Connecticut 2020 Regular Session

Connecticut Senate Bill SB00305 Compare Versions

Only one version of the bill is available at this time.

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5	5	LCO No. 2244 1 of 8
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7	7	General Assembly Raised Bill No. 305
8	8	February Session, 2020
9	9	LCO No. 2244
10	10
11	11
12	12	Referred to Committee on HIGHER EDUCATION AND
13	13	EMPLOYMENT ADVANCEMENT
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15	15
16	16	Introduced by:
17	17	(HED)
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22	22	AN ACT CONCERNING TH E CONNECTICUT HEALTH AND
23	23	EDUCATIONAL FACILITIES AUTHORITY AND THE CONNECTICUT
24	24	HIGHER EDUCATION SUP PLEMENTAL LOAN AUTHO RITY.
25	25	Be it enacted by the Senate and House of Representatives in General
26	26	Assembly convened:
27	27
28	28	Section 1. Subsection (g) of section 10a-178 of the general statutes is 1
29	29	repealed and the following is substituted in lieu thereof (Effective October 2
30	30	1, 2020): 3
31	31	(g) "Health care institution" means (1) any nonprofit, state-aided 4
32	32	hospital or other health care institution, including The University of 5
33	33	Connecticut Health Center, which is entitled, under the laws of the state, 6
34	34	to receive assistance from the state by means of a grant made pursuant 7
35	35	to a budgetary appropriation made by the General Assembly, (2) any 8
36	36	other hospital or other health care institution which is licensed, or any 9
37	37	nonprofit, nonstock corporation which shall receive financing or shall 10
38	38	undertake to construct or acquire a project which is or will be eligible to 11
39	39	be licensed, as an institution under the provisions of sections 19a-490 to 12
40	40	19a-503, inclusive, [or] (3) any nonprofit, nonstock, nonsectarian facility 13
41	41	which is exempt from taxation under the provisions of section 12-81 or 14 Raised Bill No. 305
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45	45	LCO No. 2244 2 of 8
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47	47	38a-188 and which is a health care center under the provisions of 15
48	48	sections 38a-175 to 38a-194, inclusive, [or (3)] (4) any nonprofit 16
49	49	corporation that is (A) wholly owned by two or more hospitals or other 17
50	50	health care institutions which operates for and on behalf of such 18
51	51	hospitals or other health care institutions a project, as defined in 19
52	52	subsection (b) of this section, or [is] (B) a nursing home, or (5) any 20
53	53	affiliated health care institution, as defined in subsection (r) of this 21
54	54	section; 22
55	55	Sec. 2. Section 10a-178 of the general statutes is amended by adding 23
56	56	subsection (r) as follows (Effective October 1, 2020): 24
57	57	(NEW) (r) "Affiliated health care institution" means a (1) hospital, 25
58	58	health care institution or institution, as defined in subsection (a) of 26
59	59	section 19a-490, (2) nonprofit, nonstock corporation that undertakes to 27
60	60	construct or acquire a project that would qualify as a hospital, health 28
61	61	care institution or institution, as defined in subsection (a) of section 19a-29
62	62	490, or (3) nonprofit, nonstock, nonsectarian health care center that 30
63	63	conducts activities and carries out purposes as described in subsection 31
64	64	(b) of section 38a-176, which entity, as described in subdivisions (1) to 32
65	65	(3), inclusive, of this subsection, (A) (i) is (I) a subsidiary wholly or 33
66	66	partially owned or controlled by an in-state health care institution, as 34
67	67	defined in subdivision (2) or (3) of subsection (g) of this section, and (II) 35
68	68	located in another state, or (ii) is (I) wholly under common ownership 36
69	69	or control as an in-state health care institution, as defined in subdivision 37
70	70	(2) or (3) of subsection (g) of this section, and (II) located in the state of 38
71	71	New York or Rhode Island or the commonwealth of Massachusetts, and 39
72	72	(B) for the purpose of financing a project, is jointly obligated with such 40
73	73	in-state health care institution on any bonds issued by the authority 41
74	74	pursuant to this chapter. 42
75	75	Sec. 3. Subdivision (1) of subsection (k) of section 10a-179 of the 2020 43
76	76	supplement to the general statutes is repealed and the following is 44
77	77	substituted in lieu thereof (Effective October 1, 2020): 45
78	78	(k) (1) The authority may form one or more subsidiaries to carry out 46 Raised Bill No. 305
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82	82	LCO No. 2244 3 of 8
