CHAPTER 187b
CONNECTICUT HIGHER EDUCATION
SUPPLEMENTAL LOAN AUTHORITY

      Sec. 10a-224. Connecticut Higher Education Supplemental Loan Authority. Executive director. (a) There is created a body politic and corporate to be known as the "Connecticut Higher Education Supplemental Loan Authority". The authority is constituted a public instrumentality and political subdivision of the state and the exercise by the authority of the powers conferred by this chapter shall be deemed and held to be the performance of an essential public and governmental function. The powers of the authority shall be vested in and exercised by a board of directors which shall consist of eight members, one of whom shall be the State Treasurer, one of whom shall be the Secretary of the Office of Policy and Management and one of whom shall be the Commissioner of Higher Education, each serving ex officio, and five of whom shall be residents of the state appointed by the Governor, not more than three of such appointed members to be members of the same political party. Three of the appointed members shall be active or retired trustees, directors, officers or employees of Connecticut institutions for higher education. At least one of the appointed members shall be a person having a favorable reputation for skill, knowledge and experience in the higher education loan finance field, and at least one of such appointed members shall be a person having a favorable reputation for skill, knowledge and experience in state and municipal finance, either as a partner, officer or employee of an investment banking firm which originates and purchases state and municipal securities, or as an officer or employee of an insurance company or bank whose duties relate to the purchase of state and municipal securities as an investment and to the management and control of a state and municipal securities portfolio. Of the three members first appointed who are trustees, directors, officers or employees of Connecticut institutions for higher education, one shall serve until July 1, 1986, one shall serve until July 1, 1987, and one shall serve until July 1, 1988. Of the three remaining members first appointed, one shall serve until July 1, 1983, one shall serve until July 1, 1984, and one shall serve until July 1, 1985. On or before the first day of July, annually, the Governor shall appoint a member or members to succeed those whose terms expire, each for a term of six years and until his successor is appointed and has qualified. The Governor shall fill any vacancy for the unexpired term. A member of the board shall be eligible for reappointment. Any member of the board may be removed by the Governor for misfeasance, malfeasance or wilful neglect of duty. Each member of the board before entering upon his or her duties shall take and subscribe the oath or affirmation required by section 1 of article eleventh of the State Constitution. A record of each such oath shall be filed in the office of the Secretary of the State. The State Treasurer, the Secretary of the Office of Policy and Management and the Commissioner of Higher Education may each designate a deputy or any staff member to represent him as a member at meetings of the board with full power to act and vote on his behalf.

      (b) The chairperson of the board shall be appointed by the Governor with the advice and consent of both houses of the General Assembly. The board shall annually elect one of its members as vice-chairman. The board may appoint an executive director and assistant executive director, who shall not be members of the board and who shall serve at the pleasure of the board. The executive director and assistant executive director shall receive such compensation as shall be fixed by the board.

      (c) The executive director shall supervise the administrative affairs and technical activities of the authority in accordance with the directives of the board. The executive director shall keep a record of the proceedings of the authority and shall be custodian of all books, documents and papers filed with the authority, the minute book or journal of the authority, and its official seal. The executive director or assistant executive director or other person may cause copies to be made of all minutes and other records and documents of the authority and may give certificates under the official seal of the authority to the effect that such copies are true copies, and all persons dealing with the authority may rely upon such certificates.

      (d) (1) Five members of the board shall constitute a quorum. The affirmative vote of five of the members of the board shall be necessary for any action taken by the board. No vacancy in the membership of the board shall impair the right of a quorum of members to exercise all the rights and perform all the duties of the board. Any action taken by the board under the provisions of this chapter may be authorized by resolution at any regular or special meeting, and each such resolution shall take effect immediately and need not be published or posted. (2) The board of directors may delegate to three or more of its members such board powers and duties as it may deem proper. At least one of such members shall not be a state employee.

