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General Assembly Raised Bill No. 1240
January Session, 2023
LCO No. 6616
Referred to Committee on FINANCE, REVENUE AND
BONDING
Introduced by:
(FIN)
AN ACT CONCERNING THE MILL RATE FOR COMMERCIAL AND
INDUSTRIAL REAL PROPERTY, IMPLEMENTING A MUNICIPAL TAX
REVENUE SHARING PROGRAM AND ESTABLISHING TAX CREDIT
VOUCHER PROGRAMS TO INCENTIVIZE COMMERCIAL LEASES
AND RESIDENTIAL CONVERSIONS.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. (NEW) (Effective October 1, 2023) (a) Notwithstanding the 1
provisions of any special act, municipal charter or home rule ordinance, 2
for the assessment year commencing October 1, 2023, and each 3
assessment year thereafter, the mill rate for commercial and industrial 4
real property shall not exceed 31.25 mills. No district or borough may 5
set a mill rate for commercial and industrial real property that, if 6
combined with the mill rate for commercial and industrial real property 7
of the town, city, consolidated town and city or consolidated town and 8
borough in which such district or borough is located, would result in a 9
combined mill rate for commercial and industrial real property that 10
exceeds 31.25 mills. 11
(b) The state shall make an annual payment from the municipal mill 12 Raised Bill No. 1240
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rate reimbursement account established under subsection (c) of this 13
section to each municipality for the difference in the amount of revenue 14
generated for the assessment year commencing October 1, 2022, for 15
commercial and industrial real property and the amount of revenue 16
generated for the assessment year commencing October 1, 2023, and 17
each assessment year thereafter, for commercial and industrial real 18
property. Each municipality shall certify to the Secretary of the Office of 19
Policy and Management the amount of such revenue loss and shall 20
provide any substantiating information required by the secretary, in 21
such form and manner as prescribed by, and in accordance with any 22
deadline established by, the secretary. The amount payable to a 23
municipality under this subsection in any fiscal year shall be reduced 24
proportionately in the event the total of such amounts exceeds the 25
amount available for such payments in the municipal mill rate 26
reimbursement account. 27
(c) There is established an account to be known as the "municipality 28
mill rate reimbursement account" which shall be a separate, nonlapsing 29
account within the General Fund. The account shall contain any moneys 30
required by law to be deposited in the account. Moneys in the account 31
shall be expended by the Secretary of the Office of Policy and 32
Management for the purposes of making the payments under 33
subsection (b) of this section. 34
Sec. 2. Subdivision (1) of section 12-408 of the general statutes is 35
repealed and the following is substituted in lieu thereof (Effective October 36
1, 2023): 37
(1) (A) For the privilege of making any sales, as defined in 38
subdivision (2) of subsection (a) of section 12-407, at retail, in this state 39
for a consideration, a tax is hereby imposed on all retailers at the rate of 40
six and thirty-five-hundredths per cent of the gross receipts of any 41
retailer from the sale of all tangible personal property sold at retail or 42
from the rendering of any services constituting a sale in accordance with 43
subdivision (2) of subsection (a) of section 12-407, except, in lieu of said 44
rate, the rates provided in subparagraphs (B) to (I), inclusive, of this 45 Raised Bill No. 1240
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subdivision; 46
(B) (i) At a rate of fifteen per cent with respect to each transfer of 47
occupancy, from the total amount of rent received by a hotel or lodging 48
house for the first period not exceeding thirty consecutive calendar 49
days; 50
(ii) At a rate of eleven per cent with respect to each transfer of 51
occupancy, from the total amount of rent received by a bed and 52
breakfast establishment for the first period not exceeding thirty 53
consecutive calendar days; 54
(C) With respect to the sale of a motor vehicle to any individual who 55
is a member of the armed forces of the United States and is on full-time 56
active duty in Connecticut and who is considered, under 50 App USC 57
574, a resident of another state, or to any such individual and the spouse 58
thereof, at a rate of four and one-half per cent of the gross receipts of any 59
retailer from such sales, provided such retailer requires and maintains a 60
declaration by such individual, prescribed as to form by the 61
commissioner and bearing notice to the effect that false statements made 62
in such declaration are punishable, or other evidence, satisfactory to the 63
commissioner, concerning the purchaser's state of residence under 50 64
App USC 574; 65
(D) (i) With respect to the sales of computer and data processing 66
services occurring on or after July 1, 2001, at the rate of one per cent, and 67
(ii) with respect to sales of Internet access services, on and after July 1, 68
2001, such services shall be exempt from such tax; 69
(E) (i) With respect to the sales of labor that is otherwise taxable under 70
subparagraph (C) or (G) of subdivision (2) of subsection (a) of section 71
12-407 on existing vessels and repair or maintenance services on vessels 72
occurring on and after July 1, 1999, such services shall be exempt from 73
such tax; 74
(ii) With respect to the sale of a vessel, a motor for a vessel or a trailer 75
used for transporting a vessel, at the rate of two and ninety-nine-76 Raised Bill No. 1240
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hundredths per cent, except that the sale of a vessel shall be exempt from 77
such tax if such vessel is docked in this state for sixty or fewer days in a 78
calendar year; 79
(iii) With respect to the sale of dyed diesel fuel, as defined in 80
subsection (d) of section 12-487, sold by a marine fuel dock exclusively 81