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84	84	the public purposes of the authority and may transfer to any such 47
85	85	subsidiary, including to any subsidiary established by the General 48
86	86	Assembly through public or special act, any moneys and real or 49
87	87	personal property of any kind or nature. Any such subsidiary may be 50
88	88	organized as a stock or nonstock corporation or a limited liability 51
89	89	company. Each such subsidiary shall have and may exercise such 52
90	90	powers of the authority as are set forth in the resolution of the authority 53
91	91	or in a public or special act of the General Assembly prescribing the 54
92	92	purposes for which such subsidiary is formed and such other powers 55
93	93	provided to it by law. Each such subsidiary shall be deemed a quasi-56
94	94	public agency for purposes of chapter 12 and shall have all the 57
95	95	privileges, immunities, tax exemptions and other exemptions of the 58
96	96	authority, including the privileges, immunities, tax exemptions and 59
97	97	other exemptions provided under the general statutes for special capital 60
98	98	reserve funds. Each such subsidiary shall be subject to suit provided its 61
99	99	liability shall be limited solely to the assets, revenues and resources of 62
100	100	the subsidiary and without recourse to the general funds, revenues, 63
101	101	resources or any other assets of the authority. Each such subsidiary is 64
102	102	authorized to assume or take title to property subject to any existing lien, 65
103	103	encumbrance or mortgage and to mortgage, convey or dispose of its 66
104	104	assets and pledge its revenues in order to secure any borrowing, for the 67
105	105	purpose of refinancing, rehabilitating or improving its assets, provided 68
106	106	each such borrowing or mortgage shall be a special obligation of the 69
107	107	subsidiary, which obligation may be in the form of bonds, bond 70
108	108	anticipation notes and other obligations to the extent permitted under 71
109	109	this chapter to fund and refund the same and provide for the rights of 72
110	110	the holders thereof, and to secure the same by pledge of revenues, notes 73
111	111	and other assets and which shall be payable solely from the assets, 74
112	112	revenues and other resources of the subsidiary. The authority shall have 75
113	113	the power to assign to a subsidiary any rights, moneys or other assets it 76
114	114	has under any governmental program including the nursing home loan 77
115	115	program. 78
116	116	Sec. 4. Subdivision (18) of section 10a-223 of the general statutes is 79
117	117	repealed and the following is substituted in lieu thereof (Effective October 80 Raised Bill No. 305
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121	121	LCO No. 2244 4 of 8
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123	123	1, 2020): 81
124	124	(18) "Education assistance program" means a program to assist in 82
125	125	financing the costs of education through education loans, [or] education 83
126	126	grants [, or both] or any other financial assistance made or awarded by 84
127	127	the authority to an individual who attends an institution of higher 85
128	128	education in the state or currently resides in the state; 86
129	129	Sec. 5. Subdivision (7) of subsection (a) of section 10a-225 of the 87
130	130	general statutes is repealed and the following is substituted in lieu 88
131	131	thereof (Effective October 1, 2020): 89
132	132	(7) To establish guidelines, criteria and procedures not in conflict 90
133	133	with existing statutes with respect to authority loans, education [grants, 91
134	134	education loans] assistance programs and education loan series 92
135	135	portfolios. Such guidelines, criteria and procedures shall not be 93
136	136	construed as regulations within the scope of chapter 54. 94
137	137	Sec. 6. Section 10a-230 of the general statutes is amended by adding 95
138	138	subsection (i) as follows (Effective October 1, 2020): 96
139	139	(NEW) (i) The state of Connecticut does hereby pledge to and agree 97
140	140	with the holders of any bonds and notes issued under this chapter and 98
141	141	with those parties who may enter into contracts with the authority or its 99
142	142	successor agency pursuant to the provisions of this chapter that the state 100
143	143	will not limit or alter the rights hereby vested in the authority until such 101
144	144	obligations, together with the interest thereon, are fully met and 102
145	145	discharged and such contracts are fully performed on the part of the 103
146	146	authority, provided nothing contained herein shall preclude such 104
147	147	limitation or alteration if and when adequate provision shall be made 105
