By one or more resolutions of the Secretary, the Department may: Finance the cost of transportation facilities; Borrow money from time to time for that purpose; and Evidence the borrowing by the issuance and sale of bonds, notes, or other evidences of obligation on the terms, conditions, and limitations contained in this subtitle.

The Department from time to time may issue its bonds on behalf of this State to finance the cost of any one or more or combination of transportation facilities. The bonds shall be known as “consolidated transportation bonds” and may be issued in any amount as long as the aggregate outstanding and unpaid principal balance of these bonds and bonds of prior issues does not exceed at any one time the sum of $5,000,000,000. The preferred method of issuance of the Department’s consolidated transportation bonds is by a public, competitive sale. The Department may issue its consolidated transportation bonds at a private, negotiated sale provided that: The Secretary determines that extraordinary credit market conditions exist that warrant the use of this method rather than a public, competitive sale; and The Secretary determines that the terms and conditions, including price, interest rates, and payment dates, that can be achieved by a private negotiated sale are more advantageous to the State. The maximum outstanding and unpaid principal balance of consolidated transportation bonds and bonds of prior issues as of June 30 for the next fiscal year: Shall be established each year by the General Assembly in the State budget; and May not exceed the limit established in subsection (b) of this section.

The resolution authorizing the issuance of consolidated transportation bonds shall: Describe generally the transportation facilities the cost of which is proposed to be financed by the sale of bonds; State the estimated cost of financing these facilities; and Determine and specify: The date or dates of issue; The date or dates and amount or amounts of maturities, which need not be in equal principal amounts or consecutive annual installments; The rate or rates of interest payable on the bonds, or the manner of determining the rate or rates of interest, and the date or dates of payment of interest; The tenor, form or forms, denomination or denominations, manner of execution, and place or places of payment of the principal of and interest on the bonds, which may be at any bank or trust company within or without this State; Whether the bonds are to be issued in coupon or registered form or both and whether provision is to be made for the registration of the principal only of coupon bonds, for the reconversion of fully registered bonds into coupon form, and for the replacement of bonds that are mutilated, lost, or destroyed; Whether the bonds are to be sold at a public, competitive sale or a private, negotiated sale, as determined by the Secretary; If the bonds are to be sold at a public sale, the form of notice of sale, which shall outline the terms and conditions of the sale; The form of advertisement, which shall be published at least once in a journal having a circulation among banks and investment bankers, the publication of which shall be made not less than 10 days before the sale of bonds; Whether all or any part of the bonds are redeemable before maturity and, if so, the terms, conditions, and prices of redemption; and Any other matter relating to the form, terms, conditions, issuance, sale, and delivery of the bonds. The resolution may provide that the Secretary may postpone the time for receipt of proposals for the bonds without republishing the form of advertisement for the bonds. The Secretary 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. The notice may be given by Munifacts News Service or a similar service or such other method as the Secretary deems appropriate.

Consolidated transportation bonds shall be executed on behalf of the Department by the manual or facsimile signature of the Secretary. Other signatures on the bonds may be either manual or facsimile. If an individual whose manual or facsimile signature appears on any consolidated transportation bond or coupon ceases to serve in an authorized capacity before the delivery of the bond, the signature nevertheless is as valid and sufficient for all purposes as if the individual had remained in that capacity until delivery of the bond.

Notwithstanding any other provision of law or any recitals in the instruments, the bonds, notes, and other evidences of obligation issued under this subtitle are investment securities under the laws of this State.

The bonds, notes, and other evidences of obligation issued under this subtitle and their issuance and sale are exempt from the provisions of §§ 8-206 and 8-208 of the State Finance and Procurement Article.

Each issue of consolidated transportation bonds shall be approved before sale by resolution of the Board of Public Works.

The Department from time to time may issue its refunding bonds for refunding any consolidated transportation bonds or bonds of prior issues. The powers granted and limitations imposed in this subtitle as to the issuance of consolidated transportation bonds also apply to the issuance of refunding bonds. The State Treasurer shall segregate and set apart the proceeds of the sale of any refunding bonds in a separate trust fund to be used only to pay the purchase or redemption prices of the bonds to be refunded.

Before the preparation of definitive bonds, the Department may issue its interim certificates or temporary bonds, with or without coupons, exchangeable for definitive bonds when the definitive bonds have been executed and are available for delivery.

