Maryland Debt - Public Section 33
§ 33.
(a) (1) In this section the following words have the meanings indicated.
(2) "Authorizing resolution" means an administrative resolution adopted by the legislative body of a county.
(3) "County" means:
(i) Any county in the State or the Mayor and City Council of Baltimore; or
(ii) Any combination of two or more of the jurisdictions specified in item (i) of this paragraph that have entered into an agreement under the provisions of this section.
(4) (i) "Note" means any evidence of indebtedness of a county issued under the provisions of this section.
(ii) "Note" includes a note that is classified as commercial paper or as a refunding note, bonds, refunding bonds, or other obligations.
(5) "State share", with reference to a particular county on a particular date, means the aggregate amount of the anticipated State share of the costs of public school construction and capital improvements, under § 5-301 of the Education Article that:
(i) Has been approved by the Board of Public Works; and
(ii) Has not been advanced to the county.
(b) (1) (i) A county may from time to time borrow money and incur indebtedness through the issuance and sale of notes in anticipation of the receipt of all or part of the county's State share.
(ii) The amount borrowed may not exceed at any one time the amount of the State share in anticipation of the receipt of which the county sells the notes.
(iii) In the calculation of the maximum principal amount of notes that may be outstanding from time to time, the State share may not be reduced with respect to any outstanding notes except on receipt by the county of funds advanced by the State with respect to the State share and payment of notes with those funds.
(2) A county may from time to time enter into an agreement or agreements with one or more other counties to provide for the issuance and sale on a consolidated basis of notes in anticipation of the receipt of all or part of the aggregate State shares of the participating counties.
(c) (1) The principal of the notes may be paid from:
(i) The proceeds of all or part of the State share for a county; or
(ii) Any other revenues that are pledged to the payment of the notes in the authorizing resolution.
(2) The interest on the notes may be paid from any revenues, other than the proceeds of the State share for a county, that are pledged to the payment of the notes in the authorizing resolution.
(3) (i) The county may pledge its full faith, credit, and taxing power to the payment of the principal and interest on the notes in the authorizing resolution.
(ii) If the county makes a pledge under the provisions of this paragraph, in each fiscal year that any of the notes are outstanding, the county shall levy or cause to be levied ad valorem taxes on all the assessable property within the corporate limits of the county in rate and amount sufficient to provide for or assure the payment of, when due, the principal and interest on the notes maturing in each fiscal year.
(iii) If the proceeds from the taxes levied in any fiscal year prove inadequate for the payment, the county shall levy or cause to be levied additional taxes in the succeeding fiscal year to make up any deficiency.
(4) In addition to the State share allocated under this section for public school construction and public school capital improvements, a county may apply to the payment of the principal of any notes issued under this section funds granted or otherwise made available to the county for financing the construction and improvements by:
(i) The State or an agency or instrumentality of the State;
(ii) The federal government or an agency or instrumentality of the federal government; or
(iii) Any other source.
(5) A county may apply to the payment of the interest on any notes issued under the provisions of this section funds granted or otherwise made available to the county for financing the construction and improvements by:
(i) The State or any agency or instrumentality of the State, except for the State share allocated under this section for public school construction and public school capital improvements;
(ii) The federal government or an agency or instrumentality of the federal government; or
(iii) Any other source.
(d) The county may expend the net proceeds of the sale of an issue of notes only to pay the costs of public school construction or public school capital improvement projects that have been approved at any time by the Board of Public Works in anticipation of State funds for all or a part of those construction or improvement projects or to refund one or more issues of notes.
(e) (1) The notes shall be authorized by a resolution.
(2) The authorizing resolution shall:
(i) Cite the authority for the issuance of the notes and the amount authorized; and
(ii) Fix:
1. The maturity or maturities;
2. The interest rate or rates or manner of determining the rate or rates, which may include a variable rate;
3. Other terms on the notes;
4. The price or prices at which the notes will be sold, which may be at, above, or below the face value of the notes or the manner of determining the price or prices at which the notes will be sold;
5. The manner of the sale of the notes, which may be by private negotiation by the county with a prospective purchaser or purchasers, if deemed by the county to be for the county's best interest; and
6. The terms or conditions, if any, under which notes may or shall be redeemed prior to their stated maturity.
(3) The authorizing resolution may provide for:
(i) The issuance of the notes from time to time in series, as funds are required; and
(ii) The renewal of the notes at maturity with or without resale.
(f) (1) If the authorizing resolution provides, notes may be secured by:
(i) A trust indenture with a corporate trustee or trustees, which may be any trust company or bank having the powers of a trust company within or without the State; and
(ii) A letter of credit, line of credit, or other credit or liquidity instrument from or with a bank or other lending institution.
(2) A security provided by an authorizing resolution under this subsection may be secured by the same security given to holders of the notes for the performance by a county of the county's monetary obligations under the notes.
(g) A note issued under this section is not subject to §§ 10 and 11 of this article.
(h) Notes are valid and binding obligations of the issuing county in accordance with the terms of the notes even if:
(1) An official whose signature appears on any notes ceases to be an official prior to the delivery of the notes; or
(2) An official whose signature appears on any of the notes becomes an official after the date of issue of the notes.
(i) The notes, the transfer of the notes, the interest payable on the notes, and any income derived from the notes, including any profit realized in the sale or exchange of the notes, shall at all times be and remain exempt from taxation of any kind and nature by the State of Maryland and by any county, municipal corporation, or other political subdivision of the State.
(j) (1) The resolution and notes and agreements authorized under the resolution are not subject to:
(i) The procedures required for legislative acts; or
(ii) A referendum.
(2) Unless a State constitutional provision otherwise requires, the authorizing resolution may include covenants regarding the payment of the principal of and interest on the notes notwithstanding any:
(i) Limitations in the county's charter;
(ii) Public general law; or
(iii) Public local law.
(3) (i) A county may adopt an authorizing resolution without complying with any procedures in:
1. The county's charter;
2. A public general law; or
3. A public local law.
(ii) Public school construction projects and public school capital improvements financed by a county under the provisions of this section do not constitute a capital project of a county for purposes of any constitutional, charter, statutory, or other limitation.
(4) Any notes or agreements issued or entered into under this section may not be subject to or included in any constitutional, charter, statutory, or other limitation for the issuance of indebtedness by a county.
(5) It is the intent of the General Assembly that the provisions of this section are self-executing.
(k) (1) (i) Subject to the provisions of subparagraph (ii) of this paragraph, an agreement entered into by counties under this section may have the provisions, terms, and conditions that the counties set forth in the authorizing resolution that the counties adopt.
(ii) An agreement may not expire before the redemption or maturity of the notes issued under the agreement.
(2) An agreement may provide that a trust or similar arrangement may:
(i) Be established by two or more counties;
(ii) Be authorized to sell notes on the same terms and in the same manner as counties may sell notes under this section; and
(iii) Loan the proceeds of the notes to the counties.
(l) The authority to borrow money and issue notes granted to counties by this section is:
(1) In addition and supplemental to any other power granted to a county by any other law; and
(2) Not in derogation of any other existing power to borrow money that a county has.
