Bill Text: CT SB00961 | 2015 | General Assembly | Comm Sub
Bill Title: An Act Concerning The Delivery And Targeting Of Economic Assistance To Small Businesses.
Spectrum: Committee Bill
Status: (Engrossed - Dead) 2015-05-22 - House Calendar Number 619 [SB00961 Detail]
Download: Connecticut-2015-SB00961-Comm_Sub.html
General Assembly |
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January Session, 2015 |
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AN ACT CONCERNING THE DELIVERY AND TARGETING OF ECONOMIC ASSISTANCE TO SMALL BUSINESSES.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. Section 32-7g of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2015):
(a) There is established within the Department of Economic and Community Development the Small Business Express program. Said program shall provide small businesses with various forms of financial assistance, using a streamlined application process to expedite the delivery of such assistance. The Commissioner of Economic and Community Development, at his or her discretion, may partner with the lenders in the Connecticut Credit Consortium, established pursuant to section 32-9yy, in order to fulfill the requirements of this section. A small business eligible for assistance through said program shall [, as of June 15, 2012,] (1) employ [, on at least fifty per cent of its working days during the preceding twelve months,] not more than one hundred employees, (2) have operations in Connecticut, [(3) have been registered to conduct business for not less than twelve months, and (4)] and (3) be in good standing with the payment of all state and local taxes and with all state agencies.
(b) The Small Business Express program shall consist of various components, including (1) a revolving loan fund, as described in subsection (d) of this section, to support small business growth, (2) a job creation incentive component, as described in subsection (e) of this section, to support hiring, and (3) a matching grant component, as described in subsection (f) of this section, to provide capital to small businesses that can match the state grant amount. Said program shall also include a loan fund and a CT FAST Funds program, established in collaboration with private sector lenders doing business in Connecticut, as described in subsection (g) of this section. The Commissioner of Economic and Community Development shall work with eligible small business applicants to provide a package of assistance using the financial assistance provided by the Small Business Express program and may refer small business applicants to the Subsidized Training and Employment program established pursuant to section 31-3pp and any other appropriate state program. Notwithstanding the provisions of section 32-5a regarding relocation limits, the department may require, as a condition of receiving financial assistance pursuant to this section, that a small business receiving such assistance shall not relocate, as defined in [said] section 32-5a, for five years after receiving such assistance or during the term of the loan, whichever is longer. All other conditions and penalties imposed pursuant to [said] section 32-5a shall continue to apply to such small business.
(c) The commissioner shall establish a streamlined application process for the Small Business Express program. The small business applicant may receive assistance pursuant to said program not later than thirty days after submitting a completed application to the department. Any small business meeting the eligibility criteria in subsection (a) of this section may apply to said program. The commissioner shall give priority for available funding to small businesses creating jobs and may give priority for available funding to (1) economic base industries, as defined in subsection (d) of section 32-222, including, but not limited to, those in the fields of precision manufacturing, business services, green and sustainable technology, bioscience and information technology, and (2) businesses attempting to export their products or services to foreign markets.
(d) (1) There is established as part of the Small Business Express program a revolving loan fund to provide loans to eligible small businesses. Such loans shall be used for acquisition or purchase of machinery and equipment, construction or leasehold improvements, relocation expenses, working capital or other business-related expenses, as authorized by the commissioner.
(2) Loans from the revolving loan fund may be in amounts from [ten] one thousand dollars to a maximum of one hundred thousand dollars, shall carry a maximum repayment rate of four per cent and shall be for a term of not more than ten years. The department shall review and approve loan terms, conditions and collateral requirements in a manner that prioritizes job growth and retention.
(3) Any eligible small business meeting the eligibility criteria in subsection (a) of this section may apply for assistance from the revolving loan fund, but the commissioner shall give priority to applicants that, as part of their business plan, are creating new jobs that will be maintained for not less than twelve consecutive months.
(e) (1) There is established as part of the Small Business Express program a job creation incentive component to provide loans for job creation to small businesses meeting the eligibility criteria in subsection (a) of this section, with the option of loan forgiveness based on the maintenance of an increased number of jobs for not less than twelve consecutive months. Such loans may be used for training, marketing, working capital or other expenses, as approved by the commissioner, that support job creation.
(2) Loans under the job creation incentive component may be in amounts from [ten] one thousand dollars to a maximum of three hundred thousand dollars, shall carry a maximum repayment rate of four per cent and shall be for a term of not more than ten years. Payments on such loans may be deferred, and all or part of such loan may be forgiven, based upon the commissioner's assessment of the small business's attainment of job creation goals. The department shall review and approve loan terms, conditions and collateral requirements in a manner that prioritizes job creation.
(f) (1) There is established as part of the Small Business Express program a matching grant component to provide grants for capital to small businesses meeting the eligibility criteria in subsection (a) of this section. Such small businesses shall match any state funds awarded under this program. Grant funds may be used for ongoing or new training, working capital, acquisition or purchase of machinery and equipment, construction or leasehold improvements, relocation within the state or other business-related expenses authorized by the commissioner.
(2) Matching grants provided under the matching grant component may be in amounts from [ten] one thousand dollars to a maximum of one hundred thousand dollars. The commissioner shall prioritize applicants for matching grants based upon the likelihood that such grants will assist applicants in maintaining job growth.
(3) The commissioner may waive the matching requirement for grants under this subsection for working capital to small businesses located within distressed municipalities, as defined in section 32-9p.
