GOVERNMENT OF THE DISTRICT OF COLUMBIA
OFFICE OF THE CHIEF FINANCIAL OFFICER
John A. Wilson Building * 1350 Pennsylvania Avenue, NW * Suite 203 * Washington, DC 20004
Phone: (202) 727-2476 * Fax: (202) 727-1643 * w ww.cfo.dc.gov
Glen Lee
Chief Financial Officer
January 3, 2023
The Honorable Phil Mendelson
Chairman
Council of the District of Columbia
1350 Pennsylvania Avenue, NW
Suite 504
Washington, D.C. 20004
Re: General Obligation Bonds and Bond Anticipation Notes Aut horization
Dear Chairman Mendelson:
Enclosed for consideration and approval by the Council of the District of Columbia is the
“General Obligation Bonds and Bond Anticipation Notes for Fiscal Years 20 23-2028
Authorization Act of 2023.”
The proposed legislation would authorize D.C. government (District) to issue general obligation
bonds or bond anticipation notes to finance planned capital projects and, as necessary, refund
existing debt during fiscal years 2023 through 2028. The legislation would allow t he District to
issue these bonds from time to time, in one or more series, in an aggregate principal amount not
to exceed $6.4 billion. The bonds or notes to be issued may be sold by competitive sale and are
intended to be issued on a tax- exempt or taxable basis. The funds that would be used to pay debt
service on the borrowing are included in the District’s F iscal Year 2023 Budget and Financial
Plan. The Office of the Attorney General has indicated in writing that this proposed legislation is
legally sufficient.
I am available to discuss any questions you may have regarding this legislation at (202) 727-
2476.
Sincerely,
Glen Lee
Enclosures
cc: Nyasha Smith
Secretary to the Council of the District of Columbia ewaneene
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DéDee
‘ChairmanPhilMendelson
attheRequestoftheChiefFinancialOfficer
ABILL
INTHECOUNCILOFTHEDISTRICTOFCOLUMBIA
Toauthorizetheissuanceofgeneralobligationbondsandgeneralobligationbondanticipation
notesoftheDistrictofColumbiaforthepurposesoffinancingcertaincapitalprojectsand
therefundingofcertaincapitalindebtednessoftheDistrictofColumbiaduringfiscalyears
2023through2028.
BEITENACTEDBYTHECOUNCILOFTHEDISTRICTOFCOLUMBIA,Thatthisact
maybecitedasthe"GeneralObligationBondsandBondAnticipationNotesforFiscalYears2023-
2028AuthorizationActof2023".
Sec.2.Definitions.
Forthepurposesofthisact,theterm:
(1)“AdditionalBonds"meansDistrictgeneralobligationbondsthatmaybeissued
pursuanttosection461oftheHomeRuleActandanyactenactedsubsequenttothisactona
paritywiththebonds.
(2)“AdditionalNotes"meansDistrictgeneralobligationbondanticipationnotes
thatmaybeissuedpursuanttosection475oftheHomeRuleActandanyactenactedsubsequentto
thisactonaparitywiththenotes.
(3)"AuthorizedDelegate”meansanyofficeroremployeeoftheexecutiveofficeof
theMayortowhomtheMayorhasdelegatedanyoftheMayor'sfunctionsunderthisactpursuantto
section422(6)oftheHomeRuleAct,including,butnotlimitedto,theChiefFinancialOfficer,the
CityAdministrator,andtheTreasureroftheDistrictofColumbia.
(4)"BondCounsel"meansafirmorfirmsofattorneysdesignatedasbond
counselorco-bondcounselfromtimetotimebytheMayororanAuthorizedDelegate.
2
(5) "Bonds" means District general obligation bonds authorized to be issued 1
pursuant to this act, including any refunding bonds. 2
(6) "Capital Projects" means the District capital projects as defined in section 3
103(8) of the Home Rule Act. 4
(7) "Deposit and Investment Act" means the Financial Institutions Deposit and 5
Investment Amendment Act of 1997, effective March 18, 1998 (D.C. Law 12-56; D.C. Official 6
Code § 47-351.01 et seq.). 7
(8) "Escrow Agreement" means any agreement heretofore or hereafter entered into 8
by the Mayor or an Authorized Delegate to provide for the custody, investment, and disbursement 9
of revenues and funds pledged to, and in which a security interest is created for, the payment of 10
the principal of, and interest on, the bonds or notes. 11
(9) "Hedge Agreement" means any financial arrangement that is a cap, floor, or 12
collar; forward rate; future rate; swap, which swap may be based on an amount equal to either a 13
principal amount or a notional principal amount relating to all or a portion of the principal 14
amount of a series of bonds; asset, index, price, or market-linked transaction or agreement; other 15
interest rate exchange or rate protection transaction agreement; other similar transactions, 16
however designated; any combination thereof; any option with respect thereto; or any similar 17
arrangement, which is executed by the District for purposes of debt management, including 18
managing interest rate fluctuations on bonds, but not for purposes of speculation. 19
(10) "Home Rule Act" means the District of Columbia Home Rule Act, approved 20
December 24, 1973 (87 Stat. 774; D.C. Official Code § 1-201.01 et seq.). 21
(11) "Notes" means District general obligation bond anticipation notes 22
authorized to be issued pursuant to this act, including any renewals of such notes. 23
3
(12) "Outstanding Debt" means the outstanding indebtedness at any time of the 1
District for capital project loans from the Treasury of the United States, any Treasury Advances, 2
any outstanding general obligation bonds issued pursuant to this or any prior act, any outstanding 3
general obligation bond anticipation notes issued pursuant to this or any prior act, and any 4
income tax secured revenue bonds issued pursuant to the Income Tax Secured Bond 5
Authorization Act of 2008, effective October 22, 2008 (D.C. Law 17-254, D.C. Official Code 6
§47-340.26 et seq.). 7
(13) "Paying Agent" means the District or any bank, trust company, or national 8
banking association designated to serve in this capacity by the Mayor or an Authorized Delegate 9
pursuant to section 6. 10
(14) "Procurement Act" means the District of Columbia Procurement Practices 11
Reform Act of 2010, effective April 8, 2011 (D.C. Law 18-371; D.C. Official Code § 2-351.01 et 12
seq.). 13
(15) "Registrar" means the District or any bank, trust company, or national 14
banking association designated to serve in this capacity by the Mayor or an Authorized 15
Delegate pursuant to section 6. 16
(16) "Secretary" means the Secretary of the District of Columbia. 17
(17) "Special Tax Fund" means the debt service fund established pursuant to 18
section 9(a)(1). 19
(18) “Special Tax Funds” means the debt service funds established pursuant to 20
9(a)(1) and 9(a)(2). 21
(19) “Special Tax Fund for Notes” means the debt service fund established 22
pursuant to section 9(a)(2). 23
4
(20) "Treasury Advances" means amounts advanced to the District from the 1
United States Treasury pursuant to Chapter 34 of Title 47 of the District of Columbia Official 2
Code. 3
Sec. 3. Findings. 4
The Council finds that: 5
(1) Section 461 of the Home Rule Act authorizes the District to incur indebtedness 6
by issuing general obligation bonds to refund Outstanding Debt of the District and to provide for 7
the payment of the cost of acquiring or undertaking its various capital projects. 8
