Substitute House Bill No. 5483
Substitute House Bill No. 5483
PUBLIC ACT NO. 98-237
AN ACT CONCERNING BONDING POWERS FOR LOCAL
ECONOMIC DEVELOPMENT AND CONCERNING PRIVATE
ACTIVITY BONDS.
Be it enacted by the Senate and House of
Representatives in General Assembly convened:
Section 1. Section 8-134 of the general
statutes is repealed and the following is
substituted in lieu thereof:
For the purpose of carrying out or
administering a redevelopment plan or other
functions authorized under this chapter, a
municipality, acting by and through its
redevelopment agency, is hereby authorized,
subject only to the limitations and procedures set
forth in this section, to issue from time to time
bonds of the municipality which are payable solely
from and secured by: (a) A pledge of and lien upon
any or all of the income, proceeds, revenues and
property of redevelopment projects, including the
proceeds of grants, loans, advances or
contributions from the federal government, the
state or other source, including financial
assistance furnished by the municipality or any
other public body pursuant to section 8-135; (b)
taxes or payments in lieu of taxes, or both, in
whole or in part, allocated to and paid into a
special fund of the municipality pursuant to the
provisions of section 8-134a, AS AMENDED BY
SECTION 2 OF THIS ACT; or (c) any combination of
the methods in subsections (a) and (b) of this
section. FOR THE PURPOSES OF A SPECIFIED PROJECT
ONLY, THE CONNECTICUT DEVELOPMENT AUTHORITY MAY,
UPON A RESOLUTION WITH RESPECT TO SUCH PROJECT
ADOPTED BY THE LEGISLATIVE BODY OF THE
MUNICIPALITY, ISSUE AND ADMINISTER BONDS WHICH ARE
PAYABLE SOLELY FROM AND SECURED BY THE PLEDGE AND
SECURITY PROVIDED FOR IN THIS SECTION SUBJECT TO
THE GENERAL TERMS AND PROVISIONS OF LAW APPLICABLE
TO THE ISSUANCE OF BONDS BY THE CONNECTICUT
DEVELOPMENT AUTHORITY, EXCEPT THAT THE PROVISIONS
OF SUBSECTION (b) OF SECTION 32-23j SHALL NOT
APPLY. Any bonds payable and secured as provided
in this section shall be authorized by a
resolution adopted by the legislative body of the
municipality, notwithstanding the provisions of
any other statute, local law or charter governing
the authorization and issuance of bonds generally
by the municipality. No such resolution shall be
adopted until after a public hearing has been held
upon such authorization. Notice of such hearing
shall be published not less than five days prior
to such hearing in a newspaper having a general
circulation in the municipality. Such bonds shall
be issued and sold in such manner; bear interest
at such rate or rates, including variable rates to
be determined in such manner as set forth in the
proceedings authorizing the issuance of the bonds;
provide for the payment of interest on such dates,
whether before or at maturity; be issued at, above
or below par; mature at such time or times not
exceeding forty years from their date in the case
of bonds issued to finance housing and facilities
related thereto or thirty years from their date in
all other cases; 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 officers delegated
such authority by the legislative body of the
municipality body shall determine. 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 and any bond anticipation
notes, 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 and
agreements for the purpose of moderating interest
rate fluctuations; (4) provisions for the
collection, custody, investment, reinvestment and
use of the pledged revenues or other receipts,
funds or moneys pledged for payment of bonds as
provided in this section; (5) provisions regarding
the establishment and maintenance of reserves,
sinking funds and any other funds and accounts as
shall be approved by the legislative body of the
municipality in such amounts as may be established
by the legislative body of the municipality 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 of 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 with respect to such
bonds as herein provided; (8) provisions regarding
the rights and remedies available to the bond
owners, note 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 that if any bonds or bond anticipation
notes are secured by a trust indenture, the
respective owners of such bonds or notes 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 this section
and which the legislative body of the municipality
determines in such proceedings are necessary,
convenient or desirable in order to better secure
the bonds or bond anticipation notes, or will tend
to make the bonds or bond anticipation notes more
marketable, and which are in the best interests of
the municipality. Any provisions which may be
included in proceedings authorizing the issuance
of bonds under this section may be included in an
indenture of trust duly approved in accordance
with this section which secures the bonds and any
notes issued in anticipation thereof, 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 the municipality 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 the
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 legislative body of the municipality
may enter into a trust indenture by and between
the municipality and a corporate trustee, which
may be any trust company or bank having the powers
of a trust company within or without the
municipality. Such trust indenture may contain
such provisions for protecting and enforcing the
rights and remedies of the bond owners and note
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 this
section 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. Such bonds shall not
be included in computing the aggregate
indebtedness of the municipality, provided, if
such bonds are made payable, in whole or in part,
from funds contracted to be advanced by the
municipality, the aggregate amount of such funds
not yet appropriated to such purpose shall be
included in computing the aggregate indebtedness
of the municipality. As used in this section,
"bonds" means any bonds, including refunding
bonds, notes, interim certificates, debentures or
other obligations.
