Sec. 22a-479. Municipal approval of project funding agreements and obligations. Municipal bonds.
Sec. 22a-479. Municipal approval of project funding agreements and obligations. Municipal bonds. (a) A municipality may authorize and approve (1) the execution
and delivery of project funding agreements, and (2) the issuance and sale of project
obligations, grant account loan obligations and interim funding obligations, in accordance with such statutory and charter requirements as govern the authorization and approval of borrowings and the making of contracts generally by the municipality or in
accordance with the provisions of subsection (e) of this section. Project loan obligations,
grant account loan obligations and interim funding obligations shall be duly executed
and accompanied by an approving legal opinion of bond counsel of recognized standing
in the field of municipal law whose opinions are generally accepted by purchasers of
municipal bonds and shall be subject to the debt limitation provisions of section 7-374;
except that project loan obligations, grant account loan obligations and interim funding
obligations issued in order to meet the requirements of any abatement order of the commissioner shall not be subject to the debt limitation provisions of section 7-374, provided
the municipality files a certificate, signed by its chief fiscal officer, with the commissioner demonstrating to the satisfaction of the commissioner that the municipality has a
plan for levying a system of charges, assessments or other revenues which are sufficient,
together with other available funds of the municipality, to repay such obligations as the
same become due and payable.
(b) Each recipient which enters into a project funding agreement shall protect, defend and hold harmless the state, its agencies, departments, agents and employees from
and against any and all claims, suits, actions, demands, costs and damages arising from
or in connection with the performance or nonperformance by the recipient, or any of
its officers, employees or agents, of the recipient's obligations under any project funding
agreement as such project funding agreement may be amended or supplemented from
time to time. Each such recipient may insure against the liability imposed by this subsection through any insurance company organized within or without this state authorized
to write such insurance in this state or may elect to act as self-insurer of such liability,
provided such indemnity shall not be limited by any such insurance coverage.
(c) Whenever a recipient has entered into a project funding agreement and has authorized the issuance of project loan obligations or grant account loan obligations, it
may authorize the issuance of interim funding obligations. Proceeds from the issuance
and sale of interim funding obligations shall be used to temporarily finance an eligible
project pending receipt of the proceeds of a project loan obligation, a grant account loan
obligation or project grant. Such interim funding obligations may be issued and sold to
the state for the benefit of the Clean Water Fund or issued and sold to any other lender
on such terms and in such manner as shall be determined by a recipient. Such interim
funding obligations may be renewed from time to time by the issuance of other notes,
provided the final maturity of such notes shall not exceed six months from the date of
completion of the planning and design phase or the construction phase, as applicable,
of an eligible project, as determined by the commissioner. Such notes and any renewals
of a municipality shall not be subject to the requirements and limitations set forth in
sections 7-378, 7-378a and 7-264. The provisions of section 7-374 shall apply to such
notes and any renewals thereof of a municipality; except that project loan obligations,
grant account loan obligations and interim funding obligations issued in order to meet
the requirements of an abatement order of the commissioner shall not be subject to the
debt limitation provisions of section 7-374, provided the municipality files a certificate,
signed by its chief fiscal officer, with the commissioner demonstrating to the satisfaction
of the commissioner that the municipality has a plan for levying a system of charges,
assessments or other revenues sufficient, together with other available funds of the municipality, to repay such obligations as the same become due and payable. The officer
or agency authorized by law or by vote of the recipient to issue such interim funding
obligations shall, within any limitation imposed by such law or vote, determine the date,
maturity, interest rate, form, manner of sale and other details of such obligations. Such
obligations may bear interest or be sold at a discount and the interest or discount on
such obligations, including renewals thereof, and the expense of preparing, issuing and
marketing them may be included as a part of the cost of an eligible project. Upon the
issuance of a project loan obligation or grant account loan obligation, the proceeds
thereof, to the extent required, shall be applied forthwith to the payment of the principal
of and interest on all interim funding obligations issued in anticipation thereof and upon
receipt of a project grant, the proceeds thereof, to the extent required, shall be applied
forthwith to the payment of the principal of and interest on all grant anticipation notes
issued in anticipation thereof or, in either case, shall be deposited in trust for such purpose
with a bank or trust company, which may be the bank or trust company, if any, at which
such obligations are payable.
(d) Project loan obligations, grant account loan obligations, interim funding obligations or any obligation of a municipality that satisfies the requirements of Title VI of
the federal Water Pollution Control Act or the federal Safe Drinking Water Act or other
related federal act may, as determined by the commissioner, be general obligations of
the issuing municipality and in such case each such obligation shall recite that the full
faith and credit of the issuing municipality are pledged for the payment of the principal
thereof and interest thereon. To the extent a municipality is authorized pursuant to sections 22a-475 to 22a-483, inclusive, to issue project loan obligations or interim funding
obligations, such obligations may be secured by a pledge of revenues and other funds
derived from its sewer system or public water supply system, as applicable. Each pledge
and agreement made for the benefit or security of any of such obligations shall be in
effect until the principal of, and interest on, such obligations have been fully paid, or
until provision has been made for payment in the manner provided in the resolution
authorizing their issuance or in the agreement for the benefit of the holders of such
obligations. In any such case, such pledge shall be valid and binding from the time when
such pledge is made. Any revenues or other receipts, funds or moneys so pledged and
thereafter received by the 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 municipality, irrespective of whether such parties have notice
thereof. Neither the project loan obligation, interim funding obligation, project funding
agreement nor any other instrument by which a pledge is created need be recorded. All
securities or other investments of moneys of the state permitted or provided for under
sections 22a-475 to 22a-483, inclusive, may, upon the determination of the State Treasurer, be purchased and held in fully marketable form, subject to provision for any
registration in the name of the state. Securities or other investments at any time purchased, held or owned by the state may, upon the determination of the State Treasurer and
upon delivery to the state, be accompanied by such documentation, including approving
bond opinion, certification and guaranty as to signatures and certification as to absence
of litigation, and such other or further documentation as shall from time to time be
required in the municipal bond market or required by the state.
