OLR Bill Analysis

sSB 327

AN ACT ESTABLISHING A STATE SAVINGS PLAN FOR RECENT COLLEGE GRADUATES WHO WORK IN CONNECTICUT.

SUMMARY:

This bill requires the state treasurer, in consultation with the revenue services commissioner, to (1) establish a First-time Homebuyer Savings program for graduates of any college in the state and (2) adopt implementing regulations by October 1, 2009.

Eligible participants must graduate on or after January 1, 2010 and within one year after receiving their degree elect to have up to $ 5,000 of the taxes they pay on their gross income in a calendar year deposited into the nonlapsing First-time Homebuyers Fund the bill establishes. Participants must live in Connecticut before the state treasurer pays money out of the fund for the purchase of their first home.

The bill requires the state treasurer to administer the fund, invest its proceeds, and credit the investment earnings to the General Fund. She may deduct administrative costs from the fund. It requires the revenue services commissioner to segregate the taxes for deposit into the fund.

The bill requires that money in the First-time Homebuyers Fund that is not used for the purchase of a home be transferred to the General Fund. There is no time limit on program participation or deadline by which participants must purchase their first home; thus, it is unclear when or if any funds would be transferred to the General Fund.

Annually, beginning January 1, 2011, the state treasurer must submit to the Government Administration and Elections Committee a status report on the program, including usage and recommendations for legislation.

EFFECTIVE DATE: July 1, 2009

BACKGROUND

Related Bill

HB 5073, favorably reported by the Housing Committee, requires the Department of Economic and Community Development to establish a voluntary first-time homebuyer savings program for graduates of state public or independent higher education institutions. The program is funded by tax revenue that the state receives from the graduates. Graduates have 10 years from the date of graduation to use money in the fund to purchase a home.

COMMITTEE ACTION

Government Administration and Elections Committee

Joint Favorable Substitute