LCO \\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-R01-
SB.docx
1 of 36
General Assembly Substitute Bill No. 1138
January Session, 2019
AN ACT CONCERNING CO MMUNITY RESTORATION FUNDS.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. (NEW) (Effective from passage) (a) There are established 1
community development corporations, which shall use the revenue 2
from the taxes imposed under subsection (b) of section 6 of this act and 3
the portion of the tax received and retained by the state from sales 4
subject to the tax under subsection (b) of section 7 of this act, for the 5
community restoration and revitalization purposes set forth in this 6
section and section 2 of this act. Such moneys shall be disbursed by 7
and used in coordination with the community development 8
corporation oversight council established under section 3 of this act. 9
(b) (1) Any entity that is exempt from tax pursuant to Section 501(c) 10
of the Internal Revenue Code of 1986, or any subsequent 11
corresponding internal revenue code of the United States, as amended 12
from time to time, and is located in a distressed municipality, as 13
defined in section 32-9p of the general statutes, at the time such entity 14
submits an application for designation, may apply to the council to be 15
designated as a community development corporation. 16
(2) To be eligible to be designated as a community development 17
corporation, such entity shall: 18 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
2 of 36
(A) (i) Have demonstrated effectiveness in, or have been formed for 19
the purpose of, building, attracting and retaining neighborhood 20
wealth, and (ii) provide financial, educational or related services to 21
support initiatives that concentrate investments in human capital and 22
infrastructure in a specific neighborhood or neighborhoods, with 23
measureable community revitalization achievements; 24
(B) Agree to focus all its efforts in the distressed municipality in 25
which it is located; 26
(C) Agree to establish or relocate its primary office in a community 27
impact zone within the municipality after such zones are designated 28
pursuant to section 3 of this act; and 29
(D) Agree to establish or relocate any auxiliary locations to within 30
the boundaries of the municipality in which the corporation is located. 31
(c) (1) Each community development corporation shall provide 32
programs, services and assistance or issue grants to support 33
community reinvestment strategies in the community impact zone in 34
which such corporation is located, including, but not limited to, the 35
following, in order of priority: 36
(A) Encouraging early childhood initiatives through the provision, 37
directly or in collaboration with other entities, of free or low-cost early 38
childhood education services to families that reside within the 39
community impact zone, without regard to family income level. Such 40
services shall include kindergarten preparedness and kindergarten 41
readiness assessments. The corporation may expand such services 42
beyond the community impact zone but within the municipality to 43
areas with poverty levels above the municipal average; 44
(B) Increasing achievement at public elementary and middle schools 45
located in the community impact zone. The corporation shall 46
coordinate with officials of such schools to submit grant applications to 47
the community development corporation oversight council to 48
supplement per-student funding for such schools to match or 49 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
3 of 36
approach the highest levels of per-student funding at any elementary 50
or middle school in the state. Schools that receive such grants shall (i) 51
set goals to achieve scores in the top percentiles on the state-wide 52
mastery examination under section 10-14n of the general statutes. The 53
council shall set specific target goals for each school that receives a 54
grant pursuant to this subparagraph, and (ii) guarantee that a student 55
residing in the community impact zone will be able to attend that 56
specific school; 57
(C) Rebuilding community assets through: 58
(i) The construction, renovation or repair of neighborhood 59
structures or assets of economic or other community significance, 60
including, but not limited to, playgrounds, sidewalks, parks, 61
community centers, senior centers, public libraries, urban gardens and 62
green spaces. Only projects for structures or assets that are owned by 63
the federal, state or municipal government, the community 64
development corporation located in the community impact zone 65
where such structure or asset is located, the partnered community 66
development credit union, as described in section 2 of this act, or a 67
resident of the municipality in which such structure or asset is located 68
shall be eligible to receive funding under this subparagraph. The 69
corporation shall seek to train residents of the community impact zone 70
to perform some of the work such projects require, directly or 71
indirectly through partnerships with existing technical education and 72
apprenticeship programs and with other entities; and 73
(ii) The retention, sale or rental of such structures or assets after 74
completion, provided any sale shall be to a resident of the community 75
impact zone only. The partnered community development credit 76
union may develop a cooperative model for owning and renting such 77
structures or assets; 78
(D) Increasing owner-occupancy of residential buildings through: 79
(i) Tracking and undertaking efforts to increase the percentage of 80 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
4 of 36
owner-occupied residential buildings in the community impact zone. 81
The corporation shall set five-year target percentages and shall 82
periodically evaluate and revise such target amounts; 83
(ii) The restoration and repair of multifamily rental buildings 84
located in the community impact zone to convert such buildings into 85
owner-occupied residential buildings or multifamily cooperative 86
buildings with at least one unit to be a rental unit. Only projects for 87
multifamily rental buildings owned by the community development 88
corporation located in the community impact zone, the partnered 89
community development credit union or a resident of the municipality 90
in which such building is located shall be eligible to receive funding 91
under this subparagraph. A multifamily rental building that is not 92
owned by such corporation, credit union or resident may be 93
considered for funding under this subparagraph, provided the owner 94
of such building agrees, in writing, to terms set forth by the 95
corporation that further the purposes of this section. The corporation 96
may promote participation in existing state and housing programs to 97
encourage owner occupancy; and 98
(iii) The retention, sale or rental of such buildings after completion, 99
provided any sale shall be to a resident of the community impact zone 100
only. The corporation or the partnered community development credit 101
union may develop a cooperative model for owning and renting such 102
buildings; 103
(E) Supporting pathways to home ownership through the offering 104
of home buyer education and financial literacy programs in 105
partnership with existing programs. All such partnerships shall be 106
joint efforts between the community development corporation and its 107
partnered community development credit union and each such credit 108
union may develop and offer subsidized or incentivized financial 109
products for individuals who participate in such programs; 110
(F) Creating pipelines to employment for residents of a community 111
impact zone through: 112 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
5 of 36
(i) The implementation of or participation in community work-113
based training programs, in consultation or coordination with other 114
organizations, including, but not limited to, the Workforce Investment 115
Boards. Such programs shall provide preapprenticeship or 116
apprenticeship opportunities by providing instruction or training to 117
increase literacy, mathematics and other technical, prevocational or 118
vocational skills and connecting workforce, economic development 119
and education systems with businesses and other stakeholders in the 120
community impact zone. All such efforts undertaken by a community 121
development corporation shall focus on the residents of the 122
community impact zone in which such corporation is located and on 123
businesses offering or carrying out training programs, in order of 124
priority, (I) within the community impact zone, (II) within the 125
municipality in which the community impact zone is located, or (III) 126
without the municipality; and 127
(ii) The placement of residents of the community impact zone with 128
businesses offering employment or on-the-job training that are, in 129
order of priority, (I) within the community impact zone, (II) within the 130
municipality in which the community impact zone is located, or (III) 131
without the municipality only after the opportunities under subclauses 132
(I) and (II) of this clause have been exhausted; 133
(G) Expanding access to programs at existing community centers or 134
senior centers that serve all residents of the community impact zone, 135
regardless of age, or converting such existing centers to centers that 136
serve all residents of the community impact zone, regardless of age; 137
and 138
(H) Providing municipal residents with low-cost transportation 139
