Connecticut 2024 Regular Session

Connecticut House Bill HB05300 Compare Versions

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Version 2 (New)

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	3	+	LCO 1 of 11
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	5	+	General Assembly Substitute Bill No. 5300
	6	+	February Session, 2024
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3	9
4		-	Substitute House Bill No. 5300
5		-
6		-	Public Act No. 24-33
7	10
8	11
9	12		AN ACT CONCERNING THE INVEST CT FUND PROGRAM.
10	13		Be it enacted by the Senate and House of Representatives in General
11	14		Assembly convened:
12	15
13		-	Section 1. Subsection (c) of section 38a-88a of the general statutes is
14		-	repealed and the following is substituted in lieu thereof (Effective October
15		-	1, 2024):
16		-	(c) (1) As used in this subsection:
17		-	(A) "Allocation date" means the date an invest CT fund receives an
18		-	investment of eligible capital equaling the amount of credits against the
19		-	tax imposed under chapter 207 and section 38a-743 allocated to
20		-	taxpayers who invest in such invest CT fund;
21		-	(B) "Cybersecurity business" means an eligible business primarily
22		-	engaged in providing information technology products, goods or
23		-	services intended to detect, prevent or respond to activity intended to
24		-	result in unauthorized access to, exfiltration of, manipulation of, or
25		-	impairment to the integrity, confidentiality or availability of an
26		-	information technology system or information stored on, or transiting,
27		-	an information technology system;
28		-	(C) "Eligible business" means a business that has its principal
29		-	business operations in Connecticut, has fewer than two hundred fifty Substitute ~~House~~ Bill No. 5300
	16	+	Section 1. Subsection (c) of section 38a-88a of the general statutes is 1
	17	+	repealed and the following is substituted in lieu thereof (Effective October 2
	18	+	1, 2024): 3
	19	+	(c) (1) As used in this subsection: 4
	20	+	(A) "Allocation date" means the date an invest CT fund receives an 5
	21	+	investment of eligible capital equaling the amount of credits against the 6
	22	+	tax imposed under chapter 207 and section 38a-743 allocated to 7
	23	+	taxpayers who invest in such invest CT fund; 8
	24	+	(B) "Cybersecurity business" means an eligible business primarily 9
	25	+	engaged in providing information technology products, goods or 10
	26	+	services intended to detect, prevent or respond to activity intended to 11
	27	+	result in unauthorized access to, exfiltration of, manipulation of, or 12
	28	+	impairment to the integrity, confidentiality or availability of an 13
	29	+	information technology system or information stored on, or transiting, 14
	30	+	an information technology system; 15
	31	+	(C) "Eligible business" means a business that has its principal 16
	32	+	business operations in Connecticut, has fewer than two hundred fifty 17 Substitute Bill No. 5300
30	33
31		-	Public Act No. 24-33 2 of 11
32	34
33		-	employees at the time of investment and not more than ten million
34		-	dollars in net income in the previous year;
35		-	(D) "Eligible capital" means an investment of cash by a taxpayer in an
36		-	invest CT fund that fully funds the purchase price of an equity interest
37		-	in the invest CT fund or an eligible debt instrument issued by an invest
38		-	CT fund, at par value or a premium, that (i) has an original maturity
39		-	date of at least five years after the date of issuance, (ii) has a repayment
40		-	schedule that is not faster than a level principal amortization over five
41		-	years, and (iii) has no interest, distribution or payment features tied to
42		-	the invest CT fund's profitability or the success of the investments;
43		-	(E) "Green technology business" means an eligible business with not
44		-	less than twenty-five per cent of its employment positions being
45		-	positions in which green technology is employed or developed and may
46		-	include the occupation codes identified as green jobs by the Department
47		-	of Economic and Community Development and the Labor Department
48		-	for such purposes;
49		-	(F) "Income year" means the income year as determined in chapter
50		-	207 for the taxpayer;
51		-	(G) "Invest CT fund" means a Connecticut partnership, corporation,
52		-	trust or limited liability company, whether organized on a profit or not-
53		-	for-profit basis, that (i) is managed by at least two principals or persons
54		-	that have at least four years of experience each in managing venture
55		-	capital or private equity funds, with at least fifty million dollars of such
56		-	funds from people unaffiliated with the manager, (ii) has received an
57		-	equity investment of capital other than eligible capital equal to no less
58		-	than five per cent of the total amount of the eligible capital to be invested
59		-	in such invest CT fund on or before June 30, 2015, and equal to not less
60		-	than ten per cent of the total amount of eligible capital to be invested in
61		-	such invest CT fund on or after September 1, 2015, and (iii) is not, or will
62		-	not be after the receipt of eligible capital, controlled by or under Substitute House Bill No. 5300
	35	+	LCO 2 of 11
63	36
64		-	Public Act No. 24-33 3 of 11
	37	+	employees at the time of investment and not more than ten million 18
	38	+	dollars in net income in the previous year; 19
	39	+	(D) "Eligible capital" means an investment of cash by a taxpayer in an 20
	40	+	invest CT fund that fully funds the purchase price of an equity interest 21
	41	+	in the invest CT fund or an eligible debt instrument issued by an invest 22
	42	+	CT fund, at par value or a premium, that (i) has an original maturity 23
