Connecticut 2025 Regular Session

Connecticut Senate Bill SB01263 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1
2	2
3		-	LCO 1 of 5
	3	+	LCO No. 4182 1 of 6
4	4
5		-	General Assembly ~~Substitute~~ Bill No. 1263
	5	+	General Assembly Raised Bill No. 1263
6	6		January Session, 2025
	7	+	LCO No. 4182
7	8
	9	+
	10	+	Referred to Committee on HOUSING
	11	+
	12	+
	13	+	Introduced by:
	14	+	(HSG)
8	15
9	16
10	17
11	18
12	19		AN ACT CONCERNING TAX CREDITS FOR THE CONVERSION OF
13	20		COMMERCIAL PROPERTIES.
14	21		Be it enacted by the Senate and House of Representatives in General
15	22		Assembly convened:
16	23
17	24		Section 1. (NEW) (Effective July 1, 2025, and applicable to taxable years 1
18	25		commencing on and after July 1, 2025) (a) As used in this section: 2
19	26		(1) "Affordable housing" has the same meaning as provided in section 3
20	27		8-39a of the general statutes; 4
21	28		(2) "Commercial building" means a structure primarily designed or 5
22	29		used for nonresidential purposes, including, but not limited to, hotels, 6
23		-	retail space, office space or an industrial building; 7
	30	+	retail space or office space but does not include an industrial building; 7
24	31		(3) "Commissioner" means the Commissioner of Housing; 8
25	32		(4) "Conversion plan" means any construction plan and specifications 9
26	33		for the proposed conversion of a commercial building into a residential 10
27	34		development that contains sufficient detail to enable the commissioner 11
28		-	to evaluate compliance with the standards developed pursuant to 12
29		-	subsections (c) and (k) of this section; 13
30		-	(5) "Dwelling unit" has the same meaning as provided in section 47a-14
31		-	1 of the general statutes; 15 Substitute Bill No. 1263
	35	+	to evaluate compliance with the standards developed under the 12
	36	+	provisions of subsections (c) and (k) of this section; 13
	37	+	Raised Bill No. 1263
32	38
33	39
34		-	LCO 2 of 5
35	40
	41	+	LCO No. 4182 2 of 6
	42	+
	43	+	(5) "Dwelling unit" has the same meaning as provided in section 47a-14
	44	+	1 of the general statutes; 15
36	45		(6) "Industrial building" means a structure that is used primarily for 16
37	46		industrial activity and that is generally not open to the public, including 17
38	47		but not limited to, warehouses, factories and storage facilities; 18
39	48		(7) "Nonprofit corporation" means a nonprofit corporation 19
40	49		incorporated pursuant to chapter 602 of the general statutes or any 20
41	50		predecessor statutes thereto, and having as one of its purposes the 21
42	51		construction, conversion, ownership or operation of housing; 22
43	52		(8) "Owner" means (A) any taxpayer filing a state of Connecticut tax 23
44	53		return who possesses title to a commercial building, or prospective title 24
45	54		in the form of a purchase agreement or option to purchase a commercial 25
46	55		building to be converted into a residential development, or (B) a 26
47	56		nonprofit corporation that possesses such title or prospective title; 27
48	57		(9) "Qualified conversion expenditures" means any costs incurred for 28
49	58		the physical construction involved in the conversion of a commercial 29
50	59		building into a residential development. "Qualified conversion 30
51	60		expenditures" does not include: (A) The owner's personal labor, (B) the 31
52	61		cost of site improvements, unless to provide building access to persons 32
53	62		with disabilities, (C) the cost of a new addition, except as may be 33
54	63		required to comply with any provision of the State Building Code, State 34
55	64		Fire Prevention Code or the State Fire Safety Code, (D) any cost 35
56	65		associated with the conversion of an outbuilding, unless such building 36
57	66		contains one or more dwelling units, and (E) any nonconstruction cost 37
58	67		such as architectural fees, legal fees and financing fees; and 38
59	68		(10) "Residential development" means a structure that contains one 39
60	69		or more dwelling units. 40
61	70		(b) Not later than January 1, 2026, the Commissioner of Housing shall 41
62	71		establish a program to administer a system of tax credit vouchers within 42
63	72		the resources, requirements and purposes of this section for owners 43
	73	+	Raised Bill No. 1263
	74	+
	75	+
	76	+
	77	+	LCO No. 4182 3 of 6
	78	+
