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The county is hereby authorized, by resolution of the council, to borrow the sums from time to time upon its faith and credit as may be needed to cover the cost of reconstructing, replacing, repairing, or paying insurable losses, as that term is defined in this article, and to issue negotiable certificates of indebtedness therefor; provided, that the amount of certificates of indebtedness issued pursuant to this article and outstanding at any one (1) time must not exceed ten million dollars ($10,000,000.00). (Mont. Co. Code 1965, § 5-3; 1978 L.M.C., ch. 36, § 1; 1986 L.M.C., ch. 44, § 1.)
Certificates of indebtedness:
(1) Must be in fully registered form;
(2) May be issued in denominations of one hundred dollars ($100.00) or any multiple of one hundred dollars ($100.00);
(3) Must bear interest at the rate or rates and be payable as to principal and interest at the times that the county executive determines, provided that the certificates must not mature later than ten (10) years after date of issuance; and
(4) May be exempt from all state, county and city taxation of every kind and nature whatsoever in the state. (Mont. Co. Code 1965, § 5-4; 1969 L.M.C., ch. 37, § 1; 1978 L.M.C., ch. 36, § 1; 1986 L.M.C., ch. 44, § 1.)
Certificates of indebtedness must be designated as "Montgomery County self-insurance certificates of indebtedness" and may be sold from time to time and must be sold in the manner as the county executive determines; provided, that the same must not be sold at less than par and accrued interest. (Mont. Co. Code 1965, § 5-5; 1978 L.M.C., ch. 36, § 1; 1986 L.M.C., ch. 44, § 1.)
Upon issuance, the proceeds of certificates of indebtedness must be set aside from other county funds and used and applied only for payment of the costs of reconstructing, replacing, repairing, or paying insurable losses as defined in this article and the cost of printing and delivering and other expenses of issuance of the certificates of indebtedness, and any other incidental expenses, and the reimbursement of the general tax receipts of the county or participating agency for any money previously expended therefrom to cover the cost of the insurable losses. Any balance of the proceeds, together with any part of the sum so set aside which is not required for payment of the cost of the insurable losses, must be promptly applied to the payment of the certificates of indebtedness as they become due. (Mont. Co. Code 1965, § 5-6; 1978 L.M.C., ch. 36, § 1; 1986 L.M.C., ch. 44, § 1.)
All certificates of indebtedness are and shall be issued upon the full faith and credit of the county, which is hereby pledged to the punctual payment of the principal thereof and interest thereon, and they shall be payable from unlimited ad valorem taxes levied upon all assessable property within the corporate limits of the county and the resolution of the council authorizing the issuance of such certificates shall so provide. In each and every fiscal year that any such certificates are or will be outstanding, the county and the council shall levy or cause to be levied ad valorem taxes upon all the assessable property within the corporate limits of the county in rate and amount sufficient to provide for the payment, when due, of the interest and principal of all such certificates becoming due in such fiscal year. In the event the proceeds from the taxes levied in any such fiscal year shall prove inadequate for such payment, additional taxes shall be levied in the succeeding fiscal year to make up any such deficiency. (Mont. Co. Code 1965, § 5-8; 1978 L.M.C., ch. 36, § 1.)
All certificates of indebtedness shall have, and are hereby declared to have, as between successive holders, all the qualities and incidents of negotiable instruments under the negotiable instruments law of the state, to the extent provided in section 10 of article 31 of the Annotated Code of Maryland, 1957, as amended. (Mont. Co. Code 1965, § 5-9; 1978 L.M.C., ch. 36, § 1.)
Editor’s note—See County Attorney Opinion dated 6/3/08 discussing public purpose funds and non-public purpose fund.
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