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General Assembly Raised Bill No. 1027
January Session, 2023
LCO No. 3721
Referred to Committee on COMMERCE
Introduced by:
(CE)
AN ACT CONCERNING THE DEPARTMENT OF ECONOMIC AND
COMMUNITY DEVELOPMENT'S RECOMMENDATIONS REGARDING
THE JOBSCT TAX REBATE PROGRAM AND CERTAIN AEROSPACE
MANUFACTURING PROJECTS.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Section 32-7t of the general statutes is repealed and the 1
following is substituted in lieu thereof (Effective from passage): 2
(a) As used in this section: 3
(1) "Commissioner" means the Commissioner of Economic and 4
Community Development; 5
(2) "Discretionary FTE" means an FTE that is paid qualified wages 6
and does not meet the threshold wage requirements to be a qualified 7
FTE but is approved by the commissioner pursuant to subdivision (4) of 8
subsection (c) of this section; 9
(3) "Distressed municipality" has the same meaning as provided in 10
section 32-9p; 11 Raised Bill No. 1027
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(4) "Full-time equivalent" or "FTE" means the number of employees 12
employed at a qualified business, calculated in accordance with 13
subsection (d) of this section; 14
(5) "Full-time job" means a job in which an employee is required to 15
work at least thirty-five or more hours per week. "Full-time job" does 16
not include a temporary or seasonal job; 17
(6) "Median household income" means the median annual household 18
income for residents in a municipality as calculated from the U.S. 19
Census Bureau's five-year American Community Survey or another 20
data source, at the sole discretion of the commissioner; 21
(7) "New employee" means a person or persons hired by the qualified 22
business to fill a full-time equivalent position. A new employee does not 23
include a person who was employed in this state by a related person 24
with respect to the qualified business within twelve months prior to a 25
qualified [business'] business's application to the commissioner for a 26
rebate allocation notice for a job creation rebate pursuant to subsection 27
(c) of this section; 28
(8) "New FTEs" means the number of FTEs that (A) did not exist in 29
this state at the time of a qualified [business'] business's application to 30
the commissioner for a rebate allocation notice for a job creation rebate 31
pursuant to subsection (c) of this section, (B) are not the result of FTEs 32
acquired due to a merger or acquisition, (C) are filled by a new 33
employee, (D) are qualified FTEs, and (E) are not FTEs hired to replace 34
FTEs that existed in the state after January 1, 2020. The commissioner 35
may issue guidance on the implementation of this definition; 36
(9) "New FTEs created" means the number of new FTEs that the 37
qualified business is employing at a point-in-time at the end of the 38
relevant time period; 39
(10) "New FTEs maintained" means the total number of new FTEs 40
employed throughout a relevant time period; 41 Raised Bill No. 1027
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(11) "Opportunity zone" means a population census tract that is a 42
low-income community that is designated as a "qualified opportunity 43
zone" pursuant to the Tax Cuts and Jobs Act of 2017, P.L. 115-97, as 44
amended from time to time; 45
(12) "Part-time job" means a job in which an employee is required to 46
work less than thirty-five hours per week. "Part-time job" does not 47
include a temporary or seasonal job; 48
(13) "Qualified business" means a person that is (A) engaged in 49
business in an industry related to finance, insurance, manufacturing, 50
clean energy, bioscience, technology, digital media or any similar 51
industry, as determined by the sole discretion of the commissioner, and 52
(B) subject to taxation under chapter 207, 208 or 228z; 53
(14) "Qualified FTE" means an FTE who is paid qualified wages of at 54
least eighty-five per cent of the median household income for the 55
location where the FTE position is primarily located, scaled in 56
proportion to the FTE fraction, or thirty-seven thousand five hundred 57
dollars, scaled in proportion to the FTE fraction, whichever is greater; 58
(15) "Qualified wages" means wages sourced to this state pursuant to 59
section 12-705; 60
(16) "Rebate period" means the calendar years in which a tax rebate 61
provided for in this section is to be paid pursuant to a [contract 62
executed] rebate allocation notice issued pursuant to subsection (c) of 63
this section; and 64
(17) "Related person" means (A) a corporation, limited liability 65
company, partnership, association or trust controlled by the qualified 66
business, (B) an individual, corporation, limited liability company, 67
partnership, association or trust that is in control of the qualified 68
business, (C) a corporation, limited liability company, partnership, 69
association or trust controlled by an individual, corporation, limited 70
liability company, partnership, association or trust that is in control of 71
the qualified business, or (D) a member of the same controlled group as 72 Raised Bill No. 1027
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the qualified business. For the purposes of this subdivision, "control" 73
means (i) ownership, directly or indirectly, of stock possessing fifty per 74
cent or more of the total combined voting power of all classes of the 75
stock of a corporation entitled to vote, (ii) ownership, directly or 76
indirectly, of fifty per cent or more of the capital or profits interest in a 77
partnership, limited liability company or association, or (iii) ownership, 78
directly or indirectly, of fifty per cent or more of the beneficial interest 79
in the principal or income of a trust. The ownership of stock in a 80
corporation, of a capital or profits interest in a partnership, of a limited 81
liability company or association or of a beneficial interest in a trust shall 82
be determined in accordance with the rules for constructive ownership 83
of stock provided in Section 267(c) of the Internal Revenue Code of 1986, 84
or any subsequent corresponding internal revenue code of the United 85
States, as amended from time to time, other than paragraph (3) of said 86
section. 87
(b) There is established a JobsCT tax rebate program under which 88
qualified businesses that create jobs in this state, in accordance with the 89
provisions of this section, may be allowed a tax rebate, which shall be 90
treated as a credit against the tax imposed under chapter 208 or 228z or 91
