AN ACT CONCERNING PUBLIC INVESTMENT COMMUNITIES

PA 07-10—SB 1261

Commerce Committee

AN ACT CONCERNING PUBLIC INVESTMENT COMMUNITIES

SUMMARY: By law, the Office of Policy and Management (OPM) prepares an annual index used to designate the state's most fiscally distressed towns (i. e. , public investment communities (PICs)). The designation originally qualified these towns for multi-purpose grants under a 1992 economic development program that was funded only once in 1993. But now, the legislature also uses the PIC designation as an eligibility criterion for several other programs.

This act eliminates the original grant and requires OPM to prepare the index using more recent demographic data. Instead of using data from three fiscal years before OPM awarded the original grant (i. e. , FY 90), the act requires OPM to use data from two fiscal years before it calculates the index (e. g. , FY 05 for the 2007 index).

It also (1) requires OPM to adjust a town's population estimate if more than 40% of its population resides in a state or federal institution and (2) provides a five-year grace period for towns that no longer meet the designation criteria, allowing them to remain eligible for grants under other programs.

EFFECTIVE DATE: July 1, 2007, except for the provision repealing the original PIC program, which takes effect upon passage.

POPULATION ESTIMATES

The act requires OPM to adjust a town's population estimate if more than 40% of its population resides in a state or federal institution. These people include those who are incarcerated or in custodial situations, including jails or prisons; hospitals or training schools; school, college, or university dormitories; or military bases. OPM must subtract the number of people residing in these institutions from the town's population estimate.

MAINTAINING PIC DESIGNATION

By law, OPM annually designates as PICs the 42 towns in the top quartile in a ranking of all towns from the most to least distressed. A town's rank can change from year to year. Consequently, a town's rank can fall below 42, causing it to lose its PIC designation, while another town's rank rises to or above that number.

Under the act, a town whose rank drops below 42 retains its PIC designation for five fiscal years without affecting the ranks of the other towns. Under prior law, these towns kept the PIC designation only for the original PIC grants. In practice, OPM maintained designations for five years, which allowed the towns and their residents and businesses to qualify for funds under other programs.

BACKGROUND

Preparing the PIC Index

By law, OPM prepares the annual PIC index by ranking towns based on residents' income, tax base and tax rates, share of residents who are unemployed, and share who receive temporary family assistance. It must use U. S. Census estimates of town population and per capita income.

Programs Using the PIC Designation as an Eligibility Criterion

Table 1 below lists and describes the programs using the PIC designation as an eligibility criterion and explains how it benefits PIC towns, their residents, or businesses located in these towns.

Table 1: Programs Using the PIC Designation

*Program*	*Citation*	*Description*	*Benefit to Town*
Urban Action Bonds	§4-66c	Funds for physical development projects based on project or town criteria.	Eligibility limited to projects in PICs, distressed municipalities, and state designated urban centers.
Community Economic Development Program	§8-240k-8-240n	Funds for small businesses and community projects creating jobs or physically improving distressed neighborhoods.	70% of funds must go to projects in PICs and targeted investment communities (i. e. , the 17 towns with enterprise zones).
Residential Mortgage Guarantee Program	§8-286	Loans to cover down payments on home mortgage loans financed by the Connecticut Housing Finance Authority.	Eligibility limited to people purchasing homes in PICs.
Malpractice Insurance Purchase Program	§ 19a-17m	Funds malpractice liability insurance for eligible health care professionals.	Eligibility limited to professionals providing services at community health care centers and other eligible sites in PICs.
Enterprise Corridor Zone Program	§ 32-80	State-reimbursed property tax exemptions and corporate business tax credits for eligible businesses building or expanding facilities and creating jobs in state-approved zones.	Eligibility for zones limited to groups of two or more contiguous towns that are PICs and distressed municipalities with fewer than 40,000 people. At least half of the towns must be located along the same major highway.

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