Section 1 of the act is the "Public School Building Bond Act of 2017."
Defines several terms.
Provides for an election to be held in November of 2018 on the question of the issuance of the bonds authorized by this section. Provides for the text of the question on the ballot.
Authorizes the State Treasurer, upon an affirmative majority vote on the referendum as described, 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. Provides that the proceeds of the bonds and notes, including premium thereon, if any, are to be used to make grants to counties for paying the cost of public school capital outlay projects. Provides an itemized list of grant amounts to each public school system. Provides for the disposal of funds received by other means for this purpose, without regard to the restrictions imposed by this act. Provides for the proportional allocation of funds for local school administrative units located in more than one county, and for local school administrative units that consolidate into one unit. Provides for matching funds from the counties for specified portions of the allocated grants, at a specified rate. Requires counties to document and report their matching funds as required. Provides for the reallocation of certain portions of the grants from counties that do not meet the match requirements by January 1, 2024, to those that do meet the match requirements.
Directs the State Treasurer to put proceeds from the bonds and notes, including premium, into a special fund designated the "Public School Building 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. Provides for the disbursement of the funds under the supervision of the Director of the Budget, the State Treasurer, and the State Controller, in compliance with the State Budget Act. 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 aggretage 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.
Directs the State Board of Education to administer, supervise, and ensure that use of the proceeds comport with the purposes provided in this act. Directs each school administrative unit to submit to the State Board of Education its plans for the expenditure of proceeds under this act. Directs the State Board of Education to verify that the planned expenditures are within the allowed purposes, and if so, to make the proceeds to which the plans apply available to the school administrative unit. Directs local school administrative units to report by January 1, 2019, and quarterly thereafter, to the Department of Public Instruction on the projects funded from the proceeds of the bonds and notes. Directs the Department of Public Instruction to submit the reports to the Joint Legislative Capital Oversight Committee on Appropriations/Base Budget. Provides requirements for the reports.
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 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.
Status: Ref To Com On Rules and Operations of the Senate (Senate Action) (Apr 3 2017)
Bill S 542 (2017-2018)Summary date: Mar 30 2017 - More information