Senate File 526 - Introduced SENATE FILE 526 BY COMMITTEE ON COMMERCE (SUCCESSOR TO SF 306) A BILL FOR An Act regarding port authorities, including by allowing port 1 authorities to enter into certain loan agreements and lease 2 contracts. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 2139SV (3) 90 th/ns

S.F. 526 Section 1. Section 28J.1, subsections 1 and 3, Code 2023, 1 are amended to read as follows: 2 1. “Authorized purposes” means an activity that enhances, 3 fosters, aids, provides, or promotes transportation, 4 infrastructure, utility service, flood and erosion control, 5 economic development, housing, recreation, education, 6 governmental operations, culture, or research within the 7 jurisdiction of a port authority. 8 3. “City” means the same as defined in section 362.2 , and 9 also includes a city enterprise as defined in section 384.24 . 10 Sec. 2. Section 28J.1, subsection 6, paragraphs d, f, and g, 11 Code 2023, are amended to read as follows: 12 d. The cost of machinery, furnishings, equipment, financing 13 charges, interest prior to and during construction and for 14 no more than twelve months after completion of construction, 15 engineering, architectural services, technical services, 16 preliminary reports, property valuations, consequential 17 damages or costs, provisions for contingencies, supervision, 18 inspection, testing, and expenses of research and development 19 with respect to a facility. 20 f. The interest upon the revenue bonds , and pledge 21 orders , loan agreements, lease contracts, and certificates of 22 participation in or other participatory interests or evidences 23 of any obligation under a loan agreement or lease contract, 24 during the period or estimated period of construction and 25 for twelve months thereafter, or for twelve months after the 26 acquisition date, and upon reserve funds as the port authority 27 deems advisable in connection with a facility and the issuance 28 of port authority revenue bonds , and pledge orders , loan 29 agreements, lease contracts, and certificates of participation 30 in or other participatory interests or evidences of any 31 obligation under a loan agreement or lease contract . 32 g. The costs of issuance of port authority revenue bonds , 33 and pledge orders , loan agreements, lease contracts, and 34 certificates of participation in or other participatory 35 -1- LSB 2139SV (3) 90 th/ns 1/ 22

S.F. 526 interests or evidences of any obligations under a loan 1 agreement or lease contract . 2 Sec. 3. Section 28J.1, subsections 7 and 8, Code 2023, are 3 amended to read as follows: 4 7. “Facility” or “port authority facility” means any 5 public works project, intermodal freight or transportation 6 facility, project for which tax-exempt financing is authorized 7 by the Internal Revenue Code, and real or personal property 8 or improvements owned, leased, constructed, or otherwise 9 controlled or financed by or for a port authority and that 10 is related to or in furtherance of one or more authorized 11 purposes. “Facility” does not include a recreational facility. 12 8. “Governmental agency” means a department, division, 13 or other unit of state government of this state or any other 14 state, city, county, any political subdivision, township, or 15 other governmental subdivision, or any city utility, any other 16 public corporation , special purpose district, authority, or 17 agency created under the laws of this state, any other state, 18 the United States, or any department or agency thereof, or any 19 agency, commission, or authority established pursuant to an 20 interstate compact or agreement or combination thereof. 21 Sec. 4. Section 28J.1, Code 2023, is amended by adding the 22 following new subsection: 23 NEW SUBSECTION . 8A. “Net revenues” means revenues less 24 operating expenses. 25 Sec. 5. Section 28J.1, subsections 11 and 14, Code 2023, are 26 amended to read as follows: 27 11. “Political subdivision” means a city, county, 28 city-county consolidation, or multicounty consolidation, or 29 combination thereof municipality as defined in section 16.151 . 30 14. “Port authority revenue bonds” or “revenue bonds” means 31 revenue bonds and revenue refunding bonds issued pursuant to 32 section 28J.21 . 33 Sec. 6. Section 28J.1, Code 2023, is amended by adding the 34 following new subsection: 35 -2- LSB 2139SV (3) 90 th/ns 2/ 22

