HB1600: HB1600 City of McDonough Public Facilities Authority Act; enact

26 LC 47 4142 House Bill 1600 By: Representative Santos of the 117th A BILL TO BE ENTITLED AN ACT To create the City of McDonough Public Facilities Authority; to provide that the authority1 is a body corporate and politic and an instrumentality of the State of Georgia; to authorize2 the authority to acquire, construct, equip, maintain, and operate certain projects, including3 buildings and facilities for use by the City of McDonough for its governmental, proprietary,4 and administrative functions; to provide for members of the aut hority and their terms,5 organization, and reimbursement; to provide for vacancies; to p rovide for definitions; to6 confer powers and impose duties on the authority; to provide for limitations to the authority;7 to authorize the authority to enter into contracts and leases p ertaining to uses of such8 facilities, which contracts and leases may obligate the lessees to make payment for the use9 of the facilities for the term thereof and to pledge for that p urpose money derived from10 taxation; to provide that no debt of the City of McDonough or the State of Georgia shall be11 incurred by the exercise of any of the powers granted; to authorize the issuance of revenue12 bonds of the authority payable from the revenues, rents, and earnings and other functions of13 the authority; to authorize the collecting and pledging of such revenues, rents, and earnings14 for the payment of such bonds; to authorize the adoption of resolutions and the execution of15 trust agreements and indentures to secure the payment of such bonds and to define the rights16 of the holders of such bonds; to provide for a sinking fund; to make the bonds of the17 authority exempt from taxation; to authorize the issuance of refunding bonds; to provide for18 H. B. 1600 - 1 - 26 LC 47 4142 the validation of such bonds and to fix the venue for jurisdict ion of actions relating to any19 provision of this Act; to provide for immunity and exemption fr om liability for torts and20 negligence; to provide that the property of the authority shall not be subject to levy and sale;21 to provide that certain moneys are trust funds; to provide that this Act shall be liberally22 construed; to define the scope of the authority's operation; to provide for disposition of23 property upon dissolution of the authority; to provide for severability; to provide for a short24 title; to provide for related matters; to repeal conflicting laws; and for other purposes.25 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:26 SECTION 1.27 Short title.28 This Act shall be known and may be cited as the "City of McDono ugh Public Facilities29 Authority Act."30 SECTION 2.31 City of McDonough Public Facilities Authority.32 There is created a public body corporate and politic to be known as the City of McDonough33 Public Facilities Authority, which shall be an instrumentality and a public corporation of the34 State of Georgia, the purpose of which shall be to acquire, con struct, equip, maintain, and35 operate certain projects for use by the City of McDonough for its governmental, proprietary,36 public, and administrative functions. The authority shall not be a state institution or a37 department or agency of the state, but shall be an instrumentality of the state, a mere creation38 of the state, being a distinct corporate entity and exempt from the provisions of Article 2 of39 Chapter 17 of Title 50 of the O.C.G.A., the "Georgia State Fina ncing and Investment40 H. B. 1600 - 2 - 26 LC 47 4142 Commission Act." The authority shall have its principal office in the City of McDonough,41 and its legal situs or residence for the purposes of this Act shall be the City of McDonough.42 SECTION 3.43 Membership.44 The authority shall consist of seven members who shall be eligible to succeed themselves and45 who shall be appointed by the governing authority of the City of McDonough. The members46 of the city council may be appointed as members of the authorit y. Any member of the47 authority who is a member of said governing authority shall ser v e f o r a t e r m o f o f f i c e48 concurrent with such person's term of office as a member of said governing authority. Each49 member of the authority who is not a member of said governing authority shall serve for a50 term of office of three years, except that the initial terms of office of those members first51 appointed to the authority shall be specified at the time of appointment to be one, two, and,52 if no such member is a member of the governing authority, three years. After such initial53 terms, those members who are not members of said governing authority shall serve for terms54 of office of three years each. To be eligible for appointment as a member of the authority,55 a person shall be at least 21 years of age, shall be a resident of the city for at least two years56 prior to the date of his or her appointment, and shall not have been convicted of a felony. 