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AN ACT
____________
IN THE COUNCIL OF THE DISTRICT OF COLUMBIA
__________________
To authorize, on a temporary basis, the issuance of general obligation bonds and general
obligation bond anticipation notes of the District of Columbia for the purposes of
financing certain capital projects and the refunding of certain capital indebtedness of the
District of Columbia during fiscal years 2023 through 202 8.
BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this act
may be cited as the "General Obligation Bonds and Bond Anticipation Notes for Fiscal Years 20 23-
2028 Authorization Temporary Act of 2023".
Sec. 2. Definitions.
For the purposes of this act, the term:
(1) "Additional Bonds" means District general obligation bonds that may be
issued pursuant to section 461 of the Home Rule Act and any act enacted subsequent to this act on
a parity with the bonds.
(2) "Additional Notes" means District general obligation bond anticipation notes
that may be issued pursuant to section 475 of the Home Rule Act and any act enacted subsequent to
this act on a parity with the notes.
(3) "Authorized Delegate"' means any officer or employee of the executive office of
the Mayor to whom the Mayor has delegated any of the Mayor's functions under this act pursuant to
section 422(6) of the Home Rule Act, including, but not limited to, the Chief Financial Officer, the
City Administrator, and the Treasurer of the District of Columbia.
(4) "Bond Counsel" means a firm or firms of attorneys designated as bond
counsel or co-bond counsel from time to time by the Mayor or an Authorized Delegate.
(5) "Bonds" means District general obligation bonds authorized to be issued
pursuant to this act, including any refunding bonds.
(6) "Capital Projects" means the District capital projects as defined in section
103(8) of the Home Rule Act.
(7) "Deposit and Investment Act" means the Financial Institution s Deposit and
Investment Amendment Act of 1997, effective March 18, 1998 (D.C. Law 12-56; D.C. Official
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Code § 47- 351.01 et seq.).
(8) "Escrow Agreement" means any agreement heretofore or hereafter entered into
by the Mayor or an Authorized Delegate to provide for the custody, investment, and disbursement
of revenues and funds pledged to, and in which a security interest is created for, the payment of
the principal of, and interest on, the bonds or notes.
(9) "Hedge Agreement" means any financial arrangement that is a cap, floor, or
collar; forward rate; future rate; swap, which swap may be based on an amount equal to either a
principal amount or a notional principal amount relating to all or a portion of the principal
amount of a series of bonds; asset, index, price, or market-linked transaction or agreement; other
interest rate exchange or rate protection transaction agreement; other similar transactions,
however designated; any combination thereof; any option with respect thereto; or any similar
arrangement, which is executed by the District for purposes of debt management, including
managing interest rate fluctuations on bonds, but not for purposes of speculation.
(10) "Home Rule Act" means the District of Columbia Home Rule Act, approved
December 24, 1973 (87 Stat. 774; D.C. Official Code § 1- 201.01
et seq.).
(11) "Notes" means District general obligation bond anticipation notes
authorized to be issued pursuant to this act, including any renewals of such notes.
(12) "Outstanding Debt" means the outstanding indebtedness at any time of the
District for capital project loans from the Treasury of the United States, any Treasury Advances,
any outstanding general obligation bonds issued pursuant to this or any prior act, any outstanding
general obligation bond anticipation notes issued pursuant to this or any prior act, and any
income tax secured revenue bonds issued pursuant to the Income Tax Secured Bond
Authorization Act of 2008, effective October 22, 2008 (D.C. Law 17- 254, D.C. Official Code
§ 47-340.26 et seq .).
(13) "Paying Agent" means the District or any bank, trust company, or national
banking association designated to serve in this capacity by the Mayor or an Authorized Delegate
pursuant to section 6.
(14) "Procurement Act" means the District of Columbia Procurement Practices
Reform Act of 2010 , effective April 8, 2011 (D.C. Law 18-371; D.C. Official Code § 2-351.01
et
seq.).
(15) "Registrar" means the District or any bank, trust company, or national
banking association designated to serve in this capacity by the Mayor or an Authorized
Delegate pursuant to section 6.
(16) "Secretary" means the Secretary of the District of Columbia.
(17) "Special Tax Fund" means the debt service fund established pursuant to
section 9(a)(1).
(18) “Special Tax Funds” means the debt service funds established pursuant to
section 9(a)(1) and (2).
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(19) “Special Tax Fund for Notes” means the debt service fund established
pursuant to section 9(a)(2).
(20) "Treasury Advances" means amounts advanced to the District from the
United States Treasury pursuant to Chapter 34 of Title 47 of the District of Columbia Official
Code.
(21)
Sec. 3. Findings.
The Council finds that:
(1) Section 461 of the Home Rule Act authorizes the District to incur indebtedness
by issuing general obligation bonds to refund Outstanding Debt of the District and to provide for
the payment of the cost of acquiring or undertaking its various capital projects.
(2) Section 475 of the Home Rule Act authorizes the District to incur indebtedness
by issuing general obligation bond anticipation notes, the proceeds of which shall be used for the
purposes for which general obligation bonds may be issued under section 461 of the Home Rule
Act.
(3) The cost of Outstanding Debt may be reduced by refunding a portion of it
through the issuance of the bonds, and the District's cost of borrowing may be reduced by the
issuance from time to time of notes in anticipation of the issuance of bonds.
