Delaware Code Title 29 Sec. 7422 – Limitations on debt and other obligations
(a) For the purposes of this section:
(1) “Aggregate maximum annual payments” on all tax supported obligations and all Transportation Trust Fund debt obligations outstanding, plus certain lease obligations as described in subsection (c) of this section, means the maximum payments due with respect to all such obligations in any 1 fiscal year. In any case where the terms of any such obligation include limitations on the incurrence of additional debt, the determination of maximum annual payments with respect to such obligation shall be determined consistently with those terms.
(2) a. “Tax supported obligations of the State” means all of the following:
1. All obligations of the State or any agency or authority thereof to which the State’s full faith and credit is pledged to pay directly or by guarantee, provided that any such guaranteed obligations shall be included only to the extent any such obligations are in default.
2. All obligations of the State or any agency or authority thereof extending beyond 1 year with respect to the lease, occupancy, or acquisition of property which are incurred in connection with debt financing transactions, such as certificates of participation, and which are payable from taxes, fees, permits, licenses, and fines imposed or approved by the General Assembly.
b. “Tax supported obligations of the State” do not include any of the following:
1. Obligations incurred to acquire a like principal amount of full faith and credit obligations issued by a local school district to the extent such local school district obligations are not in default.
2. Any obligations of the Delaware Transportation Authority.
3. Any tax or other revenue anticipation notes or bonds of the State.
4. Any obligations to the extent that the debt service with respect thereto is reasonably expected to be offset, as determined by the Secretary of Finance, by lease payments, user fees, federal grants, or other payments from some source other than the General Fund. Such payments must be used expressly for the purpose of paying such debt service.
5. Obligations incurred to acquire a like principal amount of promissory notes or bonds issued by Delaware Technical and Community College and secured by the non-appropriated funds held in the Community College Infrastructure Fund, under subchapter II, Chapter 91 of Title 14, as certified to the Secretary of Finance by the Chair of the Board of Trustees, in a form approved by the Secretary of Finance, to the extent such notes or bonds of the College are not in default.
(3) “Transportation Trust Fund debt obligations” means all debt obligations of the Delaware Transportation Authority, including all obligations extending beyond 1 year with respect to the lease, occupancy, or acquisition of property which are incurred in connection with debt financing transactions, such as certificates of participation, and which in any case are payable from the Transportation Trust Fund. Transportation Trust Fund debt obligations do not include any obligations to the extent that the debt service with respect thereto is reasonably expected to be offset, as determined by the Secretary of Finance, by lease payments, user fees, federal grants, or other payments from some nonstate source.
Terms Used In Delaware Code Title 29 Sec. 7422
- Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
- Appropriation: The provision of funds, through an annual appropriations act or a permanent law, for federal agencies to make payments out of the Treasury for specified purposes. The formal federal spending process consists of two sequential steps: authorization
- Bonds: means any bonds authorized to be issued by the State pursuant to an authorization act and to the payment of which the State has pledged its full faith and credit. See Delaware Code Title 29 Sec. 7401
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Joint resolution: A legislative measure which requires the approval of both chambers.
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Notes: means notes issued by the State in anticipation of the issuance of bonds authorized by an authorization act and to the payment of which the State has pledged its full faith and credit. See Delaware Code Title 29 Sec. 7401
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- State: means the State of Delaware; and when applied to different parts of the United States, it includes the District of Columbia and the several territories and possessions of the United States. See Delaware Code Title 1 Sec. 302
- User fees: Fees charged to users of goods or services provided by the government. In levying or authorizing these fees, the legislature determines whether the revenue should go into the treasury or should be available to the agency providing the goods or services.
- Year: means a calendar year, and is equivalent to the words "year of our Lord. See Delaware Code Title 1 Sec. 302
(b) The aggregate principal amount of tax supported obligations of the State which may be authorized by the State in any 1 fiscal year may not exceed 5% of the estimated net General Fund revenue for that fiscal year from all sources (not including unencumbered funds remaining at the end of the previous fiscal year) as determined by the joint resolution approved by a majority of the members elected to each House of the General Assembly and signed by the Governor in connection with the adoption of the annual budget appropriation bill for that fiscal year. Any amount of tax supported obligations which are duly authorized in any fiscal year within the limits of this subsection, and then are later deauthorized, may subsequently be reauthorized without regard to the authorization limit otherwise provided by this subsection. Any amount of tax supported obligations which were duly authorized before July 1, 1991, and which are duly deauthorized after June 30, 1991, may subsequently be reauthorized without regard to the authorization limit otherwise provided by this subsection. Obligations authorized to refund other obligations of the State shall not be subject to the limits of this subsection (b).
(c) No tax supported obligation of the State and no Transportation Trust Fund debt obligation of the Delaware Transportation Authority may be incurred if the aggregate maximum annual payments on all such outstanding obligations (plus certain lease obligations described below) will exceed 15% of the estimated aggregate General Fund revenue from all sources (not including unencumbered funds remaining at the end of the previous fiscal year), plus estimated Transportation Trust Fund revenue, in both cases for the fiscal year following the fiscal year in which such obligation is incurred, such estimated revenue as determined by the most recent projections made by the Delaware Economic and Financial Advisory Council and adjusted, if appropriate, by the fiscal impact of subsequently enacted legislation as certified by the Secretary of Finance. The lease obligations referred to in the preceding sentence shall mean: (i) All obligations of the State or any agency or authority thereof which are payable from taxes, fees, permits, licenses and fines imposed or approved by the General Assembly; and (ii) all obligations of the Delaware Transportation Authority which are payable from the Transportation Trust Fund, which in either case extend beyond 1 year and are with respect to the lease, occupancy or use of property provided that such lease obligations shall not include any obligations, the lease payments with respect to which are reasonably expected to be offset (as determined by the Secretary of Finance) by lease payments, user fees, federal grants or other payments from some nonstate source. For the purposes of this subsection, the maximum annual payments on the above-described lease obligations shall be as of the most recent date available as certified by the Secretary of Finance.
(d) No obligation to which the State’s full faith and credit is pledged may be incurred if the maximum annual debt service payable in any fiscal year on all such outstanding obligations will exceed the State’s cumulative cash balances for the fiscal year following the fiscal year in which such obligation is incurred as estimated by the Secretary of Finance. For the purposes of this subsection, there shall not be included: (i) Obligations incurred to acquire a like principal amount of full faith and credit obligations issued by a local school district to the extent such local school district obligations are not in default; (ii) obligations guaranteed by the State except to the extent such obligations are in default; (iii) general obligation bonds of the State issued prior to January 1, 1987, for the transportation related projects as certified by the Secretary of Finance; (iv) tax or other revenue anticipation notes of the State; or (v) any obligations to the extent that the debt service with respect thereto is reasonably expected to be offset (as determined by the Secretary of Finance) by lease payments, user fees, federal grants or other payments from some source other than the General Fund.
(e) There shall be attached to every bill and amendment introduced in the House of Representatives and/or in the Senate, of the General Assembly, which authorizes the incurrence of a tax supported obligation described in subsection (b) of this section, a debt statement in substantially the following form:
| Office of Secretary of Finance | Debt Limit Statement Dated | This Debt Limit Statement to be attached to ________ as required by § 7422, Title 29, Delaware Code |