A. Prior to approving a resolution for the issuance of bonds or the closing of a loan for any project, the authority shall determine and find the following in the resolution approving the issuance of the bonds or the closing of the loan:
(1) if the resolution is for the issuance of bonds, the principal and interest of the bonds to be issued shall be fully secured by a lease agreement or installment sale agreement executed by an agency of the United States government, by a state or local public agency or institution, by a corporation organized and operating within the United States, that corporation or the long-term debt of that corporation being rated not less than "A" by a national rating service, or by an irrevocable letter of credit issued by a chartered financial institution approved for this purpose by the state board of finance or by a bond insurance policy issued by an insurance company rated not less than "AA" by a national rating service;
(2) the amount necessary in each year to pay the principal of and the interest on the bonds proposed to be issued or the loan proposed to be obtained to finance the project; and
(3) the amount necessary to be paid each year into any reserve funds that the governing body may deem advisable to establish in connection with the retirement of the proposed bonds or the repayment of the loan and, in either case, the maintenance of the project. Unless the terms under which the project is to be leased or sold provide that the lessee or purchaser shall maintain the project and carry all proper insurance with respect to the project, the resolution shall set forth the estimated cost of maintaining the project in good repair and keeping it properly insured.
B. If the resolution is for the issuance of bonds, the determinations and findings of the authority required to be made by this section shall be set forth in the proceedings under which the proposed bonds are to be issued.
C. Prior to the issuance of the bonds or the closing of the loan, the authority may lease or sell the project to a lessee or purchaser under an agreement conditioned upon completion of the project and providing for payment to the authority of such rentals or payments as, upon the basis of determinations and findings pursuant to provisions of Subsection A of this section, will be sufficient to:
(1) pay the principal of and interest on the bonds issued or on the loan to be obtained to finance the project;
(2) build up and maintain any reserve deemed by the authority to be advisable in connection with the financing of the project; and
(3) pay the costs of maintaining the project in good repair and keeping it properly insured, unless the agreement of lease obligates the lessee to pay for the maintenance and insurance of the project.
D. With prior approval of the state board of finance, the authority may borrow funds to purchase, lease, acquire or develop water rights, a water system or a wastewater collection and treatment system, provided the authority does not obligate itself or the state to any debt or obligation that cannot be paid from revenues derived from the project.
E. Upon prior approval of the state board of finance, the authority may obtain a commitment from a financial institution to borrow money; provided that closing of the loan and disbursement of the proceeds is conditional upon compliance with the requirements of the Border Development Act. Nothing in this section shall be deemed to authorize the authority to incur any debt obligation of the authority in connection with a loan commitment prior to the closing of the loan.
History: Laws 1991, ch. 131, § 19; 1993, ch. 335, § 7; 1995, ch. 192, § 15; 2003, ch. 123, § 6.
ANNOTATIONSThe 2003 amendment, effective June 20, 2003 substituted "to the project" for "thereto" near the middle of Subsection A(3); and inserted "pursuant to provisions of Subsection A of this section" near the end of Subsection C.
The 1995 amendment, effective June 16, 1995, in Paragraph (1) of Subsection A, substituted "shall be fully secured by a lease agreement or installment sale agreement" for "will be fully and unconditionally guaranteed by a lease agreement", inserted "by any state or local public agency or institution" following "government", substituted "a chartered financial institution approved for this purpose by the state board of finance" for "a financial institution", and inserted "by a bond insurance policy issued by an" preceding "insurance company"; in Paragraph (3) of Subsection A, inserted "or sold" following "leased" and "or purchaser" following "lessee"; substituted "may lease" for "shall lease" in Subsection C; and rewrote Subsection D.
The 1993 amendment, effective April 8, 1993, in Subsection A, inserted "or the closing of a loan" twice, "if the resolution is for the issuance of bonds" at the beginning of Paragraph (1), "or the loan proposed to be obtained" in Paragraph (2), and "or the repayment of the loan and, in either case" in Paragraph (3), and made stylistic and related changes; inserted "If the resolution is for the issuance of bonds" at the beginning of Subsection B; in Subsection C, inserted "or the closing of the loan" in the introductory paragraph, and "or on the loan to be obtained" in Paragraph (1), and made a stylistic change; and added Subsections D and E.