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 COUNTIES FOR PUBLIC SCHOOL CAPITAL OUTLAY 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 is the Public School Building Bond Act of 2002.
SECTION 2.(a)  Purpose. – It is the intent of the General Assembly by this act to provide for the issuance of six billion two hundred five million dollars ($6,205,000,000) general obligation bonds of the State to facilitate the providing of public school buildings by making grants to counties to provide funds for public school capital outlay projects.
SECTION 2.(b)  Revenue Source. – Notwithstanding any other provision of law, there is annually appropriated from the General Fund to the Public School Building Bonds Fund an amount equal to the amount that would otherwise have been distributed to local governments pursuant to the following sections of the General Statutes, repealed by Section 34.15 of S.L. 2001‑424, in the fiscal year their repeal becomes effective:
(1)	G.S. 105‑164.44C. Reimbursement for sales taxes on food stamp foods and supplemental foods.
(2)	G.S. 105‑275.1. Reimbursement for exclusion of manufacturers' inventories and poultry and livestock.
(3)	G.S. 105‑275.2. Reimbursement to counties and municipalities for repeal of State tax on intangible personal property.
(4)	G.S. 105‑277.001. Reimbursement for exclusion of retailers' and wholesalers' inventories.
(5)	G.S. 105‑277.1A. Property classified for taxation at reduced valuation; duties of tax collectors; reimbursement of localities for portion of tax lost.
These funds may be used only for debt service on the Public School Building Bonds authorized by this act. This subsection is repealed effective on the date that the State Treasurer certifies to the Office of State Budget and Management that the retirement of all outstanding obligations under this act has been provided for. Any funds appropriated under this subsection and not needed as of that date for debt service on the Public School Building Bonds authorized by this act revert to the General Fund.
SECTION 3.  Definitions. – The following definitions apply in this act:
(1)	Bonds. – Bonds issued under this act.
(2)	Cost. – Any of the following in financing the cost of public school capital outlay projects authorized by this act:
a.	The cost of constructing, reconstructing, enlarging, acquiring, and improving projects, 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. – 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. – Notes issued under this act.
(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:
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)	Public School Capital Outlay Projects. – The construction of new public school buildings or additions to existing buildings, the renovation of existing public school buildings, the purchase of equipment for a newly constructed public school building or addition, the purchase of equipment related to the improvement of an existing public school building, 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, trailers, relocatable classrooms, or mobile classrooms.
(7)	State. – The State of North Carolina.
SECTION 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 six billion two hundred five million dollars ($6,205,000,000) for the purposes authorized in this act.  The principal amounts of bonds or notes issued in any 12‑month period shall not exceed one billion two hundred forty‑one million dollars ($1,241,000,000).  In determining whether this limit has been reached, the issuance of a note or bond to pay an outstanding note is not considered an issuance.
SECTION 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 counties for paying the cost of public school capital outlay projects. 
Any additional moneys that may be received by means of a grant from the United States of America or any of its agencies or departments or from any other source to aid in financing the cost of any public school capital outlay 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, without regard to any limitations imposed by this act.
Moneys in the Public School Building Bonds Fund or in any separate fund or account may be invested from time to time by the State Treasurer in the same manner permitted for investment of moneys 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, and any investment earnings shall be credited to the Public School Building Bonds Fund or the particular fund or account from which the investment was made.
All moneys deposited in, or accruing to the credit of, the Public School Building Bonds Fund, other than moneys set aside for administrative expenses, including expenses related to determining compliance with applicable requirements of the federal tax law and cost of issuance, shall be used to pay the cost of public school capital outlay projects in the manner authorized 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 capital outlay 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 capital outlay 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 Superintendent of Public Instruction, and the General Assembly on the expenditure of moneys from the Public School Building Bonds Fund. Reports to the General Assembly shall be filed with the Legislative Library, the Speaker of the House of Representatives, the President Pro Tempore of the Senate, and the Fiscal Research Division.
SECTION 6.(a)  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 to counties and expended for paying the cost of public school capital outlay projects, to the extent and as provided in this act and subject to change as provided in this act.
SECTION 6.(b)  Amounts. – The proceeds of six billion two hundred five million dollars ($6,205,000,000) Public School Building Bonds and notes shall be allocated to each county on the basis of the distribution amounts provided in the following table for the local school administrative units in the State.  In the case of a local school administrative unit located entirely in one county, the unit's total distribution amount shall be allocated to that county.  In the case of a local school administrative unit located in more than one county, the unit's distribution amount shall be allocated among the counties in which the unit is located in proportion to average daily membership of the unit in each county.  A unit's distribution amount allocated to a county may be used only with respect to public school facilities of that unit.

