§ 159-97. Taxes for supplementing revenue bond projects. - North Carolina Statutes

§ 159‑97.  Taxesfor supplementing revenue bond projects.

(a)        For the purpose of supplementing the revenues of a revenuebond project, as defined in this section, any county or city may covenant with,or may enter into an agreement with a municipality for the benefit of theholders of revenue bonds of the issuing municipality issued pursuant to thisArticle, whereby such county or city agrees to:

(1)        Levy for the life of all revenue bonds issued in connectionwith the revenue bond project an annual property tax not in excess of the rateset forth in the question submitted to voters as hereinafter provided, suchlevy to be based upon the operating supplement requirement, as defined in thissection, or

(2)        Levy for the life of the revenue bonds in respect of whichsuch tax is being levied an annual property tax not in excess of the raterequired to pay the principal of and the interest on the aggregate principalamount of revenue bonds set forth in the question submitted to the voters ashereinafter provided, such levy to be based upon the debt service reservesupplement requirement, as defined in this section.

When any such covenant has been made or any such agreement has beenentered into, the issuing municipality shall determine, and, in those instancesin which the issuing municipality is not also the taxing county or city, theissuing municipality shall certify to the governing board of the taxing countyor city, by not later than June 1 of each fiscal year the amount required,determined as hereinafter provided, to be raised by taxation by such county orcity in the next fiscal year. The county or city is obligated to levy such taxonly to the extent that an operating supplement requirement or a debt servicereserve supplement requirement shall occur during the fiscal year preceding thefiscal year in which the tax is to be levied. In no event shall the county orcity be required to levy a tax in excess of the rate required to be levied inaccordance with the approval of the voters as provided in subsection (c). Whenany such tax is to be levied, the county or city shall include in its budgetordinance an appropriation to the issuing municipality or the appropriate fund,as the case may be, equal to the estimated yield of the tax levy, and shall paysuch appropriation to the issuing municipality or transfer moneys to theappropriate fund in equal monthly installments unless another mutuallysatisfactory schedule of payments is agreed upon.

(b)        A covenant made, or the pledge of an agreement entered into,by a county or city pursuant to this section shall be effected by theprovisions of the revenue bond order or the trust agreement securing revenuebonds of the issuing municipality and where the issuing municipality is notalso the taxing county or city a resolution of the county or city approving theappropriate provisions of the bond order or trust agreement relating to thepledge of the tax. If the taxing county or city is not the issuingmunicipality, it shall file an application for approval of the resolution withthe secretary of the Commission in the manner provided in G.S. 159‑149,and the Commission shall determine whether to approve the application asprovided by G.S. 159‑151 and 159‑152; provided, however, that G.S.159‑148 and 159‑150 shall have no application to this section.

(c)        A covenant made, or agreement entered into, by a county orcity pursuant to this section shall take effect only if approved by theaffirmative vote of a majority of those who vote thereon in a referendum heldin the taxing county or city. The referendum shall be called and held asprovided in G.S. 159‑61, except that

(1)        The ballot proposition shall be in substantially one of thefollowing forms:

Operating Supplement Requirement:

"Shall the (order or agreement) binding the (taxingcounty or city) to levy annually a tax on property not in excess of ______cents on the one hundred dollars ($100.00) value of property subject totaxation for the purpose of supplementing the revenues of (revenue bondproject) in instances where the gross revenues of the project are estimated tobe less than the estimated total costs of the (i) current operating expenses ofthe project, (ii) amount required to maintain the debt service reserve byrepaying any withdrawals therefrom in respect of all outstanding bonds issuedin connection with the project and (iii) debt service on all outstanding bondsissued in connection with the project, all as defined in such (order oragreement), the proceeds of such tax to be used for the payment of the currentoperating expenses of the project so long as any revenue bonds issued thereforremain outstanding and unpaid, be approved?

[   ] Yes

[   ] No"

Debt Service Reserve Supplement Requirement:

"Shall the (order or agreement) binding the(taxing county or city) to levy annually, without limitation as to rate oramount, a tax on property subject to taxation for the purpose of supplementingthe revenues of (revenue bond project) for maintaining the debt service reserverequired by said (order or agreement) in connection with the issuance of not inexcess of $ _______ revenue bonds of (the issuing municipality), so long as anyof such revenue bonds remain outstanding and unpaid, be approved?

[   ] Yes

[   ] No"

and

(2)        The published statement of result shall have the followingstatement appended:

"Any action or proceeding challenging theregularity or validity  of this supplemental tax referendum must be begunwithin 30 days after (date of publication).

                                                                                    ____________________________________

(title of governing board)."

(d)        Any action or proceeding in any court to set aside asupplemental tax referendum held under this section, or to obtain any otherrelief, upon the ground that the referendum is invalid or was irregularlyconducted, must be begun within 30 days after the publication of the statementof the result of the referendum. After the expiration of this period oflimitation, no right of action or defense based upon the invalidity of or anyirregularity in the referendum shall be asserted, nor shall the validity of thereferendum be open to question in any court upon any ground whatever, except inan action or proceeding begun within the period of limitation prescribed inthis subsection.

(e)        An order or agreement submitted to and approved by thevoters pursuant to this section may be repealed at any time before bonds areissued pursuant thereto.

(f)         In instances where the taxing county or city is not theissuing municipality, such county or city may levy taxes as provided for inthis section in respect of a revenue bond project located outside its corporatelimits provided that such county or city is entitled by law to appoint one ormore members of the governing body of such municipality.

(g)        For the purposes of this section,

(1)        A "revenue bond project" is limited,notwithstanding the provisions of G.S. 159‑81, to (i) aeronauticalfacilities, including but not limited to airports, terminals and hangars, (ii)hospitals and other health‑related facilities, and (iii) systems,facilities and equipment for the collection, treatment or disposal of solidwaste within the meaning of said G.S. 159‑81;

(2)        An "operating supplement requirement" occurs when,as set forth in the budget prepared by the issuing municipality in respect ofthe revenue bond project, the estimated cost in the next succeeding fiscal yearof the (i) current operating expenses of the revenue bond project, (ii) amountrequired to maintain the debt service reserve by repaying any withdrawalstherefrom in respect of all outstanding bonds issued in connection with therevenue bond project, and (iii) debt service on all outstanding bonds issued inconnection with the revenue bond project, are in excess of the pledged revenuesof the revenue bond project for such fiscal year as estimated by the issuingmunicipality, excluding taxes levied pursuant to this section; provided,however, that the amount of the operating supplement requirement shall notexceed the total amount of the current operating expenses of the revenue bondproject mentioned in clause (i) above, and

(3)        A "debt service reserve supplement requirement"occurs when there have been withdrawn from the debt service reserve any moneysfor the purpose of paying debt service on the bonds in respect of which thesupplemental tax has been authorized by the voters; provided, however, that theamount of the debt service reserve supplement requirement shall not exceed theamount so withdrawn.

(h)        Any covenant or agreement of a county or city made pursuantto this section, and the obligations assumed thereby, shall be excludable fromthe gross debt of the county or city for purposes of the statement of debtmentioned in G.S. 159‑55.

(i)         For the purposes of this section the terms county or cityshall include a special airport district with respect to financing ofaeronautical facilities. (1973, c. 786, s. 1; 1979, c. 727, s. 5; 1983, c. 795, s. 6.)