AN ACT CREATING AND CHARTERING THE DELAWARE INDUSTRIAL BUILDING COMMISSION, AUTHORIZING THE COMMISSION TO ISSUE BONDS AND PLEDGING THE CREDIT OF THE STATE THEREFOR.
Be it enacted by the General Assembly of the State of Delaware (three-fourths of all the Members elected to each House thereof concurring therein):
Section 1. Title 6, Delaware Code, is amended by enacting a new Part IV as follows:
Part IV. COMMERCIAL DEVELOPMENT
Chapter 70. Delaware Industrial Building Commission
§ 7001. Findings and declarations of policy
It is determined and declared as a matter of legislative finding that
(a) The good order of the State and the health and welfare of its citizens depends upon the steady employment, in useful occupations of the citizens of the State.
(b) In certain areas of the State, many citizens of the State are employed sporadically or not at all. In these areas of the State, many citizens have heretofore found employment in agricultural pursuits. As agriculture becomes more efficient, and requires fewer employees for the maintenance of economic output levels, increasing numbers of citizens cannot find agricultural employment, Opportunities for other forms of employment in these areas are very limited. Such sporadic or non-existent employment opportunities threaten the economic stability of the State, discourage thrift, and depress the standard of living of the citizens of the State, all to the detriment of the public health, welfare, and order.
(c) Stable and useful employment can be made available for these citizens by the establishment of commercial and industrial enterprises in agricultural areas of the State.
(d) More than half of the other States in the United States have enacted legislation creating industrial development authorities for the encouragement of, and to provide assistance to, industrial enterprises in establishing manufacturing facilities in agricultural areas. The experience of States which have created development authorities for the building, leasing, or mortgage guaranty of industrial buildings demonstrates that such corporations serve the public purposes hereinbefore enunciated.
(e) The establishment of an Industrial Development Commission will promote the public health, welfare and order.
Therefore, it is declared to be the policy of this State to promote the health, welfare and the good order of the inhabitants thereof by the creation of a Commission to be known as the "Delaware Industrial Building Commission" which shall exist and operate for the purposes contained in this chapter. Such purposes are declared to be public uses for which the public money may be spent and the credit of the State pledged.
§ 7002. Creation and Organization of Commission
(a) The State of Delaware Industrial Building Commission hereinafter in this Act called the "Industrial Commission", is hereby created and established, and is constituted an agency of the State. The exercise by the Industrial Commission of the powers conferred by the Provisions of this Act shall be deemed and held to be the performance of essential governmental functions.
(b) The Industrial Commission shall consist of five Directors.
(c) The Directors of the Industrial Commission shall be appointed by the Governor, by and with the consent of a majority of the members elected to the Senate. When this Chapter becomes law, the Governor shall appoint one of the Directors to reside in the City of Wilmington for a term of one year, one of the Directors to reside in New Castle County other than the City of Wilmington for a term of two years, one of the Directors to reside in Kent County for a term of three years, and one of the Directors to reside in Sussex County for a term of four years. Upon the expiration of each stated term, the Governor shall thereafter appoint successors to the offices for terms of four years each, commencing, in each case, from the date of the expiration of the term of his predecessor. The fifth member of the Industrial Commission shall serve at the pleasure of the Governor and shall be Chairman of the Industrial Commission. He may be removed at any time by the Governor, and shall serve until he is removed by the Governor.
(d) During their respective terms of office a member shall reside in the county from which he is appointed and the City of Wilmington. No more than 3 members shall belong to the same political party.
§ 700.3 Purpose and Powers
(a) The Industrial Commission is hereby authorized to pledge the full faith and credit of the State to the guaranty of bonds issued by a certified development corporation, hereinafter defined, issued for any certified project of such development corporation. As a condition precedent to the pledge of the full faith and credit of the State, the Industrial Commission must find that the project for which the bonds are to be issued:
(1) Will be located in an area of the State where a substantial portion of the labor force in unemployed, or employed in seasonal work.
(2) Will consist of an industrial building or buildings which are all-purpose buildings, suitable for rental to general manufacturing industry.
(3) Will be leased or sold to a financially responsible person or corporation who has not been convicted of a major Labor Law violation by an agency or court of the Federal Government or agency or court of any State in the 2 years immediately prior to the approval of the person's or corporation's application for aid.
(4) Will yield sufficient income in rental or mortgage payments for the payment of principal and interest on the bonds.
