SB 946 — Keep Our Schools Standing Act.

FILED SENATE GENERAL ASSEMBLY OF NORTH CAROLINA AprSESSION 30,2025 2026S S.B.1 SENATE BILL 946 Short Title:

946 SESSION 2025 PRINCIPAL CLERK S D SENATE BILL DRS45508-MCxf-330 Short Title:

Rules and Operations of the Senate May 4, 2026 A BILL TO BE ENTITLED AN ACT TO ENACT THE KEEP OUR SCHOOLS STANDING BOND ACT OF 2026.

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 bybythe the State Treasurer.

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or any financial institution or other similar provider of a credit facility agreement, 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 bybythe the owner, in consideration of the State agreeingagreeingto to repay the provider of the credit facility agreement in accordance with the terms and provisions of such agreement.

A provision providing for such adjustment based upon a percentage or percentages of a LIBOR rate, a prime rate, or base rate, which percentage or percentages maymayvaryor vary or be applied for different periods of time;

Such other provision as the State Treasurer may determine to be consistent with thissectionandwill notmateriallyandadverselynotmateriallyandadverselyaffect affect the financial position of the State and the marketing of bonds or notes at a reasonable interest cost to the State.

The term does not include Page 2 DRS45508-MCxf-330Senate Bill 946-First Edition General Assembly Of North Carolina Session 2025 projects for facilities for centralized administration, trailers, relocatable classrooms, or mobile classrooms.

– Subject to a favorable vote of amajorityamajorityofthequalified ofthequalifiedvotersvoters oftheStatewhovoteonoftheStatewhovoteonthequestionofissuingbonds thequestionofissuing bonds forcapital outlay projects for public schools and for capital outlay projects and repairs and renovations funds for community colleges and The University of North Carolina in the election called and held as provided in this section, the State Treasurer is hereby 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 Education Bonds," with any additional designations as maymaybe be determined to indicate the issuance of bonds from time to time, or notes of the State as provided in this section, in an aggregate principal amount not exceeding fifty billion dollars ($50,000,000,000) for the purpose of providing funds, with any other available funds, for the purposes authorized in this section.

Any items purchased with such proceeds and installed or replaced as part of a renovation or rehabilitationmust haveausefullifeofat least 10yearsormust10 yearsormust extend the life of the facility by at least 10 years once renovated or rehabilitated.

A unit's distribution amount allocated to a county may be used only with DRS45508-MCxf-330Senate Bill 946-First Edition Page 3 General Assembly Of North Carolina Session 2025 respect to public school facilities of that unit.

– The proceeds of education 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 "Education Bonds Fund," which may include such appropriate special accounts therein as maymaybe be determined bybythe the State Treasurer and shall be disbursed as provided in this section.

Any additional monies that may be received by means of a grant or grants from the United States of America or any agency or department thereof or from anyanyother other source for deposit to the Education Bonds Fund may be placed in the Education Bonds Fund or in a separate account or fund and shall be disbursed, to the extent permitted by the terms of the grant or grants, without regard to any limitations imposed by this section.

– The State Treasurer or the State Treasurer's designee is hereby authorized and directed to set up a comprehensive system of tracking the proceeds of the education bonds and notes, including premium thereon, if any, to the extent necessary to enable the State Treasurer or the Page 4 DRS45508-MCxf-330Senate Bill 946-First Edition General Assembly Of North Carolina Session 2025 State Treasurer's designee to properlyproperlyaccount account for the use of such proceeds for compliance with applicable requirements of the federal tax law or otherwise.

Ballots, voting systems authorized by Subpart 2 of Part 3 of Article 20 of Chapter 163A of the General Statutes, or both may be used in accordance with rules prescribed by the StateBoard.Thebond question to beusedin theballots orvotingorvotingsystems systems shall bein substantially the following form:

– 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 DRS45508-MCxf-330Senate Bill 946-First Edition Page 5 General Assembly Of North Carolina Session 2025 such terms and conditions, all as maymaybe be determined by the State Treasurer by and with the consent of the Council of State.

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, payingpayingagent, agent, ordesignatedassistant oftheStateTreasurer.Should anyofficer 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 bearthefacsimilesignatures ofpersonswhoat the actualtimeoftheexecutionactual timeoftheexecution 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.

provided, however, that nothing in this section shall prohibit theStateTreasurerfrom proceeding,proceeding,with with respect to theissuance 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 section.

– Subject to the consent of the Council of State, the State Treasurer shall determine 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, and 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 maymayvary 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.

Page 6 DRS45508-MCxf-330Senate Bill 946-First Edition General Assembly Of North Carolina Session 2025 3.

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 anyanynotes notes and anyanyrenewals renewals thereof, the proceeds of which shall have been used in paying interest on or principal of the bonds.

– ByByand 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 section.

Bonds and notes are hereby made securities that 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 anyanypolitical political subdivision of the State is now or may hereafter be authorized by law.

In addition to the State's right to amend any provision of this section to the extent it does not impair any contractual right of a bond owner, the State expresslyexpresslyreserves reserves theright to amendanyprovisionofthisamendanyprovision ofthis sectionwith respect to the making and repayment of loans, the disposition of any repayments of loans,and anyinterceptprovisionsrelatingtothefailureofalocalgovernmentanyinterceptprovisionsrelatingtothefailureofalocal government unit to repay a loan, the bonds not being secured in any respect by loans, any repayments thereof, or any intercept provisions with respect thereto.

(1) Be made payable from time to time on demand or tender for purchase by the owner thereof, provided a credit facility agreement supports the bonds or notes, unless the State Treasurer specifically determines that a credit facility agreement is not required, upon a finding and determination by the State Treasurer that the absence of a credit facility agreement will not materially or DRS45508-MCxf-330Senate Bill 946-First Edition Page 7 General Assembly Of North Carolina Session 2025 adversely affect the financial position of the State and the marketing of the bonds or notes at a reasonable interest cost to the State;

(4) Bear interest at a rate or rates that maymayvaryfor 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;

If the aggregate principal amount repayable by the State under a credit facility agreement is in excess of the aggregate principal amount of bonds or notes secured by the credit facility agreement, whether as a result of the inclusion in the credit facility agreement 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 facilityfacilityagreement agreement 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.

– If anyanyprovision provision of this section or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this section that can be given effect without the invalid provision or application and, to this end, the provisions of this section are declared to be severable.

Page 8 DRS45508-MCxf-330Senate Bill 946-First Edition General Assembly Of North Carolina Session 2025 SECTION 2.

Each entity, upon receivingreceivingthe the proceeds of education bonds and notes, including premium thereon, if any, issued pursuant to and for projects listed in Section 1 of this act, shall administer, supervise, and ensure that use of the proceeds comport with the purposes provided in this act.

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