# Environment (GEN)

## Title 9. Water, Ice, and Sanitary Facilities

### Subtitle 9. Water and Sewer Authorities

#### Section 9-901

(a) In this subtitle the following words have the meanings indicated.

(b) "Authority" means:

  (1) A body politic and corporate that is created under this subtitle; or

  (2) If that body is abolished, the unit that:

    (i) Succeeds to the principal functions of that body; or

    (ii) Is given by law the powers under this subtitle of the former body.

(c) "Board" means the governing body of an authority.

(d)

  (1) "Bond" means any note, bond, or other evidence of indebtedness or obligation that an authority may issue under Sec. 9-932 of this subtitle.

  (2) "Bond" includes refunding bonds and joint cost and refunding bonds.

(e)

  (1) "Cost" means:

    (i) The purchase price of a project; or

    (ii) Any expense necessary or incident to financing, acquiring, improving, or constructing a project, or to placing a project in operation.

  (2) "Cost" includes:

    (i) Any obligation or expense that an authority incurs, before the authority issues a bond under this subtitle, to acquire, improve, or construct a project, including an obligation or expense for:

      (1) An engineering study;

      (2) An estimate of cost;

      (3) An estimate of revenue; or

      (4) Any other technical or professional service; and

    (ii) The cost of a project, including:

      (1) Acquiring all of the stock of a corporation that owns the project;

      (2) Discharging the obligations of the corporation to vest title to all or part of the project in the authority;

      (3) Acquiring any real property, right, easement, franchise, permit, machinery, or equipment;

      (4) Any improvement;

      (5) Any finance charge;

      (6) Any interest charge before, during, or for 1 year after completion of construction of the project;

      (7) Any engineering or legal service, plan, specification, survey, estimate of cost, estimate of revenue, or other item necessary to determine the feasibility or practicability of acquiring, improving, or constructing the project; and

      (8) Any administrative expense.

(f) "Federal agency" means:

  (1) The United States government; or

  (2) Any agency of the United States government.

(g) "Governing body" means the unit of a political subdivision that is authorized by law to enact laws for the political subdivision.

(h) "Improvement" means the construction, repair, replacement, or betterment of, or additions to, a project:

  (1) To place or maintain the project in proper condition for safe, efficient, and economic operation; or

  (2) To meet requirements for service in areas that:

    (i) May be served by the authority; and

    (ii) Are not currently being served.

(i) "Law" includes any enactment, order, resolution, or ordinance of a political subdivision.

(j) "Political subdivision" means any county, municipal corporation under Article XI-E of the Maryland Constitution, sanitary district, or other political subdivision of this State.

(k) "Project" means all or part of any water system or sewerage system, or any combination of all or parts of water systems or sewerage systems, that is owned, constructed, or operated by an authority under this subtitle.

(l) "Sewage" means water-carried waste that is created in and carried away or to be carried away from any private or public building.

(m)

  (1) "Sewerage system" means:

    (i) Any plant, system, facility, or property that can:

      (1) Carry sewage away;

      (2) Collect sewage;

      (3) Dispose of sewage;

      (4) Neutralize sewage; or

      (5) Prepare sewage for discharge; and

    (ii) Any integral part of the plant, system, facility, or property.

  (2) "Sewerage system" includes the following parts of a sewerage system:

    (i) An appurtenance.

    (ii) A conduit.

    (iii) A disposal field.

    (iv) A drainage ditch.

    (v) Any equipment.

    (vi) A force main.

    (vii) An intercepting sewer.

    (viii) A lagoon.

    (ix) A lateral sewer.

    (x) An outfall sewer.

    (xi) A pipeline.

    (xii) A pumping station.

    (xiii) A sewage treatment plant.

    (xiv) A sewer pipe.

    (xv) A surface water intercepting ditch.

    (xvi) A trunk sewer.

  (3) "Sewerage system" includes any related property, property right, or franchise.

(n)

  (1) "Water system" means:

    (i) Any plant, system, facility, or property that can supply or distribute water; and

    (ii) Any integral part of the plant, system, facility, or property.

  (2) "Water system" includes the following parts of a water system:

    (i) An appurtenance.

    (ii) A dam.

    (iii) Any equipment.

    (iv) A filtration plant.

    (v) An intake.

    (vi) A lateral.

    (vii) A pumping station.

    (viii) A purification plant.

    (ix) A reservoir.

    (x) A standpipe.

    (xi) A valve.

    (xii) A water distribution system.

    (xiii) A water hydrant.

    (xiv) A water main.

    (xv) A water meter.

    (xvi) A water source.

    (xvii) A water supply system.

    (xviii) A well.

  (3) "Water system" includes any related property, property right, or franchise.

#### Section 9-902

(a) To accomplish the purposes of this subtitle, the provisions of this subtitle:

  (1) Are full and complete authority without regard to the provisions of any other law; and

  (2) Shall be liberally construed.

(b) However, this subtitle does not restrict the control that the Department of the Environment and the Department of Natural Resources may exercise over an authority.

(c) This subtitle:

  (1) Provides an additional and alternative method to accomplish the purposes of this subtitle;

  (2) Is supplemental and additional to powers contained in other laws; and

  (3) Does not derogate any existing power.

#### Section 9-903

This subtitle does not apply to:

(1) Montgomery County; or

(2) Prince George's County.

