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Senate Bill No. 496

Public Act No. 02-143

AN ACT CONCERNING THE STATE'S SECURITY INTEREST IN CERTAIN PERSONAL PROPERTY AND THE FIXING OF PROPERTY ASSESSMENTS OF ELECTRIC GENERATING FACILITIES IN CERTAIN MUNICIPALITIES.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Subdivision (70) of section 12-81 of the general statutes, as amended by section 156 of public act 01-132, is repealed and the following is substituted in lieu thereof (Effective July 1, 2002, and applicable with respect to personal property tax exemptions in which the state has a security interest for the assessment year commencing October 1, 2001, and each assessment year thereafter):

(70) (A) New machinery and equipment used directly in the manufacturing of goods or products and acquired through purchase by any business organization or any affiliate of such business organization as part of a technological upgrading of the manufacturing process at a location in a distressed municipality, targeted investment community, as defined in section 32-222, as amended, or enterprise zone designated pursuant to section 32-70, as amended, and for which an eligibility certificate has been issued by the Department of Economic and Community Development, which business organization [(A)] (i) is engaged in the manufacturing, processing or assembling of raw materials, parts or manufactured products, [(B)] (ii) has been in continuous operation in the state for a period not less than five years prior to claiming the exemption provided in this subdivision, [(C)] (iii) had gross receipts in an amount less than twenty million dollars in the year prior to claiming the exemption provided in this subdivision, including receipts of any affiliates of the business organization, and [(D)] (iv) has incurred costs in acquiring such machinery and equipment not less than the greater of [(i)] (I) two hundred thousand dollars, or [(ii)] (II) two hundred per cent of the business organization's and affiliate's average expenditure for the acquisition of machinery and equipment used directly in the manufacturing of goods or products at the location in the distressed municipality, targeted investment community or enterprise zone designated pursuant to section 32-70, as amended, during the three years prior to claiming the exemption provided in this subdivision, as follows: To the extent of fifty per cent of its valuation for purposes of assessment in each of the five full assessment years following the assessment year in which such machinery and equipment is acquired.

(B) Any person who desires to claim the exemption provided in this subdivision shall file annually with the assessor or board of assessors in the distressed municipality, targeted investment community or enterprise zone designated pursuant to section 32-70, as amended, in which the business organization is located, on or before the first day of November, written application claiming such exemption on a form prescribed by the Secretary of the Office of Policy and Management. Failure to file such application in this manner and form within the time limit prescribed shall constitute a waiver of the right to such exemption for such assessment year, unless an extension of time is allowed pursuant to section 12-81k, and upon payment of the required fee for late filing. No person shall be eligible to receive the exemption provided in this subdivision if such exemption is sought for machinery and equipment located in a manufacturing facility, as defined in subsection (d) of section 32-9p, as amended, currently receiving assistance under subdivisions (59) and (60) of section 12-81, as amended, and no person shall receive such exemption for eligible machinery or equipment at each location in a distressed municipality, targeted investment community or enterprise zone designated pursuant to section 32-70, as amended, more than once in any continuous five-year period.

(C) The state and the municipality and district shall hold a security interest, as defined in subdivision (37) of section 42a-1-201, as amended, in any machinery or equipment which is exempt from taxation pursuant to this [subsection] subdivision, in an amount equal to the tax revenue reimbursed or lost, as the case may be, which shall be subordinate to any purchase money security interest, as defined in section 42a-9-103a, as amended. Such security interest shall be enforceable against the taxpayer for a period of five years after the last assessment year in which such exemption was received in any case in which the business organization ceases all business operations or moves its business operations entirely out of this state. Any assessor who has granted an exemption under this subdivision shall provide written notification to the secretary of the cessation of such operations or the move of such operations entirely out of this state. Such notification may be made at any time after the October first of the last assessment year in which such exemption is granted and before the September thirtieth that is five years after the conclusion of said assessment year. Upon receiving such notification and complying with the provisions of section 12-35a, as amended, the state shall have a lien upon the machinery or equipment situated in this state and owned by the person that ceased all business operations or moved such operations entirely out of this state. Notwithstanding the provisions of section 12-35a, as amended, the total amount of the reimbursement made by the state for the property tax exemptions granted to the person under the provisions of this subdivision, shall be deemed to be the amount of the tax which such person failed to pay. Notwithstanding said section 12-35a, the information required to be included in the notice of lien for said tax shall be as follows: (i) The owner of the property upon which the lien is claimed, (ii) the business address or residence address of such owner, (iii) the specific property claimed to be subject to such lien, (iv) the location of such property at the time it was last made tax exempt pursuant to this subdivision, (v) the total amount of the reimbursement made by the state for the property tax exemptions granted to such owner under the provisions of this subdivision, and (vi) the tax period or periods for which such lien is claimed. If more than one agency of the state perfects such a notice of lien on the same day, the priority of such liens shall be determined by the time of day such liens were perfected, and if perfected at the same time, the lien for the highest amount shall have priority. In addition to the other remedies provided in this subdivision, the Attorney General, upon request of the secretary, may bring a civil action in a court of competent jurisdiction to recover the amount of tax revenue reimbursed by the state from any person who received an exemption under this subdivision.