      (e) Before the issuance of any bonds or notes under the provisions of this chapter, the chairman and vice-chairman of the board of directors, the executive director and assistant executive director of the authority and any other member of the board authorized by resolution of the board to handle funds or sign checks of the authority shall execute a surety bond in the penal sum of fifty thousand dollars, or in lieu thereof the chairman shall obtain a blanket position bond covering the executive director and every member of the board and other employee of the authority in the penal sum of fifty thousand dollars. Each such bond shall be conditioned upon the faithful performance of the duties of the principal or the members, executive director and other employees, as the case may be, shall be executed by a surety company authorized to transact business in the state as surety, and shall be filed in the office of the Secretary of the State. The cost of each such bond shall be paid by the authority.

      (f) The members of the board shall receive no compensation for the performance of their duties hereunder but each such member shall be paid the necessary expenses incurred by such member while engaged in the performance of such duties.

      (g) (1) No member of the board or officer, agent or employee of the authority shall, directly or indirectly, have any financial interest in any participating institution for higher education or in any corporation, business trust, estate, trust, partnership or association, two or more persons having a joint or common interest, or any other legal or commercial entity contracting with the authority. Any individual who violates the provisions of this subsection shall be punished by a fine of not less than fifty dollars nor more than one thousand dollars, or by imprisonment for not more than one month, or both.

      (2) Notwithstanding the provisions of subdivision (1) of this subsection or the provisions of any other law to the contrary, it shall not be or constitute a conflict of interest or violation of the provisions of said subdivision or the provisions of any other law for a trustee, director, officer or employee of a participating institution of higher education or for a person having the required favorable reputation for skill, knowledge and experience in state and municipal finance or for a person having the required favorable reputation for skill, knowledge and experience in the higher education loan finance field to serve as a member of the board; provided, in each case to which the provisions of this subdivision are applicable, such trustee, director, officer or employee of such participating institution of higher education abstains from discussion, deliberation, action and vote by the board in specific respect to any undertaking pursuant to this chapter in which such participating institution of higher education has a direct interest separate from the interests of all of the participating institutions generally, or such person having the required favorable reputation for skill, knowledge and experience in state and municipal finance abstains from discussion, deliberation, action and vote by the board in specific respect to any sale, purchase or ownership of bonds of the authority in which the investment banking firm or insurance company or bank of which such person is a partner, officer or employee has or may have a current or future interest, or such person having the required favorable reputation for skill, knowledge and experience in the higher education loan finance field abstains from discussion, deliberation, action and vote by the board in specific respect to any action of the authority in which any partnership, firm, joint venture, sole proprietorship or corporation of which such person is an owner, venturer, participant, partner, officer or employee has or may have a current or future interest.

      (h) The board of directors of the authority shall adopt written procedures, in accordance with the provisions of section 1-121, for: (1) Adopting an annual budget and plan of operations, including a requirement of board approval before the budget or plan may take effect; (2) hiring, dismissing, promoting and compensating employees of the authority, including an affirmative action policy and a requirement of board approval before a position may be created or a vacancy filled; (3) acquiring real and personal property and personal services, including a requirement of board approval for any nonbudgeted expenditure in excess of five thousand dollars; (4) contracting for financial, legal, bond underwriting and other professional services, including a requirement that the authority solicit proposals at least once every three years for each such service which it uses; (5) issuing and retiring bonds, bond anticipation notes and other obligations of the authority; (6) awarding loans, grants and other financial assistance, including eligibility criteria, the application process and the role played by the authority's staff and board of directors; and (7) the use of surplus funds to the extent authorized under this chapter or other provisions of the general statutes.

      (i) The authority shall continue as long as it shall have bonds or other obligations outstanding and until its existence is terminated by law. Upon termination of the existence of the authority, all its rights and properties shall pass to and be vested in the state of Connecticut.

      (P.A. 82-313, S. 4, 28; P.A. 87-295, S. 3, 8; P.A. 88-266, S. 24, 46; May Sp. Sess. P.A. 04-2, S. 59; P.A. 07-108, S. 1.)

