AN ACT CONCERNING TRANSPORTATION SYSTEM MODERNIZATION.

Senate
sSB416 / File No. 468 1

General Assembly File No. 468
February Session, 2026 Substitute Senate Bill No. 416

Senate, April 7, 2026

The Committee on Transportation reported through SEN.
COHEN of the 12th Dist., Chairperson of the Committee on the
part of the Senate, that the substitute bill ought to pass.

AN ACT CONCERNING TRANSPORTATION SYSTEM
MODERNIZATION.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:

Section 1. Section 13b -23c of the general statutes is repealed and the 1
following is substituted in lieu thereof (Effective October 1, 2026): 2
The Commissioner of Transportation shall establish a matching grant 3
program for the purpose of assisting municipalities to modernize 4
existing traffic signal equipment and operations to (1) make such 5
equipment and operations capable of utilizing transit signal priority and 6
responsive to congestion, and [to] (2) reduce idling. Applications shall 7
be submitted annually to the commissioner at such times and in such 8
manner as the commissioner prescribes. The commissioner shall 9
develop the eligibility criteria for participation in the program and 10
determine the amount a municipality shall be required to provide to 11
match any such grant. The commissioner shall give preference to 12
applications [submitted by two or more municipalities and establish 13
incentives for projects undertaken by two or more municipalities ] 14
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involving projects located in heavily congested areas. 15
Sec. 2. Subsection (g) of section 21 of public act 20 -1, as amended by 16
section 344 of public act 22 -118 and section 74 of public act 23 -205, is 17
amended to read as follows (Effective July 1, 2026): 18
(g) For the Department of Transportation: For construction, repair or 19
maintenance of highways, roads, bridges, noise barriers or bus and rail 20
facilities and equipment, not exceeding $130,000,000, provided not more 21
than $75,000,000 shall be used for a matching grant program established 22
pursuant to section 13b-23c of the general statutes, as amended by this 23
act, to assist municipalities to modernize existing traffic signal 24
equipment and operations. 25
Sec. 3. Section 22a -201d of the general statutes is repealed and the 26
following is substituted in lieu thereof (Effective July 1, 2026): 27
(a) As used in this section, (1) "zero-emission school bus" has the same 28
meaning as provided in 42 USC 16091(a)(8), as amended from time to 29
time, (2) "alternative fuel school bus" means a school bus that reduces 30
emissions and is operated entirely or in part using liquefied natural gas, 31
compressed natural gas, hydrogen, propane or biofuels, [and (3) 32
"environmental justice community" has the same meaning as provided 33
in subsection (a) of section 22a-20a] (3) "distressed municipality" means 34
a municipality that is a distressed municipality under the provisions of 35
subsection (b) of section 32-9p on July 1, 2026, (4) "carrier" has the same 36
meaning as provided in section 14-212, and (5) "biodiesel" has the same 37
meaning as provided in section 32-324. 38
(b) Except as provided in subsection (c) of this section, (1) on and after 39
[January] July 1, 2035, one hundred per cent of the school buses that 40
provide transportation for [all school districts] each school district in the 41
state shall be zero-emission school buses or alternative fuel school buses, 42
and (2) on and after [January] July 1, 2040, [one hundred] ninety per cent 43
of the school buses that provide transportation for [all school districts] 44
each school district in the state shall be zero-emission school buses. 45
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(c) (1) On and after [January] July 1, 2030, [one hundred] ten per cent 46
of the school buses that provide transportation for [school districts 47
