GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1993

S	2 

SENATE BILL 14
Select Committee on Bonds Committee Substitute Adopted 4/15/93

Short Title:  1993 Education and Infrastructure GO Bond Act.	(Public)
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Sponsors:
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Referred to:  Finance.

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January 28, 1993

A BILL TO BE ENTITLED
AN ACT TO AUTHORIZE THE ISSUANCE OF NINE HUNDRED EIGHTY-NINE MILLION DOLLARS IN GENERAL OBLIGATION BONDS OF THE STATE, SUBJECT TO A VOTE OF THE QUALIFIED VOTERS OF THE STATE, TO PROVIDE FUNDS FOR (1) CAPITAL IMPROVEMENTS FOR THE UNIVERSITY OF NORTH CAROLINA, (2) CAPITAL IMPROVEMENTS FOR COMMUNITY COLLEGES, (3) PUBLIC SCHOOL FACILITIES FOR COUNTIES, (4) GRANTS, LOANS, AND REVOLVING LOANS TO LOCAL GOVERNMENT UNITS FOR WATER SUPPLY SYSTEMS, WASTEWATER COLLECTION SYSTEMS, WASTEWATER TREATMENT WORKS, AND WATER CONSERVATION PROJECTS, AND (5) GRANTS AND LOANS TO LOCAL GOVERNMENT UNITS FOR SOLID WASTE MANAGEMENT.
The General Assembly of North Carolina enacts:
Section 1.  Short title.  This act shall be known and may be cited as the "Education and Environmental Infrastructure Bond Act of 1993".
Sec. 2.  Purpose. It is the intent of the General Assembly by this act to provide for the issuance of nine hundred eighty-nine million dollars ($989,000,000) in general obligation bonds of the State, and to provide that the proceeds realized from the sale of the bonds shall be allocated as follows:
(1)	Two hundred ninety-eight million dollars ($298,000,000) to facilitate the providing of capital improvements for certain of the constituent or affiliated institutions of The University of North Carolina.
(2)	One hundred ninety-one million dollars ($191,000,000) to provide grants to individual community colleges to assist in the financing of the costs of community college capital improvements.  
(3)	Two hundred fifty million dollars ($250,000,000) to provide grants and loans to counties for public school buildings.  The loans shall be repayable by local governments from local funds available for that purpose.
(4)	Twenty-five million dollars ($25,000,000) to provide State matching funds required to receive federal wastewater assistance funds and to provide additional funding for the Clean Water Revolving Loan and Grant Fund established in Chapter 159G of the General Statutes and one hundred twenty-five million dollars ($125,000,000) to provide loans to local government units to assist in the financing of the cost of improvements, enlargements, extensions, and reconstruction of water supply systems, wastewater collection systems, wastewater treatment works, and water conservation projects  and the construction of new such systems and works. 
		The funds to be derived from the sale of the bonds authorized by this act for water and wastewater needs are sufficient to meet no more than a fraction of the needs which now exist and will arise in the immediate future.  For this reason, although public necessity and the criteria established by Chapter 159G of the General Statutes shall be the primary consideration in granting and loaning funds, great emphasis shall also be placed on the creation of efficient systems of regional wastewater disposal and regional water supply, and on the willingness and ability of local government units to meet their responsibilities through sound fiscal policies and plans and efficient operation and management.
(5)	Twenty-five million dollars ($25,000,000) to provide grants to groups of two or more local government units in different counties to assist in the financing of the cost of solid waste regional facilities and seventy-five million dollars ($75,000,000) to provide loans to local government units to assist in the financing of the cost of solid waste infrastructure needs.  
		The funds to be derived from the sale of the bonds authorized by this act for solid waste infrastructure needs are sufficient to meet no more than a fraction of the needs which now exist and will arise in the immediate future.  For this reason, although public necessity and the criteria established by Chapter 159I of the General Statutes shall be the primary consideration in granting and loaning funds, great emphasis shall also be placed on the creation of regional solid waste facilities, and on the willingness and ability of local government units to meet their responsibilities through sound fiscal policies and plans and efficient operation and management.
Sec. 3.  Definitions.  As used in this act, unless the context otherwise requires:
(1)	" Bonds" means bonds issued under this act.
(2)	" Clean Water Revolving Loan and Grant Act" means Chapter 796 of the 1987 Session Laws, as the same may be amended from time to time, codified as Chapter 159G of the General Statutes.
(3)	" Clean Water Revolving Loan and Grant Fund" means the Clean Water Revolving Loan and Grant Fund as defined in the Clean Water Revolving Loan and Grant Act.
(4)	" Cost" means, without intending thereby to limit or restrict any proper definition of this term in financing the cost of facilities or purposes authorized by this act:
a.	The cost of constructing, reconstructing, enlarging, acquiring, and improving facilities, and acquiring equipment and land therefor,
b.	The cost of engineering, architectural, and other consulting services as may be required,
c.	Administrative expenses and charges,
d.	The cost of bond insurance, investment contracts, credit enhancement and liquidity facilities, interest-rate swap agreements, financial and legal consultants, and related costs of bond and note issuance, to the extent and as determined by the State Treasurer, and 
e.	Any other costs and expenses necessary or incidental to the purposes of this act.
	Allocations in this act of proceeds of bonds to the costs of a project or undertaking in each case may include allocations to pay the costs set forth in items c., d., and e. in connection with the issuance of bonds for the project or undertaking.
(5)	" Credit facility" means an agreement entered into by the State Treasurer on behalf of the State with a bank, savings and loan association, or other banking institution, an insurance company, reinsurance company, surety company, or other insurance institution, a corporation, investment banking firm, or other investment institution, or any financial institution or other similar provider of a credit facility, which provider may be located within or without the United States of America, such agreement providing for prompt payment of all or any part of the principal or purchase price (whether at maturity, presentment or tender for purchase, redemption or acceleration), redemption premium, if any, and interest on any bonds or notes payable on demand or tender by the owner, in consideration of the State agreeing to repay the provider of the credit facility in accordance with the terms and provisions of such agreement.
(6)	" Local government units" means local government units as defined in the Clean Water Revolving Loan and Grant Act.
(7)	" Notes" means notes issued under this act.
(8)	" Par formula" means any provision or formula adopted by the State to provide for the adjustment, from time to time, of the interest rate or rates borne by any bonds or notes, including:
a.	A provision providing for such adjustment so that the purchase price of such bonds or notes in the open market would be as close to par as possible,
b.	A provision providing for such adjustment based upon a percentage or percentages of a prime rate or base rate, which percentage or percentages may vary or be applied for different periods of time, or
c.	Such other provision as the State Treasurer may determine to be consistent with this act and will not materially and adversely affect the financial position of the State and the marketing of bonds or notes at a reasonable interest cost to the State.
(9)	" State" means the State of North Carolina.
(10)	" Wastewater collection systems" means wastewater collection systems as defined in the Clean Water Revolving Loan and Grant Act.
(11)	" Wastewater treatment works" means wastewater treatment works as defined in the Clean Water Revolving Loan and Grant Act.
(12)	" Water Pollution Control Revolving Fund" means the fund described by G.S. 159G-4(a) and G.S. 159G-5(c).
(13)	" Water supply systems" means water supply systems as defined in the Clean Water Revolving Loan and Grant Act.
Sec. 4.  Authorization of bonds and notes. (a)	University Improvement Bonds.  Subject to a favorable vote of a majority of the qualified voters of the State who vote on the question of issuing University Improvement Bonds in the election held as provided in this act, the State Treasurer is authorized, by and with the consent of the Council of State, to issue and sell, at one time or from time to time, general obligation bonds of the State to be designated "State of North Carolina University Improvement Bonds", with any additional designations as may be determined to indicate the issuance of bonds from time to time, or notes of the State as provided in this act, in the aggregate principal amount not exceeding two hundred ninety-eight million dollars ($298,000,000) for the purposes authorized in this act.
(b)	Community College Bonds.  Subject to a favorable vote of a majority of the qualified voters of the State who vote on the question of issuing Community College Bonds in the election held as provided in this act, the State Treasurer is authorized, by and with the consent of the Council of State, to issue and sell, at one time or from time to time, general obligation bonds of the State to be designated "State of North Carolina Community College Bonds", with any additional designations as may be determined to indicate the issuance of bonds from time to time, or notes of the State as provided in this act, in the aggregate principal amount not exceeding one hundred ninety-one million dollars ($191,000,000) for the purposes authorized in this act.
(c) Public School Buildings Bonds.  Subject to a favorable vote of a majority of the qualified voters of the State who vote on the question of issuing Public School Buildings Bonds in the election held as provided in this act, the State Treasurer is authorized, by and with the consent of the Council of State, to issue and sell, at one time or from time to time, general obligation bonds of the State to be designated "State of North Carolina Public School Buildings Bonds", with any additional designations as may be determined to indicate the issuance of bonds from time to time, or notes of the State as provided in this act, in the aggregate principal amount not exceeding two hundred fifty million dollars ($250,000,000) for the purposes authorized in this act.
