Sec. 10a-109g. Terms of financing transactions. - Connecticut Statutes

      Sec. 10a-109g. Terms of financing transactions. (a)(1) The university is authorized to provide by resolution, at one time or from time to time, for the issuance and sale of securities, in its own name on behalf of the state, pursuant to section 10a-109f. The board of trustees of the university is hereby authorized by such resolution to delegate to its finance committee such matters as it may determine appropriate other than the authorization and maximum amount of the securities to be issued, the nature of the obligation of the securities as established pursuant to subsection (c) of this section and the projects for which the proceeds are to be used. The finance committee may act on such matters unless and until the board of trustees elects to reassume the same. The amount of securities the special debt service requirements which are secured by the state debt service commitment that the board of trustees is authorized to provide for the issuance and sale in accordance with this subsection shall be capped in each fiscal year in the following amounts provided, to the extent the board of trustees does not provide for the issuance of all or a portion of such amount in a fiscal year, all or such portion, as the case may be, may be carried forward to any succeeding fiscal year and provided further, the actual amount for funding, paying or providing for the items described in subparagraph (C) of subdivision (10) of subsection (a) of section 10a-109d may be added to the capped amount in each fiscal year:

Fiscal YearAmount 1996$112,542,000 1997  112,001,000 1998    93,146,000 1999    64,311,000 2000  130,000,000 2001  100,000,000 2002  100,000,000 2003  100,000,000 2004  100,000,000 2005    100,000,000 2006    79,000,000 2007    89,000,000 2008  115,000,000 2009  140,000,000 2010  140,500,000 2011  146,500,000 2012  123,100,000 2013  114,500,000 2014  111,500,000 2015  100,000,000 2016    90,900,000

      (2) Subject to amount limitations of such capping provisions in subdivision (1) of this subsection and following approval of such resolution as provided in subsection (b) of section 10a-109f, the principal amount of the securities authorized therein for such project or projects shall be deemed to be an appropriation and allocation of such amount for such project or projects, respectively, and such approval by the Governor of such resolution shall be deemed the allotment by the Governor of such capital outlays within the meaning of section 4-85 and the university (A) may award a contract or contracts and incur an obligation or obligations with respect to each such project or projects authorized pursuant to and within the amount authorized in such resolution, notwithstanding that such contract or obligation may at any particular time exceed the amount of the proceeds from the sale of securities theretofore received by the university, and (B) may issue and sell securities respecting such contracts or obligations referred to in subparagraph (A) only at such time or times as shall be needed to have the proceeds thereof available to pay requisitions expected thereunder within the year following issuance of such securities and to provide for costs of UConn 2000 of not more than twenty per cent in excess and regardless of such anticipated cash expenditure requirements but subject to section 10a-109q, provided the amount needed for funding, paying or providing for the items described in subparagraph (B) of subdivision (10) of subsection (a) of section 10a-109d may be added to the amount of securities so issued.

      (b) After issuance, all securities of the university shall be conclusively presumed to be fully and duly authorized and issued under the laws of the state, and any person or governmental unit shall be estopped from questioning their authorization, sale, issuance, execution or delivery by the university.

      (c) Securities issued by the university may be issued under an indenture of trust or bond resolution, shall be general obligations of the university, for which its full faith and credit shall be pledged, payable out of any revenues or other assets, receipts, funds or moneys of the university and may be additionally secured by a pledge of revenues to be derived from the operation of a project, by assured revenues and by other assets other than a mortgage, subject only to any agreements with the holders of particular securities pledging any particular assets, revenues, receipts, funds or moneys, unless the university shall otherwise expressly provide by the indenture or resolution that such securities shall be special obligations of the university payable solely from any revenues or other assets, including project revenues, such assured revenues that may be restricted by the terms of receipt thereof to a particular project or projects to be financed by such special obligations subject only to any agreements with the holders of particular securities pledging any particular assets, revenues, receipts, funds or moneys. The form of the master resolution or indenture for securities, the special debt service requirements for which, are secured by the state debt service commitment and containing the state covenant pursuant to section 10a-109u shall be approved by the State Bond Commission prior to the first issue of such securities and any substantive amendment thereof shall also be approved by the State Bond Commission. At such time as the master resolution or indenture is submitted to the State Bond Commission the university shall file with the State Bond Commission the list of projects to be financed by securities secured by the state debt service commitment for the second phase of UConn 2000. The form of the master resolution or indenture for securities for the third phase of UConn 2000, the special debt requirements for which are secured by the state debt service commitment and containing the state covenant pursuant to section 10a-109u, shall be approved by the State Bond Commission prior to the first issue of such securities and any substantive amendment thereof shall also be approved by the State Bond Commission. At such time as the master resolution or indenture for the third phase of UConn 2000 is submitted to the State Bond Commission, the university shall file with the State Bond Commission the list of projects to be financed by securities secured by the state debt service commitment for the third phase of UConn 2000.

