(a) Purchase. A unitof local government may purchase, or finance or refinance the purchase of, realor personal property by installment contracts that create in some or all of theproperty purchased a security interest to secure payment of the purchase priceto the seller or to an individual or entity advancing moneys or supplyingfinancing for the purchase transaction.
(b) Improvements. Aunit of local government may finance or refinance the construction or repair offixtures or improvements on real property by contracts that create in some orall of the fixtures or improvements, or in all or some portion of the propertyon which the fixtures or improvements are located, or in both, a securityinterest to secure repayment of moneys advanced or made available for theconstruction or repair.
(c) Accounts. A unitof local government may use escrow accounts in connection with the advancefunding of transactions authorized by this section, whereby the proceeds of theadvance funding are invested pending disbursement. A unit of local governmentmay also use other accounts, such as debt service payment accounts and debtservice reserve accounts, to facilitate transactions authorized by thissection. To secure transactions authorized by this section, a unit of localgovernment may also create security interests in these accounts.
(d) Nonsubstitution. Nocontract entered into under this section may contain a nonsubstitution clausethat restricts the right of a unit of local government to:
(1) Continue to providea service or activity; or
(2) Replace or provide asubstitute for any fixture, improvement, project, or property financed,refinanced, or purchased pursuant to the contract.
(e) Oversight. Acontract entered into under this section is subject to approval by the LocalGovernment Commission under Article 8 of Chapter 159 of the General Statutes ifit:
(1) 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
(2) Is not exempted fromthe provisions of that Article by one of the exemptions contained in G.S. 159‑148(b).
(e1) Public Hospitals. Anonprofit entity operating or leasing a public hospital may enter into acontract pursuant to this section only if the nonprofit entity will have anownership interest in the property being financed or refinanced, including aleasehold interest. The security interest granted in the property shall be onlyto the extent of the nonprofit entity's property interest. In addition, anycontract entered into by a nonprofit entity operating or leasing a publichospital pursuant to this section is subject to the approval of the city,county, hospital district, or hospital authority that owns the hospital.Approval of the city, county, hospital district, or hospital authority may bewithheld only under one or more of the following circumstances:
(1) The contract wouldcause the city, county, hospital district, or hospital authority to breach orviolate any covenant in an existing financing instrument entered into by thenonprofit entity.
(2) The contract wouldrestrict the ability of the city, county, hospital district, or hospitalauthority to incur anticipated bank‑eligible indebtedness under federaltax laws.
(3) The entering into ofthe contract would have a material, adverse impact on the credit ratings of thecity, county, hospital district, or hospital authority or would otherwisematerially interfere with an anticipated financing by the nonprofit entity.
(f) Limit of Security. No deficiency judgment may be rendered against any unit of local governmentin any action for breach of a contractual obligation authorized by thissection. The taxing power of a unit of local government is not and may not bepledged directly or indirectly to secure any moneys due under a contractauthorized by this section.
(g) Public Hearing. Beforeentering into a contract under this section involving real property, a unit oflocal government shall hold a public hearing on the contract. A notice of thepublic hearing shall be published once at least 10 days before the date fixedfor the hearing.
(h) Local GovernmentDefined. As used in this section, the term "unit of localgovernment" means any of the following:
(1) A county.
(2) A city.
(3) A water and sewerauthority created under Article 1 of Chapter 162A of the General Statutes.
(3a) A metropolitansewerage district created under Article 5 of Chapter 162A of the GeneralStatutes.
(3b) A sanitary districtcreated under Part 2 of Article 2 of Chapter 130A of the General Statutes.
(3c) A county water andsewer district created under Article 6 of Chapter 162A of the General Statutes.
(4) An airport authoritywhose situs is entirely within a county that has (i) a population of over120,000 according to the most recent federal decennial census and (ii) an areaof less than 200 square miles.
(5) An airport authorityin a county in which there are two incorporated municipalities with apopulation of more than 65,000 according to the most recent federal decennialcensus.
(5a) An airport board orcommission authorized by agreement between two cities pursuant to G.S. 63‑56,one of which is located partially but not wholly in the county in which thejointly owned airport is located, and where the board or commission providedwater and wastewater services off the airport premises before January 1, 1995,except that the authority granted by this subdivision may be exercised by sucha board or commission with respect to water and wastewater systems orimprovements only.
(5b) A local airportauthority that was created pursuant to a local act of the General Assembly.
(6) A local schooladministrative unit whose board of education is authorized to levy a schooltax.
(6a) Any other localschool administrative unit, but only for the purpose of financing energyconservation measures acquired pursuant to Part 2 of Article 3B of Chapter 143of the General Statutes.
(6b) A community college,but only for the purpose of financing energy conservation measures acquiredpursuant to Part 2 of Article 3B of Chapter 143 of the General Statutes.
