§ 32-23j — Payment of bonds to be obligation of corporation. Capital reserve funds. Annual appropriation.

Connecticut § 32-23j

• Jurisdiction: Connecticut
• Title 32: Commerce and Economic and Community Development
• Ch. 579: Connecticut Innovations, Incorporated

Text

(a) Bonds or notes of the corporation issued under the provisions of section 32-23f shall not be deemed to constitute a debt or liability of the state or of any municipality thereof or a pledge of the faith and credit of the state or of any such municipality and shall not constitute bonds or notes issued or guaranteed by the state within the meaning of section 3-21, but shall be payable solely from the revenues and funds herein provided therefor. All such bonds or notes shall contain on the face thereof a statement to the effect that neither the state of Connecticut nor any municipality thereof other than the corporation shall be obligated to pay the same or the interest thereon and that neither the faith and credit nor the taxing power of the state of Connecticut or of any municipality is pledged to the payment of the principal of or the interest on such bonds or notes. (b) The corporation 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, to the extent provided in the resolution of the corporation authorizing the issuance thereof, and (3) any other moneys which may be made available to the corporation 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 bonds of the corporation secured by such special capital reserve fund as the same become due, the purchase of such bonds of the corporation, the payment of interest on such bonds of the corporation or the payment of any redemption premium required to be paid when such bonds are redeemed prior to maturity; provided, the corporation shall have power to provide that moneys in any such fund shall not be withdrawn therefrom at any time in such amount as would reduce the amount of such funds to less than the maximum amount of principal and interest becoming due by reason of maturity or a required sinking fund installment in the succeeding calendar year on the bonds of the corporation then outstanding and secured by such special capital reserve fund or such lesser amount specified by the corporation in its resolution authorizing the issuance of any such bonds, 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 corporation secured by such special capital reserve becoming due and for the payment of which other moneys of the corporation are not available. The corporation may provide that it shall not issue bonds at any time if the required minimum capital reserve on the bonds outstanding and the bonds then to be issued and secured by a special capital reserve fund will exceed the amount of such special capital reserve fund at the time of issuance, unless the corporation, 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 commissioner to the Secretary of the Office of Policy and Management and Treasurer of the state, 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 corporation. 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 amortized cost. Nothing contained in this section shall preclude the corporation from establishing and creating other debt service reserve funds in connection with the issuance of bonds or notes of the corporation. Subject to any agreement or agreements with holders of outstanding notes and bonds of the corporation, any amount or amounts allotted and paid to the corporation by the state pursuant to this section shall be repaid to the state from moneys of the corporation 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 corporation theretofore issued on the date or dates such amount or amounts are allotted and paid to the corporation 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. Notwithstanding any other provision contained in this section, the aggregate amount of bonds secured by such special capital reserve funds authorized to be created and established by this section, shall not exceed four hundred fifty million dollars. Only economic development projects may be assisted or financed by such bonds and the proceeds of such bonds shall not be used for such purpose unless the corporation is of the opinion and determines that the revenues derived from the economic development project or projects shall be sufficient (1) to pay the applicable principal of and interest on the bonds, the proceeds of which are used to finance the economic development project or projects, (2) to establish, increase and maintain any reserves deemed by the corporation to be advisable to secure the payment of the principal of and interest on such bonds, (3) unless the contract with the person obligates the person to pay for the maintenance and insurance of the economic development project, to pay the cost of maintaining the economic development project in good repair and keeping it properly insured, and (4) to pay such other costs or taxes on the economic development project as may be required and that such person is found by the corporation to be financially responsible and presumptively able to comply with the terms and conditions of any lease, conditional sale or credit agreement or loan agreement, agreement of sale, mortgage or other agreement as made by it with the corporation with respect to the industrial project; in making these determinations and this finding, the corporation shall consider all information reasonably available to it including information as to the business reputation of such person, the character and ability of its management, the adequacy of its financial resources, the market demand for its products, the adequacy of its distribution methods, its past earnings and the likelihood that it can successfully meet any required payments under such lease, mortgage, loan agreement or other agreement out of current income. See Sec. 32-23s re interpretation of amendments to this section effective on June 29, 1981.

Legislative History

(1972, P.A. 195, S. 9; P.A. 73-599, S. 15; P.A. 75-513, S. 4, 5; P.A. 76-140, S. 3, 4; 76-430, S. 2, 3; P.A. 77-155, S. 3; 77-299, S. 4; 77-614, S. 19, 610; P.A. 78-303, S. 116, 136; P.A. 80-171, S. 2; 80-344; 80-465, S. 4; P.A. 81-384, S. 8, 13; P.A. 84-512, S. 27, 30; P.A. 87-536, S. 6, 7; P.A. 88-265, S. 11, 36; P.A. 01-179, S. 16; June 12 Sp. Sess. P.A. 12-1, S. 176; P.A 13-123, S. 15.) History: P.A. 73-599 replaced Connecticut development commission and its chairman with Connecticut development authority and commissioner of commerce, referred to municipalities rather than political subdivisions and rephrased provision re use of bond proceeds for clarity; P.A. 75-513 added Subsec. (c) re security for bonds and notes for water projects; P.A. 76-140 made Subsec. (c) applicable to ferry facility projects; P.A. 76-430 added Subsec. (d) re bonds and notes for recreational projects; P.A. 77-155 made Subsec. (c) applicable to railroad facility projects; P.A. 77-299 made Subsec. (c) applicable to municipal civic and cultural center projects; P.A. 77-614 replaced commissioner of finance and control with secretary of the office of policy and management and made “commissioner”, referring to commissioner of commerce, refer instead to commissioner of economic development; P.A. 78-303 deleted reference to Sec. 4-60a in Subsec. (a); P.A. 80-171 made Subsec. (c) applicable to public transportation facility projects; P.A. 80-344 increased bond limit in Subsec. (b) from $100,000,000 to $200,000,000; P.A. 80-465 made Subsec. (d) applicable to urban projects; P.A. 81-384 increased the maximum amount that may be secured by the special capital reserve funds from $200,000,000 to $300,000,000, specified that bonds be used only for “industrial” projects in Subsec. (b) and deleted Subsecs. (c) and (d) which had prohibited use of bond proceeds for water projects, ferry facilities, railroad facilities, urban projects, etc; P.A. 84-512 deleted references to Secs. 4-5 and 4-24a in Subsec. (a); P.A. 87-536 amended Subsec. (b) to allow the authority to specify a lessened capital reserve requirement in a bond authorizing resolution and set maximum amount of bonds secured by special capital reserve funds at $450,000,000; P.A. 88-265 changed industrial project to economic development project and deleted provisions re Connecticut Development Credit Corporation; (Revisor's note: In 1993 the obsolete reference in Subsec. (a) to repealed Sec. 36-322 was deleted editorially by the Revisors); P.A. 01-179 amended Subsec. (a) to replace references to chapters 578 and 579 and Sec. 10-320b(a) with reference to authority legislation as defined in Sec. 32-23d(hh); June 12 Sp. Sess. P.A. 12-1 replaced “authority” with “corporation” and, in Subsec. (a), replaced reference to Sec. 32-23d(hh) with reference to Sec. 32-23f, effective July 1, 2012; P.A. 13-123 made technical changes in Subsec. (b), effective June 18, 2013.