AN ACT CONCERNING HOUSING DEVELOPMENT ZONES.

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

Section 1. Section 8-376 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2008):

(a) As used in this section and section 8-378, as amended by this act, "blighted property" means any structure or vacant or unimproved lot or parcel (1) that has significant unremedied building, housing or health code violations; (2) that has a high vacancy rate or is abandoned, vacant or unoccupied; (3) for which taxes are delinquent; or (4) that has been deemed a public nuisance under any provision of the general statutes or any local ordinance; and

(b) Any municipality [which is a distressed municipality as defined in subsection (b) of section 32-9p, on October 1, 1987,] (1) that is classified as a public investment community within the meaning of subdivision (9) of subsection (a) of section 7-545, or (2) in which at least twenty-five per cent of the real property in one or two contiguous United States census tracts or a portion of an individual census tract as determined in accordance with the most recent United States census is blighted property may apply to the Commissioner of Economic and Community Development to designate an area of such municipality as a housing development zone. Any [such area shall consist] municipality that is a public investment community shall designate as a housing development zone an area that consists of one or two contiguous United States census tracts or a portion of an individual census tract as determined in accordance with the most recent United States census. Any municipality that has one or two contiguous census tracts or a portion of an individual census tract as determined in accordance with the most recent United States census in which at least twenty-five per cent of the real property is blighted property shall designate such census tracts as the housing development zone. At least twenty-five per cent of the designated area shall be zoned or allow for multifamily residential dwellings.

Sec. 2. Section 8-378 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2008):

(a) The Commissioner of Economic and Community Development may approve the designation of [up to three areas in the state] qualified portions of a municipality as housing development zones, provided the commissioner shall not approve the designation of more than one housing development zone in any municipality. [Proposals for financial assistance received by the commissioner from eligible developers, as defined in section 8-39, for programs or projects authorized pursuant to chapter 128, 130, 133 or 138 which will be located in a housing development zone shall be accorded a high priority to receive financial assistance from the commissioner.] A municipality applying for approval of the designation shall include information in such application sufficient for the commissioner to determine that such municipality (1) is classified as a public investment community, or (2) has at least twenty-five per cent of the real property in one or two contiguous United States census tracts or a portion of an individual census tract as determined in accordance with the most recent United States census in the municipality is blighted property. The commissioner may remove the designation of any area which has been approved as a housing development zone if such area no longer meets the criteria for designation as such a zone set forth in sections 8-376 and 8-377 or in regulations adopted pursuant to section 8-381, provided no such designation shall be removed less than ten years from the original date of approval of such zone.

(b) The commissioner shall give immediate consideration for financial assistance pursuant to chapter 128, 130, 133, 138 or 588l or section 8-37pp or section 8-336p of the 2008 supplement to the general statutes to proposals from eligible developers, as defined in section 8-39, that will be located in a housing development zone. If a project to be located in a housing development zone is comparable to a project that will not be located in a housing development zone, the commissioner shall give priority to authorization of the project in the housing development zone. The commission shall also give priority to projects located in a housing development that is served by mass transit and sewers.

Sec. 3. Section 32-1m of the 2008 supplement to the general statutes is amended by adding subdivision (16) as follows (Effective July 1, 2008):

(NEW) (16) A detailed summary of projects funded in housing development zones, along with a description of the priority the projects received, the number of projects funded and the amount of funds awarded.

Sec. 4. Subdivision (v) of section 32-222 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2008):

(v) "Targeted investment community" means a municipality which contains an enterprise zone designated pursuant to section 32-70 or a housing development zone designated pursuant to section 8-378, as amended by this act.

Sec. 5. Subsection (d) of section 10-416 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2008):

(d) The commission shall, in consultation with the Commissioner of Revenue Services, adopt regulations, in accordance with chapter 54, to carry out the purposes of this section. Such regulations shall provide that if an historic home located in a housing development zone designated pursuant to section 8-378, as amended by this act, is comparable to an historic home that is not located in a housing development zone, priority for issuance of tax credit vouchers shall be given to the historic home located in the housing development zone. Priority for issuing such vouchers shall also be given to historic homes located in a housing development zone that is served by mass transit and sewers.

Sec. 6. Subsection (d) of section 10-416a of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2008):

(d) The commission shall adopt regulations, in accordance with chapter 54, to carry out the purposes of this section. Such regulations shall include provisions for filing of applications, rating criteria and for timely approval by the commission. Such regulations shall provide that if a certified historic structure located in a housing development zone designated pursuant to section 8-378, as amended by this act, is comparable to a certified historic structure that is not located in a housing development zone, priority for issuance of tax credit vouchers shall be given to the certified historic structure located in the housing development zone. Priority for issuing such vouchers shall also be given to certified historic structures located in housing development zone that are served by mass transit and sewers.

