OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

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

sSB-29

AN ACT AUTHORIZING AND ADJUSTING BONDS OF THE STATE FOR CAPITAL IMPROVEMENTS, TRANSPORTATION AND OTHER PURPOSES.

As Amended by Senate "A" (LCO 5514), Senate "B" (LCO 5607)

Senate Calendar No.: 441


OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 15 $

FY 16 $

Treasurer, Debt Serv.

GF - Cost

See Below

See Below

Treasurer, Debt Serv.

TF - Cost

See Below

See Below

Municipal Impact: None

Explanation

Municipal Impact: None

Explanation

The bill authorizes a total of $968.7 million in new General Obligation (GO) bonds between FY 14 and FY 24 and cancels $33.8 million in previously authorized GO bonds. Table 1 summarizes the new GO authorizations by fiscal year and the debt service impact to the General Fund.

Table 1: New GO Bond Authorization and Estimated Debt Service Cost $ millions

Fiscal Year

Authorization Amount

Total Debt Service Cost*

Interest

Principal

FY 14

8.82

13.45

4.63

8.82

FY 15

806.41

1,229.77

423.36

806.41

FY 16

43.50

66.34

22.84

43.50

FY 17

20.00

106.75

10.50

20.00

FY 18

20.00

30.50

10.50

20.00

FY 19

20.00

30.50

10.50

20.00

FY 20

10.00

15.25

5.25

10.00

FY 21

10.00

15.25

5.25

10.00

FY 22

10.00

15.25

5.25

10.00

FY 23

10.00

15.25

5.25

10.00

FY 24

10.00

15.25

5.25

10.00

TOTAL

968.73

1,553.56

508.58

968.73

*Figures assume that bonds are issued at 5.0% over 20 year term

The bill also authorizes $77.55 million in new Special Tax Obligation (STO) bonds in FY 15 and cancels $60.0 million in STO bonds. The fiscal impact of the new authorizations is summarized in Table 2.

Table 2: New STO Bond Authorization and Estimated Debt Service Cost $ millions

Fiscal Year

Authorization Amount

Total Debt Service Cost*

Interest

Principal

FY 15

77.55

129.79

52.24

77.55

*Figures assume that bonds are issued at 5.5% over 20 year term

The bill also does the following:

1. It establishes a new grant-in-aid program for eligible drinking water projects approved by the Department of Public Health (DPH) under the Drinking Water State Revolving Fund (DWSRF) program and funds it with a $50 million GO bond authorization in FY 15. This has no administrative cost impact on DPH because DWSRF is an established DPH program.

2. Regenerative Medicine Research Fund (RMRF) – The bill renames the Stem Cell Research Fund (SCRF) to the RMRF and expands the type of research eligible for grants-in-aid from the Fund to include regenerative medicine research, as defined in the bill.

Section 23 allows up to 4.0% of the authorized funding in FY 15 for the RMRF to be reimbursed to Connecticut Innovations, Inc. (CII) for administrative expenses.

Sections 32 – 35 and 40 renames the Stem Cell Research Fund (SCRF) to the Regenerative Medicine Research Fund (RMRF) and expands the type of research eligible for grants-in-aid from the Fund to include regenerative medicine research, as defined in the bill. Section 23 allows up to 4.0% of the authorized funding in FY 15 for the RMRF to be reimbursed to Connecticut Innovations, Inc. (CII) for administrative expenses.

Sections 36, 38 and 39 eliminate reimbursements provided to CII related to the administration of the Connecticut Bioscience Innovation Fund (CBIF).[1][1]

HB 5596 provides $500,000 to CII in FY 15 through a transfer from the Tobacco Settlement Proceeds for administrative and peer review costs associated with RMRF and the CBIF.

Any additional costs regarding the administration of both the RMRF and the CBIF beyond the funding provided under this bill and HB 5596 will be incurred by CII.[2][2]

Section 37 requires the members of the advisory committee of the CBIF to be deemed public officials and adhere to the code of ethics for public officials. There is no fiscal impact.