as an offset of the tax imposed under chapter 207. 92
(c) (1) To be eligible to claim a rebate under this section, a qualified 93
business shall apply to the commissioner in accordance with the 94
provisions of this subsection. The application shall be on a form 95
prescribed by the commissioner and may require information, 96
including, but not limited to, the number of new FTEs to be created by 97
the qualified business, the number of current FTEs employed by the 98
qualified business, feasibility studies or business plans for the increased 99
number of FTEs, projected state and local revenue that may reasonably 100
derive as a result of the increased number of FTEs and any other 101
information necessary to determine whether there will be net benefits to 102
the economy of the municipality or municipalities in which the qualified 103
business is primarily located and the state. 104
(2) Upon receipt of an application, the commissioner shall determine 105 Raised Bill No. 1027
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(A) whether the qualified business making the application will be 106
reasonably able to meet the FTE hiring targets and other metrics as 107
presented in such application, (B) whether such qualified [business'] 108
business's proposed job growth would provide a net benefit to economic 109
development and employment opportunities in the state, and (C) 110
whether such qualified [business'] business's proposed job growth will 111
exceed the number of jobs at the business that existed prior to January 112
1, 2020. The commissioner may require the applicant to submit 113
additional information to evaluate an application. Each qualified 114
business making an application shall satisfy the requirements of this 115
subdivision, as determined by the commissioner, to be eligible for the 116
JobsCT tax rebate program. 117
(3) The commissioner, upon consideration of an application and any 118
additional information, may approve an application in whole or in part 119
or may approve an application with amendments. If the commissioner 120
disapproves an application, the commissioner shall identify the defects 121
in such application and explain the specific reasons for the disapproval. 122
The commissioner shall render a decision on an application not later 123
than ninety days after the date of its receipt by the commissioner. 124
(4) The commissioner may approve an application in whole or in part 125
by a qualified business that creates new discretionary FTEs or may 126
approve such an application with amendments if a majority of such new 127
discretionary FTEs are individuals who (A) because of a disability, are 128
receiving or have received services from the Department of Aging and 129
Disability Services; (B) are receiving employment services from the 130
Department of Mental Health and Addiction Services or participating in 131
employment opportunities and day services, as defined in section 17a-132
226, operated or funded by the Department of Developmental Services; 133
(C) have been unemployed for at least six of the preceding twelve 134
months; (D) have been convicted of a misdemeanor or felony; (E) are 135
veterans, as defined in section 27-103; (F) have not earned any 136
postsecondary credential and are not currently enrolled in an 137
postsecondary institution or program; or (G) are currently enrolled in a 138
workforce training program fully or substantially paid for by the 139 Raised Bill No. 1027
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employer that results in such individual earning a postsecondary 140
credential. 141
(5) The commissioner may combine approval of an application with 142
the exercise of any of the commissioner's other powers, including, but 143
not limited to, the provision of other financial assistance. 144
(6) [The commissioner shall enter into a contract with an approved 145
qualified business, which shall include, but need not be limited to, a 146
requirement that the qualified business consent] By submitting an 147
application, a qualified business consents to the Department of 148
Economic and Community Development's access of data compiled by 149
other state agencies, including, but not limited to, the Labor 150
Department, for the purposes of audit and enforcement. [and, if a 151
qualified business is approved by the commissioner in accordance with 152
subdivision (4) of this subsection, the required wage such business shall 153
pay new discretionary FTEs to qualify for the tax rebates provided for 154
in subsection (f) of this section.] 155
(7) [Upon signing a contract with an approved qualified business, 156
the] The commissioner shall issue a rebate allocation notice stating the 157
maximum amount of each rebate available to [such] an approved 158
qualified business for the rebate period and the specific terms that such 159
business shall meet to qualify for each rebate. Such notice shall certify 160
to the approved qualified business that the rebates may be claimed by 161
such business if it meets the specific terms set forth in the notice. Such 162
terms shall include the required wage, as determined by the 163
commissioner, such business shall pay new discretionary FTEs to 164
qualify for the tax rebates provided in subsection (f) of this section. 165
(d) For the purposes of this section, the FTE of a full-time job or part-166
time job is based on the hours worked or expected to be worked by an 167
employee in a calendar year. A job in which an employee worked or is 168
expected to work one thousand seven hundred fifty hours or more in a 169
calendar year equals one FTE. A job in which an employee worked or is 170
expected to work less than one thousand seven hundred fifty hours 171 Raised Bill No. 1027
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equals a fraction of one FTE, where the fraction is the number of hours 172
worked in a calendar year divided by one thousand seven hundred fifty. 173
The commissioner shall have the discretion to adjust the calculation of 174
FTE. 175
(e) (1) In each calendar year of the rebate period, a qualified business 176
approved by the commissioner pursuant to subdivision (3) of subsection 177
(c) of this section that employs at least twenty-five new FTEs in this state 178
by December thirty-first of the calendar year that is two calendar years 179
prior to the calendar year in which the rebate is being claimed shall be 180
allowed a rebate equal to the greater of the following amounts: 181
