of bids for the bonds (1) in a newspaper having the largest or next largest circulation in the Authority's area of operation and (2) in a publication that carries advertisements for the sale of State and municipal bonds published in the City of New York in the State of New York; provided, however, that in its discretion the Authority may cause any such notice of sale in the New York publication to be published as part of a consolidated notice of sale offering for sale the obligations of other public agencies in addition to the Authority's bonds, and provided, further, that any bonds may be sold by the Authority to the Federal Government at private sale upon such terms and conditions as are mutually agreed upon between the Authority and the Federal Government. No bonds issued pursuant to this Article shall be sold at less than par and accrued interest. The provisions of the Local Government Act shall not be applicable with respect to bonds sold or issued under this Article.
(e) In case any of the members or officers of the Authority whose signatures appear on any bonds or coupons shall cease to be such members or officers before the delivery of such bonds, such signatures shall nevertheless be valid and sufficient for all purposes, the same as if such members or officers had remained in office until such delivery. Any provisions of any law to the contrary notwithstanding, any bonds issued pursuant to this Act shall be fully negotiable.
(f) In any suit, action, or proceedings involving the validity or enforceability of any bond of the Authority or the security therefor, any such bond reciting in substance that it has been issued by the Authority to aid in financing a Rural Development Project shall be conclusively deemed to have been issued for such purpose and such Project shall be conclusively deemed to have been planned, located, and carried out in accordance with the purposes and provisions of this Act.
Sec. 13. Powers in Connection with Issuance of Bonds. (a) In connection with the issuance of bonds or the incurring of obligations and in order to secure the payment of such bonds or obligations, the Authority, in addition to its other powers, shall have power:
(1) To pledge all or any part of its gross or net rents, fees, or revenues to which its right then exists or may thereafter come into existence;
(2) To mortgage all or any part of its real or personal property, then owned or thereafter acquired;
(3) To covenant against pledging all or any part of its rents, fees, or revenues, or against mortgaging all or any part of its real or personal property, to which its right or title then exists or may thereafter come into existence, or against permitting or suffering any lien on such revenues or property; to covenant with respect to limitations on its right to sell lease, or otherwise dispose of any Rural Development Project or any part thereof; and to covenant as to what other or additional debts or obligations may be incurred by it;
(4) To covenant as to the bonds to be issued and as to the issuance of such bonds in escrow or otherwise, and as to the use and disposition of the proceeds thereof; to provide for the replacement of lost, destroyed or mutilated bonds; to covenant against extending the time for payment of its bonds or interest thereon; and to covenant for the redemption of the bonds and to provide the terms and conditions thereof;
(5) To covenant (subject to the limitations contained in this Act) as to the amount of revenues to be raised each year or other period of time by rents fees, and other revenues, and as to the use and disposition to be made thereof; to create or authorize the creation of special funds for moneys held for operating costs, debt service, reserves, or other purposes and to covenant as to the use and disposition of the moneys held in such funds;
(6) To prescribe the procedure, if any, by which the terms of any contract with bondholders may be amended or abrogated, the amount of bonds the holders of which must consent thereto, and the manner in which such consent may be given;
(7) To covenant as to the use, maintenance, and replacement of any of or all of its real and personal property, the insurance to be carried thereon and the use and disposition of insurance moneys, and to warrant its title to such property;
(8) To covenant as to the rights, liabilities, powers, and duties arising upon the breach by it of any covenants, conditions, or obligations; and to covenant and prescribe as to events of default and terms and conditions upon which any or all of its bonds or obligations shall become or may be declared due before maturity and as to the terms and conditions upon which such declaration and its consequences may be waived;
(9) To vest in any obligees of the Authority the right to enforce the payment of the bonds or any covenants securing or relating to the bonds; to vest in any obligee or obligees holding a specified amount in bonds the right, in the event of a default, to take possession of and use, operate, and manage any Rural Development Project or any part thereof, title to which is in the Authority, or any funds connected therewith, and to collect the rents and revenues arising therefrom and to dispose of such moneys in accordance with the agreement with such obligees; to provide for the powers and duties of such obligees and to limit the liabilities thereof, and to provide the terms and conditions upon which such obligees may enforce any covenant or rights securing and relating to the bonds; and
(10) To exercise all or any part or combination of the powers herein granted; to make such covenants (other than and in addition to the covenants herein expressly authorized) and to do any and all such acts and things as may be necessary or convenient or desirable in order to secure its bonds, or, in the absolute discretion of said Authority, as will tend to make the bonds more marketable, notwithstanding that such covenants, acts, or things may not be enumerated therein.
