SB 264 — AN ACT CONCERNING THE BONDING AUTHORITY OF THE CONNECTICUT MUNICIPAL REDEVELOPMENT AUTHORITY, THE REPORTING OF MATERIAL FINANCIAL OBLIGATIONS BY STATE AGENCIES, TAX-EXEMPT PROCEEDS FUND REFERENCES AND THE NOTIFICATION OF THE SALE OR LEASE OF PROJECTS FINANCED WITH BOND PROCEEDS.

GeneralSenate Assembly Raised Bill No.

264 FebruaryPublic Session,Act 2024 LCO No.

210424-62 ReferredAN toACT CommitteeCONCERNING onTHE GOVERNMENTBONDING ADMINISTRATIONAUTHORITY OF THE CONNECTICUT MUNICIPAL REDEVELOPMENT AUTHORITY, THE REPORTING OF MATERIAL FINANCIAL OBLIGATIONS BY STATE AGENCIES, TAX-EXEMPT PROCEEDS FUND REFERENCES AND ELECTIONSTHE IntroducedNOTIFICATION by:OF THE SALE OR LEASE OF PROJECTS FINANCED WITH BOND PROCEEDS.

(GAE) AN ACT CONCERNING THE BONDING AUTHORITY OF THE CONNECTICUT MUNICIPAL REDEVELOPMENT AUTHORITY, THE REPORTING OF MATERIAL FINANCIAL OBLIGATIONS BY STATE AGENCIES, TAX-EXEMPT PROCEEDS FUND REFERENCES AND THE NOTIFICATION OF THE SALE OR LEASE OF PROJECTS FINANCED WITH BOND PROCEEDS.

LCOAll 2104such 1bonds, notes or other obligations shall contain on the face thereof a statement to the effect that, unless otherwise provided by law, neither the state of 18Connecticut nor any political subdivision thereof otherthantheauthority shallbeobligatedtopay thesame or theinterest Senate Bill No.

264 All such bonds, notes or other obligations shall contain on the face thereof a statement to the effect that, unless otherwise provided by law, neither the state of Connecticut nor any political subdivision thereof otherthantheauthority shallbeobligatedtopay thesame or theinterest thereof except from revenues or other funds of the authority and that neither the faith and credit nor the taxing power of the state of Connecticut or of any political subdivision thereof other than the authority is pledged to the payment of the principal of, or the interest on, such bonds, notes or other obligations.

The authority shall protect, save harmless and indemnify its directors, officers or employees from financial loss and expense, including legal fees and costs, if any, arising out of any claim, demand, suit or judgment by reason of alleged negligence or alleged deprivation of any person's civil rights or any other act or omission resulting in damage or injury, if the director, officer or employee is found to have been acting in the discharge of his or her duties or within the scope of his or her employment and such act or omission is found not to have been wanton, reckless, wilful or malicious.] [(l)] (k) The board of directors of the authority [shall have power to] LCOmay 2104purchase 2bonds, notes or other obligations of 18the Billauthority No.out of any funds available for such purpose.

264The authority may purchasehold, bonds,cancel notes or otherPublic obligationsAct ofNo. the authority out of any funds available for such purpose.

The24-62 authority2 may hold, cancel or resellsuchbonds, notesor otherobligationssubjectto andinaccordance with agreements with holders of its18 bonds,Senate notesBill andNo. other obligations.

264 resellsuchbonds, notesor otherobligationssubjectto andinaccordance with agreements with holders of its bonds, notes and other obligations.

[(o)] (n) The authority may make representations and agreements for the benefit of the holders of any bonds, notes or other obligations of the state which are necessary or appropriate to ensure the exclusion from gross income for federal income tax purposes of interest on bonds, notes or other obligations of the state from taxation under the Internal Revenue Code of 1986 or any subsequent corresponding internal revenue code of the United States, as amended from time to time, LCOPublic 2104Act 3 of 18 Bill No.

24-62 3 of 18 Senate Bill No.

(b) In the event any bond, note or other obligation of the authority cannot be paid by the authority, the state shall assume the liability of and make payment on such debt.] (a)Public ForAct the purposes of this section, "required minimum capital LCO 2104 4 of 18 Bill No.

26424-62 reserve"4 means the maximum amount permitted to be deposited in a special capital reserve fund by the Internal Revenue Code of 1986,18 orSenate anyBill subsequentNo. corresponding internal revenue code of the United States, asamendedfromtime to time, to permit theinterestonthebonds of the Connecticut Municipal Redevelopment Authority secured by such special capital reserve fund to be excluded from gross income for federal tax purposes.

264 (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, asamendedfromtime to time, to permit theinterestonthebonds of the Connecticut Municipal Redevelopment Authority secured by such special capital reserve fund to be excluded from gross income for federal tax purposes.

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,Public includingAct reimbursementNo. of a provider of bond insurance or of a credit or liquidity facility that has paid such redemption premium.

(2)24-62 The authority may prohibit, except for the purpose of paying the LCO 2104 5 of 18 Senate Bill No.

264 principalmaturity, ofincluding andreimbursement interest and redemption premium on bonds of the authority secured by a specialprovider capital reserve fund for which other moneys of thebond authorityinsurance areor not available, the withdrawal of moneysa incredit anyor specialliquidity capitalfacility reserve fund in an amount that wouldhas resultpaid in the balance of such specialredemption capitalpremium. 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.

(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.

(B)Onor prior to December first,annually,but after theauthority has made any deposits required under subparagraph (A) of this subdivision, there shall be deemed appropriated from the General Fund anyPublic sumsAct necessaryNo. to restore the balance of each such special capital reserve fund to the required minimum capital reserve amount.

