NORTH CAROLINA GENERAL ASSEMBLY

1975 SESSION

 

 

CHAPTER 674

HOUSE BILL 1104

 

 

AN ACT AUTHORIZING UNITS OF LOCAL GOVERNMENT TO ISSUE GRANT ANTICIPATION NOTES FOR CAPITAL PROJECTS IN ANTICIPATION OF THE RECEIPT OF MONEYS FROM GRANT COMMITMENTS FOR SUCH CAPITAL PROJECTS FROM THE STATE OF NORTH CAROLINA OR THE UNITED STATES OR ANY AGENCIES OF EITHER.

 

The General Assembly of North Carolina enacts:

 

Section 1.  Chapter 159 of the General Statutes is hereby amended by adding a new section as follows:

"§ 159-171.  Grant anticipation notes. — (a) A unit of local government is authorized to borrow money for the purpose of paying appropriations made for a capital project in anticipation of the receipt of moneys from grant commitments for such capital project from the State or the United States or any agencies of either, and to issue its negotiable notes in evidence thereof. Grant anticipation notes shall mature not later than 12 months after the estimated completion date of such capital project as determined by the governing body of the unit of local government and may be renewed from time to time, but no renewal shall mature later than 12 months after the estimated completion date of such capital project.

(b)        No grant anticipation note may be issued if the amount thereof, together with the amount of all other notes authorized or issued in anticipation of the same grant commitment, shall exceed ninety percent (90%) of the unpaid amount of said grant commitment. Each note shall bear on its face a statement to the effect that it is payable solely from moneys received from a described grant and that the faith and credit of the issuing unit are not pledged for the payment thereof, and on its face or reverse the following certificate signed by the finance officer: 'This note and all other grant anticipation notes of (issuing unit) authorized or outstanding as of (date) and issued or to be issued in anticipation of (describe grant commitment) amount to ninety percent (90%) or less of the unpaid amount of said grant commitment'. No grant anticipation note shall be valid without this certificate.

(c)        Grant anticipation notes issued under this section shall be special obligations of the issuing unit. Neither the credit nor the taxing power of the issuing unit may be pledged for the payment of grant anticipation notes, and no holder of such notes shall have the right to compel the exercise of the taxing power by the issuing unit or the forfeiture of any of its property in connection with any default thereon."

Sec. 2.  The heading in Article 9 of Chapter 159 reading "Part Two. Tax and Revenue Anticipation Notes" is amended by striking the foregoing heading and inserting in lieu thereof the words, "Part Two. Tax, Revenue and Grant Anticipation Notes".

Sec. 3.  G.S. 159172(a) is hereby amended by striking the words "G.S. 159-169 and 159-170" in the second line thereof and inserting in lieu thereof the words "this Part".

Sec. 4.  G.S. 159-172(b) is hereby amended by striking the entire paragraph (b) and inserting in lieu thereof the following:

"(b)      Before any notes may be issued pursuant to this Part, they must be approved by the commission. In determining whether to approve the issuance of notes, the commission may consider (i) the reasonableness of the budget estimates of the taxes or other revenues in anticipation of which the tax or revenue anticipation notes are to be issued, (ii) the firm and binding character of the grant commitment in anticipation of which the grant anticipation notes are to be issued, (iii) whether the amount of the notes, together with the amount of other authorized or outstanding notes issued or to be issued in anticipation of the same taxes or other revenues or grant commitments, exceeds the limitations prescribed in G.S. 159-169, G.S. 159‑170 or G.S. 159-171 as the case may be, and (iv) any other matters that the commission considers to have a bearing on whether the issue should be approved. The commission shall approve the issuance of the notes if, upon the information and evidence it receives, it finds and determines that (i) the issue is necessary and expedient, (ii) the budget estimates of the taxes or other revenues are reasonable or the grant commitment is firm and binding, and (iii) the amount of the notes, together with the amounts of other authorized or outstanding notes issued or to be issued in anticipation of the same taxes or other revenues or grant commitments do not exceed the appropriate limitations prescribed by this Part. An order approving an issue shall not be regarded as an approval of the legality of the notes in any respect."

Sec. 5.  G.S. 159-172(c) is hereby amended by striking the words "G.S. 159-169 and 159-170" in the first line thereof and inserting in lieu thereof the words "this Part".

Sec. 6.  This act shall be in full force and effect from and after its ratification.

In the General Assembly read three times and ratified, this the 18th day of June, 1975.