Connecticut Seal

General Assembly

 

Raised Bill No. 413

February Session, 2012

 

LCO No. 2105

 

*02105_______FIN*

Referred to Committee on Finance, Revenue and Bonding

 

Introduced by:

 

(FIN)

 

AN ACT CONCERNING BONDING AUTHORITY FOR THE CONNECTICUT CLEAN ENERGY AUTHORITY.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. (NEW) (Effective July 1, 2012) (a) The Connecticut Clean Energy Authority is authorized from time to time to issue its negotiable bonds for any corporate purpose. In anticipation of the sale of such bonds, the authority may issue negotiable bond anticipation notes and may renew the same from time to time. Such notes shall be paid from any revenues of the authority or other moneys available for such purposes and not otherwise pledged, or from the proceeds of sale of the bonds of the authority in anticipation of which they were issued. The notes shall be issued in the same manner as the 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) Every issue of the bonds, notes or other obligations issued by the authority shall be special obligations of the authority payable from any revenues or moneys of the authority available for such purposes and not otherwise pledged, subject to any agreements with the holders of particular bonds, notes or other obligations pledging any particular revenues or moneys, and subject to any agreements with any individual, partnership, corporation or association or other body, public or private. Notwithstanding that such bonds, notes or other obligations may be payable from a special fund, they shall be deemed to be for all purposes negotiable instruments, subject only to the provisions of such bonds, notes or other obligations for registration.

(c) The bonds may be issued as serial bonds or as term bonds, or the authority, in its discretion, may issue bonds of both types. The bonds 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 thirty years from their respective dates, bear interest at such rate or rates, be payable at such time or times, be in such denominations, be in such form, either coupon or registered, carry such registration privileges, be executed in such manner, be payable in lawful money of the United States of America at such place or places, and be subject to such terms of redemption, as such resolution or resolutions may provide. The bonds or notes may be sold at public or private sale for such price or prices as the authority shall determine. The power to fix the date of sale of bonds, to receive bids or proposals, to award and sell bonds, and to take all other necessary action to sell and deliver bonds may be delegated to the chairperson or vice-chairperson of the board, a subcommittee of the board or other officers of the authority by resolution of the board. The exercise of such delegated powers may be made subject to the approval of a majority of the members of the board which approval may be given in the manner provided in the bylaws of the authority. 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 bonds or any issue of bonds may contain provisions, which shall be a part of the contract with the holders of the bonds to be authorized, as to: (1) Pledging the full faith and credit of the authority, the full faith and credit of any individual, partnership, corporation or association or other body, public or private, all or any part of the revenues of a project or any revenue-producing contract or contracts made by the authority with any individual, partnership, corporation or association or other body, public or private, any federally guaranteed security and moneys received therefrom purchased with bond proceeds or any other property, revenues, funds or legally available moneys to secure the payment of the bonds or of any particular issue of bonds, subject to such agreements with bondholders as may then exist; (2) the rentals, fees and other charges to be charged, and the amounts to be raised in each year thereby, and the use and disposition of the revenues; (3) the setting aside of reserves or sinking funds, and the regulation and disposition thereof; (4) limitations on the right of the authority or its agent to restrict and regulate the use of the project; (5) the purpose and limitations to which the proceeds of sale of any issue of bonds 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 to the issuance and obtaining of any federally insured mortgage note, and pledging such proceeds to secure the payment of the bonds or any issue of the bonds; (6) limitations on the issuance of additional bonds, the terms upon which additional bonds may be issued and secured and the refunding of outstanding bonds; (7) the procedure, if any, by which the terms of any contract with bondholders may be amended or abrogated, the amount of bonds the holders of which must consent thereto, and the manner in which such consent may be given; (8) limitations on the amount of moneys derived from the project to be expended for operating, administrative or other expenses of the authority; (9) 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 a default; and (10) the mortgaging of a project and the site thereof for the purpose of securing the bondholders.

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

(f) The authority shall have power out of any funds available for such purposes to purchase its bonds, notes or other obligations. The authority may hold, pledge, cancel or resell such bonds, notes or other obligations, subject to and in accordance with agreements with bondholders. The authority may sell, transfer or assign any of its loan assets to a trustee or other third party for the purposes of providing security for its bonds, notes or other obligations, or for bonds, notes or other obligations issued by the trustee or other third party on its behalf.

(g) The authority is further authorized and empowered to issue bonds, notes or other obligations under this section, the interest on which may be includable in the gross income of the holder or holders thereof under the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, to the same extent and in the same manner that interest on bills, notes, bonds or other obligations of the United States is includable in the gross income of the holder or holders thereof under any such internal revenue code. Any such bonds, notes or other obligations may be issued only upon a finding by the authority that such issuance is necessary, is in the public interest, and is in furtherance of the purposes and powers of the authority. The state hereby consents to such inclusion only for the bonds, notes or other obligations of the authority so issued.

(h) In the discretion of the authority, any bonds issued under the provisions of this section may be secured by a trust agreement by and between the authority and a corporate trustee or trustees, which may be any trust company or bank having the powers of a trust company within or without the state. Such trust agreement or the resolution providing for the issuance of such bonds or other instrument of the authority may secure such bonds by a pledge or assignment of any revenues to be received, any contract or proceeds of any contract, or any other property, revenues, moneys or funds available to the authority for such purpose. Any pledge made by the authority pursuant to this subsection shall be valid and binding from the time when the pledge is made. The lien of any such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the authority, irrespective of whether the parties have notice of the claims. Notwithstanding any provision of the Uniform Commercial Code, no instrument by which such pledge is created need be recorded or filed. Any revenues or other receipts, funds, moneys, income, contracts or property so pledged and thereafter received by the authority shall be subject immediately to the lien of the pledge without any physical delivery thereof or further act, and such lien shall have priority over all other liens. Such trust agreement or resolution may mortgage, assign or convey any real property to secure such bonds. Such trust agreement or resolution providing for the issuance of such bonds may contain such provisions for protecting and enforcing the rights and remedies of the bondholders as may be reasonable and proper and not in violation of law, including particularly such provisions as have been specifically authorized by this section to be included in any resolution or resolutions of the authority authorizing bonds thereof. Any bank or trust company incorporated under the laws of this state, which may act as depositary of the proceeds of bonds or of revenues or other moneys, may furnish such indemnifying bonds or pledge such securities as may be required by the authority. Any such trust agreement or resolution may set forth the rights and remedies of the bondholders and of the trustee or trustees, and may restrict the individual right of action by bondholders. In addition to the foregoing, any such trust agreement or resolution may contain such other provisions as the authority may deem reasonable and proper for the security of the bondholders. All expenses incurred in carrying out the provisions of such trust agreement or resolution may be treated as a part of the cost of the operation of a project.

(i) Bonds issued under the provisions of this section shall not be deemed to constitute a debt or liability of the state or of any political subdivision thereof other than the authority, or a pledge of the full faith and credit of the state or of any such political subdivision other than the authority, but shall be payable solely from the funds provided for such purposes by this section. All such bonds shall contain on the face thereof a statement to the effect that neither the state of Connecticut nor any political subdivision thereof, other than the authority, shall be obligated to pay the same or the interest thereon except from revenues of the project or the portion thereof for which such bonds are issued, and that neither the full faith and credit nor the taxing power of the state of Connecticut or of any political subdivision thereof, other than the authority, is pledged to the payment of the principal of or the interest on such bonds. The issuance of bonds under the provisions of this section shall not directly or indirectly or contingently obligate the state or any political subdivision thereof to levy or to pledge any form of taxation or to make any appropriation for their payment. Nothing contained in this section shall prevent or be construed to prevent the authority from pledging its full faith and credit or the full faith and credit of any individual, partnership, corporation or association or other body, public or private, to the payment of bonds or issue of bonds authorized pursuant to this section.

