Substitute Senate Bill No. 578
Public Act No. 00-178
An Act Concerning Smart Buildings, Internet Business Districts And The High-Technology Infrastructure Fund.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. Subsection (a) of section 32-16 of the general statutes is repealed and the following is substituted in lieu thereof:
(a) The authority may (1) upon application of the proposed mortgagee, insure and make advance commitments to insure all or a portion of mortgage payments required by a mortgage on any (A) economic development project, exclusive of machinery, equipment, furniture, fixtures and other personal property, or (B) any information technology project and (2) upon application of a borrower, insure and make advance commitments to insure, all or a portion of loan payments required for an information technology project or a loan for an economic development project used for manufacturing, industrial, research, retail, small business, product development, product warehousing, distribution or other purposes which will create or retain jobs, maintain or diversify industry, including new or emerging technologies, or maintain or increase the tax base or a secured or unsecured working capital loan necessary for the start-up or continuation of such a project, upon such terms and conditions as the authority may prescribe, provided the aggregate amount of contracts of insurance or advance commitments issued under this section, together with contracts of insurance or advance commitments insured under subsection (b) or (d) of this section, outstanding at any one time shall not exceed four times the sum of the amounts available in the Mortgage and Loan Insurance Fund plus the amount of any unpaid grants authorized to be made by the Department of Economic and Community Development to the authority for deposit in such fund which remain available for purposes of the fund pursuant to the bond authorization in section 32-22, provided the amount of any such contract of insurance or advance commitment shall be measured by the portion of unpaid principal which is insured by the authority and shall exclude for purposes of such limitation the amount of any contract of insurance or advance commitment to the extent that the liability of the authority with respect thereto has been reinsured by, or participated in by, an eligible financial institution with a long-term credit rating equal to or higher than that of the state. The aggregate amount of principal obligations of all mortgages and loans so insured shall not constitute indebtedness of the state of Connecticut for purposes of computing the debt limit under section 3-21, provided bonds authorized to be issued pursuant to section 32-22 shall constitute indebtedness of the state of Connecticut for such purposes, whether or not obligations of the state of Connecticut are issued and outstanding in anticipation of the sale of such bonds. Any contract of insurance executed by the authority under this section shall be conclusive evidence of eligibility for such mortgage or loan insurance, and the validity of any contract of insurance so executed or of an advance commitment to insure shall be incontestable in the hands of an approved mortgagee or lender from the date of the execution of such contract of insurance or advance commitment, except for (A) fraud or misrepresentation on the part of such approved mortgagee or lender or (B) noncompliance with the terms of the contract of insurance or advance commitment and authority written procedures in force at the time of issuance of the contract or the advance commitment. To be eligible for insurance under the provisions of this chapter, a mortgage or agreement for the extension of credit or making of a loan by the authority or other lender shall: (i) Be one which is made to and held by the authority or an eligible financial institution approved by the authority as responsible and able to service the mortgage or loan properly; (ii) in the case of a mortgage under subdivision (1) of subsection (a) of this section, involve principal not to exceed twenty-five million dollars for any one economic development project exclusive of machinery, equipment, furniture, fixtures and other personal property, and not to exceed ninety per cent of the cost of such project, except that the authority may insure a portion of a mortgage or agreement for the extension of credit or making of a loan by the authority that otherwise satisfies the requirements of this section and the requirements prescribed by the authority by written procedure if such mortgage or agreement involves principal in excess of twenty-five million dollars, provided any approved contract of insurance shall not exceed twenty-five million dollars and in the case of a loan under subdivision (2) of subsection (a) of this section, involve principal not to exceed ten million dollars; (iii) have a maturity satisfactory to the authority but in no case later than twenty-five years from the date of the issuance of the insurance; (iv) contain amortization provisions satisfactory to the authority requiring payments by the borrower or mortgagor, not in excess of his reasonable ability to pay as determined by the authority; (v) be in such form and contain such terms and provisions with respect to property insurance, repairs, alterations, payment of taxes and assessments, default reserves, delinquency charges, default remedies, anticipation of maturity, additional and secondary liens and other matters as the authority may prescribe.
Sec. 2. Section 32-23c of the general statutes is repealed and the following is substituted in lieu thereof:
It is hereby found and declared that there is a continuing need in the state for: (1) Economic development and activity to provide and maintain employment and tax revenues, promote the export of products and services beyond state boundaries, encourage innovation in products and services, and support or broaden the economic base of the state, the control, abatement and prevention of pollution to protect the public health and safety, and the development and use of indigenous and renewable energy resources to assist industrial and commercial businesses in meeting their energy requirements; (2) the development of recreation facilities to promote tourism, to provide and maintain employment and tax revenues and to promote the public welfare; (3) the development of commercial and retail sales and services facilities in urban areas to provide and maintain construction, permanent employment and tax revenues, to improve conditions of deteriorated physical development, slow economic growth and eroded financial health of the public and private sectors in urban areas and to revitalize the economy of urban areas; (4) assistance to public service businesses providing transportation and utility services in the state; (5) development of the commercial fishing industry to provide and maintain employment and tax revenues; [and] (6) the development of high-technology businesses and business incubators that assist high-technology businesses; (7) assistance to consortia consisting of businesses creating partnerships with higher education facilities; and (8) assistance to nonprofit and governmental entities in financing facilities providing health, educational, charitable, community, cultural, agricultural, consumer or other services benefiting the citizens of the state; that the availability of financial assistance and suitable facilities are important inducements to industrial, commercial and nonprofit enterprises to remain or locate in this state and to provide economic development projects, recreation projects, urban projects, public service projects, commercial fishing projects, health care projects and nonprofit projects; that there are significant barriers inhibiting access by the authority and eligible financial institutions to the public capital markets and expansion of the secondary loan market to assist in financing economic development and other projects in the state; that the exercise by the authority of the powers in this chapter will promote economic development by increasing access to the public capital markets for the authority and eligible financial institutions; and that therefore the necessity in the public interest and for the public benefit and good for the provisions of this chapter is hereby declared as a matter of legislative determination. It is further found and declared that there is a necessity in the state of creating a Department of Economic and Community Development to coordinate and be responsible for matters affecting the growth of business and industry in the state and the maintenance and development of industry in the state as well as the promotion of tourism in the state and for the establishment and creation of an authority to assist the department and the state to carry out the needs and policies of the state as set forth in this section. It is further found and declared that existing, pending and proposed federal legislation has limited and restricted and may further limit and restrict the power of the authority to issue obligations the interest on which is exempt from federal income taxation; that the ability of the authority to issue obligations to provide financing for projects is essential to the maintenance and expansion of employment and the tax base in the state and to the economic development and health, education and general welfare of the state; and that the issuance of obligations the interest on which may be includable in the holder's gross income for the purposes of federal income taxation serves a needed public purpose; and therefore the necessity in the public interest and for the public benefit and good for the provisions of this chapter is hereby declared as a matter of legislative determination.
Sec. 3. Subsection (d) of section 32-23d of the general statutes is repealed and the following is substituted in lieu thereof:
(d) "Project" means any facility, plant, works, system, building, structure, utility, fixture or other real property improvement located in the state, any machinery, equipment, furniture, fixture or other personal property to be located in the state and the land on which it is located or which is reasonably necessary in connection therewith, which is of a nature or which is to be used or occupied by any person for purposes which would constitute it as an economic development project, information technology project, public service project, urban project, recreation project, commercial fishing project, health care project, the convention center project, as defined in subdivision (3) of section 32-600, or nonprofit project, and any real property improvement reasonably related thereto. A project may be acquired (1) directly or (2) indirectly through the purchase of all or substantially all of the stock of a corporation. A project shall not include new materials, work in process, stock in trade or stock of a corporation.
Sec. 4. Section 32-23d of the general statutes is amended by adding subsections (ee) to (gg), inclusive, as follows:
(NEW) (ee) "Information technology project" means any project (1) providing information technology intensive office or laboratory space, including, but not limited to, smart buildings, incubator facilities, or any project that is to be used or occupied by any person specializing in e-commerce technologies or other technologies using high-speed communications infrastructure, and (2) which the authority deems will materially contribute to the economic base of the state by creating or retaining jobs, promoting the export of products or services beyond state borders, encouraging innovation in products or services, or otherwise contributing to, supporting or enhancing existing activities that are important to the economic base of the state.