(A) The sum of: 182
(i) The lesser of (I) the new FTEs created in an opportunity zone or 183
distressed municipality on December thirty-first of the calendar year 184
that is two calendar years prior to the calendar year in which the rebate 185
is being claimed, or (II) the new FTEs maintained in an opportunity zone 186
or distressed municipality in the previous calendar year, multiplied by 187
fifty per cent of the income tax that would be paid on the average wage 188
of the new FTEs, as determined by the applicable marginal rate set forth 189
in chapter 229 for an unmarried individual based solely on such wages; 190
and 191
(ii) The lesser of (I) the new FTEs created on December thirty-first of 192
the calendar year that is two calendar years prior to the calendar year in 193
which the rebate is being claimed, or (II) the new FTEs maintained in a 194
location other than an opportunity zone or distressed municipality in 195
the previous calendar year, multiplied by twenty-five per cent of the 196
income tax that would be paid on the average wage of the new FTEs, as 197
determined by the applicable marginal rate set forth in chapter 229 for 198
an unmarried individual based solely on such wages; or 199
(B) The greater of: 200
(i) One thousand dollars multiplied by the lesser of (I) the new FTEs 201
created by December thirty-first of the calendar year that is two calendar 202 Raised Bill No. 1027
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years prior to the calendar year in which the rebate is being claimed, or 203
(II) the new FTEs maintained in the calendar year immediately prior to 204
the calendar year in which the rebate is being claimed; or 205
(ii) For tax credits earned, claimed or payable prior to January 1, 2024, 206
two thousand dollars multiplied by the lesser of (I) the new FTEs created 207
by December 31, 2022, or (II) the new FTEs maintained in the calendar 208
year immediately prior to the calendar year in which the rebate is being 209
claimed. 210
(2) In no event shall the rebate under this subsection exceed in any 211
calendar year of the rebate period five thousand dollars multiplied by 212
the lesser of (A) the new FTEs created by December thirty-first of the 213
calendar year that is two calendar years prior to the calendar year in 214
which the rebate is being claimed, or (B) the new FTEs maintained in the 215
calendar year immediately prior to the calendar year in which the rebate 216
is being claimed. 217
(3) In no event shall an approved qualified business receive a rebate 218
under this subsection in any calendar year of the rebate period if such 219
business has not maintained at least twenty-five new FTEs in the 220
calendar year immediately prior to the calendar year in which the rebate 221
is being claimed. 222
(f) (1) In each calendar year of the rebate period, a qualified business 223
approved by the commissioner pursuant to subdivision (4) of subsection 224
(c) of this section that employs at least twenty-five new discretionary 225
FTEs in this state by December thirty-first of the calendar year that is 226
two calendar years prior to the calendar year in which the rebate is being 227
claimed shall be allowed a rebate equal to the sum of the amount 228
calculated pursuant to subdivision (1) of subsection (e) of this section 229
and the greater of the following: 230
(A) The sum of: 231
(i) The lesser of the new discretionary FTEs (I) created in an 232
opportunity zone or distressed municipality on December thirty-first of 233 Raised Bill No. 1027
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the calendar year that is two calendar years prior to the calendar year in 234
which the rebate is being claimed, or (II) maintained in an opportunity 235
zone or distressed municipality in the previous calendar year, 236
multiplied by fifty per cent of the income tax that would be paid on the 237
average wage of the new discretionary FTEs, as determined by the 238
applicable marginal rate set forth in chapter 229 for an unmarried 239
individual based solely on such wages; and 240
(ii) The lesser of the new discretionary FTEs (I) created on December 241
thirty-first of the calendar year that is two calendar years prior to the 242
calendar year in which the rebate is being claimed, or (II) maintained in 243
a location other than an opportunity zone or distressed municipality in 244
the previous calendar year, multiplied by twenty-five per cent of the 245
income tax that would be paid on the average wage of the new 246
discretionary FTEs, as determined by the applicable marginal rate set 247
forth in chapter 229 for an unmarried individual based solely on such 248
wages; or 249
(B) The greater of: 250
(i) Seven hundred fifty dollars multiplied by the lesser of the new 251
discretionary FTEs (I) created by December thirty-first of the calendar 252
year that is two calendar years prior to the calendar year in which the 253
rebate is being claimed, or (II) maintained in the calendar year 254
immediately prior to the calendar year in which the rebate is being 255
claimed; or 256
(ii) For tax credits earned, claimed or payable prior to January 1, 2024, 257
one thousand five hundred dollars multiplied by the lesser of (I) the new 258
FTEs created by December 31, 2022, or (II) the new FTEs maintained in 259
the calendar year immediately prior to the calendar year in which the 260
rebate is being claimed. 261
(2) In no event shall the rebate under this section exceed in any 262
calendar year of the rebate period five thousand dollars multiplied by 263
the lesser of the new discretionary FTEs (A) created by December thirty-264
first of the calendar year that is two calendar years prior to the calendar 265 Raised Bill No. 1027
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year in which the rebate is being claimed, or (B) maintained in the 266
calendar year immediately prior to the calendar year in which the rebate 267
is being claimed. 268
(3) In no event shall an approved qualified business receive a rebate 269
under this subsection in any calendar year of the rebate period if such 270
business has not maintained at least twenty-five new discretionary FTEs 271
in the calendar year immediately prior to the calendar year in which the 272
rebate is being claimed. 273
(g) (1) Notwithstanding the provisions of subdivisions (3) and (4) of 274
subsection (c) of this section, the commissioner may not approve an 275
application in whole or in part if the full amount of rebates that such 276
