Bill Text: CT HB05426 | 2012 | General Assembly | Introduced

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Bill Title: An Act Concerning Reports On Business Tax Credit And Abatement Programs.

Spectrum: Committee Bill

Status: (Introduced - Dead) 2012-03-07 - Public Hearing 03/12 [HB05426 Detail]

Download: Connecticut-2012-HB05426-Introduced.html

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General Assembly		Raised Bill No. 5426
February Session, 2012		LCO No. 1917
		*01917_______FIN*
Referred to Committee on Finance, Revenue and Bonding
Introduced by:
(FIN)

AN ACT CONCERNING REPORTS ON BUSINESS TAX CREDIT AND ABATEMENT PROGRAMS.

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

Section 1. Section 32-1r of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2012):

(a) Notwithstanding the provisions of subsection (b) of section 32-1m, on or before January 1, 2011, and every three years thereafter, the Commissioner of Economic and Community Development, in consultation with the Commissioner of Revenue Services, shall prepare a report with regard to [any] each tax credit or abatement program enacted for the purpose of recruitment or retention of businesses. The report shall include, but need not be limited to:

(1) A baseline assessment of the tax credit and abatement programs enacted to encourage business growth in the state, including the number of aggregate jobs associated with taxpayers eligible for such tax credits or abatements and the aggregate annual revenue that such taxpayers generate for the state through the direct taxes applied to them and through their support of the state's economy through employment and other activities;

(2) A listing, by program, of the amount of tax credits and abatements approved by the state during the preceding calendar year;

(3) A summary and evaluation of all tax credit programs administered by the Department of Economic and Community Development. Such summary and evaluation shall include, but need not be limited to, for each tax credit program: (A) An assessment of the intended statutory and programmatic goals of the tax credit, and whether such goals meet the state's economic strategic plan developed pursuant to section 32-1o; (B) the number of taxpayers granted tax credits under the program during the previous twelve-month period; (C) the value of the tax credits granted, listed by the North American Industrial Classification System code associated with the taxpayers receiving such credits; (D) the value of the tax credits actually claimed and the value of the tax credits carried forward, listed by the North American Industrial Classification System code associated with the taxpayers claiming or carrying forward the credits; (E) an assessment and five-year projection of the potential impact on the state's revenue stream from carry forwards allowed under such tax credit program; (F) an analysis of the economic impact of the tax credit program and whether the statutory and programmatic goals are being met, with obstacles to such goals identified, if possible; (G) the type and value of tax credits assigned and a summary by North American Industrial Classification System codes of taxpayers to which such credits are assigned; (H) a cost-benefit analysis of the revenue foregone by allowing a tax credit, as compared to the economic impact of such credit; (I) the cost to the state to administer the tax credit program, and a comparison between such cost and the net revenue generated to the state by each such program; (J) the average and aggregate administrative and compliance cost, to taxpayers, to comply with the requirements of the tax credit program; (K) information as to the location of the taxpayers receiving credits, and whether such taxpayers are in distressed communities or targeted investment communities; and [(K)] (L) a recommendation as to whether the tax credit program should be continued, modified or repealed, the basis for such recommendation and the expected impact of such recommendation on the state's economy;

(4) A comparison of the tax credit and abatement programs offered in this state to those offered in other states, and an assessment of the impact of such in-state and out-of-state programs on the competitiveness of businesses located in this state;

[(4)] (5) (A) An assessment of the fairness, performance, burden, tax incidence and economic impact of the state's corporation business tax and taxes on domestic and foreign insurance companies pursuant to chapter 207; (B) the cost to the state to administer the state's corporation business tax and taxes on domestic and foreign insurance companies pursuant to chapter 207, and a comparison between such costs and the net revenue generated to the state by such taxes, and (C) the average and aggregate administrative and compliance costs to taxpayers associated with such taxes; and

[(5)] (6) The methodology and assumptions used in carrying out the assessments, projections and analyses required pursuant to subdivisions (1), (3), [and] (4) and (5) of this subsection.

(b) The Commissioner of Economic and Community Development shall submit the reports required pursuant to this section, in accordance with section 11-4a, to the Governor, the Secretary of the Office of Policy and Management, and to the joint standing committees of the General Assembly having cognizance of matters relating to appropriations, finance and commerce.

Sec. 2. (Effective July 1, 2012) (a) The Commissioner of Economic and Community Development shall convene a working group to develop a competitiveness matrix that shall be used by the Department of Economic and Community Development for the assessment of the state's tax credit and abatement programs required pursuant to subdivision (4) of subsection (a) of section 32-1r of the general statutes, as amended by this act. Such working group shall include businesses that operate both within and without this state, and that are eligible for the tax credit and abatement programs offered by this state.

(b) The department shall use the competitiveness matrix developed pursuant to subsection (a) of this section to assess the competitiveness of the state's tax credit and abatement programs in the next scheduled report submitted pursuant to section 32-1r of the general statutes, as amended by this act, and such matrix shall be described in full in such report, as required by subdivision (5) of subsection (a) of said section 32-1r.

Sec. 3. Subsection (f) of section 32-70a of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2012):

(f) On or before January 1, 2013, the commissioner shall assess the performance of each enterprise zone, [and may recommend] whether it continues to meet the eligibility requirements in section 32-70, the types and amount of state financial assistance provided, and all projects or programs completed, or, if incomplete, the status of such projects or programs. The commissioner shall submit a report, in accordance with the provisions of section 11-4a that contains such assessments to the joint standing [committee] committees of the General Assembly having cognizance of all matters relating to the Department of Economic and Community Development [,] and of finance, revenue and bonding, and may recommend that the designation be removed if the commissioner determines that [the] any enterprise zone has not met the performance standards established under subsection (b) of this section. Upon such recommendation, the General Assembly may remove the designation.

This act shall take effect as follows and shall amend the following sections:
Section 1	July 1, 2012	32-1r
Sec. 2	July 1, 2012	New section
Sec. 3	July 1, 2012	32-70a(f)

Statement of Purpose:

To provide better sources of information for use by the Business Tax Credit and Tax Policy Review Committee.

[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.]