State Codes and Statutes

Statutes > North-carolina > Chapter_159I > GS_159I-30

§ 159I‑30.  Additionalpowers of units of local government; issuance of special obligation bonds andnotes.

(a)        Authorization. –Any unit of local government may borrow money for the purpose of financing orrefinancing its cost of the acquisition or construction of a project and mayissue special obligation bonds and notes, including bond anticipation notes andrenewal notes, pursuant to the provisions of this section and the applicableprovisions of this Chapter for this purpose.

(b)        Pledge. – Each unitof local government may pledge for the payment of a special obligation bond ornote any available source or sources of revenues of the unit and, to the extentthe generation of the revenues is within the power of the unit, may enter intocovenants to take action in order to generate the revenues, as long as thepledge of these sources for payments or the covenant to generate revenues doesnot constitute a pledge of the unit's taxing power.

No agreement or covenant shallcontain a nonsubstitution clause which restricts the right of a unit of localgovernment to replace or provide a substitute for any project financed pursuantto this section.

The sources of payment pledgedby a unit of local government shall be specifically identified in theproceedings of the governing body authorizing the unit to issue the specialobligation bonds or notes.

After the issuance of specialobligation bonds or notes, the governing body of the issuing unit may identifyone or more additional sources of payment for the bonds or notes and pledgethese sources, as long as the pledge of the sources does not constitute apledge of the taxing power of the unit. Each source of additional paymentpledged shall be specifically identified in the proceedings of the governingbody of the unit pledging the source. The governing body of the unit may notpledge an additional source of revenue pursuant to this paragraph unless thepledge is first approved by the Local Government Commission pursuant to theprocedures provided in subsection (i) of this section.

The sources of payment sopledged and then held or thereafter received by a unit or any fiduciary thereofshall immediately be subject to the lien of the pledge without any physicaldelivery of the sources or further act. The lien shall be valid and binding asagainst all parties having claims of any kind in tort, contract, or otherwiseagainst a unit without regard to whether the parties have notice thereof. Theproceedings or any other document or action by which the lien on a source ofpayment is created need not be filed or recorded in any manner other than asprovided in this Chapter.

(b1)      Security Interest. –In connection with issuing its special obligation bonds or special obligationbond anticipation notes under this Chapter, a unit of local government maygrant a security interest in the project financed, or in all or some portion ofthe property on which the project is located, or in both. If a unit of localgovernment determines to provide additional security as authorized by this subsection,the following conditions apply:

(1)        No bond order maycontain a nonsubstitution clause that restricts the right of a unit of localgovernment to:

a.         Continue to providea service or activity; or

b.         Replace or provide asubstitute for any municipal purpose financed pursuant to the bond order.

(2)        A bond order issubject to approval by the Commission under Article 8 of Chapter 159 of theGeneral Statutes if it:

a.         Meets the standardsset out in G.S. 159‑148(a)(1), 159‑148(a)(2), and 159‑148(a)(3),or involves the construction or repair of fixtures or improvements on realproperty; and

b.         Is not exempted fromthe provisions of that Article by one of the exemptions contained in G.S. 159‑148(b)(1)and (2).

TheCommission approval required by this subdivision is in addition to theCommission approval required by subsection (i) of this section.

(3)        No deficiencyjudgment may be rendered against any unit of local government in any action forbreach of a bond order authorized by this section, and the taxing power of aunit of local government is not and may not be pledged directly or indirectlyto secure any moneys due under a bond order authorized by this section. Thisprohibition does not impair the right of the holder of a bond or note toexercise a remedy with respect to the revenues pledged to secure the bond ornote, as provided in the bond order, resolution, or trust agreement under whichthe bond or note is authorized and secured. A unit of local government may, inits sole discretion, use tax proceeds to pay the principal of or interest orpremium on bonds or notes, but shall not pledge or agree to do so.

(4)        Before granting asecurity interest under this subsection, a unit of local government shall holda public hearing on the proposed security interest. A notice of the publichearing shall be published once at least 10 days before the date fixed for thehearing.

(c)        Payment; Call. –Any bond anticipation notes may be made payable from the proceeds of bonds orrenewal notes or, in the event bond or renewal note proceeds are not available,the notes may be paid from any sources available under G.S. 159I‑30(b).Bonds or notes may also be paid from the proceeds of any credit facility. Thebonds and notes of each issue shall be dated and may be made redeemable priorto maturity at the option of the unit of local government or otherwise, at suchprice or prices, on such date or dates, and upon such terms and conditions asmay be determined by the unit. The bonds or notes may also be made payable fromtime to time on demand or tender for purchase by the owner, upon terms andconditions determined by the unit.

(d)        Interest. – Theinterest payable by a unit on any special obligation bonds or notes may be atsuch rate or rates, including variable rates as authorized in this section, asmay be determined by the Local Government Commission with the approval of thegoverning body of the unit. This approval may be given as the governing body ofthe unit may direct, including, without limitation, a certificate signed by a representativeof the unit designated by the governing body of the unit.

(e)        Nature ofObligation. – Special obligation bonds and notes shall be special obligationsof the unit of local government issuing them. The principal of, and interestand any premium on, special obligation bonds and notes shall be secured solelyby any one or more of the sources of payment authorized by this section as maybe pledged in the proceedings, resolution, or trust agreement under which theyare authorized or secured. Neither the faith and credit nor the taxing power ofthe unit of local government are pledged for the payment of the principal of,or interest or any premium on, any special obligation bonds or notes, and noowner of special obligation bonds or notes has the right to compel the exerciseof the taxing power by the unit in connection with any default thereon. Everyspecial obligation bond and note shall recite in substance that the principaland interest and any premium on the bond or note are secured solely by thesources of payment pledged in the bond order, resolution, or trust agreementunder which it is authorized or secured. The following limitations apply topayment from the specified sources:

(1)        Any such use ofthese sources will not constitute a pledge of the unit's taxing power; and

(2)        The unit is notobligated to pay the principal or interest or premium except from thesesources.

(f)         Details. – Infixing the details of bonds or notes, the unit of local government may providethat any of the bonds or notes may:

(1)        Be made payable fromtime to time on demand or tender for purchase by the owner thereof as long as acredit facility supports the bonds or notes, unless the Local GovernmentCommission specifically determines that a credit facility is not required upona finding and determination by the Local Government Commission that the absenceof a credit facility will not materially and adversely affect the financialposition of the unit and the marketing of the bonds or notes at a reasonableinterest cost to the unit;

(2)        Be additionallysupported by a credit facility;

(3)        Be made subject toredemption or a mandatory tender for purchase prior to maturity;

(4)        Bear interest at arate or rates that may vary for such period or periods of time, all as may beprovided in the proceedings providing for the issuance of the bonds or notesincluding, without limitation, such variations as may be permitted pursuant toa par formula; and

(5)        Be made the subjectof a remarketing agreement whereby an attempt is made to remarket the bonds ornotes to new purchasers prior to their presentment for payment to the providerof the credit facility or to the unit.

