Budget, Fiscal, Procurement and Contracting Regulations
CHAPTER 74. BONDS AND NOTES OF THE STATE
§ 7401. Definitions.
As used in this chapter:
(1) "Authorization act" means an act of the General Assembly, concurred in by three fourths of all the members of each House,
appropriating funds of the State from the proceeds of bonds authorized to be issued by such act.
(2) "Bonds" means any bonds authorized to be issued by the State pursuant to an authorization act and to the payment of which
the State has pledged its full faith and credit.
(3) "Certificated obligation" means a registered bond, note or revenue note represented by an instrument.
(4) "Issuing officers" means the Governor, Secretary of State, State Treasurer and Secretary of Finance of the State.
(5) "Notes" means notes issued by the State in anticipation of the issuance of bonds authorized by an authorization act and
to the payment of which the State has pledged its full faith and credit.
(6) "Revenue notes" means notes issued by the State in anticipation of the receipt by the State of taxes and revenues payable
to the State and the payment of which the State has pledged its full faith and credit.
(7) "Uncertificated obligation" means a registered bond, note or revenue note which is not represented by an instrument.
29 Del. C. 1953, § 7401; 54 Del. Laws, c. 124; 59 Del. Laws, c. 378, § 5; 62 Del. Laws, c. 146, §§ 6, 7; 64 Del. Laws, c. 131, § 11(a), (f); 65 Del. Laws, c. 119, § 1.;
§ 7402. Issuing authority.
(a) The issuing officers shall authorize the issuance of bonds, notes and revenue notes of the State by resolution adopted
by the unanimous vote of the issuing officers. Each issuing officer may designate a deputy to represent the issuing officer
as an issuing officer at meetings of the issuing officers with full powers to act and vote in the issuing officer's behalf.
Bonds and notes shall be issued for the purposes authorized in an authorization act. Revenue notes shall be issued for purposes
authorized by this chapter. Bonds, notes and revenue notes may be issued regardless of the treatment of interest thereon for
federal income tax purposes.
(b) Notwithstanding any other laws to the contrary, the issuing officers shall approve, by the same vote, individual contracts
or classes of contracts with firms or individuals entered into by bond issuing authorities, agencies and instrumentalities
created by the State other than authorities, agencies or instrumentalities constituting institutions of higher learning.
(c) Any other law to the contrary notwithstanding, the General Assembly hereby authorizes the issuance, from time to time,
of general obligation bonds to refund, prior to their stated maturity, all or any portion of the outstanding general obligation
bonds issued by the State and costs incidental thereto; provided, however, that the present value of the aggregate principal
and interest payments of the refunding bonds must be less than the present value of the aggregate principal and interest payments
on the bonds to be refunded.
(1) The present value of the aggregate principal and interest payments of the refunding bonds and of the bonds to be refunded
shall be discounted at the effective interest rate on the refunding bonds, calculated based on the internal rate of return.
(2) Refunding bonds may be issued in a principal amount which exceeds the principal amount of the bonds to be refunded, so
long as the present value of the aggregate principal and interest payments of the refunding bonds are less than the present
value of the aggregate principal and interest payments on the bonds to be refunded.
(3) Section 7423 of this title shall not apply to refunding bonds issued in accordance with, and under the limitations of,
this subsection.
(4) The issuing officers, by resolution adopted by unanimous vote and without further authorization of the General Assembly,
may resolve to issue refunding bonds authorized by this subsection at any time prior to the final maturity of the bonds to
be refunded. Subject to the limitations imposed by this subsection, but any other law to the contrary notwithstanding, refunding
bonds may be sold at public or private sale, above or below par, with principal installments payable at such times and in
such amounts and on such other terms and conditions as the issuing officers determine. Without limiting the foregoing, refunding
bonds are not required to pay current interest for all or any portion of the issue, and thus may be "zero coupon" or "capital
appreciation" bonds.
(5) No refunding bonds may be issued unless all or a portion of the proceeds of the refunding bonds are deposited irrevocably
in an account pledged to pay, and are sufficient together with any other available assets in such account to meet, the payment
when due of the principal, premium (if any) and interest on the bonds to be refunded. The proceeds of the refunding bonds
pledged to pay the bonds to be refunded may be invested in direct obligations of, or obligations the principal of and interest
on which are guaranteed by, the United States government.
(6) Any other law to the contrary notwithstanding, the issuing officers, by resolution adopted by unanimous vote, may resolve
to issue refunding bonds to refund the State's Certificates of Participation (Real Estate Acquisition Program) Series 1989
so long as the other requirements of this section are satisfied and assuming that said Certificates of Participation are treated
as the bonds to be refunded.
29 Del. C. 1953, § 7403; 54 Del. Laws, c. 124; 62 Del. Laws, c. 146, §§ 6, 8; 63 Del. Laws, c. 179, § 8; 64 Del. Laws, c. 131, § 11(c), (f); 65 Del. Laws, c. 280, § 1; 66 Del. Laws, c. 92, § 19; 69 Del. Laws, c. 187, § 1; 70 Del. Laws, c. 186, § 1.;
§ 7403. Notes.
In anticipation of the issuance of bonds, the issuing officers may issue and sell notes of the State at either public or private
sale for not less than par and accrued interest, at a rate to be determined by the issuing officers. Such notes may be issued
for a period of not exceeding 1 year and may be renewed from time to time for periods not exceeding 1 year but all such notes,
including renewals, shall mature and be paid from sources, including the proceeds of bonds, but other than the proceeds of
notes, not later than 4 years after their initial date of issuance. No notes shall be issued in excess of the amount of bonds
authorized and unissued in anticipation of which the notes are issued. All other terms, forms and contents of such notes shall
be determined by the issuing officers subject to this chapter.
29 Del. C. 1953, § 7404; 54 Del. Laws, c. 124; 59 Del. Laws, c. 387, § 1; 62 Del. Laws, c. 146, §§ 6, 9; 64 Del. Laws, c. 131, § 11(f).;
§ 7404. Revenue notes.
(a) If, at any time during any fiscal year, but prior to June 25 of that year, there should be a casual deficiency of revenue
in the General Fund to pay General Fund obligations or to pay existing debts, the Governor, Secretary of State and State Treasurer
(the "issuing officers") are authorized to issue revenue anticipation notes of the State in an amount they determine necessary
to meet and to pay any or all of such obligations or debts.
(b) The issuing officers are hereby authorized to determine the terms, form and contents of such notes and to sell such notes,
at such price or prices, at such rate or rates, at public or private sale, in such manner and from time to time, subject to
this chapter, as they shall determine. Such notes and any renewals thereof shall mature within 1 year from date of the original
issuance of such notes, and shall be payable at a bank (herein referred to as "the bank") chosen at the discretion of the
issuing officers. Such notes shall be imprinted with the stamp of the Governor's signature and the stamp of the signature
of the Secretary of State, and shall be manually signed by the State Treasurer. The Great Seal shall be impressed on all such
notes or shall be reproduced thereon, in facsimile, and such signatures and such notes shall be authenticated by an officer
of the bank.
(c) The faith and credit of the State are hereby pledged for the payment of the principal of and interest on such notes. All
expenses incidental to the advertisement, preparation, issuance and delivery of revenue anticipation notes and the principal
of and interest on such notes shall be paid by the State Treasurer from the General Fund.
(d) If, at any time during the fiscal year, but prior to June 15, there shall be a casual deficiency of revenue in the General
Fund to pay General Fund obligations or to pay existing debts, the State Treasurer may transfer available money from the State's
special funds to the General Fund to pay such obligations or debts. Such money shall be reimbursed to the appropriate special
funds as soon as sufficient General Fund moneys become available, but not later than June 15.
62 Del. Laws, c. 146, §§ 6, 10; 64 Del. Laws, c. 131, § 11(f); 65 Del. Laws, c. 87, § 96.;
§ 7405. Full faith and credit of the State pledged.
All bonds, notes and revenue notes shall be direct general obligations of the State and the full faith and credit of the State
are expressly pledged for the prompt and complete payment of the principal of and interest on such bonds, notes and revenue
notes when due.
29 Del. C. 1953, § 7405; 54 Del. Laws, c. 124; 62 Del. Laws, c. 146, §§ 6, 11; 64 Del. Laws, c. 131, § 11(f).;
§ 7406. Terms, forms and contents of bonds; installment payments.
(a) The resolution of the issuing officers authorizing the issuance of bonds may include provisions for the date or dates
of such bonds; the maturity of such bonds, which shall not exceed 20 years from their date; provisions for serial, term or
"capital appreciation" bonds; sinking fund or reserve fund requirements, if any; due dates of the interest thereon; the form
of bonds (including whether bonds shall be certificated or uncertificated); the denominations and designation of bonds; registration,
conversion and transfer privileges; the terms of redemption with or without premium; the date and manner of sale of bonds
(which may be a private, negotiated sale only if any of the bonds of a series of bonds or all the bonds to be sold are capital
appreciation bonds); provisions for the consolidation of bonds authorized to finance all or a portion of the costs of projects
authorized in 1 or more authorization acts with bonds authorized by 1 or more authorization acts; limitations with respect
to the interest rate or rates on bonds; provisions for receipt and deposit or investment of the good faith deposit pending
delivery of bonds and such other terms and conditions of bonds and of the issuance and sale thereof as the issuing officers
may determine to be in the best interests of the State.
(b) Notwithstanding the foregoing provisions of this section or any other law to the contrary, the issuing officers shall
be required to provide in the resolution authorizing the issuance of general obligation bonds of the State (other than capital
appreciation bonds as defined in § 7425 of this title):
(1) For the payment of bonds in annual installments, the first of which shall be not more than 1 year from the date of such
bonds; and
(2) That no annual installment, except in the case of refunding of the bonds, shall be more than any prior installment of
those bonds.
29 Del. C. 1953, §§ 7406-7409; 54 Del. Laws, c. 124; 62 Del. Laws, c. 146, §§ 6, 12; 64 Del. Laws, c. 131, § 11(b), (f); 64 Del. Laws, c. 343, § 12(a); 66 Del. Laws, c. 371, § 1.;
§ 7407. Sale of bonds.
Sufficient notice of public sale of bonds shall be deemed to have been given if such notice shall have been published at least
once 5 or more days before the date of sale, in at least 1 newspaper of general circulation in the State, and in a financial
journal of general circulation in the City of New York, New York.
29 Del. C. 1953, § 7414; 54 Del. Laws, c. 124; 60 Del. Laws, c. 372, § 1; 62 Del. Laws, c. 146, §§ 6, 13; 64 Del. Laws, c. 131, § 11(f); 71 Del. Laws, c. 378, § 43.;
§ 7408. Place of payment.
Bonds, notes and revenue notes and the interest thereon shall be payable at such place or places within or without the State
as the issuing officers may determine by resolution.
62 Del. Laws, c. 146, §§ 6, 14; 63 Del. Laws, c. 142, § 49; 64 Del. Laws, c. 131, § 11(f).;
§ 7409. Recitals in bonds, notes and revenue notes conclusive on State; negotiability.
(a) All bonds and notes shall recite that they are issued for a purpose or purposes set forth in an authorization act. Revenue
notes shall recite that they are issued for 1 or more of the purposes for which revenue notes may be authorized by this chapter.
Bonds, notes and revenue notes shall also recite that they are issued pursuant to the Constitution and laws of this State.
Upon the sale and delivery of any such bonds, notes or revenue notes against payment, such recitals shall be conclusive as
to the right, power and authority of the State to issue such bonds, notes or revenue notes and of the legality, validity and
enforceability of the obligation of the State to pay principal of and interest on such bonds, notes and revenue notes. The
legality, validity and enforceability of such bonds, notes or revenue notes containing such recitals shall never be questioned
in any court of law or equity by the State or any person after the issuance, execution and delivery against payment of such
bonds, notes and revenue notes.
(b) All bonds, notes and revenue notes are hereby declared to have all the qualities and incidents of negotiable instruments
under the commercial code of the State.
29 Del. C. 1953, § 7406; 54 Del. Laws, c. 124; 62 Del. Laws, c. 146, §§ 6, 15; 64 Del. Laws, c. 131, § 11(f).;
§ 7410. Execution of bonds, notes and revenue notes.
(a) Bonds, notes and revenue notes, other than uncertificated obligations, shall be executed on behalf of the State by the
issuing officers and shall bear the impression, or a facsimile, of the Great Seal of the State. All the signatures of the
issuing officers may be engraved, printed or stamped on bonds, notes or revenue notes notwithstanding any other law to the
contrary but no such signatures nor the impression or a facsimile of the Great Seal need appear on an uncertificated obligation.
(b) Interest coupons on certificated obligations shall bear the facsimile signature of the State Treasurer. In case any officer
whose signature or a facsimile of whose signature shall appear on any bonds or coupons, notes or revenue notes, shall cease
to be such officer before the delivery of such obligations, such signature or such facsimile shall nevertheless be valid and
sufficient for all purposes as if the officer had remained in office until such delivery.
29 Del. C. 1953, § 7411; 54 Del. Laws, c. 124; 62 Del. Laws, c. 146, §§ 6, 16; 64 Del. Laws, c. 131, § 11(d), (f); 70 Del. Laws, c. 186, § 1.;
§ 7411. Exemption from taxation.
Bonds, notes and revenue notes and the interest thereon shall be exempt from income taxation by the State or any political
subdivision thereof.
29 Del. C. 1953, § 7405; 54 Del. Laws, c. 124; 62 Del. Laws, c. 146, §§ 6, 17; 64 Del. Laws, c. 131, § 11(f).;
§ 7412. Registration, recording and cancellation agent.
