AN ACT TO ENACT THE EDUCATION BOND ACT OF 2019.
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.