Substitute House Bill No. 6950
          Substitute House Bill No. 6950

              PUBLIC ACT NO. 97-193


AN   ACT  FACILITATING  COLLECTION  OF  DELINQUENT
CORPORATE TAXES.


    Be  it  enacted  by  the  Senate  and House of
Representatives in General Assembly convened:
    Section  1.  Subdivision (72) of section 12-81
of  the  general  statutes  is  repealed  and  the
following is substituted in lieu thereof:
    (72)  [(a)]  (A)  New machinery and equipment,
as defined herein, acquired after October 1, 1990,
and  newly-acquired  machinery  and  equipment, as
defined herein, acquired on or after July 1, 1992,
by   the  person  claiming  exemption  under  this
subdivision, provided this exemption shall only be
applicable  in  the  five  full  assessment  years
following  the  assessment  year  in  which   such
machinery or equipment is acquired, subject to the
provisions  of  subparagraph  [(b)]  (B)  of  this
subdivision.  Machinery  and equipment acquired on
or  after  July  1,  1996,   and   used   in   the
biotechnology  industry,  whose predominant use is
for manufacturing, processing or fabricating;  for
research  and  development, including experimental
or laboratory research and development, design  or
engineering;   for   the   significant  servicing,
overhauling  or  rebuilding   of   machinery   and
equipment;  or  for  measuring  or  testing, shall
qualify for the exemption under  this  subsection.
For  the  purposes  of this subdivision: [(A)] (i)
"Machinery" and "equipment" mean tangible personal
property   which   is   [(i)]   installed   in   a
manufacturing facility operated by a manufacturer,
either  five-year property or seven-year property,
as those terms are defined in  Section  168(e)  of
the   Internal   Revenue  Code  of  1986,  or  any
subsequent corresponding internal revenue code  of
the  United  States, as from time to time amended,
and  the  predominant  use   of   which   is   for
manufacturing,   processing  or  fabricating;  for
research and development,  including  experimental
or  laboratory research and development, design or
engineering directly related to manufacturing; for
the    significant   servicing,   overhauling   or
rebuilding  of   machinery   and   equipment   for
industrial  use  or the significant overhauling or
rebuilding of other products on a  factory  basis;
for  measuring  or testing or for metal finishing;
or  [(ii)]  used  in  the  production  of   motion
pictures,  video and sound recordings. "Machinery"
means the basic machine itself, including  all  of
its  component  parts  and  contrivances  such  as
belts, pulleys, shafts,  moving  parts,  operating
structures  and  all  equipment or devices used or
required  to  control,  regulate  or  operate  the
machinery,    including,    without    limitation,
computers and data processing equipment,  together
with  all  replacement  and repair parts therefor,
whether purchased  separately  or  in  conjunction
with a complete machine, and regardless of whether
the  machine  or  component  parts   thereof   are
assembled   by  the  taxpayer  or  another  party.
