§ 15-31c — Bonds and notes. Special capital reserve fund.

(a) The Connecticut Port Authority may authorize the issuance of bonds in one or more series and in principal amounts necessary to carry out the purposes of sections 15-31a to 15-31i, inclusive. Such bonds shall be payable from all or a portion of the revenues of the ports and harbors of the state as may be specified in the proceedings authorizing such bonds, and may include, among other types of bonds, special purpose revenue bonds payable solely from revenues derived from special purpose facilities and bonds payable from particular sources of revenues. The authority may request such assistance from the Treasurer as may be necessary or desirable for the issuance by the authority of bonds to finance such projects and other improvements. The expense of such assistance shall be payable from the proceeds of such bonds and the State Treasurer may provide such assistance. The authority may appoint a finance or other committee of the board or one or more officers or employees to serve as the board's authorized delegate in connection with the issuance of bonds pursuant to this section. (b) Bonds issued pursuant to this section shall be obligations of the authority and shall neither be payable from nor charged upon any funds other than the revenues of the authority pledged to the payment thereof, nor shall the state or any political subdivision thereof be subject to any liability thereon except to the extent of such pledged revenues. The issuance of bonds under the provisions of this section and sections 15-31d to 15-31f , inclusive, shall not directly or indirectly or contingently obligate the state or any political subdivision thereof to levy or to pledge any form of taxation whatever therefor or to make any appropriation for their payment. The bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the state or of any political subdivision thereof, except the property of the authority or the state mortgaged or otherwise encumbered under the provisions and for the purposes of sections 15-31a to 15-31i , inclusive. The substance of such limitation shall be plainly stated on the face of each bond. Bonds issued pursuant to this section and sections 15-31d to 15-31f , inclusive, shall not be subject to any statutory limitation on the indebtedness of the state and such bonds, when issued, shall not be included in computing the aggregate indebtedness of the state in respect to and to the extent of any such limitation. (c) The bonds referred to in this section may be executed and delivered at such time or times, shall be dated, shall bear interest at such rate or rates, including variable rates to be determined in such manner as set forth in the proceedings authorizing the issuance of the bonds, provide for payment of interest on such dates, whether before or at maturity, shall mature at such time or times not exceeding thirty years from their date, have such rank or priority, be payable in such medium of payment, be issued in coupon, registered or book entry form, carry such registration and transfer privileges and be subject to purchase or redemption before maturity at such price or prices and under such terms and conditions, including the condition that such bonds be subject to purchase or redemption on the demand of the owner thereof, all as may be determined by the authority. The authority shall determine the form of the bonds, including any interest coupons to be attached thereto, the manner of execution of the bonds, the denomination or denominations of the bonds and the place or places of payment of principal and interest, which may be at any bank or trust company within or without the state. Prior to the preparation of definitive bonds, the authority may, under like restrictions, provide for the issuance of interim receipts or temporary bonds, with or without coupons, exchangeable for definitive bonds when such bonds have been executed and are available for delivery. If any of the officers whose signatures appear on the bonds or coupons cease to be officers before the delivery of any such bonds, such signatures shall, nevertheless, be valid and sufficient for all purposes, the same as if they had remained in office until delivery. (d) Any bonds issued under the authority of this section and sections 15-31d to 15-31f , inclusive, may be sold at public sale on sealed proposals or by negotiation in such manner, at such price and at such time or times as may be determined by the authority. The authority may pay from the proceeds of the bonds all costs and expenses which the authority may deem necessary or advantageous in connection with the authorization, sale and issuance thereof, including the cost of interest on any short-term financing authorized under subsection (b) of section 15-31d . (e) The principal of and interest on any bonds issued pursuant to this section shall be secured by a pledge of the revenues out of which such bonds shall be made payable. They may be secured by a mortgage covering all or any part of the project from which the revenues so pledged may be derived or by a pledge of one or more leases, sale contracts or loan agreements with respect to such project or by a pledge of one or more notes, debentures, bonds or other secured or unsecured debt obligations of any lessee or contracting party under a loan agreement or sale contract or by a pledge of reserve and sinking funds established pursuant to the resolution authorizing the issuance of the bonds and any other funds and accounts, including proceeds from investment of any of the foregoing, established pursuant to this chapter or the proceedings authorizing the issuance of such bonds, and by moneys paid under a credit facility, including, but not limited to, a letter of credit or policy of bond insurance, issued by a financial institution pursuant to an agreement authorized by such proceedings. (f) The proceedings under which the bonds are authorized to be issued pursuant to this section, and any mortgage given to secure the same, may, subject to the provisions of the general statutes, contain any agreements and provisions customarily contained in instruments securing bonds, including, but not limited to: (1) Provisions respecting custody of the proceeds from the sale of the bonds, including their investment and reinvestment until used for the cost of the project; (2) provisions respecting the fixing and collection of rents