AN ACT CONCERNING GLOBAL WARMING.

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

Section 1. (NEW) (Effective from passage and applicable to conveyances of real property occurring on or after July 1, 2007, and prior to October 1, 2012) There shall be established a pilot program regarding a local option municipal conveyance tax for certain community preservation and investment purposes. Any municipality may impose a buyer's tax on the conveyance of real property at the rate of not more than one-half of one per cent of the consideration paid by the buyer in excess of one hundred fifty thousand dollars except that any transfer that results in the preservation of open space land, forest or farm land, including, but not limited to, transfers between farmers and land trusts shall be exempt from such tax. Such tax shall be retained by the municipality, shall be kept in a separate account and shall be used for any of the following purposes, at the option of the municipality upon approval of the Commissioner of Environmental Protection: (A) Purchase or protection of open space land, forest or farm land by the municipality or by the municipality in cooperation with the state or federal government or with a private organization such as a land trust, (B) purchase or protection of land used for recreation, including land for playing fields, beaches and shoreline access, (C) purchase or protection of interests in real property to establish access to public trust waters, (D) brownfield remediation, (E) purchase of property or development rights for affordable housing, (F) clean water projects, (G) energy conservation projects, or (H) clean energy projects.

Sec. 2. Section 4a-67d of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) The fleet average for cars or light duty trucks purchased by the state shall: (1) On and after October 1, 2001, have a United States Environmental Protection Agency estimated highway gasoline mileage rating of at least thirty-five miles per gallon and on and after January 1, 2003, have a United States Environmental Protection Agency estimated highway gasoline mileage rating of at least forty miles per gallon, (2) comply with the requirements set forth in 10 CFR 490 concerning the percentage of alternative-fueled vehicles required in the state motor vehicle fleet, and (3) obtain the best achievable mileage per pound of carbon dioxide emitted in its class. The alternative-fueled vehicles purchased by the state to comply with said requirements shall be capable of operating on natural gas or electricity or any other system acceptable to the United States Department of Energy that operates on fuel that is available in the state.

(b) Notwithstanding any other provisions of this section, (1) on and after January 1, 2008, any car or light duty truck purchased by the state shall have an efficiency rating that is in the top third of all vehicles in such purchased vehicle's class and fifty per cent of such cars and light duty trucks shall be an alternative fueled, hybrid electric or plug-in electric vehicle, and (2) on and after January 1, 2010, any car or light duty truck purchased by the state shall have an efficiency rating that is in the top third of all vehicles in such purchased vehicle's class and one hundred per cent of such cars and light duty trucks shall be alternative fueled, hybrid electric or plug-in electric vehicles.

[(b)] (c) The provisions of [subsection (a)] subsections (a) and (b) of this section shall not apply to cars or light duty trucks purchased for law enforcement or other special use purposes as designated by the Department of Administrative Services.

[(c)] (d) As used in this section, the terms "car" and "light duty truck" shall be as defined in the United States Department of Energy Publication DOE/CE -0019/8, or any successor publication.

Sec. 3. Section 16a-32a of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

The Office of Policy and Management shall amend the state plan of conservation and development adopted pursuant to this chapter to include therein a goal for reducing carbon dioxide emissions within this state. [Said office, in consultation with the Department of Environmental Protection, shall submit a report to the General Assembly on or before the thirtieth day following May 22, 1995, on or before May 1, 1996, and annually thereafter, which details the net amount of carbon dioxide emitted annually within this state. Subsequent to the May 1, 2000, submittal, said report shall be submitted every three years with the first such report due May 1, 2003.]

Sec. 4. (Effective from passage) On or before February 1, 2008, the Connecticut Academy of Sciences, in consultation with the state Department of Environmental Protection, shall submit a written report regarding the expected effects of climate change on Connecticut and including recommendations on what the state should do to prepare for such effects to the joint standing committee of the General Assembly having cognizance of matters relating to the environment in accordance with the provisions of section 11-4a of the general statutes.