applicant may be paid pursuant to subsection (e) or (f) of this section 277
would result in the aggregate amount of rebates issued to all approved 278
qualified businesses under this section exceeding forty million dollars 279
in any fiscal year. 280
(2) Notwithstanding the provisions of subdivision (4) of subsection 281
(c) of this section, the commissioner may not approve an application in 282
whole or in part if the full amount of rebates that such applicant may be 283
paid pursuant to subsection (f) of this section would result in the 284
aggregate amount of rebates issued pursuant to subsection (f) of this 285
section exceeding ten million dollars in any fiscal year. 286
(h) (1) A rebate under this section may be granted to an approved 287
qualified business for not more than seven successive calendar years. A 288
rebate shall not be granted until at least twenty-four months after the 289
commissioner's approval of a qualified [business'] business's 290
application. 291
(2) An approved qualified business that has fewer than twenty-five 292
new FTEs created in each of two consecutive calendar years or, if such 293
business is approved by the commissioner pursuant to subdivision (4) 294
of subsection (c) of this section, fewer than twenty-five new 295
discretionary FTEs in each of two consecutive calendar years shall 296
forfeit all remaining rebate allocations, unless the commissioner 297 Raised Bill No. 1027
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recognizes mitigating circumstances of a regional or national nature, 298
including, but not limited to, a recession. 299
(i) Not later than January thirty-first of each year during the rebate 300
period, each approved qualified business shall provide information to 301
the commissioner regarding the number of new FTEs or new 302
discretionary FTEs created or maintained during the prior calendar year 303
and the qualified wages of such new employees. Any information 304
provided under this subsection shall be subject to audit by the 305
Department of Economic and Community Development. 306
(j) Not later than March fifteenth of each year during the rebate 307
period, the Department of Economic and Community Development 308
shall issue the approved qualified business a rebate voucher that sets 309
forth the amount of the rebate, as calculated pursuant to subsections (e) 310
and (f) of this section, and the taxable year against which such rebate 311
may be claimed. The approved qualified business shall claim such 312
rebate as a credit against the taxes due under chapter 208 or 228z or as 313
an offset of the tax imposed under chapter 207. The commissioner shall 314
annually provide to the Commissioner of Revenue Services a report 315
detailing all rebate vouchers that have been issued under this section. 316
(k) Beginning on January 1, 2023, and annually thereafter, the 317
commissioner, in consultation with the office of the State Comptroller 318
and the Auditors of Public Accounts, shall submit a report to the Office 319
of Policy and Management on the expenses of the JobsCT tax rebate 320
program and the number of FTEs and discretionary FTEs created and 321
maintained. 322
Sec. 2. Section 32-4p of the general statutes is repealed and the 323
following is substituted in lieu thereof (Effective from passage): 324
(a) As used in this section: 325
(1) "Aerospace manufacturing project" means a project involving the 326
production of helicopters in this state that, if certified by the 327
commissioner as provided in subsection (b) of this section, will require 328 Raised Bill No. 1027
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(A) primary helicopter production for current United States government 329
programs specified in the assistance agreement, as of the date of the 330
assistance agreement, to be carried out at one or more facilities in this 331
state, (B) the undertaking and maintaining of primary production for 332
helicopters to be produced during the term of the assistance agreement 333
under one or more future United States government programs specified 334
in the assistance agreement under production contracts entered into by 335
the eligible taxpayer after April 28, 2022, to be carried out at one or more 336
facilities in this state, and (C) minimum requirements for total 337
employment in this state, average employee wages in this state, supplier 338
spend and capital expenditures by an eligible taxpayer in furtherance of 339
such project continuing through at least June 30, 2042; 340
(2) "Annual recapture amount" means the total project tax benefits 341
utilized by an eligible taxpayer divided by ten; 342
(3) "Assistance agreement" means a contract entered into between the 343
commissioner and an eligible taxpayer in accordance with subsection (c) 344
of this section, including any amendments to or extensions of such 345
contract; 346
(4) "Average wage requirement" means, for compliance years 347
commencing on or after July 1, 2022, and prior to July 1, 2032, an average 348
annual wage for full-time employees in this state that is not less than the 349
amounts specified in the assistance agreement; 350
(5) "Benefit period" means the period commencing on the effective 351
date of the assistance agreement and ending on June 30, 2032; 352
(6) "Capital expenditure" means bona fide costs to the wholly-owned 353
subsidiary and its subsidiaries for: (A) Acquisition of lands, buildings, 354
machinery, equipment or any combination thereof; (B) site and 355
infrastructure improvements; (C) planning costs; (D) research and 356
development expenses, as defined in section 12-217n of the general 357
statutes, revision of 1958, revised to January 1, 2021, and including, but 358
not limited to, development of new products and markets; and (E) 359
development of diversification strategies, including plans for regional 360 Raised Bill No. 1027
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diversification strategies and consultants required for the completion of 361
such strategies and plans; 362
(7) "Capital expenditure requirement" means, for compliance years 363
commencing on or after July 1, 2022, and prior to July 1, 2032, a total 364
annual amount of capital expenditures made in this state by the wholly-365
owned subsidiary that is not less than: 366
(A) Seventy million two hundred thousand dollars for the 367
compliance year ending June 30, 2023; 368
(B) Seventy-one million one hundred thousand dollars for the 369
compliance year ending June 30, 2024; 370
