SENATE BILL NO. 559
AS AMENDED BY SENATE AMENDMENT NO. 2
AN ACT TO AMEND CHAPTER 70, TITLE 6, DELAWARE CODE, RELATING TO ECONOMIC DEVELOPMENT, BY REPEALING THAT CHAPTER AND ENACTING A NEW CHAPTER 70 CREATING THE DELAWARE ECONOMIC DEVELOPMENT AUTHORITY; AUTHORIZING SUCH AUTHORITY TO ISSUE BONDS FOR INDUSTRIAL, COMMERCIAL, AGRICULTURAL AND POLLUTION CONTROL PROJECTS; AUTHORIZING SUCH AUTHORITY TO PLEDGE THE FULL FAITH AND CREDIT OF THE STATE TO THE PAYMENT OF CERTAIN BONDS OF SUCH AUTHORITY; AND GRANTING CERTAIN ADDITIONAL POWERS TO SUCH AUTHORITY.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (Three-quarters of all members elected to each House thereof concurring therein):
Section 1. Amend Title 6 of the Delaware Code by deleting Chapter 70 of that Title in its entirety and inserting in lieu thereof the following:
"CHAPTER 70. DELAWARE ECONOMIC DEVELOPMENT AUTHORITY §7001. Findings and Declaration 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 depend upon the steady employment, in useful occupations, of the citizens of the State;
(b) In certain areas of the State, many citizens 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. This condition 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. Moreover the viability and attractiveness of expanded agricultural enterprise in the State (with consequential increase in agricultural employment opportunity) is jeopardized by competition from agricultural enterprises located in States enjoying longer growing seasons and other competitive advantages;
(c) Stable and useful employment can be made available for citizens of the State by financing the construction, acquisition, rehabilitation, modernization or renovation of commercial, industrial and agricultural facilities in the State;
49 In many areas of the State; substantial unemployment or cyclical employment (involving cessations of work and temporary layoff of employees) exists. This condition threatens the economic stabiliity 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;
(e) There is a continuing need to prevent decline in business employment, including employment in industrial, commercial and agricultural businesses within the State and to reduce unemployment and cyclical employment within the State;
(f) The availability of financial assistance and suitable facilities are Important inducements to industrial, commercial and agricultural businesses to locate, remain and expand in the State which in time will result in increased employment opportunities in the State;
(g) Due to increased industrialization and urbanization of many areas of the State, greater dangers to the public health and welfare exist because of pollution of the air, water and soil, and high levels of noise. Therefore, it is necessary to protect the public health and welfare by fostering the reduction, abatement or prevention of the pollution of the State's environment and the protection of its natural resources;
(h) There is a need to assist in the financing of medical facilities, nursing facilities and facilities for the residence or care of the aged in order to provide modern and efficient medical and nursing care and residence facilities for the citizens of the State thereby promoting their health and welfare.
It is further determined and declared that in order to aid in remedying such conditions and to implement the purposes of this Chapter, there shall be created an Authority which shall be a body politic and corporate having the powers, duties and functions provided in this Chapter; that the creation of the Authority and the powers conferred upon such Authority under this Chapter and the expenditure of monies pursuant to this Chapter constitute a valid public purpose and the performance of a valid public function; that the enactment of the provisions hereinafter set forth is in the public interest and for the public benefit and welfare and is hereby so declared to be as a matter of express legislative determination.
The following words and terms, unless the context clearly indicates a different meaning, shall have the following respective meaning:
(a) 'Agricultural Business' means any enterprise engaged in raising, preparing or marketing crops, timber, nursery stock, livestock, or the like or any related products, and facilities directly related, incidental or subordinate to any of the foregoing.
(b) 'Assisted Person' means any person, including individuals, firms, partnerships, associations, societies, trusts, public or private corporations, not for profit corporations, or other legal entities, including public or governmental bodies as well as natural persons for which a Project is undertaken or proposed to be undertaken.
(c) 'Authority' means The Delaware Economic Development Authority created by Section 7003 of this Chapter.
(d) 'Bonds' means bonds, notes or other obligations issued by the Authority pursuant to this Chapter.
(e) 'Commercial Business' means any enterprise other than an Agricultural Business or Industrial Business which may include, but is not limited to, wholesale, retail or other mercantile activities; office buildings; cable television facilities;
hotels; motels; shopping centers; department stores; sports facilities; restaurants; convention, auditorium or trade show facilities; tourism and recreational facilities; medical facilities, nursing facilities and facilities for the residence or care of the aged; public transportation facilities; parking facilities; and facilities directly related, incidental or subordinate to any of the foregoing.
