General Assembly: 82 (2007 Regular GA) - Chapter 133 - State obligations — uniform finance procedures


Published: 2007-05-09

Subscribe to a Global-Regulation Premium Membership Today!

Key Benefits:

Subscribe Now for only USD$20 per month, or Get a Day Pass for only USD$4.99.

376LAWS OF THE EIGHTY-SECOND G.A., 2007 SESSIONCH. 132

Sec. 3. APPLICABILITY. This Act applies to all actions filed on or after the effective date of this Act.

Approved May 9, 2007

_________________________

CH. 133CH. 133

CHAPTER 133

STATE OBLIGATIONS — UNIFORM FINANCE PROCEDURES

S.F. 539

AN ACT establishing uniform finance procedures for obligations issued by the state.

Be It Enacted by the General Assembly of the State of Iowa:

Section 1. NEW SECTION. 12F.1 DEFINITIONS. As used in this chapter, unless the context otherwise requires: 1. “Authorizing document” means the resolution of the issuer, indenture of trust, or other

instrument setting forth the terms and conditions of obligations issued in accordancewith the provisions of this chapter. 2. “Enabling legislation”means legislation enabling the issuance by an issuer of obligations

in accordance with the provisions of this chapter. 3. “Issuer”means the state, a department or public or quasi-public agency or instrumentali-

ty of the state, or an authority of the state authorized to issue obligations and enabled to issue the obligations in accordance with the provisions of this chapter. 4. “Obligations”means notes, bonds, including refunding bonds, and other evidences of in-

debtedness of an issuer.

Sec. 2. NEW SECTION. 12F.2 PROVISIONS APPLICABLE. An issuermay issue obligations in accordancewith the provisions of this chapter if enabling

legislation enacted on or after the effective date of this Act provides that the obligations shall or may be issued in accordance with the provisions of this chapter. This chapter establishes the terms, conditions, and procedures applicable to the issuance of obligations by an issuer enabled to issue obligations under this chapter.

Sec. 3. NEW SECTION. 12F.3 LIMITED OBLIGATIONS. Obligations issued under this chapter are payable solely out of the moneys, assets, or reve-

nues pledged to the payment of the obligations pursuant to the enabling legislation and any bond reserve funds established in accordancewith this chapter, all of whichmay be deposited with trustees or depositories in accordance with the authorizing documents and pledged by the issuer to the payment thereof. Obligations issued under this chapter shall contain a state- ment that the obligations are issued pursuant to this chapter; are payable solely from themon- eys, assets, and revenues pledged for their payment and any bond reserve funds established; and that such obligations do not constitute an indebtedness of the state. The issuer shall not pledge the credit or taxing power of this state or any political subdivision of this state or make obligations issued pursuant to this chapter payable out of any moneys except those pledged in the enabling legislation and any bond reserve funds established by the issuer.

Sec. 4. NEW SECTION. 12F.4 GENERAL POWERS. 1. An issuer may issue obligations under this chapter and do all things necessary with re-

377 LAWS OF THE EIGHTY-SECOND G.A., 2007 SESSION CH. 133

spect to the issuance of the obligations. An issuer shall have all of the powers necessary to issue and secure obligations and carry out the purposes for which the obligations are to be is- sued, including the power to secure credit enhancement or support and to enter into agree- ments providing interest rate protection, as deemed appropriate by the issuer. The issuermay issue obligations in principal amounts consistent with the enabling legislation and which the issuer determines are necessary to provide sufficient funds for the purposes forwhich the obli- gations are issued, and to provide for the payment of capitalized interest on the obligations, the establishment of reserves to secure the obligations, the payment of the costs of issuance of the obligations, the payment of other expenditures of the issuer incident to and necessary or convenient to carry out the issue, and the payment of all other expenditures necessary or convenient to the purposes for which the obligations are issued. 2. Theproceeds of obligations issued by the issuer andnot required for immediate disburse-

ment may be deposited with a trustee or depository or the treasurer of state as provided in the authorizing documents. Proceeds shall be invested or reinvested as directed by the treasurer of state and specified in the authorizing documentswithout regard to any limitation otherwise provided by law. 3. Obligations shall be issued as follows: a. In a form, issued in denominations, executed in a manner, and payable over terms and

with rights of redemption, and subject to such other terms and conditions as prescribed in the authorizing documents. b. Sold at prices, at public or private sale, and in a manner, as prescribed by the issuer.

