12A.4 - GENERAL POWERS.
12A.4 GENERAL POWERS.
1. An issuer may issue bonds under this chapter and do all things
necessary with respect to the issuance of the bonds. An issuer shall
have all of the powers necessary to issue and secure bonds and carry
out the purposes for which the bonds are to be issued, including the
power to secure credit enhancement or support and to enter into
agreements providing interest rate protection, as deemed appropriate
by the issuer. The issuer may issue bonds in principal amounts
consistent with the enabling legislation and which the issuer
determines are necessary to provide sufficient funds for the purposes
for which the bonds are issued, and to provide for the payment of
capitalized interest on the bonds, the establishment of reserves to
secure the bonds, the payment of the costs of issuance of the bonds,
the payment of other expenditures of the issuer incident to and
necessary or convenient to carry out the issue, and the payment of
all other expenditures necessary or convenient to carry out the
purposes for which the bonds are issued.
2. The proceeds of bonds issued by the issuer and not required
for immediate disbursement may be deposited with a trustee or
depository or the treasurer of state as provided in the authorizing
documents. Proceeds shall be invested or reinvested as directed by
the treasurer of state and specified in the authorizing documents
without regard to any limitation otherwise provided by law.
3. Bonds shall be issued as follows:
a. In a form, issued in denominations, executed in a manner,
and payable over terms and with rights of redemption, and subject to
such other terms and conditions as prescribed in the authorizing
documents.
b. Sold at prices, at public or private sale, and in a
manner, as prescribed by the issuer. Chapters 73A, 74, 74A, 75, and
76 do not apply to the sale, issuance, or retirement of the bonds if
this chapter is utilized.
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 chapter
and as determined by the authorizing documents.
4. Bonds issued under this chapter are investment securities and
negotiable instruments within the meaning of and for purposes of the
uniform commercial code, chapter 554. Bonds are 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 of the
state, may properly and legally invest funds, including capital, in
their control or belonging to them.
5. Bonds must be authorized by the authorizing documents. The
authorizing documents may, however, delegate to an officer of a board
or of a governing body of an issuer the power to negotiate and fix
the details of an issue of bonds.
6. A resolution, trust agreement, or any other instrument by
which a pledge is created shall not be required to be recorded or
filed under the uniform commercial code, chapter 554, to be valid,
binding, or effective.
7. Subject to the terms of the authorizing documents, the
proceeds of bonds may be expended for administrative expenses.
8. An issuer may issue bonds for the purpose of refunding any
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 bonds. Until the proceeds of bonds
issued for the purpose of refunding outstanding bonds are applied to
the purchase or retirement of outstanding bonds or the redemption of
outstanding bonds, the proceeds may be placed in escrow and be
invested and reinvested in accordance with the provisions of this
chapter, the authorizing documents, and any applicable escrow
agreement. The interest, income, and profits earned or realized on
an investment may also be applied to the payment of the outstanding
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 issuer. All refunding bonds
shall be issued and secured and subject to the provisions of this
chapter in the same manner and to the same extent as other bonds
issued pursuant to this chapter. Section History: Recent Form
2007 Acts, ch 133, §4; 2008 Acts, ch 1065, §4