On June 28th, legislators adjourned the 2024 “short session” of the North Carolina General Assembly. As part of the adjournment resolution adopted by the House and Senate, legislators set a limited schedule of days for the remainder of the year during which they may return to Raleigh to address un?nished business. The dates they announced are: July 10; July 29 – August 1; September 9 – September 11; October 9; November 19 – November 22; and December 11 – December 13.

After spending most of 2023 in a “long session,” legislators were in session for roughly 9 weeks, as their session began on April 24th. During that time, they made progress on a variety of topics, but they were unable to ?nalize adjustments to the second year of the state’s two-year budget. Although legislators had a budgetary surplus of $1 billion, the House and Senate disagreed on how to spend or save those funds by the start of the ?scal year on July 1. House and Senate leaders have suggested that when they return in the fall they may resume efforts to pass a ?nal comprehensive budget. In the interim, legislators are relying upon a fail-safe in General Statute 143C-5-4, which keeps state government agencies operating at expense levels not to exceed the budget from the prior ?scal year, and which provides for continued payment of state employee and school employee salaries.

This summary will focus on notable bills that the General Assembly passed this year and which became law.

Enacted Bills

Rev. Laws Tech., Clarifying, & Admin. Chngs. (House Bill 228 / Session Law 2024-28)

Part VI of this bill replaces index references in GS 24-1.1E, the high-cost home loan statute, with the average prime offer rate published by the CFPB under 12 C.F.R. 1026.36. The change is necessary because state law referenced an interest rate published by Fannie Mae called the required net yield, which on June 3, 2024, Fannie Mae ceased to publish.

Governor Cooper signed the bill into law on July 1, and the change became retroactive to June 1, 2024.

Various Criminal and Election Law Changes (House Bill 237 / Session Law 2024-16)

Governor Cooper vetoed this bill because of concerns about changes to campaign ?nance laws, which he said would create a loophole for “secret, unlimited campaign money in the middle of an election year,” and because he believed the bill “would remov[e] protections and threate[n] criminal charges for people who want to protect their health by wearing a mask.” The House and Senate

overrode the veto. The mask provisions in Section 1 are relevant for our industry. The bill increases the penalty for a crime by one class higher if a person wears a mask or other clothing or device to conceal the defendant’s identity. The bill allows for continued wearing of medical or surgical grade masks, but it says a wearer shall remove a mask upon request by a law enforcement officer, or temporarily remove a mask upon request by the owner or occupant of public or private property where the wearer is present to allow for identi?cation of the wearer.

Section 1 became effective on June 27, 2024.

Revise Money Laundering/Retail Crime (House Bill 495 / Session Law 2024-22)

This bill enacts new General Statute 14-118.8 “Money Laundering.” A person commits money laundering if any of the following seven things are done knowingly and willfully and the amount of proceeds or funds exceeds $10,000:

1. Acquires or maintains an interest in, conceals, possesses, transfers, or transports the

proceeds of criminal activity.

• Conducts, supervises, or facilitates a transaction involving the proceeds of criminal activity.
• Invests, expends, or receives, or offers to invest, expend, or receive, the proceeds of criminal

activity or funds that the person believes are the proceeds of criminal activity.

• Finances or invests, or intends to ?nance or invest, funds that the person believes are

intended to further the commission of criminal activity.

• Uses, transports, transmits, or transfers; conspires to use, transport, transmit, or transfer; or attempts to use, transport, transmit, or transfer the proceeds of criminal activity to conduct or attempt to conduct a transaction or make other disposition with the intent to conceal or disguise the nature, location, source, ownership, or control of the proceeds of criminal activity.
• Uses the proceeds of criminal activity with the intent to promote, in whole or in part, the commission of criminal activity.
• Conducts or attempts to conduct a transaction involving the proceeds of criminal activity, knowing the property involved in the transaction constitutes proceeds of criminal activity with the intent to avoid a transaction reporting requirement under federal law.

A defense is if the person acted with intent to facilitate a lawful seizure or other legitimate law enforcement purpose. If the value of the laundered proceeds or funds is less than $100,000, the offense is punishable as a Class H felony, in addition to any other civil or criminal penalties provided by law. If the value is more than $100,000 the offense is punishable as a Class C felony, in addition to any other civil or criminal penalties provided by law. All property connected with money laundering is subject to forfeiture under the process set forth in General Statute 75D-5 (pertaining to Racketeer In?uenced and Corrupt Organizations (RICO) civil forfeiture) or in General Statute 14-2.3 (forfeiture of gain acquired through criminal activity).

Under the bill, ?nancial institutions and their agents that facilitated the lawful seizure, forfeiture, or disposition of funds are shielded from civil liability from a person who (i) claims an ownership interest in funds involved in money laundering or (ii) conducts with the ?nancial institution a transaction concerning such funds.

The bill becomes effective on December 1, 2024, and applies to offenses committed on or after that

date.

Insurance Rev/Online Auctions/Fire?ghters (Senate Bill 319 / Session Law 2024-29)

Article 2A of Chapter 45 of the North Carolina General Statutes applies to foreclosures (“Sales Under Power of Sale”). Historically, if the sale is not held on the premises being sold, it must be held at the courthouse door of the county in which all of the property is situated, or if the property is situated in more than one county, it can be held at the courthouse door for any county in which it is situated. A sale must begin at the time designated in the notice of sale or as soon thereafter as practicable, but not later than one hour after that time unless delayed by other sales held at the same place.