	43	+	date of at least five years after the date of issuance, (ii) has a repayment 24
	44	+	schedule that is not faster than a level principal amortization over five 25
	45	+	years, and (iii) has no interest, distribution or payment features tied to 26
	46	+	the invest CT fund's profitability or the success of the investments; 27
	47	+	(E) "Green technology business" means an eligible business with not 28
	48	+	less than twenty-five per cent of its employment positions being 29
	49	+	positions in which green technology is employed or developed and may 30
	50	+	include the occupation codes identified as green jobs by the Department 31
	51	+	of Economic and Community Development and the Labor Department 32
	52	+	for such purposes; 33
	53	+	(F) "Income year" means the income year as determined in chapter 34
	54	+	207 for the taxpayer; 35
	55	+	(G) "Invest CT fund" means a Connecticut partnership, corporation, 36
	56	+	trust or limited liability company, whether organized on a profit or not-37
	57	+	for-profit basis, that (i) is managed by at least two principals or persons 38
	58	+	that have at least four years of experience each in managing venture 39
	59	+	capital or private equity funds, with at least fifty million dollars of such 40
	60	+	funds from people unaffiliated with the manager, (ii) has received an 41
	61	+	equity investment of capital other than eligible capital equal to no less 42
	62	+	than five per cent of the total amount of the eligible capital to be invested 43
	63	+	in such invest CT fund on or before June 30, 2015, and equal to not less 44
	64	+	than ten per cent of the total amount of eligible capital to be invested in 45
	65	+	such invest CT fund on or after September 1, 2015, and (iii) is not, or will 46
	66	+	not be after the receipt of eligible capital, controlled by or under 47
	67	+	common control with, one or more insurance companies. An investment 48
	68	+	of eligible capital shall not result in insurance company control unless 49 Substitute Bill No. 5300
65	69
66		-	common control with, one or more insurance companies. An investment
67		-	of eligible capital shall not result in insurance company control unless
68		-	such investment exceeds forty million dollars per taxpayer and results
69		-	in insurance companies having the right to vote more than fifty per cent
70		-	of the equity interests of the invest CT fund cash invested in such invest
71		-	CT fund, provided this provision shall not prohibit the interim control
72		-	of an invest CT fund by one or more insurance companies upon a breach
73		-	of any payment obligation of the invest CT fund or contractual or other
74		-	agreement by the invest CT fund that is designed to ensure compliance
75		-	with this section; and
76		-	(H) "Principal business operations" means at least eighty per cent of
77		-	the business organization's employees reside in the state or eighty per
78		-	cent of the business payroll is paid to individuals living in this state.
79		-	(2) A taxpayer that makes an investment of eligible capital shall, in
80		-	the year of investment, earn a vested credit against the premium tax
81		-	imposed pursuant to chapter 207 and section 38a-743. Such credit shall
82		-	be available as follows: (A) With respect to investments of eligible
83		-	capital made on or before June 30, 2015, (i) commencing with the tax
84		-	return due for the first to third, inclusive, tax years, zero per cent; (ii)
85		-	commencing with the tax return due for the fourth to seventh, inclusive,
86		-	tax years, not more than ten per cent; and (iii) commencing with the tax
87		-	return due for the eighth to tenth, inclusive, tax years, not more than
88		-	twenty per cent; and (B) with respect to investments of eligible capital
89		-	made on or after September 1, 2015, (i) commencing with the tax return
90		-	due for the first to fifth, inclusive, tax years, zero per cent; and (ii)
91		-	commencing with the tax return due for the sixth to tenth, inclusive, tax
92		-	years, not more than twenty per cent. The maximum amount of eligible
93		-	capital for which credits may be allowed under this subsection shall not
94		-	result in more than forty million dollars of tax credits being used in any
95		-	one year exclusive of any carried forward credits and no fund shall
96		-	apply for more than the total amount of credits available under this Substitute House Bill No. 5300
97	70
98		-	~~Public Act No. 24-33~~ 4 of 11
	71	+	LCO 3 of 11
99	72
100		-	section.
101		-	(3) (A) On or before July 1, 2010, the Commissioner of Economic and
102		-	Community Development shall begin to accept applications for
103		-	certification as an invest CT fund and for allocations of tax credits under
104		-	this subsection with allocation dates of June 30, 2015, or earlier. On and
105		-	after September 1, 2015, the commissioner shall accept applications for
106		-	certification as an invest CT fund and for allocations of tax credits under
107		-	this subsection with allocation dates of September 1, 2015, or later.
108		-	Applications shall include: [(A)] (i) The amount of eligible capital the
109		-	applicant will raise; [(B)] (ii) a nonrefundable application fee of seven
110		-	thousand five hundred dollars; [(C)] (iii) evidence of satisfaction of the
111		-	requirements of the definition of "invest CT fund" pursuant to
112		-	subparagraph (G) of subdivision (1) of this subsection; [(D)] (iv) an
113		-	affidavit by each taxpayer committing an investment of eligible capital;
114		-	[(E)] (v) a business plan detailing [(i)] (I) the approximate percentage of
115		-	eligible capital the applicant will invest in eligible businesses by the
116		-	third, fifth, seventh and ninth anniversaries of its allocation date, [(ii)]
