H. B. 2002
(By Delegate Kiss)
[Introduced February 10, 1993; referred to the
Committee on Education then Finance.]
A BILL to amend and reenact sections three, five, six, eight,
nine, thirteen, fifteen and sixteen, article nine-d, chapter
eighteen of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, relating to the school
building authority; the powers of the authority; the
offering of individual higher education savings plans and
the issuance of revenue bonds; tax treatment of the bonds;
providing that the school building capital improvements fund
be maintained by the authority in a banking institution
selected by the authority instead of in the state treasury;
issuance of revenue refunding bonds; sinking fund for
payment of bonds; legislative intent; and distribution of
money.
Be it enacted by the Legislature of West Virginia:
That sections three, five, six, eight, nine, thirteen,
fifteen and sixteen, article nine-d, chapter eighteen of the code
of West Virginia, one thousand nine hundred thirty-one, asamended, be amended and reenacted to read as follows:
ARTICLE 9D. SCHOOL BUILDING AUTHORITY.
§18-9D-3. Powers of authority.
The school building authority has the power:
(1) To sue and be sued, plead and be impleaded;
(2) To have a seal and alter the same at pleasure;
(3) To contract to acquire and to acquire, in the name of
the authority by purchase, lease-purchase, or otherwise, real
property or rights or easements necessary or convenient for its
corporate purposes and to exercise the power of eminent domain to
accomplish such purposes;
(4) To acquire, hold and dispose of real and personal
property for its corporate purposes;
(5) To make bylaws for the management and rule of its
affairs;
(6)
With the consent of the attorney general of the state of
West Virginia, to use the facilities, office, assistants and
employees of the attorney general in all legal matters relating
to or pertaining to the authority To appoint, contract with and
employ attorneys, bond counsel, accountants, construction and
financial experts, underwriters, financial advisers, trustees,
managers, officers and such other employees and agents as may be
necessary in its judgment and to fix their compensation;
(7) To appoint officers, agents and employees and fix their
compensation;
(8) (7) To make contracts and to execute all instrumentsnecessary or convenient to effectuate the intent of, and to
exercise the powers granted to it by this article;
(9) (8) To renegotiate all contracts entered into by it
whenever, due to a change in situation, it appears to the
authority that its interests will be best served;
(10) (9) To acquire by purchase, eminent domain or otherwise
all real property or interests therein necessary or convenient to
accomplish the purposes of this article;
(11) (10) To require proper maintenance and insurance of any
project authorized hereunder;
(12) (11) To charge rent for the use of all or any part of
a project or buildings at any time financed, constructed,
acquired or improved in whole or in part with the revenues of the
authority;
(13) (12) To acquire land, buildings and capital
improvements to existing school buildings and property, by lease
from a private or public lessor for a term not to exceed
twenty-five years, with or without an option to purchase pursuant
to an investment contract with said lessor, for use as public
school facilities on such terms and conditions as may be
determined to be in the best interests of the authority and
consistent with the purposes of this article;
(14) (13) To accept and expend any gift, grant,
contribution, bequest or endowment of money to, or for the
benefit of, the authority, from the state of West Virginia or any
other source for any or all of the purposes specified in thisarticle or for any one or more of such purposes as may be
specified in connection with such gift, grant, contribution,
bequest or endowment;
(15) (14) To enter on any lands and premises for the purpose
of making surveys, soundings and examinations;
(16) (15) To contract for architectural, engineering or
other professional services considered necessary or economical by
the authority to provide consultative or other services to the
authority or to any regional educational service agency or county
board requesting professional services offered by the authority,
to evaluate any facilities plan or any project encompassed
therein, to inspect existing facilities or any project that has
received or may receive funding from the authority, or to perform
any other service considered by the authority to be necessary or
economical. Assistance to the region or district may include the
development of preapproved systems, plans, designs, models or
documents; advice or oversight on any plan or project; or any
other service that may be efficiently provided to regional
educational service agencies or county boards by the authority;
and
(17) (16) To do all things necessary or convenient to carry
out the powers given in this article.
§18-9D-5. School building authority authorized to offer
individual higher education savings plans.
