HB 5437 — AN ACT ESTABLISHING A STUDENT LOAN SUBSIDY PROGRAM FOR FIRST RESPONDERS.

House of Representatives General Assembly CommitteeFile Bill No.

5437263 January Session, 2023 LCOHouse Bill No.

56695437 ReferredHouse toof Representatives, March 28, 2023 The Committee on HIGHERHigher EDUCATIONEducation ANDand EMPLOYMENTEmployment ADVANCEMENTAdvancement Introducedreported by:through REP.

(HED)HADDAD ANof ACTthe ESTABLISHING54th ADist., STUDENTChairperson LOANof SUBSIDYthe PROGRAMCommittee FORon FIRSTthe RESPONDERS.part of the House, that the bill ought to pass.

AN ACT ESTABLISHING A STUDENT LOAN SUBSIDY PROGRAM FOR FIRST RESPONDERS.

Such eligibility criteria and guidelines shall include, but need not be limited to, (1) applicant eligibility, (2) interest rate subsidies and principal limits onHB5437 authority/ loansFile subject to the Student Loan Subsidy Program, (3) the process for verifying the employment of the applicants, and (4) LCO 5669 \\PRDFS1\HCOUSERS\BARRYJN\WS\2023HB-05437-R021 of 3 HB.docx Committee Bill No.

5437263 the1 requirementHB5437 thatFile anNo. interest rate subsidy through the Student Loan Subsidy Program shall terminate for any subsidy recipient who ceases to meet the employment requirements of such program during the term of such recipient's loan from the authority.

263 on authority loans subject to the Student Loan Subsidy Program, (3) the process for verifying the employment of the applicants, and (4) the requirement that an interest rate subsidy through the Student Loan Subsidy Program shall terminate for any subsidy recipient who ceases to meet the employment requirements of such program during the term of such recipient's loan from the authority.

(b) The proceeds of the sale of such bonds, to the extent of the amounts stated in subsection (a) of this section, shall be used by the Connecticut Higher Education Supplemental Loan Authority for the purposepurposeoftheStudentLoanSubsidyProgramestablishedundersection of the Student Loan Subsidy Program established under section 1 of this act.

(c)(c)Allprovisionsofsection3-20ofthegeneralstatutes,ortheexercise All provisions of section 3-20 of the general statutes, or the exercise of any right or power granted thereby, that are not inconsistent with the provisions of this section are hereby adopted and shall apply to all bonds authorized by the State Bond Commission pursuant to this section.

Temporary notes in anticipation of the money to be derived from the sale of any such bonds so authorized may be issued in accordance with section 3-20 of the general statutes and from time to timeHB5437 renewed./ File No.

Such263 bonds2 shallHB5437 matureFile at such time or times LCO 5669 {\\PRDFS1\HCOUSERS\BARRYJN\WS\2023HB-054372 of 3 R02-HB.docx } Committee Bill No.

5437263 nottime exceedingrenewed. twenty years from their respective dates as may be provided in or pursuant to the resolution or resolutions of the State Bond Commission authorizing such bonds.

NoneSuch of such bonds shall bemature authorizedat exceptsuch upontime aor findingtimes bynot theexceeding Statetwenty Bondyears Commissionfrom thattheir thererespective hasdates beenas filedmay withbe itprovided ain requestor forpursuant suchto authorizationthe thatresolution is signed by or onresolutions behalf of the SecretaryState ofBond theCommission Officeauthorizing of Policy and Management and states such termsbonds. and conditions as said commission, in its discretion, may require.

SuchNone bondsof issuedsuch pursuantbonds to this section shall be generalauthorized obligationsexcept ofupon thea statefinding andby the fullState faithBond andCommission creditthat oftherehasbeenfiledwithitarequestforsuchauthorizationthatissigned theby stateor of Connecticut are pledged for the payment of the principal of and interest on suchbehalf bonds as the same become due, and accordingly and as part of the contractSecretary of the stateOffice with the holders of suchPolicy bonds, appropriation of all amounts necessary for punctual payment of such principal and interestManagement is hereby made, and thestates State Treasurer shall pay such principalterms and interestconditions as thesaid samecommission, becomein due.its discretion, may require.

Such bonds issued pursuant to this section shall begeneralobligationsofthestateandthefullfaithandcredit ofthestate of Connecticut are pledged for the payment of the principal of and interest on such bonds as the same become due, and accordingly and as part of the contract of the state with the holders of such bonds, appropriation of all amounts necessary for punctual payment of such principal and interest is hereby made, and the State Treasurer shall pay such principal and interest as the same become due.

3 July 1, 2023 New section HED Joint Favorable LCOHB5437 5669/ {\\PRDFS1\HCOUSERS\BARRYJN\WS\2023HB-05437-File 3No. of 3 R02-HB.docx }

263 3 HB5437 File No.

263 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do 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.

OFA Fiscal Note State Impact:

Agency Affected Fund-Effect FY 24 $ FY 25 $ Treasurer, Debt Serv.

GF - Cost See Below See Below Note:

GF=General Fund Municipal Impact:

None Explanation The bill authorizes $7 million in General Obligation (GO) bonds each fiscal year starting in FY 24 for the student loan subsidy program established in this act, to be administered by the Connecticut Higher Education Supplemental Loan Authority.

To the extent the new bonds authorized are fully allocated and expended, there would be an increase in annual General Fund debt service costs until such bonds are fully repaid.

At current market rates, total repayment costs over 20 years for $7 million of GO bond authorizations are estimated to be approximately $10.9 million.

The bill creates an annual new GO bond authorization, which would continue to add $7 million of new bond authorizations each year until changed or repealed.

Additional years of authorization past the initial year would increase the potential costs proportionately – for example, years of authorizations would be $70 million of bond authorizations at a total estimated debt service cost of $109 million.

To theextentthenewbondsauthorizedare certifiedby theTreasurer, and are fully allocated and expended, there would be an increase in annual General Fund debt service costs until such bonds are fully HB5437 / File No.

263 4 HB5437 File No.

263 repaid.

However, when portions of an authorization are specified to become effective in future years, the full authorization amount is typically known at the time of adoption.

The total potential debt service cost is unknowable, given the lack of finite amount or time frame of the bond authorization.

The Out Years The annualized ongoing fiscal impact identified above would continue into the future subject to the terms of any bonds issued.

HB5437 / File No.

263 5 HB5437 File No.

263 OLR Bill Analysis HB 5437 AN ACT ESTABLISHING A STUDENT LOAN SUBSIDY PROGRAM FOR FIRST RESPONDERS.

SUMMARY This bill requires the Connecticut Higher Education Supplemental LoanAuthority(CHESLA)toestablishaStudentLoanSubsidy Program to offer subsidized interest rates on loans it makes to first responders.