Connecticut Seal

General Assembly

 

Substitute Bill No. 5435

    February Session, 2010

 

*_____HB05435FIN___042710____*

AN ACT CONCERNING THE RECOMMENDATIONS OF THE MAJORITY LEADERS' JOB GROWTH ROUNDTABLE.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. (NEW) (Effective July 1, 2010) (a) There is established an account to be known as the "preseed funding account" which shall be a separate, nonlapsing account within the General Fund. The account shall contain any moneys required by law to be deposited in the account. Moneys in the account shall be expended by Connecticut Innovations, Incorporated, for the purposes of providing preseed funding pursuant to the program established in subsection (b) of this section.

(b) Connecticut Innovations, Incorporated, shall establish a program to provide preseed funding for Connecticut businesses, which shall include, but not be limited to, funding for proof of concepts. The program shall also provide support services to high-potential entrepreneurs. The corporation shall enter into an agreement, pursuant to chapter 55a of the general statutes, with a nonprofit corporation providing services and resources to entrepreneurs and businesses to operate such program.

Sec. 2. (Effective July 1, 2010) (a) For the purposes described in subsection (b) of this section, the State Bond Commission shall have the power, from time to time, to authorize the issuance of bonds of the state in one or more series and in principal amounts not exceeding in the aggregate twelve million dollars.

(b) The proceeds of the sale of said bonds, to the extent of the amount stated in subsection (a) of this section, shall be used by Connecticut Innovations, Incorporated, for the purpose of providing preseed funding pursuant to the program established in section 1 of this act.

(c) All provisions of section 3-20 of the general statutes, or the exercise of any right or power granted thereby, which are not inconsistent with the provisions of this section are hereby adopted and shall apply to all bonds authorized by the State Bond Commission pursuant to this section, and temporary notes in anticipation of the money to be derived from the sale of any such bonds so authorized may be issued in accordance with said section 3-20 and from time to time renewed. Such bonds shall mature at such time or times not exceeding twenty years from their respective dates as may be provided in or pursuant to the resolution or resolutions of the State Bond Commission authorizing such bonds. None of said bonds shall be authorized except upon a finding by the State Bond Commission that there has been filed with it a request for such authorization which is signed by or on behalf of the Secretary of the Office of Policy and Management and states such terms and conditions as said commission, in its discretion, may require. Said bonds issued pursuant to this section shall be general obligations of the state and the full faith and credit of the state of Connecticut are pledged for the payment of the principal of and interest on said bonds as the same become due, and accordingly and as part of the contract of the state with the holders of said bonds, appropriation of all amounts necessary for punctual payment of such principal and interest is hereby made, and the State Treasurer shall pay such principal and interest as the same become due.

Sec. 3. (NEW) (Effective July 1, 2010, and applicable to taxable years commencing on or after January 1, 2010) (a) As used in this section:

(1) "Angel investor" or "investor" means an accredited investor, as defined by the Securities and Exchange Commission, who may seek active involvement, such as consulting and mentoring, in a business, but "angel investor" or "investor" does not include (A) persons controlling fifty per cent or more of the Connecticut business invested in by the angel investor or investor, (B) a venture capital company, or (C) any bank, bank and trust company, insurance company, trust company, national bank, savings association or building and loan association for activities that are a part of its normal course of business;

(2) "Cash investment" means money or money equivalent in consideration for qualified securities;

(3) "Connecticut business" means any business owned by an individual or a partnership, association or corporation, and domiciled in Connecticut, or any corporation, even if a wholly-owned subsidiary of a foreign corporation, that does business primarily in Connecticut, or does substantially all of such business's production in Connecticut;

(4) "Qualified securities" means (A) any form of equity, including a general or limited partnership interest, common stock, preferred stock, with or without voting rights, without regard to seniority position and whether or not convertible into common stock, any form of subordinate or convertible debt, or both, with warrants or other means of equity conversion attached, or (B) a debt instrument, including a note or debenture that is secured or unsecured, subordinated to the general creditors of the debtor and requiring no payments of principal, other than principal payments required to be made out of any future profits of the debtor, for at least a seven-year period after commencement of such debt instrument's term.

(b) There shall be allowed a credit against the tax imposed under chapter 229 of the general statutes for a cash investment in the qualified securities of a Connecticut business by an angel investor. The credit shall be in an amount equal to twenty-five per cent of such investor's cash investment, provided no credit shall be greater than one hundred twenty-five thousand dollars. The credit shall be taken in the year in which such cash investment is made by the angel investor.

(c) To be a cash investment qualifying for a tax credit pursuant to this section, such investment shall be in a Connecticut business that (1) has been approved as a qualified Connecticut business pursuant to subsection (d) of this section; (2) had annual gross revenues of less than five million dollars in the most recent income year of such business; (3) has fewer than twenty-five employees, more than half of whom reside in this state; (4) has been operating in this state for less than ten consecutive years; (5) is primarily owned by the management of the business and their families; and (6) received less than four million dollars in cash investments eligible for the tax credits provided by this section. No investor may claim a credit pursuant to this section for cash investments in Connecticut Innovations, Incorporated.

(d) (1) A Connecticut business may apply to Connecticut Innovations, Incorporated, for approval as a Connecticut business qualified to receive cash investments eligible for tax credits pursuant to this section. The application shall include (A) the name of the business and a copy of the organizational documents of such business, (B) a business plan, including a description of the business and the management, product, market and financial plan of the business, (C) a description of the business's innovative and proprietary technology, product or service, (D) a statement of the potential economic impact of the business, including the number, location and types of jobs expected to be created, (E) a description of the qualified securities to be issued, the consideration to be paid for the qualified securities, the amount of any tax credits requested and the earliest year in which such tax credits may be redeemed, (F) a statement of the amount, timing and projected use of the proceeds to be raised from the proposed sale of qualified securities, and (G) such other information as the executive director of Connecticut Innovations, Incorporated, may require.

(2) Said executive director shall, on or before August 1, 2010, and monthly thereafter, compile a list of approved applications, categorized by the estimated amount of tax credits and type of qualified securities offered, submitted by qualified Connecticut businesses.

(e) (1) Any angel investor that intends to provide a cash investment to a business on such list may apply to the Commissioner of Revenue Services to reserve a tax credit in the amount indicated by such investor. The aggregate amount of all tax credits that may be reserved by the Commissioner of Revenue Services shall not exceed six million dollars annually for the fiscal years commencing July 1, 2010, to July 1, 2012, inclusive, and shall not exceed three million dollars in each fiscal year thereafter. No credits may be allowed under this section on or after July 1, 2020.

(2) The amount of the credit allowed to any investor pursuant to this section shall not exceed the amount of tax due from such investor under chapter 229 of the general statutes with respect to such taxable year. Any tax credit not used in the taxable year during which the cash investment was made may be carried forward for the five immediately succeeding taxable years until the full credit has been allowed.

(3) Any credit allowed pursuant to this section may be sold, assigned or otherwise transferred, in whole or in part, to one or more taxpayers, and such taxpayers may sell, assign or otherwise transfer, in whole or in part, such credit. If an investor sells, assigns or otherwise transfers a credit to another taxpayer, the transferor and transferee shall jointly submit written notification of such transfer to the Commissioner of Revenue Services not later than thirty days after such transfer. If such transferee sells, assigns or otherwise transfers a credit under this section to a subsequent transferee, such transferee and such subsequent transferee shall jointly submit written notification of such transfer to the Commissioner of Revenue Services not later than thirty days after such transfer. The notification after each transfer shall include the credit certificate number, the date of transfer, the amount of such credit transferred, the tax credit balance before and after the transfer, the tax identification numbers for both the transferor and the transferee, and any other information required by the Commissioner of Revenue Services. Failure to comply with this subdivision shall result in a disallowance of the tax credit until there is full compliance on the part of the transferor and the transferee and for a second transfer, on the part of the transferee, and the subsequent transferee.

(f) A review of the effectiveness of the credit shall be conducted by Connecticut Innovations, Incorporated, by September 1, 2015. Such review shall be submitted to the joint standing committee of the General Assembly having cognizance of matters relating to commerce.