(j) The state of Connecticut does hereby pledge to and agree with the holders of any bonds and notes issued under this section and with those parties who may enter into contracts with the authority or its successor agency pursuant to the provisions of this section that the state shall not limit or alter the rights hereby vested in the authority until such obligations, together with the interest thereon, are fully met and discharged and such contracts are fully performed on the part of the authority, provided nothing contained in this subsection shall preclude such limitation or alteration if and when adequate provision shall be made by law for the protection of the holders of such bonds and notes of the authority or those entering into such contracts with the authority. The authority is authorized to include this pledge and undertaking for the state in such bonds and notes or contracts.

(k) (1) The authority is authorized to fix, revise, charge and collect rates, rents, fees and charges for the use of and for the services furnished or to be furnished by each project, and to contract with any person, partnership, association or corporation, or other body, public or private, in respect thereof. Such rates, rents, fees and charges shall be fixed and adjusted in respect of the aggregate of rates, rents, fees and charges from such project so as to provide funds sufficient with other revenues or moneys available for such purposes, if any, (A) to pay the cost of maintaining, repairing and operating the project and each and every portion thereof, to the extent that the payment of such cost has not otherwise been adequately provided for, (B) to pay the principal of and the interest on outstanding bonds of the authority issued in respect of such project as the same shall become due and payable, and (C) to create and maintain reserves required or provided for in any resolution authorizing, or trust agreement securing, such bonds of the authority. Such rates, rents, fees and charges shall not be subject to supervision or regulation by any department, commission, board, body, bureau or agency of this state other than the authority.

(2) A sufficient amount of the revenues derived in respect of a project, except such part of such revenues as may be necessary to pay the cost of maintenance, repair and operation and to provide reserves and for renewals, replacements, extensions, enlargements and improvements as may be provided for in the resolution authorizing the issuance of any bonds of the authority or in the trust agreement securing the same, shall be set aside at such regular intervals as may be provided in such resolution or trust agreement in a sinking or other similar fund which is hereby pledged to, and charged with, the payment of the principal of and the interest on such bonds as the same shall become due, and the redemption price or the purchase price of bonds retired by call or purchase as therein provided. Such pledge shall be valid and binding from the time when the pledge is made. The rates, rents, fees and charges and other revenues or other moneys so pledged and thereafter received 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 as against all parties having claims of any kind in tort, contract or otherwise against the authority, irrespective of whether such parties have notice thereof. Notwithstanding any provision of the Connecticut Uniform Commercial Code, neither the resolution nor any trust agreement nor any other agreement nor any lease by which a pledge is created need be filed or recorded except in the records of the authority. The use and disposition of moneys to the credit of such sinking or other similar fund shall be subject to the provisions of the resolution authorizing the issuance of such bonds or of such trust agreement. Except as may otherwise be provided in such resolution or such trust agreement, such sinking or other similar fund may be a fund for all such bonds issued to finance projects for any person, partnership, association or corporation, or other body, public or private, without distinction or priority of one over another; provided the authority in any such resolution or trust agreement may provide that such sinking or other similar fund shall be the fund for a particular project for any person, partnership, association or corporation, or other body, public or private, and for the bonds issued to finance a particular project and may, additionally, permit and provide for the issuance of bonds having a subordinate lien in respect of the security authorized by this subsection to other bonds of the authority, and, in such case, the authority may create separate sinking or other similar funds in respect of such subordinate lien bonds.

(l) All moneys received pursuant to the authority of this section, whether as proceeds from the sale of bonds or as revenues, shall be deemed to be trust funds to be held and applied solely as provided in this section. Any officer with whom, or any bank or trust company with which, such moneys may be deposited shall act as trustee of such moneys and shall hold and apply the same for the purposes of this section, subject to the resolution authorizing the bonds of any issue or the trust agreement securing such bonds.

(m) Any holder of bonds, bond anticipation notes, other notes or other obligations issued under the provisions of this section, or any of the coupons appertaining thereto, and the trustee or trustees under any trust agreement, except to the extent the rights given by this section may be restricted by any resolution authorizing the issuance of, or any such trust agreement securing, such bonds, may, either at law or in equity, by suit, action, mandamus or other proceedings, protect and enforce any and all rights under the laws of the state or granted by this section or under such resolution or trust agreement, and may enforce and compel the performance of all duties required by this section or by such resolution or trust agreement to be performed by the authority or by any officer, employee or agent thereof, including the fixing, charging and collecting of the rates, rents, fees and charges authorized by this section and required by the provisions of such resolution or trust agreement to be fixed, established and collected.

(n) The authority shall have power to contract with the holders of any of its bonds or notes as to the custody, collection, securing, investment and payment of any reserve funds of the authority, or of any moneys held in trust or otherwise for the payment of bonds or notes, and to carry out such contracts. Any officer with whom, or any bank or trust company with which, such moneys shall be deposited as trustee thereof shall hold, invest, reinvest and apply such moneys for the purposes thereof, subject to such provisions as this section and the resolution authorizing the issue of the bonds or notes or the trust agreement securing such bonds or notes may provide.

(o) The exercise of the powers granted by this section shall be in all respects for the benefit of the people of this state, for the increase of their commerce, welfare and prosperity, and for the improvement of their health and living conditions, and, as the exercise of such powers shall constitute the performance of an essential public function, neither the authority, any affiliate of the authority or any collection or other agent of the authority or any such affiliate shall be required to pay any taxes or assessments upon or in respect of any revenues or property received, acquired, transferred or used by the authority, any affiliate of the authority or any collection or other agent of the authority or any such affiliate or upon or in respect of the income from such revenues or property, and any bonds or notes issued under the provisions of this section, their transfer and the income therefrom, including any profit made on the sale of such bonds or notes, shall at all times be free from taxation of every kind by the state and by the municipalities and other political subdivisions in the state, except for estate and succession taxes. The interest on such bonds or notes shall be included in the computation of any excise or franchise tax.

(p) (1) The authority is hereby authorized to provide for the issuance of bonds of the authority for the purpose of refunding any bonds of the authority then outstanding, including the payment of any redemption premium thereon and any interest accrued or to accrue to the earliest or subsequent date of redemption, purchase or maturity of such bonds, and, if deemed advisable by the authority, for the additional purpose of paying all or any part of the cost of constructing and acquiring additions, improvements, extensions or enlargements of a project or any portion thereof.

(2) The proceeds of any such bonds issued for the purpose of refunding outstanding bonds may, in the discretion of the authority, be applied to the purchase or retirement at maturity or redemption of such outstanding bonds either on their earliest or any subsequent redemption date or upon the purchase or at the maturity thereof and may, pending such application, be placed in escrow to be applied to such purchase or retirement at maturity or redemption on such date as may be determined by the authority.

(3) Any such escrowed proceeds, pending such use, may be invested and reinvested in direct obligations of, or obligations unconditionally guaranteed by, the United States of America and certificates of deposit or time deposits secured by direct obligations of, or obligations unconditionally guaranteed by, the United States of America, or obligations of a state, a territory, or a possession of the United States of America, or any political subdivision of any of the foregoing, within the meaning of Section 103(a) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, the full and timely payment of the principal of and interest on which are secured by an irrevocable deposit of direct obligations of the United States of America which, if the outstanding bonds are then rated by a nationally recognized rating agency, are rated in the highest rating category by such rating agency, maturing at such time or times as shall be appropriate to assure the prompt payment, as to principal, interest and redemption premium, if any, of the outstanding bonds to be so refunded. The interest, income and profits, if any, earned or realized on any such investment may also be applied to the payment of the outstanding bonds to be so refunded. After the terms of the escrow have been fully satisfied and carried out, any balance of such proceeds and interest, income and profits, if any, earned or realized on the investments thereof may be returned to the authority for use by it in any lawful manner.

