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S1174......................................................by STATE AFFAIRS
BOND BANK AUTHORITY - Adds to and amends existing law to create the Idaho
Bond Bank Authority; to provide membership and compensation of the
authority; to provide for powers and duties of the authority; to require
reports; to provide that bonds are fully negotiable; to provide that bonds
are legal instruments; to exempt property and bonds of the authority from
taxes and assessments; to provide for issuance and form of issuance of
bonds; to provide for sale and sale prices of bonds; to provide for payment
or refunding of bonds; to provide for purchase and disposition of bonds of
the authority; to provide for presumption of validity of bonds and
contracts; to provide that the authority may establish additional funds and
accounts; to provide that certain persons shall not be personally liable on
bonds or contracts; to provide for exemption of property from execution and
sale; to provide for a lien of pledge; to provide for credit enhancement or
liquidity; to provide for surety for deposits by banks; to provide that
expenses of administration shall be limited; to provide swap contracts; to
provide additional powers of certain municipalities relating to municipal
bonds; to provide complete authority; to provide that the rights of
bondholders shall not be impaired by the state; to provide for payment
transfers and notice of nonpayment; to provide for the state financial
assistance intercept mechanism; to provide duties of the State Treasurer;
to provide for interest and penalty provisions; to require cooperation by
state government agencies; and to provide that certain sales tax moneys may
be distributed for purposes of payment on municipal bonds.
02/20 Senate intro - 1st rdg - to printing
02/21 Rpt prt - to St Aff
02/27 Rpt out - rec d/p - to 2nd rdg
02/28 2nd rdg - to 3rd rdg
03/06 3rd rdg - PASSED - 33-1-1
AYES -- Andreason, Boatright, Branch, Brandt, Bunderson, Burtenshaw,
Cameron, Danielson, Darrington, Davis, Deide, Dunklin, Frasure,
Geddes, Goedde, Ingram, Ipsen, Keough, King-Barrutia, Lee, Lodge,
Noh, Richardson, Risch, Sandy, Schroeder, Sims, Sorensen, Stegner,
Thorne, Wheeler, Whitworth, Williams,
NAYS -- Hawkins
Absent and excused -- Stennett
Floor Sponsor -- Sandy
Title apvd - to House
03/07 House intro - 1st rdg - to Bus
03/16 Rpt out - rec d/p - to 2nd rdg
03/19 2nd rdg - to 3rd rdg
Rls susp - PASSED - 59-4-7
AYES -- Barraclough, Bedke, Bell, Bieter, Black, Boe, Bolz, Bradford,
Bruneel, Callister, Campbell, Clark, Collins, Crow, Cuddy, Deal,
Denney, Ellis, Ellsworth, Eskridge, Field(13), Field(20), Gagner,
Gould, Hadley, Hammond, Harwood, Henbest, Higgins, Hornbeck, Jones,
Kellogg, Kendell, Lake, Langford, Loertscher, Mader, Marley, Meyer,
Montgomery, Mortensen, Moyle, Pearce, Pischner, Pomeroy, Raybould,
Ridinger, Robison, Sellman, Smith, Smylie, Stevenson, Stone, Swan,
Tilman, Trail, Wheeler, Young, Mr. Speaker
NAYS -- Barrett, McKague, Roberts, Schaefer
Absent and excused -- Chase, Jaquet, Kunz, Moss, Sali, Shepherd, Wood
Floor Sponsor -- Deal
Title apvd - to Senate
03/20 To enrol
03/21 Rpt enrol - Pres signed
Sp signed
03/22 To Governor
03/23 Governor signed
Session Law Chapter 130
Effective: 07/01/01
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature First Regular Session - 2001
IN THE SENATE
SENATE BILL NO. 1174
BY STATE AFFAIRS COMMITTEE
1 AN ACT
2 RELATING TO THE IDAHO BOND BANK AUTHORITY; AMENDING TITLE 67, IDAHO CODE, BY
3 THE ADDITION OF A NEW CHAPTER 87, TITLE 67, IDAHO CODE, TO PROVIDE A SHORT
4 TITLE, TO DEFINE TERMS, TO PROVIDE FOR THE CREATION OF THE IDAHO BOND BANK
5 AUTHORITY, TO SET FORTH MEMBERSHIP, VACANCIES, OFFICERS, QUORUM REQUIRE-
6 MENTS AND COMPENSATION OF THE AUTHORITY, TO PROVIDE THAT THE AUTHORITY MAY
7 RETAIN OUTSIDE SERVICES, TO PROVIDE FOR POWERS AND DUTIES OF THE AUTHOR-
8 ITY, TO REQUIRE THAT THE AUTHORITY SUBMIT AN ANNUAL REPORT, TO PROVIDE
9 THAT BONDS ARE FULLY NEGOTIABLE, TO PROVIDE THAT BONDS ARE LEGAL INSTRU-
10 MENTS, TO EXEMPT PROPERTY AND BONDS OF THE AUTHORITY FROM TAXES AND
11 ASSESSMENTS, TO PROVIDE FOR ISSUANCE AND FORM OF ISSUANCE OF BONDS, TO
12 PROVIDE FOR SALE AND SALE PRICES OF BONDS, TO PROVIDE FOR PAYMENT OR
13 REFUNDING OF BONDS AND TO PROVIDE FOR TERMS OF AGREEMENT WITH BONDHOLDERS,
14 TO PROVIDE FOR PURCHASE AND DISPOSITION OF BONDS OF THE AUTHORITY, TO PRO-
15 VIDE FOR PRESUMPTION OF VALIDITY OF BONDS AND CONTRACTS, TO PROVIDE FOR A
16 RESERVE FUND AND TO PROVIDE THAT THE AUTHORITY MAY ESTABLISH ADDITIONAL
17 FUNDS AND ACCOUNTS, TO PROVIDE THAT CERTAIN PERSONS SHALL NOT BE PERSON-
