<section article="gsf" article_name="State Finance and Procurement" number="8-101" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>In this subtitle the following words have the meanings indicated.</text> </level> <level label="b"> <text>“Board” means the Board of Public Works.</text> </level> <level label="c"> <text>“Capital appreciation bond” means a State bond that accrues interest payable only on the date of maturity.</text> </level> <level label="d"> <text>“Enabling act” means a law that authorizes the creation of a general obligation debt of the State and the sale of State bonds to evidence that debt.</text> </level> <level label="e"> <text>“State bond” means a general obligation bond of the State.</text> </level> <level label="f"> <text>“State debt” means the general obligation debt of the State.</text> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-104" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>In this Part II of this subtitle the following words have the meanings indicated.</text> </level> <level label="b"> <text>“Committee” means the Capital Debt Affordability Committee.</text> </level> <level label="c"> <level label="1"> <text>“Tax supported debt” means:</text> <level label="i"> <text>State debt; and</text> </level> <level label="ii"> <text>other forms of debt, including State agency capital leases supported in whole or part by State tax revenues and debt of the Department of Transportation, the Maryland Stadium Authority, and other units of State government which, in the opinion of the Committee, are supported directly or indirectly by State tax revenues.</text> </level> </level> <level label="2"> <text>“Tax supported debt” does not include capital leases used to finance energy performance contracts entered into under § 12–301 of this article, if, as determined by the Committee, energy savings that are guaranteed by the contractor:</text> <level label="i"> <text>equal or exceed the capital lease payments on an annual basis; and</text> </level> <level label="ii"> <text>are monitored in accordance with reporting requirements adopted by the Committee.</text> </level> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-105" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>The General Assembly finds that:</text> <level label="1"> <text>for many years, State bonds have had the highest credit rating and, therefore, have been readily marketable at favorable interest rates;</text> </level> <level label="2"> <text>to continue to finance essential capital projects for the benefit of its citizens, the State must keep this rating; and</text> </level> <level label="3"> <text>to keep this rating, authorizations of State debt must be based on the ability of the State to meet its total debt service requirements in light of other calls on its fiscal resources.</text> </level> </level> <level label="b"> <text>The purpose of this Part II of this subtitle is to provide for a State debt management program through which:</text> <level label="1"> <text>a State debt affordability analysis can be made annually;</text> </level> <level label="2"> <text>on the basis of the analysis, proposed capital projects that require new State debt can be evaluated; and</text> </level> <level label="3"> <text>the General Assembly can receive guidance in properly setting priorities among capital projects and appropriations.</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-106" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <text>This Part II of this subtitle shall be construed liberally to carry out its purpose.</text> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-107" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>This Part II of this subtitle applies only to tax supported debt.</text> </level> <level label="b"> <text>This Part II of this subtitle does not affect:</text> <level label="1"> <text>the authority of the Governor to submit:</text> <level label="i"> <text>amendments to the consolidated loan budget or to any accompanying bill; or</text> </level> <level label="ii"> <text>instead of amendments, separate bills that authorize State debt; or</text> </level> </level> <level label="2"> <text>the authority of the General Assembly to:</text> <level label="i"> <text>continue its independent analysis of State debt affordability; or</text> </level> <level label="ii"> <text>consider bills that authorize State debt in addition to the bills that accompany the consolidated loan budget.</text> </level> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-108" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <text>There is a Capital Debt Affordability Committee in the Executive Department.</text> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-109" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <text>The Committee consists of the following 7 members:</text> <level label="1"> <text>1 individual appointed by the Governor;</text> </level> <level label="2"> <text>as ex officio members:</text> <level label="i"> <text>the Comptroller;</text> </level> <level label="ii"> <text>the Treasurer;</text> </level> <level label="iii"> <text>the Secretary of Budget and Management; and</text> </level> <level label="iv"> <text>the Secretary of Transportation; and</text> </level> </level> <level label="3"> <text>as nonvoting members:</text> <level label="i"> <text>the chair of the Capital Budget Subcommittee of the Senate Budget and Taxation Committee; and</text> </level> <level label="ii"> <text>the chair of the Capital Budget Subcommittee of the House Appropriations Committee.</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-110" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <text>The Treasurer is the Chairman of the Committee.</text> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-111" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>The Chairman shall call meetings of the Committee as needed to perform its duties.</text> </level> <level label="b"> <text>The Committee shall invite the Executive Director of the Department of Legislative Services to attend the meetings of the Committee.</text> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-112" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>The Committee shall review on a continuing basis the size and condition of the State tax supported debt as well as other debt of State units, including the University System of Maryland, Morgan State University, St. Mary’s College of Maryland, and the Baltimore City Community College.</text> </level> <level label="b"> <text>On or before October 20 of each year, the Committee shall submit to the Governor and the General Assembly the Committee’s estimate of the total amount of new State debt that prudently may be authorized for the next fiscal year.</text> </level> <level label="c"> <text>In making the estimate, the Committee shall consider:</text> <level label="1"> <text>the amount of State bonds that, during the next fiscal year:</text> <level label="i"> <text>will be outstanding; and</text> </level> <level label="ii"> <text>will be authorized but unissued;</text> </level> </level> <level label="2"> <text>the capital program prepared by the Department of Budget and Management;</text> </level> <level label="3"> <text>capital improvement and school construction needs during the next 5 fiscal years, as projected by the Interagency Commission on School Construction;</text> </level> <level label="4"> <text>projections of debt service requirements during the next 10 fiscal years;</text> </level> <level label="5"> <text>the criteria that recognized bond rating agencies use to judge the quality of issues of State bonds;</text> </level> <level label="6"> <text>any other factor that is relevant to:</text> <level label="i"> <text>the ability of the State to meet its projected debt service requirements for the next 5 fiscal years; or</text> </level> <level label="ii"> <text>the marketability of State bonds;</text> </level> </level> <level label="7"> <text>the effect of authorizations of new State debt on each of the factors set out in this subsection; and</text> </level> <level label="8"> <text>the amount of issuances, debt outstanding, and debt service requirement of other classes of State tax supported debt as well as other debt of State units, including the University System of Maryland, Morgan State University, St. Mary’s College of Maryland, and the Baltimore City Community College.</text> </level> </level> <level label="d"> <text>The estimate of the Committee:</text> <level label="1"> <text>is advisory; and</text> </level> <level label="2"> <text>does not bind the General Assembly, the Board, or the Governor.</text> </level> </level> <level label="e"> <level label="1"> <text>In this subsection, “System” and “academic facilities” have the meanings stated in § 19–101 of the Education Article.</text> </level> <level label="2"> <text>In addition to its other duties under this section, the Committee shall review on a continuing basis the size and condition of any debt of the University System of Maryland, Morgan State University, St. Mary’s College of Maryland, and the Baltimore City Community College.</text> </level> <level label="3"> <text>In preparing an estimate with respect to the authorization of any new State debt, the Committee shall take into account as part of the affordability analysis any debt for academic facilities to be issued by a System.</text> </level> <level label="4"> <text>At the same time that the Committee makes its report as required under subsection (b) of this section, the Committee shall submit to the Governor and the General Assembly the Committee’s estimate of the amount of new bonds for academic facilities that prudently may be authorized in the aggregate for the next fiscal year by the University System of Maryland, Morgan State University, St. Mary’s College of Maryland, and the Baltimore City Community College.</text> </level> <level label="5"> <text>The Committee may request any needed information from a System and shall consider the information in making its estimates, including any information submitted by a System at its own initiative.</text> </level> <level label="6"> <text>This estimate:</text> <level label="i"> <text>is advisory; and</text> </level> <level label="ii"> <text>does not bind the General Assembly, the Board, or the Governor.</text> </level> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-113" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <text>On or before November 1 of each year, after considering the current estimate of the Committee, the Governor shall determine:</text> <level label="1"> <text>the total authorizations of new State debt that the Governor considers advisable for the next fiscal year; and</text> </level> <level label="2"> <text>the preliminary allocation of new State debt for:</text> <level label="i"> <text>general construction projects;</text> </level> <level label="ii"> <text>school construction projects; and</text> </level> <level label="iii"> <text>other special projects.</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-114" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>The Department of Budget and Management annually shall prepare for the Governor a draft of the part of the consolidated loan budget that relates to general construction projects.</text> </level> <level label="b"> <text>On or before the 20th day of each regular session of the General Assembly, the Governor shall submit to the General Assembly:</text> <level label="1"> <text>the consolidated loan budget; and</text> </level> <level label="2"> <text>if necessary, 1 or more bills that authorize new State debt to fund the consolidated loan budget.</text> </level> </level> <level label="c"> <text>The consolidated loan budget shall:</text> <level label="1"> <text>contain a complete plan of the proposed projects that any accompanying bills would fund; and</text> </level> <level label="2"> <text>show, by dollar amount and percent, the allocation for:</text> <level label="i"> <text>general construction projects;</text> </level> <level label="ii"> <text>school construction projects; and</text> </level> <level label="iii"> <text>other special projects.</text> </level> </level> </level> <level label="d"> <level label="1"> <text>Each bill that the Governor submits under this section shall comply with the requirements of Article III, §§ 34 and 52 of the Maryland Constitution.</text> </level> <level label="2"> <text>An authorization of State debt to fund any part of the consolidated loan budget shall be deemed to be a single work, object, or purpose under Article III, § 52 of the Maryland Constitution.</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-117" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>The General Assembly may authorize the Board to:</text> <level label="1"> <text>borrow money for any public purpose; and</text> </level> <level label="2"> <text>issue State bonds to evidence the debt.</text> </level> </level> <level label="b"> <text>An enabling act shall specify the total principal amount of the debt authorized by the enabling act.</text> </level> <level label="c"> <text>An enabling act may take substantially the following form:</text> <text>“A BILL ENTITLED </text> <text>AN ACT concerning </text> <text>Creation of a State Debt – (Name of Project) </text> <text>FOR the purpose of authorizing the creation of a State debt not to exceed $....., (for an enabling act that requires an equal matching fund)/ in the amount of $....., (for an enabling act that requires no matching fund or a lesser matching fund) the proceeds to be used as a grant to ..... (name of grantee) for certain development or improvement purposes; providing for disbursement of the loan proceeds, subject to the requirement that the grantee provide and expend a matching fund (if the enabling act requires a matching fund); and providing generally for the issuance and sale of bonds evidencing the loan. </text> <text>SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, That: </text> </level> <level label="1"> <text>The Board of Public Works may borrow money and incur indebtedness on behalf of the State of Maryland through a State loan to be known as the ... (name of project) Loan of ... (year) equal to the lesser of (i) $... or (ii) the amount of the matching fund provided in accordance with Section 1(5) below. (For an enabling act that requires an equal matching fund)/ in the total principal amount of $..... (for an enabling act that requires no matching fund or a lesser matching fund). This loan shall be evidenced by the issuance, sale, and delivery of State general obligation bonds authorized by a resolution of the Board of Public Works and issued, sold, and delivered in accordance with §§ 8–117 through 8–124 and 8–131.2 of the State Finance and Procurement Article.