Connecticut Seal

General Assembly

 

Governor's Bill No. 10

February Session, 2018

 

LCO No. 358

 

*00358__________*

Referred to Committee on FINANCE, REVENUE AND BONDING

 

Introduced by:

 

SEN. LOONEY, 11th Dist.

SEN. DUFF, 25th Dist.

REP. ARESIMOWICZ, 30th Dist.

REP. RITTER M., 1st Dist.

 

AN ACT CONCERNING REVENUE ITEMS TO IMPLEMENT THE GOVERNOR'S BUDGET.

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

Section 1. Section 3-20j of the 2018 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) As used in this section, the following terms have the following meanings, unless the context clearly indicates a different meaning or intent:

(1) "Credit revenue bonds" means revenue bonds issued pursuant to this section;

(2) "Collection agent" means the financial institution acting as the trustee or agent for the trustee that receives the pledged revenues directed by the state to be paid to it by taxpayers;

(3) "Debt service requirements" means (A) (i) principal and interest with respect to bonds, (ii) interest with respect to bond anticipation notes, and (iii) unrefunded principal with respect to bond anticipation notes, (B) the purchase price of bonds and bond anticipation notes that are subject to purchase or redemption at the option of the bondowner or noteowner, (C) the amounts, if any, required to establish or maintain reserves, sinking funds or other funds or accounts at the respective levels required to be established or maintained therein in accordance with the proceedings authorizing the issuance of bonds, (D) expenses of issuance and administration with respect to bonds and bond anticipation notes, as determined by the Treasurer, (E) the amounts, if any, becoming due and payable under a reimbursement agreement or similar agreement entered into pursuant to authority granted under the proceedings authorizing the issuance of bonds and bond anticipation notes, and (F) any other costs or expenses deemed by the Treasurer to be necessary or proper to be paid in connection with the bonds and bond anticipation notes, including, without limitation, the cost of any credit facility, including, but not limited to, a letter of credit or policy of bond insurance, issued by a financial institution pursuant to an agreement approved pursuant to the proceedings authorizing the issuance of bonds and bond anticipation notes;

[(4) "Dedicated savings" for a period means the amounts for such period determined by the Treasurer pursuant to subsection (n) of this section to have been saved by the issuance of credit revenue bonds;]

[(5)] (4) "Pledged revenues" means withholding taxes statutorily pledged to repayment of credit revenue bonds;

[(6)] (5) "Proceedings" means the proceedings of the State Bond Commission authorizing the issuance of bonds pursuant to this section, the provisions of any resolution or trust indenture securing bonds, that are incorporated into such proceedings, the provisions of any other documents or agreements that are incorporated into such proceedings and, to the extent applicable, a certificate of determination filed by the Treasurer in accordance with this section;

[(7)] (6) "Trustee" means the financial institution acting as trustee under the trust indenture pursuant to which bonds or notes are issued; and

[(8)] (7) "Withholding taxes" means taxes required to be deducted and withheld [by employers from the wages and salaries of employees] pursuant to sections 12-705 and 12-706 and paid [by employers] to the Commissioner of Revenue Services pursuant to section 12-707 [as a credit for income taxes payable by such employees, and includes, without limitation, taxes deducted and withheld pursuant to sections 12-705 and 12-706] upon receipt by the state and including penalty and interest charges on such taxes.

(b) Whenever any general statute or public or special act, whether enacted before, on or after October 31, 2017, authorizes general obligation bonds of the state to be issued for any purpose, such general statute or public or special act shall be deemed to have authorized such bonds to be issued as either general obligation bonds or credit revenue bonds under this section. In no event shall the total of the principal amount of general obligation bonds and credit revenue bonds issued pursuant to the authority of any general statute or public or special act exceed the amount authorized thereunder. Except as provided for in this section, all provisions of section 3-20, except subsection (p) of said section, shall apply to such credit revenue bonds.

(c) Bonds issued pursuant to this section shall be special obligations of the state and shall not be payable from or charged upon any funds other than the pledged revenues or other receipts, funds or moneys pledged therefor, nor shall the state or any political subdivision thereof be subject to any liability thereon, except to the extent of such pledged revenues or other receipts, funds or moneys pledged therefor as provided in this section. As part of the contract of the state with the owners of such bonds, all amounts necessary for punctual payment of principal of and interest on such bonds, and redemption premium, if any, with respect to such bonds, is hereby appropriated and the Treasurer shall pay such principal and interest and redemption premium, if any, as the same shall become due but only from such sources. The issuance of bonds issued under this section shall not directly or indirectly or contingently obligate the state or any political subdivision thereof to levy or to pledge any form of taxation whatever therefor, except for taxes included in the pledged revenues, or to make any additional appropriation for their payment. Such bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the state or of any political subdivision thereof other than the pledged revenues or other receipts, funds or moneys pledged therefor as provided in this section, and the substance of such limitation shall be plainly stated on the face of each such bond and bond anticipation note.

(d) The state hereby pledges all its right, title and interest to the pledged revenues to secure the due and punctual payment of the principal of and interest on the credit revenue bonds, and redemption premium, if any, with respect to such bonds. Such pledge shall secure all such credit revenue bonds equally, and such pledge is and shall be prior in interest to any other claim of any party to the pledged revenues, including any holder of general obligation bonds of the state. Such bonds also may be secured by a pledge of reserves, sinking funds and any other funds and accounts, including proceeds from investment of any of the foregoing, authorized hereby or by the proceedings authorizing the issuance of such bonds, and by moneys paid under a credit facility including, but not limited to, a letter of credit or policy of bond insurance, issued by a financial institution pursuant to an agreement authorized by such proceedings.

(e) The pledge of the pledged revenues under this section is made by the state by operation of law through this section, and as a statutory lien is effective without any further act or agreement by the state, and shall be valid and binding from the time the pledge is made, and any revenues or other receipts, funds or moneys so pledged and received by the state shall be subject immediately to the lien of such pledge without any physical delivery thereof or further act. The lien of any such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the state, irrespective of whether such parties have notice thereof.

(f) In the proceedings authorizing any credit revenue bonds, the state shall direct the trustee to establish one or more collection accounts with the collection agent to receive the pledged revenues and shall direct payment of the pledged revenues into such collection accounts of the collection agent. Funds in such collection accounts shall be kept separate and apart from any other funds of the state until disbursed as provided for in the proceedings authorizing such credit revenue bonds. Such proceedings shall provide that no funds from such collection accounts shall be disbursed to the control of the state until and at such times as all current claims of any trustee set out in the proceedings have been satisfied, and thereafter may be disbursed to the control of the state free and clear of any claim by the trustee or the holders of any credit revenue bonds. The agreements with the depositaries establishing the collection accounts may provide for customary settlement terms for the collection of revenues. The expenses of the state in establishing such collection accounts and directing the deposit of pledged revenues therein, including the expenses of the Department of Revenue Services and the office of the Comptroller in establishing mechanisms to verify, allocate, track and audit such accounts and the deposits therein, may be paid as costs of issuance of any bonds issued pursuant to section 3-20 or this section.

(g) The proceedings under which bonds are authorized to be issued, pursuant to this section, may, subject to the provisions of the general statutes, contain any or all of the following:

(1) Covenants that confirm, as part of the contract with the holders of the credit revenue bonds, the agreements of the state set forth in subsections (d) to (f), inclusive, of this section;

(2) Provisions for the execution of reimbursement agreements or similar agreements in connection with credit facilities including, but not limited to, letters of credit or policies of bond insurance, remarketing agreements and agreements for the purpose of moderating interest rate fluctuations, and of such other agreements entered into pursuant to section 3-20a;

(3) Provisions for the collection, custody, investment, reinvestment and use of the pledged revenues or other receipts, funds or moneys pledged therefor;

(4) Provisions regarding the establishment and maintenance of reserves, sinking funds and any other funds and accounts as shall be approved by the State Bond Commission in such amounts as may be established by the State Bond Commission, and the regulation and disposition thereof, including requirements that any such funds and accounts be held separate from or not be commingled with other funds of the state;

(5) Provisions for the issuance of additional bonds on a parity with bonds theretofore issued, including establishment of coverage requirements as a condition of the issuance of such additional bonds;

(6) Provisions regarding the rights and remedies available in case of a default to the bondowners, or any trustee under any contract, loan agreement, document, instrument or trust indenture, including the right to appoint a trustee to represent their interests upon occurrence of an event of default, as defined in said proceedings, provided, if any bonds shall be secured by a trust indenture, the respective owners of such bonds or notes shall have no authority except as set forth in such trust indenture to appoint a separate trustee to represent them, and provided further no such right or remedy shall allow principal and interest on such bonds to be accelerated; and

(7) Provisions or covenants of like or different character from the foregoing which are consistent with this and which the State Bond Commission determines in such proceedings are necessary, convenient or desirable to better secure the bonds, or will tend to make the bonds more marketable, and which are in the best interests of the state. Any provision which may be included in proceedings authorizing the issuance of bonds hereunder may be included in a trust indenture duly approved in accordance with this subsection which secures the bonds and any notes issued in anticipation thereof, and in such case the provisions of such indenture shall be deemed to be a part of such proceedings as though they were expressly included therein.

(h) Bonds issued pursuant to this section shall be secured by a trust indenture, approved by the State Bond Commission, by and between the state and a corporate trustee, which may be any trust company or bank having the powers of a trust company within or without the state. Such trust indenture may contain such provisions for protecting and enforcing the rights and remedies of the bondowners as may be reasonable and proper and not in violation of law, including covenants setting forth the duties of the state in relation to the exercise of its powers pursuant to the pledged revenues and the custody, safeguarding and application of all moneys. The state may provide by such trust indenture for the payment of the pledged revenues or other receipts, funds or moneys to the trustee under such trust indenture or to any other depository, and for the method of disbursement thereof, with such safeguards and restrictions as it may determine, but consistent with the provisions of subsections (d) to (f), inclusive, of this section.

(i) The Treasurer shall have power to purchase bonds of the state issued pursuant to this section out of any funds available therefor. The Treasurer may hold, pledge, cancel or resell such bonds subject to and in accordance with agreements with bondowners.

(j) Bonds issued pursuant to this section are hereby made negotiable instruments within the meaning of and for all purposes of the Uniform Commercial Code, whether or not such bonds are of such form and character as to be negotiable instruments under the terms of the Uniform Commercial Code, subject only to the provisions of such bonds for registration.

(k) Any moneys held by the Treasurer or a trustee pursuant to a trust indenture with respect to bonds issued pursuant to this section, including pledged revenues, other pledged receipts, funds or moneys and proceeds from the sale of such bonds, may, pending the use or application of the proceeds thereof for an authorized purpose, be (1) invested and reinvested in such obligations, securities and investments as are set forth in subsection (f) of section 3-20 and in participation certificates in the Short Term Investment Fund created under section 3-27a, or (2) deposited or redeposited in such bank or banks as shall be provided in the resolution authorizing the issuance of such bonds, the certificate of determination authorizing issuance of such bond anticipation notes or in the indenture securing such bonds. Proceeds from investments authorized by this subsection, less amounts required under the proceedings authorizing the issuance of bonds, shall be credited to the General Fund.

