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1 1 Section 1. NEW SECTION. 16.191 DEFINITIONS.
1 2 For purposes of this section and sections 16.192 through
1 3 16.202, unless the context otherwise requires:
1 4 1. "Cost" means all costs, charges, expenses, or other
1 5 indebtedness incurred by and determined by a political
1 6 subdivision as reasonable and necessary for carrying out all
1 7 works and undertakings necessary or incidental to the
1 8 accomplishment of any project.
1 9 2. "Political subdivision" means a city, including a city
1 10 hospital, county, including a county hospital, school
1 11 district, or community college within the state of Iowa.
1 12 3. "Program" means the rebuild Iowa financing program
1 13 established pursuant to section 16.193.
1 14 4. "Project" means construction or renovation of
1 15 buildings, appurtenant structures, and utilities, and site
1 16 development on property owned, operated, or used by a
1 17 political subdivision for its public purposes. A "project"
1 18 does not include the costs of operating expenses.
1 19 5. "Revolving loan fund" means the rebuild Iowa financing
1 20 program revolving loan fund established in section 16.195.
1 21 Sec. 2. NEW SECTION. 16.192 LEGISLATIVE FINDINGS.
1 22 1. Political subdivisions within the state have
1 23 experienced a deterioration in their buildings, structures,
1 24 and utilities which the political subdivisions own, operate,
1 25 or use for public purposes.
1 26 2. Political subdivisions within the state have a need to
1 27 construct new buildings, appurtenant structures, and
1 28 utilities, and to renovate existing buildings, appurtenant
1 29 structures, and utilities, and to carry out their public
1 30 purposes.
1 31 3. The cost of construction and renovation of buildings,
1 32 appurtenant structures, and utilities owned, operated, or used
1 33 by a political subdivision has placed severe financial burdens
1 34 upon political subdivisions.
1 35 4. There currently exists a shortage of low-cost means by
2 1 which political subdivisions can borrow or otherwise acquire
2 2 funds to construct or renovate buildings, appurtenant
2 3 structures, and utilities.
2 4 5. The availability of funds and loans from the rebuild
2 5 Iowa financing program revolving loan fund shall reduce the
2 6 financing difficulties faced by political subdivisions and
2 7 permit political subdivisions to provide updated, safe, well-
2 8 maintained, efficient, and adequate buildings, appurtenant
2 9 structures, and utilities, for their essential public
2 10 purposes.
2 11 6. The provision of updated, safe, well-maintained,
2 12 efficient, and adequate buildings, appurtenant structures, and
2 13 utilities by political subdivisions is in the public interest
2 14 for the health and welfare of the residents of the state and
2 15 the political subdivisions of the state.
2 16 7. All of the purposes stated in this section are public
2 17 purposes and uses for which public moneys may be borrowed,
2 18 expended, advanced, loaned, or granted.
2 19 Sec. 3. NEW SECTION. 16.193 ESTABLISHMENT OF THE REBUILD
2 20 IOWA FINANCING PROGRAM – ELIGIBILITY.
2 21 1. The rebuild Iowa financing program is established for
2 22 the purpose of making funds and loans available to political
2 23 subdivisions to finance all or part of the costs of projects.
2 24 The authority may enter into and provide any agreements,
2 25 documents, instruments, certificates, data, or information
2 26 necessary in connection with the operation, administration,
2 27 and financing of the program consistent with the provisions of
2 28 sections 16.191 through 16.202, the rules of the authority,
2 29 and state law.
2 30 2. In order to be eligible for funds provided under the
2 31 program, a political subdivision shall prepare annually and
2 32 submit a five-year project priority plan in accordance with
2 33 rules adopted by the authority. The plan shall include but is
2 34 not limited to the following:
2 35 a. A detailed list of all proposed projects which the
3 1 political subdivision believes should be undertaken or
3 2 continued for at least the next five fiscal years.
3 3 b. Background information regarding each proposed project
3 4 and the need for the project.
3 5 c. Information regarding the fiscal effect of each project
3 6 on future operating expenses of the political subdivision.
3 7 d. A listing prioritizing all of the projects for the
3 8 political subdivision.
3 9 e. The proposed means of funding each project.
3 10 f. A schedule for the planning and implementation or
3 11 construction of each project.
3 12 g. A schedule for the next fiscal year of proposed debt
3 13 service payments from issues of bonds previously authorized.