(a)
Legislative findings. -- The Legislature hereby finds
and declares that:
(1) It is an essential function of state government to
encourage post secondary education in order to have well-educated
citizens.
(2) Tuition costs at institutions of higher education are
difficult for many to afford and are difficult to predict in
order to enable individuals and families to plan.
(3) It is in the best interest of the people of this state
to encourage state residents desiring a public higher education
to enroll in state public institutions of higher learning and to
enhance and foster the ability of West Virginia residents to
choose an independent institution of higher education in order to
provide well-educated citizens and to encourage state residents
desiring an independent higher education to enroll in an
independent degree-granting college or university.
(4) Students in elementary and secondary schools tend to
achieve a higher standard of performance when the payment of
tuition for their higher education is secured.
(5) Providing assistance to assure the higher education of
citizens of this state is necessary and desirable for the public
health, safety and welfare.
(b) Purpose. -- In light of the findings described in
subsection (a) of this section and in light of the purposes of
this article, the Legislature declares that the purpose of this
section is to encourage education and the means of obtaining an
education by: (1) Authorizing establishment of individual higher
education savings plan programs; and (2) providing for the fundsinvested in this program through the purchase of state building
authority revenue bonds to be used to make capital improvements
to primary and secondary educational facilities in this state, as
provided in this article.
(c) Authorization. -- The state school building authority is
authorized to offer to the general public one or more individual
higher education savings plan programs. In order to establish,
operate and maintain an efficient and effective program or
programs, the state school building authority shall have such
additional powers as are necessary or reasonably desirable to
implement such a program or programs. These additional powers
shall include, but are not limited to, the power to:
(1) Issue revenue bonds under this article.
(2) Permit employees to purchase bonds through payroll
deductions by their employer.
(3) Offer different classes of bonds and different bond
terms which take into consideration the short term nature and
purpose of an individual participating in an individual higher
education savings plan program.
(4) Offer a rate of interest on bonds purchased under this
program which encourages maximum participation.
(5) Execute a separate trust agreement under section twelve
of this article for bonds sold pursuant to an individual higher
education savings plan program established under this section.
(d) Construction. -- Other sections of this article which
apply generally to bonds issued under this article shall apply tothe revenue bonds issued under this section. If any language in
this section conflicts with language in another section of this
article, the language of this section shall control unless such
a construction would be unlawful, or would not be in the public
interest, or would be contrary to the statements of finding and
purpose in this section.
(e) Tax treatment. --
(1) The amount which an individual invests during his
taxable year in the purchase of revenue bonds issued under this
section shall be allowed as a deduction from federal adjusted
gross income for the year for purposes of the tax imposed by
article twenty-one, chapter eleven of this code, except as
provided in subdivision (3) of this subsection.
(2) The interest which an individual earns on revenue bonds
issued under this section shall not be subject to the tax imposed
by article twenty-one, chapter eleven of this code, except as
provided in subdivision (3) of this subsection.
(3) If the owner of a bond purchased under this section
sells the bond, receives the proceeds of the bond at maturity or
otherwise redeems the bond and does not spend the entire amount
of such proceeds for tuition and fees, books, reasonable room and
board and child care to enable a person to attend an institution
which is accredited to award higher education degrees by the
state of West Virginia or another state, such proceeds not so
spent shall be taxed under article twenty-one, chapter eleven of
this code, by application of the applicable rate to the taxpayerto the amount not so spent. Additionally, a penalty equal to ten
percent of the tax due shall be imposed. The amount of tax and
penalty so imposed shall be due and payable on the fifteenth day
of the fourth month of the fifth taxable year immediately
succeeding the taxable year in which the bond was sold or the
proceeds of such bond were received at maturity or the bond was
otherwise redeemed.
(f) Reports. -- The school building authority and the
trustee of an individual higher education savings plan program
shall make such reports regarding such bonds to the tax
commissioner and to the individuals of record who own the bonds
with respect to bond principal and interest (and the years to
which they relate) and such other matters as the tax commissioner
may require. The reports required by this section shall be filed
with the tax commissioner at least annually, at such time and in
such manner as the tax commissioner may by regulation require.
