SB498: SB498 Georgia Charter School Facilities Authority; establish

26 LC 49 2821S The House Committee on Appropriations offers the following substitute to SB 498: A BILL TO BE ENTITLED AN ACT To amend Article 31B of Chapter 2 of Title 20 of the Official Code of Georgia Annotated,1 relating to charter school capital finance, so as to establish the Georgia Charter School2 Facilities Authority for the purpose of enabling charter schools to obtain revolving loan funds3 and other public financing assistance for purposes of construct ing, renovating, and4 rehabilitating educational facilities for such schools; to provide for definitions; to provide for5 the composition, duties, and powers of such authority; to assign such authority to the Georgia6 State Financing and Investment Commission for administrative purposes; to amend Article 27 of Chapter 17 of Title 50 of the Official Code of Georgia Annot ated, the "Georgia State8 Financing and Investment Commission Act," so as to provide for responsibilities of the9 Georgia State Financing and Investment Commission; to provide for definitions; to provide10 for related matters; to repeal conflicting laws; and for other purposes.11 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:12 SECTION 1.13 Article 31B of Chapter 2 of Title 20 of the Official Code of Georgia Annotated, relating to14 charter school capital finance, is amended by designating Code Sections 20-2-209515 through 20-2-2095.5 as Part 1, by replacing the term "article" with the term "part" wherever16 S. B. 498 (SUB) - 1 - 26 LC 49 2821S the former term appears in any of such Code sections, and by adding a new part to read as17 follows:18 "Part 219 20-2-2095.20.20 As used in this part, the term:21 (1) 'Authority' means the Georgia Charter School Facilities Authority created in this part.22 (2) 'Charter school' shall have the same meaning as set forth in Code Section23 20-2-2095.1.24 (3) 'Cost of project' or 'cost of any project' means:25 (A) All costs of acquisition, by purchase or otherwise, constr uction, assembly,26 installation, modification, renovation, extension, or rehabilit ation incurred in27 connection with any project or any part of any project;28 (B) All costs of real property, fixtures, or personal property used in or in connection29 with or necessary for any project or for any facilities related thereto, including, but not30 limited to, the costs of all land, interests in land, estates f or years, easements, rights,31 improvements, water rights, and connections for utility service s; the costs of fees,32 franchises, permits, approvals, licenses, and certificates; the costs of securing any such33 franchises, permits, approvals, licenses, or certificates; the costs of preparation of any34 application therefor; and the costs of all fixtures, machinery, equipment, furniture, and35 other property used in or in connection with or necessary for any project;36 (C) All financing charges and loan or loan guarantee fees and all interest on notes of37 the authority which accrue or are paid prior to and during the period of construction of38 a project and during such additional period as the authority may reasonably determine39 to be necessary to place such project in operation;40 S. B. 498 (SUB) - 2 - 26 LC 49 2821S (D) All costs of engineering, surveying, planning, environmental assessments, financial41 analyses, and architectural, legal, and accounting services and all expenses incurred by42 engineers, surveyors, planners, environmental scientists, fisca l analysts, architects,43 attorneys, accountants, and any other necessary technical personnel in connection with44 any project;45 (E) All expenses for inspection of any project;46 (F) All fees and all other costs and expenses incurred relativ e to the issuance of any47 notes for any project;48 (G) All fees of any type charged by the authority in connection with any project;49 (H) All expenses of or incidental to determining the feasibility or practicability of any50 project;51 (I) All costs of plans and specifications for any project;52 (J) All costs of title insurance and examinations of title with respect to any project;53 (K) Repayment of any loans for the advance payment of any part of any of the54 foregoing costs, including interest thereon and any other expenses of such loans;55 (L) Administrative expenses of the authority, including, but not limited to, personnel56 and operational costs, and such other expenses as may be necessary or incidental to any57 project or the financing thereof or the placing of any project in operation; and58 (M) The establishment of a fund or funds as the authority may approve with respect to59 the financing and operation of any project and as may be authorized by any instrument60 or agreement pursuant to the provisions of which the issuance o f any notes of the61 authority may be authorized.62 Any cost, obligation, or expense incurred for any of the purpos es specified in this63 paragraph shall be a part of the cost of the project and may be paid or reimbursed as such64 out of the proceeds of notes issued by the authority.65 (4) 'Educational facilities' shall include buildings, fixtures, and equipment necessary for66 the effective and efficient operation of charter schools, which , without limiting the67 S. B. 498 (SUB) - 3 - 26 LC 49 2821S generality of the foregoing, shall include: classrooms; librari es; rooms and space for68 physical education; space for fine arts; restrooms; specialized laboratories; cafeterias;69 media centers; building equipment; building fixtures; furnishings; career, technical, and70 agricultural education labs and facilities to support industry credentialing; related exterior71 facilities; landscaping and paving; and similar items which the State Board of Education72 may determine necessary. The following facilities are specifically excluded: swimming73 pools, tracks, stadiums, and other facilities or portions of fa cilities used primarily for74 athletic competition.75 (5) 'Project' means the acquisition, construction, installation, modification, renovation,76 repair, extension, renewal, replacement, or rehabilitation of l and, interest in land,77 buildings, structures, facilities, or other improvements and the acquisition, installation,78 modification, renovation, repair, extension, renewal, replaceme nt, rehabilitation, or79 furnishing of fixtures, machinery, equipment, furniture, or other property of any nature80 whatsoever used on, in, or in connection with any such land, in terest in land, building,81 structure, facility, or other improvement, all for the essential public purpose of providing82 educational facilities.83 (6) 'Qualified charter school organization' shall have the sam e meaning as set forth in84 Code Section 20-2-2095.1.85 (7) 'Renovation' or 'modernization' or both refers to construction projects which consist86 of the installation or replacem ent of major building components including lighting,87 heating, air-conditioning, plumbing, roofing, electrical, electronic, or flooring systems;88 millwork; cabinet work and fixed equipment; energy retrofit pac kages; or room-size89 modifications within an existing facility, but excluding routine maintenance and repair90 items or operations.91 S. B. 498 (SUB) - 4 - 26 LC 49 2821S 20-2-2095.21.92 (a) There is created a body corporate and politic to be known as the Georgia Charter93 School Facilities Authority which shall be deemed an instrument ality of the state and a94 public corporation; and by that name, style, and title such bod y may contract and be95 contracted with and bring and defend actions in all courts of this state. The authority shall96 consist of 15 members: the State School Superintendent, ex officio; the chairperson of the97 State Board of Education, ex officio; the state property officer, ex officio; the state auditor,98 ex officio; the executive director of the State Charter Schools Commission, ex officio; the99 director of the Office of Charter School Compliance, ex officio ; three members to be100 appointed by the Governor; three members to be appointed by the President of the Senate;101 and three members to be appointed by the Speaker of the House of Representatives. The102 Governor, the President of the Senate, and the Speaker of the H ouse of Representatives103 shall each appoint one member to serve until July 1, 2028, and two members to serve until104 July 1, 2030. Upon the expiration of each such initial terms, the terms of all succeeding105 members shall be for four years.106 (b) A majority of the members of the authority shall constitute a quorum. No vacancy on107 the authority shall impair the right of a majority of the appointed members from exercising108 all rights and performing all duties of the authority.109 (c) The members of the authority shall be accountable in all r espects as trustees. The110 authority shall keep suitable books and records of all actions and transactions and shall111 submit such books together with a statement of the authority's financial position to an112 independent auditing firm selected by the authority on or about the close of the state's fiscal113 year for the purpose of obtaining a certified audit of the authority's finances.114 (d) The authority shall make rules and regulations for its own government. The authority115 shall have perpetual existence. Any change in the name or comp osition of the authority116 shall in no way affect the vested rights of any person under th is part or impair the117 obligations of any contracts existing under this part.118 S. B. 498 (SUB) - 5 - 26 LC 49 2821S (e) The Attorney General shall provide legal services for the authority and in connection119 therewith Code Sections 45-15-13 through 45-15-16 shall be fully applicable.120 (f) The members of the commission shall not be compensated for their services on the121 commission but may be reimbursed for per diem and travel expenses in the same manner122 as provided for in Code Section 45-7-21.123 (g) Until such time as proceeds generated from the issuance of notes are adequate to cover124 the personnel and operational costs of the authority, the autho rity may withhold up to 5125 percent of the authority's total appropriation to cover personnel and operational costs.126 (h) The authority is assigned to the Georgia State Financing and Investment Commission127 for administrative purposes, which shall include providing .the authority with facilities,128 office space, telephones, furniture, office