§37D-3 Related agreements. With the approval of the attorney general as to form and legality, the department may, and with the approval of the attorney general as to form and legality and of the director as to fiscal responsibility, an agency may:

(1) Enter into agreements with trustees, within or without the State, to hold financing agreement proceeds, payments, and reserves as security for lenders to accept assignments of rights in the financing agreement from, and to enforce the rights of, the lessor or other party thereto, and to issue certificates of participation for the right to receive payments due from the department or agency under a financing agreement. A financing agreement by an agency shall provide that all payments due from the agency under the financing agreement shall be deposited to or on the order of the department, or shall be for payment to or at the order of the lender in accordance with the financing agreement. The sale of certificates of participation shall be, at the option of the director, by negotiation or by competitive sale, in accordance with the procedures set out by section 39-55. The interest component of the certificates of participation shall be at the rate or rates payable at the time or times as the financing agreement may provide. The certificates of participation may be in one or more series; may bear the date or dates; may mature at the time or times not exceeding the lesser of:

(A) The weighted average economic life of the related project or projects; or

(B) Thirty years from their date;

may be payable in the medium of payment at the place or places within or without the State; may carry registration privileges; may be subject to terms of redemption, to tenders for purchase or to purchase prior to their stated maturity at the option of the department or the agency, or the holder, or both; and may contain terms, covenants, and conditions; and may be in the form, either coupon or registered, as the financing agreement may provide. Amounts held by a trustee shall be invested by the trustee at the direction of the department or the agency in investments as are permitted by state law and as shall be specified in the agreement with the trustee. Interest earned on any investment held by a trustee as security for a financing agreement may, at the option of the department or the agency, be credited to the accounts held by the trustee and applied in payment of sums due under the financing agreement;

(2) Enter into credit enhancement agreements for financing agreements or certificates of participation; provided that the credit enhancement agreements shall be payable solely from available moneys and amounts received from the exercise of property rights granted under the financing agreements;

(3) Use financing agreements to finance the costs of acquiring or refinancing property, plus the costs of reserves and credit enhancements and costs associated with obtaining the financing;

(4) Grant leases of real property subject to section 37D-2(b)(2). The leases may be for a term that ends on the date on which all amounts due under a financing agreement have been paid or provision for payment has been made or ten years after the last scheduled payment under a financing agreement, whichever is later. The leases may grant the lessor the right to evict the department or the agency, as the case may be, and exclude it from possession of the real property for the term of the lease, if the department or the agency, as the case may be, fails to appropriate or pay when due the amounts scheduled to be paid under a financing agreement or otherwise defaults under a financing agreement. Upon failure to pay or default, the lessor may sublease the land to third parties and apply any rentals toward payments scheduled to be made under a financing agreement;

(5) Grant security interests in personal property subject to section 37D-2(b)(2). The security interests shall attach and be perfected on the date the department or the agency, as the case may be, takes possession of the personal property, or the date the secured party advances money under a financing agreement, whichever is later. A security interest authorized by this section shall have, except as otherwise provided by law, priority over all other liens and claims. Upon failure to pay or default, the secured party shall have the rights and remedies available to a secured party under chapter 490 or a first, perfected security interest in goods and fixtures. No later than ten days after a security interest authorized by this section attaches, the department or the agency, as the case may be, shall cause a financing statement for the security interest to be filed with the bureau of conveyances in the same manner as financing statements are filed for goods;

(6) Pledge any amounts that are deposited with a trustee in accordance with a financing agreement. The pledge shall be valid and binding from the time it is made, the amounts so pledged shall immediately be subject to the lien of the pledge without filing, physical delivery, or other act, and the lien of the pledge shall be superior to all other claims and liens of any kind whatsoever;

(7) Purchase fire and extended coverage or other casualty insurance, or liability, title, rental interruption, or other insurance for property that is acquired or refinanced with proceeds of a financing agreement, assign the proceeds thereof to a lender or trustee to the extent of its interest, and covenant to maintain the insurance while the financing agreement is unpaid, so long as available funds are sufficient to purchase the insurance; and

(8) In connection with any financing agreement by which the department, on behalf of an agency, leases or purchases property from another party, notwithstanding and without regard to chapter 171 or any other law, the department or the agency may lease or sell, on any terms as the department or the agency shall determine, to that party the site or property to be improved or otherwise to be leased or sold back to the department or the agency. [L 1996, c 119, pt of §2; am L 1998, c 41, §7; am L 2001, c 200, pt of §3; am L 2007, c 126, pt of §1]