(g) (1) The commissioner shall allocate not less than ten per cent of available funding under the Small Business Express program to regional economic development agencies that will review applications for financial assistance pursuant to this section and award financial assistance packages pursuant to subsections (d), (e) and (f) of this section. The commissioner shall provide such regional economic development agencies with guidelines for the review of such applications and the award of financial assistance packages, which shall include a maximum ratio for administrative costs charged by such regional agencies to recipients of awards under this subsection.
(2) Not later than April first, annually, each regional economic development agency that awards a financial assistance package pursuant to this subsection shall report to the commissioner available data as described in subsection (j) of this section. The commissioner shall incorporate such data into the report described in said subsection.
(h) The commissioner, in collaboration with private sector lenders doing business in Connecticut, shall establish as part of the Small Business Express program:
(1) A loan fund to provide small businesses in the state with access to capital. Such capital shall be used for acquisition or purchase of machinery and equipment, construction or leasehold improvements, relocation expenses, working capital or other business-related expenses, as authorized by the commissioner. Such loan fund shall be administered by the Department of Economic and Community Development. The commissioner may allocate not more than ten per cent of available funding under the Small Business Express program to such loan fund; and
(2) A CT Financial Assistance for Start-Ups program, otherwise known as CT FAST Funds, to provide guarantees of not more than seventy per cent of the loan to such private sector lenders who provide financing to start-up businesses located in municipalities with a population greater than seventy thousand. Loans eligible for a guarantee under this subdivision (A) may be in amounts from ten thousand dollars to a maximum of fifty thousand dollars, (B) shall be for a term of not more than ten years, and (C) may be used for acquisition of machinery and equipment, construction or leasehold improvements, refinancing of existing debt, purchase of inventory, acquisition of real property and the remediation and redevelopment of Brownfields. The commissioner may provide a loan guarantee under this subdivision in addition to any other financial assistance awarded to the borrower pursuant to this section. The commissioner shall allocate five million dollars of available funding under the Small Business Express program to the CT FAST Funds program.
(i) The commissioner, in consultation with community leaders, shall identify populations underserved by the Small Business Express program in municipalities that have a population of more than seventy thousand. Notwithstanding subsection (c) of this section, the commissioner may give priority for available funding to businesses owned by populations identified pursuant to this subsection. The commissioner shall include in the report described in subsection (j) of this section a summary of such identification efforts and any assistance granted to such businesses.
[(g)] (j) Not later than June 30, 2012, and every six months thereafter, the commissioner shall provide a report, in accordance with the provisions of section 11-4a, to the joint standing committees of the General Assembly having cognizance of matters relating to finance, revenue and bonding, appropriations, commerce and labor. Such report shall include available data on (1) the number of small businesses that applied to the Small Business Express program, (2) the number of small businesses that received assistance under said program and the general categories of such businesses, (3) the amounts and types of assistance provided, (4) the total number of jobs on the date of application and the number proposed to be created or retained, and (5) the most recent employment figures of the small businesses receiving assistance. The contents of such report shall also be included in the department's annual report.
Sec. 2. Section 32-9n of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2015):
(a) There is established within the Department of Economic and Community Development an Office of Small Business Affairs. Such office shall aid and encourage small business enterprises, particularly those owned and operated by minorities and other socially or economically disadvantaged individuals in Connecticut. As used in this section, "minority" means: (1) Black Americans, including all persons having origins in any of the Black African racial groups not of Hispanic origin; (2) Hispanic Americans, including all persons of Mexican, Puerto Rican, Cuban, Central or South American, or other Spanish culture or origin, regardless of race; (3) all persons having origins in the Iberian Peninsula, including Portugal, regardless of race; (4) women; (5) Asian Pacific Americans and Pacific islanders; or (6) American Indians and persons having origins in any of the original peoples of North America and maintaining identifiable tribal affiliations through membership and participation or community identification.
(b) Said Office of Small Business Affairs shall: (1) Administer at least one regional office of the small business development center program within the Department of Economic and Community Development; (2) coordinate, with the director of the small business development center program, the flow of information within the technical and management assistance program within the Department of Economic and Community Development; (3) encourage Connecticut Innovations, Incorporated to grant loans to small businesses, particularly those owned and operated by minorities and other socially or economically disadvantaged individuals; (4) coordinate and serve as a liaison between all federal, state, regional and municipal agencies and programs affecting small business affairs; (5) administer any business management training program established under section 32-352 or section 32-355 as the Commissioner of Economic and Community Development may determine; (6) provide a single point of contact for small businesses seeking financial and technical assistance from the state and quasi-public agencies; (7) coordinate all state funded revolving loan funds used to assist small businesses; (8) provide procedural information to small businesses seeking to bid on contracts offered by state agencies and municipalities; and [(8)] (9) establish, in cooperation with the Commissioner of Economic and Community Development, and within available appropriations, an informational web page with a list and links to all small business resources available and post them in a conspicuous place on the department's web site. The office shall update this information on its web site on at least a quarterly basis.
(c) On or after February 1, 2011, and annually thereafter, the Office of Small Business Affairs shall compile (1) a description of its efforts pursuant to subsection (b) of this section, including, but not limited to, data on the type and number of businesses seeking assistance from said office, and (2) a summary of [all small business activities and] programs available to small businesses, and incorporate such summary into the report required pursuant to section 32-1m.
