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Councilmember Kenyan R. McDuffie 2
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A BILL 5
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IN THE COUNCIL OF THE DISTRICT OF COLUMBIA 9
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To authorize, on a temporary basis, the issuance of general obligation bonds and general 14
obligation bond anticipation notes of the District of Columbia for the purposes of 15
financing certain capital projects and the refunding of certain capital indebtedness of the 16
District of Columbia during fiscal years 2023 through 2028. 17
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BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this act 19
may be cited as the "General Obligation Bonds and Bond Anticipation Notes for Fiscal Years 2023-20
2028 Authorization Temporary Act of 2023". 21
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Sec. 2. Definitions. 23
For the purposes of this act, the term: 24
(1) "Additional Bonds" means District general obligation bonds that may be issued 25
pursuant to section 461 of the Home Rule Act and any act enacted subsequent to this act on a parity 26
with the bonds. 27
(2) "Additional Notes" means District general obligation bond anticipation notes 28
that may be issued pursuant to section 475 of the Home Rule Act and any act enacted subsequent to 29
this act on a parity with the notes. 30
(3) "Authorized Delegate"' means any officer or employee of the executive office of 31
the Mayor to whom the Mayor has delegated any of the Mayor's functions under this act pursuant to 32
section 422(6) of the Home Rule Act, including, but not limited to, the Chief Financial Officer, the 33
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City Administrator, and the Treasurer of the District of Columbia. 34
(4) "Bond Counsel" means a firm or firms of attorneys designated as bond 35
counsel or co-bond counsel from time to time by the Mayor or an Authorized Delegate. 36
(5) "Bonds" means District general obligation bonds authorized to be issued 37
pursuant to this act, including any refunding bonds. 38
(6) "Capital Projects" means the District capital projects as defined in section 39
103(8) of the Home Rule Act. 40
(7) "Deposit and Investment Act" means the Financial Institutions Deposit and 41
Investment Amendment Act of 1997, effective March 18, 1998 (D.C. Law 12-56; D.C. Official 42
Code § 47-351.01 et seq.). 43
(8) "Escrow Agreement" means any agreement heretofore or hereafter entered into 44
by the Mayor or an Authorized Delegate to provide for the custody, investment, and disbursement 45
of revenues and funds pledged to, and in which a security interest is created for, the payment of 46
the principal of, and interest on, the bonds or notes. 47
(9) "Hedge Agreement" means any financial arrangement that is a cap, floor, or 48
collar; forward rate; future rate; swap, which swap may be based on an amount equal to either a 49
principal amount or a notional principal amount relating to all or a portion of the principal 50
amount of a series of bonds; asset, index, price, or market-linked transaction or agreement; other 51
interest rate exchange or rate protection transaction agreement; other similar transactions, 52
however designated; any combination thereof; any option with respect thereto; or any similar 53
arrangement, which is executed by the District for purposes of debt management, including 54
managing interest rate fluctuations on bonds, but not for purposes of speculation. 55
(10) "Home Rule Act" means the District of Columbia Home Rule Act, approved 56 3
December 24, 1973 (87 Stat. 774; D.C. Official Code § 1-201.01 et seq.). 57
(11) "Notes" means District general obligation bond anticipation notes 58
authorized to be issued pursuant to this act, including any renewals of such notes. 59
(12) "Outstanding Debt" means the outstanding indebtedness at any time of the 60
District for capital project loans from the Treasury of the United States, any Treasury Advances, 61
any outstanding general obligation bonds issued pursuant to this or any prior act, any outstanding 62
general obligation bond anticipation notes issued pursuant to this or any prior act, and any 63
income tax secured revenue bonds issued pursuant to the Income Tax Secured Bond 64
Authorization Act of 2008, effective October 22, 2008 (D.C. Law 17-254, D.C. Official Code 65
§ 47-340.26 et seq.). 66
(13) "Paying Agent" means the District or any bank, trust company, or national 67
banking association designated to serve in this capacity by the Mayor or an Authorized Delegate 68
pursuant to section 6. 69
(14) "Procurement Act" means the District of Columbia Procurement Practices 70
Reform Act of 2010, effective April 8, 2011 (D.C. Law 18-371; D.C. Official Code § 2-351.01 et 71
seq.). 72
(15) "Registrar" means the District or any bank, trust company, or national 73
banking association designated to serve in this capacity by the Mayor or an Authorized 74
Delegate pursuant to section 6. 75
(16) "Secretary" means the Secretary of the District of Columbia. 76
(17) "Special Tax Fund" means the debt service fund established pursuant to 77
section 9(a)(1). 78
(18) “Special Tax Funds” means the debt service funds established pursuant to 79 4
section 9(a)(1) and (2). 80
(19) “Special Tax Fund for Notes” means the debt service fund established 81
pursuant to section 9(a)(2). 82
(20) "Treasury Advances" means amounts advanced to the District from the 83
United States Treasury pursuant to Chapter 34 of Title 47 of the District of Columbia Official 84
Code. 85
Sec. 3. Findings. 86
The Council finds that: 87
(1) Section 461 of the Home Rule Act authorizes the District to incur indebtedness 88
by issuing general obligation bonds to refund Outstanding Debt of the District and to provide for 89
the payment of the cost of acquiring or undertaking its various capital projects. 90
(2) Section 475 of the Home Rule Act authorizes the District to incur indebtedness 91
by issuing general obligation bond anticipation notes, the proceeds of which shall be used for the 92
purposes for which general obligation bonds may be issued under section 461 of the Home Rule 93
Act. 94
(3) The cost of Outstanding Debt may be reduced by refunding a portion of it 95
through the issuance of the bonds, and the District's cost of borrowing may be reduced by the 96
issuance from time to time of notes in anticipation of the issuance of bonds. 97
(4) The issuance of the bonds and the notes in anticipation of the bonds is an 98
economical method of financing the costs of acquiring or undertaking the capital projects 99
described in section 5 and of refunding all or a portion of certain Outstanding Debt as is in the 100
public interest. 101
(5) To fund the capital needs of the District for fiscal years 2023 through 2028, it 102 5