The Department may issue its bond anticipation notes, payable to the bearer or registered holder of the notes out of the first proceeds of the next sale of consolidated transportation bonds. The resolution authorizing the issuance of bond anticipation notes may provide for the issuance of these notes in series, as funds are required, and for the renewal of these notes at maturity, with or without resale. The issuance of bond anticipation notes, the details of their issuance, the rights of their holders, and the rights, duties, and obligations of the Department with respect to them are governed by the provisions of this subtitle relating to the issuance of the bonds in anticipation of the sale of which the notes are issued, insofar as those provisions may be applicable.

With the approval of the Board of Public Works, the Department may borrow money in anticipation of its receipt of current revenues and evidence the borrowing by issuing its revenue anticipation notes. The revenue anticipation notes shall be payable, as to both principal and interest, only from current revenues when received and deposited in the Transportation Trust Fund, subject to the prior use and application of the revenues to meet the debt service on all outstanding and unpaid bonds payable from the revenues in the Transportation Trust Fund and to pay all funds due to the political subdivisions of this State. The procedure for the issuance of revenue anticipation notes is the same as that applicable to the issuance of consolidated transportation bonds, except that these notes may be issued and sold by private negotiation. A revenue anticipation note may not be issued to mature later than 6 months after the date of its issue.

The bonds, notes, and other evidences of obligation issued under this subtitle, their transfer, the interest payable on them, and any income derived from them, including any profit realized in their sale or exchange, shall be exempt at all times from every kind and nature of taxation by this State or by any of its political subdivisions, municipal corporations, or public agencies of any kind.

The bonds, notes, and other evidences of obligation issued under this subtitle are not and may not be considered to constitute a debt or a pledge of the faith and credit of the State of Maryland, but shall be payable, as to both principal and interest, only from the proceeds of the tax and other revenues levied, imposed, pledged, or made available for that purpose.

The State of Maryland covenants with the holders of all consolidated transportation bonds that the power of the Department to issue or sell general or special obligation bonds, notes, or other evidences of obligation under Articles 62B and 89B of the Code of 1957 has terminated.

For the purpose of paying the principal of and interest on consolidated transportation bonds as they become due and payable, there is hereby levied and imposed an annual tax that consists of the taxes specified in this section and, to the extent necessary and except as otherwise provided in this subsection, that shall be used and applied exclusively for that purpose. The required use and application of the tax under paragraph (1) of this subsection is subject only to the prior use and application of one or all or any combination of the taxes specified in this section to meet the debt service on all of the following bonds while they are outstanding and unpaid and to the payment of which any part of those taxes has been pledged: Bonds of prior issues; and Bonds of any series of county transportation bonds issued under Subtitle 3 of this title. The tax levied and imposed by this section consists of that part of the following taxes that are retained to the credit of the Department after distributions to the political subdivisions: The motor fuel tax revenue distributed under §§ 2–1103(2), 2–1103(3), and 2–1104(a)(3) of the Tax – General Article; The motor fuel tax revenue attributable to the sales and use tax equivalent rate imposed under § 9–306 of the Tax – General Article and distributed under § 2–1103(4) of the Tax – General Article; The income tax revenue distributed under § 2–614 of the Tax – General Article; The excise tax imposed on vehicles by Part II of Title 13, Subtitle 8 of this article; The sales and use tax revenues distributed under § 2–1302.1 of the Tax – General Article; and The transportation network company impact fee revenues allocated under § 3–216(d)(5)(i)1 of this subtitle. As long as any consolidated transportation bonds are outstanding and unpaid, and except as provided in § 3–104 of this title, there shall be deposited and maintained in a sinking fund to be maintained by the State Treasurer to secure the payment of the principal of and interest on the bonds, annually or more often, as received, so much of the proceeds of the tax levied and imposed under this section, together with all other funds received by the Department and credited to the Transportation Trust Fund, as are necessary to maintain in the sinking fund a sum equal to the amount required to pay the principal of and interest on the outstanding and unpaid bonds that will become due and payable in the current calendar year and the next succeeding calendar year. The tax levied and imposed by this section is irrevocably pledged to the payment of the principal of and interest on consolidated transportation bonds as they become due and payable, and no part of the tax or other funds applicable to debt service on the bonds may be repealed, diminished, or applied to any other purpose until: The bonds and the interest on them have become due and fully paid; or Adequate and complete provision for payment of the principal and interest has been made. In this subsection “government obligations” means direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by the United States of America. Adequate and complete provision for payment of the principal and interest of any issue or series of consolidated transportation bonds may be made by the Secretary and the State Treasurer by making a transfer of government obligations from the Transportation Trust Fund to the State Treasurer or to a bank or trust company as escrow fund agent in an amount which, together with the income due thereon, will be sufficient to pay in full when due the maturing principal of and interest on the consolidated transportation bonds. To the extent that adequate and complete provision has been made for the payment of consolidated transportation bonds under this title those bonds shall no longer be deemed to be outstanding and unpaid under this title.

