AN ACT CONCERNING THE AUTHORIZATION OF SPECIAL TAX OBLIGATION BONDS OF THE STATE FOR CERTAIN TRANSPORTATION PURPOSES.

AN ACT CONCERNING THE AUTHORIZATION OF SPECIAL TAX OBLIGATION BONDS OF THE STATE FOR CERTAIN TRANSPORTATION PURPOSES.

1. requires the transportation commissioner to acquire new self-propelled rail cars for the New Haven Rail Line and construct maintenance facilities for them, construct operational improvements on I-95, purchase 25 transit buses, and, in consultation with the Transportation Strategy Board (TSB) and appropriate regional planning and governmental bodies, evaluate, design, and construct transportation improvements in places other than on I-95;

2. authorizes $ 485. 65 million in bonding for the rail-related improvements the bill requires and $ 344. 5 million in bonding for the other required transportation improvements;

3. authorizes $ 136. 9 million in bonding for general transportation purposes in FY 06, $ 144. 6 million for these purposes in FY 07, and $ 49 million for capital resurfacing and related construction projects in FY 07;

4. establishes a $ 1 per trip surcharge on tickets for travel on the New Haven Line for the seven and one-half year period from January 1, 2008 through June 2015 and dedicates the revenue from the surcharge to the rail line improvements required by the bill;

5. increases the petroleum products gross earnings tax rate from the current 5% to 5. 8% in FY 06, 6. 3% in FY 07, 7% in FY 08, 7. 5% in FY 09 through FY 13, and 8. 1% for FY 14 and thereafter;

6. annually transfers specified amounts from the Special Transportation Fund (STF) to the Transportation Strategy Board projects account and directs specified amounts to be spent from the projects account on the rail-related improvements the bill requires;

7. increases the current $ 5. 25 million quarterly transfer to the STF of petroleum products tax receipts attributable from motor vehicle fuel sales to $ 10. 875 million in FY 06, $ 15. 25 million in FY 07, $ 21 million in FY 08, $ 25. 225 million in FY 09 through FY 13, and $ 29. 85 million in FY 14 and beyond;

8. requires $ 5 million to be spent by the TSB in both FY 06 and FY 07 for the municipal dial-a-ride matching grant program and eliminates a requirement that it be funded within available General Fund appropriations

9. eliminates the separate revenue stream from "incremental revenues" that currently goes into the TSB projects account as well as the $ 264 million in bonding authority supported by this dedicated revenue;

10. exempts the improvements for the New Haven Rail Line from certain requirements applicable to TSB projects; and

11. makes miscellaneous related changes and requirements.

EFFECTIVE DATE: July 1, 2005, except (1) the New Haven Rail Line $ 1 per trip surcharge, rail revitalization account, and revitalization program status report provisions are effective January 1, 2006; (2) the $ 49 million bond authorization for capital resurfacing is effective may 1, 2006; (3) the FY 07 STO bond authorization for general transportation purposes and the provision requiring annual expenditures of $ 15 million from the TSB projects account for FY 08 through FY 15 for the rail revitalization program are effective on July 1, 2006; and (4) the FY 05 transfer of $ 5 million for the rail projects and the provision carrying forward current funding are effective upon passage.

1. acquire at least 342 self-propelled rail cars for use on the New Haven Rail Line;

2. design and construct rail maintenance facilities to support the self-propelled rail cars;

3. purchase 25 transit buses;

4. design and construct operational improvements to Interstate 95 between Greenwich and North Stonington; and

5. in consultation with the TSB and the appropriate regional planning entities and councils of governments and elected officials, evaluate, design, and construct transportation improvements other than projects on Interstate 95.

The New Haven Line consists of the rail passenger service between New Haven and Grand Central Station in New York and includes the Danbury, Waterbury, and New Canaan branch lines in Connecticut. The bill designates the design, development, construction, and acquisition of the maintenance facilities, rail cars, and related equipment for use on the New Haven Line as the "New Haven Line Revitalization Program. "

The bill allows the State Bond Commission to authorize issuance of a total of $ 485. 65 million in Special Tax Obligation (STO) bonds over the period from July 1, 2005 through July 1, 2014 for rail rolling stock and maintenance facilities, including rights-of-way, other property acquisition, and related projects. The annual amounts available for these purposes are: $ 26. 45 million on July 1, 2005; $ 32. 8 million on July 1, 2006; $ 49. 4 million on July 1, 2007; $ 55 million on July 1, 2008 and again on July 1, 2009; $ 54 million on July 1, 2010, July 1, 2011, July 1 2012, and July 1, 2013; and $ 51 million on July 1, 2014.

The bill determines the issuance of these bonds to be in furtherance of one or more of the purposes authorized for the use of special tax obligation bonds. It declares them to be special obligations of the state and thus payable only from the revenues pledged by law for repayment of STO bonds.

The commission may authorize the bonds only after it finds that (1) a request for authorization signed by the appropriate state officer department or agency has been filed with it and (2) any capital development impact statement, human services facility collocation statement, advisory report regarding the state conservation and development policies plan, and statement regarding farmland that are required by law have been filed with it. The commission may authorize the bonds without finding that all the required reports and statements have been filed with it, if it has authorized its secretary to accept any required reports and statements on its behalf.

