The Florida Senate

255.518  Obligations; purpose, terms, approval, limitations.--

(1)(a)  The issuance of obligations shall provide sufficient funds to achieve the purposes of this act; pay interest on obligations except as provided in paragraph (b); pay expenses incident to the issuance and sale of any obligations issued pursuant to this act, including costs of validating, printing, and delivering the obligations, printing the official statement, publishing notices of sale of the obligations, and related administrative expenses; pay building acquisition and construction costs; and pay all other capital expenditures of the Department of Management Services and the division incident to and necessary to carry out the purposes and powers granted by this act, subject to the provisions of ¹s. 11(e), Art. VII of the State Constitution and the applicable provisions of the State Bond Act. Such obligations shall be payable solely from the pool pledged revenues identified to such obligation. Proceeds of obligations may not be used to pay building acquisition or construction costs for any facility until the Legislature has appropriated funds from other sources estimated to be necessary for all costs relating to the initial planning, preliminary design and programming, and land acquisition for such facility and until such planning, design, and land acquisition activities have been completed. Obligation proceeds for building construction, renovation, or acquisition shall be requested for appropriation in any fiscal year by the Department of Management Services only if the department estimates that such construction, renovation, or acquisition can be initiated during such fiscal year.

(b)  Payment of debt service charges and any reserves on obligations during the construction of any facility financed by such obligations shall be made from funds other than proceeds of obligations.

(2)  All obligations authorized by this act shall be issued on behalf of and in the name of the Department of Management Services by the division as provided by this act, with a term of not more than 30 years and, except as otherwise provided herein, in such principal amounts as shall be necessary to provide sufficient funds to achieve the purposes of this act.

(3)  There may be established, from the proceeds of each issue of obligations, a debt service reserve account, a capitalized interest account, or a capital depreciation reserve account, in each case in an amount as may be determined by the division.

(4)(a)  The provisions of the State Bond Act shall be applicable to all obligations issued pursuant to this act, when not in conflict with the provisions hereof; provided the basis of award of sale of such obligations may be either the net interest cost or the true or effective interest cost, as set forth in the resolution authorizing the sale of such obligations.

(b)  In actions to validate such obligations pursuant to chapter 75, the complaint shall be filed in the Circuit Court of Leon County, the notice required by s. 75.06, shall be published only in Leon County and in two newspapers of general circulation in the state, and the complaint and order of the court shall be served only on the state attorney of the Second Judicial Circuit.

(5)  Any resolution or resolutions authorizing any obligations issued pursuant to this act shall provide that:

(a)  The pledge of the pool pledged revenues as security for the obligations is a gross pledge of all rentals and charges included in pool pledged revenues.

(b)  The Department of Management Services shall maintain all facilities in the pool in a satisfactory state of repair, subject to such exceptions as are determined by the Department of Management Services, provided that such exceptions do not result in breach of any rate covenant in connection with the obligations.

(c)  The Department of Management Services shall establish pool rental rates in amounts so that the annualized amount of pool pledged revenues for the then-current bond year shall be at least equal to the aggregate of 110 percent of debt services charges, plus 100 percent of capital depreciation reserve deposits, plus 100 percent of costs of operations and maintenance, if any, in each case as shown in the annual budget required pursuant to this act.

(d)  The pool pledged revenues are pledged to secure the payment of obligations subject to such agreements with holders of outstanding obligations as may then exist.

(6)  Any resolution authorizing any obligations issued pursuant to this act may contain provisions, without limitation, which shall be a part of the contract with the holders thereof, as to:

(a)  Pledging all or any part of the assets of the Department of Management Services securing the same, including leases with respect to all or any part of a facility, to secure the payment of obligations, subject to such agreements with holders of obligations as may then exist.

(b)  The use and disposition of the income from facilities in the pool.

(c)  The procedure by which the terms of any contract with holders of obligations may be amended or abrogated, the principal amount of obligations the holders of which must consent thereto, and the manner in which such consent may be given.

(d)  Vesting in the State Board of Administration such property, rights, powers, and duties in trust as the division and the Department of Management Services may determine, and limiting or abrogating the right of holders of obligations to appoint a trustee under this act or limiting the rights, powers, and duties of such trustee.

(e)  Defining the acts or omissions to act which shall constitute a default in the obligations and duties of the division and the Department of Management Services to the holders of obligations and providing for the rights and remedies of holders of obligations in the event of such default, including, as matter of right, the appointment of a receiver; provided such rights and remedies shall not be inconsistent with the general laws of the state and the other provisions of this act.

(f)  Providing for the segregation of revenues payable to the Department of Management Services as rentals or charges arising from facilities in the pool; providing for the handling of such revenues and the remittance of all or a portion thereof to the State Board of Administration or a paying agent; providing for the establishment of debt service reserves, capitalized interest accounts, capital depreciation reserve accounts, and the calculation of the amounts to be deposited therein; providing for the procurement of letters of credit or municipal bond insurance or similar credit enhancements or of letters of credit or similar liquidity facilities for the benefit of holders of such obligations or for the entering into of agreements with remarketing agents, tender agents, or indexing agents or of reimbursement agreements with respect to any of the foregoing concerning any such obligations.

