(a) Before it sells any bonds, the Department and the county shall enter
into an agreement as required by this section.
(b) The agreement shall specify that:
(1) The bonds to be issued on behalf of the county will be repaid, with
interest, within 15 years after their date of issue;
(2) Each issue of bonds on behalf of the county shall be approved by
resolution of the Board of Public Works before they are issued;
(3) Unless the county elects to deposit the amount with the State
Comptroller under item (4) of this subsection, and except as provided
in § 3-104 of this title, the State Comptroller may withhold and
deposit money to the credit of a sinking fund maintained to pay the
principal of and interest on the bonds from funds allocable to the
county under Title 8, Subtitle 4 of this article, after first providing
for sinking fund requirements on outstanding and unpaid county highway
construction bonds issued pursuant to Chapter 657 of the Laws of 1953,
until an amount equal to the debt service payable in the current fiscal
year and the next succeeding fiscal year is accumulated and,
thereafter, an amount equal to debt service on the bonds in the
succeeding fiscal year, but no part of the funds that have been
previously pledged for debt service on outstanding and unpaid bonds of
the county, as provided in Title 8, Subtitle 4, may be withheld;
(4) In any year in which any bonds covered by the agreement are outstanding
and unpaid, the county may make an annual levy on its taxable basis in
the rate and amount sufficient to provide a sum equal to the amount to
be withheld by the State Comptroller, as provided in item (3) of this
subsection, in which event the State Comptroller may not withhold any
more of the highway user revenues of the county than necessary to
assure payment of the principal of and interest on the bonds in the
current fiscal year and the next succeeding fiscal year;
(5) At regular intervals, the State Comptroller shall pay from the sinking
fund to the Department amounts sufficient to pay the principal of and
interest on the bonds; and
(6) The county shall use and invest its share of the proceeds of the bonds
within the parameters established by the Department and take, or
refrain from taking, such other and further actions as may be required
of it by the Department to maintain the exemption from federal income
taxation of interest on the bonds.
(c) If a county violates its agreement with the Department in a manner that
causes the bonds to lose their tax-exempt status, the Department may
prohibit the county from participating in the Department's county bond
program for 3 years from the date the violation is discovered.
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