Sec. 7-562. Documentation for issuance of general obligations. Requirements for intercept procedures and debt service payment fund. Percentage or amount of property tax deposited in fund. Fund use.
Sec. 7-562. Documentation for issuance of general obligations. Requirements
for intercept procedures and debt service payment fund. Percentage or amount of
property tax deposited in fund. Fund use. (a) Any municipality which proposes to
issue general obligations supported by a tax intercept procedure shall deliver to the
secretary, together with the notice described in this section, documentation demonstrating that: (1) Such municipality has authorized the issuance of such obligations in accordance with the general statutes, charter, special act or home rule ordinance or the provisions of subsection (a) of section 7-394b and sections 7-560 to 7-579, inclusive; (2)
such municipality has established a property tax intercept procedure and a debt service
payment fund with a trustee in accordance with the provisions of subsection (a) of
section 7-394b and sections 7-560 to 7-579, inclusive; and (3) such property tax intercept
procedure shall assure that the property tax receipts transferred to the trustee and deposited in the debt service payment fund shall be in an amount at least equal to and deposited
by such dates so as to satisfy the debt service payment fund requirement.
(b) Each such property tax intercept procedure and debt service payment fund shall:
(1) Take effect immediately upon the issuance of such obligations; (2) provide that all
outstanding general obligations of the municipality which have a term of more than one
year shall be supported by and paid from debt service payment fund and that property
taxes collected by the tax collector of such municipality shall be deposited in such debt
service payment fund as provided in subsection (a) of this section; and (3) provide that
the tax intercept procedure, the debt service payment fund, any indenture or agreement
establishing them, may be amended by the municipality without the consent of any
holder of any obligation of the municipality if such amendment does not impair the
rights of the holders and is requested by the secretary or the Treasurer.
(c) Prior to the issuance of any general obligation and on or prior to the first day of
each fiscal year thereafter, a municipality pursuant to its tax intercept procedure shall
determine the percentage or amounts of property taxes to be deposited in such debt
service payment fund, the time that such taxes shall be deposited therein and such other
terms, conditions and requirements as such municipality shall determine to be in the
best interest of the municipality, provided such terms, conditions and requirements shall
assure that the debt service payment fund shall have money deposited therein by such
dates so as to satisfy, and in amounts equal to or in excess of, the debt service payment
requirement. Pursuant to the tax intercept procedure, the chief executive officer of such
municipality shall certify to both the tax collector of such municipality and the trustee
of the debt service payment requirement, the percentage or amount and the time for
deposit of the property taxes therein and such other matters with respect to the operations
of the fund as may be required by the tax intercept procedure. Such percentage, amount
and time shall be sufficient to assure that the debt service payment fund shall at all times
have sufficient moneys available to meet the debt service payment fund requirement.
The tax collector shall, immediately upon receipt, remit such property taxes in the percentage or amount and at the time set forth in such certificate to the trustee for deposit
in the debt service payment fund. Nothing shall preclude the municipality or its duly
authorized officers from causing additional amounts of municipal taxes or other funds
to be deposited in the fund.
(d) If the percentage or amount and the time for deposit of the property taxes and
such other matters with respect to the operations of the fund as may be required by
the tax intercept procedure are not sufficient to meet the debt service payment fund
requirement, the trustee and the chief executive officer shall notify the secretary and
the Treasurer and thereafter all property taxes of such municipality shall be intercepted
by the tax collector and tendered to the trustee for deposit in the debt service payment
fund until the moneys deposited therein shall be at least equal to the debt service payment
fund requirement.
(e) Funds in the debt service payment fund shall be applied only to pay the outstanding general obligations of the municipality as and when the same shall become due,
provided if at any time during any fiscal year, the moneys in the debt service payment
fund exceed the debt service payment fund requirement for such fiscal year, the municipality, may instruct the trustee to, and the trustee shall, subject to any restrictions in the
tax intercept procedures, pay over to such municipality the amount of such excess for
use by the municipality in any manner allowed by law.
(f) The trustee shall from time to time withdraw from the debt service payment fund
all amounts required for the payment of debt service on all general obligations of the
municipality, as the same shall become due, and shall cause the amounts so withdrawn
and disbursed to the paying agents for such general obligations to be applied to such
payment.
(g) The debt service payment fund and all moneys or securities therein or payable
thereto are hereby declared to be property of the depositing municipality devoted to
essential governmental purposes and accordingly shall not be applied to any purpose
other than as provided in subsection (a) of section 7-394b and sections 7-560 to 7-579,
inclusive, and shall not be subject to any order, judgment, lien, execution, attachment,
set-off or counterclaim by any creditor of the municipality, except the trustee.
(P.A. 93-421, S. 3, 22.)
History: P.A. 93-421 effective July 1, 1993.