(4) The portion of the proceeds of any such bonds issued for the additional purpose of paying all or any part of the cost of constructing and acquiring additions, improvements, extensions or enlargements of a project may be invested and reinvested as the provisions of this section and the resolution authorizing the issuance of such bonds or the trust agreement securing such bonds may provide. The interest, income and profits, if any, earned or realized on such investment may be applied to the payment of all or any part of such cost or may be used by the authority in any lawful manner.

(5) All such bonds shall be subject to the provisions of this section in the same manner and to the same extent as other bonds issued pursuant to this act.

(q) Bonds issued by the authority under the provisions of this section are hereby made securities in which all public officers and public bodies of the state and its political subdivisions, all insurance companies, state banks and trust companies, national banking associations, savings banks, savings and loan associations, investment companies, executors, administrators, trustees and other fiduciaries may properly and legally invest funds, including capital in their control or belonging to them. Such bonds are hereby made securities which may properly and legally be deposited with and received by any state or municipal officer or any agency or political subdivision of the state for any purpose for which the deposit of bonds or obligations of the state is now or may hereafter be authorized by law.

(r) In conjunction with the issuance of the bonds, notes or other obligations: (1) The authority may make representations and agreements for the benefit of the holders of the bonds, notes or other obligations to make secondary market disclosures; (2) the authority may enter into interest rate swap agreements and other agreements for the purpose of moderating interest rate risk on the bonds, notes or other obligations; (3) the authority may enter into such other agreements and instruments to secure the bonds, notes or other obligations; and (4) the authority may take such other actions as necessary or appropriate for the issuance and distribution of the bonds, notes or other obligations and may make representations and agreements for the benefit of the holders of the bonds, notes or other obligations which are necessary or appropriate to ensure exclusion of the interest payable on the bonds, notes or other obligations from gross income under the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended.

Sec. 2. (NEW) (Effective July 1, 2012) (a) The Connecticut Clean Energy Authority may issue clean energy bonds secured in whole or in part by the assets of, and assessment of charges and other receipts deposited into, the Clean Energy Fund established pursuant to section 16-245n of the general statutes. The clean energy bonds shall be nonrecourse to the credit or any assets of the state or the authority.

(b) Except as otherwise provided in this subsection, the state of Connecticut does hereby pledge and agree with the owners of the clean energy bonds that the state shall neither limit nor alter the assessment of charges pursuant to section (b) of section 16-245n of the general statutes, and all rights thereunder, until the clean energy bonds, together with the interest thereon, are fully met and discharged, provided nothing contained in this subsection shall preclude such limitation or alteration if and when adequate provision is made by law for the protection of the owners and holders of such bonds. The authority as agent for the state is authorized to include this pledge and undertaking for the state in the clean energy bonds.

(c) The clean energy bonds shall not be deemed to constitute a debt or liability of the state or of any political subdivision thereof, other than the authority, shall not constitute a pledge of the full faith and credit of the state or any of its political subdivisions, other than the authority, but shall be payable solely from the funds provided under section 16-245n of the general statutes, and 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 shall not be included in computing the aggregate indebtedness of the state in respect to and to the extent of any such limitation. This subsection shall in no way preclude bond guarantees or enhancements as provided in subsection (d) of section 16-245n of the general statutes. All clean energy bonds shall contain on the face thereof a statement to the following effect: "Neither the full faith and credit nor the taxing power of the State of Connecticut is pledged to the payment of the principal of, or interest on, this bond."

(d) The exercise of the powers granted by this section and section 16-245n of the general statutes shall be in all respects for the benefit of the people of this state, for the increase of their commerce, welfare and prosperity, and as the exercise of such powers shall constitute the performance of an essential public function, neither the authority, any affiliate of the authority, nor any collection or other agent of any of the foregoing shall be required to pay any taxes or assessments upon or in respect of any revenues or property received, acquired, transferred or used by the authority, any affiliate of the authority or any collection or other agent of any of the foregoing, or upon or in respect of the income from such revenues or property, and any bonds or notes issued under the provisions of this section, their transfer and the income therefrom, including any profit made on the sale of such bonds or notes, shall at all times be free from taxation of every kind by the state and by the municipalities and other political subdivisions in the state except for estate and succession taxes. The interest on such bonds and notes shall be included in the computation of any excise or franchise tax.

(e) The proceeds of any clean energy bonds shall be used for the purposes of the authority in accordance with section 16-245n of the general statutes.

Sec. 3. (NEW) (Effective July 1, 2012) (a) For purposes of this section, "required minimum capital reserve" means the maximum amount permitted to be deposited in a special capital reserve fund by the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time, to permit the interest on such bonds to be excluded from gross income for federal tax purposes and secured by such special capital reserve fund.

(b) In connection with the issuance of bonds or to refund bonds previously issued by the Connecticut Clean Energy Authority, or in connection with the issuance of bonds to effect a refinancing or other restructuring with respect to one or more projects, the authority 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 special capital reserve funds, (2) any proceeds of the sale of notes or bonds, to the extent provided in the resolution of the authority authorizing the issuance thereof, and (3) any other moneys which may be made available to the authority for the purpose of such special capital reserve funds from any other source or sources.

(c) The moneys held in or credited to any special capital reserve fund established under this section, except as hereinafter provided, shall be used for (1) the payment of the principal of and interest, when due, whether at maturity or by mandatory sinking fund installments, on bonds of the authority secured by such special capital reserve fund as such payments become due, or (2) the purchase of such bonds of the authority and the payment of any redemption premium required to be paid when such bonds are redeemed prior to maturity, including in any such case by way of reimbursement of a provider of bond insurance or of a credit or liquidity facility that has paid such redemption premiums. Notwithstanding the provisions of subdivisions (1) and (2) of this subsection, the authority shall have power to provide that moneys in any such special capital reserve fund shall not be withdrawn therefrom at any time in such amount as would reduce the amount of such moneys to less than the maximum amount of principal and interest becoming due by reasons of maturity or a required sinking fund installment in the then current or any succeeding calendar year on the bonds of the authority then outstanding, or less than the required minimum capital reserve, except for the purpose of paying such principal of, redemption premium and interest on such bonds of the authority secured by such special capital reserve becoming due and for the payment of which other moneys of the authority are not available. The authority may provide that it shall not issue bonds secured by a special capital reserve fund at any time if the required minimum capital reserve on the bonds outstanding and the bonds then to be issued and secured by the same special capital reserve fund at the time of issuance exceeds the moneys in the special capital reserve fund, unless the authority, at the time of the issuance of such bonds, deposits in such special capital reserve fund from the proceeds of the bonds so to be issued, or from other sources, an amount which, together with the amount then in such special capital reserve fund, will be not less than the required minimum capital reserve.

