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General Assembly Governor's Bill No. 9
February Session, 2020
LCO No. 614
Referred to Committee on COMMERCE
Introduced by:
SEN. LOONEY, 11
th
Dist.
SEN. DUFF, 25
th
Dist.
REP. ARESIMOWICZ, 30
th
Dist.
REP. RITTER M., 1
st
Dist.
AN ACT ESTABLISHING THE JOBSCT TAX REBAT E PROGRAM.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. (NEW) (Effective July 1, 2020, and applicable to taxable years 1
commencing on or after January 1, 2021) (a) As used in this section: 2
(1) "Commissioner" means the Commissioner of Economic and 3
Community Development; 4
(2) "Discretionary FTE" means an FTE that is paid qualified wages 5
and does not meet the minimum wage requirements to be a qualified 6
FTE but is approved by the commissioner pursuant to subdivision (4) of 7
subsection (c) of this section; 8
(3) "Distressed municipality" has the same meaning as provided in 9
section 32-9p of the general statutes; 10
(4) "Full-time equivalent" or "FTE" means the number of employees 11
employed at a qualified business, calculated in accordance with 12
subsection (d) of this section; 13 Governor's Bill No. 9
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(5) "Full-time job" means a job in which an employee is required to 14
work at least thirty-five or more hours per week. "Full-time job" does 15
not include a temporary or seasonal job; 16
(6) "Median household income" means the median annual household 17
income for residents in a municipality as calculated from the U.S. 18
Census Bureau's five-year American Community Survey or another 19
data source, at the sole discretion of the commissioner; 20
(7) "New employee" means a person or persons hired by the qualified 21
business to fill a full-time equivalent position. A new employee does not 22
include a person who was employed in this state by a related person 23
with respect to the qualified business during the prior twelve months; 24
(8) "New FTEs" means the number of FTEs that (A) did not exist in 25
this state prior to a qualified business' application to the commissioner 26
for a rebate allocation notice for a job creation rebate under subsection 27
(c) of this section, (B) are not the result of FTEs acquired due to a merger 28
or acquisition, (C) are filled by a new employee, and (D) are qualified 29
FTE; 30
(9) "New FTEs created" means the number of new FTEs that the 31
qualified business is employing at the end of the relevant time period; 32
(10) "New FTEs maintained" means the total number of new FTEs 33
employed within a relevant time period; 34
(11) "Opportunity zone" means a population census tract that is a 35
low-income community that is designated as a "qualified opportunity 36
zone" pursuant to the Tax Cuts and Jobs Act of 2017, P.L. 115-97, as 37
amended from time to time; 38
(12) "Part-time job" means a job in which an employee is required to 39
work less than thirty-five hours per week. "Part-time job" does not 40
include a temporary or seasonal job; 41
(13) "Qualified business" means a person that is (A) engaged in 42
business in an industry related to finance, insurance, manufacturing, 43 Governor's Bill No. 9
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bioscience, technology, digital media or any similar industry, as 44
determined by the sole discretion of the commissioner, and (B) subject 45
to taxation under chapter 207, 208 or 228z of the general statutes; 46
(14) "Qualified FTE" means an FTE who is paid qualified wages of at 47
least eighty-five per cent of the median household income for the 48
location where the FTE position is primarily located, scaled in 49
proportion to the FTE fraction, or thirty-seven thousand five hundred 50
dollars, scaled in proportion to the FTE fraction, whichever is greater; 51
(15) "Qualified wages" means wages sourced to this state pursuant to 52
section 12-705 of the general statutes; 53
(16) "Rebate period" means the calendar years in which a tax rebate 54
provided for in this section is to be paid pursuant to a contract executed 55
pursuant to subsection (c) of this section; and 56
(17) "Related person" means (A) a corporation, limited liability 57
company, partnership, association or trust controlled by the qualified 58
business, (B) an individual, corporation, limited liability company, 59
partnership, association or trust that is in control of the qualified 60
business, (C) a corporation, limited liability company, partnership, 61
association or trust controlled by an individual, corporation, limited 62
liability company, partnership, association or trust that is in control of 63
the qualified business, or (D) a member of the same controlled group as 64
the qualified business. For purposes of this subdivision, "control" means 65
(i) ownership, directly or indirectly, of stock possessing fifty per cent or 66
more of the total combined voting power of all classes of the stock of a 67
corporation entitled to vote, (ii) ownership, directly or indirectly, of fifty 68
per cent or more of the capital or profits interest in a partnership, limited 69
liability company or association, or (iii) ownership, directly or 70
indirectly, of fifty per cent or more of the beneficial interest in the 71
principal or income of a trust. The ownership of stock in a corporation, 72
of a capital or profits interest in a partnership, of a limited liability 73
company or association or of a beneficial interest in a trust shall be 74
determined in accordance with the rules for constructive ownership of 75 Governor's Bill No. 9
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stock provided in Section 267(c) of the Internal Revenue Code of 1986, 76
or any subsequent corresponding internal revenue code of the United 77
States, as amended from time to time, other than paragraph (3) of said 78
section. 79
(b) There is established a JobsCT tax rebate program under which 80
qualified businesses that create jobs in this state, in accordance with the 81
provisions of this section, may be allowed a tax rebate, which shall be 82
treated as a credit against the tax imposed under chapter 207, 208 or 228z 83
of the general statutes. 84
(c) (1) To be eligible to claim a rebate under this section, a qualified 85
business shall apply to the commissioner in accordance with the 86
provisions of this subsection. The application shall be on a form 87
prescribed by the commissioner and may require information, 88
including, but not limited to, the number of new FTEs to be created by 89
the qualified business, the number of current FTEs employed by the 90
qualified business, feasibility studies or business plans for the increased 91
number of FTEs, projected state and local revenue that might derive as 92
a result of the increased number of FTEs and any other information 93
necessary to determine whether there will be net benefits to the 94
economy of the municipality in which the qualified business is primarily 95
located and the state. 96
(2) Upon receipt of an application, the commissioner shall determine 97
whether the qualified business making the application is eligible for the 98
rebate and whether the proposed job growth would provide a net 99
benefit to economic development and employment opportunities in the 100
state. The commissioner may require the applicant to submit additional 101
information to evaluate an application. 102
(3) The commissioner, upon consideration of an application and any 103
additional information, may approve an application in whole or in part 104
or may approve an application with amendments. If the commissioner 105
disapproves an application, the commissioner shall identify the defects 106
in such application and shall explain the specific reasons for the 107 Governor's Bill No. 9
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disapproval. The commissioner shall render a decision on an 108
application not later than ninety days after the date of its receipt by the 109
commissioner. 110
(4) The commissioner may approve an application in whole or in part 111
by a qualified business that creates new FTEs that do not meet the 112
minimum wage requirements to be qualified FTEs or may approve such 113
an application with amendments if a majority of such new FTEs are 114
individuals who are disabled, have been unemployed for at least twelve 115
consecutive months, have been convicted of a misdemeanor or felony or 116
have not graduated from and are not currently enrolled in an institution 117
of higher education. For the purposes of this subdivision, "disabled" 118
means inability to engage in any substantial gainful activity by reason 119
of any medically determinable physical or mental impairment that can 120
be expected to result in death or to be of long-continued and indefinite 121
duration. 122
(5) The commissioner may combine approval of an application with 123
the exercise of any of the commissioner's other powers, including, but 124
not limited to, the provision of other forms of financial assistance. 125
(6) The commissioner shall negotiate a contract with an approved 126
qualified business, which shall include, but need not be limited to, a 127
requirement that the qualified business consent to the Department of 128
Economic and Community Development's access of data compiled by 129
other state agencies, including, but not limited to, the Labor 130
Department, for the purposes of audit and enforcement and, if a 131
qualified business is approved by the commissioner in accordance with 132
subdivision (4) of this subsection, the required minimum wage such 133
business shall pay new discretionary FTEs to qualify for the tax rebates 134
provided for in subsection (f) of this section. 135
(7) Upon signing a contract with an approved qualified business, the 136
commissioner shall issue a rebate allocation notice stating the maximum 137
amount of each rebate available to such business for the rebate period 138
and the specific terms that such business shall meet to qualify for each 139 Governor's Bill No. 9
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rebate. Such notice shall certify to the approved qualified business that 140
the rebates may be claimed by such business if it meets the specific terms 141
set forth in the notice. 142
(d) For the purposes of this section, the FTE of a full-time job or part-143
time job is based on the hours worked or expected to be worked by an 144
employee in a calendar year. A job in which an employee worked or is 145
expected to work one thousand seven hundred fifty hours or more in a 146
calendar year equals one FTE. A job in which an employee worked or is 147
expected to work less than one thousand seven hundred fifty hours 148
equals a fraction of one FTE, where the fraction is the number of hours 149
worked in a calendar year divided by one thousand seven hundred fifty. 150
The commissioner shall have the discretion to adjust the calculation of 151
FTE. 152
(e) (1) In each calendar year of the rebate period, a qualified business 153
approved by the commissioner pursuant to subdivision (3) of subsection 154
(c) of this section that employs at least twenty-five new FTEs in this state 155
by December thirty-first of the calendar year that is two calendar years 156
prior to the calendar year in which the rebate is being claimed shall be 157
allowed a rebate equal to the greater of the following amounts: 158
(A) The sum of: 159
(i) The lesser of (I) the new FTEs created in an opportunity zone or 160
distressed municipality on December thirty-first of the calendar year 161
that is two calendar years prior to the calendar year in which the rebate 162
is being claimed, or (II) the new FTEs maintained in an opportunity zone 163
or distressed municipality in the previous calendar year, multiplied by 164
fifty per cent of the income tax that would be paid on the average wage 165
of the new FTEs, as determined using the applicable marginal rate set 166
forth in chapter 229 of the general statutes for an unmarried individual 167
based solely on such wages; and 168
(ii) The lesser of (I) the new FTEs created on December thirty-first of 169
the calendar year that is two calendar years prior to the calendar year in 170
which the rebate is being claimed, or (II) the new FTEs maintained in a 171 Governor's Bill No. 9
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location other than an opportunity zone or distressed municipality in 172
the previous calendar year, multiplied by twenty-five per cent of the 173
income tax that would be paid on the average wage of the new FTEs, as 174
determined using the applicable marginal rate set forth in chapter 229 175
of the general statutes for an unmarried individual based solely on such 176
wages; or 177
(B) One thousand dollars multiplied by the lesser of (i) the new FTEs 178
created by December thirty-first of the calendar year that is two calendar 179
years prior to the calendar year in which the rebate is being claimed, or 180
(ii) the new FTEs maintained in the calendar year immediately prior to 181
the calendar year in which the rebate is being claimed. 182
(2) In no event shall the rebate under this subsection exceed in any 183
calendar year of the rebate period five thousand dollars multiplied by 184
the lesser of (A) the new FTEs created by December thirty-first of the 185
calendar year that is two calendar years prior to the calendar year in 186
which the rebate is being claimed, or (B) the new FTEs maintained in the 187
calendar year immediately prior to the calendar year in which the rebate 188
is being claimed. 189
(3) In no event shall an approved qualified business receive a rebate 190
under this section in any calendar year of the rebate period if such 191
business has not maintained at least twenty-five new FTEs in the 192
calendar year immediately prior to the calendar year in which the rebate 193
is being claimed. 194
(f) (1) In each calendar year of the rebate period, a qualified business 195
approved by the commissioner pursuant to subdivision (4) of subsection 196
(c) of this section that employs at least twenty-five new discretionary 197
FTEs in this state by December thirty-first of the calendar year that is 198
two calendar years prior to the calendar year in which the rebate is being 199
claimed shall be allowed a rebate equal to the sum of the amount 200
calculated pursuant to subdivision (1) of subsection (e) of this section 201
and the greater of the following: 202
(A) The sum of: 203 Governor's Bill No. 9
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(i) The lesser of the new discretionary FTEs (I) created in an 204
opportunity zone or distressed municipality on December thirty-first of 205
the calendar year that is two calendar years prior to the calendar year in 206
which the rebate is being claimed, or (II) maintained in an opportunity 207
zone or distressed municipality in the previous calendar year, 208
multiplied by fifty per cent of the income tax that would be paid on the 209
average wage of the new discretionary FTEs, as determined using the 210
applicable marginal rate set forth in chapter 229 of the general statutes 211
for an unmarried individual based solely on such wages; and 212
(ii) The lesser of the new discretionary FTEs (I) created on December 213
thirty-first of the calendar year that is two calendar years prior to the 214
calendar year in which the rebate is being claimed, or (II) maintained in 215
a location other than an opportunity zone or distressed municipality in 216
the previous calendar year, multiplied by twenty-five per cent of the 217
income tax that would be paid on the average wage of the new 218
discretionary FTEs, as determined using the applicable marginal rate set 219
forth in chapter 229 of the general statutes for an unmarried individual 220
based solely on such wages; or 221
(B) Seven hundred fifty dollars multiplied by the lesser of the new 222
discretionary FTEs (i) created by December thirty-first of the calendar 223
year that is two calendar years prior to the calendar year in which the 224
rebate is being claimed, or (ii) maintained in the calendar year 225
immediately prior to the calendar year in which the rebate is being 226
claimed. 227
(2) In no event shall the rebate under this section exceed in any 228
calendar year of the rebate period five thousand dollars multiplied by 229
the lesser of the new discretionary FTEs (A) created by December thirty-230
first of the calendar year that is two calendar years prior to the calendar 231
year in which the rebate is being claimed, or (B) maintained in the 232
calendar year immediately prior to the calendar year in which the rebate 233
is being claimed. 234
(3) In no event shall an approved qualified business receive a rebate 235 Governor's Bill No. 9
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under this subsection in any calendar year of the rebate period if such 236
business has not maintained at least twenty-five new discretionary FTEs 237
in the calendar year immediately prior to the calendar year in which the 238
rebate is being claimed. 239
(g) The aggregate amount of rebates issued to all approved qualified 240
businesses under this section shall not exceed forty million dollars in 241
any one fiscal year, provided the aggregate amount of rebates issued 242
pursuant to subsection (f) of this section shall not exceed ten per cent of 243
such aggregate limit. 244
(h) (1) A rebate under this section may be granted to an approved 245
qualified business for not more than seven successive calendar years. A 246
rebate shall not be granted until at least thirty-six months after the 247
commissioner's approval of a qualified business' application. 248
(2) An approved qualified business that has fewer than twenty-five 249
new FTEs created in each of two consecutive calendar years or, if such 250
business is approved by the commissioner pursuant to subdivision (4) 251
of subsection (c) of this section, fewer than twenty-five new 252
discretionary FTEs in each of two consecutive calendar years shall 253
forfeit all remaining rebate allocations, unless the commissioner 254
recognizes mitigating circumstances of a regional or national nature, 255
including, but not limited to, a recession. 256
(i) Not later than January thirty-first of each year during the rebate 257
period, each approved qualified business shall provide information to 258
the commissioner regarding the number of new FTEs or new 259
discretionary FTEs created or maintained during the prior calendar year 260
and the qualified wages of such new employees. Any information 261
provided under this subsection shall be subject to audit by the 262
Departments of Economic and Community Development and Revenue 263
Services. 264
(j) Not later than March fifteenth of each year during the rebate 265
period, the Department of Economic and Community Development 266
shall report to the Department of Revenue Services the amounts of 267 Governor's Bill No. 9
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rebates earned by each qualified business, as calculated pursuant to 268
subsections (e) and (f) of this section. The Department of Revenue 269
Services shall pay such rebates against taxes owed by an approved 270
qualified business pursuant to chapter 207, 208 or 228z of the general 271
statutes as determined by the Department of Revenue Services based on 272
the form of incorporation of the qualified business. 273
(k) The commissioner, in consultation with the Department of 274
Revenue Services, the office of the State Comptroller and the Auditors 275
of Public Accounts, shall report annually on the expenses of the JobsCT 276
tax rebate program and the number of FTEs and discretionary FTEs 277
created and maintained. 278
Sec. 2. (NEW) (Effective July 1, 2020, and applicable to taxable years 279
commencing on or after January 1, 2021) As used in this section, "affected 280
business entity" and "member" have the same meanings as provided in 281
subsection (a) of section 12-699 of the general statutes. An affected 282
business entity that receives a rebate under section 1 of this act shall 283
claim such rebate as a credit against the tax due under section 12-699 of 284
the general statutes. If the amount of the rebate allowed pursuant to 285
section 1 of this act exceeds the liability for the tax imposed under 286
section 12-699 of the general statutes, the Commissioner of Revenue 287
Services shall treat such excess as an overpayment and shall refund the 288
amount of such excess, without interest, to the taxpayer. For the 289
purposes of calculating a member's credit pursuant to subsection (g) of 290
section 12-699 of the general statutes, the tax paid by an affected 291
business entity shall be calculated using the tax due under section 12-292
699 of the general statutes without regard to the rebate allowed 293
pursuant to section 1 of this act. 294
Sec. 3. Subsection (b) of section 12-211a of the general statutes is 295
repealed and the following is substituted in lieu thereof (Effective July 1, 296
2020): 297
(b) [(1) For a calendar year commencing on or after January 1, 2011, 298
and prior to January 1, 2013, the amount of tax credit or credits 299 Governor's Bill No. 9
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otherwise allowable against the tax imposed under this chapter for such 300
calendar year may exceed the amount specified in subsection (a) of this 301
section only by the amount computed under subparagraph (A) of 302
subdivision (2) of this subsection, provided in no event may the amount 303
of tax credit or credits otherwise allowable against the tax imposed 304
under this chapter for such calendar year exceed one hundred per cent 305
of the amount of tax due from such taxpayer under this chapter with 306
respect to such calendar year of the taxpayer prior to the application of 307
such credit or credits. 308
(2) (A) The taxpayer's average monthly net employee gain for a 309
calendar year shall be multiplied by six thousand dollars. 310
(B) The taxpayer's average monthly net employee gain for a calendar 311
year shall be computed as follows: For each month in the calendar year, 312
the taxpayer shall subtract from the number of its employees in this state 313
on the last day of such month the number of its employees in this state 314
on the first day of the calendar year. The taxpayer shall total the 315
differences for the twelve months in the calendar year, and such total, 316
when divided by twelve, shall be the taxpayer's average monthly net 317
employee gain for the calendar year. For purposes of this computation, 318
only employees who are required to work at least thirty-five hours per 319
week and only employees who were not employed in this state by a 320
related person, as defined in section 12-217ii, within the twelve months 321
prior to the first day of the calendar year may be taken into account in 322
computing the number of employees. 323
(C) If the taxpayer's average monthly net employee gain is zero or 324
less than zero, the taxpayer may not exceed the amount specified in 325
subsection (a) of this section.] For calendar years commencing on or after 326
January 1, 2024, the amount of the rebate computed under section 1 of 327
this act shall be treated as a credit and may exceed the amount specified 328
in subsection (a) of this section. If the amount of the rebate allowed 329
pursuant to section 1 of this act exceeds the taxpayer's liability for the 330
tax imposed under this chapter, the commissioner shall treat such excess 331
as an overpayment and shall refund the amount of such excess, without 332 Governor's Bill No. 9
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interest, to the taxpayer. 333
Sec. 4. Subsection (b) of section 12-217zz of the 2020 supplement to 334
the general statutes is repealed and the following is substituted in lieu 335
thereof (Effective July 1, 2020): 336
(b) [(1) For an income year commencing on or after January 1, 2011, 337
and prior to January 1, 2013, the amount of tax credit or credits 338
otherwise allowable against the tax imposed under this chapter for such 339
income year may exceed the amount specified in subsection (a) of this 340
section only by the amount computed under subparagraph (A) of 341
subdivision (2) of this subsection, provided in no event may the amount 342
of tax credit or credits otherwise allowable against the tax imposed 343
under this chapter for such income year exceed one hundred per cent of 344
the amount of tax due from such taxpayer under this chapter with 345
respect to such income year of the taxpayer prior to the application of 346
such credit or credits. 347
(2) (A) The taxpayer's average monthly net employee gain for an 348
income year shall be multiplied by six thousand dollars. 349
(B) The taxpayer's average monthly net employee gain for an income 350
year shall be computed as follows: For each month in the taxpayer's 351
income year, the taxpayer shall subtract from the number of its 352
employees in this state on the last day of such month the number of its 353
employees in this state on the first day of its income year. The taxpayer 354
shall total the differences for the twelve months in such income year, 355
and such total, when divided by twelve, shall be the taxpayer's average 356
monthly net employee gain for the income year. For purposes of this 357
computation, only employees who are required to work at least thirty-358
five hours per week and only employees who were not employed in this 359
state by a related person, as defined in section 12-217ii, within the twelve 360
months prior to the first day of the income year may be taken into 361
account in computing the number of employees. 362
(C) If the taxpayer's average monthly net employee gain is zero or 363
less than zero, the taxpayer may not exceed the seventy per cent limit 364 Governor's Bill No. 9
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imposed under subsection (a) of this section.] For income years 365
commencing on or after January 1, 2024, the amount of the rebate 366
computed under section 1 of this act shall be treated as a credit and may 367
exceed the amount specified in subsection (a) of this section. If the 368
amount of the rebate allowed pursuant to section 1 of this act exceeds 369
the taxpayer's liability for the tax imposed under this chapter, the 370
commissioner shall treat such excess as an overpayment and shall 371
refund the amount of such excess, without interest, to the taxpayer. 372
This act shall take effect as follows and shall amend the following
sections:
Section 1 July 1, 2020, and
applicable to taxable years
commencing on or after
January 1, 2021
New section
Sec. 2 July 1, 2020, and
applicable to taxable years
commencing on or after
January 1, 2021
New section
Sec. 3 July 1, 2020 12-211a(b)
Sec. 4 July 1, 2020 12-217zz(b)
Statement of Purpose:
To implement the Governor's budget recommendations.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
underlined.]