§ 159‑111. Additionalsecurity for project development financing debt instruments.
(a) In order to provideadditional security for debt instruments issued pursuant to this Article, theissuing unit of local government may pledge its faith and credit for thepayment of the principal of and interest on the debt instruments. Before such apledge may be given, the unit shall follow the procedures and meet therequirements for approval of general obligation bonds under Article 4 of thisChapter. The unit shall also follow the procedures and meet the requirements ofthis Article. If debt instruments are issued pursuant to this Article and arealso secured by a pledge of the issuing unit's faith and credit, the debtinstruments are subject to G.S. 159‑112 rather than G.S. 159‑65.
(b) In order to provideadditional security for debt instruments issued pursuant to this Article, andin lieu of pledging its faith and credit for that purpose pursuant tosubsection (a) of this section, a unit of local government may pledge or granta security interest in any available sources of revenues of the unit, includingspecial assessments against property within the development financing districtmade by the unit pursuant to Article 9 of Chapter 153A of the General Statutesor Article 10 of Chapter 160A of the General Statutes, as long as doing so doesnot constitute a pledge of the unit's taxing power. In addition, to the extentthe generation of the revenues is within the power of the unit, the unit mayenter into covenants to take action in order to generate the revenues, as longas the covenant does not constitute a pledge of the unit's taxing power. Inaddition, the unit may pledge, mortgage, or grant a security interest in all ora portion of the real and personal property being financed or improved with theproceeds of the project development financing debt instrument. Property subjectto a mortgage, deed of trust, security interest, or similar lien pursuant tothis subsection may be sold at foreclosure in any manner permitted by theinstrument creating the encumbrance, without compliance with any otherprovision of law regarding the disposition of publicly owned property.
(c) No agreement orcovenant may contain a nonsubstitution clause that restricts the right of theissuing unit of local government to replace or provide a substitute for anyproject financed pursuant to this subsection.
(d) The obligation of aunit of local government with respect to the sources of payment shall bespecifically identified in the proceedings of the governing body authorizingthe unit to issue the debt instruments. The sources of payment so specificallyidentified and then held or thereafter received by the unit or any fiduciary ofthe unit are immediately subject to the lien of the proceedings without anyphysical delivery of the sources or further act. The lien is valid and bindingas against all parties having claims of any kind against a unit without regardto whether the parties have notice of the lien. The proceedings or any otherdocument or action by which the lien on a source of payment is created need notbe filed or recorded in any manner other than as provided in this Article.
(e) A unit of localgovernment that issues project development financing debt instruments may agreein the proceedings relating to an issue of project development financing debtinstruments to any one or more of the following:
(1) That in preparingits budget for any fiscal year its finance officer shall include in theproposed budget an appropriation for the amount due on such debt instrumentsduring the next budget year.
(2) In the event anyportion of a reserve fund relating to such debt instruments is less than anyreserve requirement relating thereto, including as a result of a use of thereserve fund for the payment of amounts due on such debt instrument, that inpreparing its budget for any fiscal year its finance officer shall include inthe proposed budget an appropriation for the amount required to restore suchreserve fund to its required level during the next budget year.
(3) That if there is anysurplus in any year in any fund or account of such unit of local government, itwill consider appropriating such surplus for one or both of the uses set forthin subdivision (1) or (2) of this subsection.
In every instance, the unit oflocal government shall expressly state that its agreement under this provisionis subject to a decision by its governing body to make such appropriation andthat such an agreement does not create an obligation on such a governing bodyto make such appropriation.
(f) A unit of localgovernment that enters into an increment agreement for the purposes describedin G.S. 159‑107(d)(2) may include in such increment agreement any one ormore of the following:
(1) That in preparingits budget for any fiscal year its finance officer shall include in theproposed budget an appropriation for that portion of the amount due on suchdebt instruments during the next budget year which represents the expectedpercentage of such amount that would come from the taxes levied by such unit oflocal government.
(2) In the event anyportion of a reserve fund relating to such debt instruments is less than anyreserve requirement relating thereto, including as a result of a use of thereserve fund for the payment of amounts due on such debt instrument, that inpreparing its budget for any fiscal year its finance officer shall include inthe proposed budget an appropriation for some portion or all of the amountrequired to restore such reserve fund to its required level during the nextbudget year.
(3) That if there is anysurplus in any year in any fund or account of such unit of local government, itwill consider appropriating such surplus for one or both of the uses set forthin subdivision (1) or (2) of this subsection.
In every instance, the unit oflocal government shall expressly state that its agreement under this provisionis subject to a decision by its governing body to make such appropriation andthat such an agreement does not create an obligation on such a governing bodyto make such appropriation. (2003‑403, s. 2; 2005‑238, s. 6; 2009‑525,s. 3.)