Sec. 4. Subsection (b) of section 32-35 of the 2010 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2010):

(b) The corporation shall be governed by a board of fifteen directors. Eight members shall be appointed by the Governor, (1) at least six of whom shall be knowledgeable, and have favorable reputations for skill, knowledge and experience, in the development of innovative technology and technological processes including, but not limited to, expertise in academic research, technology transfer and application, the development of technological invention and new enterprise development, and (2) one member shall be a member of an angel investor group in the state. Three members shall be the Commissioner of Economic and Community Development, the Commissioner of Higher Education and the Secretary of the Office of Policy and Management, who shall serve ex officio and shall have all of the powers and privileges of a member of the board of directors. Each ex-officio member may designate his deputy or any member of his staff to represent him at meetings of the corporation with full power to act and vote in his behalf. Four members shall be appointed as follows: One by the president pro tempore of the Senate, one by the minority leader of the Senate, one by the speaker of the House of Representatives and one by the minority leader of the House of Representatives. Each member appointed by the Governor shall serve at the pleasure of the Governor but no longer than the term of office of the Governor or until the member's successor is appointed and qualified, whichever is longer. Each member appointed by a member of the General Assembly shall serve in accordance with the provisions of section 4-1a. A director shall be eligible for reappointment. The Governor shall fill any vacancy for the unexpired term of a member appointed by the Governor. The appropriate legislative appointing authority shall fill any vacancy for the unexpired term of a member appointed by such authority.

Sec. 5. Section 32-41w of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2010):

(a) There is established an early-stage venture capital program to be administered by Connecticut Innovations, Incorporated, to provide preseed financing, seed financing, start-up financing, early or first-stage financing and expansion financing to companies in the state and to provide matching funds for the federal small business innovation research program, as defined in subdivision (4) of section 32-344.

(b) In support of the program established in subsection (a) of this section, the corporation and the Small Business Innovation Research Office, established pursuant to subdivision (42) of section 32-39, as amended by this act, shall establish criteria for awarding such financing and shall develop and implement a plan to market the program.

(c) The board of the corporation shall review and approve each application for such financing.

(d) Funds provided for this section shall be allocated as follows: (1) Not less than five per cent for preseed financing; (2) not less than ten per cent for seed financing; (3) not less than ten per cent for start-up financing; (4) not less than fifteen per cent for early or first stage financing; [and] (5) not less than [forty] thirty per cent and not more than [sixty] fifty per cent on expansion financing, as such terms are defined in section 32-34; and (6) not less than ten per cent on matching grants of fifty per cent not to exceed fifty thousand dollars per grant, for the small business innovation research program. The corporation shall use not more than three per cent of such funds for administration and marketing of such financial aid.

(e) The corporation shall adopt procedures, pursuant to section 1-121, to implement the provisions of this section.

Sec. 6. Section 32-39 of the 2010 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2010):

The purposes of the corporation shall be to stimulate and encourage the research and development of new technologies, businesses and products, to encourage the creation and transfer of new technologies, to assist existing businesses in adopting current and innovative technological processes, to stimulate and provide services to industry that will advance the adoption and utilization of technology, to achieve improvements in the quality of products and services, to stimulate and encourage the development and operation of new and existing science parks and incubator facilities, and to promote science, engineering, mathematics and other disciplines that are essential to the development and application of technology within Connecticut by the infusion of financial aid for research, invention and innovation in situations in which such financial aid would not otherwise be reasonably available from commercial or other sources, and for these purposes the corporation shall have the following powers:

(1) To have perpetual succession as a body corporate and to adopt bylaws, policies and procedures for the regulation of its affairs and conduct of its businesses as provided in section 32-36;

(2) To enter into venture agreements with persons, upon such terms and on such conditions as are consistent with the purposes of this chapter, for the advancement of financial aid to such persons for the research, development and application of specific technologies, products, procedures, services and techniques, to be developed and produced in this state, and to condition such agreements upon contractual assurances that the benefits of increasing or maintaining employment and tax revenues shall remain in this state and shall accrue to it;

(3) To solicit, receive and accept aid, grants or contributions from any source of money, property or labor or other things of value, to be held, used and applied to carry out the purposes of this chapter, subject to the conditions upon which such grants and contributions may be made, including but not limited to, gifts or grants from any department or agency of the United States or the state;

(4) To invest in, acquire, lease, purchase, own, manage, hold and dispose of real property and lease, convey or deal in or enter into agreements with respect to such property on any terms necessary or incidental to the carrying out of these purposes; provided, however, that all such acquisitions of real property for the corporation's own use with amounts appropriated by the state to the corporation or with the proceeds of bonds supported by the full faith and credit of the state shall be subject to the approval of the Secretary of the Office of Policy and Management and the provisions of section 4b-23;

(5) To borrow money or to guarantee a return to the investors in or lenders to any capital initiative, to the extent permitted under this chapter;

(6) To hold patents, copyrights, trademarks, marketing rights, licenses, or any other evidences of protection or exclusivity as to any products as defined herein, issued under the laws of the United States or any state or any nation;

(7) To employ such assistants, agents and other employees as may be necessary or desirable, which employees shall be exempt from the classified service and shall not be employees, as defined in subsection (b) of section 5-270; establish all necessary or appropriate personnel practices and policies, including those relating to hiring, promotion, compensation, retirement and collective bargaining, which need not be in accordance with chapter 68, and the corporation shall not be an employer as defined in subsection (a) of section 5-270; and engage consultants, attorneys and appraisers as may be necessary or desirable to carry out its purposes in accordance with this chapter;

(8) To make and enter into all contracts and agreements necessary or incidental to the performance of its duties and the execution of its powers under this chapter;

(9) To sue and be sued, plead and be impleaded, adopt a seal and alter the same at pleasure;

(10) With the approval of the State Treasurer, to invest any funds not needed for immediate use or disbursement, including any funds held in reserve, in obligations issued or guaranteed by the United States of America or the state of Connecticut and in other obligations which are legal investments for retirement funds in this state;

(11) To procure insurance against any loss in connection with its property and other assets in such amounts and from such insurers as it deems desirable;

(12) To the extent permitted under its contract with other persons, to consent to any termination, modification, forgiveness or other change of any term of any contractual right, payment, royalty, contract or agreement of any kind to which the corporation is a party;

(13) To do anything necessary and convenient to render the bonds to be issued under section 32-41 more marketable;

(14) To acquire, lease, purchase, own, manage, hold and dispose of personal property, and lease, convey or deal in or enter into agreements with respect to such property on any terms necessary or incidental to the carrying out of these purposes;

(15) In connection with any application for assistance under this chapter, or commitments therefor, to make and collect such fees as the corporation shall determine to be reasonable;

(16) To enter into venture agreements with persons, upon such terms and conditions as are consistent with the purposes of this chapter to provide financial aid to such persons for the marketing of new and innovative services based on the use of a specific technology, product, device, technique, service or process;

(17) To enter into limited partnerships or other contractual arrangements with private and public sector entities as the corporation deems necessary to provide financial aid which shall be used to make investments of seed venture capital in companies based in or relocating to the state in a manner which shall foster additional capital investment, the establishment of new businesses, the creation of new jobs and additional commercially-oriented research and development activity. The repayment of such financial aid shall be structured in such manner as the corporation deems will best encourage private sector participation in such limited partnerships or other arrangements. The board of directors, executive director, officers and staff of the corporation may serve as members of any advisory or other board which may be established to carry out the purposes of this subdivision;

(18) To account for and audit funds of the corporation and funds of any recipients of financial aid from the corporation;

(19) To advise the Governor, the General Assembly, the Commissioner of Economic and Community Development and the Commissioner of Higher Education on matters relating to science, engineering and technology which may have an impact on state policies, programs, employers and residents, and on job creation and retention;

(20) To promote technology-based development in the state;

(21) To encourage and promote the establishment of and, within available resources, to provide financial aid to advanced technology centers;

(22) To maintain an inventory of data and information concerning state and federal programs which are related to the purposes of this chapter and to serve as a clearinghouse and referral service for such data and information;

(23) To conduct and encourage research and studies relating to technological development;

(24) To provide technical or other assistance and, within available resources, to provide financial aid to the Connecticut Academy of Science and Engineering, Incorporated, in order to further the purposes of this chapter;

(25) To recommend a science and technology agenda for the state that will promote the formation of public and private partnerships for the purpose of stimulating research, new business formation and growth and job creation;

(26) To encourage and provide technical assistance and, within available resources, to provide financial aid to existing manufacturers and other businesses in the process of adopting innovative technology and new state-of-the-art processes and techniques;

(27) To recommend state goals for technological development and to establish policies and strategies for developing and assisting technology-based companies and for attracting such companies to the state;

(28) To promote and encourage and, within available resources, to provide financial aid for the establishment, maintenance and operation of incubator facilities;

(29) To promote and encourage the coordination of public and private resources and activities within the state in order to assist technology-based entrepreneurs and business enterprises;

(30) To provide services to industry that will stimulate and advance the adoption and utilization of technology and achieve improvements in the quality of products and services;

