(a) Bonds or notes of the authority issued under the provisions of this chapter shall not be deemed to constitute a debt or liability of the state or of any municipality thereof or a pledge of the faith and credit of the state or of any such municipality, and shall not constitute bonds or notes issued or guaranteed by the state within the meaning of § 3-21, but shall be payable solely from the revenues and funds herein provided therefor. All such bonds or notes shall contain on the face thereof a statement to the effect that neither the state of Connecticut nor any municipality thereof other than the authority shall be obligated to pay the same or the interest thereon and that neither the faith and credit nor the taxing power of the state of Connecticut or of any such municipality is pledged to the payment of the principal of or the interest on such bonds or notes.

(b) 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 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 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 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 interest on such bonds of the authority or the payment of any redemption premium required to be paid when such bonds are redeemed prior to maturity; provided, the authority shall have power to provide that moneys in any such fund shall not be withdrawn therefrom at any time in such amount as would reduce the amount of such funds to less than the maximum amount of principal and interest becoming due by reason of maturity or a required sinking fund installment in any succeeding calendar year on the bonds of the authority then outstanding 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 at any time if the required minimum capital reserve on the bonds outstanding and the bonds then to be issued and secured by a special capital reserve fund will exceed the amount of such 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 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 amortized cost. 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. 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. Notwithstanding any other provisions contained in this chapter, the aggregate amount of bonds outstanding at any time, secured by such special capital reserve funds authorized to be created and established by this section shall not exceed seven hundred twenty-five million dollars and no such bonds shall be issued to pay project costs unless the authority is of the opinion and determines that the revenues to be derived from the project shall be sufficient (1) to pay the principal of and interest on the bonds issued to finance the project, (2) 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, (3) to pay the cost of maintaining the project in good repair and keeping it properly insured and (4) to pay such other costs of the project as may be required.

(c) Subject to any agreement or agreements with holders of outstanding bonds, notes or other obligations, the authority may apply moneys in any special capital reserve fund or any other fund of the authority to purchase a financial guaranty or financial guaranties secured or unsecured as the authority may determine. For purposes of this section, financial guaranty means any letter of credit, surety bonds, insurance policy, guaranty or similar instrument issued by a bond or insurance company or other financial institution which provides for moneys to be available for the purposes to which and at the times by which moneys in each such fund may be required.

(d) The authority may secure instruments or contracts authorized under subdivision (7) of § 22a-267 in any manner in which the authority may secure its bonds, notes or other obligations under § 22a-269, subject to any agreement or agreements with holders of outstanding bonds, notes or other obligations of the authority.