Chapter 42. Revenue Authority

Authority means the Montgomery County Revenue Authority.

Bonds or revenue bonds mean revenue bonds, notes, certificates, or other evidence of indebtedness or obligation which the Authority is authorized to issue under this Chapter or under Chapter 446 of the 1957 Laws of Maryland, as amended.

Construction includes acquisition.

"Cost of the project" or "cost of the facility" includes the cost of:

Council means the County Council of Montgomery County, Maryland.

County means Montgomery County, Maryland.

Equipment or furnishings includes any equipment and furnishings, and their installation, as required by the lessee for use of a project.

Executive means the County Executive of Montgomery County, Maryland.

Federal agency means the United States of America, the President of the United States of America, and any department of or corporation, agency, or instrumentality created, designated, or established by the United States of America.

Improvement includes extension or enlargement of a facility or project.

Parking facility means any area, lot, structure, building, garage, or vehicle which may be established, constructed, acquired, owned, leased, maintained, or operated by the Authority. Parking facility also means parking meters which may be acquired, owned or leased by the Authority. Parking facilities may include space for general rental purposes as the Authority considers necessary or appropriate.

Person means any individual, corporation, partnership, association, joint venture, trust, public body, or organization of any kind, and any trustee, successor, assignee, transferee, or personal representative.

Project means any structure, facility, or undertaking or any combination of them of a similar class or character which the Authority is authorized to construct, improve, equip, furnish, maintain, acquire, or operate under this Chapter.

State means the State of Maryland.

The Montgomery County Revenue Authority is established as a body corporate and politic, and is an instrumentality of the County and a public corporation. The Authority is a continuous body with the Montgomery County Revenue Authority established under Chapter 446 of the 1957 Laws of Maryland, as amended.

The Authority has 5 voting members appointed by the Executive and confirmed by the Council. In addition, the Chief Administrative Officer, or the Chief Administrative Officer’s designee, serves as an ex-officio, non-voting member. Each voting member must reside in Montgomery County.

Each member of the Authority must be a person of ability, experience, and integrity, and must not be selected based on a special interest.

The term of a voting member is 5 years, and the term of one member expires each year. Each member is eligible for reappointment.

The Executive must designate the chair of the Authority.

projects to stimulate employment or economic growth in the County;

airports and landing fields;

public housing projects;

housing for special age groups;

health and welfare facilities, including hospitals and sanatoria;

bridges, toll bridges, and tunnels;

parks, swimming pools, golf courses, tennis courts, arenas, stadiums, and recreational facilities;

dams, impounding basins, and flood control, water supply, and sewerage disposal projects;

parking facilities;

highways, parkways, traffic distribution centers, and related facilities;

public transportation facilities and systems;

other land and buildings to be occupied by governmental or educational agencies; and

other projects authorized under the capital improvements program or by resolution adopted by the Council and approved by the Executive.

The members of the Authority must elect a secretary-treasurer who may or may not be a member of the Authority.

Before the Authority issues any revenue bonds under this Chapter, the secretary-

The Authority must publish and make available to the public each year an annual report that summarizes its activities during the preceding fiscal year and its future plans in a non-technical, readable format.

The Authority must publish and make available to the public each year, not later than May 1, its proposed annual operating budget for the next fiscal year.

perpetual existence as a corporation;

rights to sue and be sued, to implead and be impleaded, to complain and defend in all courts;

power to adopt, use, and alter at will a corporate seal;

power to acquire, purchase, hold, and use any property, real, personal, or mixed, tangible or intangible, or any interest necessary or desirable for carrying out the purposes of the Authority;

power to lease as lessee any property, real, personal or mixed, or any interest in property, for a term not exceeding 99 years at a nominal or other rent;

power to lease as lessor to any person, any project at any time constructed by the Authority, whether wholly or partially completed, and any property, real, personal or mixed, tangible or intangible, or any interest in property, at any time acquired by the Authority, whether wholly or partially completed;