S.F. 526 NEW SUBSECTION . 15A. “Public works project” means a 1 project of a type that a political subdivision is authorized 2 to undertake as otherwise provided by law, including 3 but not limited to public roads and other transportation 4 infrastructure, utility systems such as water treatment 5 facilities and sewage treatment facilities, or a project as 6 defined in section 384.80. 7 Sec. 7. Section 28J.1, subsection 16, Code 2023, is amended 8 to read as follows: 9 16. “Revenues” means rental rents, fees , income, rates, 10 tolls, receipts, and other charges or revenues received by a 11 port authority or derived from the operations of a facility 12 or for the use or services of a facility, a gift or grant 13 received with respect to a facility, moneys received with 14 respect to the lease, sublease, sale, including installment 15 sale or conditional sale, or other disposition of a facility, 16 moneys received in repayment of and for interest on any 17 loans made by the port authority to a person or governmental 18 agency, proceeds of port authority revenue bonds for payment 19 of principal, premium, or interest on the bonds authorized 20 by the port authority, proceeds or borrowings under port 21 authority loan agreements for payment of principal, premium, 22 or interest on the port authority obligations thereunder, 23 proceeds or borrowings under lease contracts for the payment of 24 lease payments thereunder, proceeds under any certificates of 25 participation in or other participatory interests or evidences 26 of any obligations under a loan agreement or lease contract, 27 proceeds from any insurance, condemnation, or guarantee 28 pertaining to the financing of the facility, and income and 29 profit from the investment of the proceeds of port authority 30 revenue bonds , proceeds, or borrowings under loan agreements, 31 lease contracts, or proceeds of certificates of participation 32 in or other participatory interests or evidences of any 33 obligation under any loan agreement or lease contract or of any 34 revenues. 35 -3- LSB 2139SV (3) 90 th/ns 3/ 22

S.F. 526 Sec. 8. Section 28J.2, subsection 1, Code 2023, is amended 1 to read as follows: 2 1. Two or more political subdivisions may by resolution 3 create a port authority under this chapter by resolution 4 anywhere in this state, regardless of proximity to a body 5 of water . Only the political subdivisions creating a port 6 authority have jurisdiction over the port authority. If a 7 proposal to create a port authority receives a favorable 8 majority of the members of the elected legislative body of each 9 of the political subdivisions, the port authority is created 10 at the time provided in the resolution. The jurisdiction of 11 a port authority includes the territory described in section 12 28J.8 . 13 Sec. 9. Section 28J.2, Code 2023, is amended by adding the 14 following new subsection: 15 NEW SUBSECTION . 5. A port authority is an entity separate 16 from the political subdivisions comprising the port authority. 17 The powers granted to the port authority pursuant to this 18 chapter are in addition to other powers, and constitute 19 independent powers that may be exercised by the port authority 20 whether or not the political subdivisions comprising the 21 port authority have or may exercise any of those powers 22 individually. 23 Sec. 10. Section 28J.3, subsection 1, Code 2023, is amended 24 to read as follows: 25 1. The political subdivisions comprising a port authority 26 may appropriate and expend public funds and make contributions 27 to the port authority to finance or subsidize the operation and 28 authorized purposes of the port authority and pay the costs 29 and expenses incurred by the port authority in carrying out 30 any operations or authorized purposes of the port authority . 31 Political subdivisions comprising the port authority may 32 enter into agreements with each other or the port authority 33 providing for the contributions to the port authority to be 34 made by each of the political subdivisions and providing for 35 -4- LSB 2139SV (3) 90 th/ns 4/ 22

