Gov. Malloy Signs Legislation Changing the Structuring of Municipal Bonds

Publisher: Day Pitney Alert

July 11, 2017

Day Pitney Author(s) Judith A. Blank Namita Tripathi Shah

On July 8, Governor Malloy signed into law Public Act No. 17-147, An Act Concerning State Taxation and Collection, Tax Gap Compliance, Tax Preparers and Facilitators, Changes to the Tax and Related Statutes, a Mental Health Community Investment Account and Municipal Bonds.

The legislation makes noteworthy changes regarding the structuring of municipal bonds. The legislation:

extends the permitted maximum maturity of general obligation debt issued by Connecticut municipalities from 20 years to 30 years
permits Connecticut municipalities to issue refunding bonds for a period of up to 30 years; and
allows such refunding bonds to be secured by a statutory lien on all revenues received by the municipality from its tax levy and collection.

These changes are applicable to obligations issued during the period from July 1, 2017 through June 30, 2022. The refunding provisions require a two-thirds vote of the municipality's legislative body.

Any municipality considering issuing bonds in accordance with this legislation should address the implications of doing so with its municipal financial advisor and bond counsel.

On September 24, Day Pitney attorneys Judith Blank, Douglas Gillette, Glenn Rybacki and Namita Shah gave a presentation at the New England States Government Finance Officers Association (NESGFOA) 71st Annual Fall Conference in Mystic, CT.

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University of Connecticut School of Law, William F. Starr Hall, Hartford, CT

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Hartford, Conn., May 26, 2016 - Day Pitney LLP represented the State of Connecticut as lead bond counsel and disclosure counsel in a general obligation refunding bond sale of $501.4 million. The sale resulted in saving of $75.5 million in debt service costs over the life of the refinanced bonds. The Nappier administration has an active debt refunding program which has saved taxpayers $1.1 billion to date.