Sec. 3. (NEW) (Effective October 1, 2015) Prior to the adoption of any proposed regulation pertaining to activities for which the federal government has adopted standards or procedures, and whenever such proposed regulation deviates from such standards or procedures, an agency, as defined in section 4-166 of the general statutes, shall prepare a federal deviation analysis that shall: (1) Identify each provision of such proposed regulation that deviates from such standards or procedures, and (2) explain, in plain language, the reason for each such deviation. Such federal deviation analysis shall be: (A) Included in the regulation-making record required under section 4-168b of the general statutes, as amended by this act, (B) publicly available at the time of the notice concerning the regulation required under section 4-168 of the general statutes, as amended by this act, and (C) included in the submission of the regulation to the standing legislative regulation review committee pursuant to subsection (b) of section 4-170 of the general statutes, as amended by this act.
Sec. 4. Subsection (a) of section 4-168 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2015):
(a) Except as provided in subsections (g) and (h) of this section, an agency, not less than thirty days prior to adopting a proposed regulation, shall (1) post a notice of its intended action on the eRegulations System, which notice shall include (A) a specified public comment period of not less than thirty days, (B) a description sufficiently detailed so as to apprise persons likely to be affected of the issues and subjects involved in the proposed regulation, (C) a statement of the purposes for which the regulation is proposed, (D) a reference to the statutory authority for the proposed regulation, (E) when, where and how interested persons may obtain a copy of the small business impact and regulatory flexibility analysis required pursuant to section 4-168a and a copy of the federal deviation analysis required pursuant to section 3 of this act, if applicable, and (F) when, where and how interested persons may present their views on the proposed regulation; (2) post a copy of the proposed regulation on the eRegulations System; (3) give notice electronically to each joint standing committee of the General Assembly having cognizance of the subject matter of the proposed regulation; (4) give notice electronically or provide a paper copy notice, if requested, to all persons who have made requests to the agency for advance notice of its regulation-making proceedings; (5) provide a paper copy or electronic version of the proposed regulation to persons requesting it; and (6) prepare a fiscal note, including an estimate of the cost or of the revenue impact (A) on the state or any municipality of the state, and (B) on small businesses in the state, including an estimate of the number of small businesses subject to the proposed regulation and the projected costs, including but not limited to, reporting, recordkeeping and administrative, associated with compliance with the proposed regulation and, if applicable, the regulatory flexibility analysis prepared under section 4-168a. The governing body of any municipality, if requested, shall provide the agency, within twenty working days, with any information that may be necessary for analysis in preparation of such fiscal note.
Sec. 5. Subsection (b) of section 4-168b of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2015):
(b) The regulation-making record shall contain at least: (1) The agency's notice of intent to adopt regulations; (2) any written analysis prepared for the proceeding upon which the regulation is based, including the regulatory flexibility analysis required pursuant to section 4-168a and the federal deviation analysis required pursuant to section 3 of this act, if applicable; (3) all comments submitted on the proposed regulation; (4) the official transcript, if any, of proceedings upon which the regulation is based or, if not transcribed, any audio recording or stenographic record of such proceedings, and any memoranda prepared by any member or employee of the agency summarizing the contents of the proceedings; (5) all official documents relating to the regulation, including the regulation submitted to the office of the Secretary of the State in accordance with section 4-172, a statement of the principal considerations in opposition to the agency's action, and the agency's reasons for rejecting such considerations, as required pursuant to section 4-168, as amended by this act, and the fiscal note prepared pursuant to subsection (a) of section 4-168, as amended by this act, and section 4-170, as amended by this act; (6) any petition for the regulation filed pursuant to section 4-174; and (7) all comments or communications between the agency and the legislative regulation review committee. No audio recording of a hearing held pursuant to section 4-168, as amended by this act, shall be posted on the eRegulations System unless the Secretary of the State confirms that such posting will not constitute a violation of any state or federal law regarding accessibility for persons with disabilities. Any audio recording of a hearing held pursuant to section 4-168, as amended by this act, that is not posted on the eRegulations System shall be maintained by the agency and made available to the public upon request. If an agency determines that any part of the regulation-making record is impractical to display or is inappropriate for public display on the eRegulations System, the agency shall describe the part omitted in a statement posted on the eRegulations System and shall maintain a copy of the omitted material readily available for public inspection at the principal office of the agency.
