(a)For the purposes of this section, “required minimum capital reserve” means the maximum amount permitted to be deposited in a special capital reserve fund by the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time, to permit the interest on the bonds of the Connecticut Municipal Redevelopment Authority secured by such special capital reserve fund to be excluded from gross income for federal tax purposes.
(b)The authority may, in connection with the issuance of bonds, the refunding of bonds previously issued by the authority or the issuance of bonds to effect a refinancing or other restructuring with respect to one or more projects, establish one or more special capital reserve funds. The authority may p
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(a) For the purposes of this section, “required minimum capital reserve” means the maximum amount permitted to be deposited in a special capital reserve fund by the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time, to permit the interest on the bonds of the Connecticut Municipal Redevelopment Authority secured by such special capital reserve fund to be excluded from gross income for federal tax purposes. (b) The authority may, in connection with the issuance of bonds, the refunding of bonds previously issued by the authority or the issuance of bonds to effect a refinancing or other restructuring with respect to one or more projects, establish one or more special capital reserve funds. The authority may pay into such special capital reserve funds (1) any moneys appropriated and made available by the state for the purposes of such special capital reserve funds, (2) any proceeds of the sale of bonds or notes of the authority, to the extent provided in the resolution of said authority authorizing the issuance of such bonds or notes, and (3) any moneys made available to the authority from any other source for the purposes of such special capital reserve funds. The amount of bonds of the authority secured by special capital reserve funds shall not exceed fifty million dollars in the aggregate. (c) (1) Except as otherwise provided in this section, the moneys held in or credited to any special capital reserve fund established under this section shall be used for: (A) The payment of the principal and interest as such payments become due, whether due at maturity or by mandatory sinking fund installments, on bonds of the authority secured by such special capital reserve fund; or (B) The purchase of such bonds and the payment of any redemption premium required to be paid when such bonds are redeemed prior to maturity, including reimbursement of a provider of bond insurance or of a credit or liquidity facility that has paid such redemption premium. (2) The authority may prohibit, except for the purpose of paying the principal of and interest and redemption premium on bonds of the authority secured by a special capital reserve fund for which other moneys of the authority are not available, the withdrawal of moneys in any special capital reserve fund in an amount that would result in the balance of such special capital reserve fund being less than (A) the maximum amount of principal and interest becoming due by reason of maturity or a required sinking fund installment on the bonds of the authority outstanding in the then current or any succeeding calendar year, or (B) the required minimum capital reserve. (3) The authority may provide at any time that it shall not issue bonds secured by a special capital reserve fund if the required minimum capital reserve on the bonds outstanding and the bonds to be issued and secured by the same special capital reserve fund at the time of issuance exceeds the moneys in the special capital reserve fund, unless the authority deposits proceeds from the bonds to be issued or moneys from other sources into such special capital reserve fund, in an amount that, together with the amount then in such special capital reserve fund, will be not less than the required minimum capital reserve. (d) (1) (A) Prior to December first, annually, the authority shall deposit, for any special capital reserve fund for which the balance is below the required minimum capital reserve, the full amount required to meet the required minimum capital reserve for such special capital reserve fund. Such deposit shall be made from any resources available to the authority not otherwise pledged or dedicated to another purpose. (B) On or prior to December first, annually, but after the authority has made any deposits required under subparagraph (A) of this subdivision, there shall be deemed appropriated from the General Fund any sums necessary to restore the balance of each such special capital reserve fund to the required minimum capital reserve amount. The amount of any such sum shall be allotted and paid to the authority upon the certification of such sum by the chairperson or vice-chairperson of the authority to the Secretary of the Office of Policy and Management, the Treasurer and the joint standing committees of the General Assembly having cognizance of matters relating to planning and development and finance, revenue and bonding. (C) For the purposes of this subdivision, obligations acquired as an investment for any special capital reserve fund shall be valued at amortized cost. (2) Subject to any agreement or agreements with holders of outstanding bonds or notes of the authority, any amount allotted and paid to the authority pursuant to subdivision (1) of this subsection shall be repaid to the state from moneys of the authority, at such time as such moneys are not required for any other corporate purposes of the authority. Such repayment shall occur not later than one year after the date the following liabilities are met and fully discharged by the authority: (A) All bonds and notes of the authority that were issued before, on or after the date such allotted amount was paid to the authority; (B) all interest on such bonds and notes and on any unpaid installments of interest; and (C) all costs and expenses incurred in connection with any action or proceeding by or on behalf of the holders of such bonds or notes. (e) (1) The authority shall not issue bonds secured by a special capital reserve fund until and unless: (A) The authority has determined, and has provided such determination to the Secretary of the Office of Policy and Management or the secretary's deputy and to the Treasurer or the Deputy Treasurer, that the revenues from the project shall be sufficient to (i) pay the principal of and interest on the bonds issued to finance the project, (ii) establish, increase and maintain any reserves deemed advisable by the authority to secure the payment of the principal of and interest on such bonds, (iii) pay the cost of maintaining the project in good repair and properly insured, and (iv) pay such other costs of the project as may be required; (B) The issuance has been approved by the Secretary of the Office of Policy and Management or the secretary's deputy; and (C) The authority has provided the documentation required under subsection (a) of section 1-124 to the Treasurer or the Deputy Treasurer and the issuance has been approved by the Treasurer or the Deputy Treasurer pursuant to said subsection. (2) The approval by the Secretary of the Office of Policy and Management or the secretary's deputy may provide for the waiver or modification of the requirements of this section as the secretary deems necessary or appropriate to effectuate such issuance, subject to any applicable tax covenants of the authority and the state. (f) Nothing in this section shall preclude the authority from establishing other debt service reserve funds that are not special capital reserve funds in connection with the issuance of bonds or notes of the authority.