In this title the following words have the meanings indicated. “Airport facility”: Has the meaning stated in § 5-101 of this article; and Includes any one or more or combination of air navigation facilities, as defined in § 5-101 of this article. “Bonds of prior issues” means: All “State highway construction bonds, second issue” and “State highway construction bonds, third issue” issued and sold under Article 89B of the Code of 1957; and All bonds issued and sold under Article 62B of the Code of 1957, evidencing the “Maryland Port Authority Loan of 1958”, “Maryland Port Authority Second Loan of 1961”, and “Maryland Port Authority Loan of 1967”. “Cost”, as applied to any transportation facility, includes the cost of and all expenses incident to the construction, reconstruction, acquisition, improvement, extension, alteration, modernization, planning, maintenance, and repair of the facility, including the cost and expenses of: All property acquired in connection with it; Financial, architectural, consulting, engineering, and legal services; Plans, specifications, surveys, estimates, feasibility reports, and direct and indirect labor, material, equipment, and administrative expenses; and Financing the facility, including financing charges and interest before, during, and for 1 year after completion of construction. “Debt service” means the amount annually needed to pay the maturing principal of and interest on bonds, notes, and other evidences of obligation and to meet sinking fund requirements for these purposes. In this definition, “highway” and “State highway system” have the meanings stated in § 8-101 of this article. “Highway facility” includes any one or more or combination of projects involving the rehabilitation and reconstruction of highways in the State highway system to meet present and future needs and the development and construction in new locations of new highways necessitated by traffic demands to become parts of the State highway system, including federally aided highway projects partially funded by this State and all incidental property rights, materials, facilities, and structures. “Outstanding and unpaid” does not include: Bonds purchased and held in sinking funds by or for the Department; or If the money for their payment or redemption has been provided: Matured bonds not presented for payment; or Bonds called for redemption but not presented for redemption. “Port facility” has the meaning stated in § 6-101 of this article. “Railroad facility” includes any one or more or combination of: Switches, spurs, tracks, structures, terminals, yards, real property, and other facilities useful or designed for use in connection with the transportation of persons or goods by rail; and All other appurtenances, including locomotives, cars, vehicles, and other instrumentalities of shipment or carriage, useful or designed for use in connection with the transportation of persons or goods by rail. “Railroad facility” does not include any transit facility. “Refunding” means the retirement and cancellation of bonds, including bonds of prior issues, after their acquisition by or for the Department, whether before, at, or after maturity, either in exchange for other bonds or by payment, purchase, or redemption with the proceeds of the sale of other bonds. “Transit facility” includes any one or more or combination of tracks, rights-of-way, bridges, tunnels, subways, rolling stock, stations, terminals, ports, parking areas, equipment, fixtures, buildings, structures, other real or personal property, and services incidental to or useful or designed for use in connection with the rendering of transit service by any means, including rail, bus, motor vehicle, or other mode of transportation but does not include any railroad facility. “Transportation facility” includes any one or more or combination of: Airport facilities; Highway facilities; Port facilities; Railroad facilities; and Transit facilities.

As to bonds of prior issues: Every resolution, rule, regulation, form, order, and directive adopted by or relating to the former Maryland Port Authority or adopted by or relating to the State Roads Commission remains in effect until changed by the Department; and Every reference in this Code, any other law, ordinance, resolution, rule, regulation, order, directive, legal action, contract, or any other document to the Maryland Port Authority or the State Roads Commission means the Department.

In this section the following words have the meanings indicated. “Bonds” means bonds, notes, or other evidences of obligation issued by the Department, including both consolidated transportation bonds and county transportation bonds. “Code” means the Internal Revenue Code and includes regulations and rulings issued under that Code. “Proceeds” means moneys received from the sale of the Department’s bonds, and includes any moneys deemed to be proceeds of the Department’s bonds under the Code. The Secretary, 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 the Department’s bonds. The Secretary and 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 the Department’s bonds. The Secretary and 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 the Department’s bonds. The Secretary, 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 the Department’s bonds. The Secretary, the Treasurer, and the Comptroller 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 Secretary, the Treasurer, and the Comptroller 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 the Department’s bonds. Any excess moneys held in the rebate fund with respect to an issue of the Department’s bonds after all required rebate payments for that issue have been made, as certified by the Secretary and the Treasurer, shall be applied in compliance with the Code. The Secretary, 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 the Department’s bonds and the expenditure and investment of proceeds that may be required under the Code. As 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 Department’s bonds, the Secretary, the Treasurer, and the Comptroller shall each: Take any other or further actions; Enter into any agreement or covenant regarding the use of proceeds, including any investment earnings on proceeds, the deposit of moneys to the rebate fund and the making of rebate payments; and Provide certifications of facts and estimates. This section does not prevent the Board of Public Works and the Department from authorizing the issuance and sale of the Department’s bonds the interest on which is not excludable from gross income for federal income tax purposes.

In this section the following words have the meanings indicated. “Credit instrument” means a letter of credit, bond insurance policy, guaranty, line of credit, surety bond, or similar agreement or commitment securing an issue of consolidated transportation bonds or county transportation bonds. “Credit instrument provider” means an issuer of a credit instrument the unsecured indebtedness of which, or indebtedness insured by which, is rated on the date of issuance of the credit instrument by a nationally recognized rating agency in 1 of its 2 highest rating categories. “Maximum annual debt service” means, as of any particular date of computation: With respect to an issue of consolidated transportation bonds, the greatest amount required in the then current or any future calendar year to pay the principal of and interest on the bonds of that issue; and With respect to an issue of county transportation bonds, the greatest amount required in the then current or any future fiscal year to pay the principal of and interest on the bonds of that issue. With respect to an issue of consolidated transportation bonds sold after June 1, 1989, the Secretary may provide in the resolution authorizing the issuance of the bonds that there shall be deposited in the sinking fund maintained under § 3–215(c) of this title only the amounts of the proceeds of the taxes levied and imposed under § 3–215 of this title that may be required from time to time to pay the principal of and interest on the bonds, as and when due, and that holders of bonds of that issue shall have no right to receive payment from any other amounts deposited or maintained in the sinking fund. The Secretary may, at his discretion, determine that: There shall be deposited with or held for the paying agent for the bonds a credit instrument under which the credit instrument provider is obligated to pay an amount at least equal to the maximum annual debt service on the bonds of that issue; or The bonds shall be issued without a credit instrument if, in the Secretary’s judgment, the absence of a credit instrument will not adversely affect the credit rating of the bonds. With respect to an issue of county transportation bonds sold after June 1, 1989, the Secretary may provide in the resolution authorizing the issuance of the bonds that there shall be withheld and deposited in the sinking fund maintained under § 3–307(b) of this title from funds allocable to the county under Title 8, Subtitle 4 of this article only the amounts that may be required from time to time to pay debt service on the bonds, as and when due, and that holders of bonds of that issue shall have no right to receive payment from any other amounts deposited or maintained in the sinking fund. The Secretary may, at his discretion, determine that: There shall be deposited with or held for the paying agent for the bonds a credit instrument under which the credit instrument provider is obligated to pay an amount at least equal to the maximum annual debt service on the bonds of that issue; or The bonds shall be issued without a credit instrument if, in the Secretary’s judgment, the absence of a credit instrument will not adversely affect the credit rating of the bonds. The sinking fund requirements established for consolidated transportation bonds and county transportation bonds sold before June 1, 1989 shall remain unchanged so long as those bonds are outstanding and unpaid as if this section had not been enacted.