(2) Section 475 of the Home Rule Act authorizes the District to incur indebtedness 9
by issuing general obligation bond anticipation notes, the proceeds of which shall be used for the 10
purposes for which general obligation bonds may be issued under section 461 of the Home Rule 11
Act. 12
(3) The cost of Outstanding Debt may be reduced by refunding a portion of it 13
through the issuance of the bonds and the District's cost of borrowing may be reduced by the 14
issuance from time to time of notes in anticipation of the issuance of bonds. 15
(4) The issuance of the bonds and the notes in anticipation of the bonds is an 16
economical method of financing the costs of acquiring or undertaking the capital projects 17
described in section 5 and of refunding all or a portion of certain Outstanding Debt as is in the 18
public interest. 19
(5) To fund the capital needs of the District for fiscal years 2023 through 2028, it 20
will be necessary to issue bonds from time to time in one or more series in an aggregate principal 21
amount not to exceed $6,400,000,000 and to issue notes from time to time in one or more series 22
5
in anticipation of all or a portion of the bonds. 1
Sec. 4. Bond and note authorization. 2
(a) The District is authorized to incur indebtedness by issuing the bonds pursuant to 3
sections 461 through 467 of the Home Rule Act to provide for any of the following: 4
(1) The payment of the cost of acquiring, undertaking, or refinancing capital 5
projects described in section 5 for general governmental and enterprise purposes; 6
(2) The reimbursing of amounts temporarily advanced for the purposes authorized 7
by this act from the General Fund of the District of Columbia, any enterprise fund, or other fund or 8
account of the District; 9
(3) The refunding of Outstanding Debt; and 10
(4) The payment of the costs and expenses of preparation, execution, issuance, sale 11
or delivery of, or security for, the bonds and notes, including the payments of contracts or 12
agreements the Mayor or an Authorized Delegate may determine to be necessary and appropriate 13
as described in section 7(f), and the payment of other debt program related costs as provided in 14
the contracts or agreements related thereto. 15
(b) The Mayor or an Authorized Delegate is authorized to pay from the proceeds of the 16
bonds and other District funds, the costs and expenses referred to in subsection (a)(4) of this 17
section and to the extent necessary to establish or continue the tax exempt status of any of the 18
bonds issued on a tax exempt basis. 19
(c) The District is authorized pursuant to section 475 of the Home Rule Act to issue the 20
notes in anticipation of the issuance of general obligation bonds and to expend the proceeds of 21
the notes for any of the purposes for which bonds may be issued. 22
6
Sec. 5. Capital projects. 1
(a)(1) Bonds and notes may be issued from time to time to provide for the payment of 2
the cost of acquiring, undertaking, or refinancing capital projects of the District and 3
reimbursement of amounts advanced for such purposes, including, but not limited to, capital 4
projects for the following categories of facilities and equipment by project and project 5
description: 6
(A) Physical plant; 7
(B) Technology; 8
(C) Mass transportation; 9
(D) Roads and bridges; 10
(E) Housing and economic development; 11
(F) Environmental protection; 12
(G) Major equipment; and 13
(H) Recreation. 14
(2) The Council shall specify and determine from time to time, by resolution, the 15
capital projects for which the issuance of bonds shall be authorized. 16
(b) The maximum principal amount of indebtedness that may be incurred through the 17
issuance of bonds or notes for the capital projects, exclusive of the costs and expenses of issuing 18
and delivering the bonds or notes and any other costs referred to in section 4(a)(4) which may 19
be funded with proceeds of the bonds or notes, shall not exceed $6,400,000,000; 20
provided, that the principal amount of any notes or bonds issued to refund prior notes or bonds 21
issued for any capital project shall not be included in the determination of the principal amount of 22
indebtedness issued for such project, and provided that the aggregate amount of any refunded notes 23
7
or additional notes refinanced with bonds or additional bonds shall be returned to the maximum 1
principal amount of indebtedness for use in future issuances. 2
(c) The maximum total principal amount to be financed through the bonds and notes 3
provided for the capital projects listed in subsection (a)(1) of this section shall include amounts 4
requested by the District government and approved by Congress in the District's Fiscal Year 5
2023-2028 Capital Improvements Plan or other capital projects approved by the Council, as it 6
may be modified from time to time by appropriations legislation, or by the Council. 7
(d) The costs of the capital projects approved for financing pursuant to this act and prior 8
bond acts that have become law, which are paid originally from the General Fund of the District of 9
Columbia or General Capital Improvements Fund of the District of Columbia, are reasonably 10
expected to be reimbursed in whole or in part with the proceeds of the bonds or notes in the 11
maximum amount set forth in subsection (b) of this section. The adoption of this act by the 12
Council declares the intent of the District under Treas. Reg. § 1.150-2, issued under the Internal 13
Revenue Code of 1986, approved October 22, 1986 (100 Stat. 2085; 26 U.S.C. § 1 et seq.), to 14
reimburse the General Fund of the District of Columbia and General Capital Improvement Fund of 15
the District of Columbia or to refinance Treasury Advances or loans from the Treasury of the 16
United States for capital projects, in either case, with the proceeds of the bonds and notes. 17
(e) Funds pursuant to this act shall not be used to pay for personnel of the District, 18
except in positions working on authorized capital projects that create assets or extend the useful 19
life of the assets. 20
Sec. 6. Bond and note details. 21
(a) The Mayor or an Authorized Delegate is authorized to take any action necessary or 22
appropriate in accordance with this act in connection with the preparation, execution, issuance, 23
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sale, delivery, security for, and payment of the bonds and notes, including, but not limited to, 1
determinations of: 2
(1) Whether the bonds or notes are to be issued in one or more series and the 3
principal amount of each series; 4
(2) For each series of the bonds or notes, the date of issuance, sale, and delivery of 5
the bonds or notes, the maturity date or dates of the bonds (provided that the maximum maturity of 6
any bond shall not exceed 30 years from the date of issuance) or notes (provided that the maximum 7
maturity date of any note, including any renewal note issued to refund such note, shall not be later 8
