Connecticut Seal

General Assembly

 

Committee Bill No. 6684

January Session, 2017

 

LCO No. 5714

 

*05714HB06684PD_*

Referred to Committee on PLANNING AND DEVELOPMENT

 

Introduced by:

 

(PD)

 

AN ACT CONCERNING THE MATURITY DATE FOR CERTAIN MUNICIPAL BONDS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 7-370c of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2017):

Any municipality, as defined in section 7-369, which has issued bonds, notes or other obligations pursuant to any public or special act may issue refunding bonds for the purpose of paying, funding or refunding prior to maturity all or any part of such municipality's bonds, notes or other obligations, the redemption premium, if any, with respect thereto, the interest thereon, the costs with respect to the issuance of such refunding bonds and the payment of such refunded bonds, notes or other obligations. Such refunding bonds shall mature not later than (1) in the case of a single series of bonds, notes or other obligations being refunded, the final maturity date thereof; and (2) in the case of multiple series of bonds, notes or other obligations being refunded, the final maturity date of any such series last to occur. Notwithstanding the provisions of subdivisions (1) and (2) of this section, and contingent on the approval by a two-thirds vote of the fiscal authority of the municipality, any such refunding bonds issued prior to July 1, 2019, shall not mature prior to thirty years from the date of the issuance of such refunding bonds. Notwithstanding the provisions of the general statutes or any special act, local law or charter governing the authorization and issuance of bonds, notes or other obligations and the appropriation of the proceeds thereof, such refunding bonds shall be authorized, and the proceeds appropriated for the purposes permitted under this section, by resolution of the legislative body of the municipality, and shall be subject to the same limitations and requirements as bonds issued pursuant to this chapter, provided the provisions of section 7-371, as amended by this act, regarding limitations on the date of the first maturity, or on the amount of any principal or on any principal and interest installments on any bonds, shall not apply to refunding bonds issued (A) prior to July 1, 2021, or (B) under this section [which shall] that achieve net present value savings after comparing total debt service payable on the refunding bonds to the total debt service payable on the refunded bonds, after accounting for costs of issuance and underwriters' discount. As used in this section, "legislative body" means [(A)] (i) the board of selectmen in a town that does not have a charter, special act or home rule ordinance relating to its government, [(B)] (ii) 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, [(C)] (iii) the board of burgesses or other elected legislative body in a borough, or [(D)] (iv) the district committee or other elected legislative body in a district, metropolitan district or other municipal corporation.

Sec. 2. Section 7-371 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2017):

Unless otherwise provided by the general statutes or any special act, bonds issued by any municipality, as defined in section 7-369, by authority of any provision of the general statutes or of any special act shall be serial bonds maturing in annual or semiannual installments of principal that shall substantially equalize the aggregate amount of principal and interest due in each annual period commencing with the first annual period in which an installment of principal is due, or maturing in annual or semiannual installments of principal no one of which shall exceed by more than fifty per cent the amount of any prior installment, or shall be term bonds with mandatory deposit of sinking fund payments into a sinking fund of amounts sufficient to redeem or amortize the principal of the bonds in annual or semiannual installments that shall substantially equalize the aggregate amount of principal redeemed or amortized and interest due in each annual period commencing with the first annual period in which a mandatory sinking fund payment becomes due, or sufficient to redeem or amortize the principal of the bonds in annual or semiannual installments no one of which shall exceed by more than fifty per cent the amount of any prior installment. The first installment of any series of bonds shall mature or the first sinking fund payment of any series of bonds shall be due not later than three years from the date of the issue of such series and the last installment of such series shall mature or the last sinking fund payment of such series shall be due not later than [twenty] thirty years therefrom.

This act shall take effect as follows and shall amend the following sections:

Section 1

July 1, 2017

7-370c

Sec. 2

July 1, 2017

7-371

Statement of Purpose:

To assist urban municipalities by allowing municipalities to issue refunding and new bonds for maximum terms of thirty years.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]

Co-Sponsors:

REP. ROJAS, 9th Dist.

H.B. 6684