18 ALLY LIABLE ON BONDS OR CONTRACTS, TO PROVIDE FOR EXEMPTION OF PROPERTY OF
19 THE AUTHORITY FROM EXECUTION AND SALE, TO PROVIDE FOR AN UNLIMITED SALES
20 TAX ACCOUNT PLEDGE, TO PROVIDE FOR A LIEN OF PLEDGE, TO PROVIDE FOR CREDIT
21 ENHANCEMENT OR LIQUIDITY, TO PROVIDE FOR SURETY FOR DEPOSITS BY BANKS, TO
22 PROVIDE THAT EXPENSES OF ADMINISTRATION SHALL BE LIMITED, TO PROVIDE FOR
23 SWAP CONTRACTS, TO PROVIDE FOR ADDITIONAL POWERS OF CERTAIN MUNICIPALITIES
24 RELATING TO MUNICIPAL BONDS, TO PROVIDE THAT CHAPTER 87, TITLE 67, IDAHO
25 CODE, PROVIDES COMPLETE AUTHORITY, TO PROVIDE THAT THE RIGHTS OF BONDHOLD-
26 ERS SHALL NOT BE IMPAIRED BY THE STATE, TO PROVIDE FOR PAYMENT TRANSFERS,
27 TO PROVIDE FOR NOTICE OF NONPAYMENT, TO PROVIDE FOR THE STATE FINANCIAL
28 ASSISTANCE INTERCEPT MECHANISM, TO PROVIDE FOR DUTIES OF THE STATE TREA-
29 SURER AND TO PROVIDE FOR INTEREST AND PENALTY PROVISIONS AND TO REQUIRE
30 COOPERATION BY STATE GOVERNMENT AGENCIES; AMENDING SECTION 63-316, IDAHO
31 CODE, TO PROVIDE CORRECT CODE REFERENCES; AND AMENDING SECTION 63-3638,
32 IDAHO CODE, TO PROVIDE THAT CERTAIN SALES TAX MONEYS MAY BE DISTRIBUTED
33 FOR PURPOSES OF PAYMENT ON MUNICIPAL BONDS, TO PROVIDE CORRECT CODE REFER-
34 ENCES AND TO MAKE TECHNICAL CORRECTIONS.
35 Be It Enacted by the Legislature of the State of Idaho:
36 SECTION 1. That Title 67, Idaho Code, be, and the same is hereby amended
37 by the addition thereto of a NEW CHAPTER, to be known and designated as Chap-
38 ter 87, Title 67, Idaho Code, and to read as follows:
39 CHAPTER 87
40 IDAHO BOND BANK AUTHORITY
41 67-8701. SHORT TITLE. This chapter shall be known and may be cited as the
42 "Idaho Bond Bank Authority Act."
2
1 67-8702. DEFINITIONS. As used in this chapter:
2 (1) "Authority" or "bond bank authority" means the Idaho bond bank
3 authority.
4 (2) "Bonds" means bonds, notes or other obligations of the authority
5 issued under this chapter.
6 (3) "Municipal bond" means a bond, note or other obligation, including a
7 lease or installment sale agreement, issued or undertaken by a municipality
8 for any purpose authorized by law.
9 (4) "Municipality" means any county, city, municipal corporation, school
10 district, irrigation district, sewer district, water district, highway dis-
11 trict or other special purpose district or political subdivision of the state
12 established by law.
13 67-8703. BOND BANK AUTHORITY CREATED -- MEMBERSHIP -- VACANCIES -- OFFI-
14 CERS -- QUORUM -- COMPENSATION. (1) There is hereby created an independent
15 public body corporate and politic to be known as the Idaho bond bank author-
16 ity. The authority is an instrumentality of the state within the state
17 treasurer's office but has a legal existence independent of and separate from
18 the state with continuing succession until its existence is terminated by law.
19 (2) The authority shall consist of the following five (5) members:
20 (a) The state treasurer, or his designee, who shall serve as ex officio
21 chairman;
22 (b) One (1) member of the senate, who shall be appointed by and serve at
23 the pleasure of the president pro tempore of the senate for a term of two
24 (2) years;
25 (c) One (1) member of the house of representatives, who shall be
26 appointed by and serve at the pleasure of the speaker of the house of rep-
27 resentatives for a term of two (2) years; and
28 (d) Two (2) members appointed by the governor, who shall serve at the
29 pleasure of the governor for terms of four (4) years, and who shall be
30 residents of the state and qualified voters at the time of appointment.
31 (3) A vacancy occurring other than by expiration of term shall be filled
32 in the same manner as the original appointment and for the balance of the
33 unexpired term.
34 (4) The members may elect, by majority vote, a secretary and a treasurer.
35 The secretary and treasurer may be nonmembers, and the same person may be
36 elected to serve both as secretary and treasurer.
37 (5) Three (3) members of the authority shall constitute a quorum. Action
38 may be taken and motions and resolutions adopted by the authority at any meet-
39 ing by the affirmative vote of a majority of members present. A vacancy in the
40 membership of the authority does not impair the right of a quorum to exercise
41 all the powers and perform all the duties of the authority.
42 (6) Members of the authority shall be compensated as provided by section
43 59-509(h), Idaho Code.
44 67-8704. RETENTION OF OUTSIDE SERVICES. The authority may contract for
45 and engage the services of bond counsel, consultants, experts and others whose
46 services the authority considers necessary or appropriate.
