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(a) The Authority may secure any revenue bond issued to provide funds for the purchase, acquisition, construction or improvement of any project by a trust indenture between the Authority and a corporate trustee. The trustee may be any trust company or bank having the powers of a trust company in or outside the State.
(b) The Authority may be a party to one or more trust indentures, if revenue bonds have been issued to finance more than a single project. A trust indenture may pledge or assign all revenues from any project or projects, but must not convey or mortgage the project or any part of it, unless authorized by the Council.
(c) The resolution authorizing the issuance of revenue bonds or trust indentures may contain provisions for the protection and enforcement of the rights and remedies of the bondholders, including:
(1) covenants setting forth the duties of the Authority in relation to the construction, acquisition, improvement, installation, maintenance, operation, repair, and insurance of any project, and the custody, safeguarding, and application of all moneys;
(2) requirements that any project be constructed and paid for under the supervision and approval of consulting engineers employed or designated by the Authority, and satisfactory to any trustee appointed or, if none, the original purchasers of the bonds;
(3) requirements that security given by contractors, and by any depository of the proceeds of the bonds or revenues of any project or other moneys relating to the bonds, be subject to approval by the trustee appointed or, if none, the original purchaser of the bonds; and
(4) statements of the rights and remedies of the bondholders and of the trustee which may restrict the individual right of action of bondholders as is customary in trust indentures securing bonds and debentures of corporations.
(d) Any bank or trust company incorporated under the laws of this State may act as depository of the proceeds of the bonds or revenues.
(e) All expenses incurred in carrying out such trust indenture may be treated as a part of the cost of maintenance, operation and repair of any project or projects. (1992 L.M.C., ch. 35, § 2.)
(a) The Authority may fix and revise rates, tolls, rents, and charges for the use of any of its projects, and may charge and collect them.
(b) The Authority may contract with any person who wants to use a project, either in whole or in part, and may fix the terms, conditions, and charges for the use.
(c) Rates, tolls, rents, or charges should be fixed and adjusted to provide a fund sufficient to pay:
(1) the cost of maintaining, preparing, and operating the project from which the rates, tolls, rents, and charges are received, including reserves for replacement, depreciation, and any extension of the project; and
(2) the principal and interest of the bonds issued to provide the funds for the acquisition, construction, improvement, equipping, maintaining, operating, or furnishing the project, and any applicable reserves.
(d) The rates, tolls, rents, and charges of the Authority are not subject to supervision or regulation by any State, County, or municipal entity.
(e) Except for revenues required to pay the cost of maintaining, repairing and operating any project, or to provide reserves, or permitted in the resolution authorizing the issuance of the revenue bonds or the trust indenture, the rates, tolls, rents, or charges, and all other revenues received by the Authority from any project must be placed in a sinking fund at such intervals as may be provided in the resolution or trust indenture. The sinking fund is pledged to and charged with the payment of:
(1) interest due on the bonds issued to provide funds for the project;
(2) principal due on the bonds;
(3) administrative charges by the depository of the fund for paying such principal and interest; and
(4) any premium on the bonds retired by call or purchase.
(f) (1) Subject to the resolution authorizing the issuance of the bonds or of the trust indenture, the sinking fund is for the benefit of all bonds without distinction or priority of one over another.
(2) Subject to the resolution authorizing the issuance of bonds or of the trust indenture, any moneys in the sinking fund in excess of an amount equal to 2 years interest on all such bonds then outstanding may be applied to the purchase or redemption of the bonds. All bonds so purchased or redeemed must be canceled. (1992 L.M.C., ch. 35, § 2.)
(a) The rights and remedies granted to the bondholders under this Chapter are in addition to, and not in limitation of, any rights and remedies granted to bondholders by a resolution authorizing the issuance of bonds, or by any deed of trust, indenture or other agreement under which a bond is issued.
(b) The holders of 25% of the aggregate principal amount of the bonds then outstanding, by instrument filed in the Office of the Clerk of the Circuit Court for Montgomery County, and acknowledged in the same manner as a deed to be recorded, may (except as limited under the provisions of any deed of trust, indenture, or other agreements) appoint a trustee to represent the bondholders under this Chapter if the Authority:
(1) defaults in the payment of principal or interest due on bonds whether at maturity or upon call for redemption, and the default continues for a period of 30 days; or
(2) fails to comply with this Chapter; or
(3) defaults in any agreement made with the holders of the bonds.
