KRS 154.20-035: Purposes for borrowing money or issuing bonds or notes -- Sale of

bonds or notes -- Terms -- Tax exemption.

(1) The authority may, upon approval of the board, borrow money and issue bonds or

notes in accordance with KRS 154.10 -035 and other pr ovisions of this chapter

appertaining, subject to KRS 42.420, for the following purposes:

(a) To provide sufficient funds for achieving the authority's purposes and

objectives, including but not limited to, amounts necessary to pay the costs of

acquiring p rojects or any part thereof; to make loans for the maintenance,

operation, expansion, or development of riverport facilities that are under the

authority of a developmental riverport authority established under KRS

65.520; to make loans for the cost of a p roject or any part thereof; to make

loans pursuant to KRS 154.10 -030(11) for an export -related transaction; to

make grants; to provide money to guarantee or insure loans, leases, bonds,

notes, or other indebtedness; to make working capital loans; for all o ther

expenditures of the authority incident to and necessary or convenient to carry

out the authority's purposes, objectives, and powers; or for any combination of

the foregoing;

(b) To refund bonds or notes of the authority issued under this chapter, by t he

issuance of new bonds, whether or not the bonds or notes to be refunded have

matured or are subject to prior redemption or are to be paid, redeemed, or

surrendered at the time of issuance of the refunding bonds or notes; and to

issue bonds or notes part ly to refund such bonds or notes and partly for any

other purpose provided for by this section; or

(c) To pay the costs of issuance of bonds or notes under this chapter; to pay

interest on bonds or notes becoming payable prior to the receipt of the first

revenues available for payment thereof as determined by the board; and to

establish, in full or in part, a reserve for the payment of the principal and

interest on the bonds or notes in such amount as shall be determined by the

board.

(2) The bonds and note s, including, but not limited to, commercial paper, shall be

authorized by resolution adopted by the authority, shall bear the date or dates, and

shall mature at the time or times, not exceeding fifty (50) years from the date of

issuance, as the resolution provides. The bonds and notes shall bear interest at the

rate or rates set, reset, or calculated from time to time as provided in the resolution.

The bonds and notes shall be in the denominations; be in the form, either coupon or

registered; carry the reg istration privileges; be transferable; be executed in the

manner; be payable in the medium of payment, at the place or places; and be

subject to the terms of prior redemption at the option of the authority or the holders

thereof as the resolution or resolu tions provide. The bonds and notes of the

authority may be sold at public or private, negotiated sale, at the price or prices the

authority determines. Bonds and notes may be sold at a discount.

(3) Bonds or notes may be:

(a) Made the subject of a put or a greement to repurchase by the authority or

others;

(b) Secured by a letter of credit or by any other collateral which the resolution

may authorize;

(c) Resold by the authority, once acquired by the authority, pursuant to any put or

repurchase agreement wit hout the acquisition being considered the

extinguishment of the bond or note.

(4) The authority may authorize its chairman or other officer to, by order:

(a) Sell and deliver, and receive payment for notes or bonds;

(b) Refund notes or bonds by the delivery of new notes or bonds, whether or not

the notes or bonds to be refunded have matured, are subject to prior

redemption, or are to be paid, redeemed, or surre ndered at the time of the

issuance of refunding bonds or notes;

(c) Deliver notes or bonds, partly to refund notes or bonds and partly for any

other authorized purposes;

(d) Buy notes or bonds so issued at not more than the face value of the notes or

bonds; or

(e) Approve interest rates or methods for fixing interest rates, prices, discounts,

maturities, principal amounts, denominations, dates of issuance, interest

payment dates, redemption rights at the option of the authority or the holder,

the place of d elivery and payment, and other matters and procedures

necessary to complete the transactions authorized.

(5) Except as provided by the authority, every issue of its notes or bonds shall be

general obligations of the authority payable out of revenues, properties, or money of

the authority, subject only to agreements with the holders of particular notes or

bonds pledging particular receipts, revenues, properties, or money as security

therefor.

(6) The notes or bonds of the authority shall be and are hereby ma de negotiable

instruments within the meaning of and for all purposes of the Uniform Commercial

Code, subject only to the provisions of the notes or bonds for registration.

