Amends GS Chapter 142 to add a new Article 1A limiting the ability of state entities to enter into certain debt arrangements for the acquisition or lease of assets without General Assembly approval. Provisions are as follows:
New GS 142-15.15 sets forth findings related to the purpose of the act and the impact of financing arrangements that obligate the state to make ongoing payments similar to those for borrowed money.
New GS 142-15.16 defines three terms for purposes of the Article: financing arrangement, state entity, and state-supported financing arrangements.
- Financing arrangement is defined as an arrangement with a term greater than one year that obligates the state to make payments to acquire (by lease or purchase) a capital asset, including an installment financing agreement or a lease-purchase agreement. Not included in the definition are true operating leases, contracts with extended payments related to project completion or asset delivery, and contracts that merely provide for retainage or interest charges for late payment.
- State entity is defined as any agency, board, commission, or similar entity of the State of North Carolina. Not included in the definition are political subdivisions of the state including municipalities, counties, and local boards of education.
- State-supported financing arrangement is defined as a financing arrangement that requires payments from any state funds or accounts derived from general revenues and other state taxes and fees (including the General Fund, the Highway Fund, and the Highway Trust Find). Not included in the definition are obligations funded by specified, limited, nontax sources.
New GS 142-15.17 prohibits a state entity from entering into a state-supported financing arrangement for the acquisition of a capital asset valued at $5 million or more unless the General Assembly enacts legislation specifically approving the acquisition or project to be financed and the use of a state-supported financing arrangement.
Effective when the act becomes law and applies to financing arrangements entered into on or after that date.
Bill Summaries: S471 DEBT ISSUANCE ACCOUNTABILITY ACT: GA APPROVAL.
Bill S 471 (2013-2014)Summary date: Mar 27 2013 - View Summary