CHAPTER 318

FORMERLY

HOUSE BILL NO. 501

AS AMENDED BY HOUSE AMENDMENT NOS. 1 AND 2

AN ACT TO AMEND DELAWARE CODE, TITLE 9, CHAPTER 5, RELATING TO THE ISSUANCE OF BONDS BY COUNTIES OF THE STATE FOR PURPOSES OF SUBURBAN COMMUNITY IMPROVEMENTS; TO AMEND DELAWARE CODE, TITLE 9 §1163 RELATING TO THE ISSUANCE OF BONDS BY NEW CASTLE COUNTY FOR GENERAL PURPOSES; TO AMEND DELAWARE CODE, TITLE 9, CHAPTER 22, RELATING TO THE ISSUANCE OF BONDS BY NEW CASTLE COUNTY FOR PURPOSES OF FINANCING THE COST OF SEWERAGE SYSTEMS; TO AMEND DELAWARE CODE, TITLE 9, CHAPTER 23 RELATING TO THE ISSUANCE OF BONDS BY NEW CASTLE COUNTY FOR PURPOSES OF FINANCING THE COST OF CONSTRUCTING SEWAGE DISPOSAL FACILITIES; AND TO AMEND DELAWARE CODE, TITLE 9, CHAPTER 28 RELATING TO THE ISSUANCE OF BONDS BY NEW CASTLE COUNTY FOR PURPOSES OF FINANCING WATER SUPPLY SYSTEMS.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. Amend subsection (b) of §502, Title 9 of the Delaware Code by striking in full the second sentence therein and substituting in lieu thereof the following:

"The bonds shall be issued in the form prescribed by the county government and shall be either registered bonds or bearer with coupons convertible into fully registered bonds, as may be determined by the county government. Debt incurred by the county government pursuant to this subchapter may be represented by uncertificated obligations of the county government which may be authorized in accordance with the same procedures applicable to bonds which are permitted to be issued under this subchapter and the county government may determine all procedures appropriate to the establishment of a system of issuing uncertificated debt."

Section 2. Amend §514, Title 9 of the Delaware Code by striking it in its entirety and substituting in lieu thereof the following:

"§514. Preparation Form and Execution of Bonds

The county government shall direct and effect the preparation and printing of the bonds authorized by this subchapter, shall determine whether such bonds shall be registered or bearer with coupons convertible into fully registered bonds and shall prescribe the form of the bonds and, in the case of bearer bonds with coupons, the form of the coupons for the payment of interest thereto attached. The bonds shall state the conditions under which they are issued. The face amount of the bonds and, in the case of bearer bonds with coupons, the coupons thereto attached shall be payable at such place or places as shall be designated by the county government. The bonds shall be signed in the manner prescribed by the county government."

Section 3. Amend §552(b), Title 9 of the Delaware Code by striking said subsection in its entirety and by substituting in lieu thereof the following:

"(b) The bonds shall mature not later than 20 years after the date of the lame shall bear interest at the most advantageous rate attainable by the county government, and the income therefrom shall not be subject to state taxation. The bonds shall be issued in the form prescribed by the county government and shall be either registered bonds or bearer with coupons convertible into fully registered bonds. The bonds may, at the discretion of the county government, be made redeemable at par plus accrued interest on any interest payment date upon terms and conditions to be stated in the bonds. Debt incurred by the county government pursuant to this subchapter may be represented by uncertificated obligations of the county government which may be authorized in accordance with the same procedures applicable to bonds which are permitted to be issued under this subchapter and the county government may determine all procedures appropriate to the establishment of a system of issuing uncertificated debt."

Section 4. Amend §563, Title 9 of the Delaware Code by striking it in its entirety and substituting in lieu thereof the following:

"The county government shall direct and effect the preparation and printing of the bonds authorized by this subchapter, shall determine whether such bonds shall be registered or bearer with coupons convertible into fully registered bonds and shall prescribe the form of the bonds and, in the case of bearer bonds with coupons, the form of the coupons for the payment of interest thereto attached. The bonds shall state the conditions under which they are issued. The face amount of the bonds and, in the cue of bearer bonds with coupons, the coupons thereto attached shall be payable at such place or places as shall be designated by the county government. The bonds shall be signed in the manner prescribed by the county government."

Section 5. Amend Delaware Code, Title 9, §1163, subsection (a)(1) to delete the numerals "10" in the first sentence thereof and substitute in their place the numeral "3".

