SB 304 — AN ACT IMPLEMENTING THE RECOMMENDATIONS OF THE CONNECTICUT HIGHER EDUCATION SUPPLEMENTAL LOAN AUTHORITY.

Substitute Senate GeneralBill Assembly File No.

215304 FebruaryPublic Session,Act 2024 Substitute Senate Bill No.

30424-64 Senate,AN AprilACT 3,IMPLEMENTING 2024THE TheRECOMMENDATIONS CommitteeOF onTHE HigherCONNECTICUT EducationHIGHER andEDUCATION EmploymentSUPPLEMENTAL AdvancementLOAN reportedAUTHORITY. through SEN.

SLAP of the 5th Dist., Chairperson of the Committee on the part of the Senate, that the substitute bill ought to pass.

AN ACT IMPLEMENTING THE RECOMMENDATIONS OF THE CONNECTICUT HIGHER EDUCATION SUPPLEMENTAL LOAN AUTHORITY.

(NEW) (Effective Julyfrom 1,passage) 2024) Any resident of the state otherwise qualifying for an authority loan, as defined in section 10a-223 of the general statutes, shall not be disqualified for the authority loan by reason of being under the age of eighteen years and, for the purpose of applying for, receiving and repaying an authority loan, any such person shall be deemed to have the full legal capacity to act and shall have all the rights, powers, privileges and obligations of a person who is eighteen years of age or older, with respect to an authority loan.loan, provided such person obtains such authority loan with a cosigner, as defined in 15 USC 1650(a), as amended from time to time, who is eighteen years of age or older.

(b) Notwithstanding the foregoing, (1) the constituent units of the sSB304state /system Fileof higher education may participate in one or more Substitute Senate Bill No.

215304 1education sSB304loan Fileprograms No.with the authority and may incur indebtedness pursuant to authority loans, and (2) the authority may create and establish one or more reserve funds to be known as special capital reserve funds and may [pay into] fund such special capital reserve funds with (A) any moneys appropriated and made available by the state for the purposes of such funds, (B) any proceeds of the sale of notes or bonds, to the extent provided in the resolution of the authority authorizing the issuance thereof, [and] (C) any other moneys [which] that may be made available to the authority for the purpose of such funds from any other source or sources, and (D) any surety policy or other similar instrument valued at par and payable or available to be drawn upon on or before any date by which debt service on the bonds secured thereby is required to be paid and issued by a financial institution that is rated "AA" or better by any nationally recognized statistical rating organization and approved by the State Treasurer.

215 state system of higher education may participate in one or more education loan programs with the authority and may incur indebtedness pursuant to authority loans, and (2) the authority may create and establish one or more reserve funds to be known as special capital reserve funds and may [pay into] fund such special capital reserve funds with (A) any moneys appropriated and made available by the state for the purposes of such funds, (B) any proceeds of the sale of notes or bonds, to the extent provided in the resolution of the authority authorizing the issuance thereof, [and] (C) any other moneys [which] that may be made available to the authority for the purpose of such funds from any other source or sources, and (D) any surety policy or other similar instrument valued at par and payable or available to be drawn upon on or before any date by which debt service on the bonds secured thereby is required to be paid and issued by a financial institution that is rated "AA" or better by any nationally recognized statistical rating organization and approved by the State Treasurer.

provided, the authority shall have power to [provide] require 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 any succeeding calendar year on the bonds of the authority then outstanding and secured by such special capital reserve fund, or such lesser amount specified by the authority 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 premiumPublic andAct interest on such bonds of the authority secured by such sSB304 / File No.

21524-64 2 sSB304of File4 Substitute Senate Bill No.

215304 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.

Subject to any agreement or agreements with owners 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, togetherPublic withAct 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 owners thereof, are sSB304 / File No.

21524-64 3 sSB304of File4 Substitute Senate Bill No.

215304 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 owners thereof, are fully met and discharged.

ThisApproved actMay shall28, take2024 effectPublic asAct followsNo. and shall amend the following sections:

Section24-64 14 Julyof 1,4 2024 New section Sec.

2 July 1, 2024 10a-232(b) Statement of Legislative Commissioners:

In Section 1, "for the authority loan" was added after "disqualified", "such a loan" was changed to "an authority loan" and "of full age, with respect thereto" was changed to "who is eighteen years of age or older, with respect to an authority loan" for clarity.

HED Joint Favorable Subst.

sSB304 / File No.

215 4 sSB304 File No.

215 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

In general, fiscal impacts are based upon a variety of informational sources, including the analyst’s professional knowledge.

Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note State Impact:

None Municipal Impact:

None Explanation The bill, which makes procedural changes to the Connecticut Higher Education Supplemental Loan Authority (CHESLA), could expand student access to CHESLA loans, but is not anticipated to have a fiscal impact to the state.

The Out Years State Impact:

None Municipal Impact:

None sSB304 / File No.

215 5 sSB304 File No.

215 OLR Bill Analysis sSB 304 AN ACT IMPLEMENTING THE RECOMMENDATIONS OF THE CONNECTICUT HIGHER EDUCATION SUPPLEMENTAL LOAN AUTHORITY.

SUMMARY This bill allows Connecticut residents who are not yet aged 18 to sign for a Connecticut Higher Education Supplemental Loan Authority (CHESLA) loan.

They must be otherwise eligible for the loan, and the bill deems them to have full capacity to act on the loan with all the powers, privileges, and obligations of someone who is aged 18, including as it relates to applying, receiving, and repaying the loan.

In practice, some people applying for college are under 18 when an education loan must be signed.

By law, CHESLA may create special capital reserve funds (SCRFs) to pay the interest and principal on bonds it issues.

These SCRFs must be backed by money or certain other financial instruments.

The bill allows CHESLA to also use a surety policy or other similar instrument, valued at par and payable on or before any date by which debt service is due, to fund SCRFs.

The surety policy or other instrument must be issued by a financial institution with at least an “AA” rating by a nationally recognized statistical rating organization and approved by the treasurer.