1999 Legislation
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SENATE BILL NO. 1281 – Public School Building Authority


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S1281......................................................by STATE AFFAIRS
PUBLIC SCHOOL BUILDING AUTHORITY - Adds to existing law to provide for the
creation of a Public School Building Authority, upon adoption of a
constitutional amendment by the electorate,  for construction and repair of
school buildings.

03/16    Senate intro - 1st rdg - to printing
03/17    Rpt prt - to St Aff

Bill Text


 ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
Fifty-fifth Legislature                 First Regular Session - 1999

                                      IN THE SENATE

                                   SENATE BILL NO. 1281

                                BY STATE AFFAIRS COMMITTEE

 1                                        AN ACT

24    Be It Enacted by the Legislature of the State of Idaho:

25        SECTION 1.  That Title 67, Idaho Code, be, and the same is hereby  amended
26    by  the addition thereto of a  NEW CHAPTER , to be known and desig-
27    nated as Chapter 79, Title 67, Idaho Code, and to read as follows:

28                                      CHAPTER 79
29                           PUBLIC SCHOOL BUILDING AUTHORITY

30        67-7901.  SHORT TITLE. This chapter may be referred to as and cited as the
31    "Idaho State Public School Building Authority Act."

32        67-7902.  DEFINITIONS.  As used in this chapter the  following  words  and
33    terms  have the following meanings, unless a different meaning clearly appears
34    from the context:
35        (1)  "Authority" means the Idaho state public  school  building  authority
36    created and established pursuant to section 67-7903, Idaho Code.
37        (2)  "Bonds," "notes" or "bond anticipation notes" and "other obligations"
38    means any bonds, notes, debentures, interim certificates or other evidences of
39    financial indebtedness, respectively, issued by the state public school build-
40    ing authority pursuant to this chapter.
41        (3)  "Educational  facility"  means  any  work or undertaking, whether new


 1    construction or rehabilitation, which is designed and financed pursuant to the
 2    provisions of this act, and designed for use as a school, instructional facil-
 3    ity, and all other real or personal property which are  necessary,  convenient
 4    or  desirable  appurtenances,  such  as,  but not limited to, streets, sewers,
 5    utilities, parks, site preparation, landscaping and such equipment  which  may
 6    be  necessary  to constitute a fully equipped and modern building or classroom
 7    as a school district  and the state department of education  determine  to  be
 8    necessary or convenient to accomplish the purposes of this act.
 9        (4)  "Federal  government"  means  the  United  States  of America, or any
10    agency or instrumentality, corporate or otherwise  of  the  United  States  of
11    America.
12        (5)  "Real  property" means all lands, including improvements and fixtures
13    thereon, and property of any nature appurtenant thereto, or used in connection
14    therewith, and every estate, interest and right, legal or equitable,  therein,
15    including  terms  of years and liens by way of judgment, mortgage or otherwise
16    and the indebtedness secured by such liens.
17        (6)  "School district" means all bodies corporate  and  politic  organized
18    pursuant  to  chapter  3,  title  33,  Idaho  Code. School district shall also
19    include specially chartered school districts.
20        (7)  "State" means the state of Idaho.
21        (8)  "State body" means any department, board, commission or agency of the
22    state of Idaho.

23        67-7903.  CREATION OF AUTHORITY. There is hereby created  and  established
24    an  independent  public  body  corporate  and politic to be known as the Idaho
25    state public school building authority to carry out  the  provisions  of  this
26    act.  The  authority is hereby constituted a public instrumentality exercising
27    public and essential governmental functions, and the exercise by the authority
28    of the powers conferred by this act shall be deemed and held to be the perfor-
29    mance of an essential governmental function of the state. The authority  shall
30    not have the power to levy and collect taxes.

