OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

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

sSB-535

AN ACT ESTABLISHING THE APPRENTICESHIP CONNECTICUT INITIATIVE AND CONCERNING ECONOMIC DEVELOPMENT AND MANUFACTURING BONDS FOR SUBMARINE FACILITY CAPITAL IMPROVEMENTS.


OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 19 $

FY 20 $

Out Years $

Treasurer, Debt Serv.

GF - Potential Cost

See Below

See Below

72.3 million total

Note: GF=General Fund

Municipal Impact: None

Explanation

The bill authorizes $50 million in General Obligation bonding for work force pipeline programs to be administered by the Department of Labor. To the extent that the authorized bonds are allocated by the State Bond Commission, the state would need to repay the principal amount of the bond plus associated fees and interest. If bonds were approved for use and issued in FY 19, the state could begin repayment of up to $2.5 million in FY 20. A later issuance date would not result in repayment cost in the biennium.

The bill also obligates $100 million of funds previously authorized for the Manufacturing Assistance Act to a qualified submarine manufacturer. This may change the expenditure rate of the authorized GO bonds, with a commensurate change in future debt service payments.

The Out Years

Under current market conditions, the state would repay a $50 million bond over 20 years at an approximate total cost of $72.3 million (for principal and interest, including the initial $2.5 million payment described above), or approximately $3.6 million per year on average.