§ 159-171. Grant anticipation notes. - North Carolina Statutes

§ 159‑171.  Grantanticipation notes.

(a)        A unit of local government is authorized to borrow money forthe purpose of paying appropriations made for a capital project in anticipationof the receipt of moneys from grant commitments for such capital project fromthe State or the United States or any agencies of either, and to issue itsnegotiable notes in evidence thereof. Grant anticipation notes shall mature notlater than 12 months after the estimated completion date of such capitalproject as determined by the governing body of the unit of local government andmay be renewed from time to time, but no renewal shall mature later than 12months after the estimated completion date of such capital project.

(b)        No grant anticipation note may be issued if the amountthereof, together with the amount of all other notes authorized or issued inanticipation of the same grant commitment, shall exceed ninety percent (90%) ofthe unpaid amount of said grant commitment. Each note shall bear on its face astatement to the effect that it is payable solely from moneys received from adescribed grant and that the faith and credit of the issuing unit are notpledged for the payment thereof, and on its face or reverse the followingcertificate signed by the finance officer: "This note and all other grantanticipation 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 bespecial obligations of the issuing unit. Neither the credit nor the taxingpower of the issuing unit may be pledged for the payment of grant anticipationnotes, and no holder of such notes shall have the right to compel the exerciseof the taxing power by the issuing unit or the forfeiture of any of itsproperty in connection with any default thereon. (1975, c. 674, s. 1.)