§ 42-133-8 - Bonds.
SECTION 42-133-8
§ 42-133-8 Bonds. – (a) In furtherance of this chapter:
(1) The corporation may issue bonds, from time to time, forthe purposes and in the manner authorized by this chapter. Bonds issuedpursuant to this chapter may be secured by the pledge of a portion of thestate's tobacco receipts sold to the corporation, any monies derived therefrom,and any other sources available to the corporation. The corporation may alsoissue refunding bonds, including advance refunding bonds, for the purpose ofrefunding previously issued bonds.
(2) The corporation may issue its bonds in such principalamounts and at such rate or rates of interest as the corporation by resolutionof the board may determine, establish reserves to secure the bonds, and pay thecosts of issuance of the bonds and all other expenditures of the corporationincident to and necessary to carry out the corporation's purposes or powers.The bonds are investment securities and negotiable instruments within themeaning of and for the purposes of title 6A.
(3) Bonds issued by the corporation are payable solely andonly out of the monies, assets, or revenues pledged by the corporation, and arenot a general obligation or indebtedness of the corporation or an obligation orindebtedness of the state or any subdivision of the state. The corporation hasno power or authorization to pledge the credit or taxing power of the state orany political subdivision of the state, or create a debt or obligation of thestate, or make its debts payable out of any monies except monies of thecorporation.
(4) Bonds shall state on their face that the bonds arepayable both as to principal and interest solely out of the assets of thecorporation pledged for such purpose and; neither the faith and credit nor thetaxing power of the state or any political subdivision thereof is pledged tothe payment of the principal of or the interest on the bonds; do not constitutean indebtedness of the state or any political subdivision of the state; aresecured solely by and are payable solely from the tobacco receipts sold to thecorporation and other monies of the corporation; do not constitute a general,legal, or moral obligation of the state or any political subdivisions thereofand that the state has no obligation or intention to satisfy any deficiency ordefault of any payment of the bonds.
(5) Any pledge by the corporation of a portion of the state'stobacco receipts shall be valid and binding at the time such pledge is made.Tobacco receipts so pledged and then or thereafter received by the corporationshall immediately be subject to the lien of such pledge without any physicaldelivery thereof or further act. The lien of any such pledge shall be valid andbinding as against all parties having claims of any kind against thecorporation, whether such parties have notice of the lien. Notwithstanding anyother provision to the contrary, the resolution of the corporation or any otherinstrument by which a pledge is created need not be recorded or filed toperfect such pledge.
(6) The proceeds of bonds may be invested in any mannerapproved by the board and specified in the trust indenture or resolutionpursuant to which the bonds are issued.
(b) All bonds issued by the corporation shall comply with allof the following:
(1) Bonds shall be in a form, issued in denominations,executed in a manner, and payable over terms and with rights of redemption, asthe board prescribes in the resolution authorizing their issuance.
(2) Bonds shall be fully negotiable instruments under thelaws of this state and may be sold at prices, at public or private sale, and ina manner as prescribed by the board.
(3) Bonds shall be subject to the terms, conditions andcovenants providing for the payment of the principal, redemption premiums, ifany, interest, and other terms, conditions, covenants and protective provisionssafeguarding payment, not inconsistent with this chapter and as determined byresolution of the board authorizing their issuance.
(c) Bonds must be authorized by a resolution of the board;provided, that a resolution authorizing the issuance of bonds may delegate toan officer of the corporation the power to negotiate and fix the details of anissue of bonds by an appropriate certificate of the authorized officer.
(d) To comply with all applicable federal law with respect tothe issuance of bonds, including, but not limited to, tax-exemption provisionsof Internal Revenue Code, the corporation may issue a certain series of bonds,or periodically issue several series of bonds, so that interest on the bondsremains exempt from federal taxation or to comply with the purposes specifiedin this chapter.