Sec. 10a-232. Payment of bonds or notes. Creation of special capital reserve funds.
Sec. 10a-232. Payment of bonds or notes. Creation of special capital reserve
funds. (a) Revenue bonds or notes issued under the provisions of this chapter shall not
be deemed to constitute a debt or liability of the state or of any political subdivision
thereof or a pledge of the full faith and credit of the state or of any such political subdivision, but shall be payable solely from the revenues and funds herein provided therefor.
All such revenue bonds or notes shall contain on the face thereof a statement to the
effect that: (1) The state of Connecticut shall not be obligated to pay the same or the
interest thereon and (2) the authority shall not be obligated to pay the same or the interest
thereon except from revenues of the education loan program or programs or the portion
thereof for which they are issued, and that neither the full faith and credit nor the taxing
power of the state of Connecticut or of any political subdivision thereof is pledged to
the payment of the principal of or the interest on such bonds or notes.
(b) Notwithstanding the foregoing, (1) the constituent units of the 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 such special capital reserve funds (A) any moneys appropriated
and made available by the state for the purposes of such funds, (B) any proceeds of 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 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
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 interest on such bonds of
the authority or the payment of any redemption premium required to be paid when such
bonds are redeemed prior to maturity; 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that moneys in any such fund shall not be withdrawn therefrom at any time in such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 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 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 at any time if the required minimum capital reserve on
outstanding bonds secured by a special capital reserve fund and the bonds then to be
issued and secured by a special capital reserve fund will exceed the amount of such
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. The authority may, as part of the contract of the authority
with the owners of such bonds, provide that 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 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 amortized cost. 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. 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, 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. Notwithstanding any other provisions contained in this chapter, the
aggregate amount of bonds outstanding at any time secured by such special capital
reserve funds authorized to be created and established by this section shall not exceed
three hundred million dollars and no such bonds shall be issued to pay program costs
unless the authority is of the opinion and determines that the revenues to be derived
from the program shall be sufficient (1) to pay the principal of and interest on the bonds
issued to finance the program, (2) 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, (3) to pay the cost of maintaining and servicing the program and
keeping it properly insured, and (4) to pay such other costs of the program as may be
required.
(P.A. 82-313, S. 12, 28; P.A. 85-401; P.A. 89-274; P.A. 90-317, S. 6, 8; P.A. 91-210, S. 2, 5; P.A. 93-96, S. 2; June 5
Sp. Sess.; P.A. 97-1, S. 12, 20; P.A. 08-117, S. 2.)
History: P.A. 85-401 divided section into Subsecs. and added provision permitting the authority to establish "special
capital reserve funds"; P.A. 89-274 amended Subsec. (b) to increase the maximum aggregate amount of bonds secured by
special capital reserve funds from $15,500,000 to $35,000,000; P.A. 90-317 amended Subsec. (b) to allow the authority
to reduce the required minimum capital reserve by a resolution authorizing the issuance of bonds; P.A. 91-210 amended
Subsec. (b) to increase the level of bonds secured by the special capital reserve funds to $60,000,000; P.A. 93-96 amended
Subsec. (b) to increase the maximum aggregate amount of bonds secured by special capital reserve funds to $110,000,000;
June 5 Sp. Sess. P.A. 97-1 amended Subsec. (b) to increase amount that can be secured by the special capital reserve fund
to $170,000,000, effective July 31, 1997; P.A. 08-117 amended Subsec. (b) to make technical changes and increase amount
that can be secured by special capital reserve funds from $170,000,000 to $300,000,000, effective July 1, 2008.