12.90A - ANNUAL APPROPRIATION BONDS.
12.90A ANNUAL APPROPRIATION BONDS.
1. As used in this section, unless the context otherwise
requires:
a. "Annual appropriation bonds" means bonds, notes, or other
evidences of obligations of the state which may be payable during a
fiscal year from one or more of the following sources, subject to the
limitations contained in this section:
(1) Moneys appropriated by law for the payment of debt service
due with respect to the annual appropriation bonds during that fiscal
year.
(2) Proceeds of the sale of the annual appropriation bonds.
(3) Payments received under authorizing documents and other
agreements and ancillary arrangements entered into with respect to
the annual appropriation bonds.
(4) Investment earnings on amounts described in subparagraphs (1)
through (3).
b. "Appropriation" means an act of appropriation by the
general assembly which has become law by approval of the governor or
otherwise.
c. "Authorizing documents" means a trust indenture,
resolution, or other instrument pursuant to which annual
appropriation bonds are issued in accordance with the provisions of
this section and setting forth the terms and conditions thereof.
2. The treasurer of state is authorized to issue and sell annual
appropriation bonds on behalf of the state to provide funds for
certain infrastructure projects and other purposes as provided in
subsection 4 and to refund any annual appropriation bonds previously
issued, and shall have all powers necessary and convenient to carry
out the treasurer of state's duties, and exercise the treasurer of
state's authority, under this section.
3. Annual appropriation bonds may be issued and sold in one or
more series on the terms and conditions the treasurer of state
determines to be in the best interest of the state, in accordance
with this section in such amounts as the treasurer of state
determines to be necessary to fund the purposes for which such annual
appropriation bonds are issued. The treasurer of state may issue
annual appropriation bonds in amounts which provide aggregate net
proceeds of not more than one hundred five million dollars for
purposes of alternative energy projects and for purposes of the
vertical infrastructure restricted capitals fund created in section
8.57D.
4. The treasurer of state may issue annual appropriation bonds as
the treasurer of state determines necessary or desirable to pay for
expenditures for certain infrastructure projects and other purposes
as provided in subsection 3, to the extent practicable in any fiscal
year and without limiting other qualifying capital expenditures
considered and approved by a constitutional majority of each house of
the general assembly and the governor and to provide sufficient funds
for the payment of interest on the annual appropriation bonds, the
establishment of reserves with respect to the annual appropriation
bonds, the payment of costs of issuance of the annual appropriation
bonds, the payment of other expenditures of the treasurer of state
incident to and necessary or convenient in connection with the
issuance of the annual appropriation bonds, and the payment of all
other expenditures necessary or convenient to carry out the purposes
for which the annual appropriation bonds are issued. The treasurer
of state may enter into or obtain authorizing documents and other
agreements and ancillary arrangements with respect to annual
appropriation bonds as the treasurer of state determines to be in the
best interests of the state, including but not limited to trust
indentures, liquidity facilities, remarketing or dealer agreements,
letter of credit agreements, insurance policies, guaranty agreements,
reimbursement agreements, indexing agreements, investment agreements,
or interest exchange agreements. Any authorizing document or other
agreement or ancillary arrangements by which any moneys are pledged
to the payment of annual appropriation bonds shall not be required to
be recorded or filed under the uniform commercial code, chapter 554,
to be valid, binding, or effective.
5. Annual appropriation bonds shall be:
a. In a form, issued in denominations, executed in a manner,
and payable over terms and with rights of redemption, and be subject
to such other terms and conditions as prescribed in their authorizing
documents.
b. Negotiable instruments under the laws of the state and may
be sold at prices, at public or private sale, and in a manner, as
prescribed by the treasurer of state. Chapters 73A, 74, 74A, and 75
do not apply to the sale or issuance of the annual appropriation
bonds.
c. Subject to the terms, conditions, and covenants providing
for the payment of the principal, redemption premiums, if any,
interest, and other terms, conditions, covenants, and protective
provisions safeguarding payment, not inconsistent with this section
and as determined by their authorizing documents.
d. Securities in which public officers and bodies of this
state; political subdivisions of this state; insurance companies and
associations and other persons carrying on an insurance business;
banks, trust companies, savings associations, savings and loan
associations, and investment companies; administrators, guardians,
executors, trustees, and other fiduciaries; and other persons
authorized to invest in bonds or other obligations of the state, may
properly and legally invest funds, including capital, in their
control or belonging to them.