than the last day of the 3
rd
fiscal year following the fiscal year during which such note was 9
originally issued), the dates for payment of principal and interest on the bonds or notes, and the 10
amount of each installment or sinking fund payment of principal (provided that the principal 11
installments on each series of the bonds shall begin no later than 3 years from the date of issuance 12
of the series); 13
(3) The rate or rates of interest or the method for determining the rate or rates of 14
interest on each series of the bonds and notes; provided, that the interest rate or rates borne by 15
the bonds of any series with fixed interest rates shall not exceed 15% per year (calculated on the 16
basis of a 360-day year consisting of twelve 30-day months) in any event and that the interest rate 17
or rates borne by the bonds of any series with non-fixed interest rates shall not exceed 15% per 18
year (calculated on the basis of the actual number of days elapsed over a year of 365 or 366 days 19
and based on the total amount of interest paid in any fiscal year), and the interest rate or rates borne 20
by the notes of any series shall not exceed in the aggregate 10% per year (calculated on the basis of 21
a 360-day year consisting of twelve 30-day months or on the basis of the actual number of days 22
elapsed over a year of 365 or 366 days), as determined by the Mayor or the Authorized Delegate; 23
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provided further, that if the notes are not paid at maturity, the notes may provide for an interest rate 1
or rates after maturity not to exceed in the aggregate 15% per year (calculated on the basis of a 360-2
day year consisting of twelve 30-day months or on the basis of the actual number of days elapsed 3
over a year of 365 or 366 days), as determined by the Mayor or the Authorized Delegate; 4
(4) For each series of the bonds or notes, the maximum debt service payable in 5
any fiscal year in accordance with the amount permitted under section 11(a)(3); 6
(5) The designation of any series of the bonds or notes and their denominations, 7
lettering, and numbering or the manner of determining the designations and denominations, 8
lettering, and numbering; 9
(6) The price and terms under which any series of the bonds or notes may be 10
paid, optionally or mandatorily redeemed, accelerated, tendered, called, or put for redemption, 11
repurchase, or remarketing before their stated maturities; 12
(7) The final form, content, and terms of each series of the bonds and notes, 13
including a determination that any series of the bonds or notes may be issued in book-entry 14
form; 15
(8) The designation of a registrar, if other than the District, for any series of the 16
bonds or notes and the execution and delivery of any necessary agreements relating to the 17
appointment; 18
(9) The designation of a Paying Agent for any series of the bonds or notes and the 19
execution and delivery of any necessary agreements relating to the appointment; 20
(10) Provisions for the registration, transfer, and exchange of the bonds or notes and 21
the replacement of mutilated, lost, stolen, or destroyed bonds or notes; and 22
(11) Provisions for the security of holders of the bonds or notes, including, but not 23
10
limited to, bond insurance or other credit enhancement. 1
(b) The bonds and notes shall be executed in the name of the District and on its behalf by 2
the manual signature of the Mayor or an Authorized Delegate. To the extent required by the 3
Home Rule Act, the official seal of the District or a facsimile of it shall be impressed, printed, or 4
otherwise reproduced on
the bonds and notes. 5
(c) The registrar shall manually authenticate each bond or note and maintain the books of 6
registration for the payment of the principal of, and interest on, the bonds or notes and perform 7
other ministerial responsibilities as specifically provided in its appointment as registrar, and the 8
securities depository, if the bonds or notes are issued in book-entry form, shall maintain or cause to 9
be maintained books of registration of owners of beneficial interests in the bonds or notes. 10
Sec. 7. Sale of the bonds and notes. 11
(a) The bonds of any series may be sold by the Mayor or an Authorized Delegate at a 12
public sale upon receipt of sealed proposals (including electronic bids), or at a private sale on a 13
negotiated basis in a manner as the Mayor or an Authorized Delegate may determine to be in the 14
public interest, all pursuant to and in accordance with D.C. Official Code §1-204.66. The notes 15
of any series may be sold by the Mayor or an Authorized Delegate by competitive bid or 16
negotiated sale as may be determined by the Mayor or an Authorized Delegate to be in the best 17
interest of the District. 18
(b) The Mayor or an Authorized Delegate may prepare, or cause to be prepared, and may 19
execute, for each sale of the bonds or notes, offering documents on behalf of the District and may 20
authorize the distribution of the offering documents for the bonds or notes. 21
(c) The Mayor or an Authorized Delegate shall take actions and execute and deliver 22
agreements, documents, and instruments (including any amendment of or supplement to any 23
11
such agreement, document, or instrument) as required by or incidental to: 1
(1) The issuance of the bonds or notes; 2
(2) If and to the extent the bonds or notes are issued on a tax-exempt basis, the 3
'
exclusion from gross income for federal income tax purposes of interest on the bonds or notes, the 4
treatment of interest on the bonds or notes as not an item of tax preference for purposes of the 5
federal alternative minimum tax, and the exemption from District taxation of interest on the 6
bonds or notes; 7
(3) The performance of any covenants contained in this act or any purchase 8
contract for the bonds or notes; and 9
(4) The execution, delivery, and performance of any financing documents in 10
connection with the sale of the bonds or notes, including but not limited to, any Escrow 11
Agreement, trust agreement, bond or note purchase agreement, or paying agent agreement. 12
(d) The bonds or notes shall not be issued until the Mayor or an Authorized Delegate 13
receives an approving opinion from Bond Counsel as to the validity of the bonds or notes and, if 14
and to the extent the bonds or notes are issued on a tax-exempt basis, the treatment of the interest 15
on the bonds or notes for purposes of federal and District income taxation. 16
(e) The Mayor shall execute a bond issuance certificate or note issuance certificate, as the 17
case may be, evidencing the determinations made and other actions taken by the Mayor for each 18
series of the bonds or notes issued and shall designate in such certificate the amount of the bonds 19
or notes to be used to finance capital projects or to refund or refinance Outstanding Debt, the 20