equipment, supplies, and such personnel as may129 be considered necessary to the proper functioning of the authority.130 20-2-2095.22.131 (a) The corporate purpose and the general nature of the business of the authority shall be132 assistance in constructing, extending, rehabilitating, repairin g, replacing, and renewing133 educational facilities necessary for educational purposes or necessary or incidental to such134 purposes by providing loans and other forms of financial and te chnical assistance to135 qualified charter school organizations to finance any project or pay the cost of any project.136 (b) The authority shall have power:137 (1) To have a seal and alter the same at its pleasure;138 (2) To adopt bylaws governing the conduct of business by the authority, the election and139 duties of officers of the authority, and other matters which th e authority determines to140 deal with in its bylaws;141 (3) To designate three or more of its number to constitute an executive committee who,142 to the extent provided in such resolution or in the bylaws of the authority, shall have and143 S. B. 498 (SUB) - 6 - 26 LC 49 2821S may exercise the powers of the authority in the management of the affairs and property144 of the authority and the exercise of its powers;145 (4) To make and execute contracts, lease agreements, and all other instruments necessary146 or convenient to exercise the powers of the authority or to further the public purpose for147 which the authority is created, such contracts, leases, or instruments to include contracts148 for construction, operation, management, or maintenance of projects and facilities owned149 by a charter school organization, a local government, the authority, or by the state or any150 state authority; and any and all local governments, departments, institutions, authorities,151 or agencies of the state are authorized to enter into contracts, leases, agreements, or other152 instruments with the authority upon such terms and to transfer real and personal property153 to the authority for such consideration and for such purposes a s the authority deems154 advisable;155 (5) To acquire by purchase, lease, or otherwise and to hold, lease, and dispose of real or156 personal property of every kind and character, or any interest therein, in furtherance of157 the public purpose of the authority;158 (6) To make loans to qualified charter school organizations to finance projects and to pay159 the cost of any project by qualified charter school organizatio ns and to adopt rules,160 regulations, and procedures for making such loans, including to fund a revolving loan161 fund;162 (7) To make loans to any qualified charter school organization for the cost or expense163 of any project or any part of the cost or expense of any projec t, which loans may be164 evidenced or secured by trust indentures, loan agreements, note s, mortgages, deeds to165 secure debt, trust deeds, security agreements, or assignments, on such terms and166 conditions as the authority shall determine to be reasonable in connection with such167 loans, including provision for the establishment and maintenance of reserve funds; and,168 in the exercise of powers granted by this part in connection with any project, the authority169 shall have the right and power to require the inclusion in any such trust indentures, loan170 S. B. 498 (SUB) - 7 - 26 LC 49 2821S agreement, note, mortgage, deed to secure debt, trust deed, sec urity agreement,171 assignment, or other instrument such provisions or requirements for guaranty of any172 obligations, insurance, construction, use, operation, maintenan ce, and financing of a173 project and such other terms and conditions as the authority ma y deem necessary or174 desirable;175 (8) To finance projects by loan, loan guarantee, lease, or otherwise, and to pay the cost176 of any project from any funds of the authority or from any cont ributions or loans by177 persons, corporations, partnerships, whether limited or general , or other entities, all of178 which the authority is authorized to receive, accept, and use;179 (9) To collect fees and charges in connection with its loans, loan guarantees,180 commitments, management services, and servicing including, but not limited to,181 reimbursements of costs of financing, as the authority shall determine to be reasonable182 and as shall be approved by the authority;183 (10) To lease to qualified charter school organizations any authority owned facilities or184 property or any state owned facilities or property which the authority is managing under185 contract with the state;186 (11) To acquire or contract to acquire from any person, firm, corporation, local187 government, federal or state agency, or corporation by grant, p urchase, or otherwise,188 leaseholds, real or personal property, or any interest therein; and to sell, assign, exchange,189 transfer, convey, lease, mortgage, or otherwise dispose of or e ncumber the same; and190 qualified charter school organization is authorized to grant, s ell, or otherwise alienate191 leaseholds, real and personal property, or any interest therein to the authority;192 (12) To apply for and to accept any gifts or grants or loan guarantees or loans of funds193 or