GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1995

H	1 

HOUSE BILL 771

Short Title:  Public School Building Bond Act of 1995.   	(Public)

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Sponsors: Representatives Barnes; Alexander, Beall, Black, Blue, Bowie, Braswell, W. Brown, Buchanan, Church, Culpepper, Cummings, Cunningham, Dickson, Easterling, Fitch, Fox, Gamble, Grady, Hackney, Hensley, Hightower, Hunt, H. Hunter, Hurley, Lee, Lemmond, Locke, Luebke, McAllister, McCrary, McLaughlin, McMahan, Michaux, G. Miller, Oldham, Ramsey, Redwine, Richardson, Robinson, Rogers, Russell, Sexton, Sutton, Thompson, Tolson, Wainwright, Warner, Wilkins, Womble, Wright, and Yongue.

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Referred to:  Finance.

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April 6, 1995

A BILL TO BE ENTITLED
AN ACT TO AUTHORIZE THE ISSUANCE OF GENERAL OBLIGATION BONDS OF THE STATE, SUBJECT TO A VOTE OF THE QUALIFIED VOTERS OF THE STATE, TO PROVIDE FUNDS FOR GRANTS TO LOCAL SCHOOL ADMINISTRATIVE UNITS FOR PUBLIC SCHOOL BUILDING CAPITAL PROJECTS, IN ORDER TO PROMOTE EQUITY IN LOCAL SCHOOL FACILITIES ACROSS THE STATE AND TO ENABLE LOCAL GOVERNMENTS TO GIVE LOCAL PROPERTY TAX RELIEF.
The General Assembly of North Carolina enacts:
Section 1.  Short title.  This act shall be known and may be cited as the "Public School Building Bond Act of 1995".
Sec. 2.  Purpose.  It is the intent of the General Assembly by this act to provide for the issuance of five hundred million dollars ($500,000,000) general obligation bonds of the State to facilitate the providing of public school buildings by making grants to local school administrative units.
Sec. 3.  Definitions.  As used in this act, unless the context otherwise requires:
(1)	" Bonds" means bonds issued under this act.
(2)	" 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.	Finance charges and interest prior to and during construction and, if deemed advisable by the State Treasurer, for a period not exceeding two years after the estimated date of completion of construction,
e.	The cost of bond insurance, investment contracts, credit enhancement and liquidity facilities, interest-rate swap agreements or other derivative products, financial and legal consultants, and related costs of bond and note issuance, to the extent and as determined by the State Treasurer,
f.	The cost of reimbursing the State for any payments made for any cost described above, and
g.	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., e., f., and g. in connection with the issuance of bonds for the project or undertaking.
(3)	" 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.
(4)	" Notes" means notes issued under this act.
(5)	" 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.
(6)	" State" means the State of North Carolina.
Sec. 4.  Authorization of bonds and notes.  Subject to a favorable vote of a majority of the qualified voters of the State who vote on the question of issuing Public School Building 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 Building 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 five hundred million dollars ($500,000,000) for the purposes authorized in this act.
Sec. 5.  Uses of bond and note proceeds. The proceeds of Public School Building Bonds and notes shall be used for the purpose of making grants to local school administrative units for paying the cost of providing public school buildings 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.
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 public school building capital projects authorized by this act may be placed by the State Treasurer in the Public School Building 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 Building Bonds and notes may be used with any other moneys made available by the General Assembly for public school building capital projects, including the proceeds of any other State bond issues, whether heretofore made available or that 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 Building 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 public school building capital projects 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 Director of the Budget shall provide quarterly reports to the State Board of Education, the General Assembly, and the Fiscal Research Division on the expenditure of moneys from the Public School Building Bonds Fund.
Sec. 6.  Allocation of proceeds.  The proceeds of Public School Building 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 Building Bonds Fund".  Moneys in the Public School Building Bonds Fund shall be used for the purposes set forth in this act.  The proceeds of Public School Building Bonds and notes shall be allocated and expended for paying the cost of public school building capital projects, to the extent and as provided in this act and subject to change as provided in this act, as follows:

	Distribution	Distribution
	Based on	Based on
Local School	Ability	Average Daily
Administrative Unit	To Pay	Membership	Total

