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General Assembly Raised Bill No. 1554
January Session, 2025
LCO No. 6965
Referred to Committee on FINANCE, REVENUE AND
BONDING
Introduced by:
(FIN)
AN ACT CONCERNING THE ELIMINATION OF THE PROPERTY TAX
ON MOTOR VEHICLES AND THE PROVISION OF REIMBURSEMENT
AND OTHER GRANTS TO MUNICIPALITIES.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. (NEW) (Effective from passage) (a) Commencing in the fiscal 1
year ending June 30, 2028, and each fiscal year thereafter, the Treasurer 2
shall transfer revenue received by the state from estimated and final 3
payments of the personal income tax imposed under chapter 229 of the 4
general statutes and the affected business entity tax imposed under 5
section 12-699 of the general statutes, in an amount equal to the 6
difference between the final threshold amount calculated for the fiscal 7
year ending June 30, 2027, and the threshold amount under section 4-8
30a of the general statutes for each fiscal year thereafter, as adjusted. 9
Such amounts shall be deposited in the municipal offset vehicle expense 10
account established under subsection (c) of this section. 11
(b) Commencing in the fiscal year ending June 30, 2028, and each 12
fiscal year thereafter, whenever the Comptroller certifies through an 13
annual actuarial valuation for the prior fiscal year that there is a decrease 14
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in the necessary budgeted actuarially determined employer 15
contribution for the applicable fiscal year compared to the amount 16
determined from the actuarial valuation for the fiscal year ending two 17
fiscal years prior, the Comptroller shall transfer the amount of such 18
difference to the municipal offset vehicle expense account established 19
under subsection (c) of this section. 20
(c) There is established an account to be known as the "municipal 21
offset vehicle expense account", which shall be a separate, nonlapsing 22
account. The account shall contain any moneys required by law to be 23
deposited in the account. Moneys in the account shall be expended by 24
the Secretary of the Office of Policy and Management for the purpose of 25
phasing out the property tax on motor vehicles imposed by chapter 203 26
of the general statutes, disbursing grants to municipalities for the 27
revenue loss associated with such phase-out and paying grants to 28
municipalities pursuant to subsection (e) of this section. 29
(d) The Secretary of the Office of Policy and Management shall begin 30
the process of reducing the property tax on motor vehicles by 31
exempting, commencing in the fiscal year ending June 30, 2029, a 32
portion of the assessed value of a motor vehicle each fiscal year until the 33
property tax on motor vehicles is reduced to zero and disbursing grants 34
to municipalities as reimbursement for the revenue loss resulting from 35
such exempted portion. The secretary shall calculate, for the fiscal year 36
ending June 30, 2029, and each fiscal year thereafter, (1) the amount of 37
the portion of the assessed value of a motor vehicle that shall be 38
exempted, based on the amount projected to be available for 39
disbursement in the municipal offset vehicle expense account 40
established under subsection (c) of this section, and (2) the amounts of 41
the reimbursement grants to be disbursed to each municipality. The 42
secretary shall notify the chief executive officer of each municipality not 43
later than September 1, 2027, and each September first thereafter, of the 44
exemption amount and the grant amount payable to each municipality 45
pursuant to this subsection. 46
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(e) (1) On or before the date the property tax on motor vehicles is 47
reduced to zero pursuant to subsection (d) of this section, the Secretary 48
of the Office of Policy and Management shall calculate and post on the 49
Office of Policy and Management's Internet web site a municipal needs 50
capacity gap metric for each municipality. Such metric shall be 51
calculated in accordance with the methodologies used in the May, 2015 52
New England Public Policy Center Research Report 15-1. 53
(2) Not later than July fifteenth of the fiscal year in which the property 54
tax on motor vehicles is reduced to zero pursuant to subsection (d) of 55
this section, the secretary shall determine the formulae and calculations, 56
based on the amount available for disbursement in the municipal offset 57
vehicle expense account established under subsection (c) of this section, 58
for grants to be paid to municipalities as follows: (A) Fifty per cent of 59
such amount shall be distributed to municipalities for needs capacity 60
grants based on a municipality's municipal needs capacity gap metric; 61
and (B) fifty per cent of such amount shall be distributed to 62
municipalities on a per capita basis, as determined by the most recent 63
federal decennial census. 64
(3) Not later than August first immediately following such July 65
fifteenth, the secretary shall present such formulae and calculations and 66
the projected amounts each municipality would receive under 67
subparagraphs (A) and (B) of subdivision (2) of this subsection to the 68
joint standing committees of the General Assembly having cognizance 69
of matters relating to finance, revenue and bonding and local 70
governments. 71
(4) Not later than September first of each subsequent year, the 72
secretary shall calculate the amount of each municipality's grants under 73
subdivision (2) of this subsection and notify the chief executive officer 74
of each municipality of the grant amounts payable to such municipality 75
pursuant to said subdivision. 76
(f) Commencing in the fiscal year ending June 30, 2028, the Secretary 77
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of the Office of Policy and Management shall submit an annual report 78
to the General Assembly, in accordance with the provisions of section 79
11-4a of the general statutes, of a summary of the following, as 80
applicable: (1) The amount in the municipal offset vehicle expense 81
account established under subsection (c) of this section; (2) for the 82
applicable fiscal year, the amount of the portion of the assessed value of 83
a motor vehicle exempted pursuant to subsection (d) of this section and 84
the amounts of the reimbursement grant provided to each municipality 85
due to such exemption; (3) information and data related to the grants 86
under subsection (e) of this section; and (4) any other information the 87
secretary deems relevant or necessary to any grants disbursed pursuant 88
to this section. 89
This act shall take effect as follows and shall amend the following
sections:
Section 1 from passage New section
Statement of Purpose:
To phase out and eliminate the property tax on motor vehicles through
the dedication of certain revenue and savings for reimbursement and
other grants to municipalities.
[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.]