      History: P.A. 87-295 in Subsec. (a) added the commissioner of higher education as a member of the authority and provided that he may designate a deputy or staff member to represent him, in Subsec. (d) increased the number of members required for a quorum from four to five, inserted "Connecticut" before institutions for higher education, expanded the provisions of Subsec. (g)(1), and made technical changes; P.A. 88-266 amended Subsec. (a) by specifying that authority is a political subdivision of the state and performs a governmental function and requiring powers of the authority to be vested in and exercised by a board of directors, amended Subsec. (b) to require chairperson of board to be appointed by governor with advice and consent of general assembly, amended Subsec. (c) to require executive director to supervise administrative affairs and technical activities of the authority, designated existing provisions of Subsec. (d) as Subdiv. (1) and added Subdiv. (2) re delegation of board powers and duties, amended references to board and authority in Subsecs. (a) to (g), inclusive, and added Subsec. (h) requiring board to adopt written procedures and Subsec. (i) re existence and termination of the authority. May Sp. Sess. P.A. 04-2 amended Subsec. (a) to add provision re appointment of "active or retired" trustees, directors, officers or employees of institutions for higher education to the board of directors, effective May 12, 2004, and applicable to any pledge, lien or security interest of this state or any political subdivision of this state in existence on October 1, 2003, or created after that date; P.A. 07-108 amended Subsec. (a) to delete restriction against more than one appointed member from a constituent unit, effective July 1, 2007.

      Sec. 10a-225. Powers of authority. Use of authority loans. Reduction of principal and interest owed by participating institutions. Master promissory notes. (a) The purpose of the authority shall be to assist borrowers and Connecticut institutions for higher education in the financing and refinancing of the costs of education and for this purpose the authority is authorized and empowered:

      (1) To adopt bylaws for the regulation of its affairs and the conduct of its business.

      (2) To adopt an official seal and alter the same at pleasure.

      (3) To maintain an office at such place or places in the state as it may designate.

      (4) To sue and be sued in its own name, plead and be impleaded.

      (5) To establish criteria and guidelines for education loan financing programs. Such criteria and guidelines shall include such eligibility standards for borrowers as the authority shall determine are necessary or desirable in order to effectuate the purposes of this chapter, including the following: (A) Each student shall have a certificate of admission or enrollment at an institution for higher education, (B) each student, or the parents of each student, shall satisfy such financial qualifications as the authority shall establish to effectuate the purposes of this chapter, and (C) each student, and the parents of each student, shall submit to the student's institution for higher education or to the authority, as the authority may determine, such information as may be required by the authority.

      (6) To establish specific criteria governing the eligibility of Connecticut institutions for higher education to participate in its programs, the making of authority loans and education loans, provisions for default, the establishment of default reserve funds, the purchase of default insurance, the provision by such institutions of prudent debt service reserves, the furnishing by Connecticut institutions for higher education and others of such additional guarantees of the education loans, authority loans or the bonds as the authority shall determine and any procedures for allocating authority loans among Connecticut institutions for higher education eligible for the program of the authority in order to effectuate the purpose of this chapter. All such criteria shall be established to assure the marketability of the bonds and the adequacy of the security for the bonds. The criteria governing the eligibility of Connecticut institutions for higher education shall include limitations upon the principal amounts and the terms of education loans and qualifications and characteristics of borrowers.

      (7) To establish guidelines, criteria and procedures not in conflict with existing statutes with respect to authority loans, education loans and education loan series portfolios. Such guidelines, criteria and procedures shall not be construed as regulations within the scope of chapter 54.

      (8) To receive and accept from any source loans, contributions or grants, including money, property, labor, and other things of value from any source for or in aid of an authority education loan financing program or any portion thereof and, when desirable, to use such funds, property or labor only for the purposes for which it was loaned, contributed or granted.

      (9) To contract with guarantors, financial institutions or other qualified loan origination and servicing organizations, which shall assist in prequalifying borrowers for education loans and which shall service and administer each education loan. The authority may require that each borrower be charged a fee to defray the costs of origination, servicing and administration of education loans. The amount and method of collection of such fee shall be determined by the authority. Participating institutions for higher education may perform any of the acts described in this subdivision, or contract for their performance by others, if these acts are authorized by the authority.