for marine purposes, at the rate of two and ninety-nine-hundredths per 82
cent; 83
(F) With respect to patient care services for which payment is 84
received by the hospital on or after July 1, 1999, and prior to July 1, 2001, 85
at the rate of five and three-fourths per cent and on and after July 1, 2001, 86
such services shall be exempt from such tax; 87
(G) With respect to the rental or leasing of a passenger motor vehicle 88
for a period of thirty consecutive calendar days or less, at a rate of nine 89
and thirty-five-hundredths per cent; 90
(H) With respect to the sale of (i) a motor vehicle for a sales price 91
exceeding fifty thousand dollars, at a rate of seven and three-fourths per 92
cent on the entire sales price, (ii) jewelry, whether real or imitation, for 93
a sales price exceeding five thousand dollars, at a rate of seven and 94
three-fourths per cent on the entire sales price, and (iii) an article of 95
clothing or footwear intended to be worn on or about the human body, 96
a handbag, luggage, umbrella, wallet or watch for a sales price 97
exceeding one thousand dollars, at a rate of seven and three-fourths per 98
cent on the entire sales price. For purposes of this subparagraph, "motor 99
vehicle" has the meaning provided in section 14-1, but does not include 100
a motor vehicle subject to the provisions of subparagraph (C) of this 101
subdivision, a motor vehicle having a gross vehicle weight rating over 102
twelve thousand five hundred pounds, or a motor vehicle having a 103
gross vehicle weight rating of twelve thousand five hundred pounds or 104
less that is not used for private passenger purposes, but is designed or 105
used to transport merchandise, freight or persons in connection with 106
any business enterprise and issued a commercial registration or more 107
specific type of registration by the Department of Motor Vehicles; 108 Raised Bill No. 1240
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(I) With respect to the sale of meals, as defined in subdivision (13) of 109
section 12-412, sold by an eating establishment, caterer or grocery store; 110
and spirituous, malt or vinous liquors, soft drinks, sodas or beverages 111
such as are ordinarily dispensed at bars and soda fountains, or in 112
connection therewith; in addition to the tax imposed under 113
subparagraph (A) of this subdivision, at the rate of one per cent; 114
(J) The rate of tax imposed by this chapter shall be applicable to all 115
retail sales upon the effective date of such rate, except that a new rate 116
that represents an increase in the rate applicable to the sale shall not 117
apply to any sales transaction wherein a binding sales contract without 118
an escalator clause has been entered into prior to the effective date of the 119
new rate and delivery is made within ninety days after the effective date 120
of the new rate. For the purposes of payment of the tax imposed under 121
this section, any retailer of services taxable under subdivision (37) of 122
subsection (a) of section 12-407, who computes taxable income, for 123
purposes of taxation under the Internal Revenue Code of 1986, or any 124
subsequent corresponding internal revenue code of the United States, 125
as amended from time to time, on an accounting basis that recognizes 126
only cash or other valuable consideration actually received as income 127
and who is liable for such tax only due to the rendering of such services 128
may make payments related to such tax for the period during which 129
such income is received, without penalty or interest, without regard to 130
when such service is rendered; 131
(K) (i) For calendar quarters ending on or after September 30, 2019, 132
the commissioner shall deposit into the regional planning incentive 133
account, established pursuant to section 4-66k, six and seven-tenths per 134
cent of the amounts received by the state from the tax imposed under 135
subparagraph (B) of this subdivision and ten and seven-tenths per cent 136
of the amounts received by the state from the tax imposed under 137
subparagraph (G) of this subdivision; 138
(ii) For calendar quarters ending on or after September 30, 2018, the 139
commissioner shall deposit into the Tourism Fund established under 140
section 10-395b ten per cent of the amounts received by the state from 141 Raised Bill No. 1240
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the tax imposed under subparagraph (B) of this subdivision; 142
(L) For calendar months commencing on or after July 1, 2021, the 143
commissioner shall deposit into the municipal revenue sharing account 144
established pursuant to section 4-66l seven and nine-tenths per cent of 145
the amounts received by the state from the tax imposed under 146
subparagraph (A) of this subdivision; [and] 147
(M) (i) For calendar months commencing on or after July 1, 2017, the 148
commissioner shall deposit into the Special Transportation Fund 149
established under section 13b-68 seven and nine-tenths per cent of the 150
amounts received by the state from the tax imposed under 151
subparagraph (A) of this subdivision; 152
(ii) For calendar months commencing on or after July 1, 2018, but 153
prior to July 1, 2019, the commissioner shall deposit into the Special 154
Transportation Fund established under section 13b-68 eight per cent of 155
the amounts received by the state from the tax imposed under 156
subparagraphs (A) and (H) of this subdivision on the sale of a motor 157
vehicle; 158
(iii) For calendar months commencing on or after July 1, 2019, but 159
prior to July 1, 2020, the commissioner shall deposit into the Special 160
Transportation Fund established under section 13b-68 seventeen per 161
cent of the amounts received by the state from the tax imposed under 162
subparagraphs (A) and (H) of this subdivision on the sale of a motor 163
vehicle; 164
(iv) For calendar months commencing on or after July 1, 2020, but 165
prior to July 1, 2021, the commissioner shall deposit into the Special 166
Transportation Fund established under section 13b-68 twenty-five per 167
