(a) Any qualifying municipality which has a private academy within its boundaries may, in accordance with the provisions of sections 10-289d to 10-289g, inclusive, and if approved at a referendum in the manner provided in said sections, (1) make loans to the private academy to pay the costs of a school building project and (2) issue its bonds or notes to finance such loans.

(b) Any qualifying municipality may, in accordance with the provisions of sections 10-289d to 10-289g, inclusive, and if approved at referendum in the manner provided in said sections, guarantee the payment of principal and any redemption premiums of an interest on any bonds or notes issued pursuant to said sections.

(c) All loans authorized by said sections 10-289d to 10-289g, inclusive, shall be secured or unsecured, be evidenced by a note of the private academy, and be in such amounts, bear such date or dates, mature at such time or times, and may be subject to prepayment and may contain such other terms and conditions as are contained in a loan agreement between the qualifying municipality and the private academy. The board of selectmen of a qualifying municipality which has a board of selectmen or the town council in a qualifying municipality which has a town council may approve such loan agreement on behalf of such municipality.

(d) All bonds or notes issued pursuant to said sections 10-289d to 10-289g, inclusive, shall be subject to the provisions of chapter 109 except as otherwise provided in said sections. Notwithstanding the provisions of any general statute, special act or charter, bonds or notes issued pursuant to said sections shall be special obligations of the issuing municipality payable solely from the revenues, property and funds pledged to the payment thereof and shall be issued pursuant to a trust indenture between the issuing municipality and a bank or trust company. The board of selectmen or town council of the issuing municipality may approve the terms and provisions of such bonds or notes and of such trust indenture including, but not limited to, amounts, dates, maturities, rates of interest, and redemption provisions of such bonds or notes, the revenues, property or funds pledged to secure the payment thereof, the establishment of reserves and other funds and any other provisions as are customary in trust indentures securing bonds and debentures of corporations including, but not limited to, provisions for protecting or enforcing the rights and remedies of the holders of such bonds or notes or to restrict the individual rights of action of such holders. Such bonds or notes shall be secured by the note of the private academy, the loan repayment obligations and other covenants and provisions of the private academy under its loan agreement with the issuing municipality, the assignment of any security or property pledged by the private academy to secure repayment of its loan, any guaranty agreements of any qualifying municipality and any grant payments to which the trustee for the bonds or notes may be entitled to receive pursuant to section 10-289g. Any pledge made by the issuing municipality shall be valid and binding from the time the pledge is made. The revenues, property or funds so pledged and thereafter received by the issuing municipality shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act. The lien of any such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the issuing municipality, irrespective of whether such parties have notice thereof. Neither the trust indenture nor any other instrument by which a pledge is created need be recorded or filed.

(e) Bonds and notes issued pursuant to sections 10-289d to 10-289g, inclusive, shall be special obligations of the issuing municipality and shall not be payable from nor charged upon any funds other than the revenues, property or funds pledged to the payment thereof, nor shall the issuing municipality be subject to any liability thereon except to the extent of such pledged revenues, property and funds. No holder or holders of any bonds or notes shall have the right to compel any exercise of the taxing power of the issuing municipality to pay any bonds or notes or the interest thereon, nor to enforce payment thereon against any property of the issuing municipality except the revenues, property or funds pledged under the trust indenture. The bonds or notes shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the issuing municipality, except the revenues, property or funds pledged under the trust indenture. The substance of such limitation shall be plainly stated on the face of each bond or note.

(f) A qualifying municipality may contract with the holders of any of the bonds or notes issued pursuant to sections 10-289d to 10-289g, inclusive, as to the custody, collection, securing, investment and payment of any moneys of such a municipality derived in furtherance of the purposes of said sections and of any moneys held in a trust or otherwise for the payment of such bonds or notes, and carry out such contract. Moneys held in trust or otherwise for the payment of bonds or notes or in any way to secure bonds or notes and deposits of such moneys may be secured in the same manner as moneys of such a municipality. All banks and trust companies may give such security for such deposits. All moneys, securities and property received by such a municipality in trust for security of the bonds or notes issued pursuant to sections 10-289d to 10-289g, inclusive, shall be kept separate from other funds and accounts of the municipality and shall be used for the purposes of said sections and for no other purpose. All accounts of such a municipality established in furtherance of the purposes of said sections shall be audited annually by an independent certified public accountant.