(1) It is an essential function of state government to
encourage postsecondary education in order to increase the
education level of the residents of the state of West Virginia.
(2) Tuition, fee and other costs at institutions of higher
education are difficult for many to afford and are difficult to
predict in order to enable individuals and families to plan for
the payment of such costs.
(3) Students in elementary and secondary schools tend to
achieve a higher standard of performance when the payment of
tuition, fees and other costs for their higher education issecured.
(4) It is in the best interest of the people of the state of
West Virginia and is necessary for the public health, safety and
welfare to encourage state residents desiring a higher education
to enroll in institutions of higher education in order to provide
well-educated and informed citizens.
(b) Purpose. -- In light of the findings described in
subsection (a) of this section and in light of the purposes of
this article, the Legislature declares that the purpose of this
section is to encourage higher education and the means of paying
costs relating thereto by (1) authorizing establishment of higher
education savings plan programs; and (2) providing funding for
such programs through the sale and purchase of school building
authority revenue bonds to be used to make capital improvements
for primary and secondary educational facilities in this state,
or through the sale and purchase of refunding revenue bonds, as
provided in this article.
(c) Authorization. -- The school building authority is
authorized to offer to the general public one or more higher
education savings plan programs. In order to establish, operate
and maintain an efficient and effective program or programs, the
school building authority shall have such additional powers as
are necessary or reasonably desirable to implement such a program
or programs. These additional powers shall include, but are not
limited to, the power to:
(1) Permit employees to purchase bonds of not less than onethousand dollar maturity increments when issued pursuant to this
section.
(2) As deemed appropriate and practical, offer subsequent
bond issues which take into consideration the various needs of
different individuals participating in a higher education savings
plan program.
(3) Offer a rate or rates of interest on bonds purchased
pursuant to such a program which encourages maximum
participation.
(4) Execute a separate trust agreement or agreements under
section twelve of this article for bonds sold pursuant to an
individual higher education savings plan program established
under this section.
(5) Transfer available moneys of the school building
authority, including revenues, investment earnings on funds or
accounts established in connection with the issuance of bonds and
moneys available from any other source, to funds or accounts as
may be necessary or desirable in establishing a higher education
savings plan program, including, but not limited to, escrow
funds, investment agreements or similar instruments.
(6) Establish program guidelines for the administration of
a higher education savings plan program.
(d) Construction. -- Other sections of this article which
apply generally to bonds issued under this article shall apply to
the revenue bonds or refunding revenue bonds issued under this
section. If any language in this section conflicts with languagein another section of this article, the language of this section
shall control unless such a construction would be unlawful, or
would not be in the public interest, or would be contrary to the
statements of finding and purpose of this section.
(e) Tax treatment. --
(1) The amount which an individual expends during a taxable
year in the purchase of revenue bonds or refunding revenue bonds
issued pursuant to this section shall be allowed as a deduction
from federal adjusted gross income for such year, or, if not
fully deducted during such year, for the remaining four years,
until fully deducted, for purposes of the tax imposed by article
twenty-one, chapter eleven of this code, except as provided in
subdivision (3) of this subsection.
(2) The interest which an individual earns on revenue bonds
or refunding revenue bonds issued under this section shall not be
subject to the tax imposed by article twenty-one, chapter eleven
of this code, except as provided in subdivision (3) of this
subsection.
(3) If the owner of a revenue bond or refunding revenue
bonds purchased under this section sells it or receives the
proceeds of such bond at maturity or otherwise during a taxable
year and does not, within four years of the date of such sale or
other disposition, expend an amount equal to such proceeds for
tuition, fees, books, and reasonable room and board necessary to
enable a person to attend an institution of higher education,
such proceeds of sale or other disposition not so spent shall betaxed under article twenty-one, chapter eleven of this code, by
application of the applicable rate to the taxpayer to the amount
not so spent. The amount of tax imposed shall be due and payable
on the fifteenth day of April of the taxable year immediately
succeeding the fourth taxable year in which the bond was sold or
otherwise disposed of.
