Code of the District of Columbia

§ 10–1602.03. Bond issuance.

(a) For the purposes of this section, the term:

(1) “Community Benefit Fund” means the Community Benefit Fund established by § 10-1602.02.

(2) “Bonds” means the District of Columbia revenue bonds, notes, or other obligations (including refunding bonds, notes, and other obligations) in one or more series, authorized to be issued pursuant to § 1-204.90, as implemented by this subchapter.

(3) “DC Ballpark TIF area” means the tax increment financing area designated and established by § 2-1217.12.

(4) “Home Rule Act” means Chapter 2 of Title 1.

(5) “Projects” means the financing, refinancing, or reimbursing of costs incurred in the site acquisition for, and the development, design, construction, improvement, furnishing, and equipping of recreation centers, libraries, small business development incentives, job training and readiness programs, school athletic facilities, and such other projects to be of benefit to any community of the District.

(b) The Council hereby authorizes the issuance of one or more series of Bonds in an aggregate amount not to exceed $450 million for payment of the costs of the projects, of which $50 million shall be used for infrastructure improvements in the DC Ballpark TIF Area. There is hereby allocated to the bonds the funds in the Community Benefit Fund, or such portion of the funds as shall be determined in accordance with the terms of the bonds, for the payment of debt service on the bonds and the payment of such other costs as are permitted to be paid with funds from the Community Benefit Fund. The issuance of any series of bonds shall be approved by resolution of the Council.

(c) The Mayor may take any action necessary or appropriate in accordance with this subchapter in connection with the preparation, execution, issuance, sale, delivery, and payment of bonds, including determinations of:

(1) The final form, content, designation, and terms of the bonds, including a determination that the bonds may be issued in certificate or book entry form;

(2) The principal amount of the bonds to be issued and the denominations of the bonds;

(3) The rate or rates of interest on, and the method or methods of determining the rate or rates of interest on, the bonds;

(4) The date or dates of issuance, sale, and delivery of, the payment of interest on, and the maturity date or dates of, the bonds;

(5) Whether the bonds are to be sold at a competitive or negotiated sale and the terms and conditions of the sale;

(6) The terms under which the bonds may be paid, optionally or mandatorily redeemed, accelerated, called or put for redemption, repurchase, or remarketing before their respective stated maturities;

(7) Provisions for the registration, transfer, and exchange of each series of bonds and the replacement of mutilated, lost, stolen, or destroyed bonds;

(8) The creation of any reserve fund, sinking fund, or other fund with respect to the bonds and the determination of the priority thereof;

(9) The time and place of payment of the bonds;

(10) Whether the bonds will be taxable, tax-exempt, or a combination thereof;

(11) Procedures for monitoring the use of the proceeds received from the sale of the bonds to ensure that they are properly applied to the projects and used to accomplish the purposes of this subchapter; and

(12) Actions necessary to qualify the bonds under the blue sky laws of any jurisdiction where the bonds are marketed.

(d) The bonds shall contain a legend, which shall provide that the bonds shall be special obligations of the District, shall be nonrecourse to the District, shall not be a pledge of, and shall not involve, the faith and credit or the taxing power of the District (other than the payments from the Community Benefit Fund or any other security authorized by this subchapter), shall not constitute a debt of the District, and shall not constitute lending of the public credit for private undertakings as prohibited by § 1-206.02(a)(2).

(e) The bonds shall be executed in the name of the District and on its behalf by the manual or facsimile signature of the Mayor. The Mayor’s execution and delivery of the bonds shall constitute conclusive evidence of the Mayor’s approval on behalf of the District of the final form and content of the bonds.

(f) The official seal of the District, or a facsimile of it, shall be impressed, printed or otherwise reproduced on the bonds.

