State of Connecticut

Notes to the Financial Statements

June 30, 2008

Note 7 Receivables - Noncurrent

Noncurrent receivables for the primary government and its component units, as of June 30, 2008, consisted of the following (amounts in thousands):

Primary Government
Governmental Business-Type Component
Activities Activities Units
Accounts $ - $ - $ 26,164
Loans 213,911 562,619 135,452
Total Receivables 213,911 562,619 161,616
Allowance for Uncollectibles (9,374) (2,876) (10,007)
Receivables, Net $ 204,537 $ 559,743 $ 151,609

The Clean Water fund (business-type activities) loans funds to qualified municipalities for planning, design, and construction of water quality projects. These loans are payable over a 20 year period at an annual interest rate of 2 percent and are secured by the full faith and credit or revenue pledges of the municipalities, or both. At year end, the noncurrent portion of loans receivable was $501 million.

The Connecticut Development Authority (a component unit) loans funds to finance the purchase of land, buildings, and equipment by qualified applicants and to finance other economic development programs of the Authority. These loans are collateralized by assets acquired from proceeds of the related loans and have originating terms of 1 to 25 years and earn interest at rates ranging from 3 percent to 10.25 percent. As of June 30, 2008, the noncurrent portion of loans receivable was $28 million. In addition, loans in the amount of $5.5 million (including loans of $5.4 million made by other lending institutions) were insured by an insurance fund created by the Authority and by the faith and credit pledged by the State. This insurance fund had net assets of $(184) thousand at year-end. Thus, the State is contingently liable in the event of any defaulted loans that could not be paid out of the assets of the insurance fund.