6. Proceeds of annual appropriation bonds not required for
immediate disbursement may be deposited with the treasurer of state
or a trustee, paying agent, escrow agent, or depository as provided
in the authorizing documents and may be invested or reinvested in any
investment as directed by the treasurer of state and specified in
such authorizing documents without regard to any limitation otherwise
provided by law.
7. Annual appropriation bonds are payable in any fiscal year
solely and only out of the moneys, assets, or revenues appropriated
for such purposes by law for that fiscal year, all of which amounts,
once appropriated, shall be deposited into the annual appropriation
bonds debt service fund and used or transferred as provided in this
section to pay debt service due with respect to annual appropriation
bonds during the fiscal year for which such amounts are appropriated.
Annual appropriation bonds are not an obligation, indebtedness, or
debt of the state, or a charge against the general credit or general
fund of the state, and the state shall not be liable for the payment
of any amounts due under any annual appropriation bonds except from
moneys appropriated by law for the payment thereof as provided under
this section. The annual appropriation bonds are not secured by any
pledge of the faith and credit or the taxing powers of the state.
Annual appropriation bonds shall not directly or indirectly obligate
the state to make payments thereon beyond any fiscal year for which
sufficient funds have been appropriated by law for such purpose.
8. In the event that funds are not appropriated for any fiscal
year in an amount sufficient to make the payments of principal and
interest and any other amounts due under the annual appropriation
bonds during such fiscal year all of the following shall apply:
a. The state's obligations under the annual appropriation
bonds shall terminate and become null and void on the last day of the
fiscal year for which funds were appropriated in an amount sufficient
to make the payments of principal and interest and any other amounts
due under the annual appropriation bonds for such fiscal year.
b. The state shall not be obligated to make payment from any
source of any amounts due under the annual appropriation bonds beyond
those amounts for which an appropriation has previously been made.
c. The state shall not be liable to the holders of the annual
appropriation bonds or any other person for any remaining amounts due
under the annual appropriation bonds or for any costs, damages, or
expenses incurred by the holders of the annual appropriation bonds or
any other person as a result of such failure to appropriate. Annual
appropriation bonds, the repayment thereof and any reserve and debt
service funds established with respect thereto shall be subject to
nonappropriation. Annual appropriation bonds issued under this
section shall contain a conspicuous statement of the limitations
established in this subsection.
9. Annual appropriation bonds issued under this section are
declared to be issued for an essential public and governmental
purpose and all annual appropriation bonds issued under this section
shall be exempt from taxation by the state of Iowa and the interest
on the annual appropriation bonds shall be exempt from the state
income tax and the state inheritance tax.
10. In order to better provide for the budgeting and
appropriation of sufficient amounts to make the payments due with
respect to annual appropriation bonds in any fiscal year and to fund
or restore reserve funds established with respect to annual
appropriation bonds, if any, the treasurer of state shall, on or
before January 1 of each calendar year, make and deliver to the
governor and to both houses of the general assembly the treasurer of
state's certificate that includes all of the following:
a. A statement of the amount required to make the payments
due with respect to annual appropriation bonds in the next succeeding
fiscal year and the amount, if any, required to fund or restore any
reserve fund to the reserve fund requirement for that reserve fund.
b. A request that budget and appropriation bills approved for
such fiscal year include amounts sufficient to make the payments due
with respect to annual appropriation bonds during that fiscal year
and to fund or restore any reserve fund to the reserve fund
requirement for that reserve fund.