(NEW) (ff) "Incubator facilities" has the same meaning as incubator facilities in subdivision (5) of section 32-34.
(NEW) (gg) "Smart building" means a building that houses, for use by its tenants, an information or communications infrastructure capable of transmitting digital video, voice, and data content over a high-speed wired, wireless, or other communications intranet and provides the capability of delivering and receiving high-speed digital video, voice and data transmissions over the Internet.
Sec. 5. Section 32-23e of the general statutes is repealed and the following is substituted in lieu thereof:
To accomplish the purposes of this chapter, chapter 578 and subsection (a) of section 10-321, which are hereby determined to be public purposes for which public funds may be expended, and in addition to any other powers provided by law, the authority shall have power to: (1) Determine the location and character of any project to be financed under the provisions of said chapters and sections, provided any financial assistance shall be approved in accordance with written procedures prepared pursuant to subdivision (14) of this section; (2) purchase, receive, by gift or otherwise, lease, exchange, or otherwise acquire, and construct, reconstruct, improve, maintain, equip and furnish one or more projects, including all real and personal property which the authority may deem necessary in connection therewith, and to enter into a contract with a person therefor upon such terms and conditions as the authority shall determine to be reasonable, including but not limited to reimbursement for the planning, designing, financing, construction, reconstruction, improvement, equipping, furnishing, operation and maintenance of the project and any claims arising therefrom and establishment and maintenance of reserve and insurance funds with respect to the financing of the project; (3) insure any or all payments to be made by the borrower under the terms of any agreement for the extension of credit or making of a loan by the authority in connection with any economic development project to be financed, wholly or in part, through the issuance of bonds or mortgage payments of any mortgage which is given by a mortgagor to the mortgagee who has provided the mortgage for an economic development project upon such terms and conditions as the authority may prescribe and as provided herein, and the faith and credit of the state are pledged thereto; (4) in connection with the insuring of payments of any mortgage, request for its guidance a finding of the municipal planning commission, or, if there is no planning commission, a finding of the municipal officers, of the municipality in which the economic development project is proposed to be located, or of the regional planning agency of which such municipality is a member, as to the expediency and advisability of the economic development project; (5) sell or lease to any person, all or any portion of a project, purchase from eligible financial institutions mortgages with respect to economic development projects and sell, pledge or assign to any person any such mortgage, or other loans, notes, revenues or assets of the authority, or any interest therein, for such consideration and upon such terms as the authority may determine to be reasonable; (6) mortgage or otherwise encumber all or any portion of a project whenever it shall find such action to be in furtherance of the purposes of said chapters and sections; (7) enter into agreements with any person, including prospective mortgagees and mortgagors, for the purpose of planning, designing, constructing, acquiring, altering and financing projects, providing liquidity or a secondary market for mortgages or other financial obligations incurred with respect to facilities which would qualify as a project under this chapter, purchasing loans made by regional corporations under section 32-276, or for any other purpose in furtherance of any other power of the authority; (8) grant options to purchase or renew a lease for any of its projects on such terms as the authority may determine to be reasonable; (9) employ or retain attorneys, accountants and architectural, engineering and financial consultants and such other employees and agents and to fix their compensation and to employ the Connecticut Development Credit Corporation on a cost basis as it shall deem necessary to assist it in carrying out the purposes of said chapters and sections; (10) borrow money or accept gifts, grants or loans of funds, property or service from any source, public or private, and comply, subject to the provisions of said chapters and sections, with the terms and conditions thereof; (11) accept from a federal agency loans or grants for use in carrying out its purpose, and enter into agreements with such agency respecting any such loans or grants; (12) provide tenant lease guarantees and performance guarantees and extend credit or make loans to any person for the planning, designing, financing, acquiring, constructing, reconstructing, improving, equipping and furnishing of a project and for the refinancing of existing indebtedness with respect to any facility or part thereof which would qualify as a project in order to facilitate substantial improvements thereto, which guarantees, credits or loans may be secured by loan agreements, lease agreements, instalment sale agreements, mortgages, contracts and all other instruments or fees and charges, upon such terms and conditions as the authority shall determine to be reasonable in connection with such loans, including provision for the establishment and maintenance of reserve and insurance funds and in the exercise of powers granted in this section in connection with a project for such person, to require the inclusion in any contract, loan agreement or other instrument, such provisions for the construction, use, operation and maintenance and financing of a project as the authority may deem necessary or desirable; (13) in connection with any application for assistance under said chapters and sections, or commitments therefor, to