(l) Bonds issued pursuant to this section are hereby made securities in which all public officers and public bodies of the state and its political subdivisions, all insurance companies, credit unions, building and loan associations, investment companies, banking associations, trust companies, executors, administrators, trustees and other fiduciaries and pension, profit-sharing and retirement funds may properly and legally invest funds, including capital in their control or belonging to them. Such bonds are hereby made securities which may properly and legally be deposited with and received by any state or municipal officer or any agency or political subdivision of the state for any purpose for which the deposit of bonds or obligations of the state is now or may hereafter be authorized by law.

(m) The state covenants with the purchasers and all subsequent owners and transferees of bonds issued by the state pursuant to this section, in consideration of the acceptance of the payment for the bonds, until such bonds, together with the interest thereon, with interest on any unpaid installment of interest and all costs and expenses in connection with any action or proceeding on behalf of such owners, are fully met and discharged, or unless expressly permitted or otherwise authorized by the terms of each contract and agreement made or entered into by or on behalf of the state with or for the benefit of such owners, that the state will impose, charge, raise, levy, collect and apply the pledged revenues and other receipts, funds or moneys pledged for the payment of debt service requirements as provided in this section, in such amounts as may be necessary to pay such debt service requirements in each year in which bonds are outstanding and further, that the state (1) will not limit or alter the duties imposed on the Treasurer and other officers of the state by law and by the proceedings authorizing the issuance of bonds with respect to application of pledged revenues or other receipts, funds or moneys pledged for the payment of debt service requirements as provided in said sections; (2) will not alter the provisions establishing collection accounts with the collection agent or the direction of pledged revenues to such collection accounts, or the provisions applying such pledged revenues to the debt service requirements with respect to bonds or notes; (3) will not issue any bonds, notes or other evidences of indebtedness, other than the bonds, having any rights arising out of said sections or secured by any pledge of or other lien or charge on the pledged revenues or other receipts, funds or moneys pledged for the payment of debt service requirements as provided in said sections; (4) will not create or cause to be created any lien or charge on such pledged amounts, other than a lien or pledge created thereon pursuant to said sections, provided nothing in this subsection shall prevent the state from issuing evidences of indebtedness (A) which are secured by a pledge or lien which is and shall on the face thereof be expressly subordinate and junior in all respects to every lien and pledge created by or pursuant to said sections; (B) for which the full faith and credit of the state is pledged and which are not expressly secured by any specific lien or charge on such pledged amounts; or (C) which are secured by a pledge of or lien on moneys or funds derived on or after such date as every pledge or lien thereon created by or pursuant to said sections shall be discharged and satisfied; (5) will carry out and perform, or cause to be carried out and performed, every promise, covenant, agreement or contract made or entered into by the state or on its behalf with the owners of any bonds; (6) will not in any way impair the rights, exemptions or remedies of such owners; and (7) will not limit, modify, rescind, repeal or otherwise alter the rights or obligations of the appropriate officers of the state to impose, maintain, charge or collect the taxes, fees, charges and other receipts constituting the pledged revenues as may be necessary to produce sufficient revenues to fulfill the terms of the proceedings authorizing the issuance of the bonds; and provided further the state may change the rate of withholding taxes, calculation of amounts to which the rate applies, including exemptions and deductions so long as any such change, had it been in effect, would not have reduced the withholding taxes for any twelve consecutive months within the preceding fifteen months to less than an amount three times the maximum debt service payable on bonds issued and outstanding under this section for the current or any future fiscal year. The State Bond Commission is authorized to include this covenant of the state in any agreement with the owner of any such bonds.

[(n) At the time of issuance of any credit revenue bonds pursuant to this section, the Treasurer shall determine the amount of principal and interest estimated to be saved by the issuance of credit revenue bonds instead of general obligation bonds, as measured by the difference between the stated principal and interest payable with respect to such credit revenue bonds in each fiscal year during which bonds shall be outstanding, and the principal and interest estimated to be payable in each fiscal year during which such bonds would have been outstanding had such bonds been issued as general obligation bonds payable over the same period on the basis of equal amounts of principal stated to be due in each fiscal year, subject to any specific adjustments which the Treasurer may consider appropriate to take into account in the structure for a specific bond issue, provided in any fiscal year that the Treasurer determines there are no savings, the estimated savings shall be zero for such fiscal year. The Treasurer shall base such determination on such factors as the Treasurer shall deem relevant, which may include advice from financial advisors to the state, historical trading patterns of outstanding state general obligation bonds and spreads to common municipal bond indexes. The Treasurer shall set out such estimated savings for each fiscal year during which each issue of credit revenue bonds shall be stated to be outstanding in a bond determination which shall be filed with the State Bond Commission at or prior to the issuance of such credit revenue bonds, and such amounts shall be dedicated savings for purposes of this section.

(o) For each fiscal year during which credit revenue bonds shall be outstanding, there shall be transferred from the General Fund of the state to the Budget Reserve Fund established pursuant to section 4-30a, at the beginning of such fiscal year, an amount equal to the aggregate dedicated savings for all such bonds issued and to be outstanding in such fiscal year, unless the Governor declares an emergency or the existence of extraordinary circumstances, in which the provisions of section 4-85 are invoked, and at least three-fifths of the members of each chamber of the General Assembly vote to diminish such required transfer during the fiscal year for which the emergency or existence of extraordinary circumstances are determined, or in such other circumstances as may be permitted by the terms of the bonds, notes or other obligations issued pursuant to this section. Amounts so transferred shall not be available for appropriation for any other purpose, but shall only be used as provided in section 4-30a.]

[(p)] (n) (1) Prior to July 1, 2019, net earnings of investments of proceeds of bonds issued pursuant to section 3-20 or pursuant to this section and accrued interest on the issuance of such bonds and premiums on the issuance of such bonds shall be deposited to the credit of the General Fund, after (A) payment of any expenses incurred by the Treasurer or State Bond Commission in connection with such issuance, or (B) application to interest on bonds, notes or other obligations of the state.

(2) On and after July 1, 2019, notwithstanding subsection (f) of section 3-20, (A) net earnings of investments of proceeds of bonds issued pursuant to section 3-20 or pursuant to this section and accrued interest on the issuance of such bonds shall be deposited to the credit of the General Fund, and (B) premiums, net of any original issue discount, on the issuance of such bonds shall, after payment of any expenses incurred by the Treasurer or State Bond Commission in connection with such issuance, be deposited at the direction of the Treasurer to the credit of an account or fund to fund all or a portion of any purpose or project authorized by the State Bond Commission pursuant to any bond act up to the amount authorized by the State Bond Commission, provided the bonds for such purpose or project are unissued, and provided further the certificate of determination the Treasurer files with the secretary of the State Bond Commission for such authorized bonds sets forth the amount of the deposit applied to fund each such purpose and project. Upon such filing, the Treasurer shall record bonds in the amount of net premiums credited to each purpose and project as set forth in the certificate of determination of the Treasurer as deemed issued and retired and the Treasurer shall not thereafter exercise authority to issue bonds in such amount for such purpose or project. Upon such recording by the Treasurer, such bonds shall be deemed to have been issued, retired and no longer authorized for issuance or outstanding for the purposes of section 3-21, and for the purpose of aligning the funding of such authorized purpose and project with amounts generated by net premiums, but shall not constitute an actual bond issuance or bond retirement for any other purposes including, but not limited to, financial reporting purposes.

[(q)] (o) Any general obligation bonds or notes issued pursuant to section 3-20 may be refunded by credit revenue bonds or notes issued pursuant to this section, and any credit revenue bonds issued pursuant to this section may be refunded by general obligation bonds or notes issued pursuant to subsection (g) of section 3-20 in the manner, and subject to the same conditions, as set out in subsection (g) of section 3-20.

Sec. 2. Section 682 of public act 17-2 of the June special session is repealed and the following is substituted in lieu thereof (Effective from passage):

Notwithstanding the provisions of section 22a-200c of the general statutes, for the fiscal [years] year ending June 30, 2018, [and June 30, 2019,] the sum of $10,000,000 shall be transferred from the Regional Greenhouse Gas account and credited to the resources of the General Fund for [each] said fiscal year.

Sec. 3. Section 685 of public act 17-2 of the June special session is repealed and the following is substituted in lieu thereof (Effective from passage):

Notwithstanding the provisions of section 16-245n of the general statutes, for the fiscal [years] year ending June 30, 2018, [and June 30, 2019,] the sum of $14,000,000 shall be transferred from the Clean Energy Fund and credited to the resources of the General Fund for [each] said fiscal year.

Sec. 4. Section 687 of public act 17-2 of the June special session is repealed and the following is substituted in lieu thereof (Effective from passage):

Notwithstanding any provision of the general statutes, the following sums shall be transferred from the Banking Fund, established pursuant to section 36a-65 of the general statutes, and credited to the resources of the General Fund: (1) For the fiscal year ending June 30, 2018, the sum of $11,200,000; and (2) for the fiscal year ending June 30, 2019, the sum of [$9,200,000] $4,000,000.

Sec. 5. (Effective from passage) Notwithstanding any provision of the general statutes, on or before June 30, 2019, any funds credited to the Connecticut Itinerant Vendors Guaranty Fund established pursuant to section 21-33b of the general statutes, revision of 1958, revised to January 1, 2017, shall be credited to the resources of the General Fund for the fiscal year ending June 30, 2019.

Sec. 6. Section 14-50b of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2019):

(a) Any person whose operator's license or right to operate a motor vehicle in this state has been suspended or revoked by the Commissioner of Motor Vehicles, or who has been disqualified from operating a commercial motor vehicle, shall pay a restoration fee of one hundred seventy-five dollars to said commissioner prior to the issuance to such person of a new operator's license or the restoration of such operator's license or such privilege to operate a motor vehicle or commercial motor vehicle. Such restoration fee shall be in addition to any other fees provided by law. [The commissioner shall deposit fifty dollars of such fee in a separate nonlapsing school bus seat belt account which shall be established within the General Fund.]

(b) Any person whose motor vehicle registration or right of operation of a motor vehicle in this state has been suspended or revoked by the Commissioner of Motor Vehicles shall pay a restoration fee of one hundred seventy-five dollars to said commissioner prior to the issuance to such person of a new registration or the restoration of such registration or such right of operation. Such restoration fee shall be in addition to any other fees provided by law. [The commissioner shall deposit fifty dollars of such fee in the school bus seat belt account established pursuant to subsection (a) of this section.]

(c) Notwithstanding any provision of the general statutes, on and after July 1, 2005, the first two hundred fifty thousand dollars of revenues collected from the payment of restoration fees under this section shall be appropriated to the Department of Motor Vehicles for the payment of costs, including, but not limited to, the cost of computer reprogramming, incurred by the department in establishing procedures for the suspension of operator's licenses or nonresident operating privileges under subdivision (2) of subsection (e) of section 14-227b.

Sec. 7. Subsection (c) of section 4-28e of the 2018 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

[(c) (1) (A) For the fiscal year ending June 30, 2017, disbursements from the Tobacco Settlement Fund shall be made as follows: (i) To the General Fund (I) in the amount identified as "Transfer from Tobacco Settlement Fund" in the General Fund revenue schedule adopted by the General Assembly, and (II) in an amount equal to four million dollars; and (ii) any remainder to the General Fund.]

