(a) Generally. The Authority may secure any bond by a trust indenture by and between the Authority and a corporate trustee, that may be any trust company or bank having the powers of a trust company within or outside this State.
(b) Proceeds as trust funds. All bond proceeds are trust funds for the purposes for which the bonds are authorized.
(c) Lien on proceeds. There is a lien on bond proceeds in favor of the purchasers or holders of the bonds or any trustee appointed with respect to any bonds until the moneys are applied to the purposes for which the bonds are authorized.
(d) Depository of proceeds. Any bank or trust company having the powers of a trust company within or outside this State may act as depository of the proceeds of the bonds or revenues received from projects.
(e) Use of proceeds. In the case of bonds issued to finance a project, bond proceeds shall be used to pay the cost of the project for which the bond is issued, including:
(1) the cost of all land, property rights, easements, and franchises necessary for the construction and establishment of a project;
(2) the cost of all labor, materials, machinery and equipment, financing charges, interest before and during construction and for one year after completion of construction, and the funding of reserves;
(3) the cost of engineering, architectural, and legal services, plans, specifications, surveys, estimates of cost and of revenues, other expenses necessary or incident to determining the feasibility or practicability of construction, and administrative expenses; and
(4) other expenses necessary or incident to the financing authorized in this title, including bond issuance costs, bond insurance premiums, letter of credit, or other financing expenses and the construction and establishment of a project, including purchase, remodeling, reconstruction, and placing in operation of any existing facility acquired by the Authority as a project.
(f) Application and investment of proceeds. In the case of bonds issued to refund outstanding bonds, bond proceeds may be applied to the funding of reserves and shall otherwise be applied and invested in the same manner as prescribed in Local Government Article, § 19-207, of the State Code for the application and investment of proceeds of refunding bonds issued under Local Government Article, § 19-207, of the State Code.
(1985 Code, Art. 2, § 11-213) (Bill No. 28-97)