117		-	(II) the industry segments listed by the North American Industrial
118		-	Classification System code and percentage of eligible capital in which
119		-	the applicant will invest, [(iii)] (III) the number of jobs that will be
120		-	created or retained as a result of the applicant's investments once all
121		-	eligible capital has been invested, [(iv)] (IV) the percentage of eligible
122		-	capital to be invested in eligible businesses primarily engaged in
123		-	conducting research and development or manufacturing, processing or
124		-	assembling technology–based products, and [(v)] (V) a revenue impact
125		-	assessment demonstrating that the applicant's business plan has a
126		-	revenue neutral or positive impact on the state; [(F)] (vi) a commitment
127		-	to invest at least twenty-five per cent of its eligible capital in green
128		-	technology businesses; [(G)] (vii) with respect to applications submitted
129		-	on or before June 30, 2015, a commitment to invest, by the third
130		-	anniversary of its allocation date, three per cent of its eligible capital in
131		-	preseed investments, and with respect to applications submitted on or Substitute House Bill No. 5300
	73	+	such investment exceeds forty million dollars per taxpayer and results 50
	74	+	in insurance companies having the right to vote more than fifty per cent 51
	75	+	of the equity interests of the invest CT fund cash invested in such invest 52
	76	+	CT fund, provided this provision shall not prohibit the interim control 53
	77	+	of an invest CT fund by one or more insurance companies upon a breach 54
	78	+	of any payment obligation of the invest CT fund or contractual or other 55
	79	+	agreement by the invest CT fund that is designed to ensure compliance 56
	80	+	with this section; and 57
	81	+	(H) "Principal business operations" means at least eighty per cent of 58
	82	+	the business organization's employees reside in the state or eighty per 59
	83	+	cent of the business payroll is paid to individuals living in this state. 60
	84	+	(2) A taxpayer that makes an investment of eligible capital shall, in 61
	85	+	the year of investment, earn a vested credit against the premium tax 62
	86	+	imposed pursuant to chapter 207 and section 38a-743. Such credit shall 63
	87	+	be available as follows: (A) With respect to investments of eligible 64
	88	+	capital made on or before June 30, 2015, (i) commencing with the tax 65
	89	+	return due for the first to third, inclusive, tax years, zero per cent; (ii) 66
	90	+	commencing with the tax return due for the fourth to seventh, inclusive, 67
	91	+	tax years, not more than ten per cent; and (iii) commencing with the tax 68
	92	+	return due for the eighth to tenth, inclusive, tax years, not more than 69
	93	+	twenty per cent; and (B) with respect to investments of eligible capital 70
	94	+	made on or after September 1, 2015, (i) commencing with the tax return 71
	95	+	due for the first to fifth, inclusive, tax years, zero per cent; and (ii) 72
	96	+	commencing with the tax return due for the sixth to tenth, inclusive, tax 73
	97	+	years, not more than twenty per cent. The maximum amount of eligible 74
	98	+	capital for which credits may be allowed under this subsection shall not 75
	99	+	result in more than forty million dollars of tax credits being used in any 76
	100	+	one year exclusive of any carried forward credits and no fund shall 77
	101	+	apply for more than the total amount of credits available under this 78
	102	+	section. 79
	103	+	(3) (A) On or before July 1, 2010, the Commissioner of Economic and 80
	104	+	Community Development shall begin to accept applications for 81
	105	+	certification as an invest CT fund and for allocations of tax credits under 82 Substitute Bill No. 5300
132	106
133		-	Public Act No. 24-33 5 of 11
134	107
135		-	after September 1, 2015, a commitment to invest, by the fourth
136		-	anniversary of the allocation date, seven per cent of its eligible capital in
137		-	preseed investments, in consultation with Connecticut Innovations,
138		-	Incorporated, pursuant to the corporation's program for preseed
139		-	financing established pursuant to section 32-41x; and [(H)] (viii) with
140		-	respect to applications submitted on or after September 1, 2015, a
141		-	commitment to invest at least three per cent of its eligible capital in
142		-	cybersecurity businesses and at least twenty-five per cent of its eligible
143		-	capital in eligible businesses located in municipalities with a population
144		-	greater than eighty thousand. The commissioner may require the
145		-	applicant to obtain a revenue impact assessment conducted by an
146		-	independent third party.
147		-	(B) (i) From October 1, 2024, to September 30, 2026, inclusive, an
148		-	applicant may submit to the commissioner a request, in such form and
149		-	manner prescribed by the commissioner, to consider as an eligible
150		-	business a business that does not have its principal business operations
151		-	in Connecticut. The commissioner may approve such a request if the
152		-	commissioner determines that such an approval would significantly
153		-	advance the objectives of the invest CT fund program, provided such
154		-	applicant complies with all other requirements under subparagraph (A)
155		-	of this subdivision.
156		-	(ii) Not later than January 1, 2026, the commissioner shall submit a
157		-	report, in accordance with the provisions of section 11-4a, on any
158		-	requests approved by the commissioner pursuant to subparagraph
159		-	(B)(i) of this subdivision during the period of October 1, 2024, to
160		-	September 30, 2025, inclusive, to the joint standing committee of the
161		-	General Assembly having cognizance of matters relating to commerce.