[(B)] (c) For [each of] the fiscal [years] year ending June 30, 2018, and [June 30, 2019] each fiscal year thereafter, disbursements from the Tobacco Settlement Fund shall be made [as follows: (i) To] to the General Fund [(I)] in the amount identified as "Transfer from Tobacco Settlement Fund" in the General Fund revenue schedule adopted by the General Assembly. [; and (II) in an amount equal to four million dollars; and (ii) any remainder to the Tobacco and Health Trust Fund.

(C) For the fiscal year ending June 30, 2020, and each fiscal year thereafter, disbursements from the Tobacco Settlement Fund shall be made as follows: (i) To the Tobacco and Health Trust Fund in an amount equal to six million dollars; (ii) to the General Fund (I) in the amount identified as "Transfer from Tobacco Settlement Fund" in the General Fund revenue schedule adopted by the General Assembly, and (II) in an amount equal to four million dollars; and (iii) any remainder to the Tobacco and Health Trust Fund.

(2) For each of the fiscal years ending June 30, 2016, and June 30, 2020, to June 30, 2025, inclusive, the sum of ten million dollars shall be disbursed from the Tobacco Settlement Fund to the smart start competitive operating grant account established by section 10-507 for grants-in-aid to towns for the purpose of establishing or expanding a preschool program under the jurisdiction of the board of education for the town.]

Sec. 8. Section 10-507 of the 2018 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) There is established an account to be known as the "smart start competitive capital grant account" which shall be a capital projects fund. The account shall contain the amounts authorized by the State Bond Commission in accordance with section 10-508 and any other moneys required by law to be deposited in the account. Moneys in the account shall be expended by the Office of Early Childhood for the purposes of the Connecticut Smart Start competitive grant program established pursuant to section 10-506.

(b) There is established an account to be known as the "smart start competitive operating grant account" which shall be a separate, nonlapsing account within the General Fund. The account shall contain moneys required by law to be deposited in the account. [, in accordance with the provisions of subsection (c) of section 4-28e.] Moneys in the account shall be expended by the Office of Early Childhood for the purposes of the Connecticut Smart Start competitive grant program established pursuant to section 10-506.

Sec. 9. (Effective from passage) Notwithstanding any provision of the general statutes, on or before June 30, 2019, the Secretary of the Office of Policy and Management may increase by up to fifty per cent any existing state fee, provided the total amount of the increase in fees shall not exceed twenty million dollars. Not later than July 1, 2019, the secretary shall submit a list, in accordance with the provisions of section 11-4a of the general statutes, of all fees increased under this section, the amount of each such increase and all corresponding statutory and regulatory references for such fees to the joint standing committee of the General Assembly having cognizance of matters relating to finance, revenue and bonding.

Sec. 10. Section 12-263p of the 2018 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

As used in sections 12-263p to 12-263x, inclusive, unless the context otherwise requires:

(1) "Commissioner" means the Commissioner of Revenue Services;

(2) "Department" means the Department of Revenue Services;

(3) "Taxpayer" means any health care provider subject to any tax or fee under section 12-263q, as amended by this act, or 12-263r, as amended by this act;

(4) "Health care provider" means an individual or entity that receives any payment or payments for health care items or services provided;

(5) "Gross receipts" means the amount received, whether in cash or in kind, from patients, third-party payers and others for taxable health care items or services provided by the taxpayer in the state, including retroactive adjustments under reimbursement agreements with third-party payers, without any deduction for any expenses of any kind;

(6) "Net revenue" means gross receipts less payer discounts, charity care and bad debts, to the extent the taxpayer previously paid tax under section 12-263q, as amended by this act, on the amount of such bad debts;

(7) "Payer discounts" means the difference between a health care provider's published charges and the payments received by the health care provider from one or more health care payers for a rate or method of payment that is different than or discounted from such published charges. "Payer discounts" does not include charity care or bad debts;

(8) "Charity care" means free or discounted health care services rendered by a health care provider to an individual who cannot afford to pay for such services, including, but not limited to, health care services provided to an uninsured patient who is not expected to pay all or part of a health care provider's bill based on income guidelines and other financial criteria set forth in the general statutes or in a health care provider's charity care policies on file at the office of such provider. "Charity care" does not include bad debts or payer discounts;

(9) "Received" means "received" or "accrued", construed according to the method of accounting customarily employed by the taxpayer;

(10) "Hospital" means any health care facility, as defined in section 19a-630, that (A) is licensed by the Department of Public Health as a short-term general hospital; (B) is maintained primarily for the care and treatment of patients with disorders other than mental diseases; (C) meets the requirements for participation in Medicare as a hospital; and (D) has in effect a utilization review plan, applicable to all Medicaid patients, that meets the requirements of 42 CFR 482.30, as amended from time to time, unless a waiver has been granted by the Secretary of the United States Department of Health and Human Services;

(11) "Inpatient hospital services" means, in accordance with federal law, all services that are (A) ordinarily furnished in a hospital for the care and treatment of inpatients; (B) furnished under the direction of a physician or dentist; and (C) furnished in a hospital. "Inpatient hospital services" does not include skilled nursing facility services and intermediate care facility services furnished by a hospital with swing bed approval;

(12) "Inpatient" means a patient who has been admitted to a medical institution as an inpatient on the recommendation of a physician or dentist and who (A) receives room, board and professional services in the institution for a twenty-four-hour period or longer, or (B) is expected by the institution to receive room, board and professional services in the institution for a twenty-four-hour period or longer, even if the patient does not actually stay in the institution for a twenty-four-hour period or longer;

(13) "Outpatient hospital services" means, in accordance with federal law, preventive, diagnostic, therapeutic, rehabilitative or palliative services that are (A) furnished to an outpatient; (B) furnished by or under the direction of a physician or dentist; and (C) furnished by a hospital;

(14) "Outpatient" means a patient of an organized medical facility or a distinct part of such facility, who is expected by the facility to receive, and who does receive, professional services for less than a twenty-four-hour period regardless of the hour of admission, whether or not a bed is used or the patient remains in the facility past midnight;

(15) "Nursing home" means any licensed chronic and convalescent nursing home or a rest home with nursing supervision;

(16) "Intermediate care facility for individuals with intellectual disabilities" or "intermediate care facility" means a residential facility for persons with intellectual disability that is certified to meet the requirements of 42 CFR 442, Subpart C, as amended from time to time, and, in the case of a private facility, licensed pursuant to section 17a-227;

(17) "Medicare day" means a day of nursing home care service provided to an individual who is eligible for payment, in full or with a coinsurance requirement, under the federal Medicare program, including fee for service and managed care coverage;

(18) "Nursing home resident day" means a day of nursing home care service provided to an individual and includes the day a resident is admitted and any day for which the nursing home is eligible for payment for reserving a resident's bed due to hospitalization or temporary leave and for the date of death. For purposes of this subdivision, a day of nursing home care service shall be the period of time between the census-taking hour in a nursing home on two successive calendar days. "Nursing home resident day" does not include a Medicare day or the day a resident is discharged;

(19) "Intermediate care facility resident day" means a day of intermediate care facility residential care provided to an individual and includes the day a resident is admitted and any day for which the intermediate care facility is eligible for payment for reserving a resident's bed due to hospitalization or temporary leave and for the date of death. For purposes of this subdivision, a day of intermediate care facility residential care shall be the period of time between the census-taking hour in a facility on two successive calendar days. "Intermediate care facility resident day" does not include the day a resident is discharged;

(20) "Medicaid" means the program operated by the Department of Social Services pursuant to section 17b-260 and authorized by Title XIX of the Social Security Act, as amended from time to time; [and]

(21) "Medicare" means the program operated by the Centers for Medicare and Medicaid Services in accordance with Title XVIII of the Social Security Act, as amended from time to time; [.]

(22) "Ambulatory surgical center" means any distinct entity that (A) operates exclusively for the purpose of providing surgical services to patients not requiring hospitalization and in which the expected duration of services would not exceed twenty-four hours following an admission; (B) has an agreement with the Centers for Medicare and Medicaid Services to participate in Medicare as an ambulatory surgical center; and (C) meets the general and specific conditions for participation in Medicare set forth in 42 CFR Part 416, Subparts B and C, as amended from time to time; and

(23) "Ambulatory surgical center services" means, in accordance with 42 CFR 433.56(a)(9), as amended from time to time, services, regardless of payer, that would be considered furnished in connection with covered surgical procedures performed in an ambulatory surgical center as provided in 42 CFR 416.164(a), as amended from time to time, for which payment would be considered to be included in the ambulatory surgical center payment established under 42 CFR 416.171, as amended from time to time, for the covered surgical procedure. "Ambulatory surgical center services" includes facility services only and does not include surgical procedures.

Sec. 11. Subdivision (1) of subsection (a) of section 12-263q of the 2018 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) (1) For each calendar quarter commencing on or after July 1, 2017, each hospital shall pay a tax on the total net revenue received by such hospital for the provision of inpatient hospital services and outpatient hospital services. For each calendar quarter commencing on or after July 1, 2018, each ambulatory surgical center shall pay a tax on the total net revenue received by such ambulatory surgical center for the provision of ambulatory surgical center services.

(A) On and after July 1, 2017, [and prior to July 1, 2019,] the rate of tax for the provision of inpatient hospital services shall be six per cent of each hospital's audited net revenue for fiscal year 2016 attributable to inpatient hospital services.

(B) On and after July 1, 2017, [and prior to July 1, 2019,] the rate of tax for the provision of outpatient hospital services shall be nine hundred million dollars less the total tax imposed on all hospitals for the provision of inpatient hospital services, which sum shall be divided by the total audited net revenue for fiscal year 2016 attributable to outpatient hospital services, of all hospitals that are required to pay such tax.

(C) On and after July 1, [2019] 2018, the rate of tax for the provision of [inpatient hospital services and outpatient hospital services shall be three hundred eighty-four million dollars divided by the total audited net revenue for fiscal year 2016, of all hospitals that are required to pay such tax] ambulatory surgical center services shall be six per cent, except that revenue from Medicaid payments for the provision of ambulatory surgical center services shall be exempt from tax.

Sec. 12. Subsection (c) of section 12-263q of the 2018 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(c) Prior to January 1, 2018, and every three years thereafter, the Commissioner of Social Services shall seek approval from the Centers for Medicare and Medicaid Services to exempt financially distressed hospitals from the net revenue tax imposed on outpatient hospital services. Any such hospital for which the Centers for Medicare and Medicaid Services grants an exemption shall be exempt from the net revenue tax imposed on outpatient hospital services under subsection (a) of this section. Any hospital for which the Centers for Medicare and Medicaid Services denies an exemption shall be required to pay the net revenue tax imposed on outpatient hospital services under subsection (a) of this section. For purposes of this subsection, "financially distressed hospital" means a hospital that has experienced over a five-year period an average net loss of more than five per cent of aggregate revenue. A hospital has an average net loss of more than five per cent of aggregate revenue if such a loss is reflected in the five most recent years of financial reporting that have been made available by the Office of Health [Care Access] Strategy for such hospital in accordance with section 19a-670 as of the effective date of the request for approval which effective date shall be July first of the year in which the request is made.

