12.91 Utilities board and consumer advocate building project — bond issue.

1. For purposes of this section:

a. “Bonds” means bonds, notes, or other evidences of indebtedness issued under this section.

b. “Chargeable expenses” means expenses charged by the utilities board and the consumer advocate division of the department of justice under section 476.10.

c. “Chargeable expenses fund” means the fund created in the state treasury under this section.

d. “Project” means a building and related improvements and furnishings authorized under section 476.10B.

2. The treasurer of state may issue bonds and do all things necessary in order to finance the costs of the project. The treasurer of state shall have all of the powers which are necessary to issue and secure bonds to provide the financing for the project. The treasurer of state may issue bonds in principal amounts which, in the opinion of the treasurer, are necessary to provide sufficient funds for the costs of the project, the payment of interest on the bonds, the establishment of reserves to secure the bonds, the costs of issuance of the bonds, other expenditures of the treasurer of state incident to and necessary or convenient to carry out the bond issue, and all other expenditures of the utilities board and the department of administrative services in connection with the construction of the project. The bonds are investment securities and negotiable instruments within the meaning of and for purposes of the Iowa uniform commercial code, chapter 554.

3. Bonds issued under this section are payable solely and only out of the moneys, assets, or revenues of the chargeable expenses fund and any bond reserve funds established pursuant to this section, all of which may be held by the treasurer of state or deposited with trustees or depositories in accordance with bond or security documents and pledged by the treasurer of state to the payment thereof. Bonds issued under this section shall contain a statement that the bonds do not constitute an indebtedness of the state. The treasurer of state shall not pledge the credit or taxing power of this state or any political subdivision of this state or make bonds issued pursuant to this section payable out of any moneys except those in the chargeable expenses fund and any bond reserve funds established pursuant to this section.

4. The proceeds of bonds issued by the treasurer of state and not required for immediate disbursement may be deposited with a trustee or depository as provided in the bond documents and invested or reinvested in any investment as directed by the treasurer of state and specified in the trust indenture, resolution, or other instrument pursuant to which the bonds are issued without regard to any limitation otherwise provided by law.

5. The bonds shall be:

a. In a form, issued in denominations, executed in a manner, and payable over terms and with rights of redemption, and be subject to such other terms and conditions as prescribed in the trust indenture, resolution, or other instrument authorizing their issuance.

b. Negotiable instruments under the laws of the state and may be sold at prices, at public or private sale, and in a manner, as prescribed by the treasurer of state. Chapters 73A, 74, 74A, and 75 do not apply to the sale or issuance of the bonds.

c. Subject to the terms, conditions, and covenants providing for the payment of the principal, redemption premiums, if any, interest, and other terms, conditions, covenants, and protective provisions safeguarding payment, not inconsistent with this section and as determined by the trust indenture, resolution, or other instrument authorizing their issuance.

6. The bonds are securities in which public officers and bodies of this state; political subdivisions of this state; insurance companies and associations and other persons carrying on an insurance business; banks, trust companies, savings associations, and investment companies; administrators, guardians, executors, trustees, and other fiduciaries; and other persons authorized to invest in bonds or other obligations of the state may properly and legally invest funds, including capital, in their control or belonging to them.

7. Bonds must be authorized by a trust indenture, resolution, or other instrument of the treasurer of state.

8. Neither the resolution, trust agreement, nor any other instrument by which a pledge is created needs to be recorded or filed under the Iowa uniform commercial code, chapter 554, to be valid, binding, or effective.

9. Bonds issued under the provisions of this section are declared to be issued for a general public and governmental purpose and all bonds issued under this section shall be exempt from taxation by the state of Iowa and the interest on the bonds shall be exempt from the state income tax and the state inheritance tax.

10. Subject to the terms of any bond documents, moneys in the chargeable expenses fund may be expended for administration expenses of the treasurer of state in connection with the bonds.

11. The treasurer of state may issue bonds for the purpose of refunding any bonds issued pursuant to this section then outstanding, including the payment of any redemption premiums thereon and any interest accrued or to accrue to the date of redemption of the outstanding bonds. Until the proceeds of bonds issued for the purpose of refunding outstanding bonds are applied to the purchase or retirement of outstanding bonds or the redemption of outstanding bonds, the proceeds may be placed in escrow and be invested and reinvested in accordance with the provisions of this section. The interest, income, and profits earned or realized on an investment may also be applied to the payment of the outstanding bonds to be refunded by purchase, retirement, or redemption. After the terms of the escrow have been fully satisfied and carried out, any balance of proceeds and interest earned or realized on the investments may be returned to the treasurer of state for deposit in the chargeable expenses fund unless all bonds issued under the provisions of this section have been retired, in which case the proceeds shall be deposited in the general fund of the state. All refunding bonds shall be issued and secured and subject to the provisions of this chapter in the same manner and to the same extent as other bonds issued pursuant to this section.