</text> </level> <level label="2"> <text>The bonds to evidence this loan or installments of this loan may be sold as a single issue or may be consolidated and sold as part of a single issue of bonds under § 8–122 of the State Finance and Procurement Article.</text> </level> <level label="3"> <text>The cash proceeds of the sale of the bonds shall be paid to the Treasurer and first shall be applied to the payment of the expenses of issuing, selling, and delivering the bonds, unless funds for this purpose are otherwise provided, and then shall be credited on the books of the Comptroller and expended, on approval by the Board of Public Works, for the following public purposes, including any applicable architects’ and engineers’ fees: as a grant to ..... (name of grantee) (referred to hereafter in this Act as “the grantee”) (for an enabling act that requires a matching fund) for (here state the purpose or purposes to which the proceeds of the bonds are to be applied).</text> </level> <level label="4"> <text>An annual State tax is imposed on all assessable property in the State in rate and amount sufficient to pay the principal of and interest on the bonds, as and when due and until paid in full. The principal shall be discharged within 15 years after the date of issue of the bonds.</text> <text>SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect June 1, .... (year)”.</text> </level> <level label="d"> <level label="1"> <text>If an enabling act requires an equal matching fund, the fifth paragraph is as follows:</text> <text>“(5) Prior to the payment of any funds under the provisions of this Act for the purposes set forth in Section 1(3) above, the grantee shall provide and expend a matching fund. No part of the grantee’s matching fund may be provided, either directly or indirectly, from funds of the State, whether appropriated or unappropriated. No part of the fund may consist of real property, in kind contributions, or funds expended prior to the effective date of this Act. In case of any dispute as to the amount of the matching fund or what money or assets may qualify as matching funds, the Board of Public Works shall determine the matter and the Board’s decision is final. The grantee has until June 1, ... (2 years from the effective date of the Act), to present evidence satisfactory to the Board of Public Works that a matching fund will be provided. If satisfactory evidence is presented, the Board shall certify this fact and the amount of the matching fund to the State Treasurer, and the proceeds of the loan equal to the amount of the matching fund shall be expended for the purposes provided in this Act. Any amount of the loan in excess of the amount of the matching fund certified by the Board of Public Works shall be canceled and be of no further effect.”.</text> </level> <level label="2"> <text>If an enabling act requires a lesser matching fund, the fifth paragraph is as follows:</text> <text>“(5) Prior to the payment of any funds under the provisions of this Act for the purposes set forth in Section 1(3) above, the grantee shall provide and expend a matching fund of $ ..., (amount of the matching fund to be provided by the grantee). No part of the grantee’s matching fund may be provided, either directly or indirectly, from funds of the State, whether appropriated or unappropriated. No part of the fund may consist of real property, in kind contributions, or funds expended prior to the effective date of this Act. In case of any dispute as to the amount of the matching fund or what money or assets may qualify as matching funds, the Board of Public Works shall determine the matter and the Board’s decision is final. The grantee has until June 1, ... (2 years from the effective date of the Act), to present evidence satisfactory to the Board of Public Works that a matching fund will be provided. If satisfactory evidence is presented, the Board shall certify this fact to the State Treasurer, and the proceeds of the loan shall be expended for the purposes provided in this Act.”.</text> </level> </level> <level label="e"> <text>An enabling act may also contain the following paragraph:</text> <text>“The proceeds of the loan must be expended or encumbered by the Board of Public Works for the purposes provided in this Act no later than June 1, .... (7 years from the effective date of the Act). If any funds authorized by this Act remain unexpended or unencumbered after June 1, .... (7 years from the effective date of the Act), the amount of the unencumbered or unexpended authorization shall be canceled and be of no further effect. If bonds have been issued for the loan, the amount of unexpended or unencumbered bond proceeds shall be disposed of as provided in § 8–129 of the State Finance and Procurement Article.”.</text> </level> <level label="f"> <text>An enabling act under this section may contain:</text> <level label="1"> <text>an additional provision for all or part of the principal of and interest on the State bonds issued under the enabling act to be paid primarily from sources of funds other than a State tax on assessable property; and</text> </level> <level label="2"> <text>any other additional provision that is appropriate to the purpose of the enabling act and the nature of State bonds.</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-118" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>The Board shall exercise the powers and perform the duties that the General Assembly delegates to the Board in connection with:</text> <level label="1"> <text>the creation of State debt;</text> </level> <level label="2"> <text>the determination of interest on and other terms and conditions of the State debt;</text> </level> <level label="3"> <text>the preparation of State bonds that evidence the State debt;</text> </level> <level label="4"> <text>notice of a sale of State bonds; and</text> </level> <level label="5"> <text>the sale.</text> </level> </level> <level label="b"> <text>The Board shall exercise these powers and perform these duties in accordance with:</text> <level label="1"> <text>Article III, § 34 of the Maryland Constitution;</text> </level> <level label="2"> <text>§§ 8-117 through 8-124 of this subtitle; and</text> </level> <level label="3"> <text>the specific enabling act.</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-119" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>By 1 or more resolutions, the Board may provide for the terms, conditions, security, issuance, sale, delivery, replacement, or payment of the State bonds authorized by an enabling act.</text> </level> <level label="b"> <text>Unless the enabling act provides otherwise, the Board shall use the procedures set forth in §§ 8-117 through 8-124 of this subtitle for the issuance and sale of the State bonds.</text> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-120" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <text>By resolution, the Board may provide that the State bonds authorized by an enabling act:</text> <level label="1"> <text>be in 1 or more series;</text> </level> <level label="2"> <text>bear a certain date of issue;</text> </level> <level label="3"> <text>be executed in a certain manner;</text> </level> <level label="4"> <text>be sold in a certain manner at public or private, negotiated sale;</text> </level> <level label="5"> <text>be in certain denominations, not necessarily in equal paramounts;</text> </level> <level label="6"> <text>mature in certain amounts at certain times, not necessarily in consecutive annual installments, but not later than 15 years after their respective dates of issue;</text> </level> <level label="7"> <text>bear interest at certain rates or at rates to be determined in the manner stated in the resolution; and</text> </level> <level label="8"> <text>be paid, as to principal and interest, at certain places.</text> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-121" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>By resolution, the Board may specify the form in which State bonds are to be issued, including:</text> <level label="1"> <text>a coupon form;</text> </level> <level label="2"> <text>a capital appreciation form;</text> </level> <level label="3"> <text>a variable interest rate form;</text> </level> <level label="4"> <text>a form that qualifies for tax credits, interest subsidies, or other federal tax benefits;</text> </level> <level label="5"> <text>a form that qualifies as a registered form under §§ 54A, 103, and 149 of the Internal Revenue Code or a regulation proposed or adopted under those sections; and</text> </level> <level label="6"> <text>any other registered form.</text> </level> </level> <level label="b"> <level label="1"> <text>Whenever the Board provides for the sale of State bonds in registered form, the Board may establish procedures for the registration and transfer of the State bonds.</text> </level> <level label="2"> <text>The Board may exercise any other power that relates to issuance of State bonds in registered form and that is not conferred on the Treasurer.</text> </level> </level> <level label="c"> <text>Whenever the Board provides for the sale of State bonds in registered form, the Treasurer may:</text> <level label="1"> <text>appoint any agent, including an authenticating trustee, corporate trustee, paying agent, registrar, or transfer agent, or use the agent appointed under § 8-135 of this subtitle;</text> </level> <level label="2"> <text>specify the rights, duties, and compensation of the agent; and</text> </level> <level label="3"> <text>in connection with the establishment and maintenance of a central depository system for the transfer or pledge of the State bonds, make agreements with:</text> <level label="i"> <text>custodian banks and their nominees; or</text> </level> <level label="ii"> <text>financial intermediaries and their nominees.</text> </level> </level> </level> <level label="d"> <text>Whenever the Board provides for the sale of State bonds in variable interest rate form, the Treasurer may:</text> <level label="1"> <text>appoint any agent or other contracting party, including an underwriter, remarketing agent, dealer, tender agent, insurer, liquidity provider, or similar entity; and</text> </level> <level label="2"> <text>specify the rights, duties, and compensation of and make agreements with the agent or other contracting party.</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-122" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>By resolution, the Board may provide for all or part of the State bonds authorized by 2 or more enabling acts to be consolidated and sold as a single issue. However, the Board may not include in a consolidated issue any State bonds authorized by an enabling act that specifically exempts the State bonds from this section.</text> </level> <level label="b"> <text>A consolidated issue under this section shall be known as the “State and local facilities loan” of the series and year in which the Board authorizes the sale of the issue.</text> </level> <level label="c"> <text>Notwithstanding any provision of an enabling act, each State bond that is sold as part of a consolidated issue under this section shall be identified by the series and year in which the Board authorizes the sale of the issue.</text> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-122.1" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>Upon sale of State bonds authorized by an enabling act, the principal amount of the loan authorized by that enabling act shall be reduced by:</text> <level label="1"> <text>the stated principal amount of the State bonds sold, if the bonds are sold at 95% or more of par; or</text> </level> <level label="2"> <text>the cash proceeds, excluding any accrued interest, received for the State bonds, if the bonds are sold at less than 95% of par.</text> </level> </level> <level label="b"> <text>Whenever State bonds are sold as a consolidated issue at less than 95% of par, the Board, by resolution, shall determine the manner in which the cash proceeds received for the bonds, excluding accrued interest, shall be allocated among the loans included in that issue.</text> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-123" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>Except as otherwise provided in this subtitle, the Board shall offer State bonds at a public sale.</text> </level> <level label="b"> <level label="1"> <text>At least 10 days before the date of a public sale, the Board shall give public notice of the sale.</text> </level> <level label="2"> <text>The notice shall state the date, time, and place of the public sale.</text> </level> <level label="3"> <text>The notice may be given by The Municipal Market Monitor (TM3) or a similar service or such other method as the Treasurer deems appropriate.</text> </level> </level> <level label="c"> <level label="1"> <text>Except as provided in paragraph (2) of this subsection, at a public sale, the Board shall sell State bonds for cash to the responsible bidder who:</text> <level label="i"> <text>offers the lowest net interest cost to the State; or</text> </level> <level label="ii"> <text>meets other terms or conditions of sale or issuance that the Board has set.</text> </level> </level> <level label="2"> <text>Whenever the Board determines that no bid is satisfactory and that it is in the best interests of the State to reject all bids, the Board may reject the bids.