Location:
LEGISLATIVE COMMITTEES;
Scope:
Connecticut laws/regulations;

OLR Research Report


March 31, 2011

 

2011-R-0157

COMMERCE BILLS REFERRED TO FINANCE

By: John Rappa, Chief Analyst

You asked for summaries of the bills the Commerce Committee referred to the Finance, Revenue and Bonding Committee.

SB 127, AAC UPDATES TO THE NEIGHBORHOOD ASSISTANCE ACT

This bill:

1. extends eligibility for Neighborhood Assistance Act tax credits to S corporations, limited liability companies, limited liability partnerships and other entities subject to the Business Entity Tax;

2. raises the annual cap on the amount of credit a business can receive from $75,000 to $250,000; and

3. drops the requirement that a contribution must equal or exceed the prior year contributions for activities eligible for Neighborhood Assistance Act credits.

Effective Date: October 1, 2011

SB 903, AA ENCOURAGING CONNECTICUT MANUFACTURING

The bill exempts from the sales tax personnel services employment agencies provide to manufacturers and used directly to manufacture a product.

Effective Date: January 2012 and applicable to sales on or after that date.

SSB 924, AAC ALTERNATIVE FUEL VEHICLES

This bill reestablishes the sales tax exemption for:

1. hybrid passenger cars with a minimum 40 miles per gallon EPA gas mileage rating;

2. new motor vehicles powered exclusively by a clean alternative fuel;

3. equipment converting motor vehicles to clean alternative fuels or a combination of these fuels and other fuels; and

4. equipment incorporated into a compressed natural gas, hydrogen filling, or electric recharging station for vehicles powered by clean alternative fuels.

All of these exemptions are available between October 1, 2011 and October 1, 2013.

The bill also allows hybrid or electric vehicles on limited access highway lanes designated for high occupancy vehicles regardless of the number of passengers they are carrying.

Effective Date: July 1, 2011

SB 1001, AA CREATING THE FIRST FIVE PROGRAM

This bill authorizes substantial economic development assistance under existing programs for projects meeting job creation and investment goals within specified deadlines. The economic and community development commissioner may provide this assistance with the governor's consent to no more than five businesses per year in FY 12 and 13, respectively.

The bill provides for this assistance by:

1. exempting projects from the Manufacturing Assistance Act's funding limits (currently, 90% funding for projects in the 17 targeted investment communities and 50% for projects in the other municipalities),

2. increasing the total authorization for Urban and Industrial Sites Reinvestment tax credits from $500 million to $750 million, and

3. increasing the total authorization for job creation tax credits from $11 million to $20 million.

A business qualifies for substantial assistance if it can:

1. create at least 200 jobs within 24 months after the commissioner approves the assistance or

2. invest at least $25 million and creates 200 jobs within five years of the commissioner's approval.

A redevelopment project (which the bill does not define) qualifies for a preference if it can create 200 jobs sooner than 24 months or five years (for projects investing at least $25 million).

Effective Date: July 1, 2011

SSB 1023, AAC THE USE OF HISTORIC STRUCTURES AND VACANT GOVERNMENT BUILDINGS FOR ECONOMIC DEVELOPMENT

This bill extends the historic preservation tax credits to more types of historic property. Under current law, a project qualifies for credits based on the historic property's current or past use and how it will be used after rehabilitation. Consequently, a project qualifies for credits if it:

1. restores a historic home for someone to own and occupy,

2. converts a historic commercial or industrial property for residential uses, or

3. converts a historic commercial or industrial property for mixed residential and nonresidential uses.

As Table 1 shows, the bill expands the range of eligible projects under the two programs providing credits for rehabilitating historic commercial or industrial property.

Table 1: Historic Preservation Tax Credits for Rehabilitating Historic Commercial or Industrial Property under Current Law and the Bill

Program

Eligible Properties

Eligible Reuses

Current Law

Bill

Current Law

Bill

Historic Commercial or Industrial Property (CGS 10-416a)

Commercial or Industrial

Commercial or Industrial Property

Vacant Historic Government Property

Residential Only

Residential

Mixed Use

Historic Commercial or Industrial Property (CGS 10-416b)

Commercial or Industrial

Commercial or Industrial

Institutional

Mixed Residential and Non residential

Residential with at least four units

Mixed Residential and Nonresidential

Mixed Residential and Nonresidential

Nonresidential only

With respect to the credit under CGS 10-416b, the bill drops the requirement that at least 33% of the square feet in mixed use projects be for residential uses.

