Bill Summary for S 643 (2021-2022)

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Summary date: 

Apr 8 2021

Bill Information:

View NCGA Bill Details2021
Senate Bill 643 (Public) Filed Tuesday, April 6, 2021
Intro. by Garrett, Batch, Crawford.

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Bill summary

Titles the act as the Invest NC Bond Act of 2021. States the act's purpose and legislative findings, and provides seven defined terms.

Subject to voter approval at the statewide election on November 2, 2021, authorizes the State Treasurer to issue and sell, either at one time or from time to time, general obligation bonds and notes up to $4.7 billion, subject to consent of the Council of State. Restricts use of the proceeds of the public improvement bonds and notes to specified projects and amounts, with general total amounts totals of: $2.5 billion for public instruction, $229 million for relocation of Health and Human Resources Headquarters, $155,821,500 for Department of Health and Human Services, $45 million for Reedy Creek Lab, $500 million for community colleges, $783 million for the University of North Carolina, and $439 million for the Department of Natural and Cultural Resources. Details special allocation provisions applicable to the following uses of bond and note proceeds.

Concerning proceeds used for public schools capital assistance, requires (1) equal allocation among counties of $1 billion; (2) allocation of $375 million among local administrative units located in counties whose wealth is less than the State average wealth, as specified; (3) allocation of $1,125,000,000 among local administrative units on the basis of average daily membership for the 2020-21 fiscal year, as specified; (4) except for low-wealth counties, 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 of Education and annual reports on the impact of funds provided on the property tax rate, and provisions for reallocating unmatched funds; and (5) guarantees proceeds received are used for acquisition of real property and construction, acquisition, reconstruction, enlargement, renovation or replacement of buildings and other structures, and that proceeds only supplement and do not decrease local funds for those projects.

Concerning proceeds used for community colleges for new construction, repairs, and renovations, requires the proceeds 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 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. 

Details the allocation and accounting of improvement 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 improvement 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.

Requires any funds from the bond authorized by this act that are expended for school technology for public schools to be reported to the State Board of Education and be credited against the judgment in N.C. Sch. Bds. Ass'n. v. Moore, No. 98-CVS-14159 (NC 41 Super. Ct.).