AN ACT RELATING TO THE ISSUANCE OF BONDS AND NOTES 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 concurring therein):
Section 1. Title 29, Delaware Code, is amended by enacting a new Chapter as follows:
CHAPTER 74. BONDS AND NOTES OF THE STATE
§ 7401. Definitions
As used in this Chapter--
(a) "Issuing Officers" means: The Governor, Secretary of State and State Treasurer of the State of Delaware.
(b) "Authorization Act" means: An act of the General Assembly, concurred in by 3/4 of all the members of each House, appropriating moneys of the State for capital improvements of the State and authorizing the State of Delaware to borrow money therefor, and to issue bonds and notes in connection therewith.
() "Bonds" means any bonds authorized to be issued by the State of Delaware pursuant to an Authorization Act.
(a) "Notes" means anticipation notes issued by the State of Delaware in anticipation of the issuance of Bonds.
§ 7402. Applicability of this Chapter; relation to authorization act
(a) Unless otherwise provided in any Authorization Act the provisions of this Chapter shall apply to the issuance of Bonds and Notes of the State.
(b) The provisions of this Chapter are hereby incorporated in any Authorization Act unless specifically excepted therefrom and shall be deemed a part of any Authorization Act just as if contained verbatim in the Authorization Act.
§ 7403. Issuing authority
(a) The Issuing Officers shall borrow, and issue negotiable bonds as evidence thereof, upon the faith and credit of the State of Delaware such sums of money as may be from time to time authorized in any Authorization Act.
(b) The sums received by the issuance of Bonds or Notes shall be expended as set forth in the Authorization Act and this Chapter.
§ 7404. Anticipation notes
(a) In anticipation of the issuance of Bonds, the Issuing Officers may issue and sell Notes of the State of Delaware at either public or private sale for not less than par and accrued interest and at a rate which shall not exceed 6% per annum. Such Notes may be issued for a period of not exceeding one year and may be renewed from time to time for periods not exceeding one year but all such Notes, including renewals, shall mature and be paid not later than four years after issuance. No Notes shall be issued in excess of the amount of Bonds authorized by the Authorization Act. In the event that Bonds are issued pursuant to the Authorization Act, the aggregate amount of Notes which may be issued shall be reduced by an amount equal to the principal amount of the Bonds so issued. If the aggregate amount of outstanding Bonds and Notes issued pursuant to any one Authorization Act shall at any time exceed the amount of Bonds authorized by the Authorization Act, the moneys raised by the issuance of said Bonds shall, to not less than the amount of such excess, be applied to the payment of such Notes then outstanding.
(b) Notes may be issued payable to bearer with interest payable to bearer or may be in registered form. Notes payable to bearer may be made subject to registration and the principal and interest on Notes so registered shall be payable to the registered owner. Notes may be issued subject to redemption prior to maturity at par and accrued interest, at the option of the State, upon such terms and conditions as may be fixed by the Issuing Officers and stated in the Notes.
§ 7405. Full faith and credit of the State, pledged; exemption from taxation
All Bonds and Notes issued in accordance with the provisions of this Chapter shall be direct general obligations of the State, and the public faith and credit of the State of Delaware are hereby expressly pledged for the full and complete payment of the debt evidenced by such Bonds and Notes. Principal and interest of the Bonds and Notes authorized to be issued and the coupons thereto attached, and the Bonds and Notes shall be exempt from taxation by the State or any political subdivision thereof for any purpose.
§ 7406. Recitals in bonds and notes; conclusive on the State
All the Bonds and Notes shall recite that they are issued for the purpose set forth in the Authorization Act, that they are issued in pursuance of the Authorization Act, this Chapter and the Constitution of this State, and upon the sale and delivery of any such Bonds or Notes, such recitals shall be conclusive upon the State of Delaware and all and every other person whatsoever of the right, power and authority for the issuance of said Bonds or Notes and legality and validity of such Bonds or Notes and of the principal debt and interest represented thereby and the legality and validity of such Bonds or Notes thereafter shall never be questioned in any court of law or equity by the State of Delaware or 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 any such Bonds or Notes.
§ 7407. Designation of bonds
The Bonds, if constituting a single issue of Bonds under one Authorization Act, shall be known and styled as provided in the Authorization Act, or, in the absence of such designation, the Issuing Officers shall assign an identifying title. In the event that the Issuing Officers decide, as hereinafter provided, to combine Bonds authorized by two or more Authorization Acts into a single issue of Bonds, the Issuing Officers are hereby authorized to designate an identifying title for the combined issue, notwithstanding the designation in any Authorization Act.
§ 7408. Form of bonds; other recitals
The Bonds may be issued either in coupon form or registered form. The Bonds, as well as the interest coupons thereto attached, may contain such further recitals and be subject to such terms and conditions, with such privileges as to registration, conversion, reconversion, redemption and exchange, and may contain such other provisions, all as may be determined by the Issuing Officers. Both principal of and interest on the Bonds shall be payable at the Farmers Bank of the State of Delaware, at Dover.