(g)        Definitions. – Thefollowing definitions apply in this section:

(1)        Credit facility. –An agreement entered into by the unit with a bank, a savings and loanassociation, or another banking institution; an insurance company, areinsurance company, a surety company, or another insurance institution; acorporation, an investment banking firm, or another investment institution; orany financial institution, providing for prompt payment of all or any part ofthe principal, or purchase price (whether at maturity, presentment, or tenderfor purchase, redemption, or acceleration), redemption premium, if any, andinterest on any bonds or notes payable on demand or tender by the owner, inconsideration of the unit agreeing to repay the provider of the credit facilityin accordance with the terms and provisions of the agreement; the provider ofany credit facility may be located either within or without the United Statesof America.

(2)        Par formula. – Anyprovision or formula adopted by the unit to provide for the adjustment, fromtime to time of the interest rate or rates borne by any bonds or notesincluding:

a.         A provision providingfor such adjustment so that the purchase price of such bonds or notes in theopen market would be as close to par as possible;

b.         A provisionproviding for such adjustment based upon a percentage or percentages of a primerate or base rate, which percentage or percentages may vary or be applied fordifferent periods of time; or

c.         Any other provisionas the unit may determine to be consistent with this section and the applicableprovisions of this Chapter and does not materially and adversely affect thefinancial position of the unit and the marketing of the bonds or notes at areasonable interest cost to the unit.

(3)        Project. – Any ofthe following:

a.         A project as definedin G.S. 159I‑3.

b.         Any of the followingas defined in S.L. 1998‑132: water supply systems, water conservationprojects, water reuse projects, wastewater collection systems, and wastewatertreatment works.

c.         With respect to acity, any service or facility authorized by G.S. 160A‑536 and provided ina municipal service district.

(g1)      Credit Facility. –The obligation of a unit of local government under a credit facility to repayany drawing thereunder may be made payable and otherwise secured, to the extentapplicable, as provided in this section.

(h)        Term; Form. – Notesshall mature at such time or times and bonds shall mature, not exceeding 40years from their date or dates, as may be determined by the unit of localgovernment, except that no such maturity dates may exceed the maximum maturityperiods prescribed by the Local Government Commission pursuant to G.S. 159‑122,as it may be amended from time to time. The unit shall determine the form andmanner of execution of the bonds or notes, including any interest coupons to beattached thereto, and shall fix the denomination or denominations and the placeor places of payment of principal and interest, which may be any bank or trustcompany within or without the United States. In case any officer of the unitwhose signature, or a facsimile of whose signature, appears on any bonds or notesor coupons, if any, ceases to be the officer before delivery thereof, thesignature or facsimile shall nevertheless be valid and sufficient for allpurposes the same as if the officer had remained in office until the delivery.Any bond or note or coupon may bear the facsimile signatures of such personswho at the actual time or the execution thereof were the proper officers tosign although at the date of the bond or note or coupon these persons may nothave been the proper officers. The unit may also provide for the authenticationof the bonds or notes by a trustee or other authenticating agent. The bonds ornotes may be issued as certificated or uncertificated obligations or both, andin coupon or in registered form, or both, as the unit may determine, andprovision may be made for the registration of any coupon bonds or notes as toprincipal alone and also as to both principal and interest, and for thereconversion into coupon bonds or notes of any bonds or notes registered as toboth principal and interest, and for the interchange of registered and couponbonds or notes. Any system for registration may be established as the unit maydetermine.

(i)         Local GovernmentCommission Approval. – No bonds or notes may be issued by a unit of localgovernment under this section unless the issuance is approved and the bonds ornotes are sold by the Local Government Commission as provided in this sectionand the applicable provisions of this Chapter. The unit shall file with theSecretary of the Local Government Commission an application requesting approvalof the issuance of the bonds or notes, which application shall contain suchinformation and shall have attached to it such documents concerning theproposed financing as the Secretary of the Local Government Commission mayrequire. The Commission may prescribe the form of the application. Before theSecretary accepts the application, the Secretary may require the governing bodyof the unit or its representatives to attend a preliminary conference, at whichtime the Secretary or the deputies of the Secretary may informally discuss theproposed issue and the timing of the steps taken in issuing the specialobligation bonds or notes.

In determining whether aproposed bond or note issue should be approved, the Local Government Commissionmay consider, to the extent applicable as shall be determined by the LocalGovernment Commission, the criteria set forth in G.S. 159‑52 and G.S. 159‑86,as either may be amended from time to time, as well as the effect of theproposed financing upon any scheduled or proposed sale of obligations by theState or by any of its agencies or departments or by any unit of localgovernment in the State. The Local Government Commission shall approve theissuance of the bonds or notes if, upon the information and evidence itreceives, it finds and determines that the proposed financing will satisfy suchcriteria and will effect the purposes of this section and the applicableprovisions of this Chapter. An approval of an issue shall not be regarded as anapproval of the legality of the issue in any respect. A decision by the LocalGovernment Commission denying an application is final.

Upon the filing with the LocalGovernment Commission of a written request of the unit requesting that itsbonds or notes be sold, the bonds or notes may be sold by the Local GovernmentCommission in such manner, either at public or private sale, and for such priceor prices as the Local Government Commission shall determine to be in the bestinterests of the unit and to effect the purposes of this section and theapplicable provisions of this Chapter, if the sale is approved by the unit.

(j)         Proceeds. – Theproceeds of any bonds or notes shall be used solely for the purposes for whichthe bonds or notes were issued and shall be disbursed in such manner and undersuch restrictions, if any, as the unit may provide in the resolutionauthorizing the issuance of, or in any trust agreement securing, the bonds ornotes.

(k)        Interim Documents;Replacement. – Prior to the preparation of definitive bonds, the unit may issueinterim receipts or temporary bonds, with or without coupons, exchangeable fordefinitive bonds when definitive bonds have been executed and are available fordelivery. The unit may also provide for the replacement of any bonds or noteswhich shall become mutilated or shall be destroyed or lost.