(7) A resolution authorizing notes or bonds may contain any or all of the following

covenants which shall be a part of the contract with the holders thereof:

(a) A pledge of all or a part of the fees, charges, and revenues made or received

by the authority, or all or a part of the money received in payment of lease

rentals, or loans and i nterest thereon, and other money received or to be

received to secure the payment of the notes or bonds or an issue thereof,

subject to agreements with bondholders or noteholders as may then exist;

(b) A pledge of all or a part of the assets of the authori ty, including leases, or

notes or mortgages and obligations securing the same to secure the payment

of the notes or bonds or of an issue of notes or bonds, subject to agreements

with noteholders or bondholders as may then exist;

(c) A pledge of a loan, gra nt, or contribution from the federal, state, or

municipality, or source in aid of a project as provided for in this chapter;

(d) A provision as to the use and disposition of the revenues and income from

leases, or from loans, notes, and mortgages owned by the authority;

(e) A provision as to the establishment and setting aside of reserves or sinking

funds and the regulation and disposition thereof subject to this chapter;

(f) Limitations on the purpose to which the proceeds of sale of the notes or bonds

may be applied and limitations on pledging those proceeds to secure the

payment of other bonds or notes;

(g) Authority for and limitations on the issuance of additional notes or bonds for

the purposes provided for in the resolution and the terms upon which

additional notes or bonds may be issued and secured;

(h) A provision for the procedure, if any, by which the terms of a contract with

noteholders or bondholders may be amended or abrogated, the number of

noteholders or bondholders who are required to consent thereto, and the

manner in which the consent may be given;

(i) Vesting in a trustee, or a secured party, such property, income, revenues,

receipts, rights, remedies, powers, and duties in trust or otherwise as the

authority may determine necessary to appr opriate to adequately secure and

protect noteholders and bondholders or to limit or abrogate the rights of the

noteholders and bondholders. A trust agreement may be executed by the

authority with any trustee who may be located inside or outside this state to

accomplish any of the foregoing;

(j) Providing for the payment of maintenance and repair costs of a project;

(k) Establishing the insurance to be carried on a project and the use and

disposition of insurance money and condemnation awards;

(l) Establishing the terms, conditions, and agreements upon which the holder of

the bonds, or a portion thereof, shall be entitled to the appointment of a

receiver by the Circuit Court. A receiver may enter and take possession of the

project and maintain it or lease or sell it for cash or on an installment sales

contract and prescribe rentals and payments therefor and collect, receive, and

apply all income and revenues thereafter arising in the same manner and to

the same extent as the authority; and

(m) Providing for an y other matters, of like or different character, which in any

way affect the security or protection of the notes or bonds.

(8) A pledge made by the authority shall be valid and binding from the time the pledge

is made. The money or property pledged and rec eived by the authority shall

immediately be subject to the lien of the pledge without a physical delivery or

further act. The lien of the pledge shall be valid and binding as against parties

having claims of any kind in tort, contract, or otherwise against the authority and

shall be valid and binding against the transfer of the money or property pledged,

irrespective of whether the parties have notice. It shall not be necessary to record

the resolution, the trust agreement, or any other instrument by which a pledge is

created.

(9) Neither the members of the authority nor any person executing the notes or bonds

shall be liable personally on the notes or bonds or be subject to personal liability or

accountability by reason of the issuance thereof.

(10) The state shall not be liable for any financial obligations of the authority nor shall

any such obligations or bonds be considered a debt of the state. The obligations

shall contain on the face thereof a statement indicating this fact.

(11) The notes and bonds of the authority shall be securities in which the public officers

and bodies of this state and municipalities and municipal subdivisions, insurance

companies, associations, and other persons carrying on an insurance business,

banks, trust companies, savings banks and savings associations, savings and loan

associations, investment companies, and administrators, guardians, executors,

trustees, and other fiduciaries, and all other persons who are authorized to invest in

bonds or other obligations of the state, may properly and legally invest funds.

(12) The property of the authority and its income and operation shall be exempt from all

taxation by this state or any of its political subdivisions. All bonds and notes of the

authority, the interest thereon, and thei r transfer shall be exempt from all taxation

by this state or any of its political subdivisions, except for estate, gift, and

inheritance taxes, notwithstanding that interest on bonds or notes of the authority

may be or become subject to federal income taxation as a result of legislative action

by the federal government. The state covenants with the purchasers and all

subsequent holders and transferees of notes and bonds issued by the authority under

this chapter, in consideration of the acceptance of and p ayment for the notes and

bonds, that the notes and bonds of the authority, issued pursuant to this chapter, the

interest thereon, the transfer thereof, and all its fees, charges, gifts, grants, revenues,

receipts, and other money received or to be received and pledged to pay or secure

the payment of the notes or bonds shall at all times be free and exempt from all

state or local taxation provided by the laws of this state, except for estate, gift, and

inheritance taxes.