57 Members of the authority shall serve for the terms of office so specified and until the58 appointment and qualification of their respective successors. Vacancies on the authority59 shall be filled by said governing authority for the remainder of the unexpired term and until60 the appointment and qualification of a successor. Immediately after their appointment, the61 members of the authority shall enter upon their duties. The au thority shall elect one of its62 members as chairperson and one as vice chairperson. The secretary-treasurer of the authority63 shall be appointed by the authority and need not be a member of the authority. Four64 members of the authority shall constitute a quorum and no vacan cy on the authority shall65 H. B. 1600 - 3 - 26 LC 47 4142 impair the right of the quorum to exercise all the rights and p erform all the duties of the66 authority and, in every instance, a majority vote of a quorum shall authorize any legal act of67 the authority, incl uding all things necessary to authorize and issue revenue bonds. The68 members of the authority shall receive no compensation for thei r services but may be69 reimbursed by the authority for the actual expenses necessarily incurred in the performance70 of their duties. The authority shall make rules and regulations for its own government and71 shall have perpetual existence.72 SECTION 4.73 Definitions.74 As used in this Act, the following words and terms shall have the following meanings unless75 a different meaning clearly appears from the context:76 (1) "Authority" shall mean the City of McDonough Public Facilities Authority created77 by this Act.78 (2) "City" shall mean the City of McDonough.79 (3) "Cost of project" shall include the cost of lands, buildings, improvements, machinery,80 equipment, property, easements, rights, franchises, material, labor, services acquired or81 contracted for, plans and specification, and financing charges; construction costs; interest82 prior to and during construction; architectural, accounting, en gineering, inspection,83 administrative, fiscal, and legal expenses; expenses incident to determining the feasibility84 or practicability of the project; and expenses incident to the acquiring, constructing,85 equipping, and operating of any project or any part thereof and to the placing of the same86 in operation.87 (4) "Project" shall mean:88 (A) All buildings, facilities, and equipment necessary or conv enient for the efficient89 operation of:90 H. B. 1600 - 4 - 26 LC 47 4142 (i) The city or any department, agency, division, or commission thereof;91 (ii) The county school district; and92 (iii) The county or any department, agency, division, or commission thereof; and93 (B) Any "undertaking" permitted by Article 3 of Chapter 82 of Title 36 of the94 O.C.G.A., the "Revenue Bond Law," within the city limits; provided, however, that all95 projects for the county school district or the county must be located in the city limits.96 (5) "Revenue bonds" shall mean revenue bonds issued under the provisions of Article 397 of Chapter 82 of Title 36 of the O.C.G.A., the "Revenue Bond La w," or under the98 provisions of this Act. The obligations authorized under this Act may be issued by the99 authority in the manner authorized under the "Revenue Bond Law."100 SECTION 5.101 Powers.102 The authority shall have all the powers necessary or convenient to carry out and effectuate103 the purposes and provisions of this Act, including, but without limiting the generality of the104 foregoing, the power:105 (1) To sue and be sued;106 (2) To adopt and alter a corporate seal;107 (3) To make and execute with public and private persons and co rporations contracts,108 trusts, leases, rental agreements, and other instruments relati ng to its projects and in109 furtherance of the purposes of the authority, including contrac ts for the constructing,110 renting, and leasing of its projects for the use of any county or municipality in this state;111 (4) To acquire in its own name by purchase on such terms and c onditions and in such112 manner as it may deem proper or by gift, grant, lease, or other wise, real and personal113 property necessary or convenient for its corporate purposes, or rights and easements114 therein, and to use the same so long as its corporate existence shall continue and to lease115 H. B. 1600 - 5 - 26 LC 47 4142 or make contracts with respect to the use of or disposition of the same in any manner it116 deems to the best advantage of the authority. Title to any such property shall be held by117 the authority exclusively for the benefit of the public;118 (5) To improve, extend, add to, reconstruct, renovate, or remo del any project or part119 thereof already acquired;120 (6) To pledge or assign any revenues, income, rent, charges, a nd fees received by the121 authority;122 (7) To appoint and select agents, engineers, architects, attor neys, fiscal agents,123 accountants, and employees and to provide for their compensation