Connecticut Seal

General Assembly

File No. 501

    January Session, 2017

House Bill No. 6948

House of Representatives, April 11, 2017

The Committee on Planning and Development reported through REP. LEMAR of the 96th Dist., Chairperson of the Committee on the part of the House, that the bill ought to pass.

AN ACT CONCERNING REGIONAL ECONOMIC DEVELOPMENT.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 32-326 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2017):

It is hereby found and declared that there exists in this state a great and growing need for additional public and private capital improvements and acquisitions and project development that will promote economic diversification, stability and growth; that such improvements, acquisitions and projects are a particularly effective investment of state funds because of their relative immobility in an increasingly global economy; that such improvements, acquisitions and projects are particularly needed in communities and regions experiencing significant military, [and] industrial and commercial job losses and economic dislocation; and that regional cooperation in the planning and development of such improvements, acquisitions and projects is desirable and should be encouraged; and therefore, it is necessary and in the public interest and for the public good that the provisions of sections 32-325 to 32-330, inclusive, are hereby declared a matter of legislative determination.

Sec. 2. Section 32-327 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2017):

As used in sections 32-325 to 32-330, inclusive, 32-23ww and 32-23xx:

(1) "Act" means the Regional Economic Development Act.

(2) "Agency" [means] or "planning region" means any [regional economic development commission formed under sections 7-136 and 7-137, other regional development commission or corporation formed under any other provision of the general statutes or any special act,] economic development district designated pursuant to 42 USC 3171 or [any] regional council of governments organized under sections 4-124i to 4-124p, inclusive. [, except that for purposes of financial assistance for greenways projects, "agency" means a municipality or other organizations.]

(3) "Commissioner" means the Commissioner of Economic and Community Development.

(4) "Eligible project" means (A) a public or private improvement or acquisition which, [in the sole judgment of the commissioner] as determined by a comprehensive economic development strategy, will significantly enhance economic diversification, stability, growth or scientific knowledge in the region where the project is to be located, and includes a "business development project" as defined in subsection (a) of section 32-222, [or greenways projects] or (B) an application for a grant under section 32-23ww or 32-23xx. [(i) In determining eligibility with regard to an application submitted for an eligible project under subparagraph (A) of this subdivision before June 21, 1994, the commissioner shall also evaluate the project in accordance with a one-hundred-point scale as follows: Fifteen points based on such criteria as the commissioner may from time to time establish, fifteen points for projects located in targeted investment communities, up to twenty-five points for projects in regions where fifty per cent or more of the member municipalities within any planning region participate and fifteen points for every two thousand manufacturing jobs that the region has lost or, in the judgment of the commissioner, is scheduled to lose between July 1, 1989, and July 1, 1996, up to a total of forty-five points. (ii) In determining eligibility with regard to an application submitted for any eligible project under this subdivision on or after June 21, 1994, the commissioner shall also evaluate the project in accordance with a one-hundred-point scale as follows: Fifteen points based on such criteria as the commissioner may from time to time establish, fifteen points for projects located in targeted investment communities, up to twenty-five points for projects in regions where fifty per cent or more of the member municipalities within any planning region participate and fifteen points for every two thousand manufacturing jobs that the region has lost or, in the judgment of the commissioner, is scheduled to lose between July 1, 1989, and July 1, 1996, up to a total of twenty-five points, and ten points if the project consists of an application for a grant under section 32-23ww or 32-23xx, up to a total of twenty points.]

(5) "Manufacturing jobs" means jobs at a business that is located, in whole or in part, in Connecticut and that has a North American Industrial Classification code of 311111 through 339999; a business engaged in research and development directly related to manufacturing; a business engaged in the significant servicing, overhauling or rebuilding of machinery and equipment for industrial use; an agricultural enterprise engaged in value added agricultural production, as is consistent with section 22-26k, or agricultural biotechnology; or any establishment or auxiliary or operating unit thereof, as defined in the North American Industrial Classification Manual, which the commissioner determines will materially contribute to the economy of the state by creating or retaining jobs, exporting products or services beyond the state's boundaries, encouraging innovation in products or services, adding value to products or services, or otherwise supporting or enhancing existing activities that are important to the economy of the state.

