Senate Bill No. 607
Public Act No. 04-116
AN ACT CONCERNING THE INVESTMENT OF MUNICIPAL LOSS AND RETIREE BENEFITS RESERVE FUNDS.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. Section 7-403a of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(a) Upon the recommendation of the chief executive officer of a municipality and approval of the budget-making authority of the municipality, the legislative body of any municipality, as defined in section 7-369, may, by a majority vote, create a loss and retiree benefits reserve fund.
(b) Upon the recommendation of the chief executive officer and approval of the budget-making authority and the legislative body, there shall be paid into such reserve fund (1) amounts authorized to be transferred thereto from the general fund cash surplus available at the end of any fiscal year, (2) amounts raised by the annual levy of a tax for the benefit of such fund, and for no other purpose, provided such tax shall be levied and collected in the same manner and at the same time as the regular annual taxes of the municipality, or (3) the proceeds of bonds, notes or other obligations issued pursuant to subsection (b) of section 7-374b.
(c) The budget-making authority may, from time to time, direct the treasurer to invest such portion of such reserve fund as in its opinion is advisable, provided: (1) Not more than [thirty-one] forty per cent of the total amount invested shall be invested in equity securities and (2) not less than fifty per cent of the total amount invested shall be invested in United States government obligations, United States agency obligations, United States postal service obligations, certificates of deposit, commercial paper, savings accounts and bank acceptances.
(d) The treasurer shall submit annually a complete and detailed report of the condition of such fund to the chief executive officer, the budget-making authority and the legislative body and such report shall be made a part of the annual report of the municipality.
(e) Upon the recommendation of the chief executive officer and the budget-making authority and approval by the legislative body, any part or the whole of such fund may be used and appropriated to pay only for property or casualty losses and employee retirement benefits, and expenses related thereto, including court costs and attorneys' fees, incurred by the municipality. Any unexpended portion of such appropriation remaining after such payment, together with all interest accruing on the balance in the fund, shall revert to and be credited to such reserve fund. For the purposes of this section, "property or casualty losses and employee retirement benefits" shall include, but not be limited to, (1) motor vehicle liability, physical damage and collision, (2) loss or damage to, or legal liability for, real or personal property, (3) legal liability for personal injuries or deaths, including but not limited to, workers' compensation and heart and hypertension, and (4) retiree health and life benefits.
(f) Such fund may be discontinued, after recommendation by the chief executive officer and the budget-making authority to the legislative body and upon approval of such body, and such fund shall be converted into, or added to, a sinking fund to provide for the retirement of the bonded indebtedness of the municipality. If the municipality has no bonded indebtedness, such fund shall be transferred to the general fund of the municipality.
Approved May 21, 2004