31        67-7904.  DECLARATION OF POLICY. It is hereby declared:
32        (1)  The  foundation  of  a free society and the viability of its citizens
33    rests with a strong public school system. A public school system, to be effec-
34    tive and viable, needs adequate facilities to instruct  its  students.  It  is
35    necessary  that  proper  provision of educational facilities for public school
36    districts be provided; many such school districts  are  inadequately  provided
37    with the necessary educational facilities and related  facilities.
38        (2)  It  is  to the economic benefit of the citizens of the state of Idaho
39    to provide sufficient educational facilities for  such  school  districts  and
40    thus  provide  a  more  efficient  and more economical operation of the public
41    school system of the state.
42        It is further declared that in order to provide for a fully adequate  sup-
43    ply  of  educational facilities at costs that state government can afford, the
44    legislature finds it necessary to create and establish a state  public  school
45    building  authority for the purpose of constructing and operating such facili-
46    ties to meet the needs of the public school districts of the state.
47        It is hereby further declared to be necessary and in the  public  interest
48    that  such  state  public school building authority provide for predevelopment
49    costs, temporary financing, land development expenses, construction and opera-
50    tion of educational facilities for rental to public school districts or to the
51    state of Idaho.
52        It is hereby further declared that the foregoing are public  purposes  and
53    uses  for  which public moneys may be borrowed, expended, advanced, loaned, or


 1    granted, and that such activities serve  a  public  purpose  in  improving  or
 2    otherwise  benefiting the people of this state; that the necessity of enacting
 3    the provisions hereinafter set forth is in the public interest and  is  hereby
 4    so declared as a matter of express legislative determination.

 5        67-7905.  APPOINTMENT  AND REMOVAL OF COMMISSIONERS. (1) The powers of the
 6    authority shall be vested in a board of seven (7) commissioners  appointed  by
 7    the  governor  for  terms  of  five (5) years with the advice and consent of a
 8    majority of the members of the senate. No commissioner appointed,  shall  also
 9    serve  as  a  member  of  the  permanent  building  council created in section
10    67-5710, Idaho Code. Of the commissioners first appointed, two (2) commission-
11    ers shall serve for terms ending one (1) year from January 1st next succeeding
12    the date of their appointment, two (2) commissioners  shall  serve  for  terms
13    ending  two  (2)  years from January 1st next succeeding their appointment and
14    one (1) of the remaining three (3) commissioners shall serve  for  a  term  of
15    three  (3),  four  (4)  and five (5) years, respectively. Any vacancies in the
16    membership of the authority shall be filled in like manner but  only  for  the
17    remainder  of  an  unexpired term. Each commissioner shall hold office for the
18    term of his appointment and until his successor shall have been appointed  and
19    qualified. Any commissioner shall be eligible for reappointment.
20        (2)  The  commissioners shall elect from among their number a chairman and
21    a vice chairman annually and such other officers as it may determine. Meetings
22    shall be held at the call of the chairman or whenever two (2) commissioners so
23    request. Four (4) commissioners of the authority shall constitute a quorum and
24    the affirmative vote of four (4) commissioners  shall  be  necessary  for  any
25    action  taken  by the authority. No vacancy in the membership of the authority
26    shall impair the right of a quorum to exercise all the rights and perform  all
27    the duties of the authority.
28        (3)  Commissioners  shall be compensated as provided in section 59-509(f),
29    Idaho Code.
30        (4)  For incompetency or neglect of duty or malfeasance in office, a  com-
31    missioner  of  the authority may be removed from office by the governor in the
32    manner provided by law.

33        67-7906.  EXECUTIVE DIRECTOR.  (1) The commissioners shall employ an exec-
34    utive director who shall also be the secretary and who shall administer,  man-
35    age and direct the affairs and business of the authority, subject to the poli-
36    cies, control and direction of the commissioners. The commissioners may employ
37    technical experts and such other officers, agents and employees, permanent and
38    temporary, as it may require, and shall determine their qualifications, duties
39    and  compensation.  The  commissioners  may delegate to one (1) or more of its
40    agents or employees such administrative duties as it may deem proper.
41        (2)  The secretary shall keep a record of the proceedings of the authority
42    and shall be custodian of all books,  documents  and  papers  filed  with  the
43    authority and of its minute book and seal. He shall have authority to cause to
44    be made copies of all minutes and other records and documents of the authority
45    and  to  give  certificates under the seal of the authority to the effect that
46    such copies are true copies and all persons dealing  with  the  authority  may
47    rely upon such certificates.

48        67-7907.  CONFLICT OF INTEREST. No commissioner or employee of the author-
49    ity  shall acquire any interest direct or indirect in any educational facility
50    financed under this act or in any property included or planned to be  included
51    in any such facility, nor shall he have any interest direct or indirect in any
52    contract  or  proposed  contract  for materials or services to be furnished or


 1    used in connection with any such facility. If any commissioner or employee  of
 2    the  authority  owns  or  controls an interest, directly or indirectly, in any
 3    property included or planned to be included in any such facility,  he  immedi-
 4    ately  shall disclose the same in writing to the authority and such disclosure
 5    shall be entered upon the minutes of the authority.  Failure  to  so  disclose
 6    such interest shall constitute misconduct in office. Upon such disclosure such
 7    commissioner  or employee shall not participate in any action by the authority
 8    affecting such property.