(c) The trustee, and any trustee under any deed of trust, indenture or other agreement may, and on written request of the holders of 25% (or other percentage specified in any deed of trust, indenture, or other agreement) of the aggregate principal amount of the bonds then outstanding, must, in the name of the trustee:
(1) by mandamus or other legal action, enforce all rights of the bondholders, including the right to require the Authority to:
(A) collect tolls, rates, rents, and other charges adequate to carry out any agreements or pledges of the revenues or receipts of the Authority;
(B) perform any other agreements with or for the benefit of the bondholders; and
(C) perform the Authority's duties under this Chapter;
(2) bring suit on the bonds;
(3) by legal action, require the Authority to account as if it were the trustee of an express trust for the bondholders;
(4) by legal action, enjoin any acts which may be unlawful or in violation of the rights of the bondholders;
(5) by notice in writing to the Authority, declare all bonds due and payable and, if all defaults are made good, then with the consent of the holders of 25% (or such other percentage as specified in any deed of trust, indenture, or other agreement) of the aggregate principal amount of the bonds then outstanding, cancel the declaration of default and its consequences.
(d) Any trustee, whether appointed under this Section or acting under a deed of trust, indenture or other agreement, and whether or not all bonds have been declared due and payable, is entitled as of right to the appointment of a receiver. The receiver may, to the same extent that the Authority could:
(1) enter and take possession of a facility of the Authority, or any part of a facility and any tolls, revenues, rents, or receipts from the facility which are or may be applied to the payment of the bonds in default;
(2) operate and maintain the facilities;
(3) collect and receive all rents and other revenues from the facilities in the same manner as the Authority; and
(4) deposit all such money received in a separate account to be applied as the Court directs.
(e) In any legal action by the trustees, the fees, counsel fees, and expenses of the trustee and of the receiver, if any, and all costs and disbursements allowed by the court, are first charges on any revenues and receipts derived from the facilities of the Authority which are or may be applied to the payment of the bonds in default.
(f) A trustee under this Section has all of the powers necessary or appropriate for the exercise of any functions specifically described in this Chapter, or incident to the general representation of the bondholders in the enforcement and protection of their rights.
(g) In addition to all other rights and remedies, any holder of bonds has the right by mandamus or other legal action to enforce that holder's rights against the Authority, including the right to require the Authority to:
(1) collect tolls, fees, rents, and other charges adequate to carry out any agreement or pledge of the tolls, fees, rents, or other charges, or income, revenues, and receipts; and
(2) perform any covenant or agreement with the bondholders, and the Authority's duties under this Chapter.
(h) Nothing in this Chapter authorizes a receiver appointed under this Chapter to operate and maintain any Authority project to sell, assign, mortgage or otherwise dispose of, any of the Authority's assets, except where such sale, assignment, or mortgage is expressly permitted by the revenue bonds of that particular project. The powers of the receiver are expressly limited to the operation and maintenance of the Authority's facilities as the court directs, and no holder of the Authority's bonds, nor any trustee, may in any legal action compel a receiver, nor is any receiver authorized, or any Court empowered to direct the receiver, to sell, assign, mortgage, or otherwise dispose of the Authority's assets, unless the bonds expressly authorize the sale, assignment, or mortgage of the assets of a specific project. (1992 L.M.C., ch. 35, § 2.)
(a) If any project or part of a project is constructed, improved, equipped, or furnished under a contract and the estimated cost exceeds $10,000, the contract must be awarded to the lowest responsible and responsive bidder on a competitive basis. The Authority may adopt regulations for the submission of bids in these circumstances. Contracts for constructing, equipping, furnishing, or improving a project should require that a contractor give sufficient surety, approved by the Authority and in an amount fixed by the Authority, for the faithful performance of the contract. The contract must be accompanied by an additional bond for the protection of labor and material subcontractors. Each construction contract must require the contractor to pay for all materials furnished and services rendered to perform the contract. The contract must also provide that any person who furnishes materials or services may maintain an action to recover the fair value of them against the obligor under the bond as though such person were named, if the action is brought within one year after the cause of action occurred. This Section does not limit the power of the Authority to construct any project or part of a project, or any improvement to a project, directly by the officers, agents, and employees of the Authority, or by agreement with the federal or State government. The Authority may enter into and perform such contracts, or establish or comply with any rules and regulations concerning labor, materials, and other related matters in connection with any project as the Authority finds desirable, or as may be requested by any federal or State agency as part of the financing of the project.
(b) (1) The Authority must structure its procurement procedures to comply with the minority business goals of the County Code. The substantive procedures should be consistent with the minority business procurement provisions of the County Code applicable to County government and related executive regulations. The Authority is subject to the certification and decertification procedures used by the County.
(2) This subsection does not prohibit the Authority from using federal minority business requirements, if applicable.
(3) Any failure to comply with this subsection does not affect the validity of any bonds of the Authority.
