OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

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

sHB-5342

AN ACT CONCERNING REVISIONS TO THE STATE'S BROWNFIELD REMEDIATION AND DEVELOPMENT STATUTES.

As Amended by House "A" (LCO 5280)

House Calendar No. : 338

Senate Calendar No. : 529

OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 13 $

FY 14 $

Treasurer, Debt Serv.

GF - Potential Cost

See Below

See Below

Department of Economic & Community Development

GF - Potential Cost

Indeterminate

Indeterminate

Department of Economic & Community Development

GF - Potential Cost

Significant

Significant

Department of Energy and Environmental Protection

GF - Revenue Loss

See Below

See Below

Various State Agencies

GF - Potential Cost

Less than $1,000

None

Note: GF=General Fund

Municipal Impact:

Municipalities

Effect

FY 13 $

FY 14 $

Various Municipalities

Revenue Gain

See Below

See Below

Explanation

The fiscal impact of the bill is as follows:

Sections 1, 2, 10 and 11 expand the purposes for which General Obligation (GO) bond funds authorized for the Regional Brownfield Redevelopment Loan Fund can be used to include: (1) grants to municipalities, (2) loans for affordable housing projects, and (3) staffing and marketing costs associated with the Department of Economic and Community Development's (DECD) Brownfields Remediation Program. To the degree that bond funds are expended more rapidly than they otherwise would have been, this will accelerate General Fund expenditures for debt service costs. It could also result in the need for the authorization of additional GO bonds for this program in future years.

There is currently a $10 million unallocated GO bond balance for the Regional Brownfield Redevelopment Loan Fund and an additional $25 million will be made available in FY 13.

Section 2 also results in a potential cost by permitting the Commissioner of Economic and Community Development to forgive loans provided to municipalities and economic development agencies. The actual cost is uncertain as the commissioner has discretion over forgiving any particular loan that would otherwise be repaid.

Section 3 has no fiscal impact by specifying that DECD may use up to four percent of available funding for brownfield financing programs for certain administrative expenses related to those programs and the administration of the Office of Brownfield Remediation and Development (OBRD). There is no fiscal impact because the provision redirects funding to this specific purpose without providing additional funds.

Section 4 has no fiscal impact by redirecting any funds recovered by the Attorney General from parties that polluted brownfield sites to the Brownfield Remediation and Development account.

Sections 5 - 8 may result in a potential significant cost by allowing DECD, along with other state agencies, to develop pilot programs that facilitate up to three “smart growth” redevelopment projects. The cost may vary dependent upon how the pilot programs are implemented. It is unclear how the pilot programs will be funded. Presumably existing funds will be used, including existing bond authorizations for various brownfields programs. If existing bond authorizations are utilized, there may be a need for the authorization of additional GO bonds for those various programs in future years.

Additionally, there is a potential cost to DECD in preparing a written evaluation of the impact of the overall project on the environment. It is anticipated that the administrative funding support provided to OBRD in Section 3 of the bill may accommodate these expenses.

Section 9 gives applicants more time to pay the program's various application fees, which they must pay in two installments to the Department of Energy and Environmental Protection (DEEP). This is anticipated to result in delayed receipt of revenue to the state, as applicants are likely to take longer in submitting fees. This provision also allows municipal applicants to delay the remittance of fees to the state.

The bill also allows municipalities to ask the DEEP commissioner to waive the fee on any brownfield located within their respective jurisdictions that has been accepted into the program. Currently, municipalities are permitted to request fee waivers only for brownfields within their respective jurisdictions that others own. This is expected to result in a revenue loss to DEEP and a revenue gain to municipalities.

Section 9 also permits DEEP to utilize the application fees deposited into the Special Contaminated Property Remediation and Insurance Fund (SCPRIF). There is no fiscal impact as DEEP may currently use funds from the SCPRIF.

Section 12 may result in a cost of less than $1,000 to agencies participating in the working group to reimburse legislators and agency staff for mileage expenses.

Section 13 requires DECD to appoint a director of the OBRD. This results in an annual cost of $109,527 ($88,500 salary and $21,027 fringe). Section 10 also requires DECD to identify abandoned and underutilized mills, which may require up to one additional employee at an annual cost of $86,071 ($66,608 in salary plus $19,463 in fringe) in the OBRD to administer. It is anticipated that the administrative funding support provided to OBRD in Section 3 of the bill may accommodate these expenses.

Currently, there are three full-time employees at the OBRD that manage DECD's brownfield programs and initiatives.

House “A” eliminates the original bill and its associated fiscal impact and results in the impact described above.

The Out Years

The annualized ongoing fiscal impact identified above for General Fund debt service would continue into the future subject to inflation. The impact of Section 9 would continue into the future subject to fee changes and the extent to which municipalities apply to certain state brownfield programs.

All other annualized ongoing fiscal impacts would also continue into the future subject to inflation.

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.