67-6210. POWER TO ISSUE BONDS. The association shall have power and is hereby authorized to issue, from time to time, its negotiable notes and bonds in conformity with the applicable provisions of the uniform commercial code in such principal amount as the association shall determine to be necessary for sufficient funds for achieving any of its corporate purposes, including the payment of interest on notes and bonds of the association, establishment of reserves to secure such notes and bonds, and all other expenditures of the association incidental and necessary or convenient to carry out its corporate purposes and powers; provided, however, that the association shall provide in its resolution authorizing such bonds that all revenues received by the association as a result of the issuance of such bonds shall be pledged first to the payment of principal and interest on such bonds.
(a) The association shall have the power, from time to time, to issue:
(1) notes to renew notes and
(2) bonds to pay notes, including the interest thereon, and
(3) whenever it deems refunding expedient, to refund any bonds by the issuance of new bonds, whether the bonds to be refunded have or have not matured, and to issue bonds partly to refund bonds then outstanding and partly for any of its corporate purposes.
The refunding bonds may be:
(1) exchanged for the bonds to be refunded or
(2) sold and the proceeds applied to the purchase, redemption or payment of such bonds.
(b) Except as may otherwise be expressly provided by the association, every issue of its notes and bonds shall be payable exclusively from the revenues or income of the association, including grants and contributions from the United States of America, subject only to any agreements with the holders of particular notes or bonds pledging any particular revenues.
(c) The notes and bonds shall be authorized by resolution or resolutions of the association, shall bear such date or dates and shall mature at such time or times as such resolution or resolutions may provide. The bonds may be issued as serial bonds payable in annual installments or as term bonds or as a combination thereof. The notes and bonds shall bear interest at such rate or rates, be in such denominations, be in such form, either coupon or registered, carry such registration privileges, be executed in such manner, be payable in such medium of payment, at such place or places, and be subject to such terms of redemption as such resolution or resolutions may provide. The notes and bonds of the association may be sold by the association, at public or private sale, at such price or prices as the association shall determine.
(d) Any resolution or resolutions authorizing any notes or bonds or any issue thereof may contain provisions, which shall be a part of the contract or contracts with the holders thereof, as to:
(1) pledging all or any part of the revenues to secure the payment of the notes or bonds or of any issue thereof, subject to such agreements with noteholders or bondholders as may then exist;
(2) pledging all or any part of the assets of the association including mortgages and obligations securing the same, to secure the payment of the notes or bonds or of any issue of notes or bonds, subject to such agreements with noteholders or bondholders as may then exist;
(3) the use and disposition of the gross income from mortgages owned by the association and payment of principal of mortgages owned by the association;
(4) the setting aside of reserves or sinking funds and the regulation and disposition thereof;
(5) limitations on the purpose to which the proceeds of sale of notes or bonds may be applied and pledging such proceeds to secure the payment of the notes or bonds or of any issue thereof;
(6) limitations on the issuance of additional notes or bonds; the terms upon which additional notes or bonds may be issued and secured; and the refunding of outstanding or other notes or bonds;
(7) the procedure, if any, by which the terms of any contract with noteholders or bondholders may be amended or abrogated, the amount of notes or bonds the holders of which must consent thereto; and the manner in which such consent may be given;
(8) limitations on the amount of moneys to be expended by the association for operating expenses of the association;
(9) vesting in a trustee or trustees such property, rights, powers and duties in trust as the association may determine, which may include any or all of the rights, powers and duties of the trustee appointed by the bondholders pursuant to this act; and limiting or abrogating the right of the bondholders to appoint a trustee under this act, or limiting the rights, powers and duties of such trustee;
(10) defining the acts or omissions to act which shall constitute a default in the obligations and duties of the association to the holders of the notes or bonds and providing for the rights and remedies of the holders of the notes or bonds in the event of such default, including as a matter of right the appointment of a receiver; provided, however, that such rights and remedies shall not be inconsistent with the general laws of the state and the other provisions of this act;
(11) pledging all or any part of funds allocated to the association under Idaho law or other revenues or the proceeds of notes or bonds to secure the payment of notes or bonds issued to finance transportation projects, subject to such agreements with noteholders or bondholders as may then exist;
(12) setting forth the provisions for any contracts relating to its bonds or notes, including, without limitation, any investment or interest rate contracts, or any contract providing for a credit enhancement, including, but not limited to, letters of credit, bond insurance and surety bonds provided by private financial institutions;
(13) setting forth the provisions for representations or certifications to be made by an officer of the association with respect to funds to be allocated to the association for transportation projects and provisions for the disbursements of the proceeds of the bonds or notes for payment of the costs of a transportation project, costs of issuance and other related costs;
(14) pledging all or any part of funds allocated to the association pursuant to section 72-1346B, Idaho Code, or the proceeds of notes or bonds to secure the payment of notes or bonds issued to finance a department of labor project, subject to such agreements with noteholders or bondholders as may then exist;
(15) setting forth the provisions for representations or certifications to be made by an officer of the association with respect to funds to be allocated to the association for a department of labor project and provisions for the disbursements of the proceeds of the bonds or notes for payment of the costs of a department of labor project, costs of issuance and other related costs;
(16) any other matters, of like or different character, which in any way affect the security or protection of the holders of the notes or bonds.
