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§ 5-602. Issuance of bonds

West's Annotated Code of MarylandEducationEffective: October 1, 2013

West's Annotated Code of Maryland
Education (Refs & Annos)
Division II. Elementary and Secondary Education [Titles 2-9.5] (Refs & Annos)
Title 5. Financing (Refs & Annos)
Subtitle 6. Authorization to Issue Bonds to Fund Public School Construction (Refs & Annos)
Effective: October 1, 2013
MD Code, Education, § 5-602
§ 5-602. Issuance of bonds
Currentness
Construction or improvement defined
(a) In this subtitle, “construction or improvement” means the planning, design, engineering, alteration, construction, reconstruction, enlargement, expansion, extension, improvement, replacement, rehabilitation, renovation, upgrading, repair, or capital equipping.
Bonds issued to finance costs of construction or improvement of public schools
(b) A county may issue bonds to finance any or all of the costs of construction or improvement of public schools in the county provided that the construction and improvement contracts and subcontracts comply with the requirements of Title 17, Subtitle 2 and Title 14 of the State Finance and Procurement Article if the requirements would otherwise be applicable.
Authorization of bonds
(c)(1) Bonds shall be authorized by a resolution of the governing body of the county.
(2) The resolution shall:
(i) Generally describe the public school construction or improvements to be financed through the sale of the bonds;
(ii) State the maximum principal amount of the bonds;
(iii) Describe the sources of repayment of the bonds;
(iv) State the maximum term of the bonds, which may not exceed 30 years; and
(v) Describe any terms or conditions under which the bonds may be redeemed before maturity.
Bond requirements
(d) The bonds shall:
(1) Be dated and bear interest at a rate specified in the resolution;
(2) Mature within 30 years of the date of issuance of the bonds;
(3) Be issued at, above, or below par value, for cash or other consideration;
(4) Be payable at a time, in the denomination, in registered form, within the meaning of § 19-204 of the Local Government Article, as specified in the resolution;
(5) Carry the registration and privileges as to conversion and for the replacement of mutilated, lost, or destroyed bonds, as specified in the resolution;
(6) Be payable in lawful money of the United States of America at a designated place;
(7) Be subject to the terms and conditions specified in the resolution; and
(8) Be sold in the manner, including private or negotiated sale, and upon the terms, specified in the resolution.
Agreements to enhance marketability or security for bonds
(e) The county may enter into agreements with agents, banks, fiduciaries, insurers, or others to:
(1) Enhance the marketability of and security for the bonds; or
(2) Secure any tender option granted to the holders of the bonds.
Signature of officer
(f) If any officer whose signature appears on a bond ceases to be an officer before delivery of the bonds, the signature is valid and sufficient for all purposes.
Exemptions from Sections 9, 10, and 11 of Article 31
(g) The bonds, their issue, and their sale may be exempt from the provisions of §§ 19-205 and 19-206 of the Local Government Article.
Use of net proceeds from sale of bonds
(h)(1) Except as provided in paragraph (2) of this subsection, the net proceeds of the sale of the bonds may only be applied to the construction or improvement of public school facilities, as described in the resolution authorizing the issuance of the bonds.
(2) If the net proceeds of the sale of any bonds exceeds the amount needed for the construction or improvement of the public school facilities, as described in the resolution, the excess funds shall be applied to:
(i) The payment of interest on the bonds;
(ii) The payment of the next principal maturity of the bonds;
(iii) The redemption of any part of the bonds that are redeemable before maturity; or
(iv) If authorized by a resolution issued by the governing body of the county, the construction or improvement of other public school facilities.
Bonds as negotiable instruments
(i) Bonds issued under this subtitle are negotiable instruments under the laws of this State.
Bond anticipation notes
(j) Before the preparation of bonds, the county may issue bond anticipation notes in accordance with Title 19, Subtitle 2, Part III of the Local Government Article.

Credits

Added by Acts 2004, c. 306, § 1, eff. July 1, 2004; Acts 2004, c. 307, § 1, eff. July 1, 2004. Amended by Acts 2013, c. 136, § 1, eff. Oct. 1, 2013.
MD Code, Education, § 5-602, MD EDUC § 5-602
Current through legislation effective through May 9, 2024, from the 2024 Regular Session of the General Assembly. Some statute sections may be more current, see credits for details.
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