S.F. 526 the obligations of each of the political subdivisions to pay, 1 finance, or subsidize the costs and expenses incurred by the 2 port authority. Political subdivisions comprising the port 3 authority may, by resolution, authorize and appropriate funds 4 for any contribution, payment, or financing required to be 5 made under such agreement by the use of any method available 6 to government agencies for providing funds or financing under 7 section 28J.16. A port authority shall control tax revenues 8 allocated to the facilities the port authority administers and 9 all revenues derived from the operation of the port authority, 10 the sale of its property, interest on investments, or from any 11 other source related to the port authority. 12 Sec. 11. Section 28J.5, subsections 1, 2, and 5, Code 2023, 13 are amended to read as follows: 14 1. A port authority created pursuant to section 28J.2 shall 15 be governed by a board of directors. Members of a board of 16 directors of a port authority created by two or more political 17 subdivisions shall be divided among the political subdivisions 18 comprising the port authority in such proportions as the 19 political subdivisions may agree and shall be appointed by the 20 respective political subdivision’s elected legislative body. 21 Members of a board of directors of a port authority created by 22 one political subdivision shall be appointed by the political 23 subdivision’s governing body. 24 2. The number of directors comprising the board of a port 25 authority created by two or more political subdivisions shall 26 be determined by agreement between the political subdivisions 27 comprising the port authority , and which . The number of 28 directors comprising the board of directors of a port authority 29 created by one political subdivision shall consist of the 30 number of directors the political subdivision considers 31 necessary. The number may be changed by resolution of each 32 of the political subdivisions comprising the port authority 33 and in accordance with any agreement between the political 34 subdivisions comprising the port authority . 35 -5- LSB 2139SV (3) 90 th/ns 5/ 22

S.F. 526 5. The board may provide procedures for the removal of a 1 director who fails to attend three consecutive regular meetings 2 of the board. If a director is so removed, a successor shall 3 be appointed for the remaining term of the removed director in 4 the same manner provided for the original appointment. The 5 appointing body Any political subdivisions comprising the port 6 authority may at any time remove a director appointed by it for 7 misfeasance, nonfeasance, or malfeasance in office and appoint 8 a successor for the remaining term of the removed director in 9 the same manner as provided for by the original appointment . 10 Sec. 12. Section 28J.8, subsection 1, Code 2023, is amended 11 to read as follows: 12 1. The area of jurisdiction of a port authority shall 13 include all of the territory of the port authority facility and 14 of the political subdivisions comprising the port authority 15 and, if the port authority owns or leases a railroad line or 16 airport, the territory on which the railroad’s line, terminals, 17 and related facilities or the airport’s runways, terminals, 18 and related facilities are located, regardless of whether the 19 territory is located in the political subdivisions comprising 20 the port authority. 21 Sec. 13. Section 28J.9, subsections 4, 8, and 10, Code 2023, 22 are amended to read as follows: 23 4. Acquire, construct, furnish, equip, maintain, repair, 24 sell, exchange, lease, lease with an option to purchase, 25 convey interests in real or personal property, and operate any 26 property of the port authority within or outside the territory 27 of the political subdivisions comprising the port authority in 28 furtherance of any authorized purpose, including in connection 29 with transportation, recreational, governmental operations, or 30 cultural activities in furtherance of an authorized purpose . 31 8. Issue port authority revenue bonds beyond the limit 32 of bonded indebtedness provided by law, payable solely from 33 revenues as provided in section 28J.21 , and enter into loan 34 agreements and lease contracts as provided in section 28J.21A, 35 -6- LSB 2139SV (3) 90 th/ns 6/ 22

S.F. 526 for the purpose of providing funds to pay the costs of any 1 facility or facilities of the port authority or parts thereof. 2 10. Enjoy and possess the same legislative and executive 3 rights, privileges, and powers granted cities under chapter 4 chapters 28F, 364 , and 384, and counties under chapter 331 , 5 including the exercise of police power but excluding the power 6 to levy taxes. 7 Sec. 14. Section 28J.11, subsection 2, Code 2023, is amended 8 to read as follows: 9 2. Impair the powers of a political subdivision to develop 10 or improve a port and terminal authority facility except as 11 restricted by section 28J.15 . 12 Sec. 15. Section 28J.13, Code 2023, is amended to read as 13 follows: 14 28J.13 Annual budget —— use of rents and charges. 15 The board shall annually prepare a budget for the port 16 authority. Revenues received by the port authority shall be 17 used for the general expenses of the port authority and to 18 pay interest, amortization, and retirement charges on , and 19 principal of, money borrowed and to make payments under lease 20 contracts . Except as provided in section 28J.26 , if there 21 remains, at the end of any fiscal year, a surplus of such funds 22 after providing for the above uses, the board shall pay such 23 surplus into the general funds of the political subdivisions 24 comprising the port authority as agreed to by the subdivisions. 25 Sec. 16. Section 28J.15, Code 2023, is amended to read as 26 follows: 27 28J.15 Limitation on certain powers of political 28 subdivisions. 29 A political subdivision creating or participating in the 30 creation of a port authority in accordance with section 28J.2 31 shall not, during the time the port authority is in existence, 32 exercise the rights and powers provided in chapters 28A , 28K , 33 and 384 relating to the political subdivision’s authority over 34 a port, wharf, dock, harbor , or other facility substantially 35 -7- LSB 2139SV (3) 90 th/ns 7/ 22

