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Bill Summary · SB 946

Summary of SB 946: Keep Our Schools Standing Act (North Carolina, 2025 Session)

Purpose and Intent

  • Title: Keep Our Schools Standing Act of 2026.
  • Primary aim: Authorize the issuance of up to $50 billion in general obligation bonds to fund public school facilities statewide, through grants to counties for capital outlay projects, repairs, and renovations.
  • Election trigger: Bond authorization is subject to approval by a statewide vote in November 2026.

Key Provisions and Changes

Section 1 – Bond Authorization and Use

  • Authorization: State Treasurer, with Council of State consent, may issue State of North Carolina Education Bonds (or notes) up to $50,000,000,000.
  • Annual cap: No more than $250,000,000 in principal may be issued in any 12-month period.
  • Primary purpose: Provide funds, with other available funds, for public school capital outlay projects, including construction, renovation, energy efficiency, security, equipment, and land acquisition for preK–12 facilities, including certain cooperative and community college–co-located facilities.
  • Eligible costs (definitions): Includes construction, renovation, architectural/engineering services, administrative expenses, financing costs (e.g., interest, insurance, liquidity facilities), and related issuance costs.
  • Credit/financing tools: May use credit facilities, refunding bonds, and derivative instruments; bonds may be issued as fixed or variable rate, with potential for credit enhancements and liquidity facilities.

Section 1 – Proceeds Allocation and Management

  • Proceeds use: $50B in bond proceeds (plus any premiums) to be used for grants to counties for public school capital outlay and repairs/renovations.
  • DPI role: Department of Public Instruction allocates proceeds to Local Education Agencies (LEAs) considering factors like average daily membership (ADM), county wealth, ADM growth, and facility age/condition. Additional non-State funds may be added to the Education Bonds Fund.
  • Special allocation rules:
    • Projects must have a minimum 10-year life (usable life for renovations or add new life to the facility).
    • Allocation within counties follows ADM proportions; multi-county LEAs allocate across counties accordingly.
    • DPI must prioritize energy efficiency improvements.

Section 1 – Project Tracking and Oversight

  • Establish a tracking system for bond proceeds to ensure federal tax compliance and proper use.
  • Funds can be withheld if recipients fail to comply.

Section 1 – Election

  • Ballot measure in November 2026 to approve $50B in bonds.
  • State Board of Elections to reimburse counties’ election costs beyond normal expenses.

Section 1 – Issuance Details

  • Terms: Bonds/notes may mature up to 40 years; interest and redemption terms determined by the State Treasurer with Council of State consent.
  • Issuance flexibility: Bonds may be sold publicly or privately, in or out of state; certificates or uncertificated securities permitted.
  • Tax status: Bonds/interest exempt from most state, local taxes; interest generally exempt from state taxation.

Sections 2–6 – Administration, Reporting, and Miscellaneous

  • Local LEAs and county boards must submit expenditure plans to DPI; annual/quarterly reporting to DPI and legislative committees begin by January 1, 2028.
  • Contingencies and escalation costs: OST funding may cover unforeseen costs or inflation related to specific projects; remaining funds post-completion to OST for reporting.
  • Election logistics: Precinct voting adjustments for November 2026 only.
  • Technology expenditures: Any school technology funded by bond proceeds must be reported and counted toward the Moore v. NC Schools judgment (public reporting requirement).

Who Would Be Affected

  • State: General Obligation bond issuance by the State of NC; potential fiscal implications and debt service.
  • Local governments: LEAs and counties receive grants for capital outlay, renovations, security, and technology improvements.
  • DPI and State Budget/OSBM: Oversight, tracking, reporting, and administration of bond proceeds.
  • Voters: Electors statewide vote on whether to authorize the bonds in 2026.

Timeline and Procedural Aspects

  • Effective date: Upon becoming law.
  • Election: Bond referendum scheduled for November 2026.
  • Reporting starts: January 1, 2028, with ongoing quarterly/annual reports to DPI and legislative oversight committees.
  • Issuance cap: Maximum of $250 million in bonds issued per year, until the total $50B is reached.

Note: This summary emphasizes the bill’s stated purposes, financing mechanics, allocation rules, oversight, and timeline.

Compiled from official sources — confirm details with the bill’s official record.

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