#### Section 9-905

An authority:

(1) Is an instrumentality that exercises public and essential government functions;

(2) Provides for the public health and welfare; and

(3) May acquire, hold, construct, extend, repair, improve, operate, or lease as a lessor or lessee 1 or more projects that are wholly or partly within 1 or more of the member political subdivisions.

#### Section 9-906

By law, the governing bodies of 1 or more political subdivisions may create an authority as provided in this subtitle.

#### Section 9-907

(a) Each incorporating political subdivision shall include in the law that creates an authority the articles of incorporation for the authority.

(b) The articles of incorporation shall include:

  (1) An appropriate name for the authority, which includes the word "authority";

  (2) A statement that the authority is formed under this subtitle;

  (3) The name of each incorporating political subdivision;

  (4) The name, address, and term of office for each member of the 1st board of directors of the authority;

  (5) If the governing body of any incorporating political subdivision determines that its members are the board of directors of the authority, a statement to this effect; and

  (6) The purpose of the authority.

(c) The officers of each incorporating political subdivision shall sign, acknowledge, and file the articles of incorporation for record with the State Department of Assessments and Taxation.

(d)

  (1) The State Department of Assessments and Taxation shall:

    (i) Receive the articles of incorporation;

    (ii) Mark the date and time of receipt to the articles; and

    (iii) Issue a certificate of approval for any articles that comply with this subtitle.

  (2) When the State Department of Assessments and Taxation issues a certificate of approval, the authority:

    (i) Begins to exist as a public body politic and corporate;

    (ii) Is conclusively considered to be lawfully and properly created;

    (iii) May exercise its powers under this subtitle; and

    (iv) Has the right to exist as a corporation for a term of 50 years.

#### Section 9-908

(a)

  (1) In this section, "articles of amendment" means a document that proposes or adopts an amendment to the articles of incorporation of an authority.

  (2) "Articles of amendment" includes a document that restates the articles of incorporation.

(b) An authority may amend its articles of incorporation in accordance with this section:

  (1) To adopt a new name; or

  (2) To change, enlarge, or diminish its powers, duties, and purposes.

(c)

  (1) To amend its articles of incorporation, the board of directors of an authority shall adopt a resolution that proposes the amendments.

  (2) If the articles of incorporation are to be replaced, the resolution shall contain the language of the new articles of incorporation.

  (3) If any provision in the articles of incorporation is to be added, deleted, or amended, the resolution shall contain the language of the entire amended provision.

  (4) The resolution shall direct submission of the amendment to the governing body of each member political subdivision.

  (5) After the board of directors submits the amendment to the governing body of each member political subdivision, the governing body shall adopt or reject the amendment by law.

(d) Articles of amendment under this section shall include:

  (1) The name and location of the principal office of the authority;

  (2) The complete amendment; and

  (3) A statement that the amendment:

    (i) Was proposed by the board of directors of the authority; and

    (ii) Was adopted by the governing body of each member political subdivision.

(e) If the governing body of each member political subdivision adopts the amendment:

  (1) Two authorized officers of the authority shall:

    (i) Sign and acknowledge articles of amendment under the seal of the authority; and

    (ii) Verify under oath the matters and facts set forth in the articles of amendment; and

  (2) The authority shall file the articles of amendment for record with the State Department of Assessments and Taxation.

(f)

  (1) The State Department of Assessments and Taxation shall:

    (i) Receive the articles of amendment;

    (ii) Mark the date and time of receipt to the articles of amendment; and

    (iii) Issue a certificate of approval for any articles of amendment that comply with this subtitle.

  (2) When the State Department of Assessments and Taxation issues a certificate of approval, the articles of amendment:

    (i) Are in full force and effect; and

    (ii) Are conclusively deemed to be lawfully and properly adopted.

#### Section 9-909

(a) When an authority is organized and elects its initial officers, the secretary of the authority shall file for record with the State Department of Assessments and Taxation:

  (1) The name and address of each officer of the authority; and

  (2) The location of the principal office of the authority.

(b) Within 10 days after any change in location of the principal office of the authority, the secretary of the authority shall file notice of the new location with the State Department of Assessments and Taxation.

#### Section 9-910

(a)

  (1) Except as provided in this section, if an authority has 2 or more members, any of the member political subdivisions may withdraw from the authority.

  (2) Any political subdivision may join the authority.

(b) After an authority that has 2 or more member political subdivisions incurs an obligation, the member political subdivisions may not withdraw from the authority.

(c)

  (1) By law, the governing body of a political subdivision shall show its intention to withdraw from or join an existing authority.

  (2) If, by resolution, the board of directors of an authority consents to the withdrawal of a political subdivision from the authority, the following persons shall sign and acknowledge articles of withdrawal:

    (i) The authorized officers of the withdrawing political subdivision; and

    (ii) The authorized officers of the authority.

  (3) If, by resolution, the board of directors of an authority consents to the addition of a political subdivision as a member of the authority, the following persons shall sign and acknowledge articles of joinder:

    (i) The authorized officers of the joining political subdivision;

    (ii) The authorized officers of the authority; and

    (iii) After they are authorized by law of the governing bodies of their respective political subdivisions, the authorized officers of the political subdivisions that are then members of the authority.

(d) Articles of joinder under this section shall include, for the joining political subdivision, all of the information required under Sec. 9-907(b) of this subtitle, including the name, address, and term of office of the 1st member of the board of directors of the authority from the joining political subdivision.

(e) The officers of the authority shall file articles of withdrawal or articles of joinder under this section for record with the State Department of Assessments and Taxation.

