§ 7-329r — Municipal guarantee of port authority bonds.

For the purpose of aiding a port authority in the planning, undertaking, acquisition, construction or operation of any port facility, any participating municipality may, pursuant to resolution adopted by its legislative body in the manner provided for adoption of a resolution authorizing bonds of such municipality and with or without consideration and upon such terms and conditions as may be agreed to by and between the municipality and the port authority, unconditionally guarantee the punctual payment of the principal of and interest on any bonds of the port authority and pledge the full faith and credit of the municipality to the payment thereof. Any guaranty of bonds of a port authority made pursuant to this section shall be evidenced by endorsement thereof on such bonds, executed in the name of the municipality and on its behalf by such officer thereof as may be designated in the resolution authorizing such guaranty, and such municipality shall thereupon and thereafter be obligated to pay the principal of and interest on said bonds in the same manner and to the same extent as in the case of bonds issued by it. As part of the guarantee of the municipality for payment of principal and interest on the bonds, the municipality may pledge to and agree with the owners of bonds issued under this chapter and with those persons who may enter into contracts with the municipality or the port authority or any successor agency pursuant to the provisions of this chapter that it will not limit or alter the rights thereby vested in the bondowners, the port authority or any contracting party until such bonds, together with the interest thereon, are fully met and discharged and such contracts are fully performed on the part of the municipality or the port authority, provided nothing in this subsection shall preclude such limitation or alteration if and when adequate provisions shall be made by law for the protection of the owners of such bonds of the municipality or the port authority or those entering into such contracts with the municipality or the port authority. The port authority is authorized to include this pledge and undertaking for the municipality in such bonds or contracts. To the extent provided in such agreement or agreements, the obligations of the municipality thereunder shall be obligatory upon the municipality and the inhabitants and property thereof, and thereafter the municipality shall appropriate in each year during the term of such agreement, and there shall be available on or before the date when the same are payable, an amount of money which, together with other revenue available for such purpose, shall be sufficient to pay such principal and interest guaranteed by it and payable thereunder in that year, and there shall be included in the tax levy for each such year an amount which, together with other revenues available for such purpose, shall be sufficient to meet such appropriation. Any such agreement shall be valid, binding and enforceable against the municipality if approved by action of the legislative body of such municipality. Any such guaranty of bonds of a port authority may be made, and any resolution authorizing such guaranty may be adopted, notwithstanding any statutory debt or other limitations, but the principal amount of bonds so guaranteed shall, after their issuance, be included in the gross debt of such municipality for the purpose of determining the indebtedness of such municipality under subsection (b) of section 7-374. The principal amount of bonds so guaranteed and included in gross debt shall be deducted and is declared to be and to constitute a deduction from such gross debt under and for all the purposes of said subsection (b) of section 7-374, (1) from and after the time of issuance of said bonds until the end of the fiscal year beginning next after the completion of acquisition and construction of the port facility to be financed from the proceeds of such bonds and (2) during any subsequent fiscal year if the revenues of the port authority in the preceding fiscal year are sufficient to pay its expenses of operation and maintenance in such year and all amounts payable in such year on account of the principal and interest on all such guaranteed bonds, all bonds of the municipality issued as provided in section 7-329q, and all bonds of the port authority issued under section 7-329g.

Legislative History

(P.A. 98-240, S. 18.)