Delaware General Assembly

CHAPTER 292

FORMERLY

HOUSE BILL NO. 498

AS AMENDED BY HOUSE AMENDMENTS NO. 1 AND 3

AN ACT TO AMEND TITLE 16, DELAWARE CODE, BY ADDING A NEW PART IX PROVIDING FOR A DELAWARE HEALTH FACILITIES AUTHORITY.

Be it enacted by the General Assembly of the State of Delaware:

Section 1. Amend Title 16, Delaware Code, by adding thereto a new Part IX to read as follows:

PART IX. DELAWARE HEALTH FACILITIES AUTHORITY

CHAPTER 95. DELAWARE HEALTH

FACILITIES AUTHORITY

§9501. Declaration of Policy

It is hereby declared that for the benefit of the people of the state, the increase of their commerce, welfare and prosperity and the improvement of their health and living conditions, it is essential that health care facilities within the state be provided with appropriate additional means to expand, enlarge and establish health care, hospital and other related facilities; and that it is the purpose of this act to provide a measure of assistance and an alternative method to enable facilities in the state to provide the facilities and structures which are sorely needed to accomplish the purposes of this act, all to the public benefit and good, to the extent and manner provided herein.

§9502. Short Title of Act

This act may be referred to and cited as the "Health Facilities Act."

§9503. Definitions

In this act, the following words and terms shall, unless the context otherwise requires, have the following meanings:

(a) "Authority," the Health Facilities Authority created by section four.

(b) "Project," in the case of a participating health care facility, a structure or structures suitable for use as a hospital, clinic, or other health care facility, laboratory, laundry, nurses' or interns' residence as a part of the health care facility, or other multi-unit housing facility for staff, employees, patients or relatives of patients admitted for treatment in such health care facility, doctors' office building, administration building, research facility, maintenance, storage or utility facility as a part of the health care facility and other structures or facilities related to any of the foregoing or required or useful for the operation of a health care facility, including parking and other facilities or structures essential or convenient for the orderly conduct of such health care facility, and shall also include landscaping, site preparation, furniture, equipment and machinery and other similar items necessary or convenient for the operation of a particular health care facility or structure in the manner for which its use is intended but shall not include such items as fuel, supplies or other items the costs of which are customarily deemed to result in a current operating charge; and "project" may include any combinations of one or more of the foregoing undertaken jointly by any participating facility with one or more other participating facilities.

() "Cost," as applied to a project or any portion thereof financed under the provisions of this act embraces all or any part of the cost of construction, acquisition, alteration, enlargement, reconstruction and remodeling of a project including all lands, structures, real or personal property, rights, rights of way, air rights, franchises, easements and interests acquired or used for or in connection with a project, the cost of demolishing or removing any buildings or structures on land so acquired, including the cost of acquiring any lands to which such buildings or structures may be moved, the cost of all machinery and equipment, financing charges, interest prior to, during and for a period after completion of such construction and acquisition, provisions for reserves for principal and interest and for extensions, enlargements, additions, replacements, renovations and improvements, the cost of architectural, engineering, financial and legal services, plans, specifications, studies, surveys, estimates of cost and of revenues, administrative expenses, expenses necessary or incident to determining the feasibility or practicability of constructing the project and such other expenses as may be necessary or incident to the construction and acquisition of the project, the financing of such construction and acquisition and the placing of the project in operation.

(d) "Bonds" or the words "revenue bonds" shall mean revenue bonds of the Authority issued under the provisions of this act, including revenue refunding bonds notwithstanding that the same may be secured by mortgage or by the full faith and credit or by any other lawfully pledged security of one or more participating facilities.

(e) "Facility," a nonprofit health care facility within the state licensed by the Delaware State Board of Health under the Authority of Section 122, Title 16, Delaware Code.

(f) "Participating facility," a facility which, pursuant to the provisions of this act, undertakes the financing and construction or acquisition of a project or undertakes the refunding or refinancing of obligations or of a mortgage or of advances as provided in this act.