and duties;124 (8) To construct, reconstruct, acquire, own, alter, repair, re model, maintain, extend,125 improve, operate, manage, and equip projects located on land ow ned or leased by the126 authority;127 (9) To receive, accept, and use any contributions, loans, or grants by persons, firms, or128 corporations, including the State of Georgia and the United States of America, and any129 other contributions;130 (10) To pay all or part of the costs of any project from the proceeds of revenue bonds of131 the authority or from other lawful sources available to it;132 (11) To prescribe rules and regulations for the operation of and to exercise police powers133 over the projects managed or operated by the authority;134 (12) To accept, receive, and administer gifts, grants, loans a nd devises of money,135 material, and property of any kind, including loans and grants from the State of Georgia136 or the United States of America or any agency or instrumentalit y thereof, upon such137 terms and conditions as the State of Georgia or the United Stat es of America or such138 agency or instrumentality may impose;139 (13) To sell, lease, exchange, transfer, assign, pledge, mortg age, dispose of, grant in140 trust, or grant options for any real or personal property or interest therein in furtherance141 of the purposes of the authority;142 H. B. 1600 - 6 - 26 LC 47 4142 (14) As security for repayment of authority obligations, to pl edge, mortgage, convey,143 assign, hypothecate, or ot herwise encumber any property, real o r personal, of such144 authority and to execute any trust agreement, indenture, or security agreement containing145 any provisions not in conflict with law, which trust agreement, indenture, or security146 agreement may provide for foreclosure or forced sale of any pro perty of the authority147 upon default, on such obligations, either in payment of princip al or interest or in the148 performance of any term or condition, as are contained in such agreement or indenture;149 (15) To borrow money for any of its corporate purposes, to issue revenue bonds payable150 solely from funds pledged for that purpose, and to provide for the payment of the same151 and for the rights of the holders thereof;152 (16) To exercise all powers usually possessed by private corporations performing similar153 functions which are not in conflict with the Constitution and laws of this state; and154 (17) Pursuant to proper resolution of the authority, to issue revenue bonds payable from155 the rents and revenues of the authority and its projects, which bonds may be issued in156 either fully negotiable coupon form, in which event they shall have all the qualities and157 incidents of negotiable instruments under the laws of the State of Georgia, or which158 bonds may be issued in whole or in part in nonnegotiable fully registered form without159 coupons, payable to a designated payee or to the registered assigns of the payee with such160 conversion privileges as the authority may provide, for the purpose of paying all or any161 part of the cost associated with the projects authorized by the authority, including the cost162 of constructing, reconstructing, equipping, extending, adding t o, or improving such163 projects or for the purpose of refunding, as provided in this Act, any such bonds of the164 authority theretofore issued. If the proceeds of the bonds of any issue shall exceed the165 amount required for the purpose for which such bonds were issued, the surplus shall be166 paid into the fund provided for the payment of principal and interest on such bonds. All167 such revenue bonds shall be issued and validated under and in a ccordance with the168 procedures of Article 3 of Chapter 82 of Title 36 of the O.C.G. A., the "Revenue Bond169 H. B. 1600 - 7 - 26 LC 47 4142 Law," and in accordance with all terms and provisions thereof n ot in conflict with this170 Act, and in accordance with Code Section 50-17-1 of the O.C.G.A ., relating to use of171 facsimile signatures on public securities, and, as security for the payment of any revenue172 bonds so authorized, any rents and revenue of the authority may be pledged and assigned. 173 Such bonds shall be declared to be issued for an essential publ ic and governmental174 purpose, and such bonds and all income therefrom shall be exemp t from all taxation175 within the State of Georgia. For the purpose of the exemption from taxation of such176 bonds and the income therefrom, the authority shall be deemed t o be a political177 subdivision of the State of Georgia.178 SECTION 6.179 Credit not pledged and debt not created by bonds.180 Revenue bonds issued under the provisions of this Act shall not constitute a debt or a pledge181 of the faith and credit of the State of Georgia or City of McDonough, but such bonds shall182 be payable from the rentals, revenue, earnings, and funds of the authority as provided in the183 resolution or trust agreement or indenture authorizing the issuance and securing the