Sec. 4-451. - Title.

this chapter [article] shall be known as the "Municipal Tax Increment Financing Act".

State law reference— Similar provisions, 22 Del C. § 1701.

Sec. 4-452. - Definitions.

In this chapter [article] the following terms shall have the meanings indicated, unless the context clearly indicates another or different meaning or intent.

(a)

"Act" means the Municipal Tax Increment Financing Act.

(b)

"Adjusted assessed value" means: (1) for real property that qualifies for an agricultural, horticultural or forest use under 9 Del C. § 8329, the assessed value of the property without regard to its agricultural, horticultural or forest use assessment as of January 1 of the calendar year in which the resolution creating the TIF District under section 1706 of this chapter [section 4-456 of this article] becomes effective, or (2) in the event the municipality grants an exemption from taxes, the original assessed value less the amount of taxes subject to such exemption.

(c)

"Assessed value" means the total assessed value of all real property in a TIF District subject to taxation as determined by the Assessor, with any adjustment pursuant to section 1702(b) of this chapter [section 4-452(b) of this article] taken into account.

(d)

"Assessor" shall mean the town or city assessor or, if there is no town or city assessor, the Department of Land Use for New Castle County, the Board of Assessment for Kent County and the Board of Assessment for Sussex County.

(e)

"Bonds" or "bond" means any revenue or general obligation bonds or bond, notes or note, or other similar instruments or instrument issued by any municipality pursuant to and in accordance with this chapter [article].

(f)

"Chief executive officer" means the mayor, or other chief executive officer of a municipality.

(g)

"County" or "county" means New Castle County, Kent County, or Sussex County.

(h)

"Development" includes new development, redevelopment, revitalization and renovation.

(i)

"TIF District" means an area designated by a resolution described in section 1706(a) of this chapter [section 4-456(a) of this article].

(j)

"Issuer" means a municipality that issues bonds.

(k)

"Municipality" or "municipality" means any town or city located in the State.

(l)

"Original assessed value" means the assessed value as of January 1 of the calendar year in which the resolution creating the TIF District under section 1706(a) of this chapter [section 4-456(a) of this article] becomes effective.

(m)

"Tax increment" means for any tax year the amount by which the assessed value as of January 1 preceding that tax year exceeds the original assessed value.

(n)

"Tax year" means the fiscal year for the municipality.

State law reference— Similar provisions, 22 Del C. § 1702.

Sec. 4-453. - Bonds to finance development of industrial, commercial or residential area authorized.

In addition to whatever other powers it may have, and notwithstanding any limitation of law, any municipality may borrow money by issuing and selling bonds, at any time and from time to time, for the purpose of financing the development of an industrial, commercial, or residential area. The issuance of general obligation bonds pursuant to this chapter [article] shall comply with the debt limits otherwise applicable to the issuer.

State law reference— Similar provisions, 22 Del C. § 1703.

Sec. 4-454. - Payment of bonds.

Bonds shall be payable from the special fund described in this chapter [article], and the governing body of the issuer may also pledge its full faith and credit or establish sinking funds, establish debt service reserve funds, or pledge other assets and revenues towards the payments of the principal, premium, if any, and interest, including special taxes levied and collected pursuant to Chapter 18 of this Title [22 of the Delaware Code].

State law reference— Similar provisions, 22 Del C. § 1704.

Sec. 4-455. - Application of bond proceeds.

All proceeds received from any bonds issued and sold pursuant to this chapter [article] shall be applied solely for:

(a)

The cost of purchasing, leasing, condemning, or otherwise acquiring land or other property, or an interest in them, in the designated TIF District or as necessary for a right-of-way or other easement to or from the TIF District;

(b)

Demolition and site removal;

(c)

Plans, specifications, studies, surveys, forecasts and estimates of cost and revenues;

(d)

Relocation of businesses or residents;

(e)

Installation of utilities, construction of parks, playgrounds, recreational areas, establishment of open areas and other necessary improvements, including streets roads, signage, landscaping, and pathways to, from, or within the TIF District, parking, lighting and other facilities;

(f)

Maintenance of utilities, parks, playgrounds, recreational areas, open areas, and other improvements, including streets, roads, signage, landscaping, and pathways to, from, or within the TIF District, parking, lighting, and other facilities;

(g)

Construction or rehabilitation of buildings;

(h)

Reserves or capitalized interest;

(i)

Necessary costs of issuing bonds;

(j)

Permissive costs of issuing and servicing the bonds, which may include up to 0.5% of the bond issue as origination costs incurred by the municipality, and up to 2.0% of the bond debt service payments as administrative costs if administered by the municipality.

