HOUSE BILL NO. 742
AN ACT TO AMEND CHAPTER 277, VOLUME 49, LAWS OF DELAWARE, AS AMENDED, ENTITLED "AN ACT TO RE-INCORPORATE THE TOWN OF LAUREL", TO PERMIT THE ISSUING OF REVENUE BONDS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (Two-thirds of all members elected to each House thereof concurring therein):
Section 1. Chapter 277, Volume 49, Laws of Delaware, as amended, be and the same is hereby further amended by adding a new Section following §15 to be designated as Section 15A to read as follows:
"POWER TO ISSUE REVENUE BONDS
Section 15A (a) The Town Council, in addition to the power set forth in Section 15 of this Charter to borrow money and issue the bonds, shall have the authority to borrow money and issue bonds or certificates of indebtedness and to secure the payment thereof by pledging the revenues derived from the operation of any project for which the bonds are issued pursuant to this Section.
(b) The funds derived from the sale of bonds issued pursuant to this Section may be used for any or all of the following purposes, including incidental expenses incurred in connection therewith:
(1) For the erection, the extension, the enlargement, the purchase or the repair of any plant, machinery, appliances or equipment for the supply or manufacture and distribution of electricity or gas for light, heat, or power purposes;
(2) For the furnishing of water to the public;
(3) For the construction or repair of sewers or sewage disposal equipment;
(4) For the defraying of the costs or the share of the Town of the costs of any permanent municipal improvement;
(5) For the purchase of land In the planning and development, including construction, erection or installation of buildings for an industrial complex when the land or buildings, or both, at the discretion of the Town Council may be sold or leased by the Town to private enterprise where such buildings are all purpose buildings suitable for sale or rental for general manufacturing use or office use or general retail use or any combination thereof;
(6) For- the acquisition, construction, reconstruction, repair, alteration, improvement, extension or financing or partial refinancing of any commercial enterprise, which includes but is not limited to, shopping centers, and any industrial or agricultural enterprises, provided that the project requires a capital investment of at least Two Hundred Fifty Thousand Dollars ($250,000.00) and that the issuance of such bonds pursuant to this Paragraph (6) shall not constitute a debt of the Town of Laurel nor a pledge of its credit or taxing power and the bonds shall contain on the Face thereof a statement to the following effect:
'Neither the faith and credit nor the taxing power of the Mayor and Council of Laurel is pledged to the payment of the principal of premium, if any, or interest on this bond, nor is the Mayor and Council of Laurel in any manner obligated to make any appropriation for payment thereof.'
(1) For the refunding from time to time of any bonds issued pursuant to the provisions of this Section by the Issuance of new bonds, whether the bonds to be refunded have or have not matured, or be subject to redemption, and may issue bonds then outstanding in amounts sufficient to provide:
A. The principal amount of the obligations being refunded:
B. Any applicable redemption premiums thereon;
C. Unpaid interest on such obligations to the date of delivery of the refunding from the date of delivery of the refunding bonds to the first of any subsequently available redemption date or dates selected by the Town Council; and
D. Any expenses, including bond discount, deemed by the Town Council to be necessary for the issuance of the refunding bonds. The proceeds of the sale of any refunding bonds shall be applied as follows, either:
(1) To the immediate payment and retirement of the obligations being refunded; or
(2) If not required for the immediate repayment of the obligations being refunded, such proceeds shall be deposited in trust to provide for the payment and retirement of the obligations being refunded, but provisions may be made for the pledging and disposition of any amount in excess of the amounts required for such purposes, including, without limitation, provision for the pledging of any excess amounts to the payment of the principal of and interest on any portion of such refunding bonds or series of such refunding bonds issued for the purpose of providing amounts in addition to the principal amount and the premium payable with respect to the outstanding obligations to be refunded.
(c) All bonds issued pursuant to this Section shall be deemed to be legal investments by any bank, trust company, insurance company, executor, administrator, guardian, trustee or any other fiduciary.
(d) At its discretion, the Town Council may dispose of any property and any personal property acquired by the issuance of bonds pursuant to this Section to a private individual, firm or corporation at public or private sale, for cash or on credit, and under such other terms and conditions as the Town Council may deemed to be in the best interest of the Town without regard to any other provision of this Charter; provided, however, that the revenue received from any such disposition shall be used to retire any outstanding bonds and if no bonds which are issued pursuant to this Section are outstanding, the revenue derived from such disposition may be used for any municipal purpose.