cent of the amounts received by the state from the tax imposed under 168
subparagraphs (A) and (H) of this subdivision on the sale of a motor 169
vehicle; 170
(v) For calendar months commencing on or after July 1, 2021, but 171
prior to July 1, 2022, the commissioner shall deposit into the Special 172 Raised Bill No. 1240
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Transportation Fund established under section 13b-68 seventy-five per 173
cent of the amounts received by the state from the tax imposed under 174
subparagraphs (A) and (H) of this subdivision on the sale of a motor 175
vehicle; and 176
(vi) For calendar months commencing on or after July 1, 2022, the 177
commissioner shall deposit into the Special Transportation Fund 178
established under section 13b-68 one hundred per cent of the amounts 179
received by the state from the tax imposed under subparagraphs (A) 180
and (H) of this subdivision on the sale of a motor vehicle; and 181
(N) For calendar months commencing on or after October 1, 2023, the 182
commissioner shall deposit into the municipal mill rate reimbursement 183
account established pursuant to section 1 of this act three and ninety-184
four-hundredths per cent of the amounts received by the state from the 185
tax imposed under subparagraph (A) of this subdivision. 186
Sec. 3. Subdivision (1) of section 12-411 of the general statutes is 187
repealed and the following is substituted in lieu thereof (Effective October 188
1, 2023): 189
(1) (A) An excise tax is hereby imposed on the storage, acceptance, 190
consumption or any other use in this state of tangible personal property 191
purchased from any retailer for storage, acceptance, consumption or any 192
other use in this state, the acceptance or receipt of any services 193
constituting a sale in accordance with subdivision (2) of subsection (a) 194
of section 12-407, purchased from any retailer for consumption or use in 195
this state, or the storage, acceptance, consumption or any other use in 196
this state of tangible personal property which has been manufactured, 197
fabricated, assembled or processed from materials by a person, either 198
within or without this state, for storage, acceptance, consumption or any 199
other use by such person in this state, to be measured by the sales price 200
of materials, at the rate of six and thirty-five-hundredths per cent of the 201
sales price of such property or services, except, in lieu of said rate: 202
(B) (i) At a rate of fifteen per cent of the rent paid to a hotel or lodging 203
house for the first period not exceeding thirty consecutive calendar 204 Raised Bill No. 1240
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days; 205
(ii) At a rate of eleven per cent of the rent paid to a bed and breakfast 206
establishment for the first period not exceeding thirty consecutive 207
calendar days; 208
(C) With respect to the storage, acceptance, consumption or use in 209
this state of a motor vehicle purchased from any retailer for storage, 210
acceptance, consumption or use in this state by any individual who is a 211
member of the armed forces of the United States and is on full-time 212
active duty in Connecticut and who is considered, under 50 App USC 213
574, a resident of another state, or to any such individual and the spouse 214
of such individual at a rate of four and one-half per cent of the sales price 215
of such vehicle, provided such retailer requires and maintains a 216
declaration by such individual, prescribed as to form by the 217
commissioner and bearing notice to the effect that false statements made 218
in such declaration are punishable, or other evidence, satisfactory to the 219
commissioner, concerning the purchaser's state of residence under 50 220
App USC 574; 221
(D) (i) With respect to the acceptance or receipt in this state of labor 222
that is otherwise taxable under subparagraph (C) or (G) of subdivision 223
(2) of subsection (a) of section 12-407 on existing vessels and repair or 224
maintenance services on vessels occurring on and after July 1, 1999, such 225
services shall be exempt from such tax; 226
(ii) (I) With respect to the storage, acceptance or other use of a vessel 227
in this state, at the rate of two and ninety-nine-hundredths per cent, 228
except that such storage, acceptance or other use shall be exempt from 229
such tax if such vessel is docked in this state for sixty or fewer days in a 230
calendar year; 231
(II) With respect to the storage, acceptance or other use of a motor for 232
a vessel or a trailer used for transporting a vessel in this state, at the rate 233
of two and ninety-nine-hundredths per cent; 234
(III) With respect to the storage, acceptance or other use of dyed diesel 235 Raised Bill No. 1240
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fuel, as defined in subsection (d) of section 12-487, exclusively for 236
marine purposes, at the rate of two and ninety-nine-hundredths per 237
cent; 238
(E) (i) With respect to the acceptance or receipt in this state of 239
computer and data processing services purchased from any retailer for 240
consumption or use in this state occurring on or after July 1, 2001, at the 241
rate of one per cent of such services, and (ii) with respect to the 242
acceptance or receipt in this state of Internet access services, on and after 243
July 1, 2001, such services shall be exempt from such tax; 244
(F) With respect to the acceptance or receipt in this state of patient 245
care services purchased from any retailer for consumption or use in this 246
state for which payment is received by the hospital on or after July 1, 247
1999, and prior to July 1, 2001, at the rate of five and three-fourths per 248
cent and on and after July 1, 2001, such services shall be exempt from 249
such tax; 250
(G) With respect to the rental or leasing of a passenger motor vehicle 251
for a period of thirty consecutive calendar days or less, at a rate of nine 252
and thirty-five-hundredths per cent; 253
(H) With respect to the acceptance or receipt in this state of (i) a motor 254