S.F. 526 similar to that political subdivision’s authority under a port 1 authority granted under this chapter , except as provided in 2 section 28J.2 . 3 Sec. 17. Section 28J.16, subsection 1, paragraphs a and c, 4 Code 2023, are amended to read as follows: 5 a. A port authority may charge, alter, and collect rental 6 rents, fees , or other charges or revenues for the use or 7 services of any port authority facility and contract for the 8 use or services of a facility, and fix the terms, conditions, 9 rental rents, fees, or other charges for the use or services. 10 c. The rental rents, fees , or other charges , and other 11 revenues of a port authority shall not be subject to 12 supervision or regulation by any other authority, commission, 13 board, bureau, or governmental agency of the state and the 14 contract may provide for acquisition of all or any part of 15 the port authority facility for such consideration payable 16 over the period of the contract or otherwise as the port 17 authority determines to be appropriate, but subject to the 18 provisions of any resolution authorizing the issuance of port 19 authority revenue bonds , loan agreements, lease contracts, 20 or certificates of participation in or other participatory 21 interests or evidences of any obligations under a loan 22 agreement or lease contract, or of any trust agreement securing 23 the bonds , loan agreements, lease contracts, or certificates of 24 participation in or other participatory interests or evidences 25 of any obligation under a loan agreement or lease contract . 26 Sec. 18. Section 28J.16, subsection 2, paragraph a, Code 27 2023, is amended to read as follows: 28 a. A governmental agency may cooperate with the port 29 authority in the acquisition , operation, or construction of a 30 port authority facility and shall enter into such agreements 31 with the port authority as may be appropriate, which shall 32 provide for contributions by the parties in a proportion as may 33 be agreed upon and other terms as may be mutually satisfactory 34 to the parties including the authorization of the construction 35 -8- LSB 2139SV (3) 90 th/ns 8/ 22

S.F. 526 of the facility by one of the parties acting as agent for all 1 of the parties and the ownership , operation, and control of 2 the facility by the port authority to the extent necessary or 3 appropriate. 4 Sec. 19. Section 28J.17, subsection 1, paragraph a, Code 5 2023, is amended to read as follows: 6 a. A port authority may enter into a contract or other 7 arrangement with a person, railroad, utility company, 8 corporation, governmental agency including sewerage, drainage, 9 conservation, conservancy, or other improvement districts in 10 this or other states, or the governments or agencies of foreign 11 countries as may be necessary or convenient for the exercise 12 of the powers granted by this chapter . The port authority 13 may purchase, lease, or acquire land or other property in 14 any county of this state and in adjoining states for the 15 accomplishment of authorized purposes of the port authority, or 16 for the improvement of the harbor and port authority facilities 17 over which the port authority may have jurisdiction including 18 development of port authority facilities in adjoining states. 19 The authority granted in this section to enter into contracts 20 or other arrangements with the federal government includes the 21 power to enter into any contracts, arrangements, or agreements 22 that may be necessary to hold and save harmless the United 23 States from damages due to the construction and maintenance by 24 the United States of work the United States undertakes. 25 Sec. 20. Section 28J.19, Code 2023, is amended to read as 26 follows: 27 28J.19 Property tax exemption. 28 A port authority shall be exempt from and shall not be 29 required to pay taxes on real property that is purchased by a 30 port authority or real property belonging to a port authority 31 that is used exclusively for an authorized purpose , as provided 32 in section 427.1, subsection 34 . 33 Sec. 21. Section 28J.21, subsection 2, Code 2023, is amended 34 by adding the following new paragraph: 35 -9- LSB 2139SV (3) 90 th/ns 9/ 22

