Sec. 8-258. Housing Mortgage Capital Reserve Fund, additional capital reserve funds, Housing Mortgage General Fund and Housing Mortgage Insurance Fund.
Sec. 8-258. Housing Mortgage Capital Reserve Fund, additional capital reserve funds, Housing Mortgage General Fund and Housing Mortgage Insurance
Fund. (a) The authority shall establish and maintain three funds: The Housing Mortgage
Capital Reserve Fund, the Housing Mortgage General Fund and the Housing Mortgage
Insurance Fund.
(1) The Housing Mortgage Capital Reserve Fund shall consist of (A) all moneys
paid by the state for inclusion therein; (B) all proceeds of the sale of bonds required to
be deposited therein by the terms of the resolution authorizing the sale of said bonds;
and (C); any other moneys available to the authority which it determines to utilize for
this purpose. All moneys held in the Housing Mortgage Capital Reserve Fund, except
as hereinafter provided, shall be used for the payment of the principal and interest of
any bonds or notes issued by the authority, as such payment shall become due and for
the retirement of bonds upon maturity and when due. In addition, moneys from the fund
may be used to retire bonds before maturity and to pay any redemption premium required
to be paid, provided no moneys shall be utilized in any year to retire bonds before
maturity if the consequence thereof is to reduce the fund below an amount of moneys
sufficient to meet the maximum payments required in the succeeding calendar year for
payment of principal and interest falling due on all other outstanding bonds and retiring
all other bonds required by their terms to be retired, such amount being hereafter referred
to as the "required minimum capital reserve". Income or interest from the investment
of moneys held in the fund shall be retained therein if needed to meet any deficiencies
in the required minimum capital reserve but, to the extent of any excess over the aforesaid
required minimum capital reserve, moneys may be transferred by the authority to any
other fund or account of the authority. Notwithstanding any other provision contained
in this chapter, no bonds shall be issued by the authority unless there is in the fund the
required minimum capital reserve for all bonds issued and to be issued, provided nothing
shall preclude the authority from satisfying the foregoing requirement by depositing so
much of the proceeds of the bonds to be issued, upon their issuance as is needed for the
fund to achieve the required minimum capital reserve. On or before December first of
each year, 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, as necessary to restore said fund to an amount equal to the
required minimum capital reserve, and such amounts shall be allotted and paid to the
authority. Such amounts, if any, shall be repaid to the state and credited to the General
Fund, subject to the provisions of section 8-261 and to any general resolution adopted
prior to May 18, 1972, by the authority authorizing the issuance of bonds, as soon as
possible, by the authority from any moneys available therefor and in excess of the
amounts which the authority determines will keep it self-supporting. For purposes of
valuation of the Housing Mortgage Capital Reserve Fund, securities acquired as an
investment for said fund shall be valued at par, actual cost to the authority or market
value, whichever value is less.
(2) The authority may also establish one or more additional capital reserve funds
in connection with the issuance of any bonds pursuant to a resolution other than its
general housing mortgage program bond resolution adopted October 27, 1972. Any
such capital reserve fund shall be established and maintained on the same terms and
conditions as the Housing Mortgage Capital Reserve Fund, and amounts shall be deposited and maintained therein, expended therefrom and are hereby appropriated thereto
in the same manner and with the same force and effect as is provided in subdivision (1)
of subsection (a) of this section with respect to the Housing Mortgage Capital Reserve
Fund, it being hereby expressly provided that the operation of any such capital reserve
fund shall be identical to the operation of the Housing Mortgage Capital Reserve Fund,
except as follows: When computing the amount on deposit in any such capital reserve
fund, investments therein shall be valued at par, cost, amortized value or such other
method as the authority determines to be reasonable and in the best interests of the
state and the holders of the bonds entitled to the benefits thereof; and in calculating the
required "minimum capital reserve" with respect to such capital reserve fund there shall
be taken into account only those bonds of the authority secured by such capital reserve
fund and in computing the "required minimum capital reserve" pursuant to subdivision
(1) of subsection (a) of this section, such bonds shall not be taken into account in determining the amount of outstanding and other bonds. The provisions of section 8-261
shall be applicable to this subdivision.
(3) The Housing Mortgage General Fund shall consist of (A) all proceeds of the
sale of bonds issued by the authority not required to be deposited in the Housing Mortgage Capital Reserve Fund by the terms of the resolution authorizing the sale of said
bonds; (B) all moneys paid by the state of Connecticut for inclusion therein; (C) any
moneys not allocated to any fund; (D) any moneys which the authority shall transfer
from the Housing Mortgage Capital Reserve Fund pursuant to subdivision (1) of subsection (a) of this section; and (E) any other moneys available to the authority which it
determines to utilize for this purpose. To the extent available, after paying all operating
costs of the authority except moneys required for the Housing Mortgage Capital Reserve
Fund and the Housing Mortgage Insurance Fund, the moneys remaining in the General
Fund may be used for the payment of the principal of and interest on the bonds issued
by the authority or for such other corporate purposes of the authority as are authorized
by this chapter.
(4) The Housing Mortgage Insurance Fund shall consist of (A) all receipts of mortgage insurance premiums, (B) all money or other assets of whatever nature received by
the authority as a result of loan defaults or delinquencies, including proceeds from the
sale, lease or rental of real property, (C) all moneys lent or paid by the state for inclusion
therein and (D) any other moneys available to the authority which it determines to
include therein. From said funds shall be paid all payments required by loan defaults
and all direct expenses and payments for the protection of the interest of the authority
in connection with delinquent or defaulted insured mortgages or property acquired as
a result thereof. Loans and advances may be made from said funds as provided by section
8-250.
