Title 3. Financing by Department — Subtitle 6. Special Bonds and Borrowings
Statutes in effect as of October 1, 2026.
Md. Code Ann., Transp. § 3-601 (2026)
Title 3. Financing by Department
Subtitle 6. Special Bonds and Borrowings
§ 3–601LinkCopy Citation
(a)
In order to utilize to the greatest extent possible the benefits of available financial resources relating to transportation purposes, including federal grants, loans, transportation facility revenue sources, and other programs, the Department from time to time may issue its bonds and otherwise borrow funds, as provided in this subtitle, to finance the costs of transportation facilities.
(b)
The Department may apply for any financial assistance in support of projects deemed appropriate by the Secretary.
(c)
The Department may undertake the following actions and do all things necessary and appropriate consistent with such actions to utilize the available resources specified in subsection (a) of this section:
(1)
Pledge and use existing and anticipated federal funds paid to or expected to be paid to the Department for transportation purposes for the payment of the principal of and interest on the Department’s bonds or other debt obligations issued under this subtitle to finance the costs of transportation facilities; and
(2)
(i)
Borrow funds from the federal government or its agencies, and evidence such borrowing with a promissory note or other evidence of obligation;
(ii)
Borrow funds from a nongovernment lender if the loan is guaranteed by the federal government or its agencies; and
(iii)
(1)
Use the proceeds of the loans described in items (i) and (ii) of this paragraph in connection with transportation facilities including use of the proceeds to pay the costs of financing transportation facilities and the payment of debt service on the Department’s bonds issued in connection with such transportation facilities;
(2)
Repay the loans with revenues attributable to the transportation facilities being financed; and
(3)
Pledge revenues attributable to the transportation facilities being financed in order to secure the Department’s obligations to the federal government or its agencies or a nongovernment lender in connection with the loans.
(d)
If the Department intends to pledge any future federal aid from any source to support repayment of bonds issued under this subtitle:
(1)
The aggregate outstanding and unpaid principal amount of debt issued under this subtitle or Title 4, Subtitle 3 of this article that is secured by a pledge of future federal aid may not exceed $1,000,000,000 as of June 30 of any fiscal year, provided that the proceeds may be used only for:
(i)
Designing and constructing the Baltimore Red Line;
(ii)
Procuring zero–emission buses consistent with § 7–406 of this article and constructing related infrastructure, including bus maintenance facilities;
(iii)
Developing and constructing the Southern Maryland Rapid Transit Corridor;
(iv)
Designing and constructing improvements to the Maryland Route 2 and Route 4 corridor, including the Thomas Johnson Bridge;
(v)
Designing and constructing improvements to the Maryland Route 90 corridor;
(vi)
Designing and constructing improvements to the Interstate 81 corridor; or
(vii)
Major rehabilitation of the existing light rail system, including replacement light rail vehicles and related station and maintenance facility improvements;
(2)
The date of maturity may not be later than 15 years after the date of issue; and
(3)
No part of the tax levied under § 3–215 of this title may be repealed, diminished, or applied to any other purpose until:
(i)
The bonds issued under this subtitle and interest on them have become due and fully paid; or
(ii)
Adequate and complete provision for payment of the principal and interest has been made.
(e)
(1)
By resolution of the Secretary, the Department may:
(i)
Borrow funds to finance the costs of transportation facilities;
(ii)
Evidence the borrowing by the issuance and sale of revenue–backed bonds; and
(iii)
Pledge and use a dedicated revenue source, which may include revenues attributable to the transportation facilities being financed, for the payment of the principal of and interest on the Department’s revenue–backed bonds described in this subsection.
(2)
Payment of the principal of or interest on revenue–backed bonds issued under this subtitle may not be supported directly or indirectly by State tax revenues pledged to meet debt service on Consolidated Transportation Bonds as prescribed under § 3–215 of this title.
Md. Code Ann., Transp. § 3-602 (2026)
Title 3. Financing by Department
Subtitle 6. Special Bonds and Borrowings
§ 3–602LinkCopy Citation
(a)
Bonds issued by the Department under this subtitle shall be known as “special transportation project revenue bonds”.
(b)
A resolution authorizing the issuance of special transportation project revenue bonds shall:
(1)
Describe generally the transportation facilities to be financed by the sale of bonds;
(2)
State the estimated cost of financing these transportation facilities; and
(3)
With respect to the bonds, specify:
(i)
The date of issue;
(ii)
The date of each maturity, which may not be later than 30 years after the date of issue;
(iii)
The amount of each maturity, which need not be in equal principal amounts or consecutive annual installments;
(iv)
The rate of interest payable on the bonds, or the manner of determining the rate of interest, and the date or dates of payment of interest;
(v)
The tenor, form, denomination, manner of execution, and place of payment of the principal of and interest on the bonds, which may be at any bank or trust company within or without the State;
(vi)
Whether the bonds are to be issued in coupon, registered or book entry form 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;
(vii)
Whether the bonds are to be sold at public or private sale, as determined by the Secretary;
(viii)
If the bonds are to be sold at public sale:
(1)
The form of notice of sale, which shall outline the terms and conditions of the sale; and
(2)
The form of advertisement of a summary notice of sale, which shall be published at least once in an appropriate newspaper of general circulation as determined by the Secretary;
(ix)
Whether all or any part of the bonds are redeemable before maturity and any terms, conditions, and prices of redemption; and
(x)
Any other matter relating to the form, terms, conditions, issuance, sale, and delivery of the bonds.