Unit	New	Additions	Renovations	Furn/Eqpt	Land	Total
Alamance‑Burlington	$27,527,247	$38,519,390	$87,190,266	$6,417,732	$1,315,000	$160,969,635
Alexander Co.	6,389,009	12,115,702	274,512	1,884,416	0	20,663,639
Alleghany Co.	0	6,764,609	1,929,706	559,270	6,500	9,260,085
Anson Co.	0	7,796,073	1,431,698	777,901	0	10,005,672
Ashe Co.	7,990,278	388,486	4,477,538	781,414	0	13,637,716
Avery Co.	5,133,771	5,822,630	4,461,960	1,231,500	975,000	17,624,861
Beaufort Co.	26,457,710	18,369,636	8,157,686	4,283,020	102,000	57,370,052
Bertie Co.	23,440,079	8,472,363	6,802,607	2,866,681	518,000	42,099,730
Bladen Co.	0	5,597,636	1,835,115	469,802	0	7,902,553
Brunswick Co.	7,552,455	4,558,358	32,301,237	1,098,574	360,000	45,870,624
Buncombe Co.	0	3,177,985	7,659,660	266,723	0	11,104,368
Asheville City	0	7,657,283	8,060,245	1,817,065	0	17,534,593
Burke Co.	72,377,563	16,261,762	570,000	8,209,443	1,200,000	98,618,768
Cabarrus Co.	45,012,900	0	0	4,340,136	0	49,353,036
Kannapolis City	14,971,237	3,281,038	940,500	1,633,774	700,000	21,526,549
Caldwell Co.	37,213,318	6,251,688	9,500,361	4,051,767	1,170,000	58,187,134
Camden Co.	0	2,928,569	597,075	400,791	0	3,926,435
Carteret Co.	17,865,522	1,250,348	16,991,928	1,852,238	0	37,960,036
Caswell Co.	0	6,611,569	3,230,071	622,883	0	10,464,523
Catawba Co.	49,850,549	17,388,581	4,003,338	6,390,714	290,000	77,923,182
Hickory City	20,109,262	5,588,702	9,173,632	2,343,711	1,181,647	38,396,954
Newton Conover City	6,317,207	6,508,085	212,610	1,360,240	0	14,398,142
Chatham Co.	43,015,891	6,061,995	490,200	4,399,484	2,080,500	56,048,070
Cherokee Co.	0	23,213,394	9,793,487	2,794,967	2,234,992	38,036,840
Chowan Co.	0	4,428,049	5,419,156	389,645	0	10,236,850
Clay Co.	0	3,585,477	1,268,250	300,924	0	5,154,651
Cleveland Co.	0	43,610,028	13,144,456	3,969,502	0	60,723,986
Kings Mountain District	0	3,063,210	10,105,945	2,827,538	250,000	16,246,693
Shelby City	0	3,623,128	9,116,230	1,083,270	0	13,822,628
Columbus Co.	0	22,179,049	21,656,808	1,926,402	40,000	45,802,259
Whiteville City	16,083,386	747,521	0	1,466,449	0	18,297,356
Craven Co.	38,194,898	17,885,495	47,282,333	5,062,388	1,260,000	109,685,114
Cumberland Co.	7,207,506	30,517,596	17,415,736	3,533,073	485,000	59,158,911
Currituck Co.	4,876,389	4,826,370	7,124,186	1,475,201	100,000	18,402,146
Dare Co.	26,932,131	2,046,221	10,792,905	3,581,949	0	43,353,206
Davidson Co.	55,775,200	5,205,900	0	10,142,965	2,700,000	73,824,065
Lexington City	0	4,881,908	4,733,812	718,532	0	10,334,252
Thomasville City	0	5,923,124	7,333,192	1,997,119	400,000	15,653,435
Davie Co.	40,716,320	10,713,685	3,088,773	4,862,542	1,080,000	60,461,320
Duplin Co.	0	22,029,657	16,674,780	2,245,922	30,000	40,980,359
Durham Public	31,399,303	46,962,981	84,341,951	9,562,563	2,000,000	174,266,798
Edgecombe Co.	18,729,543	26,022,394	23,395,218	4,626,789	595,000	73,368,944
Forsyth Co.	79,087,432	0	81,338,995	7,325,531	2,825,000	170,576,958
Franklin Co.	16,884,150	13,827,746	6,308,061	3,871,638	788,655	41,680,250
Gaston Co.	27,302,805	87,441,531	70,683,793	12,075,202	320,000	197,823,331
Gates Co.	0	14,769,899	6,961,310	1,703,453	0	23,434,662
Graham Co.	0	3,838,858	0	358,147	0	4,197,005
Granville Co.	0	16,675,049	6,519,665	1,699,513	0	24,894,227
Greene Co.	8,197,605	6,979,353	4,700,479	1,582,585	340,000	21,800,022
Guilford Co. Public	15,864,612	110,066,453	175,753,694	50,305,762	0	351,990,521
Halifax Co.	15,489,359	13,123,245	3,229,418	2,718,810	0	34,560,832
Roanoke Rapids City	9,832,871	5,224,220	5,554,523	2,154,790	500,000	23,266,404
Weldon City	0	494,123	0	41,471	0	535,594
Harnett Co.	56,623,873	0	0	5,322,030	0	61,945,903
Haywood Co.	0	23,054,978	33,680,286	2,243,976	260,000	59,239,240
Henderson Co. Public	9,312,836	16,742,962	4,868,370	2,785,759	255,000	33,964,927
Hertford Co.	0	29,873,591	13,848,925	3,335,010	0	47,057,526
Hoke Co.	0	16,889,440	6,251,366	2,632,163	300,000	26,072,969
Hyde Co.	0	3,700,539	285,000	310,581	0	4,296,120
