Maryland State Statutes - Maryland Attorney Directory

(i) Construction, reconstruction, and renovation, and acquisition of all lands, structures, property, real or personal, rights, rights-of-way, franchises, easements, and interests acquired or to be acquired by the municipal corporation or any other governmental unit having jurisdiction over the infrastructure improvement;

(ii) All machinery and equipment including machinery and equipment needed to expand or enhance municipal services to the special taxing district;

(iii) Financing charges and interest prior to and during construction, and, if deemed advisable by the municipal corporation, for a limited period after completion of the construction, interest and reserves for principal and interest, including costs of municipal bond insurance and any other type of financial guaranty and costs of issuance;

(iv) Extensions, enlargements, additions, and improvements;

(v) Architectural, engineering, financial, and legal services;

(vi) Plans, specifications, studies, surveys, and estimates of cost and of revenues;

(vii) Administrative expenses necessary or incident to determining to proceed with the infrastructure improvements; and

(viii) Other expenses as may be necessary or incident to the construction, acquisition, and financing of the infrastructure improvements.

(b) (1) Subject to the provisions of this section, and for the purpose stated in paragraph (2) of this subsection, each municipal corporation in the State may:

(i) Create a special taxing district;

(ii) Levy ad valorem or special taxes; and

(iii) Issue bonds and other obligations.

(2) The purpose of the authority granted under paragraph (1) of this subsection is to provide financing, refinancing, or reimbursement for the cost of the design, construction, establishment, extension, alteration, or acquisition of adequate storm drainage systems, sewers, water systems, roads, bridges, culverts, tunnels, streets, sidewalks, lighting, parking, parks and recreation facilities, libraries, schools, and other infrastructure improvements as necessary, whether situated within the special taxing district or the municipal corporation or outside of the municipal corporation if notification is given to the governmental unit having jurisdiction over the infrastructure improvement and if the infrastructure improvement is reasonably related to other infrastructure improvements within the special taxing district, for the development and utilization of the land, each with respect to any defined geographic region within the municipal corporation.

(c) (1) In addition to other powers a municipal corporation may have, and notwithstanding the provisions of any other public local law, public general law, or municipal charter, a municipal corporation may borrow money by issuing and selling bonds for the purpose stated in subsection (b)(2) of this section if a request to the municipal corporation is made by both:

(i) At least two-thirds of the owners of the real property located within the special taxing district, provided that:

1. Multiple owners of a single parcel are treated as a single owner; and

2. A single owner of multiple parcels is treated as one owner; and

(ii) The owners of at least two-thirds of the assessed valuation of the real property located within the special taxing district.

(2) This section is self-executing and does not require any municipal corporation to amend its charter to exercise the powers granted under this section.

(d) (1) Bonds shall be payable from the special fund required under subsection (e) of this section.

(2) The governing body of a municipal corporation that issues bonds under this section may also:

(i) Establish sinking funds;

(ii) Establish debt service reserve funds;

(iii) Pledge other assets and revenues towards the payments of the principal and interest; or

(iv) Provide for municipal bond insurance or any other type of financial guaranty of the bonds.

(3) All proceeds received from any bonds issued and sold shall be applied solely to pay the cost of infrastructure improvements, including:

(i) Costs of design, construction, establishment, extension, alteration, or acquisition of infrastructure improvements;

(ii) Costs of issuing bonds;

(iii) Payment of the principal and interest on loans, money advances, or indebtedness incurred by a municipal corporation for any of the purposes stated in subsection (b)(2) of this section, including the refunding of bonds previously issued under this section; and

(iv) Funding of a debt service reserve fund or payment of interest prior to, during, or for a limited period of time after construction.

(e) (1) Before issuing these bonds, the governing body of the municipal corporation shall:

(i) Designate by resolution an area or areas as a special taxing district;

(ii) Subject to paragraph (2) of this subsection, adopt a resolution creating a special fund with respect to the special taxing district; and

(iii) Provide for the levy of an ad valorem or special tax on all real and personal property within the special taxing district at a rate or amount designed to provide adequate revenues to pay the principal of, interest on, and redemption premium, if any, on the bonds, to replenish any debt service reserve fund, and for any other purpose related to the ongoing expenses of or security for the bonds. Ad valorem taxes shall be levied in the same manner, upon the same assessments, for the same period or periods, and as of the same date or dates of finality as are now or may hereafter be prescribed for general ad valorem tax purposes within the district, and shall be discontinued when all of the bonds have been paid in full. Special taxes shall be levied pursuant to subsection (n) of this section.

(2) The resolution creating a special fund under paragraph (1)(ii) of this subsection shall:

(i) Pledge to the special fund the proceeds of the ad valorem or special tax to be levied as provided under paragraph (1)(iii) of this subsection; and

(ii) Require that the proceeds from the tax be paid into the special fund.

(f) When no bonds authorized by this section are outstanding with respect to a special taxing district, and the governing body of the municipal corporation so determines, moneys in the special fund may be paid to the general fund of the municipal corporation.

(g) (1) In order to implement the authority conferred upon it by this section to issue bonds, the governing body of a municipal corporation shall adopt an ordinance or resolution that:

(i) Specifies and describes the proposed undertaking and states that it has complied with subsection (e) of this section;

(ii) Specifies the maximum principal amount of bonds to be issued;

(iii) Specifies the maximum rate or rates of interest for the bonds; and

(iv) Agrees to a covenant to levy upon all real and personal property within the special taxing district ad valorem taxes or special taxes in rate and amount at least sufficient in each year in which any of the bonds are outstanding to provide for the payment of the principal of and the interest on the bonds.

