Bill Text: NC H955 | 2013-2014 | Regular Session | Amended

North Carolina House Bill 955 (Prior Session Legislation)

Bill Title: School Board Fiscal Accountability Act

Spectrum: Partisan Bill (Democrat 10-0)

Status: (Introduced - Dead) 2013-04-18 - Ref To Com On Rules, Calendar, and Operations of the House [H955 Detail]

Download: North_Carolina-2013-H955-Amended.html

GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2013

H 1

HOUSE BILL 955

Short Title: School Board Fiscal Accountability Act.		(Public)
Sponsors:	Representatives Gill, Richardson, McManus, and Carney (Primary Sponsors). For a complete list of Sponsors, refer to the North Carolina General Assembly Web Site.
Referred to:	Rules, Calendar, and Operations of the House.

April 18, 2013

A BILL TO BE ENTITLED

AN ACT TO provide for FISCAL ACCOUNTABILITY OF SCHOOL BOARDS BY AUTHORIZING LOCAL school BOARDS TO RAISE REVENUE FOR THE SUPPORT OF PUBLIC EDUCATION.

The General Assembly of North Carolina enacts:

SECTION 1. Fiscal Responsibility for Local Boards of Education. � Beginning with the 2014‑2015 fiscal year, eligible local boards of education shall have authority to levy and collect taxes for the support of public education as provided in this act.

SECTION 2.(a) Requirements for Boards to Be Given Fiscal Responsibility. � Eligible local boards of education are those that satisfy all of the following conditions:

(1) The local board of education is elected rather than appointed.

(2) Each local board of education in the county and the board of county commissioners of each county in which the local school administrative unit is located have passed resolutions authorizing the local boards of education to levy taxes under this act.

SECTION 2.(b) A local board of education shall have authority to levy and collect taxes as provided in this act starting with the first fiscal year that begins more than six months after the adoption of the necessary resolutions by the board of county commissioners and the local board of education. The authority to levy and collect taxes includes the authority to take any other actions, including preparation and adoption of the budget, in advance of the start of the fiscal year as necessary to implement the taxing authority for the fiscal year.

SECTION 3.(a) Applicability of Local Government Budget and Fiscal Control Act. � For fiscal year 2014‑2015 and subsequent fiscal years, the eligible local boards of education granted tax‑levying authority shall be considered units of local government under G.S. 159‑7(b)(15) and, accordingly, shall follow the provisions of the Local Government Budget and Fiscal Control Act in Article 3 of Chapter 159 of the General Statutes rather than the School Budget and Fiscal Control Act in Article 31 of Chapter 115C of the General Statutes. However, the eligible local boards of education shall continue to follow the budget format and fund structure in the School Budget and Fiscal Control Act. The reports an eligible board of education is required to file with the secretary of the Local Government Commission pursuant to G.S. 159‑33, 159‑33.1, and 159‑34 shall also be filed with the State Board of Education.

SECTION 3.(b) The superintendent for the eligible local board of education shall be the budget officer.

SECTION 3.(c) Any questions concerning the budget format and procedures to be followed by the eligible local boards of education granted tax‑levying authority shall be resolved by the Local Government Commission.

SECTION 4.(a) Authority to Levy Property Tax. � Beginning with the budget to be prepared and adopted for the initial fiscal year in which eligible local boards of education have tax‑levying authority, the eligible local boards of education shall have the same authority as a board of county commissioners has for purposes of public education to levy and collect taxes on property having situs within the local school administrative unit.

SECTION 4.(b) For the listing, assessment, and collection of the ad valorem tax, the eligible local boards of education shall have the same authority and shall follow the same procedures as a municipality under Article 22 of Chapter 105 of the General Statutes except as follows:

(1) An eligible local board of education shall not have the option under G.S. 105‑326 of requiring property owners to list their property separately with the local board of education. Instead, the eligible local board of education shall use the abstracts and tax records of the county to determine the property subject to taxation by the eligible local board of education.

