EDUCATION BOND ACT OF 2019.

View NCGA Bill Details2019-2020 Session
House Bill 241 (Public) Filed Thursday, February 28, 2019
AN ACT TO ENACT THE EDUCATION BOND ACT OF 2019.
Intro. by Moore, Johnson, Elmore, Horn.

Status: Ref To Com On Rules and Operations of the Senate (Senate action) (Mar 18 2019)
H 241

Bill Summaries:

  • Summary date: Mar 11 2019 - More information

    House committee substitute makes the following changes to the 2nd edition.

    Modifies the defined terms capital outlay project for a constituent institution and community college capital outlay project to more specifically include the construction, acquisition, and installation of technology infrastructure at or in support of a UNC constituent institution and  community college (was, the building of technology infrastructure). Makes other clarifying and organizational changes to the two terms. Makes clarifying and technical changes to the definition of cost and expands the term to include costs incurred by the State in administering the bond issues, including costs of trustees, escrow agents, arbitrage rebate liability consultants, securities disclosure counsel or similar consultants, tax consultants and financial advisors, to the extent and as determined by the State Treasurer. Makes technical changes to the term par formula. Modifies the defined term public school capital outlay project to more specifically include the construction, acquisition, and installation of technology infrastructure for a public school building (was, the building of technology infrastructure). Makes further clarifying and organizational changes to the term.

    Makes technical changes to refer to the act rather than the section throughout the act. 

    Makes technical corrections to the total amounts set forth in Section 1.(e) of the act which may be granted to counties for paying the cost of public school capital outlay projects.

    Adds to the special allocation provisions concerning bond proceeds allocated for public school capital outlay projects. Now requires the State Board of Education (State Board) to determine the public school capital outlay projects to be financed with the bond proceeds based upon the act's criteria and upon application by the county in which the project is to be located or that will otherwise be served by the project. Makes clarifying, technical, and organizational changes to the local match provisions for public school capital outlay projects which are allocated bond proceeds. Adds a new provision directing the State Board to require counties to report annually on the impact of funds provided under the act on the property tax for that year. Specifies the reports are public documents and must be furnished to any citizen upon request. Further amends the special allocation provisions concerning bond proceeds allocated for public school capital outlay projects, providing that the General Assembly encourages consideration by counties and local school administrative units of projects that primarily involve materially improving the energy efficiency of the school facility (previously, directed the State Board to give consideration to those projects). 

    Adds to the special allocation provisions concerning bond proceeds allocated for outlay projects for a constituent institution. Now requires the UNC Board of Governors (BOG) to determine the capital outlay projects for constituent institutions to be financed with the bond proceeds based upon the act's criteria and upon application by the county in which the project is to be located or that will otherwise be served by the project. Amends further to make clarifying changes. 

    Adds to the special allocation provisions concerning bond proceeds allocated for outlay projects for a community college. Now requires the Community Colleges System Office to determine the capital outlay projects for community colleges to be financed with the bond proceeds based upon the act's criteria and upon application by the county in which the project is to be located or that will otherwise be served by the project. Amends further to make clarifying changes. Specifies that no funds are required to match bond proceeds allocated in the act for the enterprise resource planning information technology (ERP system) project.

    Amends the bond question ballot language to now describe the bond's purpose as funding capital improvements, construction of new facilities, and the renovation and rehabilitation of existing facilities for the State's public education system in local school administrative units, community colleges in the NC Community College System, and constituent institutions of UNC (previously, separated the different capital outlay projects and set out their respective total allocations by the act).

    Modifies the broad construction directive concerning the act's interpretation, providing that the General Assembly finds the projects identified under the act to constitute an interrelated, united, and single plan for the State's public education system (was, for the State's infrastructure) when taken together.


  • Summary date: Mar 5 2019 - More information

    House committee substitute makes the following changes to the 1st edition. 

    Makes technical corrections to subsection (2) of Section 1(e) of the act, which sets out special allocation provisions for determining the use of the proceeds of education bonds and notes. Now correctly refers to sub-sub-subdivision a.3. regarding local matching requirements for certain counties receiving grants from the proceeds of education bonds and notes allocated for the purpose of paying the cost of public school capital outlay projects and repairs and renovations. Makes further internal reference corrections in sub-sub-subdivision a.3.

    Amends the special allocation provisions for the use of the proceeds of education bonds and notes for paying the costs of capital outlay projects and repairs and renovations for community colleges set out in Section 1(e), subsection(2), sub-sub-subdivision c.3. Modifies the components the Community College System Office must use to prioritize between community college projects for which bond proceeds are allocated, to include the development factor ranking by the Secretary of Commerce pursuant to GS 143B-437.08 for identification of the development tier of the county in which the project is located (previously included the county wealth rank of the county in which the main campus is located; maintains the single weight to be given to this component in the System's ranking).

    Amends the call for an election to be held in November of 2020 on the question of the issuance of the $1.9 billion of bonds. Instead calls for the election to be held at the time of the election in 2020 when voters are given the opportunity to express their presidential candidate preference of their political party. Makes a technical correction to reference the State Board of Elections. Makes conforming changes. 

    Makes clarifying and technical changes to the reporting requirements of each constituent institution of UNC and each community college which receives the proceeds of education bonds and notes, as specified.


  • Summary date: Feb 28 2019 - More information

    Titles the act as the Education Bond Act of 2019.