Sec. 13. Subsection (a) of section 12-263r of the 2018 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) For each calendar quarter commencing on or after July 1, 2017, there is hereby imposed a quarterly fee on each nursing home and intermediate care facility in this state, which fee shall be the product of each facility's total resident days during the calendar quarter multiplied by the user fee. Except as otherwise provided in this section, the user fee for nursing homes shall be twenty-one dollars and two cents and the user fee for intermediate care facilities shall be twenty-seven dollars and [twenty-six] seventy-six cents. As used in this subsection, "resident day" means nursing home resident day and intermediate care facility resident day, as applicable.

Sec. 14. Subdivision (1) of subsection (b) of section 12-263i of the 2018 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(b) (1) For each calendar quarter commencing on or after October 1, 2015, and prior to July 1, 2018, there is hereby imposed a tax on each ambulatory surgical center in this state to be paid each calendar quarter. The tax imposed by this section shall be at the rate of six per cent of the gross receipts of each ambulatory surgical center, except that such tax shall not be imposed on any amount of such gross receipts that constitutes either (A) the first million dollars of gross receipts of the ambulatory surgical center in the applicable fiscal year, or (B) net revenue of a hospital that is subject to the tax imposed under section [602 of public act 17-2 of the June special session] 12-263q, as amended by this act. Nothing in this section shall prohibit an ambulatory surgical center from seeking remuneration for the tax imposed by this section.

Sec. 15. Subdivision (1) of section 12-408 of the 2018 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2018, and applicable to sales occurring on or after July 1, 2018):

(1) (A) For the privilege of making any sales, as defined in subdivision (2) of subsection (a) of section 12-407, at retail, in this state for a consideration, a tax is hereby imposed on all retailers at the rate of six and thirty-five-hundredths per cent of the gross receipts of any retailer from the sale of all tangible personal property sold at retail or from the rendering of any services constituting a sale in accordance with subdivision (2) of subsection (a) of section 12-407, except, in lieu of said rate of six and thirty-five-hundredths per cent, the rates provided in subparagraphs (B) to (H), inclusive, of this subdivision;

(B) (i) At a rate of [fifteen] seventeen per cent with respect to each transfer of occupancy, from the total amount of rent received by a hotel or lodging house for the first period not exceeding thirty consecutive calendar days;

(ii) At a rate of [eleven] thirteen per cent with respect to each transfer of occupancy, from the total amount of rent received by a bed and breakfast establishment for the first period not exceeding thirty consecutive calendar days;

(C) With respect to the sale of a motor vehicle to any individual who is a member of the armed forces of the United States and is on full-time active duty in Connecticut and who is considered, under 50 App USC 574, a resident of another state, or to any such individual and the spouse thereof, at a rate of four and one-half per cent of the gross receipts of any retailer from such sales, provided such retailer requires and maintains a declaration by such individual, prescribed as to form by the commissioner and bearing notice to the effect that false statements made in such declaration are punishable, or other evidence, satisfactory to the commissioner, concerning the purchaser's state of residence under 50 App USC 574;

(D) (i) With respect to the sales of computer and data processing services occurring on or after [July 1, 2000, and prior to July 1, 2001, at the rate of two per cent, on or after] July 1, 2001, at the rate of one per cent, and (ii) with respect to sales of Internet access services, on and after July 1, 2001, such services shall be exempt from such tax;

(E) (i) With respect to the sales of labor that is otherwise taxable under subparagraph (C) or (G) of subdivision (2) of subsection (a) of section 12-407 on existing vessels and repair or maintenance services on vessels occurring on and after July 1, 1999, such services shall be exempt from such tax;

(ii) With respect to the sale of a vessel, such sale shall be exempt from such tax provided such vessel is docked in this state for sixty or fewer days in a calendar year;

(F) With respect to patient care services for which payment is received by the hospital on or after July 1, 1999, and prior to July 1, 2001, at the rate of five and three-fourths per cent and on and after July 1, 2001, such services shall be exempt from such tax;

(G) With respect to the rental or leasing of a passenger motor vehicle for a period of thirty consecutive calendar days or less, at a rate of nine and thirty-five-hundredths per cent;

(H) With respect to the sale of (i) a motor vehicle for a sales price exceeding fifty thousand dollars, at a rate of seven and three-fourths per cent on the entire sales price, (ii) jewelry, whether real or imitation, for a sales price exceeding five thousand dollars, at a rate of seven and three-fourths per cent on the entire sales price, and (iii) an article of clothing or footwear intended to be worn on or about the human body, a handbag, luggage, umbrella, wallet or watch for a sales price exceeding one thousand dollars, at a rate of seven and three-fourths per cent on the entire sales price. For purposes of this subparagraph, "motor vehicle" has the meaning provided in section 14-1, but does not include a motor vehicle subject to the provisions of subparagraph (C) of this subdivision, a motor vehicle having a gross vehicle weight rating over twelve thousand five hundred pounds, or a motor vehicle having a gross vehicle weight rating of twelve thousand five hundred pounds or less that is not used for private passenger purposes, but is designed or used to transport merchandise, freight or persons in connection with any business enterprise and issued a commercial registration or more specific type of registration by the Department of Motor Vehicles;

(I) The rate of tax imposed by this chapter shall be applicable to all retail sales upon the effective date of such rate, except that a new rate which represents an increase in the rate applicable to the sale shall not apply to any sales transaction wherein a binding sales contract without an escalator clause has been entered into prior to the effective date of the new rate and delivery is made within ninety days after the effective date of the new rate. For the purposes of payment of the tax imposed under this section, any retailer of services taxable under subparagraph (I) of subdivision (2) of subsection (a) of section 12-407, who computes taxable income, for purposes of taxation under the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, on an accounting basis which recognizes only cash or other valuable consideration actually received as income and who is liable for such tax only due to the rendering of such services may make payments related to such tax for the period during which such income is received, without penalty or interest, without regard to when such service is rendered;

[(J) (i) For calendar quarters ending on or after September 30, 2019, the commissioner shall deposit into the regional planning incentive account, established pursuant to section 4-66k, six and seven-tenths per cent of the amounts received by the state from the tax imposed under subparagraph (B) of this subdivision and ten and seven-tenths per cent of the amounts received by the state from the tax imposed under subparagraph (G) of this subdivision;]

[(ii)] (J) For calendar [quarters] months ending on or after [September 30] August 31, 2018, the commissioner shall deposit into the Tourism Fund established under section 10-395b [ten] eleven and three-quarters per cent of the amounts received by the state from the tax imposed under subparagraph (B) of this subdivision; and

[(K) For calendar months commencing on or after July 1, 2019, the commissioner shall deposit into the municipal revenue sharing account established pursuant to section 4-66l seven and nine-tenths per cent of the amounts received by the state from the tax imposed under subparagraph (A) of this subdivision; and]

[(L)] (K) (i) For calendar months commencing on or after July 1, 2017, the commissioner shall deposit into the Special Transportation Fund established under section 13b-68 seven and nine-tenths per cent of the amounts received by the state from the tax imposed under subparagraph (A) of this subdivision;

(ii) For calendar months commencing on or after July 1, 2018, but prior to July 1, 2019, the commissioner shall deposit into the Special Transportation Fund established under section 13b-68 two and one-half per cent of the amounts received by the state from the tax imposed under subparagraphs (A) and (H) of this subdivision on the sale of a motor vehicle;

[(ii)] (iii) For calendar months commencing on or after July 1, [2020] 2019, but prior to July 1, [2021] 2020, the commissioner shall deposit into the Special Transportation Fund established under section 13b-68 twenty per cent of the amounts received by the state from the tax imposed under subparagraphs (A) and (H) of this subdivision on the sale of a motor vehicle;

[(iii)] (iv) For calendar months commencing on or after July 1, [2021] 2020, but prior to July 1, [2022] 2021, the commissioner shall deposit into the Special Transportation Fund established under section 13b-68 forty per cent of the amounts received by the state from the tax imposed under subparagraphs (A) and (H) of this subdivision on the sale of a motor vehicle;

[(iv)] (v) For calendar months commencing on or after July 1, [2022] 2021, but prior to July 1, [2023] 2022, the commissioner shall deposit into the Special Transportation Fund established under section 13b-68 sixty per cent of the amounts received by the state from the tax imposed under subparagraphs (A) and (H) of this subdivision on the sale of a motor vehicle;

[(v)] (vi) For calendar months commencing on or after July 1, [2023] 2022, but prior to July 1, [2024] 2023, the commissioner shall deposit into the Special Transportation Fund established under section 13b-68 eighty per cent of the amounts received by the state from the tax imposed under subparagraphs (A) and (H) of this subdivision on the sale of a motor vehicle; and

[(vi)] (vii) For calendar months commencing on or after July 1, [2024] 2023, the commissioner shall deposit into the Special Transportation Fund established under section 13b-68 one hundred per cent of the amounts received by the state from the tax imposed under subparagraphs (A) and (H) of this subdivision on the sale of a motor vehicle.

Sec. 16. Subdivision (1) of section 12-411 of the 2018 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2018, and applicable to sales occurring on or after July 1, 2018):

(1) (A) An excise tax is hereby imposed on the storage, acceptance, consumption or any other use in this state of tangible personal property purchased from any retailer for storage, acceptance, consumption or any other use in this state, the acceptance or receipt of any services constituting a sale in accordance with subdivision (2) of subsection (a) of section 12-407, purchased from any retailer for consumption or use in this state, or the storage, acceptance, consumption or any other use in this state of tangible personal property which has been manufactured, fabricated, assembled or processed from materials by a person, either within or without this state, for storage, acceptance, consumption or any other use by such person in this state, to be measured by the sales price of materials, at the rate of six and thirty-five-hundredths per cent of the sales price of such property or services, except, in lieu of said rate of six and thirty-five-hundredths per cent;

(B) (i) At a rate of [fifteen] seventeen per cent of the rent paid to a hotel or lodging house for the first period not exceeding thirty consecutive calendar days;

(ii) At a rate of [eleven] thirteen per cent of the rent paid to a bed and breakfast establishment for the first period not exceeding thirty consecutive calendar days;

(C) With respect to the storage, acceptance, consumption or use in this state of a motor vehicle purchased from any retailer for storage, acceptance, consumption or use in this state by any individual who is a member of the armed forces of the United States and is on full-time active duty in Connecticut and who is considered, under 50 App USC 574, a resident of another state, or to any such individual and the spouse of such individual at a rate of four and one-half per cent of the sales price of such vehicle, provided such retailer requires and maintains a declaration by such individual, prescribed as to form by the commissioner and bearing notice to the effect that false statements made in such declaration are punishable, or other evidence, satisfactory to the commissioner, concerning the purchaser's state of residence under 50 App USC 574;

(D) (i) With respect to the acceptance or receipt in this state of labor that is otherwise taxable under subparagraph (C) or (G) of subdivision (2) of subsection (a) of section 12-407 on existing vessels and repair or maintenance services on vessels occurring on and after July 1, 1999, such services shall be exempt from such tax;

(ii) With respect to the storage, acceptance or other use of a vessel in this state, such storage, acceptance or other use shall be exempt from such tax, provided such vessel is docked in this state for sixty or fewer days in a calendar year;