(7) An area mentalhealth, developmental disabilities, and substance abuse authority, acting inaccordance with G.S. 122C‑147.
(8) A consolidated city‑county,as defined by G.S. 160B‑2(1).
(9) Repealed by SessionLaws 2001‑414, s. 52, effective September 14, 2001.
(10) A regional naturalgas district, as defined by Article 28 of this Chapter.
(11) A regional publictransportation authority or a regional transportation authority createdpursuant to Article 26 or Article 27 of this Chapter.
(12) A nonprofitcorporation or association operating or leasing a public hospital as defined inG.S. 159‑39.
(13) A public healthauthority created under Part 1B of Article 2 of Chapter 130A of the GeneralStatutes.
(14) A special districtcreated under Article 43 of Chapter 105 of the General Statutes. (1979, c. 743; 1987 (Reg.Sess., 1988), c. 981, s. 1; 1989, c. 708; 1991, c. 741, s. 1; 1993 (Reg. Sess.,1994), c. 592, s. 2; 1995, c. 461, s. 6; 1995 (Reg. Sess., 1996), c. 644, s. 2;1997‑380, s. 3; 1997‑426, s. 7; 1997‑426, s. 7.1; 1998‑70,s. 1; 1998‑117, s. 1; 1999‑386, ss. 1, 2; 2001‑414, s. 52;2002‑161, s. 10; 2003‑259, s. 1; 2003‑388, s. 3; 2007‑226,s. 1; 2007‑229, s. 3; 2009‑527, s. 2(g).)
(a) Purchase. A unitof local government may purchase, or finance or refinance the purchase of, realor personal property by installment contracts that create in some or all of theproperty purchased a security interest to secure payment of the purchase priceto the seller or to an individual or entity advancing moneys or supplyingfinancing for the purchase transaction.
(b) Improvements. Aunit of local government may finance or refinance the construction or repair offixtures or improvements on real property by contracts that create in some orall of the fixtures or improvements, or in all or some portion of the propertyon which the fixtures or improvements are located, or in both, a securityinterest to secure repayment of moneys advanced or made available for theconstruction or repair.
(c) Accounts. A unitof local government may use escrow accounts in connection with the advancefunding of transactions authorized by this section, whereby the proceeds of theadvance funding are invested pending disbursement. A unit of local governmentmay also use other accounts, such as debt service payment accounts and debtservice reserve accounts, to facilitate transactions authorized by thissection. To secure transactions authorized by this section, a unit of localgovernment may also create security interests in these accounts.
(d) Nonsubstitution. Nocontract entered into under this section may contain a nonsubstitution clausethat restricts the right of a unit of local government to:
(1) Continue to providea service or activity; or
(2) Replace or provide asubstitute for any fixture, improvement, project, or property financed,refinanced, or purchased pursuant to the contract.
(e) Oversight. Acontract entered into under this section is subject to approval by the LocalGovernment Commission under Article 8 of Chapter 159 of the General Statutes ifit:
(1) 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
(2) Is not exempted fromthe provisions of that Article by one of the exemptions contained in G.S. 159‑148(b).
(e1) Public Hospitals. Anonprofit entity operating or leasing a public hospital may enter into acontract pursuant to this section only if the nonprofit entity will have anownership interest in the property being financed or refinanced, including aleasehold interest. The security interest granted in the property shall be onlyto the extent of the nonprofit entity's property interest. In addition, anycontract entered into by a nonprofit entity operating or leasing a publichospital pursuant to this section is subject to the approval of the city,county, hospital district, or hospital authority that owns the hospital.Approval of the city, county, hospital district, or hospital authority may bewithheld only under one or more of the following circumstances:
(1) The contract wouldcause the city, county, hospital district, or hospital authority to breach orviolate any covenant in an existing financing instrument entered into by thenonprofit entity.
(2) The contract wouldrestrict the ability of the city, county, hospital district, or hospitalauthority to incur anticipated bank‑eligible indebtedness under federaltax laws.
(3) The entering into ofthe contract would have a material, adverse impact on the credit ratings of thecity, county, hospital district, or hospital authority or would otherwisematerially interfere with an anticipated financing by the nonprofit entity.
(f) Limit of Security. No deficiency judgment may be rendered against any unit of local governmentin any action for breach of a contractual obligation authorized by thissection. The taxing power of a unit of local government is not and may not bepledged directly or indirectly to secure any moneys due under a contractauthorized by this section.
(g) Public Hearing. Beforeentering into a contract under this section involving real property, a unit oflocal government shall hold a public hearing on the contract. A notice of thepublic hearing shall be published once at least 10 days before the date fixedfor the hearing.
