§ (62A). Special Tax Districts.
(a) In general.
(1) Subject to the provisions of this section and for the purpose stated in paragraph (2) of this subsection, to:
(i) create a special taxing district;
(ii) levy ad valorem or special taxes; and
(iii) issue bonds and other obligations.
(5) The purpose of the authority granted under paragraph (1) of this subsection is to provide financing, refinancing, or reimbursement for the cost of the design, construction, establishment, extension, alteration, or acquisition of infrastructure improvements, whether situated within the special taxing district or outside the special taxing district if the infrastructure improvement is reasonably related to other infrastructure improvements within the special taxing district.
(b) Definitions.
In this section the following words have the meanings indicated, unless the context clearly indicates another or different meaning or intent:
(1) "Abandoned property" has the meaning stated in § 21-17(a) of the Public Local Laws of Baltimore City.
(2) "Affordable housing" has the meaning stated in § (62)(b) of this article.
(3) "Bond" means a special obligation bond, revenue bond, note, or other similar instrument issued by the Mayor and City Council of Baltimore in accordance with this section.
(4) "Cost" includes the cost of:
(i) construction, reconstruction, and renovation and purchasing, leasing, condemning, or otherwise acquiring any lands, structures, real or personal property, rights, rights-of-way, franchises, easements, and interests acquired or to be acquired by the Mayor and City Council of Baltimore;
(ii) all machinery and equipment including machinery and equipment needed to expand or enhance city services to the special taxing district;
(iii) financing charges and interest prior to and during construction, and, if deemed advisable by the Mayor and City Council of Baltimore, for a limited period after completion of the construction, interest and reserves for principal and interest, including costs of municipal bond insurance and any other type of financial guaranty and costs of issuance;
(iv) extensions, enlargements, additions, and improvements;
(vii) architectural, engineering, financial, and legal services;
(vi) plans, specifications, studies, surveys, and estimates of cost and of revenues;
(vii) administrative expenses necessary or incident to determining to proceed with the infrastructure improvements;
(viii) site removal;
(ix) relocation of businesses and residents; and
(xv) other expenses as may be necessary or incident to the construction, acquisition, and financing of the infrastructure improvements.
(5) "Distressed property" has the meaning stated in § 21-17(a) of the Public Local Laws of Baltimore City.
(6) "Infrastructure improvement" means adequate storm drainage systems, sewers, water systems, roads, bridges, culverts, tunnels, streets, sidewalks, lighting, surface parking, playgrounds, parks and recreation facilities, libraries, schools, transit facilities, solid waste facilities, buildings devoted to a governmental use or purpose, buildings that are abandoned property or distressed property, buildings that provide units of affordable housing, structured parking facilities that are publicly owned or privately owned, but serve a public purpose, and other infrastructure improvements as necessary for the development and utilization of the land, with respect to any defined geographic region within the City of Baltimore.
(7) "State obligations" means any bonds or bond, notes or note, or other similar instruments or instrument issued by the Maryland Economic Development Corporation, the State of Maryland, or any agency, department, or political subdivision thereof, provided:
(i) such bonds are issued for the purposes specified in subsection (a)(2) of this section;
(ii) a request has been made to the Mayor and City Council of Baltimore by both:
1. the owners of at least two–thirds of the assessed valuation of the real property located within the special taxing district; and
2. at least two–thirds of the owners of the real property located within the special taxing district, provided that multiple owners of a single parcel are treated as a single owner; and a single owner of multiple parcels is treated as one owner; and
(iii) the proceeds of such bonds have been applied in accordance with subsection (d) of this section.
(c) Bond issuance on request.
(1) In addition to other powers the Mayor and City Council of Baltimore may have, and notwithstanding the provisions of any other public law, public general law, or the Baltimore City Charter, the Mayor and City Council of Baltimore may borrow money by issuing and selling bonds for the purpose stated in subsection (a)(2) of this section if a request to the Mayor and City Council of Baltimore is made by both:
(i) the owners of at least two-thirds of the assessed valuation of the real property located within the special taxing district; and
(ii) at least two-thirds of the owners of the real property located within the special taxing district, provided that:
1. multiple owners of a single parcel are treated as a single owner; and
2. a single owner of multiple parcels is treated as one owner.
(1) This section is self-executing and does not require the Mayor and City Council of Baltimore to enact legislation to exercise the powers granted under this section.
(d) Payment of bonds; Application of proceeds.
