2005 North Carolina Code - General Statutes Article 34B - Qualified Zone Academy Bonds.

Article 34B.

Qualified Zone Academy Bonds.

§ 115C‑489.5.  Qualified zone academy bonds; findings.

The General Assembly finds:

(1)       Section 226 of the Taxpayer Relief Act of 1997, as codified at 26 U.S.C. § 1397E, provides funds for school improvements through taxable qualified zone academy bonds. Ninety‑five percent (95%) or more of the proceeds of a qualified zone academy bond issue must be used for a qualified purpose with respect to a qualified zone academy established by an eligible local education agency.

(2)       Partnerships between private entities and local schools are promoted through the use of qualified zone academy bonds. Issuers must certify that they have received written commitments from one or more private entities to make qualified contributions valued at ten percent (10%) of the proceeds of the issue.

(3)       Eligible taxpayers may receive federal tax credits for holding the qualified zone academy bonds. It is intended that the qualified zone academy bonds be sold at par value so that the tax credits received are instead of interest that otherwise would have been paid on the bonds. Therefore, issuers of qualified zone academy bonds are obligated to repay the principal amount of the qualified zone academy bonds but need not make interest payments.

(4)       Applicable federal law limits the amount of qualified zone academy bonds that may be issued in North Carolina in a calendar year. (2000‑69, s. 1.)

 

§ 115C‑489.6.  Administration; consultation; issuance of bonds.

(a)       State Board of Education to Administer Program. – The State Board of Education is designated the State education agency responsible for administering the qualified zone academy bond program in North Carolina for the purposes of 26 U.S.C. § 1397E. The State Board of Education shall perform all activities required to implement and carry out the qualified zone activity bond program in North Carolina. Those activities include:

(1)       Defining those areas and schools that are eligible under federal law to participate in the qualified zone academy bond program in North Carolina.

(2)       Designing an application process under which proposals may be solicited from qualified zone academies.

(3)       Determining the eligibility of an applicant to be a participating qualified zone academy.

(4)       Awarding the State's allocation of total funds among selected applicants and establishing conditions upon the usage of the allocation. These conditions must include:

a.         Requiring that the bond proceeds be used only for rehabilitating or repairing the public school facility in which the qualified zone academy is located, which may include (i) wiring and other infrastructure improvements related to providing technology and (ii) equipment related to the rehabilitation or repair, but not personal computers or similar technology equipment.

b.         Conditions designed to assure that the allocation is used in a timely manner.

(5)       Confirming that the terms of any qualified zone academy bonds issued in accordance with this program are consistent with the terms of the federal program.

(b)       Assistance. – The Department of Public Instruction shall provide the State Board of Education any support it requires in carrying out this section.

(c)       Consultation. – In reviewing applications and awarding allocations, the State Board of Education shall consult with the Local Government Commission to determine whether a prospective issuer of qualified zone academy bonds is able to issue or incur marketable obligations.

(d)       Issuance of Bonds. – Any bonds designated as qualified zone academy bonds may be issued pursuant to the applicable provisions of and in compliance with the Local Government Bond Act, Article 4 of Chapter 159 of the General Statutes, or pursuant to the applicable provisions of and in compliance with G.S. 160A‑20, to the extent authorized by G.S. 153A‑158.1. As provided in G.S. 159‑123(b), bonds designated as qualified zone academy bonds to be issued pursuant to the Local Government Bond Act may be sold by the Local Government Commission at private sale. (2000‑69, s. 1.)