(f) 'Cost' means, with respect to any Project, all costs, whether capital or otherwise, and includes the cost of acquisition, construction, reconstruction, repair, alteration, or extension of any building, structure, facility or other improvement; the cost of demolishing, removing or relocating any building, structure, facility or other improvement, including the cost of acquiring any lands to which such building, structure, facility or other improvement may be moved or relocated; the cost of machinery and equipment; the cost of acquisition, construction, reconstruction, repair, alteration, modernization, renovation, rehabilitation, improvement or extension of pollution control devices, equipment or facilities; the cost of land, rights-in-land, easements, privileges, agreements, franchises, utility extension, disposal facilities, access roads and site developments necessary, useful or convenient for any project or in connection therewith; interest prior to, during and for a reasonable period after completion of construction; discount on Bonds; costs of issuance of Bonds; engineering and inspection costs; costs of financial, legal, professional and other services; organizational, administrative, insurance, operating and other expenses of the Authority or any Assisted Person prior to and during any acquisition or construction; all such expenses as may be necessary or incident to the financing, acquisition, construction or completion of any project or part thereof; and all provision for reserves for payment or security of principal, premium, if any, or interest on, Bonds during or after acquisition or construction of any Project as the Authority may determine to be appropriate. Cost with respect to any Project financed by State Guaranteed Bonds shall not include the cost of providing working capital or inventory.
(g) 'Industrial Business' means any enterprise other than an Agricultural Business or Commercial Business and may include, but is not limited to, industrial parks; public utilities; activities involving the development, production, collection, conversion, storage, conservation, or transmission of coal, electricity, gas, oil, steam, water or sources of energy not covered by the foregoing; manufacturing, fabricating or processing activities; research and development activities; docks, wharves, airports; storage, shipping, receiving, warehouse and distribution facilities; and facilities directly related, incidental or subordinate to any of the foregoing.
(h) 'Outstanding Bonds' means the principal amount of State Guaranteed Bonds on which there is principal and interest owing and for which there have not been set aside with a trustee sufficient monies to pay principal, premium, if any, and interest on such State Guaranteed Bonds, which monies are subject to an irrevocable instruction that they be applied to the payment of principal, premium, if any, and interest on such State Guaranteed Bonds when due and payable, whether at maturity or otherwise.
(I) 'Pollution Control Project' means any device, equipment, improvement, structure or facility or any land and any building, structure, facility or other improvement thereon, or any combination thereof, whether or not in existence or under construction, or additions thereto or upgrading thereof, and all real and personal property deemed necessary thereto, having to do with, or the end purpose of which is, the control, abatement or prevention of land, water, air, or general environmental pollution in or adjacent to the State, whether by solids, liquids, gases, particulates, radiation, heat, noise or otherwise, including, but not limited
to, any air pollution control facility, noise abatement facility, water management facility, waste water collection system, waste water treatment works, sewage treatment system, or solid waste disposal or resource recovery facility or site.
(j) 'Project' means:
(i) acquisition, construction, reconstruction, repair, alteration,
improvement, extension or financing of any building, structure, or facility whether or not in existence or under construction;
(i) purchase, installation or financing of equipment, machinery, and other personal property; or
(i) acquisition, improvement or financing of real estate and the extension or provision of utilities, access roads and other appurtenant facilities;
any of which are to be used or occupied by any Assisted Person in any enterprise which will tend to maintain or provide gainful employment within the State, including, but not limited to, facilities for Industrial Business, Agricultural Business, Commercial Business or any combination thereof, Project, in addition, shall mean a Pollution Control Project. A Project shall not be considered a public work or public improvement for purposes of this Chapter or for purposes of any other law, rule, or regulation of the State or any political subdivision thereof.
(k) 'Related Person' means a person who is a related person under Section 103(b)(6)(e) of the Internal Revenue Code of 1954 as in effect on the effective date of this Chapter.
(1) 'Resolution' means any resolution adopted, or trust agreement or other agreement executed, by the Authority pursuant to which Bonds are authorized to be issued.
(m) 'Revenues' means receipts, fees, rentals, loan repayments or other payments or income derived from the lease, sale or other disposition of a Project, the loan of money, the acquisition and sale of loans, monies or securities in reserve and insurance funds or accounts or other funds and accounts and income from the investment thereof, and fees, charges or other monies to be received by the Authority in connection with a Project.
(a) 'Secretary' means the Secretary of the Department of Community Affairs and Economic Development.
(a) 'State' means The State of Delaware.
(a) 'State Guaranteed Bonds' means Bonds to which the full faith and credit of the State has been pledged as provided in this Chapter.
§7003. Creation and Organization of the Authority
(a) There is hereby established a body corporate and politic, with corporate succession, to be known as The Delaware Economic Development Authority'. The Authority is hereby constituted as an instrumentality of the State exercising public and essential governmental functions, and the exercise by the Authority of the powers conferred in this Chapter shall be deemed and held to be an essential governmental function of the State.
(b) The Authority shall consist of the Secretary who shall serve ex officio. The Secretary shall hold office for the term of his appointment. Should a vacancy in the Office of the Secretary occur, then the Authority shall consist of the Acting Secretary (with references to the Secretary in this Chapter deemed to refer to such Acting Secretary) until the Secretary's successor is duly qualified and appointed.
(c) The Secretary shall be the Chairman of the Authority. Subject to its annual budget as approved by the Governor and the General Assembly, the Authority shall employ such persons as the Secretary shall determine are necessary to fulfill the powers granted to the Authority in this Chapter. The powers of the Authority shall be vested in the Secretary and all action by the Authority shall be taken by the Secretary or by a designee acting on his behalf as provided in this Chapter.
(d) Notwithstanding the provisions of any other law, neither the Secretary nor any officer or employee of the State shall be deemed to have forfeited or shall forfeit his office or employment or any benefits or emoluments thereof by reason of his service as an officer of the Authority.
(e) The Secretary may designate officers or employees of the Department of Community Affairs and Economic Development to represent him, and each such designee may lawfully act on behalf of the Secretary, provided, however, that except in instances where the Secretary determines that he may have a direct interest in a Project as provided in subsection (i) of this section and therefore disassociates himself from that Project, no such designee may lawfully approve a Project or adopt a Resolution. Neither the Secretary nor any such designee shall be subject to any personal liability or accountability by reason of his execution of any Bonds or the issuance thereof.
(f) The Authority may be dissolved by act of the General Assembly on condition that the Authority has no debts or obligations outstanding or that provision has been made for the payment or retirement of such debts or obligations. Upon any such dissolution of the Authority, all property, funds and assets thereof shall be vested in the State.
(g) The Authority shall prepare an annual budget for each fiscal year of the Authority (the 'annual budget') and shall submit the annual budget to the Budget Director and General Assembly in accordance with the provisions of Chapter 63, Title 29, Delaware Code. The annual budget need not include amounts representing expenditures for debt service on Bonds, except for such amounts with respect to Projects which are financed by proceeds from State Guaranteed Bonds and for which either (i) any payment due to the Authority or to a trustee or other person as assignee of the Authority is in default or (ii) sufficient revenues are not available to make payments due to such trustee or other person.
(h) The Authority shall cause an audit of its books and accounts to be made annually by a certified public accountant licensed to practice in the State. In addition, the Authority shall make an annual report of its activities to the Governor which shall set forth a complete operating and financial statement covering the Authority's operations during the year and shall include the report of the certified public accountant who makes the audit of the Authority's books and accounts. The Authority shall furnish a copy of the annual report to the Speaker of the House of Representatives and the President Pro Tempore of the Senate, the Auditor of Accounts, and the Controller General. The Auditor of Accounts may also audit the books and accounts of the Authority in accordance with applicable law.
(i) No member, officer, employee or agent of the Authority shall be interested, either directly or indirectly, hi any Project or in any contract, sale, purchase, lease or transfer of real or personal property to which the Authority is a party. The existence of any such interest shall not affect the validity of Bonds issued pursuant to this Chapter.
(j) All expenses incurred by the Authority shall be included and charged to the Project to which they apply. Any refunds or reimbursements of such expenses shall be credited to the same Project to which such expense was charged.
(a) The Authority shall prescribe such regulations as may be necessary to carry out the purposes of this Chapter.
(1) Any net earnings of the Authority (beyond those necessary for retirement of any indebtedness or to implement the public purposes of this Chapter) shall not inure to the benefit of any person other than the State.
§7004. Powers of the Authority
(a) The Authority may issue Bonds, to finance the Cost of any Project or part thereof with respect to which the Authority has adopted a Resolution.