11. If, after amounts have been appropriated for a fiscal year to
make payment of principal and interest and any other amounts due with
respect to the annual appropriation bonds for such fiscal year and to
fund or restore any reserve fund to the reserve fund requirement for
that reserve fund, the treasurer of state determines that the amounts
appropriated for such purposes are insufficient for any reason, the
treasurer of state shall make and deliver to the governor and to both
houses of the general assembly the treasurer of state's certificate
that includes a statement of the amount of the deficiency and a
request for an additional appropriation for such fiscal year to make
up such deficiency.
12. Any amounts appropriated by law from the general fund of the
state or any other legally available funds to make the payments due
with respect to annual appropriation bonds for a fiscal year shall be
paid to the treasurer of state on or after the first business day of
such fiscal year in as many installments as are needed to accumulate
the total amount so appropriated as soon as funds become legally
available and such amounts, as received, shall be deposited by the
treasurer of state in the annual appropriation bonds debt service
fund.
13. Any amounts appropriated by law to fund or restore any
reserve fund shall be paid to the treasurer of state as soon as funds
become legally available and shall be deposited by the treasurer of
state in the applicable reserve fund. For any fiscal year for which
amounts have been lawfully appropriated in an amount sufficient to
make payment of principal and interest and any other amounts due with
respect to annual appropriation bonds for such fiscal year, to the
extent that appropriated funds have not become fully available so
that amounts deposited into the annual appropriation bonds debt
service fund are not sufficient to make such payment when due, any
moneys on deposit in a reserve fund established with respect to the
annual appropriation bonds may be transferred to the annual
appropriation bonds debt service fund and used to make such payments,
subject to the provisions of this section.
14. The treasurer of state may from time to time issue annual
appropriation bonds for the purpose of refunding any annual
appropriation bonds then outstanding, including the payment of any
redemption premiums thereon and any interest accrued or to accrue to
the date of redemption of the outstanding annual appropriation bonds.
Until the proceeds of annual appropriation bonds issued for the
purpose of refunding outstanding annual appropriation bonds are
applied to the purchase or retirement of outstanding annual
appropriation bonds or the redemption of outstanding annual
appropriation bonds, the proceeds may be placed in escrow and be
invested and reinvested in accordance with the provisions of this
section, the authorizing documents, and any applicable escrow. The
interest, income, and profits earned or realized on an investment may
also be applied to the payment of the outstanding annual
appropriation bonds to be refunded by purchase, retirement, or
redemption. After the terms of the escrow have been fully satisfied
and carried out, any balance of proceeds and interest earned or
realized on the investments shall be returned to the general fund of
the state. All refunding annual appropriation bonds shall be issued
and subject to the provisions of this section in the same manner and
to the same extent as other annual appropriation bonds issued
pursuant to this section.
15. a. It is the intent of the general assembly that the
general assembly make timely appropriations from moneys in the
general fund of the state or any other legally available funds that
are sufficient to make payment of principal and interest and any
other amounts due with respect to annual appropriation bonds in a
fiscal year and to fund or restore any reserve fund established with
respect to the annual appropriation bonds to the reserve fund
requirement for that reserve fund.
b. This section does not create and shall not be construed as
creating a general, legal, or enforceable obligation of the general
assembly to appropriate any moneys for any fiscal year for any of the
foregoing purposes and the decision to appropriate such moneys for
any fiscal year shall be at the complete discretion of the then
current general assembly and governor who shall have the final
responsibility for making such decisions.
16. Neither the treasurer of state nor any person acting on
behalf of the treasurer of state, while acting within the scope of
their employment or agency, is subject to personal liability
resulting from carrying out the powers and duties conferred by this
section.
17. Amounts appropriated pursuant to this section are not subject
to a uniform reduction in accordance with section 8.31. Section History: Recent Form
2009 Acts, ch 174, §1, 4
Referred to in § 12.90B, 12.90C Footnotes
The authority of the treasurer of state to issue one or more
series of annual appropriation bonds under subsection 3 applies to
bonds issued on or after July 1, 2010; 2009 Acts, ch 174, § 4