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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 Section 32-7t of the general statutes is repealed and the 1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) 8
of subsection (c) of this section; 9
(3) "Distressed municipality" has the same meaning as provided in 10
section 32-9p; 11 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 18
household income for residents in a municipality as calculated from 19
the U.S. Census Bureau's five-year American Community Survey or 20
another data source, at the sole discretion of the commissioner; 21
(7) "New employee" means a person or persons hired by the 22
qualified business to fill a full-time equivalent position. A new 23
employee does not include a person who was employed in this state by 24
a related person with respect to the qualified business within twelve 25
months prior to a qualified [business'] business's application to the 26
commissioner for a rebate allocation notice for a job creation rebate 27
pursuant to subsection (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 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, 52
and (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 59
to 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 72 Bill No. 1027
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as the qualified business. For the purposes of this subdivision, 73
"control" means (i) ownership, directly or indirectly, of stock 74
possessing fifty per cent or more of the total combined voting power of 75
all classes of the stock of a corporation entitled to vote, (ii) ownership, 76
directly or indirectly, of fifty per cent or more of the capital or profits 77
interest in a partnership, limited liability company or association, or 78
(iii) ownership, directly or indirectly, of fifty per cent or more of the 79
beneficial interest in the principal or income of a trust. The ownership 80
of stock in a corporation, of a capital or profits interest in a 81
partnership, of a limited liability company or association or of a 82
beneficial interest in a trust shall be determined in accordance with the 83
rules for constructive ownership of stock provided in Section 267(c) of 84
the Internal Revenue Code of 1986, or any subsequent corresponding 85
internal revenue code of the United States, as amended from time to 86
time, other than paragraph (3) of said 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 89
the provisions of this section, may be allowed a tax rebate, which shall 90
be treated as a credit against the tax imposed under chapter 208 or 91
228z or 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 99
increased number of FTEs, projected state and local revenue that may 100
reasonably derive as a result of the increased number of FTEs and any 101
other information necessary to determine whether there will be net 102
benefits to the economy of the municipality or municipalities in which 103
the qualified business is primarily located and the state. 104
(2) Upon receipt of an application, the commissioner shall 105 Bill No. 1027
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determine (A) whether the qualified business making the application 106
will be reasonably able to meet the FTE hiring targets and other 107
metrics as presented in such application, (B) whether such qualified 108
[business'] business's proposed job growth would provide a net benefit 109
to economic development and employment opportunities in the state, 110
and (C) whether such qualified [business'] business's proposed job 111
growth will exceed the number of jobs at the business that existed 112
prior to January 1, 2020. The commissioner may require the applicant 113
to submit additional information to evaluate an application. Each 114
qualified business making an application shall satisfy the requirements 115
of this subdivision, as determined by the commissioner, to be eligible 116
for the 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 122
disapproval. The commissioner shall render a decision on an 123
application not later than ninety days after the date of its receipt by the 124
commissioner. 125
(4) The commissioner may approve an application in whole or in 126
part by a qualified business that creates new discretionary FTEs or 127
may approve such an application with amendments if a majority of 128
such new discretionary FTEs are individuals who (A) because of a 129
disability, are receiving or have received services from the Department 130
of Aging and Disability Services; (B) are receiving employment 131
services from the Department of Mental Health and Addiction Services 132
or participating in employment opportunities and day services, as 133
defined in section 17a-226, operated or funded by the Department of 134
Developmental Services; (C) have been unemployed for at least six of 135
the preceding twelve months; (D) have been convicted of a 136
misdemeanor or felony; (E) are veterans, as defined in section 27-103; 137
(F) have not earned any postsecondary credential and are not currently 138 Bill No. 1027
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enrolled in an postsecondary institution or program; or (G) are 139
currently enrolled in a workforce training program fully or 140
substantially paid for by the employer that results in such individual 141
earning a postsecondary credential. 142
(5) The commissioner may combine approval of an application with 143
the exercise of any of the commissioner's other powers, including, but 144
not limited to, the provision of other financial assistance. 145
(6) [The commissioner shall enter into a contract with an approved 146
qualified business, which shall include, but need not be limited to, a 147
requirement that the qualified business consent] By submitting an 148
application, a qualified business consents to the Department of 149
