Sec. 8-192. Bond issues. Connecticut Innovations, Incorporated or its subsidiaries. Federal and state aid. Taxes. Temporary notes.

(a) For the purpose of carrying out or administering a development plan or other functions authorized under this chapter, a municipality, acting by and through its development agency, is 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: (1) 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 this chapter; (2) 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 8-192a; or (3) any combination of the methods in subdivisions (1) and (2) 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 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 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 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: (A) 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; (B) 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; (C) 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) 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; (E) 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; (F) covenants for the establishment of maintenance requirements with respect to facilities and properties; (G) 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; (H) provisions regarding the rights and remedies available in case of a default to the bond owners, note owners or any trustee under any contract, loan agreement, document, instrument or trust indenture, 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 (I) 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, 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 development plan or other functions authorized under this chapter, a municipality, acting by and through its development 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 development 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 development project, a municipality may, in addition to other action authorized under this chapter 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) Notwithstanding the provisions of subsections (a) and (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 or less 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 subsection, and the principal of such bonds shall be paid in annual installments 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.

(d) For the purposes of carrying out or administering a specified development plan authorized under this chapter, Connecticut Innovations, Incorporated 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 or in part 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 Connecticut Innovations, Incorporated, except that the provisions of subsection (b) of section 32-23j shall not apply. For purposes of this section and section 8-192a, references to Connecticut Innovations, Incorporated shall include any subsidiary of Connecticut Innovations, Incorporated established pursuant to subsection (a) of section 32-11e.

(1967, P.A. 760, S. 7; P.A. 74-319, S. 3; P.A. 76-51; P.A. 87-572, S. 3, 5; P.A. 88-233, S. 3, 5; P.A. 89-230, S. 3, 4; P.A. 93-158, S. 4, 11; P.A. 98-237, S. 3; P.A. 01-179, S. 3; June 12 Sp. Sess. P.A. 12-1, S. 152; P.A. 13-123, S. 3.)

History: P.A. 74-319 amended Subsec. (a) by adding Subdivs. (2) and (3) re bonds payable from and secured by taxes or by combination of taxes and lien on assets of project, by adding requirement that bonds secured by taxes or combination be approved by local legislative body and by allowing deferral of principal payments; P.A. 76-51 amended Subsec. (b) to extend limits on temporary notes and renewals from 3 to 5 years; P.A. 87-572 made extensive amendments in procedures for issuance and payment of debt; P.A. 88-233 included payments made from payments in lieu of taxes; P.A. 89-230 amended Subsec. (a) to provide for 40-year maturity limits for bonds which finance housing and related facilities; P.A. 93-158 amended Subsecs. (a) and (b) adding provision re authorization of temporary notes, substituting alphabetic Subpara. indicators for numeric ones and making technical changes and added Subsec. (c) re renewal of temporary bonds, effective June 23, 1993; P.A. 98-237 added new Subsec. (d) authorizing the Connecticut Development Authority to issue bonds for a specified project upon approval of the legislative body of the municipality in which the project is located; P.A. 01-179 amended Subsec. (d) by adding provisions authorizing bonds to be payable in part from and secured by pledge and security provided for in Subsec. (a) and specifying that references to the Connecticut Development Authority include its subsidiaries; pursuant to June 12 Sp. Sess. P.A. 12-1, “Connecticut Development Authority” was changed editorially by the Revisors to “Connecticut Innovations, Incorporated” in Subsec. (d), effective July 1, 2012; P.A. 13-123 amended Subsec. (d) by substituting reference to Sec. 32-11e(a) for reference to Sec. 32-11a(1), effective June 18, 2013.

Notation

See Sec. 7-380b re issuance of bonds, notes or other obligations authorized before June 23, 1993.

See Sec. 8-192b re renewal of temporary notes.

Cited. 206 C. 579.