| 18 | | - | (a) [After the accounts for the General Fund have been closed for each fiscal year and the Comptroller has determined the amount of unappropriated surplus in said fund, after any amounts required by provision of law to be transferred for other purposes have been deducted, the amount of such surplus shall be transferred by the State Treasurer to a special fund to be known as the Budget Reserve Fund.] The State Treasurer shall transfer the following amounts into a special fund to be known as the Budget Reserve Fund: (1) An amount equal to fifty per cent of any projected surplus in the General Fund for the current fiscal year as determined in the Comptroller's January cumulative monthly financial statement pursuant to section 3-115; (2) any amounts received from a sale of surplus state property pursuant to subsection (c) of section 4b-21; (3) any amounts in excess of the estimated revenues in the revised consensus revenue estimate issued on April thirtieth pursuant to section 2-36c; and (4) an amount equal to any unappropriated surplus remaining in the General Fund after any amounts required by provision of law to be transferred for other purposes have been deducted as determined by the Comptroller after the accounts for the General Fund have been closed for each fiscal year. The State Treasurer shall transfer the amount in subdivision (1) of this subsection not later than five days after the Comptroller issues the January cumulative monthly financial statement pursuant to section 3-115. When the amount in [said fund] the Budget Reserve Fund equals [ten] fifteen per cent of the net General Fund appropriations for the fiscal year in progress, no further transfers shall be made by the Treasurer to said fund and the amount of such surplus in excess of that transferred to said fund shall be deemed to be appropriated to the State Employees Retirement Fund, in addition to the contributions required pursuant to section 5-156a, but not exceeding five per cent of the unfunded past service liability of the system as set forth in the most recent actuarial valuation certified by the Retirement Commission. Such surplus in excess of the amounts transferred to the Budget Reserve Fund and the state employees retirement system shall be deemed to be appropriated for: [(1)] (A) Redeeming prior to maturity any outstanding indebtedness of the state selected by the Treasurer in the best interests of the state; [(2)] (B) purchasing outstanding indebtedness of the state in the open market at such prices and on such terms and conditions as the Treasurer shall determine to be in the best interests of the state for the purpose of extinguishing or defeasing such debt; [(3)] (C) providing for the defeasance of any outstanding indebtedness of the state selected by the Treasurer in the best interests of the state by irrevocably placing with an escrow agent in trust an amount to be used solely for, and sufficient to satisfy, scheduled payments of both interest and principal on such indebtedness; or [(4)] (D) any combination of these methods. Pending the use or application of such amount for the payment of interest and principal, such amount may be invested in [(A)] (i) direct obligations of the United States government, including state and local government treasury securities that the United States Treasury issues specifically to provide state and local governments with required cash flows at yields that do not exceed Internal Revenue Service arbitrage limits, [(B)] (ii) obligations guaranteed by the United States government, and [(C)] (iii) securities backed by United States government obligations as collateral and for which interest and principal payments on the collateral generally flow immediately through to the security holder. |
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| 30 | + | (1) "Capital gains" or "gains from the sale or exchange of capital assets" means (A) net gain as determined for federal income tax purposes, after due allowance for losses and holding periods, from (i) sales or exchanges of capital assets or assets treated as capital assets, other than notes, bonds or other obligations of the state or any of the political subdivisions thereof, or its or their respective agencies or instrumentalities, or (ii) transactions or events taxable to the taxpayer as such sales or exchanges, and being the net amount includable in the taxpayer's adjusted gross income, with respect to all such sales, exchanges, transactions or events, under the provisions of the internal revenue code in effect for the taxable year, exclusive of any gain or loss from the holding or trading of any dealer equity options, as defined in Section 1256 of the Internal Revenue Code, and exclusive of any gain or loss of a nonresident taxpayer other than from the sale or exchange of real property located in the state, provided such property is a capital asset or an asset treated as a capital asset or such sale or exchange is a transaction or event taxable as a sale or exchange of a capital asset, and (B) net gains from sales or exchanges of certain property, as determined in accordance with Internal Revenue Service Form 4797, exclusive of any such net gain includable under subparagraph (A) in this definition of gains from the sale or exchange of capital assets; |
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| 22 | | - | Notwithstanding the provisions of section 4-30a, as amended by this act, after the accounts for the fiscal year ending June 30, 2010, and each fiscal year thereafter, until and including the fiscal year ending June 30, 2017, are closed, if the Comptroller determines there exists an unappropriated surplus in the General Fund, the Secretary of the Office of Policy and Management, in consultation with the State Treasurer, shall use the amount of any such surplus [shall first be used] for either redeeming prior to maturity any outstanding notes issued under section 3-20g [, and any amount beyond that required to redeem such notes shall be used] or to reduce the obligations of the state under the financing plan authorized under section 88 of public act 09-3 of the June special session. |