will be necessary to issue bonds from time to time in one or more series in an aggregate principal 103
amount not to exceed $6,400,000,000 and to issue notes from time to time in one or more series 104
in anticipation of all or a portion of the bonds. 105
Sec. 4. Bond and note authorization. 106
(a) The District is authorized to incur indebtedness by issuing the bonds pursuant to 107
sections 461 through 467 of the Home Rule Act to provide for any of the following: 108
(1) The payment of the cost of acquiring, undertaking, or refinancing capital 109
projects described in section 5 for general governmental and enterprise purposes; 110
(2) The reimbursing of amounts temporarily advanced for the purposes authorized 111
by this act from the General Fund of the District of Columbia, any enterprise fund, or other fund or 112
account of the District; 113
(3) The refunding of Outstanding Debt; and 114
(4) The payment of the costs and expenses of preparation, execution, issuance, sale 115
or delivery of, or security for, the bonds and notes, including the payments of contracts or 116
agreements the Mayor or an Authorized Delegate may determine to be necessary and appropriate 117
as described in section 7(f), and the payment of other debt program related costs as provided in 118
the contracts or agreements related thereto. 119
(b) The Mayor or an Authorized Delegate is authorized to pay from the proceeds of the 120
bonds and other District funds, the costs and expenses referred to in subsection (a)(4) of this 121
section and to the extent necessary to establish or continue the tax exempt status of any of the 122
bonds issued on a tax exempt basis. 123
(c) The District is authorized pursuant to section 475 of the Home Rule Act to issue the 124
notes in anticipation of the issuance of general obligation bonds and to expend the proceeds of 125 6
the notes for any of the purposes for which bonds may be issued. 126
Sec. 5. Capital projects. 127
(a)(1) Bonds and notes may be issued from time to time to provide for the payment of 128
the cost of acquiring, undertaking, or refinancing capital projects of the District and 129
reimbursement of amounts advanced for such purposes, including, but not limited to, capital 130
projects for the following categories of facilities and equipment by project and project 131
description: 132
(A) Physical plant; 133
(B) Technology; 134
(C) Mass transportation; 135
(D) Roads and bridges; 136
(E) Housing and economic development; 137
(F) Environmental protection; 138
(G) Major equipment; and 139
(H) Recreation. 140
(2) The Council shall specify and determine from time to time, by resolution, the 141
capital projects for which the issuance of bonds shall be authorized. 142
(b) The maximum principal amount of indebtedness that may be incurred through the 143
issuance of bonds or notes for the capital projects, exclusive of the costs and expenses of issuing 144
and delivering the bonds or notes and any other costs referred to in section 4(a)(4), which may 145
be funded with proceeds of the bonds or notes, shall not exceed $6,400,000,000; 146
provided, that the principal amount of any notes or bonds issued to refund prior notes or bonds 147
issued for any capital project shall not be included in the determination of the principal amount of 148 7
indebtedness issued for such project, and provided that the aggregate amount of any refunded notes 149
or additional notes refinanced with bonds or additional bonds shall be returned to the maximum 150
principal amount of indebtedness for use in future issuances. 151
(c) The maximum total principal amount to be financed through the bonds and notes 152
provided for the capital projects listed in subsection (a)(1) of this section shall include amounts 153
requested by the District government and approved by Congress in the District's Fiscal Year 154
2023-2028 Capital Improvements Plan or other capital projects approved by the Council, as it 155
may be modified from time to time by appropriations legislation, or by the Council. 156
(d) The costs of the capital projects approved for financing pursuant to this act and prior 157
bond acts that have become law, which are paid originally from the General Fund of the District of 158
Columbia or General Capital Improvements Fund of the District of Columbia, are reasonably 159
expected to be reimbursed in whole or in part with the proceeds of the bonds or notes in the 160
maximum amount set forth in subsection (b) of this section. The adoption of this act by the 161
Council declares the intent of the District under Treas. Reg. § 1.150-2, issued under the Internal 162
Revenue Code of 1986, approved October 22, 1986 (100 Stat. 2085; 26 U.S.C. § 1 et seq.), to 163
reimburse the General Fund of the District of Columbia and General Capital Improvement Fund of 164
the District of Columbia or to refinance Treasury Advances or loans from the Treasury of the 165
United States for capital projects, in either case, with the proceeds of the bonds and notes. 166
(e) Funds pursuant to this act shall not be used to pay for personnel of the District, 167
except in positions working on authorized capital projects that create assets or extend the useful 168
life of the assets. 169
Sec. 6. Bond and note details. 170
(a) The Mayor or an Authorized Delegate is authorized to take any action necessary or 171 8
appropriate in accordance with this act in connection with the preparation, execution, issuance, 172
sale, delivery, security for, and payment of the bonds and notes, including, but not limited to, 173
determinations of: 174
(1) Whether the bonds or notes are to be issued in one or more series and the 175
principal amount of each series; 176
(2) For each series of the bonds or notes, the date of issuance, sale, and delivery of 177
the bonds or notes, the maturity date or dates of the bonds (provided that the maximum maturity of 178
any bond shall not exceed 30 years from the date of issuance) or notes (provided that the maximum 179
maturity date of any note, including any renewal note issued to refund such note, shall not be later 180
than the last day of the 3rd
fiscal year following the fiscal year during which such note was 181
originally issued), the dates for payment of principal and interest on the bonds or notes, and the 182
amount of each installment or sinking fund payment of principal (provided that the principal 183
installments on each series of the bonds shall begin no later than 3 years from the date of issuance 184
of the series); 185
(3) The rate or rates of interest or the method for determining the rate or rates of 186
interest on each series of the bonds and notes; provided, that the interest rate or rates borne by 187
the bonds of any series with fixed interest rates shall not exceed 15% per year (calculated on the 188