Iredell Statesville	67,458,984	46,364,313	7,716,916	11,262,139	3,377,500	136,179,852
Mooresville City	6,345,340	971,222	0	738,450	0	8,055,012
Jackson Co.	0	396,788	0	33,302	0	430,090
Johnston Co.	118,088,731	21,649,760	14,497,836	18,196,476	4,245,000	176,677,803
Jones Co.	24,169,373	1,801,093	0	2,449,760	135,000	28,555,226
Lee Co.	43,492,142	1,232,806	3,987,079	4,045,368	1,400,000	54,157,395
Lenoir Co. Public	14,723,348	4,505,117	25,855,441	4,445,931	480,000	50,009,837
Lincoln Co.	50,800,513	3,657,756	2,183,100	5,174,423	2,750,000	64,565,792
Macon Co.	6,776,577	16,092,213	3,122,653	2,431,985	474,000	28,897,428
Madison Co.	0	1,507,234	1,341,210	484,501	0	3,332,945
Martin Co.	9,089,680	13,076,213	6,385,476	1,987,286	255,000	30,793,655
McDowell Co.	21,149,993	4,898,612	0	2,501,540	525,987	29,076,132
Charlotte
	Mecklenburg	83,085,716	370,590,858	196,079,744	46,178,506	11,820,000	707,754,824
Mitchell Co.	0	2,099,759	6,662,541	504,230	0	9,266,530
Montgomery Co.	7,207,506	4,374,239	2,279,772	1,075,941	0	14,937,458
Moore Co.	0	12,612,202	14,663,770	1,078,138	0	28,354,110
Nash Rocky Mount 
	Sch Adm Unit	19,777,466	4,907,677	13,987,821	2,488,680	0	41,161,644
New Hanover Co.	28,782,333	34,527,264	103,852,682	18,281,104	2,000,000	187,443,383
Northampton Co.	6,160,525	3,562,459	12,362,274	3,554,012	160,000	25,799,270
Onslow Co.	16,548,103	29,563,990	18,625,935	4,240,224	699,960	69,678,212
Orange Co.	16,653,378	0	10,645,389	5,821,778	361,000	33,481,545
Chapel Hill Carrboro	18,682,818	4,397,820	21,836,782	2,161,694	0	47,079,114
Pamlico Co.	0	387,153	800,462	102,493	0	1,290,108
Elizabeth City/
	Pasquotank	19,463,771	1,661,517	24,688,141	2,298,341	750,000	48,861,770
Pender Co.	7,487,423	9,792,087	8,656,875	2,046,037	0	27,982,422
Perquimans Co.	23,155,792	0	1,572,760	2,149,624	195,000	27,073,176
Person Co.	0	1,599,009	5,829,505	134,203	0	7,562,717
Pitt Co.	19,379,782	24,807,441	21,281,025	4,160,113	220,000	69,848,361
Polk Co.	10,009,341	1,851,021	2,772,803	1,078,142	0	15,711,307
Randolph Co.	0	36,900,992	0	3,958,060	0	40,859,052
Asheboro City	0	4,365,832	3,048,973	526,218	0	7,941,023
Richmond Co.	5,627,268	23,855,899	19,830,442	2,992,679	0	52,306,288
Robeson Co.	6,416,245	4,025,817	0	1,113,096	175,000	11,730,158
Rockingham Co.	33,321,064	3,736,976	3,320,616	3,596,445	1,020,200	44,995,301
Rowan Salisbury	20,998,266	64,297,709	16,650,506	12,176,255	1,410,000	115,532,736
Rutherford Co.	27,205,595	1,727,034	1,835,400	2,933,436	0	33,701,465
Sampson Co.	54,561,201	9,144,467	7,071,477	5,765,133	0	76,542,278
Clinton City	11,517,028	2,910,438	7,359,744	1,270,570	90,000	23,147,780
Scotland Co.	0	15,333,356	15,715,275	2,707,059	0	33,755,690
Stanly Co.	52,133,801	10,014,810	2,685,099	5,938,667	500,000	71,272,377
Stokes Co.	19,036,396	5,465,870	1,860,981	2,778,621	290,000	29,431,868
Surry Co.	20,236,863	38,444,736	11,617,295	8,767,256	670,000	79,736,150
Elkin City	0	4,142,290	3,209,100	284,129	0	7,635,519
Mount Airy City	0	867,132	4,876,829	72,777	0	5,816,738
Swain Co.	0	5,268,598	11,288,843	422,189	0	16,979,630
Transylvania Co.	0	0	2,970,604	315,000	0	3,285,604
Tyrrell Co.	0	7,252,727	3,233,795	579,105	100,000	11,165,627
Union Co. Public	48,938,112	11,045,667	9,636,924	5,194,659	7,250,000	82,065,362
Vance Co.	23,588,223	8,647,281	12,454,906	3,278,790	120,000	48,089,200
Wake Co.	134,732,392	35,571,472	138,747,226	21,134,747	12,400,000	342,585,837
Warren Co.	0	8,133,815	2,079,854	682,660	0	10,896,329
Washington Co.	394,041	1,437,450	0	300,173	0	2,131,664
Watauga Co.	21,666,666	383,320	2,887,912	1,831,383	3,310,000	30,079,281
Wayne Co. Public	9,089,680	23,300,063	7,725,484	3,067,499	300,000	43,482,726
Wilkes Co.	0	23,509,069	16,907,920	2,239,346	0	42,656,335
Wilson Co. 	9,838,242	5,244,636	3,670,943	1,545,651	0	20,299,472
Yadkin Co.	0	27,179,333	3,270,651	3,848,880	530,000	34,828,864
Yancey Co.	4,877,082	2,768,752	1,868,346	1,069,421	560,000	11,143,601
