Senate Bill No. 1027
Public Act No. 23-96
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 Section 32-7t of the general statutes is repealed and the
following is substituted in lieu thereof (Effective from passage):
(a) As used in this section:
(1) "Commissioner" means the Commissioner of Economic and
Community Development;
(2) "Discretionary FTE" means an FTE that is paid qualified wages
and does not meet the threshold wage requirements to be a qualified
FTE but is approved by the commissioner pursuant to subdivision (4) of
subsection (c) of this section;
(3) "Distressed municipality" has the same meaning as provided in
section 32-9p;
(4) "Full-time equivalent" or "FTE" means the number of employees
employed at a qualified business, calculated in accordance with
subsection (d) of this section; Senate Bill No. 1027
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(5) "Full-time job" means a job in which an employee is required to
work at least thirty-five or more hours per week. "Full-time job" does
not include a temporary or seasonal job;
(6) "Median household income" means the median annual household
income for residents in a municipality as calculated from the U.S.
Census Bureau's five-year American Community Survey or another
data source, at the sole discretion of the commissioner;
(7) "New employee" means a person or persons hired by the qualified
business to fill a full-time equivalent position. A new employee does not
include a person who was employed in this state by a related person
with respect to the qualified business within twelve months prior to a
qualified [business'] business's application to the commissioner for a
rebate allocation notice for a job creation rebate pursuant to subsection
(c) of this section;
(8) "New FTEs" means the number of FTEs that (A) did not exist in
this state at the time of a qualified [business'] business's application to
the commissioner for a rebate allocation notice for a job creation rebate
pursuant to subsection (c) of this section, (B) are not the result of FTEs
acquired due to a merger or acquisition, (C) are filled by a new
employee, (D) are qualified FTEs, and (E) are not FTEs hired to replace
FTEs that existed in the state after January 1, 2020. The commissioner
may issue guidance on the implementation of this definition;
(9) "New FTEs created" means the number of new FTEs that the
qualified business is employing at a point-in-time at the end of the
relevant time period;
(10) "New FTEs maintained" means the total number of new FTEs
employed throughout a relevant time period;
(11) "Opportunity zone" means a population census tract that is a
low-income community that is designated as a "qualified opportunity Senate Bill No. 1027
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zone" pursuant to the Tax Cuts and Jobs Act of 2017, P.L. 115-97, as
amended from time to time;
(12) "Part-time job" means a job in which an employee is required to
work less than thirty-five hours per week. "Part-time job" does not
include a temporary or seasonal job;
(13) "Qualified business" means a person that is (A) engaged in
business in an industry related to finance, insurance, manufacturing,
clean energy, bioscience, technology, digital media or any similar
industry, as determined by the sole discretion of the commissioner, and
(B) subject to taxation under chapter 207, 208 or 228z;
(14) "Qualified FTE" means an FTE who is paid qualified wages of at
least eighty-five per cent of the median household income for the
location where the FTE position is primarily located, scaled in
proportion to the FTE fraction, or thirty-seven thousand five hundred
dollars, scaled in proportion to the FTE fraction, whichever is greater;
(15) "Qualified wages" means wages sourced to this state pursuant to
section 12-705;
(16) "Rebate period" means the calendar years in which a tax rebate
provided for in this section is to be paid pursuant to a [contract
executed] rebate allocation notice issued pursuant to subsection (c) of
this section; and
(17) "Related person" means (A) a corporation, limited liability
company, partnership, association or trust controlled by the qualified
business, (B) an individual, corporation, limited liability company,
partnership, association or trust that is in control of the qualified
business, (C) a corporation, limited liability company, partnership,
association or trust controlled by an individual, corporation, limited
liability company, partnership, association or trust that is in control of
the qualified business, or (D) a member of the same controlled group as Senate Bill No. 1027
Public Act No. 23-96 4 of 26
the qualified business. For the purposes of this subdivision, "control"
means (i) ownership, directly or indirectly, of stock possessing fifty per
cent or more of the total combined voting power of all classes of the
stock of a corporation entitled to vote, (ii) ownership, directly or
indirectly, of fifty per cent or more of the capital or profits interest in a
partnership, limited liability company or association, or (iii) ownership,
directly or indirectly, of fifty per cent or more of the beneficial interest
in the principal or income of a trust. The ownership of stock in a
corporation, of a capital or profits interest in a partnership, of a limited
liability company or association or of a beneficial interest in a trust shall
be determined in accordance with the rules for constructive ownership
of stock provided in Section 267(c) of the Internal Revenue Code of 1986,
or any subsequent corresponding internal revenue code of the United
States, as amended from time to time, other than paragraph (3) of said
section.
(b) There is established a JobsCT tax rebate program under which
qualified businesses that create jobs in this state, in accordance with the
provisions of this section, may be allowed a tax rebate, which shall be
treated as a credit against the tax imposed under chapter 208 or 228z or
as an offset of the tax imposed under chapter 207.