(C) Seventy-two million nine hundred thousand dollars for the 371
compliance year ending June 30, 2025; 372
(D) Seventy-three million eight hundred thousand dollars for the 373
compliance year ending June 30, 2026; 374
(E) Seventy-five million six hundred thousand dollars for the 375
compliance year ending June 30, 2027; 376
(F) Seventy-seven million four hundred thousand dollars for the 377
compliance year ending June 30, 2028; 378
(G) Seventy-eight million three hundred thousand dollars for the 379
compliance year ending June 30, 2029; 380
(H) Eighty million one hundred thousand dollars for the compliance 381
year ending June 30, 2030; 382
(I) Eighty-one million nine hundred thousand dollars for the 383
compliance year ending June 30, 2031; and 384
(J) Eighty-three million seven hundred thousand dollars for the 385
compliance year ending June 30, 2032; 386
(8) "Commissioner" means the Commissioner of Economic and 387 Raised Bill No. 1027
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Community Development; 388
(9) "Company" means an entity with a place of business or a wholly-389
owned subsidiary located in this state and the direct and indirect 390
subsidiaries and affiliates of such entity; 391
(10) "Compliance year" means each twelve -month period 392
commencing July first and continuing through June thirtieth of the 393
following year, provided the initial compliance year shall commence on 394
July 1, 2022, and end on June 30, 2023, and the last compliance year shall 395
commence on July 1, 2031, and end on June 30, 2032. "Annual" refers to 396
a compliance year; 397
(11) "Contract year" means each twelve-month period commencing 398
July first and continuing through June thirtieth of the following year, 399
provided the initial contract year shall commence on July 1, 2022, and 400
end on June 30, 2023, and the last contract year shall commence on July 401
1, 2041, and end on June 30, 2042; 402
(12) "Corporation business tax" means the tax due under chapter 208; 403
(13) "Eligible taxpayer" means a company that, at the time application 404
is made under subsection (b) of this section, (A) is engaged in the 405
aerospace industry, (B) employs not less than seven thousand 406
individuals in this state, (C) operates the company's primary helicopter 407
production facility for its current United States government programs 408
in this state, (D) plans to bid on a production contract or contracts for a 409
helicopter under one or more United States government programs, and 410
(E) has a wholly-owned subsidiary with production facilities and its 411
headquarters, as set forth in the assistance agreement, in this state prior 412
to April 28, 2022; 413
(14) (A) "Employee requirement" means, for compliance years 414
commencing on or after July 1, 2022, and prior to July 1, 2032: 415
(i) A minimum level of full-time employees in this state that is not 416
less than an average of seven thousand three hundred seventy-five for 417 Raised Bill No. 1027
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each compliance year if the eligible taxpayer has entered into a 418
production contract for one United States government program 419
specified in the assistance agreement; and 420
(ii) A minimum level of full-time employees in this state that is not 421
less than an average of seven thousand five hundred for each 422
compliance year if the eligible taxpayer has entered into production 423
contracts for two United States government programs specified in the 424
assistance agreement. 425
(B) The average number of full-time employees for each compliance 426
year shall be determined by adding the number of full-time employees 427
at the end of each quarter of the respective compliance year and 428
dividing the sum of such quarters by four; 429
(15) "Full-time employee" means an employee in this state of the 430
company who works a minimum of thirty-five hours per week. "Full-431
time employee" does not include an employee working on a temporary 432
or seasonal basis or any individual who does not receive a federal Form 433
W-2 from the company; 434
(16) "Minimum requirements" means the minimum conditions the 435
eligible taxpayer must satisfy during each compliance year to qualify for 436
the sales and use tax offset for such compliance year and the refundable 437
tax credit for such compliance year, including, but not limited to, (A) 438
achieving the employee requirement, average wage requirement, 439
supplier spend requirement and capital expenditure requirement, (B) 440
the maintenance of the wholly-owned subsidiary's headquarters, as set 441
forth in the assistance agreement, in this state, (C) the maintenance and 442
operation of the company's primary helicopter production facility for its 443
current United States government programs, as of the date of the 444
assistance agreement, in this state, (D) the undertaking and maintaining 445
in this state of the company's primary production for helicopters to be 446
produced during the term of the assistance agreement under one or 447
more future United States government programs specified in the 448
assistance agreement under production contracts entered into by the 449 Raised Bill No. 1027
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eligible taxpayer after April 28, 2022, and (E) the maintenance of 450
diversity and workforce training programs by the company in 451
accordance with the terms of the assistance agreement; 452
(17) "Production" means the various operations related to the 453
completion of a helicopter, including, but not limited to, procurement, 454
engineering, manufacture, assembly, integration and testing; 455
(18) "Production contract" means a contract with the United States 456
government for the production of helicopters; 457
(19) "Project tax benefit" means the total benefit accruing to an eligible 458
taxpayer with respect to the sales and use tax offset and the refundable 459
tax credit; 460
(20) "Refundable tax credit" means the credit described in subsection 461
(e) of this section; 462
(21) "Regular place of business" means any bona fide office, factory, 463
warehouse or other space in this state at which a supply company is 464
doing business in its own name in a regular and systematic manner and 465
which place is continuously maintained, occupied and used by the 466
supply company in carrying on its business through its employees 467
regularly in attendance to carry on the supply company's business in the 468
supply company's own name. "Regular place of business" does not 469