Sec. 5. (NEW) (Effective from passage) The Commissioner of Environmental Protection shall study the potential for integrating motorized fleets into the cap and trade mechanism of the Northeast Regional Greenhouse Gas Initiative, and not later than January 1, 2008, the commissioner shall submit a written recommendation concerning what legislative action would be necessary to include transportation sources of climate change gases into regional cap and trade agreements to the joint standing committee of the General Assembly having cognizance of matters relating to the environment in accordance with the provisions of section 11-4a of the general statutes.

Sec. 6. (NEW) (Effective October 1, 2007) (a) The Commissioner of Environmental Protection shall study the availability of energy efficient lamps such as compact fluorescent lamps, halogen lamps and high-intensity discharge lamps at competitive prices for consumers and compile a list of inefficient incandescent lamps. For the purposes of this section, "incandescent lamp" means a light bulb that produces a soft warm light by electrically heating a tungsten filament until it glows where much of the energy is lost as heat.

(b) Not later than one hundred eighty days after the Commissioner of Environmental Protection posts such a list on the Department of Environmental Protection's web site, no retailer or wholesaler shall sell any lamp classified on such list. The Commissioner of Environmental Protection shall issue a written warning to any retailer or wholesaler who violates this subsection. Not later than thirty days after the Commissioner of Environmental Protection issues such a warning, the wholesaler or retailer shall pay a fine of not more than one hundred dollars for each sale of an inefficient incandescent lamp subsequent to the receipt of such warning.

Sec. 7. (NEW) (Effective October 1, 2007, and applicable to sales occurring on or after said date) There is hereby imposed a surcharge of ten cents on each sale of an incandescent lamp. Said surcharge shall be in addition to any tax otherwise applicable to any such transaction. On or after October 1, 2007, each retailer who collects such surcharge shall remit the total amount of the surcharge collected each calendar quarter to the Comptroller for deposit in the Renewable Energy Investment Fund created under section 16-245n of the general statutes. For the purposes of this section, "incandescent lamp" means a light bulb that produces a soft warm light by electrically heating a tungsten filament.

Sec. 8. (NEW) (Effective July 1, 2007) Any municipality may, by ordinance, provide for the abatement in whole or in part of personal property taxes on a hybrid passenger car, as defined in subdivision (115) of section 12-412 of the general statutes, purchased on or after July 1, 2007.

Sec. 9. Section 12-217 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2007):

(a) (1) In arriving at net income as defined in section 12-213, whether or not the taxpayer is taxable under the federal corporation net income tax, there shall be deducted from gross income, (A) all items deductible under the Internal Revenue Code effective and in force on the last day of the income year except (i) any taxes imposed under the provisions of this chapter which are paid or accrued in the income year and in the income year commencing January 1, 1989, and thereafter, any taxes in any state of the United States or any political subdivision of such state, or the District of Columbia, imposed on or measured by the income or profits of a corporation which are paid or accrued in the income year, and (ii) deductions for depreciation, which shall be allowed as provided in subsection (b) of this section, and (B) additionally, in the case of a regulated investment company, the sum of (i) the exempt-interest dividends, as defined in the Internal Revenue Code, and (ii) expenses, bond premium, and interest related to tax-exempt income that are disallowed as deductions under the Internal Revenue Code, and (C) in the case of a taxpayer maintaining an international banking facility as defined in the laws of the United States or the regulations of the Board of Governors of the Federal Reserve System, as either may be amended from time to time, the gross income attributable to the international banking facility, provided, no expense or loss attributable to the international banking facility shall be a deduction under any provision of this section, and (D) additionally, in the case of all taxpayers, all dividends as defined in the Internal Revenue Code effective and in force on the last day of the income year not otherwise deducted from gross income, including dividends received from a DISC or former DISC as defined in Section 992 of the Internal Revenue Code and dividends deemed to have been distributed by a DISC or former DISC as provided in Section 995 of said Internal Revenue Code, other than thirty per cent of dividends received from a domestic corporation in which the taxpayer owns less than twenty per cent of the total voting power and value of the stock of such corporation, and (E) additionally, in the case of all taxpayers, the value of any capital gain realized from the sale of any land, or interest in land, to the state, any political subdivision of the state, or to any nonprofit land conservation organization where such land is to be permanently preserved as protected open space or to a water company, as defined in section 25-32a, where such land is to be permanently preserved as protected open space or as Class I or Class II water company land.

