North Carolina § 115C-546 - 2. Allocations from the Fund; uses; expenditures; reversion to General Fund; matching requirements.

§ 115C-546. 2. Allocations from the Fund; uses; expenditures; reversion to General Fund; matching requirements.

Repealed by Session Laws 2013-316, s. 2.4(b), effective July 23, 2013, and Session Laws 2017-206, s. 7(a), effective August 30, 2017. Counties shall use monies previously credited to the Fund by the Secretary of Revenue pursuant to G.S. 115C-546.1(b) for capital outlay projects including the planning, construction, reconstruction, enlargement, improvement, repair, or renovation of public school buildings and for the purchase of land for public school buildings; for equipment to implement a local school technology plan; or for both. Monies used to implement a local school technology plan shall be transferred to the State School Technology Fund and allocated by that Fund to the local school administrative unit for equipment. Monies in the Fund previously credited to the Fund by the Secretary of Revenue pursuant to G.S. 115C-546.1(b) allocated for capital projects shall be matched on the basis of one dollar of local funds for every three dollars of State funds. Such monies in the Fund transferred to the State Technology Fund do not require a local match. If funds are appropriated from the Education Lottery Fund to the Public School Building Capital Fund, such funds shall be allocated for school capital construction projects on a per average daily membership basis according to the average daily membership for the budget year as determined and certified by the State Board of Education. , (2) Repealed by Session Laws 2013-360, s. 6.11(b), effective July 1, 2013. The State Board of Education may use up to one million five hundred thousand dollars ($1,500,000) each year of monies in the Fund to support positions in the Department of Public Instruction's Support Services Division. If a county has received a grant fund award from the Needs-Based Public School Capital Fund, that county shall be ineligible to receive allocations from the Public School Building Capital Fund for a period of five years from the date the grant funds were awarded. As used in this section, "public school buildings" only includes facilities for individual schools that are used for instructional and related purposes and does not include centralized administration, maintenance, or other facilities. In the event a county finds that it does not need all or part of the funds allocated to it for capital outlay projects including the planning, construction, reconstruction, enlargement, improvement, repair, or renovation of public school buildings, for the purchase of land for public school buildings, or for equipment to implement a local school technology plan, the unneeded funds allocated to that county may be used to retire any indebtedness incurred by the county for public school facilities. In the event a county finds that its public school building needs and its school technology needs can be met in a more timely fashion through the allocation of financial resources previously allocated for purposes other than school building needs or school technology needs and not restricted for use in meeting public school building needs or school technology needs, the county commissioners may, with the concurrence of the affected local Board of Education, use those financial resources to meet school building needs and school technology needs and may allocate the funds it receives under this Article for purposes other than school building needs or school technology needs to the extent that financial resources were redirected from such purposes. The concurrence described herein shall be secured in advance of the allocation of the previously unrestricted financial resources and shall be on a form prescribed by the Local Government Commission. Revenue received from local sales and use taxes that is restricted for public school capital outlay purposes pursuant to G.S. 105-502 or G.S. 105-487 may be used to meet the local matching requirement. Funds expended by a county after July 1, 1986, for land acquisition, engineering fees, architectural fees, or other directly related costs for a public school building capital project that was not completed prior to July 1, 1987, may be used to meet the local match requirement. (3) No county shall have to provide matching funds required under subsection (c) of this section. (4) A county may use monies in this Fund to pay for school construction projects in local school administrative units and to retire indebtedness incurred for school construction projects. (5) A county may not use monies in this Fund to pay for school technology needs. History (1987, c. 622, s. 12; c. 813, ss. 18.1, 19.1, 21; 1991 (Reg. Sess., 1992), c. 1030, s. 30; 1997-221, s. 27; 2005-276, s. 31.1(hh); 2005-344, s. 15.2; 2006-66, s. 