House Bill No. 7069
               House Bill No. 7069

              PUBLIC ACT NO. 97-322


AN  ACT  CONCERNING   THE  STATE  BUDGET  AND  TAX
REDUCTIONS FOR THE BIENNIUM ENDING JUNE 30, 1999.

    Be  it  enacted  by  the  Senate  and House of
Representatives in General Assembly convened:
    Section 1. Notwithstanding  the  provisions of
section 81 of  special  act 97-21, in the event of
financial  exigency,  and  after  first  realizing
savings as a result of not filling existing funded
vacancies,  the  Governor   may  order  additional
layoffs to the  extent  necessary  to  achieve the
savings attributable to  (1)  the  elimination  of
agency programs and services, reductions in agency
position counts and line item reductions in agency
personal services required  by  said  act, (2) the
early retirement incentive  program established by
said section 81  in  an  amount  not to exceed the
savings  set  forth   in  said  act  and  (3)  the
privatizing of information  technology services in
an amount not  to  exceed the savings set forth in
said act.
    Sec. 2. Section  83  of  special  act 97-21 is
repealed and the  following is substituted in lieu
thereof:
    (a) From July  1,  1997,  to  June  30,  1999,
inclusive, no contracts or amendments to contracts
for information system or telecommunication system
facilities, equipment or  services, [which, in the
aggregate, have a  value  in excess of ten million
dollars] ENTERED INTO  PURSUANT TO THE REQUEST FOR
PROPOSAL    ISSUED   BY    THE    DEPARTMENT    OF
ADMINISTRATIVE SERVICES DATED  FEBRUARY  21, 1997,
executed by any  state  agency  shall be effective
except as provided in this section and sections 84
and 85 of [this act] SPECIAL ACT 97-21.
    (b) Upon the  execution  of  any  contract  or
amendment which exceeds such aggregate amount, and
upon the execution  of  any subsequent contract or
amendment, the state  agency  shall  promptly file
the contract or amendment with the State Auditors.
    (c) Not later  than [ninety] SEVENTY-FIVE days
after any such contract or amendment is filed with
the  State  Auditors,   such  auditors  (1)  shall
conduct an independent  evaluation of the contract
or amendment to  determine  whether the [selection
of  the contractor  and]  the  provisions  of  the
contract or amendment  serve the best interests of
the state, including,  but  not  limited  to,  (A)
efficiency,    (B)   economy,    (C)    contractor
qualifications,  including, but  not  limited  to,
capacity for performance  and  accountability, and
(D) effective delivery  of services, and (2) shall
submit a report on their findings and conclusions,
and the contract  or  amendment,  to  the  General
Assembly,  through the  clerks  of  the  House  of
Representatives and the Senate. The State Auditors
may execute contracts with independent consultants
for assistance in  conducting  such evaluation and
preparing such report.
    (d) Upon receipt of a report and a contract or
amendment from the State Auditors under subsection
(c) of this  section,  the speaker of the House of
Representatives and the  president  pro tempore of
the Senate shall  refer the report and contract or
amendment to the  joint standing committees of the
General  Assembly  having  cognizance  of  matters
relating  to appropriations  and  the  budgets  of
state agencies and  government administration, for
their review. Such  contract  or  amendment  shall
take  effect [sixty]  FORTY-FIVE  days  after  the
State Auditors submit  the  report and contract or
amendment  to  the  General  Assembly  unless  the
General   Assembly  rejects   such   contract   or
amendment as a  whole by a [majority] THREE-FIFTHS
vote of [both houses] EITHER HOUSE.
    Sec. 3. The appropriation to the Department of
Social Services in section 11 of special act 97-21
for  Disproportionate Share  -  Medical  Emergency
Assistance, is reduced by $34,000,000.
    Sec. 4. Section  7  of  public  act  97-309 is
repealed and the  following is substituted in lieu
thereof:
    (a) Any resident  of this state, as defined in
subdivision  (1)  of  subsection  (a)  of  section
12-701 of the general statutes, subject to the tax
under chapter 229  of the general statutes for any
taxable year shall  be  entitled  to  a  credit in
determining the amount of tax liability under said
chapter  229, for  a  portion  of  the  amount  of
property tax, as defined in this section, actually
paid  by such  person  on  such  person's  primary
residence or motor vehicle in accordance with this
section, provided in  the  case  of  a  person who
files a return  under  the  federal income tax for
such taxable year  as  an  unmarried individual, a
married individual filing  separately or a head of
household, one motor vehicle shall be eligible for
such credit and  in the case of a husband and wife
who file a  return  under  federal  income tax for
such taxable year  as  married  individuals filing
jointly, no more  than two motor vehicles shall be
