OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
sHB-5004
AN ACT CONCERNING THE IMPLEMENTATION OF CERTAIN
CLIMATE CHANGE MEASURES.
As Amended by House "A" (LCO 4989)
House Calendar No.: 216
Primary Analyst: TM 5/2/24
Contributing Analyst(s): LG, EMG, WL, CR, JS, CW, EW
Reviewer: PR
OFA Fiscal Note
State Impact:
Agency Affected Fund-Effect FY 25 $ FY 26 $
Department of Energy and
Environmental Protection
GF - Potential
Cost
500,000 None
Public Utilities Regulatory
Authority (PURA)
GF - Potential
Cost
50,000 None
Secretary of the State GF - Revenue
Loss
Minimal Minimal
Office of Workforce Strategy GF - Cost Up to
200,000
None
Treasurer, Debt Serv. GF - Cost See Below See Below
Resources of the General Fund GF - Potential
Cost
See Below See Below
Department of Energy and
Environmental Protection
GF - Cost Up to
100,000
None
Note: GF=General Fund
Municipal Impact:
Municipalities Effect FY 25 $ FY 26 $
Various Municipalities Potential
Cost
See Below See Below
Various Municipalities Potential
Revenue
Loss
See Below See Below
Various Municipalities Potential
Revenue
Gain
See Below See Below
2024HB-05004-R020661-FN.DOCX Page 2 of 6
Explanation
The bill establishes various requirements related to its climate crisis
declaration, and results in the costs to the state as described below
Section 4 establishes broad state targets for reducing emissions
resulting in the ratepayer impact outlined below and a potential cost for
the Department of Energy and Environmental Protection (DEEP). This
section does not require but allows does not require DEEP to hire a
consultant to submit a report on Greenhouse Gas emissions (GHG). If
DEEP were to hire a consultant to complete the study, it would cost
approximately $500,000.
Section 7 requires the Public Utilities Regulatory Authority (PURA)
to create an internet data dashboard with certain data related to
ratepayer funded clean and renewable energy programs and results in
a potential cost. The bill empowers but does not require PURA to hire a
consultant to facilitate the creation of the data dashboard. If PURA were
hire a consultant, it would create a cost of approximately $50,000 in FY
25.
Section 8, which establishes a preference for certain "green" jobs
under the JobsCT tax rebate program, does not result in any fiscal
impact as it does not alter the aggregate annual $40 million cap on the
program.
Section 9 requires the Secretary of the State (SOTS) to identify fees
that may be waived for certain benefit corporations and farms using
climate smart practices developed by the United States Department of
Agriculture resulting in revenue loss. The exact extent of the revenue
lost will depend on the number of entities that qualify for fee waiver,
and the number of fees identified to waive, but is likely to be minimal.
Section 10 results in a one-time cost of up to $200,000 to the Office of
Workforce Strategy (OWS) by requiring the Connecticut Clean Energy
Council, on which OWS is a participating member, to develop a plan to
transition workers from fossil-fuel-based jobs to clean energy jobs. 2024HB-05004-R020661-FN.DOCX Page 3 of 6
While OWS does have expertise on workforce development
strategies, it is anticipated that the agency will need to hire a consultant
to (1) assist in researching the costs of training for both new workers and
upskilling existing workers to meet industry demands and standards
and (2) complete the report by February 1, 2026.
Section 12 has no fiscal impact from establishing a task force to study
underutilized sites, including brownfields, throughout the state for
utilization by entrepreneurs in the climate and green economy sector. It
is anticipated that the task force can complete its responsibilities within
existing resources.
Section 14 makes purchase and installation of air source or ground
source heat pumps eligible for non-priority list school building project
reimbursements, which results in a cost to the state and potential
revenue gain to municipalities.
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 expands the non-
priority list projects to include heat pump installation.
Non-priority list projects are allowed at the discretion of the
Commissioner of Administrative Services within available resources of
the program. As of March 1, 2024, the unallocated bond balance
available under the school construction authorization is $421 million,
with another $250 million effective under current law to start FY 25. The
bill is expected to result in an increase in the use of GO bond funds for
non-priority list reimbursable expenses, which would expedite
anticipated debt service from existing bond authorizations.
