11-604.01. Revolving line of credit; uses; procedures; bids; application of revenues; exception

A. The board of supervisors may enter into agreements with a financial institution authorized to do business in this state for the purpose of obtaining a separate and distinct revolving line of credit for the county and each individual political subdivision of that county for the current fiscal year to pay the lawful claims and obligations of that political subdivision until sufficient monies for payment from property taxes and other nonrestricted revenues are received by the treasurer in accordance with the following:

1. The county treasurer is the agent for the county and any political subdivision of this state for which the county treasurer acts as treasurer for any agreement entered into under this section and may take any action required under an agreement without further approval of any governing body of a political subdivision.

2. Any agreement entered into under this section shall not be for a term exceeding the period contracted for in section 35-325, subsection C.

3. The agreement shall provide that the financial institution may not charge the county a rate of interest in excess of ten per cent per year for a tax exempt obligation pursuant to the internal revenue code of 1986.

4. The maximum rate permissible for the financial institution to charge for taxable obligations shall be one hundred ten per cent of the previous quarter's weighted average prime rate among this state's top three financial institutions by asset size.

5. The revolving line of credit agreement shall be for an amount of not more than forty-five per cent of the total amount of nonrestricted operating revenues received by each political subdivision in the preceding year.

6. For those political subdivisions which have not received nonrestricted operating revenues in the preceding year, the revolving line of credit agreement shall provide that the maximum revolving line of credit of such political subdivisions shall not exceed forty-five per cent of their estimated first year nonrestricted operating revenues.

7. The revolving line of credit agreement shall provide that the financial institution is entitled to a security interest in the nonrestricted operating revenues received by the treasurer on behalf of each political subdivision to the extent of any credit extended under the commitment made by the financial institution.

B. For a county that uses the procedures provided for by this section, the board of supervisors shall receive bids for the services provided in subsection A as part of the bid process for servicing banks pursuant to title 35, chapter 2, article 2.1.

C. All nonrestricted operating revenues received by each political subdivision shall be applied by the county treasurer on behalf of each political subdivision to any unpaid advances which the political subdivision received pursuant to an agreement entered into under this section. The treasurer shall apply such nonrestricted operating revenues received by the political subdivision to repay advances received by the political subdivision without any further action by the governing body of any political subdivision. These nonrestricted operating revenues shall be applied in the following order according to the order which the advances were made by the financial institution or the warrants registered by the county treasurer:

1. Warrants registered by the county treasurer before September 15, 1989.

2. Advances made pursuant to this section.

3. Warrants registered after September 15, 1989.

D. This section shall not be construed to authorize the extension of credit to a political subdivision for those obligations of the political subdivision in which the monies for repayment are subject to restrictions preventing their use as repayment for such obligations or to require a financial institution to extend credit to any political subdivision.

E. A revolving line of credit agreement entered into under this section shall provide that any political subdivision which exceeds the maximum line of credit provided for the political subdivision shall register any warrants issued in excess of its unpaid maximum line of credit in the manner provided for in this article.