39-8108. FINANCING AUTHORITY MAY ISSUE NOTES AND BONDS — RELATED POWERS AND DUTIES. (1) The financing authority may issue from time to time its notes and bonds in a principal amount as the financing authority determines to be necessary to provide sufficient funds for achieving any of its corporate purposes, including the payment of interest on notes and bonds of the financing authority, establishment of reserves to secure notes and bonds, and all other expenditures of the financing authority incident to and necessary or convenient to carry out its corporate purposes and powers.

(2) The financing authority may issue:

(a) Bonds or notes, in one (1) or more series, to finance the basin project or any portion or portions thereof;

(b) Notes in anticipation of appropriations or other revenues;

(c) Notes to renew notes; and

(d) Bonds to pay notes, including the interest thereon, and whenever it deems refunding expedient, to refund any bonds by the issuance of new bonds, whether the bonds to be refunded have or have not matured, and to issue bonds partly to refund bonds then outstanding and partly for any of its corporate purposes. The refunding bonds may be:

(i) Exchanged for bonds to be refunded; or

(ii) Sold and the proceeds applied to the purchase, redemption or payment of such bonds.

(3) Every issue of its notes and bonds shall be special obligations of the financing authority payable out of such fund or funds as shall be specified by the financing authority.

(a) The notes and bonds shall be authorized by resolution or resolutions of the financing authority, shall bear a date or dates and shall mature at a time or times as the resolution or resolutions may provide, except that no note shall mature more than one (1) year from the date of its issue and no bond shall mature more than thirty (30) years from the date of its issue. The bonds may be issued as serial bonds payable in annual installments or as term bonds or as a combination thereof. The notes and bonds shall bear interest at a rate or rates, be in denominations, be in a form, either coupon or registered, carry registration privileges, be executed in a manner, be payable in a medium of payment, at a place or places, and be subject to terms of redemption as the resolution or resolutions may provide. The notes and bonds of the financing authority may be sold by the financing authority, at public or private sale, at a price or prices, at, above, or below par, as the financing authority shall determine.

(b) Any resolution or resolutions authorizing any notes or bonds or any issue thereof may contain provisions, which shall be a part of the contract or contracts with the holders thereof, as to:

(i) Pledging all or any part of the revenues to secure the payment of the notes or bonds or of any issue thereof, subject to such agreements with noteholders or bondholders as may then exist;

(ii) Pledging all or any part of the assets of the financing authority to secure the payment of the notes or bonds or of any issue of notes or bonds, subject to agreements with noteholders or bondholders as may then exist;

(iii) The setting aside of reserves or sinking funds and the regulation and disposition thereof;

(iv) Limitations on the purpose to which the proceeds of sale of notes or bonds may be applied;

(v) Limitations on the issuance of additional notes or bonds, the terms upon which additional notes or bonds may be issued and secured, and the refunding of outstanding or other notes or bonds;

(vi) The procedure, if any, by which the terms of any contract with noteholders or bondholders may be amended or abrogated, the amount of notes or bonds the holders of which must consent thereto, and the manner in which such consent may be given;

(vii) Limitations on the amount of moneys to be expended by the financing agency for operating expenses of the financing authority;

(viii) Vesting in a trustee’s or trustees’ property, rights, powers and duties in trust as the financing authority may determine, which may include any or all of the rights, powers and duties of the trustee appointed by the bondholders pursuant to this chapter, and limiting or abrogating the right of the bondholders to appoint a trustee under this chapter or limiting the rights, powers and duties of the trustee;

(ix) Defining the acts or omissions to act which shall constitute a default in the obligations and duties of the financing authority to the holders of the notes or bonds and providing for the rights and remedies of the holders of the notes or bonds in the event of a default, including as a matter of right the appointment of a receiver; provided however, that these rights and remedies shall be consistent with this chapter and the laws of the state of Idaho;

(x) Any other matters, of like or different character, which in any way affect the security or protection of the holders of the notes or bonds.

(c) Any pledge made by the financing authority shall be valid and binding from the time when the pledge is made; the revenues, moneys or property so pledged and thereafter received by the financing agency shall immediately be subject to the lien of the pledge without any physical delivery thereof or further act, and the lien of the pledge shall be valid and binding against all parties having claims of any kind in tort, contract or otherwise against the financing authority, irrespective of whether the parties have notice thereof. Neither the resolution nor any other instrument by which a pledge is created need be recorded.

(d) Neither any administrator of the financing authority nor any other person executing the notes or bonds are subject to any personal liability or accountability by reason of the issuance thereof.