      (10) To contract with a guarantor to provide security for the payment of education loans through the issuance of insurance against default or to provide a guarantee of payment covering all or a portion of any education loan made by or on behalf of the authority or by or on behalf of a participating institution for higher education from the proceeds of an authority loan.

      (11) To employ attorneys, accountants, consultants, financial experts, loan processors, banks, managers, and such other employees and agents as may be necessary in its judgment, and to fix their compensation.

      (12) To make authority loans, including loans on which interest may accrue and periodically be added to the principal of such loan and be subject to additional interest, and to require that the proceeds be used in accordance with guidelines established by the authority for making education loans and paying costs and fees in connection therewith.

      (13) To charge and equitably apportion among participating institutions for higher education its administrative costs and expenses incurred in the exercise of the powers and duties granted by this chapter.

      (14) To borrow working capital funds and other funds as may be necessary for start-up and continuing operations, as long as such funds are borrowed in the name of the authority only. Such borrowings shall be limited obligations of the character described in section 10a-232 and shall be payable solely from revenues of the authority or the proceeds of bonds pledged for that purpose.

      (15) Notwithstanding any other provisions of this chapter, to commingle and pledge as security for a series or issue of bonds, only with the consent of all of the Connecticut institutions for higher education which are participating in such series or issue: (A) The education loan series portfolios and some or all future education loan series portfolios of the authority or of such institutions for higher education, and (B) the loan funding deposits of such institutions, provided education loan series portfolios and other security and moneys set aside in any fund or funds pledged for any series of bonds or issue of bonds shall be held for the sole benefit of such series or issues separate and apart from education loan series portfolios and other security and moneys pledged for any other series or issue of bonds of the authority. Bonds may be issued in series under one or more resolutions or trust agreements in the discretion of the authority.

      (16) To examine records and financial reports of institutions for higher education, and to examine records and financial reports of any person, organization or institution retained under subdivision (9), (10) or (11) of this subsection.

      (17) To do all things necessary or convenient to carry out the purposes of this chapter. In carrying out the purposes of this chapter, the authority may issue bonds, the proceeds of which are used to make authority loans. In the event all or a portion of such proceeds are loaned to one or more participating institutions for higher education or to any combination of participating institutions for higher education, all other provisions of this chapter shall apply to and for the benefit of the authority and the participants in such joint project or projects. Any such joint participation requires the express approval of all participants.

      (18) To make and enter into all contracts and agreements necessary or incidental to the performance of its duties and the execution of its powers under this chapter, including contracts and agreements for such professional services as the board of directors shall deem necessary, including, but not limited to, financial consultants, bond counsel, underwriters and technical specialists and investment agreements, as provided in section 10a-238.

      (b) The authority shall require that authority loans be used solely for the purpose of education loans and in an amount not to exceed the total cost of attendance, less other forms of student assistance, as defined by the authority. In determining "other forms of student assistance" the authority may consider (1) grants received under any federal or state grant programs, (2) loan proceeds received under any federal or other state loan program, (3) scholarship, grants or other nonrepayable assistance received from government agencies, educational institutions or organizations, and (4) expected family contributions. The authority shall require that each borrower under an education loan shall use the proceeds solely for educational purposes and purposes reasonably related thereto.

      (c) Whenever refunding bonds are issued to refund bonds the proceeds of which were used to make authority loans, the authority may reduce the amounts of principal or interest, or both, it is owed by the participating institution for higher education which had received authority loans from the proceeds of the refunded bonds. Such institutions may, or in accordance with guidelines established by the authority shall, use any reduced amount to reduce the amount of interest being paid on education loans which the institution has made pursuant to the authority loans from the proceeds of the refunded bonds.

      (d) (1) The authority may develop and require the use of a master promissory note for education loans. Each master promissory note shall allow borrowers to receive, in addition to initial education loans, additional education loans for the same or subsequent periods of enrollment. Each master promissory note shall include a provision stating that the note shall be governed by and construed pursuant to the laws of the state of Connecticut.

