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Title VIII PUBLIC OFFICERS AND EMPLOYEES, BONDS AND RECORDS

  Chapter 108back to chapter 108

  108.170.  Bonds, notes and other evidences of indebtedness, forms — rate — municipal advisor — sales price — exceptions — agreements for purchase of commodities. — 1.  Notwithstanding any other provisions of any law or charter to the contrary, any issue of bonds, notes, or other evidences of indebtedness, including bonds, notes, or other evidences of indebtedness payable solely from revenues derived from any revenue-producing facility, hereafter issued under any law of this state by any county, city, town, village, school district, educational institution, drainage district, levee district, nursing home district, hospital district, library district, road district, fire protection district, water supply district, sewer district, housing authority, land clearance for redevelopment authority, special authority created under section 64.920, authority created pursuant to the provisions of chapter 238, or other municipality, political subdivision or district of this state shall be negotiable, may be issued in bearer form or registered form with or without coupons to evidence interest payable thereon, may be issued in any denomination, and may bear interest at a rate not exceeding ten percent per annum, and may be sold, at any sale, at the best price obtainable, not less than ninety-five percent of the par value thereof, anything in any proceedings heretofore had authorizing such bonds, notes, or other evidence of indebtedness, or in any law of this state or charter provision to the contrary notwithstanding.  Such issue of bonds, notes, or other evidence of indebtedness may bear interest at a rate not exceeding fourteen percent per annum if sold at public sale after giving reasonable notice of such sale, at the best price obtainable, not less than ninety-five percent of the par value thereof; provided, that such bonds, notes, or other evidence of indebtedness may be sold to any agency or corporate or other instrumentality of the state of Missouri or of the federal government at private sale at a rate not exceeding fourteen percent per annum.  If a political subdivision has an unenhanced bond rating of AA+ or higher, or comparable rating, on its outstanding general obligation bonds or is proposing to issue general obligation bonds with an unenhanced bond rating of AA+ or higher, or comparable rating, the new issue of general obligation bonds shall be issued through a competitive process unless the political subdivision employs the services of a municipal advisor, in which case the political subdivision may use a negotiated or competitive process, except that such requirements shall not apply to any general obligation bonds:

  (1)  Sold, pursuant to written agreement, to the government of the United States of America or of the state of Missouri or to any bureau, department, body corporate, instrumentality, or agency of the United State of America or the state of Missouri;

  (2)  Where the principal amount of the bonds issued does not exceed twelve million five hundred thousand dollars; or

  (3)  That are issued or are part of an issue issued to refinance a prior issue of general obligation indebtedness or which are issued contemporaneously with any such issue of refunding bonds; provided, the refunding bonds shall not exceed the principal of the outstanding indebtedness to be refunded and the accrued interest to the date of such refunding bonds.

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A municipal advisor shall not be allowed to profit financially or otherwise, either directly or indirectly, from the underwriter of a negotiated bond issuance.

  2.  Notwithstanding the provisions of subsection 1 of this section to the contrary, the sale of bonds, notes, or other evidence of indebtedness issued by the state board of public buildings created under section 8.010, the state board of fund commissioners created under section 33.300, any port authority created under section 68.010, the bi-state metropolitan development district authorized under section 70.370, any special business district created under section 71.790, any county, as defined in section 108.465, exercising the powers granted by sections 108.450 to 108.470, the industrial development board created under section 100.265, any planned industrial expansion authority created under section 100.320, the higher education loan authority created under section 173.360, the Missouri housing development commission created under section 215.020, the state environmental improvement and energy resources authority created under section 260.010, the agricultural and small business development authority created under section 348.020, any industrial development corporation created under section 349.035, or the health and educational facilities authority created under section 360.020 shall, with respect to the sales price, manner of sale and interest rate, be governed by the specific sections applicable to each of these entities.

  3.  Any person who is engaged as a municipal advisor by a political corporation or subdivision with respect to a particular issue of securities shall be independent of the underwriter of that issue of securities.  For the purposes of this section, "municipal advisor" shall be either:

  (1)  A person registered as a municipal advisor under the rules of the United States Securities and Exchange Commission; or

  (2)  A person who is a chief financial officer of a school district and either*:

  (a)  Is a** certified public accountant; or

  (b)  Has a*** masters of business administration and is certified as an administrator of school finance and operations by the Association of School Business Officials International.

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For the purposes of this subsection, "independent" shall have the same meaning as defined by the rules of the United States Securities and Exchange Commission.  In determining the individuals or entities that may serve as a municipal advisor, nothing in this section shall be construed to be more restrictive than the definition of a municipal advisor as established by the United States Securities and Exchange Commission.

  4.  Notwithstanding other provisions of this section or other law, the sale of bonds, notes or other evidence of indebtedness issued by any housing authority created under section 99.040 may be sold at any sale, at the best price obtainable, not less than ninety-five percent of the par value thereof, and may bear interest at a rate not exceeding fourteen percent per annum.  The sale shall be a public sale unless the issuing jurisdiction adopts a resolution setting forth clear justification why the sale should be a private sale except that private activity bonds may be sold either at public or private sale.