Economic and Community Development's access of data compiled by 150
other state agencies, including, but not limited to, the Labor 151
Department, for the purposes of audit and enforcement. [and, if a 152
qualified business is approved by the commissioner in accordance 153
with subdivision (4) of this subsection, the required wage such 154
business shall pay new discretionary FTEs to qualify for the tax rebates 155
provided for in subsection (f) of this section.] 156
(7) [Upon signing a contract with an approved qualified business, 157
the] The commissioner shall issue a rebate allocation notice stating the 158
maximum amount of each rebate available to [such] an approved 159
qualified business for the rebate period and the specific terms that such 160
business shall meet to qualify for each rebate. Such notice shall certify 161
to the approved qualified business that the rebates may be claimed by 162
such business if it meets the specific terms set forth in the notice. Such 163
terms shall include the required wage, as determined by the 164
commissioner, such business shall pay new discretionary FTEs to 165
qualify for the tax rebates provided in subsection (f) of this section. 166
(d) For the purposes of this section, the FTE of a full-time job or 167
part-time job is based on the hours worked or expected to be worked 168
by an employee in a calendar year. A job in which an employee 169
worked or is expected to work one thousand seven hundred fifty 170 Bill No. 1027
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hours or more in a calendar year equals one FTE. A job in which an 171
employee worked or is expected to work less than one thousand seven 172
hundred fifty hours equals a fraction of one FTE, where the fraction is 173
the number of hours worked in a calendar year divided by one 174
thousand seven hundred fifty. The commissioner shall have the 175
discretion to adjust the calculation of FTE. 176
(e) (1) In each calendar year of the rebate period, a qualified 177
business approved by the commissioner pursuant to subdivision (3) of 178
subsection (c) of this section that employs at least twenty-five new 179
FTEs in this state by December thirty-first of the calendar year that is 180
two calendar years prior to the calendar year in which the rebate is 181
being claimed shall be allowed a rebate equal to the greater of the 182
following amounts: 183
(A) The sum of: 184
(i) The lesser of (I) the new FTEs created in an opportunity zone or 185
distressed municipality on December thirty-first of the calendar year 186
that is two calendar years prior to the calendar year in which the 187
rebate is being claimed, or (II) the new FTEs maintained in an 188
opportunity zone or distressed municipality in the previous calendar 189
year, multiplied by fifty per cent of the income tax that would be paid 190
on the average wage of the new FTEs, as determined by the applicable 191
marginal rate set forth in chapter 229 for an unmarried individual 192
based solely on such wages; and 193
(ii) The lesser of (I) the new FTEs created on December thirty-first of 194
the calendar year that is two calendar years prior to the calendar year 195
in which the rebate is being claimed, or (II) the new FTEs maintained 196
in a location other than an opportunity zone or distressed municipality 197
in the previous calendar year, multiplied by twenty-five per cent of the 198
income tax that would be paid on the average wage of the new FTEs, 199
as determined by the applicable marginal rate set forth in chapter 229 200
for an unmarried individual based solely on such wages; or 201 Bill No. 1027
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(B) The greater of: 202
(i) One thousand dollars multiplied by the lesser of (I) the new FTEs 203
created by December thirty-first of the calendar year that is two 204
calendar years prior to the calendar year in which the rebate is being 205
claimed, or (II) the new FTEs maintained in the calendar year 206
immediately prior to the calendar year in which the rebate is being 207
claimed; or 208
(ii) For tax credits earned, claimed or payable prior to January 1, 209
2024, two thousand dollars multiplied by the lesser of (I) the new FTEs 210
created by December 31, 2022, or (II) the new FTEs maintained in the 211
calendar year immediately prior to the calendar year in which the 212
rebate is being claimed. 213
(2) In no event shall the rebate under this subsection exceed in any 214
calendar year of the rebate period five thousand dollars multiplied by 215
the lesser of (A) the new FTEs created by December thirty-first of the 216
calendar year that is two calendar years prior to the calendar year in 217
which the rebate is being claimed, or (B) the new FTEs maintained in 218
the calendar year immediately prior to the calendar year in which the 219
rebate is being claimed. 220
(3) In no event shall an approved qualified business receive a rebate 221
under this subsection in any calendar year of the rebate period if such 222
business has not maintained at least twenty-five new FTEs in the 223
calendar year immediately prior to the calendar year in which the 224
rebate is being claimed. 225
(f) (1) In each calendar year of the rebate period, a qualified business 226
approved by the commissioner pursuant to subdivision (4) o f 227
subsection (c) of this section that employs at least twenty-five new 228
discretionary FTEs in this state by December thirty-first of the calendar 229
year that is two calendar years prior to the calendar year in which the 230
rebate is being claimed shall be allowed a rebate equal to the sum of 231
the amount calculated pursuant to subdivision (1) of subsection (e) of 232 Bill No. 1027
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this section and the greater of the following: 233
(A) The sum of: 234
(i) The lesser of the new discretionary FTEs (I) created in an 235
