Sec. 7-369b. Representations and agreement to ensure federal tax exemption for municipal debt obligations.
Sec. 7-369b. Representations and agreement to ensure federal tax exemption
for municipal debt obligations. Any municipality may make representations and
agreements for the benefit of the holders of any bonds, notes or other obligations of the
municipality which are necessary or appropriate to ensure the exemption of interest on
bonds, notes or other obligations of the municipality from taxation under the Internal
Revenue Code of 1986 or any subsequent corresponding internal revenue code of the
United States, as from time to time amended, including agreements to pay rebates to
the federal government of investment earnings derived from the investment of the proceeds of bonds, notes or other obligations issued on or after January 1, 1986. The municipal officer or body empowered to issue such bonds, notes or other obligations may make
such representations and agreements on behalf of the municipality or such officer or
body may delegate such authority to the board of selectmen, board of finance or other
officer or board of the municipality. Any such agreement may include (1) a covenant
to pay rebates to the federal government of investment earnings derived from the investment of the proceeds of bonds, notes or other obligations issued on or after January 1,
1986, (2) a covenant that the municipality will not limit or alter its rebate obligations
until its obligations to the holders or owners of such bonds, notes or other obligations
are finally met and discharged, and (3) provisions to (A) establish trust and other accounts which may be appropriate to carry out such representations and agreements, (B)
retain fiscal agents as depositories for such funds and accounts and (C) provide that
such fiscal agents may act as trustee of such funds and accounts. All such representations
and agreements entered into and all such actions taken prior to June 5, 1986, are hereby
validated. The full faith and credit of the municipality shall be pledged to the payment
of the rebate obligations of such municipality, the amount thereof shall be deemed to
be an appropriation from the general fund of such municipality to the extent necessary
and there shall be made available on or before the date when such rebate is due and
payable an amount of money which, together with other revenues available for such
purpose, shall be sufficient to pay such rebate. The treasurer of the municipality is
hereby authorized to make such rebate payment to the federal government in the amount
certified by him, or by the person responsible for the financial affairs of the municipality,
as necessary for such purpose and there shall be included in the next tax levy an amount
which, together with other revenues available for such purpose, shall be sufficient therefor. For purposes of this section, "municipality" means any town, city, borough, consolidated town and city, consolidated town and borough, any metropolitan district, any
regional school district, any district as defined in section 7-324, and any other municipal
corporation or authority authorized to issue bonds, notes, or other obligations under the
provisions of the general statutes or any special act.
(P.A. 86-350, S. 3, 28; P.A. 89-211, S. 10.)
History: P.A. 89-211 clarified reference to the Internal Revenue Code of 1986.