2018 Connecticut General Statutes
Title 3 - State Elective Officers
Chapter 32 - Treasurer
Section 3-20h - Bond authorization for accumulated deficit as determined using generally accepted accounting principles.
(a) The Treasurer is authorized to issue bonds, notes or other obligations of the state from time to time in one or more series in an aggregate principal amount sufficient to generate net proceeds of not more than five hundred ninety-eight million five hundred thousand dollars, and to apply the net proceeds of such issuance to the reduction of the accumulated deficit of the state in the General Fund reported in the audited financial statements of the state for the fiscal year ending June 30, 2013, as determined using generally accepted accounting principles prescribed by the Governmental Accounting Standards Board. The Treasurer is authorized to issue bonds, notes or other obligations in an amount sufficient to refund such bonds, notes or other obligations previously issued pursuant to this section. In addition to the bonds, notes or other obligations authorized by this section to eliminate a portion of such deficit, the Treasurer is authorized to issue bonds, notes or other obligations in such additional amounts as the Treasurer shall determine to pay the costs of issuance of such bonds, notes or other obligations issued pursuant to this section, and up to two years of interest payable or accrued on such bonds, notes or other obligations.
(b) All such bonds, notes or other obligations 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 such bonds, notes or other obligations as the same shall become due, and accordingly and as part of the contract of the state with the holders of such bonds, notes or other obligations, appropriation of all amounts necessary for punctual payment of such principal and interest is hereby made, and the Treasurer shall pay such principal and interest as the same become due. All such bonds, notes or other obligations shall be sold at not less than par and accrued interest in such manner and on such terms as the Treasurer may determine is in the best interest of the state, and shall be signed in the name of the state and on its behalf by the Treasurer. All such bonds, notes or other obligations shall mature at such time or times not later than June 30, 2028, in such principal amounts and at such times, bear such date or dates, be payable at such place or places, bear interest at such rate or different or varying rates, payable at such time or times, be in such denominations, be in such form with or without interest coupons attached, carry such registration and transfer privileges, be payable in such medium of payment, be subject to such terms of redemption with or without premium and have such additional security, covenant or contract provisions, as appropriate or necessary to improve their marketability, as the Treasurer shall determine prior to their issuance. In connection with such bonds, notes or other obligations, the Treasurer may enter into such paying agent agreements, indentures of trust, escrow agreements or other agreements, with such parties and with such provisions as the Treasurer determines are appropriate or necessary.
(c) The Treasurer may obtain from a commercial bank or insurance company authorized to do business within or without this state a letter of credit, line of credit or other liquidity facility or credit facility for the purpose of providing funds for the payments in respect of bonds, notes or other obligations required by the holder thereof to be redeemed or repurchased prior to maturity or for providing additional security for such bonds, notes or other obligations. In connection with any such liquidity facility or credit facility, the Treasurer may enter into any reimbursement agreements, remarketing agreements, standby purchase agreements or any other necessary or appropriate agreements on behalf of the state in connection with securing, insuring or remarketing such bonds, notes or other obligations, on such terms and conditions as the Treasurer determines to be in the best interest of the state. The Treasurer is authorized to pledge the full faith and credit of the state to the state's payment obligations under any such agreement and the Treasurer is authorized to include such pledge in any such agreement as part of the contract with the provider of such liquidity facility or credit facility. The Treasurer shall apply any appropriation for the payment of such bonds, notes or other obligations to such reimbursement repayment if such liquidity facility or credit facility is drawn upon. As part of the contract of the state with the other parties to any agreement entered into pursuant to this subsection for which the full faith and credit of the state is pledged to the state's payment obligations under such agreement, appropriation of all amounts necessary for the punctual payment of the obligations of the state under any such agreement is hereby made and the Treasurer shall pay such amounts as the same become due.