"Equipment"  means  any   device   separate   from
machinery   but   essential  to  a  manufacturing,
processing  or  fabricating  process.  [(B)]  (ii)
"Manufacturing  facility"  means that portion of a
plant, building or other real property improvement
used for manufacturing, processing or fabricating,
for   research    and    development,    including
experimental    or    laboratory    research   and
development,  design   or   engineering   directly
related  to  manufacturing,  for  the  significant
servicing, overhauling or rebuilding of  machinery
and   equipment   for   industrial   use   or  the
significant overhauling  or  rebuilding  of  other
products  on  a  factory  basis,  for measuring or
testing  or  for  metal  finishing.  [(C)]   (iii)
"Manufacturing"  means  the activity of converting
or  conditioning  tangible  personal  property  by
changing   the   form,   composition,  quality  or
character of the property  for  ultimate  sale  at
retail or use in the manufacturing of a product to
be ultimately sold at retail. Changing the quality
of property shall include any substantial overhaul
of the property that results  in  a  significantly
greater service life than such property would have
had in  the  absence  of  such  overhaul  or  with
significantly  greater  functionality  within  the
original service  life  of  the  property,  beyond
merely  restoring  the  original functionality for
the balance of the original  service  life.  [(D)]
(iv)  "Fabricating"  means to make, build, create,
produce  or  assemble   components   or   tangible
personal  property  work  in  a  new  or different
manner. [(E)] (v) "Processing" means the  physical
application  of  the materials and labor necessary
to  modify  or  change  the   characteristics   of
tangible  personal property. [(F)] (vi) "Measuring
or  testing"  includes  both  nondestructive   and
destructive   measuring   or   testing,   and  the
alignment and calibration of machinery,  equipment
and    tools,    in   the   furtherance   of   the
manufacturing,  processing   or   fabricating   of
tangible    personal    property.    [(G)]   (vii)
"Biotechnology"   means   the    application    of
technologies,  such as recombinant DNA techniques,
biochemistry,  molecular  and  cellular   biology,
genetics  and genetic engineering, biological cell
fusion techniques,  and  new  bioprocesses,  using
living   organisms,  or  parts  of  organisms,  to
produce or modify products, to improve  plants  or
animals,   to   development   microorganisms   for
specific  uses,  to  identify  targets  for  small
molecule  pharmaceutical development, to transform
biological  systems  into  useful  processes   and
products or to develop microorganisms for specific
uses;
    [(b)]  (B)  Any person who on October first in
any year holds title to  machinery  and  equipment
for  which  he  desires  to  claim  the  exemption
provided in this subdivision shall file  with  the
assessor or board of assessors in the municipality
in which the machinery or equipment is located, on
or  before the first day of November in such year,
a list of such  machinery  or  equipment  together
with  written  application claiming such exemption
on a form  prescribed  by  the  Secretary  of  the
Office  of Policy and Management. Such application
shall include the taxpayer  identification  number
assigned  to  the  claimant by the Commissioner of
Revenue  Services   and   the   federal   employer
identification  number assigned to the claimant by
the Secretary of the Treasury. If  title  to  such
equipment  is  held  by  a  person  other than the
person claiming the exemption, the claimant  shall
include  on  his application information as to the
portion of the total acquisition cost incurred  by
him, and on or before the first day of November in
such  year,  the  person  holding  title  to  such
machinery  and equipment shall file a list of such
machinery with the assessor of the municipality in
which  the  manufacturing facility of the claimant
is located. Such person shall include on the  list
information   as  to  the  portion  of  the  total
acquisition cost incurred by  him.  Commercial  or
financial  information  in any application or list
filed under this section shall  not  be  open  for
public  inspection,  provided  such information is
given in confidence and is not  available  to  the
public  from  any  other source. The provisions of
this subdivision regarding the filing of lists and
information  shall  not supersede the requirements
to file tax lists  under  sections  12-42,  12-43,
12-57a and 12-59. In substantiation of such claim,
the claimant  and  the  person  holding  title  to
machinery  and  equipment  for  which exemption is
claimed shall present to the assessor or board  of
assessors  such  supporting  documentation as said
secretary may require, including, but not  limited
to,  invoices,  bills of sale, contracts for lease
and  bills  of  lading.  Failure  to   file   such
application  in  this  manner  and form within the
time limit prescribed shall constitute a waiver of
the  right  to  such exemption for such assessment
year, unless an extension of time  is  allowed  by
the   Secretary   of  the  Office  of  Policy  and
Management as set forth in section 12-81k and upon
payment  of  the  required fee for late filing. If
title to exempt machinery is  conveyed  subsequent
to   October   first   in   any  assessment  year,
entitlement to such exemption shall terminate  for
the next assessment year and there shall be no pro
rata application  of  the  exemption  unless  such
machinery  or  equipment continues to be leased by
the manufacturer who claimed and was approved  for
the  exemption  in  the  previous assessment year.