  5.  Notwithstanding other provisions of this section or law, industrial development revenue bonds may be sold at private sale and bear interest at a rate not exceeding fourteen percent per annum at the best price obtainable, not less than ninety-five percent of the par value thereof.

  6.  Notwithstanding other provisions in subsection 1 of this section to the contrary, revenue bonds issued for airport purposes by any constitutional charter city in this state which now has or may hereafter acquire a population of more than three hundred thousand but less than six hundred thousand inhabitants, according to the last federal decennial census, may bear interest at a rate not exceeding fourteen percent per annum if sold at public sale after giving reasonable notice, at the best price obtainable, not less than ninety-five percent of the par value thereof.

  7.  For purposes of the interest rate limitations set forth in this section, the interest rate on bonds, notes or other evidence of indebtedness described in this section means the rate at which the present value of the debt service payments on an issue of bonds, notes or other evidence of indebtedness, discounted to the date of issuance, equals the original price at which such bonds, notes or other evidence of indebtedness are sold by the issuer.  Interest on bonds, notes or other evidence of indebtedness may be paid periodically at such times as shall be determined by the governing body of the issuer and may be compounded in accordance with section 408.080.

  8.  Notwithstanding any provision of law or charter to the contrary:

  (1)  Any entity referenced in subsection 1 or 2 of this section and any other political corporation of the state which entity or political corporation has an annual operating budget for the current year exceeding twenty-five million dollars may, in connection with managing the cost to such entity or political corporation of purchasing fuel, electricity, natural gas, and other commodities used in the ordinary course of its lawful operations, enter into agreements providing for fixing the cost of such commodity, including without limitation agreements commonly referred to as hedges, futures, and options; provided that as of the date of such agreement, such entity or political corporation shall have complied with subdivision (3) of this subsection; and further provided that no eligible school, as defined in section 393.310, shall be authorized by this subsection to enter into such agreements in connection with the purchase of natural gas while the tariffs required under section 393.310 are in effect;

  (2)  Any entity referenced in subsection 1 or 2 of this section and any other political corporation of the state may, in connection with its bonds, notes, or other obligations then outstanding or to be issued and bearing interest at a fixed or variable rate, enter into agreements providing for payments based on levels of or changes in interest rates, including without limitation certain derivative agreements commonly referred to as interest rate swaps, hedges, caps, floors, and collars, provided that:

  (a)  As of the date of issuance of the bonds, notes, or other obligations to which such agreement relates, such entity or political corporation will have bonds, notes, or other obligations outstanding in an aggregate principal amount of at least fifty million dollars; and

  (b)  As of the date of such agreement, such entity's or political corporation's bonds, notes, or other obligations then outstanding or to be issued have received a stand-alone credit rating in one of the two highest categories, without regard to any gradation within such categories, from at least one nationally recognized credit rating agency, or such entity or political corporation has an issuer or general credit rating, in one of the two highest categories, without regard to any gradation within such categories, from at least one nationally recognized credit rating agency; and

  (c)  As of the date of such agreement, such entity or political corporation shall have complied with subdivision (3) of this subsection;

  (3)  Prior to entering into any agreements pursuant to subdivision (1) or (2) of this subsection, the governing body of the entity or political corporations entering into such agreements shall have adopted a written policy governing such agreements.  Such policy shall be prepared by integrating the recommended practices published by the Government Finance Officers Association or comparable nationally recognized professional organization and shall provide guidance with respect to the permitted purposes, authorization process, mitigation of risk factors, ongoing oversight responsibilities, market disclosure, financial strategy, and any other factors in connection with such agreements determined to be relevant by the governing body of such entity or political corporation.  Such entity or political corporation may enter into such agreements at such times and such agreements may contain such payment, security, default, remedy, and other terms and conditions as shall be consistent with the written policy adopted under this subdivision and as may be approved by the governing body of such entity or other obligated party, including any rating by any nationally recognized rating agency and any other criteria as may be appropriate;

  (4)  Nothing in this subsection shall be applied or interpreted to authorize any such entity or political corporation to enter into any such agreement for investment purposes or to diminish or alter the special or general power any such entity or political corporation may otherwise have under any other provisions of law including the special or general power of any interstate transportation authority.

  9.  The state treasurer shall make available to municipalities, political subdivisions, or districts listed under subsection 1 of this section relevant information regarding debt issuance and bidding processes, including best practices resources published by a national association of government finance officers on debt issuance, to aid such entities with the process of issuing debt and awarding bonds to the best bidder.

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(RSMo 1939 § 3311, A.L. 1965 p. 232, A.L. 1969 1st Ex. Sess. H.B. 2, A.L. 1969 3rd Ex. Sess. H.B. 26, A.L. 1969 4th Ex. Sess. S.B. 8, A.L. 1976 S.B. 778, A.L. 1980 H.B. 1582 & 1277, A.L. 1983 S.B. 181, A.L. 1985 S.B. 140, A.L. 1993 H.B. 685, A.L. 1993 H.B. 566, A.L. 2007 S.B. 22, A.L. 2017 S.B. 111)

*Words "is a" appear in original rolls.

**Word "Is" does not appear in original rolls.

***Word "a" does not appear in original rolls.


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108.170 8/28/2017
108.170 8/28/2007 8/28/2017

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