3 14 Sec. 4. NEW SECTION. 16.194 LOAN AGREEMENTS – BONDS AND
3 15 NOTES.
3 16 1. The authority may enter into loan agreements with a
3 17 political subdivision for the purposes of the program. The
3 18 principal amount of the loan agreement may include the amount
3 19 of the cost of the project, plus other amounts which the
3 20 political subdivision deems necessary or desirable for
3 21 capitalized interest, costs of issuance, financing costs,
3 22 credit enhancements, and reserves. The repayment obligation
3 23 of the political subdivision may be secured by a pledge of
3 24 debt service taxes, enterprise revenues or income, or revenues
3 25 of the political subdivision from any source, or by any other
3 26 security the authority deems advisable. The repayment
3 27 obligation may be evidenced by one or more notes of the
3 28 political subdivision. The loan agreement may contain other
3 29 terms and conditions the authority deems advisable.
3 30 2. The authority may issue its bonds and notes for the
3 31 purposes of establishing a revolving loan fund for the program
3 32 and making loans from the fund to political subdivisions under
3 33 the program. The authority may enter into one or more lending
3 34 agreements or purchase agreements with one or more bondholders
3 35 or noteholders containing the terms and conditions of the
4 1 repayment of and the security for the bonds or notes. The
4 2 authority and the bondholders or noteholders or a trustee
4 3 agent designated by the authority may enter into agreements to
4 4 provide for any of the following:
4 5 a. That the proceeds of the bonds and notes and the
4 6 investments of the proceeds may be received, held, and
4 7 disbursed by the authority or by a trustee or agent designated
4 8 by the authority.
4 9 b. That the bondholders or noteholders or a trustee or
4 10 agent designated by the authority may collect, invest, and
4 11 apply the amounts payable under the loan agreements or any
4 12 other instruments securing the debt obligations under the loan
4 13 agreements.
4 14 c. That the bondholders or noteholders may enforce the
4 15 remedies provided in the loan agreements or other instruments
4 16 on their own behalf. If there is a default in the principal
4 17 of or interest on the bonds or notes or in the performance of
4 18 any agreement contained in the loan agreements or other
4 19 instruments, the payment or performance may be enforced in
4 20 accordance with the loan agreements or other instruments.
4 21 d. Other terms and conditions as deemed necessary or
4 22 appropriate by the authority.
4 23 3. The powers granted the authority under this section are
4 24 in addition to other powers contained in this chapter. All
4 25 other provisions of this chapter, except section 16.28,
4 26 subsection 4, apply to bonds or notes issued and powers
4 27 granted to the authority under this section except to the
4 28 extent they are inconsistent with this section.
4 29 4. All bonds or notes issued by the authority in
4 30 connection with the program are exempt from taxation by this
4 31 state and the interest on the bonds or notes is exempt from
4 32 state income tax.
4 33 Sec. 5. NEW SECTION. 16.195 REBUILD IOWA FINANCING
4 34 PROGRAM REVOLVING LOAN FUND.
4 35 1. A separate fund is established in the state treasury,
5 1 to be known as the "rebuild Iowa financing program revolving
5 2 loan fund".
5 3 2. The revolving loan fund shall include sums appropriated
5 4 by the general assembly, all receipts of the revolving loan
5 5 fund including repayment obligations of political
5 6 subdivisions, and any other sums designated for deposit to the
5 7 revolving loan fund from any public or private source. All
5 8 moneys appropriated to and deposited in the revolving loan
5 9 fund are appropriated to, pledged to, and shall be used for
5 10 the sole purpose of making loans to political subdivisions to
5 11 finance all or part of the cost of projects. The moneys in
5 12 the revolving loan fund are not considered part of the general
5 13 fund of the state, are not subject to appropriation for any
5 14 other purpose by the general assembly, and in determining a
5 15 general fund balance, shall not be included in the general
5 16 fund of the state but shall remain in the revolving loan fund
5 17 to be used for its purposes. The revolving loan fund is a
5 18 dedicated fund under the administration and control of the
5 19 authority and subject to section 16.31. Moneys on deposit in
5 20 the revolving loan fund shall be invested by the treasurer of
5 21 state in cooperation with the authority, and the income from
5 22 the investments shall be credited to and deposited in the
5 23 revolving loan fund. Notwithstanding section 8.33,
5 24 unobligated and unencumbered moneys from an appropriation for
5 25 a fiscal year remaining on June 30 of that fiscal year shall
5 26 not revert to the fund from which they were appropriated but
5 27 shall remain in the revolving loan fund and shall be available
5 28 for expenditure in subsequent fiscal years.