Machinery or equipment that was exempt under  this
subdivision  for  a  five-year  term  or a portion
thereof shall not be eligible for  exemption  upon
transfer  to a business organization related to or
affiliated with the seller;
    [(c)]  (C)  Any  person claiming the exemption
provided under this subdivision for  machinery  or
equipment  shall  not  be  eligible  to  claim the
exemption provided under subdivision (60) of  this
section  or  subdivision  (70) of this section for
the same machinery or equipment. The state and the
municipality  and  district  shall hold a security
interest,  as  defined  in  subdivision  (37)   of
section  42a-1-201,  in any machinery or equipment
which is exempt from  taxation  pursuant  to  this
subdivision, in an amount equal to the tax revenue
reimbursed or lost, as  the  case  may  be,  which
shall   be   subordinate  to  any  purchase  money
security   interest,   as   defined   in   section
42a-9-107.   Such   security   interest  shall  be
enforceable against the claimant for a  period  of
five years after the last assessment year in which
such exemption was received in any case  in  which
said   manufacturer   ceases   all   manufacturing
operations or moves its  manufacturing  operations
entirely  out  of  this  state.  A  public service
company, as defined in section 16-1, shall not  be
eligible  for  the  exemption  provided under this
subdivision;
    [(d)]  (D)  A claim for property tax exemption
under  this  subdivision  may  be  denied  by  the
assessor   or   board  of  assessors  of  a  town,
consolidated town and city  or  consolidated  town
and   borough,  with  the  consent  of  the  chief
executive officer  thereof,  if  the  claimant  is
delinquent in a property tax payment to such town,
consolidated town and city  or  consolidated  town
and  borough,  pursuant  to  section  12-146,  for
property owned by such claimant. Before  any  such
claim   is   denied,  the  assessor  or  board  of
assessors  shall  send  written  notice   to   the
claimant,  stating  that  he may pay the amount of
such delinquent tax or  enter  into  an  agreement
with  such  town,  consolidated  town  and city or
consolidated town  and  borough  for  the  payment
thereof,  by  the  date  set forth in said notice,
provided, such date shall not be less than  thirty
days after the date of such notice. Failure on the
part of the claimant to  pay  the  amount  of  the
delinquent  tax  or enter into an agreement to pay
the amount thereof by said date shall result in  a
disallowance of the exemption being claimed;
    (E) THE SECRETARY, IN HIS DISCRETION, MAY DENY
ANY CLAIM FOR  EXEMPTION  UNDER  THE PROVISIONS OF
THIS SUBDIVISION FOR  NEW  MACHINERY AND EQUIPMENT
BY A CLAIMANT  WHO IS DELINQUENT IN THE PAYMENT OF
CORPORATION  BUSINESS TAX  IMPOSED  UNDER  CHAPTER
208, AS REPORTED  ON  THE  LIST  PROVIDED  BY  THE
COMMISSIONER  OF  REVENUE   SERVICES  PURSUANT  TO
SUBSECTION (b) OF  SECTION  12-7a,  AS  AMENDED BY
SECTION 3 OF  THIS  ACT,  AND  WHO  QUALIFIED  FOR
EXEMPTION UNDER THIS  SUBDIVISION IN THE PRECEDING
YEAR.  ON  OR  BEFORE  SEPTEMBER  FIRST  ANNUALLY,
COMMENCING SEPTEMBER 1,  1998, THE SECRETARY SHALL
SEND A WRITTEN  NOTICE  TO ANY CLAIMANT IDENTIFIED
ON SAID LIST  AND  TO  THE ASSESSOR OF THE TOWN IN
WHICH THE PROPERTY IS SUBJECT TO TAXATION, STATING
THAT THE PROPERTY  TAX  EXEMPTION  ALLOWED BY THIS
SUBDIVISION FOR THE  ASSESSMENT DATE FOLLOWING THE