(e) Any property acquired by Mayor and Council of Laurel from the proceeds of bonds issued pursuant to this Section shall be exempt from taxation by the State of Delaware or any political subdivision thereof.
(a) The interest on any bonds pursuant to this Section shall be exempt from all taxation by the State of Delaware or by any political subdivision or agency thereof.
(a) There shall be no limitation on the nmount of bonds to be issued pursuant to this Section and the indebtedness created by any bonds Issued pursuant to this Section shall not be used in computing the maximum bonded indebtedness which may be created by the Town pursuant to S15 of this Charter nor shall the Town Council be required to levy taxes to pay the principal of or interest on any bonds issued pursuant to this Section.
(a) The bonds to be issued pursuant to this Section shall be authorized by resolution of the Town Council and shall bear such date or dates, mature at such time or times not exceeding forty (40) years from their respective dates, bear interest at a rate or rates per annum as may be determined by the Town Council, be in such denominations, be in such form either coupon or registered, carry such registration privileges, be executed in such manner, be payable in lawful money of the United States of America, at such places and be subject to such terms of redemption, as such resolution or resolutions may provide. Bonds of Mayor and Council of Laurel issued by the Town Council pursuant to the provisions of this Section may be sold at either public or private sale at such place and interest rates as may be determined by the Town Council.
(i) Any resolution or resolutions authorizing any bonds securing any issue or bonds may contain provisions which shall be part of a contract with the holders of t',e bonds thereby authorized, as to:
(1) Pledging all or any part of the monies, earnings, income and revenues derived from the undertaking for which the bonds are issued to secure the payment of the bonds or of any Issue of the bonds subject to such agreements with bondholders as may then exist;
(2) The rates, rentals, fees and other charges to be fixed and collected and the amounts to be raised in each year thereby, and the use and disposition of the earnings and other revenues;
(1) The setting aside of reserves and the creation of sinking funds and the regulations and disposition thereof;
(2) Limitations on the right of the Town Council to restrict and regulate the use of the activity or property in connection with which such bonds are issued;
(1) Limitations on the purposes to which the manner in which the proceeds of sale or any Issue of bonds may be applied;
(6) Limitations on the issuance of additional bonds, the terms upon which additional bonds may be issued and accrued, the refunding of outstanding or other bonds;
(7) The procedure, if any, by which the terms of any contract with bondholders 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;
(8) The creation of special funds into which any earnings or revenues of the Town may be deposited;
(1) Vesting in a trustee or trustees such properties, rights, powers and duties in trust as the Town Council may determine which may include any or all of the rights, powers and duties of the trustee appointed by the bondholders pursuant to this Section and limiting or abrogating the right of bondholders to appoint a trustee under such Section or limiting the rights, duties and powers of such trustee;
(1) Defining the acts or omissions to act which shall constitute a default in the obligation and duties of the Town Council to the bondholders and providing the rights and remedies of the bondholders in the event of such default, including as a matter of right the appointment of a receiver; provided however that such rights and remedies shall not be inconsistent with the general laws of this State and any other provisions of this Charter;
(1) Any other matters of like or different character which in any way affect the security or protection of the bonds;
(1) The obligations of the Town Council in relation to the construction, maintenance, operation, repairs and insurance of the property, the safeguarding and application of all monies and as to the requirements for the supervision and approval of consulting engineers in connection with construction, reconstruction and operation;
(1) Any other matter of course of conduct which by recital in a resolution or resolutions is declared to further secure the payment or the principal of or interest on the bonds.
(j) Neither the Mayor nor any member of the Town Council of Mayor and Council of Laurel nor any person executing the bonds or other obligations shall be personally liable on the bonds or other obligations or be subject to any personal liability or accountability by reason of the issuance thereof.
(k) The Town Council shall have the power out of any funds available therefor to purchase (as distinguished from the power of redemption hereinabove provided) any bonds issued pursuant to this Section or which may be assumed by the Town Council at a price of not more than the principal amount thereof and accrued interest and all such bonds shall be cancelled.