opportunity zone or distressed municipality on December thirty-first 236
of the calendar year that is two calendar years prior to the calendar 237
year in which the rebate is being claimed, or (II) maintained in an 238
opportunity zone or distressed municipality in the previous calendar 239
year, multiplied by fifty per cent of the income tax that would be paid 240
on the average wage of the new discretionary FTEs, as determined by 241
the applicable marginal rate set forth in chapter 229 for an unmarried 242
individual based solely on such wages; and 243
(ii) The lesser of the new discretionary FTEs (I) created on December 244
thirty-first of the calendar year that is two calendar years prior to the 245
calendar year in which the rebate is being claimed, or (II) maintained 246
in a location other than an opportunity zone or distressed municipality 247
in the previous calendar year, multiplied by twenty-five per cent of the 248
income tax that would be paid on the average wage of the new 249
discretionary FTEs, as determined by the applicable marginal rate set 250
forth in chapter 229 for an unmarried individual based solely on such 251
wages; or 252
(B) The greater of: 253
(i) Seven hundred fifty dollars multiplied by the lesser of the new 254
discretionary FTEs (I) created by December thirty-first of the calendar 255
year that is two calendar years prior to the calendar year in which the 256
rebate is being claimed, or (II) maintained in the calendar year 257
immediately prior to the calendar year in which the rebate is being 258
claimed; or 259
(ii) For tax credits earned, claimed or payable prior to January 1, 260
2024, one thousand five hundred dollars multiplied by the lesser of (I) 261
the new FTEs created by December 31, 2022, or (II) the new FTEs 262
maintained in the calendar year immediately prior to the calendar year 263 Bill No. 1027
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in which the rebate is being claimed. 264
(2) In no event shall the rebate under this section exceed in any 265
calendar year of the rebate period five thousand dollars multiplied by 266
the lesser of the new discretionary FTEs (A) created by December 267
thirty-first of the calendar year that is two calendar years prior to the 268
calendar year in which the rebate is being claimed, or (B) maintained 269
in the calendar year immediately prior to the calendar year in which 270
the rebate is being claimed. 271
(3) In no event shall an approved qualified business receive a rebate 272
under this subsection in any calendar year of the rebate period if such 273
business has not maintained at least twenty-five new discretionary 274
FTEs in the calendar year immediately prior to the calendar year in 275
which the rebate is being claimed. 276
(g) (1) Notwithstanding the provisions of subdivisions (3) and (4) of 277
subsection (c) of this section, the commissioner may not approve an 278
application in whole or in part if the full amount of rebates that such 279
applicant may be paid pursuant to subsection (e) or (f) of this section 280
would result in the aggregate amount of rebates issued to all approved 281
qualified businesses under this section exceeding forty million dollars 282
in any fiscal year. 283
(2) Notwithstanding the provisions of subdivision (4) of subsection 284
(c) of this section, the commissioner may not approve an application in 285
whole or in part if the full amount of rebates that such applicant may 286
be paid pursuant to subsection (f) of this section would result in the 287
aggregate amount of rebates issued pursuant to subsection (f) of this 288
section exceeding ten million dollars in any fiscal year. 289
(h) (1) A rebate under this section may be granted to an approved 290
qualified business for not more than seven successive calendar years. 291
A rebate shall not be granted until at least twenty-four months after 292
the commissioner's approval of a qualified [business'] business's 293
application. 294 Bill No. 1027
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(2) An approved qualified business that has fewer than twenty-five 295
new FTEs created in each of two consecutive calendar years or, if such 296
business is approved by the commissioner pursuant to subdivision (4) 297
of subsection (c) of this section, fewer than twenty-five new 298
discretionary FTEs in each of two consecutive calendar years shall 299
forfeit all remaining rebate allocations, unless the commissioner 300
recognizes mitigating circumstances of a regional or national nature, 301
including, but not limited to, a recession. 302
(i) Not later than January thirty-first of each year during the rebate 303
period, each approved qualified business shall provide information to 304
the commissioner regarding the number of new FTEs or new 305
discretionary FTEs created or maintained during the prior calendar 306
year and the qualified wages of such new employees. Any information 307
provided under this subsection shall be subject to audit by the 308
Department of Economic and Community Development. 309
(j) Not later than March fifteenth of each year during the rebate 310
period, the Department of Economic and Community Development 311
shall issue the approved qualified business a rebate voucher that sets 312
forth the amount of the rebate, as calculated pursuant to subsections 313
(e) and (f) of this section, and the taxable year against which such 314
rebate may be claimed. The approved qualified business shall claim 315
such rebate as a credit against the taxes due under chapter 208 or 228z 316
or as an offset of the tax imposed under chapter 207. The commissioner 317
shall annually provide to the Commissioner of Revenue Services a 318
report detailing all rebate vouchers that have been issued under this 319
section. 320
(k) Beginning on January 1, 2023, and annually thereafter, the 321
commissioner, in consultation with the office of the State Comptroller 322