(e) Notwithstanding the provisions of the general statutes, any special act or any
municipal charter governing the authorization of bonds, notes or obligations or the appropriation of funds, or governing the application for, and expenditure of, grants or
loans, or governing the authorization of contracts or financing agreements or governing
the pledging of sewer or water revenues or funds, a municipality may, by resolution
approved by its legislative body and by (1) its water pollution control authority or sewer
authority, if any, authorize a project loan and project grant agreement between the municipality and the state pursuant to sections 22a-475 to 22a-483, inclusive, and appropriate
funds and authorize project loan obligations and interim funding obligations of the municipality paid and secured solely by a pledge of revenues, funds and moneys of the
municipality and the water pollution control authority or sewer authority, if any, derived
from its sewer system, to pay for and finance the total project costs of an eligible water
quality project, pursuant to a project loan and project grant agreement between the
municipality and the state pursuant to sections 22a-475 to 22a-483, inclusive, or (2) by
its water authority, if any, authorize a project loan and project grant agreement between
the municipality and the state pursuant to sections 22a-475 to 22a-483, inclusive, and
appropriate funds and authorize project loan obligations and interim funding obligations
of the municipality paid and secured solely by a pledge of revenues, funds and moneys
of the municipality and the water authority, if any, derived from its public water supply
system, to pay for and finance the total project costs of an eligible water quality project,
pursuant to a project loan agreement between the municipality and the state pursuant
to sections 22a-475 to 22a-483, inclusive. The provisions of chapter 103 shall apply to
the obligations authorized by this section, to the extent such section is not inconsistent
with this subsection. A project loan and project grant agreement authorized by such
resolution may contain covenants and agreements with respect to, and may pledge the
revenues, funds and moneys derived from, the sewer system or public water system to
secure such project loan obligations and interim funding obligations, including, but not
limited to, covenants and agreements with respect to holding or depositing such revenues, funds and moneys in separate accounts and agreements described in section 7-266. As used in this subsection "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, (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, (C) the board of burgesses or other
elected legislative body in a borough, or (D) the district committee or other elected
legislative body in a district, metropolitan district or other municipal corporation.
(f) Any recipient which is not a municipality shall execute and deliver project loan
obligations and interim financing obligations in accordance with applicable law and in
such form and with such requirements as may be determined by the commissioner. The
Commissioner of Public Health and the Department of Public Utility Control as required
by section 16-19e shall review and approve all costs that are necessary and reasonable
prior to the award of the project funding agreement. The Department of Public Utility
Control, where appropriate, shall include these costs in the recipient's rate structure in
accordance with section 16-19e.
(P.A. 86-420, S. 5, 12; P.A. 87-571, S. 5, 7; P.A. 89-377, S. 5, 8; June Sp. Sess. P.A. 90-1, S. 5, 6, 10; P.A. 92-201, S.
1, 2; P.A. 96-181, S. 114, 121; May Sp. Sess. P.A. 04-2, S. 69.)
History: P.A. 87-571 added provisions re interim funding obligations; P.A. 89-377 added provisions concerning opinions of bond counsel, exempted obligations issued in order to meet abatement orders from limits in Sec. 7-374, added
Subsec. (b) concerning hold harmless provisions and amended Subsec. (d) to provide that obligations may, as determined
by the commissioner, rather than shall, be general obligations of the municipality and to add provisions concerning marketability; June Sp. Sess. P.A. 90-1 amended Subsecs. (a) and (c) to provide that the exemption from the debt limitation of
Sec. 7-374 for projects under abatement orders will be allowed only when the municipality has satisfied the commissioner
that it has a repayment plan for such debt; P.A. 92-201 amended Subsec. (d) to clarify the nature of the pledge of revenues
and the lien of any such pledge and added Subsec. (e) concerning pledges of revenues; P.A. 96-181 added Subsec. (f) re
review and approval of costs of a recipient which is not a municipality by the Commissioner of Public Health and the
Department of Public Utility Control and made technical and conforming changes related to inclusion of the federal Safe
Drinking Water Act, effective July 1, 1996; May Sp. Sess. P.A. 04-2 amended Subsec. (c) to provide that notes of a
municipality under section shall not be subject to Sec. 7-264, amended Subsec. (d) to authorize the securing of obligations
of municipalities under section by other funds derived from water or sewer systems and to add provision re pledges and
agreements for the benefit or security of obligations under section, amended Subsec. (e) to qualify the provisions of law
that are not applicable to the municipal powers under section, to authorize project loan and project grant agreements and
to specify the provisions which such agreements may include, and made technical and conforming changes, effective May
12, 2004, and applicable to any pledge, lien or security interest of this state or any political subdivision of this state, which
was in existence on October 1, 2003, or created after October 1, 2003.