(1) In the discretion of the Town Council, the bonds may be secured by a trust indenture by and between Mayor and Council of Laurel and a corporate trustee which may be any trust company or bank having the powers of a trust company within the State of Delaware. Such trust indenture may contain such provisions for protecting any enforcing the rights and remedies of the bondholders as may be reasonable and proper and not in violation of law, including covenants setting forth the duties of the Town Council in relation to the construction, maintenance, operation, repair, insurance of the properties, and the custody, safeguarding and application of all monies, and may provide that the property shall be constructed and paid for under the supervision and approval of consulting engineers. The Town Council may provide by such trust indenture for the payment of the proceeds of the bonds and the revenues of the properties to the trustee under such trust indenture or other depository, and for the method of disbursement thereof, or such safeguards and restrictions as the Town Council may determine. All expenses incurred In carrying out the provisions of such trust Indenture may be treated as a part of the cost of maintenance, operation and repair of the properties. If the bonds shall be secured by trust indenture, the bondholder shall have no authority to appoint a separate trustee to represent them. Notwithstanding any other provisions of this Section, any resolution or resolutions authorizing bonds or notes of the Town pursuant to the provisions of this Section shall contain a covenant by the Town Council that it will at all times maintain rates, fees, rentals and/or other charges sufficient to pay, that any contracts entered into by the Town Council for the use of any properties shall contain rates, fees, rentals or other charges sufficient to pay the cost of operation and maintenance of the properties, the principal of and interest on any obligations issued pursuant to such resolution or resolutions as the same severally become due and payable and to maintain any reserves or other funds required by the term of such resolution or resolutions.
(m) In the event that Mayor and Council of Laurel shall default in the payment of principal of or interest on any issue or bonds after the same shall have become due, whether out of maturity or upon call for redemption, and such default shall continue for a period of thirty (30) days, or in the event that Mayor and Council of Laurel shall fall or refuse to comply with the provisions of this Section or shall default in any agreement made with the holders of any issue or bonds, the trustee appointed by the Town Council or if none has been appointed, the trustee who may be appointed by the holders of twenty-five percent (25%) in aggregate principal amount of the bonds of such Issue then outstanding by Instrument or instruments filed In the Office of the Recorder of Deeds, in and for Sussex County, approved or acknowleged in the same manner as a deed to be recorded shall represent the holders of such bonds for the purposes stated in this Section. Such trustee may and upon written request of the holders of twenty-five (25%) of principal amount of such 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 Mayor and Council of Laurel to collect revenues, rates, rentals, fees and other charges adequate to carry out any agreement as to, or pledge of such revenues, rates, rentals, fees and other charges and to require Mayor and Council of Laurel to carry out any other agreements with the holders of such bonds and to perform its duties pursuant to the provisions of this Section;
(2) Bring suit upon such bonds;
(3) By action of suit in equity require that Mayor and Council of Laurel to account as if it were the trustee of an express trust for the holders of such bonds.
(n) Any suit, action or proceeding by the trustee on behalf of bondholders shall be heard or maintained in a Court of competent jurisdiction.
(o) Before declaring the principal of all such bonds due and payable, the trustee shall first give thirty (30) days notice in writing to Mayor and Council of Laurel.
(p) Any such trustee, whether or not the issue of bonds represented by such trustee has been declared due and payable, shall be entitled as a right to the appointment of a receiver for any property for which the revenues are pledged for the security of the bonds of such issue and such receiver may enter and take possession of such part or parts of the properties and subject to any pledge or agreement with bondholders shall take possession of all monies and other properties derived from such part or parts of the properties and proceed with any construction thereon or the acquisition of any property, real or personal, in connection herewith which Mayor and Council of Laurel is under an obligation to do, and to operate, maintain and reconstruct such part or parts of the properties and collect and receive all revenues thereafter arising therefrom subject to any pledge thereof or agreement with bondholders relating thereto and perform the public duties and carry out the agreements and obligations of Mayor and Council of Laurel under the direction of the Court. In any suit, action or proceeding by the trustee, fees, counsel fees and expenses of the trustee and of the receiver, if any, shall constitute taxable disbursements and all costs and disbursements allowed by the Court shall he a first charge on any revenues derived from the properties.
(q) Such trustee shall, in addition to the foregoing, have and possess all of the powers necessary or apporopriatc for the exercise of any functions specifically set forth herein or Incident to the general representation of bondholders In the enforcement and protection of their rights."
Approved July 9, 1982.