(d) Clean Water Bonds.  Subject to a favorable vote of a majority of the qualified voters of the State who vote on the question of issuing Clean Water Bonds in the election called and held as provided in this act, the State Treasurer is hereby authorized, by and with the consent of the Council of State, to issue and sell, at one time or from time to time, general obligation bonds of the State to be designated "State of North Carolina Clean Water Bonds", with any additional designations as may be determined to indicate the issuance of bonds from time to time, or notes of the State as provided in this act, in an aggregate principal amount not exceeding one hundred fifty million dollars ($150,000,000) for the purpose of providing funds, with any other available funds, for the purposes authorized in this act.
(e) Solid Waste Infrastructure Bonds.  Subject to a favorable vote of a majority of the qualified voters of the State who vote on the question of issuing Solid Waste Infrastructure Bonds in the election called and held as provided in this act, the State Treasurer is hereby authorized, by and with the consent of the Council of State, to issue and sell, at one time or from time to time, general obligation bonds of the State to be designated "State of North Carolina Solid Waste Infrastructure Bonds", with any additional designations as may be determined to indicate the issuance of bonds from time to time, or notes of the State as provided in this act, in the aggregate principal amount not exceeding one hundred million dollars ($100,000,000) for the purposes authorized in this act.
Sec. 5.  Uses of bond and note proceeds. (a) University Improvement Bonds.  The proceeds of University Improvement Bonds and notes shall be used for the purpose of paying (i) the cost of improvements to the facilities of the constituent or affiliated institutions of The University of North Carolina, under the supervision of the Board of Governors of The University of North Carolina, including, without limitation, construction and renovation of classroom buildings, laboratory buildings, research facilities, libraries, physical education facilities, continuing education centers, student cafeteria and activity facilities, including sports facilities, administrative office buildings, and land acquisition and (ii) the cost of improvements to the North Carolina Center for Public Television under the Board of Governors of The University of North Carolina.  The buildings constructed using the proceeds of the bonds shall comply with the energy design guidelines developed by the Energy Division of the Department of Commerce.
Any additional moneys that may be received by means of a grant or grants from the United States of America or any agency or department thereof or from any other source to aid in financing the cost of any university improvements authorized by this act may be placed by the State Treasurer in the University Improvement Bonds Fund or in a separate account or fund and shall be disbursed, to the extent permitted by the terms of the grant or grants, without regard to any limitations imposed by this act.
The proceeds of University Improvement Bonds and notes may be used with any other moneys made available by the General Assembly for the making of university improvements, including the proceeds of any other State bond issues, whether heretofore made available or which may be made available at the session of the General Assembly at which this act is ratified or any subsequent sessions.  The proceeds of University Improvement Bonds and notes shall be expended and disbursed under the direction and supervision of the Director of the Budget.  The funds provided by this act for university improvements shall be disbursed for the purposes provided in this act upon warrants drawn on the State Treasurer by the State Controller, which warrants shall not be drawn until requisition has been approved by the Director of the Budget and which requisition shall be approved only after full compliance with the Executive Budget Act, Article 1 of Chapter 143 of the General Statutes.
The Board of Governors of The University of North Carolina shall provide quarterly reports to the Joint Legislative Commission on Governmental Operations, the chairs of the Senate and House of Representatives Appropriations Committees, and the Fiscal Research Division on the expenditure of moneys from the University Improvement Bonds Fund.
(b)	Community College Bonds.  The proceeds of Community College Bonds and notes shall be used for the purpose of making grants to community or technical colleges, as defined in Chapter 115D of the General Statutes, the proceeds of the grants to be allocated and expended for paying the cost of Community College capital improvements, including, without limitation, construction and renovation of classroom buildings, laboratory buildings, research facilities, libraries, physical education facilities, continuing education centers, student cafeteria and activity facilities including sports facilities, administrative office buildings, and land acquisition.  The buildings constructed using the proceeds of the bonds shall comply with the energy design guidelines developed by the Energy Division of the Department of Commerce.
Any additional moneys which may be received by means of a grant or grants from the United States of America or any agency or department thereof or from any other source to aid in financing the cost of any Community College grants authorized by this act may be placed by the State Treasurer in the Community College Bonds Fund or in a separate account or fund and shall be disbursed, to the extent permitted by the terms of the grant or grants, without regard to any limitations imposed by this act.
The proceeds of Community College Bonds and notes may be used with any other moneys made available by the General Assembly for the making of Community College grants, including the proceeds of any other State bond issues, whether heretofore made available or which may be made available at the session of the General Assembly at which this act is ratified or any subsequent sessions.  The proceeds of Community College Bonds and notes shall be expended and disbursed under the direction and supervision of the Director of the Budget.  The funds provided by this act for Community College improvements shall be disbursed for the purposes provided in this act upon warrants drawn on the State Treasurer by the State Controller, which warrants shall not be drawn until requisition has been approved by the Director of the Budget and which requisition shall be approved only after full compliance with the Executive Budget Act, Article 1 of Chapter 143 of the General Statutes.
The State Board of Community Colleges shall provide quarterly reports to the Joint Legislative Commission on Governmental Operations, the chairs of the Senate and House of Representatives Appropriations Committees, and the Fiscal Research Division on the expenditure of moneys from the Community College Bonds Fund.
(c)	Public School Buildings Bonds.  The proceeds of Public School Buildings Bonds and notes shall be used as provided in this act for paying the cost of improvements to existing public school facilities, the construction of new facilities, including the planning, construction, reconstruction, enlargement, improvement, repair, or renovation of public school buildings, the purchase of land necessary for immediate construction of school buildings and other related capital outlay projects constituting facilities for individual schools that are used for instructional and related purposes, but not including centralized administration, maintenance, or other facilities not directly related to instruction.  The buildings constructed using the proceeds of the bonds shall comply with the energy design guidelines developed by the Energy Division of the Department of Commerce.
The bond proceeds in the Public School Buildings Bonds Fund shall be allocated to the counties on a per average daily membership basis according to the average daily membership for the fiscal year ending June 30, 1992, as determined and certified by the State Board of Education.  Each county's allocated bond proceeds will be distributed as a combination of a loan and a grant.  The ratio of grant to loan will be determined by a county's ability to pay according to the following chart:
	Ability to Pay	Grant : Loan Ratio
	Higher	1:2
	Average	1:1
	Lower	2:1
The Superintendent of Public Instruction shall rank the counties in order of their ability to pay as determined by Section 201.2 of Chapter 689 of the 1991 Session Laws, as amended by Section 47.3 of Chapter 761 of the 1991 Session Laws and by Section 67 of Chapter 900 of the 1991 Session Laws.  The Superintendent shall assign the counties, in ranking order, to the three categories.  The categories, when taken as a whole, must result in approximately three-fifths, but no less than three-fifths, of the bond proceeds being distributed in the form of a loan.
The Superintendent shall administer the making of these loans.  The form of the loans and the details thereof including, without limitation, the maturity, interest rate, and amortization schedule, shall be determined, from time to time, by the State Treasurer.
Repayments of the loans shall be credited to the General Fund and may be used to pay, directly or indirectly, debt service on the bonds and notes issued.  Repayments shall be initially placed into any fund or account as may be determined by the State Treasurer for the purpose of determining compliance with applicable requirements of the federal tax law and shall be expended and disbursed therefrom under the direction and supervision of the Director of the Budget.
Any additional moneys which may be received by means of a grant or grants from the United States of America or any agency or department thereof or from any other source to aid in financing the cost of public school buildings may be placed by the State Treasurer in the Public School Buildings Bonds Fund or in a separate account or fund and shall be disbursed, to the extent permitted by the terms of the grant or grants, without regard to any limitations imposed by this act.
The proceeds of Public School Buildings Bonds and notes may be used with any other moneys made available by the General Assembly to aid in financing the cost of public school buildings, including the proceeds of any other State bond issues, whether heretofore made available or which may be made available at the session of the General Assembly at which this act is ratified or any subsequent sessions.  The proceeds of Public School Buildings Bonds and notes shall be expended and disbursed under the direction and supervision of the Director of the Budget.  The funds provided by this act to aid in financing the cost of public school buildings shall be disbursed for the purposes provided in this act upon warrants drawn on the State Treasurer by the State Controller, which warrants shall not be drawn until requisition has been approved by the Director of the Budget and which requisition shall be approved only after full compliance with the Executive Budget Act, Article 1 of Chapter 143 of the General Statutes.
The Office of State Budget and Management and the Department of Public Education shall provide quarterly reports to the Joint Legislative Commission on Governmental Operations, the chairs of the Senate and House of Representatives Appropriations Committees, and the Fiscal Research Division on the expenditure of moneys from the Public School Buildings Bonds Fund.
