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<br />General Assembly of North Carolina Session 2009
<br />1 the contract or contracts, in whole or in part, on an interest rate, currency. cash flow, or other
<br />2 basis, including the following
<br />3 ~ Interest rate swap agreements, currency swap agreements, insurance
<br />4 agreements, forward payment conversion agreements, and futures.
<br />5 ,~ Contracts providing for payments based on levels of, or changes in, interest
<br />6 rates, currency exchange rates, or stock or other indices.
<br />7 ~ Contracts to exchange cash flows or a series of payments.
<br />8 ~ Contracts to hedge payment, currency, rate, spread, or similar exposure,
<br />9 including interest rate floors or caps, options, puts, and calls.
<br />10 The Trust may enter a contract of this type in connection with, or incidental to, entering into
<br />11 or maintaining any agreement that secures bonds. A contract shall contain the ~,
<br />12 security, term, default, remedy, and other terms and conditions the Board considers appropriate.
<br />13 The Trust may enter a contract of this type with andperson after ig'ving due consideration,
<br />14 where applicable, of the person's creditworthiness as determined by a rating by a nationallX
<br />15 recognized rating agency or any other criteria the Board considers appropriate. In connection
<br />16 with, or incidental to, the issuance or carrying of bonds, or the entering of any contract
<br />17 described in this subsection, the Trust may enter into credit enhancement or liquidity
<br />18 agreements, with payment, interest rate, termination date, currency, security, default, remedy,
<br />19 and other terms and conditions as the Trust determines. Proceeds of bonds and any moneys set
<br />20 aside and pledged to secure payment of bonds or any of the contracts entered into under this
<br />21 subsection may be pledged to and used to service any of the contracts entered into under this
<br />22 section.
<br />23 ~, Bonds and notes are exempt from all State, county, and municipal taxation or
<br />24 assessment, direct or indirect, general or special, whether imposed for the purpose of eneral
<br />25 revenue or otherwise, excluding inheritance and gift taxes, income taxes on the gain from the
<br />26 transfer of bonds and notes, and franchise taxes. The interest on bonds and notes is not subject
<br />27 to taxation as income.
<br />28 ~ Bonds or notes issued under this Article shall not constitute a debt secured b~
<br />29 pledge of the faith and credit of the State or a political subdivision of the State and shall be
<br />30 payable solely from the revenues, income, or assets of the Trust that are pledged for their
<br />31 payment. The face of each bond or note issued shall contain a statement that the Trust is
<br />32 obligated to pay the bond or note or the interest on the bond or note only from the revenues,
<br />33 income, or assets pled ed in payment of the bond or note and that neither the faith and credit
<br />34 nor the taxing_power of the State or any political subdivision of the State is pled eg d in past
<br />35 of the principal of or the interest on the bond or note.
<br />36 ~ The State pledges to the holder of a bond or note issued under this Article that, as
<br />37 long as the bond or note is outstanding and unpaid, the State will not limit or alter the power the
<br />38 Trust had when the bond or note was issued in a way that impairs the ability of the Trust to
<br />39 produce revenues sufficient with other available funds to do all of the following:
<br />40 ~ Maintain and operate the project for which the bond or note was issued.
<br />41 ~ Pay the principal of, interest on, and redemption premium, if any of the
<br />42 bond or note.
<br />43 ~ Fulfill the terms of an agreement with the holder.
<br />44 The State further pledges to the holder of a bond or note issued under this Article that the
<br />45 State will not impair the rights and remedies of the holder concerning the bond or note.
<br />46 ,~ Obligations issued under this Article are made securities in which all public officers
<br />47 and public bodies of the State and its political subdivisions and all insurance companies trust
<br />48 companies, banking associations, investment companies executors administrators trustees
<br />49 and other fiduciaries may properly and legally invest funds, including capital in their control or
<br />50 belonging to them. The obligations are made securities that ma~properly and legall~be
<br />51 deposited with and received by any State or municipal officer or any agency or political
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<br />Attachment number 3
<br />Page 10 F_2 S967 EFa8 of 320
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