The tax intercept procedure and the debt service payment fund shall be established pursuant to an indenture or other agreement between the municipality and the trustee. Such indenture or agreement shall include all the terms, conditions and requirements pertaining to the tax intercept procedure and the debt service payment fund in accordance with the requirements of sections 7-560 to 7-579, inclusive, and the municipality shall agree to comply with all such terms, conditions and requirements for the benefit of the holders of any general obligations supported by such tax intercept procedure. Such indenture or agreement may also include covenants to pay the fees and expenses of the trustee and to indemnify the trustee from claims against the trustee, covenants of the municipality to protect and safeguard the security and rights of the holders of the obligations issued and sold subject thereto and inclusion of such covenants in the contract of the municipality with such holders and for the benefit of any holders of outstanding general obligations, provided such benefit conferred thereon shall not be deemed to restrict, preclude or otherwise impair any rights that such holders currently may assert and, without limiting said rights, such indenture or agreement shall contain covenants as to: (1) Establishment, maintenance and implementation of both the property tax intercept procedure and the debt service payment fund in a manner such that the municipality can transfer to the trustee for deposit in the debt service payment fund amounts at least equal to the debt service payment fund requirement, and the temporary investment of proceeds of such funds pending their use in accordance with sections 7-560 to 7-579, inclusive, and subject to such limitations on investment of public funds otherwise provided for by the general statutes; (2) the appointment, rights, powers and duties of the trustee including limiting or abrogating the rights of the holders of such general obligations to appoint any other trustee and vesting in the trustee all or any such rights, duties and powers; and (3) conditions which would give rise to an event of default under the terms and conditions of such general obligations and actions and remedies which the trustee may take and assert on behalf of such holders. Any requirement set forth in sections 7-560 to 7-579, inclusive, pertaining to the tax intercept procedure and debt service payment fund may be modified to the extent necessary to comply with any covenant of the municipality necessary to ensure the exclusion of interest on such obligations from gross income for federal income tax purposes.

(P.A. 93-421, S. 4, 22; June Sp. Sess. P.A. 17-2, S. 352.)

History: P.A. 93-421 effective July 1, 1993; June Sp. Sess. P.A. 17-2 deleted references to Sec. 7-394b(a), effective October 31, 2017.