Sec. 6. Subsection (b) of section 4-170 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2015):
(b) (1) No adoption, amendment or repeal of any regulation, except a regulation issued pursuant to subsection (g) of section 4-168, shall be effective until (A) an electronic copy of (i) the proposed regulation approved by the Attorney General, as provided in section 4-169, [and an electronic copy of] (ii) the regulatory flexibility analysis, as provided in section 4-168a, and (iii) the federal deviation analysis, as provided in section 3 of this act, if applicable, are submitted to the standing legislative regulation review committee in a manner designated by the committee, by the agency proposing the regulation, (B) the regulation is approved by the committee, at a regular meeting or a special meeting called for the purpose, and (C) a certified electronic copy of the regulation is submitted to the office of the Secretary of the State by the agency, as provided in section 4-172, and the regulation is posted on the eRegulations System by the Secretary. (2) The date of submission for purposes of subsection (c) of this section shall be the first Tuesday of each month. Any regulation received by the committee on or before the first Tuesday of a month shall be deemed to have been submitted on the first Tuesday of that month. Any regulation submitted after the first Tuesday of a month shall be deemed to be submitted on the first Tuesday of the next succeeding month. (3) The form of proposed regulations which are submitted to the committee shall be as follows: New language added to an existing regulation shall be underlined; language to be deleted shall be enclosed in brackets and a new regulation or new section of a regulation shall be preceded by the word "(NEW)" in capital letters. Each proposed regulation shall have a statement of its purpose following the final section of the regulation. (4) The committee may permit any proposed regulation, including, but not limited to, a proposed regulation which by reference incorporates in whole or in part, any other code, rule, regulation, standard or specification, to be submitted in summary form together with a statement of purpose for the proposed regulation. On and after October 1, 1994, if the committee finds that a federal statute requires, as a condition of the state exercising regulatory authority, that a Connecticut regulation at all times must be identical to a federal statute or regulation, then the committee may approve a Connecticut regulation that by reference specifically incorporates future amendments to such federal statute or regulation provided the agency that proposed the Connecticut regulation shall submit for approval amendments to such Connecticut regulations to the committee not later than thirty days after the effective date of such amendment, and provided further the committee may hold a public hearing on such Connecticut amendments. (5) The agency shall also provide the committee with a copy of the fiscal note prepared pursuant to subsection (a) of section 4-168, as amended by this act. At the time of submission to the committee, the agency shall submit an electronic copy of the proposed regulation and the fiscal note to (A) the Office of Fiscal Analysis which, not later than seven days after receipt, shall submit an analysis of the fiscal note to the committee; and (B) each joint standing committee of the General Assembly having cognizance of the subject matter of the proposed regulation. No regulation shall be found invalid due to the failure of an agency to submit an electronic copy of the proposed regulation and the fiscal note to each committee of cognizance, provided such regulation and fiscal note have been electronically submitted to one such committee.
Sec. 7. Section 32-9t of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2015, and applicable to income years commencing on or after January 1, 2015):
(a) As used in this section:
(1) "Commissioner" means the Commissioner of Economic and Community Development.
(2) "Eligible industrial site investment project" means a project located within this state for the development or redevelopment of real property: (A) (i) That has been subject to a "spill", as defined in section 22a-452c, (ii) is an "establishment", as defined in subdivision (3) of section 22a-134, or (iii) is a "facility", as defined in 42 USC 9601(9); (B) that, if remediated, renovated or demolished in accordance with applicable law and regulations and the standards of remediation of the Department of Energy and Environmental Protection and used for business purposes, will add significant new economic activity and employment in the municipality in which the investment is to be made, and will generate additional tax revenues to the state; (C) for which the use of the urban and industrial site reinvestment program will be necessary to attract private investment to the project; (D) the business use of which would be economically viable and would generate direct and indirect economic benefits to the state that exceed the amount of the investment during the period for which the tax credits granted pursuant to public act 00-170 are granted; and (E) that is, in the judgment of the commissioner, consistent with the strategic economic development priorities of the state and the municipality.
(3) "Eligible urban reinvestment project" means a project: (A) That would add significant new economic activity in the eligible municipality in which the project is located, and will generate significant additional tax revenues to the state or the municipality; (B) for which the use of the urban and industrial site reinvestment program will be necessary to attract private investment to an eligible municipality; (C) that is economically viable; (D) for which the direct and indirect economic benefits to the state outweigh the costs of the project; and (E) that is, in the judgment of the commissioner, consistent with the strategic economic development priorities of the state and the municipality.
(4) "Related person" means: (A) A corporation, limited liability company, partnership, association or trust controlled by the taxpayer; (B) an individual, corporation, limited liability company, partnership, association or trust that is in control of the taxpayer; (C) a corporation, limited liability company, partnership, association or trust controlled by an individual, corporation, limited liability company, partnership, association or trust that is in control of the taxpayer; or (D) a member of the same controlled group as the taxpayer. For purposes of this section, "control", with respect to a corporation, means ownership, directly or indirectly, of stock possessing fifty per cent or more of the total combined voting power of all classes of the stock of such corporation entitled to vote. "Control", with respect to a trust, means ownership, directly or indirectly, of fifty per cent or more of the beneficial interest in the principal or income of such trust. The ownership of stock in a corporation, of a capital or profits interest in a partnership or association or of a beneficial interest in a trust shall be determined in accordance with the rules for constructive ownership of stock provided in Section 267(c) of the Internal Revenue Code, other than paragraph (3) of said section.
(5) "Investment" means all amounts invested in an eligible project by or on behalf of a taxpayer, whether directly, through a fund, or through a community development entity or a contractually bound community development entity including, but not limited to, (A) equity investments made by the taxpayer, and (B) loans.
(6) "Income year" means with respect to entities subject to taxation under chapters 207 to 212a, the income year as determined under each of said chapters, as the case may be.
(7) "Taxpayer" means any person, as defined in section 12-1, whether or not subject to any taxes levied by this state.
(8) "Fund manager" means a fund manager registered in accordance with subsection (d) of this section.
(9) "New job" means a job that did not exist in the business of a subject business in this state prior to the subject business' application to the commissioner for an eligibility certificate under this section for a new facility and that is filled by a new employee, but does not mean a job created when an employee is shifted from an existing location of the subject business in this state to a new facility.