</text> </level> </level> <level label="d"> <level label="1"> <text>By resolution, the Board may postpone the time for receipt of proposals for the bonds without republishing the form of advertisement for the bonds.</text> </level> <level label="2"> <level label="i"> <text>The Treasurer shall provide notice of the new date and time of sale not less than 24 hours prior to the time proposals are to be submitted, which date may not be more than 30 days after the originally scheduled date of sale.</text> </level> <level label="ii"> <text>The notice may be given by The Municipal Market Monitor (TM3) or a similar service or such other method as the Treasurer deems appropriate.</text> </level> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-123.1" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>In accordance with the authority to issue capital appreciation bonds under § 8-121 of this subtitle, the Board, in a resolution setting forth the terms and conditions of any State bond issue, may designate that all or a portion of the State bonds be issued as capital appreciation bonds.</text> </level> <level label="b"> <text>The Board may sell the capital appreciation bonds at a negotiated sale if the Board determines that a negotiated sale will provide greater access to investors who are residents of the State of Maryland.</text> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-123.2" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>In this section, “small denomination bonds” means bonds in denominations of $5,000 or less.</text> </level> <level label="b"> <text>In accordance with § 8-121 of this subtitle, the Board, in a resolution setting forth the terms and conditions of any State bond issue, may designate that all or a portion of the State bonds be issued as small denomination bonds.</text> </level> <level label="c"> <text>Small denomination bonds may be issued in any form permitted under § 8-121 of this subtitle.</text> </level> <level label="d"> <text>The Board may sell small denomination bonds at a negotiated sale if the Board determines that a negotiated sale will:</text> <level label="1"> <text>result in either a more efficient or economical sale of the bonds; or</text> </level> <level label="2"> <text>provide greater access to investors who are residents of the State of Maryland.</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-123.3" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>In considering the structure of a State of Maryland capital appreciation general obligation bond issue, the Board of Public Works shall be sensitive to the need to help Maryland citizens save for the costs of college.</text> </level> <level label="b"> <text>The Maryland College Savings Bond Advisory Board, created under § 20-101 of the Education Article, shall make recommendations to the Board of Public Works regarding the need for Maryland capital appreciation general obligation bonds for college savings.</text> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-123.4" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>Except as provided in subsection (c) of this section, in accordance with the authority to issue variable interest rate bonds under § 8-121 of this subtitle, the Board, in a resolution setting forth the terms and conditions of a State bond issue, may designate that all or a portion of the State bonds be issued as variable interest rate bonds.</text> </level> <level label="b"> <text>The Board may sell variable interest rate bonds at a private, negotiated sale on the terms and conditions that the Board determines to be most advantageous to the State.</text> </level> <level label="c"> <text>At the time of issuance, the aggregate par value of the State’s general obligation variable interest rate bonds shall comprise no more than 15% of the outstanding general obligation indebtedness of the State.</text> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-124" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>Subject to the provisions of subsection (b) of this section, it is the policy of the State that the preferred method of sale of general obligation bonds of the State by the Board is by public, competitive sale.</text> </level> <level label="b"> <text>The Board may offer the sale of general obligation bonds of the State at a private, negotiated sale, but only if the Board determines that:</text> <level label="1"> <text>extraordinary credit market conditions exist that warrant the use of the method authorized by this subsection instead of the method stated in subsection (a) of this section; and</text> </level> <level label="2"> <text>the terms and conditions for the sale of general obligation bonds of the State, including price, interest rates, and payment dates, achieved through a private, negotiated sale are more advantageous to the State than the terms and conditions for the sale that can be achieved by a public, competitive sale.</text> </level> </level> <level label="c"> <text>Whenever the Board receives no bids or rejects all bids for the State bonds offered at a public, competitive sale, the Board may sell some or all of the State bonds at a private, negotiated sale, on the terms and conditions, including price, interest rates, and payment dates, that the Board determines to be the most advantageous to the State.</text> </level> <level label="d"> <text>Any determination or finding made by the Board pursuant to this section shall be conclusive.</text> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-125" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>In this section, “Fund” means the State and Local Facilities Loan Fund.</text> </level> <level label="b"> <text>For bonds issued under § 8-122 of this subtitle, the Comptroller shall establish:</text> <level label="1"> <text>the State and Local Facilities Loan Fund;</text> </level> <level label="2"> <text>a premium and expense account in the Fund; and</text> </level> <level label="3"> <text>for accounting purposes only:</text> <level label="i"> <text>a capital project account for each enabling act; and</text> </level> <level label="ii"> <text>separate subaccounts for each project included in enabling acts authorizing multiple projects.</text> </level> </level> </level> <level label="c"> <level label="1"> <text>The Comptroller shall credit the proceeds of the sale of State bonds to the Fund.</text> </level> <level label="2"> <text>The Comptroller shall credit to the premium and expenses account:</text> <level label="i"> <text>any part of the proceeds of a bond sale that is a premium; and</text> </level> <level label="ii"> <text>any additional part of the proceeds necessary to pay the expenses of that bond sale.</text> </level> </level> </level> <level label="d"> <level label="1"> <text>On approval by the Board, the Comptroller may expend money from the Fund for any expenditure authorized by an enabling act, regardless of whether bonds have been sold to specifically fund that enabling act.</text> </level> <level label="2"> <text>To ensure compliance with § 8-127 of this subtitle, the Comptroller shall account for all expenditures from the Fund on a project-specific basis.</text> </level> <level label="3"> <text>An expenditure made under this subsection may not reduce the amount of bonds authorized under an enabling act for which bonds have not been sold.</text> </level> </level> <level label="e"> <level label="1"> <text>Unless payment of expenses otherwise has been provided, the expenses of each bond sale shall be paid from the proceeds of that bond sale credited to the premium and expense account.</text> </level> <level label="2"> <text>After the expenses of each sale of State bonds have been paid, the remaining premium credited to the premium and expense account from that bond sale shall be transferred to the Annuity Bond Fund.</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-126" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>Whenever an appropriation from the General Fund is made in the State budget and is spent to finance any part of a project or program for which an enabling act authorizes State debt, the total State debt authorized by the enabling act is reduced by the lesser of:</text> <level label="1"> <text>the amount of the appropriation; or</text> </level> <level label="2"> <text>the amount of the State debt for which State bonds have not been issued.</text> </level> </level> <level label="b"> <text>Whenever any other funds are made available to finance any part of a project or program for which an enabling act authorizes State debt, the Governor, with the approval of the Board, may reduce the total State debt authorized by the enabling act by an amount not exceeding the amount of funds made available.</text> </level> <level label="c"> <text>The Comptroller shall submit for publication in 2 separate issues of the Maryland Register a notice that:</text> <level label="1"> <text>describes the project or program for which the debt authorization is to be reduced;</text> </level> <level label="2"> <text>states the amount of the reduction;</text> </level> <level label="3"> <text>states the source of the funds on which the reduction is based; and</text> </level> <level label="4"> <text>states the chapter number and year of enactment of the enabling act and each amendment to the enabling act.</text> </level> </level> <level label="d"> <text>A reduction under this section may become effective only after the second publication of notice in the Maryland Register.</text> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-127" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>Except as provided in § 8-129 of this subtitle, the proceeds of a sale of State bonds may be used only in the manner and for a project or program that is specified in an enabling act authorizing the issuance of State bonds.</text> </level> <level label="b"> <level label="1"> <text>Except as provided in § 8-129 of this subtitle, the proceeds of a sale of State bonds may be used only for a capital improvement unless:</text> <level label="i"> <text>the enabling act specifically provides otherwise; or</text> </level> <level label="ii"> <text>in an emergency, the Board unanimously grants a temporary exception.</text> </level> </level> <level label="2"> <text>The Board shall determine whether the object of an expenditure is a capital improvement. The standard for this determination is whether the useful life of the object equals or exceeds the life of the State bonds.</text> </level> </level> <level label="c"> <text>The Board shall enforce the provisions of this section.</text> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-128" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>In this section, “miscellaneous capital grant” means a grant for a capital project for an entity that is not a unit of State government funded in the annual State capital budget as part of:</text> <level label="1"> <text>the Miscellaneous Grant Programs;</text> </level> <level label="2"> <text>the Local House of Delegates Initiatives; or</text> </level> <level label="3"> <text>the Local Senate Initiatives.</text> </level> </level> <level label="b"> <text>Unless otherwise provided in an enabling act, an authorization of State debt for a project or program shall terminate no later than 1 year after the abandonment, completion, or acceptance of the project or program, as determined by the Board.</text> </level> <level label="c"> <text>Except to the extent that money authorized by an enabling act for a State project or program has been encumbered by the Board, an authorization of State debt shall automatically terminate 7 years after the date of the authorization, unless:</text> <level label="1"> <text>the enabling act provides otherwise;</text> </level> <level label="2"> <text>in an emergency, the Board unanimously grants a temporary exception for 1 year; or</text> </level> <level label="3"> <text>the authorization is for a program that:</text> <level label="i"> <text>is administered by a unit of State government that receives funds that are distributed by the unit to the individual projects; and</text> </level> <level label="ii"> <text>receives funds that may be reallocated by the unit between projects without requiring a budget amendment or an act of the General Assembly.</text> </level> </level> </level> <level label="d"> <level label="1"> <text>This subsection applies to a miscellaneous capital grant 3 years or more after the effective date of the enabling act that authorized the grant.</text> </level> <level label="2"> <text>On or before July 1 each year, the Department of General Services shall submit to the Legislative Policy Committee, in accordance with § 2–1257 of the State Government Article, a report that identifies each grant for which:</text> <level label="i"> <text>no part of the grant is under contract approved by the Board; and</text> </level> <level label="ii"> <text>the Board has not encumbered money for any part of the grant.</text> </level> </level> </level> <level label="e"> <text>If an authorization is terminated in accordance with this section, the amount of any unissued bonds specifically intended for the terminated authorization shall be canceled and be of no further effect.</text> </level> <level label="f"> <text>If an authorization is terminated in accordance with this section and bonds have been issued specifically to fund the authorization, the amount of any unspent bond proceeds associated with the terminated authorization shall be disposed of as provided in § 8–129 of this subtitle.</text> </level> <level label="g"> <level label="1"> <text>The Board shall enforce the provisions of this section.</text> </level> <level label="2"> <text>A failure to comply with or give effect to the provisions of this section may not affect the validity or enforceability of State debt.</text> </level> </level> <level label="h"> <text>The Board shall submit for publication in the Maryland Register a notice of any authorization of State debt that has been terminated or extended under this section; the notice shall include the chapter number and year of enactment of the enabling act and each amendment to the enabling act.