§ 14-186-416 — Allocation of bond proceeds

(a) (1) Any specified portion of the proceeds of an issue of bonds authorized under the provisions of this subchapter may be allocated to any particular project authorized under this subchapter, or to any construction, as distinguished from the purchase of a port constructed, or vice versa. (2) (A) After an allocation, the designated portion of the proceeds of the bond issue shall be kept separate and apart from the remaining proceeds and shall be held in trust for the performance of the purposes specified and none other. (B) The diversion of these funds to any other purpose may be enjoined on the suit of the trustee under the indenture, if any, accompanying the bonds, or on the suit of any of the bondholders, or on the suit of any person whose property is to be served by the port. (b) In making an allocation, the engineer's original estimate of costs shall control. (c) (1) (A) In the event of the allocation of proceeds, the bonds themselves may be similarly or correspondingly segregated and allocated to the respective purposes of the issue. (B) Bonds segregated and allocated to one (1) purpose shall, from the standpoint of legality and in all other respects, be deemed to have been issued to finance such purpose and that alone. (2) (A) Notwithstanding such allocation and segregation, all bonds of the entire issue will, unless the initial ordinance or order or indenture accompanying the bonds shall provide to the contrary, be secured ratably and equally by the aggregate revenues of the port financed by the bond issue. (B) Unless the ordinance, order, or indenture shall so specifically provide, the allocation of bond proceeds or segregation of bonds mentioned in this section will never have the effect of allocating the revenues from any particular portion of the authorized port exclusively to any particular bond or bonds.

Legislative History

Acts 1959, No. 310, § 10; A.S.A. 1947, § 19-2741.