(10) "New employee" means a person hired by a subject business to fill a position for a new job or a person shifted from an existing location of the subject business outside this state to a new facility in this state, provided (A) in no case shall the total number of new employees allowed for purposes of this credit exceed the total increase in the taxpayer's employment in this state, which increase shall be the difference between (i) the number of employees employed by the subject business in this state at the time of application for an eligibility certificate to the commissioner plus the number of new employees who would be eligible for inclusion under the credit allowed under this section without regard to this calculation, and (ii) the highest number of employees employed by the subject business in this state in the year preceding the subject business' application for an eligibility certificate to the commissioner, and (B) a person shall be deemed to be a "new employee" only if such person's duties in connection with the operation of the facility are on a regular, full-time, or equivalent thereof, and permanent basis.
(11) "New facility" means a facility which (A) is acquired by, leased to, or constructed by, a subject business on or after the date of the subject business' application to the commissioner for an eligibility certificate under this section, unless, upon application of the subject business and upon good and sufficient cause shown, the commissioner waives the requirement that such activity take place after the application, and (B) was not in service or use during the one-year period immediately prior to the date of the subject business' application to the commissioner for an eligibility certificate under this section, unless upon application of the subject business and upon good and sufficient cause shown, the commissioner consents to waiving the one-year period.
(12) "Eligible municipality" means (A) a municipality with an area designated as an enterprise zone pursuant to section 32-70, (B) a distressed municipality, as defined in subsection (b) of section 32-9p, (C) a municipality that has a population in excess of one hundred thousand, or (D) any municipality that the commissioner determines is connected with the relocation of an out-of-state operation or the expansion of an existing facility that will result in a capital investment by a company of not less than fifty million dollars, except that, for an eligible CT EDGE project, "eligible municipality" means a municipality with an area designated as an enterprise zone pursuant to section 32-70.
(13) "Eligible project" means an eligible urban reinvestment project, an eligible CT EDGE project or an eligible industrial site investment project, or [both] any combination thereof.
(14) "Approved investment" means an investment approved by the commissioner under subsection (g) of this section.
(15) "Recapture amount" means the amount by which the total of tax credits claimed with respect to any approved investment as of the date of calculation exceeds the sum of all state revenue actually generated through such date by the eligible project in which such approved investment was made.
(16) "Pro rata share" means the percentage the amount of the approved investment by an individual investor in an eligible project bears to the total amount of the approved investment in such project, or in the case of a taxpayer to whom credits are transferred under this section, the percentage the amount of credits with respect to an approved investment transferred bears to the total credits with respect to such approved investment.
(17) "Community development entity" means any corporation, limited partnership or limited liability company qualified to do business in this state and which (A) is organized for the purpose of providing investment capital or financing for eligible projects under this section, (B) maintains accountability to residents of more than one eligible municipality through representation on the governing board of the entity, (C) is organized for the purpose of seeking certification and an allocation of new markets tax credits as provided in Section 45D of the Internal Revenue Code, and (D) is registered in accordance with subsection (d) of this section. No community development entity shall be eligible for any tax credits under this section unless it is certified under said Section 45D on the date any approved investment is made. A community development entity shall not be deemed a "fund" for purposes of this section.
(18) "Project" means the acquisition, leasing, demolition, remediation, construction, renovation, expansion or other development or redevelopment of real property and improvements within this state, including furniture, fixtures, equipment and other personal property which is reasonably necessary in connection therewith, and associated interest and other financing costs and charges, relocation and start-up costs, and architectural, engineering, legal and other professional services, plans, specifications, surveys, permits, studies and evaluations necessary or incident to the development, financing, completion and placing in operation of such a project. In the case of a contractually bound community development entity, "project" shall not include any activities, costs or services not included in the terms of the allocation agreement with the community development financial institutions fund under Section 45D of the Internal Revenue Code.
(19) "Contractually bound community development entity" means a community development entity that (A) has entered into an allocation agreement with the community development financial institutions fund pursuant to Section 45D of the Internal Revenue Code, and (B) whose service area in such allocation agreement includes the state of Connecticut.
(20) "Internal Revenue Code" means the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time.
(21) "Eligible CT Economic Development for a Growing Economy project" or "eligible CT EDGE project" means a project: (A) That would add significant new economic activity in the eligible municipality in which the project is located and will generate significant additional tax revenues to the state or the municipality; (B) for which the use of the urban and industrial site reinvestment program will be necessary to attract private investment to an eligible municipality; (C) that is economically viable; (D) for which the direct and indirect economic benefits to the state outweigh the costs of the project; (E) that is, in the judgment of the commissioner, consistent with the strategic economic development priorities of the state and the municipality; and (F) that involves the redevelopment of a vacant building with a square footage greater than (i) ten thousand square feet to be used for affordable housing, as defined in section 8-39a, (ii) fifty thousand square feet to be used for commercial or industrial space, or (iii) thirty-five thousand square feet to be for mixed use.
(b) There is established an urban and industrial site reinvestment program under which taxpayers who make investments in eligible urban reinvestment projects, eligible CT EDGE projects or eligible industrial site investment projects may be allowed a credit against the tax imposed under chapters 207 to 212a, inclusive, or section 38a-743, or a combination of said taxes, in an amount equal to the percentage of their approved investment determined in accordance with subsection (i) of this section.
(c) No project shall be deemed an eligible project unless such project shall, in the judgment of the commissioner, be of sufficient size, by itself or in conjunction with related new investments, to generate a substantial return to the state economy.