options by developing or supporting transportation alternatives within 140
and between municipalities for travel to and from employment, home, 141
school, retail stores and entertainment venues. 142
(2) If the corporation has insufficient funds to execute to a high level 143
of quality all of the strategies set forth in subdivision (1) of this 144 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
6 of 36
subsection, the corporation shall pursue each strategy in the order of 145
priority listed in said subdivision, with an emphasis on achieving a 146
high level of quality in the execution and implementation of such 147
strategy before undertaking the next strategy listed. 148
(d) A community development corporation may: 149
(1) Acquire real property described in subsection (c) of this section 150
in partnership with or in coordination with its partnered community 151
development credit union; 152
(2) Operate as or establish a subsidiary that operates as a contractor 153
or subcontractor, provided such corporation or subsidiary complies 154
with all applicable licensing and registration requirements under the 155
general statutes; and 156
(3) Partner or contract with contractors or subcontractors to carry 157
out projects and related work for the purposes set forth in subsection 158
(c) of this section, provided the corporation shall give primary priority 159
to a contractor or subcontractor located in the community impact zone 160
in which the corporation is located and secondary priority to a 161
contractor or subcontractor located in the municipality in which the 162
corporation is located. 163
(e) Not later than six months after being designated as a community 164
development corporation, such corporation shall (1) identify a 165
Connecticut credit union located within the municipality in which 166
such corporation is located that will apply to the community 167
development corporation oversight council for designation as a 168
community development credit union pursuant to section 2 of this act, 169
or (2) issue a request for proposal for the organization of a new 170
Connecticut credit union to partner with, or for an existing 171
Connecticut credit union to partner with, such corporation. 172
(f) Notwithstanding the provisions of chapter 846 of the general 173
statutes or section 12-157 of the general statutes, a community 174
development corporation shall be offered the right of first refusal in 175 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
7 of 36
the sale of any real property that has been foreclosed or is being sold at 176
public auction and is located in the community impact zone in which 177
such corporation is located, provided such corporation has timely 178
notified the mortgagee or the town tax collector, as applicable, of such 179
corporation's interest in acquiring such property. 180
(g) Each community development corporation shall submit a 181
financial report to the community development corporation oversight 182
council, on such frequency as the council shall require but at least 183
annually, and include such information as the council requires. 184
(h) (1) A community development corporation may request that its 185
designation be removed. The community development corporation 186
oversight council may grant such request, provided the council 187
designates, from prior submitted applications or through a new 188
request for application submissions, another entity to replace such 189
corporation. 190
(2) The council may remove the designation of any community 191
development corporation that the council determines is unable to or is 192
deficient in carrying out the purposes of this section, provided the 193
corporation has been afforded an opportunity to address and improve 194
any deficiencies noted by the council. 195
Sec. 2. (NEW) (Effective from passage) (a) There are established 196
community development credit unions, which shall partner with 197
community development corporations, established under section 1 of 198
this act, to further the community restoration and revitalization 199
purposes set forth in this section and section 1 of this act. 200
(b) (1) Any Connecticut credit union organized under chapter 667 of 201
the general statutes and in compliance with the provisions of said 202
chapter or any Connecticut credit union service organization, as 203
defined in section 36a-2 of the general statutes, may apply to the 204
community development corporation oversight council established 205
under section 3 of this act to be designated as a community 206 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
8 of 36
development credit union. 207
(2) To be designated as a community development credit union, a 208
Connecticut credit union or Connecticut credit union service 209
organization shall: 210
(A) Serve low-income and moderate-income individuals and 211
communities that have limited access to affordable financial services 212
and products, with priority given to credit unions that specialize in (i) 213
providing home mortgages or small business loans to members with 214
imperfect, limited or no credit history, (ii) providing financial 215
education and counseling to its members, and (iii) offering products, 216
services and support at a low or reasonable cost to its members; and 217
(B) Agree to partner with or be partnered with at least one 218
community development corporation and focus its activities and 219
efforts to support such corporation's purposes set forth in section 1 of 220
this act. 221
(c) Each community development credit union shall: 222
(1) Submit its governance structure to the community development 223
corporation oversight council for review and approve the addition of 224
representatives of its partnered community development corporation 225
to its governing board, executive committee or supervisory committee 226
or similar board or committee, in such numbers and as agreed to by 227
such credit union and corporation; 228
(2) If applicable and necessary, expand its field of membership in 229
accordance with section 36a-438a of the general statutes, to allow all 230
residents of all community impact zones within the municipality in 231
which its partnered community development corporation is located, to 232
be members of such credit union; 233
(3) Offer or agree to offer free or low-cost basic checking and 234
savings account services to all residents of the community impact zone 235
in which its partnered community development corporation is located; 236 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
9 of 36
(4) Agree to establish or relocate a location in the community impact 237
zone in which its partnered community development corporation is 238
located after such zones are designated pursuant to section 3 of this 239
act. Such credit union shall not be precluded from establishing or 240
having locations elsewhere in the state or establishing or having 241
multiple locations within the municipality in which the community 242
impact zone is located; and 243
(5) Develop and issue, in consultation with its partnered community 244
development corporation, social impact bonds to support or 245
supplement the efforts of such corporation. Such bonds shall be 246
designed to maximize tax benefits to investors, where the community 247
impact zone in which such corporation is located aligns with federal 248
qualified opportunity zones. 249
(d) A community development credit union may: 250
(1) Develop low-cost or subsidized financial products and services 251
to support the community development goals of its partnered 252
community development corporation and apply to the community 253
development corporation oversight council for funding for such 254
purpose; and 255
(2) Collaborate with its partnered community development 256
corporation to help finance or facilitate investments in real property or 257
community structures and assets pursuant to section 1 of this act. 258
(e) Each community development credit union shall submit a 259
financial report to the community development corporation oversight 260
council, on such frequency as the council shall require but at least 261
annually, and include such information as the council requires. 262
(f) (1) A community development credit union may request that its 263
designation be removed and that it no longer be partnered with its 264
community development corporation. The community development 265
corporation oversight council may grant such request, provided such 266
corporation identifies another Connecticut credit union or Connecticut 267 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
10 of 36
credit union service organization to replace such credit union or issues 268
a request for proposal for the organization of a new Connecticut credit 269
union or Connecticut credit union service organization with which to 270
partner. 271
(2) The council may remove the designation of any community 272
development credit union that the council determines is unable to or is 273
deficient in carrying out the purposes of this section, provided the 274
credit union has been afforded an opportunity to address and improve 275
any deficiencies noted by the council. 276
Sec. 3. (NEW) (Effective from passage) (a) As used in this section, 277
"municipality" means any town, city or borough, consolidated town 278
and city or consolidated town and borough and "distressed 279
municipality" has the same meaning as provided in section 32-9p of 280
the general statutes. 281
(b) (1) There is established a community development corporation 282