or payments with respect to the facilities of the ports and harbors of the state and any facility charges; (3) the terms to be incorporated in the lease, sale contract or loan agreement with respect to the project; (4) the maintenance and insurance of the project; (5) the creation, maintenance, custody, investment and reinvestment, and use of the revenues derived from the operation of the ports and harbors of the state; (6) establishment of reserves or sinking funds, and such accounts thereunder as may be established by the authority, and the regulation and disposition thereof; (7) the rights and remedies available in case of a default to the bondholders or to any trustee under any lease, sale contract, loan agreement, mortgage or trust indenture; (8) reimbursement agreements, remarketing agreements, standby bond purchase agreements or similar agreements in connection with obtaining any credit or liquidity facilities including, but not limited to, letters of credit or policies of bond insurance and such other agreements entered into pursuant to section 3-20a ; (9) provisions for the issuance of additional bonds on a parity with bonds theretofore issued, including establishment of coverage requirements with respect thereto; (10) covenants to do or to refrain from doing such acts and things as may be necessary or convenient or desirable in order to better secure any bonds or to maintain any federal or state exemption from tax of the interest on such bonds; and (11) provisions or covenants of like or different character from the foregoing which are consistent with the provisions of sections 15-31a to 15-31i , inclusive, and which the authority determines in such proceedings are necessary, convenient or desirable in order to better secure the bonds or bond anticipation notes, or will tend to make the bonds or bond anticipation notes more marketable, and which are in the best interests of the state. The proceedings under which the bonds are authorized, and any mortgage given to secure the same, may further provide that any cash balances not necessary (A) to pay the cost of maintaining, repairing and operating the facilities of the ports and harbors of the state, (B) to pay the principal of and interest on the bonds as the same shall become due and payable, and (C) to create and maintain reserve and sinking funds as provided in any authorizing resolution or other proceedings shall be deposited into one or more specifically designated working funds to be held in trust by the authority and applied to future debt service requirements or other port authority purposes. (g) In the discretion of the authority, bonds issued pursuant to this section may be secured by a trust indenture by and between the authority and a corporate trustee, which may be any trust company or bank having the powers of a trust company within or without the state. Such trust indenture may contain such provisions for protecting and enforcing the rights and remedies of the bondholders as may be reasonable and proper and not in violation of law, including covenants setting forth the duties of the authority in relation to the exercise of its powers pursuant to sections 15-31a to 15-31i , inclusive, and the custody, safeguarding and application of all moneys. The authority may provide by such trust indenture for the payment of the proceeds of the bonds and the revenues from the operation of the ports and harbors of the state to the trustee under such trust indenture or other depository, and for the method of disbursement thereof, with such safeguards and restrictions as it may determine. All expenses incurred in carrying out such trust indenture may be treated as a part of the operating expenses of the applicable project. If the bonds shall be secured by a trust indenture, the bondholders shall have no authority to appoint a separate trustee to represent them. (h) In connection with the issuance of bonds to finance a project or to refund bonds previously issued by the authority or the state to finance a project, the authority may create and establish one or more reserve funds to be known as special capital reserve funds and may pay into such special capital reserve funds (1) any moneys appropriated and made available by the state for the purposes of such funds, (2) any proceeds of sale of notes or bonds for a project, to the extent provided in the resolution of the authority authorizing the issuance thereof, and (3) any other moneys which may be made available to the authority for the purpose of such funds from any other source or sources. The moneys held in or credited to any special capital reserve fund established under this section, except as hereinafter provided, shall be used solely for the payment of the principal of and interest on, when due, whether at maturity or by mandatory sinking fund installments, on bonds of the authority secured by such capital reserve fund as the same become due, the purchase of such bonds of the authority, the payment of any redemption premium required to be paid when such bonds are redeemed prior to maturity; provided the authority shall have power to provide that moneys in any such fund shall not be withdrawn therefrom at any time in such amount as would reduce the amount of such funds to less than the maximum amount of principal and interest becoming due by reasons of maturity or a required sinking fund installment in the then current or any succeeding calendar year on the bonds of the authority then outstanding or the maximum amount permitted to be deposited in such fund by the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, to permit the interest on said bonds to be excluded from gross income for federal tax purposes and secured by such special capital reserve fund, such amount being herein referred to as the “required minimum capital reserve”, except for the purpose of paying such principal of, redemption premium and interest on such bonds of the authority secured by such special capital reserve becoming due and for the payment of which other moneys of the authority are not available. The authority may provide that it shall not issue bonds secured by a special capital reserve fund at any time if the required minimum capital reserve on the bonds outstanding and the bonds then to be issued and secured by the same special capital reserve fund at the time of issuance, unless the authority, at the time of the issuance of such bonds, shall deposit in