(d) (1) The commissioner may register managers of funds and community development entities created for the purpose of investing in eligible urban reinvestment projects, eligible CT EDGE projects and eligible industrial site investment projects. Any manager, community development entity or contractually bound community development entity registered under this subsection shall have its primary place of business in this state. Each applicant shall submit an application under oath to the commissioner to be registered and shall furnish evidence satisfactory to the commissioner of its financial responsibility, integrity, professional competence and experience in managing investment funds. Failure to maintain adequate fiduciary standards with respect to investments made under this section shall constitute cause for the commissioner to revoke, after hearing, any registration granted under this section or section 38a-88a. The fund manager, community development entity or contractually bound community development entity shall make a report on or before the first day of March in each year, under oath, to the Commissioner of Economic and Community Development and the Commissioner of Revenue Services specifying the name, address and Social Security number or employer identification number of each investor, the year during which each investment was made by each investor, the amount of each investment, a description of the fund's investment objectives and relative performance, or the entity's projects, as the case may be, and a description, including amounts, of all fees received by such manager or entity in relation to each such fund.
(2) Any manager of funds registered on or before July 1, 2000, pursuant to section 38a-88a shall be deemed registered as a fund manager for all purposes under the provisions of this section upon submission, in writing, to the commissioner of such manager's intention to act as a manager of funds under this section. The commissioner may request from any such manager such information as the commissioner may require relating to such manager's financial responsibility, integrity, professional competence and experience in managing investment funds.
(e) Any taxpayer or fund manager, community development entity or contractually bound community development entity wishing to make an investment under the provisions of this section shall apply to the commissioner in accordance with the provisions of this section. The application shall contain sufficient information to establish that the project in which the proposed investment will be made is an eligible industrial site investment project, an eligible CT EDGE project or an urban reinvestment project, as appropriate, and information concerning the type of investment proposed to be made, the location of the project, the number of jobs to be created or retained, physical infrastructure that might be created or preserved, feasibility studies or business plans for the project, projected state and local revenue that might derive as a result of the project and other information necessary to demonstrate the financial viability of the project and to demonstrate that the investment will provide net benefits to the economy of, and employment for citizens of, the municipality and the state, and in the case of an eligible industrial site investment project, how such project will meet the standards of remediation of the Department of Energy and Environmental Protection. The commissioner shall impose a fee for such application as the commissioner deems appropriate.
(f) (1) The commissioner shall determine whether the project in which the proposed investment is to be made is an eligible urban reinvestment project, an eligible CT EDGE project or an eligible industrial site investment project, whether the project is economically viable only with use of the urban and industrial site reinvestment program, the effects of the project on the municipality where the investment will be made, and whether the project would provide a net benefit to economic development and employment opportunities in the state and whether the project will conform to the state plan of conservation and development. The commissioner may require the applicant to submit such additional information as may be necessary to evaluate the application.
(2) The commissioner shall prepare a revenue impact assessment that estimates the state and local revenue that would be generated as a result of the project. The commissioner shall prepare an economic feasibility study relative to such project. The commissioner may retain any such persons as the commissioner deems appropriate to conduct such revenue impact assessment or economic feasibility study.
(g) (1) The commissioner, upon consideration of the application, the revenue impact assessment and any additional information that the commissioner requires concerning a proposed investment, may approve an investment if the commissioner concludes that the project in which such investment is to be made is an eligible urban reinvestment project, an eligible CT EDGE project or an eligible industrial site investment project. If the commissioner rejects an application, the commissioner shall specifically identify the defects in the application and specifically explain the reasons for the rejection. The commissioner shall render a decision on an application not later than ninety days from its receipt. The amount of the investment so approved shall not exceed the greater of: (A) The amount of state revenue that will be generated according to the revenue impact assessment prepared under this subsection; or (B) the total of state revenue and local revenue generated according to such assessment in the case of a manufacturing business with North American Industrial Classification codes of 339999, 311211 through 312140, 324191 and 325412 that is relocating to a site in Connecticut from out-of-state, provided the relocation will result in new development of at least seven hundred twenty-five thousand square feet in a state-sponsored industrial park.
(2) The approval of an investment by the commissioner may be combined with the exercise of any of the commissioner's other powers, including, but not limited to, the provision of other forms of financial assistance.
(3) The commissioner shall require the applicant to reimburse the commissioner for all or any part of the cost of any revenue impact assessment, economic feasibility study or other activities performed in the exercise of due diligence pursuant to subsection (f) of this section.
(4) There is established an account to be known as the "Connecticut economic impact and analysis account" which shall be a separate, nonlapsing account within the General Fund. The account shall contain any moneys required by law to be deposited in the account and shall be held separate and apart from other moneys, funds and accounts. There shall be deposited in the account any proceeds realized by the state from activities pursuant to this section. Investment earnings credited to the account shall become part of the assets of the account. Any balance remaining in the account at the end of any fiscal year shall be carried forward in the account for the next fiscal year. Amounts in the account may be used by the Department of Economic and Community Development to fund the cost of any activities of the department pursuant to this section, including administrative costs related to such activities.
(h) Upon approving an investment, the commissioner shall issue a certificate of eligibility certifying that the applicant has complied with the provisions of this section.
