§53-16 Bonds of agency. (a) A redevelopment agency may issue bonds from time to time in its discretion for any of its corporate purposes including the payment of principal and interest upon any advances for surveys and plans for redevelopment projects. An agency may also issue refunding bonds for the purpose of paying or retiring or in exchange for bonds previously issued by it. An agency may issue such types of bonds as it may determine, including (without limiting the generality of the foregoing) bonds on which the principal and interest are payable:
(1) Exclusively from the income, proceeds, and revenues of the redevelopment project financed with the proceeds of the bonds; or
(2) Exclusively from the income, proceeds, and revenues of any of its redevelopment projects whether or not they are financed in whole or in part with the proceeds of the bonds; provided that the bonds may be additionally secured by a pledge of any loan, grant, or contributions, or parts thereof, from the federal government or other source, or a mortgage of any redevelopment project or projects of the agency.
(b) Neither the members of an agency nor any person executing the bonds shall be liable personally on the bonds by reason of the issuance thereof. The bonds and other obligations of the agency (and such bonds and obligations shall so state on their face) shall not be a debt of the county or the State and neither the county nor the State shall be liable thereon, nor in any event shall such bonds or obligations be payable out of any county or state funds or properties other than those of the agency acquired for the purposes of this part. The bonds shall not constitute an indebtedness within the meaning of any debt limitation or restriction. Bonds of an agency are declared to be issued for an essential public and governmental purpose and to be public instrumentalities and, together with interest thereon and income therefrom, shall be exempt from all taxes.
(c) Bonds of an agency shall be authorized by its resolution and may be issued in one or more series and shall bear such date or dates, be payable upon demand or mature at such time or times, bear interest at such rate or rates, as established by the legislative bodies of the counties, be in such denomination or denominations, be in such form either coupon or registered, carry such conversion or registration privileges, have such rank or priority, be executed in such manner, be payable in such medium of payment, at such place or places, and be subject to such terms or redemption (with or without premium) as the resolution, its trust indenture, or mortgage may provide.
(d) The bonds shall be sold at not less than par at public sale held after public notice given once at least ten days prior to the sale in the county; provided that the bonds may be sold to the federal government at private sale at not less than par, and, in the event less than all of the bonds authorized in connection with any project or projects are sold to the federal government, the balance of the bonds may be sold at private sale at not less than par at an interest cost to the agency of not to exceed the interest cost to the agency of the portion of the bonds sold to the federal government.
(e) In case any of the members or officers of the agency whose signatures appear on any bonds or coupons cease to be members or officers before the delivery of the bonds, the signatures shall, nevertheless, be valid and sufficient for all purposes, the same as if the members or officers had remained in office until the delivery. Any provision of any law to the contrary notwithstanding, any bonds issued pursuant to this part shall be fully negotiable.
(f) In any suit, action, or proceedings involving the validity or enforceability of any bond of an agency or the security therefor, any bond reciting in substance that it has been issued by the agency to aid in financing a redevelopment project, as herein defined, shall be conclusively deemed to have been issued for the purpose and the project shall be conclusively deemed to have been planned, located, and carried out in accordance with the purposes of this part.