 9        67-7908.  NO FORFEITURE OF OFFICE. Notwithstanding the provisions  of  any
10    other  law,  no officer or employee of this state shall be deemed to have for-
11    feited or shall forfeit his office or employment by reason of  his  acceptance
12    of membership on the authority or his service thereon.

13        67-7909.  GENERAL  POWERS  OF  THE  AUTHORITY.  The  authority  is  hereby
14    granted, has and may exercise all powers necessary or appropriate to carry out
15    and effectuate its corporate purposes, including, without limitation, the fol-
16    lowing:
17        (1)  Sue and be sued in its own name;
18        (2)  Have an official seal and to alter the same at pleasure;
19        (3)  Have perpetual succession;
20        (4)  Maintain  an  office  at such place or places within this state as it
21    may designate;
22        (5)  Adopt, and from time to time amend and repeal, bylaws and  rules  and
23    regulations,  not  inconsistent  with  this  chapter, to carry into effect the
24    powers and purposes of the authority and the conduct of its business;
25        (6)  Make and execute contracts and all  other  instruments  necessary  or
26    convenient for the exercise of its powers and functions;
27        (7)  Acquire real or personal property, or any interest therein, on either
28    a temporary or long-term basis in the name of the authority by gift, purchase,
29    transfer, foreclosure, lease or otherwise including rights or easements; hold,
30    sell,  assign,  lease,  encumber, mortgage or otherwise dispose of any real or
31    personal property, or any interest therein, or mortgage interest owned  by  it
32    or  under  its control, custody or in its possession and release or relinquish
33    any right, title, claim, lien, interest, easement or demand however  acquired,
34    including  any  equity or right of redemption in property foreclosed by it and
35    to do any of the foregoing by public sale, with such public bidding  as  shall
36    be required by the provisions of any other law;
37        (8)  To  lease  or  rent  any  lands, buildings, structures, facilities or
38    equipment from private parties to effectuate the purposes of this act;
39        (9)  To enter into agreements or other transactions with and accept grants
40    and the cooperation of the United States or any agency thereof or of the state
41    of Idaho or any agency or governmental subdivision thereof in  furtherance  of
42    the purposes of this act including, but not limited to, the development, main-
43    tenance,  operation and financing of any facility and to do any and all things
44    necessary in order to avail itself of such aid and cooperation;
45        (10) To receive and accept aid or contributions from any source of  money,
46    property,  labor  or  other  things  of value, to be held, used and applied to
47    carry out the purposes of this act subject to such conditions upon which  such
48    grants  and contributions may be made, including, but not limited to, gifts or
49    grants from any department or agency of the United  States or this  state  for
50    any purpose consistent with this act;
51        (11) To  employ  architects,  engineers,  attorneys, accountants, building
52    construction and financial experts and such other  advisors,  consultants  and
53    agents as may be necessary in its judgment and to fix their compensation;


 1        (12) To procure insurance against any loss in connection with its property
 2    and other assets in such amounts and from such insurers as it deems desirable;
 3        (13) To  invest  any  funds  not needed for immediate use or disbursement,
 4    including any funds held in reserve, in:
 5        (a)  Bonds, notes and other obligations of the United States or any agency
 6        or instrumentality thereof and other securities  secured  by  such  bonds,
 7        notes or other obligations;
 8        (b)  Money  market funds which are insured or the assets of which are lim-
 9        ited to obligations of the United States or any agency or  instrumentality
10        thereof;
11        (c)  Time certificates of deposit and savings accounts;
12        (d)  Commercial  paper which, at the time of its purchase, is rated in the
13        highest category by a nationally recognized rating service; and
14        (e)  Property or securities in which the state treasurer may invest  funds
15        in the state treasury pursuant to section 67-1210, Idaho Code.
16        (14) To  borrow  money  and  issue  bonds  and notes or other evidences of
17    indebtedness thereof as hereinafter provided;
18        (15) To the extent permitted under its contract with the holders of bonds,
19    notes and other obligations of the authority to consent to any modification of
20    any contract, lease or agreement of any kind  to  which  the  authority  is  a
21    party;
22        (16) To  manage  or operate real and personal property, in the state, take
23    assignments of leases and rentals, proceed with foreclosure actions,  or  take
24    any  other  action necessary or incidental to the performance of its corporate
25    duties;
26        (17) To make and enter into all  contracts  and  agreements  necessary  or
27    incidental  to  the  performance of its duties and the execution of its powers
28    under this chapter;
29        (18) To plan, carry out, acquire, lease and operate educational facilities
30    and to provide for the construction, reconstruction,  improvement,  alteration
31    or repair of any educational facility or part thereof;
32        (19) To  sell,  lease,  rent  or  sublease to any school district or state
33    body, any educational facility or any space embraced in any educational facil-
34    ity constructed or leased under this act, to establish and revise the rents or
35    charges therefor and to do any other acts  necessary  to  the  management  and
36    operation of its facilities;
37        (20) To  do  any act necessary or convenient to the exercise of the powers
38    herein granted or reasonably implied therefrom.