DATE ON WHICH SUCH NOTICE IS SENT, SHALL BE DENIED
BY THE ASSESSOR  OF THE TOWN IN WHICH THE PROPERTY
OF THE TAXPAYER  IS SUBJECT TO TAXATION UNLESS THE
TAXPAYER PROVIDES WRITTEN  DOCUMENTATION  FROM THE
DEPARTMENT   OF   REVENUE    SERVICES   THAT   THE
DELINQUENCY  HAS  BEEN   CLEARED.   SUCH   WRITTEN
DOCUMENTATION   SHALL   SUBSTANTIATE    THAT   THE
DELINQUENCY WAS CLEARED ON OR BEFORE THE STATUTORY
DATE  FOR  THE   FILING   OF  AN  APPLICATION  FOR
EXEMPTION UNDER THIS  SUBDIVISION,  PROVIDED, IF A
TAXPAYER RECEIVES AN  EXTENSION OF THE FILING DATE
PURSUANT TO SECTION  12-81k,  THE DATE BY WHICH HE
SHALL BE REQUIRED  TO  CLEAR  SUCH TAX DELINQUENCY
SHALL BE EXTENDED  FOR  A  LIKE PERIOD OF TIME. NO
ASSESSOR  SHALL APPROVE  AN  APPLICATION  FOR  THE
EXEMPTION  UNDER  THIS  SUBDIVISION  THAT  IS  NOT
ACCOMPANIED BY THE  WRITTEN DOCUMENTATION REQUIRED
FROM A CLAIMANT WHO WAS SENT A NOTIFICATION BY THE
SECRETARY OF THE OFFICE OF POLICY AND MANAGEMENT.
    Sec.  2.  (NEW)  The  Commissioner  of Revenue
Services  may  disallow   any   credit   otherwise
allowable  for  a  taxable  year  against  the tax
imposed under chapter 208 of the general  statutes
if  the company claiming the credit has any amount
of taxes due and unpaid  to  the  state  including
interest,   penalties,   fees  and  other  charges
related thereto for which a period  in  excess  of
thirty  days  has  elapsed  following  the date on
which such taxes were due and which  are  not  the
subject of a timely filed administrative appeal to
the commissioner  or  of  a  timely  filed  appeal
pending    before    any    court   of   competent
jurisdiction. Before any  such  disallowance,  the
commissioner  shall  send  written  notice  to the
company, stating that it may  pay  the  amount  of
such  delinquent  tax  or  enter into an agreement
with the commissioner for the payment thereof,  by
the  date set forth in said notice, provided, such
date shall not be less than thirty days after  the
date  of  such  notice. Failure on the part of the
company to pay the amount of the delinquent tax or
enter  into an agreement to pay the amount thereof
by said date shall result in a disallowance of the
credit being claimed.
    Sec.  3. Section 12-7a of the general statutes
is repealed and the following  is  substituted  in
lieu thereof:
    (a)   The   annual   report  prepared  by  the
Commissioner of Revenue Services for submission to
the   Governor  and  publication  as  provided  in
section 4-60 shall not be required to include  the
name  of  any person liable for payment of any tax
which is unpaid. The  commissioner  shall  prepare
and  maintain  a  list related to each type of tax
levied by  the  state,  containing  the  name  and
address  of  any  person or corporation liable for
payment of any such tax and  the  amount  thereof,
including  any  applicable  interest or penalties,
which tax, as of the end of the fiscal  year  with
respect  to  which  such  report  is  prepared, is
unpaid and a period in excess of ninety  days  has
elapsed  following  the date on which such tax was
due,  exclusive  of  any  tax  determined  to   be
uncollectible  in  accordance  with section 12-37,
any tax on which an appeal is pending and any  tax
which  has  been  abated  by  said commissioner as
provided in section 12-39.  Such  lists  shall  be
available  to  the  public  for  inspection by any
person.