Sec. 2. Section 8-134a of the general
statutes is repealed and the following is
substituted in lieu thereof:
Any redevelopment plan authorized under this
chapter or any proceedings authorizing the
issuance of bonds under this chapter may contain a
provision that taxes, if any, identified in such
plan or such authorizing proceedings and levied
upon taxable real OR PERSONAL property, OR BOTH,
in a redevelopment project each year, or payments
in lieu of such taxes authorized pursuant to
chapter 114, or both, by or for the benefit of any
one or more municipalities, districts, or other
public taxing agencies after the effective date of
the ordinance approving the redevelopment plan or
such BOND authorizing proceedings, as the case may
be, shall be divided as follows: (1) In each
fiscal year that portion of the taxes or payments
in lieu of taxes, or both, which would be produced
by applying the then current tax rate of each of
the taxing agencies to the total sum of the
assessed value of the taxable property in the
redevelopment project on the effective date of
such ordinance or the date of such authorizing
proceedings, as the case may be, or on any date
between such two dates which is identified in such
proceedings, shall be allocated to and when
collected shall be paid into the funds of the
respective taxing agencies in the same manner as
taxes by or for said taxing agencies on all other
property are paid; and (2) that portion of the
assessed taxes or payments in lieu of taxes, or
both, each fiscal year in excess of the amount
referred to in subdivision (1) of this section
shall be allocated to and when collected shall be
paid into a special fund of the municipality OR
THE CONNECTICUT DEVELOPMENT AUTHORITY AS ISSUER OF
SUCH BONDS to be used in each fiscal year, first
to pay the principal of and interest due in such
fiscal year on loans, moneys advanced to, or
indebtedness, whether funded, refunded, assumed,
or otherwise, incurred by such municipality OR THE
CONNECTICUT DEVELOPMENT AUTHORITY AS ISSUER OF
SUCH BONDS to finance or refinance in whole or in
part, such redevelopment project, and then, at the
option of the municipality OR THE CONNECTICUT
DEVELOPMENT AUTHORITY AS ISSUER OF SUCH BONDS, to
purchase bonds issued for the project which has
generated the increments in taxes or payments in
lieu of taxes and then, at the option of the
municipality OR THE CONNECTICUT DEVELOPMENT
AUTHORITY AS ISSUER OF SUCH BONDS, to reimburse
the provider of or reimbursement party with
respect to any guarantee, letter of credit, policy
of bond insurance, funds deposited in a debt
service reserve fund, funds deposited as
capitalized interest or other credit enhancement
device used to secure payment of debt service on
any bonds, notes or other indebtedness OF A
MUNICIPALITY OR THE CONNECTICUT DEVELOPMENT
AUTHORITY AS ISSUER OF SUCH BONDS issued pursuant
to section 8-134, AS AMENDED BY SECTION 1 OF THIS
ACT, to finance or refinance such redevelopment
project, to the extent of any payments of debt
service made therefrom. Unless and until the total
assessed valuation of the taxable property in a
redevelopment project exceeds the total assessed
value of the taxable property in such project as
shown by the last assessment list, referred to in
subdivision (1) of this section, all of the taxes
levied and collected and all of the payments in
lieu of taxes due and collected upon the taxable
property in such redevelopment project shall be
paid into the funds of the respective taxing
agencies. When such loans, advances, and
indebtedness, if any, and interest thereon, and
such debt service reimbursement to the provider of
or reimbursement party with respect to such
credits, have been paid, in full, all moneys
thereafter received from taxes or payments in lieu
of taxes, or both, upon the taxable property in
such redevelopment project shall be paid into the
funds of the respective taxing agencies in the
same manner as taxes on all other property are
paid.
Sec. 3. Section 8-192 of the general statutes
is amended by adding subsection (d) as follows:
(NEW) (d) For the purposes of carrying out or
administering a specified development plan
authorized under this chapter, the Connecticut
Development Authority may, upon a resolution with
respect to such project adopted by the legislative
body of the municipality, issue and administer
bonds which are payable solely from and secured by
the pledge and security provided for in subsection
(a) of this section subject to the general terms
and provisions of law applicable to the issuance
of bonds by the Connecticut Development Authority,
except that the provisions of subsection (b) of
section 32-23j shall not apply.