47 67-8705. POWERS AND DUTIES OF THE AUTHORITY. The authority shall have the
48 following powers and duties:
49 (1) To sue and be sued in its own name;
50 (2) To adopt and from time to time alter an official seal;
51 (3) To adopt and from time to time amend or repeal rules and bylaws;
52 (4) To accept and receive public grants or private gifts, bequests or
3
1 other moneys;
2 (5) To purchase municipal bonds and to obtain funds for such other pur-
3 poses of the authority authorized by this chapter by:
4 (a) Issuing bonds payable from or secured by municipal bonds of one (1)
5 or more municipalities;
6 (b) Pledging or otherwise obligating, for and in the name and on behalf
7 of the state as its agent and instrumentality, sales tax revenues of the
8 state as a source of payment or security for bonds issued by the author-
9 ity;
10 (c) Establishing debt service reserve funds or other reserve funds;
11 (d) Obtaining private credit enhancement for bonds issued by the author-
12 ity;
13 (e) Investing moneys held by the authority, as proceeds or to pay or
14 secure bonds issued by the authority, in such securities or obligations as
15 are described in the indenture, trust agreement or other instrument pro-
16 viding for the authority's issuance of the bonds;
17 (f) Investing any moneys held by the authority, in excess of funds
18 described in paragraph (e) of this subsection, in any securities or other
19 obligations in which a trustee may invest as provided by law; or
20 (g) Taking any other actions and entering into such other contracts and
21 agreements as the authority may determine to be necessary or appropriate
22 to accomplish the purposes of the authority and this chapter.
23 (6) To charge such fees to municipalities in connection with application
24 for and receipt of financing under this chapter and interest and other charges
25 on or in connection with municipal bonds purchased as it may deem necessary or
26 appropriate to cover all costs and expenses of the authority and its opera-
27 tions, and to set such other terms and conditions on its services or purchase
28 of municipal bonds as may be necessary or appropriate to secure the bonds or
29 improve their marketability or to otherwise achieve the purposes of the
30 authority; and
31 (7) To take any and all actions, execute any and all contracts, including
32 payment of any arbitrage rebate as may be necessary to obtain or maintain
33 exemption of interest on bonds issued by the authority from federal income
34 taxes; provided however, that nothing shall prevent the authority from issuing
35 bonds bearing interest subject to federal income tax.
36 67-8706. ANNUAL REPORT. Before January 1 of each year, the authority
37 shall prepare and submit to the governor and the legislature a report of its
38 activities for the preceding fiscal year. The report shall set out a complete
39 operating and financial statement which covers its operations during the pre-
40 vious fiscal year, and shall include an estimate of the amount of bonds of the
41 authority to be issued during the upcoming fiscal year.
42 67-8707. NEGOTIABILITY OF BONDS. Notwithstanding any other provision of
43 law, a bond issued under this chapter is fully negotiable, and a holder or
44 owner of a bond, by accepting the bond, is conclusively considered to have
45 agreed that the bond is fully negotiable.
46 67-8708. BONDS AS LEGAL INVESTMENTS. Notwithstanding any other provisions
47 of law, all banks, trust companies, savings banks and institutions, building
48 and loan associations, savings and loan associations, investment companies,
49 and other persons carrying on a banking business, all insurance companies,
50 insurance associations, and other persons carrying on an insurance business,
51 and all executors, administrators, guardians, trustees and other fiduciaries,
52 may legally invest sinking funds, money or other funds belonging to them or
4
1 within their control in bonds issued under this chapter.
2 67-8709. TAX EXEMPTION. All property of the authority is public property
3 exempt from all taxes and special assessments of the state or a municipality.
4 All bonds issued under this chapter are issued by a body corporate and politic
5 of this state, and the bonds and the interest and income on and from the bonds
6 and their transfer, and all fees, charges, funds, revenues, interest, income
7 and other moneys or property received by the authority from or in connection
8 with municipal bonds or other assets or operations of the authority, are
9 exempt from every kind of taxation by the state or a municipality.
10 67-8710. ISSUANCE OF BONDS -- FORM OF ISSUANCE -- SALE PRICE -- PAYMENT
11 OR REFUNDING OF BONDS -- TERMS OF AGREEMENT WITH BONDHOLDER. (1) The authority
12 may issue its bonds from time to time in principal amounts that it considers
13 necessary to provide funds for any purpose under this chapter, including,
14 without limitations, to purchase municipal bonds, to fund reserves or to pay
15 costs of issuance, refunding, including redemption premium, credit enhance-
16 ment, or other matters related to the purpose, structure or marketing of the
17 bonds.
18 (2) Bonds shall be authorized by resolution of the authority and shall
19 bear the date, mature at the time or times, bear interest at the rate or rates
20 of fixed or variable interest, payable at the times, be in the denominations,
21 be in the forms, carry the conversion or registration privileges, have the
22 rank or priority, be executed in the manner, be payable from the sources in
23 the medium of payment at the place or places inside or outside the state, and
24 be subject to the terms of redemption, with or without premium, rights of
25 holders to tender for purchase and other terms and conditions as the resolu-
26 tion of the authority provides.
27 (3) Bonds of the authority may be issued in one (1) or more series.
28 (4) Bonds of the authority may be sold at public or private sale at the
29 price or prices the authority determines.
30 (5) The authority may, from time to time, issue its bonds under this
31 chapter and pay and retire, or fund or refund previously issued bonds from
32 proceeds of refunding bonds, or from other funds or money of the authority
33 available for that purpose.
