CHAPTER 748

REGISTERED PUBLIC OBLIGATIONS

Table of Contents

Sec. 42b-1. Definitions.

Sec. 42b-2. Public entities empowered to establish system for issuance of registered obligations. Interest on certain unregistered public obligations not exempt from federal tax.

Sec. 42b-3. Public entities authorized to establish system of registered obligations notwithstanding state or local laws. System may provide for certificated or uncertificated obligations or both.

Sec. 42b-4. Execution of certificated registered public obligations and writings related to uncertificated registered public obligations.

Sec. 42b-5. Signature of authorized officer on certificates. Continuing validity.

Sec. 42b-6. When seal is required on certificate a facsimile seal allowed with same legal effect.

Sec. 42b-7. Appointment by issuer of authenticity agents, transfer agents, registrars and other agents. Establishment of depository system for transfer of registered public obligations.

Sec. 42b-8. Costs of maintaining system of registration. Issuer may provide for its liability through agreements with others.

Sec. 42b-9. Obligations in registered form deemed to satisfy requirements as security for deposits required of public agencies.

Sec. 42b-10. Records of ownership of or security interests in registered public obligations not subject to inspection under freedom of information laws.

Sec. 42b-11. Effect of this chapter with respect to registered public obligations issued on or after July 7, 1983.

Sec. 42b-12. This chapter to be construed in conjunction with the Uniform Commercial Code.

Sec. 42b-13. State covenant not to amend this chapter in any manner impairing federal income tax exemption for interest on registered public obligations.

Sec. 42b-14. Severability clause.

Sec. 42b-15. Bonds or other obligations issued by public entity may be consolidated in single issue if all have the same security.


Sec. 42b-1. Definitions. As used in this chapter or sections 7-260, 7-273dd, 7-369, 7-373, 7-377a, 7-378 and 7-380, the following terms have the following meanings:

(a) “Authorized officer” means any individual required or permitted, alone or with others, by any provision of law or by the issuing public entity, to execute on behalf of the public entity a certificated registered public obligation or a writing relating to an uncertificated registered public obligation.

(b) “Certificated registered public obligation” means a registered public obligation which is represented by an instrument.

(c) “Code” means the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended.

(d) “Facsimile seal” means the reproduction by engraving, imprinting, stamping or other means of the seal of the issuer, official or official body.

(e) “Facsimile signature” means the reproduction by engraving, imprinting, stamping or other means of a manual signature.

(f) “Financial intermediary” means a bank, broker, clearing corporation or other person or the nominee of any of them, which in the ordinary course of its business maintains registered public obligation accounts for its customers, when so acting.

(g) “Issuer” means a public entity which issues an obligation.

(h) “Obligation” means an agreement of a public entity to pay principal and any interest thereon, whether in the form of a contract to repay borrowed money, a lease, an installment purchase agreement, or otherwise, and includes a share, participation, or other interest in any such agreement.

(i) “Official actions” means the actions, by statute, order, ordinance, resolution, contract or other authorized means, by which the issuer provides for issuance of a registered public obligation.

(j) “Official or official body” means the officer or board that is empowered under the laws of one or more states, including this state, or by the charter, ordinance, resolution or other authorization of the issuer, to provide for original issuance of an obligation of the issuer, by defining the obligation and its terms, conditions and other incidents, the successor or successors of any such official or official body and such other person or group of persons as shall be assigned duties of such official or official body with respect to a registered public obligation under applicable law from time to time.

(k) “Public entity” means any entity, department or agency which is empowered under the laws of one or more states or territories, the District of Columbia or possessions of the United States, including this state, to issue obligations any interest with respect to which may, under any provision of law, be provided an exemption from the income tax referred to in the code. The term “public entity” shall include, without limitation, this state, an entity deriving powers from and acting pursuant to the state Constitution or a special legislative act, a town, a city, a borough, a consolidated town and city, a consolidated town and borough, a regional school district or other special district, any other political subdivision or municipal corporation, a joint agreement entity, a public authority, a public trust, a nonprofit corporation and other organizations.

(l) “Registered public obligation” means an obligation issued by a public entity pursuant to a system of registration.

(m) “System of registration” means a plan that provides: (1) With respect to a certificated registered public obligation, that: (A) The certificated registered public obligation specify a person entitled to the registered public obligation and the rights it represents; and (B) transfer of the certificated registered public obligation and the rights it represents may be registered upon books maintained for that purpose by or on behalf of the issuer; and (2) with respect to a uncertificated registered public obligation, that: (A) Books maintained by or on behalf of the issuer for the purpose of registration of the transfer of a registered public obligation specify a person entitled to the registered public obligation and the rights evidenced thereby; and (B) transfer of the uncertificated registered public obligation and the rights evidenced thereby be registered upon such books.