(d) Clean Water Bonds.  The proceeds of Clean Water Bonds and notes shall be used for the purpose of making loans and grants to local governments as follows:
(1)	The proceeds of twenty-five million dollars ($25,000,000) of Clean Water Bonds shall be used and allocated for the same purposes for which funds in the Clean Water Revolving Loan and Grant Fund may be used including, without limitation, to provide funds to be used to make revolving loans and grants to local government units.  The revolving loans and grants shall be made for the purpose of paying the cost of water supply systems, wastewater collection systems, and wastewater treatment works.  The first priority for use of proceeds shall be to provide the State funds necessary to match the full amount of federal wastewater assistance funds deposited into the Water Pollution Control Revolving Fund that are available to the State from year to year, unless the General Assembly has provided other funds for that purpose, in which event this priority shall cease to exist to the extent of the availability of those other funds.  The proceeds may be (i) transferred directly to the Clean Water Revolving Loan and Grant Fund to make revolving loans or grants, (ii) used to make revolving loans or grants directly to the appropriate local government qualifying for a revolving loan or grant from the Clean Water Revolving Loan and Grant Fund, (iii) used for any combination of (i) and (ii), or (iv) used in such other manner as shall effectuate the purposes of this act.  Although public necessity and the criteria established by Chapter 159G of the General Statutes shall be the primary consideration in granting and loaning funds, great emphasis shall be placed on the creation of efficient systems of regional wastewater disposal and regional water supply, and on the willingness and ability of local government units to meet their responsibilities through sound fiscal policies and plans and efficient operation and management.
(2)	The proceeds of one hundred twenty-five million dollars ($125,000,000) of clean water bonds shall be used and allocated for loans to local government units for the same purposes for which funds in the Clean Water Revolving Loan and Grant Fund may be used and for water conservation projects.  The loans shall be made for the purpose of paying the cost of water supply systems, wastewater collection systems, and wastewater treatment works and for the purpose of paying the cost of water conservation projects.   The proceeds of bonds and notes shall be allocated between wastewater and water supply purposes in the same percentages as established in G.S. 159G-4, except that no allocation shall be made as a State match of any federal funds deposited into the Water Pollution Control Revolving Fund.
		The proceeds may be used to make loans directly to local government units qualifying for a loan from the Clean Water Revolving Loan and Grant Fund or used in such other manner as shall effectuate the purposes of this act.  To qualify for a loan from the Clean Water Bonds Fund for the purpose of paying the cost of water supply systems or water conservation projects, a local government must have a water supply facility plan approved by the Department of Environment, Health, and Natural Resources.  A water supply plan submitted by a local government to the Department under G.S. 143-355(l) will be sufficient to meet this requirement.  To qualify for a loan from the Clean Water Bonds Fund for the purpose of paying the cost of wastewater collection systems or wastewater treatment works, a local government must have a wastewater facility plan approved by the Department of Environment, Health, and Natural Resources.  A wastewater facility plan must project future wastewater treatment needs, must present a long range plan to meet those needs, and must include plans for system operations and maintenance of the facilities being built with the bond proceeds.
		The Department of Environment, Health, and Natural Resources shall administer the making of these loans.  The form of the loans and the details thereof including, without limitation, the maturity, interest rate, and amortization schedule, shall be determined, from time to time, by the State Treasurer.
		Repayments of the loans may be used to pay, directly or indirectly, debt service on the bonds and notes issued.  Repayments shall be initially placed into such fund or account as may be determined by the State Treasurer for the purpose of determining compliance with applicable requirements of the federal tax law and shall be expended and disbursed therefrom under the direction and supervision of the Director of the Budget. 
Any additional moneys which may be received by means of a grant or grants from the United States of America or any agency or department thereof or from any other source for deposit to the State Clean Water Bond Fund may be placed in the State Clean Water Bond Fund or in a separate account or fund and shall be disbursed, to the extent permitted by the terms of the grant or grants, without regard to any limitations imposed by this act.
The proceeds of bonds and notes may be used with any other moneys made available by the General Assembly for making grants and loans authorized by this act, including the proceeds of any other State bond issues, whether heretofore made available or which may be made available at the session of the General Assembly at which this act is ratified or any subsequent sessions.  The proceeds of bonds and notes shall be expended and disbursed under the direction and supervision of the Director of the Budget.  The funds provided by this act shall be disbursed for the purposes provided in this act upon warrants drawn on the State Treasurer by the State Controller, which warrants shall not be drawn until requisition has been approved by the Director of the Budget and which requisition shall be approved only after full compliance with the Executive Budget Act, Article 1 of Chapter 143 of the General Statutes.
(e) Solid Waste Infrastructure Bonds.  The proceeds of Solid Waste Infrastructure Bonds and notes shall be used for the purpose of making loans and grants to local government units as follows:
(1)	The proceeds of twenty-five million dollars ($25,000,000) of the bonds and notes shall be used and allocated for grants to groups of two or more local government units in different counties for the purpose of developing a regional solid waste management facility or plan.  The bond proceeds will be distributed on an equal matching-fund basis.  The North Carolina Solid Waste Management Capital Projects Financing Agency shall administer the grant program.  The grants shall be made based on public necessity, the criteria established by Chapter 159I of the General Statutes, and the willingness and ability of local government units to meet their responsibilities through sound fiscal policies and plans and efficient operation and management.
(2)	The proceeds of seventy-five million dollars ($75,000,000) of the bonds and notes shall be used and allocated for loans to local government units for the same purposes for which funds in the Solid Waste Management Loan Fund created in Chapter 159I of the General Statutes may be used.  The purposes for which moneys in the Solid Waste Management Loan Fund created in Chapter 159I of the General Statutes may be used are to assist local governments in meeting:
a.	The increased costs of constructing new landfills that meet current standards for the protection of the environment.
b.	The cost of constructing a local or regional incinerator that would serve to reduce the volume of waste to be landfilled.
c.	The costs of implementing alternative programs to reduce the amount of waste generated, to decrease the volume of waste that is generated, or to recover or to recycle that part of the waste stream that can be recovered or used for another purpose of paying the cost of solid waste management facilities.
	The proceeds may be used to make loans directly to local government units qualifying for a loan from the Solid Waste Management Loan Fund or used in such other manner as shall effectuate the purposes of this act.  The Department of Environment, Health, and Natural Resources shall administer the making of these loans.  The form of the loans and the details thereof including, without limitation, the maturity, interest rate, and amortization schedule, shall be determined, from time to time, by the State Treasurer.  Repayments of the loans may be used to pay, directly or indirectly, debt service on the bonds and notes issued.  Repayments shall be initially placed into such fund or account as may be determined by the State Treasurer for the purpose of determining compliance with applicable requirements of the federal tax law and shall be expended and disbursed therefrom under the direction and supervision of the Director of the Budget.  
Any additional moneys which may be received by means of a grant or grants from the United States of America or any agency or department thereof or from any other source for deposit to the State Solid Waste Infrastructure Bond Fund may be placed in the State Solid Waste Infrastructure Bond Fund or in a separate account or fund and shall be disbursed, to the extent permitted by the terms of the grant or grants, without regard to any limitations imposed by this act.
The proceeds of bonds and notes may be used with any other moneys made available by the General Assembly for making loans authorized by this act, including the proceeds of any other State bond issues, whether heretofore made available or which may be made available at the session of the General Assembly at which this act is ratified or any subsequent sessions.  The proceeds of bonds and notes shall be expended and disbursed under the direction and supervision of the Director of the Budget.  The funds provided by this act shall be disbursed for the purposes provided in this act upon warrants drawn on the State Treasurer by the State Controller, which warrants shall not be drawn until requisition has been approved by the Director of the Budget and which requisition shall be approved only after full compliance with the Executive Budget Act, Article 1 of Chapter 143 of the General Statutes.
Sec. 6.  Allocation of proceeds. (a) University Improvement Bonds.  The proceeds of University Improvement Bonds and notes, including premium thereon, if any, except the proceeds of bonds the issuance of which has been anticipated by bond anticipation notes or the proceeds of refunding bonds or notes, shall be placed by the State Treasurer in a special fund to be designated "University Improvements Bonds Fund".  Moneys in the University Improvements Bonds Fund shall be used for the purposes set forth in this act.  The proceeds of University Improvements Bonds and notes shall be allocated and expended for paying the cost of university capital improvements, to the extent and as provided in this act and subject to change as provided in this act, as follows:

Constituent Institution or Board of Governors
Projected Capital Improvement	Allocation
Appalachian State University
Academic Support Services Building	$  8,794,900
Science/Mathematics Complex, Phase I	15,000,000

East Carolina University
Addition to Joyner Library	28,900,000
Land	5,000,000

Elizabeth City State University
Fine Arts and Mass Communications Building	6,432,600

Fayetteville State University
Fine Arts Building	9,479,600

North Carolina A & T State University
School of Technology Classroom/Laboratory Building	7,961,900
Renovation of Bluford Library Building	5,051,400

North Carolina Central University
Conversion of Women's Gymnasium in Support of
  Academic Programs	1,970,900
Chidley Hall Complex	9,018,300

North Carolina School of the Arts
School of Filmmaking	6,999,200

North Carolina State University at Raleigh
Engineering Graduate Research Center	34,918,200
Agricultural Communications Building	4,484,900
Agricultural Programs - Laboratory Animal Facilities	4,484,100

Pembroke State University
New Administrative Office Building	5,723,300
Repairs and Renovations to Business Administration Building	422,700

The University of North Carolina at Asheville
Ramsey Library (Remodeling)	3,974,400
Physical Education Building (Health Promotion)	5,475,600
The North Carolina Arboretum	2,500,000

The University of North Carolina at Chapel Hill
New Building, School of Business Administration	13,490,900
Addition to Lineberger Cancer Research Center	8,119,900
Carolina Living and Learning Center for Autistic Adults, Phase II 1,190,400
Addition to School of Dentistry	8,887,100
Area Health Education Centers - Construction Grants	3,370,800

The University of North Carolina at Charlotte
Classroom and Academic Support Facility	22,610,400

The University of North Carolina at Greensboro
New Music Building	23,357,000

The University of North Carolina at Wilmington
Physical Sciences Building and Renovation of DeLoach Hall	18,522,900
Construct West Wing of Bear Hall and
  Renovate West End of Bear Hall	992,050

Western Carolina University
Completion of Belk Building and Asbestos Removal	3,280,200
Renovate Moore Hall, Phase II	2,043,900
Renovate Camp Lab School	1,896,500
Renovate Reid Gym	2,379,400

Winston-Salem State University
Student Services/Cafeteria/Student Union Complex	6,073,350
Renovations to O'Kelly Library	1,119,500

North Carolina School of Science and Mathematics
Educational Technologies Center and Auditorium	8,073,700

UNC Center for Public Television
Improvements to Facilities	     6,000,000
TOTAL	$298,000,000