148	148	by law for the protection of the holders of such bonds and notes of the 106
149	149	authority or those entering into such contracts with the authority. The 107
150	150	authority is authorized to include this pledge and undertaking for the 108
151	151	state in such bonds and notes or contracts. 109
152	152	Sec. 7. Subsection (b) of section 10a-232 of the general statutes is 110
153	153	repealed and the following is substituted in lieu thereof (Effective October 111 Raised Bill No. 305
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157	157	LCO No. 2244 5 of 8
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159	159	1, 2020): 112
160	160	(b) Notwithstanding the foregoing, (1) the constituent units of the 113
161	161	state system of higher education may participate in one or more 114
162	162	education loan programs with the authority and may incur 115
163	163	indebtedness pursuant to authority loans, and (2) the authority may 116
164	164	create and establish one or more reserve funds to be known as special 117
165	165	capital reserve funds and may pay into such special capital reserve 118
166	166	funds (A) any moneys appropriated and made available by the state for 119
167	167	the purposes of such funds, (B) any proceeds of sale of notes or bonds, 120
168	168	to the extent provided in the resolution of the authority authorizing the 121
169	169	issuance thereof, [and] (C) any other moneys which may be made 122
170	170	available to the authority for the purpose of such funds from any other 123
171	171	source or sources, and (D) any surety policy or other similar instrument 124
172	172	issued by a financial institution that is rated "AA" or better by at least 125
173	173	one nationally recognized statistical rating organization and approved 126
174	174	by the State Treasurer, which surety policy or instrument shall be in a 127
175	175	form prescribed by the State Treasurer and valued at par and payable 128
176	176	or available to be drawn upon on or before any date by which debt 129
177	177	service on the bonds secured thereby is required to be paid. The moneys, 130
178	178	surety policy or similar instrument held in or credited to any special 131
179	179	capital reserve fund established under this section, except as hereinafter 132
180	180	provided, shall be used solely for the payment of the principal of bonds 133
181	181	of the authority secured by such capital reserve fund as the same 134
182	182	become due, the purchase of such bonds of the authority, the payment 135
183	183	of interest on such bonds of the authority or the payment of any 136
184	184	redemption premium required to be paid when such bonds are 137
185	185	redeemed prior to maturity; provided, the authority shall have power 138
186	186	to provide that moneys in any such fund shall not be withdrawn 139
187	187	therefrom at any time in such amount as would reduce the amount of 140
188	188	such funds to less than the maximum amount of principal and interest 141
189	189	becoming due by reason of maturity or a required sinking fund 142
190	190	installment in any succeeding calendar year on the bonds of the 143
191	191	authority then outstanding and secured by such special capital reserve 144
192	192	fund, or such lesser amount specified by the authority in its resolution 145 Raised Bill No. 305
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196	196	LCO No. 2244 6 of 8
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198	198	authorizing the issuance of any such bonds, such amount being herein 146
199	199	referred to as the "required minimum capital reserve", except for the 147
200	200	purpose of paying such principal of, redemption premium and interest 148
201	201	on such bonds of the authority secured by such special capital reserve 149
202	202	becoming due and for the payment of which other moneys of the 150
203	203	authority are not available. The authority may provide that it shall not 151
204	204	issue bonds at any time if the required minimum capital reserve on 152
205	205	outstanding bonds secured by a special capital reserve fund and the 153
206	206	bonds then to be issued and secured by a special capital reserve fund 154
207	207	will exceed the amount of such special capital reserve fund at the time 155
208	208	of issuance, unless the authority, at the time of the issuance of such 156
209	209	bonds, shall deposit in such special capital reserve fund from the 157
210	210	proceeds of the bonds so to be issued, or otherwise, an amount which, 158
211	211	together with the amount then in such special capital reserve fund, will 159
212	212	be not less than the required minimum capital reserve. The authority 160