§ 159‑111. Additionalsecurity for project development financing debt instruments.
(a) In order to provideadditional security for debt instruments issued pursuant to this Article, theissuing unit of local government may pledge its faith and credit for thepayment of the principal of and interest on the debt instruments. Before such apledge may be given, the unit shall follow the procedures and meet therequirements for approval of general obligation bonds under Article 4 of thisChapter. The unit shall also follow the procedures and meet the requirements ofthis Article. If debt instruments are issued pursuant to this Article and arealso secured by a pledge of the issuing unit's faith and credit, the debtinstruments are subject to G.S. 159‑112 rather than G.S. 159‑65.
(b) In order to provideadditional security for debt instruments issued pursuant to this Article, andin lieu of pledging its faith and credit for that purpose pursuant tosubsection (a) of this section, a unit of local government may pledge or granta security interest in any available sources of revenues of the unit, includingspecial assessments against property within the development financing districtmade by the unit pursuant to Article 9 of Chapter 153A of the General Statutesor Article 10 of Chapter 160A of the General Statutes, as long as doing so doesnot constitute a pledge of the unit's taxing power. In addition, to the extentthe generation of the revenues is within the power of the unit, the unit mayenter into covenants to take action in order to generate the revenues, as longas the covenant does not constitute a pledge of the unit's taxing power. Inaddition, the unit may pledge, mortgage, or grant a security interest in all ora portion of the real and personal property being financed or improved with theproceeds of the project development financing debt instrument. Property subjectto a mortgage, deed of trust, security interest, or similar lien pursuant tothis subsection may be sold at foreclosure in any manner permitted by theinstrument creating the encumbrance, without compliance with any otherprovision of law regarding the disposition of publicly owned property.
(c) No agreement orcovenant may contain a nonsubstitution clause that restricts the right of theissuing unit of local government to replace or provide a substitute for anyproject financed pursuant to this subsection.
(d) The obligation of aunit of local government with respect to the sources of payment shall bespecifically identified in the proceedings of the governing body authorizingthe unit to issue the debt instruments. The sources of payment so specificallyidentified and then held or thereafter received by the unit or any fiduciary ofthe unit are immediately subject to the lien of the proceedings without anyphysical delivery of the sources or further act. The lien is valid and bindingas against all parties having claims of any kind against a unit without regardto whether the parties have notice of the lien. The proceedings or any otherdocument or action by which the lien on a source of payment is created need notbe filed or recorded in any manner other than as provided in this Article.
(e) A unit of localgovernment that issues project development financing debt instruments may agreein the proceedings relating to an issue of project development financing debtinstruments to any one or more of the following:
(1) That in preparingits budget for any fiscal year its finance officer shall include in theproposed budget an appropriation for the amount due on such debt instrumentsduring the next budget year.
(2) In the event anyportion of a reserve fund relating to such debt instruments is less than anyreserve requirement relating thereto, including as a result of a use of thereserve fund for the payment of amounts due on such debt instrument, that inpreparing its budget for any fiscal year its finance officer shall include inthe proposed budget an appropriation for the amount required to restore suchreserve fund to its required level during the next budget year.
(3) That if there is anysurplus in any year in any fund or account of such unit of local government, itwill consider appropriating such surplus for one or both of the uses set forthin subdivision (1) or (2) of this subsection.
In every instance, the unit oflocal government shall expressly state that its agreement under this provisionis subject to a decision by its governing body to make such appropriation andthat such an agreement does not create an obligation on such a governing bodyto make such appropriation.
(f) A unit of localgovernment that enters into an increment agreement for the purposes describedin G.S. 159‑107(d)(2) may include in such increment agreement any one ormore of the following:
(1) That in preparingits budget for any fiscal year its finance officer shall include in theproposed budget an appropriation for that portion of the amount due on suchdebt instruments during the next budget year which represents the expectedpercentage of such amount that would come from the taxes levied by such unit oflocal government.
(2) In the event anyportion of a reserve fund relating to such debt instruments is less than anyreserve requirement relating thereto, including as a result of a use of thereserve fund for the payment of amounts due on such debt instrument, that inpreparing its budget for any fiscal year its finance officer shall include inthe proposed budget an appropriation for some portion or all of the amountrequired to restore such reserve fund to its required level during the nextbudget year.
(3) That if there is anysurplus in any year in any fund or account of such unit of local government, itwill consider appropriating such surplus for one or both of the uses set forthin subdivision (1) or (2) of this subsection.
In every instance, the unit oflocal government shall expressly state that its agreement under this provisionis subject to a decision by its governing body to make such appropriation andthat such an agreement does not create an obligation on such a governing bodyto make such appropriation. (2003‑403, s. 2; 2005‑238, s. 6; 2009‑525,s. 3.)
