In this subtitle, the following words have the meanings indicated. “Development” means: Planning; Acquisition by gift, purchase, lease, or eminent domain; Construction; Reconstruction; Improvement; or Extension. “Governing body” includes any body or board that is in charge of the finances of a municipality. “Municipality” means any municipal corporation of this State. “Resolution” means any resolution or ordinance adopted by any governing body. “Revenue” includes, unless the context requires otherwise: The revenue currently derived from any existing sewerage facility that is being developed; and The revenue to be derived from any subsequent developments to the sewerage facility. “Sewerage facility” means all or any part of any plant, property, works, system, or facility that is used or useful in connection with the collection, treatment, or disposal of sewage, waste, garbage, or stormwater.

The powers granted by this subtitle are: Supplemental to the powers granted by any general, special, or local law; and Not restricted by any debt or tax rate limitation in any general law, local law, or municipal charter. Any municipality may engage in the development of any sewerage facility under this subtitle regardless of any general, special, or local law that: Provides for the development of similar facilities; Requires approval by the voters of any municipality for the development of the sewerage facility; or Contains any other requirements, restrictions, limitations, or provisions regarding the development of the sewerage facility. Any municipality may issue bonds under this subtitle to finance the development of any sewerage facility regardless of: Any general, special, or local law that provides for the issuance of bonds for similar purposes; Any general, special, or local law that requires approval by the voters of the municipality for the issuance of bonds; An unfavorable vote by the voters of the municipality if the Department or a court of competent jurisdiction has ordered the development of the sanitary facility; or Any other requirements, restrictions, limitations, or other provisions contained in any general, special, or local law. If any provision of this subtitle is inconsistent with any general, special, or local law, the provision of this subtitle controls.

It is the policy of this State that each municipality that engages in the development of any sewerage facility under this subtitle shall manage the sewerage facility as economically and efficiently as possible: To promote the health and welfare of the inhabitants of the municipality and of this State by preventing, reducing, or eliminating the pollution of the waters of this State; and To provide the services of the sewerage facility to consumers at the lowest possible cost.

In addition to the powers granted to the municipality by any general, special, or local law, and independent of any control by the Public Service Commission of Maryland, a municipality may: Subject to subsection (c)(1) of this section, engage in the development of a sewerage facility: Wholly inside the corporate boundary line; Wholly outside the corporate boundary line; or Partly inside and partly outside the corporate boundary line; Acquire by gift, purchase, lease, or eminent domain, in connection with the development of a sewerage facility: Land; Land rights; or Water rights; Accept from any federal agency loans or grants for the development of sewerage facilities and make agreements with that agency about the loans or grants; Operate and maintain any sewerage facility for the use and benefit of: The municipality; The residents of the municipality; or Residences or places of business that are outside the corporate boundary line of the municipality, but are: Inside this State; and Inside a radius of 10 miles from the corporate boundary line of the municipality; Set rates and collect fees, benefit assessments, and other charges for the services, facilities, and commodities provided by each sewerage facility; Designate an agency of the municipality: To provide the sewerage facility services, facilities, and commodities; and To collect the fees, benefit assessments, and other charges; and Make and perform any contract with any industrial establishment: For the municipality to provide, operate, and maintain sewerage facilities to reduce or eliminate water pollution caused by any discharge of industrial waste by the industrial establishment; and For the industrial establishment periodically to pay to the municipality amounts determined by the governing body of the municipality to be at least sufficient to compensate the municipality for the cost of providing, operating, and maintaining the sewerage facility or the part of the sewerage facility that serves the industrial establishment. Through their governing bodies, any 2 or more municipalities may: Make and perform contracts and agreements with each other about sewerage facility: Development; Financing; and Operation; and Agree or contract with each other: To provide for a board, commission, or other body to supervise, operate, and generally manage the sewerage facility; To specify the powers and duties of the board, commission, or body; and To set the compensation of the members of the board, commission, or body. A municipality may not construct a sewerage facility wholly or partly inside the corporate boundary line of another municipality except with the consent of the governing body of the other municipality. A municipality may not operate a sewerage facility: For gain or profit; or Primarily as a source of revenue to the municipality.

By resolution, the governing body of any municipality may authorize the issuance of bonds under this subtitle to finance, wholly or partly, the cost of the development of any sewerage facility. In the determination of the cost, the governing body may include: Actual and estimated costs of issuing the bonds; Engineering expenses; Inspection expenses; Fiscal expenses; Legal expenses; and Interest estimated to accrue, during construction and for 6 months after construction, on money borrowed or expected to be borrowed under this subtitle. The resolution: May be adopted at the meeting at which the resolution is introduced; May be adopted by a majority of all members of the governing body who are in office when the resolution is introduced; and Is effective immediately on adoption.

The authorizing resolution may provide that the bonds shall contain a recital that they are issued under this subtitle. The authorizing resolution shall state that the interest on bonds issued under this subtitle shall be payable twice a year. The authorizing resolution or any subsequent resolution may provide that the bonds issued under this subtitle: Be in 1 or more series; Bear a certain date or dates; Be executed in a certain manner; Contain certain terms, covenants, and conditions; Be in coupon or registered form, or both; May mature at a certain time or times, but not later than 40 years from their respective dates of issuance; Be payable in a certain medium of payment; Be payable at a certain place or places; Carry certain registration privileges; and Be subject to certain terms of redemption.

