STIP Grant Anticipation Notes.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 172

Short Title: STIP Grant Anticipation Notes. (Public)
Sponsors: Senators Sawyer, Lazzara, and Sawrey (Primary Sponsors).
Referred to: Rules and Operations of the Senate
February 26, 2025
*S172-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO AUTHORIZE A LOCAL GOVERNMENT T O BORROW MONEY FOR T HE 2
PURPOSE OF ACCELERAT ING A LOCAL TRANSPOR TATION PROJECT THAT IS 3
IDENTIFIED FOR FUNDI NG UNDER THE STATE T RANSPORTATION 4
IMPROVEMENT PROGRAM (STIP). 5
The General Assembly of North Carolina enacts: 6
SECTION 1. G.S. 159-171 reads as rewritten: 7
"§ 159-171. Grant anticipation notes. 8
(a) A Except as provided in subsection (a1) of this section, a unit of local government is 9
authorized to borrow money for the purpose of paying appropriations made for a capital project 10
in anticipation of the receipt of moneys from grant commitments for such capital project from 11
the State or the United States or any a gencies of either, and to issue its negotiable notes in 12
evidence thereof. Grant anticipation notes under this subsection shall mature not later than 12 13
months after the estimated completion date of such capital project as determined by the governing 14
body of the unit of local government and may be renewed from time to time, but no renewal shall 15
mature later than 12 months after the estimated completion date of such capital project. 16
(a1) A unit of local government is authorized to borrow money for the purpose of paying 17
appropriations made for a capital project identified for funding as a State Transportation 18
Improvement (STI) regional impact or division need project under Article 14B of Chapter 136 19
of the General Statutes (STIP project) in anticipation of the receipt of such funding from the State 20
or the United States or any agencies of either and to issue its negotiable notes in evidence thereof. 21
Grant anticipation notes under this subsection shall mature no later than 12 months after the first 22
day of the calendar year following the calendar year in which the STIP project is scheduled to be 23
completed. Renewal of grant anticipation notes under this subsection is not allowed . Prior to 24
borrowing money under this section, the unit of local g overnment shall enter into an expedited 25
project agreement with the Department of Transportation in accordance with G.S. 136-66.8, the 26
terms of which shall include all of the following: 27
(1) A provision requiring approval of the grant anticipation note from the Local 28
Government Commission. 29
(2) Project identification. 30
(3) Cost of project. 31
(4) A provision including, and requiring compliance with, the project plan as set 32
out in the agreement, including the time line, whether the project is in 33
development or delivery period, project phase, current expected completion 34
date, accelerated completion date using funds authorized under this section, 35
and a requirement that the project be administered accordingly. 36
General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 172-First Edition
(5) Funding expected, source of f unding, revenue forecasts that support funding 1
assumptions, and expected final installment funding date. Identified funding 2
may include financing agreements with private entities but must be equal to 3
the full estimated cost of the project. 4
(6) Repayment plan, and contingency plan for un expected events or 5
circumstances such as natural disasters, delay in federal funding, unex pected 6
revenue losses , increase in project costs, or other circumstances requiring 7
modifying the STIP. 8
(7) Any other terms the Department of Transportation deems necessary to comply 9
with federal law and to ensure (i) any State funds transferred to the unit of 10
local government for repayment of a note under this su bsection will not 11
exceed the local portion of the nonfederal share of the cost of the project and 12
(ii) that State funds either flow back to the unit of local government for 13
repayment of the note or are used directly to repay the note. 14
(b) No Except as provided in subsection (b1) of this section, no grant anticipation note 15
under subsection (a) of this section may be issued if the amount thereof, together with the amount 16
of all other notes authorized or issued in anticipation of the same grant commitment, shall exceed 17
exceeds ninety percent (90%) of the unpaid amount of said grant commitment. Each note shall 18
bear on its face a statement to the effect that it is payable solely from moneys received from a 19
described grant and that the faith and credit of the issuing unit are not pledged for the payment 20
thereof, and on its face or reverse the following certificate signed by the finance officer: "This 21
note and all other grant anticipation notes of (issuing unit) authorized or outstanding as of (date) 22
and issued or to be issued in anticipation of (describe grant commitment) amount t o ninety 23
percent (90%) or less of the unpaid amount of said grant commitment." No grant anticipation 24
note shall be valid without this certificate. 25
(b1) No grant anticipation note under subsection (a1) of this section may be issued if the 26
amount thereof, together with the amount of all other notes authorized or issued in anticipation 27
of the same grant commitment, exceeds the amount of funding identified for the STIP project. 28
Each note shall bear on its face a statement to the effect that it is payable solely from moneys 29
received from a described grant and that the faith and credit of the issuing unit are not pledged 30
for the payment thereof, and on its face or reverse the following certificate signed by the finance 31
officer: "This note and all other grant anticipation notes of (issuing unit) authorized or 32
outstanding as of (date) and issued or to be issued in anticipation of (describe grant commitment) 33
amount to not more than the unpaid amount of said grant commitment. " No grant anticipation 34
note shall be valid without this certificate. 35
(c) Grant anticipation notes issued under this section shall be special obligations of the 36
issuing unit. Neither the credit nor the taxing power of the issuing unit may be pledged for the 37
payment of grant anticipation notes, and no holder of such notes shall have the right to compel 38
the exercise of the taxing power by the issuing unit or the forfeiture of any of its property in 39
connection with any default thereon." 40
SECTION 2. G.S. 136-189.11 is amended by adding a new subsection to read: 41
"(f1) Expedited Project Funded by Local Government. – The Department shall ensure any 42
amendment or modification to the State Transportation Improvement Program will not cause a 43
delay in the repayment of a grant anticipation note issued to a lo cal government in accordance 44
with G.S. 159-171(a1) and (b1)." 45
SECTION 3. The Department of Transportation shall develop procedures and adopt 46
rules as necessary for expedited project agreements made under G.S. 136-66.8 that include the 47
terms and use of grant anticipation notes under G.S. 159-171(a1) and (b1), as enacted by Section 48
1 of this act, and the amendment or modification of the State Transportation Improvement 49
Program project under Section 2 of this act. The Department of the Treasurer, in consultat ion 50
General Assembly Of North Carolina Session 2025
Senate Bill 172-First Edition Page 3
with the Department of Transportation, shall adopt rules as necessary that are consistent with the 1
purposes of Section 1 of this act and Article 4 of Chapter 159 of the General Statutes. 2
SECTION 4. This act is effective when it becomes law. 3