      (d) The resolution or indenture pursuant to which securities are issued shall provide for the dates of the securities, the maturity dates, which in the case of securities issued to finance equipment and collections, shall not exceed five years and, in the case of securities issued for any other purpose shall not exceed thirty years from their dated dates, the special debt service requirements and dates thereof, the rate or rates of interest or the manner of varying or determining such rate or rates, the cash flow requirements to cover the cost of UConn 2000 or components thereof to be funded from the proceeds of such securities, and by whom, on behalf of the university, such securities shall be delivered, signed or countersigned, and by whom, on behalf of the university, disbursements and investments may be made and all other particulars thereof and may contain for the benefit of holders, from time to time and as a contract therewith, any agreements and the provisions deemed necessary or appropriate by the university in connection with the issuance of such securities and may provide for the terms and security thereof, including, without limitation, (1) terms and pledges respecting assured revenues or project revenues and respecting the fixing and collection of other revenues of the university or from any project covered by such resolution or indenture provisions, if any; (2) provisions respecting custody of the proceeds from the sale of such securities; (3) provisions for the investment and reinvestment of proceeds of the securities until used to pay costs of a project and for the disposition of any excess proceeds of the securities or investment earnings thereon; (4) provisions for the execution of reimbursement agreements or similar agreements in connection with credit facilities, including, but not limited to, letters of credit or policies of bond insurance, remarketing agreements and, subject to the approval of the State Treasurer under section 10a-109j, agreements for the purpose of moderating interest rate fluctuations, and of such other agreements entered into pursuant to section 3-20a; (5) provisions for the collection, custody, investment, reinvestment and use of revenues or other receipts, funds or moneys pledged therefor; (6) provisions regarding the establishment and maintenance of reserves, sinking funds and any other funds and accounts as shall be approved by the university in such amounts as the university may establish and the requirements, investments and application thereof; (7) covenants for the establishment of pledged revenue coverage requirements for such securities; (8) covenants for the establishment of maintenance and insurance requirements with respect to a project or projects; (9) provision for the issuance of additional securities on a parity with securities theretofore issued, including establishment of coverage requirements with respect thereto; (10) the terms to be incorporated in any loan of the proceeds of such securities, and in any lease of a project or projects; (11) the creation and maintenance of special funds from the revenues of a project or projects; (12) the rights and remedies available to the holder or holders of securities in the event of default, the vesting in a trustee or trustees of such property, rights, powers and duties in trust as the university may determine, which may include any or all of the rights, powers and duties of any trustee appointed by the holders of any securities and limiting or abrogating the right of the holders of any securities of the university to appoint a trustee under sections 10a-109a to 10a-109y, inclusive, or limiting the rights, powers and duties of such trustee; (13) provision for a trust indenture by and between the university 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 revenues, assets or income from assets to which or in which the university 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 securities and not otherwise in violation of law, and such agreement may provide for the restriction of the rights of any individual holder of securities of the university and may contain any further provisions which are reasonable to delineate further the respective rights, duties, safeguards, responsibilities and liabilities of the university, persons and collective holders of securities of the university and the trustee; (14) 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 securities of the university or to maintain the federal or state tax exemption thereon, or which, in the discretion of the university, will tend to make any securities to be issued more marketable notwithstanding that such covenants, acts or things may not be enumerated above; (15) and any other matters of like or different character, which in any way affect the security or protection of the securities of the university, all as the university shall deem advisable and not in conflict with the provisions of sections 10a-109a to 10a-109y, inclusive.