40    PROJECTS.  Notwithstanding  any  other provision of this act, the authority is
41    not empowered to finance any educational facility pursuant to section 67-7909,
42    Idaho Code, unless:
43        (1)  Prior approval by the legislature has been given by concurrent  reso-
44    lution  authorizing a school district or a state body to have the authority to
45    provide a specific educational facility;
46        (2)  A school district or state body has entered into  an  agreement  with
47    the  authority for the authority to provide a facility;
48        (3)  The authority finds that the building development or building project
49    to  be  assisted pursuant to the provisions of this act, will be of public use
50    and will provide a public benefit.

52    authority  may obtain the aid and cooperation of the school districts in which
53    such facilities are to be located and shall have the power to enter into:


 1        (a)  Such agreements and arrangements as it deems necessary  or  advisable
 2        to obtain such aid and cooperation; and
 3        (b)  Agreements  with school districts, municipalities or counties for the
 4        furnishing, installing, opening or  closing  of  streets,  roads,  alleys,
 5        sidewalks  or  other  places,  or  for the furnishing of property, sewage,
 6        water  and  other  services  in  connection  with  educational  facilities
 7        financed under this act or for the changing of the map of a political sub-
 8        division of the planning, replanning, zoning or rezoning of any part of  a
 9        political subdivision.
10        (2)  The  authority  and  any  state  body may join or cooperate with each
11    other, either jointly or otherwise, in the exercise of any of their powers for
12    the purpose of planning, undertaking, owning, constructing or contracting with
13    respect to an educational facility.

14        67-7912.  EXEMPTION FROM TAXATION. (1) As set forth in the declaration  of
15    finding and purpose herein, the authority will be performing an essential gov-
16    ernmental  function  in  the  exercise of the powers conferred upon it by this
17    chapter, and the notes and bonds of the authority issued pursuant to this act,
18    and the income therefrom including any profit made on the sale thereof and all
19    its  fees,  charges,  gifts,  grants,  revenues,  receipts  and  other  moneys
20    received, pledged to pay or secure the payment of such notes or bonds shall at
21    all times be free from taxation of every kind by the state and by the  munici-
22    palities and all other political subdivisions of the state.
23        (2)  The  property  of the authority and its income and operation shall be
24    exempt from taxation or assessments upon any property acquired or used by  the
25    authority under the provisions of this act.

26        67-7913.  ANNUAL REPORT. The authority shall submit to the governor within
27    ninety  (90)  days  after  the  end of its fiscal year a complete and detailed
28    report setting forth:
29        (1)  Its operations and accomplishments;
30        (2)  Its receipts and expenditures during such fiscal year  in  accordance
31    with  the  categories  or classifications established by the authority for its
32    operating and capital outlay purposes;
33        (3)  Its assets and liabilities at the end of its fiscal  year,  including
34    the status of reserve, special or other funds; and
35        (4)  A  schedule of its notes and bonds outstanding at the end of its fis-
36    cal year, together with a statement of the amounts redeemed and incurred  dur-
37    ing such fiscal year.