(1) Bonds shall be payable from the special fund to the extent provided in the authorizing ordinance, as set forth in subsection (e) of this section.
(12) All proceeds received from any bonds issued and sold shall be applied solely to pay the cost of infrastructure improvements, including:
(i) costs of design, construction, establishment, extension, alteration, or acquisition of infrastructure improvements;
(ii) costs of issuing bonds;
(iii) payment of the principal and interest on loans, money advances, or indebtedness incurred by the Mayor and City Council of Baltimore for any of the purposes stated in subsection (a)(2) of this section, including the refunding of bonds previously issued under this section; and
(iv) funding of a debt service reserve fund or payment of interest prior to, during, or for a limited period of time after construction.
(e) Prerequisites for bond issuance.
(1) Before issuing bonds, the Mayor and City Council of Baltimore shall by ordinance:
(iii) designate an area or areas as a special taxing district;
(i) subject to paragraph (2) of this subsection, create a special fund with respect to the special taxing district; and
(iii) provide for the levy of an ad valorem or special tax on all real and personal property within the special taxing district at a rate or amount designed to provide adequate revenues to pay the principal of, interest on, and redemption premium, if any, on the bonds, to replenish any debt service reserve fund, and for any other purpose related to the ongoing expenses of or security for the bonds. Ad valorem taxes shall be levied in the same manner, upon the same assessments, for the same period or periods, and as of the same date or dates of finality as are now or may hereafter be prescribed for general ad valorem tax purposes within the district, and shall be discontinued when all of the bonds have been paid in full. Special taxes shall be levied pursuant to subsection (k) of this section.
(2) The ordinance creating a special fund under paragraph (1)(ii) of this subsection shall:
(i) pledge to the special fund the proceeds of the ad valorem or special tax to be levied as provided under paragraph (1)(iii) of this subsection;
(ii) require that the proceeds from the tax be paid into the special fund;
(iii) provide that assessments and taxes levied within the special taxing district may not be accelerated by reason of bond default; and
(iv) provide that the maximum special assessments, special taxes, or other fees or charges applicable to any individual property may not be increased in the event that other property owners become delinquent in the payment of a special assessment, special tax, or other fee or charge securing special obligation debt issued under this section.
(3)(i) In lieu of the pledge set forth in paragraph (2)(i) of this subsection, the authorizing ordinance, subject to subparagraph (ii) of this paragraph, may pledge or assign:
2. all or any part of the revenues and receipts from the special taxes to the payment of principal and interest on the bonds; and
3. the special fund and any other fund into which all or any part of such revenues and receipts are deposited after such revenues and receipts are appropriated by the Mayor and City Council of Baltimore to the payment of such principal and interest.
(iv) The revenues and receipts may not be irrevocably pledged to the payment of such principal and interest and the obligation to pay such principal and interest from such revenues and receipts shall be subject to annual appropriation by the Mayor and City Council of Baltimore.
(f) If bonds not outstanding; Termination of district.
(1) When no bonds authorized by this section are outstanding with respect to a special taxing district and the Mayor and City Council of Baltimore by ordinance so determines, moneys in the special fund for that special taxing district created pursuant to subsection (e)(1) of this section may be:
(i) applied as provided in subsection (d) of this section in accordance with the purposes set forth in subsection (a)(2) of this section;
(ii) accumulated for payment of debt service on bonds subsequently issued under this section for any of the purposes described in subsection (a)(2) and whose proceeds are to be applied in accordance with subsection (d) of this section; or
(iii) used to pay or to reimburse the Mayor and City Council of Baltimore for debt service which the Mayor and City Council of Baltimore is obligated to pay or has paid (whether such obligation is general or limited) on any bonds or State obligations.
(2)(i) The Mayor and City Council of Baltimore may enact an ordinance creating a special fund described in subsection (e)(1)(ii) of this section with respect to a special taxing district, even though no bonds authorized by this section have been issued by the Mayor and City Council of Baltimore with respect to that special taxing district or are then outstanding.
(ii) The taxes allocated to such special fund by subsection (e)(2) of this section shall thereafter be paid over to Such special fund, as long as such ordinance remains in effect.
(3) When no bonds authorized by this section are outstanding with respect to a special taxing district:
(i) the special taxing district shall be terminated; and
(ii) any moneys remaining in the special fund on the date of termination of the special taxing district shall be paid to the general fund of the Mayor and City Council of Baltimore.