Section 6. Amend Subsection (a), §1163, Chapter 11, Title 9 of the Delaware Code by striking subparagraphs (3), (4), (5), (6), (8) and (9) thereof, by renumbering existing paragraphs (7) and (10) as new paragraphs "(6)" and "(9)" respectively and by adding the following new paragraphs (3), (4), (5), (7), (8) and (10) to read as follows:

"(3) Bonds issued pursuant to this chapter shall be authorized by an ordinance passed by the county government with the concurrence of three-fourths of all of the members elected to the county government. Each such ordinance shall state in brief and general terms the objects or purposes for which the bonds are to be Issued and the maximum aggregate principal amount of bonds to be issued for each such object or purpose. Such ordinance, or a subsequent resolution of the county government„ shall specify, or may delegate authority to the County Executive to determine, the following: the date or dates of such bonds; the maturity of such bonds; provisions for either serial or term bonds; sinking fund or other reserve fund requirements, if any; due dates of the interest thereon; the form of such bonds, the denominations and designation of such bonds; registration, conversion and transfer privileges; provisions for redemption prior to maturity, if any, with or without premium; limitations with respect to the interest rate or rates on such bonds; the times and place or places„ within or without this State, for the payment of the principal of or interest on the bonds; the method of execution of the bonds; provisions for the consolidation of bonds authorized for several objects and purposes pursuant to one or more ordinances into one consolidate issue; provisions for the receipt and deposit or investment of the good faith deposit pending delivery of such bonds; provisions for the public or private sale of the bonds as hereinafter provided; provisions for the replacement of lost, stolen, mutilated or destroyed bonds; and such other terms and conditions of such bonds and of the issuance and sale thereof as the county government may determine to be in the best interests of the County. Debt incurred by the county government pursuant to this chapter may be represented by uncertificated obligations of the county government which may be authorized in accordance with the same procedures applicable to bonds which are permitted to be issued under this chapter and the county government by resolution may determine, or it may delegate authority to the County Executive to determine, all procedures appropriate to the establishment of a system of issuing uncertificated debt.

(4) The bonds authorized by each ordinance shall mature as may be determined by the county government but in any event not later than 30 years after the date of the bonds; provided, however, that the last maturity of bonds issued to finance any single water improvement costing over $5,000,000 may mature not later than 40 years after the date of such bonds.

(5) Bonds issued pursuant to this chapter shall be sold by the County Executive at public sale upon sealed proposals after at least 10 days notice published at least once in one newspaper published in the City of Wilmington and in a financial journal published in the City of New York, at such price and upon such terms, conditions and regulations as the county government may prescribe, provided that the county government may authorize the County Executive to sell such bonds at public or private sale upon such terms, conditions and regulations as it may prescribe.

(7) Bonds shall not be issued pursuant to this chapter if their issuance would increase the aggregate principal amount of all bonds of the County then outstanding to an amount in excess of 3% of the assessed valuation of the real estate taxable by the County. Provided, however, that in computing the outstanding bonds under the previous sentence of this paragraph, there shall not be included therein any bond, notes or other evidences of indebtednesses issued., or which may be issued, after January 8, 1968 (I) under Chapter 23 of this Title for the purpose of financing facilities for sanitary districts, or under Chapter 5 of this Title for the purpose of financing suburban community Improvements, (ii) under this Chapter or any other provision of law for the purpose of financing the construction or acquisition of sewer or sewage systems, airport facilities, or water improvements or supply systems, (ill) to the extent of any sinking fund or other reserve fund which will be available for the payment of, and which Is pledged to secure, said debt, (iv) in anticipation of tax or other revenues pursuant to subsection (c) of this section, or (v) which do not pledge the full faith and credit of the County. For the purposes of calculating under clause (Hi) above the amount of any sinking or reserve fund which will be available for payment of a debt, such fund shall be counted only to the extent it is invested in obligations of, or guaranteed by, the United States or any agency or instrumentality thereof and, to the extent that the rate of investment earnings thereon is not fixed or guaranteed, such rate shall be assumed to be 6% per annum.

(8) Whenever the County government shall have authorized the issuance of bonds by an ordinance adopted pursuant to this chapter, the County may borrow money in anticipation of the issuance of such bonds so authorized and, for such purpose, may issue, and may from time to time. renew negotiable bond anticipation notes of the County, of an aggregate principal amount not exceeding the principal amount of such bonds authorized by such resolution. The County may also borrow money in anticipation of the receipt of grants either from the Federal or State government or from any of their agencies, and for such purpose, may issue, and may from time to time, renew negotiable grant anticipation notes of the County in an aggregate amount, including interest thereon to the date of maturity, not greater than the grant or grants in anticipation of the receipt of which the notes are issued. The principal of and interest on the grant anticipation notes shall be payable out of the proceeds of the grant or grants, and the County shall so covenant. With respect to bond anticipation notes and grant anticipation notes, the County government shall authorize such notes by a resolution or resolutions which shall determine the date of the notes, the date on which such notes are to be payable, the maximum principal amount thereof and the rate or maximum rate of interest to be borne thereby and the manner of their signing. The County government in such resolution may delegate to the County Executive authority to sell the notes thereby authorized, either at public or private sale, and to determine within the limitations prescribed by such resolution, the rate of interest to be borne by such notes and the principal amount thereof. Monies raised by the issuance of notes in anticipation of the issuance of bonds or in anticipation of the receipt of grants shall be used only to finance the object or purpose for which the proceeds of the bonds or grants, respectively, may be used and such proceeds shall be applied, to the extent necessary, to pay and retire such notes. Notwithstanding any provisions of subsection (10) of this section, and notwithstanding any other provision of this chapter or any provision of any other law, grant anticipation notes may be made payable only from the proceeds of grants and need not pledge the faith and credit or taxing power of the County, and in that case, the notes may not be deemed to constitute an indebtedness of or a charge against the general credit or taxing power of the County within the meaning of any debt or other limitation or any provision of any other law.

