Maryland Department of Business and Economic Development Section 5-206
§ 5-206.
(a) The Corporation may provide by resolution for the issuance at 1 time, or in series from time to time, revenue bonds of the Corporation for the purpose of financing or refinancing all or a part of the costs of a project, and for all other lawful corporate purposes of the Corporation set out in this subtitle.
(b) The bonds shall be dated, shall bear interest at a rate or rates, and shall mature at such time or times not exceeding 40 years from the date or dates of their respective issues, as may be determined by the Corporation, and may be sold at the price or prices and under the terms and conditions fixed by the Corporation before the issuance of the bonds. The principal of and the interest on the bonds may be made payable in any lawful medium. The proceeds of any bonds may be placed in escrow pending application of the proceeds to the purposes for which the bonds are issued.
(c) The bonds shall not be deemed to constitute a debt, liability, or a pledge of the full faith and credit of the State of Maryland or of any political subdivision thereof other than the Corporation, but such bonds shall be payable solely from the funds herein provided. All bonds of the Corporation shall contain on their face a statement to the effect that neither the State of Maryland nor any political subdivision thereof other than the Corporation shall be obligated to pay the same or the interest on them except from revenues pledged to them and that neither the full faith and credit nor the taxing power of the State or any political subdivision thereof is pledged to the payment of the principal of or the interest on the bonds. The issuance of bonds under this subtitle is not directly or indirectly or contingently an obligation, moral or other, of the State of Maryland or any political subdivision thereof to levy or pledge any form of taxation whatever therefor or to make any appropriation for their payment. Nothing in this section shall prevent the Corporation from pledging its full faith and credit to the payment of bonds authorized under this subtitle. However, this section does not limit the ability of the State or a subdivision to set, impose, or collect an assessment, rate, fee, or charge to pay to the Corporation the cost of a project, including the principal of and interest on a bond, under an agreement between the Corporation and the State or political subdivision.
(d) The Corporation shall determine the form of the bonds, the manner of executing the bonds, the denomination or denominations of the bonds, and the place or places of payment of principal and interest which may be a bank or trust company within or outside of the State.
(e) The bonds shall be executed in the manner determined by the Corporation. If any officer whose signature or facsimile thereof appears on any bond ceases to be such officer before the delivery of the bonds, the signature or facsimile thereof shall nevertheless be valid and sufficient for all purposes the same as if the officer had remained in office until the delivery.
(f) All bonds issued under the provisions of this section have and are hereby declared to have, as between successive holders, all the qualities and incidents of negotiable instruments under the Negotiable Instruments Law of the Uniform Commercial Code of this State. Provisions may be made for the registration of bonds.
(g) The bonds shall be sold by the Corporation, at public or private sale, in such manner and for such price as it may determine to be for its best interests. None of the provisions of §§ 8-206 and 8-208 of the State Finance and Procurement Article have any application to the bonds hereby authorized and the bonds are explicitly exempted from those provisions.
(h) (1) The Corporation may provide for the issuance of its bonds for the purpose of refunding any bonds then outstanding, including the payment of any redemption premium thereon and any interest accrued or to accrue to the earliest or any subsequent date of redemption, purchase, or maturity of the bonds, and, if deemed advisable by the Corporation, for the additional purpose of paying all or any part of the cost of a project. Refunding bonds may be issued by the Corporation for any corporate purpose, including the public purposes of realizing savings in the effective costs of debt service, directly or through a debt restructuring, or alleviating an impending or actual default or relieving the Corporation of contractual agreements which, in the opinion of the Corporation, have become unreasonably onerous or impracticable or impossible to perform. Refunding bonds in 1 or more series may be issued in an amount in excess of that of the bonds to be refunded. Without limiting the extent or nature of any sources of payment provided by the Corporation, refunding bonds may be made payable from escrowed bond proceeds and from interest, income, and profits, if any, on investments. Such sources may be so applied in addition to other lawful uses and shall constitute revenues of a project under this subtitle.