      (2) Notwithstanding any provision of the general statutes or any regulation adopted pursuant to said statutes, each education loan made under a master promissory note pursuant to this subsection may be sold or assigned independently of any other education loan made under the same master promissory note and each such loan shall be separately enforceable on the basis of an original or copy of the master promissory note in accordance with the terms of the master promissory note.

      (3) Notwithstanding any provision of the general statutes, each such master promissory note shall be fully negotiable within the meaning and for all purposes of title 42a, regardless of whether the form and character of such master promissory note qualifies under the terms of the provisions of title 42a.

      (4) The authority may pledge all or any part of its interest in any such master promissory note or the education loan evidenced by such note as security for any issue of bonds or notes or any other obligations. Such pledge shall be valid and binding from the time when the pledge is made; the interest so pledged by the authority shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act, and the lien of any such pledge shall be valid and binding against all parties having claims of any kind in tort, contract or otherwise against the authority or any participating institution for higher education, irrespective of whether such parties have notice of the lien. Such lien shall have priority over all other liens, including, without limitation, the lien of any person who in the ordinary course of business furnishes services or materials to the authority. Notwithstanding the provisions of title 42a, neither the bond resolution nor any financing statement, continuation statement or other instrument by which a pledge or security interest is created or by which the authority's interest in such master promissory notes is assigned need be filed in any public records in order to perfect the security interest or lien thereof as against third parties. Any outright sale by the authority of any education loan evidenced by such a master promissory note shall be effective and perfected automatically upon attachment as defined in title 42a.

      (P.A. 82-313, S. 5, 28; P.A. 87-295, S. 4, 8; P.A. 88-266, S. 25, 46; P.A. 93-96, S. 4; P.A. 94-180, S. 16, 17; P.A. 07-108, S. 2.)

      History: P.A. 87-295 made the section conform with the definitions in Sec. 10a-223 as amended by P.A. 87-295 and made technical changes; P.A. 88-266 amended Subsec. (a) by requiring that guidelines, procedures, etc., not conflict with existing statutes in Subdiv. (7), specifying receipt of money, property, labor, and other things of value from any source is permitted in Subdiv. (8) and adding Subdiv. (18) re authorization and power to make and enter into contracts; P.A. 93-96 amended Subdiv. (18) to allow authority to enter into investment agreements; P.A. 94-180 amended Subsec. (a)(12) to specify that the loans include loans on which interest may accrue and periodically be added to the principal of the loan and be subject to additional interest, effective July 1, 1994; P.A. 07-108 added Subsec. (d) re master promissory notes, effective July 1, 2007.

      Sec. 10a-230. Bonds. (a) The authority may from time to time issue revenue bonds for any corporate purpose and all such revenue bonds, notes, bond anticipation notes or other obligations of the authority issued pursuant to this chapter shall be and are hereby declared to be negotiable for all purposes notwithstanding their payment from a limited source and without regard to any other law or laws. In anticipation of the sale of such revenue bonds, the authority may issue negotiable bond anticipation notes and may renew the same from time to time, but the maximum maturity of any such note, including renewals of such notes shall not exceed five years from the date of issue of the original note. Such notes shall be paid from any revenues of the authority available therefor and not otherwise pledged, or from the proceeds of sale of the revenue bonds of the authority in anticipation of which they were issued. The notes shall be issued in the same manner as the revenue bonds. Such notes and the resolution or resolutions authorizing the same may contain any provisions, conditions or limitations which a bond resolution of the authority may contain.

      (b) The revenue bonds and notes of every issue shall be payable solely out of the revenues of the authority pertaining to the program relating to such bonds or notes including principal and interest on authority loans and education loans, and any other revenues derived from or in connection with any other authority loans and education loans, payments by participating institutions for higher education, banks, guarantors, insurance companies or others pursuant to letters of credit or purchase agreements, investment earnings from funds or accounts maintained pursuant to the bond resolution, insurance proceeds, loan funding deposits, proceeds of sales of education loans, proceeds of refunding bonds and fees, charges and other revenues, funds and other assets of the authority but subject only to any agreements with the holders of particular revenue bonds or notes pledging any particular revenues and subject to any agreements with any participating institution for higher education.