(4) The issuance of the bonds and the notes in anticipation of the bonds is an
economical method of financing the costs of acquiring or undertaking the capital projects
described in section 5 and of refunding all or a portion of certain Outstanding Debt as is in the
public interest.
(5) To fund the capital needs of the District for fiscal years 2023 through 2028, it
will be necessary to issue bonds from time to time in one or more series in an aggregate principal
amount not to exceed $6,400,000,000 and to issue notes from time to time in one or more series
in anticipation of all or a portion of the bonds.
Sec. 4. Bond and note authorization.
(a) The District is authorized to incur indebtedness by issuing the bonds pursuant to
sections 461 through 467 of the Home Rule Act to provide for any of the following:
(1) The payment of the cost of acquiring, undertaking, or refinancing capital
projects described in section 5 for general governmental and enterprise purposes;
(2) The reimbursing of amounts temporarily advanced for the purposes authorized
by this act from the General Fund of the District of Columbia, any enterprise fund, or other fund or
account of the District;
(3) The refunding of Outstanding Debt; and
(4) The payment of the costs and expenses of preparation, execution, issuance, sale
or delivery of, or security for, the bonds and notes, including the payments of contracts or
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agreements the Mayor or an Authorized Delegate may determine to be necessary and appropriate
as described in section 7(f), and the payment of other debt program related costs as provided in
the contracts or agreements related thereto.
(b) The Mayor or a n Authorized Delegate is authorized to pay from the proceeds of the
bonds and other District funds, the costs and expenses referred to in subsection (a)(4) of this
section and to the extent necessary to establish or continue the tax exempt status of any of the
bonds issued on a tax exempt basis.
(c) The District is authorized pursuant to section 475 of the Home Rule Act to issue the
notes in anticipation of the issuance of general obligation bonds and to expend the proceeds of
the notes for any of the purposes for which bonds may be issued.
Sec. 5. Capital projects.
(a)(1) Bonds and notes may be issued from time to time to provide for the payment of
the cost of acquiring, undertaking, or refinancing capital projects of the District and
reimbursement of amounts advanced for such purposes, including, but not limited to, capital
projects for the following categories of facilities and equipment by project and project
description:
(A) Physical plant;
(B) Technology;
(C) Mass transportation;
(D) Roads and bridges;
(E) Housing and economic development;
(F) Environmental protection;
(G) Major equipment; and
(H) Recreation.
(2) The Council shall specify and determine from time to time, by resolution, the
capital projects for which the issuance of bonds shall be authorized.
(b) The maximum principal amount of indebtedness that may be incurred through the
issuance of bonds or notes for the capital projects, exclusive of the costs and expenses of issuing
and delivering the bonds or notes and any other costs referred to in section 4(a)(4), which may
be funded with proceeds of the bonds or notes, shall not exceed $ 6,400,000,000;
provided, that the principal amount of any notes or bonds issued to refund prior notes or bonds
issued for any capital project shall not be included in the determination of the principal amount of
indebtedness issued for such project, and provided that the aggregate amount of any refunded notes
or additional notes refinanced with bonds or additional bonds shall be returned to the maximum
principal amount of indebtedness for use in future issuance s.
(c) The maximum total principal amount to be financed through the bonds and notes
provided for the capital projects listed in subsection (a)(1) of this section shall include amounts
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requested by the District government and approved by Congress in the District's Fiscal Year
2023-2028 Capital Improvements Plan or other capital projects approved by the Council, as it
may be modified from time to time by appropriations legislation, or by the Council .
(d) The costs of the capital projects approved for financing pursuant to this act and prior
bond acts that have become law, which are paid originally from the General Fund of the District of
Columbia or General Capital Improvements Fund of the District of Columbia, are reasonably
expected to be reimbursed in whole or in part with the proceeds of the bonds or notes in the
maximum amount set forth in subsection (b) of this section. The adoption of this act by the
Council declares the intent of the District under Treas. Reg. § 1.150- 2, issued under the Internal
Revenue Code of 1986, approved October 22, 1986 (100 Stat. 2085; 26 U.S.C. § 1 et seq.), to
reimburse the General Fund of the District of Columbia and General Capital Improvement Fund of
the District of Columbia or to refinance Treasury Advances or loans from the Treasury of the
United States for capital projects, in either case, with the proceeds of the bonds and notes.
(e) Funds pursuant to this act shall not be used to pay for personnel of the District,
except in positions working on authorized capital projects that create assets or extend the useful
life of the assets.
Sec. 6. Bond and note details.
