House Bill No. 6507
               House Bill No. 6507

               PUBLIC ACT NO. 97-35


AN ACT CONCERNING BANK INVESTMENTS.


    Be  it  enacted  by  the  Senate  and House of
Representatives in General Assembly convened:
    Section  1.  Subsection (a) of section 36a-275
of  the  general  statutes  is  repealed  and  the
following is substituted in lieu thereof:
    (a)  As  used  in this section, the term "debt
securities" means (1)  any  marketable  obligation
evidencing  indebtedness of any person in the form
of direct, assumed or guaranteed bonds,  notes  or
debentures    commonly    known    as   investment
securities; [or] (2) any obligation identified  by
certificates   of   participation  in  investments
described in subdivision (1) of subsection (a)  of
this  section  in  which  a Connecticut bank could
invest directly; OR (3) REPURCHASE AGREEMENTS  and
the  term  "debt  mutual fund" means a partnership
interest  in,  shares  of  stock  of,   units   of
beneficial interest in or other ownership interest
in any one investment company registered under the
Investment  Company  Act  of 1940, as from time to
time amended, commonly described as mutual  funds,
money  market funds, investment trusts or business
trusts, provided the portfolios of such investment
companies  consist solely of investments described
in subdivision  (1)  of  subsection  (a)  of  this
section.
    Sec.   2.   Section  36a-277  of  the  general
statutes  is  repealed  and   the   following   is
substituted in lieu thereof:
    In  addition  to  other investments authorized
by sections 36a-275, AS AMENDED BY  SECTION  1  OF
THIS  ACT,  and  36a-276, this section and section
36a-280, any Connecticut bank may purchase or hold
for  its  own  account  the  following securities,
without regard  to  any  other  liability  to  the
Connecticut  bank of the obligor, maker, guarantor
or issuer of such securities, provided  the  total
amount of the securities of any one maker, obligor
or issuer held by a  Connecticut  bank  or  for  a
Connecticut  bank's account may not exceed, at any
time, ten per  cent  of  its  equity  capital  and
reserves for loan and lease losses:
    (1)  Shares  of  stock  and debt securities of
companies licensed as "small  business  investment
companies",   under  the  federal  Small  Business
Investment Act of 1958,  15  USC  Section  661  et
seq.,  as  from  time  to  time amended, and which
qualify  as  companies   financing   disadvantaged
persons  under 15 USC Section 681(d), as from time
to time amended;
    (2)  Shares  of  stock  and debt securities of
companies licensed as "small  business  investment
companies",   under  the  federal  Small  Business
Investment Act of 1958,  15  USC  Section  661  et
seq., as from time to time amended;
    (3)  Debt  securities  issued  by corporations
certified by the commissioner to be organized  and
operated  solely  for  the  purpose  of  providing
assistance which will  contribute  to  the  public
welfare   by   facilitating  the  acquisition  and
maintenance of ownership of homes  by  individuals
whose  ability  to own their own homes is hampered
because of social or economic disadvantages, which
debt  securities are backed by mortgage loans made
by the issuing corporations;
    (4)   Shares  of  stock  and  debt  securities
issued by the  National  Corporation  for  Housing
Partnerships  or  by any other corporation created
pursuant to Title IX  of  the  Housing  and  Urban
Development   Act  of  1968;  limited  partnership
interests in The National Housing  Partnership  or
in  any  other limited partnership formed pursuant
to  Section  907(a)   of   that   act;   and   any
partnership, limited partnership, or joint venture
formed pursuant to Section 907(c) of that act;
    (5)  Shares  of  stock  and debt securities of
corporations, and equity  interests  in  and  debt
securities    of,    partnerships    and   limited
partnerships,  engaged  solely  in  acquiring  and
rehabilitating housing;
    (6)  Debt securities or equity securities of a
corporation, all the equity  securities  of  which
corporation  are  to  be  owned  by  one  or  more
Connecticut  banks  and   which   corporation   is
organized   and   operated   for  the  purpose  of
developing,  and  stimulating  and  assisting  the
development  of, by any means and in any capacity,
by itself or jointly with others, low and moderate
income housing in this state;
    [(7)   Shares   of   stock   of   corporations
qualified under the laws of the United  States  as
"small business investment companies";]
    [(8)]    (7)   Debt   securities   or   equity
securities  of  closed-end  investment   companies
which   provide   capital   to  racial  or  ethnic
minority-owned businesses and institutions;
    [(9)]    (8)   Debt   securities   or   equity
securities of development corporations or  similar
organizations  organized  to  promote the business
prosperity and economic welfare of this state  and
to  encourage  the location and development of new
business, industry and commerce at least  in  part
within the municipality where the main office or a
branch of such bank is located; and
    [(10)]   (9)   Debt   securities   or   equity
securities that are  social  purpose  investments,
provided  before  making  any such investment, the
bank  shall  obtain  the  certification   of   the
commissioner  that  the  investment  is  a  social
purpose investment. For purposes of this  section,
a  "social purpose investment" means an investment
which  contributes  to  the  public   welfare   by
facilitating   the   provision  of  a  service  or
facility needed by residents of the area in  which
an  office  of  the  bank making the investment is
located.

Approved May 6, 1997