include a place of business for a statutory agent for service of process, a 470
temporary office or location used by the supply company only for the 471
duration of the contract or an office maintained, occupied and used by 472
a person affiliated with the supply company; 473
(22) "Sales and use tax" means the taxes due under chapter 219; 474
(23) "Sales and use tax offset" means the offset described under 475
subsection (d) of this section; 476
(24) "Supply company" means any commercial business with a 477
regular place of business in this state that supplies goods and services 478
necessary to support (A) the manufacturing of company products, or (B) 479 Raised Bill No. 1027
LCO No. 3721 17 of 25
company operations. "Supply company" does not include any local, 480
state or federal revenue collection or taxing entity; 481
(25) (A) "Supplier spend requirement" means, for compliance years 482
commencing on or after July 1, 2022, and prior to July 1, 2032, the total 483
annual spend by the wholly-owned subsidiary and by the company, on 484
behalf of the wholly-owned subsidiary, with supply companies in this 485
state of not less than: 486
(i) Three hundred million dollars for compliance years commencing 487
on or after July 1, 2022, and prior to July 1, 2024; 488
(ii) Four hundred ten million dollars for compliance years 489
commencing on or after July 1, 2024, and prior to July 1, 2029; and 490
(iii) Four hundred seventy million dollars for compliance years 491
commencing on or after July 1, 2029, and prior to July 1, 2032. 492
(B) If an expenditure qualifies for both the supplier spend 493
requirement and the capital expenditures requirement, the eligible 494
taxpayer may choose between such categories for which such 495
expenditure may be counted. In no event shall any such expenditure be 496
counted towards more than one such category; and 497
(26) "Wholly-owned subsidiary" means a subsidiary of the company, 498
or such subsidiary's successor to its operations, that has its 499
headquarters, as set forth in the assistance agreement, in this state. 500
"Wholly-owned subsidiary" includes any direct or indirect subsidiary of 501
the company's wholly-owned subsidiary and any limited liability 502
company wholly owned directly or indirectly by the company's wholly-503
owned subsidiary. 504
(b) (1) Any eligible taxpayer that intends to undertake an aerospace 505
manufacturing project may apply to the commissioner for certification 506
of such project as a certified aerospace manufacturing project. In order 507
to receive such certification, an eligible taxpayer shall apply to the 508
commissioner, in a form acceptable to the commissioner and including 509 Raised Bill No. 1027
LCO No. 3721 18 of 25
such information as prescribed by the commissioner, including, but not 510
limited to, (A) a detailed plan outlining the aerospace manufacturing 511
project, (B) the term of such project, and (C) the estimated expenditures 512
for such project. The commissioner may require such eligible taxpayer 513
to submit such additional information as may be necessary to evaluate 514
the application. 515
(2) All decisions of the commissioner with respect to any application 516
received under subdivision (1) of this subsection shall be made in the 517
commissioner's discretion. The provisions of this subsection shall not be 518
construed to authorize suit against this state by any taxpayer that is 519
denied certification by the commissioner and shall not be construed as 520
a waiver of sovereign immunity. 521
(c) (1) Upon certification by the commissioner of an application as 522
provided in subsection (b) of this section, the commissioner may enter 523
into an assistance agreement with an eligible taxpayer pursuant to 524
which the commissioner may, in consideration of the eligible taxpayer's 525
agreement to meet the minimum requirements in a compliance year in 526
connection with the certified aerospace manufacturing project and as 527
further inducement for the eligible taxpayer to enter into an aerospace 528
manufacturing project, agree to permit the eligible taxpayer to offset its 529
sales and use tax liability and to claim a credit against its corporation 530
business tax liability up to a specified amount for the corresponding 531
compliance year. 532
(2) Such assistance agreement shall have a term of not less than 533
twenty years and shall list: 534
(A) The specifications of the certified aerospace manufacturing 535
project; 536
(B) The length of time the certified aerospace manufacturing project 537
will take to complete; 538
(C) The minimum requirements the eligible taxpayer agrees to meet 539
during each compliance year; 540 Raised Bill No. 1027
LCO No. 3721 19 of 25
(D) The commitment by the eligible taxpayer to (i) maintain the 541
headquarters, as set forth in the assistance agreement, of the wholly-542
owned subsidiary or its successor in this state, (ii) operate its primary 543
helicopter production facility for its current United States government 544
programs, as of the date of the assistance agreement, in this state, and 545
(iii) to undertake and maintain its primary production of helicopters to 546
be produced during the term of the assistance agreement under one or 547
more future United States government programs specified in the 548
assistance agreement in this state under production contracts entered 549
into by the eligible taxpayer after April 28, 2022; 550
(E) The amount of sales and use tax that the eligible taxpayer is 551
eligible to offset for each compliance year set forth in the assistance 552
agreement, provided the eligible taxpayer meets the minimum 553
requirements for each such compliance year; 554
(F) The terms and conditions of the repayment of any sales and use 555
tax offsets and other required financial penalties resulting from the 556
eligible taxpayer's failure to comply with the terms of the assistance 557
agreement; 558
(G) The amount of corporation business tax, subject to the limits set 559
forth in subsection (e) of this section, against which the eligible taxpayer 560
is eligible to claim a credit for each compliance year set forth in the 561
assistance agreement, provided the eligible taxpayer meets the 562
minimum requirements for each such compliance year; 563
(H) The manner and method for the eligible taxpayer to provide 564
notice of any disputed claim under the assistance agreement; and 565
(I) Any other terms and conditions the commissioner may require. 566