38        67-7914.  BONDING PROVISIONS.
39        (1)  (a)  The authority shall have power and is hereby authorized to issue
40        from time to time its notes and bonds in  such  principal  amount  as  the
41        authority  shall determine to be necessary to provide sufficient funds for
42        achieving any of its corporate purposes, including the payment of interest
43        on notes and bonds of the authority, establishment of reserves  to  secure
44        such notes and bonds, and all other expenditures of the authority incident
45        to  and  necessary  or  convenient to carry out its corporate purposes and
46        powers.
47        (b)  The authority shall have the power, from time to time, to  issue  (i)
48        notes to renew notes, and (ii) bonds, to pay notes, including the interest
49        thereon, and whenever it deems refunding expedient, to refund any bonds by
50        the  issuance  of new bonds, whether the bonds to be refunded have or have
51        not matured, and to issue bonds partly to refund  bonds  then  outstanding
52        and  partly  for any of its corporate purposes. The refunding bonds may be


 1        (i) exchanged for bonds to be refunded, or  (ii)  sold  and  the  proceeds
 2        applied to the purchase, redemption or payment of such bonds.
 3        (c)  Except as may otherwise be expressly provided by the authority, every
 4        issue of its notes and bonds shall be general obligations of the authority
 5        payable  out  of  any revenues or moneys of the authority, subject only to
 6        any agreements with the holders of particular notes or bonds pledging  any
 7        particular revenues.
 8        (2)  The  notes and bonds shall be authorized by resolution or resolutions
 9    of the authority, shall bear such date or dates and shall mature at such  time
10    or  times  as  such resolution or resolutions may provide, except that no bond
11    shall mature more than fifty (50) years from the date of its issue. The  bonds
12    may  be issued as serial bonds payable in annual installments or as term bonds
13    or as a combination thereof. The notes and bonds shall bear interest  at  such
14    rate  or  rates,  be  in such denominations, be in such form, either coupon or
15    registered, carry such registration privileges, be executed in such manner, be
16    payable in such medium of payment, at such place or places, and be subject  to
17    such  terms  of  redemption as such resolution or resolutions may provide. The
18    notes and bonds of the authority may be sold by the authority,  at  public  or
19    private sale, at such price or prices as the authority shall determine.
20        (3)  Any  resolution  or resolutions authorizing any notes or bonds or any
21    issue thereof may contain provisions, which shall be a part of the contract or
22    contracts with the holders thereof, as to:
23        (a)  Pledging all or any part of the revenues to secure the payment of the
24        notes or bonds or of any issue thereof, subject to  such  agreements  with
25        noteholders or bondholders as may then exist;
26        (b)  Pledging all or any part of the assets of the authority to secure the
27        payment  of  the notes or bonds or of any issue of notes or bonds, subject
28        to such agreements with noteholders or bondholders as may then exist;
29        (c)  The setting aside of reserves or sinking funds and the regulation and
30        disposition thereof;
31        (d)  Limitations on the purpose to which the proceeds of sale of notes  or
32        bonds  may  be applied and pledging such proceeds to secure the payment of
33        the notes or bonds or of any issue thereof;
34        (e)  Limitations on the issuance of additional notes or bonds;  the  terms
35        upon  which  additional  notes or bonds may be issued and secured; and the
36        refunding of outstanding or other notes or bonds;
37        (f)  The procedure, if any, by  which  the  terms  of  any  contract  with
38        noteholders  or  bondholders  may  be  amended or abrogated, the amount of
39        notes or bonds the holders of which must consent thereto; and  the  manner
40        in which such consent may be given;
41        (g)  Limitations  on  the amount of moneys to be expended by the authority
42        for operating expenses of the authority;
43        (h)  Vesting in a trustee or trustees such property,  rights,  powers  and
44        duties  in  trust  as the authority may determine which may include any or
45        all of the rights, powers and duties of the trustee appointed by the bond-
46        holders pursuant to this act and limiting or abrogating the right  of  the
47        bondholders  to  appoint  a trustee under this act or limiting the rights,
48        powers and duties of such trustee;
49        (i)  Defining the acts or  omissions  to  act  which  shall  constitute  a
50        default  in  the obligations and duties of the state building authority to
51        the holders of the notes or bonds and providing for the rights  and  reme-
52        dies  of  the  holders of the notes or bonds in the event of such default,
53        including as a matter of right the appointment  of  a  receiver;  provided
54        however,  that such rights and remedies shall not be inconsistent with the
55        general laws of the state and the other provisions of this act;