Sec. 4. Section 8-192a of the general
statutes is repealed and the following is
substituted in lieu thereof:
Any development plan authorized under this
chapter or any proceedings authorizing the
issuance of bonds under this chapter may contain a
provision that taxes, if any, identified in such
plan or such authorizing proceeding and levied
upon taxable real OR PERSONAL property, OR BOTH,
in a development project each year or payments in
lieu of such taxes authorized pursuant to chapter
114, or both, by or for the benefit of any one or
more municipalities, districts or other public
taxing agencies after adoption of the development
plan as provided by section 8-191 or such
authorizing proceedings, as the case may be, shall
be divided as follows: (a) In each fiscal year
that portion of the taxes or payments in lieu of
taxes, or both, which would be produced by
applying the then current tax rate of each of the
taxing agencies to the total sum of the assessed
value of the taxable property in the development
project on the effective date of such adoption or
the date of such authorizing proceedings, as the
case may be, or on any date between such two dates
which is identified in such proceedings, shall be
allocated to and when collected shall be paid into
the funds of the respective taxing agencies in the
same manner as taxes by or for said taxing
agencies on all other property are paid; and (b)
that portion of the assessed taxes or the payments
in lieu of taxes, or both, each fiscal year in
excess of the amount referred to in subdivision
(a) of this section shall be allocated to and when
collected shall be paid into a special fund of the
municipality OR THE CONNECTICUT DEVELOPMENT
AUTHORITY AS ISSUER OF SUCH BONDS to be used in
each fiscal year, first to pay the principal of
and interest due in such fiscal year on loans,
moneys advanced to, or indebtedness, whether
funded, refunded, assumed, or otherwise, incurred
by such municipality OR THE CONNECTICUT
DEVELOPMENT AUTHORITY AS ISSUER OF SUCH BONDS to
finance or refinance in whole or in part, such
development project, and then, at the option of
the municipality OR THE CONNECTICUT DEVELOPMENT
AUTHORITY AS ISSUER OF SUCH BONDS, to purchase
bonds issued for the project which has generated
the tax increments or payments in lieu of taxes
and then, at the option of the municipality OR THE
CONNECTICUT DEVELOPMENT AUTHORITY AS ISSUER OF
SUCH BONDS, to reimburse the provider of or
reimbursement party with respect to any guarantee,
letter of credit, policy of bond insurance, funds
deposited in a debt service reserve fund, funds
deposited as capitalized interest or other credit
enhancement device used to secure payment of debt
service on any bonds, notes or other indebtedness
issued pursuant to section 8-192, AS AMENDED BY
SECTION 3 OF THIS ACT, to finance or refinance
such development project, to the extent of any
payments of debt service made therefrom. Unless
and until the total assessed valuation of the
taxable property in a development project exceeds
the total assessed value of the taxable property
in such project as shown by the last assessment
list referred to in subdivision (a) of this
section, all of the taxes levied and collected and
all of the payments in lieu of taxes due and
collected upon the taxable property in such
development project shall be paid into the funds
of the respective taxing agencies. When such
loans, advances, and indebtedness, if any, and
interest thereon, and such debt service
reimbursement to the provider of or reimbursement
party with respect to such credit enhancement,
have been paid in full, all moneys thereafter
received from taxes or payments in lieu of taxes,
or both, upon the taxable property in such
development project shall be paid into the funds
of the respective taxing agencies in the same
manner as taxes on all other property are paid.
Sec. 5. Section 32-227 of the general
statutes is repealed and the following is
substituted in lieu thereof:
(a) For the purpose of carrying out or
administering a municipal or business development
project, (1) a municipality, acting by and through
its implementing agency, may, subject to the
limitations and procedures set forth in this
section, issue from time to time bonds of the
municipality AND (2) THE CONNECTICUT DEVELOPMENT
AUTHORITY MAY, UPON A RESOLUTION ADOPTED OF THE
LEGISLATIVE BODY OF THE MUNICIPALITY, ISSUE FROM
TIME TO TIME BONDS which, IN EITHER CASE, are
payable solely from and secured by: [(1)] (A) A
pledge of and lien upon any or all of the income,
proceeds, revenues and property of development
projects, including the proceeds of grants, loans,
advances or contributions from the federal
government, the state or other source, including
financial assistance furnished by the municipality
or any other public body pursuant to sections
32-220 to 32-234, inclusive; [(2)] (B) taxes or
payments in lieu of taxes, or both, in whole or in
part, allocated to and paid into a special fund of
the municipality OR THE CONNECTICUT DEVELOPMENT
AUTHORITY pursuant to the provisions of subsection
(c) of this section; or [(3)] (C) any combination
of the methods in [subdivisions (1)] SUBPARAGRAPHS
(A) and [(2)] (B) of this section. Any bonds
payable and secured as provided in this subsection
shall be authorized and the appropriation of the
proceeds thereof approved by AND SUBJECT TO a
resolution adopted by the legislative body of the
municipality, notwithstanding the provisions of
any other statute, local law or charter governing
the authorization and issuance of bonds and the
appropriation of the proceeds thereof generally by
the municipality. No such resolution shall be
adopted until after a public hearing has been held
upon such authorization. Notice of such hearing
shall be published not less than five days prior
to such hearing in a newspaper having a general
circulation in the municipality. [Such] ANY SUCH
bonds OF A MUNICIPALITY OR THE CONNECTICUT
DEVELOPMENT AUTHORITY shall be issued and sold in
such manner; bear interest at such rate or rates,
including variable rates; provide for the payment
of interest on such dates, whether before or at
maturity; be issued at, above or below par; mature
at such time or times not exceeding thirty years
from their date; 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 officers delegated
such authority by the legislative body of the
municipality shall determine. ANY SUCH BONDS OF
THE CONNECTICUT DEVELOPMENT AUTHORITY SHALL BE
ISSUED AND SOLD IN THE MANNER AND SUBJECT TO THE
GENERAL TERMS AND PROVISIONS OF LAW APPLICABLE TO
ISSUANCE OF BONDS BY THE CONNECTICUT DEVELOPMENT
AUTHORITY, EXCEPT THAT THE PROVISIONS OF
SUBSECTION (b) OF SECTION 32-23j SHALL NOT APPLY.