Projected allocations set forth above may be adjusted to reflect the availability of other funds.
The Director of the Budget is empowered, when the Director of the Budget determines it is in the best interest of the State and The University of North Carolina to do so, and if the cost of a particular project is less than the projected allocation, to use the excess funds to increase the size of that project or increase the size of any other project itemized in this section, or to increase the amount allocated to a particular institution or the Board of Governors within the aggregate amount of funds available under this section.  In addition, the particular capital improvements and the amount of the projected allocation therefor set forth above may be changed from time to time as the General Assembly may decide.  The provisions of G.S. 116-9 with respect to appropriations to the Board of Governors of The University of North Carolina shall not apply to proceeds of University Improvements Bonds and notes issued pursuant to the provisions of this act.
Allocations to the costs of a capital improvement or undertaking in each case may include allocations to pay the costs set forth in Section 3(4)c., d., and e. of this act in connection with the issuance of bonds for that capital improvement or undertaking.
(b)	Community College Bonds.  The proceeds of Community College Bonds and notes, including premium thereon, if any, except the proceeds of bonds the issuance of which has been anticipated by bond anticipation notes or the proceeds of refunding bonds or notes, shall be placed by the State Treasurer in a special fund to be designated "Community College Bonds Fund" and shall be disbursed as provided in this act.   Moneys in the Community College Bonds Fund shall be used for making grants to community or technical colleges, as set forth in this act, the proceeds of the grants to be allocated and expended for paying the cost of community college capital improvements, to the extent and as provided in this act and subject to change as provided in this act, as follows:
	PROJECTED
COLLEGE	CAPITAL IMPROVEMENT	ALLOCATION
Alamance CC	Phase 11B-Science Labs/Classrooms	$3,059,855
Anson CC	Advanced Technology Center	2,576,215
Asheville-
  Buncombe TCC	Classroom/Lab/Office Building	4,936,663
Beaufort County CC	Student Services Center	2,900,000
Bladen TC	Allied Health Care Center	1,015,472
Blue Ridge CC	Allied Health Building	4,842,079
Brunswick CC	Allied Health/Classroom	4,000,000
Caldwell CC & TI	Classroom/Lab Building	5,825,538
Cape Fear CC	Health Sciences Building	6,729,422
Carteret CC	Classroom/Student Center	2,404,124
Catawba Valley CC	Classroom/Lab Building	4,218,275
Central Carolina CC	Classroom Building	1,894,438
Central Piedmont CC	Science Labs Expansion	3,950,000
Cleveland CC	Advanced Technology Building	2,213,022
Coastal Carolina CC	Public Service Technology Bldg.	2,945,108
College of the
Albemarle	Classroom/Administration Bldg.	3,215,924
Craven CC	Academic Studies/Basic Skills Bldg.	2,790,276
Davidson County CC	Advanced Technology Building	3,684,988
Durham TCC	Classroom/Office Building	5,800,000
Edgecombe CC	Class/Lab Addition-Rocky Mount	1,200,000
Fayetteville TCC	Health and Science Facility	7,200,000
Forsyth TCC	Class/Lab/Admin. - East Campus	7,900,000
Gaston College	Work Force Preparedness Center	4,858,423
Guilford TCC	Applied Technology Building	7,740,000
Halifax CC	Literacy Ed/Science Building	2,008,592
Haywood CC	Classroom Building	1,100,000
Isothermal CC	Continuing Education Center	5,267,099
James Sprunt CC	Library/Cont. Ed/Business & Industry	2,600,000
Johnston CC	Allied Health Building	3,000,000
Lenoir CC	Renovations/Additions	2,652,697
Martin CC	Equine Arena	577,553
Mayland CC	Shop/Student Lecture Hall	3,905,613
McDowell TCC	Renov. Bookstore/Amphitheatre/Mezzanine	283,800
Mitchell CC	Renovate Main Building	2,200,000
Montgomery CC	LRC Building	2,592,709
Nash CC	LRC/Student Center	4,225,209
Pamlico CC	Multi-Purpose Class/Office Bldg.	1,177,503
Piedmont CC	Adult Learning Center/Caswell Cty.	1,300,000
Pitt CC	Student Services Building	4,288,875
Randolph CC	Photography Studio	985,072
Richmond CC	Fine Arts Ctr/Auditorium	2,251,414
Roanoke-Chowan CC	Classroom/Student Support Center	2,549,087
Robeson CC	Emergency Training Grounds	855,387
Rockingham CC	Multi-Purpose Building	2,700,000
Rowan-Cabarrus CC	Engineering Building	3,684,011
Sampson CC	Multi-Purpose Building	2,500,000
Sandhills CC	Cont. Ed. Center/Classrooms	5,100,000
Southeastern CC	Nursing/Allied Health Building	1,309,400
Southwestern CC	Classroom Renov./Expanded Parking	700,000
Stanly CC	Learning Resource Center	2,341,210
Surry CC	Health/Day Care/Library Building	4,054,417
Tri-County CC	Student Services Ctr./Classroom Bldg.	1,123,010
Vance-Granville CC	Allied Health/Day Care/Classroom Bldg.	2,127,400
Wake TCC	Student Education Bldg.	10,619,952
Wayne CC	Classroom/Laboratory Building	3,900,000
Western
Piedmont CC	Class/Office Bldg. (Bus. Tech.)	3,420,168
Wilkes CC	LRC-Student Development	4,700,000
Wilson TCC	Multi-Purpose Building	1,000,000
     TOTAL	$191,000,000