The provisions of this subtitle and any resolution that authorizes the issuance of bonds under this subtitle are a contract between the municipality and the bondholder. The authorizing resolution may contain covenants as to: The disposition of the proceeds of sale of the bonds; The disposition of the revenue of the sewerage facility for which the bonds are issued, including: The pledging to the punctual payment of the bonds issued under this subtitle and of the interest on those bonds as they become due an amount sufficient to pay the bonds and interest on an equal or priority basis from all or part of the revenue of all or part of the existing or planned sewerage facility; and The creation and maintenance of reasonable reserves, from all or part of the revenue, for the payment of the bonds issued under this subtitle and of the interest on those bonds; The issuance of additional bonds payable from the revenue of the sewerage facility; The transfer from the general funds of the municipality to the account of the sewerage facility of an amount equal to the cost of providing the municipality or any of its departments, boards, or agencies with the services, facilities, and commodities of the sewerage facility; The insurance to be carried on the sewerage facility and the disposition of insurance money; The operation and maintenance of the sewerage facility; The books of account of the sewerage facility and the inspection and audit of the books; and The terms and conditions on which the bondholders or any trustee for the bondholders may petition the circuit court for the appointment of a receiver for the sewerage facility. On petition of the bondholders or a trustee for the bondholders, the circuit court may appoint for a sewerage facility a receiver who may: Enter and take possession of the sewerage facility; Operate and maintain the sewerage facility; Set sewerage facility rates, fees, or charges; and Collect, receive, and apply all revenue of the sewerage facility. By mandamus or other appropriate suit, action, or proceeding in any court of competent jurisdiction, any bondholder may enforce: The duties under this subtitle of the municipality and its governing body and officers; and The resolutions adopted under this subtitle.

Except for bonds issued under this subtitle and sold to the United States or to any agency, instrumentality, or corporation of the federal government, any bond issued under this subtitle shall be sold: At public sale; After advertisement; and At a price that is not less than par. Any bond issued under this subtitle may be sold, at a price that is not less than par, to the United States or to any agency, instrumentality, or corporation of the federal government at private sale. The governing body of the municipality that issues the bonds may: Issue, to any purchaser of a bond, an interim receipt or certificate pending preparation of the definitive bond; and Determine the form and provisions of the interim receipt or certificate. Any bond and interim receipt or certificate issued under this subtitle is: Fully negotiable within the meaning of and for all the purposes of Title 8 of the Commercial Law Article; and Forever exempt from State, county, or municipal taxation.

Any bond issued under this subtitle that bears the signatures of the officers in office on the date the bond is signed is a valid and binding obligation notwithstanding that: At the time of delivery of or payment for the bond, any or all of the signers are no longer officers of the municipality; or Any proceeding that relates to the development of the sewerage facility for which the bond is issued is invalid or irregular. A signature may be by facsimile as provided in § 2-303 of the State Finance and Procurement Article. A recital in the bond that the bond is issued under this subtitle is conclusive evidence of: The validity of the bond; and The regularity of the issuance of the bond.

Except as provided in subsection (b) of this section, the general credit and taxing powers of any municipality are pledged to the payment of any bonds issued by the municipality under this subtitle. A holder of a bond issued under this subtitle may not compel the exercise of the taxing power of the municipality to pay the bond or the interest on the bond, if: A covenant in the authorizing resolution so limits the liability of the municipality; and The bond recites in substance that: The bond and the interest on the bond are payable from the revenue pledged to the payment of the bond; and The bond does not constitute a debt of the municipality within the meaning of any constitutional or statutory limitation. In accordance with the provisions of this subtitle and the authorizing resolution, all bonds of the same issue: Subject to the prior and superior rights of outstanding bonds, claims, or obligations, may have a prior and paramount lien on the revenue of the sewerage facility, over and ahead of: All bonds of any subsequent issue payable from the revenue; Any claims of any nature subsequently arising against the revenue; and Any obligations of any nature subsequently incurred against the revenue; May be equally and ratably secured by a lien on the revenue, without priority because of: Number; Date of bonds; Date of sale; Date of execution; or Date of delivery; and In the manner and to the extent set forth in the authorizing resolution, including a provision for the subordination of fewer than all the bonds, may be subordinated and junior in standing, with respect to the payment of principal and interest and the security for the payment, to any other bonds that the authorizing resolution designates.

To assure that each sewerage facility always remains self-supporting, the governing body of a municipality that issues bonds under this subtitle shall set, collect, and whenever necessary revise reasonable rates, fees, benefit assessments, or charges for the services, facilities, and commodities of the sewerage facility. The rates, fees, benefit assessments, or charges shall be set so as to produce revenue and reserves that are at least sufficient: To pay, when due, all bonds and the interest on the bonds, for the payment of which the revenue is pledged, charged, or otherwise encumbered; and To provide for all expenses of operation and maintenance of the sewerage facility.

Any municipality that issues bonds under this subtitle for the development of any sewerage facility may appropriate or expend the revenue from the sewerage facility for: Paying, when due, all bonds and the interest on the bonds, for the payment of which the revenue is pledged, charged, or otherwise encumbered; Providing for all expenses of operation and maintenance of the sewerage facility; Paying and discharging the principal and interest on any notes, bonds, or other obligations: Not issued under this subtitle, but for payment of which the revenue of the sewerage facility is pledged, charged, or encumbered; or Issued to finance the development of the sewerage facility, but which do not constitute a lien, charge, or encumbrance on the revenue of the sewerage facility; and Providing a reserve for improvements to the sewerage facility. Any municipality may transfer the revenue of any sewerage facility to the general funds of the municipality only after the municipality has made adequate provision for the purposes set out in subsection (a) of this section.

Any municipality may issue refunding bonds to refund, pay, or discharge the principal and interest on all or any part of the outstanding bonds: Issued by the municipality to finance the development of all or part of the sewerage facility; and In arrears or about to become due. The provisions of this subtitle that concern authorization and issuance of bonds apply to authorization and issuance of refunding bonds.

This subtitle may be cited as “The Sewerage Facilities Bond Act”.