(2) The proceeds of bonds issued for the purpose of refunding outstanding bonds may, in the discretion of the Corporation, be applied to the purchase or retirement at maturity or redemption of such outstanding bonds either on their earliest or any subsequent redemption date, and may, pending such application, be placed in escrow to be applied to such purchase or retirement at maturity or redemption on such date as may be determined by the Corporation.
(3) (i) Any escrowed bond proceeds, pending such use, may be invested and reinvested in investments and other obligations maturing at such time or times as shall be appropriate to assure the prompt payment, as to principal, interest, and redemption premium, if any, of the outstanding bonds to be so refunded.
(ii) The investment of the bond proceeds shall be:
1. Determined by the Corporation; or
2. If the proceeds of the bonds are being loaned by the Corporation to a person pursuant to subsection (k) of this section, determined by the person.
(iii) The interest, income, and profits, if any, earned or realized on the investments or other obligations may also be applied to the payment of the outstanding bonds to be so refunded.
(iv) After the terms of the escrow have been fully satisfied and carried out, any balance of the proceeds and interest, income, and profits, if any, earned or realized on the investments or other obligations may be returned to the Corporation or the person being loaned the proceeds of the bonds for use in any lawful manner.
(i) (1) The portion of the proceeds of any bonds issued for the purpose of paying all or any part of the cost of a project may be invested and reinvested in investments and any other obligations maturing not later than the time or times when such proceeds will be needed for the purpose of paying all or any part of such cost.
(2) The investment of the bond proceeds shall be:
(i) Determined by the Corporation; or
(ii) If the proceeds of the bonds are being loaned by the Corporation to a person pursuant to subsection (k) of this section, determined by the person.
(3) The interest, income, and profits, if any, earned or realized on the investments or other obligations may be applied to the payment of all or any part of the cost or may be used by the Corporation or the person being loaned the proceeds of the bonds in any lawful manner.
(j) The Corporation may pledge or assign all or any portion of its revenues, its rights to receive them, or moneys and securities in the funds and accounts established to secure its bonds and any lien or security interest granted or assignment made by the Corporation. Any pledge or assignment shall be valid and binding against any person having a claim of any kind against the Corporation, in contract, tort, or otherwise, irrespective of whether the person has notice and shall be prior to such claim. No resolution, trust indenture, assignment, financing agreement, or other instrument creating a lien on, security interest in, or assignment of any revenues, its rights to receive revenues or moneys and securities in the funds and accounts pledged to bonds of the Corporation need be filed or recorded except in the records of the Corporation.
(k) The Corporation may lend or otherwise make available the proceeds of its bonds to any person in order to finance or refinance the costs of any project, and may enter into such financing agreements, mortgages, and other instruments as it may determine to be necessary or desirable to evidence or secure such loan. If any project is leased to any person, the lease may provide that upon the payment of the bonds that financed or refinanced the cost of the project and interest thereon (or provision for such payment satisfactory to the Corporation), the lessee or another person may or shall purchase or otherwise acquire the project for such consideration, which may be nominal, as may be established by the Corporation.
(l) (1) At the discretion of the Corporation, the bonds may be secured by a trust indenture by and between the Corporation and corporate trustee, which may be any trust company or bank having the powers of a trust company within or outside of the State. Either the resolution providing for the issuance of bonds or the trust indenture may contain provisions for protecting and enforcing the rights and remedies of the bondholders, including covenants setting forth the duties of the Corporation in relation to the custody, safeguarding, and application of all moneys. It shall be lawful for any corporation or trust company incorporated under the laws of this State to act as depository of the proceeds of the bonds or revenues and to furnish any indemnity bonds or to pledge any securities that the Corporation requires.
(2) The resolution or trust indenture may set forth the rights and remedies of the bondholders and of any trustee, and may restrict the individual right of action of bondholders. The Corporation may provide by resolution or by the trust indenture for the payment of the proceeds of the sale of the bonds and the revenues of the Corporation to such officer, board, or depository as it determines for their custody and for the method of disbursement, with such safeguards and restrictions as it determines. All expenses incurred in carrying out any trust indenture may be treated as a part of the cost of operation of the Corporation.