(c) (1) To be eligible to claim a rebate under this section, a qualified
business shall apply to the commissioner in accordance with the
provisions of this subsection. The application shall be on a form
prescribed by the commissioner and may require information,
including, but not limited to, the number of new FTEs to be created by
the qualified business, the number of current FTEs employed by the
qualified business, feasibility studies or business plans for the increased
number of FTEs, projected state and local revenue that may reasonably
derive as a result of the increased number of FTEs and any other
information necessary to determine whether there will be net benefits to
the economy of the municipality or municipalities in which the qualified Senate Bill No. 1027
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business is primarily located and the state.
(2) Upon receipt of an application, the commissioner shall determine
(A) whether the qualified business making the application will be
reasonably able to meet the FTE hiring targets and other metrics as
presented in such application, (B) whether such qualified [business']
business's proposed job growth would provide a net benefit to economic
development and employment opportunities in the state, and (C)
whether such qualified [business'] business's proposed job growth will
exceed the number of jobs at the business that existed prior to January
1, 2020. The commissioner may require the applicant to submit
additional information to evaluate an application. Each qualified
business making an application shall satisfy the requirements of this
subdivision, as determined by the commissioner, to be eligible for the
JobsCT tax rebate program.
(3) The commissioner, upon consideration of an application and any
additional information, may approve an application in whole or in part
or may approve an application with amendments. If the commissioner
disapproves an application, the commissioner shall identify the defects
in such application and explain the specific reasons for the disapproval.
The commissioner shall render a decision on an application not later
than ninety days after the date of its receipt by the commissioner.
(4) The commissioner may approve an application in whole or in part
by a qualified business that creates new discretionary FTEs or may
approve such an application with amendments if a majority of such new
discretionary FTEs are individuals who (A) because of a disability, are
receiving or have received services from the Department of Aging and
Disability Services; (B) are receiving employment services from the
Department of Mental Health and Addiction Services or participating in
employment opportunities and day services, as defined in section 17a-
226, operated or funded by the Department of Developmental Services;
(C) have been unemployed for at least six of the preceding twelve Senate Bill No. 1027
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months; (D) have been convicted of a misdemeanor or felony; (E) are
veterans, as defined in section 27-103; (F) have not earned any
postsecondary credential and are not currently enrolled in an
postsecondary institution or program; or (G) are currently enrolled in a
workforce training program fully or substantially paid for by the
employer that results in such individual earning a postsecondary
credential.
(5) The commissioner may combine approval of an application with
the exercise of any of the commissioner's other powers, including, but
not limited to, the provision of other financial assistance.
(6) [The commissioner shall enter into a contract with an approved
qualified business, which shall include, but need not be limited to, a
requirement that the qualified business consent] By submitting an
application, a qualified business consents to the Department of
Economic and Community Development's access of data compiled by
other state agencies, including, but not limited to, the Labor
Department, for the purposes of audit and enforcement. [and, if a
qualified business is approved by the commissioner in accordance with
subdivision (4) of this subsection, the required wage such business shall
pay new discretionary FTEs to qualify for the tax rebates provided for
in subsection (f) of this section.]
(7) [Upon signing a contract with an approved qualified business,
the] The commissioner shall issue a rebate allocation notice stating the
maximum amount of each rebate available to [such] an approved
qualified business for the rebate period and the specific terms that such
business shall meet to qualify for each rebate. Such notice shall certify
to the approved qualified business that the rebates may be claimed by
such business if it meets the specific terms set forth in the notice. Such
terms shall include the required wage, as determined by the
commissioner, such business shall pay new discretionary FTEs to
qualify for the tax rebates provided in subsection (f) of this section. Senate Bill No. 1027
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(d) For the purposes of this section, the FTE of a full-time job or part-
time job is based on the hours worked or expected to be worked by an
employee in a calendar year. A job in which an employee worked or is
expected to work one thousand seven hundred fifty hours or more in a
calendar year equals one FTE. A job in which an employee worked or is
expected to work less than one thousand seven hundred fifty hours
equals a fraction of one FTE, where the fraction is the number of hours
worked in a calendar year divided by one thousand seven hundred fifty.
The commissioner shall have the discretion to adjust the calculation of
FTE.