162		-	Not later than January 1, 2027, the commissioner shall submit a report,
163		-	in accordance with the provisions of section 11-4a, on any requests
164		-	approved by the commissioner pursuant to subparagraph (B)(i) of this
165		-	subdivision during the period of October 1, 2025, to September 30, 2026, Substitute House Bill No. 5300
	108	+	LCO 4 of 11
166	109
167		-	Public Act No. 24-33 6 of 11
	110	+	this subsection with allocation dates of June 30, 2015, or earlier. On and 83
	111	+	after September 1, 2015, the commissioner shall accept applications for 84
	112	+	certification as an invest CT fund and for allocations of tax credits under 85
	113	+	this subsection with allocation dates of September 1, 2015, or later. 86
	114	+	Applications shall include: [(A)] (i) The amount of eligible capital the 87
	115	+	applicant will raise; [(B)] (ii) a nonrefundable application fee of seven 88
	116	+	thousand five hundred dollars; [(C)] (iii) evidence of satisfaction of the 89
	117	+	requirements of the definition of "invest CT fund" pursuant to 90
	118	+	subparagraph (G) of subdivision (1) of this subsection; [(D)] (iv) an 91
	119	+	affidavit by each taxpayer committing an investment of eligible capital; 92
	120	+	[(E)] (v) a business plan detailing [(i)] (I) the approximate percentage of 93
	121	+	eligible capital the applicant will invest in eligible businesses by the 94
	122	+	third, fifth, seventh and ninth anniversaries of its allocation date, [(ii)] 95
	123	+	(II) the industry segments listed by the North American Industrial 96
	124	+	Classification System code and percentage of eligible capital in which 97
	125	+	the applicant will invest, [(iii)] (III) the number of jobs that will be 98
	126	+	created or retained as a result of the applicant's investments once all 99
	127	+	eligible capital has been invested, [(iv)] (IV) the percentage of eligible 100
	128	+	capital to be invested in eligible businesses primarily engaged in 101
	129	+	conducting research and development or manufacturing, processing or 102
	130	+	assembling technology–based products, and [(v)] (V) a revenue impact 103
	131	+	assessment demonstrating that the applicant's business plan has a 104
	132	+	revenue neutral or positive impact on the state; [(F)] (vi) a commitment 105
	133	+	to invest at least twenty-five per cent of its eligible capital in green 106
	134	+	technology businesses; [(G)] (vii) with respect to applications submitted 107
	135	+	on or before June 30, 2015, a commitment to invest, by the third 108
	136	+	anniversary of its allocation date, three per cent of its eligible capital in 109
	137	+	preseed investments, and with respect to applications submitted on or 110
	138	+	after September 1, 2015, a commitment to invest, by the fourth 111
	139	+	anniversary of the allocation date, seven per cent of its eligible capital in 112
	140	+	preseed investments, in consultation with Connecticut Innovations, 113
	141	+	Incorporated, pursuant to the corporation's program for preseed 114
	142	+	financing established pursuant to section 32-41x; and [(H)] (viii) with 115
	143	+	respect to applications submitted on or after September 1, 2015, a 116
	144	+	commitment to invest at least three per cent of its eligible capital in 117 Substitute Bill No. 5300
168	145
169		-	inclusive, to the joint standing committee of the General Assembly
170		-	having cognizance of matters relating to commerce. Such reports shall
171		-	include, but need not be limited to, a list of the applicants whose
172		-	requests were approved by the commissioner and an analysis of the
173		-	benefit to and impact on the state resulting from such approvals.
174		-	(4) Applications for tax credits pursuant to this subsection shall be
175		-	accepted and approved on a first-come, first-served basis with all
176		-	applications received on the same date deemed to be received
177		-	simultaneously and approvals being made on a pro rata basis if such
178		-	applications exceed the amount of remaining credits.
179		-	(5) The commissioner shall issue an allocation of credits subject to
180		-	confirmation by the fund on a form prescribed by the commissioner that
181		-	an investment of eligible capital was received within five business days.
182		-	If an invest CT fund does not receive an investment of eligible capital
183		-	equaling the amount of credits against the tax imposed under chapter
184		-	207 and section 38a-743 allocated to a taxpayer, for which it filed an
185		-	affidavit with its application prior to the fifth business day after receipt
186		-	of certification, the invest CT fund shall notify the commissioner by
187		-	overnight common carrier delivery service and that portion of eligible
188		-	capital allocated to the insurance company shall be forfeited. Such invest
189		-	CT fund and forfeiting taxpayer shall each be assessed a twenty-five-
190		-	thousand-dollar administrative penalty. The commissioner shall
191		-	reallocate the forfeited eligible capital among all other remaining
192		-	taxpayers that invested eligible capital.
193		-	(6) To continue to be certified, an invest CT fund shall (A) be in
194		-	compliance with the investment parameters set forth in its business
195		-	plan, provided an invest CT fund may apply to the commissioner to
196		-	amend its business plan based on unavoidable or reasonably
197		-	unanticipated changes to various conditions, including, but not limited
198		-	to, the general economic climate of the state or particular sectors of the
199		-	economy, technological advances and high employment and revenue Substitute House Bill No. 5300
200	146
201		-	~~Public Act No. 24-33~~ 7 of 11
	147	+	LCO 5 of 11
202	148
203		-	growth opportunities, with approval for such changes not to be
204		-	unreasonably withheld by the commissioner; (B) be in compliance with
205		-	the revenue impact assessment provided in the application
206		-	demonstrating that the fund's business plan continues to have a revenue
207		-	neutral or positive impact on the state; (C) have invested one hundred
208		-	per cent of its eligible capital in eligible businesses by the tenth
209		-	anniversary of its allocation date, with a minimum of twenty-five per
210		-	cent of eligible capital invested in green technology businesses; (D) for
211		-	allocation dates of June 30, 2015, or earlier: (i) Have invested sixty per
212		-	cent of its eligible capital in eligible businesses by the fourth anniversary
213		-	of such allocation date, and (ii) have invested a minimum of three per
214		-	cent of such eligible capital in preseed investments, as described in
215		-	subparagraph (A) of subdivision (3) of this subsection, by the third
216		-	anniversary of such allocation date; and (E) for allocation dates of
217		-	September 1, 2015, or later: (i) Have invested sixty per cent of its eligible
218		-	capital in eligible businesses by the sixth anniversary of such allocation
219		-	date, (ii) have invested a minimum of seven per cent of its eligible capital
220		-	in preseed investments, as described in subparagraph (A) of subdivision
221		-	(3) of this subsection, by the fourth anniversary of such allocation date,
222		-	(iii) have invested a minimum of three per cent of its eligible capital in
223		-	cybersecurity businesses, and (iv) have invested a minimum of twenty-
224		-	five per cent of its eligible capital in eligible businesses located in
225		-	municipalities with a population greater than eighty thousand. An
226		-	invest CT fund shall only invest eligible capital in eligible businesses,
227		-	bank deposits, certificates of deposit or other fixed income securities and
228		-	may not invest more than fifteen per cent of its eligible capital in any
229		-	one eligible business without prior approval of the commissioner.
