Under the 1996 $1.8 billion school bond, does the State Board of Education send the bond proceeds directly to local school boards, or do they have to flow through the county commissioners first?

Plain-English summary

State Board of Education Chairman Jay Robinson asked whether the 1996 Public School Building Bond Act allocated proceeds directly to local boards of education. The Attorney General's office answered that the proceeds were allocated first to boards of county commissioners and then to boards of education.

The opinion pointed to the Bond Act's repeated language about grants and allocations to counties. It also cited the School Budget and Fiscal Control Act, which required school units to spend money, whatever its source, under a school budget resolution adopted by county commissioners. Although one Bond Act provision said the State Board would make approved funds available to a school unit, the opinion read that provision as operating through an initial allocation to the county commissioners.

For projects using both local and Bond Act money, county commissioners retained their authority to determine the level of local funding. For projects funded entirely by state bond proceeds, the opinion said the state money would be included in the school budget resolution and flow through the county commissioners without their exercising authority over those funds. It noted a statute encouraging school boards and commissioners to meet jointly about capital needs.

Currency note

The opinion interprets a particular 1996 bond act and the school-budget statutes then in force. Check current law and the terms of any present bond program before applying its route for funds.

Common questions

Did the 1996 Bond Act send proceeds directly to local school boards?

The opinion said no. It interpreted the Act to allocate proceeds first to county commissioners and then to local boards of education.

Could commissioners set the local contribution for a project that also used bond proceeds?

Yes. The opinion said they retained authority over the level of local funding in a project with both local and Bond Act funds.

Did the opinion prescribe a remedy if commissioners refused to include bond money in a budget resolution?

No. It described how the money should flow, but did not discuss refusal, mandamus, or forfeiture of a county allocation.

Source

• Landing page: https://ncdoj.gov/opinions/allocation-of-funds-under-public-school-building-bond-act/

Citations

• 1995 Sess. Laws ch. 631 (1996)
• N.C.G.S. § 115C-422 et seq.
• N.C.G.S. § 115C-425(b)
• N.C.G.S. § 115C-426.2
• N.C.G.S. § 115C-517
• Atkins v. McAden, 229 N.C. 752 (1949)
• Dilday v. Board of Education, 267 N.C. 438 (1966)

Original opinion text

December 10, 1996

Jay Robinson, Chairman
State Board of Education
Education Building
Raleigh, North Carolina 27602

Re: Advisory Opinion; Allocation of Funds under Public School Building Bond Act of 1996; 1995 Sess. Laws ch. 631 (1996)

Dear Dr. Robinson:

You request our opinion whether the Public School Building Bond Act of 1996, 1995 Sess. Laws ch. 631 (1996), provides for the direct allocation of bond proceeds to boards of education. Based on the plain language of the Bond Act and the School Budget and Fiscal Control Act, G.S. 115C-422 et seq., it is our opinion that bond proceeds are first allocated to boards of county commissioners and then in turn to boards of education.

Section 2 of the Bond Act states: It is the intent of the General Assembly by this Act to provide for the issuance of one billion eight hundred million dollars ($1,800,000,000) general obligation bonds of the State to facilitate the providing of public school buildings by making grants to counties to provide for public school capital outlay projects. (emphasis added)

This express intention to make grants to counties to provide for public school outlay projects, rather than directly to local boards of education, is repeated throughout the Bond Act. See, e.g., Section 5 (proceeds "shall be used for the purpose of making grants to counties for paying the cost of public school capital outlay projects."); Sec. 6 (proceeds "shall be allocated to counties"); Sec. 7 (presenting to the voters the question whether bonds will be issued "providing funds to counties . . . to pay the cost of public school building capital improvements.") Allocating state funds for the construction of public school facilities to counties, rather than allocating State funds directly to local school systems, accords fully with other provisions of the law. Under the School Budget and Fiscal Control Act, local boards of education may only expend funds for capital outlay purposes, including state funds for capital outlay purposes, in accordance with a school budget resolution adopted by the board of county commissioners. See G.S. 115C-425(b) ("notwithstanding any other provision of law, after July 1, 1996, no local school administration unit may expend any moneys, regardless of their source (including moneys derived from federal, State or private sources), except in accordance with a budget resolution adopted [by the board of county commissioners] pursuant to this Article.")

One provision of the Bond Act could be read to suggest that boards of county commissioners are by-passed and that bond proceeds are allocated directly to local school systems. Section 6(f) states: "After the State Board of Education determines that a school administrative unit's planned expenditures of part or all of the funds allocated to it is within the purposes in this Act, the State Board of Education shall make the funds to which the plans apply available to the school administrative unit." However, reading the Bond Act as a whole in accordance with the rules of statutory construction, it is our opinion that Section 6(f) simply provides that the State Board will make funds "available to the school administrative unit" by first allocating those funds to boards of county commissions.

Our conclusion that proceeds under the Bond Act are to be allocated first to boards of county commissioners and then to boards of education, raises the question of the extent of the authority of boards of county commissioners over Bond Act funds. Generally and ordinarily, boards of county commissioners and boards of education possess dual and divided responsibility for the construction or renovation of school buildings. The responsibility of the board of education is to design, locate and construct school buildings and the responsibility of the board of county commissioners is to fund those projects from local revenues to the extent it can. See G.S. 115C-517 (school boards authorized to select and acquire school sites); -521 (school boards to design and construct school buildings); -428 (school boards to prepare and submit proposed budget, including capital outlay budget, to county commissioners); -429 (county commissioners to consider proposed budget, to determine level of local funds to be allocated and to adopt school budget resolution). See also Atkins v. McAden, 229 N.C. 752, 757 (1949) (authority of county commissioners to determine the level of local expenditures for support of the public schools should not be construed "to interfere with the exclusive control of the schools vested in the county board of education").

For projects funded both by local funds and Bond Act funds boards of county commissioners retain their authority regarding the level of local funding. For projects funded entirely with Bond Act funds, however, the need and basis for their authority to determine the level of local funding disappears. The funds involved are State funds, not local funds. In those circumstances the State Bond funds, though included within the school budget resolution, simply flow through the boards of county commissioners without the exercise of any authority. This is not to say that boards of education should act without consulting with boards of county commissioners. On the same day that the General Assembly enacted the Bond Act it also enacted G.S. 115C-426.2 which provides that local boards of education and boards of county commissioners "are strongly encouraged to conduct periodic joint meetings" "to assess the school capital outlay needs" and "to develop" plans to meet those needs. See also, Dilday v. Board of Education, 267 N.C. 438, 449 (1966) ("This dual responsibility obviously requires the utmost cooperation between [boards of education and boards of county commissioners] and the full assumption of responsibility by each, if the educational needs of the children of the county are to be met.")

Edwin M. Speas, Jr.
Senior Deputy Attorney General