(f)

  (1) The State Department of Assessments and Taxation shall:

    (i) Receive the articles of withdrawal or articles of joinder;

    (ii) Mark the date and time of receipt to the articles; and

    (iii) Issue a certificate of approval for any articles that comply with this subtitle.

  (2) When the State Department of Assessments and Taxation issues a certificate of approval, the articles of withdrawal or articles of joinder:

    (i) Are in full force and effect; and

    (ii) Are conclusively considered to be lawfully and properly adopted.

#### Section 9-911

(a) An authority may terminate its existence after the authority:

  (1) Pays or provides for payment of the principal of and interest on each bond that the authority issued;

  (2) Settles any other claim against the authority; and

  (3) Has the approval by law of the governing body of each member political subdivision.

(b) To terminate its existence, an authority shall:

  (1) Comply with the provisions of this section; and

  (2) File articles of dissolution for record with the State Department of Assessments and Taxation.

(c) The articles of dissolution shall include:

  (1) A statement that requests the termination of the existence of the authority;

  (2) A statement that the authority has:

    (i) Paid or provided for payment of the principal of and interest on each bond that the authority issued; and

    (ii) Settled each other claim against the authority; and

  (3) The signatures of the authorized officers of the authority.

(d)

  (1) If the articles of dissolution comply with this subtitle, the State Department of Assessments and Taxation shall:

    (i) Note the termination of existence of the authority on the records of the Department; and

    (ii) Issue a certificate of approval to the board of directors of the authority.

  (2) On approval of the articles of dissolution by the State Department of Assessments and Taxation, the existence of the authority ends.

#### Section 9-914

(a) This section applies to any authority that is incorporated or continued by only 1 political subdivision.

(b) At the election of the governing body of the political subdivision, the board of directors of the authority consists of:

  (1) The members of the governing body of the political subdivision; or

  (2) Five citizens of the political subdivision who are appointed by the governing body of the political subdivision.

(c)

  (1) The term of a director who is also a member of the governing body of the political subdivision is the same as the term of office for the member on the governing body of the political subdivision.

  (2) The term of a citizen director:

    (i) Begins on the date of appointment; and

    (ii) Is 5 years, except that the respective terms of the directors serving on the initial board are 1 year, 2 years, 3 years, 4 years, and 5 years from the January 1 after the incorporation of the authority.

  (3) The terms of citizen directors are staggered as required by the terms provided for the 1st directors in paragraph (2)(ii) of this subsection.

  (4) At the end of a term:

    (i) A citizen director continues to serve until a successor is appointed and qualifies; or

    (ii) A director who is a member of the governing body of the political subdivision ceases to be a director.

  (5) A citizen director who is appointed after a term has begun serves only for the rest of the term and until a successor is appointed and qualifies.

  (6) At a meeting held at least 1 month before the end of a term of a citizen director, the governing body of the political subdivision that is represented by the citizen director shall designate a successor, who shall be deemed to be appointed at the end of the term.

(d) If a political subdivision joins the authority, the governing body of the joining political subdivision immediately shall appoint 1 director for a term that is the same as the terms of the other directors.

#### Section 9-915

(a) This section applies to an authority that has two or more member political subdivisions.

(b) Except as provided in subsection (g) of this section, the number of directors of the authority is the greater of:

  (1) Five; or

  (2) The number of member political subdivisions.

(c) Except as provided in subsection (g) of this section, the articles of incorporation for the authority shall provide for:

  (1) The appointment of directors;

  (2) The staggering of their terms; and

  (3) Where the number of member political subdivisions is less than five, the apportioning of the directors between or among the member political subdivisions.

(d)

  (1) The term of a director may not be more than 5 years.

  (2) If a vacancy occurs during the term of a director, the governing body of the political subdivision that is represented by the director shall fill the vacancy.

(e) If a political subdivision joins the authority, the governing body of the joining political subdivision immediately shall appoint one director for a term that is the same as the terms of the other directors.

(f) If a political subdivision withdraws from the authority, any director who was appointed to represent the withdrawing political subdivision immediately ceases to be a director.

(g) In Harford County:

  (1) The number of directors of the authority is the greater of:

    (i) Seven; or

    (ii) The number of member political subdivisions.

  (2) The articles of incorporation for the authority shall provide for the apportioning of the directors between or among the member subdivisions if the number of political subdivisions is less than seven.

#### Section 9-916

(a)

  (1) A majority of the full authorized membership of the board of directors of an authority is a quorum to do business.

  (2) Unless the bylaws require a larger number, the board may take any action by a majority vote of the directors present at a validly called meeting.

(b) The board shall determine the times and places of its meetings.

(c)

  (1) A citizen director is entitled to the compensation set by:

    (i) The governing body of the single political subdivision that incorporated or continues the authority; or

    (ii) The governing bodies of the member political subdivisions.

  (2) However, the compensation for a citizen director may not be increased or decreased during the term of the director.

  (3) A director who is also a member of the governing body of a political subdivision may not receive compensation for service as a director.

(d) The board may:

  (1) Set the number of officers, agents, and employees that the board considers proper;

  (2) Set the powers, duties, and compensation for these employees; and

  (3) Elect or appoint any director as an officer, agent, or employee.

#### Section 9-917

In addition to the powers set forth elsewhere in this subtitle, an authority may:

(1) Do anything necessary or convenient to carry out the purposes of this subtitle;

(2) Adopt bylaws to regulate the affairs of the authority and conduct the business of the authority;

(3) Have, use, alter, or abandon a corporate seal;

(4) Sue, be sued, complain, and defend in all courts;

(5) Maintain an office at any place that the authority determines; and

(6) Manage the properties and business of the authority.