basis of a 360-day year consisting of twelve 30-day months) in any event and that the interest rate 189
or rates borne by the bonds of any series with non-fixed interest rates shall not exceed 15% per 190
year (calculated on the basis of the actual number of days elapsed over a year of 365 or 366 days 191
and based on the total amount of interest paid in any fiscal year), and the interest rate or rates borne 192
by the notes of any series shall not exceed in the aggregate 10% per year (calculated on the basis of 193
a 360-day year consisting of twelve 30-day months or on the basis of the actual number of days 194 9
elapsed over a year of 365 or 366 days), as determined by the Mayor or the Authorized Delegate; 195
provided further, that if the notes are not paid at maturity, the notes may provide for an interest rate 196
or rates after maturity not to exceed in the aggregate 15% per year (calculated on the basis of a 360-197
day year consisting of twelve 30-day months or on the basis of the actual number of days elapsed 198
over a year of 365 or 366 days), as determined by the Mayor or the Authorized Delegate; 199
(4) For each series of the bonds or notes, the maximum debt service payable in 200
any fiscal year in accordance with the amount permitted under section 11(a)(3); 201
(5) The designation of any series of the bonds or notes and their denominations, 202
lettering, and numbering or the manner of determining the designations and denominations, 203
lettering, and numbering; 204
(6) The price and terms under which any series of the bonds or notes may be 205
paid, optionally or mandatorily redeemed, accelerated, tendered, called, or put for redemption, 206
repurchase, or remarketing before their stated maturities; 207
(7) The final form, content, and terms of each series of the bonds and notes, 208
including a determination that any series of the bonds or notes may be issued in book-entry 209
form; 210
(8) The designation of a registrar, if other than the District, for any series of the 211
bonds or notes and the execution and delivery of any necessary agreements relating to the 212
appointment; 213
(9) The designation of a Paying Agent for any series of the bonds or notes and the 214
execution and delivery of any necessary agreements relating to the appointment; 215
(10) Provisions for the registration, transfer, and exchange of the bonds or notes and 216
the replacement of mutilated, lost, stolen, or destroyed bonds or notes; and 217 10
(11) Provisions for the security of holders of the bonds or notes, including, but not 218
limited to, bond insurance or other credit enhancement. 219
(b) The bonds and notes shall be executed in the name of the District and on its behalf by 220
the manual signature of the Mayor or an Authorized Delegate. To the extent required by the 221
Home Rule Act, the official seal of the District or a facsimile of it shall be impressed, printed, or 222
otherwise reproduced on
the bonds and notes. 223
(c) The registrar shall manually authenticate each bond or note and maintain the books of 224
registration for the payment of the principal of, and interest on, the bonds or notes and perform 225
other ministerial responsibilities as specifically provided in its appointment as registrar, and the 226
securities depository, if the bonds or notes are issued in book-entry form, shall maintain or cause to 227
be maintained books of registration of owners of beneficial interests in the bonds or notes. 228
Sec. 7. Sale of the bonds and notes. 229
(a) The bonds of any series may be sold by the Mayor or an Authorized Delegate at a 230
public sale upon receipt of sealed proposals (including electronic bids), or at a private sale on a 231
negotiated basis in a manner as the Mayor or an Authorized Delegate may determine to be in the 232
public interest, all pursuant to and in accordance with section 466 of the Home Rule Act. The 233
notes of any series may be sold by the Mayor or an Authorized Delegate by competitive bid or 234
negotiated sale as may be determined by the Mayor or an Authorized Delegate to be in the best 235
interest of the District. 236
(b) The Mayor or an Authorized Delegate may prepare, or cause to be prepared, and may 237
execute, for each sale of the bonds or notes, offering documents on behalf of the District and may 238
authorize the distribution of the offering documents for the bonds or notes. 239
(c) The Mayor or an Authorized Delegate shall take actions and execute and deliver 240 11
agreements, documents, and instruments (including any amendment of or supplement to any 241
such agreement, document, or instrument) as required by or incidental to: 242
(1) The issuance of the bonds or notes; 243
(2) If and to the extent the bonds or notes are issued on a tax-exempt basis, the 244
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exclusion from gross income for federal income tax purposes of interest on the bonds or notes, the 245
treatment of interest on the bonds or notes as not an item of tax preference for purposes of the 246
federal alternative minimum tax, and the exemption from District taxation of interest on the 247
bonds or notes; 248
(3) The performance of any covenants contained in this act or any purchase 249
contract for the bonds or notes; and 250
(4) The execution, delivery, and performance of any financing documents in 251
connection with the sale of the bonds or notes, including but not limited to, any Escrow 252
Agreement, trust agreement, bond or note purchase agreement, or paying agent agreement. 253
(d) The bonds or notes shall not be issued until the Mayor or an Authorized Delegate 254
receives an approving opinion from Bond Counsel as to the validity of the bonds or notes and, if 255
and to the extent the bonds or notes are issued on a tax-exempt basis, the treatment of the interest 256
on the bonds or notes for purposes of federal and District income taxation. 257
(e) The Mayor shall execute a bond issuance certificate or note issuance certificate, as the 258
case may be, evidencing the determinations made and other actions taken by the Mayor for each 259
series of the bonds or notes issued and shall designate in such certificate the amount of the bonds 260
or notes to be used to finance capital projects or to refund or refinance Outstanding Debt, the 261
amount of principal and interest on that amount of bonds or notes to be paid through sinking fund 262
payments, redemptions, or otherwise, in each fiscal year, the date of the bonds or notes, the series 263 12
designation, the authorized denominations, the Paying Agent or Agents, and any other matters 264
pertaining to the bonds or notes, including any matters applicable under section 6(a). A copy of the 265
bond issuance certificate or note issuance certificate, as the case may be, shall be filed with the 266
Secretary to the Council not more than 3 days after the delivery of the bonds or notes covered by 267
