Section 4-233 - Pledges securing local obligations.
§ 4-233. Pledges securing local obligations.
(a) In general.- Each issuance of a local obligation under § 4-230 of this subtitle shall be secured by, at the discretion of the Administration, a pledge of the faith and credit of the issuer or a pledge of specific revenue of the issuer or the facility being financed as designated and described in the authorizing ordinance or resolution.
(b) Obligations secured by pledge of faith and credit.- If a local obligation is secured by a pledge of the faith and credit of the issuer to make prompt payment from the tax and other revenues described in the enabling resolution or ordinance:
(1) the pledge is a covenant to levy taxes sufficient to pay the principal of and interest on the local obligation when due:
(i) on all real and tangible personal property that is within the issuer's corporate limits and subject to assessment for unlimited ad valorem taxation; and
(ii) in each year in which the local obligation is outstanding;
(2) if at the time of issuance of a local obligation there is a charter or statutory limit on the power of the issuer to levy property taxes, the pledge is a covenant to levy ad valorem taxes, within that limit, sufficient to pay the principal of and interest on the local obligation:
(i) on all real and tangible personal property that is within the issuer's corporate limits and subject to assessment for ad valorem taxation; and
(ii) in each year in which the local obligation is outstanding;
(3) a local obligation may not be issued if the issuance would cause the issuer to exceed any limit set by the charter of the issuer or by statute on the power of the issuer to incur indebtedness; and
(4) notwithstanding item (3) of this subsection:
(i) a limit on the power to incur indebtedness imposed after the issuance of a local obligation does not affect that obligation; and
(ii) outstanding local obligations of an issuer are not affected by the issuance of a new local obligation if the new obligation is consistent with an increase in or the elimination of a limit on the power to incur indebtedness.
(c) Revenue obligations.-
(1) An issuer of a local obligation under § 4-230 of this subtitle may secure payment by the pledge of specific revenues of the issuer.
(2) If a local obligation issued under § 4-230 of this subtitle is secured by the pledge of specific revenue, the specific revenue may include:
(i) payments to the issuer from the State or federal government;
(ii) special benefit assessments, taxes, fees, or service charges that the issuer has authority to impose, levy, or charge; or
(iii) revenue expected to be generated by the facility to be financed.
[An. Code 1957, art. 83B, § 2-204(16)(v); 2005, ch. 26, § 2.]