3. Connecticut Manufacturing Innovation Fund - Sections 47 – 49 establish the Connecticut Manufacturing Innovation Fund (CMIF) as a non-lapsing fund, separate from the General Fund. The bill allows up to 5.0% of the allotted funding in the operations budget for each fiscal year to be used for administrative expenses. Under the bill, the Department of Economic and Community Development (DECD) must prepare the operating and capital budget for the CMIF to be approved by the CMIF advisory board. It is therefore anticipated that DECD, as the administrator of the CMIF, will include a reimbursement in the operating budget sufficient to cover any administrative costs incurred.

4. CSCU 2020 Infrastructure Renewal Program – Sections 50 - 58 authorize a total of $103.5 million in General Obligation bonds ($80.0 million in FY 15 and $23.5 million in FY 16).

5. Town Aid Road (TAR) Program - The bill changes the funding source for FY 15 TAR grants-in-aid to municipalities by cancelling $60 million in STO bonds and authorizing $60 million in GO bonds under the Department of Transportation. The change is necessary because the IRS limits the amount of tax-exempt bonds that may be issued for working capital3 to five percent of the amount issued. The $60 million in TAR funding exceeds five percent of the $600 million anticipated total STO bond issuance for FY 15 so the bonds would have to be issued at a higher taxable interest rate. Using GO bonds to fund TAR remedies the problem because total annual GO issuance is much larger and could absorb the $60 million TAR authorization and still maintain the tax-exempt status of the GO bonds.

6. It makes technical corrections to prior bond language, restores three bond authorizations for the Department of Administrative Services, and cancels three invalid GO bond authorizations under the Department of Economic and Community Development.

Senate “A” strikes the file copy. It authorizes a total of $949.1 million in new General Obligation (GO) bonds between FY 14 and FY 24 and cancels $30.8 million in previously authorized GO bonds. It also authorizes $77.6 million in new Special Tax Obligation (STO) bonds in FY 15 and cancels $60.0 million in STO bonds.

Senate “B” authorizes $19.6 million in GO bonds in FY 15 and cancels $3.0 in GO bonds.

Further Explanation

Table 3 lists new General Obligation (GO) bond authorizations for FY 14 and FY 15, organized by agency, new Special Tax Obligation (STO) bond authorizations for FY 15 and other provisions in the bill.

Table 3: Revisions to FY 15 Bond Authorizations

Act/Section

Agency/Description

FY 14

Amount $

FY 15

Amount $

GO Bond Authorizations

Office of Legislative Management

Sec. 2(a)(1)

Information technology updates, replacements and improvements, replacement of various equipment in the Capitol complex, including updated technology for the Office of State Capitol Police, renovations and repairs and minor capital improvements at the Capitol complex and the Old State House

-

4,892,200

Sec. 2(a)(2)

Production and studio equipment for the Connecticut Network

-

3,230,000

Office of Governmental Accountability 

Sec. 2(b)

Information technology improvements

-

1,000,000

Office of the State Comptroller

Sec. 2(c)(1)

Enhancements and upgrades to the CORE financial system for the retirement module

-

50,000,000

Sec. 2(c)(2)

Enhancements and upgrades to the CoreCT HR system at the University of Connecticut

-

7,000,000

Connecticut Public Broadcasting Network (Comptroller's Office)

Sec. 9(a)

Grant-in-aid to the Connecticut Public Broadcasting Network for transmission, broadcast, production and information technology equipment

-

3,300,000

Office of Policy and Management

Sec. 2(d)

Transit-oriented development and predevelopment activities

-

7,000,000

Sec. 78

Information technology capital investment program. PA 13-239, Sec. 25. Increase FY 15 authorization from $25 million to $50 million.

-

25,000,000

Sec. 28

Urban Action Program; Language change: Provide $10 million grant-in-aid for an intermodal transportation facility in northeastern Connecticut.