entirely within an environmental justice community as of July 1, 2022, 48
or in an area that encompasses at least one environmental justice 49
community as of July 1, 2022, ] each school district in a distressed 50
municipality shall be zero-emission school buses. 51
(2) On and after July 1, 2035, fifty per cent of the school buses that 52
provide transportation for each school district in a distressed 53
municipality shall be zero-emission school buses. 54
(3) On and after July 1, 2040, ninety per cent of the school buses that 55
provide transportation for each school district in a distressed 56
municipality shall be zero-emission school buses. 57
(d) (1) Not later than July 1, 2029, each distressed municipality shall 58
submit a plan and schedule to the Commissioner of Energy and 59
Environmental Protection that outlines how such distressed 60
municipality will achieve compliance with the provisions of this section. 61
(2) Not later than July 1, 2035, each municipality that is not a 62
distressed municipality shall submit a plan and schedule to the 63
commissioner that outlines how such municipality will achieve 64
compliance with the provisions of this section. 65
(e) On and after July 1, 2027, and until the school buses in a 66
municipality are zero -emission school buses in accordance with the 67
provisions of subsection (b) of this section, a carrier shall fuel, or cause 68
to be fueled, any fully diesel-powered school bus with a biodiesel blend 69
containing not less than twenty per cent biodiesel to the extent that such 70
biodiesel blend is available, unless the use of such biodiesel blend would 71
void the manufacturer's warranty on such school bus. 72
[(d)] (f) The Commissioner of Energy and Environmental Protection, 73
in consultation with the Connecticut Green Bank, shall establish and 74
administer a grant program for the purpose of providing [matching] a 75
portion of the funds necessary for municipalities, school districts and 76
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school bus operators [to submit federal grant applications in order ] to 77
maximize federal, state or other sources of funding or financing for the 78
purchase or lease of zero -emission school buses and electric vehicle 79
charging or fueling infrastructure. Applications for such grants shall be 80
filed with the commissioner at such time and in such manner as the 81
commissioner prescribes. The commissioner shall give preference to 82
applications concerning the purchase or lease of a zero-emission school 83
bus that will be operated [primarily in an environmental justice 84
community. The commissioner shall determine the amount a 85
municipality, school district or school bus operator shall be required to 86
provide to match such grant] in a distressed municipality. 87
[(e)] (g) The Commissioner of Energy and Environmental Protection 88
shall, within available funds and appropriations, provide 89
administrative and technical assistance to municipalities, school 90
districts and school bus operators that are transitioning to the use of 91
zero-emission school buses, applying for federal grants for such buses 92
and installing electric vehicle charging and fueling infrastructure. 93
Sec. 4. ( Effective July 1, 2026 ) (a) For the purposes described in 94
subsection (b) of this section, the State Bond Commission shall have the 95
power from time to time to authorize the issuance of bonds of the state 96
in one or more series and in principal amounts not exceeding in the 97
aggregate forty million dollars. 98
(b) The proceeds of the sale of such bonds, to the extent of the amount 99
stated in subsection (a) of this section, shall be used by the Department 100
of Energy and Environmental Protection for the purpose of 101
administering the grant program established pursuant to subsection (f) 102
of section 22a-201d of the general statutes, as amended by this act. 103
(c) All provisions of section 3-20 of the general statutes, or the exercise 104
