Senate Bill No. 570
Public Act No. 19-54
AN ACT CONCERNING OP PORTUNITY ZONES.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Section 32-1d of the general statutes is repealed and the
following is substituted in lieu thereof (Effective July 1, 2019):
The commissioner shall appoint a Deputy Commissioner of
Economic and Community Development who shall be qualified by
training and experience for the duties of the office of commissioner
and shall, in the absence, disability or disqualification of the
commissioner, perform all the functions and have all the powers and
duties of said office. In addition to any other powers, duties or
responsibilities, the Deputy Commissioner of Economic and
Community Development shall act as the state's primary point of
contact for all state programs relating to the federal opportunity zone
program, established pursuant to the Tax Cuts and Jobs Act of 2017,
P.L. 115-97. The position of the Deputy Commissioner of Economic
and Community Development shall be exempt from the classified
service.
Sec. 2. Subdivision (1) of subsection (b) of section 32-726 of the
general statutes is repealed and the following is substituted in lieu
thereof (Effective July 1, 2019): Senate Bill No. 570
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(b) (1) The commissioner shall establish an office of the permit
ombudsman for the purpose of expediting review of permit
applications for projects that would (A) create at least one hundred
jobs, (B) create fifty jobs, if such project is to be located in an enterprise
zone designated pursuant to section 32-70, (C) be located in a
brownfield, as defined in section 32-760, (D) be compatible with the
state's responsible growth initiatives, (E) be considered transit-oriented
development, as defined in section 13b-79kk, (F) develop green
technology business, (G) develop bioscience business, (H) develop any
of the state's federally designated opportunity zones, or [(H)] (I) meet
the criteria set forth in subdivision (2) of this subsection. Projects
ineligible for review under this section are projects for which the
primary purpose is to (i) effect the final disposal of solid waste,
biomedical waste or hazardous waste in this state, (ii) produce
electrical power, unless the production of electricity is incidental and
not the primary function of the project, (iii) extract natural resources,
(iv) produce oil, or (v) construct, maintain or operate an oil, petroleum,
natural gas or sewage pipeline. For purposes of this section,
"responsible growth initiatives" includes the principles of smart
growth, as defined in section 1 of public act 09-230, and "green
technology business" means an eligible business with not less than
twenty-five per cent of its employment positions being positions in
which green technology is employed or developed and may include
the occupation codes identified as green jobs by the Department of
Economic and Community Development and the Labor Department
for such purposes. The permit ombudsman shall also assist and
provide guidance to bioscience businesses seeking to expedite the
review and approval of permits required by local zoning authorities.
Sec. 3. (Effective from passage) (a) Notwithstanding any provision of
the general statutes, the Department of Economic and Community
Development shall identify and market ten geographically diverse,
vacant, state-owned properties located in federally designated Senate Bill No. 570
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opportunity zones from the priority list established pursuant to
subsection (b) of this section. Selection of such state-owned properties
shall be in accordance with the provisions of subsection (c) of this
section.
(b) On or before February 1, 2020, the Department of Economic and
Community Development shall develop a priority list of
geographically diverse, vacant, state-owned properties located in
federally designated opportunity zones to be marketed based on
criteria to include, but not be limited to, properties that (1) have
economic development viability, (2) are located in a federally
designated opportunity zone, (3) have access to transportation or other
infrastructure, (4) the development of which would be consistent with
the department's plan of economic development in federally
designated opportunity zones, and (5) the transfer of which to a
private party would not conflict with state law.
(c) The Department of Economic and Community Development
shall solicit proposals from companies interested in purchasing any of
the state-owned properties on the priority list developed pursuant to
subsection (b) of this section. The Commissioner of Economic and
Community Development shall review such proposals and match up
to ten of the state-owned properties with such companies. The
commissioner may (1) sell, notwithstanding chapter 59 of the general
statutes, any such property owned, possessed or controlled by the
Department of Economic and Community Development to such
companies, or (2) present such proposals to the state agency that owns,
possesses or controls such property, which may sell, notwithstanding
chapter 59 of the general statutes, such property to such companies.