eligible for a credit under the provisions of this
section.
    (b)  The credit  allowed  under  this  section
shall not exceed  two  hundred fifteen dollars for
the taxable year  commencing  January 1, 1997, and
for taxable years  commencing  on or after January
1, 1998, two  hundred  [seventy-five]  EIGHTY-FIVE
dollars of the property tax first becoming due and
actually paid during  the taxpayer's taxable year.
In the case  of  any  husband  and wife who file a
return  under the  federal  income  tax  for  such
taxable year as married individuals filing a joint
return, the credit  allowed  shall not exceed such
amounts  for  each   such  taxable  year,  in  the
aggregate, of the  property tax first becoming due
and actually paid  during the taxable year of such
husband and wife.
    (c) In the case of any such taxpayer who files
under the federal income tax for such taxable year
as  an  unmarried   individual  whose  Connecticut
adjusted gross income  exceeds  fifty-two thousand
five hundred dollars,  the  amount  of  the credit
that exceeds one  hundred dollars shall be reduced
by ten per  cent for each ten thousand dollars, or
fraction   thereof,  by   which   the   taxpayer's
Connecticut  adjusted gross  income  exceeds  said
amount. In the case of any such taxpayer who files
under the federal income tax for such taxable year
as a married  individual  filing  separately whose
Connecticut adjusted gross  income  exceeds  fifty
thousand two hundred  fifty dollars, the amount of
the credit that  exceeds one hundred dollars shall
be reduced by  ten per cent for each five thousand
dollars,  or  fraction   thereof,   by  which  the
taxpayer's  Connecticut  adjusted   gross   income
exceeds said amount. In the case of a taxpayer who
files  under  the  federal  income  tax  for  such
taxable  year  as   a   head  of  household  whose
Connecticut   adjusted   gross    income   exceeds
seventy-eight thousand five  hundred  dollars, the
amount of the  credit  that  exceeds  one  hundred
dollars shall be  reduced by ten per cent for each
ten thousand dollars or fraction thereof, by which
the taxpayer's Connecticut  adjusted  gross income
exceeds said amount. In the case of a taxpayer who
files under federal  income  tax  for such taxable
year as married  individuals  filing jointly whose
Connecticut  adjusted  gross  income  exceeds  one
hundred thousand five  hundred dollars, the amount
of the credit  that  exceeds  one  hundred dollars
shall be reduced  by  ten  per  cent  for each ten
thousand dollars, or  fraction  thereof,  by which
the taxpayer's Connecticut  adjusted  gross income
exceeds said amount.
    (d) The credit allowed under the provisions of
this section shall  be  available  for  any person
leasing a motor  vehicle  pursuant  to  a  written
agreement for a  term  of more than one year. Such
lessee  shall  be   entitled   to  the  credit  in
accordance with the provisions of this section for
the taxes actually paid by the lessor or lessee on
such  leased  vehicle,  provided  the  lessee  was
lawfully in possession  of  the  motor  vehicle at
such time when  the  taxes  first  became due. The
lessor shall provide the lessee with documentation
establishing,   to   the   satisfaction   of   the
Commissioner of Revenue  Services,  the  amount of
property tax paid  during the time period in which
the lessee was lawfully in possession of the motor
vehicle. The lessor of the motor vehicle shall not
be entitled to  a  credit  under the provisions of
this section.
    (e) The credit may only be used to reduce such
qualifying taxpayer's tax  liability  for the year
for which such  credit is applicable and shall not
be used to  reduce such tax liability to less than
zero.
    (f) The amount of tax due pursuant to sections
12-705 and 12-722 of the general statutes shall be
calculated without regard to this credit.
    (g) For the purposes of this section "property
tax" means the  amount  of  property  tax actually
paid to a  Connecticut  political subdivision by a
taxpayer on the  taxpayer's  primary  residence or
motor vehicles, and  "motor vehicle" means a motor
vehicle, as defined in section 14-1 of the general
statutes, which is privately owned or leased.
    Sec. 5. Subsection  (a)  of  section 12-700 of
the general statutes,  as  amended by section 8 of
public act 97-309,  is  repealed and the following
is substituted in lieu thereof:
    (a) There is hereby imposed on the Connecticut
taxable income of  each  resident  of this state a
tax (1) at  the rate of four and one-half per cent
of such Connecticut  taxable  income  for  taxable
years commencing on  or after January 1, 1992, and
prior to January 1, 1996.
    (2) For taxable  years  commencing on or after
January 1, 1996,  but prior to January 1, 1997, in
accordance with the following schedule:
    (A) For any  person  who  files a return under
the federal income tax for such taxable year as an
unmarried individual or  as  a  married individual
filing separately:

