In this subtitle the following words have the meanings indicated. “Bond” means a bond, note, or other similar instrument that a political subdivision issues under this subtitle. “Chief executive” means the president, chair, mayor, county executive, or any other chief executive officer of a political subdivision. “Designated blighted area” means an area designated under § 12-303 of this subtitle. “Financed area” means the geographic portion of a designated blighted area for which the proceeds of a bond are to be used under § 12-303 of this subtitle. “Political subdivision” means a county or municipal corporation.

To issue a bond, a political subdivision shall adopt an ordinance or resolution that: describes the proposed undertaking to be financed by the bond proceeds; requires compliance with § 12-303 of this subtitle before the bond is issued; and specifies the maximum principal amount of the bond. As the political subdivision considers appropriate to effect the financing of the proposed undertaking, the ordinance or resolution may: specify the items listed in subsection (c) of this section; authorize the finance board of the political subdivision to specify those items by resolution or ordinance; or authorize the chief executive of the political subdivision to specify those items by executive order. For each issuance of a bond, the political subdivision may specify: the principal amount; the interest rate or, for floating or variable rates of interest, the method to determine the interest rate; the manner and terms of sale, including whether by competitive or negotiated sale; the time of execution, issuance, and delivery; the form and denomination; the source, manner, times, and places to pay principal or interest; conditions for redemption before maturity; the actions taken to comply with § 12-307 of this subtitle; the purposes for which proceeds may be spent; the source of security; and other provisions that the governing body of the political subdivision determines are necessary or desirable to effect the financing of the proposed undertaking.

Before a political subdivision issues a bond, the political subdivision shall pass an ordinance or administrative resolution that: designates an area in the political subdivision as a designated blighted area based on the substantial presence of: excessive vacant land on which structures were previously located; abandoned or vacant buildings; substandard structures; delinquencies in real property tax payments; or similar factors that the political subdivision determines indicate blight; designates the financed area for which the proceeds of the bond are to be used; and adopts a redevelopment plan for the designated blighted area. Before a county may designate a blighted area or financed area that lies wholly or partly in a municipal corporation, the municipal corporation shall consent to the designation of the part of the area that is within the municipal corporation. Before a municipal corporation may designate a blighted area or financed area, the county that contains the area shall consent to the designation. Consent under this subsection shall be made by ordinance or administrative resolution. A political subdivision that issues a bond as a qualified redevelopment bond under the Internal Revenue Code shall comply with federal law in determining: the designated blighted area and the financed area to which the bond relates; and any other designated blighted areas in the political subdivision.

The General Assembly intends that general obligation debt may be incurred by issuing bonds if the purposes for the debt include the purposes for issuing bonds under this subtitle. Subject to subsections (c) and (d) of this section, a political subdivision may issue bonds to finance the redevelopment of a designated blighted area in accordance with the procedures of the political subdivision for authorization to sell and issue bonds. A bond issued in accordance with an ordinance or resolution that pledges the full faith and credit of a political subdivision is subject to: any applicable requirements of the Constitution and the political subdivision’s charter and laws on referendum for the issuance of general obligation debt; and each limitation imposed by public general law, public local law, or charter on general obligation debt of the political subdivision. This subsection does not apply to a county that is a charter county, as defined in § 1–101 of the Local Government Article, or a code county, as defined in § 1–101 of the Local Government Article. A county may not issue bonds that are secured by the full faith and credit of the county unless the amount of bonds to be issued by the county under this subtitle is first authorized by the General Assembly.

Except as provided in subsection (b) of this section, the ordinance or resolution described in § 12-303 of this subtitle may provide that a bond may be secured and made payable from any combination of: a pledge of the full faith and credit of the political subdivision and payable by taxes of general applicability; an increase in real property tax revenues that is attributable to increases in assessed value in designated blighted areas resulting from carrying out the purposes for which the bond is issued; revenues of the project or undertaking for which the bond is issued; proceeds of bonds; or other money that may be legally made available to pay the bond. A bond issued by Baltimore City may not be secured under subsection (a)(2) of this section.

The ordinance or resolution described in § 12-308 of this subtitle may provide that bond proceeds may be spent on any combination of: the following redevelopment purposes in a designated blighted area: acquisition of real property by the political subdivision; clearing and preparing the real property; rehabilitating the real property; and relocating occupants of the real property; other purposes that the local jurisdiction determines to be incidental, necessary, or appropriate to the redevelopment of the designated blighted area, including construction of new structures or the enlargement of existing structures; and expenses of preparing, printing, selling, and issuing bonds, and funding reserves and interest on the bonds, in the amounts and for the time that the political subdivision considers reasonable. Subject to subsection (c) of this section, money from the federal government, the State, or otherwise legally available for the purposes described in subsection (a) of this section may be spent for any of those purposes. Expenditures under this section shall first be authorized in accordance with applicable laws.

By written agreement with the issuer of a bond, a political subdivision that is not the issuer may: pledge to the payment of the bond any real property tax revenues attributable to increases in assessed value increase of property in designated blighted areas resulting from carrying out the purposes for which the bond is issued; and make covenants about real property taxes and other charges in a designated blighted area as it considers appropriate. An agreement made under this section may be for the benefit and be enforceable on behalf of any bondholder.

A bond: may be in bearer form; may be registrable as to principal alone or as to both principal and interest; and is a “security” under § 8-102 of the Commercial Law Article, whether or not the bond is one of a class or series or is divisible into a class or series of instruments. A bond shall be signed manually or in facsimile by the chief executive of the political subdivision. An officer’s signature or facsimile signature on a bond remains valid even if the officer leaves office before the bond is delivered. The seal of the political subdivision shall be affixed to the bond and attested by the clerk or other similar administrative officer of the political subdivision. A bond shall mature not later than 40 years after the date of issue. Bonds may be issued as serial bonds or term bonds with provisions for a mandatory sinking fund or other annual principal redemption beginning not later than 3 years after the date of issue. A bond shall be sold in the manner, at public or private (negotiated) sale, and on the terms at, above, or below par, as the political subdivision considers best. A contract to acquire property may provide that payments shall be made in bonds. A bond is not subject to §§ 19–205 and 19–206 of the Local Government Article.

A bond, the transfer of a bond, the interest payable on a bond, the income derived from a bond, and the profit realized on sale or exchange of a bond are exempt from State and local taxes. A political subdivision may issue bonds under this subtitle without regard to their federal tax status.

For purposes of an action involving the validity or enforceability of a bond or security for a bond, a finding by a political subdivision is conclusive as to: the public purpose of an action taken under this subtitle; and any other matter relating to the issuance of a bond.

This subtitle does not authorize a political subdivision to acquire property by eminent domain.

This subtitle may be cited as the Redevelopment Bond Act.