CHAPTER 14 - TRANSFER OF FUNDS FOR USE OF GENERAL FUND
AN ACT AUTHORIZING THE STATE OF DELAWARE TO BORROW MONEYS FROM THE STATE SCHOOL FUND AND FUNDS ALLOCATED TO THE STATE HIGHWAY DEPARTMENT FOR USE OF THE GENERAL FUND.
Be it enacted by the Senate and House of Representatives of the State of Delaware in General Assembly met:
Section 1. That, beginning July 1, 1935, and on the first day of each of the six months immediately ensuing thereafter the State Treasurer is hereby authorized and directed in behalf of the State of Delaware and for the use of the General Fund of this State, to borrow from the funds now or hereafter allocated to the State Highway Department such sum or sums as shall be necessary to meet the current expenses as appropriated by law not exceeding in any one month the sum of One Hundred Fifty Thousand Dollars ($150,000.00), and the total sum or amount borrowed not exceeding Six Hundred Thousand Dollars ($600,000.00); also to borrow for the same purpose from the State School Fund a sum or sums not exceeding in any one month the sum of One Hundred Thousand Dollars ($100,000.00), and the total sum or amount borrowed not exceeding Four Hundred Thousand Dollars ($400,000.00), provided, however, that in case the total amount borrowed during the above six months period from the two funds shall be less than One Million Dollars ($1,000,000.00), the amounts borrowed from the Highway Department and from the School Fund shall be approximately in the ratio of 60 to 40.
Section 2. On the date of the borrowing of each of the sums noted above, there shall be delivered to the State Treasurer a certificate of indebtedness for such sum or sums borrowed, which certificates shall bear interest at the current rate paid by the State Depository. Funds for the payment of this interest shall be taken from the revenues obtained from the Liquor Control Commission. These certificates shall be in negotiable form in accordance with the provisions of the Uniform Negotiable Instrument Act of this State.
They shall be signed in the name of the State of Delaware by the Governor, the Secretary of State, and the State Treasurer and shall have the great seal of the said State impressed thereon or affixed thereto. Said certificates shall be a direct general obligation of the State and the public faith and credit of the State of Delaware is hereby expressly pledged for the full and complete payment of the debt, principal and interest. The principal and interest of such certificate shall be exempt from taxation by the State or any political subdivision thereof for any purpose.
Such certificate of indebtedness shall recite that it is issued for the purpose set forth in Section 1 of this Act and that it is issued in. pursuance of this Act and the Constitution of this State and such recital shall be conclusive evidence of the authority of the State of Delaware to issue such certificate and of its validity. Upon the sale and delivery to said treasurer of the certificate of indebtedness for which provision is made in this Act, the legality and validity of such certificate shall never thereafter be questioned in any court of law or equity by the State of Delaware or by any person or persons for its use or in its behalf, and this provision shall be and become part of the contract and obligation represented by said certificate of indebtedness.
Section 3. Form of Certificate:--Such certificates of indebtedness shall conform as nearly as possible to the following form, to wit:
(a) Certificate of indebtedness to the Trustee of the School Fund.
(b) Certificate of indebtedness to the State Highway Department.
Pursuant to the constitution of the State of Delaware these presents certify and make known to all whom it may concern that the State of Delaware acknowledges its indebtedness to, and pledges its faith to pay to the State School Fund (or State Highway Department) in the full sum of $ lawful money of the United States of America to be used for the purpose of replenishing the General Fund of the State of Delaware, with interest thereon, at the rate of per annum, which interest the said State, by and through its several State funds hereby faithfully promises to pay semi-annually on the first day of January and first day of July in every year of the life of said certificate after its issuance, beginning on the first day of January next, to the Trustee of the School Fund (or to the State Highway Department) at the Farmers' Bank of the State of Delaware at Dover, Delaware; and this certificate of indebtedness shall be payable at the aforesaid Farmers' Bank at Dover, Delaware, on A. D the day of its maturity, upon presentation thereat and surrender thereof, but it may be redeemed at the option of the State of Delaware at face value and accrued and unpaid interest, if any, on the first day of March or on the first day of September after this certificate of indebtedness shall have been issued five years, upon thirty days' notice in writing given to the Trustee of the School Fund.
