Substantively identical to S 680, filed 3/25/25.
Enacts GS Chapter 122F, termed as the NC Child Care Finance Agency Act. Declares five legislative findings and public purposes in GS 122F-2. Lists six areas of priority for the new NC Child Care Finance Agency (Agency). Defines thirteen terms. Creates the Agency as a body politic and corporate to be considered a public agency and instrumentality of the State for the performance of essential public functions in GS 122F-4. Provides for a twelve-member Agency Board of Directors, appointed as described to serve four-year terms. Provides for vacancies, removal for the specified reasons, a chair and vice-chair, quorum, and Executive Director of the Agency, appointed by the Board of Directors, subject to approval by the Governor. Instructs that Agency employees are exempt from the State Human Resources Act and eligible to participate in the State Employees’ Retirement System. Provides for salary parameters, as described. Requires Agency to maintain its own books and records, subject to periodic review and audit by the State. Specifies duties of the Executive Director, including to administer, manage and direct the affairs and business of the Agency, subject to the policies, control and direction of the members of the Agency’s Board of Directors. Designate Secretary of the Agency its custodian of books, documents, and papers filed with the Agency.
Sets forth twenty-two general powers of the Agency in GS 122F-5, including (1) to make or participate in the making of mortgage loans, construction loans, and rehabilitation loans to licensed child care providers for rehabilitation and construction; provided, however, that such loans shall be made only upon the determination by the Agency that mortgage loans, construction loans, and rehabilitation loans are not otherwise available wholly or in part from private lenders upon reasonably equivalent terms and conditions; (2) to provide technical and advisory services to sponsors, builders and developers of child care facilities; and (3) to acquire, hold, rent, encumber, transfer, convey, and otherwise deal with real property and utilities in the same manner as a private person or  corporation, subject only to the approval of the Governor and Council of State. The Board of Directors may pledge or encumber income and assets of the Agency to secure financing for real property.
Requires the Agency to periodically adopt, modify or repeal rules and regulations governing the purchase of federally insured securities by the Agency and the purchase and sale of mortgage loans, construction loans, and rehabilitation loans and the application of the proceeds thereof, including rules and regulations on the six matters specified in GS 122F-6. Requires that those rules effectuate the following objectives: (1) the construction of decent, safe and sanitary full day child care facilities; (2) the rehabilitation of present child care facilities; (3) increasing the supply and access to affordable child care for all families, regardless of income level; (4) the encouraging of private enterprise and investment to sponsor, build and rehabilitate child care facilities; and (5) the restriction of the financial return and benefit to that necessary to protect against the realization by lenders of an excessive financial return or benefit as determined by prevailing market conditions. Provides for interest rates to be at least sufficient to assure the payment of the described bond. Allows for mortgages, construction loans, and rehabilitation loans to be forgivable in full after fifteen years if the licensed child care provider (1) serves at least 25% more children than when the loan was received, and (2) at least 50% of the children served by the child care facility receive a child care subsidy. Requires the Agency to require from any mortgage lender from whom it purchases federally insured securities to proceed as promptly as practicable to make from the sale proceeds, new mortgage loans with respect to child care facilities in the State having a stated maturity of not less than 20 years from the date thereof in an aggregate principal amount equal to the amount of such sale proceeds.  
Authorizes the Agency to provide mortgage insurance as described in GS 122F-7 so long as the underlying mortgage loan (1) is made and held by a mortgagee approved by the Agency as responsible and able to properly service the mortgage; (2) do not exceed 90% of the estimated cost of the proposed child care facility; (3) has a maturity satisfactory to the Agency as specified; (4) contains amortization provisions satisfactory to the Agency as specified; and (5) is in such form and contain such terms and provisions with respect to maturity, property insurance, repairs, alterations, payment of taxes and assessments, default reserves, delinquency charges, default remedies, anticipation of maturity, additional and secondary liens, equitable and legal redemption rights, prepayment privileges and other matters as the Agency may prescribe. Provides for fees, premiums, default, and child care mortgage insurance fund.