the certificate. Any bond issuance certificate or note issuance certificate shall be conclusive 268
evidence of the actions or determinations taken or made as stated in the certificate. 269
(f) The Procurement Act and the Deposit and Investment Act shall not apply to whatever 270
contract the Mayor or an Authorized Delegate may from time to time enter into for purposes of 271
this act or the Mayor or an Authorized Delegate may determine to be necessary or appropriate for 272
purposes of this act to place, in whole or in part, including, but not limited to: 273
(1) An investment or obligation of the District as represented by the bonds or 274
notes; 275
(2) A contract or contracts for bond insurance or other credit enhancement 276
(including, but not limited to, a letter or line of credits), or liquidity agreements, or 277
placement of any investment or obligation or program of investment including any offering 278
document, contract based on interest rate, currency, cash flow, or other basis, including, 279
without limitation, interest rate swap agreements; currency swap agreements; insurance agreements; 280
forward payment conversion agreements; futures contracts providing for payments based on levels 281
of, or changes in, interest rates, currency exchange rates, or stock or other indices; contracts to 282
exchange cash flows or a series of payments; and contracts to hedge payment, currency, rate, 283
spread, or similar exposure, including, without limitation, interest rate floors, or caps, options, 284
puts, and calls, Hedge Agreements, and any required supplements to any such documents. 285
The contracts or other arrangements may also be entered into by the District in connection with, or 286 13
incidental to, entering into or maintaining any agreement that secures the bonds or notes. The 287
contracts or other arrangements entered into pursuant to this section shall contain whatever payment 288
security, terms, and conditions as the Mayor or an Authorized Delegate may consider appropriate 289
and shall be entered into with whatever party or parties the Mayor or an Authorized Delegate may 290
select, after giving due consideration, where applicable, to the creditworthiness of the counterparty 291
or counterparties, including any rating by a nationally recognized rating agency or any other 292
criteria as may be appropriate. 293
(3) A contract or contracts for an escrow agent, paying agent, disclosure agent, 294
trustee, collection agent, registrar, underwriting, legal services, accounting, financial advisory 295
services, rating agency services, printing, and any other contracts for services of professionals or 296
advisors or for disclosure services as the Mayor or an Authorized Delegate may deem to be 297
necessary or appropriate. 298
Sec. 8. Payment and security of the bonds and notes. 299
(a) The full faith and credit of the District is pledged for the payment of the principal of, 300
and interest on, the bonds and notes as they become due and payable through required sinking fund 301
payments, redemptions, or otherwise. 302
(b) The Council shall, in the full exercise of the authority granted in section 483 of the 303
Home Rule Act and under any other law, provide in each annual budget for a fiscal year of the 304
District sufficient funds to pay the principal of, and interest on, the bonds and notes becoming 305
due and payable for any reason during that fiscal year. 306
(c) The Mayor shall, in the full exercise of the authority granted to the Mayor under the 307
Home Rule Act and under any other law, take such actions as may be necessary or appropriate to 308
ensure that the principal of, and interest on, the bonds and notes are paid when due for any reason, 309 14
including the payment of principal and interest from any funds or accounts of the District not 310
otherwise legally committed. 311
(d) The bonds and notes shall evidence continuing obligations of the District until paid in 312
accordance with their terms. 313
(e) Any Paying Agent shall pay the principal of, and interest on, the bonds and notes 314
and may perform other ministerial responsibilities as specifically provided in its appointment as 315
paying agent. 316
(f) Proceeds of the bonds or notes and any money set aside for any security for the bonds 317
or notes or any contract or other arrangement entered into pursuant to this section, may be pledged to 318
and used to service any contract or other arrangement providing for payment of principal of and 319
interest on the bonds or notes. 320
Sec. 9. Special tax; establishment of rates; collection. 321
(a) (1) The Council determines that a special tax is necessary in conjunction with the 322
authorization and issuance of the bonds and any Additional Bonds. Pursuant to section 481 of the 323
Home Rule Act and notwithstanding the provisions of Chapter 5 of Title 47 of the District of 324
Columbia Official Code, there is levied, for each real property tax year in which bonds or 325
Additional Bonds are outstanding, a special tax on the real property in the District subject to 326
taxation, in amounts that will be sufficient to pay the principal of, and interest on, the bonds and 327
Additional Bonds coming due in each year. This special tax is levied, without limitation as to rate 328
or amount, on all classes of real property subject to taxation in the District. The special tax shall be 329
collected and apportioned among classes of real property in the same manner as other District real 330
property taxes and, when collected, shall be set aside in a Special Tax Fund maintained separate 331
from other funds of the District. The collection and custody of the special tax payment may be 332 15
pursuant to an agreement with an agent for such purposes and the Special Tax Fund may be 333
maintained under an Escrow Agreement. When deposited, the funds in the fund and all investment 334
income or earnings on these funds shall be irrevocably dedicated and pledged to the payment of 335
principal, and interest on, the bonds and any Additional Bonds. Any Escrow Agreement providing 336
for holding funds for the benefit of the holders of the bonds shall be maintained so long as any of 337
the bonds is outstanding under this act. 338
(2) In addition to the special tax levied pursuant to paragraph (1) of this subsection, the 339
Council determines that a separate tax levy is necessary in conjunction with the authorization and 340
issuance of notes and any Additional Notes. Pursuant to section 467(a) of the Home Rule Act, and 341
notwithstanding the provisions of Chapter 5 of Title 47 of the District of Columbia Official Code, 342
there is levied, for each real property tax year in which notes or Additional Notes are outstanding, a 343
special tax for notes on the real property in the District subject to taxation, which shall be separate 344