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| 34 | + | (3) "Exempt dividend" means any dividend or part thereof, other than a capital gain dividend, paid by a regulated investment company where at least fifty per cent of the value of such company's total assets consists of obligations with respect to which taxation by this state is prohibited by federal law, and such regulated investment company designates such dividend or part thereof as an exempt dividend in a written notice mailed to its shareholders not later than sixty days after the close of its taxable year; |
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| 24 | | - | Sec. 3. (NEW) (Effective from passage) Any payment to the state as a settlement of a court action shall, at the discretion of the Secretary of the Office of Policy and Management, be deposited in the state's trust fund for other post employment benefits, the State Employees Retirement Fund or the Teachers' Retirement Fund. |
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| 36 | + | (4) "Internal Revenue Code" or "code" means the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time; |
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| 37 | + | |
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| 38 | + | (5) "Interest income" means (A) any interest income taxable for federal income tax purposes, exclusive of any such income with respect to which taxation by any state is prohibited by federal law, less any amounts forfeited to a bank, savings bank, savings and loan association, credit union or other depository institution, wherever located, as a penalty for premature withdrawal of funds from a time savings account, certificate of deposit or similar class of deposit, and (B) any interest income from obligations issued by or on behalf of any state, political subdivision thereof, or public instrumentality, state or local authority, district, or similar public entity, exclusive of such income from obligations issued by or on behalf of the state, any political subdivision thereof, or public instrumentality, state or local authority, district, or similar public entity created under the laws of the state; |
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| 39 | + | |
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| 40 | + | (6) "Resident" means an individual: (A) Who is domiciled in this state, provided, if the individual maintains no permanent place of abode in this state, maintains a permanent place of abode elsewhere and spends in the aggregate not more than thirty days of the taxable year in this state, the individual shall be deemed not a resident; or (B) who is not domiciled in this state but maintains a permanent place of abode in this state and is in this state for an aggregate of more than one hundred eighty-three days of the taxable year, unless the individual, not being domiciled in this state, is in the armed forces of the United States; |
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| 41 | + | |
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| 42 | + | (7) "Taxpayer" means (A) a married couple, both of whom are residents in this state, whether or not they file for the taxable year a single federal income tax return jointly, and (B) every other individual who is a resident in this state, who has earnings received, credited or accrued in any taxable year from gains from the sale or exchange of capital assets, or from dividends or interest income subject to tax under the provisions of the Internal Revenue Code, and any husband and wife when either of such husband or wife, or both, are not residents in this state and who file for the taxable year a single federal income tax return jointly, and every other individual who is not a resident in this state, who has earnings received, credited or accrued in any taxable year from gains from the sale or exchange of real property located in the state, provided such property is a capital asset or an asset treated as a capital asset or such sale or exchange is a transaction or event taxable as a sale or exchange of a capital asset. |
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| 43 | + | |
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| 44 | + | (b) Not later than July 1, 2012, the Department of Revenue Services shall calculate the amount of personal income tax paid to this state on that portion of Connecticut adjusted gross income equal to the capital gains, dividend and interest income includable in gross income for federal tax purposes. The amount of Connecticut income tax applicable to a taxpayer's capital gains, dividend and interest income shall be based upon the ratio of such capital gains, dividend and interest income to such taxpayer's total Connecticut adjusted gross income. The department shall calculate the total amount of personal income tax paid on said portion of Connecticut adjusted gross income and collected during the fiscal year ending June 30, 2012, and during the fiscal year ending June 30, 2013. The average of the amount collected during the two fiscal years shall represent the base amount. |
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| 45 | + | |
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| 46 | + | (c) On and after July 1, 2014, the Commissioner of Revenue Services shall segregate the amount of Connecticut income tax applicable to the total capital gains, dividend and interest income that is in excess of the base amount determined in accordance with subsection (b) of this section. In each succeeding fiscal year, the amount segregated shall be the amount that exceeds the amount segregated the previous fiscal year. |
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| 47 | + | |
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| 48 | + | (d) Amounts segregated in accordance with subsection (c) of this section shall used as follows: (1) Fifty per cent of such amounts shall be deposited in the Budget Reserve Fund; (2) twenty-five per cent shall be used to make payments on outstanding debt in excess of the payments currently due; and (3) twenty-five per cent of such amounts shall be used to make payments into public pension funds in excess of the annual required contribution. |
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