OLR Bill Analysis

sHB 5637 (as amended by House "A")*

AN ACT MAKING MINOR AND CONFORMING CHANGES TO CERTAIN TAX STATUTES.

SUMMARY:

This bill aligns the motor vehicle mill rate cap for special taxing districts and boroughs with the existing cap on municipalities. Current law bars districts and boroughs from setting a mill rate that, if combined with the municipality's motor vehicle mill rate, would exceed 32 mills for the 2015 assessment year and 29.36 mills for the 2016 assessment year. The bill extends the 29.36 mill rate cap to the 2017 assessment year and thereafter, thus aligning it with the cap on municipalities for those assessment years.

The bill also does the following:

1. amends two statutes to reflect the separate mill rates on motor vehicles and real and personal property other than motor vehicles beginning in FY 17;

2. corrects statutory references in the payment in lieu of taxes (PILOT) program and Mashantucket Pequot and Mohegan Fund distribution formula statutes;

3. corrects a personal income tax bracket calculation for head of household filers, thus conforming the statutes to current practice; and

4. makes other technical and conforming changes.

EFFECTIVE DATE: Upon passage, except (1) the changes to the PILOT statutes are effective July 1, 2016 and (2) some technical changes to the consensus revenue estimate statutes are effective October 1, 2016 and others are effective July 1, 2019.

*House Amendment “A” makes technical changes.

MILL RATES

Beginning in FY 18, the law establishes a mechanism for increasing PILOT grants for municipalities with mill rates of at least 25 and a relatively high percentage of tax-exempt property on their grand lists. The bill specifies that the mill rate used to determine which municipalities qualify for the increased PILOTs is the mill rate imposed on real and personal property other than motor vehicles.

The bill makes a similar change to the mill rate used to calculate reduced property tax assessments under a local option property tax relief program for qualifying commercial and industrial property owners in municipalities with state-approved enterprise zones.

BACKGROUND

Related Bill

sHB 5046, favorably reported by the Finance, Revenue and Bonding Committee, delays the implementation of the increased PILOT grants for qualifying municipalities from FY 18 until FY 20.

COMMITTEE ACTION

Finance, Revenue and Bonding Committee

Joint Favorable Substitute

Yea

49

Nay

1

(03/31/2016)