Reserve for Cost Overruns						896,266
Totals	$2,032,401,017	$1,843,402,826	$1,770,476,185	$472,587,765	$85,235,941	$6,205,000,000

If two or more local school administrative units are consolidated into one unit, the distribution amounts provided above for the units shall be considered the distribution amount for the merged unit.
SECTION 6.(c)  Match. – A county is not required to match bond proceeds allocated under subsection (b) of this section. 
SECTION 6.(d)  Administration. – Funds disbursed under this act shall be administered and supervised by the State Board of Education and shall be used only for the purposes provided in this act. Each school administrative unit shall submit to the State Board of Education its plans for the expenditure of funds allocated under this act. After the State Board of Education 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 State Board of Education 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.
SECTION 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 general election to be held in November 2002.  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 section 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 shall be held under and in accordance with the general laws of the State.  Absentee ballots shall be authorized in the election.
Ballots, voting systems authorized by Article 14 of Chapter 163 of the General Statues, 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 six billion two hundred five million dollars ($6,205,000,000) 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 to counties, with any other available funds, to pay the cost of public school building capital improvements."
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.
SECTION 8.(a)  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.
SECTION 8.(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.
SECTION 8.(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.
SECTION 8.(d)  Notes; Repayment.
(1)	By and with the consent of the Council of State, the State Treasurer is 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.
SECTION 8.(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.
SECTION 8.(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.
SECTION 8.(g)  Investment Eligibility. – Bonds and notes are 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 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.
SECTION 8.(h)  Faith and Credit. – The faith and credit and taxing power of the State are pledged for the payment of the principal of and the interest on bonds and notes.
SECTION 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.
SECTION 10.  Other Agreements. – The State Treasurer may authorize, execute, obtain, or otherwise provide for bond insurance, investment contracts, credit and liquidity facilities, interest rate swap agreements and other derivative products, and any other related instruments and matters the State Treasurer determines to be desirable in connection with the issuance of bonds and notes.
SECTION 11.(a)  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.
SECTION 11.(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.
SECTION 11.(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.
SECTION 11.(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.
SECTION 11.(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.
SECTION 12.  Local Property Taxes. – The General Assembly recognizes that the State's numerous forms of assistance to local governments in funding school facilities and other needs in the past 30 years have led to a substantial reduction in local property tax rates.  It is the intent of the General Assembly that the assistance provided in this act, if approved by the voters, shall further reduce local property tax rates.
SECTION 13.  Effective Dates. – This act is effective when it becomes law.  This act does not obligate the General Assembly to appropriate funds.