(b) The Authority may issue Bonds to refund Bonds issued pursuant to this Chapter, or issued by the Department of Community Affairs and Economic Development pursuant to predecessor statutes, including the payment of any redemption premium thereon and any interest accrued to the date of redemption of such Bonds.
(c) The Authority may issue Bonds payable solely from the Revenues of the Project for which the Bonds have been issued. Such Bonds may be issued for a Project whether or not such Project is or will be financed by State Guaranteed Bonds.
(d) The Authority may pledge the full faith and credit of the State to the payment of principal, premium, if any, and interest due on Bonds (whether at stated or accelerated maturity or otherwise) subject to the following conditions:
(i) With respect to any Project proposed to be financed by State Guaranteed Bonds the Authority shall find and determine, which findings and determinations shall be conclusive, in addition to making the appropriate findings and determinations required by Section 7005 of this Chapter, that:
A. The aggregate principal amount of State Guaranteed Bonds the proceeds of which are used to finance the proposed Project together with the aggregate principal amount of Outstanding Bonds used to finance any other Project or Projects owned, used, leased or occupied by the same Assisted Person, or by a Related Person to the Assisted Person, does not exceed three million dollars ($3,000,000.00);
B. Not more than fifty percent (50%) of the Cost of the proposed Project shall be financed by State Guaranteed Bonds; and
C. The fulfillment, discharge and satisfaction of the Assisted Person's obligations under the terms of the lease, mortgage, loan agreement or other financing agreements between the Authority and the Assisted Person shall be adequately secured.
(ii) Outstanding Bonds shall not exceed fifty million dollars ($50,000,000.00);
(i) fn no event shall the proceeds of State Guaranteed Bonds be used to finance a Project for Commercial Business or Agricultural Business;
(i) The Authority may not adopt a Resolution authorizing the iussuance of State Guaranteed Bonds without the approval of at least five (5) of the seven (7) members (the 'Members') of the Council on Industrial Financing (the 'Council') or three-quarters (3/4) of the Members if vacancies on the Council exist.
(i) The Assisted Person shall be legally obligated to deposit (prior to the delivery of the Bonds and from a source other than the proceeds of the Bonds), and thereafter maintain, with a person in trust, a cash reserve fund in an amount equal to the maximum principal and interest payable on such Bonds during any consecutive twelve (12) month period by such Assisted Person to the Authority under the terms of the lease, mortgage, loan agreement or other financing agreement between the Authority and such Assisted Person. Such cash reserve fund shall be pledged solely for the purposes provided in Section 7011 of this Chapter and shall not be construed as a security deposit under the State's Landlord Tenant Code (Part III, Title 25, Delaware Code).
(i) In the case of accelerated maturity, the pledge of the full faith and credit of the State to the payment of principal, premium, if any, and interest due on State Guaranteed Bonds prior to their stated maturity shall not apply without the express written approval of the Secretary of Finance. Such approval may be given at any time after the occurrence of a default which would permit the acceleration of payment of principal, premium, if any, or interest on such State Guaranteed Bonds under the terms of the lease, mortgage, loan agreement or other financing agreements between the Authority and the Assisted Person.
(e) The Authority shall have all of the powers necessary or convenient to carry out and effectuate the purposes and provisions of this Chapter including without limitation the power:
(I) To adopt bylaws for the regulation of its affairs and the conduct of its business and to adopt rules, regulations and policies in connection with the performance of its functions and duties;
(ii) To adopt, use and alter at will an official seal;
(iii) To sue in its own name;
(iv) To acquire in its own name by purchase, lease or otherwise, on such terms and conditions and in such manner as it may deem proper, any franchise, property, real, personal or mixed, tangible or intangible, or any interest therein, whether or not in connection with a Project, and to sell, lease as lessor, mortgage or otherwise encumber, transfer or dispose of any such property or interest therein;
(v) To enter into contracts with a person upon such terms and conditions as the Authority shall determine to be reasonable, providing, without limitation, for reimbursement for the planning, designing, financing,
construction, reconstruction, improvement, equipping, furnishing, operation and maintenance of a Project and to pay or compromise any claims arising from any such contracts;
(vi) To enter into loan agreements with, and to make loans to, an Assisted Person, for the Cost of a Project (title to which Project may remain or vest in such Assisted Person), which loans may be secured or evidenced by notes, debentures, bonds, mortgages, leases or other instruments, delivered to the Authority or to a trustee or other person as assignee of the Authority, all upon such terms and conditions as the Authority may deem advisable.