The particular capital improvements and the amount of the allocation for the improvements set out above may be changed from time to time as the General Assembly may decide.  The matching requirements of G.S. 115D-31(a)(1) apply to the proceeds of Community College Bonds and notes used to make grants to technical or community colleges.
Allocations to the costs of a capital improvement or undertaking in each case may include allocations to pay the costs set forth in Section 3(4)c., d., and e. of this act in connection with the issuance of bonds for that capital improvement or undertaking. 
(c)	Public School Buildings Bonds.  The proceeds of Public School Buildings Bonds and notes, including premium thereon, if any, except the proceeds of bonds the issuance of which has been anticipated by bond anticipation notes or the proceeds of refunding bonds or notes, shall be placed by the State Treasurer in a special fund to be designated "Public School Buildings Bonds Fund" and shall be disbursed as provided in this act.  Moneys in the Public School Buildings Bonds Fund shall be used for the purposes set forth in this act.
(d)	Clean Water Bonds.  The proceeds of Clean Water Bonds and notes, including premium thereon, if any, except the proceeds of bonds the issuance of which has been anticipated by bond anticipation notes or the proceeds of refunding bonds or notes, shall be placed by the State Treasurer in a special fund to be designated "Clean Water Bonds Fund", which may include such appropriate special accounts therein as may be determined by the State Treasurer, and shall be disbursed as provided in this act.  Moneys in the Clean Water Bonds Fund shall be allocated and expended as provided in this act.
(e)  Solid Waste Infrastructure Bonds.  The proceeds of Solid Waste Infrastructure Bonds and notes, including premium thereon, if any, except the proceeds of bonds the issuance of which has been anticipated by bond anticipation notes or the proceeds of refunding bonds or notes, shall be placed by the State Treasurer in a special fund to be designated "Solid Waste Infrastructure Bonds Fund", which may include such appropriate special accounts therein as may be determined by the State Treasurer, and shall be disbursed as provided in this act.  Moneys in the Solid Waste Infrastructure Bonds Fund shall be used for the purposes set forth in this act.
Sec. 7.  Election.  The questions of the issuance of the nine hundred eighty-nine million dollars ($989,000,000) North Carolina Education and Environmental Infrastructure Bonds authorized by this act shall be submitted to the qualified voters of the State at an election to be held on the first Tuesday after the first Monday of November 1993.  Any other primary, election, or referendum validly called or scheduled by law at the time the election on the bond questions provided for in this section is held may be held as called or scheduled.  Notice of the election on the bond questions shall be given by publication twice in a newspaper or newspapers having general circulation in each county in the State, and the election and the registration of voters therefor shall be held under and in accordance with the general laws of the State.  Absentee ballots shall be authorized in the election.
The State Board of Elections shall reimburse the counties of the State for all necessary expenses incurred in holding the election which are in addition to those which would have otherwise been incurred, the same to be paid out of the Contingency and Emergency Fund or other funds available to the State Board of Elections.
Voting machines, ballots, or both may be used in accordance with rules prescribed by the State Board of Elections.  The bond questions to be used in the voting machines and ballots shall be in substantially the following forms:
"[ ]	FOR the issuance of two hundred ninety-eight million dollars ($298,000,000) State of North Carolina University Improvement Bonds secured by a pledge of the faith and credit and taxing power of the State for paying, with any other available funds, the cost of capital improvements at the constituent or affiliated institutions and the Center for Public Television of The University of North Carolina.
[ ]	AGAINST the issuance of two hundred ninety-eight million dollars ($298,000,000) State of North Carolina University Improvement Bonds secured by a pledge of the faith and credit and taxing power of the State for paying, with any other available funds, the cost of capital improvements at the constituent or affiliated institutions and the Center for Public Television of The University of North Carolina.
[ ]	FOR the issuance of one hundred ninety-one million dollars ($191,000,000) State of North Carolina Community College Bonds secured by a pledge of the faith and credit and taxing power of the State for making grants to community and technical colleges to pay, together with other available funds, the cost of capital improvements.
[ ]	AGAINST the issuance of one hundred ninety-one million dollars ($191,000,000) State of North Carolina Community College Bonds secured by a pledge of the faith and credit and taxing power of the State for making grants to community and technical colleges to pay, together with other available funds, the cost of capital improvements.
[ ]	FOR the issuance of two hundred fifty million dollars ($250,000,000) State of North Carolina Public School Buildings Bonds constituting general obligation bonds of the State secured by a pledge of the faith and credit and taxing power of the State for the purpose of providing funds, with any other available funds, to make grants and loans to assist local government units in paying the cost of providing public school buildings.
[ ]	AGAINST the issuance of two hundred fifty million dollars ($250,000,000) State of North Carolina Public School Buildings Bonds constituting general obligation bonds of the State secured by a pledge of the faith and credit and taxing power of the State for the purpose of providing funds, with any other available funds, to make grants and loans to assist local government units in paying the cost of providing public school buildings.
[ ]	FOR the issuance of one hundred fifty million dollars ($150,000,000) State of North Carolina Clean Water Bonds constituting general obligation bonds of the State secured by a pledge of the faith and credit and taxing power of the State for the purpose of providing funds, with any other available funds, to make loans, revolving loans, and grants to assist local government units in paying the cost of clean water projects.
[ ]	AGAINST the issuance of one hundred fifty million dollars ($150,000,000) State of North Carolina Clean Water Bonds constituting general obligation bonds of the State secured by a pledge of the faith and credit and taxing power of the State for the purpose of providing funds, with any other available funds, to make loans, revolving loans, and grants to assist local government units in paying the cost of clean water projects.
[ ]	FOR the issuance of one hundred million dollars ($100,000,000) State of North Carolina Solid Waste Infrastructure Bonds secured by a pledge of the faith and credit and taxing power of the State for providing, with any other available funds, loans and grants to units of local government to finance the capital costs of solid waste management programs.
[ ]	AGAINST the issuance of one hundred million dollars ($100,000,000) State of North Carolina Solid Waste Infrastructure Bonds secured by a pledge of the faith and credit and taxing power of the State for providing, with any other available funds, loans and grants to units of local government to finance the capital costs of solid waste management programs."
If a majority of those voting on a bond question in the election vote in favor of the issuance of the bonds described in the question, those bonds may be issued as provided in this act.  If a majority of those voting on a bond question in the election vote against the issuance of the bonds described in the question, those bonds shall not be issued.
The results of the election shall be canvassed and declared as provided by law for elections for State officers; the results of the election shall be certified by the State Board of Elections to the Secretary of State, in the manner and at the time provided by the general election laws of the State.
Sec. 8.  Issuance of bonds and notes.  (a)	Terms and conditions.  Bonds or notes may bear such date or dates, may be serial or term bonds or notes, or any combination thereof, may mature in such amounts and at such time or times, not exceeding 40 years from their date or dates, may be payable at such place or places, either within or without the United States of America, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts, may bear interest at such rate or rates, which may vary from time to time, and may be made redeemable before maturity, at the option of the State or otherwise as may be provided by the State, at such price or prices, including a price less than the face amount of the bonds or notes, and under such terms and conditions, all as may be determined by the State Treasurer, by and with the consent of the Council of State.
(b)	Signatures; form and denomination; registration.  Bonds or notes may be issued as certificated or uncertificated obligations.  If issued as certificated obligations, bonds or notes shall be signed on behalf of the State by the Governor or shall bear his facsimile signature, shall be signed by the State Treasurer or shall bear his facsimile signature, and shall bear the Great Seal of the State or a facsimile thereof shall be impressed or imprinted thereon.  If bonds or notes bear the facsimile signatures of the Governor and the State Treasurer, the bonds or notes shall also bear a manual signature which may be that of a bond registrar, trustee, paying agent, or designated assistant of the State Treasurer.  Should any officer whose signature or facsimile signature appears on bonds or notes cease to be such officer before the delivery of the bonds or notes, the signature or facsimile signature shall nevertheless have the same validity for all purposes as if the officer had remained in office until delivery and bonds or notes may bear the facsimile signatures of persons who at the actual time of the execution of the bonds or notes shall be the proper officers to sign any bond or note although at the date of the bond or note such persons may not have been such officers.  The form and denomination of bonds or notes, including the provisions with respect to registration of the bonds or notes and any system for their registration, shall be as the State Treasurer may determine in conformity with this act; provided, however, that nothing in this act shall prohibit the State Treasurer from proceeding, with respect to the issuance and form of the bonds or notes, under the provisions of Chapter 159E of the General Statutes, the Registered Public Obligations Act, as well as under this act.
(c)	Manner of sale; expenses.  Subject to determination by the Council of State as to the manner in which bonds or notes shall be offered for sale, whether at public or private sale, whether within or without the United States of America and whether by publishing notices in certain newspapers and financial journals, mailing notices, inviting bids by correspondence, negotiating contracts of purchase or otherwise, the State Treasurer is authorized to sell bonds or notes at one time or from time to time at such rate or rates of interest, which may vary from time to time, and at such price or prices, including a price less than the face amount of the bonds or the notes, as the State Treasurer may determine.  All expenses incurred in preparation, sale, and issuance of bonds or notes shall be paid by the State Treasurer from the proceeds of bonds or notes or other available moneys.
