CHAPTER 315
FORMERLY SENATE BILL NO. 392
AS AMENDED BY
SENATE AMENDMENT NO. 1
AN ACT TO AMEND TITLE 14 AND TITLE 29, DELAWARE CODE ANNOTATED, AS THE SAME REFER TO LOCAL SCHOOL BONDS, SCHOOL CONSTRUCTION CAPITAL IMPROVEMENTS, AND BONDS OF THE STATE OF DELAWARE, AND THE DUTIES OF THE SECRETARY OF FINANCE WITH REFERENCE THERETO.
Be it enacted by the General Assembly of the State of Delaware (three fourths of the Members elected to each branch thereof concurring therein):
Section 1. Section 2105, Title 14, Delaware Code, is amended by striking said section in its entirety and substituting in lieu thereof the following:
§ 2105. Procedure governing sale of bonds
The School Board of any District, with the exception of the Board of Public Education in Wilmington, shall sell any bonds to be issued pursuant to the authority contained in this Chapter or pursuant to any other provision of law, to the State of Delaware at private sale. The State may require that the validity of the bonds be approved by the Attorney General or his designate. The Board shall cause a complete record of the proceedings taken in relation to the issuance of the bonds to be made and kept with the other records of the Board, and shall cause a duplicate of such record to be made and filed with the State Board of Education.
Section 2. Section 2107, Title 14, Delaware Code, is amended by striking said section in its entirety and substituting in lieu thereof the following:
§ 2107. Terms and form of bonds
The bonds shall be in such denomination or denominations, in such form and shall bear such rate of interest, as shall be determined by the State of Delaware pursuant to Chapter 75,
Section 7506, Title 29, of the Delaware Code; provided, however, that the School Boards of any District shall be consulted regarding the term of such bonds. The bonds shall bear interest from and after their date, payable semi-annually on the days designated in the bonds. The bonds shall consist of a single bond registered as to both principal and interest with the principal thereof payable in installments and interest thereon payable semi-annually. The amounts of principal payable and the dates on which such payments are due shall be noted on the bond form. The dates on which the interest is due shall also be noted on the bond form. Such bonds shall be payable in serial installments beginning not more than one year after the date of the bonds and ending not more than twenty-five years after such date; the amount of any installment payable in any one year, except the last year, shall be not less than one twenty-fifth of the aggregate principal amount of the bonds of such issue.
Section 3. Section 2112, Title 14, Delaware Code, is amended by striking said section in its entirety and substituting in lieu thereof the following:
§ 2112. Cancellation and destruction of paid bonds and coupons
As and when any of the bonds issued under the authority of this Chapter or the coupons annexed thereto shall have been paid, the same shall be cancelled by the Farmers Bank of the State of Delaware which shall forthwith make a record of the payment of such bonds or coupons and deliver such record to the School District which issued the bonds and thereafter cause the bonds or coupons to be burned or otherwise destroyed.
Section 4. Section 2116, Title 14, Delaware Code, is amended by striking paragraph (e) as the same appears in said section and substituting in lieu thereof a new paragraph (e) to read as follows:
(e) The Secretary of Finance is hereby authorized and directed to draw warrants or drafts on such fund in the amount of the principal of and interest on such bonds or other obligations as the same shall become due and payable and to deposit such money so drawn to the credit of the General Fund of the State.
ed by striking said section in its entirety and substituting in lieu thereof the following:
§ 2709. Destruction of cancelled bonds and coupons
The Secretary of Finance may cause the Farmers Bank of the State of Delaware to destroy any paid off, matured, redeemed, called or cancelled bonds and coupons of the State, which he deems advisable. The Farmers Bank of the State of Delaware shall give the State Treasurer a certificate of destruction or cremation of such bonds and coupons which shall be retained by the Secretary of Finance.
Section 6. Section 2711, Title 29, Delaware Code, is amended by striking said section in its entirety and substituting in lieu thereof the following:
§ 2711. Bond servicing procedure
The Secretary of Finance shall cause the Farmers Bank of the State of Delaware to maintain reconciliation statements on all state bonds and coupons. Said reconciliation statements shall balance with bank statements on bond and coupon accounts. Any paid off, matured, redeemed, called or cancelled bonds and coupons shall be held by the Farmers Bank of the State of Delaware on behalf of the Secretary of Finance until a sufficient quantity has been collected by the office to be cancelled and destroyed according to the provisions of this chapter.
Section 7. Section 7412, Title 29, Delaware Code, is hereby amended by striking said section in its entirety and substituting in lieu thereof the following:
§ 7412. Redemption, record, and cancellation of bonds; payment of bonds; retention of bonds and coupons
(a) The Secretary of Finance shall cause the Farmers Bank of the State of Delaware to provide a permanent record which shall be retained by said Farmers Bank of the State of Delaware, in which shall be kept a record of all bonds which shall be paid and redeemed according to the number thereof, and in addition thereto lie shall cause said Farmers Bank of the State of Delaware to cancel any such bonds.
(b) As the said coupons are paid, the Secretary of Finance shall cause the Farmers Bank of the State of Delaware to cancel said coupons.