(e) (1) In each calendar year of the rebate period, a qualified business
approved by the commissioner pursuant to subdivision (3) of subsection
(c) of this section that employs at least twenty-five new FTEs in this state
by December thirty-first of the calendar year that is two calendar years
prior to the calendar year in which the rebate is being claimed shall be
allowed a rebate equal to the greater of the following amounts:
(A) The sum of:
(i) The lesser of (I) the new FTEs created in an opportunity zone or
distressed municipality on December thirty-first of the calendar year
that is two calendar years prior to the calendar year in which the rebate
is being claimed, or (II) the new FTEs maintained in an opportunity zone
or distressed municipality in the previous calendar year, multiplied by
fifty per cent of the income tax that would be paid on the average wage
of the new FTEs, as determined by the applicable marginal rate set forth
in chapter 229 for an unmarried individual based solely on such wages;
and
(ii) The lesser of (I) the new FTEs created on December thirty-first of
the calendar year that is two calendar years prior to the calendar year in
which the rebate is being claimed, or (II) the new FTEs maintained in a
location other than an opportunity zone or distressed municipality in Senate Bill No. 1027
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the previous calendar year, multiplied by twenty-five per cent of the
income tax that would be paid on the average wage of the new FTEs, as
determined by the applicable marginal rate set forth in chapter 229 for
an unmarried individual based solely on such wages; or
(B) The greater of:
(i) One thousand dollars multiplied by the lesser of (I) the new FTEs
created by December thirty-first of the calendar year that is two calendar
years prior to the calendar year in which the rebate is being claimed, or
(II) the new FTEs maintained in the calendar year immediately prior to
the calendar year in which the rebate is being claimed; or
(ii) For tax credits earned, claimed or payable prior to January 1, 2024,
two thousand dollars multiplied by the lesser of (I) the new FTEs created
by December 31, 2022, or (II) the new FTEs maintained in the calendar
year immediately prior to the calendar year in which the rebate is being
claimed.
(2) In no event shall the rebate under this subsection exceed in any
calendar year of the rebate period five thousand dollars multiplied by
the lesser of (A) the new FTEs created by December thirty-first of the
calendar year that is two calendar years prior to the calendar year in
which the rebate is being claimed, or (B) the new FTEs maintained in the
calendar year immediately prior to the calendar year in which the rebate
is being claimed.
(3) In no event shall an approved qualified business receive a rebate
under this subsection in any calendar year of the rebate period if such
business has not maintained at least twenty-five new FTEs in the
calendar year immediately prior to the calendar year in which the rebate
is being claimed.
(f) (1) In each calendar year of the rebate period, a qualified business
approved by the commissioner pursuant to subdivision (4) of subsection Senate Bill No. 1027
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(c) of this section that employs at least twenty-five new discretionary
FTEs in this state by December thirty-first of the calendar year that is
two calendar years prior to the calendar year in which the rebate is being
claimed shall be allowed a rebate equal to the sum of the amount
calculated pursuant to subdivision (1) of subsection (e) of this section
and the greater of the following:
(A) The sum of:
(i) The lesser of the new discretionary FTEs (I) created in an
opportunity zone or distressed municipality on December thirty-first of
the calendar year that is two calendar years prior to the calendar year in
which the rebate is being claimed, or (II) maintained in an opportunity
zone or distressed municipality in the previous calendar year,
multiplied by fifty per cent of the income tax that would be paid on the
average wage of the new discretionary FTEs, as determined by the
applicable marginal rate set forth in chapter 229 for an unmarried
individual based solely on such wages; and
(ii) The lesser of the new discretionary FTEs (I) created on December
thirty-first of the calendar year that is two calendar years prior to the
calendar year in which the rebate is being claimed, or (II) maintained in
a location other than an opportunity zone or distressed municipality in
the previous calendar year, multiplied by twenty-five per cent of the
income tax that would be paid on the average wage of the new
discretionary FTEs, as determined by the applicable marginal rate set
forth in chapter 229 for an unmarried individual based solely on such
wages; or
(B) The greater of:
(i) Seven hundred fifty dollars multiplied by the lesser of the new
discretionary FTEs (I) created by December thirty-first of the calendar
year that is two calendar years prior to the calendar year in which the Senate Bill No. 1027
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rebate is being claimed, or (II) maintained in the calendar year
immediately prior to the calendar year in which the rebate is being
claimed; or
(ii) For tax credits earned, claimed or payable prior to January 1, 2024,
one thousand five hundred dollars multiplied by the lesser of (I) the new
FTEs created by December 31, 2022, or (II) the new FTEs maintained in
the calendar year immediately prior to the calendar year in which the
rebate is being claimed.
(2) In no event shall the rebate under this section exceed in any
calendar year of the rebate period five thousand dollars multiplied by
the lesser of the new discretionary FTEs (A) created by December thirty-
first of the calendar year that is two calendar years prior to the calendar
year in which the rebate is being claimed, or (B) maintained in the
calendar year immediately prior to the calendar year in which the rebate
is being claimed.
(3) In no event shall an approved qualified business receive a rebate
under this subsection in any calendar year of the rebate period if such
business has not maintained at least twenty-five new discretionary FTEs
in the calendar year immediately prior to the calendar year in which the
rebate is being claimed.
(g) (1) Notwithstanding the provisions of subdivisions (3) and (4) of
subsection (c) of this section, the commissioner may not approve an
application in whole or in part if the full amount of rebates that such
applicant may be paid pursuant to subsection (e) or (f) of this section
would result in the aggregate amount of rebates issued to all approved
qualified businesses under this section exceeding forty million dollars
in any fiscal year.
