§ 10-56 — Corporate powers. Bond issues.

Connecticut § 10-56

• Jurisdiction: Connecticut
• Title 10: Education and Culture
• Ch. 164: Educational Opportunities

Text

(a) A regional school district shall be a body politic and corporate with power to sue and be sued; to purchase, receive, hold and convey real and personal property for school purposes; and to build, equip, purchase, rent, maintain or expand schools. Such district may issue bonds, notes or other obligations in the name and upon the full faith and credit of such district and the member towns to acquire land, prepare sites, purchase or erect buildings and equip the same for school purposes, if so authorized by referendum. Such referendum shall be conducted in accordance with the procedure provided in section 10-47c except that any person entitled to vote under section 7-6 may vote and the question shall be determined by the majority of those persons voting in the regional school district as a whole. The exercise of any or all of the powers set forth in this section shall not be construed to be an amendment of a regional plan pursuant to said section 10-47c. A regional board of education may expend any premium in connection with such issue, interest on the proceeds of such issue or unused portion of such issue to add to the land or buildings erected or purchased and for the purchasing and installing of equipment for the same. Such bonds, notes or other obligations shall be issued as either serial or term bonds or both, in registered form or with coupons attached, registrable as to principal and interest or as to principal alone, shall be signed by the chairman and the treasurer of the regional board of education and shall mature at such time or times, or contain provisions for mandatory amortization of principal at such time or times, be issued at such discount or bear interest at such rate or rates payable at such time or times, or contain provisions for the method or manner of determining such rate or rates or time or times at which interest is payable, and contain such provisions for redemption before maturity at the option of the issuer or at the option of the holder thereof at such price or prices and under such terms and conditions as shall be determined by such board, or by such officer or body to whom the regional board of education delegates the authority to make such determinations, provided that any serial bonds, notes or other obligations shall be so arranged to mature in annual or semiannual installments of principal that shall substantially equalize the aggregate amount of principal and interest due in each annual period commencing with the first annual period in which an installment of principal is due or maturing in annual or semiannual installments of principal no one of which shall exceed by more than fifty per cent the amount of any prior installment, and any term bonds, notes or other obligations, shall be issued with mandatory deposit of sinking fund payments into a sinking fund of amounts sufficient to redeem or amortize the principal of the bonds in annual or semiannual installments that shall substantially equalize the aggregate amount of principal redeemed or amortized and interest due in each annual period commencing with the first annual period in which a mandatory sinking fund payment becomes due, or sufficient to redeem or amortize the principal of the bonds in annual or semiannual installments no one of which shall exceed by more than fifty per cent the amount of any installment. The first installment of any series of bonds shall mature or the first sinking fund payment of any series of bonds shall be due not later than three years from the date of issue of such series and the last installment of such series shall mature or the last sinking fund payment of such series shall be due not later than twenty years therefrom for any grant commitment authorized by the General Assembly pursuant to chapter 173 prior to July 1, 1996, and not later than thirty years therefrom for any grant commitment authorized by the General Assembly pursuant to said chapter on or after July 1, 1996. Such bonds, notes or other obligations when executed, issued and delivered, shall be general obligations of such district and the member towns, according to their terms. (b) “Annual receipts from taxation” means the receipts from taxation of the member towns for the fiscal year next preceding the beginning of the current fiscal year of such regional school district. Notwithstanding the provisions of section 7-374 , any regional school district may assume bonds, notes or other obligations of any member town as part of the purchase price of any property for school purposes or issue bonds, notes or other obligations, provided the aggregate indebtedness of such district shall not exceed: (1) In the case of a regional school district serving the same towns as are served by two or more town school districts, two and one-quarter times the annual receipts from taxation or (2) in the case of a regional school district empowered to provide for the member towns all programs under the general supervision and control of the State Board of Education, four and one-half times such annual receipts from taxation. Any regional school district may issue additional bonds, notes or other obligations in an amount not to exceed three and one-half times such annual receipts from taxation less the aggregate indebtedness computed in accordance with section 7-374 , for the member towns of such district. In computing the aggregate indebtedness of a regional school district for purposes of this section and section 7-374 there shall be excluded each bond, note or other evidence of indebtedness issued in anticipation of the receipt of (A) payments by a member town or the state for the operation of such district's schools and (B) proceeds from any state or federal grant for which the district has received a written commitment or for which an allocation has been approved by the State Bond Commission or from a contract with the state, a state agency or another municipality providing for the reimbursement of capital costs but only to the extent such indebtedness can be paid from such proceeds. (c) When a district has been authorized to issue general obligation bonds, notes or other obligations as provided by this section, the board may authorize, for a period not to exceed ten years, the issue of temporary notes in anticipation of the receipt of the proceeds from the sale of such bonds. Notes issued for a shorter period of time may be renewed by the issue of other notes, provided the period from the date of the original notes to the maturity of the last notes issued in renewal thereof shall not exceed ten years. The term of such notes shall not be included in computing the time within which such bonds shall mature, provided such term does not exceed four years. For any series of notes the term of which is extended past the fourth year, the provisions of section 7-378a providing for the retirement from budgeted funds of one-twentieth, or one-thirtieth, as applicable, of the net project cost, the reduction of the term of the bonds when sold and the commencement of the first principal payment of such bonds, shall apply with respect to each year beyond the fourth that the notes are outstanding. The provisions of section 7-373 shall be deemed to apply to such notes. The board, or such officer or body to whom the board delegates the authority to make such determinations, shall determine the date, maturity, interest rate, form, manner of sale and other terms of such notes which shall be general obligations of the regional school district and member towns. Such notes may bear interest or be sold at a discount. The interest or discount on such notes and any renewals thereof and the expense of preparing, issuing and marketing them may be included as a part of the cost of the project for the financing of which such bonds were authorized. Upon the sale of such bonds, the board shall apply immediately the proceeds thereof, to the extent required, to the payment of the principal and interest of all notes issued in anticipation thereof or deposit the proceeds in trust for such purpose with a bank or trust company, which may be the bank or trust company, if any, at which such notes are payable. (d) Subject to the provisions of subsection (c) of this section, the board may deposit or invest the proceeds of bonds, notes or other obligations as permitted in section 7-400 or 7-402 .