(d) On or before December first, annually, there is deemed to be appropriated from the General Fund such sums, if any, as shall be certified by the chairperson or vice-chairperson of the authority to the Secretary of the Office of Policy and Management and the State Treasurer, 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 authority. For the purpose of evaluation of any such special capital reserve fund, obligations acquired as an investment for any such special capital reserve fund shall be valued at market. Nothing contained in this section shall preclude the authority from establishing and creating other debt service reserve funds in connection with the issuance of bonds or notes of the authority which are not special capital reserve funds. Subject to any agreement or agreements with holders of outstanding notes and bonds of the authority, any amount or amounts allotted and paid to the authority pursuant to this subsection shall be repaid to the state from moneys of the authority at such time as such moneys are not required for any other of the authority's corporate purposes, and in any event shall be repaid to the state on the date one year after all bonds and notes of the authority theretofore issued on the date or dates such amount or amounts are allotted and paid to the authority or thereafter issued, together with interest on such bonds and notes, 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.

(e) No bonds secured by a special capital reserve fund shall be issued to pay project costs unless the authority is of the opinion and determines that the revenues from the project shall be sufficient to (1) pay the principal of and interest on the bonds issued to finance the project, (2) establish, increase and maintain any reserves deemed by the authority to be advisable to secure the payment of the principal of and interest on such bonds, (3) pay the cost of maintaining the project in good repair and keeping it properly insured, and (4) pay such other costs of the project as may be required.

(f) Notwithstanding the provisions of this section, no bonds secured by a special capital reserve fund shall be issued by the authority until and unless such issuance has been approved by the Secretary of the Office of Policy and Management or his or her deputy. Any such approval by the secretary pursuant to this subsection shall be in addition to (1) the otherwise required opinion of sufficiency by the authority set forth in subsection (e) of this section, and (2) the approval of the State Treasurer and the documentation by the authority otherwise required under subsection (a) of section 1-124 of the general statutes, as amended by this act. Such approval may provide for the waiver or modification of such other requirements of this section as the secretary determines to be necessary or appropriate in order to effectuate such issuance, subject to all applicable tax covenants of the authority and the state.

(g) Notwithstanding any other provision contained in this section, the aggregate amount of bonds secured by such special capital reserve fund authorized to be created and established by this section shall not exceed one hundred million dollars.

Sec. 4. Subdivision (2) of subsection (a) of section 32-141 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2012):

(2) The total amount of private activity bonds which may be issued by state issuers in the calendar year commencing January 1, 2007, and each calendar year thereafter, under the state ceiling in effect for each such year, shall be allocated as follows: (A) Sixty per cent to the Connecticut Housing Finance Authority; (B) twelve and one-half per cent to the Connecticut Development Authority; and (C) twenty-seven and one-half per cent to municipalities and political subdivisions, departments, agencies, authorities and other bodies of municipalities, [and] the Connecticut Higher Education Supplemental Loan Authority and the Connecticut Clean Energy Authority, then to the Connecticut Student Loan Foundation and then for contingencies. At least ten per cent of bonds allocated under subparagraph (A) of this subdivision shall be used for multifamily residential housing in the calendar year commencing January 1, 2008. In each calendar year commencing January 1, 2009, fifteen per cent of such bonds shall be used for multifamily residential housing.

Sec. 5. Section 16-245n of the 2012 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2012):

(a) For purposes of this section, "clean energy" means solar photovoltaic energy, solar thermal, geothermal energy, wind, ocean thermal energy, wave or tidal energy, fuel cells, landfill gas, hydropower that meets the low-impact standards of the Low-Impact Hydropower Institute, hydrogen production and hydrogen conversion technologies, low emission advanced biomass conversion technologies, alternative fuels, used for electricity generation including ethanol, biodiesel or other fuel produced in Connecticut and derived from agricultural produce, food waste or waste vegetable oil, provided the Commissioner of Energy and Environmental Protection determines that such fuels provide net reductions in greenhouse gas emissions and fossil fuel consumption, usable electricity from combined heat and power systems with waste heat recovery systems, thermal storage systems, other energy resources and emerging technologies which have significant potential for commercialization and which do not involve the combustion of coal, petroleum or petroleum products, municipal solid waste or nuclear fission, financing of energy efficiency projects, and projects that seek to deploy electric, electric hybrid, natural gas or alternative fuel vehicles and associated infrastructure and any related storage, distribution, manufacturing technologies or facilities.

(b) On and after July 1, 2004, the Public Utilities Regulatory Authority shall assess or cause to be assessed a charge of not less than one mill per kilowatt hour charged to each end use customer of electric services in this state which shall be deposited into the Clean Energy Fund established under subsection (c) of this section. Notwithstanding the provisions of this section, receipts from such charges shall be disbursed to the resources of the General Fund during the period from July 1, 2003, to June 30, 2005, unless the authority shall, on or before October 30, 2003, issue a financing order for each affected distribution company in accordance with sections 16-245e to 16-245k, inclusive, to sustain funding of renewable energy investment programs by substituting an equivalent amount, as determined by the authority in such financing order, of proceeds of rate reduction bonds for disbursement to the resources of the General Fund during the period from July 1, 2003, to June 30, 2005. The authority may authorize in such financing order the issuance of rate reduction bonds that substitute for disbursement to the General Fund for receipts of both charges under this subsection and subsection (a) of section 16-245m and also may in its discretion authorize the issuance of rate reduction bonds under this subsection and subsection (a) of section 16-245m that relate to more than one electric distribution company. The authority shall, in such financing order or other appropriate order, offset any increase in the competitive transition assessment necessary to pay principal, premium, if any, interest and expenses of the issuance of such rate reduction bonds by making an equivalent reduction to the charges imposed under this subsection, provided any failure to offset all or any portion of such increase in the competitive transition assessment shall not affect the need to implement the full amount of such increase as required by this subsection and sections 16-245e to 16-245k, inclusive. Such financing order shall also provide if the rate reduction bonds are not issued, any unrecovered funds expended and committed by the electric distribution companies for renewable resource investment through deposits into the Clean Energy Fund, provided such expenditures were approved by the authority following August 20, 2003, and prior to the date of determination that the rate reduction bonds cannot be issued, shall be recovered by the companies from their respective competitive transition assessment or systems benefits charge, except that such expenditures shall not exceed one million dollars per month. All receipts from the remaining charges imposed under this subsection, after reduction of such charges to offset the increase in the competitive transition assessment as provided in this subsection, shall be disbursed to the Clean Energy Fund commencing as of July 1, 2003. Any increase in the competitive transition assessment or decrease in the renewable energy investment component of an electric distribution company's rates resulting from the issuance of or obligations under rate reduction bonds shall be included as rate adjustments on customer bills.

(c) There is hereby created a Clean Energy Fund which shall be within the Connecticut Clean Energy [Finance and Investment] Authority. The fund may receive any amount required by law to be deposited into the fund and may receive any federal funds as may become available to the state for clean energy investments. Upon authorization of the Connecticut Clean Energy [Finance and Investment] Authority established pursuant to subsection (d) of this section, any amount in said fund may be used for expenditures that promote investment in clean energy in accordance with a comprehensive plan developed by it to foster the growth, development and commercialization of clean energy sources, related enterprises and stimulate demand for clean energy and deployment of clean energy sources that serve end use customers in this state and for the further purpose of supporting operational demonstration projects for advanced technologies that reduce energy use from traditional sources. Such expenditures may include, but not be limited to, providing low-cost financing and credit enhancement mechanisms for clean energy projects and technologies, reimbursement of the operating expenses, including administrative expenses incurred by the authority and the corporation, and capital costs incurred by the authority in connection with the operation of the fund, the implementation of the plan developed pursuant to subsection (d) of this section or the other permitted activities of the authority, disbursements from the fund to develop and carry out the plan developed pursuant to subsection (d) of this section, grants, direct or equity investments, contracts or other actions which support research, development, manufacture, commercialization, deployment and installation of clean energy technologies, and actions which expand the expertise of individuals, businesses and lending institutions with regard to clean energy technologies.

