(a) Whenever a district has made an appropriation or incurred a debt, to purchase, acquire, construct, improve or extend any transit facility or transit system or to refund outstanding bonds or notes, it may issue in the name of the transit district general obligation bonds secured by the full faith and credit of the transit district, or revenue bonds secured by a pledge of revenues, or bonds secured by both the full faith and credit of the transit district and a pledge of revenues. Any such bonds which are secured by the full faith and credit of the transit district or by both the full faith and credit of the transit district and a pledge of revenues shall be in serial form and may mature in annual installments which shall be substantially equal or shall be so arranged that no installments payable in any year shall be less than the amount of any installment payable in any subsequent year, or may mature in annual installments on a maturity schedule that will substantially equalize the payment of principal and interest annually. The first installment of any series of bonds shall mature not later than two years from the date of the issue of such series and the last installment of such series shall mature not later than forty years therefrom. Any revenue bonds may mature at term, which shall not exceed forty years from the date of issue, or in such installments prior thereto as the board of directors determines. The term of any anticipation notes issued pursuant to this chapter shall not be included in computing the time within which such bonds shall mature. The bonds of each issue may be sold at public or private sale, at or above or below par, may be fully registered, registrable as principal only or in bearer form, and may be made redeemable before maturity at such price or prices, and under such terms and conditions, all as shall be provided by the board of directors. The board of directors, or such officer as the board shall designate, shall determine the rate of interest which such bonds shall bear, the form of such bonds, the persons by whom such bonds are to be signed, the place or places for payment of principal and interest, and the manner of execution of such bonds.
(b) A public hearing shall be held on any proposed resolution to authorize the issuance of bonds. Notice of the public hearing and a copy of the proposed resolution shall be published fifteen days before the date of the public hearing in a newspaper or newspapers having a substantial circulation in the district. All such bonds shall be authorized after such public hearing by resolution adopted by a majority of all the directors of the transit district, provided no resolution authorizing the issuance of general obligation bonds exceeding two hundred fifty thousand dollars shall become effective until ninety days after publication of notice of passage of the resolution in a newspaper or newspapers having a substantial circulation in the district. Such resolution authorizing the issuance of general obligation bonds exceeding two hundred fifty thousand dollars shall become effective ninety days after publication of notice of passage of the resolution by the board of directors of the transit district unless the legislative bodies of those constituent municipalities whose population comprises forty per cent of the population of all the constituent municipalities vote to disapprove such resolution within such ninety-day period, or unless the legislative bodies of one-third of the constituent municipalities vote to disapprove such resolution within such ninety-day period. The effective date of such resolution authorizing the issuance of general obligation bonds exceeding two hundred fifty thousand dollars shall be suspended if petitions requesting a district-wide referendum on such resolution and signed by not less than ten per cent of the electors of any municipality which is a member of the transit district, or by not less than five per cent of the electors of all the municipalities which are members of the transit district, and complying with section 7-9, are filed with the clerk of any such municipalities within the sixty-day period following the publication of notice of passage. Each clerk with whom a petition is properly and timely filed shall notify the chairman or chief executive officer of the transit district in writing of the total number of electors in that municipality and the total number of such electors whose signatures appear on such a petition. Where the required number of signatures on such petition have been submitted, the chairman of the district shall designate a day and the hours of voting at such referendum, which referendum shall be held simultaneously in each member municipality, such day to be not more than fifty days after the last day to file such petitions, and not less than twenty days after notice of such referendum and a copy of such resolution are published in a newspaper or newspapers having a substantial circulation in the district. All electors in each of the municipalities which are members of the transit district shall be entitled to vote at such referendum. Such resolution shall become effective upon receiving the favorable vote of a majority of all electors voting thereon at such referendum.
