Revenue Bonds - Issuance for Purpose of Paying for Cost of Projects

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  7. Revenue Bonds - Issuance for Purpose of Paying for Cost of Projects

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  1. The authority shall have the power and is authorized to provide by resolution for the issuance of negotiable revenue bonds for the purpose of paying all or any part of the cost, as defined in Code Section 12-3-291, of any one project or a combination of projects. The principal and interest of such revenue bonds shall be payable solely from a special fund provided for in this Code section. The bonds of each issue shall be dated, shall bear interest at the lowest attainable rate, payable in such medium of payment as to both principal and interest as may be determined by the authority, and may be made redeemable before maturity, at the option of the authority, at such price or prices and under such terms and conditions as may be fixed by the authority in the resolution in providing for the issuance of the bonds.
  2. The authority shall determine the form of the bonds, including any interest coupons to be attached thereto, and shall fix the denomination or the denominations of the bonds and the place or places of payment of principal and interest thereof, which may be at any bank or trust company within or outside the state. The bonds may be issued in coupon or registered form, or both, as the authority may determine, and provision may be made for the registration of any coupon bond as to principal alone and also as to both principal and interest.
  3. All bonds shall be signed by the chairman of the authority, and the official seal of the authority shall be affixed thereto and attested by the secretary of the authority, and any coupons attached thereto shall bear the signature or facsimile signature of the chairman of the authority. In case any officer whose signature shall appear on any bonds or whose facsimile signature shall appear on any coupon shall cease to be an officer before delivery of such bonds, such signature shall nevertheless be valid and sufficient for all purposes the same as if he had remained in office until such delivery.
  4. Such bonds and the income thereof shall be exempt from taxation in the State of Georgia.
  5. The authority may sell such bonds in such manner and for such price as it may determine to be for the best interest of the authority.
  6. Any resolution providing for the issuance of revenue bonds under this part shall become effective immediately upon its passage and need not be published or posted, and any such resolution may be passed at any regular or special or adjourned meeting of the authority by a majority of its members.
  7. Revenue bonds issued under this part shall not be deemed to constitute a debt of the State of Georgia or a pledge of the faith and credit of the state, but such bonds shall be payable solely from the fund provided for in this Code section. The issuance of such revenue bonds shall not directly, indirectly, or contingently obligate the state to levy or to pledge any form of taxation whatever therefor or to make any appropriation for the payment thereof. All such bonds shall contain recitals on their faces covering substantially the foregoing provisions of this subsection.
  8. In the discretion of the authority, any issue of revenue bonds may be secured by a trust indenture by and between the authority and a corporate trustee, which may be any trust company or bank having the powers of a trust company within or outside the state. Such trust indenture may pledge or assign rents, revenues, and earnings to be received by the authority. Either the resolution providing for the issuance of revenue bonds or the trust indenture itself may contain such provisions for perfecting 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 authority in relation to the acquisition of property; the construction of the project; the maintenance, operation, repair, and insurance of the project or projects; and the custody, safeguarding, and application of all moneys and revenues. The resolution or trust indenture may also provide that any project shall be constructed and paid for under the supervision and approval of consulting engineers or architects employed or designated by the authority and satisfactory to the original purchasers of the bonds issued therefor. Such indenture may set forth the rights and remedies of the bondholders and of the trustee and may restrict the individual right of action of bondholders as is customary in trust indentures securing bonds and debentures of corporations. In addition to the foregoing, such trust indenture may contain such other provisions as the authority may deem reasonable and proper for the security of the bondholders.
  9. All revenues, rents, and earnings derived from any project or projects and all funds from any source whatsoever received by the authority may be pledged and allocated by the authority to the payment of principal and interest on revenue bonds of the authority as the resolution authorizing the issuance of the bonds or the trust instrument may provide; and such funds so pledged from whatever source received shall be set aside at regular intervals as may be provided in the resolution or trust indenture into a sinking fund which shall be pledged to and charged with the payment of:
    1. Interest upon such revenue bonds as such interest shall fall due;