(h) Local GovernmentDefined. As used in this section, the term "unit of localgovernment" means any of the following:
(1) A county.
(2) A city.
(3) A water and sewerauthority created under Article 1 of Chapter 162A of the General Statutes.
(3a) A metropolitansewerage district created under Article 5 of Chapter 162A of the GeneralStatutes.
(3b) A sanitary districtcreated under Part 2 of Article 2 of Chapter 130A of the General Statutes.
(3c) A county water andsewer district created under Article 6 of Chapter 162A of the General Statutes.
(4) An airport authoritywhose situs is entirely within a county that has (i) a population of over120,000 according to the most recent federal decennial census and (ii) an areaof less than 200 square miles.
(5) An airport authorityin a county in which there are two incorporated municipalities with apopulation of more than 65,000 according to the most recent federal decennialcensus.
(5a) An airport board orcommission authorized by agreement between two cities pursuant to G.S. 63‑56,one of which is located partially but not wholly in the county in which thejointly owned airport is located, and where the board or commission providedwater and wastewater services off the airport premises before January 1, 1995,except that the authority granted by this subdivision may be exercised by sucha board or commission with respect to water and wastewater systems orimprovements only.
(5b) A local airportauthority that was created pursuant to a local act of the General Assembly.
(6) A local schooladministrative unit whose board of education is authorized to levy a schooltax.
(6a) Any other localschool administrative unit, but only for the purpose of financing energyconservation measures acquired pursuant to Part 2 of Article 3B of Chapter 143of the General Statutes.
(6b) A community college,but only for the purpose of financing energy conservation measures acquiredpursuant to Part 2 of Article 3B of Chapter 143 of the General Statutes.
(7) An area mentalhealth, developmental disabilities, and substance abuse authority, acting inaccordance with G.S. 122C‑147.
(8) A consolidated city‑county,as defined by G.S. 160B‑2(1).
(9) Repealed by SessionLaws 2001‑414, s. 52, effective September 14, 2001.
(10) A regional naturalgas district, as defined by Article 28 of this Chapter.
(11) A regional publictransportation authority or a regional transportation authority createdpursuant to Article 26 or Article 27 of this Chapter.
(12) A nonprofitcorporation or association operating or leasing a public hospital as defined inG.S. 159‑39.
(13) A public healthauthority created under Part 1B of Article 2 of Chapter 130A of the GeneralStatutes.
(14) A special districtcreated under Article 43 of Chapter 105 of the General Statutes. (1979, c. 743; 1987 (Reg.Sess., 1988), c. 981, s. 1; 1989, c. 708; 1991, c. 741, s. 1; 1993 (Reg. Sess.,1994), c. 592, s. 2; 1995, c. 461, s. 6; 1995 (Reg. Sess., 1996), c. 644, s. 2;1997‑380, s. 3; 1997‑426, s. 7; 1997‑426, s. 7.1; 1998‑70,s. 1; 1998‑117, s. 1; 1999‑386, ss. 1, 2; 2001‑414, s. 52;2002‑161, s. 10; 2003‑259, s. 1; 2003‑388, s. 3; 2007‑226,s. 1; 2007‑229, s. 3; 2009‑527, s. 2(g).)
(a) Purchase. A unitof local government may purchase, or finance or refinance the purchase of, realor personal property by installment contracts that create in some or all of theproperty purchased a security interest to secure payment of the purchase priceto the seller or to an individual or entity advancing moneys or supplyingfinancing for the purchase transaction.
(b) Improvements. Aunit of local government may finance or refinance the construction or repair offixtures or improvements on real property by contracts that create in some orall of the fixtures or improvements, or in all or some portion of the propertyon which the fixtures or improvements are located, or in both, a securityinterest to secure repayment of moneys advanced or made available for theconstruction or repair.
(c) Accounts. A unitof local government may use escrow accounts in connection with the advancefunding of transactions authorized by this section, whereby the proceeds of theadvance funding are invested pending disbursement. A unit of local governmentmay also use other accounts, such as debt service payment accounts and debtservice reserve accounts, to facilitate transactions authorized by thissection. To secure transactions authorized by this section, a unit of localgovernment may also create security interests in these accounts.
(d) Nonsubstitution. Nocontract entered into under this section may contain a nonsubstitution clausethat restricts the right of a unit of local government to:
(1) Continue to providea service or activity; or
(2) Replace or provide asubstitute for any fixture, improvement, project, or property financed,refinanced, or purchased pursuant to the contract.
(e) Oversight. Acontract entered into under this section is subject to approval by the LocalGovernment Commission under Article 8 of Chapter 159 of the General Statutes ifit:
(1) 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
(2) Is not exempted fromthe provisions of that Article by one of the exemptions contained in G.S. 159‑148(b).
