Sec. 7-497. Income from notes and bonds tax-exempt; exception.
Sec. 7-497. Income from notes and bonds tax-exempt; exception. It is hereby
determined that the powers conferred upon municipalities by this chapter are in all
respects 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 this chapter are public
purposes and that municipalities will be performing an essential governmental function
in the exercise of the powers conferred upon them by this chapter. The state covenants
with the purchasers and all subsequent holders and transferees of notes and bonds issued
by a municipality, in consideration of the acceptance of and payment for the notes and
bonds, that the notes and bonds of the municipality issued pursuant to this chapter and
the income therefrom shall at all times be free from taxation, except for estate and gift
taxes and taxes on transfers. Municipalities are authorized to include this covenant of
the state in any agreement with the holder of such notes or bonds.
(July Sp. Sess. P.A. 75-2, S. 18, 25.)