§ 7-54-106 — Issuance of bonds - Application of U.C.C. - Exemption from taxation

(a) Any municipality may, from time to time, issue its bonds under this section in such principal amounts as it deems necessary to provide sufficient funds to carry out any of the purposes of this chapter, including the establishment or increase of reserves, interest accrued during construction and for such period after the estimated date of commencement of operation, but not to exceed ten (10) years, as determined to be reasonably necessary by the consulting engineer of record for the financial feasibility of the municipality's undertaking, and the payment of all other costs or expenses of the municipality incident to and necessary or convenient to carry out the purposes of this chapter. As used in this section, "bonds" means and includes bonds, bond anticipation notes, and all other evidences of indebtedness. (b) Neither the members of the governing body of the municipality nor any person executing the bonds shall be liable personally on the bonds. (c) Bonds of the municipality shall be authorized by resolution of its governing body and may be issued under such resolution or under a trust indenture or other security instrument in one (1) or more series and shall bear such date or dates, mature at such time or times, bear interest at such rate or rates, be in such denomination or denominations, be in such form, either coupon or registered, carry such conversion or registration privileges, have such rank or priority, be executed in such manner, be payable in such medium of payment, at such place or places, and be subject to such terms of redemption, with or without premium, as such resolution, trust indenture or other security instrument may provide, and without limitation as to amounts, maturities or interest rates. (d) The bonds may be sold at public or private sale as the municipality may provide and at such price or prices as the municipality shall determine. (e) In the event that any of the officers whose signatures appear on any bonds or coupons shall cease to be such officers before the delivery of such bonds or coupons, such signatures shall, nevertheless, be valid and sufficient for all purposes, as if such officers had remained in office until such delivery. (f) Any municipality has the power in connection with the issuance of its bonds under this section to: (1) Covenant as to the use of any or all of its property, real or personal; (2) Redeem the bonds, covenant for their redemption and provide the terms and conditions of the redemption; (3) Covenant as to the establishment, levy and collection of rates, fees, and charges in such amounts as the municipality shall determine; (4) Covenant and prescribe as to events of default and terms and conditions upon which any or all of its bonds shall become or may be declared due before maturity, as to the terms and conditions upon which such declaration and its consequences may be waived and as to the consequences of default and the remedies of bondholders; (5) Provide for and covenant as to: (A) The pledge of or the grant of a security interest in all or any part of the revenues derived in connection with an energy production facility; (B) The mortgage and pledge of any property, real or personal, constituting part of an energy production facility; or (C) The custody, collection, securing, investment and payment of any revenues, assets, moneys, funds or property relating to an energy production facility; (6) Provide for, and covenant as to, the vesting in a trustee or trustees, within or outside the state, of such properties, rights, powers and duties in trust as the municipality may determine; or (7) Take any other action and do all other things as may be necessary or convenient or desirable in order to secure its bonds, or, in the absolute discretion of the municipality, may tend to make the bonds more marketable, notwithstanding that such covenants, acts or things may not be enumerated in this subsection (f); it being the intention of this subsection (f) to give the municipality power to do all things in the issuance of bonds and in the provisions for security of the bonds that are consistent with this chapter and the constitution of this state. (g) Any municipality may issue refunding bonds for the purpose of paying, or making an exchange for, any of its bonds issued under this chapter, at or prior to maturity or upon acceleration or redemption. Refunding bonds may be issued at such time prior to the maturity or redemption of the refunded bonds as the municipality deems to be in the public interest. The refunding bonds may be issued in amounts sufficient to pay or provide for, whether in payment or exchange, the principal of the bonds being refunded, together with any redemption premium on the bonds, any interest accrued or to accrue to the date of payment of such bonds, the expenses of issuing of the refunding bonds, the expenses of redeeming the bonds being refunded, and such reserves for debt service or other capital or current expenses from the proceeds of such refunding bonds as may be required by the resolution, trust indenture or other security instruments, under which such refunding bonds are issued. The issue of refunding bonds, the maturities and other details for the refunding bonds, the security of the refunding bonds, the rights of the holders and the rights, duties and obligations of the agency in respect of the bonds shall be governed by the provisions of this chapter relating to the issue of bonds other than refunding bonds insofar as the same may be applicable. (h) Whether or not any bonds issued under this section or interest coupons, if any, appertaining to the bonds would otherwise so qualify, such bonds and coupons are hereby made investment securities within the meaning and for all purposes of article 8 of the Uniform Commercial Code, compiled in title 47, chapter 8. (i) Article 9 of the Uniform Commercial Code, compiled as title 47, chapter 9, shall not apply to any pledge or security interest created or granted in connection with bonds issued under this section, nor otherwise with respect to any pledge or security interest created under this section by a municipality. (j) Any pledge or security interest created or granted under this section by a municipality shall be valid and binding from the time when the pledge or security interest is made; moneys or property that are the subject of such pledge or security interest and then held or thereafter received by a municipality shall immediately be subject to such pledge or security interest without any physical delivery of the pledge or security interest or further act; and such pledge or security interest shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the agency, irrespective of whether or not such parties have notice of the claims. Neither the resolution, trust indenture or security instrument nor any other instrument relating to any bonds or otherwise creating or granting any such pledge or security interest need be filed or recorded in any office other than with the records of the municipality. (k) Bonds issued under this section, their transfer and the income from the bonds, including any gain made on the sale of the bonds, shall at all times be free from taxation by the state or any political subdivision or any department, division, commission, board, bureau, agency or instrumentality of the state or any political subdivision of the state, except for inheritance and gift taxes.

Legislative History

Acts 1982, ch. 624, § 7.