AN ACT TO ENACT THE EDUCATION AND TRANSPORTATION BOND ACT OF 2020.
Titles the act as the Education and Transportation Bond Act of 2020. State's the act's purpose is to provide for the issuance of $3.1 billion in general obligation bonds to provide funding for facilities of public schools ($800 million), community colleges ($200 million), and UNC ($600 million), as well as public transportation infrastructure projects ($1.5 billion). Sets forth defined terms.
Subject to voter approval at the statewide general election in 2020, authorizes the State Treasurer to issue and sell, either at one time or from time to time, general obligation bonds and notes up to $3.1 billion, subject to consent of the Council of State. States legislative intent for debt service on public improvement bonds authorized for transportation projects to be provided from amounts deposited in the Highway Trust Fund. Caps the principal amount of bonds or notes issued in any 12-month period at $591 million; excludes the issuance of a note or bond to pay an outstanding note.
Restricts use of the proceeds of the education and transportation bonds and notes to specified projects and amounts, with amounts totals of: $800 million for public school outlay projects and repairs or renovations, $600 million for the 11 specified UNC constituent institution projects, $200 million for community college capital outlay projects and repairs and renovations, and $1.5 billion for supplemental highway funding for construction and renovations. Details special allocation provisions applicable to the following uses of bond and note proceeds.
Concerning proceeds used for public school capital outlay projects, requires (1) determination of financed projects by the State Board of Education (State Board) upon county application; (2) allocations to be distributed to local school administrative units located entirely in one county, or in proportion to average daily membership if a units covers more than one county; and (3) except for low-wealth counties or adjustment factor designation allocations, local matching of proceeds at a $1 match for every $3 of proceeds for units in development tier one areas, $1 match for every $2 of proceeds for units in development tier two areas, and $1 match for every $1 of proceeds for units in development tier three areas, with periodic reports on matching to the State Board and annual reports on the impact of funds provided on the property tax rate, and provisions for reallocating unmatched funds. Additionally, encourages consideration by counties and local units of projects that primarily involve materially improving the energy efficiency of the school facility.
Concerning proceeds used for capital outlay projects for UNC institutions upon application to the Board of Governors, requires the proceeds to be used for new construction or rehabilitation of existing facilities and repairs and renovations only. Requires all such purchases and replacements to have a useful life of at least 10 years and any renovation must extend the useful life of the facility at least 10 years. Requires matching of proceeds for new construction projects only. Sets out factors the Board of Governors must consider in determining the allocation of proceeds, including the development tier area designation.
Concerning proceeds used for capital outlay projects for community colleges upon application by the community college to the Community College System Office (CC System Office), requires the proceeds to be used for upgrades to the enterprise resource planning information technology, new construction or rehabilitation of existing facilities, and repairs and renovations. Requires all such purchases and replacements to have a useful life of at least 10 years and any renovation must extend the useful life of the facility at least 10 years. Requires matching of proceeds for new construction projects only at $1 match for every $3 of proceeds for projects in development tier one areas, $1 match for every $2 of proceeds for projects in development tier two areas, and $1 match for every $1 of proceeds for projects in development tier three areas, with tier designation based on main campus location. Prohibits the use of prior expenditures for matching purposes. Sets out factors the CC System Office must consider in determining the allocation of proceeds, including the development factor ranking for development tier designation.
Concerning proceeds used for statewide supplemental highway funding for transportation, restricts use to highway projects that have an environmental impact statement completed prior to January 1, 2020, has a construction date projected by the Department of Transportation (DOT) to commence by January 1, 2022, and the project meets all of the requirements under the Strategic Prioritization Funding Plan for Transportation Investments of Article 14B, GS Chapter 136.
Details the allocation and accounting of education and transportation bond proceeds. Allows for investment by the State Treasurer and use of investment earnings as specified. Sets forth further parameters regarding use of proceeds with other available monies and disbursement. Requires the State Treasurer or a designee to set up a comprehensive system of tracking the proceeds to account for use and compliance. Allows the State Treasurer to withhold proceeds for not complying with tracking requirements.
Details the procedure and requirements for issuance of the education and transportation bonds and notes, including: required terms and conditions; required signatures, forms, and registration; the manner of sale and expenses; notes and repayment; refunding of bonds and notes; tax exemption; investment eligibility; faith and credit of the State pledged; and other agreements the State Treasurer can provide for bond insurance and other derivative products.
Provides for the variable rate demand authority of the State Treasurer of the bonds and notes and sets restrictions concerning the aggregate principal amounts payable by the State under a credit facility, as defined by the act.
Provides guidance for the act's interpretation, including that the act is meant to provide an additional or alternative financing method, statutory cross references may be amended, the act is to be construed broadly, the act supersedes other conflicting law; and the act's provisions are severable.
Charges each entity receiving the proceeds of the education and transportation bonds and notes with the administration, supervision and compliance in accordance with the act. Requires each local school administrative unit and county board of commissioners to jointly submit a plan for expenditure of the proceeds to the State Board of Education, who must ensure compliance with the act and make the proceeds available to the unit. Requires the receiving unit to quarterly report to the State Board, beginning January 1, 2022, on projects funded. Requires the State Board to combine the reports and submit the reports in the form specified to the specified NCGA committees. Establishes similar quarterly reporting requirements for recipient UNC constituent institutions and the BOG, and recipient community colleges and the CC System Office. Finally, establishes quarterly reporting requirements for DOT, beginning January 1, 2022, for projects funded by bond and note proceeds.
Provides for the Office of State Budget and Management to hold and administer portions of funds estimated to be needed for escalation of project costs. Requires OSBM to report on retained funds within 90 days of a project's completion.
Provides for the transfer of voters between precincts for the 2020 general election.
Requires any funds from the authorized bond expended for school technology for public schools to be reported to the State Board and credited against the specified NC Superior Court judgement.
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