5 29 Sec. 6. NEW SECTION. 16.197 POWERS OF POLITICAL
5 30 SUBDIVISIONS – AUTHORIZATION PROCEDURES.
5 31 1. A political subdivision may enter into a loan agreement
5 32 with the authority and borrow money and issue any type of
5 33 obligation which it is otherwise authorized to issue for that
5 34 type of project payable from any security including general
5 35 debt service tax levies which it is authorized by law to
6 1 pledge or appropriate to finance the cost of the type of
6 2 project identified in the loan agreement.
6 3 2. To approve a loan agreement under section 16.194, a
6 4 city shall follow the authorization procedures required under
6 5 section 384.24A.
6 6 3. To approve a loan agreement under section 16.194, a
6 7 county shall follow the authorization procedures required
6 8 under section 331.402, subsection 3.
6 9 4. To approve a loan agreement under section 16.194, a
6 10 school district shall follow the following authorization
6 11 procedures:
6 12 a. For loan agreements that will be payable from a tax
6 13 levied under chapter 76, the procedure for the issuance of
6 14 bonds under chapter 296.
6 15 b. For loan agreements that will be payable from a voter-
6 16 approved physical plant and equipment levy under section
6 17 297.36, the procedures for the imposition of the voter-
6 18 approved physical plant and equipment levy under section
6 19 298.2.
6 20 c. For loan agreements that will be payable from the
6 21 regular physical plant and equipment levy under section
6 22 279.48, the procedures for the imposition of the regular
6 23 physical plant and equipment levy under section 298.2.
6 24 d. For loan agreements that will be payable from the
6 25 designated portion of the local option sales and services tax
6 26 under section 422B.12, the procedures required to issue bonds
6 27 payable from the designated portion of the local option sales
6 28 and services tax under section 422B.12.
6 29 5. To approve a loan agreement under section 16.194, a
6 30 community college shall follow the authorization procedures
6 31 required to issue bonds under chapter 260C.
6 32 Sec. 7. NEW SECTION. 16.198 OTHER LAWS NOT APPLICABLE.
6 33 All laws other than those specified in sections 16.191
6 34 through 16.202, governing the authorization and issuance of
6 35 obligations by political subdivisions, shall not apply to loan
7 1 agreements entered into by political subdivisions with the
7 2 authority for purposes of the program.
7 3 Sec. 8. NEW SECTION. 16.199 SECURITY – RESERVE FUNDS –
7 4 PLEDGES – NONLIABILITY – IRREVOCABLE CONTRACTS.
7 5 1. The authority may provide in the resolution, trust
7 6 agreement, or other instrument authorizing the issuance of its
7 7 bonds or notes pursuant to section 16.194 that the principal
7 8 of, premium, and interest on the bonds or notes are payable
7 9 from any of the following and may pledge the same to its bonds
7 10 or notes:
7 11 a. The income and receipts of other money derived from the
7 12 projects financed with the proceeds of the bonds or notes.
7 13 b. The income and receipts or other money derived from
7 14 designated projects whether or not the projects are financed
7 15 in whole or in part with the proceeds of the bonds or notes.
7 16 c. The amounts on deposit in the revolving loan fund.
7 17 d. The amounts payable to the board pursuant to loan
7 18 agreements with political subdivisions.
7 19 e. Any other funds or accounts established by the
7 20 authority in connection with the program or the sale and
7 21 issuance of its bonds or notes.
7 22 2. The authority may establish reserve funds to secure one
7 23 or more issues of its bonds or notes. The authority may
7 24 deposit in a reserve fund established under this subsection
7 25 the proceeds of the sale of its bonds or notes and other money
7 26 which is made available from any other source.