(a) The Mayor or an Authorized D elegate is authorized to take any action necessary or
appropriate in accordance with this act in connection with the preparation, execution, issuance,
sale, delivery, security for, and payment of the bonds and notes, including, but not limited to,
determinations of:
(1) Whether the bonds or notes are to be issued in one or more series and the
principal amount of each series;
(2) For each series of the bonds or notes, the date of issuance, sale, and delivery of
the bonds or notes, the maturity date or dates of the bonds (provided that the maximum maturity of
any bond shall not exceed 30 years from the date of issuance) or notes (provided that the maximum
maturity date
of any note, including any renewal note issued to refund such note, shall not be later
than the last day of the 3rd
fiscal year following the fiscal year during which such note was
originally issued), the dates for payment of principal and interest on the bonds or notes, and the
amount of each installment or sinking fund payment of principal (provided that the principal
installments on each series of the bonds shall begin no later than 3 years from the date of issuance
of the series);
(3) The rate or rates of interest or the method for determining the rate or rates of
interest on each series of the bonds and notes; provided, that the interest rate or rates borne by
the bonds of any series with fixed interest rates shall not exceed 15% per year ( calculated on the
basis of a 360-day year consisting of twelve 30-day months) in any event and that the interest rate
or rates borne by the bonds of any series with non- fixed interest rates shall not exceed 15% per
year (calculated on the basis of the actual number of days elapsed over a year of 365 or 366 days
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and based on the total amount of interest paid in any fiscal year), and the interest rate or rates borne
by the notes of any series shall not exceed in the aggregate 10% per year ( calculated on the basis of
a 360-day year consisting of twelve 30-day months or on the basis of the actual number of days
elapsed over a year of 365 or 366 days), as determined by the Mayor or the Authorized Delegate;
provided further, that if the notes are not paid at maturity, the notes may provide for an interest rate
or rates after maturity not to exceed in the aggregate 15% per year ( calculated on the basis of a 360-
day year consisting of twelve 30-day months or on the basis of the actual number of days elapsed
over a year of 365 or 366 days), as determined by the Mayor or the Authorized Delegate;
(4) For each series of the bonds or notes, the maximum debt service payable in
any fiscal year in accordance with the amount permitted under section 11(a)(3);
(5) The designation of any series of the bonds or notes and their denominations,
lettering, and numbering or the manner of determining the designations and denominations,
lettering, and numbering;
(6) The price and terms under which any series of the bonds or notes may be
paid, optionally or mandatorily redeemed, accelerated, tendered, called, or put for redemption,
repurchase, or remarketing before their stated maturities;
(7) The final form, content, and terms of each series of the bonds and notes,
including a determination that any series of the bonds or notes may be issued in book- entry
form;
(8) The designation of a registrar, if other than the District, for any series of the
bonds or notes and the execution and delivery of any necessary agreements relating to the
appointment;
(9) The designation of a Paying Agent for any series of the bonds or notes and the
execution and delivery of any necessary agreements relating to the appointment;
(10) Provisions for the registration, transfer, and exchange of the bonds or notes and
the replacement of mutilated, lost, stolen, or destroyed bonds or notes; and
(11) Provisions for the security of holders of the bonds or notes, including, but not
limited to, bond insurance or other credit enhancement .
(b) The bonds and notes shall be executed in the name of the District and on its behalf by
the manual signature
of the Mayor or an Authorized Delegate. To the extent required by the
Home Rule Act, the official seal of the District or a facsimile of it shall be impressed, printed, or
otherwise reproduced on
the bonds and notes.
(c) The registrar shall manually authenticate each bond or note and maintain the books of
registration for the payment of the principal of, and interest on, the bonds or notes and perform
other ministerial responsibilities as specifically provided in its appointment as registrar, and the
securities depository, if the bonds or notes are issued in book-entry form, shall maintain or cause to
be maintained books of registration of owners of beneficial interests in the bonds or notes.
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Sec. 7. Sale of the bonds and notes.
(a) The bonds of any series may be sold by the Mayor or an Authorized Delegate at a
public sale upon receipt of sealed proposals (including electronic bids), or at a private sale on a
negotiated basis in a manner as the Mayor or an Authorized Delegate may determine to be in the
public interest, all pursuant to and in accordance with section 466 of the Home Rule Act . The
notes of any series may be sold by the Mayor or an Authorized Delegate by competitive bid or
negotiated sale as may be determined by the Mayor or an Authorized Delegate to be in the best
interest of the District.
(b) The Mayor or an Authorized Delegate may prepare, or cause to be prepared, and may
execute, for each sale of the bonds or notes, offering documents on behalf of the District and may
authorize the distribution of the offering documents for the bonds or notes.
(c) The Mayor or an Authorized Delegate shall take actions and execute and deliver
agreements, documents, and instruments (including any amendment of or supplement to any
such agreement, document, or instrument) as required by or incidental to:
(1) The issuance of the bonds or notes;
(2) If and to the extent the bonds or notes are issued on a tax- exempt basis, the
'
exclusion from gross income for federal income tax purposes of interest on the bonds or notes, the
treatment of interest on the bonds or notes as not an item of tax preference for purposes of the
federal alternative minimum tax, and the exemption from District taxation of interest on the
bonds or notes;
(3) The performance of any covenants contained in this act or any purchase
contract for the bonds or notes; and
(4) The execution, delivery, and performance of any financing documents in
connection with the sale of the bonds or notes, including but not limited to, any Escrow
Agreement, trust agreement, bond or note purchase agreement, or paying agent agreement.
(d) The bonds or notes shall not be issued until the Mayor or an Authorized Delegate
receives an approving opinion from Bond Counsel as to the validity of the bonds or notes and, if
and to the extent the bonds or notes are issued on a tax- exempt basis, the treatment of the interest
on the bonds or notes for purposes
of federal and District income taxation.
