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. 115C422 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. 115C517 (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