Section 8. Section 7413, Title 29, Delaware Code, is hereby amended by adding thereto a new section to be designated as Section 7413A to read as follows:
§ 7413A. Registration agent
1. The Secretary of Finance may contract with the Farmers Bank of the State of Delaware in connection with its bonds or bond anticipation notes as the registration agent for the State and for related services and for the payment by the State of a reasonable compensation to the Farmers Bank of the State of Delaware for the services to be performed by it pursuant to such contract. The Farmers Bank of the State of Delaware shall be responsible to the State for the faithful and safe conduct of the services to be performed by it as such registration agent, or services related thereto, for the fidelity and integrity of the officers and agents of such bank performing the duties of a registration agent, or services related thereto, and for all loss or damage which may result from any failure of such officers or agents to discharge their duties and for any improper or incorrect discharge of those duties, and shall save the State free and harmless from any and all loss or damage occasioned by or incurred in the performance of such services. Such contracts may be terminated by the Secretary of Finance at any time. Any such contract shall be executed in duplicate, and one copy thereof shall be filed in the office of the Secretary of Finance as a public record, and the other copy shall be delivered to the Farmers Bank of Delaware as evidence of its authority to act as such registration agent.
2. The Farmers Bank of the State of Delaware may, while acting as registration agent pursuant hereto, bid for purchase, acquire, hold, sell or dispose of obligations of the State and may enter into other service contracts with the State regardless of its contract to act as registration agent.
Section 9. Section 7423 (a), Title 29, Delaware Code, is hereby amended by adding thereto a new subparagraph to be designated as (6) to read as follows:
(6) To provide the local share of the cost of school construction as provided in any School Construction Bond Authorization Act and for additional amounts appropriated by the State to any School District for school construction.
Section 10. Section 7425, Title 29, Delaware Code, is hereby amended by adding thereto a new paragraph to be designated as (c), to read as follows:
(c) The provisions of this Subchapter shall not impose a limitation during any fiscal year on the issuance or authorization, by the State of Delaware, of bonds or notes for the purpose of financing the local share of a School Construction Program as authorized by any School Construction Bond Authorization Act and for additional amounts appropriated by the state to any school district for school construction; nor shall any such bonds issued by the State of Delaware for such purpose be included in the total of bonds or notes pledging the faith and credit of the State which are issued and outstanding and authorized but not issued as set forth in the debt statement accompanying any bill authorizing the issuance of bonds or notes pledging the faith and credit of the State as provided in Section 7424 of this Chapter.
Section 11. Section 7506, Title 29, Delaware Code, is hereby amended by striking paragraph (a) of said section and substituting in lieu thereof the following:
§ 7506. Local bonds
(a) Any school district which is entitled under the provisions of any School Construction Bond Authorization Act to an apportionment of a State share and which is required therein to provide a local matching share is authorized to issue its bonds for the purpose of raising money to pay the local share set forth in such School Construction Bond Authorization Act and raising such additional amount, if any, as such school district may desire to expend for school construction. If such bonds are issued, they shall be authorized by the Board of Education of the school district pursuant to the provisions of Chapter 21 of Title 14, except in the case of the City of Wilmington, in which case the local share to be contributed by the Board of Public Education in Wilmington may be raised by the proper authorities of said City by issuing bonds pursuant to the provisions of Chapter 175,
Volume 52, or Chapter 163, Volume 32, Laws of Delaware, as amended. The provisions of Chapter 20 of Title 14, shall be complied with in the event that the amount in addition to the local share is for school construction which varies from the standard formula. Such bonds and any notes issued in anticipation of the issuance of such bonds shall, except in the case of the City of Wilmington, be sold to the State of Delaware. Such bonds shall bear interest at a rate not less than the rate payable on bonds of the State of Delaware issued to provide such local share plus an amount to cover administrative expenses of the State in connection with the financing of School Construction Programs in an amount not exceeding one-quarter of one percent per annum. The State of Delaware shall issue its bonds to provide the local share of any School Construction Program in accordance with the provisions of any School Construction Bond Authorization Act, as well as any additional amounts which the qualified voters of any school district shall have authorized to be expended for school construction; provided, however, that such additional amounts must first have been appropriated to such school district in a School Construction Bond Authorization Act or amendment to such an Act. Such bonds shall not be included in the amount of bonds or notes pledging the faith and credit of the State of Delaware which are issued and outstanding, authorized but not issued, and about to be issued. The Department of Finance of the State of Delaware shall annually prepare a report setting forth in brief detail all bonds or notes issued by the State of Delaware for the purpose of financing a local share of a School Construction Program the bonds or notes purchased from local school districts and setting forth receipts and disbursements.
Section 12. Section 7513, Title 29, Delaware Code, is hereby amended by striking said section in its entirety and substituting in lieu thereof the following:
§ 7513. Local funds to be deposited
The moneys paid to the Secretary of Finance by a school district as its local share under any School Construction Bond Authorization Act and any funds appropriated as its local share by the State of Delaware under any School Construction Bond Authorization Act, including any additional amount appropriated to such School District by the State, and for the financing of which bonds of the State are to be issued, shall be deposited by
the Secretary of Finance in the Farmers Bank of the State of Delaware, at Dover, and shall be expended only for school construction in such district. Each of said local shares and additional amounts shall be credited with interest when and to the same extent as the said bank credits interest on deposits of other State moneys in said bank.
Section 13. This act shall take effect immediately.
Approved October 12, 1971.