OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
sSB-4
AN ACT CONCERNING THE CONNECTICUT CLEAN AIR ACT.
Primary Analyst: PM 4/11/22
Contributing Analyst(s): SB, DD, EMG, CP, MR
Reviewer: MM
OFA Fiscal Note
State Impact:
Agency Affected Fund-Effect FY 23 $ FY 24 $
Department of Transportation TF - Potential
Cost
See Below See Below
Resources of the General Fund GF - Revenue
Loss
5 million 5 million
Department of Energy and
Environmental Protection
CHEAPR
(nonlapsing GF) -
Cost/Revenue
Gain
5 million 5 million
Department of Motor Vehicles TF - Revenue
Gain
1.3 million 1.4 million
Treasurer, Debt Serv. GF - Cost See Below See Below
Department of Energy and
Environmental Protection
GF - Cost 15 million None
Department of Energy and
Environmental Protection
GF - Cost 69,128 69,128
State Comptroller - Fringe
Benefits
1
GF - Cost 28,018 28,018
Department of Transportation TF - Cost 650,000 650,000
State Comptroller - Fringe
Benefits
1
TF - Cost 60,063 60,063
Note: TF=Transportation Fund; GF=General Fund
Municipal Impact:
Municipalities Effect FY 23 $ FY 24 $
1
The fringe benefit costs for most state employees are budgeted centrally in accounts
administered by the Comptroller. The estimated active employee fringe benefit cost
associated with most personnel changes is 40.53% of payroll in FY 23. 2022SB-00004-R000406-FN.DOCX Page 2 of 7
Various Local and Regional
School Districts
STATE
MANDATE
2
- Potential
Revenue
Gain/Cost
See Below See Below
All Municipalities Grand List
Reduction
None Potential
All Municipalities Potential
Savings
See Below See Below
Various Local and Regional
School Districts
Potential
Savings/
Cost
See Below See Below
Explanation
Section 1 accelerates various targets, from 2030 to 2026, regarding the
percentage of the state fleet that must have zero emissions. This
provision is not expected to have a fiscal impact because it is anticipated
that the Department of Administrative Services (DAS) would not make
fleet purchases if there were significant market barriers or if they were
otherwise not cost effective. If DAS does not meet these requirements,
the agency must submit a report to various legislative committees
explaining why and proposing an alternative schedule.
This section also prohibits the Department of Transportation (DOT)
from purchasing or leasing any diesel-fueled transit buses beginning in
2024. This provision may increase capital costs over the next several
years, covered in part by federal funds, but only to the extent that it
requires DOT to accelerate its transit fleet conversion beyond what it
would have otherwise done. It should be noted that the agency's current
policy and plans align with this section's requirements.
Section 5 requires all new construction of a state facility or a school
building project have at least 20% of parking spaces for cars or light duty
trucks be installed with level II electric vehicle (EV) charging stations.
This is expected to increase construction costs of relevant projects and
2
State mandate is defined in Sec. 2-32b(2) of the Connecticut General Statutes, "state
mandate" means any state initiated constitutional, statutory or executive action that
requires a local government to establish, expand or modify its activities in such a way
as to necessitate additional expenditures from local revenues. 2022SB-00004-R000406-FN.DOCX Page 3 of 7
represents a potential cost to the state and potential cost and revenue
gain to local and regional school districts.
The school construction program is funded using General Obligation
(GO) bonds, in two large tracts: priority list projects (i.e., larger projects
approved in legislation) and non-priority list projects. Non-priority list
projects currently include emergency items, such as fire or catastrophe
damage, leaking roofs, or code violations. The bill requires all school
building projects that are part of the state's school construction
reimbursement program include installation of vehicle charging
stations as part of school building projects, whether those projects fall
under the legislatively-approved, and typically larger scale, priority list
or the administratively approved non-priority list.
It seems likely that schools would not seek state reimbursement for
non-priority projects if the cost of installation of the charging stations
was greater than the costs associated with the underlying project. To the
extent schools do not participate in the state school construction
program to avoid the increased costs associated with installing charging
stations, there are potential increased costs to local and regional school
districts if those districts choose to undertake school construction
projects. Use of previously authorized bond funds for school
construction could be increased if school project reimbursements are
accelerated, or decreased if schools choose not to be part of the program.
While the bill requires charging station installation for the non-
priority list projects, current law (CGS Sec. 10-283, which is unchanged
by the bill) does not appear to allow for state reimbursement of costs
associated charging stations for non-priority list projects. The potential
aversion to being part of the state school construction program
described above would increase if the additional costs associated with
the charging stations are not a reimbursable expense. Use of previously
authorized bond funds for school construction could be decreased if
schools choose not to be part of the program and the charging stations
are not an eligible reimbursable expense.
For school construction priority list projects, the bill is likely to 2022SB-00004-R000406-FN.DOCX Page 4 of 7
increase overall costs of projects to be considered in the future. To the
extent these changes increase the total cost of future projects, the
increased cost would be shared between municipalities and the state at
the appropriate reimbursement ratio. Similarly, for new state facility
construction, the bill will increase future project costs. Specific costs for
eligible projects, including the marginal increase from the charging
station requirement, can only be determined as project expenses are
incurred by municipalities or the state and state reimbursements are
sought and offered. The fiscal impact of future projects requiring
legislative approval would be shown at the time such projects are
considered.