§9504. Health Facilities Authority

(a) There is hereby created a body politic and corporate to be known as the "Delaware Health Facilities Authority," hereinafter in this act called the Authority. Said Authority is constituted a public instrumentality and the exercise by the Authority of the powers conferred by this act shall be deemed and held to be the performance of an essential public function. Said Authority shall consist of seven members to be appointed by the Governor, one of which shall be a resident of the City of Wilmington, one a resident of New Castle County, one a resident of Kent County, one a resident of Sussex County and three members at-large, all of whom shall be residents of the State of Delaware. No more than four shall be members of the same political party. At least two of the members shall be trustees, directors, officers, or employees of a health care facility, at least one shall be a person having a favorable reputation for skill, knowledge and experience in the field of state and municipal finance, either as a partner, officer or employee of an investment banking firm which originates and purchases state and municipal securities, or as an officer or employee of an insurance company or bank whose duties relate to the purchase of state and municipal securities as an investment and to the management and control of a state and municipal securities portfolio, and at least one shall be a person having a favorable reputation for skill, knowledge and experience in the building construction field. The members of the authority first appointed shall serve for terms expiring on June 30 in the years nineteen hundred and seventy-four, nineteen hundred and seventy-five, nineteen hundred and seventy-six, nineteen hundred and seventy-seven, nineteen hundred and seventy-eight, respectively, the term of each member to be designated by the Governor. A member of the Authority shall be eligible for re-appointment for one additional term. Upon the expiration of the term of any member his successor shall be appointed for a term of five years. The Governor shall fill any vacancy for the remainder of the unexpired term. Any member of the Authority may be removed by the Governor for misfeasance, malfeasance, or willful neglect of duty or other cause after notice and a public hearing unless such notice and hearing shall be expressly waived in writing. Each member of the Authority, before entering upon his duties, shall take an oath to administer the duties of his office faithfully and impartially, and such oath shall be on file in the office of the Secretary of State.

(b) The Authority shall annually elect one of its members as chairman and one as vice chairman. It may appoint an executive director, assistant executive director, treasurer, and secretary who shall not be members of the Authority, who shall serve at the pleasure of the Authority. They shall receive such compensation as shall be fixed by the Authority.

(c) The person designated by resolution of the Authority shall keep a record of the proceedings of the Authority and shall be Custodian of all books, documents and papers filed with the Authority, the minute book or journal of the Authority, and its official seal. Said person may cause copies to be made of all minutes and other records and documents of the Authority and may give certificates under the official seal of the Authority to the effect that such copies are true copies, and all persons dealing with the Authority may rely upon such certificates.

(d) Three members of the Authority shall constitute a quorum. The affirmative vote of a majority of the members present at a meeting of the Authority having a quorum present shall be necessary for any action taken by the Authority. A vacancy in the membership of the Authority shall not impair the right of a quorum to exercise all the rights and perform all the duties of the Authority. Any action taken by the Authority under the provisions of this act may be authorized by resolution at any regular or special meeting, and each such resolution shall take effect immediately and need not be published or posted.

() Before the issuance of any bonds or notes under the provisions of this act, the chairman, vice chairman, executive director and assistant executive director and any other member of the Authority authorized by resolution of the Authority to handle funds or sign checks of the Authority shall execute a surety bond in the penal sum of one-hundred thousand dollars, or in lieu thereof the chairman shall obtain a blanket position bond covering the executive director and every member and other employee of the Authority in the penal sum of one-hundred thousand dollars. Each such bond shall be conditioned upon the faithful performance of the duties of the principal or the members, executive director and other employees, as the case may be, shall be executed by a surety, company authorized to transact business in the state as surety, shall be approved by the Attorney General and shall be filed in the office of the State Secretary. The cost of each such bond shall be paid by the Authority.

() The members of the Authority shall receive no compensation for the performance of their duties hereunder but each such member shall be paid his necessary expenses incurred while engaged in the performance of such duties.

Notwithstanding any other law to the contrary, it shall not be or constitute a conflict of interest for a trustee, director, officer or employee of a participating facility or for a person having the required favorable reputation for skill, knowledge and experience in state and municipal finance or for a person having the required favorable reputation for skill, knowledge and experience in the building construction field to serve as a member of the Authority; provided, in each case to which provisions thereof are applicable, such trustee, director, officer or employee of such participating facility abstains from discussion, deliberation, action and vote by the Authority in specific respect to any undertaking pursuant to this act in which such participating facility has an interest, or such person having the required favorable reputation for skill, knowledge and experience in state and municipal finance abstains from discussion, deliberation, action and vote by the Authority in specific respect to any sale, purchase or ownership of bonds of the Authority in which the investment banking firm or insurance company or bank of which such person is a partner, officer or employee has a past, current of future interest, or such person having the required favorable reputation for skill, knowledge and experience in the building construction field abstains from discussion, deliberation, action and vote by the Authority in specific respect to construction or acquisition of any project of the Authority in which any partnership, firm, joint venture, sole proprietorship or corporation of which such person is an owner, venturer, participant, partner, officer or employee who has a past, current or future interest.