amount of principal and interest on that amount of bonds or notes to be paid through sinking fund 21
payments, redemptions, or otherwise, in each fiscal year, the date of the bonds or notes, the series 22
designation, the authorized denominations, the Paying Agent or Agents, and any other matters 23
12
pertaining to the bonds or notes, including any matters applicable under section 6(a). A copy of the 1
bond issuance certificate or note issuance certificate, as the case may be, shall be filed with the 2
Secretary to the Council not more than 3 days after the delivery of the bonds or notes covered by 3
the certificate. Any bond issuance certificate or note issuance certificate shall be conclusive 4
evidence of the actions or determinations taken or made as stated in the certificate. 5
(f) The Procurement Act and the Deposit and Investment Act shall not apply to whatever 6
contract the Mayor or an Authorized Delegate may from time to time enter into for purposes of 7
this act or the Mayor or an Authorized Delegate may determine to be necessary or appropriate for 8
purposes of this act to place, in whole or in part, including, but not limited to: 9
(1) An investment or obligation of the District as represented by the bonds or 10
notes; 11
(2) A contract or contracts for bond insurance or other credit enhancement 12
(including, but not limited to, a letter or line of credits), or liquidity agreements, or 13
placement of any investment or obligation or program of investment including any offering 14
document, contract based on interest rate, currency, cash flow, or other basis, including, 15
without limitation, interest rate swap agreements; currency swap agreements; insurance agreements; 16
forward payment conversion agreements; futures contracts providing for payments based on levels 17
of, or changes in, interest rates, currency exchange rates, or stock or other indices; contracts to 18
exchange cash flows or a series of payments; and contracts to hedge payment, currency, rate, 19
spread, or similar exposure, including, without limitation, interest rate floors, or caps, options, 20
puts, and calls, Hedge Agreements, and any required supplements to any such documents. 21
The contracts or other arrangements may also be entered into by the District in connection with, or 22
incidental to, entering into or maintaining any agreement that secures the bonds or notes. The 23
13
contracts or other arrangements entered into pursuant to this section shall contain whatever payment 1
security, terms, and conditions as the Mayor or an Authorized Delegate may consider appropriate 2
and shall be entered into with whatever party or parties the Mayor or an Authorized Delegate may 3
select, after giving due consideration, where applicable, to the creditworthiness of the counterparty 4
or counterparties, including any rating by a nationally recognized rating agency or any other 5
criteria as may be appropriate. 6
(3) A contract or contracts for an escrow agent, paying agent, disclosure agent, 7
trustee, collection agent, registrar, underwriting, legal services, accounting, financial advisory 8
services, rating agency services, printing, and any other contracts for services of professionals or 9
advisors or for disclosure services as the Mayor or an Authorized Delegate may deem to be 10
necessary or appropriate. 11
Sec. 8. Payment and security of the bonds and notes. 12
(a) The full faith and credit of the District is pledged for the payment of the principal of, 13
and interest on, the bonds and notes as they become due and payable through required sinking fund 14
payments, redemptions, or otherwise. 15
(b) The Council shall, in the full exercise of the authority granted in section 483 of the 16
Home Rule Act and under any other law, provide in each annual budget for a fiscal year of the 17
District sufficient funds to pay the principal of, and interest on, the bonds and notes becoming 18
due and payable for any reason during that fiscal year. 19
(c) The Mayor shall, in the full exercise of the authority granted to the Mayor under the 20
Home Rule Act and under any other law, take such actions as may be necessary or appropriate to 21
ensure that the principal of, and interest on, the bonds and notes are paid when due for any reason, 22
14
including the payment of principal and interest from any funds or accounts of the District not 1
otherwise legally committed. 2
(d) The bonds and notes shall evidence continuing obligations of the District until paid in 3
accordance with their terms. 4
(e) Any Paying Agent shall pay the principal of, and interest on, the bonds and notes 5
and may perform other ministerial responsibilities as specifically provided in its appointment as 6
paying agent. 7
(f) Proceeds of the bonds or notes and any money set aside for any security for the bonds 8
or notes or any contract or other arrangement entered into pursuant to this section, may be pledged to 9
and used to service any contract or other arrangement providing for payment of principal of and 10
interest on the bonds or notes. 11
12
Sec. 9. Special tax; establishment of rates; collection. 13
(a) (1) The Council determines that a special tax is necessary in conjunction with the 14
authorization and issuance of the bonds and any Additional Bonds. Pursuant to section 481 of the 15
Home Rule Act and notwithstanding the provisions of Chapter 5 of Title 47 of the District of 16
Columbia Official Code, there is levied, for each real property tax year in which bonds or 17
Additional Bonds are outstanding, a special tax on the real property in the District subject to 18
taxation, in amounts that will be sufficient to pay the principal of, and interest on, the bonds and 19
Additional Bonds coming due in each year. This special tax is levied, without limitation as to rate 20
or amount, on all classes of real property subject to taxation in the District. The special tax shall be 21
collected and apportioned among classes of real property in the same manner as other District real 22
property taxes and, when collected, shall be set aside in a Special Tax Fund maintained separate 23
15
from other funds of the District. The collection and custody of the special tax payment may be 1
pursuant to an agreement with an agent for such purposes and the Special Tax Fund may be 2
maintained under an Escrow Agreement. When deposited, the funds in the fund and all investment 3
income or earnings on these funds shall be irrevocably dedicated and pledged to the payment of 4
principal, and interest on, the bonds and any Additional Bonds. Any Escrow Agreement providing 5
for holding funds for the benefit of the holders of the bonds shall be maintained so long as any of 6
the bonds is outstanding under this act. 7
(2) In addition to the special tax levied pursuant to subsection (a)(1), the Council 8
determines that a separate tax levy is necessary in conjunction with the authorization and issuance of 9
notes and any Additional Notes. Pursuant to section 467(a) of the Home Rule Act, and 10