230		-	(7) Not later than January thirty-first annually, each invest CT fund
231		-	shall report to the commissioner: (A) The amount of eligible capital
232		-	remaining at the end of the preceding year; (B) each investment in an
233		-	eligible business during the preceding year and, with respect to each
234		-	eligible business, its location and North American Industrial Substitute House Bill No. 5300
	149	+	cybersecurity businesses and at least twenty-five per cent of its eligible 118
	150	+	capital in eligible businesses located in municipalities with a population 119
	151	+	greater than eighty thousand. The commissioner may require the 120
	152	+	applicant to obtain a revenue impact assessment conducted by an 121
	153	+	independent third party. 122
	154	+	(B) (i) From October 1, 2024, to September 30, 2026, inclusive, an 123
	155	+	applicant may submit to the commissioner a request, in such form and 124
	156	+	manner prescribed by the commissioner, to consider as an eligible 125
	157	+	business a business that does not have its principal business operations 126
	158	+	in Connecticut. The commissioner may approve such a request if the 127
	159	+	commissioner determines that such an approval would significantly 128
	160	+	advance the objectives of the invest CT fund program, provided such 129
	161	+	business complies with all other requirements under subparagraph (A) 130
	162	+	of this subdivision. 131
	163	+	(ii) Not later than January 1, 2026, the commissioner shall submit a 132
	164	+	report, in accordance with the provisions of section 11-4a, on any 133
	165	+	requests approved by the commissioner pursuant to subparagraph 134
	166	+	(B)(i) of this subdivision during the period of October 1, 2024, to 135
	167	+	September 30, 2025, inclusive, to the joint standing committee of the 136
	168	+	General Assembly having cognizance of matters relating to commerce. 137
	169	+	Not later than January 1, 2027, the commissioner shall submit a report, 138
	170	+	in accordance with the provisions of section 11-4a, on any requests 139
	171	+	approved by the commissioner pursuant to subparagraph (B)(i) of this 140
	172	+	subdivision during the period of October 1, 2025, to September 30, 2026, 141
	173	+	inclusive, to the joint standing committee of the General Assembly 142
	174	+	having cognizance of matters relating to commerce. Such reports shall 143
	175	+	include, but need not be limited to, a list of the applicants whose 144
	176	+	requests were approved by the commissioner and an analysis of the 145
	177	+	benefit to and impact on the state resulting from such approvals. 146
	178	+	(4) Applications for tax credits pursuant to this subsection shall be 147
	179	+	accepted and approved on a first-come, first-served basis with all 148
	180	+	applications received on the same date deemed to be received 149
	181	+	simultaneously and approvals being made on a pro rata basis if such 150 Substitute Bill No. 5300
235	182
236		-	Public Act No. 24-33 8 of 11
237	183
238		-	Classification System code; (C) the percentage of eligible capital
239		-	invested in green technology businesses, preseed investments,
240		-	cybersecurity businesses and eligible businesses located in
241		-	municipalities with a population greater than eighty thousand; and (D)
242		-	distributions made by the invest CT fund in the preceding year. In the
243		-	annual report due in the third, fifth, seventh and ninth years after its
244		-	allocation date, each invest CT fund shall also report to the
245		-	commissioner its compliance with the investment parameters set forth
246		-	in its business plan and the revenue impact assessment provided in the
247		-	application demonstrating that the fund's business plan continues to
248		-	have a revenue neutral or positive impact on the state. Each invest CT
249		-	fund shall provide to the commissioner annual audited financial
250		-	statements.
251		-	(8) To make a distribution or payment, an invest CT fund certified by
252		-	the commissioner on or before June 30, 2015, must have invested one
253		-	hundred per cent of its eligible capital in eligible businesses, with a
254		-	minimum of twenty-five per cent of eligible capital invested in green
255		-	technology businesses and a minimum of three per cent of eligible
256		-	capital invested in preseed investment, as described in subparagraph
257		-	(A) of subdivision (3) of this subsection, with principal business
258		-	operations in this state at the time of such determination except: (A)
259		-	Distributions related to the payment of any projected increase in federal
260		-	or state taxes, including penalties and interest related to state and
261		-	federal income taxes, of the equity owners of the invest CT fund
262		-	resulting from the earnings or other tax liability of the invest CT fund to
263		-	the extent that the increase is related to the ownership, management or
264		-	operation of the invest CT fund; (B) payments of interest and principal
265		-	on the debt of the invest CT fund, provided after such payment, the
266		-	invest CT fund still has cash and other marketable securities in an
267		-	amount that, when added to the cumulative investments it has made in
268		-	eligible recipients, equals not less than sixty per cent of the eligible
269		-	capital invested in such reinvestment fund; or (C) payments related to Substitute House Bill No. 5300
	184	+	LCO 6 of 11
270	185
271		-	Public Act No. 24-33 9 of 11
	186	+	applications exceed the amount of remaining credits. 151
	187	+	(5) The commissioner shall issue an allocation of credits subject to 152
	188	+	confirmation by the fund on a form prescribed by the commissioner that 153
	189	+	an investment of eligible capital was received within five business days. 154
	190	+	If an invest CT fund does not receive an investment of eligible capital 155
	191	+	equaling the amount of credits against the tax imposed under chapter 156
	192	+	207 and section 38a-743 allocated to a taxpayer, for which it filed an 157
	193	+	affidavit with its application prior to the fifth business day after receipt 158
	194	+	of certification, the invest CT fund shall notify the commissioner by 159
	195	+	overnight common carrier delivery service and that portion of eligible 160