Sec. 2. Subparagraph (C) of subdivision (72) of section 12-81 of the general statutes, as amended by section 157 of public act 01-132, is repealed and the following is substituted in lieu thereof (Effective July 1, 2002, and applicable with respect to personal property tax exemptions in which the state has a security interest for the assessment year commencing October 1, 2001, and each assessment year thereafter):

(C) Any person claiming the exemption provided under this subdivision for machinery or equipment shall not be eligible to claim the exemption provided under subdivision (60) of this section or subdivision (70) of this section, as amended by this act, for the same machinery or equipment. The state and the municipality and district shall hold a security interest, as defined in subdivision (37) of section 42a-1-201, as amended, in any machinery or equipment which is exempt from taxation pursuant to this subdivision, in an amount equal to the tax revenue reimbursed or lost, as the case may be, which shall be subordinate to any purchase money security interest, as defined in section 42a-9-103a, as amended. Such security interest shall be enforceable against the claimant for a period of five years after the last assessment year in which such exemption was received in any case in which [said manufacturer] such person ceases all manufacturing or biotechnology operations or moves [its] such manufacturing or biotechnology operations entirely out of this state. Any assessor who has granted an exemption under this subdivision shall provide written notification to the secretary of the cessation of such operations or the move of such operations entirely out of this state. Such notification may be made at any time after the October first of the last assessment year in which such exemption is granted and before the September thirtieth that is five years after the conclusion of said assessment year. Upon receiving such notification and complying with the provisions of section 12-35a, as amended, the state shall have a lien upon the machinery or equipment situated in this state and owned by the person that ceased all business operations or moved such operations entirely out of this state. Notwithstanding the provisions of section 12-35a, as amended, the total amount of the reimbursement made by the state for the property tax exemptions granted to the person under the provisions of this subdivision, shall be deemed to be the amount of the tax which such person failed to pay. Notwithstanding said section 12-35a, the information required to be included in the notice of lien for such tax shall be as follows: (i) The owner of the property upon which the lien is claimed, (ii) the business address or residence address of such owner, (iii) the specific property claimed to be subject to such lien, (iv) the location of such property at the time it was last made tax exempt pursuant to this subdivision, (v) the total amount of the reimbursement made by the state for the property tax exemptions granted to such owner under the provisions of this subdivision, and (vi) the tax period or periods for which such lien is claimed. If more than one agency of the state perfects such a notice of lien on the same day, the priority of such liens shall be determined by the time of day such liens were perfected, and if perfected at the same time, the lien for the highest amount shall have priority. In addition to the other remedies provided in this subdivision, the Attorney General, upon request of the secretary, may bring a civil action in a court of competent jurisdiction to recover the amount of tax revenue reimbursed by the state from any person who received an exemption under this subdivision. The following shall not be eligible for the exemption provided under this subdivision: [(i)] (I) A public service company, as defined in section 16-1, as amended; and [(ii)] (II) any provider, directly or indirectly, of electricity, oil, water or gas.

Sec. 3. Section 86 of public act 01-9 of the June special session is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) Any electric generating facility, the construction of which is completed after July 1, 1998, may be treated for purposes of section 32-71 as if it were located in an enterprise zone and used for commercial or retail purposes. Notwithstanding the provisions of section 32-71, upon the approval of a municipality's legislative body, either before or after July 1, 2001, the full amount of either assessments or taxes may be fixed for the real and personal property of such electric generating facility both during and after the construction period, provided such assessments or taxes as so fixed represent an approximation of the projected tax liability of such facility based on a reasonable estimation of its fair market value as determined by the municipality upon the exercise of its best efforts.

(b) Any new electric generating facility, the construction of which is completed after July 1, 2003, may be treated for purposes of section 32-71 as if it were located in an enterprise zone and used for commercial or retail purposes, provided: (1) The owner of such facility has negotiated a tax agreement with the municipality in which such facility would be located; and (2) such agreement has been approved by the municipality's legislative body between January 1, 2002, and February 28, 2002. Notwithstanding the provisions of section 32-71, upon approval of such municipality's legislative body, either before or after the effective date of this act, up to the full amount of either assessments or taxes may be fixed for the real and personal property of such electric generating facility both during and after the construction period, provided such assessments or taxes as so fixed represent an approximation of the commensurate portion of the projected tax liability of such facility based on a reasonable estimation of its fair market value as determined by the municipality upon the exercise of its best efforts.

(c) Any new electric generating facility, the construction of which is completed after July 1, 2003, may be treated for purposes of section 32-71 as if it were located in an enterprise zone and used for commercial or retail purposes, provided the municipality in which such facility is located is under state governance. Notwithstanding the provisions of section 32-71, upon approval of such municipality's legislative body, either before or after the effective date of this section, up to the full amount of either assessments or taxes may be fixed for the real and personal property of such electric generating facility both during and after the construction period, provided such assessments or taxes as so fixed represent an approximation of the commensurate portion of the projected tax liability of such facility based on a reasonable estimation of its fair market value as determined by the municipality upon the exercise of its best efforts.

[(b)] (d) As used in this section, "electric generating facility" means a facility, as defined in subdivision (3) of subsection (a) of section 16-50i.