(f) Reports. -- The school building authority and the
indenture trustee of an individual higher education savings plan
program shall make such reports regarding such bonds to the tax
commissioner and to the individuals of record who own the bonds
with respect to bond principal and interest (and the years to
which they relate) and such other matters as the tax commissioner
may reasonably require. The reports required by this section
shall be filed with the tax commissioner at least annually, at
such time and in such manner as the tax commissioner may by
regulation require.
§18-9D-6. School building capital improvements fund; collections
to be paid into special fund; authority to pledge such
collections as security for revenue bonds; authority to
finance projects on a cash basis.
There is created
in the state treasury a school building
capital improvements fund to be expended by the authority for the
purposes of this article.
The fund shall be maintained by the
authority in a banking institution chosen by the authority.
Notwithstanding anything in this article to the contrary, the
authority may, by resolution of the authority, direct the statetreasurer to transfer to the school building capital improvements
fund maintained in the banking institution chosen by the
authority moneys which have been deposited in the state treasury
prior to the effective date of this section in accordance with
sections eight, nine and thirteen of this article.
The school building authority shall have authority to pledge
all or such part of the revenues paid into the school building
capital improvements fund as may be needed to meet the
requirements of any revenue bond issue or issues authorized by
this article, including the payment of principal, interest and
redemption premium, if any, on such revenue bonds and the
establishing and maintaining of a reserve fund or funds for the
payment of the principal, interest and redemption premium, if
any, on such revenue bond issue or issues when other moneys
pledged may be insufficient therefor, including such additional
protective pledge of revenues as the authority in its discretion
may provide by resolution authorizing the issue of such bonds and
in any trust agreement made in connection therewith. The
authority may further provide in such resolution and in such
trust agreement for such priorities on the revenues paid into
such school building capital improvements fund as may be
necessary for the protection of the prior rights of the holders
of bonds issued at different times under the provisions of this
article.
Any balance remaining in the school building capital
improvements fund after the authority has issued bonds authorizedby this article, and after the requirements of all funds
including reserve funds established in connection with the bonds
issued pursuant to this article have been satisfied, may be used
for the redemption of any of the outstanding bonds issued
hereunder which by their terms are then redeemable, or for the
purchase of such bonds at the market price, but not exceeding the
price, if any, at which such bonds shall in the same year be
redeemable, and all bonds redeemed or purchased shall forthwith
be canceled and shall not again be issued.
The school building authority, in its discretion, may use
the moneys in the school building capital improvements fund to
finance the cost of projects on a cash basis. Any pledge of
moneys in such fund for revenue bonds shall be a prior and
superior charge on such fund over the use of any of the moneys in
such fund to pay for the cost of any project on a cash basis:
Provided, That any expenditures from such fund, other than for
the retirement of revenue bonds, may only be made by the
authority in accordance with the provisions of this article.
§18-9D-8. Issuance of revenue bonds; use of proceeds; bonds
exempt from taxation.
The issuance of revenue bonds under the provisions of this
article shall be authorized from time to time by resolution or
resolutions of the school building authority, which shall set
forth the proposed projects and provide for the issuance of bonds
in amounts sufficient, when sold as hereinafter provided, to
provide moneys
deemed considered sufficient by the authority topay such costs, less the amounts of any other funds available for
said costs or from any appropriation, grant or gift therefor:
Provided, That bond
revenues issues from which bond revenues are
to be distributed in accordance with section fifteen of this
article shall not be required to set forth the proposed projects
in the resolution. Such resolution shall prescribe the rights
and duties of the bondholders and the school building authority,
and for such purpose may prescribe the form of the trust
agreement hereinafter referred to. The bonds may be issued from
time to time, in such amounts, shall be of such series, bear such
date or dates, mature at such time or times not exceeding forty
years from their respective dates, bear interest at such rate or
rates; be in such denominations; be in such form, either coupon
or registered, carrying such registration, exchangeability and
interchangeability privileges; be payable in such medium of
payment and at such place or places within or without the state;
be subject to such terms of redemption at such prices not
exceeding one hundred five percent of the principal amount
thereof; and be entitled to such priorities on the revenues paid
into the school building authority capital improvements fund as
may be provided in the resolution authorizing the issuance of the
bonds or in any trust agreement made in connection therewith.
