Code of the District of Columbia

§ 34–2202.10. Delegation of Council authority to issue bonds.

(a) The Authority may stipulate by resolution the terms for sale of its bonds in accordance with this chapter, including the following:

(1) The date a note or bond bears;

(2) The denomination;

(3) Any interest rate or rates, or variable rate or rates changing from time to time, or premium or discount applicable;

(4) The registration privileges;

(5) The medium and method for payment; and

(6) The terms of redemption.

(b) The Authority may sell its bonds at public or private sale and may determine the price for sale.

(c) A resolution authorizing the sale of bonds may contain any of the following provisions, in which case these provisions shall be made part of the contract with holders of the bonds:

(1) The custody, security, expenditure, or application of proceeds of the sale of bonds of the Authority (“proceeds”), a pledge of the proceeds to secure payment, and the rank or priority of the pledge, subject to preexisting agreements with holders of the bonds;

(2) A pledge of Authority revenues to secure payment and the rank or priority of the pledge, subject to preexisting agreements with holders of the bonds;

(3) A pledge of assets of the Authority, other than those assets that the Mayor allows the Authority to use through an intra-District transfer, including mortgages and obligations securing mortgages, to secure payment, and the rank or priority of the pledge, subject to preexisting agreements with holders of the bonds;

(4) The proposed use of gross income from any mortgages owned by the Authority and payment of principal of mortgages owned by the Authority;

(5) The proposed use of reserves or sinking funds;

(6) The proposed use of proceeds from the sale of revenue bonds and a pledge of proceeds to secure payment;

(7) Any limitations on the issuance of revenue bonds, including terms or issuance and security, and the refunding of outstanding or other revenue bonds;

(8) Procedures for amendment or abrogation of a contract with holders of the revenue bonds, the amount of bonds, the holders of which must consent to the amendment, and the manner in which consent may be given;

(9) Any vesting in a trustee property, power, and duties, which may include the power and duties of a trustee appointed by holders of the revenue bonds;

(10) Limitations or abrogations of the right of holder of the revenue bonds to appoint a trustee;

(11) A defining of the nature of default in the obligations of the Authority to the holders of the revenue bonds and providing the rights and remedies of holders of the bonds in the event of default, including the right to the appointment of a receiver, in accordance with the general laws of the District and this chapter; and

(12) Any other provisions of like or different character that affect the security of holders of the revenue bonds.

(d) A pledge of the Authority is binding from the time it is made. Any funds, or property pledged, are subject to the lien of a pledge without physical delivery. The lien of a pledge is binding as against parties having any tort, contract, or other claim against the Authority regardless of notice. Neither the resolution stipulating the terms for sale of Authority bonds nor any other instrument creating a pledge need be recorded.

(e) The signature of any officer of the Authority which appears on a bond shall remain valid if that person ceases to hold office.

(f) The Authority may secure bonds by a trust indenture between the Authority and a corporate trustee that has trust company powers within the District.

(g) A trust indenture of the Authority may contain provisions for protecting and enforcing the rights and remedies of holders of the revenue bonds in accordance with the provisions of the resolution authorizing the sale of bonds.

(h) Subject to preexisting agreements with the holders of the revenue bonds, the Authority may purchase its own revenue bonds which may then be cancelled. The price the Authority pays in purchasing its own revenue bonds shall not exceed the following limits:

(1) If the revenue bonds are redeemable, the price shall not exceed the redemption price then applicable plus accrued interest to the next interest payment; or

(2) If the bonds are not redeemable, the price shall not exceed the redemption price applicable on the first date after the purchase upon which the bonds or notes become subject to redemption plus accrued interest to that date.

(i) The Authority may establish special or reserve accounts in furtherance of its authority under this chapter. Notwithstanding subsections (a) and (b) of this section and other applicable District law, and subject to agreements with holders of the bonds, the Authority shall manage its own funds, and may invest funds not required for disbursement in a manner consistent with industry practices.

(j) The bonds of the Authority are legal instruments in which public officers and public bodies of the District, insurance companies, insurance company associations, and other persons carrying on an insurance business, banks, bankers, banking institutions, including savings and loan associations, building and loan associations, trust companies, savings banks, savings associations, investment companies, and other persons carrying on a banking business, administrators, guardians, executors, trustees and other fiduciaries, and other persons authorized to invest in bonds or in other obligations of the District, may legally invest funds, including capital, in their control. The bonds are also securities which legally may be deposited with, and received by, public officers and public bodies of the District or any agency of the District for any purpose for which the deposit of bonds or other obligations of the District is authorized by law.

(k) The revenue bonds shall be special obligations of the District. The bonds shall be without recourse to the District. The bonds shall not be general obligations of the District, shall not be a pledge of or involve the faith and credit or the taking power of the District, shall not constitute a debt of the District, shall not constitute lending of the public credit for private undertakings as prohibited in § 1-206.02(a)(2), and shall not constitute debt for purposes of § 1-206.03.

(l) The revenue bonds shall not give rise to any pecuniary liability to the District and the District shall have no obligation with respect to the purchase of the bonds.

(m) Nothing contained in the revenue bonds, in the financing documents, or in the closing documents shall create any obligation on the part of the District to make payments with respect to the bonds from sources other than those listed for that purpose in this chapter.

(n) The District shall not have liability for the payment of any issuance costs or for any transaction or event to be effected by the financing documents.


(Apr. 18, 1996, D.C. Law 11-111, § 210, 43 DCR 548.)

Prior Codifications

1981 Ed., § 43-1680.

Section References

This section is referenced in § 34-2202.13.

Effective Dates

Section 701 of D.C. Law 11-111 provided that the act, with the exception of sections 208 through 211, 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), approval by the Financial Responsibility and Management Assistance Authority as provided in section 203(a) of the District of Columbia Financial Responsibility and Management Assistance Authority Act of 1995, approved April 17, 1995 (109 Stat. 116; D.C. Code § 47-392.03(c)), and a 30-day period of Congressional review as provided in section 602 (c)(1) of the District of Columbia Self-Government and Governmental Reorganization Act, approved December 24, 1973 (87 Stat. 813; D.C. Code § 1-206.02(c)(1)), and publication in the District of Columbia Register. Sections 208 through 211 of the act shall take effect upon the enactment by Congress of the legislation proposed in title IV of the act, or of substantially similar legislation.