§ 159-195. Nature of duties of a governmental unit under a swap agreement. - North Carolina Statutes

§ 159‑195.  Nature of duties of a governmentalunit under a swap agreement.

The duty of a governmental unit to make the payments required and toperform the other duties of the governmental unit under a swap agreement shallconstitute a continuing contractual obligation of the governmental unit,enforceable in accordance with applicable law for the enforcement ofcontractual obligations of that governmental unit. A governmental unit maylimit its duties under a swap agreement to designated property or a designatedsource of revenues or receipts of the governmental unit, such as the revenuesof a specified utility or other public service enterprise system of thegovernmental unit. If a governmental unit enters into a swap agreement inconnection with obligations that are secured by a designated form of security,then, subject to the terms of the bond order or resolution, trust indenture ortrust agreement, installment contract or lease purchase agreement, or similarinstrument pursuant to which the obligations are issued or incurred, thegovernmental unit may pledge, mortgage, or grant a security interest in therevenues of the utility or other public service enterprise system, program,receipts, property, or similar arrangement securing the obligations to securethe payment and performance of its duties under the swap agreement. Any pledgeof assets, revenues, or receipts to secure the duties of a governmental unitunder a swap agreement shall become effective in the same manner and to thesame extent as a pledge of those assets, revenues, or receipts to secure theobligations with respect to which the swap agreement is entered. (2003‑388, s. 4.)