(g) Enabling ordinance.
(1) In order to implement the authority conferred upon it by this section to issue bonds, the Mayor and City Council of Baltimore shall enact an ordinance that:
(i) specifies and describes the proposed undertaking and states that it has complied with subsection (e) of this section;
(ii) specifies the maximum principal amount of bonds to be issued;
(iii)
(iii) specifies the maximum rate or rates of interest for the bonds; and
(iv) agrees to a covenant to levy upon all real and personal property within the special taxing district ad valorem taxes or special taxes in rate and amount at least sufficient in each year in which any of the bonds are outstanding to provide for the payment of the principal of and the interest on the bonds.
(4) The ordinance may specify, or may authorize the Board of Finance by resolution to specify, any of the following as it deems appropriate to effect the financing of the proposed undertaking:
(i) the actual principal amount of the bonds to be issued;
(ii) the actual rate or rates of interest for the bonds;
(iii) the manner in which and the terms upon which the bonds are to be sold;
(iv) the manner in which and the times and places that the interest on the bonds is to be paid;
(vii) the time or times that the bonds may be executed, issued, and delivered;
(vi) the form and tenor of the bonds and the denominations in which the bonds may be issued;
(vii) the manner in which and the times and places that the principal of the bonds is to be paid, within the limitations set forth in this section;
(viii) provisions pursuant to which any or all of the bonds may be called for redemption prior to their stated maturity dates;
(ix) provisions establishing sinking funds or debt service reserve funds for the bonds;
(xv) provisions pledging other assets and revenues towards the payments of the principal of and interest on the bonds;
(xi) provisions for municipal bond insurance or any other type of financial guaranty of the bonds; or
(xii) any other provisions not inconsistent with this section as shall be determined by the Mayor and City Council of Baltimore to be necessary or desirable to effect the financing of the proposed undertaking.
(3)(i) Before the ordinance that designates a special taxing district, authorizes the issuance of bonds, or levies ad valorem taxes or special taxes under the provisions of this section may be finally enacted, the Mayor and City Council of Baltimore shall hold a public hearing after giving not less than 10-days notice in a newspaper of general circulation in the City of Baltimore.
(xii) The ordinance enacted pursuant to this subsection, if such bonds constitute debt of the Mayor and City Council of Baltimore under Article XI, § 7 of the Maryland Constitution, shall be submitted to the legal voters of the City of Baltimore at the time and place specified therein. Such ordinance shall become effective only if it is approved by the majority of the votes cast at the time and place specified in such ordinance.
(iii) Except as required by subparagraph (ii) of this paragraph, any ordinance or resolution enacted or adopted in furtherance of the ordinance enacted pursuant to this subsection, the bonds, the designation of a special taxing district, or the levy of a special ad valorem tax or special tax shall not be subject to any referendum.
(iv) The ordinance authorizing the bonds required under this subsection, any ordinance or resolution enacted or adopted in furtherance of the required ordinance, the bonds, the designation of a special taxing district, or the levy of a special ad valorem tax or special tax shall be subject to the request of the landowners as specified under subsection (c)(1) of this section.
(6) The special fund, any sinking fund established to provide for the payment of the principal of or interest on any bonds issued by the Mayor and City Council of Baltimore under the provisions of this section and any proceeds of the sale of any such bonds may be invested by the fiscal officer of the Mayor and City Council of Baltimore having custody of such funds, pending the expenditure thereof, in the manner prescribed under the provisions of Article 95, § 22 of the Annotated Code, as amended, replaced or supplemented from time to time, and any applicable investment policy adopted by the Board of Finance.
(h) Tax exemption.
The principal amount of the bonds, the interest payable on the bonds, their transfer, and any income derived from the transfer, including any profit made in the sale or transfer of the bonds, shall be exempt from taxation by the State and by the counties and municipal corporations of the State.
(i) Form; Tenor; Sale.
(1) All bonds may be in bearer form or in coupon form or may be registrable as to principal alone or as to both principal and interest. Each of the bonds shall be deemed to be a security as defined in § 8-102 of the Commercial Law Article of the Annotated Code, as amended, replaced, or supplemented from time to time, whether or not it is either one of a class or series or by its terms is divisible into a class or series of instruments.
