AN ACT TO DIRECT THE DEPARtMENT OF ENVIROnMENTAL QUALITY STATE ENERGY OFFICE TO FUND THE DEVELOPMENT AND IMPLEMENTATION OF NEIGHBORHOOD‑LEVEL TRANSFORMATIVE CLIMATE COMMUNITY PLANS THAT INCLUDE MULTIPLE, COORDINATE GREENHOUSE GAS EMISSION REDUCTION PROJECTS THAT PROVIDE LOCAL ECONOMIC, ENVIRONMENTAL, AND HEALTH BENEFITS TO DISADVANTAGED COMMUNITiES.

The General Assembly of North Carolina enacts:

SECTION 1.  This act shall be known as, and may be cited as, the North Carolina Transformative Climate Communities Act.

SECTION 2.  Article 7 of Chapter 143B of the General Statutes is amended by adding a new Part to read:

Part 32A. North Carolina Transformative Climate Communities.

§ 143B‑344.45.  Transformative Climate Communities Fund established; uses; priorities; cost‑share.

(a)        Fund Creation and Purpose. – The Transformative Climate Communities Fund is established as a special revenue fund within the Department of Environmental Quality's State Energy Office. The Fund provides grants to local governments statewide to help them achieve their greenhouse reduction and sustainability goals through planning and implementation of clean energy projects that provide local economic, environmental, and health benefits to disadvantaged communities.

(b)        Use of Funds. – Funds may be used to help communities with projects, including, but not limited to, the following:

(1)        The council shall award competitive grants to eligible entities through an application process. An eligible entity, including, but not limited to, a nonprofit organization, a community‑based organization, a faith‑based organization, a coalition or association of nonprofit organizations, a community development finance institution, a community development corporation, a local agency, a joint powers authority, or a tribal government, shall demonstrate multistakeholder partnerships with local agencies, community‑based organizations, workforce investment boards, and other stakeholders, as appropriate. The council shall award grants for projects that demonstrate community engagement in all phases.

(2)        In awarding grants, the council may give priority to plans and projects that cover areas that have a high proportion of census tracks identified as disadvantaged communities and that focus on communities that are most disadvantaged.

(3)        The State Energy Office may award a grant over multiple years.

(4)        In order to be eligible for funding under the program, a plan, and a project that implements a plan, shall demonstrate that it will achieve a reduction in emissions of greenhouse gases.

(5)        The Department of Environmental Quality shall provide assistance in performing outreach to disadvantaged communities and assessing the environmental justice benefits of project awards.

(6)        Projects shall maximize climate, public health, environmental, workforce, and economic benefits.

(c)        Additional Funding. – The State Energy Office and all funded entities shall endeavor to identify additional public and private sources of funding to sustain and expand the program and shall fund technical assistance providers to assist in application development and project development and implementation.

(d)       Grant Guidelines. – Before awarding funds under the program, the State Energy Office shall develop guidelines and selection criteria for plan development and implementation of the program. In adopting guidelines and selection criteria, the State Energy Office shall consider comments, if any, from local governments, regional agencies, and other stakeholders. The council shall conduct outreach to disadvantaged communities to encourage comments on the draft guidelines and selection criteria from those communities. In adopting the guidelines, the State Energy Office shall consider whether eligible plans and projects avoid economic displacement of low‑income disadvantaged community residents and businesses.

(e)        Report. – The State Energy Office shall report on the commitment, disbursement, and use of funds allocated from the Transformative Climate Communities Fund at the end of each fiscal year. The report is due no later than September 1 and must be submitted to the Joint Legislative Commission on Energy Policy and the Fiscal Research Division of the General Assembly.

SECTION 3.  The sum of five hundred thousand dollars ($500,000) in nonrecurring funds for the 2023‑2024 fiscal year and the sum of seven hundred fifty thousand dollars ($750,000) in nonrecurring funds for the 2024‑2025 fiscal year are appropriated from the General Fund to the State Energy Office for the Transformative Climate Communities Fund established by G.S. 143B‑344.45, as enacted by Section 2 of this act, to be used for the purposes set forth therein.

SECTION 4.  Section 3 of this act becomes effective July 1, 2023. The remainder of this act is effective when it becomes law.