PA 09-234—sSB 887

Commerce Committee

Planning and Development Committee

Environment Committee

Finance, Revenue and Bonding Committee

Government Administration and Elections Committee


SUMMARY: This act allows municipalities implementing the one-time amnesty program authorized under PA 08-2, NSS to apply amnesty payments against any outstanding tax owed on property. Under prior law, municipalities had to apply delinquent payments against the oldest outstanding tax owed on a property.

The act also makes changes to several unrelated economic development statutes. It:

1. exempts the U. S. Navy and Defense departments and their eligible contractors from certain requirements when using state funds for improving infrastructure at the U. S. Naval Submarine Base—New London,

2. extends the deadline for allocating up to $155 million in state bonds for various Hartford projects,

3. changes the income criterion that improved condominiums and multifamily housing units in enterprise zones must meet to qualify for a property tax exemption,

4. removes the Department of Economic and Community Development (DECD) from the law that automatically terminates the department on July 1, 2013 unless the legislature reestablishes it,

5. requires DECD to incorporate an assessment of two energy programs it administers in its comprehensive annual report and eliminates the requirements under which DECD had separately to report on them, and

6. makes many minor and technical changes to the economic development statutes, including those governing enterprise zone reporting and the strategic economic development plan.

EFFECTIVE DATE: Upon passage, except the provisions regarding the strategic plan and DECD's annual report take effect July 1, 2009.


The law authorizes $50 million in Manufacturing Assistance Act (MAA) bonds for enhancing infrastructure at the Naval Submarine Base—New London to support long-term, ongoing naval operations there. Under prior law, DECD had to grant the bond proceeds to the U. S. Navy and other eligible applicants for this purpose. The act makes the U. S. Defense Department eligible for the grants and changes the Navy reference to U. S. Department of the Navy.

The act exempts the sub base infrastructure project grants and contracts, as well as the Navy and Defense departments and other eligible contractors, from certain requirements that apply to state contracts, subcontractors, and applicants for state financial assistance. It:

1. waives, for these departments and other eligible applicants, the requirement to apply for financial assistance to the DECD commissioner;

2. exempts any state contractor working under a contract between the state and the Navy or Defense departments from restrictions on state contractors' political contributions to candidates for state office; and

3. exempts contracts between the state and either department from the requirement that state contractors and their subcontractors comply with state antidiscrimination laws and affirmative action requirements.

The act also allows DECD to provide grants covering up to 100% of the total infrastructure project costs. Existing law limits MAA funding to 50% to 90% of a project's costs, depending on its location and other specified factors.


The act extends the deadline, from June 30, 2009 to June 30, 2013, for the State Bond Commission to allocate up to $115 million in state bonds for various Hartford projects. The bond authorization covers riverfront infrastructure development; housing rehabilitation; new construction, demolition, and redevelopment projects; and parking.


3 — Enterprise Zone Property Tax Exemption for Residential Property

The state's 17 enterprise zones are relatively small economically distressed areas where businesses qualify for property tax exemptions and corporate business tax incentives if they improve property and create jobs. The act changes the income criterion people living in improved condominiums and multifamily housing units must meet for housing to qualify for a property tax exemption.

Under prior law, the condominiums or the units had to be occupied by people earning no more than 200% of the municipality's median family income. Under the act, they must be occupied by people earning no more than 200% of the median income of the area where the municipality is located, as determined by the U. S. Department of Housing and Urban Development (HUD). HUD annually determines area median income for families adjusted for size.

1 — Reporting and Evaluation

The law specifies a process for evaluating the zones that includes deadlines for submitting data and evaluation reports. The act extends these deadlines.

Prior law required all businesses in the zones, regardless of whether they qualified for or received the zones' tax incentives, to report specified information to their host municipalities every five years, beginning July 1, 2011. The act limits the requirement to those businesses certified to receive the incentives and pushes back the reporting deadline to November 1, 2011.

Prior law required municipalities to submit performance reports to the DECD commissioner every five years, beginning July 1, 2011. The act pushes back this deadline to October 1, 2011. The reports must measure the extent to which the zones achieve their goals.

The law requires the commissioner to submit two consecutive reports to the legislature evaluating the enterprise zones and, with respect to the second report, recommending whether the enterprise zone designation should be removed from any area that has not met its goals. The act pushes back the deadline for the first report from February 1, 2011 to February 1, 2012. It does not change the second report's deadline, which is January 1, 2013.


The law requires the DECD commissioner to prepare a five-year strategic plan addressing a wide range of issues including, the factors, issues, and forces that impede economic development. The first plan is due July 1, 2009. The act requires her to include in the plan a review and evaluation of several programs providing incentives to businesses in designated areas. The programs are:

1. Urban Jobs, which provides grants to businesses in state-designated distressed municipalities;

2. Enterprise Zones, which provides property and corporate tax incentives for improving property and creating jobs; and

3. those programs providing enterprise zone benefits to other targeted areas, including railroad depots, qualified manufacturing plants, entertainment districts, and enterprise corridors.

The review and evaluation must also include an analysis of the enterprise zones that were expanded to include a section of a contiguous municipality and in which plant or closed military base closures occurred.


The act updates a reference to a manual used to determine if projects qualify for regional infrastructure grants. (The legislature has not funded the program since 1993. ) Under prior law, the commissioner had to determine if a project creates manufacturing jobs based on the Standard Industrial Classification System. The act substitutes the North American Industrial Classification System.


The act requires DECD to include in its annual report an assessment of its Biodiesel Distributors Grant and Fuel Diversification Program. It correspondingly eliminates the requirements that DECD prepare the report on the Biodiesel Distributors Grant Program in consultation with the entity DECD selected to run the program and submit it to the Environment and Energy and Technology committees. The act also eliminates a reporting requirement that applies if DECD selects an entity to administer the Fuel Diversification Program. Under prior law, the entity had to submit annual reports to the commissioner about the program.


Enterprise Zone Property Tax Exemption for Residential Property

The law requires municipalities to grant two types of property tax exemptions to taxpayers in enterprise zones who improve their properties. They must exempt 80% of the assessed value of newly constructed or improved factories, warehouses, banks, and other specified property for five years. The state reimburses municipalities for this revenue loss.

Municipalities must also exempt a portion of the assessed value of other types of property, but under a different schedule. Homes, apartments, stores, offices, and other types of property ineligible for the five-year, 80% exemption, qualify for a seven-year exemption. The exemption is 100% of the improvement's assessed value in the first two years; it drops to 50% in the third, and declines by 10% per year in each of the remaining four years. The state does not reimburse municipalities for this revenue loss.

Related Acts

PA 09-166 delays for two years, the Program Review and Investigations Committee's review of agencies and programs the sunset law terminates on specified dates. The termination happens after the review, unless the legislature reestablishes the agencies and programs.

PA 09-93 makes identical changes to the enterprise zone program.

PA 09-233 requires DECD to include an assessment of the Biodiesel Producer Incentive and the Fuel Diversification Grant programs in its comprehensive annual report to the legislature.

OLR Tracking: JR: JH: SS/JR: DF