(a) A municipal cooperative shall have the power and is hereby authorized from time to time to issue revenue bonds in such principal amounts as the cooperative utility board shall deem necessary for any of its corporate purposes as set forth under this chapter. A member of a municipal cooperative may not revoke or in any way terminate, amend or modify its membership resolution to the detriment of the bondholders if revenue bonds or obligations issued in anticipation of the issuance of said revenue bonds have been issued and are then outstanding and unpaid as provided for herein.
(b) Revenue bonds of a municipal cooperative shall be payable as to both principal and interest (1) exclusively from the income and revenues of the municipal cooperative derived from one or more of its projects financed from the proceeds of such bonds; or (2) from the income received from one or more revenue producing contracts made by the municipal cooperative with any participant or other contracts entered into for the sale of electric energy authorized under this chapter; or (3) from its revenues generally, subject, however, to any agreements previously made by the municipal cooperative with the holders of any of its outstanding bonds. Any such bonds may be additionally secured by a pledge of any grant, subsidy or contribution from the United States of America or any agency or instrumentality or political subdivision thereof, or a pledge of any income or revenues, funds or moneys of the municipal cooperative derived from any source whatsoever.
(c) Any provision of any law to the contrary notwithstanding, any bonds issued pursuant to this chapter shall be deemed to be negotiable instruments within the meaning and for all purposes of title 42a, and each holder or owner of such bonds, or of any coupons appurtenant thereto, by accepting such bonds or coupons shall be conclusively deemed to have agreed that such bonds or coupons are and shall be fully negotiable within the meaning and for all purposes of said Uniform Commercial Code.
(d) Bonds of a municipal cooperative issued pursuant to this chapter may be issued as serial bonds or as term bonds, or the municipal cooperative, in its discretion, may issue bonds of both types. Bonds shall be authorized by resolution of the cooperative utility board and may be issued in one or more series and shall bear such date or dates, mature at such time or times not exceeding forty years from the date of said bonds, bear interest at such rate or rates, be in such denominations, be in such form, either coupon or registered, carry such conversion, registration and exchange privileges, have such rank or priority, be executed in such manner, be payable in such medium of payment at such place or places within or without the state, be subject to such terms of redemption (with or without premium), and contain or be subject to such other terms, all as such resolution may provide.
(e) If any officer whose signature or a facsimile of whose signature appears on any bonds or coupons ceases to be such officer before delivery of such bonds, such signature or such facsimile shall nevertheless be valid and sufficient for all purposes the same as if he had remained in office until such delivery. Pending preparation of the definitive bonds, a municipal cooperative may issue temporary bonds which shall be exchanged for such definitive bonds.
(f) Bonds of a municipal cooperative may be sold at public or private sale for such price or prices and in such manner as the cooperative utility board shall determine. Bonds of a municipal cooperative may be issued under the provisions of this chapter without obtaining the consent of any department, division, commission, board, bureau or agency of the state, and without any other proceeding or the happening of any other conditions or other things than those proceedings, conditions or things which are specifically required by this chapter.