(2) Notwithstanding the provisions of subdivision (4) of subsection
(c) of this section, the commissioner may not approve an application in Senate Bill No. 1027
Public Act No. 23-96 11 of 26
whole or in part if the full amount of rebates that such applicant may be
paid pursuant to subsection (f) of this section would result in the
aggregate amount of rebates issued pursuant to subsection (f) of this
section exceeding ten million dollars in any fiscal year.
(h) (1) A rebate under this section may be granted to an approved
qualified business for not more than seven successive calendar years. A
rebate shall not be granted until at least twenty-four months after the
commissioner's approval of a qualified [business'] business's
application.
(2) An approved qualified business that has fewer than twenty-five
new FTEs created in each of two consecutive calendar years or, if such
business is approved by the commissioner pursuant to subdivision (4)
of subsection (c) of this section, fewer than twenty-five new
discretionary FTEs in each of two consecutive calendar years shall
forfeit all remaining rebate allocations, unless the commissioner
recognizes mitigating circumstances of a regional or national nature,
including, but not limited to, a recession.
(i) Not later than January thirty-first of each year during the rebate
period, each approved qualified business shall provide information to
the commissioner regarding the number of new FTEs or new
discretionary FTEs created or maintained during the prior calendar year
and the qualified wages of such new employees. Any information
provided under this subsection shall be subject to audit by the
Department of Economic and Community Development.
(j) Not later than March fifteenth of each year during the rebate
period, the Department of Economic and Community Development
shall issue the approved qualified business a rebate voucher that sets
forth the amount of the rebate, as calculated pursuant to subsections (e)
and (f) of this section, and the taxable year against which such rebate
may be claimed. The approved qualified business shall claim such Senate Bill No. 1027
Public Act No. 23-96 12 of 26
rebate as a credit against the taxes due under chapter 208 or 228z or as
an offset of the tax imposed under chapter 207. The commissioner shall
annually provide to the Commissioner of Revenue Services a report
detailing all rebate vouchers that have been issued under this section.
(k) Beginning on January 1, 2023, and annually thereafter, the
commissioner, in consultation with the office of the State Comptroller
and the Auditors of Public Accounts, shall submit a report to the Office
of Policy and Management on the expenses of the JobsCT tax rebate
program and the number of FTEs and discretionary FTEs created and
maintained.
Sec. 2. Section 32-4p of the general statutes is repealed and the
following is substituted in lieu thereof (Effective from passage):
(a) As used in this section:
(1) "Aerospace manufacturing project" means a project involving the
production of helicopters in this state that, if certified by the
commissioner as provided in subsection (b) of this section, will require
(A) primary helicopter production for current United States government
programs specified in the assistance agreement, as of the date of the
assistance agreement, to be carried out at one or more facilities in this
state, (B) the undertaking and maintaining of primary production for
helicopters to be produced during the term of the assistance agreement
under one or more future United States government programs specified
in the assistance agreement under production contracts entered into by
the eligible taxpayer after April 28, 2022, to be carried out at one or more
facilities in this state, and (C) minimum requirements for total
employment in this state, average employee wages in this state, supplier
spend and capital expenditures by an eligible taxpayer in furtherance of
such project continuing through at least June 30, 2042;
(2) "Annual recapture amount" means the total project tax benefits Senate Bill No. 1027
Public Act No. 23-96 13 of 26
utilized by an eligible taxpayer divided by ten;
(3) "Assistance agreement" means a contract entered into between the
commissioner and an eligible taxpayer in accordance with subsection (c)
of this section, including any amendments to or extensions of such
contract;
(4) "Average wage requirement" means, for compliance years
commencing on or after July 1, 2022, and prior to July 1, 2032, an average
annual wage for full-time employees in this state that is not less than the
amounts specified in the assistance agreement;
(5) "Benefit period" means the period commencing on the effective
date of the assistance agreement and ending on June 30, 2032;
(6) "Capital expenditure" means bona fide costs to the wholly-owned
subsidiary and its subsidiaries for: (A) Acquisition of lands, buildings,
machinery, equipment or any combination thereof; (B) site and
infrastructure improvements; (C) planning costs; (D) research and
development expenses, as defined in section 12-217n of the general
statutes, revision of 1958, revised to January 1, 2021, and including, but
not limited to, development of new products and markets; and (E)
development of diversification strategies, including plans for regional
diversification strategies and consultants required for the completion of
such strategies and plans;
(7) "Capital expenditure requirement" means, for compliance years
commencing on or after July 1, 2022, and prior to July 1, 2032, a total
annual amount of capital expenditures made in this state by the wholly-
owned subsidiary that is not less than:
(A) Seventy million two hundred thousand dollars for the
compliance year ending June 30, 2023;
(B) Seventy-one million one hundred thousand dollars for the Senate Bill No. 1027
Public Act No. 23-96 14 of 26
compliance year ending June 30, 2024;
(C) Seventy-two million nine hundred thousand dollars for the
compliance year ending June 30, 2025;
(D) Seventy-three million eight hundred thousand dollars for the
compliance year ending June 30, 2026;
(E) Seventy-five million six hundred thousand dollars for the
compliance year ending June 30, 2027;
(F) Seventy-seven million four hundred thousand dollars for the
compliance year ending June 30, 2028;
(G) Seventy-eight million three hundred thousand dollars for the
compliance year ending June 30, 2029;
(H) Eighty million one hundred thousand dollars for the compliance
year ending June 30, 2030;
(I) Eighty-one million nine hundred thousand dollars for the
compliance year ending June 30, 2031; and
(J) Eighty-three million seven hundred thousand dollars for the
compliance year ending June 30, 2032;
(8) "Commissioner" means the Commissioner of Economic and
