§ 42-116-13 — § 42-116-13. Bonds of the corporation.

§ 42-116-13. Bonds of the corporation.

(a) The corporation may provide by resolution of the board for the issuance from time to time of bonds of the corporation for any of its corporate purposes or for the borrowing of money in anticipation of the issuance of these bonds. Bonds issued by the corporation may be issued as general obligations of the corporation or as special obligations payable solely from particular revenues or funds as may be provided for in any trust agreement or other agreement securing bonds or any revenues dedicated to corporate purposes. Special obligation bonds secured by the special revenue fund created by § 42-116-31 shall not exceed, in the aggregate, an amount for which the aggregate maximum annual debt service payments for principal and interest thereon calculated at the time of the current issuance of any of these bonds, exceeds the receipts exclusive of any receipts resulting from any expansion of the coverage of the sales and use taxes through legislation enacted subsequent to February 1, 1992, produced by six tenths of one percent (0.6%) within the existing sales and use tax rates established in §§ 44-18-18 and 44-18-20 for any twelve (12) consecutive months out of the eighteen (18) consecutive months immediately preceding the issuance of the bonds. Proceeds (net of costs of issuance, reserves, and capitalized interest, if any) of any special obligation bonds secured by the special revenue fund created by § 42-116-31 issued after March 1, 1992, shall be utilized only to effectuate transactions authorized by § 42-116-6(j) and/or to effectuate the provisions of § 42-116-12(e)(1) and (e)(2), or to refund special obligation bonds previously issued for these purposes. These proceeds shall not be utilized to effectuate the provisions of § 42-116-12(e)(3). Any proceeds from the special obligation bonds issued after March 1, 1992, not utilized to effectuate transactions authorized by § 42-116-6(j) and/or to effectuate the provisions of § 42-116-12(e)(1) and (e)(2), or for refunding purposes, shall be segregated, placed in a separate fund, and may be utilized to defease and/or to redeem the special obligation bonds as determined by the corporation from time to time. The corporation may also provide by resolution of the board of directors for the issuance from time to time of temporary notes in anticipation of the revenues to be collected or received by the corporation, including without limitation in anticipation of any payments to the corporation from the state pursuant to § 42-116-11, or in anticipation of the receipt of other grants or aid. The issue of these notes shall be governed by the provisions of this chapter relating to the issue of bonds of the corporation other than those temporary notes as they may be applicable; provided, however, that notes issued in anticipation of revenues shall mature no later than one year from their respective dates, or the date of expected receipt of those revenues, if later, and notes issued in anticipation of grants, or other aid and renewals thereof, shall mature no later than six (6) months after the expected date of receipt of that grant or aid.

(b) The bonds of each issue shall be dated, may bear interest at a rate or rates, including rates variable from time to time as determined by an index, banker's loan, rate or other method determined by the corporation, and shall mature or otherwise be payable at the time or times, as may be determined by the corporation, and may be made redeemable before maturity at the option of the corporation or the holder thereof at a price or prices and under those terms and conditions that may be fixed by the corporation. The corporation shall determine the form of bonds, and the manner of execution of the bonds, and shall fix the denomination or denominations of the bonds and the place or places of payment of principal, redemption premium, if any, and interest, which may be at any bank or trust company within or outside of the state. In case any officer whose signature or a facsimile of whose signature shall appear on any bonds shall cease to be an officer before the delivery thereof, the signature or facsimile shall nevertheless be valid and sufficient for all purposes as if that officer had remained in office until delivery. The corporation may provide for authentication of bonds by a trustee, fiscal agent, registrar or transfer agent. Bonds may be issued in bearer or in registered form, or both, and, if notes, may be made payable to bearer or to order, as the corporation may determine. The corporation may also establish and maintain a system of registration for any bonds whereby the name of the registered owner, the rights evidenced by the bonds, the transfer of the bonds, and those rights and other similar matters are recorded in books or other records maintained by or on behalf of the corporation, and no instrument evidencing the bond or rights need be delivered to the registered owner by the corporation. A copy of the books or other records of the corporation pertaining to any bond registered under the registration system certified by an authorized officer of the corporation or by the agent of the corporation maintaining the system shall be admissible in any proceeding without further authentication. The board of directors may by resolution delegate to any member or officer of the corporation or any combination of these persons the power to determine any of the matters set forth in this section. In the discretion of the corporation, bonds of the corporation may be issued with those terms that will cause the interest on these bonds to be subject to federal income taxation. The corporation may sell its bonds in any manner either at public or private sale, for the price, at the rate or rates of interest, or at discount in lieu of interest, that it may determine will best effect the purposes of this chapter.