§9505. General Grant of Powers

The purpose of the Authority shall be to assist health care facilities in the acquisition, construction, financing and refinancing of projects, and for this purpose the Authority is authorized and empowered :

(f) to issue bonds, bond anticipation notes and other obligations of the Authority for any of its corporate purposes, and to fund or refund the same all as provided in this act;

() generally, to fix and revise from time to time and charge and collect rates, rents, fees and charges for the use of and for the services furnished or to be furnished by a project or any portion thereof and to contract with any person, partnership, association or corporation or other body public or private in respect thereof and to designate a participating facility as its agent to fix, revise, charge and collect such rates, rents, fees and charges and to make such contracts;

(a) to establish rules and regulations for the use of a project or any portion thereof and to designate a participating facility as its agent to establish rules and regulations for the use of a project in which such participating facility is participating;

(b) to employ consulting engineers, architects, attorneys, accountants, construction and financial experts, superintendents, managers, and such other employees and agents as may be necessary in its judgment, and to fix their compensation;

(c) to receive and accept from any public agency loans or grants for or in aid of the construction of a project or any portion thereof, and to receive and accept loans, grants, aid or contributions from any source of either money, property, labor or other things of value to be held, used and applied only for the purposes for which such loans, grants, aid, and contributions are made;

(d) to mortgage any project and the site thereof for the benefit of the holders of bonds issued to finance such project;

(1) to make loans to any participating facility for the cost of a project in accordance with an agreement between the Authority and one or more participating facilities ; provided that no such loan shall exceed the total cost of the project as determined by such participating facility or facilities and approved by the Authority;

(m) to make loans to participating facilities to refund outstanding obligations, mortgages or advances issued, made or given by such participating facilities for the cost of the project;

() to charge to and equitably apportion among participating facilities its administrative costs and expenses reasonably incurred in the exercise of the powers and duties conferred by this act;

(a) to do all things necessary or convenient to carry out the purposes of this act.

In carrying out the purposes of this act, the Authority may undertake a joint project or projects for two or more participating facilities, and, thereupon, all other provisions of this act shall apply to and for the benefit of the Authority and the participants in such joint project or projects.

§9506. Source of Payment of Expenses

All expenses incurred in carrying out the provisions of this act shall be payable solely from funds provided under the Authority of this act and no liability or obligation shall be incurred by the Authority hereunder beyond the extent to which moneys shall have been provided under the provisions of this act.

§9507. Acquisition of Property

The Authority is authorized and empowered, directly or by and through a participating facility, as its agent, to acquire by purchase solely from funds provided under the Authority of this act, or by gift or devise, such lands, structures, property, real or personal, rights, rights-of-way, air rights, franchises, easements and other interests in lands, including lands lying under water and riparian rights, which are located within the state as it may deem necessary or convenient for the acquisition, construction or operation of a project, upon such terms and at such prices as may be considered by it to be reasonable and can be agreed upon between it and the owner thereof, and to take title thereto in the name of the Authority, or in the name of one or more participating facilities as its agent.

§9508. Title to Projects

When the principal of and interest on bonds of the Authority issued to finance the cost of a particular project or projects for one or more participating facilities, including any refunding bonds issued to refund and refinance such bonds, have been fully paid and retired or when adequate provisions have been made to fully pay and retire the same, and all other conditions of the resolution or trust agreement authorizing and securing the same have been satisfied and the lien of such resolution or trust agreement has been released in accordance with the provisions thereof, the Authority shall promptly do such things and execute such deeds and conveyances as are necessary and required to convey title to such project or projects to such participating facility or facilities, all to the extent that title to such project or projects is not, at the time, vested in such participating facility or facilities.