(d) In connection with or incidental to the carrying of such bonds, notes or other obligations, or in connection with or incidental to the sale and issuance of such bonds, notes or other obligations, the Treasurer may enter into such contracts as the Treasurer may determine to be necessary or appropriate to place the obligation of the state, as represented by the bonds, notes or other obligations, in whole or in part, on such interest rate or cash flow basis as the Treasurer may determine, including without limitation, interest rate swap agreements, insurance agreements, forward payment conversion agreements, futures contracts, contracts providing for payments based on levels of, or changes in, interest rates or market indices, contracts to manage interest rate risk, including without limitation, interest rate floors or caps, options, puts, calls and similar arrangements. Such contracts shall contain such payment, security, default, remedy and other terms and conditions as the Treasurer may deem appropriate and shall be entered into with such party or parties as the Treasurer may select, after giving due consideration, where applicable, for the creditworthiness of the counter party or counter parties, including any rating by a nationally recognized rating agency, the impact on any rating on outstanding bonds, notes or other obligations or any other criteria as the Treasurer may deem appropriate, provided the unsecured long-term obligations of the counter party or counter parties are rated the same or higher than the underlying rating of the state on the applicable bonds, notes or other obligations by at least one nationally recognized rating agency. The Treasurer is authorized to pledge the full faith and credit of the state to the state's payment obligations under any contract entered into pursuant to this subsection. As part of the contract of the state with the other parties to any agreement entered into pursuant to this subsection for which the full faith and credit of the state is pledged to the state's payment obligations under such agreement, appropriation of all amounts necessary for the punctual payment of the obligations of the state under any such agreement is hereby made and the Treasurer shall pay such amounts as the same become due.
(e) The Superior Court shall have jurisdiction to enter judgment against the state founded (1) upon any express contract between the state and the purchasers and subsequent owners and transferees of any bonds, notes or other obligations issued or contracted to be issued by the state pursuant to this section, and (2) upon any agreement entered into pursuant to subsection (c) or (d) of this section. Any action brought under this subsection shall be brought in the superior court for the judicial district of Hartford. The jurisdiction conferred upon the Superior Court by this subsection includes any set-off, claim or demand on the part of the state against any plaintiff commencing an action under this subsection. Such action shall be tried to the court without a jury. All legal defenses, except governmental immunity, shall be reserved to the state. Any action brought under this subsection shall be privileged in respect to assignment for trial upon motion of either party.
(f) Any expense incurred in connection with the issuance or renewal of the bonds, notes or other obligations issued pursuant to this section shall be paid from the accrued interest and premiums on such bonds, notes or other obligations, from the proceeds of the sale of such bonds, notes or other obligations or otherwise from the General Fund. The Treasurer is authorized to issue such bonds, notes or other obligations in such form and manner that the interest on such bonds, notes or other obligations may be includable or excludable under the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, in the gross income of the holders or owners of such bonds, notes or other obligations. The Treasurer may make representations and agreements for the benefit of the holders or owners of any such bonds, notes or other obligations which are necessary or appropriate to ensure the inclusion or exclusion of interest on such 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 agreements to pay rebates to the federal government of investment earnings derived from the investment of the proceeds of bonds, notes or other obligations. The Treasurer may make representations and agreements for the benefit of the holders or owners of such bonds, notes or other obligations on behalf of the state to provide secondary market disclosure information. Any such agreement may include: (1) Covenants to provide secondary market disclosure information, (2) arrangements for such information to be provided with the assistance of a paying agent, trustee or other agent, and (3) remedies for breach of such agreement, which remedies may be limited to specific performance. The state shall protect and save harmless any official or former official of the state 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 on the part of such official, while acting in the discharge of his or her official duties, in providing secondary market disclosure information or performing any other duties set forth in any agreement to provide secondary market disclosure information. Nothing in this section shall be construed to preclude the defense of governmental immunity to any such claim, demand or suit. For purposes of this subsection “official” means any person elected or appointed to office or any state employee. This indemnity provision shall not apply to cases of wilful and wanton fraud.
(g) All such bonds, notes or other obligations, their transfer and the income therefrom, including any profit on the sale or transfer thereof, shall at all times be exempt from all taxation by the state or under its authority, except for estate or succession taxes, but the interest on such bonds, notes or other obligations shall be included in the computation of any excise or franchise tax. Such bonds, notes or other obligations are hereby made and declared to be (1) legal investments for savings banks and trustees unless otherwise provided in the instrument creating the trust, (2) securities in which all public officers and bodies, all insurance companies and associations and persons carrying on an insurance business, all banks, bankers, trust companies, savings banks and savings associations, including savings and loan associations, building and loan associations, investment companies and persons carrying on a banking or investment business, all administrators, guardians, executors, trustees and other fiduciaries and all persons who are or may be authorized to invest in bonds, notes or other obligations of the state, may properly and legally invest funds, including capital in their control or belonging to them, and (3) securities that may be deposited with and shall be received by all public officers and bodies for any purpose for which the deposit of bonds, notes or other obligations of the state is or may be authorized.
(P.A. 13-239, S. 68; May Sp. Sess. P.A. 16-4, S. 237.)
History: P.A. 13-239 effective July 1, 2013; May Sp. Sess. P.A. 16-4 amended Subsec. (a) by decreasing aggregate authorization from $750,000,000 to $598,500,000, effective July 1, 2016.