010 Alamance County	$          0	$2,457,092	$2,457,092
011 Burlington City	0	1,395,637	1,395,637
020 Alexander County	1,736,320	1,069,595	2,805,915
030 Alleghany County	14,733	318,544	333,277
040 Anson County	2,663,252	947,276	3,610,528
050 Ashe County	985,060	744,839	1,729,899
060 Avery County	0	517,982	517,982
070 Beaufort County	2,537,080	1,665,338	4,202,418
080 Bertie County	3,290,395	855,162	4,145,557
090 Bladen County	2,972,490	1,165,137	4,137,627
100 Brunswick County	0	1,963,531	1,963,531
110 Buncombe County	0	5,206,164	5,206,164
111 Asheville City	0	995,047	995,047
120 Burke County	4,027,432	2,828,119	6,855,551
130 Cabarrus County	0	3,350,599	3,350,599
132 Kannapolis	157,552	863,945	1,021,497
140 Caldwell County	4,171,190	2,508,504	6,679,694
150 Camden County	700,523	270,559	971,082
160 Carteret County	0	1,752,740	1,752,740
170 Caswell County	2,206,252	737,556	2,943,808
180 Catawba County	0	3,016,418	3,016,418
181 Hickory City	0	930,353	930,353
182 Newton City	0	594,886	594,886
190 Chatham County	0	1,396,279	1,396,279
200 Cherokee County	1,719,760	737,128	2,456,888
210 Chowan County	1,192,073	558,469	1,750,542
220 Clay County	437,753	257,920	695,673
230 Cleveland County	1,876,091	1,856,208	3,732,299
231 Kings Mountain City	864,539	855,376	1,719,915
232 Shelby City	709,082	701,567	1,410,649
240 Columbus County	5,123,569	1,645,416	6,768,985
241 Whiteville City	1,876,396	602,598	2,478,994
250 Craven County	5,241,935	3,127,812	8,369,747
260 Cumberland County	13,424,480	10,835,839	24,260,319
270 Currituck County	0	655,939	655,939
280 Dare County	0	878,084	878,084
290 Davidson County	2,177,638	3,737,693	5,915,331
291 Lexington City	375,296	644,157	1,019,453
292 Thomasville City	267,712	459,500	727,212
300 Davie County	0	1,029,322	1,029,322
310 Duplin County	4,609,520	1,772,234	6,381,754
320 Durham County	0	5,993,848	5,993,848
330 Edgecombe County	3,607,370	1,713,324	5,320,694
340 Forsyth County	0	8,539,840	8,539,840
350 Franklin County	4,071,102	1,439,123	5,510,225
360 Gaston County	0	6,248,554	6,248,554
370 Gates County	1,265,068	423,083	1,688,151
380 Graham County	907,413	263,704	1,171,117
390 Granville County	3,831,515	1,512,386	5,343,901
400 Greene County	1,527,302	592,316	2,119,618
410 Guilford County	0	12,088,164	12,088,164
420 Halifax County	4,092,790	1,351,936	5,444,726
421 Roanoke Rapids	2,060,339	680,574	2,740,913
422 Weldon City	804,810	265,846	1,070,656
430 Harnett County	 9,614,755	2,922,804	12,537,559
440 Haywood County	329,655	1,561,228	1,890,883
450 Henderson County	0	2,329,203	2,329,203
460 Hertford County	3,472,710	926,711	4,399,421
470 Hoke County	5,752,475	1,232,616	6,985,091
480 Hyde County	0	169,233	169,233
490 Iredell County	0	3,022,844	3,022,844
491 Mooresville City	0	717,419	717,419
500 Jackson County	0	738,199	738,199
510 Johnston County	6,873,372	3,568,460	10,441,832
520 Jones County	698,703	327,755	1,026,458
530 Lee County	697,798	1,747,384	2,445,182
540 Lenoir County	3,287,542	2,214,168	5,501,710
550 Lincoln County	1,498,755	1,992,879	3,491,634
560 Macon County	0	786,398	786,398
570 Madison County	1,386,397	543,902	1,930,299
580 Martin County	2,381,220	1,067,882	3,449,102
590 McDowell County	2,848,365	1,323,017	4,171,382
600 Mecklenburg County	0	18,917,894	18,917,894
610 Mitchell County	997,373	508,984	1,506,357
620 Montgomery County	2,059,025	900,148	2,959,173
630 Moore County	0	2,177,536	2,177,536
640 Nash County	5,563,850	3,738,336	9,302,186
650 New Hanover County	0	4,488,102	4,488,102
660 Northampton County	2,738,060	817,460	3,555,520
670 Onslow County	14,410,060	4,393,846	18,803,906
680 Orange County	0	1,205,839	1,205,839
681 Chapel Hill-Carrboro	0	1,686,332	1,686,332
690 Pamlico County	893,130	458,429	1,351,559
700 Pasquotank County	3,259,095	1,342,939	4,602,034
710 Pender County	2,301,945	1,192,129	3,494,074
720 Perquimans County	1,283,672	411,086	1,694,758
730 Person County	0	1,178,419	1,178,419
740 Pitt County	4,538,117	4,122,859	8,660,976
750 Polk County	0	453,716	453,716
760 Randolph County	3,800,027	3,253,130	7,053,157
761 Asheboro City	975,405	835,026	1,810,431
770 Richmond County	5,552,952	1,787,658	7,340,610
780 Robeson County	20,167,610	4,930,679	25,098,289
790 Rockingham County	3,905,840	3,032,484	6,938,324
800 Rowan County	2,949,983	3,984,259	6,938,324
810 Rutherford County	3,340,405	2,132,336	5,472,741
820 Sampson County	3,423,359	1,502,746	4,926,105
821 Clinton City	1,246,366	547,115	1,793,481
830 Scotland County	4,452,662	1,540,235	5,992,897
840 Stanly County	2,445,889	1,550,946	3,996,835
841 Albemarle City	718,226	455,430	1,173,656
850 Stokes County	1,223,540	1,418,558	2,642,098
860 Surry County	1,555,653	1,665,981	3,221,634
861 Elkin City	207,034	221,717	428,751
862 Mount Airy City	385,863	413,228	799,091
870 Swain County	1,307,115	354,747	1,661,862
880 Transylvania County	0	844,451	844,451
890 Tyrrell County	328,235	171,804	500,039
900 Union County	2,435,007	3,843,303	6,278,310
910 Vance County	3,273,215	1,543,448	4,816,663
920 Wake County	0	17,224,064	17,224,064
930 Warren County	2,206,617	654,867	2,861,484
940 Washington County	1,782,985	567,038	2,350,023
950 Watauga County	0	1,043,247	1,043,247
960 Wayne County	10,175,367	3,990,900	14,166,267
970 Wilkes County	3,054,177	2,095,276	5,149,453
980 Wilson County	1,999,000	2,567,200	4,566,200
990 Yadkin County	1,833,202	1,111,797	2,944,999
995 Yancey County	      842,360	     510,912	   1,353,272
GRAND TOTAL	$250,000,000	$250,000,000	$500,000,000.