§9509. Release of Collateral

When the principal of and interest on bonds of the Authority issued to finance the cost of a particular project or projects for a participating facility, including any refunding bonds issued to refund and refinance such bonds, have been fully paid and retired or when adequate provision has been made to fully pay and retire the same, and all other conditions of the resolution or trust agreement authorizing and securing the same have been satisfied and the lien of such resolution or trust agreement has been released in accordance with the provisions thereof, the Authority shall promptly do such things and execute such releases and documents as are necessary and required to release securities held as collateral by a trustee or trustees pursuant to the trust agreement to such participating facility, which facility had pursuant to the trust agreement, deposited and turned over such securities to a trustee or trustees in order to assure the full payment and retirement of said bonds, free and clear of all liens and encumbrances, all to the extent that title to such securities shall not, at the time, then be vested in such participating facility.

§9510. Notes of the Authority

The Authority may from time to time issue negotiable notes for any corporate purpose and may from time to time renew any notes by the issuance of new notes, whether the notes to be renewed have or have not matured. The Authority may issue notes partly to renew notes or to discharge other obligations then outstanding and partly for any other purpose. The notes may be authorized, sold, executed and delivered in the same manner as bonds. Any resolution or resolutions authorizing notes of the Authority or any issue thereof may contain any provisions which the Authority is authorized to include in any resolution or resolutions authorizing revenue bonds of the Authority or any issue thereof, and the Authority may include in any notes any terms, covenants or conditions which it is authorized to include in any bonds. Such resolution or resolutions may delegate to any combination of three of the following: the executive director, assistant executive director, treasurer, or any member of the Authority, the power to determine any of the details of the notes and to award such notes to a purchaser or purchasers. All such notes shall be payable solely from the revenues of the Authority, subject only to any contractual rights of the holders of any of its notes, and subject to any agreements with any participating facility.

§9511. Bonds of the Authority

(a) The Authority may from time to time issue bonds for any corporate purpose and all such bonds, notes, bond anticipation notes or other obligations of the Authority issued pursuant to this act shall be and are hereby declared to be negotiable for all purposes notwithstanding their payment from a limited source and without regard to any other law or laws. In anticipation of the sale of such bonds, the Authority may issue negotiable bond anticipation notes and may renew the same from time to time, but the maximum maturity of any such note, including renewals thereof, shall not exceed five years from the date of issue of the original note. Such notes shall be paid from any revenues of the Authority available therefor and not otherwise pledged, or from the proceeds of sale of the bonds of the Authority in anticipation of which they were issued. The notes shall be issued in the same manner as the bonds. Such notes and the resolution or resolutions authorizing the same may contain any provisions, conditions or limitations which a bond resolution of the Authority may contain.

(b) The bonds and notes of every issue shall be payable solely out of the revenues of the Authority, subject only to any agreements with the holders of particular bonds or notes pledging any particular revenues and subject to any agreements with any participating facility. Notwithstanding that bonds and notes may be payable from a special fund, they shall be and be deemed to be, for all purposes, negotiable instruments subject only to the provisions of the bonds and notes for registration.

(c) The bonds may be issued as serial bonds or as term bonds, or the Authority, in its discretion may issue bonds of both types. The bonds shall be authorized by resolution of the members of the Authority and shall bear such date or dates, mature at such time or times, not exceeding fifty years from their respective dates, bear interest at such rate or rates, payable at such time or times, be in such denominations, be in such form, either coupon or registered, carry such registration privileges, be executed in such manner, be payable in lawful money of the United States of America at such place or places, and be subject to such terms of redemption, as such resolution or resolutions may provide. Such resolution or resolutions may delegate to any combination of three of the following: the executive director, assistant executive director, treasurer, or any member of the Authority, the power to determine any of the matters set forth in this section and the power to award the bonds to a purchaser or purchasers at public sale or to negotiate a sale to a purchaser or purchasers. The bonds or notes may be sold at public or private sale for such price or prices as the Authority shall determine. Pending preparation of the definitive bonds, the Authority may issue interim receipts or certificates which shall be exchanged for such definitive bonds.

