§ 106-435. Fund for support of system; collection and investment. - North Carolina Statutes

§ 106‑435.  Fund for support of system;collection and investment.

In order to provide a sufficient indemnifying or guarantee fund tocover any loss not covered by the bonds hereinbefore mentioned, in order toprovide the financial backing which is essential to make the warehouse receiptuniversally acceptable as collateral, and in order to provide that a Statewarehouse system intended to benefit all cotton growers in North Carolina shallbe supported by the class it is designed to benefit, it is hereby declared:that on each bale of cotton ginned in North Carolina during the period from theratification of this bill until June 30, 1922, twenty‑five cents (25¢)shall be collected through the ginner of the bale and paid into the Statetreasury, to be held there as a special guarantee or indemnifying fund tosafeguard the State warehouse system against any loss not otherwise covered.The State Tax Commission shall provide and enforce the machinery for thecollection of this tax, which shall be held in the State treasury to the creditof the State warehouse system. Not less than ten per centum (10%) of the entireamount collected from the per bale tax shall be invested in United Statesgovernment or farm loan bonds or North Carolina bonds, and the remainder may beinvested in amply secured first mortgage notes or bonds to aid and encouragethe establishment of warehouses operating under this system, and to aid andencourage the establishment of farm markets designed to serve the marketing,packaging, and grading needs for the sale and distribution of unprocessed farmcommodities when adequate markets are not otherwise provided. Such investmentsshall be made by the Board of Agriculture, with the approval of the Governorand Attorney General: Provided, such first mortgages shall be for not more thanone‑half the actual value of the warehouse property covered by suchmortgages, and run not more than 10 years: Provided further, that the interestreceived from all investments shall be available for appropriation for capitalprojects and nonrecurring expenditures as provided in the bill making theappropriation, and for the administrative expense of carrying into effect theprovisions of this law, including the employment of such persons and such meansas the State Board of Agriculture in its discretion may deem necessary:Provided further, that the guarantee fund, raised under the provisions ofsections 4907 to 4925 of the Consolidated Statutes of 1919, shall become to allintents and purposes a part of guarantee fund to be raised under this law andsubject to all the provisions hereof. The fund created by this section may beused for loans to owners of cotton gins to make improvements to gins to complywith federal and State air quality regulations, rules, and laws. The loansshall be secured and made under terms and conditions approved by the Board ofAgriculture. Income earnings, including earnings from interest, may also beused by the Department of Agriculture and Consumer Services for cottonpromotion activities. (1919, c. 168, s. 5; 1921, c. 137, s. 5; Ex. Sess. 1921, c. 28; C.S.,s. 4925(e); 1957, c. 1091; 1993, c. 561, s. 95(a); 1993 (Reg. Sess., 1994), c.769, s. 26(a); 1997‑261, s. 109.)