Article Date: Thursday, November 04, 2010
Written By: Stephen F. Later & W. Mark Griffith
The North Carolina General Assembly convened its 2010 short session on May 12, 2010 and adjourned sine die on July 10, 2010.
With due credit to Kim Crouch, below are summaries of some bills that may be relevant to the practice of our members. We commend you to the North Carolina Bar Association Legislative Bulletin for further coverage of these and other legislative matters.
1. Low Profit Limited Liability Company (S.L. 2010-187)
S.L. 2010-187 recognizes the formation of a limited liability company as a low-profit limited liability company with its primary purpose as achievement of a socially beneficial objective and with profit as a secondary concern. The L3C statute incorporates certain IRS requirements for qualification as a recipient of a program-related investment from private foundations and thus requires that the L3C (a) accomplish “one or more charitable or educational purpose,” (b) “operate so that no significant purpose of the company is the production of income or the appreciation of property,” and (c) “operate so that no purpose of the company is to accomplish one or more political or legislative purposes.” Became effective Aug. 3, 2010.
2. Keeping N.C. Competitive Act (S.L. 2010-91)
S.L. 2010-91 provides tax incentives to businesses that manufacture turbines and that convert wood pulp to paper. The legislation also modifies the eligibility requirements for the tax credit on data center machinery and equipment as well as the circumstances under which the Department of Commerce can extend the period for a Jobs Development Investment Grant. Became effective, as applicable, Jan. 1, 2010, July 1, 2010, and July 11, 2010.
3. Homeowner Protections (S.L. 2010-164)
S.L. 2010-164 prohibits home foreclosure rescue scams in which a homeowner is induced to sell property for less than 50% of its fair market value in order to avoid foreclosure. The legislation also addresses lease agreements that include purchase options in its creation of Chapter 47G of the General Statutes and focuses on contract for deed transactions in its establishment of Chapter 47H of the General Statutes. These two chapters require, inter alia, that these agreements be in a writing recorded with the register of deeds in the applicable county, include certain minimum required provisions (including a three-day right of cancellation), and provide notice of and the right to cure defaults to the purchaser. Becomes effective Oct. 1, 2010.
4. No Foreclosure/Soldiers on Active Duty (S.L. 2010-190)
S.L. 2010-190 enacts G.S. 45-21.12A(a) to prohibit exercise by a creditor of a power of sale, whether pursuant to a mortgage or statute, during, or within 90 days after, the debtor’s period of military service. Becomes effective Jan. 1, 2011.
5. Extension of Emergency Foreclosure Program (S.L. 2010-168)
S.L. 2010-168 extends and expands the foreclosure prevention program and, inter alia, applies the pre-foreclosure notice requirement and the Administrative Office of Courts notice requirement to all home loans rather than just “subprime” or “rate spread home loans.” The legislation also increases the license and renewal fees for mortgage lenders, brokers and servicers. Becomes effective, as applicable, Aug. 2, 2010, Sept. 1, 2010, and Nov. 1, 2010.
For more information on these or other bills of interest, visit http://www.ncbar.org/governmental-affairs/legislative-bulletin/2010-legislative-bulletin.aspx
or go to www.ncbar.org and click on the Government Affairs link and then the Legislative Bulletin link.
Later practices with Robbins May & Rich LLP in Pinehurst and Griffith is Chief Legal and Ethics Officer at ElectriCities of North Carolina, Inc.
Views and opinions expressed in articles published herein are the authors' only and are not to be attributed to this newsletter, the section, or the NCBA unless expressly stated. Authors are responsible for the accuracy of all citations and quotations.