      (c) The revenue bonds or notes may be issued as serial bonds or notes or as term bonds or notes, or the authority, in its discretion, may issue bonds or notes of both types. The revenue bonds or notes shall be authorized by resolution of the members of the board of directors of the authority and shall bear such date or dates, mature at such time or times, not exceeding the year following the last year in which the final payments in an education loan series portfolio are due, or thirty years from the date of issuance, whichever is sooner, from their respective dates, bear interest at such rate or rates, payable at such time or times, be in such denominations, be in such form either coupon or registered, carry such registration or conversion privileges, be executed with manual or facsimile signatures in such manner, be payable in lawful money of the United States at such place or places, and be subject to such terms of redemption, as such resolution or resolutions may provide. Such resolution or resolutions may delegate to the executive director, assistant executive director or any member of the board of directors of the authority, or any combination of them, the power to determine any of the matters set forth in this section and the power to award the bonds to a purchaser or purchasers at public sale or to negotiate a sale to a purchaser or purchasers. The revenue bonds or notes may be sold for such price or prices as the authority shall determine. Pending preparation of the definitive bonds, the authority may issue interim receipts or certificates which shall be exchanged for such definitive bonds.

      (d) Any resolution or resolutions authorizing any revenue bonds or any issue of revenue bonds may contain provisions, which shall be a part of the contract with the holders of the revenue bonds to be authorized, as to: (1) Pledging all or any part of the revenues, funds or other assets of the authority, including, but not limited to, the authority loans and education loans to secure such bonds or notes; (2) pledging all or any part of the revenues paid to the authority by any guarantor or insurance company; (3) pledging any revenue-producing contract or contracts made by the authority with any individual, partnership, corporation or association or other body, public or private, or any federally guaranteed security and moneys received or receivable therefrom whether such security is acquired by the authority or a participating institution for higher education to secure the payment of the revenue bonds or notes or of any particular issue of revenue bonds or notes, subject to such agreements with bondholders or noteholders as may then exist; (4) the fees and other amounts to be charged, and the sums to be raised in each year thereby, and the use, investment and disposition of such sums; (5) the establishment and setting aside of reserves or sinking funds, the setting aside of loan funding deposits, capitalized interest accounts, and cost of issuance accounts, and the regulation and disposition thereof; (6) limitations on the use of the education loans; (7) limitations on the purpose to which the proceeds of the sale of any issue of revenue bonds or notes then or thereafter to be issued may be applied, including as authorized purposes, all costs and expenses necessary or incidental to the issuance of bonds, to the acquisition of or commitment to acquire any federally guaranteed security and pledging such proceeds to secure the payment of the revenue bonds, notes or any issue of the revenue bonds or notes; (8) limitations on the issuance of additional bonds or notes, the terms upon which additional bonds or notes may be issued and secured and the terms on which additional bonds or notes rank on a parity with, or be subordinate or superior to, other bonds or notes; (9) the refunding of outstanding bonds or notes; (10) the procedure, if any, by which the terms of any contract with bondholders or noteholders may be amended or abrogated, the amount of bonds or notes the holders of which must consent thereto, and the manner in which such consent may be given; (11) limitations on the amount of moneys derived from the educational program to be expended for operating, administrative or other expenses of the authority; (12) defining the acts or omissions to act which shall constitute a default in the duties of the authority to holders of its obligations and providing the rights and remedies of such holders in the event of default; (13) the duties, obligations and liabilities of any trustee or paying agent; (14) providing for guarantees, pledges of endowments, letters of credit, property or other security for the benefit of the holders of such bonds or notes; and (15) any other matters relating to the bonds or notes which the authority deems desirable.