oversight council, which shall be part of the Legislative Department. 283
The council shall consist of the following members: (A) The Treasurer; 284
(B) the Commissioner of Economic and Community Development; (C) 285
the executive director of the Commission on Equity and Opportunity, 286
established pursuant to section 2-127 of the general statutes; and (D) 287
four members appointed by the Governor. In making the 288
appointments under subparagraph (D) of this subdivision, the 289
Governor shall seek to appoint individuals who have broad 290
community knowledge and experience with communities within the 291
eligible census tracts selected by the Secretary of the Office of Policy 292
and Management pursuant to subsection (f) of this section and are 293
reflective of the ethnic, gender and economic diversity of such 294
communities. All appointments to the council shall be made on or after 295
August 1, 2019, but not later than August 31, 2019. 296
(2) The Treasurer and the Commissioner of Economic and 297
Community Development shall serve as cochairpersons of the council 298
and shall jointly schedule the first meeting of the council, which shall 299 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
11 of 36
be held not later than September 1, 2019. On and after January 1, 2020, 300
the council shall meet not fewer than six times each year. A majority of 301
the council shall constitute a quorum for the transaction of any 302
business. 303
(3) Any vacancy shall be filled by the appointing authority. Any 304
vacancy occurring other than by expiration of term shall be filled for 305
the balance of the unexpired term. 306
(4) The members of the council shall serve without compensation, 307
but shall, within the limits of available funds, be reimbursed for 308
expenses necessarily incurred in the performance of their duties. 309
(5) The administrative staff of the joint standing committee of the 310
General Assembly having cognizance of matters relating to economic 311
development shall serve as administrative staff of the council. 312
(c) The council shall: 313
(1) Establish criteria for designation as a community development 314
corporation, community development credit union and community 315
impact zone and designate such corporations, credit unions and zones 316
in accordance with the provisions of this section and sections 1 and 2 317
of this act; 318
(2) Establish an annual budget in accordance with the provisions of 319
this section; 320
(3) Oversee the investments of, deposits in and disbursements from 321
the Community Development Corporation Trust Fund established 322
under section 4 of this act; 323
(4) Approve the programs, services and activities of and efforts 324
undertaken by community development corporations and community 325
development credit unions to further the purposes of this section and 326
sections 1 and 2 of this act; 327 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
12 of 36
(5) Oversee, support and coordinate the programs, services and 328
activities of and efforts undertaken by community development 329
corporations and community development credit unions under 330
sections 1 and 2 of this act, within and across municipalities and with 331
other relevant state agencies, entities and initiatives; 332
(6) Advise community development corporations, community 333
development credit unions, state agencies and other entities with 334
respect to the core purposes of community development corporations 335
and community development credit unions; 336
(7) Review the disbursement of funds to, and contracts entered into 337
by, community development corporations and community 338
development credit unions, to evaluate the impact and effectiveness of 339
such disbursements and ensure that decisions made by such 340
corporations and credit unions regarding services or grants provided 341
or other financial instruments issued are based solely on the purposes 342
set forth in sections 1 and 2 of this act; 343
(8) Review the reports submitted to the council by community 344
development corporations and community development credit unions; 345
and 346
(9) Do all things necessary to carry out its duties and responsibilities 347
under sections 1 to 4, inclusive, of this act. 348
(d) The council shall designate community development credit 349
unions from among applicants that fulfill the requirements set forth in 350
subsection (b) of section 2 of this act. The council may designate only 351
one community development credit union for each municipality. 352
(e) The council shall designate community development 353
corporations in accordance with the provisions of this subsection. 354
(1) Not later than October 1, 2019, the council shall release its criteria 355
for prospective applicants seeking designation as a community 356
development corporation. In addition to the requirements set forth in 357 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
13 of 36
section 1 of this act, such criteria shall take into consideration the goals, 358
purposes and requirements set forth in said section and shall include, 359
but not be limited to, (A) whether the applicant has broad community 360
representation in its leadership and governance, with an emphasis on 361
ethnic and economic diversity reflective of the municipality in which 362
the applicant is located, and (B) the professional competence and 363
relevant experience of the applicant's management and staff. Each 364
applicant shall include (i) a letter of support from the chief elected 365
official of the municipality in which the applicant is located, and (ii) a 366
statement that the applicant agrees to locate its office in a community 367
impact zone once such zones are designated. The council shall accept 368
applications on or after October 1, 2019, until and including January 369
31, 2020. 370
(2) Not later than March 1, 2020, the council shall announce its 371
selections for designated community development corporations. The 372
council may designate only one community development corporation 373
for each municipality. 374
(f) The Secretary of the Office of Policy and Management shall select 375
eligible census tracts and the council shall designate community 376
impact zones, in accordance with the provisions of this subsection. 377
(1) The secretary shall select census tracts within distressed 378
municipalities that will be eligible to have a community impact zone or 379
zones designated within such tract. The secretary shall consider, but 380
need not be limited to, the following metrics for each census tract: (A) 381
The educational level attained by the population, specifically the 382
percentage of the population attaining an associate degree or a 383
bachelor's degree; (B) the most recent third grade scores on the state-384
wide mastery examination under section 10-14n of the general statutes 385
for reading; (C) the most recent third grade scores on the state-wide 386
mastery examination under section 10-14n of the general statutes for 387
mathematics; (D) the unemployment rate; (E) the state of the local 388
economy, employment availability and access and diversity of jobs; (F) 389
the percentage of the population receiving public assistance; (G) the 390 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
14 of 36
percentage of the population below the federal poverty level; (H) the 391
rate of home ownership; (I) the percentage of vacant housing; and (J) 392
crime rates. 393
(2) Not later than August 1, 2019, the secretary shall release the 394
census tracts that are eligible for consideration, based on a 395
demonstration of the greatest socio-economic need as indicated by 396
subparagraphs (A) to (J), inclusive, of subdivision (1) of this 397
subsection. The secretary shall also release the criteria for determining 398
an area within such tract to be designated as a community impact 399
zone. Such criteria shall take into consideration the goals, purposes 400
and requirements set forth in section 1 of this act and may give weight 401
to one or more of the following: (A) The existence of a public 402
elementary school within the area; (B) the existence of an early 403
childhood center within the area; (C) the existence of a community 404
center serving children or seniors, or both, within the area; (D) the 405
existence of a local community organization comprised of residents 406
and leaders within the area, which organization's role is 407
complementary to the goals, purposes and requirements set forth in 408
section 1 of this act; (E) the proximity of the area to existing or planned 409
public transportation; and (F) existing access to an asset-based housing 410
organization that focuses on home ownership and financial literacy. 411
(3) Not later than June 1, 2020, each community development 412
corporation shall submit a proposal to the council for not more than 413
two geographically distinct areas within an eligible census tract in 414
which the corporation is located to be designated as a community 415
impact zone. 416
(4) Not later than August 1, 2020, the council shall announce its 417
selections for designated community impact zones. The council may 418
designate one community impact zone for a municipality with a 419
population of one hundred thousand or less and two community 420
impact zones for a municipality with a population of greater than one 421
hundred thousand. If the council rejects a proposal or does not 422
designate an area that a community development corporation 423 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
15 of 36
proposed, the council may allow such corporation to resubmit a 424
proposal if a community impact zone has not been otherwise 425
designated. 426
(5) Not later than February 1, 2021, or as soon as practicable 427
following the designations of community impact zones, each 428
community development corporation shall establish an office or 429
relocate its office within such zone. 430
(g) The council shall establish an annual budget that sets forth the 431
amounts in the Community Development Corporation Trust Fund to 432
be invested, the amounts in the fund to be disbursed for programs, 433
services, activities and expenses for the purposes of sections 1 and 2 of 434
this act and the amount to be set aside for the purposes of subsections 435
(h) and (i) of this section. The council, in consultation with the 436
Treasurer and the chief executive officer of the Connecticut Green 437
Bank established under section 16-245n of the general statutes, shall 438
adopt an investment plan with the goals of yielding investment returns 439
over the long-term to support the programs, services, activities and 440
efforts for the purposes of sections 1 and 2 of this act and supporting a 441
substantial portion of the fund's annual expenditures from the 442
investment returns. The initial investment plan shall set forth an 443
investment strategy for not less than twenty years and the council may 444
revise such plan from time to time by affirmative vote. The council 445
shall annually review such plan and the investment returns generated 446
and shall adjust the amount of moneys to be invested and disbursed 447
each year accordingly. 448
(h) (1) The council shall set aside an amount in its annual budget 449
equal to the amount appropriated in the state budget act for the 450
intensive reading instruction program established under section 10-451
14u of the general statutes, provided such amount set aside shall not 452
exceed three million dollars each year. The amount to be set aside 453
under this subsection may be reduced if there are insufficient moneys 454
in the fund to provide for the purposes set forth in sections 1 and 2 of 455
this act and for the entire amount of the set-aside specified under this 456 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
16 of 36
subdivision. 457
(2) The council shall make such moneys available for the 458
implementation or support of said reading instruction program or any 459
state-wide early literacy initiative developed and implemented by the 460
Department of Education, regardless of whether such program or 461
initiative is related to a community impact zone or is eligible for other 462
community development corporation or community development 463
credit union programs or other grants or funding. The moneys made 464
available pursuant to this subdivision shall supplement existing or 465
other available grants or funding. The council shall establish forms and 466
criteria to apply for such moneys and shall give primary priority to 467
applications from schools located in a community impact zone, 468
provided all such schools submit an application. Any moneys awarded 469
to such schools shall be distributed on a zone-wide basis to be used 470
solely for the purpose of making said reading instruction program 471
available to all students reading below proficiency level who reside or 472
attend school within the community impact zone. The council shall 473
give secondary priority to applications from schools located in a 474
distressed municipality on the basis of the level of student reading 475
achievement, as determined by the Commissioner of Education. 476
(i) The council shall set aside an amount in its annual budget, to be 477
determined by the council, to provide financial assistance to health 478
care providers and facilities that provide mental health or substance 479
use disorder treatment services in any municipality. The council shall 480
establish eligibility requirements for such financial assistance and 481
publicize the availability of such financial assistance to the relevant 482
community. 483
(j) The council shall develop a proposal to allow social impact bonds 484
to be issued by the state to support public schools located in 485
community impact zones. Not later than February 1, 2020, the 486
Secretary of the Office of Policy and Management shall submit a 487
report, in accordance with the provisions of section 11-4a of the general 488
statutes, to the General Assembly, setting forth the proposal and 489 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
17 of 36
including recommendations on ways to leverage the federal qualified 490
opportunity zones program to support such public schools. 491
(k) (1) The council may cause to have conducted an external, 492
independent audit of any community development corporation or 493
community development credit union. 494
(2) The council may request the Auditors of Public Accounts to 495
perform, and said auditors shall perform, audits and other related 496
evaluations to facilitate the council's responsibilities established under 497
sections 1 to 4, inclusive, of this act. 498
(l) Not later than February 1, 2022, and annually thereafter, the 499
council shall submit a report to the Governor and to the General 500
Assembly, in accordance with the provisions of section 11-4a of the 501
general statutes. Such report shall include, but not be limited to, a list 502
of the community development corporations, community 503
development credit unions and community impact zones designated 504
to date, a summary of the programs, services, activities and efforts 505
undertaken by such corporations and credit unions pursuant to 506
sections 1 and 2 of this act and the disbursements made from the 507
Community Development Corporation Trust Fund to support such 508
programs, services, activities and efforts. 509
Sec. 4. (NEW) (Effective from passage) (a) There is established a fund 510
to be known as the "Community Development Corporation Trust 511
Fund". The fund shall contain any moneys required by law to be 512
deposited in the fund and shall be held in trust separate and apart 513
from all other moneys, funds and accounts. Investment earnings 514
credited to the assets of the fund shall become part of the assets of said 515
fund. Any balance remaining in the fund at the end of any fiscal year 516
shall be carried forward in the fund for the fiscal year next succeeding. 517
Moneys in the fund shall be expended by the community development 518
corporation oversight council established pursuant to section 3 of this 519
act to be used for the purposes set forth in sections 1 and 2 of this act. 520 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
18 of 36
(b) The Treasurer shall invest the amounts on deposit in the fund in 521
a manner reasonable and appropriate to achieve the objectives of the 522
fund, exercising the discretion and care of a prudent person in similar 523
circumstances with similar objectives. The Treasurer shall give due 524
consideration to rate of return, risk, term or maturity, diversification of 525
the total portfolio within the fund, liquidity, the projected 526
disbursements and expenditures, and the expected payments, 527
deposits, contributions and gifts to be received. The Treasurer shall not 528
require the fund to invest directly in obligations of the state or any 529
political subdivision of the state or in any investment or other fund 530
administered by the Treasurer. The assets of the fund shall be 531
continuously invested and reinvested in a manner consistent with the 532
objectives of the fund until disbursed for the purposes set forth in 533
sections 1 and 2 of this act. 534
(c) On or before December thirty-first, annually, the Treasurer shall 535
submit a financial report, in accordance with the provisions of section 536
11-4a of the general statutes, to the community development 537
corporation oversight council and the joint standing committee of the 538
General Assembly having cognizance of matters relating to finance, 539
revenue and bonding, setting forth the receipts, disbursements, assets, 540
investments, liabilities and administrative costs of the fund for the 541
prior fiscal year. 542
Sec. 5. (NEW) (Effective from passage) Any entity that is exempt from 543
paying property tax pursuant to Section 501(c) of the Internal Revenue 544
Code of 1986, or any subsequent corresponding internal revenue code 545
of the United States, as amended from time to time, any municipality 546
and the state may make a deposit with a community development 547
credit union, to be invested by such credit union to further the 548
community restoration and revitalization purposes set forth in sections 549
1 to 4, inclusive, of this act. Each community development credit union 550
that receives a deposit pursuant to this section shall provide a rate of 551
return on such deposit that is, at a minimum, not less than the London 552
Interbank Offered Rate. 553 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
19 of 36
Sec. 6. (NEW) (Effective from passage) (a) As used in this section: 554
(1) (A) "Cannabis" means (i) all parts of any plant or species of the 555
genus cannabis or any infra specific taxon thereof, whether growing or 556
not, (ii) the seeds thereof, (iii) the resin extracted from any part of the 557
plant, and (iv) every compound, manufacture, salt, derivative, mixture 558
or preparation of such plant, its seeds or resin. "Cannabis" includes 559
cannabinon, cannabinol and cannabidiol. 560
(B) "Cannabis" does not include (i) the mature stalks of such plant, 561
(ii) fiber produced from such stalks, (iii) oil or cake made from the 562
seeds of such plant, (iv) any other compound, manufacture, salt, 563
derivative, mixture or preparation of such mature stalks except the 564
resin extracted therefrom, (v) fiber, oil or cake, (vi) the sterilized seed 565
of such plant, which is incapable of germination, (vii) industrial hemp, 566
as defined in 7 USC 5940, as amended from time to time, or (viii) 567
marijuana cultivated or sold for palliative use pursuant to chapter 420f 568
of the general statutes; 569
(2) "Cannabis product" means a cannabis concentrate or a product 570
that contains cannabis, which may be combined with other 571
ingredients, and is intended for use or consumption. Cannabis 572
concentrate includes tinctures and extracts; 573
(3) "Cannabis cultivation facility" means a facility licensed by the 574
Cannabis Commission to cultivate, prepare and package cannabis and 575
sell cannabis to cannabis product manufacturing facilities, cannabis 576
retailers and other cannabis cultivation facilities; 577
(4) "Cannabis product manufacturing facility" means a facility 578
licensed by the Cannabis Commission to purchase cannabis from 579
cannabis cultivation facilities, manufacture, prepare and package 580
cannabis products and sell cannabis and cannabis products to cannabis 581
retailers and other cannabis product manufacturing facilities; 582
(5) "Cannabis retailer" means a person licensed by the Cannabis 583
Commission to purchase cannabis from cannabis cultivation facilities 584 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
20 of 36
as well as to purchase cannabis and cannabis products from cannabis 585
product manufacturing facilities and to sell cannabis and cannabis 586
products to consumers; 587
(6) "Consumer" means an individual who is twenty-one years of age 588
or older; and 589
(7) "Cannabis Commission" means the commission established 590
under section 2 of house bill 7371 of the current session. 591
(b) (1) On and after the date the Cannabis Commission first issues a 592
license to a cannabis cultivation facility, there is imposed a tax on each 593
such facility on the first sale of cannabis within the state at the rate of 594
thirty-five dollars per ounce of cannabis flowers and thirteen dollars 595
and fifty cents per ounce of cannabis trim. 596
(2) Each cannabis cultivation facility making such sales shall file 597
with the Commissioner of Revenue Services, on or before the last day 598
of each calendar quarter, a return for the calendar quarter immediately 599
preceding. Such returns shall be in such form and contain such 600
information as the commissioner prescribes, and shall be accompanied 601
by a payment of the amount of the tax shown to be due thereon. 602
(3) The commissioner shall deposit the amounts received by the 603
state from the tax imposed under subdivision (1) of this subsection into 604
the Community Development Corporation Trust Fund established 605
under section 4 of this act. 606
(c) If any person fails to pay the amount of tax reported due on its 607
report within the time specified under this section, there shall be 608
imposed a penalty equal to ten per cent of such amount due and 609
unpaid, or fifty dollars, whichever is greater. Such amount shall bear 610
interest at the rate of one per cent per month or fraction thereof, from 611
the due date of such tax until the date of payment. Subject to the 612
provisions of section 12-3a of the general statutes, the commissioner 613
may waive all or part of the penalties provided under this section 614
when it is proven to the commissioner's satisfaction that the failure to 615 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
21 of 36
pay any tax was due to reasonable cause and was not intentional or 616
due to neglect. 617
(d) Each person, other than a cannabis cultivation facility, who is 618
required, on behalf of such facility, to collect, truthfully account for 619
and pay over a tax imposed on such facility under this section and 620
who wilfully fails to collect, truthfully account for and pay over such 621
tax or who wilfully attempts in any manner to evade or defeat the tax 622
or the payment thereof, shall, in addition to other penalties provided 623
by law, be liable for a penalty equal to the total amount of the tax 624
evaded, or not collected, or not accounted for and paid over, including 625
any penalty or interest attributable to such wilful failure to collect or 626
truthfully account for and pay over such tax or such wilful attempt to 627
evade or defeat such tax, provided such penalty shall only be imposed 628
against such person in the event that such tax, penalty or interest 629
cannot otherwise be collected from such facility. The amount of such 630
penalty with respect to which a person may be personally liable under 631
this section shall be collected in accordance with the provisions of 632
section 12-555a of the general statutes and any amount so collected 633
shall be allowed as a credit against the amount of such tax, penalty or 634
interest due and owing from the facility. The dissolution of the facility 635
shall not discharge any person in relation to any personal liability 636
under this section for wilful failure to collect or truthfully account for 637
and pay over such tax or for a wilful attempt to evade or defeat such 638
tax prior to dissolution, except as otherwise provided in this section. 639
For purposes of this section, "person" includes any individual, 640
corporation, limited liability company or partnership and any officer 641
or employee of any corporation, including a dissolved corporation, 642
and a member or employee of any partnership or limited liability 643
company who, as such officer, employee or member, is under a duty to 644
file a tax return under this section on behalf of a cannabis cultivation 645
facility or to collect or truthfully account for and pay over a tax 646
imposed under this section on behalf of such facility. 647
(e) No tax credit or credits shall be allowable against the tax 648 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
22 of 36
imposed under this section. 649
(f) The provisions of sections 12-551 to 12-554, inclusive, and section 650
12-555a of the general statutes shall apply to the provisions of this 651
section in the same manner and with the same force and effect as if the 652
language of said sections had been incorporated in full into this section 653
and had expressly referred to the tax under this section, except to the 654
extent that any provision is inconsistent with a provision in this 655
section. 656
(g) The commissioner may adopt regulations, in accordance with 657
the provisions of chapter 54 of the general statutes, to implement the 658
provisions of this section. 659
(h) At the close of each fiscal year in which the tax imposed under 660
the provisions of this section are received by the commissioner, the 661
Comptroller is authorized to record as revenue for such fiscal year the 662
amounts of such tax that are received by the commissioner not later 663
than five business days from the last day of July immediately 664
following the end of such fiscal year. 665
Sec. 7. (NEW) (Effective from passage) (a) As used in this section, (1) 666
"cannabis", "cannabis product", "cannabis retailer" and "Cannabis 667
Commission" have the same meanings as provided in section 6 of this 668
act, and (2) "municipality" means any town, city or borough, 669
consolidated town and city or consolidated town and borough. 670
(b) (1) On and after the date the Cannabis Commission first issues a 671
license to a cannabis retailer, there is imposed a local sales tax at the 672
rate of three per cent on the sale of all cannabis and cannabis products. 673
Such tax shall be in addition to the tax applicable to such sales under 674
section 12-408 of the general statutes, as amended by this act, and shall 675
be administered in the same manner as the tax under said section. 676
(2) Each cannabis retailer making such sales shall file with the 677
commissioner, on or before the last day of each calendar quarter, a 678
return for the calendar quarter immediately preceding. Such returns 679 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
23 of 36
shall be in such form and contain such information as the 680
commissioner prescribes and shall indicate the municipality in which 681
such sales occurred, and shall be accompanied by a payment of the 682
total amount of tax shown to be due thereon. 683
(c) The commissioner shall deposit any local sales tax collected 684
pursuant to subsection (b) of this section into the municipal cannabis 685
revenue account established under subsection (d) of this section. 686
(d) There is established an account to be known as the "municipal 687
cannabis revenue account" which shall be a separate account within 688
the General Fund. The account shall contain any moneys required by 689
law to be deposited in the account. Moneys in the account shall be 690
expended by the Commissioner of Revenue Services for the purpose of 691
providing moneys in accordance with this section to municipalities in 692
which cannabis retailers are selling cannabis and cannabis products to 693
consumers. 694
(e) (1) The commissioner shall maintain (A) an accounting of all 695
sums deposited in the account, aggregated by municipality, (B) a 696
listing of sums remitted by each cannabis retailer, and (C) such other 697
information as the commissioner deems necessary for the purposes of 698
this section. 699
(2) Commencing in the second calendar quarter following the initial 700
deposit into the account, the commissioner shall distribute on a 701
quarterly basis a sum, calculated on a point-of-sale basis, to each 702
municipality in which a cannabis retailer is located and for which a 703
point-of-sale can be determined. Any moneys remaining in the account 704
at the close of the fiscal year for which no point-of-sale can be 705
determined shall be transferred to the Community Development 706
Corporation Trust Fund established under section 4 of this act. 707
(3) The commissioner shall make available to each municipality in 708
which a cannabis retailer is located any information concerning such 709
municipality that is maintained under subdivision (1) of this 710 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
24 of 36
subsection. 711
(f) If any person fails to pay the amount of tax reported due on its 712
report within the time specified under this section, there shall be 713
imposed a penalty equal to ten per cent of such amount due and 714
unpaid, or fifty dollars, whichever is greater. Such amount shall bear 715
interest at the rate of one per cent per month or fraction thereof, from 716
the due date of such tax until the date of payment. Subject to the 717
provisions of section 12-3a of the general statutes, the commissioner 718
may waive all or part of the penalties provided under this section 719
when it is proven to the commissioner's satisfaction that the failure to 720
pay any tax was due to reasonable cause and was not intentional or 721
due to neglect. 722
(g) Each person, other than a cannabis retailer, who is required, on 723
behalf of such retailer, to collect, truthfully account for and pay over a 724
tax imposed on such retailer under this section and who wilfully fails 725
to collect, truthfully account for and pay over such tax or who wilfully 726
attempts in any manner to evade or defeat the tax or the payment 727
thereof, shall, in addition to other penalties provided by law, be liable 728
for a penalty equal to the total amount of the tax evaded, or not 729
collected, or not accounted for and paid over, including any penalty or 730
interest attributable to such wilful failure to collect or truthfully 731
account for and pay over such tax or such wilful attempt to evade or 732
defeat such tax, provided such penalty shall only be imposed against 733
such person in the event that such tax, penalty or interest cannot 734
otherwise be collected from such retailer. The amount of such penalty 735
with respect to which a person may be personally liable under this 736
section shall be collected in accordance with the provisions of section 737
12-555a of the general statutes and any amount so collected shall be 738
allowed as a credit against the amount of such tax, penalty or interest 739
due and owing from the retailer. The dissolution of the retailer shall 740
not discharge any person in relation to any personal liability under this 741
section for wilful failure to collect or truthfully account for and pay 742
over such tax or for a wilful attempt to evade or defeat such tax prior 743 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
25 of 36
to dissolution, except as otherwise provided in this section. For 744
purposes of this section, "person" includes any individual, corporation, 745
limited liability company or partnership and any officer or employee 746
of any corporation, including a dissolved corporation, and a member 747
or employee of any partnership or limited liability company who, as 748
such officer, employee or member, is under a duty to file a tax return 749
under this section on behalf of a cannabis retailer or to collect or 750
truthfully account for and pay over a tax imposed under this section 751
on behalf of such retailer. 752
(h) No tax credit or credits shall be allowable against the tax 753
imposed under this section. 754
(i) The provisions of sections 12-551 to 12-554, inclusive, and section 755
12-555a of the general statutes shall apply to the provisions of this 756
section in the same manner and with the same force and effect as if the 757
language of said sections had been incorporated in full into this section 758
and had expressly referred to the tax under this section, except to the 759
extent that any provision is inconsistent with a provision in this 760
section. 761
(j) The commissioner may adopt regulations, in accordance with the 762
provisions of chapter 54 of the general statutes, to implement the 763
provisions of this section. 764
(k) At the close of each fiscal year in which the tax imposed under 765
the provisions of this section are received by the commissioner, the 766
Comptroller is authorized to record as revenue for such fiscal year the 767
amounts of such tax that are received by the commissioner not later 768
than five business days from the last day of July immediately 769
following the end of such fiscal year. 770
Sec. 8. Subdivision (1) of section 12-408 of the general statutes is 771
repealed and the following is substituted in lieu thereof (Effective from 772
passage): 773
(1) (A) For the privilege of making any sales, as defined in 774 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
26 of 36
subdivision (2) of subsection (a) of section 12-407, at retail, in this state 775
for a consideration, a tax is hereby imposed on all retailers at the rate 776
of six and thirty-five-hundredths per cent of the gross receipts of any 777
retailer from the sale of all tangible personal property sold at retail or 778
from the rendering of any services constituting a sale in accordance 779
with subdivision (2) of subsection (a) of section 12-407, except, in lieu 780
of said rate, [of six and thirty-five-hundredths per cent,] the rates 781
provided in subparagraphs (B) to (H), inclusive, of this subdivision; 782
(B) (i) At a rate of fifteen per cent with respect to each transfer of 783
occupancy, from the total amount of rent received by a hotel or 784
lodging house for the first period not exceeding thirty consecutive 785
calendar days; 786
(ii) At a rate of eleven per cent with respect to each transfer of 787
occupancy, from the total amount of rent received by a bed and 788
breakfast establishment for the first period not exceeding thirty 789
consecutive calendar days; 790
(C) With respect to the sale of a motor vehicle to any individual who 791
is a member of the armed forces of the United States and is on full-time 792
active duty in Connecticut and who is considered, under 50 App USC 793
574, a resident of another state, or to any such individual and the 794
spouse thereof, at a rate of four and one-half per cent of the gross 795
receipts of any retailer from such sales, provided such retailer requires 796
and maintains a declaration by such individual, prescribed as to form 797
by the commissioner and bearing notice to the effect that false 798
statements made in such declaration are punishable, or other evidence, 799
satisfactory to the commissioner, concerning the purchaser's state of 800
residence under 50 App USC 574; 801
(D) (i) With respect to the sales of computer and data processing 802
services occurring on or after July 1, 2001, at the rate of one per cent, 803
and (ii) with respect to sales of Internet access services, on and after 804
July 1, 2001, such services shall be exempt from such tax; 805 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
27 of 36
(E) (i) With respect to the sales of labor that is otherwise taxable 806
under subparagraph (C) or (G) of subdivision (2) of subsection (a) of 807
section 12-407 on existing vessels and repair or maintenance services 808
on vessels occurring on and after July 1, 1999, such services shall be 809
exempt from such tax; 810
(ii) With respect to the sale of a vessel, a motor for a vessel or a 811
trailer used for transporting a vessel, at the rate of two and ninety-812
nine-hundredths per cent, except that the sale of a vessel shall be 813
exempt from such tax if such vessel is docked in this state for sixty or 814
fewer days in a calendar year; 815
(F) With respect to patient care services for which payment is 816
received by the hospital on or after July 1, 1999, and prior to July 1, 817
2001, at the rate of five and three-fourths per cent and on and after July 818
1, 2001, such services shall be exempt from such tax; 819
(G) With respect to the rental or leasing of a passenger motor 820
vehicle for a period of thirty consecutive calendar days or less, at a rate 821
of nine and thirty-five-hundredths per cent; 822
(H) With respect to the sale of (i) a motor vehicle for a sales price 823
exceeding fifty thousand dollars, at a rate of seven and three-fourths 824
per cent on the entire sales price, (ii) jewelry, whether real or imitation, 825
for a sales price exceeding five thousand dollars, at a rate of seven and 826
three-fourths per cent on the entire sales price, and (iii) an article of 827
clothing or footwear intended to be worn on or about the human body, 828
a handbag, luggage, umbrella, wallet or watch for a sales price 829
exceeding one thousand dollars, at a rate of seven and three-fourths 830
per cent on the entire sales price. For purposes of this subparagraph, 831
"motor vehicle" has the meaning provided in section 14-1, but does not 832
include a motor vehicle subject to the provisions of subparagraph (C) 833
of this subdivision, a motor vehicle having a gross vehicle weight 834
rating over twelve thousand five hundred pounds, or a motor vehicle 835
having a gross vehicle weight rating of twelve thousand five hundred 836
pounds or less that is not used for private passenger purposes, but is 837 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
28 of 36
designed or used to transport merchandise, freight or persons in 838
connection with any business enterprise and issued a commercial 839
registration or more specific type of registration by the Department of 840
Motor Vehicles; 841
(I) The rate of tax imposed by this chapter shall be applicable to all 842
retail sales upon the effective date of such rate, except that a new rate 843
which represents an increase in the rate applicable to the sale shall not 844
apply to any sales transaction wherein a binding sales contract without 845
an escalator clause has been entered into prior to the effective date of 846
the new rate and delivery is made within ninety days after the effective 847
date of the new rate. For the purposes of payment of the tax imposed 848
under this section, any retailer of services taxable under subdivision 849
(37) of subsection (a) of section 12-407, who computes taxable income, 850
for purposes of taxation under the Internal Revenue Code of 1986, or 851
any subsequent corresponding internal revenue code of the United 852
States, as from time to time amended, on an accounting basis which 853
recognizes only cash or other valuable consideration actually received 854
as income and who is liable for such tax only due to the rendering of 855
such services may make payments related to such tax for the period 856
during which such income is received, without penalty or interest, 857
without regard to when such service is rendered; 858
(J) (i) For calendar quarters ending on or after September 30, 2019, 859
the commissioner shall deposit into the regional planning incentive 860
account, established pursuant to section 4-66k, six and seven-tenths 861
per cent of the amounts received by the state from the tax imposed 862
under subparagraph (B) of this subdivision and ten and seven-tenths 863
per cent of the amounts received by the state from the tax imposed 864
under subparagraph (G) of this subdivision; 865
(ii) For calendar quarters ending on or after September 30, 2018, the 866
commissioner shall deposit into the Tourism Fund established under 867
section 10-395b ten per cent of the amounts received by the state from 868
the tax imposed under subparagraph (B) of this subdivision; 869 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
29 of 36
(K) For calendar months commencing on or after July 1, 2021, the 870
commissioner shall deposit into the municipal revenue sharing 871
account established pursuant to section 4-66l seven and nine-tenths per 872
cent of the amounts received by the state from the tax imposed under 873
subparagraph (A) of this subdivision; [and] 874
(L) (i) For calendar months commencing on or after July 1, 2017, the 875
commissioner shall deposit into the Special Transportation Fund 876
established under section 13b-68 seven and nine-tenths per cent of the 877
amounts received by the state from the tax imposed under 878
subparagraph (A) of this subdivision; 879
(ii) For calendar months commencing on or after July 1, 2018, but 880
prior to July 1, 2019, the commissioner shall deposit into the Special 881
Transportation Fund established under section 13b-68 eight per cent of 882
the amounts received by the state from the tax imposed under 883
subparagraphs (A) and (H) of this subdivision on the sale of a motor 884
vehicle; 885
(iii) For calendar months commencing on or after July 1, 2019, but 886
prior to July 1, 2020, the commissioner shall deposit into the Special 887
Transportation Fund established under section 13b-68 thirty-three per 888
cent of the amounts received by the state from the tax imposed under 889
subparagraphs (A) and (H) of this subdivision on the sale of a motor 890
vehicle; 891
(iv) For calendar months commencing on or after July 1, 2020, but 892
prior to July 1, 2021, the commissioner shall deposit into the Special 893
Transportation Fund established under section 13b-68 fifty-six per cent 894
of the amounts received by the state from the tax imposed under 895
subparagraphs (A) and (H) of this subdivision on the sale of a motor 896
vehicle; 897
(v) For calendar months commencing on or after July 1, 2021, but 898
prior to July 1, 2022, the commissioner shall deposit into the Special 899
Transportation Fund established under section 13b-68 seventy-five per 900 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
30 of 36
cent of the amounts received by the state from the tax imposed under 901
subparagraphs (A) and (H) of this subdivision on the sale of a motor 902
vehicle; and 903
(vi) For calendar months commencing on or after July 1, 2022, the 904
commissioner shall deposit into the Special Transportation Fund 905
established under section 13b-68 one hundred per cent of the amounts 906
received by the state from the tax imposed under subparagraphs (A) 907
and (H) of this subdivision on the sale of a motor vehicle; [.] and 908
(M) For calendar quarters ending on or after the initial deposit of the 909
tax on the sale of cannabis and cannabis products, as both terms are 910
defined in section 6 of this act, the commissioner shall deposit into the 911
Community Development Corporation Trust Fund established under 912
section 4 of this act one hundred per cent of the amounts received and 913
retained by the state from sales subject to the tax under subsection (b) 914
of section 7 of this act. 915
Sec. 9. Section 36a-455a of the general statutes is repealed and the 916
following is substituted in lieu thereof (Effective from passage): 917
A Connecticut credit union may: 918
(1) Transact a general credit union business and exercise by its 919
governing board or duly authorized members of senior management, 920
subject to applicable law, all such incidental powers as are consistent 921
with its purposes. The express powers authorized for a Connecticut 922
credit union under this section do not preclude the existence of 923
additional powers deemed to be incidental to the transaction of a 924
general credit union business pursuant to this subdivision; 925
(2) (A) Issue shares to its members and receive payments on shares 926
from its members and from those nonmembers specified in subsection 927
(e) of section 36a-456a, subject to the provisions of sections 36a-290 to 928
36a-297, inclusive, 36a-330 to 36a-338, inclusive, and 36a-456a, (B) 929
receive deposits of members and nonmembers subject to provisions of 930
sections 36a-456a and 36a-456b, (C) reduce the amount of its member 931 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
31 of 36
and nonmember shares and deposits, (D) expel members and cancel 932
shares in accordance with section 36a-439a, and (E) provide check 933
cashing and wire and electronic transfer services to nonmembers who 934
are within such credit union's field of membership; 935
(3) Make and use its best efforts to make secured and unsecured 936
loans and other extensions of credit to its members in accordance with 937
section 36a-265 and sections 36a-457a, 36a-457b and 36a-458a; 938
(4) Invest its funds in accordance with section 36a-459a; 939
(5) Declare and pay dividends in accordance with sections 36a-441a 940
and 36a-456c, and pay interest refunds to borrowers; 941
(6) Act as a finder or agent for the sale of insurance and fixed and 942
variable rate annuities directly, sell insurance and such annuities 943
indirectly through a Connecticut credit union service organization, or 944
enter into arrangements with third-party marketing organizations for 945
the sale by such third-party marketing organizations of insurance or 946
such annuities on the premises of the Connecticut credit union or to 947
members of the Connecticut credit union, provided: (A) Such 948
insurance and annuities are issued or purchased by or from an 949
insurance company licensed in accordance with section 38a-41; and (B) 950
the Connecticut credit union, Connecticut credit union service 951
organization or third-party marketing organization, and any officer 952
and employee thereof, shall be licensed as required by section 38a-769 953
before engaging in any of the activities authorized by this subdivision. 954
As used in this subdivision, "annuities" and "insurance" have the same 955
meanings as set forth in section 38a-41, except that "insurance" does 956
not include title insurance. The provisions of this subdivision do not 957
authorize a Connecticut credit union or Connecticut credit union 958
service organization to underwrite insurance or annuities; 959
(7) Borrow money to an amount not exceeding fifty per cent of the 960
total assets of the Connecticut credit union provided the credit union 961
shall give prior notice to the commissioner in writing of its intention to 962 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
32 of 36
borrow amounts in excess of thirty-five per cent of its total assets; 963
(8) Act as fiscal agent for the federal government, this state or any 964
agency or political subdivision thereof; 965
(9) Provide loan processing, loan servicing, member check and 966
money order cashing services, disbursement of share withdrawals and 967
loan proceeds, money orders, internal audits, automated teller 968
machine services, ACH and wire transfer services, prepaid debit cards, 969
payroll cards, digital wallet services, coin and currency services, 970
remote deposit capture services, electronic banking and other similar 971
services to other Connecticut credit unions, federal credit unions, 972
federally insured financial institutions and out-of-state credit unions; 973
(10) Provide finder services to its members, including the offering of 974
third party products and services through the sale of advertising space 975
on its web site, account statements and receipts, and the sale of 976
statistical or consumer financial information to outside vendors in 977
accordance with sections 36a-40 to 36a-45, inclusive, in order to 978
facilitate the sale of such products to the members of such Connecticut 979
credit union; 980
(11) With the prior approval of the commissioner, exercise fiduciary 981
powers; 982
(12) Maintain and rent safe deposit boxes within suitably 983
constructed vaults, provided the Connecticut credit union has 984
adequate insurance coverage for losses related to such rental; 985
(13) Provide certification services, including notary services, 986
signature guaranties, certification of electronic signatures and share 987
draft certifications; 988
(14) Act as agent (A) in the collection of taxes for any qualified 989
treasurer of any taxing district or qualified collector of taxes, or (B) for 990
any electric distribution, gas, water or telephone company operating 991
within this state in receiving moneys due such company for utility 992 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
33 of 36
services furnished by it; 993
(15) Issue and sell securities which (A) are guaranteed by the 994
Federal National Mortgage Association or any other agency or 995
instrumentality authorized by state or federal law to create a 996
secondary market with respect to extensions of credit of the type 997
originated by the Connecticut credit union, or (B) subject to the 998
approval of the commissioner, relate to extensions of credit originated 999
by the Connecticut credit union and are guaranteed or insured by a 1000
financial guaranty insurance company or comparable private entity; 1001
(16) Establish a charitable fund, either in the form of a charitable 1002
trust or a nonprofit corporation to assist in making charitable 1003
contributions, provided (A) the trust or nonprofit corporation is 1004
exempt from federal income taxation and may accept charitable 1005
contributions under Section 501 of the Internal Revenue Code of 1986, 1006
or any subsequent corresponding internal revenue code of the United 1007
States, as from time to time amended, (B) the trust or nonprofit 1008
corporation's operations are disclosed fully to the commissioner upon 1009
request, and (C) the trust department of the credit union or one or 1010
more directors or members of senior management of the credit union 1011
act as trustees or directors of the fund; 1012
(17) In the discretion of a majority of its governing board, make 1013
contributions or gifts to or for the use of any corporation, trust or 1014
community chest, fund or foundation created or organized under the 1015
laws of the United States or of this state and organized and operated 1016
exclusively for charitable, educational or public welfare purposes, or of 1017
any hospital which is located in this state and which is exempt from 1018
federal income taxes and to which contributions are deductible under 1019
Section 501(c) of the Internal Revenue Code of 1986, or any subsequent 1020
corresponding internal revenue code of the United States, as from time 1021
to time amended; 1022
(18) Subject to the provisions of section 36a-455b, sell, pledge or 1023
assign any or all of its outstanding extensions of credit to any other 1024 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
34 of 36
lending institution, credit union service organization or quasi-1025
governmental entity and any government-sponsored enterprise, and 1026
act as collecting, remitting and servicing agent in connection with any 1027
such extension of credit and charge for its acts as agent. Any such 1028
credit union may purchase the minimum amount of capital stock of 1029
such entity or enterprise if required by that entity or enterprise to be 1030
purchased in connection with the sale, pledge or assignment of 1031
extensions of credit to that entity or enterprise and may hold and 1032
dispose of such stock, provided that with respect to purchases of stock 1033
of a credit union service organization, the Connecticut credit union 1034
shall not exceed the limitations of section 36a-459a. A Connecticut 1035
credit union may purchase one or more outstanding extensions of 1036
credit from any other lending institution and any federally-recognized 1037
Native American tribe, provided there exists a formal written 1038
agreement with tribal government to permit the credit union to service 1039
and collect on such extensions of credit; 1040
(19) Subject to the provisions of section 36a-455b, sell a participating 1041
interest in any or all of its outstanding extensions of credit to and 1042
purchase a participating interest in any or all of the outstanding 1043
extensions of credit of any financial institution or credit union service 1044
organization pursuant to an appropriate written participation and 1045
servicing agreement to be signed by all parties involved in such 1046
transaction; 1047
(20) With the approval of the commissioner, join the Federal Home 1048
Loan Bank System and borrow funds as provided under federal law; 1049
(21) Subject to the provisions of section 36a-455b, sell all or part of 1050
its assets, other than extensions of credit, to other lending institutions, 1051
purchase all or part of the assets, other than extensions of credit, of 1052
other lending institutions, and assume all or part of the shares and the 1053
liabilities of any other credit union or out-of-state credit union; 1054
(22) With the prior written approval of the commissioner, engage in 1055
closely related activities, unless the commissioner determines that any 1056 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
35 of 36
such activity shall be conducted by a credit union service organization 1057
of the Connecticut credit union, utilizing such organizational, 1058
structural or other safeguards as the commissioner may require, in 1059
order to protect the Connecticut credit union from exposure to loss. As 1060
used in this subdivision, "closely related activities" means those 1061
activities that are closely related, convenient and necessary to the 1062
business of a Connecticut credit union, are reasonably related to the 1063
operation of a Connecticut credit union or are financial in nature 1064
including, but not limited to, business and professional services, data 1065
processing, courier and messenger services, credit-related activities, 1066
consumer services, services related to real estate, financial consulting, 1067
tax planning and preparation, community development activities, or 1068
any activities reasonably related to such activities; 1069
(23) Engage in any activity that a federal credit union or out-of-state 1070
credit union may be authorized to engage in under state or federal law, 1071
provided the Connecticut credit union file with the commissioner prior 1072
written notice of its intention to engage in such activity. Such notice 1073
shall include a description of the activity, a description of the financial 1074
impact of the activity on the Connecticut credit union, citation of the 1075
legal authority to engage in the activity under state or federal law, a 1076
description of any limitations or restrictions imposed on such activity 1077
under state or federal law, and any other information that the 1078
commissioner may require. The Connecticut credit union may engage 1079
in any such activity unless the commissioner disapproves such activity 1080
not later than thirty days after the notice is filed. The commissioner 1081
may adopt regulations in accordance with chapter 54 to ensure that 1082
any such activity is conducted in a safe and sound manner with 1083
adequate consumer protections. The provisions of this subdivision do 1084
not authorize a Connecticut credit union or a Connecticut credit union 1085
service organization to sell title insurance; [.] 1086
(24) (A) Partner with a community development corporation, as 1087
described in section 1 of this act, and be designated as a community 1088
development credit union in accordance with the provisions of section 1089 Substitute Bill No. 1138
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-01138-
R01-SB.docx }
36 of 36
2 of this act, (B) if so designated, engage in any activity authorized for 1090
a community development credit union under sections 1 and 2 of this 1091
act, and (C) issue social impact bonds in accordance with subdivision 1092
(5) of subsection (c) of section 2 of this act. 1093
This act shall take effect as follows and shall amend the following
sections:
Section 1 from passage New section
Sec. 2 from passage New section
Sec. 3 from passage New section
Sec. 4 from passage New section
Sec. 5 from passage New section
Sec. 6 from passage New section
Sec. 7 from passage New section
Sec. 8 from passage 12-408(1)
Sec. 9 from passage 36a-455a
Statement of Legislative Commissioners:
In Section 1, in Subsec. (a), a reference to section 12-408 of the general
statutes was changed to a reference to the tax collected pursuant to
Section 7(b) for accuracy, and in Subsec. (c)(1), Subparas. (C) and (D)
were rewritten for accuracy; in Section 3(b)(1), ", but not later than
August 31, 2019" was added for clarity; in Section 7(b)(1), ", and shall
be administered in the same manner as the tax under said section" was
added for clarity; and in Section 8(1)(M), the sentence was rewritten for
accuracy.
FIN Joint Favorable Subst.