(31) To promote science, engineering, mathematics and other disciplines that are essential to the development and application of technology;

(32) To coordinate its efforts with existing business outreach centers, as described in section 32-9qq;

(33) To develop a marketing campaign that promotes the state as a place of innovation;

[(33)] (34) To do all acts and things necessary and convenient to carry out the purposes of this chapter;

[(34)] (35) To accept from the department: (A) Financial assistance, (B) revenues or the right to receive revenues with respect to any program under the supervision of the department, and (C) loan assets or equity interests in connection with any program under the supervision of the department; to make advances to and reimburse the department for any expenses incurred or to be incurred by it in the delivery of such assistance, revenues, rights, assets, or interests; to enter into agreements for the delivery of services by the corporation, in consultation with the department, the Connecticut Housing Finance Authority and the Connecticut Development Authority, to third parties which agreements may include provisions for payment by the department to the corporation for the delivery of such services; and to enter into agreements with the department or with the Connecticut Development Authority or Connecticut Housing Finance Authority for the sharing of assistants, agents and other consultants, professionals and employees, and facilities and other real and personal property used in the conduct of the corporation's affairs;

[(35)] (36) To transfer to the department: (A) Financial assistance, (B) revenues or the right to receive revenues with respect to any program under the supervision of the corporation, and (C) loan assets or equity interests in connection with any program under the supervision of the corporation, provided the transfer of such financial assistance, revenues, rights, assets or interests is determined by the corporation to be practicable, within the constraints and not inconsistent with the fiduciary obligations of the corporation imposed upon or established upon the corporation by any provision of the general statutes, the corporation's bond resolutions or any other agreement or contract of the corporation and to have no adverse effect on the tax-exempt status of any bonds of the state;

[(36)] (37) With respect to any capital initiative, to create, with one or more persons, one or more affiliates and to provide, directly or indirectly, for the contribution of capital to any such affiliate, each such affiliate being expressly authorized to exercise on such affiliate's own behalf all powers which the corporation may exercise under this section, in addition to such other powers provided to it by law;

[(37)] (38) To provide financial aid to enable biotechnology and other technology companies to lease, acquire, construct, maintain, repair, replace or otherwise obtain and maintain production, testing, research, development, manufacturing, laboratory and related and other facilities, improvements and equipment;

[(38)] (39) To provide financial aid to persons developing smart buildings, as defined in section 32-23d, incubator facilities or other information technology intensive office and laboratory space;

[(39)] (40) To administer the Renewable Energy Investment Fund established pursuant to section 16-245n;

[(40)] (41) To provide financial aid to persons developing or constructing the basic buildings, facilities or installations needed for the functioning of the media and motion picture industry in this state;

[(41)] (42) To coordinate the development and implementation of strategies regarding technology-based talent and innovation among state and quasi-public agencies, including the creation and administration of the Connecticut Small Business Innovation Research Office to act as a centralized clearinghouse and provide technical assistance to applicants in developing small business innovation research programs in conformity with the federal program established pursuant to the Small Business Research and Development Enhancement Act of 1992, P.L. 102-564, as amended, and other proposals.

Sec. 7. Subsection (h) of section 32-35 of the 2010 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2010):

(h) The corporation shall provide funding for the operation of the Connecticut Small Business Innovation Research Office in accordance with subdivision [(41)] (42) of section 32-39, as amended by this act.

Sec. 8. Section 32-1c of the 2010 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2010):

(a) In addition to any other powers, duties and responsibilities provided for in this chapter, chapter 131, chapter 579 and section 4-8 and subsection (a) of section 10-409, the commissioner shall have the following powers, duties and responsibilities: (1) To administer and direct the operations of the Department of Economic and Community Development; (2) to report annually to the Governor, as provided in section 4-60; (3) to conduct and administer the research and planning functions necessary to carry out the purposes of said chapters and sections; (4) to encourage and promote the development of industry and business in the state and to investigate, study and undertake ways and means of promoting and encouraging the prosperous development and protection of the legitimate interest and welfare of Connecticut business, industry and commerce, within and outside the state; (5) to serve, ex officio as a director on the board of Connecticut Innovations, Incorporated; (6) to serve as a member of the Connecticut Energy Advisory Board, the Energy Conservation Management Board and the Committee of Concern for Connecticut Jobs; (7) to promote and encourage the location and development of new business in the state as well as the maintenance and expansion of existing business and for that purpose to cooperate with state and local agencies and individuals both within and outside the state; (8) to plan and conduct a program of information and publicity designed to attract tourists, visitors and other interested persons from outside the state to this state and also to encourage and coordinate the efforts of other public and private organizations or groups of citizens to publicize the facilities and attractions of the state for the same purposes; (9) to advise and cooperate with municipalities, persons and local planning agencies within the state for the purpose of promoting coordination between the state and such municipalities as to plans and development; (10) to assign adequate staff to provide technical assistance to businesses in the state in exporting, manufacturing and cluster-based initiatives and to provide guidance and advice on regulatory matters; (11) to provide all necessary staff, services, accounting and office space and equipment required by the Connecticut Development Authority subject to the provisions of section 4b-23, where real estate acquisitions are involved; [(11)] (12) to aid minority businesses in their development; [(12)] (13) to appoint such assistants, experts, technicians and clerical staff, subject to the provisions of chapter 67, as are necessary to carry out the purposes of said chapters and sections; [(13)] (14) to employ other consultants and assistants on a contract or other basis for rendering financial, technical or other assistance and advice; [(14)] (15) to acquire or lease facilities located outside the state subject to the provisions of section 4b-23; [(15)] (16) to advise and inform municipal officials concerning economic development and collect and disseminate information pertaining thereto, including information about federal, state and private assistance programs and services pertaining thereto; [(16)] (17) to inquire into the utilization of state government resources and coordinate federal and state activities for assistance in and solution of problems of economic development and to inform and advise the Governor about and propose legislation concerning such problems; [(17)] (18) to conduct, encourage and maintain research and studies relating to industrial and commercial development; [(18)] (19) to prepare and review model ordinances and charters relating to these areas; [(19)] (20) to maintain an inventory of data and information and act as a clearinghouse and referral agency for information on state and federal programs and services relative to the purpose set forth herein. The inventory shall include information on all federal programs of financial assistance for defense conversion projects and other projects consistent with a defense conversion strategy and shall identify businesses which would be eligible for such assistance and provide notification to such business of such programs; [(20)] (21) to conduct, encourage and maintain research and studies and advise municipal officials about forms of cooperation between public and private agencies designed to advance economic development; [(21)] (22) to promote and assist the formation of municipal and other agencies appropriate to the purposes of this chapter; [(22)] (23) to require notice of the submission of all applications by municipalities and any agency thereof for federal and state financial assistance for economic development programs as relate to the purposes of this chapter; [(23)] (24) with the approval of the Commissioner of Administrative Services, to reimburse any employee of the department, including the commissioner, for reasonable business expenses, including but not limited to, mileage, travel, lodging, and entertainment of business prospects and other persons to the extent necessary or advisable to carry out the purposes of subdivisions (4), (7), (8) and (11) of this subsection and other provisions of this chapter; [(24)] (25) to assist in resolving solid waste management issues; [(25)] (26) (A) to serve as an information clearinghouse for various public and private programs available to assist businesses, (B) to identify specific micro businesses, as defined in section 32-344, whose growth and success could benefit from state or private assistance and contact such small businesses in order to (i) identify their needs, (ii) provide information about public and private programs for meeting such needs, including, but not limited to, technical assistance, job training and financial assistance, and (iii) arrange for the provision of such assistance to such businesses; [and (26)] (27) to enhance and promote the digital media and motion picture industries in the state; (28) to develop a marketing campaign that promotes Connecticut as a place of innovation; and (29) to execute the steps necessary to implement the knowledge corridor agreement with Massachusetts to promote the biomedical device industry.

(b) The Commissioner of Economic and Community Development may make available technical and financial assistance and advisory services to any appropriate agency, authority or commission for planning and other functions pertinent to economic development provided any financial assistance to a regional planning agency or a regional council of elected officials shall have the prior approval of the Secretary of the Office of Policy and Management or his designee. Financial assistance shall be rendered upon such contractual arrangements as may be agreed upon by the commissioner and any such agency, authority or commission in accordance with their respective needs, and the commissioner may determine the qualifications of personnel or consultants to be engaged for such assistance.

