§ 142-89. Issuance of limited obligation bonds and notes.
§ 142‑89. Issuance oflimited obligation bonds and notes.
(a) Terms andConditions. Bonds or notes may bear any dates; may be serial or term bonds ornotes, or any combination of these; may mature in any amounts and at any times,not exceeding 40 years from their dates; may be payable at any places, eitherwithin or without the United States, in any coin or currency of the UnitedStates that at the time of payment is legal tender for payment of public andprivate debts; may bear interest at any rates, which may vary from time totime; and may be made redeemable before maturity, at the option of the State orotherwise as may be provided by the State, at any prices, including a pricegreater than the face amount of the bonds or notes, and under any terms andconditions, all as may be determined by the State Treasurer, by and with theconsent of the Council of State.
(b) Signatures; Formand Denomination; Registration. Bonds or notes may be issued in certificatedor uncertificated form. If issued in certificated form, bonds or notes shall besigned on behalf of the State by the Governor or bear the Governor's facsimilesignature, shall be signed by the State Treasurer or bear the State Treasurer'sfacsimile signature, and shall bear the great seal of the State or a facsimileof the seal impressed or imprinted on them. If bonds or notes bear thefacsimile signatures of the Governor and the State Treasurer, the bonds ornotes shall also bear a manual signature which may be that of a bond registrar,trustee, paying agent, or designated assistant of the State Treasurer. If anyofficer whose signature or facsimile signature appears on bonds or notes issuedunder this Article ceases to be that officer before the delivery of the bondsor notes, the signature or facsimile signature shall nevertheless have the samevalidity for all purposes as if the officer had remained in office untildelivery of the bonds or notes. Bonds or notes issued under this Article maybear the facsimile signatures of persons who, at the actual time of theexecution of the bonds or notes, were the proper officers to sign any bond ornote although at the date of the bond or note those persons may not have beenofficers.
The form and denomination ofbonds or notes, including the provisions with respect to registration of thebonds or notes and any system for their registration, shall be as prescribed bythe State Treasurer in conformity with this Article.
(c) Manner of Sale;Expenses. Subject to the approval by the Council of State as to the manner inwhich bonds or notes will be offered for sale, whether at public or privatesale, whether within or without the United States, and whether by publishingnotices in certain newspapers and financial journals, mailing notices, invitingbids by correspondence, negotiating contracts of purchase, or otherwise, theState Treasurer is authorized to sell bonds or notes at one time or from timeto time at any rates of interest, which may vary from time to time, and at anyprices, including a price less than the face amount of the bonds or notes, asthe State Treasurer may determine. All expenses incurred in the preparation,sale, and issuance of bonds or notes shall be paid by the State Treasurer fromthe proceeds of bonds or notes or other available moneys.
(d) Application ofProceeds. The proceeds of any bonds or notes shall be used solely for thepurposes for which the bonds or notes were issued and shall be disbursed in themanner and under the restrictions, if any, that the Council of State mayprovide in the resolution authorizing the issuance of, or in any trustagreement securing, the bonds or notes.
Any additional moneys that maybe received by means of a grant or grants from the United States or any agencyor department thereof or from any other source to aid in financing the cost ofa capital facility may be disbursed, to the extent permitted by the terms ofthe grant or grants, without regard to any limitations imposed by this Article.
(e) Notes; Repayment. By and with the consent of the Council of State, the State Treasurer isauthorized to borrow money and to execute and issue notes of the State for thesame, but only in any of the following circumstances and under the followingconditions:
(1) For anticipating thesale of bonds, the issuance of which the Council of State has approved, if theState Treasurer considers it advisable to postpone the issuance of the bonds.
(2) For the payment ofinterest on or any installment of principal of any bonds then outstanding, ifthere are not sufficient funds in the State treasury with which to pay theinterest or installment of principal as they respectively become due.
(3) For the renewal ofany loan evidenced by notes authorized in this Article.
(4) For the purposesauthorized in this Article.
(5) For refunding bondsor notes or financing contract indebtedness as authorized in this Article.