The proceedings under which bonds are authorized
to be issued may, subject to the provisions of
indenture or to any other depository agreement,
provide for the method of disbursement thereof,
with such safeguards and restrictions as it may
determine. Any pledge made by the municipality OR
THE CONNECTICUT DEVELOPMENT AUTHORITY FOR BONDS
ISSUED AS PROVIDED IN THIS SUBSECTION 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 the
municipality OR THE CONNECTICUT DEVELOPMENT
AUTHORITY shall be subject 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 OR CONNECTICUT
DEVELOPMENT AUTHORITY, 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. All expenses
incurred in carrying out such financing may be
treated as project costs. Such bonds shall not be
included in computing the aggregate indebtedness
of the municipality, provided, if such bonds are
made payable, in whole or in part, from funds
contracted to be advanced by the municipality, the
aggregate amount of such funds not yet
appropriated to such purpose shall be included in
computing the aggregate indebtedness of the
municipality. As used in this section, "bonds"
means any bonds, including refunding bonds, notes,
temporary notes, interim certificates, debentures
or other obligations. Temporary notes issued in
accordance with this subsection in anticipation of
the receipt of the proceeds of bond issues may be
issued for a period of not more than five years,
and notes issued for a shorter period of time may
be renewed by the issue of other notes, provided
the period from the date of the original notes to
the maturity of the last notes issued in renewal
thereof shall not exceed five years.
(b) For the purpose of carrying out or
administering a municipal or business development
project, a municipality or its implementing agency
may accept grants, advances, loans or other
financial assistance from the federal government,
the state or other source and may do any and all
things necessary or desirable to secure such
financial aid. To assist any project located in
the area in which it is authorized to act, any
public body, including the state, or any city,
town, borough, authority, district, subdivision or
agency of the state, may, upon such terms as it
determines, furnish service or facilities, provide
property, lend or contribute funds, and take any
other action of a character which it is authorized
to perform for other purposes. To obtain funds for
the temporary and definitive financing of any
project, a municipality or implementing agency
may, in addition to other action authorized under
this act or other law, issue its general
obligation bonds, notes, temporary notes or other
obligations secured by a pledge of the
municipality's full faith and credit. Such bonds,
notes, temporary notes and other obligations shall
be authorized in accordance with the requirements
for the authorization of such obligations
generally by the municipality and the
authorization, issuance and sale thereof shall be
subject to the limitations contained in the
general statutes, including provisions on the
limitation of the aggregate indebtedness of the
municipality. Notwithstanding the provisions of
sections 7-264, 7-378 and 7-378a, and any other
public or special act or charter or bond ordinance
or bond resolution which limits the issuance or
renewal of temporary notes issued in anticipation
of the receipt of the proceeds of bond issues to a
period of time of less than five years from the
date of the original notes or requires a reduction
in the principal amount of such notes or renewal
notes prior to the fifth anniversary of the date
of the original notes, such temporary notes may be
issued for a period of not more than five years,
and notes issued for a shorter period of time may
be renewed by the issue of other notes, provided
the period from the date of the original notes to
the maturity of the last notes issued in renewal
thereof shall not exceed five years.
(c) Any development plan authorized under
sections 32-220 to 32-234, inclusive, AS AMENDED,
or any proceedings authorizing the issuance of
bonds under said sections may contain a provision
that taxes, if any, identified in such plan or
such authorizing proceedings and levied upon
taxable real OR PERSONAL property, OR BOTH, in a
project each year or payments in lieu of such
taxes authorized pursuant to chapter 114, or both,
by or for the benefit of any one or more
municipalities, districts or other public taxing
agencies, as the case may be, shall be divided as
follows: (1) In each fiscal year that portion of
the taxes or payments in lieu of taxes, or both,
which would be produced by applying the then
current tax rate of each of the taxing agencies to
the total sum of the assessed value of the taxable
property in the project on the effective date of
such adoption or the date of such authorizing
proceedings, as the case may be, or on any date
between such two dates which is identified in such
proceedings, shall be allocated to and when
collected shall be paid into the funds of the
respective taxing agencies in the same manner as
taxes by or for said taxing agencies on all other
property are paid; and (2) that portion of the
assessed taxes or the payments in lieu of taxes,
or both, each fiscal year in excess of the amount
referred to in subdivision (1) of this subsection
shall be allocated to and when collected shall be
paid into a special fund of the municipality OR
THE CONNECTICUT DEVELOPMENT AUTHORITY to be used
in each fiscal year, first to pay the principal of
and interest due in such fiscal year on loans,
moneys advanced to, or indebtedness, whether
funded, refunded, assumed, or otherwise, incurred
by such municipality OR THE CONNECTICUT
DEVELOPMENT AUTHORITY to finance or refinance in
whole or in part, such project, and then, at the
option of the municipality OR THE CONNECTICUT
DEVELOPMENT AUTHORITY, to purchase bonds issued
for the project which has generated the tax
increments or payments in lieu of taxes and then,
at the option of the municipality OR THE
CONNECTICUT DEVELOPMENT AUTHORITY, to reimburse
the provider of or reimbursement party with
respect to any guarantee, letter of credit, policy
of bond insurance, funds deposited in a debt
service reserve fund, funds deposited as
capitalized interest or other credit enhancement
device used to secure payment of debt service on
any bonds, notes or other indebtedness issued
pursuant to this section to finance or refinance
such project, to the extent of any payments of
debt service made therefrom. Unless and until the
total assessed valuation of the taxable property
in a project exceeds the total assessed value of
the taxable property in such project as shown by
the last assessment list referred to in
subdivision (1) of this subsection, all of the
taxes levied and collected and all of the payments
in lieu of taxes due and collected upon the
taxable property in such project shall be paid
into the funds of the respective taxing agencies.