power to sell or otherwise transfer to the County any project at any time constructed by the Authority, and any property, real, personal or mixed, tangible or intangible, or any interest in property, at any time acquired by the Authority;

power to acquire by purchase, lease or otherwise hold and to construct, improve, equip, furnish, maintain, repair and operate projects;

power to appoint officers, attorneys, accountants, agents, and employees; to prescribe their duties and to fix their compensation; and to provide a merit system for its employees;

power to appoint an executive officer;

power to make bylaws for the management and regulation of its affairs;

power to fix, charge, and collect tolls, rates, rents, and other charges for the use of the facilities of, or for the services rendered by, the Authority or its projects, at reasonable rates, to be determined by the Authority to:

power to borrow money and issue negotiable revenue bonds, on a taxable or tax exempt basis, and to secure the payment of such bonds, or any part thereof, by pledge or indenture of trust of all or any part of its revenues, rents and receipts. The Authority may issue bonds on behalf of the County for the public purposes of the County;

power to make contracts of every kind and to execute all instruments necessary or convenient to carry on its business;

power to borrow money and accept grants from, and to enter into contracts, leases, or other transactions with, any federal or state agency;

power to acquire in its own name, by condemnation under the State condemnation law, real property, rights, or easements, franchises, and licenses convenient for its corporate purposes. However, the Authority is under no obligation to accept and pay for any property condemned under this Chapter except from the funds provided to the Authority under this Chapter. In any proceeding to condemn property, the Court may enter such orders as may be just to the Authority and to the owner of the property to be condemned. Property owned by the County, or by any County agency, or property of the State, may not be acquired by the Authority by purchase or condemnation without the prior consent of the Executive or the Board of Public Works of the State, as applicable;

power to pledge, hypothecate or otherwise encumber revenues or receipts of the Authority as security for obligations of the Authority;

power to do all acts and things necessary or convenient to carry out the powers granted to it under this Chapter or any other law, resolution, or regulation;

power to enter into agreements with the State Highway Administration or any other public body providing for the construction or reconstruction of highways and bridges by the Authority, if necessary for the acquisition or construction of toll bridges or roads by the Authority;

power to acquire, by assignment from the State or the County, contracts which are not completed and which involve constructing, improving, equipping, furnishing, maintaining, and operating structures, facilities, or undertakings similar to those designated as projects; and

power to convey to the County all of its right, title and interest in any project if the revenue bonds or revenue refunding bonds issued under this Chapter to provide the funds for the cost of a project or to secure funding for other projects has been paid and retired.

Merit system. The Authority may establish a merit system for its employees. Upon establishment of a merit system by the Authority, the employment and tenure of all full-time employees of the Authority, except the executive officer, must be subject to the system.

State retirement system. All employees of the Authority, including the executive officer, may join the State of Maryland employees retirement system in a like manner as provided for the employees of the County.

Charter requirements. Members and employees of the Authority are subject to Sections 405, 406, 407, 408, 409, and 410 of the County Charter.

Ethics. Members and employees of the Authority are subject to Chapter 19A.

Executive Officer. The Executive Officer serves at the pleasure of the Authority, is responsible to it and receives the salary fixed by the Authority. The executive officer is the chief administrative officer of the Authority. The Authority may delegate to the Executive Officer any of its administrative powers and authorizations. The executive officer must be of good character, integrity and business experience and, during the time of employment, must have no financial interest in any facilities or projects with respect to which the Authority has jurisdiction or any power to act.

Six-year programs.

Notice of proposed project; rejection by Executive.

Threshold. Notwithstanding other requirements of this Section, the Authority may make an improvement to an existing project without inclusion in the six-year capital improvements program or approval of the Executive if the cost of the improvement does not exceed $50,000.

The Executive may:

In addition to advances authorized by Section 42-19, the Council may advance County general funds to the Authority for expenses for investigations, engineering and architectural studies, opinions, and compensation of employees and counsel which may be incurred before the sale of its revenue bonds. These advances must be repaid out of the first proceeds of the sale of revenue bonds by the Authority after the advance.

