Sec. 10-183qq. Bond authorization for a portion of unfunded liability of Teachers' Retirement Fund.
Sec. 10-183qq. Bond authorization for a portion of unfunded liability of
Teachers' Retirement Fund. (a) The State Bond Commission shall have power, in
accordance with the provisions of this section, from time to time to authorize the issuance
of bonds of the state in one or more series and in principal maturity amounts which in
the aggregate generate proceeds sufficient to fund two billion dollars of the unfunded
liability of the Teachers' Retirement Fund and to pay the costs of issuing such bonds
and up to two years of interest on such bonds.
(b) The proceeds of the sale of such bonds, to the extent hereinafter stated, shall be
used for the purpose of: (1) Reducing the unfunded liability, as such term is defined
in section 10-183b, of the Connecticut teachers' retirement system, and (2) paying or
providing for the costs related to the issuance of the bonds, including the initial costs
of agreements and contracts permitted under section 3-20a with respect to such bonds,
and up to two years of interest on such bonds.
(c) Except as provided in subsection (e) of this section, all provisions of section 3-20 or the exercise of any right or power granted thereby which are not inconsistent with
the provisions of this section are hereby adopted and shall apply to all bonds authorized
by the State Bond Commission pursuant to this section, and temporary notes issued in
anticipation of the money to be derived from the sale of any such bonds so authorized
may be issued in accordance with said section 3-20 and from time to time renewed.
Such bonds shall mature at such time or times not exceeding thirty years from their
respective dates as may be provided in or pursuant to the resolution or resolutions of
the State Bond Commission authorizing such bonds.
(d) None of said bonds shall be authorized except upon a finding by the State Bond
Commission that there has been filed with it (1) a request for such authorization, which
is signed by the Secretary of the Office of Policy and Management or on behalf of such
state officer and stating such terms and conditions as said commission, in its discretion,
may require, and (2) a written determination by the State Treasurer and the Secretary
of the Office of Policy and Management that the issuance of the bonds is in the best
interests of the state.
(e) Proceeds of the bonds issued under this section and all earnings on investments
of proceeds of such bonds, to the extent not applied to the payment of costs related to
the issuance thereof, shall be deposited in the custody of the State Treasurer in the fund
for the Connecticut teachers' retirement system and, notwithstanding section 3-20, shall
be invested by the State Treasurer in the manner provided in section 3-13d for trust
funds.
(f) Said bonds issued pursuant to this section shall be general obligations of the
state and the full faith and credit of the State of Connecticut are pledged for the payment
of the principal of and interest on said bonds as the same become due, and accordingly
and as part of the contract of the state with the holders of said bonds, appropriation of
all amounts necessary for punctual payment of such principal and interest is hereby
made, and the State Treasurer shall pay such principal and interest as the same become
due. Any net premium realized from the sale of said bonds shall be deemed appropriated
to the payment of debt service on any bonds issued under this section and section 10-183c, subsection (l) of section 10-183g, section 10-183r and sections 12 and 13 of public
act 07-186*, and the State Treasurer may apply such net premium to payment of such
debt service.
(g) Notwithstanding any provision of section 3-21 to the contrary, bonds authorized
and bonds issued under this section and any refunding bonds shall not be subject to the
debt limitation in section 3-21 and shall not be included in indebtedness of the state for
purposes of calculating the amount of indebtedness of the state which is subject to the
debt limitation of section 3-21 and this section and action of the State Bond Commission
shall not require any certification of the State Treasurer under section 3-21.
(h) Each fiscal year that any bonds authorized by this section or any refunding bonds
are outstanding, there shall be deemed appropriated from the General Fund of the state
the amount equal to the annual required contribution to the fund for the Connecticut
teachers' retirement system and such amount shall be deposited by the Treasurer in the
fund for the Connecticut teachers' retirement system in quarterly allotments on July
fifteenth, October first, January first and April first of such fiscal year. The amount of
the annual required contribution shall be determined in accordance with the provisions
of subsection (b) of section 10-183l and section 10-183z, and for each biennial budget
shall be the amounts for the fiscal years of said biennium determined in the actuarial
evaluation required to be submitted by the December first prior to the beginning of the
first fiscal year of the biennium, as provided in said subsection (b) of section 10-183l,
beginning with the actuarial evaluation submitted prior to December 1, 2006, for the
biennial budget for the fiscal years commencing July 1, 2007, and July 1, 2008. Said
amount shall be certified by the Teachers' Retirement Board and the Comptroller. The
state of Connecticut does hereby pledge to and agree with the holders of any bonds
issued under this section and any refunding bonds that, as long as the actuarial evaluation
for each biennium, as required by this subsection, and the certification of the annual
contribution amounts, as required by this subsection, are completed in the manner and
by the dates required by this subsection, subsection (b) of section 10-183l and subsection
(a) of section 10-183z, no public or special act of the General Assembly shall diminish
such required contribution until such bonds, together with the interest thereon, are fully
met and discharged, provided nothing herein contained shall preclude such limitation
or alteration if and when adequate provision shall be made by law for the protection of
the holders of such bonds, or if and when the Governor declares an emergency or the
existence of extraordinary circumstances, in which the provisions of section 4-85 are
invoked, and at least three-fifths of the members of each chamber of the General Assembly vote to diminish such required contribution during the biennium for which the emergency or existence of extraordinary circumstances are determined, and the funded ratio
of the Connecticut teachers' retirement system is at least equal to the funded ratio immediately after the sale of bonds pursuant to this section in accordance with the actuarial
method used at the time. If all of such conditions are met, the funding of the annual
required contribution may be diminished, but in no event shall such diminution result
in a reduction of the funded ratio of the Connecticut teachers' retirement system by
more than five per cent from the funded ratio which would otherwise have resulted had
the state funded the full annual required contribution, or the funded ratio immediately
after the sale of the bonds, whichever is greater. For purposes of this subsection, the
"funded ratio" shall be measured as the actuarial value of assets over the actuarial value
of liabilities. The actuarial value of assets and the actuarial value of liabilities will be
projected from the most recent actuarial valuation to the end of the fiscal year in which
said annual required contribution is due. For purposes of this subsection, the "existence
of extraordinary circumstances" may mean a change in the actuarial methods or accounting standards used to value the fund that would result in a significant increase in the
state's annual required contribution. The State Treasurer is authorized to include this
pledge and undertaking for the state in such bonds.
(P.A. 07-186, S. 1-8.)
*Note: Sections 12 and 13 of public act 07-186 are special in nature and therefore have not been codified but remain
in full force and effect according to their terms.
History: P.A. 07-186 effective July 1, 2007.