 1        (j)  Any other matters, of like or different character, which in  any  way
 2        affect the security or protection of the holders of the notes or bonds.
 3        (4)  Any  pledge made by the authority shall be valid and binding from the
 4    time when the pledge is made; the revenues, moneys or property so pledged  and
 5    thereafter  received by the authority shall immediately be subject to the lien
 6    of such pledge without any physical delivery thereof or further act,  and  the
 7    lien of any such pledge shall be valid and binding as against all parties hav-
 8    ing  claims  of any kind in tort, contract or otherwise against the authority,
 9    irrespective of whether such parties have notice thereof. Neither the  resolu-
10    tion nor any other instrument by which a pledge is created need be recorded.
11        (5)  Neither  the commissioners of the authority nor any other person exe-
12    cuting such notes or bonds shall be  subject  to  any  personal  liability  or
13    accountability by reason of the issuance thereof.
14        (6)  The  authority,  subject to such agreements with noteholders or bond-
15    holders as may then exist, shall have power out of any funds available  there-
16    for to purchase notes or bonds of the authority, which shall thereupon be can-
17    celed, at a price not exceeding:
18        (a)  If  the notes or bonds are then redeemable, the redemption price then
19        applicable plus accrued interest to the next interest payment thereon; or
20        (b)  If the notes or bonds are not then redeemable, the  redemption  price
21        applicable  on  the first date after such purchase upon which the notes or
22        bonds become subject to redemption plus accrued interest to such date.
23        (7)  In the discretion of the authority, the bonds may  be  secured  by  a
24    trust indenture by and between the authority and a corporate trustee which may
25    be any trust company or bank having the power of a trust company in the state.
26    Such  trust indenture may contain such provisions for protecting and enforcing
27    the rights and remedies of the bondholders as may be reasonable and proper and
28    not in violation of law, including covenants setting forth the duties  of  the
29    authority in relation to the exercise of its corporate powers and the custody,
30    safeguarding  and application of all moneys. The authority may provide by such
31    trust indenture for the payment of the proceeds of the bonds and the  revenues
32    to  the  trustee  under  such trust indenture or other depository, and for the
33    method of disbursement thereof, with such safeguards and  restrictions  as  it
34    may  determine. All expenses incurred in carrying out such trust indenture may
35    be treated as a part of the operating expenses of the authority. If the  bonds
36    shall be secured by a trust indenture, the bondholders shall have no authority
37    to appoint a separate trustee to represent them.
38        (8)  Whether  or not the notes and bonds are of such form and character as
39    to be negotiable instruments under the terms of the uniform  commercial  code,
40    the  notes and bonds are hereby made negotiable instruments within the meaning
41    of and for all the purposes of the uniform commercial code,  subject  only  to
42    the provisions of the notes and bonds for registration.
43        (9)  In  case  any of the commissioners or officers of the authority whose
44    signatures appear on any notes or bonds or coupons shall cease to be such com-
45    missioners or officers before the delivery of such notes or bonds, such signa-
46    tures shall, nevertheless, be valid and sufficient for all purposes, the  same
47    as  if such commissioners or officers had remained in office until such deliv-
48    ery.

49        67-7915.  REFUNDING OBLIGATIONS -- ISSUANCE. The authority may provide for
50    the issuance of refunding obligations for the purpose of refunding any obliga-
51    tions then outstanding which have been issued under  the  provisions  of  this
52    chapter,  including  the  payment  of  any  redemption premium thereon and any
53    interest accrued or to accrue to the date of redemption  of  such  obligations
54    and  for  any corporate purpose of the authority. The issuance of such obliga-


 1    tions, the maturities and other details thereof, the  rights  of  the  holders
 2    thereof, and the rights, duties and obligations of the authority in respect of
 3    the  same  shall be governed by the provisions of this chapter which relate to
 4    the issuance of obligations, insofar as such  provisions  may  be  appropriate
 5    therefor.