The bonds shall be signed by the governor, and by the president
or vice president of the authority, under the great seal of the
state, attested by the secretary of state, and the coupons
attached thereto shall bear the facsimile signature of thepresident or vice president of the authority. In case any of the
officers whose signatures appear on the bonds or coupons cease to
be such officers before the delivery of such bonds, such
signatures shall nevertheless be valid and sufficient for all
purposes the same as if such officers had remained in office
until such delivery. Such revenue bonds shall be sold in such
manner as the authority may determine to be for the best
interests of the state.
Any pledge of revenues for such revenue bonds made by the
school building authority shall be valid and binding between the
parties from the time the pledge is made; and the revenues so
pledged shall immediately be subject to the lien of such pledge
without any further physical delivery thereof or further act.
The lien of such pledge shall be valid and binding against all
parties having claims of any kind in tort, contract or otherwise,
irrespective of whether such parties have notice of the lien of
such pledge, and such pledge shall be a prior and superior charge
over any other use of such revenues so pledged.
The proceeds of such bonds shall be used solely for the
purpose or purposes as may be generally or specifically set forth
in the resolution authorizing those bonds and shall be
deposited
in the state treasury in a special fund to be dispursed as
provided by law for the disbursement of any other state funds
disbursed in such manner and with such restrictions, if any, as
the authority may provide in the resolution authorizing the
issuance of such bonds or in the trust agreement hereinafterreferred to securing the same. If the proceeds of such bonds, by
error in calculations or otherwise, shall be less than the cost
of any projects specifically set forth in the resolution,
additional bonds may in like manner be issued to provide the
amount of the deficiency; and unless otherwise provided for in
the resolution or trust agreement hereinafter mentioned, such
additional bonds shall be considered to be of the same issue,
and shall be entitled to payment from the same fund, without
preference or priority, as the bonds before issued for such
projects. If the proceeds of bonds issued for such projects
exceed the cost thereof, the surplus may be used for such other
projects as the school building authority may determine or in
such other manner as the resolution authorizing such bonds may
provide. Prior to the preparation of definitive bonds, the
authority may, under like restrictions, issue temporary bonds
with or without coupons, exchangeable for definitive bonds upon
the issuance of such definitive bonds.
After the issuance of any of such revenue bonds, the
revenues pledged therefor shall not be reduced as long as any of
such revenue bonds are outstanding and unpaid except under such
terms, provisions and conditions as shall be contained in the
resolution, trust agreement or other proceedings under which such
revenue bonds were issued.
Such revenue bonds and the revenue refunding bonds, and
bonds issued for combined purposes shall, together with the
interest thereon, be exempt from all taxation by the state ofWest Virginia, or by any county, school district, municipality or
political subdivision thereof.
§18-9D-9. Issuance of revenue refunding bonds; use of moneys;
power to enter into escrow agreements; call for redemption.
The issuance of revenue refunding bonds under the provisions
of this article shall be authorized by resolution of the school
building authority and shall otherwise be subject to the
limitations, conditions and provisions of other revenue bonds
under this article. Such revenue refunding bonds may be issued
in an amount at the option of the authority sufficient to pay
either in
part or in full,
or together with interest earned on
the investment of the proceeds thereof, whether or not at the
time of the issuance of the revenue refunding bonds the hereafter
mentioned bonds are payable or callable for optional redemption:
(1)
The principal of such outstanding bonds; (2) the redemption
premium, if any, on such outstanding bonds
or the prior
redemption thereof; if they are to be redeemed prior to maturity;
(2) (3) the interest due and payable on such outstanding bonds to
and including
the maturity date thereof or the first date upon
which said outstanding bonds are
callable prior to maturity, not
exceeding, however, ten years from the date of issuance of such
revenue refunding bonds, or the dates upon which the principal of
said outstanding bonds mature before such first date on which the
same are callable prior to maturity, to be redeemed, including
any interest theretofore accrued and unpaid; and
(3) (4) all
expenses of the issuance and sale of said revenue refundingbonds, including all necessary financial and legal expenses, and