	196	+	capital allocated to the insurance company shall be forfeited. Such invest 161
	197	+	CT fund and forfeiting taxpayer shall each be assessed a twenty-five-162
	198	+	thousand-dollar administrative penalty. The commissioner shall 163
	199	+	reallocate the forfeited eligible capital among all other remaining 164
	200	+	taxpayers that invested eligible capital. 165
	201	+	(6) To continue to be certified, an invest CT fund shall (A) be in 166
	202	+	compliance with the investment parameters set forth in its business 167
	203	+	plan, provided an invest CT fund may apply to the commissioner to 168
	204	+	amend its business plan based on unavoidable or reasonably 169
	205	+	unanticipated changes to various conditions, including, but not limited 170
	206	+	to, the general economic climate of the state or particular sectors of the 171
	207	+	economy, technological advances and high employment and revenue 172
	208	+	growth opportunities, with approval for such changes not to be 173
	209	+	unreasonably withheld by the commissioner; (B) be in compliance with 174
	210	+	the revenue impact assessment provided in the application 175
	211	+	demonstrating that the fund's business plan continues to have a revenue 176
	212	+	neutral or positive impact on the state; (C) have invested one hundred 177
	213	+	per cent of its eligible capital in eligible businesses by the tenth 178
	214	+	anniversary of its allocation date, with a minimum of twenty-five per 179
	215	+	cent of eligible capital invested in green technology businesses; (D) for 180
	216	+	allocation dates of June 30, 2015, or earlier: (i) Have invested sixty per 181
	217	+	cent of its eligible capital in eligible businesses by the fourth anniversary 182
	218	+	of such allocation date, and (ii) have invested a minimum of three per 183
	219	+	cent of such eligible capital in preseed investments, as described in 184 Substitute Bill No. 5300
272	220
273		-	the reasonable costs and expenses of forming, syndicating, managing
274		-	and operating the fund, provided the distribution or payment is not
275		-	made directly or indirectly to an insurance company that has invested
276		-	eligible capital in the invest CT fund, including: (i) Reasonable and
277		-	necessary fees paid for professional services, including legal and
278		-	accounting services, related to the formation and operation of the invest
279		-	CT fund; and (ii) an annual management fee in an amount that does not
280		-	exceed two and one-half per cent of the eligible capital of the invest CT
281		-	fund. The state shall receive a share of any distribution, except as set
282		-	forth in subparagraphs (A), (B) and (C) of this subdivision and
283		-	distributions made to return any equity capital invested in the invest CT
284		-	fund that is not eligible capital, in the following percentages: (I) Ten per
285		-	cent when less than eighty per cent but more than sixty per cent of the
286		-	jobs set forth in the invest CT fund's business plan are created or
287		-	retained, and (II) twenty per cent when sixty per cent or less of the jobs
288		-	set forth in the invest CT fund's business plan are created or retained.
289		-	(9) To make a distribution or payment, an invest CT fund certified by
290		-	the commissioner on or after September 1, 2015, must have invested one
291		-	hundred per cent of its eligible capital in eligible businesses, with a
292		-	minimum of twenty-five per cent of eligible capital invested in green
293		-	technology businesses, a minimum of seven per cent of eligible capital
294		-	invested in preseed investments, as described in subparagraph (A) of
295		-	subdivision (3) of this subsection, a minimum of three per cent of eligible
296		-	capital invested in cybersecurity businesses, and a minimum of twenty-
297		-	five per cent of eligible capital invested in businesses located in
298		-	municipalities with a population greater than eighty thousand, with
299		-	principal business operations in this state at the time of such
300		-	determination, except: (A) Distributions related to the payment of any
301		-	projected increase in federal or state taxes, including penalties and
302		-	interest related to state and federal income taxes, of the equity owners
303		-	of the invest CT fund resulting from the earnings or other tax liability of
304		-	the invest CT fund to the extent that the increase is related to the Substitute House Bill No. 5300
305	221
306		-	~~Public Act No. 24-33~~ 10 of 11
	222	+	LCO 7 of 11
307	223
308		-	ownership, management or operation of the invest CT fund; (B)
309		-	payments of interest and principal on the debt of the invest CT fund,
310		-	provided after such payment, the invest CT fund still has cash and other
311		-	marketable securities in an amount that, when added to the cumulative
312		-	investments it has made in eligible recipients, equals not less than sixty
313		-	per cent of the eligible capital invested in such reinvestment fund; or (C)
314		-	payments related to the reasonable costs and expenses of forming,
315		-	syndicating, managing and operating the fund, provided the
316		-	distribution or payment is not made directly or indirectly to an
317		-	insurance company that has invested eligible capital in the invest CT
318		-	fund, including: (i) Reasonable and necessary fees paid for professional
319		-	services, including legal and accounting services, related to the
320		-	formation and operation of the invest CT fund; and (ii) an annual
321		-	management fee in an amount that does not exceed two and one-half
322		-	per cent of the eligible capital of the invest CT fund. The state shall
323		-	receive a share of any distribution, except as set forth in subparagraphs
324		-	(A), (B) and (C) of this subdivision and distributions made to return any
325		-	equity capital invested in the invest CT fund that is not eligible capital,
326		-	in the following percentages: (I) Ten per cent when less than eighty per
327		-	cent but more than sixty per cent of the jobs set forth in the invest CT
328		-	fund's business plan are created or retained, and (II) twenty per cent
329		-	when sixty per cent or less of the jobs set forth in the invest CT fund's
330		-	business plan are created or retained.
