2016 Delaware Code
Title 29 - State Government
CHAPTER 74. BONDS AND NOTES OF THE STATE
§ 7422. Limitations on debt and other obligations.

(a) For the purposes of this section:

(1) "Aggregate maximum annual payments" on all tax supported obligations and all Transportation Trust Fund debt obligations outstanding, (plus certain lease obligations as described in subsection (c) of this section), means the maximum payments due with respect to all such obligations in any 1 fiscal year. In any case where the terms of any such obligation include limitations on the incurrence of additional debt, the determination of maximum annual payments with respect to such obligation shall be determined consistently with those terms.

(2) "Tax supported obligations of the State" means: (A) All obligations of the State or any agency or authority thereof to which the State's full faith and credit is pledged to pay directly or by guarantee (provided that any such guaranteed obligations shall be included only to the extent any such obligations are in default); and (B) all obligations of the State or any agency or authority thereof extending beyond 1 year with respect to the lease, occupancy or acquisition of property which are incurred in connection with debt financing transactions (e.g., certificates of participation) and which are payable from taxes, fees, permits, licenses and fines imposed or approved by the General Assembly. Tax supported obligations do not include: (A) Obligations incurred to acquire a like principal amount of full faith and credit obligations issued by a local school district to the extent such local school district obligations are not in default; (B) any obligations of the Delaware Transportation Authority; (C) any tax or other revenue anticipation notes or bonds of the State; or (D) any obligations to the extent that the debt service with respect thereto is reasonably expected to be offset (as determined by the Secretary of Finance) by lease payments, user fees, federal grants or other payments from some source other than the General Fund. Such payments shall be used expressly for the purpose of paying such debt service.

(3) "Transportation Trust Fund debt obligations" means all debt obligations of the Delaware Transportation Authority, including all obligations extending beyond 1 year with respect to the lease, occupancy or acquisition of property which are incurred in connection with debt financing transactions (e.g., certificates of participation), and which in any case are payable from the Transportation Trust Fund. Transportation Trust Fund debt obligations do not include any obligations to the extent that the debt service with respect thereto is reasonably expected to be offset (as determined by the Secretary of Finance) by lease payments, user fees, federal grants or other payments from some nonstate source.

(b) The aggregate principal amount of tax supported obligations of the State which may be authorized by the State in any 1 fiscal year may not exceed 5% of the estimated net General Fund revenue for that fiscal year from all sources (not including unencumbered funds remaining at the end of the previous fiscal year) as determined by the joint resolution approved by a majority of the members elected to each House of the General Assembly and signed by the Governor in connection with the adoption of the annual budget appropriation bill for that fiscal year. Any amount of tax supported obligations which are duly authorized in any fiscal year within the limits of this subsection, and then are later deauthorized, may subsequently be reauthorized without regard to the authorization limit otherwise provided by this subsection. Any amount of tax supported obligations which were duly authorized before July 1, 1991, and which are duly deauthorized after June 30, 1991, may subsequently be reauthorized without regard to the authorization limit otherwise provided by this subsection. Obligations authorized to refund other obligations of the State shall not be subject to the limits of this subsection (b).

(c) No tax supported obligation of the State and no Transportation Trust Fund debt obligation of the Delaware Transportation Authority may be incurred if the aggregate maximum annual payments on all such outstanding obligations (plus certain lease obligations described below) will exceed 15% of the estimated aggregate General Fund revenue from all sources (not including unencumbered funds remaining at the end of the previous fiscal year), plus estimated Transportation Trust Fund revenue, in both cases for the fiscal year following the fiscal year in which such obligation is incurred, such estimated revenue as determined by the most recent projections made by the Delaware Economic and Financial Advisory Council and adjusted, if appropriate, by the fiscal impact of subsequently enacted legislation as certified by the Secretary of Finance. The lease obligations referred to in the preceding sentence shall mean: (i) All obligations of the State or any agency or authority thereof which are payable from taxes, fees, permits, licenses and fines imposed or approved by the General Assembly; and (ii) all obligations of the Delaware Transportation Authority which are payable from the Transportation Trust Fund, which in either case extend beyond one year and are with respect to the lease, occupancy or use of property provided that such lease obligations shall not include any obligations, the lease payments with respect to which are reasonably expected to be offset (as determined by the Secretary of Finance) by lease payments, user fees, federal grants or other payments from some nonstate source. For the purposes of this subsection, the maximum annual payments on the above-described lease obligations shall be as of the most recent date available as certified by the Secretary of Finance.