vehicle for a sales price exceeding fifty thousand dollars, at a rate of 255
seven and three-fourths per cent on the entire sales price, (ii) jewelry, 256
whether real or imitation, for a sales price exceeding five thousand 257
dollars, at a rate of seven and three-fourths per cent on the entire sales 258
price, and (iii) an article of clothing or footwear intended to be worn on 259
or about the human body, a handbag, luggage, umbrella, wallet or 260
watch for a sales price exceeding one thousand dollars, at a rate of seven 261
and three-fourths per cent on the entire sales price. For purposes of this 262
subparagraph, "motor vehicle" has the meaning provided in section 14-263
1, but does not include a motor vehicle subject to the provisions of 264
subparagraph (C) of this subdivision, a motor vehicle having a gross 265
vehicle weight rating over twelve thousand five hundred pounds, or a 266
motor vehicle having a gross vehicle weight rating of twelve thousand 267 Raised Bill No. 1240
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five hundred pounds or less that is not used for private passenger 268
purposes, but is designed or used to transport merchandise, freight or 269
persons in connection with any business enterprise and issued a 270
commercial registration or more specific type of registration by the 271
Department of Motor Vehicles; 272
(I) With respect to the acceptance or receipt in this state of meals, as 273
defined in subdivision (13) of section 12-412, sold by an eating 274
establishment, caterer or grocery store; and spirituous, malt or vinous 275
liquors, soft drinks, sodas or beverages such as are ordinarily dispensed 276
at bars and soda fountains, or in connection therewith; in addition to the 277
tax imposed under subparagraph (A) of this subdivision, at the rate of 278
one per cent; 279
(J) (i) For calendar quarters ending on or after September 30, 2019, the 280
commissioner shall deposit into the regional planning incentive 281
account, established pursuant to section 4-66k, six and seven-tenths per 282
cent of the amounts received by the state from the tax imposed under 283
subparagraph (B) of this subdivision and ten and seven-tenths per cent 284
of the amounts received by the state from the tax imposed under 285
subparagraph (G) of this subdivision; 286
(ii) For calendar quarters ending on or after September 30, 2018, the 287
commissioner shall deposit into the Tourism Fund established under 288
section 10-395b ten per cent of the amounts received by the state from 289
the tax imposed under subparagraph (B) of this subdivision; 290
(K) For calendar months commencing on or after July 1, 2021, the 291
commissioner shall deposit into [said] the municipal revenue sharing 292
account established pursuant to section 4-66l seven and nine-tenths per 293
cent of the amounts received by the state from the tax imposed under 294
subparagraph (A) of this subdivision; [and] 295
(L) (i) For calendar months commencing on or after July 1, 2017, the 296
commissioner shall deposit into said Special Transportation Fund seven 297
and nine-tenths per cent of the amounts received by the state from the 298
tax imposed under subparagraph (A) of this subdivision; 299 Raised Bill No. 1240
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(ii) For calendar months commencing on or after July 1, 2018, but 300
prior to July 1, 2019, the commissioner shall deposit into the Special 301
Transportation Fund established under section 13b-68 eight per cent of 302
the amounts received by the state from the tax imposed under 303
subparagraphs (A) and (H) of this subdivision on the acceptance or 304
receipt in this state of a motor vehicle; 305
(iii) For calendar months commencing on or after July 1, 2019, but 306
prior to July 1, 2020, the commissioner shall deposit into the Special 307
Transportation Fund established under section 13b-68 seventeen per 308
cent of the amounts received by the state from the tax imposed under 309
subparagraphs (A) and (H) of this subdivision on the acceptance or 310
receipt in this state of a motor vehicle; 311
(iv) For calendar months commencing on or after July 1, 2020, but 312
prior to July 1, 2021, the commissioner shall deposit into the Special 313
Transportation Fund established under section 13b-68 twenty-five per 314
cent of the amounts received by the state from the tax imposed under 315
subparagraphs (A) and (H) of this subdivision on the acceptance or 316
receipt in this state of a motor vehicle; 317
(v) For calendar months commencing on or after July 1, 2021, but 318
prior to July 1, 2022, the commissioner shall deposit into the Special 319
Transportation Fund established under section 13b-68 seventy-five per 320
cent of the amounts received by the state from the tax imposed under 321
subparagraphs (A) and (H) of this subdivision on the acceptance or 322
receipt in this state of a motor vehicle; and 323
(vi) For calendar months commencing on or after July 1, 2022, the 324
commissioner shall deposit into the Special Transportation Fund 325
established under section 13b-68 one hundred per cent of the amounts 326
received by the state from the tax imposed under subparagraphs (A) 327
and (H) of this subdivision on the acceptance or receipt in this state of a 328
motor vehicle; and 329
(M) For calendar months commencing on or after October 1, 2023, the 330
commissioner shall deposit into the municipal mill rate reimbursement 331 Raised Bill No. 1240
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account established pursuant to section 1 of this act three and ninety-332
four-hundredths per cent of the amounts received by the state from the 333
tax imposed under subparagraph (A) of this subdivision. 334
Sec. 4. (NEW) (Effective from passage) (a) Commencing July 1, 2023, the 335
Commissioner of Revenue Services shall track and record the source of 336
the revenue received by the state each fiscal year from the tax imposed 337
under chapters 208, 219, 228a and 229 of the general statutes, for the 338