and the Auditors of Public Accounts, shall submit a report to the Office 323
of Policy and Management on the expenses of the JobsCT tax rebate 324
program and the number of FTEs and discretionary FTEs created and 325
maintained. 326 Bill No. 1027
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Sec. 2. Section 32-4p of the general statutes is repealed and the 327
following is substituted in lieu thereof (Effective from passage): 328
(a) As used in this section: 329
(1) "Aerospace manufacturing project" means a project involving the 330
production of helicopters in this state that, if certified by the 331
commissioner as provided in subsection (b) of this section, will require 332
(A) primary helicopter production for current United States 333
government programs specified in the assistance agreement, as of the 334
date of the assistance agreement, to be carried out at one or more 335
facilities in this state, (B) the undertaking and maintaining of primary 336
production for helicopters to be produced during the term of the 337
assistance agreement under one or more future United States 338
government programs specified in the assistance agreement under 339
production contracts entered into by the eligible taxpayer after April 340
28, 2022, to be carried out at one or more facilities in this state, and (C) 341
minimum requirements for total employment in this state, average 342
employee wages in this state, supplier spend and capital expenditures 343
by an eligible taxpayer in furtherance of such project continuing 344
through at least June 30, 2042; 345
(2) "Annual recapture amount" means the total project tax benefits 346
utilized by an eligible taxpayer divided by ten; 347
(3) "Assistance agreement" means a contract entered into between 348
the commissioner and an eligible taxpayer in accordance with 349
subsection (c) of this section, including any amendments to or 350
extensions of such contract; 351
(4) "Average wage requirement" means, for compliance years 352
commencing on or after July 1, 2022, and prior to July 1, 2032, an 353
average annual wage for full-time employees in this state that is not 354
less than the amounts specified in the assistance agreement; 355
(5) "Benefit period" means the period commencing on the effective 356
date of the assistance agreement and ending on June 30, 2032; 357 Bill No. 1027
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(6) "Capital expenditure" means bona fide costs to the wholly-358
owned subsidiary and its subsidiaries for: (A) Acquisition of lands, 359
buildings, machinery, equipment or any combination thereof; (B) site 360
and infrastructure improvements; (C) planning costs; (D) research and 361
development expenses, as defined in section 12-217n of the general 362
statutes, revision of 1958, revised to January 1, 2021, and including, but 363
not limited to, development of new products and markets; and (E) 364
development of diversification strategies, including plans for regional 365
diversification strategies and consultants required for the completion 366
of such strategies and plans; 367
(7) "Capital expenditure requirement" means, for compliance years 368
commencing on or after July 1, 2022, and prior to July 1, 2032, a total 369
annual amount of capital expenditures made in this state by the 370
wholly-owned subsidiary that is not less than: 371
(A) Seventy million two hundred thousand dollars for the 372
compliance year ending June 30, 2023; 373
(B) Seventy-one million one hundred thousand dollars for the 374
compliance year ending June 30, 2024; 375
(C) Seventy-two million nine hundred thousand dollars for the 376
compliance year ending June 30, 2025; 377
(D) Seventy-three million eight hundred thousand dollars for the 378
compliance year ending June 30, 2026; 379
(E) Seventy-five million six hundred thousand dollars for the 380
compliance year ending June 30, 2027; 381
(F) Seventy-seven million four hundred thousand dollars for the 382
compliance year ending June 30, 2028; 383
(G) Seventy-eight million three hundred thousand dollars for the 384
compliance year ending June 30, 2029; 385 Bill No. 1027
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(H) Eighty million one hundred thousand dollars for the compliance 386
year ending June 30, 2030; 387
(I) Eighty-one million nine hundred thousand dollars for the 388
compliance year ending June 30, 2031; and 389
(J) Eighty-three million seven hundred thousand dollars for the 390
compliance year ending June 30, 2032; 391
(8) "Commissioner" means the Commissioner of Economic and 392
Community Development; 393
(9) "Company" means an entity with a place of business or a wholly-394
owned subsidiary located in this state and the direct and indirect 395
subsidiaries and affiliates of such entity; 396
(10) "Compliance year" means each twelve -month period 397
commencing July first and continuing through June thirtieth of the 398
following year, provided the initial compliance year shall commence 399
on July 1, 2022, and end on June 30, 2023, and the last compliance year 400
shall commence on July 1, 2031, and end on June 30, 2032. "Annual" 401
refers to a compliance year; 402
(11) "Contract year" means each twelve-month period commencing 403
July first and continuing through June thirtieth of the following year, 404
provided the initial contract year shall commence on July 1, 2022, and 405
end on June 30, 2023, and the last contract year shall commence on July 406
1, 2041, and end on June 30, 2042; 407
(12) "Corporation business tax" means the tax due under chapter 408
208; 409
(13) "Eligible taxpayer" means a company that, at the time 410
application is made under subsection (b) of this section, (A) is engaged 411
in the aerospace industry, (B) employs not less than seven thousand 412
individuals in this state, (C) operates the company's primary helicopter 413