(d) Any resolution or resolutions authorizing any bonds or any issue of bonds may contain provisions, which shall be a part of the contract with the holders of the bonds to be authorized as to:

the revenues of a project or projects, any revenue producing contract or contracts made by the Authority with any individual, partnership, corporation or association or other body, public or private, to secure the payment of the bonds or of any particular issue of bonds, subject to such agreements with bondholders or participating facilities as may then exist; (2) the rentals, fees and other charges to be charged, and the amounts to be raised in each year thereby, and the use and disposition of the revenues; (3) the establishment and setting aside of reserves or sinking funds, the regulation and disposition thereof; (4) limitations on the right of the Authority or its agent to restrict and regulate the use of the project; (5) limitations on the purpose to which the proceeds of sale of any issue of bonds then or thereafter to be issued may be applied and pledging such proceeds to secure the payment of the bonds or any issue of the bonds; (6) limitations on the issuance of additional bonds, the terms upon which additional bonds may be issued and secured and the refunding of outstanding bonds; (7) the procedure, if any, by which the terms of any contract with bondholders may be amended or abrogated, the amount of bonds the holders of which must consent thereto, and the manner in which such consent may be given; (8) limitations on the amount of moneys derived from the project to be expended for operating, administrative or other expenses of the Authority; (9) defining the acts or omissions to act which shall constitute a default in the duties of the Authority to holders of its obligations and providing the rights and remedies of such holders in the event of a default; (10) the duties, obligations and liabilities of any trustee or paying agent; and (11) the mortgaging of a project and the site thereof for the purpose of securing the bondholders.

(e) Neither the members of the Authority nor any person executing the bonds or notes shall be liable personally on the bonds or notes or he subject to any personal liability or accountability by reason of the issuance thereof.

(f) The Authority shall have power out of any funds available therefor to purchase its bonds or notes. The Authority may hold, pledge, cancel or resell such bonds or notes subject to and in accordance with agreements with bondholders or participating facilities.

§9512. Trust Agreement

In the discretion of the Authority any bonds issued under the provisions of this act may be secured by a trust agreement by and between the Authority and a corporate trustee or trustees, which may be any trust company or bank having the powers of a trust company within the state. Such trust agreement or the resolution providing for the issuance of such bonds may pledge or assign the revenues to be received or proceeds of any contract or contracts pledged and may convey or mortgage the project or any portion thereof. Such trust agreement or resolution providing for the issuance of such bonds may contain such provisions for protecting and enforcing the rights and remedies of the bondholders as may be reasonable and proper and not in violation of law, including particularly such provisions as have herein-above been specifically authorized to be included in any resolution or resolutions of the Authority authorizing bonds thereof. Any bank or trust company incorporated under the laws of the state which may act as depository of the proceeds of bonds or of revenues or other moneys may furnish such indemnifying bonds or pledge such securities as may be required by the Authority. Any such trust agreement may set forth the rights and remedies of the bondholders and of the trustee or trustees, and may restrict the individual right of action by bondholders. In addition to the foregoing, any such trust agreement or resolution may contain such other provisions as the Authority may deem reasonable and proper for the security of the bondholders. All expenses incurred in carrying out the provisions of such trust agreement or resolution may be treated as a part of the cost of the operation of a project.

§9513. Credit of State not pledged

Bonds or notes issued under the provisions of this act shall not be deemed to constitute a debt or liability of the state or of any political subdivisions thereof, other than the Authority, or a pledge of the faith and credit of the state or of any such political subdivision, other than the Authority, but shall be payable solely from the funds herein provided therefor. All such bonds or notes shall contain on the face thereof a statement to the effect that neither the State of Delaware nor any political subdivision thereof other than the Authority shall be obligated to pay the same or the interest thereon except from revenues of the project or projects or the portion thereof for which they are issued and that neither the faith and credit nor the taxing power of the State of Delaware or of any political subdivision thereof other than the Authority is pledged to the payment of the principal of or the interest on such bonds. The issuance of bonds under the provisions of this act shall not directly or indirectly or contingently obligate the state or any political subdivision thereof to levy or to pledge any form of taxation whatever therefor, or to make any appropriation for their payment. Nothing contained in this section shall prevent or be construed to prevent the Authority from pledging its full faith and credit or the full faith and credit of a participating facility to the payment of bonds or issue of bonds authorized pursuant to this Act.

§9514. Revenues

The Authority may fix, revise, charge and collect rates, rents, fees and charges for the use of and for the services furnished or to be furnished by each project and to contract with any person, partnership, association or corporation, or other body, public or private, in respect thereof. Such rates, rents, fees and charges shall be fixed and adjusted in respect of the aggregate of rates, rents, fees and charges from such project so as to provide funds sufficient with other revenues, if any, (1) to pay the principal of and the interest of such project as the same shall become due and payable and (2) to create and maintain reserves required or provided for in any resolution authorizing, or trust agreement securing, such revenue bonds of the Authority. Such rates, rents, fees and charges shall not be subject to supervision or regulation by any department, commission, board, body, bureau or agency of this state, other than the Authority. A sufficient amount of the revenues derived in respect of a project shall be set aside at such regular intervals as may be provided in such resolution or trust agreement in a sinking or other similar fund which is pledged to, and charged with, the payment of the principal of and the interest on such bonds or notes as the same shall become due, and the redemption price or the purchase price of bonds or notes retired by call or purchase as therein provided. Such pledge shall be valid and binding from the time when the pledge is made; the rates, rents, fees and charges and other revenues or other moneys so pledged and thereafter received by the Authority shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act, and the lien of any such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Authority, irrespective of whether such parties have notice thereof. Neither the resolution nor any trust agreement by which a pledge is created need be filed or recorded except in the records of the Authority. The use and disposition of moneys to the credit of such sinking or other similar fund shall be subject to the provisions of the resolution authorizing the issuance of such bonds or notes or of such trust agreement. Except as may otherwise be provided in such resolution or trust agreement, such sinking or other similar fund shall be a fund for all such bonds or notes issued to finance a project or projects at one or more participating facilities as the case may be, without distinction or priority of one over another ; provided the Authority in any such resolution or trust agreement may provide that such sinking or other similar fund shall be the fund for a particular project at a facility and for the bonds issued to finance a particular project and may, additionally, permit and provide for the issuance of bonds or notes having a subordinate lien in respect of the security authorized to other bonds or notes of the Authority and, in such case, the Authority may create separate or other similar funds in respect of such subordinate lien bonds.

§9515. Trust funds

All moneys received pursuant to the Authority of this Act, whether as proceeds from the sale of bonds or as revenues, shall be deemed to be trust funds to be held and applied solely as provided in this act. Any officer with whom, or any bank or trust company with which, such moneys shall be deposited shall act as trustee of such moneys and shall hold and apply the same for the purposes hereof, subject to such regulations as this act and the resolution authorizing the bonds or notes of any issue or the trust agreement securing such bonds or notes may provide.

§9516. Remedies

Any holder of bonds, notes, bond anticipation notes, other notes or other obligations of the Authority issued under the provisions of this act or any of the coupons appertaining thereto, and the trustee or trustees under any trust agreement, except to the extent the right herein given may be restricted by any resolution authorizing the issuance of, or any such trust agreement securing, such bonds or other obligations, may, either at law or in equity, by suit, action, mandamus or other proceedings, protect and enforce any and all rights under the laws of the state or granted hereunder or under such resolution or trust agreement, and may enforce and compel the performance of all duties required by this act or by such resolution or trust agreement to be performed by the Authority of any officer, employee or agent thereof, including the fixing, charging and collecting of the rates, rents, fees and charges herein authorized and required by the provisions of such resolution or trust agreement to be fixed, established and collected.

§9517. Exemption from Taxation

The exercise of the powers granted by this act will be in all respects for the benefit of the people of this state, for the increase of their commerce, welfare and prosperity, and for the improvement of their health and living conditions, and as the operation and maintenance of a project by the Authority or its agent or a lessee will constitute the performance of an essential public function, neither the Authority nor its agent nor the lessee shall be subject to provisions of the Constitution of the State of Delaware required to pay any taxes or assessments upon or in respect of a project or upon any property acquired or used by the Authority or its agent, or the lessee, under the provisions of this act or upon the income therefrom, and any bonds or notes issued under the provisions of this act, their transfer and the income therefrom, shall at all times be free from taxation of every kind by the state and by the municipalities and other political subdivisions in the state.

§9518. Refunding Bonds or Notes

(a) The Authority is hereby authorized to provide for the issuance of bonds or notes of the Authority for the purpose of refunding any bonds or notes of the Authority then outstanding, including the payment of any redemption premium thereon and any interest accrued or to accrue to the earliest or any subsequent date of redemption, purchase or maturity of such bonds or notes, and, if deemed advisable by the Authority, for the additional purpose of paying all or any part of the cost of constructing and acquiring additions, improvements, extensions or enlargements of a project or any portion thereof.