Any request for issuance of bonds must identify the project for which the bond proceeds are to be used and the recommendation of the person signing the request as to the extent to which federal, private, or other money currently or soon to be available for the project should be added to the bond proceeds. Any bond proceeds in excess of the aggregate costs of all authorized projects must be used in accordance with existing statutory requirements for such excess proceeds.

Bond Authorizations for Other Specified Transportation Projects (§§ 27-32)

The bill allows the Bond Commission to authorize issuance of a total of $ 344. 5 million in bonds for the period from July 1, 2005 through July 1, 2009 to be used as follows: (1) $ 187 million for operational improvements to Interstate 95 between Greenwich and North Stonington (including environmental assessment and planning and rights-of-way and property acquisition); $ 150 million for transportation system improvements other than on I-95 (including environmental assessment, planning, rights-of-way and property acquisition); and $ 7. 5 million for purchase of buses.

Of the $ 344. 5 million in total authorizations for these purposes, the bill makes $ 26. 5 million available on July 1, 2005; $ 48 million on July 1, 2006; $ 70 million on July 1, 2007; and $ 100 million on July 1, 2008 and July 1, 2009.

The requirements and stipulations for issuance of bonds described above also apply to the bonds authorized under these provisions as well.

The bill allows the State Bond Commission to authorize issuance of $ 136. 9 million in STO bonds for various transportation purposes in FY 06 and $ 144. 6 million in STO bonds for various transportation purposes in FY 07. It also authorizes up to $ 49 million in STO bonds, effective May 1, 2006, for capital resurfacing and related construction projects in FY 07.

The requirements and stipulations for issuance of bonds described above also apply to the bonds authorized under these provisions as well.

The FY 06 and FY 07 authorizations for transportation purposes must be allocated to specific programs as shown in the following table.

The bill requires the transportation commissioner to prepare a report on use of the STO bonds authorized for general transportation purposes by the bill for FY 06 and FY 07 (except for the capital resurfacing authorization) and submit it to the Finance, Revenue and Bonding, Transportation, and Appropriations committees by February 1, 2006 and annually thereafter. The report must include (1) information on any cost overruns for all projects financed with STO bonds in the five years preceding the report date and (2) an accounting of the unallocated balances remaining on all STO bonds authorized for transportation purposes.

For the seven-and-one-half year period beginning on January 1, 2008 and ending on July 1, 2015, the bill imposes a surcharge of $ 1 per trip on each ticket for travel on the New Haven Line and its branches that either originates or terminates in Connecticut. The transportation commissioner must determine by regulation how the surcharge must be applied to weekly and monthly commutation tickets.

The bill creates a restricted capital project account to be known as the New Haven Line revitalization account into which the proceeds of the ticket surcharge and any other funds required by law to be deposited into the account must be placed. Funds in the account may only be used for the rail cars, maintenance facilities, and related equipment designated as the New Haven Line revitalization program.

The Office of Policy and Management (OPM) secretary must consult with the transportation commissioner and prepare an annual budget detailing how funds in the revitalization account must be spent in the next fiscal year. The commissioner may spend the money for the stated purposes once the governor approves the annual budget.

Once the trip surcharge terminates, the treasurer may use any funds remaining in the restricted account, after paying authorized capital costs, to retire bonds issued pursuant to the revitalization program as she deems appropriate.

The bill increases the quarterly gross earnings tax on companies that distribute certain products in Connecticut that contain or are made from petroleum or a petroleum derivative from the current 5% to:

The bill increases the amounts of the petroleum products tax receipts attributable to the sale of motor vehicle fuel that the revenue services commissioner must deposit in the Special Transportation Fund from the current $ 5. 25 million per calendar quarter to:

If for any calendar quarter petroleum products tax receipts are less than the total of amount required for the STF transfers and any other transfers required by law, the bill requires the revenue services commissioner to certify the amount of the shortfall to the State Treasurer who must then transfer an amount equal to the shortfall from the General fund to the STF.

TRANSFERS FROM THE SPECIAL TRANSPORTATION FUND TO THE TRANSPORTATION STRATEGY BOARD PROJECTS ACCOUNT AND ANNUAL EXPENDITURES FOR THE NEW HAVEN LINE REVITALIZATION PROGRAM (§§ 34-36, 38 & 43)

The bill requires a specific amount of funding to be transferred annually from the STF to the TSB projects account. It further directs a specified amount of funding from the TSB projects account to be included in the annual financing plan and spent on the New Haven Line Revitalization Program. The funds designated for the revitalization program must remain available until spent. These annual transfers and expenditures are shown in the table below.

FUNDING FOR ELDERLY AND DISABLED DEMAND RESPONSIVE (DIAL-A-RIDE) TRANSPORTATION PROGRAMS (§§ 37 & 39)

The bill requires the TSB to spend $ 5 million in FY 06 and $ 5 million in FY 07 for purposes of the state matching grant program for municipal demand responsive transportation programs for the disabled and those age 60 and older (dial-a-ride). It also removes the current requirement that this program be funded within available General Fund appropriations. It requires any funding allocated to a municipality that chooses not to apply for it to be returned to the TSB projects account in the STF instead of to the General Fund. The bill requires the funding to be included in the required annual financing plan and makes it available until it is expended. These funds may only be spent for grants to municipalities and administrative costs.