(e) The Mayor shall execute a bond issuance certificate or note issuance certificate, as the
case may be, evidencing the determinations made and other actions taken by the Mayor for each
series of the bonds or notes issued and shall designate in such certificate the amount of the bonds
or notes
to be used to finance capital projects or to refund or refinance Outstanding Debt, the
amount of principal and interest on that amount of bonds or notes to be paid through sinking fund
payments, redemptions, or otherwise, in each fiscal year, the date of the bonds or notes, the series
designation, the authorized denominations, the Paying Agent or Agents, and any other matters
pertaining to the bonds or notes, including any matters applicable under section 6(a). A copy of the
bond issuance certificate or note issuance certificate, as the case may be, shall be filed with the
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Secretary to the Council not more than 3 days after the delivery of the bonds or notes covered by
the certificate. Any bond issuance certificate or note issuance certificate shall be conclusive
evidence of the actions or determinations taken or made as stated in the certificate.
(f) The Procurement Act and the Deposit and Investment Act shall not apply to whatever
contract the Mayor or an Authorized Delegate may from time to time enter into for purposes of
this act or the Mayor or an Authorized Delegate may determine to be necessary or appropriate for
purposes of this act to place, in whole or in part , including, but not limited to:
(1) An investment or obligation of the District as represented by the bonds or
notes;
(2) A contract or contracts for bond insurance or other credit enhancement
(including, but not limited to, a letter or line of credits), or liquidity agreements, or
placement of any investment or obligation or program of investment including any offering
document, contract based on interest rate, currency, cash flow, or other basis, including,
without limitation, interest rate swap agreements; currency swap agreements; insurance agreements;
forward payment conversion agreements; futures contracts providing for payments based on levels
of, or changes in, interest rates, currency exchange rates, or stock or other indices; contracts to
exchange cash flows or a series of payments; and contracts to hedge payment, currency, rate,
spread, or similar exposure, including, without limitation, interest rate floors, or caps, options,
puts, and calls, Hedge Agreements, and any required supplements to any such documents.
The contracts or other arrangements may also be entered into by the District in connection with, or
incidental to, entering into or maintaining any agreement that secures the bonds or notes. The
contracts or other arrangements entered into pursuant to this section shall contai n whatever payment
security, terms, and conditions as the Mayor or an Authorized Delegate may consider appropriate
and shall be entered into with whatever party or parties the Mayor or an Authorized Delegate may
select, after giving due consideration, where applicable, to the creditworthiness of the counterparty
or counterparties, including any rating by a nationally recognized rating agency or any other
criteria as may be appropriate.
(3) A contract or contracts for an escrow agent, paying agent, disclosure agent,
trustee, collection agent, registrar, underwriting, legal services, accounting, financial advisory
services, rating agency services, printing, and any other contracts for services of professionals or
advisors or for disclosure services as the Mayor or an Authorized Delegate may deem to be
necessary or appropriate.
Sec. 8. Payment and security of the bonds and notes.
(a) The full faith and credit of the District is pledged for the payment of the principal of,
and interest on, the bonds and notes as they become due and payable through required sinking fund
payments, redemptions, or otherwise.
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(b) The Council shall, in the full exercise of the authority granted in section 483 of the
Home Rule Act and under any other law, provide in each annual budget for a fiscal year of the
District sufficient funds to pay the principal of, and interest on, the bonds and notes becoming
due and payable for any reason during that fiscal year.
(c) The Mayor shall, in the full exercise of the authority granted to the Mayor under the
Home Rule Act and under any other law, take such actions as may be necessary or appropriate to
ensure that the principal of, and interest on, the bonds and notes are paid when due for any reason,
including the payment of principal and interest from any funds or accounts of the District not
otherwise legally committed.
(d) The bonds and notes shall evidence continuing obligations of the District until paid in
accordance with their terms.
(e) Any Paying Agent shall pay the principal of, and interest on, the bonds and notes
and may perform other ministerial responsibilities as specifically provided in its appointment as
paying agent.
(f) Proceeds of the bonds or notes and any money set aside for any security for the bonds
or notes or any contract or other arrangement entered into pursuant to this section , may be pledged to
and used to service any contract or other arrangement providing for payment of principal of and
interest on the bonds or notes .
Sec. 9. Special tax; establishment of rates; collection.
(a) (1) The Council determines that a special tax is necessary in conjunction with the
authorization and issuance of the bonds and any Additional Bonds. Pursuant to section 481 of the
Home Rule Act and notwithstanding the provisions of Chapter 5 of Title 47 of the District of
Columbia Official Code, there is levied, for each real property tax year in which bonds or
Additional Bonds are outstanding, a special tax on the real property in the District subject to
taxation, in amounts that will be sufficient to pay the principal of, and interest on, the bonds and
Additional Bonds coming due in each year. This special tax is levied, without limitation as to rate
or amount, on all classes of real property subject to taxation in the District. The special tax shall be
collected and apportioned among classes of real property in the same manner as other District real
property
taxes and, when collected, shall be set aside in a Special Tax Fu nd maintained separate
from other funds of the District. The collection and custody of the s pecial tax payment may be
pursuant to an agreement with an agent for such purposes and the Special Tax Fund may be
maintained under an Escrow Agreement. When deposited, the funds in the fund and all investment
income or earnings on these funds shall be irrevocably dedicated and pledged to the payment of
principal, and interest on, the bonds and any Additional Bonds. Any Escrow Agreement providing
for holding funds for the benefit of the holders of the bonds shall be maintained so long as any of
the bonds is outstanding under this act.