213	213	may, as part of the contract of the authority with the owners of such 161
214	214	bonds, provide that on or before December first, annually, there is 162
215	215	deemed to be appropriated from the state General Fund such sums, if 163
216	216	any, as shall be certified by the chairman of the authority to the Secretary 164
217	217	of the Office of Policy and Management and the Treasurer of the state, 165
218	218	as necessary to restore each such special capital reserve fund to the 166
219	219	amount equal to the required minimum capital reserve of such fund, 167
220	220	and such amounts shall be allotted and paid to the authority. For the 168
221	221	purpose of evaluation of any such special capital reserve fund, 169
222	222	obligations acquired as an investment for any such fund shall be valued 170
223	223	at amortized cost. Nothing contained in this section shall preclude the 171
224	224	authority from establishing and creating other debt service reserve 172
225	225	funds in connection with the issuance of bonds or notes of the authority. 173
226	226	Subject to any agreement or agreements with owners of outstanding 174
227	227	notes and bonds of the authority, any amount or amounts allotted and 175
228	228	paid to the authority pursuant to this section shall be repaid to the state 176
229	229	from moneys of the authority at such time as such moneys are not 177
230	230	required for any other of its corporate purposes and in any event shall 178
231	231	be repaid to the state on the date one year after all bonds and notes of 179
232	232	the authority theretofore issued on the date or dates such amount or 180 Raised Bill No. 305
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236	236	LCO No. 2244 7 of 8
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238	238	amounts are allotted and paid to the authority or thereafter issued, 181
239	239	together with interest on such bonds and notes, with interest on any 182
240	240	unpaid installments of interest and all costs and expenses in connection 183
241	241	with any action or proceeding by or on behalf of the owners thereof, are 184
242	242	fully met and discharged. 185
243	243	(c) Notwithstanding any other provisions contained in this chapter, 186
244	244	the aggregate amount of bonds outstanding at any time secured by such 187
245	245	special capital reserve funds authorized to be created and established by 188
246	246	this section shall not exceed [three] five hundred million dollars and no 189
247	247	such bonds shall be issued to pay program costs unless the authority is 190
248	248	of the opinion and determines that the revenues to be derived from the 191
249	249	program shall be sufficient (1) to pay the principal of and interest on the 192
250	250	bonds issued to finance the program, (2) to establish, increase and 193
251	251	maintain any reserves deemed by the authority to be advisable to secure 194
252	252	the payment of the principal of and interest on such bonds, (3) to pay 195
253	253	the cost of maintaining and servicing the program and keeping it 196
254	254	properly insured, and (4) to pay such other costs of the program as may 197
255	255	be required. 198
256	256	This act shall take effect as follows and shall amend the following
257	257	sections:
258	258
259	259	Section 1 October 1, 2020 10a-178(g)
260	260	Sec. 2 October 1, 2020 10a-178
261	261	Sec. 3 October 1, 2020 10a-179(k)(1)
262	262	Sec. 4 October 1, 2020 10a-223(18)
263	263	Sec. 5 October 1, 2020 10a-225(a)(7)
264	264	Sec. 6 October 1, 2020 10a-230
265	265	Sec. 7 October 1, 2020 10a-232(b)
266	266
267	267	Statement of Purpose:
268	268	To (1) allow the Connecticut Health and Educational Facilities Authority
269	269	to (A) finance the capital projects of out-of-state health care institutions,
270	270	and (B) make loans and transfer funds to its subsidiaries, and (2) allow
271	271	the Connecticut Higher Education Supplemental Loan Authority to (A)
272	272	fund the Special Capital Reserve Fund with a bank letter of credit, (B)
273	273	increase its Special Capital Reserve Fund backed bond limit to five
274	274	hundred million dollars, (C) allow it to provide educational financial Raised Bill No. 305
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278	278	LCO No. 2244 8 of 8
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280	280	assistance other than loans and grants, and (D) add the state pledge for
281	281	its bond holders.
282	282	[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
283	283	that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
284	284	underlined.]
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