notwithstanding the provisions of Chapter 5 of Title 47 of the District of Columbia Official Code, 11
there is levied, for each real property tax year in which notes or Additional Notes are outstanding, a 12
special tax for notes on the real property in the District subject to taxation, which shall be separate 13
and distinct from the collection and pledge of the special tax in subsection (a)(1), in amounts that will 14
be sufficient to pay the principal of, and interest on, the notes and Additional Notes coming due in 15
each year. This special tax for notes is levied, without limitation as to rate or amount, on all classes 16
of real property subject to taxation in the District. The special tax for notes shall be collected and 17
apportioned among classes of real property in the same manner as other District real property taxes 18
and, when collected, shall be set aside in a Special Tax Fund for Notes maintained separate from 19
other funds of the District, including the Special Tax Fund maintained under subsection (a)(1). The 20
collection and custody of the revenue pledge payment may be pursuant to an agreement with an 21
agent for such purposes and the Special Tax Fund for Notes may be maintained under an Escrow 22
Agreement. When deposited, the revenues in the fund and all investment income or earnings on 23
16
these funds shall be irrevocably dedicated and pledged to the payment of principal, and interest on, 1
the notes and any Additional Notes. Any Escrow Agreement providing for holding funds for the 2
benefit of the holders of the notes or Additional Notes shall be maintained so long as any of the notes 3
or Additional Notes is outstanding under this act. 4
(3) The special taxes authorized pursuant to subsections (a)(1) and (a)(2) shall be 5
levied and collected ratably and on a parity with each other, and in the event there are insufficient 6
collections of real property taxes, the amounts collected shall be allocated to each of the Special 7
Tax Funds in proportion of the amounts of bonds and Additional Bonds and notes and Additional 8
Notes outstanding. 9
(b) The District irrevocably pledges for and on behalf of the owners of the bonds or notes 10
as further security for the due and punctual payment of the principal and redemption price, if any, 11
of, and interest on, the bonds or notes as they shall become due and payable for any reason, all of 12
its right, title, and interest now owned or later acquired in and to the revenue from the applicable 13
special taxes levied by this section, whether to be received, or held at the time, by a collection 14
agent, custodian, or escrow agent for the District, or by District officials. This pledge creates and 15
grants a parity security interest, which is created and perfected as contemplated in section 467 of 16
the Home Rule Act, subject to the terms, conditions, and limitations in this act, including the 17
provisions of subsections (e) and (i) of this section and the provisions setting forth conditions and 18
limitations applicable to the issuance of Additional Bonds or Additional Notes secured, equally 19
and ratably with the bonds or notes, respectively by a pledge of and security interest in the special 20
tax revenue or special tax for notes revenue. 21
(c) The security interests created in the revenues from the special taxes levied by this 22
section shall be valid, binding, and perfected from the time of the delivery of the first bonds or 23
17
notes with or without the physical delivery or allocation of any special tax revenue or special tax 1
for notes revenue and with or without any further action. The security interest shall be valid, 2
binding, and perfected whether or not any statement, document, or instrument relating to the 3
security interest is recorded or filed. The pledge and lien created by the security interest shall be 4
valid, binding, and perfected with respect to any individual or legal entity having claims against 5
the District, whether or not the individual or legal entity has notice of the pledge and lien. 6
(d) If the District pays or, pursuant to section 15, makes provisions to pay to the owners of 7
all bonds and Additional Bonds or notes and Additional Notes the principal or redemption price, 8
if any, and the interest due or to become due, at the time and in the manner stipulated, the security 9
interest created in the revenue from the special taxes levied under this section shall be terminated. 10
(e)(1) In any real property tax year, if the amount expected to be on deposit in the Special 11
Tax Fund on the first day of the next succeeding real property tax year exceeds the greater of the 12
earnings on the Special Tax Fund for the current real property tax year or 1/12 of the amount that 13
the Mayor certifies as required to pay the principal of, and interest on, the bonds and any 14
Additional Bonds coming due in the next succeeding real property tax year, the Mayor shall either 15
cause the transfer of that excess amount to the General Fund of the District of Columbia or the 16
use of that excess amount to purchase, for cancellation, Outstanding Debt. That excess amount 17
shall be released from the lien on and security interest in the special tax revenue created under this 18
section. 19
(2) In any real property tax year, if the amount expected to be on deposit the 20
Special Tax Fund for Notes on the first day of the next succeeding real property tax year exceeds 21
the greater of the earnings on the Special Tax Fund for Notes for the current real property tax 22
year or 1/12 of the amount that the Mayor certifies as required to pay the principal of, and interest 23
18
on, the notes and any Additional Notes coming due in the next succeeding real property tax year, 1
the Mayor shall either cause the transfer of that excess amount to the General Fund of the District 2
of Columbia or the use of that excess amount to purchase, for cancellation, Outstanding Debt. 3
That excess amount shall be released from the lien on and security interest in the special tax for 4
notes revenue created under this section. 5
(3) On or before the date upon which the Mayor is required by law to submit to 6
the Council proposed real property tax rates for a real property tax year of the District (but not 7
later than the first day of that real property tax year), the Mayor shall certify to the Council the 8
amount required in that real property tax year to pay the principal of, and interest on, the bonds 9
and any Additional Bonds or notes and any Additional Notes coming due for any reason during 10
that real property tax year. The amount certified, less any funds then on deposit in the Special 11
Tax Funds after application of paragraphs (1) and (2) of this subsection, shall be called the 12
special tax requirement 13
(f) On or before the date upon which the Mayor is required by law to submit to the Council 14
proposed tax rates for a real property tax year of the District (but not later than the first day of that 15