331		-	(10) The commissioner shall review each annual report to ensure
332		-	compliance with subdivisions (6), (7), (8) and (9) of this subsection. A
333		-	material variation from subdivision (6), (7), (8) or (9) of this subsection
334		-	is grounds for decertification of the invest CT fund. If the commissioner
335		-	determines that an invest CT fund is not in compliance with subdivision
336		-	(6), (7), (8) or (9) of this subsection or the investment parameters of its
337		-	business plan, the commissioner shall notify the officers of the invest CT
338		-	fund, in writing, that the invest CT fund may be subject to
339		-	decertification after the one hundred twentieth day after the date of Substitute House Bill No. 5300
	224	+	subparagraph (A) of subdivision (3) of this subsection, by the third 185
	225	+	anniversary of such allocation date; and (E) for allocation dates of 186
	226	+	September 1, 2015, or later: (i) Have invested sixty per cent of its eligible 187
	227	+	capital in eligible businesses by the sixth anniversary of such allocation 188
	228	+	date, (ii) have invested a minimum of seven per cent of its eligible capital 189
	229	+	in preseed investments, as described in subparagraph (A) of subdivision 190
	230	+	(3) of this subsection, by the fourth anniversary of such allocation date, 191
	231	+	(iii) have invested a minimum of three per cent of its eligible capital in 192
	232	+	cybersecurity businesses, and (iv) have invested a minimum of twenty-193
	233	+	five per cent of its eligible capital in eligible businesses located in 194
	234	+	municipalities with a population greater than eighty thousand. An 195
	235	+	invest CT fund shall only invest eligible capital in eligible businesses, 196
	236	+	bank deposits, certificates of deposit or other fixed income securities and 197
	237	+	may not invest more than fifteen per cent of its eligible capital in any 198
	238	+	one eligible business without prior approval of the commissioner. 199
	239	+	(7) Not later than January thirty-first annually, each invest CT fund 200
	240	+	shall report to the commissioner: (A) The amount of eligible capital 201
	241	+	remaining at the end of the preceding year; (B) each investment in an 202
	242	+	eligible business during the preceding year and, with respect to each 203
	243	+	eligible business, its location and North American Industrial 204
	244	+	Classification System code; (C) the percentage of eligible capital 205
	245	+	invested in green technology businesses, preseed investments, 206
	246	+	cybersecurity businesses and eligible businesses located in 207
	247	+	municipalities with a population greater than eighty thousand; and (D) 208
	248	+	distributions made by the invest CT fund in the preceding year. In the 209
	249	+	annual report due in the third, fifth, seventh and ninth years after its 210
	250	+	allocation date, each invest CT fund shall also report to the 211
	251	+	commissioner its compliance with the investment parameters set forth 212
	252	+	in its business plan and the revenue impact assessment provided in the 213
	253	+	application demonstrating that the fund's business plan continues to 214
	254	+	have a revenue neutral or positive impact on the state. Each invest CT 215
	255	+	fund shall provide to the commissioner annual audited financial 216
	256	+	statements. 217
	257	+	(8) To make a distribution or payment, an invest CT fund certified by 218 Substitute Bill No. 5300
340	258
341		-	Public Act No. 24-33 11 of 11
342	259
343		-	mailing the notice, unless the deficiencies are waived by the
344		-	commissioner or are corrected and the invest CT fund returns to
345		-	compliance with subdivisions (6), (7), (8) and (9) of this subsection.
346		-	(11) Decertification of an invest CT fund shall cause the forfeiture of
347		-	future credits against the tax imposed by chapter 207 and section 38a-
348		-	743 to be claimed with respect to an invest CT fund when (A) such
349		-	decertification occurs on or before the fourth anniversary of an
350		-	allocation date of June 30, 2015, or earlier, or on or before the sixth
351		-	anniversary of an allocation date of September 1, 2015, or later, and (B)
352		-	such fund has invested less than sixty per cent of its eligible capital in
353		-	eligible businesses by said anniversary. The commissioner shall send
354		-	written notice to the last-known address of each taxpayer whose credit
355		-	against the tax imposed by chapter 207 is subject to recapture or
356		-	forfeiture.
	260	+	LCO 8 of 11
	261	+
	262	+	the commissioner on or before June 30, 2015, must have invested one 219
	263	+	hundred per cent of its eligible capital in eligible businesses, with a 220
	264	+	minimum of twenty-five per cent of eligible capital invested in green 221
	265	+	technology businesses and a minimum of three per cent of eligible 222
	266	+	capital invested in preseed investment, as described in subparagraph 223
	267	+	(A) of subdivision (3) of this subsection, with principal business 224
	268	+	operations in this state at the time of such determination except: (A) 225
	269	+	Distributions related to the payment of any projected increase in federal 226
	270	+	or state taxes, including penalties and interest related to state and 227
	271	+	federal income taxes, of the equity owners of the invest CT fund 228
	272	+	resulting from the earnings or other tax liability of the invest CT fund to 229
	273	+	the extent that the increase is related to the ownership, management or 230
	274	+	operation of the invest CT fund; (B) payments of interest and principal 231
	275	+	on the debt of the invest CT fund, provided after such payment, the 232
	276	+	invest CT fund still has cash and other marketable securities in an 233
	277	+	amount that, when added to the cumulative investments it has made in 234
	278	+	eligible recipients, equals not less than sixty per cent of the eligible 235
	279	+	capital invested in such reinvestment fund; or (C) payments related to 236
	280	+	the reasonable costs and expenses of forming, syndicating, managing 237
	281	+	and operating the fund, provided the distribution or payment is not 238
	282	+	made directly or indirectly to an insurance company that has invested 239
	283	+	eligible capital in the invest CT fund, including: (i) Reasonable and 240
	284	+	necessary fees paid for professional services, including legal and 241
