Bill Text: CT HB05454 | 2016 | General Assembly | Comm Sub

Connecticut House Bill 5454 (Prior Session Legislation)

Bill Title: An Act Concerning The Connecticut Health And Educational Facilities Authority.

Spectrum: Committee Bill

Status: (Introduced - Dead) 2016-04-06 - File Number 488 [HB05454 Detail]

Download: Connecticut-2016-HB05454-Comm_Sub.html

General Assembly		*Substitute Bill No. 5454*
*February Session, 2016*		_____HB05454PH____032216____

AN ACT CONCERNING THE CONNECTICUT HEALTH AND EDUCATIONAL FACILITIES AUTHORITY.

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

Section 1. Section 10a-178 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2016):

As used in this chapter, the following words and terms shall have the following meanings unless the context indicates another or different meaning or intent:

(a) "Authority" means the State of Connecticut Health and Educational Facilities Authority created by section 10a-179 or any board, body, commission, department or officer succeeding to the principal functions thereof or to whom the powers conferred upon the authority by this chapter shall be given by law;

(b) "Project", in the case of a participating institution for higher education, means a structure suitable for use as a dormitory or other housing facility, including housing for staff members, employees or students at such institution of higher education, dining hall, student union, administration building, academic building, library, laboratory, research facility, classroom, athletic facility, health care facility, and maintenance, storage or utility facility and other structures or facilities related thereto or required or useful for the instruction of students or the conducting of research or the operation of an institution for higher education, including parking and other facilities or structures essential or convenient for the orderly conduct of such institution for higher education, also including equipment and machinery and other similar items necessary or convenient for the operation of a particular facility or structure in the manner for which its use is intended or for the operation of a participating institution for higher education, or any combination thereof, but shall not include such items as books, fuel, supplies or other items the purchase of which is customarily deemed to result in a current operating charge; in the case of a participating health care institution, means a structure suitable for use as a hospital, clinic, or other health care facility, laboratory, laundry, residence facility, including housing for nurses, interns, staff members, employees or students at such health care institution and their immediate families and for physically or mentally handicapped persons, administration building, research facility, and maintenance, storage or utility facility and other structures or facilities related thereto or required or useful for the operation of the project, including parking and other facilities or structures essential or convenient for the orderly operation of such project, also including equipment and machinery and other similar items necessary or convenient for the operation of the project in the manner for which its use is intended or for the operation of a participating health care institution, or any combination thereof, but shall not include such items as fuel, supplies or other items the purchase of which is customarily deemed to result in a current operating charge; in the case of a participating qualified nonprofit organization, means a structure or facility owned in its entirety by, or suitable for use in accordance with the charitable or nonprofit status of the qualified nonprofit organization, also including equipment and machinery and other similar items necessary or convenient for the operation of the project in the manner for which its use is intended or for the operation of a participating qualified nonprofit corporation; and, in the case of a participating nursing home, means a structure or facility suitable for use as a nursing home, residential care home, rest home, health care facility for the handicapped, mental health facility or independent living facility subject to the licensing requirements of chapter 368v and appurtenant facilities, equipment and machinery and other similar items necessary or convenient for the operation of a particular facility or structure in the manner for which its use is intended or for the operation of a participating nursing home;

(c) "Cost" as applied to a project or any portion thereof financed under the provisions of this chapter embraces all or any part of the cost of construction and acquisition of all lands, structures, real or personal property, rights, rights-of-way, franchises, easements and interests acquired or used for a project, the cost of demolishing or removing any buildings or structures on land so acquired, including the cost of acquiring any lands to which such buildings or structures may be moved, the cost of all machinery and equipment, financing charges, interest prior to, during and for a period after completion of such construction, provisions for working capital, reserves for principal and interest and for extensions, enlargements, additions, replacements, renovations and improvements, cost of engineering, financial and legal services, plans, specifications, studies, surveys, estimates of cost and of revenues, administrative expenses, expenses necessary or incident to determining the feasibility or practicability of constructing the project and such other expenses as may be necessary or incident to the construction and acquisition of the project, the financing of such construction and acquisition and the placing of the project in operation;