(2) No deduction shall be allowed for (A) expenses related to dividends which are allowable as a deduction or credit under the Internal Revenue Code, and (B) federal taxes on income or profits, losses of other calendar or fiscal years, retroactive to include all calendar or fiscal years beginning after January 1, 1935, interest received from federal, state and local government securities, if any such deductions are allowed by the federal government.

(3) Notwithstanding any provision of this section to the contrary, no dividend received from a real estate investment trust shall be deductible under this section by the recipient unless the dividend is: (A) Deductible under Section 243 of the Internal Revenue Code; or (B) received by a qualified dividend recipient from a qualified real estate investment trust and, as of the last day of the period for which such dividend is paid, persons, not including the qualified dividend recipient or any person that is either a related person to, or an employee or director of, the qualified dividend recipient, have outstanding cash capital contributions to the qualified real estate investment trust that, in the aggregate, exceed five per cent of the fair market value of the aggregate real estate assets, valued as of the last day of the period for which such dividend is paid, then held by the qualified real estate investment trust. For purposes of this section, a "related person" is as defined in subdivision (7) of subsection (a) of section 12-217m, "real estate assets" is as defined in Section 856 of the Internal Revenue Code, a "qualified dividend recipient" means a dividend recipient who has invested in a qualified real estate investment trust prior to April 1, 1997, and a "qualified real estate investment trust" means an entity that both was incorporated and had contributed to it a minimum of five hundred million dollars worth of real estate assets prior to April 1, 1997, and that elects to be a real estate investment trust under Section 856 of the Internal Revenue Code prior to April 1, 1998.

(4) Notwithstanding anything in this section to the contrary, (A) any excess of the deductions provided in this section for any income year commencing on or after January 1, 1973, over the gross income for such year or the amount of such excess apportioned to this state under the provisions of section 12-218, shall be an operating loss of such income year and shall be deductible as an operating loss carry-over for operating losses incurred prior to income years commencing January 1, 2000, in each of the five income years following such loss year, and for operating losses incurred in income years commencing on or after January 1, 2000, in each of the twenty income years following such loss year, provided the portion of such operating loss which may be deducted as an operating loss carry-over in any income year following such loss year shall be limited to the lesser of (i) any net income greater than zero of such income year following such loss year, or in the case of a company entitled to apportion its net income under the provisions of section 12-218, the amount of such net income which is apportioned to this state pursuant thereto, or (ii) the excess, if any, of such operating loss over the total of such net income for each of any prior income years following such loss year, such net income of each of such prior income years following such loss year for such purposes being computed without regard to any operating loss carry-over from such loss year allowed by this subparagraph and being regarded as not less than zero, and provided, further, the operating loss of any income year shall be deducted in any subsequent year, to the extent available therefor, before the operating loss of any subsequent income year is deducted, and (B) any net capital loss, as defined in the Internal Revenue Code effective and in force on the last day of the income year, for any income year commencing on or after January 1, 1973, shall be allowed as a capital loss carry-over to reduce, but not below zero, any net capital gain, as so defined, in each of the five following income years, in order of sequence, to the extent not exhausted by the net capital gain of any of the preceding of such five following income years, and (C) any net capital losses allowed and carried forward from prior years to income years beginning on or after January 1, 1973, for federal income tax purposes by companies entitled to a deduction for dividends paid under the Internal Revenue Code other than companies subject to the gross earnings taxes imposed under chapters 211 and 212, shall be allowed as a capital loss carry-over.