(2) All bonds shall be signed manually or in facsimile by the Mayor of Baltimore, and the seal of the Mayor and City Council of Baltimore shall be affixed to the bonds and attested by the custodian of the city seal, manually or by facsimile. If any officer whose signature or countersignature appears on the bonds ceases to be such officer before delivery of the bonds, the officer's signature or countersignature shall nevertheless be valid and sufficient for all purposes the same as if the officer had remained in office until delivery.
(3) All bonds shall mature not later than 40 years from their date of issuance.
(4)
(5) All bonds shall be sold in the manner, either at public or private sale, and upon the terms as the Mayor and City Council of Baltimore by ordinance (or if authorized in the ordinance authorizing such bonds, the Board of Finance by resolution) deems best. Any contract for the acquisition of property may provide that payment shall be made in bonds.
(j) Bonds as legal investments, etc.
Bonds issued under this section are securities:
(3) in which all public officers and public bodies of the State and its political subdivisions, all insurance companies, state banks and trust companies, national banking associations, savings banks, savings and loan associations, investment companies, executors, administrators, trustees, and other fiduciaries may properly and legally invest funds, including capital in the control or belonging to them; and
(4) which may properly and legally be deposited with and received by any State or county officer or any agency or political subdivision of the State for any purpose for which the deposit of bonds or obligations of the State is now or may hereafter be authorized by law.
(k) Special tax.
(5) As an alternative to levying ad valorem taxes under this section, the Mayor and City Council of Baltimore may levy special taxes on property in a special taxing district to cover the cost of infrastructure improvements.
(6) In determining the basis for and amount of the tax, the cost of an infrastructure improvement may be calculated and levied:
(iii) equally per front foot, lot, parcel, dwelling unit, or square foot;
(iv) according to the value of the property as determined by the Mayor and City Council of Baltimore, with or without regard to improvements on the property; or
(iii) in any other reasonable manner that results in fairly allocating the cost of the infrastructure improvements.
(3) The Mayor and City Council of Baltimore may provide by ordinance for:
(i) a maximum amount to be assessed with respect to any parcel of property located within a special taxing district;
(ii) a tax year or other date after which no further special taxes under this section shall be levied or collected on a parcel; and
(iii) the circumstances under which the special tax levied against any parcel may be increased, if at all, as a consequence of delinquency or default by the owner of that parcel or any other parcel within the special taxing district.
(7) The Mayor and City Council of Baltimore by ordinance may establish procedures allowing for the prepayment of special taxes under this section and may provide for exemptions, deferrals, and credits.
(9) Special taxes levied under this subsection shall be collected and secured in the same manner as general ad valorem taxes unless otherwise provided in the ordinance or resolution and shall be subject to the same penalties and the same procedure, sale, and lien priority in case of delinquency as is provided for general ad valorem taxes.
(l) Consent of governing body.
Before the Mayor and City Council of Baltimore may designate an area wholly or partly within any county or municipal corporation as a special taxing district, the governing body of such county or municipal corporation must give its consent to the designation.
(m) No pledge of full faith and credit.
Bonds issued under this section are a special obligation of the Mayor and City Council of Baltimore and may not constitute a general obligation debt of the Mayor and City Council of Baltimore or a pledge of the Mayor and City Council of Baltimore's full faith and credit or taxing power.
(n) Required contract disclosures.
A contract to sell real property within a special taxing district must disclose to the buyer any special assessment, special tax, or other fee or charge for which the buyer would be liable due to the special taxing district. A seller's failure to provide the disclosure required under this subsection renders the contract voidable at the option of the buyer before the date of settlement.
(o) Liens on property.
A lien attaches to property within a special taxing district to the extent of that property owners' obligation under any special taxing district financing. Before any bonds are issued, a declaration encumbering all real property located in the special taxing district to the extent of such financing shall be recorded in the land records of Baltimore City and have the same priority as City taxes under State and City law.
(p) City property leased to another.
Whenever the Mayor and City Council of Baltimore, as lessor, leases its property within the special taxing district, the property shall be assessed and taxed in the same manner as privately owned property, and the lease or contract shall provide that the lessee shall pay taxes or payments in lieu of special taxes upon the assessed value of the entire property and not merely the assessed value of the leasehold interest.
(q) Refunding bonds.