The issuing officer shall, by resolution, direct the State Treasurer to contract, in such manner as the issuing officers shall
prescribe, with a banking or other institution to act as: (1) Registration agent for bonds, notes and revenue notes; (2) recording
agent to provide a permanent record of all bonds and coupons pertaining thereto, notes and revenue notes which shall have
been paid or redeemed; and (3) cancellation agent to cancel all such bonds and coupons pertaining thereto, notes and revenue
notes which shall have been paid or redeemed. The State Treasurer may, at the direction of the issuing officers, contract
with such institution for related services. Any such contract shall provide that the agent shall be responsible to the State
for the faithful and safe conduct of the services to be performed by it as registration agent, recording agent or cancellation
agent, or services related thereto, for the fidelity and integrity of the officers and agents of such contracting institution
performing the duties of a registration agent, recording agent or cancellation 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 contract may be terminated by the State Treasurer at any time, if
so directed by the issuing officers. Any such contract shall be filed in the office of the State Treasurer as a public record.
29 Del. C. 1953, § 7413A; 58 Del. Laws, c. 315, § 8; 59 Del. Laws, c. 378, § 6; 62 Del. Laws, c. 146, §§ 6, 18; 63 Del. Laws, c. 142, § 50; 64 Del. Laws, c. 131, § 11(f).;
§ 7413. Replacement of lost, stolen, mutilated or destroyed obligations.
(a) The State Treasurer may issue a replacement bond, with coupons pertaining thereto, a replacement note or a replacement
revenue note, to replace unmatured bonds and coupons, notes or revenue notes, respectively, which have been lost, stolen,
mutilated or destroyed upon receipt of: (1) Satisfactory proof (i) of ownership and (ii) of loss or destruction, or, in the
case of a mutilated or destroyed bond, coupon, note or revenue note, the mutilated or destroyed bond, coupon, note or revenue
note; (2) adequate security to indemnify the State and the bank or banks at which the bond, coupon, note or revenue note is
payable against any loss that may be suffered by them on account of the issuance of such replaced obligation; and (3) payment
of the cost of preparation of the replacement obligation.
(b) Any replacement bond, coupon, note or revenue note shall be of the same form and tenor as those originally issued, shall
be executed by the manual or facsimile signature of the officers in office at the time of the replacement and shall bear an
impression or reproduction of the Great Seal of the State or a facsimile thereof. A facsimile of the State Treasurer's signature
may appear on coupons but on a bond, note or revenue note the signature of the State Treasurer shall be in the State Treasurer's
own proper handwriting. There shall be endorsed on the bond, note or revenue note a statement in substantially the following
form:
"This bond (note or revenue note) has been reissued to replace a (lost, stolen, mutilated or destroyed) (bond, note or revenue
note)."
29 Del. C. 1953, § 7412A; 57 Del. Laws, c. 279; 62 Del. Laws, c. 146, §§ 6, 19; 64 Del. Laws, c. 131, § 11(f); 70 Del. Laws, c. 186, § 1.;
§ 7414. Deposit of money; advances from funds.
(a) All proceeds from the sale of bonds or notes other than premium or accrued interest shall be deposited by the State Treasurer
in a special fund or funds of the State and applied for the purposes for which such bonds or notes were issued or as otherwise
provided by law. All proceeds from the sale of revenue notes and all accrued interest from the sale of bonds, or revenue notes
shall be deposited by the State Treasurer in the General Fund. Any premium from bonds or revenue notes sold after January
1, 2004 (including any such premium previously deposited in the General Fund) shall, at the discretion of the Director of
the Office of Management and Budget, Controller General and the Secretary of Finance:
(1) Be deposited in a special fund of the State and applied for the purposes for which such bonds or notes were issued or
as otherwise provided by law; or
(2) Be deposited in any escrow fund to redeem, refund or, defease debt service on existing bonds or notes of the State, or
debt service on any debt or other obligation of an instrumentality of the State.
In the event that a deposit is made pursuant to paragraph (a)(1) of this section above, bond authorization shall be reduced
by a corresponding amount. Under no circumstances shall any proceeds, premium or accrued interest be applied to pay the costs
of any project not authorized by the General Assembly.
(b) The State may advance money to a special fund of the State established to hold money raised or to be raised to finance
costs of projects authorized to be financed with the proceeds of bonds or notes after the adoption of an authorization act
but prior to the issuance of bonds or notes authorized to be issued by that authorization act. Money may be advanced, in
an amount not exceeding the greater of 3 percent of General Fund revenues for the coming fiscal year, as determined by the
Delaware Economic and Financial Advisory Council, or $60,000,000, from any other fund of the State unless prohibited by any
other law. Any money advanced must be repaid at the time the money advanced is needed for the purposes for which the money
was held before being advanced.
29 Del. C. 1953, § 7415; 54 Del. Laws, c. 124; 62 Del. Laws, c. 146, §§ 6, 20; 62 Del. Laws, c. 407, § 6; 63 Del. Laws, c. 142, § 51; 63 Del. Laws, c. 179, § 9; 64 Del. Laws, c. 131, § 11(f); 66 Del. Laws, c. 92, § 20; 73 Del. Laws, c. 95, § 57; 74 Del. Laws, c. 221, § 6; 75 Del. Laws, c. 88, § 21(13); 75 Del. Laws, c. 254, § 1.;
§ 7415. Use of proceeds of bonds and notes.
The funds appropriated by an authorization act may be used only for the costs of the projects set forth in such act in an
amount for each such project not exceeding the amount authorized by such act for such project. Costs of projects may include
costs of surveys, maps, plans, designs, inspections, incidental land and equipment acquisition, incidental construction and
reconstruction, landscaping, costs of issuing bonds and notes, capitalized interest during construction and reconstruction,
fees for construction managers or persons performing similar functions and other costs incidental to the project. Such funds
shall not be used for ordinary or normal maintenance expenses or repair, except for costs authorized by law for maintenance
of and minor capital improvements to school buildings.
29 Del. C. 1953, § 7415; 54 Del. Laws, c. 124; 62 Del. Laws, c. 146, §§ 6, 21; 64 Del. Laws, c. 131, § 11(f).;
§ 7416. Timetable for use of funds and the sale of bonds and notes; commencement of authorized project.
(a) No funds appropriated by an authorization act shall be encumbered more than 3 years after the passage of such act for
any individual project unless: (1) Such project has progressed into any of the following phases prior to that date: Planning,
initial engineering, land, building or equipment acquisition, construction or reconstruction; and (2) 85 percent of the project
costs have been expended on 1 or more of such phases.
(b) No bonds or notes shall be issued or funds borrowed pursuant to an authorization act, 4 years after the passage of such
act, except: (1) As provided in 54 Del. Laws, c. 345, as amended (Chapter 75 of this title, as amended); and (2) with respect
to bonds authorized prior to this chapter which shall remain subject to the law under which they were originally authorized.
(c) Any project authorized to be undertaken with the proceeds of bonds of the State shall commence in the fiscal year in which
it is authorized. If such duly authorized project has not proceeded into 1 or more of the phases identified in subsection
(a) of this section within 18 months from the effective date of the original authorization, the authorized but unsold portion
of the bonds shall automatically be deauthorized and any unspent cash balances shall be reverted to the Bond Reversion Account
to be applied to the costs of any other authorized project, pursuant to § 7418 of this title.
29 Del. C. 1953, § 7416; 55 Del. Laws, c. 337; 62 Del. Laws, c. 146, §§ 6, 22; 64 Del. Laws, c. 131, § 11(f); 64 Del. Laws, c. 343, § 12(e), (f).;
§ 7417. Payment of debt service; first lien.
(a) Each annual Budget Appropriation Bill enacted by the General Assembly shall make sufficient provisions for the payment
of principal of, premium, if any, and interest on all bonds, notes and revenue notes payable or to be paid by their terms
during the fiscal year of the State for which such Budget Appropriation Bill is enacted.
(b) Vouchers for the payment of principal of, premium, if any, and interest on bonds, notes and revenue notes for payment
of expenses incident to the issuance of such obligations shall be signed by the State Treasurer.
(c) Any appropriation made by the General Assembly to pay principal of, premium, if any, and interest on bonds, notes or revenue
notes may be applied to pay principal of, premium, if any, and interest on obligations of other issuers pursuant to an agreement
made by the issuing officers with a person agreeing to pay principal of, premium, if any, or interest on bonds, notes or revenue
notes issued by the State.
(d) If, at any time, the State fails to make sufficient provisions to pay such principal of, premium, if any, and interest
on bonds, notes or revenue notes, or, at the time such principal, premium or interest is payable sufficient moneys are unavailable
for such payment, a sufficient sum shall be set apart by the State Treasurer from the first revenues thereafter received by
the State and shall be applied to such purposes. The State Treasurer may be required to set apart and apply such revenues
as provided herein at the suit of any holder of obligations for which such insufficient provision is made.
62 Del. Laws, c. 146, §§ 6, 23; 64 Del. Laws, c. 131, § 11(f); 66 Del. Laws, c. 360, § 16.;
§ 7418. Use of unexpended funds.
Any funds borrowed pursuant to an authorization act, and remaining unencumbered after the completion or abandonment of a project
authorized to be financed pursuant to such act, or because a project authorized to be financed by such act is not timely undertaken,
or upon the expiration of the period set forth in § 7416 of this title, shall be deposited in a special fund and applied,
with the approval of the issuing officers, to the cost of financing any previously authorized projects. The head of the department
or agency to which such funds were appropriated for a project shall determine when such project is completed or abandoned.
60 Del. Laws, c. 135, § 1; 62 Del. Laws, c. 146, §§ 6, 24; 64 Del. Laws, c. 131, § 11(f).;
§ 7419. Approval of plans, specifications, estimates and cash flows of projects.
(a) Delaware Technical and Community College, Delaware State University and all state departments and agencies shall submit
to Facilities Management of the Office of Management and Budget all proposed contracts for architectural services and all
architectural, structural, electrical and mechanical plans, specifications and cost estimates. Facilities Management of the
Office of Management and Budget shall be responsible for reviewing and approving such plans, specifications and cost estimates
prior to bid advertisement, and no such contracts nor contracts for construction and reconstruction of such projects (except
highway construction and reconstruction contracts and school district minor capital improvements contracts) shall be executed
without the prior approval of Facilities Management of the Office of Management and Budget. All such contracts shall be let
on the condition, among others, that the contractor comply with the State's equal opportunity laws. Facilities Management
of the Office of Management and Budget shall insure that approved projects are not inconsistent with any authorization of
budget act.
(b) Each state agency, department and institution of higher learning to which proceeds of bonds or notes are appropriated,
must, on an annual basis, report to the Director of the Office of Management and Budget the status and anticipated cash flow
for each project which is not complete.
62 Del. Laws, c. 146, §§ 6, 25; 63 Del. Laws, c. 189, § 5(h); 64 Del. Laws, c. 131, § 11(f); 65 Del. Laws, c. 434, §§ 3, 4; 69 Del. Laws, c. 10, §§ 11, 12; 69 Del. Laws, c. 67, § 2; 75 Del. Laws, c. 88, §§ 21(13), 37.;
§ 7420. Project restrictions.
(a) All new construction and/or reconstruction of existing structures financed with the proceeds of bonds or notes shall comply
with flood plain management requirements adopted by the municipality in which such structure is located pursuant to the National
Flood Insurance Act of 1968, as amended, or successor acts. If any such structure is in a flood program nonparticipating municipality,
then the State shall comply with the criteria set forth in Title 24, Code of Federal Regulations, §§ 1910.3, 1910.4 and 1910.5
[now §§ 60.3, 60.4, 60.5 and 60.6] issued pursuant to the National Flood Insurance Act of 1968, as amended, or successor acts.
(b) All projects funded with the proceeds of bonds or notes shall be built to standards that are no less stringent than American
Society of Heating, Refrigerating, and Air Conditioning Engineering, Inc., Standard 90-75, or successor standards.
(c) The restrictions imposed by this section shall be applicable to projects for which no expenditure has been made prior
to July 12, 1979, unless such project has been made subject to the same restrictions by another act of the General Assembly
or by contract.
(d) The department, agency or other body of the State to which proceeds of bonds or notes are appropriated shall require the
inspection of buildings to be constructed, reconstructed or rehabilitated with the proceeds of bonds or notes, and, at the
discretion of the Director of the Office of Management and Budget, shall require the inspection of other structures to be
financed with the proceeds of such obligations excluding highways, roads and bridges. Proceeds of bonds or notes shall be
allocated to provide for the cost of inspecting the projects to be financed with such funds. The portion of the total funds
appropriated to the cost of any such inspection shall not exceed the following percentages of such total funds appropriated
to the cost of such projects:
(1) Projects with a maximum cost in excess of $1,000,000
11/2%
(2) Projects with a maximum cost of $1,000,000 or less
13/4%
(3) Reconstruction and renovation projects
13/4%
The department or agency of the State to which proceeds of bonds or notes are appropriated shall let contracts for such inspection.
If the total maximum cost of a project is less than $50,000, the employment of an inspector shall be discretionary with the
department, agency or other body to whom such funds are appropriated. If a department, agency or other body retains a construction
manager, retention of an inspector shall be discretionary with the department, agency or other body regardless of the total
maximum cost of the project. In contracting for the inspection of such projects, first preference shall be given to an experienced
and able Delaware organization offering to provide such inspection services on a nonprofit, at-cost basis. Such contracts
shall not be deemed public works contracts as defined in 54 Del. Laws, c. 106, as amended (Chapter 69 of this title, as amended).
If no such organization is able or willing to perform such inspection services on such nonprofit, at-cost basis, then the
contracts for such services may be let with profit-making organizations subject to 54 Del. Laws, c. 106, as amended (Chapter
69 of this title, as amended).