Community Development;
(9) "Company" means an entity with a place of business or a wholly-
owned subsidiary located in this state and the direct and indirect
subsidiaries and affiliates of such entity;
(10) "Compliance year" means each twelve -month period
commencing July first and continuing through June thirtieth of the
following year, provided the initial compliance year shall commence on Senate Bill No. 1027
Public Act No. 23-96 15 of 26
July 1, 2022, and end on June 30, 2023, and the last compliance year shall
commence on July 1, 2031, and end on June 30, 2032. "Annual" refers to
a compliance year;
(11) "Contract year" means each twelve-month period commencing
July first and continuing through June thirtieth of the following year,
provided the initial contract year shall commence on July 1, 2022, and
end on June 30, 2023, and the last contract year shall commence on July
1, 2041, and end on June 30, 2042;
(12) "Corporation business tax" means the tax due under chapter 208;
(13) "Eligible taxpayer" means a company that, at the time application
is made under subsection (b) of this section, (A) is engaged in the
aerospace industry, (B) employs not less than seven thousand
individuals in this state, (C) operates the company's primary helicopter
production facility for its current United States government programs
in this state, (D) plans to bid on a production contract or contracts for a
helicopter under one or more United States government programs, and
(E) has a wholly-owned subsidiary with production facilities and its
headquarters, as set forth in the assistance agreement, in this state prior
to April 28, 2022;
(14) (A) "Employee requirement" means, for compliance years
commencing on or after July 1, 2022, and prior to July 1, 2032:
(i) A minimum level of full-time employees in this state that is not
less than an average of seven thousand three hundred seventy-five for
each compliance year if the eligible taxpayer has entered into a
production contract for one United States government program
specified in the assistance agreement; and
(ii) A minimum level of full-time employees in this state that is not
less than an average of seven thousand five hundred for each
compliance year if the eligible taxpayer has entered into production Senate Bill No. 1027
Public Act No. 23-96 16 of 26
contracts for two United States government programs specified in the
assistance agreement.
(B) The average number of full-time employees for each compliance
year shall be determined by adding the number of full-time employees
at the end of each quarter of the respective compliance year and
dividing the sum of such quarters by four;
(15) "Full-time employee" means an employee in this state of the
company who works a minimum of thirty-five hours per week. "Full-
time employee" does not include an employee working on a temporary
or seasonal basis or any individual who does not receive a federal Form
W-2 from the company;
(16) "Minimum requirements" means the minimum conditions the
eligible taxpayer must satisfy during each compliance year to qualify for
the sales and use tax offset for such compliance year and the refundable
tax credit for such compliance year, including, but not limited to, (A)
achieving the employee requirement, average wage requirement,
supplier spend requirement and capital expenditure requirement, (B)
the maintenance of the wholly-owned subsidiary's headquarters, as set
forth in the assistance agreement, in this state, (C) the maintenance and
operation of the company's primary helicopter production facility for its
current United States government programs, as of the date of the
assistance agreement, in this state, (D) the undertaking and maintaining
in this state of the company's primary production for helicopters to be
produced during the term of the assistance agreement under one or
more future United States government programs specified in the
assistance agreement under production contracts entered into by the
eligible taxpayer after April 28, 2022, and (E) the maintenance of
diversity and workforce training programs by the company in
accordance with the terms of the assistance agreement;
(17) "Production" means the various operations related to the Senate Bill No. 1027
Public Act No. 23-96 17 of 26
completion of a helicopter, including, but not limited to, procurement,
engineering, manufacture, assembly, integration and testing;
(18) "Production contract" means a contract with the United States
government for the production of helicopters;
(19) "Project tax benefit" means the total benefit accruing to an eligible
taxpayer with respect to the sales and use tax offset and the refundable
tax credit;
(20) "Refundable tax credit" means the credit described in subsection
(e) of this section;
(21) "Regular place of business" means any bona fide office, factory,
warehouse or other space in this state at which a supply company is
doing business in its own name in a regular and systematic manner and
which place is continuously maintained, occupied and used by the
supply company in carrying on its business through its employees
regularly in attendance to carry on the supply company's business in the
supply company's own name. "Regular place of business" does not
include a place of business for a statutory agent for service of process, a
temporary office or location used by the supply company only for the
duration of the contract or an office maintained, occupied and used by
a person affiliated with the supply company;
(22) "Sales and use tax" means the taxes due under chapter 219;
(23) "Sales and use tax offset" means the offset described under
subsection (d) of this section;
(24) "Supply company" means any commercial business with a
regular place of business in this state that supplies goods and services
necessary to support (A) the manufacturing of company products, or (B)
company operations. "Supply company" does not include any local,
state or federal revenue collection or taxing entity; Senate Bill No. 1027
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(25) (A) "Supplier spend requirement" means, for compliance years
commencing on or after July 1, 2022, and prior to July 1, 2032, the total
annual spend by the wholly-owned subsidiary and by the company, on
behalf of the wholly-owned subsidiary, with supply companies in this
state of not less than:
(i) Three hundred million dollars for compliance years commencing
on or after July 1, 2022, and prior to July 1, 2024;
(ii) Four hundred ten million dollars for compliance years
commencing on or after July 1, 2024, and prior to July 1, 2029; and
(iii) Four hundred seventy million dollars for compliance years
commencing on or after July 1, 2029, and prior to July 1, 2032.