(d)	Notes; repayment.
(1)	By and with the consent of the Council of State, the State Treasurer is hereby authorized to borrow money and to execute and issue notes of the State for the same, but only in the following circumstances and under the following conditions:
a.	For anticipating the sale of bonds to the issuance of which the Council of State shall have given consent, if the State Treasurer shall deem it advisable to postpone the issuance of the bonds;
b.	For the payment of interest on or any installment of principal of any bonds then outstanding, if there shall not be sufficient funds in the State treasury with which to pay the interest or installment of principal as they respectively become due;
c.	For the renewal of any loan evidenced by notes herein authorized;
d.	For the purposes authorized in this act; and
e.	For refunding bonds or notes as herein authorized.
(2)	Funds derived from the sale of bonds or notes may be used in the payment of any bond anticipation notes issued under this act.  Funds provided by the General Assembly for the payment of interest on or principal of bonds shall be used in paying the interest on or principal of any notes and any renewals thereof, the proceeds of which shall have been used in paying interest on or principal of the bonds.
(e)  Refunding bonds and notes.  By and with the consent of the Council of State, the State Treasurer is authorized to issue and sell refunding bonds and notes pursuant to the provisions of the State Refunding Bond Act for the purpose of refunding bonds or notes issued pursuant to this act.  The refunding bonds and notes may be combined with any other issues of State bonds and notes similarly secured.
(f)  Tax exemption.  Bonds and notes shall be exempt from all State, county, and municipal taxation or assessment, direct or indirect, general or special, whether imposed for the purpose of general revenue or otherwise, excluding inheritance and gift taxes.  The gain from the transfer of bonds and notes shall be exempt from State income taxation to the same extent as gain from the transfer of federal obligations.  The interest on bonds and notes shall not be subject to taxation as to income, to the same extent as the interest on federal obligations. 
(g)  Investment eligibility.  Bonds and notes are hereby made securities in which all public officers, agencies, and public bodies of the State and its political subdivisions, all insurance companies, trust companies, investment companies, banks, savings banks, savings and loan associations, credit unions, pension or retirement funds, other financial institutions engaged in business in the State, executors, administrators, trustees, and other fiduciaries may properly and legally invest funds, including capital in their control or belonging to them.  Bonds and notes are hereby made securities which may properly and legally be deposited with and received by any officer or agency of the State or political subdivision of the State for any purpose for which the deposit of bonds, notes, or obligations of the State or any political subdivision is now or may hereafter be authorized by law.
(h)  Faith and credit.  The faith and credit and taxing power of the State are hereby pledged for the payment of the principal of and the interest on bonds and notes.
Sec. 9.  Variable interest rates.  In fixing the details of bonds and notes, the State Treasurer may provide that any of the bonds or notes may:
(1)	Be made payable from time to time on demand or tender for purchase by the owner thereof provided a credit facility supports the bonds or notes, unless the State Treasurer specifically determines that a credit facility is not required upon a finding and determination by the State Treasurer that the absence of a credit facility will not materially or adversely affect the financial position of the State and the marketing of the bonds or notes at a reasonable interest cost to the State;
(2)	Be additionally supported by a credit facility;
(3)	Be made subject to redemption or a mandatory tender for purchase prior to maturity;
(4)	Bear interest at a rate or rates that may vary for such period or periods of time, all as may be provided in the proceedings providing for the issuance of the bonds or notes, including, without limitation, such variations as may be permitted pursuant to a par formula; and
(5)	Be made the subject of a remarketing agreement whereby an attempt is made to remarket bonds or notes to new purchasers prior to their presentment for payment to the provider of the credit facility or to the State.
If the aggregate principal amount repayable by the State under a credit facility is in excess of the aggregate principal amount of bonds or notes secured by the credit facility, whether as a result of the inclusion in the credit facility of a provision for the payment of interest for a limited period of time or the payment of a redemption premium or for any other reason, then the amount of authorized but unissued bonds or notes during the term of such credit facility shall not be less than the amount of such excess, unless the payment of such excess is otherwise provided for by agreement of the State executed by the State Treasurer.
Sec. 10.  Special Provisions Governing Loans.
(a)	Definition.  "Receiving agency" means the agency, charged with responsibility by this act, to receive applications for loans in their respective categories of projects.
(b)	Loan Fund.
(1)	There is established in the Department of State Treasurer a fund to be known as the Public Facility and Infrastructure Loan Fund.  The various accounts of the Fund shall be administered as required and provided for in this act.  The funds in the various accounts may be invested in the same manners permitted for investments of funds belonging to the State or held in the State treasury.  Interest earnings derived from these investments shall be credited to the respective accounts from which funds were used to make the loans.
(2)	Distribution of funds.  All appropriated or bond funds accruing to each account of the Public Facility and Infrastructure Loan Fund, other than funds set aside for administrative expenses, shall be used for loans for the purposes provided in this act.
(3)	The maximum principal amount of a loan may be one hundred percent (100%) of the cost of any eligible project.  
(4)	The State Treasurer shall be responsible for investing and distributing all funds appropriated or accruing to the Public Facility and Infrastructure Loan Fund.  The State Treasurer shall arrange for the appropriated funds to be transferred from the appropriate accounts to a local government unit to provide funds for one or more loan programs or shall invest the funds as authorized by this act with the interest on and the principal of the investments to be transferred to the local government unit to provide funds for one or more loans.
(c)	Application for Loans; Hearings.
(1)	Eligibility/Initial Hearing.
a.	Prior to filing an application for a loan, a unit of local government shall hold a public hearing.  A notice of the public hearing shall be published once at least 10 days before the date fixed for the hearing.
b.	All applications for loans shall be filed with the designated receiving agency.  If the application is denied, the application shall then be considered at the next available period.  All applications approved by the receiving agency shall be filed with the Local Government Commission.  Each applicant shall furnish information in addition or supplemental to the information contained in its application upon request.
c.	Local Loans.  No unit of local government shall be eligible for a loan unless it demonstrates to the satisfaction of the receiving agency that:
1.	The applicant is a local government unit or a consortium of local government units;
2.	The applicant has the financial capacity to pay the principal of and interest on its proposed obligations and loans, as evidenced by the approval of the Local Government Commission;
3.	The applicant has substantially complied or will substantially comply with all applicable laws, rules, regulations, and ordinances, whether federal, State, or local; and
4.	The applicant has agreed by official resolution to adopt and place into effect on or before completion a schedule of fees and charges and other sources of revenue which will provide adequate funds for proper operation, maintenance, and administration of the project and repayment of all principal and interest on loans.
(2)	Assessment.  Every applicant shall file with its application an assessment of the impact the project for which the funds are sought will have upon meeting the facility needs of the area within which the project is to be located.
(3)	Hearing by Receiving Agency.  A public hearing may be held by the receiving agency or the Local Government Commission at any time on any application.  Public hearings may also be held by the receiving agency upon written request from any citizen or taxpayer who is a resident of the county or counties in which the project is to be located if it appears that the public interest will be served by the hearing.  The written request will set forth each objection to the proposed project or other reason for requesting a hearing on the application and shall contain the name and address of the persons submitting it.  The receiving agency may consider all written objections to the proposed project and other statements along with the application including any significant considerations on facility needs and shall determine if the public interest will be served by a hearing.  The determination by the receiving agency will be conclusive that all written requests for a hearing shall be retained as a permanent part of the records pertaining to the application.
(4)	To be eligible to receive the loans provided for in this act, local government units shall arrange to borrow the amounts necessary pursuant to rules adopted by the Local Government Commission.
(5)	A petition, demanding that the question of whether to enter into a loan agreement with the State under this act be submitted to voters, may be filed with the clerk of the local government unit applying for the loan within 15 days after the public hearing required by the local government unit.  The petition's sufficiency shall be determined and a referendum, if any, shall be conducted, according to the standards, procedures, and limitations set out in G.S. 159-60 through G.S. 159-62.
(d)	Priorities.
(1)	Determination.  Determination of priorities to be assigned each eligible application shall be made semiannually by each receiving agency during each fiscal year.  Every eligible application shall be considered by the receiving agency with every other application eligible during this same priority period.
(2)	Priority Factors.  All applications for loans under this act shall be assigned a priority by the receiving agency.  The receiving agency shall establish by rule the priority factors criteria.
(3)	Assignment of Priority.  A written statement relative to each priority assigned shall be prepared by the receiving agency and shall be attached to the receiving application.  The priority assigned shall be conclusive.