(c) The Commissioner of Economic and Community Development [is authorized to] shall do all things necessary to apply for, qualify for and accept any federal funds made available or allotted under any federal act for planning or any other projects, programs or activities which may be established by federal law, for any of the purposes, or activities related thereto, of the Department of Economic and Community Development and said Commissioner of Economic and Community Development shall administer any such funds allotted to the department in accordance with federal law. The commissioner may enter into contracts with the federal government concerning the use and repayment of such funds under any such federal act, the prosecution of the work under any such contract and the establishment of any disbursement from a separate account in which federal and state funds estimated to be required for plan preparation or other eligible activities under such federal act shall be kept. Said account shall not be a part of the General Fund of the state or any subdivision of the state. The commissioner shall report on activities to apply for, qualify for and accept funds under this subsection in its annual report submitted pursuant to section 32-1m.

(d) The powers and duties enumerated in this section shall be in addition to and shall not limit any other powers or duties of the Commissioner of Economic and Community Development contained in any other law.

Sec. 9. Section 32-222 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2010):

As used in sections 32-220 to 32-234, inclusive: (a) "Business development project" means a project undertaken by an eligible applicant involving one or more of the following:

(1) The construction, substantial renovation, improvement or expansion of a facility;

(2) The acquisition of new machinery and equipment;

(3) The acquisition, improvement, demolition, cultivation or disposition of real property, or combinations thereof, or the remediation of contaminated real property;

(4) The creation at a facility, within twenty-four months of the initiation of a hiring program, not less than ten new jobs or an increase in the number of persons employed at the facility of twenty per cent, whichever is greater;

(5) Economic diversification of the economy of an area of the state or manufacturing or other economic base business where such area or business is substantially reliant upon defense and related industry;

(6) Participation in the avoidance of an imminent plant closing or relocation by a manufacturing or other economic base business or assist or improve the economy of an area of the state which has been or is likely to be significantly and adversely impacted by one or more major plant closings or relocations;

(7) Support research and development or commercialization of technologies, products, processes or techniques of a manufacturing or other economic base business;

(8) Creation or support of organizations and activities specifically leveraging federal resources that provide technical and engineering assistance to small manufacturers or other economic base businesses to assist them with the design, testing, manufacture and marketing of new products, the exporting of state products and services, and the instruction and implementation of new techniques and technologies;

(9) Support of substantial workforce development efforts;

(10) Promotion of community conservation or development or improvement of the quality of life for urban residents of the state; [or]

(11) Promotion of the revitalization of underutilized, state-owned former railroad depots and areas adjacent to such depots; or

(12) Promotion of export activities, including sponsorship of programs that support exportation, assistance to companies in accessing federal Department of Commerce services, and provision of marketing materials and web site improvements for exporters;

(b) "Business support services" means activities related to a municipal development project or business development project which support the economic competitiveness of manufacturing or exporting or economic base businesses or which further the interests of the state, including, but not limited to, facilities and services related to day care, job training, education, transportation, employee housing, energy conservation, pollution control and recycling, provided activities related to employee housing shall be limited to feasibility and implementation studies;

(c) "Commissioner" means the Commissioner of Economic and Community Development;

(d) "Economic base business" means a business that the commissioner determines will materially contribute to the economy of the state by creating or retaining jobs, exporting products or services beyond the state's boundaries, encouraging innovation in products or services, adding value to products or services or otherwise supporting or enhancing existing activities important to the economy of the state;

(e) "Economic cluster" means an economic cluster, as defined in section 32-4e, recognized by the commissioner;

(f) "Department" means the Department of Economic and Community Development;

(g) "Development plan" means a plan for a municipal development project prepared in accordance with the provisions of subsection (b) of section 32-223;

(h) "Eligible applicant" means any for-profit or nonprofit organization, or any combination thereof, any municipality, regional planning agency or any combination thereof and further provided, in the case of a loan made by the Connecticut Development Authority in which the department purchases a participation interest, "eligible applicant" means the for-profit or nonprofit organization, or any combination thereof, that will receive the proceeds of such loan;

(i) "Financial assistance" means grants, funds for the purchase of insurance policies and payment of deductibles for insurance policies to cover remediation costs, extensions of credit, loans or loan guarantees, participation interests in loans made to eligible applicants by the Connecticut Development Authority or combinations thereof;

(j) "For-profit organization" means a for-profit partnership or sole proprietorship or corporation or limited liability company which is an economic base business or has a North American Industrial Classification code of 311111 through 339999 or 493110, 493120, 493130, 493190, 511210, 512110, 512120, 512191, 522210, 522293, 522294, 522298, 522310, 522320, 522390, 523110, 523120, 523130, 523140, 523210, 523910, 524113, 524114, 524126, 524127, 524128, 524130, 524292, 541711, 541712, 551111, 551112, 551114, 561422, 611310, 611410, 611420, 611430, 611513, 611519, 611710 and 624410 or any business that is part of an economic cluster, or any establishment or auxiliary or operating unit thereof, as defined in the North American Industrial Classification System Manual, which has demonstrated to the satisfaction of the commissioner that it has the qualifications, including financial qualifications, necessary to carry out a business development project;

(k) "Implementing agency" means one of the following agencies designated by a municipality under section 32-223: (1) An economic development commission, redevelopment agency; sewer authority or sewer commission; public works commission; water authority or water commission; port authority or port commission or harbor authority or harbor commission; parking authority or parking commission; (2) a nonprofit development corporation; or (3) any other agency designated and authorized by a municipality to undertake a project and approved by the commissioner;

(l) "Municipal development project" means a business development project through which real property is acquired by a municipality or implementing agency as part of such project;

(m) "Municipality" means a town, city, consolidated town and city or consolidated town and borough;

(n) "Nonprofit organization" means a municipality or nonprofit corporation as defined in section 33-1002 and organized under the laws of this state and for purposes of this chapter includes any constituent unit of the state system of higher education;

(o) "Planning commission" means a planning and zoning commission designated pursuant to section 8-4a or a planning commission created pursuant to section 8-19;

(p) "Project" means a municipal development project or business development project;

(q) "Project area" means the area within which a municipal development project or business development project is located;

(r) "Real property" means land, buildings and other structures and improvements thereto, subterranean or subsurface right, any and all easements, air rights and franchises of any kind or nature;

(s) "Site and infrastructure improvements" means improvements to: (1) Sanitary sewer facilities; (2) natural gas pipes, electric, telephone and telecommunications conduits and other facilities and waterlines and water supply facilities, except for any such pipes, wires, conduits, waterlines or any such pipes, wires, conduits, waterlines or facilities which a public service company, as defined in section 16-1, water company, as defined in section 25-32a, or municipal utility is required to install pursuant to any provision of the general statutes or any special act, regulation or order of the Department of Public Utility Control or a certificate of public convenience and necessity; (3) storm drainage facilities, including facilities to control flooding; (4) site grading, landscaping, environmental improvements, including remediation of contaminated sites, parking facilities, roadways and related appurtenances; (5) railroad spurs; (6) public port or docking facilities; and (7) such other related improvements necessary or appropriate to carry out the project;

(t) "State" means the state of Connecticut;

(u) "Targeted investment community" means a municipality which contains an enterprise zone designated pursuant to section 32-70;

(v) "Total project cost" means costs of any kind or nature relating to the planning, implementation and completion of a municipal or business development project;

(w) "Legislative body" means (1) the board of selectmen in a town that does not have a charter, special act or home rule ordinance relating to its government, or (2) the council, board of aldermen, representative town meeting, board of selectmen or other elected legislative body described in a charter, special act or home rule ordinance relating to its government in a city, consolidated town and city, consolidated town and borough or a town having a charter, special act, consolidation ordinance or home rule ordinance relating to its government.

