§ 8-306 — Municipal power to issue bonds and notes for purposes of a housing finance assistance plan.

(a) Subject to the provisions of section 8-307 and any general statute, special act or municipal charter or ordinance, a municipality shall have the power and is hereby authorized to issue, from time to time, but in no case later than October 1, 1982, notes and bonds in such principal amounts as the legislative body shall determine to be necessary to provide sufficient funds for achieving the purposes of this chapter, including the making of mortgage loans and loans to lending institutions, the establishment of reserves to secure such notes and bonds, interest on such notes and bonds, and the payment of expenses incident to or necessary for operation of the housing finance assistance plan. (b) A municipality shall have the power, from time to time, to issue (1) notes to renew notes and (2) bonds to pay notes, including the interest thereon and, whenever it deems refunding expedient, to refund any bonds by the issuance of new bonds, whether the bonds to be refunded have or have not matured, and to issue bonds partly to refund bonds then outstanding and partly for any of the purposes of this chapter. The refunding bonds may be exchanged for the bonds to be refunded or sold and the proceeds applied to the purchase, redemption or payment of such bonds. (c) The notes and bonds shall be authorized by resolution of the legislative body, shall bear such date or dates and shall mature at such time or times not exceeding thirty years from the date thereof as such resolution may provide. The legislative body may designate an official or group of officials of the municipality to determine form, rates of interest and other particulars of the notes and bonds issued hereunder. The notes and bonds shall bear interest at such rate or rates, be in such denominations, be in such form, either bearer or registered, carry such exchange, transfer and registration privileges, be executed in such manner, be payable in such medium of payment, at such place or places, be subject to such terms of redemption, and to such other terms and particulars as the resolution may provide or as the municipal official or officials designated by the legislative body may determine. The notes and bonds may be sold at public or private sale, provided if the bonds are sold at a private sale the municipality shall retain a financial advisor, which shall be a nationally recognized investment banking firm and ineligible to purchase the bonds, to review the proposed financing. The bonds may be sold at such price or prices as the legislative body or such official or officials as it designates shall determine, but the timing of such sale shall first be coordinated with the State Treasurer in order to avoid conflicts with bond sale scheduled by the state or any state agency or instrumentality. (d) Any resolution or resolutions authorizing the issuance of bonds, notes or other obligations may contain provisions, except as expressly limited in this chapter and except as otherwise limited by existing agreements with the holders of bonds, notes or other obligations, which shall be a part of the contract with the holders thereof, as to the following: (1) The pledging of all or any part of the moneys received by the municipality in payment of mortgage loans and interest thereon, and other moneys received or to be received, to secure the payment of the principal of and interest on any bonds, notes or other obligations or of any issue thereof; (2) the pledging of all or any part of the assets acquired by the municipality pursuant to the housing finance assistance plan, including but not limited to mortgages and other obligations securing the same, to secure the payment of the principal and interest on any bonds, notes or other obligations or of any issue thereof; (3) the use and disposition of the gross income from, and the payments of principal received by the municipality on, mortgages held by the municipality; (4) the establishment of reserves or sinking funds, the making of charges and fees to provide for the same, and the regulation and disposition thereof; (5) limitations on the purpose to which the proceeds of sale of bonds, notes or other obligations may be applied and pledging such proceeds to secure the payment of the bonds, notes or other obligations, or of any issue thereof; (6) limitations on the issuance of additional bonds, notes or other obligations; the terms upon which additional bonds, notes or other obligations may be issued and secured; and the refunding or purchase of outstanding bonds, notes or other obligations; (7) the procedure, if any, by which the terms of any contract with the holders of any bonds, notes or other obligations may be amended or abrogated, the amount of bonds, notes or other obligations the holders of which must consent thereto, and the manner in which such consent may be given; (8) limitations on the amount of moneys to be expended by the municipality for operating, administrative or other expenses of the housing finance assistance plan; (9) the vesting in a trustee or trustees of such property, rights, powers and duties in trust as the municipality may determine, which may include any or all of the rights, powers and duties of any trustee appointed by the holders of any bonds, notes or other obligations of the municipality to appoint a trustee under this chapter or limiting the rights, powers and duties of any trustee appointed such trustee; (10) covenants to do or refrain from doing such acts and things as may be necessary or convenient or desirable in order to better secure any bonds, notes or other obligations of the municipality, or which, in the discretion of the municipality, will tend to make any bonds, notes or other obligations to be issued more marketable notwithstanding that such covenants, acts or things may not be enumerated herein; and (11) any other matters of like or different character, which in any way affect the security or protection of the bonds, notes or other obligations. (e) If the resolution of a municipality authorizing the issuance of bonds or notes so states and if such resolution is published in a newspaper having general circulation in the municipality within twenty-one days after passage, the validity of such bonds or notes may be contested only if an action, suit or proceeding contesting such validity is commenced within thirty days after the date of publication of such resolution. (f) Any pledge made by the municipality shall be valid and binding from the time when the pledge is made, and the revenues or property so pledged and thereafter received by the municipality shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act. The lien of any such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the municipality, irrespective of whether such parties have notice thereof. Neither the resolution nor any other instrument by which a pledge is created need be recorded. (g) Neither the officials nor members of the legislative body of the municipality nor any other authorized person executing such notes or bonds shall be subject to any personal liability by reason of the issuance thereof. (h) The municipality, subject to such agreements with noteholders or bondholders as may then exist, shall have power, out of any funds available therefor, to purchase notes or bonds, which shall thereupon be cancelled, at a price not exceeding (1) if the notes or bonds are then redeemable, the redemption price then applicable plus accrued interest to the next interest payment date thereof, or (2) if the notes or bonds are not then redeemable, the redemption price applicable on the first date after such purchase upon which the notes or bonds become subject to redemption plus accrued interest to such date. (i) In the discretion of the legislative body, the bonds may be secured by a trust indenture by and between the municipality and a corporate trustee, which may be any trust company or bank having the powers of a trust company within or without the state. Such trust indenture may contain such provisions for protecting and enforcing the rights and remedies of the bondholders as may be reasonable and proper and not in violation of law, including covenants setting forth the duties of the municipality in relation to the exercise of its powers pursuant to this chapter and the custody, safeguarding and application of all moneys. The municipality may provide by such trust indenture for the payment to the trustee under such trust indenture or to any other depository of the proceeds of the bonds and the revenues of the municipality under the housing finance assistance plan, and for the method of disbursement thereof, with such safeguards and restrictions as it may determine. All expenses incurred in carrying out such trust indenture may be treated as a part of the operating expenses of the housing finance assistance plan. If the bonds shall be secured by a trust indenture, the bondholders shall have no authority to appoint a separate trustee to represent them. (j) Whether or not the notes and bonds are of such form and character as to be negotiable instruments under the terms of the Uniform Commercial Code, the notes and bonds are hereby made negotiable instruments within the meaning of and for all purposes of the Uniform Commercial Code, subject only to the provisions of the notes and bonds for registration.

Legislative History

(P.A. 79-596, S. 7, 17.)