When such loans, advances, and indebtedness, if
any, and interest thereof, and such debt service
reimbursement to the provider of or reimbursement
party with respect to such credit enhancement,
have been paid in full, all moneys thereafter
received from taxes or payments in lieu of taxes,
or both, upon the taxable property in such
development project shall be paid into the funds
of the respective taxing agencies in the same
manner as taxes on all other property are paid.
(d) Notwithstanding the provisions of
subsection (a) or (b) of this section and any
other public or special act or charter or bond
ordinance or bond resolution which limits the
renewal of temporary notes issued pursuant to said
subsections in anticipation of the receipt of the
proceeds of bond issues to five years from the
date of the original notes, any municipality may
renew temporary notes in accordance with the
provisions of this section for an additional
period of not more than four years from the end of
such five-year period. The officers or board
authorized to issue the bonds or determine the
particulars of the bonds may adopt a resolution
authorizing the renewal of temporary notes for
such additional period under the following
conditions: (1) All project grant payments and
bond sale proceeds received shall be promptly
applied toward project costs or toward payment of
such temporary notes as the same shall become due
and payable or shall be deposited in trust for
such purposes; (2) no later than the end of each
period of twelve months after the end of such
five-year period a portion of such temporary notes
equal to at least one-twentieth of the
municipality's estimated cost of the project shall
be retired from funds other than project grants or
land sale proceeds or note proceeds; (3) the
interest on all temporary notes renewed after such
five-year period shall be paid from funds other
than project grants or land sale proceeds or note
proceeds; (4) the principal amount of each bond
issue when sold shall be reduced by the amounts
spent under subdivision (2) of this section, and
the principal of such bonds shall be paid in
annual instalments commencing no later than one
year from the date of issue; and (5) the maximum
authorized term of the bonds when sold shall be
reduced by not less than the number of months from
the end of such five-year period to the date of
issue. Any anticipated federal or state project
grants or land sale proceeds may be used in
computing the municipality's cost of the project.
Any municipality in which such resolution is
passed shall include in its annual budget or shall
otherwise appropriate sufficient funds to make the
payments required by subdivisions (2) and (3) of
this subsection.
Sec. 6. (NEW) (a) Two or more municipalities
may jointly issue bonds from time to time at their
discretion, subject to the approval of the
legislative body of each municipality for the
purpose of paying all or any part of the cost of
any project or activity, including acquisition of
necessary land and equipment therefor, entered
into jointly. The municipalities may issue such
types of bonds as they may determine, including,
without limiting the generality of the foregoing,
bonds payable as to principal and interest: (1)
From their revenues generally; (2) exclusively
from the income and revenues of a particular
project; or (3) exclusively from the income and
revenues of certain designated projects, whether
or not they are financed in whole or in part from
the proceeds of such bonds. Any such bonds may be
additionally secured by a pledge of any grant or
contribution from a participating municipality,
the state or any political subdivision, agency or
instrumentality thereof, any federal agency or any
private corporation, copartnership, association or
individual, or a pledge of any income or revenues
of the municipalities, or a mortgage on any
project or other property of the municipalities.
Whenever and for so long as the municipalities
have issued and have outstanding bonds pursuant to
sections 10 to 15, inclusive, of this act the
municipalities shall fix, charge and collect
rates, rents, fees and other charges. No person
executing the bonds shall be liable personally on
the bonds by reason of the issuance thereof. The
bonds and other obligations of the municipalities,
and such bonds and obligations shall so state on
their face, shall not be a debt of the state or
any political subdivision thereof except the
municipalities issuing such bonds, and no person
other than the municipalities shall be liable
thereon, nor shall such bonds or obligations be
payable out of any funds or properties other than
those of a participating municipality. Except to
the extent and for the purpose therein expressly
provided by other laws, such bonds shall not
constitute an indebtedness within the meaning of
any statutory limitation on the indebtedness of
any participating municipality. Bonds of
participating municipalities are declared to be
issued for an essential public and governmental
purpose. In anticipation of the sale of such
revenue bonds the municipalities may issue
negotiable bond anticipation notes and may renew
the same from time to time, but the maximum
maturity of any such note, including renewals
thereof, shall not exceed five years from the date
of issue of the original note. Such notes shall be
paid from any revenues of the municipalities
available therefor and not otherwise pledged, or
from the proceeds of sale of the revenue bonds of
the municipalities in anticipation of which they
were issued. The notes shall be issued in the same
manner as the revenue bonds. Such notes and the
resolution or resolutions authorizing the same may
contain any provisions, conditions or limitations
which a bond resolution of the municipalities may
contain.
(b) Bonds of the municipalities may be issued
as serial bonds or as term bonds, or the
municipalities, in their discretion, may issue
bonds of both types. Bonds shall be authorized by
resolution of the members of the municipality and
shall bear such date or dates, mature at such time
or times, not exceeding fifty years from their
respective dates, bear interest at such rate or
rates, or have provisions for the manner of
determining such rate or rates, payable at such
time or times, be in such denominations, be in
such form, either coupon or registered, carry such
registration privileges, be executed in such
manner, be payable in lawful money of the United
States of America at such place or places, and be
subject to such terms of redemption, as such
resolution or resolutions may provide. The revenue
bonds or notes may be sold at public or private
sale for such price or prices as the
municipalities shall determine. Pending
preparation of the definitive bonds, the
municipalities may issue interim receipts or
certificates which shall be exchanged for such
definitive bonds.