such special capital reserve fund from the proceeds of the bonds so to be issued, or otherwise, an amount which, together with the amount then in such special capital reserve fund, will be not less than the required minimum capital reserve. On or before December first, annually, there is deemed to be appropriated from the state General Fund such sums, if any, as shall be certified by the chairperson or vice-chairperson of the authority to the Secretary of the Office of Policy and Management and the Treasurer, as necessary to restore each such special capital reserve fund to the amount equal to the required minimum capital reserve of such fund, and such amounts shall be allotted and paid to the authority. For the purpose of evaluation of any such special capital reserve fund, obligations acquired as an investment for any such fund shall be valued at market. Nothing contained in this section shall preclude the authority from establishing and creating other debt service reserve funds in connection with the issuance of bonds or notes of the authority which are not special capital reserve funds. Subject to any agreement or agreements with holders of outstanding notes and bonds of the authority, any amount or amounts allotted and paid to the authority pursuant to this section shall be repaid to the state from moneys of the authority at such time as such moneys are not required for any other of its corporate purposes and in any event shall be repaid to the state on the date one year after all bonds and notes of the authority theretofore issued on the date or dates such amount or amounts are allotted and paid to the authority or thereafter issued, together with interest on such bonds and notes, 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 the holders thereof, are fully met and discharged. No bonds secured by a special capital reserve fund shall be issued to pay project costs unless the authority is of the opinion and determines that revenues pledged to secure such bonds shall be sufficient to (A) pay the principal of and interest on the bonds issued to finance the project, (B) establish, increase and maintain any reserves deemed by the authority to be advisable to secure the payment of the principal of and interest on such bonds, (C) pay the cost of maintaining the project in good repair and keeping it properly insured, and (D) pay such other costs of the project as may be required. No bonds secured by a special capital reserve fund shall be issued unless the issuance of such bonds is approved by the Treasurer. Notwithstanding any other provision contained in this section, the aggregate amount of bonds secured by the special capital reserve funds authorized to be created and established by this subsection shall not exceed fifty million dollars. (i) Any pledge made by the authority shall be valid and binding from the time when the pledge is made, and the revenues or property so pledged and thereafter received by the authority 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 authority, irrespective of whether such parties have notice thereof. Neither the resolution nor any other instrument by which a pledge is created need be recorded. (j) The authority shall have power out of any funds available therefor to purchase bonds or notes of the authority or the state issued pursuant to this section. The authority may hold, pledge, cancel or resell such bonds, subject to and in accordance with agreements with bondholders. (k) Whether or not the notes and bonds are of such form and character as to be negotiable instruments under the terms of the Uniform Commercial Code, the notes and bonds are hereby made negotiable instruments within the meaning of and for all purposes of the Uniform Commercial Code, subject only to the provisions of the notes and bonds for registration. (l) Any moneys held by the authority with respect to the ports and harbors of the state or by a trustee pursuant to a trust indenture, subject to the provisions of such indenture, including proceeds from the sale of any bonds and notes, and revenues, receipts and income from the operation of the ports and harbors of the state may be invested and reinvested in such obligations, securities and other investments, including, without limitation, participation certificates in the Short Term Investment Fund created in section 3-27a , or deposited or redeposited in such bank or banks, all as shall be authorized by the authority in the proceedings authorizing the issuance of the bonds and notes. (m) For the purposes of sections 15-31a to 15-31i , inclusive, the costs of the project payable out of the proceeds of bonds issued pursuant to this section shall include: (1) Expenses and obligations incurred for labor and materials in connection with the construction of the project; (2) the cost of acquiring by purchase, if such purchase shall be deemed expedient, and the amount of any award or final judgment in any proceedings to acquire by condemnation, such land, property rights, rights-of-way, franchises, easements and other interests in land as may be deemed necessary or convenient in connection with such construction or with the operation of the project, and the amount of any damages incident thereto; (3) the costs of all machinery and equipment acquired in connection with the project; (4) reserves for the payment of the principal of and interest on any notes and bonds issued pursuant to this section and interest accruing on any such notes, during construction of the project and for six months after completion of such construction; (5) initial working capital, expenses of administration properly chargeable to the construction or acquisition of the project, legal, architectural and engineering expenses and fees, costs of audits, costs of preparing and issuing any notes and bonds pursuant to this section; and (6) all other items of expense not elsewhere specified incident to the planning, acquisition and construction of the project or of the placing of the same in operation. (n) For purposes of sections 15-31a to 15-31i , inclusive, the term “project” shall refer to the renovations and improvements to be acquired and constructed at the ports and harbors of the state as may be specified from time to time by the board in a resolution as contemplated by subsection (a) of this section.

Legislative History

(June Sp. Sess. P.A. 15-5, S. 3.) History: June Sp. Sess. P.A. 15-5 effective July 1, 2016.