34 (6) By resolution, the authority may authorize entering into an indenture
35 or trust agreement with a corporate trustee located within or outside the
36 state in order:
37 (a) To provide for the issuance of the bonds with such terms, including
38 without limitation those terms referred to in subsection (2) of this sec-
39 tion, as the authority may determine;
40 (b) To pledge or assign to the trustee for the benefit of holders of the
41 bonds all or any part of the proceeds of the bonds, any municipal bonds
42 purchased from municipalities, any other assets or revenues of or received
43 by or pledged to the authority, and the income or other proceeds from any
44 or all of the foregoing;
45 (c) To provide for the establishment of reserves and any other funds or
46 accounts that the authority determines to be necessary or appropriate;
47 (d) To provide for the custody, safekeeping and enforcement of the munic-
48 ipal bonds acquired;
49 (e) To provide for the right to sell or otherwise dispose of property of
50 any kind, including municipal bonds;
51 (f) To provide for the investment of bond proceeds or other moneys held
52 by the trustee in such securities or obligations as may be described in
53 the indenture or trust agreement;
5
1 (g) To provide for amending the indenture or trust agreement, with or
2 without the consent of the holders of the bonds;
3 (h) To provide for the replacement of lost, stolen, destroyed or muti-
4 lated bonds;
5 (i) To provide for the issuance or limitations on issuance of additional
6 bonds;
7 (j) To provide for the rights, liabilities, powers and duties arising
8 upon the breach of any covenant, condition or obligation, to limit the
9 rights of bondholders to enforce covenants, conditions or obligations, and
10 to prescribe the events of default and the terms and conditions upon which
11 any or all of the bonds become or may be declared due and payable before
12 maturity, and the terms and conditions upon which the declaration and its
13 consequences may be waived;
14 (k) To appoint and to provide for the duties and obligations of a paying
15 agent or agents or other fiduciaries inside or outside the state;
16 (l) To make covenants to do or refrain from doing acts, including to
17 enter into any contract, and to provide any other terms and conditions
18 which the authority may determine to be necessary or appropriate in order
19 to better secure the bonds or improve their marketability; and
20 (m) To intercept certain payments, and to impose interest and penalties,
21 as provided in section 67-8725, Idaho Code.
22 67-8711. PURCHASE AND DISPOSITION OF BONDS. The authority may purchase
23 bonds of the authority. The authority may hold, cancel or resell the bonds
24 subject to, and in accordance with, agreements with holders of its bonds.
25 67-8712. PRESUMPTION OF VALIDITY. After issuance, all bonds of the
26 authority, and the purchase of all municipal bonds from municipalities with
27 the proceeds of the bonds, and any contracts entered into in connection with
28 issuance of the bonds, shall be conclusively presumed to be fully authorized
29 and issued under the laws of the state, and all persons, entities and munici-
30 palities are estopped from questioning the authorization, sale, issuance, exe-
31 cution or delivery of the bonds and other agreements by the authority.
32 67-8713. RESERVE FUND -- ADDITIONAL FUNDS AND ACCOUNTS. (1) There is
33 hereby created in the state treasury a fund to be known as the "Idaho Munici-
34 pal Bond Bank Authority Reserve Fund" (hereinafter referred to as "reserve
35 fund") in which there shall be deposited or transferred:
36 (a) All proceeds of bonds that the authority may require municipalities,
37 by contract with the municipality or by a resolution of the authority, to
38 deposit in the reserve fund; and
39 (b) All moneys appropriated by the legislature for the purpose of the
40 fund.
41 (2) Moneys in the reserve fund shall be maintained by the authority and
42 shall be held and applied solely to the payment of the interest on and princi-
43 pal of bonds, pursuant to the provisions of section 67-8725, Idaho Code, as
44 the interest and principal become due and payable. Moneys may not be withdrawn
45 from the reserve fund if a withdrawal would reduce the amount in the reserve
46 fund to an amount less than the required debt service reserve, as herein
47 defined, except for payment of interest then due and payable on bonds and the
48 principal of bonds then maturing and payable, whether by reason of maturity or
49 mandatory redemption, for which payments other than moneys of the authority
50 are not then available. As used in this chapter, "required debt service
51 reserve" means, as of the date of computation, the amount required to be on
52 deposit in the reserve fund as provided by resolution of the authority.
6
1 (3) For purposes of valuation, investments in the reserve fund shall be
2 valued at par, or if purchased at less than par, at cost unless otherwise pro-
3 vided by resolution of the authority. Valuation on a particular date shall
4 include the amount of interest then earned or accrued to that date on the
5 moneys or investments in the reserve fund.
6 (4) Moneys in the reserve fund in excess of the required debt service
7 reserve, whether by reason of investment or otherwise, may be withdrawn at any
8 time by the authority and transferred to another fund or account of the
9 authority, subject to the provisions of any agreement with the holders of any
10 bonds.
11 (5) In order to assure the maintenance of the required debt service
12 reserve in the reserve fund, the legislature may annually appropriate to the
13 authority for deposit in the reserve fund the sum, certified by the chairman
14 of the authority to the legislature, that is necessary to restore the fund to
15 an amount equal to the required debt service reserve. The chairman of the
16 authority, annually before December 1, shall make and deliver to the legisla-
17 ture his certificate stating the sum required to restore the funds to that
18 amount. Nothing in this subsection creates a debt or liability of the state to
19 make any appropriation.
20 (6) All amounts received on account of moneys appropriated by the state
21 to the reserve fund shall be held and applied in accordance with this section;
22 provided however, at the end of each fiscal year, if the amount in the reserve
23 fund exceeds the required debt service reserve, any amount representing earn-
24 ings or income received on account of moneys appropriated to the reserve fund
25 that exceed the expenses of the authority for that fiscal year shall be trans-
26 ferred to the general fund of the state.
27 (7) The authority may establish additional reserves or other funds or
28 accounts as may be, in its discretion, necessary or appropriate to further the
29 accomplishment of its purposes or to comply with the provisions of any of its
30 agreements or resolutions.
31 67-8714. PERSONAL LIABILITY. Neither a member of the authority nor a per-
32 son executing bonds issued or contracts entered into under this chapter shall
33 be liable personally on the bonds or contracts.
34 67-8715. EXEMPTION FROM EXECUTION AND SALE. All property of the authority
35 is exempt from levy and sale by virtue of an execution. No execution or other
36 judicial process may issue against the property of the authority, and a judg-
37 ment against the authority may not be a charge or lien upon its property; pro-
38 vided however, this section shall not apply to nor limit the rights of a
39 holder of bonds or a trustee on behalf of the holder to pursue a remedy for
40 the enforcement of a pledge, lien or covenant given by the authority or a
41 municipality.
