GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2015

H                                                                                                                                                   5

HOUSE BILL 943

Committee Substitute Favorable 8/4/15

Third Edition Engrossed 8/5/15

Fourth Edition Engrossed 8/6/15

Senate Finance Committee Substitute Adopted 9/22/15

 

Short Title:        Connect NC Bond Act of 2015.

(Public)

Sponsors:

 

Referred to:

 

August 3, 2015

 

A BILL TO BE ENTITLED

AN ACT to authorize the issuance of general obligation bonds for the purpose of accomplishing certain interrelated and united projects to further economic development in the state consistent with the connect nc plan.

The General Assembly of North Carolina enacts:

SECTION 1.(a)  Short Title. – This section shall be known as the "Connect NC Bond Act of 2015."

SECTION 1.(b)  Purpose. – It is the intent of the General Assembly by this act to provide, subject to a vote of the qualified voters of the State, for the issuance of two billion dollars ($2,000,000,000) general obligation bonds of the State for the purpose of providing funds, with any other available funds, to update the State's public facilities for the 21st century, including, without limitation, construction, repair, renovation, and furnishing of new facilities in order to (i) enhance other economic development efforts of the State and (ii) attract new and assist existing industry, business, technology, and tourism for the benefit of the State and its citizenry.

SECTION 1.(c)  Findings. – The General Assembly finds the following:

(1)        The University of North Carolina is in need of new and renovated facilities to educate and prepare students; especially in the areas of science, technology, engineering, and math; to conduct research; and to recruit, retain, and prepare researchers and faculty for the 21st century for the purpose of enhancing the economic attractiveness of the State.

(2)        The North Carolina Community College System is in need of new and renovated facilities to educate and prepare students and workers for the 21st century for the purpose of enhancing the economic attractiveness of the State.

(3)        Parks and public facilities that are accessible to children with disabilities and veterans with disabilities are essential for the 21st century to attract new and assist existing industry, business, technology, and tourism for the benefit of the State and its citizenry.

(4)        Clean water and sewer systems are essential for the 21st century to attract new and assist existing industry, business, technology, and tourism for the benefit of the State and its citizenry.

(5)        Modern National Guard facilities attract new defense industry companies and suppliers.

(6)        New facilities for agriculture will assist current agricultural endeavors in the State and will attract bioscience and other related industries, thereby benefitting the State's economic development.

(7)        New and renovated State parks and attractions are vital components of tourism in the State, thereby benefitting the State's economic development.

(8)        Adequate public safety is essential for the public welfare, for orderly economic development, and to attract new and assist existing industry, business, technology, and tourism for the benefit of the State and its citizenry.

(9)        State facilities need routine repair and renovations in order for the facilities to be up‑to‑date for the 21st century to attract new and assist existing industry, business, technology, and tourism for the benefit of the State and its citizenry.

(10)      The components set forth above are all interrelated and united and comprise a single plan for updating the State's infrastructure for the 21st century and for providing the State with necessary economic development tools to attract new and assist existing industry, business, technology, and tourism for the benefit of the State and its citizenry.

SECTION 1.(d)  Definitions. – Unless the context otherwise requires, the following definitions apply in this section:

(1)        Bonds. – Bonds issued under this section.

(2)        Cost. – Without intending thereby to limit or restrict any proper definition of this term in financing the cost of facilities or purposes authorized by this section, any of the following:

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. Nothing in this section shall permit use of bond funds to pay salaries or fees for bond administration; such salaries and fees shall come from funds appropriated by the General Assembly.

d.         Finance charges and interest prior to and during construction and, if deemed advisable by the State Treasurer, for a period not exceeding three 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 in this subdivision.

g.         Any other costs and expenses necessary or incidental to the purposes of this section.

Allocations in this section 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 sub‑subdivisions c. through g. of this subdivision in connection with the issuance of bonds for the project or undertaking.

(3)        Credit facility agreement. – 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 agreement, 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 agreement in accordance with the terms and provisions of such agreement.

