45-1996. Provisions of bonds; sale

A. To secure any bonds pursuant to this article, the board, by resolution, may:

1. Provide that bonds issued pursuant to this chapter may be secured by a first lien on all or part of the monies paid into the appropriate account or subaccount administered by the authority.

2. Pledge or assign to or in trust for the benefit of the holder any part or appropriate account or subaccount of the monies in the funds as is necessary to pay the principal and interest of the bonds as they come due.

3. Set aside, regulate and dispose of any reserves and sinking funds.

4. Provide that sufficient amounts of the proceeds from the sale of the bonds may be used to fully or partly fund any reserves or sinking funds established by the resolution.

5. Prescribe the procedure, if any, by which the terms of any contract with bondholders may be amended or abrogated, the amount of bonds that the holders must consent to and the manner in which that consent may be given.

6. Provide for payment from the proceeds of the sale of the bonds of all legal and financial expenses incurred by the board in issuing, selling, delivering and paying the bonds.

7. Do any other matters that may affect the security and protection of the bonds.

B. The bonds shall be signed by the chairperson or vice chairperson and the secretary-treasurer of the authority.  Board members or any person executing the bonds are not personally liable for the payment of the bonds.  The bonds are valid and binding obligations unless before the delivery of the bonds any of the persons whose signatures appear on the bonds ceases to be a member of the board.  From and after the sale and delivery of the bonds, the board may not contest the validity of a bond.

C. The authority may provide for reimbursement to the holder of any bonds of all expenses of litigation and attorney fees incurred in collecting the bonds in the event of default and may provide for and fix the powers and duties of a trustee if necessary to enforce collection. Bond resolutions, agreements and bonds may be in such form and may contain such other conditions and terms as the authority deems appropriate or necessary to make the bonds fully salable and marketable.

D. The board may use available monies to purchase bonds that may be canceled at a price not exceeding either of the following:

1. If the bonds are then redeemable, the redemption price then applicable plus accrued interest to the next interest payment date.

2. If the bonds are not then redeemable, the redemption price applicable on the first date after purchase on which the bonds become subject to redemption plus accrued interest to that date.

E. The authority may provide that any holder of bonds, or a trustee designated by the authority at the time of issuing the bonds, on proper showing may secure an order of the superior court requiring the authority, subject to the contracts with operating units then in effect, to fix and collect rates and charges that will produce adequate revenues to permit setting up adequate yearly reserves with which to meet future payments according to the terms of the bond.

F. Any pledge made pursuant to this article is valid and binding from the time the pledge is made.  The monies pledged and received to be placed in the appropriate fund are immediately subject to the lien of the pledge without any future physical delivery or further act, and any such lien of any pledge is valid or binding against all parties having claims of any kind against the board regardless of whether the parties have notice of the lien.  The resolution or trust indenture or any instrument by which a pledge is created and placed in the board's records shall serve as notice to all concerned of the creation of the pledge.  The board is not required to record these instruments of creation in any other place.

G. Bonds issued pursuant to this article, the transfer of such bonds and the income such bonds produce are exempt from taxation by this state or any political subdivision of this state.

H. Bonds issued pursuant to this article are obligations of the authority and are payable only according to their terms and are not obligations general, special or otherwise of this state, the county in which the authority is established or, other than the authority, a political subdivision of this state.  Payment of the bonds is not enforceable out of any monies of this state other than the income and revenue pledged and assigned to or in trust for the benefit of the holder or holders of the bonds.

I. All bonds issued by the authority and agreements of the authority with respect to bonds are subject to this chapter, and no bond or agreement may contain any provision in conflict with this chapter. An amendment of this chapter does not diminish or impair the remedy and rights of the bondholder.

J. The validity of the bonds is not dependent on or affected by the legality of any proceeding relating to the acquisition, construction, improvement or extension of a project for which the bonds are issued. The bonds shall recite that they are regularly issued pursuant to this chapter and that recital is prima facie evidence of their legality and validity.

K. Bonds so issued may be sold when the money is needed for the purposes for which they are issued. Pending the preparation or execution of definite bonds, interim receipts or certificates or temporary bonds may be delivered to the purchaser or purchasers of bonds.

L. Each operating unit that owns, operates or otherwise benefits from projects that are financed by bonds issued pursuant to this chapter shall collect from each end user that benefits from the projects that proportion of the revenue required under section 45-1992 that is equal to the proportion of the benefits of the projects allocated to each end user to ensure all necessary fiscal reserves, operation costs, maintenance and depreciation charges and payment amounts due to the authority in connection with the authority's payment of principle and interest of the bonds. This section does not affect the corporation commission's authority to prescribe just and reasonable classifications to be used and just and reasonable rates and charges to be made and collected by public service corporations. Notwithstanding this subsection, any project allocation by an operating unit is subject to restrictions on place of use under this title.