real property tax year), the Mayor shall calculate and submit to the Council proposed real property 16
special tax rates to be applied during the real property tax year to all real property subject to 17
taxation in the District. The real property special tax rates shall be calculated to yield the special tax 18
requirement, as that amount is certified by the Mayor pursuant to subsection (e) of this section. 19
(g) The Council, in the same manner as provided for the establishment of other real 20
property tax rates, shall, by act, establish real property special tax rates for the real property tax 21
year calculated to yield the special tax requirement, as that amount is certified by the Mayor 22
pursuant to subsection (e) of this section. If the Council fails to enact special real property tax 23
19
rates for the real property tax year within the time provided by law, the real property special tax 1
rates submitted by the Mayor pursuant to subsection (f) of this section shall be the real property 2
special tax rates to be applied during that real property tax year. 3
(h) Real property special taxes shall be collected in the same manner as other District real 4
property taxes and the Mayor shall promptly deposit in the Special Tax Funds all real property 5
special taxes collected, including collection through a collection agent and deposit under an 6
Escrow Agreement. If the law of the District relating to the levy or collection of real property 7
taxes or the calculation or establishment of real property tax rates is changed in a manner that 8
renders any of the provisions of subsections (e) through (h) of this section incapable of 9
performance in accordance with their respective terms, the Mayor and the Council shall take 10
actions that result in the collection of real property special taxes, in the same manner as other 11
District real property taxes, in the amounts required by this section. 12
(i) The District and the Mayor reserve the right to satisfy all or a portion of the special tax 13
pledge requirements by setting aside and depositing into the Special Tax Funds, equally and ratably, 14
at any time any funds of the District not otherwise legally committed, which shall irrevocably 15
dedicate and pledge those deposits to the payment of principal of, and interest on, the bonds and 16
Additional Bonds or notes and any Additional Notes then outstanding. To the extent that all or a 17
portion of the special tax requirement or revenue pledge requirement is satisfied by those deposits, 18
an equal amount of real property special tax revenue or special tax for notes revenue subsequently 19
collected shall be released from the lien on and the security interest in the special tax revenue or the 20
special tax for notes revenue created under this section and shall be paid to reimburse the General 21
Fund of the District of Columbia or other fund of the District of Columbia from which the other 22
funds were received, and any other funds so deposited in lieu of a portion of the special tax revenues 23
20
or pledged property tax revenues shall be subject to the pledge and security interest under this act as 1
if they were special tax revenues or special tax for notes pledged revenues pursuant to section 467 of 2
the Home Rule Act. 3
(j) The Mayor shall provide for the payment of the principal of, and interest on, the bonds 4
or notes, as it may become due and payable for any reason, by transferring funds on deposit in the 5
Special Tax Funds, respectively, to the Paying Agent to the extent required pursuant to the bond or 6
Additional Bond issuance certificate or note or Additional Note issuance certificate provided for in 7
section 7. 8
Sec. 10. Issuance of bonds to pay notes when due. 9
(a) The District shall issue the bonds or, to the extent permitted by the Home Rule Act, 10
renewal notes to provide for the payment of the principal of the notes, as they may become due and 11
payable. 12
(b) The par value to be received from the sale of any bonds issued to refund the notes or any 13
renewal notes shall, to the extent necessary, be used to pay the principal of, and interest on, the 14
notes when due and are pledged to that purpose. 15
Sec. 11. General covenants. 16
(a) The following covenants are made by the District in connection with the 17
authorization and issuance of the bonds: 18
(1) Pursuant to section 603(c) of the Home Rule Act, the Council shall not approve 19
any budget that would result in expenditures being made by the District during any fiscal year in 20
excess of all resources which the Mayor estimates will be available from all funds available to the 21
District for that fiscal year, except as permitted by applicable law. The Mayor shall not forward to 22
21
the President for submission to Congress a budget that is not balanced according to the provisions 1
of section 603(c) of the Home Rule Act, except as permitted by applicable law. 2
(2) The District shall prepare its annual financial statements in accordance with 3
generally accepted accounting principles for state and local governments and cause its annual 4
financial statements to be audited by an independent accountant. 5
(3) The District shall not issue any general obligation bonds or general 6
obligation bond anticipation notes, other than bonds or renewal notes to refund any Outstanding 7
Debt, or incur any indebtedness to the Treasury of the United States for capital projects in an 8
amount that would cause the amount of debt service payable in any fiscal year on all the 9
indebtedness, including all outstanding bonds and loans, to exceed any limitations set forth in the 10
Home Rule Act or the borrowing limitation set forth in D. C. Official Code §47-335.02 at the time 11
the additional bonds or indebtedness are issued or incurred. For purposes of the limitation imposed 12
by this section, and as required by section 475(b) of the Home Rule Act, the Council hereby 13
determines that the estimated maximum annual debt service amount for the bonds anticipated by 14
the notes is $30 million. 15
(4) Subject to applicable law, the District shall maintain a capital projects fund, 16
separate from other funds of the District, into which it will deposit the proceeds of any bonds or 17
notes, other than bonds or notes issued to refund Outstanding Debt, less any capitalized interest 18
and accrued interest, and shall expend the proceeds only to finance capital projects and incidental 19
costs as defined in section 103(8) of the Home Rule Act. Subject to applicable law, the proceeds 20
of the bonds or notes may be escrowed in appropriate accounts with escrow agents or a trustee for 21
the bonds or notes to be applied to the applicable purposes. Interest or other investment earnings 22
of proceeds in the capital projects fund shall be credited to the General Fund of the District of 23
22
Columbia, subject to provisions for any deposit requirements to a rebate fund or other funds in 1