(g) The bonds or notes of a municipality issued pursuant to sections 10-289d to 10-289g, inclusive, are (1) securities in which all public officers and bodies of the state and all municipalities and municipal subdivisions, all insurance companies and associations and other persons carrying on an insurance business, all banks, bankers, trust companies, savings banks and savings associations, including savings and loan associations, investment companies and other persons carrying on a banking business, all administrators, guardians, executors, trustees and other fiduciaries and all other persons whatsoever who are or may be authorized to invest in bonds or in other obligations of the state may properly and legally invest funds, including capital, in their control or belonging to them and (2) securities which may be deposited with and shall be received by all public officers and bodies of the state and all municipalities for any purpose for which the deposit of bonds or other obligations of the state is or may be authorized.

(h) It is determined that the powers conferred on municipalities by sections 10-289d to 10-289g, inclusive, are in all respect for the benefit of the people of the state and for the improvement of their health, safety, welfare, comfort and security and that the purposes of said sections are public purposes and that municipalities will be performing an essential governmental function in the exercise of the powers conferred upon them by said sections. In consideration of the acceptance of any payment for bonds or notes issued by a municipality pursuant to sections 10-289d to 10-289g, inclusive, the state covenants with the purchasers and all subsequent holders and transferees of such bonds or notes that such bonds or notes and the income therefrom shall at all times be free from taxation, except for estate and gift taxes and taxes on transfers. Issuing municipalities are authorized to include this covenant of the state in any agreement with the holder of such bonds or notes.

(i) The state pledges to and agrees with the holders of any bonds or notes that the state will not limit or alter the rights vested in a qualifying municipality to fulfill the terms of any agreements made with such holders, including agreements in any loan agreements, trust indentures or guaranty agreements, or in any way impair the rights and remedies of such holders until such bonds or notes, issued pursuant to sections 10-289d to 10-289g, inclusive, together with the interest thereon, with interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceeding by or on behalf of such holders are fully met and discharged. A qualifying municipality may include this pledge and agreement of the state in any agreement with the holders of such bonds or notes.

(j) All guaranties authorized by sections 10-289d to 10-289g, inclusive, shall be in such amounts, shall bear such date or dates and may contain such other terms and conditions as are contained in a guaranty agreement between the qualifying municipality and the indenture trustee for the bonds or notes issued pursuant to said sections. The board of selectmen or town council of the qualifying municipality may approve such guaranty agreement on behalf of such municipality. Each such guaranty shall constitute a general obligation of such qualifying municipality. If more than one qualifying municipality has entered into any such guaranty, each such municipality may, in the guaranty agreement, limit its obligation to an amount proportionate to the ratio of the number of students eligible for high school education from such municipality to the total number of students eligible for high school education from all municipalities which have entered such guaranties. Such guaranty obligations shall be reduced by the amount of moneys or securities held by the trustee for the bonds or notes in any fund for payment of such bonds or notes, including any grant payments received by the trustee pursuant to section 10-289g.

(k) No bonds or notes issued pursuant to sections 10-289d to 10-289g, inclusive, nor any guaranty of such bonds or notes shall be subject to any statutory limitation on the indebtedness of any qualifying municipality nor be included in computing the aggregate indebtedness and borrowing capacity of any qualifying municipality.

(l) The validity of any bonds or notes or of any guaranty authorized by sections 10-289d to 10-289g, inclusive, may be contested only if an action, suit or proceeding contesting such validity is commenced within sixty days after the date of any referendum approval thereof.

(P.A. 87-461, S. 3, 7.)