§ 159‑111. Additionalsecurity for project development financing debt instruments.
(a) In order to provideadditional security for debt instruments issued pursuant to this Article, theissuing unit of local government may pledge its faith and credit for thepayment of the principal of and interest on the debt instruments. Before such apledge may be given, the unit shall follow the procedures and meet therequirements for approval of general obligation bonds under Article 4 of thisChapter. The unit shall also follow the procedures and meet the requirements ofthis Article. If debt instruments are issued pursuant to this Article and arealso secured by a pledge of the issuing unit's faith and credit, the debtinstruments are subject to G.S. 159‑112 rather than G.S. 159‑65.
(b) In order to provideadditional security for debt instruments issued pursuant to this Article, andin lieu of pledging its faith and credit for that purpose pursuant tosubsection (a) of this section, a unit of local government may pledge or granta security interest in any available sources of revenues of the unit, includingspecial assessments against property within the development financing districtmade by the unit pursuant to Article 9 of Chapter 153A of the General Statutesor Article 10 of Chapter 160A of the General Statutes, as long as doing so doesnot constitute a pledge of the unit's taxing power. In addition, to the extentthe generation of the revenues is within the power of the unit, the unit mayenter into covenants to take action in order to generate the revenues, as longas the covenant does not constitute a pledge of the unit's taxing power. Inaddition, the unit may pledge, mortgage, or grant a security interest in all ora portion of the real and personal property being financed or improved with theproceeds of the project development financing debt instrument. Property subjectto a mortgage, deed of trust, security interest, or similar lien pursuant tothis subsection may be sold at foreclosure in any manner permitted by theinstrument creating the encumbrance, without compliance with any otherprovision of law regarding the disposition of publicly owned property.
(c) No agreement orcovenant may contain a nonsubstitution clause that restricts the right of theissuing unit of local government to replace or provide a substitute for anyproject financed pursuant to this subsection.
(d) The obligation of aunit of local government with respect to the sources of payment shall bespecifically identified in the proceedings of the governing body authorizingthe unit to issue the debt instruments. The sources of payment so specificallyidentified and then held or thereafter received by the unit or any fiduciary ofthe unit are immediately subject to the lien of the proceedings without anyphysical delivery of the sources or further act. The lien is valid and bindingas against all parties having claims of any kind against a unit without regardto whether the parties have notice of the lien. The proceedings or any otherdocument or action by which the lien on a source of payment is created need notbe filed or recorded in any manner other than as provided in this Article.
(e) A unit of localgovernment that issues project development financing debt instruments may agreein the proceedings relating to an issue of project development financing debtinstruments to any one or more of the following:
(1) That in preparingits budget for any fiscal year its finance officer shall include in theproposed budget an appropriation for the amount due on such debt instrumentsduring the next budget year.
(2) In the event anyportion of a reserve fund relating to such debt instruments is less than anyreserve requirement relating thereto, including as a result of a use of thereserve fund for the payment of amounts due on such debt instrument, that inpreparing its budget for any fiscal year its finance officer shall include inthe proposed budget an appropriation for the amount required to restore suchreserve fund to its required level during the next budget year.
(3) That if there is anysurplus in any year in any fund or account of such unit of local government, itwill consider appropriating such surplus for one or both of the uses set forthin subdivision (1) or (2) of this subsection.
In every instance, the unit oflocal government shall expressly state that its agreement under this provisionis subject to a decision by its governing body to make such appropriation andthat such an agreement does not create an obligation on such a governing bodyto make such appropriation.
(f) A unit of localgovernment that enters into an increment agreement for the purposes describedin G.S. 159‑107(d)(2) may include in such increment agreement any one ormore of the following:
(1) That in preparingits budget for any fiscal year its finance officer shall include in theproposed budget an appropriation for that portion of the amount due on suchdebt instruments during the next budget year which represents the expectedpercentage of such amount that would come from the taxes levied by such unit oflocal government.
(2) In the event anyportion of a reserve fund relating to such debt instruments is less than anyreserve requirement relating thereto, including as a result of a use of thereserve fund for the payment of amounts due on such debt instrument, that inpreparing its budget for any fiscal year its finance officer shall include inthe proposed budget an appropriation for some portion or all of the amountrequired to restore such reserve fund to its required level during the nextbudget year.
(3) That if there is anysurplus in any year in any fund or account of such unit of local government, itwill consider appropriating such surplus for one or both of the uses set forthin subdivision (1) or (2) of this subsection.
In every instance, the unit oflocal government shall expressly state that its agreement under this provisionis subject to a decision by its governing body to make such appropriation andthat such an agreement does not create an obligation on such a governing bodyto make such appropriation. (2003‑403, s. 2; 2005‑238, s. 6; 2009‑525,s. 3.)