IN WITNESS WHEREOF, The Great Seal of the State of Delaware is hereunto affixed, and the hands of the Governor, Secretary of State and State Treasurer subscribed this ____ day of ____ in the year of our Lord one thousand nine hundred and thirty ____ and of the independence of the United States the one hundred and _____
Secretary of State
Section 4. Certificates of Indebtedness--How Refunded:--The Governor, Secretary of State and State Treasurer or a majority of them are hereby authorized, empowered and directed to have prepared, as hereinafter provided, bonds of the State of Delaware in the sum of $ _____, the amount of the aforesaid certificates of indebtedness and no more, when and if during the life of the said certificates of indebtedness provided in this Act, the State Treasurer shall find that the moneys in the School Fund are insufficient to meet the appropriations made or to be made by the General Assembly for public school purposes, or if the State Treasurer shall find that the moneys to the credit of the State Highway Department shall be insufficient to meet the requirements of that Department in carrying out the purposes for which said Department was created. When and if the State Treasurer shall so find, he is hereby authorized and directed to sell any and all of the bonds authorized in this Section at not less than par and accrued interest for the purpose of meeting such deficiency. Such bonds shall be in denominations of One Thousand Dollars ($1,000.00) or multiples thereof and shall have such coupon rate and maturity date as will enable them to be sold at a price of not less than par. The Governor, Secretary of State and State Treasurer or a majority of them are hereby authorized to determine the coupon rate and the maturity date of these bonds. The said bonds shall be numbered consecutively and shall be dated the first day of the month in the year of Our Lord in which they are issued. They shall bear interest from and after that date at the rate fixed as above, interest to be payable on the first day of January and the first day of July in each year in which such bonds remain unpaid, at the Farmers' Bank of the State of Delaware, upon presentation of coupons representing such semi-annual interest, which interest shall be paid by the State Treasurer from the same sources as provided in Section 3 of this Act, for interest payment on the certificate or certificates of indebtedness hereinbef ore provided. The principal of said bonds shall be payable at said bank _____ years after date thereof on presentation and surrender thereof, but the said bonds or any of them may be redeemed at the option of the State at not exceeding one hundred and four (104) per centum of the principal on any interest payment date after the expiration of ten years from the date of issue upon thirty days' notice printed in one newspaper published in the City of Philadelphia and one newspaper published in the State of Delaware. The said bonds shall be signed in the name of the State by the Governor, the Secretary of State and the State Treasurer and shall have the Great Seal of the State of Delaware impressed thereon or affixed thereto. Attached interest coupons shall be authenticated by the signature or facsimile signature of the State Treasurer and said coupons attached to each bond shall be numbered consecutively and bear the number of the bond to which they are attached.
Section 5. Form of Bond:--The said bond shall be in the following form, to wit:
THE UNITED STATES OF AMERICA
STATE OF DELAWARE
No ____ General Fund Loan of 1935
These presents certify and make known that the State of Delaware is held and firmly bound unto the bearer in the sum of ____ (Dollars) ($____),
lawful money of the United States of America, which the said State promises and binds itself to pay at the Farmers Bank of the State of Delaware at Dover, on the first day of _______ 19___, with interest at the rate of ___ per centum per annum, likewise payable at the Farmers Bank of the State of Delaware at Dover on the first day of January and the first day of July of each and every year, while the said principal sum remains unpaid, upon the presentation, respectively, of the coupons hereto annexed representing such semi-annual installments of interest, provided, however, and it is expressly stipulated, that the said State reserves the right and power at its option to call in, pay and redeem this bond at one hundred and four per centum of its face value and accrued and unpaid interest thereon, if any, on any interest payment date after the expiration of ten years from the date of its issue, pursuant to the notice in that behalf prescribed by an Act of the General Assembly of the State of Delaware under the authority of which this bond is issued.