#### Section 9-918

(a) An authority may not use any of its powers under this subtitle to construct, improve, maintain, or operate a project that in any way duplicates or competes with an existing public or private utility that serves substantially the same purposes.

(b)

  (1) By law, the governing bodies of the member political subdivisions may limit the projects that the authority may begin. If a limitation is made, the authority may not begin a project that is not authorized.

  (2) If the governing bodies of the member political subdivisions do not limit the projects that the authority may begin, the authority has all of the powers granted by this subtitle.

(c)

  (1) The governing body of a political subdivision that has created an authority under this subtitle may not create any other authority to serve any part of the same area.

  (2) Unless the governing body of every other member political subdivision consents by law, a member political subdivision may not create or join in the creation of any other authority.

#### Section 9-919

For the purposes of operation and financing, an authority may combine any water system and sewerage system into a single project.

#### Section 9-920

(a) The board of directors of an authority may:

  (1) Acquire, lease as a lessee, hold, and use any interest in any property or franchise that is necessary or desirable to carry out the purposes of the authority;

  (2) Sell, lease as a lessor, transfer, or otherwise dispose of any interest in any property or franchise of the authority; and

  (3) Acquire any right in land or water right in connection with land by gift, purchase, or eminent domain.

(b) To condemn an interest in property that is owned by a political subdivision, an authority must obtain the consent of the governing body of the political subdivision.

#### Section 9-921

Subject to reasonable local police regulation that is established by the governing body of any political subdivision that has jurisdiction in the area, an authority may enter on, use, occupy, or dig up any street, road, highway, or public or private land that is necessary to acquire, construct, or maintain a project.

#### Section 9-922

(a) When the owner of any property connects the property with a project operated by an authority, the authority may charge a reasonable tapping fee.

(b) The tapping fee is in addition to any charges that the authority makes for rental or use of its projects.

#### Section 9-923

An authority may accept:

(1) From a federal agency, any grant to aid in the construction, acquisition, or operation of a project; and

(2) From any source, aid or a contribution of money, property, labor, or any other thing of value for any stated purpose.

#### Section 9-924

If a political subdivision that is not a member of an authority annexes real property that is served by the authority, the authority may continue to do business on and exercise jurisdiction over its properties and facilities over its annexed real property as long as:

(1) Any bond or indebtedness of the authority in effect at the time of the annexation remains outstanding or unpaid; or

(2) Any contract or other obligation of the authority in effect at the time of the annexation continues in force.

#### Section 9-925

(a) Each authority shall:

  (1) Keep a complete record of its receipts and expenditures;

  (2) Employ a certified public accountant to audit its books and accounts;

  (3) Keep a detailed audit and financial statement of its accounts available and open for public inspection at its principal office during business hours; and

  (4) File annually a certified copy of the detailed audit and financial statement with the governing body of each member political subdivision.

(b)

  (1) In person or by authorized agents, the governing body of any member political subdivision may examine and audit the books and records of the authority.

  (2) An examination or audit under this subsection is without cost to the authority.

#### Section 9-928

An authority may issue its bonds to pay any part of the cost of a project of the authority.

#### Section 9-929

(a) The issuance of a bond under this subtitle is not subject to conditions or limitations in any other law of this State.

(b) Sections 8-201, 8-206, and 8-208 of the State Finance and Procurement Article do not apply to any refunding bond issued under this subtitle.

#### Section 9-930

(a) A bond issued under this subtitle:

  (1) Is not a pledge of the faith and credit of this State or any of its political subdivisions; and

  (2) Shall say on its face that neither the faith and credit of this State nor the faith and credit of any of its political subdivisions is pledged to the payment of the principal of or interest on the bond.

(b) The issuance of a bond under this subtitle does not obligate this State or any of its political subdivisions directly, indirectly, or contingently:

  (1) To levy any tax; or

  (2) To make any appropriation for payment of the bonds, except from funds pledged in accordance with this subtitle.

#### Section 9-931

A bond issued under this subtitle is a security:

(1) In which any person who conducts a banking business, investment business, or insurance business, any fiduciary, any other person, or any public officer or agency of this State or of any political subdivision may invest funds, including capital that:

  (i) Is in the control of the person, officer, or agency; or

  (ii) Belongs to the person, officer, or agency; and

(2) That may be deposited with and received by any officer or agency of this State, or any political subdivision, or any officer of a political subdivision, for any purpose for which the deposit of bonds or other obligations of this State is authorized by law.

#### Section 9-932

By resolution of its board of directors, an authority may:

(1) Issue bonds of the authority;

(2) Secure the payment of the bonds by pledge or deed of trust of all or any part of the revenue of the authority;

(3) Either before or after the issuance of bonds, make any agreement that the authority considers advisable with:

  (i) A purchaser or holder of the bonds; or

  (ii) Any other person in connection with the bonds; and

(4) Provide generally for:

  (i) The security for the bonds; and

  (ii) The rights of the holders of the bonds.

#### Section 9-933

(a) An authority may issue bonds under this subtitle without:

  (1) Obtaining the approval or consent of any unit of the State government; or

  (2) Doing anything not specifically required by this subtitle.

(b) An authority may sell bonds under this subtitle at public or private sale and at a price the authority determines is in the best interests of:

  (1) The authority; and

  (2) The political subdivision that is to be served.