Sec. 10. Subdivision (3) of section 10-282 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2010):

(3) "School building project", except as used in section 10-289, means (A) the construction, purchase, extension, replacement, renovation or major alteration of a building to be used for public school purposes, including the equipping and furnishing of any such construction, purchase, extension, replacement, renovation or major alteration, the improvement of land therefor, or the improvement of the site of an existing building for public school purposes, but shall not include the cost of a site, except as provided in subsection (b) of section 10-286d; (B) the construction and equipping and furnishing of any such construction of any building which the towns of Norwich, Winchester and Woodstock may provide by lease or otherwise for use by the Norwich Free Academy, Gilbert School and Woodstock Academy, respectively, in furnishing education for public school pupils under the provisions of section 10-34; [and] (C) the construction, purchase, extension, replacement, renovation or major alteration of a building to be used for public school purposes for which the primary purpose is energy efficiency improvements or upgrades that meet the standards imposed by section 16a-38k; and (D) the addition to, renovation of and equipping and furnishing of any such addition to or renovation of any building which may be leased, upon the approval of the Commissioner of Education, to any local or regional board of education for a term of twenty years or more for use by such local or regional board in furnishing education of public school pupils;

Sec. 11. Section 12-217ii of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2010, and applicable to income or taxable years, as appropriate, commencing on or after January 1, 2011):

(a) As used in this section:

(1) "Commissioner" means the Commissioner of Economic and Community Development;

(2) "Income year" means, with respect to entities subject to the insurance premiums tax under chapter 207, the corporation business tax under this chapter or the utilities company tax under chapter 212, the income year as determined under each of said chapters, as the case may be or, with respect to affected business entities, the taxable year as determined under chapter 229;

(3) "Taxpayer" means a person subject to tax under chapter 207, this chapter or chapter 212, or an affected business entity, as defined in section 12-284b subject to tax under chapter 229;

(4) "New job" means a full-time job which (A) did not exist in this state prior to a taxpayer's application to the commissioner for an eligibility certificate under this section for a job creation credit, and (B) is filled by a new employee;

(5) "New employee" means a [person] Connecticut resident hired by the taxpayer to fill a new full-time job. A new employee does not include a person who was employed in Connecticut by a related person with respect to the taxpayer during the prior twelve months;

(6) "Full-time job" means a job in which an employee is required to work at least thirty-five or more hours per week. A full-time job does not include a temporary or seasonal job;

(7) "Related person" means (A) a corporation, limited liability company, partnership, association or trust controlled by the taxpayer, (B) an individual, corporation, limited liability company, partnership, association or trust that is in control of the taxpayer, (C) a corporation, limited liability company, partnership, association or trust controlled by an individual, corporation, limited liability company, partnership, association or trust that is in control of the taxpayer, or (D) a member of the same controlled group as the taxpayer; and

(8) "Control", with respect to a corporation, means ownership, directly or indirectly, of stock possessing fifty per cent or more of the total combined voting power of all classes of the stock of such corporation entitled to vote. "Control", with respect to a trust, means ownership, directly or indirectly, of fifty per cent or more of the beneficial interest in the principal or income of such trust. The ownership of stock in a corporation, of a capital or profits interest in a partnership, limited liability company or association or of a beneficial interest in a trust shall be determined in accordance with the rules for constructive ownership of stock provided in Section 267(c) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, other than paragraph (3) of said Section 267(c).

(b) (1) There is established a jobs creation tax credit program whereby a taxpayer who creates [at least ten] a new [jobs] job in Connecticut may be allowed a credit against the tax imposed under chapter 207, this chapter, [or] chapter 212 or chapter 229, in an amount up to [sixty per cent of the income tax deducted and withheld from the wages of new employees and paid over to the state pursuant to chapter 229] fifteen per cent of the wages paid to a new employee, provided such new job provides the employee with wages greater than or equal to eighty per cent of the state median income and health care benefits.

(2) For each new employee, [credits] a maximum annual credit of four thousand dollars may be granted for [five] three successive years. Such credit shall be issued in installments over three years.

(3) The credit shall be claimed in the income year in which it is earned. Any credits not used in a tax year shall expire.

(c) (1) Any taxpayer planning to claim a credit under the provisions of this section shall apply to the commissioner in accordance with the provisions of this section. Credits shall be issued on a first-come, first-served basis. The application shall be on a form provided by the commissioner, and shall contain sufficient information [concerning the number of new jobs to be created, feasibility studies or business plans for the increased number of jobs, projected state and local revenue that might derive as a result of the job growth and other information necessary to demonstrate that there will be net benefits to the economy of the municipality and the state] to confirm that a job was created meeting the requirements in subdivision (1) of subsection (b) of this section, and a state resident was hired. The commissioner [shall] may impose a fee for such application as the commissioner deems appropriate.

[(d) The commissioner shall determine whether (1) the taxpayer making the application is eligible for the tax credit, and (2) the proposed job growth (A) is economically viable only with use of the tax credit, (B) would provide a net benefit to economic development and employment opportunities in the state, and (C) conforms to the state plan of conservation and development prepared pursuant to section 16a-24. The commissioner may require the applicant to submit such additional information as may be necessary to evaluate the application.

(e) (1) The commissioner, upon consideration of the application and any additional information the commissioner requires, may approve the credit application, in whole or in part, if the commissioner concludes that the increase in the number of jobs is economically viable only with the use of the tax credit and that the revenue generated due to economic development and employment opportunities created in the state exceeds the credit and any other credits to be taken. If the commissioner disapproves an application, the commissioner shall specifically identify the defects in the application and specifically explain the reasons for the disapproval. The commissioner shall render a decision on an application not later than ninety days after the date of its receipt by the commissioner.]

(2) The total amount of credits granted to all taxpayers shall not exceed [ten] twenty-five million dollars in any one fiscal year.

(3) A credit under this section may be granted to a taxpayer for not more than [five] three successive income years.

(4) The commissioner may combine approval of a credit application with the exercise of any of the commissioner's other powers, including, but not limited to, the provision of other forms of financial assistance.

[(f)] (d) Upon approving a taxpayer's credit application, the commissioner shall issue a credit allocation notice certifying that the credits will be available to be claimed by the taxpayer if the taxpayer otherwise meets the requirements of this section. No later than thirty days after the close of the taxpayer's income year, the taxpayer shall provide information to the commissioner regarding (1) the number of new jobs created for the year and the [income tax deducted and withheld from the wages of such new employees and paid over to the state for such year] wages paid for each new job, and (2) confirmation that such new employees receive health benefits. The commissioner shall issue a certificate of eligibility that includes the taxpayer's name, the number of new jobs created, and the amount of the credit certified for the year. The certificate shall be issued by the commissioner sixty days after the close of the taxpayer's income year or thirty days after the information is provided, whichever comes first.

[(g)] (e) The commissioner shall, upon request, provide a copy of the certificate of eligibility issued under subsection [(f)] (d) of this section to the Commissioner of Revenue Services.

[(h)] (f) (1) If (A) the number of new employees on account of which a taxpayer claimed the credit allowed by this section decreases to less than the number for which the commissioner issued an eligibility certificate during any of the four years succeeding the first full income year following the issuance of an eligibility certificate, and (B) those employees are not replaced by other employees who have not been shifted from an existing location of the taxpayer or a related person in this state, the taxpayer shall be required to recapture a percentage of the credit allowed under this section on its tax return, as determined under the provisions of subdivision (2) of this subsection. The commissioner shall provide notice of the required recapture amount to both the taxpayer and the Commissioner of Revenue Services.

(2) If the taxpayer is required under the provisions of subdivision (1) of this subsection to recapture a portion of the credit during (A) the first of such four years, then ninety per cent of the credit allowed shall be recaptured on the tax return required to be filed for such year, (B) the second of such four years, then sixty-five per cent of the credit allowed for the entire period of eligibility shall be recaptured on the tax return required to be filed for such year, (C) the third of such four years, then fifty per cent of the credit allowed for the entire period of eligibility shall be recaptured on the tax return required to be filed for such year, and (D) the fourth of such four years, then thirty per cent of the credit allowed for the entire period of eligibility shall be recaptured on the tax return required to be filed for such year.

Sec. 12. (NEW) (Effective July 1, 2010) (a) There is established a task force to study ways in which state agencies and departments can reduce or eliminate duplicative procedures and the amount of paper used and how, when practicable, technology can be employed to help in such reduction or elimination.

(b) The task force shall consist of eleven members, including the Commissioner of Administrative Services, the Chief Information Officer of the Department of Information Technology and the Secretary of the Office of Policy and Management, or their designees, and eight members who shall be corporate executives, economists, information technology and any other representative interests deemed appropriate by the appointing authority: (1) Two members shall be appointed by the speaker of the House of Representatives; (2) two members shall be appointed by the president pro tempore of the Senate; (3) one member shall be appointed by the majority leader of the House of Representatives; (4) one member shall be appointed by the majority leader of the Senate; (5) one member shall be appointed by the minority leader of the House of Representatives; and (6) one member shall be appointed by the minority leader of the Senate.

(c) All appointments of commission members shall be made not later than thirty days after the effective date of this section. Any vacancy shall be filled by the appointing authority.

(d) The speaker of the House of Representatives and the president pro tempore of the Senate shall select the chairpersons of the commission from among the members of the commission. Such chairpersons shall schedule the first meeting of the commission, which shall be held not later than sixty days after the effective date of this section.

(e) The members of the commission shall serve without compensation but shall be reimbursed for actual expenses incurred while engaged in the duties of the commission.

(f) The administrative staff of the joint standing committee of the General Assembly having cognizance of matters relating to commerce shall serve as administrative staff of the commission.

