"AN ACT ESTABLISHING PILOT PROGRAMS EXEMPTING HUBZONE BUSINESSES FROM THE SALES TAX. "

After the last section, add the following and renumber sections and internal references accordingly:

"Sec. 501. (NEW) (Effective January 1, 2007) (a) As used in this section:

(1) "Commissioner" means the Commissioner of Economic and Community Development; and

(2) "Economic cluster" means (A) an industry group that is linked together through customer, supplier or other relationships and recognized by the commissioner, or (B) health care establishments, as defined in Sector 62, or manufacturing establishments, as defined in Sectors 31 to 33, inclusive, in the North American Industrial Classification System, United States Manual, United States Office of Management and Budget, 1997 edition.

(b) The Commissioner of Economic and Community Development shall establish a business employment incentive program under which said commissioner may approve verified workplace investment rebates for any business (1) that relocates to Connecticut from another state or expands within Connecticut, (2) that is in an economic cluster, (3) that hires and retains, for at least one year, five or more new, full-time employees who are subject to the tax imposed by chapter 229 of the general statutes, resulting in a net increase, for at least one year, of five or more full-time employees for the business in Connecticut, and (4) for which the commitment of said rebates is a material factor in the decision of the business to relocate to Connecticut or expand within the state. Any such rebate approved by the Commissioner of Economic and Community Development shall be paid by the Commissioner of Revenue Services.

(c) The amount of verified workplace investment rebates that may be paid to an eligible business under this section shall be not less than ten per cent or more than eighty per cent of the total amount withheld by the business from the wages of each such new full-time employee of the business pursuant to chapter 229 of the general statutes. Such rebates may be paid for ten years after the business applies to the Commissioner of Economic and Community Development for a written commitment under subsection (d) of this section, subject to verification under subsection (f) of this section. The Commissioner of Economic and Community Development shall establish criteria for determining such percentage amount based on the number of new, full-time employees hired by such businesses.

(d) A business may apply to the Commissioner of Economic and Community Development for a written commitment for verified workplace investment rebates by submitting an application to the commissioner, the form and substance of which shall be determined by the commissioner. The business shall provide at least the following information in the application: (1) The types of jobs that the business will create, the schedule for hiring new employees and the number of jobs to be created, by each salary range, (2) any other state, federal or municipal funds received by the business, (3) the compensation provided to (A) the chief executive officer of the business, regardless of whether the corporate headquarters of the business are located in Connecticut or outside the state, and (B) the chief executive officer of the division of the business that is located in Connecticut, if the corporate headquarters of the business are located outside the state and such information is available to the public, (4) the financial statements of the business for the three preceding fiscal years of the business or, if the business has been in existence for less than three fiscal years, financial statements of the business for the entire period of its existence, (5) a summary of the labor and environmental record of the business, including any violations of state, federal or municipal law during the five preceding fiscal years of the business, (6) the names of any other states seeking the retention or relocation of the business, (7) a statement of how the written commitment will affect the decision of the business to relocate to or expand within the state, (8) a market analysis of the industry in Connecticut in which the business is or would be operating, to the extent available, (9) whether the business offers health insurance to all of its full-time employees, and (10) any other information required by the Commissioner of Economic and Community Development. The business shall include an application fee of five hundred dollars with such application. All information contained in the application shall be confidential, except the commissioner may disclose such information in accordance with the Freedom of Information Act under chapter 14 of the general statutes if the commissioner issues a written commitment to the applicant under subsection (e) of this section.

(e) The Commissioner of Economic and Community Development may issue a written commitment to any applicant that the commissioner determines has qualified for verified workplace investment rebates under subsections (a) to (d), inclusive, of this section. In assessing an application for a written commitment, the commissioner shall consider, among other factors, the information provided by the business pursuant to subdivisions (1) to (10), inclusive, of subsection (d) of this section. A business that receives a written commitment may be paid such rebates for each twelve-month period during the period beginning on the date of the business's application for such commitment and ending ten years after said date, subject to verification under subsection (f) of this section of the new jobs created and retained by the business. A written commitment shall specify the percentage that will be applied in calculating the portion of the state income tax withholding paid by the business for new employees that will be rebated to the business.