(e) Any pledge made by the association shall be valid and binding from the time when the pledge is made; the revenues, moneys or property so pledged and thereafter received by the association shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act, and 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 association, irrespective of whether such parties have notice thereof. Neither the resolution nor any other instrument by which a pledge is created need be recorded.
(f) Neither the commissioners of the association nor any other person executing such notes or bonds shall be subject to any personal liability or accountability by reason of the issuance thereof.
(g) The association, subject to such agreements with noteholders or bondholders as may then exist, shall have power out of any funds available therefor to purchase notes or bonds of the association, which shall thereupon be canceled, at a price not exceeding:
(1) if the notes or bonds are then redeemable, the redemption price then applicable plus accrued interest to the next interest payment thereon, or
(2) if the notes or bonds are not then redeemable, the redemption price applicable on the first date after such purchase upon which the notes or bonds become subject to redemption plus accrued interest to such date.
(h) In the discretion of the association, the bonds may be secured by a trust indenture by and between the association and a corporate trustee, which may be any trust company or bank having the power of a trust company in the state. Such trust indenture may contain such provisions for protecting 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 association in relation to the exercise of its corporate powers and the custody, safeguarding and application of all moneys. The association may provide by such trust indenture for the payment of the proceeds of the bonds and the revenues to the trustee under such trust indenture or other depository, and for the method of disbursement thereof, with such safeguards and restrictions as it may determine. All expenses incurred in carrying out such trust indenture may be treated as a part of the operating expenses of the association. If the bonds shall be secured by a trust indenture, the bondholders shall have no authority to appoint a separate trustee to represent them.
(i) Whether or not the notes and bonds are of such form and character as to be negotiable instruments under the terms of the uniform commercial code, the notes and bonds are hereby made negotiable instruments within the meaning of and for all the purposes of the uniform commercial code, subject only to the provisions of the notes and bonds for registration.
(j) In case any of the commissioners or officers of the association whose signatures appear on any notes or bonds or coupons shall cease to be such commissioners or officers before the delivery of such notes or bonds, such signatures shall, nevertheless, be valid and sufficient for all purposes, the same as if such commissioners or officers had remained in office until such delivery.
(k) The association shall not issue any bonds or notes to finance transportation projects unless:
(1) the Idaho transportation board has approved and recommended the transportation projects for financing through the association;
(2) the Idaho transportation board has certified to the association that sufficient funds are available to make the payments required for the bonds or notes to be issued to finance the transportation projects and that the annual, total cumulative debt service and bond-related expenses on federally-funded highway project financing do not exceed the limits specified in section 40-315(3), Idaho Code, or has approved a resolution required under section 40-720(6), Idaho Code; and
(3) the association and the Idaho transportation board have entered into an agreement for the association to provide financing of the transportation projects.
(l) The association shall not issue any bonds or notes to finance a department of labor project unless:
(1) the director of the department of labor has approved and recommended the department of labor project for financing through the association pursuant to section 72-1346B, Idaho Code;
(2) the director of the department of labor has certified to the association that sufficient funds are available to make the payments required for the bonds or notes to be issued to finance the department of labor project; and
(3) the association and the director of the department of labor have entered into an agreement for the association to provide financing of the department of labor project.
History:
[67-6210, added 1972, ch. 324, sec. 10, p. 789; am. 1974, ch. 104, sec. 14, p. 1210; am. 1978, ch. 288, sec. 1, p. 700; am. 1996, ch. 253, sec. 13, p. 817; am. 2005, ch. 378, sec. 10, p. 1230; am. 2011, ch. 111, sec. 3, p. 298; am. 2019, ch. 307, sec. 4, p. 925.]