62 Del. Laws, c. 146, §§ 6, 26; 63 Del. Laws, c. 189, § 5(h); 64 Del. Laws, c. 131, §§ 11(f), 17(a); 69 Del. Laws, c. 10, § 13; 75 Del. Laws, c. 88, § 21(13).;
§ 7421. Bonds, notes and revenue notes as legal investments for institutions and fiduciaries; legal deposit.
(a) Bonds, notes and revenue notes are securities in which any officer of the State and any officers of political subdivisions,
administrative departments, boards and commissions of the State, all banks, bankers, savings banks, trust companies, savings
and loan associations, investment companies and other persons carrying on a banking business, all insurance companies, insurance
associations and other persons carrying on an insurance business and all administrators, executors, guardians, trustees and
other fiduciaries, and all other persons whatsoever who are now or may, on and after July 12, 1979, be authorized to invest
in bonds, notes, revenue notes or other obligations of the State, may properly and legally invest any funds, including capital
belonging to them or within their control.
(b) Such bonds, notes and revenue notes are securities which may properly and legally be deposited with and received by any
officer of the State, or an officer of any political subdivision or agency of the State, for any purpose for which the deposit
of bonds, notes, revenue notes or other obligations of the State is now or may, on and after July 12, 1979, be authorized
by law.
62 Del. Laws, c. 146, §§ 6, 27; 64 Del. Laws, c. 131, § 11(f).;
§ 7422. Limitations on debt and other obligations.
(a) For the purposes of this section:
(1) "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) of this section), means the maximum payments due
with respect to all such obligations in any 1 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.
(2) "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 (provided that any such guaranteed obligations
shall be included only to the extent any such obligations are in default); and (B) all obligations of the State or any agency
or authority thereof extending beyond 1 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;
(C) any tax or other revenue anticipation notes or bonds of the State; or (D) any obligations to the extent that the debt
service with respect thereto is reasonably expected to be offset (as determined by the Secretary of Finance) by lease payments,
user fees, federal grants or other payments from some source other than the General Fund. Such payments shall be used expressly
for the purpose of paying such debt service.
(3) "Transportation Trust Fund debt obligations" means all debt obligations of the Delaware Transportation Authority, including
all obligations extending beyond 1 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 in any case are payable from
the Transportation Trust Fund. Transportation Trust Fund debt obligations do not include any obligations to the extent that
the debt service with respect thereto is reasonably expected to be offset (as determined by the Secretary of Finance) by lease
payments, user fees, federal grants or other payments from some nonstate source.
(b) The aggregate principal amount of tax supported obligations of the State which may be authorized by the State in any 1
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. Any amount of tax supported obligations which
were duly authorized before July 1, 1991, and which are duly deauthorized after June 30, 1991, may subsequently be reauthorized
without regard to the authorization limit otherwise provided by this subsection. Obligations authorized to refund other obligations
of the State shall not be subject to the limits of this subsection (b).
(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, in
both cases for the fiscal year following the fiscal year in which such obligation is incurred, such estimated revenue as determined
by the most recent projections made by the Delaware Economic and Financial Advisory Council and adjusted, if appropriate,
by the fiscal impact of subsequently enacted legislation as certified by the Secretary of Finance. 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 provided that such lease obligations shall not include
any obligations, the lease payments with respect to which are reasonably expected to be offset (as determined by the Secretary
of Finance) by lease payments, user fees, federal grants or other payments from some nonstate source. For the purposes of
this subsection, the maximum annual payments on the above-described lease obligations shall be as of the most recent date
available 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 following the fiscal year in which such obligation is incurred as estimated by the Secretary of Finance. 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) obligations guaranteed by the State except to the extent such obligations are in default; (iii) general obligation bonds
of the State issued prior to January 1, 1987, for the transportation related projects as certified by the Secretary of Finance;
(iv) tax or other revenue anticipation notes of the State; or (v) any obligations to the extent that the debt service with
respect thereto is reasonably expected to be offset (as determined by the Secretary of Finance) by lease payments, user fees,
federal grants or other payments from some source other than the General Fund.
(e) There shall be attached to every bill and amendment introduced in
the House of Representatives and/oor 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 Secretary of Finance
Debt Limit Statement Dated ____________
This Debt Limit Statement to be attached to ________________________ as
required by § 7422, Title 29, Delaware Code
(1) Estimated Net 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 Appro-
priation Bill for that fiscal year ………………………………… $ ____________
(2) Multiply by 5% ……………………………………………... x .05
(3) Maximum aggregate principal amount of new tax-supported obligations which
may be authorized by the State
in the fiscal year ending June 30, ______ ……………………… $ ____________
(4) Less aggregate principal amount of previously autho-
rized tax-supported obligations subject to debt limit …………... $ ____________
(5) AVAILABLE DEBT LIMIT prior to appended legislation
(3-4) …………………………………………………………….. $ ____________
(6) Less aggregate principal amount of new tax-supported obligations subject
to debt limit to be authorized pursu-
ant to appended legislation …………………………………….. $ ____________
The Secretary of Finance shall file said debt limit statement within 10 days
of said joint resolution with the Office of the Controller General and the
Director of the Office of Management and Budget.
(f) The certification of the Secretary of Finance referred to in this section
shall be in substantially the following form:
Certification of Secretary of Finance Regarding
Certain Revenue Supported Debt
____ B. No. ______ would authorize the issuance of $ ____________ principal
amount of obligations of the State for the purposes of
________________________. [Describe the arrangement pursuant to which it is
expected that the debt service will be offset by lease or other payments].
Accordingly, I hereby certify that I reasonably expect that the debt service
on $ ____________ principal amount of the above-described bonds will be offset
by payments to the State which are described in Title 29, Delaware Code, §
7422(a)(2)(D), (a)(3) or (d)(v).
____________ ____________________
Date Secretary of Finance
Date Secretary of Finance
29 Del. C. 1953, §§ 7422, 7423; 55 Del. Laws, c. 168, § 2; 57 Del. Laws, c. 176; 58 Del. Laws, c. 315, § 9; 58 Del. Laws, c. 420; 61 Del. Laws, c. 375, § 2; 62 Del. Laws, c. 146, §§ 6, 28; 63 Del. Laws, c. 189, § 5(h); 64 Del. Laws, c. 131, § 11(f); 68 Del. Laws, c. 7, § 1; 68 Del. Laws, c. 156, §§ 24(a)-(g); 69 Del. Laws, c. 10, § 14; 75 Del. Laws, c. 88, § 21(13).;
§ 7423. DEFAC projections and monitoring of debt limits.
The Delaware Economic and Financial Advisory Council shall publish at least semiannually in December and June the projections
described in § 7422(b) of this title. The Council shall also monitor the application and effect of the debt limits imposed
by § 7422 of this title and shall report annually to the General Assembly and the Governor with respect thereto. Such reports
shall include any recommendations with respect to such debt limits and the then current Debt Affordability Study prepared
by the Department of Finance.
68 Del. Laws, c. 7, § 2; 68 Del. Laws, c. 156, § 25.;
§ 7424. Right to obtain bondholder lists.
No holder or owner of any bond, note or revenue note shall have any right to obtain a list of registered owners or holders
of bonds, notes or revenue notes from the State or its agents by virtue of ownership nor holding of any such obligation, no
other law to the contrary notwithstanding.
64 Del. Laws, c. 131, § 11(e), (f); 70 Del. Laws, c. 186, § 1.;
§ 7425. Capital appreciation bonds and discount bonds.
The term "capital appreciation bonds" means any bond or bonds sold at a price substantially less than the principal amount
thereof and on which compounded interest is payable at maturity, as conclusively determined by the issuing officers, but only
if such bond or bonds are designated as capital appreciations by the issuing officers in the resolution authorizing the issuance
of bonds. For purposes of §§ 7422 and 7423 of this title, the aggregate principal amount of any capital appreciation bonds
or any other bonds sold to the public for a price less than the face amount thereof shall be the aggregate of the initial
offering prices at which such bonds are offered for sale to the public, whether in a private or negotiated sale or in a public
or competitive sale, or sold to the initial purchaser thereof in a private placement, without, in every case, reduction to
reflect underwriters' discount or placement agents' fees or other similar fees.
66 Del. Laws, c. 371, § 2; 69 Del. Laws, c. 386, § 31.;
§ 7426. Capital appreciation bonds and discount bonds; sale by State.
A maximum of 20 percent of the bonds authorized by each Bond and Capital Improvements Act of the State may be sold by the
State directly to retail purchasers or to financial intermediaries, or to an underwriter who agrees to use its best efforts
to sell such bonds to retail purchasers or to any intermediaries, such bonds to be herein referred to as "retail bonds." The
Secretary of Finance, the State Treasurer, the Director of the Office of Management and Budget and the Controller General
are hereby authorized to determine the terms and conditions of the retail bonds, and the manner, whether at public or private
negotiated sale, by which they shall be awarded to the purchasers thereof, notwithstanding anything to the contrary contained
in this chapter; provided, that the requirements of § 7422 of this title must be observed.
74 Del. Laws, c. 308, § 56; 75 Del. Laws, c. 88, § 21(13).;
Budget, Fiscal, Procurement and Contracting Regulations
CHAPTER 74. BONDS AND NOTES OF THE STATE
§ 7401. Definitions.
As used in this chapter:
(1) "Authorization act" means an act of the General Assembly, concurred in by three fourths of all the members of each House,
appropriating funds of the State from the proceeds of bonds authorized to be issued by such act.
(2) "Bonds" means any bonds authorized to be issued by the State pursuant to an authorization act and to the payment of which
the State has pledged its full faith and credit.
(3) "Certificated obligation" means a registered bond, note or revenue note represented by an instrument.
(4) "Issuing officers" means the Governor, Secretary of State, State Treasurer and Secretary of Finance of the State.
(5) "Notes" means notes issued by the State in anticipation of the issuance of bonds authorized by an authorization act and
to the payment of which the State has pledged its full faith and credit.
(6) "Revenue notes" means notes issued by the State in anticipation of the receipt by the State of taxes and revenues payable
to the State and the payment of which the State has pledged its full faith and credit.
(7) "Uncertificated obligation" means a registered bond, note or revenue note which is not represented by an instrument.
29 Del. C. 1953, § 7401; 54 Del. Laws, c. 124; 59 Del. Laws, c. 378, § 5; 62 Del. Laws, c. 146, §§ 6, 7; 64 Del. Laws, c. 131, § 11(a), (f); 65 Del. Laws, c. 119, § 1.;
§ 7402. Issuing authority.
(a) The issuing officers shall authorize the issuance of bonds, notes and revenue notes of the State by resolution adopted
by the unanimous vote of the issuing officers. Each issuing officer may designate a deputy to represent the issuing officer
as an issuing officer at meetings of the issuing officers with full powers to act and vote in the issuing officer's behalf.
Bonds and notes shall be issued for the purposes authorized in an authorization act. Revenue notes shall be issued for purposes
authorized by this chapter. Bonds, notes and revenue notes may be issued regardless of the treatment of interest thereon for
federal income tax purposes.
(b) Notwithstanding any other laws to the contrary, the issuing officers shall approve, by the same vote, individual contracts
or classes of contracts with firms or individuals entered into by bond issuing authorities, agencies and instrumentalities
created by the State other than authorities, agencies or instrumentalities constituting institutions of higher learning.
(c) Any other law to the contrary notwithstanding, the General Assembly hereby authorizes the issuance, from time to time,
of general obligation bonds to refund, prior to their stated maturity, all or any portion of the outstanding general obligation
bonds issued by the State and costs incidental thereto; provided, however, that the present value of the aggregate principal
and interest payments of the refunding bonds must be less than the present value of the aggregate principal and interest payments
on the bonds to be refunded.
(1) The present value of the aggregate principal and interest payments of the refunding bonds and of the bonds to be refunded
shall be discounted at the effective interest rate on the refunding bonds, calculated based on the internal rate of return.
(2) Refunding bonds may be issued in a principal amount which exceeds the principal amount of the bonds to be refunded, so
long as the present value of the aggregate principal and interest payments of the refunding bonds are less than the present
value of the aggregate principal and interest payments on the bonds to be refunded.
(3) Section 7423 of this title shall not apply to refunding bonds issued in accordance with, and under the limitations of,
this subsection.
(4) The issuing officers, by resolution adopted by unanimous vote and without further authorization of the General Assembly,
may resolve to issue refunding bonds authorized by this subsection at any time prior to the final maturity of the bonds to
be refunded. Subject to the limitations imposed by this subsection, but any other law to the contrary notwithstanding, refunding
bonds may be sold at public or private sale, above or below par, with principal installments payable at such times and in
such amounts and on such other terms and conditions as the issuing officers determine. Without limiting the foregoing, refunding
bonds are not required to pay current interest for all or any portion of the issue, and thus may be "zero coupon" or "capital
appreciation" bonds.
(5) No refunding bonds may be issued unless all or a portion of the proceeds of the refunding bonds are deposited irrevocably
in an account pledged to pay, and are sufficient together with any other available assets in such account to meet, the payment
when due of the principal, premium (if any) and interest on the bonds to be refunded. The proceeds of the refunding bonds
pledged to pay the bonds to be refunded may be invested in direct obligations of, or obligations the principal of and interest
on which are guaranteed by, the United States government.
(6) Any other law to the contrary notwithstanding, the issuing officers, by resolution adopted by unanimous vote, may resolve
to issue refunding bonds to refund the State's Certificates of Participation (Real Estate Acquisition Program) Series 1989
so long as the other requirements of this section are satisfied and assuming that said Certificates of Participation are treated
as the bonds to be refunded.