(4)        Notes. – Notes issued under this section.

(5)        Par formula. – 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 the following:

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 LIBOR rate, 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 section 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. – The State of North Carolina.

SECTION 1.(e)  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 improvement bonds in the election called and held as provided in this section, 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 Public 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 section, in an aggregate principal amount not exceeding two billion dollars ($2,000,000,000) for the purpose of providing funds, with any other available funds, for the purposes authorized in this section.

SECTION 1.(f)  Use of Public Improvement Bond and Note Proceeds. –

(1)        Subject to the provisions of subdivision (2) of this subsection, the proceeds of public improvement bonds and notes, including premium thereon, if any, shall be used for the projects in the following general amounts set forth below:

 

University of North Carolina

 

Appalachian State         Watauga           New Health Sciences Building                            $70,000,000

University

 

East Carolina                Pitt                   Life Sciences & Biotech. Building                       $90,000,000

University

 

Fayetteville State          Cumberland      Lyons Science Bldg. Renovation                        $10,000,000

University

 

NC Central                  Durham            New Business School                                        $30,000,000

University

 

NC State University      Wake               Engineering Building                                           $75,000,000

 

North Carolina             Guilford            Engineering Building                                           $90,000,000

A & T State

University

 

North Carolina             Burke               North Carolina School of Technology                $58,000,000

School of Science                                             and Engineering

and Math

 

UNC – Chapel Hill       Orange             Medical Education Bldg. Replacement               $68,000,000

 

UNC – Charlotte          Mecklenburg    New Sciences Building                                      $90,000,000

 

UNC – Greensboro      Guilford            Nursing School Building                                   $105,000,000

 

UNC – Pembroke        Robeson           New Business School                                        $23,000,000

 

UNC – Wilmington       New Hanover   Allied Health and Human Services/                     $66,000,000

                                                                        Nursing Building

 

Western Carolina          Jackson            Science/STEM Building                                   $110,000,000

University

 

Winston‑Salem             Forsyth             Sciences Building                                               $50,000,000

State University

 

Various                        Statewide         Capital Repairs and Renovations                       $45,000,000

 

Total for University of North Carolina                                                                    $980,000,000

 

 

NC Community Colleges

 

Alamance Comm. College                    New Construction, Repairs, Renovations             $6,100,339

 

Asheville‑Buncombe                             New Construction, Repairs, Renovations             $5,487,535

Technical Comm. College

 

Beaufort Co. Comm. College                New Construction, Repairs, Renovations             $6,557,819

 

Bladen Comm. College                         New Construction, Repairs, Renovations             $6,533,125

 

Blue Ridge Comm. College                   New Construction, Repairs, Renovations             $2,966,077

 

Brunswick Comm. College                   New Construction, Repairs, Renovations             $2,857,328

 

Caldwell Comm. College                      New Construction, Repairs, Renovations             $5,629,337

and Technical Institute

 

Cape Fear Comm. College                   New Construction, Repairs, Renovations             $5,908,685

 

Carteret Comm. College                       New Construction, Repairs, Renovations             $2,674,685

 

Catawba Valley Comm. College           New Construction, Repairs, Renovations             $6,180,268

 

Central Carolina Comm. College           New Construction, Repairs, Renovations             $6,307,085

 

Central Piedmont Comm. College         New Construction, Repairs, Renovations             $9,636,457

 

Cleveland Comm. College                    New Construction, Repairs, Renovations             $5,467,357

 

College of the Albermarle                     New Construction, Repairs, Renovations             $6,590,687

 

Coastal Carolina Comm. College          New Construction, Repairs, Renovations             $6,973,103

 

Craven Comm. College                        New Construction, Repairs, Renovations             $5,376,640

 

Davidson County Comm. College         New Construction, Repairs, Renovations             $5,820,720

 

Durham Tech. Comm. College              New Construction, Repairs, Renovations             $4,362,997

 

Edgecombe Comm. College                 New Construction, Repairs, Renovations             $7,277,875