(d) "Bonds" means bonds of the authority issued under the provisions of this chapter, including refunding bonds, notwithstanding that the same may be secured by mortgage or the full faith and credit of the authority or the full faith and credit of a participating institution for higher education, a participating health care institution, a participating corporation, a participating nursing home or a participating qualified nonprofit organization or any other lawfully pledged security of a participating institution for higher education, a participating health care institution, a participating corporation, a participating nursing home or a participating qualified nonprofit organization;

(e) "Institution for higher education" means (1) an educational institution situated within this state which by virtue of law or charter is a nonprofit educational institution empowered to provide a program of education beyond the high school level, [;] or (2) a public educational institution, which, shall be any constituent unit, as defined in section 10a-1;

(f) "Participating institution for higher education" means an institution for higher education which, pursuant to the provisions of this chapter, shall undertake the financing and construction or acquisition of a project or shall undertake the refunding or refinancing of obligations or of a mortgage, or advances made or given for the costs of a project, as provided in and permitted by this chapter;

(g) "Health care institution" means (1) any nonprofit, state-aided hospital or other health care institution, including The University of Connecticut Health Center, which is entitled, under the laws of the state, to receive assistance from the state by means of a grant made pursuant to a budgetary appropriation made by the General Assembly, (2) any other hospital or other health care institution which is licensed, or any nonprofit, nonstock corporation which shall receive financing or shall undertake to construct or acquire a project which is or will be eligible to be licensed, as an institution under the provisions of sections 19a-490 to 19a-503, inclusive, or any nonprofit, nonstock, nonsectarian facility which is exempt from taxation under the provisions of section 12-81 or 38a-188 and which is a health care center under the provisions of sections 38a-175 to 38a-191, inclusive, or (3) any nonprofit corporation wholly owned by two or more hospitals or other health care institutions which operates for and on behalf of such hospitals or other health care institutions a project, as defined in subsection (b) of this section, or is a nursing home;

(h) "Nursing home" means any institution which is or will be eligible to be licensed as an institution under sections 19a-490 to 19a-503, inclusive, or a facility which (1) provides chronic and convalescent nursing care, (2) is a rest home with nursing facilities, (3) provides health care facilities for the handicapped, (4) is a home for elderly persons or physically handicapped or mentally handicapped persons or (5) is a continuing care facility registered with the Department of Social Services, pursuant to chapter 319f;

(i) "Participating nursing home" means a nursing home which, pursuant to the provisions of this chapter, undertakes the financing and construction or acquisition of a project or undertakes the refunding or refinancing of obligations or of a mortgage, loans or advances made or given for the costs of a project as provided in and permitted by this chapter;

(j) "Participating health care institution" means a health care institution which, pursuant to the provisions of this chapter, undertakes the financing and construction or acquisition of a project or undertakes the refunding or refinancing of obligations or of a mortgage, loan or advances made or given for the cost of a project as provided in and permitted by this chapter;

(k) "Participating corporation" means any nonprofit corporation created by a participating health care institution or a participating institution for higher education, or by one or more of them in combination, and to which there has been or will be transferred all right, title and interest in a project for the sole purpose of operating such project on behalf of such participating institution or institutions for the life of the bonds issued to finance such project, provided upon retirement of all of such bonds, all right, title and interest in the project shall revert to and vest in the participating institution for higher education or the participating health care institution or jointly in both such institutions;

(l) "Federally guaranteed security" means any security, investment or evidence of indebtedness which is either directly or indirectly insured or guaranteed, in whole or in part, as to the payment of principal and interest, by the United States of America or any agency or instrumentality thereof;

(m) "Federally insured mortgage loan" means any loan secured by a mortgage from any participating institution for higher education or participating health care institution or participating nursing home which is either directly or indirectly insured or guaranteed, in whole or in part, as to the repayment of principal and interest, by the United States of America or any agency or instrumentality thereof, or by any commitment by the United States of America or any agency or instrumentality thereof to so insure or guarantee;

(n) "Qualified nonprofit organization" means any private, nonprofit organization qualified under Section 501(c)(3) of the Internal Revenue Code of 1986, as the same may be amended from time to time, other than a health care institution, nursing home or institution for higher education;

(o) "Participating qualified nonprofit organization" means a qualified nonprofit organization which, pursuant to the provisions of this chapter, shall undertake the financing and construction or acquisition of a project or shall undertake the refunding or refinancing of obligations, or of a mortgage, loan or advances made or given to it to finance, in anticipation of permanent financing or donation from an outside source, the cost of a project, as provided in and permitted by this chapter;