(b) Notwithstanding the provisions of subdivisions (1) to (3), inclusive, of subsection (a) of this section, the authority may establish accounts in the funds established
under said subdivisions or such additional alternative or further funds and accounts
thereof, which may include the proceeds of bonds, and may establish other capital reserve funds on the same terms and conditions and with the same force and effect resulting
from the provisions of subdivision (1) of subsection (a) of this section, except that
securities acquired as an investment of any such fund shall be valued in such reasonable
manner as the authority shall determine, all as may be, in its discretion, necessary and
desirable to accomplish any purpose of the authority or to comply with the provisions
of any agreement made by the authority or any resolution approved by the authority.
The resolution establishing such a fund and accounts shall specify the source of moneys
from which such funds or accounts shall be funded and the purposes for which moneys
held in the funds and accounts shall be disbursed.
(c) Moneys in any of the funds referred to in this section not needed to meet expenses
may be invested in the manner provided in subsection (18) of section 8-250.
(d) Subject to any agreement or agreements with holders of outstanding bonds,
notes or other obligations, the authority may apply moneys in the Housing Mortgage
Capital Reserve Fund, any additional capital reserve fund or the Housing Mortgage
General Fund to purchase a financial guaranty or financial guaranties secured or unsecured as the authority may determine. For purposes of this section, financial guaranty
means any letter of credit, surety bonds, insurance policy, guaranty or similar instrument
issued by a bond or insurance company or other financial institution which provides for
moneys to be available for the purposes to which and at the times by which moneys in
each such fund may be required.
(e) Secure instruments or contracts authorized under subsection (38) of section 8-250 in any manner in which the authority may secure its bonds, notes or other obligations
under section 8-252, subject to any agreement or agreements with holders of outstanding
bonds, notes or other obligations of the authority.
(f) The State Treasurer is hereby authorized to issue a collateralized direct guarantee
of the state of punctual payment thereof from the General Fund and carrying the full faith
and credit pledge of the state for any investment of the authority or financial guarantee
purchased by the authority to the extent such investment or financial guarantee has a
rating equal to or better than that of the state provided the state is fully secured by a
collateral assignment of such investment or financial guarantee and such investment or
financial guarantee qualifies as an investment by the Short-Term Investment Fund under
section 3-27a. The amount necessary to honor such state collateralized guarantee is
hereby deemed appropriated from the General Fund and the Treasurer is authorized and
directed to sell and collect on the security of the collateral so assigned and to pay such
amount to the authority. Such state collateralized guarantee shall not constitute indebtedness of the state for the purposes of any debt limit of other statutory purpose and shall
be only placed on any such investment or financial guarantee to permit the authority to
maximize its investment opportunities and to meet its responsibilities under the requirements of its general housing mortgage finance program bond resolution adopted September 27, 1972, as amended, provided the State Treasurer determines that the collateral
is at least sufficient to offset the full amount of the state guarantee. The State Treasurer
shall be entitled to such supporting documents as necessary or appropriate from the
authority prior to placing such collateralized guarantee on any such investment.
(1969, P.A. 795, S. 18; 1972, P.A. 208, S. 13; P.A. 76-13, S. 5, 7; 76-118, S. 5, 6; P.A. 77-316, S. 5; 77-614, S. 19,
610; P.A. 79-631, S. 44, 111; P.A. 81-472, S. 6, 159; P.A. 93-33, S. 2, 4; 93-125, S. 2, 3; P.A. 96-180, S. 10, 166.)
History: 1972 act added provision requiring repayment to general fund by authority of amounts taken from general
fund to cover deficiencies in required minimum capital reserve in Subsec. (a) and changed reference to Subsec. (o) of Sec.
8-250 in Subsec. (e) to "subsection (r) of section 8-250"; P.A. 76-13 inserted new Subsec. (b) concerning additional capital
reserve funds and relettered remaining Subsecs. accordingly; P.A. 76-118 amended Subsec. (e), formerly Subsec. (d), to
allow establishment of alternative accounts and funds; P.A. 77-316 amended Subsec. (d) to include in housing mortgage
insurance fund "any other moneys available to the authority" and to allow loans and advances from fund; P.A. 77-614
substituted secretary of the office of policy and management for commissioner of finance and control; P.A. 79-631 and
P.A. 81-472 made technical changes; (Revisor's note: In 1989 a reference in Subsec. (e) to Subdiv. "(r)" of Sec. 8-250
was changed editorially by the Revisors to Subdiv. "(18)" to conform with changes made to said section by the Revisors
for consistency with customary statutory usage); P.A. 93-33 added Subsecs. (g) and (h) authorizing the authority to apply
moneys in any special capital reserve fund or any other fund of the authority to purchase a financial guaranty or guarantees,
effective April 20, 1993; P.A. 93-125 added Subsec. (i) to allow the treasurer to issue a direct collateralized guarantee of
the state of punctual payment from the general fund for investments or guarantees of the authority, effective June 11, 1993;
P.A. 96-180 conformed Subsec., Subdiv. and Subpara. designators to customary statutory usage, effective June 3, 1996.