64	79		converting commercial buildings into residential developments or 44
65	80		taxpayers making contributions that are qualified conversion 45
66	81		expenditures. Any owner eligible to apply for a tax credit voucher 46
67		-	pursuant to this section shall be eligible for such voucher in an amount 47 Substitute Bill No. 1263
68		-
69		-
70		-	LCO 3 of 5
71		-
	82	+	pursuant to this section shall be eligible for such voucher in an amount 47
72	83		equal to ten per cent of the total qualified conversion expenditure. 48
73	84		(c) Not later than January 1, 2026, the commissioner shall develop 49
74	85		standards for the approval of tax credit vouchers for the conversion of 50
75	86		commercial buildings into residential developments for which a tax 51
76	87		credit voucher is sought. Any such standards shall take into account 52
77	88		whether such conversion will create or preserve units for affordable 53
78	89		housing. The commissioner shall post such regulations on the 54
79	90		Department of Housing's Internet web site. 55
80	91		(d) Prior to beginning any conversion work on a commercial building 56
81		-	for which an owner will seek a tax credit voucher ~~pursuant to~~ this 57
82		-	~~section,~~ such owner shall submit to the commissioner (1) a conversion 58
83		-	~~plan for~~ a determination of whether such plan meets any standards 59
84		-	~~developed pursuant to~~ subsections (c) and (k) of this section, (2) an 60
	92	+	for which an owner will seek a tax credit voucher under this section, 57
	93	+	such owner shall submit to the commissioner (1) a conversion plan for 58
	94	+	a determination of whether such plan meets any standards developed 59
	95	+	under the provisions of subsections (c) and (k) of this section, (2) an 60
85	96		estimate of the qualified conversion expenditures made, and (3) any 61
86	97		other information prescribed by the commissioner. Not later than sixty 62
87	98		days after receipt of such plan, estimate and other information, the 63
88	99		commissioner shall determine whether such plan conforms to the 64
89		-	standards developed pursuant to subsections (c) and (k) of this section. 65
90		-	(e) If the commissioner certifies that the conversion plan conforms to 66
91		-	the standards developed pursuant to subsections (c) and (k) of this 67
92		-	section, the commissioner shall reserve for the benefit of the owner an 68
93		-	allocation for a tax credit equivalent to ten per cent of the projected 69
94		-	qualified conversion expenditures. 70
95		-	(f) Following the completion of the conversion of a commercial 71
96		-	building into a residential development, the owner shall notify the 72
97		-	commissioner that such conversion has been completed. The owner 73
98		-	shall provide the commissioner with documentation of any work 74
99		-	performed on the commercial building and shall certify the cost 75
100		-	incurred in converting such building into a residential development. 76
101		-	The commissioner shall review such conversion work and verify its 77
102		-	compliance with the conversion plan. Following such verification, the 78
103		-	commissioner shall issue a tax credit voucher to either the owner 79 Substitute Bill No. 1263
	100	+	standards developed under the provisions of subsections (c) and (k) of 65
	101	+	this section. 66
	102	+	(e) If the commissioner certifies that the conversion plan conforms to 67
	103	+	the standards developed under the provisions of subsections (c) and (k) 68
	104	+	of this section, the commissioner shall reserve for the benefit of the 69
	105	+	owner an allocation for a tax credit equivalent to ten per cent of the 70
	106	+	projected qualified conversion expenditures. 71
	107	+	(f) Following the completion of the conversion of a commercial 72
	108	+	building into a residential development, the owner shall notify the 73
	109	+	commissioner that such conversion has been completed. The owner 74
	110	+	Raised Bill No. 1263
104	111
105	112
106		-	LCO 4 of 5
107	113
108		-	converting the commercial building or to the taxpayer named by the 80
109		-	owner as contributing to the conversion. The tax credit voucher shall be 81
110		-	in an amount equivalent to the lesser of (1) the tax credit reserved upon 82
111		-	certification of the conversion plan pursuant to subsection (e) of this 83
