7-89-112 - Authority to issue bonds Application of proceeds of bonds Refunding and refinancing outstanding bonds Payment of real property ad valorem taxes into special fund.
7-89-112. Authority to issue bonds Application of proceeds of bonds Refunding and refinancing outstanding bonds Payment of real property ad valorem taxes into special fund.
(a) The authority shall have power and is authorized to issue its bonds in order to finance:
(1) The costs of any project;
(2) The payment of the costs of issuance of the bonds, including underwriter's discounts, financial advisory fees, preparation of the definitive bonds, preparation of all public offering and marketing materials, advertising, credit enhancement and legal, accounting, fiscal and other similar expenses;
(3) Reimbursement of the authority or the municipality for moneys previously spent by the authority or municipality for any of the purposes set forth in this chapter;
(4) The establishment of reasonable reserves for the payment of debt service on the bonds, for repair and replacement of any project or for such other purposes as the board deems necessary and proper in connection with the issuance of any bonds and operation of any project for the benefit of which the financing is being undertaken; and
(5) The contribution of the authority's share of the funding for any joint venture or joint undertaking for the purposes set forth in this chapter.
(b) (1) The authority shall have the power and is authorized to issue its bonds to refund and refinance outstanding bonds of the authority heretofore or hereafter issued or lawfully assumed by the authority. The proceeds of the sale of the bonds may be applied to:
(A) The payment of the principal amount of the bonds being refunded and refinanced;
(B) The payment of the redemption or tender premium thereon, if any;
(C) The payment of unpaid interest on the bonds being refunded, including interest in arrears, for the payment of which sufficient funds are not available, to the date of delivery or exchange of the refunding bonds;
(D) The payment of fees or other charges incident to the termination of any interest rate hedging agreements, liquidity or credit facilities or other agreements related to the bonds being refunded and refinanced;
(E) The payment of interest on the bonds being refunded and refinanced from the date of delivery of the refunding bonds to maturity or to, and including, the first or any subsequent available redemption date or dates on which the bonds being refunded may be called for redemption;
(F) The payment of the costs of issuance of the refunding bonds, including underwriter's discounts, financial advisory fees, preparation of the definitive bonds, preparation of all public offering and marketing materials, advertising, credit enhancement and legal, accounting, fiscal and other similar expenses, and the costs of refunding the outstanding bonds, including the costs of establishing an escrow for the retirement of the outstanding bonds, trustee and escrow agent fees in connection with any escrow and accounting, legal and other professional fees in connection therewith; and
(G) The establishment of reserves for the purposes set forth in subdivision (a)(4).
(2) Refunding bonds may be issued to refinance and refund more than one (1) issue of outstanding bonds, notwithstanding that the outstanding bonds may have been issued at different times. Refunding bonds may be issued jointly with other refunding bonds or other bonds of the authority. The principal proceeds from the sale of refunding bonds may be applied either to the immediate payment and retirement of the bonds being refunded or, to the extent not required for the immediate payment of the bonds being refunded, to the deposit in escrow with a bank or trust company to provide for the payment and retirement at a later date of the bonds being refunded.
(c) No bonds shall be issued under this chapter unless authorized to be issued by resolution of the board of directors of the authority and approved by resolution of the governing body of the municipality. Bonds authorized to be issued under this chapter may be issued in one (1) or more series, may bear such date or dates, mature at such time or times, not exceeding forty (40) years from their respective dates, bear interest at such rate or rates, payable at such time or times, be in such denominations, be in such form, either coupon or registered, be executed in such manner, be payable in such medium of payment, at such place or places, and be subject to such terms of redemption, with or without premium, as the resolution or resolutions may provide. Bonds may be issued for money or property at competitive or negotiated sale for such price or prices as the board of directors, or its designee, shall determine. The authority may enter into such agreements in connection with the issuance of any bonds as its board of directors may approve, including, without limitation, agreements related to municipal bond insurance, credit or liquidity facility agreements, remarketing agreements and bond purchase agreements.
(d) Bonds may be repurchased by the authority out of any available funds at such price as the board of directors shall determine, and all bonds so repurchased shall be cancelled or held as an investment of the authority as the board may determine.
(e) Pending the preparation or execution of definitive bonds, interim receipts or certificates or temporary bonds may be delivered to the purchasers of bonds.