(l)         No OtherConditions. – Bonds or notes may be issued under the provisions of this sectionand the applicable provisions of this Chapter without obtaining, except asotherwise expressly provided in this section and the applicable provisions ofthis Chapter, the consent of any department, division, commission, board, body,bureau, or agency of the State and without any other proceedings or thehappening of any conditions or things other than those proceedings, conditions,or things that are specifically required by this section, the applicableprovisions of this Chapter, and the provisions of the resolution authorizingthe issuance of, or any trust agreement securing, the bonds or notes.

(m)       Trust. – In thediscretion of the unit of local government, any bonds and notes issued underthe provisions of this section may be secured by a trust agreement by andbetween the unit and a corporate trustee or by a resolution providing for theappointment of a corporate trustee. Bonds and notes may also be issued under anorder or resolution without a corporate trustee. The corporate trustee may be,in either case any trust company or bank having the powers of a trust companywithin or without the State. The trust agreement or resolution may pledge orassign such sources of revenue as may be permitted under this section. Thetrust agreement or resolution may contain such provisions for protecting andenforcing the rights and remedies of the owners of any bonds or notes issuedthereunder as may be reasonable and proper and not in violation of law,including covenants setting forth the duties of the unit in respect of thepurposes to which bond or note proceeds may be applied, the disposition andapplication of the revenues of the unit, the duties of the unit with respect tothe project, the disposition of any charges and collection of any revenues andadministrative charges, the terms and conditions of the issuance of additionalbonds and notes, and the custody, safeguarding, investment, and application ofall moneys. All bonds and notes issued under this section shall be equally andratably secured by a lien upon the revenues pledged in the trust agreement orresolution, without priority by reasons of number, or dates of bonds or notes,execution, or delivery, in accordance with the provision of this section and ofthe trust agreement or resolution, except that the unit may provide in thetrust agreement or resolution that bonds or notes issued pursuant theretoshall, to the extent and in the manner prescribed in the trust agreement orresolution, be subordinated and junior in standing, with respect to the paymentof principal and interest and to the security thereof, to any other bonds ornotes. It shall be lawful for any bank or trust company that may act asdepository of the proceeds of bonds or notes, revenues, or any other moneyhereunder to furnish such indemnifying bonds or to pledge such securities asmay be required by the unit. Any trust agreement or resolution may set out therights and remedies of the owners of any bonds or notes and of any trustee, andmay restrict the individual rights of action by the owners. In addition to theforegoing, any trust agreement or resolution may contain such other provisionsas the unit may deem reasonable and proper for the security of the owners ofany bonds or notes. Expenses incurred in carrying out the provisions of anytrust agreement or resolution may be treated as a part of the cost of anyproject or as an administrative charge and may be paid from the revenues orfrom any other funds available.

The State does pledge to, andagree with, the holders of any bonds or notes issued by any unit that so longas any of the bonds or notes are outstanding and unpaid the State will notlimit or alter the rights vested in the unit at the time of issuance of thebonds or notes to set the terms and conditions of the bonds or notes and tofulfill the terms of any agreements made with the bondholders or noteholders.The State shall in no way impair the rights and remedies of the bondholders ornoteholders until the bonds or notes and all costs and expenses in connectionwith any action or proceedings by or on behalf of the bondholders ornoteholders, are fully paid, met, and discharged.

(n)        ApplicableProvisions. – The provisions of G.S. 159I‑15(a), (d), and (e) relating tothe Agency and its bonds and notes shall apply to a unit of local governmentand its bonds and notes issued under this section and the applicable provisionsof this Chapter, except that the source or sources of revenue pledged to paybonds and notes of a unit of local government shall be limited as provided inthis section.

The provisions of G.S. 159I‑17relating to the Agency and its trust funds and investments shall apply to aunit of local government and its trust funds and investments, except that anysuch moneys of a unit shall be deposited and invested only as provided in G.S.159‑30, as it may be amended from time to time.

The provisions of G.S. 159I‑18,159I‑19, 159I‑20, and 159I‑23 relating to remedies, theUniform Commercial Code, investment eligibility, and tax exemption, as theyrelate to the Agency's bonds and notes, shall apply to a unit of localgovernment and its bonds and notes. (1989, c. 756, s. 1; 1989 (Reg. Sess., 1990), c. 1004,s. 26; c. 1024, s. 38(e); 1995 (Reg. Sess., 1996), c. 742, s. 39; c. 743, s.26; 1997‑6, s. 20; 1997‑307, s. 1; 2001‑238, s. 1; 2004‑151,ss. 2, 3.)

State Codes and Statutes

Statutes > North-carolina > Chapter_159I > GS_159I-30

§ 159I‑30.  Additionalpowers of units of local government; issuance of special obligation bonds andnotes.

(a)        Authorization. –Any unit of local government may borrow money for the purpose of financing orrefinancing its cost of the acquisition or construction of a project and mayissue special obligation bonds and notes, including bond anticipation notes andrenewal notes, pursuant to the provisions of this section and the applicableprovisions of this Chapter for this purpose.

(b)        Pledge. – Each unitof local government may pledge for the payment of a special obligation bond ornote any available source or sources of revenues of the unit and, to the extentthe generation of the revenues is within the power of the unit, may enter intocovenants to take action in order to generate the revenues, as long as thepledge of these sources for payments or the covenant to generate revenues doesnot constitute a pledge of the unit's taxing power.

No agreement or covenant shallcontain a nonsubstitution clause which restricts the right of a unit of localgovernment to replace or provide a substitute for any project financed pursuantto this section.

The sources of payment pledgedby a unit of local government shall be specifically identified in theproceedings of the governing body authorizing the unit to issue the specialobligation bonds or notes.

After the issuance of specialobligation bonds or notes, the governing body of the issuing unit may identifyone or more additional sources of payment for the bonds or notes and pledgethese sources, as long as the pledge of the sources does not constitute apledge of the taxing power of the unit. Each source of additional paymentpledged shall be specifically identified in the proceedings of the governingbody of the unit pledging the source. The governing body of the unit may notpledge an additional source of revenue pursuant to this paragraph unless thepledge is first approved by the Local Government Commission pursuant to theprocedures provided in subsection (i) of this section.

The sources of payment sopledged and then held or thereafter received by a unit or any fiduciary thereofshall immediately be subject to the lien of the pledge without any physicaldelivery of the sources or further act. The lien shall be valid and binding asagainst all parties having claims of any kind in tort, contract, or otherwiseagainst a unit without regard to whether the parties have notice thereof. Theproceedings or any other document or action by which the lien on a source ofpayment is created need not be filed or recorded in any manner other than asprovided in this Chapter.