#### Section 9-934

(a) This section applies only in Allegany County, Dorchester County, and the town of Middletown in Frederick County.

(b)

  (1) An authority may not issue bonds unless the question of issuance of the bonds is submitted to the registered voters who reside within the geographical area served by the authority.

  (2) The governing body and the board of election supervisors in each political subdivision shall do whatever is necessary and proper to submit the question to a referendum of the qualified voters of the political subdivision.

(c) A qualified voter at a referendum under this section is an individual who:

  (1) Lives within the geographic area served by the authority; and

  (2) Is qualified and registered to vote in State and county elections in the area.

(d)

  (1) The board of directors of the authority shall set the date for the referendum.

  (2) Except as otherwise provided in this subtitle, the Election Law Article governs the conduct of the referendum.

(e) The appropriate board of election supervisors shall print the words "For the bond issue" and "Against the bond issue" on each ballot at a referendum under this section.

(f)

  (1) If a majority of the qualified voters who vote on the question vote "For the bond issue", the authority may issue the bonds.

  (2) If a majority of the qualified voters who vote on the question vote "Against the bond issue", the authority may not issue the bonds.

(g) A referendum under this section does not prevent an authority from submitting the same or a similar question at another referendum that is held at a later time.

#### Section 9-935

(a)

  (1) Before the preparation of definitive bonds, an authority may issue interim receipts or temporary bonds with or without coupons.

  (2) Issuance of interim receipts or temporary bonds is subject to the restrictions that govern the issuance of definitive bonds.

(b) Interim receipts or temporary bonds are exchangeable for definitive bonds when the definitive bonds are executed and available for delivery.

(c) An authority may provide for the replacement of any bond that is lost, destroyed, or mutilated.

#### Section 9-936

(a) If an authority considers it necessary, the authority may include any limitation or restriction on the issuance of additional bonds:

  (1) In the resolution that provides for the issuance of bonds of the authority; or

  (2) In any trust agreement that secures the bonds.

(b) If a resolution or trust agreement places any limitation or restriction on the issuance of additional bonds, the authority shall honor the limitation or restriction when the authority issues additional bonds.

#### Section 9-937

By resolution of its board of directors, an authority may provide for the issuance of:

(1) Refunding bonds to refund any bonds of the authority that were issued under this subtitle and are outstanding; or

(2) A single issue of bonds to:

  (i) Pay the cost of a project or of the improvement, extension, or reconstruction of or additions to a project; and

  (ii) Refund bonds that:

    (1) Were issued under this subtitle and are outstanding; and

    (2) Have matured, are subject to redemption, or can be retired.

#### Section 9-938

(a) To secure any bond issued under this subtitle, an authority may enter into a trust agreement with a corporate trustee, which may be:

  (1) A trust company; or

  (2) A bank that has the powers of a trust company.

(b) In the resolution or trust agreement that authorizes the authority to issue bonds, the authority:

  (1) May pledge or assign the revenues to be received from the operation of any project for which the bonds are issued;

  (2) In the case of bonds that finance a sewerage system, and to the extent allowed under Sec. 9-946 of this subtitle, may pledge or assign as security for the bonds the revenues to be received from the water system of the authority;

  (3) May not convey or mortgage any part of a project;

  (4) May include reasonable, proper, and lawful provisions for protecting and enforcing the rights and remedies of bondholders, including:

    (i) Covenants stating the duties of the authority to acquire, construct, improve, maintain, operate, repair, and insure any project for which the bonds are issued;

    (ii) Provisions for the custody, protection, and use of the funds of the authority; and

    (iii) Provisions for the employment of consulting engineers in connection with the construction or maintenance of any project for which the bonds are issued;

  (5) May state the rights and remedies of bondholders and, in the case of a trust agreement, of trustees;

  (6) May restrict the individual right of action of a bondholder in any way that is customary in a trust agreement or trust indenture that secures bonds or debentures of a corporation; and

  (7) May include any other provision that the authority considers to be reasonable and proper for the security of bondholders.

(c) Except as otherwise provided in this subtitle, an authority may provide for:

  (1) Payment of the proceeds of the sale of its bonds and payment of any revenue of the authority to any officer, board, or depositary that the authority designates as custodian of the proceeds and revenues; and

  (2) Disbursement of the proceeds and revenues with any safeguards and restrictions that the authority determines.

(d) An authority may treat any expense that is incurred in carrying out the provisions of a resolution or trust agreement under this section as a part of the cost of operation of the project.

#### Section 9-939

(a) A resolution or trust agreement that provides for the issuance of or secures bonds under this subtitle may:

  (1) Include any of the provisions in subsections (c) through (f) of this section; and

  (2) Require the authority to adopt resolutions or take any other lawful action that is necessary to enforce those provisions.

(b) If a resolution or trust agreement includes any of the provisions of subsections (c) through (f) of this section, the authority may adopt resolutions and take any other lawful action that is necessary to enforce those provisions.

(c) If the owner, tenant, or occupant of a parcel of land is obligated to pay rates, fees, or charges for the use of or services furnished by any project of an authority, the authority may require the owner, tenant, or occupant to deposit with the authority, before the use is made or the services are furnished, a reasonable amount:

  (1) To insure payment of the rates, fees, or charges; and

  (2) To be applied to payment of any delinquent rates, fees, or charges.