 6        67-7916.  REFUNDING OBLIGATIONS -- USE OF PROCEEDS.  Refunding obligations
 7    issued  as  provided  in section 67-7915, Idaho Code, may be sold or exchanged
 8    for outstanding obligations issued under this chapter and, if sold,  the  pro-
 9    ceeds thereof may be applied, in addition to any other authorized purposes, to
10    the  purchase,  redemption or payment of such outstanding obligations. Pending
11    the application of the proceeds of any such refunding  obligations,  with  any
12    other  available  funds, to the payment of the principal, accrued interest and
13    any redemption premium on the obligations being refunded, and, if so  provided
14    or  permitted  in  the  resolution  authorizing the issuance of such refunding
15    obligations or in the trust agreement securing the same, to the payment of any
16    interest on such refunding obligations and any  expenses  in  connection  with
17    such  refunding,  such  proceeds  may be invested in direct obligations of, or
18    obligations the principal of and the interest  on  which  are  unconditionally
19    guaranteed  by  the United States of America which shall mature or which shall
20    be subject to redemption by the holders thereof, at the option of  such  hold-
21    ers,  not later than the respective dates when the proceeds, together with the
22    interest accruing thereon, will be required for the purposes intended.

23        67-7917.  DEPOSIT OF AUTHORITY MONEYS.  (1) All moneys  of  the  authority
24    except  as otherwise authorized or provided in this chapter shall be deposited
25    as soon as practicable in a separate account or accounts  in  banks  or  trust
26    companies  organized  under the laws of the state or national banking associa-
27    tion. The moneys in such accounts shall be paid out on checks  signed  by  the
28    executive director or such other officers or employees of the authority as the
29    authority  shall  authorize. All deposits of such moneys shall, if required by
30    the authority, be secured by obligations of the United States, of the state or
31    of any municipalities or political subdivisions or agencies of the state at  a
32    market  value  equal  at all times to the amount of the deposit, and all banks
33    and trust companies are authorized  to give such security for such deposits.
34        (2)  Notwithstanding the provisions of this section, the  authority  shall
35    have power to contract with the holders of any of its notes or bonds as to the
36    custody,  collection,  securing,  investment  and payment of any moneys of the
37    authority and of any moneys held in trust or  otherwise  for  the  payment  of
38    notes or bonds, and to carry out such contract. Moneys held in trust or other-
39    wise  for the payment of notes or bonds or in any way to secure notes or bonds
40    and deposits of such moneys may be secured in the same manner as moneys of the
41    authority, and all banks and trust companies are authorized to give such secu-
42    rity for such deposits.

43        67-7918.  CONTRACT OF THE STATE. The state does hereby pledge to and agree
44    with the holders of any notes or bonds issued  under  this  chapter  that  the
45    state  will  not  limit  or alter the rights hereby vested in the authority to
46    fulfill the terms of any agreements made with the said holders thereof  or  in
47    any  way  impair  the rights and remedies of such holders until such notes and
48    bonds, together with  the  interest  thereon,  with  interest  on  any  unpaid
49    installments  of  interest,  and all costs and expenses in connection with any
50    action or proceeding by or on behalf of such holders, are fully met  and  dis-
51    charged.  The  authority is authorized to include this pledge and agreement of
52    the state in any agreement with the holders of such notes or bonds.


 2    bonds  or other obligations of the authority shall not be or become an indebt-
 3    edness or obligation of the state of Idaho, or of any department, board,  com-
 4    mission, agency, political subdivision, body corporate and politic, or instru-
 5    mentality of or county within the state nor shall such notes, bonds or obliga-
 6    tions  of  the authority constitute the giving or loaning of the credit of the
 7    state of Idaho, or of any department,  board,  commission,  agency,  political
 8    subdivision,  body corporate and politic or instrumentality of or municipality
 9    or county within the state, nor shall they be payable out of any  funds  other
10    than  those  of  the  authority; and such notes and bonds shall contain on the
11    face thereof a statement to such effect.

12        67-7920.  REMEDIES OF BOND AND NOTEHOLDERS. (1)  In  the  event  that  the
13    authority  shall  default  in  the  payment of principal of or interest on any
14    issue of notes and bonds after the same shall become due, whether at  maturity
15    or  upon  call for redemption, and such default shall continue for a period of
16    thirty (30) days, or in the event that the authority shall fail or  refuse  to
17    comply with the provisions of this act, or shall default in any agreement made
18    with  the  holders  of any issue of notes or bonds, the holders of twenty-five
19    percent (25%) in aggregate principal amount of the  notes  or  bonds  of  such
20    issue then outstanding, may appoint a trustee to represent the holders of such
21    notes or bonds for the purposes herein provided.
22        (2)  Such  trustee may, and upon written request of the holders of twenty-
23    five percent (25%) in principal amount of such notes or bonds then outstanding
24    shall, in his or its own name:
25        (a)  By suit, action or proceeding enforce all rights of  the  noteholders
26        or  bondholders, including the right to require the authority to carry out
27        any agreements with such holders and to perform its duties under this act;
28        (b)  Bring suit upon such notes or bonds;
29        (c)  By action or suit, require the authority to account as if it were the
30        trustee of an express trust for the holders of such notes or bonds;
31        (d)  By action or suit, enjoin any acts or things which may be unlawful or
32        in violation of the rights of the holders of such notes or bonds;
33        (e)  Declare all such notes or bonds due and payable, and if all  defaults
34        shall  be  made good, then, with the consent of the holders of twenty-five
35        percent (25%) of the principal amount of such notes  or  bonds  then  out-
36        standing, annul such declaration and its consequences.
37        (3)  Before declaring the principal of notes or bonds due and payable, the
38    trustee shall first give thirty (30) days' notice in writing to the authority.

