OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
EMERGENCY CERTIFICATION
HB-5505
AN ACT CONCERNING CERTAIN AEROSPACE
MANUFACTURING PROJECTS.
OFA Fiscal Note
State Impact:
Agency Affected Fund-Effect FY 23 $ FY 24 $
Department of Revenue Services GF - Potential See Below See Below
Revenue Loss
Note: GF=General Fund
Municipal Impact: None
Explanation
The bill allows the Department of Economic and Community
Development (DECD) to enter into an assistance agreement with an
eligible company undertaking up to two aerospace manufacturing
projects. The bill permits a maximum total tax benefit of $50 million for
one project and $75 million for two projects.
The tax benefits may be utilized only during the benefits period,
defined in the bill as the period commencing on the effective date of the
assistance agreement and ending on June 30, 2032. The maximum
benefit that may be utilized in any given fiscal year is $6.25 million for
one project and $9.375 million for two projects.
For illustrative purposes, the table below provides a schedule of the
potential maximum tax impact by fiscal year.
Primary Analyst: EW 4/26/22
Contributing Analyst(s): MM, CW
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Maximum Tax Benefit/State Revenue Loss
In millions
Total Maximum
Fiscal Year One Project Two Projects Benefit
FY 23 6.25 - 6.25
FY 24 6.25 - 6.25
FY 25 6.25 3.125 9.375
FY 26 6.25 3.125 9.375
FY 27 6.25 3.125 9.375
FY 28 6.25 3.125 9.375
FY 29 6.25 3.125 9.375
FY 30 6.25 3.125 9.375
FY 31 - 3.125 3.125
FY 32 - 3.125 3.125
Total 50.00 25.00 75.00
Tax Benefit Details. The bill requires the benefit to be used to offset
the company's sales and use tax liabilities. If the company is unable to
fully utilize the benefit against the sales and use tax, then the company
may claim the excess against the corporation business tax, up to $5
million per year, and $45 million total over the agreement's term. Any
excess greater than $5 million would be carried forward to future
compliance years. If the amount of the corporation business tax credit is
greater than the company's liability, then the Department of Revenue
Services shall refund that excess.
Recapture. Under the bill, if DECD determines that the company
failed to meet any of the minimum requirements for a compliance year,
the company must repay any project tax benefit that it used for that year
and pay any penalty established under the assistance agreement.
The Out Years
The ongoing fiscal impact is limited to the total annual impact noted
above. No additional fiscal impact is anticipated.
The preceding Fiscal Impact statement is prepared for the benefit of the members of the General Assembly, solely
for the purposes of information, summarization and explanation and does not represent the intent of the General
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Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of
informational sources, including the analysts professional knowledge. Whenever applicable, agency data is
consulted as part of the analysis, however final products do not necessarily reflect an assessment from any
specific department.