If two or more local school administrative units are consolidated into one unit, the amount allocated above to the units shall be allocated to the merged unit.
Funds disbursed under this act shall be administered and supervised by the Director of the Budget and shall be used only for the purposes provided in this act.  Each school administrative unit shall submit to the Director of the Budget its plans for the expenditure of funds allocated under this act.  After the Director of the Budget determines that a school administrative unit's planned expenditure of part or all of the funds allocated to it is within the purposes provided in this act, the Director shall make the funds to which the plans apply available to the school administrative unit.
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(2)c., d., e., f., and g. of this act in connection with the issuance of bonds for that capital improvement or undertaking.
Sec. 7.  Election.  The question of the issuance of the bonds authorized by this act shall be submitted to the qualified voters of the State at a statewide election to be held November 7, 1995.  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 that are in addition to those that 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     [ ] AGAINST
the issuance of five hundred million dollars ($500,000,000) State of North Carolina Public School Building 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 pay the cost of public school building capital improvements for local governments."
If a majority of those voting on the Public School Building Bond question in the election vote in favor of the issuance of the bonds, the bonds may be issued as provided in this act.  If a majority of those voting on the Public School Building Bond question in the election vote against the issuance of the bonds, the 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, income taxes on the gain from the transfer of bonds and notes, and franchise taxes.  The interest on bonds and notes shall not be subject to taxation as to income.
(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.  In addition to the State's right to amend any provision of this act to the extent it does not impair any contractual right of a bond owner, the State expressly reserves the right to amend any provision of this act with respect to the making and repayment of loans, the disposition of any repayments of loans, and any intercept provisions relating to the failure of a local government unit to repay a loan, the bonds not being secured in any respect by loans, any repayments thereof, or any intercept provisions with respect thereto.
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.  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. 11.  Effective date.  This act is effective upon ratification.