29 Del. C. 1953, § 7403; 54 Del. Laws, c. 124; 62 Del. Laws, c. 146, §§ 6, 8; 63 Del. Laws, c. 179, § 8; 64 Del. Laws, c. 131, § 11(c), (f); 65 Del. Laws, c. 280, § 1; 66 Del. Laws, c. 92, § 19; 69 Del. Laws, c. 187, § 1; 70 Del. Laws, c. 186, § 1.;
§ 7403. Notes.
In anticipation of the issuance of bonds, the issuing officers may issue and sell notes of the State at either public or private
sale for not less than par and accrued interest, at a rate to be determined by the issuing officers. Such notes may be issued
for a period of not exceeding 1 year and may be renewed from time to time for periods not exceeding 1 year but all such notes,
including renewals, shall mature and be paid from sources, including the proceeds of bonds, but other than the proceeds of
notes, not later than 4 years after their initial date of issuance. No notes shall be issued in excess of the amount of bonds
authorized and unissued in anticipation of which the notes are issued. All other terms, forms and contents of such notes shall
be determined by the issuing officers subject to this chapter.
29 Del. C. 1953, § 7404; 54 Del. Laws, c. 124; 59 Del. Laws, c. 387, § 1; 62 Del. Laws, c. 146, §§ 6, 9; 64 Del. Laws, c. 131, § 11(f).;
§ 7404. Revenue notes.
(a) If, at any time during any fiscal year, but prior to June 25 of that year, there should be a casual deficiency of revenue
in the General Fund to pay General Fund obligations or to pay existing debts, the Governor, Secretary of State and State Treasurer
(the "issuing officers") are authorized to issue revenue anticipation notes of the State in an amount they determine necessary
to meet and to pay any or all of such obligations or debts.
(b) The issuing officers are hereby authorized to determine the terms, form and contents of such notes and to sell such notes,
at such price or prices, at such rate or rates, at public or private sale, in such manner and from time to time, subject to
this chapter, as they shall determine. Such notes and any renewals thereof shall mature within 1 year from date of the original
issuance of such notes, and shall be payable at a bank (herein referred to as "the bank") chosen at the discretion of the
issuing officers. Such notes shall be imprinted with the stamp of the Governor's signature and the stamp of the signature
of the Secretary of State, and shall be manually signed by the State Treasurer. The Great Seal shall be impressed on all such
notes or shall be reproduced thereon, in facsimile, and such signatures and such notes shall be authenticated by an officer
of the bank.
(c) The faith and credit of the State are hereby pledged for the payment of the principal of and interest on such notes. All
expenses incidental to the advertisement, preparation, issuance and delivery of revenue anticipation notes and the principal
of and interest on such notes shall be paid by the State Treasurer from the General Fund.
(d) If, at any time during the fiscal year, but prior to June 15, there shall be a casual deficiency of revenue in the General
Fund to pay General Fund obligations or to pay existing debts, the State Treasurer may transfer available money from the State's
special funds to the General Fund to pay such obligations or debts. Such money shall be reimbursed to the appropriate special
funds as soon as sufficient General Fund moneys become available, but not later than June 15.
62 Del. Laws, c. 146, §§ 6, 10; 64 Del. Laws, c. 131, § 11(f); 65 Del. Laws, c. 87, § 96.;
§ 7405. Full faith and credit of the State pledged.
All bonds, notes and revenue notes shall be direct general obligations of the State and the full faith and credit of the State
are expressly pledged for the prompt and complete payment of the principal of and interest on such bonds, notes and revenue
notes when due.
29 Del. C. 1953, § 7405; 54 Del. Laws, c. 124; 62 Del. Laws, c. 146, §§ 6, 11; 64 Del. Laws, c. 131, § 11(f).;
§ 7406. Terms, forms and contents of bonds; installment payments.
(a) The resolution of the issuing officers authorizing the issuance of bonds may include provisions for the date or dates
of such bonds; the maturity of such bonds, which shall not exceed 20 years from their date; provisions for serial, term or
"capital appreciation" bonds; sinking fund or reserve fund requirements, if any; due dates of the interest thereon; the form
of bonds (including whether bonds shall be certificated or uncertificated); the denominations and designation of bonds; registration,
conversion and transfer privileges; the terms of redemption with or without premium; the date and manner of sale of bonds
(which may be a private, negotiated sale only if any of the bonds of a series of bonds or all the bonds to be sold are capital
appreciation bonds); provisions for the consolidation of bonds authorized to finance all or a portion of the costs of projects
authorized in 1 or more authorization acts with bonds authorized by 1 or more authorization acts; limitations with respect
to the interest rate or rates on bonds; provisions for receipt and deposit or investment of the good faith deposit pending
delivery of bonds and such other terms and conditions of bonds and of the issuance and sale thereof as the issuing officers
may determine to be in the best interests of the State.
(b) Notwithstanding the foregoing provisions of this section or any other law to the contrary, the issuing officers shall
be required to provide in the resolution authorizing the issuance of general obligation bonds of the State (other than capital
appreciation bonds as defined in § 7425 of this title):
(1) For the payment of bonds in annual installments, the first of which shall be not more than 1 year from the date of such
bonds; and
(2) That no annual installment, except in the case of refunding of the bonds, shall be more than any prior installment of
those bonds.
29 Del. C. 1953, §§ 7406-7409; 54 Del. Laws, c. 124; 62 Del. Laws, c. 146, §§ 6, 12; 64 Del. Laws, c. 131, § 11(b), (f); 64 Del. Laws, c. 343, § 12(a); 66 Del. Laws, c. 371, § 1.;
§ 7407. Sale of bonds.
Sufficient notice of public sale of bonds shall be deemed to have been given if such notice shall have been published at least
once 5 or more days before the date of sale, in at least 1 newspaper of general circulation in the State, and in a financial
journal of general circulation in the City of New York, New York.
29 Del. C. 1953, § 7414; 54 Del. Laws, c. 124; 60 Del. Laws, c. 372, § 1; 62 Del. Laws, c. 146, §§ 6, 13; 64 Del. Laws, c. 131, § 11(f); 71 Del. Laws, c. 378, § 43.;
§ 7408. Place of payment.
Bonds, notes and revenue notes and the interest thereon shall be payable at such place or places within or without the State
as the issuing officers may determine by resolution.
62 Del. Laws, c. 146, §§ 6, 14; 63 Del. Laws, c. 142, § 49; 64 Del. Laws, c. 131, § 11(f).;
§ 7409. Recitals in bonds, notes and revenue notes conclusive on State; negotiability.
(a) All bonds and notes shall recite that they are issued for a purpose or purposes set forth in an authorization act. Revenue
notes shall recite that they are issued for 1 or more of the purposes for which revenue notes may be authorized by this chapter.
Bonds, notes and revenue notes shall also recite that they are issued pursuant to the Constitution and laws of this State.
Upon the sale and delivery of any such bonds, notes or revenue notes against payment, such recitals shall be conclusive as
to the right, power and authority of the State to issue such bonds, notes or revenue notes and of the legality, validity and
enforceability of the obligation of the State to pay principal of and interest on such bonds, notes and revenue notes. The
legality, validity and enforceability of such bonds, notes or revenue notes containing such recitals shall never be questioned
in any court of law or equity by the State or any person after the issuance, execution and delivery against payment of such
bonds, notes and revenue notes.
(b) All bonds, notes and revenue notes are hereby declared to have all the qualities and incidents of negotiable instruments
under the commercial code of the State.
29 Del. C. 1953, § 7406; 54 Del. Laws, c. 124; 62 Del. Laws, c. 146, §§ 6, 15; 64 Del. Laws, c. 131, § 11(f).;
§ 7410. Execution of bonds, notes and revenue notes.
(a) Bonds, notes and revenue notes, other than uncertificated obligations, shall be executed on behalf of the State by the
issuing officers and shall bear the impression, or a facsimile, of the Great Seal of the State. All the signatures of the
issuing officers may be engraved, printed or stamped on bonds, notes or revenue notes notwithstanding any other law to the
contrary but no such signatures nor the impression or a facsimile of the Great Seal need appear on an uncertificated obligation.
(b) Interest coupons on certificated obligations shall bear the facsimile signature of the State Treasurer. In case any officer
whose signature or a facsimile of whose signature shall appear on any bonds or coupons, notes or revenue notes, shall cease
to be such officer before the delivery of such obligations, such signature or such facsimile shall nevertheless be valid and
sufficient for all purposes as if the officer had remained in office until such delivery.
29 Del. C. 1953, § 7411; 54 Del. Laws, c. 124; 62 Del. Laws, c. 146, §§ 6, 16; 64 Del. Laws, c. 131, § 11(d), (f); 70 Del. Laws, c. 186, § 1.;
§ 7411. Exemption from taxation.
Bonds, notes and revenue notes and the interest thereon shall be exempt from income taxation by the State or any political
subdivision thereof.
29 Del. C. 1953, § 7405; 54 Del. Laws, c. 124; 62 Del. Laws, c. 146, §§ 6, 17; 64 Del. Laws, c. 131, § 11(f).;
§ 7412. Registration, recording and cancellation agent.
The issuing officer shall, by resolution, direct the State Treasurer to contract, in such manner as the issuing officers shall
prescribe, with a banking or other institution to act as: (1) Registration agent for bonds, notes and revenue notes; (2) recording
agent to provide a permanent record of all bonds and coupons pertaining thereto, notes and revenue notes which shall have
been paid or redeemed; and (3) cancellation agent to cancel all such bonds and coupons pertaining thereto, notes and revenue
notes which shall have been paid or redeemed. The State Treasurer may, at the direction of the issuing officers, contract
with such institution for related services. Any such contract shall provide that the agent shall be responsible to the State
for the faithful and safe conduct of the services to be performed by it as registration agent, recording agent or cancellation
agent, or services related thereto, for the fidelity and integrity of the officers and agents of such contracting institution
performing the duties of a registration agent, recording agent or cancellation 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 contract may be terminated by the State Treasurer at any time, if
so directed by the issuing officers. Any such contract shall be filed in the office of the State Treasurer as a public record.
29 Del. C. 1953, § 7413A; 58 Del. Laws, c. 315, § 8; 59 Del. Laws, c. 378, § 6; 62 Del. Laws, c. 146, §§ 6, 18; 63 Del. Laws, c. 142, § 50; 64 Del. Laws, c. 131, § 11(f).;
§ 7413. Replacement of lost, stolen, mutilated or destroyed obligations.
(a) The State Treasurer may issue a replacement bond, with coupons pertaining thereto, a replacement note or a replacement
revenue note, to replace unmatured bonds and coupons, notes or revenue notes, respectively, which have been lost, stolen,
mutilated or destroyed upon receipt of: (1) Satisfactory proof (i) of ownership and (ii) of loss or destruction, or, in the
case of a mutilated or destroyed bond, coupon, note or revenue note, the mutilated or destroyed bond, coupon, note or revenue
note; (2) adequate security to indemnify the State and the bank or banks at which the bond, coupon, note or revenue note is
payable against any loss that may be suffered by them on account of the issuance of such replaced obligation; and (3) payment
of the cost of preparation of the replacement obligation.
(b) Any replacement bond, coupon, note or revenue note shall be of the same form and tenor as those originally issued, shall
be executed by the manual or facsimile signature of the officers in office at the time of the replacement and shall bear an
impression or reproduction of the Great Seal of the State or a facsimile thereof. A facsimile of the State Treasurer's signature
may appear on coupons but on a bond, note or revenue note the signature of the State Treasurer shall be in the State Treasurer's
own proper handwriting. There shall be endorsed on the bond, note or revenue note a statement in substantially the following
form:
"This bond (note or revenue note) has been reissued to replace a (lost, stolen, mutilated or destroyed) (bond, note or revenue
note)."
29 Del. C. 1953, § 7412A; 57 Del. Laws, c. 279; 62 Del. Laws, c. 146, §§ 6, 19; 64 Del. Laws, c. 131, § 11(f); 70 Del. Laws, c. 186, § 1.;
§ 7414. Deposit of money; advances from funds.
(a) All proceeds from the sale of bonds or notes other than premium or accrued interest shall be deposited by the State Treasurer
in a special fund or funds of the State and applied for the purposes for which such bonds or notes were issued or as otherwise
provided by law. All proceeds from the sale of revenue notes and all accrued interest from the sale of bonds, or revenue notes
shall be deposited by the State Treasurer in the General Fund. Any premium from bonds or revenue notes sold after January
1, 2004 (including any such premium previously deposited in the General Fund) shall, at the discretion of the Director of
the Office of Management and Budget, Controller General and the Secretary of Finance:
(1) Be deposited in a special fund of the State and applied for the purposes for which such bonds or notes were issued or
as otherwise provided by law; or
(2) Be deposited in any escrow fund to redeem, refund or, defease debt service on existing bonds or notes of the State, or
debt service on any debt or other obligation of an instrumentality of the State.
In the event that a deposit is made pursuant to paragraph (a)(1) of this section above, bond authorization shall be reduced
by a corresponding amount. Under no circumstances shall any proceeds, premium or accrued interest be applied to pay the costs
of any project not authorized by the General Assembly.
(b) The State may advance money to a special fund of the State established to hold money raised or to be raised to finance
costs of projects authorized to be financed with the proceeds of bonds or notes after the adoption of an authorization act
but prior to the issuance of bonds or notes authorized to be issued by that authorization act. Money may be advanced, in
an amount not exceeding the greater of 3 percent of General Fund revenues for the coming fiscal year, as determined by the
Delaware Economic and Financial Advisory Council, or $60,000,000, from any other fund of the State unless prohibited by any
other law. Any money advanced must be repaid at the time the money advanced is needed for the purposes for which the money
was held before being advanced.