(g) Not later than February 1, 2011, the commission shall submit a report on its findings and recommendations to the joint standing committee of the General Assembly having cognizance of matters relating to commerce, in accordance with the provisions of section 11-4a of the general statutes.

Sec. 13. Section 38a-88a of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2010):

(a) As used in this section:

(1) "Facility" means an insurance business facility;

(2) "Insurance business" means a business with a North American Industry Classification System code of 524113 to 524298, inclusive, that is engaged in the business of insuring risks or of providing services necessary to the business of insuring risks;

(3) "New job" means a job that did not exist in the business of a subject insurance business in this state prior to the subject insurance business's application to the commissioner for an eligibility certificate under this section for a new facility and that is filled by a new employee, but does not include a job created when an employee is shifted from an existing location of the subject insurance business in this state to a new facility;

(4) "New employee" means a person hired by a subject insurance business to fill a position for a new job or a person shifted from an existing location of the subject insurance business outside this state to a new facility in this state, provided (A) in no case shall the total number of new employees allowed for purposes of this credit exceed the total increase in the taxpayer's employment in this state, which increase shall be the difference between (i) the number of employees employed by the subject insurance business in this state at the time of application for an eligibility certificate to the commissioner plus the number of new employees who would be eligible for inclusion under the credit allowed under this section without regard to this calculation, and (ii) the highest number of employees employed by the subject insurance business in this state in the year preceding the subject insurance business's application for an eligibility certificate to the commissioner and (B) a person shall be deemed to be a "new employee" only if such person's duties in connection with the operation of the facility are on a regular, full-time, or equivalent thereof, and permanent basis;

(5) "New facility" means a facility which (A) is acquired by, leased to, or constructed by, a subject insurance business on or after the date of the subject insurance business's application to the commissioner for an eligibility certificate under this section, unless, upon application of the subject insurance business and upon good and sufficient cause shown, the commissioner waives the requirement that such activity take place after the application, and (B) was not in service or use during the one-year period immediately prior to the date of the subject insurance business's application to said commissioner for an eligibility certificate under this section, unless upon application of the subject insurance business and upon good and sufficient cause shown, the commissioner consents to waiving the one-year period;

(6) "Related person" means (A) a corporation, limited liability company, partnership, association or trust controlled by the taxpayer or subject insurance business, as the case may be, (B) an individual, corporation, limited liability company, partnership, association or trust that is in control of the taxpayer or subject insurance business, as the case may be, (C) a corporation, limited liability company, partnership, association or trust controlled by an individual, corporation, limited liability company, partnership, association or trust that is in control of the taxpayer or subject insurance business, as the case may be, or (D) a member of the same controlled group as the taxpayer or subject insurance business, as the case may be. For purposes of this section, "control", with respect to a corporation, means ownership, directly or indirectly, of stock possessing fifty per cent or more of the total combined voting power of all classes of the stock of such corporation entitled to vote. "Control", with respect to a trust, means ownership, directly or indirectly, of fifty per cent or more of the beneficial interest in the principal or income of such trust. The ownership of stock in a corporation, of a capital or profits interest in a partnership or association or of a beneficial interest in a trust shall be determined in accordance with the rules for constructive ownership of stock provided in Section 267(c) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, other than paragraph (3) of such section;

(7) "Moneys of the taxpayer" means all amounts invested in a fund, directly or indirectly, on behalf of a taxpayer, including but not limited to (A) direct investments made by the taxpayer, and (B) loans made to the fund for the benefit of the taxpayer which loans are guaranteed by the taxpayer, provided no amounts represented by any such loan shall be used for the purpose of obtaining any tax credit by any person making such loan against any tax levied by this state;

(8) "Income year" means (A) with respect to corporations subject to taxation under chapter 208, the income year as determined under said chapter, (B) with respect to insurance companies, hospital and medical services corporations subject to taxation under chapter 207, the income year as determined under said chapter, and (C) with respect to taxpayers subject to taxation under chapter 229, the taxable year determined under said chapter;

(9) "Taxpayer" means any person as defined in section 12-1, whether or not subject to any taxes levied by this state; and

(10) "Commissioner" means the Commissioner of Economic and Community Development.

(b) (1) On or before July 1, 2000, the commissioner shall register managers of funds created for the purpose of investing in insurance businesses. Any manager registered under this subsection shall have its primary place of business in this state. Each applicant shall submit an application under oath to the commissioner to be registered and shall furnish evidence satisfactory to the commissioner of its financial responsibility, integrity, and professional competence to manage investments. Failure to maintain adequate fiduciary standards shall constitute cause for the commissioner to revoke, after hearing, any registration granted under this section. The fund manager shall make a report on or before the first day of March in each year, under oath, to the Commissioner of Revenue Services specifying the name, address and Social Security number or employer identification number of each investor, the year during which each investment was made by each investor, the amount of each investment and a description of the fund's investment objectives and relative performance.

[(c)] (2) There shall be allowed as a credit against the tax imposed under chapter 207, 208 or 229 or section 38a-743 an amount equal to the following percentage of the moneys of the taxpayer invested through a fund manager in an insurance business with respect to the following income years of the taxpayer: [(1)] (A) With respect to the income year in which the investment in the subject insurance business was made and the two next succeeding income years, zero per cent; [(2)] (B) with respect to the third full income year succeeding the year in which the investment in the subject insurance business was made and the three next succeeding income years, ten per cent; [(3)] (C) with respect to the seventh full income year succeeding the year in which the investment in the subject insurance business was made and the two next succeeding income years, twenty per cent. The sum of all tax credit granted pursuant to the provisions of this [section] subsection shall not exceed fifteen million dollars with respect to investments made by a fund or funds in any single insurance business, and with respect to all investments made by a fund shall not exceed the total amount originally invested in such fund. Any fund manager may apply to the Commissioner of Economic and Community Development for a credit that exceeds the limitations established by this [subsection] subdivision. The commissioner shall evaluate the benefits of such application and make recommendations to the General Assembly if he determines that the proposal would be of economic benefit to the state.

[(d)] (3) The credit allowed by this [section] subsection may be claimed only by a taxpayer who has invested in an insurance business through a fund [(1)] (A) which has a total asset value of not less than thirty million dollars for the income year for which the initial credit is taken; [(2)] (B) has not less than three investors who are not related persons with respect to each other or to any insurance business in which any investment is made other than through the fund at the date the investment is made; and [(3)] (C) which invests only in insurance businesses that are not related persons with respect to each other.

[(e)] (4) The credit allowed by this section may be claimed only with respect to a subject insurance business which [(1)] (A) occupies the new facility for which an eligibility certificate has been issued by the commissioner and with respect to which the certification required under [subsection (g) of this section] subdivision (6) of this subsection has been issued as its home office, and [(2)] (B) employs not less than twenty-five per cent of its total work force in new jobs.

[(f)] (5) The credit allowed by this [section] subsection may be claimed only with respect to an income year for which a certification of continued eligibility required under [subsection (g) of this section] subdivision (6) of this subsection has been issued. If, with respect to any year for which a tax credit is claimed, any subject insurance business ceases at any time to employ at least twenty-five per cent of its total work force in new jobs, then, except as provided in [subsection (g) of this section] subdivision (6) of this subsection, the entitlement to the credit allowed by this [section] subsection shall not be allowed for the taxable year in which such employment ceases, and there shall not be a pro rata application of the credit to such taxable year; provided, if the reason for such cessation is the dissolution, liquidation or reorganization of such insurance business in a bankruptcy or delinquency proceeding, as defined in section 38a-905, the credit shall be allowed.

[(g)] (6) The commissioner, upon application, shall issue an eligibility certificate for an insurance business occupying a new facility in this state and employing new employees, after it has been established, to his satisfaction, that subject insurance business has complied with the provisions of this [section] subsection. If the commissioner determines that such requirements have been met as a result of transactions with a related person for other than bona fide business purposes, he shall deny such application. The commissioner shall require the subject insurance business to submit annually such information as may be necessary to determine whether the appropriate occupancy and employment requirements have been met at all times during an income year. If the commissioner determines that such requirements have been so met, he shall issue a certification of continued eligibility to that effect to the subject insurance business on or before the first day of the third month following the close of the subject insurance business's income year.

[(h)] (7) The commissioner shall, upon request, provide a copy of the eligibility certificate and the certification required under [subsection (g) of this section] subdivision (6) of this subsection to the Commissioner of Revenue Services.

