You asked us to summarize the laws allowing municipalities to collaborate on economic development.

Reducing costs, generating revenues, and creating businesses and jobs are the desired outcomes of many economic development laws, including those authorizing collaborative municipal actions. There are other outcomes, such as eliminating slum and blight, establishing and maintaining viable urban communities, and improving infrastructure, and we included them, too. As Attachment 1 shows, some of the laws intend more than one outcome.

We divided the collaborative economic development laws into two groups. One group allows municipalities to organize themselves for collaborative action. These allow municipalities to establish regional economic development commissions or form agreements jointly to deliver a service or perform a function. One law authorizes state grants for municipalities that regionally deliver services.

The other group authorizes different economic development activities that municipalities may implement separately or jointly. These activities encompass:

1. acquiring and developing slum or blighted property or doing other things to improve urban conditions;

2. allowing municipalities, acting through their respective regional planning organization, to develop infrastructure benefiting the region;

3. allowing municipalities jointly to issue bonds to finance projects and share the property tax revenue they generate; and

4. allowing them to acquire and improve land for developing business facilities.

Municipalities can collaborate on economic development in several ways. The law allows two or more municipalities jointly to track economic conditions and trends and recommend how they can improve their economies. CGS § 7-137 allows them to adopt ordinances establishing a regional economic development commission exercising the same powers and duties as local commissions. The local commissions must jointly determine the regional commission's membership.

Municipalities may jointly plan and implement economic development programs and projects under other statutes that authorize a wide range of interlocal activities. Among other things, CGS § 7-339a-7-339l allows municipalities to enter into interlocal agreements to provide redevelopment services and market their region's advantages. The statutes specify the process for entering into these agreements.

Municipalities' authority to act collaboratively is much broader under CGS § 7-148cc. That statute allows municipalities jointly to perform any function they can perform on their own under any statute, special act, or charter. It allows them to do so by adopting an agreement the same way they adopt ordinances or budgets. Participating municipalities must renew the agreement every five years.

Lastly, municipalities qualify for state funds under CGS § 4-124s regionally to deliver a service. But they may access these funds only through their respective regional planning organizations. The statute specifies the process and criteria for accessing the funds.

The statutes authorizing single municipalities to acquire, improve, and transfer property allow them to do so collaboratively. The redevelopment statutes allow them to do these through a regional or metropolitan planning agency, which may exercise the same powers as local redevelopment agencies (CGS § 8-139). Municipalities may create the agency by concurrent action of their respective legislative bodies.

The community development statutes allow municipalities to accept federal community development block grant funds and comply with the rules governing their use. They authorize municipalities jointly to implement community development activities under an agreement that must, among other things, specify how they will share the associated costs and revenues (CGS § 8-169j).

The regional economic development statutes represent a different approach to collaborative economic development. While the redevelopment and community development statutes focus on municipalities, the regional economic development statutes focus on regional organizations operating on municipalities' behalf. They authorize competitive grants to help regional economic development commissions and regional planning organizations construct infrastructure that benefits a region's economy (CGS § 32-328).

The statutes specify the procedure for awarding the grants. The regional entities must prepare a plan listing the proposed infrastructure projects in rank order. The economic and community development commissioner must approve the proposed projects based on statutory criteria that include diversifying, stabilizing, or developing the region's economy. The amount of funds she can provide for a project depends on its location. It ranges from up to 90% funding for projects in state-designated targeted investment communities to 66.6% for projects in regions without such communities.

Although the statutes governing this program are still on the books, the legislature has not authorized bonds for it since its inception in 1993.

The state provides bond funds to municipalities for planning and implementing some economic development projects meeting state criteria. Other statutes also allow municipalities to issue their own bonds to fund projects. CGS § 7-136n allows them to do so jointly to fund any type of project, not just economic development. It specifies the conditions and procedures for issuing these bonds.

Bond-funded economic development projects often involve constructing, expanding, or rehabilitating business facilities, activities that increase a municipality's tax base and generate new revenues. This factor could prevent municipalities from collaborating on a project because the new property tax revenue it generates benefits only the municipality where the project is located.

CGS §7-148bb addresses this barrier by allowing two or more municipalities to share property tax revenue. Those that choose to do so must adopt an agreement endorsed by each participating municipality's legislative body. Among other things, the agreement must identify the source of the shared revenue and describe how the municipalities will collect and share it.

Creating new businesses and jobs is an explicit goal of many state and local economic development programs, including the Department of Economic and Community Development's Manufacturing Assistance Act. That program provides financial assistance to businesses and municipalities. Municipalities can use the assistance to acquire land and construct the infrastructure needed to support business projects. The amount of state assistance depends on several factors, including the number of municipalities sponsoring the project. As Table 1 shows, the funding level increases when two or more municipalities sponsor a project. [Note to AA: Table was cut and pasted from another document.]

Municipalities can acquire and develop land for business projects without state funds. CGS §§ 8-186 to 8-200b allows them to do so separately or jointly. Either way, they must prepare a plan identifying the parcels they intend to acquire and develop. They may also issue bonds to implement the plan. The statute specifies the process for preparing plans; acquiring, developing, and conveying property; and issuing bonds. CGS § 8-196 specifically allows municipalities to do these things jointly if their respective legislative bodies approve.

JR:ts