You asked for a brief summary of bills the Commerce Committee favorably reported to the Finance Committee.

SB 51 – An Act Authorizing Bonds of the State for Economic Development and Infrastructure Projects

This bill authorizes the following general obligation bonds:

1. $2 million for the Department of Social Services for the construction of a YMCA in Ellington,

2. $15 million for the Department of Economic and Community Development (DECD) for capital improvements to the Garde Arts Center in New London, and

3. $7 million ($.25 million in 2009 and $3.375 million each in 2010 and 2011) for DECD for the expansion of the Eugene O'Neill Theater.

EFFECTIVE DATE: July 1, 2009

sSB 885 – An Act Concerning the Tax Incremental Financing Program

This bill extends the Connecticut Development Authority's (CDA) authorization for two tax increment financing (TIF) programs, which under current law, end on July 1, 2010. It (1) eliminates the sunset date for CDA's property tax TIF program and (2) extends the sunset date, to July 1, 2012, for CDA's hotel and sales tax TIF.

EFFECTIVE DATE: Upon passage

SB 968 – An Act Concerning An Expansion of the Job Creation Tax Credit

Under current law, any company that creates at least 10 new full-time jobs in the state may be eligible for a jobs creation tax credit of up to 60% of the state income tax withheld from the new employees' wages for up to five successive years. This bill makes the credit $1,500 per new employee and allows credits for up to three successive years. Total credits for all eligible companies continue to be limited to $10 million per year. By law, the credit applies against the corporation, utility company, and insurance premium taxes.

The bill creates a new category of businesses, a “high impact job applicant,” eligible for the program. It defines a high impact job applicant as any Connecticut company that creates at least 200 new jobs in the state. Credits for these businesses are the same as those for companies that create at least 10 new full-time jobs.

The bill also:

1. eliminates the requirement that the DECD commissioner, in approving the credits, determine whether the increase in jobs is economically viable only with the credit;

2. allows a company to earn the credits on a calendar, rather than income year basis, and carry forward any unused credits for three years; and

3. makes a conforming change to the recapture provision by requiring the taxpayer to repay $1,500 for each new employee below that for which it claimed credits.

EFFECTIVE DATE: October 1, 2009

HB 6423 – An Act Concerning Infrastructure Enhancement at the United Stated Naval Submarine Base- New London

This bill (1) exempts the U.S. Navy, U.S. Department of Defense (DOD), and eligible applicants from having to apply for financial assistance under the Manufacturing Assistance Act (MAA) program for projects these entities fund related to infrastructure improvements at the Groton submarine base and (2) authorizes these entities to qualify for 100% MAA funding for these projects.

Under current law, the DECD commissioner may award up to $50 million to the U.S. Navy or eligible applicants for projects related to enhancing the infrastructure for long-term, on-going naval operations at the Groton submarine base. The bill allows the commissioner to also award the grants to the DOD and specifies that grants to the U.S. Navy or DOD are not subject to any of the governor's executive orders.

The bill exempts from the state's contractor contribution and solicitation ban any state contractor who is a party to a contract between any state agency and the U.S. Navy or DOD. And it exempts from the nondiscrimination and affirmative action laws any contract between the state and the U.S. Navy or DOD.

EFFECTIVE DATE: Upon passage

HB 6424 – An Act Extending the Honor Box and Vending Machine Sales Tax Exemption

This bill exempts carbonated beverages, candy, and confectionaries sold from coin-operated vending machines from the 6% sales tax. Meals, sold from vending machines or honor boxes, and items sold for $.50 or less from a vending machine are already exempt.

EFFECTIVE DATE: October 1, 2009, and applicable to sales on or after October 1, 2009

RP:ak