(d) If the owner, tenant, or occupant of a parcel of land does not pay any rate, fee, or charge for the use of or services furnished by any project of an authority within 30 days after the rate, fee, or charge becomes due and payable, the authority, at the end of the 30-day period, may:

  (1) Disconnect the parcel of land from the water system or sewerage system of the authority or otherwise suspend services; and

  (2) Recover the amount of the rate, fee, or charge that is delinquent, plus interest:

    (i) In a civil action; or

    (ii) By foreclosure of the lien for the rate, fee, or charge.

(e) If any rate, fee, or charge for the use of or services furnished to a lot or parcel of land by a sewerage system that is owned, constructed, or operated by an authority under this subtitle is not paid within 30 days after the rate, fee, or charge becomes due and payable, the owner, tenant, or occupant of the parcel of land shall stop disposing of sewage or industrial wastes from the parcel of land directly or indirectly into the sewerage system until the rate, fee, or charge, plus interest, is paid.

(f)

  (1) If the owner, tenant, or occupant of a parcel of land does not stop disposing of sewage or industrial wastes as required by subsection (e) of this section, any political subdivision or person who supplies or sells water for use on the parcel of land shall stop supplying or selling the water within 5 days after receiving notice of the delinquency from the authority.

  (2) If a political subdivision or person does not stop supplying or selling water for use on a parcel of land as required by paragraph (1) of this subsection, the authority may shut off the supply of water to the parcel of land.

#### Section 9-940

Subject to any restriction in the resolution or trust agreement that provides for the issuance of or secures the bonds of an authority, any holder of the bonds, any holder of any coupons from the bonds, or any trustee under a trust agreement that secures the bonds may:

(1) Enforce in any civil action any right granted by the resolution or trust agreement or by any law of this State; and

(2) Compel the performance of any duty imposed on the authority or an officer of the authority by this subtitle or by the resolution or trust agreement, including setting, charging, and collecting rates, fees, and charges for the use of or services furnished by any project.

#### Section 9-941

(a) An authority shall pay the principal of and interest on its bonds only from the funds from which this subtitle authorizes payment.

(b) For any bond that an authority issues, the authority:

  (1) Shall place the date of issue on the bond;

  (2) Shall set the maturity date for the bond, which shall be any time up to 40 years from the date of issue; and

  (3) May provide for the redemption of the bond before maturity:

    (i) At the option of the authority; and

    (ii) At a price and on terms and conditions that the authority fixes before it issues the bond.

(c) A bond or certificate that otherwise conforms to this section is valid and sufficient for all purposes whether or not the officer whose signature or a facsimile of whose signature is on the bond or certificate is still an officer when the bond or certificate is delivered.

(d) An authority:

  (1) Shall determine the form of its bonds; and

  (2) May issue its bonds in coupon or registered form or both.

(e) An authority shall determine:

  (1) The manner of execution of its bonds;

  (2) The denominations of its bonds; and

  (3) The places for payment of the principal of and interest on its bonds, which may be any bank or trust company.

(f) A bond issued under this subtitle is fully negotiable as provided in Title 8 of the Commercial Law Article.

(g) An authority may provide for:

  (1) The registration of any coupon bond as to:

    (i) Principal only; or

    (ii) Both principal and interest; and

  (2) The reconversion into a coupon bond of any bond that is registered as to both principal and interest.

#### Section 9-942

(a) An authority shall:

  (1) Use the proceeds of any bond that it issues only to pay for the project for which the bond was issued; and

  (2) Disburse the proceeds of any bond in the manner and under any restrictions that the authority provides in the resolution or trust agreement that authorizes the issuance of or secures the bond.

(b)

  (1) If, for any reason, the proceeds of an issue of bonds are less than the cost of the project for which the authority issued the bonds, the authority may issue additional bonds, in a manner similar to that followed in issuing the original bonds, to provide the amount of the deficit.

  (2) Unless otherwise provided in the resolution or trust agreement that authorizes the issuance of or secures the original bonds, additional bonds issued under this subsection:

    (i) Are of the same issue as the original bonds; and

    (ii) Are entitled to payment from the same fund, without any preference or priority being given to the original bonds.

(c) If the proceeds of an issue of bonds exceed the cost of the project for which the authority issued the bonds, the authority shall deposit the surplus to the credit of the reserve account or sinking fund for the bonds.

#### Section 9-945

(a) An authority may enter into any contract that the authority determines is necessary or incidental to the exercise of its powers or the performance of its duties under this subtitle, including a contract with:

  (1) Any federal agency, this State, any agency of this State, any political subdivision, or any person:

    (i) Providing for or relating to furnishing the services and facilities of a project of the authority; or

    (ii) In connection with the services and facilities of a water system or sewerage system that is owned or controlled by the federal agency, this State, the agency of this State, the political subdivision, or the person;

  (2) Any person, political subdivision, or public authority of this or any adjoining state for the construction and operation of a project that is located partly in this State and partly in the adjoining state; and

  (3) Any federal agency or political subdivision relating to:

    (i) The use by the authority of the services or facilities of any water system or sewerage system that is not owned or operated by the authority; or

    (ii) The use by the federal agency, political subdivision, or residents of the political subdivision of:

      (1) Any project acquired or constructed by the authority under this subtitle; or

      (2) The services or facilities of the project.

(b) A contract under this section:

  (1) Is subject to any provision, limitation, or condition that is contained in:

    (i) A resolution of the authority that authorizes the authority to issue bonds; or

    (ii) A trust agreement that secures bonds of the authority;

  (2) May provide for the collection of fees, rates, or charges for the services and facilities furnished to a political subdivision or any of its residents, and may provide that the collection be done:

    (i) By a political subdivision or any agent of a political subdivision; or

    (ii) By any agent of an authority; and

  (3) May provide for the enforcement of any delinquent charge.

