Sec. 10-289f. Loans. Bond issues. Guaranties.
Sec. 10-289f. Loans. Bond issues. Guaranties. (a) Any qualifying municipality
which has a private academy within its boundaries may, in accordance with the provisions of sections 10-289d to 10-289g, inclusive, and if approved at a referendum in the
manner provided in said sections, (1) make loans to the private academy to pay the costs
of a school building project and (2) issue its bonds or notes to finance such loans.
(b) Any qualifying municipality may, in accordance with the provisions of sections
10-289d to 10-289g, inclusive, and if approved at referendum in the manner provided
in said sections, guarantee the payment of principal and any redemption premiums of
an interest on any bonds or notes issued pursuant to said sections.
(c) All loans authorized by said sections 10-289d to 10-289g, inclusive, shall be
secured or unsecured, be evidenced by a note of the private academy, and be in such
amounts, bear such date or dates, mature at such time or times, and may be subject to
prepayment and may contain such other terms and conditions as are contained in a loan
agreement between the qualifying municipality and the private academy. The board of
selectmen of a qualifying municipality which has a board of selectmen or the town
council in a qualifying municipality which has a town council may approve such loan
agreement on behalf of such municipality.
(d) All bonds or notes issued pursuant to said sections 10-289d to 10-289g, inclusive, shall be subject to the provisions of chapter 109 except as otherwise provided in
said sections. Notwithstanding the provisions of any general statute, special act or charter, bonds or notes issued pursuant to said sections shall be special obligations of the
issuing municipality payable solely from the revenues, property and funds pledged to
the payment thereof and shall be issued pursuant to a trust indenture between the issuing
municipality and a bank or trust company. The board of selectmen or town council of
the issuing municipality may approve the terms and provisions of such bonds or notes
and of such trust indenture including, but not limited to, amounts, dates, maturities, rates
of interest, and redemption provisions of such bonds or notes, the revenues, property
or funds pledged to secure the payment thereof, the establishment of reserves and other
funds and any other provisions as are customary in trust indentures securing bonds and
debentures of corporations including, but not limited to, provisions for protecting or
enforcing the rights and remedies of the holders of such bonds or notes or to restrict the
individual rights of action of such holders. Such bonds or notes shall be secured by the
note of the private academy, the loan repayment obligations and other covenants and
provisions of the private academy under its loan agreement with the issuing municipality,
the assignment of any security or property pledged by the private academy to secure
repayment of its loan, any guaranty agreements of any qualifying municipality and any
grant payments to which the trustee for the bonds or notes may be entitled to receive
pursuant to section 10-289g. Any pledge made by the issuing municipality shall be valid
and binding from the time the pledge is made. The revenues, property or funds so pledged
and thereafter received by the issuing municipality shall immediately 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 issuing municipality, irrespective of whether
such parties have notice thereof. Neither the trust indenture nor any other instrument
by which a pledge is created need be recorded or filed.
(e) Bonds and notes issued pursuant to sections 10-289d to 10-289g, inclusive, shall
be special obligations of the issuing municipality and shall not be payable from nor
charged upon any funds other than the revenues, property or funds pledged to the payment thereof, nor shall the issuing municipality be subject to any liability thereon except
to the extent of such pledged revenues, property and funds. No holder or holders of any
bonds or notes shall have the right to compel any exercise of the taxing power of the
issuing municipality to pay any bonds or notes or the interest thereon, nor to enforce
payment thereon against any property of the issuing municipality except the revenues,
property or funds pledged under the trust indenture. The bonds or notes shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the issuing
municipality, except the revenues, property or funds pledged under the trust indenture.
The substance of such limitation shall be plainly stated on the face of each bond or note.
(f) A qualifying municipality may contract with the holders of any of the bonds
or notes issued pursuant to sections 10-289d to 10-289g, inclusive, as to the custody,
collection, securing, investment and payment of any moneys of such a municipality
derived in furtherance of the purposes of said sections and of any moneys held in a trust
or otherwise for the payment of such bonds or notes, and carry out such contract. Moneys
held in trust or otherwise for the payment of bonds or notes or in any way to secure
bonds or notes and deposits of such moneys may be secured in the same manner as
moneys of such a municipality. All banks and trust companies may give such security
for such deposits. All moneys, securities and property received by such a municipality
in trust for security of the bonds or notes issued pursuant to sections 10-289d to 10-289g, inclusive, shall be kept separate from other funds and accounts of the municipality
and shall be used for the purposes of said sections and for no other purpose. All accounts
of such a municipality established in furtherance of the purposes of said sections shall
be audited annually by an independent certified public accountant.
(g) The bonds or notes of a municipality issued pursuant to sections 10-289d to 10-289g, inclusive, are (1) securities in which all public officers and bodies of the 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 or may 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
and (2) securities which may be deposited with and shall 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 or may be authorized.
(h) It is determined that the powers conferred on municipalities by sections 10-289d
to 10-289g, inclusive, are in all respect 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 said sections are public purposes and that municipalities will be performing
an essential governmental function in the exercise of the powers conferred upon them
by said sections. In consideration of the acceptance of any payment for bonds or notes
issued by a municipality pursuant to sections 10-289d to 10-289g, inclusive, the state
covenants with the purchasers and all subsequent holders and transferees of such bonds
or notes that such bonds or notes and the income therefrom shall at all times be free from
taxation, except for estate and gift taxes and taxes on transfers. Issuing municipalities are
authorized to include this covenant of the state in any agreement with the holder of such
bonds or notes.
(i) The state pledges to and agrees with the holders of any bonds or notes that the
state will not limit or alter the rights vested in a qualifying municipality to fulfill the
terms of any agreements made with such holders, including agreements in any loan
agreements, trust indentures or guaranty agreements, or in any way impair the rights
and remedies of such holders until such bonds or notes, issued pursuant to sections 10-289d to 10-289g, inclusive, together with the interest thereon, with interest on any unpaid
installments of interest, and all costs and expenses in connection with any action or
proceeding by or on behalf of such holders are fully met and discharged. A qualifying
municipality may include this pledge and agreement of the state in any agreement with
the holders of such bonds or notes.
(j) All guaranties authorized by sections 10-289d to 10-289g, inclusive, shall be in
such amounts, shall bear such date or dates and may contain such other terms and conditions as are contained in a guaranty agreement between the qualifying municipality and
the indenture trustee for the bonds or notes issued pursuant to said sections. The board
of selectmen or town council of the qualifying municipality may approve such guaranty
agreement on behalf of such municipality. Each such guaranty shall constitute a general
obligation of such qualifying municipality. If more than one qualifying municipality
has entered into any such guaranty, each such municipality may, in the guaranty
agreement, limit its obligation to an amount proportionate to the ratio of the number of
students eligible for high school education from such municipality to the total number
of students eligible for high school education from all municipalities which have entered
such guaranties. Such guaranty obligations shall be reduced by the amount of moneys
or securities held by the trustee for the bonds or notes in any fund for payment of such
bonds or notes, including any grant payments received by the trustee pursuant to section
10-289g.
(k) No bonds or notes issued pursuant to sections 10-289d to 10-289g, inclusive,
nor any guaranty of such bonds or notes shall be subject to any statutory limitation
on the indebtedness of any qualifying municipality nor be included in computing the
aggregate indebtedness and borrowing capacity of any qualifying municipality.
(l) The validity of any bonds or notes or of any guaranty authorized by sections
10-289d to 10-289g, inclusive, may be contested only if an action, suit or proceeding
contesting such validity is commenced within sixty days after the date of any referendum
approval thereof.
(P.A. 87-461, S. 3, 7.)