(4) By September 1 of each year, the Authority must submit a report to the Council and the Executive that contains the information required in Section 11B-23D(a) as it would apply to the Authority.
(5) This subsection does not give any person or business any right or status, including standing, to challenge the award of a contract or subcontract made by the Authority. The provisions of this subsection are enforceable only through the oversight function of the Executive and the Council.
(c) The Authority is subject to the recycled materials procurement provisions of Sections 11B-44 (a), (b), and (c), as they apply to the Authority. (1992 L.M.C., ch. 35, § 2.)
(a) Unless otherwise provided in the resolution authorizing any issue of bonds, or unless otherwise provided by the trust indenture that secures the bonds, all moneys received by the Authority must be paid to the treasurer of the Authority. These moneys must be deposited by the treasurer in one or more banks or trust companies in one or more special accounts. Each special account, to the extent not insured, must be continuously secured by a pledge of the direct obligations of the United States of America, of the State or of the County, having an aggregate market value at all times, exclusive of accrued interest, of at least the balance of deposits in the account. The securities must either be deposited with the treasurer, or be held by a trustee or agent approved by the Authority. All banks and trust companies are authorized to give such security for such deposits. The moneys in the accounts must be paid on the warrant or other order of the chairperson of the Authority, or any other person that the Authority authorizes to execute the warrants or orders.
(b) The Authority must have an annual examination of its books, accounts, and records by a certified public accountant. A copy of the audit must be delivered to the Executive and to any other person named to receive the audit in the resolution authorizing the issuance of the bonds or in the trust indenture that secures them. If the Authority fails to make the audit, then the Executive or designee may examine, at the expense of the Authority, the accounts and books of the Authority, including its receipts, disbursements, contracts, leases, sinking funds, investments, and any other matters relating to its finances, operations, and affairs.
(c) The County Attorney has the right to examine the books, accounts, and records of the Authority.
(d) A financial statement of the Authority must be published annually in a newspaper of general circulation in the County. If the publication is not made by the Authority, the Executive or designee must publish the statement at the Authority's expense. (1992 L.M.C., ch. 35, § 2.)
Under Chapter 601 of the 1992 Laws of Maryland, the County may not limit any powers, authority, rights, or obligations of the Authority if the limitation would violate the pledge of the State under Section 42-25 of Article 16 of the Code of Public Local Laws of Maryland, as that Section existed on May 26, 1992. (1992 L.M.C., ch. 35, § 2.)
(a) Under Chapter 601 of the 1992 Laws of Maryland, the establishment of a project under this Chapter is in all respects for the benefit of the inhabitants of Montgomery County and is a public purpose. The County, the State and the Authority are performing an essential governmental function in exercising the powers conferred by this Chapter. The Authority must not be required to pay any tax or assessment on:
(1) any facility on or any part of a facility;
(2) activities of the Authority in the operation and maintenance of any facility;
(3) any revenues from the operations or maintenance of any facility or project; or
(4) the bonds of the Authority or the interest on them.
(b) (1) Under Chapter 601 of the 1992 Laws of Maryland, the projects and the bonds of the Authority, the interest on the bonds, and any gain realized from the sale or exchange are exempt from all State, County, municipal and local taxation of any kind or nature, unless the bonds are expressly declared by the Authority to be taxable.
(2) Under Chapter 601 of the 1992 Laws of Maryland, the Authority may declare any project and the bonds issued for the project, interest on the bonds, or any gain realized from the sale or exchange of the bonds to be taxable in any respect, subject to conditions contained in the declaration by the Authority.
(c) The Authority and the State, County, and other incorporated cities or towns in the County may enter into an agreement, for such duration as they may determine, for the payment of a stated sum in lieu of taxes by the Authority to the State or a political subdivision.
(d) The Authority is subject to any applicable benefits assessment, including any road, street, sewer, and water charge that may be levied by operation of law. (1992 L.M.C., ch. 35, § 2.)
Under Chapter 601 of the 1992 Laws of Maryland:
(a) Revenue bonds issued under this Chapter are securities in which all public officers and public agencies of the State and its political subdivisions, and all banks, trust companies, savings and loan associations, investment companies and others carrying on a banking business, all insurance companies, and insurance associations and others carrying on an insurance business, all administrators, executors, guardians, trustees, and other fiduciaries, and all other persons may legally and properly invest funds, including capital, in their control or belonging to them.
(b) Revenue bonds issued under this Chapter are securities which may properly and legally be deposited with and received by any State or municipal officer or any agency or political subdivision of the State for any purpose for which the deposit of bonds or other obligations of the State is authorized by law. (1992 L.M.C., ch. 35, § 2.)
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