    (b)  THE  COMMISSIONER SHALL ANNUALLY PREPARE,
FROM THE LIST PREPARED PURSUANT TO SUBSECTION  (a)
OF  THIS  SECTION,  A  LIST  OF  TAXPAYERS WHO ARE
DELINQUENT  IN  THE  PAYMENT  OF  THE  CORPORATION
BUSINESS  TAX UNDER CHAPTER 208. THE LIST SHALL BE
ARRANGED  IN  SEQUENTIAL  ORDER  BY  THE  TAXPAYER
IDENTIFICATION NUMBER ASSIGNED BY THE COMMISSIONER
AND SHALL BE PROVIDED  TO  THE  SECRETARY  OF  THE
OFFICE  OF  POLICY  AND  MANAGEMENT NOT LATER THAN
JULY FIFTEENTH ANNUALLY, COMMENCING JULY 15, 1998.
    Sec.  4.  Subsection  (a)  of section 12-15 of
the general statutes is repealed and the following
is substituted in lieu thereof:
    (a)  No  officer  or  employee,  including any
former officer or former employee, of the state or
of  any  other  person  who  has  or had access to
returns or return information in  accordance  with
subdivision  (2) of subsection (c) of this section
shall disclose any return or  return  information,
except  as  hereinafter provided. The commissioner
may disclose (1) returns or return information  to
another  state  agency  or  office,  upon  written
request by the head of such agency or office, when
required  in  the  course of duty or when there is
reasonable cause to believe that any state law  is
being  violated, provided no such agency or office
shall disclose such returns or return information,
other   than   in  a  judicial  or  administrative
proceeding to which such agency  or  office  is  a
party  pertaining to the enforcement of state law,
in  a  form  which  can  be  associated  with,  or
otherwise  identify,  directly  or  indirectly,  a
particular  taxpayer;  (2)   returns   or   return
information  to  the  Auditors of Public Accounts,
when required in the course of duty under  chapter
23;  (3)  returns  or  return  information  to tax
officers  of  another  state  or  of  a   Canadian
province  or  of  a  political subdivision of such
other state or province  or  of  the  District  of
Columbia  or  to  any officer of the United States
Treasury   Department   or   the   United   States
Department   of   Health   and   Human   Services,
authorized for such purpose in accordance with  an
agreement between this state and such other state,
province, political subdivision, the  District  of
Columbia   or   department,   respectively,   when
required in the administration  of  taxes  imposed
under  the  laws  of  such  other state, province,
political subdivision, the District of Columbia or
the   United  States,  respectively,  and  when  a
reciprocal  arrangement  exists;  (4)  returns  or
return   information   in   any  action,  case  or
proceeding in any court of competent jurisdiction,
when   the   commissioner   or   any  other  state
department or agency is a  party,  and  when  such
information  is  directly involved in such action,
case  or  proceeding;  (5)   returns   or   return
information   to  a  taxpayer  or  its  authorized
representative, upon written request for a  return
filed  by  or return information on such taxpayer;
(6) returns to  a  successor,  receiver,  trustee,
executor,  administrator,  assignee,  guardian  or
guarantor  of  a  taxpayer,   when   such   person
establishes,    to   the   satisfaction   of   the
commissioner, that  he  has  a  material  interest
which will be affected by information contained in
such return; (7) information to the assessor of  a
Connecticut  municipality,  when  the  information
disclosed is limited to (A)  a  list  of  real  or
personal  property  that  is  or may be subject to
property taxes in such municipality or (B) a  list
containing  the  name of each person who is issued
any  license,  permit  or  certificate  which   is
required,  under  the provisions of this title, to
be conspicuously displayed and whose address is in
such  municipality; (8) real estate conveyance tax
return   information   or   controlling   interest
transfer  tax return information to the town clerk
of a  Connecticut  municipality.  Any  person  who
violates  any  provision  of this section shall be
fined  not  more  than  one  thousand  dollars  or
imprisoned  not  more  than  one year or both; (9)
RETURNS OR RETURN INFORMATION TO THE SECRETARY  OF
THE  OFFICE  OF POLICY AND MANAGEMENT FOR PURPOSES
OF SUBSECTION (b) OF SECTION 12-7a, AS AMENDED  BY
SECTION 3 OF THIS ACT.
    Sec.  5.  This  act shall take effect from its
passage  and  be  applicable   to   income   years
commencing on or after January 1, 1998.

Approved June 24, 1997