7.15; 2006-259, s. 8(i); 2008-107, s. 7.18(a), (b); 2011-145, s. 5.4(h); 2011-391, s. 4; 2013-316, s. 2.4(b); 2013-360, s. 6.11(b); 2017-57, s. 5.3(f); 2017-206, s. 7(a).) Local Modification. - Buncombe: 2013-251, s. 1 (as to subsection (d) and applicable only to unencumbered funds received prior to July 9, 2013); Edgecombe and Nash Counties and local school administrative units located in those counties: 1987, c. 813, s. 18.2. Editor's Note. - Session Laws 1997-221, s. 32, provides: "This act shall not be construed to obligate the General Assembly to appropriate any funds to implement the provisions of this act. Nothing in Sections 16 through 25 or Sections 28 through 30 of this act shall be construed to create any rights or causes of action." Session Laws 2007-323, s. 31.16.2(a)-(c), provides: "(a) ADM Funding Adjustment. - Notwithstanding G.S. 115C-546.2(a) , the amount that would otherwise be allocated to counties under that subsection for fiscal year 2007-2008 from the Public School Building Capital Fund is reduced as follows: "(1) If the amount of a county's Medicaid payments that are assumed by the State for fiscal year 2007-2008 under Section 31.16.1.(a) of this act exceeds the allocation the county would receive under this section based on its per average daily membership, the amount of the county's allocation from the Fund is reduced by sixty percent (60%) of the amount the county would receive based on its average daily membership. "(2) If the amount of a county's Medicaid payments that are assumed by the State for fiscal year 2007-2008 under Section 31.16.1.(a) of this act does not exceed the allocation the county would receive under this section based on its per average daily membership, the amount of the county's allocation from the Fund is reduced by an amount equal to sixty percent (60%) of the county's Medicaid payments that are assumed by the State for fiscal year 2007-2008. "(b) Restriction. - In fiscal year 2007-2008, a county must use a portion of the revenue that is available to it, as a result of the assumption by the State of part of the county's Medicaid payments, for the purposes set out in G.S. 115C-546.2(b) . The portion that must be used for these purposes is an amount equal to the difference between what the county would receive under G.S. 115C-546.2(a) based on its per average daily membership and the adjusted amount it receives under subsection (a) of this section. "(c) County Hold Harmless. - If the amount of the county's Medicaid costs and Medicare Part D clawback payments assumed by the State for fiscal year 2007-2008, less the amount by which the county's ADM funding is reduced under subsection (a) of this section, does not equal or exceed five hundred thousand dollars ($500,000), the State must reimburse the county for the difference, but not less than one hundred dollars ($100.00). "The Secretary of the Department of Health and Human Services must certify to the Secretary of Revenue the amount of the county's Medicaid costs and Medicare Part D clawback payments assumed by the State under section 31.16.1.(a) of this act. To obtain the revenue for the hold harmless distribution, the Secretary of Revenue must withhold from sales and use tax collections under Article 5 of this Chapter the amount needed to make the hold harmless payments. "The Secretary of Revenue must estimate a county's hold harmless amount and send the county ninety percent (90%) of the estimated amount with the sales tax distribution made under G.S. 105-472 for March of 2008. At the end of the 2007-2008 fiscal year, the Secretary must determine the county's actual hold harmless amount for the 2007-2008 fiscal year and send the remainder of the county's hold harmless amount to the county by August 15, 2008." Session Laws 2007-323, s. 31.16.2(d), provides in part: "Subsections (a) and (b) of this section apply to allocations from the Public School Building Capital Fund for fiscal year 2007-2008." Session Laws 2007-323, s. 1.2, provides: "This act shall be known as the 'Current Operations and Capital Improvements Appropriations Act of 2007'." Session Laws 2007-323, s. 32.3, provides: "Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2007-2009 fiscal biennium, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2007-2009 fiscal biennium." Session Laws 2007-323, s. 32.5, is a severability clause. Session Laws 2008-107, s. 7.18(b), effective July 1, 2008, was codified as the second paragraph of subsection (a) of this section at the direction of the Revisor of Statutes. Subsection (a) was subsequently repealed by Session Laws 2013-316, s. 2.4(b). Session Laws 2017-206, s. 7(a), effective August 30, 2017, repealed Session Laws 2008-107, s. 18(b). Session Laws 2008-107, s. 1.2, provides: "This act shall be known as 'The Current Operations and Capital Improvements Appropriations Act of 2008'." Session Laws 2008-107, s. 30.3, provides: "Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2008-2009 fiscal year, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2008-2009 fiscal year." Session Laws 2008-107, s. 30.5, is a severability clause. Session Laws 2010-31, s. 5.1(e), as amended by Session Laws 2010-123, s. 1.4, provides: "Notwithstanding G.S. 18C-164(c) , G.S 115C-546.2(d), or any other provision of law, funds appropriated in this section to the Public School Building Capital Fund for the 2010-2011 fiscal year shall be allocated to counties on the basis of average daily membership (ADM). For funds received for the 2010-2011 fiscal year, counties may authorize local school administrative units to use funds received from the Public School Building Capital Fund for one or more of the following purposes only: (i) for school construction projects in accordance with G.S. 115C-546.2(d) , (ii) to retire indebtedness incurred for school construction projects incurred on or after January 1, 2003, in accordance with G.S. 115C-546.2(d) , and (iii) for classroom teachers. A county may authorize the use of these funds for classroom teachers only upon the request of the local board of education. Funds used for classroom teachers shall supplement and not supplant existing local current expense funding for the public schools. "These funds shall not be included in the computation of 'average per pupil allocation for average daily membership' or 'per pupil local current expense appropriation' under G.S. 115C-238.29H." Session Laws 2010-31, s. 1.1, provides: "This act shall be known as the 'Current Operations and Capital Improvements Appropriations Act of 2010'." Session Laws 2010-31, s. 32.3, provides: "Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2010-2011 fiscal year, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2010-2011 fiscal year." Session Laws 2010-31, s. 32.6, is a severability clause. Session Laws 2011-145, s. 5.4(d), provides: "Notwithstanding G.S. 18C-164(c) , G.S. 115C-546.2(d) , or any other provision of law, funds appropriated in this section to the Public School Building Capital Fund for the 2011-2012 fiscal year shall be allocated to counties on the basis of average daily membership (ADM)." Session Laws 2011-145, s. 1.1, provides: "This act shall be known as the 'Current Operations and Capital Improvements Appropriations Act of 2011.'" Session Laws 2011-145, s. 32.2, provides: "Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2011-2013 fiscal biennium, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2011-2013 fiscal biennium." Session Laws 2011-145, s. 32.5, is a severability clause. Session Laws 2012-142, s. 5.3(h), provides: "Notwithstanding G.S. 18C-164(c) , G.S. 115C-546.2(d) , or any other provision of law, funds appropriated in this section to the Public School Building Capital Fund for the 2012-2013 fiscal year shall be allocated to counties on the basis of average daily membership (ADM)." Session Laws 2012-142, s. 1.2, provides: "This act shall be known as 'The Current Operations and Capital Improvements Appropriations Act of 2012.'" Session Laws 2012-142, s. 27.4, provides: "Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2012-2013 fiscal year, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2012-2013 fiscal year." Session Laws 2012-142, s. 27.7, is a severability clause. Session Laws 2013-316, s. 9(a), provides: "This act does not affect the rights or liabilities of the State, a taxpayer, or another person arising under a statute amended or repealed by this act before the effective date of its amendment or repeal; nor does it affect the right to any refund or credit of a tax that accrued under the amended or repealed statute before the effective date of its amendment or repeal." This section was amended by Session Laws 2013-360, s. 6.11(b), effective July 1, 2013, in the coded bill drafting format provided by G.S. 120-20.1 . However, in the first sentence in (c), the phrase "in the Fund allocated" was not struck through on the act to indicate that it had been deleted. The first sentence in subsection (c) has been set out in the form above at the direction of the Revisor of Statutes. Session Laws 2013-360, s. 1.1, provides: "This act shall be known as the 'Current Operations and Capital Improvements Appropriations Act of 2013.'" Session Laws 2013-360, s. 38.5, is a severability clause. Session Laws 2017-57, s. 5.3(d), (e), (e1), (e2), (g), and (h), as amended by Session Laws 2017-187, s. 1.1(a), as amended by Session Laws 2017-212, s. 1.1, as amended by Session Laws 2018-5, s. 5.3(a), and as amended by Session Laws 2018-80, s. 3A.1(a), provides: "(d) It is the intent of the General Assembly to increase the amount of North Carolina Education Lottery net lottery revenue collected that is dedicated to assist local governments in meeting local school capital needs from sixteen and nine-tenths percent (16.9%) of