Section 4 changes North Carolina law to provide that a sale held under a power of sale that is not held on the premises being sold can be held either at the courthouse door in a county in which the property is situated, or at another public location within that county as designated by the mortgagee or trustee. It also permits the sale to take place up to three hours after the time designated in the notice of sale. And it permits the person exercising the power of sale, or their agent, to accept remote bids from persons not physically present at the place of sale.

Before accepting a remote bid, the person exercising the power of sale, or their agent, must collect all sums required to be paid by the winning bidder. Any charges incurred in connection with remote bidding would not be chargeable to the mortgagor or otherwise recoverable as costs and expenses of the foreclosure.

Section 4 becomes effective October 1, 2024, and applies to notices of foreclosure sale ?led with

the clerk of superior court on or after that date.

C-PACE Program (Senate Bill 802 / Session Law 2024-44)

Section 1 establishes the “Commercial Property Assessed Capital Expenditure (C-PACE) Act” as a new Article 10B of Chapter 160A (“Cities and Towns”) to be administered by the Economic Development Partnership of North Carolina (“EDPNC”) under the supervision of the Department of Commerce. Sections 2 through 3 make clarifying changes to other laws as a consequence of the new C-PACE Program.

Under the C-PACE Program, owners of qualifying commercial property would be eligible to apply to EDPNC to be approved for long-term ?nancing provided by private lenders to pay for property improvements that would include energy efficiency, water conservation, renewable energy, and resilience measures. Repayment of the amount ?nanced would be secured by an assessment imposed on the improved property by a participating local government. Upon recordation of a notice of the C-PACE assessment, a C-PACE lien would arise that would remain upon the improved property until the ?nanced amount is repaid in full.

For each approved project, the local government would assign to the capital provider the right to receive the proceeds of assessment repayments, and would delegate to the capital provider all billing, collection and enforcement duties related to the C-PACE assessment. The C-PACE lien would be inferior to all prior and subsequent State, local, and federal taxes or liens and superior to all other liens on the property, and purchasers of property sold to satisfy a tax lien would take title subject to any C-PACE assessments on the property.

New General Statute 160A-239.19 requires a property owner, before entering into an assessment agreement, to ?rst submit a written statement, executed by each holder of a mortgage, deed of trust, or other lien on the property securing indebtedness, indicating their consent to the C-PACE assessment and that the C-PACE assessment does not constitute an event of default under the

terms of the mortgage, deed of trust, or other indebtedness secured by lien. This is a critically important feature of the bill as we insisted that prior lenders with recorded security interests must be given the opportunity to choose whether or not to consent.

It will take some time to see how the new C-PACE Program is utilized. Local governments seeking to allow participation in their jurisdictions must conduct a public hearing and adopt a resolution before joining the program. Also, the legal framework may be tested. As the General Assembly considered the bill, Treasurer Dale Folwell and his office noted, “C-PACE ?nancing is incompatible with the public purpose clause of the N.C. Constitution. There is no reason for the government to get involved in this type of arrangement between private parties.”

The C-PACE Program may drive energy efficiency upgrades to commercial buildings and create opportunities for lenders to ?nance these transactions at a lower cost for borrowers, given the added certainty of liens that run inde?nitely with the land and are analogous to tax assessments. However, lenders exploring this avenue should carefully discuss with their counsel.

The bill became effective on July 1, 2024.

Closing Thoughts

On any of the dates for the remainder of this year when the General Assembly is in session, legislators retain discretion to adopt another joint resolution amending the schedule and the types of legislation that may be considered. Absent such a change, most of the dates are extremely constrained in what types of legislation can be considered. Notably, however, from November 19 – November 22 the list includes, among other things, bills introduced since January of last year that have passed either the House or the Senate but which have not yet passed the other chamber.

The mistitled “Credit Union Update,” HB 410, which we fundamentally oppose – because, among other things, it would allow any person and any business in the world to become a member of a North Carolina state-chartered credit union – is one such bill. In the intervening months as legislators learned more about what the bill actually does – and how certain credit unions are leveraging their exemption from corporate income and franchise taxes and their CRA exemption to compete unfairly – the bill met with opposition and has not further advanced to date. However, while any legislative days remain in the year, there is continued risk.

Further details on that bill, as well as links to all the other bills that we have been following or lobbying on this session, are included in our Bill Tracker publication. We will continue to keep Bill Tracker updated throughout the remainder of this year.

It is important to remember that 2025 will mark the start of a new two-year cycle for the General Assembly. No bills from the 2023-2024 session that failed to be enacted are carried over. However, legislators can simply take some or all of the content of a prior bill and ?le as new bills, breathing new life into old topics. The 2025 session will also present an opportunity for our industry to proactively put forward ideas for legislation. The NCBA welcomes your ideas as we evaluate what topics and prospective bill drafts to bring to legislators for their consideration.

Finally, on behalf of the NCBA, I would like to thank you for your tremendous support this session and ask for your continued engagement. Through your outreach, we were able to have many positive conversations with legislators. Sometimes a bill just needs a tweak and sometimes there are fundamental issues that need to be ?xed. We try to work with everyone to ?nd solutions. With 120

members of the House and 50 members of the Senate, there is a lot of ground to cover. When you have taken the time to get to know your local legislator, it is incredibly impactful as it enables your team at the NCBA to begin each conversation with them from a position of trust. They know that we will act fairly and present all the sides of an issue known to us, just as you do in speaking with them. Now is a great opportunity to thank your legislator for their service, or to consider inviting them to visit the team at your bank and share their thoughts on the session and their priorities and vision going forward. It doesn’t have to be anything formal as informal is often best. You can ?nd contact information for your legislator using an address locator tool on the General Assembly’s website.

Thank you. Please let me know if you have any questions.

Nathan R. Batts

SVP, Counsel & Director of Government Relations