(5) Will be leased or sold upon the condition that the prospective tenant, purchaser or occupant is legally obligated to purchase five per cent of the bonds issued by the development corporation for the project, said bonds to be pledged as security for the lease or mortgage.
(6) Will effectuate the purposes of this chapter.
(b) The Industrial Commission shall not have outstanding at any time guarantees in excess of ten million dollars. No individual project shall be guaranteed for an amount in excess of two million dollars.
(c) The Industrial Commission may exercise all powers necessary or convenient for the carrying out of the aforesaid purposes including, but without limiting the generality of the foregoing, the rights and powers described below.
(1) To sue and be sued, implead and be impleaded, complain and defend in all courts.
(2) To adopt, use and alter at will a seal.
(3) To acquire, purchase, hold, lease as lessee, and use any franchise, property, real, personal, or mixed, tangible or intangible, or any interest therein, necessary or desirable for carrying out the purpose of the Industrial Commission and to sell, lease as lessor, transfer, and dispose of any property or interest therein at any time required by it.
(4) To acquire by purchase, lease or otherwise, and to construct, improve, maintain, repair, and operate projects.
(5) To make by-laws for the management and regulation of its affairs.
(6) To appoint officers, agents, employees, and servants, to prescribe their duties, and to fix their compensation except as otherwise limited in this Chapter.
(7) To guarantee negotiable notes, bonds, refunding bonds, and other evidences of indebtedness or obligations of a development corporation; the bonds to have a maturity date not longer than 25 years from the date of issue; and to secure the payment of such bonds or any part thereof by pledge, or deed of trust of all, or any of the development corporations' revenues and receipts, and to make such agreements with the purchasers or holders of such bonds, or with others in connection with any such bonds, whether issued or to be issued, including the pledging of the full faith and credit of the State, as the Industrial Commission deems advisable, subject to the limitations of this Chapter and in general to provide for the security for the bonds and the rights of the holders thereof.
(8) To make contracts of every name and nature, and to execute all instruments necessary or convenient for the carrying on of its business.
(0) Without limitation of the foregoing to borrow money and accept grants from, and to enter into contracts, leases, or other transactions with any Federal agency, municipality, corporation or authority.
(1) To pledge, hypothecate, or otherwise encumber all or any of the revenues or receipts of the Industrial Commission, as security for all or any of the obligations of the Industrial Commission.
(2) To do all acts and things necessary for the promotion of its business and the general welfare of the Industrial Commission to carry out the powers granted to it by this Chapter or any other law.
(3) To enter into contracts with the municipalities, corporations or authorities for the use of any project of the Industrial Commission and fixing the amount to be paid therefor.
(4) All expenses incurred by the Industrial Commission shall be included and charged to the appropriate project to which they apply. Any refunds or reimbursements of such expenses shall be credited back to the same industrial project to which the original expense was charged. No expense of the Industrial Commission shall be charged to the General Fund of the State.
§ 7004. Bonds
(a) The bonds authorized to be guaranteed by this Chapter shall be authorized by resolution of the Industrial Commission and shall be of such series, bear such date or dates; mature at such time or times not exceeding 25 years from their respective dates; bear interest at such rate or rates; be in such denominations; be in such form, either coupon or fully registered, without coupon; carry such registration, exchangeability, and interchangeability privileges; be payable in such medium of payment and at such place or places; be subject to such terms of redemption; and be entitled to such priorities in the revenues or receipts of the issuing development corporation as such resolution or resolutions may provide. The bonds shall be signed by such officers as the development corporation shall determine, and coupon bonds shall have attached thereto interest coupons bearing the facsimile signature of the treasurer of the development corporation, all as may be prescribed in such resolution or resolutions. Any such bonds may be issued and delivered notwithstanding that one or more of the officers signing such bonds, or the treasurer whose facsimile signature shall be upon the coupon, or any officer thereof, shall have ceased to be such officer or officers at the time when such bonds shall actually be delivered.
The bonds may be sold at public or private sale for such price or prices as the development corporation shall determine. Pending the preparation of the definitive bonds, interim receipts may be issued to the purchaser or purchasers of such bonds and may contain such terms and conditions as the development corporation may determine.