(2) In addition to the special tax levied pursuant to paragraph (1) of this subsection, the
Council determines that a separate tax levy is necessary in conjunction with the authorization and
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issuance of notes and any Additional Notes. Pursuant to section 467(a) of the Home Rule Act, and
notwithstanding the provisions of Chapter 5 of Title 47 of the District of Columbia Official Code,
there is levied, for each real property tax year in which notes or Additional Notes are outstanding, a
special tax for notes on the real property in the District subject to taxation, which shall be separate
and distinct from the collection and pledge of the special tax in paragraph (1) of this subsection, in
amounts that will be sufficient to pay the principal of, and interest on, the notes and Additional Notes
coming due in each year. This special tax for notes is levied, without limitation as to rate or amount,
on all classes of real property subject to taxation in the District. The special tax for notes shall be
collected and apportioned among classes of real property in the same manner as other District real
property taxes and, when collected, shall be set aside in a Special Tax Fund for Notes maintained
separate from other funds of the District, including the Special Tax Fund maintained under paragraph
(1) of this subsection. The collection and custody of the revenue pledge payment may be pursuant to
an agreement with an agent for such purposes and the Special Tax Fund for Notes may be
maintained under an Escrow Agreement. When deposited, the revenues in the fund and all
investment income or earnings on these funds shall be irrevocably dedicated and pledged to the
payment of principal, and interest on, the notes and any Additional Notes. Any Escrow Agreement
providing for holding funds for the benefit of the holders of the notes or Additional Notes shall be
maintained so long as any of the notes or Additional Notes is outstanding under this act.
(3) The special taxes authorized pursuant to subsection (a)(1) and (2) of this section
shall be levied and collected ratably and on a parity with each other, and in the event there are
insufficient collections of real property taxes, the amounts collected shall be allocated to each of
the Special Tax Funds in proportion of the amounts of bonds and Additional Bonds and notes and
Additional Notes outstanding.
(b) The District irrevocably pledges for and on behalf of the owners of the bonds or notes
as further security for the due and punctual payment of the principal and redemption price, if any,
of, and interest on, the bonds or notes as they shall become due and payable for any reason, all of
its right, title, and interest now owned or later acquired in and to the revenue from the applicable
special taxes levied by this section, whether to be received, or held at the time, by a collection
agent, custodian, or escrow agent for the District, or by District officials. This pledge creates and
grants a parity security interest, which is created and perfected as contemplated in section 467 of
the Home Rule Act, subject to the terms, conditions, and limitations in this act, including the
provisions of subsections (e) and (i) of this section and the provisions setting forth conditions and
limitations applicable to the issuance of Additional Bonds or Additional Notes secured, equally
and ratably with the bonds or notes, respectively by a pledge of and security interest in the special
tax revenue or special tax for notes revenue.
(c) The security interest s created in the revenues from the special tax es levied by this
section shall be valid, binding, and perfected from the time of the delivery of the first bonds or
notes with or without the physical delivery or allocation of any special tax revenue or special tax
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for notes revenue and with or without any further action. The security interest shall be valid,
binding, and perfected whether or not any statement, document, or instrument relating to the
security interest is recorded or filed. The pledge and lien created by the security interest shall be
valid, binding, and perfected with respect to any individual or legal entity having claims against
the District, whether or not the individual or legal entity has notice of the pledge and lien.
(d) If the District pays or, pursuant to section 15, makes provisions to pay to the owners of
all bonds and Additional Bonds or notes and Additional Notes the principal or redemption price,
if any, and the interest due or to become due, at the time and in the manner stipulated, the security
interest created in the revenue from the special tax es levied under this section shall be terminated.
(e)(1) In any real property tax year, if the amount expected to be on deposit in the Special
Tax Fund on the first day of the next succeeding real property tax year exceeds the greater of the
earnings on the Special Tax Fund for the current real property tax year or 1/12 of the amount that
the Mayor certifies as required to pay the principal of, and interest on, the bonds and any
Additional Bonds coming due in the next succeeding real property tax year, the Mayor shall either
cause the transfer of that excess amount to the General Fund of the District of Columbia or the
use of that excess amount to purchase, for cancellation, Outstanding Debt. That excess amount
shall be released from the lien on and security interest in the special tax revenue created under this
section.
(2) In any real property tax year, if the amount expected to be on deposit the
Special Tax Fund for Notes on the first day of the next succeeding real property tax year exceeds
the greater of the earnings on the Special Tax Fund for Notes for the current real property tax
year or 1/12 of the amount that the Mayor certifies as required to pay the principal of, and interest
on, the notes and any Additional Notes coming due in the next succeeding real property tax year,
the Mayor shall either cause the transfer of that excess amount to the General Fund of the District
of Columbia or the use of that excess amount to purchase, for cancellation, Outstanding Debt.
That excess amount shall be released from the lien on and security interest in the special tax for
notes revenue created under this section.
(3) On or before the date upon which the Mayor is required by law to submit to
the Council proposed real property tax rates for a real property tax year of the District (but not
later than the first day of that real property tax year), the Mayor shall certify to the Council the
amount required in that real property tax year to pay the principal of, and interest on, the bonds
and any Additional Bonds or notes and any Additional Notes coming due for any reason during
that real property tax year. The amount certified, less any funds then on deposit in the Special
Tax Funds after application of paragraphs (1) and (2) of this subsection, shall be called the
special tax requirement.