Chapters 73A, 74, 74A, 75, and 76 donot apply to the sale, issuance, or retirement of the obliga- tions if this chapter is utilized. c. Subject to the terms, conditions, and covenants providing for the payment of the princi-

pal, redemptionpremiums, if any, interest, andother terms, conditions, covenants, andprotec- tive provisions safeguarding payment, not inconsistent with this chapter and as determined by the authorizing documents. 4. Obligations issued under this chapter are investment securities and negotiable instru-

ments within the meaning of and for purposes of the uniform commercial code, chapter 554. Obligations are securities in which public officers and bodies of this state; political subdivi- sions of this state; insurance companies and associations and other persons carrying on an in- surance business; banks, trust companies, savings associations, savings and loan associa- tions, and investment companies; administrators, guardians, executors, trustees, and other fiduciaries; andother persons authorized to invest in obligations of the state,mayproperly and legally invest funds, including capital, in their control or belonging to them. 5. Obligations must be authorized by a trust indenture, resolution, or other instrument of

the issuer. A trust indenture, resolution, or other instrument authorizing the issuance of obli- gations may, however, delegate to an officer of a board or of a governing body of an issuer the power to negotiate and fix the details of an issue of obligations. 6. A resolution, trust agreement, or any other instrument by which a pledge is created shall

not be required to be recorded or filed under the uniform commercial code, chapter 554, to be valid, binding, or effective. 7. Subject to the terms of the authorizing documents, the proceeds of obligations may be

expended for administrative expenses. 8. An issuer may issue obligations for the purpose of refunding any obligations then out-

standing, including the payment of any redemption premiums thereon and any interest ac- crued or to accrue to the date of redemption of the outstanding obligations. Until the proceeds of obligations issued for the purpose of refunding outstanding obligations are applied to the purchase or retirement of outstanding obligations or the redemption of outstanding obliga- tions, theproceedsmaybeplaced in escrowandbe invested and reinvested in accordancewith the provisions of this chapter, the authorizing documents, and any applicable escrow agree- ment. The interest, income, and profits earned or realized on an investment may also be ap- plied to the payment of the outstanding obligations to be refunded by purchase, retirement, or redemption. After the terms of the escrowhave been fully satisfied and carried out, any bal-

378LAWS OF THE EIGHTY-SECOND G.A., 2007 SESSIONCH. 133

ance of proceeds and interest earned or realized on the investments may be returned to the issuer. All refunding obligations shall be issued and secured and subject to the provisions of this chapter in the same manner and to the same extent as other obligations issued pursuant to this chapter.

Sec. 5. NEW SECTION. 12F.5 RESERVE FUNDS. 1. An issuer may create and establish one or more special funds, to be known as bond re-

serve funds, to secure one or more issues of obligations. The issuer shall pay into each bond reserve fund anymoneys appropriated andmade available by the state for the purpose of that reserve fund, any proceeds of the sale of obligations to the extent provided in the authorizing documents, and any other moneys which may be available from any other sources and which the issuer determines to deposit in the reserve fund. All moneys held in a bond reserve fund, except as otherwise provided in this chapter, shall be used as required solely for the payment of the principal of obligations secured in whole or in part by the fund or of the sinking fund or other payments with respect to the obligations, the purchase or redemption of the obliga- tions, the payment of interest on the obligations, or the payments of any redemption premium required to be paid when the obligations are redeemed prior to maturity. 2. Moneys in a bond reserve fund shall not be withdrawn at any time in an amount that will