(c) Any resolution or resolutions authorizing
any revenue bonds or any issue of revenue bonds
may contain provisions, which shall be a part of
the contract with the holders of the revenue bonds
to be authorized, as to: (1) Pledging all or any
part of the revenues of a project or any
revenue-producing contract or contracts made by
the municipalities with any individual,
partnership, corporation or association or other
body, public or private, to secure the payment of
the revenue bonds or of any particular issue of
revenue bonds, subject to such agreements with
bondholders as may then exist; (2) the rentals,
fees and other charges to be charged, and the
amounts to be raised in each year thereby, and the
use and disposition of the revenues; (3) the
setting aside of reserves or sinking funds or
other funds or accounts as the municipalities may
establish 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 municipalities;
(4) limitations on the right of the municipalities
or its agent to restrict and regulate the use of
the project; (5) limitations on the purpose to
which the proceeds of sale of any issue of revenue
bonds then or thereafter to be issued may be
applied and pledging such proceeds to secure the
payment of the revenue bonds or any issue of the
revenue bonds; (6) limitations on the issuance of
additional bonds; the terms upon which additional
bonds may be issued and secured; the refunding of
outstanding bonds; (7) the procedure, if any, by
which the terms of any contract with bondholders
may be amended or abrogated, the amount of bonds
the holders of which must consent thereto, and the
manner in which such consent may be given; (8)
limitations on the amount of moneys derived from
the project to be expended for operating,
administrative or other expenses of the
municipalities; (9) defining the acts or omissions
to act which shall constitute a default in the
duties of the municipalities to holders of its
obligations and providing the rights and remedies
of such holders in the event of a default; (10)
the mortgaging of a project and the site thereof
for the purpose of securing the bondholders; and
(11) 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 and agreements
for the purpose of moderating interest rate
fluctuations.
(d) If any officer whose signature or a
facsimile of whose signature appears on any bonds
or coupons ceases to be such officer before
delivery of such bonds, such signature or such
facsimile shall nevertheless be valid and
sufficient for all purposes the same as if he had
remained in office until such delivery. All such
bonds shall be deemed to be negotiable instruments
under the provisions of the general statutes.
(e) Bonds may be issued without obtaining the
consent of any commission, board, bureau or agency
of the state or of any political subdivision, and
without any other proceedings or the happening of
other conditions or things than those proceedings,
conditions or things which are specifically
required by said sections.
(f) The municipalities shall have power out
of any funds available therefor to purchase its
bonds or notes. The municipalities may hold,
pledge, cancel or resell such bonds, subject to
and in accordance with agreements with
bondholders.
(g) The municipalities shall cause a copy of
any bond resolution adopted by it to be filed for
public inspection in its office and in the office
of the clerk of each participating municipality
and may thereupon cause to be published at least
once in a newspaper published or circulating in
each participating municipality a notice stating
the fact and date of such adoption and the places
where such bond resolution has been so filed for
public inspection and also the date of the first
publication of such notice and also stating that
any action or proceeding of any kind or nature in
any court questioning the validity or proper
authorization of bonds provided for by the bond
resolution, or the validity of any covenants,
agreements or contracts provided for by the bond
resolution, shall be commenced within twenty days
after the first publication of such notice. If any
such notice is published and if no action or
proceeding questioning the validity or proper
authorization of bonds provided for by the bond
resolution referred to in such notice, or the
validity of any covenants, agreements or contracts
provided for by the bond resolution is commenced
or instituted within twenty days after the first
publication of said notice, then all residents and
taxpayers and owners of property in each
participating municipality and all other persons
shall be forever barred and foreclosed from
instituting or commencing any action or proceeding
in any court, or from pleading any defense to any
action or proceeding, questioning the validity or
proper authorization of such bonds, or the
validity of such covenants, agreements or
contracts, and said bonds, covenants, agreements
and contracts shall be conclusively deemed to be
valid and binding obligations in accordance with
their terms and tenor.
Sec. 7. (NEW) In the discretion of the
municipalities any bonds issued under sections 6
to 11, inclusive, of this act may be secured by a
trust indenture by way of conveyance, deed of
trust or mortgage of any project or any other
property of the municipalities, whether or not
financed in whole or in part from the proceeds of
such bonds, or by a trust agreement by and between
the municipalities and a corporate trustee, which
may be any trust company or bank having the powers
of a trust company within or without the state or
by both such conveyance, deed of trust or mortgage
and indenture or trust agreement. Such trust
indenture or agreement may pledge or assign any or
all fees, rents and other charges to be received
or proceeds of any contract or contracts pledged,
and may convey or mortgage any property of the
municipalities. Such trust indenture or agreement
may contain such provisions for protecting and
enforcing the rights and remedies of the
bondholders as may be reasonable and proper and
not in violation of law, including particularly
such provisions as have hereinabove been
specifically authorized to be included in any
resolution or resolutions of the municipalities
authorizing the issue of bonds. Any bank or trust
company incorporated under the laws of the state
may act as depository of the proceeds of such
bonds or of revenues or other moneys and may
furnish such indemnifying bonds or pledge such
securities as may be required by the
municipalities. Such trust indenture may set forth
the rights and remedies of the bondholders and of
the trustee, and may restrict the individual right
of action by bondholders. In addition to the
foregoing, such trust indenture or agreement may
contain such other provisions as the
municipalities may deem reasonable and proper for
the security of the bondholders. All expenses
incurred in carrying out the provisions of such
trust indenture or agreement may be treated as a
part of the cost of a project.