(b1)      Security Interest. –In connection with issuing its special obligation bonds or special obligationbond anticipation notes under this Chapter, a unit of local government maygrant a security interest in the project financed, or in all or some portion ofthe property on which the project is located, or in both. If a unit of localgovernment determines to provide additional security as authorized by this subsection,the following conditions apply:

(1)        No bond order maycontain a nonsubstitution clause that restricts the right of a unit of localgovernment to:

a.         Continue to providea service or activity; or

b.         Replace or provide asubstitute for any municipal purpose financed pursuant to the bond order.

(2)        A bond order issubject to approval by the Commission under Article 8 of Chapter 159 of theGeneral Statutes if it:

a.         Meets the standardsset out in G.S. 159‑148(a)(1), 159‑148(a)(2), and 159‑148(a)(3),or involves the construction or repair of fixtures or improvements on realproperty; and

b.         Is not exempted fromthe provisions of that Article by one of the exemptions contained in G.S. 159‑148(b)(1)and (2).

TheCommission approval required by this subdivision is in addition to theCommission approval required by subsection (i) of this section.

(3)        No deficiencyjudgment may be rendered against any unit of local government in any action forbreach of a bond order authorized by this section, and the taxing power of aunit of local government is not and may not be pledged directly or indirectlyto secure any moneys due under a bond order authorized by this section. Thisprohibition does not impair the right of the holder of a bond or note toexercise a remedy with respect to the revenues pledged to secure the bond ornote, as provided in the bond order, resolution, or trust agreement under whichthe bond or note is authorized and secured. A unit of local government may, inits sole discretion, use tax proceeds to pay the principal of or interest orpremium on bonds or notes, but shall not pledge or agree to do so.

(4)        Before granting asecurity interest under this subsection, a unit of local government shall holda public hearing on the proposed security interest. A notice of the publichearing shall be published once at least 10 days before the date fixed for thehearing.

(c)        Payment; Call. –Any bond anticipation notes may be made payable from the proceeds of bonds orrenewal notes or, in the event bond or renewal note proceeds are not available,the notes may be paid from any sources available under G.S. 159I‑30(b).Bonds or notes may also be paid from the proceeds of any credit facility. Thebonds and notes of each issue shall be dated and may be made redeemable priorto maturity at the option of the unit of local government or otherwise, at suchprice or prices, on such date or dates, and upon such terms and conditions asmay be determined by the unit. The bonds or notes may also be made payable fromtime to time on demand or tender for purchase by the owner, upon terms andconditions determined by the unit.

(d)        Interest. – Theinterest payable by a unit on any special obligation bonds or notes may be atsuch rate or rates, including variable rates as authorized in this section, asmay be determined by the Local Government Commission with the approval of thegoverning body of the unit. This approval may be given as the governing body ofthe unit may direct, including, without limitation, a certificate signed by a representativeof the unit designated by the governing body of the unit.

(e)        Nature ofObligation. – Special obligation bonds and notes shall be special obligationsof the unit of local government issuing them. The principal of, and interestand any premium on, special obligation bonds and notes shall be secured solelyby any one or more of the sources of payment authorized by this section as maybe pledged in the proceedings, resolution, or trust agreement under which theyare authorized or secured. Neither the faith and credit nor the taxing power ofthe unit of local government are pledged for the payment of the principal of,or interest or any premium on, any special obligation bonds or notes, and noowner of special obligation bonds or notes has the right to compel the exerciseof the taxing power by the unit in connection with any default thereon. Everyspecial obligation bond and note shall recite in substance that the principaland interest and any premium on the bond or note are secured solely by thesources of payment pledged in the bond order, resolution, or trust agreementunder which it is authorized or secured. The following limitations apply topayment from the specified sources:

(1)        Any such use ofthese sources will not constitute a pledge of the unit's taxing power; and

(2)        The unit is notobligated to pay the principal or interest or premium except from thesesources.

(f)         Details. – Infixing the details of bonds or notes, the unit of local government may providethat any of the bonds or notes may:

(1)        Be made payable fromtime to time on demand or tender for purchase by the owner thereof as long as acredit facility supports the bonds or notes, unless the Local GovernmentCommission specifically determines that a credit facility is not required upona finding and determination by the Local Government Commission that the absenceof a credit facility will not materially and adversely affect the financialposition of the unit and the marketing of the bonds or notes at a reasonableinterest cost to the unit;

(2)        Be additionallysupported by a credit facility;

(3)        Be made subject toredemption or a mandatory tender for purchase prior to maturity;

(4)        Bear interest at arate or rates that may vary for such period or periods of time, all as may beprovided in the proceedings providing for the issuance of the bonds or notesincluding, without limitation, such variations as may be permitted pursuant toa par formula; and

(5)        Be made the subjectof a remarketing agreement whereby an attempt is made to remarket the bonds ornotes to new purchasers prior to their presentment for payment to the providerof the credit facility or to the unit.

(g)        Definitions. – Thefollowing definitions apply in this section:

(1)        Credit facility. –An agreement entered into by the unit with a bank, a savings and loanassociation, or another banking institution; an insurance company, areinsurance company, a surety company, or another insurance institution; acorporation, an investment banking firm, or another investment institution; orany financial institution, providing for prompt payment of all or any part ofthe principal, or purchase price (whether at maturity, presentment, or tenderfor purchase, redemption, or acceleration), redemption premium, if any, andinterest on any bonds or notes payable on demand or tender by the owner, inconsideration of the unit agreeing to repay the provider of the credit facilityin accordance with the terms and provisions of the agreement; the provider ofany credit facility may be located either within or without the United Statesof America.

(2)        Par formula. – Anyprovision or formula adopted by the unit to provide for the adjustment, fromtime to time of the interest rate or rates borne by any bonds or notesincluding:

a.         A provision providingfor such adjustment so that the purchase price of such bonds or notes in theopen market would be as close to par as possible;

b.         A provisionproviding for such adjustment based upon a percentage or percentages of a primerate or base rate, which percentage or percentages may vary or be applied fordifferent periods of time; or

c.         Any other provisionas the unit may determine to be consistent with this section and the applicableprovisions of this Chapter and does not materially and adversely affect thefinancial position of the unit and the marketing of the bonds or notes at areasonable interest cost to the unit.

(3)        Project. – Any ofthe following:

a.         A project as definedin G.S. 159I‑3.

b.         Any of the followingas defined in S.L. 1998‑132: water supply systems, water conservationprojects, water reuse projects, wastewater collection systems, and wastewatertreatment works.

c.         With respect to acity, any service or facility authorized by G.S. 160A‑536 and provided ina municipal service district.