and distinct from the collection and pledge of the special tax in paragraph (1) of this subsection, in 345
amounts that will be sufficient to pay the principal of, and interest on, the notes and Additional Notes 346
coming due in each year. This special tax for notes is levied, without limitation as to rate or amount, 347
on all classes of real property subject to taxation in the District. The special tax for notes shall be 348
collected and apportioned among classes of real property in the same manner as other District real 349
property taxes and, when collected, shall be set aside in a Special Tax Fund for Notes maintained 350
separate from other funds of the District, including the Special Tax Fund maintained under paragraph 351
(1) of this subsection. The collection and custody of the revenue pledge payment may be pursuant to 352
an agreement with an agent for such purposes and the Special Tax Fund for Notes may be 353
maintained under an Escrow Agreement. When deposited, the revenues in the fund and all 354
investment income or earnings on these funds shall be irrevocably dedicated and pledged to the 355 16
payment of principal, and interest on, the notes and any Additional Notes. Any Escrow Agreement 356
providing for holding funds for the benefit of the holders of the notes or Additional Notes shall be 357
maintained so long as any of the notes or Additional Notes is outstanding under this act. 358
(3) The special taxes authorized pursuant to subsection (a)(1) and (2) of this section 359
shall be levied and collected ratably and on a parity with each other, and in the event there are 360
insufficient collections of real property taxes, the amounts collected shall be allocated to each of 361
the Special Tax Funds in proportion of the amounts of bonds and Additional Bonds and notes and 362
Additional Notes outstanding. 363
(b) The District irrevocably pledges for and on behalf of the owners of the bonds or notes 364
as further security for the due and punctual payment of the principal and redemption price, if any, 365
of, and interest on, the bonds or notes as they shall become due and payable for any reason, all of 366
its right, title, and interest now owned or later acquired in and to the revenue from the applicable 367
special taxes levied by this section, whether to be received, or held at the time, by a collection 368
agent, custodian, or escrow agent for the District, or by District officials. This pledge creates and 369
grants a parity security interest, which is created and perfected as contemplated in section 467 of 370
the Home Rule Act, subject to the terms, conditions, and limitations in this act, including the 371
provisions of subsections (e) and (i) of this section and the provisions setting forth conditions and 372
limitations applicable to the issuance of Additional Bonds or Additional Notes secured, equally 373
and ratably with the bonds or notes, respectively by a pledge of and security interest in the special 374
tax revenue or special tax for notes revenue. 375
(c) The security interests created in the revenues from the special taxes levied by this 376
section shall be valid, binding, and perfected from the time of the delivery of the first bonds or 377
notes with or without the physical delivery or allocation of any special tax revenue or special tax 378 17
for notes revenue and with or without any further action. The security interest shall be valid, 379
binding, and perfected whether or not any statement, document, or instrument relating to the 380
security interest is recorded or filed. The pledge and lien created by the security interest shall be 381
valid, binding, and perfected with respect to any individual or legal entity having claims against 382
the District, whether or not the individual or legal entity has notice of the pledge and lien. 383
(d) If the District pays or, pursuant to section 15, makes provisions to pay to the owners of 384
all bonds and Additional Bonds or notes and Additional Notes the principal or redemption price, 385
if any, and the interest due or to become due, at the time and in the manner stipulated, the security 386
interest created in the revenue from the special taxes levied under this section shall be terminated. 387
(e)(1) In any real property tax year, if the amount expected to be on deposit in the Special 388
Tax Fund on the first day of the next succeeding real property tax year exceeds the greater of the 389
earnings on the Special Tax Fund for the current real property tax year or 1/12 of the amount that 390
the Mayor certifies as required to pay the principal of, and interest on, the bonds and any 391
Additional Bonds coming due in the next succeeding real property tax year, the Mayor shall either 392
cause the transfer of that excess amount to the General Fund of the District of Columbia or the 393
use of that excess amount to purchase, for cancellation, Outstanding Debt. That excess amount 394
shall be released from the lien on and security interest in the special tax revenue created under this 395
section. 396
(2) In any real property tax year, if the amount expected to be on deposit the 397
Special Tax Fund for Notes on the first day of the next succeeding real property tax year exceeds 398
the greater of the earnings on the Special Tax Fund for Notes for the current real property tax 399
year or 1/12 of the amount that the Mayor certifies as required to pay the principal of, and interest 400
on, the notes and any Additional Notes coming due in the next succeeding real property tax year, 401 18
the Mayor shall either cause the transfer of that excess amount to the General Fund of the District 402
of Columbia or the use of that excess amount to purchase, for cancellation, Outstanding Debt. 403
That excess amount shall be released from the lien on and security interest in the special tax for 404
notes revenue created under this section. 405
(3) On or before the date upon which the Mayor is required by law to submit to 406
the Council proposed real property tax rates for a real property tax year of the District (but not 407
later than the first day of that real property tax year), the Mayor shall certify to the Council the 408
amount required in that real property tax year to pay the principal of, and interest on, the bonds 409
and any Additional Bonds or notes and any Additional Notes coming due for any reason during 410
that real property tax year. The amount certified, less any funds then on deposit in the Special 411
Tax Funds after application of paragraphs (1) and (2) of this subsection, shall be called the 412
special tax requirement. 413
(f) On or before the date upon which the Mayor is required by law to submit to the Council 414
proposed tax rates for a real property tax year of the District (but not later than the first day of that 415