(vii) To establish and maintain funds of any kind, including without limitation reserve and insurance funds with respect to any financing of a Project;
(viii) To mortgage, pledge, assign or otherwise encumber all or any portion of a Project or Revenues;
(ix) To grant options to purchase or renew a lease for any Project;
(i) To contract for and to accept any gifts, grants or loans of funds or property or financial or other aid from any source, and to comply, subject to the provisions of this Chapter, with the terms and conditions thereof;
(ii) To charge and collect such fees and charges as it shall determine to be reasonable for the use of its services;
(iii) To acquire, purchase, manage, operate, hold and dispose of real and personal property or interests therein, take assignments of rentals and leases and make and enter into all contracts, leases, agreements and arrangements necessary or Incidental to the performance of its duties;
(iv) To purchase, acquire and take assignments of notes, mortgages and other forms of security and evidences of Indebtedness;
(v) To purchase, acquire, attach, seize, accept or take title to any Project by conveyance or by foreclosure, and sell, lease, manage or operate any Project for a use specified in this Chapter;
(vi) To borrow money and issue Bonds (the interest on which may be taxable or exempt from tax under the Internal Revenue Code of 1954) as provided in this Chapter, and provide for the rights of the holders thereof:
(vii) To pledge the full faith and credit of the State to the payment of the principal, premium, if any, and interest on Bonds, but only to the extent permitted under this Chapter.
(i) To invest any funds or monies of the Authority pending the application of such funds or monies to the purposes specified in this Chapter;
(i) To employ consulting engineers, architects, attorneys (in accordance with Section 2507, Title 29 Delaware Code), real estate counselors, appraisers, and such other consultants and employees, who shall not be members of the classified service, as may be required in the judgment of the Authority to carry out the purposes of this Chapter, and to fix and pay their compensation from funds available to the Authority therefor;
(xix) To do and perform any acts and things authorized by this Chapter under, through or by means of its own officers, agents and employees, or by contracts with any person; and
(xx) To procure insurance against any losses in connection with its property, operations or assets in such amounts and from such insurers as it deems desirable.
S7005. Approval of Purpose of Bonds
The Authority may adopt a Resolution provided that an application for assistance under this Chapter shall be submitted to the Authority, for the advice or, where required by this Chapter, the approval of the Council on Industrial Financing, requesting the issuance of Bonds to finance a Project. Prior to approving such application, the Authority shall find and determine, which findings and determinations shall be conclusive, on the basis of all information reasonably available to it, that any Project financed:
(a) will tend to maintain or provide gainful employment for citizens of the State, or, in the case of a Pollution Control Project, will reduce, abate or prevent pollution of the State's environment or protect its natural resources, or, in the case of a medical facility, nursing facility or facility for the residence or care of the aged, will help to provide modern and efficient medical, nursing or residence facilities as the case may be for the citizens of the State;
(b) will serve a public purpose by contributing to the prosperity, health or general welfare of the citizens of the State;
(c) in the case of a Project for Agricultural Business will require a capital investment of at least two hundred fifty thousand dollars ($250,000.00), which funds, including the proceeds of the Bonds to be issued, will be available or expended on the day the Authority issues the Bonds;
(d) in the case of a Project for Commercial Business will require a captial investment of at least five hundred thousand dollars ($500,000.00), which funds, including the proceeds of the Bonds to be issued, will be available or expended on the day the Authority issues the Bonds;
(e) will be leased to, sold to or financed for a financially responsible Assisted Person who has not been convicted of a major labor law violation or of illegal conduct involving moral turpitude by any agency or court of the federal government or agency or court of any state in the two (2) year period immediately prior to the approval of the Assisted Person's application for assistance; and
(f) will effectuate the purposes of this Chapter. The Authority may make the foregoing findings and determinations on a prospective basis prior to the receipt of any such application provided that the proceeds of Bonds are not disbursed to any Assisted Person until such findings and determinations are made specifically with respect to such Assisted Person's Project or Projects.
The Authority may issue Bonds to refund Bonds issued pursuant to this Chapter without making any of the foregoing findings or determinations.