(g1)      Credit Facility. –The obligation of a unit of local government under a credit facility to repayany drawing thereunder may be made payable and otherwise secured, to the extentapplicable, as provided in this section.

(h)        Term; Form. – Notesshall mature at such time or times and bonds shall mature, not exceeding 40years from their date or dates, as may be determined by the unit of localgovernment, except that no such maturity dates may exceed the maximum maturityperiods prescribed by the Local Government Commission pursuant to G.S. 159‑122,as it may be amended from time to time. The unit shall determine the form andmanner of execution of the bonds or notes, including any interest coupons to beattached thereto, and shall fix the denomination or denominations and the placeor places of payment of principal and interest, which may be any bank or trustcompany within or without the United States. In case any officer of the unitwhose signature, or a facsimile of whose signature, appears on any bonds or notesor coupons, if any, ceases to be the officer before delivery thereof, thesignature or facsimile shall nevertheless be valid and sufficient for allpurposes the same as if the officer had remained in office until the delivery.Any bond or note or coupon may bear the facsimile signatures of such personswho at the actual time or the execution thereof were the proper officers tosign although at the date of the bond or note or coupon these persons may nothave been the proper officers. The unit may also provide for the authenticationof the bonds or notes by a trustee or other authenticating agent. The bonds ornotes may be issued as certificated or uncertificated obligations or both, andin coupon or in registered form, or both, as the unit may determine, andprovision may be made for the registration of any coupon bonds or notes as toprincipal alone and also as to both principal and interest, and for thereconversion into coupon bonds or notes of any bonds or notes registered as toboth principal and interest, and for the interchange of registered and couponbonds or notes. Any system for registration may be established as the unit maydetermine.

(i)         Local GovernmentCommission Approval. – No bonds or notes may be issued by a unit of localgovernment under this section unless the issuance is approved and the bonds ornotes are sold by the Local Government Commission as provided in this sectionand the applicable provisions of this Chapter. The unit shall file with theSecretary of the Local Government Commission an application requesting approvalof the issuance of the bonds or notes, which application shall contain suchinformation and shall have attached to it such documents concerning theproposed financing as the Secretary of the Local Government Commission mayrequire. The Commission may prescribe the form of the application. Before theSecretary accepts the application, the Secretary may require the governing bodyof the unit or its representatives to attend a preliminary conference, at whichtime the Secretary or the deputies of the Secretary may informally discuss theproposed issue and the timing of the steps taken in issuing the specialobligation bonds or notes.

In determining whether aproposed bond or note issue should be approved, the Local Government Commissionmay consider, to the extent applicable as shall be determined by the LocalGovernment Commission, the criteria set forth in G.S. 159‑52 and G.S. 159‑86,as either may be amended from time to time, as well as the effect of theproposed financing upon any scheduled or proposed sale of obligations by theState or by any of its agencies or departments or by any unit of localgovernment in the State. The Local Government Commission shall approve theissuance of the bonds or notes if, upon the information and evidence itreceives, it finds and determines that the proposed financing will satisfy suchcriteria and will effect the purposes of this section and the applicableprovisions of this Chapter. An approval of an issue shall not be regarded as anapproval of the legality of the issue in any respect. A decision by the LocalGovernment Commission denying an application is final.

Upon the filing with the LocalGovernment Commission of a written request of the unit requesting that itsbonds or notes be sold, the bonds or notes may be sold by the Local GovernmentCommission in such manner, either at public or private sale, and for such priceor prices as the Local Government Commission shall determine to be in the bestinterests of the unit and to effect the purposes of this section and theapplicable provisions of this Chapter, if the sale is approved by the unit.

(j)         Proceeds. – Theproceeds of any bonds or notes shall be used solely for the purposes for whichthe bonds or notes were issued and shall be disbursed in such manner and undersuch restrictions, if any, as the unit may provide in the resolutionauthorizing the issuance of, or in any trust agreement securing, the bonds ornotes.

(k)        Interim Documents;Replacement. – Prior to the preparation of definitive bonds, the unit may issueinterim receipts or temporary bonds, with or without coupons, exchangeable fordefinitive bonds when definitive bonds have been executed and are available fordelivery. The unit may also provide for the replacement of any bonds or noteswhich shall become mutilated or shall be destroyed or lost.

(l)         No OtherConditions. – Bonds or notes may be issued under the provisions of this sectionand the applicable provisions of this Chapter without obtaining, except asotherwise expressly provided in this section and the applicable provisions ofthis Chapter, the consent of any department, division, commission, board, body,bureau, or agency of the State and without any other proceedings or thehappening of any conditions or things other than those proceedings, conditions,or things that are specifically required by this section, the applicableprovisions of this Chapter, and the provisions of the resolution authorizingthe issuance of, or any trust agreement securing, the bonds or notes.

(m)       Trust. – In thediscretion of the unit of local government, any bonds and notes issued underthe provisions of this section may be secured by a trust agreement by andbetween the unit and a corporate trustee or by a resolution providing for theappointment of a corporate trustee. Bonds and notes may also be issued under anorder or resolution without a corporate trustee. The corporate trustee may be,in either case any trust company or bank having the powers of a trust companywithin or without the State. The trust agreement or resolution may pledge orassign such sources of revenue as may be permitted under this section. Thetrust agreement or resolution may contain such provisions for protecting andenforcing the rights and remedies of the owners of any bonds or notes issuedthereunder as may be reasonable and proper and not in violation of law,including covenants setting forth the duties of the unit in respect of thepurposes to which bond or note proceeds may be applied, the disposition andapplication of the revenues of the unit, the duties of the unit with respect tothe project, the disposition of any charges and collection of any revenues andadministrative charges, the terms and conditions of the issuance of additionalbonds and notes, and the custody, safeguarding, investment, and application ofall moneys. All bonds and notes issued under this section shall be equally andratably secured by a lien upon the revenues pledged in the trust agreement orresolution, without priority by reasons of number, or dates of bonds or notes,execution, or delivery, in accordance with the provision of this section and ofthe trust agreement or resolution, except that the unit may provide in thetrust agreement or resolution that bonds or notes issued pursuant theretoshall, to the extent and in the manner prescribed in the trust agreement orresolution, be subordinated and junior in standing, with respect to the paymentof principal and interest and to the security thereof, to any other bonds ornotes. It shall be lawful for any bank or trust company that may act asdepository of the proceeds of bonds or notes, revenues, or any other moneyhereunder to furnish such indemnifying bonds or to pledge such securities asmay be required by the unit. Any trust agreement or resolution may set out therights and remedies of the owners of any bonds or notes and of any trustee, andmay restrict the individual rights of action by the owners. In addition to theforegoing, any trust agreement or resolution may contain such other provisionsas the unit may deem reasonable and proper for the security of the owners ofany bonds or notes. Expenses incurred in carrying out the provisions of anytrust agreement or resolution may be treated as a part of the cost of anyproject or as an administrative charge and may be paid from the revenues orfrom any other funds available.