(3) The commissioner may amend the assistance agreement [shall] to 567
provide that the project tax benefit be earned [and utilized] during the 568
first eight years of the term of any production contract and utilized 569
within the first nine years of the term of any production contract, 570
provided no project tax benefit may be earned [or utilized] beyond the 571 Raised Bill No. 1027
LCO No. 3721 20 of 25
benefit period or utilized beyond one year after the end of the benefit 572
period. 573
(4) Any eligible taxpayer that enters into an assistance agreement 574
with the commissioner under this subsection may, in the event of any 575
disputed claim under such assistance agreement, bring an action against 576
this state to the superior court for the judicial district of Hartford for the 577
purpose of having such claim determined, provided notice of such 578
disputed claim is first given to the commissioner in the manner and 579
method described in such assistance agreement. No such action shall be 580
allowed unless it is brought not later than two years after the date on 581
which the eligible taxpayer gave proper notice to the commissioner in 582
accordance with such assistance agreement. All legal defenses under 583
such assistance agreement, except sovereign immunity, are reserved to 584
this state. 585
(5) If the provisions of subsection (c) or (e) of section 32-223 or section 586
32-462 are in conflict with the assistance agreement, the provisions of 587
such assistance agreement shall supersede. 588
(6) Upon the execution of the assistance agreement, the commissioner 589
shall issue an allocation notice stating the maximum combined amount 590
of the sales and use tax offset and the refundable tax credit available to 591
the eligible taxpayer for the benefit period and the specific requirements 592
the eligible taxpayer shall meet to qualify for such offset and credit. Such 593
notice shall certify to the eligible taxpayer that the offsets and credits 594
may be claimed by the eligible taxpayer if the eligible taxpayer meets 595
the specific requirements set forth in the notice. 596
(d) (1) The assistance agreement shall provide for the offset of sales 597
and use tax amounts otherwise payable by the eligible taxpayer under 598
the provisions of chapter 219. Such offset shall be made in the form, 599
timing and manner determined by the commissioner in consultation 600
with the Commissioner of Revenue Services. The sales and use tax offset 601
amounts shall be calculated after the application of all other sales and 602
use tax exemptions set forth in chapter 219 in effect on April 28, 2022 603 Raised Bill No. 1027
LCO No. 3721 21 of 25
and any subsequent amendments to said chapter that the eligible 604
taxpayer is eligible to claim. Nothing in this subsection shall affect the 605
eligible taxpayer's ability to claim the sales and use tax exemptions that 606
it otherwise qualifies for under any provision of the general statutes. 607
(2) Subsequent to a production contract taking effect for helicopters 608
to be produced during the term of the assistance agreement, not later 609
than sixty days after the end of each compliance year or, if the eligible 610
taxpayer requests and the commissioner approves an extended date, not 611
later than such extended date, the eligible taxpayer shall certify, subject 612
to a third-party audit performed in accordance with the Department of 613
Economic and Community Development audit guide or such protocols 614
as may be set forth in the assistance agreement, the actual employment, 615
wages, supplier spend and capital expenditure amounts to the 616
commissioner in accordance with the requirements of the assistance 617
agreement. If the results of such audit reveal that the eligible taxpayer 618
has claimed a sales and use tax offset in excess of the amount allowable, 619
the eligible taxpayer shall be subject to the repayment provisions as set 620
forth in the assistance agreement. At the end of each compliance year, 621
upon receipt of the eligible taxpayer's certification, the commissioner 622
shall notify the Commissioner of Revenue Services whether the eligible 623
taxpayer has met all minimum requirements necessary to qualify for the 624
sales and use tax offset or is required to repay the amount of such offset 625
in accordance with the terms of the assistance agreement. 626
(e) (1) If the results of the audit performed pursuant to subdivision 627
(2) of subsection (d) of this section reveal that the eligible taxpayer was 628
unable to utilize all of the sales and use tax offset to which it was entitled 629
under the assistance agreement for a compliance year against its sales 630
and use tax liability, the assistance agreement shall permit the eligible 631
taxpayer to claim the excess amount as a refundable tax credit, not to 632
exceed five million dollars for each compliance year, against the 633
corporation business tax. If the amount of the excess is greater than five 634
million dollars for any compliance year, the excess over five million 635
dollars shall be carried forward to future compliance years to offset the 636
eligible taxpayer's sales and use tax liability and then as refundable tax 637 Raised Bill No. 1027
LCO No. 3721 22 of 25
credits of up to five million dollars for each compliance year against the 638
eligible taxpayer's corporation business tax liability, until the excess is 639
fully utilized, except that no carry-forward shall extend beyond one year 640
after the end of the benefit period. Such carry-forward shall be utilized 641
prior to any sales and use tax offset earned in any subsequent 642
compliance year. 643
(2) If the amount of the refundable tax credit exceeds the eligible 644
taxpayer's corporation business tax liability for the applicable income 645
year, the Commissioner of Revenue Services shall treat such excess as 646
an overpayment and shall refund the amount of such excess, without 647
interest, to the eligible taxpayer. In no event shall the refundable tax 648
credits allowed under this subsection exceed forty-five million dollars 649
in the aggregate over the term of the assistance agreement. The eligible 650
taxpayer shall claim the refundable tax credit allowed under this 651
subsection on its corporate tax return for the income year that ends 652
during the compliance year and such credit shall not be subject to the 653
limits set forth in section 12-217zz. Notwithstanding the provisions of 654