      (e) Securities issued under authority of sections 10a-109a to 10a-109y, inclusive, shall be sold by the Treasurer of the state, on behalf of the university, subject in all respects to the indenture of trust or bond resolution approved by the university respecting the securities to be sold, at public or private sale at such price, whether par, premium or discount, and at such time or times, subject in each fiscal year to the cash flow requirements of the university to cover the cost of UConn 2000, as may be determined in the best interest of the state and university by the Treasurer and evidenced by his execution of a certificate of determination to be filed with the university and the secretary of the State Bond Commission upon completion of the sale pursuant to subsection (f) of this section. All costs of issuance in connection with the authorization, sale and issuance of the securities, including interest during construction of any projects being financed with the proceeds thereof, costs and expenses of financial advisers, underwriters, counsel, initial trustee, interest rate protection, credit enhancement, liquidity, letter of credit, and ratings, if any, shall be paid from the proceeds and accrued interest of the securities unless the university determines to pay any of such costs and expenses out of other funds available to it.

      (f) The Treasurer shall set the terms and provisions of the sale of any securities, receive bids or proposals, award and sell any securities, and take all other action appropriate or necessary in connection therewith including rejecting any bid or proposal not meeting the sale requirements, in conjunction with the board of trustees of the university which is hereby authorized by a majority vote to delegate such matters to its finance committee or to any officer, official or trustee serving on such finance committee.

      (g) The proceeds of the securities of any issue shall be used solely for the purpose or purposes identified in the master indenture, and shall be disbursed in such manner and under such restrictions, if any, as the university may provide in the resolution authorizing the issuance of such securities or in the indenture or resolution securing the same. The university shall not lease or finance or lease-finance any land or building outside the Storrs campus through any other state agency or quasi-public agency other than those leases, financings or lease purchases in the ordinary course of its activities and provided the annual expenditure thereof during the period of agreements related thereto whether expressed as rent, debt service, lease purchase payments or the like does not exceed for each item which is the subject matter of the lease, finance or lease-finance agreement, fifty thousand dollars in any year and such limitation shall apply as long as the university is authorized in accordance with subsection (a) of this section to issue securities under sections 10a-109a to 10a-109y, inclusive. The resolution providing for the issuance of securities, and any indenture or resolution securing such securities, may contain such limitations upon the issuance of additional securities as the university may deem proper, and such additional securities shall be issued under such restrictions and limitations as may be prescribed by such indenture or resolution, provided, no such resolution or indenture shall include a covenant committing the university to the issuance of additional securities secured by a pledge of the state debt service commitment. The university may provide for the replacement of any securities which become mutilated, or are destroyed, stolen or lost. Securities may be issued under sections 10a-109a to 10a-109y, inclusive, without obtaining the consent of any department, division, commission, board, bureau, or agency of the state and without any other proceedings or the happening of any other conditions or things other than those proceedings, conditions or things which are specifically required by sections 10a-109a to 10a-109y, inclusive.

      (h) Money borrowed and securities issued and delivered by the university shall not constitute a debt or liability of the state or of any municipality or any political subdivision of the state, but shall be payable solely from the resources of the university described in and pursuant to the indenture of trust or resolution under which they are issued, and all such securities shall contain on their face a statement to that effect. The borrowing of money and the issuance of securities by the university shall not directly or indirectly or contingently obligate the state or any municipality or political subdivision to levy or to pledge any form of taxation and such securities shall not constitute an indebtedness of the state within the meaning of any constitutional or statutory debt limitation or restriction and accordingly, shall not be subject to any statutory limitation on the indebtedness of the state and such securities, when issued, shall not be included in computing the aggregate indebtedness of the state in respect to and to the extent of any such limitation, except that the amount of securities in each fiscal year in which the General Assembly has authorized the board of trustees to provide for the issuance and sale of securities pursuant to subsection (a) of this section for purposes of section 3-21, but subject to the exclusions or deductions provided in said section 3-21, shall be deemed to be indebtedness of the state until deemed paid or retired. For any years for which there is not an estimate of net tax revenues, the Wharton Econometric Forecasting Associates projection of consumer price index growth shall be applied to the most recently adopted state revenue estimate and shall be deemed to satisfy the provisions of subsection (d) of said section 3-21.