</text> </level> <level label="i"> <text>A termination or extension under this section may become effective only after the publication of notice in the Maryland Register.</text> </level> <level label="j"> <level label="1"> <text>The Treasurer, in consultation with the Comptroller, shall submit a report on January 1 each year to the Governor and, in accordance with § 2–1257 of the State Government Article, the General Assembly.</text> </level> <level label="2"> <text>The report shall list all projects or programs for which authorization would be terminated in the upcoming year under the provisions in this section or § 7–305 of this article.</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-129" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>Except as provided in subsection (c) of this section, with the approval of the Board, the Governor shall dispose of unspent bond proceeds specifically issued to fund an enabling act within 1 year after the termination of the State debt authorization under § 8–128 of this subtitle.</text> </level> <level label="b"> <text>Except as provided in subsection (c) of this section, the Governor shall:</text> <level label="1"> <text>use the proceeds to reduce State debt authorizations, as provided in § 8–126(b) through (d) of this subtitle;</text> </level> <level label="2"> <text>allocate the proceeds to the Construction Contingency Fund, as provided in § 3–609 of this article; or</text> </level> <level label="3"> <text>order the proceeds to be credited to the Annuity Bond Fund, to pay the outstanding bonded indebtedness of the State.</text> </level> </level> <level label="c"> <text>If bonds have not been issued specifically to fund an authorization:</text> <level label="1"> <text>the provisions of subsections (a) and (b) of this section do not apply to the authorization; and</text> </level> <level label="2"> <text>the amount of any unissued bonds from a terminated authorization shall be canceled and be of no further effect.</text> </level> </level> <level label="d"> <text>The Board shall enforce the provisions of this section.</text> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-130" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <text>The Department of Budget and Management, with the approval of the Board, shall adopt regulations in accordance with Title 10, Subtitle 1 of the State Government Article to implement the provisions of §§ 8-128 and 8-129 of this subtitle.</text> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-131" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>Subject to the limitations in this section, the Board of Public Works may issue new bonds to refund its outstanding bonds.</text> </level> <level label="b"> <text>The power to issue bonds under this section is in addition to any other power to borrow.</text> </level> <level label="c"> <text>The Board may issue bonds under this section only for:</text> <level label="1"> <text>the public purpose of realizing for the State a savings in the total cost of debt service on a direct comparison or present value basis; or</text> </level> <level label="2"> <text>the public purpose of debt restructuring that reduces the total cost of debt service.</text> </level> </level> <level label="d"> <text>The Board may:</text> <level label="1"> <text>provide that bonds under this section be in 1 or more series; and</text> </level> <level label="2"> <text>vary the amount of the series.</text> </level> </level> <level label="e"> <text>The total principal amount of the bonds issued under this section may exceed the total principal amount of the bonds that are being refunded.</text> </level> <level label="f"> <text>Bonds that are being refunded and that are subject to redemption before their stated dates of maturity may be called for redemption:</text> <level label="1"> <text>on the earliest redemption date; or</text> </level> <level label="2"> <text>at a later date that the Board determines.</text> </level> </level> <level label="g"> <level label="1"> <text>The Treasurer shall invest and apply proceeds of a sale of bonds issued under this section to ensure that the principal and redemption premium of, and interest on, the bonds that are being refunded will be paid in full when due.</text> </level> <level label="2"> <text>The Treasurer may deposit any part of the proceeds of the sale of bonds issued under this section in a trust fund with a trust company or other banking institution, in the name of the State.</text> </level> <level label="3"> <text>The trustee may invest and reinvest money in the trust fund in:</text> <level label="i"> <text>obligations of the United States;</text> </level> <level label="ii"> <text>obligations guaranteed by the United States;</text> </level> <level label="iii"> <text>certificates of deposit or time deposits secured by an obligation of the United States;</text> </level> <level label="iv"> <text>certificates of deposit or time deposits secured by an obligation guaranteed by the United States; or</text> </level> <level label="v"> <text>any obligation or other investment described in § 6–222(b) of this article.</text> </level> </level> <level label="4"> <text>Interest, income, and profits on the investment may be applied in any lawful manner, including to the payment of:</text> <level label="i"> <text>the bonds that are being refunded; and</text> </level> <level label="ii"> <text>the bonds issued under this section.</text> </level> </level> <level label="5"> <text>The trustee shall make money in the trust fund available, as the Board requires, for the payment of:</text> <level label="i"> <text>the principal and redemption premium of, and interest on, the bonds that are being refunded;</text> </level> <level label="ii"> <text>the principal and redemption premium of, and interest on, the bonds issued under this section; or</text> </level> <level label="iii"> <text>any other related costs.</text> </level> </level> <level label="6"> <text>The Comptroller shall account for the proceeds of a sale of bonds issued under this section as nonbudgeted funds.</text> </level> </level> <level label="h"> <text>All or any part of the bonds issued under this section may be made payable from and secured by:</text> <level label="1"> <text>money in the Annuity Bond Fund established under § 8-132 of this subtitle; or</text> </level> <level label="2"> <text>other money or security that the State provides.</text> </level> </level> <level label="i"> <text>Nothing in this section shall prevent issuance and sale of refunding bonds the interest on which is not excludable from gross income for federal income tax purposes.</text> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-131.1" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Code” means the Internal Revenue Code of 1986 and includes regulations and rulings issued under that Code.</text> </level> <level label="3"> <text>“Proceeds” means money received from the sale of State bonds, and includes any money deemed to be proceeds of State bonds under the Code.</text> </level> </level> <level label="b"> <text>The Treasurer and the Comptroller shall establish and maintain funds and accounts for the administration, management, investment and accounting of proceeds, including any investment earnings on proceeds, that may be necessary or appropriate from time to time to comply with the Code and to establish or maintain the exclusion from gross income for federal income tax purposes of interest on State bonds.</text> </level> <level label="c"> <text>The Treasurer shall manage and invest proceeds, including any investment earnings on proceeds, in a manner so as to maintain the exclusion from gross income for federal income tax purposes of interest on State bonds. The Treasurer shall restrict the yields on investments of proceeds if and to the extent necessary to maintain the exclusion from gross income for federal income tax purposes of interest on State bonds.</text> </level> <level label="d"> <text>The Treasurer and the Comptroller shall prepare and maintain records of the receipt, deposit, investment, management, disbursement and application of proceeds, including any investment earnings on proceeds, that may be necessary or appropriate from time to time to comply with the Code and to maintain or verify the exclusion from gross income for federal income tax purposes of interest on State bonds.</text> </level> <level label="e"> <text>The Treasurer shall establish a separate rebate fund to be used to make any payments to the United States with respect to investment earnings on proceeds that may be required from time to time by the Code. There may be separate accounts within the rebate fund. Amounts deposited to the rebate fund shall be used only for the purpose of making rebate payments to the United States. The Treasurer shall make payments from the rebate fund as may be required from time to time in order to comply with the Code and to maintain the exclusion from gross income for federal income tax purposes of interest on State bonds. Any excess money held in the rebate fund with respect to an issue of State bonds after all required rebate payments for that issue have been made, as certified by the Treasurer, shall be deposited in the General Fund.</text> </level> <level label="f"> <text>The Treasurer and the Comptroller shall prepare and file from time to time with the appropriate agency of the United States any forms, information, and reports with respect to State bonds and the expenditure and investment of proceeds that may be required under the Code.</text> </level> <level label="g"> <text>For purposes of doing whatever is necessary or appropriate from time to time to comply with the Code and to establish or maintain the exclusion from gross income for federal income tax purposes of interest on State bonds, the Board, the Treasurer, and the Comptroller shall each:</text> <level label="1"> <text>take any other or further actions;</text> </level> <level label="2"> <text>enter into any agreement or covenant regarding the use of proceeds, including any investment earnings on proceeds, the deposit of money to the rebate fund and the making of rebate payments; and</text> </level> <level label="3"> <text>provide certifications of facts and estimates.</text> </level> </level> <level label="h"> <text>This section does not prevent the Board from authorizing the issuance and sale of State bonds the interest on which is not excludable from gross income for federal income tax purposes if the Board in its authorizing resolution finds that to be in the best interests of the State.</text> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-131.2" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <text>The State bonds, the transfer of State bonds, the interest payable on State bonds, and any income derived from State bonds, including profit realized in the sale or exchange of State bonds, are exempt from State and local taxes.</text> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-132" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>In this section, “Code” means the Internal Revenue Code of 1986 and includes regulations and rulings issued under that Code.</text> </level> <level label="b"> <text>There is an Annuity Bond Fund.</text> </level> <level label="c"> <text>The Comptroller shall:</text> <level label="1"> <text>credit to the Annuity Bond Fund any money appropriated in the State budget to:</text> <level label="i"> <text>meet the debt service requirements on State bonds; and</text> </level> <level label="ii"> <text>pay the costs of fiscal agents and other contracting parties appointed by the State Treasurer under §§ 8–121 and 8–136 of this subtitle; and</text> </level> </level> <level label="2"> <text>as specified in the appropriation, use the money to meet the debt service on the State bonds and pay fiscal agents and other contracting parties’ costs.</text> </level> </level> <level label="d"> <text>Any premium from the sale of State bonds transferred to the Annuity Bond Fund under § 8–125 of this subtitle may be used to pay for:</text> <level label="1"> <text>debt service on State bonds;</text> </level> <level label="2"> <text>capital projects; or</text> </level> <level label="3"> <text>if necessary or appropriate from time to time to comply with the requirements of the Code, any other use authorized by the Code.</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-133" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>The source of payment for the principal of and interest on each State bond that is sold as part of a State and local facilities loan shall be as provided in the enabling act under which the State bond is issued.</text> </level> <level label="b"> <text>This section does not affect any exemption from taxation provided by law.</text> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-134" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <level label="1"> <text>Subject to the provisions of subsection (b) of this section, on or before May 1 of each year, the Board shall certify to the governing body of each county the rates of State tax on assessable property needed to meet the debt service requirements during the next taxable year on all the State bonds that the Board anticipates will be outstanding during that year.</text> </level> <level label="2"> <text>Each governing body immediately shall collect the tax at the rates the Board certifies under this section.</text> </level> </level> <level label="b"> <text>If, on or before May 1 of any year, the Comptroller certifies to the Board that the General Assembly has appropriated enough money to meet the debt service requirements during the next taxable year on an issue of State bonds:</text> <level label="1"> <text>the Board, by resolution, may determine that the tax otherwise required by the enabling act under which those State bonds are issued need not be imposed for that year; and</text> </level> <level label="2"> <text>the Governor, by proclamation issued under the resolution, shall declare that the taxes otherwise required by the enabling act may not be collected during that year.