property or financial or other aid in any form from the fede ral government or any194 agency or instrumentality thereof, or from the state or any age ncy or instrumentality195 thereof, or from any other source for any or all of the purposes specified in this part and196 to comply, subject to the provisions of this part, with the terms and conditions thereof;197 S. B. 498 (SUB) - 8 - 26 LC 49 2821S (13) To contract with state agencies or any qualified charter school organization for the198 use by the authority of any property or facilities or services of the state or any such state199 qualified charter school organization or for the use by any sta te agency or qualified200 charter school organization of any facilities or services of th e authority and such state201 agencies and qualified charter school organizations are authori zed to enter into such202 contracts;203 (14) As security for repayment of any obligations of the autho rity, to pledge, lease,204 mortgage, convey, assign, hypothecate, or otherwise encumber an y property of the205 authority including, but not limited to, real property, fixtures, personal property, and other206 funds and to execute any lease, trust indenture, trust agreemen t, agreement for the sale207 of the authority's obligations, loan agreement, mortgage, deed to secure debt, trust deed,208 security agreement, assignment, or other agreement or instrument as may be necessary209 or desirable, in the judgment of the authority, to secure any s uch obligations, which210 instruments or agreements may provide for foreclosure or forced sale of any property of211 the authority upon default in any obligation of the authority, either in payment of212 principal, premium, if any, or interest or in the performance o f any term or condition213 contained in any such agreement or instrument;214 (15) To use income earned on any investment for such corporate purposes of the215 authority as the authority in its discretion shall determine;216 (16) To incorporate one or more nonprofit corporations as subsidiary corporations of the217 authority for the purpose of carrying out any of the powers of the authority and to218 accomplish any of the purposes of the authority. Any such subsidiary corporation shall219 be a nonprofit corporation, a public body corporate and politic, a political subdivision of220 the state, and an instrumentality of the state and shall exerci se essential governmental221 functions. Any subsidiary corporations created pursuant to this power shall be created222 pursuant to Chapter 3 of Title 14, the 'Georgia Nonprofit Corpo ration Code,' and the223 Secretary of State shall be authorized to accept such filings. Upon dissolution of any224 S. B. 498 (SUB) - 9 - 26 LC 49 2821S subsidiary corporation of the authority, any assets shall revert to the authority or to any225 successor to the authority or, failing such succession, to the State of Georgia. The226 authority shall not be liable for the debts or obligations of any subsidiary corporation or227 for the actions or omissions to act of any subsidiary corporati on unless the authority228 expressly so consents;229 (17) To cooperate and act in conjunction with educational organizations; with agencies230 of the federal government and this state and local government; with other states and their231 political subdivisions; and with joint agencies thereof, and su ch state agencies, local232 government, and joint agencies are authorized and empowered to cooperate and act in233 conjunction and to enter into contracts or agreements with the authority and qualified234 charter school organizations to achieve or further the policies of the state declared in this235 part;236 (18) To procure insurance against any loss in connection with its property and other237 assets or obligations or to establish cash reserves to enable it to act as self-insurer against238 any and all such losses;239 (19) To lend any of the securities of the type described in this subsection;240 (20) To transfer to the state any funds of the authority determined by the authority to be241 in excess of those needed for its corporate purposes;242 (21) To make loan commitments and loans to qualified charter school organizations for243 educational facilities projects;244 (22) To exercise any power granted by the laws of this state t o public or private245 corporations which is not in conflict with the public purpose of the authority;246 (23) To do all things necessary or convenient to carry out the powers conferred by this247 part; and248 (24) To promulgate and adopt rules and regulations to carry out the purposes of this part.249 (c) The authority shall not have the power of eminent domain.250 S. B. 498 (SUB) - 10 - 26 LC 49 2821S 20-2-2095.23.251 (a) The authority may make loans to a qualified charter school organization to pay all or252 any part of the cost of:253 (1) A project, up to a maximum of the lesser of 20 percent of the project total or $2254 million, except as provided for in paragraph (2) of this subsection; and255 (2) A renovation or modernization project, up to a maximum of $200,000.00.256 (b) The authority shall not enter into any loan or loan commitment with a qualified charter257 school organization for a term that exceeds the