(f) (1) With respect to all or any portion of any issue of bonds issued under this chapter, at any time during the term of the bonds, and upon receipt of a report of the comptroller of the treasury or the comptroller's designee finding that the contracts and agreements authorized in this subdivision (f)(1) are in compliance with the guidelines, rules or regulations adopted or promulgated by the state funding board, as set forth in § 9-21-130, the authority, by resolution of the board of directors, may authorize and enter into interest rate swap or exchange agreements, agreements establishing interest rate floors or ceilings, or both, and other interest rate hedging agreements under such terms and conditions as the board of directors may determine, including, without limitation, provisions permitting the authority to pay to, or receive from, any person or entity any loss of benefits under such agreement upon early termination of the agreement or default under the agreement.
(2) The authority may enter into an agreement to sell bonds, other than its refunding bonds, under this chapter providing for delivery of its bonds on a date greater than ninety (90) days and not greater than five (5) years,or such greater period of time if approved by the comptroller of the treasury or the comptroller's designee, from the date of execution of the agreement or to sell its refunding bonds providing for delivery of its bonds on a date greater than ninety (90) days from the date of execution of the agreement and not greater than the first optional redemption date on which the bonds being refunded can be optionally redeemed resulting in cost savings or at par, whichever is earlier, only upon receipt of a report of the comptroller of the treasury or the comptroller's designee finding that the agreement or contract of the authority to sell its bonds as authorized in this subdivision (f)(2) is in compliance with the guidelines, rules or regulations adopted or promulgated by the state funding board in accordance with the provisions of § 9-21-130. Agreements to sell bonds and refunding bonds for delivery ninety (90) days or less from the date of execution of the agreement do not require a report of the comptroller of the treasury or the comptroller's designee.
(3) Prior to the adoption by the board of a resolution authorizing a contract or agreement described in subdivision (f)(1) or (f)(2), a request shall be submitted to the comptroller of the treasury or the comptroller's designee for a report finding that the contract or agreement is in compliance with the guidelines, rules or regulations of the state funding board. Within fifteen (15) days of receipt of the request, the comptroller of the treasury or the comptroller's designee shall determine whether the contract or agreement substantially complies with the guidelines, rules or regulations and shall report on the compliance to the authority. If the report of the comptroller of the treasury or the comptroller's designee finds that the contract or agreement complies with the guidelines, rules or regulations of the state funding board or the comptroller of the treasury shall fail to report within the fifteen-day period, then the authority may take such action with respect to the proposed contract or agreement as it deems advisable in accordance with this section and the guidelines, rules or regulations of the state funding board. If the report of the comptroller of the treasury or the comptroller's designee finds that the contract or agreement is not in compliance with the guidelines, rules or regulations, then the authority is not authorized to enter into the contract or agreement. The guidelines, rules or regulations shall provide for an appeal process upon a determination of noncompliance.
(4) When entering into any contracts or agreements facilitating the issuance and sale of bonds, including contracts or agreements providing for liquidity and credit enhancement and reimbursement agreements relating thereto, interest rate swap or exchange agreements, agreements establishing interest rate floors or ceilings or both, other interest rate hedging agreements and agreements with the purchaser of the bonds, evidencing a transaction bearing a reasonable relationship to this state and also to another state or nation, the authority may agree in the written contract or agreement that the rights and remedies of the parties thereto shall be governed by the laws of this state or the laws of such other state or nation; provided, that jurisdiction over the authority shall lie solely in the courts of the county in which the municipality forming the authority is located.
(5) The governing body of the municipality shall authorize by resolution the authority to enter into any contract or agreement described in subdivision (f)(1) or (f)(2) prior to the authority entering into any contract or agreement.
(g) (1) All bonds issued by the authority, as well as any other agreements authorized by this section, may be payable out of the revenues and receipts derived from any projects, or of any portion of projects owned, operated or leased to or from the authority, as may be designated by the board of directors of the authority, or from any revenues to be derived directly or indirectly by the authority from the projects, including revenues from concessions, endorsements, ticket sales and souvenir sales or from any revenues derived directly or indirectly by the authority from the allocation, transfer, contribution or pledge of tax revenues or monies of any nature by the state or a municipality having taxing power or any other revenues or collections of the state or a municipality.
