OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
sHB-5502
AN ACT CONCERNING THE OPERATIONS OF THE STATE
TREASURER AND THE BONDING AUTHORITY OF THE
CONNECTICUT MUNICIPAL REDEVELOPMENT AUTHORITY.
Primary Analyst: EMG 4/18/22
Contributing Analyst(s): DD
Reviewer: MM
OFA Fiscal Note
State Impact:
Agency Affected Fund-Effect FY 23 $ FY 24 $
Treasurer, Debt Serv. GF - Potential
Savings
Minimal Minimal
Note: GF=General Fund
Municipal Impact: None
Explanation
The bill requires that any bonds issued by the Municipal
Redevelopment Authority (MRDA) use special capital reserve funds
(SCRF) overseen by the Treasurer, and limits MRDA's aggregate SCRF-
backed debt to $50 million. To the extent MRDA issues SCRF-backed
bonds in the future instead of non-SCRF-backed state-backed bonds or
that MRDA's debt is limited to $50 million where it otherwise would
have been greater, there is the potential for minimal cost savings.
Background
MRDA was established within the 2019 Budget Act and empowered
to issue bonds backed by the state that were not specifically subject to
SCRF requirements. To date, MRDA has not issued any bonds. 2022HB-05502-R000605-FN.DOCX Page 2 of 2
SCRF-backed bonds are a contingent liability of the state.
1
The SCRF
provides a higher level of repayment security, which results in a lower
rate of interest on the bond issuance than the relevant market rate. In the
event that the SCRF is drawn down in part or completely, a draw on the
General Fund is authorized and the SCRF is fully restored. The draw on
the General Fund is deemed to be appropriated and is not subject to the
constitutional or statutory appropriations cap. If draws on a SCRF
continue, the annual draws on the General Fund required to refill it also
continue until the fund is replenished by the bond issuer or the
underlying debt is repaid.
The Out Years
The annualized ongoing fiscal impact identified above would
continue into the future subject to the terms of any bonds issued by
MRDA.
1
Contingent liabilities do not count against the state’s statutory limits on General
Obligation bonding.