S.F. 526 NEW PARAGRAPH . c. (1) Registered voters may submit a 1 petition to the board to stop further action on the issuance 2 of revenue bonds within sixty days after the board receives a 3 written objection from a resident or property owner within the 4 jurisdiction of the port authority. A valid petition must have 5 signatures from at least ten percent of the registered voters 6 based on the votes cast for the office of president of the 7 United States or governor at the preceding general election, 8 for each of the political subdivisions comprising the port 9 authority. 10 (2) If a valid petition is submitted to the board, the 11 board shall either by resolution declare the proposal to issue 12 the bonds abandoned, or shall direct the county commissioner 13 of elections to call a special election upon the question of 14 issuing the bonds. 15 (3) Notice of an election must be given by publication as 16 required by section 49.53 in a newspaper of general circulation 17 in the political subdivisions comprising the port authority. 18 At the election, the ballot used for the submission of the 19 proposition must be in substantially the form for submitting 20 special questions at general elections. 21 Sec. 22. NEW SECTION . 28J.21A Loan agreements —— lease 22 contracts —— trust agreements. 23 1. Definitions. As used in this section, unless the context 24 otherwise requires: 25 a. “Lease contract” includes any certificates of 26 participation or other participatory interests in the lease 27 contract or obligations arising out of the lease contract. 28 b. “Loan agreement” includes any notes, certificates, or any 29 other participatory interests issued to evidence the parties’ 30 obligations arising out of the loan agreement. 31 2. Loan agreements. A port authority may enter into loan 32 agreements to borrow money to pay the costs of any facility, or 33 parts thereof, or to refund other obligations which are payable 34 from the net revenues of the port authority at lower, the same, 35 -10- LSB 2139SV (3) 90 th/ns 10/ 22

S.F. 526 or higher rates of interest in accordance with the all of the 1 following terms and procedures: 2 a. A loan agreement entered into by a port authority may 3 contain provisions similar to those in loan agreements between 4 private parties, including but not limited to any of the 5 following: 6 (1) The loan agreement may provide for the issuance 7 of notes, certificates of participation, or any other 8 participatory interests to evidence the parties’ obligations. 9 (2) The loan agreement may provide for maturity in one or 10 more installments. 11 (3) The loan agreement may be in registered form and carry 12 registration and conversion privileges. 13 (4) The loan agreement may be payable as to principal and 14 interest at times and places as specified. 15 (5) The loan agreement may be subject to terms of redemption 16 prior to maturity with or without a premium. 17 (6) The loan agreement may be in one or more denominations. 18 b. A provision of a loan agreement which stipulates that 19 a portion of the payments be applied as interest is subject 20 to chapter 74A and such interest may be at a variable rate or 21 rates changing from time to time in accordance with a base or 22 formula. Other laws relating to interest rates do not apply 23 and the provisions of chapter 75 are not applicable. 24 c. The board may authorize a loan agreement to be 25 payable solely from the net revenues of a port authority by 26 substantially following the authorization procedures of section 27 28J.21 for the issuance of revenue bonds. The resolution 28 authorizing the loan agreement may also prescribe additional 29 provisions, terms, conditions, and covenants that the port 30 authority deems advisable, consistent with this chapter, 31 including provisions for creating and maintaining reserve 32 funds and for the authorization of additional loan agreements 33 ranking on a parity with such loan agreements and additional 34 loan agreements junior and subordinate to such loan agreement, 35 -11- LSB 2139SV (3) 90 th/ns 11/ 22

