CHAPTER 316
FORMERLY SENATE BILL NO. 360
AS AMENDED BY SENATE ADMENDMENT
NO. 1 AND HOUSE AMENDMENT NO. 1
AN ACT TO AMEND CHAPTER 70, TITLE 6, OF. THE DELAWARE CODE RELATING TO ECONOMIC DEVELOPMENT AND ENVIRONMENTAL FACILITIES, AUTHORIZING THE DEPARTMENT OF COMMUNITY AFFAIRS AND ECONOMIC DEVELOPMENT TO ISSUE BONDS WITH OR WITHOUT THE FULL FAITH AND CREDIT OF THE STATE BEING PLEDGED TO THE PAYMENT THEREOF, LIMITING THE AMOUNT OF BONDS TO WHICH THE FULL FAITH AND CREDIT OF THE STATE MAY BE PLEDGED, DEFINING THE PURPOSES FOR WHICH SUCH BONDS MAY BE ISSUED, AND RELATED MATTERS.
Be it enacted by the General Assembly of the State of Delaware (three-fourths of all of the members of each House concurring therein):
Section 1. Amend Chapter 70, Title 6, Delaware Code, by reen titling said chapter "Economic Development and Environmental Facilities."
Section 2. Amend Section 7001, Title 6, Delaware Code, by striking subsection (e) in its entirety and by relettering subsections (f), (g), (h), and (i) as (e), (f), (g), and (h) respectively.
Section 3. Section 7001, Title 6, Delaware Code, is hereby amended by adding a new subsection (i) to read as follows:
"(i) Due to increased industrialization and urbanization of many areas of the State of Delaware, dangers to the public health and welfare caused by the pollution of the air, water and soil, high levels of noise and thermal water conditions caused by industry have become increasingly evident. Therefore, it is necessary to protect the public health and welfare by fostering the prevention of the pollution of our environment and the protection of our natural resources."
Section 4. Section 7001, subsection (h) which was relettered as such in Section 2 of this Act, Title 6, Delaware Code; is hereby amended by deleting the last paragraph thereof and substituting the following:
"Therefore, it is declared to be the policy of this State to promote the health, welfare and the good order of the inhabitants thereof by authorizing the Department of Community Affairs and Economic Development, acting as a public agency of the State of Delaware, to be vested with authority to implement the purposes of this chapter. For such purposes, the public money may be spent and the credit of the State pledged."
Section 5. Amend Section 7002, Title 6, Delaware Code, by deleting same in its entirety and inserting in lieu thereof the following:
§ 7002. Definitions
The following words and terms, unless the context clearly indicates a different meaning, shall have the following respective meanings:
(1) "State," the State of Delaware.
(2) "Department," the Department of Community Affairs and Economic Development.
(3) "Cost" as applied to any project shall embrace the cost of construction, the cost of acquisition of all property, including rights in land and other property, both real and personal and improved and unimproved, the cost of demolishing, removing or relocating any buildings or structures on lands so acquired, including the cost of acquiring any lands to which such buildings or structures may be moved or relocated, the cost of all machinery, equipment, financing charges, interest prior to and during the construction and, if deemed advisable by the Department, for a period not exceeding one year after completion of construction, the cost of engineering and architectural surveys, plans and specifications, the cost of consultants' fees and legal services, other expenses necessary or incident to determining the feasibility or practicability of constructing such project, administrative and other expenses necessary or incident to the construction of such project and the financing of the construction thereof, including reimbursement to any governmental agency or any lessee of such project for such expenditures, made with the prior approval of the Department , that would be costs of the project hereunder had they been made directly by the Department.
(4) "project" means any one or more buildings or other structures to be constructed, rehabilitated, improved, renovated, or enlarged which the Department finds meets the requirements of Section 7003 of this chapter, including the site or sites thereof and all other rights in land, furnishings, machinery and equipment and grading and improvement of the site or sites together with access roads, sidewalks, and, either separately or as part of a project, water supply and distribution facilities and sewage collection, treatment and disposal facilities, facilities for the incineration and compaction of garbage and refuse, facilities and devices for the prevention or correction of air pollution and water pollution, airports, docks, wharves, storage facilities, research and development facilities, shipping, receiving and distribution facilities and other improvements necessary or convenient for the construction, maintenance and operation thereof."
Section 6. Section 7003, Title 6, Delaware Code, is hereby amended as follows:
(a) Delete the first two sentences of Subsection (a) and substitute the following:
"(a) The Department is authorized to issue bonds, notes and refunding bonds of the Department to finance the cost of any project which the Department finds:"
(b) Insert a comma followed by the words "or where the environmental and natural resources are in danger of pollution" at the end of subsection (a) (1).
