Connecticut Senate Bill SB01120

Connecticut 2019 Regular Session

• Introduced: 4/4/19
• Refer: 4/4/19

Caption

An Act Concerning The Mill Rate For Real Property And Motor Vehicles Owned By Certain Utility Companies And Establishing A Property Tax Exemption For Certain Items Warehoused In The State By Such Companies.

Impact

The bill's enactment would impact property tax statutes significantly, particularly those that govern how utilities are taxed. Current regulations allow municipalities to set their own mill rates, which can lead to a complicated patchwork of taxation. By imposing a uniform mill rate, SB01120 could lead to decreased tax revenue for some municipalities while stabilizing the tax liabilities of utility companies. This shift could also affect the overall financial planning of local governments, depending on their reliance on revenue derived from utility taxes.

Summary

SB01120 aims to establish a uniform mill rate of fifteen mills for real property and motor vehicles owned by certain utility companies, which include electric, gas, and water companies providing services to multiple municipalities. This standardized rate is intended to simplify the property tax structure for these utility companies, which are often subject to complex and varying local tax rates. By creating a uniform rate, the bill seeks to promote equitable taxation across the state and reduce administrative burdens for both the utilities and local governments. Additionally, the bill introduces a tax exemption for certain infrastructure items that utility companies warehouse in the state until they are installed or utilized.

Contention

Discussions around SB01120 highlighted notable points of contention among legislators and stakeholders. Supporters argued that the bill would promote fairness and clarity in the tax system for essential utility providers, potentially fostering economic development and enhancing infrastructure reliability. However, opponents expressed concerns that a uniform mill rate might disadvantage certain municipalities that currently benefit from higher local rates. They feared it could result in reduced funding for local services that rely on utility taxes, particularly in areas where utilities have major operational footprints. Additionally, the proposal's implications for competitive equity in the utility market were questioned, suggesting that such a tax structure might favor larger companies at the expense of smaller, localized providers.