Sec. 32-607. Bonds, notes and other obligations. Special capital reserve funds.
Sec. 32-607. Bonds, notes and other obligations. Special capital reserve funds.
(a) The board of directors of the Capital City Economic Development Authority is
authorized from time to time to issue its bonds, notes and other obligations in such
principal amounts as in the opinion of the board shall be necessary to provide sufficient
funds for carrying out the purposes set forth in section 32-602 with respect to the convention center project as defined in subdivision (3) of section 32-600, including the payment,
funding or refunding of the principal of, or interest or redemption premiums on, any
bonds, notes and other obligations issued by it whether the bonds, notes or other obligations or interest to be funded or refunded have or have not become due, the establishment
of reserves to secure such bonds, notes and other obligations, loans made by the authority
and all other expenditures of the authority incident to and necessary or convenient to
carry out the purposes set forth in section 32-602.
(b) Except as may be otherwise expressly provided in this section or by the board,
every issue of bonds, notes or other obligations, shall be a general obligation of the
authority payable out of any moneys or revenues of the authority subject only to any
agreements with the holders of particular bonds, notes or other obligations pledging
any particular moneys or revenues. Any such bonds, notes or other obligations may be
additionally secured by a pledge of any state contract assistance as provided in section
32-608, any grant or contributions from any department, agency or instrumentality of
the United States or person or a pledge of any moneys, income or revenues of the authority from any source whatsoever.
(c) Notwithstanding any other provision of any law, any bonds, notes or other obligations issued by the authority pursuant to this section shall be fully negotiable within
the meaning and for all purposes of title 42a. Any such bonds, notes or other obligations
shall be legal investments for all trust companies, banks, investment companies, savings
banks, building and loan associations, executors, administrators, guardians, conservators, trustees and other fiduciaries and pension, profit-sharing and retirement funds.
(d) Bonds, notes or other obligations of the authority shall be authorized by resolution of the board of directors of the authority and may be issued in one or more series
and shall bear such date or dates, mature at such time or times, in the case of any such
note, or any renewal thereof, not exceeding the term of years as the board shall determine
from the date of the original issue of such notes, and, in the case of bonds, not exceeding
thirty years from the date thereof, bear interest at such rate or rates, be in such denomination or denominations, be in such form, either coupon or registered, carry such conversion or registration privileges, have such rank or priority, be executed in such manner,
be payable from such sources in such medium of payment at such place or places within
or without this state, and be subject to such terms of redemption, with or without premium, as such resolution or resolutions may provide.
(e) Bonds, notes or other obligations of the authority may be sold at public or private
sale at such price or prices as the board shall determine.
(f) Bonds, notes or other obligations of the authority may be refunded and renewed
from time to time as may be determined by resolution of the board, provided any such
refunding or renewal shall be in conformity with any rights of the holders thereof.
(g) Bonds, notes or other obligations of the authority issued under the provisions
of this section shall not be deemed to constitute a debt or liability of the state or of any
political subdivision thereof other than the authority or a pledge of the faith and credit
of the state or of any such political subdivision other than the authority, and shall not
constitute bonds or notes issued or guaranteed by the state within the meaning of section
3-21, but shall be payable solely from the funds as provided in this section. All such
bonds, notes or other obligations shall contain on the face thereof a statement to the
effect that neither the state of Connecticut nor any political subdivision thereof other
than the authority shall be obligated to pay the same or the interest 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.