(c) Any law that is enacted by a political subdivision under a contract under this section:

  (1) Is not repealable if any bond to which the contract relates is outstanding and unpaid; and

  (2) Is for the benefit of the bondholders.

(d) A contract under this section and any law of a political subdivision that is enacted under the contract shall provide that the total of any rates, fees, and charges is sufficient to pay all of the obligations that are assumed by the other party to the contract.

#### Section 9-946

(a) An authority may set, charge, and collect rates, fees, and charges in connection with each of its projects to provide funds that, with any other available funds, are sufficient at all times:

  (1) To pay:

    (i) The expenses of the authority;

    (ii) The cost of construction, extension, repair, improvement, maintenance, and operation of each facility and property of the authority;

    (iii) The cost of maintenance, repair, and operation of each project for which the authority issued bonds under this subtitle, including the creation of reserves for the maintenance, repair, operation, replacement, depreciation, and necessary extensions of the project; and

    (iv) The principal of and interest on all bonds of the authority whenever due and payable, including the creation of reserves to provide a margin of safety; and

  (2) To fulfill the terms of any agreement that is made with:

    (i) A purchaser or holder of any bond of the authority;

    (ii) A political subdivision that is incorporated or is a member of the authority; or

    (iii) A political subdivision that is or will be served by the authority.

(b) An authority may:

  (1) Set rates, fees, and charges for the services and facilities of its water system that are sufficient to pay:

    (i) The cost of maintenance, repair, and operation of its sewerage system; and

    (ii) The principal of and interest on bonds that the authority issues for its sewerage system; and

  (2) Subject to prior pledges of surplus revenue, pledge any surplus revenue of its water system for the purposes stated in item (1) of this subsection.

(c)

  (1) An authority may base rates, fees, and charges for the services and facilities of its sewerage system on:

    (i) The quantity of water used;

    (ii) The amount of the water bill;

    (iii) The number and size of sewer connections;

    (iv) The number and kind of plumbing fixtures in use in the premises that are connected with the sewerage system;

    (v) The number or average number of individuals who reside in, work in, or are otherwise connected with the premises that are connected with the sewerage system;

    (vi) The type or character of the premises that are connected with the sewerage system;

    (vii) Any other factor that affects the use of the facilities furnished; or

    (viii) Any combination of these factors.

  (2) If any premises obtain all or part of their water from a source other than a public water system, an authority may charge the premises for sewerage services:

    (i) By gauging or metering; or

    (ii) In any other manner that the authority approves.

(d) An authority may base rates, fees, and charges for any of its other services and facilities on any factor that the authority determines to be reasonable and proper.

(e) The rates, fees, and charges of an authority shall be:

  (1) Reasonable;

  (2) Uniform by class; and

  (3) Determined solely by the authority.

(f)

  (1) Any person who questions whether the rates, fees, or charges of an authority are reasonable or uniform may sue the authority:

    (i) In the circuit court for the county in which the project is located; or

    (ii) If the project is located in 2 or more counties, in the circuit court for the county in which the principal office of the project is located.

  (2) The circuit court has exclusive jurisdiction to determine the reasonableness and uniformity of the rates, fees, and other charges of an authority.

#### Section 9-947

If the sewage or other waste that a manufacturing, commercial, or industrial plant or other building or premises discharges into a sewerage system is, because of its character, an unreasonable burden on the sewerage system, the authority that owns, operates, or maintains the sewerage system may:

(1) Impose an additional charge on the owner, tenant, or occupant of the plant, building, or premises; or

(2) Require the owner, tenant, or occupant of the plant, building, or premises, before it discharges its sewage or other waste, to treat the sewage or waste in a manner that the authority determines.

#### Section 9-948

(a) An authority may use data that a political subdivision furnishes under this section to calculate the rates, fees, and charges of the authority for sewer services to a consumer of water.

(b) By the 15th day of the month after the month in which the political subdivision issues water bills, and at the request of the authority, each member political subdivision shall submit to the authority:

  (1) A list of the water meter readings on which the water bills were based; or

  (2) A statement of the amounts of the water bills.

#### Section 9-949

(a) An authority has a lien on real estate:

  (1) For:

    (i) The amount of any fee, rent, or charge, including a tapping fee, imposed on an owner, tenant, or occupant of the real estate for the use and services of a project of the authority; and

    (ii) Any accrued interest on the fee, rent, or charge; and

  (2) From the time when the fee, rent, or charge is due and payable.

(b) A lien under this section is superior to any interest of an owner, tenant, or occupant of the affected real estate.

(c) A lien under this section binds or affects a subsequent bona fide purchaser of the real estate who purchases for valuable consideration and without actual notice of the lien only after the amount of the lien is entered in a lien register that is:

  (1) Furnished for this purpose by and at the expense of the authority; and

  (2) Kept among the land records of the county where the real estate is located.

(d) The clerk of the circuit court in the county where the real estate is located:

  (1) Shall keep and make available for public inspection any lien register that an authority provides to the clerk under this section; and

  (2) Shall record and index in the lien register any entry that the authority certifies.

(e)

  (1) To discharge a lien under this section, a person shall pay to the authority:

    (i) The total amount of the lien; and

    (ii) Any interest that has accrued on the lien to the date of payment.