(2) For the property it is entitled to tax, the eligible board of education shall accept and adopt the appraisals and assessments fixed by the county. The eligible board of education shall not constitute a separate board of equalization and review for taxpayers' appeals but shall accept and be bound by the decisions made by the county board of equalization and review and any adjustments made by the board of county commissioners pursuant to G.S. 105‑325.

(3) The eligible local board of education may appoint a tax collector, pursuant to G.S. 105‑349, or may enter an interlocal agreement with the board of county commissioners to allow the county's tax collector to serve the same function for the school unit. If the eligible board of education appoints its own tax collector, it still may enter an interlocal agreement with the county to perform parts of the tax collection and foreclosure functions. Whether the eligible board of education appoints its own tax collector or enters an agreement with the county for the county tax collector to perform all or some of those functions, the collection and foreclosure of taxes shall be conducted according to the provisions of Article 26 of Chapter 105 of the General Statutes.

SECTION 4.(c) Because ad valorem taxes levied by the eligible local boards of education for the initial fiscal year in which the eligible local boards of education have tax‑levying authority will not become due until September 1 of that year, and may be paid without penalty beyond that date, the Local Government Commission and the Office of State Budget and Management shall assist each eligible local board of education in developing plans for assuring that sufficient revenues are available for the operation of schools during the beginning portions of the initial fiscal year for the eligible boards to exercise taxing authority. The plans may include the carrying forward of fund balances from the previous year, advancement of State appropriations, transfer of moneys from other funds available in the county, and such other means as may be appropriate.

SECTION 4.(d) The provisions of G.S. 105‑374(h) and G.S. 105‑375(k) concerning joint foreclosure and consolidation of liens, respectively, shall apply to eligible local boards of education under this act to the same extent as to counties, cities, and other taxing units.

SECTION 5. Abolition of Supplemental Taxes. � Effective July 1 of the initial fiscal year in which the eligible local boards have tax‑levying authority, any supplemental taxes enacted for the support of the public schools of the local boards of education which are authorized to levy and collect taxes pursuant to this act are repealed. Article 36 of Chapter 115C of the General Statutes, concerning voted tax supplements for school purposes, shall not apply in counties in which the local board of education is eligible to levy and collect taxes pursuant to this act.

SECTION 6.(a) Local Sales Tax Proceeds. � In each county in which a local board of education is authorized to levy and collect taxes pursuant to this act, the eligible local board of education shall receive a portion of the county's distribution from the net proceeds of the local sales and use tax under G.S. 105‑472(b) (the first one‑cent local tax), 105‑486(c) (the first half‑cent local tax), and 105‑501 (the second half‑cent local tax), as provided in subsection (b) of this section. This provision shall not affect the share of the local sales and use tax proceeds distributed to municipalities in the county.

SECTION 6.(b) The eligible local board of education's share of the net proceeds of local sales and use taxes shall be determined by the ad valorem method as described in G.S. 105‑472(b)(2). The distribution of net proceeds of local sales and use tax between counties and municipalities shall first be determined according to the per capita or ad valorem method as chosen by the county. After that calculation is made, the county's distribution then shall be divided between the school unit and the county according to the ad valorem method.

SECTION 6.(c) The Secretary of Revenue shall allocate and distribute the school unit's share of the local sales and use tax to the eligible board of education on a monthly basis the same as such allocations and distributions are made to counties and municipalities.

SECTION 7.(a) Existing Indebtedness and Related Local Sales Tax Proceeds. � An eligible local board of education shall enter an interlocal agreement pursuant to G.S. 160A‑461 under which the eligible board of education shall make the payments due from the county on any existing indebtedness of the county related to the construction of public school facilities for that school unit, beginning July 1 of the initial fiscal year in which the eligible local boards of education have tax‑levying authority. The form of the interlocal agreement shall be set by the Local Government Commission.

SECTION 7.(b) To the extent that G.S. 105‑487 requires a percentage of the county proceeds from the first half‑cent local sales and use tax to be dedicated to school capital outlay purposes, and to the extent that G.S. 105‑502 requires a percentage of the county proceeds from the second half‑cent local sales and use tax to be dedicated to school capital outlay purposes, those proceeds shall be paid by the Secretary of Revenue to the eligible local board of education rather than the board of county commissioners in those counties in which the local board of education has been authorized to levy and collect taxes pursuant to this act. This provision shall apply to sales tax collected July 1 of the initial fiscal year in which the eligible local boards have tax‑levying authority, and subsequently.

