50-1036 BONDS -- FORM -- CONDITIONS -- BOND ANTICIPATION NOTES.
MUNICIPAL CORPORATIONS
CHAPTER 10
FINANCES
50-1036. Bonds -- Form -- Conditions -- Bond anticipation notes. (a) All revenue bonds issued under authority of this act shall be sold, executed and delivered in the same manner as provided by the municipal bond law for the sale of general obligation negotiable coupon bonds, except that issues of revenue bonds may, in the discretion of the governing body, be sold at a private sale without advertising the same at competitive bidding and at a price above, at, or below par. The ordinance authorizing the issuance of said bonds shall prescribe the form of bonds. Said bonds shall bear interest at a rate or rates, payable annually, or at such lesser intervals as may be prescribed by ordinance; may be in one (1) or more series, bear such date or dates, mature at such time or times, and be redeemable before maturity at the option of the city; may be payable in such medium of payment, at such place or places, may carry such registration privileges, may be subject to such terms of redemption, may contain such terms, covenants and conditions, and may be in such form, either coupon or registered, as such ordinance may provide. Pending preparation of the bonds, interim certificates, in such form and with such provisions as the council may determine, may be issued. Said bonds and interim certificates shall be fully negotiable within the meaning of and for all the purposes of the negotiable instruments law.
Notwithstanding the provisions of the municipal bond law, the governing body in any proceedings authorizing bonds under this act may:
(1) provide for the initial issuance of one (1) or more bonds, in this act called "bond," aggregating the amount of the entire issue;
(2) make such provision for instalment payments of the principal amount of any such bond as it may consider desirable;
(3) provide for the making of any such bond payable to bearer or otherwise, registrable as to principal or as to both principal and interest, and where interest accruing thereon is not represented by interest coupons, for the indorsing of payments of interest on such bonds; and
(4) further make provision in any such proceedings for the manner and circumstances in and under which any such bond may in the future, at the request of the holder thereof, be converted into bonds of smaller denominations, which bonds of smaller denominations may in turn be either coupon bonds or bonds registrable as to principal, or principal and interest, or both.
(b) Whenever the governing body considers it advisable and in the interests of the city to anticipate the issuance of revenue bonds to be issued under this act, the governing body may from time to time and pursuant to appropriate resolution issue bond anticipation notes. Each resolution authorizing the issuance of bond anticipation notes shall:
(1) describe the revenue bonds in anticipation of which the notes are to be issued; and
(2) shall specify the principal amount of the notes, the rate of interest and maturity date of the notes, which maturity date shall be not to exceed five (5) years from the date of issue of such notes; but the time of payment of any such notes may be extended for a period of not exceeding three (3) years from their maturity date.
Bond anticipation notes shall be issued and sold from time to time in such manner and at such price as the governing body shall by resolution determine. Bond anticipation notes shall be in bearer form, except that the governing body may provide for the registration of the notes in the name of the owner either as to principal alone, or as to principal and interest, and on such terms and conditions as the governing body may determine in the authorizing resolution. Interest on bond anticipation notes may be made payable semiannually, annually, or at maturity. Bond anticipation notes may be made redeemable prior to maturity at the option of the governing body in the manner and upon the terms fixed by the resolution authorizing their issuance. Bond anticipation notes shall be executed and shall be in such form and have such details and terms as shall be provided in the authorizing resolution.
Contemporaneously with the issuance of the revenue bonds in anticipation of which bond anticipation notes are issued, all bond anticipation notes so issued, even though they may not then have matured, shall be paid, both as to principal and interest, to date of payment; and all such notes shall be surrendered and canceled.
Bond anticipation notes and the interest on them shall be secured by a pledge of the income and revenues derived by the city from the project to be undertaken with the proceeds of the bond anticipation notes and shall also be made payable from funds derived from the sale of the revenue bonds in anticipation of which the notes are issued.
Bond anticipation notes may be refunded by the issuance of other bond anticipation notes maturing within not more than eight (8) years from the date of the issuance of the initial issue of bond anticipation notes for which this refunding is to be effected.