(2) The principal of and interest on any bonds issued by the authority, as well as any other agreements authorized by this section, may be secured, as may be designated by the board of directors of the authority, by a pledge of all or any portion of the revenues and receipts of the authority described in subdivision (g)(1) or by a pledge of the authority's rights under agreements, leases and other contracts or by a mortgage or deed of trust covering all or any part of the projects from which the revenues or receipts so pledged may be derived. The proceedings under which the bonds or any such agreements are authorized and any such pledge agreement or mortgage or deed of trust may contain any agreements and provisions respecting the maintenance of the projects covered by the bonds, the fixing and collection of rents for any portions of projects leased by the authority to others, the creation and maintenance of special funds from such revenues and the rights and remedies available in the event of default, all as the board of directors shall deem advisable and not in conflict with the provisions of this chapter. Each pledge, agreement or mortgage or deed of trust made for the benefit or security of any of the bonds or agreements of the authority shall continue to be effective until the payments thereon for the benefit of which the pledge, agreement or mortgage or deed of trust were made shall have been fully paid. In the event of default in such payment or in any agreement of the authority made as a part of the contract under which the bonds were issued, whether contained in the proceedings authorizing the bonds or in any mortgage or deed of trust executed as security for the bonds, the payment or agreement may be enforced by suit, mandamus, the appointment of a receiver in equity or by foreclosure of any such mortgage or deed of trust, or any one (1) or more of such remedies.
(h) The authority may issue interim certificates, bond anticipation notes or other temporary obligations pending the issuance of its revenue bonds, which such temporary obligations shall be payable out of revenues and receipts of the authority in like manner as the revenue bonds and shall be retired from the proceeds of the bonds upon the issuance of the revenue bonds, and shall be in such form and contain such terms, conditions and provisions consistent with this chapter as the board of directors may determine.
(i) Bonds and notes of the authority shall be executed in the name of the authority by the officers of the authority and in the manner that the board of directors may direct. If so provided in the proceedings authorizing the bonds, the facsimile signature of any of the officers executing the bonds may appear on the bonds in lieu of the manual signature of the officer.
(j) Any bonds and notes of the authority may be sold at public or private sale, for such price and in such manner and from time to time as may be determined by the board of directors of the authority to be most advantageous, and the authority may pay all expenses, premiums and commissions that its board of directors may deem necessary or advantageous in connection with the issuance of the bonds.
(k) (1) Notwithstanding this section or any other law to the contrary, a convention center authority and the municipality in which it is located may enter into an agreement under which all or any portion of the real property ad valorem taxes paid by the owner of convention center facilities, if other than the municipality or the authority, shall be paid into a special fund of the municipality, subject to the conditions set forth in this subdivision (k)(1). The municipality is authorized to use the moneys in the fund in order to make any payments due to the convention center authority from the municipality under a contractual obligation. This fund may only be utilized where the funds paid from the special fund to the convention center authority shall be principally used by the convention center authority to make payments on revenue bonds issued by the convention center authority, where the net proceeds of the bonds were used by the convention center authority to acquire, construct or equip systems, improvements or facilities that are public improvements dedicated for public use, and the improvements were made by the convention center authority in order to assist in the development and construction of the convention center facility, and the convention center authority is authorized to pledge any moneys paid to it from the fund as collateral for the revenue bonds, notwithstanding any contrary provisions of this section. The agreement between the convention center authority and the municipality shall not be effective unless approved by the comptroller of the treasury and authorized by appropriate resolution of the governing body of the municipality.
(2) Notwithstanding subdivision (k)(1), if the convention center authority is not the owner of the convention center facility, then prior to the issuance of any bonds for a project as defined in § 7-89-103 related to the convention center facility, the convention center authority, in addition to the pledge of revenues from the project as the source of payment for the bonds, may provide further security for the payment of the bonds, such as bond insurance, a surety bond, a letter of credit, a third party guarantee, the contractual obligation of the owner or operator of the convention center facility as to its ownership and operation during the term of the bonds or other similar security, all of which must be submitted to the comptroller of the treasury for approval.
(l) An authority or instrumentality of the state that has or will issue debt, the interest of which is excluded from income for federal taxation purposes, shall certify to the comptroller of the treasury that the authority or the instrumentality has taken due care to confirm that the bonds, project and the contracts are in compliance with federal regulations and revenue procedures.
[Acts 2009, ch. 474, § 1.]