payment184 of such bonds. The issuance of such bonds shall not directly, indirectly, or contingently185 obligate the state or said municipality to levy or pledge any form of taxation for the payment186 thereof. No holder of any bond or receiver or trustee in connection therewith shall have the187 right to enforce the payment thereof against any property of the state or of said municipality,188 nor shall any such bond constitute a charge, lien, or encumbrance, legal or equitable, upon189 any such property. All such bonds shall contain on their face a recital setting forth190 substantially the foregoing provisions of this section.191 H. B. 1600 - 8 - 26 LC 47 4142 SECTION 7.192 Trust agreement.193 In the discretion of the authority, any issue of revenue bonds may be secured by an194 agreement or indenture made by the authority with a corporate t rustee, which may be any195 trust company or bank having the powers of a trust company within or without the State of196 Georgia. Such trust agreement or indenture may pledge and assi gn rents, fees, charges,197 revenues, and earnings to be received by the authority. The re solution providing for the198 issuance of revenue bonds and such trust agreement or indenture may contain provisions for199 protecting and enforcing the rights and remedies of the bondholders, including the right of200 appointment of a receiver upon default of the payment of any principal or interest obligation201 and the right of any receiver or trustee to enforce collection of any rents, fees, charges, or202 revenues for use of the project or projects necessary to pay al l costs of operation and all203 reserves provided for, all principal and interest on all bonds of the issue, all costs of204 collection, and all other costs reasonably necessary to accomplish the collection of such sums205 in the event of any default of the authority. Such resolution and such trust agreement or206 indenture may include covenants setting forth the duties of the authority in relation to the207 acquisition of property for and the construction of the project and to the custody,208 safeguarding, and application of all funds and covenants provid ing for the operation,209 maintenance, repair, and insurance of the project or projects a nd may contain provisions210 concerning the conditions, if any, upon which additional revenue bonds may be issued. Such211 trust agreement or indenture may set forth the rights and remedies of the bondholders and of212 the trustee and may restrict the individual right of action of bondholders as is customary in213 securing bonds and debentures of corporations and may contain such other provisions as the214 authority may deem reasonable and proper for the security of the bondholders. All expenses215 incurred in carrying out such trust may be treated as a part of the cost of maintenance,216 operation, and repair of the project affected by such trust.217 H. B. 1600 - 9 - 26 LC 47 4142 SECTION 8.218 Refunding bonds.219 The authority is authorized to provide by resolution for the issuance of revenue bonds of the220 authority for the purpose of calling, refunding, or refinancing any revenue bonds issued221 under the provisions of this Act and then outstanding and to include in the amount of such222 refunding bonds all interest and any call premiums that may be required for the redemption223 and refunding of such outstanding bonds.224 SECTION 9.225 Venue of actions, jurisdiction.226 Any action to protect or enforce any rights under the provision s of this Act or any action227 against the authority brought in the courts of the State of Geo rgia shall be brought in the228 Superior Court of Henry County, Georgia, and any action pertain ing to validation of any229 bonds issued under the provisions of this Act shall be brought in said court, which shall have230 exclusive, original jurisdiction of such actions.231 SECTION 10.232 Revenue bond validation.233 The petition for validation of all revenue bonds of the authority shall be brought against the234 authority, and any contracting party whose obligation is pledged as security for the payment235 of the bonds sought to be validated, as defendants, and the def endants shall be required to236 show cause, if any exists, why such contract or contracts and the terms and conditions thereof237 shall not be adjudicated to be in all respects valid and binding upon such contracting parties.238 It shall be incumbent upon such defendants to defend against adjudication of the validity and239 H. B. 1600 - 10 - 26 LC 47 4142 binding effect of such contract or contracts or be forever boun d thereby. Notice of such240 proceedings shall be included in the notice of the validation hearing required to be issued and241 published by the clerk of the Superior Court of Henry County in which court such validation242 proceedings shall be initiated.243 SECTION 11.244 Interest of bondholders protected.245 While any of the bonds issued by the authority remain outstandi ng, the powers, duties, or246 