(B) If an expenditure qualifies for both the supplier spend
requirement and the capital expenditures requirement, the eligible
taxpayer may choose between such categories for which such
expenditure may be counted. In no event shall any such expenditure be
counted towards more than one such category; and
(26) "Wholly-owned subsidiary" means a subsidiary of the company,
or such subsidiary's successor to its operations, that has its
headquarters, as set forth in the assistance agreement, in this state.
"Wholly-owned subsidiary" includes any direct or indirect subsidiary of
the company's wholly-owned subsidiary and any limited liability
company wholly owned directly or indirectly by the company's wholly-
owned subsidiary.
(b) (1) Any eligible taxpayer that intends to undertake an aerospace
manufacturing project may apply to the commissioner for certification
of such project as a certified aerospace manufacturing project. In order
to receive such certification, an eligible taxpayer shall apply to the
commissioner, in a form acceptable to the commissioner and including
such information as prescribed by the commissioner, including, but not Senate Bill No. 1027
Public Act No. 23-96 19 of 26
limited to, (A) a detailed plan outlining the aerospace manufacturing
project, (B) the term of such project, and (C) the estimated expenditures
for such project. The commissioner may require such eligible taxpayer
to submit such additional information as may be necessary to evaluate
the application.
(2) All decisions of the commissioner with respect to any application
received under subdivision (1) of this subsection shall be made in the
commissioner's discretion. The provisions of this subsection shall not be
construed to authorize suit against this state by any taxpayer that is
denied certification by the commissioner and shall not be construed as
a waiver of sovereign immunity.
(c) (1) Upon certification by the commissioner of an application as
provided in subsection (b) of this section, the commissioner may enter
into an assistance agreement with an eligible taxpayer pursuant to
which the commissioner may, in consideration of the eligible taxpayer's
agreement to meet the minimum requirements in a compliance year in
connection with the certified aerospace manufacturing project and as
further inducement for the eligible taxpayer to enter into an aerospace
manufacturing project, agree to permit the eligible taxpayer to offset its
sales and use tax liability and to claim a credit against its corporation
business tax liability up to a specified amount for the corresponding
compliance year.
(2) Such assistance agreement shall have a term of not less than
twenty years and shall list:
(A) The specifications of the certified aerospace manufacturing
project;
(B) The length of time the certified aerospace manufacturing project
will take to complete;
(C) The minimum requirements the eligible taxpayer agrees to meet Senate Bill No. 1027
Public Act No. 23-96 20 of 26
during each compliance year;
(D) The commitment by the eligible taxpayer to (i) maintain the
headquarters, as set forth in the assistance agreement, of the wholly-
owned subsidiary or its successor in this state, (ii) operate its primary
helicopter production facility for its current United States government
programs, as of the date of the assistance agreement, in this state, and
(iii) to undertake and maintain its primary production of helicopters to
be produced during the term of the assistance agreement under one or
more future United States government programs specified in the
assistance agreement in this state under production contracts entered
into by the eligible taxpayer after April 28, 2022;
(E) The amount of sales and use tax that the eligible taxpayer is
eligible to offset for each compliance year set forth in the assistance
agreement, provided the eligible taxpayer meets the minimum
requirements for each such compliance year;
(F) The terms and conditions of the repayment of any sales and use
tax offsets and other required financial penalties resulting from the
eligible taxpayer's failure to comply with the terms of the assistance
agreement;
(G) The amount of corporation business tax, subject to the limits set
forth in subsection (e) of this section, against which the eligible taxpayer
is eligible to claim a credit for each compliance year set forth in the
assistance agreement, provided the eligible taxpayer meets the
minimum requirements for each such compliance year;
(H) The manner and method for the eligible taxpayer to provide
notice of any disputed claim under the assistance agreement; and
(I) Any other terms and conditions the commissioner may require.