(E) (i) With respect to the acceptance or receipt in this state of computer and data processing services purchased from any retailer for consumption or use in this state occurring on or after July 1, 2001, at the rate of one per cent of such services, and (ii) with respect to the acceptance or receipt in this state of Internet access services, on and after July 1, 2001, such services shall be exempt from such tax;

(F) With respect to the acceptance or receipt in this state of patient care services purchased from any retailer for consumption or use in this state for which payment is received by the hospital on or after July 1, 1999, and prior to July 1, 2001, at the rate of five and three-fourths per cent and on and after July 1, 2001, such services shall be exempt from such tax;

(G) With respect to the rental or leasing of a passenger motor vehicle for a period of thirty consecutive calendar days or less, at a rate of nine and thirty-five-hundredths per cent;

(H) With respect to the acceptance or receipt in this state of (i) a motor vehicle for a sales price exceeding fifty thousand dollars, at a rate of seven and three-fourths per cent on the entire sales price, (ii) jewelry, whether real or imitation, for a sales price exceeding five thousand dollars, at a rate of seven and three-fourths per cent on the entire sales price, and (iii) an article of clothing or footwear intended to be worn on or about the human body, a handbag, luggage, umbrella, wallet or watch for a sales price exceeding one thousand dollars, at a rate of seven and three-fourths per cent on the entire sales price. For purposes of this subparagraph, "motor vehicle" has the meaning provided in section 14-1, but does not include a motor vehicle subject to the provisions of subparagraph (C) of this subdivision, a motor vehicle having a gross vehicle weight rating over twelve thousand five hundred pounds, or a motor vehicle having a gross vehicle weight rating of twelve thousand five hundred pounds or less that is not used for private passenger purposes, but is designed or used to transport merchandise, freight or persons in connection with any business enterprise and issued a commercial registration or more specific type of registration by the Department of Motor Vehicles;

[(I) (i) For calendar quarters ending on or after September 30, 2019, the commissioner shall deposit into the regional planning incentive account, established pursuant to section 4-66k, six and seven-tenths per cent of the amounts received by the state from the tax imposed under subparagraph (B) of this subdivision and ten and seven-tenths per cent of the amounts received by the state from the tax imposed under subparagraph (G) of this subdivision;]

[(ii)] (I) For calendar [quarters] months ending on or after [September 30] August 31, 2018, the commissioner shall deposit into the Tourism Fund established under section 10-395b [ten] eleven and three-quarters per cent of the amounts received by the state from the tax imposed under subparagraph (B) of this subdivision; and

[(J) For calendar months commencing on or after July 1, 2017, the commissioner shall deposit into said municipal revenue sharing account seven and nine-tenths per cent of the amounts received by the state from the tax imposed under subparagraph (A) of this subdivision; and]

[(K)] (J) (i) For calendar months commencing on or after July 1, 2017, the commissioner shall deposit into said Special Transportation Fund seven and nine-tenths per cent of the amounts received by the state from the tax imposed under subparagraph (A) of this subdivision;

(ii) For calendar months commencing on or after July 1, 2018, but prior to July 1, 2019, the commissioner shall deposit into the Special Transportation Fund established under section 13b-68 two and one-half per cent of the amounts received by the state from the tax imposed under subparagraphs (A) and (H) of this subdivision on the acceptance or receipt in this state of a motor vehicle;

[(ii)] (iii) For calendar months commencing on or after July 1, [2020] 2019, but prior to July 1, [2021] 2020, the commissioner shall deposit into the Special Transportation Fund established under section 13b-68 twenty per cent of the amounts received by the state from the tax imposed under subparagraphs (A) and (H) of this subdivision on the [sale] acceptance or receipt in this state of a motor vehicle;

[(iii)] (iv) For calendar months commencing on or after July 1, [2021] 2020, but prior to July 1, [2022] 2021, the commissioner shall deposit into the Special Transportation Fund established under section 13b-68 forty per cent of the amounts received by the state from the tax imposed under subparagraphs (A) and (H) of this subdivision on the [sale] acceptance or receipt in this state of a motor vehicle;

[(iv)] (v) For calendar months commencing on or after July 1, [2022] 2021, but prior to July 1, [2023] 2022, the commissioner shall deposit into the Special Transportation Fund established under section 13b-68 sixty per cent of the amounts received by the state from the tax imposed under subparagraphs (A) and (H) of this subdivision on the [sale] acceptance or receipt in this state of a motor vehicle;

[(v)] (vi) For calendar months commencing on or after July 1, [2023] 2022, but prior to July 1, [2024] 2023, the commissioner shall deposit into the Special Transportation Fund established under section 13b-68 eighty per cent of the amounts received by the state from the tax imposed under subparagraphs (A) and (H) of this subdivision on the [sale] acceptance or receipt in this state of a motor vehicle; and

[(vi)] (vii) For calendar months commencing on or after July 1, [2024] 2023, the commissioner shall deposit into the Special Transportation Fund established under section 13b-68 one hundred per cent of the amounts received by the state from the tax imposed under subparagraphs (A) and (H) of this subdivision on the [sale] acceptance or receipt in this state of a motor vehicle.

Sec. 17. Subdivision (120) of section 12-412 of the 2018 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2018, and applicable to sales occurring on or after July 1, 2018):

(120) [On and after April 1, 2015, sales of the following nonprescription drugs or medicines available for purchase for use in or on the body: Vitamin or mineral concentrates; dietary supplements; natural or herbal drugs or medicines; products intended to be taken for coughs, cold, asthma or allergies, or antihistamines; laxatives; antidiarrheal medicines; analgesics; antibiotic, antibacterial, antiviral and antifungal medicines; antiseptics; astringents; anesthetics; steroidal medicines; anthelmintics; emetics and antiemetics; antacids; and any medication prepared to be used in the eyes, ears or nose. Nonprescription drugs or medicines shall not include cosmetics, dentrifrices, mouthwash, shaving and hair care products, soaps or deodorants] Sales of marijuana sold pursuant to section 21a-408d by a licensed dispensary for palliative use, as defined in section 21a-408.

Sec. 18. Subsection (b) of section 12-214 of the general statutes is amended by adding subdivision (9) as follows (Effective from passage and applicable to income years commencing on or after January 1, 2019):

(NEW) (9) (A) With respect to income years commencing on or after January 1, 2019, any company subject to the tax imposed in accordance with subsection (a) of this section shall pay, for such income year, except when the tax so calculated is equal to two hundred fifty dollars, an additional tax in an amount equal to eight per cent of the tax calculated under said subsection (a) for such income year, without reduction of the tax so calculated by the amount of any credit against such tax. The additional amount of tax determined under this subsection for any income year shall constitute a part of the tax imposed by the provisions of said subsection (a) and shall become due and be paid, collected and enforced as provided in this chapter.

(B) Any company whose gross income for the income year was less than one hundred million dollars shall not be subject to the additional tax imposed under subparagraph (A) of this subdivision. This exception shall not apply to taxable members of a combined group that files a combined unitary tax return.

Sec. 19. Subdivision (1) of subsection (k) of section 12-218e of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage and applicable to income years commencing on or after January 1, 2018):

(k) (1) In the case of a combined group whose unitary business is primarily engaged in manufacturing, in no event shall the tax calculated for a combined group on a combined unitary basis, prior to surtax and application of credits, exceed the nexus combined base tax described in subdivision (2) of this subsection by more than two million five hundred thousand dollars.

Sec. 20. Subparagraph (B) of subdivision (20) of subsection (a) of section 12-701 of the 2018 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage and applicable to taxable years commencing on or after January 1, 2018):

(B) There shall be subtracted therefrom:

(i) [to] To the extent properly includable in gross income for federal income tax purposes, any income with respect to which taxation by any state is prohibited by federal law; [,]

(ii) [to] To the extent allowable under section 12-718, exempt dividends paid by a regulated investment company; [,]

(iii) To the extent properly includable in gross income for federal income tax purposes, the amount of any refund or credit for overpayment of income taxes imposed by this state, or any other state of the United States or a political subdivision thereof, or the District of Columbia; [, to the extent properly includable in gross income for federal income tax purposes,]

(iv) [to] To the extent properly includable in gross income for federal income tax purposes and not otherwise subtracted from federal adjusted gross income pursuant to clause (x) of this subparagraph in computing Connecticut adjusted gross income, any tier 1 railroad retirement benefits; [,]

(v) [to] To the extent any additional allowance for depreciation under Section 168(k) of the Internal Revenue Code, as provided by Section 101 of the Job Creation and Worker Assistance Act of 2002, for property placed in service after December 31, 2001, but prior to September 10, 2004, was added to federal adjusted gross income pursuant to subparagraph (A)(ix) of this subdivision in computing Connecticut adjusted gross income for a taxable year ending after December 31, 2001, twenty-five per cent of such additional allowance for depreciation in each of the four succeeding taxable years; [,]

(vi) [to] To the extent properly includable in gross income for federal income tax purposes, any interest income from obligations issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district or similar public entity created under the laws of the state of Connecticut; [,]

(vii) [to] To the extent properly includable in determining the net gain or loss from the sale or other disposition of capital assets for federal income tax purposes, any gain from the sale or exchange of obligations issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district or similar public entity created under the laws of the state of Connecticut, in the income year such gain was recognized; [,]

(viii) [any] Any interest on indebtedness incurred or continued to purchase or carry obligations or securities the interest on which is subject to tax under this chapter but exempt from federal income tax, to the extent that such interest on indebtedness is not deductible in determining federal adjusted gross income and is attributable to a trade or business carried on by such individual; [,]

(ix) [ordinary] Ordinary and necessary expenses paid or incurred during the taxable year for the production or collection of income which is subject to taxation under this chapter but exempt from federal income tax, or the management, conservation or maintenance of property held for the production of such income, and the amortizable bond premium for the taxable year on any bond the interest on which is subject to tax under this chapter but exempt from federal income tax, to the extent that such expenses and premiums are not deductible in determining federal adjusted gross income and are attributable to a trade or business carried on by such individual; [,]

(x) (I) [for taxable years commencing prior to January 1, 2019, for] For a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is less than fifty thousand dollars, or as a married individual filing separately whose federal adjusted gross income for such taxable year is less than fifty thousand dollars, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income for such taxable year is less than sixty thousand dollars or a person who files a return under the federal income tax as a head of household whose federal adjusted gross income for such taxable year is less than sixty thousand dollars, an amount equal to the Social Security benefits includable for federal income tax purposes; and

(II) [for taxable years commencing prior to January 1, 2019, for] For a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is fifty thousand dollars or more, or as a married individual filing separately whose federal adjusted gross income for such taxable year is fifty thousand dollars or more, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income from such taxable year is sixty thousand dollars or more or for a person who files a return under the federal income tax as a head of household whose federal adjusted gross income for such taxable year is sixty thousand dollars or more, an amount equal to the difference between the amount of Social Security benefits includable for federal income tax purposes and the lesser of twenty-five per cent of the Social Security benefits received during the taxable year, or twenty-five per cent of the excess described in Section 86(b)(1) of the Internal Revenue Code;

[(III) for the taxable year commencing January 1, 2019, and each taxable year thereafter, for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or as a married individual filing separately whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income for such taxable year is less than one hundred thousand dollars or a person who files a return under the federal income tax as a head of household whose federal adjusted gross income for such taxable year is less than one hundred thousand dollars, an amount equal to the Social Security benefits includable for federal income tax purposes; and