Sec. 7. Subsection (k) of section 8-395 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2008):

(k) The Connecticut Housing Finance Authority, with the approval of the Commissioner of Revenue Services, shall adopt written procedures in accordance with section 1-121 to implement the provisions of this section. Such procedures shall include provisions for issuing tax credit vouchers for cash contributions to housing programs based on a system of ranking housing programs. In establishing such ranking system, the authority shall consider the following: (1) The readiness of the project to be built; (2) use of the funds to build or rehabilitate a specific housing project or to capitalize a revolving loan fund providing low-cost loans for housing construction, repair or rehabilitation to benefit persons of very low, low and moderate income; (3) the extent the project will benefit families at or below twenty-five per cent of the area median income and families with incomes between twenty-five per cent and fifty per cent of the area median income, as defined by the United States Department of Housing and Urban Development; (4) evidence of the general administrative capability of the nonprofit corporation to build or rehabilitate housing; (5) evidence that any funds received by the nonprofit corporation for which a voucher was issued were used to accomplish the goals set forth in the application; and (6) with respect to any income year commencing on or after January 1, 1998: (A) Use of the funds to provide housing opportunities in urban areas and the impact of such funds on neighborhood revitalization; and (B) the extent to which tax credit funds are leveraged by other funds. Ten additional points shall be awarded for projects located in housing development zones. Fifteen additional points shall be awarded for projects located in housing development zones that are served by mass transit and sewers.

Sec. 8. (NEW) (Effective July 1, 2008) On or before February 1, 2009, and annually thereafter, the Commission on Culture and Tourism shall submit a report to the joint standing committee of the General Assembly having cognizance of matters relating to planning and development and to the select committee of the General Assembly having cognizance of matters relating to housing on the issuance of tax credit vouchers for historic homes located in housing development zones pursuant to section 10-416 of the general statutes, as amended by this act, and certified historic structures in housing development zones, pursuant to section 10-426a of the general statutes. Such report shall include detailed information on the vouchers issued for historic homes and certified historic structures located in housing development zones, along with a description of the priority such vouchers received, the number and the amount of such vouchers issued.

Sec. 9. (NEW) (Effective July 1, 2008) In issuing tax credits under the Low Income Tax Credit Program, 26 USC 42, the Connecticut Housing Finance Authority shall award ten points for projects located in housing development zones and fifteen points for projects located in housing development zones that are served by mass transit and sewers.

Sec. 10. (NEW) (Effective July 1, 2008) On or before February 1, 2009, and annually thereafter, the Connecticut Housing Finance Authority shall submit a report on the issuance of tax credits under section 8-395 of the general statutes, as amended by this act, and under the Low Income Tax Credit Program, 26 USC 42 to the joint standing committee of the General Assembly having cognizance of matters relating to planning and development and to the select committee of the General Assembly having cognizance of matters relating to housing. Such report shall include detailed information on the vouchers issued for housing located in housing development zones, along with a description of the priority such vouchers received, the number and amount of such vouchers issued.

Sec. 11. (NEW) (Effective October 1, 2008) (a) Any municipality that is eligible for small town economic assistance under section 4-66g of the 2008 supplement to the general statutes may designate, by ordinance adopted by its legislative body, a nutmeg zone within the municipality. Such ordinance shall identify a specific geographic area as such zone and shall establish criteria and goals for economic activity in the zone.

(b) Upon designation of a nutmeg zone under subsection (a) of this section, the municipality may apply to the Commissioner of Economic and Community Development for state approval of the designation. The municipality seeking the approval of the commissioner for designation of an area of the municipality as a nutmeg zone shall file with the commissioner a preliminary application. Not later than sixty days after receipt of such a preliminary application, the commissioner shall indicate to the municipality, in writing, any recommendations for improving the municipality's application. On or before July 1, 2009, and annually thereafter, the commissioner shall conduct a lottery to select ten nutmeg zones in the state.

(c) The amount of property taxes due under chapter 203 of the general statutes for a facility that is acquired, constructed, substantially renovated or expanded in a nutmeg zone, on or after the effective date of this section, shall be reduced by ten per cent in each of the ten full assessment years following the assessment year in which the acquisition, construction, renovation or expansion of the facility is completed. The state, acting by and in the discretion of the Commissioner of Economic and Community Development, shall enter into a contract with the municipality in which the nutmeg zone is located to provide a grant to the municipality in an amount equal to ten per cent of the amount that would have been due for property taxes except for the provisions of this section. Such grant shall be made annually for the ten assessment years that the taxes due for the facility are reduced.

(d) The Commissioner of Economic and Community Development may adopt regulations, in accordance with chapter 54 of the general statutes, to implement this section.

Statement of Purpose:

To revise the definition of housing development zones and to give development in such zones priority for state assistance and to authorize towns to establish nutmeg zones.

[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.]