CHAPTER 7
FORMERLY
HOUSE BILL NO. 87
AN ACT TO AMEND TITLE 29 RELATING TO LIMITATIONS ON THE ISSUANCE OF DEBT AND OTHER OBLIGATIONS BY THE STATE AND ITS AGENCIES AND AUTHORITIES.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Section 7422, Title 29, Delaware Code shall be deleted and in its place shall be substituted the following:
17422. Limitations on debt and other obligations.
(a) For the purposes of this section —
(1) 'Tax supported obligations of the State' means (A) all obligations of the State or any agency or authority thereof to, which the State's full faith and credit is pledged to pay directly or by guarantee and
(B) all obligations of the State or any agency or authority thereof extending beyond one year with respect to the lease, occupancy or acquisition of property which are incurred in connection with debt financing transactions (e.g., certificates of participation) and which are payable from taxes, fees, permits, licenses and fines imposed or approved by the General Assembly. Tax supported obligations do not include (A) obligations incurred to acquire a like principal amount of full faith and credit obligations issued by a local school district to the extent such local school district obligations are not in default, (B) any obligations of the Delaware Transportation Authority; or
(C) any tax or other revenue anticipation notes or bonds of the State.
(2) 'Transportation Trust Fund debt obligations' means all debt obligations of the Delaware Transportation Authority, including all obligations extending beyond one year with respect to the loan, occupancy or acquisition of property which are incurred in connection with debt financing transactions (e.g., certificates of participation), and which in any case are payable from the Transportation Trust Fund.
(3) 'Aggregate maximum annual payments' on all tax supported obligations and all Transportation Trust Fund debt obligations outstanding, (plus certain Lease Obligations as described in Subsection (c) below), means the maximum payments due with respect to all such obligations in any one fiscal year. In any case where the terms of any such obligation include limitations on the incurrence of additional debt,
the
determination of maximum annual payments with respect to such obligation shall be determined consistently with those terms.
(b) The aggregate principal amount of tax supported obligations of the State which may be authorized by the State in any one fiscal year may not exceed 5% of the estimated net General Fund revenue for that fiscal year from all sources, (not including unencumbered funds remaining at the end of the previous fiscal year) as determined by the joint resolution approved by a majority of the members elected to each House of the General Assembly and signed by the Governor In connection with the adoption of the annual Budget Appropriation Bill for that fiscal year. Any amount of tax supported obligations which are duly authorized in any fiscal year within the limits of this subsection, and then are later deauthorized, may subsequently be reauthorized without regard to the authorization limit otherwise provided by this subsection.
(c) No tax supported obligation of the State and no Transportation Trust Fund debt obligation of the Delaware Transportation Authority may be incurred if the aggregate maximum annual payments on all such outstanding obligations (plus certain Lease Obligations described below) will exceed 15% of the estimated aggregate General Fund revenue from all sources, (not including unencumbered funds remaining at the end of the previous fiscal year), plus estimated Transportation Trust Fund revenue for the fiscal year in which such obligation is incurred, such estimated revenue as determined by the most recent joint resolution approved by a majority of the members elected to each House of the General Assembly and signed by the Governor. The Lease Obligations referred to in the preceding sentence shall mean (I) all obligations of the State or any agency or authority thereof which are payable from taxes, fees, permits, licenses and fines imposed or approved by the General Assembly and (ii) all obligations of the Delaware Transportation Authority which are payable from the Transportation Trust Fund, which in either case extend beyond one year and are with respect to the lease, occupancy, or use of property. For the purposes of this subsection, the maximum annual payments on the above-described Lease Obligations shall be as of the first day of the fiscal year of reference as certified by the Secretary of Finance.
