§ 159-170. Revenue anticipation notes.
§ 159‑170. Revenueanticipation notes.
(a) Authorization; Term. A unit of local government or anonprofit corporation or association operating or leasing a public hospital asdefined in G.S. 159‑39, is authorized to borrow money for the purpose ofpaying appropriations made or expenses budgeted or incurred for the currentfiscal year in anticipation of the receipt of revenues, other than taxes,estimated in its budget to be realized or collected in cash during the fiscalyear, and to issue its negotiable notes in evidence thereof. A nonprofitcorporation or association operating or leasing a public hospital may onlyborrow money pursuant to this section if it is legally entitled to collect andpledge such revenues to the payment of the noted as provided in this section. Arevenue anticipation note shall mature not later than 30 days after the closeof the fiscal year in which it is issued, and may not be renewed beyond thattime.
(b) Limit on Amount; Disclosure. No revenue anticipation loanshall be made if the amount thereof, together with the amount of all revenueanticipation notes authorized or outstanding on the date the loan isauthorized, would exceed eighty percent (80%) of the revenues of the issuingunit or the nonprofit corporation or association operating or leasing a publichospital, other than taxes, estimated in its budget to be realized or collectedin cash during the fiscal year. Each revenue anticipation note shall bear onits face a statement to the effect that it is payable solely from budgetednontax revenues of the issuing unit or the nonprofit corporation or associationoperating or leasing a public hospital and that the faith and credit of theissuing unit or, in the case of revenue anticipation notes issued by anonprofit corporation or association operating or leasing a public hospital,the local government unit that owns the public hospital are not pledged for thepayment of the note. Each note shall also bear on its face or reverse thefollowing certificate signed by the finance officer: "This note and allother revenue anticipation notes of (issuer) authorized or outstanding as of(date) amount to eighty percent (80%) or less of the budgeted nontax revenuesfor the current fiscal year as of the above date." No revenue anticipationnote shall be valid without this certificate.
(c) Faith and Credit Not Pledged. Revenue anticipation notesissued under this section shall be special obligations of the issuing unit orthe nonprofit corporation or association operating or leasing a publichospital. Neither the credit nor the taxing power of the issuing unit or, inthe case of revenue anticipation notes issued by a nonprofit corporation orassociation operating or leasing a public hospital, the local government unitthat owns the public hospital may be pledged for the payment of revenueanticipation notes. No holder of a revenue anticipation note shall have theright to compel the exercise of the taxing power by the issuing unit or, in thecase of revenue anticipation notes issued by a nonprofit corporation orassociation operating or leasing a public hospital, the local government unitthat owns the public hospital or the forfeiture of any of its property inconnection with any default thereon.
(d) Any revenue anticipation notes issued by a nonprofitcorporation or association operating or leasing a public hospital pursuant tothis section are subject to the approval of the city, county, hospitaldistrict, or hospital authority which owns the hospital. Approval of the city,county, hospital district, or hospital authority may be withheld only under oneor more of the following circumstances:
(1) The contract would cause the city, county, hospitaldistrict, or hospital authority to breach or violate any covenant in anexisting financing instrument entered into by such entity.
(2) The contract would restrict the ability of the city, county,hospital district, or hospital authority to incur anticipated bank eligibleindebtedness under federal tax laws.
(3) The entering into of the contract would have a materialadverse impact on the credit ratings of the city, county, hospital district, orhospital authority or otherwise materially interfere with an anticipatedfinancing by such entity. (1917, c. 138, s. 12; 1919, c. 178, s. 3(12); 1921, c. 8, s. 1; Ex.Sess. 1921, c. 106, s. 1; 1927, c. 81, s. 4; 1971, c. 780, s. 1; 1973, c. 494,s. 38; 1999‑386, s. 3.)