The Authority may provide by resolution for the issuance of negotiable revenue bonds to pay all or part of the cost or purchase price of one or more projects. The resolution authorizing the issuance of revenue bonds, or the trust indenture, must state the estimated cost or purchase price of the project or projects involved. The revenue bonds must be issued in amounts stated in the resolution.

The principal and interest of revenue bonds must be paid solely from the funds and revenues received by the Authority. No tax, excise or special assessment, except as authorized by this Chapter, may be levied to pay such principal and interest.

The revenue bonds of each issue must be dated, must bear interest at a rate not exceeding the maximum legal rate per annum permitted by law, payable semi-annually, and must mature at such time or times, not exceeding 50 years from their date or dates, as determined by the Authority. The bonds of each issue may be made redeemable before maturity at the option of the Authority at such price or prices and under terms and conditions as may be fixed by the Authority before the issuance of the bonds. The Authority must determine the form of the bonds, including any interest coupons to be attached, and must fix the denomination or denominations of the bonds and the place or places of payment of principal and interest which may be at any bank or trust company within or outside the State. The payment of principal and interest of the bonds may be made in any lawful medium. The Authority must determine the manner of executing the bonds and the manner of executing any interest coupons attached. Execution of these instruments may be by facsimile signature of the chairperson or an authorized member of the Authority. The official seal of the Authority must be affixed to the bonds and they must be attested by the secretary of the Authority. If any officer whose signature appears on any bonds or coupons ceases to be an officer before the delivery of the bonds, the signature of that officer remains valid and sufficient for all purposes, as if that officer had remained in office until delivery.

All revenue bonds issued under this Chapter are negotiable instruments under the negotiable instruments law of this State.

The revenue bonds may be issued in coupon or in registered form, or both, as the Authority may determine. The Authority may provide for the:

The Authority may sell revenue bonds in such manner, either at public or private sale, and for such price, as it determines in the best interests of the Authority. However, the sale must not be made at a price so low that requires the payment of interest on the money received at more than the maximum legal rate per annum permitted by law, computed with relation to the absolute maturity of the bonds under standard tables of bond values, excluding, however, from such computation, the amount of any premium to be paid on redemption of any revenue bonds before maturity.

The provisions of Sections 9 to 11, inclusive, of Article 31 of the Annotated Code of Maryland, 1957, as amended, do not apply to the revenue bonds issued by the Authority.

The proceeds of the revenue bonds of each issue must be used solely for the payment of the cost of the project or projects for which the bonds have been issued. The proceeds must be distributed in the same manner and under the restrictions, if any, stated in the resolution of the Authority authorizing the issuance of the bonds, or in any trust agreement securing the bonds. If the proceeds of the bonds of any issue are less than the cost of a project or projects, additional bonds may be issued in the same manner to fund the amount of the deficit. Unless otherwise provided in the resolution authorizing the issuance of the bonds, or in the trust agreement securing the bonds, these additional bonds are considered to be of the same issue and are entitled to payment from the same funds, without preference or priority of the bonds first issued. If the proceeds of the bond of any issue exceed the cost of the project or projects for which the bond is issued, the surplus must be deposited into the sinking fund provided under this Chapter for the payment of principal of and interest on the revenue bonds.

Before definitive revenue bonds are prepared, the Authority may, under similar restrictions, issue interim receipts or temporary bonds, with or without coupons, to be exchanged for definitive bonds when the bonds are executed and are available for delivery. The Authority may also provide, by resolution, for the replacement of any bonds which are mutilated, destroyed, or lost.

The revenue bonds of the Authority may be issued without an election referendum or any other proceedings or the occurrence of any other conditions or events; only those proceedings, conditions or events which are specified and required by this Chapter apply to these bonds, and they are in all respects exempt from other provisions of the County Charter or County laws.

The Authority may provide by resolution for the issuance of revenue refunding bonds to refund any revenue bonds then outstanding and issued under this Chapter. The issuance of revenue refunding bonds, including the maturities and other details, the rights of the holders, and the duties of the Authority, are controlled by this Chapter to the extent applicable.