purpose of accurately and fairly attributing to each municipality 339
revenue received from each such tax. The commissioner shall determine 340
the sourcing method for each such tax. Taxpayers paying a tax specified 341
in this subsection shall provide disaggregated information and such 342
other data the commissioner requests to carry out the provisions of this 343
section. On or before June 30, 2024, and annually thereafter, the 344
commissioner shall post on the Department of Revenue Service's 345
Internet web site a list of all municipalities and the amount of revenue 346
from each such tax attributed to the municipality for the applicable fiscal 347
year. 348
(b) (1) Prior to July 1, 2023, and annually thereafter, the Secretary of 349
the Office of Policy and Management shall calculate, based on the 350
statement of estimated revenue supplied by the joint standing 351
committee of the General Assembly having cognizance of matters 352
relating to state finance, revenue and bonding pursuant to subsection 353
(b) of section 2-35 of the general statutes, growth rate projections on a 354
state-wide and a municipal basis for each tax specified in subsection (a) 355
of this section. 356
(2) On or before January 1, 2024, and annually thereafter, the 357
secretary shall calculate and post on the Office of Policy and 358
Management's Internet web site a municipal needs capacity gap metric 359
for each municipality. Such metric shall be calculated in accordance with 360
the methodologies used in the May, 2015 New England Public Policy 361
Center Research Report 15-1. 362
(c) There is established an account to be known as the "municipal tax 363 Raised Bill No. 1240
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revenue account" which shall be a separate, nonlapsing account within 364
the General Fund. The account shall contain any moneys required by 365
law to be deposited in the account. Moneys in the account shall be 366
expended by the Secretary of the Office of Policy and Management for 367
the purposes of this section. 368
(d) On or before June 30, 2024, and annually thereafter, the 369
Comptroller shall transfer from the General Fund to the municipal tax 370
revenue account, established under subsection (c) of this section, any 371
amount of each tax set forth in subsection (a) of this section that exceeds 372
the projected growth rate calculated for such tax pursuant to 373
subdivision (1) of subsection (b) of this section. 374
(e) (1) When the amount in the municipal tax revenue account reaches 375
one hundred million dollars, the Secretary of the Office of Policy and 376
Management shall commence disbursing grants to municipalities on an 377
annual basis in accordance with the provisions of this subsection, 378
provided the balance in the account may not fall below fifty million 379
dollars. 380
(2) The secretary shall calculate, for each municipality for which the 381
Commissioner of Revenue Services has attributed tax revenue under 382
subsection (a) of this section, the portion of the excess revenue deposited 383
in the account from each tax that is attributable to such municipality. 384
Each such municipality shall receive a grant of fifty per cent of such 385
portion. The amount of the grants payable in any fiscal year under this 386
subdivision shall be reduced proportionately in the event the total of 387
such amounts exceeds the amount available for such payments in the 388
municipal tax revenue account. 389
(3) If any funds in the account remain available for disbursement after 390
the grants under subdivision (2) of this subsection have been paid for 391
the fiscal year, the Secretary of the Office of Policy and Management 392
shall distribute additional grants proportionately to municipalities for 393
which the secretary has calculated a positive gap metric under 394
subdivision (2) of subsection (b) of this section. 395 Raised Bill No. 1240
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Sec. 5. (NEW) (Effective July 1, 2023) (a) As used in this section: 396
(1) "Distressed municipality" has the same meaning as provided in 397
section 32-9p of the general statutes; 398
(2) "Downtown" has the same meaning as provided in section 8-399
169hh of the general statutes; and 400
(3) "Person" has the same meaning as provided in section 12-1 of the 401
general statutes. 402
(b) (1) The Department of Economic and Community Development 403
shall administer a program of tax credit vouchers within the resources, 404
requirements and purposes of this section to incentivize new or 405
expanded leases of commercial office space. Taxpayers may claim a 406
credit under such program against the tax imposed under chapter 207, 407
208, 209, 210, 211 or 212 of the general statutes in accordance with the 408
provisions of this section. 409
(2) Tax credit vouchers shall be awarded to program participants that 410
meet the requirements set forth in subsection (d) of this section, in an 411
amount (A) up to ten per cent of the amount of lease payments made 412
during the annual period by the participant for the term of the lease, up 413
to a maximum of ten years, and (B) up to ten per cent of the amount of 414
capital improvements made by the participant during the annual period 415
to newly leased or additionally leased commercial office space. For the 416
purposes of this section, capital improvements include furniture, 417
fixtures and equipment, telecommunications upgrades and 418
improvements, cybersecurity upgrades and improvements and other 419
improvements to commercial office space as permitted by the 420
department. 421
(3) The department shall develop an application form for the 422
program and shall publicize the program under this section. The 423
department shall post the application form on the department's Internet 424
web site, along with information about the program, including the 425
eligibility requirements set forth in subsections (c) and (d) of this section 426 Raised Bill No. 1240