of any right or power granted thereby, that are not inconsistent with the 105
provisions of this section are hereby adopted and shall apply to all 106
bonds authorized by the State Bond Commission pursuant to this 107
section. Temporary notes in anticipation of the money to be derived 108
from the sale of any such bonds so authorized may be issued in 109
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accordance with section 3 -20 of the general statutes and from time to 110
time renewed. Such bonds shall mature at such time or times not 111
exceeding twenty years from their respective dates as may be provided 112
in or pursuant to the resolution or resolutions of the State Bond 113
Commission authorizing such bonds. None of such bonds shall be 114
authorized except upon a finding by the State Bond Commission that 115
there has been filed with it a request for such authorization that is signed 116
by or on behalf of the Secretary of the Office of Policy and Management 117
and states such terms and conditions as said commission, in its 118
discretion, may require. Such bonds issued pursuant to this section shall 119
be general obligations of the state and the full faith and credit of the state 120
of Connecticut are pledged for the payment of the principal of and 121
interest on such bonds as the same become due, and accordingly and as 122
part of the contract of the state with the holders of such bonds, 123
appropriation of all amounts necessary for punctual payment of such 124
principal and interest is hereby made, and the State Treasurer shall pay 125
such principal and interest as the same become due. 126
Sec. 5. (Effective July 1, 2026) (a) The Commissioner of Economic and 127
Community Development, or the commissioner's designee, shall 128
convene a working group to study and make recommendations 129
regarding (1) potential state policies and incentives to encourage the 130
utilization of freight rail for the transportation of goods within the state, 131
including, but not limited to, construction materials, metals and 132
industrial materials, agricultural and food products and municipal solid 133
waste, as defined in section 22a -207 of the general statutes, (2) 134
opportunities to expand freight rail infrastructure within the state, and 135
(3) the environmental, economic and transportation impacts of 136
increasing freight rail utilization. 137
(b) The working group shall consist of the Commissioners of 138
Transportation and Energy and Environmental Protection, or their 139
designees, the executive director of the Connecticut Port Authority and 140
any other member invited to participate by the Commissioner of 141
Economic and Community Development, including, but not limited to, 142
representatives of organizations representing the interests of 143
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manufacturers in the state, representatives of freight rail carriers, 144
collectors of solid waste and recyclable items and any other member as 145
deemed necessary by the Commissioner of Economic and Community 146
Development. The Commissioner of Economic and Community 147
Development shall serve as chairperson of the working group and shall 148
schedule the first meeting of the working group not later than 149
September 1, 2026. 150
(c) Not later than January 1, 2027, the Commissioner of Economic and 151
Community Development shall submit, in accordance with the 152
provisions of section 11 -4a of the general statutes, the results of such 153
study and any recommendations to the joint standing committee of the 154
General Assembly having cognizance of matters relating to 155
transportation. The working group shall terminate on the date that the 156
Commissioner of Economic and Community Development submits 157
such report or January 1, 2027, whichever is later. 158
This act shall take effect as follows and shall amend the following
sections:

Section 1 October 1, 2026 13b-23c
Sec. 2 July 1, 2026 PA 20-1, Sec. 21(g)
Sec. 3 July 1, 2026 22a-201d
Sec. 4 July 1, 2026 New section
Sec. 5 July 1, 2026 New section

Statement of Legislative Commissioners:
In Section 1, Subdiv. designators (1) and (2) were added for clarity, in
Section 3(b) and (c), references to "all school districts" were changed to
"[all school districts ] each school district " for clarity, in Section 3(a)(3),
"was" was changed to " is" for consistency with standard drafting
conventions, in Section 3(e), "subsection (c) of this section" was changed
to " subsection (b) of this section " for accuracy, and in Section 4(b),
"subsection (f) of" was inserted before "section 22a-201d" for clarity.

TRA Joint Favorable Subst.

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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 27 $ FY 28 $
Department of Economic &
Community Development
GF - Cost 150,000 None
Treasurer, Debt Serv. GF - Cost None See Below
Note: GF=General Fund

Municipal Impact:
Municipalities Effect FY 27 $ FY 28 $
Local and Regional School
Districts
See Below See Below See Below

Explanation
The bill makes various changes to transportation, resulting in the
fiscal impacts described below by section.
Sections 1 and 2 make various changes to the traffic light
modernization program, which is funded through General Obligation
(GO) bonds. Future General Fund debt service costs may be incurred or
incurred sooner due to the program changes to the degree that it causes
authorized GO bond funds to be expended or to be expended more
quickly than they otherwise would have been.
As of March 1, 2026, there is an unallocated bond balance of $98
million under the authorization, of which $75 million is available for the
traffic light modernization program. These sections do not change
overall GO bond authorization levels.
Section 3 delays and reduces costs to local and regional boards of
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education (BOEs) associated with existing school bus emissions
requirements. It also results in new costs to BOEs annually beginning in
FY 28. The section: (1) replaces the requirement for school districts in an
environmental justice community to have all zero -emission bu ses by
January 1, 2030 with a phase in for distressed municipalities only
beginning in FY 31 (starting at 10% and reaching 90% of buses are zero-
emission beginning in FY 41); (2) delays for six months (until FY 36) the
requirement that all school buses in all other districts be zero -emission
or alternative fuel; (3) delays for six months (until FY 41), and reduces,
to 90%, the requirement that all school buses in all other districts be zero-
emission; and (4) requires diesel buses to be fueled with a biodiesel
blend, beginning in FY 28.
These changes delay costs a district would incur in order to comply
with the requirement s. Additionally, they allow distressed
municipalities to more gradually shift their school bus fleets toward
compliance, compared to the previous deadline for environmental
justice communities, which may delay their costs. The requirement that
90% of school buses must be zero -emission, instead of all school buses,
potentially results in a savings to districts to the extent the lesser
requirement allows for decreased cos ts associated with fueling and
maintaining alternatives.
The requirement to fuel diesel buses with a biodiesel blend results in
a potential cost to districts, dependent on the need to winterize the
biodiesel blend and any associated cost increases in bussing contracts.
The section additionally may shift zero -emission bus grant program
funds from school districts, towns, and bus operators in environmental
justice communities to those in distressed municipalities , beginning in
FY 27 . All distressed municipalities are also environmental justice
communities; some environmental justice communities are U.S. census
tracts that are not within distressed municipalities.
Section 4 authorizes $40 million in General Obligation bonds for the
zero-emission bus grant program. To the extent bonds are fully
allocated and expended, total debt service is expected to be
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approximately $61 million over the 20-year duration of the bonds.
Section 5 results in a one -time cost of $150,000 in FY 27 to the
Department of Economic and Community Development (DECD) by
requiring the agency to convene a working group to study and make
recommendations by January 1, 2027 regarding freight rail utilization. It
is anticipated that DECD will require consultation services as the agency
does not have the expertise or resources necessary to analyze this topic.
The cost may be partially mitigated to the extent that the working
group's consulting agencies, including the Departments of
Transportation and Energy and Environmental Protection and the
Connecticut Port Authority, can provide relevant expertise.
The Out Years
The annualized ongoing fiscal impact identified above would
continue into the future subject to inflation and the terms of any bonds
issued.

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OLR Bill Analysis
sSB 416

AN ACT CONCERNING TRANSPORTATION SYSTEM
MODERNIZATION.