(IV) for the taxable year commencing January 1, 2019, and each taxable year thereafter, for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is seventy-five thousand dollars or more, or as a married individual filing separately whose federal adjusted gross income for such taxable year is seventy-five thousand dollars or more, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income from such taxable year is one hundred thousand dollars or more or for a person who files a return under the federal income tax as a head of household whose federal adjusted gross income for such taxable year is one hundred thousand dollars or more, an amount equal to the difference between the amount of Social Security benefits includable for federal income tax purposes and the lesser of twenty-five per cent of the Social Security benefits received during the taxable year, or twenty-five per cent of the excess described in Section 86(b)(1) of the Internal Revenue Code,]

(xi) [to] To the extent properly includable in gross income for federal income tax purposes, any amount rebated to a taxpayer pursuant to section 12-746, as amended by this act;

(xii) [to] To the extent properly includable in the gross income for federal income tax purposes of a designated beneficiary, any distribution to such beneficiary from any qualified state tuition program, as defined in Section 529(b) of the Internal Revenue Code, established and maintained by this state or any official, agency or instrumentality of the state; [,]

(xiii) [to] To the extent allowable under section 12-701a, contributions to accounts established pursuant to any qualified state tuition program, as defined in Section 529(b) of the Internal Revenue Code, established and maintained by this state or any official, agency or instrumentality of the state; [,]

(xiv) [to] To the extent properly includable in gross income for federal income tax purposes, the amount of any Holocaust victims' settlement payment received in the taxable year by a Holocaust victim; [,]

(xv) [to] To the extent properly includable in gross income for federal income tax purposes of an account holder, as defined in section 31-51ww, interest earned on funds deposited in the individual development account, as defined in section 31-51ww, of such account holder; [,]

(xvi) [to] To the extent properly includable in the gross income for federal income tax purposes of a designated beneficiary, as defined in section 3-123aa, interest, dividends or capital gains earned on contributions to accounts established for the designated beneficiary pursuant to the Connecticut Homecare Option Program for the Elderly established by sections 3-123aa to 3-123ff, inclusive; [,]

(xvii) [to] To the extent properly includable in gross income for federal income tax purposes, any income received from the United States government as retirement pay for a retired member of (I) the Armed Forces of the United States, as defined in Section 101 of Title 10 of the United States Code, or (II) the National Guard, as defined in Section 101 of Title 10 of the United States Code; [,]

(xviii) [to] To the extent properly includable in gross income for federal income tax purposes for the taxable year, any income from the discharge of indebtedness in connection with any reacquisition, after December 31, 2008, and before January 1, 2011, of an applicable debt instrument or instruments, as those terms are defined in Section 108 of the Internal Revenue Code, as amended by Section 1231 of the American Recovery and Reinvestment Act of 2009, to the extent any such income was added to federal adjusted gross income pursuant to subparagraph (A)(xi) of this subdivision in computing Connecticut adjusted gross income for a preceding taxable year; [,]

(xix) [to] To the extent not deductible in determining federal adjusted gross income, the amount of any contribution to a manufacturing reinvestment account established pursuant to section 32-9zz in the taxable year that such contribution is made; [,]

(xx) [to] To the extent properly includable in gross income for federal income tax purposes, (I) for the taxable year commencing January 1, 2015, ten per cent of the income received from the state teachers' retirement system, and (II) for the taxable [years] year commencing January 1, 2016, [January 1, 2017, and January 1, 2018] and each taxable year thereafter, twenty-five per cent of the income received from the state teachers' retirement system; [, and (III) for the taxable year commencing January 1, 2019, and each taxable year thereafter, fifty per cent of the income received from the state teachers' retirement system or the percentage, if applicable, pursuant to clause (xxi) of this subparagraph,]

[(xxi) to the extent properly includable in gross income for federal income tax purposes, except for retirement benefits under clause (iv) of this subparagraph and retirement pay under clause (xvii) of this subparagraph, for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or as a married individual filing separately whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or as a head of household whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income for such taxable year is less than one hundred thousand dollars, (I) for the taxable year commencing January 1, 2019, fourteen per cent of any pension or annuity income, (II) for the taxable year commencing January 1, 2020, twenty-eight per cent of any pension or annuity income, (III) for the taxable year commencing January 1, 2021, forty-two per cent of any pension or annuity income, (IV) for the taxable year commencing January 1, 2022, fifty-six per cent of any pension or annuity income, (V) for the taxable year commencing January 1, 2023, seventy per cent of any pension or annuity income, (VI) for the taxable year commencing January 1, 2024, eighty-four per cent of any pension or annuity income, and (VII) for the taxable year commencing January 1, 2025, any pension or annuity income,]

[(xxii) the] (xxi) The amount of lost wages and medical, travel and housing expenses, not to exceed ten thousand dollars in the aggregate, incurred by a taxpayer during the taxable year in connection with the donation to another person of an organ for organ transplantation occurring on or after January 1, 2017; [,] and

[(xxiii) to] (xxii) To the extent properly includable in gross income for federal income tax purposes, the amount of any financial assistance received from the Crumbling Foundations Assistance Fund or paid to or on behalf of the owner of a residential building pursuant to sections 8-442 and 8-443.

Sec. 21. Section 12-296 of the 2018 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2018, and applicable to sales occurring on or after July 1, 2018):

A tax is imposed on all cigarettes held in this state by any person for sale, such tax to be at the rate of [two hundred seventeen and one-half] two hundred thirty mills for each cigarette and the payment thereof shall be for the account of the purchaser or consumer of such cigarettes and shall be evidenced by the affixing of stamps to the packages containing the cigarettes as provided in this chapter. Any tax imposed under this chapter shall be reduced by fifty per cent for any product the Secretary of the United States Department of Health and Human Services determines to be a modified risk tobacco product pursuant to 21 USC 387k, as amended from time to time.

Sec. 22. Section 12-316 of the 2018 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2018):

A tax is hereby imposed at the rate of [two hundred seventeen and one-half] two hundred thirty mills for each cigarette upon the storage or use within this state of any unstamped cigarettes in the possession of any person other than a licensed distributor or dealer, or a carrier for transit from without this state to a licensed distributor or dealer within this state. Any person, including distributors, dealers, carriers, warehousemen and consumers, last having possession of unstamped cigarettes in this state shall be liable for the tax on such cigarettes if such cigarettes are unaccounted for in transit, storage or otherwise, and in such event a presumption shall exist for the purpose of taxation that such cigarettes were used and consumed in Connecticut.

Sec. 23. (Effective from passage) (a) An excise tax is hereby imposed upon each distributor and each dealer, as each is defined in section 12- 285 of the general statutes and licensed pursuant to chapter 214 of the general statutes, in the amount of twelve and one-half mills per cigarette, as defined in section 12-285 of the general statutes, in such distributor's or such dealer's inventory as of the close of business on June 30, 2018, or, if the business closes after eleven fifty-nine o'clock p.m. on said date, at eleven fifty-nine o'clock p.m. on said date.

(b) Each such licensed distributor or dealer shall, not later than August 15, 2018, file with the Commissioner of Revenue Services, on forms prescribed by said commissioner, a report that shows the number of cigarettes in inventory as of the close of business on June 30, 2018, or, if the business closes after eleven fifty-nine o'clock p.m. on said date, at eleven fifty-nine o'clock p.m. on said date, upon which inventory the tax under subsection (a) of this section shall be imposed. The tax shall be due and payable on the due date of such report. If any distributor or dealer required to file a report pursuant to this section fails to file such report on or before August 15, 2018, the commissioner shall make an estimate of the number of cigarettes in such distributor's or dealer's inventory as of the close of business on June 30, 2018, based upon any information that is in the commissioner's possession or that may come into the commissioner's possession. The provisions of chapter 214 of the general statutes pertaining to failure to file returns, examination of returns by the commissioner, the issuance of deficiency assessments or assessments where no return has been filed, the collection of tax, the imposition of penalties and the accrual of interest shall apply to the distributors and dealers required to pay the tax imposed under this section. Failure of any distributor or dealer to file such report when due shall be sufficient reason to revoke such distributor's or dealer's license under the provisions of said chapter 214 and to revoke any other state license or permit issued by the Department of Revenue Services and held by such distributor or dealer. If, in the discretion of the commissioner, the enforcement of this section would otherwise be adversely affected, the commissioner shall not renew the dealer's license of any dealer who fails to file such report, or the distributor's license of any distributor who fails to file such report, until such report is filed.

Sec. 24. Subdivision (2) of subsection (a) of section 12-330c of the 2018 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2018, and applicable to sales occurring on or after July 1, 2018):

(2) Notwithstanding the provisions of subdivision (1) of this subsection, in the case of cigars the tax shall not exceed one dollar and fifty cents per cigar.

Sec. 25. (NEW) (Effective July 1, 2018, and applicable to sales occurring on or after July 1, 2018) (a) As used in this section:

(1) "Electronic nicotine delivery system" means an electronic device that may be used to simulate smoking in the delivery of nicotine or other substances to a person inhaling from the device, and includes, but is not limited to, an electronic cigarette, electronic cigar, electronic cigarillo, electronic pipe or electronic hookah and any related device and any cartridge or other component of such device;

(2) "Liquid nicotine container" means a container that holds a liquid substance containing nicotine that is sold, marketed or intended for use in an electronic nicotine delivery system or vapor product. "Liquid nicotine container" does not include such a container that is prefilled and sealed by the manufacturer and not intended to be opened by the consumer;

(3) "Vapor product" means any product that employs a heating element, power source, electronic circuit or other electronic, chemical or mechanical means, regardless of shape or size, to produce a vapor that may or may not include nicotine, that is inhaled by the user of such product, but shall not include a medicinal or therapeutic product used by a (A) licensed health care provider to treat a patient in a health care setting, or (B) a patient, as prescribed or directed by a licensed health care provider in any setting;

(4) "Electronic cigarette liquid" means a liquid that, when used in an electronic nicotine delivery system or vapor product, produces a vapor that may or may not include nicotine and is inhaled by the user of such electronic nicotine delivery system or vapor product;

(5) "Electronic cigarette product" includes any electronic nicotine delivery system, liquid nicotine container, vapor product and electronic cigarette liquid;

(6) "Electronic cigarette wholesaler" means any person engaged in the business of selling at wholesale any electronic cigarette product in the state or any person who purchases for sale an untaxed electronic cigarette product at a wholesale sales price from an electronic cigarette wholesaler;

(7) "Wholesale sales price" means the price of an electronic cigarette product or, if no price has been set, the wholesale value of such product;

(8) "Sale" means any transfer of title or possession or both, exchange, barter, distribution or gift of an electronic cigarette product, with or without consideration;

(9) "Commissioner" means the Commissioner of Revenue Services; and

(10) "Department" means the Department of Revenue Services.

(b) For each calendar month commencing on and after July 1, 2018, a tax is hereby imposed on each electronic cigarette wholesaler at the rate of seventy-five per cent of the wholesale sales price of electronic cigarette products sold in the state by such wholesaler. Such tax shall not be imposed on any electronic cigarette product that is (1) exported from the state, or (2) not subject to taxation by the state pursuant to any laws of the United States.