production facility for its current United States government programs 414 Bill No. 1027
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in this state, (D) plans to bid on a production contract or contracts for a 415
helicopter under one or more United States government programs, and 416
(E) has a wholly-owned subsidiary with production facilities and its 417
headquarters, as set forth in the assistance agreement, in this state 418
prior to April 28, 2022; 419
(14) (A) "Employee requirement" means, for compliance years 420
commencing on or after July 1, 2022, and prior to July 1, 2032: 421
(i) A minimum level of full-time employees in this state that is not 422
less than an average of seven thousand three hundred seventy-five for 423
each compliance year if the eligible taxpayer has entered into a 424
production contract for one United States government program 425
specified in the assistance agreement; and 426
(ii) A minimum level of full-time employees in this state that is not 427
less than an average of seven thousand five hundred for each 428
compliance year if the eligible taxpayer has entered into production 429
contracts for two United States government programs specified in the 430
assistance agreement. 431
(B) The average number of full-time employees for each compliance 432
year shall be determined by adding the number of full-time employees 433
at the end of each quarter of the respective compliance year and 434
dividing the sum of such quarters by four; 435
(15) "Full-time employee" means an employee in this state of the 436
company who works a minimum of thirty-five hours per week. "Full-437
time employee" does not include an employee working on a temporary 438
or seasonal basis or any individual who does not receive a federal 439
Form W-2 from the company; 440
(16) "Minimum requirements" means the minimum conditions the 441
eligible taxpayer must satisfy during each compliance year to qualify 442
for the sales and use tax offset for such compliance year and the 443
refundable tax credit for such compliance year, including, but not 444
limited to, (A) achieving the employee requirement, average wage 445 Bill No. 1027
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requirement, supplier spend requirement and capital expenditure 446
requirement, (B) the maintenance of the wholly-owned subsidiary's 447
headquarters, as set forth in the assistance agreement, in this state, (C) 448
the maintenance and operation of the company's primary helicopter 449
production facility for its current United States government programs, 450
as of the date of the assistance agreement, in this state, (D) the 451
undertaking and maintaining in this state of the company's primary 452
production for helicopters to be produced during the term of the 453
assistance agreement under one or more future United States 454
government programs specified in the assistance agreement under 455
production contracts entered into by the eligible taxpayer after April 456
28, 2022, and (E) the maintenance of diversity and workforce training 457
programs by the company in accordance with the terms of the 458
assistance agreement; 459
(17) "Production" means the various operations related to the 460
completion of a helicopter, including, but not limited to, procurement, 461
engineering, manufacture, assembly, integration and testing; 462
(18) "Production contract" means a contract with the United States 463
government for the production of helicopters; 464
(19) "Project tax benefit" means the total benefit accruing to an 465
eligible taxpayer with respect to the sales and use tax offset and the 466
refundable tax credit; 467
(20) "Refundable tax credit" means the credit described in subsection 468
(e) of this section; 469
(21) "Regular place of business" means any bona fide office, factory, 470
warehouse or other space in this state at which a supply company is 471
doing business in its own name in a regular and systematic manner 472
and which place is continuously maintained, occupied and used by the 473
supply company in carrying on its business through its employees 474
regularly in attendance to carry on the supply company's business in 475
the supply company's own name. "Regular place of business" does not 476 Bill No. 1027
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include a place of business for a statutory agent for service of process, 477
a temporary office or location used by the supply company only for 478
the duration of the contract or an office maintained, occupied and used 479
by a person affiliated with the supply company; 480
(22) "Sales and use tax" means the taxes due under chapter 219; 481
(23) "Sales and use tax offset" means the offset described under 482
subsection (d) of this section; 483
(24) "Supply company" means any commercial business with a 484
regular place of business in this state that supplies goods and services 485
necessary to support (A) the manufacturing of company products, or 486
(B) company operations. "Supply company" does not include any local, 487
state or federal revenue collection or taxing entity; 488
(25) (A) "Supplier spend requirement" means, for compliance years 489
commencing on or after July 1, 2022, and prior to July 1, 2032, the total 490
annual spend by the wholly-owned subsidiary and by the company, 491
on behalf of the wholly-owned subsidiary, with supply companies in 492
this state of not less than: 493
(i) Three hundred million dollars for compliance years commencing 494
on or after July 1, 2022, and prior to July 1, 2024; 495
(ii) Four hundred ten million dollars for compliance years 496
commencing on or after July 1, 2024, and prior to July 1, 2029; and 497
(iii) Four hundred seventy million dollars for compliance years 498
commencing on or after July 1, 2029, and prior to July 1, 2032. 499
(B) If an expenditure qualifies for both the supplier spend 500
