AN ACT ESTABLISHING A CONNECTICUT ECONOMIC RECOVERY PROGRAM.

OLR Bill Analysis

sSB 996

AN ACT ESTABLISHING A CONNECTICUT ECONOMIC RECOVERY PROGRAM.

SUMMARY:

This bill establishes a two-year Connecticut economic recovery program and authorizes up to $ 643. 7 million in general obligation (GO) bonds and $ 302,825,000 in special tax obligation (STO) bonds for program projects. The program and the authorizations are effective from July 1, 2009 through June 30, 2011.

The program provides funding for strategic capital investment projects to maintain and create jobs, improve state infrastructure, and to enable the state to compete effectively in the future. The program's “strategic components” are: housing, clean water, clean energy and energy conservation, higher education, transportation, a municipal block grant, a regional block grant, and a pool for projects sponsored by nonprofit entities. The bill authorizes separate bonding levels for each of the components and, for some components, specifies projects to be funded.

The bill requires the state agencies providing project funding to prioritize projects based on their readiness to start construction, capacity to retain or create jobs, and geographic distribution. Project sponsors must award contracts within 90 days after a funding allocation and start construction within 60 days after awarding contracts, with the option for one 14-day extension. These requirements do not apply to municipal block grant projects.

The bill establishes timetables for the State Bond Commission to consider allocating minimum percentages of the bond authorizations in the bill. The timetables are tied to state and municipal unemployment rates and require the governor to notify the Finance, Revenue and Bonding Committee chairpersons of the reasons the commission agendas do not include the minimum allocations.

EFFECTIVE DATE: July 1, 2009

ECONOMIC RECOVERY PROGRAM PROJECT PRIORITIES

The bill authorizes bonds for the eight strategic components of the program to be distributed through various state agencies. Agencies awarding funds under each component must prioritize the projects to receive funding based on (1) project readiness, (2) a demonstration by the project sponsor that it will retain or create jobs, and (3) the geographic distribution of all the projects under each program component.

PROJECT READINESS AND SCHEDULING REQUIREMENTS

Except for municipal block grant projects, all projects must meet the bill's scheduling and readiness requirements. To be eligible for a grant, a project's sponsor must show that:

1. the project site is under its control;

2. it has procured all required permits;

3. all planning and zoning issues are resolved;

4. financing, except for the economic recovery program grant, is in place;

5. project contracts can be bid and awarded within 90 days after program funding is allocated; and

6. the project can be under construction within 60 days after a project contract award.

The bill gives the state agency head awarding the funding discretion to grant, for good cause, one extension of up to 14 days to award the project contract. The 14-day extension also extends the deadline for starting construction by the same length of time.

Projects must meet these scheduling requirements. If a project fails to do so, the funding agency head may require the grantee to repay 5% of the grant amount. Projects in the higher education component are not subject to these penalties.

SPECIAL BOND ALLOCATION PROCEDURES

The bill establishes additional requirements for State Bond Commission consideration of economic recovery program projects. These requirements are tied to unemployment rates. The bill defines the unemployment rate as the seasonally adjusted rate determined by the Labor Department in the most recent Report on Local Area Unemployment Statistics.

The following additional requirements apply to the commission's consideration of projects in the housing, energy, clean water, transportation, and nonprofit components of the bill. If the state's unemployment rate is 7. 3% or higher when the bond commission holds its August 2009 meeting, and the commission's agenda for that meeting agenda does not include allocations for at least 20% of the projects in of each of these strategic components, the governor must notify the Finance, Revenue and Bonding Committee chairpersons, on or before the scheduled meeting date, of the reasons why. If the governor does not provide the required notice, the state treasurer must prepare an addendum to the agenda for the next meeting listing projects totaling at least 20% of each program component's authorization. The commission must vote on the addendum at the meeting.

Thereafter, the commission must consider allocating funds for at least 20% of projects in each of these components whenever the state unemployment rate increases by at least 0. 2% over the preceding month, or three months after the last meeting at which such allocations were on the agenda, whichever occurs first. If the required allocations do not appear on the agendas, the governor must again notify the Finance, Revenue and Bonding Committee of the reasons for not including them.

The bill applies a variation of the above procedures to the program's municipal and regional block grant projects. If less than 100% of these authorizations remain unallocated after the bond commission's September 2009 meeting, the governor must notify the Finance, Revenue and Bonding Committee chairpersons (1) why the funds have not been fully allocated and (2) of a plan for allocating the total amount authorized. The governor must provide this notice within five days after the September 2009 bond commission meeting date, whether or not the meeting is cancelled, and within five days after the date of any subsequent bond commission meeting as long as the municipal and regional block grant authorizations are not fully allocated.

The special allocation provisions do not apply to the higher education component projects. The commission has already approved funding for those projects under the UConn 2000 and Connecticut State University (CSU) 2020 laws.