(k)

Payment of the principal, premium, if any, and interest on loans, money advanced, or any indebtedness incurred by a municipality for any of the purposes set out in this section, including the refunding of bonds previously issued under this chapter [article]; and

(l)

Any costs permitted under section 1801(c) of this Title 22 [of the Delaware Code], and for any purposes described in section 1802(b) of this Title 22 [of the Delaware Code]; provided, however, that the purposes described in section 1802(b) of this Title 22 [of the Delaware Code] shall be with reference to the designated TIF District.

State law reference— Similar provisions, 22 Del C. § 1705.

Sec. 4-456. - Conditions precedent to issuance of bonds.

Before issuing any bonds, the governing body of the issuer shall:

(a)

Designate by resolution an area within its jurisdiction as a "TIF District."

(b)

Receive from the appropriate assessor a certification as to the amount of the original assessed value.

(c)

Pledge that until the bonds have been fully paid, or thereafter, the municipal property taxes on real property within the TIF District shall be divided (and applied in the priority determined by the issuer) as follows:

(1)

That portion of the taxes which would be produced by the rate at which taxes levied each year by or for a municipality upon the original assessed value shall be allocated to and when collected paid into the funds of the taxing body in the same manner as taxes by or for the taxing body on all other property are paid.

(2)

That portion of the taxes representing the levy on the tax increment that would normally be paid to the issuer shall be paid into a special fund to be applied in accordance with the provisions of section 1708 of this chapter [section 4-458 of this article].

(3)

That portion of the taxes representing the levy on the tax increment that would normally be paid to a taxing body other than the issuer shall be allocated to and, when collected, paid into the funds of such taxing body in the same manner as taxes by or for the taxing body on all property are paid, or any other manner that public agencies so determine (school districts, etc.); provided, however, if such taxing body has agreed pursuant to section 1709 of this chapter [section 4-459 of this article] that such taxes shall be paid into a special fund created in accordance with section 1707 of this chapter [section 4-457 of this article], then such taxes shall be paid into such special fund.

State law reference— Similar provisions, 22 Del C. § 1706.

Sec. 4-457. - Resolution creating special fund.

The governing body of any municipality may adopt a resolution creating a special fund with respect to a TIF District, even though no bonds authorized by this chapter [article] have been issued by such municipality with respect to that TIF District or are then outstanding. The taxes allocated to such special fund by section 1706(c)(2) or (3) of this chapter [section 4-456(c)(2) or (3) of this article] shall thereafter be paid over to such special fund, as long as such resolution remains in effect.

State law reference— Similar provisions, 22 Del C. § 1707.

Sec. 4-458. - Uses of special fund; issuance of general obligation bond.

(a)

Uses of special fund when no bonds outstanding. When no bonds authorized by this chapter [article] are outstanding with respect to a TIF District and the governing body of the municipality so determines, moneys in the special fund for that TIF District created pursuant to section 1707 of this chapter [section 4-457 of this article] may be:

(1)

Used for any of the purposes described in section 1705 of this chapter [section 4-455 of this article] for which bond proceeds could be used;

(2)

Accumulated for payment of debt service on bonds subsequently issued under this chapter [article];

(3)

Used to pay or to reimburse the municipality for debt service which the municipality is obligated to pay or has paid (whether such obligation is general or limited) on bonds issued by the municipality, or any agency, department, or political subdivision thereof, the proceeds of which have been used for any of the purposes specified in section 1705 of this chapter [section 4-455 of this article]; or used to pay or reimburse any development loans; or

(4)

Paid to the municipality to provide funds to be used for any legal purpose as may be determined by the municipality.

(b)

Restrictions on use of special funds. When any bonds authorized by this chapter [article] are outstanding with respect to a TIF District and the governing body of the municipality so determines, moneys in the special fund for that TIF District created pursuant to section 1707 of this chapter [section 4-457 of this article] may be used as provided in subsection (a) of this section in any fiscal year by the municipality, but only to the extent that:

(1)

The amount in such special fund exceeds the unpaid debt service payable on such bonds in such fiscal year and is not restricted so as to prohibit the use of such moneys;

(2)

Such use is not prohibited by the ordinance authorizing the issuance of such bonds; and

(3)

To the extent not prohibited by bond or loan covenants.

