GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1991

H	2 

HOUSE BILL 1018
Committee Substitute Favorable 5/6/91

Short Title:  Mun. Power Agencies Financing.	(Public)
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Sponsors:
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Referred to:  
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April 19, 1991

A BILL TO BE ENTITLED
AN ACT TO AUTHORIZE JOINT MUNICIPAL POWER AGENCIES TO ENCUMBER CERTAIN PROPERTY.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 159B-3(6) reads as rewritten:
"(6) 	'Project' shall mean any system or facilities for the generation, transmission and transformation, or any of them, of electric power and energy by any means whatsoever including, but not limited to, any one or more electric generating units situated at a particular site, or any interest in the foregoing, whether an undivided interest as a tenant in common or otherwise. Project does not mean an administrative building or office or facilities related thereto."
Sec. 2.  G.S. 159B-14 reads as rewritten:
"§ 159B-14. Bonds of a joint agency.
A joint agency may issue its bonds pledging to the payment thereof as to both principal and interest the revenues, or any portion thereof, derived or to be derived from all or any of its projects, and any additions and betterments thereto or extensions thereof, or from the sale of power and energy and services and facilities related to the utilization of power and energy, or contributions or advances from its members. In addition, bonds may be secured solely as described in G.S. 159B-11(8), solely by revenues as described in this section, or both by revenues and as described in G.S. 159B-11(8). Bonds of a joint agency shall be authorized by a resolution adopted by its governing board and spread upon its minutes."
Sec. 3.  G.S. 159B-15(a) reads as rewritten:
"(a)	Each municipality and joint agency is hereby authorized to issue at one time or from time to time its bonds for the purpose of paying all or any part of the cost of any of the purposes herein authorized. The principal of, premium, if any, and the interest on such bonds shall be payable solely from the funds or other property herein provided for such payment. The bonds of each issue shall bear interest at such rate or rates as may be determined by the Local Government Commission of North Carolina with the approval of the issuer, provided that the issuer or the Local Government Commission may by contract provide for the establishment and revision by an agent from time to time of interest rates on bonds that bear interest at a variable rate. The bonds of each issue shall be dated and shall mature in such amounts and at such time or times, not exceeding 50 years from their respective date or dates, as may be determined by the governing board of the issuer, and may be made redeemable before maturity at such price or prices and under such terms and conditions as may be fixed by the governing board of the issuer prior to the issuance of the bonds. The governing board of the issuer shall determine the form and the manner of execution of the bonds, including any interest coupons to be attached thereto, and shall fix the denomination or denominations of the bonds and the place or places of payment of principal and interest, which may be at any bank or trust company within or without the State. In case any officer whose signature or a facsimile of whose signature shall appear on any bonds or coupons shall cease to be such officer before the delivery of such bond, such signature or such facsimile shall nevertheless be valid and sufficient for all purposes  the same as if he had remained in office until such delivery. The governing board of the issuer may also provide for the authentication of the bonds by a trustee or fiscal agent appointed by the issuer, or by an authenticating agent of any such trustee or fiscal agent. The bonds may be issued in coupon or in fully registered form, or both, as the governing board of the issuer may determine, and provisions may be made for the registration of any coupon bonds as to principal alone and also as to both principal and interest, and for the reconversion into coupon bonds of any bonds registered as to both principal and interest, and for the interchange of registered and coupon bonds. At the election of a joint agency, any bonds issued and sold in accordance with the provisions of this Chapter may be purchased or otherwise acquired by the joint agency and held by it in lieu of cancellation, and subsequently resold in accordance with the provisions of this Chapter."
Sec. 4.  G.S. 159B-16(1) reads as rewritten:
"(1) 	The pledge of all or any part of the revenues derived or to be derived from the project or projects to be financed by the bonds, or from the sale or other disposition of power and energy and services and facilities related to the utilization of power and energy, or from the electric system or facilities of a municipality or a joint agency."
Sec. 5.  G.S. 159B-16 is amended by adding a new subdivision to read:
"(15)	The pledge, assignment, mortgage, or grant of a security interest in any real or personal property or interest therein, including the pledge, assignment, or grant of a security interest in money, rents, charges, or other revenues, and any other proceeds derived by the joint agency from the sales of any property, insurance, or condemnation awards; provided, however, that in the event of any default on any bonds secured by such pledge, assignment, mortgage, or grant of security interest, the rights of the holders thereof, and the liabilities arising thereupon, shall be limited, except to the extent provided in a pledge of revenues, contributions, or advances to secure such bonds as described in G.S. 159B-14, to the specific property, or interest therein, pledged, assigned, or mortgaged or in which a security interest was granted, to secure such bonds, and no claim for any deficiency shall be made, nor any judgment for a deficiency rendered, as a result of such pledge, assignment, mortgage, or grant of a security interest in such property, or interest therein."
Sec. 6.  G.S. 159B-23 reads as rewritten:
"§ 159B-23. Limited liability.
The bonds shall be special obligations of the municipality or joint agency issuing them. The principal of, premium, if any, and interest on the bonds shall not be payable from the general funds of the municipality or joint agency, nor shall they constitute a legal or equitable pledge, charge, lien, or encumbrance upon any of its property or upon any of its income, receipts, or revenues, except as may be provided in the resolution authorizing the bonds or the trust agreement securing the bonds. Neither the faith and credit nor the taxing power of a municipality or of the State are, or may be, pledged for the payment of the principal of or interest on the bonds, and no holder of the bonds shall have the right to compel the exercise of the taxing power by the State or a municipality or the forfeiture of any of its property in connection with any default thereon, except with respect to such property to the extent provided in G.S. 159B-14 and G.S. 159B-16(15)	and the resolution authorizing the bonds or the trust agreement securing the bonds. Every bond shall recite in substance that the principal of and interest on the bond is payable and secured as provided in the resolution authorizing the bond or the trust agreement securing the bond and that the municipality or joint agency is not obligated to pay the principal or interest except as provided therein."
Sec. 7.  This act is effective upon ratification.