42 67-8716. UNLIMITED SALES TAX ACCOUNT PLEDGE. (1) If moneys expected to be
43 intercepted pursuant to section 67-8725, Idaho Code, are expected to be insuf-
44 ficient to reimburse the state for its payments on the municipal bonds, the
45 state treasurer shall certify to and give notice to the state tax commission
46 of the amount of the deficiency.
47 (2) After receipt of the certified notice from the state treasurer, the
48 state tax commission shall:
49 (a) Immediately fix the amount necessary and in the amount of the defi-
50 ciency stated in the notice; and
51 (b) Cause moneys to be transferred from the state sales tax account pur-
52 suant to section 63-3638, Idaho Code, and deposited in the bond bank
7
1 authority fund, which is hereby statutorily created in the state treasury;
2 provided however, that in no event shall a transfer of moneys from the
3 state sales tax account under the provisions of this chapter impede or
4 otherwise affect the payment of sales tax moneys pledged for the payment
5 on other outstanding state bonds.
6 (3) The state of Idaho pledges to and agrees with the holders of any
7 bonds that the state will not alter, impair or limit the rights vested by the
8 sales tax account pledge provided in this section and in section 63-3638,
9 Idaho Code, with respect to the bonds until the bonds, together with applica-
10 ble interest, are fully paid and discharged.
11 (4) To the extent that other legally available revenues and funds of the
12 state are sufficient to meet the certified deficiency, the transfer of moneys
13 from the sales tax account in section 63-3638, Idaho Code, is abated.
14 67-8717. LIEN OF PLEDGE. A pledge of sales tax revenues made by the
15 authority is binding from the time the pledge is made. Sales tax revenues so
16 pledged and thereafter received by the authority are immediately subject to
17 the lien of the pledge without any physical delivery thereof or further act,
18 and the lien of a pledge is binding against all parties having claims against
19 the authority of any kind in tort, contract, or otherwise, regardless of
20 whether the parties have notice of the lien and notwithstanding any other law
21 relating to the creation, priority, perfection or enforcement of pledges or
22 liens or otherwise. Neither the resolution nor any other instrument by which a
23 pledge is created must be filed or recorded except in the records of the
24 authority.
25 67-8718. CREDIT ENHANCEMENT OR LIQUIDITY. (1) The authority may enter
26 into agreements to obtain, from a department or agency of the United States or
27 from a nongovernmental financial institution or other entity, insurance, guar-
28 anty or other credit enhancement or liquidity for the payment of interest or
29 principal on, or payment of the purchase price on tender of:
30 (a) Bonds issued by the authority;
31 (b) Municipal bonds purchased or held by the authority; and
32 (c) Other municipal bonds as the authority determines to be appropriate.
33 (2) Agreements as provided in subsection (1) of this section may contain
34 such payment, interest rate, security, default, remedies or other terms and
35 conditions as the authority may determine to be necessary or appropriate.
36 67-8719. SURETY FOR DEPOSITS BY BANK. All banks, trust companies, savings
37 banks, investment companies and other persons carrying on a banking business
38 are authorized to give to the authority a good and sufficient undertaking with
39 such sureties as are approved by the bank, to the effect that the bank or
40 banking institution shall faithfully keep and pay over to the order of, or
41 upon the warrant of, the authority or its authorized agent all those funds
42 deposited with it by the bank and agreed interest under, or by reason of, this
43 chapter at such times or upon such demands as may be agreed with the bank or
44 in lieu of these sureties, deposit with the authority or its authorized agent
45 or a trustee or for the holders of bonds, as collateral, those securities as
46 the authority may approve. The deposits of the authority may be evidenced by
47 an agreement in the form, and upon the terms and conditions, that may be
48 agreed upon by the authority and the depository bank or banking institution.
49 67-8720. EXPENSES OF ADMINISTRATION. All expenses incurred in carrying
50 out this chapter are payable solely from revenues or funds appropriated under
51 this chapter. Nothing in this chapter authorizes the authority to incur an
8
1 indebtedness or a liability on behalf of or payable by the state.
2 67-8721. SWAPS. In connection with, or incidental to, the issuance or
3 carrying of bonds, but only for the purpose of reducing the amount or duration
4 of payment, interest rate, spread or similar risk, or to result in a lower
5 cost of borrowing, and not for purposes of investment or speculation, the
6 authority may enter into contracts which the authority determines to be neces-
7 sary or appropriate to hedge such risk or to place the obligation of the
8 bonds, in whole or in part, on the interest rate, cash flow, or other basis
9 desired by the authority, including without limitation, contracts commonly
10 known as interest rate swap agreements, interest rate caps or floors, forward
11 payment conversion agreements, futures or hedge contracts.
12 67-8722. MUNICIPAL BONDS. Any municipality which receives sales tax funds
13 from the state may, in addition to any other powers it may have and without
14 regard to the restrictions or requirements that might otherwise apply under
15 the laws of the state but subject to the requirements of section 3, article
16 VIII, of the constitution of the state of Idaho and any other limitations
17 imposed upon municipalities by the constitution of the state of Idaho:
18 (1) Issue municipal bonds for sale to the authority, with such interest
19 rate, maturity, redemption, security, remedies and other terms as the munici-
20 pality may agree with the authority;
21 (2) Levy and collect property taxes, fees, rates, charges and other
22 assessments to pay or secure the municipal bonds issued by the municipality
23 for the sale to the authority;
24 (3) Pledge or assign to the authority or its designee property taxes,
25 fees, rates, charges and other assessments, and rights to enforce the collec-
26 tion and application thereof, to pay or secure the municipal bonds issued by
27 the municipality for sale to the authority; and
28 (4) Take any other actions and enter into such other contracts and agree-
29 ments including, without limitation, leases on installment sale agreements for
30 credit enhancement or liquidity, with such terms as it may determine with the
31 authority to be necessary or appropriate to accomplish the purposes of the
32 authority under this chapter.