 

Fayetteville Tech. Comm. College         New Construction, Repairs, Renovations           $10,668,066

 

Forsyth Tech. Comm. College              New Construction, Repairs, Renovations             $5,809,410

 

Gaston College                                     New Construction, Repairs, Renovations             $5,949,907

 

Guilford Tech. Comm. College              New Construction, Repairs, Renovations             $9,519,543

 

Halifax Comm. College                         New Construction, Repairs, Renovations             $6,519,080

 

Haywood Comm. College                    New Construction, Repairs, Renovations             $2,831,380

 

Isothermal Comm. College                    New Construction, Repairs, Renovations             $6,803,668

 

James Sprunt Comm. College               New Construction, Repairs, Renovations             $4,502,677

 

Johnston Comm. College                      New Construction, Repairs, Renovations             $3,701,470

 

Lenoir Comm. College                          New Construction, Repairs, Renovations             $8,001,502

 

Martin Comm. College                         New Construction, Repairs, Renovations             $6,566,722

 

Mayland Comm. College                      New Construction, Repairs, Renovations             $4,668,043

 

McDowell Tech. Comm. College          New Construction, Repairs, Renovations             $4,598,981

 

Mitchell Comm. College                       New Construction, Repairs, Renovations             $3,218,011

 

Montgomery Comm. College                New Construction, Repairs, Renovations             $6,334,537

 

Nash Comm. College                           New Construction, Repairs, Renovations             $7,773,798

 

Pamlico Comm. College                       New Construction, Repairs, Renovations             $4,193,233

 

Piedmont Comm. College                     New Construction, Repairs, Renovations             $4,850,325

 

Pitt Comm. College                              New Construction, Repairs, Renovations             $8,376,397

 

Randolph Comm. College                     New Construction, Repairs, Renovations             $5,086,842

 

Richmond Comm. College                    New Construction, Repairs, Renovations             $7,229,431

 

Roanoke‑Chowan Comm. College       New Construction, Repairs, Renovations             $6,326,517

 

Robeson Comm. College                      New Construction, Repairs, Renovations             $7,296,568

 

Rockingham Comm. College                 New Construction, Repairs, Renovations             $6,848,392

 

Rowan‑Cabarrus Comm. College         New Construction, Repairs, Renovations             $7,211,552

 

Sampson Comm. College                     New Construction, Repairs, Renovations             $4,774,533

 

Sandhills Comm. College                      New Construction, Repairs, Renovations             $3,816,267

 

South Piedmont Comm. College           New Construction, Repairs, Renovations             $3,189,221

 

Southeastern Comm. College                New Construction, Repairs, Renovations             $6,861,620

 

Southwestern Comm. College               New Construction, Repairs, Renovations             $7,170,597

 

Stanly Comm. College                          New Construction, Repairs, Renovations             $5,510,980

 

Surry Comm. College                           New Construction, Repairs, Renovations             $7,222,184

 

Tri‑County Comm. College                   New Construction, Repairs, Renovations             $4,515,728

 

Vance‑Granville Comm. College           New Construction, Repairs, Renovations             $7,611,910

 

Wake Tech. Comm. College                 New Construction, Repairs, Renovations           $12,595,127

 

Wayne Comm. College                         New Construction, Repairs, Renovations             $5,855,913

 

Western Piedmont Comm. College       New Construction, Repairs, Renovations             $5,099,649

 

Wilkes Comm. College                         New Construction, Repairs, Renovations             $5,243,674

 

Wilson Comm. College                         New Construction, Repairs, Renovations             $6,938,426

 

Total for NC Community Colleges                                                                          $350,000,000

 

 

Local Parks and Infrastructure

 

DENR                          Statewide         Children With Disabilities and                               $3,000,000

                                                                        Veterans With Disabilities Local

                                                                        Parks (Matching Grants)

 

Department of              Statewide         Water/Sewer Loans and Grants                       $309,500,000