§ 7409. Denominations of bonds; coupons, numbering of bonds, dates and interest
Bonds may be issued in the denomination of One Thousand Dollars ($1,000), or a multiple thereof, as shall be determined by the Issuing Officers, or a majority of them, with coupons thereto attached for each semi-annual interest thereon. The Bonds of each issue shall be numbered consecutively and shall bear such date as the Issuing Officers shall fix, and shall bear interest at such rate or rates as shall be determined by the bid accepted by the Issuing Officers, which interest shall be payable semi-annually in each year that the Bonds remain unpaid.
§ 7410. Maturity of bonds
(a) The Bonds authorized by an Authorization Act may be issued at one time or in series as may be determined by the Issuing Officers. Each series shall constitute an issue of Bonds. An issue of Bonds authorized by the Authorization Act, or any series thereof, shall be made to mature fully within twenty years from the date of issue thereof.
(b) The Issuing Officers may determine to issue Bonds, or any series thereof, authorized by two or more Authorization Acts as a single issue of Bonds, and may be sold as a single issue of Bonds.
§ 7411. Execution of bonds; seal; signatures; attached interest coupons; termination of office
(a) The Bonds shall be executed on behalf of the State of Delaware by the Governor, the Secretary of State and the State Treasurer and shall have the impression of the Great Seal of the State thereon or shall have a facsimile of the Great Seal of the State of Delaware thereon. The facsimile signatures of the Governor and the Secretary of State may be engraved or printed on such Bonds, but the Signature of the State Treasurer shall be in his own proper handwriting.
(b) Attached interest coupons shall bear the signature of the State Treasurer which may be engraved, printed or written on such coupons. The coupons attached to each Bond shall bear the same number as the Bond to which they are attached.
(c) The Bonds, with the coupons attached, may be issued notwithstanding that any of the Officers executing them in the manner herein provided shall have ceased to hold office at the time of such issue or at the time of the delivery of said Bonds.
§ 7412. Redemption, record, cancellation of bonds; payment of bonds; retention of bonds and coupons
(a) 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, in which he shall keep a record of all Bonds which shall be paid and redeemed according to the number thereof, and in addition thereto lie shall cause any such Bonds to be cancelled by making lines with red ink through the signatures of the Governor, Secretary of State and State Treasurer, and also by writing across the face thereof in red ink the following:
This Bond paid and redeemed this _______ day of ______ A D 19 ___ . ________________ State Treasurer
(b) 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". All Bonds paid and redeemed, as well as all coupons paid and cancelled as aforesaid, shall be safely kept by the State Treasurer so long as any Bond authorized is unpaid and not redeemed.
§ 7413. Advertisement for bids
Any Bonds issued pursuant to this Chapter shall be sold at public sale and the Issuing Officers are hereby directed to advertise that they will receive bids at such place or places as may be named in said advertisement for such Bonds as may be determined by the Issuing Officers. Sufficient notice of sale of said Bonds shall be deemed to have been given if said notice shall have been published at least once 10 or more days before the date of sale, in at least one newspaper published in the State of Delaware, and in a financial journal published in the City of New York, and no other publication of such notice of sale shall be necessary, and said bonds may be sold upon such terms and conditions as may be set forth in such notice of sale, provided that the purchase price shall be not less than par and accrued interest. In the event that the bonds so offered for sale are not bid for, or if no legally acceptable bid is received for the bonds, they may be sold under the Direction of the Issuing Officers at private sale upon the best terms they can obtain for the same, provided that they shall not be sold at private sale for less than par and accrued interest and at a rate which shall not exceed six per centum (6%) per annum.
§ 7414. Sale of bonds
Without limiting the power granted the Issuing Officers as to the terms and conditions which they may set forth in a notice of sale, the Issuing Officers may request bids and award the Bonds upon any of the following conditions:
(a) Bidders may be invited to name a single rate of interest for the issue or issues contained in the notice of sale, in which event the Bonds can be awarded to the bidder offering to take all of the Bonds at the lowest rate of interest, and as between bidders naming the same lowest rate of interest, the amount of premium will determine the award; or
(b) Bidders may be invited, with respect to a single issue, a combined issue or several other issues of Bonds included in one notice of sale, to name one rate of interest for part of the Bonds (having the earliest maturities) and another rate or rates for the balance of the Bonds, and may permit a different interest rate for each maturity, or may limit the number of rates which may be proposed. If proposals are so invited, the Bonds should be awarded to the bidder offering to purchase the Bonds at the lowest net interest cost to the State, the net interest cost to be determined by computing the aggregate amount of interest payable on the Bonds from their date to their respective maturities and by deducting from such aggregate amount the premium offered, if any.
§ 7415. Deposit of moneys received from sale of bonds; vouchers; deposit of premiums
All moneys received from the sale of the Bonds or Notes shall be deposited by the State Treasurer in the Farmers Bank of the State of Delaware at Dover, and shall be used exclusively in accordance with the provisions of this Chapter and the Authorization Act and for the purpose of paying the principal of Notes issued under this Chapter.
Approved July 25, 1963.
NOTE: § 7413 was codified as § 7413 (a), (b) and (c).