CHAPTER 17

FORMERLY

HOUSE BILL NO. 208

AN ACT TO AMEND CHAPTER 174, VOLUME 23, LAWS OF DELAWARE, AS AMENDED ENTITLED AN ACT TO RE-INCORPORATE THE TOWN OF TOWNSEND" RELATING TO THE AUTHORITY TO ISSUE 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. Amend Chapter 174, Volume 23, Laws of Delaware, by adding thereto a new section to be designated §15 to read as follows:

"§15. Creation of Debt; Authorization Procedures and Debt Limitation and Anticipation Borrowing

(a) The Town shall have the power to authorize the issuance of bonds and notes of the Town to finance the cost of any object, program or purpose for which Town, or any officer, department, board or agency thereof, is by this Title or by any other law, authorized to raise, appropriate or expend money, or for the implementation and performance of functions, programs and purposes specified in this Title, or in any other law, applicable to Town; provided, however, that the Town shall not have authority to create or to authorize the creating of any bonded indebtedness for any of the following purposes:

The payment of any operating expenses, the payment of any judgment resulting from the failure of the Town to pay any item of operating expense; or the payment for any equipment or any public improvements of a normal life of less than 5 years. The foregoing limitations shall not apply should the Town unanimously declare the existence of an emergency due to public calamity.

(b) The powers conferred by this subsection shall be in addition to and not in substitution for or in limitation of the powers conferred by any other law. Bonds and notes may be issued under this Subchapter for any object or purpose for which Town is by this Chapter or any other law authorized to raise or appropriate or expend money notwithstanding that any other law may provide for the issuance of bonds or notes for the same or like purposes and without regard to the requirements, restrictions or other provisions contained in any other law. Bonds and notes may be issued under this Subchapter notwithstanding any debt or other limitation prescribed by any other law, and the mode and manner of procedure for the issuance of bonds and notes and the adoption of the ordinance authorizing issuance of the bonds or notes under this Chapter need not conform to the provisions of any other law or any other provision of this Chapter.

(c) Bonds and notes issued pursuant to this Subchapter shall be authorized by ordinance of the Town approved by not less than 3/5ths of all of the Members of Council. Each such ordinance shall state in brief and general terms the objects or purposes for which the debt is to be incurred and the maximum aggregate principal amount of debt to be incurred for each such object or purpose. Such ordinance, or a subsequent' resolution of the Town, shall specify, or may delegate authority to the Council President to determine, with respect to any bonds and notes; their date or dates; their maturity; the security therefore, if any, including a pledge of the Town's full faith and credit, federal or State grants or other revenues or property; provisions for either serial or term bonds; sinking fund or other reserve fund requirements, if any; provisions for redemption prior to maturity, if any, with or without premiums; the interest rate or rates and any limitations with respect thereto or the manner of their determination; the times and place or plates within or without this State for the payment of principal and interest; the method of execution; the form; provisions for the consolidation of debt authorized for several objects and purposes pursuant to one or more ordinances into one consolidated issue; provisions for the receipt and deposit or investment of any good faith deposit; provisions for the public or private sale of the debt instruments; and such other terms and conditions as may be in the best interest of the Town. Debt incurred by the Town pursuant to this Subchapter may be represented by uncertificated obligations of the Town which may be applicable to bonds and notes which are permitted to be issued under this Subchapter, and the Town by resolution may determine, or it may delegate authority to the Council President to determine, all procedures appropriate to the establishment of a system of issuing uncertificated debt.

(d) The Town may pledge its full faith and credit to secure the payment of the principal, interest and premium, if any, on any debt incurred pursuant to this Subchapter and/or may pledge any other security therefor. With respect to any debt to which the Town's full faith and credit is pledged, the authorizing ordinance and the debt instruments issued shall contain the declaration that the principal, interest and premium, if any, are to be paid by ad valorem taxes on all real property subject to taxation by the Town without limitation as to rate or amount and that the full faith and credit of the Town are pledged for payment. The Town shall annually levy and collect a tax ad valorem upon all taxable property sufficient to pay the principal of and interest on each bond or note secured by the Town's pledge of its full faith and credit as such principal and interest become due; provided, however, such tax may be reduced by the amount of other moneys appropriated and actually available for such purpose or provided for by local or special assessments or local service taxes.

(e) The outstanding general obligations bonded indebtedness of Town secured by its full faith and credit may not exceed twelve percent (12%) of the assessed valuation of all real property subject to taxation by the Town. The outstanding bonded indebtedness of the Town not secured by its full faith and credit is without limitation as to amount.

(f) The proceeds from the sale of bonds and notes issued under this Subchapter shall be used only for the object or purpose or (Objects or purposes specified in the ordinance authorizing such bonds or notes for the payment of the principal of and interest on temporary loans made in anticipation of the sale of such bonds or notes. If for any reason any part of such proceeds are not applied to or are not necessary for such purposes, such unexpended part of such proceeds shall be applied to the payment of the principal of or interest on such bonds or notes no later than the earliest date on which such bonds or notes may be called for redemption without premium.

(g) All bonds, notes or other evidences of indebtedness issued pursuant to this Subchapter 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 Town. 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 Town to is the same and of the legality, validity and enforceability of the obligation of the Town to pay principal of and interest on the same. In case any Town 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 sale of the Town 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 Town or any person after the issuance, execution and delivery against payment for the same. All such bonds, notes and other evidences of indebtedness are hereby declared to have all the qualities and incidents of negotiable instruments under the commercial code of this State.

(h) Notwithstanding any limitations herein to the contrary, the Town may borrow in the anticipation of the collection of taxes or other revenues budgeted for any purposes for which taxes are levied."

Approved May 9, 1989