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and the information required to be submitted with the application form 427
to substantiate that such eligibility requirements are met. 428
(c) The following requirements shall be met for an applicant to be 429
eligible to participate in the program: 430
(1) The property or project is located within the downtown area of a 431
distressed municipality with a population of eighty thousand or more; 432
(2) The lease is (A) (i) a new lease for commercial office space 433
previously unoccupied by the applicant, or (ii) a lease that expands the 434
applicant's existing leased commercial office space, (B) for new or 435
additional commercial office space of ten thousand square feet or more, 436
and (C) for a minimum of three years. Subleases shall not be eligible for 437
the program; and 438
(3) The applicant is (A) already located in the same municipality as 439
the new or additional commercial office space for which a lease will be 440
signed, (B) locating in the state from out-of-state, or (C) located in 441
another municipality of the state and presents to the department a letter 442
from the chief executive officer or chief economic development official 443
of such municipality supporting the applicant's move or expansion to a 444
new or an additional commercial office space. 445
(d) (1) To be eligible to claim a tax credit voucher under this section, 446
a program participant shall demonstrate: 447
(A) (i) If a new business, the investment into the business of at least 448
two million five hundred thousand dollars for the annual period, or (ii) 449
if an existing business, increased investment of at least one hundred per 450
cent of the expenditures made for real property and capital 451
improvements during the previous annual period; and 452
(B) That the participant (i) has hired at least ten new full-time 453
employees over the number of full-time employees employed by the 454
participant at the time of signing the lease, or (ii) shows an employment 455
increase of at least ten per cent over the preceding twelve-month 456 Raised Bill No. 1240
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employment average. 457
(2) (A) The provisions of subparagraph (B) of subdivision (1) of this 458
subsection shall not apply to a program participant for the first year 459
following the signing of the lease and shall not be grounds for the 460
Department of Economic and Community Development to deny a tax 461
credit voucher for such first year. 462
(B) If a program participant does not meet the requirements of 463
subparagraph (B) of subdivision (1) of this subsection in any given year 464
other than such first year, the department shall reduce proportionately 465
the amount of the tax credit voucher for which such participant would 466
otherwise be eligible. 467
(e) (1) Any person that meets the requirements of subsection (c) of 468
this section may apply to the Department of Economic and Community 469
Development for participation in the program established under this 470
section. The department shall notify each applicant accepted for 471
participation and each participant shall apply annually for a tax credit 472
voucher. 473
(2) Not later than ninety days after the annual period, a program 474
participant may apply to the department for a tax credit voucher and 475
shall provide such information as the commissioner may require 476
pertaining to the amount of such participant's lease payments for the 477
annual period, capital improvement expenditures made during the 478
annual period and employment levels for the annual period. If the 479
commissioner determines that such participant is eligible to be issued a 480
tax credit voucher, the department shall enter on the voucher the 481
amount of the payments and expenditures that have been established to 482
the commissioner's satisfaction and the amount of the credit allowed 483
under this section. 484
(3) Any program participant that submits information to the 485
department that such participant knows to be fraudulent or false shall, 486
in addition to any other penalties provided by law, be liable for a 487
penalty equal to the amount of such participant's credit entered on the 488 Raised Bill No. 1240
LCO No. 6616 17 of 23
tax credit voucher under this section. 489
(f) The Commissioner of Economic and Community Development 490
may adopt regulations, in accordance with the provisions of chapter 54 491
of the general statutes, to implement the provisions of subsections (b) to 492
(e), inclusive, of this section. 493
(g) The Commissioner of Revenue Services shall grant a credit to a 494
program participant holding the tax voucher issued under the 495
provisions of this section against the tax due under chapter 207, 208, 209, 496
210, 211 or 212 of the general statutes, provided such participant has 497
filed such voucher with the participant's state tax return. 498
(h) On or before January 1, 2025, and annually thereafter, the 499
Department of Economic and Community Development shall submit a 500
report, in accordance with the provisions of section 11-4a of the general 501
statutes, to the joint standing committees of the General Assembly 502
having cognizance of matters relating to commerce, planning and 503
development and finance, revenue and bonding. Such report shall 504
include, but not be limited to, the total number of program participants, 505
a summary of the locations of the property or project for which 506
applications were received and for which participants were accepted, a 507
summary of the employment levels of program participants, the amount 508
of each tax credit voucher allowed under this section for the previous 509
fiscal year and the aggregate amount of all tax credit vouchers allowed 510
under this section for the previous fiscal year. 511
Sec. 6. (NEW) (Effective July 1, 2023) (a) As used in this section: 512
(1) "Affordable housing" has the same meaning as provided in section 513
8-39a of the general statutes; 514
(2) "Downtown" has the same meaning as provided in section 8-515
169hh of the general statutes; 516