29 Del. C. 1953, § 7415; 54 Del. Laws, c. 124; 62 Del. Laws, c. 146, §§ 6, 20; 62 Del. Laws, c. 407, § 6; 63 Del. Laws, c. 142, § 51; 63 Del. Laws, c. 179, § 9; 64 Del. Laws, c. 131, § 11(f); 66 Del. Laws, c. 92, § 20; 73 Del. Laws, c. 95, § 57; 74 Del. Laws, c. 221, § 6; 75 Del. Laws, c. 88, § 21(13); 75 Del. Laws, c. 254, § 1.;
§ 7415. Use of proceeds of bonds and notes.
The funds appropriated by an authorization act may be used only for the costs of the projects set forth in such act in an
amount for each such project not exceeding the amount authorized by such act for such project. Costs of projects may include
costs of surveys, maps, plans, designs, inspections, incidental land and equipment acquisition, incidental construction and
reconstruction, landscaping, costs of issuing bonds and notes, capitalized interest during construction and reconstruction,
fees for construction managers or persons performing similar functions and other costs incidental to the project. Such funds
shall not be used for ordinary or normal maintenance expenses or repair, except for costs authorized by law for maintenance
of and minor capital improvements to school buildings.
29 Del. C. 1953, § 7415; 54 Del. Laws, c. 124; 62 Del. Laws, c. 146, §§ 6, 21; 64 Del. Laws, c. 131, § 11(f).;
§ 7416. Timetable for use of funds and the sale of bonds and notes; commencement of authorized project.
(a) No funds appropriated by an authorization act shall be encumbered more than 3 years after the passage of such act for
any individual project unless: (1) Such project has progressed into any of the following phases prior to that date: Planning,
initial engineering, land, building or equipment acquisition, construction or reconstruction; and (2) 85 percent of the project
costs have been expended on 1 or more of such phases.
(b) No bonds or notes shall be issued or funds borrowed pursuant to an authorization act, 4 years after the passage of such
act, except: (1) As provided in 54 Del. Laws, c. 345, as amended (Chapter 75 of this title, as amended); and (2) with respect
to bonds authorized prior to this chapter which shall remain subject to the law under which they were originally authorized.
(c) Any project authorized to be undertaken with the proceeds of bonds of the State shall commence in the fiscal year in which
it is authorized. If such duly authorized project has not proceeded into 1 or more of the phases identified in subsection
(a) of this section within 18 months from the effective date of the original authorization, the authorized but unsold portion
of the bonds shall automatically be deauthorized and any unspent cash balances shall be reverted to the Bond Reversion Account
to be applied to the costs of any other authorized project, pursuant to § 7418 of this title.
29 Del. C. 1953, § 7416; 55 Del. Laws, c. 337; 62 Del. Laws, c. 146, §§ 6, 22; 64 Del. Laws, c. 131, § 11(f); 64 Del. Laws, c. 343, § 12(e), (f).;
§ 7417. Payment of debt service; first lien.
(a) Each annual Budget Appropriation Bill enacted by the General Assembly shall make sufficient provisions for the payment
of principal of, premium, if any, and interest on all bonds, notes and revenue notes payable or to be paid by their terms
during the fiscal year of the State for which such Budget Appropriation Bill is enacted.
(b) Vouchers for the payment of principal of, premium, if any, and interest on bonds, notes and revenue notes for payment
of expenses incident to the issuance of such obligations shall be signed by the State Treasurer.
(c) Any appropriation made by the General Assembly to pay principal of, premium, if any, and interest on bonds, notes or revenue
notes may be applied to pay principal of, premium, if any, and interest on obligations of other issuers pursuant to an agreement
made by the issuing officers with a person agreeing to pay principal of, premium, if any, or interest on bonds, notes or revenue
notes issued by the State.
(d) If, at any time, the State fails to make sufficient provisions to pay such principal of, premium, if any, and interest
on bonds, notes or revenue notes, or, at the time such principal, premium or interest is payable sufficient moneys are unavailable
for such payment, a sufficient sum shall be set apart by the State Treasurer from the first revenues thereafter received by
the State and shall be applied to such purposes. The State Treasurer may be required to set apart and apply such revenues
as provided herein at the suit of any holder of obligations for which such insufficient provision is made.
62 Del. Laws, c. 146, §§ 6, 23; 64 Del. Laws, c. 131, § 11(f); 66 Del. Laws, c. 360, § 16.;
§ 7418. Use of unexpended funds.
Any funds borrowed pursuant to an authorization act, and remaining unencumbered after the completion or abandonment of a project
authorized to be financed pursuant to such act, or because a project authorized to be financed by such act is not timely undertaken,
or upon the expiration of the period set forth in § 7416 of this title, shall be deposited in a special fund and applied,
with the approval of the issuing officers, to the cost of financing any previously authorized projects. The head of the department
or agency to which such funds were appropriated for a project shall determine when such project is completed or abandoned.
60 Del. Laws, c. 135, § 1; 62 Del. Laws, c. 146, §§ 6, 24; 64 Del. Laws, c. 131, § 11(f).;
§ 7419. Approval of plans, specifications, estimates and cash flows of projects.
(a) Delaware Technical and Community College, Delaware State University and all state departments and agencies shall submit
to Facilities Management of the Office of Management and Budget all proposed contracts for architectural services and all
architectural, structural, electrical and mechanical plans, specifications and cost estimates. Facilities Management of the
Office of Management and Budget shall be responsible for reviewing and approving such plans, specifications and cost estimates
prior to bid advertisement, and no such contracts nor contracts for construction and reconstruction of such projects (except
highway construction and reconstruction contracts and school district minor capital improvements contracts) shall be executed
without the prior approval of Facilities Management of the Office of Management and Budget. All such contracts shall be let
on the condition, among others, that the contractor comply with the State's equal opportunity laws. Facilities Management
of the Office of Management and Budget shall insure that approved projects are not inconsistent with any authorization of
budget act.
(b) Each state agency, department and institution of higher learning to which proceeds of bonds or notes are appropriated,
must, on an annual basis, report to the Director of the Office of Management and Budget the status and anticipated cash flow
for each project which is not complete.
62 Del. Laws, c. 146, §§ 6, 25; 63 Del. Laws, c. 189, § 5(h); 64 Del. Laws, c. 131, § 11(f); 65 Del. Laws, c. 434, §§ 3, 4; 69 Del. Laws, c. 10, §§ 11, 12; 69 Del. Laws, c. 67, § 2; 75 Del. Laws, c. 88, §§ 21(13), 37.;
§ 7420. Project restrictions.
(a) All new construction and/or reconstruction of existing structures financed with the proceeds of bonds or notes shall comply
with flood plain management requirements adopted by the municipality in which such structure is located pursuant to the National
Flood Insurance Act of 1968, as amended, or successor acts. If any such structure is in a flood program nonparticipating municipality,
then the State shall comply with the criteria set forth in Title 24, Code of Federal Regulations, §§ 1910.3, 1910.4 and 1910.5
[now §§ 60.3, 60.4, 60.5 and 60.6] issued pursuant to the National Flood Insurance Act of 1968, as amended, or successor acts.
(b) All projects funded with the proceeds of bonds or notes shall be built to standards that are no less stringent than American
Society of Heating, Refrigerating, and Air Conditioning Engineering, Inc., Standard 90-75, or successor standards.
(c) The restrictions imposed by this section shall be applicable to projects for which no expenditure has been made prior
to July 12, 1979, unless such project has been made subject to the same restrictions by another act of the General Assembly
or by contract.
(d) The department, agency or other body of the State to which proceeds of bonds or notes are appropriated shall require the
inspection of buildings to be constructed, reconstructed or rehabilitated with the proceeds of bonds or notes, and, at the
discretion of the Director of the Office of Management and Budget, shall require the inspection of other structures to be
financed with the proceeds of such obligations excluding highways, roads and bridges. Proceeds of bonds or notes shall be
allocated to provide for the cost of inspecting the projects to be financed with such funds. The portion of the total funds
appropriated to the cost of any such inspection shall not exceed the following percentages of such total funds appropriated
to the cost of such projects:
(1) Projects with a maximum cost in excess of $1,000,000
11/2%
(2) Projects with a maximum cost of $1,000,000 or less
13/4%
(3) Reconstruction and renovation projects
13/4%
The department or agency of the State to which proceeds of bonds or notes are appropriated shall let contracts for such inspection.
If the total maximum cost of a project is less than $50,000, the employment of an inspector shall be discretionary with the
department, agency or other body to whom such funds are appropriated. If a department, agency or other body retains a construction
manager, retention of an inspector shall be discretionary with the department, agency or other body regardless of the total
maximum cost of the project. In contracting for the inspection of such projects, first preference shall be given to an experienced
and able Delaware organization offering to provide such inspection services on a nonprofit, at-cost basis. Such contracts
shall not be deemed public works contracts as defined in 54 Del. Laws, c. 106, as amended (Chapter 69 of this title, as amended).
If no such organization is able or willing to perform such inspection services on such nonprofit, at-cost basis, then the
contracts for such services may be let with profit-making organizations subject to 54 Del. Laws, c. 106, as amended (Chapter
69 of this title, as amended).
62 Del. Laws, c. 146, §§ 6, 26; 63 Del. Laws, c. 189, § 5(h); 64 Del. Laws, c. 131, §§ 11(f), 17(a); 69 Del. Laws, c. 10, § 13; 75 Del. Laws, c. 88, § 21(13).;
§ 7421. Bonds, notes and revenue notes as legal investments for institutions and fiduciaries; legal deposit.
(a) Bonds, notes and revenue notes are securities in which any officer of the State and any officers of political subdivisions,
administrative departments, boards and commissions of the State, all banks, bankers, savings banks, trust companies, savings
and loan associations, investment companies and other persons carrying on a banking business, all insurance companies, insurance
associations and other persons carrying on an insurance business and all administrators, executors, guardians, trustees and
other fiduciaries, and all other persons whatsoever who are now or may, on and after July 12, 1979, be authorized to invest
in bonds, notes, revenue notes or other obligations of the State, may properly and legally invest any funds, including capital
belonging to them or within their control.
(b) Such bonds, notes and revenue notes are securities which may properly and legally be deposited with and received by any
officer of the State, or an officer of any political subdivision or agency of the State, for any purpose for which the deposit
of bonds, notes, revenue notes or other obligations of the State is now or may, on and after July 12, 1979, be authorized
by law.
62 Del. Laws, c. 146, §§ 6, 27; 64 Del. Laws, c. 131, § 11(f).;
§ 7422. Limitations on debt and other obligations.
(a) For the purposes of this section:
(1) "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) of this section), means the maximum payments due
with respect to all such obligations in any 1 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.
(2) "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 (provided that any such guaranteed obligations
shall be included only to the extent any such obligations are in default); and (B) all obligations of the State or any agency
or authority thereof extending beyond 1 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;
(C) any tax or other revenue anticipation notes or bonds of the State; or (D) any obligations to the extent that the debt
service with respect thereto is reasonably expected to be offset (as determined by the Secretary of Finance) by lease payments,
user fees, federal grants or other payments from some source other than the General Fund. Such payments shall be used expressly
for the purpose of paying such debt service.
(3) "Transportation Trust Fund debt obligations" means all debt obligations of the Delaware Transportation Authority, including
all obligations extending beyond 1 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 in any case are payable from
the Transportation Trust Fund. Transportation Trust Fund debt obligations do not include any obligations to the extent that
the debt service with respect thereto is reasonably expected to be offset (as determined by the Secretary of Finance) by lease
payments, user fees, federal grants or other payments from some nonstate source.
(b) The aggregate principal amount of tax supported obligations of the State which may be authorized by the State in any 1
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. Any amount of tax supported obligations which
were duly authorized before July 1, 1991, and which are duly deauthorized after June 30, 1991, may subsequently be reauthorized
without regard to the authorization limit otherwise provided by this subsection. Obligations authorized to refund other obligations
of the State shall not be subject to the limits of this subsection (b).
(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, in
both cases for the fiscal year following the fiscal year in which such obligation is incurred, such estimated revenue as determined
by the most recent projections made by the Delaware Economic and Financial Advisory Council and adjusted, if appropriate,
by the fiscal impact of subsequently enacted legislation as certified by the Secretary of Finance. 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 provided that such lease obligations shall not include
any obligations, the lease payments with respect to which are reasonably expected to be offset (as determined by the Secretary
of Finance) by lease payments, user fees, federal grants or other payments from some nonstate source. For the purposes of
this subsection, the maximum annual payments on the above-described lease obligations shall be as of the most recent date
available 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 following the fiscal year in which such obligation is incurred as estimated by the Secretary of Finance. 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) obligations guaranteed by the State except to the extent such obligations are in default; (iii) general obligation bonds
of the State issued prior to January 1, 1987, for the transportation related projects as certified by the Secretary of Finance;
(iv) tax or other revenue anticipation notes of the State; or (v) any obligations to the extent that the debt service with
respect thereto is reasonably expected to be offset (as determined by the Secretary of Finance) by lease payments, user fees,
federal grants or other payments from some source other than the General Fund.
