State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_115C > GS_115C-489_5

Article 34B.

Qualified Zone AcademyBonds and Qualified School Construction Bonds.

§ 115C‑489.5.  Qualifiedzone academy bonds and qualified school construction bonds; findings.

The General Assembly finds:

(1)        Section 226 of theTaxpayer Relief Act of 1997, as codified at 26 U.S.C. § 54E, provides funds forschool improvements through taxable qualified zone academy bonds. Ninety‑fivepercent (95%) or more of the proceeds of a qualified zone academy bond issuemust be used for a qualified purpose with respect to a qualified zone academyestablished by an eligible local education agency.

(2)        Partnerships betweenprivate entities and local schools are promoted through the use of qualifiedzone academy bonds. Issuers must certify that they have received written commitmentsfrom one or more private entities to make qualified contributions valued at tenpercent (10%) of the proceeds of the issue.

(2a)      Section 1521, etseq., of the American Recovery and Reinvestment Tax Act of 2009 (ARRTA),enacted as 26 U.S.C. § 54F, provides a new source of funds for construction,rehabilitation, or repair of public school facilities or for acquisition ofland for public school facilities through the issuance of qualified schoolconstruction bonds.

(3)        Eligible taxpayersmay receive federal tax credits for holding the qualified zone academy bonds orqualified school construction bonds. It is intended that the qualified zoneacademy bonds and qualified school construction bonds be sold at a price sothat the tax credits received produce the economic equivalent of interest thatotherwise would have been paid on the bonds. Therefore, issuers of qualifiedzone academy bonds or qualified school construction bonds are obligated torepay the principal amount of the qualified zone academy bonds or qualifiedschool construction bonds but need not make interest payments.

(4)        Applicable federallaw limits the amount of qualified zone academy bonds and qualified schoolconstruction bonds that may be issued in North Carolina in a calendar year. Theamount of qualified school construction bonds that may be issued in the Stateis divided between amounts specifically designated for identified local schooldistricts pursuant to ARRTA ("local allocation") and amountsallocated to the entire State for use throughout the State ("statewideallocation").  (2000‑69,s. 1; 2009‑140, s. 1.)