17-5-805. Bond, grant, or revenue anticipation notes -- when issued -- payment of principal and interest. (1) When the board has been authorized to issue and sell bonds under this part, it may, pending the issuance of the bonds, issue in the name of the state temporary notes in anticipation of:

(a) the money to be derived from the sale of the bonds;

(b) the money to be received from the federal government for the program for which bonds may be issued; or

(c) other money to be received as revenue for the specified program.

(2) The notes must be designated as "bond anticipation notes", "grant anticipation notes", or "revenue anticipation notes". The proceeds of the sale of the notes may be used only for the purposes for which the proceeds of the bonds, grants, or revenue could be used, including costs of issuance. If, prior to the issuance of the bonds or receipt of the proceeds of the grants or revenue, it becomes necessary to pay or redeem outstanding notes, additional notes may be issued to redeem the outstanding notes. No renewal of any note may be issued after the sale of bonds or receipt of the proceeds of the grants or revenue in anticipation of which the original notes were issued.

(3) Bond, grant, or revenue anticipation notes maturing not more than 3 years after the date of issue may be issued from time to time as the proceeds are needed. The notes must be authorized by the board and must have terms and details that may be provided by resolution of the board. However, each resolution of the board authorizing notes must:

(a) describe the need for the proceeds of the notes to be issued; and

(b) specify:

(i) the principal amount of the notes or maximum principal amount of the notes that may be outstanding at any one time;

(ii) the rate or rates of interest, the maximum rate of interest, or the interest rate formula (to be determined in the manner specified in the resolution authorizing the notes) to be incurred through the issuance of the notes; and

(iii) the maturity date or maximum maturity date of the notes.

(4) Subject to the limitations contained in this section and the standards and limitations prescribed in the authorizing resolution, the board in its discretion may provide for the notes described in subsection (3) to be issued and sold, in whole or in part, from time to time, and may delegate to the state treasurer the power to determine the time or times of sale, the manner of sale, the amounts, the maturities, the rate or rates of interest, and other terms and details of the notes that may be considered appropriate by the board or the state treasurer in the event of a delegation. The board in its discretion, but subject to the limitations contained in this section, may also provide in the resolution authorizing the issuance of notes for:

(a) the employment of one or more persons or firms to assist the board in the sale of the notes;

(b) the appointment of one or more banks or trust companies, either in or outside of the state, as depository for safekeeping and as agent for the delivery and payment of the notes;

(c) the refunding of the notes, from time to time, without further action by the board, unless the board revokes the authority to refund; and

(d) such other terms and conditions that the board may consider appropriate.

(5) In connection with the issuance and sale of notes as provided in this section, the board may arrange for lines of credit with any bank, firm, or person for the purpose of providing an additional source of repayment for notes issued pursuant to this section. Amounts drawn on lines of credit may be evidenced by negotiable or nonnegotiable notes or other evidences of indebtedness, containing terms and conditions that the board may authorize in the resolution approving them.

History: En. Sec. 5, Ch. 184, L. 1983; amd. Secs. 1, 6, Ch. 323, L. 2005; amd. Sec. 5, Ch. 374, L. 2005.