(e) There shall be attached to every bill and amendment introduced in
the House of Representatives and/oor 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 Secretary of Finance
Debt Limit Statement Dated ____________
This Debt Limit Statement to be attached to ________________________ as
required by § 7422, Title 29, Delaware Code
(1) Estimated Net 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 Appro-
priation Bill for that fiscal year ………………………………… $ ____________
(2) Multiply by 5% ……………………………………………... x .05
(3) Maximum aggregate principal amount of new tax-supported obligations which
may be authorized by the State
in the fiscal year ending June 30, ______ ……………………… $ ____________
(4) Less aggregate principal amount of previously autho-
rized tax-supported obligations subject to debt limit …………... $ ____________
(5) AVAILABLE DEBT LIMIT prior to appended legislation
(3-4) …………………………………………………………….. $ ____________
(6) Less aggregate principal amount of new tax-supported obligations subject
to debt limit to be authorized pursu-
ant to appended legislation …………………………………….. $ ____________
The Secretary of Finance shall file said debt limit statement within 10 days
of said joint resolution with the Office of the Controller General and the
Director of the Office of Management and Budget.
(f) The certification of the Secretary of Finance referred to in this section
shall be in substantially the following form:
Certification of Secretary of Finance Regarding
Certain Revenue Supported Debt
____ B. No. ______ would authorize the issuance of $ ____________ principal
amount of obligations of the State for the purposes of
________________________. [Describe the arrangement pursuant to which it is
expected that the debt service will be offset by lease or other payments].
Accordingly, I hereby certify that I reasonably expect that the debt service
on $ ____________ principal amount of the above-described bonds will be offset
by payments to the State which are described in Title 29, Delaware Code, §
7422(a)(2)(D), (a)(3) or (d)(v).
____________ ____________________
Date Secretary of Finance
Date Secretary of Finance
29 Del. C. 1953, §§ 7422, 7423; 55 Del. Laws, c. 168, § 2; 57 Del. Laws, c. 176; 58 Del. Laws, c. 315, § 9; 58 Del. Laws, c. 420; 61 Del. Laws, c. 375, § 2; 62 Del. Laws, c. 146, §§ 6, 28; 63 Del. Laws, c. 189, § 5(h); 64 Del. Laws, c. 131, § 11(f); 68 Del. Laws, c. 7, § 1; 68 Del. Laws, c. 156, §§ 24(a)-(g); 69 Del. Laws, c. 10, § 14; 75 Del. Laws, c. 88, § 21(13).;
§ 7423. DEFAC projections and monitoring of debt limits.
The Delaware Economic and Financial Advisory Council shall publish at least semiannually in December and June the projections
described in § 7422(b) of this title. The Council shall also monitor the application and effect of the debt limits imposed
by § 7422 of this title and shall report annually to the General Assembly and the Governor with respect thereto. Such reports
shall include any recommendations with respect to such debt limits and the then current Debt Affordability Study prepared
by the Department of Finance.
68 Del. Laws, c. 7, § 2; 68 Del. Laws, c. 156, § 25.;
§ 7424. Right to obtain bondholder lists.
No holder or owner of any bond, note or revenue note shall have any right to obtain a list of registered owners or holders
of bonds, notes or revenue notes from the State or its agents by virtue of ownership nor holding of any such obligation, no
other law to the contrary notwithstanding.
64 Del. Laws, c. 131, § 11(e), (f); 70 Del. Laws, c. 186, § 1.;
§ 7425. Capital appreciation bonds and discount bonds.
The term "capital appreciation bonds" means any bond or bonds sold at a price substantially less than the principal amount
thereof and on which compounded interest is payable at maturity, as conclusively determined by the issuing officers, but only
if such bond or bonds are designated as capital appreciations by the issuing officers in the resolution authorizing the issuance
of bonds. For purposes of §§ 7422 and 7423 of this title, the aggregate principal amount of any capital appreciation bonds
or any other bonds sold to the public for a price less than the face amount thereof shall be the aggregate of the initial
offering prices at which such bonds are offered for sale to the public, whether in a private or negotiated sale or in a public
or competitive sale, or sold to the initial purchaser thereof in a private placement, without, in every case, reduction to
reflect underwriters' discount or placement agents' fees or other similar fees.
66 Del. Laws, c. 371, § 2; 69 Del. Laws, c. 386, § 31.;
§ 7426. Capital appreciation bonds and discount bonds; sale by State.
A maximum of 20 percent of the bonds authorized by each Bond and Capital Improvements Act of the State may be sold by the
State directly to retail purchasers or to financial intermediaries, or to an underwriter who agrees to use its best efforts
to sell such bonds to retail purchasers or to any intermediaries, such bonds to be herein referred to as "retail bonds." The
Secretary of Finance, the State Treasurer, the Director of the Office of Management and Budget and the Controller General
are hereby authorized to determine the terms and conditions of the retail bonds, and the manner, whether at public or private
negotiated sale, by which they shall be awarded to the purchasers thereof, notwithstanding anything to the contrary contained
in this chapter; provided, that the requirements of § 7422 of this title must be observed.
74 Del. Laws, c. 308, § 56; 75 Del. Laws, c. 88, § 21(13).;
Budget, Fiscal, Procurement and Contracting Regulations
CHAPTER 74. BONDS AND NOTES OF THE STATE
§ 7401. Definitions.
As used in this chapter:
(1) "Authorization act" means an act of the General Assembly, concurred in by three fourths of all the members of each House,
appropriating funds of the State from the proceeds of bonds authorized to be issued by such act.
(2) "Bonds" means any bonds authorized to be issued by the State pursuant to an authorization act and to the payment of which
the State has pledged its full faith and credit.
(3) "Certificated obligation" means a registered bond, note or revenue note represented by an instrument.
(4) "Issuing officers" means the Governor, Secretary of State, State Treasurer and Secretary of Finance of the State.
(5) "Notes" means notes issued by the State in anticipation of the issuance of bonds authorized by an authorization act and
to the payment of which the State has pledged its full faith and credit.
(6) "Revenue notes" means notes issued by the State in anticipation of the receipt by the State of taxes and revenues payable
to the State and the payment of which the State has pledged its full faith and credit.
(7) "Uncertificated obligation" means a registered bond, note or revenue note which is not represented by an instrument.
29 Del. C. 1953, § 7401; 54 Del. Laws, c. 124; 59 Del. Laws, c. 378, § 5; 62 Del. Laws, c. 146, §§ 6, 7; 64 Del. Laws, c. 131, § 11(a), (f); 65 Del. Laws, c. 119, § 1.;
§ 7402. Issuing authority.
(a) The issuing officers shall authorize the issuance of bonds, notes and revenue notes of the State by resolution adopted
by the unanimous vote of the issuing officers. Each issuing officer may designate a deputy to represent the issuing officer
as an issuing officer at meetings of the issuing officers with full powers to act and vote in the issuing officer's behalf.
Bonds and notes shall be issued for the purposes authorized in an authorization act. Revenue notes shall be issued for purposes
authorized by this chapter. Bonds, notes and revenue notes may be issued regardless of the treatment of interest thereon for
federal income tax purposes.
(b) Notwithstanding any other laws to the contrary, the issuing officers shall approve, by the same vote, individual contracts
or classes of contracts with firms or individuals entered into by bond issuing authorities, agencies and instrumentalities
created by the State other than authorities, agencies or instrumentalities constituting institutions of higher learning.
(c) Any other law to the contrary notwithstanding, the General Assembly hereby authorizes the issuance, from time to time,
of general obligation bonds to refund, prior to their stated maturity, all or any portion of the outstanding general obligation
bonds issued by the State and costs incidental thereto; provided, however, that the present value of the aggregate principal
and interest payments of the refunding bonds must be less than the present value of the aggregate principal and interest payments
on the bonds to be refunded.
(1) The present value of the aggregate principal and interest payments of the refunding bonds and of the bonds to be refunded
shall be discounted at the effective interest rate on the refunding bonds, calculated based on the internal rate of return.
(2) Refunding bonds may be issued in a principal amount which exceeds the principal amount of the bonds to be refunded, so
long as the present value of the aggregate principal and interest payments of the refunding bonds are less than the present
value of the aggregate principal and interest payments on the bonds to be refunded.
(3) Section 7423 of this title shall not apply to refunding bonds issued in accordance with, and under the limitations of,
this subsection.
(4) The issuing officers, by resolution adopted by unanimous vote and without further authorization of the General Assembly,
may resolve to issue refunding bonds authorized by this subsection at any time prior to the final maturity of the bonds to
be refunded. Subject to the limitations imposed by this subsection, but any other law to the contrary notwithstanding, refunding
bonds may be sold at public or private sale, above or below par, with principal installments payable at such times and in
such amounts and on such other terms and conditions as the issuing officers determine. Without limiting the foregoing, refunding
bonds are not required to pay current interest for all or any portion of the issue, and thus may be "zero coupon" or "capital
appreciation" bonds.
(5) No refunding bonds may be issued unless all or a portion of the proceeds of the refunding bonds are deposited irrevocably
in an account pledged to pay, and are sufficient together with any other available assets in such account to meet, the payment
when due of the principal, premium (if any) and interest on the bonds to be refunded. The proceeds of the refunding bonds
pledged to pay the bonds to be refunded may be invested in direct obligations of, or obligations the principal of and interest
on which are guaranteed by, the United States government.
(6) Any other law to the contrary notwithstanding, the issuing officers, by resolution adopted by unanimous vote, may resolve
to issue refunding bonds to refund the State's Certificates of Participation (Real Estate Acquisition Program) Series 1989
so long as the other requirements of this section are satisfied and assuming that said Certificates of Participation are treated
as the bonds to be refunded.
29 Del. C. 1953, § 7403; 54 Del. Laws, c. 124; 62 Del. Laws, c. 146, §§ 6, 8; 63 Del. Laws, c. 179, § 8; 64 Del. Laws, c. 131, § 11(c), (f); 65 Del. Laws, c. 280, § 1; 66 Del. Laws, c. 92, § 19; 69 Del. Laws, c. 187, § 1; 70 Del. Laws, c. 186, § 1.;
§ 7403. Notes.
In anticipation of the issuance of bonds, the issuing officers may issue and sell notes of the State at either public or private
sale for not less than par and accrued interest, at a rate to be determined by the issuing officers. Such notes may be issued
for a period of not exceeding 1 year and may be renewed from time to time for periods not exceeding 1 year but all such notes,
including renewals, shall mature and be paid from sources, including the proceeds of bonds, but other than the proceeds of
notes, not later than 4 years after their initial date of issuance. No notes shall be issued in excess of the amount of bonds
authorized and unissued in anticipation of which the notes are issued. All other terms, forms and contents of such notes shall
be determined by the issuing officers subject to this chapter.
29 Del. C. 1953, § 7404; 54 Del. Laws, c. 124; 59 Del. Laws, c. 387, § 1; 62 Del. Laws, c. 146, §§ 6, 9; 64 Del. Laws, c. 131, § 11(f).;
§ 7404. Revenue notes.
(a) If, at any time during any fiscal year, but prior to June 25 of that year, there should be a casual deficiency of revenue
in the General Fund to pay General Fund obligations or to pay existing debts, the Governor, Secretary of State and State Treasurer
(the "issuing officers") are authorized to issue revenue anticipation notes of the State in an amount they determine necessary
to meet and to pay any or all of such obligations or debts.
(b) The issuing officers are hereby authorized to determine the terms, form and contents of such notes and to sell such notes,
at such price or prices, at such rate or rates, at public or private sale, in such manner and from time to time, subject to
this chapter, as they shall determine. Such notes and any renewals thereof shall mature within 1 year from date of the original
issuance of such notes, and shall be payable at a bank (herein referred to as "the bank") chosen at the discretion of the
issuing officers. Such notes shall be imprinted with the stamp of the Governor's signature and the stamp of the signature
of the Secretary of State, and shall be manually signed by the State Treasurer. The Great Seal shall be impressed on all such
notes or shall be reproduced thereon, in facsimile, and such signatures and such notes shall be authenticated by an officer
of the bank.
(c) The faith and credit of the State are hereby pledged for the payment of the principal of and interest on such notes. All
expenses incidental to the advertisement, preparation, issuance and delivery of revenue anticipation notes and the principal
of and interest on such notes shall be paid by the State Treasurer from the General Fund.
(d) If, at any time during the fiscal year, but prior to June 15, there shall be a casual deficiency of revenue in the General
Fund to pay General Fund obligations or to pay existing debts, the State Treasurer may transfer available money from the State's
special funds to the General Fund to pay such obligations or debts. Such money shall be reimbursed to the appropriate special
funds as soon as sufficient General Fund moneys become available, but not later than June 15.
62 Del. Laws, c. 146, §§ 6, 10; 64 Del. Laws, c. 131, § 11(f); 65 Del. Laws, c. 87, § 96.;
§ 7405. Full faith and credit of the State pledged.
All bonds, notes and revenue notes shall be direct general obligations of the State and the full faith and credit of the State
are expressly pledged for the prompt and complete payment of the principal of and interest on such bonds, notes and revenue
notes when due.
29 Del. C. 1953, § 7405; 54 Del. Laws, c. 124; 62 Del. Laws, c. 146, §§ 6, 11; 64 Del. Laws, c. 131, § 11(f).;
§ 7406. Terms, forms and contents of bonds; installment payments.
(a) The resolution of the issuing officers authorizing the issuance of bonds may include provisions for the date or dates
of such bonds; the maturity of such bonds, which shall not exceed 20 years from their date; provisions for serial, term or
"capital appreciation" bonds; sinking fund or reserve fund requirements, if any; due dates of the interest thereon; the form
of bonds (including whether bonds shall be certificated or uncertificated); the denominations and designation of bonds; registration,
conversion and transfer privileges; the terms of redemption with or without premium; the date and manner of sale of bonds
(which may be a private, negotiated sale only if any of the bonds of a series of bonds or all the bonds to be sold are capital
appreciation bonds); provisions for the consolidation of bonds authorized to finance all or a portion of the costs of projects
authorized in 1 or more authorization acts with bonds authorized by 1 or more authorization acts; limitations with respect
to the interest rate or rates on bonds; provisions for receipt and deposit or investment of the good faith deposit pending
delivery of bonds and such other terms and conditions of bonds and of the issuance and sale thereof as the issuing officers
may determine to be in the best interests of the State.