STRATEGIC COMPONENTS

§ 2 — Housing Projects

The bill authorizes $ 100 million in GO bonds to the Department of Economic and Community Development (DECD) for grants and financing for:

1. renovating, modernizing, and restructuring state moderate rental family and elderly housing development and comparable projects,

2. supportive housing projects, and

3. projects eligible for assistance from the Housing Trust Fund.

Renovations must give priority to health and safety projects.

The projects listed in Table 1 eligible for Housing Trust Fund assistance are also eligible for assistance under this bill.

Table 1: Eligible Housing Projects

*Municipality*	*Project*
Bridgeport	Bijou Square
Bridgeport	Pequannock 2
Bristol	Dutton Heights
Griswold	American Legion Housing
Hamden	Highwood Square
Hartford	My Sister's Place
Manchester	Dye House
Manchester	Center Street Apartments
New Britain	Arch Street
New Britain	Corbin/Pinnacle Heights
New Haven	Fair Haven North
	Leeway Welton Apartments
	Quinnipiac Apartments
New London	Bates Wood
New London	Briarcliff
Norwalk	Fair Street
Norwalk	Wall Street Place
Norwich	Summitwoods II
Stamford	Harborsite
Stamford	58 Progress Drive
Waterbury	Country Village
Waterbury	Beggs Apartments
Westport	Hales Court
Willimantic	Downtown

§ 3 — Energy Projects

The bill authorizes $ 100 million in state GO bonds for the Office of Policy and Management (OPM) secretary to provide grants for:

1. clean energy and energy conservation projects;

2. projects addressing energy priorities and adopting emerging renewable energy and energy efficiency technologies;

3. projects that reduce fossil fuel emissions, decrease overall energy consumption, or improve efficiency in the transportation, building, and other energy-consuming sectors; and

4. energy programs.

Energy programs eligible for grants include the biomass, building technologies, federal energy management, geothermal technologies, hydrogen fuel cells and infrastructure, industrial technologies, solar energy technologies, vehicle technologies, wind and hydropower technologies, and weatherization and intergovernmental programs.

The bill earmarks $ 25 million of the authorization to the Department of Public Works for funding net project costs, or the balance after any available public or private incentives, for any energy services project resulting in increased efficiency measures in state buildings as required to meet statutory green building standards for state buildings.

§ 4 — Clean Water Projects

The bill authorizes $ 65 million to the Department of Environmental Protection (DEP) for grants to fund Clean Water Fund projects. Projects must meet both statutory Clean Water Fund requirements and the bill's scheduling and priority criteria.

§ 5 — Higher Education Projects

The bill authorizes $ 178. 7 million in GO bonds to the Department of Higher Education for projects at the University of Connecticut and CSU.

Of this authorization, the bill reserves $ 83. 7 million of the authorization for projects eligible for funding under the UConn 2000 program. It reserves $ 95 million for the CSU projects shown in Table 2.

Table 2: Connecticut State University Projects

*Grantee*	*For*	*Amount Authorized*
All universities	New and replacement equipment	$ 8,000,000
	Auxiliary service facilities, alterations and improvements	5,000,000
	Telecommunications infrastructure upgrades	2,500,000
	Land and property acquisition program	5,000,000
Central CSU	Code compliance and infrastructure improvements	3,099,000
	New classroom office building, development and construction	33,978,000
	East campus infrastructure development	13,244,000
Eastern CSU	Code compliance and infrastructure improvements	2,622,000
	Fine arts instructional center - design, construction, and equipment	12,000,000
	Athletic support building - development and construction	1,921,000
	New warehouse - construction	2,269,000
Southern CSU	Code compliance and infrastructure improvements	3,702,000
Western CSU	Code compliance and infrastructure improvements	1,665,000

Projects must meet the bill's scheduling requirements. If any UConn or CSU project cannot meet the requirements, the project need not be included in the economic recovery program.

The bill specifies that a project's receipt of, or failure to receive, funding through the economic recovery program does not affect its status as an authorized project under the UConn 2000 or the CSU 2020 infrastructure programs. Projects continue to be eligible for funding under those programs according to the procedures required by law.

§ 6 — Transportation Projects

The bill authorizes $ 302,725,000 in STO bonds to the Department of Transportation (DOT) for projects listed in Table 3.

Table 3: Dot Projects


*Project*	*Amount Authorized*
*Bureau of Engineering and Highway Operations*
Local road and bridge projects for which funds were appropriated but for which the governor reduced allotments during FY 09	$ 37,000,000
Roads, infrastructure, and improvements related to Rentschler Field in East Hartford	10,325,000
Tweed New Haven airport – renovations and improvements	5,000,000
Mattabeseck Bridge, Middlefield - improvements	250,000
Reconstruct Marion Avenue and Mt. Vernon Road in Southington	150,000
*Bureau of Public Transportation*
Construct rail maintenance facilities	250,000,000

§ 7 — Municipal Block Grant Projects

The bill authorizes $ 100 million in state GO bonds to the OPM secretary for municipal grants. Of the amount authorized, the secretary must distribute 40% according to statutory requirements for the Local Capital Improvement Program (LOCIP), 40% according to statutory requirements for the Town Aid Road (TAR) program, and 20% based on each municipality's unemployment rate as of July 1, 2009. Municipalities may use grants for any purpose allowable under the LOCIP and TAR programs.

