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Iowa Code (Last Updated: December 05, 2016) |
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Title I. STATE SOVEREIGNTY AND MANAGEMENT |
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Chapter 12A. UNIFORM FINANCE PROCEDURES FOR STATE-ISSUED BONDS |
Section 12A.4. General powers.
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1. An issuer may issue bonds under this chapter and do all things necessary with respect to the issuance of the bonds. An issuer shall have all of the powers necessary to issue and secure bonds and carry out the purposes for which the bonds are to be issued, including the power to secure credit enhancement or support and to enter into agreements providing interest rate protection, as deemed appropriate by the issuer. The issuer may issue bonds in principal amounts consistent with the enabling legislation and which the issuer determines are necessary to provide sufficient funds for the purposes for which the bonds are issued, and to provide for the payment of capitalized interest on the bonds, the establishment of reserves to secure the bonds, the payment of the costs of issuance of the bonds, the payment of other expenditures of the issuer incident to and necessary or convenient to carry out the issue, and the payment of all other expenditures necessary or convenient to carry out the purposes for which the bonds are issued.
2. The proceeds of bonds issued by the issuer and not required for immediate disbursement may be deposited with a trustee or depository or the treasurer of state as provided in the authorizing documents. Proceeds shall be invested or reinvested as directed by the treasurer of state and specified in the authorizing documents without regard to any limitation otherwise provided by law.
3. Bonds shall be issued as follows:
a. In a form, issued in denominations, executed in a manner, and payable over terms and with rights of redemption, and subject to such other terms and conditions as prescribed in the authorizing documents.
b. Sold at prices, at public or private sale, and in a manner, as prescribed by the issuer. Chapters 73A, 74, 74A, 75, and 76 do not apply to the sale, issuance, or retirement of the bonds if this chapter is utilized.
c. Subject to the terms, conditions, and covenants providing for the payment of the principal, redemption premiums, if any, interest, and other terms, conditions, covenants, and protective provisions safeguarding payment, not inconsistent with this chapter and as determined by the authorizing documents.
4. Bonds issued under this chapter are investment securities and negotiable instruments within the meaning of and for purposes of the uniform commercial code, chapter 554. Bonds are securities in which public officers and bodies of this state; political subdivisions of this state; insurance companies and associations and other persons carrying on an insurance business; banks, trust companies, savings associations, and investment companies; administrators, guardians, executors, trustees, and other fiduciaries; and other persons authorized to invest in bonds of the state, may properly and legally invest funds, including capital, in their control or belonging to them.
5. Bonds must be authorized by the authorizing documents. The authorizing documents may, however, delegate to an officer of a board or of a governing body of an issuer the power to negotiate and fix the details of an issue of bonds.
6. A resolution, trust agreement, or any other instrument by which a pledge is created shall not be required to be recorded or filed under the uniform commercial code, chapter 554, to be valid, binding, or effective.
7. Subject to the terms of the authorizing documents, the proceeds of bonds may be expended for administrative expenses.
8. An issuer may issue bonds for the purpose of refunding any bonds then outstanding, including the payment of any redemption premiums thereon and any interest accrued or to accrue to the date of redemption of the outstanding bonds. Until the proceeds of bonds issued for the purpose of refunding outstanding bonds are applied to the purchase or retirement of outstanding bonds or the redemption of outstanding bonds, the proceeds may be placed in escrow and be invested and reinvested in accordance with the provisions of this chapter, the authorizing documents, and any applicable escrow agreement. The interest, income, and profits earned or realized on an investment may also be applied to the payment of the outstanding bonds to be refunded by purchase, retirement, or redemption. After the terms of the escrow have been fully satisfied and carried out, any balance of proceeds and interest earned or realized on the investments shall be returned to the issuer. All refunding bonds shall be issued and secured and subject to the provisions of this chapter in the same manner and to the same extent as other bonds issued pursuant to this chapter.