Sec. 7-378a. Renewal of temporary notes.
Sec. 7-378a. Renewal of temporary notes. Notwithstanding the provisions of sections 7-264 and 7-378, and any other public or special act or charter which limits the
renewal of temporary notes issued in anticipation of the receipt of the proceeds of bond
issues to two years or any lesser period of time from the date of the original notes, any
municipality, as defined in section 7-369, may renew any temporary notes for a period
of not more than ten years from the date of the original issue of such temporary notes
if the municipality promptly applies all project grant payments toward project costs or
toward payment of such temporary notes as the same shall become due and payable
or deposits such grants in trust for such purposes and if the legislative body of such
municipality (1) authorizes the inclusion in the annual budget for each year or otherwise
appropriates sufficient sums, from funds other than project grants or note proceeds, to
retire notes equal to at least one-twentieth of the town's estimated net cost of the project
no later than three years from the date of the original issue of such temporary notes and
again for each subsequent year during which such temporary notes remain outstanding;
(2) reduces the principal amount of each bond issue when sold by the amount spent
under subdivision (1) of this section, and provides for the payment or amortization of
the principal of such bonds in annual installments commencing no later than eleven
years from the date of original issue of the temporary notes being permanently financed
by such bonds; (3) reduces the maximum authorized term of the bonds when sold by
not less than the number of months by which the date of issue exceeds two years from
the date of the original notes. For sewer projects or school building projects, as defined
in section 7-380c, the annual payments required under said subdivision (1) shall be at
least one-thirtieth of the town's estimated net cost of such sewer or school building
project. Any federal or state grants which are to be paid over a period of years to reimburse the municipality for a portion of principal due on bonds or notes may be used in
computing the municipality's net cost of the project. That portion of the proceeds of the
issue of any such temporary notes being issued as part of a common sale, which portion
is not used to refund outstanding temporary notes, shall be deemed a separate loan and
be considered to have a separate original issue date. Each such portion of any such
temporary notes may be renewed in accordance with the provisions of this section.
(1967, P.A. 626, S. 1; 1969, P.A. 646; P.A. 77-525, S. 2, 3; P.A. 78-316, S. 1, 4; P.A. 86-350, S. 10, 28; P.A. 02-114,
S. 1; P.A. 07-87, S. 2; Nov. 24 Sp. Sess. P.A. 08-2, S. 3.)
History: 1969 act added reference to charters and reflected the possibility that renewals of temporary notes might be
for less than two years; P.A. 77-525 specified conditions under which temporary notes might be renewed for four years
replacing previous condition requiring payment of interest and principal which would have been paid if entire principal
amount had been sold within two years of borrowing, deleted requirement that installments be substantially equal and
made special provisions re payments for sewer projects and exclusion of grants paid over a number of years in calculating
town's net cost; P.A. 78-316 allowed consideration of grants paid over a number of years in calculating net cost; P.A. 86-350 made a variety of changes for purposes of clarification, updating the statutes to conform to current financial practices
and to conform to anticipated changes in federal tax policy; P.A. 02-114 extended the maximum time period for renewal
of temporary notes from four to eight years, replaced "no later than four years from the date of the original issue of such
temporary notes" with "for each subsequent year during which such temporary notes remain outstanding" and extended
the date when annual payments are required to begin after the original note issue from five to nine years; P.A. 07-87 added
references to school building projects, effective July 1, 2007; Nov. 24 Sp. Sess. P.A. 08-2 extended maximum time period
for renewal of temporary notes from eight to ten years and extended date when annual payments are required to begin after
original note issue from nine to eleven years, effective November 25, 2008.
See Sec. 7-378c re effective date of section.
See Sec. 7-378e re extended time for renewal of temporary notes.