§ 35-8.1-13 - Bonds of the authority – Issuance – Purposes.
SECTION 35-8.1-13
§ 35-8.1-13 Bonds of the authority –Issuance – Purposes. – (a) The authority shall have the power and is authorized to provide byresolution for the issuance of bonds upon the request of the governor and afinding of a financial benefit to the state, in such principal amounts as itshall deem necessary to provide funds for the purposes of:
(1) Loaning money to the state to provide funds to pay,redeem, or retire:
(i) All or a part of the 1984 and 1985 bonds; or
(ii) A portion of the unfunded liability of the stateretirement system not to exceed three hundred million dollars ($300,000,000);provided, that the authority conferred hereby, as it relates to the refundedliability of the state retirement system, shall expire on June 30, 1995;
(2) Funding or refunding the principal of, or interest orredemption premium on, any bonds issued by it, whether the bonds or interest tobe paid, funded, or refunded have or have not become due or are subject toredemption prior to maturity in accordance with their terms;
(3) Establishing or increasing reserves to secure or to paysuch bonds or interest thereon as are reasonably required and permitted by law;and
(4) Paying all other costs or expenses of the authorityincident to and necessary or convenient to carry out its purposes and powers.
(b) In the event that the authority issues refunding bondspursuant to subsection (a)(2), the proceeds of the refunding bonds may beapplied, in the discretion of the authority, to the purchase, retirement atmaturity, or redemption of the outstanding bonds either at their earliest or asubsequent redemption date, and may, pending that application, be placed inescrow with a suitable trustee. While the proceeds are held in trust, they maybe invested in obligations of the United States or the state or any other state.
(c) If the authority shall deposit the proceeds of refundingbonds with a suitable trustee in such an amount that, when invested in andcombined with income expected to be derived from obligations of the UnitedStates or the state or any other state, are sufficient to pay all principal,interest, and premium, if any, on any of its outstanding bonds, then, until theoutstanding bonds are called for prepayment or otherwise paid, the outstandingbonds shall not be considered debts of the authority, for any purpose, from thedate of deposit of the moneys with the trustee.
(d) Notwithstanding the provisions of subsections (a) –(c) above, (1) with the consent of both the governor and the general assemblythe authority is hereby authorized to provide by resolution for the issuance,at one time or from time to time, of revenue bonds of the authority for thepurpose of paying all or a part of the cost of any one or more projects, theconstruction or acquisition of which is authorized by this chapter. Theprincipal of and the interest on the bonds shall be payable solely from thefunds herein provided for the payment. The bonds of each issue pursuant to thissubsection shall be dated, shall bear interest at such rate or rates as theauthority shall determine, payable semi-annually, shall mature at such time ortimes not exceeding forty (40) years from their date or dates, as may bedetermined by the authority, and may be made redeemable before maturity, at theoption of the authority, at such price or prices and under such terms andconditions as may be fixed by the authority prior to the issuance of the bonds.The authority shall determine the form of the bonds, including any interestcoupons to be attached thereto, and shall fix the denomination or denominationsof the bonds and the place or places of payment of the principal and interest,which may be at any bank or trust company within or without the state. Thebonds shall be signed by the chairperson of the authority or shall bear his orher facsimile signature, and the official seal of the authority or a facsimilethereof shall be impressed or imprinted thereon and attested by the secretaryof the authority, and any coupons attached to the bonds shall bear thefacsimile signature of the chairperson of the authority. In case any officerwhose signature or facsimile of whose signature shall appear on any bonds orcoupons shall cease to be an officer before the delivery of the bonds, thesignature or the facsimile shall nevertheless be valid and, sufficient for allpurposes, the same as if he or she had remained in office until the delivery.The bonds may be issued in coupon or in registered form, or both, as theauthority may determine, and provision may be made for the registration of anycoupon bonds as to principal alone and also as to both principal and interest,for the reconversion into coupon bonds of any bonds registered as to bothprincipal and interest and for the interchange of registered and coupon bonds.The authority may sell such bonds in such manner, either at public or privatesale, and for such price, as it may determine will best effect the purposes ofthis chapter.