There is a Transportation Trust Fund for the Department. Except as otherwise expressly provided by statute, there shall be credited to the Transportation Trust Fund for the account of the Department all taxes, fees, charges, and revenues collected or received by or paid, appropriated, or credited to the account of the Department or any of its units in the exercise of their rights, powers, duties, or obligations, including the cash proceeds of the sale of consolidated transportation bonds, notes, or other evidences of obligation issued by the Department, any General Fund appropriations, and the proceeds of any State loan or federal grant made for transportation purposes. There shall be maintained in the Transportation Trust Fund one or more sinking fund accounts to which shall be credited and from which shall be paid, from the proceeds of the taxes levied and imposed for that purpose or from any other funds of the Department, amounts sufficient at all times to meet the debt service on all bonds of prior issues and consolidated transportation bonds from time to time outstanding and unpaid. The Gasoline and Motor Vehicle Revenue Account, the Motorcycle Safety Program Account, and the Transportation Network Company Impact Fee Account shall be maintained in the Transportation Trust Fund. In each fiscal year, the Department shall budget from federal funds available to the Department, other funds in the Transportation Trust Fund, and any other funds available to the Department, an amount sufficient to fund projects and programs determined by the Secretary to be necessary to achieve the bicycle and pedestrian transportation goals identified for the fiscal year under Title 2, Subtitle 6 of this article. After meeting its debt service requirements, the Department may use the funds in the Transportation Trust Fund for any lawful purpose related to the exercise of its rights, powers, duties, and obligations. Expenditures under this subsection shall be made in accordance with any appropriation provided for in any applicable budget bill or supplementary appropriation bill. However, an appropriation proposed to be made to any unit in the Department or proposed to be made for any designated transportation activity, function, or undertaking that has been reduced by the General Assembly may not be restored, for the same purpose as originally proposed, except in an emergency, by the budget amendment procedure of § 7–209 of the State Finance and Procurement Article, or otherwise if the General Assembly in striking or reducing the appropriation, prohibited its restoration. However, except for emergency capital projects, if the General Assembly explicitly reduces in the budget bill an appropriation proposed for a major capital project as defined in § 2–103.1(a)(4) of this article, the appropriation may not be restored for the same purpose as originally proposed by the budget amendment procedure of § 7–209 of the State Finance and Procurement Article or otherwise unless the General Assembly, in striking or reducing the appropriation, expressly authorized its restoration. For each fiscal year, the Department shall use the funds in the Transportation Trust Fund for the purposes specified in subsection (c)(2)(ii) of this section, which may include construction and maintenance of: Public bicycle areas as defined in § 21–101(o) of this article; Bicycle ways as defined in § 21–101(d) of this article; and Sidewalks as defined in § 21–101(w) of this article. Each year, before the General Assembly considers the proposed Maryland Transportation Plan and the Consolidated Transportation Program, the Department shall report to the General Assembly, in accordance with § 2–1257 of the State Government Article, on: The expenditures made toward the attainment of the bicycle and pedestrian transportation goals during the preceding fiscal year under Title 2, Subtitle 6 of this article; and The progress made toward attainment of the bicycle and pedestrian transportation goals identified for the fiscal year under Title 2, Subtitle 6 of this article. The Department shall allocate the funds in the Transportation Network Company Impact Fee Account for the following purposes, in the manner the Department determines is appropriate: Capital needs identified in the assessment conducted under § 7–309 of this article; and Distribution to counties and municipalities for the purposes specified in § 8–408 of this article. If any funds remain in the Transportation Network Company Impact Fee Account after the allocations under subparagraph (i) of this paragraph, the Department shall allocate the remaining fund balance to the Locally Operated Transit System Grant Program under § 4–322 of this article. Except as otherwise provided in this subsection, this section is effective notwithstanding any other provision of law. Nothing in this section may adversely affect in any way the security of any of the following bonds while they are outstanding and unpaid: State highway construction bonds, second issue; State highway construction bonds, third issue; County highway construction bonds; or County highway construction bonds, second issue. It is the intent of the General Assembly that, as long as any of the bonds listed in paragraph (2) of this subsection are outstanding and