(g) The resolution under which any bonds shall be issued shall constitute a contract with the holders of said bonds and may contain provisions, among others, as to:
(1) The terms and provisions of the bonds;
(2) Pledging all or any part of the revenues from any project or projects or any revenue-producing contract or contracts made by the municipal cooperative with any participant to secure the payment of said bonds as provided in the authorizing resolution, subject to such agreements with the holders of outstanding bonds as may then exist;
(3) The custody, collection, securing, investment and payment of any revenues, assets, moneys, funds or property of a municipal cooperative with respect to which the municipal cooperative may have any rights or interest;
(4) The rates or charges for electric power and energy sold by, or services rendered by, the municipal cooperative, the amount to be raised by such rates or charges and the use and disposition of any or all revenue;
(5) The creation of reserves or sinking funds and the regulation and disposition thereof;
(6) Limitations on the purposes to which the proceeds from the sale of any bonds then or thereafter to be issued may be applied and pledging such proceeds to secure the payment of any such bonds;
(7) Limitations on the issuance of any additional bonds, the terms upon which additional bonds may be issued and secured, and the refunding of outstanding bonds;
(8) The rank or priority of any bonds with respect to any lien or security or as to the acceleration of the maturity of any such bonds;
(9) The creation of special funds or moneys to be held in trust or otherwise for operating expenses, payment or redemption of bonds, reserves or other purposes and as to the use and disposition of moneys held in such funds;
(10) The procedure by which the terms of any contract with or for the benefit of the holders of bonds may be amended or abrogated, the amount of bonds the holders of which must consent thereto, and the manner in which such consent may be given;
(11) Defining the acts or omissions to act which shall constitute a default in the duties of the municipal cooperative to holders of its bonds and providing the rights and remedies of such holders in the event of such default including, if the cooperative utility board shall so determine, the right to accelerate the due date of the bonds or the right to appoint a receiver or receivers of the property or revenues subject to the lien of the resolution;
(12) Any other or additional agreements with or for the benefit of the holders of bonds or any covenants or restrictions necessary or desirable to safeguard the interests of such holders;
(13) The custody of any of its properties or investments, the safekeeping thereof, the insurance to be carried thereon, and the use and disposition of insurance moneys;
(14) Vesting in a trustee or trustees within or without the state such properties, rights, powers and duties in trust as the cooperative utility board may determine, which may include any or all of the rights, powers and duties of any trustee appointed pursuant to this section; or limiting or abrogating the rights of the holders of any bonds of a municipal cooperative to appoint a trustee under this chapter or limiting the rights, powers and duties of such trustee; and
(15) Appointing and providing for the duties and obligations of a paying agent or paying agents or such other fiduciaries within or without the state.
(h) (1) It is the intention hereof that any pledge of revenues or other moneys or of a revenue producing contract or contracts made by a municipal cooperative pursuant to this chapter shall be valid and binding from the time when the pledge is made; that the revenues or other moneys or proceeds of any contract or contracts so pledged and thereafter received by the municipal cooperative shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act; and that the lien of any such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the municipal cooperative irrespective of whether such parties have notice thereof. Neither the cooperative utility board nor any official executing bonds or notes shall be liable personally on the bonds or notes or be subject to any personal liability or accountability by reason of the issuance thereof.
(2) The principal of and interest on bonds issued by a municipal cooperative shall be payable solely from the revenues or funds pledged or available for their payment as authorized in this chapter. Each bond shall contain a statement that the principal thereof or interest thereon is payable solely from such revenues or funds of the municipal cooperative and that neither the state nor any political subdivision thereof nor any member participating in establishing the municipal cooperative nor other participant is obligated to pay such principal or interest and that neither the faith or credit nor taxing power of the state or any political subdivision thereof nor any such member or other participant is pledged to the payment of the principal of or the interest on such bonds. A municipal cooperative shall have no power to pledge the credit or create a debt or liability of the state or any political subdivision thereof or of any member participating in establishing the municipal cooperative or of any participant, and any bonds issued under the provisions of this chapter shall not create or constitute an indebtedness, liability or obligation of the state or of any such political subdivision or any such member or other participant or be or constitute a pledge of the faith and credit of the state or any such political subdivision or any such member or other participant but all such bonds, unless funded or refunded by bonds of the municipal cooperative, shall be payable solely from revenues or funds pledged or available for their payment as authorized in this chapter.
(P.A. 75-634, S. 6, 24; P.A. 76-237, S. 7, 9; P.A. 77-604, S. 5, 84; P.A. 86-354, S. 5, 6.)
History: P.A. 76-237 amended Subsec. (a) to allow issuance of bonds to be exchanged for outstanding bonds or to refund outstanding bonds before maturity; P.A. 77-604 substituted “chapter” for “act” in Subsec. (g)(14); P.A. 86-354 replaced existing bond purposes provisions in Subsec. (a) with provision re corporate purposes as set forth under this chapter.