(1) The Mayor and City Council of Baltimore, acting by and through the Board of Finance thereof, is hereby authorized and empowered to issue its bonds for the purpose of refunding any bonds authorized to be issued under the provisions of this section by payment at maturity or the purchase or redemption of bonds in advance of maturity. The validity of any refunding bonds shall in no way be dependent upon or related to the validity or invalidity of the bonds being refunded. Such refunding bonds may be issued by the Mayor and City Council of Baltimore, acting by and through the Board of Finance thereof, for the purpose of providing it with funds to pay any of its outstanding bonds authorized to be issued under the provisions of this section at maturity, to purchase in the open market any of its outstanding bonds authorized to be issued under the provisions of this subsection prior to their maturity, to redeem prior to their maturity any outstanding bonds which are, by their terms, redeemable, to pay interest on any outstanding bonds prior to their payment at maturity or purchase or redemption in advance of maturity, or to pay any redemption or purchase premium in connection with the refunding of any of its outstanding bonds authorized to be issued under the provisions of this subsection.
(2) Any refunding bonds authorized to be issued and sold under the provisions of this section may be issued for the public purpose of:
(i) realizing savings to Baltimore City in the aggregate cost of debt service on either a direct comparison or present value basis; or
(ii) debt restructuring that:
1. in the aggregate effects such a reduction in the cost of debt service; or
2. is determined by the Board of Finance or the Mayor and City Council of Baltimore to be in the best interest of Baltimore City, to be consistent with Baltimore City's long-term financial plan, and to realize a financial objective of Baltimore City, including, without limitation, improving the relationship of debt service to a source of payment such as taxes, assessments, or other charges.
(2) Any refunding bonds authorized to be issued and sold under the provisions of this section may be issued in whatever principal amount shall be required to achieve the purpose for the issuance of the refunding bonds, which amount may be in excess of the principal amount of the bonds refunded or the maximum principal amount of bonds authorized to be issued under subsection (g)(2)(i) of this section.
(3) Any refunding bonds authorized to be issued and sold under the provisions of this section may be issued to mature on such dates and in such amounts as the Board of Finance may determine; provided that the entire principal amount represented by the refunding bonds shall be discharged not more than 40 years from the date of issuance of the bonds being refunded.
(4) Any refunding bonds authorized to be issued and sold under the provisions of this section may be sold at public sale by the solicitation of competitive bids or at private (negotiated) sale without advertisement or solicitation of competitive bids, for a price or prices which may be at, above, or below the par value of the refunding bonds, as determined by resolution of the Board of Finance of the Mayor and City Council of Baltimore. If the Board of Finance determines to sell the refunding bonds at public sale, the refunding bonds shall be sold to the highest responsible bidder or bidders therefor after due notice of such sale, but the Mayor and City Council of Baltimore, acting by and through the Board of Finance thereof, shall have the right to reject any or all bids therefor for any reason.
(5) Any refunding bonds authorized to be issued and sold under the provisions of this section shall bear interest at such rate or rates as may be determined by the Board of Finance of the Mayor and City Council of Baltimore, which rate or rates may be fixed or variable or as determined by a method approved by the Board of Finance, and such interest shall be payable at such time or times as may be determined by the Board of Finance.
(6) The proceeds of the sale of any refunding bonds authorized to be issued and sold under the provisions of this section, after the payment of issuance costs relating thereto, shall be set aside by the Mayor and City Council of Baltimore as a separate trust fund to be used solely for the purposes stated in this subsection.
(7) Except as otherwise provided in this subsection, the powers granted in, the limitations and obligations imposed by, and the procedures specified in this section with respect to the issuance of bonds shall be applicable to the issuance of refunding bonds.
(8) Any refunding bonds authorized to be issued and sold under the provisions of this section shall not be subject to any debt policy limitation that may from time to time be established by the Mayor and City Council of Baltimore.
(r) Powers supplemental.
The powers granted under this section shall be regarded as supplemental and additional to powers conferred by other laws, and may not be regarded as in derogation of any powers now existing.
(s) Liberal construction.
This section, being necessary for the welfare of the City of Baltimore and of its residents, shall be liberally construed to effect the purpose stated in subsection (a)(2) of this section.
(t) In addition to the powers in this section, the Mayor and City Council of Baltimore may use the authority granted to a political subdivision for tax increment financing in a sustainable community as provided for in Title 12, Subtitle 2 of the Economic Development Article of the Annotated Code of Maryland.
(u) In addition to the powers in this section, the Mayor and City Council of Baltimore may use the authority granted to a political subdivision for tax increment financing in a Regional Institution Strategic Enterprise zone as provided for in Title 12, Subtitle 2 of the Economic Development Article of the Annotated Code of Maryland.