Sec. 8. (NEW) Any holder of bonds, notes,
certificates or other evidences of borrowing
issued under the provisions of sections to 6 to
11, inclusive, of this act or of any of the
coupons appertaining thereto, and the trustee
under any trust indenture or agreement, except to
the extent the rights herein given may be
restricted by such trust indenture or agreement,
may, either at law or in equity, by suit, action,
injunction, mandamus or other proceedings, protect
and enforce any and all rights under the
provisions of the general statutes or granted by
said sections or under such trust indenture or
agreement or the resolution authorizing the
issuance of such bonds, notes or certificates, and
may enforce and compel the performance of all
duties required by said sections or by such trust
indenture or agreement or resolution to be
performed by the municipalities or by any officer
or agent thereof, including the fixing, charging
and collection of fees, rents and other charges.
Sec. 9. (NEW) The exercise of the powers
granted by sections 6 to 11, inclusive, of this
act shall be in all respects for the benefit of
the inhabitants of the state, for the increase of
their commerce and for the promotion of their
safety, health, welfare, convenience and
prosperity, and as the operation and maintenance
of any project which the municipalities may
undertake constitute the performance of an
essential governmental function, no municipalities
shall be required to pay any taxes or assessments
upon any project acquired and constructed by it
under the provisions of said sections; and the
bonds, notes, certificates or other evidences of
debt issued under the provisions of said sections,
their transfer and the income therefrom, including
any profit made on the sale thereof, shall at all
times be free and exempt from taxation by the
state and by any political subdivision thereof but
the interest on such bonds, notes, certificates or
other evidences of debt shall be included in the
computation of any excise or franchise tax.
Sec. 10. (NEW) Bonds issued by the
municipalities under the provisions of sections 6
to 11, inclusive, of this act shall be securities
in which all public officers and public bodies of
the state and its political subdivisions, all
insurance companies, trust companies, banking
associations, investment companies and executors,
administrators, trustees and other fiduciaries may
properly and legally invest funds, including
capital in their control or belonging to them.
Such bonds shall be securities which may properly
and legally be deposited with and received by any
state or municipal officer or any agency or
political subdivision of the state for any purpose
for which the deposit of bonds or obligations is
now or may hereafter be authorized by law.
Sec. 11. (NEW) For the purpose of aiding the
planning, undertaking, acquisition, construction
or operation of any project for which bonds have
been issued under sections 6 to 11, inclusive, of
this act, any participating municipality may,
pursuant to resolution adopted by its legislative
body in the manner provided for adoption of a
resolution authorizing bonds of such municipality
and with or without consideration and upon such
terms and conditions as may be agreed to by and
between the municipality and the other
municipalities issuing bonds for the project,
unconditionally guarantee the punctual payment of
the principal of and interest on any bonds of the
municipalities and pledge the full faith and
credit of the municipality to the payment thereof.
Any guaranty of bonds of the municipalities made
pursuant to this section shall be evidenced by
endorsement thereof on such bonds, executed in the
name of the municipality and on its behalf by such
officer thereof as may be designated in the
resolution authorizing such guaranty, and such
municipality shall thereupon and thereafter be
obligated to pay the principal of and interest on
said bonds in the same manner and to the same
extent as in the case of bonds issued by it. As
part of the guarantee of the municipality for
payment of principal and interest on the bonds,
the municipality may pledge to and agree with the
owners of bonds issued under this chapter and with
those persons who may enter into contracts with
the municipality or such other municipalities or
any successor agency pursuant to the provisions of
this chapter that it will not limit or alter the
rights thereby vested in the bondowners, the
municipalities or any contracting party until such
bonds, together with the interest thereon, are
fully met and discharged and such contracts are
fully performed on the part of the municipality,
provided nothing in this subsection shall preclude
such limitation or alteration if and when adequate
provision shall be made by law for the protection
of the owners of such bonds of the municipality or
such other municipalities or those entering into
such contracts with the municipality. The
municipalities are authorized to include this
pledge and undertaking for the municipality in
such bonds or contracts. To the extent provided in
such agreement or agreements, the obligations of
the municipality thereunder shall be obligatory
upon the municipality and the inhabitants and
property thereof, and thereafter the municipality
shall appropriate in each year during the term of
such agreement, and there shall be available on or
before the date when the same are payable, an
amount of money which, together with other revenue
available for such purpose, shall be sufficient to
pay such principal and interest guaranteed by it
and payable thereunder in that year, and there
shall be included in the tax levy for each such
year an amount which, together with other revenues
available for such purpose, shall be sufficient to
meet such appropriation. Any such agreement shall
be valid, binding and enforceable against the
municipality if approved by action of the
legislative body of such municipality. Any such
guaranty of bonds of such other municipalities may
be made, and any resolution authorizing such
guaranty may be adopted, notwithstanding any
statutory debt or other limitations, but the
principal amount of bonds so guaranteed shall,
after their issuance, be included in the gross
debt of such municipality for the purpose of
determining the indebtedness of such municipality
under subsection (b) of section 7-374 of the
general statutes. The principal amount of bonds so
guaranteed and included in gross debt shall be
deducted and is declared to be and to constitute a
deduction from such gross debt under and for all
the purposes of said subsection (b) of section
7-374, (1) from and after the time of issuance of
said bonds until the end of the fiscal year
beginning next after the completion of acquisition
and construction of the project to be financed
from the proceeds of such bonds and (2) during any
subsequent fiscal year if the revenues of such
other municipalities in the preceding fiscal year
are sufficient to pay its expenses of operation
and maintenance in such year and all amounts
payable in such year on account of the principal
and interest on all such guaranteed bonds, and all
bonds of the municipalities issued under section
10 of this act.
