General Assembly Raised Bill No. 1133
January Session, 2015 LCO No. 6200
*06200_______FIN*
Referred to Committee on FINANCE, REVENUE AND BONDING
Introduced by:
(FIN)
General Assembly
Raised Bill No. 1133
January Session, 2015
LCO No. 6200
*06200_______FIN*
Referred to Committee on FINANCE, REVENUE AND BONDING
Introduced by:
(FIN)
AN ACT CONCERNING THE TREATMENT OF BOND PREMIUMS UNDER THE STATE GENERAL OBLIGATION BOND PROCEDURE ACT.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. Subsection (b) of section 3-20 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2015):
(b) The following terms, when used in this section, shall have the following meanings, unless the context otherwise requires:
(1) "Bonds" means general obligations of the state for the payment of the principal of and interest on which, as the same become due, the full faith and credit of the state are pledged; ["bond act"]
(2) "Bond act" means a general statute, public act or special act of the General Assembly empowering the State Bond Commission or the State Treasurer to authorize bonds heretofore enacted or hereafter enacted; ["refunding bonds"]
(3) "Refunding bonds" means bonds authorized to be issued and sold pursuant to subsection (i) [hereof and hereunder] of this section and the provisions of this chapter; ["resolution"]
(4) "Resolution" means a resolution adopted by a majority of the members of the State Bond Commission, [. The] and the adoption of such a resolution is hereby deemed to satisfy and supersede the requirement of any bond act for a written determination signed by the majority of the members of the State Bond Commission and filed in the office of the Secretary of the State; and ["State Bond Commission"]
(5) "State Bond Commission" or "commission" means the State Bond Commission as established [herein] in this section.
Sec. 2. Subsection (f) of section 3-20 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2015):
(f) (1) With the exception of refunding bonds, the proceeds of the sale of the bonds and any moneys held or otherwise set aside for the repayment of the bonds shall be deposited with the Treasurer or, at the direction of the Treasurer, with a [commercial bank or] bank and trust company, in trust for the benefit of the state, pending the use or application thereof, for the purpose and projects specified in the bond act empowering the State Bond Commission to authorize such bonds.
(2) Any expense incurred in connection with the carrying out of the provisions of this section, including the issuance of refunding bonds, shall be paid from the accrued interest and premiums or from the proceeds of the sale of such bonds or refunding bonds and in the same manner as other obligations of the state, except that expenses incurred in connection with the preparation, issuance and delivery of general obligation bonds issued in accordance with sections 3-17 and 10-183m [,] and delivered to the retirement fund provided for in section 10-183r shall be paid out of the General Fund if sufficient accrued interest and premiums are not available to pay such expenses.
(3) With the exception of the proceeds of refunding bonds deposited in a defeasance escrow fund, pending the use or application of any such bond proceeds or any such funds, such proceeds or funds may be deposited with the Treasurer in such fund or funds of the state as appropriate or at the direction of the Treasurer in a [commercial bank or] bank and trust company with or without security to the credit of such fund or funds, or may be invested by, or at the direction of, the Treasurer in bonds or obligations of, or guaranteed by, the state or the United States, or agencies or instrumentalities of the United States, in certificates of deposit, commercial paper, savings accounts and bank acceptances, in the obligations of any state of the United States or any political subdivision thereof or the obligations of any instrumentality, authority or agency of any state or political subdivision thereof, provided [that] at the time of investment such obligations are rated within one of the top two rating categories of any nationally recognized rating service or of any rating service recognized by the Banking Commissioner, and applicable to such obligations, in the obligations of any regional school district in this state, of any municipality in this state or any metropolitan district in this state, and provided further that at the time of investment such obligations of such government entity are rated within one of the top three rating categories of any nationally recognized rating service or of any rating service recognized by the Banking Commissioner, and applicable to such obligations, or in any fund in which a trustee may invest pursuant to section 36a-353, or in investment agreements with financial institutions whose long-term obligations are rated within the top two rating categories of any nationally recognized rating service or of any rating service recognized by the Banking Commissioner or whose short-term obligations are rated within the top rating category of any nationally recognized rating service or of any rating service recognized by the Banking Commissioner, or investment agreements fully secured by obligations of, or guaranteed by, the United States or agencies or instrumentalities of the United States.
(4) Except as may be provided [herein] in this section or in any other public or special act, (A) net earnings of investments of proceeds of bonds and such funds, and accrued interest [and premiums] on the issuance of such bonds shall, after payment of expenses incurred by the Treasurer or State Bond Commission in connection with their issuance, if any, be deposited to the credit of the General Fund, and (B) premiums, net of any original issue discount, on the issuance of such bonds shall, after payment of expenses incurred by the Treasurer or State Bond Commission in connection with their issuance, if any, be deposited at the direction of the Treasurer to the credit of an account or fund to fund all or a portion of any purpose or project authorized by the State Bond Commission pursuant to any bond act up to the amount authorized by the State Bond Commission, provided the bonds for such purpose or project are unissued, and provided further that the certificate of determination the Treasurer files with the secretary of the State Bond Commission for such authorized bonds sets forth the amount of the deposit applied to fund each such purpose and project. Upon such filing the Treasurer shall record bonds in the amount of net premium credited to each purpose and project as set forth in the certificate of determination of the Treasurer as deemed issued and retired and the Treasurer shall not thereafter exercise authority to issue bonds in such amount for such purpose or project. Upon such recording by the Treasurer such bonds shall be deemed to have been issued, retired and no longer authorized for issuance or outstanding for the purposes of section 3-21 and for the purpose of aligning the funding of such authorized purpose and project with amounts generated by net premiums, but shall not constitute an actual bond issuance or bond retirement for any other purposes, including, but not limited to, financial reporting purposes.
This act shall take effect as follows and shall amend the following sections:
Section 1 July 1, 2015 3-20(b)
Sec. 2 July 1, 2015 3-20(f)
This act shall take effect as follows and shall amend the following sections:
Section 1
July 1, 2015
3-20(b)
Sec. 2
July 1, 2015
3-20(f)
Statement of Purpose:
To change the treatment of bond premiums under the State General Obligation Bond Procedure Act.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]