33 67-8723 COMPLETE AUTHORITY. This chapter provides a complete, additional
34 and alternative method for accomplishing the acts authorized by this chapter,
35 whether by the authority or by municipalities, and the issuance of bonds and
36 municipal bonds, the purchase of municipal bonds, the entering into of any
37 indenture, trust agreement, credit enhancement or liquidity agreement, invest-
38 ment agreement, swap or other agreement entered into or the taking of any
39 other action in connection with the issuance of bonds or municipal bonds need
40 not comply with the requirements of any other law except as specifically set
41 forth in this chapter.
42 67-8724. RIGHTS NOT TO BE IMPAIRED BY STATE. The state does hereby pledge
43 to and agree with the holders of any bonds issued under this chapter that the
44 state will not limit or alter the rights hereby vested in the authority to
45 fulfill the terms of any agreements made with the holders thereof or in any
46 way impair the security, rights or remedies of such holders until the bonds,
47 with interest thereon, are fully paid and discharged. The authority is autho-
48 rized to include this pledge and agreement in any indenture, trust agreement
49 or other agreement with the holders of such bonds.
50 67-8725. PAYMENT TRANSFER -- NOTICE OF NONPAYMENT -- STATE FINANCIAL
9
1 ASSISTANCE INTERCEPT MECHANISM -- STATE TREASURER DUTIES -- INTEREST AND PEN-
2 ALTY PROVISIONS.
3 (1) (a) Each municipality with outstanding unpaid bonds as set forth in
4 this chapter shall transfer moneys sufficient for the scheduled debt ser-
5 vice payment to its paying agent at least fifteen (15) days before any
6 principal or interest payment date for the bonds. The paying agent may, if
7 instructed to do so by the municipality, invest the moneys at the risk and
8 for the benefit of the municipality until the payment date.
9 (b) A municipality which is unable to transfer the scheduled debt service
10 payment to the paying agent fifteen (15) days before the payment date
11 shall immediately notify the paying agent and the state treasurer by:
12 (i) Telephone;
13 (ii) A writing sent by facsimile transmission; and
14 (iii) A writing sent by first-class United States mail.
15 (c) If sufficient funds are not transferred to the paying agent as
16 required by this subsection, the paying agent shall notify the state trea-
17 surer of that failure in writing at least ten (10) days before the sched-
18 uled debt service payment date by:
19 (i) Telephone;
20 (ii) A writing sent by facsimile transmission; and
21 (iii) A writing sent by first-class United States mail.
22 (d) If sufficient moneys to pay the schedule debt service payment have
23 not been transferred to the paying agent, the state treasurer shall, on or
24 before the scheduled payment date, transfer sufficient moneys from the
25 reserve fund as provided in section 67-8713, Idaho Code, to the paying
26 agent to make the scheduled debt service payment.
27 (e) The payment by the treasurer:
28 (i) Discharges the obligation of the issuing municipality to its
29 bondholders for the payment; and
30 (ii) Transfers the rights represented by the general obligation of
31 the municipality from the bondholders to the state.
32 (2) (a) If one (1) or more payments on bonds are made by the state trea-
33 surer due to the failure of the municipality to make payment on its bonds
34 in a timely manner, the state treasurer shall:
35 (i) Immediately intercept any payments from:
36 (A) The receipt of any payment of property taxes; or
37 (B) Sales tax moneys distributed pursuant to section 63-3638,
38 Idaho Code; or
39 (C) Any other source of operating moneys provided by the state
40 to the municipality that issued the bonds that would otherwise
41 be paid to the municipality by the state; and
42 (ii) Apply the intercepted payments to reimburse the state for pay-
43 ments made by the state for the bonds until all obligations of the
44 municipality to the state arising from those payments, including
45 interest and penalties, are paid in full.
46 (b) The state has no obligation to the municipality or to any person or
47 entity to replace any moneys intercepted under the authority of this sub-
48 section.
49 (3) The municipality that issued bonds for which the state has made all
50 or part of a debt service payment shall:
51 (a) Reimburse all moneys drawn by the state treasurer on its behalf;
52 (b) Pay interest to the state on all moneys paid by the state from the
53 date the moneys are drawn to the date they are repaid at a rate not less
54 than the average prime rate for national money center banks plus five per-
55 cent (5%); and
10
1 (c) Pay all penalties required by this chapter.
2 (4) (a) The state treasurer shall establish the reimbursement interest
3 rate after considering the circumstances of any prior draws by the munici-
4 pality on the state, market interest and penalty rates, and the cost of
5 funds, if any, that were required to be borrowed by the state to make pay-
6 ments on the bonds.
7 (b) The state treasurer may, after considering the circumstances giving
8 rise to the failure of the municipality to make payment on its bonds in a
9 timely manner, impose on the municipality a penalty of not more than five
10 percent (5%) of the amount paid by the state for each instance in which a
11 payment by the state is made.
12 (5)(a)(i) If the state treasurer determines that amounts obtained under
13 this section will not reimburse the state in full within one (1) year
14 from the state's payment of a municipality's scheduled debt service
15 payment, the state treasurer shall pursue any legal action, including
16 mandamus, against the municipality to compel it to:
17 (A) Levy and provide tax revenues to pay debt service on its
18 bonds when due; and
19 (B) Meet its repayment obligations to the state.
20 (ii) In pursuing its rights under paragraph (a) of this subsection,
21 the state shall have the same substantive and procedural rights as
22 would a holder of the bonds of a municipality.
23 (b) The attorney general shall assist the state treasurer in these
24 duties.
25 (c) The municipality shall pay the attorney's fees, expenses and costs of
26 the state treasurer and the attorney general.
27 (6) (a) Except as provided in paragraph (c) of this subsection, any
28 municipality whose operating funds were intercepted under this section may
29 replace those funds from other municipal moneys or from property taxes,
30 subject to the limitations provided in this subsection.