39        67-7921.  STATE  GRANTS  TO  AUTHORITY.  The state or school districts may
40    make grants of money or property to the authority for the purpose of  enabling
41    it  to  carry  out  its corporate purposes and for the exercise of its powers,
42    including, but not limited to, deposits to the  reserve  funds.  This  section
43    shall  not be construed to limit any other power the state or school districts
44    may have to make such grants to the authority.

45        67-7922.  AUTHORITY OBLIGATIONS ARE LEGAL INVESTMENTS. The notes and bonds
46    of the authority shall be legal investments in which all public  officers  and
47    public  bodies  of  this state, its political subdivisions, all municipalities
48    and municipal subdivisions, all insurance companies and associations and other
49    persons carrying on an insurance business, all banks, bankers, banking associ-
50    ations, trust companies, savings banks  and  savings  associations,  including
51    savings and loan associations, building and loan associations, investment com-
52    panies  and  other persons carrying on a banking business, all administrators,


 1    guardians, executors, trustees and other fiduciaries, and  all  other  persons
 2    whatsoever who are now or may hereafter be authorized to invest in bonds or in
 3    other obligations of the state, may properly and legally invest funds, includ-
 4    ing  capital,  in  their control or belonging to them. The notes and bonds are
 5    also hereby made securities which may properly and legally be  deposited  with
 6    and  received  by all public officers and bodies of the state or any agency or
 7    political subdivisions of the state and all municipalities and public corpora-
 8    tions for any purpose for which the deposit of bonds or other  obligations  of
 9    the state is now or may hereafter be authorized by law.

10        67-7923.  ACT  NOT  A  LIMITATION OF POWERS. Neither this act nor anything
11    herein contained is or shall be construed as a restriction or limitation  upon
12    any  powers  which  the  authority might otherwise have under any laws of this
13    state, and this act is cumulative to any such powers. This act does and  shall
14    be  construed to provide a complete additional, and alternative method for the
15    doing of the things authorized thereby and shall be regarded  as  supplemental
16    and  additional  to  powers  conferred by other laws. However, the issuance of
17    bonds, notes and other obligations and refunding bonds under the provisions of
18    this act need not comply with the requirements of any other state law applica-
19    ble to the issuance of bonds, notes and other obligations. Contracts  for  the
20    construction and acquisition of any facilities undertaken pursuant to this act
21    need  not comply with the provisions of any other state law applicable to con-
22    tracts for the construction and acquisition of state owned property.  No  pro-
23    ceedings,  notice or approval shall be required for the issuance of any bonds,
24    notes and other obligations or any instrument as security therefor, except  as
25    is provided in this act.

26        67-7924.  INCONSISTENCY WITH OTHER LAWS. Insofar as the provisions of this
27    act  are  inconsistent with the provisions of any other law, general, specific
28    or local, the provisions of this act shall be controlling.

29        SECTION 2.  This act shall be in full force and effect on  and  after  the
30    date  of  adoption of Senate Joint Resolution No. 101 by the electorate at the
31    2000 general election as required by law.

Statement of Purpose / Fiscal Impact

                      STATEMENT OF PURPOSE
                            RS 08857

The purpose of this legislation is to amend Title 67, Idaho Code
by the addition of a new Chapter 79, Title 67 Idaho Code. To
provide a declaration of policy, define terms, to create the
Public School Building Authority. To allow for the funding of
school facilities in a manner which will allow for cost savings
and property tax relief.

                           FISCAL NOTE

Negative physical impact due to tax savings.

CONTACT:  Senator John Sandy
          332-1305 office