(i) (1) [There] For eligible urban reinvestment projects and eligible industrial site investment projects, there shall be allowed as a credit against the tax imposed under chapters 207 to 212a, inclusive, or section 38a-743, or a combination of said taxes, an amount equal to the following percentage of approved investments made by or on behalf of a taxpayer with respect to the following income years of the taxpayer: (A) With respect to the income year in which the investment in the eligible project was made and the two next succeeding income years, zero per cent; (B) with respect to the third full income year succeeding the year in which the investment in the eligible project was made and the three next succeeding income years, ten per cent; (C) with respect to the seventh full income year succeeding the year in which the investment in the eligible project was made and the next two succeeding years, twenty per cent. [The sum of all tax credits granted pursuant to the provisions of this section shall not exceed one hundred million dollars with respect to a single eligible urban reinvestment project or a single eligible industrial site investment project approved by the commissioner. The sum of all tax credits granted pursuant to the provisions of this section shall not exceed eight hundred million dollars.]
(2) For eligible CT EDGE projects, there shall be allowed as a credit against the tax imposed under chapters 207 to 212a, inclusive, or section 38a-743, or a combination of said taxes, an amount equal to the following percentage of approved investments made by or on behalf of a taxpayer with respect to the following income years of the taxpayer:
(A) For projects involving the redevelopment of a vacant building to be used for affordable housing, (i) with respect to the income year in which the investment in the eligible project was made and the three next succeeding income years, five per cent; (ii) with respect to the fourth full income year succeeding the year in which the investment in the eligible project was made, four per cent; and (iii) with respect to the fifth full income year succeeding the year in which the investment in the eligible project was made and the next succeeding year, three per cent;
(B) For projects involving the redevelopment of a vacant building to be used for commercial and industrial space, with respect to the income year in which the investment in the eligible project was made and the four next succeeding income years, five per cent; and
(C) For projects involving the redevelopment of a vacant building to be for mixed use, (i) with respect to the income year in which the investment in the eligible project was made and the five next succeeding income years, five per cent; and (ii) with respect to the sixth full income year succeeding the year in which the investment in the eligible project was made, four per cent.
(3) The sum of all tax credits granted pursuant to the provisions of this section shall not exceed one hundred million dollars with respect to a single eligible urban reinvestment project, a single eligible CT EDGE project or a single eligible industrial site investment project approved by the commissioner. The sum of all tax credits granted pursuant to the provisions of this section shall not exceed eight hundred million dollars.
[(2)] (4) Notwithstanding the provisions of [subdivision (1)] subdivisions (1) to (3), inclusive, of this subsection, any applicant may, at the time of application, apply to the commissioner for a credit that exceeds the limitations established by this subsection. The commissioner shall evaluate the benefits of such application and make recommendations to the General Assembly relating to changes in the general statutes which would be necessary to effect such application if the commissioner determines that the proposal would be of economic benefit to the state.
(j) The credits allowed by this section may be claimed by a taxpayer who has made an investment (1) directly only if such investment has a total asset value, either alone or in conjunction with other taxpayer investments in an eligible project, of not less than five million dollars or, in the case of an investment in an eligible project for the preservation of an historic facility and redevelopment of the facility for mixed uses that includes at least four housing units, a total asset value of not less than two million dollars; (2) through a fund managed by a fund manager registered under this section only if such fund: (A) Has a total asset value of not less than sixty million dollars for the income year for which the initial credit is taken; and (B) has not less than three investors who are not related persons with respect to each other or to any person in which any investment is made other than through the fund at the date the investment is made; or (3) through a community development entity or a contractually bound community development entity.
(k) The commissioner shall, upon request, provide a copy of the eligibility certificate issued under subsection (h) of this section to the Commissioner of Revenue Services.
(l) The tax credit allowed by this section, when made through a fund, shall only be available for investments in funds that are not open to additional investments or investors beyond the amount subscribed at the formation of the fund.
(m) (1) The Commissioner of Revenue Services may treat one or more corporations that are properly included in a combined corporation business tax return under section 12-223a as one taxpayer in determining whether the appropriate requirements under this section are met. Where corporations are treated as one taxpayer for purposes of this subsection, then the credit shall be allowed only against the amount of the combined tax for all corporations properly included in a combined return that, under the provisions of subdivision (2) of this subsection, is attributable to the corporations treated as one taxpayer.
(2) The amount of the combined tax for all corporations properly included in a combined corporation business tax return that is attributable to the corporations that are treated as one taxpayer under the provisions of this subsection shall be in the same ratio to such combined tax that the net income apportioned to this state of each corporation treated as one taxpayer bears to the net income apportioned to this state, in the aggregate, of all corporations included in such combined return. Solely for the purposes of computing such ratio, any net loss apportioned to this state by a corporation treated as one taxpayer or by a corporation included in such combined return shall be disregarded.
(n) Any taxpayer allowed a credit under this section may assign such credit to another taxpayer or taxpayers, provided such other taxpayer or taxpayers may claim such credit only with respect to a taxable year for which the assigning taxpayer would have been eligible to claim such credit and such other taxpayer or taxpayers may not further assign such credit. The taxpayer or taxpayers allowed such credit, the fund manager, the community development entity or contractually bound community development entity shall file with the Commissioner of Revenue Services information requested by the commissioner regarding such assignments, including, but not limited to, the current holders of credits as of the end of the preceding calendar year.
(o) No taxpayer shall be eligible for a credit under (1) this section, and (2) section 12-217e or 38a-88a, for the same investment. No two taxpayers shall be eligible for any tax credit with respect to the same investment or the same project costs.
(p) Any credit not used in the income year for which it was allowed may be carried forward for the five immediately succeeding income years until the full credit has been allowed.