31 (b) A municipality may use property taxes or other moneys to replace
32 intercepted funds only if the property taxes or other moneys were derived
33 from:
34 (i) Taxes originally levied to make the payment but which were not
35 timely received by the municipality;
36 (ii) Taxes from a supplemental levy made to make the missed payment
37 or to replace the intercepted moneys;
38 (iii) Moneys transferred from the undistributed reserve, if any, of
39 the municipality; or
40 (iv) Any other source of money on hand and legally available.
41 (c) Notwithstanding the provisions of paragraphs (a) and (b) of this sub-
42 section, a municipality may not replace operating funds intercepted by the
43 state with moneys collected and held to make payments on bonds if that
44 replacement would divert moneys from the payment of future debt service on
45 the bonds and increase the risk that the state would be called upon an
46 additional time to make payments on the bonds.
47 67-8726. COOPERATION BY GOVERNMENT AGENCIES. (1) All officers, depart-
48 ments, boards, agencies, divisions and commissions of the state shall render
49 to the authority services that are within the area of their respective govern-
50 mental functions and that may be requested by the authority, and shall comply
51 promptly with any reasonable request by the authority to conduct a study or
52 review regarding:
53 (a) The desirability, need, expense or financial feasibility of a public
54 project, purpose or improvement; or
11
1 (b) The financial or fiscal responsibility or ability of a municipality
2 making application to the authority for the purchase by the authority of
3 municipal bonds to be issued by that municipality.
4 (2) The cost and expense of a service requested by the authority, at the
5 request of the officer, department, board, agency, division or commission ren-
6 dering the service, shall be paid by the authority.
7 SECTION 2. That Section 63-316, Idaho Code, be, and the same is hereby
8 amended to read as follows:
9 63-316. ADJUSTMENT OF ASSESSED VALUE -- COMPLETION OF ASSESSMENT PROGRAM
10 BY STATE TAX COMMISSION -- PAYMENT OF COSTS. (1) Whenever the state tax com-
11 mission, after a hearing, determines that any county assessor or the county
12 commissioners in assessing property in the county subject to taxation have
13 failed to abide by, adhere to and conform with the laws of the state of Idaho
14 and the rules of the state tax commission in determining market value for
15 assessment purposes, the state tax commission shall order the county assessor
16 and county commissioners of such county to make the necessary changes or cor-
17 rections in such assessments and if the county assessor and the county commis-
18 sioners refuse or neglect to comply with such order, the state tax commission
19 is authorized to and shall forthwith adjust or change the property roll in
20 such county.
21 (2) In lieu of the hearings and actions permitted in subsection (1) of
22 this section, the state tax commission shall monitor each county's implementa-
23 tion of the continuing appraisal required in section 63-314, Idaho Code, and
24 may require each county to file such reports of its progress at implementation
25 of such continuing appraisals as the commission may find necessary. In the
26 event that the commission finds that any county is failing to meet the
27 requirements of section 63-314, Idaho Code, the commission may order that
28 county's indexing or appraisal or reappraisal programs be conducted under the
29 exclusive and complete control of the state tax commission and the results of
30 such programs shall be binding upon the county officers of the county for
31 which ordered. Payments for the actual cost of such programs shall be made
32 from the sales tax distribution created in section 63-3638, Idaho Code, and
33 the amount of such payments shall be withheld from the payments otherwise made
34 under the provisions of section 63-3638 (89)(c) and (89)(d), Idaho Code, to
35 the county for which indexing, appraisal or reappraisal has been ordered, and
36 this subsection shall constitute the necessary appropriation to accomplish
37 such payments, any other provision of law notwithstanding.
38 SECTION 3. That Section 63-3638, Idaho Code, be, and the same is hereby
39 amended to read as follows:
40 63-3638. SALES TAX -- DISTRIBUTION. All moneys collected under this chap-
41 ter, except as may otherwise be required in section 63-3203, Idaho Code, shall
42 be distributed by the tax commission as follows:
43 (1) An amount of money shall be distributed to the state refund account
44 sufficient to pay current refund claims. All refunds authorized under this
45 chapter by the commission shall be paid through the state refund account, and
46 those moneys are continuously appropriated.
47 (2) Five million dollars ($5,000,000) per year is continuously appropri-
48 ated and shall be distributed to the permanent building fund, provided by sec-
49 tion 57-1108, Idaho Code.
50 (3) Four million eight hundred thousand dollars ($4,800,000) per year is
51 continuously appropriated and shall be distributed to the water pollution con-
12
1 trol account established by section 39-3605, Idaho Code.
2 (4) An amount equal to the sum required to be certified by the chairman
3 of the Idaho housing and finance association to the state tax commission pur-
4 suant to section 67-6211, Idaho Code, in each year is continuously appropri-
5 ated and shall be paid to any capital reserve fund, established by the Idaho
6 housing and finance association pursuant to section 67-6211, Idaho Code. Such
7 amounts, if any, as may be appropriated hereunder to the capital reserve fund
8 of the Idaho housing and finance association shall be repaid for distribution
9 under the provisions of this section, subject to the provisions of section
10 67-6215, Idaho Code, by the Idaho housing and finance association, as soon as
11 possible, from any moneys available therefor and in excess of the amounts
12 which the association determines will keep it self-supporting.
13 (5) An amount equal to the sum required by the provisions of section
14 63-709, Idaho Code, is continuously appropriated and shall be paid as provided
15 by section 63-709, Idaho Code.
