419.4 Pledge of revenues.

1. The principal of and interest on any bonds, issued under authority of this chapter, shall be secured by a pledge of the revenues out of which such bonds shall be made payable. They may be secured by a mortgage covering all or any part of the project from which the revenues so pledged may be derived or by a pledge of the lease, sale contract or loan agreement with respect to such project or by a pledge of one or more notes, debentures, bonds or other secured or unsecured debt obligations of the lessee or contracting party.

2. a. The proceedings under which the bonds are authorized to be issued under the provisions of this chapter, and any mortgage given to secure the same, may contain any agreements and provisions customarily contained in instruments securing bonds, including but not limited to:

(1) Provisions respecting custody of the proceeds from the sale of the bonds including their investment and reinvestment until used to defray the cost of the project.

(2) Provisions respecting the fixing and collection of rents or payment with respect to any project covered by such proceedings or mortgage.

(3) The terms to be incorporated in the lease, sale contract, or loan agreement with respect to such project.

(4) The maintenance and insurance of such project.

(5) The creation, maintenance, custody, investment and reinvestment and use of special funds from the revenues of such project.

(6) The rights and remedies available in case of a default to the bond holders or to any trustee under the lease, sale contract, loan agreement or mortgage.

b. (1) A municipality shall have the power to provide that proceeds from the sale of bonds and special funds from the revenues of the project shall be invested and reinvested in such securities and other investments as shall be provided in the proceedings under which the bonds are authorized to be issued including:

(a) Obligations issued or guaranteed by the United States.

(b) Obligations issued or guaranteed by any person controlled or supervised by and acting as an instrumentality of the United States pursuant to authority granted by the Congress of the United States.

(c) Obligations issued or guaranteed by any state of the United States, or the District of Columbia, or any political subdivision of any such state or district.

(d) Prime commercial paper.

(e) Prime finance company paper.

(f) Bankers’ acceptances drawn on and accepted by banks organized under the laws of any state or of the United States.

(g) Repurchase agreements fully secured by obligations issued or guaranteed by the United States or by any person controlled or supervised by and acting as an instrumentality of the United States pursuant to authority granted by the Congress of the United States.

(h) Certificates of deposit issued by banks organized under the laws of any state or of the United States; whether or not such investment or reinvestment is authorized under any other law of this state. The municipality shall also have the power to provide that such proceeds or funds or investments and the amounts payable under the lease, sale contract, or loan agreement shall be received, held and disbursed by one or more banks or trust companies located in or out of the state of Iowa.

(2) A municipality shall also have the power to provide that the project and improvements shall be constructed by the municipality, the lessee, the lessee’s designee, the contracting party, or the contracting party’s designee, or any one or more of them on real estate owned by the municipality, the lessee, the lessee’s designee, the contracting party, or the contracting party’s designee, as the case may be, and that the bond proceeds shall be disbursed by the trustee bank or banks, trust company or trust companies, during construction upon the estimate, order or certificate of the lessee, the lessee’s designee, the contracting party, or the contracting party’s designee.

c. In making such agreements or provisions as provided in this subsection, a municipality shall not have the power to obligate itself, except with respect to the project and the application of the revenues therefrom, and shall not have the power to incur a pecuniary liability or a charge upon its general credit or against its taxing powers.

3. The proceedings authorizing any bonds under the provisions of this chapter, or any mortgage securing such bonds, may provide that if there is a default in the payment of the principal of or the interest on such bonds or in the performance of any agreement contained in such proceedings or mortgage, the payment and performance may be enforced by mandamus or by the appointment of a receiver in equity with power to charge and collect rents and payments and to apply the revenues from the project in accordance with such proceedings or the provisions of such mortgage.

4. Any mortgage, made under the provisions of this chapter, to secure bonds issued thereunder, may also provide that if there is a default in the payment thereof or a violation of any agreement contained in the mortgage, it may be foreclosed and sold under proceedings in equity or in any other manner permitted by law. Such mortgage may also provide that any trustee under such mortgage or the holder of any bonds secured thereby may become the purchaser at any foreclosure sale if the trustee or holder is the highest bidder therefor.

[C66, 71, 73, 75, 77, 79, 81, §419.4]

2012 Acts, ch 1021, §71; 2013 Acts, ch 30, §83, 84; 2014 Acts, ch 1026, §84

Referred to in §419.6