(4)	Failure to Qualify.  If an application does not qualify for a loan as of the prior period in which the application was eligible for consideration by reason of the priority assigned, the application shall be considered during the next succeeding priority period upon request of the applicant.  If the application again fails to qualify for a loan during the second priority period by reason of the priority assigned, the application shall receive no further consideration.  An applicant may file a new application at any time and may amend any pending application to include additional data or information.
(5)	Withdrawal of Commitment.  Failure of an applicant within one year after the date of acceptance of the loan to arrange for necessary financing of the proposed project or award of the contract of the construction of the proposed project shall constitute sufficient cause for withdrawal of the commitment.  Prior to withdrawal of a commitment, the receiving agency shall give due consideration to any extenuating circumstances presented by the applicant as reasons for failure to arrange necessary financing or to award a contract, and the commitment may be extended for an additional period of time if, in the judgment of the receiving agency, the extension is justified.
(e)  Disbursement.
(1)	No funds shall be disbursed until the receiving agency gives a certificate of eligibility to the effect that the applicant meets all eligibility criteria and that all procedural requirements of this act have been met.
(2)	In the event that the loan payments are to be made in installments, no payments shall be disbursed until the receiving agency submits a request for disbursement.
(f)  Failure to Pay Loans.  In the event repayment of a loan is not received or is in apparent likelihood of not being received in a timely manner from a local government unit, as determined conclusively by the State Treasurer, then, notwithstanding any other provision of law, upon determination by the State Treasurer of the default, any distributions which might otherwise be made to a unit of local government from any funds of the State shall be withheld and used, as required, in payment of the loan until notice from the State Treasurer that the local government unit is no longer in default.
In the event repayment of a loan is not received or is in apparent likelihood of not being received in a timely manner from the State agency which originally received the loan, as determined conclusively by the State Treasurer, then, notwithstanding any other provision of law, upon determination by the State Treasurer as to the default or likely default, the State Treasurer shall notify the Director of the Budget to take immediate steps to make available other funds and distributions that might otherwise be made to the State agency that originally received the loan for repayment of the loan.  These funds may include appropriations and unrestricted revenues statutorily designated for the agency.
(g)  Intercept.
(1)	Before the issuance of any bonds or the issuance of any other obligations entered into by a local government, the governing board of the local government must include within the resolution authorizing the obligations, authorization and direction to the State Treasurer that in the event the local government fails to pay when due any amount owed pursuant to the bond or other obligation, the State Treasurer be authorized to notify the Secretary of Revenue and the State Controller to withhold from the unit of local government sufficient moneys to repay the obligation from State revenues that local government may thereafter receive from the State, and for which distribution is not directed by the Constitution or by statute to be otherwise withheld or used and which have not been specifically designated by the unit as a source of payment of revenue bonds or special obligation bonds.  The resolution may also authorize the State Treasurer to notify the Secretary of Revenue or the State Controller to apply the withheld funds as necessary to make all payments due on the bonds or other obligations until all delinquent payments have been paid.  The unit of local government shall provide the State Treasurer with (i) a copy of the resolution, (ii) the payment schedule for the bonds or other obligations, and (iii) the name and address of the custodian, trustee, or paying agent for the bonds or obligations to whom any payment should be made.
(2)	Whenever the custodian, trustee, or paying agent for the bonds or obligations subsequently notifies the State Treasurer in writing that the unit of local government has failed to effect a payment when due, the State Treasurer shall immediately notify the Secretary of Revenue and the State Controller.
(3)	When the Secretary of Revenue or the State Controller receives notice from the State Treasurer and the Secretary of Revenue or the State Controller verifies the information with the State Treasurer, the Secretary of Revenue or the State Controller shall immediately withhold all further payment to the unit which issued the bonds or entered into the obligations of all State funds or any part thereof allocated or attributed to the unit for distributions or payments to the unit, except for funds required by the Constitution or by statute to be otherwise withheld or used or which have been specifically designated by the unit as a source of payment of revenue bonds or special obligation bonds.
(4)	From the funds so withheld, the Secretary of Revenue or the State Controller, as appropriate, shall pay to the custodian, trustee, or paying agent for the owners or to the owners of the bonds or obligations, as directed by the State Treasurer, the amount required to pay the principal of or interest on the bonds or obligations so as to avoid or remedy a default with respect thereto by the unit issuing the bonds.  The Secretary of Revenue and the State Controller shall continue so to withhold and pay the funds as necessary, in accordance with advice from the State Treasurer, to avoid or remedy the default.
(5)	The Secretary of Revenue and the State Controller shall report each payment made pursuant to subdivision (4) of this subsection to the board of the unit and to the State Treasurer and shall reduce, by the amount of the payment, the subsequent distributions or payments to which the unit would otherwise be entitled.
(6)	Nothing in this subsection shall be construed to create any obligation on the part of the Secretary of Revenue, the State Controller, or this State to make any payment on behalf of a unit other than from funds payable or distributable to the unit as provided in this Article.
(h)  Inspection.  Inspection of a project for which a loan has been made under this act may be performed by qualified  personnel of the receiving agency or may be performed by qualified engineers registered in this State approved by the receiving agency.  No person shall be approved to perform inspections who is an officer employed by the unit of government to which the loan was made or who is an owner, officer, employer, or agent of a contractor or subcontractor engaged in the construction of the project for which the loan was made.  For the purpose of payment of inspection fees, inspection services shall be included in the term "construction cost" as used in this act.
(i)  Rules.  The Council of State, the State Treasurer, the Local Government Commission, and receiving agencies may adopt, modify, and repeal rules necessary for the administration of their respective duties under this act.  Uniform rules may be jointly adopted where feasible and desirable, and no rule, jointly adopted, may be modified or revoked except upon concurrence of all agencies involved.
(j)  Federal Grants and Loans.  In order to carry out the purposes of this act to secure the greatest possible benefits to the citizens of this State of the funds appropriated, the departments and receiving agencies shall adopt rules and criteria, not inconsistent with provisions of this act, as are necessary and appropriate to conform to regulations for federal grants and loans for any of the purposes set forth in this act.
(k)  Reports.  The receiving agencies shall prepare and file each year on or before July 31 with the Joint Legislative Commission on Governmental Operations a consolidated report for the preceding fiscal year concerning the allocation of loans authorized by this act.  The report shall set forth for the preceding fiscal year itemized and total allocations of loans authorized and unallocated funds on hand in each as of the end of the preceding fiscal year; identification of each loan made by the receiving agency during the preceding fiscal year; the total amount of the loans the sums actually paid during the  preceding fiscal year to each loan and to each loan previously committed but unpaid; the total loans paid during the preceding fiscal year; and summary for all preceding years and the total number of the loans made and the total funds committed to the loans and the total sum actually paid to the loans and grants.
The report shall be signed by each of the chief executive officers of the State agencies preparing the report.
(l)  Local Government Commission.
(1)	Local government units may execute debt instruments payable to the State in order to obtain loans provided for in this act.  Local government units shall pledge as security for such obligations:
a.	The revenues from benefited facilities or systems;
b.	Nonlocally levied tax revenues that are not otherwise pledged as security for other obligations of the local government unit or otherwise restricted by law;
c.	Their faith and credit; or
d.	Any combination of a., b., and c. above.  The faith and credit of such local government units shall not be pledged or be deemed to have been pledged unless the requirements of Article 4 of Chapter 159 of the General Statutes have been met.  The State Treasurer, with the assistance of the Local Government Commission, shall develop and adopt appropriate debt instruments for use under this act.  The Local Government Commission shall develop and adopt appropriate procedures for the delivery of debt instruments to the State without any public bidding therefor.
(2)	The Local Government Commission shall review and approve proposed loans to units of local government under this act under the provisions of Articles 4 and 5 of Chapter 159 of the General Statutes.  Loans under this act shall be outstanding debts for the purposes of Article 10 of Chapter 159 of the General Statutes.
(3)	The State Treasurer shall annually certify to the General Assembly the financial condition of the loan program and identify existing delinquencies.
Sec. 11.  Interpretation of act.  (a)	Additional Method.  The foregoing sections of this act shall be deemed to provide an additional and alternative method for the doing of the things authorized thereby and shall be regarded as supplemental and additional to powers conferred by other laws, and shall not be regarded as in derogation of any powers now existing.
(b)	Statutory References.  References in this act to specific sections or Chapters of the General Statutes or to specific acts are intended to be references to these sections, Chapters, or acts as they may be amended from time to time by the General Assembly.
(c)	Liberal Construction.  This act, being necessary for the health and welfare of the people of the State, shall be liberally construed to effect the purposes thereof.
(d)	Inconsistent Provisions.  Insofar as the provisions of this act are inconsistent with the provisions of any general laws, or parts thereof, the provisions of this act shall be controlling.
(e)  Severability.  If any provision of this act or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of the act which can be given effect without the invalid provision or application, and to this end the provisions of this act are declared to be severable.
Sec. 12.  Effective date.  This act is effective upon ratification.