(3) The commissioner may amend the assistance agreement [shall] to Senate Bill No. 1027
Public Act No. 23-96 21 of 26
provide that the project tax benefit be earned [and utilized] during the
first eight years of the term of any production contract and utilized
within the first nine years of the term of any production contract,
provided no project tax benefit may be earned [or utilized] beyond the
benefit period or utilized beyond one year after the end of the benefit
period.
(4) Any eligible taxpayer that enters into an assistance agreement
with the commissioner under this subsection may, in the event of any
disputed claim under such assistance agreement, bring an action against
this state to the superior court for the judicial district of Hartford for the
purpose of having such claim determined, provided notice of such
disputed claim is first given to the commissioner in the manner and
method described in such assistance agreement. No such action shall be
allowed unless it is brought not later than two years after the date on
which the eligible taxpayer gave proper notice to the commissioner in
accordance with such assistance agreement. All legal defenses under
such assistance agreement, except sovereign immunity, are reserved to
this state.
(5) If the provisions of subsection (c) or (e) of section 32-223 or section
32-462 are in conflict with the assistance agreement, the provisions of
such assistance agreement shall supersede.
(6) Upon the execution of the assistance agreement, the commissioner
shall issue an allocation notice stating the maximum combined amount
of the sales and use tax offset and the refundable tax credit available to
the eligible taxpayer for the benefit period and the specific requirements
the eligible taxpayer shall meet to qualify for such offset and credit. Such
notice shall certify to the eligible taxpayer that the offsets and credits
may be claimed by the eligible taxpayer if the eligible taxpayer meets
the specific requirements set forth in the notice.
(d) (1) The assistance agreement shall provide for the offset of sales Senate Bill No. 1027
Public Act No. 23-96 22 of 26
and use tax amounts otherwise payable by the eligible taxpayer under
the provisions of chapter 219. Such offset shall be made in the form,
timing and manner determined by the commissioner in consultation
with the Commissioner of Revenue Services. The sales and use tax offset
amounts shall be calculated after the application of all other sales and
use tax exemptions set forth in chapter 219 in effect on April 28, 2022
and any subsequent amendments to said chapter that the eligible
taxpayer is eligible to claim. Nothing in this subsection shall affect the
eligible taxpayer's ability to claim the sales and use tax exemptions that
it otherwise qualifies for under any provision of the general statutes.
(2) Subsequent to a production contract taking effect for helicopters
to be produced during the term of the assistance agreement, not later
than sixty days after the end of each compliance year or, if the eligible
taxpayer requests and the commissioner approves an extended date, not
later than such extended date, the eligible taxpayer shall certify, subject
to a third-party audit performed in accordance with the Department of
Economic and Community Development audit guide or such protocols
as may be set forth in the assistance agreement, the actual employment,
wages, supplier spend and capital expenditure amounts to the
commissioner in accordance with the requirements of the assistance
agreement. If the results of such audit reveal that the eligible taxpayer
has claimed a sales and use tax offset in excess of the amount allowable,
the eligible taxpayer shall be subject to the repayment provisions as set
forth in the assistance agreement. At the end of each compliance year,
upon receipt of the eligible taxpayer's certification, the commissioner
shall notify the Commissioner of Revenue Services whether the eligible
taxpayer has met all minimum requirements necessary to qualify for the
sales and use tax offset or is required to repay the amount of such offset
in accordance with the terms of the assistance agreement.
(e) (1) If the results of the audit performed pursuant to subdivision
(2) of subsection (d) of this section reveal that the eligible taxpayer was Senate Bill No. 1027
Public Act No. 23-96 23 of 26
unable to utilize all of the sales and use tax offset to which it was entitled
under the assistance agreement for a compliance year against its sales
and use tax liability, the assistance agreement shall permit the eligible
taxpayer to claim the excess amount as a refundable tax credit, not to
exceed five million dollars for each compliance year, against the
corporation business tax. If the amount of the excess is greater than five
million dollars for any compliance year, the excess over five million
dollars shall be carried forward to future compliance years to offset the
eligible taxpayer's sales and use tax liability and then as refundable tax
credits of up to five million dollars for each compliance year against the
eligible taxpayer's corporation business tax liability, until the excess is
fully utilized, except that no carry-forward shall extend beyond one year
after the end of the benefit period. Such carry-forward shall be utilized
prior to any sales and use tax offset earned in any subsequent
compliance year.