</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-135" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>In this section, “financial institution” has the meaning stated in § 6-201 of this article.</text> </level> <level label="b"> <text>The Treasurer may appoint any financial institution as a fiscal agent.</text> </level> <level label="c"> <text>During its agency, the fiscal agent shall be covered by a surety bond or an insurance policy of the type and in the amount of coverage determined by the State Treasurer under § 5–108 of the State Government Article.</text> </level> <level label="d"> <level label="1"> <text>In accordance with the procedures that the Treasurer sets, a fiscal agent shall pay at the financial institution, from money advanced to the agent, the interest on State debt and, as the principal matures, the principal.</text> </level> <level label="2"> <text>The fiscal agent shall keep a receipt for each payment.</text> </level> </level> <level label="e"> <text>Each fiscal agent shall:</text> <level label="1"> <text>allow the Treasurer to inspect the agent’s accounts at any time; and</text> </level> <level label="2"> <text>provide copies of the accounts on request of:</text> <level label="i"> <text>the Senate;</text> </level> <level label="ii"> <text>the House of Delegates;</text> </level> <level label="iii"> <text>the Comptroller; or</text> </level> <level label="iv"> <text>the Treasurer.</text> </level> </level> </level> <level label="f"> <text>At least once every 6 months, each fiscal agent shall send to the Treasurer:</text> <level label="1"> <text>an accounting of the State bonds and coupons that the agent has redeemed since the last accounting or transmittal under this subsection;</text> </level> <level label="2"> <level label="i"> <text>a certificate that states the total number of those State bonds and coupons and that attests to the destruction of all of them by a method satisfactory to the Treasurer; or</text> </level> <level label="ii"> <text>if the Treasurer requires, the State bonds and coupons that the agent has redeemed since the last accounting or transmittal under this subsection;</text> </level> </level> <level label="3"> <text>an accounting of the State bonds and coupons that have not been redeemed during any allowed redemption period that expired since the prior accounting provided under this subsection; and</text> </level> <level label="4"> <text>the total unredeemed principal and interest on any State bonds and coupons for which the redemption period has expired since the prior accounting provided under this subsection.</text> </level> </level> <level label="g"> <level label="1"> <text>The Treasurer shall examine, count, and record each State bond and coupon that a fiscal agent returns.</text> </level> <level label="2"> <text>Once every 2 years, after the Legislative Auditor verifies the records of the Treasurer, the Comptroller and the Treasurer or their deputies shall destroy all State bonds and coupons that the fiscal agents returned before the close of the last fiscal year.</text> </level> <level label="3"> <text>The State bonds and coupons shall be destroyed in the presence of the Legislative Auditor or a designee of the Auditor.</text> </level> <level label="4"> <text>The Comptroller, Treasurer, and Legislative Auditor shall execute a certificate that states the total number of State bonds and coupons destroyed and that attests to the destruction of all of them.</text> </level> </level> <level label="h"> <text>The Treasurer shall:</text> <level label="1"> <text>keep all certificates of destruction; and</text> </level> <level label="2"> <text>send copies of each certificate to the presiding officers of the General Assembly.</text> </level> </level> <level label="i"> <text>The Treasurer shall:</text> <level label="1"> <text>deposit unredeemed principal and interest into an unpresented bond and coupon account; and</text> </level> <level label="2"> <text>dispose of unredeemed principal and interest as provided in Title 17 of the Commercial Law Article.</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-136" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <text>If the Board has authorized the transaction and approved the form of the agreement, to improve the management of State general obligation debt or to reduce the cost of servicing such debt, and after giving due consideration to the creditworthiness of the counterparties, the Treasurer may:</text> <level label="1"> <text>enter into interest rate exchange agreements or contracts providing for payments based on levels of or changes in interest rates; and</text> </level> <level label="2"> <text>appoint any agents necessary to implement and administer such agreements or contracts.</text> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-138" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <text>Subject to the limitations in this Part V of this subtitle, and at the direction of the Board, the Treasurer may borrow money, on the credit of the State, in anticipation of:</text> <level label="1"> <text>tax receipts, as set forth in the revenue estimates that support an enacted State budget; or</text> </level> <level label="2"> <text>proceeds of a sale of State bonds.</text> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-139" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <text>The Board shall give the President of the Senate and the Speaker of the House of Delegates at least 10 days’ prior notice of a loan under this Part V of this subtitle.</text> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-140" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <text>The loans outstanding under this Part V of this subtitle may not exceed a total principal amount of $100,000,000.</text> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-141" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <text>The Board shall determine the interest rates on loans under this Part V of this subtitle.</text> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-142" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>A loan under this Part V of this subtitle in anticipation of proceeds of a sale of State bonds shall be repaid within 180 days after the date of the loan.</text> </level> <level label="b"> <text>A loan under this Part V of this subtitle in anticipation of tax receipts shall be repaid within 180 days after the date of the loan but no later than 45 days after the close of the fiscal year.</text> </level> <level label="c"> <text>The Board may not extend a time limit set in this section.</text> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-145" title_number="8" title_name="Debt" subtitle_number="1" subtitle_name="General Obligation Debt"> <level label="a"> <text>Whenever the owner of a State bond or coupon from a State bond satisfies the Treasurer, by legal and competent evidence, that the State bond or coupon has been lost and gives the Treasurer satisfactory security to indemnify the State against any other claim on the State bond or coupon, the Treasurer may issue a duplicate State bond or duplicate coupon.</text> </level> <level label="b"> <text>Each duplicate State bond or duplicate coupon shall:</text> <level label="1"> <text>show on its face that it is a duplicate of a lost State bond or coupon; and</text> </level> <level label="2"> <text>correspond in amount with the lost State bond or coupon.</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-201" title_number="8" title_name="Debt" subtitle_number="2" subtitle_name="Debts of State Units"> <level label="a"> <text>In this subtitle the following words have the meanings indicated, unless the context clearly requires otherwise.</text> </level> <level label="b"> <level label="1"> <text>“Bond” means an obligation for the payment of money, by whatever name known or source of funds secured, issued by a State unit under general or special statutory authority.</text> </level> <level label="2"> <text>“Bond” includes:</text> <level label="i"> <text>a bond;</text> </level> <level label="ii"> <text>a certificate of indebtedness;</text> </level> <level label="iii"> <text>an interim certificate; and</text> </level> <level label="iv"> <text>a note.</text> </level> </level> </level> <level label="c"> <text>“Enabling act” means a law that authorizes a State unit to create a debt and to sell bonds to evidence that debt.</text> </level> <level label="d"> <text>“Resolution” means a resolution or other evidence of official action customarily used by a State unit.</text> </level> <level label="e"> <level label="1"> <text>“State unit” means a unit or instrumentality of the State.</text> </level> <level label="2"> <text>“State unit” does not include the State.</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-202" title_number="8" title_name="Debt" subtitle_number="2" subtitle_name="Debts of State Units"> <text>This subtitle does not apply to an entity that is governed by Title 19, Subtitles 1, 2, and 9 and Subtitle 6, Part I of the Local Government Article.</text> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-205" title_number="8" title_name="Debt" subtitle_number="2" subtitle_name="Debts of State Units"> <level label="a"> <text>A State unit authorized to issue bonds may issue bonds:</text> <level label="1"> <text>in coupon form; or</text> </level> <level label="2"> <text>notwithstanding any other provision of law, in a form that qualifies as a registered form under §§ 103 and 149 of the Internal Revenue Code or a regulation proposed or adopted under those sections.</text> </level> </level> <level label="b"> <text>Whenever a State unit provides for the sale of bonds in registered form, the State unit may:</text> <level label="1"> <text>establish procedures for the registration and transfer of the bonds;</text> </level> <level label="2"> <text>appoint any agent, including an authenticating trustee, corporate trustee, paying agent, registrar, or transfer agent;</text> </level> <level label="3"> <text>in connection with the establishment and maintenance of a central depository system for the transfer or pledge of the bonds, make agreements with:</text> <level label="i"> <text>custodian banks and their nominees; or</text> </level> <level label="ii"> <text>financial intermediaries and their nominees; and</text> </level> </level> <level label="4"> <text>exercise any other power that relates to issuance of bonds in registered form.</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-206" title_number="8" title_name="Debt" subtitle_number="2" subtitle_name="Debts of State Units"> <level label="a"> <level label="1"> <text>This section does not apply if the total principal amount of the authorized issue is $25,000 or less.</text> </level> <level label="2"> <text>This section does not apply to a bond that:</text> <level label="i"> <text>matures within 1 year after the date of issue and is issued:</text> <level label="1"> <text>in anticipation of tax receipts;</text> </level> <level label="2"> <text>to meet current expenses; or</text> </level> <level label="3"> <text>to meet an emergency;</text> </level> </level> <level label="ii"> <text>is sold to the United States or a unit or instrumentality of the United States;</text> </level> <level label="iii"> <text>is issued under a plan of composition approved in a proceeding under Chapter IX of the United States Bankruptcy Act; or</text> </level> <level label="iv"> <text>is issued under any other plan to refund or refinance in exchange, bond for bond, an outstanding maturing debt, other than:</text> <level label="1"> <text>a current or floating debt; or</text> </level> <level label="2"> <text>a bond under item (i) of this paragraph.</text> </level> </level> </level> <level label="3"> <text>This section does not apply if:</text> <level label="i"> <text>the proceeds of the sale of bonds are to be used with a grant from the United States or a unit or instrumentality of the United States to finance public works; and</text> </level> <level label="ii"> <text>in the opinion of the Attorney General, the agreement or other writing referring to the grant conditions the grant on the prior execution, by the State unit and a prospective buyer, of a contract for the sale of the bonds when issued.</text> </level> </level> <level label="4"> <text>This section does not apply to bond or grant anticipation notes issued under Part III of this subtitle.</text> </level> <level label="5"> <text>This section does not apply to bonds issued under an enabling act that specifically states that this section does not apply or that provides a different method for the sale of the bonds.</text> </level> </level> <level label="b"> <text>A State unit shall offer bonds at a public sale.</text> </level> <level label="c"> <level label="1"> <text>A State unit shall give notice of a public sale of bonds at least twice in at least 1 newspaper with a general circulation in the State. The 1st publication shall appear at least 10 days before the date of sale.</text> </level> <level label="2"> <text>The notice shall:</text> <level label="i"> <text>be in the form required in the resolution that authorizes the issuance of the bonds;</text> </level> <level label="ii"> <text>state the date, time, and place of the public sale;</text> </level> <level label="iii"> <text>describe the bonds by reference to the enabling act under which they are authorized;</text> </level> <level label="iv"> <text>state the date of issue;</text> </level> <level label="v"> <text>state the total principal amount;</text> </level> <level label="vi"> <text>state the schedule of maturities;</text> </level> <level label="vii"> <text>state the interest payable or the manner of determining the interest;</text> </level> <level label="viii"> <text>state the purpose for which the proceeds will be used;</text> </level> <level label="ix"> <text>describe the general form of the bonds, including:</text> <level label="1"> <text>whether the bonds will be in coupon or registered form; and</text> </level> <level label="2"> <text>whether the principal or interest or both will be registrable;</text> </level> </level> <level label="x"> <text>state that each bid must be made in writing by sealed proposal; and</text> </level> <level label="xi"> <text>state the amount of the good faith deposit that the State unit has determined must accompany the bid.