(h) Any resolution or resolutions authorizing the issuance of bonds, notes or other
obligations may contain provisions, except as limited by existing agreements with the
holders of bonds, notes or other obligations, which shall be a part of the contract with
the holders thereof, as to the following: (1) The pledging of all or any part of the moneys
received by the authority to secure the payment of the principal of and interest on any
bonds, notes or other obligations or of any issue thereof; (2) the pledging of all or part
of the assets of the authority to secure the payment of the principal and interest on any
bonds, notes or other obligations or of any issue thereof; (3) the establishment of reserves
or sinking funds, the making of charges and fees to provide for the same, and the regulation and disposition thereof; (4) limitations on the purpose to which the proceeds of sale
of bonds, notes or other obligations may be applied and pledging such proceeds to
secure the payment of the bonds, notes or other obligations, or of any issues thereof;
(5) limitations on the issuance of additional bonds, notes or other obligations, the terms
upon which additional bonds, bond anticipation notes or other obligations may be issued
and secured, the refunding or purchase of outstanding bonds, notes or other obligations
of the authority; (6) the procedure, if any, by which the terms of any contract with the
holders of any bonds, notes or other obligations of the authority may be amended or
abrogated, the amount of bonds, notes or other obligations the holders of which must
consent thereto and the manner in which such consent may be given; (7) limitations on
the amount of moneys to be expended by the authority for operating, administrative or
other expenses of the authority; (8) the vesting in a trustee or trustees of such property,
rights, powers and duties in trust as the authority may determine, which may include
any or all of the rights, powers and duties of any trustee appointed by the holders of any
bonds, notes or other obligations and limiting or abrogating the right of the holders of
any bonds, notes or other obligations of the authority to appoint a trustee or limiting the
rights, powers and duties of such trustee; (9) provision for a trust agreement by and
between the authority and a corporate trustee which may be any trust company or bank
having the powers of a trust company within or without the state, which agreement may
provide for the pledging or assigning of any assets or income from assets to which or
in which the authority has any rights or interest, and may further provide for such other
rights and remedies exercisable by the trustee as may be proper for the protection of the
holders of any bonds, notes or other obligations of the authority and not otherwise in
violation of law. Such agreement may provide for the restriction of the rights of any
individual holder of bonds, notes or other obligations of the authority. All expenses
incurred in carrying out the provisions of such trust agreement may be treated as a part
of the cost of operation of the authority. The trust agreement may contain any further
provisions which are reasonable to delineate further the respective rights, duties, safeguards, responsibilities and liabilities of the authority, individual and collective holders
of bonds, notes and other obligations of the authority and the trustees; (10) covenants
to do or refrain from doing such acts and things as may be necessary or convenient or
desirable in order to better secure any bonds, notes or other obligations of the authority,
or which, in the discretion of the authority, will tend to make any bonds, notes or other
obligations to be issued more marketable notwithstanding that such covenants, acts or
things may not be enumerated herein; and (11) any other matters of like or different
character, which in any way affect the security or protection of the bonds, notes or other
obligations.
(i) Any pledge made by the authority of income, revenues, state contract assistance
provided under section 32-608, or other property shall be valid and binding from the
time the pledge is made. The income, revenue, state contract assistance, such state taxes
as the authority shall be entitled to receive or other property so pledged and thereafter
received by the authority shall immediately be subject to the lien of such pledge without
any physical delivery thereof or further act, and the lien of any such pledge shall be
valid and binding as against all parties having claims of any kind in tort, contract or
otherwise against the authority, irrespective of whether such parties have notice thereof.
(j) The board of directors of the authority is authorized and empowered to obtain
from any department, agency or instrumentality of the United States any insurance or
guarantee as to, or of or for the payment or repayment of, interest or principal, or both,
or any part thereof, on any bonds, notes or other obligations issued by the authority
pursuant to the provisions of this section and, notwithstanding any other provisions of
sections 32-600 to 32-611, inclusive, to enter into any agreement, contract or any other
instrument whatsoever with respect to any such insurance or guarantee except to the
extent that such action would in any way impair or interfere with the authority's ability
to perform and fulfill the terms of any agreement made with the holders of the bonds,
bond anticipation notes or other obligations of the authority.
(k) Neither the members of the board of directors of the authority nor any person
executing bonds, notes or other obligations of the authority issued pursuant to this section
shall be liable personally on such bonds, notes or other obligations or be subject to
any personal liability or accountability by reason of the issuance thereof, nor shall any
director or employee of the authority be personally liable for damage or injury, not
wanton, reckless, wilful or malicious, caused in the performance of his duties and within
the scope of his employment or appointment as such director, officer or employee. 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 duties or within the scope of his employment and such act or omission is found
not to have been wanton, reckless, wilful or malicious.
(l) The board of directors of the authority shall have power to purchase bonds, notes
or other obligations of the authority out of any funds available for such purpose. The
authority may hold, cancel or resell such bonds, notes or other obligations subject to
and in accordance with agreements with holders of its bonds, notes and other obligations.
