Sec. 32-227. Bond issue. - Connecticut Statutes

      Sec. 32-227. Bond issue. (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 by the legislative body of the municipality, issue from time to time bonds which, in either case, are payable solely or in part from and secured by: (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; (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 (C) any combination of the methods in subparagraphs (A) and (B) of this subdivision. Any bonds payable and secured as provided in this subsection shall be authorized by, 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. 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. For purposes of this section, references to the Connecticut Development Authority shall include any subsidiary of the Connecticut Development Authority established pursuant to subsection (l) of section 32-11a.

      (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, 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 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.

      (P.A. 90-270, S. 8, 38; P.A. 93-158, S. 9, 11; P.A. 98-237, S. 5; P.A. 01-179, S. 18; P.A. 03-19, S. 78.)

      History: P.A. 93-158 amended Subsecs. (a) and (b) adding provisions re temporary notes, effective June 23, 1993; P.A. 98-237 amended Subsec. (a) by 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, and made technical changes; P.A. 01-179 amended Subsec. (a) to make a technical change, to add provision re bonds payable and secured "in part" from and by the project's income, proceeds, revenue and property, and to add provision specifying that references to the Connecticut Development Authority include its subsidiaries; P.A. 03-19 made technical changes in Subsec. (a), effective May 12, 2003.

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