(c)
(1)
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.
(2)
(i)
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.
(ii)
The notice may be given by TM3 News Service or a similar service or any other method that the Secretary deems appropriate.
(d)
(1)
Special transportation project revenue bonds shall be executed on behalf of the Department by the manual or facsimile signature of the Secretary.
(2)
Other signatures on the bonds may be either manual or facsimile.
(3)
If an individual whose manual or facsimile signature appears on any 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.
(e)
Forty-five days before each issuance of bonds under this section, the Department must report the proposed issuance to the Legislative Policy Committee for review and comment.
(f)
Each issue of special transportation project revenue bonds shall be approved before sale by resolution of the Board of Public Works.
Md. Code Ann., Transp. § 3-603 (2026)
Title 3. Financing by Department
Subtitle 6. Special Bonds and Borrowings
§ 3–603LinkCopy Citation
(a)
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.
(b)
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.
Md. Code Ann., Transp. § 3-604 (2026)
Title 3. Financing by Department
Subtitle 6. Special Bonds and Borrowings
§ 3–604LinkCopy Citation
(a)
The Department from time to time may issue its refunding bonds for refunding any special transportation project revenue bonds.
(b)
The powers granted and limitations imposed in this subtitle as to the issuance of special transportation project revenue bonds also apply to the issuance of refunding bonds.
(c)
The State Treasurer shall segregate 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.
Md. Code Ann., Transp. § 3-605 (2026)
Title 3. Financing by Department
Subtitle 6. Special Bonds and Borrowings
§ 3–605LinkCopy Citation
(a)
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.
(b)
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 special transportation project revenue bonds.
(c)
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.
(d)
The issuance of bond anticipation notes, the details of issuance, the rights of their holders, and the rights, duties, and obligations of the Department with respect to the bond anticipation notes 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.
Md. Code Ann., Transp. § 3-606 (2026)
Title 3. Financing by Department
Subtitle 6. Special Bonds and Borrowings
§ 3–606LinkCopy Citation
(a)
(1)
Bonds issued under this subtitle may be secured by a trust agreement between the Department and a corporate trustee, which may be any trust company or bank having trust powers within or without the State.
(2)
The trust agreement may pledge or assign:
(i)
All or any part of the existing and anticipated federal funds paid to or expected to be paid to the Department for transportation purposes; or
(ii)
Revenue from a dedicated revenue source, which may include revenues attributable to the transportation facilities being financed.
(3)
The trust agreement may not pledge or assign any State tax revenues pledged to meet debt service on Consolidated Transportation Bonds as prescribed under § 3–215 of this title.
(b)
Any trust agreement or bond authorizing resolution may:
(1)
Contain provisions for the protection and enforcement of the rights and remedies of bondholders as are considered reasonable and proper, including covenants setting forth the duties of the Department as to the financing or development of any transportation facility, the extension, enlargement, improvement, maintenance, operation, repair, and insurance of the transportation facility, and the custody, safeguarding, and application of money;
(2)
Provide for the employment of consulting engineers in connection with the construction or operation of any transportation facility;
(3)
Set forth the rights and remedies of the bondholders and of the trustee;
(4)
Restrict the individual right of action by bondholders; and
(5)
Contain any other provisions that the Department considers reasonable and proper for the security of the bondholders.
(c)
All expenses incurred in carrying out the trust agreement may be treated as a part of the cost of the operation of the transportation facility in connection with which the bonds have been issued.
(d)
The proceeds of the sale of bonds shall be paid to the trustee under the trust agreement securing the bonds and shall be disbursed in the manner and under the restrictions, if any, provided in the trust agreement.
(e)
Any bank or trust company incorporated under the laws of this State that acts as depositary of the proceeds of the bonds or of revenues may furnish any indemnifying bonds or pledge any securities that the Department requires.
Md. Code Ann., Transp. § 3-607 (2026)
Title 3. Financing by Department
Subtitle 6. Special Bonds and Borrowings
§ 3–607LinkCopy Citation
(a)
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 from taxation by this State or by any of its political subdivisions, municipal corporations, or public agencies.
(b)
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 revenues pledged or made available under this subtitle for this purpose.
(c)
The Department’s pledge of revenues and funds to secure its bonds, notes, and other evidences of obligation issued under this subtitle, shall be valid and binding against any person having a claim against the Department, and shall have priority over any such claim, regardless of whether the person has notice of the Department’s pledge.
(d)
Notwithstanding any other provision of law, the Department is only required to file or record in the records of the Department any resolution, trust agreement, or other instrument that creates a lien on, a security interest in, or an assignment of:
(1)
Any revenues;
(2)
Any rights to receive revenues; or
(3)
Any moneys or securities in the funds and accounts pledged to the bonds, notes, or other evidence of obligation of the Department.