Bill Summaries: H592 (2015-2016 Session)

  • Summary date: Apr 7 2015 - View summary

    Adds a new Article 1A to GS Chapter 142.

    Sets forth findings regarding occasions when the General Assembly has authorized the state and state entities to acquire or lease assets in arrangements that can obligate the state to make payments similar to the obligation of the state to make payments for borrowed money. Provides clarifying details as to the nature of these arrangements. Declares that the rationale for enacting Article 1A to GS Chapter 142 is to set limitations on the ability of state entities to enter into financing arrangements that constitute state-supported financing arrangements to ensure that (1) the General Assembly is involved in reviewing and authorizing such transactions and (2) the state entities and officials properly manage such transactions.

    Defines the following terms as they apply in this Article: (1) financing arrangement (does not include a true operating lease nor provisions in a construction or purchase contract with payments made over an extended period of time under the contract terms), (2) state entity, and (3) state-supported financing arrangement.

    Prohibits a state entity from entering into any state-supported financing arrangement regarding the acquisition of a capital asset with a value or $5 million or more unless the General Assembly has enacted legislation expressly approving (1) the acquisition, project, or undertaking to be financed and (2) the use of the state-supported financing arrangement. Provides additional details as to the form of the legislation required. Provides that arrangements to finance transportation infrastructure under partnership agreements entered into by the Department of Transportation in accordance with GS 136-18(39) and GS 136-18(39a) satisfy the project and financing approval requirements.

    Effective when the becomes law and applies to financing arrangements entered into on or after that date.