SECTION 7.(c) Upon entry of an interlocal agreement pursuant to this section, the county shall transfer to the eligible board of education any capital reserve fund it has created pursuant to G.S. 159‑18 for capital expenditures related to the construction of public school facilities. The county shall transfer to the eligible local board of education the amount in the reserve fund as of July 1 of the fiscal year immediately preceding the initial fiscal year in which the eligible local boards of education have tax‑levying authority, plus any additional sums appropriated to the fund or earned by the fund after that date, minus any amount expended from the fund to reduce indebtedness related to the construction of public school facilities. This section also shall apply to any capital reserve fund created by the county after July 1 of the fiscal year immediately preceding the initial fiscal year in which the eligible local boards of education have tax‑levying authority for indebtedness related to the construction of public school facilities.

SECTION 8.(a) Issuance of Bonds by Local Board of Education. � An eligible local board of education shall be authorized to issue bonds for the purposes in G.S. 159‑48(c)(4) to the same extent and in the same manner as a county is authorized to do so. The faith and credit of the issuing school unit is pledged for the payment of the principal and interest on all bonds issued pursuant to this section, and the power and obligation of the issuing school unit to levy taxes and raise other revenue for the prompt payment of installments of principal and interest shall be unrestricted as to rate and amount.

SECTION 8.(b) The issuance of bonds by a local school unit pursuant to this section shall be subject to the same procedures and requirements of the Local Government Bond Act as the issuance of such bonds by a county.

SECTION 8.(c) The Local Government Commission shall determine the authorization and procedure for an eligible local board of education to issue bonds pursuant to this section.

SECTION 9. G.S. 159‑160 reads as rewritten:

"§ 159‑160. Definitions.

As used in this Part, the words 'unit' or 'issuing unit' means 'unit of local government' as defined in G.S. 159‑44 or G.S. 159‑102, 'municipality' as defined in G.S. 159‑81, school unit whose local board of education is authorized to levy and collect taxes, and the State of North Carolina."

SECTION 10. G.S. 159‑168 reads as rewritten:

"§ 159‑168. 'Unit' defined.

For purposes of this Part, 'unit,' 'unit of local government,' or 'issuing unit' means a 'unit of local government' as defined by G.S. ~~159‑7(b)~~159‑7(b), a school unit whose board is authorized to levy and collect taxes, and a 'public authority' as defined by G.S. 159‑7(b)."

SECTION 11. Article 32 of Chapter 115C of the General Statutes is amended by adding a new section to read:

"§ 115C‑458.1. Loans from State Literary Fund directly to certain school units.

In addition to the authority granted in G.S. 115C‑458 to lend monies from the State Literary Fund to counties, the State Board of Education may make loans from the State Literary Fund directly to local boards of education which are authorized to levy and collect taxes. The provisions of this Article and of the rules of the State Board of Education concerning loans from the State Literary Fund shall apply to the loans made directly to local boards of education, except that the county board of commissioners shall have no responsibility for repayment of such loans."

SECTION 12. Information Provided to County. � In counties in which the local board of education has been authorized to levy and collect taxes pursuant to this act, the provisions of G.S. 115C‑429(c) obligating the local board of education to provide certain information to the board of commissioners and similar provisions in the School Budget and Fiscal Control Act and other statutes shall not apply. The local board of education may provide such information to the board of county commissioners in its discretion.

SECTION 13. G.S. 115C‑452 reads as rewritten:

"§ 115C‑452. Fines and forfeitures.

(a) The clear proceeds of all penalties and forfeitures and of all fines collected in the General Court of Justice in each county shall be remitted by the clerk of the superior court to the county finance officer, who shall forthwith determine what portion of the total is due to each local school administrative unit in the county and remit the appropriate portion of the amount to the finance officer of each local school administrative unit. Fines and forfeitures shall be apportioned according to the projected average daily membership of each local school administrative unit as determined by and certified to the local school administrative units and the board of county commissioners by the State Board of Education pursuant to G.S. 115C‑430.

