AN ACT TO AMEND CHAPTER 70, TITLE 6, DELAWARE CODE, BY INCLUDING NON-AGRICULTURAL AREAS OF CYCLICAL EMPLOYMENT IN THE COVERAGE OF THE ACT, ALLOWING A CASH DEPOSIT IN LIEU OF BOND PURCHASE BY A LEASING OR OTHER ASSISTED PERSON, AUTHORIZING THE INDUSTRIAL BUILDING COMMISSION TO PARTICIPATE IN NON-BUILDING CAPITAL GOODS FINANCING, INCREASING THE MAXIMUM PROJECT GUARANTY FROM $2,000,000 TO $3,000,000, AND BY ALTERING THE PLEDGE OF THE CREDIT OF THE STATE.
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. Section 7001, Title 6, Delaware Code, is amended by adding thereto new subsections (f), (g), (h), and (i), as follows:
(f) In certain non-agricultural areas of the State, many citizens of the State are employed in cyclical employment. "Cyclical employment" is hereby defined as employment involving frequent cessations of work and temporary discharge or lay-off of employees.
(g) Cyclical employment, as hereinbefore defined, may be present in a particular enterprise where, because of shifting technology, obsolescence of equipment, or shortage of capital, the enterprise is or has become a high cost operation, so that any slight decline in demand for products of the industry generally, or any slight decline in the price structure of the industry causes the enterprise to terminate or interrupt the employment of its employees.
(h) Cyclical employment, as herein defined, threatens the economic stability of the State, discourages thrift, and depresses the standard of living of the citizens of the State, all to the detriment of the public health, welfare, and order.
(i) Cyclical employment may be eliminated, under certain circumstances, by the modernization of a particular facility. Such modernization may be impossible within the capital resources of the establishment. Under such circumstances, participation by the Industrial Building Commission in refinancing or modernization of facilities will strengthen the position of the establishment in its industry, and eliminate cyclical employment, as hereinbefore defined. It is determined and declared that the elimination of cyclical employment is a public purpose, and that participation by the Industrial Building Commission in refinancing or modernization of facilities, under the criteria hereinafter set forth, will alleviate cyclical employment and thereby promote the public health, welfare, and order.
Section 2. Section 7003 (a), Title 6, Delaware Code, is amended by striking subsection (1) thereof, and inserting in lieu thereof a new subsection (1), as follows:
will be located in an area of the State where a substantial portion of the labor is unemployed, or employed in seasonal or cyclical employment.
Section 3. Section 7003 (a), Title 6, Delaware Coder is amended by striking subsection (2), and inserting in lieu thereof a new subsection (2), as follows:
(2) will consist of an industrial building or buildings which are all-purpose buildings, suitable for rental to general manufacturing industry, or buildings or machinery readily marketable.
Section 4. Section 7003 (a), Title 6, Delaware Code, is amended by striking subsection (4) and inserting in lieu thereof a new subsection (4), as follows:
(4) will yield sufficient income in rental, mortgage, or other payments for the payment of principal and interest on the bonds.
Section 5. Section 7003 (a), Title 6, Delaware Code, is amended by striking subsection (5) and inserting in lieu thereof a new subsection (5), as follows:
(5) will be leased or sold upon the condition that the perspective tenant, purchaser, or assisted person is legally obligated to:
(i) purchase 5 percent of the bonds issued by the development corporation for the project, said bonds to be pledged as security for the lease or mortgage, or
(ii) deposit with the trustee under the trust indenture securing the bonds a cash fund equal to the highest single yearly payment due from the tenant, purchaser, or assisted person to the development corporation under the terms of the lease, mortgage, or other security instrument between the development corporation and the purchaser, tenant, or assisted person, said fund to be pledged for the purposes provided in Section 7006 (g) , Title 6, Delaware Code.
Section 6. Section 7003 (b), Title 6, Delaware Code, is amended by striking the words "two million dollars" as they appear in the last line thereof and inserting in lieu thereof the words "three million dollars".
Section 7. Section 7003 (a), Title 6, Delaware Code, is amended by adding thereto a new subsection (7) as follows:
(7) If the assisted enterprise is a cyclical employer, the assisted enterprise will, after completion of the project, have a production cost per unit which is not greater than the average for its industry for the particular product produced.
Section 8. Section 7006 (d), Title 6, Delaware Code, is amended by striking all of said subsection (d) and inserting in lieu thereof a new subsection (d), as follows:
(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 Building Commission for payment of the deficiency.
Section 9. Section 7006, Title 6, Delaware Code, is amended by adding thereto a new subsection (f), as follows:
(f) If the receiver has made demand upon the Industrial Building Commission pursuant to § 7006 (d), or if the Industrial Building Commission determines that any payment due from the assisted person to the development corporation is in default, it shall forthwith direct the trustee under the trust indenture to make payments of interest and principal, as they become due, from the cash reserve fund deposited pursuant to § 7003 (a) (5) (ii). The Industrial Building Commission shall forthwith give notice to the Governor, the State Treasurer, the State Auditor, the Speaker of the House of Representatives, and the President of the Senate of the deficiency. Thereafter, the Budget Appropriation Bill shall be enacted and approved by each General Assembly shall contain under the Debt Service Item for each fiscal year provisions for the payment of interest and principal maturities of bonds authorized to be guaranteed by this Act, and such of the revenues of the State of Delaware as are not prohibited by constitutional provision or committed by preceding statutes for other purposes are hereby pledged for the redemption and cancellation of said bonds and payment of interest thereon.
Section 10. Section 7006, Title 6, Delaware Code, is hereby amended by adding thereto a new subsection (g), as follows:
(g) Upon the default of any obligation by the assisted person to the development corporation, and the payment of any funds to bondholders from the General Fund of the State or from the cash reserve required to be deposited with the trustee pursuant to § 7003 (a) (5) (ii), the development corporation shall immediately convey all of its right, title, and interest in the project and in any notes, bonds, moneys, or other assets acquired in connection with the project to the Industrial Building Commission. Any funds realized through the sale, rental, or other disposition of any property right acquired by the Industrial Building Commission from a development corporation pursuant to this Section shall be paid by the Industrial Building Commission into the General Fund to the extent that any moneys have been paid out of the General Fund pursuant to subsection (f) of this Section. Any funds in the hands of the Industrial Building Commission not here required to be paid into the General Fund, including fees and commissions charged by the Commission to development corporation, shall be used to pay the expenses of the Commission, with any surplus remaining as security for the bondholders of any obligations issued pursuant to this Act.
Section 11. Nothing herein contained shall alter the terms of any existing trust indenture or outstanding guaranty.
Approved June 20, 1963.