(g) The bonds may be issued at any time or from time to time in one or more issues and one or more series and may be sold at public or private sale. A series of bonds may be secured by a trust agreement or trust indenture between the District and a corporate trustee having trust powers, and may be secured by a loan agreement or other instrument or instruments by means of which the District may:

(1) Make and enter into any and all covenants and agreements with the trustee or the holders of the bonds that the District may determine to be necessary or desirable relating to:

(A) The application, investment, deposit, use, and disposition of the proceeds of bonds and the other monies, securities, and property of the District;

(B) The assignment by the District of its rights in any agreement;

(C) The terms and conditions upon which additional bonds of the District may be issued;

(D) The appointment of a trustee to act on behalf of bondholders and abrogating or limiting the rights of the bondholders to appoint a trustee; and

(E) The vesting in a trustee for the benefit of the holders of bonds, or in the bondholders directly, such rights and remedies as the District shall determine to be necessary or desirable;

(2) Pledge, mortgage or assign monies, agreements, property, or other assets of the District, either in hand or to be received in the future, or both;

(3) Provide for bond insurance, letters of credit, interest rate swaps, or other financial derivative products or otherwise enhance the credit of and security for the payment of the bonds or reduce or otherwise manage the interest costs of the bonds; and

(4) Provide for any other matters of like or different character that in any way affects the security for or payment on the bonds.

(h) The bonds are declared to be issued for essential public and governmental purposes. The Bonds, the interest thereon, the income therefrom, and all monies pledged or available to pay or secure the payment of the bonds, shall at all times be exempt from taxation by the District, except for estate, inheritance, and gift taxes.

(i) The District does hereby pledge and covenant and agree with the holders of the bonds that, subject to the provisions of the financing documents, the District will not limit or alter the revenues pledged to secure the bonds or the basis on which the revenues are collected or allocated, will not impair the contractual obligations of the District to fulfill the terms of any agreement made with the holders of the bonds, will not in any way impair the rights or remedies of the holders of the bonds, and will not modify in any way, with respect to the bonds, the exemptions from taxation provided for in this subchapter, until the bonds, together with interest thereon, with interest on any unpaid installment of interest and all costs and expenses in connection with any suit, action or proceeding by or on behalf of the holders of the bonds, are fully met and discharged. This pledge and agreement for the District may be included as part of the contract with the holders of the bonds. This subsection shall constitute a contract between the District and the holders of the bonds. To the extent that any acts or resolutions of the Council may be in conflict with this subchapter, this subchapter shall be controlling.

(j) Consistent with § 1-204.90(a)(4)(B), and notwithstanding Article 9 of Subtitle I of Title 28:

(1) A pledge made and security interest created in respect of the bonds or pursuant to any related financing document shall be valid, binding, and perfected from the time the security interest is created, with or without physical delivery of any funds or any property and with or without any further action;

(2) The lien of the pledge shall be valid, binding, and perfected as against all parties having any claim of any kind in tort, contract, or otherwise against the District, whether or not the party has notice; and

(3) 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.

(k) If there shall be a default in the payment of the principal of, or interest on, any bonds of a series after the principal or interest shall become due and payable, whether at maturity or upon call for redemption, or if the District shall fail or refuse to carry out and perform the terms of any agreement with the holders of any of the bonds, the holders of the bonds, or the trustee appointed to act on behalf of the holder of the bonds, may, subject to the provisions of the financing documents, do the following:

(1) By action, writ or other proceeding, enforce all rights of the holders of the bonds, including the right to require the District to carry out and perform the terms of any agreement with the holders of the bonds or its duties under this subchapter;

(2) By action, require the District to account as if it were the trustee of an express trust;

(3) By action, petition to enjoin any acts or things that may be unlawful or in violation of the rights of the holders of the bonds; and

(4) Declare all the bonds to be due and payable, whether or not in advance of or at maturity and, if all defaults be made good, annul the declaration and its consequences.

(l) The members of the Council, the Mayor, or any person executing any of the bonds shall not be personally liable on the bonds by reason of their issuance.

(m) Notwithstanding any other provision of this subchapter, the bonds shall not be general obligations of the District and shall not be in any way a debt or liability of the District within the meaning of any debt or other limit prescribed by law. The faith and credit or the general taxing power of the District (other than monies in the Community Benefit Fund or any other security authorized by this subchapter) shall not be pledged to secure the payment of the bonds.


(Apr. 8, 2005, D.C. Law 15-320, § 203, 52 DCR 1757.)

Section References

This section is referenced in § 10-1602.02.