The State does pledge to, andagree with, the holders of any bonds or notes issued by any unit that so longas any of the bonds or notes are outstanding and unpaid the State will notlimit or alter the rights vested in the unit at the time of issuance of thebonds or notes to set the terms and conditions of the bonds or notes and tofulfill the terms of any agreements made with the bondholders or noteholders.The State shall in no way impair the rights and remedies of the bondholders ornoteholders until the bonds or notes and all costs and expenses in connectionwith any action or proceedings by or on behalf of the bondholders ornoteholders, are fully paid, met, and discharged.

(n)        ApplicableProvisions. – The provisions of G.S. 159I‑15(a), (d), and (e) relating tothe Agency and its bonds and notes shall apply to a unit of local governmentand its bonds and notes issued under this section and the applicable provisionsof this Chapter, except that the source or sources of revenue pledged to paybonds and notes of a unit of local government shall be limited as provided inthis section.

The provisions of G.S. 159I‑17relating to the Agency and its trust funds and investments shall apply to aunit of local government and its trust funds and investments, except that anysuch moneys of a unit shall be deposited and invested only as provided in G.S.159‑30, as it may be amended from time to time.

The provisions of G.S. 159I‑18,159I‑19, 159I‑20, and 159I‑23 relating to remedies, theUniform Commercial Code, investment eligibility, and tax exemption, as theyrelate to the Agency's bonds and notes, shall apply to a unit of localgovernment and its bonds and notes. (1989, c. 756, s. 1; 1989 (Reg. Sess., 1990), c. 1004,s. 26; c. 1024, s. 38(e); 1995 (Reg. Sess., 1996), c. 742, s. 39; c. 743, s.26; 1997‑6, s. 20; 1997‑307, s. 1; 2001‑238, s. 1; 2004‑151,ss. 2, 3.)


State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_159I > GS_159I-30

§ 159I‑30.  Additionalpowers of units of local government; issuance of special obligation bonds andnotes.

(a)        Authorization. –Any unit of local government may borrow money for the purpose of financing orrefinancing its cost of the acquisition or construction of a project and mayissue special obligation bonds and notes, including bond anticipation notes andrenewal notes, pursuant to the provisions of this section and the applicableprovisions of this Chapter for this purpose.

(b)        Pledge. – Each unitof local government may pledge for the payment of a special obligation bond ornote any available source or sources of revenues of the unit and, to the extentthe generation of the revenues is within the power of the unit, may enter intocovenants to take action in order to generate the revenues, as long as thepledge of these sources for payments or the covenant to generate revenues doesnot constitute a pledge of the unit's taxing power.

No agreement or covenant shallcontain a nonsubstitution clause which restricts the right of a unit of localgovernment to replace or provide a substitute for any project financed pursuantto this section.

The sources of payment pledgedby a unit of local government shall be specifically identified in theproceedings of the governing body authorizing the unit to issue the specialobligation bonds or notes.

After the issuance of specialobligation bonds or notes, the governing body of the issuing unit may identifyone or more additional sources of payment for the bonds or notes and pledgethese sources, as long as the pledge of the sources does not constitute apledge of the taxing power of the unit. Each source of additional paymentpledged shall be specifically identified in the proceedings of the governingbody of the unit pledging the source. The governing body of the unit may notpledge an additional source of revenue pursuant to this paragraph unless thepledge is first approved by the Local Government Commission pursuant to theprocedures provided in subsection (i) of this section.

The sources of payment sopledged and then held or thereafter received by a unit or any fiduciary thereofshall immediately be subject to the lien of the pledge without any physicaldelivery of the sources or further act. The lien shall be valid and binding asagainst all parties having claims of any kind in tort, contract, or otherwiseagainst a unit without regard to whether the parties have notice thereof. Theproceedings or any other document or action by which the lien on a source ofpayment is created need not be filed or recorded in any manner other than asprovided in this Chapter.

(b1)      Security Interest. –In connection with issuing its special obligation bonds or special obligationbond anticipation notes under this Chapter, a unit of local government maygrant a security interest in the project financed, or in all or some portion ofthe property on which the project is located, or in both. If a unit of localgovernment determines to provide additional security as authorized by this subsection,the following conditions apply:

(1)        No bond order maycontain a nonsubstitution clause that restricts the right of a unit of localgovernment to:

a.         Continue to providea service or activity; or

b.         Replace or provide asubstitute for any municipal purpose financed pursuant to the bond order.

(2)        A bond order issubject to approval by the Commission under Article 8 of Chapter 159 of theGeneral Statutes if it:

a.         Meets the standardsset out in G.S. 159‑148(a)(1), 159‑148(a)(2), and 159‑148(a)(3),or involves the construction or repair of fixtures or improvements on realproperty; and

b.         Is not exempted fromthe provisions of that Article by one of the exemptions contained in G.S. 159‑148(b)(1)and (2).

TheCommission approval required by this subdivision is in addition to theCommission approval required by subsection (i) of this section.

(3)        No deficiencyjudgment may be rendered against any unit of local government in any action forbreach of a bond order authorized by this section, and the taxing power of aunit of local government is not and may not be pledged directly or indirectlyto secure any moneys due under a bond order authorized by this section. Thisprohibition does not impair the right of the holder of a bond or note toexercise a remedy with respect to the revenues pledged to secure the bond ornote, as provided in the bond order, resolution, or trust agreement under whichthe bond or note is authorized and secured. A unit of local government may, inits sole discretion, use tax proceeds to pay the principal of or interest orpremium on bonds or notes, but shall not pledge or agree to do so.

(4)        Before granting asecurity interest under this subsection, a unit of local government shall holda public hearing on the proposed security interest. A notice of the publichearing shall be published once at least 10 days before the date fixed for thehearing.

(c)        Payment; Call. –Any bond anticipation notes may be made payable from the proceeds of bonds orrenewal notes or, in the event bond or renewal note proceeds are not available,the notes may be paid from any sources available under G.S. 159I‑30(b).Bonds or notes may also be paid from the proceeds of any credit facility. Thebonds and notes of each issue shall be dated and may be made redeemable priorto maturity at the option of the unit of local government or otherwise, at suchprice or prices, on such date or dates, and upon such terms and conditions asmay be determined by the unit. The bonds or notes may also be made payable fromtime to time on demand or tender for purchase by the owner, upon terms andconditions determined by the unit.