(b) Any resolution or resolutions authorizing any guarantee of bonds may contain provisions which shall be part of the contract with the holders thereof as to (1) pledging the full faith and credit of the State for such obligations or restricting the same to all or any of the revenues of the development corporation from all or any projects or properties; (2) the construction, improvement, operation, extension, enlargement, maintenance, and repair of the project, and the duties of the development corporation with reference thereto; (3) the terms and provisions of the bonds; (4) limitations on the purposes to which the proceeds of the bonds then, or thereafter to be issued, or of any loan or grant by the United States, may be applied; (5) the setting aside of reserves or sinking funds and the regulation and disposition thereof; (6) limitations on the issuance of additional bonds; (7) the terms and provisions of any deed of trust or indenture securing the bonds, or under which the same may be issued, and (8) any other additional agreements with the holders of the bonds.
(c) The development corporation may enter into any deeds of trust, indentures, or other agreements, with any bank or trust company or other person or persons in the United States having power to enter into the same, including any Federal agency, as security for such bonds, and may pledge the credit of the State as hereinbefore limited, and all or any of the revenues or receipts of the development corporation thereunder. Such deed of trust, indenture, or other agreement, may contain such provisions as may be customary in such instruments, or as the Industrial Commission may authorize, including provisions as to: (1) the construction, improvement, operation, maintenance, and repair of any project and the duties of the development corporation with reference thereto; (2) the application of funds and the safeguarding of funds on hand or on deposit; (3) the rights and remedies of the trustee and holders of the bonds which may include restrictions upon the individual right of action of such bondholder, and (4) the terms and provisions of the bonds or the resolutions authorizing the issuance of the same.
(d) The bonds shall have all the qualities of negotiable instruments under the law merchant and the negotiable instruments law of the State of Delaware.
§ 7005. Development corporations
(a) Any non-profit corporation organized pursuant to Title 8, Delaware Code, may apply to the Industrial Commission for certification as a development corporation. The Industrial Commission shall certify a development corporation if it finds that
(1) The corporation is not for profit;
(2) A majority of the directors of the development corporation are citizens and residents of the State of Delaware, and have knowledge of business and employment conditions in Delaware;
(3) The development corporation, employs or can secure sufficient expert assistance to prepare applications for State guaranty of bonds, pursuant to section 7003 (a) of this chapter;
(4) The development corporation has, as its primary purpose, the effectuation of the purposes of this Chapter;
(5) The development corporation is solvent.
(b) The Industrial Commission may, after notice to the development corporation, withdraw the certification of the development corporation, if it finds that any of the conditions of subsection (a) hereof have been breached. Such withdrawal of certification shall not affect any previous guaranty of the credit of the State by the Industrial Commission.
§ 7006. Remedies of bondholders
(a) The rights and remedies conferred upon or granted to the bondholders in this Section shall be in addition to, and not in limitation, of, any rights and remedies lawfully granted to such bondholders by the resolution or resolutions providing for the issuance of bonds, or by any deed of trust, indenture, or other agreement under which the same may be issued. In the event that the development corporation shall default in the payment of principal of, or interest on any of the bonds authorized by this Chapter, after the principal and interest shall become due, whether at maturity or upon call for redemption, and such default shall continue for a period of 30 days, or in the event that the development corporation shall fail or refuse to comply with the provisions of this Chapter, or shall default in any agreement made with the holders of the bonds, the holders of 25 per cent in aggregate principal amount of the bonds then outstanding by instrument or instruments filed in the office of the Recorder of Deeds of the county, and proved or acknowledged in the same manner as a deed to be recorded, may appoint a trustee to represent the bondholders for the purpose provided in this Section.
(b) Such trustee, and any trustee under any deed of trust, indenture or other agreement, may, and upon written request of the holders of 25 per cent of such other percentages as may be specified in any deed or trust, indenture, or other agreement, in principal amount of the bonds then outstanding, shall, in his or its own name—
(1) By mandamus, or other suit, action or proceeding at law or in equity, enforce all rights of the bondholders, including the right to require the development corporation to collect rentals or other charges adequate to carry out any agreement as to or pledge of the revenues or receipts of the development corporation, and to require the development corporation to carry out any other agreements with, or for the benefit of the bondholders, and to perform its and their duties under this chapter;
(2) Bring suit upon the bonds;
(3) By action or suit in equity require the development corporation to account as if it were the trustee of an express trust for the bondholders;
(4) By action or suit in equity enjoin any acts or things which may be unlawful or in violation of the rights of the bondholders;
(5) By notice in writing to the development corporation declare all bonds due, and payable, and if all defaults shall be made good, then with the consent of the holders of 25 per cent or such other percentage as may be specified in any deed of trust, indenture, or other agreement, of the principal amount of the bonds then outstanding, to annul such declaration and its consequences.