requirement and the capital expenditures requirement, the eligible 501
taxpayer may choose between such categories for which such 502
expenditure may be counted. In no event shall any such expenditure 503
be counted towards more than one such category; and 504 Bill No. 1027
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(26) "Wholly-owned subsidiary" means a subsidiary of the 505
company, or such subsidiary's successor to its operations, that has its 506
headquarters, as set forth in the assistance agreement, in this state. 507
"Wholly-owned subsidiary" includes any direct or indirect subsidiary 508
of the company's wholly-owned subsidiary and any limited liability 509
company wholly owned directly or indirectly by the company's 510
wholly-owned subsidiary. 511
(b) (1) Any eligible taxpayer that intends to undertake an aerospace 512
manufacturing project may apply to the commissioner for certification 513
of such project as a certified aerospace manufacturing project. In order 514
to receive such certification, an eligible taxpayer shall apply to the 515
commissioner, in a form acceptable to the commissioner and including 516
such information as prescribed by the commissioner, including, but 517
not limited to, (A) a detailed plan outlining the aerospace 518
manufacturing project, (B) the term of such project, and (C) the 519
estimated expenditures for such project. The commissioner may 520
require such eligible taxpayer to submit such additional information as 521
may be necessary to evaluate the application. 522
(2) All decisions of the commissioner with respect to any application 523
received under subdivision (1) of this subsection shall be made in the 524
commissioner's discretion. The provisions of this subsection shall not 525
be construed to authorize suit against this state by any taxpayer that is 526
denied certification by the commissioner and shall not be construed as 527
a waiver of sovereign immunity. 528
(c) (1) Upon certification by the commissioner of an application as 529
provided in subsection (b) of this section, the commissioner may enter 530
into an assistance agreement with an eligible taxpayer pursuant to 531
which the commissioner may, in consideration of the eligible 532
taxpayer's agreement to meet the minimum requirements in a 533
compliance year in connection with the certified aerospace 534
manufacturing project and as further inducement for the eligible 535
taxpayer to enter into an aerospace manufacturing project, agree to 536
permit the eligible taxpayer to offset its sales and use tax liability and 537 Bill No. 1027
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to claim a credit against its corporation business tax liability up to a 538
specified amount for the corresponding compliance year. 539
(2) Such assistance agreement shall have a term of not less than 540
twenty years and shall list: 541
(A) The specifications of the certified aerospace manufacturing 542
project; 543
(B) The length of time the certified aerospace manufacturing project 544
will take to complete; 545
(C) The minimum requirements the eligible taxpayer agrees to meet 546
during each compliance year; 547
(D) The commitment by the eligible taxpayer to (i) maintain the 548
headquarters, as set forth in the assistance agreement, of the wholly-549
owned subsidiary or its successor in this state, (ii) operate its primary 550
helicopter production facility for its current United States government 551
programs, as of the date of the assistance agreement, in this state, and 552
(iii) to undertake and maintain its primary production of helicopters to 553
be produced during the term of the assistance agreement under one or 554
more future United States government programs specified in the 555
assistance agreement in this state under production contracts entered 556
into by the eligible taxpayer after April 28, 2022; 557
(E) The amount of sales and use tax that the eligible taxpayer is 558
eligible to offset for each compliance year set forth in the assistance 559
agreement, provided the eligible taxpayer meets the minimum 560
requirements for each such compliance year; 561
(F) The terms and conditions of the repayment of any sales and use 562
tax offsets and other required financial penalties resulting from the 563
eligible taxpayer's failure to comply with the terms of the assistance 564
agreement; 565
(G) The amount of corporation business tax, subject to the limits set 566 Bill No. 1027
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forth in subsection (e) of this section, against which the eligible 567
taxpayer is eligible to claim a credit for each compliance year set forth 568
in the assistance agreement, provided the eligible taxpayer meets the 569
minimum requirements for each such compliance year; 570
(H) The manner and method for the eligible taxpayer to provide 571
notice of any disputed claim under the assistance agreement; and 572
(I) Any other terms and conditions the commissioner may require. 573
(3) The commissioner may amend the assistance agreement [shall] 574
to provide that the project tax benefit be earned [and utilized] during 575
the first eight years of the term of any production contract and utilized 576
within the first nine years of the term of any production contract, 577
provided no project tax benefit may be earned [or utilized] beyond the 578
benefit period or utilized beyond one year after the end of the benefit 579
period. 580
(4) Any eligible taxpayer that enters into an assistance agreement 581
with the commissioner under this subsection may, in the event of any 582
disputed claim under such assistance agreement, bring an action 583
against this state to the superior court for the judicial district of 584
Hartford for the purpose of having such claim determined, provided 585
notice of such disputed claim is first given to the commissioner in the 586
manner and method described in such assistance agreement. No such 587