State law reference— Similar provisions, 22 Del C. § 1708.

Sec. 4-459. - Agreements to pay revenue from taxes on tax increment into special fund.

A county or municipality, which is not the issuing body, may pledge, by written agreement, that some or all of its property taxes levied on the tax increment shall also be paid into a special fund created pursuant to section 1707 of this chapter [section 4-457 of this article]. Such agreement shall be between the governing bodies of the issuing municipality and the county or another municipality shall run to the benefit of and be enforceable on behalf of any bondholder.

State law reference— Similar provisions, 22 Del C. § 1709.

Sec. 4-460. - Ordinance authorizing bonds.

Mandatory provisions. In order to implement the authority conferred upon it by this chapter [article] to issue bonds, the governing body of any municipality shall adopt an ordinance which:

(1)

Specifies and describes the proposed undertaking and states that it has complied with section 1706 of this chapter [section 4-456 of this article];

(2)

Specifies the maximum rate or rates of interest the bonds are to bear.

Additional provisions. The resolution described in section 1707 of this chapter [section 4-457 of this article] may itself specify and prescribe, or may authorize its finance board or department, by resolution, or its chief executive officer, by executive order, to specify and prescribe any of the following as it deems appropriate to effect the financing of the proposed undertaking:

(3)

The actual principal amount of the bonds to be issued;

(4)

The actual rate or rates of interest the bonds are to bear;

(5)

The manner in which and the terms upon which the bonds are to be sold;

(6)

The manner in which and the times and places that the interest on the bonds is to be paid;

(7)

The time or times that the bonds may be executed, issued and delivered;

(8)

The form and tenor of the bonds and the denominations in which the bonds may be issued;

(9)

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 chapter [article];

(10)

Provisions pursuant to which any or all of the bonds may be called for redemption prior to their stated maturity dates; or

Such other provisions not inconsistent with this chapter [article] as shall be determined by such legislative body to be necessary or desirable to effect the financing of the proposed undertaking.

State law reference— Similar provisions, 22 Del C. § 1710.

Sec. 4-461. - Exemption of bonds from taxation.

The principal amount of the bonds, the interest payable thereon, their transfer, and any income derived therefrom, including any profit made in the sale or transfer thereof, shall be exempt from taxation by the state and by the several counties and municipalities of this state.

State law reference— Similar provisions, 22 Del C. § 1711.

Sec. 4-462. - Nature and incidents of bonds.

(a)

Form of bond; deemed "securities". All bonds shall be in fully registered form. Each of the bonds shall be deemed to be a "security" within the meaning of section 8-102 of Title 6 of the Delaware Code, whether or not it is either one or a class or series or by its terms is divisible into a class or series of instruments.

(b)

Signing and sealing. All bonds shall be signed manually or in facsimile by the chief executive officer of the issuer, and the seal of the issuer shall be affixed thereto and attested by the clerk or other similar administrative officer of the issuer. If any officer whose signature or countersignature appears on the bonds ceases to be such officer before delivery of the bonds, his or her signature or countersignature shall nevertheless be valid and sufficient for all purposes the same as if he or she had remained in office until delivery.

(c)

Maturity. All bonds shall mature not later than 30 years from their date of issuance.

(d)

Sale. All bonds shall be sold in such manner, either at public or private sale and upon such terms as the governing body of the issuer deems best. Any contract for the acquisition of property may provide that payment shall be made in bonds.

(e)

Bonds issued are securities. Bonds issued under this chapter [article] are securities 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 their control or belonging to them.

State law reference— Similar provisions, 22 Del C. § 1712.

Sec. 4-463. - Taxation of leased property in TIF District.

Whenever the municipality, as lessor, leases its property within the TIF 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 taxes upon the assessed value of the entire property and not merely the assessed value of the leasehold interest.

State law reference— Similar provisions, 22 Del C. § 1713.

Sec. 4-464. - TIF District consistency with certified comprehensive plan.

The use of lands in a TIF District shall be consistent with the Comprehensive Plan for the area as certified pursuant to 29 Del. C. § 9103(f).

State law reference— Similar provisions, 22 Del C. § 1714.

Sec. 4-465. - Construction of article.

this chapter [article], being necessary for the welfare of the state and its residents, shall be liberally construed to effect the purpose of this chapter [article].

State law reference— Similar provisions, 22 Del C. § 1715.