Legislative History

(1949 Rev., S. 1381; 1951, 1955, S. 911d; 1953, S. 919d; November, 1955, S. N118; February, 1965, P.A. 7; 1967, P.A. 626, S. 2; 674; 1969, P.A. 132, S. 2; 698, S. 16; P.A. 74-239, S. 1, 2; P.A. 86-350, S. 17, 28; P.A. 87-506, S. 7, 9; P.A. 89-337, S. 4, 6.; P.A. 93-158, S. 6, 11; P.A. 95-282, S. 6, 11; P.A. 96-244, S. 38, 63; P.A. 99-97, S. 3, 6; June Sp. Sess. P.A. 05-6, S. 33; P.A. 07-87, S. 3, 4; Nov. 24 Sp. Sess. P.A. 08-2, S. 4.) History: 1965 act allowed regional school districts to redeem bonds by issuing new one; 1967 acts replaced one year limit on original and renewal notes with two-year limit; 1969 acts increased maturity limit on renewal notes for notes originally issued for less than two years to four years; 1969 acts divided section into subsections and added powers to sue and be sued, to purchase, convey, etc. real and personal property and to build, equip, maintain, etc. schools, rephrased provisions concerning bonding power and referendum, deleted provision for numbering districts in order of incorporation, rephrased provision regarding maturity of installments, added Subsec. (b) basing bond limit on aggregate indebtedness and annual receipts from taxation, placed four-year limit on temporary notes regardless of whether they are initial notes or renewals, rephrased other provisions concerning notes and added Subsec. (d) concerning investment or deposit of proceeds of bonds and notes; P.A. 74-239 amended Subsec. (a) to add statement that exercise of powers under section is not to be construed as amendment of regional plan; 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. 87-506 amended Subsec. (a) to provide for various methods of determining payment amounts; P.A. 89-337 allowed semiannual installments, provided that the first maturity date or sinking fund payment shall be not later than three years, rather than two, from the issuance date and clarified the powers which the board may delegate to an officer or a body; P.A. 93-158 amended Subsec. (a) by deleting provision re redemption by new issuance and amended Subsec. (b) by redefining “annual receipts from taxation” to be receipts for fiscal year preceding beginning of current year rather than those preceding close of last year and adding provision re exclusions from the computation of aggregate indebtedness, effective June 23, 1993; P.A. 95-282 amended Subsec. (d) to make technical changes, effective July 6, 1995, provided “any designation of a depository of public funds of the state or any municipality or regional school district, and any prescription of the method of supervision of the investment and reinvestment of trust funds of a municipality, made in accordance with the applicable provisions of sections 4-33, 7-401, 7-402, 7-403, subsection (c) of section 10-52 or subsection (d) of section 10-56 in effect on or before July 6, 1995, shall remain in effect until rescinded or otherwise modified in accordance with the provisions of public act 95-282” (Revisor's note: The reference to “section 10-52” appears to be a clerical error since Subsec. (c) of Sec. 10-51 was amended by Sec. 5 of P.A. 95-282); P.A. 96-244 revised effective date section of P.A. 95-282 but without affecting this section; P.A. 99-97 amended Subsec. (b) to add reference to Sec. 7-374 in computing the aggregate indebtedness of districts, effective June 3, 1999; June Sp. Sess. P.A. 05-6 amended Subsec. (c) to permit period to extend up to eight years and add language re terms extending past the fourth year, effective July 1, 2005; P.A. 07-87 amended Subsec. (a) to allow a 30-year term for bonds authorized pursuant to Ch. 173 on or after July 1, 1996, and amended Subsec. (c) to include reference to one-thirtieth of the net project cost, effective July 1, 2007; Nov. 24 Sp. Sess. P.A. 08-2 amended Subsec. (c) to extend maximum time period for issuance of temporary notes from eight to ten years and extend maximum time period for renewal of notes from eight to ten years, effective November 25, 2008. Cited. 169 C. 613. Conclusion in 169 C. 613 that section applies only to amendments that directly affect voting rights of electors, and its function in light of Sec. 10-47c, reversed. 292 C. 784. Failure to strictly comply with statutory notice provisions does not automatically invalidate the result of a referendum conducted pursuant to Subsec. (a); a referendum may be judicially invalidated only when there were substantial violations of the governing statutes and, as a result of those violations, the reliability of the result of the election is seriously in doubt. 319 C. 245.