The dial-a-ride grant program was established by the legislature in 1999 to provide matching grants to municipalities based on an allocation formula that provides half of the municipality's apportionment based on its relative share of the state's elderly population and half based on its relative square mileage compared to the total area of the state. Municipalities must apply for the grants through a regional planning organization or transit district and must collaborate on service design to determine how to use the funding most effectively in the municipality and its surrounding region.

The bill allows the DOT to solicit bids or qualifications for equipment, materials, or service for any of the mandated projects funded under the bill (i. e. , rail revitalization, bus purchases, I-95 operational improvements and transportation improvements other than on I-95) at any time in the fiscal year, even if all the required funds may not be available for expenditure until later in the same or a succeeding fiscal year.

The bill requires the transportation commissioner to report annually by September 1 to the governor, the TSB, and the Transportation and Finance, Revenue and Bonding committees on (1) the status of the New Haven Line Revitalization Program, (2) the capital needs of the state's passenger rail services, and (3) the status of the other projects the bill mandates (bus purchases, operational improvements on I-95, and transportation improvements other than those on I-95).

The bill carries forward the unexpended balance of $ 150,000 transferred to the DOT from the TSB Projects Account in 2004 and makes these funds available for expenditure during FY 06 for implementing increased motorist assistance services recommended by the TSB.

The bill also carries forward the unexpended balance of funds appropriated to DOT for the TSB during the last four years and makes them available for expenditure during FY 06 and FY 07 for TSB's programs and purposes.

REVISIONS TO TSB PROJECTS ACCOUNT AND RELATED OPERATIONS (§§ 42-43, 48-50, 52-53)

In 2003, the legislature created the TSB projects account as the repository for certain motor vehicle-related fee increases, known as "incremental revenues," that were made available to the TSB to fund several TSB strategy projects identified in the legislation as priority projects. The revenue from these incremental fee increases went into the Special Transportation Fund, but had to be set aside in the projects account. The legislation also authorized more than $ 264 million in bonding over a 10-year period for use in funding the projects and programs recommended by the TSB and identified as transportation strategy related projects. The bonds are backed by the dedicated incremental revenue stream going into the TSB projects account.

The bill eliminates the separate incremental revenue stream going to the TSB projects account and combines the receipts from these fees with all of the other revenue in the Special Transportation Fund. The TSB projects account continues to exist but funds are transferred to it annually as explained above. The bill also eliminates the $ 264 million in bonding authorizations that were supported by the dedication of the incremental revenues.

The bill makes several changes to other TSB-related statutes that reflect the elimination of the dedicated incremental revenues and the associated bonding authority. These include modifying requirements for the annual financing plan DOT must prepare in consultation with OPM, the state treasurer, and TSB and eliminating references to the purposes for which Special Tax Obligation bonds may be used that were specific to the separate bonding authority supported by the incremental revenue stream.

Currently, the TSB must coordinate preparation of a performance report on its projects that require accompanying economic development plans. By law, transportation strategy projects that require spending more than $ 1 million must be accompanied by an economic development plan. The bill prohibits projects undertaken as part of the New Haven Line Revitalization Program from being considered TSB projects and thus exempts them from these requirements.


*STO Bond Authorizations for General Transportation Purposes*
Department of Transportation Programs	FY 06 ($ million)	FY 07 ($ million)
Interstate Highway Program	$ 11. 5	$ 11. 5
Urban Systems Projects	$ 8. 0	$ 8. 0
Intrastate Highway Program	$ 22. 5	$ 28. 1
Soil, water supply and groundwater remediation at or near various maintenance facilities and former disposal areas	$ 6. 0	$ 6. 0
State bridge improvement, rehabilitation, and replacement projects	$ 20. 0	$ 20. 0
Reconstruction and improvements to the warehouse and State Pier in New London, including site improvements and improvements to ferry slips	$ 0. 2	$ 0. 3
Development and improvement to general aviation airport facilities (other than Bradley International Airport), including grants-in-aid to municipal airports	$ 2. 0	$ 2. 0
Bus and rail facilities and equipment, including rights-of-way, other property acquisition, and related projects	$ 34. 0	$ 34. 0
Department of Transportation facilities	$ 6. 4	$ 6. 4
Costs of issuing STO bonds and debt service reserve	$ 26. 3	$ 28. 3
Total Authorizations	$ 136. 9	$ 144. 6

*Fiscal Year*	*Funds to be Transferred from STF to TSB Projects Account*	*Funds to be Spent From TSB Projects Account on New Haven Line Revitalization Program Projects*
FY 05	-----	$ 5 million
FY 06	$ 25. 3 million	$ 20 million
FY 07	$ 20. 3 million	$ 15 million
FY 08-FY 15	$ 15. 3 million	$ 15 million
FY 16 and After	$ 300,000	-----