(f) On or before the date upon which the Mayor is required by law to submit to the Council
proposed tax rates for a real property tax year of the District (but not later than the first day of that
real property tax year), the Mayor shall calculate and submit to the Council proposed real property
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special tax rates to be applied during the real property tax year to all real property subject to
taxation in the District. The real property special tax rates shall be calculated to yield the special tax
requirement, as that amount is certified by the Mayor pursuant to subsection (e) of this section.
(g) The Council, in the same manner as provided for the establishment of other real
property tax rates, shall, by act, establish real property special tax rates for the real property tax
year calculated to yield the special tax requirement, as that amount is certified by the Mayor
pursuant to subsection (e) of this section. If the Council fails to enact special real property tax
rates for the real property tax year within the time provided by law, the real property special tax
rates submitted by the Mayor pursuant to subsection (f) of this section shall be the real property
special tax rates to be applied during that real property tax year.
(h) Real property special taxes shall be collected in the same manner as other District real
property taxes and the Mayor shall promptly deposit in the Special Tax Funds all real property
special taxes collected, including collection through a collection agent and deposit under an
Escrow Agreement. If the law of the District relating to the levy or collection of real property
taxes or the calculation or establishment of real property tax rates is changed in a manner that
renders any of the provisions of subsections (e) through (h) of this section incapable of
performance in accordance with their respective terms, the Mayor and the Council shall take
actions that result in the collection of real property special taxes, in the same manner as other
District real property taxes, in the amounts required by this section.
(i) The District and the Mayor reserve the right to satisfy all or a portion of the special tax
pledge requirements by setting aside and depositing into the Special Tax Funds, equally and ratably,
at any time any funds of the District not otherwise legally committed, which shall irrevocably
dedicate and pledge those deposits to the payment of principal of, and interest on, the bonds and
Additional Bonds or notes and any Additional Notes then outstanding. To the extent that all or a
portion of the special tax requirement or revenue pledge requirement is satisfied by those deposits,
an equal amount of real property special tax revenue or special tax for notes revenue subsequently
collected shall be released from the lien on and the security interest in the special tax revenue or the
special tax for notes revenue created under this section and shall be paid to reimburse the General
Fund of the District of Columbia or other fund of the District of Columbia from which the other
funds were received, and any other funds so deposited in lieu of a portion of the special tax revenues
or pledged property tax revenues shall be subject to the pledge and security interest under this act as
if they were special tax revenues or special tax for notes pledged revenues pursuant to section 467 of
the Home Rule Act.
(j) The Mayor shall provide for the payment of the principal of, and interest on, the bonds
or notes, as it may become due and payable for any reason, by transferring funds on deposit in the
Special Tax Funds, respectively, to the Paying Agent to the extent required pursuant to the bond or
Additional Bond issuance certificate or note or Additional Note issuance certificate provided for in
section 7.
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Sec. 10. Issuance of bonds to pay notes when due.
(a) The District shall issue the bonds or, to the extent permitted by the Home Rule Act,
renewal notes to provide for the payment of the principal of the notes, as they may become due and
payable.
(b) The par value to be received from the sale of any bonds issued to refund the notes or
any
renewal notes shall, to the extent necessary, be used to pay the principal of, and interest on, the
notes when due and are pledged to that purpose.
Sec. 11. General covenants.
(a) The following covenants are made by the District in connection with the
authorization and issuance of the bonds:
(1) Pursuant to section 603(c) of the Home Rule Act, the Council shall not approve
any budget that would result in expenditures being made by the District during any fiscal year in
excess of all resources that the Mayor estimates will be available from all funds available to the
District for that fiscal year, except as permitted by applicable law. The Mayor shall not forward to
the President for submission to Congress a budget that is not balanced according to the provisions
of section 603(c) of the Home Rule Act, except as permitted by applicable law.
(2) The District shall prepare its annual financial statements in accordance with
generally accepted accounting principles for state and local governments and cause its annual
financial statements to be audited by an independent accountant.
(3) The District shall not issue any general obligation bonds or general
obligation bond anticipation notes, other than bonds or renewal notes to refund any Outstanding
Debt, or incur any indebtedness to the Treasury of the United States for capital projects in an
amount that would cause the amount of debt service payable in any fiscal year on all the
indebtedness, including all outstanding bonds and loans, to exceed any limitations set forth in the
Home Rule Act or the borrowing limitation set forth in D. C. Official Code § 47 -335.02 at the
time the additional bonds or indebtedness are issued or incurred. For purposes of the l imitation
imposed by this section, and as required by section 475(b) of the Home Rule Act, the Council
hereby determines that the estimated maximum annual debt service amount for the bonds
anticipated by the notes is $30 million .
(4) Subject to applicable law, the District shall maintain a capital projects fund,
separate from other funds of the District, into which it will deposit the proceeds of any bonds or
notes, other than bonds or notes issued to refund Outstanding Debt, less any capitalized interest
and accrued interest, and shall expend the proceeds only to finance capital projects and incidental
costs as defined in section 103(8) of the Home Rule Act. Subject to applicable law, the proceeds
of the bonds or notes may be escrowed in appropriate accounts with escrow agents or a trustee for
the bonds or notes to be applied to the applicable purposes. Interest or other investment earnings
of proceeds in the capital projects fund shall be credited to the General Fund of the District of
Columbia, subject to provisions for any deposit requirements to a rebate fund or other funds in
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accordance with agreements pertaining to the bonds or notes.