Environmental

Quality

 

Total for Local Parks and Infrastructure                                                                $312,500,000

 

 

National Guard

 

National Guard             Guilford/           Readiness Centers                                             $70,000,000

                                    Burke/

                                    Wilkes

 

Total for National Guard                                                                                            $70,000,000

 

 

Agriculture

 

NC State University      Wake               Plant Sciences Building                                      $85,000,000

                                                                        Ag/NCSU Partnership

 

Agriculture and             Wake               Veterinary/Food/Drug/Motor Fuels Lab             $94,000,000

Consumer Services

 

Total for Agriculture                                                                                                 $179,000,000

 

 

State Parks and Attractions

 

State Parks                   Cumberland      Carvers Creek                                                     $5,700,750

 

State Parks                   Durham/           Eno River                                                            $2,830,500

                                    Orange

 

State Parks                   Washington/     Goose Creek                                                       $1,477,500

                                    Beaufort

 

State Parks                   Onslow            Hammocks Beach                                               $1,125,000

 

State Parks                   Dare                 Jockeys Ridge                                                        $751,500

 

State Parks                   Vance/             Kerr Lake State Recreation Area                         $3,750,000

                                    Warren

 

State Parks                   Burke/              Lake James                                                         $3,021,000

                                    McDowell

 

State Parks                   Iredell               Lake Norman                                                      $2,307,000

 

State Parks                   Yancey             Mount Mitchell                                                       $600,000

 

State Parks                   Various            Mountain‑To‑Sea/Other State Trails                    $4,500,000

 

State Parks                   Surry/               Pilot Mountain                                                     $4,481,850

                                    Yadkin

 

State Parks                   Camden           Dismal Swamp                                                       $990,750

 

State Parks                   Watauga           Elk Knob                                                               $900,000

 

State Parks                   Durham/           Falls Lake State Recreation Area                            $789,750   Wake

 

State Parks                   New Hanover   Fort Fisher State Recreation Area                        $1,125,000

 

State Parks                   Transylvania     Gorges                                                                $2,505,750

 

State Parks                   Stokes              Hanging Rock                                                      $2,100,000

 

State Parks                   Guilford/           Haw River                                                           $1,500,000

                                    Rockingham

 

State Parks                   Chatham/          Jordan Lake State Recreation Area                      $3,000,000

                                    Wake

 

State Parks                   Columbus         Lake Waccamaw                                                $1,506,000

 

State Parks                   Scotland/          Lumber River                                                      $2,628,750

                                    Hoke/

                                    Robeson/

                                    Columbus

 

State Parks                   Rockingham     Mayo River                                                            $750,000

 

State Parks                   Tyrell/               Pettigrew                                                             $2,830,500

                                    Washington

 

State Parks                   Burke               South Mountain                                                   $2,250,000

 

State Parks                   Alleghany/        Stone Mountain                                                   $1,338,000

                                    Wilkes

 

State Parks                   Wake               William B. Umstead                                             $1,725,000

 

State Parks                   Avery               Yellow Mountain State Natural Area                    $2,250,000

 

State Parks                   Watauga           Beech Creek Bog State Natural Area                     $600,000

 

State Parks                   New Hanover   Carolina Beach                                                       $855,000

 

State Parks                   Rutherford        Chimney Rock                                                     $1,500,000

 

State Parks                   Wayne             Cliffs of the Neuse                                                  $692,400

 

State Parks                   Gaston             Crowders Mountain                                                $750,000

 

State Parks                   Chatham           Deep River State Trail                                         $1,281,000

 

State Parks                   Carteret            Fort Macon                                                            $135,000

 

State Parks                   Watauga           Grandfather Mountain                                          $1,501,500

 

State Parks                   Bladen              Jones Lake                                                             $651,750

 

State Parks                   Chatham           Lower Haw River State Natural Area                     $203,250

 

State Parks                   Halifax              Medoc Mountain                                                 $1,383,750

 

State Parks                   Gates               Merchants Millpond                                                $870,750