(b) The Authority shall have power by its resolution, trust indenture, mortgage, lease, or other contract to confer upon any obligee holding or representing a specified amount in bonds, the right (in addition to all rights that may otherwise be conferred), upon the happening of an event of default as defined in such resolution or instrument, by suit, action, or proceeding in any court of competent jurisdiction:
(1) To cause possession of any Development Project or any part thereof, title to which is in the Authority, to be surrendered to any such obligee;
(2) To obtain the appointment of a receiver of any Development Project of said Authority or any part thereof, title to which is in the Authority, and of the rents and profits therefrom. If such receiver be appointed, he may enter and take possession of, carry out, operate, and maintain such project or any part thereof and collect and receive all fees, rents, revenues, or other charges thereafter arising therefrom, and shall keep such moneys in a separate account or accounts and apply the same in accordance with the obligations of said Authority as the court shall direct; and
(3) To require said Authority and the members, officers, agents, and employees thereof to account as if it and they were the trustees of an express trust.
Sec. 14. Right of Obligee. Any obligee of the Authority shall have the right, in addition to all other rights which may be conferred on such obligee, subject only to any contractual restrictions binding upon such obligee:
(1) By mandamus, suit, action, or proceeding at law or in equity to compel said Authority and the members, officers, agents, or employees thereof to perform each and every term, provision, and covenant contained in any contract of the said Authority with or for the benefit of such obligee, and to require the carrying out of any or all such covenants and agreements of said Authority and the fulfillment of all duties imposed upon said Authority by this Act; and
(2) By suit, action, or proceeding in equity, to enjoin any acts or things which may be unlawful or constitute a violation of any of the rights of such obligee of said Authority.
Sec. 15. Exemption of Property From Execution Sale. All real property of an Authority shall be exempt from levy and sale by virtue of an execution, and no execution or other judicial process shall issue against the same nor shall any judgment against an Authority be a charge or lien upon its real property; provided, however, that the provisions of this Section shall not apply to or limit the right of obligees to foreclose or otherwise enforce any mortgage of any Authority or the right of obligees to pursue any remedies for the enforcement of any pledge or lien given by an Authority on its rents, fees, or revenues.
Sec. 16. Acceptance of Federal Aid. In addition to the powers conferred upon an Authority by other provisions of this Act, an Authority is empowered to borrow money or accept grants or other assistance from the Federal Government for or in aid of any Development Project within its area of operation, and to these ends, to comply with such conditions and enter into such mortgages, trust indentures, leases, or agreements, as may be necessary, convenient, or desirable. It is the purpose and intent of this Act to authorize every Authority to do any and all things necessary or desirable to secure the financial aid or assistance of the Federal Government in the undertaking, construction, maintenance, or operation of any Development Project or any other activity or undertaking of such Authority.