also including the creation of initial debt service reserve
funds. Any
revenues existing moneys pledged with respect to the
outstanding bonds may be used for any or all of the purposes
stated in (1), (2),
and (3),
and (4) above or may be deposited in
a sinking fund or reserve fund or other funds for the issue of
bonds which have been issued wholly or in part for the purpose of
such refunding. Such amount of the proceeds of the revenue
refunding bonds as shall be sufficient for the payment of the
principal, interest and redemption premium, if any, on such
outstanding bonds which will not be immediately due and payable
shall be deposited in trust,
in the banking institution chosen by
the authority, for the sole purpose of making such payments,
with
the treasurer of the state of West Virginia as the authority may
provide in the resolution authorizing the issuance of such bonds
or in the trust agreement securing the same. Any of the moneys
so deposited in trust may, prior to the date on which such moneys
will be needed for the payment of principal of, interest and
redemption premium, if any, on such outstanding bonds, be
invested and reinvested as determined by the authority, in whole
or in part: (a) In direct obligations issued by the United
States of America or one of its agencies or in direct obligations
of the state of West Virginia; (b) in obligations unconditionally
guaranteed by the United States of America as to principal and
interest; or (c) in certificates of deposit of a banking
corporation or association which is a member of the federaldeposit insurance corporation, or successor; but any such
certificates of deposit must be fully secured as to both
principal and interest by pledged collateral consisting of direct
obligations of or obligations guaranteed by the United States of
America, or direct obligations of the state of West Virginia,
having a market value, excluding accrued interest, at all times
at least equal to the amount of the principal of and accrued
interest on such certificates of deposit. Any such investments
must mature, or be payable in advance of maturity at the option
of the holder, and must bear interest in such manner as to
provide funds which, together with uninvested money, will be
sufficient to pay when due or called for redemption the bonds
refunded, together with interest accrued and to accrue thereon
and redemption premiums, if any, and such refunding bonds'
proceeds or obligations so purchased therewith shall be deposited
in escrow and held in trust for the payment and redemption of the
bonds refunded:
Provided, That if interest earned by any
investment in such escrow is shown to be in excess of the amounts
required from time to time for the payment of interest on and
principal of the refunded bonds, including applicable redemption
premium, then such excess may be withdrawn from escrow and
disbursed in such manner as the authority shall by resolution
determine, subject to the provisions of section five of this
article. Any moneys in the sinking or reserve funds or other
funds maintained for the outstanding bonds to be refunded may be
applied in the same manner and for the same purpose as are thenet proceeds of refunding bonds or may be deposited in the
special fund or any reserve funds established for account of the
refunding bonds.
The authority to issue revenue refunding bonds shall be in
addition to any other authority to refund bonds conferred by law.
The school building authority shall have power to enter into
such escrow agreements
with such bank or banks and to insert
therein such protective and other covenants and provisions as it
may consider necessary to permit the carrying out of the
provisions of this article and to insure the prompt payment of
the principal of and interest and redemption premiums on the
revenue bonds refunded.
Where any revenue bonds to be refunded are not to be
surrendered for exchange or payment and are not to be paid at
maturity with escrowed obligations, but are to be paid from such
source prior to maturity pursuant to call for redemption
exercised under a right of redemption reserved in such revenue
bonds, the authority shall, prior to the issuance of the
refunding bonds, determine which redemption date or dates shall
be used, call such revenue bonds for redemption and provide for
the giving of the notice of redemption required by the
proceedings authorizing such revenue bonds. Where such notice is
to be given at a time subsequent to the issuance of the refunding
bonds, the necessary notices may be deposited with the state
treasurer or the bank acting as escrow agent of the refunding
bond proceeds and the escrow agent appropriately instructed andauthorized to give the required notices at the prescribed time or
times. If any officer of the public body signing any such notice
shall no longer be in office at the time of the utilization of
the notice, the notice shall nevertheless be valid and effective
for its intended purpose.
§18-9D-13. Sinking fund for payment of bonds.
