OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

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

EMERGENCY CERTIFICATION

SB-1401

AN ACT ESTABLISHING THE CONNECTICUT BIOSCIENCE COLLABORATION PROGRAM.

OFA Fiscal Note

State Impact: See Below

Municipal Impact: See Below

Explanation

The bill: (1) establishes the Connecticut Bioscience Collaboration Loan Program under Connecticut Innovations, Inc. and (2) authorizes the issuance of $290. 685 million in new General Obligation (GO) bonds for the program between FY 12 and FY 21. The total General Fund debt service cost for principal and interest payments to bond $290. 685 million over 20 years, assuming a 5. 0% interest rate, is $443. 3 million (comprised of $152. 6 million in interest and $290. 685 in principal).

The table below shows the estimated General Fund debt service cost between FY 13 and FY 15. There is no fiscal impact in FY 12 because it is assumed that none of the GO bonds authorized in the bill will be issued before January 1, 20121.

Estimated General Fund Debt Service Cost between FY 12 and FY 15

($-millions)

 

FY 12

FY 13

FY 14

FY 15

General Fund Debt Service

0. 0

5. 5

13. 2

17. 8

The table below shows the amount authorized for each year:

Annual GO Bond Authorizations for the CT Bioscience Loan Program

Fiscal Year

Amount

($-millions)

FY 12

34. 162

FY 13

85. 113

FY 14

59. 728

FY 15

19. 669

FY 16

21. 425

FY 17

21. 108

FY 18

15. 820

FY 19

12. 525

FY 20

10. 565

FY 21

10. 570

Total

290. 685

The municipal fiscal impact to Farmington's grand list is uncertain at this time because it depends on when the building's title is transferred from the state to Jackson Lab.

If the title is transferred to Jackson Lab before construction begins, Farmington would not receive any PILOT payment for the building. However, Farmington would continue to receive a payment for the land on which the building is located.

However, if the state holds title to the building until construction is completed or some later date, Farmington would receive a PILOT payment for the building (phased in over the number of years it takes to complete construction). After construction is complete, Farmington would receive a PILOT payment for the building for as long as the state holds the title to it. It is estimated that the PILOT payment for the completed building is approximately $700,000.

Background

The funds authorized in this bill are intended to provide funding for a research facility that will be built on state-owned land in Farmington, where the University of Connecticut Health Center is located. The research facility will not be owned or operated by the state.

During the 2011 session, the legislature passed PA 11-75, An Act Concerning the University of Connecticut Health Center, which modified prior GO bond authorizations and provided additional funding for infrastructure improvements and additions at the Health Center (see table below).

GO Bond Authorizations for the University of Connecticut Health Center

($-millions)

Purpose

After

PA 11-75

CLAC Reno Biosafety Level 3 Lab

14. 0

Deferred Maintenance/Code/ADA

50. 0

Dental School Renovation

5. 0

Equipment, Library, Telecom

75. 0

Library/Computer Center Reno

5. 0

Main Building Reno

125. 0

Med School Academic Bldg Reno

9. 0

Parking Garage

8. 4

Research Tower

60. 0

Support Building Addition/Reno

4. 0

Health Center New Construction

394. 9

Planning and design costs

25. 0

Total

775. 3

The preceding Fiscal Impact statement is prepared for the benefit of the members of the General Assembly, solely for the purposes of information, summarization and explanation and does not represent the intent of the General Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of informational sources, including the analyst's professional knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

1 Since debt service payments begin six months after bonds are issued, the first payment on bonds issued after January 1, 2012 would be due in FY 13, which begins on July 1, 2011.