(n) “Uncertificated registered public obligation” means a registered public obligation which is not represented by an instrument.

(P.A. 83-519, S. 1, 23; P.A. 89-211, S. 44.)

History: P.A. 89-211 clarified reference to the Internal Revenue Code of 1986.

Sec. 42b-2. Public entities empowered to establish system for issuance of registered obligations. Interest on certain unregistered public obligations not exempt from federal tax. (a) Since the code provides that interest with respect to certain obligations may not be exempt from federal income taxation unless they are in registered form, it is therefore a matter of state concern that public entities be authorized to provide for the issuance of obligations in such form. It is a purpose of this chapter to empower all public entities to establish and maintain a system pursuant to which obligations may be issued in registered form within the meaning of the applicable provisions of the code.

(b) Since obligations have traditionally been issued in bearer rather than in registered form and a change from bearer to registered form may affect the relationships, rights and duties of issuers of, and the persons that deal with, obligations and by such effect, the costs, and since such effects will impact the various issuers and varieties of obligations differently depending on their legal and financial characteristics, their markets and their adaptability to recent and prospective technological and organizational developments, it is therefore a matter of state concern that public entities be provided flexibility in the development of such systems and control over system incidents so as to accommodate such differing impacts. It is a purpose of this chapter to empower the establishment and maintenance and amendment from time to time of differing systems of registration of obligations, including system incidents, so as to accommodate the differing impacts upon issuers and varieties of obligations. It is further a purpose of this chapter to authorize systems that will facilitate the prompt and accurate transfer of registered public obligations and to develop practices with regard to the registration and transfer of registered public obligations.

(P.A. 83-519, S. 2, 23.)

Sec. 42b-3. Public entities authorized to establish system of registered obligations notwithstanding state or local laws. System may provide for certificated or uncertificated obligations or both. (a) Notwithstanding the provisions of the general statutes or any special act, any municipal charter or home rule ordinance or any local law requiring the issuance of bonds in bearer form or with coupons attached, each issuer is authorized to establish and maintain a system of registration with respect to each obligation which it issues. The system may either be: (1) A system pursuant to which only certificated registered public obligations are issued; (2) a system pursuant to which only uncertificated registered public obligations are issued; or (3) a system pursuant to which both certificated and uncertificated registered public obligations are issued. The issuer may amend, discontinue and reinstitute any system, from time to time, subject to covenants.

(b) The system shall be established, amended, discontinued or reinstituted for the issuer by, and shall be maintained for the issuer as provided by, the official or official body.

(c) The system shall be described in the registered public obligation or in the official actions which provide for original issuance of the registered public obligation and in subsequent official actions providing for amendments and other matters from time to time. Such description may be by reference to a program of the issuer which is established by the official or official body.

(d) The system shall define the method or methods by which transfer of the registered public obligation shall be effective with respect to the issuer and by which payment of principal and any interest shall be made. The system may permit the issuance of registered public obligations in any denomination to represent several registered public obligations of smaller denominations. The system may also provide for the form of any certificated registered public obligation or of any writing relating to an uncertificated registered public obligation, for identifying numbers or other designations, for a sufficient supply of certificates for subsequent transfers, for record and payment dates, for varying denominations, for communications to holders or owners of obligations and for accounting, cancelled certificate destruction, registration and release of security interests and other incidental matters. Unless the issuer otherwise provides, the record date for interest payable on the first or fifteenth days of a month shall be the fifteenth day or the last business day of the preceding month, respectively, and for interest payable on other than the first or fifteenth days of a month, shall be the fifteenth calendar day before the interest payment date.

(e) Under a system pursuant to which both certificated and uncertificated registered public obligations are issued, both types of registered public obligations may be regularly issued, or one type may be regularly issued and the other type issued only under described circumstances or to particular described categories of owners, and provision may be made for registration and release of security interests in registered public obligations.

(f) The system may include covenants of the issuer as to amendments, discontinuances and reinstitutions of the system and the effect of such on the exemption of interest from the income tax provided for by the code.

(g) Whenever an issuer shall issue an uncertificated registered public obligation, the system of registration may provide that a true copy of the official actions of the issuer relating to such uncertificated registered public obligation be maintained by the issuer or by the person, if any, maintaining such system on behalf of the issuer, as long as the uncertificated registered public obligation remains outstanding and unpaid. A copy of such official actions, verified to be such by an authorized officer, shall be admissible before any court of record, administrative body or arbitration panel without further authentication.