real property tax year), the Mayor shall calculate and submit to the Council proposed real property 416
special tax rates to be applied during the real property tax year to all real property subject to 417
taxation in the District. The real property special tax rates shall be calculated to yield the special tax 418
requirement, as that amount is certified by the Mayor pursuant to subsection (e) of this section. 419
(g) The Council, in the same manner as provided for the establishment of other real 420
property tax rates, shall, by act, establish real property special tax rates for the real property tax 421
year calculated to yield the special tax requirement, as that amount is certified by the Mayor 422
pursuant to subsection (e) of this section. If the Council fails to enact special real property tax 423
rates for the real property tax year within the time provided by law, the real property special tax 424 19
rates submitted by the Mayor pursuant to subsection (f) of this section shall be the real property 425
special tax rates to be applied during that real property tax year. 426
(h) Real property special taxes shall be collected in the same manner as other District real 427
property taxes and the Mayor shall promptly deposit in the Special Tax Funds all real property 428
special taxes collected, including collection through a collection agent and deposit under an 429
Escrow Agreement. If the law of the District relating to the levy or collection of real property 430
taxes or the calculation or establishment of real property tax rates is changed in a manner that 431
renders any of the provisions of subsections (e) through (h) of this section incapable of 432
performance in accordance with their respective terms, the Mayor and the Council shall take 433
actions that result in the collection of real property special taxes, in the same manner as other 434
District real property taxes, in the amounts required by this section. 435
(i) The District and the Mayor reserve the right to satisfy all or a portion of the special tax 436
pledge requirements by setting aside and depositing into the Special Tax Funds, equally and ratably, 437
at any time any funds of the District not otherwise legally committed, which shall irrevocably 438
dedicate and pledge those deposits to the payment of principal of, and interest on, the bonds and 439
Additional Bonds or notes and any Additional Notes then outstanding. To the extent that all or a 440
portion of the special tax requirement or revenue pledge requirement is satisfied by those deposits, 441
an equal amount of real property special tax revenue or special tax for notes revenue subsequently 442
collected shall be released from the lien on and the security interest in the special tax revenue or the 443
special tax for notes revenue created under this section and shall be paid to reimburse the General 444
Fund of the District of Columbia or other fund of the District of Columbia from which the other 445
funds were received, and any other funds so deposited in lieu of a portion of the special tax revenues 446
or pledged property tax revenues shall be subject to the pledge and security interest under this act as 447 20
if they were special tax revenues or special tax for notes pledged revenues pursuant to section 467 of 448
the Home Rule Act. 449
(j) The Mayor shall provide for the payment of the principal of, and interest on, the bonds 450
or notes, as it may become due and payable for any reason, by transferring funds on deposit in the 451
Special Tax Funds, respectively, to the Paying Agent to the extent required pursuant to the bond or 452
Additional Bond issuance certificate or note or Additional Note issuance certificate provided for in 453
section 7. 454
Sec. 10. Issuance of bonds to pay notes when due. 455
(a) The District shall issue the bonds or, to the extent permitted by the Home Rule Act, 456
renewal notes to provide for the payment of the principal of the notes, as they may become due and 457
payable. 458
(b) The par value to be received from the sale of any bonds issued to refund the notes or any 459
renewal notes shall, to the extent necessary, be used to pay the principal of, and interest on, the 460
notes when due and are pledged to that purpose. 461
Sec. 11. General covenants. 462
(a) The following covenants are made by the District in connection with the 463
authorization and issuance of the bonds: 464
(1) Pursuant to section 603(c) of the Home Rule Act, the Council shall not approve 465
any budget that would result in expenditures being made by the District during any fiscal year in 466
excess of all resources that the Mayor estimates will be available from all funds available to the 467
District for that fiscal year, except as permitted by applicable law. The Mayor shall not forward to 468
the President for submission to Congress a budget that is not balanced according to the provisions 469
of section 603(c) of the Home Rule Act, except as permitted by applicable law. 470 21
(2) The District shall prepare its annual financial statements in accordance with 471
generally accepted accounting principles for state and local governments and cause its annual 472
financial statements to be audited by an independent accountant. 473
(3) The District shall not issue any general obligation bonds or general 474
obligation bond anticipation notes, other than bonds or renewal notes to refund any Outstanding 475
Debt, or incur any indebtedness to the Treasury of the United States for capital projects in an 476
amount that would cause the amount of debt service payable in any fiscal year on all the 477
indebtedness, including all outstanding bonds and loans, to exceed any limitations set forth in the 478
Home Rule Act or the borrowing limitation set forth in D. C. Official Code § 47-335.02 at the 479
time the additional bonds or indebtedness are issued or incurred. For purposes of the limitation 480
imposed by this section, and as required by section 475(b) of the Home Rule Act, the Council 481
hereby determines that the estimated maximum annual debt service amount for the bonds 482
anticipated by the notes is $30 million. 483
(4) Subject to applicable law, the District shall maintain a capital projects fund, 484
separate from other funds of the District, into which it will deposit the proceeds of any bonds or 485
notes, other than bonds or notes issued to refund Outstanding Debt, less any capitalized interest 486
and accrued interest, and shall expend the proceeds only to finance capital projects and incidental 487
costs as defined in section 103(8) of the Home Rule Act. Subject to applicable law, the proceeds 488
of the bonds or notes may be escrowed in appropriate accounts with escrow agents or a trustee for 489
the bonds or notes to be applied to the applicable purposes. Interest or other investment earnings 490
of proceeds in the capital projects fund shall be credited to the General Fund of the District of 491