net lottery revenue collected in the 2016-2017 fiscal year to forty percent (40%) of net lottery revenue collected no later than the 2028-2029 fiscal year. To that end, there is created the Needs-Based Public School Capital Fund as an interest-bearing, nonreverting special fund in the Department of Public Instruction. The State Treasurer shall be the custodian of the Needs-Based Public School Capital Fund and shall invest its assets in accordance with the provisions of G.S. 147-69.2 and G.S. 147-69.3 . The Needs-Based Public School Capital Fund shall be used to award grants to counties designated as a development tier one area or a development tier two area, as defined by G.S. 143B-437.08 , to assist with their critical public school building capital needs. The Superintendent of Public Instruction shall award grants to counties in accordance with the following priorities: "(1) Counties designated as development tier one areas. "(2) Counties with greater need and less ability to generate sales tax and property tax revenue. "(3) Counties with a high debt-to-tax revenue ratio. "(4) The extent to which a project will address critical deficiencies in adequately serving the current and future student population. "(e) Grant funds awarded under this section shall be subject to a matching requirement from the recipient county as follows: "(1) For a county designated as a development tier one area, the grant shall not exceed three dollars ($3.00) in grant funds for every one dollar ($1.00) provided by the county. Grant funds awarded to a county designated as a development tier one area shall not exceed fifteen million dollars ($15,000,000). "(2) For a county designated as a development tier two area, the grant shall not exceed one dollar ($1.00) for every one dollar ($1.00) in grant funds provided by the county. Grant funds awarded to a county designated as a tier two area shall not exceed ten million dollars ($10,000,000). "Grant funds shall be used for the construction of new school buildings only. Grant funds shall not be used for real property acquisition. Grant funds shall be disbursed in a series of payments based on the progress of the project. To obtain a payment, the grantee shall submit a request for payment along with documentation of the expenditures for which the payment is requested and evidence that the matching requirement contained in subsection (b) of this section has been met. Grant funds shall not be awarded to any county that has received an aggregate amount exceeding eight million seven hundred fifty thousand dollars ($8,750,000) in funds from the Public School Building Capital Fund from the 2012-2013 fiscal year to the 2016-2017 fiscal year. No county may receive grant funds under this section more than once every five years. No portion of grant funds may be used to acquire a Leadership in Energy and Environmental Design (LEED) certification. For fiscal year 2018-2019, for the purposes of this section, a county shall be considered to be designated as a development tier one area if (i) it was so designated by the Department of Commerce in 2017 or 2018 and (ii) the county filed a grant application under this section in 2017. "(e1) A county receiving grant funds pursuant to this section shall enter into an agreement with the Department of Public Instruction detailing the use of grant funds. The agreement shall contain at least all of the following: "(1) A requirement that the grantee seek planning assistance and plan review from the School Planning Section of the Department of Public Instruction. "(2) A progress payment provision governing disbursements to the county for the duration of the school construction project based upon the construction progress and documentation satisfactory to the Department that the matching requirement in subsection (e) of this section has been met. "(3) A provision requiring periodic reports to the Department of Public Instruction on the use of disbursed grant funds and the progress of the school construction project. "(4) A requirement that matching funds paid by the county pursuant to this section must be derived from non-State and nonfederal funds. "(e2) Notwithstanding the new construction requirement in subsection (e) of this section, a county may utilize grant funds for a lease agreement if all of the following criteria are met: "(1) Ownership of the subject property on which the leased school is constructed shall be retained by the county. "(2) The lease agreement shall include a repairs and maintenance provision that requires the landlord to bear the entire expense of all repairs, maintenance, alterations, or improvements to the basic structure, fixtures, appurtenances, and grounds of the subject property for the term of the lease. "(3) The lease agreement shall be for a term of at least 15 years and no more than 25 years. "(4) In lieu of the progress payment requirement