make and collect such fees and charges as the authority shall determine to be reasonable; (14) adopt procedures, in accordance with the provisions of section 1-121, to carry out the provisions of said chapters and sections, which may give priority to applications for financial assistance based upon the extent the project will materially contribute to the economic base of the state by creating or retaining jobs, providing increased wages or benefits to employees, promoting the export of products or services beyond the boundaries of the state, encouraging innovation in products or services, encouraging defense-dependent business to diversify to nondefense production, promoting standards of participation adopted by the Connecticut partnership compact pursuant to section 33-374g of the general statutes, revision of 1958, revised to 1991, or will otherwise enhance existing activities that are important to the economic base of the state, provided regulation-making proceedings commenced before January 1, 1989, shall be governed by sections 4-166 to 4-174, inclusive; (15) adopt an official seal and alter the same at pleasure; (16) maintain an office at such place or places within the state as it may designate; (17) sue and be sued in its own name and plead and be impleaded, service of process in any action to be made by service upon the executive director of said authority either in hand or by leaving a copy of the process at the office of the authority with some person having charge thereof; (18) employ such assistants, agents and other employees as may be necessary or desirable for its purposes, which employees shall be exempt from the classified service and shall not be employees as defined in subsection (b) of section 5-270; establish all necessary or appropriate personnel practices and policies, including those relating to hiring, promotion, compensation, retirement and collective bargaining, which need not be in accordance with chapter 68 and the authority shall not be an employer as defined in subsection (a) of section 5-270; contract for and engage appraisers of industrial machinery and equipment, consultants and property management services, and utilize the services of other governmental agencies; (19) when it becomes necessary or feasible for the authority to safeguard itself from losses, acquire, purchase, manage and operate, hold and dispose of real and personal property, take assignments of rentals and leases and make and enter into all contracts, leases, agreements and arrangements necessary or incidental to the performance of its duties; (20) in order to further the purposes of said chapters and sections, or to assure the payment of the principal and interest on bonds or notes of the authority or to safeguard the mortgage insurance fund, purchase, acquire and take assignments of notes, mortgages and other forms of security and evidences of indebtedness, purchase, acquire, attach, seize, accept or take title to any project by conveyance or, by foreclosure, and sell, lease or rent any project for a use specified in said chapters and sections or in said chapter 579; (21) adopt rules for the conduct of its business; (22) invest any funds not needed for immediate use or disbursement, including any funds held in reserve, in obligations issued or guaranteed by the United States of America or the state of Connecticut and in other obligations which are legal investments for savings banks in this state; (23) do, or delegate, any and all things necessary or convenient to carry out the purposes and to exercise the powers given and granted in said chapters and sections; provided, in all matters concerning the internal administrative functions of the authority which are funded by amounts appropriated by the state to the authority or to the department, the procedures of the state relating to office space, supplies, facilities, materials, equipment and professional services shall be followed, and provided further, that in the acquisition by the authority of real estate involving the use of appropriated funds or bonds supported by the full faith and credit of the state, the authority shall be subject to the provisions of section 4b-23; (24) to accept from the department: (A) Financial assistance, (B) revenues or the right to receive revenues with respect to any program under the supervision of the department, and (C) loan assets or equity interests in connection with any program under the supervision of the department; to make advances to and reimburse the department for any expenses incurred or to be incurred by it in the delivery of such assistance, revenues, rights, assets or amounts; to enter into agreements for the delivery of services by the authority, in consultation with the department, the Connecticut Housing Finance Authority and Connecticut Innovations, Incorporated, to third parties which agreements may include provisions for payment by the department to the authority for the delivery of such services; and to enter into agreements with the department or with the Connecticut Housing Finance Authority or Connecticut Innovations, Incorporated for the sharing of assistants, agents and other consultants, professionals and employees, and facilities and other real and personal property used in the conduct of the authority's affairs; and (25) to transfer to the department: (A) Financial assistance, (B) revenues or the right to receive revenues with respect to any program under the supervision of the authority, and (C) loan assets or equity interests in connection with any program under the supervision of the authority, provided the transfer of such financial assistance, revenues, rights, assets or interests is determined by the authority to be practicable, within the constraints and not inconsistent with the fiduciary obligations of the authority imposed upon or established upon the authority by any provision of the general statutes, the authority's bond resolutions or any other agreement or contract of the authority and to have no adverse effect on the tax-exempt status of any bonds of the authority or the state.