112		-	section, or (2) ten per cent of the actual qualified conversion 84
113		-	expenditures. In order to obtain a credit against any state tax due that is 85
114		-	specified in subsection (h) of this section, the holder of the tax credit 86
115		-	voucher shall file the voucher with the holder's state tax return. 87
116		-	(g) The owner of a commercial building converted into a residential 88
117		-	development shall not be eligible for a tax credit voucher pursuant to 89
118		-	subsections (f) and (h) of this section, unless the owner incurs qualified 90
119		-	conversion expenditures exceeding fifteen thousand dollars. 91
120		-	(h) (1) The Commissioner of Revenue Services shall grant a credit 92
121		-	against the tax imposed pursuant to chapter 208a or 229 of the general 93
122		-	statutes, as applicable, in accordance with the following: 94
123		-	(A) (i) For a taxpayer described in subparagraph (A) of subdivision 95
124		-	(8) of subsection (a) of this section holding a tax credit voucher issued 96
125		-	on or after January 1, 2026, pursuant to subsections (b) to (g), inclusive, 97
126		-	of this section, against the tax imposed pursuant to chapter 229 of the 98
127		-	general statutes in the amount specified in the tax credit voucher. 99
128		-	(ii) If the amount of the tax credit voucher exceeds the taxpayer's 100
129		-	liability for the tax imposed pursuant to chapter 229 of the general 101
130		-	statutes, the Commissioner of Revenue Services shall treat such excess 102
131		-	as an overpayment and, except as provided in section 12-739 or 12-742 103
132		-	of the general statutes, shall refund the amount of such excess, without 104
133		-	interest, to the taxpayer; and 105
134		-	(B) (i) For an owner that is a nonprofit corporation holding a tax credit 106
135		-	voucher issued on or after January 1, 2026, under subsections (b) to (g), 107
136		-	inclusive, of this section, against the tax due pursuant to chapter 208a of 108
137		-	the general statutes in the amount specified in the tax credit voucher. 109
138		-	(ii) Any unused portion of such credit pursuant to this subparagraph 110 Substitute Bill No. 1263
	114	+	LCO No. 4182 4 of 6
	115	+
	116	+	shall provide the commissioner with documentation of any work 75
	117	+	performed on the commercial building and shall certify the cost 76
	118	+	incurred in converting such building into a residential development. 77
	119	+	The commissioner shall review such conversion work and verify its 78
	120	+	compliance with the conversion plan. Following such verification, the 79
	121	+	commissioner shall issue a tax credit voucher to either the owner 80
	122	+	converting the commercial building or to the taxpayer named by the 81
	123	+	owner as contributing to the conversion. The tax credit voucher shall be 82
	124	+	in an amount equivalent to the lesser of (1) the tax credit reserved upon 83
	125	+	certification of the conversion plan under the provisions of subsection 84
	126	+	(e) of this section, or (2) ten per cent of the actual qualified conversion 85
	127	+	expenditures. In order to obtain a credit against any state tax due that is 86
	128	+	specified in subsection (h) of this section, the holder of the tax credit 87
	129	+	voucher shall file the voucher with the holder's state tax return. 88
	130	+	(g) The owner of a commercial building converted into a residential 89
	131	+	development shall not be eligible for a tax credit voucher under 90
	132	+	subsections (f) and (h) of this section, unless the owner incurs qualified 91
	133	+	conversion expenditures exceeding fifteen thousand dollars. 92
	134	+	(h) (1) The Commissioner of Revenue Services shall grant a credit 93
	135	+	against the tax imposed under chapter 229 or 208a of the general 94
	136	+	statutes, as applicable, in accordance with the following: 95
	137	+	(A) (i) For a taxpayer described under subparagraph (A) of 96
	138	+	subdivision (8) of subsection (a) of this section holding a tax credit 97
	139	+	voucher issued on or after January 1, 2026, under subsections (b) to (g), 98
	140	+	inclusive, of this section, against the tax imposed under chapter 229 of 99
	141	+	the general statutes in the amount specified in the tax credit voucher. 100
	142	+	(ii) If the amount of the tax credit voucher exceeds the taxpayer's 101