(q) (1) Any tax credits approved under this section that would constitute in excess of twenty million dollars in total for a single investment shall be submitted by the Commissioner of Economic and Community Development to the joint standing committee of the General Assembly having cognizance of matters relating to finance, revenue and bonding prior to the issuance of a certificate of eligibility for such investment. Said committee shall have thirty days from the date such project is submitted to convene a meeting to recommend approval or disapproval of such investment. If such submittal is withdrawn, altered, amended or otherwise changed, and resubmitted, said committee shall have thirty days from the date of such resubmittal to convene a meeting to recommend approval or disapproval of such investment. If said committee does not act on a submittal or resubmittal, as the case may be, within that time, the investment shall be deemed to be approved by said committee.
(2) While the General Assembly is in session, the House of Representatives or the Senate, or both, may meet not later than thirty days following the date said committee makes a recommendation pursuant to subdivision (1) of this subsection. If such submission is not disapproved by the House of Representatives or the Senate, or both, within such time, the commissioner may issue such certificate.
(3) While the General Assembly is not in regular session, the House of Representatives or the Senate, or both, may meet not later than thirty days following the date said committee makes a recommendation pursuant to subdivision (1) of this subsection. If such submission is not disapproved by the House of Representatives, the Senate, or both, within such time, the commissioner may issue such certificate.
(r) Not later than July first in each year that credits allowed by this section are claimed by a taxpayer with respect to an approved investment, the commissioner may retain such persons as said commissioner may deem appropriate to conduct a study to estimate the state revenue that is being and will be generated by the eligible project in which such investment is made. Such economic impact study shall determine whether the state revenue actually generated by such eligible project is equal to the estimate of state revenue made at the time the investment in such eligible project was approved. If the sum of all state revenue actually generated by such eligible project is less than the amount of the total sum of tax credits claimed with respect to the approved investment in such project on the date of such analysis, the commissioner may determine from the person retained pursuant to this subsection the applicable recapture amount and may revoke the certificate of eligibility issued under subsection (h) of this section. The commissioner may require the taxpayer, the fund manager, community development entity or contractually bound community development entity that made such approved investment to reimburse the commissioner for all or any part of the cost of any economic impact study performed under this subsection.
(s) (1) Any taxpayer which has claimed credits allowed by this section related to an investment concerning which the commissioner has revoked the certificate of eligibility issued under subsection (h) of this section, shall be required to recapture such taxpayer's pro rata share of the recapture amount as determined under the provisions of subdivision (2) of this subsection and no subsequent credit shall be allowed unless such certificate of eligibility is reinstated under the provisions of subdivision (3) of this subsection.
(2) If the taxpayer is required under the provisions of subdivision (1) of this subsection to recapture its pro rata share of the recapture amount during (A) the first year such credit was claimed, then ninety per cent of such share shall be recaptured on the tax return required to be filed for such year, (B) the second of such years, then sixty-five per cent of such share shall be recaptured on the tax return required to be filed for such year, (C) the third of such years, then fifty per cent of such share shall be recaptured on the tax return required to be filed for such year, (D) the fourth of such years, then thirty per cent of such share shall be recaptured on the tax return required to be filed for such year, (E) the fifth of such years, then twenty per cent of such share shall be recaptured on the tax return required to be filed for such year, and (F) the sixth or subsequent of such years, then ten per cent of such share shall be recaptured on the tax return required to be filed for such year. The Commissioner of Revenue Services may recapture such share from the taxpayer who has claimed such credits. If the commissioner is unable to recapture all or part of such share from such taxpayer, the commissioner may seek to recapture such share from any taxpayer who has assigned credits in an amount at least equal to such share to another taxpayer. If the commissioner is unable to recapture all or part of such share from any such taxpayer, the commissioner may recapture such share from any fund through which the investment was made.
(3) If the commissioner has revoked the certificate of eligibility issued under subsection (h) of this section, such certificate of eligibility shall be reinstated by the commissioner if, upon a request made by the taxpayer, fund manager or community development entity who made such approved investment, an economic impact study conducted pursuant to subsection (r) of this section shall determine that the sum of all state revenue actually generated by the project in which such investment was made is greater than the amount of the total sum of tax credits claimed on the date of such analysis, provided no such request shall be made pursuant to this subsection during the calendar year in which such certificate was revoked. For the purpose of determining whether such certificate shall be reinstated, the commissioner shall, upon receipt of a request made under this subsection, obtain one such economic impact study per calendar year and may obtain additional such economic impact studies as the commissioner deems appropriate.
(t) Notwithstanding subsections (r) and (s) of this section, for a contractually bound community development entity, credit recapture for credits allowed by this section shall be governed by the terms of its allocation agreement with the community development financial institutions fund or, where such agreement is silent, by Section 45D of the Internal Revenue Code and the regulations promulgated by the United States Treasury pursuant to said section.
This act shall take effect as follows and shall amend the following sections: | ||
Section 1 |
July 1, 2015 |
32-7g |
Sec. 2 |
October 1, 2015 |
32-9n |
Sec. 3 |
October 1, 2015 |
New section |
Sec. 4 |
October 1, 2015 |
4-168(a) |
Sec. 5 |
October 1, 2015 |
4-168b(b) |
Sec. 6 |
October 1, 2015 |
4-170(b) |
Sec. 7 |
July 1, 2015, and applicable to income years commencing on or after January 1, 2015 |
32-9t |
CE |
Joint Favorable Subst. |
|
GAE |
Joint Favorable |
|
FIN |
Joint Favorable |