    Connecticut Taxable Income  Rate of Tax
    Not over $2,250             3.0%
    Over $2,250                 $67.50, plus 4.5%
                                of the excess over
                                $2,250

    (B) For any  person  who  files a return under
the federal income  tax for such taxable year as a
head of household,  as  defined in Section 2(b) of
the Internal Revenue Code:

    Connecticut Taxable Income  Rate of Tax
    Not over $3,500             3.0%
    Over $3,500                 $105.00, plus 4.5%
                                of the excess over
                                $3,500

    (C) For any husband and wife who file a return
under the federal income tax for such taxable year
as married individuals  filing jointly or a person
who files a return under the federal income tax as
a surviving spouse,  as defined in Section 2(a) of
the Internal Revenue Code:

    Connecticut Taxable Income  Rate of Tax
    Not over $4,500             3.0%
    Over $4,500                 $135.00, plus 4.5%
                                of the excess over
                                $4,500

    (D) For trusts  or  estates,  the  rate of tax
shall be 4.5% of their Connecticut taxable income.
    (3) For taxable  years  commencing on or after
January 1, 1997,  but prior to January 1, 1998, in
accordance with the following schedule:
    (A) For any  person  who  files a return under
the federal income tax for such taxable year as an
unmarried individual or  as  a  married individual
filing separately:

Connecticut Taxable Income      Rate of Tax
Not over [$4,500] $6,250         3.0%
Over [$4,500] $6,250            [$135.00] $187.50
                                plus 4.5% of the
                                excess over
                                [$4,500] $6,250

    (B) For any  person  who  files a return under
the federal income  tax for such taxable year as a
head of household,  as  defined in Section 2(b) of
the Internal Revenue Code:

Connecticut Taxable Income    Rate of Tax
Not over [$7,000] $10,000      3.0%
Over [$7,000] $10,000        [$210.00] $300.00,
                              plus 4.5%
                              of the excess over
                              [$7,000] $10,000

    (C) For any husband and wife who file a return
under the federal income tax for such taxable year
as  married  individuals  filing  jointly  or  any
person who files a return under the federal income
tax for such  taxable  year as a surviving spouse,
as defined in Section 2(a) of the Internal Revenue
Code:

Connecticut Taxable Income      Rate of Tax
Not over [$9,000] $12,500        3.0%
Over [$9,000] $12,500           [$270.00] $375.00,
                                plus 4.5% of
                                the excess over
                                [$9,000] $12,500

    (D) For trusts  or  estates,  the  rate of tax
shall be 4.5% of their Connecticut taxable income.
    (4) For taxable  years  commencing on or after
January 1, 1998,  but prior to January 1, 1999, in
accordance with the following schedule:
    (A) For any  person  who  files a return under
the federal income tax for such taxable year as an
unmarried individual or  as  a  married individual
filing separately:

    Connecticut Taxable Income  Rate of Tax
    Not over $7,500             3.0%
    Over $7,500                 $225.00, plus 4.5%
                                of the excess over
                                $7,500

    (B) For any  person  who  files a return under
the federal income  tax for such taxable year as a
head of household,  as  defined in Section 2(b) of
the Internal Revenue Code:

    Connecticut Taxable Income  Rate of Tax
    Not over $12,000            3.0%
    Over $12,000                $360.00 plus
                                4.5% of the excess
                                over $12,000

    (C) For any husband and wife who file a return
under the federal income tax for such taxable year
as  married  individuals  filing  jointly  or  any
person who files a return under the federal income
tax for such  taxable  year as a surviving spouse,
as defined in Section 2(a) of the Internal Revenue
Code:

    Connecticut Taxable Income  Rate of Tax
    Not over $15,000            3.0%
    Over $15,000                $450.00 plus
                                4.5% of the excess
                                over $15,000

    (D) For trusts  or  estates,  the  rate of tax
shall be 4.5% of their Connecticut taxable income.
    (5) For taxable  years  commencing on or after
January 1, 1999,  in accordance with the following
schedule:
    (A) For any  person  who  files a return under
the federal income tax for such taxable year as an
unmarried individual or  as  a  married individual
filing separately:

