School Law Bulletin #1999/11

THE BIGGEST STORY in higher education legislation in the 1999 session of the North Carolina General Assembly was a bill that did not pass—S 912—which, in its original form, would have authorized the sale of $2.7 billion in State of North Carolina University Improvement Security Interest Bonds and $300 million in State of North Carolina Community College Security Interest Bonds. The impetus behind the proposal was the recog- nition that over the next ten years, the university expects to enroll an additional 48,000 students while the community college system faces corresponding increases in demand.

The bonds would have been limited obligation bonds (meaning that the university and the community college system would pledge various kinds of assets as security for the bonds) and not general obligations bonds (which would have pledged the full faith and credit and taxing authority of the state for their repayment). Being limited obligation bonds, they would not have required a vote of the people under the state constitution. Be- cause of the no referendum feature, and the size of the proposal, the bonds faced stiff opposition.

The bill passed the senate at the $3 billion level with no referendum. The version that eventually passed the house called for $1 billion in university bonds and $200 million in community college bonds, contingent on a favorable vote in a referendum. The session ended with the two houses unable to agree on a final bill.

Other higher education issues in the 1999 session were far less attention-grabbing. This article presents a summary of the changes that were enacted.