Authorizes the Agency to periodically adopt, modify, amend or repeal rules and regulations governing the making of loans to lenders and the application of the proceeds thereof, as specified in GS 122F-8. Requires that the rules and regulations serve the same five purposes as set forth in GS 122F-6. Sets out additional requirements for the loans.
Clarifies, in GS 122F-9 that the obligations issued under GS Chapter 122F are not deemed to constitute a debt, liability or obligation of the State or of any political subdivision thereof or a pledge of the faith and credit of the State or of any such political subdivision, but shall be payable solely from the revenues or assets of the Agency.
Authorizes the Agency in GS 122F-10 to provide for the issuance, at one time or from time to time, (1) of bonds and notes of the Agency to carry out and effectuate its corporate purposes; (2) bond anticipation notes in anticipation of the issuance of such bonds and (3) construction loan notes to finance the making or purchase of mortgage loans, construction loans, and rehabilitation loans, for the construction, rehabilitation or improvement of child care facilities. Caps the total amount of bonds, bond anticipation notes, and construction loan notes outstanding at any one time at $12 billion. Provides for interest rates, processes for the sale of such bonds, and temporary bonds. Specifies that the proceeds of any bonds or notes must be used solely for the purposes for which issued and disbursed in such manner and under such restrictions, if any, as the Agency may provide as specified. Authorizes, at the discretion of the Agency, any obligations issued under the provisions of GS Chapter 122F to be secured by a trust agreement by and between the Agency and a corporate trustee, as described, in GS 122F-11. Confirms the validity of the Agency’s pledge of any its assets or revenues to the payment of the principal of or the interest on any obligations of the from the time when the pledge is made, as specified, in GS 122F-12.
Deems all money received under the authority of GS Chapter 122F to be held and provided solely as provided in GS Chapter 122F, in GS 122F-13. Provides for temporary investments, as described. List three ways money available to the Agency may be invested. Provides for remedies in GS 122F-14 by holders or obligations or coupons appertaining to those obligations under GS Chapter 122F, as described. Makes all obligations and interest coupons appertaining made negotiable instruments under State law in GS 122F-15. Makes, in GS 122F-16, obligations issued under the provisions of GS Chapter 122F securities in which all public officers and public bodies of the State and its political subdivisions, and other specified persons may properly and legally invest funds, including capital in their control or belonging to them. Authorizes the Agency to provide for the issuance of refunding obligations for the purpose of refunding any obligations then outstanding which shall have been issued under GS Chapter 122F, including the payment of any redemption premium thereon and any interest, as specified, in GS 122F-17. Allows for refunding obligations to be sold or exchanged for outstanding obligations, as described.
Designates the specified NCGA committees as those having oversight over the Agency in GS 122F-18. Requires the Agency to submit a comprehensive annual report of its activities to the specified NCGA committees and the Fiscal Research Division, as specified. Requires the Agency to be audited annually. Specifies that no member or other officer of the Agency is subject to any personal liability or accountability by reason of his execution of any obligations or the issuance thereof in GS 122F-19. Authorizes the Agency to accept appropriated moneys as specified, in GS 122F-20. Specifies, in GS 122F-21, that the Agency is not required to pay any tax or assessments on its property and that any obligations issued by the Agency under GS Chapter 122F are also free from taxation. Prevents conflicts of interest, as described, in GS 122F-22. Specifies, in GS 122F-23, that the provisions of GS Chapter 122F are in addition to existing powers conferred by other laws, except that the issuance of bonds or notes need not comply with the requirements of any other law applicable to the issuance of bonds or notes. Provides for liberal construction of GS Chapter 122F and that the chapter prevails over any inconsistent general or special laws.
Provides for the initial appointments to the Agency, with the term to begin on October 1, 2025. Provides for end dates of either June 30, 2027, or June 30, 2029, to stagger reappointments. Requires the State Treasurer to invest 3.5% of the corpus of the NC Innovation Fund with the Agency. Appropriates $20 million from the General Fund to the Department of Administration for 2025-26 for the Agency to use as directed by the act.
Effective July 1, 2025.