(b) The proceeds of any such bonds or notes issued for the purpose of refunding outstanding bonds or notes, may, in the discretion of the Authority, be applied to the purchase or retirement at maturity or redemption of such outstanding bonds or notes either on their earliest or any subsequent redemption date or upon the purchase or at the maturity thereof and may, pending such application, be placed in escrow to be applied to such purchase or retirement at maturity or redemption on such date as may be determined by the Authority.

(c) Any such escrowed proceeds, pending such use, may be invested and reinvested in direct obligations of the United States of America, or in certificates of deposit or time deposits secured by direct obligations of the United States of America, maturing at such time or times as shall be appropriate to assure the prompt payment, as to principal, interest and redemption premium, if any, of the outstanding bonds or notes to be so refunded. The interest, income and profits, if any, earned or realized on any such investment may also be applied to the payment of the outstanding bonds or notes to be so refunded. After the terms of the escrow have been fully satisfied and carried out, any balance of such proceeds and interest, income and profits, if any, earned or realized on the investments thereof may be returned to the Authority for use by it in any lawful manner.

(d) The portion of the proceeds of any such bonds or notes issued for the additional purpose of paying all or any part of the cost of constructing and acquiring additions, improvements, extensions or enlargements of a project may be invested and reinvested in direct obligations of the United States of America, or in certificates of deposit or time deposits secured by direct obligations of the United States of America, maturing not later than the time or times when such proceeds will be needed for the purpose of paying all or any part of such cost. The interest, income and profits, if any, earned or realized on such investment may be applied to the payment of all or any part of such cost or may be used by the Authority in any lawful manner.

(e) All such bonds or notes shall be subject to the provisions of this act in the same manner and to the same extent as other bonds or notes issued pursuant to this act.

§9519. Bonds or Notes eligible for investment

Bonds or notes issued by authority under the provisions of this act are hereby made securities in which all public officers and public bodies of the State and its political subdivisions, all insurance companies, trust companies, saving banks, co-operative banks, banking associations, investment companies, executors, administrators, trustees and other fiduciaries may properly and legally invest funds, including capital in their control or belonging to them. Such bonds or notes are hereby made securities which may properly and legally be deposited with and received by any state or municipal officer or any agency or political subdivision of the state for any purpose for which the deposit of bonds or notes or obligations of the state is now or may hereafter be authorized by law.

§9520. Annual Report

Within the first ninety days of each calendar year, the Authority shall make a report to the Governor of its activities for the preceding calendar year. Each such report shall set forth the complete operating and financial statement covering its operations during such year. The Authority shall cause an audit of its books and accounts to be made at least once each year by certified public accountants, and the cost thereof shall be paid by the Authority from funds available to it pursuant to this act.

§9521. Continued existence of authority

The Authority and its corporate existence shall continue until terminated by law; provided, however, that no such law shall take effect so long as the Authority shall have bonds, notes or other obligations outstanding, unless adequate provision has been made for the payment thereof. Upon termination of the existence of the Authority, all its rights and properties shall pass to and be vested in the state.

§9522. Additional and alternative method

The foregoing sections of this act shall be deemed to provide a complete, additional and alternative method for the doing of the things authorized thereby and shall be regarded as supplemental and additional to powers conferred by other laws; provided the issuance of bonds or notes and refunding bonds or notes under the provisions of this act need not comply with the requirements of any other law applicable to the issuance of bonds or notes. Except as otherwise expressly provided in this act, none of the powers granted to the Authority under the provisions of this act shall be subject to the supervisions or regulation or require the approval or consent of any municipality or political subdivision or any department, division, commission, board, body, bureau, official or agency thereof or of the state.

Section 2. Act Liberally Construed.—This act, being necessary for the welfare of the state and its inhabitants, shall be liberally construed to effect the purposes hereof.

Section 3. This Act Controlling.—To the extent that the provisions of this act are inconsistent with the provisions of any general statute or special act or parts thereof, the provisions of this act shall be deemed controlling.

Section 4. Effective Date.—This act shall take effect July 1, 1973.

Approved April 15, 1974.