(b) Notwithstanding the foregoing provisions of this section or any other law to the contrary, the issuing officers shall
be required to provide in the resolution authorizing the issuance of general obligation bonds of the State (other than capital
appreciation bonds as defined in § 7425 of this title):
(1) For the payment of bonds in annual installments, the first of which shall be not more than 1 year from the date of such
bonds; and
(2) That no annual installment, except in the case of refunding of the bonds, shall be more than any prior installment of
those bonds.
29 Del. C. 1953, §§ 7406-7409; 54 Del. Laws, c. 124; 62 Del. Laws, c. 146, §§ 6, 12; 64 Del. Laws, c. 131, § 11(b), (f); 64 Del. Laws, c. 343, § 12(a); 66 Del. Laws, c. 371, § 1.;
§ 7407. Sale of bonds.
Sufficient notice of public sale of bonds shall be deemed to have been given if such notice shall have been published at least
once 5 or more days before the date of sale, in at least 1 newspaper of general circulation in the State, and in a financial
journal of general circulation in the City of New York, New York.
29 Del. C. 1953, § 7414; 54 Del. Laws, c. 124; 60 Del. Laws, c. 372, § 1; 62 Del. Laws, c. 146, §§ 6, 13; 64 Del. Laws, c. 131, § 11(f); 71 Del. Laws, c. 378, § 43.;
§ 7408. Place of payment.
Bonds, notes and revenue notes and the interest thereon shall be payable at such place or places within or without the State
as the issuing officers may determine by resolution.
62 Del. Laws, c. 146, §§ 6, 14; 63 Del. Laws, c. 142, § 49; 64 Del. Laws, c. 131, § 11(f).;
§ 7409. Recitals in bonds, notes and revenue notes conclusive on State; negotiability.
(a) All bonds and notes shall recite that they are issued for a purpose or purposes set forth in an authorization act. Revenue
notes shall recite that they are issued for 1 or more of the purposes for which revenue notes may be authorized by this chapter.
Bonds, notes and revenue notes shall also recite that they are issued pursuant to the Constitution and laws of this State.
Upon the sale and delivery of any such bonds, notes or revenue notes against payment, such recitals shall be conclusive as
to the right, power and authority of the State to issue such bonds, notes or revenue notes and of the legality, validity and
enforceability of the obligation of the State to pay principal of and interest on such bonds, notes and revenue notes. The
legality, validity and enforceability of such bonds, notes or revenue notes containing such recitals shall never be questioned
in any court of law or equity by the State or any person after the issuance, execution and delivery against payment of such
bonds, notes and revenue notes.
(b) All bonds, notes and revenue notes are hereby declared to have all the qualities and incidents of negotiable instruments
under the commercial code of the State.
29 Del. C. 1953, § 7406; 54 Del. Laws, c. 124; 62 Del. Laws, c. 146, §§ 6, 15; 64 Del. Laws, c. 131, § 11(f).;
§ 7410. Execution of bonds, notes and revenue notes.
(a) Bonds, notes and revenue notes, other than uncertificated obligations, shall be executed on behalf of the State by the
issuing officers and shall bear the impression, or a facsimile, of the Great Seal of the State. All the signatures of the
issuing officers may be engraved, printed or stamped on bonds, notes or revenue notes notwithstanding any other law to the
contrary but no such signatures nor the impression or a facsimile of the Great Seal need appear on an uncertificated obligation.
(b) Interest coupons on certificated obligations shall bear the facsimile signature of the State Treasurer. In case any officer
whose signature or a facsimile of whose signature shall appear on any bonds or coupons, notes or revenue notes, shall cease
to be such officer before the delivery of such obligations, such signature or such facsimile shall nevertheless be valid and
sufficient for all purposes as if the officer had remained in office until such delivery.
29 Del. C. 1953, § 7411; 54 Del. Laws, c. 124; 62 Del. Laws, c. 146, §§ 6, 16; 64 Del. Laws, c. 131, § 11(d), (f); 70 Del. Laws, c. 186, § 1.;
§ 7411. Exemption from taxation.
Bonds, notes and revenue notes and the interest thereon shall be exempt from income taxation by the State or any political
subdivision thereof.
29 Del. C. 1953, § 7405; 54 Del. Laws, c. 124; 62 Del. Laws, c. 146, §§ 6, 17; 64 Del. Laws, c. 131, § 11(f).;
§ 7412. Registration, recording and cancellation agent.
The issuing officer shall, by resolution, direct the State Treasurer to contract, in such manner as the issuing officers shall
prescribe, with a banking or other institution to act as: (1) Registration agent for bonds, notes and revenue notes; (2) recording
agent to provide a permanent record of all bonds and coupons pertaining thereto, notes and revenue notes which shall have
been paid or redeemed; and (3) cancellation agent to cancel all such bonds and coupons pertaining thereto, notes and revenue
notes which shall have been paid or redeemed. The State Treasurer may, at the direction of the issuing officers, contract
with such institution for related services. Any such contract shall provide that the agent shall be responsible to the State
for the faithful and safe conduct of the services to be performed by it as registration agent, recording agent or cancellation
agent, or services related thereto, for the fidelity and integrity of the officers and agents of such contracting institution
performing the duties of a registration agent, recording agent or cancellation 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 contract may be terminated by the State Treasurer at any time, if
so directed by the issuing officers. Any such contract shall be filed in the office of the State Treasurer as a public record.
29 Del. C. 1953, § 7413A; 58 Del. Laws, c. 315, § 8; 59 Del. Laws, c. 378, § 6; 62 Del. Laws, c. 146, §§ 6, 18; 63 Del. Laws, c. 142, § 50; 64 Del. Laws, c. 131, § 11(f).;
§ 7413. Replacement of lost, stolen, mutilated or destroyed obligations.
(a) The State Treasurer may issue a replacement bond, with coupons pertaining thereto, a replacement note or a replacement
revenue note, to replace unmatured bonds and coupons, notes or revenue notes, respectively, which have been lost, stolen,
mutilated or destroyed upon receipt of: (1) Satisfactory proof (i) of ownership and (ii) of loss or destruction, or, in the
case of a mutilated or destroyed bond, coupon, note or revenue note, the mutilated or destroyed bond, coupon, note or revenue
note; (2) adequate security to indemnify the State and the bank or banks at which the bond, coupon, note or revenue note is
payable against any loss that may be suffered by them on account of the issuance of such replaced obligation; and (3) payment
of the cost of preparation of the replacement obligation.
(b) Any replacement bond, coupon, note or revenue note shall be of the same form and tenor as those originally issued, shall
be executed by the manual or facsimile signature of the officers in office at the time of the replacement and shall bear an
impression or reproduction of the Great Seal of the State or a facsimile thereof. A facsimile of the State Treasurer's signature
may appear on coupons but on a bond, note or revenue note the signature of the State Treasurer shall be in the State Treasurer's
own proper handwriting. There shall be endorsed on the bond, note or revenue note a statement in substantially the following
form:
"This bond (note or revenue note) has been reissued to replace a (lost, stolen, mutilated or destroyed) (bond, note or revenue
note)."
29 Del. C. 1953, § 7412A; 57 Del. Laws, c. 279; 62 Del. Laws, c. 146, §§ 6, 19; 64 Del. Laws, c. 131, § 11(f); 70 Del. Laws, c. 186, § 1.;
§ 7414. Deposit of money; advances from funds.
(a) All proceeds from the sale of bonds or notes other than premium or accrued interest shall be deposited by the State Treasurer
in a special fund or funds of the State and applied for the purposes for which such bonds or notes were issued or as otherwise
provided by law. All proceeds from the sale of revenue notes and all accrued interest from the sale of bonds, or revenue notes
shall be deposited by the State Treasurer in the General Fund. Any premium from bonds or revenue notes sold after January
1, 2004 (including any such premium previously deposited in the General Fund) shall, at the discretion of the Director of
the Office of Management and Budget, Controller General and the Secretary of Finance:
(1) Be deposited in a special fund of the State and applied for the purposes for which such bonds or notes were issued or
as otherwise provided by law; or
(2) Be deposited in any escrow fund to redeem, refund or, defease debt service on existing bonds or notes of the State, or
debt service on any debt or other obligation of an instrumentality of the State.
In the event that a deposit is made pursuant to paragraph (a)(1) of this section above, bond authorization shall be reduced
by a corresponding amount. Under no circumstances shall any proceeds, premium or accrued interest be applied to pay the costs
of any project not authorized by the General Assembly.
(b) The State may advance money to a special fund of the State established to hold money raised or to be raised to finance
costs of projects authorized to be financed with the proceeds of bonds or notes after the adoption of an authorization act
but prior to the issuance of bonds or notes authorized to be issued by that authorization act. Money may be advanced, in
an amount not exceeding the greater of 3 percent of General Fund revenues for the coming fiscal year, as determined by the
Delaware Economic and Financial Advisory Council, or $60,000,000, from any other fund of the State unless prohibited by any
other law. Any money advanced must be repaid at the time the money advanced is needed for the purposes for which the money
was held before being advanced.
29 Del. C. 1953, § 7415; 54 Del. Laws, c. 124; 62 Del. Laws, c. 146, §§ 6, 20; 62 Del. Laws, c. 407, § 6; 63 Del. Laws, c. 142, § 51; 63 Del. Laws, c. 179, § 9; 64 Del. Laws, c. 131, § 11(f); 66 Del. Laws, c. 92, § 20; 73 Del. Laws, c. 95, § 57; 74 Del. Laws, c. 221, § 6; 75 Del. Laws, c. 88, § 21(13); 75 Del. Laws, c. 254, § 1.;
§ 7415. Use of proceeds of bonds and notes.
The funds appropriated by an authorization act may be used only for the costs of the projects set forth in such act in an
amount for each such project not exceeding the amount authorized by such act for such project. Costs of projects may include
costs of surveys, maps, plans, designs, inspections, incidental land and equipment acquisition, incidental construction and
reconstruction, landscaping, costs of issuing bonds and notes, capitalized interest during construction and reconstruction,
fees for construction managers or persons performing similar functions and other costs incidental to the project. Such funds
shall not be used for ordinary or normal maintenance expenses or repair, except for costs authorized by law for maintenance
of and minor capital improvements to school buildings.
29 Del. C. 1953, § 7415; 54 Del. Laws, c. 124; 62 Del. Laws, c. 146, §§ 6, 21; 64 Del. Laws, c. 131, § 11(f).;
§ 7416. Timetable for use of funds and the sale of bonds and notes; commencement of authorized project.
(a) No funds appropriated by an authorization act shall be encumbered more than 3 years after the passage of such act for
any individual project unless: (1) Such project has progressed into any of the following phases prior to that date: Planning,
initial engineering, land, building or equipment acquisition, construction or reconstruction; and (2) 85 percent of the project
costs have been expended on 1 or more of such phases.
(b) No bonds or notes shall be issued or funds borrowed pursuant to an authorization act, 4 years after the passage of such
act, except: (1) As provided in 54 Del. Laws, c. 345, as amended (Chapter 75 of this title, as amended); and (2) with respect
to bonds authorized prior to this chapter which shall remain subject to the law under which they were originally authorized.
(c) Any project authorized to be undertaken with the proceeds of bonds of the State shall commence in the fiscal year in which
it is authorized. If such duly authorized project has not proceeded into 1 or more of the phases identified in subsection
(a) of this section within 18 months from the effective date of the original authorization, the authorized but unsold portion
of the bonds shall automatically be deauthorized and any unspent cash balances shall be reverted to the Bond Reversion Account
to be applied to the costs of any other authorized project, pursuant to § 7418 of this title.
29 Del. C. 1953, § 7416; 55 Del. Laws, c. 337; 62 Del. Laws, c. 146, §§ 6, 22; 64 Del. Laws, c. 131, § 11(f); 64 Del. Laws, c. 343, § 12(e), (f).;
§ 7417. Payment of debt service; first lien.
(a) Each annual Budget Appropriation Bill enacted by the General Assembly shall make sufficient provisions for the payment
of principal of, premium, if any, and interest on all bonds, notes and revenue notes payable or to be paid by their terms
during the fiscal year of the State for which such Budget Appropriation Bill is enacted.
(b) Vouchers for the payment of principal of, premium, if any, and interest on bonds, notes and revenue notes for payment
of expenses incident to the issuance of such obligations shall be signed by the State Treasurer.
(c) Any appropriation made by the General Assembly to pay principal of, premium, if any, and interest on bonds, notes or revenue
notes may be applied to pay principal of, premium, if any, and interest on obligations of other issuers pursuant to an agreement
made by the issuing officers with a person agreeing to pay principal of, premium, if any, or interest on bonds, notes or revenue
notes issued by the State.
(d) If, at any time, the State fails to make sufficient provisions to pay such principal of, premium, if any, and interest
on bonds, notes or revenue notes, or, at the time such principal, premium or interest is payable sufficient moneys are unavailable
for such payment, a sufficient sum shall be set apart by the State Treasurer from the first revenues thereafter received by
the State and shall be applied to such purposes. The State Treasurer may be required to set apart and apply such revenues
as provided herein at the suit of any holder of obligations for which such insufficient provision is made.
62 Del. Laws, c. 146, §§ 6, 23; 64 Del. Laws, c. 131, § 11(f); 66 Del. Laws, c. 360, § 16.;
§ 7418. Use of unexpended funds.