(3) "Owner" means any individual, partnership, limited liability 517
company, corporation or other business entity or municipality that 518 Raised Bill No. 1240
LCO No. 6616 18 of 23
possesses title to a commercial office building; 519
(4) "Person" has the same meaning as provided in section 12-1 of the 520
general statutes; 521
(5) "Placed in service" means the completion of substantial 522
rehabilitation or renovation work that would allow for occupancy of the 523
entire building or an identifiable portion of the building; 524
(6) "Project" means the rehabilitation or renovation of a commercial 525
office building, or of units and spaces in such building, that is located 526
within a downtown area of a distressed municipality, as defined in 527
section 32-9p of the general statutes, and such rehabilitation or 528
renovation is for the conversion of such commercial office building or 529
units to a residential or mixed-use building or residential units; 530
(7) "Qualified expenditure" means any costs incurred for the physical 531
construction of a project, excluding (A) the owner's personal labor, (B) 532
the cost of a new addition, except as required to comply with any 533
provision of the State Building Code or the State Fire Safety Code, and 534
(C) any nonconstruction costs such as architectural fees, legal fees or 535
financing fees; and 536
(8) "Substantial rehabilitation or renovation" or "substantially 537
rehabilitated or renovated" means the qualified expenditures of a 538
project that exceed twenty-five per cent of the assessed value of the 539
commercial office building that is the subject of such project. 540
(b) (1) The Department of Economic and Community Development 541
shall administer a program of tax credit vouchers within the resources, 542
requirements and purposes of this section for owners undertaking a 543
project under this section. The commissioner may charge any owner 544
seeking a tax credit voucher under this section an application fee not to 545
exceed ten thousand dollars to cover the cost of administering the 546
program. 547
(2) Prior to beginning any rehabilitation or renovation work for a 548 Raised Bill No. 1240
LCO No. 6616 19 of 23
project under this section, any owner seeking a credit pursuant to this 549
section shall submit to the Commissioner of Economic and Community 550
Development (A) certification that the commercial building that is the 551
subject of the project has been vacant or underutilized for a period of at 552
least six consecutive months since March 15, 2020, and any additional 553
information required by the commissioner to substantiate such 554
certification, (B) a plan of the rehabilitation or renovation work to be 555
undertaken for such project, (C) if such work is to be undertaken in 556
phases, a complete description with anticipated schedules for 557
completion of each such phase, and (D) for a project that includes 558
affordable housing units as set forth in subparagraph (C) of subdivision 559
(3) of this subsection, (i) the number of units of affordable housing to be 560
created, (ii) the proposed rents or sales prices of such units, and (iii) the 561
median income for the municipality where the project is located. For a 562
project under subparagraph (D) of this subdivision, the owner shall 563
submit a copy of the data required under said subparagraph to the 564
Commissioner of Housing and said commissioner shall, upon 565
confirming that the project complies with the definition of affordable 566
housing under section 8-39a of the general statutes, issue a certificate to 567
the owner of such confirmation. 568
(3) Upon the satisfaction of the Commissioner of Economic and 569
Community Development that the project is eligible for a tax credit 570
voucher under this section, the commissioner shall reserve for the 571
benefit of the owner an allocation of a credit equal to (A) twenty-five per 572
cent of the qualified expenditures, (B) thirty per cent of the qualified 573
expenditures if the project is located in a federally designated 574
opportunity zone, or (C) thirty per cent of the qualified expenditures if 575
(i) at least twenty per cent of the residential units are rental units that 576
qualify as affordable housing, or (ii) at least ten per cent of the 577
residential units are individual homeownership units that qualify as 578
affordable housing. The commissioner shall not allocate any credit 579
pursuant to subparagraph (C) of this subdivision unless the 580
Commissioner of Housing has issued a certificate to the owner of the 581
project pursuant to subdivision (2) of this subsection. 582 Raised Bill No. 1240
LCO No. 6616 20 of 23
(4) Following the completion of a project in its entirety or in phases 583
to an identifiable portion of the building, any owner who seeks a tax 584
credit voucher under this subsection shall notify the Commissioner of 585
Economic and Community Development that the rehabilitation or 586
renovation is complete. Such owner shall provide the commissioner 587
with documentation of the work performed on the building and shall 588
submit certification of the qualified expenditures incurred for such 589
project. The commissioner shall review the work performed and verify 590
its compliance with the plan of rehabilitation or renovation work 591
submitted to the commissioner under subdivision (2) of this subsection. 592
Following such verification, the commissioner shall issue a tax credit 593
voucher to the owner or to the taxpayer named by such owner as 594
contributing to the rehabilitation or renovation. The tax credit voucher 595
shall be in an amount equal to the lesser of (A) the credit allocated under 596
the provisions of subdivision (3) of this subsection, or (B) (i) twenty-five 597
per cent of the actual qualified expenditures, (ii) for a project located in 598
a federally designated opportunity zone, thirty per cent of the actual 599
qualified expenditures, or (iii) for a project that includes affordable 600