 

State Parks                   Stanly               Morrow Mountain                                               $1,537,500

 

State Parks                   Ashe                Mount Jefferson State Natural Area                     $1,500,000

 

State Parks                   Ashe                New River                                                              $675,000

 

State Parks                   Harnett             Raven Rock                                                        $1,125,000

 

State Parks                   Bladen              Singletary Lake                                                       $575,250

 

State Parks                   Moore              Weymouth Woods State Natural Area                    $428,250

 

Zoo                              Randolph          Australasia Exhibit Complex/                              $25,000,000

                                                                        Replace Africa Pavilion and

                                                                        Related Projects

 

Total for State Parks and Attractions                                                                      $100,000,000

 

 

Public Safety

 

DPS                             Moore              Samarcand Training Academy                              $8,500,000

                                                                       

Total for Public Safety                                                                                                  $8,500,000

 

 

Grand Total                                                                                                            $2,000,000,000

 

(2)        Special Allocation Provisions. – In determining the use of the proceeds of public improvement bonds and notes, including premium thereon, if any, set forth in subdivision (1) of this subsection, the following special allocation provisions apply:

a.         The proceeds of public improvement bonds and notes, including premium thereon, if any, for Statewide capital repairs and renovations for The University of North Carolina, as provided in subdivision (1) of this subsection, shall be used for projects that are eligible to receive funds from the Repairs and Renovations Reserve under G.S. 143C‑4‑3(b). Any items purchased with such proceeds and installed or replaced as part of a renovation or rehabilitation must have a useful life of at least 10 years or must extend the life of the facility by at least 10 years once renovated or rehabilitated. Such proceeds (i) shall be prioritized to constituent institutions not otherwise specified as receiving proceeds under subdivision (1) of this subsection and (ii) shall not be used to increase any amount to a constituent institution otherwise specified as receiving proceeds under subdivision (1) of this subsection.

b.         The proceeds of public improvement bonds and notes, including premium thereon, if any, for NC Community Colleges, as provided in subdivision (1) of this subsection, shall be used for new construction or rehabilitation of existing facilities and repairs and renovations. Any items purchased with such proceeds and installed or replaced as part of a renovation or rehabilitation must have a useful life of at least 10 years or must extend the life of the facility by at least 10 years once renovated or rehabilitated. In order to receive the proceeds under this sub‑subdivision for projects for new construction, the community college receiving the proceeds shall provide local matching funds from county funds, other non‑State funds, or a combination of these sources for such proceeds. The amount of matching funds shall be (i) one dollar ($1.00) of local matching funds for every three dollars ($3.00) of such proceeds for a community college with a main campus located in a development tier one area, as defined in G.S. 143B‑437.08, (ii) one dollar ($1.00) of local matching funds for every two dollars ($2.00) of such proceeds for a community college with a main campus located in a development tier two area, as defined in G.S. 143B‑437.08, and (iii) one dollar ($1.00) of local matching funds for every one dollar ($1.00) of such proceeds for a community college with a main campus located in a development tier three area, as defined in G.S. 143B‑437.08. Community colleges are not required to match bond proceeds allocated in this section for rehabilitation of existing facilities and repairs and renovations.

c.         The proceeds of public improvement bonds and notes, including premium thereon, if any, for the Department of Environment and Natural Resources for Statewide Children With Disabilities and Veterans With Disabilities Local Parks (Matching Grants), as provided in subdivision (1) of this subsection, shall be allocated to the Parks and Recreation Trust Fund established in G.S. 113‑44.15 and shall be used exclusively for grants to local government units or public authorities, as defined in G.S. 159‑7, for construction of special facilities or adaptation of existing facilities that meet the unique needs of children with physical and developmental disabilities and veterans with physical and developmental disabilities and enable them to participate in recreational and sporting activities, regardless of their abilities. In order to receive such proceeds under this sub‑subdivision, a local government unit or public authority shall provide matching funds in the amount of one dollar ($1.00) of local funds for every four dollars ($4.00) of such proceeds. Grants made using such proceeds under this sub‑subdivision shall not exceed five hundred thousand dollars ($500,000) per project.