(c) “Annual receipts from taxation” means the receipts from taxation of all the municipalities which are members of the transit district for the fiscal year next preceding the date of issue. Notwithstanding the provisions of section 7-374, any transit district may issue bonds, provided the aggregate indebtedness of such district shall not exceed one times the annual receipts from taxation. Bonds and notes issued under the provisions of this section for the purposes of this chapter shall not be subject to section 7-374 or to any other statutory limitations on the indebtedness of any municipality which is a member of the transit district and shall not be included in computing the aggregate indebtedness of any municipality which is a member of the transit district.
(d) Whenever a transit district has been authorized to issue bonds as provided by this section, the board of directors of such district may authorize without public hearing the issuance of temporary notes in anticipation of the receipt of the proceeds from the sale of such bonds. Such notes shall be issued for a period of not more than four years, but 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 four years, and, to the extent of the unpaid balance of federal and state grants as to which the transit district has a written commitment, notes may be renewed by the issue of other notes for such longer time pending receipt of such grant proceeds.
(e) In the discretion of the board of directors, the revenue bonds of the transit district may be secured by a trust indenture between the transit district and a corporate trustee, which trustee may be any trust company or bank having the powers of a trust company in the state. Such indenture may contain reasonable and adequate provisions for protecting and enforcing the rights and remedies of the bond holders and may restrict their individual rights of action as is customary in trust indentures securing bonds and debentures of corporations.
(f) The bonds and notes of a transit district issued pursuant to this chapter shall be lawful investments of the state and all governmental units and agencies thereof, of all banks, trust companies, savings banks, savings and loan associations, investment companies, insurance companies, insurance associations, and of all executors, administrators, guardians, trustees and other fiduciaries.
(g) Bonds and notes issued under the provisions of this chapter, their transfer and the income therefrom, including any profit made on the sale thereof, shall at all times be free from taxation within the state.
(h) If at any time the transit district is in default on the payment of the principal of or interest on general obligation bonds or bond anticipation notes of such transit district, the chief fiscal officer of the defaulting transit district shall set apart from the first revenues thereafter received by the transit district, from whatever source, except revenues pledged as security for other bonds or notes and those federal or state grants or loans which the grant agency restricts to uses other than debt service on the district's bonds or bond anticipation notes, an amount sufficient to pay the principal and interest due and owing on such bonds or bond anticipation notes and shall immediately apply such amount to such default.
(i) If so recommended by the Commissioner of Transportation and if so authorized by resolution of the State Bond Commission, the state shall unconditionally guarantee the punctual payment of the principal of and interest on any bonds or notes of the transit district issued under the provisions of this chapter, provided the aggregate principal amount of such bonds or notes so guaranteed pursuant to this section shall not exceed fifty million dollars. Any such guarantee of bonds or notes of a transit district made pursuant to this section shall be evidenced by endorsement thereof on such bonds or notes, executed in the name of the state and on its behalf by such officer thereof as may be designated in said resolution of the State Bond Commission authorizing such guarantee. The execution of such a guarantee on any bonds or notes issued pursuant to the provisions of this chapter as aforesaid shall obligate the state to pay the principal of and interest on said bonds or notes upon default in such payment by the transit district.
(j) A district may issue bonds, notes or other obligations under this section, the interest on which may be includable in the gross income of the holder or holders thereof under the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, or any subsequent such code. The district may issue such bonds, notes or obligations only upon finding that such issuance is necessary, in the public interest and furthers the purposes and powers of the district.
(1961, P.A. 507, S. 6; 1972, P.A. 261, S. 6; P.A. 78-305, S. 2, 3, 5; P.A. 83-469, S. 4, 5; P.A. 89-211, S. 8.)
History: 1972 act replaced all former provisions for issuing bonds with new Subsecs. (a) to (i), inclusive; P.A. 78-305 amended Subsec. (a) allowing revenue bonds to mature at term, not exceeding 40 years or in installments and amended Subsec. (h) to exclude revenues pledged as security on other bonds from use as payments on bonds in default; P.A. 83-469 added Subsec. (j) authorizing transit districts to issue taxable bonds, notes and other obligations; P.A. 89-211 clarified reference to the Internal Revenue Code of 1986.