-

80,000,000

Sec. 87

Amend PA 13-239, Sec. 32(a): Grants-in-aid to private, nonprofit health and human service organizations that receive funds from the state to provide direct health or human services to state agency clients, for alterations, renovations, improvements, additions and new construction, including health, safety, compliance with the Americans with Disabilities Act and energy conservation improvements, information technology systems, technology for independence and purchase of vehicles and acquisition of property, not exceeding [$20,000,000] $50,000,000, $20,000,000 of which may be allocated to select project applications received in response to the funding for this purpose found in subsection (a)(1) of section 13 of this act.

-

30,000,000

Secs. 76 & 92

Amend PA 13-239, Secs. 19 & 38 to exempt recipients of the non-profit grant program from lien requirements.

 -

-

Department of Veterans' Affairs

Sec. 2(e)(1)

State matching funds for federal grants-in-aid for renovations and code required improvements to existing facilities

-

1,409,450

Sec. 2(e)(2)

Planning and feasibility study for additional veterans housing at the Rocky Hill campus, including demolition of vacant buildings

-

500,000

Sec. 79

Amend PA 13-239, Sec. 21(b): Alterations, renovations and improvements to buildings and grounds: Increase from $750,000 to $1,050,000

-

300,000

Department of Administrative Services 

Sec. 2(f)(1)

Land acquisition, construction, improvements, repairs and renovations at fire training schools

-

15,777,672

Sec. 2(f)(2)

Acquisition and renovation of a building for the offices of the Probate Court

-

3,000,000

Sec. 2(f)(3)

Infrastructure improvements including the engineering and construction of an offsite storm water improvement related to the construction of a new courthouse in Torrington.

-

800,000

Sec. 70

Language change: Alterations, renovations and improvements, including installation of air conditioning, [and related planning, design, development and demolition work,] to the State Office Building and associated parking facilities in Hartford. PA 11-57, Sec. 21(d)

-

-

Department of Emergency Services and Public Protection

Sec. 80

PA 13-239, Sec. 21(d)(2) Alterations and improvements to buildings and grounds, including utilities, mechanical systems and energy conservation projects: Increase from $5 million to $8 million

-

3,000,000

Secs. 41 & 42

Switch $1 million from DEEP to DESPP for a buy-out program for homeowners and businesses related to storm-damaged properties

-

-

Office of the Healthcare Advocate 

Sec. 2(g)

Development, acquisition and implementation of Health Information Technology systems and equipment in support of the State Innovation Model

-

1,900,000

Department of Consumer Protection

 

 

Sec. 9(b)

Grants-in-aid or reimbursement to municipalities in amounts up to $1,000 per grant or reimbursement, for the initial installation of a drop box for prescription drugs

-

100,000

Department of Labor 

Sec. 9(c)

Subsidized Training and Employment program (STEP)

-

10,000,000

Agricultural Experiment Station  

Sec. 2(h)

Planning and design for additions and renovations to the Valley Laboratory in Windsor

-

1,000,000

Department of Energy and Environmental Protection   

Sec. 9(d)

Grants-in-aid or loans to municipalities for acquisition of land, public parks, recreational and water quality improvements

-

20,000,000

Sec. 2(j)

Funding for the Public, Educational and Governmental Programming and Educational Technology Investment Account (PEGPETIA)

-

3,500,000

Sec. 58

Provide funding to purchase the Preserve

-

2,000,000

Sec. 81

Cancellation: Recreation and Natural Heritage Trust Program for recreation, open space, resource protection and resource management. PA 13-239, Sec. 21(g)(4)

 

(2,000,000)

Secs. 58 & 59

Enabling language for purchase and manage the Preserve with The Trust for Public Land

-

-

Sec. 501

Grant-in-aid to Mansfield for the wastewater component of the Four Corners project

-

3,000,000

Department of Economic and Community Development  

Sec. 9(e)(1)

Connecticut Manufacturing Innovation Fund, and for grants-in-aid for research and development of advanced composite materials

-

30,000,000

Sec. 47

Connecticut Manufacturing Innovation Fund program

-

-

Sec. 9(e)(2)