(m) All moneys received pursuant to the authority of this section, whether as proceeds from the sale of bonds or as revenues, shall be deemed to be trust funds to be held
and applied solely as provided in this section. Any officer with whom, or any bank or
trust company with which, such moneys shall be deposited shall act as trustee of such
moneys and shall hold and apply the same for the purposes of section 32-602, and the
resolution authorizing the bonds of any issue or the trust agreement securing such bonds
may provide.
(n) Any holder of bonds, notes or other obligations issued under the provisions of
this section, and the trustee or trustees under any trust agreement, except to the extent
the rights herein given may be restricted by any resolution authorizing the issuance of,
or any such trust agreement securing, such bonds may, either at law or in equity, by
suit, action, mandamus or other proceedings, protect and enforce any and all rights under
the laws of the state or granted under this section or under such resolution or trust
agreement, and may enforce and compel the performance of all duties required by this
section or by such resolution or trust agreement to be performed by the authority or by
any officer, employee or agent thereof, including the fixing, charging and collecting of
the rates, rents, fees and charges herein authorized and required by the provisions of
such resolution or trust agreement to be fixed, established and collected.
(o) 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 from time to time amended, including agreement to pay rebates
to the federal government of investment earnings derived from the investment of the
proceeds of the bonds, notes or other obligations of the authority. Any such agreement
may include: (1) A covenant to pay rebates to the federal government of investment
earnings derived from the investment of the proceeds of the bonds, notes or other obligations of the authority; (2) a covenant that the authority will not limit or alter its rebate
obligations until its obligations to the holders or owners of such bonds, notes or other
obligations are finally met and discharged; and (3) provisions to (A) establish trust
and other accounts which may be appropriate to carry out such representations and
agreements, (B) retain fiscal agents as depositories for such funds and accounts, and
(C) provide that such fiscal agents may act as trustee of such funds and accounts.
(p) No bonds, notes or other obligations shall be issued by the authority unless such
bonds, notes or other obligations have been approved for issuance by the State Bond
Commission following (1) a finding that such issuance is in the public interest, (2) a
filing with the clerks of the General Assembly of a certificate of the Secretary of the
Office of Policy and Management and the State Treasurer pursuant to subsection (a) of
section 32-608 and until bonds of the state authorized pursuant to section 32-614 have
been approved for issuance by the State Bond Commission for such project, and (3) in
the case of any bonds, notes or other obligations to be issued to provide funding for the
convention center project, the satisfaction of the conditions set forth in subsection (a)
of section 32-654.
(q) In connection with the issuance of bonds to finance the convention center project
or to refund bonds previously issued by the authority to finance the convention center
project, 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 sale of notes or bonds for the convention center 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 on, 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; 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 said 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,
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 to (A) pay the principal of and interest on the bonds issued to finance the
project, (B) 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)
pay the cost of maintaining the project in good repair and keeping it properly insured,
and (D) pay such other costs of the project as may be required. No bonds secured by a
special capital reserve fund shall be issued unless the issuance of such bonds is approved
by the Treasurer.
(P.A. 98-179, S. 8, 30; P.A. 99-241, S. 22, 66; May 9 Sp. Sess. P.A. 02-5, S. 27; May Sp. Sess. P.A. 04-1, S. 9; May
Sp. Sess. P.A. 04-2, S. 55.)
History: P.A. 98-179 effective June 1, 1998; P.A. 99-607 added Subsec. (p)(3) re satisfaction of conditions in Sec. 32-654, effective July 1, 1999; May 9 Sp. Sess. P.A. 02-5 amended Subsec. (a) to include reference to loans made by the
authority in the purposes for which the authority may issue bonds, effective August 15, 2002; May Sp. Sess. P.A. 04-1
added Subsec. (q) re special capital reserve funds, effective July 1, 2004; May Sp. Sess. P.A. 04-2 amended Subsec. (i) to
delete provision making pledges under section a pledge within the meaning of the Uniform Commercial Code, effective
May 12, 2004, and applicable to any pledge, lien or security interest of this state or any political subdivision of this state,
which was in existence on October 1, 2003, or created after October 1, 2003.