existence of the authority or of its officers, employees, or ag ents shall not be diminished,247 impaired, or affected in any manner that will affect adversely the interest and rights of the248 holders of such bonds. The provisions of this Act shall be for the benefit of the authority and249 the holders of any such bonds and, upon the issuance of bonds under the provisions of this250 Act, shall constitute a contract with the holders of such bonds.251 SECTION 12.252 Revenues, earnings, rents, and charges; use.253 (a) For the purpose of earning sufficient revenue to make poss ible the financing of the254 construction of the project or projects of the authority with revenue bonds, the authority is255 authorized and empowered to fix, revise, and collect rents, fees, and charges on each project256 which it shall cause to be acquired or constructed. Such rents, fees, or charges to be paid for257 the use of such project or projects shall be so fixed and adjus ted so as to provide a fund258 sufficient with other revenue, if any, of such project or projects or of the authority:259 (1) To pay the cost of operating, maintaining, and repairing t he project or projects,260 including reserves for insurance and extraordinary repairs and other reserves required by261 H. B. 1600 - 11 - 26 LC 47 4142 the resolution or trust agreement or indenture pertaining to such bonds and the issuance262 thereof, unless such cost shall be otherwise provided for;263 (2) To pay the principal of and interest on such revenue bonds as the same shall become264 due, including call premiums, if any, the proceeds of which shall have been or shall be265 used to pay the cost of such project or projects;266 (3) To comply with any sinking fund requirements contained in the resolution or trust267 agreement or indenture pertaining to the issuance of and security for such bonds;268 (4) To perform fully all provisions of such resolution or trus t agreement or indenture269 relating to the issuance of or security for such bonds to the payment of which such rent270 is pledged;271 (5) To accumulate any excess income which may be required by the purchasers of such272 bonds or may be dictated by the requirements of such resolution or trust agreement or273 indenture, or which may be required for achieving ready marketability of and low interest274 rates on such bonds; and275 (6) To pay any expenses in connection with such bond issue or of such project,276 including, but not limited to, trustees', attorney's, and fiscal agents' fees.277 (b) Such rent shall be payable at such intervals as may be agreed upon and set forth in the278 rental contract or lease providing therefor, and any such contract or lease may provide for the279 commencement of rent payments to the authority prior to the completion of the project by280 the authority and may provide for the payment of rent during such times as such project may281 be partially or wholly untenantable.282 (c) Such rental contract or lease may obligate the tenants or lessees to operate, maintain, and283 keep in good repair, including complete reconstruction, if nece ssary, the rented or leased284 premises and projects, regardless of the cause of the necessity of such maintenance, repair,285 or reconstruction.286 (d) Such rental contract or lease may obligate the tenants or lessees to indemnify and save287 harmless the authority from any and all damage to persons and property occurring on or by288 H. B. 1600 - 12 - 26 LC 47 4142 reason of the leased property or improvements thereon and to undertake, at the expense of289 the tenants or lessees, the defense of any action brought again st the authority by reason of290 injury or damages to persons or property occurring on or by reason of the leased premises.291 (e) In the event of any failure or refusal on the part of the tenants or lessees to perform292 punctually any covena nt or obligation contained in any such ren tal contract or lease, the293 authority may enforce performance by any legal or equitable process against the tenants or294 lessees.295 (f) The authority shall be permitted to assign any rent payable to it, pursuant to such rental296 contract or lease, to a trustee or paying agent as may be requi red by the terms of the297 resolution or trust agreement or indenture relating to the issu ance of and security for such298 bonds.299 (g) The use and disposition of the authority's revenue shall be subject to the provisions of300 the resolution authorizing the issuance of such bonds or of the trust agreement or indenture,301 if any, securing the same.302 SECTION 13.303 Sinking fund.304 The revenue, rents, and earnings derived from any particular project or projects and any and305 all revenue, rents, and earnings received by the authority, reg ardless of whether such306 revenue, rents, and earnings were produced by a particular project for which bonds have been307 issued, unless otherwise pledged, may be pledged by the authori ty to payment of the308 principal of and