d.         The proceeds of public improvement bonds and notes, including premium thereon, if any, for the Department of Environmental Quality for Statewide Water/Sewer Loans and Grants, as provided in subdivision (1) of this subsection, shall be allocated to the Water Infrastructure Fund established in G.S. 159G‑22. One hundred million dollars ($100,000,000) shall be used for grants, and the remainder shall be used for low‑interest loans. The proceeds for loans and the proceeds for grants shall be allocated in equal proportion to the Drinking Water Reserve and the Wastewater Reserve and shall be subject to the following:

1.         If the availability of loan funds exceeds project demand, the limits contained in G.S. 159G‑36 applicable to a loan may be exceeded for the purpose of ensuring that all available loan funds are utilized for projects prioritized pursuant to G.S. 159G‑23.

2.         Loan and grant applications for projects shall be funded first if both of the following criteria are met: (i) the project is required to be completed due to an EPA administrative order or consent decree and (ii) the application for the project is deemed complete by the Division and meets the minimum requirements for the program from which it is seeking funding.

3.         A grant application to be funded from the Wastewater Reserve and required to be prioritized under sub‑sub‑subdivision 2. of this sub‑subdivision shall be awarded a grant equal to fifty percent (50%) of the project costs that are reasonably necessary to comply with the EPA administrative order or consent decree, notwithstanding limits otherwise applicable pursuant to G.S. 159G‑36; provided that, the cumulative amount of all grants received by an applicant under this sub‑subdivision does not exceed one‑third of the amount of bond proceeds for grants allocated to the Wastewater Reserve.

4.         A loan application to be funded from the Wastewater Reserve and required to be prioritized under sub‑sub‑subdivision 2. of this sub‑subdivision shall receive a loan equal to the amount sufficient to cover all project costs that are reasonably necessary to comply with the EPA administrative order or consent decree minus the amount of any grant awarded under sub‑sub‑subdivision 3. of this sub‑subdivision; provided that, the cumulative amount of all loans received by an applicant under this sub‑subdivision does not exceed fifteen million dollars ($15,000,000).

e.         The proceeds of public improvement bonds and notes, including premium thereon, if any, for National Guard, as provided in subdivision (1) of this subsection, shall be used for capital improvements, as defined in G.S. 143C‑1‑1(d)(5), for readiness centers located in Guilford, Burke, and Wilkes Counties.

f.          The proceeds of public improvement bonds and notes, including premium thereon, if any, for the North Carolina Zoological Park, as provided in subdivision (1) of this subsection, shall be used for capital improvements, as defined in G.S. 143C‑1‑1(d)(5). Any items purchased with such proceeds and installed or replaced as part of a renovation or rehabilitation must have a useful life of at least 10 years or must extend the life of the facility by at least 10 years once renovated or rehabilitated.

(3)        Reallocation. – For public improvement bonds authorized by this section, the General Assembly may at this session or at any subsequent session increase or decrease the allocations of the proceeds of public improvement bonds and notes, including premium thereon, if any, for projects set forth in subdivision (1) of this subsection or reallocate any amounts among agencies or projects not listed in this subsection but listed in the six‑year capital improvement plan developed pursuant to G.S. 143C‑8‑5, so long as the aggregate amount of the allocations does not exceed two billion dollars ($2,000,000,000).

SECTION 1.(g)  Allocation and Tracking of Proceeds. –

(1)        Public improvement bonds. – The proceeds of public 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 "Public Improvement 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 section. Monies in the Public Improvement Bonds Fund shall be allocated and expended as provided in this section.

Any additional monies 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 for deposit to the Public Improvement Bonds Fund may be placed in the Public 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 section.