12. A chargeable expenses fund is created and established as a separate and distinct fund in the state treasury. The moneys in the fund are appropriated for payment of the principal of, premium, and interest on any bonds issued under this section. Moneys in the fund shall not be subject to appropriation for any other purpose by the general assembly, but shall be used only for the purposes of the chargeable expenses fund. The treasurer of state shall act as custodian of the fund and disburse moneys contained in the fund for payment of the principal of, premium, and interest on any bonds issued under this section. Notwithstanding section 476.10, there shall in each fiscal year be deposited in the chargeable expenses fund from amounts collected by the utilities board as chargeable expenses an amount equal to the principal of, premium, if any, and interest on any bonds issued under this section to become due, whether at maturity, by call for optional redemption or by sinking fund redemption, in such fiscal year. The treasurer of state is authorized to pledge any amounts in the chargeable expenses fund as security for the payment of the principal of, premium, and interest on any bonds issued under this section. The treasurer of state may provide in the trust indenture, resolution, or other instrument authorizing the issuance of bonds for the transfer to the general fund of the state of any amounts on deposit in the chargeable expenses fund that are not necessary for the payment of the principal of, premium, and interest on any bonds issued under this section.

13. Moneys in the chargeable expenses fund are not subject to section 8.33. Notwithstanding section 12C.7, subsection 2, interest or earnings on moneys in the fund shall be credited to the fund.

14. a. The treasurer of state may create and establish one or more special funds, to be known as “bond reserve funds”, to secure one or more issues of bonds issued pursuant to this section. The treasurer of state shall pay into each bond reserve fund any moneys appropriated and made available by the state or the treasurer of state for the purpose of the fund, any proceeds of sale of bonds to the extent provided in the resolutions authorizing their issuance, and any other moneys which may be available to the treasurer of state for the purpose of the fund from any other sources. All moneys held in a bond reserve fund, except as otherwise provided in this chapter, shall be used as required solely for the payment of the principal of bonds secured in whole or in part by the fund or of the sinking fund payments with respect to the bonds, the purchase or redemption of the bonds, the payment of interest on the bonds, or the payments of any redemption premium required to be paid when the bonds are redeemed prior to maturity.

b. Moneys in a bond reserve fund shall not be withdrawn from it at any time in an amount that will reduce the amount of the fund to less than the bond reserve fund requirement established for the fund, as provided in this subsection, except for the purpose of making, with respect to bonds secured in whole or in part by the fund, payment when due of principal, interest, redemption premiums, and the sinking fund payments with respect to the bonds for the payment of which other moneys of the treasurer of state are not available. Any income or interest earned by, or incremental to, a bond reserve fund due to the investment of it may be transferred by the treasurer of state to other funds or accounts to the extent the transfer does not reduce the amount of that bond reserve fund below the bond reserve fund requirement for that bond reserve fund. For the purposes of this subsection, the term “bond reserve fund requirement” means, as of any particular date of computation, an amount of money, as provided in the resolutions authorizing the bonds with respect to which the fund is established.

c. The treasurer of state shall comply with the provisions of section 476.10B in order to assure the maintenance of any bond reserve funds established under this section.

15. It is the intent of the general assembly that a pledge made in respect of bonds issued under this section shall be valid and binding from the time the pledge is made, that the money or property so pledged and received after the pledge by the treasurer of state shall immediately be subject to the lien of the pledge without physical delivery or further act, and that the lien of the pledge shall be valid and binding as against all parties having claims of any kind in tort, contract, or otherwise against the treasurer of state whether or not the parties have notice of the lien.

16. Bonds issued pursuant to this section are not debts of the state, nor of any political subdivision of the state, and do not constitute a pledge of the faith and credit of the state or a charge against the general credit or general fund of the state. The issuance of any bonds pursuant to this section by the treasurer of state does not directly, indirectly, or contingently obligate the state or a political subdivision of the state to apply moneys from, or to levy or pledge any form of taxation whatever to, the payment of the bonds. Bonds issued under this section are payable solely and only from the sources and special fund provided in this section.

17. This section, being necessary for the welfare of this state and its inhabitants, shall be liberally construed to effect its purposes.

2006 Acts, ch 1179, §70; 2007 Acts, ch 22, §6; 2008 Acts, ch 1119, §3; 2010 Acts, ch 1138, §49; 2012 Acts, ch 1017, §34; 2014 Acts, ch 1076, §12

Referred to in §422.7(2)(d), 476.10B