(d)        Interest. – Theinterest payable by a unit on any special obligation bonds or notes may be atsuch rate or rates, including variable rates as authorized in this section, asmay be determined by the Local Government Commission with the approval of thegoverning body of the unit. This approval may be given as the governing body ofthe unit may direct, including, without limitation, a certificate signed by a representativeof the unit designated by the governing body of the unit.

(e)        Nature ofObligation. – Special obligation bonds and notes shall be special obligationsof the unit of local government issuing them. The principal of, and interestand any premium on, special obligation bonds and notes shall be secured solelyby any one or more of the sources of payment authorized by this section as maybe pledged in the proceedings, resolution, or trust agreement under which theyare authorized or secured. Neither the faith and credit nor the taxing power ofthe unit of local government are pledged for the payment of the principal of,or interest or any premium on, any special obligation bonds or notes, and noowner of special obligation bonds or notes has the right to compel the exerciseof the taxing power by the unit in connection with any default thereon. Everyspecial obligation bond and note shall recite in substance that the principaland interest and any premium on the bond or note are secured solely by thesources of payment pledged in the bond order, resolution, or trust agreementunder which it is authorized or secured. The following limitations apply topayment from the specified sources:

(1)        Any such use ofthese sources will not constitute a pledge of the unit's taxing power; and

(2)        The unit is notobligated to pay the principal or interest or premium except from thesesources.

(f)         Details. – Infixing the details of bonds or notes, the unit of local government may providethat any of the bonds or notes may:

(1)        Be made payable fromtime to time on demand or tender for purchase by the owner thereof as long as acredit facility supports the bonds or notes, unless the Local GovernmentCommission specifically determines that a credit facility is not required upona finding and determination by the Local Government Commission that the absenceof a credit facility will not materially and adversely affect the financialposition of the unit and the marketing of the bonds or notes at a reasonableinterest cost to the unit;

(2)        Be additionallysupported by a credit facility;

(3)        Be made subject toredemption or a mandatory tender for purchase prior to maturity;

(4)        Bear interest at arate or rates that may vary for such period or periods of time, all as may beprovided in the proceedings providing for the issuance of the bonds or notesincluding, without limitation, such variations as may be permitted pursuant toa par formula; and

(5)        Be made the subjectof a remarketing agreement whereby an attempt is made to remarket the bonds ornotes to new purchasers prior to their presentment for payment to the providerof the credit facility or to the unit.

(g)        Definitions. – Thefollowing definitions apply in this section:

(1)        Credit facility. –An agreement entered into by the unit with a bank, a savings and loanassociation, or another banking institution; an insurance company, areinsurance company, a surety company, or another insurance institution; acorporation, an investment banking firm, or another investment institution; orany financial institution, providing for prompt payment of all or any part ofthe principal, or purchase price (whether at maturity, presentment, or tenderfor purchase, redemption, or acceleration), redemption premium, if any, andinterest on any bonds or notes payable on demand or tender by the owner, inconsideration of the unit agreeing to repay the provider of the credit facilityin accordance with the terms and provisions of the agreement; the provider ofany credit facility may be located either within or without the United Statesof America.

(2)        Par formula. – Anyprovision or formula adopted by the unit to provide for the adjustment, fromtime to time of the interest rate or rates borne by any bonds or notesincluding:

a.         A provision providingfor such adjustment so that the purchase price of such bonds or notes in theopen market would be as close to par as possible;

b.         A provisionproviding for such adjustment based upon a percentage or percentages of a primerate or base rate, which percentage or percentages may vary or be applied fordifferent periods of time; or

c.         Any other provisionas the unit may determine to be consistent with this section and the applicableprovisions of this Chapter and does not materially and adversely affect thefinancial position of the unit and the marketing of the bonds or notes at areasonable interest cost to the unit.

(3)        Project. – Any ofthe following:

a.         A project as definedin G.S. 159I‑3.

b.         Any of the followingas defined in S.L. 1998‑132: water supply systems, water conservationprojects, water reuse projects, wastewater collection systems, and wastewatertreatment works.

c.         With respect to acity, any service or facility authorized by G.S. 160A‑536 and provided ina municipal service district.

(g1)      Credit Facility. –The obligation of a unit of local government under a credit facility to repayany drawing thereunder may be made payable and otherwise secured, to the extentapplicable, as provided in this section.

(h)        Term; Form. – Notesshall mature at such time or times and bonds shall mature, not exceeding 40years from their date or dates, as may be determined by the unit of localgovernment, except that no such maturity dates may exceed the maximum maturityperiods prescribed by the Local Government Commission pursuant to G.S. 159‑122,as it may be amended from time to time. The unit shall determine the form andmanner of execution of the bonds or notes, including any interest coupons to beattached thereto, and shall fix the denomination or denominations and the placeor places of payment of principal and interest, which may be any bank or trustcompany within or without the United States. In case any officer of the unitwhose signature, or a facsimile of whose signature, appears on any bonds or notesor coupons, if any, ceases to be the officer before delivery thereof, thesignature or facsimile shall nevertheless be valid and sufficient for allpurposes the same as if the officer had remained in office until the delivery.Any bond or note or coupon may bear the facsimile signatures of such personswho at the actual time or the execution thereof were the proper officers tosign although at the date of the bond or note or coupon these persons may nothave been the proper officers. The unit may also provide for the authenticationof the bonds or notes by a trustee or other authenticating agent. The bonds ornotes may be issued as certificated or uncertificated obligations or both, andin coupon or in registered form, or both, as the unit may determine, andprovision may be made for the registration of any coupon bonds or notes as toprincipal alone and also as to both principal and interest, and for thereconversion into coupon bonds or notes of any bonds or notes registered as toboth principal and interest, and for the interchange of registered and couponbonds or notes. Any system for registration may be established as the unit maydetermine.

(i)         Local GovernmentCommission Approval. – No bonds or notes may be issued by a unit of localgovernment under this section unless the issuance is approved and the bonds ornotes are sold by the Local Government Commission as provided in this sectionand the applicable provisions of this Chapter. The unit shall file with theSecretary of the Local Government Commission an application requesting approvalof the issuance of the bonds or notes, which application shall contain suchinformation and shall have attached to it such documents concerning theproposed financing as the Secretary of the Local Government Commission mayrequire. The Commission may prescribe the form of the application. Before theSecretary accepts the application, the Secretary may require the governing bodyof the unit or its representatives to attend a preliminary conference, at whichtime the Secretary or the deputies of the Secretary may informally discuss theproposed issue and the timing of the steps taken in issuing the specialobligation bonds or notes.