Sec. 4. (Effective from passage) Not later than September 1, 2019, and
within available appropriations, the Department of Economic and
Community Development shall create and maintain an Internet web
site that is specifically dedicated to marketing and promoting state- Senate Bill No. 570
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owned properties located in federally designated opportunity zones,
and develop and implement a marketing campaign for such properties
and Internet web site.
Sec 5. (Effective from passage) Not later than February 1, 2020, and
within available appropriations, the Department of Economic and
Community Development shall host an Opportunity Connecticut
conference to highlight state programs relating to opportunity zones
and to network opportunity zone funds and opportunity zone project
sponsors.
Sec. 6. (Effective from passage) The Department of Economic and
Community Development shall, within available appropriations,
develop marketing materials that highlight the state's economic
development strategy relating to federally designated opportunity
zones and methods that may be used by the state and municipalities to
add value to such opportunity zones.
Sec. 7. Section 10-416c of the general statutes is repealed and the
following is substituted in lieu thereof (Effective July 1, 2019):
(a) As used in this section, the following terms shall have the
following meanings unless the context clearly indicates another
meaning:
(1) "Officer" means the State Historic Preservation Officer
designated pursuant to 36 CFR 61.2;
(2) "Certified historic structure" means any property that: (A) Is
listed individually on the National or State Register of Historic Places,
or (B) is located in a district listed on the National or State Register of
Historic Places and has been certified by the officer as contributing to
the historic character of such district;
(3) "Certified rehabilitation" means any rehabilitation of a certified Senate Bill No. 570
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historic structure for (A) residential use of five units or more, (B)
mixed residential and nonresidential uses, or (C) nonresidential use
consistent with the historic character of such property or the district in
which such property is located, as determined by regulations adopted
by the Department of Economic and Community Development;
(4) "Owner" means any person, firm, limited liability company,
nonprofit or for-profit corporation or other business entity or
municipality that possesses title to an historic structure and that
undertakes the rehabilitation of such structure;
(5) "Placed in service" means the completion of substantial
rehabilitation work that would allow for occupancy of the entire
building or an identifiable portion of the building;
(6) "Qualified rehabilitation expenditures" means any costs incurred
for the physical construction involved in the rehabilitation of a
certified historic structure, excluding: (A) The owner's personal labor,
(B) the cost of a new addition, except as required to comply with any
provision of the State Building Code or the Fire Safety Code, and (C)
any nonconstruction cost such as architectural fees, legal fees and
financing fees;
(7) "Rehabilitation plan" means any narrative, construction plans
and specifications for the proposed rehabilitation of a certified historic
structure in sufficient detail for evaluation of compliance with the
Secretary of the Interior's Standards for Rehabilitation, as established
in 36 CFR 67;
(8) "Substantial rehabilitation" or "substantially rehabilitate" means
the qualified rehabilitation expenditures of a certified historic structure
that exceed twenty-five per cent of the assessed value of such
structure;
(9) "Affordable housing" has the same meaning as provided in Senate Bill No. 570
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section 8-39a; and
(10) "Project" means an undertaking involving rehabilitation work to
a certified historic structure and any attached or adjacent new
construction, associated demolition or improvements on the site that
may affect the historic character or significance of the certified historic
structure.
(b) (1) The Department of Economic and Community Development
shall administer a system of tax credit vouchers within the resources,
requirements and purposes of this section for owners rehabilitating
certified historic structures.
(2) The credit authorized by this section shall be available in the tax
year in which the substantially rehabilitated certified historic structure
is placed in service. In the case of projects completed in phases, the tax
credit shall be prorated to the substantially rehabilitated identifiable
portion of the building placed in service. If the tax credit is more than
the amount owed by the taxpayer for the year in which the
substantially rehabilitated certified historic structure is placed in
service, the amount that is more than the taxpayer's tax liability may be
carried forward and credited against the taxes imposed for the
succeeding five years or until the full credit is used, whichever occurs
first.
(3) In the case of projects completed in phases, the Department of
Economic and Community Development may issue vouchers for the
substantially rehabilitated identifiable portion of the building placed in
service.
(4) If a credit is allowed under this section for rehabilitation of a
certified historic structure with multiple owners, such credit shall be
passed through to such owners, or persons designated as partners or
members of such owners, pro rata or pursuant to an agreement among Senate Bill No. 570
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such owners, or persons designated as partners or members of such
owners, documenting an alternative distribution method without
regard to other tax or economic attributes of such owners.
(5) Any owner entitled to a credit under this section may sell,
assign, or otherwise transfer such credit, in whole or in part, to one or
more persons, as defined in section 12-1, provided any credit, after
issuance, may be sold, assigned or otherwise transferred, in whole or
in part, not more than three times. Such person shall be entitled to
offset the tax imposed under chapter 207, 208, 209, 210, 211 or 212 as if
such transferee had incurred the qualified rehabilitation expenditure.
(6) If a credit under this section is sold, assigned or otherwise
transferred, whether by the owner or any subsequent transferee, the
transferor and transferee shall jointly submit written notification of
such transfer to the Department of Economic and Community
Development not later than thirty days after such transfer. The
notification after each transfer shall include the credit voucher number,
the date of transfer, the amount of such credit transferred, the tax
credit balance before and after the transfer, the tax identification
numbers for both the transferor and the transferee, and any other
information required by the department. Failure to comply with this
subsection shall result in a disallowance of the tax credit until there is
full compliance on the part of the transferor and the transferee, and for
a second or third transfer, on the part of all subsequent transferors and
transferees.
(7) The Department of Economic and Community Development
shall provide a list to the Commissioner of Revenue Services, on an
annual basis, detailing the credits that have been approved for the
most recent fiscal year and all sales, assignments and transfers thereof
that were made under this section for said year.
(c) The Department of Economic and Community Development Senate Bill No. 570
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may adopt regulations, in accordance with chapter 54, to carry out the
purposes of this section. Such regulations shall include provisions for:
(1) The filing of applications, (2) the rating criteria for evaluating
applications, and (3) the timely approval of applications by the
department. The rating criteria for evaluating applications shall give
priority to applications of owners rehabilitating certified historic
structures located in federally designated opportunity zones.
(d) For the purpose of seeking a tax credit pursuant to subsection (b)
of this section, prior to beginning any rehabilitation work on a certified
historic structure, the owner shall submit to the officer (1) (A) a
rehabilitation plan for a determination of whether such rehabilitation
work meets the Secretary of the Interior's Standards for Rehabilitation,
as established in 36 CFR 67, and (B) if such rehabilitation work is
planned to be undertaken in phases, a complete description of each
such phase, with anticipated schedules for completion; (2) an estimate
of the qualified rehabilitation expenditures; and (3) for projects
pursuant to subdivision [(2)] (3) of subsection (e) of this section, (A) the
number of units of affordable housing to be created, (B) the proposed
rents or sale prices of such units, and (C) the median income for the
municipality where the project is located. For projects under
subdivision [(2)] (3) of subsection (e) of this section, the owner shall
submit a copy of data required under subdivision (3) of this subsection
to the Department of Housing.
(e) If the officer certifies that the rehabilitation plan conforms to the
Secretary of the Interior's Standards for Rehabilitation, as established
in 36 CFR 67, the Department of Econom ic and Community
Development shall reserve for the benefit of the owner an allocation
for a tax credit equivalent to (1) twenty-five per cent of the projected
qualified rehabilitation expenditures, (2) thirty per cent of the
projected qualified rehabilitation expenditures if the certified historic
structure is located in a federally designated opportunity zone, or [(2)] Senate Bill No. 570
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(3) thirty per cent of the projected qualified rehabilitation expenditures
if (A) at least twenty per cent of the units are rental units and qualify as
affordable housing, or (B) at least ten per cent of the units are
individual homeownership units and qualify as affordable housing.
No tax credit shall be allocated for the purposes of subdivision [(2)] (3)
of this subsection unless an applicant received a certificate from the
Commissioner of Housing pursuant to section 8-37lll confirming that
the project complies with the definition of affordable housing under
section 8-39a.
(f) Following the completion of rehabilitation of a certified historic
structure in its entirety or in phases to an identifiable portion of the
building, any owner who seeks a tax credit pursuant to subsection (b)
of this section shall notify the officer that such rehabilitation is
complete. Such owner shall provide the officer with documentation of
work performed on the certified historic structure and shall submit
certification of the costs incurred in rehabilitating the certified historic
structure. The officer shall review such rehabilitation and verify its
compliance with the rehabilitation plan. Following such verification,
the Department of Economic and Community Development shall issue
a tax credit voucher to such owner or to the taxpayer named by such
owner as contributing to the rehabilitation. The tax credit voucher shall
be in an amount equivalent to the lesser of the tax credit reserved upon
certification of the rehabilitation plan under the provisions of
subsection (e) of this section or (1) twenty-five per cent of the actual
qualified rehabilitation expenditures, or (2) for projects including
affordable housing pursuant to subdivision [(2)] (3) of subsection (e) of
this section, thirty per cent of the actual qualified rehabilitation
expenditures. In order to obtain a credit against any state tax due that
is specified in subsection (g) of this section, the holder of the tax credit
voucher shall file the voucher with the holder's state tax return.
(g) The Commissioner of Revenue Services shall grant a tax credit to Senate Bill No. 570
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a taxpayer holding the tax credit voucher issued in accordance with
subsections (b) to (i), inclusive, of this section against any tax due
under chapter 207, 208, 209, 210, 211 or 212 in the amount specified in
the tax credit voucher. Such taxpayer shall submit the voucher and the
corresponding tax return to the Department of Revenue Services.
(h) The Department of Economic and Community Development
may charge any owner seeking a tax credit pursuant to subsection (b)
of this section an application fee in an amount not to exceed ten
thousand dollars to cover the cost of administering the program
established pursuant to this section.
(i) The aggregate amount of all tax credits that may be reserved by
the Department of Economic and Community Development upon
certification of rehabilitation plans pursuant to subsections (b) to (h),
inclusive, of this section shall not exceed thirty-one million seven
hundred thousand dollars in any fiscal year. No project may receive
tax credits in an amount exceeding four million five hundred thousand
dollars.
(j) On or before October 1, 2015, and annually thereafter, the
Department of Economic and Community Development shall report,
in accordance with section 11-4a, the total amount of tax credits
reserved for the previous fiscal year pursuant to subsections (b) to (i),
inclusive, of this section, to the joint standing committees of the
General Assembly having cognizance of matters relating to commerce
and finance, revenue and bonding. Each such report shall include the
following information for each project for which a tax credit has been
reserved: (1) The total project costs, (2) the value of the tax credit
reservation pursuant to subdivision (1) of subsection (e) of this section,
(3) a statement whether the reservation is for mixed-use and if so, the
proportion of the project that is not residential, and (4) the number of
residential units to be created, and, for reservations pursuant to
subdivision [(2)] (3) of subsection (e) of this section, the value of the Senate Bill No. 570
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reservation and percentage of residential units that will qualify as
affordable housing.
Sec. 8. Subdivision (1) of subsection (g) of section 32-9t of the
general statutes is repealed and the following is substituted in lieu
thereof (Effective July 1, 2019):
(g) (1) The commissioner, upon consideration of the application, the
revenue impact assessment and any additional information that the
commissioner requires concerning a proposed investment, may
approve an investment if the commissioner concludes that the project
in which such investment is to be made is an eligible urban
reinvestment project or an eligible industrial site investment project.
The commissioner shall give priority to applications for projects
located in federally designated opportunity zones. If the commissioner
rejects an application, the commissioner shall specifically identify the
defects in the application and specifically explain the reasons for the
rejection. The commissioner shall render a decision on an application
not later than ninety days from its receipt. The amount of the
investment so approved shall not exceed the greater of: (A) The
amount of state revenue that will be generated according to the
revenue impact assessment prepared under this subsection; or (B) the
total of state revenue and local revenue generated according to such
assessment in the case of a manufacturing business with North
American Industrial Classification codes of 339999, 311211 through
312140, 324191 and 325412 that is relocating to a site in Connecticut
from out-of-state, provided the relocation will result in new
development of at least seven hundred twenty-five thousand square
feet in a state-sponsored industrial park.
Sec. 9. (Effective from passage) The Commissioner of Economic and
Community Development, in consultation with the Commissioners of
Energy and Environmental Protection, Transportation and Housing
and the Secretary of the Office of Policy and Management, shall Senate Bill No. 570
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conduct a study relating to the federal opportunity zone program,
established pursuant to the Tax Cuts and Jobs Act of 2017, P.L. 115-97,
and how the state may incentivize the use of such program in the state.
Such study shall: (1) Identify corporations and other beneficiaries of
capital gains within the state to develop a strategy that focuses such
corporations and other beneficiaries' qualified opportunity fund
investments locally and encourages a cycling of capital within the
state; (2) identify existing state incentive programs that may be used in
conjunction with opportunity zone benefits; (3) identify existing
incentives for businesses participating in the small business express
program to move to opportunity zones and recommend additional
incentives, including, but not limited to, reducing the amount of time a
business is required to be in business to qualify for a grant and
increasing the grant amount for every job created; (4) develop a plan to
issue bonds of the state for the purpose of providing low-interest loans
to investors who develop mixed-income housing in the state's
opportunity zones; (5) recommend incentives for investors to develop
mixed-income housing that utilizes solar power or other renewable
energy sources in the state's opportunity zones; (6) identify any
agency's policies or regulations that may be amended to facilitate
investment in federally designated opportunity zones; (7) identify any
agency's discretionary grant processes that may be amended to include
federally designated opportunity zone criteria; and (8) develop a plan
to use social impact bonds to encourage private investment in federally
designated opportunity zones. Not later than February 1, 2020, the
commissioner shall submit a report on the results of such study,
including recommendations for any requisite legislative proposals, to
the joint standing committee of the General Assembly having
cognizance of matters relating to commerce, in accordance with the
provisions of section 11-4a of the general statutes.
Sec. 10. Subsection (c) of section 32-765 of the general statutes is
repealed and the following is substituted in lieu thereof (Effective July Senate Bill No. 570
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1, 2019):
(c) An applicant for a loan pursuant to this section shall submit an
application to the Commissioner of Economic and Community
Development on forms provided by the commissioner and with such
information the commissioner deems necessary, including, but not
limited to: (1) A description of the proposed project; (2) an explanation
of the expected benefits of the project in relation to the purposes of this
section; (3) information concerning the financial and technical capacity
of the applicant to undertake the proposed project; (4) a project budget;
and (5) a description of the condition of the brownfield involved,
including the results of any environmental assessment of the
brownfield in the possession of or available to the applicant. The
commissioner shall provide loans based upon project merit and
viability, the economic and community development opportunity,
municipal support, contribution to the community's tax base, past
experience of the applicant, compliance history and ability to pay. For
applications received on and after July 1, 2019, the commissioner shall
give priority to proposed projects located in federally designated
opportunity zones.
Sec. 11. Subsections (c) and (d) of section 32-763 of the general
statutes are repealed and the following is substituted in lieu thereof
(Effective July 1, 2019):
(c) The commissioner may approve, reject or modify any application
properly submitted in accordance with the provisions of this section.
In reviewing an application and determining the amount of the grant,
if any, to be provided, the commissioner shall consider the following
criteria: (1) The availability of funds; (2) the estimated costs of
assessing and remediating the brownfield, if known; (3) the relative
economic condition of the municipality in which the brownfield is
located; (4) the relative need of the project for financial assistance; (5)
the degree to which a grant under this section is necessary to induce Senate Bill No. 570
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the applicant to undertake the project; (6) the public health and
environmental benefits of the project; (7) the relative benefits of the
project to the municipality, the region and the state, including, but not
limited to, the extent to which the project will likely result in a
contribution to the municipality's tax base, the retention and creation
of jobs and the reduction of blight; (8) the time frame in which the
contamination occurred; (9) the relationship of the applicant to the
person or entity that caused the contamination; (10) the length of time
the brownfield has been abandoned; (11) the taxes owed and the
projected revenues that may be restored to the community; (12) the
relative need for assessment of the brownfield within the municipality
or region; (13) whether the brownfield is located in a federally
designated opportunity zone; and [(13)] (14) such other criteria as the
commissioner may establish consistent with the purposes of this
section.
(d) The commissioner shall award grants on a competitive basis,
based on a request for applications occurring on or before October
first, annually. The commissioner may increase the frequency of
requests for applications and awards depending upon the number of
applicants and the availability of funding. On and after July 1, 2019,
the commissioner shall give priority to grant applications for
brownfields located in federally designated opportunity zones.