action shall be allowed unless it is brought not later than two years 588
after the date on which the eligible taxpayer gave proper notice to the 589
commissioner in accordance with such assistance agreement. All legal 590
defenses under such assistance agreement, except sovereign immunity, 591
are reserved to this state. 592
(5) If the provisions of subsection (c) or (e) of section 32-223 or 593
section 32-462 are in conflict with the assistance agreement, the 594
provisions of such assistance agreement shall supersede. 595
(6) Upon the execution of the assistance agreement, the 596
commissioner shall issue an allocation notice stating the maximum 597 Bill No. 1027
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combined amount of the sales and use tax offset and the refundable tax 598
credit available to the eligible taxpayer for the benefit period and the 599
specific requirements the eligible taxpayer shall meet to qualify for 600
such offset and credit. Such notice shall certify to the eligible taxpayer 601
that the offsets and credits may be claimed by the eligible taxpayer if 602
the eligible taxpayer meets the specific requirements set forth in the 603
notice. 604
(d) (1) The assistance agreement shall provide for the offset of sales 605
and use tax amounts otherwise payable by the eligible taxpayer under 606
the provisions of chapter 219. Such offset shall be made in the form, 607
timing and manner determined by the commissioner in consultation 608
with the Commissioner of Revenue Services. The sales and use tax 609
offset amounts shall be calculated after the application of all other sales 610
and use tax exemptions set forth in chapter 219 in effect on April 28, 611
2022 and any subsequent amendments to said chapter that the eligible 612
taxpayer is eligible to claim. Nothing in this subsection shall affect the 613
eligible taxpayer's ability to claim the sales and use tax exemptions that 614
it otherwise qualifies for under any provision of the general statutes. 615
(2) Subsequent to a production contract taking effect for helicopters 616
to be produced during the term of the assistance agreement, not later 617
than sixty days after the end of each compliance year or, if the eligible 618
taxpayer requests and the commissioner approves an extended date, 619
not later than such extended date, the eligible taxpayer shall certify, 620
subject to a third-party audit performed in accordance with the 621
Department of Economic and Community Development audit guide or 622
such protocols as may be set forth in the assistance agreement, the 623
actual employment, wages, supplier spend and capital expenditure 624
amounts to the commissioner in accordance with the requirements of 625
the assistance agreement. If the results of such audit reveal that the 626
eligible taxpayer has claimed a sales and use tax offset in excess of the 627
amount allowable, the eligible taxpayer shall be subject to the 628
repayment provisions as set forth in the assistance agreement. At the 629
end of each compliance year, upon receipt of the eligible taxpayer's 630 Bill No. 1027
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certification, the commissioner shall notify the Commissioner of 631
Revenue Services whether the eligible taxpayer has met all minimum 632
requirements necessary to qualify for the sales and use tax offset or is 633
required to repay the amount of such offset in accordance with the 634
terms of the assistance agreement. 635
(e) (1) If the results of the audit performed pursuant to subdivision 636
(2) of subsection (d) of this section reveal that the eligible taxpayer was 637
unable to utilize all of the sales and use tax offset to which it was 638
entitled under the assistance agreement for a compliance year against 639
its sales and use tax liability, the assistance agreement shall permit the 640
eligible taxpayer to claim the excess amount as a refundable tax credit, 641
not to exceed five million dollars for each compliance year, against the 642
corporation business tax. If the amount of the excess is greater than 643
five million dollars for any compliance year, the excess over five 644
million dollars shall be carried forward to future compliance years to 645
offset the eligible taxpayer's sales and use tax liability and then as 646
refundable tax credits of up to five million dollars for each compliance 647
year against the eligible taxpayer's corporation business tax liability, 648
until the excess is fully utilized, except that no carry-forward shall 649
extend beyond one year after the end of the benefit period. Such carry-650
forward shall be utilized prior to any sales and use tax offset earned in 651
any subsequent compliance year. 652
(2) If the amount of the refundable tax credit exceeds the eligible 653
taxpayer's corporation business tax liability for the applicable income 654
year, the Commissioner of Revenue Services shall treat such excess as 655
an overpayment and shall refund the amount of such excess, without 656
interest, to the eligible taxpayer. In no event shall the refundable tax 657
credits allowed under this subsection exceed forty-five million dollars 658
in the aggregate over the term of the assistance agreement. The eligible 659
taxpayer shall claim the refundable tax credit allowed under this 660
subsection on its corporate tax return for the income year that ends 661
during the compliance year and such credit shall not be subject to the 662
limits set forth in section 12-217zz. Notwithstanding the provisions of 663 Bill No. 1027
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section 12-217aa, such credit shall be claimed after all other tax credits 664
have been claimed. 665
(3) Not later than thirty days after the commissioner receives an 666
audit performed pursuant to subdivision (2) of subsection (d) of this 667