(5) This section shall not apply to a life insurance company as defined in the Internal Revenue Code effective and in force on the last day of the income year. For purposes of this section, the unpaid loss reserve adjustment required for nonlife insurance companies under the provisions of Section 832(b)(5) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, shall be applied without making the adjustment in Subparagraph (B) of said Section 832(b)(5).

(b) For purposes of determining net income under this section, the deduction allowed for depreciation shall be determined as provided under the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, provided in making such determination, the provisions of Section 168(k) of said code shall not apply.

(c) (1) Notwithstanding the provisions of subsections (a) and (b) of this section, "net income", in the case of an S corporation, means the percentage of the nonseparately computed income or loss, as defined in Section 1366(a)(2) of the Internal Revenue Code, of such S corporation, without separate state adjustment pursuant to section 12-233 or 12-226a for the compensation of any officer or employee, to which shall be added (A) any taxes imposed under the provisions of this chapter which are paid or accrued in the income year and (B) any taxes in any state of the United States or any political subdivision of such state, or the District of Columbia, imposed on or measured by the income or profits of a corporation which are paid or accrued in the income year as provided in subdivision (2) of this subsection.

(2) For income years commencing prior to January 1, 1997, "net income" means one hundred per cent of the amount computed under subdivision (1) of this subsection; for income years commencing on or after January 1, 1997, and prior to January 1, 1998, "net income" means ninety per cent of the amount computed under subdivision (1) of this subsection; for income years commencing on or after January 1, 1998, and prior to January 1, 1999, "net income" means seventy-five per cent of the amount computed under subdivision (1) of this subsection; for income years commencing on or after January 1, 1999, and prior to January 1, 2000, "net income" means fifty-five per cent of the amount computed under subdivision (1) of this subsection; for income years commencing on or after January 1, 2000, and prior to January 1, 2001, "net income" means thirty per cent of the amount computed under subdivision (1) of this subsection; for income years commencing on or after January 1, 2001, net income of S corporations as computed under subdivision (1) of this subsection shall not be subject to the tax under this chapter. Any S corporation subject to the tax on net income as provided in this section shall be eligible for any credit against the tax otherwise available to taxpayers under this chapter only to the extent and in the same percentage as net income of such S corporation is subject to taxation under this chapter, except that any S corporation with an income year commencing on or after January 1, 1999, but before December 31, 2000, shall be eligible for the entire credit available under sections 8-395, 12-633, 12-634, 12-635 and 12-635a.

(d) Notwithstanding the provisions of subsections (a) and (b) of this section, "net income" shall not include: (1) Twenty per cent of the total proceeds received from the sale of greenhouse gas emission credits on or after January 1, 2008, (2) forty per cent of the total proceeds received from such sale on or after January 1, 2009, (3) sixty per cent of the total proceeds received from such sale on or after January 1, 2010, (4) eighty per cent of the total proceeds received from such sale on or after January 1, 2011, and (5) any proceeds from the sale of greenhouse gas emission credits on or after January 1, 2012.

[(d)] (e) The commissioner may adopt regulations in accordance with chapter 54, relating to mergers or consolidations of corporations providing for the deduction, by the surviving or new corporation provided for in the plan of consolidation, of operating losses that were incurred by a merging or consolidating corporation, respectively, before the merger or consolidation, respectively. Such regulations may follow the provisions of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, or the regulations thereunder.

Statement of Purpose:

To create a pilot program to allow municipalities to impose a buyer's tax on the conveyance of real property, to require the state to purchase more efficient vehicles, to no longer require OPM to report on carbon dioxide emissions, to prohibit the sale of inefficient incandescent lamps, to impose a surcharge on the purchase of incandescent lamps, to allow the abatement of property taxes on hybrid vehicles, and to exclude the sale of greenhouse gas emission credits from income for the purposes of the corporate income tax.

[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.]