June 15, 2010
BRADLEY AIRPORT DEVELOPMENT ZONE
By: James Orlando, Legislative Analyst
You asked if the Bradley Airport Development Zone act (PA 10-98) designates the affected towns as “distressed municipalities” and for the significance of that designation. You also asked for the legislative intent behind the act's effective date.
PA 10-98 establishes the Bradley Airport Development Zone (BADZ), comprised of specified census blocks within the towns of East Granby, Suffield, Windsor, and Windsor Locks in areas around Bradley International Airport. The act extends enterprise zone property tax exemptions and corporation business tax credits to manufacturers and other specified businesses that develop or acquire property in the BADZ and create jobs.
The act designates the census blocks within the BADZ as “distressed municipalities.” This designation qualifies certain projects within the zone for other economic assistance, including housing, economic development, open space acquisition, and brownfield clean-up funds.
The act is effective October 1, 2011 and (1) the property tax exemptions apply to assessment years beginning on or after October 1, 2012 and (2) the corporation business tax credit applies to income years beginning on or after January 1, 2013. There is little direct evidence of the legislative intent behind the act's effective date. In response to questioning by Senator McKinney about the bill's fiscal impact and related matters during floor debate, Senator LeBeau (co-chair of the Commerce Committee) indicated that the delay was not only for fiscal purposes, but to give the affected municipalities time to plan:
that's what putting this out does, not just to put off the fiscal note . . . but to allow these communities to get together, to get with the Bradley board of directors and to work together to help really create a dynamic enterprise development zone around Bradley Field (Senate debate, April 22, 2010).
DISTRESSED MUNICIPALITY DESIGNATION
The Department of Economic and Community Development (DECD) commissioner annually scores and ranks towns based on demographic and economic distress criteria and designates the 25 towns with the highest scores as distressed (CGS § 32-9p(b)). The legislature can also designate a particular area as a distressed municipality. For example, the law designates enterprise zones as distressed municipalities (CGS § 32-70).
PA 10-98 amends the statutory definition of “distressed municipality” to include the portions of the towns containing the BADZ created by the act. By doing so, the act extends other types of assistance (see below) in addition to the property tax exemptions and corporation business tax credits for businesses developing property and creating jobs in the zone.
DISTRESSED MUNICIPALITY BENEFITS
Open Space and Watershed Land Acquisition Program
Distressed municipalities qualify for grants to acquire land for open space and restore and protect natural features or habitat of open spaces they already own (CGS § 7-131g). (Targeted investment communities, which are those municipalities with a designated enterprise zone, also qualify for these grants.) The Department of Environmental Protection (DEP) administers the grants, which can cover up to 75% of the acquired land's fair market value or 50% of the project's costs for restoration, enhancement, or protection of resources. All towns and nonprofit land conservation organizations qualify for other grants for purchasing open space land or permanent interests in it.
Urban Sites Remedial Action Program
Under this program, DECD provides funds for cleaning up environmentally contaminated sites in distressed municipalities and targeted investment communities. DECD can use the funds to identify, evaluate, and remediate commercial and industrial sites that are most likely to be redeveloped after they are cleaned.
The DECD commissioner selects the sites in consultation with the DEP commissioner based on statutory criteria. These are:
1. the estimated cost and complexity of evaluating the site,
2. the estimated schedule and cost for cleaning up the site,
3. the extent to which the restored site will benefit the state's economy,
4. whether the site would be remediated absent the program's assistance, and
5. any other factors the commissioners believe are relevant (CGS § 22a-133m).
Urban Act Program
The Urban Act Program provides funds for community conservation and development in urban areas. Projects qualify for Urban Act Program funding if they are located in a distressed municipality and they meet the broad eligibility criteria in CGS § 4-66c(c).
Community housing development corporations (CHDCs) can set higher income limits for state-funded housing projects located in distressed municipalities. Most state-funded housing projects are limited to people earning no more than 80% of the area median income (AMI). But those developed by CHDCs in distressed municipalities can set the limits at 250% of AMI (CGS § 8-218).
The law limiting state expenditures exempts current or increased expenditures for grant programs serving distressed municipalities that were operating on July 1, 1991 (CGS § 2-33a).