The Bonds authorized to be issued by this Chapter shall be authorized by a Resolution and shall be of such series; bear such date or dates; mature at such time
or times, not exceeding twenty (20) years for State Guaranteed Bonds; bear interest at such rate or rates; be in such denominations; be of a single denomination payable in installments; be in aa,::i• 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 of the Authority as such Resolution may provide. The Bonds shall bear the manual or facsimile signature of the Secretary, and of the Secretary of the Council on Industrial Financing, and coupon Bonds shall have attached thereto interest coupons bearing the facsimile signature of the Secretary. Any such Bonds may be issued and delivered notwithstanding the fact that one or more of the officials signing such Bonds or whose facsimile signature shall he upon the Bonds or coupons, shall have ceased to be such official or officials 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 Authority shall determine. Any Bonds may be consolidated for sale with any other Bonds of the Authority and sold as a single issue. Pending the preparation of the definitive Bonds, temporary Bonds may be issued to the purchaser or purchasers of such Bands any may contain such terms and conditions as the Authority may determine.
§7007. Covenants with Bondholders
The Authority shall have the power to covenant and to agree with the holders of Bonds in order to secure the payment of such Bonds, as to:
(a) The custody, security, use, expenditure, investment or application of the proceeds of Bonds;
(b) The use, regulation, operation, maintenance, insurance or disposition of all or any part of any Project;
(e) The payment of the principal, premium, if any, and interest on Bonds, the sources and methods of payment thereof, the rank or priority of any such Bonds as to any lien or security, or the acceleration of the maturity of any such Bonds;
(d) The use and disposition of any monies of the Authority, including all Revenues;
(e) The mortgage, pledge, assignment or deposit of all or any part of the Revenues or other monies of the Authority or of all or any part of a Project to secure the payment of the principal, premium, if any, and interest on Bonds, and the powers and duties of any trustee or agent with regard thereto;
(f) The segregation of Revenues or other monies of the Authority into reserves and sinking funds, and the source, custody, investment, security, regulation, application and disposition thereof;
(g) The rents, fees or other charges for the use of any Project, including any parts, replacements or improvements thereafter constructed or acquired, and the fixing, establishment, collection and enforcement of the same;
(h) Any limitation on the issuance of additional Bonds or on the incurrence of indebtedness of the Authority;
(U Any vesting in a trustee or trustees, fiscal or escrow agent or agents, within or without the State, of such property, rights, powers and duties as the Authority may determine, and any limitation on the rights, duties and powers of such trustee or agent;
(j) The payment of costs or expenses incident to the enforcement of the provisions of bonds, the provisions of the resolution or any covenant or contract with the holders of Bonds;
(k) The procedure, if any, by which the terms of any covenant or contract with, or duty to, the holders of Bonds may be amended or abrogated, the amount of Bonds the holders of which must consent thereto, and the manner in which such consent may be given or evidenced; or
(1) Any other matter or course of conduct which, by recital in a Resolution, is declared to secure further the payment of the principal, premium, if any, or interest on Bonds.
All such provisions of a Resolution and all such covenants and agreements shall constitute valid and legally binding contracts between the Authority and the several holders of Bonds to which they relate, regardless of the time of issuance of such Bonds.
§7008. Pledge of Revenues or Other Property
Any pledge of Revenues or other property made by the Authority shall be valid and binding from the time when the pledge is made. Revenues so pledged and thereafter received by the Authority shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act. The lien of any such pledge of Revenues or other property shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Authority, whether or not such parties have notice thereof. Neither the Resolution nor any other instrument by which a pledge is created need be filed or recorded, however copies of such Resolution or instrument shall be retained by the Authority.
§7009. Limitation on Liability of the State
(a) Bonds, other than State Guaranteed Bonds, issued pursuant to this Chapter shall not constitute a debt of the State or any political subdivision or any agency thereof, or a pledge of the full faith and credit or taxing power of the State or any political subdivision or any agency thereof, and shall not obligate the State or the Authority to make any appropriation for their payment.
(b) All Bonds, other than State Guaranteed Bonds, shall contain on the face thereof a statement to the following effect:
'Neither the faith and credit nor the taxing power of the State is pledged to the payment of the principal of, premium, if any, or interest on this Bond, nor Is the State or the Delaware Economic Development Authority in any manner obligated to make any appropriation for payment thereof.'
(c) State Guaranteed Bonds shall be a debt of the State.
§7010. Negotiability of Bonds
The Bonds and any coupons appurtenant thereto shall be negotiable instruments and securities under the Uniform Commercial Code of the State.