	143	+	liability for the tax imposed under chapter 229 of the general statutes, 102
	144	+	the Commissioner of Revenue Services shall treat such excess as an 103
	145	+	overpayment and, except as provided under section 12-739 or 12-742 of 104
	146	+	the general statutes, shall refund the amount of such excess, without 105
	147	+	Raised Bill No. 1263
139	148
140	149
141		-	LCO 5 of 5
142	150
143		-	may be carried forward to any or all of the four income years following 111
144		-	the year in which the tax credit voucher is issued. 112
145		-	(2) The Commissioner of Housing shall provide a copy of the voucher 113
146		-	to the Commissioner of Revenue Services upon the request of the 114
147		-	Commissioner of Revenue Services. 115
148		-	(i) A credit issued pursuant to this section shall not exceed thirty 116
149		-	thousand dollars per dwelling unit for a commercial building converted 117
150		-	into a residential development for an owner that is not a nonprofit 118
151		-	corporation or not exceed fifty thousand dollars per such dwelling unit 119
152		-	for an owner that is a nonprofit corporation. 120
153		-	(j) The aggregate amount of all tax credits that may be reserved by 121
154		-	the Commissioner of Housing upon certification of conversion plans 122
155		-	pursuant to subsections (b) to (d), inclusive, of this section shall not 123
156		-	exceed three million dollars in any one fiscal year. 124
157		-	(k) The Commissioner of Housing may, in consultation with the 125
158		-	Commissioner of Revenue Services, adopt regulations in accordance 126
159		-	with the provisions of chapter 54 of the general statutes to carry out the 127
160		-	purposes of this section. 128
	151	+	LCO No. 4182 5 of 6
	152	+
	153	+	interest, to the taxpayer; and 106
	154	+	(B) (i) For an owner that is a nonprofit corporation holding a tax credit 107
	155	+	voucher issued on or after January 1, 2026, under subsections (b) to (g), 108
	156	+	inclusive, of this section, against the tax due under chapter 208a of the 109
	157	+	general statutes in the amount specified in the tax credit voucher. 110
	158	+	(ii) Any unused portion of such credit under this subparagraph may 111
	159	+	be carried forward to any or all of the four income years following the 112
	160	+	year in which the tax credit voucher is issued. 113
	161	+	(2) The Commissioner of Housing shall provide a copy of the voucher 114
	162	+	to the Commissioner of Revenue Services upon the request of the 115
	163	+	Commissioner of Revenue Services. 116
	164	+	(i) A credit issued under this section shall not exceed thirty thousand 117
	165	+	dollars per dwelling unit for a commercial building converted into a 118
	166	+	residential development for an owner that is not a nonprofit 119
	167	+	corporation, or not exceed fifty thousand dollars per such dwelling unit 120
	168	+	for an owner that is a nonprofit corporation. 121
	169	+	(j) The aggregate amount of all tax credits that may be reserved by 122
	170	+	the Commissioner of Housing upon certification of conversion plans 123
	171	+	under subsections (b) to (d), inclusive, of this section shall not exceed 124
	172	+	three million dollars in any one fiscal year. 125
	173	+	(k) The Commissioner of Housing may, in consultation with the 126
	174	+	Commissioner of Revenue Services, adopt regulations in accordance 127
	175	+	with the provisions of chapter 54 of the general statutes to carry out the 128
	176	+	purposes of this section. 129
161	177		This act shall take effect as follows and shall amend the following
162	178		sections:
	179	+
	180	+	Raised Bill No. 1263
	181	+
	182	+
	183	+
	184	+	LCO No. 4182 6 of 6
163	185
164	186		Section 1 July 1, 2025, and
165	187		applicable to taxable years
166	188		commencing on and after
167	189		July 1, 2025
168	190		New section
169	191
170		-	Statement of ~~Legislative Commissioners~~:
171		-	~~Throughout~~ the ~~bill, "under" and "under the provisions~~ of~~" were~~
172		-	~~changed to "pursuant~~ ~~to" for consistency of language~~.
	192	+	Statement of Purpose:
	193	+	To provide certain tax credits for the conversion of commercial
	194	+	buildings into residential developments.
173	195
174		-	HSG Joint Favorable Subst. C/R FIN
	196	+	[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
	197	+	that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
	198	+	underlined.]
175	199