Any funds borrowed pursuant to an authorization act, and remaining unencumbered after the completion or abandonment of a project
authorized to be financed pursuant to such act, or because a project authorized to be financed by such act is not timely undertaken,
or upon the expiration of the period set forth in § 7416 of this title, shall be deposited in a special fund and applied,
with the approval of the issuing officers, to the cost of financing any previously authorized projects. The head of the department
or agency to which such funds were appropriated for a project shall determine when such project is completed or abandoned.
60 Del. Laws, c. 135, § 1; 62 Del. Laws, c. 146, §§ 6, 24; 64 Del. Laws, c. 131, § 11(f).;
§ 7419. Approval of plans, specifications, estimates and cash flows of projects.
(a) Delaware Technical and Community College, Delaware State University and all state departments and agencies shall submit
to Facilities Management of the Office of Management and Budget all proposed contracts for architectural services and all
architectural, structural, electrical and mechanical plans, specifications and cost estimates. Facilities Management of the
Office of Management and Budget shall be responsible for reviewing and approving such plans, specifications and cost estimates
prior to bid advertisement, and no such contracts nor contracts for construction and reconstruction of such projects (except
highway construction and reconstruction contracts and school district minor capital improvements contracts) shall be executed
without the prior approval of Facilities Management of the Office of Management and Budget. All such contracts shall be let
on the condition, among others, that the contractor comply with the State's equal opportunity laws. Facilities Management
of the Office of Management and Budget shall insure that approved projects are not inconsistent with any authorization of
budget act.
(b) Each state agency, department and institution of higher learning to which proceeds of bonds or notes are appropriated,
must, on an annual basis, report to the Director of the Office of Management and Budget the status and anticipated cash flow
for each project which is not complete.
62 Del. Laws, c. 146, §§ 6, 25; 63 Del. Laws, c. 189, § 5(h); 64 Del. Laws, c. 131, § 11(f); 65 Del. Laws, c. 434, §§ 3, 4; 69 Del. Laws, c. 10, §§ 11, 12; 69 Del. Laws, c. 67, § 2; 75 Del. Laws, c. 88, §§ 21(13), 37.;
§ 7420. Project restrictions.
(a) All new construction and/or reconstruction of existing structures financed with the proceeds of bonds or notes shall comply
with flood plain management requirements adopted by the municipality in which such structure is located pursuant to the National
Flood Insurance Act of 1968, as amended, or successor acts. If any such structure is in a flood program nonparticipating municipality,
then the State shall comply with the criteria set forth in Title 24, Code of Federal Regulations, §§ 1910.3, 1910.4 and 1910.5
[now §§ 60.3, 60.4, 60.5 and 60.6] issued pursuant to the National Flood Insurance Act of 1968, as amended, or successor acts.
(b) All projects funded with the proceeds of bonds or notes shall be built to standards that are no less stringent than American
Society of Heating, Refrigerating, and Air Conditioning Engineering, Inc., Standard 90-75, or successor standards.
(c) The restrictions imposed by this section shall be applicable to projects for which no expenditure has been made prior
to July 12, 1979, unless such project has been made subject to the same restrictions by another act of the General Assembly
or by contract.
(d) The department, agency or other body of the State to which proceeds of bonds or notes are appropriated shall require the
inspection of buildings to be constructed, reconstructed or rehabilitated with the proceeds of bonds or notes, and, at the
discretion of the Director of the Office of Management and Budget, shall require the inspection of other structures to be
financed with the proceeds of such obligations excluding highways, roads and bridges. Proceeds of bonds or notes shall be
allocated to provide for the cost of inspecting the projects to be financed with such funds. The portion of the total funds
appropriated to the cost of any such inspection shall not exceed the following percentages of such total funds appropriated
to the cost of such projects:
(1) Projects with a maximum cost in excess of $1,000,000
11/2%
(2) Projects with a maximum cost of $1,000,000 or less
13/4%
(3) Reconstruction and renovation projects
13/4%
The department or agency of the State to which proceeds of bonds or notes are appropriated shall let contracts for such inspection.
If the total maximum cost of a project is less than $50,000, the employment of an inspector shall be discretionary with the
department, agency or other body to whom such funds are appropriated. If a department, agency or other body retains a construction
manager, retention of an inspector shall be discretionary with the department, agency or other body regardless of the total
maximum cost of the project. In contracting for the inspection of such projects, first preference shall be given to an experienced
and able Delaware organization offering to provide such inspection services on a nonprofit, at-cost basis. Such contracts
shall not be deemed public works contracts as defined in 54 Del. Laws, c. 106, as amended (Chapter 69 of this title, as amended).
If no such organization is able or willing to perform such inspection services on such nonprofit, at-cost basis, then the
contracts for such services may be let with profit-making organizations subject to 54 Del. Laws, c. 106, as amended (Chapter
69 of this title, as amended).
62 Del. Laws, c. 146, §§ 6, 26; 63 Del. Laws, c. 189, § 5(h); 64 Del. Laws, c. 131, §§ 11(f), 17(a); 69 Del. Laws, c. 10, § 13; 75 Del. Laws, c. 88, § 21(13).;
§ 7421. Bonds, notes and revenue notes as legal investments for institutions and fiduciaries; legal deposit.
(a) Bonds, notes and revenue notes are securities in which any officer of the State and any officers of political subdivisions,
administrative departments, boards and commissions of the State, all banks, bankers, savings banks, trust companies, savings
and loan associations, investment companies and other persons carrying on a banking business, all insurance companies, insurance
associations and other persons carrying on an insurance business and all administrators, executors, guardians, trustees and
other fiduciaries, and all other persons whatsoever who are now or may, on and after July 12, 1979, be authorized to invest
in bonds, notes, revenue notes or other obligations of the State, may properly and legally invest any funds, including capital
belonging to them or within their control.
(b) Such bonds, notes and revenue notes are securities which may properly and legally be deposited with and received by any
officer of the State, or an officer of any political subdivision or agency of the State, for any purpose for which the deposit
of bonds, notes, revenue notes or other obligations of the State is now or may, on and after July 12, 1979, be authorized
by law.
62 Del. Laws, c. 146, §§ 6, 27; 64 Del. Laws, c. 131, § 11(f).;
§ 7422. Limitations on debt and other obligations.
(a) For the purposes of this section:
(1) "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) of this section), means the maximum payments due
with respect to all such obligations in any 1 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.
(2) "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 (provided that any such guaranteed obligations
shall be included only to the extent any such obligations are in default); and (B) all obligations of the State or any agency
or authority thereof extending beyond 1 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;
(C) any tax or other revenue anticipation notes or bonds of the State; or (D) any obligations to the extent that the debt
service with respect thereto is reasonably expected to be offset (as determined by the Secretary of Finance) by lease payments,
user fees, federal grants or other payments from some source other than the General Fund. Such payments shall be used expressly
for the purpose of paying such debt service.
(3) "Transportation Trust Fund debt obligations" means all debt obligations of the Delaware Transportation Authority, including
all obligations extending beyond 1 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 in any case are payable from
the Transportation Trust Fund. Transportation Trust Fund debt obligations do not include any obligations to the extent that
the debt service with respect thereto is reasonably expected to be offset (as determined by the Secretary of Finance) by lease
payments, user fees, federal grants or other payments from some nonstate source.
(b) The aggregate principal amount of tax supported obligations of the State which may be authorized by the State in any 1
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. Any amount of tax supported obligations which
were duly authorized before July 1, 1991, and which are duly deauthorized after June 30, 1991, may subsequently be reauthorized
without regard to the authorization limit otherwise provided by this subsection. Obligations authorized to refund other obligations
of the State shall not be subject to the limits of this subsection (b).
(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, in
both cases for the fiscal year following the fiscal year in which such obligation is incurred, such estimated revenue as determined
by the most recent projections made by the Delaware Economic and Financial Advisory Council and adjusted, if appropriate,
by the fiscal impact of subsequently enacted legislation as certified by the Secretary of Finance. 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 provided that such lease obligations shall not include
any obligations, the lease payments with respect to which are reasonably expected to be offset (as determined by the Secretary
of Finance) by lease payments, user fees, federal grants or other payments from some nonstate source. For the purposes of
this subsection, the maximum annual payments on the above-described lease obligations shall be as of the most recent date
available 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 following the fiscal year in which such obligation is incurred as estimated by the Secretary of Finance. 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) obligations guaranteed by the State except to the extent such obligations are in default; (iii) general obligation bonds
of the State issued prior to January 1, 1987, for the transportation related projects as certified by the Secretary of Finance;
(iv) tax or other revenue anticipation notes of the State; or (v) any obligations to the extent that the debt service with
respect thereto is reasonably expected to be offset (as determined by the Secretary of Finance) by lease payments, user fees,
federal grants or other payments from some source other than the General Fund.
(e) There shall be attached to every bill and amendment introduced in
the House of Representatives and/oor 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 Secretary of Finance
Debt Limit Statement Dated ____________
This Debt Limit Statement to be attached to ________________________ as
required by § 7422, Title 29, Delaware Code
(1) Estimated Net 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 Appro-
priation Bill for that fiscal year ………………………………… $ ____________
(2) Multiply by 5% ……………………………………………... x .05
(3) Maximum aggregate principal amount of new tax-supported obligations which
may be authorized by the State
in the fiscal year ending June 30, ______ ……………………… $ ____________
(4) Less aggregate principal amount of previously autho-
rized tax-supported obligations subject to debt limit …………... $ ____________
(5) AVAILABLE DEBT LIMIT prior to appended legislation
(3-4) …………………………………………………………….. $ ____________
(6) Less aggregate principal amount of new tax-supported obligations subject
to debt limit to be authorized pursu-
ant to appended legislation …………………………………….. $ ____________
The Secretary of Finance shall file said debt limit statement within 10 days
of said joint resolution with the Office of the Controller General and the
Director of the Office of Management and Budget.
(f) The certification of the Secretary of Finance referred to in this section
shall be in substantially the following form:
Certification of Secretary of Finance Regarding
Certain Revenue Supported Debt
____ B. No. ______ would authorize the issuance of $ ____________ principal
amount of obligations of the State for the purposes of
________________________. [Describe the arrangement pursuant to which it is
expected that the debt service will be offset by lease or other payments].
Accordingly, I hereby certify that I reasonably expect that the debt service
on $ ____________ principal amount of the above-described bonds will be offset
by payments to the State which are described in Title 29, Delaware Code, §
7422(a)(2)(D), (a)(3) or (d)(v).
____________ ____________________
Date Secretary of Finance
Date Secretary of Finance
29 Del. C. 1953, §§ 7422, 7423; 55 Del. Laws, c. 168, § 2; 57 Del. Laws, c. 176; 58 Del. Laws, c. 315, § 9; 58 Del. Laws, c. 420; 61 Del. Laws, c. 375, § 2; 62 Del. Laws, c. 146, §§ 6, 28; 63 Del. Laws, c. 189, § 5(h); 64 Del. Laws, c. 131, § 11(f); 68 Del. Laws, c. 7, § 1; 68 Del. Laws, c. 156, §§ 24(a)-(g); 69 Del. Laws, c. 10, § 14; 75 Del. Laws, c. 88, § 21(13).;
§ 7423. DEFAC projections and monitoring of debt limits.
The Delaware Economic and Financial Advisory Council shall publish at least semiannually in December and June the projections
described in § 7422(b) of this title. The Council shall also monitor the application and effect of the debt limits imposed
by § 7422 of this title and shall report annually to the General Assembly and the Governor with respect thereto. Such reports
shall include any recommendations with respect to such debt limits and the then current Debt Affordability Study prepared
by the Department of Finance.
68 Del. Laws, c. 7, § 2; 68 Del. Laws, c. 156, § 25.;
§ 7424. Right to obtain bondholder lists.
No holder or owner of any bond, note or revenue note shall have any right to obtain a list of registered owners or holders
of bonds, notes or revenue notes from the State or its agents by virtue of ownership nor holding of any such obligation, no
other law to the contrary notwithstanding.
64 Del. Laws, c. 131, § 11(e), (f); 70 Del. Laws, c. 186, § 1.;
§ 7425. Capital appreciation bonds and discount bonds.
The term "capital appreciation bonds" means any bond or bonds sold at a price substantially less than the principal amount
thereof and on which compounded interest is payable at maturity, as conclusively determined by the issuing officers, but only
if such bond or bonds are designated as capital appreciations by the issuing officers in the resolution authorizing the issuance
of bonds. For purposes of §§ 7422 and 7423 of this title, the aggregate principal amount of any capital appreciation bonds
or any other bonds sold to the public for a price less than the face amount thereof shall be the aggregate of the initial
offering prices at which such bonds are offered for sale to the public, whether in a private or negotiated sale or in a public
or competitive sale, or sold to the initial purchaser thereof in a private placement, without, in every case, reduction to
reflect underwriters' discount or placement agents' fees or other similar fees.
66 Del. Laws, c. 371, § 2; 69 Del. Laws, c. 386, § 31.;
§ 7426. Capital appreciation bonds and discount bonds; sale by State.
A maximum of 20 percent of the bonds authorized by each Bond and Capital Improvements Act of the State may be sold by the
State directly to retail purchasers or to financial intermediaries, or to an underwriter who agrees to use its best efforts
to sell such bonds to retail purchasers or to any intermediaries, such bonds to be herein referred to as "retail bonds." The
Secretary of Finance, the State Treasurer, the Director of the Office of Management and Budget and the Controller General
are hereby authorized to determine the terms and conditions of the retail bonds, and the manner, whether at public or private
negotiated sale, by which they shall be awarded to the purchasers thereof, notwithstanding anything to the contrary contained
in this chapter; provided, that the requirements of § 7422 of this title must be observed.
74 Del. Laws, c. 308, § 56; 75 Del. Laws, c. 88, § 21(13).;