OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

http: //www. cga. ct. gov/ofa

sHB-5215

AN ACT PROMOTING REUSABLE SHOPPING BAGS.

OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 10 $

FY 11 $

Department of Environmental Protection

GF - See Below

None

See Below

Department of Revenue Services

GF - Revenue Gain

10 million

20 million

Department of Revenue Services

GF - Cost

131,000

262,000

Comptroller Misc. Accounts (Fringe Benefits)1

GF - Cost

25,652

51,305

Note: GF=General Fund

Municipal Impact:

Municipalities

Effect

FY 10 $

FY 11 $

Various Municipalities

Revenue Gain

None

See Below

Explanation

The bill is estimated to result in a revenue gain to the General Fund from a five cent disposable bag fee of approximately $10 million in FY 10 and $20 million in FY 11. The bill requires retailers to collect a five cent fee for each disposable bag they distribute. The retailers must submit the fee proceeds to the Department of Revenue Services (DRS).

The bill is anticipated to result in administrative costs to DRS of approximately $156,652 ($100,875 salary, $25,652 fringe benefits) in FY 10 and $313,305 ($201,750 salary, $51,305 fringe benefits) in FY 11. Three new full time employees (2 audit, 1 operations) would be required to audit and ensure compliance of the five cent fee.

Section 1 establishes the recycling initiatives account as a separate, nonlapsing account within the General Fund. The Department of Environmental Protection (DEP) would use this account for grant programs established in Sections 3 and 4.

Section 3 establishes a municipal recycling matching grant program by 1/1/11, to award grants to various municipalities to implement recycling programs or to improve existing recycling programs using the account established under Section 1 of the bill. Each municipal grant would not exceed $200,000, would not be more than 50% of the estimated cost of the implementation or improvement of each municipal recycling program, and each municipality would receive only one grant. The total amount of grants awarded annually would not exceed $4. 6 million.

Section 4 requires DEP by 1/1/11, to establish a municipal recycling receptacle grant program to award grants to various municipalities to purchase recycling receptacles for certain public spaces and municipal buildings where trash receptacles are located. Each grant would not exceed $5,000 and each municipality would only be eligible for one grant. The total amount of grants awarded annually would not exceed $250,000.

Section 3 also allows DEP to retain $200,000 annually for administrative expenses related to the grant programs established in Sections 3 and 4 of the bill.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to the number of municipalities who apply and who are approved for the grant programs. The revenue gain identified above for various municipalities would not continue into the future since each municipality would only receive one grant. Lastly, the revenue gain to the General Fund identified above may significantly decrease in the out years if alternatives to disposable bags are used.

1 The fringe benefit costs for state employees are budgeted centrally in the Miscellaneous Accounts administered by the Comptroller on an actual cost basis. The following is provided for estimated costs associated with additional personnel. The estimated non-pension fringe benefit rate as a percentage of payroll is 25. 43%. Fringe benefit costs for new positions do not initially include pension costs as the state's pension contribution is based upon the 6/30/08 actuarial valuation for the State Employees Retirement System (SERS) which certifies the contribution for FY 10 and FY 11. Therefore, new positions will not impact the state's pension contribution until FY 12 after the next scheduled certification on 6/30/2010.