section 12-217aa, such credit shall be claimed after all other tax credits 655
have been claimed. 656
(3) Not later than thirty days after the commissioner receives an audit 657
performed pursuant to subdivision (2) of subsection (d) of this section 658
or as provided for in the assistance agreement, during each year of the 659
benefit period, the Department of Economic and Community 660
Development shall issue the eligible taxpayer a credit voucher that sets 661
forth the amount of the refundable tax credit permitted pursuant to this 662
subsection and the income year for which such credit may be claimed. 663
The commissioner shall annually provide to the Commissioner of 664
Revenue Services a report detailing all credit vouchers that have been 665
issued under this subsection. 666
(f) (1) The eligible taxpayer shall pay the total amount of project tax 667
benefit that was utilized by the eligible taxpayer for a particular 668
compliance year and any penalty set forth in the assistance agreement if 669
the commissioner determines that the eligible taxpayer failed to satisfy 670 Raised Bill No. 1027
LCO No. 3721 23 of 25
any of the minimum requirements for such compliance year. 671
(2) The project tax benefit utilized by the eligible taxpayer under 672
subsections (d) and (e) of this section shall be subject to recapture during 673
the contract years commencing on or after July 1, 2032, and ending on 674
June 30, 2042, if the eligible taxpayer fails to satisfy during such time 675
period certain annual thresholds relating to employee head count, 676
average wages, supplier spend and capital expenditures, as detailed in 677
the assistance agreement, and such other requirements including (A) the 678
maintenance of the wholly-owned subsidiary's headquarters, as set 679
forth in the assistance agreement, in this state, (B) the maintenance and 680
operation of the company's primary helicopter production facility for its 681
current United States government programs, as of the date of the 682
assistance agreement, in this state, (C) the undertaking and maintaining 683
in this state of the company's primary production for helicopters to be 684
produced during the term of the assistance agreement under one or 685
more of its future United States government programs specified in the 686
assistance agreement under production contracts entered into by the 687
eligible taxpayer after April 28, 2022, and (D) the maintenance of 688
diversity and workforce training programs by the company in 689
accordance with the terms of the assistance agreement. 690
(3) If the eligible taxpayer enters into a production contract with the 691
United States government for one helicopter program specified in the 692
assistance agreement, the targeted job requirement shall be seven 693
thousand two hundred fifty, and the minimum job requirement shall be 694
six thousand for each of the years subject to the recapture under 695
subdivision (2) of this subsection. If the eligible taxpayer enters into 696
production contracts with the United States government for two 697
helicopter programs specified in the assistance agreement, the targeted 698
job requirement shall be seven thousand seven hundred fifty, and the 699
minimum job requirement shall be seven thousand for each of the years 700
subject to the recapture under subdivision (2) of this subsection. The 701
annual recapture amount shall be (A) repaid if the number of actual jobs 702
in any year subject to the recapture is less than the minimum job 703
requirement, and (B) prorated at ninety per cent value of the annual 704 Raised Bill No. 1027
LCO No. 3721 24 of 25
recapture amount if the number of actual jobs is equal to or greater than 705
the minimum job requirement but less than the targeted job 706
requirement. In addition to the recapture job obligation, the 707
commissioner may require other criteria, including, but not limited to, 708
wage requirements, with respect to the recapture of the remaining ten 709
per cent of the annual recapture amount. In no event shall the amount 710
of the recapture exceed the annual recapture amount. 711
(g) The aggregate amount of the project tax benefit granted by the 712
commissioner under this section shall not exceed (1) six million two 713
hundred fifty thousand dollars for each compliance year or fifty million 714
dollars during the term of the assistance agreement if the eligible 715
taxpayer has entered into a production contract after April 28, 2022, with 716
the United States government for one helicopter program specified in 717
the assistance agreement, and (2) nine million three hundred seventy-718
five thousand dollars for each compliance year or seventy-five million 719
dollars during the term of the assistance agreement if the eligible 720
taxpayer has entered into production contracts after April 28, 2022, with 721
the United States government for two helicopter programs specified in 722
the assistance agreement. 723
(h) The commissioner shall not enter into any assistance agreement 724
under subsection (c) of this section after January 31, 2023. 725
(i) The commissioner may make revisions to the terms of the 726
assistance agreement to address a scenario where a delay, not caused by 727
the eligible taxpayer, prevents the eligible taxpayer from entering into 728
one or more production contracts by June 30, 2024. Such revisions may 729
include changes to the timing of (1) the benefit period, (2) the 730
compliance years, (3) the contract years, (4) the minimum requirements, 731
and (5) the recapture period, and other conforming changes, provided 732
in all cases, the project tax benefit shall be earned [and utilized] during 733
the first eight years of the term of any such production contract and 734
utilized not later than one year after the end of the benefit period. 735
(j) The commissioner may from time to time amend, supplement or 736 Raised Bill No. 1027
LCO No. 3721 25 of 25
modify the terms of the assistance agreement consistent with the 737
provisions of this section. 738
This act shall take effect as follows and shall amend the following
sections:
Section 1 from passage 32-7t
Sec. 2 from passage 32-4p
Statement of Purpose:
To (1) replace provisions requiring a contract under the JobsCT tax
rebate program with provisions requiring a rebate allocation notice, and
(2) extend the time period an eligible taxpayer may utilize certain
aerospace manufacturing project tax benefits earned under certain
assistance agreements.
[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.]