Grant-in-aid to the Northeast Connecticut Economic Development Alliance

-

2,000,000

Sec. 9(e)(3)

Grants-in-aid to nonprofit organizations sponsoring cultural and historic sites

-

10,000,000

Sec. 9(e)(4)

Grants-in-aid to nonprofit organizations sponsoring children's museums, aquariums, and science-related programs, including CT Science Center in an amount not exceeding $10.5 million and the Maritime Aquarium at Norwalk not exceeding $6.6 million

-

17,100,000

Sec. 9(e)(5)

Grant-in-aid to the Hartford Economic Development Corporation for a grant and revolving loan program for small and minority-owned businesses in urban areas

-

5,000,000

Sec. 45

Manufacturing Assistance Act

-

100,000,000

Sec. 44

Increase URA tax credit cap from $650 million to $800 million

-

-

Sec. 43

Modify Small Business Express program

-

-

Connecticut Innovations, Inc.

Sec. 22

Regenerative Medicine Research Fund - Provide $10 million in each of FY 16, FY 17, FY 18 & FY 19

-

-

Secs. 32-40

Changes to the Regenerative Medicine Research Program

-

-

Sec. 23

For the fiscal year ending June 30, 2015, administrative costs shall be paid or reimbursed to Connecticut Innovations, Incorporated from the Regenerative Medicine Research Fund, provided the total of such administrative costs shall not exceed four per cent of the total amount of the allotted funding for said fiscal year.

-

-

Sec. 88

Change name of fund and transfer from DPH: New name - Regenerative Medicine Research Fund (formerly the Stem Cell Research Fund). PA 13-239, Sec. 32(a)

-

-

Capital Region Development Authority

Sec. 2(i)

Grant-in-aid for the purpose of encouraging development as provided in CGS Sec. 32-602

-

30,000,000

Department of Housing  

Sec. 9(f)

Shoreline resiliency fund

-

25,000,000

Sec. 85

Flexible Housing Program: New language - Not less than $20,000,000 shall be used to promote homeownership through new home construction or home conversion in the cities of Hartford, New Haven, Bridgeport, New London, New Britain, Norwalk and Stamford.

-

20,000,000

Department of Public Health 

Sec. 46

For the Department of Public Health: Grants-in-aid to public water systems for drinking water projects;

-

50,000,000

Department of Social Services 

Sec. 9(h)

Grant-in-aid to Oak Hill for acquisition or capital improvements associated with acquisition of Camp Hemlocks

-

1,000,000

Department of Rehabilitation Services

Sec. 9(i)

Grant-in-aid for home modifications and assistive technology devices related to aging in place

-

6,000,000

Department of Education 

Sec. 9(j)

Grants-in-aid for alterations, repairs, improvements, technology, equipment and capital start-up costs, including acquisition costs, to expand the availability of high-quality school models, and assist in the implementation of common CORE state standards and assessments, in accordance with procedures established by the Commissioner of Education.

-

10,000,000

Sec. 74

School Security Infrastructure Grant Program. PA 13-3, Sec. 85

-

22,000,000

Sec. 73

School Security Infrastructure Grant Program: Provide reimbursements to regional education service centers, charter schools, the technical high school system and private primary and secondary schools. Provide funding for real time interoperable communications and multimedia sharing infrastructure systems. PA 13-3, Sec. 84. Expand program to include endowed academies

-

-

Sec. 90

Grants-in-aid for the purpose of capital start-up costs related to the development of new interdistrict magnet school programs to assist the state in meeting the goals of the [2008] current stipulation and order for Milo Sheff, et al. v. William A. O'Neill, et al., for the purpose of purchasing a building or portable classrooms, subject to the reversion provisions in subdivision (1) of subsection (c) of section 10-264h of the general statutes, leasing space, and purchasing equipment, including, but not limited to, computers and classroom furniture. PA 13-239, Sec. 32(g)(1). Increase FY 15 amount from $7.5 million to $17.4 million.

-

9,900,000

Sec. 82

Pilot program for extended hours at technical high schools in Hamden, New Britain, Waterbury and Hartford.