(g)  Providing for the circumstances under which facilities may be retired from or removed from and not replaced in the pool, so long as this does not result in a breach of any rate covenant with respect to the obligations.

(h)  Any other matters, of like or different character, which in any way affect the security or protection of holders of obligations.

(7)(a)  The obligations issued by the division on behalf of and in the name of the Department of Management Services shall be sold at public sale in the manner provided by the State Bond Act; provided that if the division shall determine that a negotiated sale of the obligations is in the best interest of the state, the division may negotiate for sale of the obligations with the underwriter jointly designated by the division and the Department of Management Services. In authorizing the negotiated sale, the division shall provide specific findings as to the reasons for the negotiated sale. The reasons shall include, but not be limited to, characteristics of the obligations to be issued and prevailing market conditions that necessitate a negotiated sale. In the event the division negotiates for sale of obligations, the managing underwriter, or financial consultant or adviser, if applicable, shall provide to the division, prior to the award of such obligations to the managing underwriter, a disclosure statement containing the following information:

1.  An itemized list setting forth the nature and estimated amounts of expenses to be incurred by the managing underwriter in connection with the issuance of such obligations. Notwithstanding the foregoing, any such list may include an item for miscellaneous expenses, provided it includes only minor items of expense which cannot be easily categorized elsewhere in the statement.

2.  The names, addresses, and estimated amounts of compensation of any finders connected with the issuance of the obligations.

3.  The amount of underwriting spread expected to be realized.

4.  Any management fee charged by the managing underwriter.

5.  Any other fee, bonus, or compensation estimated to be paid by the managing underwriter in connection with the obligations issued to any person not regularly employed or retained by it.

6.  The name and address of the managing underwriter, if any, connected with the obligations issued.

7.  Any other disclosure which the division may require.

This paragraph is not intended to restrict or prohibit the employment of professional services relating to obligations issued under this act or the issuance of bonds by the division under any other provisions of law.

(b)  In the event an offer of an issue of obligations at public sale produces no bid, or in the event all bids received are rejected, the division is authorized to negotiate for the sale of the obligations under such rates and terms as are in the best interest of the state; provided that no obligations shall be so sold or delivered on terms less favorable than the terms contained in any bids rejected at the public sale thereof or, if no bids were received at such public sale, the terms contained in the notice of public sale.

(c)  The failure of the division to comply with one or more provisions of this section shall not affect the validity of the obligations so issued.

(8)(a)  No underwriter, commercial bank, investment banker, or financial consultant or adviser shall pay any finder any bonus, fee, or gratuity in connection with the sale of obligations issued by the division on behalf of and in the name of the Department of Management Services unless full disclosure is made to the division prior to or concurrently with the submission of a purchase proposal for such obligations by the underwriter, commercial bank, investment banker, or financial consultant or adviser and is made subsequently in the official statement or offering circular, if any, detailing the name and address of any finder and the amount of bonus, fee, or gratuity paid to such finder.

(b)  A willful violation of this subsection is a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

(c)  No violation of this subsection shall affect the validity of any obligation issued under this act.

(9)  As used in this section, the term "finder" means a person who is neither regularly employed by, nor a partner or officer of, an underwriter, bank, banker, or financial consultant or adviser and who enters into an understanding with either the issuer or the managing underwriter, or both, for any paid or promised compensation or valuable consideration, directly or indirectly, expressly or impliedly, to act solely as an intermediary between such issuer and managing underwriter for the purpose of influencing any transaction in the purchase of such obligations.

(10)  All obligations issued by the division on behalf of and in the name of the Department of Management Services shall state on the face thereof that they are payable, both as to principal and interest, and premium, if any, solely out of the pool pledged revenues, and do not constitute an obligation, either general or special, of the state or of any political subdivision.

(11)  All obligations issued by the division on behalf of and in the name of the Department of Management Services are hereby declared to have all the qualities and incidents of negotiable instruments under the applicable laws of the state.

(12)  Any pledge of earnings, revenues, or other moneys made by the Department of Management Services shall be valid and binding from the time the pledge is made. Any earnings, revenues, or other moneys so pledged and thereafter received by the Department of Management Services shall immediately be subject to the lien of that pledge without any physical delivery thereof or further act, and the lien of the pledge shall be valid and binding as against the Department of Management Services irrespective of whether the parties have notice thereof. Neither the resolution nor any other instrument by which a pledge is created need be recorded or filed pursuant to the Uniform Commercial Code.

(13)  No employee of the Department of Management Services or the division, nor any person lawfully executing obligations issued under this act by the division on behalf of and in the name of the Department of Management Services, shall be liable personally on the obligations or be subject to any personal liability or accountability by reason of the issuance thereof.

History.--s. 17, ch. 85-349; s. 2, ch. 86-222; s. 75, ch. 87-224; s. 190, ch. 92-279; s. 55, ch. 92-326; s. 36, ch. 98-279.

¹Note.--Paragraph 11(e), Art. VII, State Constitution, was redesignated as paragraph 11(f) to conform to the addition of a new paragraph 11(e) by Revision No. 5 (1998).