unpaid: The sinking fund requirements established for the payment of the principal of and interest on those bonds shall remain unchanged, as if this section had not been enacted; and The taxes and revenues pledged to the payment of the principal of and interest on those bonds as they become due and payable may not be repealed, diminished, or applied to any other purpose until: The bonds and the interest on them have become due and fully paid; or Adequate and complete provision for payment of the principal and interest has been made. Except as provided in paragraphs (3) and (6) of this subsection, no part of the Transportation Trust Fund may be transferred or diverted to the General Fund of the State unless approved by the General Assembly through legislation passed by a three–fifths majority vote of the full standing committee assigned the legislation in each of the two Houses of the General Assembly and enacted into law. Except as provided in paragraphs (3) and (6) of this subsection, no part of the Transportation Trust Fund may be transferred or diverted to a special fund of the State, unless approved by the General Assembly through legislation passed by a three–fifths majority vote of the full standing committee assigned the legislation in each of the two Houses of the General Assembly and enacted into law. No part of the Transportation Trust Fund may be transferred or diverted to a special fund of the State pursuant to the provisions of § 7–209(e)(2) of the State Finance and Procurement Article, unless the requirements of this paragraph have been satisfied. Funds in the Transportation Trust Fund may be used for defense or relief purposes only if: The State is invaded by land, sea, or air or a major catastrophe occurs; and The Governor: Proclaims a State of Emergency; and Declares that the use of the funds for defense or relief purposes is necessary for the immediate preservation of the public health or safety. Before the enactment of legislation under paragraph (1) or (2) of this subsection or the issuance of an emergency declaration under paragraph (3) of this subsection to transfer or divert funds from the Transportation Trust Fund to the General Fund or a special fund, the Treasurer shall advise the Governor and the General Assembly of the potential impact of the transfer or diversion on the credit rating of bonds or other debt instruments issued by the Department. Before the enactment of legislation under paragraph (1) or (2) of this subsection or the issuance of an emergency declaration under paragraph (3) of this subsection to transfer or divert funds from the Transportation Trust Fund to the General Fund or a special fund, a determination shall be made of the potential impact of the transfer or diversion on the additional bonds test set forth in the Secretary’s resolution and the credit rating of bonds or other debt instruments issued by the Department. A transfer or diversion may not occur if it is determined that the transfer or diversion would: Cause the Department to fail the additional bonds test; or Result in a downgrade of the Department’s bonds. This subsection does not apply to a distribution of highway user revenues to counties, municipalities, and Baltimore City under § 8–403 of this article. This subsection applies only to a bill or an amendment that would: Reduce any tax or fee that otherwise would be credited to the Transportation Trust Fund; or Increase transportation aid to local governments by using funds from the Transportation Trust Fund. When submitting a proposed bill or amendment for introduction in the General Assembly on behalf of the Administration, an executive department, or any other unit of State government, the Governor shall provide to the General Assembly, in accordance with § 2–1257 of the State Government Article, a detailed analysis of the effect the proposed bill or amendment will have on the Transportation Trust Fund and the funding of projects specified in the Consolidated Transportation Program, including an analysis of whether the reduction of available funds will result in the elimination of any project or the alteration of the scope, design, or scheduling of any project.

Any funds in the Transportation Trust Fund transferred or diverted from that Fund to the General Fund or a special fund shall be repaid within 5 years after the transfer or diversion as follows: At least 10 percent of a transfer or diversion in a fiscal year shall be repaid in the first fiscal year after the transfer or diversion; A cumulative total of at least 30 percent of a transfer or diversion in a fiscal year shall be repaid within 2 fiscal years after the transfer or diversion; A cumulative total of at least 55 percent of a transfer or diversion in a fiscal year shall be repaid within 3 fiscal years after the transfer or diversion; A cumulative total of at least 80 percent of a transfer or diversion in a fiscal year shall be repaid within 4 fiscal years after the transfer or diversion; and A cumulative total of 100 percent of a transfer or diversion in a fiscal year shall be repaid within 5 fiscal years after the transfer or diversion. This section does not apply to a distribution of highway user revenues to counties, municipalities, and Baltimore City under § 8–403 of this article.