Code of the District of Columbia

§ 6–210. Terms for sale of Obligations.

(a) The Authority may stipulate, by resolution, the terms for sale of its Obligations in accordance with this chapter, subject to applicable federal law and the requirements of any annual contribution contract or other agreement between the Authority and HUD. Such terms may include the following:

(1) The date of issuance;

(2) The maturity date;

(3) The designation of issuance as term bonds, serial bonds, or a combination of the two;

(4) The denomination;

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

(6) The registration privileges;

(7) The medium and method for payment; and

(8) The terms of redemption.

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

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

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

(2) A security interest in Authority revenues to secure payment and the rank or the priority of the security interest, subject to preexisting agreements with holders of the Obligations;

(3) A security interest in assets of the Authority, including mortgages and obligations securing mortgages, to secure payment, and the rank or priority of the security interest, subject to preexisting agreements with holders of the Obligations;

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

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

(6) Any limitations on the issuance of additional Obligations, including terms of issuance and security, and the refunding of outstanding or other Obligations;

(7) Procedures for amendment or abrogation of a contract with holders of the Obligations, specifying the amount of Obligations, including the manner in which the holders must give consent to such amendment or abrogation;

(8) Any vesting in a trustee of property, power, or duties, which may include the powers and duties of a trustee appointed by holders of the Obligations;

(9) Limitations or abrogations of the rights of holders of the Obligations to appoint a trustee;

(10) A definition of the events of default in the Obligations of the Authority to the holders of the Obligations and specification of the rights and remedies of the holders of the Obligations in the event of default, including the right to the appointment of a receiver in accordance with this section and applicable District law; and

(11) Any other provisions of like or different character which affect the security of holders of the Obligations.

(d) Notwithstanding Article 9 of Subtitle I of Title 28, any security interest created by the Authority shall be valid, binding, and perfected from the time such security interest is created, with or without the physical delivery of any funds or any other property and with or without any further action. Such security interest shall be valid, binding, and perfected whether or not any statement, document, or instrument relating to such security interest is recorded or filed. The lien created by such security interest is valid, binding, and perfected with respect to any individual or legal entity having claims against the Authority, whether or not such individual or legal entity has notice of such lien.

(e) The signature of any authorized Officer of the Authority which appears on an Obligation remains valid and binding upon the Authority if that person ceases to hold office.

(f) The Authority shall secure the Obligations by a trust indenture between the Authority and a corporate trustee which is a trust company within the District.

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

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

(1) If the Obligations are redeemable, the price may not exceed the redemption price then applicable, plus accrued interest to the next-due interest payment; or

(2) If the Obligations are not redeemable, the price may not exceed the price applicable on the first date following the purchase upon which the Obligations become subject to redemption, plus accrued interest to that date.

(i) The Authority may establish special or reserve funds in furtherance of its authority under this chapter. Subject to agreements with holders of the Obligations, the Authority shall manage its own funds, and may invest funds not required for disbursement in a manner the Board deems to be prudent; provided, that no investment shall be made which causes the interest on the Obligations to be taxable if such interest is intended to be tax-exempt.

(j) The Obligations 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, and banking institutions, including savings and loan institutions, 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 Obligations 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 Obligations issued under the provisions of this chapter do not constitute obligations of the District, but are payable solely from the revenues or assets of the Authority. Each Obligation issued under this chapter must contain on its face a statement to this effect, and a notation that neither the faith and credit nor the taxing power of the District are pledged to the payment of the principal of, or interest on, the Obligation.

(l) Income from the Obligations issued by the Authority shall be exempt from District taxation, except that it shall remain subject to estate and gift taxation.

(m) On or before December 31 of each year, the Authority shall transmit an estimate to the HFA of the total amount of tax-exempt revenue bond financing for all undertakings of the Authority which it reasonably expects the HFA to finance in the following calendar year. The HFA shall include the amount requested in its request to the Mayor for tax-exempt bond volume cap allocation. To the extent that any allocation is received for an undertaking of the Authority, and remains unused for a period of 2 years, the HFA may allocate such amounts to other projects of the HFA.

(n) The District warrants to the Authority, with regard to any and all Obligations issued by the Authority, and to the holders of such Obligations, that the District will not limit or alter rights vested in the Authority to fulfill agreements made with holders of the Obligations, nor in any way impair the rights and remedies available to the holders of the Obligations, until the Obligations and the interest thereon, together with interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceedings brought by or on behalf of the holders of the Obligations, have been fully met, paid, and discharged. The Authority is authorized to include this pledge of the District in any agreement with the holders of the Obligations.


(May 9, 2000, D.C. Law 13-105, § 11, 47 DCR 1325.)

Emergency Legislation

For temporary (90-day) addition of section, see notes following § 6-201.