SB 876 — AN ACT CONCERNING BONDS OF BOARD MEMBERS AND OTHER EMPLOYEES OF THE CONNECTICUT HOUSING FINANCE AUTHORITY.

Senate General Assembly RaisedFile Bill No.

876100 January Session, 2021 LCOSenate Bill No.

2753876 ReferredSenate, toMarch 22, 2021 The Committee on HOUSINGHousing Introducedreported by:through SEN.

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AN ACT CONCERNING BONDS OF BOARD MEMBERS AND OTHER EMPLOYEES OF THE CONNECTICUT HOUSING FINANCE AUTHORITY.

[, each] Each surety bond [to be]or equivalent insurance product shallbe conditioned upon the faithful performance of the duties of the office or offices covered, to be executed by a surety company or issued by an insurance company authorized to transact business in this state as surety or for an equivalentSB876 insurance/ productFile and [to be approved by the Attorney LCO 2753 \\PRDFS1\SCOUSERS\FORZANOF\WS\2021SB-00876-R01 of 2 SB.docx Raised Bill No.

876100 General1 and]SB876 shallFile beNo. filed in the office of the Secretary of the State.

100 equivalent insurance product and [to be approved by the Attorney General and] shall be filed in the office of the Secretary of the State.

Section 1 July 1, 2021 8-247 HSG Joint Favorable LCOSB876 2753/ R01-SB.docxFile }OUSERS\FORZANOF\WS\2021SB-00876-No. 2 of 2

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100 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:

Agency Affected Fund-Effect FY 22 $ FY 23 $ CHFA Other Fund - approx.

approx.

Savings 3,000 3,000 Municipal Impact:

None Explanation The bill is anticipated to result in savings to the Connecticut Housing Finance Authority (CHFA) ofapproximately $3,000 peryear.

Currently, CHFA purchases both the minimum surety bond required under currentlawandamorecomprehensiveliabilityinsurancepolicy.

Under the bill CHFA could eliminate most, if not all, of the $3,650 annual cost for the surety bond by exclusively relying on more cost-effective insurance.

The Out Years The annualized ongoing fiscal impact identified above would continue into the future subject to inflation.

Sources:

Connecticut Housing Finance Authority SB876 / File No.

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100 OLR Bill Analysis SB 876 AN ACT CONCERNING BONDS OF BOARD MEMBERS AND OTHER EMPLOYEES OF THE CONNECTICUT HOUSING FINANCE AUTHORITY.

SUMMARY Under current law, each Connecticut Housing Finance Authority (CHFA) board member must execute an individual surety bond for at least $50,000, and the executive director must execute one for $100,000, unless the board’s chair executes a blanket bond covering all the authority’s employees, board members, and the executive director.

This bill allows the chair to procure an equivalent insurance product in lieu of a blanket bond.

Similar to the surety bonds, the insurance product must be (1) conditioned upon the faithful performance of the duties of the offices covered, (2) issued by a company (in this case, an insurer) authorized to do business in Connecticut, (3) paid for by CHFA, and (4) filed with the office of the Secretary of the State.

The bill also (1) eliminates a requirement that the attorney general approve the bonds and (2) makes a technical change.

EFFECTIVE DATE:

July 1, 2021 COMMITTEE ACTION Housing Committee Joint Favorable Yea 15 Nay 0 (03/09/2021) SB876 / File No.

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