From the school building capital improvement fund the school
building authority shall make periodic payments
to the state
treasury in an amount sufficient to meet the requirements of any
issue of bonds sold under the provisions of this article, as may
be specified in the resolution of the authority authorizing the
issue thereof and in any trust agreement entered into in
connection therewith. The payments so made shall be placed
by
the treasurer as specified in such resolution of trust agreement
in a special sinking fund which is hereby pledged to and charged
with the payment of the principal of the bonds of such issue and
the interest thereon, and to the redemption or repurchase of such
bonds, such sinking fund to be a fund for all bonds of such issue
without distinction or priority of one over another, except as
may be provided in the resolution authorizing such issue of
bonds. The moneys in the special sinking fund, less such reserve
for payment of principal and interest and redemption premium, if
any, as may be required by the resolution of the school building
authority, authorizing the issue and any trust agreement made in
connection therewith, may be used for the redemption of any of
the outstanding bonds payable from such fund which by their termsare then redeemable, or for the purchase of bonds at the market
price, but at not exceeding the price if any, at which such bonds
shall in the same year be redeemable; and all bonds redeemed or
purchased shall forthwith be canceled and shall not again be
issued.
To meet the operational costs of the school building
authority, the school building authority may transfer to the
state treasury interest on any debt service reserve funds created
within any resolution authorizing the issue of bonds or any trust
agreement made in connection therewith.
§18-9D-15. Legislative intent; distribution of money.
(a) It is the intent of the Legislature to empower the
school building authority to facilitate and provide state funds
for the construction and maintenance of school facilities so as
to meet the educational needs of the people of this state in an
efficient and economical manner. The authority shall make
funding determinations in accordance with the provisions of this
article and shall assess existing school facilities and each
facilities plan in relation to the needs of the individual
student, the general school population, the communities served by
the facilities, and facility needs statewide.
(b) An amount that is no more than three percent of the sum
of moneys that are determined by the authority to be available
for distribution during the then current fiscal year from: (1)
The increase in local share paid into the school building capital
improvements fund pursuant to section ten, article nine-a of thischapter; (2) the issuance of revenue bonds for which such
increase in local share is pledged as security; and (3) any other
moneys received by the authority may be allocated and may be
expended by the authority for projects that service the
educational community statewide or, upon application by the state
board, for educational programs that are under the jurisdiction
of the state board.
Fifty percent of the remaining available funds shall be
allocated and distributed to each county board on the basis of
its net enrollment as defined in section two, article nine-a of
this chapter:
Provided, That such moneys shall not be
distributed to any county board whose region does not have an
approved facilities plan or to any county board that is not
prepared to commence expenditures of such funds during the fiscal
year in which the moneys
are distributed: Provided, however,
That any moneys allocated to a county board and not distributed
to that county board shall be redistributed on the basis of net
enrollment to those county boards then eligible for the receipt
of net enrollment distributions in that fiscal year. Prior to
any allocation and distribution of the fifty percent based on net
enrollment in a subsequent fiscal year, the authority shall
deduct from the fifty percent determination any moneys allocated
and not distributed to a county board during the preceding three
fiscal years upon written notice from any county board that such
county board is prepared to expend such amount in the then
current fiscal year and shall distribute such moneys accordingly. The balance shall then be allocated and distributed among all the
eligible counties.
The remaining fifty percent of moneys available for
distribution shall be allocated and expended on the basis of need
and efficient use of resources, such basis to be determined by
the authority in accordance with the provisions of section
sixteen of this article.
No local matching funds shall be required under the
provisions of this subsection,
and any county board may use the
state moneys provided herein in conjunction with local funds
derived from bonding or other source. Any county board may
dedicate any allocations of state moneys pursuant to this
subsection to the payment of local bonds used for purposes
encompassed in an approved facilities plan or for the payment of
bonds that are issued by the authority for the benefit of that
county that are in addition to the bond moneys distributed in
accordance with this subsection.
Moneys made available pursuant to this subsection that shall
be expended on projects that benefit more than one district shall
be apportioned among the districts in accordance with the formula
encompassed in that portion of the facilities plan that addresses
the project designed to benefit more than one district.
(c) To encourage regional educational service agencies and
county boards to proceed promptly with facilities planning and to
prepare for the expenditure of any state moneys derived from the
sources described in subsection (b) of this section, any countyboard failing to expend money within three years of the
allocation thereto shall forfeit such allocation and thereafter
shall be ineligible for further net enrollment or other
allocations pursuant to subsection (b) until the county board is
ready to expend funds in accordance with an approved facilities
plan. Any amount so forfeited shall be added to the total funds
available for allocation and distribution in the next ensuing
fiscal year.