(e1) Public Hospitals. Anonprofit entity operating or leasing a public hospital may enter into acontract pursuant to this section only if the nonprofit entity will have anownership interest in the property being financed or refinanced, including aleasehold interest. The security interest granted in the property shall be onlyto the extent of the nonprofit entity's property interest. In addition, anycontract entered into by a nonprofit entity operating or leasing a publichospital pursuant to this section is subject to the approval of the city,county, hospital district, or hospital authority that owns the hospital.Approval of the city, county, hospital district, or hospital authority may bewithheld only under one or more of the following circumstances:
(1) The contract wouldcause the city, county, hospital district, or hospital authority to breach orviolate any covenant in an existing financing instrument entered into by thenonprofit entity.
(2) The contract wouldrestrict the ability of the city, county, hospital district, or hospitalauthority to incur anticipated bank‑eligible indebtedness under federaltax laws.
(3) The entering into ofthe contract would have a material, adverse impact on the credit ratings of thecity, county, hospital district, or hospital authority or would otherwisematerially interfere with an anticipated financing by the nonprofit entity.
(f) Limit of Security. No deficiency judgment may be rendered against any unit of local governmentin any action for breach of a contractual obligation authorized by thissection. The taxing power of a unit of local government is not and may not bepledged directly or indirectly to secure any moneys due under a contractauthorized by this section.
(g) Public Hearing. Beforeentering into a contract under this section involving real property, a unit oflocal government shall hold a public hearing on the contract. A notice of thepublic hearing shall be published once at least 10 days before the date fixedfor the hearing.
(h) Local GovernmentDefined. As used in this section, the term "unit of localgovernment" means any of the following:
(1) A county.
(2) A city.
(3) A water and sewerauthority created under Article 1 of Chapter 162A of the General Statutes.
(3a) A metropolitansewerage district created under Article 5 of Chapter 162A of the GeneralStatutes.
(3b) A sanitary districtcreated under Part 2 of Article 2 of Chapter 130A of the General Statutes.
(3c) A county water andsewer district created under Article 6 of Chapter 162A of the General Statutes.
(4) An airport authoritywhose situs is entirely within a county that has (i) a population of over120,000 according to the most recent federal decennial census and (ii) an areaof less than 200 square miles.
(5) An airport authorityin a county in which there are two incorporated municipalities with apopulation of more than 65,000 according to the most recent federal decennialcensus.
(5a) An airport board orcommission authorized by agreement between two cities pursuant to G.S. 63‑56,one of which is located partially but not wholly in the county in which thejointly owned airport is located, and where the board or commission providedwater and wastewater services off the airport premises before January 1, 1995,except that the authority granted by this subdivision may be exercised by sucha board or commission with respect to water and wastewater systems orimprovements only.
(5b) A local airportauthority that was created pursuant to a local act of the General Assembly.
(6) A local schooladministrative unit whose board of education is authorized to levy a schooltax.
(6a) Any other localschool administrative unit, but only for the purpose of financing energyconservation measures acquired pursuant to Part 2 of Article 3B of Chapter 143of the General Statutes.
(6b) A community college,but only for the purpose of financing energy conservation measures acquiredpursuant to Part 2 of Article 3B of Chapter 143 of the General Statutes.
(7) An area mentalhealth, developmental disabilities, and substance abuse authority, acting inaccordance with G.S. 122C‑147.
(8) A consolidated city‑county,as defined by G.S. 160B‑2(1).
(9) Repealed by SessionLaws 2001‑414, s. 52, effective September 14, 2001.
(10) A regional naturalgas district, as defined by Article 28 of this Chapter.
(11) A regional publictransportation authority or a regional transportation authority createdpursuant to Article 26 or Article 27 of this Chapter.
(12) A nonprofitcorporation or association operating or leasing a public hospital as defined inG.S. 159‑39.
(13) A public healthauthority created under Part 1B of Article 2 of Chapter 130A of the GeneralStatutes.
(14) A special districtcreated under Article 43 of Chapter 105 of the General Statutes. (1979, c. 743; 1987 (Reg.Sess., 1988), c. 981, s. 1; 1989, c. 708; 1991, c. 741, s. 1; 1993 (Reg. Sess.,1994), c. 592, s. 2; 1995, c. 461, s. 6; 1995 (Reg. Sess., 1996), c. 644, s. 2;1997‑380, s. 3; 1997‑426, s. 7; 1997‑426, s. 7.1; 1998‑70,s. 1; 1998‑117, s. 1; 1999‑386, ss. 1, 2; 2001‑414, s. 52;2002‑161, s. 10; 2003‑259, s. 1; 2003‑388, s. 3; 2007‑226,s. 1; 2007‑229, s. 3; 2009‑527, s. 2(g).)