Sec. 17. Agreement to Sell Project as Security for Obligation to Federal Government. In any contract or amendatory or superseding contract for a loan heretofore or hereafter entered into between any Authority and the Federal Government with respect to any Development Project undertaken by said Authority, such Authority is authorized to make such covenants (including covenants with holders of obligations of said Authority issued for purposes of the particular Project involved), and to confer upon the Federal Government such rights and remedies as said Authority deems necessary to assure the fulfilment of the purposes for which the Project was undertaken. In any such contract the Authority may, notwithstanding any other provisions of law, agree to sell and convey the Project (including all lands appertaining thereto to which such contract relates) to the Federal Government upon the occurrence of such conditions as may be prescribed in such contract, and at a price (which may include the assumption by the Federal Government of the payment, when due, of the principal and interest on outstanding obligations of the Authority issued for purposes of the Project involved) determined as prescribed therein and upon such other terms and conditions as are therein provided. Any such Authority is hereby authorized to enter into such supplementary contracts and to execute such conveyances as may be necessary to carry out the provisions hereof.
Sec. 18. Deposit of Money; Security for Funds Deposited. The Authority may by resolution provide that all moneys deposited by it shall be secured (1) by obligations of the United States or of the State of a market value equal at all times to the amount of such deposits, or (2) by any securities in which savings banks may legally invest funds within their control, or (3) by an undertaking with such securities as shall be approved by the Authority faithfully to keep and pay over upon the order of the Authority any such deposits and agreed interest thereon. All banks and trust companies are authorized to give any such security for such deposits.
Sec. 19. Cooperation by Public Bodies. For the purposes of aiding and cooperating in the planning, undertaking, and carrying out of the Development Projects located within its jurisdiction, any county, municipality, special district, authority, or other agency, department, or political subdivision of the State, may, upon such terms, with or without compensation, as it may determine:
(1) Dedicate, sell, convey, or lease any of its interest in any property, or grant easements, licenses, or any other rights or privileges therein, to an Authority;
(2) Cause parks, playgrounds, recreational, community, educational, water, sewer, or drainage facilities, or any other works which it is otherwise empowered to undertake, to be furnished adjacent to or in connection with a Development Project;
(3) Furnish, dedicate, close, vacate, pave, install, grade, regrade, plan, or replan streets, roads, sidewalks, ways, or other places which it is otherwise empowered to undertake;
(4) Plan or replan, zone or rezone any part of the Development Project;
(5) Cause administrative or other services to be furnished to the Authority of the character which it is otherwise empowered to undertake or furnish;
(6) Enter into agreements (which may extend over any period, notwithstanding any provision or rule of law to the contrary) with an Authority or with the Federal Government respecting action to be taken pursuant to any of the powers granted by this Act; and
(7) Do any and all things necessary or convenient to aid and cooperate in the planning or carrying out of a Development Project.
Sec. 20. Records and Reports. (a) The books and records of an Authority shall at all times be open and subject to inspection by the public.
(b) A copy of all bylaws and rules and regulations and amendments thereto adopted by it from time to time shall be filed with the clerk to the board of county commissioners of each county within its area of operation and shall be open for public inspection.
(c) At least once a year a report of its activities for the preceding year and such other reports as may be required shall be made. Copies of such reports shall be filed with the clerk to the board of county commissioners of each county within its area of operation and shall be open for public inspection.
Sec. 21. Title of Purchaser. Any instrument executed by an Authority and purporting to convey any right, title, or interest in any property under this Act shall be conclusive evidence of compliance with the provisions of this Act insofar as title or other interest of any bona fide purchasers, lessees, or transferees of such property is concerned.
Sec. 22. Separability. Should any Section, clause, or provision of this Act be declared by the courts to be unconstitutional or invalid for any reason, such decision shall not affect the validity of the Act as a whole nor any part thereof other than the part so declared to be unconstitutional or invalid.
Sec. 23. This Act shall only apply to the counties of Cherokee, Clay, Graham, Swain, Macon and Jackson, which counties are located in the southwestern section of North Carolina.
Sec. 24. All laws and clauses of laws in conflict herewith are hereby repealed to the extent of such conflict.
Sec. 25. This Act shall become effective upon its ratification.
In the General Assembly read three times and ratified, this the 14th day of June, 1965.