TABLE OF CONTENTS:
SUMMARY
§§ 1 & 2 — TRAFFIC SIGNAL GRANT PROGRAM
Requires DOT to give priority under the traffic signal modernization
grant program to projects located in heavily congested areas, rather
than to grant applications submitted by two or more municipalities
§ 3 — ZERO-EMISSION SCHOOL BUS REQUIREMENTS
Requires 90%, rather than 100%, of school buses to be zero -emission
by 2040 and sets earlier interim deadlines for distressed
municipalities; eliminates the requirement that environmental justice
communities fully transition to zero -emission school buses b y 2030;
requires municipalities to submit plans outlining how they will meet
the requirements
§ 3 — BIODIESEL IN SCHOOL BUSES
Starting July 1, 2027, requires school bus carriers to fuel any fully
diesel-powered school bus with a biodiesel blend that contains at least
20% biodiesel, unless doing so would void the manufacturer’s
warranty
§§ 3 & 4 — ZERO-EMISSION SCHOOL BUS GRANT PROGRAM
Authorizes $40 million in general obligation bonds for DEEP’s zero -
emission school bus grant program; modifies program requirements,
including by broadening the purposes for which grants may be
awarded beyond providing matching funds for federal grant
applications
§ 5 — FREIGHT RAIL WORKING GROUP
Requires the DECD commissioner, or his designee, to convene a
working group to study, among other things, freight rail’s impacts
and policies to encourage its use to transport goods in the state
BACKGROUND
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SUMMARY
This bill modifies the traffic signal modernization grant program and
zero-emission school bus requirements, establishes a biodiesel
requirement for school buses, and creates a freight rail working group.
A section-by-section analysis follows.
EFFECTIVE DATE: July 1, 2026, except the changes to the traffic
signal grant program (§ 1) are effective October 1, 2026.
§§ 1 & 2 — TRAFFIC SIGNAL GRANT PROGRAM
Requires DOT to give priority under the traffic signal modernization grant program to
projects located in heavily congested areas, rather than to grant applications submitted by
two or more municipalities
Existing law requires the Department of Transportation ( DOT)
commissioner to establish a matching grant program to help
municipalities modernize their traffic signal equipment and operations
to make them responsive to congestion and to reduce idling. It also
earmarks $75 million from a DOT bond authorization for a matching
grant to modernize existing traffic signal equipment and operations.
Under current law, DOT must give preference to grant applications
submitted by, and create incentives for projects implemented by, two or
more municipalities. The bill instead requires DOT to give priority to
projects located in heavily congested areas.
§ 3 — ZERO-EMISSION SCHOOL BUS REQUIREMENTS
Requires 90%, rather than 100%, of school buses to be zero-emission by 2040 and sets
earlier interim deadlines for distressed municipalities; eliminates the requirement that
environmental justice communities fully transition to zero-emission school buses by 2030;
requires municipalities to submit plans outlining how they will meet the requirements
Deadline Extensions
Existing law requires school districts to gradually transition to zero -
emission school buses (see BACKGROUND) and sets deadlines for
doing so.
Under current law, 100% of school buses that provide transportation
for school districts in the state must be (1) either zero -emission or
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alternative-fuel (such as natural gas or propane) by January 1, 2035, and
(2) zero -emission only by January 1, 2040. The bill (1) lowers the
percentage of buses in each district that must be zero -emission in 2040
to 90% and (2) extends these deadlines to July, rather than January in
the same years, aligning with the legal school year (July 1 to June 30 of
the following year).
Requirement in Environmental Justice Communities and
Distressed Municipalities
Current law sets an earlier deadline for some school districts,
requiring that 100% of buses providing transportation for school
districts located in or containing at least one environmental justice
community (as of July 1, 2022) be zero -emission by January 1, 2030. By
law, an environmental justice community is ( 1) any U.S. census block
group, as determined by the most recent census, for which at least 30%
of the population consists of low -income people who are not
institutionalized and have an income below 200% of the federal poverty
level or (2) a distressed municipality (CGS § 22a-20a).
The bill eliminates this requirement and instead sets earlier deadlines
for school buses in municipalities that were distressed municipalities on
July 1, 2026 (see BACKGROUND). Because the definition of
environmental justice community includes distressed m unicipalities,
this change effectively reduces the number of municipalities who must
meet earlier deadlines for transitioning to zero-emission school buses.
Under the bill, buses providing transportation for each school district
in a distressed municipality must be (1) 10% zero -emission by July 1,
2030, and (2) 50% zero-emission by July 1, 2035. Like all school districts
under the bill, the school buses in a distressed municipality must also
be 90% zero-emission by July 1, 2040.
Plans
The bill requires municipalities to submit plans and schedules
