HARRY HUGHES, Governor

1057

8-301. CONTRACT TO SPEND LOAN PROCEEDS.

(A)  APPROVAL OF BOARD OF PUBLIC WORKS.

EXCEPT AS PROVIDED IN SUBSECTION (B) OF THIS SECTION OR IN
OTHER LAW, A CONTRACT TO SPEND THE PROCEEDS OF A LOAN THAT HAS
BEEN AUTHORIZED BY ANY ACT OF THE GENERAL ASSEMBLY MAY NOT BE
EXECUTED UNTIL THE BOARD OF PUBLIC WORKS APPROVES THE CONTRACT.

(B)  EXEMPTIONS.

APPROVAL BY THE BOARD OF PUBLIC WORKS IS NOT REQUIRED IF THE
ACT MERELY AUTHORIZES A COUNTY OR MUNICIPAL CORPORATION TO BORROW
MONEY AND NO STATE FUNDS ARE INVOLVED.

REVISOR'S NOTE: Subsection (a) of this section is new
language derived without substantive change from the
second sentence of former Art. 78A, § 1.

Subsection (b) of this section is new language added
to limit the broad reference to "any act of the
General Assembly". This addition reflects that the
General Assembly sometimes authorizes a county or
municipal corporation to incur a debt and, in fact,
before the 1982 amendment of Md. Constitution, Art.
XI, § 7, Baltimore City could not incur a debt unless
"such debt or credit be authorized by an Act of the
General Assembly". However, in practice, the Board of
Public Works has not considered contracts to spend the
proceeds of a loan when State moneys are not involved.

8-302. BONDS TO BE CONSIDERED INVESTMENT SECURITIES.

(A)  "BOND" DEFINED.

IN THIS SECTION, "BOND" MEANS AN OBLIGATION OF THE STATE OR
OF ANY OF ITS UNITS OR INSTRUMENTALITIES.

(B)  EFFECT OF COMPLIANCE WITH COMMERCIAL LAW ARTICLE.

IF A BOND OTHERWISE COMPLIES WITH THE REQUIREMENTS OF THE
COMMERCIAL LAW ARTICLE FOR INVESTMENT SECURITIES, THE BOND SHALL
BE CONSIDERED TO BE AN INVESTMENT SECURITY NOTWITHSTANDING THAT:

(1)  THE RESOLUTION OR OTHER AUTHORITY UNDER WHICH THE
BOND IS ISSUED SUBJECTS THE BOND TO AN INDENTURE OR AGREEMENT
THAT IS SEPARATE FROM THE RESOLUTION OR AUTHORITY;

(2)  THE RESOLUTION OR OTHER AUTHORITY UNDER WHICH THE
BOND IS ISSUED LIMITS PAYMENT OF PRINCIPAL AND INTEREST TO:

OR

(I) THE PROCEEDS OF LIMITED SOURCES OF REVENUE;