Monies in the Public Improvement Bonds Fund or any separate account established under this section may be invested from time to time by the State Treasurer in the same manner permitted for investment of monies belonging to the State or held in the State treasury, except with respect to grant money to the extent otherwise directed by the terms of the grant. Investment earnings, except investment earnings with respect to grant monies to the extent otherwise directed or restricted by the terms of the grant, may be (i) credited to the Public Improvement Bonds Fund, (ii) used to pay debt service on the bonds authorized by this section, (iii) used to satisfy compliance with applicable requirements of the federal tax law, or (iv) transferred to the General Fund of the State.

The proceeds of public improvement bonds and notes, including premium thereon, if any, may be used with any other monies made available by the General Assembly for funding the projects authorized by this section, 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 section is ratified or any subsequent sessions. The proceeds of public improvement bonds and notes, including premium thereon, if any, shall be expended and disbursed under the direction and supervision of the Director of the Budget. The funds provided by this section shall be disbursed for the purposes provided in this section 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 State Budget Act, Chapter 143C of the General Statutes.

(2)        Tracking of bond proceeds. – The State Treasurer or the State Treasurer's designee is hereby authorized and directed to set up a comprehensive system of tracking the proceeds of the public improvement bonds and notes, including premium thereon, if any, to the extent necessary to enable the State Treasurer or the State Treasurer's designee to properly account for the use of such proceeds for compliance with applicable requirements of the federal tax law or otherwise. All recipients of such proceeds shall comply with any tracking system implemented by the State Treasurer or the State Treasurer's designee for this purpose. The State Treasurer may withhold such proceeds from any State agency or department not complying with this subdivision.

(3)        Costs. – Allocations to the costs of a capital improvement or undertaking in each case may include allocations to pay the costs set forth in sub‑subdivisions c. through g. of subdivision (2) of subsection (d) of this section in connection with the issuance of bonds for that capital improvement or undertaking.

SECTION 1.(i)  Election. – The question of the issuance of the bonds authorized by this section shall be submitted to the qualified voters of the State at the time of the election in 2016 when voters of this State are given an opportunity to express their preference for the person to be the presidential candidate of their political party. Any other primary, election, or referendum validly called or scheduled by law at the time the election on the bond question provided for in this subsection is held may be held as called or scheduled. Notice of the election shall be given in the manner and at the times required by G.S. 163‑33(8). 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 and shall be available 50 days prior to the date on which the election is to be held.

Ballots, voting systems authorized by Article 14A of Chapter 163 of the General Statutes, or both may be used in accordance with rules prescribed by the State Board of Elections. The bond question to be used in the ballots or voting systems shall be in substantially the following form:

"[ ] FOR           [ ] AGAINST

The issuance of two billion dollars ($2,000,000,000) State of North Carolina Public Improvement 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 fund capital improvements and new facilities for the State, including, without limitation, the construction and furnishing of new facilities and the renovation and rehabilitation of existing facilities for, without limitation, the University of North Carolina System, the North Carolina Community College System, water and sewer systems, the State's National Guard, the Department of Agriculture and Consumer Services, and attractions and parks."

If a majority of those voting on the 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 section. If a majority of those voting on a bond question in the election do not vote in favor of 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.

SECTION 1.(j)  Issuance of Bonds and Notes. –

(1)        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.

(2)        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 the Governor's facsimile signature, shall be signed by the State Treasurer or shall bear the State Treasurer's facsimile signature, and shall bear the Great Seal of the State of North Carolina 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 section; provided, however, that nothing in this section 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 section.

(3)        Manner of sale; expenses. – Subject to the consent of the Council of State, the State Treasurer shall determine 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, and 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 monies.

(4)        Notes; repayment. –

a.         Subject to 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:

1.         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.

2.         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.

3.         For the renewal of any loan evidenced by notes herein authorized.

4.         For the purposes authorized in this section.

5.         For refunding bonds or notes as herein authorized.

b.         Funds derived from the sale of bonds or notes may be used in the payment of any bond anticipation notes issued under this section. 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.