housing units as set forth in subparagraph (C) of subdivision (3) of this 601
subsection, thirty per cent of the actual qualified expenditures. To claim 602
a credit against a tax set forth in subsection (c) of this section, the holder 603
of the tax credit voucher shall file such voucher with the holder's state 604
tax return. 605
(5) (A) The credit authorized under this subsection shall be available 606
for the tax year in which the substantially rehabilitated or renovated 607
building is placed in service. Any credit not used by the taxpayer for the 608
year in which a substantially rehabilitated or renovated building is 609
placed in service may be carried forward for the five immediately 610
succeeding five years or until the full credit is used, whichever occurs 611
first. 612
(B) In the case of a project completed in phases, the credit shall be 613
prorated to the substantially rehabilitated or renovated identifiable 614
portion of the building that is placed in service and the department may 615
issue vouchers for such portion of the building. 616 Raised Bill No. 1240
LCO No. 6616 21 of 23
(6) If a credit is allowed under this section for a building with 617
multiple owners, such credit shall be passed through to such owners, or 618
persons designated as partners or members of such owners, pro rata or 619
pursuant to an agreement among such owners or persons that 620
documents an alternative distribution method without regard to other 621
tax or economic attributes of such owners or persons. 622
(7) Any owner allowed a credit under this subsection may sell, assign 623
or otherwise transfer such credit, in whole or in part, to one or more 624
persons, provided such credit may not be sold, assigned or otherwise 625
transferred more than three times. Whenever such credit is sold, 626
assigned or otherwise transferred, the transferor and transferee shall 627
jointly submit written notification of such sale, assignment or transfer to 628
the Department of Economic and Community Development not later 629
than thirty days after such sale, assignment or transfer. Such notification 630
shall include the tax credit voucher number, the date of transfer, the 631
amount of such credit transferred, the credit balance before and after the 632
transfer, the tax identification numbers for the transferor and the 633
transferee and any other information required by the department. 634
Failure to comply with the provisions of this subdivision shall result in 635
a disallowance of the credit until there is full compliance on the part of 636
the transferor and transferee and, for a second or third transfer, on the 637
part of all subsequent transferors and transferees. 638
(8) (A) The aggregate amount of credits that may be reserved by the 639
Commissioner of Economic and Community Development under this 640
subsection shall not exceed sixty million dollars in any fiscal year. No 641
project may receive a credit in an amount exceeding nine million dollars. 642
(B) The Commissioner of Economic and Community Development 643
shall provide a list annually to the Commissioner of Revenue Services 644
that details the credits that have been approved for the most recent fiscal 645
year and all sales, assignments and transfers thereof that were made 646
under this subsection for such year. 647
(9) The Commissioner of Economic and Community Development 648 Raised Bill No. 1240
LCO No. 6616 22 of 23
may adopt regulations, in accordance with the provisions of chapter 54 649
of the general statutes, to carry out the purposes of this section, 650
including provisions for the filing of applications, the criteria for 651
evaluating applications and the timely approval of applications by the 652
Department of Economic and Community Development. Any criteria 653
for evaluating applications shall give priority to applications for projects 654
located in federally designated opportunity zones. 655
(c) The Commissioner of Revenue Services shall grant a credit to a 656
taxpayer holding the tax voucher issued under the provisions of 657
subsection (b) of this section against the tax due under chapter 207, 208, 658
209, 210, 211 or 212 of the general statutes, provided such taxpayer has 659
filed such voucher with the holder's state tax return. 660
(d) On or before July 1, 2024, and annually thereafter, the Department 661
of Economic and Community Development shall submit a report, in 662
accordance with the provisions of section 11-4a of the general statutes, 663
to the joint standing committees of the General Assembly having 664
cognizance of matters relating to commerce, planning and development 665
and finance, revenue and bonding. Such report shall include the total 666
amount of credits reserved pursuant to subdivision (3) of subsection (b) 667
of this section for the previous fiscal year and the following information 668
for each project for which a credit has been reserved: (1) The total project 669
costs; (2) the amount of the credit reserved pursuant to subdivision (3) 670
of subsection (b) of this section; (3) a statement whether the project is for 671
a conversion to a mixed-use building and if so, the proportion of the 672
project that is not residential; (4) the number of residential units to be 673
created; and (5) if applicable, the percentage of residential units that 674
qualify as affordable housing. 675
This act shall take effect as follows and shall amend the following
sections:
Section 1 October 1, 2023 New section
Sec. 2 October 1, 2023 12-408(1)
Sec. 3 October 1, 2023 12-411(1)
Sec. 4 from passage New section Raised Bill No. 1240
LCO No. 6616 23 of 23
Sec. 5 July 1, 2023 New section
Sec. 6 July 1, 2023 New section
Statement of Purpose:
To (1) implement a mill rate cap for commercial and industrial real
property and provide reimbursement to municipalities for the resulting
revenue loss, (2) implement a municipal tax revenue sharing program,
and (3) establish tax credit voucher programs to incentivize commercial
leases and residential conversions.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
underlined.]