section or as provided for in the assistance agreement, during each 668
year of the benefit period, the Department of Economic and 669
Community Development shall issue the eligible taxpayer a credit 670
voucher that sets forth the amount of the refundable tax credit 671
permitted pursuant to this subsection and the income year for which 672
such credit may be claimed. The commissioner shall annually provide 673
to the Commissioner of Revenue Services a report detailing all credit 674
vouchers that have been issued under this subsection. 675
(f) (1) The eligible taxpayer shall pay the total amount of project tax 676
benefit that was utilized by the eligible taxpayer for a particular 677
compliance year and any penalty set forth in the assistance agreement 678
if the commissioner determines that the eligible taxpayer failed to 679
satisfy any of the minimum requirements for such compliance year. 680
(2) The project tax benefit utilized by the eligible taxpayer under 681
subsections (d) and (e) of this section shall be subject to recapture 682
during the contract years commencing on or after July 1, 2032, and 683
ending on June 30, 2042, if the eligible taxpayer fails to satisfy during 684
such time period certain annual thresholds relating to employee head 685
count, average wages, supplier spend and capital expenditures, as 686
detailed in the assistance agreement, and such other requirements 687
including (A) the maintenance of the wholly-owned subsidiary's 688
headquarters, as set forth in the assistance agreement, in this state, (B) 689
the maintenance and operation of the company's primary helicopter 690
production facility for its current United States government programs, 691
as of the date of the assistance agreement, in this state, (C) the 692
undertaking and maintaining in this state of the company's primary 693
production for helicopters to be produced during the term of the 694
assistance agreement under one or more of its future United States 695
government programs specified in the assistance agreement under 696 Bill No. 1027
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production contracts entered into by the eligible taxpayer after April 697
28, 2022, and (D) the maintenance of diversity and workforce training 698
programs by the company in accordance with the terms of the 699
assistance agreement. 700
(3) If the eligible taxpayer enters into a production contract with the 701
United States government for one helicopter program specified in the 702
assistance agreement, the targeted job requirement shall be seven 703
thousand two hundred fifty, and the minimum job requirement shall 704
be six thousand for each of the years subject to the recapture under 705
subdivision (2) of this subsection. If the eligible taxpayer enters into 706
production contracts with the United States government for two 707
helicopter programs specified in the assistance agreement, the targeted 708
job requirement shall be seven thousand seven hundred fifty, and the 709
minimum job requirement shall be seven thousand for each of the 710
years subject to the recapture under subdivision (2) of this subsection. 711
The annual recapture amount shall be (A) repaid if the number of 712
actual jobs in any year subject to the recapture is less than the 713
minimum job requirement, and (B) prorated at ninety per cent value of 714
the annual recapture amount if the number of actual jobs is equal to or 715
greater than the minimum job requirement but less than the targeted 716
job requirement. In addition to the recapture job obligation, the 717
commissioner may require other criteria, including, but not limited to, 718
wage requirements, with respect to the recapture of the remaining ten 719
per cent of the annual recapture amount. In no event shall the amount 720
of the recapture exceed the annual recapture amount. 721
(g) The aggregate amount of the project tax benefit granted by the 722
commissioner under this section shall not exceed (1) six million two 723
hundred fifty thousand dollars for each compliance year or fifty 724
million dollars during the term of the assistance agreement if the 725
eligible taxpayer has entered into a production contract after April 28, 726
2022, with the United States government for one helicopter program 727
specified in the assistance agreement, and (2) nine million three 728
hundred seventy-five thousand dollars for each compliance year or 729 Bill No. 1027
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seventy-five million dollars during the term of the assistance 730
agreement if the eligible taxpayer has entered into production 731
contracts after April 28, 2022, with the United States government for 732
two helicopter programs specified in the assistance agreement. 733
(h) The commissioner shall not enter into any assistance agreement 734
under subsection (c) of this section after January 31, 2023. 735
(i) The commissioner may make revisions to the terms of the 736
assistance agreement to address a scenario where a delay, not caused 737
by the eligible taxpayer, prevents the eligible taxpayer from entering 738
into one or more production contracts by June 30, 2024. Such revisions 739
may include changes to the timing of (1) the benefit period, (2) the 740
compliance years, (3) the contract years, (4) the minimum 741
requirements, and (5) the recapture period, and other conforming 742
changes, provided in all cases, the project tax benefit shall be earned 743
[and utilized] during the first eight years of the term of any such 744
production contract and utilized not later than one year after the end 745
of the benefit period. 746
(j) The commissioner may from time to time amend, supplement or 747
modify the terms of the assistance agreement consistent with the 748
provisions of this section. 749
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
CE Joint Favorable C/R FIN
FIN Joint Favorable