(6) "Eligible project cost" means the total cost in dollars of an eligible project.

(7) "Financial assistance" means grants, extensions of credit, loans, other investments, or guarantees of any of the foregoing, or any combination thereof, or any guaranty of any pool of such loans determined by the commissioner to be necessary or appropriate to establish or maintain a secondary market for such loans.

(8) "Regional economic development plan" means a [plan prepared by an agency that identifies, and which may rank, in order of priority, eligible projects for which the agency intends to apply for financial assistance under section 32-325, and includes an economic development plan developed as contemplated by section 32-7] comprehensive economic development strategy prepared pursuant to 13 CFR 303.7 by an economic development district designated pursuant to 42 USC 3171 or a regional council of governments organized under sections 4-124i to 4-124p, inclusive.

[(9) "Planning region" means any planning region of the state recognized by the commissioner and established in connection with the development of any regional economic development plan.]

Sec. 3. Section 32-328 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2017):

(a) [An agency] A planning region may apply for financial assistance under this section by submitting one or more projects identified in a regional economic development plan to the commissioner, with a request for financial assistance for [one or more projects identified in the plan] such projects. The commissioner may also propose eligible projects, in amounts not to exceed one-third of the funds available under sections 32-325 to 32-330, inclusive, for financial assistance under this section, after submitting such proposal to the [agencies within the] planning region in which the project is to be located and consulting with such [agencies] planning region as to the appropriateness of such project under [any applicable] such planning region's regional economic development plan.

(b) The commissioner may fund not more than ninety per cent of total project costs [in targeted investment communities, not more than seventy-five per cent of total project costs in the case of] for a project in a region that includes a targeted investment community or a federally distressed community, and not more than sixty-six and two-thirds per cent of total project costs in the case of a project in a region that does not include a targeted investment community.

[(c) Financial assistance may be provided to municipalities and other organizations to develop greenways, including, but not limited to, transportation-related greenways supported by the federal Transportation Equity Act for the 21st Century, as amended from time to time. The amount of any grant shall be as follows: (1) For transportation greenways projects that are part of interstate greenways, not more than twenty per cent of the project cost; (2) for transportation greenways projects that are local spurs from interstate greenways or that are intertown greenways projects, not more than ten per cent of the project cost; and (3) for greenways that are not transportation greenways, not more than half of the capital costs of the project.]

[(d)] (c) The total financial assistance under sections 32-325 to 32-330, inclusive, for any [agency or project] planning region shall not exceed twenty million dollars of state funds plus any federal funds that the commissioner or planning region applies to the project.

Sec. 4. Subsection (b) of section 23-102 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2017):

(b) The duties of the council shall be: (1) To advise and assist in the coordination of state agencies, municipalities, regional planning organizations, as defined in section 4-124i, and private citizens in voluntarily planning and implementing a system of greenways; (2) to operate a greenways help center to advise state agencies, municipalities, regional planning organizations, as defined in section 4-124i, and private citizens in the technical aspects of planning, designing and implementing greenways, including advice on securing state, federal and nongovernmental grants; (3) to establish criteria for designation of greenways; (4) to maintain an inventory of greenways in the state which shall include the location of greenways transportation projects which have received grants under sections 23-101, 32-6a [,] and 32-9qq; [and 32-328;] (5) to advise the Commissioner of Economic and Community Development on the distribution of grants for greenways transportation projects pursuant to sections 32-6a [,] and 32-9qq; [and 32-328;] and (6) to advise the Commissioner of Energy and Environmental Protection on the distribution of grants pursuant to section 23-101.

This act shall take effect as follows and shall amend the following sections:

Section 1

July 1, 2017

32-326

Sec. 2

July 1, 2017

32-327

Sec. 3

July 1, 2017

32-328

Sec. 4

July 1, 2017

23-102(b)

PD

Joint Favorable

 

The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do 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.


OFA Fiscal Note

State Impact: None

Municipal Impact: None

Explanation

The bill makes various changes to the regional economic development program which has no fiscal impact. The bill does not authorize General Obligation bonds for this purpose and currently there is no unallocated bond balance for this program.

The Out Years

State Impact: None

Municipal Impact: None

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)

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