§ 8 — Regional Block Grant Projects

The bill authorizes $ 50 million in GO bonds to the OPM secretary for distribution to regional planning organizations (RPOs) on a per capita basis. RPOs may use the funds for projects (1) on the approved regional transportation improvement plan or (2) eligible for funding under the Small Town Economic Assistance Program (STEAP). Projects must also be approved by at least 60% of the chief elected officials of the municipalities within the RPO.

Projects must meet the bill's scheduling and priority requirements. The bill requires the OPM secretary to redistribute the amount set aside for any RPO that has no project that meets the bill's eligibility criteria.

§ 9 — Nonprofit Organization Projects

The bill authorizes a total of $ 50 million in GO bond for the projects listed in Table 4. If funds remain after money for the Table 4 projects is distributed, the bill allows the DECD to provide grants to any project that (1) is sponsored by a nonprofit agency, (2) was included in a previous bond authorization, and (3) meets the scheduling and priority requirements that apply to other projects the bill authorizes.

Table 4: Nonprofit Organization Projects


*Town*	*Grantee*	*For*	*Amount Authorized*
*Commission on Culture & Tourism*
Bridgeport	Barnum Museum Foundation, Inc.	Barnum Museum - renovations	$ 1,250,000
Bridgeport	Discovery Museum	Renovations	800,000
Coventry	Antiquarian & Landmarks Foundation	Nathan Hale Museum and Family Homestead Development Plan	1,000,000
Danbury	Stanley L. Richter Association for the Arts	Roof repair, expansion, and Americans with Disabilities Act (ADA) improvements	300,000
Darien	Darien Arts Center	Infrastructure renewal projects	50,000
East Hampton	Chatham Historical Society	Roof replacement and infrastructure improvements	50,000
Hartford	Artists Collective, Inc.	Infrastructure repairs and improvements to existing structure	800,000
Meriden	Gallery 53	Structural improvements	50,000
Middletown	Kidcity Children's Museum	Construct new building	1,000,000
Milford	Milford Historical Society	Restore and renovate historic property	50,000
Norwalk	Stepping Stones Museum for Children	Expand facility	400,000
Norwalk	Lockwood-Mathews Mansion Museum	Infrastructure renewal projects	1,000,000
Old Lyme	Lyme Art Association	Renovate gallery building in Old Lyme	100,000
*Department of Economic and Community Development*
East Haddam	Goodspeed Opera House Foundation, Inc.	Build new facility in East Haddam	10,000,000
Hartford	Craftery Gallery, Inc.	Purchase a building and make needed alterations and renovations	50,000
Hartford	Neighborhoods of Hartford, Inc.	Hartford Rising Star Blocks of Pride Program	500,000
*Department of Mental Health and Addiction Services*
Milford	Bridges of Milford	Acquire property and expand facility	600,000
New Haven	Fellowship Place	Purchases, repairs, alterations, and improvements	1,000,000
Meriden	Rushford Behavioral Health Services	Renovations and roof replacement	72,222
*Department of Social Services*
Branford	Connecticut Hospice, inc. and the John D. Thompson Hospice Institute for Education, Training and Research	Acquire and renovate a hospice facility in Branford	1,500,000
Danbury	Greater Danbury AIDS project	Purchase buildings	1,000,000
East Hartford	East Hartford YMCA	Capital building improvements	300,000
Hamden	Interfaith Cooperative Ministries of New Haven	Aging-at-home pilot program in Hamden	100,000
Hartford	Mi Casa	Wellness Center - renovations and acquiring equipment	350,000
Meriden/ Wallingford	American Red Cross, Meriden/Wallingford branch	Building renovations, including ventilation, plumbing, and wiring systems	50,000
New Britain	Prudence Crandall Center, Inc.	Rose Hill Center building renovations	1,000,000
Waterbury	Casa Bienvenita	Property acquisition	3,000,000
Waterbury	Rivera Hughes Foundation	Property acquisition	1,000,000
Waterbury	New Opportunities, Inc.	Slocum Childhood Center – classroom and administrative space renovation	500,000
Waterbury	New Opportunities, Inc.	Human Services Center, new heating system	300,000
*Education Department*
	Challenger Learning Center of Southeastern Connecticut	Construct building	850,000
*Department of Children and Families*
New Britain	Pathways-Senderos Teen Pregnancy Prevention Center	Acquire new facility	875,000
New Haven	Youth Continuum	Renovations and code improvements	500,000

BACKGROUND

Related Bill

sSB 833, An Act Authorizing Bonds of the State for Capital Improvements and Other Purposes, favorably reported by the Finance, Revenue and Bonding Committee, cancels many prior bond authorizations, including authorizations for all the nonprofit organization projects that this bill reauthorizes (see Table 4).

COMMITTEE ACTION

Finance, Revenue and Bonding Committee

Joint Favorable Substitute

Yea

Nay

(04/16/2009)