  (2) When a person discharges a lien under this subsection, the authority shall deliver to the person a certificate of payment.

  (3) When a person presents a certificate of payment to the clerk of the circuit court in the county where the real estate is located, the clerk, without any fee, shall record the discharge of the lien in the lien register.

#### Section 9-950

(a) In this section, "abutting lot" means a parcel of land:

  (1) That abuts on a street or other public way that contains a sanitary sewer that is part of, is served by, or may be served by the sewerage system of an authority; and

  (2) On which a building has been constructed for residential, commercial, or industrial use.

(b) Except as provided in subsection (c) of this section, when an authority acquires or constructs a sewerage system under this subtitle, the authority, by rule, regulation, or resolution, may require each owner of an abutting lot to:

  (1) Connect with the sewerage system of the authority each building that is constructed for residential, commercial, or industrial use on the abutting lot; and

  (2) Stop using any other method for the disposal of sewage or other polluting matter.

(c) The authority may not require the owner of an abutting lot to connect any building on the abutting lot if the abutting lot is served by a facility for the disposal of sewage or other polluting matter that was constructed and is operated in accordance with standards set or approved by the Secretary.

(d) Whenever this section requires a person to connect a building to the sewerage system of an authority, the person shall make the connection in accordance with the rules and regulations of the authority.

(e) The rules and regulations of an authority may set a reasonable charge for making a connection under this section.

#### Section 9-951

(a) A political subdivision that owns or operates a water system may contract with an authority as provided in subsection (b) of this section to shut off the supply of water to any premises that are connected with any sewerage system of the authority.

(b) If the owner, tenant, or occupant of any premises described in subsection (a) of this section fails, within the time stated in the contract, to pay any rate, fee, or charge for the use or services of the sewerage system of an authority, the authority may shut off the supply of water to the premises.

(c)

  (1) An authority may disconnect service to a property on a finding or notification from the governing body of the political subdivision in which the property is located that the property is:

    (i) A vacant lot; or

    (ii) Cited as vacant and unfit for habitation on a housing or building violation notice.

  (2) Subject to paragraph (3) of this subsection, on request by the owner of the property, the authority shall restore service to a property where service was disconnected in accordance with paragraph (1) of this subsection.

  (3)

    (i) An authority may require proof that all housing and building violation notices on a property have been resolved prior to restoring service under paragraph (2) of this subsection.

    (ii) Prior to restoring service under paragraph (2) of this subsection, an authority may require the owner of the property to pay:

      (1) All unpaid rates, fees, charges, or assessments for service at the property; and

      (2) Any reconnection fees for service at the property.

#### Section 9-952

(a)

  (1) Notwithstanding any other law, the governing body of a political subdivision may transfer jurisdiction over, lease, lend, give, sell, or convey to an authority, on the request of the authority, with or without consideration, any of the following:

    (i) Any facility;

    (ii) Any right or interest in a facility;

    (iii) Any property that appertains to a facility;

    (iv) Any real property; or

    (v) Any right or interest in real property.

  (2) The authority shall use property transferred or conveyed under this subsection in connection with the construction, extension, repair, improvement, maintenance, or operation of 1 or more projects of the authority.

  (3) The transfer or conveyance shall be on terms and conditions that the governing body of the political subdivision determines to be in the best interests of the political subdivision.

(b)

  (1) If the land is necessary or desirable in connection with the construction, extension, repair, improvement, maintenance, or operation of any project, this State consents to the use by an authority of any land that is:

    (i) Owned or controlled by this State; and

    (ii)

      (1) Below the high-water mark of any waters of this State; or

      (2) In the right-of-way of any State highway.

  (2) The State Highway Administration must approve the use of land that is in any State highway right-of-way.

#### Section 9-953

After an authority pays or provides for the payment of the principal of and interest on each bond that is secured by a pledge of the revenue of a project, and subject to any agreement that concerns the operation or disposition of the project, the authority may convey the project to its member political subdivisions.

#### Section 9-956

In addition to the powers set forth elsewhere in this subtitle, a political subdivision may:

(1) Contract with an authority:

  (i) For the collection, treatment, or disposal of sewage; and

  (ii) With respect to any matter or thing concerning which the authority may contract with the political subdivision under this subtitle; and

(2) Lend money to an authority to pay the organization and preliminary expenses of the authority, on condition that the loan is repaid out of the proceeds of the 1st bond issue of the authority.

#### Section 9-957

(a) An authority is not required to pay any tax or assessment on:

  (1) Any project; or

  (2) The income from any project.

(b) This State, any political subdivision, and any other public agency in this State may not tax:

  (1) Any bond that is issued under this subtitle;

  (2) The transfer of the bond; or

  (3) Any income from the bond, including any profit on the sale of the bond.

#### Section 9-958

(a) Any money that an authority receives under this subtitle as proceeds from the sale of bonds or as revenues is a trust fund that the authority shall hold and apply only as provided in this subtitle.

(b) The resolution or trust agreement that provides for the issuance of or secures bonds of an authority shall provide that any officer to whom, or any bank, trust company, or other fiscal agent to which, the authority pays any money received under this subtitle shall:

  (1) Act as trustee of the money; and

  (2) Hold and apply the money:

    (i) For the purposes of this subtitle; and

    (ii) Subject to any provision of the resolution or trust agreement.

---

Md. Code Ann., Envir. (as displayed at mgaleg.maryland.gov, October 16, 2026)