(d) (1) (A) There is established the Connecticut Clean Energy [Finance and Investment] Authority, which [shall be deemed a quasi-public agency for purposes of chapters 5, 10 and 12 and within Connecticut Innovations, Incorporated, for administrative purposes only] is hereby established and created as a body politic and corporate, constituting a public instrumentality and political subdivision of the state of Connecticut established and created for the performance of an essential public and governmental function. The authority shall not be construed to be a department, institution or agency of the state and shall be within Connecticut Innovations, Incorporated, for administration purposes only.

(B) The authority shall [(A)] (i) develop separate programs to finance and otherwise support clean energy investment in residential, municipal, small business and larger commercial projects and such others as the authority may determine; [(B)] (ii) support financing or other expenditures that promote investment in clean energy sources in accordance with a comprehensive plan developed by it to foster the growth, development and commercialization of clean energy sources and related enterprises; and [(C)] (iii) stimulate demand for clean energy and the deployment of clean energy sources within the state that serve end-use customers in the state.

(C) Said authority shall constitute a successor agency to the [corporation] Clean Energy Finance and Investment Authority and to Connecticut Innovations, Incorporated for the purposes of administrating the Clean Energy Fund in accordance with section 4-38d. Said authority shall have all the privileges, immunities, tax exemptions and other exemptions of [the] said corporation. Said authority shall be subject to suit and liability solely from the assets, revenues and resources of the authority and without recourse to the general funds, revenues, resources or other assets of [the] said corporation. Said authority may provide financial assistance in the form of grants, loans, loan guarantees or debt and equity investments, as approved in accordance with written procedures adopted pursuant to section 1-121. Said authority may assume or take title to any real property, convey or dispose of its assets and pledge its revenues to secure any borrowing, convey or dispose of its assets and pledge its revenues to secure any borrowing, for the purpose of developing, acquiring, constructing, refinancing, rehabilitating or improving its assets or supporting its programs, provided each such borrowing or mortgage, unless otherwise provided by the [board or the] authority, shall be a special obligation of the authority, which obligation may be in the form of bonds, bond anticipation notes or other obligations which evidence an indebtedness to the extent permitted under this chapter to fund, refinance and refund the same and provide for the rights of holders thereof, and to secure the same by pledge of revenues, notes and mortgages of others, and which shall be payable solely from the assets, revenues and other resources of the authority and [in no event shall] such bonds may be secured by a special capital reserve fund [of any kind which is in any way] contributed to by the state. The authority shall have the purposes as provided by resolution of the authority's board of directors, which purposes shall be consistent with this section. No further action is required for the establishment of the authority, except the adoption of a resolution for the authority.

(2) (A) The authority may seek to qualify as a Community Development Financial Institution under Section 4702 of the United States Code. If approved as a Community Development Financial Institution, the authority would be treated as a qualified community development entity for purposes of Section 45D and Section 1400N(m) of the Internal Revenue Code.

(B) Before making any loan, loan guarantee, or such other form of financing support or risk management for a clean energy project, the authority shall develop standards to govern the administration of the authority through rules, policies and procedures that specify borrower eligibility, terms and conditions of support, and other relevant criteria, standards or procedures.

(C) Funding sources specifically authorized include, but are not limited to:

(i) Funds repurposed from existing programs providing financing support for clean energy projects, provided any transfer of funds from such existing programs shall be subject to approval by the General Assembly and shall be used for expenses of financing, grants and loans;

(ii) Any federal funds that can be used for the purposes specified in subsection (c) of this section;

(iii) Charitable gifts, grants, contributions as well as loans from individuals, corporations, university endowments and philanthropic foundations;

(iv) Earnings and interest derived from financing support activities for clean energy projects backed by the authority;

(v) If and to the extent that the authority qualifies as a Community Development Financial Institution under Section 4702 of the United States Code, funding from the Community Development Financial Institution Fund administered by the United States Department of Treasury, as well as loans from and investments by depository institutions seeking to comply with their obligations under the United States Community Reinvestment Act of 1977; and

(vi) The authority may enter into contracts with private sources to raise capital. The average rate of return on such debt [or equity] shall be set by the authority's board of directors.

(D) The authority may provide financing support under this subsection if the authority determines that the amount to be financed by the authority and other nonequity financing sources do not exceed eighty per cent of the cost to develop and deploy a clean energy project or up to one hundred per cent of the cost of financing an energy efficiency project.

(E) The authority may assess reasonable fees on its financing activities to cover its reasonable costs and expenses, as determined by the board.

(F) The authority shall make information regarding the rates, terms and conditions for all of its financing support transactions available to the public for inspection, including formal annual reviews by both a private auditor conducted pursuant to subdivision (2) of subsection (f) of this section and the Comptroller, and providing details to the public on the Internet, provided public disclosure shall be restricted for patentable ideas, trade secrets, proprietary or confidential commercial or financial information, disclosure of which may cause commercial harm to a nongovernmental recipient of such financing support and for other information exempt from public records disclosure pursuant to section 1-210.

(3) No director, officer, employee or agent of the authority, while acting within the scope of his or her authority, shall be subject to any personal liability resulting from exercising or carrying out any of the authority's purposes or powers.

(e) The powers of the Connecticut Clean Energy [Finance and Investment] Authority shall be vested in and exercised by a board of directors, which shall consist of eleven voting and two nonvoting members each with knowledge and expertise in matters related to the purpose and activities of the authority appointed as follows: The Treasurer or the Treasurer's designee, the Commissioner of Energy and Environmental Protection or the commissioner's designee and the Commissioner of Economic and Community Development or the commissioner's designee, each serving ex officio, one member who shall represent a residential or low-income group appointed by the speaker of the House of Representatives for a term of four years, one member who shall have experience in investment fund management appointed by the minority leader of the House of Representatives for a term of three years, one member who shall represent an environmental organization appointed by the president pro tempore of the Senate for a term of four years, and one member who shall have experience in the finance or deployment of renewable energy appointed by the minority leader of the Senate for a term of four years. Thereafter, such members of the General Assembly shall appoint members of the board to succeed such appointees whose terms expire and each member so appointed shall hold office for a period of four years from the first day of July in the year of his or her appointment. The Governor shall appoint four members to the board as follows: Two for two years who shall have experience in the finance of renewable energy; one for four years who shall be a representative of a labor organization; and one who shall have experience in research and development or manufacturing of clean energy. Thereafter, the Governor shall appoint members of the board to succeed such appointees whose terms expire and each member so appointed shall hold office for a period of four years from the first day of July in the year of his or her appointment. The president of the authority and a member of the board of Connecticut Innovations, Incorporated, appointed by the chairperson of the corporation shall serve on the board in an ex-officio, nonvoting capacity. The Governor shall appoint the chairperson of the board. The board shall elect from its members a vice chairperson and such other officers as it deems necessary and shall adopt such bylaws and procedures it deems necessary to carry out its functions. The board may establish committees and subcommittees as necessary to conduct its business.

(f) (1) The board shall issue annually a report to the Department of Energy and Environmental Protection reviewing the activities of the Connecticut Clean Energy [Finance and Investment] Authority in detail and shall provide a copy of such report, in accordance with the provisions of section 11-4a, to the joint standing committees of the General Assembly having cognizance of matters relating to energy and commerce. The report shall include a description of the programs and activities undertaken during the reporting period jointly or in collaboration with the Energy Conservation and Load Management Funds established pursuant to section 16-245m, as amended by this act.