(p) "Connecticut Higher Education Supplemental Loan Authority" means the Connecticut Higher Education Supplemental Loan Authority established as a subsidiary of the authority with powers granted pursuant to chapter 187b;

(q) "Connecticut Student Loan Foundation" means the Connecticut Student Loan Foundation established pursuant to chapter 187a that is a subsidiary of the authority as provided in section 10a-203a, and that is deemed a quasi-public agency for purposes of chapter 12;

(r) "Participating community hospital" means a participating health care institution that (1) is an acute care nonprofit hospital, (2) is not a teaching hospital or a member of a multihospital system, (3) has twenty-five or fewer full-time equivalent interns or residents for each one hundred inpatient beds, and (4) charges less for health care services than the median prices for such health care services in the state; and

(s) "Eligible project" means construction, renovation, the acquisition of facilities, the purchase of equipment, including, but not limited to, technology, and the cost of financing thereof.

Sec. 2. Subsection (a) of section 10a-186a of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2016):

(a) In connection with the issuance of bonds to finance a project at a participating nursing home or to refund bonds previously issued by the authority to finance a project at a participating nursing home, or in connection with the issuance of bonds to effect a refinancing or other restructuring with respect to one or more participating nursing homes as permitted by subsection (b) of this section, to finance dormitories, residential facilities, student centers, food service facilities and other auxiliary service facilities and related buildings and improvements at a public educational institution, to finance The University of Connecticut Health Center clinical services projects, as defined in subsection (g) of section 10a-114a, or to finance up to one hundred million dollars, in the aggregate, for [equipment, including installation and any necessary building renovations or alterations for the installation and operation of such equipment, for participating health care institutions at the discretion of the Secretary of the Office of Policy and Management and the Treasurer] eligible projects for participating community hospitals and participating nursing homes, 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 funds, (2) any proceeds of the sale of notes or bonds for a project, 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 funds from any other source or sources. The moneys held in or credited to any special capital reserve fund established under this section, except as hereinafter provided, shall be used solely for 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 capital reserve fund as the same become due, the purchase of such bonds of the authority, 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 amounts; provided the authority shall have power to provide that moneys in any such fund shall not be withdrawn therefrom at any time in such amount as would reduce the amount of such funds 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 the maximum amount permitted to be deposited in such fund by the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, 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, such amount being herein referred to as 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, unless the authority, at the time of the issuance of such bonds, shall deposit in such special capital reserve fund from the proceeds of the bonds so to be issued, or otherwise, an amount which, together with the amount then in such special capital reserve fund, will be not less than the required minimum capital reserve. On or before December first, annually, there is deemed to be appropriated from the state General Fund such sums, if any, as shall be certified by the chairman or vice-chairman of the authority to the Secretary of the Office of Policy and Management and the Treasurer of the state, 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 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 section shall be repaid to the state from moneys of the authority at such time as such moneys are not required for any other of its 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. 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 (A) to pay the principal of and interest on the bonds issued to finance the project, (B) to 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, (C) to pay the cost of maintaining the project in good repair and keeping it properly insured, and (D) to pay such other costs of the project as may be required.

Sec. 3. (NEW) (Effective July 1, 2016) Notwithstanding the provisions of chapter 187 of the general statutes, the authority, in consultation with the Office of Policy and Management and the State Treasurer, shall establish a self-sufficiency standard applicable to each participating community hospital that takes into consideration the unique economic circumstances facing such a hospital. Such self-sufficiency standard shall be applicable in lieu of other measures of credit worthiness when determining eligibility for financing for an eligible project for a participating community hospital pursuant to the provisions of section 10a-186a of the general statutes, as amended by this act.


This act shall take effect as follows and shall amend the following sections:
Section 1	July 1, 2016	10a-178
Sec. 2	July 1, 2016	10a-186a(a)
Sec. 3	July 1, 2016	New section

Statement of Legislative Commissioners:

In Section 1, Subsecs. (a) to (q) of Section 10a-178 were added for punctuation corrections to Subsecs. (e) and (q); and in Section 3, "community hospitals" was changed to "each participating community hospital" and "hospitals" was changed to "a hospital" for consistency with other provisions of the bill and standard drafting conventions.

Joint Favorable Subst.