AN ACT ESTABLISHING A FIRST-TIME HOMEBUYER SAVINGS PROGRAM.

This bill requires the Department of Economic and Community Development (DECD) to establish a voluntary first-time homebuyer savings program for graduates of state public or independent higher education institutions. The program is funded by tax revenue that the state receives from the graduates. Graduates have 10 years from the date of graduation to use money in the fund to purchase a home. Funds unused at the end of this time are transferred to the General Fund. DECD must consult with the Department of Revenue Services (DRS) when establishing the program and adopting and implementing regulations.

Graduates from higher education institutions in the state can enroll in the program beginning January 1, 2010. Beginning on the same date, program participants must elect to have 50% of the amount they pay for state income taxes placed into a special revolving fund that the bill establishes. DRS must place the taxes into the “Connecticut First-Time Homebuyers Fund” for up to 10 years after a participant's graduation date. DECD must use the funds to make payments to program participants buying their first home. The payment must be the equivalent of a participant's income tax contributions while enrolled in the program.

The bill requires the state treasurer to invest the program's funds and credit investment earnings to the General Fund.

It requires the DECD commissioner, within available appropriations and by December 1, 2009, to develop a comprehensive public education outreach program to inform recent graduates about the first-time homebuyer program. The public education program must include information on lifetime savings plans and information on purchasing a home. DECD must begin to implement the outreach program by January 1, 2010.

The bill requires DECD to report on the first-time homebuyer program to the Housing Committee by January 1, 2011 and annually thereafter. The report must provide a review of the program and may include recommendations for legislation.

The bill requires the treasurer to notify the DECD commissioner of the balance in the fund by September 1 annually, beginning in 2010. Any funds segregated for a program participant that are not used to purchase a home are transferred to the General Fund. Presumably, a program participant forfeits his or her program funds after some period of time or under certain circumstances (e. g. , buying a first home in another state). The fund pays the treasurer's administrative costs, if any.

Yea

Nay

(03/10/2009)