S.F. 526 and that such loan agreement shall rank on a parity with or 1 be junior and subordinate to any loan agreement which may be 2 then outstanding. A port authority loan agreement shall be 3 a contract between the port authority and the lender and the 4 resolution shall be made part of the contract. 5 d. A loan agreement to which a port authority is a party 6 is an obligation of the political subdivisions comprising the 7 port authority for the purposes of chapters 502 and 636, and 8 is a lawful investment for any bank, trust company, savings 9 association, deposit guaranty association, investment company, 10 insurance company, insurance association, executor, guardian or 11 trustee, and any fiduciary responsible for the investment of 12 funds or having charge of the loan retirement funds or sinking 13 funds of any port authority, governmental agency, or taxing 14 district of this state, any pension and annuity retirement 15 system, the Iowa public employees’ retirement system under 16 chapter 97B, the police officers and fire fighters retirement 17 systems under chapters 410 and 411, or a revolving fund of 18 a governmental agency of this state, and are acceptable as 19 security for the deposit of public funds under chapter 12C. 20 3. Lease contracts. A port authority may enter into lease 21 contracts for real or personal property comprising a port 22 authority facility, or parts thereof, in accordance with all of 23 the following terms and procedures: 24 a. A port authority shall lease property only for a term 25 which does not exceed the economic life of the property, as 26 determined by the board. 27 b. A lease contract entered into by a port authority may 28 contain provisions similar to those found in lease contracts 29 between private parties, including but not limited to any of 30 the following: 31 (1) The lease contract may provide for the issuance of 32 certificates of participation or other participatory interests 33 in the lease contracts or any obligations thereunder. 34 (2) The lease contract may provide for the lessee to pay any 35 -12- LSB 2139SV (3) 90 th/ns 12/ 22

S.F. 526 of the costs of operation or ownership of the leased property 1 and for the right to purchase the leased property. 2 c. A provision of a lease contract which stipulates that a 3 portion of the rent or lease payments be applied as interest 4 is subject to the provisions of chapter 74A and such interest 5 may be at a variable rate or rates changing from time to time 6 in accordance with a base or formula. Other laws relating to 7 interest rates shall not apply and the provisions of chapter 8 75 are not applicable. 9 d. The board may authorize a lease contract payable solely 10 from the net revenues of a port authority by substantially 11 following the authorization procedures set forth in section 12 28J.21 for the issuance of port authority revenue bonds. The 13 resolution authorizing the lease contract may also prescribe 14 additional provisions, terms, conditions, and covenants which 15 the port authority deems advisable, consistent with this 16 chapter, including provisions for creating and maintaining 17 reserve funds and the authorization of additional lease 18 contracts ranking on a parity with such lease contracts and 19 additional lease contracts junior and subordinate to such lease 20 contracts, and that such lease contracts shall rank on a parity 21 with or be junior and subordinate to any lease contract which 22 may be then outstanding. A port authority lease contract shall 23 be a contract between the port authority and the lessor and the 24 resolution shall be part of the contract. 25 e. A lease contract to which a port authority is a party 26 is an obligation of the political subdivisions comprising the 27 port authority for the purposes of chapters 502 and 636, and 28 is a lawful investment for any bank, trust company, savings 29 association, deposit guaranty association, investment company, 30 insurance company, insurance association, executor, guardian or 31 trustee, and any fiduciary responsible for the investment of 32 funds or having charge of the lease retirement funds or sinking 33 funds of any port authority, governmental agency or taxing 34 district of this state, any pension and annuity retirement 35 -13- LSB 2139SV (3) 90 th/ns 13/ 22

S.F. 526 system, the Iowa public employees’ retirement system under 1 chapter 97B, the police officers and fire fighters retirement 2 systems under chapters 410 and 411, or a revolving fund of 3 a governmental agency of this state, and are acceptable as 4 security for the deposit of public funds under chapter 12C. 5 f. A contract for construction by a private party of 6 property to be leased by a port authority is not a contract for 7 a public improvement and shall not be subject to the provisions 8 of chapter 26 and section 28J.3, subsection 3. This paragraph 9 applies to all contracts that are subject to this subsection, 10 notwithstanding section 28J.9, subsection 18, or any other 11 provision of law that might otherwise apply, including a 12 requirement of notice, competitive bidding or selection, or 13 for the provision of security. However, if a contract is 14 funded in advance by means of the lessor depositing moneys to 15 be administered by a port authority with the port authority’s 16 obligation to make rent or lease payments commencing with 17 its receipt of moneys, a contract for construction of the 18 property in question awarded by the port authority is a public 19 improvement and is subject to the provisions of chapter 26. 20 4. Trust agreements. 21 a. In the discretion of the port authority, a loan agreement 22 or a lease contract authorized under this section and the port 23 authority’s obligations thereunder may be secured by a trust 24 agreement between the port authority and a corporate trustee 25 that may be any trust company or bank having the powers of a 26 trust company within this or any other state. Subject to the 27 other provisions of this paragraph, the corporate trustee may 28 also be the lender under a loan agreement or the lessor under a 29 lease contract authorized under this section. 30 b. The trust agreement may provide for the issuance of 31 notes to evidence the port authority’s obligations under a loan 32 agreement to which the port authority is a party. The trust 33 agreement may also provide for the issuance of certificates 34 of participation or other participatory interests in a lease 35 -14- LSB 2139SV (3) 90 th/ns 14/ 22