§70ll. Remedies of Holders of State Guaranteed Bonds
If any payment of principal, premium, if any, or interest due to the Authority or to a trustee or other person as assignee of the Authority with respect to a
Project financed by proceeds from State Guaranteed Bonds is in default, or if sufficient Revenues are not available to make such payment, the Authority:
(a) Shall forthwith direct (If it has not previously done so) the person holding the cash reserve fund deposited pursuant to Section 7004(cXvii) of this Chapter to apply such cash reserve fund to the payment of principal, premium, if any, and interest on such State Guaranteed Bonds as the same become due.
(b) Shall forthwith give notice of such default or occurrence to the Governor, the Secretary of Finance, the Auditor of Accounts, the Speaker of the House of Representatives, the President Pro Tempore of the Senate, and the Controller General. Thereafter, the General Assembly shall appropriate sufficient funds to pay principal, premium, if any, and interest on such State Guaranteed Bonds when due. Any funds made available pursuant to such appropriation shall be deposited by the Authority in the appropriate cash reserve fund.
(c) Shall forthwith take title and possession of the Project and any notes, bonds, monies, or other assets acquired in connection with the Project. Any funds realized through the sale, rental, or other disposition of any property right acquired by the Authority pursuant to this Chapter shall be paid into the General Fund to the extent that any monies have been paid out of the General Fund pursuant to this section. Any such funds not required to be paid into the General Fund, including fees and commissions charged by the Authority, shall, to the extent provided by law, be used to defray the expenses of the Authority.
§7012. Limitation of Powers
The State pledges to and agrees with any holder of the Bonds that the State will not limit or alter the rights vested in the Authority until all Bonds at any time issued, together with the interest thereon and all costs and expenses in connection with any action or proceeding by or on behalf of the bondholders, are fully met and discharged, provided, however, that nothing herein contained shall preclude such limitation or alteration, if, and when, adequate provision shall have been made by law for the protection from impairment of the contracts represented by such Bonds.
§7013. 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 or societies, trust companies, building and loan associations, savings and loan associations, investment companies, and other persons carrying on a banking business, all insurance companies, insurance associations, and other persons carrying on an 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. State Guaranteed Bonds are made securities which may properly and legally be deposited with and received by any officer of the State, or of any county, municipality or agency of the State for any purpose for which the deposit of bonds or other obligations of the State is authorized by law.
§7014. Exemption from Taxation
Interest on Bonds issued under the provisions of this Chapter shall be exempt from income taxation by the State or any political subdivision thereof.
Any real or personal property of the Authority which is not used by an Assisted Person as part of, or in connection with, a Project shall be exempt from any and all taxation by the State or any political subdivision thereof.
§7015. Property of Authority Exempt from Judicial Process
All property of the Authority shall be exempt from execution process, and no attachment, sequestration, execution, levy or other judicial process shall issue against the same, nor shall any judgment against the Authority be a charge or lien upon its property, provided, however, that nothing herein contained shall apply to or limit the rights of the holder of any Bonds to pursue any remedy for the enforcement of any pledge or lien given by the Authority on or with respect to any Project or any Revenues or other monies.
If any section, part, phrase, or provision of this Chapter or the application thereof to any Assisted Person, Project or circumstance is adjudged invalid by any court of competent jurisdiction, such judgment shall be confined in its operation to the section, part, phrase, provision or application directly involved in the controversy in which such judgment shall have been rendered and shall not affect or impair the validity of the remainder of the application thereof to any other Assisted Person, Project or circumstance.
§7017. Liberal Construction
This Chapter, being necessary for the prosperity and welfare of the State and its citizens, shall be liberally construed to effect the purposes of this Chapter.
§7018. Inconsistent Laws Inapplicable
Insofar as any provision of this Chapter is inconsistent with any general, special or local laws, or part thereof, this Chapter shall be controlling."
Section 2. On the effective date of this Act, all acts of the State appearing in Chapter 70, Title 6, Delaware Code, are hereby repealed. To the extent any such provision of Title 6 constitutes a contract with any persons, including holders of outstanding bonds, and is not re-enacted, such provision shall survive the adoption of this Act with respect to such contract.
Section 3. This Act shall take effect immediately upon its adoption, and all existing obligations and liabilities of the Department of Community Affairs and Economic Development incurred pursuant to Chapter 70, Title 6, Delaware Code, shall thereupon be transferred to and assumed by the Authority created under this Act.
Approved June 25, 1980