</text> </level> </level> <level label="3"> <text>The notice may reserve to the State unit the right to reject any or all bids.</text> </level> </level> <level label="d"> <text>Except as provided in subsection (e) of this section and § 8-207 of this subtitle, the State unit shall sell the bonds to the highest bidder or bidders at the public sale.</text> </level> <level label="e"> <level label="1"> <text>If the State unit has reserved the right to reject bids and does reject all bids, the State unit, within 30 days after rejecting all the bids, may sell the bonds at a private sale for not less than the highest amount bid by an acceptable bidder at the public sale.</text> </level> <level label="2"> <text>If the State unit has reserved the right to reject all bids and does reject all bids and fails to sell the bonds at a private sale within the 30-day period under paragraph (1) of this subsection, the State unit may sell the bonds only at another public sale after notice as required in subsection (c) of this section.</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-207" title_number="8" title_name="Debt" subtitle_number="2" subtitle_name="Debts of State Units"> <level label="a"> <text>This section does not apply to bonds issued under an enabling act that specifically states that this section does not apply.</text> </level> <level label="b"> <text>Whenever a State unit simultaneously issues bonds authorized under 2 or more enabling acts, the State unit may allow submission of a bid that:</text> <level label="1"> <text>is for bonds authorized under 1 enabling act; and</text> </level> <level label="2"> <text>is conditioned on the acceptance of 1 or more companion bids for bonds authorized under 1 or more of the other enabling acts.</text> </level> </level> <level label="c"> <text>Whenever, as a whole, a set of bids under subsection (b) of this section yields to the State unit more than individual bids, the State unit shall accept the set even if 1 or more of the bids in the set yields less than the individual bids.</text> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-208" title_number="8" title_name="Debt" subtitle_number="2" subtitle_name="Debts of State Units"> <level label="a"> <level label="1"> <text>This section does not apply to a bond that:</text> <level label="i"> <text>matures within 1 year after the date of issue and is issued:</text> <level label="1"> <text>in anticipation of tax receipts;</text> </level> <level label="2"> <text>to meet current expenses; or</text> </level> <level label="3"> <text>to meet an emergency;</text> </level> </level> <level label="ii"> <text>is sold to the United States or a unit or instrumentality of the United States;</text> </level> <level label="iii"> <text>is issued under a plan of composition approved in a proceeding under Chapter IX of the United States Bankruptcy Act; or</text> </level> <level label="iv"> <text>is issued under any other plan to refund or refinance in exchange, bond for bond, an outstanding maturing debt, other than:</text> <level label="1"> <text>a current or floating debt; or</text> </level> <level label="2"> <text>a bond under item (i) of this paragraph.</text> </level> </level> </level> <level label="2"> <text>This section does not apply to bond or grant anticipation notes issued under Part III of this subtitle.</text> </level> <level label="3"> <text>This section does not apply to bonds issued under an enabling act that specifically states that this section does not apply or that provides a different method for establishing the maturity of the bonds.</text> </level> </level> <level label="b"> <level label="1"> <text>A State unit shall issue bonds on a serial maturity plan.</text> </level> <level label="2"> <text>The State unit may:</text> <level label="i"> <text>vary the amounts of the series; and</text> </level> <level label="ii"> <text>provide for the maturity of a series in consecutive annual installments or at longer intervals.</text> </level> </level> </level> <level label="c"> <level label="1"> <text>The maturity date of the final series shall be based on the purpose for which the bonds are issued:</text> <level label="i"> <text>within the time limit that applies under the schedule in paragraph (2) of this subsection; or</text> </level> <level label="ii"> <text>if more than 1 time limit applies, within the shortest applicable time limit.</text> </level> </level> <level label="2"> <text>The schedule of maturity dates is as follows:</text> <text>Limit on Maturity</text> <text>Purpose of Issue of Issue</text> <text>Paving existing highways or streets ………………… 10 years</text> <text>Airports and buildings constructed or to be</text> <text>constructed on airports ………………………………… 15 years</text> <text>Highway construction …………………………………… 20 years</text> <text>Electric light and power systems ……………………… 25 years</text> <text>Gas systems ……………………………………………… 25 years</text> <text>Grade crossing eliminations …………………………… 25 years</text> <text>Harbor improvements …………………………………… 25 years</text> <text>School construction ……………………………………… 25 years</text> <text>All unscheduled permanent structures of durable</text> <text>Materials …………………………………………………… 25 years</text> <text>Bridges ……………………………………………………… 30 years</text> <text>Land acquired for permanent improvements ………… 40 years</text> <text>Sewerage installation ……………………………………… 40 years</text> <text>Water Systems ……………………………………………… 40 years</text> <text>All other unscheduled proprietary or public purposes 40 years</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-209" title_number="8" title_name="Debt" subtitle_number="2" subtitle_name="Debts of State Units"> <level label="a"> <text>Subject to the limitations in this section, with the approval of the Board of Public Works, a State unit authorized to issue bonds may issue new bonds to refund its outstanding bonds.</text> </level> <level label="b"> <text>The power to issue bonds under this section is in addition to any other power to borrow.</text> </level> <level label="c"> <text>A State unit may issue bonds under this section only for:</text> <level label="1"> <text>the public purpose of realizing for the State unit a savings in the total cost of debt service on a direct comparison or present value basis;</text> </level> <level label="2"> <text>the public purpose of debt restructuring that reduces the total cost of debt service; or</text> </level> <level label="3"> <text>the public purpose of debt restructuring that the State unit determines:</text> <level label="i"> <text>is in its best interests;</text> </level> <level label="ii"> <text>is consistent with its long term financial plan; and</text> </level> <level label="iii"> <text>realizes a financial objective of the State unit, including improvement of the relationship of debt service to any source of payment such as taxes, assessments, or other charges.</text> </level> </level> </level> <level label="d"> <text>A State unit may:</text> <level label="1"> <text>provide that bonds under this section be in 1 or more series; and</text> </level> <level label="2"> <text>vary the amount of the series.</text> </level> </level> <level label="e"> <level label="1"> <text>The total principal amount of the bonds issued under this section may exceed the total principal amount of the bonds that are being refunded.</text> </level> <level label="2"> <text>To determine whether the bonds under this section are within any limit on debt that applies to the State unit:</text> <level label="i"> <text>the amount of the bonds that are being refunded shall be subtracted from its total outstanding debt; and</text> </level> <level label="ii"> <text>the amount of the bonds issued under this section shall be added to the difference.</text> </level> </level> </level> <level label="f"> <level label="1"> <text>Except as provided in paragraph (2) of this subsection, a State unit shall issue bonds under this section in accordance with the procedures that applied to issuance of the bonds that are being refunded.</text> </level> <level label="2"> <text>If, at a public meeting, the State unit determines that it would be in the public interest, the State unit may sell bonds issued under this section at a private sale, without soliciting bids.</text> </level> </level> <level label="g"> <text>Bonds that are being refunded and that are subject to redemption before their stated dates of maturity may be called for redemption:</text> <level label="1"> <text>on the earliest redemption date; or</text> </level> <level label="2"> <text>at a later date that the State unit determines.</text> </level> </level> <level label="h"> <level label="1"> <text>A State unit shall invest and apply proceeds of a sale of bonds issued under this section to ensure that the principal and redemption premium of, and interest on, the bonds that are being refunded will be paid in full when due.</text> </level> <level label="2"> <text>The State unit may deposit any part of the proceeds of the sale of bonds issued under this section in a trust fund with a trust company or other banking institution, in the name of the State unit.</text> </level> <level label="3"> <text>The trustee may invest and reinvest money in the trust fund in:</text> <level label="i"> <text>obligations of the United States;</text> </level> <level label="ii"> <text>obligations guaranteed by the United States;</text> </level> <level label="iii"> <text>certificates of deposit or time deposits secured by an obligation of the United States; or</text> </level> <level label="iv"> <text>certificates of deposit or time deposits secured by an obligation guaranteed by the United States.</text> </level> </level> <level label="4"> <text>Interest, income, and profits on the investment may be:</text> <level label="i"> <text>considered to be revenue of a revenue project; and</text> </level> <level label="ii"> <text>applied in any lawful manner, including to the payment of:</text> <level label="1"> <text>the bonds that are being refunded; and</text> </level> <level label="2"> <text>the bonds issued under this section.</text> </level> </level> </level> <level label="5"> <text>The trustee shall make money in the trust fund available, as the State unit requires, for the payment of:</text> <level label="i"> <text>the principal and redemption premium of, and interest on, the bonds that are being refunded;</text> </level> <level label="ii"> <text>the principal and redemption premium of, and interest on, the bonds issued under this section; or</text> </level> <level label="iii"> <text>any other related costs.</text> </level> </level> </level> <level label="i"> <text>All or any part of the bonds issued under this section may be made payable from and secured by:</text> <level label="1"> <text>money in the trust fund; or</text> </level> <level label="2"> <text>other money or security that the State unit provides.</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-210" title_number="8" title_name="Debt" subtitle_number="2" subtitle_name="Debts of State Units"> <level label="a"> <text>A State unit authorized to issue bonds:</text> <level label="1"> <text>subject to the limitations in this section and notwithstanding any other law, if the State unit determines that it is in the public interest, may issue and sell the bonds in denominations of less than $1,000, in any form; and</text> </level> <level label="2"> <text>subject to any other provision of law, may set the prices for and the interest rates to be paid on the bonds.</text> </level> </level> <level label="b"> <level label="1"> <text>A State unit may not have bonds outstanding under this section in excess of a total principal amount of $1,000,000.</text> </level> <level label="2"> <text>The total debts of a State unit, including bonds under this section, may not exceed a limit set by law.</text> </level> </level> <level label="c"> <text>A State unit may sell bonds issued under this section in any manner that the State unit considers appropriate, notwithstanding §§ 8-206 and 8-208 of this subtitle or any other law that requires the solicitation of competitive bids or the public sale of bonds to the highest bidder or bidders or that regulates the manner in which the sale shall be advertised or the bonds sold.</text> </level> <level label="d"> <level label="1"> <text>A State unit that issues bonds under this section shall approve a disclosure document that includes:</text> <level label="i"> <text>a description of the security for the bonds;</text> </level> <level label="ii"> <text>a statement of the purposes for which the proceeds of the bonds will be used;</text> </level> <level label="iii"> <text>a description of the financial condition of the State unit;</text> </level> <level label="iv"> <text>a statement of the prices for and the interest rates to be paid on the bonds; and</text> </level> <level label="v"> <text>a statement of the times and places of payment of the principal of and interest on the bonds.</text> </level> </level> <level label="2"> <text>The State unit shall make the disclosure document available to buyers of the bonds.</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-211" title_number="8" title_name="Debt" subtitle_number="2" subtitle_name="Debts of State Units"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Code” means the Internal Revenue Code of 1986 and includes regulations and rulings issued under that Code.</text> </level> <level label="3"> <text>“Financial officer” means the Controller, the director of finance or similar official of a unit of the State government or a political instrumentality of the State that has authority to issue bonds. “Financial officer” includes, to the extent necessary, the Treasurer and the Comptroller.