Sec. 6. Section 32-39 of the general statutes is amended by adding subsection (38) as follows:
(NEW) (38) To provide financial aid to persons developing smart buildings, as defined in section 32-23d, as amended by section 3 of this act, incubator facilities or other information technology intensive office and laboratory space.
Sec. 7. (NEW) As used in section 8 of this act, the following terms shall have the following meanings unless the context indicates another meaning and intent:
(1) "Authority" means the Connecticut Development Authority, created under section 32-11a of the general statutes, and any of its subsidiaries or affiliates;
(2) "Executive Director" means the executive director of the Connecticut Development Authority;
(3) "Financial assistance" means any and all forms of grants, loans, extensions of credit, guarantees, equity investments, grants or other forms of financing or refinancing to persons for the purchase, acquisition, leasing, construction, expansion, continued operation, reconstruction, financing, refinancing or placing in operation of an information technology project, including, but not limited to, fixed assets, working capital, equity participations and acquisitions, employee buyouts, refinancing, lease guarantees, financial restructuring and other purposes which the authority determines further the purposes of this section. For purposes of this section and section 8 of this act financial assistance shall not be considered financial assistance under the provisions of section 32-462 of the general statutes;
(4) "Information technology project" means an information technology project, as defined in section 32-23d of the general statutes, as amended by this act;
(5) "Person" means a person, as defined in subsection (s) of section 32-23d of the general statutes;
(6) "Return on investment" means any and all forms of principal or interest payments, guarantee fees, equity participations, options, warrants, debentures and any or all other forms of remuneration to the authority in return for any financial assistance provided or offered.
Sec. 8. (NEW) (a) There is created within the authority the High-Technology Infrastructure Fund. The state, acting through the authority, may provide financial assistance from such fund that enables the development of information technology projects. Such financial assistance may be provided directly or in participation with any other financial institutions, funds or other persons or other sources of financing, public or private and the authority may enter into any agreements or contracts it deems necessary or convenient in connection therewith. Payments of principal, interest or other forms of return on investment received by the authority shall be deposited in or held on behalf of said fund.
(b) The authority may provide financial assistance in such amounts, in such form and under such terms and conditions as the authority shall prescribe, in written procedures adopted in accordance with section 1-121 of the general statutes. Such procedures shall provide, in the case of financial assistance in a form other than a grant, for returns on investment as the authority deems appropriate to reflect the nature of the risk, provided a single project shall not receive an amount in excess of fifteen million dollars and shall not be for a term longer than thirty years.
(c) The authority may take all reasonable steps and exercise all reasonable remedies necessary or desirable to protect the obligations or interests of the authority, including, but not limited to, the purchase or redemption of in foreclosure proceedings, bankruptcy proceedings or in other judicial proceedings of any property on which it holds a mortgage or other lien or in which it has an interest, and for such purposes and any other purposes provided in this section payment may be made from the High-Technology Infrastructure Fund upon certification by the executive director that payment is authorized under the provisions of this section, or other sections of the general statutes, applicable procedures or other programs of the authority.
(d) Applicants for financial assistance shall pay the costs the authority deems reasonable and necessary incurred in processing applications made under this section, including application and commitment fees, closing costs or other costs. In carrying out the provisions of this section, any administrative expenses incurred by the authority, to the extent not paid by the borrower or from moneys appropriated to the authority for such purposes, may be paid from the High-Technology Infrastructure Fund.
Approved June 1, 2000