Connecticut General Statutes 7-576j – Contract with designated tier III or IV municipality for contract assistance. Limits. Provisions. Prohibition. Uses. Other credit support
(a) The Secretary of the Office of Policy and Management and the State Treasurer may enter the state into a contract with any designated tier III or tier IV municipality for the provision of contract assistance to such municipality in accordance with the provisions of this section. Any such contract assistance shall be limited to an amount equal to (1) the annual debt service on the outstanding amount of (A) refunding bonds to be issued by such municipality pursuant to section 7-370c, or (B) any other bonds or notes issued by such municipality, provided such refunding bonds or other bonds or notes are for payment, funding, refunding, redemption, replacement or substitution of bonds, notes or other obligations previously issued by such municipality, plus (2) costs of issuance on any such refunding bonds and any other costs or expenses, including, but not limited to, any tax payments, that result directly from the refunding of debt.
Terms Used In Connecticut General Statutes 7-576j
- Appropriation: The provision of funds, through an annual appropriations act or a permanent law, for federal agencies to make payments out of the Treasury for specified purposes. The formal federal spending process consists of two sequential steps: authorization
- Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
- Contract: A legal written agreement that becomes binding when signed.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Trustee: A person or institution holding and administering property in trust.
(b) Any contract described in subsection (a) of this section may provide that such contract assistance that is necessary to make debt service payments on behalf of such municipality shall be paid directly by the state to the municipality, trustee, paying agent or holder of the refunding bonds, other bonds or notes that are the subject of such contract.
(c) Notwithstanding the provisions of subsection (a) of this section, no such contract shall be entered into by the secretary and the Treasurer unless such designated tier III or tier IV municipality files a certificate with the secretary and the Treasurer that sets forth the amount of debt service and costs of issuance expected to be paid on any such refunding bonds to be secured by such state assistance contract.
(d) In making any requisite finding or determination for the purpose of entering into or executing any contract described in subsection (a) of this section, the secretary and the Treasurer may rely upon any reports or estimates of experts, as appropriate, to evaluate the feasibility of any such refunding of debt.
(e) Any provision of a contract described in subsection (a) of this section shall constitute a full faith and credit obligation of the state and as part of any such contractual obligation of the state to such municipality, trustee, paying agent or holder of any such refunding bonds, other bonds or notes, as applicable, appropriation of all amounts necessary to timely meet the terms of such contractual obligation is hereby made and the State Treasurer shall pay such amounts as the same become due to such municipality, trustee, paying agent or holder, as applicable.
(f) Any designated tier III or tier IV municipality that enters into a contract with the state pursuant to subsection (a) of this section may pledge such contract assistance of the state as security for the payment of such refunding bonds issued by such municipality.
(g) In lieu of contract assistance in accordance with subsection (a) of this section, the secretary and the Treasurer may agree to provide other forms of credit support to any designated tier III or tier IV municipality, including, but not limited to, an assumption of all or any portion of any bonds, notes or other obligations of such municipality or issuance of new state obligations in replacement of such bonds, notes or other obligations, provided such credit support shall not exceed the amount of contract assistance that could otherwise be provided by the state to such municipality in accordance with subsection (a) of this section.
(h) Nothing in this section shall be construed to limit the total funds available to a distressed municipality.
(i) The secretary and the Treasurer shall not enter into a contract, as described in subsection (a) of this section, with any municipality that files for bankruptcy.