§ 11-49-70 — Bonds.

(A) The board may issue bonds in the name of the authority, from time to time, for the purposes and in the manner Stated in this section. (B) All bonds must be secured solely by and payable solely from the State's tobacco receipts, or the portion of the state's tobacco receipts the board determines to pledge for payment. (C) Neither the members of the board nor any person executing the bonds or any notes are liable personally on the bonds or notes or be subject to any personal liability or accountability by reason of the issuance of the bonds. (D) The board has no power to pledge the faith, credit, or taxing power of this State or any of its political subdivisions in connection with the issuance of the bonds, and each bond must recite on its face that it is a special source bond of the authority issued pursuant to and in accordance with this chapter and Section 13(9), Article X of the Constitution of this State, that it is secured solely by and payable solely from the State's tobacco receipts, that it is neither a general, legal, nor moral obligation of the State or any of its political subdivisions, and that it is not backed by the full faith, credit, or taxing power of this State or any of its political subdivisions. Failure to include this language on the face of any bond does not cause the bond to become a general, legal or moral obligation of the State or any of its political subdivisions, or a pledge of the full faith, credit, or taxing power of this State or any of its political subdivisions. (E) Any pledge of the State tobacco receipts made by the authority is valid and binding from the time when the pledge is made. The State tobacco receipts pledged and then or thereafter received by the authority are immediately subject to the lien of the pledge without any physical delivery of the receipt or further act. The lien of the pledge is valid and binding against all parties having claims of any kind in tort, contract, or otherwise against the authority, irrespective of whether the parties have notice of them. Neither the resolution of the authority or any other instrument by which a pledge is created need be recorded or filed to perfect the pledge. (F) The authority may not issue any bond with a scheduled maturity later than thirty years after the date of issuance. (G) When issuing bonds for the purpose described in subsection (J)(2) of this section or to refund the bonds, the authority may sell bonds either in a negotiated transaction with one or more lead underwriters selected by the board on the basis of criteria to be established by the board, or through a competitive bidding process in accordance with procedures to be established by the board. The determination of whether to sell bonds through negotiation or through competitive bidding must be made by the board. (H) The authority may not issue any bonds unless the board has first adopted its resolution authorizing the issuance, finding that the issuance and the proposed use of the bond proceeds is in accordance with this chapter, and setting out the terms and conditions of the bonds and the covenants of the authority with respect to the bonds. These terms must include the issuance date or dates, the maturity date or dates, the principal amount, the interest rates or the means of determining the same, whether fixed or variable, the time, manner, and currency for paying interest and principal, the negotiability of the bonds and any restrictions relating to the registration of the bonds; and the covenants may include, without limitation, the establishment and maintenance of dedicated reserve funds for the payment of debt service on bonds if the State's tobacco receipts are inadequate in any year, restrictions on the later issuance of additional bonds or making the later issuance subject to certain conditions relating to available debt service coverage or otherwise, conditions on the timing of the release of all or a portion of the State's tobacco receipts to the general fund of this State, the enforcement of the master settlement agreement, or any other matter that the board considers appropriate, subject to subsection (I) of this section. (I) The board may not authorize or cause the authority to enter into any covenant that purports to create a general, legal or moral obligation of this State or any of its political subdivisions or to pledge the full faith, credit, or taxing power of the State or any of its political subdivisions; nor may the board authorize or cause the authority to enter into any covenants that purport to create a right on the part of the board, the authority, any bondholder, or any trustee any right to recover funds consisting of the State's tobacco receipts once those funds have been deposited into the general fund of the State in accordance with the terms of this chapter. Any covenant in violation of this subsection is void and of no effect. (J) Subject to the requirements of this section, the board may authorize the issuance of bonds of the authority for the following purposes: (1) refunding, on a current or advance-refunding basis, any outstanding bonds of the authority; or (2) obtaining funds for delivery to the funds as provided in Section 11-11-170. All proceeds of bonds issued for the purpose described in item (2) of this subsection must be delivered promptly to the respective fund, except as needed to defray the costs of issuance of the bonds or to establish any required reserve fund for the bonds. The bonds and the issuance of the bonds are subject to the provisions of Sections 11-15-20 and 11-15-30 and any successor provisions.

Legislative History

HISTORY: 2000 Act No. 387, Part II, SECTION 69A.2.