reduce the amount of the fund to less than the bond reserve fund requirement established for the fund, except for the purpose of making, with respect to obligations secured in whole or in part by the fund, paymentwhendue of principal, interest, redemption premiums, and the sink- ing fund and other payments with respect to the obligations for which other moneys are not available, all in accordancewith the authorizing documents. For the purposes of this chapter, “bond reserve fund requirement”means, as of any particular date of computation, the amount of moneys, provided in the authorizing documents with respect to which the fund is estab- lished. Any income or interest earned by, or incremental to, a bond reserve fund due to its in- vestment may be transferred to other funds or accounts as provided in the authorizing docu- ments to the extent the transfer does not reduce the amount of that bond reserve fund below its bond reserve fund requirement. 3. The issuer shall not at any time issue obligations, secured in whole or in part by a bond

reserve fund if, upon the issuance of the obligations, the amount in the bond reserve fund for the obligations will be less than the bond reserve fund requirement for the fund, unless the is- suer at the time of issuance of the obligations deposits in the fund from the proceeds of the obligations issued or from other sources an amount which, together with the amount then in the fund, will not be less than the bond reserve fund requirement for the fund. 4. In order to assure maintenance of bond reserve funds, an issuer shall, on or before Janu-

ary 1 of each calendar year, make and deliver to the governor the issuer’s certificate stating the sum, if any, required to restore each bond reserve fund to the bond reserve fund require- ment for that fund. Within thirty days after the beginning of the session of the general assem- blynext following thedelivery of the certificate, thegovernor shall submit tobothhousesprint- ed copies of a budget including the sum, if any, required to restore each bond reserve fund to the bond reserve fund requirement for that fund. Any sums appropriated by the general as- sembly and paid to the issuer pursuant to this subsection shall be deposited by the issuer in the applicable bond reserve fund.

Sec. 6. NEW SECTION. 12F.6 PLEDGE OF FUNDS. 1. Amounts authorized tobepledgedas security for obligations shall beheld in separate and

distinct funds in the state treasury. Moneys in a fund shall not be subject to appropriation for any other purpose by the general assembly, but shall be used only for debt service on the obli- gations and other amounts as set forth in the authorizing documents. The treasurer of state shall act as custodian of the funds and disburse moneys contained in the funds as directed by the authorizing documents. 2. Moneys in any fund pledged as security for obligations are not subject to section 8.33.

Notwithstanding section 12C.7, subsection 2, interest or earnings onmoneys in the funds shall be credited to the applicable fund.

379 LAWS OF THE EIGHTY-SECOND G.A., 2007 SESSION CH. 133

Sec. 7. NEW SECTION. 12F.7 RESOLUTION PROVISIONS. Authorizing document provisions, which shall be a part of the contract with the holders of

the obligations to be issued, may contain the following: 1. Pledging or assigning the revenue of a project with respect to which the obligations are

to be issued or the revenue of other property or facilities. 2. Setting aside reserves or sinking funds, and their regulation, investment, anddisposition. 3. Limitations on the use of a project. 4. Limitations on the purpose to which or the investments in which the proceeds of sale of

an issue of obligations then or thereafter to be issued may be applied and pledging the pro- ceeds to secure the payment of the obligations or an issue of the obligations. 5. Limitationson the issuanceof additional obligations, the termsuponwhichadditional ob-

ligations may be issued and secured, and the refunding of outstanding obligations. 6. The procedure, if any, bywhich the terms of any contract with the holder of an obligation

may be amended or abrogated, the amount of obligationsmay be specified for which the hold- ers must consent to amendment or abrogation, and the manner in which the consent may be given. 7. Defining the acts or omissions to act which constitute a default in the duties of the issuer

to holders of obligations and providing the rights and remedies of the holders in the event of a default. 8. Other matters relating to the obligations as may be provided by the issuer.