accordance with agreements pertaining to the bonds or notes. 2
(b) The Mayor or an Authorized Delegate may, through a trust agreement or other 3
instrument, make additional covenants of the District and agree to other provisions to better secure, 4
administer funds for, and protect the bonds or notes and the owners thereof 5
Sec. 12. Events of default. 6
(a) Each of the following events constitutes an event of default: 7
(1) Failure to pay the principal of the bonds or notes, as the case may be, when 8
the principal becomes due and payable at maturity, upon redemption, or otherwise; 9
(2) Failure to pay an installment of interest on the bonds or notes, as the case 10
may be, upon the day when the interest becomes due; and 11
(3) Failure by the District to observe and perform any covenant, condition, 12
agreement, or provision, other than as specified in paragraphs (1) and (2) of this subsection, 13
contained in the bonds or notes, as the case may be, or in this act, but only if the failure 14
continues for a period of 90 days after transmittal to the District of written notice of failure. 15
(b) A bond or note owner who claims an event of default under subsection (a)(3) of this 16
section shall provide to the registrar written notice specifying the failure and requesting that it be 17
remedied. Upon verifying that the written notice has been transmitted by a bona fide bond or note 18
owner, the registrar, if other than the District, shall transmit the written notice to the District. If 19
the registrar is the District, the written notice shall be delivered directly to the Mayor. Transmittal 20
to the District of the written notice required by subsection (a)(3) of this section shall not be 21
accomplished in any manner other than that set forth in this subsection. If there is a trust 22
agreement or Escrow Agreement for the bonds or notes, the notice by bond or note owners and 23
23
notice to the District shall be given by and to the persons designated in or pursuant to such 1
agreement. 2
Sec. 13. Remedies. 3
(a) Upon the occurrence and continuance of any event of default, any bond or note 4
owner may: 5
(1) By mandamus or other suit, action, or proceeding at law or in equity, enforce 6
all rights of the bond or note owner and require the District to carry out any agreements with or for 7
the benefit of the bond or note owner and to perform its duties under this act; 8
(2) Bring suit upon the bonds or notes, as the case may be; and 9
(3) By action or suit at law or in equity, enjoin any acts that may be unlawful or in 10
violation of the rights of the bond or note owner. 11
(b) If any proceeding initiated by any bond or note owner to enforce any right under this 12
act is discontinued or abandoned for any reason, the District and the bond or note owner shall be 13
restored to their former positions and rights, and all rights, remedies, and powers of each of the 14
parties shall continue as though the proceeding had not been initiated. 15
(c) Subject to the provisions of the Home Rule Act, if there is a trust agreement or 16
Escrow Agreement for the bonds or notes, actions under this act or such agreement, or on the 17
bonds or notes, as the case may be, shall be subject to applicable provisions in the agreement, 18
notwithstanding other provisions in this act. 19
Sec. 14. District officials. 20
(a) The elected and appointed officials, officers, employees, or agents of the District shall 21
not be liable personally for the payment of the bonds or notes or be subject to any personal 22
24
liability by reason of the issuance of the bonds or notes. 1
(b) The signature, countersignature, facsimile signature, or facsimile countersignature on 2
the bonds or notes shall be valid and sufficient for all purposes, notwithstanding the fact that the 3
official ceases to be that official before delivery of the bonds or notes. 4
Sec. 15. Defeasance of bonds and notes. 5
(a) The bonds or notes, as the case may be, shall be legally defeased and no longer be 6
considered outstanding and unpaid for the purpose of this act, and the requirements of this act 7
shall be discharged with respect to the bonds or the notes if the Mayor or an Authorized 8
Delegate: 9
(1) Deposits with an escrow agent, which shall be a bank, trust company, or 10
national banking association with requisite trust powers, in a separate defeasance escrow 11
account, established and maintained by the escrow agent solely at the expense of the 12
District and held in trust for the bond owners, sufficient moneys or direct obligations of the 13
United States, the principal of, and interest on, which, when due and payable, will provide 14
sufficient moneys to pay when due the principal of, and interest on, the bonds or notes to be 15
defeased; and 16
(2) Delivers to the defeasance escrow agent an irrevocable letter of instruction to 17
apply the moneys or investments to the payment of the principal of and interest on, the bonds or 18
notes to be defeased as they become due and payable. 19
(b) The defeasance escrow agent shall not invest the defeasance escrow account in any 20
investment callable at the option of its issuer if the call could result in less than sufficient moneys 21
being available for the purposes required by this section. 22
(c) The defeasance escrow account specified in subsection (a) of this section may be 23
25
established and maintained without regard to any District limitations placed on these accounts by 1
any law, except for this act. 2
(d) References in this section to "amounts due and payable" include, but are not limited to, 3
amounts due and payable by reason of optional or mandatory redemption. 4
Sec. 16. Additional debt and other obligations. 5
Subject to the terms of any trust agreement or Escrow Agreement pertaining to the bonds or 6
notes, the District reserves the right at any time to borrow money or enter into other 7
obligations to the full extent permitted by law, to secure the borrowings or obligations by the pledge 8
of its full faith and credit, to secure the borrowings or other obligations by any other security and 9
pledges of funds as may be authorized by law, and to issue bonds, including Additional Bonds, 10
notes, including Additional Notes, or other instruments, to evidence the borrowings or obligations. 11
Any act of the Council authorizing the issuance of Additional Bonds or Additional Notes shall 12
provide for an increase in the special tax requirements sufficient to pay principal of, and interest on, 13
the Additional Bonds or Additional Notes. 14
Sec. 17. Tax status. 15
If and to the extent the bonds or notes are issued on a tax-exempt basis, the Mayor or an 16
Authorized Delegate shall not (1) take any action or omit to take any action, or (2) invest, reinvest, 17
or accumulate any moneys in a manner, that will cause the interest on the bonds or notes, as the 18
case may be, to be includable in gross income for federal income tax purposes or to be treated as 19