Lastly, the bill transfers these two historic preservation tax credit programs from the Connecticut Commission on Culture and Tourism to the Department of Economic and Community Development. (It does not transfer the program providing credits for restoring historic homes for owner-occupancy.)

Effective Date: July 1, 2011 and applicable to income years beginning on or after January 1, 2011.

SB 1133, AAC A MUNICIPAL OPTION TO ABATE PERSONAL PROPERTY TAXES ON SOFTWARE PRODUCTION FACILITIES

This bill extends the local option tax exemption for personal property in a manufacturing facility to personal property in a software production facility. Current law allows municipalities to exempt personal property in manufacturing facilities for specified time periods based on the property's value.

Effective Date: July 1, 2011 and applicable to assessment years beginning on or after October 1, 2011.

SB 1136, AA LOWERING THE THRESHOLDS FOR ANGEL INVESTORS

PA 10-75 authorizes personal income tax credits for investing in start-up, technology-based businesses in Connecticut. This bill lowers, from $100,000 to $25,000, the minimum amount of investment a taxpayer must invest in these companies to claim the credit.

Effective Date: July 1, 2011 and applicable to income years beginning January 1, 2011.

SB 1137, AAC THE CONNECTICUT RIVER BRIDGE

This bill authorizes up to $3.2 million in bonds for repairing the bridge used to carry freight over the Connecticut River between Hartford and East Hartford.

Effective Date: July 1, 2011

SSB 1174, AA AUTHORIZING BONDS OF THE STATE TO ALLOW NONPROFIT-MENTORED STUDENTS TEAMS TO COMMERCIALIZE DORMANT CORPORATE TECHNOLOGY

This bill authorizes up to $3 million in bonds for mentoring university students seeking to commercialize dormant corporate technologies. It specifies that Connecticut Innovations, Inc. must provide the bond proceeds to the “IP Factory” for this purpose, but does not identify it.

Effective Date: July 1, 2011

HB 6221, AAC THE ELIMINATION OF CERTAIN SUNSET DATES

This bill eliminates the July 1, 2010 sunset date for two Connecticut Development Authority (CDA) programs providing bond financing for large-scale development projects.

Both programs use incremental tax revenue to repay the bonds. One program uses incremental property tax revenues to repay the bonds CDA issues on a municipality's behalf to finance information technology projects and redevelop contaminated property. The other uses incremental hotel and, if the legislature approves, sales, admission, dues, cabaret, and admission tax revenue to repay the bonds CDA issues for projects that create jobs and stimulate other business activity.

Effective Date: July 1, 2011

HB 6287, AAC A STUDY OF THE ECONOMIC IMPACT OF REFURBISHING BRIDGEPORT'S PALACE AND MAJESTIC THEATERS

This bill requires DECD to study the economic impact of refurbishing Bridgeport's Palace and Majestic Theaters and report its findings to the Commerce Committee by January 1, 2012.

Effective Date: Upon passage

HB 6289, AA AUTHORIZING BONDS OF THE STATE FOR THE WILLOW PLAZA NEIGHBORHOOD REVITALIZATION ZONE ASSOCIATION

This bill authorizes up to $50,000 in bonds for the Willow Plaza Neighborhood Revitalization Zone Association's afterschool programs and culture awareness. The bond proceeds go to DECD, which must grant them to the association.

Effective Date: July 1, 2011

SHB 6316, AAC THE ESTABLISHMENT OF AN ELECTRONIC BUSINESS PORTAL AT THE OFFICE OF THE SECRETARY OF THE STATE

This bill requires the Secretary of the State's Commercial Record Division to establish an electronic business portal as a single entry point for businesses seeking information about permits and licenses, tax requirements and benefits, and state financial incentives and programs. The portal must provide explanatory information and links to many state agencies, the federal Small Business Administration, and the nonprofit Connecticut Economic Resource Center.

Effective Date: January 1, 2012

HB 6456, AA ESTABLISHING A LEARN HERE, LIVE HERE PROGRAM

This bill creates a mechanism to help students graduating from Connecticut colleges, universities, and vocational-technical high schools to save money for purchasing their first homes. The mechanism segregates and deposits a portion of the participating students' income tax liability for 10 years in a special fund the bill creates. The students may withdraw money from the fund only to purchase a new home. The bill specifies administrative and programmatic requirements.

Effective Date: July 1, 2011, except for the provision requiring DECD to report on the program, which takes effect January 1, 2013.

JR: ek