Sec. 10a-186a. Special capital reserve funds related to nursing homes, residential, food service and auxiliary service facilities and student centers and related buildings and improvements.
Sec. 10a-186a. Special capital reserve funds related to nursing homes, residential, food service and auxiliary service facilities and student centers and related
buildings and improvements. (a) In connection with the issuance of bonds to finance
a project at a participating nursing home or to refund bonds previously issued by the
authority to finance a project at a participating nursing home, or in connection with the
issuance of bonds to effect a refinancing or other restructuring with respect to one or more
participating nursing homes as permitted by subsection (b) of this section, to finance
dormitories, residential facilities, student centers, food service facilities and other auxiliary service facilities and related buildings and improvements at a public institution of
higher education, to finance The University of Connecticut Health Center clinical services projects, as defined in subsection (g) of section 10a-114a, or to finance up to one
hundred million dollars, in the aggregate, for equipment, including installation and any
necessary building renovations or alterations for the installation and operation of such
equipment, for participating health care institutions at the discretion of the Secretary of
the Office of Policy and Management and the Treasurer, the authority may create and
establish one or more reserve funds to be known as special capital reserve funds and
may pay into such special capital reserve funds (1) any moneys appropriated and made
available by the state for the purposes of such funds, (2) any proceeds of the sale of
notes or bonds for a project, to the extent provided in the resolution of the authority
authorizing the issuance thereof, and (3) any other moneys which may be made available
to the authority for the purpose of such funds from any other source or sources. The
moneys held in or credited to any special capital reserve fund established under this
section, except as hereinafter provided, shall be used solely for the payment of the
principal of and interest, when due, whether at maturity or by mandatory sinking fund
installments, on bonds of the authority secured by such capital reserve fund as the same
become due, the purchase of such bonds of the authority, the payment of any redemption
premium required to be paid when such bonds are redeemed prior to maturity, including
in any such case by way of reimbursement of a provider of bond insurance or of a credit
or liquidity facility that has paid such amounts; provided the authority shall have power
to provide 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 reasons of maturity or a required
sinking fund installment in the then current or any succeeding calendar year on the bonds
of the authority then outstanding or the maximum amount permitted to be deposited in
such fund by the Internal Revenue Code of 1986, or any subsequent corresponding
internal revenue code of the United States, as from time to time amended, to permit the
interest on such bonds to be excluded from gross income for federal tax purposes and
secured by such special capital reserve fund, such amount being herein referred to as
the "required minimum capital reserve", except for the purpose of paying such principal
of, redemption 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. The authority may provide that it shall not issue bonds secured by a special capital reserve fund at any time if the required minimum capital
reserve on the bonds outstanding and the bonds then to be issued and secured by the
same special capital reserve fund at the time of issuance, unless the authority, at the
time of the issuance of such bonds, shall deposit in such special capital reserve fund
from the proceeds of the bonds so to be issued, or otherwise, an amount which, together
with the amount then in such special capital reserve fund, will be not less than the
required minimum capital reserve. On or before December first, annually, there is
deemed to be appropriated from the state General Fund such sums, if any, as shall be
certified by the chairman or vice-chairman of the authority to the Secretary of the Office
of Policy and Management and the Treasurer of the state, as necessary to restore each
such special capital reserve fund to the amount equal to the required minimum capital
reserve of such fund, and such amounts shall be allotted and paid to the authority. For
the purpose of evaluation of any such special capital reserve fund, obligations acquired
as an investment for any such fund shall be valued at market. Nothing contained in this
section shall preclude the authority from establishing and creating other debt service
reserve funds in connection with the issuance of bonds or notes of the authority which are
not special capital reserve funds. Subject to any agreement or agreements with holders 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, 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 holders
thereof, are fully met and discharged. No bonds secured by a special capital reserve
fund shall be issued to pay project costs unless the authority is of the opinion and determines that the revenues from the project shall be sufficient (A) to pay the principal of
and interest on the bonds issued to finance the project, (B) to establish, increase and
maintain any reserves deemed by the authority to be advisable to secure the payment
of the principal of and interest on such bonds, (C) to pay the cost of maintaining the
project in good repair and keeping it properly insured, and (D) to pay such other costs
of the project as may be required.
(b) Notwithstanding the provisions of subsection (a) of this section, after June 4,
1998, no bonds secured by such a special capital reserve fund shall be issued by the
authority to finance a project at a participating nursing home, or to refund, refinance or
otherwise restructure bonds issued to finance a project at a participating nursing home,
except for bonds that meet the following requirements: (1) Such bonds, which may
be bonds issued on a pooled or obligated group basis with respect to more than one
participating nursing home, must, at least in part, refund, refinance or otherwise restructure bonds which are already secured by a special capital reserve fund pursuant to this
section; (2) the state must be released from any obligation to restore any special capital
reserve fund for the bonds being refunded, refinanced or otherwise restructured; and
(3) the authority and the State Treasurer and the Secretary of the Office of Policy and
Management must approve such bonds and must determine that the aggregate liability
of the state with respect to such bonds will be less than the aggregate liability of the
state with respect to the bonds being refunded, refinanced or otherwise restructured and
that such refunding, refinancing or restructuring is in the best interest of the state. Any
approval and determination by the authority, the State Treasurer and the secretary under
subdivision (3) of this subsection shall be in lieu of (A) the otherwise required opinion
of sufficiency by the authority set forth in subsection (a) of this section, and (B) the
approval of the State Treasurer and the documentation of the authority otherwise required under subsection (a) of section 1-124, and may provide for the waiver or modification of such other requirements of subsection (a) of this section as the authority, the
State Treasurer and the secretary determine to be necessary or appropriate in order
to effectuate such refunding, refinancing or restructuring, subject to all applicable tax
covenants of the authority and the state.
(P.A. 92-261, S. 8, 17; P.A. 95-270, S. 4, 11; P.A. 98-167, S. 5, 6; P.A. 04-167, S. 1; May Sp. Sess. P.A. 04-1, S. 17;
P.A. 05-255, S. 5; P.A. 06-196, S. 78.)
History: P.A. 95-270 deleted reference to facilities for provision of student housing and added residential facilities,
student centers, food service facilities and auxiliary service facilities and related buildings and improvements and made
technical changes, effective June 22, 1995; P.A. 98-167 designated existing section as Subsec. (a), and expanded use of
special capital reserve funds to include refunding of bonds previously issued by the authority to finance a project at a
participating nursing home and added Subsec. (b) restricting issuance of bonds, effective June 4, 1998; P.A. 04-167 amended
Subsec. (a) to add provisions allowing use of a capital reserve fund for refinancing or restructuring of certain nursing
homes and provisions re use of the fund for reimbursement of providers of bond insurance and amended Subsec. (b) to
add provisions re the refinancing or restructuring of participating nursing homes, to add provisions re bonds issued for
such purpose on a pooled or obligated group basis, to require a determination that the issuance of bonds for such purpose
is in the best interests of the state and to allow for waiver of certain requirements of section, effective June 1, 2004; May
Sp. Sess. P.A. 04-1 amended Subsec. (a) to authorize creation of a special capital reserve fund in connection with financing
of equipment purchases at certain institutions at the discretion of the Secretary of the Office of Policy and Management
and the Treasurer and to make a technical change, effective July 1, 2004; P.A. 05-255 amended Subsec. (a) to permit the
financing of The University of Connecticut Health Center clinical services projects, effective July 1, 2005; P.A. 06-196
made technical changes in Subsec. (a), effective June 7, 2006.