7 27 3. It is the intention of the general assembly that a
7 28 pledge made in respect of bonds or notes shall be valid and
7 29 binding from the time the pledge is made, that the money or
7 30 property so pledged and received after the pledge by the
7 31 authority shall immediately be subject to the lien of the
7 32 pledge without physical delivery or further act, and that the
7 33 lien of the pledge shall be valid and binding as against all
7 34 parties having claims of any kind in tort, contract, or
7 35 otherwise against the authority whether or not the parties
8 1 have notice of the lien. The resolution, trust agreement, or
8 2 any other instrument by which a pledge is created does not
8 3 need to be recorded or filed under the Iowa uniform commercial
8 4 code to be valid, binding, or effective against the parties.
8 5 Section 16.26, subsection 7, shall not apply to bonds or notes
8 6 issued under section 16.194 and the security for the bonds or
8 7 notes.
8 8 4. The members of the authority and a person executing the
8 9 bonds or notes are not liable personally on the bonds or notes
8 10 and are not subject to personal liability or accountability by
8 11 reason of the issuance of the bonds or notes.
8 12 5. The bonds or notes issued by the authority are not an
8 13 indebtedness or other liability of the state or of a political
8 14 subdivision of the state within the meaning of any
8 15 constitutional or statutory debt limitations but are special
8 16 obligations of the authority. The bonds or notes are payable
8 17 solely from the income and receipts or other funds or property
8 18 of the authority, the amounts on deposit in the fund, and the
8 19 amounts payable to the authority under its resolution, trust
8 20 agreement, or other instrument of the authority authorizing
8 21 the issuance of the bonds or notes as security for the bonds
8 22 or notes. The authority shall not pledge the faith or credit
8 23 of the state or of a political subdivision of the state to the
8 24 payment of any bonds or notes. The issuance of any bonds or
8 25 notes by the authority does not directly, indirectly, or
8 26 contingently obligate the state or a political subdivision of
8 27 the state to apply moneys from, or levy or pledge any form of
8 28 taxation whatever to, the payment of the bonds or notes,
8 29 except as agreed to by the political subdivision in the loan
8 30 agreement referred to under section 16.194, subsection 1.
8 31 6. The state pledges to and agrees with the holders of
8 32 bonds or notes issued under the program that the state will
8 33 not limit or alter the rights and powers vested in the
8 34 authority to fulfill the terms of a contract made by the
8 35 authority with respect to the bonds or notes, or in any way
9 1 impair the rights and remedies of the holders until the bonds
9 2 and notes, together with the interest on them including
9 3 interest on unpaid installments of interest, and all costs and
9 4 expenses in connection with an action or proceeding by or on
9 5 behalf of the holders, are fully met and discharged. The
9 6 authority may include this pledge and agreement of the state,
9 7 as it refers to holders of bonds or notes of the authority, in
9 8 a contract with the holders.
9 9 Sec. 9. NEW SECTION. 16.200 RESERVE FUNDS AND
9 10 APPROPRIATIONS.
9 11 1. The authority may create and establish one or more
9 12 special funds, to be known as "bond reserve funds", which may
9 13 be held by it or a trustee for the bonds or notes, and shall
9 14 pay into each bond reserve fund any moneys appropriated and
9 15 made available by the state for the purpose of the fund, any
9 16 proceeds of sale of notes or bonds to the extent provided in
9 17 the resolutions of the authority authorizing their issuance,
9 18 and any other moneys which may be available to the authority
9 19 for the purpose of the fund from any other sources. All
9 20 moneys held in a bond reserve fund, except as otherwise
9 21 provided in this chapter, shall be used as required solely for
9 22 the payment of the principal of bonds or notes secured in
9 23 whole or in part by the fund or of the sinking fund payments
9 24 with respect to the bonds or notes, the purchase or redemption
9 25 of the bonds or notes, the payment of interest on the bonds or
9 26 notes or the payments of any redemption premium required to be
9 27 paid when the bonds or notes are redeemed prior to maturity.
9 28 2. Moneys in a bond reserve fund shall not be withdrawn at
9 29 any time in an amount that will reduce the amount of the fund
9 30 to less than the bond reserve fund requirement established for
9 31 the fund, as provided in this section, except for the purpose
9 32 of making, with respect to bonds or notes secured in whole or
9 33 in part by the revolving loan fund, payment when due of
9 34 principal, interest, redemption premiums, and the sinking fund
9 35 payments with respect to the bonds or notes for the payment of
10 1 which other moneys of the authority are not available. Any
10 2 income or interest earned by, or incremental to, a bond
10 3 reserve fund due to the investment of the bond reserve fund
10 4 may be transferred by the authority to other funds or accounts
10 5 of the authority to the extent the transfer does not reduce
10 6 the amount of that bond reserve fund below the fund's bond
10 7 reserve fund requirement.