(f) A business that has received a written commitment may apply to the Commissioner of Economic and Community Development for disbursement of a rebate for a twelve-month period by (1) certifying that it has (A) hired the minimum number of new, full-time employees specified in subsection (b) of this section and retained such employees for the twelve-month period covered by the application, and (B) withheld an amount from each such employee's wages that is substantially equivalent to the state income tax that is reasonably estimated to be due from the employee with respect to such wages pursuant to chapter 229 of the general statutes during such period and paid such amount to the Commissioner of Revenue Services, and (2) documenting the amount of such withholding and payment. The Commissioner of Economic and Community Development may approve an application for disbursement of such rebate upon verifying the information certified in the application. If the commissioner approves an application, the commissioner shall (A) determine the amount of the rebate payable to the business, and (B) notify the Commissioner of Revenue Services of the name and address of the business and such amount. Upon receipt of such notice, the Commissioner of Revenue Services shall, no later than the last day of the twelfth month after the month during which the business files its annual reconciliation of withholding, on a form prescribed by the Commissioner of Revenue Services, notify the State Comptroller of the amount of the verified workplace investment rebate, and the State Comptroller shall draw an order on the State Treasurer in said amount for payment to the applicant from the revenues of the General Fund.

(g) The Commissioner of Economic and Community Development may revoke a written commitment for a business at any time if said commissioner determines that the business has not complied with the provisions of this section or such commitment.

(h) The commissioner shall issue not more than ten million dollars in grants in any fiscal year.

(i) Not later than February 1, 2009, the Commissioner of Economic and Community Development shall submit a report to the joint standing committee of the General Assembly having cognizance of matters relating to economic development, in accordance with the provisions of section 11-4a of the general statutes, on the business employment incentive program. Said report shall include, but not be limited to, (1) an analysis of the effectiveness of the program and the impact of the program on state revenues, (2) the number and types of businesses that have applied under the program and the names of the businesses issued written commitments under subsection (e) of this section, (3) the number of new, full-time jobs created under the program, (4) the total amount of application fees received by the Commissioner of Economic and Community Development, and (5) the total amount of verified workplace investment rebates paid under the program.

Sec. 502. Subsection (b) of section 32-235 of the 2006 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2007):

(b) The proceeds of the sale of said bonds, to the extent of the amount stated in subsection (a) of this section, shall be used by the Department of Economic and Community Development for the purposes of sections 32-220 to 32-234, inclusive, including economic cluster-related programs and activities, and for the Connecticut job training finance demonstration program pursuant to sections 32-23uu and 32-23vv provided, (1) three million dollars shall be used by said department solely for the purposes of section 32-23uu and not more than five million two hundred fifty thousand dollars of the amount stated in said subsection (a) may be used by said department for the purposes of section 31-3u, (2) not less than one million dollars shall be used for an educational technology grant to the deployment center program and the nonprofit business consortium deployment center approved pursuant to section 32-41l, (3) not less than two million dollars shall be used by said department for the establishment of a pilot program to make grants to businesses in designated areas of the state for construction, renovation or improvement of small manufacturing facilities provided such grants are matched by the business, a municipality or another financing entity. The commissioner shall designate areas of the state where manufacturing is a substantial part of the local economy and shall make grants under such pilot program which are likely to produce a significant economic development benefit for the designated area, (4) five million dollars may be used by said department for the manufacturing competitiveness grants program, (5) one million dollars shall be used by said department for the purpose of a grant to the Connecticut Center for Advanced Technology, for the purposes of section 32-237, [and] (6) ten million dollars shall be used by said department for the purpose of grants to the United States Navy or eligible applicants for projects related to the enhancement of infrastructure for long-term, on-going naval operations at the United States Naval Submarine Base-New London, located in Groton, which will increase the military value of said base, and (7) a portion of said bond proceeds may be used by the Department of Economic and Community Development and Revenue Services and the Comptroller for administrative costs incurred by said departments and Comptroller in carrying out the purposes of section 501 of this act. "