Funds derived from the sale oflimited obligation bonds or notes may be used in the payment of any bondanticipation notes issued under this Article. Funds provided by the GeneralAssembly for the payment of interest on or principal of bonds shall be used inpaying the interest on or principal of any notes and any renewals thereof, theproceeds of which have been used in paying interest on or principal of thebonds.
(f) Refunding Bondsand Notes. By and with the consent of the Council of State, the StateTreasurer is authorized to issue and sell refunding bonds and notes for thepurpose of refunding special indebtedness and to pay the cost of issuance ofthe refunding bonds or notes. The refunding bonds and notes may be combinedwith any other issues of State bonds and notes issued pursuant to this Article.Refunding bonds or notes may be issued at any time prior to the final maturityof the debt or obligation to be refunded. The proceeds from the sale of anyrefunding bonds or notes shall be applied to the immediate payment andretirement of the obligations being refunded or, if not required for theimmediate payment of the obligations being refunded, the proceeds shall bedeposited in trust to provide for the payment and retirement of the obligationsbeing refunded and to pay any expenses incurred in connection with therefunding. Money in a trust fund may be invested in (i) direct obligations ofthe United States government, (ii) obligations the principal of and interest onwhich are guaranteed by the United States government, (iii) to the extent thenpermitted by law, obligations of any agency or instrumentality of the UnitedStates government, or (iv) certificates of deposit issued by a bank or trustcompany located in the State if the certificates are secured by a pledge of anyof the obligations described in (i), (ii), or (iii) above having an aggregatemarket value, exclusive of accrued interest, equal at least to the principalamount of the certificates so secured. This section does not limit the durationof any deposit in trust for the retirement of obligations being refunded butthat have not matured and are not presently redeemable or, if presentlyredeemable, have not been called for redemption.
(g) Security. Paymentof the principal of and the interest on bonds and notes shall be secured asprovided in G.S. 142‑85.
(h) Trust Agreement. In the discretion of the State Treasurer, any bonds and notes issued under thisArticle may be secured by a trust agreement or similar instrument between theState and a corporate trustee or by a resolution of the Council of Stateproviding for the appointment of a corporate trustee. The corporate trustee maybe, in either case, any trust company or bank that has the powers of a trustcompany within or without the State. The trust agreement or similar instrumentor resolution, hereinafter referred to as "the trust", may providefor security and pledges and assignments that are permitted under this Articleand may provide for the granting of a lien or security interest as authorizedby G.S. 142‑85. The trust may contain any provisions for protecting andenforcing the rights and remedies of the owners of any bonds or notes issuedunder the trust that are reasonable and not in violation of law, includingcovenants setting forth the duties of the State with respect to the purposesfor which bond or note proceeds may be applied, the disposition and applicationof the revenues or assets of the State, the duties of the State with respect tothe capital facilities financed, the disposition of any charges and collectionof any revenues and administrative charges, the terms and conditions of theissuance of additional bonds and notes, and the custody, safeguarding,investment, and application of all moneys. All bonds and notes issued underthis Article pursuant to the same trust shall be equally and ratably secured asprovided in the trust, without priority by reasons of number, dates of bonds ornotes, execution, or delivery, in accordance with the provisions of thisArticle and of the trust. The trust may, however, provide that bonds or notesissued pursuant to the trust shall, to the extent and in the manner prescribedin the trust, be subordinated and junior in standing, with respect to thepayment of principal and interest and to the security of the payment, to anyother bonds or notes issued pursuant to the trust. It is lawful for any bank ortrust company that may act as depositary of the proceeds of bonds or notes,revenues, or any other money under this Article to furnish any indemnifyingbonds or to pledge any securities that may be required by the State Treasurer.The trust may set out the rights and remedies of the owners of any bonds ornotes and of any trustee and may restrict the individual rights of action bythe owners. In addition to the foregoing, the trust may contain any otherprovisions the State Treasurer considers appropriate for the security of theowners of any bonds or notes. Expenses incurred in carrying out the provisionsof the trust may be treated as a part of the cost of any capital facility or asan administrative charge and may be paid from the proceeds of the bonds ornotes or from any other available funds. (2003‑284, s. 46.2; 2003‑314, s. 1;2004-203, s. 79.)