(c) Each electronic cigarette wholesaler shall file with the commissioner, on or before the last day of each month, a report for the calendar month immediately preceding in such form and containing such information as the commissioner prescribes. The return shall be accompanied by a payment of the amount of the tax shown to be due thereon. Each electronic cigarette wholesaler shall file such return electronically with the department and make such payment by electronic funds transfer in the manner provided by chapter 228g of the general statutes, irrespective of whether the electronic cigarette wholesaler would otherwise have been required to file such return electronically or to make such payment by electronic funds transfer under the provisions of said chapter.

(d) If any person fails to pay the amount of tax reported due on its report within the time specified under this section, there shall be imposed a penalty equal to ten per cent of such amount due and unpaid, or fifty dollars, whichever is greater. Such amount shall bear interest at the rate of one per cent per month or fraction thereof, from the due date of such tax until the date of payment. Subject to the provisions of section 12-3a of the general statutes, the commissioner may waive all or part of the penalties provided under this section when it is proven to the commissioner's satisfaction that the failure to pay any tax was due to reasonable cause and was not intentional or due to neglect.

(e) Each person, other than an electronic cigarette wholesaler, who is required, on behalf of an electronic cigarette wholesaler, to collect, truthfully account for and pay over the tax imposed on such electronic cigarette wholesaler under this section and who wilfully fails to collect such tax or truthfully account for and pay over such tax or who wilfully attempts in any manner to evade or defeat the tax or the payment thereof, shall, in addition to other penalties provided by law, be liable for a penalty equal to the total amount of the tax evaded, or not collected, or not accounted for and paid over, including any penalty or interest attributable to such wilful failure to collect or truthfully account for and pay over such tax or such wilful attempt to evade or defeat such tax, provided such penalty shall only be imposed against such person in the event that such tax, penalty or interest cannot otherwise be collected from the electronic cigarette wholesaler itself. The amount of such penalty with respect to which a person may be personally liable under this section shall be collected in accordance with section 12-555a of the general statutes and any amount so collected shall be allowed as a credit against the amount of such tax, penalty or interest due and owing from the electronic cigarette wholesaler. The dissolution of the electronic cigarette wholesaler shall not discharge any person in relation to any personal liability under this section for wilful failure to collect or truthfully account for and pay over such tax or for a wilful attempt to evade or defeat such tax prior to dissolution, except as otherwise provided in this section. For purposes of this section, "person" includes any individual, corporation, limited liability company or partnership and any officer or employee of any corporation, including a dissolved corporation, and a member or employee of any partnership or limited liability company who, as such officer, employee or member, is under a duty to file a tax return under this section on behalf of an electronic cigarette wholesaler or to collect or truthfully account for and pay over the tax imposed under this section on behalf of an electronic cigarette wholesaler.

(f) No tax credit or credits shall be allowable against the tax imposed under this section.

(g) The provisions of sections 12-550 to 12-554, inclusive, and 12-555a of the general statutes shall apply to the provisions of this section in the same manner and with the same force and effect as if the language of said sections had been incorporated in full into this section and had expressly referred to the tax under this section, except to the extent that any provision is inconsistent with a provision in this section.

(h) The commissioner may adopt regulations, in accordance with the provisions of chapter 54 of the general statutes, to implement the provisions of this section.

Sec. 26. Section 12-494 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2018, and applicable to conveyances occurring on or after July 1, 2018):

(a) There is imposed a tax on each deed, instrument or writing, whereby any lands, tenements or other realty is granted, assigned, transferred or otherwise conveyed to, or vested in, the purchaser, or any other person by such purchaser's direction, when the consideration for the interest or property conveyed equals or exceeds two thousand dollars, (1) subject to the provisions of subsection (b) of this section, at the rate of [three-quarters] eighty-five-hundredths of one per cent of the consideration for the interest in real property conveyed by such deed, instrument or writing, the revenue from which shall be remitted by the town clerk of the municipality in which such tax is paid, not later than ten days following receipt thereof, to the Commissioner of Revenue Services for deposit to the credit of the state General Fund, and (2) at the rate of one-fourth of one per cent of the consideration for the interest in real property conveyed by such deed, instrument or writing, provided the amount imposed under this subdivision shall become part of the general revenue of the municipality in accordance with section 12-499.

(b) The rate of tax imposed under subdivision (1) of subsection (a) of this section shall, in lieu of the rate under said subdivision (1), be imposed on certain conveyances as follows: (1) In the case of any conveyance of real property which at the time of such conveyance is used for any purpose other than residential use, except unimproved land, the tax under said subdivision (1) shall be imposed at the rate of [one and one-quarter] one and forty-hundredths per cent of the consideration for the interest in real property conveyed; (2) in the case of any conveyance in which the real property conveyed is a residential estate, including a primary dwelling and any auxiliary housing or structures, regardless of the number of deeds, instruments or writings used to convey such residential real estate, for which the consideration or aggregate consideration, as the case may be, in such conveyance is eight hundred thousand dollars or more, the tax under said subdivision (1) shall be imposed (A) at the rate of [three-quarters] eighty-five-hundredths of one per cent on that portion of such consideration up to and including the amount of eight hundred thousand dollars, and (B) at the rate of [one and one-quarter] one and forty-hundredths per cent on that portion of such consideration in excess of eight hundred thousand dollars; and (3) in the case of any conveyance in which real property on which mortgage payments have been delinquent for not less than six months is conveyed to a financial institution or its subsidiary which holds such a delinquent mortgage on such property, the tax under said subdivision (1) shall be imposed at the rate of [three-quarters] eight-five-hundredths of one per cent of the consideration for the interest in real property conveyed. For the purposes of subdivision (1) of this subsection, "unimproved land" includes land designated as farm, forest or open space land.

(c) In addition to the tax imposed under subsection (a) of this section, any targeted investment community, as defined in section 32-222, or any municipality in which properties designated as manufacturing plants under section 32-75c are located, may, on or after March 15, 2003, impose an additional tax on each deed, instrument or writing, whereby any lands, tenements or other realty is granted, assigned, transferred or otherwise conveyed to, or vested in, the purchaser [,] or any other person by [his] the purchaser's direction, when the consideration for the interest or property conveyed equals or exceeds two thousand dollars, which additional tax shall be at a rate of up to one-fourth of one per cent of the consideration for the interest in real property conveyed by such deed, instrument or writing. The revenue from such additional tax shall become part of the general revenue of the municipality in accordance with section 12-499.

Sec. 27. Section 22a-243 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2018):

For purposes of sections 22a-243 to 22a-245c, inclusive:

(1) "Carbonated beverage" means beer or other malt beverages, and mineral waters, soda water and similar carbonated soft drinks in liquid form and intended for human consumption;

(2) "Noncarbonated beverage" means any juice, juice drink, sports drink, tea, coffee or water, including flavored water, nutritionally enhanced water and any beverage that is identified through the use of letters, words or symbols on such beverage's product label as a type of juice, juice drink, sports drink, tea, coffee or water, but excluding [juice and] mineral water;

(3) "Alcoholic beverage" means any wine or liquor, as those terms are defined in section 12-433;

[(3)] (4) "Beverage container" means the individual, separate, sealed glass, metal or plastic bottle, can, jar or carton containing a carbonated [or] beverage, a noncarbonated beverage or an alcoholic beverage, but does not include a bottle, can, jar or carton (A) three liters or more in size if containing a noncarbonated beverage, [or] (B) less than fifty milliliters or more than two liters in size if containing an alcoholic beverage, or (C) made of high-density polyethylene;

[(4)] (5) "Consumer" means every person who purchases a beverage in a beverage container for use or consumption;

[(5)] (6) "Dealer" means every person who engages in the sale of beverages in beverage containers to a consumer;

[(6)] (7) "Distributor" means every person who engages in the sale of beverages in beverage containers to a dealer in this state including any manufacturer who engages in such sale and includes a dealer who engages in the sale of beverages in beverage containers on which no deposit has been collected prior to retail sale;

[(7)] (8) "Manufacturer" means every person bottling, canning or otherwise filling beverage containers for sale to distributors or dealers or, in the case of private label brands, the owner of the private label trademark;

[(8)] (9) "Place of business of a dealer" means the fixed location at which a dealer sells or offers for sale beverages in beverage containers to consumers;

[(9)] (10) "Redemption center" means any facility established to redeem empty beverage containers from consumers or to collect and sort empty beverage containers from dealers and to prepare such containers for redemption by the appropriate distributors;

[(10)] (11) "Use or consumption" includes the exercise of any right or power over a beverage incident to the ownership thereof, other than the sale or the keeping or retention of a beverage for the purposes of sale;

[(11)] (12) "Nonrefillable beverage container" means a beverage container [which] that is not designed to be refilled and reused in its original shape; [and]

[(12)] (13) "Deposit initiator" means the first distributor to collect the deposit on a beverage container sold to any person within this state.

Sec. 28. Section 22a-244 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2018):

(a) (1) Every beverage container containing a carbonated beverage sold or offered for sale in this state, except for any such beverage containers sold or offered for sale for consumption on an interstate passenger carrier, shall have a refund value. Such refund value shall not be less than five cents and shall be a uniform amount throughout the distribution process in this state.

(2) Every beverage container containing a noncarbonated beverage sold or offered for sale in this state shall have a refund value, except for beverage containers containing a noncarbonated beverage that are (A) sold or offered for sale for consumption on an interstate passenger carrier, or (B) that comprise any dealer's existing inventory as of March 31, 2009. Such refund value shall not be less than five cents and shall be a uniform amount throughout the distribution process in this state.

(3) Every beverage container containing an alcoholic beverage sold or offered for sale in this state shall have a refund value, except for beverage containers containing an alcoholic beverage that comprise any dealer's existing inventory as of September 30, 2018. Such refund value shall not be less than twenty-five cents and shall be a uniform amount throughout the distribution process in this state.

(b) Every beverage container sold or offered for sale in this state, that has a refund value pursuant to subsection (a) of this section, shall clearly indicate by embossing or by a stamp or by a label or other method securely affixed to the beverage container (1) either the refund value of the container or the words "return for deposit" or "return for refund" or other words as approved by the Department of Energy and Environmental Protection, and (2) either the word "Connecticut" or the abbreviation "Ct.", provided this subdivision shall not apply to glass beverage containers permanently marked or embossed with a brand name.

(c) No person shall sell or offer for sale in this state any metal beverage container (1) a part of which is designed to be detached in order to open such container, or (2) that is connected to another beverage container by a device constructed of a material which does not decompose by photodegradation, chemical degradation or biodegradation within a reasonable time after exposure to the elements.