Future General Fund (GF) debt service costs may be incurred sooner
under the bill to the degree that it causes previously authorized GO
bond funds to be expended or to be expended more rapidly than they
otherwise would have been.
As of March 1, 2022, the unallocated bond balance available under
the school construction authorization is $636 million, with another $550
million effective under current law to start FY 23. The bill does not
change GO bond authorizations relevant to this section.
Section 6 exempts electric buses, certain EV charging stations, and
other refueling equipment for fuel-cell EVs from property taxes.
Exempting electric buses from property tax varies based on the type
of bus exempted. School buses are owned by private companies and are
taxable. It is not known if any private school bus companies currently
use electric buses. To the extent that they do, the cost of paying property
taxes on those buses is presumably factored in their contracts with
municipalities. Exempting these buses would result in a grand list
reduction in municipalities where they are registered but could also
reduce the cost of municipal contracts. At the average statewide mill
rate, the property taxes on a single electric school bus could range from
$6,500 to $11,000. Exempting electric charter buses from property taxes
has no fiscal impact, because such buses are already exempt. 2022SB-00004-R000406-FN.DOCX Page 5 of 7
Exempting EV charging stations and other refueling equipment
similarly results in a grand list reduction in the municipalities where the
equipment is located. Any grand list reduction results in a revenue loss,
given a constant mill rate.
Sections 7 & 11 of the bill alter and expand the Connecticut
Hydrogen and Electric Automobile Purchase Rebate (CHEAPR)
program. The bill increases program funding by transferring the entire
greenhouse gas (GHG) vehicle registration fee to the CHEAPR account,
resulting in GF revenue loss of approximately $5 million annually and
an equal revenue gain to the CHEAPR account. The GHG fee generates
approximately $8 million annually, but under current law only the first
$3 million goes to CHEAPR, with the remainder going to the GF.
Further, the bill extends eligibility to municipalities, resulting in
potential savings to the extent they receive these incentives.
Section 8 eliminates the registration discount for EVs, bringing the
fee from $57 to $120 for a three-year period, the same as for regular
registrations. This results in an estimated revenue gain of $1.3 million in
FY 23 and $1.4 million in FY 24.
3
Sections 13 & 17 authorize a combined $95 million in GO bonds,
including $75 million for DOT to establish a traffic signal grant program
and $20 million for the Department of Energy and Environmental
Protection (DEEP) to establish a zero-emission school bus grant
program. To the extent bonds are fully allocated and expended, total
debt service is expected to be approximately $136 million over the 20-
year duration of the bonds.
Sections 14 & 19 allow DEEP to establish a voucher program for the
deployment of certain zero emission vehicles after January 1, 2023, and
3
According to the DMV, there were 21,382 EVs registered in the state as of January 1,
2022. For FY 23 and FY 24, this estimate assumes EV purchases in the state (used here
as a proxy for new registrations) follow the growth reflected in the Energy Information
Administration's 2021 Annual Energy Outlook reference case regional forecast for
New England. Specifically, it follows the growth rate for all 100-mile, 200-mile, and
300-mile electric cars and light trucks. 2022SB-00004-R000406-FN.DOCX Page 6 of 7
within available funds. These sections also establish a "medium and
heavy duty vehicle voucher account" within the GF and appropriate $15
million to the account in FY 23.
Section 15 allows local and regional boards of education to enter into
school transportation contracts for up to 10 years, rather than five under
current law, if the contract includes at least one school bus that is zero-
emission. It is anticipated that a local and regional school district would
only enter into a 10-year contract, rather than a five-year contact, if they
could achieve savings. The savings incurred by districts would depend
on the terms of the contract.
Section 16 requires that all school buses be zero-emission by: (1)
January 1, 2030, in certain environmental justice school districts, and (2)
by January 1, 2035, in the remaining districts. To the extent that the cost
of this requirement exceeds available state bond and federal funds, local
and regional school districts will incur a cost. It is anticipated that these
costs could be significant and would depend on the number of buses in
a district that are not zero-emission, and the amount of bond funds and
federal funds the district received.
This section also requires DEEP to establish a new grant program to
provide matching funds for municipalities, school districts, and school
bus operators when submitting federal grant applications for zero-
emission buses and EV charging infrastructure. The funds for this
program are provided through GO bonds and are described in Sections
13 & 17 above. However, additional costs of $97,146 in each of FY 23 and
FY 24 are expected for DEEP to hire an Environmental Analyst 3 to
administer the program.
Section 18 requires DOT to establish, beginning in FY 25 and
annually thereafter, a transportation carbon budget that sets the
maximum amount of GHG emissions permitted from the transportation
sector. Implementing this provision is estimated to cost $710,063 in each
of FY 23 and FY 24 for a consultant to develop a framework and
methodology for the budget (approximately $1 million total) and two
transportation planner positions to oversee the program. 2022SB-00004-R000406-FN.DOCX Page 7 of 7
The Out Years
The annualized ongoing fiscal impact identified above would
continue into the future subject to inflation, the terms of any bonds
issued, the number of EVs registered in the state, and as otherwise
described.