(d) No obligation to which the State's full faith and credit is pledged may be incurred if the maximum annual debt service payable in any fiscal year on all such outstanding obligations will exceed the State's cumulative cash balances for the fiscal year following the fiscal year in which such obligation is incurred as estimated by the Secretary of Finance. For the purposes of this subsection, there shall not be included: (i) Obligations incurred to acquire a like principal amount of full faith and credit obligations issued by a local school district to the extent such local school district obligations are not in default; (ii) obligations guaranteed by the State except to the extent such obligations are in default; (iii) general obligation bonds of the State issued prior to January 1, 1987, for the transportation related projects as certified by the Secretary of Finance; (iv) tax or other revenue anticipation notes of the State; or (v) any obligations to the extent that the debt service with respect thereto is reasonably expected to be offset (as determined by the Secretary of Finance) by lease payments, user fees, federal grants or other payments from some source other than the General Fund.

(e) There shall be attached to every bill and amendment introduced in the House of Representatives and/or in the Senate, of the General Assembly, which authorizes the incurrence of a tax supported obligation described in subsection (b), a debt statement in substantially the following form:

Office of Secretary of Finance

Debt Limit Statement Dated ______

This Debt Limit Statement to be attached to ____________ as required by § 7422, Title 29, Delaware Code

(1) Estimated Net General Fund revenue for the fiscal year ending June 30, ___, as per the joint resolution of the House and Senate and signed by the Governor in connection with the adoption of the annual Budget Appro-

priation Bill for that fiscal year $ ______

(2) Multiply by 5% x      .05

(3) Maximum aggregate principal amount of new tax-supported obligations which may be authorized by the State

in the fiscal year ending June 30, ___ $ ______

(4) Less aggregate principal amount of previously autho-

rized tax-supported obligations subject to debt limit $ ______

(5) AVAILABLE DEBT LIMIT prior to appended legislation

(3-4) $ ______

(6) Less aggregate principal amount of new tax-supported obligations subject to debt limit to be authorized pursu-

ant to appended legislation $ ______

(7) REMAINING DEBT LIMIT (5-6) $ ______

                        __________

                        Secretary of Finance

                        _____

                         Date

The Secretary of Finance shall file said debt limit statement within 10 days of said joint resolution with the Office of the Controller General and the Director of the Office of Management and Budget.

(f) The certification of the Secretary of Finance referred to in this section shall be in substantially the following form:

Certification of Secretary of Finance Regarding Certain Revenue Supported Debt

__ B. No. ___ would authorize the issuance of $ ______ principal amount of obligations of the State for the purposes of ____________. [Describe the arrangement pursuant to which it is expected that the debt service will be offset by lease or other payments].

Accordingly, I hereby certify that I reasonably expect that the debt service on $ ______ principal amount of the above-described bonds will be offset by payments to the State which are described in Title 29, Delaware Code, § 7422(a)(2)(D), (a)(3) or (d)(v).

______                                            ___________

Date                                             Secretary of Finance

29 Del. C. 1953, §§ 7422, 7423; 55 Del. Laws, c. 168, § 2; 57 Del. Laws, c. 176; 58 Del. Laws, c. 315, § 9; 58 Del. Laws, c. 420; 61 Del. Laws, c. 375, § 2; 62 Del. Laws, c. 146, §§ 6, 28; 63 Del. Laws, c. 189, § 5(h); 64 Del. Laws, c. 131, § 11(f); 68 Del. Laws, c. 7, § 1; 68 Del. Laws, c. 156, §§ 24(a)-(g); 69 Del. Laws, c. 10, § 14; 75 Del. Laws, c. 88, § 21(13).;