§ 31-108. Authority bonds.

(a)

(1)

The Authority may at any time and from time to time issue bonds for any corporate purpose.

(2)

The bonds of each issue shall be payable solely out of revenues of the Authority, including, without limitation:

(A)

Principal and interest on Authority loans and education loans;

(B)

Payments by lending institutions, participating institutions, banks, insurance companies or others pursuant to letters of credit or purchase agreements;

(C)

Investment earnings from funds or accounts maintained pursuant to a bond resolution or trust agreement;

(D)

Insurance proceeds;

(E)

Loan funding deposits;

(F)

Proceeds of sales of education loans;

(G)

Proceeds of refunding bonds; and

(H)

Other fees, charges or revenues of the Authority.

(3)

Bonds shall be authorized by a bond resolution of the Authority and shall:

(A)

Bear the date or dates, and mature at a time or times whether as serial bonds or as term bonds or both, not exceeding the year following the last year in which the final payment is due on any education loan made from the proceeds of such bonds, or thirty (30) years from their respective dates of issue, whichever is sooner;

(B)

Bear interest at a rate or rates determined by the Authority;

(C)

Be payable at a time or times, in the denominations and form, either coupon or registered or both, and carry the registration and privileges as to conversion and for the replacement of mutilated, lost, or destroyed bonds as the Authority may establish;

(D)

Be deemed a "security" within the meaning of Section 8-102 of the Commercial Law Article of the Annotated Code of Maryland, 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 and negotiable for all purposes notwithstanding payment from a limited source, notwithstanding any other law;

(E)

Be payable in lawful money of the United States or in checks designated in such lawful money at a designated place;

(F)

Be subject to the terms and redemption that the bond resolution provides;

(G)

Be executed by the manual or facsimile signatures of the officers of the Authority designated by the Authority; and

(H)

Be sold in the manner and upon the terms determined by the Authority including private (negotiated) sale and be exempt from the provisions of Sections 8-206 and 8-108 of the State Finance and Procurement Article.

(4)

Pending preparation of the definitive bonds, the Authority may issue interim receipts or certificates which shall be exchanged for such definitive bonds.

(b)

Any bond resolution may contain provisions, which shall be a part of the contract with the holders of the bonds to be authorized, as to:

(1)

Pledging or assigning the revenues derived from the Authority loans and education loans with respect to which such bonds are to be issued;

(2)

The fees and other charges to be collected and the sums to be raised in each year thereby, and the use, investment, and disposition of such sums;

(3)

The setting aside of loan funding deposits, debt service reserves, capitalized interest accounts, cost of issuance accounts and sinking funds, and the regulation, investment, and disposition thereof;

(4)

Limitations on the use of the education loans;

(5)

Limitations on the purpose to which or the investments in which the proceeds of sale of any issue of bonds then or thereafter to be issued may be applied;

(6)

Limitations on the issuance of additional bonds, the terms upon which additional bonds may be issued and secured, the terms upon which additional bonds may rank on a parity with, or be subordinate or superior to, other bonds;

(7)

The refunding or refinancing of outstanding bonds;

(8)

The procedure, if any, by which the terms of any contract with bondholders may be altered or amended and the amount of bonds the holders of which must consent thereto, and the manner in which consent shall be given;

(9)

Defining the acts or omissions which shall constitute a default in the duties of the Authority to holders of its obligations and providing the rights or remedies of such holders in the event of a default;

(10)

Providing for guarantees, pledges or endowments, letters of credit, property or other security, or insurance for the benefit of the holders of the bonds; and

(11)

Any other matter relating to the bonds which the Authority determines appropriate.

(c)

No member of the Authority nor any person executing the bonds shall be liable personally on the bonds or subject to any personal liability or accountability by reason of the issuance of the bonds.

(d)

(1)

The Authority may purchase its bonds out of any available funds and may hold, pledge, cancel, or resell the bonds subject to and in accordance with agreements with bondholders.

(2)

The Authority may refund or refinance any of its bonds.

(e)

The Authority may issue bonds for the purpose of purchasing loans from financial institutions which participate in the Federal Government's guaranteed loan program, as long as such activities conform to applicable Federal guidelines.

(Chapter 704, Laws of Md., 1986)