[(i) (1) If (A)] (8) (A) If (i) the number of new employees on account of which a taxpayer claimed the credit allowed by this [section] subsection decreases to less than twenty-five per cent of its total work force for more than sixty days during any of the taxable years for which a credit is claimed, [(B)] (ii) those employees are not replaced by other employees who have not been shifted from an existing location of the subject insurance business in this state, and [(C)] (iii) the subject insurance business has relocated operations conducted in the new facility to a location outside this state, the taxpayer shall be required to recapture a percentage, as determined under the provisions of [subdivision (2) of this subsection] subparagraph (B) of this subdivision, of the credit allowed under this [section] subsection on its tax return and no subsequent credit shall be allowed. If the credit claimed by the taxpayer under this [section] subsection is attributable to investments made in more than one insurance business, the credit recaptured and disallowed under this [subsection] subdivision shall be that portion of the credit attributable to the investment in the insurance business as described in [subparagraphs (A) to (C), inclusive, of subdivision (1) of this subsection] subparagraphs (A)(i) to (A)(iii), inclusive, of this subdivision.

[(2)] (B) If the taxpayer is required under the provisions of [subdivision (1) of this subsection] subparagraph (A) of this subdivision to recapture a portion of the credit during [(A)] (i) the first year such credit was claimed, then ninety per cent of the credit allowed shall be recaptured on the tax return required to be filed for such year, [(B)] (ii) the second of such years, then sixty-five per cent of the credit allowed for the entire period of eligibility shall be recaptured on the tax return required to be filed for such year, [(C)] (iii) the third of such years, then fifty per cent of the credit allowed for the entire period of eligibility shall be recaptured on the tax return required to be filed for such year, [(D)] (iv) the fourth of such years, then thirty per cent of the credit allowed for the entire period of eligibility shall be recaptured on the tax return required to be filed for such year, [(E)] (v) the fifth of such years, then twenty per cent of the credit allowed for the entire period of eligibility shall be recaptured on the tax return required to be filed for such year, and [(F)] (vi) the sixth or subsequent of such years, then ten per cent of the credit allowed for the entire period of eligibility shall be recaptured on the tax return required to be filed for such year. Any credit recaptured pursuant to this [subsection] subdivision shall not be in excess of the credit that would be allowed for the applicable investment. The Commissioner of Revenue Services may recapture such credits from the taxpayer who has claimed such credits. If the commissioner is unable to recapture all or part of such credits from such taxpayer, the commissioner may seek to recapture such credits from any taxpayer who has assigned such credits to another taxpayer. If the commissioner is unable to recapture all or part of such credits from any such taxpayer, the commissioner may recapture such credits from the fund.

[(3)] (C) The recapture provisions of this [subsection] subdivision shall not apply and tax credits may continue to be claimed under this [section] subsection if, for the entire period that the credit is applicable, such decrease in the percentage of total work force employed in this state does not result in an actual decrease in the number of persons employed by the subject insurance business in this state on a regular, full-time, or equivalent thereof, and permanent basis as compared to the number of new employees on account of which the taxpayer claimed the credit allowed by this [section] subsection.

(c) (1) As used in this section:

(A) "Eligible recipient" means a business that has its principal business operations in this state and has fewer than one hundred fifty employees. A business is not an eligible recipient, and an investment in such business shall not count towards the requirements set forth in this subsection, at the time of the investment or follow-on investment, the business no longer has its principal business operations in this state;

(B) "Eligible reinvestment funds" means an investment of cash by an insurance company in an insurance reinvestment fund that fully funds the purchase price of an equity interest in the insurance reinvestment fund, or an eligible debt instrument issued by an insurance reinvestment fund, at par value or a premium, that (i) has an original maturity date of at least five years after the date of issuance, (ii) has a repayment schedule that is not faster than a level principal amortization over five years, and (iii) has no interest, distribution or payment features tied to the insurance reinvestment fund's profitability or the success of its investments;

(C) "Green technology business" means an eligible recipient with employment positions that constitute "green jobs" as jointly identified by the Commissioner of Economic and Community Development and the Labor Commissioner pursuant to Executive Order Number 23 of Governor M. Jodi Rell;

(D) "Insurance reinvestment fund" means a Connecticut partnership, corporation, trust or limited liability company, whether organized on a profit or nonprofit basis, that is managed by at least two principals or persons that have at least four years of experience each in managing venture capital or private equity funds, with at least fifty million dollars of such funds raised from persons unaffiliated with the manager;

(E) "Principal business operations" means at least eighty per cent of the business organization's employees reside in this state or eighty per cent of the business payroll is paid to individuals living in this state; and

(F) "Preseed recipient" means a company that receives an amount of eligible reinvestment funds not exceeding one hundred thousand dollars, that has fewer than ten employees, and earnings before income taxes, distributions and amortization of less than one million dollars.

(2) On or before July 1, 2010, the Commissioner of Economic and Community Development shall begin to accept applications for licensure as an insurance reinvestment fund. Applications shall include: (A) The amount of eligible capital the applicant will raise; (B) a nonrefundable application fee of seven thousand five hundred dollars; (C) evidence of satisfaction of the requirements of the definition of "insurance reinvestment fund" pursuant to subdivision (1) of this subsection; (D) an affidavit executed by each insurance company committing to make an investment of eligible reinvestment funds; (E) a business plan detailing (i) the percentage of eligible reinvestment funds that the applicant will invest in eligible recipients by December 31, 2013, December 31, 2015, December 31, 2017, and December 31, 2019, and (ii) the industry segments listed by standard industrial classification code and percentage of eligible reinvestment funds in which the applicant will invest; (F) a revenue impact assessment demonstrating that the applicant's business plan has a revenue neutral or positive impact on the state; and (G) a commitment to invest at least twenty-five per cent of its eligible reinvestment funds in green technology businesses.

(3) An insurance company that makes an investment of eligible reinvestment funds shall, in the year of investment, earn a vested credit against the premium tax imposed pursuant to section 38a-743. Such credit shall be equal to one hundred per cent of the insurance company's investment of eligible reinvestment funds, and shall be available as follows: (A) Commencing with the tax return due for the tax years from 2013 to 2016, inclusive, an insurance company may take up to ten per cent of such credit; and (B) commencing with the tax return due for the tax years from 2017 to 2019, inclusive, an insurance company may take up to twenty per cent of such credit. An insurance company claiming a credit against the tax imposed by section 38a-743 pursuant to this subsection shall not be required to pay any additional retaliatory tax under chapter 207 as a result of claiming the credit.

(4) Applications for tax credits pursuant to this subsection shall be accepted and approved on a first-come, first-served basis with all applications received on the same date deemed to be received simultaneously and approvals being made on a pro rata basis if such applications exceed the amount of remaining credits.

(5) If an insurance reinvestment fund does not receive an investment of eligible reinvestment funds equaling the amount of credits against the tax imposed under section 38a-743 allocated to an insurance company, for which it filed an affidavit with its application prior to the fifth business day after receipt of certification, the insurance company shall notify the commissioner by overnight common carrier delivery service and that portion of eligible reinvestment funds allocated to the insurance company shall be forfeited. Such insurance reinvestment fund and forfeiting insurance company shall each be assessed a twenty-five-thousand-dollar administrative penalty. The commissioner shall reallocate the forfeited eligible reinvestment funds among all other remaining insurance companies.

(6) To continue to be certified, an insurance reinvestment fund shall (A) be in compliance with the investment parameters set forth in its business plan; (B) have invested seventy per cent of its eligible reinvestment funds in eligible recipients by December 31, 2015, with a minimum of fifteen per cent of eligible reinvestment funds invested in green technology businesses; and (C) have invested one hundred per cent of its eligible reinvestment funds in eligible recipients by December 31, 2019, with a minimum of twenty-five per cent of eligible reinvestment funds invested in green technology businesses. An insurance reinvestment fund shall only invest eligible reinvestment funds in eligible recipients, bank deposits, certificates of deposit or other fixed income securities, and may not invest more than fifteen per cent of its eligible reinvestment funds in any one eligible recipient without prior approval of the commissioner.

(7) Not later than January thirty-first annually, each insurance reinvestment fund shall report to the commissioner: (A) The amount of eligible reinvestment funds remaining at the end of the preceding year; (B) each investment in an eligible recipient during the preceding year and, with respect to each eligible recipient, its location and standard industry classification code; (C) the percentage of eligible reinvestment funds invested in green technology businesses; and (D) distributions made by the insurance reinvestment fund in the preceding year. In the annual report due by January 31, 2014, January 31, 2016, January 31, 2018, and January 31, 2020, each insurance reinvestment fund shall also report to the commissioner its compliance with the investment parameters set forth in its business plan. Each insurance reinvestment fund shall provide to the commissioner annual audited financial statements.

