TITLE 35

Public Finance

CHAPTER 35-8.1

Refunding Bond Authority

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 by

resolution for the issuance of bonds upon the request of the governor and a

finding of a financial benefit to the state, in such principal amounts as it

shall 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 state

retirement system not to exceed three hundred million dollars ($300,000,000);

provided, that the authority conferred hereby, as it relates to the refunded

liability of the state retirement system, shall expire on June 30, 1995;



   (2) Funding or refunding the principal of, or interest or

redemption premium on, any bonds issued by it, whether the bonds or interest to

be paid, funded, or refunded have or have not become due or are subject to

redemption prior to maturity in accordance with their terms;



   (3) Establishing or increasing reserves to secure or to pay

such bonds or interest thereon as are reasonably required and permitted by law;

and



   (4) Paying all other costs or expenses of the authority

incident to and necessary or convenient to carry out its purposes and powers.



   (b) In the event that the authority issues refunding bonds

pursuant to subsection (a)(2), the proceeds of the refunding bonds may be

applied, in the discretion of the authority, to the purchase, retirement at

maturity, or redemption of the outstanding bonds either at their earliest or a

subsequent redemption date, and may, pending that application, be placed in

escrow with a suitable trustee. While the proceeds are held in trust, they may

be invested in obligations of the United States or the state or any other state.



   (c) If the authority shall deposit the proceeds of refunding

bonds with a suitable trustee in such an amount that, when invested in and

combined with income expected to be derived from obligations of the United

States 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 the

outstanding bonds are called for prepayment or otherwise paid, the outstanding

bonds shall not be considered debts of the authority, for any purpose, from the

date 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 assembly

the 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 the

purpose of paying all or a part of the cost of any one or more projects, the

construction or acquisition of which is authorized by this chapter. The

principal of and the interest on the bonds shall be payable solely from the

funds herein provided for the payment. The bonds of each issue pursuant to this

subsection shall be dated, shall bear interest at such rate or rates as the

authority shall determine, payable semi-annually, shall mature at such time or

times not exceeding forty (40) years from their date or dates, as may be

determined by the authority, and may be made redeemable before maturity, at the

option of the authority, at such price or prices and under such terms and

conditions 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 interest

coupons to be attached thereto, and shall fix the denomination or denominations

of 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. The

bonds shall be signed by the chairperson of the authority or shall bear his or

her facsimile signature, and the official seal of the authority or a facsimile

thereof shall be impressed or imprinted thereon and attested by the secretary

of the authority, and any coupons attached to the bonds shall bear the

facsimile signature of the chairperson of the authority. In case any officer

whose signature or facsimile of whose signature shall appear on any bonds or

coupons shall cease to be an officer before the delivery of the bonds, the

signature or the facsimile shall nevertheless be valid and, sufficient for all

purposes, 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 the

authority may determine, and provision may be made for the registration of any

coupon 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 both

principal and interest and for the interchange of registered and coupon bonds.

The authority may sell such bonds in such manner, either at public or private

sale, and for such price, as it may determine will best effect the purposes of

this 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 projects

for which the bonds shall have been issued, and shall be disbursed in such

manner and under such restrictions, if any, as the authority may provide in the

resolution authorizing the issuance of the bonds or in the trust agreement

hereinafter mentioned securing the same. If the proceeds of the bonds of any

issue shall exceed the cost, the surplus shall be deposited to the credit of

the sinking fund for the bonds or may be applied to the payment of the cost of

any project thereafter financed under the provisions of subsection (d).



   (3) Prior to the preparation of definitive bonds, the

authority may, under like restrictions, issue interim receipts or temporary

bonds, with or without coupons, exchangeable for definitive bonds when the

bonds shall have been executed and are available for delivery. The authority

may also provide for the replacement of any bonds which shall become mutilated

or shall be destroyed or lost. Bonds may be issued under the provisions of this

subsection without obtaining the consent of any department, division,

commission, board, bureau, or agency of the state, and without any other

proceedings or the happening of any other conditions or things than those

proceedings, conditions or things which are specifically required by this

chapter.



   (4) In the discretion of the authority, any bonds issued

under 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 company

or bank having the powers of a trust company within or without the state. The

trust agreement or the resolution providing for the issuance of the bonds may

pledge or assign the revenues to be received and may convey or mortgage any

project or any part thereof or any combination of projects or parts hereof. The

trust agreement or resolution providing for the issuance of the bonds may

contain such provisions for protecting and enforcing the rights and remedies of

the bondholders or noteholders as may be reasonable and proper and not in

violation of the law, including covenants setting forth the duties of the

authority in relation to the acquisition of property and the construction,

improvement, maintenance, repair, operation, and insurance of the project or

projects in connection with which the bonds shall have been authorized, the

custody, safeguarding, and application of all moneys, and conditions or

limitations with respect to the issuance of additional bonds. It shall be

lawful for any bank or trust company incorporated under the laws of the state

which may act as depository of the proceeds of bonds or of revenues to furnish

such indemnifying bonds or to pledge such securities as may be required by the

authority. The trust agreement may set forth the rights and remedies of the

bondholders and of the trustee, and may restrict the individual right of action

by bondholders. In addition to the foregoing, the trust agreement or

resolution may contain such other provisions as the authority may deem

reasonable and proper for the security of the bondholders. All expenses

incurred in carrying out the provisions of the trust agreement or resolution

may be treated as a part of the authority's cost of operation and maintenance.



   (5) The authority is hereby authorized to provide for the

issuance of refunding bonds of the authority for the purpose of refunding any

bonds then outstanding which shall have been issued under the provisions of

this subsection, including the payment of any redemption premium thereon or any

interest accrued or to accrue to the earliest or subsequent date of redemption

purchase or maturity of the bonds. The proceeds of bonds or notes issued for

the purpose of refunding outstanding bonds or notes may be applied, in the

discretion of the authority, to the purchase, retirement at maturity, or

redemption of the outstanding bonds or notes either on their earliest or a

subsequent redemption date, and may, pending the application, be placed in

escrow. Any escrowed proceeds may be invested and reinvested in obligations of

or guaranteed by the United States of America, or in certificates of deposit,

time deposits, or repurchase agreements fully secured or guaranteed by the

state or the United States, or an instrumentality of either, maturing at such

time or times as shall be appropriate to assure the prompt payment, as to

principal, interest, and redemption premium, if any, of the outstanding bonds

and notes to be so refunded. The interest, income and profits, if any, earned

or realized on any investment may also be applied to the payment of the

outstanding bonds or notes to be so refunded. After the terms of the escrow

have been fully satisfied and carried out, any balance of the proceeds and

interest, income and profits, if any, earned or realized on the investments

thereof may be returned to the authority for use by it in furtherance of its

purposes. The issuance of the bonds, the maturities and other details thereof,

the rights of the holders thereof, and the rights, duties, and obligations of

the authority in respect of the same shall be governed by the provisions of

this chapter insofar as the same may be applicable.



History of Section.

(P.L. 1987, ch. 12, § 1; P.L. 1994, ch. 70, art. 16, § 1; P.L. 1994,

ch. 410, § 1; P.L. 1997, ch. 30, art. 2, § 4.)