(5)        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 section. The refunding bonds and notes may be combined with any other issues of State bonds and notes similarly secured.

(6)        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.

(7)        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, and other financial institutions engaged in business in the State; and 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 that 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 of the State is now or may hereafter be authorized by law.

(8)        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 section 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 section 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.

SECTION 1.(k)  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 agreement supports the bonds or notes, unless the State Treasurer specifically determines that a credit facility agreement is not required, upon a finding and determination by the State Treasurer, that the absence of a credit facility agreement 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 agreement;

(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 agreement or to the State.

If the aggregate principal amount repayable by the State under a credit facility agreement is in excess of the aggregate principal amount of bonds or notes secured by the credit facility agreement, whether as a result of the inclusion in the credit facility agreement 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 agreement 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.

SECTION 1.(l)  Interpretation of Section. –

(1)        Additional method. – The foregoing subsections of this section 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.

(2)        Statutory references. – References in this section 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.

(3)        Broad construction. – The General Assembly specifically has chosen to combine what otherwise might be considered differing projects to be financed into one bond bill and bond question because the General Assembly finds that such differing projects, when taken together, constitute an interrelated, united, and single plan for the State's infrastructure as stated aforesaid. Accordingly, this section, being necessary for the health, welfare, and advancement of the people of the State, shall be broadly construed to affect the purposes thereof.

(4)        Inconsistent provisions. – Insofar as the provisions of this section are inconsistent with the provisions of any general laws, or parts thereof, the provisions of this section shall be controlling.

(5)        Severability. – If any provision of this section or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of the section that can be given effect without the invalid provision or application, and to this end, the provisions of this section are declared to be severable.

SECTION 2.  Other than community colleges, each entity receiving the proceeds of public improvement bonds and notes, including premium thereon, if any, issued pursuant to and for projects listed in Section 1 of this act shall report by January 1, 2017, and quarterly thereafter, to the Joint Legislative Oversight Committee on Capital Improvements, the House of Representatives Appropriations Committee, and the Senate Committee on Appropriations/Base Budget on the projects funded from public improvement general obligation bonds authorized by Section 1 of this act. Community colleges receiving the proceeds of public improvement bonds and notes, including premium thereon, if any, issued pursuant to and for projects listed in Section 1 of this act shall report by January 1, 2017, and quarterly thereafter, to the North Carolina Community Colleges System Office on the projects funded from public improvement general obligation bonds authorized by Section 1 of this act, and the System Office shall combine the reports and submit them to the Joint Legislative Oversight Committee on Capital Improvements, the House of Representatives Appropriations Committee, and the Senate Committee on Appropriations/Base Budget. Each report shall include the total project costs, the amount to be funded from the bonds, the expenditures to date from the bonds and other sources, and the percentage of each project completed.

SECTION 3.  The State Treasurer shall not issue bonds or notes otherwise authorized by Section 1 of this act in an amount or year where the issuance of the bonds or notes would violate the Debt Affordability Advisory Committee's recommendations on debt capacities required under G.S. 142‑101.

SECTION 4.(a)  The portion of funds estimated to be needed for escalation of costs for projects, other than for NC Community Colleges, for DEQ Statewide Water/Sewer Loans and Grants, and for State parks, funded in whole or in part with the proceeds of public improvement bonds and notes, including premium thereon, if any, issued pursuant to Section 1 of this act, shall remain with the Office of State Budget and Management and shall be disbursed only for the following purposes:

(1)        To address unforeseen contingencies related to the specific project for which the funds were made available.

(2)        To address inflation costs related to that specific project.

SECTION 4.(b)  Any funds retained by the Office of State Budget and Management pursuant to subsection (a) of this section at the time a project is completed shall be retained by the Office of State Budget and Management until reallocated for other purposes by the General Assembly. The Office of State Budget and Management shall report to the Joint Legislative Oversight Committee on Capital Improvements on any funds retained pursuant to this subsection within 90 days of a project's completion.

SECTION 5.  This act is effective when it becomes law.