	285	+	accounting services, related to the formation and operation of the invest 242
	286	+	CT fund; and (ii) an annual management fee in an amount that does not 243
	287	+	exceed two and one-half per cent of the eligible capital of the invest CT 244
	288	+	fund. The state shall receive a share of any distribution, except as set 245
	289	+	forth in subparagraphs (A), (B) and (C) of this subdivision and 246
	290	+	distributions made to return any equity capital invested in the invest CT 247
	291	+	fund that is not eligible capital, in the following percentages: (I) Ten per 248
	292	+	cent when less than eighty per cent but more than sixty per cent of the 249
	293	+	jobs set forth in the invest CT fund's business plan are created or 250
	294	+	retained, and (II) twenty per cent when sixty per cent or less of the jobs 251
	295	+	set forth in the invest CT fund's business plan are created or retained. 252 Substitute Bill No. 5300
	296	+
	297	+
	298	+	LCO 9 of 11
	299	+
	300	+	(9) To make a distribution or payment, an invest CT fund certified by 253
	301	+	the commissioner on or after September 1, 2015, must have invested one 254
	302	+	hundred per cent of its eligible capital in eligible businesses, with a 255
	303	+	minimum of twenty-five per cent of eligible capital invested in green 256
	304	+	technology businesses, a minimum of seven per cent of eligible capital 257
	305	+	invested in preseed investments, as described in subparagraph (A) of 258
	306	+	subdivision (3) of this subsection, a minimum of three per cent of eligible 259
	307	+	capital invested in cybersecurity businesses, and a minimum of twenty-260
	308	+	five per cent of eligible capital invested in businesses located in 261
	309	+	municipalities with a population greater than eighty thousand, with 262
	310	+	principal business operations in this state at the time of such 263
	311	+	determination, except: (A) Distributions related to the payment of any 264
	312	+	projected increase in federal or state taxes, including penalties and 265
	313	+	interest related to state and federal income taxes, of the equity owners 266
	314	+	of the invest CT fund resulting from the earnings or other tax liability of 267
	315	+	the invest CT fund to the extent that the increase is related to the 268
	316	+	ownership, management or operation of the invest CT fund; (B) 269
	317	+	payments of interest and principal on the debt of the invest CT fund, 270
	318	+	provided after such payment, the invest CT fund still has cash and other 271
	319	+	marketable securities in an amount that, when added to the cumulative 272
	320	+	investments it has made in eligible recipients, equals not less than sixty 273
	321	+	per cent of the eligible capital invested in such reinvestment fund; or (C) 274
	322	+	payments related to the reasonable costs and expenses of forming, 275
	323	+	syndicating, managing and operating the fund, provided the 276
	324	+	distribution or payment is not made directly or indirectly to an 277
	325	+	insurance company that has invested eligible capital in the invest CT 278
	326	+	fund, including: (i) Reasonable and necessary fees paid for professional 279
	327	+	services, including legal and accounting services, related to the 280
	328	+	formation and operation of the invest CT fund; and (ii) an annual 281
	329	+	management fee in an amount that does not exceed two and one-half 282
	330	+	per cent of the eligible capital of the invest CT fund. The state shall 283
	331	+	receive a share of any distribution, except as set forth in subparagraphs 284
	332	+	(A), (B) and (C) of this subdivision and distributions made to return any 285
	333	+	equity capital invested in the invest CT fund that is not eligible capital, 286
	334	+	in the following percentages: (I) Ten per cent when less than eighty per 287 Substitute Bill No. 5300
	335	+
	336	+
	337	+	LCO 10 of 11
	338	+
	339	+	cent but more than sixty per cent of the jobs set forth in the invest CT 288
	340	+	fund's business plan are created or retained, and (II) twenty per cent 289
	341	+	when sixty per cent or less of the jobs set forth in the invest CT fund's 290
	342	+	business plan are created or retained. 291
	343	+	(10) The commissioner shall review each annual report to ensure 292
	344	+	compliance with subdivisions (6), (7), (8) and (9) of this subsection. A 293
	345	+	material variation from subdivision (6), (7), (8) or (9) of this subsection 294
	346	+	is grounds for decertification of the invest CT fund. If the commissioner 295
	347	+	determines that an invest CT fund is not in compliance with subdivision 296
	348	+	(6), (7), (8) or (9) of this subsection or the investment parameters of its 297
	349	+	business plan, the commissioner shall notify the officers of the invest CT 298
	350	+	fund, in writing, that the invest CT fund may be subject to 299
	351	+	decertification after the one hundred twentieth day after the date of 300
	352	+	mailing the notice, unless the deficiencies are waived by the 301
	353	+	commissioner or are corrected and the invest CT fund returns to 302
	354	+	compliance with subdivisions (6), (7), (8) and (9) of this subsection. 303
	355	+	(11) Decertification of an invest CT fund shall cause the forfeiture of 304
	356	+	future credits against the tax imposed by chapter 207 and section 38a-305
	357	+	743 to be claimed with respect to an invest CT fund when (A) such 306
	358	+	decertification occurs on or before the fourth anniversary of an 307
	359	+	allocation date of June 30, 2015, or earlier, or on or before the sixth 308
	360	+	anniversary of an allocation date of September 1, 2015, or later, and (B) 309
	361	+	such fund has invested less than sixty per cent of its eligible capital in 310
	362	+	eligible businesses by said anniversary. The commissioner shall send 311
	363	+	written notice to the last-known address of each taxpayer whose credit 312
	364	+	against the tax imposed by chapter 207 is subject to recapture or 313
	365	+	forfeiture. 314
	366	+	This act shall take effect as follows and shall amend the following
	367	+	sections:
	368	+
	369	+	Section 1 October 1, 2024 38a-88a(c)
	370	+	Substitute Bill No. 5300
	371	+
	372	+
	373	+	LCO 11 of 11
	374	+
	375	+	Statement of Legislative Commissioners:
	376	+	Throughout Subdiv. (3)(B)(ii), "section 11-4a of the general statutes,"
	377	+	was changed to "section 11-4a," for consistency with standard drafting
	378	+	conventions.
	379	+
	380	+	CE Joint Favorable Subst.
357	381