(2) The Clean Energy Fund shall be audited annually. Such audits shall be conducted with generally accepted auditing standards by independent certified public accountants certified by the State Board of Accountancy. Such accountants may be the accountants for the corporation.

(3) Any entity that receives financing for a clean energy project from the fund shall provide the board an annual statement, certified as correct by the chief financial officer of the recipient of such financing, setting forth all sources and uses of funds in such detail as may be required by the authority of such project. The authority shall maintain any such audits for not less than five years. Residential projects for buildings with one to four dwelling units are exempt from this and any other annual auditing requirements, except that residential projects may be required to grant their utility companies' permission to release their usage data to the authority.

(g) There shall be a joint committee of the Energy Conservation Management Board and the Connecticut Clean Energy [Finance and Investment] Authority board of directors, as provided in subdivision (2) of subsection (d) of section 16-245m, as amended by this act.

Sec. 6. Subsection (l) of section 1-79 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(l) "Quasi-public agency" means the Connecticut Development Authority, Connecticut Innovations, Incorporated, Connecticut Health and Education Facilities Authority, Connecticut Higher Education Supplemental Loan Authority, Connecticut Housing Finance Authority, Connecticut Housing Authority, Connecticut Resources Recovery Authority, Lower Fairfield County Convention Center Authority, Capital City Economic Development Authority, Connecticut Lottery Corporation, Connecticut Airport Authority, Health Information Technology Exchange of Connecticut, [and] Connecticut Health Insurance Exchange and Connecticut Clean Energy Authority.

Sec. 7. Subdivision (1) of section 1-120 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(1) "Quasi-public agency" means the Connecticut Development Authority, Connecticut Innovations, Incorporated, Connecticut Health and Educational Facilities Authority, Connecticut Higher Education Supplemental Loan Authority, Connecticut Housing Finance Authority, Connecticut Housing Authority, Connecticut Resources Recovery Authority, Capital City Economic Development Authority, Connecticut Lottery Corporation, Connecticut Airport Authority, Health Information Technology Exchange of Connecticut, [and] Connecticut Health Insurance Exchange and Connecticut Clean Energy Authority.

Sec. 8. Section 1-124 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) The Connecticut Development Authority, the Connecticut Health and Educational Facilities Authority, the Connecticut Higher Education Supplemental Loan Authority, the Connecticut Housing Finance Authority, the Connecticut Housing Authority, the Connecticut Resources Recovery Authority, the Health Information Technology Exchange of Connecticut, the Connecticut Airport Authority, the Capital City Economic Development Authority, [and] the Connecticut Health Insurance Exchange and the Connecticut Clean Energy Authority shall not borrow any money or issue any bonds or notes which are guaranteed by the state of Connecticut or for which there is a capital reserve fund of any kind which is in any way contributed to or guaranteed by the state of Connecticut until and unless such borrowing or issuance is approved by the State Treasurer or the Deputy State Treasurer appointed pursuant to section 3-12. The approval of the State Treasurer or said deputy shall be based on documentation provided by the authority that it has sufficient revenues to (1) pay the principal of and interest on the bonds and notes issued, (2) establish, increase and maintain any reserves deemed by the authority to be advisable to secure the payment of the principal of and interest on such bonds and notes, (3) pay the cost of maintaining, servicing and properly insuring the purpose for which the proceeds of the bonds and notes have been issued, if applicable, and (4) pay such other costs as may be required.

(b) To the extent the Connecticut Development Authority, Connecticut Innovations, Incorporated, Connecticut Higher Education Supplemental Loan Authority, Connecticut Housing Finance Authority, Connecticut Housing Authority, Connecticut Resources Recovery Authority, Connecticut Health and Educational Facilities Authority, the Health Information Technology Exchange of Connecticut, the Connecticut Airport Authority, the Capital City Economic Development Authority, [or] the Connecticut Health Insurance Exchange or the Connecticut Clean Energy Authority is permitted by statute and determines to exercise any power to moderate interest rate fluctuations or enter into any investment or program of investment or contract respecting interest rates, currency, cash flow or other similar agreement, including, but not limited to, interest rate or currency swap agreements, the effect of which is to subject a capital reserve fund which is in any way contributed to or guaranteed by the state of Connecticut, to potential liability, such determination shall not be effective until and unless the State Treasurer or his or her deputy appointed pursuant to section 3-12 has approved such agreement or agreements. The approval of the State Treasurer or his or her deputy shall be based on documentation provided by the authority that it has sufficient revenues to meet the financial obligations associated with the agreement or agreements.

Sec. 9. Section 1-125 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

The directors, officers and employees of the Connecticut Development Authority, Connecticut Innovations, Incorporated, Connecticut Higher Education Supplemental Loan Authority, Connecticut Housing Finance Authority, Connecticut Housing Authority, Connecticut Resources Recovery Authority, including ad hoc members of the Connecticut Resources Recovery Authority, Connecticut Health and Educational Facilities Authority, Capital City Economic Development Authority, the Health Information Technology Exchange of Connecticut, Connecticut Airport Authority, Connecticut Lottery Corporation, [and] Connecticut Health Insurance Exchange and the Connecticut Clean Energy Authority and any person executing the bonds or notes of the agency shall not be liable personally on such bonds or notes or be subject to any personal liability or accountability by reason of the issuance thereof, nor shall any director or employee of the agency, including ad hoc members of the Connecticut Resources Recovery Authority, be personally liable for damage or injury, not wanton, reckless, wilful or malicious, caused in the performance of his or her duties and within the scope of his or her employment or appointment as such director, officer or employee, including ad hoc members of the Connecticut Resources Recovery Authority. The agency shall protect, save harmless and indemnify its directors, officers or employees, including ad hoc members of the Connecticut Resources Recovery Authority, from financial loss and expense, including legal fees and costs, if any, arising out of any claim, demand, suit or judgment by reason of alleged negligence or alleged deprivation of any person's civil rights or any other act or omission resulting in damage or injury, if the director, officer or employee, including ad hoc members of the Connecticut Resources Recovery Authority, is found to have been acting in the discharge of his or her duties or within the scope of his or her employment and such act or omission is found not to have been wanton, reckless, wilful or malicious.

Sec. 10. Section 7-233z of the 2012 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) A municipal electric energy cooperative, created pursuant to this chapter, shall submit a comprehensive report on the activities of the municipal electric utilities with regard to promotion of renewable energy resources. Such report shall identify the standards and activities of municipal electric utilities in the promotion, encouragement and expansion of the deployment and use of renewable energy sources within the service areas of the municipal electric utilities for the prior calendar year. The cooperative shall submit the report to the Connecticut Clean Energy [Finance and Investment] Authority not later than ninety days after the end of each calendar year that describes the activities undertaken pursuant to this subsection during the previous calendar year for the promotion and development of renewable energy sources for all electric customer classes.

(b) Such cooperative shall develop standards for the promotion of renewable resources that apply to each municipal electric utility. On or before January 1, 2008, and annually thereafter, such cooperative shall submit such standards to the Connecticut Clean Energy [Finance and Investment] Authority.