(c) Insert a comma followed by the words "or will consist of facilities for the supply and distribution of water, the acquisition, treatment and disposal of sewage, the incineration and compaction of garbage and refuse or the prevention and collection of air and water pollution, or any facilities otherwise described within the definition of 'project"' at the end of subsection (a) (2).
(d) Delete subsection (a) (5) and insert the following in lieu thereof:
"(5) Will be leased or sold upon the condition that the prospective tenant, purchaser, or assisted person is legally obligated to deposit with the trustee under the trust indenture securing the bonds a cash fund equal to the highest single yearly payment due from the tenant, purchaser, or assisted person to the Department under the terms of the lease, mortgage, or other security instrument between the Department and the purchaser, tenant, or assisted person, said fund to be pledged for the purposes provided in Section 7005 (g) of this chapter."
() Delete subsection (b) and insert the following in lieu thereof:
"(b) The Department may pledge the full faith and credit of the State of Delaware to the guaranty of bonds, notes or refunding bonds authorized to be issued, hereunder; provided, however, that the total authorized principal amount of bonds to which the full faith and credit of the State of Delaware has been pledged shall not exceed $20,000,000 and no individual project shall be financed by such bonds in excess of $3,000,000. The retirement of bonds to which the full faith and credit of the State has been pledged will not reduce said total authorized amount of bonds to which the full faith and credit of the State may be pledged. The Department may issue such bonds, notes, or refunding bonds, at any time so long as the total amount of such bonds, notes or refunding bonds, outstanding or provision for the payment of which has been made, including the bonds, notes or refunding bonds to be issued, does not exceed $20,000,000. The Department may also issue bonds, notes and refunding bonds payable solely from the revenues of the project for which the bonds have been issued. Such bonds may be issued for a project whether or not such project is or will be financed by bonds to which the full faith and credit of the State has or will be pledged."
(a) Insert the following words: "lease, convey, with or without consideration" after the word "repair," and before the words "and operate projects," in subsection (c) (4).
(b) Delete subsection (c) (7) and insert the following in lieu thereof:
"(7) To secure the payment of its bonds, notes and refunding bonds or any part thereof by pledge, or deed of trust of all, or any of its revenues and receipts, and to make such agreements with the purchasers of holders of its bonds, notes and refunding bonds or with others in connection with any such bonds, notes and refunding bonds whether issued or to be issued, including the pledging of the full faith and credit of the State, as the Department deems advisable; subject to the limitations of this chapter and in general to provide for the security of its bonds, notes and refunding bonds, and the rights of the holders thereof."
(h) Delete subsection (c) (10) and insert the following in lieu thereof:
"(10) To pledge, hypothecate, or otherwise encumber all or any of its revenues or receipts, as security for all or any of its obligations."
(i) Remove the period and insert a comma followed by the following language at the end of subsection (c) (13) "except insofar as the State may be obligated to the payment of bonds, notes and refunding terms to which the full faith and credit of the State has been pledged."
(j) Substitute the name "Department for "Industrial Commission" wherever the same appears in Section 7003.
Section 7. Subsections (a), (b), (c) and (d) of Section 7004, Title 6, Delaware Code, are hereby deleted and the following inserted in lieu thereof:
"(a) The bonds authorized to be issued by this chapter shall be authorized by the Department and shall be of such series; bear such date or dates; mature at such time or times not exceeding 25 years from their respective dates; bear interest at such rate or rates; be in such denominations; be of a single denomination payable in installments; be in such form, either coupon or fully registered without coupon, carry such registration, exchangeability, and interchangeability privileges; be payable in such medium of payment and at such place or places; be subject to such terms of redemption; and be entitled to such priorities in the revenue or receipts of the Department as such authorization may provide. The bonds shall be signed by a facsimile of the signature
of the Secretary of the Department, and by the Secretary of the Council on Industrial Financing, and coupon bonds shall have attached thereto interest coupons bearing the facsimile signature of the Secretary of the Department. Any such bonds may be issued and delivered notwithstanding the fact that one or more of the officials signing such bonds or whose facsimile signature shall be upon the bonds or coupons, shall have ceased to be such official or officials at the time when such bond shall actually be delivered.
The bonds may be sold at public or private sale for such price or prices as the Department shall determine. Pending the preparation of the definitive bonds, interim receipts may be issued to the purchaser or purchasers of such bonds and may contain such terms and conditions as the Department may determine.