(2) The proceeds of the bonds issued pursuant to subsection(d) shall be used solely for the payment of the cost of the project or projectsfor which the bonds shall have been issued, and shall be disbursed in suchmanner and under such restrictions, if any, as the authority may provide in theresolution authorizing the issuance of the bonds or in the trust agreementhereinafter mentioned securing the same. If the proceeds of the bonds of anyissue shall exceed the cost, the surplus shall be deposited to the credit ofthe sinking fund for the bonds or may be applied to the payment of the cost ofany project thereafter financed under the provisions of subsection (d).
(3) Prior to the preparation of definitive bonds, theauthority may, under like restrictions, issue interim receipts or temporarybonds, with or without coupons, exchangeable for definitive bonds when thebonds shall have been executed and are available for delivery. The authoritymay also provide for the replacement of any bonds which shall become mutilatedor shall be destroyed or lost. Bonds may be issued under the provisions of thissubsection without obtaining the consent of any department, division,commission, board, bureau, or agency of the state, and without any otherproceedings or the happening of any other conditions or things than thoseproceedings, conditions or things which are specifically required by thischapter.
(4) In the discretion of the authority, any bonds issuedunder the provisions of this chapter may be secured by a trust agreement by and between the authority and a corporate trustee, which may be any trust companyor bank having the powers of a trust company within or without the state. Thetrust agreement or the resolution providing for the issuance of the bonds maypledge or assign the revenues to be received and may convey or mortgage anyproject or any part thereof or any combination of projects or parts hereof. Thetrust agreement or resolution providing for the issuance of the bonds maycontain such provisions for protecting and enforcing the rights and remedies ofthe bondholders or noteholders as may be reasonable and proper and not inviolation of the law, including covenants setting forth the duties of theauthority in relation to the acquisition of property and the construction,improvement, maintenance, repair, operation, and insurance of the project orprojects in connection with which the bonds shall have been authorized, thecustody, safeguarding, and application of all moneys, and conditions orlimitations with respect to the issuance of additional bonds. It shall belawful for any bank or trust company incorporated under the laws of the statewhich may act as depository of the proceeds of bonds or of revenues to furnishsuch indemnifying bonds or to pledge such securities as may be required by theauthority. The trust agreement may set forth the rights and remedies of thebondholders and of the trustee, and may restrict the individual right of actionby bondholders. In addition to the foregoing, the trust agreement orresolution may contain such other provisions as the authority may deemreasonable and proper for the security of the bondholders. All expensesincurred in carrying out the provisions of the trust agreement or resolutionmay be treated as a part of the authority's cost of operation and maintenance.
(5) The authority is hereby authorized to provide for theissuance of refunding bonds of the authority for the purpose of refunding anybonds then outstanding which shall have been issued under the provisions ofthis subsection, including the payment of any redemption premium thereon or anyinterest accrued or to accrue to the earliest or subsequent date of redemptionpurchase or maturity of the bonds. The proceeds of bonds or notes issued forthe purpose of refunding outstanding bonds or notes may be applied, in thediscretion of the authority, to the purchase, retirement at maturity, orredemption of the outstanding bonds or notes either on their earliest or asubsequent redemption date, and may, pending the application, be placed inescrow. Any escrowed proceeds may be invested and reinvested in obligations ofor guaranteed by the United States of America, or in certificates of deposit,time deposits, or repurchase agreements fully secured or guaranteed by thestate or the United States, or an instrumentality of either, maturing at suchtime or times as shall be appropriate to assure the prompt payment, as toprincipal, interest, and redemption premium, if any, of the outstanding bondsand notes to be so refunded. The interest, income and profits, if any, earnedor realized on any investment may also be applied to the payment of theoutstanding bonds or notes to be so refunded. After the terms of the escrowhave been fully satisfied and carried out, any balance of the proceeds andinterest, income and profits, if any, earned or realized on the investmentsthereof may be returned to the authority for use by it in furtherance of itspurposes. The issuance of the bonds, the maturities and other details thereof,the rights of the holders thereof, and the rights, duties, and obligations ofthe authority in respect of the same shall be governed by the provisions ofthis chapter insofar as the same may be applicable.