outlining how they will comply with the bill’s requirements to the
Department of Energy and Environmental Protection ( DEEP)
commissioner. Distressed municipalities must submit their plans by
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July 1, 2029, and all other municipalities must do so by July 1, 2035.
§ 3 — BIODIESEL IN SCHOOL BUSES
Starting July 1, 2027, requires school bus carriers to fuel any fully diesel-powered school
bus with a biodiesel blend that contains at least 20% biodiesel, unless doing so would void
the manufacturer’s warranty
Starting July 1, 2027, the bill requires school bus carriers to fuel any
fully diesel-powered school bus with a biodiesel blend that contains at
least 20% biodiesel, unless doing so would void the manufacturer’s
warranty. This requirement applies to the extent the fuel is available and
until the school buses in the municipality are zero-emission as required
under the bill.
§§ 3 & 4 — ZERO-EMISSION SCHOOL BUS GRANT PROGRAM
Authorizes $40 million in general obligation bonds for DEEP’s zero-emission school bus
grant program; modifies program requirements, including by broadening the purposes for
which grants may be awarded beyond providing matching funds for federal grant
applications
Current law requires DEEP to administer a grant program to give
matching funds to municipalities, school districts, and bus operators
who apply for federal grants to purchase zero -emission school buses
and related charging infrastructure in order to maximi ze federal
funding.
The bill authorizes $40 million in general obligation bonds for DEEP
to fund the zero -emission school bus grant program. The bonds are
subject to standard issuance procedures and have a maximum term of
20 years.
The bill also makes several changes to this program. First, it broadens
the purposes for which grants can be awarded by eliminating the
requirement that the program provide matching funds for federal
grants and instead requires that it provide a portion of funds necessary
to maximize federal, state, or other sources of funding or financing. It
also requires DEEP to (1) administer the program in consultation with
the Connecticut Green Bank and (2) give preference to grant
applications for school buses that w ill operate in a distressed
municipality rather than an environmental justice community,
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conforming with the change to the zero -emission school bus transition
requirements (see above).
§ 5 — FREIGHT RAIL WORKING GROUP
Requires the DECD commissioner, or his designee, to convene a working group to study,
among other things, freight rail’s impacts and policies to encourage its use to transport
goods in the state
The bill requires the Department of Economic and Community
Development (DECD) commissioner, or his designee, to convene a
working group to study and make recommendations on:
1. potential state policies and incentives to encourage using freight
rail to transport goods within the state, such as construction
materials, industrial materials, agricultural and food products ,
and municipal solid waste;
2. opportunities to expand freight rail infrastructure in the state ;
and
3. the environmental, economic, and transportation impacts of
increasing freight rail use.
Under the bill, the DECD commissioner serves as chairperson of the
group, and the DEEP and DOT commissioners (or their designees) and
the Connecticut Port Authority executive director must be members.
The group must also include any other member the DECD
commissioner invites to participate, including representatives of
manufacturer organizations, freight rail carriers, solid waste an d
recyclable collectors, and other members the DECD commissioner
deems necessary.
The DECD commissioner must schedule the working group’s first
meeting by September 1, 2026. DECD must report its findings and
recommendations to the Transportation Committee by January 1, 2027.
The group ends when it submits its report or January 1, 2027, whichever
is later.
BACKGROUND
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Zero-Emission School Bus
By law, a zero -emission school bus is a school bus certified by the
Environmental Protection Agency (EPA) as having a drivetrain that
does not produce any exhaust emission of any EPA -listed air pollutant
or greenhouse gas under any possible operational mode or condition (42
U.S.C. § 16091(a)(8)).
Distressed Municipalities
DECD annually designates distressed municipalities, based on high
unemployment and poverty, aging housing stock, and low or declining
rates of job, population, and per capita income growth (CGS § 32-9p).
The current (issued October 2025) distressed municipalities are
Ansonia, Bridgeport, Bristol, Chaplin, Derby, East Hartford, East
Haven, Griswold, Groton, Hartford, Killingly, Lisbon, Mansfield,
Meriden, Montville, Naugatuck, New Britain, New Haven, New
London, North Canaan, North Stonington, Norwich, Plainfield,
Plymouth, Putnam, Preston, Sprague, Stafford, Sterling, Stratford,
Torrington, Voluntown, Waterbury, West Haven, Wil lington,
Winchester, and Windham.
Related Bill
HB 5470, favorably reported by the Energy and Technology
Committee, eliminates the requirement to fully transition to zero -
emission buses and instead sets a deadline by which all school buses
must be zero-emission, alternative fuel, or hybrid.
COMMITTEE ACTION
Transportation Committee
Joint Favorable Substitute
Yea 25 Nay 11 (03/16/2026)