Columbia, subject to provisions for any deposit requirements to a rebate fund or other funds in 492
accordance with agreements pertaining to the bonds or notes. 493 22
(b) The Mayor or an Authorized Delegate may, through a trust agreement or other 494
instrument, make additional covenants of the District and agree to other provisions to better secure, 495
administer funds for, and protect the bonds or notes and the owners thereof. 496
Sec. 12. Events of default. 497
(a) Each of the following events constitutes an event of default: 498
(1) Failure to pay the principal of the bonds or notes, as the case may be, when 499
the principal becomes due and payable at maturity, upon redemption, or otherwise; 500
(2) Failure to pay an installment of interest on the bonds or notes, as the case 501
may be, upon the day when the interest becomes due; and 502
(3) Failure by the District to observe and perform any covenant, condition, 503
agreement, or provision, other than as specified in paragraphs (1) and (2) of this subsection, 504
contained in the bonds or notes, as the case may be, or in this act, but only if the failure 505
continues for a period of 90 days after transmittal to the District of written notice of failure. 506
(b) A bond or note owner who claims an event of default under subsection (a)(3) of this 507
section shall provide to the registrar written notice specifying the failure and requesting that it be 508
remedied. Upon verifying that the written notice has been transmitted by a bona fide bond or note 509
owner, the registrar, if other than the District, shall transmit the written notice to the District. If 510
the registrar is the District, the written notice shall be delivered directly to the Mayor. Transmittal 511
to the District of the written notice required by subsection (a)(3) of this section shall not be 512
accomplished in any manner other than that set forth in this subsection. If there is a trust 513
agreement or Escrow Agreement for the bonds or notes, the notice by bond or note owners and 514
notice to the District shall be given by and to the persons designated in or pursuant to such 515
agreement. 516 23
Sec. 13. Remedies. 517
(a) Upon the occurrence and continuance of any event of default, any bond or note 518
owner may: 519
(1) By mandamus or other suit, action, or proceeding at law or in equity, enforce 520
all rights of the bond or note owner and require the District to carry out any agreements with or for 521
the benefit of the bond or note owner and to perform its duties under this act; 522
(2) Bring suit upon the bonds or notes, as the case may be; and 523
(3) By action or suit at law or in equity, enjoin any acts that may be unlawful or in 524
violation of the rights of the bond or note owner. 525
(b) If any proceeding initiated by any bond or note owner to enforce any right under this 526
act is discontinued or abandoned for any reason, the District and the bond or note owner shall be 527
restored to their former positions and rights, and all rights, remedies, and powers of each of the 528
parties shall continue as though the proceeding had not been initiated. 529
(c) Subject to the provisions of the Home Rule Act, if there is a trust agreement or 530
Escrow Agreement for the bonds or notes, actions under this act or such agreement, or on the 531
bonds or notes, as the case may be, shall be subject to applicable provisions in the agreement, 532
notwithstanding other provisions in this act. 533
Sec. 14. District officials. 534
(a) The elected and appointed officials, officers, employees, or agents of the District shall 535
not be liable personally for the payment of the bonds or notes or be subject to any personal 536
liability by reason of the issuance of the bonds or notes. 537
(b) The signature, countersignature, facsimile signature, or facsimile countersignature on 538
the bonds or notes shall be valid and sufficient for all purposes, notwithstanding the fact that the 539 24
official ceases to be that official before delivery of the bonds or notes. 540
Sec. 15. Defeasance of bonds and notes. 541
(a) The bonds or notes, as the case may be, shall be legally defeased and no longer be 542
considered outstanding and unpaid for the purpose of this act, and the requirements of this act 543
shall be discharged with respect to the bonds or the notes if the Mayor or an Authorized 544
Delegate: 545
(1) Deposits with an escrow agent, which shall be a bank, trust company, or 546
national banking association with requisite trust powers, in a separate defeasance escrow 547
account, established and maintained by the escrow agent solely at the expense of the 548
District and held in trust for the bond owners, sufficient moneys or direct obligations of the 549
United States, the principal of, and interest on, which, when due and payable, will provide 550
sufficient moneys to pay when due the principal of, and interest on, the bonds or notes to be 551
defeased; and 552
(2) Delivers to the defeasance escrow agent an irrevocable letter of instruction to 553
apply the moneys or investments to the payment of the principal of and interest on, the bonds or 554
notes to be defeased as they become due and payable. 555
(b) The defeasance escrow agent shall not invest the defeasance escrow account in any 556
investment callable at the option of its issuer if the call could result in less than sufficient moneys 557
being available for the purposes required by this section. 558
(c) The defeasance escrow account specified in subsection (a) of this section may be 559
established and maintained without regard to any District limitations placed on these accounts by 560
any law, except for this act. 561
(d) References in this section to "amounts due and payable" include, but are not limited to, 562 25
amounts due and payable by reason of optional or mandatory redemption. 563
Sec. 16. Additional debt and other obligations. 564
Subject to the terms of any trust agreement or Escrow Agreement pertaining to the bonds or 565
notes, the District reserves the right at any time to borrow money or enter into other 566
obligations to the full extent permitted by law, to secure the borrowings or obligations by the pledge 567
of its full faith and credit, to secure the borrowings or other obligations by any other security and 568
pledges of funds as may be authorized by law, and to issue bonds, including Additional Bonds, 569
notes, including Additional Notes, or other instruments, to evidence the borrowings or obligations. 570
Any act of the Council authorizing the issuance of Additional Bonds or Additional Notes shall 571
provide for an increase in the special tax requirements sufficient to pay principal of, and interest on, 572
the Additional Bonds or Additional Notes. 573
Sec. 17. Tax status. 574
