SB 416 — AN ACT LIMITING THE AGGREGATE AMOUNTS OF GENERAL OBLIGATION BONDS THAT MAY BE ISSUED BY THE STATE.

AN ACT LIMITING THE AGGREGATE AMOUNTS OF GENERAL OBLIGATION BONDBONDS ALLOCATIONSTHAT ANDMAY ISSUANCES.BE ISSUED BY THE STATE.

General Assembly   ProposedCommittee Bill No.

416   January Session, 2017   LCO No.

31516114   *03151**06114SB00416FIN* Referred to Committee on FINANCE, REVENUE AND BONDING   Introduced by:

  SEN.(FIN)   AN ACT LIMITING THE AGGREGATE AMOUNTS OF GENERAL OBLIGATION BONDS THAT MAY BE ISSUED BY THE STATE.

FASANO,Be 34thit Dist.enacted by the Senate and House of Representatives in General Assembly convened:

Section 1.

Section 3-21 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2017):

(a) No bonds, notes or other evidences of indebtedness for borrowed money payable from General Fund tax receipts of the state shall be authorized by the General Assembly or issued except such as shall not cause the aggregate amount of the total amount of bonds, notes or other evidences of indebtedness payable from General Fund tax receipts authorized by the General Assembly but which have not been issued and the total amount of such indebtedness which has been issued and remains outstanding to exceed one and six-tenths times the total General Fund tax receipts of the state for the fiscal year in which any such authorization will become effective or in which such indebtedness is issued, as estimated for such fiscal year by the joint standing committee of the General Assembly having cognizance of finance, revenue and bonding in accordance with section 2-35.

In computing such aggregate amount of indebtedness at any time, there shall be excluded or deducted, as the case may be, (1) the principal amount of all such obligations as may be certified by the Treasurer (A) as issued in anticipation of revenues to be received by the state during the period of twelve calendar months next following their issuance and to be paid by application of such revenue, or (B) as having been refunded or replaced by other indebtedness the proceeds and projected earnings on which or other funds are held in escrow to pay and are sufficient to pay the principal, interest and any redemption premium until maturity or earlier planned redemption of such indebtedness, or (C) as issued and outstanding in anticipation of particular bonds then unissued but fully authorized to be issued in the manner provided by law for such authorization, provided, as long as any of such obligations are outstanding, the entire principal amount of such particular bonds thus authorized shall be deemed to be outstanding and be included in such aggregate amount of indebtedness, or (D) as payable solely from revenues of particular public improvements, (2) the amount which may be certified by the Treasurer as the aggregate value of cash and securities in debt retirement funds of the state to be used to meet principal of outstanding obligations included in such aggregate amount of indebtedness, (3) every such amount as may be certified by the Secretary of the Office of Policy and Management as the estimated payments on account of the costs of any public work or improvement thereafter to be received by the state from the United States or agencies thereof and to be used, in conformity with applicable federal law, to meet principal of obligations included in such aggregate amount of indebtedness, (4) all authorized and issued indebtedness to fund any budget deficits of the state for any fiscal year ending on or before June 30, 1991, (5) all authorized indebtedness to fund the program created pursuant to section 32-285, (6) all authorized and issued indebtedness to fund any budget deficits of the state for any fiscal year ending on or before June 30, 2002, (7) all indebtedness authorized and issued pursuant to section 1 of public act 03-1 of the September 8 special session, (8) all authorized indebtedness issued pursuant to section 3-62h, (9) any indebtedness represented by any agreement entered into pursuant to subsection (b) or (c) of section 3-20a as certified by the Treasurer, provided the indebtedness in connection with which such agreements were entered into shall be included in such aggregate amount of indebtedness, and (10) all indebtedness authorized and issued pursuant to section 3-20g.

In computing the amount of outstanding indebtedness, only the accreted value of any capital appreciation obligation or any zero coupon obligation which has accreted and been added to the stated initial value of such obligation as of the date of any computation shall be included.

(b) The foregoing limitation on the aggregate amount of indebtedness of the state shall not prevent the issuance of (1) obligations to refund or replace any such indebtedness existing at any time in an amount not exceeding such existing indebtedness, or (2) obligations in anticipation of revenues to be received by the state during the period of twelve calendar months next following their issuance, or (3) obligations payable solely from revenues of particular public improvements.

(c) For the purposes of this section, but subject to the exclusions or deductions herein provided for, the state shall be deemed to be indebted upon, and to issue, all bonds and notes issued or guaranteed by it and payable from General Fund tax receipts.

To the extent necessary because of the debt limitation herein provided, priorities with respect to the issuance or guaranteeing of bonds or notes by the state shall be determined by the State Bond Commission.

(d) The General Assembly shall not approve any bill which authorizes the issuance of any bonds, notes or other evidences of indebtedness unless such bill has attached to it a certification by the Treasurer that the amount of authorizations within the bill will not cause the total amount of indebtedness calculated in accordance with this section to exceed the limit for indebtedness set forth in this section.

The president pro tempore of the Senate or the speaker of the House of Representatives, or their designees, shall notify the Treasurer prior to consideration of such bill in the first chamber.

(e) (1) The State Bond Commission shall not adopt any resolution which authorizes the issuance of any bonds, notes or other evidences of indebtedness unless such resolution has attached to it a certification by the Treasurer that the amount of such authorization will not cause the total amount of indebtedness calculated in accordance with this section to exceed the limit for indebtedness set forth in this section.

(2) The State Bond Commission shall not adopt, on or after January 1, 2017, any resolution which authorizes the issuance of general obligation bonds except such as shall not cause the aggregate amount of such bonds authorized by said commission to exceed two billion dollars in any calendar year.

(f) The Treasurer shall not issue, on or after July 1, 2017, general obligation bonds except such as shall not cause the aggregate amount of such bonds issued to exceed two billion dollars in any fiscal year.

[(f)] (g) The provisions of this section shall not apply to any bonds, notes or other evidences of indebtedness for borrowed money which are issued for the purpose of:

(1) Meeting cash flow needs;

or (2) covering emergency needs in times of natural disaster.

This act shall take effect as follows and shall amend the following sections:

Section 1 July 1, 2017 3-21 Statement of Purpose:

To limit (1) the authorization of issuance of general obligation bonds by the State Bond Commission to not more than two billion dollars in a calendar year, and (2) the issuance of general obligation bonds by the Treasurer to not more than two billion dollars in a fiscal year.

[Proposed deletions are enclosed in brackets.

Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.] Co-Sponsors:

FASANO, 34th Dist.;

SEN.

 S.B. AN ACT LIMITING GENERAL OBLIGATION BOND ALLOCATIONS AND ISSUANCES.

Be416 it enacted by the Senate and House of Representatives in General Assembly convened:

That the general statutes be amended to limit (1) the allocation of general obligation bonds to not more than two billion dollars in any calendar year, and (2) the issuance of general obligation bonds to not more than two billion dollars in any fiscal year.

Statement of Purpose:

To limit the state's bond indebtedness.