Your asked about a criterion for claiming tax credits under the Insurance Reinvestment Fund program. By law, people and businesses investing in an insurance company may claim the credits if the company (1) obtains a new facility and (2) creates jobs. The company meets the latter criterion if the new employees it hired to fill these jobs comprise 25% of its workforce. You asked if these employees must all be employed in “the new facility” for the investors to claim the credits.

A company meets the 25% goal based on the total number of people it employs to fill the jobs it creates throughout Connecticut, not just at the new facility. (A new facility may be one the company acquired, leased, or constructed (§ 38a-88a (a) (1) and (5)). But it may count toward its total any current employees it transfers from jobs outside Connecticut to fill the new jobs at the facility. We base this conclusion on a plain reading of the law

CGS § 38a-88a (e) allows investors to claim credits if an insurance or insurance-related company “employs not less than 25% of its workforce in new jobs.” It does not limit this share to those in the new facility. The definitions of “new job” and “new employee” support this conclusion. First, new jobs include only those jobs the company created on or after the date it applied for certification under the insurance reinvestment fund law (CGS § 38a-88a (a) (3)).

As noted above, the company must fill the jobs with “new employees,” which the statute divides into two groups: people hired to fill a new job and people “shifted from an existing location of the subject insurance business outside this state to a new facility in this state” (CGS § 38a-88a (a) (4)). The requirement that new job be in the new facility applies only to those held by an employee who was shifted from a site outside Connecticut.

By law, the company must achieve the 25% job goal over the 10 years during which the investors may claim the credits. Consequently, the economic and community development commissioner must annually determine whether the company did so. If it did, she must issue a certificate of continued eligibility, which allows the investors to claim the portion of the credits the law authorizes for that year (CGS § 38a-88a (g)).

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