(d) Distribution to the county boards may be in a lump sum
or in accordance with a schedule of payments adopted by the
authority pursuant to such guidelines as is shall adopt.
§18-9D-16. Facilities plans generally; need-based eligibility.
(a) To facilitate the goals as stated in section fifteen of
this article and to assure the prudent and resourceful
expenditure of state funds, each regional educational service
agency created pursuant to section twenty-six, article two of
this chapter shall submit a region-wide facilities plan that
addresses the facilities needs of each district within the region
pursuant to such guidelines as shall be adopted by the authority
in accordance with this section. Any project receiving funding
shall be in furtherance of such approved facilities plan.
(b) To assure efficiency and productivity in the project
approval process, the facilities plan shall be submitted only
after a preliminary plan, a plan outline or a proposal for a plan
has been submitted to the authority. Selected members of the
authority, which selection shall include citizen members, shallthen meet promptly with those persons designated by the regional
educational service agency, including one person from each county
within the region, to attend the facilities plan consultation.
The purpose of the consultation is to assure understanding of the
general goals of the school building authority and the specific
goals encompassed in the following criteria and to discuss ways
the plan may be structured to meet those goals.
(c) The guidelines for the development of a facilities plan
shall state the manner, timeline and process for submission of
any plan to the authority; such project specifications as may be
deemed appropriate by the authority; and those matters which are
deemed by the authority to be important reflections of how the
project will further the overall goals of the authority.
The guidelines regarding submission of the plans shall
include requirements for public hearings, comments or other means
of providing broad-based input within a reasonable time period as
the authority may deem appropriate. The submission of each
facilities plan shall be accompanied by a synopsis of all
comments received and a formal comment by each county board
included in the region. The guidelines regarding project
specifications may include such matters as energy efficiency,
preferred siting, construction materials, maintenance plans or
any other matter related to how the capital improvement project
is to proceed. The guidelines pertaining to quality education
shall require that a facilities plan address how the current
facilities do not meet and the proposed plan and any projectthereunder does meet the following goals:
(1) Student health and safety;
(2) Economies of scale, including compatibility with similar
schools that have achieved the most economical organization,
facility utilization and pupil-teacher ratios;
(3) Reasonable travel time and practical means of addressing
other demographic considerations;
(4) Multi-county and regional planning to achieve the most
effective and efficient instructional delivery system;
(5) Curriculum improvement and diversification, including
computerization and technology and advanced senior courses in
science, mathematics, language arts and social studies;
(6) Innovations in education such as year-round schools and
community-based programs; and
(7) Adequate space for projected student enrollments.
If the project is to benefit more than one county in the
region, the facilities plan shall state the manner in which the
cost and funding of the project shall be apportioned among the
counties.
(d) Each plan shall prioritize all the projects both within
a county and among the counties, which priority list shall be
the
basis for one of the criteria to be considered by the authority
in determining how available funds shall be expended. In
prioritizing the projects, each regional educational service
agency shall make determinations in accordance with
the objective
criteria
to be formulated by the school building authority.
prior to the first day of January, one thousand nine hundred
ninety-one
(e) Each plan shall include the objective means to be
utilized in evaluating implementation of the overall plan and
each project included therein. Such evaluation shall measure
each project's furtherance of each goal stated in this section
and any guidelines adopted hereunder, as well as the overall
success of any project as it relates to the facilities plan of
its region and the overall goals of the authority.
(f) The authority may adopt guidelines for requiring that a
regional educational service agency modify, update, supplement or
otherwise submit changes or additions to an approved plan and
shall provide reasonable notification and sufficient time for
such change or addition.
NOTE: The purpose of this bill is to revise the college
savings bond statue to provide greater marketability, clarify
provisions regarding the refunding of bonds, provide
administrative funds from earnings on revenue accounts, clarify
the role of the school building authority in the evaluation of
school projects, provide the authority power to select trustees,
accounting consultants, counsel and their services and other
technical language modifications.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.