</text> </level> <level label="4"> <text>“Proceeds” means money received from the sale of bonds, and includes any money deemed to be proceeds of bonds under the Code.</text> </level> </level> <level label="b"> <text>The financial officer may establish and maintain funds and accounts for the administration, management, investment and accounting of proceeds, including any investment earnings on proceeds, that may be necessary or appropriate from time to time to comply with the Code and to establish or maintain the exclusion from gross income for federal income tax purposes of interest on the bonds.</text> </level> <level label="c"> <text>The financial officer may manage and invest proceeds, including any investment earnings on proceeds, in a manner so as to maintain the exclusion from gross income for federal income tax purposes of interest on the bonds. The financial officer may restrict the yields on investments of proceeds if and to the extent necessary to maintain the exclusion from gross income for federal income tax purposes of interest on the bonds.</text> </level> <level label="d"> <text>The financial officer may prepare and maintain records of the receipt, deposit, investment, management, disbursement and application of proceeds, including any investment earnings on proceeds, that may be necessary or appropriate from time to time to comply with the Code and to maintain or verify the exclusion from gross income for federal income tax purposes of interest on the bonds.</text> </level> <level label="e"> <level label="1"> <text>The financial officer may establish a separate rebate fund to be used to make any payments to the United States with respect to investment earnings on proceeds that may be required from time to time by the Code.</text> </level> <level label="2"> <text>There may be separate accounts within the rebate fund.</text> </level> <level label="3"> <text>Amounts deposited to the rebate fund shall be used only for the purpose of making rebate payments to the United States.</text> </level> <level label="4"> <text>The financial officer may make payments from the rebate fund as may be required from time to time in order to:</text> <level label="i"> <text>comply with the Code; and</text> </level> <level label="ii"> <text>maintain the exclusion from gross income for federal income tax purposes of interest on the bonds.</text> </level> </level> <level label="5"> <text>Any excess money held in the rebate fund with respect to an issue of bonds after all required rebate payments for that issue have been made, as certified by the financial officer, shall be applied in a manner consistent with the Code.</text> </level> </level> <level label="f"> <text>The financial officer may prepare and file from time to time with the appropriate agency of the United States any forms, information, and reports with respect to the bonds and the expenditure and investment of proceeds that may be required under the Code.</text> </level> <level label="g"> <text>The financial officer and other officers of a State unit may:</text> <level label="1"> <text>take any other or further actions;</text> </level> <level label="2"> <text>enter into any agreement or covenant regarding the use of proceeds, including any investment earnings on proceeds, the deposit of money to the rebate fund and the making of rebate payments; and</text> </level> <level label="3"> <text>provide certifications of facts and estimates, that may be necessary or appropriate from time to time to comply with the Code and to establish or maintain the exclusion from gross income for federal income tax purposes of interest on the bonds.</text> </level> </level> <level label="h"> <text>Nothing in this section shall prevent the State unit from authorizing the issuance and sale of bonds the interest on which is not excludable from gross income for federal income tax purposes.</text> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-213" title_number="8" title_name="Debt" subtitle_number="2" subtitle_name="Debts of State Units"> <level label="a"> <text>A State unit authorized to issue bonds may issue and sell bond anticipation notes if, in the resolution that authorizes the notes, the State unit covenants to:</text> <level label="1"> <text>pay from the proceeds of the bonds in anticipation of the sale of which the notes are issued:</text> <level label="i"> <text>the principal of the notes; and</text> </level> <level label="ii"> <text>to the extent that the interest on the notes is not paid from the proceeds of sale of the notes, the interest on the notes; and</text> </level> </level> <level label="2"> <text>issue the bonds as soon as there is no longer a reason for deferring their issuance.</text> </level> </level> <level label="b"> <text>A State unit may issue and sell grant anticipation notes in anticipation of the receipt of a grant from the United States, the State, or any of their units if, in the resolution that authorizes the notes, the State unit covenants to pay from the proceeds of the grant in anticipation of the receipt of which the notes are issued:</text> <level label="1"> <text>the principal of the notes; and</text> </level> <level label="2"> <text>the interest on the notes.</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-214" title_number="8" title_name="Debt" subtitle_number="2" subtitle_name="Debts of State Units"> <level label="a"> <text>Bond and grant anticipation notes issued under this Part III of this subtitle shall be authorized by resolution of the State unit.</text> </level> <level label="b"> <level label="1"> <text>The resolution shall state:</text> <level label="i"> <text>the authority for the notes and, if the notes are bond anticipation notes, the authority for the bonds;</text> </level> <level label="ii"> <text>the amount of notes authorized; and</text> </level> <level label="iii"> <text>the terms of the notes.</text> </level> </level> <level label="2"> <text>The resolution shall specify that the notes:</text> <level label="i"> <text>be sold in a certain manner, at public sale or, if the State unit considers private negotiation to be in its best interest, at private sale;</text> </level> <level label="ii"> <text>mature at certain times;</text> </level> <level label="iii"> <text>bear interest at certain rates or at rates to be determined in the manner stated in the resolution; and</text> </level> <level label="iv"> <text>be sold for certain prices or for prices to be determined in the manner stated in the resolution, which may be at, above, or below par.</text> </level> </level> <level label="3"> <text>The resolution may provide that the notes:</text> <level label="i"> <text>be in 1 or more series, as money is required; and</text> </level> <level label="ii"> <text>be renewable at maturity with or without resale.</text> </level> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-215" title_number="8" title_name="Debt" subtitle_number="2" subtitle_name="Debts of State Units"> <level label="a"> <text>A State unit may not issue bond anticipation notes under this Part III of this subtitle in a total principal amount that exceeds the authorized amount of the bonds in anticipation of the sale of which the notes are issued and sold.</text> </level> <level label="b"> <text>A State unit may not issue grant anticipation notes under this Part III of this subtitle in a total amount, including interest, that exceeds the amount of the grant in anticipation of the receipt of which the notes are issued and sold.</text> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-216" title_number="8" title_name="Debt" subtitle_number="2" subtitle_name="Debts of State Units"> <text>Grant anticipation notes may not be sold under this Part III of this subtitle until the State unit receives from the grantor a written commitment for the grant.</text> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-217" title_number="8" title_name="Debt" subtitle_number="2" subtitle_name="Debts of State Units"> <level label="a"> <text>A bond anticipation note may not be issued under this Part III of this subtitle unless it is signed, endorsed, or guaranteed in the manner required by law for the bonds in anticipation of which the note is issued.</text> </level> <level label="b"> <text>A bond or grant anticipation note is valid and binding in accordance with its terms notwithstanding that:</text> <level label="1"> <text>an official whose signature appears on the note is no longer an official when the note is delivered; or</text> </level> <level label="2"> <text>an official whose signature appears on the note became an official after the note was issued.</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-218" title_number="8" title_name="Debt" subtitle_number="2" subtitle_name="Debts of State Units"> <level label="a"> <level label="1"> <text>The principal of and interest on bond anticipation notes under this Part III of this subtitle shall be payable from:</text> <level label="i"> <text>the 1st proceeds of sale of the bonds; or</text> </level> <level label="ii"> <text>the tax or other revenue that the State unit has pledged to the payment of the bonds.</text> </level> </level> <level label="2"> <text>One year’s interest on the notes, or on any renewal of the notes, accounting from the date of the initial issue of the notes, may be paid from the proceeds of sale of the notes.</text> </level> </level> <level label="b"> <level label="1"> <text>Subject to paragraphs (2) and (3) of this subsection, the principal of and interest on grant anticipation notes under this Part III of this subtitle shall be payable from the proceeds of the grant.</text> </level> <level label="2"> <text>The State unit may make the grant anticipation notes payable only from the proceeds of the grant and need not pledge the faith and credit or taxing power of the State unit.</text> </level> <level label="3"> <text>If the State unit does not pledge its faith and credit or taxing power, the grant anticipation notes are not a debt or a charge against the general credit or taxing power of the State unit under any constitutional provision or statutory limitation.</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-219" title_number="8" title_name="Debt" subtitle_number="2" subtitle_name="Debts of State Units"> <text>The proceeds of sale of bond anticipation notes shall be spent:</text> <level label="1"> <text>1st, for payment of the expenses of issuance of the notes; and</text> </level> <level label="2"> <text>then, subject to § 8-218(a)(2) of this subtitle, only for the public purposes for which the bonds are authorized.</text> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-220" title_number="8" title_name="Debt" subtitle_number="2" subtitle_name="Debts of State Units"> <level label="a"> <level label="1"> <text>Except for the provisions of this section, each State unit shall comply with the provisions, requirements, and limitations in the enabling act.</text> </level> <level label="2"> <text>If a State unit is unable to sell bonds to pay the bond anticipation notes under this Part III of this subtitle when due because of an interest rate limitation in the enabling act, the State unit may:</text> <level label="i"> <text>issue bonds in a total principal amount sufficient to pay the principal of and not more than 1 year’s interest on the notes; and</text> </level> <level label="ii"> <text>provide for payment of interest on the bonds at a rate that is higher than the interest rate limitation in the enabling act.</text> </level> </level> <level label="3"> <text>This section is supplemental authority for a State unit to issue bonds free of an interest rate limitation to pay outstanding bond anticipation notes under this Part III of this subtitle.</text> </level> </level> <level label="b"> <text>A resolution that authorizes the issuance of bonds under subsection (a)(2) of this section shall refer to:</text> <level label="1"> <text>the enabling act; and</text> </level> <level label="2"> <text>this section.</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-221" title_number="8" title_name="Debt" subtitle_number="2" subtitle_name="Debts of State Units"> <level label="a"> <text>A State unit may issue bond or grant anticipation notes under this Part III of this subtitle as notes in the nature of commercial paper.</text> </level> <level label="b"> <text>A bond or grant anticipation note issued as a note in the nature of commercial paper may be secured by:</text> <level label="1"> <text>a trust indenture with a trust company, or a bank with powers of a trust company, in or outside the State; and</text> </level> <level label="2"> <text>a letter of credit, line of credit, or other credit arrangement from or with a lending institution.</text> </level> </level> <level label="c"> <level label="1"> <text>For bond anticipation notes, the credit arrangement may be made payable out of:</text> <level label="i"> <text>the 1st proceeds of sale of the bonds; or</text> </level> <level label="ii"> <text>the tax or other revenue that the State unit has pledged to payment of the principal of and interest on the bonds.</text> </level> </level> <level label="2"> <text>For grant anticipation notes, the credit arrangement may be made payable out of the proceeds of the grant.</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-222" title_number="8" title_name="Debt" subtitle_number="2" subtitle_name="Debts of State Units"> <text>The following obligations are exempt from State and local taxation:</text> <level label="1"> <text>a bond or grant anticipation note issued under this part;</text> </level> <level label="2"> <text>a bond issued to pay the notes issued under item (1) of this section; and</text> </level> <level label="3"> <text>the interest on the obligations.</text> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-301" title_number="8" title_name="Debt" subtitle_number="3"> <level label="a"> <text>Except as provided in subsection (b) of this section or in other law, a contract to spend the proceeds of a general obligation loan that has been authorized by any act of the General Assembly may not be executed until the Board of Public Works approves the contract.