The Authority may provide by resolution for a single issue of its revenue bonds for the combined purposes of:

Only fees, rents, tolls, charges, and revenues received from the use of the project or projects constructed from the proceeds of the bonds may be used or appropriated for the payment of interest or principal of such bonds; except that before and during construction and for one year after the completion of the construction of any project for which revenue bonds have been issued, the interest on the bonds may be paid out of the proceeds from the sale of the bonds.

a statement that the revenues received or to be received from the project or projects financed from the proceeds of any issue of revenue bonds can not be used to service any other revenue bonds issued to finance the cost of any other project;

subject to the provisions of subsection (a), a pledge of the full faith and credit of the Authority (but not of the County or the State or any political subdivision) for such obligations;

a statement describing the construction, improvement, operation, extension, enlargement, equipping, furnishing, maintenance, and repair of any project, and the duties of the Authority with respect to the project;

the terms and provisions of the bonds;

any limitations on the purposes to which the proceeds of the bonds then or thereafter to be issued, or of any loan or grant by the United States or the State, may be applied;

a description of rate of tolls, rents and other charges for the use of the project or the facility of the Authority, or for the services rendered by the Authority, including limitations on the power of the Authority to modify any lease or other agreement under which any tolls, rents, or other charges are payable;

the establishment of reserves or sinking funds, including the regulation and disposition of the funds;

a description of any limitations on the issuance of additional bonds;

the terms of any deed of trust or indenture securing the bonds or otherwise relating to the bonds; and

a description of any other agreement with holders of the bonds.

All moneys received from any revenue bonds issued and sold must be applied solely for the purpose for which the bonds are authorized, or to the sinking fund established for the payment of the bonds. These moneys are trust funds for those purposes.

There is a lien on such moneys in favor of the holders of any bonds or any trustee appointed with respect to the bonds, until the moneys are applied to the purposes for which the bonds are authorized or to the sinking fund for repayment of the bonds.

The revenue bonds issued by the Authority do not constitute a debt of the County or a pledge of the full faith and credit of the County or of the State or any political subdivision thereof, but such revenue bonds are payable from the funds of the Authority provided from revenues of the project or projects of the Authority. All such revenue bonds must contain a statement on their face to the effect that the full faith and credit of the County, State, or any political subdivision is not pledged to pay the bonds or the interest.

The issuance of the revenue bonds must not directly, indirectly, or contingently obligate the County to levy or pledge any form of taxation, or to any appropriation for their payment.

The Executive may, with the approval of the Council, collaterally agree to provide sufficient moneys from the general funds of the County to pay any deficiency in the debt service requirements of the bonds for any year in which there is a deficit. However, any advance must be repaid from the receipts, rents, or revenues of the Authority in the next succeeding year in which the receipts, rents, or revenues exceed debt service requirements and operating expenses. In addition, any advance under any agreement or agreements must not exceed a maximum payment by the County of $50,000 for any one year.

The Authority may secure any revenue bond issued to provide funds for the purchase, acquisition, construction or improvement of any project by a trust indenture between the Authority and a corporate trustee. The trustee may be any trust company or bank having the powers of a trust company in or outside the State.

The Authority may be a party to one or more trust indentures, if revenue bonds have been issued to finance more than a single project. A trust indenture may pledge or assign all revenues from any project or projects, but must not convey or mortgage the project or any part of it, unless authorized by the Council.

The resolution authorizing the issuance of revenue bonds or trust indentures may contain provisions for the protection and enforcement of the rights and remedies of the bondholders, including:

Any bank or trust company incorporated under the laws of this State may act as depository of the proceeds of the bonds or revenues.

All expenses incurred in carrying out such trust indenture may be treated as a part of the cost of maintenance, operation and repair of any project or projects.

The Authority may fix and revise rates, tolls, rents, and charges for the use of any of its projects, and may charge and collect them.

The Authority may contract with any person who wants to use a project, either in whole or in part, and may fix the terms, conditions, and charges for the use.