In determining whether aproposed bond or note issue should be approved, the Local Government Commissionmay consider, to the extent applicable as shall be determined by the LocalGovernment Commission, the criteria set forth in G.S. 159‑52 and G.S. 159‑86,as either may be amended from time to time, as well as the effect of theproposed financing upon any scheduled or proposed sale of obligations by theState or by any of its agencies or departments or by any unit of localgovernment in the State. The Local Government Commission shall approve theissuance of the bonds or notes if, upon the information and evidence itreceives, it finds and determines that the proposed financing will satisfy suchcriteria and will effect the purposes of this section and the applicableprovisions of this Chapter. An approval of an issue shall not be regarded as anapproval of the legality of the issue in any respect. A decision by the LocalGovernment Commission denying an application is final.

Upon the filing with the LocalGovernment Commission of a written request of the unit requesting that itsbonds or notes be sold, the bonds or notes may be sold by the Local GovernmentCommission in such manner, either at public or private sale, and for such priceor prices as the Local Government Commission shall determine to be in the bestinterests of the unit and to effect the purposes of this section and theapplicable provisions of this Chapter, if the sale is approved by the unit.

(j)         Proceeds. – Theproceeds of any bonds or notes shall be used solely for the purposes for whichthe bonds or notes were issued and shall be disbursed in such manner and undersuch restrictions, if any, as the unit may provide in the resolutionauthorizing the issuance of, or in any trust agreement securing, the bonds ornotes.

(k)        Interim Documents;Replacement. – Prior to the preparation of definitive bonds, the unit may issueinterim receipts or temporary bonds, with or without coupons, exchangeable fordefinitive bonds when definitive bonds have been executed and are available fordelivery. The unit may also provide for the replacement of any bonds or noteswhich shall become mutilated or shall be destroyed or lost.

(l)         No OtherConditions. – Bonds or notes may be issued under the provisions of this sectionand the applicable provisions of this Chapter without obtaining, except asotherwise expressly provided in this section and the applicable provisions ofthis Chapter, the consent of any department, division, commission, board, body,bureau, or agency of the State and without any other proceedings or thehappening of any conditions or things other than those proceedings, conditions,or things that are specifically required by this section, the applicableprovisions of this Chapter, and the provisions of the resolution authorizingthe issuance of, or any trust agreement securing, the bonds or notes.

(m)       Trust. – In thediscretion of the unit of local government, any bonds and notes issued underthe provisions of this section may be secured by a trust agreement by andbetween the unit and a corporate trustee or by a resolution providing for theappointment of a corporate trustee. Bonds and notes may also be issued under anorder or resolution without a corporate trustee. The corporate trustee may be,in either case any trust company or bank having the powers of a trust companywithin or without the State. The trust agreement or resolution may pledge orassign such sources of revenue as may be permitted under this section. Thetrust agreement or resolution may contain such provisions for protecting andenforcing the rights and remedies of the owners of any bonds or notes issuedthereunder as may be reasonable and proper and not in violation of law,including covenants setting forth the duties of the unit in respect of thepurposes to which bond or note proceeds may be applied, the disposition andapplication of the revenues of the unit, the duties of the unit with respect tothe project, the disposition of any charges and collection of any revenues andadministrative charges, the terms and conditions of the issuance of additionalbonds and notes, and the custody, safeguarding, investment, and application ofall moneys. All bonds and notes issued under this section shall be equally andratably secured by a lien upon the revenues pledged in the trust agreement orresolution, without priority by reasons of number, or dates of bonds or notes,execution, or delivery, in accordance with the provision of this section and ofthe trust agreement or resolution, except that the unit may provide in thetrust agreement or resolution that bonds or notes issued pursuant theretoshall, to the extent and in the manner prescribed in the trust agreement orresolution, be subordinated and junior in standing, with respect to the paymentof principal and interest and to the security thereof, to any other bonds ornotes. It shall be lawful for any bank or trust company that may act asdepository of the proceeds of bonds or notes, revenues, or any other moneyhereunder to furnish such indemnifying bonds or to pledge such securities asmay be required by the unit. Any trust agreement or resolution may set out therights and remedies of the owners of any bonds or notes and of any trustee, andmay restrict the individual rights of action by the owners. In addition to theforegoing, any trust agreement or resolution may contain such other provisionsas the unit may deem reasonable and proper for the security of the owners ofany bonds or notes. Expenses incurred in carrying out the provisions of anytrust agreement or resolution may be treated as a part of the cost of anyproject or as an administrative charge and may be paid from the revenues orfrom any other funds available.

The State does pledge to, andagree with, the holders of any bonds or notes issued by any unit that so longas any of the bonds or notes are outstanding and unpaid the State will notlimit or alter the rights vested in the unit at the time of issuance of thebonds or notes to set the terms and conditions of the bonds or notes and tofulfill the terms of any agreements made with the bondholders or noteholders.The State shall in no way impair the rights and remedies of the bondholders ornoteholders until the bonds or notes and all costs and expenses in connectionwith any action or proceedings by or on behalf of the bondholders ornoteholders, are fully paid, met, and discharged.

(n)        ApplicableProvisions. – The provisions of G.S. 159I‑15(a), (d), and (e) relating tothe Agency and its bonds and notes shall apply to a unit of local governmentand its bonds and notes issued under this section and the applicable provisionsof this Chapter, except that the source or sources of revenue pledged to paybonds and notes of a unit of local government shall be limited as provided inthis section.

The provisions of G.S. 159I‑17relating to the Agency and its trust funds and investments shall apply to aunit of local government and its trust funds and investments, except that anysuch moneys of a unit shall be deposited and invested only as provided in G.S.159‑30, as it may be amended from time to time.

The provisions of G.S. 159I‑18,159I‑19, 159I‑20, and 159I‑23 relating to remedies, theUniform Commercial Code, investment eligibility, and tax exemption, as theyrelate to the Agency's bonds and notes, shall apply to a unit of localgovernment and its bonds and notes. (1989, c. 756, s. 1; 1989 (Reg. Sess., 1990), c. 1004,s. 26; c. 1024, s. 38(e); 1995 (Reg. Sess., 1996), c. 742, s. 39; c. 743, s.26; 1997‑6, s. 20; 1997‑307, s. 1; 2001‑238, s. 1; 2004‑151,ss. 2, 3.)

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