interest on revenue bonds of the authority as may be provided in any309 resolution authorizing the issuance of such bonds or in any trust instrument pertaining to such310 bonds, and such funds so pledged, from whatever source received , may include funds311 received from one or more or all sources and may be set aside a t regular intervals into312 sinking funds for which provision may be made in any such resol ution or trust instrument313 H. B. 1600 - 13 - 26 LC 47 4142 and which may be pledged to and charged with the payment of the interest upon such314 revenue bonds as such interest shall become due, the principal of the bonds as the same shall315 mature, the necessary charges of any trustee or paying agent for paying such principal and316 interest, and any premium upon bonds retired by call or purchase, and the use and disposition317 of any sinking fund may be subject to such regulation as may be provided for in the318 resolution authorizing the issuance of the bonds or in the trus t instrument securing the319 payment of the same.320 SECTION 14.321 Taxation status.322 The exercise of the powers conferred upon the authority under t his Act shall constitute an323 essential governmental function for a public purpose, and to the maximum extent permitted324 by general law, the authority shall be required to pay no taxes or assessments upon any of the325 property acquired by it or under its jurisdiction, control, possession, or supervision or upon326 its activities in the operation and maintenance of property acq uired by it or of buildings327 erected or acquired by it or any fees, rents, or other charges for the use of such property or328 buildings or other income received by the authority. This sect ion shall not include an329 exemption from sales and use tax on property purchased by or for the use of the authority.330 SECTION 15.331 Immunity from tort actions.332 The authority shall have the same immunity and exemption from l iability for torts and333 negligence as a Georgia county, and the officers, agents, and e mployees of the authority,334 when in performance of work of the authority, shall have the same immunity and exemption335 from liability for torts and negligence as officers, agents, and employees of a Georgia county. 336 H. B. 1600 - 14 - 26 LC 47 4142 The authority may be sued the same as private corporations on any contractual obligation of337 the authority.338 SECTION 16.339 Property not subject to levy and sale.340 The property of the authority shall not be subject to levy and sale under legal process.341 SECTION 17.342 Trust funds.343 All funds received pursuant to the authority of Section 12 of this Act, whether as proceeds344 from the sale of revenue bonds or as revenue, rents, fees, char ges, or other earnings or as345 grants, gifts, or other contributions, shall be deemed to be trust funds to be held and applied346 by the authority, solely as provided in this Act. The bondhold ers entitled to receive the347 benefits of such funds shall have a lien on all such funds unti l the same are applied as348 provided for in any such resolution or trust instrument of the authority.349 SECTION 18.350 Construction.351 This Act and any other law enacted with reference to the author ity shall be liberally352 construed for the accomplishment of the purposes of the authority.353 H. B. 1600 - 15 - 26 LC 47 4142 SECTION 19.354 Scope of operations.355 The projects of the authority's operation shall be located in the territory embraced within the356 jurisdictional limits of the City of McDonough as the same now or may hereafter exist.357 SECTION 20.358 Conveyance of property upon dissolution.359 Should the authority for any reason be dissolved after full pay ment of all bonded360 indebtedness incurred under this Act, both as to principal and interest, title to all property of361 any kind and nature, real and personal, held by the authority at the time of such dissolution362 shall be conveyed to the City of McDonough, or title to any such property may be conveyed363 prior to such dissolution in accordance with provisions which may be made therefor in any364 resolution or trust instrument relating to such property, subject to any liens, leases, or other365 encumbrances outstanding against or in respect to said property at the time of such366 conveyance.367 SECTION 21.368 Severability; effect of partial invalidity of Act.369 Should any sentence, clause, phrase, or part of this Act be dec lared for any reason to be370 unconstitutional or invalid, the same shall not affect such remainder of this Act or any part371 hereof, other than the part so held to be invalid, but the remaining provisions of this Act shall372 remain in full force and effect, and it is the express intentio n of this Act to enact each373 provision of this Act independently of any other provision hereof.374 H. B. 1600 - 16 - 26 LC 47 4142 SECTION 22.375 General repealer.376 All laws and parts of laws in conflict with this Act are repealed.377 H. B. 1600 - 17 -