Sec. 11. Subdivision (2) of subsection (j) of section 16-244c of the 2012 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(2) Notwithstanding the provisions of subsection (d) of this section regarding an alternative transitional standard offer option or an alternative standard service option, an electric distribution company providing transitional standard offer service, standard service, supplier of last resort service or back-up electric generation service in accordance with this section shall, not later than July 1, 2008, file with the Public Utilities Regulatory Authority for its approval one or more long-term power purchase contracts from Class I renewable energy source projects with a preference for projects located in Connecticut that receive funding from the Clean Energy Fund and that are not less than one megawatt in size, at a price that is either, at the determination of the project owner, (A) not more than the total of the comparable wholesale market price for generation plus five and one-half cents per kilowatt hour, or (B) fifty per cent of the wholesale market electricity cost at the point at which transmission lines intersect with each other or interface with the distribution system, plus the project cost of fuel indexed to natural gas futures contracts on the New York Mercantile Exchange at the natural gas pipeline interchange located in Vermillion Parish, Louisiana that serves as the delivery point for such futures contracts, plus the fuel delivery charge for transporting fuel to the project, plus five and one-half cents per kilowatt hour. In its approval of such contracts, the authority shall give preference to purchase contracts from those projects that would provide a financial benefit to ratepayers and would enhance the reliability of the electric transmission system of the state. Such projects shall be located in this state. The owner of a fuel cell project principally manufactured in this state shall be allocated all available air emissions credits and tax credits attributable to the project and no less than fifty per cent of the energy credits in the Class I renewable energy credits program established in section 16-245a attributable to the project. On and after October 1, 2007, and until September 30, 2008, such contracts shall be comprised of not less than a total, apportioned among each electric distribution company, of one hundred twenty-five megawatts; and on and after October 1, 2008, such contracts shall be comprised of not less than a total, apportioned among each electrical distribution company, of one hundred fifty megawatts. The Public Utilities Regulatory Authority shall not issue any order that results in the extension of any in-service date or contractual arrangement made as a part of Project 100 or Project 150 beyond the termination date previously approved by the authority established by the contract, provided any party to such contract may provide a notice of termination in accordance with the terms of, and to the extent permitted under, its contract. The cost of such contracts and the administrative costs for the procurement of such contracts directly incurred shall be eligible for inclusion in the adjustment to the transitional standard offer as provided in this section and any subsequent rates for standard service, provided such contracts are for a period of time sufficient to provide financing for such projects, but not less than ten years, and are for projects which began operation on or after July 1, 2003. Except as provided in this subdivision, the amount from Class I renewable energy sources contracted under such contracts shall be applied to reduce the applicable Class I renewable energy source portfolio standards. For purposes of this subdivision, the department's determination of the comparable wholesale market price for generation shall be based upon a reasonable estimate. On or before September 1, 2011, the authority, in consultation with the Office of Consumer Counsel and the Connecticut Clean Energy [Finance and Investment] Authority, shall study the operation of such renewable energy contracts and report its findings and recommendations to the joint standing committee of the General Assembly having cognizance of matters relating to energy.

Sec. 12. Subdivisions (2) and (3) of subsection (d) of section 16-245m of the 2012 supplement to the general statutes are repealed and the following is substituted in lieu thereof (Effective from passage):

(2) There shall be a joint committee of the Energy Conservation Management Board and the board of directors of the Connecticut Clean Energy [Finance and Investment] Authority. The board and the advisory committee shall each appoint members to such joint committee. The joint committee shall examine opportunities to coordinate the programs and activities funded by the Clean Energy Fund pursuant to section 16-245n, as amended by this act, with the programs and activities contained in the plan developed under this subsection to reduce the long-term cost, environmental impacts and security risks of energy in the state. Such joint committee shall hold its first meeting on or before August 1, 2005.

(3) Programs included in the plan developed under subdivision (1) of this subsection shall be screened through cost-effectiveness testing that compares the value and payback period of program benefits to program costs to ensure that programs are designed to obtain energy savings and system benefits, including mitigation of federally mandated congestion charges, whose value is greater than the costs of the programs. Program cost-effectiveness shall be reviewed annually, or otherwise as is practicable, and shall incorporate the results of the evaluation process set forth in subdivision (4) of this subsection. If a program is determined to fail the cost-effectiveness test as part of the review process, it shall either be modified to meet the test or shall be terminated. On or before March 1, 2005, and on or before March first annually thereafter, the board shall provide a report, in accordance with the provisions of section 11-4a, to the joint standing committees of the General Assembly having cognizance of matters relating to energy and the environment that documents (A) expenditures and fund balances and evaluates the cost-effectiveness of such programs conducted in the preceding year, and (B) the extent to and manner in which the programs of such board collaborated and cooperated with programs, established under section 7-233y, of municipal electric energy cooperatives. To maximize the reduction of federally mandated congestion charges, programs in the plan may allow for disproportionate allocations between the amount of contributions to the Energy Conservation and Load Management Funds by a certain rate class and the programs that benefit such a rate class. Before conducting such evaluation, the board shall consult with the board of directors of the Connecticut Clean Energy [Finance and Investment] Authority. The report shall include a description of the activities undertaken during the reporting period jointly or in collaboration with the Clean Energy Fund established pursuant to subsection (c) of section 16-245n, as amended by this act.

Sec. 13. Subsection (f) of section 16-245m of the 2012 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(f) No later than December 31, 2006, and no later than December thirty-first every five years thereafter, the Energy Conservation Management Board shall, after consulting with the Connecticut Clean Energy [Finance and Investment] Authority, conduct an evaluation of the performance of the programs and activities of the fund and submit a report, in accordance with the provisions of section 11-4a, of the evaluation to the joint standing committee of the General Assembly having cognizance of matters relating to energy.

Sec. 14. Section 16-245ee of the 2012 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

Before approving any plan for energy conservation and load management and renewable energy projects issued to it by the Energy Conservation and Management Board, the board of directors of the Connecticut Clean Energy [Finance and Investment] Authority or an electric distribution company, the Department of Energy and Environmental Protection shall determine that an equitable amount of the funds administered by each such board are to be deployed among small and large customers with a maximum average monthly peak demand of one hundred kilowatts in census tracts in which the median income is not more than sixty per cent of the state median income. The department shall determine such equitable share and such projects may include a mentoring component for such communities. On and after January 1, 2012, and annually thereafter, the department shall report, in accordance with the provisions of section 11-4a, to the joint standing committee of the General Assembly having cognizance of matters relating to energy regarding the distribution of funds to such communities.

Sec. 15. Section 16-245ff of the 2012 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) The Connecticut Clean Energy [Finance and Investment] Authority established pursuant to section 16-245n, as amended by this act, shall structure and implement a residential solar investment program established pursuant to this section, which shall result in a minimum of thirty megawatts of new residential solar photovoltaic installations located in this state on or before December 31, 2022, the annual procurement of which shall be determined by the authority and the cost of which shall not exceed one-third of the total surcharge collected annually pursuant to said section 16-245n.

(b) The Connecticut Clean Energy [Finance and Investment] Authority shall offer direct financial incentives, in the form of performance-based incentives or expected performance-based buydowns, for the purchase or lease of qualifying residential solar photovoltaic systems. For the purposes of this section, "performance-based incentives" means incentives paid out on a per kilowatt-hour basis, and "expected performance-based buydowns" means incentives paid out as a one-time upfront incentive based on expected system performance. The authority shall consider willingness to pay studies and verified solar photovoltaic system characteristics, such as operational efficiency, size, location, shading and orientation, when determining the type and amount of incentive. Notwithstanding the provisions of subdivision (1) of subsection (j) of section 16-244c, the amount of renewable energy produced from Class I renewable energy sources receiving tariff payments or included in utility rates under this section shall be applied to reduce the electric distribution company's Class I renewable energy source portfolio standard. Customers who receive expected performance-based buydowns under this section shall not be eligible for a credit pursuant to section 16-243b.