provided in subsection (e) of this section, a county that has entered into a lease agreement shall provide a copy of the lease agreement to the Department and shall be periodically reimbursed upon submission of documentation satisfactory to the Department that the matching requirement of this section has been met. "For the purposes of this section, the term "lease agreement" shall include any ancillary agreements or predevelopment agreements entered into in anticipation of or in accordance with a lease. A lease agreement entered into pursuant to this subsection shall be subject to the requirements of Article 8 of Chapter 159 of the General Statutes. In determining whether the lease agreement is necessary or expedient pursuant to G.S. 159-151(a)(1) and G.S. 159-151(b)(1) , the Local Government Commission may consider any other relevant construction and financing methods available to the county. "(g) On or before April 1 of each year, a grant recipient shall submit to the Superintendent of Public Instruction an annual report for the preceding year that describes the progress of the project for which the grant was received. The grant recipient shall submit a final report to the State Superintendent of Public Instruction within three months of the completion of the project. "(h) On or before May 1 of each year, the Superintendent of Public Instruction shall submit a report to the chairs of the Senate Appropriations Committee on Education/Higher Education, the chairs of the House Appropriations Committee on Education, and the Fiscal Research Division. The report shall contain at least all of the following information for the fiscal year: "(1) Number and description of projects awarded. "(2) Total cost of each project and amount supported by the Needs-Based Public School Capital Fund. "(3) Projections for local school administrative unit capital needs for the next 30 years, based upon present conditions and estimated demographic changes. "(4) Any legislative recommendations for improving the Needs-Based Public School Capital Fund program." Session Laws 2017-57, s. 1.1, provides: "This act shall be known as the 'Current Operations Appropriations Act of 2017.'" Session Laws 2017-57, s. 39.6, is a severability clause. Session Laws 2018-5, s. 5.3(f), provides "Subsection (a) of this section applies to lease agreements entered into on or after the effective date of this act [July 1, 2018]." Session Laws 2018-5, s. 1.1, provides: "This act shall be known as the 'Current Operations Appropriations Act of 2018.'" Session Laws 2018-5, s. 39.4, provides: "Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2018-2019 fiscal year, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2018-2019 fiscal year." Session Laws 2018-5, s. 39.7, is a severability clause. Effect of Amendments. - Session Laws 2005-344, s. 15.2, as added by Session Laws 2005-276, s. 31.1(hh), effective August 31, 2005, added subsection (d). Session Laws 2006-66, s. 7.15, effective July 1, 2006, substituted "rate, including any countywide supplemental taxes levied for the benefit of public schools" for "rate" in subdivision (d)(2)a. Session Laws 2006-259, s. 8(i), effective August 23, 2006, in subdivision (d)(2), substituted "State average effective" for "effective State average" in the middle of the introductory paragraph, and inserted "for the previous fiscal year" following "tax rate" in the middle of subdivision (d)(2)(a). Session Laws 2008-107, s. 7.18(a), effective July 1, 2008, in subsection (a), inserted the first two sentences and substituted "The remainder of the monies in" for "Monies" in the third sentence. Session Laws 2011-145, s. 5.4(h), as added by Session Laws 2011-391, s. 4, effective July 1, 2011, deleted "incurred on or after January 1, 2003" from the end of subdivision (d)(4). Session Laws 2013-316, s. 2.4(b), effective July 23, 2013, deleted subsection (a), which allocated the monies credited to the Fund by the Secretary of Revenue pursuant to G.S. 115C-546.1(b) . Session Laws 2013-360, s. 6.11(b), effective July 1, 2013, in the first paragraph of subsection (b), substituted "previously credited to the Fund by the Secretary of Revenue pursuant to G.S. 115C-546.1(b) " for "in the Fund" and deleted "that is approved pursuant to G.S. 115C-102.6 C" following "technology plan"; in subsection (c), inserted "previously credited to the Fund by the Secretary of Revenue pursuant to G.S. 115C-546.1(b) " in the first sentence, and "Such" preceding "monies" in the second sentence; rewrote the introductory paragraph of subsection (d), which formerly read "Monies transferred into the Fund in accordance with Chapter 18C of the General Statutes shall be allocated for capital projects for school construction projects as follows"; deleted subdivisions (d)(1) and (d)(2); and added subsection (e). Session Laws 2017-57, s. 5.3(f), effective July 1, 2017, added subsection (f).