The24-62 amount of any such sum shall be allotted andpaid 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 LCO 2104 6 of 18 Senate Bill No.

264 Assemblyany havingsums cognizancenecessary to restore the balance of matterseach relatingsuch tospecial planningcapital andreserve developmentfund andto finance,the revenuerequired andminimum bonding.capital reserve amount.

The amount of any such sum shall be allotted andpaid 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.

(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 principalPublic ofAct andNo. 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;

24-62 7 of 18 Senate Bill No.

264 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;

and LCO(C) 2104The 7authority has provided the documentation required under subsection (a) of 18section Bill1-124 No.to the Treasurer or the Deputy Treasurer and the issuance has been approved by the Treasurer or the Deputy Treasurer pursuant to said subsection.

264 (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.

(b) (1) Before any person incurs any financial obligation of the state or enters into any agreement to covenants, events of default, remedies, priorityPublic rightsAct orNo. other similar terms in connection with a financial obligation of the state, where such financial obligation (A) is in excess of one million dollars, or (B) encumbers property or rights of the state material to the operations of the state, such person shall notify the Treasurer of such proposed financial obligation or agreement and submit any documents pursuant to which such financial obligation is to beincurredorsuchagreementistobeenteredinto.Nosuchpersonshall incur any such financial obligation or enter into any such agreement until such person has received a written acknowledgment pursuant to subdivision (2) of this subsection.

(2)24-62 Upon receipt of such notification and documents, the Treasurer LCO 2104 8 of 18 Senate Bill No.

264 shallpriority determinerights whetheror other similar terms in connection with a financial obligation of the informationstate, providedwhere such financial obligation (A) is adequatein forexcess of one million dollars, or (B) encumbers property or rights of the state material to the operations of the state, such person shall notify the Treasurer of such proposed financial obligation or agreement and submit any documents pursuant to timelywhich meetsuch requiredfinancial disclosureobligation obligationsis underto federalbeincurredorsuchagreementistobeenteredinto.Nosuchpersonshall securitiesincur law.any such financial obligation or enter into any such agreement until such person has received a written acknowledgment pursuant to subdivision (2) of this subsection.

(2) Upon receipt of such notification and documents, the Treasurer shall determine whether the information provided is adequate for the Treasurer to timely meet required disclosure obligations under federal securities law.

(x) Notwithstanding any provision of the general statutes, public acts or special acts, [upon] any sale, lease or other disposition to or use by a nongovernmental entity of all or a portion of any project financed with proceeds of bonds of the state the interest on which is not included in grossPublic incomeAct pursuantNo. to Section 103 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time, [amended,] that would otherwise cause such bonds to be treated as private activity bonds within the meaning of Section 141 of said internal revenue code [, the] shall be subject to the prior approval of the Treasurer.

The24-62 Treasurer is authorized to transfer all or a portion of the proceeds received with respect to and at the time of such disposition or use, in an amount not less than the amount required by said internal revenue code to preserve the exclusion from gross income of interest on such bonds, (1) to the General Fund to pay debt service on, including redemption, defeasance or purchase of, outstanding bonds of the state the interest on which is not included in gross income pursuant to Section 103 of said internal revenue code, (2) with the approval of the State Bond Commission, in LCO 2104 9 of 18 Senate Bill No.

264 lieugross ofincome thepursuant issuanceto ofSection bonds,103 toof the appropriateInternal accountRevenue orCode fundof for1986, any projects or purposesany authorizedsubsequent bycorresponding theinternal Staterevenue Bondcode Commissionof pursuant to a bond act and with the sameUnited forceStates, and effect as bondamended proceeds,from therebytime reducingto thetime, authority[amended,] tothat issuewould bondsotherwise bycause such dollarbonds amount,to providedbe intreated anyas eventprivate thatactivity anybonds suchwithin transferthe doesmeaning notof causeSection the141 interestof onsaid theinternal subjectrevenue bondscode to[, becomethe] includedshall inbe grosssubject income pursuant to Sectionthe 103prior approval of saidthe internalTreasurer. revenue code.

The Treasurer is authorized to transfer all or a portion of the proceeds received with respect to and at the time of such disposition or use, in an amount not less than the amount required by said internal revenue code to preserve the exclusion from gross income of interest on such bonds, (1) to the General Fund to pay debt service on, including redemption, defeasance or purchase of, outstanding bonds of the state the interest on which is not included in gross income pursuant to Section 103 of said internal revenue code, (2) with the approval of the State Bond Commission, in lieu of the issuance of bonds, to the appropriate account or fund for any projects or purposes authorized by the State Bond Commission pursuant to a bond act and with the same force and effect as bond proceeds, thereby reducing the authority to issue bonds by such dollar amount, provided in any event that any such transfer does not cause the interest on the subject bonds to become included in gross income pursuant to Section 103 of said internal revenue code.

(1) Complete financial statements and accompanying footnotes for the combined investment funds prepared in accordance with generally accepted accounting principles, which financial statements shall be auditedPublic inAct accordanceNo. with generally accepted auditing standards and supplementary schedules depicting the interests of the component retirement plans and trust funds;

24-62 10 of 18 Senate Bill No.

264 audited in accordance with generally accepted auditing standards and supplementary schedules depicting the interests of the component retirement plans and trust funds;

[including the financial statements of the tax-exempt proceeds fund LCOprepared 2104in 10accordance with generally accepted accounting principles;] (5) financial statements and accompanying footnotes as well as a summary of 18operating Billresults No.for the Second Injury Fund for such fiscal year;