S.F. 526 contract to which a port authority is a party. The trust 1 agreement, or any resolution authorizing the loan agreement or 2 the lease contract, may pledge or assign revenues of the port 3 authority to be received as payment of obligations under the 4 loan agreement or the lease contract and may contain provisions 5 for protecting and enforcing the rights and remedies of the 6 lender, the lessor, or the holders of notes evidencing the 7 port authority’s obligations under the loan agreement. These 8 provisions may include covenants setting forth the duties of 9 the port authority in relation to the acquisition of property, 10 the construction, improvement, maintenance, repair, operation, 11 and insurance of the port authority facility in connection 12 with which the loan agreement or the lease contract is 13 authorized, the rentals or other charges to be imposed for the 14 use or services of any port authority facility, the custody, 15 safeguarding, and application of all moneys, and provisions for 16 the employment of consulting engineers in connection with the 17 construction or operation of any port authority facility. 18 c. A bank or trust company incorporated under the laws 19 of this state that acts as the depository of the proceeds or 20 borrowings provided under the loan agreement or lease contract 21 or of revenues, shall furnish any indemnifying bonds and may 22 pledge any securities that are required by the port authority. 23 The trust agreement may set forth the rights and remedies of 24 the lender, the lessor, or the holders of notes evidencing the 25 port authority’s obligations under the loan agreement and may 26 restrict the individual right of action by the lender, the 27 lessor, or the holders of notes evidencing the port authority’s 28 obligations under the loan agreement as is customary in trust 29 agreements or trust indentures securing similar loan agreements 30 or lease contracts. The trust agreement may contain any other 31 provisions that the port authority determines reasonable and 32 proper for the security of the lender, the lessor, or the 33 holders of notes evidencing the port authority’s obligations 34 under the loan agreement. All expenses incurred in carrying 35 -15- LSB 2139SV (3) 90 th/ns 15/ 22

S.F. 526 out the provisions of the trust agreement may be treated as 1 a part of the cost of the operation of the port authority 2 facility. 3 5. Exclusions. Port authority loan agreements and lease 4 contracts authorized under this chapter shall not constitute 5 a debt, indebtedness, or a pledge of the faith and credit of 6 the port authority or the state or any political subdivision 7 of the state, within the meaning of any state constitutional 8 provision or statutory limitation, nor constitute or give rise 9 to a pecuniary liability of the port authority, any political 10 subdivisions comprising the port authority, the state, or 11 any political subdivision of the state, or a charge against 12 the general credit or taxing power of the port authority. 13 Any political subdivisions comprising the port authority, 14 the state, or any political subdivision of the state, and 15 the holders or owners of the obligations owed under a loan 16 agreement or lease contract shall not have taxes levied by the 17 state or by a taxing authority of a governmental agency of the 18 state for the payment of the principal of or interest owed on 19 such obligations. However, a loan agreement or lease contract 20 and the obligation owed thereunder are payable solely from the 21 revenues and funds pledged for their payment as authorized 22 by this chapter. All loan agreements and lease contracts 23 authorized under this chapter and the evidence of obligations 24 owed under such loan agreements or lease contracts such shall 25 contain a statement to the effect that the loan agreement or 26 lease contract authorized under this chapter and the evidence 27 of obligations owed under the loan agreement or lease contract, 28 as to both principal and interest, are not debts of the port 29 authority or the state or any political subdivision of the 30 state, but are payable solely from revenues and funds pledged 31 for their payment. 32 6. Judicial proceedings. 33 a. The sole remedy for a breach or default of a term of 34 any port authority loan agreement or lease contract authorized 35 -16- LSB 2139SV (3) 90 th/ns 16/ 22