To the extent municipalities choose to pursue additional heat pump
projects allowed under the bill, there would be additional revenues to
the same municipalities. 2024HB-05004-R020661-FN.DOCX Page 4 of 6
Specific costs from eligible projects, including the marginal increase
from expanded eligibility, can only be determined as project expenses
are incurred by municipalities and state reimbursements are sought and
offered.
Installation of heat pumps is already allowed as part of broader
priority list projects within the school construction program.
Additionally, competitive grants are available under the school air
quality grant program, which would include installation of heat pumps.
It is unclear how many additional projects would seek funding
specifically under the non-priority list provision of the school
construction program than would otherwise seek funding under the
other available funding sources.
Section 16 results in a potential cost to DEEP to the extent that the
department establishes a program to provide point-of-sale rebates for
heat pump purchases. The bill appears to allow program funding to
come from the General Fund, bond funding, or federal funding;
currently there is no such funding available or authorized by the bill.
The magnitude and timing of the potential cost is dependent on the
amount of funding made available, if any.
Section 17 results in a potential cost to municipalities as it requires
evaluations of environmental sustainability and climate resiliency to be
included in municipalities' Plans of Conservation and Development
(POCDs). This requirement applies to any POCDs adopted on or after
October 1, 2026. Any costs will be dependent on what is needed to meet
this requirement.
This section results in a potential revenue loss to municipalities to the
extent they are unable to adopt the POCDs with the new requirements.
Failure to do so, consistent with current law, results in a municipality
becoming ineligible for discretionary state funding.
Section 18 which requires the Office of Policy and Management
(OPM) to develop a model policy for environmentally sustainable
purchasing that municipalities may voluntarily utilize and implement, 2024HB-05004-R020661-FN.DOCX Page 5 of 6
does not result in a fiscal impact as OPM has the resources necessary to
develop the model policy.
Section 19 is not anticipated to result in a fiscal impact, as it requires
the Office of Policy and Management to authorize additional
reimbursement of eligible expenses under the Local Capital
Improvement Program (LoCIP) for FY 25 and FY 26 using any resources
appropriated for said purpose. Administration of LoCIP was changed
from a reimbursement program to a prospective grant beginning in FY
24 (PA 23-124).
Additionally, the LoCIP program is bond funded. The bill makes no
additional resources available for the program, either through the
authorization of bond funds or appropriations. The fiscal impact of any
legislation appropriating funds for an expanded purpose would be
noted in the fiscal note relevant to the other legislation.
Section 20 requires the Department of Administrative Services (DAS)
to establish a process to consider ways to increase energy efficiency,
utilization of zero-carbon and renewable options, facilitate EV charging,
and reduce energy use when modifying any real asset of the state. These
provisions do not result in a fiscal impact as DAS has the resources
necessary to develop the process.
Section 21 results in a cost to DEEP of up to $100,000 in FY 25 to
complete a report by December 31, 2024 which assesses the
department’s current use of nature-based solutions in various programs
and the potential for expanding such solutions in those programs. The
department is likely to use a consultant to complete the report as it lacks
sufficient resources to meet the reporting requirements by the deadline.
2024HB-05004-R020661-FN.DOCX Page 6 of 6
Ratepayer Impact Statement
1
:
The bill creates and adopts additional Greenhouse Gas (GHG)
emissions reduction targets and results in a cost to ratepayers. The cost
is associated with the development and upgrade of the grid that will be
required by electric distribution companies to achieve the targets in the
bill
2
. The exact cost to ratepayers will depend on the pace of upgrades
completed.
House "A" strikes the underlying bill and results in the fiscal impact
described above.
The Out Years
The annualized ongoing fiscal impact identified above would
continue into the future subject to inflation.
1
The state and municipalities are ratepayers and therefore may be impacted by policy
changes that affect electric rates
2
Electric generation is one of several factors contributing to carbon emissions