(2) The ordinance or resolution may specify or may authorize its finance board or other appropriate financial officer, by resolution or ordinance, or its chief executive officer, by executive order, to specify any of the following as it deems appropriate to effect the financing of the proposed undertaking:

(i) The actual principal amount of the bonds to be issued;

(ii) The actual rate or rates of interest for the bonds;

(iii) The manner in which and the terms upon which the bonds are to be sold;

(iv) The manner in which and the times and places that the interest on the bonds is to be paid;

(v) The time or times that the bonds may be executed, issued, and delivered;

(vi) The form and tenor of the bonds and the denominations in which the bonds may be issued;

(vii) The manner in which and the times and places that the principal of the bonds is to be paid, within the limitations set forth in this section;

(viii) Provisions pursuant to which any or all of the bonds may be called for redemption prior to their stated maturity dates; or

(ix) Any other provisions not inconsistent with this section as shall be determined by the governing body of the municipal corporation to be necessary or desirable to effect the financing of the proposed undertaking.

(3) (i) Except as may be required by the Maryland Constitution, an ordinance or resolution authorizing the bonds required under this subsection, an ordinance, resolution, or executive order passed or adopted in furtherance of the required ordinance or resolution, the bonds, the designation of a special taxing district, or the levy of a special ad valorem tax or special tax may not be subject to any referendum by reason of any other State or local law.

(ii) The ordinance or resolution authorizing the bonds required under this subsection, any ordinance, resolution, or executive order passed or adopted in furtherance of the required ordinance or resolution, the bonds, the designation of a special taxing district, or the levy of a special ad valorem tax or special tax shall be subject to the request of the landowners as specified under subsection (c)(1) of this section.

(4) The special fund and any sinking fund established by any municipal corporation to provide for the payment of the principal of or interest on any bonds issued by the municipal corporation under the provisions of this section may not be invested by the fiscal officer of the municipal corporation having custody of the special fund and any sinking fund except in the manner prescribed by Article 31, §§ 6 and 7 of the Code. Any such fiscal officer having custody of the proceeds of sale of any such bonds may invest the proceeds, pending the expenditure thereof, as prescribed under the provisions of Article 95, § 22 of the Code.

(h) The principal amount of the bonds, the interest payable on the bonds, their transfer, and any income derived from the transfer, including any profit made in the sale or transfer of the bonds, shall be exempt from taxation by the State and by the counties and municipal corporations of the State but shall be included, to the extent required under Title 8, Subtitle 2 of the Tax - General Article, in computing the net earnings of financial institutions.

(i) (1) All bonds may be in bearer form or in coupon form or may be registrable as to principal alone or as to both principal and interest. Each of the bonds shall be deemed to be a security as defined in § 8-102 of the Commercial Law Article, whether or not it is either one of a class or series or by its terms is divisible into a class or series of instruments.

(2) All bonds shall be signed manually or in facsimile by the chief executive officer of the municipal corporation, and the seal of the municipal corporation shall be affixed to the bonds and attested by the clerk or other similar administrative officer of the municipal corporation. If any officer whose signature or countersignature appears on the coupons ceases to be such officer before delivery of the bonds, the officer's signature or countersignature shall nevertheless be valid and sufficient for all purposes the same as if the officer had remained in office until delivery.

(3) All bonds shall mature not later than 30 years from their date of issuance.

(4) All bonds shall be sold in the manner, either at public or private sale, and upon the terms as the governing body of the municipal corporation deems best. Any contract for the acquisition of property may provide that payment shall be made in bonds. Bonds issued under this section are not subject to Article 31, §§ 9, 10, and 11 of the Code.

(j) Bonds issued under this section are securities:

(1) In which all public officers and public bodies of the State and its political subdivisions, all insurance companies, State banks and trust companies, national banking associations, savings banks, savings and loan associations, investment companies, executors, administrators, trustees and other fiduciaries may properly and legally invest funds, including capital in their control or belonging to them; and

(2) 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 obligations of the State is now or may hereafter be authorized by law.

(k) The powers granted under this section shall be regarded as supplemental and additional to powers conferred by other laws, and may not be regarded as in derogation of any powers now existing.

(l) This section, being necessary for the welfare of the State and its residents, shall be liberally construed to effect the purpose stated in subsection (b)(2) of this section.

(m) Unless otherwise provided in the charter, bylaws, or code of a municipal corporation, a municipal corporation shall hold a public hearing after not less than 10 days notice, published in a newspaper of general circulation in the municipal corporation, before an ordinance or resolution that designates a special taxing district, authorizes the issuance of bonds, or levies ad valorem taxes or special taxes under the provisions of this section may be finally enacted.

(n) (1) As an alternative to levying ad valorem taxes under this section, the governing body of the municipal corporation may levy special taxes on property in a special taxing district to cover the cost of infrastructure improvements.

(2) In determining the basis for and amount of the tax, the cost of an improvement may be calculated and levied:

(i) Equally per front foot, lot, parcel, dwelling unit or square foot;

(ii) According to the value of the property as determined by the governing body, with or without regard to improvements on the property; or

(iii) In any other reasonable manner that results in fairly allocating the cost of the infrastructure improvements.

(3) The governing body of the municipal corporation may provide by ordinance or resolution for:

(i) A maximum amount to be assessed with respect to any parcel of property located within a special taxing district;

(ii) A tax year or other date after which no further special taxes under this section shall be levied or collected on a parcel; and

(iii) The circumstances under which the special tax levied against any parcel may be increased, if at all, as a consequence of delinquency or default by the owner of that parcel or any other parcel within the special taxing district.

(4) The governing body by ordinance or resolution may establish procedures allowing for the prepayment of special taxes under this section.

(5) Special taxes levied under this subsection shall be collected and secured in the same manner as general ad valorem taxes unless otherwise provided in the ordinance or resolution and shall be subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided for general ad valorem taxes.

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