(8) To make a distribution or payment, an insurance reinvestment fund must have invested one hundred per cent of its eligible reinvestment funds in eligible recipients, with a minimum of twenty-five per cent of eligible reinvestment funds invested in green technology businesses, and a minimum of five per cent in preseed recipients, have principal business operations in this state at the time of such determination, except for the following distributions or payments: (A) Distributions related to the payment of any projected increase in federal or state taxes, including penalties and interest related to state and federal income taxes, of the equity owners of the insurance reinvestment fund resulting from the earnings or other tax liability of the insurance reinvestment fund to the extent that the increase is related to the ownership, management or operation of the insurance reinvestment fund; (B) payments of interest and principal on the debt of the insurance reinvestment fund; or (C) payments related to the reasonable costs and expenses of forming, syndicating, managing and operating the fund, provided the distribution or payment is not made directly or indirectly to an insurance company, including: (i) Reasonable and necessary fees paid for professional services, including legal and accounting services, related to the formation and operation of the insurance reinvestment fund; and (ii) an annual management fee in an amount that does not exceed two and one-half per cent of the eligible reinvestment funds of the insurance reinvestment fund. The insurance reinvestment fund shall not pay any management fees if it fails to invest seventy per cent of its eligible reinvestment funds in eligible recipients with a minimum of fifteen per cent of eligible reinvestment funds invested in green technology businesses within the fifth full income year after certification by the commissioner.

(9) The commissioner shall review each annual report to ensure compliance with subdivisions (6), (7) and (8) of this subsection. A material variation of subdivision (6), (7) or (8) of this subsection is grounds for revocation of licensure of the insurance reinvestment fund. If the commissioner determines that an insurance reinvestment fund is not in compliance with subdivision (6), (7) or (8) of this subsection or the investment parameters of its business plan, the commissioner shall notify the officers of the company, in writing, that the insurance reinvestment fund may be subject to revocation of licensure after the one-hundred-twentieth day after the date of mailing the notice, unless the deficiencies are waived by the commissioner or are corrected and the insurance reinvestment fund returns to compliance with subdivisions (6), (7) and (8) of this subsection.

(10) Revocation of licensure of an insurance reinvestment fund shall not cause the recapture of premium tax credits previously claimed by insurance companies. Revocation of licensure may cause the forfeiture of future premium tax credits to be claimed by insurance companies and the commissioner may fine an insurance reinvestment fund an amount equal to the premium tax credits previously claimed as follows:

(A) Revocation of licensure of an insurance reinvestment fund after any of the first six annual reviews by the commissioner causes the forfeiture of all future premium tax credits not previously claimed by an insurance company with respect to such insurance reinvestment fund, and the commissioner shall fine such insurance reinvestment fund an amount equal to all premium tax credits claimed with respect to its eligible reinvestment funds, provided revocation of licensure of an insurance reinvestment fund by reason of failure to have invested at least fifteen per cent of its eligible reinvestment funds in green technology businesses by December 31, 2015, shall cause the commissioner to fine such insurance reinvestment fund an amount equal to all premium tax credits claimed for the tax years commencing on or after January 1, 2014, and prior to December 31, 2015.

(B) For an insurance reinvestment fund that meets the requirements for continued certification under subparagraph (B) of subdivision (6) of this subsection and subsequently fails to meet the requirements for continued certification under subparagraph (C) of subdivision (6) of this subsection, any premium tax credit that has been or will be taken by an insurance company through the tax year commencing on or after January 1, 2015, is not subject to forfeiture and the insurance reinvestment company shall not be fined with respect to such tax credits, but any future premium tax credit shall be subject to forfeiture and the commissioner shall fine such insurance reinvestment company an amount equal to such premium tax credits claimed for tax years commencing January 1, 2016, but prior to December 31, 2019, provided the failure of an insurance reinvestment fund to have invested at least twenty-five per cent of its eligible reinvestment funds in green technology businesses by December 31, 2018, shall cause the commissioner to fine such insurance reinvestment fund an amount equal to all premium tax credits claimed for the tax years commencing on or after January 1, 2018, but prior to December 31, 2019.

(C) For an insurance reinvestment fund that has invested one hundred per cent of its eligible reinvestment funds in eligible recipients with a minimum of twenty-five per cent of eligible reinvestment funds invested in green technology businesses, any premium tax credit claimed or to be claimed by an insurance company is not subject to forfeiture under this subsection and such insurance reinvestment fund is no longer subject to fines under this subdivision.

[(j)] (d) The tax credit allowed by this section shall only be available for investments (1) in funds that are not open to additional investments or investors beyond the amount subscribed at the formation of the fund, or (2) under subsection (c) of this section, in insurance reinvestment funds that are not open to additional investments or investors after submission of the insurance reinvestments fund's application to the commissioner pursuant to subsection (c) of this section. No credits shall be allowed under this section for investments in any fund created on or after July 1, 2000. [No] On and after January 1, 2010, no credit shall be allowed under this section for investments made in an insurance business through [such fund after December 31, 2015] any fund, regardless of the date on which the fund was created. Any tax credit allowed by this section prior to January 1, 2010, may be claimed in accordance with this section.

(e) The maximum amount of credit allowed under this section shall be forty million dollars per year.

[(k)] (f) (1) The Commissioner of Revenue Services may treat one or more corporations that are properly included in a combined corporation business tax return under section 12-223 as one taxpayer in determining whether the appropriate requirements under this section are met. Where corporations are treated as one taxpayer for purposes of this subsection, then the credit shall be allowed only against the amount of the combined tax for all corporations properly included in a combined return that, under the provisions of subdivision (2) of this subsection, is attributable to the corporations treated as one taxpayer. (2) The amount of the combined tax for all corporations properly included in a combined corporation business tax return that is attributable to the corporations that are treated as one taxpayer under the provisions of this subsection shall be in the same ratio to such combined tax that the net income apportioned to this state of each corporation treated as one taxpayer bears to the net income apportioned to this state, in the aggregate, of all corporations included in such combined return. Solely for the purpose of computing such ratio, any net loss apportioned to this state by a corporation treated as one taxpayer or by a corporation included in such combined return shall be disregarded.

[(l)] (g) (1) Any taxpayer allowed a credit under subsection (b) of this section may assign such credit to another person, provided such person may claim such credit only with respect to a calendar year for which the assigning taxpayer would have been eligible to claim such credit. The fund manager shall include in the report filed with the Commissioner of Revenue Services in accordance with subdivision (1) of subsection (b) of this section information requested by the commissioner regarding such assignments including the current holders of credits as of the end of the preceding calendar year.

(2) An insurance company may transfer credits under subsection (c) of this section only in accordance with regulations adopted pursuant to subsection (j) of this section.

[(m)] (h) No taxpayer shall be eligible for a credit under this section and either section 12-217e or section 12-217m for the same investment. No two taxpayers shall be eligible for any tax credit with respect to the same investment, employee or facility.

[(n)] (i) Any tax credit not used in the income year for which it was allowed may be carried forward for the five immediately succeeding income years until the full credit has been allowed.

[(o)] (j) The commissioner, with the approval of the Commissioner of Revenue Services and the Secretary of the Office of Policy and Management, [may] shall adopt regulations in accordance with chapter 54 to carry out the purposes of this section. Such regulations shall include provisions to facilitate the transfer of credits under subsection (c) of this section by an insurance company for funds invested in insurance reinvestment funds to an affiliate of said insurance company.

Sec. 14. Sections 10-228b, 12-217l, 12-217u and 12-217cc of the general statutes are repealed. (Effective from passage and applicable to income years commencing on or after January 1, 2011)

This act shall take effect as follows and shall amend the following sections:

Section 1

July 1, 2010

New section

Sec. 2

July 1, 2010

New section

Sec. 3

July 1, 2010, and applicable to taxable years commencing on or after January 1, 2010

New section

Sec. 4

October 1, 2010

32-35(b)

Sec. 5

October 1, 2010

32-41w

Sec. 6

October 1, 2010

32-39

Sec. 7

October 1, 2010

32-35(h)

Sec. 8

July 1, 2010

32-1c

Sec. 9

July 1, 2010

32-222

Sec. 10

October 1, 2010

10-282(3)

Sec. 11

July 1, 2010, and applicable to income or taxable years, as appropriate, commencing on or after January 1, 2011

12-217ii

Sec. 12

July 1, 2010

New section

Sec. 13

July 1, 2010

38a-88a

Sec. 14

from passage and applicable to income years commencing on or after January 1, 2011

Repealer section

CE

Joint Favorable Subst.

 

APP

Joint Favorable

 

FIN

Joint Favorable