§ 9-942. Use of proceeds

   (a) In general. -- An authority shall:

   (1) Use the proceeds of any bond that it issues only to pay for the project for which the bond was issued; and

   (2) Disburse the proceeds of any bond in the manner and under any restrictions that the authority provides in the resolution or trust agreement that authorizes the issuance of or secures the bond.

(b) Issuance of additional bonds if proceeds less than cost. --

   (1) If, for any reason, the proceeds of an issue of bonds are less than the cost of the project for which the authority issued the bonds, the authority may issue additional bonds, in a manner similar to that followed in issuing the original bonds, to provide the amount of the deficit.

   (2) Unless otherwise provided in the resolution or trust agreement that authorizes the issuance of or secures the original bonds, additional bonds issued under this subsection:

      (i) Are of the same issue as the original bonds; and

      (ii) Are entitled to payment from the same fund, without any preference or priority being given to the original bonds.

(c) Use of excess proceeds. -- If the proceeds of an issue of bonds exceed the cost of the project for which the authority issued the bonds, the authority shall deposit the surplus to the credit of the reserve account or sinking fund for the bonds.

HISTORY: 1985, ch. 173, § 2.