(a) 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.

(b) 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.

(c) 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, or of the District of Columbia, 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.

(d) 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 chapter 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.

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

(February, 1965, P.A. 170, S. 17; 1967, P.A. 368, S. 14; P.A. 92-261, S. 7, 17; May Sp. Sess. P.A. 04-1, S. 31.)

History: 1967 act deleted “revenue” as descriptive of bonds and deleted references to “direct” obligations of U.S., replacing these with “obligations of, or guaranteed by” the U.S.; Sec. 10-351 transferred to Sec. 10a-192 in 1983 pursuant to reorganization of higher education system; P.A. 92-261 expanded investment options under Subsecs. (c) and (d); May Sp. Sess. P.A. 04-1 amended Subsec. (d) to replace provisions re how proceeds of bonds may be invested with provision authorizing investment of bonds as provided in chapter and the resolution authorizing issuance, effective June 8, 2004.