Rates, tolls, rents, or charges should be fixed and adjusted to provide a fund sufficient to pay:

The rates, tolls, rents, and charges of the Authority are not subject to supervision or regulation by any State, County, or municipal entity.

Except for revenues required to pay the cost of maintaining, repairing and operating any project, or to provide reserves, or permitted in the resolution authorizing the issuance of the revenue bonds or the trust indenture, the rates, tolls, rents, or charges, and all other revenues received by the Authority from any project must be placed in a sinking fund at such intervals as may be provided in the resolution or trust indenture. The sinking fund is pledged to and charged with the payment of:

The rights and remedies granted to the bondholders under this Chapter are in addition to, and not in limitation of, any rights and remedies granted to bondholders by a resolution authorizing the issuance of bonds, or by any deed of trust, indenture or other agreement under which a bond is issued.

The holders of 25% of the aggregate principal amount of the bonds then outstanding, by instrument filed in the Office of the Clerk of the Circuit Court for Montgomery County, and acknowledged in the same manner as a deed to be recorded, may (except as limited under the provisions of any deed of trust, indenture, or other agreements) appoint a trustee to represent the bondholders under this Chapter if the Authority:

The trustee, and any trustee under any deed of trust, indenture or other agreement may, and on written request of the holders of 25% (or other percentage specified in any deed of trust, indenture, or other agreement) of the aggregate principal amount of the bonds then outstanding, must, in the name of the trustee:

Any trustee, whether appointed under this Section or acting under a deed of trust, indenture or other agreement, and whether or not all bonds have been declared due and payable, is entitled as of right to the appointment of a receiver. The receiver may, to the same extent that the Authority could:

In any legal action by the trustees, the fees, counsel fees, and expenses of the trustee and of the receiver, if any, and all costs and disbursements allowed by the court, are first charges on any revenues and receipts derived from the facilities of the Authority which are or may be applied to the payment of the bonds in default.

A trustee under this Section has all of the powers necessary or appropriate for the exercise of any functions specifically described in this Chapter, or incident to the general representation of the bondholders in the enforcement and protection of their rights.

In addition to all other rights and remedies, any holder of bonds has the right by mandamus or other legal action to enforce that holder's rights against the Authority, including the right to require the Authority to:

Nothing in this Chapter authorizes a receiver appointed under this Chapter to operate and maintain any Authority project to sell, assign, mortgage or otherwise dispose of, any of the Authority's assets, except where such sale, assignment, or mortgage is expressly permitted by the revenue bonds of that particular project. The powers of the receiver are expressly limited to the operation and maintenance of the Authority's facilities as the court directs, and no holder of the Authority's bonds, nor any trustee, may in any legal action compel a receiver, nor is any receiver authorized, or any Court empowered to direct the receiver, to sell, assign, mortgage, or otherwise dispose of the Authority's assets, unless the bonds expressly authorize the sale, assignment, or mortgage of the assets of a specific project.

If any project or part of a project is constructed, improved, equipped, or furnished under a contract and the estimated cost exceeds $10,000, the contract must be awarded to the lowest responsible and responsive bidder on a competitive basis. The Authority may adopt regulations for the submission of bids in these circumstances. Contracts for constructing, equipping, furnishing, or improving a project should require that a contractor give sufficient surety, approved by the Authority and in an amount fixed by the Authority, for the faithful performance of the contract. The contract must be accompanied by an additional bond for the protection of labor and material subcontractors. Each construction contract must require the contractor to pay for all materials furnished and services rendered to perform the contract. The contract must also provide that any person who furnishes materials or services may maintain an action to recover the fair value of them against the obligor under the bond as though such person were named, if the action is brought within one year after the cause of action occurred. This Section does not limit the power of the Authority to construct any project or part of a project, or any improvement to a project, directly by the officers, agents, and employees of the Authority, or by agreement with the federal or State government. The Authority may enter into and perform such contracts, or establish or comply with any rules and regulations concerning labor, materials, and other related matters in connection with any project as the Authority finds desirable, or as may be requested by any federal or State agency as part of the financing of the project.