      (e) Subject to the approval of the State Treasurer or the Treasurer's deputy appointed pursuant to section 3-12, required under subsection (b) of section 1-124, in connection with, or incidental to:

      (1) The issuance or carrying of bonds, notes or other obligations of the authority, or the acquisition or carrying of any investment or program of investment, the authority may enter into any contract which the authority determines to be necessary or appropriate to place the obligation or investment of the authority, as represented by the bonds, notes or other obligations, investment or program of investment and the contract or contracts, in whole or in part, on the interest rate, cash flow or other basis desired by the authority, including, without limitation, contracts commonly known as interest rate swap agreements, forward payment conversion agreements, futures or contracts providing for payments based on levels of, or changes in, interest rates, stock or other indices, or contracts to exchange cash flows or a series of payments, or contracts, including, without limitation, interest rate floors or caps, options, puts or calls to hedge payment, rate, spread or similar exposure or contracts for the purchase of option rights with respect to the mandatory tender for purchase of bonds, notes or other obligations of the authority, which are subject to mandatory tender or redemption, including the issuance of certificates evidencing the right of the owner to exercise such option rights. Such contracts or agreements may also be entered into by the authority in connection with, or incidental to, entering into or maintaining any agreement which secures its bonds, notes or other obligations, subject to the terms and conditions of the agreement respecting outstanding obligations. In entering into any such contract or agreement, the authority shall give due consideration to 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 or notes of the authority or any other criteria as the authority may deem appropriate, provided the unsecured long-term obligations of the counter party are rated the same or higher than the underlying rating of the authority on the applicable bonds or notes by at least one nationally recognized rating agency. For purposes of this subsection, counter party includes any party providing an unconditional guaranty of the obligations of the counter party under such contract or agreement; and

      (2) The issuance or carrying of bonds, notes or other obligations or entering into any of the contracts or agreements referred to in subdivision (1) of this subsection, the authority may enter into credit enhancement or liquidity agreements, or other necessary or appropriate agreements, with payment, interest rate, security, default, remedy and other terms and conditions as the authority determines, and the authority may pledge all of any part of the collateral that secures the applicable bonds or notes, to the authority's payment obligations under any contract or agreement entered into pursuant to this subsection. Such pledge shall be valid and binding from the time when the pledge is made; the interest so pledged by the authority shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act, and the lien of any such pledge shall be valid and binding against all parties having claims of any kind in tort, contract or otherwise against the authority or any participating institution of higher education, irrespective of whether such parties have notice thereof. Such lien shall have priority over all other liens, including, without limitation, the lien of any person who in the ordinary course of business furnishes services or materials to the authority. Notwithstanding the provisions of title 42a, neither the bond resolution nor any financing statement, continuation statement or other instrument by which a pledge or security interest is created or by which the authority's interest in such collateral is assigned need be filed in any public records in order to perfect the security interest or lien thereof as against third parties. The authority's obligations under any contract or agreement entered into pursuant to this subsection may be enforced as provided in section 10a-235.

      (f) Neither the members of the board of directors of the authority nor any person executing the revenue bonds or notes shall be liable personally on the revenue bonds or notes or be subject to any personal liability or accountability by reason of the issuance thereof.

      (g) The authority shall have power out of any funds available therefor to purchase its bonds or notes. The authority may hold, pledge, cancel or resell such bonds or notes subject to and in accordance with the agreements with bondholders.

      (P.A. 82-313, S. 10, 28; P.A. 88-266, S. 27, 28, 46; May Sp. Sess. P.A. 04-2, S. 60, 61; P.A. 07-108, S. 3.)

      History: P.A. 88-266 inserted references to "board of directors" in Subsecs. (c) and (e); May Sp. Sess. P.A. 04-2 amended Subsec. (b) to allow revenue bonds under section to be payable from revenues from other authority loans and education loans and other funds or assets of the authority and amended Subsec. (d) to authorize the pledging of funds, moneys receivable and other assets of the authority to secure bonds under section, effective May 12, 2004, and applicable to any pledge, lien or security interest of this state or any political subdivision of this state in existence on October 1, 2003, or created after that date; P.A. 07-108 made a technical change in Subsec. (a), added new Subsec. (e) to allow authority to enter into arrangements to manage interest rate and cash flow fluctuations in connection with issuing, carrying, or securing its bonds or notes and redesignated existing Subsecs. (e) and (f) as Subsecs. (f) and (g), effective July 1, 2007.