(h) Nothing in this chapter shall preclude a conversion from one of the forms of registered public obligations provided for by this chapter to a form of obligation not provided for by this chapter if interest on the obligation so converted will continue to be exempt from the income tax provided for by the code.

(i) The rights provided by other laws with respect to obligations in forms not provided for by this chapter shall, to the extent not inconsistent with this chapter, apply with respect to registered public obligations issued in forms authorized by this chapter.

(P.A. 83-519, S. 3, 23; P.A. 06-196, S. 271.)

History: P.A. 06-196 made a technical change in Subsec. (g), effective June 7, 2006.

Sec. 42b-4. Execution of certificated registered public obligations and writings related to uncertificated registered public obligations. (a) A certificated registered public obligation shall be executed by the issuer by the manual or facsimile signature or signatures of authorized officers. Any signature of an authorized officer may be attested by the manual or facsimile signature of another authorized officer.

(b) In addition to the signatures referred to in subsection (a) of this section, any certificated registered public obligation or any writing relating to an uncertificated registered public obligation may include a certificate or certificates signed by the manual or facsimile signature of an authenticating agent, certifying agent, registrar, transfer agent or the like.

(c) At least one signature of an authorized officer or of an authenticating agent, certifying agent, registrar, transfer agent or other person required or permitted to be placed on a certificated registered public obligation shall be a manual signature.

(P.A. 83-519, S. 4, 23.)

Sec. 42b-5. Signature of authorized officer on certificates. Continuing validity. (a) Any certificated registered public obligation signed by the authorized officers at the time of the signing thereof shall remain valid and binding, notwithstanding that before the issuance thereof any or all of such officers shall have ceased to fill their respective offices.

(b) Any authorized officer empowered to sign any certificated registered public obligation may adopt as and for the signature of such officer the signature of a predecessor in office in the event that such predecessor’s signature appears on such certificated registered public obligation. An authorized officer incurs no liability by adoption of a predecessor’s signature that would not be incurred by such authorized officer if the signature were that of such authorized officer.

(P.A. 83-519, S. 5, 23.)

Sec. 42b-6. When seal is required on certificate a facsimile seal allowed with same legal effect. When a seal is required or permitted in the execution of any certificated registered public obligation, an authorized officer may cause the seal to be printed, engraved, stamped or otherwise placed in facsimile thereon. The facsimile seal shall have the same legal effect as the impression of the seal.

(P.A. 83-519, S. 6, 23.)

Sec. 42b-7. Appointment by issuer of authenticity agents, transfer agents, registrars and other agents. Establishment of depository system for transfer of registered public obligations. (a) An issuer or an issuer’s official or official body on behalf of the issuer may appoint for such term as may be agreed, including for as long as a registered public obligation may be outstanding, corporate or other authenticating agents, transfer agents, registrars, paying or other agents and specify the terms of their appointment, including their rights, their compensation and duties, limits upon their liabilities and provision for their payment of liquidated damages in the event of breach of certain of the duties imposed, which liquidated damages may be made payable to the issuer, the owner or a financial intermediary. None of such agents need have an office or do business within this state. The provisions of this subsection shall not relieve any issuer from any obligation applicable to it pursuant to section 7-373.

(b) An issuer or an issuer’s official or official body on behalf of the issuer may agree with custodian banks and financial intermediaries and nominees of any of them in connection with the establishment and maintenance by others of a central depository system for the transfer or pledge of registered public obligations. Any such custodian banks and financial intermediaries and nominees may, if qualified and acting as fiduciaries, also serve as authenticating agents, transfer agents, registrars, paying or other agents of the issuer with respect to the same issue of registered public obligations.

(c) Nothing shall preclude the issuer from itself performing, either alone or jointly with other issuers, any transfer, registration, authentication, payment or other function described in this section.

(P.A. 83-519, S. 7, 23; P.A. 06-196, S. 272.)

History: P.A. 06-196 made a technical change in Subsec. (a), effective June 7, 2006.

Sec. 42b-8. Costs of maintaining system of registration. Issuer may provide for its liability through agreements with others. (a) An issuer, prior to or at original issuance of registered public obligations, may provide as a part of a system of registration that the transferor or transferee of the registered public obligations pay all or a designated part of the costs of the system as a condition precedent to transfer, that costs be paid out of proceeds of the registered public obligations or that both methods be used. The portion of the costs of the system not provided to be paid for by the transferor or transferee or out of proceeds shall be the liability of the issuer.

