§ 159-196. Approval by Commission. - North Carolina Statutes

§ 159‑196.  Approval by Commission.

(a)        Approval Required. – If either of the following conditionsis met, a governmental unit shall not enter into a swap agreement unless theCommission first approves the governmental unit's entering into the swapagreement:

(1)        The unit is a unit of local government as defined in G.S.159‑44, a municipality as defined in G.S. 159‑81, or a joint agencyas defined in G.S. 159B‑3.

(2)        The sale, issuance, or incurrence of the obligations withrespect to which the swap agreement is entered into is subject to the approvalof the Commission.

(b)        Factors. – The Commission may consider all of the followingfactors in determining whether to approve the swap agreement:

(1)        The nature and amount of the outstanding debt of thegovernmental unit proposing to enter the swap agreement.

(2)        The governmental unit's debt management procedures andpolicies.

(3)        To the extent applicable, the governmental unit's compliancewith the Local Government Budget and Fiscal Control Act.

(4)        Whether the governmental unit is in default in any of itsdebt service obligations.

(5)        The credit rating of the governmental unit.

(c)        Amendments. – If a swap agreement is subject to approval bythe Commission pursuant to this section and is approved, then the governmentalunit shall not enter into any amendment to the swap agreement that terminatesor changes the time period covered by the swap agreement, changes the interestrate calculation method under the swap agreement, or changes the notionalamounts covered by the swap agreement without the prior approval of theSecretary of the Commission.

(d)        Approval Not Required. – A swap agreement is not subject toapproval by the Commission except as provided in this section. This sectiondoes not require the approval of the Commission of a swap agreement enteredinto by a private entity receiving the benefit of financing through theissuance of obligations by a governmental unit. (2003‑388, s. 4.)