(c) The Court of Chancery in and for the county wherein the development corporation is located shall have jurisdiction of any suit, action or proceedings by the trustee on behalf of the bondholders. Any trustee when appointed or acting under a deed of trust, indenture, or other agreement, and whether or not all bonds have been declared due and payable, shall be entitled as of right to the appointment of a receiver, who may enter and take possession of the facilities of the development corporation or any part or parts thereof, the revenues or receipts from which are, or may be, applicable to the payment of the bond in default; and operate and maintain the same, and collect and receive all rentals and other revenues thereafter arising therefrom, in the same manner as the development corporation might do, and shall deposit all such moneys in a separate account and apply the same in such manner as the court shall direct. In any suit, action or proceeding by the trustee the fees, counsel fees and expenses of the trustee, and of the receiver, if any, and all costs and disbursements allowed by the court shall be a first charge on any revenues and receipts derived from the facilities of the development corporation, the revenues or receipts from which are or may be applicable to the payment of the bonds in default. The trustee shall, in addition to the foregoing, have and possess all of the powers necessary or appropriate for the exercise of any functions specifically set forth in this Section, or incident to the general representation of the bondholders in the enforcement and protection of their rights.
(d) If the receiver appointed pursuant to subsection (c) exhausts the remedies provided by this Section without realizing sufficient funds for the payment of accrued interest, principal, costs and receivership expenses, including counsel fees, the receiver shall make demand upon the Industrial Commission for payment of the deficiency. The Industrial Commission shall issue a warrant to the State Treasurer in the amount of the deficiency, and the State Treasurer shall pay the warrant out of funds not otherwise appropriated or out of funds provided by the General Assembly for this purpose. Upon payment of the deficiency, the Industrial Commission shall succeed to all rights of the receiver.
(e) Nothing in this Section, or any other Section of this Chapter, shall authorize any receiver appointed pursuant to this Chapter for the purpose of operating and maintaining any facilities of the Industrial Commission to sell, assign, mortgage, or otherwise dispose of, any of the assets of whatever kind and character belonging to a development corporation. It is the intention of this Chapter to limit the powers of such receiver to the operation and maintenance of the facilities of a development corporation as the court shall direct; and no holder of bonds of a development corporation, nor any trustee shall ever have the right in any suit, action or proceedings at law or in equity to compel a receiver, nor shall any receiver be authorized, or any court be empowered to direct the receiver to sell, assign, mortgage, or otherwise dispose of, any assets of whatever kind or character belonging to a development corporation.
§ 7007. Limitation of powers
The State of Delaware hereby pledges to and agrees with any person, firm or corporation, or Federal agency subscribing to, or acquiring the bonds to be issued by a development corporation for the construction, extension, improvement, or enlargement of any project or part thereof, that the State will not limit or alter the rights vested in the development corporation until all bonds at any time issued, together with the interest thereon, are fully met and discharged. The State of Delaware further pledges to, and agrees with, the United States and any other Federal agency, that if any Federal agency constructs or contributes any funds for the construction, extension, improvement, or enlargement of any project, or any portion thereof, the State will not alter or limit the rights and powers of the development corporation in any manner which would be inconsistent with the continued maintenance and operation of the project or the improvement thereof, or which would be inconsistent with the due performance of any agreements between the development corporation and any such Federal Agency, and the development corporation shall continue to have and may exercise all powers granted in this chapter, so long as the same shall be necessary or desirable, for the carrying out of the purposes of this chapter, and the purposes of the United States in the construction or improvement or enlargement of the project or such portion thereof.
§ 7008. Bonds as legal investments for institutions and fiduciaries
Bonds issued under the provisions of this chapter are made securities in which all State and municipal officers and administrative departments, boards, and commissions of the State, all banks, bankers, savings banks, trust companies, saving and loan associations, investment companies, and other persons carrying on a bank business, all insurance companies, insurance associations, and other persons carrying on insurance business, and all administrators, executors, guardians, trustees, and other fiduciaries, and all other persons whatsoever authorized to invest in bonds or other obligations of the State, may properly and legally invest any funds, including capital belonging to them or within their control; and such bonds are made securities which may properly and legally be deposited with and received by any State, county or municipal officer or agency of the State for any purpose for which the deposit of bonds or other obligations of the State is authorized by law.
§ 7009. Severability
The provisions of this act are severable, and if any of its provisions shall be held unconstitutional by any court of competent jurisdiction, the decision of such court shall not affect or impair any of the remaining provisions.
Approved August 18, 1961.