(b) In counties in which the local board of education has been authorized to levy and collect taxes, the clerk of superior court shall remit the clear proceeds of all penalties and forfeitures and all fines collected in the General Court of Justice directly to the finance officer of the local school administrative unit. When both a county board of education and city board of education within the same county have such taxing authority, the clerk of superior court shall remit the proceeds to the finance officer of the county school administrative unit who shall be responsible for determining and remitting to the finance officer of the city school administrative unit that city unit's portion of the proceeds based on projected average daily membership."

SECTION 14. Erection of School Buildings. � The provisions of G.S. 115C‑521(b) concerning submission of building needs to the board of county commissioners shall not apply in counties in which the local board of education has been given authority to levy and collect taxes pursuant to this act. Nor shall the provisions of G.S. 115C‑521(d) concerning approval of the board of county commissioners for appropriations apply in such counties.

SECTION 15. Provision of Equipment for Buildings. � In counties in which the local board of education has been authorized to levy and collect taxes pursuant to this act, the provisions of G.S. 115C‑522 concerning the provision of suitable supplies and good water supplies shall not apply to the board of county commissioners.

SECTION 16. Fire Prevention. � In counties in which the local board of education has been authorized to levy and collect taxes pursuant to this act, the provisions of G.S. 115C‑525(b)(2) requiring the board of county commissioners to appropriate funds for fire inspections of school buildings shall not apply. The local board of education shall be responsible for the costs of such inspections in those counties.

SECTION 17. Lease Purchase and Installment Purchase Contracts. � In counties in which the local board of education has been authorized to levy and collect taxes pursuant to this act, the provisions of G.S. 115C‑528(g) concerning submission of information on lease purchase and installment purchase contracts to the board of county commissioners shall not apply.

SECTION 18. Operational Leases of School Buildings and Facilities. � In counties in which the local board of education has been authorized to levy and collect taxes pursuant to this act, the provisions of G.S. 115C‑530 requiring approval of leases by the board of county commissioners shall not apply.

SECTION 19. Capital Leases of School Buildings and Facilities. � In counties in which the local board of education has been authorized to levy and collect taxes pursuant to this act, the provisions of G.S. 115C‑531 requiring approval of leases by the board of county commissioners shall not apply.

SECTION 20. Public School Building Capital Fund. � In counties in which the local board of education has been authorized to levy and collect taxes pursuant to this act, the responsibilities given to the county and the county board of commissioners by Article 38A of Chapter 115C of the General Statutes, the Public School Building Capital Fund, shall be assumed by the administrative school unit and eligible board of education. In those counties, monies should be allocated to the administrative school unit rather than to the county.

SECTION 21. No Other Taxing Authority for Board of Education. � Except as provided in this act, a local board of education shall have no authority to impose or collect a tax.

SECTION 22. Commissioners' Discretion to Provide Additional Support. � Nothing in this act shall prohibit a board of county commissioners from providing additional financial support to an eligible local board of education in its discretion.

SECTION 23. Limitations on Tax Rate for the Initial Fiscal Year. � For the initial fiscal year, an eligible local board of education shall not adopt a property tax rate greater than the rate needed to produce revenue sufficient to offset the county appropriations, calculated on a per‑student basis, that will no longer be available to the public schools for that fiscal year, plus an amount necessary to cover the cost‑of‑living increase from the preceding fiscal year. To enable the eligible board of education to determine the necessary tax rate for the initial fiscal year, the board of county commissioners shall notify the board of education by May 1 before the beginning of the fiscal year of any county funds other than property and sales tax revenues that previously have been appropriated to the local board of education but which will no longer be provided. In determining the property tax rate for the initial fiscal year needed to equal the amount previously appropriated by the county per student, the eligible local board of education shall use the highest per‑student appropriation of the three previous fiscal years.

SECTION 24. This act is effective when it becomes law.