(c) Beginning with the comprehensive plan covering the period from July 1, 2011, to June 30, 2013, the Connecticut Clean Energy [Finance and Investment] Authority shall develop and publish in each such plan a proposed schedule for the offering of performance-based incentives or expected performance-based buydowns over the duration of any such solar incentive program. Such schedule shall: (1) Provide for a series of solar capacity blocks the combined total of which shall be a minimum of thirty megawatts and projected incentive levels for each such block; (2) provide incentives that are sufficient to meet reasonable payback expectations of the residential consumer, taking into consideration the estimated cost of residential solar installations, the value of the energy offset by the system and the availability and estimated value of other incentives, including, but not limited to, federal and state tax incentives and revenues from the sale of solar renewable energy credits; (3) provide incentives that decline over time and will foster the sustained, orderly development of a state-based solar industry; (4) automatically adjust to the next block once the board has issued reservations for financial incentives provided pursuant to this section from the board fully committing the target solar capacity and available incentives in that block; and (5) provide comparable economic incentives for the purchase or lease of qualifying residential solar photovoltaic systems. The authority may retain the services of a third-party entity with expertise in the area of solar energy program design to assist in the development of the incentive schedule or schedules. The Department of Energy and Environmental Protection shall review and approve such schedule. Nothing in this subsection shall restrict the authority from modifying the approved incentive schedule before the issuance of its next comprehensive plan to account for changes in federal or state law or regulation or developments in the solar market when such changes would affect the expected return on investment for a typical residential solar photovoltaic system by twenty per cent or more.

(d) The Connecticut Clean Energy [Finance and Investment] Authority shall establish and periodically update program guidelines, including, but not limited to, requirements for systems and program participants related to: (1) Eligibility criteria; (2) standards for deployment of energy efficient equipment or building practices as a condition for receiving incentive funding; (3) procedures to provide reasonable assurance that such reservations are made and incentives are paid out only to qualifying residential solar photovoltaic systems demonstrating a high likelihood of being installed and operated as indicated in application materials; and (4) reasonable protocols for the measurement and verification of energy production.

(e) The Connecticut Clean Energy [Finance and Investment] Authority shall maintain on its web site the schedule of incentives, solar capacity remaining in the current block and available funding and incentive estimators.

(f) Funding for the residential performance-based incentive program and expected performance-based buydowns shall be apportioned from the moneys collected under the surcharge specified in section 16-245n, as amended by this act, provided such apportionment shall not exceed one-third of the total surcharge collected annually, and supplemented by federal funding as may become available.

(g) The Connecticut Clean Energy [Finance and Investment] Authority shall identify barriers to the development of a permanent Connecticut-based solar workforce and shall make provision for comprehensive training, accreditation and certification programs through institutions and individuals accredited and certified to national standards.

(h) On or before January 1, 2014, and every two years thereafter for the duration of the program, the Connecticut Clean Energy [Finance and Investment] Authority shall report to the joint standing committee of the General Assembly having cognizance of matters relating to energy on progress toward the goals identified in subsection (a) of this section.

Sec. 16. Section 16-245hh of the 2012 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

The Connecticut Clean Energy [Finance and Investment] Authority created pursuant to section 16-245n, as amended by this act, in consultation with the Department of Energy and Environmental Protection, shall establish a program to be known as the "condominium renewable energy grant program". Under such program, the board shall provide grants to residential condominium associations and residential condominium owners, within available funds, for purchasing clean energy sources, including solar energy, geothermal energy and fuel cells or other energy-efficient hydrogen-fueled energy.

Sec. 17. Subsection (b) of section 16a-40d of the 2012 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(b) As of July 1, 2010, proceeds of the sale of said bonds which have been authorized as provided in subsection (a) of this section, but have not been allocated by the State Bond Commission, and the additional amount of five million dollars authorized by this section on July 1, 2010, shall be deposited in the Green Connecticut Loan Guaranty Fund established pursuant to section 16a-40e, and shall be used by the Connecticut Clean Energy [Finance and Investment] Authority for purposes of the Green Connecticut Loan Guaranty Fund program established pursuant to section 16a-40f, as amended by this act, provided not more than eighteen million dollars shall be deposited in the Green Connecticut Loan Guaranty Fund. Such additional amounts may be deposited in the Green Connecticut Loan Guaranty Fund as the State Bond Commission may, from time to time, authorize.

Sec. 18. Section 16a-40e of the 2012 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

The Connecticut Clean Energy [Finance and Investment] Authority shall establish a "Green Connecticut Loan Guaranty Fund". Such fund shall be used for the purposes of guaranteeing loans authorized under section 16a-40f, as amended by this act, and may be used for expenses incurred by said authority in the implementation of the program under said section.

Sec. 19. Subsection (a) of section 16a-40f of the 2012 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) For the purposes of this section:

(1) "Participating qualified nonprofit organizations" means individuals, nonprofit organizations and small businesses;

(2) "Small business" means a business entity employing not more than fifty full-time employees;

(3) "Eligible energy conservation project" means an energy conservation project meeting the criteria identified, as provided in subsection (d) of this section;

(4) "Participating lending institution" means any bank, trust company, savings bank, savings and loan association or credit union, whether chartered by the United States of America or this state, or any insurance company authorized to do business in this state that participates in the Green Connecticut Loan Guaranty Fund program; and

(5) "Authority" means the Connecticut Clean Energy [Finance and Investment] Authority.

Sec. 20. Subsection (d) of section 16a-40f of the 2012 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(d) In consultation with the Energy Conservation Management Board and the Connecticut Health and Educational Facilities Authority, the Connecticut Clean Energy [Finance and Investment] Authority shall identify types of projects that qualify as eligible energy conservation projects, including, but not limited to, the purchase and installation of insulation, alternative energy devices, energy conservation materials, replacement furnaces and boilers, and technologically advanced energy-conserving equipment. The authority, in consultation with said entities, shall establish priorities for financing eligible energy conservation projects based on need and quality determinants. The authority shall adopt procedures, in accordance with the provisions of section 1-121, to implement the provisions of this section.

Sec. 21. Subsection (c) of section 16a-40l of the 2012 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(c) "Eligible entity" means (1) any residential, commercial, institutional or industrial customer of an electric distribution company or natural gas company, as defined in section 16-1, who employs or installs an eligible in-state energy savings technology, (2) an energy service company certified as a Connecticut electric efficiency partner by the Department of Energy and Environmental Protection, or (3) an installer certified by the Connecticut Clean Energy [Finance and Investment] Authority.

This act shall take effect as follows and shall amend the following sections:

Section 1

July 1, 2012

New section

Sec. 2

July 1, 2012

New section

Sec. 3

July 1, 2012

New section

Sec. 4

July 1, 2012

32-141(a)(2)

Sec. 5

July 1, 2012

16-245n

Sec. 6

from passage

1-79(l)

Sec. 7

from passage

1-120(1)

Sec. 8

from passage

1-124

Sec. 9

from passage

1-125

Sec. 10

from passage

7-233z

Sec. 11

from passage

16-244c(j)(2)

Sec. 12

from passage

16-245m(d)(2) and (3)

Sec. 13

from passage

16-245m(f)

Sec. 14

from passage

16-245ee

Sec. 15

from passage

16-245ff

Sec. 16

from passage

16-245hh

Sec. 17

from passage

16a-40d(b)

Sec. 18

from passage

16a-40e

Sec. 19

from passage

16a-40f(a)

Sec. 20

from passage

16a-40f(d)

Sec. 21

from passage

16a-40l(c)

Statement of Purpose:

To authorize the Connecticut Clean Energy Authority to issue it's own bonds and clean energy bonds, to establish special capital reserve funds, and to be subject to the same statutory provisions as other quasi-public entities.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]