10 8 3. The authority shall not at any time issue bonds or
10 9 notes, secured in whole or in part by a bond reserve fund, if,
10 10 upon the issuance of the bonds or notes, the amount in the
10 11 bond reserve fund will be less than the bond reserve fund
10 12 requirement for the fund, unless the authority at the time of
10 13 issuance of the bonds deposits in the fund from the proceeds
10 14 of the bonds or notes issued or from other sources an amount
10 15 which, together with the amount then in the fund, will not be
10 16 less than the bond reserve fund requirement for the fund. For
10 17 the purposes of this section, the term "bond reserve fund
10 18 requirement" means, as of any particular date of computation,
10 19 an amount of money as provided in the resolutions of the
10 20 authority authorizing the bonds or notes with respect to which
10 21 the fund is established.
10 22 4. To assure the continued operation and solvency of the
10 23 program, provision is made for the accumulation in each bond
10 24 reserve fund of an amount equal to the bond reserve fund
10 25 requirement for the fund. In order to further assure
10 26 maintenance of the bond reserve funds, the chairperson of the
10 27 authority shall, on or before July 1 of each calendar year,
10 28 make and deliver to the governor the chairperson's certificate
10 29 stating the sum, if any, required to restore each bond reserve
10 30 fund to the bond reserve fund requirement for that fund.
10 31 Within thirty days after the beginning of the session of the
10 32 general assembly next following the delivery of the
10 33 certificate, the governor may submit to both houses printed
10 34 copies of a budget including the sum, if any, required to
10 35 restore each bond reserve fund to the bond reserve fund
11 1 requirement for that fund. Any sums appropriated by the
11 2 general assembly and paid to the authority pursuant to this
11 3 section shall be deposited by the authority in the applicable
11 4 bond reserve fund.
11 5 5. All amounts paid over to the authority by the state
11 6 pursuant to the provisions of this section shall constitute
11 7 and be accounted for as advances by the state to the authority
11 8 and, subject to the rights of the holders of any bonds or
11 9 notes of the authority theretofore or thereafter issued, shall
11 10 be repaid to the state without interest from all available
11 11 operating revenues of the authority in excess of amounts
11 12 required for the payment of bonds, notes, or obligations of
11 13 the authority, the bond reserve fund, and operating expenses.
11 14 Sec. 10. NEW SECTION. 16.201 INTEREST SUBSIDY PROGRAM.
11 15 The authority may create an interest subsidy program for
11 16 political subdivisions to receive interest subsidy payments
11 17 from the revolving loan fund for the financing of projects
11 18 approved by the authority which are not financed by a loan
11 19 agreement pursuant to section 16.194. The authority may enter
11 20 into an agreement with the political subdivision for the
11 21 authority to pay periodically throughout the life of the
11 22 political subdivision's debt repayment, a certain amount of
11 23 the interest portion of the political subdivision's debt
11 24 repayment, as determined by the authority. The authority may
11 25 adopt rules to implement the interest subsidy program. Rules
11 26 shall include a process and criteria for approving projects
11 27 and the amount and method of the subsidy. The authority may
11 28 issue bonds or notes to fund the amount of the subsidy. The
11 29 bonds or notes shall be payable from moneys transferred to the
11 30 authority from the revolving loan fund or from other sources
11 31 available to the authority. Bonds or notes shall be issued in
11 32 accordance with the provisions of this chapter.
11 33 Sec. 11. NEW SECTION. 16.202 PROJECT GRANT PROGRAM.
11 34 The authority may create a project grant program to provide
11 35 a political subdivision with a grant from the revolving loan
12 1 fund to assist in financing projects approved by the
12 2 authority. A project is not eligible if financed through a
12 3 loan agreement under section 16.194. The authority may enter
12 4 into an agreement with the political subdivision to make a
12 5 one-time grant to the political subdivision to reduce the
12 6 amount of financing that would otherwise be required of the
12 7 political subdivision, as determined by the authority. The
12 8 authority may adopt rules to implement the project grant
12 9 program including procedures and criteria for approving
12 10 projects and the amount and method of determination of the
12 11 grants.
12 12 SF 2458
12 13 js/cc/26
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