16 (6) An amount required by the provisions of chapter 53, title 33, Idaho
17 Code. of this section
18 (7) An amount required by the provisions of chapter 87, title 67, Idaho
19 Code.
20 (8) One dollar ($1.00) on each application for certificate of title or
21 initial application for registration of a motor vehicle, snowmobile, all-
22 terrain vehicle or other vehicle processed by the county assessor or the Idaho
23 transportation department excepting those applications in which any sales or
24 use taxes due have been previously collected by a retailer, shall be a fee for
25 the services of the assessor of the county or the Idaho transportation depart-
26 ment in collecting such taxes, and shall be paid into the current expense fund
27 of the county or state highway account established in section 40-702, Idaho
28 Code.
29 (89) Thirteen and three-quarters percent (13.75%) is continuously appro-
30 priated and shall be distributed to the revenue sharing account which is cre-
31 ated in the state treasury, and the moneys in the revenue sharing account will
32 be paid by the tax commission as follows:
33 (a) Twenty-eight and two-tenths percent (28.2%) shall be paid to the var-
34 ious cities as follows:
35 (i) Fifty percent (50%) of such amount shall be paid to the various
36 cities, and each city shall be entitled to an amount in the propor-
37 tion that the population of that city bears to the population of all
38 cities within the state; and
39 (ii) Fifty percent (50%) of such amount shall be paid to the various
40 cities, and each city shall be entitled to an amount in the propor-
41 tion that the preceding year's market value for assessment purposes
42 for that city bears to the preceding year's market value for assess-
43 ment purposes for all cities within the state.
44 (b) Twenty-eight and two-tenths percent (28.2%) shall be paid to the var-
45 ious counties as follows:
46 (i) One million three hundred twenty thousand dollars ($1,320,000)
47 shall be distributed one forty-fourth (1/44) to each of the various
48 counties; and
49 (ii) The balance of such amount shall be paid to the various coun-
50 ties, and each county shall be entitled to an amount in the propor-
51 tion that the population of that county bears to the population of
52 the state;
53 (c) Thirty-five and nine-tenths percent (35.9%) of the amount appropri-
54 ated in this subsection (89) shall be paid to the several counties for
55 distribution to the cities and counties as follows:
13
1 (i) Each city and county which received a payment under the provi-
2 sions of section 63-3638(e), Idaho Code, during the fourth quarter of
3 calendar year 1999, shall be entitled to a like amount during suc-
4 ceeding calendar quarters.
5 (ii) If the dollar amount of money available under this subsection
6 (89)(c) in any quarter does not equal the amount paid in the fourth
7 quarter of calendar year 1999, each city's and county's payment shall
8 be reduced proportionately.
9 (iii) If the dollar amount of money available under this subsection
10 (89)(c) in any quarter exceeds the amount paid in the fourth quarter
11 of calendar year 1999, each city and county shall be entitled to a
12 proportionately increased payment, but such increase shall not exceed
13 one hundred five percent (105%) of the total payment made in the
14 fourth quarter of calendar year 1999.
15 (iv) If the dollar amount of money available under this subsection
16 (89)(c) in any quarter exceeds one hundred five percent (105%) of the
17 total payment made in the fourth quarter of calendar year 1999, any
18 amount over and above such one hundred five percent (105%) shall be
19 paid fifty percent (50%) to the various cities in the proportion that
20 the population of the city bears to the population of all cities
21 within the state, and fifty percent (50%) to the various counties in
22 the proportion that the population of a county bears to the popula-
23 tion of the state; and
24 (d) Seven and seven-tenths percent (7.7%) of the amount appropriated in
25 this subsection (89) shall be paid to the several counties for distribu-
26 tion to special purpose taxing districts as follows:
27 (i) Each such district which received a payment under the provi-
28 sions of section 63-3638(e), Idaho Code, during the fourth quarter of
29 calendar year 1999, shall be entitled to a like amount during suc-
30 ceeding calendar quarters.
31 (ii) If the dollar amount of money available under this subsection
32 (89)(d) in any quarter exceeds the amount distributed under paragraph
33 (i) of this subsection (89)(d), each special purpose taxing district
34 shall be entitled to a share of the excess based on the proportion
35 each such district's current property tax budget bears to the sum of
36 the current property tax budgets of all such districts in the state.
37 The state tax commission shall calculate district current property
38 tax budgets to include any unrecovered foregone amounts as determined
39 under section 63-802(1)(e), Idaho Code. When a special purpose taxing
40 district is situated in more than one (1) county, the tax commission
41 shall determine the portion attributable to the special purpose tax-
42 ing district from each county in which it is situated.
43 (iii) If special purpose taxing districts are consolidated, the
44 resulting district is entitled to a base amount equal to the sum of
45 the base amounts which were received in the last calendar quarter by
46 each district prior to the consolidation.
47 (iv) If a special purpose taxing district is dissolved or
48 disincorporated, the state tax commission shall continuously distrib-
49 ute to the board of county commissioners an amount equal to the last
50 quarter's distribution prior to dissolution or disincorporation. The
51 board of county commissioners shall determine any redistribution of
52 moneys so received.
53 (v) Taxing districts formed after January 1, 2001, are not entitled
54 to a payment under the provisions of this subsection (89)(d).
55 (vi) For purposes of this subsection (89)(d), a special purpose tax-
14
1 ing district is any taxing district which is not a city, a county or
2 a school district.
3 (910) Any moneys remaining over and above those necessary to meet and
4 reserve for payments under other subsections of this section shall be distrib-
5 uted to the general account fund.
STATEMENT OF PURPOSE
RS 11143
This RS 11143 proposes the creation of a State of Idaho Bond Bank
Authority. This will allow municipalities, through normal bonding
practices, to achieve economies of scale which will reduce costs
to those paying principal, interest and other costs associated
with payment of said bonds. Municipalities shall include any
municipalities which receive sales tax funds from the state and
may include any county, city, municipal corporation, school
district, irrigation district, sewer district, water district,
highway district or others.
FISCAL IMPACT
Positive fiscal impact to taxpayers by lowering interest rates and
costs associated with municipal bonds including schools. Taxpayer
savings in 1999 would have been approximately $3, 996, 000.
The State Treasurer requests a one-time appropriation of $5,000 to
use for administrative set-up costs.
Contact
Name: Senator Sandy
Phone: 332 1305
STATEMENT OF PURPOSE/FISCAL NOTE S 117