(b) The issuer may as a part of a system of registration provide for reimbursement or for satisfaction of its liability by payment by others. The issuer may enter into agreements with others respecting such reimbursement or payment, may establish fees and charges pursuant to such agreements or otherwise and may provide that the amount or estimated amount of such fees and charges shall be reimbursed or paid from the same sources and by means of the same collection and enforcement procedures and with the same priority and effect as with respect to the obligations.

(P.A. 83-519, S. 8, 23.)

Sec. 42b-9. Obligations in registered form deemed to satisfy requirements as security for deposits required of public agencies. Obligations issued by public entities under the laws of one or more states, territories, possessions or the District of Columbia, which are in registered form, whether or not represented by an instrument, and which, except for their form, satisfy the requirements with regard to security for deposits of moneys of public agencies prescribed pursuant to any laws of this state, shall be deemed to satisfy all such requirements even though they are in registered form if a security interest in such obligations is perfected on behalf of the public agencies whose moneys are so deposited.

(P.A. 83-519, S. 9, 23.)

Sec. 42b-10. Records of ownership of or security interests in registered public obligations not subject to inspection under freedom of information laws. (a) Records with regard to the ownership of or security interests in registered public obligations shall not be subject to inspection or copying under any law of this state relating to the right of the public to inspect or copy public records, including the Freedom of Information Act, as defined in section 1-200, notwithstanding any law to the contrary.

(b) Registration records of the issuer may be maintained at such locations within or without this state as the issuer or the official or official body on behalf of the issuer shall determine.

(P.A. 83-519, S. 10, 23; P.A. 97-47, S. 25.)

History: P.A. 97-47 amended Subsec. (a) by substituting “the Freedom of Information Act, as defined in Sec. 1-18a” for list of sections.

Sec. 42b-11. Effect of this chapter with respect to registered public obligations issued on or after July 7, 1983. (a) Unless at any time prior to or at original issuance of a registered public obligation the official or official body of the issuer determines otherwise, this chapter shall be applicable to such registered public obligation notwithstanding any provision of law to the contrary. When this chapter is applicable, no contrary provision shall apply.

(b) Nothing in this chapter shall limit or prevent the issuance of obligations in any other form or manner authorized by law.

(c) Unless determined otherwise pursuant to subsection (a) of this section, the provisions of this chapter shall be applicable with respect to obligations which have heretofore been approved by vote, referendum or hearing authorizing or permitting the authorization of obligations in bearer and registered form or in bearer form only or requiring that such obligations bear manual signatures or be in certain denominations and such obligations need not be resubmitted for a further vote, referendum or hearing, for the purpose of authorizing or permitting the authorization of registered public obligations pursuant to this chapter, notwithstanding any provisions of the general statutes, any special act or any charter to the contrary.

(P.A. 83-519, S. 11, 23.)

Sec. 42b-12. This chapter to be construed in conjunction with the Uniform Commercial Code. This chapter and sections 7-260, 7-273dd, 7-369, 7-373, 7-377a, 7-378 and 7-380 shall be construed in conjunction with title 42a and the principles of contract law relative to the registration and transfer of obligations.

(P.A. 83-519, S. 12, 23.)

Sec. 42b-13. State covenant not to amend this chapter in any manner impairing federal income tax exemption for interest on registered public obligations. The state hereby covenants with the owners of any registered public obligations that it will not amend or repeal this chapter if the effect may be to impair the exemption from income taxation of interest on registered public obligations.

(P.A. 83-519, S. 13, 23.)

Sec. 42b-14. Severability clause. If any provision or the application of any provision of this chapter shall be invalid, such shall not affect the validity of other provisions or other applications, it hereby being declared that the provisions or the applications of this chapter are separable and this chapter would have been enacted with the invalid provision omitted or without the invalid application in any event.

(P.A. 83-519, S. 14, 23.)

Sec. 42b-15. Bonds or other obligations issued by public entity may be consolidated in single issue if all have the same security. Notwithstanding any provision of the general statutes, any special act, any charter, any bond ordinance, resolution or other authorization to the contrary, any bonds or other obligations authorized to be issued by a public entity may be consolidated as part of the same issue with any other bonds or other obligations of the public entity and may be sold and as a single issue, provided that: (1) The bonds and obligations of each issue shall be either general obligations of the public entity or secured in the same manner as all other bonds or obligations of such issue; and (2) a separate maturity schedule or sinking fund requirements, if any, shall be established by the public entity for each authorization of bonds or other obligations which is so consolidated.

(P.A. 83-519, S. 15, 23.)