If and to the extent the bonds or notes are issued on a tax-exempt basis, the Mayor or an 575
Authorized Delegate shall not (1) take any action or omit to take any action, or (2) invest, reinvest, 576
or accumulate any moneys in a manner, that will cause the interest on the bonds or notes, as the 577
case may be, to be includable in gross income for federal income tax purposes or to be treated as 578
an item of tax preference for purposes of the federal alternative minimum tax. The Mayor or an 579
Authorized Delegate shall also take all actions necessary to be taken, including to make any rebate 580
payment, if any, when due, so that the interest on the bonds or notes will not be includable in gross 581
income for federal income tax purposes or be treated as an item of tax preference for purposes of 582
the federal alternative minimum tax. 583
Sec. 18. Contract. 584
This act shall constitute a contract between the District and the owners of the bonds and 585 26
notes. To the extent that any acts or resolutions of the Council may be in conflict with this act, this 586
act shall be controlling with respect to bonds and notes. 587
Sec. 19. Authorized delegation of authority. 588
To the extent permitted by District and federal laws, the Mayor may delegate to any 589
authorized delegate the performance of any act authorized to be performed by the Mayor under this 590
act. 591
Sec. 20. Maintenance of documents. 592
Copies of the specimen bonds and notes and related documents shall be filed in the 593
Office of the Secretary of the District of Columbia. 594
See. 21. Information reporting. 595
(a) Within 3 days after the Mayor's receipt of the transcript of proceedings relating to 596
the issuance of any series of the bonds or notes, the Mayor shall transmit a copy of the transcript to 597
the Secretary to the Council. 598
(b) The Mayor shall notify the Council, within 30 days, if any funds or accounts of 599
the District not otherwise legally committed have been used for the payment of principal of 600
and interest on the bonds pursuant to section 8(c). 601
(c)(1) The Mayor's letter of transmittal accompanying the submission of any proposed 602
resolution to approve the issuance of bonds or notes pursuant to this act shall include a statement 603
as to: 604
(A) Whether the bonds or notes of any series are intended to be sold by 605
competitive bid or by negotiated sale and, if bonds of any series are intended to be sold by 606
negotiated sale, a copy of the Mayor's written determination that sale by competitive bid is not 607
feasible or is not in the best interests of the District and a statement of the reasons supporting 608 27
this determination; and 609
(B) Whether the bonds or notes of any series are intended to be issued on a 610
tax-exempt or taxable basis. 611
(d)(1) No portion of the proceeds of the sale of bonds or notes shall be used to 612
compensate a District employee unless the employee actually performs duties related to the 613
projects financed by this act, as provided in section 5(e). 614
(2) Within 30 days after the effective date of this act, and before any bonds or 615
notes are issued pursuant to this act, the Mayor shall submit to the Council a list of all 616
District employees who are compensated, in whole or part, by capital improvement funds. 617
(e) With respect to a negotiated sale of bonds or notes, the underwriters shall provide 618
written notification to the District of the following circumstances: 619
(1) Any relationship, during the prior 2 years, with elected or appointed District 620
officials, or the District's bond counsel or financial advisor, which could create a conflict of 621
interest or apparent conflict of interest with the duties performed, or to be performed, by such 622
underwriters or other advisors for the District; 623
(2) Any arrangement, during the prior 2 years, to share fees with other 624
underwriters, firms, or individuals in connection with the provision of services to the District by 625
either entity; and 626
(3) Any public finance transaction for any other issuer where the underwriter, or 627
prospective underwriter, is serving, or has served in the prior 2 years, as financial advisor in any 628
transaction where the District's financial advisor was, or is, an underwriter. 629
Sec. 22. Period of Limitations. 630
At the end of the 20-day period beginning on the date of the first publication pursuant to 631 28
the notice in section 463(a) of the Home Rule Act that an act authorizing the issuance of the 632
bonds has taken effect: 633
(1) Any recital or statement of fact contained in such act or in the preamble or title of 634
this act shall be deemed to be true for the purpose of determining the validity of any bonds 635
authorized by this act, and the District and all others interested shall be estopped from denying 636
any such recital or statement of fact; and 637
(2) This act, and all proceedings in connection with the authorization of the issuance 638
of bonds authorized by this act, shall be deemed to have been duly and regularly taken, passed, 639
and done by the District, in compliance with the Home Rule Act and all other applicable laws, for 640
the purpose of determining the validity of this act and the proceeding in connection with the 641
authorization and issuance of bonds authorized by this act; and no court shall have jurisdiction in 642
any suit, action, or proceeding commenced before the end of such 20-day period. 643
Sec 23. Severability. 644
As provided in the General Rule of Severability Adoption Act of 1983, effective March 645
14, 1984 (D.C. Law 5-56; D.C. Official Code § 45-201), if any provision of this act or the 646
application of this act to any person or circumstance is held to be unconstitutional or beyond the 647
statutory authority of the Council, or otherwise invalid, the invalidity shall not affect other 648
provisions or applications of the act that can be given effect without the invalid provision or 649
application, and to this end the provisions of this act are declared to be severable. 650
Sec. 24. Fiscal impact statement. 651
The Council adopts the fiscal impact statement of the Chief Financial Officer as the 652
fiscal impact statement required by section 4a of the General Legislative Procedures Act of 653
1975, approved October 16, 2006 (120 Stat. 2038; D.C. Official Code § 1-301.47a). 654 29
Sec. 25. Effective date. 655
(a) This act shall take effect following approval by the Mayor (or in the event of veto by the 656
Mayor, action by the Council to override the veto), a 30-day period of Congressional review as 657
provided in section 602(c)(1) of the District of Columbia Home Rule Act, approved December 658
24, 1973 (87 Stat. 813; D.C. Official Code § 1-206.02(c)(1)), and publication in the District of 659
Columbia Register. 660
(b) This act shall expire after 225 days of its having taken effect. 661