an item of tax preference for purposes of the federal alternative minimum tax. The Mayor or an 20
Authorized Delegate shall also take all actions necessary to be taken, including to make any rebate 21
payment, if any, when due, so that the interest on the bonds or notes will not be includable in gross 22
26
income for federal income tax purposes or be treated as an item of tax preference for purposes of 1
the federal alternative minimum tax. 2
Sec. 18. Contract. 3
This act shall constitute a contract between the District and the owners of the bonds and 4
notes. To the extent that any acts or resolutions of the Council may be in conflict with this act, this 5
act shall be controlling with respect to bonds and notes. 6
Sec. 19. Authorized delegation of authority. 7
To the extent permitted by District and federal laws, the Mayor may delegate to any 8
authorized delegate the performance of any act authorized to be performed by the Mayor under this 9
act. 10
Sec. 20. Maintenance of documents. 11
Copies of the specimen bonds and notes and related documents shall be filed in the 12
Office of the Secretary of the District of Columbia. 13
See. 21. Information reporting. 14
(a) Within 3 days after the Mayor's receipt of the transcript of proceedings relating to 15
the issuance of any series of the bonds or notes, the Mayor shall transmit a copy of the transcript to 16
the Secretary to the Council. 17
(b) The Mayor shall notify the Council, within 30 days, if any funds or accounts of 18
the District not otherwise legally committed have been used for the payment of principal of 19
and interest on the bonds pursuant to section 8(c). 20
(c)(1) The Mayor's letter of transmittal accompanying the submission of any proposed 21
resolution to approve the issuance of bonds or notes pursuant to this act shall include a statement 22
27
as to: 1
(A) Whether the bonds or notes of any series are intended to be sold by 2
competitive bid or by negotiated sale and, if bonds of any series are intended to be sold by 3
negotiated sale, a copy of the Mayor's written determination that sale by competitive bid is not 4
feasible or is not in the best interests of the District and a statement of the reasons supporting 5
this determination; and 6
(B) Whether the bonds or notes of any series are intended to be issued on a 7
tax-exempt or taxable basis. 8
(d)(1) No portion of the proceeds of the sale of bonds or notes shall be used to 9
compensate a District employee unless the employee actually performs duties related to the 10
projects financed by this act, as provided in section 5(e). 11
(2) Within 30 days after the effective date of this act, and before any bonds or 12
notes are issued pursuant to this act, the Mayor shall submit to the Council a list of all 13
District employees who are compensated, in whole or part, by capital improvement funds. 14
(e) With respect to a negotiated sale of bonds or notes, the underwriters shall provide 15
written notification to the District of the following circumstances: 16
(1) Any relationship, during the prior 2 years, with elected or appointed District 17
officials, or the District's bond counsel or financial advisor, which could create a conflict of 18
interest or apparent conflict of interest with the duties performed, or to be performed, by such 19
underwriters or other advisors for the District; 20
(2) Any arrangement, during the prior 2 years, to share fees with other 21
underwriters, firms, or individuals in connection with the provision of services to the District by 22
either entity; and 23
28
(3) Any public finance transaction for any other issuer where the underwriter, or 1
prospective underwriter, is serving, or has served in the prior 2 years, as financial advisor in any 2
transaction where the District's financial advisor was, or is, an underwriter. 3
Sec. 22. Period of Limitations. 4
At the end of the 20-day period beginning on the date of the first publication pursuant to 5
the notice in section 463(a) that an act authorizing the issuance of the bonds has taken effect: 6
(1) Any recital or statement of fact contained in such act or in the preamble or title of 7
this act shall be deemed to be true for the purpose of determining the validity of any bonds 8
authorized by this act, and the District and all others interested shall be estopped from denying 9
any such recital or statement of fact; and 10
(2) This act, and all proceedings in connection with the authorization of the issuance 11
of bonds authorized by this act, shall be deemed to have been duly and regularly taken, passed, 12
and done by the District, in compliance with the Home Rule Act and all other applicable laws, for 13
the purpose of determining the validity of this act and the proceeding in connection with the 14
authorization and issuance of bonds authorized by this act; and no court shall have jurisdiction in 15
any suit, action, or proceeding commenced before the end of such 20-day period. 16
Sec 23. Severability. 17
As provided in the General Rule of Severability Adoption Act of 1983, effective March 18
14, 1984 (D.C. Law 5-56; D.C. Official Code § 45-201), if any provision of this act or the 19
application of this act to any person or circumstance is held to be unconstitutional or beyond the 20
29
statutory authority of the Council, or otherwise invalid, the invalidity shall not affect other 1
provisions or applications of the act that can be given effect without the invalid provision or 2
application, and to this end the provisions of this act are declared to be severable. 3
Sec. 25. Fiscal impact statement. 4
The Council adopts the fiscal impact statement in the committee report as the fiscal 5
impact statement required by section 602(c)(3) of the District of Columbia Home Rule Act, 6
approved December 24, 1973 (87 Stat. 813; D.C. Official Code § 1-206.02(c)(3)). 7
Sec. 26. Effective date. 8
This act shall take effect following approval by the Mayor (or in the event of veto by the 9
Mayor, action by the Council to override the veto), a 30-day period of Congressional review as 10
provided in section 602(c)(1) of the District of Columbia Home Rule Act, approved December 11
24, 1973 (87 Stat. 813; D.C. Official Code § 1-206.02(c)(1)), and publication in the District of 12
Columbia Register. 13 GOVERNMENT OF THE DISTRICT OF COLUMBIA
OFFICE OF THE ATTORNEY GENERAL
Commercial Division
Tax & Finance Section
MEMORANDUM
TO: Glen Lee
Chief Financ ial Officer
FROM: Patrick Allen
Senior Assistant Attorney General
Commercial Division
DATE: November 8, 2022
SUBJECT: Legal Sufficiency Certificate
This is to certif y that
the Office of the Attorney General has reviewed the General
Obligation Bonds and Bond Anticipation Notes for Fiscal Year s 2023-2028
Authorization Act of 2023 and found it to be legally sufficient. If you have any questions
in this regard, please do not hesitate to call me at (202) 724-7754.
_________________________________ Patrick Allen
Senior Assistant Attorney General