(c) The corporation may issue interim receipts or temporary bonds, exchangeable for definitive bonds when the bonds shall have been executed and are available for delivery. The corporation may also provide for replacement of any bonds which shall have become mutilated or shall have been destroyed or lost. The corporation, by itself or through any agent it may select, may purchase and invite offers to tender for purchase any bonds of the corporation at any time outstanding; provided, however, that no purchase by the corporation shall be made at a price, exclusive of accrued interest, if any, exceeding the principal amount thereof or, if greater, the redemption price of the bonds when next redeemable at the option of the corporation, and may resell any bonds so purchased in a manner and for a price that it may determine will best effect the purposes of this chapter.

(d) In the discretion of the board of directors, any bonds issued under this chapter may be secured by a trust agreement in a form and executed in a manner as may be determined by the board of directors between the corporation and the purchasers or holders of those bonds or between the corporation 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 may pledge or assign, in whole or in part, any loan agreements, and the revenues, funds, and other assets or property held or to be received by the corporation, whether then existing or thereafter coming into existence and whether then held or thereafter acquired by the corporation, and the proceeds thereof. The trust agreement may contain any provisions for protecting and enforcing the rights, security and remedies of the bondholders, as may be reasonable and proper including, without limiting the generality of the foregoing, provisions defining defaults and providing for remedies in the event thereof which may include the acceleration of maturities, restrictions on the individual right of action by bondholders, and covenants setting forth the duties of and limitations on the corporation in relation to the custody, safeguarding, investment, and application of moneys, the enforcement of loan agreements, the issue of additional or refunding bonds, the fixing, revision, charging, and collection of charges, the use of any surplus bond proceeds, the establishment of reserves and the making and amending of contracts.

(e) In the discretion of the board of directors, any bonds issued under the authority of this chapter may be issued by the corporation in the form of lines of credit or other banking arrangements under terms and conditions, not inconsistent with this chapter, and under any agreements with the purchasers or makers thereof or any agent or other representative of any purchasers or makers, that the board of directors may determine to be in the best interests of the corporation. In addition to other security provided in this section or otherwise by law, bonds issued by the corporation under any provision of this chapter may be secured, in whole or in part, by financial guarantees, by insurance or by letters or lines of credit issued to the corporation or a trustee or any other person, by any bank, trust company, insurance, or surety company or other financial institution, within or outside of the state, and the corporation may pledge or assign, in whole or in part, any loan agreements, funds, and other assets and property held or to be received by the corporation, and any contract or other rights to receive any loan agreements, funds, and other assets and property, whether then existing or thereafter coming into existence and whether then held or thereafter acquired by the corporation, and the proceeds thereof, as security for those guarantees or insurance or for the reimbursement by the corporation to any issuer of the line or letter of credit.

(f) It shall be lawful for any bank or trust company to act as a depository or trustee of the proceeds of bonds, revenues, or other moneys under a trust agreement of the corporation and to furnish indemnification and to provide security as may be required by the corporation. It is hereby declared that any pledge or assignment made by the corporation under this chapter is an exercise of the governmental powers of the corporation, and loan agreements, revenues, funds, assets, property, and contract or other rights to receive a pledge or assignment and the proceeds thereof which are subject to the lien of a pledge or assignment created under this chapter shall not be applied to any purposes not permitted by a pledge or assignment.

(g) Any holder of a bond issued by the corporation under the provisions of this chapter and any trustee or other representative under a trust agreement securing the bond, except to the extent the rights given in this section may be restricted by the trust agreement, may bring suit upon the bonds in the superior court and may, either at law or in equity, by suit, action, mandamus, or other proceeding for legal or equitable relief, protect and enforce any and all rights under the laws of the state or granted under this chapter or under a trust agreement, and may enforce and compel performance of all duties required by this chapter or by a trust agreement, to be performed by the corporation or by any officer of the corporation.

Legislative History

P.L. 1991, ch. 3, § 4; P.L. 1992, ch. 9, § 1.