Dated at Dover, Delaware, the first day of ______ 19___
WITNESSETH the Great Seal of the State of Delaware and the hands of the Governor, Secretary of State and State Treasurer, the day and year aforesaid.
Secretary of State
Section 6. Form of Coupon:--The coupons attached to each bond shall be in the following form, to wit:
The State of Delaware will pay to the bearer at the Farmers Bank of the State of Delaware at Dover on the first day of ______ A. D. 19___ the sum of _______ Dollars for six months' interest on bond No _____ General Fund Loan of 1935. Dated __________
It shall be the duty of the State Treasurer to provide a record of the proper size and form to be retained in his office so ruled as to afford a separate space for each coupon and the space at the top of each page of said record for each bond when paid, and * each space at the top of said record shall bear the same number as the bond, the record whereof is intended to be preserved. As the said coupons are paid, it shall be the duty of the State Treasurer to mark the same in red ink across the face "Paid", cut each of them into two pieces lengthwise, paste the pieces in the aforesaid space for coupons in the record aforesaid.
Section 7. Redemption Receipt Form:--As the said bonds shall be paid and redeemed, the State Treasurer shall cause the same to be cancelled by making a line with red ink through the signatures of the Governor, Secretary of State and State Treasurer and also writing across the face thereof in red ink the words:
This bond paid and redeemed this _____ day of _____ A D. 19___
When paid and redeemed the said bonds shall be pasted in the proper spaces aforesaid.
Section 8. Sale of Bonds:--The State Treasurer is hereby directed to advertise twice a week for four successive weeks, in such newspapers and journals in and out of the State of Delaware as' in his judgment may be conducive to the sale of said bonds, that he will receive bids at such place or places as may be named in said advertisement for such bonds under such regulations as may be made in the discretion of the State Treasurer, and upon the day mentioned in said advertisement as the day for opening of the bids for said bonds, the said State Treasurer shall receive such bids for the purchase of such bonds and, on opening of said bids, shall award such bonds to the highest responsible bidder or bidders therefor, for cash, provided the amount bidden is not less than the amount required by the provisions of this Act and is adequate in the judgment of the said State Treasurer. If two or more responsible bidders have made the same bid and such bid is the highest, the bonds shall be awarded to such highest responsible bidders bidding the same price in a ratable proportion. If the said bonds so offered for sale are not bid for, or if an insufficient price be bid for them, they may be subsequently disposed of under the direction of the said State Treasurer, at private sale upon the best terms he can obtain for the same, provided that said bonds shall not be so sold for less than the highest price, if any, that shall have been bid for them. The State Treasurer upon receipt of any money from the proceeds of the sale of such bonds shall place the same' to the credit of the State School Fund (or State Highway Department) and such moneys so received are hereby appropriated for the purpose of refunding or redeeming the certificates of indebtedness as provided for in this Act, or so much thereof as remains unredeemed, in the amount equal to the sum received from the proceeds of the sale of such bonds, and the interest thereon shall be payable in accordance with the unredeemed portion of said certificate.
Section 9. Amortization of Debt:--After the creation of the indebtedness of this State as authorized by this Act, for the purpose of amortizing and paying said indebtedness and retiring the certificate of indebtedness evidencing the same, the State Treasurer shall be and he is hereby authorized and directed to apply the State Sinking Fund or any other State fund which may be specifically provided for that purpose by Legislative act.
Section 10. Expenses--How Paid:--Any expense incurred for engraving and printing, clerical, legal or other services necessary to carry out the duties imposed on the Governor, Secretary of State and State Treasurer by the provisions of this Act shall be paid from the State Treasury from moneys not otherwise appropriated.
Section 11. Date Effective:--This Act shall become in full force and effect upon its approval.
Approved February 28, 1935.