Sec. 8. NEW SECTION. 12F.8 OBLIGATIONS SECURED BY TRUST AGREEMENT. Obligations issued under this chapter may be secured by a trust agreement by and between

the issuer and an incorporated trustee,whichmay be a trust company or bankhaving the pow- ers of a trust company in this state or another state. The trust agreement or the resolution pro- viding for the issuance of the obligations may pledge or assign the revenue to be received for payment of the obligations or the proceeds of any contract pledged. A pledge or assignment made by the issuer pursuant to this chapter is valid and binding from the time that the pledge or assignment ismade, and the revenue pledged and thereafter received by the issuer is imme- diately subject to the lien of the pledge or assignment without physical delivery or any further act. The lien of the pledge or assignment is valid and binding against all parties having claims of any kind in tort, contract, or otherwise against the issuer irrespective of whether the parties have notice of the lien. The trust agreement or resolution by which a pledge is created or an assignment made shall be filed in the records of the issuer. The trust agreement or resolution providing for the issuance of the obligationsmay contain provisions for protecting and enforc- ing the rights and remedies of the holders of an obligation as are reasonable and proper, not in violation of law, orprovided for in this chapter. Abankor trust company incorporatedunder the laws of this state or another state which acts as depository of proceeds of the obligations, revenue, or other moneys shall furnish the indemnifying obligations or pledge securities as and to the extent required by the issuer. The trust agreement or resolution may set forth the rights and remedies of the holders of an obligation and of the trustee, andmay restrict the indi- vidual right of action by holders of an obligation. The trust agreement or resolution may con- tain other provisions the issuer deems reasonable and proper for the security of the obligation holders.

Sec. 9. NEW SECTION. 12F.9 STATE TAX. Obligations issuedunder theprovisionsof this chapter aredeclared tobe issued for ageneral

public and governmental purpose and the obligations and interest on the obligations shall be exempt from state income and inheritance tax.

Sec. 10. NEW SECTION. 12F.10 AGREEMENT OF THE STATE. The state pledges to andagreeswith theholders of anyobligations issuedunder this chapter,

and with those parties who enter into contracts with an issuer pursuant to this chapter, that the statewill not limit or alter the rights vested in the issuer until the obligations, togetherwith

380LAWS OF THE EIGHTY-SECOND G.A., 2007 SESSIONCH. 133

the interest on the obligations, are fully met and discharged and the contracts are fully per- formedon thepart of the issuer, except that this chapter does not preclude a limitation or alter- ation if adequate provision is made by law for the protection of the rights of the holders of the obligations of the issuer or those entering into contracts with the issuer.

Sec. 11. NEW SECTION. 12F.11 PROVISIONS CONTROLLING. The powers granted issuers under this chapter are in addition to the powers of each issuer

contained elsewhere in theCode. Nothing in this chapter limits thepowers of an issuer to issue obligations under any other applicable provisions of the Code or to otherwise carry out its re- sponsibilities as otherwise set forth in the Code.

Sec. 12. NEW SECTION. 12F.12 CONSTRUCTION. This chapter, beingnecessary for thewelfare of this state and its inhabitants, shall be liberal-

ly construed to effect its purpose.

Approved May 9, 2007

_________________________

CH. 134CH. 134

CHAPTER 134

TRUSTS AND ESTATES — MISCELLANEOUS CHANGES

S.F. 540

ANACT relating to trusts and estates including fiduciaries and beneficiaries and including ap- plicability provisions.

Be It Enacted by the General Assembly of the State of Iowa:

Section 1. Section 421.27, subsection 1, Code 2007, is amended by adding the following new paragraph: NEW PARAGRAPH. m. The failure to file a timely inheritance tax return resulting solely

from a disclaimer that required the personal representative to file an inheritance tax return. The penalty shall be waived if such return is filed and any tax due is paid within the later of nine months from the date of death or sixty days from the delivery or filing of the disclaimer pursuant to section 633E.12.

Sec. 2. Section 450.4, Code 2007, is amended by adding the following new subsection: NEW SUBSECTION. 9. On the value of tangible personal property as defined in section

633.276 which is distributed in kind from the estate if the aggregate of all tangible personal property in the estate does not exceed five thousand dollars.

Sec. 3. Section 561.1, Code 2007, is amended to read as follows: 561.1 “HOMESTEAD” DEFINED. 1. The homestead must embrace the house used as a home by the owner, and, if the owner

has two or more houses thus used, the owner may select which the owner will retain. It may contain one or more contiguous lots or tracts of land, with the building and other appurte- nances thereon, habitually and in good faith used as part of the same homestead. 2. As used in this chapter, “owner” includes but is not limited to the person, or the surviving