</text> </level> <level label="b"> <level label="1"> <text>Approval by the Board of Public Works is not required if the act merely authorizes a county or municipal corporation to borrow money and no State funds are involved.</text> </level> <level label="2"> <text>Approval by the Board of Public Works is not required for a contract or other authorization to spend the proceeds of a general obligation loan for public school construction projects.</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-302" title_number="8" title_name="Debt" subtitle_number="3"> <level label="a"> <text>In this section, “bond” means an obligation of the State or of any of its units or instrumentalities.</text> </level> <level label="b"> <text>If a bond otherwise complies with the requirements of the Commercial Law Article for investment securities, the bond shall be considered to be an investment security notwithstanding that:</text> <level label="1"> <text>the resolution or other authority under which the bond is issued subjects the bond to an indenture or agreement that is separate from the resolution or authority;</text> </level> <level label="2"> <text>the resolution or other authority under which the bond is issued limits payment of principal and interest to:</text> <level label="i"> <text>the proceeds of limited sources of revenue; or</text> </level> <level label="ii"> <text>a special fund established for that purpose;</text> </level> </level> <level label="3"> <text>any law limits payment of principal and interest to a certain amount or rate of tax that may be imposed; or</text> </level> <level label="4"> <text>principal or interest are registrable.</text> </level> </level> <level label="c"> <text>A bond that is considered to be an investment security under subsection (b) of this section has all the attributes of an investment security that are possessed by a bond that is:</text> <level label="1"> <text>issued on the full faith and credit of the issuer;</text> </level> <level label="2"> <text>payable to bearer; and</text> </level> <level label="3"> <text>secured as to the payment of principal and interest by the unlimited taxing power of the issuer.</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-303" title_number="8" title_name="Debt" subtitle_number="3"> <level label="a"> <text>In this section, “enabling act” has the meaning stated in § 8–101 of this title.</text> </level> <level label="b"> <level label="1"> <text>Unless otherwise prohibited by law and subject to paragraph (2) of this subsection, an appropriation authorized by an enabling act may be used to reimburse a grant recipient for an expenditure incurred on or before the effective date of the enabling act.</text> </level> <level label="2"> <text>An appropriation may not be used to reimburse a grant recipient for an expenditure if the expenditure is not consistent with the public purpose of the appropriation.</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-304" title_number="8" title_name="Debt" subtitle_number="3"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Convention facility” has the meaning stated in § 10–601 of the Economic Development Article.</text> </level> <level label="3"> <text>“Institution of higher education” has the meaning stated in § 10–101 of the Education Article.</text> </level> </level> <level label="b"> <text>This section applies to a convention facility and a facility at an institution of higher education that receives State capital funding totaling at least $2,000,000 in the operating or capital budget bills in the prior fiscal year.</text> </level> <level label="c"> <text>Subject to subsection (d) of this section, on or before October 1 each year, the entity responsible for facilities maintenance for a facility specified in subsection (b) of this section shall submit a report in accordance with § 2–1257 of the State Government Article to the Senate Budget and Taxation Committee and the House Appropriations Committee on the entity’s deferred maintenance plan.</text> </level> <level label="d"> <text>The report required under subsection (c) of this section shall include:</text> <level label="1"> <text>the dollar amount that the entity spends per square foot on deferred maintenance;</text> </level> <level label="2"> <text>the total dollar value of the backlog for deferred maintenance;</text> </level> <level label="3"> <text>the process for facility condition assessment, including the process for rating and assessing deferred maintenance projects;</text> </level> <level label="4"> <text>the number of staff hours devoted to inspecting and analyzing the need for facility repair and maintenance; and</text> </level> <level label="5"> <text>the entity’s plan to address all deferred maintenance projects.</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-401" title_number="8" title_name="Debt" subtitle_number="4" subtitle_name="Capital Leases"> <text>The purpose of this subtitle is to codify the authority of the State Treasurer to enter into a capital lease agreement and to establish a method for financing a capital lease as defined in this subtitle.</text> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-402" title_number="8" title_name="Debt" subtitle_number="4" subtitle_name="Capital Leases"> <level label="a"> <text>In this subtitle the following terms have the meanings indicated.</text> </level> <level label="b"> <text>“Capital equipment” means any item of equipment that, by generally accepted accounting principles, is capitalized for purposes of accounting.</text> </level> <level label="c"> <level label="1"> <text>“Capital lease” means any lease, conditional sale, installment sale, or similar agreement, defined as a capital lease in accordance with generally accepted accounting principles, that is used to finance:</text> <level label="i"> <text>the acquisition or construction of improvements to real property, under § 3-602 of this article; or</text> </level> <level label="ii"> <text>the acquisition of capital equipment.</text> </level> </level> <level label="2"> <text>“Capital lease” includes a master lease.</text> </level> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-403" title_number="8" title_name="Debt" subtitle_number="4" subtitle_name="Capital Leases"> <level label="a"> <text>The State Treasurer, with the approval of the Board of Public Works, may enter into a capital lease on behalf of one or more units of State government.</text> </level> <level label="b"> <text>Prior to submission of a capital lease to the Board of Public Works, the Treasurer shall submit to the Legislative Policy Committee the total financing request and any supporting information. The Legislative Policy Committee has 45 days within which to review and provide written comments on the financing.</text> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-404" title_number="8" title_name="Debt" subtitle_number="4" subtitle_name="Capital Leases"> <text>A capital lease authorized under this subtitle:</text> <level label="1"> <text>shall be contingent on the availability of appropriated or other legally available funds, not including nonappropriated pension or retirement funds, that permit the timely payment of principal, interest, and other obligations, if any, imposed by the terms of the capital lease;</text> </level> <level label="2"> <text>may not be construed or deemed to be a debt of the State or a unit of State government; and</text> </level> <level label="3"> <text>may not constitute a pledge of the full faith and credit and taxing power of the State or a unit of State government.</text> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-405" title_number="8" title_name="Debt" subtitle_number="4" subtitle_name="Capital Leases"> <level label="a"> <text>Except for capital leases used to finance energy performance contracts excluded from tax supported debt under § 8–104 of this title, the Treasurer shall, at a reasonable market rate, capitalize the payments on a capital lease authorized under this subtitle on an annual basis for each fiscal year the lease is in effect.</text> </level> <level label="b"> <text>The greater of the amount determined for a given fiscal year under subsection (a) of this section or the amount of any purchase value at the termination of a capital lease authorized under this subtitle shall be included in the tax supported debt considered by the Capital Debt Affordability Committee in its annual estimate for that fiscal year under Subtitle 1 of this title.</text> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-406" title_number="8" title_name="Debt" subtitle_number="4" subtitle_name="Capital Leases"> <level label="a"> <level label="1"> <text>The State Treasurer may deposit the proceeds of a capital lease authorized under this subtitle in an escrow account or similar arrangement.</text> </level> <level label="2"> <text>The proceeds may be withdrawn for the purpose of making payment due under the terms of the capital lease.</text> </level> <level label="3"> <text>A withdrawal made under the provisions of this section shall be made in accordance with the terms of the individual contract.</text> </level> </level> <level label="b"> <text>The State Treasurer may invest any unexpended proceeds held in escrow and the investment income on the proceeds in obligations authorized for the investment of State funds under § 6-222 of this article.</text> </level> </section> <section article="gsf" article_name="State Finance and Procurement" number="8-407" title_number="8" title_name="Debt" subtitle_number="4" subtitle_name="Capital Leases"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Code” means the Internal Revenue Code of 1986 and includes regulations and rulings issued under that Code.</text> </level> <level label="3"> <level label="i"> <text>“Financial officer” means the secretary of the principal department that includes the appropriate unit or the head of the unit if the unit is an independent unit.</text> </level> <level label="ii"> <text>“Financial officer” includes the Treasurer and the Comptroller.</text> </level> </level> <level label="4"> <text>“Proceeds” means money received from the sale of a capital lease, and includes any money deemed to be proceeds of a capital lease under the Code.</text> </level> </level> <level label="b"> <text>The financial officer may establish and maintain funds and accounts for the administration, management, investment and accounting of proceeds, including any investment earnings on proceeds, that may be necessary or appropriate from time to time to comply with the Code and to establish or maintain the exclusion from gross income for federal income tax purposes of interest on a capital lease.</text> </level> <level label="c"> <level label="1"> <text>The financial officer may manage and invest proceeds, including any investment earnings on proceeds, in a manner so as to maintain the exclusion from gross income for federal income tax purposes of interest on a capital lease.</text> </level> <level label="2"> <text>The financial officer may restrict the yields on investments of proceeds if and to the extent necessary to maintain the exclusion from gross income for federal income tax purposes of interest on a capital lease.</text> </level> </level> <level label="d"> <text>The financial officer may prepare and maintain records of the receipt, deposit, investment, management, disbursement and application of proceeds, including any investment earnings on proceeds, that may be necessary or appropriate from time to time to comply with the Code and to maintain or verify the exclusion from gross income for federal income tax purposes of interest on a capital lease.</text> </level> <level label="e"> <level label="1"> <text>The financial officer may establish a separate rebate fund to be used to make any payments to the United States with respect to investment earnings on proceeds that may be required from time to time by the Code.</text> </level> <level label="2"> <text>There may be separate accounts within the rebate fund.</text> </level> <level label="3"> <text>Amounts deposited to the rebate fund shall be used only for the purpose of making rebate payments to the United States.</text> </level> <level label="4"> <text>The financial officer may make payments from the rebate fund as may be required from time to time in order to:</text> <level label="i"> <text>comply with the Code; and</text> </level> <level label="ii"> <text>maintain the exclusion from gross income for federal income tax purposes of interest on a capital lease.</text> </level> </level> <level label="5"> <text>Any excess money held in the rebate fund with respect to a capital lease after all required rebate payments for that capital lease have been made, as certified by the financial officer, shall be applied in a manner consistent with the Code.</text> </level> </level> <level label="f"> <text>The financial officer may prepare and file from time to time with the appropriate agency of the United States any forms, information, and reports with respect to each capital lease and the expenditure and investment of proceeds that may be required under the Code.</text> </level> <level label="g"> <text>The financial officer and other officers of a State unit may:</text> <level label="1"> <text>take any other or further actions;</text> </level> <level label="2"> <text>enter into any agreement or covenant regarding the use of proceeds, including any investment earnings on proceeds, the deposit of money to the rebate fund, and the making of rebate payments; and</text> </level> <level label="3"> <text>provide certifications of facts and estimates, that may be necessary or appropriate from time to time to comply with the Code and to establish or maintain the exclusion from gross income for federal income tax purposes of interest on a capital lease.</text> </level> </level> <level label="h"> <text>Nothing in this section shall prevent the Treasurer from entering into a capital lease the interest on which is not excludable from gross income for federal income tax purposes.</text> </level> </section>