earlier of the expiration date of such258 qualified charter school organization's current charter agreement with the State Board of259 Education or five years.260 (c) The authority and a qualified charter school organization may enter into such loan or261 other loan commitments as may be determined appropriate by the authority.262 (d) The authority may require as a condition of any loan to a qualified charter school263 organization that such qualified charter school organization shall perform any or all of the264 following:265 (1) Create and maintain a special fund or funds as additional security for the payment of266 any amounts becoming due under any agreement as shall be suffic ient to make such267 payment as the same shall become due and payable;268 (2) Create and maintain such other special funds as may be required by the authority; and269 (3) Such other acts, including the conveyance of real and personal property together with270 all right, title, or interest therein to the authority, as may be deemed necessary or desirable271 by the authority to secure the payment of the principal of and interest on notes or272 obligations and to provide for the remedies of the authority in the event of any default by273 such qualified charter school organization in such payment.274 (e) All qualified charter school organizations are authorized to perform such acts, take275 such action, adopt such proceedings, and make and carry out suc h contracts with the276 authority as may be contemplated by this part.277 S. B. 498 (SUB) - 11 - 26 LC 49 2821S (f) In connection with the making of any loan authorized by this part, the authority may278 fix and collect such fees and charges, including, but not limited to, the reimbursement of279 all costs of financing by the authority, as the authority shall determine to be reasonable.280 20-2-2095.24.281 (a) For the purposes of this Code section, the term 'lease agreement' means and includes282 a lease, operating lease rental agreement, usufruct, sale and lease back, or any other lease283 agreement having a term of not more than 50 years and concerning real, personal, or mixed284 property, any right, title, or interest therein by and between the state, the authority, a285 qualified charter school organization, or any combination thereof.286 (b) A qualified charter school organization may enter into a l ease agreement for the287 provision of educational facilities owned by the authority upon such terms and conditions288 as the authority shall determine to be reasonable including, bu t not limited to, the289 reimbursement of all costs of construction and financing and claims arising therefrom.290 (c) No lease agreement shall be deemed to be a contract subject to any law requiring that291 a contract shall be let only after receipt of competitive bids.292 (d) Any lease agreement may provide for the construction of an educational facility by the293 qualified charter school organization as agent for the authority. In such event, all contracts294 for such construction shall be let by such qualified charter sc hool organization in295 accordance with the provisions of law otherwise applicable to the letting of such contracts296 by such qualified charter school organization and with the prov isions of state law297 pertaining to prevailing wages, labor standards, and working ho urs. Any such lease298 agreement may contain provisions by which such qualified charte r school organization299 shall indemnify the authority against any and all damages resulting from acts or omissions300 to act on the part of such qualified charter school organizatio n or its officers, agents, or301 employees in constructing such facility or facilities, in letting any contracts in connection302 therewith, or in operating and maintaining the same.303 S. B. 498 (SUB) - 12 - 26 LC 49 2821S (e) Any lease agreement directly between the state or authorit y and a qualified charter304 school organization may contain provisions requiring the qualif ied charter school305 organization to perform any or all of the following:306 (1) Create and maintain a special fund or funds as additional security for the payment of307 any amounts becoming due under any agreement as shall be suffic ient to make such308 payment as the same shall become due and payable;309 (2) Create and maintain such other special funds as may be required by the authority; and310 (3) Such other acts and take such other action as may be deemed necessary and desirable311 by the authority to secure the complete and punctual performanc e by such qualified312 charter school organization of such lease agreements and to provide for the remedies of313 the authority in the event of a default by such qualified chart er school organization in314 such payment.315 20-2-2095.25.316 Neither the members of the authority nor any officer or employee of the authority acting317 on behalf thereof, while acting within the scope of his or her authority, shall be subject to318 any liability resulting from:319 (1) The construction, ownership, maintenance, or operation of any project financed with320 the assistance of the authority; or321 (2) Carrying out any of the powers expressly given in this part.322 20-2-2095.26.323 No notice, proceeding, or