§ 19-9-301 - Delivery and deposit in trust.
19-9-301. Delivery and deposit in trust.
(a) When refunding bonds are issued by the state, any county, municipality, school district, state-supported educational institution, improvement district of any kind, agency, or political subdivision, which may be called "issuing authorities", the bonds may either be sold or delivered in exchange for the outstanding obligations being refunded. If sold, the proceeds may be either applied to the payment of the outstanding obligations or deposited into trust for the retirement of the obligations, either at maturity or upon any authorized redemption date as specified in the ordinance, resolution, order, or other instrument authorizing the issuance of the refunding bonds.
(b) The bonds may be issued in the principal amount necessary to pay the principal of, interest on, redemption premiums, if any, trustee's and paying agent's fees, and charges in connection with the obligations being refunded to maturity or to the redemption date specified in the instrument authorizing the issuance of the refunding bonds, these items to be called "total debt service requirements of the obligations being refunded"; to pay expenses incidental thereto; and to pay the expenses of authorizing and issuing the refunding bonds.
(c) (1) The bonds may be delivered when moneys or investment securities or a combination thereof, sufficient to meet, as and when due, the total debt service requirements of the obligations being refunded, have been irrevocably deposited into trust with a bank or trust company organized under the laws of the United States or any state thereof. This bank or trust company shall be qualified to receive trust funds pursuant to a trust agreement requiring the bank or trust company to apply the trust funds to the payment, as and when due, of total debt service requirements of the obligations being refunded. If the bank or trust company is not the paying agent for the obligations being refunded, the trust agreement shall require it to pay over trust moneys to the paying agent as and when required for the timely meeting of total debt service requirements of the obligations being refunded.
(2) "Investment securities" shall mean direct obligations of, or obligations the principal of and interest on which are fully guaranteed by, the United States, maturing and bearing interest at such times and in such amounts as, together with uninvested trust moneys, will make available sufficient moneys to meet, as and when due, total debt service requirements of the obligations being refunded. In determining the sufficiency of the trust deposit, there shall be considered the principal amount of such investment securities and the interest to be earned on them.