Sec. 7-620. Enterprise zone facility bonds authorized. Any municipality in the
state which meets the requirements for the issuance of enterprise zone facility bonds
complying with the provisions of Sections 1391 to 1397C of the Internal Revenue Code
of 1986, as amended, through its designation as an urban empowerment zone by the
Secretary of Housing and Urban Development pursuant to the Code, may issue such
bonds, provided such bonds comply with the requirements imposed by the Code, U.S.
Treasury Regulations and other federal law related to the issuance of tax-exempt bond
financing to provide funding for an enterprise zone business with qualified zone property
as defined in such law.
(P.A. 00-122, S. 1, 7.)
History: P.A. 00-122 effective May 26, 2000.
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Sec. 7-620a. Enterprise zone facility bonds to be special obligation of municipality. For the purpose of carrying out a financing authorized under sections 7-620 to
7-620e, inclusive, a municipality may issue bonds which are payable solely from and
secured by a pledge of and lien upon any or all of the income, proceeds, revenues and
property provided as security for the repayment of loans by borrowers financing enterprise zone facilities or by lenders relending bond proceeds in a "loans to lenders" program or any combination thereof as provided in the Internal Revenue Code. Bonds
issued pursuant to sections 7-620 to 7-620e, inclusive, shall be special obligations of
the municipality and shall not be payable from or charged upon any funds other than
the revenues pledged to the payment thereof, nor shall the municipality issuing the same
be subject to any liability thereon except to the extent of such pledged revenues. No
holder or holders of any bonds shall have the right to compel any exercise of the taxing
power of the municipality to pay any bonds or the interest thereon, or to enforce payment
thereon against any property of the municipality and the bonds shall not constitute a
charge, lien or encumbrance, legal or equitable, upon any property of the municipality.
The substance of such limitation shall be plainly stated on the face of each bond. Bonds
issued pursuant to sections 7-620 to 7-620e, inclusive, shall not be subject to any statutory limitation on the indebtedness of the municipality and such bonds when issued
shall not be included in computing the aggregate indebtedness of the municipality in
respect to and to the extent of any such limitation.
(P.A. 00-122, S. 2, 7.)
History: P.A. 00-122 effective May 26, 2000.
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Sec. 7-620b. Bond issuance. Proceedings. (a) Any bonds payable and secured as
provided in sections 7-620 to 7-620e, inclusive, shall be authorized by a resolution
adopted by the legislative body of the municipality, notwithstanding the provisions
of any statute, local law or charter governing the authorization and issuance of bonds
generally by such municipality. Such bonds shall: (1) Be issued and sold in such manner,
bear interest at such rate or rates, including variable rates, as determined in the proceedings authorizing the issuance of the bonds; (2) provide for the payment of interest on
such dates, whether before or at maturity; (3) be issued at, above or below par; (4) mature
at such time or times not exceeding thirty years from their date; (5) have such rank or
priority, be payable in such medium of payment, be issued in such form, including,
without limitation, registered or book-entry form, carry such registration and transfer
privileges and be made subject to purchase or redemption before maturity at such price
or prices and under such terms and conditions, including the condition that such bonds
be subject to purchase or redemption on the demand of the owner thereof, and contain
such other terms and particulars as the legislative body of the municipality or the board,
officers or agency delegated such authority by the legislative body of the municipality
shall determine.
(b) The proceedings under which bonds are authorized to be issued may, subject to
the provisions of the general statutes, contain any or all of the following: (1) Provisions
respecting custody of the proceeds from the sale of the bonds, including any requirements that such proceeds be held separate from or not be commingled with other funds
of the municipality; (2) provisions for the investment and reinvestment of bond proceeds
until such proceeds are used to pay project costs and for the disposition of any excess
bond proceeds or investment earnings thereon; (3) provisions for the execution of reimbursement agreements, or similar agreements, in connection with credit facilities, including, but not limited to, letters of credit or policies of bond insurance, remarketing
agreements, debt service reserve fund surety bonds and interest rate swap agreements;
(4) provisions for the collection, custody, investment, reinvestment and use of the
pledged revenues or other receipts, funds or moneys pledged for payment of the bonds
as provided in sections 7-620 to 7-620e, inclusive; (5) provisions regarding the establishment and maintenance of reserves, sinking funds and any other funds and accounts and
the regulation and disposition thereof, including requirements that any such funds and
accounts be held separate from or not be commingled with other funds of the municipality; (6) covenants for the establishment or maintenance requirements with respect to
facilities and properties; (7) provisions for the issuance of additional bonds on a parity
with bonds issued prior to the issuance of such additional bonds, including establishment
of coverage requirements, if appropriate, with respect to such bonds; (8) provisions
regarding the rights and remedies available to the bond owners or any trustee under any
contract, loan agreement, document, instrument or trust indenture in case of a default,
including the right to appoint a trustee to represent their interests upon occurrence of
any event of default, as defined in any such default proceedings, provided if any bonds
are secured by a trust indenture, the respective owners of such bonds shall have no
authority except as set forth in such trust indenture to appoint a separate trustee to
represent them; and (9) other provisions or covenants of like or different character from
the foregoing which are consistent with sections 7-620 to 7-620e, inclusive, and which
the legislative body of the municipality or the board, officers or agency delegated such
authority by the legislative body of the municipality shall determine in such proceedings
are necessary, convenient or desirable in order to better secure the bonds, or will tend to
make the bonds more marketable, and which are in the best interests of such municipality.