publication except those required in this part shall be necessary324 to the performance of any act authorized in this part; nor shall any such act be subject to325 referendum.326 S. B. 498 (SUB) - 13 - 26 LC 49 2821S 20-2-2095.27.327 No obligations of and no indebtedness incurred by the authority shall constitute an328 indebtedness or obligation or a pledge of the faith and credit of the State of Georgia or of329 its agencies; nor shall any act of the authority in any manner constitute or result in the330 creation of an indebtedness of the state or its agencies or a cause of action against the state331 or its agencies.332 20-2-2095.28.333 It is found, determined, and declared that the creation of this authority and the carrying out334 of its corporate purposes is in all respects for the benefit of the people of the state and that335 the authority is an institution of purely public charity and will be performing an essential336 governmental function in the exercise of the power conferred upon it by this part. For such337 reasons, the state covenants with the holders from time to time of obligations issued under338 this part that the authority shall not be required to pay any taxes or assessments imposed339 by the state or any of its counties, municipal corporations, political subdivisions, or taxing340 districts upon any property acquired by the authority or under its jurisdiction, control,341 possession, or supervision or leased by it to others, or upon its activities in the operation342 or maintenance of any such property or on any income derived by the authority in the form343 of fees, recording fees, rentals, charges, purchase price, installments, or otherwise, and that344 the notes of the authority, their transfer, and the income ther efrom shall at all times be345 exempt from taxation within the state. The tax exemption provided in this part shall not346 include any exemption from sales and use tax on property purchased by the authority or for347 use by the authority.348 20-2-2095.29.349 The authority shall have all rights afforded the state by virtu e of the Constitution of the350 United States, and nothing in this part shall be construed to remove any such rights.351 S. B. 498 (SUB) - 14 - 26 LC 49 2821S 20-2-2095.30.352 This part, being for the welfare of this state and its inhabitants, shall be liberally construed353 to effect the purposes specified in this part.354 20-2-2095.31.355 (a) In the event of a failure of any qualified charter school organization to collect and remit356 in full all amounts due to the authority and all amounts due to others which involve the357 authority, on the date such amounts are due under the terms of any note of the qualified358 charter school organization, it shall be the duty of the authority to notify the state treasurer359 who shall withhold all funds of the state and all funds adminis tered by the state and its360 agencies, boards, and instrumentalities allotted to such qualif ied charter school361 organization until such qualified charter school organization has collected and remitted in362 full all sums due and cured or remedied all defaults on any such note.363 (b) Nothing contained in this Code section shall mandate the w ithholding of funds364 allocated to a qualified charter school organization which would violate contracts to which365 the state is a party, the requirements of federal law imposed on the state, or judgments of366 any court binding the state."367 SECTION 2.368 Article 2 of Chapter 17 of Title 50 of the Official Code of Georgia Annotated, the "Georgia369 State Financing and Investment Commission Act," is amended in C ode Section 50-17-22,370 relating to the State Financing and Investment Commission, by r evising subsection (a) as371 follows:372 "(a) Responsibilities. Subject to the limitations contained in this article, the commission373 shall be responsible for the issuance of all public debt incurred hereunder, for the proper374 application of the proceeds of such debt to the purposes for wh ich it is incurred, for the375 proper application of an appropriation to the commission for capital outlay to the purpose376 S. B. 498 (SUB) - 15 - 26 LC 49 2821S for which it is appropriated, and for the application and admin istration of this article;377 provided, however, that the proceeds of guaranteed revenue obligations shall be paid to the378 issuer thereof, and such proceeds and the application thereof shall be the responsibility of379 the issuer. The commission shall also be responsible for the p roper disbursement of an380 appropriation to it for public school capital outlay, including charter school capital outlay,381 and the commission and the State Board of Education will be concurrently responsible for382 its proper application. The commission shall be responsible for the issuance of guaranteed383 revenue debt, except that bonds themselves evidencing such debt shall be in the name of384 the instrumentality of this state issuing the same and shall be issued and executed in385 accordance with the laws relative to such instrumentality and the applicable provisions of386 this article."387 SECTION 3.388 All laws and parts of laws in conflict with this Act are repealed.389 S. B. 498 (SUB) - 16 -