OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

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

HB-6290

AN ACT CONCERNING ECONOMIC DEVELOPMENT PROGRAMS FOR CERTAIN AEROSPACE AND DEFENSE PLANTS.

OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 11 $

FY 12 $

FY 13 $

Policy & Mgmt. , Off.

GF - None

None

None

None

Department of Revenue Services

GF - Potential Revenue Loss

None

85,000

85,000

Note: GF=General Fund

Municipal Impact:

Municipalities

Effect

FY 11 $

FY 12 $

FY 13 $

Various Municipalities

Revenue Impact

See Below

See Below

See Below

Explanation

This bill expands the eligibility of some business and property tax incentives to businesses occupying facilities in designated areas that have been affected by aerospace or defense plant closures. To the extent that a business locates in a facility within such a designated area, this results in: 1) a potential revenue loss to the General Fund from the corporation business tax of approximately $85,000 per year, and 2) a potential net grand list reduction for municipalities in the designated areas related to the property tax exemption for real property and manufacturing machinery and equipment.

Additionally, certain municipalities could potentially be eligible for partial reimbursement under the Distressed Municipalities grant in the Office of Policy and Management, and may experience a revenue gain. This does not result in a fiscal impact to the state, but may result in a decreased grant to all other municipalities as the grant is reduced on a pro rata basis if the appropriation is insufficient to fully fund the grant.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation.