Connecticut 2022 2022 Regular Session

Connecticut Senate Bill SB00004 Introduced / Fiscal Note

Filed 04/26/2022

                    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.