16.177 - PRISON INFRASTRUCTURE REVENUE BONDS.
16.177 PRISON INFRASTRUCTURE REVENUE BONDS.
1. The authority is authorized to issue its bonds to provide
prison infrastructure financing as provided in this section. The
bonds may only be issued to finance projects which have been approved
for financing by the general assembly. Bonds may be issued in order
to fund the construction and equipping of a project or projects, the
payment of interest on the bonds, the establishment of reserves to
secure the bonds, the costs of issuance of the bonds and other
expenditures incident to or necessary or convenient to carry out the
bond issue. The bonds are investment securities and negotiable
instruments within the meaning of and for the purposes of the uniform
commercial code, chapter 554.
2. The department of corrections is authorized to pledge amounts
in the Iowa prison infrastructure fund established under section
602.8108A as security for the payment of the principal of, premium,
if any, and interest on the bonds. Bonds issued under this section
are payable solely and only out of the moneys, assets, or revenues of
the fund, all of which may be deposited with trustees or depositories
in accordance with bond or security documents, and are not an
indebtedness of this state or the authority, or a charge against the
general credit or general fund of the state or the authority, and the
state shall not be liable for the bonds except from amounts on
deposit in the fund. Bonds issued under this section shall contain a
statement that the bonds do not constitute an indebtedness of the
state or the authority.
3. The proceeds of bonds issued by the authority and not required
for immediate disbursement may be deposited with a trustee or
depository as provided in the bond documents and invested in any
investment approved by the authority and specified in the trust
indenture, resolution, or other instrument pursuant to which the
bonds are issued without regard to any limitation otherwise provided
by law.
4. The 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 the trust
indenture, resolution, or other instrument authorizing their
issuance.
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 authority. Chapters 73A, 74, 74A, and 75 do not
apply to the sale or issuance of the 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 chapter
and as determined by the trust indenture, resolution, or other
instrument authorizing their issuance.
5. The 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 or other obligations of the
state, may properly and legally invest funds, including capital, in
their control or belonging to them.
6. Bonds must be authorized by a trust indenture, resolution, or
other instrument of the authority. However, a trust indenture,
resolution, or other instrument authorizing the issuance of bonds may
delegate to an officer of the issuer the power to negotiate and fix
the details of an issue of bonds.
7. Neither the resolution or trust agreement, nor any other
instrument by which a pledge is created is required to be recorded or
filed under the uniform commercial code, chapter 554, to be valid,
binding, or effective.
8. Bonds issued under this section are declared to be issued for
an essential public and governmental purpose and all bonds issued
under this section shall be exempt from taxation by the state of Iowa
and the interest on the bonds shall be exempt from the state income
tax and the state inheritance tax.
9. The authority shall cooperate with the department of
corrections in the implementation of this section. Section History: Recent Form
94 Acts, ch 1196, §20; 95 Acts, ch 202, § 11; 2005 Acts, ch 3,
§14; 2008 Acts, ch 1119, §4
Referred to in § 602.8108A