AN ACT to strengthen the meat and seafood processing industries in north carolina by making permanent the Increasing MEAT and SEAFOOD Production and Capacity Grant program.

The General Assembly of North Carolina enacts:

SECTION 1.  Chapter 106 of the General Statutes is amended by adding a new Article to read:

Article 49I.

Increasing Meat and Seafood Production and Capacity Grant Program.

§ 106‑549.100.  Findings; program established.

(a)        Findings. – The General Assembly finds that the COVID‑19 pandemic of 2020‑2021 resulted in serious and substantial impacts on the food supply chain and revealed bottlenecks and lack of capacity among the small and independent meat processors who serve small livestock producers. These bottlenecks and lack of capacity have a substantial negative impact on the ability of these small livestock producers to have their livestock slaughtered and processed. In addition, seafood processors lack capacity to meet increased and altered consumer demand for seafood products due to supply chain disruptions and other long‑term changes in the market for seafood and seafood products. The General Assembly further finds that financial assistance to these processors for physical expansion and facility improvements, for workforce development, and for the creation of additional processing capacity is necessary to reduce disruptions in the supply chain for fresh meat and seafood and to help small producers get their products to market.

(b)        Program. – There is established the Increasing Meat and Seafood Production and Capacity (IMSPAC) grant program to provide grants as specified in this Article to reduce or prevent impacts on the supply chain for fresh meat in the State and to improve the resiliency of the fresh meat and seafood supply chain to future disruptions.

§ 106‑549.101.  Grant types and criteria.

The Department shall develop policies and procedures for the disbursement of IMSPAC grants authorized by this section that include, at a minimum, the following:

(1)        The Department may provide four categories of grants:

a.         Capacity enhancement grant. – This grant is available to an eligible meat or seafood processing facility that is experiencing slowdowns in production or has limited capacity to accommodate increased demand for meat or seafood processing. A capacity enhancement grant may be used for expansion of an existing eligible facility and for fixtures or equipment at an existing eligible facility that will expand animal throughput, processing capacity, the amount or type of products produced, or processing speed. A grant under this sub‑subdivision may not exceed five hundred thousand dollars ($500,000).

b.         Workforce development grant. – This grant is available to an eligible meat or seafood processing facility that is experiencing slowdowns in production or has limited capacity to accommodate increased demand for meat or seafood processing due to workforce limitations or reductions due to a pandemic or other natural disaster. A workforce development grant may be used for educational and workforce training provided either by the facility or by an institution of higher education. A grant under this sub‑subdivision may not exceed one hundred thousand dollars ($100,000).

c.         Planning grant. – This grant is available to a nonprofit entity or institution of higher education to complete feasibility or siting studies for a new eligible meat processing facility. No more than five percent (5%) of funds available in any grant cycle may be used for grants under this sub‑subdivision.

d.         New facility development grant. – This grant is available to provide matching funds to persons or entities seeking to develop a new meat or seafood processing facility. A new facility development grant may be used for construction of a new building, for upfit and renovation of an existing building, and for fixtures or equipment. To receive a grant under this sub‑subdivision, the grantee must demonstrate that the new meat or seafood processing facility will provide additional needed capacity by either (i) serving a currently underserved area or (ii) producing a meat or seafood product not currently produced in the State. A grant under this sub‑subdivision may not exceed one million dollars ($1,000,000).

(2)        Eligible facility. – For purposes of this section, an eligible meat or seafood processing facility is a food processing facility that meets both of the following requirements:

a.         The plant contracts with independent livestock producers or seafood harvesters to process animals or seafood.

b.         The United States Department of Agriculture (USDA) contracts with Department inspectors to conduct federal inspection activities authorized by the Talmadge‑Aiken Act of 1962 (7 U.S.C. § 1633) at the plant, the plant is otherwise regulated by the USDA or the FDA, or the plant is a State‑inspected facility.

(3)        Prioritization. – The Department may prioritize projects that will create additional jobs.

(4)        Cost‑sharing. – Recipients shall provide matching funds for a grant under sub‑subdivision (1)a., (1)b., or (1)c. of this section in the amount of one dollar ($1.00) from nongrant sources for every two dollars ($2.00) provided by the grant. Recipients shall provide matching funds for a grant under sub‑subdivision (1)d. of this section in the amount of one dollar ($1.00) from nongrant sources for every one dollar ($1.00) provided by the grant.

(5)        Clawback. – The following clawback provisions apply to grants under this Article:

a.         With respect to new facility development grants, the Department shall require the recipient to keep the new meat or seafood processing facility in service for a minimum term of five years. If the facility does not remain in service for the required term, the Department shall recapture, at a minimum, the amount of the grant directly proportionate to the remainder of the minimum term that the recipient failed to keep the facility in service.

b.         If fixtures or equipment purchased with grant funds provided under this Article are disposed of during a period of time as the Department may specify following the date the fixtures or equipment funded by this act is placed in service, the grant recipient shall repay to the Department a proportionate share of the grant funding received as the Department may specify. As used in this subdivision, the term disposed of means disposed of, taken out of service, or moved out of State.

(6)        Rules authorized. – The Department may adopt temporary and permanent rules to implement the IMSPAC grant program authorized by this Article.

SECTION 2.(a)  It is the intent of the General Assembly to appropriate ten million dollars ($10,000,000) in nonrecurring funds for the 2021‑2022 fiscal year from the Coronavirus Relief Fund, to be allocated to the Department of Agriculture and Consumer Services for the purposes set forth in this act that are compatible with COVID‑19 Recovery Legislation, as that term is defined in S.L. 2020‑4, or with any subsequent federal legislation that provides COVID‑19 relief funds to the State.

SECTION 2.(b)  There is appropriated from the General Fund to the Department of Agriculture and Consumer Services the sum of forty million dollars ($40,000,000) in nonrecurring funds for the 2021‑2022 fiscal year for the IMSPAC grant program established by this act.

SECTION 2.(c)  The following restrictions apply to funds appropriated for the IMSPAC grant program by this section:

(1)        Not more than thirty‑five percent (35%) may be used for grants to new or existing seafood processors.

(2)        Not more than fifty percent (50%) may be used for new facility development grants, as that term is defined by G.S. 106‑549.101, as enacted by Section 1 of this act.

SECTION 2.(d)  The provisions of G.S. 143C‑5‑2 do not apply to this act.

SECTION 3.  Section 2(b) of this act becomes effective July 1, 2021. The remainder of this act is effective when it becomes law.