    Sets out the purpose of the act as, subject to a voter approval, issuing $1.9 billion in general obligation bonds of the State to provide funds for: (1) public school facilities through grants to counties for public school capital outlay projects and repairs and renovations, in the amount of $1.5 billion; (2) for community college facilities for community college capital outlay projects and repairs and renovations, in the amount of $200 million, and (3) for The University of North Carolina facilities for capital outlay projects for constituent institutions and repairs and renovations at such institutions, in the amount of $200 million.

    Defines several terms as they are used in the act, including defining capital outlay projects.

    Provides for an election to be held in November of 2020 on the question of the issuance of the $1.9 billion of bonds. Provides for the text of the question on the ballot.

    Authorizes the State Treasurer, upon an affirmative majority vote by voters, to issue and sell general obligation bonds of the State, or notes of the State, in an aggregate principal amount not exceeding $1.9 billion, for the purpose of providing funds, with any other available funds, for the purposes described in this Act. Prohibits the principal amounts of bonds or notes issued in any 12 month period from exceeding $591 million.

    Requires that $1.5 billion of the proceeds of the education bonds and notes be used to make grants to counties for paying the cost of public school capital outlay projects and repairs and renovations. Provides an itemized list of grant amounts to each public school system. Sets out four special allocation provisions related to the use of these proceeds, including when a local match is required and the amount of matching funds required.

    Requires that $200 million of the proceeds of education bonds and notes be used for paying the costs of capital outlay projects for UNC constituent institutions and repairs and renovations. Sets out two special allocation provisions related to the use of these proceeds, including factors for the Board of Governors to consider when allocating proceeds.

    Requires that $200 million of the proceeds of education bonds and notes be used for paying the costs of community college capital outlay projects and repairs and renovations. Sets out three special allocation provisions related to the use of these proceeds, including requirements for local matching funds.

    Directs the State Treasurer to put proceeds from the bonds and notes, including premiums, into a special fund designated the Education Bonds Fund (Fund). Provides that money in the Fund may be invested by the State Treasurer, and that investment earnings may be credited to the Fund or used to satisfy compliance with applicable requirements of federal tax law. Authorizes and directs the State Treasurer to set up a system to track the proceeds of the bonds and notes to properly account for the use of the proceeds. Requires recipients of the proceeds to comply with the tracking system. Authorizes the State Treasurer to withhold proceeds from recipients who fail to comply with the tracking system.

    Provides for the issuance and form of the bonds and notes. Directs the State Treasurer to determine the manner in which the bonds or notes shall be offered for sale, and authorizes the Treasurer to sell the bonds. Directs the State Treasurer to pay the cost of preparing, selling, and issuing the bonds or notes.

    Authorizes the State Treasurer to borrow money and execute and issue notes of the State under specified conditions relating to the sale of the bonds. Authorizes the State Treasurer, by and with the consent of the Council of State, to issue and sell refunding bonds to refund bonds or notes pursuant to this section.

    Exempts the bonds and notes from all State, county, and municipal tax assessments. Interest on the bonds and notes is not taxable as income.

    Authorizes all public officers, agencies, and public bodies of the state; all insurance companies; trust companies; investment companies; banks; savings banks; savings and loan associations; credit unions; pension or retirement funds; other financial institutions; executors; administrators; trustees; and other fiduciaries to properly and legally invest funds in the bonds and notes.

    Pledges the faith and credit and taxing power of the State for the payment of the principal and interest on the bonds and notes.

    Authorizes the State Treasurer to provide that the bonds or notes may be made payable on demand or tender for purchase by the owner, subject to a credit facility agreement; be additionally supported by a credit facility agreement; be made subject to redemption or a mandatory tender for purchase prior to maturity; bear interest at variable rates; and be made the subject of a remarketing agreement whereby an attempt is made to remarket the bonds or notes to new purchasers prior to their presentment for payment to the provider of the credit facility agreement to the State. Provides that if the aggregate principal amount repayable by the State under a credit facility agreement is in excess of the aggregate principal amount of bonds or notes secured by the credit facility agreement, then the amount of authorized but unissued bonds or notes shall not be less than the amount of the excess, unless the payment of the excess is otherwise provided for by agreement of the State.

    Provides clarification for the interpretation of the section, including clauses on additional methods of carrying out the section, statutory references, statutory construction, inconsistent provisions, and severability.

    Authorizes the State Treasurer to authorize, execute, obtain, or otherwise provide for other related interests and matters the State Treasurer determines to be desirable in connection with the issuance of bonds and notes.

    Requires each entity, upon receiving the proceeds of education bonds and notes, to administer, supervise, and ensure that use of the proceeds comport with the purposes provided in this act. Requires local school administrative units, and the corresponding board of county commissioners, to submit a plan to the State Board of Education on the expenditure of allocated proceeds. Funds are made available once the State Board of Education determines that a local school administrative unit's planned expenditure is within the purposes provided in this act. Sets out reporting requirements.

    Requires each UNC constituent institution and community college receiving the proceeds of education bonds and notes to report quarterly on the projects funded from education general obligation bonds.

    Provides for the custody and disbursement of funds to address unforeseen contingencies for a specific project, or to address inflation costs for a specific project.

    Provides for funds retained by the Office of State Budget and Management at the time a project is completed to be retained by the Office of State Budget and Management, and to be reported within 90 days of a project's completion.

    Provides that transfers of voters from a given precinct, for the purpose of voting, to an adjacent precinct for the November 2020 election must be for that election only and must not apply to any subsequent election.

    Provides that any funds from the Public School Building Bond expended for school technology shall be reported to the Department of Public Instruction and credited against the judgment in NC Sch. Bds. Ass'n. v. Moore.


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