(2) If the amount of the refundable tax credit exceeds the eligible
taxpayer's corporation business tax liability for the applicable income
year, the Commissioner of Revenue Services shall treat such excess as
an overpayment and shall refund the amount of such excess, without
interest, to the eligible taxpayer. In no event shall the refundable tax
credits allowed under this subsection exceed forty-five million dollars
in the aggregate over the term of the assistance agreement. The eligible
taxpayer shall claim the refundable tax credit allowed under this
subsection on its corporate tax return for the income year that ends
during the compliance year and such credit shall not be subject to the
limits set forth in section 12-217zz. Notwithstanding the provisions of
section 12-217aa, such credit shall be claimed after all other tax credits
have been claimed.
(3) Not later than thirty days after the commissioner receives an audit
performed pursuant to subdivision (2) of subsection (d) of this section
or as provided for in the assistance agreement, during each year of the Senate Bill No. 1027
Public Act No. 23-96 24 of 26
benefit period, the Department of Economic a nd Community
Development shall issue the eligible taxpayer a credit voucher that sets
forth the amount of the refundable tax credit permitted pursuant to this
subsection and the income year for which such credit may be claimed.
The commissioner shall annually provide to the Commissioner of
Revenue Services a report detailing all credit vouchers that have been
issued under this subsection.
(f) (1) The eligible taxpayer shall pay the total amount of project tax
benefit that was utilized by the eligible taxpayer for a particular
compliance year and any penalty set forth in the assistance agreement if
the commissioner determines that the eligible taxpayer failed to satisfy
any of the minimum requirements for such compliance year.
(2) The project tax benefit utilized by the eligible taxpayer under
subsections (d) and (e) of this section shall be subject to recapture during
the contract years commencing on or after July 1, 2032, and ending on
June 30, 2042, if the eligible taxpayer fails to satisfy during such time
period certain annual thresholds relating to employee head count,
average wages, supplier spend and capital expenditures, as detailed in
the assistance agreement, and such other requirements including (A) the
maintenance of the wholly-owned subsidiary's headquarters, as set
forth in the assistance agreement, in this state, (B) the maintenance and
operation of the company's primary helicopter production facility for its
current United States government programs, as of the date of the
assistance agreement, in this state, (C) the undertaking and maintaining
in this state of the company's primary production for helicopters to be
produced during the term of the assistance agreement under one or
more of its future United States government programs specified in the
assistance agreement under production contracts entered into by the
eligible taxpayer after April 28, 2022, and (D) the maintenance of
diversity and workforce training programs by the company in
accordance with the terms of the assistance agreement. Senate Bill No. 1027
Public Act No. 23-96 25 of 26
(3) If the eligible taxpayer enters into a production contract with the
United States government for one helicopter program specified in the
assistance agreement, the targeted job requirement shall be seven
thousand two hundred fifty, and the minimum job requirement shall be
six thousand for each of the years subject to the recapture under
subdivision (2) of this subsection. If the eligible taxpayer enters into
production contracts with the United States government for two
helicopter programs specified in the assistance agreement, the targeted
job requirement shall be seven thousand seven hundred fifty, and the
minimum job requirement shall be seven thousand for each of the years
subject to the recapture under subdivision (2) of this subsection. The
annual recapture amount shall be (A) repaid if the number of actual jobs
in any year subject to the recapture is less than the minimum job
requirement, and (B) prorated at ninety per cent value of the annual
recapture amount if the number of actual jobs is equal to or greater than
the minimum job requirement but less than the targeted job
requirement. In addition to the recapture job obligation, the
commissioner may require other criteria, including, but not limited to,
wage requirements, with respect to the recapture of the remaining ten
per cent of the annual recapture amount. In no event shall the amount
of the recapture exceed the annual recapture amount.
(g) The aggregate amount of the project tax benefit granted by the
commissioner under this section shall not exceed (1) six million two
hundred fifty thousand dollars for each compliance year or fifty million
dollars during the term of the assistance agreement if the eligible
taxpayer has entered into a production contract after April 28, 2022, with
the United States government for one helicopter program specified in
the assistance agreement, and (2) nine million three hundred seventy-
five thousand dollars for each compliance year or seventy-five million
dollars during the term of the assistance agreement if the eligible
taxpayer has entered into production contracts after April 28, 2022, with
the United States government for two helicopter programs specified in Senate Bill No. 1027
Public Act No. 23-96 26 of 26
the assistance agreement.
(h) The commissioner shall not enter into any assistance agreement
under subsection (c) of this section after January 31, 2023.
(i) The commissioner may make revisions to the terms of the
assistance agreement to address a scenario where a delay, not caused by
the eligible taxpayer, prevents the eligible taxpayer from entering into
one or more production contracts by June 30, 2024. Such revisions may
include changes to the timing of (1) the benefit period, (2) the
compliance years, (3) the contract years, (4) the minimum requirements,
and (5) the recapture period, and other conforming changes, provided
in all cases, the project tax benefit shall be earned [and utilized] during
the first eight years of the term of any such production contract and
utilized not later than one year after the end of the benefit period.
(j) The commissioner may from time to time amend, supplement or
modify the terms of the assistance agreement consistent with the
provisions of this section.