(b) The Mayor or an Authorized Delegate may, through a trust agreement or other
instrument, make additional covenants of the District and agree to other provisions to better secure,
administer funds for, and protect the bonds or notes and the owners thereof.
Sec. 12. Events of default.
(a) Each of the following events constitutes an event of default:
(1) Failure to pay the principal of the bonds or notes, as the case may be, when
the principal becomes due and payable at maturity, upon redemption, or otherwise;
(2) Failure to pay an installment of interest on the bonds or notes, as the case
may be, upon the day when the interest becomes due; and
(3) Failure by the District to observe and perform any covenant, condition,
agreement, or provision, other than as specified in paragraphs (1) and (2) of this subsection,
contained in the bonds or notes, as the case may be, or in this act, but only if the failure
continues for a period of 90 days after transmittal to the District of written notice of failure.
(b) A bond or note owner who claims an event of default under subsection (a)(3) of this
section shall provide to the registrar written notice specifying the failure and requesting that it be
remedied. Upon verifying that the written notice has been transmitted by a bona fide bond or note
owner, the registrar, if other than the District, shall transmit the written notice to the District. If
the registrar is the District, the written notice shall be delivered directly to the Mayor. Transmittal
to the District of the written notice required by subsection (a)(3) of this section shall not be
accomplished in any manner other than that set forth in this subsection. If there is a trust
agreement or Escrow Agreement for the bonds or notes, the notice by bond or note owners and
notice to the District shall be given by and to the persons designated in or pursuant to such
agreement.
Sec. 13. Remedies.
(a) Upon the occurrence and continuance of any event of default, any bond or note
owner may:
(1) By mandamus or other suit, action, or proceeding at law or in equity, enforce
all rights of the bond or note owner and require the District to carry out any agreements with or for
the benefit of the bond or note owner and to perform its duties under this act;
(2) Bring suit upon the bonds or notes, as the case may be; and
(3) By action or suit at law or in equity, enjoin any acts that may be unlawful or in
violation of the rights of the bond or note owner.
(b) If any proceeding initiated by any bond or note owner to enforce any right under this
act is discontinued or abandoned for any reason, the District and the bond or note owner shall be
restored to their former positions and rights, and all rights, remedies, and powers of each of the
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parties shall continue as though the proceeding had not been initiated.
(c) Subject to the provisions of the Home Rule Act, if there is a trust agreement or
Escrow Agreement for the bonds or notes, actions under this act or such agreement, or on the
bonds or notes, as the case may be, shall be subject to applicable provisions in the agreement,
notwithstanding other provisions in this act.
Sec. 14. District officials.
(a) The elected and appointed officials, officers, employees, or agents of the District shall
not be liable personally for the payment of the bonds or notes or be subject to any personal
liability by reason of the issuance of the bonds or notes.
(b) The signature, countersignature, facsimile signature, or facsimile countersignature on
the bonds or notes shall be valid and sufficient for all purposes, notwithstanding the fact that the
official ceases to be that official before delivery of the bonds or notes.
Sec. 15. Defeasance of bonds and notes.
(a) The bonds or notes, as the case may be, shall be legally defeased and no longer be
considered outstanding and unpaid for the purpose of this act , and the requirements of this act
shall be discharged with respect to the bonds or the notes if the Mayor or an Authorized
Delegate:
(1) Deposits with an escrow agent, which shall be a bank, trust company, or
national banking association with requisite trust powers, in a separate defeasance escrow
account, established and maintained by the escrow agent solely at the expense of the
District and held in trust for the bond owners, sufficient moneys or direct obligations of the
United States, the principal of, and interest on, which, when due and payable, will provide
sufficient moneys to pay when due the principal of, and interest on, the bonds or notes to be
defeased; and
(2) Delivers to the defeasance escrow agent an irrevocable letter of instruction to
apply the moneys or investments to the payment of the principal of and interest on, the bonds or
notes to be defeased as they become due and payable.
(b) The defeasance escrow agent shall not invest the defeasance escrow account in any
investment callable at the option of its issuer if the call could result in less than sufficient moneys
being available for the purposes required by this section.
(c) The defeasance escrow account specified in subsection (a) of this section may be
established and maintained without regard to any District limitations placed on these accounts by
any law,
except for this act.
(d) References in this section to "amounts due and payable" include, but are not limited to,
amounts due and payable by reason of optional or mandatory redemption.
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Sec. 16. Additional debt and other obligations.
Subject to the terms of any trust agreement or Escrow Agreement pertaining to the bonds or
notes, the District reserves the right at any time to borrow money or enter into other
obligations to the full extent permitted by law, to secure the borrowings or obligations by the pledge
of its full faith and credit, to secure the borrowings or other obligations by any other security and
pledges of funds as may be authorized by law, and to issue bonds, including Additional Bonds,
notes, including Additional Notes, or other instruments, to evidence the borrowings or obligations.
Any act of the Council authorizing the issuance of Additional Bonds or Additional Notes shall
provide for an increase in the special tax requirements sufficient to pay principal of, and inter est on,
the Additional Bonds or Additional Notes.
Sec. 17. Tax status.