-

3,500,000

Office of Early Childhood

Sec. 24

Create Smart Start Competitive Grant account

-

-

Sec. 25

Smart Start Competitive Grant program bond authorization: Total of $105 million over 10 years - $15 million in FY 15 and $10 million per year between FY 16 and FY 24

-

15,000,000

Sec. 67

Transfer from SDE: Grants-in-aid for minor capital improvements and wiring for technology for school readiness programs. PA 07-7, (JSS), Sec. 32(h)(2)..

-

-

Sec. 73

Transfer school readiness program grants-in-aid from SDE and expand to allow for-profit and college facilities to qualify. PA 12-189, Sec. 9(e)(4).

-

-

Sec. 75

Transfer school readiness program grants-in-aid from SDE and expand to allow for-profit and college facilities to qualify. PA 13-239 13(h)(2).

-

-

Sec.91

Transfer school readiness program grants-in-aid from SDE and expand to allow for-profit and college facilities to qualify. PA 13-239. Sec. 32(g)(2)

-

-

State Library

Sec. 2(k)

Creation and maintenance of a state-wide platform for the distribution of electronic books to public library patrons

-

2,200,000

University of Connecticut

Sec. 29

Clarify that projects secured by revenue sources such as university fee revenue are not subject to the annual caps on amount of bonds UConn may issue each year that are secured by a state debt service commitment under CGS Sec. 10a-109g

-

Board of Regents for Higher Education: Regional Community College System 

Sec. 83

Cancellation: All Community Colleges: New and replacement instruction, research or laboratory equipment. PA 13-239, Sec. 21(l)(1)(A)

-

(5,000,000)

Sec. 83

Cancellation: All Community Colleges: System Technology Initiative. PA 13-239, Sec. 21(l)(1)(B)

-

(5,000,000)

Sec. 83

Cancellation: All Community Colleges: Alterations, renovations and improvements to facilities including fire, safety, energy conservation and code compliance improvements. PA 13-239, Sec. 21(l)(1)(C)

-

(5,000,000)

Secs. 50-58

CSCU 2020 - Authorize a total of $103.5 million ($80 million in FY 15 and $23.5 million in FY 16)

-

80,000,000

Judicial Department

 

 

Sec. 26

Development of a courthouse facility in Torrington, including land acquisition and parking. Effective upon passage.

8,817,000

-

Department of Transportation

Sec. 9(g)

Authorize Town Aid Road as GO bond funds, cancel $60 million in STO bonds for TAR (see below)

-

60,000,000

Sec. 89

Grants-in-aid for improvements to deep water ports, including dredging. PA 13-239, Sec. 32(f). Increase FY 15 amount from $5 million to $25 million

-

20,000,000

Sec. 502

CGS Sec. 13b-236 - competitive grants for commercial rail freight lines operating in the state for improvements and repairs to, and the modernization of, existing rail, rail beds and related facilities. Add: (D) projects that further the goals and objectives of the Department of Transportation's Connecticut State Rail Plan, and (E) freight rail projects that improve freight rail infrastructure by increasing the capacity for rail freight traffic.

 

10,000,000

Total GO New Bond Authorizations 

8,817,000

789,409,322

 

 

 

 

Cancellation of Prior Year Authorizations 

 

 

Sec. 71

Alterations, renovations and improvements to facilities, including fire, safety, energy conservation and code compliance. PA 11-57, Sec. 21(l)(1)(A)

-

(5,000,000)

Sec. 30

CGS Sec. 10a-110m - cancel $3 million from authorization to The University of Connecticut for the development of a technology park

-

(3,000,000)

Sec. 64

Judicial Department: Alterations and improvements to existing facilities related to change in age of jurisdiction. PA 07-7, (JSS), Sec. 2(w)(9). Effective upon passage.

(4,000,000)

-

Sec. 61

Judicial Department: Additions and improvements to the Juvenile Matters and Detention Facility, including acquisition of adjacent property. SA 01-2, Sec. 17(h)(4). Effective upon passage.