The Authority is subject to the recycled materials procurement provisions of Sections 11B-44 (a), (b), and (c), as they apply to the Authority.

Unless otherwise provided in the resolution authorizing any issue of bonds, or unless otherwise provided by the trust indenture that secures the bonds, all moneys received by the Authority must be paid to the treasurer of the Authority. These moneys must be deposited by the treasurer in one or more banks or trust companies in one or more special accounts. Each special account, to the extent not insured, must be continuously secured by a pledge of the direct obligations of the United States of America, of the State or of the County, having an aggregate market value at all times, exclusive of accrued interest, of at least the balance of deposits in the account. The securities must either be deposited with the treasurer, or be held by a trustee or agent approved by the Authority. All banks and trust companies are authorized to give such security for such deposits. The moneys in the accounts must be paid on the warrant or other order of the chairperson of the Authority, or any other person that the Authority authorizes to execute the warrants or orders.

The Authority must have an annual examination of its books, accounts, and records by a certified public accountant. A copy of the audit must be delivered to the Executive and to any other person named to receive the audit in the resolution authorizing the issuance of the bonds or in the trust indenture that secures them. If the Authority fails to make the audit, then the Executive or designee may examine, at the expense of the Authority, the accounts and books of the Authority, including its receipts, disbursements, contracts, leases, sinking funds, investments, and any other matters relating to its finances, operations, and affairs.

The County Attorney has the right to examine the books, accounts, and records of the Authority.

A financial statement of the Authority must be published annually in a newspaper of general circulation in the County. If the publication is not made by the Authority, the Executive or designee must publish the statement at the Authority's expense.

Under Chapter 601 of the 1992 Laws of Maryland, the establishment of a project under this Chapter is in all respects for the benefit of the inhabitants of Montgomery County and is a public purpose. The County, the State and the Authority are performing an essential governmental function in exercising the powers conferred by this Chapter. The Authority must not be required to pay any tax or assessment on:

The Authority and the State, County, and other incorporated cities or towns in the County may enter into an agreement, for such duration as they may determine, for the payment of a stated sum in lieu of taxes by the Authority to the State or a political subdivision.

The Authority is subject to any applicable benefits assessment, including any road, street, sewer, and water charge that may be levied by operation of law.

Revenue bonds issued under this Chapter are securities in which all public officers and public agencies of the State and its political subdivisions, and all banks, trust companies, savings and loan associations, investment companies and others carrying on a banking business, all insurance companies, and insurance associations and others carrying on an insurance business, all administrators, executors, guardians, trustees, and other fiduciaries, and all other persons may legally and properly invest funds, including capital, in their control or belonging to them.

Revenue bonds issued under this Chapter are securities which may properly and legally be deposited with and received by any State or municipal officer or any agency or political subdivision of the State for any purpose for which the deposit of bonds or other obligations of the State is authorized by law.

If construction of a project requires the relocation of the facilities of any public utility, whether the utility is publicly, privately, or cooperatively owned, the Authority must pay the cost of removal of the facilities from the property of the Authority and the cost of relocation, including repair of the area disturbed by the removal. The cost of relocation includes the entire amount paid by the utility attributable to the relocation, including removal, transportation of facilities and equipment, and procurement of a new site.

The Authority is not required to pay the cost of reconstructing the facilities at a new location.

Notwithstanding subsection (b), the Authority may contract with the utility to pay part or all of the cost of reconstructing the facilities at a new location at its discretion.

It is the intent of the County that the Authority is a "constituted authority" within the meaning of the Internal Revenue Code of 1986, as amended, and the relevant regulations, rulings, and procedures.

The powers of the Authority must be construed to give effect to this intent.

Committee established. There is an Airpark Community Advisory Committee.

Membership.

Terms of voting members.

Duties. The Committee must:

Meetings; quorum; officers; compensation.

Staffing. The County Executive must designate a principal office or department identified under Section 1A-201(a)(1) to provide the staff support necessary for the Commission to perform its duties.

This Section must not be construed to: