Researcher: RP Page 1 4/20/22
OLR Bill Analysis
HB 5504
AN ACT CONCERNING THE REMOVAL OF AN ENTERPRISE ZONE
DESIGNATION.
SUMMARY
Existing law authorizes the Department of Economic and
Community Development (DECD) commissioner to remove an
enterprise zone’s designation if the area no longer meets the designation
criteria. This bill prohibits the commissioner from doing so if the
number of residents in the zone with incomes below the poverty level
has not been reduced by at least 75% from the date the zone was
originally approved (based on the most recent U.S. census). As under
existing law, once designated, an area remains an enterprise zone for at
least 10 years.
Generally, to qualify as an enterprise zone under the program’s
statutory criteria, a proposed zone must meet specified poverty
measures (e.g., at least 25% of the zone’s residents must have incomes
below the poverty level or receive public assistance, or the zone’s
unemployment rate must be at least double the average state rate).
EFFECTIVE DATE: Upon passage
BACKGROUND
Enterprise Zone Benefits
Enterprise zone benefits are generally available to businesses that
start up in or improve real property there. These benefits include a (1)
five-year, 80% property tax exemption for qualifying facility
improvements and machinery and equipment purchases (CGS § 12-
81(59) & (60)) and (2) seven-year fixed assessment for qualifying
commercial and residential real property improvements (CGS § 32-71).
The law designates municipalities containing an enterprise zone as
“targeted investment communities,” which qualifies them for enhanced 2022HB-05504-R000554-BA.DOCX
Researcher: RP Page 2 4/20/22
funding and other tax incentives (e.g., enhanced financial assistance
under the Manufacturing Assistance Act program (CGS § 32-223(c))).
Designated Zones
There are 18 enterprise zones currently designated in the following
towns: Bridgeport, Bristol, East Hartford, Groton, Hamden, Hartford,
Meriden, Middletown, New Britain, New Haven, New London,
Norwalk, Norwich, Southington, Stamford, Thomaston, Waterbury,
and Windham.
COMMITTEE ACTION
Finance, Revenue and Bonding Committee
Joint Favorable
Yea 42 Nay 9 (04/05/2022)