(4,817,000)

-

Total Cancellations

(8,817,000)

(8,000,000)

Net Total GO Bond Authorizations

-

781,409,322

 

Other Provisions  

Sec. 27

New Market tax credit language- CGS Sec. 3-20

-

-

 

 

 

 

Technical Corrections

Sec. 67

Technical correction - corrects section total

 

-

Sec. 63

Community-Technical Colleges: Northwestern Community College: Infrastructure development and improvements related to the nursing and allied health program. PA 07-7, (JSS), 2(s)(7)

-

(340,000)

Sec. 65

CSUS: All campuses - Land acquisition and related development costs. PA 07-7, (JSS), 2(t)(1)(E)

-

(5,490)

Sec. 66

Technical correction - restores three bond authorizations that were inadvertently repealed in PA 13-239.

-

-

Sec. 97

Grants-in-aid to the Metropolitan Economic Development Commission for construction, improvements, repairs, renovations and land acquisition for the purpose of creating elderly housing. PA 13-268, Sec. 2(b)(1)

-

(500,000)

Sec. 97

Grants-in-aid to the John E. Rogers African American Cultural Center for construction, improvements, repairs, renovations and land acquisition for the purpose of converting the former Northwest-Jones School to a cultural center. PA 13-268, Sec. 2(b)(2)

-

(500,000)

Sec. 97

Grants-in-aid to Catholic Charities of Hartford for construction, improvements, repairs and renovations for the purpose of creating affordable housing with supportive services. PA 13-268, Sec. 2(b)(3)

-

(500,000)

Total Technical Corrections

 

(1,845,490)

 

FY 15 Special Tax Obligation Bond Authorizations: Department of Transportation

Bureau of Highways

Sec. 17(a)

Development of a comprehensive asset management plan in accordance with federal requirements

-

10,000,000

Sec. 17(b)

Highway and bridge renewal equipment

-

5,400,000

Sec. 17(c)

Local Bridge Program

-

10,000,000

Sec. 17(d)

Reconfiguration of an existing ramp off of the Merritt Parkway in Westport

-

3,000,000

Sec. 94

Environmental compliance, soil and groundwater remediation, hazardous materials abatement, demolition, salt shed construction and renovation, storage tank replacement, and environmental emergency response at or in the vicinity of state-owned properties or related to Department of Transportation operations. PA 13-239, Sec. 46. Increase FY 15 amount from $13.99 million to $20.69 million.

-

6,700,000

Sec.95

Town Aid Road Program - Repeal STO bond funds for Town Aid Road in PA 13-239, Sec. 46

-

(60,000,000)

Bureau of Public Transportation 

Sec.96

Bus and rail facilities and equipment, including rights-of-way, other property acquisition and related projects. PA 13-239, Sec. 46. Increase from $143.0 million to $185.45 million & add Flower Street language

-

42,450,000

Sec. 31

CGS Sec. 13b-79p(a)(2): Implementing the New Britain-Hartford busway, subject to the availability of federal funds, and ensuring that all streets in the city of Hartford intersecting with said busway are equipped with sufficient signage, gates, traffic lights and other equipment to provide (A) that all such streets remain open to vehicular and pedestrian traffic for not less than twenty hours per day, and (B) safe passage across any such street by trains at any time;

-

-

Net Total STO Bond Authorizations

 

17,550,000

The Out Years

The General Fund and Special Transportation Fund debt service impacts identified above would continue over the 20 year term of issuance for the bonds.

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] PA 13-239 established the Connecticut Bioscience Innovation Fund to finance projects to improve the delivery of health care services, lower health care costs, and directly or indirectly create bioscience jobs. The Act capitalized the fund by authorizing up to $200 million in GO bonds over 10 years. The State Bond Commission allocated the funds in February 2014

[2] CII is a quasi-public state agency that is financed by loan repayments, investment returns, and fees so any additional costs would not be realized by the state's funds.

3 All TAR grants-in-aid are considered potential working capital because municipalities are permitted to use them for maintenance and current operating expenses.