    2. The principal of the bonds as the same shall fall due;
    3. The necessary charges of paying agents for paying principal and interest; and
    4. Any premium upon bonds retired by call or purchase.
  10. The use and disposition of such sinking fund shall be subject to such regulations as may be provided in the resolution authorizing the issuance of the revenue bonds or in the trust indenture, but, except as may otherwise be provided in such resolution or trust indenture, such sinking fund shall be affirmed for the benefit of all revenue bonds without distinction or priority of one over the other.
  11. Any holder of revenue bonds issued under this part or any of the coupons appertaining thereto, and the trustee under the trust indenture, if any, except to the extent the rights given by this Code section may be restricted by resolution passed before the issuance of the bonds or by the trust indenture, may, either at law or in equity, by action, mandamus, or other proceedings, protect and enforce any and all rights under the laws of the State of Georgia which are granted by this part or by such resolution or trust indenture and may enforce and compel performance of all duties required by this part or by such resolution or trust indenture, to be performed by the authority, or any officer thereof, including the fixing, charging, and collection of revenues, rents, and other charges for the use of the project or projects. No holder of such bonds shall have the right to compel any exercise of the taxing power of the state to pay any such bond or the interest thereon, or to enforce the payment thereof against the property of the state, nor shall any such bond constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the state.
  12. It is found, determined, and declared that the creation of the authority and the carrying out of its purposes as defined in this part are in all respects for the benefit of the people of this state and are public purposes, and that the authority will be performing an essential governmental function in the exercise of the powers conferred upon it by this part. The state covenants with the holders of the bonds that the authority shall be required to pay no taxes or assessments upon any of the property acquired or leased by it, or under its jurisdiction, control, possession, or supervision, or upon its activities in the operation or maintenance of the buildings and facilities erected or acquired by it, or any fees, rentals, or other charges, for the use of such buildings, or any other income received by the authority. Further, the state covenants that the bonds of the authority, their transfer, and the income therefrom shall at all times be exempt from taxation within this state. Any exemption from taxation provided by this subsection shall not include exemption from sales and use taxes.
  13. Any action to protect or enforce any rights under this part shall be brought in the Superior Court of Fulton County, Georgia, and any action pertaining to validation of any bonds issued under this part shall likewise be brought in such court, which shall have exclusive, original jurisdiction of such actions.
  14. Bonds of the authority shall be confirmed and validated in accordance with the procedure of Article 3 of Chapter 82 of Title 36. The petition for validation shall also make party defendant to such action any authority, subdivision, instrumentality, or agency of the State of Georgia which has contracted with the authority for the use of any building or facility for which bonds have been issued and sought to be validated; and such authority, subdivision, instrumentality, or agency shall be required to show cause, if any, why such contract or contracts and the terms and conditions thereof should not be inquired into by the court, the validity of the terms thereof determined, and the contract adjudicated as security for the payment of any such bonds of the authority. The bonds, when validated, and the judgment of validation shall be final and conclusive with respect to such bonds and against the authority issuing the same and against any authority, subdivision, instrumentality, department, or agency contracting with the authority.
  15. The authority shall prescribe the rules and regulations for the operation of all projects, and it shall be the duty of the authority to fix rentals and other charges for the use of such projects so as to provide a fund sufficient with other revenues, if any, to pay the cost of maintaining, repairing, and operating the projects and to pay the principal of the revenue bonds and the interest thereon as the same shall become due.
  16. The offer, sale, or issuance of bonds, notes, or obligations by the authority shall not be subject to the provisions of Chapter 5 of Title 10, the "Georgia Uniform Securities Act of 2008."

(Ga. L. 1964, p. 369, § 1; Ga. L. 1968, p. 297, § 6B; Ga. L. 1984, p. 22, § 12; Ga. L. 1992, p. 6, § 12; Ga. L. 1993, p. 1683, § 5; Ga. L. 2008, p. 381, § 10/SB 358.)

RESEARCH REFERENCES

Am. Jur. 2d.

- 64 Am. Jur. 2d, Public Securities and Obligations, §§ 39, 108, 149, 152 et seq., 157, 159, 161, 174, 323, 347, 352 et seq., 356, 377 et seq. 71 Am. Jur. 2d, State and Local Taxation, §§ 272, 278 et seq.

C.J.S.

- 73 C.J.S., Public Administrative Law and Procedure, §§ 161, 166 et seq. 81A C.J.S., States, §§ 437 et seq., 443 et seq., 448 et seq. 84 C.J.S., Taxation, §§ 234, 250, 251.


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