(g) In connection with the issuance of bonds and in order to secure the payment of the bonds or obligations, an agency, in addition to its other powers, may:
(1) Pledge all or any part of its gross or net rents, fees, or revenues to which its right then exists or may thereafter come into existence;
(2) Mortgage all or any part of its real or personal property, then owned or thereafter acquired;
(3) Covenant against pledging all or any part of its rents, fees, and revenues, or against mortgaging all or any part of its real or personal property, to which its right or title then exists or may thereafter come into existence or against permitting or suffering any lien on the revenues or property; covenant with respect to limitations on its right to sell, or otherwise dispose of any redevelopment project or any part thereof; and covenant as to what other, or additional debts or obligations may be incurred by it;
(4) Covenant as to the bonds to be issued and as to the issuance of the bonds in escrow or otherwise, and as to the use and disposition of the proceeds thereof; provide for the replacement of lost, destroyed, or mutilated bonds; covenant against extending the time for the payment of its bonds or interest thereon; and covenant for the redemption of the bonds and provide the terms and conditions thereof;
(5) Covenant (subject to the limitations contained in this part) as to the amount of revenues to be raised each year or other period of time by fees and other revenues, and as to the use and disposition to be made thereof; create or authorize the creation of special funds for moneys held for operating costs, debt service, reserves, or other purposes, and covenant as to the use and disposition of the moneys held in the funds;
(6) Prescribe the procedure, if any, by which the terms of any contract with bondholders may be amended or abrogated, the amount of bonds the holders of which must consent thereto, and the manner in which the consent may be given;
(7) Covenant as to the use, maintenance, and replacement of any or all of its real or personal property, the insurance to be carried thereon, and the use and disposition of insurance moneys, and warrant its title to the property;
(8) Covenant as to the rights, liabilities, powers, and duties arising upon the breach by it of any covenant, condition, or obligation; and covenant and prescribe as to events of default and terms and conditions upon which any or all of its bonds or obligations shall become or may be declared due before maturity, and as to the terms and conditions upon which the declaration and its consequences may be waived;
(9) Vest in any obligees of the agency the right to enforce the payment of the bonds or any covenants securing or relating to the bonds; vest in any obligee or obligees holding a specified amount in bonds the right, in the event of a default by the agency, to take possession of and use, operate and manage any redevelopment project or any part thereof, title to which is in the agency, or any funds connected therewith, and collect the rents and revenues arising therefrom and dispose of the moneys in accordance with the agreement of the agency with the obligees; provide for the powers and duties of the obligees and limit the liabilities thereof; and provide the terms and conditions upon which the obligees may enforce any covenant or rights securing or relating to the bonds;
(10) Exercise all or any part or combination of the powers herein granted; make the covenants (other than and in addition to the covenants herein expressly authorized) and do any and all such acts and things as may be necessary or convenient or desirable in order to secure its bonds, or, in the absolute discretion of the agency, as will tend to make the bonds more marketable notwithstanding that the covenants, acts, or things may not be enumerated herein.
(h) An agency may by its resolution, trust indenture, mortgage, or other contract confer upon any obligee holding or representing a specified amount in bonds, the right (in addition to all rights that may otherwise be conferred), upon the happening of an event of default as defined in the resolution or instrument, by suit, action, or proceeding in any court of competent jurisdiction:
(1) To cause possession of any redevelopment project or any part thereof, title to which is in the agency, to be surrendered to the obligee;
(2) To obtain the appointment of a receiver of any redevelopment project of the agency or any part thereof, title to which is in the agency, and of the rents and profits therefrom. If the receiver is appointed, the receiver may enter and take possession of, carry out, operate, and maintain the project or any part thereof and collect and receive all fees, rents, revenues, or other charges thereafter arising therefrom, and shall keep the moneys in a separate account or accounts and apply the same in accordance with the obligations of the agency as the court shall direct; and
(3) To require the agency and the commissioners, officers, agents, and employees thereof to account as if it and they were the trustees of an express trust.
(i) An obligee of an agency shall have the right in addition to all other rights which may be conferred on the obligee, subject only to any contractual restrictions binding upon the obligee:
(1) By appropriate action to compel the agency and the members, officers, agents, or employees thereof to perform each and every term, provision, and covenant contained in any contract of the agency with or for the benefit of the obligee, and to require the carrying out of any or all the covenants and agreements of the agency and the fulfillment of all duties imposed upon the agency by this part; and
(2) By appropriate action to enjoin any acts or things which may be unlawful, or the violation of any of the rights of the obligee of the agency. [L 1949, c 379, pt of §4; am L 1951, c 244, pt of §3; RL 1955, §143-16; HRS §53-16; am L 1968, c 43, §2; am L 1981, c 79, §1; gen ch 1985; am L 1998, c 2, §20]
Case Notes
Mentioned: 903 F. Supp. 2d 1037 (2012).