(b) Any authorization authorizing bonds may contain provisions which shall be part of the contract with the holders thereof as to (1) pledging the full faith and credit of the State for such obligations or restricting the same to all or any of the revenues of the Department from all or any projects or properties; (2) the construction, improvement, operation, extension, enlargement, maintenance, and repair of the project, and the duties of the Department with reference thereto; (3) the terms and provisions of the bonds; (4) limitations on the purposes to which the proceeds of the bonds then, or thereafter to be issued, or of any loan or grant by the State, Federal agency, municipality, corporation or authority, may be applied; (5) the setting aside of reserves or sinking funds and the regulation and disposition thereof; (6) limitations on the issuance of additional bonds; (7) the terms and provisions of any deed of trust or indenture securing the bonds or under which the same may be issued, and (8) any other additional agreements with the holders of the bonds.
(c) The Department may enter into any deeds of trust, indentures, or other agreements, with any bank or trust company or other person or persons in the United States having power to enter into the same, including any Federal agency, as security for such bonds, and may pledge the credit of the State as hereinbefore limited, and all or any of the revenues or receipts of the Department thereunder. Such deed of trust, indenture, or other agreement, may contain such provisions as may be customary in such instruments, or as the Department may authorize, including provisions as to: (1) the construction, improvement, operation, maintenance, and repair of any project and the duties of the Department with reference thereto; (2) the application of funds and the safeguarding of funds on hand or on deposit; (3) the rights and remedies of the trustee and holders of the bonds which may include restrictions upon the individual right of action of such bondholders; and (4) the terms and provisions of the bonds or the resolutions authorizing the issuance of the same.
(d) The bonds shall have all the qualities of negotiable instruments under the law merchant, the negotiable instruments law and the Uniform Commercial Code of this State.
Section 8. Section 7005, Title 6, Delaware Code, is hereby repealed in its entirety.
Section 9. Section 7006. Title 6, Delaware Code, is renumbered 7005 and is hereby amended as follows:
(a) By striking the words "development corporation" wherever they appear therein and substituting the word "Department" — except in subsection (c) where the word "project" shall be inserted in lieu of "development corporation" in the first sentence thereof.
(b) By deleting the words "of the county" and inserting in lieu thereof the words "in which the project is located" after the words "Recorder of Deeds of the county" in the last sentence of subsection (a) thereof.
(c) By striking the words "resolution or resolutions". wherever they appear therein and substituting in lieu thereof the word "authorization."
(d) By striking the words "Industrial Commission" wherever they appear in subsection (e) and substituting in lieu thereof the word "Department."
(e) By deleting subsection (f) and inserting in lieu thereof the following:
"(f) If the receiver has made demand upon the Department pursuant to subsection (d) of this section, or if the Department
determines that any payment due from the assisted person to the Department is in default or if sufficient revenues are not available to make payments required to be made under the trust indenture, it shall forthwith direct the trustee under the trust indenture, to make payments of interest and principal, as they become due, from the cash reserve fund deposited pursuant to Section 7003 (a) (5) of this title. In the event that the bonds, the payment of the principal and interest on which are thereby made, are bonds to which the full faith and credit of the State has been pledged, the Secretary of the Department shall forthwith give notice to the Governor, the Secretary of the Department of Finance, the State Auditor, the Speaker of the House of Representatives and the President of the Senate, of the deficiency. Thereafter, the Budget Appropriation Bill shall be enacted and approved by each General Assembly and shall contain under the debt service item for each fiscal year provisions for the payment of interest and principal maturities of such bonds, and such of the revenues of the State of Delaware as are not prohibited by constitutional provision or committed by preceding statutes for other purposes are hereby pledged for the redemption and cancellation of such bonds and payment of interest thereon.
(f) By deleting subsection (g) and inserting in lieu thereof the following:
"(g) Upon the default of any obligation by the assisted person to the Department, and the payment of any funds to bondholders from the General Fund of the State, the Department shall immediately take title and possession of the project and any notes, bonds, moneys or other assets acquired in connection with the project, in the name of the State. Any funds realized through the sale, rental, or other disposition of any property right acquired by the Department pursuant to this Chapter shall be paid into the General Fund to the extent that any moneys have been paid out of the General Fund pursuant to subsection (f) of this section. Any such funds not here required to be paid into the General Fund, including fees and commissions charged by the Department, shall be used to pay the expenses of the Department, with any surplus remaining as security for the bondholders of any obligations issued pursuant to this chapter."
Section 10. Section 7007, Title 6, Delaware Code, is renumbered 7006 and is hereby amended by striking the words
"development corporation" wherever they appear therein and inserting in lieu thereof the word "Department."
Section 11. Sections 7008 and 7009, Chapter 70, Title 6, Delaware Code, are renumbered 7007 and 7008, respectively.
Approved October 21, 1971.