Sec. 12. Section 10 of public act 96-238 is
repealed and the following is substituted in lieu
thereof:
The [term] PAYMENT OBLIGATIONS of any
contingency reserve loan agreement, or
modification thereof, between the Municipal
Liability Trust Fund Committee established
pursuant to section 19 of public act 86-350, and
an interlocal risk management agency, which
agreement was made in accordance with public act
86-350, shall be [extended for two years] DUE ON
OR BEFORE JULY 1, 2000, notwithstanding the
provision of any such agreement regarding
repayment of such loan.
Sec. 13. Section 8-187 of the general statutes
is repealed and the following is substituted in
lieu thereof:
As used in this chapter, (1) "municipality"
means a town, city, consolidated town and city or
consolidated town and borough; (2) "legislative
body" means (A) the board of selectmen in a town
that does not have a charter, special act or home
rule ordinance relating to its government or (B)
the council, board of aldermen, representative
town meeting, board of selectmen or other elected
legislative body described in a charter, special
act or home rule ordinance relating to government
in a city, consolidated town and city,
consolidated town and borough or a town having a
charter, special act, consolidation ordinance or
home rule ordinance relating to its government;
(3) "development agency" means the agency
designated by a municipality under section 8-188
through which the municipality may exercise the
powers granted under this chapter; (4)
"development project" means a project conducted by
a municipality for the assembly, improvement and
disposition of land or buildings or both to be
used principally for industrial or business
purposes and includes vacated commercial plants;
(5) "vacated commercial plants" means buildings
formerly used principally for business or
industrial purposes of which more than fifty per
cent of the usable floor space is, or which it is
anticipated, within eighteen months, shall be,
unused or substantially underutilized; (6)
"project area" means the area within which the
development project is located; (7) "commissioner"
means the Commissioner of Economic and Community
Development; (8) "planning commission" means the
planning and zoning commission designated pursuant
to section 8-4a or the planning commission created
pursuant to section 8-19; (9) "real property"
means land, subterranean or subsurface rights,
structures, any and all easements, air rights and
franchises and every estate, right or interest
therein; and (10) "business purpose" includes, but
is not limited to, any commercial, financial or
retail enterprise and includes any enterprise
which promotes tourism AND ANY PROPERTY THAT
PRODUCES INCOME.
Sec. 14. Section 32-141 of the general
statutes is repealed and the following is
substituted in lieu thereof:
(a) The total amount of private activity
bonds which may be issued by state issuers in any
calendar year, under the state ceiling in effect
for such year, shall be allocated as follows: (1)
Forty per cent to the Connecticut Housing Finance
Authority; (2) thirty-two per cent to the
Connecticut Development Authority; (3) eighteen
per cent to municipalities and political
subdivisions, departments, agencies, authorities
and other bodies of municipalities; and (4) ten
per cent for contingencies. Notwithstanding the
provisions of this section to the contrary, for
the calendar year commencing January 1, 1991, such
bonds shall be allocated as follows: (A) Forty per
cent to the Connecticut Housing Finance Authority;
(B) seventeen per cent to the Connecticut
Development Authority; (C) eighteen per cent to
municipalities and political subdivisions,
departments, agencies, authorities and other
bodies of municipalities; (D) fifteen per cent to
the Connecticut Higher Educational Supplemental
Loan Authority; and (E) ten per cent for
contingencies.
(b) No municipality or political subdivision,
department, agency, authority or other body of a
municipality shall issue any private activity
bonds, and no state issuer shall issue private
activity bonds which are allocated under
subsection (a) of this section for contingencies
[, without first obtaining the approval of] UNLESS
(1) THE PROJECT OR PROGRAM TO BE FINANCED IS
CONSISTENT WITH THE STATE PLAN OF CONSERVATION AND
DEVELOPMENT, THE CONSOLIDATED PLAN FOR HOUSING AND
COMMUNITY DEVELOPMENT AND THE ACTION PLAN FOR
HOUSING AND COMMUNITY DEVELOPMENT AND (2) the
Secretary of the Office of Policy and Management
APPROVES THE ISSUANCE. The secretary shall adopt
regulations in accordance with chapter 54,
establishing procedures and standards for the
submission and review of applications for such
approvals.
(c) The secretary shall monitor the needs of
all state issuers for private activity bonds and
shall be responsible for ensuring that no private
activity bonds are issued which exceed any
allocation under subsection (a) of this section,
except as provided under section 32-142.
Sec. 15. This act shall take effect from its
passage, except that section 14 shall take effect
July 1, 1998, and sections 1 to 11, inclusive,
shall take effect October 1, 1998.
Approved June 8, 1998