(e) The financing authority, subject to agreements with noteholders or bondholders as may then exist, shall have power out of any funds available therefor to purchase notes or bonds of the financing authority, which shall thereupon be canceled, at a price not exceeding:

(i) If the notes or bonds are then redeemable, the redemption price, including redemption premium, if any, then applicable plus accrued interest to the next interest payment thereon; or

(ii) If the notes or bonds are not then redeemable, the redemption price applicable on the first date after such purchase upon which the notes or bonds become subject to redemption plus accrued interest to such date.

(f) In the discretion of the financing authority, the bonds may be secured by a trust indenture by and between the financing authority and a corporate trustee which may be any trust company or bank having the power of a trust company in the state. The trust indenture may contain provisions for protecting and enforcing the rights and remedies of the bondholders as may be reasonable and proper and not in violation of law, including covenants setting forth the duties of the financing authority in relation to the exercise of its corporate powers and the custody, safeguarding and application of all moneys. The financing authority may provide by a trust indenture for the payment of the proceeds of the bonds and the revenues to the trustee under the trust indenture or other depository, and for the method of disbursement thereof, with safeguards and restrictions as it may determine. All expenses incurred in carrying out the trust indenture may be treated as a part of the operating expenses of the financing agency. If the bonds are secured by a trust indenture, the bondholders have no authority to appoint a separate trustee to represent them.

(g) Whether or not the notes and bonds are of a form and character as to be negotiable instruments under the terms of the uniform commercial code, the notes and bonds are hereby made negotiable instruments within the meaning, and for all the purposes, of the uniform commercial code, subject only to the provisions of the notes and bonds for registration.

(h) In case any of the administrators or officers of the financing authority whose signatures appear on any notes or bonds or coupons shall cease to be administrators or officers before the delivery of the notes or bonds, the signatures shall, nevertheless, be valid and sufficient for all purposes, the same as if the administrators or officers had remained in office until delivery.

(4) The financing authority may provide for the issuance of refunding obligations for the purpose of refunding any obligations then outstanding which have been issued under the provisions of this chapter, including the advance refunding of obligations as provided by section 57-504, Idaho Code, and including the payment of any redemption premium thereon and any interest accrued or to accrue to the date of redemption of such obligations and for any corporate purpose of the financing authority. The issuance of the obligations, the maturities and other details thereof, the rights of the holders thereof, and the rights, duties and obligations of the financing authority in respect of the same shall be governed by the provisions of this chapter which relate to the issuance of obligations, insofar as such provisions may be appropriate.

(5) Refunding obligations issued as provided in subsection (4) of this section may be sold or exchanged for outstanding obligations issued under this chapter and, if sold, the proceeds thereof may be applied, in addition to any other authorized purposes, to the purchase, redemption or payment of such outstanding obligations. Pending the application of the proceeds of any refunding obligations, with any other available funds, to the payment of the principal, accrued interest and any redemption premium on the obligations being refunded, and, if so provided or permitted in the resolution authorizing the issuance of the refunding obligations or in the trust agreement securing the same, to the payment of any interest on the refunding obligations and any expenses in connection with refunding, the proceeds may be invested in direct obligations of, or obligations the principal of and the interest on which are unconditionally guaranteed by the United States of America which shall mature or which shall be subject to redemption by the holders thereof, at the option of the holders, not later than the respective dates when the proceeds, together with the interest accruing thereon, will be required for the purposes intended.

(6) All funds of the financing authority except as otherwise authorized or provided in this chapter shall be deposited as soon as practicable in a separate account or accounts in banks or trust companies organized under the laws of the state of Idaho or the national banking association. The moneys in the accounts shall be paid out on checks signed by the chair of the board of administrators or other officers or employees of the financing authority as the administrators authorize. All deposits of the moneys shall, if required by the financing authority, be secured by obligations of the United States of America, of the state or of any municipalities or political subdivisions or agencies of the state at a market value equal at all times to the amount of the deposit, and all banks and trust companies are authorized to give security for the deposits.

(7) Notwithstanding the provisions of this section, the financing authority may contract with the holders of any of its notes or bonds as to the custody, collection, securing, investment and payment of any moneys of the financing authority and of any moneys held in trust or otherwise for the payment of notes or bonds, and to carry out the contract. Moneys held in trust or otherwise for the payment of notes or bonds or in any way to secure notes or bonds and deposits of the moneys may be secured in the same manner as moneys of the financing authority, and all banks and trust companies are authorized to give security for the deposits.

(8) The financing authority may contract with the holders of bonds or notes with respect to the rights of such holders in the event of a default in the payment of principal or interest on such bonds or notes.

History:

[39-8108, added 2001, ch. 371, sec. 2, p. 1303.]