(10) All bonds, notes or other evidences of indebtedness issued pursuant to this chapter shall recite that they are issued for a purpose or purposes as specified in the authorizing ordinance or resolution and that they are issued pursuant to the terms of the Constitution and laws of this State and the County. Upon the sale and delivery of any such bonds, notes or other evidences of indebtedness against payment, such recitals shall be conclusive as to the right, power and authority of the County to issue the same and of the legality, validity and enforceability of the obligation of the County to pay principal of and interest on the same. In case any County official whose signature or a facsimile thereof shall appear on any such bonds, notes or other evidences of indebtedness shall cease to be such officer before the delivery of such obligation, or in case the seal of the County which appears on any such obligation shall change before the delivery of such obligation, such signature, seal or facsimile thereof shall nevertheless be valid and sufficient for all purposes as if such officer had remained in office and as if such seal had not changed. The legality, validity, and enforceability of such bonds, notes or other evidences of indebtedness shall never be questioned in any court of law or equity by the County or any person after the issuance, execution and delivery against payment for the same. All such bonds, notes and other evidences of indebtedness arc hereby declared to have all the qualities and incidents of negotiable instruments under the commercial code of this State."

Section 7. Amend subsection (c) of §2204, Title 9, of the Delaware Code by adding at the end thereof the following:

"Debt incurred by the county government pursuant to this chapter may be represented by uncertificated obligations of the county government which may be authorized in accordance with the same procedures applicable to bonds which are permitted to be Issued under this chapter and the county government may determine all procedures appropriate to the establishment of a system of issuing uncertificated debt."

Section 8. Amend subsection (d) of §2204, Title 9 of the Delaware Code by striking the second sentence thereof and by adding after the words "City of Wilmington" the following:

"at such price and upon such terms, conditions and regulations as the county government may prescribe, provided that the county government may authorize the County Executive to sell such bonds at public or private sale upon such terms, conditions and regulations as it may prescribe."

Section 9, Amend subsection (b) of §2311, Title 9 of the Delaware Code by striking the phrase "at a rate which shall not exceed 5 percent per annum" where it appears in the first sentence thereof and substituting in lieu thereof the phrase "the most advantageous rate attainable by the county government"; by striking the words "at a state or national bank designated by New Castle County" where they appear in the third sentence thereof and substituting in their place "at such place or places as the county government may prescribe"; and by adding at the end of said subsection (b) the following:

"Debt incurred by the county government pursuant to this chapter may be represented by uncertificated obligations of the county government which may be authorized In accordance with the same procedures applicable to bonds which are permitted to be issued under this chapter and the county government by resolution may determine or it may delegate authority to the County Executive to determine all procedures appropriate to the establishment of a system of issuing uncertificated debt."

Section 10. Amend §2312, Title 9 of the Delaware Code by adding the following at the end thereof:

Section 11. Amend §2315, Title 9 of the Delaware Code by striking it in its entirety and substituting in lieu thereof the following:

The county government shall direct and effect the preparation and printing of the bonds authorized by this subchapter, shall determine whether such bonds shall be registered or bearer with coupons convertible into fully registered bonds and shall prescribe the form of the bonds and, in the case of bearer bonds with coupons, the form of the coupons for the payment of interest thereto attached. The bonds shall state the conditions under which they are issued, the face amount of the bonds and, in the case of bearer bonds with coupons, the coupons thereto attached shall be payable at such place or places as may be designated by the county government. The bonds shall be signed as prescribed by the county government."

Section 12. Amend subsection (c) of §2803, Title 9 of the Delaware Code by adding at the end thereof the following:

"Debt incurred by the county government pursuant to this chapter may be represented by uncertificated obligations of the county government which may be authorized in accordance with the same procedures applicable to bonds which are permitted to be issued under this chapter and the county government by resolution may determine, or it may delegate authority to the County Executive to determine, all procedures appropriate to the establishment of a system of issuing uncertificated debt."

Section 13. Amend subsection (d) of §2803, Title 9 of the Delaware Code by striking the second sentence thereof and by adding immediately after the words "City of Wilmington" the following:

"at such price and upon such terms as the county government may prescribe, provided that the county government may authorize the County Executive to sell such bonds at public or private sale upon such terms, conditions and regulations as it may prescribe."

Approved July 2, 1984.