      (i) In connection with the issuance of securities, the university 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 securities, to the extent provided in the resolution of the university authorizing the issuance thereof, and (3) any other moneys which may be made available to the university 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 subsection, except as provided in this subsection, shall be used solely for the payment of the principal of special obligation securities of the university secured by such special capital reserve fund as the same become due, the purchase of such special obligation securities of the university, the payment of interest on such special obligation securities of the university or the payment of any redemption premium required to be paid when such special obligation securities are redeemed prior to maturity; provided the university may 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 reason of maturity or a required sinking fund installment in the succeeding calendar year on the special obligation securities of the university then outstanding and secured by such special capital reserve fund or such lesser amount specified by the university in its resolution authorizing the issuance of any such special obligation securities, such amount being referred to in this subsection as the "required minimum capital reserve", except for the purpose of paying such principal of, redemption premium and interest on such special obligation securities of the university secured by such special capital reserve becoming due and for the payment of which other moneys of the university are not available. The university may provide that it shall not issue special obligation securities at any time if the required minimum capital reserve on the special obligation securities outstanding and the special obligation securities then to be issued and secured by a special capital reserve fund will exceed the amount of such special capital reserve fund at the time of issuance, unless the university, at the time of the issuance of such special obligation securities, shall deposit in such special capital reserve fund from the proceeds of the special obligation securities 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 chairperson of the board of trustees to the Secretary of the Office of Policy and Management and Treasurer of the state, 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 university for deposit therein. 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 amortized costs. Nothing contained in this section or section 10a-105 shall preclude the university from establishing and creating other debt service reserve funds in connection with the issuance of securities of the university. Subject to any agreement or agreements with holders of outstanding special obligation securities of the university, any amount or amounts allotted and paid to the university by the state pursuant to this section shall be repaid to the state from moneys of the university 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 special obligation securities of the university theretofore issued on the date or dates such amount or amounts are allotted and paid to the university or thereafter issued, together with interest on such special obligation securities, 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. A special capital reserve fund shall not be created, established or applicable or available pursuant to this subsection unless the board of trustees of the university is of the opinion and determines its self-sufficiency in that (A) project revenues or assured revenues, other than those to be derived from the state debt service commitment and the minimum state operating provision, and as a result of the implementation of its rate covenant, are estimated and expected, assuming continued compliance by the state and the university with the provisions of sections 10a-109a to 10a-109y, inclusive, be sufficient (i) to pay the applicable special debt service requirements on special obligation securities, (ii) to establish, increase and maintain any reserves deemed by the university to be advisable to secure the payment of the special debt service requirements on such special obligation securities and to maintain its renewal and replacement fund and (iii) to operate and maintain in a prudent and economical manner the physical infrastructure of the university and (B) the university has recently reviewed and resolved that it is in compliance with its rate covenant referred to in section 10a-109e. Prior to the issuance of special obligation securities, the security for which is to be enhanced by such a special capital reserve fund, the aforementioned self-sufficiency finding by the university shall be submitted to and confirmed as not unreasonable or arbitrary in the certificate of determination referred to in subsection (e) of this section by the Treasurer of the state. In addition, a special capital reserve fund shall be used only if such use improves or is essential to the rating of the securities or provides interest savings as determined by the Treasurer of the state. The provisions of this subsection respecting the creation, establishment and enhancement of a special capital reserve fund shall not be available or applicable to any general obligation securities issued by the university pursuant to sections 10a-109a to 10a-109y, inclusive.

      (P.A. 95-230, S. 7, 45; P.A. 96-180, S. 134, 166; P.A. 98-124, S. 6, 12; May 9 Sp. Sess. P.A. 02-3, S. 4-6; P.A. 06-196, S. 73; June Sp. Sess. P.A. 07-7, S. 54.)

      History: P.A. 95-230 effective June 7, 1995 (Revisor's note: In Subsec. (g), the phrase "securities which become mutilated or be destroyed, stolen or lost" was replaced editorially by the Revisors with "securities which become mutilated, or are destroyed, stolen or lost" for grammatical accuracy); P.A. 96-180 made a technical change in Subsec. (a)(1), effective June 3, 1996; P.A. 98-124 modified Subdiv. (4) to include agreements entered into pursuant to Sec. 3-20a, effective May 27, 1998; May 9 Sp. Sess. P.A. 02-3 amended Subsec. (a)(1) to revise the amount authorized for fiscal year 2005, to provide for authorized amounts for fiscal years 2006 to 2015 and to make a technical change, amended Subsec. (c) to add provisions re approval of the master resolution or indenture by the State Bond Commission and amended Subsec. (g) to provide for use of the proceeds of any bond issues for purposes identified in the master indenture, effective July 1, 2002; P.A. 06-196 made technical changes in Subsec. (g), effective June 7, 2006; June Sp. Sess. P.A. 07-7 amended Subsec. (a)(1) to revise amounts authorized for fiscal years 2008 to 2015, and to include authorization of $90,900,000 for fiscal year 2016, effective November 2, 2007.