If and to the extent the bonds or notes are issued on a tax- exempt basis, the Mayor or an
Authorized Delegate shall not (1) take any action or omit to take any action, or (2) invest, reinvest,
or accumulate any moneys in a manner, that will cause the interest on the bonds or notes, as the
case may be, to be includable in gross income for federal income tax purposes or to be treated as
an item of tax preference for purposes of the federal alternative minimum tax. The Mayor or an
Authorized Delegate shall also take all actions necessary to be taken, including to make any rebate
payment, if any, when due, so that the interest on the bonds or notes will not be includable in gross
income for federal income tax purposes or be treated as an item of tax preference for purposes of
the federal alternative minimum tax.
Sec. 18. Contract.
This act shall constitute a contract between the District and the owners of the bonds and
notes. To the extent that any acts or resolutions of the Council may be in conflict with this act, this
act shall be controlling with respect to bonds and notes.
Sec. 19. Authorized delegation of authority.
To the extent permitted by District and federal laws, the Mayor may delegate to any
authorized delegate the performance of any act authorized to be performed by the Mayor under this
act.
Sec. 20. Maintenance of documents.
Copies of the specimen bonds and notes and related documents shall be filed in the
Office of the Secretary of the District of Columbia.
See. 21. Information reporting.
(a) Within 3 days after the Mayor's receipt of the transcript of proceedings relating to
the issuance of any series of the bonds or notes, the Mayor shall transmit a copy of the transcript to
the Secretary to the Council.
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(b) The Mayor shall notify the Council, within 30 days, if any funds or accounts of
the District not otherwise legally committed have been used for the payment of principal of
and interest on the bonds pursuant to section 8(c).
(c)(1) The Mayor's letter of transmittal accompanying the submission of any proposed
resolution to approve the issuance of bonds or notes pursuant to this act shall include a statement
as to:
(A) Whether the bonds or notes of any series are intended to be sold by
competitive bid or by negotiated sale and, if bonds of any series are intended to be sold by
negotiated sale, a copy of the Mayor's written determination that sale by competitive bid is not
feasible or is not in the best interests of the District and a statement of the reasons supporting
this determination; and
(B) Whether the bonds or notes of any series are intended to be issued on a
tax-exempt or taxable basis.
(d)(1) No portion of the proceeds of the sale of bonds or notes shall be used to
compensate a District employee unless the employee actually performs duties related to the
projects financed by this act, as provided in section 5(e).
(2) Within 30 days after the effective date of this act, and before any bonds or
notes are issued pursuant to this act, the Mayor shall submit to the Council a list of all
District employees who are compensated, in whole or part, by capital improvement funds.
(e) With respect to a negotiated sale of bonds or notes, the underwriters shall provide
written notification to the District of the following circumstances:
(1) Any relationship, during the prior 2 years, with elected or appointed District
officials, or the District's bond counsel or financial advisor, which could create a conflict of
interest or apparent conflict of interest with the duties performed, or to be performed, by such
underwriters or other advisors for the District;
(2) Any arrangement, during the prior 2 years, to share fees with other
underwriters, firms, or individuals in connection with the provision of services to the District by
either entity; and
(3) Any public finance transaction for any other issuer where the underwriter, or
prospective underwriter, is serving, or has served in the prior 2 years, as financial advisor in any
transaction where the District's financial advisor was, or is, an underwriter.
Sec. 22. Period of Limitations.
At the end of the 20- day period beginning on the date of the first publication pursuant to
the notice in section 463(a) of the Home Rule Act that an act authorizing the issuance of the
bonds has taken effect:
(1) Any recital or statement of fact contained in such act or in the preamble or
title of this act shall be deemed to be true for the purpose of determining the validity of any bonds
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authorized by this act, and the District and all others interested shall be estopped from denying
any such recital or statement of fact; and
(2) This act, and all proceedings in connection with the authorization of the
issuance of bonds authorized by this act, shall be deemed to have been duly and regularly taken,
passed, and done by the District, in compliance with the Home Rule Act and all other applicable
laws, for the purpose of determining the validity of this act and the proceeding in connection with
the authorization and issuance of bonds authorized by this act; and no court shall have jurisdiction
in any suit, action, or proceeding commenced before the end of such 20- day period.
Sec 23. Severability.
As provided in the General Rule of Severability Adoption Act of 1983, effective March
14, 1984 (D.C. Law 5-56; D.C. Official Code § 45- 201), if any provision of this act or the
application of this act to any person or circumstance is held to be unconstitutional or beyond the
statutory authority of the Council, or otherwise invalid, the i nvalidity shall not affect other
provisions or applications of the act that can be given effect without the invalid provision or
application, and to this end the provisions of this act are declared to be severable.
Sec. 24. Fiscal impact statement.
The Council adopts the fiscal impact statement of the Chief Financial Officer as the
fiscal impact statement required by section 4a of the General Legislative Procedures Act of
1975, approved October 16, 2006 (120 Stat. 2038; D.C. Official Code § 1- 301.47a).
Sec. 25. Effective date.
(a) This act shall take effect following approval by the Mayor (or in the event of veto by the
Mayor, action by the Council to override the veto), a 30- day period of Congressional review as
provided in section 602(c)(1) of the District of Columbia Home Rule Act, approved December
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24, 1973 (87 Stat. 813; D.C. Official Code § 1- 206.02(c)(1)), and publication in the District of
Columbia Register.
(b) This act shall expire after 225 days of its having taken effect.
______________________________
Chairman
Council of the District of Columbia
_________________________________
Mayor
District of Columbia