S.F. 526 under this chapter is a proceeding in law or in equity by 1 suit, action, or mandamus to enforce and compel performance of 2 the duties required by this chapter and of the terms of the 3 resolution authorizing the loan agreement or lease contract, 4 or to obtain the appointment of a receiver to take possession 5 of and operate the port authority and to perform the duties 6 required by this chapter and the terms of the resolution 7 authorizing the loan agreement or lease contract. 8 b. An action shall not be brought after fifteen days from 9 the time the loan agreement or lease contract is authorized by 10 the port authority with regards to any of the following: 11 (1) The legality of the port authority loan agreement or 12 lease contract. 13 (2) The power of a port authority to authorize the port 14 authority loan agreement or lease contract. 15 (3) The effectiveness of any proceedings relating to the 16 authorization of the port authority loan agreement or lease 17 contract. 18 Sec. 23. Section 28J.25, Code 2023, is amended to read as 19 follows: 20 28J.25 Funds and property held in trust —— use and deposit of 21 funds. 22 All revenues, funds, properties, and assets acquired by the 23 port authority under this chapter , whether as proceeds from the 24 sale of port authority revenue bonds, pledge orders, borrowings 25 under a loan agreement, entering into a lease contract, 26 proceeds from the issuance of certificates of participation 27 or any other participatory interests in such loan agreement 28 or lease contract or as revenues, shall be held in trust for 29 the purposes of carrying out the port authority’s powers and 30 duties, shall be used and reused as provided in this chapter , 31 and shall at no time be part of other public funds. Such funds, 32 except as otherwise provided in a resolution authorizing port 33 authority revenue bonds or pledge orders, the loan agreement or 34 lease contract, or in a trust agreement securing the same, or 35 -17- LSB 2139SV (3) 90 th/ns 17/ 22

S.F. 526 except when invested pursuant to section 28J.26 , shall be kept 1 in depositories selected by the port authority in the manner 2 provided in chapter 12C , and the deposits shall be secured 3 as provided in that chapter. The resolution authorizing the 4 issuance of revenue bonds or pledge orders, the loan agreement 5 or lease contract, or the trust agreement securing such bonds 6 or pledge orders, shall provide that any officer to whom, or 7 any bank or trust company to which, such moneys are paid shall 8 act as trustee of such moneys and hold and apply them for the 9 purposes hereof, subject to such conditions as this chapter and 10 such resolution or trust agreement provide. 11 Sec. 24. Section 28J.26, subsection 1, Code 2023, is amended 12 to read as follows: 13 1. If a port authority has surplus funds after making all 14 deposits into all funds required by the terms, covenants, 15 conditions, and provisions of outstanding revenue bonds, pledge 16 orders, loan agreements, or lease contracts and refunding bonds 17 which are payable from the revenues of the port authority 18 and after complying with all of the requirements, terms, 19 covenants, conditions, and provisions of the proceedings and 20 resolutions pursuant to which revenue bonds, pledge orders, 21 and refunding bonds are issued or the loan agreement or lease 22 contract is authorized , the board may transfer the surplus 23 funds to any other fund of the port authority in accordance 24 with this chapter and chapter 12C , provided that a transfer 25 shall not be made if it conflicts with any of the requirements, 26 terms, covenants, conditions, or provisions of a resolution 27 authorizing the issuance of revenue bonds, pledge orders, 28 or other obligations which are or loan agreements or lease 29 contracts payable from the revenues of the port authority which 30 are then outstanding. 31 Sec. 25. Section 427.1, subsection 34, Code 2023, is amended 32 to read as follows: 33 34. Port authority property. The property of a port 34 authority created pursuant to section 28J.2 , when devoted to 35 -18- LSB 2139SV (3) 90 th/ns 18/ 22