Substitute House Bill No. 6787

Public Act No. 99-203

An Act Transferring Responsibility for Certain Tax Credit Programs from the Department of Social Services to the Labor Department.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 12-217y of the general statutes is repealed and the following is substituted in lieu thereof:

(a) As used in this section: [, "business firm"]

(1) "Business firm" means any business entity authorized to do business in this state and subject to the corporation business tax imposed under this chapter; ["qualifying employee" means]

(2) "Qualifying employee" means (A) during fiscal year 1999, any employee who is employed not less than [fifteen] twenty-five hours per week by the same business firm and who, at the time of being hired by such business firm, is and has been receiving benefits from the temporary family assistance program for more than nine months and meets other requirements that the Labor Commissioner [of Social Services] may establish in regulations adopted in accordance with chapter 54, or (B) during and after fiscal year 2000, any employee who is employed not less than thirty hours per week by the same business firm and who, at the time of being hired by such business firm, is and has been receiving benefits from the temporary family assistance program for more than nine months and meets other requirements that the Labor Commissioner may establish in regulations adopted in accordance with chapter 54. For purpose of this subdivision, the number of hours per week an employee participates in a job training program approved by the Labor Commissioner shall be included in calculating the number of hours such employee is employed.

(b) Any business firm which desires to hire a qualifying employee in any income year commencing on or after January 1, 1997, may apply to the Labor Commissioner [of Social Services] for an allocation of a tax credit in an amount equal to one hundred twenty-five dollars for each full month that such employee is employed by such firm. The application for a tax credit under this subsection shall set forth information that said commissioner deems necessary in regulations adopted in accordance with chapter 54.

(c) Applications shall be submitted annually, before such expenditures are made, to the Labor Commissioner [of Social Services] on or after July first but not later than December thirty-first. The commissioner shall approve or disapprove each application within sixty days of its submission to the commissioner based on (1) the compliance of such application with the provisions of this section, (2) regulations adopted pursuant to this section, and (3) the amount of tax credits remaining in the annual allotment provided in this section for the year involved. The commissioner shall approve applications in the order in which they are received in the commissioner's office between July first and December thirty-first of each year. If the commissioner approves the application of the business firm and if the limit for tax credit for that year has not yet been allocated, the commissioner shall allocate and commit an amount of tax credits to such business firm. Any business firm receiving such an allocation shall, within thirty days of the end of its income year, submit a report on the number of full months that qualifying employees were employed by such firm during such year.

(d) The credit shall be claimed on the tax return for the income year during which qualifying employees were employed for full months by the business firm. Any tax credit not used in the period during which the expenditure was made may be carried forward for the five immediately succeeding income years until the full credit has been allowed.

(e) In no event shall the total amount of all tax credits allowed to all business firms pursuant to the provisions of this section exceed one million dollars in any one fiscal year.

(f) No credit under subsection (c) of this section shall be allowed, with respect to wages paid to any qualifying employee, to any business firm that has previously been granted a tax credit under this section with respect to wages paid to the same employee.

Sec. 2. Section 17b-16 of the general statutes is repealed and the following is substituted in lieu thereof:

The Labor Department, in cooperation with the Department of Social Services, shall provide information [concerning] and assistance in obtaining, within available appropriations, the federal earned income credit [program] established pursuant to 26 USC 32, to each applicant for or recipient of assistance from the department. The Labor Department, [of Social Services,] in cooperation with the Department of Revenue Services, shall promote the earned income credit program to recipients of [time-limited benefits received] benefits pursuant to section 17b-112.

Sec. 3. This act shall take effect July 1, 1999, and shall be applicable to income years commencing on or after January 1, 1999.

Approved June 23, 1999

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