New State Laws Affect Economy, Schools, Taxes
New laws taking effect this spring and summer include measures to reform Connecticut’s education system, improve the economy, modify state tax law and implement a revised state budget.
Many other new laws will become effective Oct. 1, 2010, or Jan. 1, 2011; CBIA will soon publish a complete summary of business-related legislation from the 2010 Connecticut General Assembly.
- Property tax exemptions: PA 10-162 (SB-175), effective June 9, 2010—Extends enterprise zone property tax exemptions and corporation business tax credits to businesses that acquire or develop facilities in municipalities hurt by major aerospace or defense plant closings.
- Captive real estate investment trusts: PA 10-188 (HB-5494), effective June 7, 2010, and applicable to income years starting on or after Jan. 1, 2010—Eliminates a state corporation tax deduction for federally deductible dividends companies receive from “captive” real estate investment trusts (REITs) unless the captive REIT is also subject to the Connecticut corporation tax.
- Amended tax returns: PA 10-188, (HB-5494), effective June 7, 2010—Expands requirements for filing amended state corporation and income tax returns when taxpayers file amended federal corporation tax returns, or amended income tax returns with other states or the District of Columbia.
- Sales tax permits for inactive sellers: PA 10-188 (HB-5494), effective June 7, 2010 — Allows only those who are actively conducting business as sellers to hold sales tax permits. It also enables the state to cancel a permit if a seller’s tax returns show no sales for two successive annual periods.
- Motor carrier road tax reports: PA 10-188, (HB-5494), effective June 7, 2010 — Requires all carriers filing quarterly operating reports to file them on the last days of January, April, July, and October. The act exempts motor carriers that both operate and buy all their fuel only in Connecticut from all reporting; it requires all other carriers to file quarterly reports.
- Neighborhood Assistance Act tax credits: PA 10-188 (HB-5494), effective June 7, 2010—Increases, from 40% to 60% of the investment, Neighborhood Assistance Act tax credits for business investments in community-based programs for alcoholism prevention or treatment.
- Electronic tax filing and paying: PA 10-188 (HB-5494), effective June 7, 2010—Reduces the threshold for electronically paying taxes or transferring withholding taxes from over $10,000 annually to $4,000 or more in annual tax liability and more than $2,000 in annual withholding tax payments.
- Historic structures tax credit: PA 10-188, (HB-5494), effective June 7, 2010—Makes business tax credits available to property owners who rehabilitate historic structures for mixed commercial and residential use.
- Energy costs New charges: PA 10-179 (SB-494), effective May 27, 2010—Adds two charges to consumers’ electricity bills to back state bonds that will help fund the state budget. Also requires electric companies to assess their customers a per-kilowatt-hour charge (from Jan. 1, 2011, through June 30, 2011) to raise revenue for the state’s General Fund.
- Higher standards: PA 10-111, (SB-438), effective July 1, 2010—Raises the bar on high school graduation standards and helps narrow the state’s achievement gap. It likely also has improved the state’s bid for potential federal Race to the Top funds. In addition, the new law removes the cap on high-achieving charter schools; upgrades IT systems to capture data on students’ academic performance; promotes the Alternate Route to Teacher Certification for people with workplace experience; boosts the spread of Advanced Placement courses; and sets new school accountability standards to narrow the state’s achievement gap.
- Technical schools management: PA 10-76 (SB-379), effective July 1, 2010 —Determines how and when a state vocational-technical school can be closed, and addresses administrative issues related to how they are run.
- Credits and incentives: PA 10-75 (HB-5435), effective May 6, 2010—Creates an angel investor tax credit, makes loans and lines of credit available to small businesses and nonprofit organizations, and provides education loan reimbursement and training grants for careers in green technology, life sciences and health information technology
- Microbusinesses: PA 10-190 (HB-5498), effective July 1, 2010—Among other things, facilitates the participation of microbusinesses (with gross revenues under $3 million) in state contracts and provides revolving loan funds to the state’s microbusinesses.
- Small businesses: PA 10-145 (HB-5500), effective June 7, 2010—Expands the duties of the state’s Office of Small Business Affairs to include a single contact point for small businesses, and establishes a Small Business Advisory Board to advise the DECD on the resources available to small businesses.
- Film tax credit: Public Act 10-107 (SB-176), effective July 1, 2010, and applicable to income years commencing on or after Jan. 1, 2010— Tightens the criteria companies must meet to claim the tax credits for producing films or developing film-related infrastructure in Connecticut.
Environment & Land Use
The major environmental legislation was a landmark regulatory reform bill, PA 10-158 (HB-5208), that went into effect as soon as the Governor signed it on June 9 (See story on Page 5). Other new laws include:
- Brownfields: PA 10-135 (HB-5436), most provisions effective July 1, 2010 —Creates a working group to study Connecticut’s approach to cleaning up and redeveloping brownfields, with recommendations due to the legislature’s Commerce Committee by Jan. 15, 2011. It also expands towns’ existing tax-abatement authority for abandoned properties to now include brownfields, and it grants municipalities new authority to fix brownfield property assessments for up to seven years while a site is cleaned up and redeveloped. The law also broadens the use of existing state brownfield funds to include state grant and loan programs targeting clean-ups, and it allows certain regulated activities at brownfields (otherwise prohibited by aquifer protection regulations), to occur under certain circumstances.
- Bottle Bill program: PA 10-25 (SB-127), effective July 1, 2010 —Changes oversight of the Bottle Bill program to the Department of Revenue Services. Also requires Bottle Bill deposits to be held in a special trust fund for the state; mandates quarterly reporting on account balances, credits, and withdrawals; and requires quarterly payment of outstanding balances from “initiators.”Healthcare Insurance information:PA 10-4 (HB-5002), effective July 1, 2010—Creates a health insurance clearinghouse for individuals and small businesses with up to 50 employees.Other new health care laws require:
- Health insurers to report claims denial information to the state (PA 10-19, HB-5303), effective July 1, 2010
- The state Department of Health to include hospital adverse event information in the department’s annual report (PA 10-22, SB-248), effective July 1, 2010
- Managed residential communities to help their residents submit claims on their long-term-care insurance policies (PA 10-127, HB-5113), effective July 1, 2010
For more information about this year’s legislation, contact Bonnie Stewart at 860.244.1925 or email@example.com.
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