(c) Any provisions which may be included in proceedings authorizing the issuance
of bonds under sections 7-620 to 7-620e, inclusive, may be included in an indenture of
trust duly approved in accordance with sections 7-620 to 7-620e, inclusive, which secures the bonds, and in such case the provisions of such indenture shall be deemed to
be a part of such proceedings as though they were expressly included therein. Any pledge
made by a municipality for the issuance of bonds hereunder shall be valid and binding
from the time when the pledge is made, and any revenues or other receipts, funds or
moneys so pledged and thereafter received by a municipality shall be subject immediately to the lien of such pledge without any physical delivery thereof or further act. The
lien of any such pledge shall be valid and binding as against all parties having claims
of any kind in tort, contract or otherwise against the municipality, irrespective of whether
such parties have notice of such lien. Neither the resolution nor any other instrument
by which a pledge is created need be recorded. The municipality may enter into a trust
indenture with a corporate trustee, which may be any trust company or bank having the
powers of a trust company within or without the state, containing such provisions for
protecting and enforcing the rights and remedies of the bond owners as may be reasonable and proper and not in violation of law, including covenants setting forth the duties
of the municipality in relation to the exercise of its powers pursuant to sections 7-620
to 7-620e, inclusive, and the custody, safeguarding and application of all moneys. The
municipality may provide by such trust indenture for the payment of the pledged revenues or other receipts, funds or moneys to the trustee under such trust indenture or to
any other depository, and for the method of disbursement thereof, with such safeguards
and restrictions as it may determine. All expenses incurred in carrying out such trust
indenture may be treated as project costs. As used in sections 7-620 to 7-620e, inclusive,
"bonds" means any bonds, including refunding bonds, notes, bond anticipation notes,
interim certificates, debentures or other obligations of indebtedness.
(P.A. 00-122, S. 3, 7.)
History: P.A. 00-122 effective May 26, 2000.
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Sec. 7-620c. Public purpose. It is hereby determined that the powers conferred in
sections 7-620 to 7-620e, inclusive, are in all respects for the benefit of the people of
the state and for the improvement of their health, safety, welfare, comfort and security
and that the purposes of sections 7-620 to 7-620e, inclusive, are public purposes and
that a municipality will be performing an essential governmental function in the exercise
of the powers conferred upon it by sections 7-620 to 7-620e, inclusive.
(P.A. 00-122, S. 4, 7.)
History: P.A. 00-122 effective May 26, 2000.
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Sec. 7-620d. Interest income from bonds. A municipality may issue bonds the
interest on which may be includable under the Internal Revenue Code, as from time to
time amended, in the gross income of the holders of such bonds to the same extent and
in the same manner that interest on bills, bonds, notes or other obligations of the United
States is includable in the gross income of the holders thereof under said Code, for the
purpose of financing certain costs of issuance or other costs related to providing tax-exempt bond financing for funding an enterprise zone business with qualified zone
property as set forth in section 7-620, based upon a finding by the board, officers or
agency delegated the authority to issue and sell the bonds that the issuance of such bonds
on a taxable basis is in the best interest of the municipality and in furtherance of the
purposes of sections 7-620 to 7-620e, inclusive.
(P.A. 00-122, S. 5, 7.)
History: P.A. 00-122 effective May 26, 2000.
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Sec. 7-620e. Bonds made securities. The bonds of a municipality issued under
sections 7-620 to 7-620e, inclusive, are hereby made securities in which all public officers and bodies of this state and all municipalities and municipal subdivisions, all insurance companies and associations and other persons carrying on an insurance business,
all banks, bankers, trust companies, savings banks and savings associations, including
savings and loan associations, investment companies and other persons carrying on a
banking business, all administrators, guardians, executors, trustees and other fiduciaries,
and all other persons whatsoever who are now or may hereafter be authorized to invest
in bonds or in other obligations of the state, may properly and legally invest funds,
including capital, in their control or belonging to them. The bonds are also hereby made
securities which may be deposited with and may be received by all public officers and
bodies of the state and all municipalities for any purpose for which the deposit of bonds
or other obligations of the state is now or may hereafter be authorized. Whether or not
the bonds are of such form and character as to be negotiable instruments under the terms
of the Uniform Commercial Code, the bonds are hereby made negotiable instruments
within the meaning of and for all purposes of the Uniform Commercial Code, subject
only to the provisions of the bonds for registration.
(P.A. 00-122, S. 6, 7.)
History: P.A. 00-122 effective May 26, 2000.
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