OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
SB-4
AN ACT CONCERNING THE CONNECTICUT CLEAN AIR ACT.
AMENDMENT
LCO No.: 5360
File Copy No.: 406
Senate Calendar No.: 278
Primary Analyst: PM 4/26/22
Contributing Analyst(s): EMG, MR (NF)
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) -
Revenue Gain
5 million 5 million
Department of Energy and
Environmental Protection
CHEAPR
(nonlapsing GF) -
Cost
See Below See Below
Department of Motor Vehicles TF - Revenue
Gain
1.3 million 1.4 million
State Comptroller - Fringe
Benefits
1
GF - Cost 28,018 28,018
Treasurer, Debt Serv. GF - Cost See Below See Below
Note: TF=Transportation Fund; GF=General Fund
Municipal Impact:
Municipalities Effect FY 23 $ FY 24 $
All Municipalities Grand List
Reduction
None Potential
All Municipalities See Below See Below See Below
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-R00LCO05360-FNA.DOCX Page 2 of 7
Various Local and Regional
School Districts
STATE
MANDATE
2
- Revenue
Gain/Cost
See Below See Below
Explanation
The amendment strikes the underlying bill and its associated fiscal
impact
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; DOT's current policy and plans align with
this section's requirements.
Section 5 requires new construction of state facilities, beginning on
and after January 1, 2023, costing over $100,000 to 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 represents a potential cost to
the state. Specific costs for required projects, including the marginal
increase from the charging station requirement, can only be determined
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-R00LCO05360-FNA.DOCX Page 3 of 7
as project expenses are incurred. The overall fiscal impact of future
projects requiring legislative approval would be shown at the time such
projects
Section 6 exempts electric school buses, and certain EV charging
stations from property taxes.
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.
Exempting EV charging 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 & 10 of the amendment alter and expand the Connecticut
Hydrogen and Electric Automobile Purchase Rebate (CHEAPR)
program. The amendment increases program funding by transferring
the entire greenhouse gas (GHG) vehicle registration fee to the CHEAPR
account, resulting in General Fund (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 amendment extends eligibility
to municipalities, resulting in potential savings to the extent they receive
these incentives. Costs to the CHEAPR program will be dependent on
the number of rebates issued.
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 2022SB-00004-R00LCO05360-FNA.DOCX Page 4 of 7
registrations. This results in an estimated revenue gain of $1.3 million in
FY 23 and $1.4 million in FY 24.
3
Sections 9 requires the Office of Policy and Management (OPM) to
report annually to various legislative committees on both (1) the amount
of total Clean Air Act fee revenue received for the preceding fiscal year
and (2) all state funding expended on clean air-related purposes for the
preceding fiscal year, as described in the amendment. This section does
not have a fiscal impact.
Section 11 requires DOT to establish a traffic signal matching grant
program for municipalities; however, the amendment does not provide
a funding source or amount for the program. To the extent that funds
are made available for the program, there would be a potential cost to
the state and a potential revenue gain and potential cost to grant
recipients. sSB 12, the revised FY 23 bond bill, as favorably reported by
the Finance, Revenue and Bonding Committee, authorized $75 million
for this purpose.
Section 12 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 13 sets requirements and benchmarks for school bus
electrification beginning in 2030. To the extent that the costs of these
requirements exceed available state bond and federal funds, local and
regional school districts will incur a cost. It is anticipated that these costs
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-R00LCO05360-FNA.DOCX Page 5 of 7
could be significant and would depend on the number of buses in a
district that are not zero-emission or alternative fueled, and the amount
of bond funds and federal funds the district received.
This section also requires the Department of Energy and
Environmental Protection (DEEP) to establish a 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. However, the
amendment does not provide a funding source or amount for the
program. To the extent that funds are made available for the program,
there would be a potential cost to the state and a potential revenue gain
and potential cost to grant recipients. sSB 12, the revised FY 23 bond bill,
as favorably reported by the Finance, Revenue and Bonding Committee,
authorized $20 million for this purpose.
It is further expected that this section will result in a cost of $97,146,
including fringe, in each of FY 23 and FY 24 for DEEP to hire an
Environmental Analyst 3 to administer the program. In accordance with
section 7 of the amendment, the salary is expected be funded through
the CHEAPR account, with the fringe costs funded through the
Comptroller.
Section 14 allows DEEP to establish a voucher program for the
deployment of certain zero emission vehicles after January 1, 2023.
Section 7 of the amendment authorizes DEEP to expend CHEAPR
account funds for this program.
Section 15 authorizes DEEP to adopt regulations implementing
California's medium- and heavy-duty motor vehicle standards and has
no fiscal impact because DEEP has the necessary expertise to adopt
these regulations.
Section 17 requires EV charging stations be included in new school
construction projects submitting applications on or after July 1, 2023.
The section is likely to increase overall costs of new construction projects
to be considered in the future, with marginal changes to project costs 2022SB-00004-R00LCO05360-FNA.DOCX Page 6 of 7
and state reimbursements no earlier than FY 25.
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. 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.
The school construction program is funded using General Obligation
(GO) bonds. After FY 24, future GF debt service costs may be incurred
sooner under the amendment 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 April 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 amendment does
not change GO bond authorizations relevant to this section.
Section 18 redirects Regional Greenhouse Gas Initiative (RGGI)
auction proceeds allocated to the Connecticut Green Bank in excess of
$5.2 million to the CHEAPR account. As the Green Bank is allocated
23% of RGGI proceeds, this section is not anticipated to have a fiscal
impact.
The other sections of the amendment are technical, make conforming
changes, or otherwise do not have a fiscal impact to the state of
municipalities.
The Out Years
The annualized ongoing fiscal impact identified above would
continue into the future subject to inflation, the number of rebates, the
number of EVs registered in the state, the terms of any bonds issued,
and as otherwise described. 2022SB-00004-R00LCO05360-FNA.DOCX Page 7 of 7
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.