OLR Bill Analysis

HB 6948

AN ACT CONCERNING REGIONAL ECONOMIC DEVELOPMENT.

SUMMARY

This bill makes various changes to the regional economic development program, a competitive financial assistance program administered by the Department of Economic and Community Development (DECD) for infrastructure projects proposed by regional entities. The legislature has not authorized bonds for the program since 1994.

The bill limits the regional entities that may apply for the funds to federally designated regional economic development districts (REDDs) (presumably the districts' governing organizations) and regional councils of government. Under current law, regional economic development commissions and other regional development entities may also apply. The bill also requires that the eligible infrastructure projects be identified in a comprehensive economic development strategy (CEDS), rather than a regional economic development plan (see BACKGROUND).

The bill also modifies the program's eligibility criteria and grant amounts and makes minor, technical, and conforming changes.

EFFECTIVE DATE: July 1, 2017

REGIONAL ECONOMIC DEVELOPMENT PROGRAM

Eligible Projects

By law, a project qualifies for the funds under this program if it diversifies, stabilizes, or develops the region's economy or enhances scientific knowledge in the region. Current law requires the DECD commissioner to make this determination using a 100-point scale for assessing the projects based on specified criteria. The bill instead requires the region's CEDS to make the determination. The bill also makes greenway projects ineligible for the funds.

The bill expands the definition of manufacturing jobs to include jobs in agricultural businesses using value-added agricultural production or agricultural biotechnology. However, this term is used only in the 100-point scale eliminated under the bill.

Grant Amounts

Under current law, the assistance may fund up to 90% of total project costs in state-designated targeted investment communities (TICs) (i.e., municipalities with enterprise zones) and up to 70% in regions that include a TIC. The bill instead allows the assistance to fund up to 90% of total costs in regions that include a TIC or a federally distressed community (presumably under the U.S. Economic Development Administration's (EDA) economic distress criteria). As under existing law, the assistance may fund up to 66.67% of projects in regions that do not include a TIC.

Legislative Purpose

The bill amends the statement of legislative purpose for the law to include the need for infrastructure investments in communities and regions experiencing significant military, industrial, and commercial job losses and economic dislocation, rather than just communities experiencing significant military and industrial job losses.

BACKGROUND

REDDs and CEDS

Federal law allows entities to propose REDDs for federal EDA approval, plan and implement a CEDS to develop them, and qualify for certain types of federal economic development assistance. It specifies the criteria the EDA must use to approve a proposed district, including a requirement that each REDD include at least one economically distressed area. An area meets the economic distress criteria if (1) its unemployment rate for the most recent 24-month period exceeded the national average by at least one percentage point, (2) its per capita income is 80% or less of the national average, or (3) it has a special need arising from severe unemployment or short- or long-term economic changes (13 C.F.R. 304.1 and 301.3(a)(1)).

State law establishes a process by which regional entities may establish a REDD, prepare a CEDS, and seek federal approval (CGS 32-741 et seq.).

COMMITTEE ACTION

Planning and Development Committee

Joint Favorable

Yea

21

Nay

0

(03/24/2017)