Connecticut Taxable Income     Rate of Tax
Not over [$9,000] $10,000      3.0%
Over [$9,000] $10,000         [$270.00] $300.00,
                               plus 4.5% of the
                               excess over
                               [$9,000] $10,000

    (B) For any  person  who  files a return under
the federal income  tax for such taxable year as a
head of household,  as  defined in Section 2(b) of
the Internal Revenue Code:

Connecticut Taxable Income     Rate of Tax
Not over [$15,000] $16,000     3.0%
Over [$15,000] $16,000        [$450.00] $480.00,
                               plus 4.5% of the
                               excess over
                               [$15,000] $16,000

    (C) For any husband and wife who file a return
under the federal income tax for such taxable year
as  married  individuals  filing  jointly  or  any
person who files a return under the federal income
tax for such  taxable  year as a surviving spouse,
as defined in Section 2(a) of the Internal Revenue
Code:

Connecticut Taxable Income     Rate of Tax
Not over [$18,000] $20,000      3.0%
Over [$18,000] $20,000         [$540.00] $600.00,
                                plus 4.5% of
                                the excess over
                                [$18,000] $20,000

    (D) For trusts  or  estates,  the  rate of tax
shall be 4.5% of their Connecticut taxable income.
    (6) The provisions  of  this  subsection shall
apply to resident trusts and estates and, wherever
reference is made  in this subsection to residents
of this state,  such  reference shall be construed
to include resident  trusts  and estates, provided
any reference to a resident's Connecticut adjusted
gross income derived  from  sources  without  this
state  or to  a  resident's  Connecticut  adjusted
gross income shall  be construed, in the case of a
resident trust or  estate,  to  mean  the resident
trust  or  estate's   Connecticut  taxable  income
derived from sources  without  this  state and the
resident  trust or  estate's  Connecticut  taxable
income, respectively.
    Sec.  6.  Section   12-700b   of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    (a) For the  purposes  of  computing  the  tax
pursuant to section  12-705  or section 12-722 for
the period prior  to  July 1, 1996, such tax shall
be computed without regard to the rate established
in subdivision (2)  of  subsection  (a) of section
12-700. The Commissioner of Revenue Services shall
issue new withholding  tables  effective  July  1,
1996.
    (b) FOR THE  PURPOSES  OF  COMPUTING  THE  TAX
PURSUANT TO SECTION  12-705  OR SECTION 12-722 FOR
THE PERIOD PRIOR  TO  JULY 1, 1998, SUCH TAX SHALL
BE COMPUTED WITHOUT REGARD TO THE RATE ESTABLISHED
IN SUBDIVISION (3)  OR  (4)  OF  SUBSECTION (a) OF
SECTION  12-700.  THE   COMMISSIONER   OF  REVENUE
SERVICES  SHALL  ISSUE   NEW   WITHHOLDING  TABLES
EFFECTIVE JULY 1, 1998.
    Sec. 7. Section  23  of  public  act 97-309 is
repealed and the  following is substituted in lieu
thereof:
    [This act] PUBLIC ACT 97-309 shall take effect
July 1, 1997,  except  that (1) section 1 shall be
applicable to sales  occurring  on  or  after said
date; (2) sections  7  [and  22]  AND  17 shall be
applicable to income  years commencing on or after
January 1, 1997; (3) section 9 shall be applicable
to income years  commencing on or after January 1,
1998; (4) sections  [15,  16  and]  18,  19 AND 21
shall take effect October 1, 1999; and (5) section
8 shall take  effect the later of July 1, 1997, or
the first day  of  the  calendar month immediately
following  the  last   action  necessary  to  make
effective a final  budget  for the biennium ending
June  30, 1999,  provided  for  purposes  of  this
section any legislative  action  to  continue  the
appropriations for the fiscal year ending June 30,
1997,  with adjustments  shall  not  constitute  a
final budget for  the  biennium  ending  June  30,
1999, and shall  be  applicable  to  income  years
commencing on or after January 1, [1998] 1997.
    Sec. 8. An  affirmative  or  negative  vote on
this  bill  shall  be  construed  to  also  be  an
affirmative  or negative  vote,  respectively,  on
special act 97-21 and public act 97-309.
    Sec. 9. This  act  shall  take  effect July 1,
1997.

Approved June 6, 1997