Sec. 29. Subdivision (2) of subsection (a) of section 12-458 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2018, and applicable to sales occurring on or after July 1, 2018):

(2) On said date and coincident with the filing of such return each distributor shall pay to the commissioner for the account of the purchaser or consumer a tax (A) on each gallon of such fuels sold or used in this state during the preceding calendar month, of [twenty-six cents on and after January 1, 1992, twenty-eight cents on and after January 1, 1993, twenty-nine cents on and after July 1, 1993, thirty cents on and after January 1, 1994, thirty-one cents on and after July 1, 1994, thirty-two cents on and after January 1, 1995, thirty-three cents on and after July 1, 1995, thirty-four cents on and after October 1, 1995, thirty-five cents on and after January 1, 1996, thirty-six cents on and after April 1, 1996, thirty-seven cents on and after July 1, 1996, thirty-eight cents on and after October 1, 1996, thirty-nine cents on and after January 1, 1997, thirty-six cents on and after July 1, 1997, thirty-two cents on and after July 1, 1998, and] twenty-five cents on and after July 1, 2000, twenty-seven cents on and after July 1, 2018, twenty-eight cents on and after July 1, 2019, thirty cents on and after July 1, 2020, and thirty-two cents on and after July 1, 2021; and (B) in lieu of said taxes, each distributor shall pay a tax on each gallon of gasohol, as defined in section 14-1, sold or used in this state during such preceding calendar month, of [twenty-five cents on and after January 1, 1992, twenty-seven cents on and after January 1, 1993, twenty-eight cents on and after July 1, 1993, twenty-nine cents on and after January 1, 1994, thirty cents on and after July 1, 1994, thirty-one cents on and after January 1, 1995, thirty-two cents on and after July 1, 1995, thirty-three cents on and after October 1, 1995, thirty-four cents on and after January 1, 1996, thirty-five cents on and after April 1, 1996, thirty-six cents on and after July 1, 1996, thirty-seven cents on and after October 1, 1996, thirty-eight cents on and after January 1, 1997, thirty-five cents on and after July 1, 1997, thirty-one cents on and after July 1, 1998, and twenty-four cents on and after July 1, 2000, and] twenty-five cents on and after July 1, 2004, twenty-seven cents on and after July 1, 2018, twenty-eight cents on and after July 1, 2019, thirty cents on and after July 1, 2020, and thirty-two cents on and after July 1, 2021; (C) in lieu of said taxes, each distributor shall pay a tax on each gallon of diesel fuel, propane or natural gas sold or used in this state during such preceding calendar month, of [eighteen cents on and after September 1, 1991, and] twenty-six cents on and after August 1, 2002; (D) in lieu of said taxes, each distributor shall pay a tax on each gallon of propane or natural gas sold or used in this state during such preceding calendar month, of twenty-six cents on and after July 1, 2007; and (E) in lieu of said taxes, each distributor shall pay a tax on each gallon of diesel fuel sold or used in this state during such preceding calendar month, [of thirty-seven cents on and after July 1, 2007, and] at the applicable tax rate, as determined by the commissioner pursuant to section 12-458h, on and after July 1, 2008.

Sec. 30. (NEW) (Effective July 1, 2018, and applicable to sales occurring on or after July 1, 2018) (a) Each retailer of tires commonly used on any motor vehicle shall pay a fee of three dollars on the sale at retail of each such tire. As used in this section, "motor vehicle" has the same meaning as provided in section 14-1 of the general statutes, but excludes a motor vehicle having a gross vehicle weight rating over twelve thousand five hundred pounds.

(b) Any person engaged in the sale of such tires at retail shall register with the Commissioner of Revenue Services in the manner prescribed by the commissioner.

(c) Each such person shall, on or before the last day of the month next succeeding each calendar quarter, (1) file a return electronically for the preceding period with the commissioner on such forms as the commissioner prescribes, and (2) make payment of the fees required under subsection (a) of this section by electronic funds transfer in the manner provided by chapter 228g of the general statutes.

(d) Any fees due and unpaid under this section shall be subject to the penalties and interest established in section 12-547 of the general statutes and such fees, penalties or interest, due and unpaid, may be collected under the provisions of section 12-35 of the general statutes as if they were taxes due to the state.

(e) The provisions of sections 12-548 to 12-554, inclusive, and 12-555b of the general statutes shall apply to the provisions of this section in the same manner and with the same force and effect as if the language of said sections had been incorporated in full into this section and had expressly referred to the fee imposed under this section, except to the extent that any such provision is inconsistent with a provision of this section.

(f) The commissioner shall deposit any fees received pursuant to this section in the Special Transportation Fund.

Sec. 31. (NEW) (Effective July 1, 2018) At the end of each fiscal year commencing with the fiscal year ending June 30, 2019, the Comptroller is authorized to record as revenue for such fiscal year the fees imposed under section 30 of this act that are received by the Commissioner of Revenue Services not later than five business days after the last day of July immediately following the end of such fiscal year.

Sec. 32. (Effective from passage) Not later than June 30, 2018, the Comptroller may designate up to $17,800,000 of the resources of the General Fund for the fiscal year ending June 30, 2018, to be accounted for as revenue of the General Fund for the fiscal year ending June 30, 2019.

Sec. 33. Subdivision (1) of subsection (a) of section 12-217 of the 2018 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) (1) In arriving at net income as defined in section 12-213, whether or not the taxpayer is taxable under the federal corporation net income tax, there shall be deducted from gross income, (A) all items deductible under the Internal Revenue Code effective and in force on the last day of the income year except (i) any taxes imposed under the provisions of this chapter which are paid or accrued in the income year and in the income year commencing January 1, 1989, and thereafter, any taxes in any state of the United States or any political subdivision of such state, or the District of Columbia, imposed on or measured by the income or profits of a corporation which are paid or accrued in the income year, (ii) deductions for depreciation, which shall be allowed as provided in subsection (b) of this section, (iii) deductions for qualified domestic production activities income, as provided in Section 199 of the Internal Revenue Code, and (iv) in the case of any captive real estate investment trust, the deduction for dividends paid provided under Section 857(b)(2) of the Internal Revenue Code, and (B) additionally, in the case of a regulated investment company, the sum of (i) the exempt-interest dividends, as defined in the Internal Revenue Code, and (ii) expenses, bond premium, and interest related to tax-exempt income that are disallowed as deductions under the Internal Revenue Code, and (C) in the case of a taxpayer maintaining an international banking facility as defined in the laws of the United States or the regulations of the Board of Governors of the Federal Reserve System, as either may be amended from time to time, the gross income attributable to the international banking facility, provided, no expense or loss attributable to the international banking facility shall be a deduction under any provision of this section, and (D) additionally, in the case of all taxpayers, all dividends as defined in the Internal Revenue Code effective and in force on the last day of the income year not otherwise deducted from gross income, including dividends received from a DISC or former DISC as defined in Section 992 of the Internal Revenue Code and dividends deemed to have been distributed by a DISC or former DISC as provided in Section 995 of said Internal Revenue Code, other than thirty per cent of dividends received from a domestic corporation in which the taxpayer owns less than twenty per cent of the total voting power and value of the stock of such corporation, and (E) additionally, in the case of all taxpayers, the value of any capital gain realized from the sale of any land, or interest in land, to the state, any political subdivision of the state, or to any nonprofit land conservation organization where such land is to be permanently preserved as protected open space or to a water company, as defined in section 25-32a, where such land is to be permanently preserved as protected open space or as Class I or Class II water company land, and (F) in the case of manufacturers, the amount of any contribution to a manufacturing reinvestment account established pursuant to section 32-9zz in the income year that such contribution is made to the extent not deductible for federal income tax purposes. [, and (G) additionally, to the extent allowable under subsection (g) of section 32-776, the amount paid by a 7/7 participant, as defined in section 32-776, for the remediation of a brownfield.]

Sec. 34. Subsection (d) of section 12-746 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(d) As used in this section, "income tax liability as shown on such return" means the liability after application of the credit for property taxes allowed and taken on such return pursuant to section 12-704c, revision of 1958, revised to January 1, 1999, as corrected for mathematical error by the Commissioner of Revenue Services on the original return filed by such taxpayer.

Sec. 35. Section 683 of public act 17-2 of the June special session is repealed and the following is substituted in lieu thereof (Effective from passage):

Notwithstanding the provisions of section 16-245m of the general statutes, for the fiscal years ending June 30, 2018, and June 30, 2019, the sum of $63,500,000 shall be transferred from the Energy Conservation and [Loan] Load Management Fund and credited to the resources of the General Fund for each said fiscal year.

Sec. 36. Section 659 of public act 17-2 of the June special session is repealed. (Effective from passage)

Sec. 37. Section 12-704c of the 2018 supplement to the general statutes is repealed. (Effective January 1, 2018, and applicable to taxable years commencing on or after January 1, 2018)

Sec. 38. Section 12-704f of the 2018 supplement to the general statutes is repealed. (Effective from passage)

Sec. 39. Section 14-275d of the general statutes is repealed. (Effective July 1, 2019)

Sec. 40. Section 32-776 of the 2018 supplement to the general statutes is repealed. (Effective from passage)

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

Section 1

from passage

3-20j

Sec. 2

from passage

PA 17-2 of the June Sp. Sess., Sec. 682

Sec. 3

from passage

PA 17-2 of the June Sp. Sess., Sec. 685

Sec. 4

from passage

PA 17-2 of the June Sp. Sess., Sec. 687

Sec. 5

from passage

New section

Sec. 6

July 1, 2019

14-50b

Sec. 7

from passage

4-28e(c)

Sec. 8

from passage

10-507

Sec. 9

from passage

New section

Sec. 10

from passage

12-263p

Sec. 11

from passage

12-263q(a)(1)

Sec. 12

from passage

12-263q(c)

Sec. 13

from passage

12-263r(a)

Sec. 14

from passage

12-263i(b)(1)

Sec. 15

July 1, 2018, and applicable to sales occurring on or after July 1, 2018

12-408(1)

Sec. 16

July 1, 2018, and applicable to sales occurring on or after July 1, 2018

12-411(1)

Sec. 17

July 1, 2018, and applicable to sales occurring on or after July 1, 2018

12-412(120)

Sec. 18

from passage and applicable to income years commencing on or after January 1, 2019

12-214(b)

Sec. 19

from passage and applicable to income years commencing on or after January 1, 2018

12-218e(k)(1)

Sec. 20

from passage and applicable to taxable years commencing on or after January 1, 2018

12-701(a)(20)(B)

Sec. 21

July 1, 2018, and applicable to sales occurring on or after July 1, 2018

12-296

Sec. 22

July 1, 2018

12-316

Sec. 23

from passage

New section

Sec. 24

July 1, 2018, and applicable to sales occurring on or after July 1, 2018

12-330c(a)(2)

Sec. 25

July 1, 2018, and applicable to sales occurring on or after July 1, 2018

New section

Sec. 26

July 1, 2018, and applicable to conveyances occurring on or after July 1, 2018

12-494

Sec. 27

October 1, 2018

22a-243

Sec. 28

October 1, 2018

22a-244

Sec. 29

July 1, 2018, and applicable to sales occurring on or after July 1, 2018

12-458(a)(2)

Sec. 30

July 1, 2018, and applicable to sales occurring on or after July 1, 2018

New section

Sec. 31

July 1, 2018

New section

Sec. 32

from passage

New section

Sec. 33

from passage

12-217(a)(1)

Sec. 34

from passage

12-746(d)

Sec. 35

from passage

PA 17-2 of the June Sp. Sess., Sec. 683

Sec. 36

from passage

Repealer section

Sec. 37

January 1, 2018, and applicable to taxable years commencing on or after January 1, 2018

Repealer section

Sec. 38

from passage

Repealer section

Sec. 39

July 1, 2019

Repealer section

Sec. 40

from passage

Repealer section

Statement of Purpose:

To implement the Governor's budget recommendations.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]