NORTH CAROLINA GENERAL ASSEMBLY
1971 SESSION

CHAPTER 1228
HOUSE BILL 1576

AN ACT TO AMEND G.S. 115-131 AS IT APPLIES TO HOKE, ROBESON AND SCOTLAND COUNTIES TO AUTHORIZE AND EMPOWER COUNTY AND CITY BOARDS OF EDUCATION TO ENTER INTO LONG-TERM AND SHORT-TERM LEASE, LEASEBACK, AND LEASE-PURCHASE CONTRACTS WITH INDIVIDUALS, FIRMS AND CORPORATIONS.

Whereas, the need for expanding existing public school facilities and constructing new public schools has become an urgent need for public education in the State; and
Whereas, county and city boards of education have experienced serious problems in the financing of badly needed public school facilities and have met resistance in seeking new tax sources and in bond elections; and
Whereas, it appears likely that the public school population will continue to rise, thus compounding these problems; and
Whereas, it is deemed in the public interest to provide new methods and means of financing public school construction, including the use of private funds, and to empower local school boards to enter into the necessary arrangements; Now, therefore, 

The General Assembly of North Carolina do enact:

Section 1. G.S. 115-131 as applicable to Hoke, Robeson and Scotland Counties is amended by rewriting the entire statute so that it shall read as follows:
"§ 115-131.  County and city boards of education, with the approval of the board of commissioners, are authorized to appropriate funds to aid in the establishment of a school facility and the operation thereof in and adjoining county or city administrative unit when a written agreement between the boards of education of the administrative units involved has been reached and the same recorded in the minutes of said boards, whereby children from the unit making such appropriations shall be entitled to attend the school so established.
In all cases where title to property has been vested in the trustees of a special charter district which has been abolished and has not been reorganized, title to such property shall be vested in the county or city board of education of the county embracing such former special charter district.
County and city boards of education are hereby authorized and empowered, in their discretion and in conformity with law, to enter into long-term leases or lease-purchases with individuals, firms or corporations for the rental of grounds and of buildings to be erected for school purposes. The terms of said leases shall not exceed 25 years at a stipulated rental, and the term of a lease-purchase shall not exceed 10 years, with the right of renewal for an additional 10 years.
County and city boards of education are further empowered and authorized to enter into short-term leases, for a period not more than seven years, with an individual, firm or corporation for the use and renovation of an existing building and grounds for school purposes.
County and city boards of education are further empowered and authorized to enter into long-term lease and leaseback agreements with respect to any proposed school site where it is the purpose of the lease and leaseback agreements to provide for the erection of school buildings and facilities with non-public funds; and pursuant to such purpose, county and city boards of education are authorized to execute documents to subordinate the fee estate to such site to a construction and long-term financial institution to secure repayment of funds loaned to construct such buildings and facilities on the site. Provided, any subordination of the fee estate permitted herein shall not create any obligation or liability on the part of the county and city boards of education in regard to payment of construction and long-term financing notes and, provided further, that county and city boards of education may, upon default of the borrower on any note given for construction or long-term financing, assume the obligation of the borrower under said note and terminate any lease entered into.
County and city boards of education are further authorized and empowered to make all other contracts or agreements necessary or convenient in carrying out such purposes.
The provisions of the long or short-term leases, leasebacks, and lease-purchases, including building or renovation plans, shall be subject to approval by the State Superintendent of Public Instruction and no such contract shall be entered into without prior approval of said State Superintendent, and the building or renovation plans shall be subject to approval by other departments and agencies as required of school facilities to the extent required by law.
Procedures for competitive bidding as are presently applicable in regard to public contracts pursuant to G.S. 143-129 shall be undertaken by the individual, firm, or corporation who shall hold title to the school buildings and facilities upon contemplation of construction or renovation of a school building and facilities on a school site."
Sec. 2. This act shall become effective upon ratification, and apply only to Scotland, Hoke and Robeson Counties.
In the General Assembly read three times and ratified, this the 21st day of July, 1971.