(d) No obligation to which the State's full faith and credit is pledged may be incurred if the maximum annual debt service payable in any fiscal year on all such outstanding obligations will exceed the State's cumulative cash balances for the fiscal year in which such obligation is incurred as determined by the joint resolution approved by a majority of the members elected to each House of the General Assembly and signed by the Governor in connection with the adoption of the annual Budget Appropriation Bill for that fiscal year. For the purposes of this subsection, there shall not be included (i) obligations incurred to acquire a like principal amount of full faith and credit obligations issued by a local school district to the extent such local school district obligations are not in default, (ii) general obligation bonds of the State issued prior to January 1, 1987 for transportation related projects as certified by the Secretary of Finance, or (iii) tax or other revenue anticipation notes of the State.
(e) There shall be attached to every bill and amendment introduced in the House of Representatives and/or in the Senate, of the General Assembly, which authorizes the incurrence of a tax supported obligation described in subsection (b), a debt statement in substantially the following form:
Office of State Treasurer
Debt Limit Statement Dated
This Debt Limit Statement to be attached to as required by Section 7422, Title 29 Delaware Code.
(1) DEBT LIMIT - PROJECTED REVENUE
(a) Estimated General Fund revenue for the fiscal year ending June 30, as per the joint
resolution of the House and Senate and signed by the Governor in connection with the adoption of the annual Budget Appropriation Bill•for that fiscal year
(c) Maximum aggregate principal amount of tax supported obligations which may be authorized by the State in the fiscal year ending June 30,
(2) TAX SUPPORTED OBLIGATIONS PREVIOUSLY AUTHORIZED IN THE FISCAL YEAR (and which have not been deauthorized)
(a) Aggregate principal amount of general obligations of the State
(b) Aggregate principal amount of obligations guaranteed by a pledge of the State's full faith and credit
(c) Aggregate principal amount of
obligations extending beyond one year with respect to lease, occupancy or acquisition of property and incurred in
connection with debt financing transactions
(d) Less obligations to acquire local school district bonds
(a) Less tax and other revenue anticipation obligations
(b) Total previously authorized tax supported obligations subject to debt limit
(3) TAX SUPPORTED OBLIGATIONS TO BE AUTHORIZED PURSUANT TO THE APPENDED LEGISLATION
(a) Aggregate principal amount of general obligations of the State
(b) Aggregate principal amount of obligations to be guaranteed by a pledge of the State's full faith and credit
(c) Aggregate principal amount of obligations extending beyond one year with respect to lease, occupancy or acquisition of property to be incurred in connection with debt financing transactions
(d) Less obligations to acquire local school district bonds
(e) Less tax and other revenue anticipation obligations
(f) Total aggregate principal amount of tax supported obligations subject to debt limits to be authorized pursuant to appended legislation
(4) REMAINING DEBT LIMIT (1) — (2) — (3)
(f) The joint resolution referred substantially the following form:
Joint Resolution No.
The Official Estimates of General
Fund Revenue For Fiscal Year
WHEREAS, Section 7422 of Title 29 Delaware Code imposes certain limitations on the authorization and incurrence of debt by the State and the Delaware Transportation Authority based in part on estimated General Fund revenue and Transportation Trust Fund revenue for the fiscal year;
BE IT RESOLVED by the House of Representatives and the Senate of the 136th General Assembly of the State of Delaware with the approval of the Governor that the following are adopted as the Official estimates with respect to revenues for fiscal year
Gross General Fund Revenue
Revenue Refunds
Net General Fund Revenue
Unencumbered Funds
Transportation Trust Fund Revenue
Section 2. Section 7423, Title 29, Delaware Code shall be deleted and in its place shall be substituted the following:
17423. DEFAC Monitoring of Debt Limits.
The Delaware Economic and Financial Advisory Council shall monitor the application and effect of the debt limits imposed by Section 7422 and shall report annually to the General Assembly and the Governor with respect thereto and shall include in such reports any recommendations with respect to such debt limits and the then current Debt Affordability Study prepared by the Department of Finance.
Section 3. This Act shall become effective July 1, 1991.
Approved February 11, 1991.