PA 07-254—sHB 7282

Finance, Revenue and Bonding Committee

AN ACT CONCERNING PROPERTY TAX DELINQUENCIES OF TELECOMMUNICATIONS COMPANIES, MUNICIPAL BROADBAND NETWORKS, MACHINERY SURCHARGES AND CERTAIN TAX EXEMPTIONS

SUMMARY: This act:

1. allows tax collectors for boroughs and cities to impose interest on unpaid telecommunications property taxes;

2. makes planning for municipal broadband networks that meet certain criteria eligible for Local Capital Improvement Program grants;

3. establishes a permanent 10-member broadband internet coordinating council;

4. specifies the equipment rental period for the 1. 5% state daily rental equipment surcharge; and

5. expands property tax exemptions for certain property owned by, or held in trust for, nonprofit and charitable organizations.

EFFECTIVE DATE: Various, see below.

1 – TELECOMMUNICATIONS PROPERTY TAX DELINQUENCIES

This act allows tax collectors for boroughs and cities to impose an interest penalty on delinquent telecommunications property tax payments. Under prior law, only town tax collectors could do so. The penalty is 1. 5% of the delinquent tax for each month or part of a month from the tax due date until it is paid. The act applies to telecommunications companies that pay property taxes at the statewide rate of 47 mills on the personal property they use to provide telecommunications services.

EFFECTIVE DATE: Upon passage and applicable to assessment years starting on or after October 1, 2006.

2 – MUNICIPAL BROADBAND NETWORKS

The act makes activities related to planning municipal broadband networks an eligible use of Local Capital Improvement Program (LOCIP) grant funds, provided the network has a speed of at least 384,000 bits (384 kB) per second.

By law, LOCIP grants, which are funded by state general obligation bonds, can be used for a variety of municipal capital projects, including constructing roads, public buildings other than schools, and sewage and solid waste facilities. The grants can also be used for preparing and revising local conservation plans and developing floodplain management activities.

EFFECTIVE DATE: October 1, 2007

3 – BROADBAND INTERNET COORDINATING COUNCIL

The act establishes the 10-member Broadband Internet Coordinating Council and specifies its members. It requires the council to (1) monitor trends and developments in the state's effort to develop a statewide, world-class communications infrastructure and (2) report as necessary to the Energy and Technology Committee. The council must meet at least quarterly, starting by September 1, 2008. A majority of the members in office constitutes a quorum.

The council consists of two members each appointed by the governor, the Senate president pro tempore, and the House speaker, and one each appointed by the Senate and House majority and minority leaders. One each of the governor's, Senate president pro tempore's, and House speaker's appointees must have specific expertise in telecommunications. The council must include members from the public and private sectors. The chairperson of the Public Utilities Control Authority and the Office of Policy and Management secretary, or their designees, are ex-officio, non-voting council members and must attend its meetings.

Members serve without compensation, except for necessary expenses incurred in performing their duties. They serve two-year terms and cannot serve more than two consecutive terms. Any member who fails to attend three consecutive meetings or half of all meetings during a calendar year is considered to have resigned. The Senate president pro tempore and the House speaker must jointly choose the council's chairperson as well as a vice-chairperson to act in the chairperson's absence.

EFFECTIVE DATE: July 1, 2007

4 – DAILY RENTAL MACHINERY SURCHARGE

The state imposes a 1. 5% surcharge on the total cost of renting heavy construction, mining, and forestry equipment without an operator for 30 days or less. The act specifies that, for purposes of the surcharge, the rental period for the equipment runs from the date the machinery is rented to the date it is returned to the rental company.

EFFECTIVE DATE: July 1, 2007

5-7 – PROPERTY TAX EXEMPTIONS FOR CHARITABLE & NONPROFIT ORGANIZATION PROPERTY

By law, real or personal property owned by or held in trust for a corporation organized exclusively for one or a combination of scientific, educational, literary, historical, or charitable purposes is exempt from property tax as long as none of its officers, employees, or members receives a (1) pecuniary profit from the property and (2) the corporation files a statement with the local assessor every four years. This act specifies that the real property such a corporation owns, or that is held in trust for it, is eligible for a property tax exemption “regardless of whether” another such corporation uses it.

The act also specifically exempts from property taxes, real property and equipment owned by, or held in trust for, a religious organization and used exclusively as a daycare facility. Such property is already exempt when used exclusively as a school, Connecticut nonprofit camp or recreational facility for religious purposes, or for various other specified purposes.

The new exemptions are subject to an existing law that makes such property taxable or partly taxable when (1) it is not used exclusively for carrying out one or more of the corporation's purposes or (2) rent, profit, or income is derived from it.

Finally, the act makes a conforming change to exclude property covered by the new exemptions from a law giving municipalities the option of exempting real or personal property leased to a federally tax-exempt charitable, religious, or nonprofit organization from property taxes.

EFFECTIVE DATE: October 1, 2007 and applicable to assessment years starting on or after that date.

OLR Tracking: JSL: KM: PF: TS